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                                RESIDENTIAL LEASE


1. PARTIES:
    This Lease is made and entered into this 1st day of October, 1997 by and
between Exstar Financial Corporation (hereinafter referred to as "Landlord")and
Peter J. O'Shaughnessy (hereinafter referred to as "Tenant").

2. PREMISES:
     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,on
the terms and conditions hereinafter set forth, that certain real property and
the residence located thereon situated in the City of Bermuda Dunes, County of
Indio, State of CA, commonly known as 42-510 Caracas Place.

3. TERM:
     The term of this Lease shall be for one year (months/years), commencing on
October 1st 1997 and ending on September 30, 1998.

4. RENT:
     Tenant shall pay to Landlord as rent for the Premises, the sum of 0ne
Thousand Five Hundred ($1500.00) dollars per month, in advance on the first day
of each month during the term hereof. Rent shall be payable without notice or
demand and without any deduction, offset, or abatement in lawful money of the
United States to the Landlord at the address stated herein for notices or to
such other persons or such other places as the Landlord may designate to Tenant
in writing.

5. SECURITY DEPOSIT:
     Tenant shall deposit with Landlord upon the execution of this Lease the sum
of N/A ($N/A) dollars as a security deposit for the Tenant's faithful
performance of the provisions of this Lease. If Tenant fails to pay rent or
other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, Landlord may use the security deposit, or any portion of it, to
cure the default or compensate Landlord for all damages sustained by Landlord
resulting from Tenant's default. Tenant shall immediately on demand pay to
Landlord the sum equal to that portion of the security deposit expended or
applied by Landlord which was provided for in this paragraph so as to maintain
the security deposit in the sum initially deposited with Landlord. Landlord
shall not be required to keep the security deposit separate from its general
account nor shall Landlord be required to pay Tenant any interest on the
security deposit. If Tenant performs all of Tenant's obligations under this
Lease, the security deposit or that portion thereof which has not previously
been applied by the Landlord, shall be returned to Tenant within three (3) weeks
after the expiration of the term of this Lease, or after Tenant has vacated the
premises, whichever is later.

6. POSSESSION:
     If the Landlord for any reason cannot deliver possession of the Premises to
Tenant at the commencement of the term, the Landlord shall not be liable to
Tenant for any loss or damage resulting therefrom, but there shall be a
proportionate deduction of rent; nor shall this Lease be void or voidable for a
period of ten (10) days thereafter; and if for any reason the Premises cannot be
delivered within said ten (10) day period, the Tenant may, prior to Landlord's
delivery of the Premises, declare this Lease to be null and void and all money
paid to Landlord shall be refunded to Tenant.

7. USE:
     It is agreed that the Premises shall be used only for residence purposes,
for one family consisting of two adults and one children, and no animals, and
for no other purposes whatsoever. Tenant in his possession, use and occupancy of
the Premises agrees to observe and comply with all restrictions, laws and
ordinances affecting said property or occupancy thereof; and Tenant further
agrees that no use shall be made of the Premises, nor acts done which will
increase the existing rate of insurance upon the Premises, or will cause a
cancellation of any insurance policy covering the Premises.

8. UTILITIES
     The Tenant shall pay for all water supplied to the Premises and shall pay
for all gas, heat, light, power, telephone service, and other services supplied
to the Premises, except as herein provided. Expenses as per Exhibit A attached.

9. REPAIRS AND MAINTENANCE:
     The Landlord shall at its sole cost and expense keep and maintain the
exterior walls, roof, electrical wiring, heating system, air conditioning system
(if any), water heater, built-in appliances, and water lines in good and
sanitary order, condition, and repair, except where damage (if any) has been
caused by the abuse or negligence of the Tenant, in which event Tenant shall
repair same at his sole cost and expense.
     Except as herein provided, Tenant hereby agrees that the Premises are now
in a tenantable and good condition and shall at his sole cost and expense keep
and maintain the Premises, appurtenances and every part thereof, in the manner
in which they were received, reasonable wear and tear excepted, including
household furniture, fixtures, goods and chattels belonging to the Landlord, so
that they shall remain in good and satisfactory order, condition and repair. The
landlord agrees to maintain landscaping, swimming pool (if any) and Tenant
agrees to adequately water said landscaping.

10. ALTERATIONS AND ADDITIONS:
     Tenant shall not, without the Landlord's prior written consent, make any
alterations, improvements or additions in or about the Premises and any
additions to or alterations of the Premises (with the exception of movable
furniture) shall at once become a part of the realty and belong to the Landlord.
The Tenant shall keep the premises free from any liens arising out of any work
performed, materials furnished or obligations incurred by the Tenant.

11. HOLD HARMLESS:
     Tenant shall indemnify and hold Landlord harmless from and against any and
all claims arising from Tenant's use or occupancy of the Premises or from any
activity, work, or things which may be permitted or suffered by Tenant in or
about the Premises including all damages, costs, attorney's fees, expenses and
liabilities incurred in the defense of any claim, or action or proceeding
arising therefrom. Except for Landlord's willful or grossly negligent conduct,
Tenant hereby assumes all risk of damage to property, including household
furniture and goods, or injury to person in or about the Premises from any
cause, and Tenant hereby waives all claims in respect thereof against Landlord.

12. DAMAGE TO PREMISES:
     (a) If the Premises are so damaged by fire or from any other cause as to
render it untenantable, then either party shall have the right to terminate this
Lease as of the date on which such damage occurs, through written notice to the
other party, to be given within fifteen (15) days after the occurrence of such
damage; except that should such damage or destruction occur as the result of the
abuse or negligence of Tenant, or its invitees, so as to render the Premises
untenantable, the Landlord only shall have this right of termination.

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     Should this right be exercised by either Landlord or Tenant, then rent for
the current month shall be prorated between the parties as of the date on which
such damage occurred and any prepaid rent and unused security deposit shall be
refunded to Tenant.
     (b) If this Lease is not terminated as provided in this paragraph 12, the
Landlord shall promptly repair the Premises and there shall be a proportionate
reduction of rent until the Premises are repaired and ready for Tenant's
occupancy, such proportionate reduction to be based upon the extent to which the
making of repairs interferes with Tenant's reasonable use of the Premises.

13. ASSIGNMENT AND SUBLETTING:
     Tenant shall not voluntarily or by operation of law assign, transfer,
sublet, mortgage, or otherwise transfer or encumber all or any part of Tenant's
interest in this Lease or in the Premises without Landlord's prior written
consent which consent shall not be unreasonably withheld. The consent to one
assignment or subletting shall not be construed as consent to any subsequent
assignment or subletting.

14. DEFAULT:
     It is agreed between the parties hereto that if any rent shall be due
hereunder and unpaid, or if Tenant shall default and breach any other covenant
or provision of the Lease, then the Landlord, after giving the proper notice
required by law, may re-enter the Premises and remove any property and any and
all persons therefrom in the manner allowed by law. The Landlord may, at its
option, either maintain this Lease in full force and effect and recover the rent
and other charges as they become due or, in the alternative, terminate this
Lease. In addition, the Landlord may recover all rentals and any other damages
and pursue any other rights and remedies which the Landlord may have against the
Tenant by reason of such default as provided by law.

15. ABANDONMENT:
     Tenant shall not vacate or abandon the Premises at any time during the term
of this Lease.

16. ENTRY BY LANDLORD:
     The Tenant shall permit the Landlord and/or its agents to enter into and
upon the Premises at all reasonable times and upon reasonable notice for the
purpose of inspecting it or for the purpose of maintaining the Premises, or for
the purpose of exhibiting the Premises to prospective purchasers or tenants.

17. ATTORNEY'S FEES:
     If either party commences an 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.

18. SURRENDER:
     On the last day of the term of this Lease, Tenant shall surrender the
Premises to Landlord in good condition, broom clean, ordinary wear and tear and
damage by fire and the elements excepted.

19. HOLDING OVER:
     If Tenant, with the Landlord's consent, remains in possession of the
Premises after expiration or termination of the term of this Lease, such
possession by Tenant shall be deemed to be a tenancy from month-to-month at a
rental in the amount of the last monthly rental plus all other charges payable
hereunder, and upon all the provisions of this Lease applicable to such a
month-to-month tenancy.

2O. BINDING ON SUCCESSORS AND ASSIGNS:
     Each provision of this Lease performable by Tenant shall be deemed both a
covenant and a condition. The terms, conditions and covenants of this Lease
shall be binding upon and shall inure to the benefit of each of the parties
hereto, their heirs, personal representatives, successors and assigns.

21. NOTICES:
     Whenever under this Lease a provision is made for any demand, notice or
declaration of any kind, it shall be in writing and served either personally or
sent by registered or certified United States mail, postage prepaid, addressed
at the address as set forth below:
     TO LANDLORD AT:                         TO TENANT AT:
     Exstar Financial Corp.                  Peter J. O'Shaughnessy
     P. 0. Box 678                           42-510 Caracas Place
     Solvang, CA 93464                       Bermuda Dunes, CA 92201

     Such notice shall be deemed to be received within forty-eight hours from
the time of mailing, if mailed as provided for in this paragraph.

22. WAIVERS:
     No waiver by Landlord of any provision hereof shall be deemed a waiver of
any other provision hereof or of any subsequent breach by Tenant of the same or
any other provisions.

23. TIME:
     Time is of the essence of this Lease.

24. JOINT AND SEVERAL OBLIGATIONS:
     "Party" shall mean Landlord and Tenant; and if more than one person or
entity is the Landlord or Tenant, the obligations imposed on the party shall be
joint and several.

25. OPTION TO EXTEND:
     Provided that Tenant shall not then be in default hereunder, Tenant shall
have the option to extend the term of this Lease for month to month (month/year)
periods upon the same terms and conditions herein contained, except for fixed
minimum monthly rental, upon delivery by Tenant to Landlord of written notice of
its election to exercise such option(s) at least sixty (60) days prior to the
expiration of the original (or extended) term hereof. The parties hereto shall
have thirty (30) days after the Landlord receives the option notice in which to
agree on the minimum monthly rental during the extended term(s). If the parties
agree on the minimum monthly rent for the extended term(s) during that period,
they shall immediately execute an amendment to this Lease stating the minimum
monthly rent. In the event that there is more than one option to extend the term
of this Lease, the parties hereto shall negotiate the minimum monthly rent as
set forth herein for each extended term of this Lease. If the parties hereto are
unable to agree on the minimum monthly rent for the extended term(s) within said
thirty (30) day period, the option notice shall be of no effect and this Lease
shall expire at the end of the term. Neither party to this Lease shall have the
right to have a court or other third party set the minimum monthly rent. Exhibit
A Expense Schedule which is attached hereto, is made a part hereof.

     The parties hereto have executed this Lease on the date first above
written.

LANDLORD: Exstar Financial Corp.        TENANT:

By:  /S/ Steven C. Shinn                By:  /S/ Peter J. O'Shaughnessy
     Steven C. Shinn, President              Peter J. O'Shaughnessy

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                                   EXHIBIT "A"
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     CARACAS HOUSE EXPENSES TENANT vs. LANDLORD (EXSTAR FINANCIAL)
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<S>                                                        <C>       <C>

Cable TV                                                              X
Electrical work for office                                  X
Electrical work for security cameras and sattelite                    X
Electricity                                                           X
Furniture and shelving purchases                                      X
Gas                                                                   X
Home owner's association fees                               X
Insurance                                                   X
Landscaping                                                 X
Pest control                                                X
Pool and spa maintenance                                    X
Property Tax                                                X
Rekeying of locks                                           X
Repairs to house (except damage repairs caused by tenant)   X
Sattelite dish installation and service                               X
Security camera Installation and maintenance                          X
Trash                                                                 X
Vehicle repair, maintenance and fuel                                  X
Water                                                       X
(The following phone lines are currently installed)
* 360-1539 main personal voice line                                   X
* 772-2048 Personal roll-over voice from 360-1539                     X
* 772-4012 office fax line                                  X
* 360-8900 office voice                                     X
* 360-4460 roll over voice line from 360-8900               X
* 360-3439 additional modem line                            X
* 416-5431 ISDN data line for Office intemet connection     X
* 360-3217 voice line for Kyle                                        X
* 360-4218 modem line for Kyle                                        X
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