<PAGE>   1
                                                                  EXHIBIT 10.15


                                      LEASE

                          dated as of September __, 1997
                                     between
                            ROTTERDAM VENTURES, INC.
                            D/B/A GALESI ENTERPRISES

                                    as Lessor
                                       and

                             PETE'S BREWING COMPANY

                                    as Lessee




Affecting a portion of the premises commonly known 145 Huguenot Street New
Rochelle, New York



<PAGE>   2
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
PARAGRAPH & TITLE                                                              PAGE
                                                                               ---- 
<S>                                                                            <C>
1.     TERM .................................................................... 4
1A.    OPTION TO RENEW ......................................................... 4
2.     RENTAL SCHEDULE ......................................................... 5
3.     USE OF PREMISES ......................................................... 5
4.     TAXES & ASSESSMENTS-UTILITY CHARGES & OPERATING SERVICES................. 6
5.     ELECTRICAL SYSTEM & SERVICE ............................................. 9
6.     HEATING, VENTILATING & AIR CONDITIONING SYSTEM & SERVICE................ 10
7.     INSURANCE - INDEMNITY ...................................................11
8.     PREPARATION OF THE LEASED PREMISES ......................................13
9.     OTHER LEASEHOLD IMPROVEMENTS BY LESSEE ..................................13
10.    OCCUPANCY/COMMENCEMENT DATE .............................................15
11.    MAINTENANCE AND REPAIRS .................................................15
12.    CLEANING/JANITORIAL SERVICES ............................................17
13.    DAMAGE TO OR DESTRUCTION OF LEASED PREMISES .............................17
14.    ACTION OF PUBLIC AUTHORITIES ............................................17
15.    DEFAULT .................................................................18
16.    ACCELERATION OF RENT UPON DEFAULT .......................................18
17.    SUBORDINATION ...........................................................19
18.    SUBLETTING AND ASSIGNMENT ...............................................19
19.    RECORDATION .............................................................20
20.    SURRENDERS AND WAIVERS ..................................................20
21.    NOTICE ..................................................................21
22.    BROKERAGE ...............................................................22
23.    ENTIRE AGGEEMENT ........................................................22
</TABLE>


                                        2


<PAGE>   3
<TABLE>
<CAPTION>
PARAGRAPH & TITLE                                                              PAGE
                                                                               ---- 
<S>                                                                            <C>
24.    CHANGES, MODIFICATIONS OR AMENDMENTS ................................... 22
25.    SEVERABILITY ........................................................... 22
26.    COVENANTS TO BIND RESPECTIVE PARTIES ................................... 22
27.    BUILDING NAME .......................................................... 22
28.    CERTIFICATE ............................................................ 22
29.    LESSEE'S REPRESENTATIONS ............................................... 22
30.    LESSEE'S REMEDIES ...................................................... 23
31.    SECURITY ............................................................... 23
32.    GOVERNING LAW .......................................................... 23
       EXHIBIT A - RENTAL SCHEDULE ............................................ 26
       EXHIBIT B - DRAWING .................................................... 27
       EXHIBIT C - WORK LETTER ................................................ 28
       EXHIBIT D - RULES AND REGULATIONS ...................................... 29
       EXHIBIT E - CLEANING/JANITORIAL SPECIFICATIONS ......................... 31
</TABLE>


                                        3


<PAGE>   4
                                 LEASE AGREEMENT


        THIS LEASE AGREEMENT, made this   day of September, 1997 between
ROTTERDAM VENTURES, INC. D/B/A/ GALESI ENTERPRISES, having a place of business
at 145 Huguenot Street, New Rochelle, New York 10801 (Lessor) and PETE'S BREWING
COMPANY, a California corporation having its principal office at 514 High
Street, Palo Alto, California 94301 (Lessee).

                               W I T N E S S E T H

        WHEREAS, Lessor is the owner of that certain tract of land with building
and improvements thereon erected commonly known as 145 Huguenot Street
(hereinafter referred to as the "Premises") New Rochelle, New York; and

        WHEREAS, Lessee desires to rent a portion of the Premises for the
conduct-of its business;

        NOW THEREFORE, in consideration of the payment by Lessee of the rent
hereinafter reserved and the mutual performance of the covenants and conditions
hereinafter set forth, Lessor does hereby let and demise unto Lessee and Lessee
does hereby take and hire from Lessor, a certain portion of the Lessor's
premises (hereinafter referred to as the "Leased Premises"), located on the
first floor of the Premises, Suite 101, comprising approximately 1,320 square
feet of rentable space as more particularly described on Exhibit B attached
hereto and made a part hereof. Lessor shall perform the construction required
for the Leased Premises as set forth in Exhibit C.

1. TERM: This Lease Agreement is for a term of three (3) years, commencing on
the later of September 1, 1997 or the date by which the Leased Premises are
outfitted and ready for occupancy by Lessee (as defined in Paragraph 10 thereof)
(the "Commencement Date") and expiring on August 31, 2000 unless renewed or
shall end on such earlier date or be canceled or terminated pursuant to the
provisions of this Lease Agreement or pursuant to law (the "Lease Term"). If the
Commencement Date has not occurred for any reason whatsoever not related to the
acts or omissions of Lessee, or any of its employees, contractors, agents or
representatives, on or before December 1, 1997, then, in addition to Lessee's
other rights or remedies, Lessee may terminate this Lease Agreement by written
notice to Lessor given on or before December 10, 1997, whereupon any monies
previously paid by Lessee to Lessor shall be reimbursed to Lessee.

1A. OPTION TO RENEW Lessee shall have the option to renew this Lease Agreement
for three (3) years upon one hundred twenty (120) days prior written notice to
Lessor provided that Lessee is not in default (beyond any applicable cure
periods), under this Lease Agreement. During the renewal period all terms and
conditions of this Lease Agreement shall remain in full force and effect except
that the fixed rent shall be $23,760.00 per annum payable in equal monthly
installments of $1,980.00.



                                        4



<PAGE>   5
2.      RENTAL SCHEDULE:

        A) The fixed rental for the Leased Premises is $21,120.00 per annum,
        payable in monthly installments, on the first day of each calendar month
        in increments of $1,760.00, for years one, two and three ; (the "Fixed
        Rent") all based on there being 1,320 square feet in the Leased Premises
        and subject to correction if there are fewer or greater square feet in
        the Leased Premises. These rates do not include electric, or air
        conditioning. The Lessee shall pay a late charge of two (2%) percent per
        month in the event any rental payment is made more than five (5) days
        after the first day of each month, of any installment of rental (Fixed
        minimum, or other as may be construed as rent) if said rental payment is
        made after its due date (the "Late Charge").

        B) The rentable area set forth above has been determined from the plans
        of the Leased Premises, If Lessee should expand its area of actual
        occupancy such that there should be any variance between said plans and
        the actual rentable area occupied by Lessee, then promptly upon notice
        by Lessor to Lessee of such variance, the parties shall enter into a
        recordable agreement to reflect such change and the Fixed Rent shall be
        adjusted in accordance therewith.

        C) The Lessor reserves the sole right upon ninety (90) days notice, to
        relocate the Lessee to other space in the Premises, which space shall be
        comparable in size, location and configuration to the presently Leased
        Premises and the decor of the "New" Premises shall be at least equal to
        or superior to the presently Leased Premises under this Lease Agreement.
        This request shall be in writing and does not require Lessee's written
        approval. All relocation costs, moving costs, remodeling, etc., shall be
        borne by the Lessor and all terms and covenants of this Lease Agreement
        shall remain unchanged and in full effect except as noted below. Lessor
        agrees to relocate Lessee after 5:00 p.m. on Friday and have Lessee open
        for business by 9:00 a.m. on Monday. Depending upon the term of the
        Lease Agreement, the parties reserve the right with mutual assent to
        enter renegotiation discussions regarding the Lease Term of the Lease
        Agreement.

        D) The monthly fixed rental payments shall be paid in advance, without
        notice, on or before the first day of each calendar month following the
        Commencement Date and each month thereafter during the term of this
        Lease Agreement or any renewal thereof Lessee covenants that the Fixed
        Rent shall be paid promptly to Lessor, at Lessee's option by mail or in
        person either at the offices of Lessor at 145 Huguenot Street, New
        Rochelle, New York or to such other person or at such other place as
        Lessor may designate, in lawful money of the United States, without
        notice, demand or abatement (except an abatement expressly provided for
        in this Lease Agreement) and without any setoff or deduction whatsoever.
        Lessee further covenants that any Additional Rent (as hereinafter
        defined) hereinafter provided for shall be paid to Lessor in the same
        manner and subject to the same conditions, covenants and requirements as
        provided for the payment of the Fixed Rent, on or before the first day
        of the first calendar month or within ten (10) day grace period
        following demand therefor (unless otherwise specifically provided in
        this Lease Agreement).

3       USE OF PREMISES: Lessee will use and occupy the Leased Premises as
        executive, office, conference center and general office activities for
        its lawful business purposes. Lessee will comply with any and all laws,
        ordinances rules, orders and regulations of any governmental authority
        which are applicable to the conduct of Lessee's business on the Leased
        Premises.



                                              5



<PAGE>   6
        The parties agree not to hinder the operational activities of either
        party within such common areas as the Plaza entrance and Lobby,
        elevators, fire access lanes, driveways, turn-around areas, parking,
        loading, unloading and shall mutually observe the restricted areas of
        either party or other tenants on the Premises.

        Notwithstanding the foregoing, Lessee shall not be required to comply
        with or cause the Leased Premises to comply with any laws, rules or
        regulations requiring alterations or improvements to the Leased Premises
        unless the compliance with any of the foregoing is necessitated solely
        due to Lessee's particular use of the Leased Premises.

4.      TAXES & ASSESSMENT - UTILITY CHARGES & OPERATING SERVICES: 

        A) During the term of this Lease Agreement Lessee shall pay as
        Additional Rent (as hereinafter defined) its pro rata share of any real
        estate tax ("Tax") which is in excess of the real estate tax imposed or
        assessed on the same for the base tax year ("Additional Rent"). The base
        tax year shall be calendar year 1998.

               1) Lessee's share of any increased Tax shall be due and payable
               thirty (30) days after presentation of appropriate Tax statements
               showing that such Tax is due and substantiating Tax receipts by
               Lessor.

               2) The Lessee's proportionate share of any Tax increase shall be
               .48%. In the event that the amount of space rented by Lessee
               shall increase or decrease, the share of Tax paid by Lessee shall
               be proportionately increased or decreased.

               3) The terms "Tax" or "Taxes" shall mean the total of all real
               estate taxes and special assessments levied or imposed against
               the Premises, together with any franchise, income, profit or
               other tax, however designated, which is, due to a future change
               in the method of taxation, substituted in full or in part for or
               in lieu of such real estate tax but not including interest or
               penalties, including but not limited to any new tax of a nature
               not presently in effect but which may be hereinafter levied,
               assessed or imposed on the Lessor, or the Premises, if such Tax
               shall be based or arise out of the ownership, use or operation of
               the premises. Under no circumstances, however, shall "Tax" or
               "Taxes" include income tax or franchise tax due in respect of
               Lessor's business.

               4) Notwithstanding anything herein to the contrary, if any act of
               the Lessee results in the increase of real estate taxes payable
               by the Lessor, the full amount of such increase shall be charged
               to the Lessee and paid as Additional Rent hereunder.

        B) During the term of this Lease Agreement or any renewal or extension
        thereof, Lessee shall pay for the following utilities required for its
        operations:

                1) All telephone equipment, installation and usage to be billed
                direct to the account of the Lessee by the utility.

                2) Lessor shall cause hot and cold water for ordinary lavatory,
                cleaning, drinking and toilet facility purposes to be furnished
                at no expense to Lessee.

                3) Lessor shall provide Lessee with electric energy. Lessor
                shall install (at Lessor's own expense) an electric submeter
                coveting the Leased Premises and Lessee shall pay



                                        6



<PAGE>   7

                Lessor for Lessee's actual electrical usage based on the
                electric utility's actual charges to Lessor therefor. If a
                sub-meter is not possible, then the parties will enter into an
                agreement amending this Lease Agreement which will provide for
                Lessee to pay for electric energy on a rent inclusion basis with
                the Additional Rent inclusion factor being two ($2.00) dollars
                per square foot per annum and with electric energy charges to be
                adjusted by means of electrical survey and also to accommodate
                changes in utility charges.

        C) Lessee agrees to pay as Additional Rent .48% cost of any increases to
        the "Operating Costs" that may be incurred during every calendar year or
        part thereof during the term of this Lease Agreement which shall be in
        excess of the operating costs for the calendar year 1998 based on full
        occupancy of the Premises (hereinafter referred to as the "Operating
        Base Year"). In the event that the amount of space rented by Lessee
        shall increase or decrease, the share of maintenance costs paid by
        Lessee shall be proportionately increased or decreased. "Operating
        Costs" shall include Lessor's reasonable costs or contribution to costs
        incurred in good faith for:

                1) Wages and salaries paid by or contributed to by Lessor, and
                contract costs paid to independent contractors utilized by
                Lessor for the normal operation, maintenance and repair of the
                Premises, including Social Security taxes, Unemployment
                Insurance taxes, worker's compensation payments, payments
                required by any union rule or regulation, and other provisions
                imposed by law, together with any employee "fringe benefits"
                incurred by Lessor;

                2) Management charges provided same are not in excess of such
                charges customarily charged in similar buildings in Westchester
                County;

                3) Uniforms of employees specified in subparagraph (1) above and
                the cleaning and pressing thereof;

                4) Repairs to, replacement of and physical maintenance of the
                Premises and its equipment and appurtenances; and additions and
                improvements required by law; and the cost of supplies and
                equipment used in connection therewith; and the cost of painting
                in public and common areas;

                5) Premiums and other charges by Lessor with respect to
                insurance of all kinds for the Premises which are customarily
                maintained by lessors of similar buildings in the Westchester
                County which Lessor determines to be reasonably necessary at its
                sole discretion and which Lessor in good faith pays and incurs;

                6) Costs incurred for fuel or other energy for heating the
                premises and operating the air conditioning system, for
                electricity, steam, or other power required in connection with
                the operation of the Premises; it being understood that this
                shall not include costs for which Lessor is reimbursed by other
                tenants (including electric energy paid for by rent inclusion);

                7) Costs incurred in connection with inspection and servicing of
                the Premises, its appurtenances and equipment;

                8) Water and sewer charges, except as specified in Paragraph
                4(B, 2) above;



                                        7



<PAGE>   8
                9) Any other tax or expense, direct or indirect, incurred by
                Lessor in connection with the operation, maintenance and repair
                of the Premises, its appurtenances and equipment.

                10) Attorneys' and auditing fees necessarily incurred in
                connection with the maintenance and operation of the Premises,
                and accounting fees incurred in connection with the preparation
                of Expense Control Statements (as hereinafter defined), as well
                as expenses incurred (including attorneys' fees) with respect to
                efforts to obtain a reduction in the annual assessed valuation
                of the Premises, but with attorneys' fees therefor not in excess
                of the amount of the resulting decrease in Taxes;

                11) Operating costs shall be "net" only, and for that purpose
                shall be deemed reduced by the amounts of any insurance
                reimbursement, other reimbursement, recoupment payment,
                discount, credit, reduction, allowance, or the like, received by
                Lessor in connection with such operating costs.

                12) Notwithstanding anything contained herein and without
                limiting the generality of the foregoing, the following costs
                shall not be including in operating costs:

                        a) The cost of painting, repainting, decorating or
                        redecorating for any Lessee of the Premises or of
                        providing for any such Lessee special cleaning services;

                        b) Any renting commissions or collection expense;

                        c) The cost of making any installations, changes or
                        alterations for existing or incoming leases;

                        d) Expenditures for improvements and replacements which
                        under generally accepted accounting principles and
                        practice should be classified as capital expenditure
                        except that there shall be included:

                                i) any capital expenditure for improvements the
                                purpose of which is to realize savings of costs
                                in the maintenance and operation of the
                                Premises; such expenses shall be included in the
                                operation costs, amortized on a straight line
                                basis over the period of time reasonably
                                anticipated to result in a saving in operating
                                costs, equal to the amount of such expenditure;
                                and

                                ii) periodic capital expenditures which under
                                generally accepted accounting principles and
                                practice are regarded as normal building
                                operating expenses in major office buildings;

                                iii) if, by reason of installation of labor
                                saving devices or otherwise, any items which are
                                included in Lessor's Operating Base year shall
                                be eliminated in any later year, then for the
                                purpose of computing Operating Costs for such
                                later year such items shall be deemed to be
                                eliminated during the Operating Base Year.

                        (e) costs occasioned by casualty or by the exercise of
                        the power of eminent domain.



                                        8



<PAGE>   9
                13) The Lessor's "Expense Control Statement" shall set forth the
                amount of the above items of operating costs for the Operating
                Base Year and for each year of increased costs and shall be in
                sufficient detail to substantiate the amount of the increase
                and the amount to be paid by Lessee. The Lessor or its Certified
                Public Accountants shall attest to the applicable increased
                costs and the increase to be paid by the Lessee. If Lessor shall
                not have delivered to Lessee the statement mentioned herein for
                any year, Lessee shall continue to pay Lessor the sums payable
                for the immediately preceding calendar year until the statement
                for the then current calendar year shall have been delivered, at
                which time the monthly payments by Lessee shall be adjusted
                retroactively. Lessor shall permit Lessee to audit and verify
                the same on reasonable request by Lessee, allow Lessee's
                representatives to examine the records and receipts pertaining
                to the costs referred to in the Expense Control Statement and
                shall confer with Lessee in an effort to in good faith resolve
                any disputes. Notwithstanding any other provision in this Lease
                Agreement, only one Expense Control Statement shall be issued in
                respect of any one year and it shall be issued within six (6)
                months after the end of the year to which it pertains.

                14) All such increased payments shall be prorated for any
                partial calendar years during the term of this Lease Agreement.

        D) The amounts due under Section 4, Paragraphs (A), (B), and (C) hereof
        shall be paid by Lessee and collectible as Additional Rent without
        setoff or deduction and shall be paid within thirty (30) days after
        written demand by Lessor accompanied by the documentation required by
        this Lease Agreement except that at Lessor's option, Lessee shall pay
        the Lessor, on demand, in advance, a sum equal to one-twelfth (1/12) of
        any amounts due by reason hereof multiplied by the number of months of
        the calendar year then elapsed, and one-twelfth (1/12) of such in
        respect of the then current month, and thereafter one-twelfth (1/1 2) in
        respect of each succeeding month in the applicable year on each monthly
        rent day, and Lessee shall be entitled to a credit for the amount so
        paid in advance against the escalation shown due at the end of each such
        year.

        E) Lessor's failure during the Lease Term to prepare and deliver any of
        the foregoing tax bills, statements or bills, or Lessor's failure to
        make a demand, shall not in any way result in or cause Lessor to
        forfeit or surrender its rights to collect any of the foregoing items of
        Additional Rent which may have become due during the term of this Lease
        Agreement. 

        F) Lessee's liability for the amounts due under this Paragraph shall
        survive the expiration of the Lease Term. In no event shall any rent
        adjustment hereunder result in a decrease in the Fixed Annual Rent.


5.      ELECTRICAL SYSTEM & SERVICE:

        A) The Lessor shall provide to the Lessee the installed or connected
        electrical system and related equipment for the Leased Premises. Any
        relocation, addition or alteration of the system beyond the building
        standard, done at the request of Lessee after the Leased Premises are
        outfitted as provided by this Lease Agreement, shall be at the Lessee's
        expense.

        B) Lessor shall not be liable to Lessee at any time for any loss,
        damage, or expense resulting from any change in the quantity or
        character of the electrical service furnished to the Premises by the
        electric utility; by the cessation or interruption of the supply of
        current by the electric;



                                        9



<PAGE>   10
        nor shall any such loss, damage or expense, or non-suitability,
        non-availability, cessation or interruption in the supply of electric
        service or current by the electric utility in any way affect the tenancy
        or in any way relieve Lessee of any obligation arising under the terms
        of the Lease Agreement.

        C) In order that the personal safety and property of the occupants and
        owner of the Premises may not be imperiled by the over-taxing of the
        capacity of the existing electrical distribution system, Lessee agrees
        not to make any alterations or additions to the electrical equipment,
        appliances, fixtures or other machinery utilizing electric power (other
        than lamps, lighting, typewriters, word processing equipment, document
        reproduction equipment, telephone, facsimile and communications
        equipment, refrigerator, microwave, television and VCR, personal
        computers, IBM or similar computer equipment, and other normal or small
        office machines) without obtaining the prior written consent of Lessor
        in each instance. Lessor shall provide feeders and wiring necessary for
        Lessee's equipment as provided by this lease and Lessee covenants and
        agrees that at all times its use of electric current shall never exceed
        the capacity of such existing feeders or any wiring installation in the
        Leased Premises.

        D) Replacement lamps/starters for all lighting fixtures shall be for the
        Lessor's account.


6.      HEATING, VENTILATING & AIR CONDITIONING SYSTEM & SERVICE:

        A) Lessor shall provide heating, air conditioning, and year round
        ventilating System into the interior areas, temperature conditions of 
        68 degrees F. dry bulb when the outside is 0 degrees F., and 75 degrees 
        F. dry bulb when the outside temperature is 95 degrees F. Any change in
        location of diffusers or peripheral system units, control valves,
        thermostats and openings in the demising wall to the slave to allow
        for the transfer of return air within the plenum, done at the request of
        Lessee after the Leased Premises are outfitted as provided by this Lease
        Agreement, shall be for the account of the Lessee.

        B) Lessor shall provide the above levels of HVAC throughout the year, in
        accordance with the Regular Business Hours of the premises (which shall
        be Monday through Friday, 7: 00 a.m. to 6:00 p.m.). For any usage beyond
        the above time for HVAC equipment not included in Lessee's submeter,
        the Lessee shall compensate the Lessor for the actual cost of Lessee's
        actual usage at the Lessor's then current hourly rate; such charges to
        be billed by the Lessor and paid by Lessee monthly as Additional Rent.
        Lessee shall give notice prior to 4:00 p.m. in the case of service oil
        working days and prior to 4:00 p.m. on Fridays (or the preceding working
        day, in the case of holidays) in the case of such service on days other
        than working days.

        C) Lessee agrees to keep and cause to be kept closed all windows in the
        Leased Premises and to close the blinds when necessary because of the
        sun's position, and Lessee agrees at all times to cooperate fully with
        the Lessor's energy conservation measures and to abide by all reasonable
        regulations and requirements which lessor may prescribe for the proper
        functioning and protection of the HVAC system.

        D) Lessee agrees that in the event its occupancy level or electrical
        load or both shall exceed the design capacity, the cost to Lessor of
        providing the necessary additional HVAC capacity, including but not
        limited to any necessary equipment, duct work or the like together with
        the cost of operation thereof, shall be for the account of Lessee and
        shall be payable by Lessee



                                       10



<PAGE>   11
        to Lessor, based upon the capacity of such additional equipment or the
        cost of otherwise providing such additional capacity. Lessor shall
        furnish Lessee in writing with an estimate of the cost of any such
        additional HVAC equipment together with the additional monthly amount
        for operating any additional capacity, and shall receive Lessee's
        written approval thereof prior to providing such additional HVAC
        capacity.

        E) Lessor, through the term of this Lease Agreement, shall have free and
        unrestricted access to any and all HVAC equipment in the Leased Premises
        upon reasonable notice. Lessor reserves the right to interrupt, curtail,
        stop or suspend such HVAC equipment when necessary by reason of
        accident, or repairs, alterations or improvements that are in the
        judgment of Lessor to be desirable or necessary to be made. No
        diminution or abatement of rent or other compensation shall or will be
        claimed by Lessee, nor shall the Lease Agreement or any of the
        obligations of Lessee be affected or reduced by reason of interruption
        or curtailment of such HVAC, when such interruption or curtailment or
        stoppage or suspension shall be due to failure of electric power or
        accident, or to repairs, alterations or improvements that are in the
        reasonable judgment of Lessor desirable or necessary to be made, or to
        difficulty or inability in securing supplies or labor, or to strikes, or
        to any other cause beyond the reasonable control of Lessor, whether such
        other cause be similar or dissimilar to those herein before specifically
        mentioned.

        F) Lessor shall not be required to furnish, and Lessee shall not be
        entitled to receive, any HVAC service after regular business hours
        during any period wherein Lessee shall be in default beyond the
        applicable notice period in the payment of rent as specified in the
        Lease Agreement.

7.      INSURANCE - INDEMNITY:

        (A) Lessor shall procure and maintain property insurance covering the
        full insurable value of the Premises and all other insurance which it
        deems necessary for its protection against loss or damage to the Leased
        Premises or any other property of Lessor situated thereon.

        B) Nothing contained in this Lease Agreement shall be construed to
        require either party to repair, replace, reconstruct, or pay for any
        property of the other party which may be damaged or destroyed by fire,
        flood, windstorm, earthquake, strikes, riots, civil commotions, acts of
        public enemy, act of God, or other casualty, and each party hereby
        waives all claims against the other for all loss or damage arising out
        of perils normally insured against by standard fire and extended
        coverage insurance. Notwithstanding anything to the contrary in this
        Lease Agreement, the parties hereto release each other and their
        respective agents, employees, successors, assignees and subtenants from
        all liability for damage to any property that is caused by or results
        from a risk which is actually insured against, which is required to be
        insured against under this Lease Agreement, or which would normally be
        covered by all risk property insurance, without regard to the negligence
        or willful misconduct of the entity so released. Each party shall use
        its reasonable good faith efforts to cause each insurance policy it
        obtains to provide that the insurer thereunder waives all right of
        recovery by way of subrogation as required herein in connection with any
        injury or damage covered by the policy. If such insurance policy cannot
        be obtained with such waiver of subrogation, or if such waiver of
        subrogation is only available at additional cost and the party for whose
        benefit the waiver is not obtained does not pay such additional cost,
        then the party obtaining such insurance shall immediately notify the
        other party of that fact.

        C) Neither party nor any agent or employee of either party shall be
        liable for:



                                       11



<PAGE>   12
                1) Loss of or damage to any property of the other party, or of
                any entity within the other party's control, or injury to any
                entity (if a person) within the other party's control, from any
                cause whatsoever, unless caused by or due to the party's gross
                negligence or willful misconduct;

                2) Any damage referred to in (1) above caused by other occupants
                or persons in the premises or by construction of any private,
                public or quasi-public work; or

                3)Any latent defect in the Leased Premises or the Premises and
                Lessee shall not be entitled to any compensation therefor or for
                abatement of Rent or to any release of any of Lessee's
                obligations under this Lease Agreement so long as such defect
                remains latent; nor shall the same constitute an eviction.

        D) Lessee and Lessor shall indemnify each other, defend and hold the
        other party harmless against and from all liability referred to in (a)
        above arising out of any action brought by any entity within the party's
        control, which, for purposes of this Paragraph, shall include the
        party's agents, employees, contractors and invitees.

        E) Lessee shall reimburse and compensate Lessor as Additional Rent,
        within five (5) days after rendition of a statement for all expenditures
        (except attorneys' fees) made by, or damages or fines sustained or
        incurred due to non-performance of or non-compliance with or breach by
        or failure to observe any term, covenant or condition of this Lease upon
        such party's part to be kept, observed, performed or complied with.

        F) Except to the extent of Lessor's gross negligence or willful
        misconduct, Lessee shall save Lessor harmless and indemnify it from and
        against all injury, loss, claims or damage (except attorneys' fees) to
        any person or property while on the Premises arising out of use or
        occupancy of the Leased Premises by the party or its employees,
        suppliers, contractors or agents and from and against all injury, loss,
        claim or damage to any person or property anywhere occasioned by any
        act, neglect or default of the party or its employees, suppliers,
        contractors or agents. Lessee covenants and agrees that during the term
        of this Lease Agreement it will provide and keep in force general
        public liability insurance protecting and indemnifying persons and
        property in or about the Leased Premises and in the Premises throughout
        and the connecting corridors thereof to the limit of not less than one
        million ($1,000,000.00) dollars in respect of any one occurrence and
        three million ($3,000,000.00) dollars for bodily injury or death to any
        number of persons in any one occurrence and to the limit of not less
        than one million ($1,000,000.00) dollars for property damage. Lessee
        shall provide, or cause to be provided, Worker's Compensation Insurance
        covering all persons employed in connection with the performance of work
        upon, in or about the Leased Premises and the Premises throughout and
        the connecting corridors thereof (exclusive of work being done by Lessee
        as provided by this Lease Agreement). All such insurance shall be
        effected in standard form under valid, enforceable policies issued by
        insurers of recognized responsibility and licensed to do business in the
        State of New York and shall, except in the case of Worker's Compensation
        Insurance, name Lessee as insured and include Lessor as additional
        insured. Certificates of such insurance shall be delivered to Lessor
        from time to time during the term of this Lease Agreement at least ten
        (10) days prior to the expiration date of the previous policy together
        with certificates evidencing the renewal of such policy with
        satisfactory evidence of payment of the premium on such policy. To the
        extent obtainable, all such policies shall contain agreements by the
        insurers that (i) such polices shall



                                       12



<PAGE>   13
        not be canceled except upon ten (10) days prior written notice to each
        named insured and (ii) the coverage afforded thereby shall not be
        affected by the performance of any work upon, in or about the Leased
        Premises.

        G) If by reason of the negligence or willful misconduct of Lessee there
        shall be an increase in the insurance premiums applicable to the
        Premises. Lessee shall pay such increase or expense to the Lessor on the
        first day of the month immediately following the submission of a bill or
        statement by Lessor to the Lessee for the same.


8.      PREPARATION OF THE LEASED PREMISES:

        A) The Lessor shall provide and install in the Leased Premises those
        items as specified in Exhibit C (Work Letter) (the "Tenant
        Improvements").

        B) The Lessor's agreement to do the work in the Leased Premises as set
        forth in the "Work Letter" shall not require it to incur overtime costs
        and expenses and shall be subject to unavoidable delays due to acts of
        God, governmental restrictions, strikes, labor disturbances, shortages
        of materials and supplies and for any other causes or events beyond
        Lessor's reasonable control. Lessor has made, and makes, no
        representation as to the date when the Leased Premises will be ready for
        Lessee's occupancy.

        C) The Tenant Improvements shall be constructed in accordance with
        applicable laws, in a good and workmanlike manner, free of defects and
        using new materials and equipment of good quality. Lessee shall have the
        right to submit a written "punch list" to Lessor, setting forth any
        defective items of construction, and Lessor shall promptly cause such
        items to be corrected. Lessee's acceptance of the Leased Premises or
        submission of a "punch list" shall not be deemed a waiver of Lessee's
        right to have defects in the Tenant Improvements or the Leased Premises
        repaired at no cost to Lessee. Lessee shall give notice to Lessor
        whenever any such defect becomes reasonably apparent, and Lessor shall
        repair such defect as soon as practicable.

9.      OTHER LEASEHOLD IMPROVEMENTS BY LESSEE:

        A) Lessee shall have the right, with the prior written consent of Lessor
        (except that decorative improvements including painting, wall coverings,
        carpeting and non-structural work shall require only prior notice to
        Lessor), and at Lessee's sole expense, to make alterations or
        improvements in or to the Leased Premises as it shall consider necessary
        or desirable for the conduct of its business, provided that all such
        work shall be done in a good and workmanlike manner, that the structural
        integrity of the Premises shall not be impaired, and no liens shall
        attach to the Leased Premises by reason thereof and provided also that
        all requirements of governmental authorities be complied with.

        B) With respect to other improvements by the Lessee requiring Lessor's
        written consent, Lessee shall prepare at its expense the outline
        drawings and specifications indicating the alterations, modifications
        or any other improvements to be made to the Leased Premises by the
        Lessee. All such plans shall conform to the conditions outlined herein
        and as may be reasonably established by Lessor.



                                       13



<PAGE>   14


        C) The Lessee shall submit the plans and specifications to the Lessor
        for review and approval prior to the start of any work. The Lessor's
        approval or conditioned acceptance of the improvements shall be within
        ten (10) days after receipt.

        D) With respect to other improvements by the Lessee requiring Lessor's
        written consent, the Lessee, at the expense of the Lessee, shall file
        the appropriate plan with the appropriate municipal building department
        and obtain approval and an occupancy or other permits for the Lessee. No
        work shall commence until the above approvals have been received.

        E) With respect to other improvements by the Lessee requiring Lessor's
        written consent, Lessee shall furnish a copy to Lessor of any
        construction contracts with contractors who will perform the Lessee's
        improvements to the Leased Premises. The Lessor shall have the right to
        inspect and to insure:

                1) That the work will be done in accordance with the approved
                plans and specifications and the consents, authorizations and
                licenses obtained:

                2) That the contractor or other persons performing the work and
                furnishing materials will look solely to Lessee for payment and
                will hold Lessor and the Leased Premises and the Premises
                containing the Leased Premises free from all liens and claims of
                all persons furnishing labor or materials therefor, or both;

                3) That qualified and skilled tradesmen only shall be used in
                the performance of Lessee's leasehold improvement.

                4) Any mechanic's lien filed against the Leased Premises or the
                Premises for work claimed to have been done or materials
                furnished to Lessee shall be discharged by Lessee, at its
                expense, within fifteen (15) days after notice from Lessor to
                such effect. For the purposes hereof, the bonding of such lien
                by a reputable casualty insurance company shall be deemed the
                equivalent of a discharge of such mechanic's lien. Should Lessee
                fail to comply with the provisions of this Paragraph, Lessor
                will procure the discharge of such mechanic's lien and charge
                the expense thereof (including attorneys' fees) to Lessee as
                Additional Rent.

                5) Contractors doing Lessee's work shall employ only such labor
                as will not result in jurisdictional disputes or strikes or
                otherwise cause labor discord with respect to the Premises.

        F) Lessee or its employees, suppliers, contractors or agents agree to
        indemnify and save Lessor harmless against any and all bills for labor
        performed and equipment, fixtures and materials installed on the
        Premises containing the same and from and against all losses, damages,
        costs, expenses, suits and claims whatsoever in connection with the
        access to the Premises and to the Lessee's leasehold improvements in
        the Leased Premises. The cost of Lessee's leasehold improvements shall
        be paid for in cash or its equivalent, so that the leased premises and
        the Premises containing the same shall at all times be free of liens for
        labor and materials supplied or claimed to have been supplied.

        G) Except as hereinafter provided, upon the termination of this Lease
        Agreement, the improvements and any other alterations, additions or
        improvements (other than trade fixtures) shall, become the property of
        Lessor and shall be surrendered with the Leased Premises, and



                                       14



<PAGE>   15
        Lessee shall have no obligation to remove such alterations, additions or
        improvements. Notwithstanding the foregoing, Lessor, by written notice
        to Lessee within ten (10) days after the date on which Lessee provides
        Lessor notice of any alterations, additions, or improvements to be
        performed by Lessee, shall have the right to require Lessee to remove
        any such alterations, additions or improvements upon the termination of
        this Lease Agreement, and, any part of the Leased Premises affected by
        such removal shall be restored to its original condition, reasonable
        wear and tear, casualty, and hazardous substances not caused by Lessee
        excepted.

10.     OCCUPANCY/COMMENCEMENT DATE:

        A) In the event this Lease Agreement pertains to the initial occupancy
        by any Lessee of the Leased Premises, the Leased Premises shall be
        deemed ready for occupancy on the earliest date on which both of the
        following conditions have been met.

                1) The improvements described herein to be performed by Lessor
                have been substantially completed, including the erection and
                painting or covering (as required) of the walls, the
                installation of the doors and hardware and locks therefore, the
                installation of lighting, electrical outlets and switches such
                that they are operational, the installation of telephone outlets
                (but not of telephone equipment, provided reasonable notice has
                been given to Lessee such that the telephone equipment vendor
                could reasonably have installed such equipment) and the issuance
                of such governmental approvals as may be required for occupancy.

                2) Adequate means of access have been provided, and the use
                without material interference of the facilities necessary to
                Lessee's occupancy of the Leased Premises, including corridors,
                elevators, stairways, heating, ventilating, air conditioning,
                sanitary, water and electrical lighting and power facilities,
                are available to Lessee in accordance with Lessor's obligations
                under the Lease Agreement.

        B) Lessor shall give written notice to Lessee designating the
        Commencement Date for the term of the Lease Agreement in respect of the
        Leased Premises, which shall be not fewer than ten (10) business days
        notice.

11.     MAINTENANCE AND REPAIRS:

        A) Lessee shall keep the Leased Premises in good condition, reasonable
        wear and tear excepted, and shall, in the use and occupancy of the
        Leased Premises, conform to all laws, orders and regulations of the
        Federal, State and municipal governments, or any of their departments,
        and regulations of the New York Board of Fire Underwriters, applicable
        to the Premises. Notwithstanding the foregoing, Lessee shall not be
        required to comply with or cause the Leased Premises to comply with any
        laws, rules or regulations requiring alterations or improvements to the
        Leased Premises unless the compliance with any of the foregoing is
        necessitated solely due to Lessee's particular use of the Leased
        Premises. Lessee shall not be required to perform any maintenance,
        repairs or replacements necessitated by the negligence of Lessor, its
        servants, agents, or employees, or structural defects or deficiencies in
        any building, or by fire, or other casualty. Notwithstanding the
        foregoing, Lessor shall perform and construct, and Lessee shall have no
        responsibility to perform or construct, any repair, maintenance or
        improvements (i) for which Lessor has a right of reimbursement from
        others, (ii) to the heating, ventilating, air conditioning, electrical,
        water, sewer, and plumbing systems serving the Leased Premises and the
        Premises and (iii) to any portion of the Premises



                                       15



<PAGE>   16
        outside of the demising walls of the Leased Premises. Notwithstanding
        the foregoing, Lessee shall pay for its share of the repairs described
        in subsections (ii)-(iii) to the extent such costs are properly included
        in Operating Costs.

        B) Except for such maintenance, repairs, and replacements as are
        required by (A) above to be made by Lessee, Lessor shall perform any and
        all structural alterations, maintenance, repairs and equipment
        replacements which may be necessary to maintain the Premises in good,
        safe and tenantable condition.

        C) Lessee shall permit the Lessor to erect, use and maintain pipes and
        conduits in and through the Leased Premises, provided the same are
        installed and concealed behind walls and ceiling of the Leased Premises
        and it does not result in any noticeable loss of Lessee's space. All
        work necessary in connection with the foregoing shall to the extent
        possible, be done outside of Lessee's regular business hours. The Lessor
        or its agents shall have the right to enter the Leased Premises to make
        such repairs or alterations as the Lessor reasonably deems desirable for
        the proper operation of the Premises and shall have the right to enter
        the Leased Premises at any time on reasonable advance notice to Lessee
        to examine them or when necessary for the protection of the Leased
        Premises or the Premises. The Lessor, provided it proceeds with due
        diligence, shall be allowed to take all material into and upon the
        Leased Premises that may be required for such repairs or in part and
        without any abatement or diminution of rent. In the making of such
        repairs or alterations, the Lessor, to the extent practicable and
        consistent with efficiency and economy, shall exercise reasonable
        diligence so as to minimize the disturbance of or interference with the
        business of Lessee. Nothing herein contained, however, shall be deemed
        or construed to impose upon the Lessor any obligation, responsibility or
        liability whatsoever for the care, supervision, or repair of the
        Premises or any part thereof, other than as herein provided. The Lessor
        shall also have the right at any time, without the same constituting an
        actual or constructive eviction and without incurring any liability to
        Lessee, therefore, to change the arrangement or location of entrances or
        passageways, doors and doorways and corridors, stairs, toilets, or other
        public parts of the Premises, provided that no changes shall be made
        without Lessee's consent where such changes would adversely affect
        Lessee's ingress and egress to and from the Leased Premises from the
        street floor or from the lobby of the Premises or from the hallway or
        lobby of the Premises.

        D) Lessee shall at all times during the term of this Lease Agreement,
        and any extensions thereof, permit inspection of the Leased Premises
        during business hours, by the Lessor and its agents or representatives,
        or by or on behalf of prospective lessees. Except in the case of
        emergency, any such inspection will be done on at least twenty-four (24)
        hours' notice. Such inspection will be done in a manner so as not to
        unreasonably interfere with Lessee in the conduct of its business.

        E) Damages resulting from the negligence or willful misconduct of the
        Lessee or its employees, contractors, agents, licensees or invitee shall
        be repaired by the Lessee, if repaired by the Lessor, all costs shall
        be charged to the account of the Lessee.

        F) All repairs or replacements by Lessee or Lessor shall be of first
        quality and done in good and workmanlike manner. If Lessee is charged
        with making such repairs, restorations and replacements, the contractor
        chosen by Lessee to do such repairs, restorations or replacements shall
        be subject to Lessor's approval and further, if Lessee shall fail within
        fifteen (15) days' written request from Lessor to commence the making
        of such repairs, restorations and



                                       16



<PAGE>   17
        replacements and complete the work with reasonable diligence, they may
        be made and completed by Lessor but at the expense of Lessee.

12. CLEANING/JANITORIAL SEVICES: Lessor shall provide cleaning/janitorial
services at its own expense, as outlined in Exhibit F.

13. DAMAGE TO OR DESTRUCTION OF LEASED PREMISES: If during the term of the
lease, the Leased Premises are damaged by fire, flood, windstorm, strikes,
riots, civil commotions, acts of God, or other casualty so that the same are
rendered wholly unfit for occupancy, and if said Leased Premises cannot be
repaired within one hundred twenty (120) days from the time of such damage, then
this Lease Agreement, at the option of the Lessor or Lessee, may be terminated
as of the date of such damage. In the event that the Lessor elects to terminate
this Lease Agreement, the Lessee shall pay the rent apportioned to the time of
damage and shall immediately as practicable surrender the Leased Premises to the
Lessor who may enter upon and repossess the same and Lessee shall be relieved
from any further liability hereunder. If the parties elect not to terminate the
Lease Agreement or if any damage by any of the above casualties, rendering the
Leased Premises wholly unfit, can be repaired within one hundred twenty (120)
days thereafter, Lessor agrees to repair such damage promptly within such period
and this Lease Agreement shall not be affected in any manner except that the
Rent shall be suspended and shall not accrue from the date of such damage until
such repairs have been completed. If said Leased Premises shall be so slightly
damaged by any of the above casualties as not to be rendered wholly unfit for
occupancy, Lessor shall repair the Leased Premises promptly and to Lessee's
satisfaction and during the period from the date of such damage until the
repairs are completed the Rent shall be apportioned so that the Lessee shall pay
as rent an amount which bears the same ratio to the entire monthly rent as the
portion of the Leased Premises which Lessee is able to occupy without
disturbance during such period bears to the entire Leased Premises. If the
damage by any of the above casualties is so slight that Lessee is not disturbed
in its possession and enjoyment of the Leased Premises, then Lessor shall repair
the same promptly and in that case the rent accrued or accruing shall not abate.

Notwithstanding, anything herein contained to the contrary, if the cost of
repair or restoration exceeds thirty (30%) percent of the replacement value,
less foundation, of the Premises, then Lessor shall have the option, exercisable
on written notice to Lessee within sixty (60) days of such damage, not to repair
and restore the Premises in which event this Lease Agreement shall terminate as
of the date of the damage.

Lessee hereby expressly waives the provisions of Section 227 of the Real
Property Law or any other law or statute hereafter enacted of similar import and
agrees that the foregoing provisions of this Paragraph shall govern and
control in lieu thereof.

14. ACTION OF PUBLIC AUTHORITIES: In the event that any exercise of the power of
eminent domain by any governmental authority, Federal, State, County, or
municipal, or by any other party vested by law with such power shall at any time
materially affect Lessee's use and enjoyment of the Leased Premises by Lessee
for the purposes set forth in Paragraph 3, Lessor and Lessee shall each have the
right thereupon to terminate this Lease Agreement. In the event of the
termination of this Lease Agreement in accordance with the provisions of this
Paragraph 14, the Fixed Rent and the Additional Rent shall be apportioned and
prorated accordingly. Lessee shall not be entitled to claim or receive any part
of any award in any condemnation proceeding or as result of such condemnation or
taking, or to any damages against Lessor whether the same be for the value of
the unexpired term of this Lease Agreement or otherwise. Nothing herein
contained, however, shall be deemed to


                                       17



<PAGE>   18
preclude Lessee from making any claim against the condemnor for the value of any
of Lessee's fixtures or improvements or for Lessee's moving expenses provided
the award for such claim or claims is not in diminution of the award made to the
Lessor (who shall not claim such items as his own).

15. DEFAULT: If Lessee shall fail to pay any Fixed or Additional Rent to Lessor
when the same is due and payable under the terms of this Lease Agreement and
such default shall continue for a period of ten (10) days after written notice
thereof has been given to Lessee By Lessor, or if the Lessee shall materially
fail to perform any of the covenants or conditions hereof or any other duty or
obligation imposed upon it by this Lease Agreement and such default shall
continue for a period of thirty (30) days after written notice thereof has been
given to Lessee by Lessor, or if the Lessee shall be adjudged bankrupt, either
voluntarily or involuntarily, or shall make a general assignment for the benefit
of its creditors, or a receiver of any property of Lessee in or upon the Leased
Premises be appointed in any action, suit, or proceeding by or against Lessee
and such appointment shall not be vacated or annulled within sixty (60) days, or
if Lessee enters into any type of reorganization under the United States
Bankruptcy Act, as the same may from time to time be amended, or if the interest
of Lessee in the Leased Premises shall be sold under execution of other legal
process, then and in any such events Lessor, in its sole discretion, may at any
time thereafter terminate this lease and the term thereof upon giving to the
Lessee five (5) days notice in writing of its intention to do so and upon the
giving of such notice, this Lease Agreement and the term thereof shall
terminate, and Lessor shall again have, repossess and enjoy the same as if this
Lease Agreement had not been made, and thereupon this Lease Agreement shall
terminate without prejudice, however, to the right of Lessor to recover from
Lessee all rent due and unpaid up to the time of such re-entry together with all
damages and expenses, including attorneys' fees, incurred by Lessor due to
Lessee's default. In the event of any such default and re-entry, Lessor shall
have the right, but not the obligation to relet the Leased Premises for the
remainder of the then existing term whether such term be the initial term of
this Lease Agreement or any renewed or extended term, for the highest rent then
obtainable, and to recover from Lessee, as damages, the difference between the
rent reserved by this Lease Agreement and the amount obtained through such
reletting, less the costs and expenses reasonably incurred by Lessor in such
reletting (including reasonable attorneys' fees). In the event that the amount
obtained through such reletting, less the reasonable costs and expenses thereof,
including reasonable attorney's fees, shall exceed the rent herein reserved,
Lessee shall have no right to such excess. Any such notice shall specifically
refer to this Paragraph 15 and shall specify the default claimed.

Lessor's remedies as specified in this Lease Agreement are cumulative and are
not intended to preclude any other remedies or means of redress to which Lessor
may lawfully be entitled at any time, and Lessor may invoke any remedy allowed
at law or in equity as if specified remedies were not provided for in this Lease
Agreement.

16. ACCELERATIQN OF RENT UPON DEFAULT: It is hereby mutually agreed, that not
withstanding anything to the contrary herein contained, the said Leased Premises
are demised for rental of $63,360.00 for the entire said term of three (3) years
payable at the time of the making of this Lease Agreement, and that the
provisions therein contained for the payment of said Rent in installments are
for the convenience of Lessee only, and that, upon default in payment of the
rent in installments, as herein allowed for more than thirty (30) days, then the
whole of the Rent hereby reserved for the whole of the said Lease Term and then
remaining unpaid shall at once become due and payable, without notice or demand.



                                       18



<PAGE>   19
17. SUBORDINATION: A) This Lease Agreement is subject and subordinate to any
mortgages now or hereafter affecting or covering the Leased Premises and all or
any part of the Premises, and to any and all renewals, modifications,
consolidations, replacements and extensions of such leases and mortgages. This
clause shall be self-operative and no further instrument of subordination shall
be required. In confirmation of such subordination, Lessee agrees to execute any
instrument which may be deemed necessary or desirable by Lessor and reasonably
acceptable to Lessee to effectuate the subordination of this Lease Agreement to
any such mortgage.

        B) Lessee shall attorn to and recognize a successor Lessor, whether
through possession or foreclosure action or sale, as Lessee's landlord under
this Lease Agreement and shall promptly execute and deliver any instrument,
reasonably acceptable to Lessee, that such successor Lessor may reasonably
request to evidence such "non-disturbance agreement" under which Lessee's use
and occupancy of the Leased Premises and Lessee's rights under this Lease
Agreement will not be disturbed so long as Lessee observes and performs the
terms and conditions on Lessee's part to be performed under this Lease
Agreement.

18.  SUBLETTING AND ASSIGNMENT:

     A) Lessee shall not have the right to sublet or assign the Leased Premises
     except on the following terms and conditions:

                1) Such subletting or assignment shall not relieve the Lessee
                from its duty to perform fully all of the agreements, covenants
                and conditions set forth in this Lease Agreement or any
                Guarantor from the obligations of any Guaranty executed and
                delivered in connection with this Lease Agreement.

                2) The Lessee shall first obtain the Lessor's written consent to
                the subletting or assignment in each instance.

                3) The Lessee shall provide the name of the proposed sublessee
                or assignee, the terms and conditions of the proposed subletting
                or assignment, the nature and character of the businness of the
                proposed sublessee or assignee, and the banking, financial and
                other credit information relating to the proposed sublessee
                reasonably sufficient to enable Lessor to determine the
                financial responsibility of said proposed sublessee or assignee.

                4) Upon the receipt of such request from Lessee, Lessor shall
                have an option, to be exercised in writing within forty-five
                (45) days thereafter, to terminate this Lease Agreement
                effective on a date set forth in Lessor's notice of termination,
                which shall not be less than thirty (30) days nor more than one
                hundred twenty (120) days following the service upon Lessee of
                Lessor's notice of termination (the "Termination Date").

                5) In the event Lessor shall exercise such option to terminate
                this Lease Agreement, this Lease Agreement shall expire on the
                Termination Date as if that date had been originally fixed as
                the expiration date of the term herein granted and Lessee shall
                surrender possession of the entire Leased Premises on the
                Termination Date in accordance with the provisions of this Lease
                Agreement.



                                       19



<PAGE>   20
        B) If Lessor shall not exercise its option within the period aforesaid,
        then Lessor's consent to such request shall not be unreasonably withheld
        but will be given only in the following conditions acknowledged by
        Lessee to be reasonable and proper:

                1) That the subletting or assignment is for part of or the
                entire Leased Premises only;

                2) That the subletting or assignment shall be to a sublessee
                whose occupancy will be in keeping with the dignity and
                character of the then use and occupancy of the Premises by
                other lessees and whose occupancy will not be more objectionable
                or more hazardous than that of Lessee herein. In no event shall
                any subletting or assignment be permitted to a school of any
                kind or an employment or placement agency; or governmental or
                quasi-governmental agency;

                3) That the subletting or assignment shall not be to any lessee,
                sublessee or assignee of any leased space in the Premises of
                which the Leased Premises form a part;

                4) That the subletting or assignment shall not be advertised at
                a lower rental rate than that being charged by Lessor at the
                time for similar space in the Premises;

                5) That the sublease or assignment will expressly prohibit
                assignment of the Lease Agreement or further subletting by the
                sublessee without Lessor's written consent.

                6) If this Lease Agreement shall be assigned, or if the Leased
                Premises or any part thereof, be sublet or occupied by any
                person or persons other than Lessee, Lessor may, after default
                by Lessee, collect Rent from the assignee, subtenant or
                occupant, and apply the net amount collected to the rent herein
                reserved, but no such assignment, subletting, occupancy or
                collection of Rent shall be deemed a waiver of the covenants
                contained in this Lease Agreement, nor shall it be deemed
                acceptance of the assignee, subtenant or occupant as a tenant or
                a release of Lessee from the full performance by Lessee of all
                of the terms, conditions and covenants of this Lease Agreement.

        C)      Notwithstanding the foregoing, Lessee may, without Lessor's
                prior written consent, but with at least ten (10) days prior
                written notice and without being subject to Lessor's termination
                rights under subsections 18(A)(4) and 18(A)(5) of this Lease
                Agreement, sublet the Leased Premises or assign this Lease
                Agreement to (i) a subsidiary, affiliate, division or
                corporation controlling, controlled by or under common control
                with Lessee, (ii) a successor corporation related to Lessee by
                merger, consolidation, nonbankruptcy reorganization, or
                governmental action, or (iii) a purchaser of substantially all
                of Lessee's assets. A sale or transfer of Lessee's capital stock
                shall not be deemed an assignment, subletting or any other
                transfer of the Lease Agreement or the Leased Premises.

19. RECORDATION: Lessee and Lessor agree that they will not record this Lease
Agreement nor any memorandum thereof

20. SURRENDERS AND WAIVERS: When this Lease Agreement shall terminate in
accordance with the terms thereof, Lessee shall quietly and peaceably deliver up
possession to Lessor without notice from Lessor other than as may be
specifically required by any provision of this Lease Agreement. Lessee expressly
waives the benefit of all laws now or hereafter in force requiring notice



                                       20



<PAGE>   21
from Lessor with respect to termination. Lessee shall deliver up possession of
the Leased Premises in as good order, repair, and condition as the same are in
at the beginning of the term of this lease Agreement except for reasonable wear
and tear, casualty, condemnation and hazardous substances not caused by Lessee.
The cost of repairing any damage to the Leased Premises arising from the removal
of Lessee's property, shall be paid by Lessee. Lessee's obligation to observe or
perform this provision shall survive the expiration or other termination of the
term of this Lease Agreement. All property of Lessee not removed by it shall be
deemed abandoned.

The Lessee, for itself and on behalf of any person claiming through or under it,
including creditors of all kinds, does hereby waive and surrender all rights and
privileges which it might have under or by reason of any present or future law
to redeem the Leased Premises or to have a continuance of this Lease Agreement
for the Lease Term thereof after being dispossessed or ejected therefrom by
process of law or under the provisions of this Lease Agreement or after any
termination of this lease as herein provided. Lessee also waives the provisions
of any law relating to notice or delay in levy of execution in case of an
eviction or dispossession of Lessee for non-payment of rental or of any other
law of like import now or hereafter in effect.

Lessee shall not interpose any counterclaim or claim of set-off of any nature or
description whatsoever, except for any mandatory counterclaims in any action or
summary proceeding for the non-payment of the Fixed Rent or Additional Rent.

Except for an action, proceeding or counterclaim brought by either Lessor or
Lessee against the other for personal injury or property damage, Lessor and
Lessee hereby waive trial by jury in any action or proceeding or counterclaim
brought by either against the other on any matter whatsoever arising out of or
in any way connected with this lease, the relationship of Lessor and Lessee, or
Lessee's use or occupancy of the Leased Premises, including any emergency or
other statutory remedy with respect thereto.

21. NOTICE: All notices of any nature referred to in this Lease Agreement shall
be in writing and shall be deemed to have been given (i) when presented
personally, (ii) three (3) business days after being deposited in a regularly
maintained receptacle for the United States Postal Services, postage prepaid,
registered or certified, return receipt requested or (iii) the next business day
after delivery by any reputable overnight delivery service (ie., Federal
Express, Airborne, etc.) to the respective addresses set forth below or to such
other address as the respective parties hereto may designate in writing:

To the Lessor:

               Rotterdam  Ventures,  Inc.  d/b/a  Galesi  Enterprises  
               c/o  Galesi  Management Corporation 
               100 State Street
               Albany, New York, 12207

With a copy to:

               Rotterdam Ventures, Inc.
               Rotterdam Industrial Park, Building 6
               Schenectady, New York 12306
               Attn: General Counsel

or to such other address as Lessor may hereafter designate by notice to Lessee.



                                       21



<PAGE>   22
To the Lessee:

               Pete's Brewing Company
               514 High Street
               Palo Alto, California 94301 
               Attn: Human Resources



or to such other address as Lessee may hereafter designate by notice to Lessor.

22. BROKERAGE: Lessee hereby warrants and represents that Quadrelle Realty and
Newmark Real Estate Company are the sole brokers concerned with this Lease
Agreement. Lessor agrees that it will pay the commission of said brokers in
accordance with separate agreements. Lessee shall indemnify and hold Lessor
harmless against and from any and all claims for any brokerage commissions or
other loss, damages, costs, expenses and liabilities, including, without
limitation, attorneys' fees arising out of any misrepresentation or alleged
misrepresentation of the foregoing representation.

23. ENTIRE AGREEMENT: The whole and entire agreement of the parties is set forth
in this Lease Agreement and the parties are not bound by any agreements,
understandings or conditions otherwise than as expressly set forth and
stipulated hereunder.

24. CHANGES, MODIFICATIONS OR AMENDMENTS: This Lease Agreement may not be
changed, modified, discharged or terminated orally or in any other manner than
by an agreement signed by the parties hereto or their respective successors and
assigns.

25. SEVERABILITY. If any provision of this Lease Agreement or its application to
any situation, shall be invalid or unenforceable to any extent, the remainder of
this Lease Agreement, or the application thereof to situations other than that
as to which it is invalid or unenforceable, shall not be affected thereby, and
every provision of this Lease Agreement shall be valid and enforceable to the
fullest extent permitted by law.

26. COVENANTS TO BIND RESPECTIVE PARTIES: The covenants, agreements, conditions
and provisions of this Lease Agreement shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective heirs, distributors,
executors, administrators, successors and permitted assigns, except that no
assignment or subletting in violation of the provisions of Paragraph 18 shall
operate to vest any rights in any successor assignee or subtenant.

27. BUILDING NAME: The Lessor, for itself and its successors and assigns
reserves the right to change the name of the Premises, now generally known as
145 Huguenot Street, or the address of the Premises or to designate additional
addresses therefore, on Notice to Lessee. Lessee shall not use such name, or any
similar name, on its letterhead or any advertising material.

28. CERTIFICATE: Lessee and Lessor agree, at any time and from time to time,
upon not less than ten (10) days prior request by one party to the other, to
execute, acknowledge and deliver a statement in writing certifying that this
Lease Agreement is unmodified and is in full force and effect (or if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications), the commencement date of this Lease Agreement, of
any other existing status of the Lease Agreement, and the dates to which the
rent and other charges have been paid in advance, if any, it being intended that
any such statement delivered pursuant to this Paragraph may be relied upon by a
prospective purchaser or mortgagee of the Leased Premises.



                                       22



<PAGE>   23
29. LESSEES REPRESENTATIONS: Lessee represents to Lessor that it has made a
thorough examination and inspection of the Leased Premises and is familiar with
the condition of every part thereof. Lessee agrees that it enters into this
Lease Agreement without any representations or warranties by Lessor or any of
its agents, representatives, employees or servants or by any other person as to
the condition of the Leased Premises, and Lessee agrees to accept the Leased
Premises on the commencement date "as is" in its then condition, without any
alterations, improvements, repairs or decorations to be made by Lessor, except
as hereinabove otherwise provided.

30. LESSE'S REMEDIES: Lessee shall look only to Lessor's estate and property in
the Premises of which the Leased Premises are a part (or the proceeds thereof)
for the satisfaction of Lessee's remedies for the collection of a judgment (or
other judicial process) requiring the payment of money by Lessor in the event of
any default by Lessor hereunder, and no other property or assets of Lessor or
its partners or principals, disclosed or undisclosed, shall be subject to levy,
execution, or other enforcement procedure for the satisfaction of Lessee's
remedies under or with respect to this Lease Agreement, the relationship of
Lessor and Lessee hereunder or Lessee's use and occupancy of the Leased
Premises.

31. SECURITY: Lessee has deposited with Lessor the sum of $3,520.00 as security
for the full and faithful performance and observance by Lessee of Lessee's
obligations under this Lease Agreement upon execution of said Lease Agreement,
beyond any applicable notice and cure periods. If Lessee defaults in the full
and prompt payment and performance of any of Lessee's obligations under this
Lease Agreement including, without limitation, the payment of Fixed Rent and
Additional Rent, Lessor may use or apply the whole or any part of the security
so deposited to the extent required for the payment of any Fixed Rent and
Additional Rent or any other sum as to which Lessee is in default, beyond any
applicable notice and cure periods or for any sum which Lessor may expend or
may be required to expend by reason of Lessee's defaults, beyond any applicable
notice and cure periods. If Lessor shall so use or apply the whole or any part
of the security, Lessee shall, upon demand, immediately deposit with Lessor a
sum equal to the amount so used, or applied as security aforesaid. If Lessee
shall fully and faithfully comply with all of Lessee's obligations under this
lease, the security or any balance thereof shall be returned to Lessee upon the
termination of the lease and after delivery to the Lessor of entire possession
of the Leased Premises. In the event of any sale of Lessor's interest in the
Premises, Lessor shall have the right to transfer the security to the vendee
and Lessor shall thereupon be released by Lessee from all liability for the
return of such security. The security deposit shall be deposited by Lessor in an
interest bearing account and interest earned by the security deposit is for the
account of the Lessee.

32. GOVERNING LAW: The terms and conditions of this lease shall be construed and
interpreted under the laws of the State of New York.



                                       23



<PAGE>   24
        IN WITNESS WHEREOF, the undersigned have executed this Lease Agreement
as of the date first above written.

                                     ROTTERDAM VENTURES, INC.
                                     d/b/a GALESI ENTERPRISES
                                     LESSOR

                                     BY:___________________________
                                     Name:_________________________
                                     Title:________________________




                                     PETE'S BREWING COMPANY
                                     LESSEE
                                     BY:/s/ JEFFREY A. ATKINS
                                        ---------------------------
                                     Name:Jeffrey A. Atkins
                                        ---------------------------
                                     Title:CEO
                                        ---------------------------



                                       24



<PAGE>   25
                                ACKNOWLEDGEMENTS

STATE OF NEW YORK  )
                   )  SS.:
COUNTY OF          ) 


        On this _____ day of ________, 1997, before me personally came
_____________________, to me known, and known to me to be the
______________________ of Rotterdam Ventures, Inc., the corporation described in
and which executed the within instrument, who being by me duly sworn did depose
and say that the said ______________________ resides at __________________, and
the he/she signed his/her name thereto by order of the Board of Directors of
said corporation.


                                  -------------------------------
                                  Notary Public



STATE OF NEW YORK  )
                   )  SS.:
COUNTY OF          ) 


        On this ____ day of ________________, 1997, before me personally came
_________________________, to me known, and known to me to be the
_____________________ of _______________________, the ___________________
described in and which executed the within instrument, who being by me duly
sworn did depose and say that the said ___________________ resides at
______________________, and the he/she signed his/her name thereto by order of
the _________________________ of said _______________________.


                                  -------------------------------
                                  Notary Public



                                       25



<PAGE>   26
                           EXHIBIT A - RENTAL SCHEDULE


1320 square feet - 145 Huguenot Street

Tenant:                        Pete's Brewing Company

Contact:                       Bill Brennen

Lease Term:                    Three (3) Years

Lease Rates:                   Year 1-3  $16.00 per square foot
                                         $2.00 per square foot per year
                                         electrical 

for
Parking:                       One (1) permanent on-site space and One (1)
                               temporary on-site space. Lessor may terminate 
                               the temporary on-site space upon sixty (60) days
                               notice to Lessee.


PREPARED July 25,1997



                                       26





<PAGE>   27
                               EXHIBIT B - DRAWING



                                  [FLOOR PLAN]





                                       27




<PAGE>   28
                             EXHIBIT C - WORK LETTER



                                   WORK LETTER
                               145 Huguenot Street
                          New Rochelle, New York, 10801


1       Lessor will install interior wall partitions (5/8 inch sheetrock) as per
        drawing.

2.      Lessor will paint entire Leased Premises two (2) coats, eggshell
        finish. Color to be chosen by Lessee.

3       Lessor will carpet entire Leased Premises with 20 oz. level loop
        carpeting. Color to be chosen by Lessee.

4.      Lessor will replace any discolored or broken ceiling tiles.

5.      Lessor will replace all burnt out bulbs.

6.      Lessor will change all locks.




                                       28



<PAGE>   29
                                   EXHIBIT D
                             RULES AND REGULATIONS


        1. The sidewalks, entrances, passages, courts or halls shall not be
obstructed by Lessee or used for any purpose other than ingress and egress to
and from the demised premises. Nothing shall be thrown out of windows or doors
or down passages of Premises.

        2. Movement of goods in or out of the Premises shall only be effected
through the rear entrance. No hand trucks, carts, etc., shall be used in the
Premises unless equipped with rubber tires and side guards.

        3. The skylights, windows, and doors that reflect or admit light and air
into the halls, or other public places in the Premises shall not be covered or
obstructed by Lessee, nor shall anything be placed on the window sills.

        4. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
rubbish, rags or other substances shall be thrown therein. All damages resulting
from any misuse of the fixtures shall be borne by the Lessee who, or whose
employees, agents, visitors or licensees, shall have caused the same.

        5. No Lessee shall make, paint, drill into, or in any way deface any
part of the demised premises or the Premises of which they form a part. No
boring, cutting or stringing of wires shall be permitted, except with the prior
written consent of the Lessor, and as the Lessor may direct.

        6. No Lessee shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
premises or buildings.

        7. No Lessee or any of Lessee's employees, agents or visitors or
licensees, shall bring or keep upon the demised premises any inflammable,
combustible or explosive fluid, chemical or substance, other than those used in
the normal course of business, or allow any unusual or objectionable odors to be
produced upon the demised premises, or permit animals or birds to be brought or
kept on the premises.

        8. No machine may be operated on the premises without the written
consent of the Lessor, except for normal business machines. Machinery shall be
placed in approved settings to absorb or prevent any noise or annoyance.

        9. No Lessee shall place a load upon any floor of the Premises exceeding
the floor load per square foot area which such floor was designed to carry, and
all floor loads shall be evenly distributed. All removals or deliveries of any
safes, freight, furniture or bulky matter of any description must take place
during the hours which the Lessor or Lessor's agent may determine from time to
time, The Lessor reserves the right to prescribe the weight and position of all
safes, which must be placed so as to distribute the weight. The Lessor reserves
the right to inspect all freight to be brought into the Premises and to exclude
from the Premises all freight which violates any of the Rules and Regulations.

        l0. Canvassing, soliciting and peddling in the Premises are prohibited
and each Lessee shall cooperate to prevent the same.

        11. No air conditioning unit or system, portable electric heater or
similar apparatus shall be installed or used by any Lessee without the written
consent of the Lessor.

        12. Unless specifically designated within the Premises by the Lessor,
the Premises , Leased Premises and common areas have been designated by Lessor
as non-smoking areas. No smoking will be permitted in the Premises , unless
Lessor has designated a specific smoking area.

        13. Lessee shall not permit its employees, agents, visitors or licensees
to loiter within the Premises or on the adjoining sidewalks.

        14. Lessor reserves the right to change, amend or otherwise revise the
Premises Standard rules and regulations as Lessor deems reasonable and
necessary.



                                       29



<PAGE>   30
        15. SORTING AND SEPARATION OF REFUSE AND TRASH

               (a) Compliance by Lessee. Lessee covenants and agrees, at its
sole cost and expense, to comply with all applicable present and future laws,
orders, and regulations of all state, federal, municipal, and local
governments, departments, commissions, and boards regarding the collection,
sorting, separation, and recycling of waste products, garbage, refuse, and
trash. Lessee shall sort and separate such waste products, garbage, refuse, and
trash into such categories as provided by law. Each separately sorted category
of waste products, garbage, refuse, and trash shall be placed in separate
receptacles reasonably approved by Lessor. Such separate receptacles may, at
Lessor's option, be removed from the Leased Premises in accordance with a
collection schedule prescribed by law.

               (b) Lessor's Rights in Event of Noncompliance. Lessor reserves
the right to refuse to collect or accept from Lessee any waste products,
garbage, refuse, or trash that is not separated and sorted as required by law,
and to require Lessee to arrange for such collection at Lessee's sole cost and
expense, utilizing a contractor satisfactory to Lessor. Lessee shall pay all
costs, expenses, fines, penalties, or damages that may be imposed on Lessor or
Lessee by reason of Lessee's failure to comply with the provisions of this
Paragraph, and, at Lessee's sole cost and expense, shall indemnify, defend, and
hold Lessor harmless (including legal fees and expenses) from and against any
actions, claims, and suits arising from such noncompliance, utilizing counsel
reasonably satisfactory to Lessor.



                                       30



<PAGE>   31
                                    EXHIBIT E
                       CLEANING/JANITORIAL SPECIFICATIONS
                               145 Huguenot Street
                             New Rochelle, New York

A.    GENERAL - DAILY (MONDAY THROUGH FRIDAY EXCEPT HOLIDAYS)

        1.      Common Area:

                a.      Wash all entrance door and all adjacent glass
                        (interior/exterior).

                b.      Vacuum mats, sweep/mop floors, maintain walls, cigarette
                        urns, interior surfaces of lobby, elevators, and
                        corridors (including entry from parking lot). 

                c.      Clean and wipe all water coolers.

                d.      Lavatory floors swept and mopped; all basins, bowls,
                        urinals, and toilet seats to be cleaned with
                        disinfectant; all mirrors to be washed; and wash all
                        tile walls, dividing partitions and doors.

                e.      Empty and clean all waste receptacles; fill all
                        dispensers with supplies (to be furnished by Lessor).

                f.      Maintain all storage/janitor rooms in clean or orderly
                        condition.

                g.      Collect all rubbish and place in designated area for 
                        disposal.

        2.   Leased Premises:

                a.      Tile floors swept and dust mopped.

                b.      Dust all office furniture and furnishings.

                c.      Clean ashtrays and waste receptacles.

                d.      Clean entrance doors, doorways and wall areas adjoining
                        switches/outlets.

                e.      Vacuum all carpet as required.

                f.      Collect all rubbish and place in designated area for
                        disposal.

B.    SPECIAL - FREQUENCY AS NOTED

        1.      Common Area:

                a.      Tile floors swept and dust-mopped.

                b.      Weekly, high dust all walls, partitions, doorways,
                        moldings, HVAC louvres, and wall fixtures.

                c.      Weekly, low dust window sills and baseboards.

        2.      Leased Premises: 

                a.      Weekly, high dust all walls, partitions, doorways,
                        moldings, HVAC louvers, wall hangings, and light
                        fixtures.

                b.      Weekly, low dust all window sills and baseboards.

                c.      Bi-annually, wash all perimeter windows, inside and
                        outside.

                d.      Annually, machine scrub all tile floors and apply high-
                        gloss, no-skid, water- resistant polish.

                e.      Annually, hot water extract all carpeting.



                                       31