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                                                                   EXHIBIT 10.16

             [LOGO OF AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION]

            STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
               (Do not use this form for Multi-Tenant Property)

1. BASIC PROVISIONS ("BASIC PROVISIONS")

   1.1  PARTIES: This Lease ("LEASE"), dated for reference purposes only, August
                                                                          ------
8, 1996, is made by and between Pacifica Northeast Industrial Partnership, a 
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Colorado General Partnership ("LESSOR") AND Viking Office Products, Inc., a 
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California Corporation ("LESSEE"), (collectively the "PARTIES," or individually 
----------------------
a "PARTY").

   1.2  PREMISES: That certain real property, including all improvements therein
or to be provided by Lessor under the terms of this Lease, and commonly known by
the street address of 3871 Revere Street, Denver, Colorado 80239, located in the
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County of Denver, State of Colorado and generally described as (describe briefly
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the nature of the property) an approximately 75,265 square foot single tenant, 
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free-standing industrial building ("PREMISES"). (See Paragraph 2 for further 
---------------------------------
provisions.)

   1.3  TERM: Seven (7) years and -0- months ("ORIGINAL TERM") commencing   
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January 1, 1997 ("COMMENCEMENT DATE") and ending December 31, 2003 ("EXPIRATION 
---------------                                  -----------------
DATE"). (See Paragraph 3 for further provisions.)

   1.4  EARLY POSSESSION: November 1, 1996 ("Early Possession Date"). (See 
                          ----------------  
Paragraphs 3.2 and 3.3 for further provisions.)

   1.5  BASE RENT: $ see below per month ("BASE RENT"), payable on the first 
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(1st) day of each month commencing January 1, 1997 for the Primary Lease Term.
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Base Rent shall be as follows: Years 1 and 2: $18,502.65 per month; Years 3 and 
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4: $20,070.67 per month; Years 5 and 6: $21,325.08 per month; Year 7: $22,579.50
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per month (See Paragraph 4 for further provisions.)
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[_] If this box is checked, there are provisions in this Lease for the Base 
Rent to be adjusted.

   1.6  BASE RENT PAID UPON EXECUTION: $ 18,502.65 as Base Rent for the period
                                        ----------
January 1st through January 31, 1997.
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   1.7  SECURITY DEPOSIT: $ -0- ("SECURITY DEPOSIT"). (See Paragraph 5 for 
                           ----
further provisions.)

   1.8  PERMITTED USE: general office, warehousing and distribution as related
                       ---------------------------------------------------------
to Lessee's office supply operations (See Paragraph 6 for further provisions.)
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   1.9  INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise stated 
herein. (See Paragraph 8 for further provisions.)

   1.10 REAL ESTATE BROKERS: The following real estate brokers (collectively, 
the "BROKERS") and brokerage relationships exist in this transaction and are 
consented to by the Parties (check applicable boxes):
                                                                      represents
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[_] Lessor exclusively ("LESSOR'S BROKER"); [_] both Lessor and Lessee, and 
Pacifica Holding Company represents
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[_] Lessee exclusively ("LESSEE'S BROKER"); [xx] both Lessee and Lessor. (See 
Paragraph 15 for further provisions.)

   1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be 
guaranteed by N/A ("GUARANTOR"). (See Paragraph 37 for further provisions.)
              ---

   1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of 
Addendum "A", Addendum "B" - Rules and Regulations, Exhibit "A" Site Plan all 
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of which constitute a part of this Lease.

2. PREMISES.

   2.1  LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from 
Lessor, the Premises, for the term, at the rental, and upon all of the terms, 
covenants and conditions set forth in this Lease. Unless otherwise provided 
herein, any statement of square footage set forth in this Lease, or that may 
have been used in calculating rental, is an approximation which Lessor and 
Lessee agree is reasonable and the rental based thereon is not subject to 
revision whether or not the actual square footage is more or less.

   2.2  CONDITION. Lessor shall deliver the Premises to Lessee clean and free of
debris on the Commencement Date and warrants to Lessee that the existing 
plumbing, fire sprinkler system, lighting, air conditioning, heating, and 
loading doors, if any, in the Premises, other than those constructed by Lessee, 
shall be in good operating condition on the Commencement Date and that the roof 
shall be structurally sound and free of leaks. If a non-compliance with said 
warranty exists as of the Commencement Date, Lessor shall, except as otherwise 
provided in this Lease, promptly after receipt of written notice from Lessee 
setting forth with specificity the nature and extent of such non-compliance, 
rectify same at Lessor's expense. If Lessee does not give Lessor written notice
of a non-compliance with this warranty within thirty (30) days after the
Commencement Date, correction of that non-compliance shall be the obligation of
Lessee at Lessee's sole cost and expense.

   2.3  COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor 
warrants to Lessee that the improvements on the Premises comply with all 
applicable covenants or restrictions of record and applicable building codes, 
regulations and ordinances in effect on the Commencement Date. Said warranty 
does not apply to the use to which Lessee will put the Premises or to any 
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee, but shall apply to apply to Lessor's performance to the
tenant improvement work set forth in Addendum "A", Paragraph 2. If the Premises
do not comply with said warranty, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the same
at Lessor's expense. If Lessee does not give Lessor written notice of a non-
compliance with this warranty within six (6) months following the Commencement
Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee's sole cost and expense.

   2.4  ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has been
advised by the Brokers to satisfy itself with respect to the condition of the 
Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written representations or warranties with respect to the said
matters other than as set forth in this Lease.

   2.5  LESSEE PRIOR OWNER/OCCUPANT.

3. TERM. 

   3.1  TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

   3.2  EARLY POSSESSION. If Lessee totally or partially occupies the Premises 
prior to the Commencement Date, the obligation to pay Base Rent shall be abated 
for the period of such early possession. All other terms of this Lease, however,
(including but not limited to the obligations to pay Real Property Taxes and 
insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such early possession shall not affect nor advance the Expiration 
Date of the Original Term.

                                                             Initials 
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(C) 1990--AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION             FORM 204N-3/90





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   3.3  DELAY IN POSSESSION. If for any reason Lessor cannot deliver possession 
of the Premises to Lessee as agreed herein by the Early Possession Date if one 
is specified in Paragraph 1.4, or, if no Early Possession Date is specified, by 
the Commencement Date, Lessor shall not be subject to any liability therefor, 
nor shall such failure affect the validity of this Lease, or the obligations of 
Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any 
other obligation of Lessee under the terms of this Lease until Lessor delivers 
possession of the Premises to Lessee. If possession of the Premises is not 
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee 
may, at its option, by notice in writing to Lessor with thirty (30) days 
thereafter, cancel this Lease, in which event the Parties shall be discharged 
from all obligations hereunder; provided, however, that if such written notice 
by Lessee is not received by Lessor within said thirty (30) day period, Lessee's
right to cancel this Lease shall terminate and be of no further force or effect.
Except as may be otherwise provided, and regardless of when the term actually 
commences, if possession is not tendered to Lessee when required by this Lease 
and Lessee does not terminate this Lease, as aforesaid, the period free of the 
obligation to pay Base Rent, if any, that Lessee would otherwise have enjoyed 
shall run from the date of delivery of possession and continue for a period 
equal to what Lessee would otherwise have enjoyed under the terms hereof, but 
minus any days of delay caused by the acts changes or omissions of Lessee.

4. RENT.

   4.1  BASE RENT. Lessee shall cause payment of Base Rent and other rent or 
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before 
the day on which it is due under the terms of this Lease. Base Rent and all 
other rent and charges for any period during the term hereof which is for less 
than one (1) full calendar month shall be prorated based upon the actual number 
of days of the calendar month involved. Payment of Base Rent and other charges 
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.

5. SECURITY DEPOSIT.

6. USE.

   6.1  USE. Lessee shall use and occupy the Premises only for the purposes set 
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a 
manner that creates waste or a nuisance, or that disturbs owners and/or 
occupants of, or causes damage to, neighboring premises or properties.

   6.2  HAZARDOUS SUBSTANCES. See Addendum "B", Article II.

   6.3  LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any manner
to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee shall,
within ten (10) days after receipt of Lessor's written request, provide Lessor
with copies of all documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee or the
Premises to comply with any Applicable Law.

   6.4  INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise with 24 hours advanced verbal notice, for
the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease and all Applicable Laws (as defined in
Paragraph 6.3), and to employ experts and/or consultants in connection therewith
and/or to advise Lessor with respect to Lessee's activities, including but not
limited to the installation, operation, use, monitoring, maintenance, or removal
of any Hazardous Substance or storage tank on or from the Premises. The costs
and expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS.

   7.1  LESSEE'S OBLIGATIONS.

        (a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as to
condition), 2.3 (Lessor's warranty as to compliance with covenants, etc), 7.2
(Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, non-structural (whether or not such portion of the Premises requiring
repair, or the means of repairing the same, are reasonably or readily accessible
to Lessee, and whether or not the need for such repairs occurs

                                                                 Initials ______

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as a result of Lessee's use, any prior use, the elements or the age of such
portion of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities, fire
sprinkler and/or standpipe and hose or other automatic fire extinguishing
system, including fire alarm and/or smoke detection systems and equipment, fire
hydrants, fixtures, walls (interior and exterior surfaces), ceilings, normal
roof maintenance not to exceed $15,000 in any lease year, floors, windows,
doors, plate glass, skylights, landscaping, driveways, parking lots, fences,
signs, sidewalks and parkways located in, on, about, or adjacent to the
Premises. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under or about the Premises (including through the plumbing
or sanitary sewer system) and shall promptly at Lessee's expense, take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of, the Premises, the elements
surrounding same, or neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any Hazardous Substance
and/or storage tank brought onto the Premises by or for Lessee or under its
control. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. continued, See Addendum "A", Paragraph 4

      (b) Lessee shall, at Lessee's sole cost and expense, procure and maintain 
contracts, with copies to Lessor, in customary form and substance for, and with 
contractors specializing and experienced in, the inspection, maintenance and 
service of the following equipment and improvements, if any, located on the 
Premises: (i) heating, air conditioning and ventilation equipment, (ii) boiler, 
fired or unfired pressure vessels, (iii) fire sprinkler and/or standpipe and 
hose or other automatic fire extinguishing systems, including fire alarm and/or
smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and 
drain maintenance and (vi) asphalt and parking lot maintenance.

  7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of Lessor 
contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3 
(relating to compliance with covenants, restrictions and building code), 9 
(relating to destruction of the Premises) and 14 (relating to condemnation of 
the Premises), it is intended by the Parties hereto that Lessor have no 
obligation, in any manner whatsoever, to repair and maintain the Premises, the 
improvements located thereon, or the equipment therein, whether structural or 
non structural, all of which obligations are intended to be that of the Lessee 
under Paragraph 7.1 hereof. It is the intention of the Parties that the terms of
this Lease govern the respective obligations of the Parties as to maintenance 
and repair of the Premises. Lessee and Lessor expressly waive the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the 
terms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of, any
needed repairs.

  7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS

      (a) Definitions; Consent Required. The term "Utility Installations" is
used in this Lease to refer to all carpeting, window coverings, air lines, power
panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises. The
term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor as defined
in Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations in, on, under or about the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility Installations to the
interior of the Premises (excluding the roof), as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof or
any existing walls, and the cumulative cost thereof during the term of this
Lease as extended does not exceed $50,000.

      (b) CONSENT. Any Alterations or Utility Installations that Lessee shall 
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with proposed detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities, (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon, and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and in compliance with all Applicable Law.
Lessee shall promptly upon completion thereof furnish Lessor with as-built plans
and specifications therefor. Lessor may (but without obligation to do so)
condition its consent to any requested Alteration or Utility Installation that
costs $50,000 or more upon Lessee's providing Lessor with a lien and completion
bond in an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an additional
Security Deposit with Lessor under Paragraph 36 hereof.

      (c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor or 
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanics' or 
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises.

  7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

      (a) OWNERSHIP. Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4, all
Alterations and Utility Additions made to the Premises by Lessee shall be the
property of and owned by Lessee, but considered a part of the Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be the owner
of all or any specified part of the Lessee Owned Alterations, and Utility
Installations. Unless otherwise instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.

      (b) REMOVAL. Unless Lessor has elected to become the owner of such Lessee 
owned Alterations or Utility Installations, Lessor may require that any or all 
Lessee Owned Alterations or Utility Installations be removed by the expiration 
or earlier termination of this Lease, notwithstanding their installation may 
have been consented to by Lessor. Lessor may require the removal at any time of 
all or any part of any Lessee Owned Alterations or Utility Installations made 
without the required consent of Lessor.

      (c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by the end
of the last day of the Lease term or any earlier termination date, with all of
the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and state of repair, ordinary wear and tear
excepted, "Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice or by Lessee
performing all of its obligations under this Lease. Except as otherwise agreed
or specified in writing by Lessor, the Premises, as surrendered, shall include
the Utility Installations. The obligation of Lessee shall include the repair of
any damage occasioned by the installation, maintenance or removal of Lessee's
Trade Fixtures, furnishings, equipment, and Alterations and/or Utility
installations, as well as the removal of any storage tank installed by or for
Lessee, and the removal, replacement, or remediation of any soil, material,
or ground water contaminated by Lessee, all as may then be required by
Applicable Law and/or good practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to its obligation to
repair and restore the Premises per this Lease.

8. INSURANCE; INDEMNITY

   8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee is
the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor in excess of $1,000,000 per occurrence. Premiums for
policy periods commencing prior to or extending beyond the Lease term shall be
prorated to correspond to the Lease term. Payment shall be made by Lessee to 
Lessor monthly in advance with payment of Base Rent.

   8.2 LIABILITY INSURANCE
       (a) CARRIED BY LESSEE. LESSEE shall obtain and keep in force during the
term of this Lease a Commerical General Liability policy of insurance protecting
Lessee and Lessor (as an additional insured) against claims for bodily injury,
personal injury and property damage based upon, involving or arising out of the 
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in any amount less than $1,000,000 per occurrence with an
"Additional Insured-Managers or Lessors of Premises" Endorsement and contain the
"Amendment of the Pollution Exclusion" for damage caused by heat, smoke or fumes
from a hostile fire. The policy shall not contain any intra-insured exclusions
as between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "insured contract" for the performance
of Lessee's indemnity obligations under this Lease. The limits of said insurance
required by this Lease or as carried by Lessee shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
Insurance to be carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered
excess Insurance only.

       (b) CARRIED BY LESSOR. In the event Lessor is the Insuring Party, Lessor 
shall also maintain liability insurance described in Paragraph 8.2(a), above, in
addition to, and not in lieu of, the insurance required to be maintained by 
Lessee. Lessee shall not be named as an additional insured therein.
      
   8.3 PROPERTY INSURANCE--BUILDING, IMPROVEMENTS AND RENTAL VALUE.

       (a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and 
keep in force during the term of this Lease a policy or policies in the name of 
Lessor, with loss payable to Lessor and to the holders of any mortgages, deeds 
of trust or ground leases on the Premises ("Lender(s)"), insuring loss

                                                                Initials _______

                                    PAGE 3

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or damage to the Premises. The amount of such insurance shall be equal to the 
full replacement cost of the Premises, as the same shall exist from time to 
time, or the amount required by Lenders, but in no event more than the 
commercially reasonable and available insurable value thereof if, by reason of 
the unique nature or age of the improvements involved, such latter amount is 
less than full replacement cost. If Lessor is the Insuring Party, however, 
Lessee Owned Alterations and Utility Installations shall be insured by Lessee 
under Paragraph 8.4 rather than by Lessor. If the coverage is available and 
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake 
unless required by a Lender), including coverage for any additional costs 
resulting from debris removal and reasonable amounts of coverage for the 
enforcement of any ordinance or law regulating the reconstruction or 
replacement of any undamaged sections of the Premises required to be demolished 
or removed by reason of the enforcement of any building, zoning, safety or land 
use laws as the result of a covered cause of loss. Said policy or policies shall
also contain an agreed valuation provision in lieu of any coinsurance clause, 
waiver of subrogation, and inflation guard protection causing an increase in the
annual property insurance coverage amount by a factor of not less than the 
adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers 
for the city nearest to where the Premises are located.  If such insurance 
coverage has a deductible clause, the deductible amount shall not exceed $1,000 
per occurrence, and Lessee shall be liable for such deductible amount in the 
event of an Insured Loss, as defined in Paragraph 9.1(c).

          (b)  RENTAL VALUE.  The Insuring Party shall, in addition, obtain and 
keep in force during the term of this Lease a policy or policies in the name of 
Lessor, with loss payable to Lessor and Lender(s), insuring the loss of the full
rental and other charges payable by Lessee to Lessor under this Lease for one 
(1) year (including all real estate taxes, insurance costs, and any scheduled 
rental increases).  Said insurance shall provide that in the event the Lease is 
terminated by reason of an insured loss, the period of indemnity for such 
coverage shall be extended beyond the date of the completion of repairs or 
replacement of the Premises, to provide for one full year's loss of rental 
revenues from the date of any such loss.  Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of 
coverage shall be adjusted annually to reflect the projected rental income, 
property taxes, insurance premium costs and other expenses, if any, otherwise 
payable by Lessee, for the next twelve (12) month period.  Lessee shall be 
liable for any deductible amount in the event of such loss.

          (c)  ADJACENT PREMISES.  If the Premises are part of a larger 
building, or if the Premises are part of a group of buildings owned by Lessor 
which are adjacent to the Premises, the Lessee shall pay for any increase in the
premiums for the property insurance of such building or buildings if said 
increase in caused by Lessee's acts, omissions, use or occupancy of the 
Premises.

          (d)  TENANT'S IMPROVEMENTS.  If the Lessor is the Insuring Party, the 
Lessor shall not be required to insure Lessee Owned Alterations and Utility 
Installations unless the item in question has become the property of Lessor 
under the terms of this Lease.  If Lessee is the Insuring Party, the policy 
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.

     8.4  LESSEE'S PROPERTY INSURANCE.  Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or by endorsement to a 
policy already carried, maintain insurance coverage on all of Lessee's personal 
property, Lessee Owned Alterations and Utility Installations in, on, or about 
the Premises similar in coverage to that carried by the Insuring Party under 
Paragraph 8.3.  Such insurance shall be full replacement cost coverage with a 
deductible of not to exceed $1,000 per occurrence.  The proceeds from any such 
insurance shall be used by Lessee for the replacement of personal property or 
the restoration of Lessee Owned Alterations and Utility Installations.  Lessee 
shall be the Insuring Party with respect to the insurance required by this 
Paragraph 8.4 and shall provide Lessor with written evidence that such insurance
is in force.

     8.5  INSURANCE POLICIES.  Insurance required hereunder shall be in 
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender having a 
lien on the Premises, as set forth in the most current issue of "Best's 
Insurance Guide."  Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Paragraph 8.  If Lessee is
the Insuring Party, Lessee shall cause to be delivered to Lessor certified 
copies of policies of such insurance or certificates evidencing the existence 
and amounts of such insurance with the insureds and loss payable clauses as 
required by this Lease.  No such policy shall be cancellable or subject to 
modification except after thirty (30) days prior written notice to Lessor.  
Lessee shall at least thirty (30) days prior to the expiration of such 
policies, furnish Lessor with evidence of renewals or "insurance binders" 
evidencing renewal thereof, or Lessor may order such insurance and charge the 
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon 
demand.  If the Insuring Party shall fail to procure and maintain the insurance 
required to be carried by the Insuring Party under this Paragraph 8, the other 
Party may, but shall not be required to, procure and maintain the same, but at 
Lessee's expense.

     8.6  WAIVER OF SUBROGATION.  Without affecting any other rights or 
remedies, Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve 
the other, and waive their entire right to recover damages (whether in contract 
or in tort) against the other, for loss of or damage to the Waiving Party's 
property arising out of or incident to the perils required to be insured 
against under Paragraph 8. The effect of such releases and waivers of the right
to recover damages shall not be limited by the amount of insurance carried or
required, or by any deductibles applicable thereto.

     8.7  INDEMNITY.  Except for Lessor's negligence and/or breach of express 
warranties, Lessee shall indemnify, protect, defend and hold harmless the 
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and 
Lenders, from and against any and all claims, loss of rents and/or damages, 
costs, liens, judgments, penalties, permits, attorney's and consultant's fees, 
expenses and/or liabilities arising out of, involving, or in dealing with, the 
occupancy of the Premises by Lessee, the conduct of Lessee's business, any act, 
omission or neglect of Lessee, its agents, contractors, employees or invitees, 
and out of any Default or Breach by Lessee in the performance in a timely manner
of any obligation on Lessee's part to be performed under this Lease.  The 
forgoing shall include, but not be limited to, the defense or pursuit of any 
claim or any action or proceeding involved therein, and whether or not (in the 
case of claims made against Lessor) litigated and/or reduced to judgment, and 
whether well founded or not.  In case any action or proceeding be brought 
against Lessor by reason of any of the foregoing matters, Lessee upon notice 
from Lessor shall defend the same at Lessee's expense by counsel reasonably 
satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.  
Lessor need not have first paid any such claim in order to be so indemnified.

     8.8  EXEMPTION OF LESSOR FROM LIABILITY.  Lessor shall not be liable for 
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other 
person in or about the Premises, whether such damage or injury is caused by or 
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires, 
appliances, plumbing, air conditioning or lighting fixtures, or from any other 
cause, whether the said injury or damage results from conditions arising upon 
the Premises or upon other portions of the building of which the Premises are a 
part, or from other sources or places, and regardless of whether the cause of 
such damage or injury or the means of repairing the same is accessible or not.  
Lessor shall not be liable for any damages arising from any act or neglect of 
any other tenant of Lessor.

9.   DAMAGE OR DESTRUCTION.

     9.1  DEFINITIONS.

          (a)  "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility 
Installations, the repair cost of which damage or destruction is less than 40% 
of the then Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.

          (b)  "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to 
the Premises, other than Lessee Owned Alterations and Utility Installations the 
repair cost of which damage or destruction is 40% or more of the then 
Replacement Cost of the Premises immediately prior to such damage or 
destruction, excluding from such calculation the value of the land and Lessee 
Owned Alterations and Utility Installations.

          (c)  "INSURED LOSS" shall mean damage or destruction to improvements 
on the Premises, other than Lessee Owned Alterations and Utility Installations, 
which was caused by an event required to be covered by the insurance 
described in Paragraph 8.3(a), irrespective of any deductible amounts or 
coverage limits involved.

          (d)  "REPLACEMENT COST" shall mean the cost to repair or rebuild the 
improvements owned by Lessor at the time of the occurrence to their condition 
existing immediately prior thereto, including demolition, debris removal and 
upgrading required by the operation of applicable building codes, ordinances or 
laws, and without deduction for depreciation.

          (e)  "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or 
discovery of a condition involving the presence of, or a contamination by, a 
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the 
Premises.

     9.2  PARTIAL DAMAGE--INSURED LOSS.  If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total costs to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If in such case Lessor does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.

                                  PAGE 4                       Initials ________

                                                                        ________
<PAGE>
 
     9.3  PARTIAL DAMAGE--UNINSURED LOSS. If a Premises Partial Damage that is
not an insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor or knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

     9.4  TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a 
Premises Total Destruction occurs (including any destruction required by any 
authorized public authority), this Lease shall terminate sixty (60) days 
following the date of such Premises Total Destruction, whether or not the 
damage or destruction is an Insured Loss or was caused by a negligent or willful
act of Lessee. In the event, however, that the damage or destruction was caused 
by Lessee, Lessor shall have the right to recover Lessor's damages from Lessee 
except as released and waived in Paragraph 8.6.

     9.5  DAMAGE NEAR END OF TERM. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("Exercise Period"), (i) exercising such option and (ii)
providing Lessor, with any shortage in Insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty (60) day
period following the occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within ten (10) days after the expiration
of the Exercise Period, notwithstanding any term or provision in the grant of
option to the contrary.

     9.6  ABATEMENT OF RENT; LESSEE'S REMEDIES.

          (a)  In the event of damage described in Paragraph 9.2 (Partial 
Damage--Insured), whether or not Lessor or Lessee repairs or restores the 
Premises, the Base Rent, Real Property Taxes, insurance premiums, and other 
charges, if any, payable by Lessee hereunder for the period during which such 
damage, its repair or the restoration continues (not to exceed the period for 
which rental value insurance is required under Paragraph 8.3(b)), shall be 
abated in proportion to the degree to which Lessee's use of the Premises is 
impaired.  Except for abatement of Base Rent, Real Property Taxes, insurance 
premiums, and other charges, if any, as aforesaid, all other obligations of 
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim 
against Lessor for any damage suffered by reason of any such repair or 
restoration.

          (b)  If Lessor shall be obligated to repair or restore the Premises 
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
sixty (60) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "COMMENCE" as used in this Paragraph shall
mean either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever first
occurs.

     9.7  HAZARDOUS SUBSTANCE CONDITIONS.  If a Hazardous Substance Condition 
occurs, unless Lessee is legally responsible therefor (in which case Lessee 
shall make the investigation and remediation thereof required by Applicable Law 
and this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent, give written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such Hazardous Substance Condition of
Lessor's desire to terminate this Lease as of the date sixty (60) days following
the giving of such notice. In the event Lessor elects to give such notice of
Lessor's intention to terminate this Lease, Lessee shall have the right within
ten (10) days after the receipt of such notice to give written notice to Lessor
of Lessee's commitment to pay for the investigation and remediation of such
Hazardous Substance Condition totally at Lessee's expense and without
reimbursement from Lessor except to the extent of an amount equal to twelve (12)
times the then monthly Base Rent. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days
following Lessee's said commitment. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible and the required funds are available.
If Lessee does not give such notice and provide the required funds or assurance
thereof within the times specified above, this Lease shall terminate as of the
date specified in Lessor's notice of termination. If a Hazardous Substance
Condition occurs for which Lessee is not legally responsible, there shall be
abatement of Lessee's obligations under this Lease to the same extent as
provided in Paragraph 9.6(a) for a period of not to exceed twelve months.
*CONTINUED--SEE ADDENDUM "A", PARAGRAPH 8

     9.8  TERMINATION--ADVANCE PAYMENTS.  Upon termination of this Lease 
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning 
advance Base Rent and any other advance payments made by Lessee to Lessor.  
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor under the terms 
of this Lease.

     9.9  WAIVE STATUTES.  Lessor and Lessee agree that the terms of this Lease 
shall govern the effect of any damage to or destruction of the Premises with 
respect to the termination of this Lease and hereby waive the provisions of any 
present or future statute to the extent inconsistent herewith.

10.  REAL PROPERTY TAXES.

     10.1 (a) PAYMENT OF TAXES.  Lessee shall pay the Real Property Taxes, as 
defined in Paragraph 10.2, applicable to the Premises during the term of this 
Lease.  Subject to Paragraph 10.1(b), all such payments shall be made at least 
ten (10) days prior to the delinquency date of the applicable installment.  
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes 
have been paid,.  If any such taxes to be paid by Lessee shall cover any period 
of time prior to or after the expiration or earlier termination of the term 
hereof, Lessee's share of such taxes shall be equitably prorated to cover only
the period of time within the tax fiscal year this Lease is in effect, and
Lessor shall reimburse Lessee for any overpayment after such proration. If
Lessee shall fail to pay any Real Property Taxes required by this Lease to be
paid by Lessee, Lessor shall have the right to pay the same, and Lessee shall
reimburse Lessor therefor upon demand.

          (b)  ADVANCE PAYMENT.  In order to insure payment when due and before 
delinquency of any all Real Property Taxes, Lessor reserves the right, at 
Lessor's option, to estimate the current Real Property Taxes applicable to the 
Premises, and to require such current year's Real Property Taxes to be paid in 
advance to Lessor by Lessee, monthly in advance with the payment of the Base 
Rent.  If Lessor elects to require payment monthly in advance, the monthly 
payment shall be that equal monthly amount which, over the number of months
remaining before the month in which the applicable tax installment would become
delinquent (and without interest thereon), would provide a fund large enough to
fully discharge before delinquency the estimated installment of taxes to be
paid. When the actual amount of the applicable tax bill is known, the amount of
such equal monthly advance payment shall be adjusted as required to provide the
fund needed to pay the applicable taxes before delinquency. If the amounts paid
to Lessor by Lessee under the provisions of this Paragraph are insufficient to
discharge the obligations of Lessee to pay such Real Property Taxes as the same
become due, Lessee shall pay to Lessor, upon Lessor's demand, such additional
sums as are necessary to pay such obligations. All moneys paid to Lessor under
this Paragraph may be intermingled with other moneys of Lessor and shall not
bear interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.

     10.2 DEFINITION OF "REAL PROPERTY TAXES."  As used herein, the term "REAL 
PROPERTY TAXES" shall include any form of real estate tax or assessment, 
general, special, ordinary or extraordinary, and any improvement bond or bonds,
levy or tax (other than inheritance, personal income or estate taxes) imposed 
upon the Premises by any authority having the direct or indirect power to tax, 
including any city, state or federal government, or any school, agricultural, 
sanitary, fire, street, drainage or other improvement district thereof, levied 
against any legal or equitable interest of Lessor in the Premises or in the real
property of which the Premises are a part.  The term "REAL PROPERTY TAXES" shall
also include any tax, fee, levy, assessment or charge, or any increase therein, 
imposed by reason of changes in applicable law taking effect, during the term of
this Lease, including in the improvement thereon, the execution of this Lease,
or any modification, amendment or transfer thereof, and whether or not
contemplated by the Parties.

     10.3 JOINT ASSESSMENT.  If the Premises are not separately assessed, 
Lessee's liability shall be an equitable proportion of the Real Property Taxes 
for all of the land and improvements included within the tax parcel assessed, 
such proportion to be determined by Lessor from the respective valuations 
assigned in the assessor's work sheets or such other information as may be 
reasonably available.  Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

                                                                  Initials _____

NET                                 PAGE 5                                 _____

                                    



<PAGE>
 
     10.4 PERSONAL PROPERTY TAXES.  Lessee shall pay prior to delinquency all 
taxes assessed against and levied upon Lessee Owned Alterations, Utility 
Installations, Trade Fixtures, furnishings, equipment and all personal property 
of Lessee contained in the Premises or elsewhere.  When possible, Lessee shall 
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor.  If any 
of Lessee's said personal property shall be assessed with Lessor's real 
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten 
(10) days after receipt of a written statement setting forth the taxes 
applicable to Lessee's property or, at Lessor's option, as provided in Paragraph
10.1(b).

11.  UTILITIES.  Lessee shall pay for all water, gas, heat, light, power, 
telephone, trash disposal and other utilities and services supplied to the 
Premises, together with any taxes thereon.  If any such services are not 
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be 
determined by Lessor, of all charges jointly metered with other premises.

12.  ASSIGNMENT AND SUBLETTING.

     12.1 LESSOR'S CONSENT REQUIRED.

          (a)  Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Paragraph 36.

     12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

          (a)  Regardless of Lessor's consent, any assignment or subletting 
shall not: (i) be effective without the express written assumption by such 
assignee or sublessee of the obligations of Lessee under this Lease, (ii) 
release Lessee of any obligations hereunder, or (iii) alter the primary 
liability of Lessee for the payment of Base Rent and other sums due Lessor 
hereunder or for the performance of any other obligations to be performed by 
Lessee under this Lease.

          (b)  Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.

          (c)  The consent of Lessor to any assignment or subletting shall not 
constitute a consent to any subsequent assignment or subletting by Lessee or to 
any subsequent or successive assignment or subletting by the sublessee.  
However, Lessor may consent to subsequent sublettings and assignments of the 
sublease or any amendments or modifications thereto without notifying Lessee or 
anyone else liable on the Lease or sublease and without obtaining their consent,
and such action shall not relieve such persons from liability under this Lease 
or sublease.

          (d)  In the event of any Default or Breach of Lessee's obligations 
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or 
any one else responsible for the performance of the Lessee's obligations under 
this Lease, including the sublessee, without first exhausting Lessor's remedies 
against any other person or entity responsible therefor to Lessor, or any 
security held by Lessor or Lessee.

          (e)  Each request for consent to an assignment or subletting shall be 
in writing, accompanied by information relevant to Lessor's determination as to 
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $500 as reasonable consideration for Lessor's considering and
processing the request for consent. Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by Lessor.

          (f)  Any assignee of, or sublessee under, this Lease shall, by reason 
of accepting such assignment or entering into such sublease, be deemed, for the 
benefit of Lessor, to have assumed and agreed to conform and comply with each 
and every term, covenant, condition and obligation herein to be observed or 
performed by Lessee during the term of said assignment or sublease, other than 
such obligations as are contrary to or inconsistent with provisions of an 
assignment or sublease to which Lessor has specifically consented in writing.

          (g)  The occurence of a transaction described in Paragraph 12.1(c) 
shall give Lessor the right (but not the obligation) to require that the 
Security Deposit be increased to an amount equal to six (6) times the then 
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the 
amount required to establish such Security Deposit a condition to Lessor's 
consent to such transaction.

     12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.  The 
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under 
this Lease whether or not expressly incorporated therein:

          (a)  Lessee hereby assigns and transfers to Lessor all of Lessee's 
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect 
such rent and income and apply same toward Lessee's obligations under this 
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1) 
shall occur in the performance of Lessee's obligations under this Lease, Lessee 
may, except as otherwise provided in this Lease, receive, collect and enjoy the 
rents accruing under such sublease.  Lessor shall not, by reason of this or any 
other assignment of such sublease to Lessor, nor by reason of the collection of 
the rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee 
under such sublease.  Lessee hereby irrevocably authorizes and directs any such 
sublessee, upon receipt of a written notice from Lessor stating that a Breach 
exists in the performance of Lessee's obligations under this Lease, to pay to 
Lessor the rents and other charges due and to become due under the sublease.  
Sublessee shall rely upon any such statement and request from Lessor and shall 
pay such rents and other charges to Lessor without any obligation or right to 
inquire as to whether such Breach exists and notwithstanding any notice from or 
claim from Lessee to the contrary.  Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for any
such rents and other charges so paid by said sublessee to Lessor.

          (b)  In the event of a Breach by Lessee in the performance of its 
obligations under this Lease, Lessor, at its option and without any obligation 
to do so, may require any sublessee to attorn to Lessor, in which event Lessor 
shall undertake the obligations of the sublessor under such sublease from the 
time of the exercise of said option to the expiration of such sublease; 
provided, however, Lessor shall not be liable for any prepaid rents or security 
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.

          (c)  Any matter or thing requiring the consent of the sublessor under 
a sublease shall also require the consent of Lessor herein.

          (d)  No sublessee shall further assign or sublet all or any part of 
the Premises without Lessor's prior written consent.

          (e)  Lessor shall deliver a copy of any notice of Default or Breach 
by Lessee to the sublessee, who shall have the right to cure the Default of 
Lessee within the grace period, if any, specified in such notice. The sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such Defaults cured by the sublessee.

13.  DEFAULT; BREACH; REMEDIES.

     13.1 DEFAULT; BREACH.  Lessor and Lessee agree that if an attorney is 
consulted by Lessor in connection with a Lessee Default or Breach (as 
hereinafter defined), $200.00 is a reasonable minimum sum per such occurrence 
for legal services and costs in the preparation and service of a notice of 
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default.  A "DEFAULT" is defined as 
a failure by the Lessee to observe, comply with or perform any of the terms, 
covenants, conditions or rules applicable to Lessee under this Lease.  A 
"BREACH" is defined as the occurrence of any one or more of the following 
Defaults, and, where a grace period for cure after notice is specified herein, 
the failure by Lessee to cure such Default prior to the expiration of the 
applicable grace period, and shall entitle Lessor to pursue the remedies set 
forth in Paragraphs 13.2 and/or 13.3:

          (a)  The vacating of the Premises without the intention to reoccupy 
same, or the abandonment of the Premises.

                                    PAGE 6                     Initials ________

                                                                        ________
<PAGE>
 
     (b) Except as expressly otherwise provided in this Lease, the failure by 
Lessee to make any payment of Base Rent or any other monetary payment required 
to be made by Lessee hereunder, whether to Lessor or to a third party, as and 
when due, the failure by Lessee to provide Lessor with reasonable evidence of 
insurance or surety bond required under this Lease, or the failure of Lessee to 
fulfill any obligation under this Lease which endangers or threatens life or 
property, where such failure continues for a period of five (5) days following 
written notice thereof by or on behalf of Lessor to Lessee.

     (c) Except as expressly otherwise provided in this Lease, the failure by 
Lessee to provide Lessor with reasonable written evidence (in duly executed 
original form, if applicable) of (i) compliance with applicable law per 
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required 
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or 
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or 
37, (v) the subordination or non-subordination of this Lease per Paragraph 30, 
(vi) the guaranty of the performance of Lessee's obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document 
requested under Paragraph 42 (easements), or (viii) any other documentation or 
information which Lessor may reasonably require of Lessee under the terms of 
this Lease, where any such failure continues for a period of fifteen (15) days 
following written notice by or on behalf of Lessor to Lessee.

     (d) A Default by Lessee as to the terms, covenants, conditions or 
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, 
that are to be observed, complied with or performed by Lessee, other than those 
described in subparagraphs (a), (b) or (c), above, where such Default continues 
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is 
such that more than thirty (30) days are reasonably required for its cure, then 
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee 
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.

     (e) The occurrence of any of the following events: (i) The making by Lessee
of any general arrangement or assignment for the benefit of creditors; (ii) 
Lessee's becoming a "debtor" as defined in 11 U.S.C. (S)101 or any successor 
statute thereto (unless, in the case of a petition filed against Lessee, the 
same is dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at 
the Premises or of Lessee's interest in this Lease, where possession is not 
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the 
Premises or of Lessee's interest in this Lease, where such seizure is not 
discharged within thirty (30) days; provided, however, in the event that any 
provision of this subparagraph (e) is contrary to any applicable law, such 
provision shall be of no force or effect, and not affect the validity of the 
remaining provisions.

     (f) The discovery by Lessor that any financial statement given to Lessor by
Lessee or any Guarantor of Lessee's obligations hereunder was materially false.

  13.2 REMEDIES. If Lessee fails to perform any affirmative duty or obligation 
of Lessee under this Lease, within ten (10) days after written notice to Lessee 
(or in case of an emergency, without notice), Lessor may at its option (but 
without obligation to do so), perform such duty or obligation on Lessee's 
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs 
and expenses of any such performance by Lessor shall be due and payable by 
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee 
shall not be honored by the bank upon which it is drawn, Lessor, at its option, 
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's check. In the event of a Breach of this Lease by Lessee, as 
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by 
reason of such Breach, Lessor may:

     (a) Terminate Lessee's right to possession of the Premises by any lawful 
means, in which case this Lease and the term hereof shall terminate and Lessee 
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee: (i) the worth at the time of 
the award of the unpaid rent which had been earned at the time of termination; 
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the 
amount of such rental loss that the Lessee proves could have been reasonably 
avoided; (iii) the worth at the time of award of the amount by which the unpaid 
rent for the balance of the term after the time of award exceeds the amount of 
such rental loss that the Lessee proves could be reasonably avoided; and (iv) 
any other amount necessary to compensate Lessor for all the detriment to 
proximately caused by the Lessee's failure to perform its obligations under this
Lease or which in the ordinary course of things. would be likely to result 
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration 
of the Premises, reasonable attorneys' fees, and that portion of the leasing 
commission paid by Lessor applicable to the unexpired term of this Lease. The 
worth at the time of award of the amount referred to in provision (iii) of the 
prior sentence shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one 
percent. Efforts by Lessor to mitigate damages caused by Lessee's Default or 
Breach of this Lease shall not waive Lessor's right to recover damages under 
this Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such 
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve therein the right to recover all or any part thereof in a separate suit 
for such rent and/or damages.

     (b) Continue the Lease and Lessee's right to possession in effect (in 
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the 
right to sublet or assign, subject only to reasonable limitations. See 
Paragraphs 12 and 36 for the limitations on assignment and subletting which 
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or 
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a 
termination of the Lessee's right to possession.

     (c) Pursue any other remedy now or hereafter available to Lessor under the 
laws or judicial decisions of the state wherein the Premises are located.

     (d) The expiration or termination of this Lease and/or the termination of 
Lessee's right to possession shall not relieve Lessee from liability under any 
indemnity provisions of this Lease as to matters occurring or accruing during 
the term hereof or by reason of Lessee's occupancy of the Premises.

  13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for free
or abated rent or other charges applicable to the Premises, or for the giving
or paying by Lessor to or for Lessee of any cash or other bonus, inducement or
consideration for Lessee's entering into this Lease, all of which concessions
are hereinafter referred to as "INDUCEMENT PROVISIONS," shall be deemed
conditioned upon Lessee's full and faithful performance of all of the terms,
covenants and conditions of this lease to be performed or observed by Lessee
during the term hereof as the same may be extended. Upon the occurrence of a
Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or pad by Lessor under such an
Inducement Provision shall be immediately die and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease but subject to
any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent
or the cure of the breach which initiated the operation of this Paragraph shall
not be deemed a waiver by Lessor of the provisions of this Paragraph unless
specifically so stated in writing by Lessor at the time of such acceptance.

  13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee to 
Lessor of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 4% of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's Default or Breach with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding
Paragraph 4.1 or any other provision of this Lease to the contrary, Base Rent
shall, at Lessor's option, become due and payable quarterly in advance.

  13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease 
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by the holders of any ground lease, mortgage or deed of trust covering the
Premises whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's
obligation is such that more than twenty (20) days after such notice are
reasonably required for its performance, then Lessor shall not be in breach of
this Lease if performance is commenced within such twenty (20) day period and
thereafter diligently pursued to completion.

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, or if access to the
Premises is impaired by such condemnation action so that Lessee's business is
materially impacted. Lessee may, at Lessee's option, to be exercised in writing
within ten (10) days after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall

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have taken possession) terminate this Lease as of the date the condemning 
authority takes such possession. If Lessee does not terminate this Lease in 
accordance with the foregoing, this Lease shall remain in full force and effect 
as to the portion of the Premises remaining, except that the Base Rent shall be 
reduced in the same proportion as the rentable floor area of the Premises taken 
bears to the total rentable floor area of the building located on the Premises. 
No reduction of Base Rent shall occur if the only portion of the Premises taken 
is land on which there is no building. Any award for the taking of all or any 
part of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether 
such award shall be made as compensation for diminution in value of the 
leasehold or for the taking of the fee, or as severance damages; provided, 
however, that Lessee shall be entitled to any compensation, separately awarded 
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade 
Fixtures. In the event that this Lease is not terminated by reason of such 
condemnation, Lessor shall to the extent of its net severance damages received, 
over and above the legal and other expenses incurred by Lessor in the 
condemnation matter, repair any damage to the Premises caused by such 
condemnation, except to the extent that Lessee has been reimbursed therefor by 
the condemning authority. Lessee shall be responsible for the payment of any 
amount in excess of such net severance damages required to complete such repair.

15.  BROKER'S FEE.

  15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this 
Lease.

  15.2 Lessor and Lessee hereby consent to and approve all agency relationships,
including any dual agencies, indicated in Paragraph 1.10.

16.  TENANCY STATEMENT.

  16.1 Each Party (as "RESPONDING PARTY") shall within twenty (20) days after 
written notice from the other Party (the "REQUESTING PARTY") execute, 
acknowledge and deliver to the Requesting Party a statement in writing in form 
similar to the then most current "TENANCY STATEMENT" form published by the 
American Industrial Real Estate Association, plus such additional information, 
confirmation and/or statements as may be reasonably requested by the Requesting 
Party.

  16.2 If Lessor desires to finance, refinance, or sell the Premises, any part 
thereof, or the building of which the Premises are a part, Lessee and all 
Guarantors of Lessee's performance hereunder shall deliver to any potential 
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser. All 
such financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.

17.  LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner 
or owners at the time in question of the fee title to the Premises, or, if this 
is a sublease, of the lessee's interest in the prior lease. In the event of a 
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor 
shall deliver to the transferee or assignee (in cash or by credit) any unused 
Security Deposit held by Lessor at the time of such transfer or assignment. 
Except as provided in Paragraph 15, upon such transfer or assignment and 
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be 
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing, 
the obligations and/or covenants in this Lease to be performed by the Lessor 
shall be binding only upon the Lessor as hereinabove defined.

18.  SEVERABILITY. The invalidity of any provision of this Lease, as determined 
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19.  INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor 
hereunder, other than late charges, not received by Lessor within thirty (30) 
days following the date on which it was due, shall bear interest from the 
thirty-first 931st) day after it was due at the rate of 10% per annum, but not 
exceeding the maximum rate allowed by law, in addition to the late charge 
provided for in Paragraph 13.4.

20.  TIME OF ESSENCE. Time is of the essence with respect to the performance of 
all obligations to be performed or observed by the Parties under this Lease.

21.  RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms 
of this Lease are deemed to be rent.

22.  NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all 
agreements between the Parties with respect to any matter mentioned herein, and 
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made, 
and is relying solely upon, its own investigation as to the nature, quality, 
character and financial responsibility of the other Party to this Lease and as 
to the nature, quality and character of the Premises. Brokers have no 
responsibility with respect thereto or with respect to any default or breach 
hereof by either Party.

23.  NOTICES.

  23.1 All notices required or permitted by this Lease shall be in writing and 
may be delivered in person (by hand or by messenger or courier service) or may 
be sent by regular, certified or registered mail or U.S. Postal Service Express 
Mail, with postage prepaid, or by facsimile transmission, and shall be deemed 
sufficiently given if served in a manner specified in this Paragraph 23. The 
addresses noted adjacent to a Party's signature on this Lease shall be that 
Party's address for delivery or mailing of notice purposes. Either Party may by 
written notice to the other specify a different address for notice purposes. A 
copy of all notices required or permitted to be given to Lessor hereunder shall 
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.

  23.2 Any notice sent by registered or certified mail, return receipt 
requested, shall be deemed given on the date of delivery shown on the receipt 
card, or if no delivery date is shown, the postmark thereon. If sent by regular 
mail the notice shall be deemed given seventy-two (72) hours after the same is 
addressed as required herein and mailed with postage prepaid. Notices delivered 
by United States Express Mail or overnight courier that guarantees next day 
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by 
facsimile transmission or similar means, the same shall be deemed served or 
delivered upon telephone confirmation of receipt of the transmission thereof, 
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.

24.  WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term, 
covenant or condition hereof, or of any subsequent Default or Breach by Lessee 
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the 
obtaining of Lessor's consent to, or approval of, any subsequent or similar act 
by Lessee, or be construed as the basis of an estoppel to enforce the provision 
or provisions of this Lease requiring such consent. Regardless of Lessor's 
knowledge of a Default or Breach at the time of accepting rent, the acceptance 
of rent by Lessor shall not be a waiver of any preceding Default or Breach by 
Lessee of any provision hereof, other than the failure of Lessee to pay the 
particular rent so accepted. Any payment given Lessor by Lessee may be accepted 
by Lessor on account of moneys or damages due Lessor, notwithstanding any 
qualifying statements or conditions made by Lessee in connection therewith, 
which such statements and/or conditions shall be of no force or effect 
whatsoever unless specifically agreed to in writing by Lessor at or before the 
time of deposit of such payment.

25.  RECORDING. Either Lessor or Lessee shall, upon request of the other, 
execute, acknowledge and deliver to the other a short form memorandum of this 
Lease for recording purposes. The Party requesting recordation shall be 
responsible for payment of any fees or taxes applicable thereto.

26.  NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the 
Premises or any part thereof beyond the expiration or earlier termination of 
this Lease.

27.  CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed 
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

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<PAGE>
 
28. COVENANTS AND CONDITIONS. All provisions of this lease to be observed or 
performed by Lessee are both covenants and conditions.

29. BINDING EFFECT; CHOICE OF LAW. This lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the 
laws of the State in which Premises are located. Any litigation between the 
Parties hereto concerning this Lease shall be initiated in the county in which 
the Premises are located.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE

    30.1 SUBORDINATION. Subject to obtaining a commercially reasonable form of 
non-disturbance agreement which shall provide, among other things, that Lessee's
possession, use and enjoyment of the Premises shall not be disturbed so long as 
Lessee pays rent and other monetary obligations and does not commit a default 
hereunder, Lessee agrees that this lease and any Option granted hereby shall be 
subject and subordinate to any ground lease, mortgage, deed of trust, or other 
hypothecation or security device (collectively, "Security Device"), now or 
hereafter placed by Lessor upon the real property of which the Premises are a 
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee 
agrees that the Lenders holding any such Security Device shall have no duty, 
liability or obligation to perform any of the obligations of Lessor under this 
Lease, but that in the event of Lessor's default with respect to any such 
obligation, Lessee will give any Lender whose name and address have been 
furnished Lessee in writing for such purpose notice of Lessor's default and 
allows such Lender thirty (30) days following receipt of such notice for the 
cure of said default before invoking any remedies Lessee may have by reason 
thereof. If any Lender shall elect to have this Lease and/or any Option granted 
hereby superior to the lien of its Security Device and shall give written notice
thereof to Lessee and such Options shall be deemed prior to such Security 
Device, notwithstanding the relative dates of the documentation or recordation 
thereof.

    30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph 
30.3, Lessee agrees to attorn to a Lender or any other party who acquires 
ownership of the Premises by reason of a foreclosure of a Security Device, and 
that in the event of such disclosure, such new owner shall not: (i) be liable 
for any fact or omission of any prior lessor with respect to events occurring 
prior to acquisition of ownership, (ii) be subject to any offsets or defenses 
which Lessee might have against any prior lessor, or (iii) be bound by 
prepayment of more than one month's rent.

    30.3 NON-DISTURBANCE. With respect to Security Devices entered into by 
Lessor after the execution of this Lease, Lessee's subordination of this Lease 
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend 
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

    30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be 
effective without the execution of any further documents; provided, however, 
that, upon written request from Lessor or a Lender in connection with a sale, 
financing or refinancing  of the Premises, Lessee and Lessor shall execute such 
further writings as may be reasonably required to separately document any such 
subordination or non-subordination, attornment and/or non-disturbance agreement 
as is provided for herein.

31. ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding to 
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as 
hereafter defined) or Broker in any such proceeding, action, or appeal thereon, 
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or 
proceeding is pursued to decision or judgment. The term, "Prevailing Party" 
shall include, without limitation, a Party or Broker who substantially obtains 
or defeats the relief sought, as the case may be, whether by compromise, 
settlement, judgment, or the abandonment by the other Party or Broker of its 
claims or defense. The attorney's fee award shall not be computed in accordance 
with any court fee schedule, but shall be such as to fully reimburse all 
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's 
fees, costs and expenses incurred in the preparation and service of notices of 
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency, 
and otherwise on 24 hours advanced verbal notice for the purpose of showing the 
same to prospective purchases, lenders, or lessees, and making such 
alterations, repairs, improvements, or additions to the Premises or to the 
building of which they are a part, as Lessor may reasonably deem necessary. 
Lessor may at any time place on or about the Premises or building any ordinary 
"For Sale" signs and Lessor may at any time during the last one hundred twenty 
(120) days of the term hereof place on or about the Premises any ordinary "For 
Lease" signs. All such activities of Lessor shall be without abatement of rent 
or liability to Lessee.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either 
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the 
contrary in this Lease, Lessor shall not be obligated to exercise any standard 
of reasonableness in determining whether to grant such consent.

34. SIGNS. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's prior written consent, install (but not on the roof) such 
signs as are reasonably required  to advertise Lessee's own business. 
The installation of any sign on the Premises by or for Lessee shall be subject 
to the provisions of Paragraph 7 (Maintenance, Repairs, Utility INstallations, 
Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, 
Lessor reserves all rights to the use of the roof and the right to install, and 
all revenues from the installation of such advertising signs on the Premises, 
including the roof, as do not unreasonably interfere with the conduct of 
Lessee's business.

35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by 
Lessor the voluntary or other surrender of this Lease by Lessee, the mutual 
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the 
Premises; provided, however, Lessor shall, in the event of any such surrender, 
termination, or cancellation, have the option to continue any one or all of any 
existing subtenancies. Lessor's failure within ten (10) days following any such 
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such 
event constitute the termination of such interest.

36. CONSENTS.
        (a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided 
herein, wherever in this Lease the consent of a Party is required to an act by 
or for the other Party, such consent shall not be unreasonably withheld or 
delayed. Lessor's actual reasonable costs and expenses (including but not 
limited to architects', attorneys', engineers' or other consultants' fees) 
incurred in the consideration of, or response to, a request by Lessee for any 
Lessor consent pertaining to this Lease or the Premises, including but not 
limited to consents to an assignment, a subletting or the presence or use of a 
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Subject to 
Paragraph 12.2(e) (applicable to assignment or subletting), Lessor may, as a 
condition to considering  any such request by Lessee, require that lessee 
deposit with Lessor an amount of money (in addition to the Security Deposit held
under Paragraph 5) reasonably calculated by Lessor to represent the cost lessor 
will incur in considering and responding to Lessee's request. Except as 
otherwise provided, any unused portion of said deposit shall be refunded to 
Lessee without interest. Lessor's consent to any act, assignment of this Lease 
or subletting of the Premises by Lessee shall not constitute an acknowledgment 
that no Default of Breach by Lessee of this lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be 
otherwise specifically stated in writing by lessor at the time of such consent.
    (b) All conditions to Lessor's consent authorized by this Lease are 
acknowledged by Lessee as being reasonable. The failure to specify herein any 
particular condition to Lessor's consent shall not preclude the imposition by 
Lessor at the time of consent of such further or other conditions as are then 
reasonable with reference to the particular matter for which consent is being 
given.

37. GUARANTOR.

38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and 
the observance and performance of all the covenants, conditions and provisions 
on Lessee's part to be observed and performed under this Lease, Lessee shall 
have quiet possession of the Premises for the entire term hereof subject to all 
of the provisions of this Lease.

39. OPTIONS.

    39.1 DEFINITION. As used in this Paragraph 39 the word "Option" has the 
following meaning: (a) the right to extend the term of this Lease or to renew 
this Lease or to extend or renew any lease that Lessee has on other property of 
Lessor; (b) the right of refusal to lease the Premises or the right of first 
offer to lease the Premises or the right of first refusal to lease other 
property of Lessor or the right of first offer to lease other property of 
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or 
the right to purchase other property of Lessor, or the right of first refusal 
to purchase other property of Lessor, or the right of first offer to purchase 
other property of Lessor.

    39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in 
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or 
entity other than said original Lessee while the original Lessee is in full and 
actual possession of the Premises and without the intention of thereafter 
assigning or subletting. The Options, if any, herein granted to Lessee are not 
assignable, either as part of an assignment of this lease or separately apart 
therefrom, and no Option may be separated form thus Lease in any manner, by 
reservation or otherwise.
 
    39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple Options to 
extend or renew this Lease, a later option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.

                                                                 
                                                                 Initials
                                                                         -----
NET                                 PAGE 9
<PAGE>
 
     39.4 EFFECT OF DEFAULT ON OPTIONS.
          (a) Lessee shall have no right to exercise an Option, notwithstanding 
any provision in the grant of Option to the contrary: (i) during the period 
commencing with the giving of any notice of Default under Paragraph 13.1 and 
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor form Lessee is unpaid (without regard to 
whether notice thereof is given Lessee), or (iii) during the time Lessee is in 
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of Default under Paragraph 13.1, whether or not the Defaults
are cured, during the twelve (12) month period immediately preceding the 
exercise of the Option.
          (b) The period of time within which an Option may be exercised shall 
not be extended or enlarged by reason of Lessee's inability to exercise an 
Option because of the provisions of Paragraph 39.4(a).
          (c) All rights of Lessee under the provisions of an option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of 
this lease, (i) Lessee fails to give notice thereof to Lessee), or (ii) Lessor 
gives to Lessee three or more notices of Default under Paragraph 13.1 during any
twelve month period, whether or not the Defaults are cured, or (iii) if Lessee 
commits a Breach of this Lease.

     40. MULTIPLE BUILDINGS. If the premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith, provided that (1) Lessee is given thirty (30) days'
advance notice of any change thereof, (ii) such rules do not unreasonably and
materially interfere with Lessee's conduct of its' business or Lessee's use and
enjoyment of the Premises, and (iii) Lessee's fair share of expenses are
reasonable and approved by Lessee prior to such common expenses being incurred.

     41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable 
to Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide the 
same. Lessee assumes all responsibility for the protection of the Premises, 
Lessee, its agents and invitees and their property from the acts of third 
parties.

    42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation or parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee or do not result in additional costs to Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.

     43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
 
     44. AUTHORITY. If either Party hereto is a corporation, trust, or general 
or limited partnership, each individual executing this Lease on behalf of such 
entity represents and warrants that he or she is duly authorized to execute and 
deliver this Lease on its behalf. If Lessee is a corporation, trust, or 
partnership, Lessee shall, within (30) days after request by Lessor, deliver to 
Lessor evidence satisfactory to Lessor of such authority.

     45. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.

     46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and 
submission of same to Lessee shall not be deemed an offer to lease to Lessee. 
This Lease is not intended to be binding until executed by all Parties hereto.

     47. AMENDMENTS. This Lease may be modified only in writing, signed by the 
parties in interest at the time of the modification. The parties shall amend 
this Lease from time to time to reflect any adjustments that are made to the 
Base Rent or other rent payable under this Lease. As long as they do not 
materially change Lessee's obligations hereunder, Lessee agrees to make such 
reasonable non-monetary modifications to this Lease as may be reasonably 
required by an institutional, insurance company, or pension plan Lender in 
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.

     48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if 
more than one person or entity is named herein as either Lessor or Lessee, the 
obligations of such multiple parties shall be the joint and several 
responsibility of all persons or entities named herein as such Lessor or Lessee.

LESSOR AND LESSEE HAVE CAREFFULY READ AND REVIEWED THIS LEASE AND EACH TERM AND 
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR 
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT THE INTENT
AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
     YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
     EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
     ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
     OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
     LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
     TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
     ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
     LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
     AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE
     CONSULTED.

The parties hereto have executed this Lease at the place on the dates specified 
above to their respective signatures.

Executed at_____________________________   Executed at ________________________
on               9-7-91                    on
  --------------------------------------   ------------------------------------
by LESSOR:                                 by LESSEE:
PACIFICA NORTHEAST INDUSTRIAL PARTNERSHIP  VIKING OFFICE PRODUCTS, INC.,
----------------------------------------   ------------------------------------
A COLORADO GENERAL PARTNERSHIP             A CALIFORNIA CORPORATION
----------------------------------------   ------------------------------------

By        /s/ Steve Leonard                By       /s/ Ronald Weissman
  --------------------------------------     ----------------------------------
Name Printed:   Steve Leonard              Name Printed:
             ---------------------------                ------------------------
Title:    General Partner                  Title:
      ----------------------------------         -------------------------------

By______________________________________   By___________________________________
Name Printed:___________________________   Name Printed:________________________
Title:__________________________________   Title:_______________________________
Address:________________________________   Address:_____________________________
________________________________________   _____________________________________
Tel. No. (___)____Fax No. (___)_________   Tel. No. (___)____Fax No. (___)______

NET                                    PAGE 10

NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form: American Industrial Real Estate Association, 345 South Figueroa
Street, Suite M-1, Los Angeles, CA 90071. (213) 687-6777. Fax No. (213) 687-
8616.
 
<PAGE>
 
                                  EXHIBIT "A"

                                  (SITE PLAN)



[MAP OF SITE PLAN]                                       3871 Revere Street





                                                                         INITIAL

                                                                         _______

                                                                         _______
<PAGE>
 
                                 ADDENDUM "A"

                             ADDITIONAL PROVISIONS

     This Addendum ("Addendum") is to that certain ("Lease") by and between 
Pacifica Northeast Industrial Partnership, a Colorado General Partnership 
("Lessor") and Viking Office Products, Inc. ("Lessee"), entered into this _____ 
day of __________, 1996.  In the event of a conflict between the terms and 
provisions of this Addendum and the Lease, the terms and provisions of this 
Addendum shall govern.

1.   OPTION TO EXTEND: As additional consideration for the covenants hereunder,
     Lessor hereby grants unto Lessee an option (the "Option") to extend the
     term of this Lease for one (1) additional term of three (3) years (the
     "Option Term"). The Option shall apply to all space then under the Lease at
     the time the Option Term would commence and shall be on the following terms
     and conditions:

     a.   Written notice of Lessee's interest in exercising the option shall be
          given to Lessor not earlier than twelve months and not later than six
          months prior to the expiration of the primary Lease term ("Lessee's
          Notice").

     b.   The base rent payable by Lessee to Lessor during the Option Term shall
          be in accordance with the following schedule:

<TABLE> 
          <C>                     <S> 
          Option Year 1:          $22,579.50 per month ($3.60 per square foot)
          Option Years 2 and 3:   $23,520.31 per month ($3.75 per square foot)
</TABLE> 

2.   TENANT IMPROVEMENTS: Lessor, at Lessor's sole cost and expense, shall
     perform the following improvements to the Premises prior to November 1,
     1996:

     a.   Deliver all mechanical systems, including HVAC and warehouse heaters, 
          in good operating condition.  

     b.   Scrub and seal the warehouse floors and fill holes in the floor around
          existing concrete patched ares.

     c.   Remove the chain link fence near the north end of the warehouse and 
          clean the building of all miscellaneous debris.

     d.   Install two (2) dock levelers of the same type currently used on
          existing loading doors at door locations which will be designated by
          Lessee within thirty (30) days following execution of this Lease.

     e.   Install one (1) additional overhead door with dock leveler and dock
          seal at the north end of the south loading area where current knockout
          for such a door exists.

     f.   Paint all office walls and remove existing telephone and other 
          miscellaneous cabling in the office area.

     g.   Replace all carpeting, tile and baseboards in the existing offices.

     h.   Convert the southwest office into a lunch room and provide power for
          vending machines, install tile floor and clear glass windows in the
          existing window openings.

     i.   Convert the next office north of the southwest office into two 
          restrooms.

     j.   Remove the freestanding office located in the warehouse.





<PAGE>
 
     All work shall be performed in accordance with applicable building codes 
     and regulations, including the Americans with Disabilities Act.

3.   RIGHT OF FIRST OPPORTUNITY TO PURCHASE PREMISES: In the event Lessor elects
     to sell the building during the term of the Lease, Lessor shall immediately
     notify Lessee of their proposed offered terms. Lessee shall have a period
     of thirty days to agree to such terms or negotiate an agreement with the
     Lessor after which Lessor shall have no further obligation to pursue a sale
     of the Premises to Lessee.

4.   (a)  Notwithstanding Lessee's obligations pursuant to Paragraph 7.1(a)
          herein, Lessor shall, subject to reimbursement by Lessee, procure and
          maintain service contracts necessary to maintain the Premises in a
          manner consistent with the Industrial Center of which the Premises is
          a part. Prior to January 1st of each year under the Lease Term
          (including the Option Term), Lessor shall provide Lessee with Lessor's
          estimated operating expense budget for the Premises only, not the
          Industrial Center of which the Premises is a part. Lessee shall be
          responsible for the payment of said estimated operating expenses
          monthly in advance with the payment of Base Rent. All operating
          expenses shall remain reasonable and competitive with the marketplace
          throughout the Lease Term and any extensions thereof. Actual operating
          expenses incurred shall be reconciled with the estimated amounts at
          the end of each calendar year of the Lease Term and any extensions
          thereof. If Lessee's estimated payments exceed the actual operating
          expenses incurred for the preceding year, Lessee shall be credited the
          amount of such overpayment against Lessee's monthly operating expense
          installment next becoming due. If Lessee's payments during said
          preceding year were less than the actual operating expenses incurred
          during the same period, Lessee shall pay to Lessor the amount of
          deficiency within ten (10) days after delivery by Lessor to Lessee of
          notice of such deficiency. Lessor's failure to deliver such
          reconciliation notice to Lessee within one hundred twenty (120) days
          shall not relieve Lessee of the obligation to pay sums otherwise due.

          Included in those items described in Paragraph 7.1(a) which are 
          subject to Lessee's reimbursement as operating expenses are:

          i.    Snow, ice and debris removal service, property management and 
                security services, and

          ii.   Annual reserve to be used for capital improvements, which for
                items costing in excess of $25,000 will be calculated each year
                by dividing the estimated cost of such items by the estimated
                useful life of such items,

          iii.  Any deductible portion of an insured loss concerning the 
                Premises.

     (b)  Notwithstanding the provisions of Paragraph 7.1(a) herein with respect
          to the painting of the building exterior, Lessee shall pay one-half
          (1/2) of the cost of such painting (Lessee's share), however, Lessee's
          share shall be amortized over a five (5) year period, which
          amortization shall commence with the year of the repainting of the
          Premises. For example, if the exterior of the Premises is repainted
          during the 5th year of the lease term and the cost to repaint is
          $20,000, then Lessee's share is $10,000 which shall be paid $2,000 per
          year over the remaining Lease Term and Option Term, if applicable.

     (c)  Notwithstanding Lessee's obligations pursuant to 7.1(a) herein, Lessor
          shall be responsible for the cost to repair any damage to the
          structural components of the Premises (unless such damage is caused by
          the negligence of Lessee, its agents or employees) and roof
          replacement, if necessary, during the Lease Term and Option Term, if
          applicable. Such costs shall not be subject to reimbursement by Lessee
          as otherwise provided for under Addendum "A", Paragraph 4(a) above.

                                                                   INITIAL _____

                                                                           _____
<PAGE>
 
     (d)  LESSEE AUDIT RIGHTS: Lessor shall provide to Lessee substantial detail
     of the calculations of the Operating Expenses each year in accordance with
     the applicable provisions of the Lease. Lessor shall show by account the
     total operating costs for the Premises and all adjustments corresponding to
     the requirements set forth in Paragraph 7.1 of the Lease and this Addendum,
     Article 4. Lessor shall also provide in reasonable detail the calculation
     of Lessee's pro rata share of the real estate taxes and insurance premiums
     as said calculations are delineated in the Lease. Lessee shall have the
     right, at its own cost and expense, to audit or inspect Lessor's detailed
     records each year with respect to Operating Expenses for any lease year.
     Lessor shall utilize, and cause to be utilized, accounting records and
     procedures for each year conforming to generally accepted accounting
     principles consistently applied with respect to all of the Operating
     Expenses for such lease year, including without limitation, all payments
     for Operating Expenses, to enable the audit or inspection by Lessee
     pursuant to this clause to be conducted. Pursuant to the foregoing, Lessor
     shall be obligated to keep such records for all years associated with this
     Lease until two (2) years following the termination of the Lease. Lessee
     shall give Lessor not less than thirty (30) business days prior written
     notice of its intention to conduct any such audit. Lessor shall cooperate
     with Lessee during the course of such audit, which shall be conducted
     during normal business hours in Lessor's Building management office and
     Lessor shall make such records available to Lessee, Lessee's employees and
     agents, for inspection during normal business hours. Lessee, Lessee's
     employees and agents, shall be entitled to make Photostat copies of such
     records, provided Lessee bears the expense of such copying, and further
     provided that Lessee keeps such copies in a confidential manner and does
     not show or distribute such copies to any other third party. The results of
     such audit, as reasonably determined by both parties, shall be binding upon
     Lessor and Lessee. If such audit discloses that the amount paid by Lessee
     as Lessee's Premises Percent, or of other additional rental payable
     pursuant to the Lease, has been overstated by more than five percent (5%),
     then, in addition to immediately repaying such overpayment to Lessee,
     Lessor shall also pay interest at the rate of ten percent (10%) on any such
     overpayment.

5.   LESSEE INDEMNIFICATION: Except for Lessee's negligence, Lessor shall
     indemnify, protect, defend, and hold harmless Lessee, its agents or
     employees from all liability, loss damages, cost or expense, including
     attorney's fees on account of injuries to the person or property of third
     parties where the injuries are caused by the gross negligence or willful
     misconduct of Lessor, its agents or employees.

6.   Notwithstanding the provisions of Paragraph 7.4(a) hearin, the racking and
     conveyor systems and the computer and telephone switches installed by
     Lessee shall at all times remain the property of Lessee.

7.   In addition to the Terms and Conditions Applicable to Assignment and
     Subletting as provided for in Paragraph 12.2 of the Lease, if Lessee
     collects any rental or other amounts from a sublessee or assignee in excess
     of the Base Rent, Lessee shall pay Lessor, as and when Lessee receives the
     same, 50% of such excess amounts received by Lessee less any improvements,
     broker's fees, advertising expenses or other concessions to the extend all
     of the above are actually paid by Lessee in the procurement of a sublessee
     or assignee.

8.   Additionally, in the event a Hazardous Substance Condition occurs, unless
     Lessee is legally responsible therefor, which materially impairs Lessee's
     use of the Premises and such condition can not be remedied within six (6)
     months following Lessor's obligation to commence the repair or restoration
     of the Premises as provided for under Paragraph 9.6(b) herein, then Lessee
     shall have the right to terminate the Lease by providing Lessor not less
     than sixty (60) days prior written notice.

                                                                        Initial:

                                                                        ________

                                                                        ________
<PAGE>
 
                        ADDENDUM "B" TO LEASE AGREEMENT

                             RULES AND REGULATIONS

     To that certain Lease dated August 8, 1996 between Pacifica Northeast 
Industrial Partnership, a Colorado General Partnership, as Lessor, and Viking 
Office Products, Inc., a California Corporation, as Lessee, covering the 
property located at 3871 Revere Street, Denver, Colorado 80239.

To the extent that this Addendum conflicts with, modifies or supplements other 
portions of the Lease, the provisions contained in this Addendum shall govern 
and control the rights and obligations of the parties.

I.   SIGN CRITERIA: These regulations are established for the purpose of
     maintaining uniformity and overall appearance of Lessee identification
     signs in Peoria Park. Lessee hereby agrees to comply with the terms and
     conditions of these regulations. ANY SIGN THAT DOES NOT CONFORM TO THESE
     REGULATIONS WILL BE REMOVED AND REPLACED WITH A CONFORMING SIGN AT LESSEE'S
     EXPENSE.

     A.   General Requirements:

          1.   Within thirty (30) days after execution of this Lease, Lessee
               will provide, at its sole cost and expense, the Lessee's portion
               of the sign in conformance with the criteria below.

          2.   The sign base complete with the unit number has been provided on 
               the building.  The sign base is the property of the Lessor.

          3.   Lessee identification shall be restricted to the Lessee portion 
               of the sign except for item "6" below.

          4.   The lettering/logo and installation of the Lessee portion of the
               sign on the sign base shall be paid for by Lessee and remain the
               property of Lessor. All letters and other scripting shall be
               consistent in color and style with the lettering on the base and
               in good taste, in the opinion of Lessor.

          5.   Lessee shall submit to Lessor for its approval all copy and/or 
               logo prior to installation of the Lessee portion of the sign.

          6.   In addition to the Lessee portion of the sign, Lessee may place a
               gold leaf sign on the entry door, or on one exterior window in
               letters not to exceed 3" in height and not to exceed 288 square
               inches (gross area).

          7.   Upon Lease termination, Lessee shall remove its sign and return 
               the premises to their original condition.

     B.   General Restrictions:

          1.   No electrical or audible signs will be allowed.

          2.   Except as provided herein, no banners, pennants, placards,
               freestanding signs, or signs affixed to automobiles or trailers
               are allowed on the building, in the landscaped areas, or on
               streets or parking area. The restriction pertaining to
               automobiles or trailers does not apply to magnetic or painted
               identification signs placed on company or private vehicles for
               use in the normal course of business.

                                                                        Initial:

                                                                        _______

                                                                        _______
<PAGE>
 
II.  HAZARDOUS SUBSTANCES:

     (a)  REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCES" as
used in this Lease shall mean any product, substance, chemical material or waste
whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment of the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law. "REPORTABLE USE" shall
mean (i) the installation or use of any above or below ground storage tank, (ii)
the generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Use shall also include Lessee being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may, without Lessor's prior written
consent, but in compliance with all Applicable Law, use any ordinary and
customary materials reasonably required to be used by any Lessee in the normal
course of Lessee's business permitted on the Premises, so long as such use is
not a Reportable Use and does not expose the Premises or neighboring properties
to any meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may (but without any obligation to do
so) condition its consent to the use or presence of any Hazardous Substances,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurance as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but
not limited to, installation (and removal on or before Lease expiration or
earlier termination) or reasonably necessary protective modification to the
Premises (such as concrete encasements) and/or deposit of an additional Security
Deposit.

     (b)  DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on, under, or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice
to such fact to Lessor. Lessee shall also immediately give Lessor a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action, or proceeding given to, or received from, any
governmental authority or private party, or persons entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises.

     (c)  BOND TO BE POSTED. In the event of such notification by Lessee, Lessee
shall post a bond satisfactory to the Lessor equal to the estimated cost of
removal, transporting, storage, disposal and clean up of its regulated
substances should Lessee vacate the leased premises without lawfully disposing
of those regulated substances.

     (d)  INDEMNIFICATION. Except for the negligence of Lessor, its agents or
employees, Lessee shall indemnify, protect, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, and the Premises, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, permits and attorney's and
consultant's fees arising out of or involving any Hazardous Substance or storage
tank brought onto the Premises by or for Lessee or under Lessee's control.
Lessee's obligations under this Paragraph II shall include, but not be limited
to, the effect of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultant's and attorney's fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or

                                                              Initials _________

                                                                       _________
<PAGE>
 
release agreement entered into by Lessor and Lessee shall release Lessee from 
its obligations under this Lease with respect to Hazardous Substances or storage
tanks, unless specifically so agreed by Lessor in writing at the time of such 
agreement.

     (e) In addition to all other indemnities under the Lease, Lessor shall 
indemnify, defend and hold harmless Lessee (as well as Lessee's successors, 
assigns, affiliates, owners, officers, and directors) harmless from and against 
any claims, demands, liabilities or damages (including but not limited to 
attorneys' fees and court costs, removal, remediation, restoration and/or 
abatement of any Hazardous Substance) arising out of any violation of any 
Environmental Law or contamination or pollution of, or from the Industrial 
Center, Building, or Premises caused by (1) conduct or condition occurring prior
to the commencement of the Lease or (2) Lessor's or its agents or employees' use
of, or acts or omission on or in, the Industrial Center, Building, or Premises. 
This indemnification shall survive the expiration or earlier termination of this
Lease.

     The provisions of this paragraph are in addition to, and not in lieu of, 
any other provisions contained in this Lease.

III. TEMPERATURE:

     Lessee shall maintain the air temperature in its leased space warm enough
to prevent the freezing of plumbing and sprinkler systems, if any.

IV.  DISCLOSURE
    
     (a) This Lease has been prepared by Pacifica Holding Company, a Colorado 
Corporation, at the request of the Lessor and Lessee, who are herein referred to
as "the Parties" without regard to number or gender. The Parties have been 
advised to have this document reviewed by their own independent counsel, and 
confirm that in signing this document, they have not relied on any acts or any 
conduct of Pacifica Holding Company, and its agents with regard to the 
interpretation or meaning of this documents. The Parties jointly and severally 
waive any and all claims, actions, demands, and loss against Pacifica Holding 
Company, its agents, employees, and each of them, that a party may incur by 
reason of any act, error, or omission in the preparation of this document and 
in its interpretation and meaning, whether or not the interpretation and 
meaning is the result of determination by a court or arbitration panel of 
competent jurisdiction. The preceding waiver provisions have been negotiated by 
and between the Parties on the one part, and Pacifica Holding Company on the 
other part.

     (b) Please be advised that the Lessor or Lessee of the Premises may be 
subject to the Americans With Disabilities Act (the ADA), a Federal law codified
at 42 USC Section 12101 et seq. Among other requirements of the ADA that could
apply to the Premises, Title III of the ADA requires the Lessor and Lessee of
"public accommodations" to remove barriers to access by disabled persons and
provide auxiliary aids and services for hearing, vision or speech impaired
persons by January 26, 1992. The regulations under Title III of the ADA are
codified at 28 CFR Part 36. The Lessor and Lessee have been advised to have
independent counsel review the ADA and the regulations to determine if this law
would apply, and the nature of the requirements.

V.   CONFIDENTIALITY:

     All information contained in this Lease Agreement is hereby deemed 
confidential and shall not be divulged to anyone without the express written
consent of Lessor except as otherwise specified in Section 16, and Section 25,
of this Lease Agreement or as otherwise required by law.


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