LEASE AGREEMENT

This agreement,  made and entered into this 1" day of June, 2000, by and between
Norbert J. Lima and Dina T. Lima,  hereinafter  referred to as Lessor, and Prime
Companies,  Inc.,  having  principal  offices at 409 Center St.,  Yuba City,  CA
95991, hereinafter referred to as Less.

WITNESSETH,  that the said Lessor does by these  presents  lease and demise unto
said Lessee the following  described property being situated in the City of Yuba
City in the County of Suffer, and the State of California:

DESCRIPTION  OF THE  PREMISES:  Lessor  leases to Lessee and Lessee  leases from
Lessor a certain  portion,  equating to  approximately  2240 square feet, of the
building  located at 409  Center  Street,  in the City of Yuba  City,  County of
Suffer, State of California.

Terms:  Lessor leases to the tenants the described real property for the term of
three (3) years from the 1st day of June, 2000 to the 31st day of May, 2003.

Rental: Lessee agrees to pay rent for the premises as follows:


(A) Rent  payments  in the amount of One  Thousand  Six Hundred  Eighty  Dollars
($1680.00) will be due the first of each month for the duration of the lease.

Conditions and Covenants:

1.   That Lessee will pay said rents in manner and form  hereinbefore  specified
     and will quietly deliver said premises on the day of the expiration of this
     lease,  and in as good condition as the same were in when received,  except
     for reasonable wear and tear.

2.   That said  promises  shall be used for general  office space in  connection
     with telecommunications.

3.   Utility  Charges:  Lessee agrees to pay a prorate amount for Power and Gas.
     Lessee agrees to pay for 100 per cent of telephone  service.  Lessor agrees
     to provide water and garbage service. Less agrees to pay a prorate share of
     the real  property  taxes  assessed to land and  buildings  situated at 409
     Center Street,  Yuba City, CA. Prorate amounts will be based on 2240 square
     feet occupied by Prime Companies, Inc.

4.   Destruction:  If,  during the term,  the  premises are totally or partially
     destroyed  from any cause,  rendering  the  premises  totally or  partially
     inaccessible   or   unusable,   Lessor   shall   restore  the  premises  to
     substantially   the  same  condition   they  were  in  immediately   before
     destruction If the  restoration can be made under the existing laws and can
     be completed within ninety (90) working days after the date of destruction.
     Such destruction shall not terminate this Lease.

     If the  restoration  cannot be made in the time  stated in the  Destruction
     paragraph,  then within fifteen (15) days after the parties  determine that
     the  restoration  cannot be made within the time stated in the  Destruction
     paragraph,  Lessee can terminate this Lease immediately by giving notice to
     the  Lessor.  If  Lessee  falls  to  terminate  this  Lease,  and if at its
     election,  can ether  terminate this Lease or restore the premises within a
     reasonable  fine,  then this Lease shall continue in full force and effect.
     If the  existing  laws do not  permit  the  restoration,  either  party can
     terminate this Lease immediately by giving notice to the other party.


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     Uncovered  Destruction:  If,  during the term,  the premises are totally or
     partially  destroyed from risks not covered by insurance  described in this
     Lease,   rendering  the  premises  totally  or  partially  inaccessible  or
     unusable,  Lessor  shall have the option to either  restore the premises to
     their original condition or terminate the Lease.

     Abatement of Rent:  In case of  destruction  there shall be an abatement or
     reduction  of  rent  between  the  date  of  destruction  and  the  date of
     completion  or  restoration  based on the  extent to which the  destruction
     interferes with the Lessee's use of the premises.

5.   Lessor agrees to permit the Lessee to peaceably  and quietly have,  had and
     enjoy the use of the premises for the purpose and for the term aforesaid.

6.   The maintenance and repair of the leased premises shall be as follows:

     (A)  Lessor shall maintain and keep in good repair the roof, outside walls,
          foundation, sidewalks and drainage of the leased premises.

     (B)  Repairs to interior walls and ceilings, heating, plumbing,  electrical
          wiring and its operation,  when: same becomes  necessary  through fair
          wear and tear of through  circumstances  beyond the  control of Lessee
          shall be an obligation of the Lessor.

7.   In the event Lessor shall break a clause in this Lease,  omits to undertake
     what is  stated he will  undertake,  or acts in a manner in which the Lease
     states he shag not act,  Lessee's  sole remedy for the failure of Lessor to
     maintain the building shall be to institute suit. Lessee shall not have the
     right to withhold  from  future  rent any sum that  Lessee has  expended on
     behalf of the Lessor.

     Lessee, at its cost shall maintain, in good condition,  all portions of the
     premises.  including,  without limitation,  all Lessees' personal property,
     signs, store fronts, plate glass, and show windows.


8.   Lessee agrees to indemnify  and hold harmless  Lessor for any risk of loss,
     injury or damage of any kind or nature that results from the  negligence or
     knowledge of Lessee.

9.   Notwithstanding  anything  to  the  contrary  contained  elsewhere  in  the
     Agreement, it is expressly understood and agreed between the parties hereto
     the Lessee is granted an option to cancel  this Lease upon thirty (30) days
     written  notice to Lessor at any time prior to the stated  maturity  of the
     Lease. In the event Lessee  exercises said option prior to maturity of said
     Lease,  then  Lessee  shall  pay to  Lessor  as  liquidated  damages  a sum
     equivalent to two months rent and a termination fee of Two Thousand dollars
     ($2000).

     Upon Payment of  aforesaid  sums,  Lessor  shall hold  harmless and relieve
     Lessee from any further liability or obligation under this agreement.

10.  If this lease reverts to a month to month  agreement upon expiration of the
     lease term, then a ninety (90) day notice by either party would be required
     to terminate this agreement. Upon expiration of the ninety (90) day period,
     the Lessee agrees to vacate the premises. All other terms and conditions of
     the  original  Lease  would  remain in effect  during  this  month to month
     agreement.

11.  Alterations:  Lessee shell not make any alterations to premises without the
     Lessor's consent, including signs. Any alterations made shall remain on and
     be surrendered with the premises on expiration or termination of the term.

     If  Lessee  makes  any  alterations  to the  premises  as  provided  in the
     Alterations  paragraph,  the  alterations  shall not be commenced until two
     days after Lessor has received notice so that Lessor can post and record an
     appropriate note of non-responsibility.


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12.  Signs: Lessee at its own cost shall have the right to place,  construct and
     maintain an exterior sign, advertising its business on the premises.  Prior
     to  installation  of any signs,  Lessee must first  obtain  -approval  from
     Lessor.

     Any sign the Lessee places,  constructs  and/or maintains shall comply with
     all laws,  and Lessee  shall obtain any  approval  required by law.  Lessor
     makes no  representation  with  respect to Lessee's  ability to obtain such
     approval.

13.  Attorney's  Fees: If either party  commences  any action  against the other
     party arising out of or in connection with this Lease, the prevailing party
     shall be  entitled  to have and recover  from the losing  party  reasonable
     attorney's fees and costs of suit, including fees and costs incurred in the
     event of an appeal.

14.  Public Liability and Pro Damage  Insurance:  Lessee, at its own rest, shall
     maintain  public  liability and properly  damage  insurance  with liability
     limit of not less $500,000.00 per occurrence, and property damage limits of
     not less than $500,000.00 per occurrence, insuring against all liability of
     Lessee and its authorized  representatives  wising out of and in connection
     with  Lessee's  use or  occupancy  of the  premises.  All public  liability
     insurance and property' damage insurance shall insure performance by Lessee
     of the  indemnity  provisions  of the  paragraph  contained  in this  Lease
     entitled "indemnity"'.  Both parties shall be named as coinsureds,  and the
     policies shall contain cross-liability endorsements.

     Indemnity:  Lessee agrees that it will  indemnify and save Lessor  harmless
     from  any and all  liability,  damage,  expense,  cause of  action,  suits,
     claims,  or  judgements  arising  from injury to persons or property on the
     leased premises,  which arise out of the act, failure to act, or negligence
     of the Lessee, its agents, or employees,  whether said claim,  lawsuit,  or
     judgement  is founded or  unfounded.  The  Lessee's  obligation  under this
     paragraph to indemnify and hold the Lessor harmless shall not be limited to
     the sum that equals the amount of any insurance proceeds,  if any, received
     by the parties being indemnified.

     IN WITNESS WHEREOF,  the said panties have hereunto set their hands the day
and year above written.

LESSOR: NORBERT J. AND DINA T. LIMA           LESSEE: PRIME COMPANIES, INC.
BY: /s/ Norbert J. Lima                       BY: /s/ Norbert J. Lima
------------------------------------          ----------------------------------
        Norbert J. Lima                            Norbert J. Lima


 Date:  5/31/00                                Date: 5/31/00