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                                FIRST AMENDMENT
                                      TO
                        STANDARD INDUSTRIAL LEASE - NET
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     This First Amendment to the June 8, 1992 Standard Industrial Lease - Net is
made and entered into as of March 20, 1995, by and between S&B Mortgage 
Investment Company, hereinafter called "Lessor", and Variflex of California (aka
Variflex, Inc.), hereinafter called "Lessee", and is made with reference to the 
following facts:

     A.  WHEREAS, Lessor and lessee are parties to a certain Standard Industrial
Lease - Net dated June 8, 1992, for the premises known as 5152 North Commerce 
Avenue, Moorpark, California, and described as a concrete tilt-up industrial 
facility comprised of approximately 104,000 square feet of M-2 zoned land; and

     B.  WHEREAS, Lessor and Lessee are desirous of amending said Standard 
Industrial Lease - Net as hereinafter provided;

     NOW, THEREFORE, the parties respectfully agree as follows:

     1.  Regarding Page 1, Paragraph 3.1, Term, the term of this lease shall be
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extended for two (2) years, commencing on January 1, 1996, and ending on 
December 31, 1997.

     2. Regarding Page 1, Paragraph 4, Rent, the $33,280.00 which was paid to
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Lessor by Lessee upon the execution of the Lease on or about June 8, 1992, shall
be applied towards the rent due as and for the last month of the extended term,
rather than to be applied towards the rent due for the month of December, 1995.

                                      1.
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           3.  Regarding Page 2, Paragraph 8.3(a), Property Insurance, the 
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amount of the insurance to be obtained by the insuring party covering loss or 
damage to the Premises shall be in the amount of $3,500,000.00, which is the 
agreed-upon replacement value.

           4.  With respect to Page 3 of the Addendum to Standard Industrial 
Lease dated June 8, 1992, Paragraph 53, Included Property Items, the following 
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language shall be deleted:

               "Every effort will be made for the air compressor; 
               however, it is not currently owned by Lessor."

           5.  Except as herein mentioned, the Lease remains unmodified and in 
full force and effect.

           IN WITNESS WHEREOF, the parties hereto have executed this First 
Amendment to Standard Industrial Lease - Net as of March 20, 1995, at Ventura 
County, California.

LESSOR:                                   LESSEE:

S&B MORTGAGE INVESTMENT COMPANY           VARIFLEX OF CALIFORNIA
2541 Uranium Drive                        5152 North Commerce Avenue
Oxnard, California 93030                  Moorpark, California 93021

By /s/ Stanley C. Hess                    By /s/ William B. Ogden
   --------------------------------          ---------------------------
   STANLEY C. HESS, General                  BRAD OGDEN, Chief
   Partner                                   Financial Officer

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