<PAGE>
 
                           COMMERCIAL LEASE AGREEMENT
                           --------------------------

    THIS LEASE AGREEMENT is made and entered into this 1st day of January 1998,
    by and between Ortho Development Corp. whose address is 106 West 12200
    South, Draper, Utah 84020 (hereinafter referred to as "Landlord"), and
    Renaissance Golf Products Inc. whose address is 2919 Granite Hollow St.
    Sandy, Utah, 84092, (herein after referred to as "Tenant").


                           ARTICLE I - GRANT OF LEASE
                           --------------------------

Landlord, in consideration of the rents to be paid and the covenants and
agreements to be performed and observed by the Tenant, does hereby lease to the
Tenant and the Tenant does hereby lease and take from the Landlord the property
described in Exhibit "A" attached hereto and by reference made a part hereof
(the "Leased Premises"), together with, as part of the parcel, all improvements
located thereon.


                            ARTICLE II - LEASE TERM
                            -----------------------

Section 1.  Total Term of Lease.  The term of this Lease shall begin on the
            -------------------
Commencement date, as defined in Section 2 of this Article 11, and shall
terminate on the 31 day of December 1999.

Section 2.  Commencement Date.  The "Commencement Date" shall mean the date, on
            -----------------                                                  
which the Tenant shall commence to conduct business on the Leased Premised, so
long as such date is not in excess of sixty (60) days subsequent to execution
hereof.

                            ARTICLE III - EXTENSIONS
                           ------------------------
                           
The parties hereto may elect to extend this Agreement upon such terms and
conditions a may be agreed upon in writing and signed by the parties at the time
of any such extension.


                       ARTICLE IV - DETERMINATION OF RENT
                       ----------------------------------

The Tenant agrees to pay the Landlord and the Landlord agrees to accept, during
the term hereof, at such place as the Landlord shall from time to time direct by
notice to the Tenant, rent at the following rates and times:

Section 1.  Annual Rent.  Annual rent for the term of the Lease shall be Ten
            -----------                                                     
Dollars and Eighty Cents ($10.80) per square foot for office and Four Dollars
and Eighty Cents ($4.80 )per square foot for of warehouse , plus applicable
sales tax. At such time as the warehouse space rented is in excess of 5,000
square feet, the annual rent of the warehouse space in excess of 5,000 square
feet shall be Four Dollars and Twenty Cents per square foot.  At such time as
the square footage leased of Warehouse space is equal to or greater than 16,000
the annual rent for all Warehouse 

                                       1
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space shall be Four Dollars and Twenty Cents per square foot. Office space
approved by landlord and built out at tenants expense shall be rent-free 
including triple net charges, for 24. All rents are triple net.

Section 2.  Payment of Yearly Rent.  The annual rent shall be payable in advance
            ----------------------                                              
in equal monthly installments of one-twelfth (1/12th) of the total yearly rent,
which shall be paid on the first day of each and every calendar month during the
term hereof, and prorata for the fractional portion of any month, except that on
the first day of the calendar month immediately following the Commencement Date,
the Tenant shall also pay to the Landlord rent at the said rate for any portion
of the preceding calendar month included in the term of this Lease.  Reference
to yearly rent hereunder shall not be implied or construed to the effect that
this Lease or the obligation to pay rent hereunder is from year to year, or for
any term shorter than the existing Lease term, plus any extensions as may be
agreed upon.

A late fee in the amount of $150.00 be assessed if Landlord does not receive
payment on or before the tenth day of each month.

                          ARTICLE V - SECURITY DEPOSIT
                          ----------------------------
                                        
The Tenant has deposited with the Landlord the sum of Four Thousand Dollars
($4,000.00), as security for the full and faithful performance by the Tenant of
all the terms of this lease required to be performed by the Tenant. Such sum
shall be returned to the Tenant after the expiration of this lease, provided the
Tenant has fully and faithfully carried out all of its terms. In the event of a
bona fide sale of the property of which the leased premises are a part, the
Landlord shall have the right to transfer the security to the purchaser to be
held under the terms of this lease, and the Landlord shall be released from all
liability for the return of such security to the Tenant.


                              ARTICLE VI - TAXES
                              ------------------

Section 1.  Personal Property Taxes.  The Tenant shall be liable for all taxes
            -----------------------                                           
levied against any leasehold interest of the Tenant or personal property and
trade fixtures owned or placed by the Tenant in the Leased Premises.

Section 2.  Real Estate Taxes.  During the continuance of this lease Landlord
            -----------------                                                
shall deliver to Tenant a copy of any real estate taxes and assessments against
the Leased Property.  From and after the Commencement Date, the Tenant shall pay
to Landlord not later than twenty-one (21) days after the day on which the same
may become initially due, all real estate taxes and assessments applicable to
the Leased Premises, together with any interest and penalties lawfully imposed
thereon as a result of Tenant's late payment thereof, which shall be levied upon
the Leased Premises during the term of this Lease.

Section 3.  Contest of Taxes.  The Tenant, at its own cost and expense, may, if
            ----------------                                                   
it shall in good faith so desire, contest by appropriate proceedings the amount
of any personal or real property tax.  The Tenant may, if it shall so desire,
endeavor at any time or times, by appropriate proceedings, to obtain a reduction
in the assessed valuation of the Leased Premises for tax purposes.  In any such
event, if the Landlord agrees, at the request of the Tenant, to join with the

                                       2
<PAGE>
 
Tenant at Tenant's expense in said proceedings and the Landlord agrees to sign
and deliver such papers and instruments as may be necessary to prosecute such
proceedings, the Tenant shall have the right to contest the amount of any such
tax and the Tenant shall have the right to withhold payment of any such tax, if
the statute under which the Tenant is contesting such tax so permits.

Section 4.  Payment of Ordinary Assessments.  The Tenant shall pay all
            -------------------------------                           
assessments, ordinary and extraordinary, attributable to or against the Leased
Premises not later than twenty-one (21) days after the day on which the same
became initially due.  The Tenant may take the benefit of any law allowing
assessments to be paid in installments and in such event the Tenant shall only
be liable for such installments of assessments due during the term hereof.

Section 5.  Changes in Method of Taxation.  Landlord and Tenant further agree
            -----------------------------                                    
that if at any time during the term of this Lease, the present method of
taxation or assessment of real estate shall be changed so that the whole or any
part of the real estate taxes, assessment or governmental impositions now
levied, assessed or imposed on the Leased Premises shall, in lieu thereof, be
assessed, levied, or imposed wholly or in part, as a capital levy or otherwise
upon the rents reserved herein or any part thereof, or as a tax, corporation
franchise tax, assessment, levy or charge, or any part thereof, measured by or
based, in whole or in part, upon the Leased Premises or on the rents derived
therefrom and imposed upon the Landlord, then the Tenant shall pay all such
taxes, assessments, levies, impositions, or charges.  Nothing contained in this
Lease shall require the Tenant to pay an estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer or income tax of the
Landlord, nor shall any of the same be deemed real estate taxes as defined
herein unless the same be imposed in lieu of the real estate taxes.


                   ARTICLE VII - CONSTRUCTION AND COMPLETION
                   -----------------------------------------
                                        
Section 1.  Improvements by TENANT.  Tenant may have prepared plans and
            ----------------------                                     
specifications for the construction of improvements, and, if so, such plans and
specifications are attached hereto as Exhibit "B" and incorporated herein by
reference or shall be subject to reasonable approval of Landlord prior to
commencement of work.  Tenant shall obtain all certificates, permits, licenses
and other authorizations of governmental bodies or authorities which are
necessary to permit the construction of the improvements on the demised premises
and shall keep the same in full force and effect at Tenant's cost.

Tenant shall negotiate, let and supervise all contracts for the furnishing of
services, labor, and materials for the construction of the improvements on the
demised premises at its cost.  All such contracts shall require the contracting
party to guarantee performance and all workmanship and materials installed by it
for a period of one-year following the date of completion of construction.
Tenant shall cause all contracts to be fully and completely performed in a good
and workmanlike manner, all to the effect that the improvements shall be fully
and completely constructed and installed in accordance with good engineering and
construction practice.

   During the course of construction, Tenant shall, at its cost, keep in full
force and effect a policy of builder's risk and liability insurance in a sum
equal, from time to time, an amount approved by 

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<PAGE>
 
Landlord. All risk of loss or damage to the improvements during the course of
construction shall be on Tenant with the proceeds from insurance thereon payable
to Landlord.

Upon completion of construction, Tenant shall, at its cost, obtain an occupancy
permit and all other permits or licenses necessary for the occupancy of the
improvements and the operation of the same as set out herein and shall keep the
same in force. Nothing herein shall alter the intent of the parties that Tenant
shall be fully and completely responsible for all aspects pertaining to the
construction of the improvements of the demised premises and for the payment of
all costs associated therewith. Landlord shall be under no duty to investigate
or verify Tenant's compliance with the provision herein. Moreover, neither
Tenant nor any third party may construe the permission granted Tenant hereunder
to create any responsibility on the part of the Landlord to pay for any
improvements, alterations or repairs occasioned by the Tenant. The Tenant shall
keep the property free and clear of all liens and, should the Tenant fall to do
so, or to have any liens removed from the property within fourteen (14) days of
notification to do so by the Landlord, in addition to all other remedies
available to the Landlord, the Tenant shall indemnify and hold the Landlord
harmless for all costs and expenses, including attorney's fees, occasioned by
the Landlord in having said lien removed from the property; and, such costs and
expenses shall be billed to the Tenant monthly and shall be payable by the
Tenant with that month's regular monthly rental as additional reimbursable
expenses to the Landlord by the Tenant.

Section 2. Utilities.  Tenant shall pay its prorata share based on square
           ---------                                                     
footage for all water, sanitation, sewer, electricity, light, heat, gas, power,
fuel, janitorial, CAM charges and other services incident to Tenant's use of the
Leased Premises, whether or not the cost thereof be a charge or imposition
against the Leased Premises.

All Charges to and for Tenant shall be prorated on square footage by Landlord
and presented monthly to Tenant for payment.


                     ARTICLE VIII - OBLIGATIONS FOR REPAIRS
                     --------------------------------------
                                        
Section 1. LANDLORD'S Repairs.  Subject to any provisions herein to the
           ------------------                                          
contrary, and except for maintenance or replacement necessitated as the result
of the act or indecision of subleases, licensees or contractors, the Landlord
shall repair any defects, deficiencies, deviations or failures of materials or
workmanship in the building.  The Landlord shall keep the Leased Premises free
of such defects, deficiencies, deviations or failures during the first twelve
(12) months of the term hereof.

Section 2. TENANT'S Repairs.  The Tenant shall repair and maintain the Leased
           ----------------                                                  
premises in good order and condition, except for reasonable wear and tear, the
repairs required of Landlord pursuant hereto, and maintenance or replacement
necessitated as the result of the act or omission or negligence of the Landlord,
its employees, agents, or contractors.

Section 3. Obligations of the LANDLORD.  Throughout the term hereof, the
           ---------------------------                                  
Landlord shall, except for repairs necessitated as a result of the act or
omission or negligence of the Tenant, its employees, agents or contractors, make
all repairs:

                                       4
<PAGE>
 
(a)  To the roof and the structural portions of the Leased Premises, including,
     without limitation, the floor slabs, the bearing walls of the foundations; 
     or

(b)  Required because of the settling of the Leased Premises.


Section 4. Requirements of the Law.  The Tenant agrees that if any federal, 
           -----------------------                                         
state or municipal government or any department or division thereof shall
condemn the Leased Premises or any part thereof as not in conformity with the
laws and regulations relating to the construction thereof as of the commencement
date with respect to conditions latent or otherwise which existed on the
Commencement Date, or, with respect to items which are the Landlord's duty to
repair pursuant to Section 1 and 3 of this Article; and such federal state or
municipal government or any other department or division thereof, has ordered or
required, or shall hereafter order or require, any alterations or repairs
thereof or installations and repairs as may be necessary to comply with such
laws, orders or requirements (the validity of which the Tenant shall be entitled
to contest); and if by reason of such laws, orders or the work done by the
Landlord in connection therewith, the Tenant is deprived of the use of the
Leased Premises, the rent shall be abated or adjusted, as the case may be, in
proportion to that time during which, and to that portion of the Leased Premises
of which, the Tenant shall be deprived as a result thereof, and the Landlord
shall be obligated to make such repairs, alterations or modifications at
Landlord's expense.

All such rebuilding, altering, installing and repairing shall be done in
accordance with Plans and Specifications approved by the Tenant, which approval
shall not be unreasonably withheld.  If, however, such condemnation, law, order
or requirement, as in this Article set forth, shall be with respect to an item
which shall be the Tenant's obligation to repair pursuant to Section 2 of this
Article VII or with respect to Tenant's own costs and expenses, no abatement or
adjustment of rent shall be granted; provided, however, that Tenant shall also
be entitled to contest the validity thereof.

Section 5. Tenants Alterations.  The Tenant shall have the right, at its sole
           --------------------                                               
expense, from time to time, to redecorate the Leased Premises and to make such
nonstructural alterations and changes in such parts thereof as the Tenant shall
deem expedient or necessary for its purposes; provided, however, that such
alterations and changes shall neither impair the structural soundness nor
diminish the value of the Leased Premises.  The Tenant may make structural
alterations and additions to the Leased Premises provided that Tenant has first
obtained the consent thereto of the Landlord in writing.  The Landlord agrees
that it shall not withhold such consent unreasonably.  The Landlord shall
execute and deliver upon the request of the Tenant such instrument or
instruments embodying the approval of the Landlord which may be required by the
public or quasi public authority for the purpose of obtaining any licenses or
permits for the making of such alterations, changes and/or installations in, to
or upon the Leased Premises and the Tenant agrees to pay for such licenses or
permits.

Section 6. Permits and Expenses.  Each party agrees that it will procure all
           --------------------                                             
necessary permits for making any repairs, alterations, or other improvements for
installations, when applicable.  Each Party hereto shall give written notice to
the other party of any repairs required of the other pursuant to the provisions
of this Article and the party responsible for said repairs agrees

                                       5
<PAGE>
 
promptly to commence such repairs and to prosecute the same to completion
diligently, subject, however, to the delays occasioned by events beyond the
control of such party. Each party agrees to pay promptly when due the entire
cost of any work done by it upon the Leased Premises so that the Leased Premises
at all times shall be free of liens for labor and materials. Each party further
agrees to hold harmless and indemnify the other party from and against any and
all injury, loss, claims or damage to any person or property occasioned by or
arising out of the doing of any such work by such party or its employees, agents
or contractors. Each party further agrees that in doing such work that it will
employ materials of good quality and comply with all governmental requirements,
and perform such work in a good and workmanlike manner.


                        ARTICLE IX - TENANT'S COVENANTS
                        -------------------------------

Section 1. Tenants Covenants. Tenant covenants and agrees as follows:
           -----------------                                         


(a.) To procure any licenses and permits required for any use made of the Leased
     Premises by Tenant, and upon the expiration or termination of this Lease,
     to remove its goods and effects and those of all persons claiming under it,
     and to yield up peaceably to Landlord the Leased Premises in good order,
     repair and condition in all respects; excepting only damage by fire and
     casualty covered by Tenant's insurance coverage, structural repairs (unless
     Tenant is obligated to make such repairs hereunder) and reasonable wear and
     tear;

(b.) To permit Landlord and its agents to examine the Leased Premises at
     reasonable times, with reasonable notice and to show the Leased Premises to
     prospective purchasers of the Building and to provide Landlord, if not
     already available, with a set of keys for the purpose of said examination,
     provided that Landlord shall not thereby unreasonably interfere with the
     conduct of Tenant's business;

(c.) To permit Landlord to enter the Leased Premises to inspect such repairs,
     improvements, alterations or additions thereto as may be required under the
     provisions of this Lease.  If, as a result of such repairs, improvements,
     alterations, or additions, Tenant is deprived of the use of the Leased
     Premises, the rent shall be abated or adjusted, as the case may be, in
     proportion to that time during which, and to that portion of the Leased
     Premises of which, Tenant shall be deprived as a result thereof.


                        ARTICLE X - INDEMNITY BY TENANT
                        -------------------------------

Section 1. Indemnity and Public Liability. The Tenant shall save Landlord
           ------------------------------                                
harmless and indemnify Landlord from all injury, loss, claims or damage to any
person or property while on the Leased Premises, unless caused by the willful
acts or omissions or gross negligence of Landlord, its employees, agents,
licensees or contractors.  Tenant shall maintain, with respect to the Leased
Premises, public liability insurance with limits of not less than one million
dollars for injury or death from one accident and $250,000.00 property damage
insurance, insuring Landlord and Tenant against injury to persons or damage to
property on or about the Leased Premises.  A copy of the policy or a certificate
of insurance shall be delivered to Landlord on or before the commencement date
and no such policy shall be cancelable without ten (10) days prior written
notice to Landlord.

                                       6
<PAGE>
 
                     ARTICLE XI - USE OF PROPERTY BY TENANT
                     --------------------------------------

   Section 1. Tenant agrees to limit use of the property to distribution of
sporting goods, light assembly thereof and the attendant office usage and other
usage as agreed in writing by Landlord.


                             ARTICLE XII - SIGNAGE
                             ---------------------
                                        
Section 1. Exterior Signs.  Tenant shall have the right, at its sole risk and
           --------------                                                    
expense and in conformity with applicable laws and ordinances and CC&Rs, to
erect and thereafter, to repair or replace, if it shall so elect signs on any
portion of the Leased Premises, providing that Tenant shall remove any such
signs upon termination of this lease, and repair all damage occasioned thereby
to the Leased Premises.

Section 2. Interior Signs.  Tenant shall have the right, at its sole risk and
           --------------                                                    
expense and in conformity with applicable laws and ordinances, to erect,
maintain, place and install its usual and customary signs and fixtures in the
interior of the Leased Premises.


                            ARTICLE XIII - INSURANCE
                            ------------------------

Section 1. Insurance Proceeds.  In the event of any damage to or destruction of
           ------------------                                                  
the Leased Premises, Tenant shall adjust the loss and settle all claims with the
insurance companies issuing such policies.  The parties hereto do irrevocably
assign the proceeds from such insurance policies for the purposes hereinafter
stated to any institutional first mortgagee or to Landlord and Tenant jointly,
if no institutional first mortgagee then holds an interest in the Leased
Premises.  All proceeds of said insurance shall be paid into a trust fund under
the control of any institutional first mortgagee, or of Landlord and Tenant if
no institutional first mortgagee then holds an interest in the Leased Premises,
for repair, restoration, rebuilding or replacement, or any combination thereof,
of the Leased Premises or of the improvements in the Leased Premises.  In case
of such damage or destruction, Landlord shall be entitled to make withdrawals
from such trust fund, from time to time, upon presentation of:


(a.) Bills for labor and materials expended in repair, restoration, rebuilding
     or replacement, or any combination thereof-,

(b.) Landlord's sworn statement that such labor and materials for which payment
     is being made have been furnished or delivered on site; and

(c.) The certificate of a supervising architect (selected by Landlord and Tenant
     and approved by an institutional first mortgagee, if any, whose fees will
     be paid out of said insurance proceeds) certifying that the work being paid
     for has been completed in accordance with the Plans and Specifications
     previously approved by Landlord, Tenant and any institutional first
     mortgagee in a first class, good and workmanlike manner and in accordance
     with all pertinent governmental requirements.

                                       7
<PAGE>
 
        Any insurance proceeds in excess of such proceeds as shall be necessary
        for such repair, restoration, rebuilding, replacement or any combination
        thereof shall be the sole property of Landlord subject to any rights
        therein of Landlord's mortgagee, and if the proceeds necessary for such
        repair, restoration, rebuilding or replacement, or any combination
        thereof shall be inadequate to pay the cost thereof, Tenant shall suffer
        the deficiency.


Section 2. Subrogation.  Landlord and Tenant hereby release each other, to the
           -----------                                                        
extent of the insurance coverage provided hereunder, from any and all liability
or responsibility (to the other or anyone claiming through or under the other by
way of subrogation or otherwise) for any loss to or damage of property covered
by the fire and extended coverage insurance policies insuring the Leased
Premises and any of Tenant's property, even if such loss or damage shall have
been caused by the fault or negligence of the other party.

Section 3. Contribution.  Tenant shall reimburse Landlord prorata for all
           ------------                                                  
insurance premiums connected with or applicable to the Leased Premises for
whatever insurance policy the Landlord, at its sole and exclusive option, should
select. A copy of the policy shall be provided Tenant.


                    ARTICLE XIV - DAMAGE TO DEMISED PREMISES
                    ----------------------------------------
                                        
Section 1. Abatement or Adjustment of Rent.  If the whole or any part of the
           --------------------------                                       
Leased Premises shall be damaged or destroyed by fire or other casualty after
the execution of this Lease and before the termination hereof, then in every
case the rent reserved in Article IV herein and other charges, if any, shall be
abated or adjusted, as the case may be, in proportion to that portion of the
Leased Premises of which Tenant shall be deprived on account of such damage or
destruction and the work of repair, restoration, rebuilding, or replacement or
any combination thereof, of the improvements so damaged or destroyed, shall in
no way be construed by any person to effect any reduction of sums or proceeds
payable under any rent insurance policy.


Section 2. Repairs and Restoration.  Landlord agrees that in the event of the
           -----------------------                                           
damage or destruction of the Leased Premises, Landlord forthwith shall proceed
to repair, restore, replace or rebuild the Leased Premises (excluding Tenant's
leasehold improvements), to substantially the condition in which the same were
immediately prior to such damage or destruction.  The Landlord thereafter shall
diligently prosecute said work to completion without delay or interruption
except for events beyond the reasonable control of Landlord.  Notwithstanding
the foregoing, if Landlord does not either obtain a building permit within
ninety (90) days of the date of such damage or destruction, or complete such
repairs, rebuilding or restoration and comply with conditions (a), (b) and (c)
in Section I of Article XIII within nine (9) months of such damage or
destruction, then Tenant may at any time thereafter cancel and terminate this
Lease by sending ninety (90) days written notice thereof to Landlord, or, in the
alternative, Tenant may, during said ninety (90) day period, apply for the same
and Landlord shall cooperate with Tenant in Tenant's application.
Notwithstanding the foregoing, if such damage or destruction shall occur during
the last year of the term of this Lease, or during any renewal term, and shall
amount to twenty-five (25%) percent or more of the replacement cost, (exclusive
of the land and foundations), this Lease, except as hereinafter provided in
Section 3 of Article XV, may be terminated at the election of either Landlord or
Tenant, provided that notice of such election shall be sent by the party so
electing to the other within thirty (30) days after the occurrence of such

                                       8
<PAGE>
 
damage or destruction.  Upon termination, as aforesaid, by either party hereto,
this Lease and the term thereof shall cease and come to an end, any unearned
rent or other charges paid in advance by Tenant shall be refunded to Tenant, and
the parties shall be released hereunder, each to the other, from all liability
and obligations hereunder thereafter arising.


                           ARTICLE XV - CONDEMNATION
                           -------------------------

Section 1. Total Taking.  If, after the execution of this Lease and prior to the
           ------------                                                         
expiration of the term hereof, the whole of the Leased Premises shall be taken
under power of eminent domain by any public or private authority, or conveyed by
Landlord to said authority in lieu of such taking, then this Lease and the term
hereof shall cease and terminate as of the date when possession of the Leased
Premises shall be taken by the taking authority and any unearned rent or other
charges, if any, paid in advance, shall be refunded to Tenant.

Section 2. Partial Taking.  If, after the execution of this Lease and prior to
           --------------                                                     
the expiration of the term hereof, any public or private authority shall, under
the power of eminent domain, take, or Landlord shall convey to said authority in
lieu of such taking, property which results in a reduction by fifteen (15%)
percent or more of the area in the Leased Premises, or of a portion of the
Leased Premises that substantially interrupts or substantially obstructs the
conducting of business on the Leased Premises; then Tenant may, at its election,
terminate this Lease by giving Landlord notice of the exercise of Tenant's
election within thirty (30) days after Tenant shall receive notice of such
taking.  In the event of termination by Tenant under the provisions of Section I
of this Article XV, this Lease and the term hereof shall cease and terminate as
of the date when possession shall be taken by the appropriate authority of that
portion of the Entire Property that results in one of the above takings, and any
unearned rent or other charges, if any, paid in advance by Tenant shall be
refunded to Tenant.

Section 3. Restoration.  In the event of a taking in respect of which Tenant
           -----------                                                      
shall not have the right to elect to terminate this Lease or, having such right,
shall not elect to terminate this Lease, this Lease and the tenure thereof shall
continue in full force and effect and Landlord, at Landlord's sole cost and
expense, forthwith shall restore the remaining portions of the Leased Premises,
including any and all improvements made theretofore to an architectural whole in
substantially the same condition that the same were in prior to such taking.  A
just proportion of the rent reserved herein and any other charges payable by
Tenant hereunder, according to the nature and extent of the injury to the Leased
Premises and to Tenant's business, shall be suspended or abated until the
completion of such restoration and thereafter the rent and any other charges
shall be reduced in proportion to the square footage of the Leased Premises
remaining after such taking.

Section 4. The Award.  All compensation awarded for any taking, whether for the
           ---------                                                           
whole or a portion of the Leased Premises, shall be the sole property of the
Landlord whether such compensation shall be awarded for diminution in the value
of, or loss of, the leasehold or for diminution in the value of, or loss of, the
fee in the Leased Premises, or otherwise.  The Tenant hereby assigns to Landlord
all of Tenant's right and title to and interest in any and all such
compensation.  However, the Landlord shall not be entitled to and Tenant shall
have the sole 

                                       9
<PAGE>
 
right to make its independent claim for and retain any portion of any award made
by the appropriating authority directly to Tenant for loss of business, or
damage to or depreciation of, and cost of removal of fixtures, personalty and
improvements installed in the Leased Premises by, or at the expense of Tenant,
and to any other award made by the appropriating authority directly to Tenant.

Section 5. Release.  In the event of any termination of this Lease as the result
           -------                                                              
of the provisions of this Article XV, the parties, effective as of such
termination, shall be released, each to the other, from all liability and
obligations thereafter arising under this lease.


                             ARTICLE XVI - DEFAULT
                             ---------------------

Section 1. LANDLORD'S REMEDIES.  In the event that:
           -------------------                     

(a.) Tenant shall on three or more consecutive months be in default in the
     payment of rent or other charges herein required to be paid by Tenant
     (default herein being defined as payment received by Landlord ten or more
     days subsequent to the due date).

(b.) Tenant has caused a lien to be filed against the Landlord's property and
     said lien is not removed within thirty (30) days of recordation thereof, or

(c.) Tenant shall default in the observance or performance of any of the
     covenants and agreements required to be performed and observed by Tenant
     hereunder for a period of thirty (30) days after notice to Tenant in
     writing of such default (or if such default shall reasonably take more than
     thirty (30) days to cure, Tenant shall not have commenced the same within
     the thirty (30) days and diligently prosecuted the same to completion); or

(d.) Sixty (60) days have elapsed after the commencement of any proceeding by or
     against Tenant, whether by the filing of a petition or otherwise, seeking
     any reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar relief under the present or future Federal
     Bankruptcy Act or any other present or future applicable federal, state or
     other statute or law, whereby such proceeding shall not have been dismissed
     (provided, however, that the non-dismissal of any such proceeding shall not
     be a default hereunder so long as all of Tenant's covenants and obligations
     hereunder are being performed by or on behalf of Tenant); then Landlord
     shall be entitled to its election (unless Tenant shall cure such default
     prior to such election), to exercise concurrently or successively, any one
     or more of the following rights:

  i.   Terminate this Lease by giving Tenant notice of termination, in which
       event this Lease shall expire and terminate on the date specified in such
       notice of termination, with the same force and effect as though the date
       so specified were the date herein originally fixed as the termination
       date of the term of this Lease, and all rights of Tenant under this Lease
       and in and to the Premises shall expire and terminate, and Tenant shall
       remain liable for all obligations under this Lease arising up to the date
       of such
                                      10
<PAGE>
 
       termination, and Tenant shall surrender the Premises to Landlord on the
       date specified in such notice; or

  ii.  Terminate this Lease as provided herein and recover from Tenant all
       damages Landlord may incur by reason of Tenant's default, including,
       without limitation, a sum which, at the date of such termination,
       represents the then value of the excess, if any, of (a) the Minimum Rent,
       Percentage Rent, Taxes and all other sums which would have been payable
       hereunder by Tenant for the period commencing with the day following the
       date of such termination and ending with the date herein before set for
       the expiration of the full term hereby granted, over (b) the aggregate
       reasonable rental value of the Premises for the same period, all of which
       excess sum shall be deemed immediately due and payable; or


  iii. Without terminating this Lease, declare immediately due and payable all
       Minimum Rent, Taxes, and other rents and amounts due and coming due under
       this Lease for the entire remaining term hereof, together with all other
       amounts previously due, at once; provided, however, that such payment
       shall not be deemed a penalty or liquidated damages but shall merely
       constitute payment in advance of rent for the remainder of said term.
       Upon making such payment, Tenant shall be entitled to receive from
       Landlord all rents received by Landlord from other assignees, tenants,
       and subtenants on account of said Premises during the term of this Lease,
       provided that the monies to which tenant shall so become entitled shall
       in no event exceed the entire amount actually paid by Tenant to Landlord
       pursuant to the preceding sentence less all costs, expenses and
       attorney's fees of Landlord incurred in connection with the reletting of
       the Premises; or

  iv.  Without terminating this Lease, and with or without notice to Tenant,
       Landlord may in its own name but as agent for Tenant enter into and upon
       and take possession of the Premises or any part thereof, and, at
       landlord's option, remove persons and property therefrom, and such
       property, if any, may be removed and stored in a warehouse or elsewhere
       at the cost of, and for the account of Tenant, all without being deemed
       guilty of trespass or becoming liable for any loss or damage which may be
       occasioned thereby, and Landlord may rent the Premises or any portion
       thereof as the agent of Tenant with or without advertisement, and by
       private negotiations and for any term upon such terms and conditions as
       Landlord may deem necessary or desirable in order to relet the Premises.
       Landlord shall in no way be responsible or liable for any rental
       concessions or any failure to rent the Premises or any part thereof, or
       for any failure to collect any rent due upon such reletting.  Upon such
       reletting, all rentals received by Landlord from such reletting shall be
       applied:  first, to the payment of any indebtedness (other than any rent
       due hereunder) from Tenant to Landlord; second, to the payment of any
       costs and expenses of such reletting, including, without limitation,
       brokerage fees and attorney's fees and costs of alterations and repairs;
       third, to the payment of rent and other charges then due and unpaid
       hereunder; and the residue, if any shall be held by Landlord to the
       extent of and for application in payment of future rent as the same may
       become due and payable hereunder.  In reletting the Premises as
       aforesaid, Landlord may grant rent concessions and Tenant shall not be
       credited 

                                      11
<PAGE>
 
       therefor.  If such rentals received from such reletting shall at
       any time or from time to time be less than sufficient to pay to Landlord
       the entire sums then due from Tenant hereunder, Tenant shall pay any such
       deficiency to Landlord.  Such deficiency shall, at Landlord's option, be
       calculated and paid monthly.  No such reletting shall be construed as an
       election by Landlord to terminate this Lease unless Landlord has given a
       written notice of such election to Tenant.  Notwithstanding any such
       reletting without termination, Landlord may at any time thereafter elect
       to terminate this Lease for any such previous default provided same has
       not been cured; or

   v.  Without liability to Tenant or any other party and without constituting a
       constructive or actual eviction, suspend or discontinue furnishing or
       rendering to Tenant any property, material, labor, utilities or other
       service, whether Landlord is obligated to furnish or render the same, so
       long as Tenant is in default under this Lease; or

 viii. Pursue such other remedies as are available at law or equity.



(e.) Landlord's pursuit of any remedy of remedies, including without limitation,
     any one or more of the remedies stated herein shall not (1) constitute an
     election of remedies or preclude pursuit of any other remedy or remedies
     provided in this Lease or any other remedy or remedies provided by law or
     in equity, separately or concurrently or in any combination, or (2) sever
     as the basis for any claim of constructive eviction, or allow Tenant to
     withhold any payments under this Lease.

Section 2.  LANDLORD'S SELF HELP.  If in the performance or observance of any
            --------------------                                             
agreement or condition in this Lease contained on its part to be performed or
observed and shall not cure such default within thirty (30) days after notice
from Landlord specifying the default (or if such default shall reasonably take
more than thirty (30) days to cure, shall diligently prosecuted the same to
completion), Landlord may, at its option, without waiving any claim for damages
for breach of agreement, at any time thereafter cure such default for the
account of Tenant, and any amount paid or contractual liability incurred by
Landlord in so doing shall be deemed paid or incurred for the account of Tenant
and Tenant agrees to reimburse Landlord therefor and save Landlord harmless
therefrom.  Provided, however, that Landlord may cure any such default as
aforesaid prior to the expiration of said waiting period, without notice to
Tenant if any emergency situation exists, or after notice to Tenant, if the
curing of such default prior to the expiration of said waiting period is
reasonably necessary to protect the Leased Premises or Landlord's interest
therein, or to prevent injury or damage to persons or property.  If Tenant shall
fail to reimburse Landlord upon demand for any amount paid for the account of
Tenant hereunder, said amount shall be added to and become due as a part of the
next payment of rent due and shall for all purposes be deemed and treated as
rent hereunder.

                                      12
<PAGE>
 
Section 3.  TENANT'S SELF HELP.  If Landlord shall default in the performance or
            ------------------                                                  
observance of any agreement or condition in this Lease contained on its part to
be performed or observed, and if Landlord shall not cure such default within
thirty (30) days after notice from Tenant specifying the default (or, if such
default shall reasonably take more than thirty (30) days to cure, and Landlord
shall not have commenced the same within the thirty (30) days and diligently
prosecuted the same to completion), Tenant may, at its option, without waiving
any claim for damages for breach of agreement, at any time thereafter cure such
default for the account of Landlord and any amount paid or any contractual
liability incurred by Tenant in so doing shall be deemed paid or incurred for
the account of Landlord and Landlord shall reimburse Tenant therefor and save
Tenant harmless therefrom. Provided, however, that Tenant may cure any such
default as aforesaid prior to the expiration of said waiting period, without
notice to Landlord if an emergency situation exists, or after notice to
Landlord, if the curing of such default prior to the expiration of said waiting
period is reasonably necessary to protect the Leased Premises or Tenant's
interest therein or to prevent injury or damage to persons or property. If
Landlord shall fail to reimburse Tenant upon demand for any amount paid or
liability incurred for the account of Landlord hereunder, said amount or
liability may be deducted by Tenant from the next or any succeeding payments of
rent due hereunder; provided, however, that should said amount or the liability
therefor be disputed by Landlord, Landlord may contest its liability or the
amount thereof, through arbitration or through a declaratory judgment action and
Landlord shall bear the cost of the filing fees therefor.


                              ARTICLE XVII - TITLE
                              --------------------
                                        
Section 1. Subordination.  Tenant shall, upon the request of Landlord in
           -------------                                                
writing, subordinate this Lease to the lien of any present or future
institutional mortgage upon the Leased Premises irrespective of the time of
execution or the time of recording of any such mortgage.  Provided, however,
that as a condition to such subordination, the holder of any such mortgage shall
enter first into a written agreement with Tenant in form suitable for recording
to the effect that:


(a.) In the event of foreclosure or other action taken under the mortgage by the
     holder thereof, this Lease and the rights of Tenant hereunder shall not be
     disturbed but shall continue in full force and effect so long as Tenant
     shall not be in default hereunder, and

(b.) Such holder shall permit insurance proceeds and condemnation proceeds to be
     used for any restoration and repair required by the provisions of Articles
     XIII, XIV or XV, respectively.  Tenant agrees that if the mortgagee or any
     person claiming under the mortgagee shall succeed to the interest of
     Landlord in this Lease, Tenant will recognize said mortgagee or person as
     its Landlord under the terms of this Lease, provided that said mortgagee or
     person for the period during which said mortgagee or person respectively
     shall be in possession of the Leased Premises and thereafter their
     respective successors in interest shall assume all of the obligations of
     Landlord hereunder.  The word "mortgage", as used herein includes
     mortgages, deeds of trust or other similar instruments, and modifications,
     and extensions thereof.  The term "institutional mortgage" as used in this
     Article XVII means a mortgage securing a loan from a bank (commercial or
     savings) or trust company, 

                                      13
<PAGE>
 
     insurance company or pension trust or any other lender institutional in
     nature and constituting a lien upon the Leased Premises.

Section 2. Quiet Enjoyment.  Landlord covenants and agrees that upon Tenant
           ---------------                                                 
paying the rent and observing and performing all of the terms, covenants and
conditions on Tenant's part to be observed and performed hereunder, that Tenant
may peaceably and quietly have, hold, occupy and enjoy the Leased Premises in
accordance with the terms of this Lease without hindrance or molestation from
Landlord or any persons lawfully claiming through Landlord.

Section 3. Zoning and Good Title.  Landlord warrants and represents, upon which
           ---------------------                                               
warranty and representation Tenant has relied in the execution of this Lease,
that Landlord is the owner of the Leased Premises, in fee simple absolute, free
and clear of all encumbrances, except for the easements, covenants and
restrictions of record as of the date of this Lease.  Such exceptions shall not
impede or interfere with the quiet use and enjoyment of the Leased Premises by
Tenant.  Landlord further warrants and covenants that this Lease is and shall be
a first lien on the Leased Premises, subject only to any Mortgage to which this
Lease is subordinate or may become subordinate pursuant to an agreement executed
by Tenant, and to such encumbrances as shall be caused by the acts or omissions
of Tenant; that Landlord has full right and lawful authority to execute this
Lease for the term, in the manner, and upon the conditions and provisions herein
contained; that there is no legal impediment to the use of the Leased Premises
as set out herein; that the Leased Premises are not subject to any easements,
restrictions, zoning ordinances or similar governmental regulations which
prevent their use as set out herein; that the Leased Premises presently are
zoned for the use contemplated herein and throughout the term of this lease may
continue to be so used therefor by virtue of said zoning, under the doctrine of
"non-conforming use", or valid and binding decision of appropriate authority,
except, however, that said representation and warranty by Landlord shall not be
applicable in the event that Tenant's act or omission shall invalidate the
application of said zoning, the doctrine of "non-conforming use" or the valid
and binding decision of the appropriate authority.  Landlord shall furnish
without expense to Tenant, within thirty (30) days after written request
therefor by Tenant, a title report covering the Leased Premises showing the
condition of title as of the date of such certificate, provided, however, that
Landlord's obligation hereunder shall be limited to the furnishing of only one
such title report.

Section 4. Licenses.  It shall be the Tenant's responsibility to obtain any and
           --------                                                            
all necessary licenses and the Landlord shall bear no responsibility therefor;
the Tenant shall promptly notify Landlord of the fact that it has obtained the
necessary licenses in order to prevent any delay to Landlord in commencing
construction of the Leased Premises.


                  ARTICLE XVIII - EXTENSIONS/WAIVERS/DISPUTES
                  -------------------------------------------
                                        
Section 1. Extension Period.  Any extension hereof shall be subject to the
           ----------------                                               
provisions of Article III hereof.

Section 2. Holding Over.  In the event that Tenant or anyone claiming under
           ------------                                                    
Tenant shall continue occupancy of the Leased Premises after the expiration of
the term of this Lease or any renewal or extension thereof without any agreement
in writing between Landlord and Tenant 

                                      14
<PAGE>
 
with respect thereto, such occupancy shall not be deemed to extend or renew the
term of the Lease, but such occupancy shall continue as a tenancy at will, from
month to month, upon the covenants, provisions and conditions herein contained.
The rental shall be the rental in effect during the term of this Lease as
extended or renewed, prorated and payable for the period of such occupancy.

Section 3.  Waivers.  Failure of either party to complain of any act or omission
            -------                                                             
on the part of the other party, no matter how long the same may continue, shall
not be deemed to be a waiver by said party of any of its rights hereunder.  No
waiver by either party at any time, express or implied, of any breach of any
provision of this Lease shall be deemed a waiver of a breach of any other
provision of this Lease or a consent to any subsequent breach of the same or any
other provision.  If any action by either party shall require the consent or
approval of the other party, the other party's consent to or approval of such
action on any one occasion shall not be deemed a consent to or approval of said
action on any subsequent occasion or a consent to or approval of any other
action on the same or any subsequent occasion.  Any and all rights and remedies
which either party may have under this Lease or by operation of law, either at
law or in equity, upon any breach, shall be distinct, separate and cumulative
and shall not be deemed inconsistent with each other, and no one of them,
whether exercised by said party or not, shall be deemed to be an exclusion of
any other; and any two or more or all of such rights and remedies may be
exercised at the same time.

Section 4.  Disputes.  It is agreed that, 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 the said party to institute suit for the 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.  If at any time a dispute shall arise between the
parties hereto as to any work to be performed by either of them under the
provisions hereof, the party against whom the obligation to perform the work is
asserted may perform such work and pay the costs thereof "under protest" and the
performance of such work shall in no event be regarded as a voluntary
performance and shall survive the right on the part of the said party to
institute suit for the recovery of the costs of such work.  If it shall be
adjudged that there was no legal obligation on the part of the said party to
perform the same or any part thereof, said party shall be entitled to recover
the costs of such work or the cost of so much thereof as said party was not
legally required to perform under the provisions of this Lease and the amount so
paid by Tenant may be withheld or deducted by Tenant from any rents herein
reserved.

Section 5.  TENANT'S RIGHT TO CURE LANDLORD'S DEFAULT.  In the event that
            -----------------------------------------                    
Landlord shall fail, refuse or neglect to pay any mortgages, liens or
encumbrances, the judicial sale of which might affect the interest of Tenant
hereunder, or shall fail, refuse or neglect to pay any interest due or payable
on any such mortgage, lien or encumbrance, Tenant may pay said mortgages, liens
or encumbrances, or interest or perform said conditions and charge to Landlord
the amount so paid and withhold and deduct from any rents herein reserved such
amounts so 

                                      15
<PAGE>
 
paid, and any excess over and above the amounts of said rents shall be paid by
Landlord to Tenant.

Section 6.  Notices.  All notices and other communications authorized or
            -------                                                     
required hereunder shall be in writing and shall be given by mailing the same by
certified mail, return receipt requested, postage prepaid, and any such notice
or other communication shall be deemed to have been given when received by the
party to whom such notice or other communication shall be addressed.  If
intended for Landlord the same will be mailed to the address herein above set
forth or such other address as Landlord may hereafter designate by notice to
Tenant, and if intended for Tenant, the same shall be mailed to Tenant at the
address herein above set forth, or such other address or addresses as Tenant may
hereafter designate by notice to Landlord.


                         ARTICLE XIX - PROPERTY DAMAGE
                         -----------------------------

Section 1.  Loss and Damage.  Notwithstanding any contrary provisions of this
            ---------------                                                  
Lease, Landlord shall not be responsible for any loss of or damage to property
of Tenant or of others located on the Leased Premises, except where caused by
the willful act or omission or negligence of Landlord, or Landlord's agents,
employees or contractors, provided, however, that if Tenant shall notify
Landlord in writing of repairs which are the responsibility of Landlord under
Article VII hereof, and Landlord shall fail to commence and diligently prosecute
to completion said repairs promptly after such notice, and if after the giving
of such notice and the occurrence of such failure, loss of or damage to Tenant's
property shall result from the condition as to which Landlord has been notified,
Landlord shall indemnify and hold harmless Tenant from any loss, cost or expense
arising therefrom.

Section 2.  Force Majeure.  In the event that Landlord or Tenant shall be
            -------------                                                
delayed or hindered in or prevented from the performance of any act other than
Tenant's obligation to make payments of rent, additional rent, and other charges
required hereunder, by reason of strikes, lockouts, unavailability of materials,
failure of power, restrictive governmental laws or regulations, riots,
insurrections, the act, failure to act, or default of the other party, war or
other reason beyond its control, then performance of such act shall be excused
for the period of the delay and the period for the performance of such act shall
be extended for a period equivalent to the period of such delay.
Notwithstanding the foregoing, lack of funds shall not be deemed to be a cause
beyond control of either party.

                                        
                           ARTICLE XX - MISCELLANEOUS
                           --------------------------
                                        
Section 1.  Assignment and Subletting.  Under the terms and conditions
            -------------------------                                 
hereunder, Tenant shall have the absolute right to transfer and assign this
lease or to sublet all or any portion of the Leased Premises or to cease
operating Tenant's business on the Leased Premises provided that at the time of
such assignment or sublease Tenant shall not be in default in the performance
and observance of the obligations imposed upon Tenant hereunder, and in the
event that Tenant assigns or sublets this property for an amount in excess of
the rental amount then being paid, then Landlord shall require as further
consideration for the granting of the right to assign or sublet, a sum equal to
fifty (50%) percent of the difference between the amount of rental to be 

                                      16
<PAGE>
 
charged by Tenant to Tenant's sublessee or assignee and the amount provided for
herein, payable in a manner consistent with the method of payment by the
sublessee or assignee to the Tenant, and/or fifty (50%) percent of the
consideration paid or to be paid to Tenant by Tenant's sublessee or assignee.
Landlord must consent in writing to any such sublessee or assignee, although
such consent shall not be unreasonably withheld. The use of the Leased Premises
by such assignee or sublessee shall be expressly limited by and to the
provisions of this lease.

Section 2.  Fixtures.  All personal property, furnishings and equipment
            --------                                                   
presently and all other trade fixtures installed in or hereafter by or at the
expense of Tenant and all additions and/or improvements, exclusive of
structural, mechanical, electrical, and plumbing, affixed to the Leased Premises
and used in the operation of the Tenant's business made to, in or on the Leased
Premises by and at the expense of Tenant and susceptible of being removed from
the Leased Premises without damage, unless such damage be repaired by Tenant,
shall remain the property of Tenant and Tenant may, but shall not be obligated
to, remove the same or any part thereof at any time or times during the term
hereof, provided that Tenant, at its sole cost and expense, shall make any
repairs occasioned by such removal.

Section 3.  Estoppel Certificates.  At any time and from time to time, Landlord
            ---------------------                                              
and Tenant each agree, upon request in writing from the other, to execute,
acknowledge and deliver to the other or to any person designated by the other a
statement in writing certifying that the Lease is unmodified and is in full
force and effect, or if there have been modifications, that the same is in full
force and effect as modified (stating the modifications), that the other party
is not in default in the performance of its covenants hereunder, or if there
have been such defaults, specifying the same, and the dates to which the rent
and other charges have been paid.

Section 4.  Invalidity of Particular Provision.  If any term or provision of
            ----------------------------------                              
this Lease or the application hereof to any person or circumstance shall, to any
extent, be held invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.

Section 5.  Captions and Definitions of Parties.  The captions of the Sections
            -----------------------------------                               
of this Lease are for convenience only and are not a part of this Lease and do
not in any way emit or amplify the terms and provisions of this Lease.  The word
"Landlord" and the pronouns referring thereto, shall mean, where the context so
admits or requires, the persons, firm or corporation named herein as Landlord or
the mortgagee in possession at any time, of the land and building comprising the
Leased Premises.  If there is more than one Landlord, the covenants of Landlord
shall be the joint and several obligations of each of them, and if Landlord is a
partnership, the covenants of Landlord shall be the joint and several
obligations of each of the partners and the obligations of the firm.  Any
pronoun shall be read in the singular or plural and in such gender as the
context may require.  Except as in this Lease otherwise provided, the terms and
provisions of this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

                                      17
<PAGE>
 
Nothing contained herein shall be deemed or construed by the parties hereto nor
by any third party as creating the relationship of principal and agent or of
partnership or of a joint venture between the parties hereto, it being
understood and agreed that neither any provision contained herein, nor any acts
of the parties hereto, shall be deemed to create any relationship between the
parties hereto other than the relationship of Landlord and Tenant.

Section 6.  Brokerage.  No party has acted as, by or through a broker in the
            ---------                                                       
effectuation of this Agreement, except as set out hereinafter.

Section 7.  Entire Agreement.  This instrument contains the entire and only
            ----------------                                               
agreement between the parties, and no oral statements or representations or
prior written matter not contained in this instrument shall have any force and
effect.  This Lease shall not be modified in any way except by a writing
executed by both parties.

Section 8.  Waiver of Trial by Jury.  In the event of any lawsuit of any sort in
            -----------------------                                             
connection with the terms of this Lease, both the Tenant and the Landlord hereby
waive the right of trial by jury and consent that any such lawsuit shall be
heard and tried by the judge of jurisdiction who shall act as the finder of fact
and shall decide questions of law.

Section 9.  Applicable Law.  All matters pertaining to this agreement (including
            --------------                                                      
its interpretation, application, validity, performance and breach) in whatever
jurisdiction action may be brought, shall be governed by, construed and enforced
in accordance with the laws of the State of Utah. The parties herein waive trial
by jury and agree to submit to the personal jurisdiction and venue of a court of
subject matter jurisdiction located in Salt Lake County, State of Utah. In the
event that litigation results from or arises out of this Agreement or the
performance thereof, the parties agree to reimburse the prevailing party's
reasonable attorney's fees, court costs, and all other expenses, whether or not
taxable by the court as costs, in addition to any other relief to which the
prevailing party may be entitled.  In such event, no action shall be entertained
by said court or any court of competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually accrued regardless of
whether damages were otherwise as of said time calculable.

Section 10.  Contractual Procedures.  Unless specifically disallowed by law,
             ----------------------                                         
should litigation arise hereunder, service of process therefore may be obtained
through certified mail, return receipt requested; the parties hereto waiving any
and all rights they may have to object to the method by which service was
perfected.

Section 11.  Extraordinary remedies.  To the extent cognizable at law, the
             ----------------------                                       
parties hereto, in the event of breach and in addition to any and all other
remedies available thereto, may obtain injunctive relief, regardless of whether
the injured party can demonstrate that no adequate remedy exists at law.

                                      18
<PAGE>
 
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year
first above written or have caused this Lease to be executed by their respective
officers thereunto duly authorized.


/s/ Barry Hubbard                        /s/ John B. Hewlett
------------------------                 -------------------------- 
"LANDLORD                                "TENANT"              CEO

                                      19
<PAGE>
 
                                   ADDENDUM
                                   --------

SPECIAL USE.   Landlord approves and agrees that for the term of the Lease
-----------
Tenant may sublet office space to its outside attorney and the attendant office
space necessary to perform that function.  

                                      20
<PAGE>
 
                                  EXHIBIT "A"
                                  -----------

                               LEGAL DESCRIPTION

The following described real property, together with all improvements thereon:

(To be attached)



which has a street address as follows:

12187 South Business Park Drive, Suite 100

LANDLORD  Barry Hubbard

TENANT  CEO  John B. Hewlett

                                      21
<PAGE>
 
                                  EXHIBIT "B"
                                  -----------

                        TENANT PLANS AND SPECIFICATIONS

      (To be attached and approved prior to commencement of construction)


LANDLORD

TENANT

                                      22