<PAGE>   1
                                                                    EXHIBIT 10.5


                               FIRST AMENDMENT TO
                           PURCHASE AND SALE AGREEMENT

         THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Agreement")
is made and entered into as of July 23, 1999 (the "Effective Date"), by and
between ARGENT FRANKFORD, L.P., a Texas limited partnership ("Seller"), and HOME
INTERIORS & GIFTS, INC. a Texas corporation ("Buyer").

                         -----------------------------

                              W I T N E S S E T H :

A. Seller and Purchaser entered into that one certain Purchase and Sale
Agreement (the "Agreement") with an effective date of July 19, 1999.

B. Seller and Purchaser hereby intend to amend the Agreement as more
particularly provided herein.

         NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.       Exhibit "D" to the Agreement is deleted and the Exhibit "D" attached to
         this First Amendment is substituted in its place for all purposes.

2.       The first sentence of Section 16.D.(6) is hereby amended and restated
         as follows:

               Closing shall occur in accordance with the terms of Section 6 of
               this Agreement on the date provided in the Option Notice
               (extended, if necessary, in accordance with Section 16.D.3.(e),
               above), subject to the following terms:

3.       Section 16.D.(8) is hereby deleted from the Agreement.

4.       Buyer hereby acknowledges that it does not intend to exercise the right
         to terminate the Agreement pursuant to Section 5 thereof; provided,
         however, that such election shall not extend to or otherwise affect any
         other right of termination granted to Buyer under the Agreement.

5.       Except as amended hereby, the Agreement is in full force and effect.



            [The remainder of this page is left blank intentionally.]



<PAGE>   2

         EXECUTED as of the day and year first above set forth, which shall be
the Effective Date of this First Amendment for all purposes.


                                          SELLER:

                                          ARGENT FRANKFORD, L.P.,
                                          a Texas limited partnership
                                          By:      ARGENT FRANKFORD GP, LLC,
                                          a Texas limited liability company
                                          its General Partner

                                          By: /s/ C. E. CORNUTT
                                             ---------------------------------
                                             Name:    C. E. Cornutt
                                             Title:   President

                                          BUYER:

                                          HOME INTERIORS & GIFTS, INC.
                                          a Texas corporation

                                          By: /s/ BETTINA S. SIMON
                                             ---------------------------------
                                             Name:    Bettina S. Simon
                                                    --------------------------
                                            Title:   Vice President, General
                                                      Counsel and Secretary
                                                    --------------------------






                                       2
<PAGE>   3
DRAFT:   JULY 23, 1999

                                   EXHIBIT "D"

                         TO PURCHASE AND SALE AGREEMENT

                          INDUSTRIAL REAL ESTATE LEASE
                            (SINGLE-TENANT FACILITY)

         THIS LEASE AGREEMENT (the "Lease") is entered into as of the ___ day of
________, 2000, between ARGENT FRANKFORD, L.P. a Texas limited partnership
("Landlord"), and HOME INTERIORS & GIFTS, INC., a Texas corporation ("Tenant").

ARTICLE 1.      BASIC TERMS

         This Article 1 contains the Basic Terms of this Lease between the
Landlord and Tenant. Other Articles and Sections of the Lease referred to in
this Article 1 explain and define the Basic Terms and are to be read in
conjunction with the Basic Terms.

         SECTION 1.01. PROPERTY AND PREMISES. The Property (herein so-called) is
described on Exhibit "A" attached hereto and incorporated herein for all
purposes and is part of Landlord's real property industrial park development
located in Carrollton, Texas known as Frankford Trade Center and described or
depicted in the site plan attached as Exhibit "B" (the "Project"). The Project
includes the land and the buildings and all other improvements located or to be
located thereon including, without limitation the Premises (hereinafter defined)
and property subsequently acquired by Landlord and incorporated into the
Project. Tenant's Premises (herein so-called) includes the Property, the
approximately 659,340 square foot Building (herein so-called) and related Tenant
Finish Out (herein so-called) located or to be located on the Property as shown
on Exhibit B, described thereon as the Building Floor Plate, and as more
particularly described in the Purchase and Sale Agreement (the "PSA") dated July
19, 1999, by and between Landlord and Tenant.

         SECTION 1.02. LEASE TERM. Ten (10) years and no months, beginning on
[per the PSA] (the "Commencement Date") and ending on or about ________________,
_________ [per the PSA].

         SECTION 1.03. PERMITTED USES. (See Article 5) The Premises may be used
only for storage, warehousing, and distribution of Tenant's decorative
accessories for home and office, as well as general office use and parking
related thereto. The Permitted Uses may be altered only in accordance with
Article 5 of this Lease.

         SECTION 1.04. TENANT'S GUARANTOR. (If none, so state) None.

         SECTION 1.05. BROKERS. (See Article 14) (If none, so state)
                                                                    ------------

Landlord's Broker:    Cushman & Wakefield of Texas, Inc.
                   -------------------------------------------------------------
Tenant's Broker:      Staubach
                   -------------------------------------------------------------

         SECTION 1.06. COMMISSIONS PAYABLE TO BROKERS. (See Article 14) (If
none, so state)

               A.   To Landlord's Broker:       as per separate agreement
                                           -------------------------------------
               B.   To Tenant's Broker:         as per separate agreement
                                           -------------------------------------

         SECTION 1.07. INITIAL SECURITY DEPOSIT. (See Section 3.02) None
                                                                   -------------

         SECTION 1.08. VEHICLE PARKING SPACES ALLOCATED TO TENANT. (Section
5.01B) All spaces located on the Property.

         SECTION 1.09. RENT AND OTHER CHARGES PAYABLE BY TENANT.

               A.   BASE RENT. [per PSA] Dollars ($____________) per annum,
payable in monthly installments of __________________________________________
Dollars ($____________) per month for the first _________ (_____) months, as
provided below in accordance with Section 3.01 and thereafter as shown in the
following table:


<PAGE>   4

<TABLE>
<CAPTION>
------------------------------------------------
   TERM              BASE RENT         MONTHLY
                                     INSTALLMENT
------------------------------------------------
<S>                  <C>             <C>
   Years 1-5
------------------------------------------------
   Year 6-10
------------------------------------------------
</TABLE>

                  B. ITEMS OF ADDITIONAL RENT. (i) Real property taxes (See
Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See
Section 4.04); and (iv) Management, Maintenance, Repairs and Alterations of the
Premises (See Sections 4.05, 4.06 and Article 6).

                  C. RENT. The term "Rent" shall mean Base Rent and Additional
Rent.

         SECTION 1.10. RIDERS. The following Riders are attached to and made a
part of this Lease: (If none, so state) Rider 1 Renewal Option
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

         SECTION 1.11. EXHIBITS. The following Exhibits "A" through "G" and
Rider 1 are attached to and made a part of this Lease:

<TABLE>
<CAPTION>
 Exhibit    Lease Section    Description
 -------    -------------    -----------
<S>             <C>          <C>
 A              1.01         Property
 B              1.01         Site Plan of Project and Building Features
 C                           [intentionally omitted]
 D              5.03B.       Permitted Hazardous Materials
 E              11.02        Subordination, Nondisturbance and Attornment
                             Agreement
 F              11.05A.      Estoppel Certificate
 G              15           Tax Deferred Exchange/Purchase Option
 Rider 1                     Renewal Option
</TABLE>

         SECTION 1.12. PURCHASE AND SALE AGREEMENT PROVISIONS. Each provision of
the PSA specifically referred to in this Lease shall survive the termination of
the PSA and is incorporated herein by this reference to the extent required for
the parties' performance and enforcement of this Lease.

ARTICLE 2.  LEASE TERM

         SECTION 2.01. LEASE OF PREMISES FOR LEASE TERM. Landlord leases the
Premises to Tenant and Tenant leases the Premises from Landlord for the Lease
Term and for any renewal term(s) the option for which is exercised by Tenant
pursuant to the Renewal Option Rider (if any) described in Section 1.10. The
Lease Term is for the period stated in Section 1.02 above and shall begin on the
date specified in Section 1.02 above, unless the beginning of the Lease Term is
changed under any provision of this Lease. The "Commencement Date" shall be the
date specified in Section 1.02 above for the beginning of the Lease Term, unless
advanced or delayed under any provision of this Lease.

         SECTION 2.02. INTENTIONALLY DELETED.

         SECTION 2.03. INTENTIONALLY DELETED.

         SECTION 2.04. INTENTIONALLY DELETED.

         SECTION 2.05. HOLDING OVER. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Tenant's delay in vacating the Premises; such damages to include, without
limitation, an amount equal to the sum of (i) One Hundred Thirty Five Percent
(135%) of the amount of the Rent for the entire holdover period, plus (ii) all
reasonable attorneys' fees and other expenses incurred by Landlord in enforcing
its rights under this Lease. If Tenant does not vacate the Premises upon the
expiration or earlier termination of the Lease and Landlord thereafter accepts
Rent from Tenant, Tenant's occupancy of the Premises shall be a "month-to-month"
tenancy, subject to all of the terms of this Lease consistent with a
month-to-month tenancy, except that Rent then in effect shall be increased to
One Hundred Thirty Five Percent (135%) of the amount of the Rent.

ARTICLE 3.  BASE RENT

         SECTION 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.09A
above for the first month of the Lease Term. On the first day of the second
month of the Lease Term and each month thereafter, the Base Rent shall be due
and payable, and Tenant


                                      -2-
<PAGE>   5

shall pay Landlord the Base Rent, in advance, on each
such due date, without offset, deduction, or prior demand. The Base Rent shall
be payable at Landlord's address or at such other place as Landlord may
designate in writing.

         SECTION 3.02. INTENTIONALLY DELETED.

         SECTION 3.03. TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease under Article 7 (Damage or Destruction), Article 8 (Condemnation) or any
other termination not resulting from Tenant's default and after Tenant has
vacated the Premises in the manner required by this Lease, Landlord shall refund
within thirty (30) days or credit to Tenant (or Tenant's successor) the unused
portion of the Security Deposit, any advance rent or other advance payments made
by Tenant to Landlord, and any amounts paid for real property taxes and other
reserves which apply to any time periods after termination of the Lease.

ARTICLE 4.  OTHER CHARGES PAYABLE BY TENANT

         SECTION 4.01. ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly installment
of Base Rent.

         SECTION 4.02. PROPERTY TAXES.

               A. REAL PROPERTY TAXES. Tenant shall pay Landlord for Landlord's
estimate of all real property taxes on the Property (including any fees, taxes
or assessments against, or as a result of, the Building and all Tenant Finish
Out installed on the Property by or for the benefit of Tenant during the Lease
Term. Such payments shall be made on a monthly basis in accordance with Section
4.06, below. Landlord shall pay such taxes prior to delinquency provided Tenant
has timely made such payments to Landlord. Any penalty caused by Tenant's
failure to timely make such payments shall also be Additional Rent owed by
Tenant immediately upon demand.

               B. DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means:
(i) any fee, license fee, license tax, business license fee, commercial rental
tax, levy, charge, assessment, penalty or tax imposed by any taxing authority
against the Property; (ii) any tax on the Landlord's right to receive, or the
receipt of, rent or income from the Property or against Landlord's business of
leasing the Property; (iii) any tax or charge for fire protection, streets,
sidewalks, road maintenance, refuse or other services provided to the Property
by any governmental agency; and (iv) any charge or fee replacing any tax
previously included within the definition of real property tax. "Real property
tax" does not, however, include Landlord's federal or state income, franchise,
inheritance or estate taxes.

               C. PERSONAL PROPERTY TAXES.

                    (1) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment, inventory, or any other personal property
belonging to Tenant. Tenant shall render its personal property for taxation
separately from the Premises.

                    (2) If any of Tenant's personal property is taxed with the
Property, Tenant shall pay Landlord the taxes for the personal property within
fifteen (15) days after Tenant receives a written statement from Landlord for
such personal property taxes.

         SECTION 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Premises. Landlord requires Tenant to contract for Tenant's own rubbish
collection.

         SECTION 4.04. INSURANCE POLICIES.

               A. LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known as
broad form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, Premises damage (including both pollution and loss
of use of Premises coverage) and personal injury arising out of the operation,
use or occupancy of the Premises. Tenant shall name Landlord as an additional
insured under such policy. The initial amount of such insurance shall be One
Million Dollars ($1,000,000) per occurrence and shall be subject to periodic
reasonable increase based upon inflation, increased liability awards,
recommendation of Landlord's professional insurance advisers and other relevant
factors. The liability insurance obtained by Tenant under this Section 4.04A
shall be primary and non-contributing and contain cross-endorsements. The amount
and coverage of such insurance shall not limit Tenant's liability nor relieve
the Tenant of any other obligation under this Lease. Landlord may also obtain
comprehensive public liability insurance in an amount and with coverage
determined by Landlord insuring Landlord against liability arising out of
ownership, operation, use or occupancy of the Premises. The policy obtained by
Landlord shall not be contributory and shall not provide primary insurance.
Tenant shall be liable for the payment of any deductible amount under Tenant's
insurance policies maintained pursuant to this Section 4.04A.


                                      -3-
<PAGE>   6

               B. BUILDING AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Premises in the full amount of its replacement value. Such policy shall contain
an Inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage and
any other perils which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance if required by any lender
holding a security interest in the Premises. Landlord shall not obtain insurance
for Tenant's fixtures or equipment or building improvements installed by Tenant,
or Tenant's personal property, on the Premises. During the Lease Term, Landlord
shall also maintain a rental income insurance policy, with loss payable to
Landlord, in an amount equal to one year's Base Rent, plus estimated real
property taxes and insurance premiums. Tenant shall be liable for the payment of
any deductible amount under Landlord's or Tenant's insurance policies maintained
pursuant to this Section 4.04B, in an amount not to exceed Ten Thousand Dollars
($10,000), except that the deductible on flood and earthquake insurance (if any)
shall be Twenty Five Thousand Dollars ($25,000). Tenant shall not do or permit
anything to be done which invalidates any such insurance policies.

               C. PAYMENT OF PREMIUMS. Tenant shall pay all premiums for the
insurance policies described in Sections 4.04A. Tenant shall pay Landlord on the
terms provided in Section 4.06 Tenant's premium cost of insurance policies
obtained by Landlord pursuant to Section 4.04B, except Landlord shall pay all
premiums for non-primary comprehensive public liability insurance which Landlord
elects to obtain as provided in Section 4.04A and the costs thereof shall not be
included in the premium costs reimbursable by Tenant to Landlord. If insurance
policies maintained by Landlord cover improvements on real property other than
the Property, Landlord shall deliver to Tenant a statement of the allocation of
premium applicable to the Premises showing in reasonable detail how Tenant's
share of the premium was computed. Before the Commencement Date, Tenant shall
deliver to Landlord a copy of any policy of insurance which Tenant is required
to maintain under this Section 4.04. At least thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to Landlord a renewal of
such policy. As an alternative to providing a policy of insurance, Tenant shall
have the right to provide Landlord a certificate of insurance, executed by an
authorized officer of the insurance company, showing that the insurance which
Tenant is required to maintain under this Section 4.04 is in full force and
effect and containing such other information which Landlord reasonably requires.

               D. GENERAL INSURANCE PROVISIONS.

                    (1) Any insurance which Tenant is required to maintain under
this Lease shall include a provision which requires the insurance carrier to
give Landlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage.

                    (2) If Tenant fails to deliver any policy, certificate or
renewal to Landlord required under this lease within the prescribed time period
or if any such policy is canceled or modified during the Lease Term without
Landlord's consent, Landlord may obtain such insurance, in which case Tenant
shall reimburse Landlord for the cost of such insurance (including the
deductible thereon, if applicable) within fifteen (15) days after receipt of a
statement that indicates the cost of such insurance.

                    (3) Tenant shall maintain all insurance required under this
Lease with companies holding a "General Policy Rating" of A-9 or better, as set
forth in the most current issue of "Best Key Rating Guide". Landlord and Tenant
acknowledge the insurance markets are subject to change and that insurance in
the form and amounts described in this Section 4.04 may not be available in the
future. Tenant acknowledges that the insurance described in this Section 4.04 is
for the primary benefit of Landlord. If at any time during the Lease Term,
Tenant is unable to maintain the insurance required under the Lease, Tenant
shall nevertheless maintain insurance coverage which is customary and
commercially reasonable in the insurance industry for Tenant's type of business,
as that coverage may change from time to time. Landlord makes no representation
as to the adequacy of such insurance to protect Landlords' or Tenant's interest.
Therefore, Tenant shall obtain any such additional property or liability
insurance which Tenant deems necessary to protect Landlord and Tenant.

                    (4) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to the Premises or the
Property or the property of others under either party's control, if such loss or
damage is covered by any insurance policy in force (whether or not described in
this Lease) at the time of such loss or damage. Upon obtaining the required
policies of insurance, Landlord and Tenant shall give notice to the insurance
carriers of this mutual waiver of subrogation.

         SECTION 4.05. LANDLORD PROPERTY MANAGEMENT/RELATED COSTS. Tenant shall
pay the Frankford Trade Center Property Owners Association (the "Association")
for those pro rata costs associated with maintenance of landscaping of the
existing Project entrances, maintenance of Project drainage areas, and
monitoring and maintenance of Project environmental systems. If Landlord elects
to enter into a contract with a landscape contractor


                                      -4-
<PAGE>   7

to provide landscape maintenance and minor replacement services for the Project
and Tenant, Tenant shall pay to Landlord Tenant's allocable costs of such
services. From and after such time as members of the Carter family shall no
longer participate in the management of Tenant, Tenant shall also pay to
Landlord one and one half percent (1.5%) of the Base Rent under this Lease for
Landlord's property management services.

         SECTION 4.06. PAYMENT OF ADDITIONAL RENT. During the Lease Term,
Landlord shall estimate in advance and notify Tenant of all real property taxes
for which Tenant is liable under Section 4.02 of the Lease, all insurance
premiums for which Tenant is liable under Section 4.04 of the Lease, and all
other Additional Rent payable by Tenant hereunder, including, but not limited
to, any related sales tax thereon. Tenant shall pay Landlord such estimated real
property taxes, insurance premiums, and all other items of Additional Rent
(prorated for any fractional month) on a monthly basis, at the same time Base
Rent shall be due, subject to the terms set forth in this Section; except that
for so long as Tenant shall not be in monetary default under this Lease,Tenant
may elect to pay to Landlord such estimated real property taxes and insurance
premiums in a single annual payment to be received by Landlord on or before (i)
January 1 of each calendar year for the real property taxes due and owing for
the preceding calendar year and (ii) [align with policy year] of each calendar
year (or other date, if any, on which any insurance company providing insurance
required under this Lease shall require payment of premiums pursuant to such
company's billing cycle) in the case of such insurance premiums. The items of
Additional Rent are set out in Section 1.09B. Landlord may adjust Landlord's
estimates of any item of Additional Rent not more often than twice per calendar
year based upon Landlord's reasonable anticipation of costs to be incurred, and
Tenant's Additional Rent shall be adjusted effective as of the next rent payment
date after notice of adjustment is given to Tenant. At Landlord's election,
statements of Additional Rent may be delivered monthly on or before the first
day of each calendar month.

ARTICLE 5.   USE OF PREMISES

         SECTION 5.01. PERMITTED USES. Tenant may use the Premises only for the
Permitted Uses set forth in Section 1.03 above.

               A. RULES AND REGULATIONS. Tenant shall have the right to use the
Premises for the Permitted Uses, subject to such reasonable rules and
regulations as Landlord may establish from time to time. Tenant shall abide by
such rules and regulations.

               B. VEHICLE PARKING. Tenant's parking on the Premises shall be
limited to vehicles no larger than standard size automobiles or pickup utility
vehicles along with parking of large delivery vehicles on the Premises at
loading dock stalls or in designated trailer parking areas serving Tenant's
Premises; provided, however, that such parking of large delivery vehicles may be
further regulated by the rules and regulations established by Landlord. Vehicles
shall be parked only in striped parking spaces and not in driveways, loading
areas or other locations not specifically designated for parking.

         SECTION 5.02. MANNER OF USE. Tenant shall not cause or permit the
Premises to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which unreasonably annoys or
unreasonably interferes with the rights of other tenants of the Project, which
constitutes a nuisance or waste. Tenant shall obtain and pay for all permits
(other than a Certificate of Occupancy for the Building shell, which Landlord
shall apply for in accordance with the terms of the PSA) required for Tenant's
occupancy of the Premises and Tenant shall immediately take all actions
necessary to comply with all applicable statues, ordinances, rules, regulations,
orders and requirements regulating the use by Tenant of the Premises, including
the Occupational Safety and Health Act.

         SECTION 5.03. HAZARDOUS MATERIALS

                    (1)  DEFINITIONS.

                         (a) "Hazardous  Material"  means any substance the
presence of which requires notice to any Governmental Agency or investigation or
remediation pursuant to any Environmental Requirement, or is or becomes
regulated by any Governmental Agency, or the presence of which on the Premises
causes or threatens to cause a nuisance or trespass or to otherwise create the
reasonable prospect of the assertion of a claim against the owner of the Project
for Environmental Damages.

                         (b) "Environmental Requirements" means all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises, and
similar items (including, but not limited to those pertaining to reporting,
licensing, permitting, investigation and remediation), of all Governmental
Agencies; and all applicable judicial, administrative, and regulatory decrees,
judgments, and orders relating to the protection of human health or the
environment effective during the term of this Lease and any renewals or
extensions thereof,

                         (c) "Environmental Damages" means all claims,
judgments, damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs, and expenses (including the expense of


                                      -5-
<PAGE>   8

investigation and defense of any claim, whether or not such claim is ultimately
defeated, or the amount of any good faith settlement or judgment arising from
any such claim) of whatever kind or nature, contingent or otherwise, matured or
unmatured, foreseeable or unforeseeable (including without limitation reasonably
attorneys' fees and disbursements and consultants' fees) any of which are
incurred at any time as a result of the existence of Hazardous Material upon,
about, or beneath the Premises or migrating or threatening to migrate to or from
the Premises, or the existence of a violation of Environmental Requirements
pertaining to the Premises and the activities thereon, regardless of whether the
existence of such Hazardous Material or the violation of Environmental
Requirements arose prior to the present ownership or operation of the Premises.

                         (d) "Governmental Agency" means all governmental
agencies, departments, commission, boards, bureaus or instrumentalities of the
United States, states, counties, cities and political subdivisions thereof.

                         (e) The "Tenant Group" means Tenant, Tenant's officers,
directors, agents, employees, or other parties under the supervision or control
of Tenant or entering the Premises during the term of this Lease with the
permission or knowledge of Tenant other than Landlord or its agents or
employees.

                    (2) PROHIBITIONS. Other than normal quantities of general
office supplies, and except as specified on Exhibit "D" attached hereto, Tenant
shall not cause, permit or suffer any Hazardous Material to be brought upon,
treated, kept, stored, disposed of, discharged, released, produced,
manufactured, generated, refined or used upon, about or beneath the Project or
the Premises by The Tenant Group, or any other person without the prior written
consent of Landlord. Landlord acknowledges that subsurface biogases which may be
present as of the effective date of this Lease shall not constitute a violation
of this prohibition. From time to time during the term of this Lease, Tenant may
request Landlord's approval of Tenant's use of other Hazardous Materials, which
approval may be withheld in Landlord's sole discretion. Tenant shall, prior to
the Commencement Date, provide to Landlord for those Hazardous Materials (if
any) described on Exhibit "D" a description of handling, storage, use and
disposal procedures, and (b) all "community right to know" plans or disclosures
and/or emergency response plans which Tenant is required to supply to local
governmental agencies pursuant to any Environmental Requirements. Tenant shall
not cause, permit or suffer the existence or the commission by The Tenant Group,
or by any other person, of a violation of any Environmental Requirements upon,
about or beneath the Project. Tenant shall not install, operate or maintain any
above or below grade tank, sump, or pit or install any treatment vessel or
device on the Premises without first obtaining all required permits and
approvals required, if any, by governmental authorities and subsequently
obtaining Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. On-site maintenance or repair of hydraulic
equipment, loading vehicles, or highway vehicles shall not be performed in the
Premises or anywhere in the Project.

                    (3) INDEMNITY. Tenant, its successors and assigns agree to
indemnify, defend, reimburse and hold harmless Landlord, any other person who
acquires all or a portion of the Project in any manner (including purchase at a
foreclosure sale) or who becomes entitled to exercise the rights and remedies of
Landlord under this Lease, and the directors, officers, shareholders, employees,
partners, agents, heirs, devisees, successors and assigns of such persons, from
and against any and all Environmental Damages which exist as a result of the
activities or negligence of The Tenant Group or which exist as a result of the
breach of any warranty or covenant or the inaccuracy of any representation of
Tenant contained in this Lease, or resulting from Tenant's remediation of the
Project or failure to meet its remediation obligations contained in this Lease.
Landlord shall have the right but not the obligation to join and participate in,
and control, if it so elects, any legal proceedings or actions initiated in
connection with Tenant's activities. Landlord may also negotiate, defend,
approve and appeal any action taken or issued by any applicable governmental
authority with regard to contamination of the Project by a Hazardous Material.
This indemnification is for Environmental Damages caused by the Tenant Group,
and does not include conditions ("Pre-existing Conditions") existing prior to
Tenant's possession of the Premises (which Pre-existing Conditions, if any, have
been disclosed to Tenant in [refer to engineering reports furnished Tenant] ) or
after Tenant's occupancy of the Premises provided that with respect to
conditions existing after Tenant's occupancy of the Premises, Tenant shall, at
Tenant's sole expense, provide to Landlord environmental studies by a nationally
recognized, independent environmental contractor acceptable to Landlord
describing the condition of the Premises at the time Tenant vacates the Premises
sufficient to assure Landlord that there are no Environmental Damages to the
Premises at that time (other than Pre-existing Conditions).

                    (4) PRIOR INSPECTIONS. Except with respect to Pre-Existing
Conditions, the obligations of Tenant under this Section shall not be affected
by any investigation by or on behalf of Landlord, or by any information which
Landlord may have or obtain with respect thereto.

                    (5) OBLIGATION TO REMEDIATE. In addition to the obligation
of Tenant to indemnify Landlord pursuant to this Lease, Tenant shall, upon
approval and demand of Landlord, at its sole cost and expense and using
contractors approved by Landlord, immediately take all actions to remediate the
Project which are required by any Governmental Agency, or which are reasonably
necessary to mitigate Environmental Damages, which remediation is necessitated
from the presence upon, about or beneath the Project, at any time during or upon
termination of this Lease, of a Hazardous Material or a violation of
Environmental Requirements existing as a result of the activities or


                                      -6-
<PAGE>   9

negligence of the Tenant Group. Tenant shall take all actions necessary to
restore the Project to the condition existing prior to the introduction of
Hazardous Material upon, about or beneath the Project, notwithstanding any
lesser standard of remediation allowable under applicable law or governmental
policies. This obligation to remediate is for Environmental Damages caused by
the Tenant Group, and does not include Pre-existing Conditions, if any, provided
that with respect to conditions existing after Tenant's occupancy of the
Premises, Tenant shall, at Tenant's sole expense, provide to Landlord
environmental studies by a nationally recognized, independent environmental
contractor acceptable to Landlord describing the condition of the Premises at
the time Tenant vacates the Premises sufficient to assure Landlord that there
are no Environmental Damages to the Premises at that time (other than
Pre-existing Conditions).

                    (6) RIGHT TO INSPECT. Landlord shall have the right in its
sole and absolute discretion, but not the duty, to enter and conduct an
inspection of the Premises, including invasive tests, at any reasonable time to
determine whether Tenant is complying with the terms of the Lease, including but
not limited to the compliance of the Premises and the activities thereon with
Environmental Requirements and the existence of Environmental Damages as a
result of the condition of the Premises or surrounding properties and activities
thereon. The cost of the Landlord's investigation shall be paid by Landlord
unless such investigation discloses a violation of any Environmental Requirement
by The Tenant Group or the existence of a Hazardous Material on the Premises or
any other surrounding properties caused by the activities or negligence of The
Tenant Group (other than Hazardous Materials used in compliance with all
Environmental Requirements and previously approved in writing by Landlord), in
which case Tenant shall pay such cost. Tenant hereby grants to Landlord, and the
agents, employees, consultants and contractors of Landlord the right to enter
the Premises and to perform such tests on the Premises as are reasonably
necessary to conduct such reviews and investigations. Landlord shall use its
best efforts to minimize interference with the business of Tenant in the conduct
of such reviews and investigations.

                    (7) NOTIFICATION OF CLAIMS OR CONDITIONS. If Tenant shall
become aware of or receive notice or other communication concerning any actual,
alleged, suspected or threatened violation of Environmental Requirements, or
liability of Tenant for Environmental Damages in connection with the Premises or
past or present activities of any person thereon, then Tenant shall immediately
notify Landlord and furnish a reasonably detailed description of such condition.
Receipt of such notice shall not be deemed to create any obligation on the part
of Landlord to defend or otherwise respond to any such notification.

         SECTION 5.04. SIGNS AND AUCTIONS. Other than Tenant's premises signage
and temporary banners which are occasionally place at Tenant's entrance, Tenant
shall not place any signs on the Premises without Landlord's prior written
consent. Tenant shall not conduct or permit any auctions or sheriff's sales at
the Premises.

         SECTION 5.05. TENANT'S INDEMNITY. In addition to, and not in limitation
of or substitution for the indemnity by Tenant in Section 5.03C, Tenant shall
indemnify Landlord against and hold Landlord harmless from any and all costs,
claims or liability arising from: (a) Tenant's use of the Premises; (b) the
conduct of Tenant's business or anything else done or permitted by Tenant to be
done in or about the Premises; (c) any breach or default in the performance of
Tenant's obligations under this lease; (d) any misrepresentation or breach of
warranty by Tenant under this Lease; or (e) other acts or omissions of Tenant.
Tenant shall defend Landlord against any such cost, claim or liability at
Tenant's expense with counsel reasonably acceptable to Landlord or, at
Landlord's election, Tenant shall reimburse Landlord for any legal fees or costs
incurred by Landlord in connection with any such claim. AS A MATERIAL PART OF
THE CONSIDERATION TO LANDLORD, TENANT ASSUMES ALL RISK OF DAMAGE TO PREMISES OR
INJURY TO PERSONS IN OR ABOUT THE PREMISES ARISING FROM ANY CAUSE, AND TENANT
HEREBY WAIVES ALL CLAIMS IN RESPECT THEREOF AGAINST LANDLORD, EXCEPT FOR ANY
CLAIM ARISING OUT OF LANDLORD'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. AS USED
IN THIS SECTION, THE TERM ATENANT" SHALL INCLUDE TENANT'S EMPLOYEES, AGENTS,
CONTRACTORS AND INVITEES, IF APPLICABLE.

         SECTION 5.06. LANDLORD'S INDEMNITY. Subject to the terms of Section
6.02 of this Lease, so long as no default shall occur or be continuing, Landlord
shall indemnify Tenant against, and hold Tenant harmless from any and all costs,
claims, or liability arising from (i) Environmental Damages caused by or arising
as the result of Pre-existing Conditions, for which Tenant is not liable
pursuant to Section 5.03(5) of this Lease, or (ii) from Landlord's gross
negligence or willful misconduct.

         SECTION 5.07. LANDLORD'S ACCESS. Landlord or its agents may enter the
Premises at all reasonable times upon prior reasonable notice to Tenant to
verify that Tenant is in compliance with the terms of this Lease, as well as for
other purposes expressly permitted by the terms of this Lease, provided that (i)
Tenant shall have the right to be present during such entry by Landlord or its
agents, (ii) Landlord shall use its best efforts to minimize interference with
the business of Tenant and (iii) in the case of an emergency, no such notices
shall be required.

         SECTION 5.08. QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Premises for
the full Lease Term, subject to the provisions of this Lease.


                                      -7-
<PAGE>   10

ARTICLE 6.  CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

         SECTION 6.01. EXISTING CONDITIONS. TENANT ACCEPTS THE PROPERTY IN ITS
EXISTING CONDITION AS OF THE EXECUTION OF THE LEASE, SUBJECT TO ALL RECORDED
MATTERS, LAWS, ORDINANCES, AND GOVERNMENTAL REGULATIONS AND ORDERS. EXCEPT AS
PROVIDED HEREIN OR IN THE PSA, TENANT ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY
AGENT OF LANDLORD HAS MADE ANY REPRESENTATION AS TO THE CONDITION OF THE
PREMISES OR THE SUITABILITY OF THE PREMISES FOR TENANT'S INTENDED USE. TENANT
REPRESENTS AND WARRANTS THAT TENANT HAS MADE ITS OWN INSPECTION OF AND INQUIRY
REGARDING THE CONDITION OF THE PREMISES AND IS NOT RELYING ON ANY
REPRESENTATIONS OF LANDLORD OR ANY BROKER WITH RESPECT THERETO (EXCEPT THOSE
REPRESENTATIONS SET FORTH IN THE PSA).

         SECTION 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. LANDLORD SHALL NOT
BE LIABLE FOR ANY DAMAGE OR INJURY TO THE PERSON, BUSINESS (OR ANY LOSS OF
INCOME THEREFROM), GOODS, WARES, MERCHANDISE OR OTHER PROPERTY OF TENANT,
TENANT'S EMPLOYEES, INVITEES, CUSTOMERS OR ANY OTHER PERSON IN OR ABOUT THE
PREMISES, WHETHER SUCH DAMAGE OR INJURY IS CAUSED BY OR RESULTS FROM, WITHOUT
LIMITATION: (A) FIRE, STEAM, ELECTRICITY, WATER, GAS OR RAIN; (B) THE BREAKAGE,
LEAKAGE, OBSTRUCTION OR OTHER DEFECTS OF PIPES, SPRINKLERS, WIRES, APPLIANCES,
PLUMBING, AIR CONDITIONING OR LIGHTING FIXTURES OR ANY OTHER CAUSE; (C)
CONDITIONS ARISING IN OR ABOUT THE PREMISES OR UPON OTHER PORTIONS OF THE
PROJECT, OR FROM OTHER SOURCES OR PLACES; OR (D) ANY ACT OR OMISSION OF ANY
OTHER TENANT OF THE PROJECT. LANDLORD SHALL NOT BE LIABLE FOR ANY SUCH DAMAGE OR
INJURY EVEN THOUGH THE CAUSE OF OR THE MEANS OF REPAIRING SUCH DAMAGE OR INJURY
ARE NOT ACCESSIBLE TO TENANT. THE PROVISIONS OF THIS SECTION 6.02 SHALL NOT,
HOWEVER, EXEMPT LANDLORD FROM LIABILITY FOR (I) ENVIRONMENTAL REMEDIATION
OBLIGATIONS FOR WHICH LANDLORD IS LIABLE PURSUANT TO SECTION 5.03(5) OF THIS
LEASE OR (II) LANDLORD'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

         SECTION 6.03. LANDLORD'S OBLIGATIONS. Subject to the provisions of
Article 7 (Damage or Destruction) and Article 8 (Condemnation), Landlord shall
keep the following in good order, condition and repair: the foundation,
structural integrity of the exterior walls and the roof of the Building;
provided, however that Landlord shall have absolutely no responsibility to
repair, maintain or replace windows, doors, plate glass or the interior surfaces
of exterior walls. Landlord shall make repairs under this section 6.03 within a
reasonable time after receipt of written notice from Tenant of the need for such
repairs.

         SECTION 6.04. TENANT'S OBLIGATIONS.

               A. MAINTENANCE BY TENANT. Except as provided in Section 6.03,
Article 7 (Damage or Destruction) and Article 8 (Condemnation), Tenant shall
keep all portions of the Premises in good order, condition and repair
(including, but not limited to, interior and exterior painting, systems and
equipment, roof (to the extent of the preventive maintenance arrangements
hereafter required), parking lot lighting and pavement, landscaping and
irrigation and signage provided that, except for damage caused by Tenant, Tenant
shall not be responsible for replacement of the roof or replacement of the
parking lot pavement). If any portion of the Premises or any system or equipment
in the Premises which Tenant is obligated to repair cannot be fully repaired or
restored, Tenant shall promptly replace such portion of the Premises or system
or equipment in the Premises, regardless of whether the benefit of such
replacement extends beyond the Lease Term; but if the benefit or useful life of
such replacement extends beyond the Lease Term (as such term may be extended by
exercise of any options), the useful life of such replacement shall be prorated
over the remaining portion of the Lease Term (as extended), and Tenant shall be
liable only for that portion of the cost which is applicable to the Lease Term
(as extended). Tenant will maintain temperature of Premises sufficient to avoid
freezing the sprinkler system. Tenant shall maintain preventive maintenance
arrangements involving regular inspection and maintenance of the heating,
ventilation, and air conditioning system by a licensed contractor, and of the
roof by a roofing contractor, each reasonably approved in advance by the
Landlord. If any part of the Project is damaged by any act or omission of
Tenant, Tenant shall pay Landlord the cost of repairing or replacing such
damaged property, whether or not Landlord would otherwise be obligated to pay
the cost of maintaining or repairing such property. It is the intention of
Landlord and Tenant that at all times Tenant shall maintain the Premises in an
attractive, first class, and fully operative condition.

               B. LANDLORD REMEDY. Tenant shall fulfill all of Tenant's
obligations under this Section 6.04 at Tenant's sole expense. If Tenant fails to
maintain, repair or replace the Premises as required by this Section 6.04,
Landlord may, upon ten (10) days' prior notice to Tenant (except that no notice
shall be required in the case of an emergency), enter the Premises and perform
such maintenance or repair (including replacement, as needed) on behalf of
Tenant. In such case, Tenant shall reimburse Landlord for all reasonable costs
incurred in performing such maintenance or repair immediately upon demand.


                                      -8-
<PAGE>   11

               C. SECURITY SERVICES. Tenant, at Tenant's sole cost, may contract
for installation of security devices for the Premises from a reputable
contractor. Monitoring of such devices, if any, shall be performed by a Security
Contractor acceptable to Landlord, in Landlord's reasonable discretion.

               D. MECHANIC'S LIENS. Tenant will not permit any mechanic's liens,
or other liens, to be placed upon the Premises or the Project during the Lease
Term or any extension or renewal thereof, and in case of the filing of any such
lien, Tenant will immediately pay same. Tenant agrees to pay all reasonable
legal fees that might be incurred by Landlord because of any mechanic's liens
being placed upon the Premises, as a result of Tenant's actions.

         SECTION 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

               A. NOTICE AND CONSENT. Tenant shall not make any alterations,
additions, or improvements to the Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld or delayed except that
Tenant may make non-structural alterations or improvements (excluding
penetrations of the roof or foundation liner) which do not exceed One Hundred
Thousand Dollars ($100,000) per year and which are not visible from the outside
of the Premises. Landlord's approval of alterations, additions, or improvements
shall include, when granted, direction on whether or not the improvements shall
remain or be removed at Lease expiration or earlier termination, and it shall be
presumed that improvements are required to be removed in the absence of specific
direction to the contrary. Landlord may require Tenant to provide demolition
and/or lien and completion bonds in form and amount satisfactory to Landlord.
Tenant shall immediately remove any alterations, additions, or improvements
constructed in violation of this Section 6.05A upon Landlord's written request.
All alterations, additions, and improvements shall be done in a good and
workmanlike manner, in conformity with all applicable laws and regulations, and
by a contractor approved by Landlord. Upon completion of any such work, Tenant
shall provide Landlord with "as built" plans, copies of all construction
contracts, and proof of payment for all labor and materials.

               B. PAYMENT. Tenant shall pay when due all claims for labor and
material furnished to the Premises. Tenant shall give Landlord at least ten (10)
days' prior written notice of the commencement of any work on the Premises,
regardless of whether Landlord's consent to such work is required.

         SECTION 6.06. CONDITION UPON TERMINATION. Not later than the last day
of the Lease Term (or any renewals or extensions thereof), Tenant shall
surrender the Premises to Landlord, broom clean (with all keys in Tenant's
possession or control) and in the same condition as received except for ordinary
wear and tear which Tenant was not otherwise obligated to repair under any
provision of this Lease. However, Tenant shall not be obligated to repair any
damage which Landlord is required to repair under Article 7 (Damage or
Destruction). In addition, Landlord may require Tenant to remove any
alterations, additions or improvements which are subject to removal pursuant to
Section 6.05, or which are part of Tenant Finish Out, prior to the expiration of
the Lease, and to restore the Premises to their condition prior to installation
of such improvements, all at Tenant's expense. All alterations, additions and
improvements which are not subject to removal hereunder shall become Landlord's
property and shall be surrendered to Landlord upon the expiration or earlier
termination of the Lease, except that Tenant may remove any of Tenant's
machinery, equipment or fixtures which can be removed without material damage to
the Premises. Tenant shall repair, at Tenant's expense, any damage to the
Premises caused by the removal of any such machinery, equipment or fixtures. In
no event, however, shall Tenant remove any of the following (which shall be
deemed Landlord's property ) without Landlord's prior written consent: any power
wiring or power panels; lighting or lighting fixtures; wall coverings; drapes,
blinds or other window coverings; carpets or other floor coverings; heaters, air
conditioners or any other heating or air conditioning equipment; fencing or
security gates, or other similar Building operating equipment and decorations.

ARTICLE 7.   DAMAGE OR DESTRUCTION

         SECTION 7.01. PARTIAL DAMAGE TO PREMISES.

               A. OCCURRENCE OF DAMAGE. Tenant shall notify Landlord in writing
immediately upon the occurrence of any damage to the Premises.

               B. RESTORATION.

                    (1) If the Premises are only partially damaged (i.e., less
than fifty percent (50%) of the Premises are untenantable as a result of such
damage or less than fifty percent (50%) of Tenant's operations are materially
impaired) and if the mortgagee of the Property (if any) shall permit the
proceeds received by Landlord from the insurance policies described in Section
4.04B to be applied to the necessary repairs, this Lease shall remain in effect
and Landlord shall repair the damage. In the event Landlord repairs the damage,
such repairs shall be substantially completed within 180 days from the date
Landlord is allowed by governmental authorities, the insurance companies, and
the mortgagee of the Property (if any) to enter the Premises for the purpose of
beginning repair of the damage.


                                      -9-
<PAGE>   12

                    (2) If the Premises are only partially damaged as described
in Section 7.01B(1) and if any mortgagee or beneficiary under a deed of trust
encumbering the Premises should require that proceeds payable as a result of
said fire or casualty be used to retire or reduce any debt secured by a deed of
trust encumbering the Premises, Landlord may elect either to (i) repair the
damage within 180 days from the date Landlord is allowed by governmental
authorities and the insurance companies to enter the Premises for the purpose of
beginning repair of the damage, in which case this Lease shall remain in full
force and effect, or (ii) terminate this Lease as of the date the damage
occurred. Landlord shall notify Tenant within thirty (30) days after notice of
the occurrence of the damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage, such repairs shall
be substantially completed within 180 days from the date Landlord is allowed by
governmental authorities and the insurance companies to enter the Premises for
the purpose of beginning repair of the damage. If the damage was due to an act
or omission of Tenant, or Tenant's employees, agents, contractors or invitees,
Tenant shall pay to Landlord upon demand the difference between the actual cost
of repair and any insurance proceeds received by Landlord. If Landlord elects to
terminate this Lease, Tenant may elect to continue this Lease in full force and
effect, in which case Tenant shall repair any damage to the Premises. Tenant
shall pay the cost of such repairs, except that upon satisfactory completion of
such repairs, Landlord shall deliver to Tenant any insurance proceeds received
by Landlord for the damage repaired by Tenant. Tenant shall give Landlord
written notice of such election within ten (10) days after Landlord's
termination notice.

               C. TERMINATION. If the damage to the Premises occurs during the
last six (6) months of the Lease Term and such damage will require more than
thirty (30) days to repair, either Landlord or Tenant may elect to terminate
this Lease as of the date the damage occurred, regardless of the sufficiency of
any insurance proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within thirty (30) days
after Tenant's notice to Landlord of the occurrence of the damage.

         SECTION 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Premises are
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Premises is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate the later of (i) the date the destruction occurred, or (ii) the date
Tenant ceases to do business at the Premises.

         SECTION 7.03. REDUCTION OF RENT DUE TO CASUALTY LOSS. If the Premises
are destroyed or damaged and Landlord or Tenant repairs or restores the Premises
pursuant to the provisions of this Article 7, any rent payable during the period
of such damage, repair and/or restoration shall be reduced according to the
degree, if any, to which Tenant's use of the Premises is impaired. Except for
such possible reduction in Rent or as otherwise provided in Section 5.06, Tenant
shall not be entitled to any compensation, reduction, or reimbursement from
Landlord as a result of any damage, destruction, repair, or restoration of or to
the Premises.

ARTICLE 8.   CONDEMNATION

        If all or any portion of the Premises is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the Building is taken,
Tenant may terminate this Lease as of the date the condemning authority takes
title or possession, by delivering written notice to Landlord within ten (10)
days after receipt of written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority takes title or
possession). If Tenant does not terminate this Lease, this Lease shall remain in
effect as to the portion of the Premises not taken, except that the Base Rent
and Additional Rent shall be reduced in proportion to the reduction in the floor
area of the Premises, with due consideration of the employment of such floor
area prior to the Condemnation for warehouse or office uses. Any Condemnation
award or payment shall be distributed in the following order: (a) first, to any
mortgagee or beneficiary under a deed of trust encumbering the Premises, the
amount of its interest in the Premises; (b) second, to Tenant, only the amount
of any award specifically designated for loss of or damage to Tenant's trade
fixtures or removable personal property; and (c) third, to Landlord, the
remainder of such award, whether as compensation for reduction in the value of
the leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall repair any damage to the Premises caused by the
Condemnation, except that Landlord shall not be obligated to repair any damage
for which Tenant has been reimbursed by the condemning authority.

ARTICLE 9.   ASSIGNMENT AND SUBLETTING

         SECTION 9.01. PERMITTED TRANSFERS.

               A. Tenant may assign this Lease or sublease the Premises, without
Landlord's consent, to (i) any entity which controls, is controlled by or is
under common control with Tenant, (ii) any entity resulting from the merger of
or consolidation with Tenant or (iii) any successor of Tenant which acquires all
or substantially all of Tenant's assets ("Tenant's Affiliate"), provided Tenant
has received Landlord's reasonable written approval of the credit of such
transferee and Tenant shall give Landlord a minimum of thirty (30) days advance
written notice and Tenant's Affiliate shall assume in writing all of Tenant's
obligations under this Lease including, without limitation, those obligations
described in Section 5.03 of this Lease.

               B. Tenant may sublease portions of the Premises, without
Landlord's consent, to an entity ("Strategic Supplier") substantially dedicated
to supplying Tenant's product requirements. Tenant shall give Landlord a minimum


                                      -10-
<PAGE>   13

of thirty (30) days advance written notice of subleasing to a Strategic
Supplier. Such sublease shall not affect, release, or impair Landlord's right of
recourse against Tenant under this Lease, and shall be subject to all of the
terms and conditions hereof.

               C. Tenant may grant to a lender or agent on behalf of a lending
consortium a deed of trust against the leasehold estate created by this Lease
for the purpose of securing a Credit Facility (as defined in Section 10.02F),
provided that such Credit Facility constitutes Tenant's primary line of credit
or working capital credit.

         SECTION 9.02. PROHIBITED TRANSFERS. Except as permitted by Section
9.01, Tenant shall not, without Landlord's prior written consent, which consent
shall not be unreasonably withheld or delayed, sell, assign, mortgage, sublease,
or otherwise transfer or permit the transfer of (collectively or individually, a
"Transfer") all or any portion of or interest in the leasehold under this Lease.
For purposes of this limitation, each of the following events shall constitute a
Transfer: (A) if Tenant is an individual, a transfer of all or any portion of or
interest in the leasehold by operation of law or by bequest, devise, or
inheritance; (B) if Tenant is a partnership, any cumulative sale, assignment or
transfer (excluding any pledge or mortgage of such interest) of any part of the
partnership interests the effect of which is to change or alter control of the
partnership; and (C) if Tenant is a corporation, any change in the ownership of
a controlling interest of the voting stock of the corporation (except for
transactions described in Section 9.01). Any attempted Transfer without
Landlord's consent shall be void and shall constitute a non-curable breach of
this lease. Landlord has the right to grant or withhold its consent to a
Transfer (except as permitted by Section 9.01) as provided in Section 9.03
below.

         SECTION 9.03. LANDLORD'S CONSENT.

               A. LANDLORD'S CONSENT; FACTORS. Tenant's request for consent to
any Transfer described in Section 9.02 shall set forth in writing the details of
the proposed Transfer, including the name, business and financial condition of
the prospective transferee, the material financial details of the proposed
Transfer (e.g., the term of and the rent and security deposit payable under any
proposed assignment or sublease), and any other information generally deemed
relevant to such a transfer. Landlord shall have the right to withhold consent,
if reasonable, or to grant consent, based on the following factors: (i) the
business of the proposed assignee or subtenant and the proposed use of the
Premises; (ii) the net worth and financial reputation of the proposed assignee
or subtenant; (iii) Tenant's past and current compliance with all of its
obligations under the Lease; and (iv) such other factors as Landlord may
reasonably deem relevant. In the event Tenant effects or purports to make a
Transfer of this Lease without the express written consent of Landlord, Landlord
shall have the right to terminate this Lease. Any purported Transfer in
violation of this Section shall be void.

               B. ASSIGNMENT PROFIT. If Tenant assigns or subleases, the
following shall apply:

                    (1) Tenant shall pay to Landlord as Additional Rent under
the Lease Fifty Percent (50%) of the Profit (defined below) on such transaction
as and when received by Tenant, unless Landlord gives written notice to Tenant
and the assignee or subtenant that Landlord's Share shall be paid by the
assignee or subtenant to Landlord directly. The "Profit" means (A) all amounts
paid to Tenant for such assignment or sublease, including"key" money, monthly
rent in excess of the monthly rent payable under the Lease, and all fees and
other consideration paid for the assignment or sublease, including fees under
any collateral agreements, less (B) costs and expenses directly incurred by
Tenant (excluding Tenant's overhead) in connection with the execution and
performance of such assignment or sublease for real estate broker's commissions
and costs of renovation or construction of Tenant Improvements required under
such assignment or sublease. Tenant is entitled to recover such costs and
expenses before Tenant is obligated to pay any portion of assignment or sublease
revenue to Landlord. The Profit in the case of a sublease of less than all the
Premises is the rent allocable to the subleased space as a percentage on a
square footage basis, or as Landlord and Tenant may otherwise mutually agree in
writing.

                    (2) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of the
Premises within thirty (30) days after the transaction documentation is signed,
and Landlord may inspect Tenant's books and records to verify the accuracy of
such statement. On written request, Tenant shall immediately furnish to Landlord
copies of all the transaction documentation, all of which shall be certified by
Tenant to be complete, true and correct. Landlord's receipt of the Profit shall
not be a consent to any further Transfer. The breach of Tenant's obligation
under this Section 9.03B shall be a default under this Lease.

               C. TERMINATION AND RELETTING. If Landlord elects to terminate
this Lease pursuant to Section 9.03A, Landlord may, if it elects, enter into a
new lease covering the Premises with the intended assignee or sublessee on such
terms as Landlord and such person may agree or enter into a new lease covering
the Premises with any other person; in such event, Tenant shall not be entitled
to any portion of the profit, if any, which Landlord may realize on account of
such termination and reletting. From and after the date of such termination of
this Lease, Tenant shall have no further obligations arising hereunder prior to
the date of such termination, except those obligations expressly provided to
survive termination of this Lease.


                                      -11-
<PAGE>   14



         SECTION 9.04. NO RELEASE OF TENANT. No assignment, sublease or transfer
of any kind permitted by this Article 9, whether with or without Landlord's
consent, shall release Tenant or change Tenant's primary liability to pay the
Rent and to perform all other obligations of Tenant under this Lease, except
that, in the event of a Permitted Transfer described in Section 9.01, Landlord
shall release Tenant from its obligations under this Lease if, and only if, (i)
Tenant provides to Landlord such material financial details as to the
creditworthiness of the proposed transferee to reasonably assure Landlord that
the proposed transferee is as or more creditworthy than Tenant was on the
Commencement Date and (ii) the proposed transferee assumes all of Tenant's
obligations under this Lease including, without limitation, ALL OF TENANT'S
OBLIGATIONS, LIABILITIES AND RESPONSIBILITIES UNDER SECTION 5.03 OF THIS LEASE.
Landlord's acceptance of rent from any other person is not a waiver of any
provision of this Article 9. Consent to one Transfer is not a consent to any
subsequent Transfer. If Tenant's transferee defaults under this Lease, Landlord
may proceed directly against Tenant without pursuing remedies against the
transferee. Landlord may consent to subsequent assignments or modifications of
this Lease by Tenant's transferee, without notifying Tenant or obtaining its
consent. Such action shall not relieve Tenant's liability under this Lease.

         SECTION 9.05. NO MERGER. No merger shall result from Tenant's sublease
of the Premises under this Article 9, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.

ARTICLE 10.  DEFAULTS; REMEDIES

         SECTION 10.01. COVENANTS AND CONDITIONS. Tenant's performance of each
of Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Premises and exercise of any
other right granted Tenant under this Lease is conditioned upon such
performance. Time is of the essence of the performance of all covenants and
conditions.

         SECTION 10.02. DEFAULTS. Tenant shall be in material default (a
"Default") under this Lease:

               A. ABANDONMENT. If Tenant's abandonment or vacation of the
Premises results in the cancellation of any insurance described in Section 4.04.

               B. FAILURE TO PAY. If Tenant fails to pay Rent or any other
charge when due and such failure continues for a period of ten (10) days after
the date such payment is due, provided that with respect to the first two late
Rent payments which shall occur in any calendar year during the Term, Landlord
agrees to give Tenant written notice of default following nonreceipt of Rent
payment on or before the due date, and seven (7) days opportunity to cure such
default before a Default shall be deemed to have occurred hereunder. No written
notice shall be required with respect to subsequent Rent payment defaults during
such calendar year.

               C. FAILURE TO PERFORM NONMONETARY OBLIGATIONS. If Tenant fails to
perform any of Tenant's nonmonetary obligations under this Lease for a period of
thirty (30) days after written notice from Landlord; provided that if more than
thirty (30) days are required to complete such performance no Default shall
occur if Tenant commences such performance within the thirty (30) day period and
thereafter diligently pursues its completion.

               D. BANKRUPTCY. (i) If Tenant makes a general assignment or
general arrangement for the benefit of creditors and does not vacate such
assignment or arrangement within sixty (60) days; (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed by or
against Tenant and is not dismissed within sixty (60) days; (iii) if a trustee
or receiver is appointed to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease and
possession is not restored to Tenant within sixty (60) days; (iv) if
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease is subjected to attachment, execution or other judicial
seizure which is not discharged within thirty (30) days. If a court of competent
jurisdiction determines that any of the acts described in this Subsection (d) is
not a default under this Lease, and a trustee is appointed to take possession
(or if Tenant remains a debtor in possession) and such trustee or Tenant
transfers Tenant's interest hereunder, then Landlord shall receive, as
Additional Rent, the excess, if any, of the rent (or any other consideration)
paid in connection with such assignment or sublease over the rent payable by
Tenant under this Lease.

               E. GUARANTY REVOCATION OR TERMINATION. INTENTIONALLY DELETED

               F. DEFAULT BY TENANT ON CREDIT FACILITIES. (i) if Tenant
defaults, or an event of default shall occur, under any working capital,
inventory financing or asset financing Credit Facility (herein so-called)
including, but not limited to any term loan, line of credit, letter of credit,
guaranty, or other extension of credit under which Tenant is an obligor or
guarantor and such default authorizes the Tenant's creditor to pursue the
creditor's remedies for default under the instruments creating or securing the
Credit Facility, after expiration of any applicable notice or cure periods
(including agreed extensions of cure periods) to which Tenant is entitled under
such Credit Facility; or (ii) if any creditor of Tenant as to a financial or
other performance obligation of Tenant under a Credit Facility shall allege in
writing or file suit against Tenant, charging Tenant with breach or default in
the payment or performance thereof; (iii) if Tenant fails to notify Landlord in
writing within ten (10) days of (a) Tenant's defaults, or an event of default
occurring, under any Credit Facility including, but not limited to any term
loan, line of credit, letter of credit, guaranty, or other extension


                                      -12-
<PAGE>   15

of credit under which Tenant is an obligor or guarantor and such default
authorizes the Tenant's creditor to pursue the creditor's remedies for default
under the instruments creating or securing the Credit Facility, after expiration
of any applicable notice or cure periods (including agreed extensions of cure
periods) to which Tenant is entitled under such Credit Facility; or (b) any
creditor of Tenant as to a financial or other performance obligation of Tenant
under a Credit Facility alleging in writing or filing suit against Tenant,
charging Tenant with breach or default in the payment or performance thereof.

         SECTION 10.03. REMEDIES. On the occurrence of any Default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have:

               A. REPOSSESSION; DAMAGES. Terminate Tenant's right to possession
of the Premises by any lawful means in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. If
Tenant shall receive a demand for the payment of past due rent or any other
charge, any payments tendered thereafter to cure any default by Tenant shall be
made only by Cashier's Check. In event of repossession of the Premises following
Tenant's Default, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's Default, including an amount equal to
the excess of (i) the total rent for the unexpired balance of the Term following
the date the damage judgment is entered (or otherwise awarded)(the "Judgment
Date"), including, without limitation all applicable late charges and interest,
discounted at the Default Discount Rate (hereinafter defined) to the present
value on the Judgment Date, together with all other damages incurred by Landlord
in connection with Tenant's Default as specified in Section 10.05, below, plus
the unpaid rent due as of the Judgment Date, over (ii) the market rental value
of the Premises for the balance of the Term, discounted at the Default Discount
Rate to the present value on the Judgment Date. For the purposes of clause (i)
above, the components of monthly rent (other than Base Rent) for the remainder
of the Term shall be deemed to be equal to the respective monthly amounts
thereof as were due and payable during the month in which the Lease was
terminated. As used in clause (ii), the term "Default Discount Rate" shall be
the average of discount rates of the Federal Reserve Bank of Dallas in effect on
the first day of each of the six calendar months preceding the month in which
the Judgment Date falls, plus one percent (1%). If Tenant has abandoned the
Premises, Landlord shall have the option of (i) retaking possession of the
Premises and recovering from Tenant the amount specified in this Section 10.03A,
or (ii) proceeding under Section 10.03B.

               B. CONTINUANCE OF TENANT'S RIGHT TO POSSESSION. Maintain Tenant's
right to possession, in which case this Lease shall continue in effect whether
or not Tenant has abandoned the Premises. In such event, Landlord shall be
entitled to enforce all of Landlord's rights and remedies under this Lease,
including the right to recover the Rent as it becomes due.

               C. RELETTING. Enter upon and take possession of the Premises as
Tenant's agent without terminating this Lease and without being liable for
prosecution or any claim for damages therefor, and Landlord may relet the
Premises as Tenant's agent and receive the rental therefor, in which event
Tenant shall pay to Landlord on demand all sums due pursuant to Section 10.05,
below, together with any deficiency that may arise by reason of such reletting.

               D. PERFORMANCE OF TENANT'S LEASE OBLIGATIONS. Do whatever Tenant
is obligated to do under this Lease and enter the Premises, without being liable
for prosecution or any claim for damages therefor, to accomplish such purpose.
Tenant shall reimburse Landlord immediately upon demand for any reasonable
expenses which Landlord incurs in thus effecting compliance with this Lease on
Tenant's behalf, together with interest thereon at the highest lawful rate from
the date Landlord incurs the expense in question until Landlord is reimbursed
therefor.

               E. OTHER REMEDIES. Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in which
the Premises is located, including, but not limited to, reentering the Premises,
changing the locks, taking possession of any furniture or fixtures and selling
same at a private or public sale and applying the proceeds of such sale to the
costs of the sale, payment of damages and payment of sums owing under this
Lease.

         SECTION 10.04. MITIGATION. By execution of this Lease, Tenant
acknowledges that Landlord shall have no duty to mitigate damages caused by
Tenant's Default other than as specifically set forth in Texas Property Code
Section 91.006. If any duty shall be imposed under such law under the
circumstances of Tenant's Default, Tenant acknowledges that Landlord shall have
discharged any such duty if Landlord shall (a) market the Premises for reletting
with a sign posted on or in the vicinity of the Property, visible from a public
street, and by retention of a licensed real estate broker or agent, and (b)
advertise the availability of the Premises for reletting in any newspaper
circulated in the county in which the Premises are situated no less frequently
than monthly.

         SECTION 10.05. ADDITIONAL DAMAGES ATTRIBUTABLE TO TENANT DEFAULT. Upon
the occurrence of Tenant's Default, in addition to any other sum provided to be
paid herein, Tenant also shall be liable for and shall pay to Landlord: (i)
brokers' fees incurred by Landlord in connection with reletting the whole or any
part of the Premises; (ii)


                                      -13-
<PAGE>   16

the costs of removing and storing Tenant's or other occupant's property; (iii)
the reasonable costs of repairing, altering, remodeling or otherwise putting the
Premises into condition acceptable to a new tenant or tenants; (iv) all
reasonable expenses incurred in marketing the Premises; and (v) all reasonable
expenses incurred by Landlord in enforcing or defending Landlord's rights and/or
remedies. If either party hereto institutes any action or proceeding to enforce
any provision hereof by reason of any alleged breach of any provision of this
Lease, the prevailing party shall be entitled to receive from the losing party
all reasonable attorneys' fees and all court costs in connection with such
proceeding.

         SECTION 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.

ARTICLE 11.  PROTECTION OF LENDERS

         SECTION 11.01. RIGHT TO MORTGAGE AND TRANSFER. Landlord shall have the
right to transfer, mortgage, pledge or otherwise encumber, assign and convey, in
whole or in part, the Project, this Lease, and all or any part of the rights now
or thereafter existing therein and all rents and amounts payable to Landlord
under the provisions hereof. In the event of any such transfer or transfers
resulting in the transfer of Landlord's title to the Premises, Landlord herein
named (and in case of any subsequent transfer, the then transferor) shall be
automatically freed and relieved from and after the date of such transfer of all
personal liability with respect to the performance of any covenants or
agreements on the part of Landlord contained in this Lease thereafter to be
performed (without impairing Tenant's recourse, if any, against Landlord for
previous performance breach).

         SECTION 11.02. SUBORDINATION. This Lease shall be subordinate to any
deed of trust or mortgage encumbering the Premises, any advances made on the
security thereof and any renewals, modifications, consolidations, replacements
or extensions thereof, whenever made or recorded. Landlord shall use its best
efforts to obtain from Landlord's mortgagee, if any, a subordination,
non-disturbance and attornment agreement in the form attached hereto as Exhibit
"E" or such other form providing for nondisturbance rights as is then required
by Landlord's lender, provided that Tenant's obligations under this Lease shall
not be increased in any material way (the performance of ministerial acts shall
not be deemed material), and Tenant shall not be deprived of its rights under
this Lease. In the event Landlord has a mortgagee at the time this Lease is
executed, and Landlord is unable to obtain from such mortgagee and deliver to
Tenant a subordination, non-disturbance and attornment agreement as described in
this Section 11.02 within thirty (30) days after the date hereof, this Lease
shall terminate and be of no further force or effect unless, within ten (10)
days following Landlord's notice to Tenant of Landlord's inability to provide
such subordination, nondisturbance and attornment agreement, Tenant notifies
Landlord in writing of Tenant's desire to maintain this Lease, in which case
this Lease shall not terminate and shall remain in full force and effect except
that Landlord will not be required to provide such subordination,
non-disturbance and attornment agreement. Tenant shall cooperate with Landlord
and any lender which has or is acquiring a security interest in the Premises or
the Lease. Tenant shall execute such further documents and assurances as such
lender may reasonably require, in connection with the subordination of this
Lease to any deed of trust or mortgage encumbering the Premises. Tenant
covenants and agrees to execute and deliver upon reasonable demand such further
instruments subordinating this Lease to the lien of any such mortgage, deed of
trust or security agreement as shall be requested by Landlord and/or mortgagee
or proposed mortgagee or holder of any security agreement. Tenant's right to
quiet possession of the Premises during the Lease Term shall not be disturbed
except as expressly allowed by the terms of this Lease or any subordination,
non-disturbance and attornment agreement(s) binding Tenant. Notwithstanding
anything to the contrary contained herein, if any beneficiary or mortgagee
elects to have this Lease prior to the lien of its deed of trust or mortgage and
gives written notice thereof to Tenant, this Lease shall be deemed prior to such
deed of trust or mortgage whether this Lease is dated prior or subsequent to the
date of said deed of trust or mortgage or the date of recording thereof. Tenant
waives the provisions of any current or future statute, rule or law which may
give or purport to give Tenant any right or election to terminate or otherwise
adversely affect this Lease and the obligations of the Tenant hereunder in the
event of any foreclosure proceeding or sale.

         SECTION 11.03. ATTORNMENT. If Landlord's interest in the Premises is
acquired by any beneficiary under a deed of trust, mortgagee, or purchaser at a
foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Premises and recognize such transferee or successor
as Landlord under this Lease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant any right to terminate this
Lease or surrender possession of the Premises upon the transfer of Landlord's
interest.

         SECTION 11.04 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instruments or documents necessary or appropriate to evidence any such
attornment or subordination agreement to do so which are on forms reasonably
agreeable by the parties.

         SECTION 11.05 ESTOPPEL CERTIFICATES.

               A. CERTIFICATE REQUIREMENTS. Upon Landlord's written request or
the written request of any mortgagee or beneficiary under a deed of trust
encumbering the Premises but not more than twice in any calendar year, Tenant
shall execute, acknowledge and deliver to Landlord or to any mortgagee or
beneficiary under a deed of


                                      -14-
<PAGE>   17

trust encumbering the Premises, as the case may be, a written statement in the
form attached hereto as Exhibit "F" or such other form as is then reasonably
required by Landlord's lender, certifying: (i) that none of the terms or
provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other representations or information with respect to Tenant
or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Premises may reasonably require. Tenant shall
deliver such statement to Landlord within ten (10) business days after
Landlord's request. Landlord may give any such statement by Tenant to any
prospective purchaser or encumbrancer of the Premises. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.

               B. LANDLORD REMEDY. If Tenant does not deliver such statement to
Landlord or to any mortgagee or beneficiary under a deed of trust encumbering
the Premises, as the case may be, within such ten (10) business day period,
Landlord, and any prospective purchaser or encumbrancer may conclusively presume
and rely upon the following facts: (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by Landlord; (ii)
that this Lease has not been canceled or terminated except as otherwise
represented by Landlord; (iii) that not more than one month's Base Rent or other
charges have been paid in advance; and (iv) that Landlord is not in default
under the Lease. In such event, Tenant shall be estopped from denying the truth
of such facts.

         SECTION 11.06 TENANT'S FINANCIAL CONDITION. Within ten (10) days after
written request from Landlord or any mortgagee or beneficiary under a deed of
trust encumbering the Premises, as the case may be, Tenant shall deliver to
Landlord Tenant's most recent audited financial statements as Landlord
reasonably requires to verify the net worth and credit standing of Tenant or any
assignee or subtenant of Tenant. Tenant represents and warrants to Landlord that
each such financial statement is a true and accurate statement in all material
respects as of the date of such statement. Except for the delivery of financial
statements to any mortgagee or beneficiary under a deed of trust on the
Property, all financial information delivered by Tenant shall be confidential
and shall be used only for the purposes set forth in this Lease. This Section
11.06 shall not be applicable to Tenant as long as Tenant's financial
information described above is available from the Securities and Exchange
Commission.

ARTICLE 12.  LEGAL COSTS

         SECTION 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any
reasonable costs or expenses that the Nondefaulting Party incurs in connection
with any breach or default of the Defaulting Party under this Lease, whether or
not suit is commenced or judgment entered. Such costs shall include reasonable
legal fees and costs incurred for the negotiation of a settlement, enforcement
of rights or otherwise. Furthermore, if any action for breach of or to enforce
the provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. The losing party in such action shall pay such
reasonable attorneys' fees and costs. Each party to this Lease (hereafter, the
"Indemnitor") shall also indemnify the other (the "Indemnitee") against and hold
Indemnitee harmless from all costs, expenses, demands and liability Indemnitee
may incur if Indemnitee becomes or is made a party to any claim or action (a)
instituted by Indemnitor against any third party, or by any third party against
Indemnitor, or by or against any person holding any interest under or using the
Premises by license of or agreement with Tenant; (b) for foreclosure of any lien
for labor or material furnished to or for Indemnitor; (c) otherwise arising out
of or resulting from any act or transaction of Indemnitor; or (d) necessary to
protect Indemnitee 's interest under this Lease in a bankruptcy proceeding, or
other proceeding under Title 11 of the United States Code, as amended.
Indemnitor shall defend Indemnitee against any such claim or action at
Indemnitor's expense with counsel reasonably acceptable to Indemnitee or, at
Indemnitee s election, Indemnitor shall reimburse Indemnitee for any reasonable
legal fees or costs Indemnitee incurs in any such claim or action.

ARTICLE 13.  MISCELLANEOUS PROVISIONS

         SECTION 13.01. LATE CHARGES. Tenant's failure to pay Rent immediately
may cause Landlord to incur unanticipated costs. The exact amount of such costs
are impractical or extremely difficult to ascertain. Such costs may include, but
are not limited to, processing and accounting charges and late charges which may
be imposed on Landlord by any ground lease, mortgage or trust deed encumbering
the Project and Premises. Therefore, if Landlord does not receive any Rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord a
late charge equal to five percent (5%) of the overdue amount for all other such
late payments, if any, in said calendar year. The parties agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of such late payment.

         SECTION 13.02. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate of
eleven percent (11%) per annum from ten days after the due date of such amount.
However, interest shall not be payable on late charges to be paid by Tenant
under this Lease. The


                                      -15-
<PAGE>   18

payment of interest on such amounts shall not excuse or cure any default by
Tenant under this Lease. If the interest rate specified in this Lease is higher
than the rate permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law.

         SECTION 13.03. LANDLORD'S LIABILITY; CERTAIN DUTIES.

               A. DEFINITION OF LANDLORD. As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title to the
Property or Project at the time in question. Each Landlord is obligated to
perform the obligations of Landlord under this Lease only during the time such
Landlord owns such interest or title. Any Landlord who transfers its title or
interest is relieved of all liability with respect to the obligations of
Landlord under this Lease to be performed on or after the date of transfer.
However, each Landlord shall deliver to its transferee, or credit its transferee
with all funds that Tenant previously paid if such funds have not yet been
applied under the terms of this Lease.

               B. NOTICE. Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Lease to Landlord and to
any mortgagee or beneficiary under any deed of trust encumbering the Property
whose name and address have been furnished to Tenant in writing. Tenant agrees
to accept cure of any Landlord default from any mortgagee or beneficiary under
any deed of trust encumbering the Property, provided such party shall have no
liability or obligation to tender any cure. Landlord shall not be in default
under this Lease unless Landlord (or such mortgagee or beneficiary) fails to
cure such non-performance within thirty (30) days after receipt of Tenant's
notice. However, if such nonperformance reasonably requires more than thirty
(30) days to cure, Landlord shall not be in default if such cure is commenced
within such thirty (30) day period and thereafter diligently pursued to
completion.

               C. PERSONAL LIABILITY. Notwithstanding any term or provision
herein to the contrary, the liability of Landlord for the performance of its
duties and obligations under this lease is limited to Landlord's interest in the
Property and neither the Landlord nor its partners, shareholders, officers or
other principals shall have any personal liability under this Lease. Tenant
agrees to look solely to Landlord's interest in the Property for the recovery of
any judgment against Landlord, and Landlord shall not be liable for any
deficiency. The foregoing provision shall not limit any right that Tenant may
otherwise have to obtain specific performance of Landlord's obligations under
this Lease.

               D. RIGHTS OF LANDLORD. At any time during the Lease Term,
Landlord or its agents may enter the Premises at reasonable times upon for the
purpose of exercising any or all of the following reserved rights without being
liable in any manner to Tenant, provided that Landlord shall have no duty or
obligation to perform any of the rights so reserved:

                    (1) To change the name of  the Project without notice to
Tenant;

                    (2) To take any and all measures, including making
inspection, repairs, alterations, additions and improvements to the Project as
may be necessary or desirable for the safety, protection, preservation, or more
efficient operation of the Project or the enhancement or protection of
Landlord's interests therein; and

                    (3) During the last 180 days of the Term or any renewal or
extension, to display a sign advertising the availability of the Premises for
lease, to show the Premises to prospective tenants, and to otherwise market the
Premises for the purpose of reletting same, provided that Landlord shall
exercise Landlord's best efforts to avoid unreasonable interruptions of the
conduct of Tenant's business in the Premises.

                    (4) To enter upon prior reasonable notice to Tenant and
conduct an inspection of the Premises, including invasive tests, at any
reasonable time to determine whether Tenant is complying with the terms of the
Lease, including but not limited to the compliance of the Premises and the
activities thereon with Environmental Requirements, provided that (i) Landlord
shall exercise Landlord's best efforts to avoid unreasonable interruptions of
the conduct of Tenant's business in the Premises; (ii) Tenant shall have the
right to be present during such entry by Landlord or its agents; and (iii) in
the case of an emergency, no such notices shall be required. The cost of the
Landlord's investigation shall be paid by Landlord unless such investigation
discloses a violation of any Environmental Requirement by The Tenant Group or
the existence of a Hazardous Material on the Premises or any other Premises
caused by the actions of The Tenant Group (other than Hazardous Materials used
in compliance with all Environmental Requirements and previously approved in
writing by Landlord), in which case Tenant shall pay such cost.

         SECTION 13.04. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.


                                      -16-
<PAGE>   19

         SECTION 13.05. INTERPRETATION. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall include
the singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Premises with Tenant's expressed or
implied permission.

         SECTION 13.06. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of the
Premises and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.

         SECTION 13.07. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be either personally delivered, or sent via
telecopy with receipt confirmation, or by Federal Express or other regularly
scheduled overnight courier or sent by United States mail, registered or
certified with return receipt requested, properly addressed and with full
postage prepaid. All notices shall be effective upon delivery by the sender
(which, in the case of telecopied notice, shall be the date such telecopy is
transmitted with confirmation of receipt) or the day delivery is tendered to the
addressee (in the case of hand delivered notices) or three (3) days after the
day the notice is consigned by the sender (in the case of couriered or mailed
notices). Either party may change its notice address upon written notice to the
other party.

         Said notices shall be sent to the parties hereto at the following
addresses, unless otherwise notified in writing (provided that upon Tenant's
taking possession of the Premises, the Premises shall be Tenant's address for
notice purposes).

              To Landlord:     Argent Frankford, L.P.
                               5949 Sherry Lane, Suite 1000
                               Dallas, Texas  75225
                               Attn:  C. E. Cornutt
                               Phone: (214) 361-6090
                               Facsimile:  (214) 361-5032

              with copy to:    Charles C. Jordan
                               Carrington, Coleman, Sloman & Blumenthal, L.L.P.
                               200 Crescent Court, Suite 1500
                               Dallas, Texas  75201
                               Phone:  (214) 855-3000
                               Facsimile:  (214) 855-1333

              To Tenant:       Home Interiors & Gifts, Inc.
                               4550 Spring Valley
                               Dallas, Texas 75244-3705
                               Attention:  General Counsel
                               Phone: (972) 386-1084
                               Facsimile: (972) 386-1106

              with copy to:    Weil Gotshal & Manges LLP
                               100 Crescent Court, Suite 1300
                               Dallas, Texas 75201
                               Att'n:  Robert C. Feldman
                               Phone:  (214) 746-7744
                               Facsimile:  (214) 746-7777

              To Mortgagee:
                               ----------------------------

                               Phone:
                                     ----------------------

                               Facsimile:
                                         ------------------

         SECTION 13.08. WAIVERS. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord


                                      -17-
<PAGE>   20

from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter accompanying
a payment check shall be binding on Landlord. Landlord may, with or without
notice to Tenant, negotiate such check without being bound to the conditions of
such statement.

         SECTION 13.09. NO RECORDATION. Except for a memorandum hereof if in
form and content reasonably approved by Landlord required by a leasehold
mortgagee to perfect the mortgagee's lien on the leasehold in connection with
leasehold financing permitted in this Lease, Tenant shall not record this Lease
without prior written consent from Landlord. The party requiring such recording
shall pay all transfer taxes and recording fees.

         SECTION 13.10. BINDING EFFECT; CHOICE OF LAW. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THIS LEASE.

         SECTION 13.11. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is
a corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has fully authority to do so and that this Lease binds the
corporation.

         SECTION 13.12. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.

         SECTION 13.13. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control are acts of God, war,
civil commotion, labor disputes, strikes, fire, flood or other casualty,
shortages of labor or material, government regulation If Landlord shall be
unable to perform or shall be delayed in the performance of any obligation under
this Lease by reason of events beyond Landlord's control, such nonperformance or
delay in performance shall not render Landlord liable in any respect for damages
to either person or property, constitute a total or partial eviction,
constructive or otherwise, work an abatement of rent or relieve Tenant from the
fulfillment of any covenant or agreement contained in this Lease.

         SECTION 13.14. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.

         SECTION 13.15. SURVIVAL. All representations and warranties of Landlord
and Tenant not fully performed on the date of the expiration or termination of
this Lease shall survive the termination of this Lease for a period of one year,
except the covenants, warranties, and indemnities of Landlord and Tenant set
forth in Article 5, which shall survive such expiration or termination for the
maximum period of time allowed by law.

         SECTION 13.16. GENDER AND NUMBER. Whenever the context so requires
herein, the neuter gender shall include the masculine and feminine, and the
singular number shall include the plural.

ARTICLE 14.  BROKERS

         SECTION 14.01. BROKER'S FEE. When this Lease is signed by and delivered
to both Landlord and Tenant, Landlord shall pay a real estate commission to both
Brokers named in Section 1.05 above, if any, as provided in the written
commission agreements between Landlord and such Brokers. Tenant shall have no
responsibility to pay either Landlord's Broker or Tenant's Broker.

         SECTION 14.02. NO OTHER BROKERS. Tenant represents and warrants to
Landlord that the brokers named in Section 1.05 above are the only agents,
brokers, finders or other parties with whom Tenant has dealt who are or may be
entitled to any commission or fee with respect to this Lease or the Premises.

ARTICLE 15.  TAX DEFERRED EXCHANGE, PURCHASE OPTION AND RENEWAL OPTION

         SECTION 15.01. PURCHASE OPTION. Landlord grants to Tenant the option to
purchase the Property subject to the terms and conditions set forth in Exhibit
"G" to this Lease.

         SECTION 15.02. PURCHASE AND SALE OF BUILDING. Landlord and Tenant agree
to the purchase and sale of the Property in the event Tenant shall consummate
the Minimum Exchange (as defined in the PSA) within the period set forth on
Exhibit "G" to this Lease. Such purchase and sale shall be subject to the terms
and conditions of Exhibit "G."

         SECTION 15.03. RENEWAL OPTION. Landlord grants to Tenant the option to
renew this Lease subject to the terms and conditions set forth in Rider 1 to
this Lease.


                                      -18-
<PAGE>   21

         ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED
HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED,
PLEASE DRAW A LINE THROUGH THE SPACE BELOW.



                                      -19-
<PAGE>   22


         Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all Riders
which are attached to or incorporated by reference in this Lease.

                                              "LANDLORD"

Signed on                     , 19            ARGENT FRANKFORD, L.P.,
         ---------------------    ---         a Texas limited partnership
at
----------------------------------
                                              By:
                                                 ----------------------------

                                              By:
                                                 ----------------------------

                                              "TENANT"

Signed on                     , 19            Home Interiors & Gifts, Inc.,
         ---------------------    ---         a Texas corporation
at
----------------------------------
                                              By:
                                                 ----------------------------
                                              Its:
                                                  ---------------------------

                                              By:
                                                 ----------------------------
                                              Its:
                                                  ---------------------------


<PAGE>   23


                                   EXHIBIT "E"

                        SUBORDINATION, NONDISTURBANCE AND
                              ATTORNMENT AGREEMENT

         THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made this ___ day of ______ , 199__ , by and among _________ , a
__________ chartered banking institution (hereinafter called "Mortgagee"),
__________ , a ___________ (hereinafter called "Tenant") and ______________ , a
_______________ (hereinafter called "Landlord").

                              W I T N E S S E T H:

         WHEREAS, Mortgagee is or will be the owner and holder of a ___________
(hereinafter called the "Mortgage"), covering the real property described in
Exhibit "A" attached hereto and made a part hereof and the Building and
improvements thereon (hereinafter collectively called the "Property") securing
the payment of a promissory note in the stated principal amount of $______ ,
executed by Landlord and payable to the order of Mortgagee; and

         WHEREAS, Tenant is the holder of a lease (hereinafter called the
"Lease") dated ______, 19__, by and between Landlord, as the landlord, and
Tenant, as the tenant, covering that portion of the Property described therein
(hereinafter called the "Leased Premises"); and

         WHEREAS, Landlord, Tenant and Mortgagee desire to confirm and agree
upon certain of their rights and obligations with respect to the Lease and the
Mortgage;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Landlord, Tenant and Mortgagee hereby agree and covenant as
follows:

         1. Subordination. The Lease now is, and shall at all times continue to
be, subject and subordinate in each and every respect, to the Mortgage and to
any and all increases, renewals, modifications, extensions, substitutions,
replacements and/or consolidations of the Mortgage.

         2. Nondisturbance. So long as Tenant is not in default (beyond any
period given Tenant in the Lease to cure such default) in the payment of rent or
in the performance of any of the terms, covenants or conditions of the Lease on
Tenant's part to be performed, (i) Tenant's possession of the Leased Premises
and Tenant's rights and privileges under the Lease, or any extensions or
renewals thereof, or expansions into additional space within the Property which
may be effected in accordance with the terms of the Lease, shall not be
diminished or interfered with by Mortgagee in the exercise of any of its rights
under the Mortgage, (ii) Tenant's occupancy of the Leased Premises or any such
expansion space shall not be disturbed by Mortgagee in the exercise of any of
its rights under the Mortgage during the term of the Lease or any such
extensions or renewals thereof, and (iii) Mortgagee will not join Tenant as a
party defendant in any action or proceeding for the purpose of terminating
Tenant's interest and estate under the Lease because of any default under the
Mortgage.

         3. Attornment. In the event any proceedings are brought for the
foreclosure of the Mortgage or if the Property be sold pursuant to a trustee's
sale under the Mortgage, or upon a transfer of the Property by conveyance in
lieu of foreclosure, Tenant shall attorn to the purchaser upon any such
foreclosure sale or trustee's sale or transfer in lieu thereof and shall
recognize such purchaser as the Landlord under the Lease. Such attornment shall
be effective and self-operative without the execution of any further instrument
on the part of any of the parties hereto. Tenant agrees, however, to execute and
deliver at any time and from time to time, upon the request of Landlord or of
any holder(s) of any of the indebtedness or other obligations secured by the
Mortgage or any such purchaser, any instrument or certificate which, in the
reasonable judgment of Landlord or of such holder(s) or such purchaser, may be
necessary or appropriate in any such foreclosure proceeding or otherwise to
evidence such attornment. In the event of any such attornment, Tenant further
waives the provisions of any statute or rule of law, now or hereafter in effect,
which may give or purport to give Tenant any right or election to terminate or
otherwise adversely affect the Lease and the obligations of Tenant thereunder as
a result of any such foreclosure proceeding, trustee's sale or conveyance in
lieu thereof.

         4. Foreclosure and Sale. If Mortgagee shall succeed to the interest of
Landlord under the Lease in any manner, or if any purchaser acquires the Leased
Premises upon any foreclosure of the Mortgage or any trustee's sale under the
Mortgage, Mortgagee or such purchaser, as the case may be, shall have the same
remedies by entry, action or otherwise in the event of any default by Tenant
(beyond any period given to Tenant in the Lease to cure such default) in the
payment of rent or additional rent or in the performance of any of the terms,
covenants and conditions of the Lease on Tenant's part to be performed that
Landlord had or would have had if Mortgagee or such purchaser had not succeeded
to the interest of Landlord. From and after attornment by Tenant, Mortgagee or
such purchaser shall be bound to Tenant under all of the terms, covenants, and
conditions of the Lease, and Tenant shall, from and after the succession to the
interest of Landlord under the Lease by Mortgagee or such purchaser, have the
same remedies against Mortgagee or such purchaser for the breach of an agreement
contained in the Lease that Tenant might have had under the Lease against
Landlord if Mortgagee or such purchaser had not succeeded to the interest of
Landlord; provided further, however, that Mortgagee or such purchaser shall not
in any event be:

<PAGE>   24

         (a)      liable for any act or omission of any prior landlord
                  (including Landlord); or

         (b)      subject to any offsets or defenses which Tenant might have
                  against any prior landlord (including Landlord); or

         (c)      bound by any rent or additional rent which Tenant might have
                  paid for more than the current month to any prior landlord
                  (including Landlord), or by any security deposit, cleaning
                  deposit or other prepaid charge which Tenant might have paid
                  in advance to any prior landlord (including Landlord), unless
                  actually received by Mortgagee or such purchaser; or

         (d)      bound by or liable for any obligation of the landlord to pay
                  any sums of money to or for the benefit of or on behalf of
                  Tenant for concessions or inducements granted to Tenant by the
                  landlord (including Landlord) except as expressly set forth in
                  the Lease; or

         (e)      bound by any amendment or modification of the Lease made
                  without its consent.

         5. Acknowledgment and Agreement by Tenant. Tenant acknowledges and
agrees that:

         (a)      Mortgagee, in making any disbursements to Landlord, is under
                  no obligation or duty to oversee or direct the application of
                  the proceeds of such disbursements, and such proceeds may be
                  used by Landlord for purposes other than improvement of the
                  Property.

         (b)      From and after the date hereof, in the event of any act or
                  omission by Landlord which would give Tenant the right, either
                  immediately or after the lapse of time, to cease paying rent
                  or terminate the Lease or to claim a partial or total
                  eviction, Tenant will not exercise any such right:

                    (i)  until it has given written notice of such act or
                         omission to Mortgagee; and

                    (ii) if Landlord shall have failed to cure such default
                         within the time provided for in the Lease, then the
                         Mortgagee 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 to cure such default shall be
                         deemed granted to Mortgagee if within such thirty (30)
                         days Mortgagee 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 the Lease shall not be terminated while
                         such remedies are being so diligently pursued.

         (c)      It has notice that the Lease and the rent and all other sums
                  due thereunder have been assigned or are to be assigned to
                  Mortgagee as security for the Loan secured by the Mortgage. In
                  the event that Mortgagee notifies Tenant of a default under
                  the Mortgage and demands that Tenant pay its rent and all
                  other sums due under the Lease to Mortgagee, Tenant shall
                  honor such demand and pay its rent and all other sums due
                  under the Lease directly to Mortgagee or as otherwise required
                  pursuant to such notice.

         (d)      It shall send a copy of any notice or statement claiming a
                  default by Landlord under the Lease to Mortgagee at the same
                  time such notice or statement is sent to Landlord.

         (e)      This Agreement satisfies any condition or requirements in the
                  Lease relating to the granting of a non-disturbance agreement.

         6. Acknowledgment an Agreement by Landlord. Landlord, as landlord under
the Lease and mortgagor or grantor under the Mortgage, acknowledges and agrees
for itself and its successors and assigns, that:

         (a)      This Agreement does not:

                    (i)  constitute a waiver by Mortgagee of any of its rights
                         under the Mortgage; and/or

                    (ii) in any way release Landlord from its obligations to
                         comply with the terms, provisions, conditions,
                         covenants, agreements and clauses of the Mortgage;

         (b)      The provisions of the Mortgage remain in full force and effect
                  and must be complied with by Landlord; and

         (c)      In the event of a default under the Mortgage, Tenant may pay
                  all rent and all other sums due under the Lease to Mortgagee
                  as provided in this Agreement.

         7. Notice. All notices to be delivered hereunder to Mortgagee shall be
deemed to have been duly given if mailed under United States registered or
certified mail, with return receipt requested, postage prepaid to Mortgagee at
_____________ (or at such other address as shall be given in writing by
Mortgagee to Tenant) and shall be deemed complete upon any such mailing.

<PAGE>   25

         8. Miscellaneous.

         (a)      This Agreement supersedes any inconsistent provision of the
                  Lease.

         (b)      Mortgagee shall have no obligations nor incur any liability
                  with respect to any warranties of any nature whatsoever,
                  whether pursuant to the Lease or otherwise, including, without
                  limitation, any warranties respecting use, compliance with
                  zoning, Landlord's title, Landlord's authority, habitability,
                  fitness for purpose or possession.

         (c)      This Agreement shall inure to the benefit of the parties
                  hereto, their respective successors and permitted assigns;
                  provided, however, that in the event of the assignment or
                  transfer of the interest of Mortgagee, all obligations and
                  liabilities of Mortgagee under this Agreement shall terminate,
                  and thereupon all such obligations and liabilities shall be
                  the responsibility of the party to whom Mortgagee's interest
                  is assigned or transferred.

         (d)      This Agreement shall be governed by and construed in
                  accordance with the laws of the State of Texas.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                   MORTGAGEE:


                                   ------------------,
                                   a              chartered banking institution
                                    --------------


                                   By:
                                      ------------------------------------------
                                   Name:
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------


                                   TENANT:


                                   --------------------------------------------,
                                   a
                                    ---------------------------

                                   By:
                                      ------------------------------------------
                                   Name: (Printed)
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------


                                   LANDLORD:


                                   --------------------------------------------,
                                   a
                                    ---------------------------

                                   By:
                                      ------------------------------------------
                                   Name: (Printed)
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------


<PAGE>   26




STATE OF TEXAS      '
                    '
COUNTY OF DALLAS    '

         This instrument was acknowledged before me on this ____ day _______ of
_________ , 199___, by _________, ______________ of Compass Bank, a Texas state
chartered banking institution, on behalf of said bank.

[SEAL]
                                             _____
                                                  Notary Public, State of Texas

STATE OF__________'
                  '

COUNTY OF_________'

         This instrument was acknowledged before me on this ____ day ________ of
, 199___, by _________, ___________________ of _________________, a
______________, on behalf of said ____________.


[SEAL]
                                             _____
                                                  Notary Public, State of Texas

STATE OF TEXAS          '
                        '
COUNTY OF __________    '

         This instrument was acknowledged before me on this ______ day of
__________, 199___, by _________, _______________ of ___________________, a
_______________ corporation, on behalf of said corporation.

[SEAL]
                                             _____
                                                  Notary Public, State of ______


<PAGE>   27


                                   EXHIBIT "F"

                              ESTOPPEL CERTIFICATE

The undersigned, ___________________, does hereby make the following statements:

Article  1. The undersigned is the Tenant under a certain Lease dated
            ___________ _____________________, with ___________, as Landlord,
            leasing the Premises commonly known
            as______________________________________________.

Article  2. The Lease dated ______________________ is in full force and effect
            and the undersigned is aware of no defaults under the terms and
            conditions of the Lease and has no offsets against rentals due the
            Landlord or to become due the Landlord.

Article  3. The undersigned accepted possession of the Premises on __________,
            the Lease Term began on , and ends on , pursuant to the terms and
            conditions of the Lease.

Article 4.  The total Base Rent to be paid pursuant to the terms of said Lease
            is not less than $____________________ and no Base Rent has been
            paid more than one month in advance.

Article 5.  In the event of a default by the Landlord under any of the terms and
            conditions of the Lease, the undersigned at the same time notice
            thereof is given to the Landlord, will notify the holder of any
            first mortgage or deed of trust covering the Property, provided
            Landlord has provided Tenant the address of such mortgagee. In the
            event that the default is not cured by the Landlord within the time
            provided for under the terms and conditions of the Lease and
            provided the Mortgagee has given the undersigned written notice of
            mortgagee's intention to cure such default, the undersigned will
            allow the mortgagee the opportunity and sufficient additional time
            within which to correct Landlord's default, provided the mortgagee
            diligently pursues such cure.


                                            ------------------------------------
                                            By:
                                               ---------------------------------

                                            Title:
                                                  ------------------------------

                                            Date:
                                                 -------------------------------


<PAGE>   28



                                   EXHIBIT "G"

                          INDUSTRIAL REAL ESTATE LEASE

                            (SINGLE TENANT FACILITY)

              TAX DEFERRED EXCHANGE AND PURCHASE OPTION PROVISIONS

A. Landlord hereby grants to Tenant the right to purchase the Property (the
"Option") on the terms set forth in this Rider. Tenant shall use its best good
faith efforts to consummate the Minimum Exchange (as defined in the PSA) on or
before July 1, 2001, keep Landlord informed on a regular basis of the status of
such transaction, and notify Landlord if the Minimum Exchange shall be
completed. It is the intention of the parties that if the Minimum Exchange is
consummated, the Tenant shall complete its tax-deferred exchange through the
Buyer's purchase of the Property, or alternatively, the Tenant may elect to
purchase the Property without disposing of the Exchange Tracts. If Tenant shall
consummate the Minimum Exchange on or before July 1, 2001, Landlord agrees to
sell and Tenant agrees to purchase the Property in accordance with the
applicable terms of the PSA thirty (30) days after the Minimum Exchange is
consummated (or on the first business day following such period, if it expires
on a day which is not a business day). (Applicable terms of the PSA refers to
the PSA sections described in item B.8., below.)

B. Alternatively, if Tenant shall exercise the Option, Landlord agrees to sell
and Tenant agrees to purchase the Property subject to the following terms and
conditions:

         (1)      Each capitalized term defined in this Rider shall have the
                  meaning set forth in the PSA, unless otherwise defined herein.

         (2)      The purchase price (the "Option Price") for the Property under
                  the Option shall be the greater of: (i) [the Purchase Price as
                  calculated at lease commencement date] , and (ii) the fair
                  market value (the "Market Value") of the Property (giving
                  effect to the costs of constructing Buyer Elections, as
                  defined in the PSA), determined in accordance with
                  subparagraph 4, below.

         (3)      Tenant shall have the right to exercise the Option by written
                  notice (the "Option Notice") to Landlord at any time through
                  5:00 p.m., Dallas, Texas time, April 1, 2001. Tenant's notice
                  of exercise shall specify Tenant's opinion of Market Value and
                  a closing date a minimum of forty five (45) days following the
                  date of Tenant's notice. Closing shall occur no later than
                  July 1, 2001. If Tenant shall have failed to exercise the
                  Option on or before April 1, 2001, or, if exercised, to have
                  closed the purchase of the Option on or before July 1, 2001,
                  for any reason (other than the failure or refusal of Landlord
                  to deliver a deed to the Property or to comply with the terms
                  of subparagraph 4), the Option shall be null and void.

         (4)      During the thirty (30) day period following the Option Notice,
                  Landlord and Tenant shall diligently negotiate the purchase
                  price of the Property in good faith, based on the Market Value
                  proposed by Tenant in the Option Notice and Landlord's opinion
                  of Market Value. If the parties are unable to reach agreement
                  with respect to the purchase price within such period, the
                  Market Value of the Property shall be determined in accordance
                  with the following procedure:

                           (a) Within ten (10) days after receipt of Tenant's
                  written notice of such an election, each party, by giving
                  written notice to the other party, shall appoint an appraiser
                  to render a written opinion of the Market Value. Each
                  appraiser must be a member of the Appraisal Institute of
                  America (MAI) for at least five years and with at least ten
                  years experience in the appraisal of industrial property
                  values in the area in which the Property is located. The two
                  appraisers shall render their written opinions of the Market
                  Value within twenty (20) days after the appointment of the
                  second appraiser. If the greater of the determined Market
                  Values is within 105% of the lesser of such Market Values,
                  then the average of the two appraisals of Market Value shall
                  be utilized as the Market Value and shall be binding on the
                  parties. If one party does not appoint its appraiser as
                  provided above, then the one appointed shall determine the
                  Market Value. The Market Value so determined under this
                  subparagraph shall be binding on Landlord and Tenant.

                           (b) If the greater of the determined Market Values is
                  more than one hundred five percent (105%) of the lesser of
                  such Market Values, then the two appraisers shall pick a third
                  appraiser within ten (10) days after the two appraisers have
                  rendered their opinions of Market Value as provided above. If
                  the two appraisers are unable to agree on the third appraiser
                  within said ten (10) day period, Landlord and Tenant shall
                  mutually agree on a third appraiser within ten (10) days
                  thereafter. The third appraiser shall be a person who has not
                  previously acted in any capacity for either Landlord or Tenant
                  and must meet the qualifications stated above.

                           (c) Within twenty (20) days after his appointment,
                  the third appraiser shall

<PAGE>   29

                  render its written opinion of the Market Value ("Third
                  Opinion"). The appraisal of Market Value made by Landlord's or
                  Tenant's appraiser that is closest to the Market Value
                  specified in the Third Opinion shall be the Market Value. If
                  the Market Value set forth in the Third Opinion is equidistant
                  from the Market Values determined by Landlord's and Tenant's
                  appraisers, then the Market Value contained in the Third
                  Opinion shall be the Market Value. The Market Value so
                  determined under this subparagraph shall be binding on
                  Landlord and Buyer.

                           (d) Each party shall bear the cost of its own
                  appraiser and one-half (1/2) the cost of the third appraiser.

                           (e) In the event that the procedures for
                  determination of the Market Value shall result in a
                  determination of the purchase price occurring later than five
                  (5) business days prior to the closing proposed in the Option
                  Notice, the closing shall be extended to the fifth (5th)
                  business day following the date on which the Market Value
                  shall be determined.

                  (4) Within thirty (30) days following the Option Notice,
         Landlord shall deliver to Buyer:

                           (a) A survey (the "Option Survey") of the Land and
                  Rail Easement conforming with the provisions of Section 4 of
                  the PSA, except that the survey shall be dated no earlier than
                  the date of the Option Notice and shall locate all
                  improvements constructed on the Property; and

                           (b) A Commitment for Title Insurance (the "Option
                  Title Work") for the Land and Rail Easement conforming with
                  the provisions of Section 4 of the PSA.

         Tenant shall have the right to review the Option Survey and Option
         Title Work in accordance with the provisions of Section 4 of the PSA,
         provided that any item which was a Permitted Exception in connection
         with Landlord's initial review of the Survey and Title Commitment shall
         be a Permitted Exception in connection with the Option.

                  (5) At the closing of the Option, Landlord shall convey good
         and indefeasible fee simple title to the Land, the Building, and such
         other improvements as are incorporated into the Property by Landlord in
         accordance with Exhibit "C" to the PSA, and nonexclusive easement
         rights in the Rail Easement, free and clear of all liens, encumbrances,
         easements, restrictions, rights, conditions and exceptions to title,
         except the Permitted Exceptions, to Tenant by special warranty deed and
         other legal instruments and documents of conveyance.

                  (6) Closing shall occur in accordance with the terms of
         Section 6 of the PSA on the date provided in the Option Notice
         (extended, if necessary, in accordance with Section B.3(e), above),
         subject to the following terms:

                           (a) The terms, provisions and conditions pertaining
                  to the consummation of Tenant's tax deferred exchange in the
                  second grammatical paragraph of Section 6 of the PSA shall not
                  apply in the closing of the Option transaction.

                           (b) The purchase price shall be the Option Price, and
                  Landlord's obligation with respect to the Owner's Policy of
                  Title Insurance shall be to pay the cost of the basic premium
                  for the Title Policy in the amount of the Option Price. Tenant
                  shall be credited for reimbursements made under Section 16C of
                  the PSA.

                            (c) Tenant shall be obligated to reimburse Landlord
                  at the closing of the Option for the following fees and
                  expenses (collectively, the "Financing Costs") which Landlord
                  incurs or is obligated to reimburse to prospective lenders in
                  connection with any financing alternative for the period after
                  July 1, 2001:

                           (i) If the Option Notice (hereafter defined) shall be
                           given on or after December 27, 2000, but prior to
                           March 27, 2001, reasonable preparatory costs,
                           including attorneys' fees, survey costs, appraisal
                           fees, and other costs related to preparation for
                           obtaining a permanent loan commitment on the Property
                           (but excluding standby or loan commitment fees, which
                           shall be subject to reimbursement only as provided in
                           subparagraph ii); plus

                           (ii) If the Option Notice (hereafter defined) shall
                           be given after March 27, 2001, but on or prior to
                           July 1, 2001, standby and/or loan commitment fees
                           payable to obtain assurance by the lender that the
                           Landlord will have available to it permanent
                           financing on the Property, in the event the Tenant
                           does not exercise its option to purchase the
                           Property.
<PAGE>   30

                           (iii) It is expressly provided, however, that the
                           aggregate of out-of-pocket permanent loan-related
                           costs reimbursable by Tenant under subparagraphs (i)
                           and (ii) shall not exceed one percent (1%) of the
                           principal of the permanent loan sought by Landlord.

                  Landlord agrees to furnish Tenant with true and correct copies
                  of the invoices, statements, or other evidence of such
                  out-of-pocket costs incurred or assumed by Landlord.

                           (d) Possession of the Property shall be delivered to
                  Tenant at the closing of the Option, subject to Tenant's
                  possessory rights under Tenant's lease (if any) and subject to
                  the Permitted Exceptions.

                  (7) The representations of Landlord and Tenant in Sections 7
         and 9 of the PSA shall apply in connection with the Option.

                  (8) The provisions of Sections 12 (Casualty Damage), 13
         (Condemnation), 14 (Termination, Default and Remedies)(other than the
         provisions of Section 14 relating to termination of the Agreement
         pursuant to Section 5, which shall not apply), 15 (Exchange), 17 (Force
         Majeure), 18 (Shared Access Drive), and 19 (Miscellaneous) of the PSA
         shall apply in connection with the Option.

C. In the event that the Option expires without exercise or is otherwise
terminated, Tenant shall have a continuing right of first refusal to purchase
the Property at the price and on the terms offered to Landlord by a third party,
pursuant to a bona fide offer to purchase in the form of a contract offer or
nonbinding letter of intent, submitted to Landlord which Landlord is prepared to
accept during the lease term. Landlord shall provide Tenant with a copy of such
offer and Tenant shall be obligated to return the offer to Landlord, signed by
Buyer, within five (5) business days after Landlord's delivery, if Tenant
intends to exercise its right of first refusal. If Tenant fails to do so for any
reason, Tenant's right of first refusal shall terminate with respect to the sale
to the party extending the offer refused by Buyer, and Landlord shall have the
right thereafter to sell the Property to such party free of any rights of Tenant
to purchase same. If Landlord's proposed sale is not consummated with such party
(or affiliates controlled by, or under common control with, the original
offeror), Tenant's right of first refusal shall remain in effect with respect to
future sales proposed by Landlord during the ten year term of the Tenant's
lease. Tenant agrees to furnish Landlord with a written release of Tenant's
right of first refusal upon request, from and after expiration of such right in
accordance with its terms.


<PAGE>   31



                                     RIDER 1

                                       TO

                          INDUSTRIAL REAL ESTATE LEASE
                            (SINGLE-TENANT FACILITY)

                                 RENEWAL OPTION

        Provided Tenant is not in default and no event has occurred which, with
notice or the passage of time could become a Default when Tenant delivers such
notice, Tenant may renew this Lease for up to two (2) consecutive additional
periods of five (5) years each, on the same terms provided in this Lease, except
that the Base Rent payable for each month shall be market rate for space of
equivalent size, quality and utility taking into account the credit standing of
Tenant; Tenant Finish Out, and like factors affecting Tenant's utilization of
the Premises and Landlord's return on investment from the Premises ("Renewal
Rate"), as mutually agreed by Landlord and Tenant. Tenant's right of first
refusal to purchase the Property shall not apply during any renewal term.

        Tenant shall deliver written notice to Landlord indicating whether or
not Tenant elects to preserve its option to extend the Term no later than 270
days prior to the expiration of the Term ("Election Date"). Within 30 days after
the Election Date, Landlord shall provide Tenant with a proposed Base Rent
Renewal Rate. The proposed Renewal Rate shall be determined by Landlord in its
reasonable discretion, taking into account the factors described herein above.
If Tenant shall object to Landlord's proposed Renewal Rate, Landlord and Tenant
shall, by mutual agreement of the parties, either (i) negotiate in good faith to
determine a mutually acceptable Renewal Rate or (ii) enter into non-binding
mediation. If Landlord and Tenant reach mutual agreement as to the Renewal Rate
on or before the day 180 days prior to the expiration of the Term (the "Renewal
Deadline"), such rate shall be the Renewal Rate, and Landlord and Tenant shall
enter into an agreement confirming Tenant's exercise of this renewal option at
such Renewal Rate. If Landlord and Tenant fail to reach mutual agreement on or
before the Renewal Deadline, this renewal option shall be null and void.
Notwithstanding anything contained herein to the contrary: (a) if Tenant fails
to deliver written notice indicating whether or not it elects to preserve its
option to extend prior to the Election Date, Tenant shall be deemed to have
elected not to extend the Term and the renewal option set forth herein shall
automatically terminate, and (b) Tenant's rights hereunder shall terminate if
(i) this Lease expires or is canceled, or because of an event of Default, this
Lease or Tenant's right to possession of the Premises is terminated, or (ii)
Tenant fails to timely exercise its option hereunder time being of the essence
with respect to Tenant's exercise thereof.