<PAGE>   1
                                                                   EXHIBIT 10.20

                                     DERMODY
                                   PROPERTIES
                             STANDARD INDUSTRIAL LEASE    For Landlord Use Only:
                                   [NET-NET-NET]                Building #:  524
                                                                       L/A:  BPE


                       Lease Preparation Date: July 9,1996

Landlord: Dermody lndustnal Group, a Nevada Joint Venture. located at 1200
Financial Boulevard. P.O. Box 7098. Reno. Nevada 89510

Tenant: Innovative Gaming Inc.. a Nevada Corporation

Trade Name (dba) : Innovative Gaming Inc.

1.     LEASE TERMS

       1. 01 Premises: The Premises referred to in this Lease contain
approximately 53,109 square feet as shown on Exhibit "A" attached. The address
of the Leased Premises is: 4750 Turbo Circle, Reno, Nevada 89502.

       1.02 Project: The Project in which the Premises are located consist of
approximately 53,109 square feet as shown in Exhibit A.

       1.03 Tenant's Notice Address: Tenant's Notice Address is the address of
the Leased Premises as defined in Section 1.01 unless otherwise specified here:
4750 Turbo Circle, Reno, Nevada 89502

       1.04 Landlord's Notice Address: P.O. Box 7098. Reno, Nevada 89510

       1.05 Tenant's Permitted Use: Design, development, manufacture, sales and
distribution of slot machines and gaming equipment.

       1.06 Lease Term: The Lease Term is for three (3) years and commences on
November 1, 1998, and expires October 31. 2001. Notwithstanding anything
contained in the Lease, the Lease shall not become effective and binding on the
Landlord in the event any of the following events or conditions have occurred or
are in existence as of the Commencement date:

       (i) Tenant is not a subtenant in lawful possession of the Premises under
the sublease dated May 14. 1996. by and between Thomas and Betts Corporation
(sublessor) and Innovating Gaming Corporation of America (sublessee) and/or
Master lease dated May 9, 1988 by and between Dermody Industrial Group (Lessor)
and Thomas and Betts Corporation (Lessee) (hereinafter "Master lease"); (ii)
Tenant's right to possession of the Premises has been terminated under the
provisions of the Sublease and/or Master lease or by any applicable law: (iii)
Tenant is or has been previously in Default as defined under the terms of the
Sublease and/or Master lease: (iv) prior to the Commencement date, Tenant has
failed to provide to Landlord a copy of 


<PAGE>   2
Tenant's most current financial statement or any other information requested by
Landlord respecting Tenant's ability to comply with the terms of the Lease: or
(v) in Landlord's opinion, Tenant has demonstrated the inability to comply with
the terms of the Lease. Compliance with the foregoing requirements shall be and
are considered conditions precedent to the execution of the Lease.

       1.07 Base Monthly Rent shall be paid in lawful money of the United States
of America on the following schedule;

Year 1, November 1, 1998 - 
October 31, 1999:                     NINETEEN THOUSAND TWO HUNDRED
                                      FIFTY-SIX AND NO/100 DOLLARS
                                      ($19,256.00) per month;

Year 2, November 1, 1999 - 
October 31, 2000;                     TWENTY THOUSAND SEVEN HUNDRED
                                      AND NO/100 DOLLARS ($20,700.00) per
                                      month; and

Year 3, November 1, 2000 - 
October 31, 2001:                     TWENTY-TWO THOUSAND ONE HUNDRED FORTY-FOUR
                                      AND NO/100 DOLLARS ($22,144.00) per
                                      month.

       1.08 Security Deposit; TWENTY-TWO THOUSAND ONE HUNDRED FORTY-FOUR AND
NO/100 DOLLARS ($22,144.00) in lawful money of the United States of America,

       1.09 Proportionate Share: Tenant's Proportionate Share is 100% based upon
the total square footage of the Project and the square footage of the Premises.

       1.10 Index: The Index for calculating cost of living adjustments in the
Consumer Price Index shall be the All Urban Consumers, U. S, City Average
(1982/84=100).

       1.11 Tenant is entitled to common vehicle parking spaces subject to the
provisions of Section 8 of the Lease,

       1.12 Tenant Improvements. Tenant Improvements to be performed in the
Premises, if any, will be performed in accordance with the terms and provisions
entitled "Landlord's Work" contained in Exhibit "B" attached if applicable,
Thereafter during the Lease Term, Landlord will be under no obligation to alter,
change, decorate or improve the Premises, Tenant agrees to accept Premises in an
"as is" condition.

2.     DEMISE AND POSSESSION

       2.01 Landlord leases to Tenant and Tenant leases from Landlord the
Premises described in 1.01. By entering the Premises, Tenant acknowledges that
it has examined the Premises and accepts the Premises in their present condition
subject to any additional work Landlord has agreed to do as stated on Exhibit B
if applicable. Landlord expressly reserves its right to lease any other space
available in the Project to whom ever it wishes, further Tenant hereby
acknowledges that it did not rely on any other tenant remaining a tenant in the
Project as a consideration for entering into this Lease,

       2.02 If for any reason Landlord cannot deliver possession of the Premises
on the date the Lease commences, Landlord shall not be subject to any liability
nor shall the validity of this Lease be affected, If Tenant has not caused such
delay there shallbe a proportionate reduction of the Base Monthly Rent covering
the period between the commencement of the Lease Term and the date when Landlord
can deliver possession. However, Tenant, unless it is the cause of the delay,
has the right to cancel this Lease by written notification if possession of the
Premises is not delivered within one hundred eighty (180) days of the date the
Lease Term commences. Landlord may terminate this Lease by giving written notice
to Tenant if possession of the Premises is not delivered within one hundred
eighty (180) days of the date the lease is to commence.

3.     BASE MONTHLY RENT

       3.01 Base Monthly Rent; On the first day of every calendar month of the
Lease Term commencing November 1, 1998, Tenant will pay, without deduction or
offset, prior notice or demand, Base Monthly Rent at the place designated by
Landlord. The first month's rent is will be due and payable November 1, 1998. In
the event, that the Term of this Lease commences or ends on a day other then the
first day of a calendar month, a prorated amount of Base Monthly Rent shall be
due upon execution and it will be calculated using a thirty (30) day month, In
the event this Lease is to commence upon a date not ascertained on execution,
both parties agree to complete and execute a Commencement Date Certificate in
the form of Exhibit "E" within ten (10) days of the Commencement Date, if
applicable.


<PAGE>   3
       3.02 N/A

       3.03 Any installment of rent or any other charge payable which is not
paid within ten (10) days after it becomes due will be considered past due and
Tenant will pay to Landlord as Additional Rent a late charge equal to the
product of the variable Prime Rate "Prime", plus six percent (6%) per annum as
charged by Bank of America, Nevada; times the amount of such installment amount
due, or eighteen percent (18%) per annum of such installment or the sum of
twenty-five dollars ($25.00), whichever is greater, for each month or fractional
month transpiring from the date due until paid, A twenty-five dollar ($25.00)
handling charge will be paid by Tenant to Landlord for each returned check and,
thereafter, Tenant will pay all future payments of rent or other charges due by
money order or cashier's check, In the event a late charge is assessed for three
(3) consecutive rental periods, whether or not it is collected, the rent shall
without further notice become due and payable quarterly in advance
notwithstanding any provision of this Lease to the contrary. If Tenant shall be
served with a demand for the payment of past due rent, any payments tendered
thereafter to cure any default by Tenant shall be made only by cashier's check.

       3.04 N/A

4.     COMMON AREAS

       4 .01 Definitions: "Common Areas"; "Common Area" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are provided and designated by Landlord for the non-exclusive use
of Landlord, Tenant and other lessees of the Project and their respective
employees, agents, customers and invitees. Common Areas includes, but are not
limited to; all parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways, corridors, landscaped areas
and any restrooms used in common by lessees.

       4.02 Tenant, its employees, agents, customers and invitees have the
non-exclusive right (in common with other Tenants, Landlord, and any other
person granted use by Landlord) to use of the Common Areas. Tenant agrees to
abide by and conform to, and to cause its employees, agents, customers and
invitees to abide by and conform to all rules and regulations established by
Landlord subject to provisions of paragraph 24.

       4.03 Landlord has the right, in its sole discretion, from time to time,
to; 1) make changes to the Common Areas, including without limitation, changes
in the location, size, shape end number of driveways, entrances, parking spaces,
parking areas, ingress, egress, direction of driveways, entrances, corridors
parking areas and walkways; 2) close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
avaIlable; 3) add additional buildings and improvements to the Common Areas; 4)
use the Common Areas while engaged in making additional improvements, repairs or
alterations to the Project or any portion thereof; do and perform any other acts
or make any other changes in, to or with respect to the Common Areas and Project
as Landlord may, in the exercise of sound business judgment, deem to be
appropriate.

5.     ADDITIONAL RENT

       5.01 All charges payable by Tenant other than Base Monthly Rant are
called "Additional Rent". Unless this lease provides otherwise, Additional Rent
is to be paid with the next monthly installment of Base Monthly Rent and is
subject to the provisions of 3.03. The term "rent" whenever used in this Lease
means Base Monthly Rent and Additional Rent.

       5.02 Operating Costs

       A. "Operating Costs" are all costs and expenses of ownership, operation,
maintenance, management, repair and insurance incurred by Landlord for the
Project including, but not limited to the following; all supplies, materials,
labor and equipment, used in or related to the operation and maintenance of the
Common Areas; all utilities, including but not limited to:
       water, electricity, gas, heating, lighting, sewer, waste disposal related
to the maintenance or operation of the Common Areas; all air-conditioning and
ventilating costs related to the maintenance or operation of the Project; all
Landlord's costs in managing, maintaining, repairing, operating and insuring the
Project, including, for example, clerical, supervisory, and janitorial staff;
all maintenance, management and service agreements, including but not limited
to, janitorial, security, trash removal related to the maintenance or operation
of the Project; all legal and accounting costs and fees for licenses and permits
related to the ownership and operation of the Project; all insurance premiums
and costs of fire, casualty, and liability coverage, rent abatement and
earthquake insurance and any other type of insurance related to the Entire
Project, including any deductible for a loss attributable to the Premises; all
operation, maintenance and repair costs to the Common Areas, including but not
limited to, sidewalks, walkways, parkways, parking areas, loading and unloading
areas, trash areas, roadways, driveways, corridors, and landscaped area,
including for example, costs of resurfacing and restriping parking areas; all
maintenance and repair costs of building exteriors (including painting, asphalt
repair and replacement and roof maintenance, repair and replacement), restrooms
used in common by Tenants and signs and directories of the Project; amortization
(along with reasonable financing charges) of capital improvements made to the
Common Areas which may be required by any government authority or which will
improve the operating efficiency of the Project; a reasonable reserve for
repairs and replacement; a five percent (5%) fee for Landlord's supervision of
the Common Areas (five percent (5%) of the total above mentioned costs and
expanses incurred in a calendar year). Operating Costs will not include
depreciation of the Project.


<PAGE>   4
       B. Tenant shall pay to Landlord Tenant's Proportionate Share of the
Operating Costs as indicated in 1.09. If there is a change in the square footage
of either the Project or the Premises during the term of this Lease the
Proportionate Share of the Tenant shall be adjusted according]y. Such payment
shall be paid by Tenant with and in addition to the monthly payment of Base
Monthly Rent. Tenant shall, if Landlord so elects, pay to Landlord on a monthly
basis, in advance, the amount which Landlord reasonably estimates to be Tenant's
Proportionate Share of the Operating Costs. In the event of such election by
Landlord, Landlord shall periodically determine Tenant's share of the actual
Operating Costs, and in the event that the amount which Tenant has paid to
Landlord on account of the estimated Operating Costs is less than his share of
such actual Operating Costs, Tenant shall pay such difference to Landlord on the
next rent payment date, In the event that Tenant has paid to Landlord more than
his share of such actual Operating Costs, the amount of such difference shall be
credited against Tenant's payments of Operating Costs next due or if such period
is at the end of the Lease term the amount of any overpayment shall be promptly
refunded to Tenant.

       C. Failure by Landlord to provide Tenant with a statement by April 1st of
each year shall not constitute a waiver by Landlord of its right to collect
Tenant's share of Operating Costs or estimates for a particular calendar year,
Landlord's right to charge Tenant for such expenses in subsequent years is not
waived.

       5.03 Taxes

       A. "Real Project Taxes" are: (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 Project; (ii) any tax or fee
on Landlord's right to receive, or the receipt of, rent or income from the
Project or against Landlord's business of leasing the Project, (iii) any tax or
charge for fire protection, streets, sidewalks, road maintenance, refuse or
other services provided to the Project by any governmental agency; (iv) any tax
imposed upon this transaction, or based upon a re-assessment of the Project due
to a change in ownership or transfer of all of part or Landlord's interest in
the Project; (v) any charge or fee replacing, substituting for, or in addition
to any tax previously included within the definition of real property tax; and
(vi) the Landlord's cost of any tax protest relating to any of the above. Real
Project Taxes do not, however, include Landlord's federal or state income,
franchise, inheritance or estate taxes.

       B. Tenant shall pay to Landlord Tenant's Proportionate Share of the Real
Project Taxes as indicated in 1.09. Such payment shall be paid by Tenant
annually upon being invoiced for such taxes in addition to the monthly payment
of Base Monthly Rent. Tenant shall, if Landlord so elects, pay to Landlord on a
monthly basis, in advance, the amount which Landlord reasonably estimates to be
Tenant's Proportionate Share of the Real Project Taxes. In the event of such
election by Landlord, Landlord shall periodically determine Tenant's share of
the actual Real Project Taxes, and in the event that the amount which Tenant has
paid to Landlord on account of the Real Project Taxes is less than his share of
such actual Real Project Taxes, Tenant shall pay such difference to Landlord on
the next rent payment date. In the event that Tenant has paid to Landlord more
than his share of such actual Real Project Taxes, the amount of such difference
shall be credited against Tenant's payment of Real Project Taxes next due. If
the Lease term is expired then Landlord shall promptly refund any overpayment to
Tenant.

       C. Personal Property Taxes: Tenant will pay all taxes charged against
trade fixtures, furnishing, equipment or any other personal property belonging
to Tenant. Tenant will have personal property taxes billed separately from the
Project. If any of Tenant's personal property is taxed with the Project, Tenant
will pay Landlord the taxes for the personal property upon demand by Landlord.

       5.04 Based on Tenant's Proportionate Share defined in 1.09, Tenant agrees
to pay as Additional Rent to Landlord its share of any parking charges, utility
surchargas, occupancy taxes, or any other costs resulting from the statutes or
regulations, or interpretations thereof, enacted by any governmental authority
in connection with the use or occupancy of the Project or the parking facilities
serving the Project, or any part thereof.

       5.05 Landlord by completing this paragraph may elect to have Tenant pay a
monthly estimate of the Additional Rent due from Tenant of five cents per square
foot per month, i.e.. TWO THOUSAND SIX HUNDRED FIFTY-FIVE AND 45/100 DOLLARS
($2.655.45) per month. Landlord shall make adjustments to this estimate based
upon actual costs and projected future costs. Landlord shall periodically
determine the balance between actual Additional Rent and Additional Rent paid by
Tenant and make adjustments in accordance with 5.02 and 5.03 above.

6.     SECURITY DEPOSIT

       6.01 If Tenant defaults with respect to any provision of this Lease,
Landlord may retain, use or apply all or any part of the Security Deposit to
compensate Landlord for any loss or damage suffered by Tenant's default
including but not limited to, the payment of Base Monthly Rent, Additional Rent
or other rental sums due, and for payment of amounts Landlord is obligated to
spend by reason of Tenant's default. If any portion is so retained, used or
applied, Tenant, upon demand, will deposit with Landlord an amount sufficient to
restore the deposit to its original amount, as adjusted per 3.02, except as
otherwise provided by law. Landlord will not be required to keep the Security
Deposit separate from its general funds, and Tenant will not be entitled to
interest on it. If Tenant fully and faithfully performs every provision of this
Lease, the Security Deposit or a balance thereof will be returned to Tenant
within 30 days after the expiration of this Lease or any renewals of this Lease.
In no event will Tenant have the right to apply any part of the Security Deposit
to any rents payable under this Lease.


<PAGE>   5

7.     USE OF PREMISES; QUIET CONDUCT

       7.01 The Premises may be used and occupied only for Tenant's Permitted
Use as shown in 1.05 and for no other purpose, without obtaining Landlord's
prior written consent. Tenant will comply with all laws, ordinances, orders and
regulationsaffecting the Premises. Tenant will not perform any act or carry on
any practices that may injure the Project or the Premises or be a nuisance or
menace, or disturb the quiet enjoyment of other lessees in the Project including
but not limited to equipment which causes vibration, use or storage of
chemicals, or heat or noise which is not properly insulated. Tenant will not
cause, maintain or permit any outside storage on or about the Premises. In
addition, Tenant will not allow any condition or thing to remain on or about the
Premises which diminishes the appearance or aesthetic qualities of the Premises
and/or the Project or the surrounding property. The keeping of a dog or other
animal on or about the Premises is expressly prohibited.

       7.02 As used in this section, the term "Hazardous Waste" means:

       A. Those substances defined as "hazardous substances", "hazardous
materials", "toxic substances", "regulated substances", or "solid waste" in the
Toxic Substance Control Act, 15 U.S.C. # 2601 et. seq., as now existing or
hereafter amended ("TSCA"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. # 9601 et. seq., as now
existing or hereafter amended ["CERCLA"), the Resource, Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et. seq., as now existing or
hereafter amended ("RCRA"], the Federal Hazardous Substances Act, 15 U.S.C. #
1261 et. seq., as now existing or hereafter amended ("FHSA"), the Occupational
Safety and Health Act of 1970, 29 U.S.C. # 651 et. seq., as now existing or
hereafter amended ("OSHA"), the Hazardous Materials Transportation Act, 49
U.S.C. # 1801 et. seq., as now existing or hereafter amended ("HMTA"), and the
rules and regulations now in effect or promulgated hereafter pursuant to each
law referenced above;

       B. Those substances defined as "hazardous waste", "hazardous material",
or "regulated substances" in Nev. Rev. Stat. ch 459, 1989 Nev. Stat. ch. 598 and
1989 Nev. Stat. ch 363, or in the regulations now existing or hereafter
promulgated pursuant thereto or in the Uniform Fire Code, 1988 edition;

       C. Those substances listed in the United States Department of
Transportation table (49 CFR # 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto); and

       D. Such other substances, mixtures, materials and waste which are
regulated under applicable local, state or federal law, or which are classified
as hazardous or toxic under federal, state or local laws or regulations (all
laws, rules and regulations referenced in paragraphs (a), (b), (c) and (d) are
collectively referred to as "Environmental Laws").

       7.03 Tenant's Covenants. Tenant does not intend to and Tenant will not,
nor will Tenant allow any other person (including partnerships, corporations and
joint ventures), during the term of this Lease to manufacture, process, store,
distribute, use, discharge or dispose of any Hazardous Waste in, under or on the
Project, the Common Areas, or any property adjacent thereto.

       A. Tenant shall notify Landlord promptly in the event of any spill or
release of Hazardous Waste into, on, or onto the Project regardless of the
source of spill or release, whenever Tenant knows or suspects that such a
release occurred.

       B. Tenant will not be involved in operations at or near the Project which
could lead to the imposition on the Tenant or the Landlord of liability or the
creation of a lien on the Project, under the Environmental Laws.

       C. Tenant shall, upon twenty-four (24) hour prior notice by Landlord,
permit Landlord or Landlord's agent access to the Project to conduct an
environmental site assessment with respect to the Project.

       7.04. Indemnity. Tenant for itself and its successors and assigns
undertakes to protect, indemnify, save and defend Landlord, its agents,
employees, directors, officers, shareholders, affiliates, consultants,
independent contractors, successors and assigns (collectively the "Indemnitees")
harmless from any and all liability, loss, damage and expense, including
reasonable attorneys' fees, claims, suits and judgments that Landlord or any
other Indemnitee, whether as Landlord or otherwise, may suffer as a result of,
or with respect to:

       A. Any Environmental Law, including the assertion of any lien thereunder
and any suit brought or judgment rendered regardless of whether the action was
commenced by a citizen (as authorized under the Environmental Laws) or by a
government agency;

       B. Any spill or release of or the presence of any Hazardous Waste
affecting the Project whether or not the same originates or emanates from the
Project or any contiguous real estate, including any loss of value of the
Project as a result of a spill or release of or the presence of any Hazardous
Waste;

       C. Any other matter affecting the Project within the jurisdiction of the
United States Environmental Protection Agency, the Nevada State Environmental
Commission, the Nevada Department of Conservation and Natural Resources, or the
Nevada 


<PAGE>   6
Department of Commerce, including costs of investigations, remedial action, or
other response costs whether such costs are incurred by the United States
Government, the State of Nevada, or any Indemnitee;

       D. Liability for clean-up costs, fines, damages or penalties incurred
pursuant to the provisions of any applicable Environmental Law; and

       E. Liability for personal injury or property damage arising under any
statutory or common-law tort theory, including, without limitation, damages
assessed for the maintenance of a public or private nuisance, or for the
carrying of an abnormally dangerous activity, and response costs.

       7.05 Remedial Acts. In the event of any spill or release of or the
presence of any Hazardous Waste affecting the Project, whether or not the same
originates or emanates from the Project or any contiguous real estate, and/or if
Tenant shall fail to comply with any of the requirements of any Environmental
Law, Landlord may, without notice to Tenant, at its election, but without
obligation so to do, gives such notices and/or cause such work to be performed
at the Project and/or take any and all other actions as Landlord shall deem
necessary or advisable in order to remedy said spill or release of Hazardous
Waste or cure said failure of compliance and any amounts paid as a result
thereof, together with interest at the rate equal to the product of the variable
Prime Rate "Prime", plus six percent (6%) per annum as charged by Bank of
America, Nevada; times the amount of such installment amount due, or eighteen
percent (18%) per annum of such installment or the sum of twenty-five dollars
($25.00), whichever is greater, for each month or fractional month transpiring
from the date due until paid.

       7.06 Settlement. Landlord upon giving Tenant ten (10) days prior notice,
shall have the right in good faith to pay, settle or compromise, or litigate any
claim, demand, loss, liability, cost, charge, suit, order, judgment or
adjudication under the belief that it is liable therefor, whether liable or not,
without the consent or approval of Tenant unless Tenant within said ten (10) day
period shall protest in writing and simultaneously with such protest deposit
with Landlord collateral satisfactory to Landlord sufficient to pay and satisfy
any penalty and/or interest which may accrue as a result of such protest and any
judgment or judgments as may result, together with attorney's fees and expenses,
including, but not limited to, environmental consultants.

8.     PARKING

       8.01 Tenant and Tenant's customers, suppliers, employees, and invitees
have the non-exclusive right to park in common with other lessees in the parking
facilities as designated by Landlord. Tenant agrees not to overburden the
parking facilities and agrees to cooperate with Landlord and other lessees in
the use of the parking facilities. Landlord reserves the right to, on an
equitable basis, assign specific spaces with or without charge to Tenant as
Additional Rent, make changes in the parking layout from time to time, and to
establish reasonable time limits on parking.

9.     UTILITIES

       9.01 Tenant will be responsible for and shall pay for all water, gas,
heat, light, power, sewer, electricity, or other services metered, chargeable to
or provided to the Premises separate from and in addition to the costs outlined
in Section 5.02 dealing with the utility costs for Common Area Maintenance.
Landlord reserves the right to install separate meters for any such utility.

       9.02 Landlord will not be liable or deemed in default to Tenant nor will
there be any abatement of rent for any interruption or reduction of utilities or
services not caused by any act of Landlord or any act reasonably beyond
Landlord's control. Tenant agrees to comply with energy conservation programs
implemented by Landlord by reason of enacted laws or ordinances.

       9.03 Tenant will contract and pay for all telephone and such other
services for the Premises subject to the provisions of 10.03.

10.    ALTERATIONS, MECHANIC'S LIENS

       10.01 Tenant will not make any alterations to the Premises without
Landlord's prior written consent. Landlord's consent shall be contingent upon
Tenant providing Landlord with the following items or information, all subject
to Landlord's approval: (i) Tenant's contractor, (ii) certificates of insurance
by Tenant's contractor for commercial general liability insurance with limits
not less than $2,000,000 General Aggregate,$1,000,000 Products/Complete
Operations Aggregate,$1,000,000 Personal & Advertising Injury, $1,000,000 Each
Occurrence, $50,000 Fire Damage, $5,000 Medical Expense, $1,000,000 Auto
Liability (Combined Single Unit, including Hired/Nonowned Auto Liability),
Workers Compensation, including Employer's Liability, as required by state
statute endorsed to show Landlord as an additional insured and for worker's
compensation as required and (iii) detailed plans and specifications for such
work. Tenant agrees that it will have its contractor execute a waiver of
mechanic's lien and that Tenant will remove any mechanic's lien placed against
the Project within ten (10) days of receipt of notice of lien. In addition,
before alterations may begin, valid building permits or other permits or
licenses required must be furnished to Landlord, and, once the alterations
begin, Tenant will diligently and continuously pursue their completion. At
Landlord's option, any alterations may become part of the realty and belong to
Landlord. If requested hy Landlord, Tenant will pay, prior to the commencement
of the 


<PAGE>   7
construction, an amount determined by Landlord necessary to cover the costs of
demolishing such alterations and/or the cost of returning the Premises to its
condition prior to such alterations. As a further condition to giving such
consent, Landlord may require Tenant to provide Landlord, at Tenant's sole cost
and expense, a payment and performance bond in form acceptable to Landlord, in a
principal amount not less than one and one-half times the estimated costs of
such alterations, to ensure Landlord against any liability for mechanic's and
materialmen's liens and to ensure completion of work. Tenant, at Landlord's
option, shall at Tenant's expense remove all alterations and repair all damage
to the Premises.

       10.02 Notwithstanding anything in 10.01, Tenant may, with written consent
of Landlord, install trade fixtures, equipment, and machinery in conformance
with the ordinances of the applicable city and county, and they may be removed
upon termination of its Lease provided the Premises are not damaged by their
removal.

       10.03 Any private telephone Systems and/or other related
telecommunications equipment and lines must be installed within Tenant's
Premises and, upon termination of this Lease removed and the Premises restored
to the same condition as before such Installation.

       10.04 Tenant will pay all costs for alterations and will keep the
Premises, the Project and the underlying property free from any liens arising
out of work performed for, materials furnished to or obligation incurred by
Tenant.

       10.05 Landlord will have the right to construct or permit construction of
tenant improvements in or about the Project for existing and new Tenants end to
alter any public areas in and around the Project. Notwithstanding anything which
may be contained in this Lease, Tenant understands this right of Landlord and
agrees that such construction will not be deemed to constitute a breach of this
Lease by Landlord and Tenant waives any such claim which it might have arising
from such construction.

11.    FIRE INSURANCE: HAZARDS AND LIABILITY INSURANCE

       11.01 Except as expressly provided as Tenant's Permitted Use, or as
otherwise consented to by Landlord in writing. Tenant shall not do or permit
anything to be done within or about the Premises which will increase the
existing rate of insurance on the Project and shall, at its sole cost and
expense, comply with any requirements, pertaining to the Premises, of any
insurance organization insuring the Project and Project-related apparatus.
Tenant agrees to pay to Landlord, as Additional Rent, any increases in premiums
on policies resulting from Tenant's Permitted Use or other use consented to by
Landlord which Increases Landlord's premiums or requires extended coverage by
Landlord to insure the Premises.

       11.02 Tenant, at all times during the term of this Lease and at Tenant's
sole expense, will maintain a policy of standard fire and extended coverage
insurance with "all risk" coverage on all Tenant's improvements and alterations
in or about the Premises and on all personal property and equipment to the
extent of at least ninety percent (90%) of their full replacement value. The
proceeds from this policy will be used by Tenant for the replacement of personal
property and equipment and the restoration of Tenant's improvements and/or
alterations. This policy will contain an express waiver, in favor of Landlord,
of any right of subrogation by the insurer.

       11.03 Tenant, at all times during the term on this Lease and at Tenant's
sole expense, will maintain a policy of commercial general liability coverage
with limits of not less than $2,000,000 combined single limit for bodily injury
and property damage insuring against all liability of Tenant and its authorized
representatives arising out of or in connection with Tenant's use or occupancy
of the Premises.

       11.04 All insurance will name Landlord and/or Landlord's designated
partners and affiliates as an additional Insured and will include an express
waiver of subrogation by the insurer in favor of Landlord and Tenant and will
release Landlord from any claims for damage to any person, to the Premises, and
to the Project, and to Tenant's personal property, equipment, improvements and
alterations in or on the Premises of the Project, caused by or resulting from
risks which are to be insured against by Tenant under this Lease. All insurance
required to be provided by Tenant under this Lease will (a) be issued an
insurance company authorized to do business in the state in which the Premises
are located and which has and maintains a rating of A/X in the Best's Insurance
Reports or the equivalent, (b) be primary and noncontributing with any insurance
carried by Landlord, and (c) contain an endorsement requiring at least thirty
(30) days prior written notice of cancellation to Landlord before cancellation
or change in coverage, scope or limit of any policy. Tenant will deliver a
certificate of insurance or a copy of the policy to Landlord within thirty (30)
days of execution of this Lease and will provide evidence of renewed insurance
coverage at each anniversary, and prior to the expiration of any current
policies; however, in no event will Tenant be allowed to occupy the Premises
before providing adequate and acceptable proof of insurance as stated above.
Tenant's failure to provide evidence of this coverage to Landlord may, in
Landlord's sole discretion, constitute a default under this Lease.

12.    INDEMNIFICATION AND WAIVER OF CLAIMS

       12.01 Tenant waives all claims against Landlord for damage to any
property in or about the Premises and for injury to any persons, including death
resulting therefrom, regardless of cause or time of occurrence. Tenant will
defend, indemnify and hold Landlord harmless from and against any and all
claims, actions, proceedings, expenses, damages and liabilities, including
attorney's fees, arising out of, connected with, or resulting from any use of
the Premises by Tenant, its employees, agents, visitors 


<PAGE>   8
or licensees, including, without limitation, any failure of Tenant to comply
fully with all of the terms and conditions of this Lease except for any damage
or injury which is the direct result of intentional acts by Landlord, its
employees, agents, visitors or licensees.

13.    REPAIRS

       13.01 Tenant shall, at its sole expense, keep and maintain the Premises
and every part thereof (excepting common use equipment, which Landlord agrees to
repair or replace pursuant to Section 5.02 unless damages are due to the neglect
or intentional acts of Tenant or its agents, employees, visitors, or licensees),
including interior windows, skylights, doors, plate glass, any store fronts and
the interior of the Premises, in good and sanitary order, condition and repair.
Tenant will, also, at its sole cost keep and maintain all utilities, fixtures,
plumbing and mechanical equipment used by Tenant in good order and repair and
furnish all expendables (light bulbs, paper goods, soaps, etc.) used in the
Premises. The standard for comparison and need of repair will be the condition
of the Premises at the time of commencement of this Lease and all repairs will
be made by a licensed and bonded contractor approved by Landlord.

       13.02 Tenant will not make repairs to the Premises at the cost of
Landlord whether by deductions of rent or otherwise, or vacate the Premises or
terminate the Lease if repairs are not made. If during the Term, any alteration,
addition or change to the Premises is required by legal authorities, Tenant, at
its sole expense, shall promptly make the same. Landlord reserves the right to
make any such repairs not made or maintained in good condition by Tenant and
Tenant shall reimburse Landlord for all such costs upon demand.

       13.03 If repairs deemed necessary by Landlord or any government authority
are not made by Tenant within the prescribed time frame as requested in writing,
Tenant shall be in default of this Lease.

       13.04 Tenant shall, at its own expense, within thirty days of lease
commencement, contract with a vendor acceptable to Landlord for the maintenance
service of the HVAC which will be furnished to the Landlord upon request. If
Tenant fails to obtain and maintain such a maintenance service contract Landlord
shall have the right to obtain such a maintenance service contract at the
expense of Tenant.

14.    AUCTIONS, SIGNS, AND LANDSCAPING

       14.01 Tenant will not conduct or permit to be conducted any sale by
auction on the Premises. Landlord will have the right to control landscaping and
approve the placement, size, and quality of signs . Tenant will not make
alterations or additions to the landscaping and will not place any signs nor
allow the placement of any signs, which are visible from the outside, on or
about any building of the Project, nor in any landscape area, without the prior
written consent of Landlord. Landlord will have the right in its sole discretion
to withhold its consent. Any signs not in conformity with this Lease may be
removed by Landlord at Tenant's expense.

15.    ENTRY BY LANDLORD

       15.01 Tenant will permit Landlord and Landlord's agents to enter the
Premises at all reasonable times for the purpose of inspecting the same, or for
the purpose of maintaining the Project, or for the purpose of making repairs,
alterations or additions to any portion of the Project, including the erection
and maintenance of such scaffolding, canopies, fences and props as may be
required, or for the purpose of posting notices of nonresponsibility for
alterations, additions or repairs, or for the purpose of showing the Premises
to prospective tenants during the last six months of the Lease Term, or placing
upon the Project any usual or ordinary "for sale" signs, without any rebate of
rents and without any liability to Tenant for any loss of occupation or quiet
enjoyment of the Premises thereby occasioned. Tenant will permit Landlord at any
time within sixty (60) days prior to the expiration of this Lease, to place upon
the Premises any usual or ordinary "to let" or "to lease" signs. Tenant will not
install a new or additional lock or any bolt or any door of the Premises without
the prior written consent of Landlord, which will not be unreasonably withheld.
If Landlord gives its consent, such work shall be undertaken by a locksmith
approved by Landlord, at Tenant's sole cost. Landlord retains the right to
charge Tenant for restoring any altered doors to their condition prior to the
installation of the new or additional locks.

16.    ABANDONMENT

       16.01 Tenant will not vacate or abandon the Premises, which shall be
deemed to occur any time during the Lease Term if Tenant does not conduct
business for a period of fifteen (15) consecutive days and/or leaves the
Premises unoccupied for any period of time. If Tenant abandons, vacates or
surrenders the Premises, or is dispossessed by process of law, or otherwise, any
personal property belonging to Tenant left in or about the Premises will, at the
option of Landlord be deemed abandoned and may be disposed of by Landlord in the
manner provided for by the laws of the state in which the Premises are located.

17.    DESTRUCTION

       17.01 In the case of total destruction of the Premises, or any portion
thereof substantially interfering with Tenant's use of the Premises, whether by
fire or other casualty, not caused by the fault or negligence of Tenant, its
agents, employees, servants, contractors, subtenants, licensees, customers or
business invitees, this Lease shall terminate except as herein provided. If
Landlord notifies Tenant in writing within forty-five (45) days of such
destruction of Landlord's election to repair said damage, and if Landlord
proceeds to and does repair such damage with reasonable dispatch, this Lease
shall not terminate, but shall continue in full force and affect, except that
Tenant shall be entitled to a reduction in the minimum rent in an amount equal
to that proportion of 


<PAGE>   9
the minimum rent which the number of square feet of floor space in the unusable
portion bears to the total number of square feet of floor space in the Premises.
Said reduction shall be prorated so that the rent shall only be reduced for
those days any given area is actually unusable. In determining what constitutes
reasonable dispatch, consideration shall be given to delays caused by labor
disputes, civil commotion, war, warlike operations, invasion, rebellion,
hostilities, military or usurped power, sabotage, governmental regulations or
control, fire or other casualty, inability to obtain any materials or services,
acts of God and other causes beyond Landlord's control. If this Lease is
terminated pursuant to this Section l7 and if Tenant is not in default
hereunder, rent shall be prorated as of the date of termination, any security
deposited with Landlord shall be returned to Tenant, less any reasonable offsets
and all rights end obligations hereunder shall cease and terminate.

       17.02. Notwithstanding the foregoing provisions, in the event the
Premises, or any portion thereof, shall be damaged by fire or other casualty due
to the fault or negligence of Tenant, its agents, employees, servants,
contractors, subtenants, licensees, customers or business invitees, then,
without prejudice to any other rights and remedies of Landlord, this Lease shall
not terminate, the damage shall be repaired at Tenant's cost, and there shall be
no apportionment or abatement of any rent.

       17.03. In the event of any damage not limited to, or not including, the
Premises, such that the building of which the Premises is a part is damaged to
the extent of twenty-five (25%) percent or more of the cost of replacement, or
the buildings (taken in the aggregate) of the Project owned by Landlord shall be
damaged to the extent of more than twenty-five (25%) of the aggregate cost of
replacement, Landlord may elect to terminate this Lease upon giving notice of
such election in writing to Tenant within ninety [90) days after the occurrence
of the event causing the damage.

       17.04. The provisions of this Section l7 with respect to Landlord shall
be limited to such repair as is necessary to place the Premises in the condition
specified for Landlord's work by Exhibit B (if applicable) and when placed in
such condition the Leased Property shall be deemed restored and rendered
tenantable promptly following which time Tenant, at Tenant's expense shall
perform Tenant's work required by Exhibit B (if applicable) and Tenant shall
also repair or replace its stock in trade, fixtures, furniture, furnishings,
floor coverings and equipment, and if Tenant has closed, Tenant shall promptly
reopen for business.

       17.05. All insurance proceeds payable under any fire, and/or rental
insurance shall be payable solely to Landlord and Tenant shall have no interest
therein. Tenant shall in no case be entitled to compensation for damages on
account of any annoyance or inconvenience in making repairs under any provision
of this Lease. Except to the extent provided for in this Section 17, neither the
rent payable by Tenant nor any of Tenant's other obligations under any provision
of this Lease shall be affected by any damage to or destruction of the Premises
or any portion thereof by any cause whatsoever.

18.    ASSIGNMENT, SUBLETTING AND TRANSFERS OF OWNERSHIP

       18.01 Tenant will not, without Landlord's prior written consent, assign,
sell, mortgage, encumber, convey or otherwise transfer all or any part of
Tenant's leasehold estate, or permit the Premises to be occupied by anyone other
than Tenant and Tenant's employees or sublet the premises or any portion thereof
(collectively called "Transfer"). Tenant must supply Landlord with any and all
documents deemed necessary by Landlord to evaluate any proposed Transfer at
least sixty (60) days in advance of Tenant's proposed Transfer date.

       18.02 Landlord need not consent to any Transfer for reasons including,
but not limited to, whether or not: (a) in the reasonable judgment of Landlord
the transferee is of a character or is engaged in a business which is not in
keeping with the standard of Landlord for the Project; (b) in the reasonable
judgment of Landlord any purpose for which the transferee intends to use the
Premises is not in keeping with the standards of Landlord for the Project;
provided in no event may any purpose for which transferee intends to use the
Premises be in violation of this Lease; (c) the portion of the Premises subject
to the transfer is not regular in shape with appropriate means of entering and
exiting, including adherence to any local, county or other governmental codes,
or is not otherwise suitable for the normal purposes associated with such a
Transfer; or (d)Tenant is in default under this Lease or any other Lease with
Landlord.

       18.03 In the event Landlord consents to a Transfer, Tenant will pay
Landlord the excess, if any, of the rent and other charges reserved in the
Transfer over the allocable portion of the rent and other charges hereunder for
that portion of the Premises subject to the Transfer. For the purpose of this
section, the rent reserved in the Transfer will be deemed to include any lump
sum payment or other consideration given to Tenant in consideration for the
Transfer. Tenant will pay or cause the transferee to pay to Landlord this
additional rent together with the monthly installments of rent due.

       18.04 Any consent to any Transfer which may be given by Landlord, or the
acceptance of any rent, charges or other consideration by Landlord from Tenant
or any third party, will not constitute a waiver by Landlord of the provisions
of this Lease or a release of Tenant from the full performance by it of the
covenants stated herein; and any consent given by Landlord to any Transfer will
not relieve Tenant (or any transferee of Tenant) from the above requirements for
obtaining the written consent of Landlord to any subsequent Transfer.

       18.05 If a default under this Lease should occur while the Premises or
any part of the Premises are assigned, sublet or otherwise transferred,
Landlord, in addition to any other remedies provided for within this Lease or by
law, may at its option collect directly from the transferee all rent or other
consideration becoming due to Tenant under the Transfer and apply these monies
against any sums due to Landlord by Tenant; and Tenant authorizes and directs
any transferee to make payments of rent or other 



                                       1
<PAGE>   10
consideration direct to Landlord upon receipt of notice from Landlord. No direct
collection by Landlord from any transferee should be construed to constitute a
novation or a release of Tenant or any guarantor of Tenant from the further
performance of its obligations in connection with this Lease.

       18.06 N/A

       18.07 In the event Tenant requests Landlord's consent to an Assignment,
Sub-Let or Transfer of Tenant's interest in the leased Premises, Tenant agrees
to pay Landlord all attorney's fees incurred by Landlord for any legal services
for document review of any and all documents deemed necessary by Landlord and
Tenant to Assign, Sub-let or Transfer Tenant's interest in the leased Premises.

19.    BREACH BY TENANT

       19.01 Tenant will be in breach of this Lease if at any time during the
term of this Lease (and regardless of the pendency of any bankruptcy,
reorganization, receivership, insolvency or other proceedings in law, in equity
or before any administrative tribunal which have or might have the effect of
preventing Tenant from complying with the terms of this Lease):

       A. Tenant fails to make payment of any installment of Base Monthly Rent,
Additional Rent, or of any other sum herein specified to be paid by Tenant, when
due; or

       B. Tenant fails to observe or perform any of its other covenants,
agreements or obligations hereunder, and such failure is not cured within ten
(10) days after Landlord's written notice to Tenant of such failure; provided,
however, that if the nature of Tenant's obligation is such that more than ten
(10) days are required for performance, then Tenant will not be in breach if
Tenant commences performance within such 10 day period and thereafter diligently
prosecutes the same to completion; or

       C. Tenant, Tenant's assignee, subtenant, guarantor, or occupant of the
Premises becomes insolvent, makes a transfer in fraud of its creditors, makes a
transfer for the benefit of its creditors, is the subject of a bankruptcy
petition, is adjudged bankrupt or insolvent in proceedings filed against Tenant,
a receiver, trustee, or custodian is appointed for all or substantially all of
Tenant's assets, fails to pay its debts as they become due, convenes a meeting
of all or a portion of its creditors, or performs any acts of bankruptcy or
insolvency, including the selling of its assets to pay creditors; or

       D. Tenant has abandoned the Premises as defined in paragraph 16 above.

       E. Tenant falls to take possession of the Premises within thirty (30)
days of receiving notice by Landlord that the Premises are available.

20.    REMEDIES OF LANDLORD

       20.01 Nothing contained herein shall constitute a waiver of Landlord's
right to recover damages by reason of Landlord's efforts to mitigate the damage
to it by Tenant's default; nor shall anything in this Section adversely affect
Landlord's right, as in this Lease elsewhere provided, to indemnification
against liability for injury or damages to persons or property occurring prior
to a termination of this Lease.

       20.02 All cure periods provided herein shall run concurrently with any
periods provided by law.

       20.03 In the event of default, as designated herein above, in addition to
any other rights or remedies provided for herein or at law or in equity,
Landlord, at its sole option, shall have the following rights:

       A. The right to declare the term of this Lease ended and reenter the
Premises and take possession thereof, and to terminate all of the rights of
Tenant in and to the Premises.

       B. The right, without declaring the term of this Lease ended, to reenter
the Premises and to occupy the same, or any portion there of, for and on account
of the Tenant as hereinafter provided, and Tenant shall be liable for and pay to
Landlord on demand all such expenses as Landlord may have paid, assumed or
incurred in recovering possession of the Premises, including costs, expenses,
attorney's fees and expenditures placing the same in good order, or preparing or
altering the same for reletting, and all other expenses, commissions and charges
paid by the Landlord in connection with reletting the Premises. Any such
reletting may be for the remainder of the term of this Lease or for a longer or
shorter period. Such reletting shall be for such rent and on such other terms
and conditions as Landlord, in its sole discretion, deems appropriate. Landlord
may execute any lease made pursuant to the terms hereof either in the Landlord's
own name or in the name of Tenant or assume Tenant's interest in any existing
subleases to any tenant of the Premises, as Landlord may see fit, and Tenant
shall have no right or authority whatsoever to collect any rent from such
tenants, subtenents, of the Premises. In any case, and whether or not the
Premises or any part thereof is relet, Tenant, until the end of the Lease term
shall be liable to Landlord for an amount equal to the amount due 

<PAGE>   11
as Rent hereunder, less net proceeds, if any of any reletting effected for the
account of Tenant. Landlord reserves the right to bring such actions for the
recovery of any deficits remaining unpaid by the Tenant to the Landlord
hereunder as Landlord may deem advisable from time to time without being
obligated to await the end of the term of the Lease. Commencement of maintenance
of one or more actions by the Landlord in this connection shall not bar the
Landlord from bringing any subsequent actions for further accruals. In no event
shall Tenant be entitled to any excess rent received by Landlord over and above
that which Tenant is obligated to pay hereunder; or

       C. The right, even though it may have relet all or any portion of the
Premises in accordance with the provisions of subsection B. above, to thereafter
at any time elect to terminate this Lease for such previous default on the part
of the Tenant, and to terminate all the rights of Tenant in and to the Premises.

       20.04 Pursuant to the rights of re-entry provided above, Landlord may
remove all persons from the Premises and may, but shall not be obligated to,
remove all property therefrom, and may, but shall not be obligated to, enforce
any rights Landlord may have against said property or store the same in any
public or private warehouse or elsewhere at the cost and for the account of
Tenant or the owner or owners thereof. Tenant agrees to hold Landlord free and
harmless from any liability whatsoever for the removal and/or storage of any
such property, whether of Tenant or any third party whomsoever. Such action by
the Landlord shall not be deemed to have terminated this Lease.

       20.05 If Tenant breaches this Lease and abandons the Premises before the
end of the term, or if its right of possession is terminated by Landlord because
of Tenant's breach of this Lease, then this Lease may be terminated by Landlord
at its option. On such Termination Landlord may recover from Tenant, in addition
to the remedies permitted at law:

       A. The worth, at the time of the award, of the unpaid Base Monthly Rents
and Additional Rents which had been earned at the time this Lease is terminated.

       B. The worth, at the time of the award, of the amount by which the unpaid
Base Monthly Rents and Additional Rents which would have been earned after the
date of termination of this Lease until the time of award exceeds the amount of
the loss of rents that Tenant proves could be reasonably avoided;

       C. The worth, at the time of the award, of the amount by which the unpaid
Base Monthly Rent and Additional Rents for the balance of the Lease Term after
the time of award exceeds the amount of such rental loss for such period as the
Tenant proves could have been reasonably avoided; and

       D. Any other amount, and court costs, necessary to compensate Landlord
for all detriment proximately caused by Tenant's breach of its obligations under
this Lease, or which in the ordinary course of events would be likely to result
therefrom. The detriment proximately caused by Tenant's breach will include,
without limitation, (i) expenses for cleaning, repairing or restoring the
Premises, (ii) expenses for altering, remodeling or otherwise improving the
Premises for the purpose of reletting the Premises, (iii) brokers' fees and
commissions, advertising costs and other expenses of relatting the Premises,
(iv) costs of carrving the Premises such as taxes, insurance premiums, utilities
and security precautions, (v) expenses of retaking possession of the Premises,
(vi) reasonable attorney's fees and court costs, (vii) any unearned brokerage
commissions paid in connection with this Lease, (viii) reimbursement of any
previously waived Base Rent, Additional Rent, free rent or reduced rental rate,
and (ix) any concession made or paid by Landlord to the benefit of Tenant in
consideration of this Lease including, but not limited to, any moving
allowances, contributions or payments by Landlord for tenant improvements or
build-out allowances or assumptions by Landlord of any of the Tenant's previous
lease obligations.

       20.06 In any action brought by the Landlord to enforce any of its rights
under or arising from this Lease, Landlord shall be entitled to receive its
costs end legal expenses including reasonable attorneys' fees, whether or not
such action is prosecuted to judgment.

       20.07 The waiver by Landlord of any breach or default of Tenant hereunder
shall not be a waiver of any preceding or subsequent breach of the same or any
other term. Acceptance of any Rent payment shall not be construed to be a waiver
of the Landlord of any preceding breach of the Tenant.

       20.08 All past due amounts owed by Tenant under the terms of this Lease
shall bear interest at twelve percent per annum unless otherwise stated.

21.    SURRENDER OF LEASE NOT MERGER

       21.01 The voluntary or other surrender of this Lease by Tenant, or mutual
cancellation thereof, will not work a merger and will, at the option of
Landlord, terminate all or any existing transfers, or may, at the option of
Landlord, operate as an assignment to it of any or all of such transfers.

22.    ATTORNEYS FEES/COLLECTION CHARGES

       22.01 In the event of any legal action or proceeding between the parties
hereto, reasonable attorneys' fees and expenses of the prevailing party in any
such action or proceeding will be added to the judgment therein. Should Landlord
be named 


<PAGE>   12
as defendant in any suit brought against Tenant in connection with or arising
out of Tenant's occupancy hereunder, Tenant will pay to Landlord its costs and
expenses incurred in such suit, including reasonable attorney's fees.

          22.02 If Landlord utilizes the services of any attorney at law for the
purpose of collecting any rent due and unpaid by Tenant after five (5) days
written notice to Tenant of such nonpayment of rent or in connection with any
other breach of this Lease by Tenant, Tenant agrees to pay Landlord reasonable
attorneys' fees as determined by Landlord for such services, regardless of the
fact that no legal action may be commenced or filed bv Landlord

23.   CONDEMNATION

          23.01 If twenty-five percent [25%) or more of the square footage of
the Premises is taken for any public or quasi-public purpose by any lawful
government power or authority, by exercise of the right of appropriation,
reverse condemnation, condemnation or eminent domain, or sold to prevent such
taking, and if the remaining portion of the Premises will not be reasonably
adequate for the operation of Tenant's business after Landlord completes such
repairs or alterations as Landlord elects to make, either Tenant or the Landlord
may at its option terminate this Lease by notifying the other party hereto of
such election in writing within twenty (20) days after such taking. Tenant will
not because of such taking assert any claim against the Landlord or the taking
authority for any compensation because of such taking, and Landlord will be
entitled to receive the entire amount of any award without deduction for any
estate of interest of Tenent. If less than twenty-five percent (25%) of the
Premises is taken, Landlord at its option may terminate this Lease. If Landlord
does not so elect, Landlord will promptly proceed to restore the Premises to
substantially its same condition prior to such partial taking, allowing for any
reasonable effects of such taking, and a proportionate allowance based on the
loss of square footage will be made to Tenant for the rent corresponding to the
time during which, and to the part of the Premises, which, Tenant is deprived on
account of such taking and restoration.

24.   RULES AND REGULATIONS

          24.01 Tenant will faithfully observe and comply with any Rules and
Regulations promulgated by Landlord for the Project and Landlord reserves the
right to modify and amend them as it deems necessary. Landlord will not be
responsible to Tenant for the nonperformance by any other Tenant or occupant of
the Project of any of said Rules and Regulations.

          24.02 In the event that Tenant fails to cure any violations of such
Rules and Regulations following ten (10) days written notice by Landlord, such
failure to cure shall be deemed a material breach of this Lease by Tenant.

25.   ESTOPPEL CERTIFICATE

          25.01 Tenant will execute and deliver to Landlord, within ten (10)
business days of Landlords written demand, a statement in writing certifying
that this Lease is in full force and effect, end that the Base Monthly Rent and
Additional Rent payable hereunder is unmodified end in full force end effect
(or, if modified, stating the nature of such modification) and the date to which
rent and other charges are paid, if any, end acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the pert of Landlord hereunder or
specifying such defaults if they are claimed and such other matters as Landlord
may reasonably request. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrencer of the Premises. Tenant's failure to
deliver such statement within such time shall be conclusive Upon Tenant that (1)
this Lease is in full force and effect, without modification except as may be
represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and (3) not more than one (1) month's rents has been paid in
advance.

26.   SALE BY LANDLORD

          26.01 In the event of a sale or conveyance by Landlord of the Project
the same shall operate to release Landlord from any liability upon any of the
covenants or conditions, expressed or implied, herein contained in favor of
Tenant, and in such event Tenant agrees to look solely to the responsibility of
the successor in interest of Landlord in and to this Lease. This Lease will not
be affected by any such sale, and Tenant agrees to attorn to the purchaser or
assignee.

27.   NOTICES

          27.01 All notices, statements, demands, requests, consents, approvals,
authorizations, offers, agreements, appointments, or designations under this
Lease by either party to the other will be in writing and will be considered
sufficiently given and served upon the other party if sent by certified or
registered mail, return receipt requested, postage prepaid, delivered
personally, or by a national overnight delivery service and addressed as
indicated in 1.03 and 1.04.

28.   WAIVER

          28.01 The failure of Landlord to insist in any one or more cases upon
the strict performance of any term, covenant or condition of the Lease will not
be construed as a waiver of a subsequent breach of the same or any other
covenant, term or condition; nor shall any delay or omission by Landlord to seek
a remedy for any breach of this Lease he deemed a waiver by Landlord of Its
remedies or rights with respect to such a breach.


<PAGE>   13
29.      HOLDOVER

          29.01 If Tenant remains in the Premises after the Lease Expiration
date with the consent of the Landlord, and has not given prior written notice to
Landlord, such continuance of possession by Tenant will be deemed to be a
month-to-month tenancy at the sufferance of Landlord terminable on thirty (30)
day notice at any time by either party. All provisions of this Lease, except
those pertaining to term and rent, will apply to the month-to-month tenancy.
Tenant will pay a new Base Monthly Rent in an amount equal to 150% of the base
monthly rent payable for the last full calendar month during the regular term of
this Lease.

30.      DEFAULT OF LANDLORD/LIMITATION OF LIABILITY

          30.01 In the event of any default by Landlord hereunder, Tenant agrees
to give notice of such default, by registered mail, to Landlord at Landlord's
Notice Address as stated in 1.04 and to offer Landlord a reasonable opportunity
to cure the default. In the event of any actual or alleged failure, breach or
default hereunder by Landlord, Tenant's sole and exclusive remedy will be
against Landlord's interest in the Project, and Landlord, its directors,
officers, employees and any partner of Landlord will not be sued, be subject to
service or process, or have a judgment obtained against him in connection with
any alleged breach or default, and no writ of execution will be levied against
the assets of any partner, shareholder or officer of Landlord. The covenants end
agreements are enforceable by Landlord and also by any partner, shareholder or
officer of Landlord.

31.      SUBORDINATION

          31.01 Without the necessity of any additional document being executed
by Tenant for the purpose of affecting a subordination, and at the election of
Landlord or any mortgagee with a lien on the Project or any ground lessor with
respect to the Project, this Lease will be subject and subordinate at all times
to (a) all ground leases or underlying leases which may now exist or hereafter
be executed affecting the Project, and (b) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed in any amount for which the
Project, ground leases or underlying leases, or Landlord's interest or estate in
any of said items is specified as security. In the event that any ground lease
or underlying lease terminates for any reason or any mortgage or deed of trust
is foreclosed or a conveyance in lieu of foreclosure is made for any reason,
Tenant will, notwithstanding any subordination, attorn to and become the Tenant
of the successor in interest to Landlord, at the option of such successor in
interest. Tenant covenants and agrees to execute and deliver to Landlord any
document or instrument reasonably requested by Landlord or its ground lessor,
mortgagee or beneficiary under a deed of trust evidencing such subordination of
this Lease with respect to any such ground lease or underlying leases or the
lien of any such mortgage or deed of trust. Tenant hereby irrevocably appoints
Landlord as attorney-in-fact of Tenant to execute, deliver and record any such
document in the name and on behalf of Tenant.

32.      DEPOSIT AGREEMENT

          32.01 Landlord and Tenant hereby agree that Landlord will be entitled
to immediately endorse and cash Tenant's good faith rent and the Security
Deposit check(s) accompanying this Lease. It is further agreed and understood
that such action will not guarantee acceptance of this Lease by Landlord, but,
in the event Landlord does not accept this Lease, such deposits will be promptly
refunded in full to Tenant. This Lease will be effective only after Tenant has
received a copy fully executed by both Landlord end Tenant.

33.       GOVERNING LAW

          33.01 This Lease is governed by and construed in accordance with the
laws of the State of Nevada, and venue of any suit will be in the county where
the Premises are located unless the Premises are not located in Nevada in which
case the venue will be Washoe County in the State of Nevada.

34.       NEGOTIATED TERMS

          34.01 This Lease is the result of the negotiations of the parties and
has bean agreed to by both Landlord and Tenant after prolonged discussion.

35.       SEVERABILTY

          35.01 If any provision of this Lease is found to be unenforceable, all
other provisions shall remain in full force and effect

36        BROKERS

          36.01 Tenant warrants that it has had no dealings with any broker or
agent in connection with this Lease, except John Britt. Dickson Realty and
covenants to pay, hold harmless and indemnify Landlord from and against any and
all cost, expense or liability for any compensation, commissions and charges
claimed by any broker or agent, other than any identified above, with respect to
this Lease or its negotiation.

37.       QUIET POSSESSION

          37.01 Tenant, upon payng the rentals and other payments herein
required from Tenant, and upon Tenant's performance of all of the terms,
covenants and conditions of this Lease on its part to be kept and performed, may
quietly have, hold and enjoy the Premises during the Term of this Lease without
disturbance from Landlord or from any other person claiming through Landlord.


<PAGE>   14

38.   MISCELLANEOUS PROVISIONS

          38.01 Whenever the singular number is used in this Lease and when
required by the context, the same will include the plural, and the masculine
gender will include the feminine and neuter genders, and the word "person" will
include corporation, firm, partnership, or association. If there is more than
one Tenant, the obligations imposed upon Tenant under this Lease will be joint
and several.

          38.02 The headings or titles to paragraphs of this Lease are not a
part of this Lease and will have no effect upon the construction or
interpretation of any part of this Lease.

          38.03 This instrument contains all of the agreements end conditions
made between the parties to this Lease. Tenant acknowledges that neither
Landlord nor Landlord's agents have made any representation or warranty as to
the suitability of the Premises to the conduct of Tenant's business. Any
agreements, warranties or representations not expressly contained herein will in
no way bind either Landlord or Tenant, and Landlord and Tenant expressly waive
all claims for damages hy reason of any statement, representation, warranty,
promise or agreement, if any, not contained in this Lease.

          38.04 Time is of the essence of each term and provision of this Lease.

          38.05 Except as otherwise expressly stated, each payment required to
be made by Tenant Is in addition to and not in substitution for other payments
to be made by Tenant.

          38.06 Subject to Article 18, the terms and provisions of this Lease
are binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of Landlord and Tenant.

          38.07 All covenants and agreements to be performed by Tenant under any
of the terms of this Lease will be performed by Tenant at Tenant's sole cost and
expense and without any abatement of rent.

          38.08 In consideration of Landlord's covenants and agreements
hereunder, Tenant hereby covenants and agrees not to disclose any terms,
covenants or conditions of this Lease to any other party without the prior
written consent of Landlord.

          38.09 Tenant agrees it will provide to Landlord such financial
information as Landlord may reasonably request for the purpose of obtaining
construction and/or permanent financing for the Premises.

          38.10 If Tenant shall request Landlord's consent and Landlord shall
fail or refuse to give such consent, Tenant shall not be entitled to any damages
for any withholding by Landlord of Its consent; Tenant's sole remedy shall be an
action for specific performance or injunction, and such remedy shall be
available only in those cases where Landlord has expressly agreed in writing not
to unreasonably withhold its consent or where as a matter of law Landlord may
not unreasonably withhold Its consent.

          38.11 Whenever a day is appointed herein on which, or a period of time
is appointed in which, either party is required to do or complete any act,
matter or thing, the time for the doing or completion thereof shall be extended
by a period of time equal to the number of days on or during which such party is
prevented from, or is reasonably interfered with, the doing or completion of
such act, matter or thing because of labor disputes, civil commotion, war,
warlike operation, sabotage, governmental regulations or control, fire or other
casualty, inability to obtain materials, or to obtain fuel or energy, weather or
other acts of God, or other causes beyond such party's reasonable control
(financial inability excepted); provided, however, that nothing contained herein
shall excuse Tenant from the prompt payment of any Rent or charge required of
Tenant hereunder.

          38.12 Landlord acknowledges that the Tenant, pursuant to Article 1.05,
is in the business of manufacturing slot machines and gaming devices and hereby
gives consent to allow slot machines and gaming devices on the Premises as the
use of them directly relates to the sales and manufacturing business of the
Tenant. The Premises shall not be used for any "adult bookstore" or "adult
motion picture theater" as said terms are defined in NRS 278.0221, or any
similar use, notwithstanding any local zoning codes or ordinances or any other
provisions of law to the contrary permitting such use.

39.   CHANGE ORDERS. In the event Tenant requests and/or approves changes in the
scope the work being provided by or through Landlord Tenant agrees to pay all
the direct and Indirect costs of additional work at the time it gives such
approval. In the event that the aggregate cost of additional work provided under
this Lease is ten thousand dollars ($10,000.00) or more, or in excess of two
months rant, whichever is less, than Landlord may accept payment of one half of
the cost of additional work at the time of approval of said change order by the
Tenant, and payment of the balance to be paid at the time the additional work is
substantially completed.

40.   SPECIAL PROVISIONS

          40.01 Special provision of this Lease numbers 41; Exhibits "A" , "C" ,
and "D" are attached hereto and made a part hereof If none so state in the
following space:


<PAGE>   15
41        CONTINGENCIES

          This lease is contingent upon the current Tenant, Thomas and Betts
Corporation, terminating their lease dated May 9, 1988, at the end of their
current lease term, i.e., October 31, 1998. It is further contingent upon Thomas
and Betts relinquishing their rights and options to Purchase, Expand, and/or
Extend.

42.       OPTION TO MOVE TO A LARGER FACILITY

          At any time during the lease term, provided Tenant is not in default
of this lease, Tenant shall have the Option to Move to a larger facility owned
by Landlord provided Tenant gives Landlord a minimum of one hundred twenty (120)
days prior written notice of its desire to do so; that the larger space is a
minimum of 75% larger than the space covered in this Lease, i.e., a minimum of
92,941 square feet; and that Landlord has such larger space available for lease.
The present lease would automatically terminate upon commencement of the new
lease for the larger facility.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year indicated by Landlord's execution date as written below.

         Individuals signing on behalf of a Tenant warrant that they have the
authority to bind their principals. In the event that Tenant is a corporation,
Tenant shall deliver to Landlord, concurrently with the execution and delivery
of this Lease, a certified copy of corporate resolutions adopted by Tenant
authorizing said corporation to enter into and perform the Lease and authorizing
the execution and delivery of the Lease on behalf of the corporation by the
parties executing and delivering this Lease. THIS LEASE, WHETHER OR NOT EXECUTED
BY TENANT, IS SUBJECT TO ACCEPTANCE AND EXECUTION BY LANDLORD, ACTING ITSELF OR
BY ITS AGENT ACTING THROUGH ITS PRESIDENT, VICE PRESIDENT, OR ITS DIRECTOR OF
LEASING AND MARKETING.

<TABLE>
<S>                                                                <C>
Landlord:    Dermody Industrial Group, a Nevada Joint Venture      Tenant: Innovative Gaming, Inc.,
             By: Dermody Properties, a Nevada Corporation                  a Nevada Corporation
                 Managing Venturer


             By:_____________________________                      __________________________________
                Micheal C. Dermony                                 Scott Shackelton

Its:  President                                                    Its:   CFO

Date:  9/26/96                                                     Date:   7/11/96
</TABLE>




<PAGE>   16
                                    Exhibit C
                             [Tenant Questionnaire)

                      TENANT QUESTIONNAIRE REGARDING USE OF
                   PREMISES AT 4750 Turbo Circle. Reno, Nevada
<TABLE>
<CAPTION>
                                                                                            Yes    No
<S>                                                                                         <C>    <C>
l.    Will any manufacturing process be done on the subject premises?                       [X]    [ ]

2.    Do you or your company intend to use any internal combustion
      engines greater than 50 hp at the subject premises?                                   [ ]    [X]

3.    Do you or your company intend to use processes that involve
      mixing, blending, or processing any solvents, adhesives, paints
      or coatings?                                                                          [ ]    [X]

4.    Will your operation at the premises create any dusts or smoke?                        [ ]    [X]

5.    At the subject premises, will you or your company refine any
      liquids or solids? Reclaim any metals?                                                [ ]    [X]

6.    Will you or your company plate or coat anything at the subject
      premises?                                                                             [ ]    [X]

7.    Will any process be used on the Premises which requires equipment
      for the heating of materials (i.e., boilers, furnaces, broilers,
      baking ovens, etc.)?                                                                  [ ]    [X]

8.    Will you handle or store solvents or motor fuels on the premises?                     [ ]    [X]

9.    Will you use or store any acids at the premises?                                      [ ]    [X]

10.   Will you or your company use any chemical processes at the premises?                  [ ]    [X]

11.   Will you or your company use any solvents for clean up?                               [X]    [ ]

12.   Is your business a dry cleaner, restaurant, body shop, gasoline
      station, printer or part coater?                                                      [ ]    [X]

13.   Will you or your company use any process which requires lead or
      melting or soldering with lead or lead alloys?                                        [X]    [ ]

14.   Do you or your company have a Hazardous Materials Management plan?                    [ ]    [X]
</TABLE>

If you have marked "Yes" to any of the questions as to processes, chemicals,
including types and quantities, to be used on the Premises, please give a more
detailed explanation below and on a second page if necessary.

1.    Manufacture (Assembly) of gaming machines.

11.   Glass cleaner, acetone in quantities less than one gallon.  
      Commercial retail cleaners.

13.   Circuit board reparis.

Name of person completing form:        David W. Jasper

Company name and address:              Innovative Gaming Corp. of America
                                       4750 Turbo Circle , Reno Nevada 89502

   Exhibit "C" to lease dated June 21, 1996, by and between Dermody Industrial
   Group and Innovative Gaming Corporation of America.

   Dermody Industrial Group

   Innovative Gaming Corporation of America

<PAGE>   17
                                   EXHIBIT "D"

                              RULES AND REGULATIONS

It is further agreed that the following rules and regulations shall be and are
hereby made a part of this Lease, and the Tenant agrees that its employees and
agents, or any others permitted by the Tenant to occupy or enter said Premises,
will at all times abide by said rules and regulations and that a default in the
performance and observance thereof shall operate the same as any other defaults
herein:

1.      The sidewalks, entries, and driveways shall not be obstructed by the
        Tenant, or its agents, or used by them for any purpose other than
        ingress and egress to and from their Premises. Landlord may remove any
        such obstruction or thing (unauthorized by Landlord) without notice or
        obligation to Tenant.

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

3.      No person shall disturb the occupants of this or adjoining Buildings or
        Premises by the use of any radio or musical instrument or by the making
        of loud or improper noises.

4.      Parking any type of recreational vehicles is specifically prohibited. No
        vehicle of any type shall be stored in the parking areas at any time. In
        the event that a vehicle is disabled, it shall be removed within 48
        hours. There shall be no "For Sale" or other advertising signs on or
        about any parked vehicle. All vehicles shall be parked in the designated
        parking areas in conformation with all signs and other markings.

5.      Lessee shall not use, keep or permit to be used or to be kept any foul
        or noxious gas or substance in the Premises, or permit or suffer the
        Premises to be occupied or used in a manner offensive or objectionable
        to Lessor or other occupants of the Building by reason of noise, odors
        and/or vibrations, or interfere in any way with other Lessees or those
        having business therein. Lessee shall maintain the leased Premises free
        from mice, bugs, and ants attracted by food, water or storage materials.

6.      Lessor reserves the right to exclude or expel from the complex any
        person who in the judgment of the Lessor, is intoxicated or under the
        influence of liquor or drugs or who shall in any manner do any act in
        violation of the Rules and Regulations of the said project.

7.      Lessee shall give Lessor prompt notice of any defects in the water, lawn
        sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
        apparatus, or any other service equipment or any dangerous or hazardous
        condition existing on the property.

8.      No outside storage of pallets, boxes, cartons, drums or any other
        containers or materials used in shipping or transport of goods is
        allowed. Tenant shall place all refuse in proper receptacles provided by
        Tenant at Tenant's expense on the Premises or inside 
<PAGE>   18
        enclosures (if any) provided by Landlord for the Building, and shall
        keep sidewalks and driveways outside the Building and lobbies, corridor
        stairwells, ducts or shafts of the Building free of all refuse.

9.      All moveable trash receptacles provided by the trash disposal firm must
        be kept in the trash enclosure areas where provided for that purpose.

10.     The Landlord reserves the right to make such other and further
        reasonable rules and regulations as in its judgment may from time to
        time be needful and desirable for the safety, care and Cleanliness of
        the Premises and for the preservation of good order therein.

11.     Lessee shall not use any method of heating or air conditioning other
        than that supplied by Lessor without the Consent of Lessor.

12.     No person shall go on the roof without Lessor's permission.

13.     All goods, including material used to store goods, delivered to the
        Premises of Lessee shall be immediately moved into the Premises and
        shall not be left in parking or receiving areas overnight.

14.     Tenants shall not do or permit anything to be done in their Premises or
        bring or keep anything therein which will in any way obstruct or
        interfere with the rights of other Tenants. or do, or permit anything to
        be done in their Premises which shall, in the judgment of the Landlord
        or its manager, in any way injure or annoy them, or conflict with the
        laws relating to fire, or with the regulations of the fire department or
        with any insurance policy upon the Building or any part thereof or any
        contents therein or conflict with any of the of the Rules and Ordinances
        of the public Building or health authorities.

15.     All electrical equipment used by Tenants shall be U.L. approved. Nothing
        shall be done or permitted in Tenant's Premises, and nothing shall be
        brought into or kept in the Premises which would impair or interfere
        with any of the Building services or the proper and economic heating,
        cooling, cleaning or other servicing of the Building or the Premises.
        Tenant's computers and other equipment are hereby expressly allowed.

16.     Tenants shall not install or operate any steam or gas engine or boiler,
        or carry on any mechanical business in the Building. The use of oil, gas
        or inflammable liquids for heating, lighting or any other purpose is
        expressly prohibited. Explosives or other articles deemed extra
        hazardous shall not be brought into the Building. Tenants shall not use
        any other method of heating than that supplied by Landlord.

17.     Tenants shall not remove any Carpet, or wall coverings, window blinds,
        or window draperies in their Premises without the prior written approval
        from Landlord.

18.     No animals, birds or pets (other than seeing-eye dogs) of any kind shall
        be allowed in Tenant's Premises or Building.

l9.     The water closets, urinals, waste lines, vents or flues of the Building
        shall not be used for any purpose other than those for which they were
        Constructed, and no rubbish, acids, 
<PAGE>   19
        vapors, newspapers or other such substances of any kind shall be thrown
        into them. The expense caused by any breakage, stoppage or damage
        resulting from a violation of this rule by any Tenant, its employees,
        visitors, guests or licensees, shall be paid by Tenant.

20.     All decorating, carpentry work, or any labor required for the
        installation of Tenant's (a) equipment, such as an alarm system,
        computer, telephone/telegraph equipment, lines, cables or other
        electrical devices; or (b) furnishings or other property shall be
        performed at Tenants expense, and will not require Landlord's prior
        verbal or written approval. Should any such work require alterations
        that affect the heating, ventilation, air conditioning, plumbing,
        electrical or mechanical Systems of the Building, the roof, or the
        structure of the Building, Landlord's prior written approval will be
        required. Structural changes are defined as changes that affect a vital
        and substantial portion of the Premises, changing its characteristic
        appearance, fundamental purpose of its erection or uses, or a change of
        such a nature as to affect the very realty itself, extraordinary in
        scope and effect, or unusual in expenditure.

21.     The Premises shall not be used or permitted to be used for residential,
        lodging or sleeping purposes.

22.     Except as permitted by landlord, Tenant shall not mark upon, paint signs
        upon, cut, drill into, drive nails or screws into, or in any way deface
        the walls, ceilings, partitions or floors of their Premises or of the
        Building, and the repair cost of any defacement, damage, or injury
        caused by Tenant, its agents or employees shall be paid for by the
        Tenant.

23.     The cost of repairing any damage to the public partitions of the
        Building or the public facilities, or to any facilities used in common
        with other tenants, caused by any Tenant or the employees, licensees,
        agents or invitees of the Tenant, shall be paid by such Tenant.

24.     Landlord reserves the right to restrict or prohibit canvassing,
        soliciting or peddling in the Building.


Exhibit "D" to lease dated July 9, 1996,
by and between Dermody Industrial Group 
and Innovative Gaming Corporation of America.

Dermody Industrial Group

Innovative Gaming Inc.