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                                                                    EXHIBIT 10.2

[CB COMMERCIAL LOGO]      INDUSTRIAL REAL ESTATE LEASE
                          (MULTI TENANT FACILITY)
                          CB COMMERCIAL REAL ESTATE GROUP. INC.
                          BROKERAGE AND MANAGEMENT
                          LICENSED REAL ESTATE BROKER

 ARTICLE ONE: BASIC TERMS

         This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and are
to be read in conjunction with the Basic Terms.

    Section 1.01. DATE OF LEASE:   July 17, 1998

    Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): PACIFIC GULF PROPERTIES,
INC., a Maryland corporation.

 Address of Landlord: 4220 Von Karman, 2nd Floor, Newport Beach, CA 92660

    Section 1.03. TENANT (INCLUDE LEGAL ENTITY):
NATURAL ALTERNATIVES INTERNATIONAL, INC., a Delaware corporation.

 Address of Tenant: 1185 Linda Vista Drive, San Marcos, CA 92069.

    Section 1.04. PROPERTY: The Property is part of Landlord's multi-tenant real
property development known as VISTA DISTRIBUTION CENTER and described or
depicted in Exhibit "A" (the "Project"). The Project includes the land, the
buildings and all other improvements located on the land, and the common areas
described in Paragraph 4.05(a). The Property is (include street address,
approximate square footage and description) an office/warehouse unit of
approximately 53,920 sq. ft. located in Suites C/D/E of Bldg. 1215 Park Center
Drive, Vista, CA at VISTA DISTRIBUTION CENTER.

    Section 1.05. LEASE TERM: Five (5) years twenty-four (24) days BEGINNING ON
August 8, 1998 or such other date as is specified in this Lease, and ENDING ON
August 31, 2003

     Section 1.06. PERMITTED USES: (See Article Five) shall be used as general
office, warehousing, manufacturing and distribution of nutritional supplements,
related products, an other legal business use for NATURAL ALTERNATIVES
INTERNATIONAL, INC. and for no other purpose.

     Section 1.07. TENANT'S GUARANTOR: (It none, so state)  NA.

     Section 1.08. BROKERS: (See Article Fourteen) (If none, so state)

 Landlord's Broker: CB Richard Ellis - Onosko.

 Tenant's Broker: Colliers - Strange.

     Section 1.09. COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article
Fourteen) $ =.=.

     Section 1.10. INITIAL SECURITY DEPOSIT: (See Section 3.03) $24,803.00
See Addendum, #61

     Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section
4.05) Fifty-three spaces in common.

Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:

    (a) BASE RENT: twenty-four thousand, eight hundred three--00/100 Dollars
($24,803.00) per month for the first twelve (12) months, as provided in Section
3.01, and shall be increased on the first day of the thirteenth (13th) month(s)
after the Commencement Date, either (i) as provided in Section 3.02, or (ii) See
Addendum, #59. (If (ii) is completed, then (i) and Section 3.02 are
inapplicable.)

     (b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section 4.02);
(ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04);
(iv) Tenant's Initial Pro Rata Share of Common Area Expenses 15.11%
(See Section 4.05); (v) Impounds for Insurance Premiums and Property Taxes (See
Section 4.08); (vi) Maintenance, Repairs and Alterations (See Article Six).

     Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE: (See
Section 9.05) fifty  percent (50%) of the Profit (the "Landlord's Share").

     Section 1.14. RIDERS: The following Riders are attached to and made a
part of this Lease: (If none, so state) Addendum 49-66, Exhibits A-C.

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 ARTICLE TWO: LEASE TERM

       Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the beginning
or end of the Lease Term is changed under any provision of this Lease. The
"Commencement Date" shall be the date specified in Section 1.05 above for the
beginning of the Lease Term, unless advanced or delayed under any provision of
this Lease.

       Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Tenant's delay in vacating the Property. If Tenant does not vacate the Property
upon the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Tenant's occupancy of the Property shall be a
"month-to-month" tenancy, subject to all of the terms of this Lease applicable
to a month-to-month tenancy, except that the Base Rent then in effect shall be
increased by twenty-five percent (25%).

ARTICLE THREE: BASE RENT

       Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.12(a) above for the first month of the Lease Term. On the first day of the
second month of the Lease Term and each month thereafter, Tenant shall pay
Landlord the Base Rent, in advance, without offset, deduction or prior demand.
The Base Rent shall be payable at Landlord's address or at such other place as
Landlord may designate in writing.

       Section 3.03. SECURITY DEPOSIT; INCREASES.

       (a) Upon the execution of this Lease, Tenant shall deposit with Landlord
a cash Security Deposit in the amount set forth in Section 1.10 above. Landlord
may apply all or part of the Security Deposit to any unpaid rent or other
charges due from Tenant or to cure any other defaults of Tenant. If Landlord
uses any part of the Security Deposit, Tenant shall restore the Security Deposit
to its full amount within ten (10) days after Landlord's written request.
Tenant's failure to do so shall be a material default under this Lease. No
interest shall be paid on the Security Deposit. Landlord shall not be required
to keep the Security Deposit separate from its other accounts and no trust
relationship is created with respect to the Security Deposit.

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         Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease under Article Seven (Damage or Destruction), Article Eight (Condemnation)
or any other termination not resulting from Tenant's default, and after Tenant
has vacated the Property in the manner required by this Lease, Landlord shall
refund or credit to Tenant (or Tenant's successor) the unused portion of the
Security Deposit, any advance rent or other advance payments made by Tenant to
Landlord, and any amounts paid for real property taxes and other reserves which
apply to any time periods after termination of the Lease.

ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT

         Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly installment
of Base Rent. The term "rent" shall mean Base Rent and Additional Rent.

         Section 4.02. PROPERTY TAXES.

         (a) REAL PROPERTY TAXES. Tenant shall pay all real property taxes on
the Property (including any fees, taxes or assessments against, or as a result
of, any tenant improvements installed on the Property by or for the benefit of
Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and Section 4.08
below, such payment shall be made at least ten (10) days prior to the
delinquency date of the taxes. Within such ten (10)-day period, Tenant shall
furnish Landlord with satisfactory evidence that the real property taxes have
been paid. Landlord shall reimburse Tenant for any real property taxes paid by
Tenant covering any period of time prior to or after the Lease Term. If Tenant
fails to pay the real property taxes when due, Landlord may pay the taxes and
Tenant shall reimburse Landlord for the amount of such tax payment as Additional
Rent.

         (b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means: (i)
any fee, license fee, license tax, business license fee, commercial rental tax,
levy, charge, assessment, penalty or tax imposed by any taxing authority against
the Property; (ii) any tax on the Landlord's right to receive, or the receipt
of, rent or income from the Property or against Landlord's business of leasing
the Property; (iii) any tax or charge for fire protection, streets, sidewalks,
road maintenance, refuse or other services provided to the Property by any
governmental agency; (iv) any tax imposed upon this transaction or based upon a
re-assessment of the Property due to a change of ownership, as defined by
applicable law, or other transfer of all or part of Landlord's interest in the
Property; and (v) any charge or fee replacing any tax previously included within
the definition of real property tax. "Real property tax" does not, however,
include Landlord's federal or state income, franchise, inheritance or estate
taxes.

         (c) JOINT ASSESSMENT. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real property tax
payable by Tenant under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such share to Landlord
within fifteen (15) days after receipt of Landlord's written statement.

         (d) PERSONAL PROPERTY TAXES.

                  (i) Tenant shall pay all taxes charged against trade fixtures,
         furnishings, equipment or any other personal property belonging to
         Tenant. Tenant shall try to have personal property taxed separately
         from the Property.

                  (ii) If any of Tenant's personal property is taxed with the
         Property, Tenant shall pay Landlord the taxes for the personal property
         within fifteen (15) days after Tenant receives a written statement from
         Landlord for such personal property taxes.

         Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with
other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services and Tenant shall
pay such share to Landlord within fifteen (15) days after receipt of Landlord's
written statement.

         Section 4.04. INSURANCE POLICIES.

         (a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of commercial general liability insurance (sometimes known as broad form
comprehensive general liability insurance) insuring Tenant against liability for
bodily injury, property damage (including loss of use of property) and personal
injury arising out of the operation, use or occupancy of the Property. Tenant
shall name Landlord as an additional insured under such policy. The initial
amount of such insurance shall be One Million Dollars ($1,000,000) per
occurrence and shall be subject to periodic increase based upon inflation,
increased liability awards, recommendation of Landlord's professional insurance
advisers and other relevant factors. The liability insurance obtained by Tenant
under this Paragraph 4.04(a) shall (i) be primary and non-contributing; (ii)
contain cross-liability endorsements; and (iii) insure Landlord against Tenant's
performance under Section 5.05, if the matters giving rise to the indemnity
under Section 5.05 result from the negligence of Tenant. The amount and coverage
of such insurance shall not limit Tenant's liability nor relieve Tenant of any
other obligation under this Lease. Landlord may also obtain comprehensive public
liability insurance in an amount and with coverage determined by Landlord
insuring Landlord against liability arising out of ownership, operation, use or
occupancy of the Property. The policy obtained by Landlord shall not be
contributory and shall not provide primary insurance.

         (b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall contain
an Inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage and
any other perils which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance if required by any lender
holding a security interest in the Property. Landlord shall not obtain insurance
for Tenant's fixtures or equipment or building improvements installed by Tenant
on the Property. During the Lease Term, Landlord shall also maintain a rental
income insurance policy, with loss payable to Landlord, in an amount equal to
one year's Base Rent, plus estimated real property taxes and insurance premiums.
Tenant shall be liable for the payment of any deductible amount under Landlord's
or Tenant's insurance policies maintained pursuant to this Section 4.04, in an
amount not to exceed Ten Thousand Dollars ($10,000). Tenant shall not do or
permit anything to be done which invalidates any such insurance policies.

         (c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay all
premiums for the insurance polices described in Paragraphs 4.04(a) and (b)
(whether obtained by Landlord or Tenant) within fifteen (15) days after Tenant's
receipt of a copy of the premium statement or other evidence of the amount due,
except Landlord shall pay all premiums for non-primary comprehensive public
liability insurance which Landlord elects to obtain as provided in Paragraph
4.04(a). For insurance policies

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maintained by Landlord which cover improvements on the entire Project, Tenant
shall pay Tenant's prorated share of the premiums, in accordance with the
formula in Paragraph 4.05(e) for determining Tenant's share of Common Area
costs. If insurance policies maintained by Landlord cover improvements on real
property other than the Project, Landlord shall deliver to Tenant a statement of
the premium applicable to the Property showing in reasonable detail how Tenant's
share of the premium was computed. If the Lease Term expires before the
expiration of an insurance policy maintained by Landlord, Tenant shall be liable
for Tenant's prorated share of the insurance premiums. Before the Commencement
Date, Tenant shall deliver to Landlord a copy of any policy of insurance which
Tenant is required to maintain under this Section 4.04. At least thirty (30)
days prior to the expiration of any such policy, Tenant shall deliver to
Landlord a renewal of such policy. As an alternative to providing a policy of
insurance, Tenant shall have the right to provide Landlord a certificate of
insurance, executed by an authorized officer of the insurance company, showing
that the insurance which Tenant is required to maintain under this Section 4.04
is in full force and effect and containing such other information which Landlord
reasonably requires.

         (d) GENERAL INSURANCE PROVISIONS.

                  (i) Any insurance which Tenant is required to maintain under
         this Lease shall include a provision which requires the insurance
         carrier to give Landlord not less than thirty (30) days' written notice
         prior to any cancellation or modification of such coverage.

                  (ii) If Tenant fails to deliver any policy, certificate or
         renewal to Landlord required under this Lease within the prescribed
         time period or if any such policy is cancelled or modified during the
         Lease Term without Landlord's consent, Landlord may obtain such
         insurance, in which case Tenant shall reimburse Landlord for the cost
         of such insurance within fifteen (15) days after receipt of a statement
         that indicates the cost of such insurance.

                  (iii) Tenant shall maintain all insurance required under this
         Lease with companies holding a "General Policy Rating" of A-12 or
         better, as set forth in the most current issue of "Best Key Rating
         Guide". Landlord and Tenant acknowledge the insurance markets are
         rapidly changing and that insurance in the form and amounts described
         in this Section 4.04 may not be available in the future. Tenant
         acknowledges that the insurance described in this Section 4.04 is for
         the primary benefit of Landlord. If at any time during the Lease Term,
         Tenant is unable to maintain the insurance required under the Lease,
         Tenant shall nevertheless maintain insurance coverage which is
         customary and commercially reasonable in the insurance industry for
         Tenant's type of business, as that coverage may change from time to
         time. Landlord makes no representation as to the adequacy of such
         insurance to protect Landlord's or Tenant's interests. Therefore,
         Tenant shall obtain any such additional property or liability insurance
         which Tenant deems necessary to protect Landlord and Tenant.

                  (iv) Unless prohibited under any applicable insurance policies
         maintained, Landlord and Tenant each hereby waive any and all rights of
         recovery against the other, or against the officers, employees, agents
         or representatives of the other, for loss of or damage to its property
         or the property of others under its control, if such loss or damage is
         covered by any insurance policy in force (whether or not described in
         this Lease) at the time of such loss or damage. Upon obtaining the
         required policies of insurance, Landlord and Tenant shall give notice
         to the insurance carriers of this mutual waiver of subrogation.

         Section 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS.

         (a) COMMON AREAS. As used in this Lease, "Common Areas" shall mean all
areas within the Project which are available for the common use of tenants of
the Project and which are not leased or held for the exclusive use of Tenant or
other tenants, including, but not limited to, parking areas, driveways,
sidewalks, loading areas, access roads, corridors, landscaping and planted
areas. Landlord, from time to time, may change the size, location, nature and
use of any of the Common Areas, convert Common Areas into leaseable areas,
construct additional parking facilities (including parking structures) in the
Common Areas, and increase or decrease Common Area land and/or facilities.
Tenant acknowledges that such activities may result in inconvenience to Tenant.
Such activities and changes are permitted if they do not materially affect
Tenant's use of the Property.

         (b) USE OF COMMON AREAS. Tenant shall have the nonexclusive right (in
common with other tenants and all others to whom Landlord has granted or may
grant such rights) to use the Common Areas for the purposes intended, subject to
such reasonable rules and regulations as Landlord may establish from time to
time. Tenant shall abide by such rules and regulations and shall use its best
effort to cause others who use the Common Areas with Tenant's express or implied
permission to abide by Landlord's rules and regulations. At any time, Landlord
may close any Common Areas to perform any acts in the Common Areas as, in
Landlord's judgment, are desirable to improve the Project. Tenant shall not
interfere with the rights of Landlord, other tenants or any other person
entitled to use the Common Areas.

         (c) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled to
use the number of vehicle parking spaces in the Project allocated to Tenant in
Section 1.11 of the Lease without paying any additional rent. Tenant's parking
shall not be reserved and shall be limited to vehicles no larger than standard
size automobiles or pickup utility vehicles. Tenant shall not cause large trucks
or other large vehicles to be parked within the Project or on the adjacent
public streets. Temporary parking of large delivery vehicles in the Project may
be permitted by the rules and regulations established by Landlord. Vehicles
shall be parked only in striped parking spaces and not in driveways, loading
areas or other locations not specifically designated for parking. Handicapped
spaces shall only be used by those legally permitted to use them. If Tenant
parks more vehicles in the parking area than the number set forth in Section
1.11 of this Lease, such conduct shall be a material breach of this Lease. In
addition to Landlord's other remedies under the Lease, Tenant shall pay a daily
charge determined by Landlord for each such additional vehicle.

         (d) MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common
Areas in good order, condition and repair and shall operate the Project, in
Landlord's sole discretion, as a first-class industrial commercial real
property development. Tenant shall pay Tenant's pro rata share (as determined
below) of all costs incurred by Landlord for the operation and maintenance of
the Common Areas. Common Area costs include, but are not limited to, costs and
expenses for the following: gardening and landscaping; utilities, water and
sewage charges; maintenance of signs (other than tenants' signs); premiums for
liability, property damage, fire and other types of casualty insurance on the
Common Areas and worker's compensation insurance; all property taxes and
assessments levied on or attributable to the Common Areas and all Common Area
improvements; all personal property taxes levied on or attributable to personal
property used in connection with the Common Areas; straight-line depreciation on
personal property owned by Landlord which is consumed in the operation or
maintenance of the Common Areas; rental or lease payments paid by Landlord for
rented or leased personal property used in the operation or maintenance

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of the Common Areas; fees for required licenses and permits; repairing,
resurfacing, repaving, maintaining, painting, lighting, cleaning, refuse
removal, security and similar items; reserves for root replacement and exterior
painting and other appropriate reserves; and a reasonable allowance to Landlord
for Landlord's supervision of the Common Areas (not to exceed five percent (5%)
of the gross rents of the Project for the calendar year). Landlord may cause any
or all of such services to be provided by third parties and the cost of such
services shall be included in Common Area costs. Common Area costs shall not
include depreciation of real property which forms part of the Common Areas.

         (e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual pro
rata share of all Common Area costs (prorated for any fractional month) upon
written notice from Landlord that such costs are due and payable, and in any
event prior to delinquency. Tenant's pro rata share shall be calculated by
dividing the square foot area of the Property, as set forth in Section 1.04 of
the Lease, by the aggregate square foot area of the Project which is leased or
held for lease by tenants, as of the date on which the computation is made.
Tenant's initial pro rata share is set out in Paragraph 1.12(b). Any changes in
the Common Area costs and/or the aggregate area of the Project leased or held
for lease during the Lease Term shall be effective on the first day of the month
after such change occurs. Landlord may, at Landlord's election, estimate in
advance and charge to Tenant as Common Area costs, all real property taxes for
which Tenant is liable under Section 4.02 of the Lease, all insurance premiums
for which Tenant is liable under Section 4.04 of the Lease. all maintenance and
repair costs for which Tenant is liable under Section 6.04 of the Lease, and all
other Common Area costs payable by Tenant hereunder. At Landlord's election,
such statements of estimated Common Area costs shall be delivered monthly,
quarterly or at any other periodic intervals to be designated by Landlord.
Landlord may adjust such estimates at any time based upon Landlord's experience
and reasonable anticipation of costs. Such adjustments shall be effective as of
the next rent payment date after notice to Tenant. Within sixty (60) days after
the end of each calendar year of the Lease Term, Landlord shall deliver to
Tenant a statement prepared in accordance with generally accepted accounting
principles setting forth, in reasonable detail, the Common Area costs paid or
incurred by Landlord during the preceding calendar year and Tenant's pro rata
share. Upon receipt of such statement, there shall be an adjustment between
Landlord and Tenant, with payment to or credit given by Landlord (as the case
may be) so that Landlord shall receive the entire amount of Tenant's share of
such costs and expenses for such period.

         Section 4.06. LATE CHARGES. Tenant's failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any rent payment within ten
(10) days after it becomes due, Tenant shall pay Landlord a late charge equal to
ten percent (10%) of the overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.

         Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law.

         Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES.
If requested by any ground lessor or lender to whom Landlord has granted a
security interest in the Property, or if Tenant is more than ten (10) days late
in the payment of rent more than once in any consecutive twelve (12)-month
period, Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the
annual real property taxes and insurance premiums payable by Tenant under this
Lease, together with each payment of Base Rent. Landlord shall hold such
payments in a non-interest bearing impound account. If unknown, Landlord shall
reasonably estimate the amount of real property taxes and insurance premiums
when due. Tenant shall pay any deficiency of funds in the impound account to
Landlord upon written request. If Tenant defaults under this Lease, Landlord may
apply any funds in the impound account to any obligation then due under this
Lease.

ARTICLE FIVE: USE OF PROPERTY

         Section 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.

         Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of tenants of the Project, or which constitutes a nuisance or waste.
Tenant shall obtain and pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act.

         Section 5.0.3 HAZARDOUS MATERIALS. As use in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials," or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have verse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material other
than those normally used in the course of its business which are disclosed or
Exhibit "C" to be generated, produced, brought upon, used, stored, treated or
disposed of in or about the Property by Tenant, its agents, employees,
contractors, sublessees or invitees without the prior written consent of
Landlord. Landlord shall be entitled to take into account such other factors or
facts as Landlord may reasonably determine to be relevant in determining whether
to grant or withhold consent to Tenant's proposed activity with respect to
Hazardous Material. In no event, however, shall Landlord be required to consent
to the installation or use of any storage tanks on the Property.

         Section 5.04. SIGNS AND AUCTIONS. Tenant shall be allowed signs on the
Property with Landlord's prior written consent, and within City of Vista signage
ordinances. Tenant shall not conduct or permit any auctions or sheriff's sales
at the Property.

         Section 5.05. INDEMNITY. Tenant shall indemnify Landlord against and
hold Landlord harmless from any and all costs, claims or liability arising from:
(a) Tenant's use of the Property; (b) the conduct of Tenant's business or
anything else done or

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permitted by Tenant to be done in or about the Property, including any
contamination of the Property or any other property resulting from the presence
or use of Hazardous Material caused or permitted by Tenant; (c) any breach or
default in the performance of Tenant's obligations under this Lease; (d) any
misrepresentation or breach of warranty by Tenant under this Lease; or (e) other
acts or omissions of Tenant. Tenant shall defend Landlord against any such cost,
claim or liability at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs incurred by Landlord in connection with any such claim. As a
material part of the consideration to Landlord, Tenant assumes all risk of
damage to property or injury to persons in or about the Property arising from
any cause, and Tenant hereby waives all claims in respect thereof against
Landlord, except for any claim arising out of Landlord's gross negligence or
willful misconduct. As used in this Section, the term "Tenant" shall include
Tenant's employees, agents, contractors and invitees, if applicable.

         Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall give
Tenant prior notice of such entry, except in the case of an emergency. Landlord
may place customary "For Sale" or "For Lease" signs on the Property.

         Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Property for
the full Lease Term, subject to the provisions of this Lease.

ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS

         Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Except as provided
herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation as to the condition of the Property or the suitability
of the Property for Tenant's intended use. Tenant represents and warrants that
Tenant has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto. If Landlord or Landlord's Broker has provided a Property
Information Sheet or other Disclosure Statement regarding the Property, a copy
is attached as an exhibit to the Lease.

         Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not
be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a) fire,
steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction
or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or any other cause; (c) conditions arising in
or about the Property or upon other portions of the Project, or from other
sources or places; or (d) any act or omission of any other tenant of the
Project. Landlord shall not be liable for any such damage or injury even though
the cause of or the means of repairing such damage or injury are not accessible
to Tenant. The provisions of this Section 6.02 shall not, however, exempt
Landlord from liability for Landlord's gross negligence or willful misconduct.

         Section 6.03. LANDLORD'S OBLIGATIONS.

         (a) Except as provided in Article Seven (Damage or Destruction) and
Article Eight (Condemnation), Landlord shall keep the following in good order,
condition and repair: the foundations, exterior walls and roof of the Property
(including painting the exterior surface of the exterior walls of the Property
not more often than once every five (5) years, if necessary) and all components
of electrical, mechanical, plumbing, heating and air conditioning systems and
facilities located in the Property which are concealed or used in common by
tenants of the Project. However, Landlord shall not be obligated to maintain or
repair windows, doors, plate glass or the interior surfaces of exterior walls.
Landlord shall make repairs under this Section 6.03 within a reasonable time
after receipt of written notice from Tenant of the need for such repairs.

         (b) Tenant shall pay or reimburse Landlord for those costs Landlord
incurs under Paragraph 6.03(a) above that pertain to non-structure as common
area costs as provided for in Section 4.05 of the Lease. Tenant waives the
benefit of any statute in effect now or in the future which might give Tenant
the right to make repairs at Landlord's expense or to terminate this Lease due
to Landlord's failure to keep the Property in good order, condition and repair.

         Section 6.04. TENANT'S OBLIGATIONS.

         (a) Except as provided in Section 6.03, Article Seven (Damage or
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions of
the Property (including structural, nonstructural, interior, systems and
equipment) in good order, condition and repair (including interior repainting
and refinishing, as needed). If any portion of the Property or any system or
equipment in the Property which Tenant is obligated to repair cannot be fully
repaired or restored, Tenant shall promptly replace such portion of the Property
or system or equipment in the Property, regardless of whether the benefit of
such replacement extends beyond the Lease Term; but if the benefit or useful
life of such replacement extends beyond the Lease Term (as such term may be
extended by exercise of any options), the useful life of such replacement shall
be prorated over the remaining portion of the Lease Term (as extended), and
Tenant shall be liable only for that portion of the cost which is applicable to
the Lease Term (as extended). Tenant shall maintain a preventive maintenance
contract providing for the regular inspection and maintenance of the heating and
air conditioning system by a licensed heating and air conditioning contractor,
unless Landlord maintains such equipment under Section 6.03 above. If any part
of the Property or the Project is damaged by any act or omission of Tenant,
Tenant shall pay Landlord the cost of repairing or replacing such damaged
property, whether or not Landlord would otherwise be obligated to pay the cost
of maintaining or repairing such property. It is the intention of Landlord and
Tenant that at all times Tenant shall maintain the portions of the Property
which Tenant is obligated to maintain in an attractive, first-class and fully
operative condition.

         (b) Tenant shall fulfill all of Tenant's obligations under this Section
6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or replace
the Property as required by this Section 6.04, Landlord may, upon ten (10) days'
prior notice to Tenant (except that no notice shall be required in the case of
an emergency), enter the Property and perform such maintenance or repair
(including replacement, as needed) on behalf of Tenant. In such case, Tenant
shall reimburse Landlord for all costs incurred in performing such maintenance
or repair immediately upon demand.

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<PAGE>   7

         Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

         (a) Tenant shall not make any alterations, additions, or improvements
to the Property without Landlord's prior written consent, except for
non-structural alterations which do not exceed Ten Thousand Dollars ($10.000) in
cost cumulatively over the Lease Term and which are not visible from the outside
of any building of which the Property is part. Landlord may require Tenant to
provide demolition and/or lien and completion bonds in form and amount
satisfactory to Landlord. Tenant shall promptly remove any alterations,
additions, or improvements constructed in violation of this Paragraph 6.05(a)
upon Landlord's written request. All alterations, additions, and improvements
shall be done in a good and workmanlike manner, in conformity with all
applicable laws and regulations, and by a contractor approved by Landlord. Upon
completion of any such work, Tenant shall provide Landlord with "as built"
plans, copies of all construction contracts, and proof of payment for all labor
and materials.

         (b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Landlord's consent to such work is required. Landlord may
elect to record and post notices of non-responsibility on the Property.

         Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under Article Seven (Damage or Destruction). In addition, Landlord may
require Tenant to remove any alterations, additions or improvements (whether or
not made with Landlord's consent) prior to the expiration of the Lease and to
restore the Property to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord's property and shall be surrendered to Landlord
upon the expiration or earlier termination of the Lease, except that Tenant may
remove any of Tenant's machinery or equipment which can be removed without
material damage to the Property. Tenant shall repair, at Tenant's expense, any
damage to the Property caused by the removal of any such machinery or equipment.
In no event, however, shall Tenant remove any of the following materials or
equipment (which shall be deemed Landlord's property) without Landlord's prior
written consent: any power wiring or power panels; lighting or lighting
fixtures; wall coverings; drapes, blinds or other window coverings; carpets or
other floor coverings; heaters, air conditioners or any other heating or air
conditioning equipment; fencing or security gates; or other similar building
operating equipment and decorations.

ARTICLE SEVEN: DAMAGE OR DESTRUCTION

         Section 7.01. PARTIAL DAMAGE TO PROPERTY.

         (a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable as
a result of such damage or less than fifty percent (50%) of Tenant's operations
are materially impaired) and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are sufficient to pay for the
necessary repairs, this Lease shall remain in effect and Landlord shall repair
the damage as soon as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures, equipment, or improvements.

         (b) If the insurance proceeds received by Landlord are not sufficient
to pay the entire cost of repair, or if the cause of the damage is not covered
by the insurance policies which Landlord maintains under Paragraph 4.04(b),
Landlord may elect either to (i) repair the damage as soon as reasonably
possible, in which case this Lease shall remain in full force and effect, or
(ii) terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the occurrence
of the damage whether Landlord elects to repair the damage or terminate the
Lease. If Landlord elects to repair the damage, Tenant shall pay Landlord the
"deductible amount" (if any) under Landlord's insurance policies and, if the
damage was due to an act or omission of Tenant, or Tenant's employees, agents,
contractors or invitees, the difference between the actual cost of repair and
any insurance proceeds received by Landlord. If Landlord elects to terminate the
Lease, Tenant may elect to continue this Lease in full force and effect, in
which case Tenant shall repair any damage to the Property and any building in
which the Property is located. Tenant shall pay the cost of such repairs, except
that upon satisfactory completion of such repairs, Landlord shall deliver to
Tenant any insurance proceeds received by Landlord for the damage repaired by
Tenant. Tenant shall give Landlord written notice of such election within ten
(10) days after receiving Landlord's termination notice.

         (c) If the damage to the Property occurs during the last six (6) months
of the Lease Term and such damage will require more than thirty (30) days to
repair, either Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Tenant's notice to Landlord of the occurrence of the damage.

         Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding the preceding
sentence, if the Property can be rebuilt within six (6) months after the date of
destruction, Landlord may elect to rebuild the Property at Landlord's own
expense, in which case this Lease shall remain in full force and effect.
Landlord shall notify Tenant of such election within thirty (30) days after
Tenant's notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord.

         Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, any rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Tenant's use of the Property is impaired. However, the reduction
shall not exceed the sum of one year's payment of Base Rent, insurance premiums
and real property taxes. Except for such possible reduction in Base Rent,
insurance premiums and real property taxes, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.

                                       7
<PAGE>   8

         Section 7.04. WAIVER. Tenant waives the protection of any statute, code
or judicial decision which grants a tenant the right to terminate a lease in the
event of the substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction to the Property.

ARTICLE EIGHT: CONDEMNATION

         If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which
the Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
takes title or possession). If neither Landlord nor Tenant terminates this
Lease, this Lease shall remain in effect as to the portion of the Property not
taken, except that the Base Rent and Additional Rent shall be reduced in
proportion to the reduction in the floor area of the Property. Any Condemnation
award or payment shall be distributed in the following order: (a) first, to any
ground lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property; (b) second, to Tenant,
only the amount of any award specifically designated for loss of or damage to
Tenant's trade fixtures or removable personal property; and (c) third, to
Landlord, the remainder of such award, whether as compensation for reduction in
the value of the leasehold, the taking of the fee, or otherwise. If this Lease
is not terminated, Landlord shall repair any damage to the Property caused by
the Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.

ARTICLE NINE: ASSIGNMENT AND SUBLETTING

         Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property
or of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without Landlord's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this Lease.

         Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or
sublease the Property, without Landlord's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all of
Tenant's obligations under this Lease.

         Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release Tenant
or change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If Tenant's transferee
defaults under this Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee. Landlord may consent to subsequent
assignments or modifications of this Lease by Tenant's transferee, without
notifying Tenant or obtaining its consent. Such action shall not relieve
Tenant's liability under this Lease.

         Section 9.04. OFFER TO TERMINATE. If Tenant desires to assign the Lease
or sublease the Property, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects in
writing to accept the offer to terminate within twenty (20) days after notice of
the offer, the Lease shall terminate as of the date specified and all the terms
and provisions of the Lease governing termination shall apply. If Landlord does
not so elect, the Lease shall continue in effect until otherwise terminated and
the provisions of Section 9.05 with respect to any proposed transfer shall
continue to apply.

         Section 9.05. LANDLORD'S CONSENT.

         (a) Tenant's request for consent to any transfer described in Section
9.01 shall set forth in writing the details of the proposed transfer, including
the name, business and financial condition of the prospective transferee.
financial details of the proposed transfer (e.g., the term of and the rent and
security deposit payable under any proposed assignment or sublease), and any
other information Landlord deems relevant. Landlord shall have the right to
withhold consent, if reasonable, or to grant consent, based on the following
factors: (i) the business of the proposed assignee or subtenant and the proposed
use of the Property; (ii) the net worth and financial reputation of the proposed
assignee or subtenant; (iii) Tenant's compliance with all of its obligations
under the Lease; and (iv) such other factors as Landlord may reasonably deem
relevant. If Landlord objects to a proposed assignment solely because of the net
worth and/or financial reputation of the proposed assignee, Tenant may
nonetheless sublease (but not assign), all or a portion of the Property to the
proposed transferee, but only on the other terms of the proposed transfer.

         (b) If Tenant assigns or subleases, the following shall apply:

                  (i) Tenant shall pay to Landlord as Additional Rent under the
         Lease the Landlord's Share (stated in Section 1.13) of the Profit
         (defined below) on such transaction as and when received by Tenant,
         unless Landlord gives written notice to Tenant and the assignee or
         subtenant that Landlord's Share shall be paid by the assignee or
         subtenant to Landlord directly. The "Profit" means (A) all amounts paid
         to Tenant for such assignment or sublease, including "key" money,
         monthly rent in excess of the monthly rent payable under the Lease, and
         all fees and other consideration paid for the assignment or sublease,
         including fees under any collateral agreements, less (B) costs and
         expenses directly incurred by Tenant in connection with the execution
         and performance of such assignment or sublease for real estate broker's
         commissions and costs of renovation or construction of tenant
         improvements required under such assignment or sublease. Tenant is
         entitled to recover such costs and expenses before Tenant is obligated
         to pay the Landlord's Share to Landlord. The Profit in the

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         case of a sublease of less than all the Property is the rent allocable
         to the subleased space as a percentage on a square footage basis.

                  (ii) Tenant shall provide Landlord a written statement
         certifying all amounts to be paid from any assignment or sublease of
         the Property within thirty (30) days after the transaction
         documentation is signed, and Landlord may inspect Tenant's books and
         records to verity the accuracy of such statement. On written request,
         Tenant shall promptly furnish to Landlord copies of all the transaction
         documentation, all of which shall be certified by Tenant to be
         complete, true and correct. Landlord's receipt of Landlord's Share
         shall not be a consent to any further assignment or subletting. The
         breach of Tenant's obligation under this Paragraph 9.05(b) shall be a
         material default of the Lease.

         Section 9.06. NO MERGER. No merger shall result from Tenant's sublease
of the Property under this Article Nine, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.

ARTICLE TEN: DEFAULTS; REMEDIES

         Section 10.01. COVENANTS AND CONDITIONS. Tenant's performance of each
of Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.

         Section 10.02. DEFAULTS. Tenant shall be in material default under this
Lease:

         (a) If Tenant abandons the Property or if Tenant's vacation of the
Property results in the cancellation of any insurance described in Section 4.04;

         (b) If Tenant fails to pay rent or any other charge when due;

         (c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this Lease for a period of thirty (30) days after written notice from
Landlord; provided that if more than thirty (30) days are required to complete
such performance, Tenant shall not be in default if Tenant commences such
performance within the thirty (30)-day period and thereafter diligently pursues
its completion. However, Landlord shall not be required to give such notice if
Tenant's failure to perform constitutes a non-curable breach of this Lease. The
notice required by this Paragraph is intended to satisfy any and all notice
requirements imposed by law on Landlord and is not in addition to any such
requirement.

         (d) (i) If Tenant makes a general assignment or general arrangement for
the benefit of creditors; (ii) if a petition for adjudication of bankruptcy or
for reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant's assets located at the
Property or of Tenant's interest in this Lease and possession is not restored to
Tenant within thirty (30) days; or (iv) if substantially all of Tenant's assets
located at the Property or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
thirty (30) days. If a court of competent jurisdiction determines that any of
the acts described in this subparagraph (d) is not a default under this Lease,
and a trustee is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest hereunder,
then Landlord shall receive, as Additional Rent, the excess, if any, of the rent
(or any other consideration) paid in connection with such assignment or sublease
over the rent payable by Tenant under this Lease.

         (e) If any guarantor of the Lease revokes or otherwise terminates, or
purports to revoke or otherwise terminate, any guaranty of all or any portion of
Tenant's obligations under the Lease. Unless otherwise expressly provided, no
guaranty of the Lease is revocable.

         Section 10.03. REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:

         (a) Terminate Tenant's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the time
of the award of the amount by which the unpaid Base Rent, Additional Rent and
other charges which Landlord would have earned after termination until the time
of the award exceeds the amount of such rental loss that Tenant proves Landlord
could have reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid Base Rent, Additional Rent and other charges which
Tenant would have paid for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves Landlord could have
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under the Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or expenses
Landlord incurs in maintaining or preserving the Property after such default,
the cost of recovering possession of the Property, expenses of reletting,
including necessary renovation or alteration of the Property, Landlord's
reasonable attorneys' fees incurred in connection therewith, and any real estate
commission paid or payable. As used in subparts (i) and (ii) above, the "worth
at the time of the award" is computed by allowing interest on unpaid amounts at
the rate of fifteen percent (15%) per annum, or such lesser amount as may then
be the maximum lawful rate. As used in subpart (iii) above. the "worth at the
time of the award" is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). If Tenant has abandoned the Property, Landlord shall have the
option of (i) retaking possession of the Property and recovering from Tenant the
amount specified in this Paragraph 10.03(a), or (ii) proceeding under Paragraph
10.03(b);

         (b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant has abandoned the Property. In
such event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due;

         (c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state to which the Property is
located.

         Section 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for a
postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated Rent".
Tenant shall

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<PAGE>   10

be credited with having paid all of the Abated Rent on the expiration of the
Lease Term only if Tenant has fully, faithfully, and punctually performed all of
Tenant's obligations hereunder, including the payment of all rent (other than
the Abated Rent) and all other monetary obligations and the surrender of the
Property in the physical condition required by this Lease. Tenant acknowledges
that its right to receive credit for the Abated Rent is absolutely conditioned
upon Tenant's full, faithful and punctual performance of its obligations under
this Lease. If Tenant defaults and does not cure within any applicable grace
period, the Abated Rent shall immediately become due and payable in full and
this Lease shall be enforced as if there were no such rent abatement or other
rent concession. In such case Abated Rent shall be calculated based on the full
initial rent payable under this Lease.

         Section 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence of
any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of an unlawful detainer
action against Tenant. On such termination, Landlord's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing commencement, pursuing and/or defending of
any action in any bankruptcy court or other court with respect to the Lease, the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Property. All such damages suffered (apart from Base Rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceeding.

         Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.

ARTICLE ELEVEN: PROTECTION OF LENDERS

         Section 11.01. SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease. Tenant
shall execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Tenant's right to quiet possession of the Property during the Lease Term shall
not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.

         Section 11.02. ATTORNMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.

         Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten (10)
days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.

         Section 11.04. ESTOPPEL CERTIFICATES.

         (a) Upon Landlord's written request, Tenant shall execute, acknowledge
and deliver to Landlord a written statement certifying: (i) that none of the
terms or provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease has not been
cancelled or terminated: (iii) the last date of payment of the Base Rent and
other charges and the time period covered by such payment; (iv) that Landlord is
not in default under this Lease (or, if Landlord is claimed to be in default,
stating why); and (v) such other representations or information with respect to
Tenant or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Property may require. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's request. Landlord
may give any such statement by Tenant to any prospective purchaser or
encumbrancer of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.

         (b) If Tenant does not deliver such statement to Landlord within such
ten (10)-day period, Landlord, and any prospective purchaser or encumbrancer,
may conclusively presume and rely upon the following facts: (i) that the terms
and provisions of this Lease have not been changed except as otherwise
represented by Landlord; (ii) that this Lease has not been cancelled or
terminated except as otherwise represented by Landlord; (iii) that not more than
one month's Base Rent or other charges have been paid in advance; and (iv) that
Landlord is not in default under the Lease. In such event, Tenant shall be
estopped from denying the truth of such facts.

         Section 11.05. TENANT'S FINANCIAL CONDITION. Within thirty (30) days
after written request from Landlord, Tenant shall deliver to Landlord such
Publicly available financial statements as Landlord reasonably requires to
verify the net worth of Tenant or any assignee, subtenant, or guarantor of
Tenant. In addition, Tenant shall deliver to any lender designated by Landlord
any publicly available financial statements required by such lender to
facilitate the financing or refinancing of the Property. Tenant represents and
warrants to Landlord that each such financial statement is a true and accurate
statement as of the date of such statement. All financial statements shall be
confidential and shall be used only for the purposes set forth in this Lease.

ARTICLE TWELVE: LEGAL COSTS

         Section 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any costs
or expenses that the Nondefaulting Party incurs in connection with any breach
or default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a

                                       10
<PAGE>   11

settlement, enforcement of rights or otherwise. Furthermore, if any action for
breach of or to enforce the provisions of this Lease is commenced, the court in
such action shall award to the party in whose favor a judgment is entered, a
reasonable sum as attorneys' fees and costs. The losing party in such action
shall pay such attorneys' fees and costs. Tenant shall also indemnify Landlord
against and hold Landlord harmless from all costs, expenses, demands and
liability Landlord may incur if Landlord becomes or is made a party to any claim
or action (a) instituted by Tenant against any third party, or by any third
party against Tenant, or by or against any person holding any interest under or
using the Property by license of or agreement with Tenant; (b) for foreclosure
of any lien for labor or material furnished to or for Tenant or such other
person; (c) otherwise arising out of or resulting from any act or transaction of
Tenant or such other person; or (d) necessary to protect Landlord's interest
under this Lease in a bankruptcy proceeding, or other proceeding under Title 11
of the United States Code, as amended. Tenant shall defend Landlord against any
such claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.

         Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with Tenant's request for
Landlord's consent under Article Nine (Assignment and Subletting), or in
connection with any other act which Tenant proposes to do and which requires
Landlord's consent.

ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS

         Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a
condition to the continuance of this Lease, that there will be no discrimination
against, or segregation of, any person or group of persons on the basis of race,
color, sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.

         Section 13,02. LANDLORD'S LIABILITY; CERTAIN DUTIES.

         (a) As used in this Lease, the term "Landlord" means only the current
owner or owners of the fee title to the Property or Project or the leasehold
estate under a ground lease of the Property or Project at the time in question.
Each Landlord is obligated to perform the obligations of Landlord under this
Lease only during the time such Landlord owns such interest or title. Any
Landlord who transfers its title or interest is relieved of all liability with
respect to the obligations of Landlord under this Lease to be performed on or
after the date of transfer. However, each Landlord shall deliver to its
transferee all funds that Tenant previously paid if such funds have not yet been
applied under the terms of this Lease.

         (b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure, Landlord
shall not be in default if such cure is commenced within such thirty (30)-day
period and thereafter diligently pursued to completion.

         (c) Notwithstanding any term or provision herein to the contrary, the
liability of Landlord for the performance of its duties and obligations under
this Lease is limited to Landlord's interest in the Property and the Project,
and neither the Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.

         Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.

         Section 13.04. INTERPRETATION. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall include
the singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with Tenant's expressed or
implied permission.

         Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.

         Section 13.06. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
Tenant's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to the
other party.

         Section 13.07. WAIVERS. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.

         Section 13.08. NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or Tenant
may require that a "Short Form" memorandum of this Lease executed by both
parties be recorded. The party requiring such recording shall pay all transfer
taxes and recording fees.

         Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.

         Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is
a corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general

                                       11
<PAGE>   12
partner of the partnership, that he or it has full authority to sign for the
partnership and that this Lease binds the partnership and all general partners
of the partnership. Tenant shall give written notice to Landlord of any general
partner's withdrawal or addition. Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a copy of Tenant's recorded statement
of partnership or certificate of limited partnership.

         Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.

         Section 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.

         Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.

         Section 13.14. SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.

ARTICLE FOURTEEN: BROKERS

         Section 14.01. BROKER'S FEE. When this Lease is signed by and delivered
to both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and Landlord's Broker, or the sum stated in
Section 1.09 above for services rendered to Landlord by Landlord's Broker in
this transaction. Landlord shall pay Landlord's Broker a commission if Tenant
exercises any option to extend the Lease Term or to buy the Property, or any
similar option or right which Landlord may grant to Tenant, or if Landlord's
Broker is the procuring cause of any other lease or sale entered into between
Landlord and Tenant covering the Property. Such commission shall be the amount
set forth in Landlord's Broker's commission schedule in effect as of the
execution of this Lease. If a Tenant's Broker is named in Section 1.08 above,
Landlord's Broker shall pay an appropriate portion of its commission to Tenant's
Broker if so provided in any agreement between Landlord's Broker and Tenant's
Broker. Nothing contained in this Lease shall impose any obligation on Landlord
to pay a commission or fee to any party other than Landlord's Broker.

         Section 14.02. PROTECTION OF BROKERS. If Landlord sells the Property,
or assigns Landlord's interest in this Lease, the buyer or assignee shall, by
accepting such conveyance of the Property or assignment of the Lease, be
conclusively deemed to have agreed to make all payments to Landlord's Broker
thereafter required of Landlord under this Article Fourteen. Landlord's Broker
shall have the right to bring a legal action to enforce or declare rights under
this provision. The prevailing party in such action shall be entitled to
reasonable attorneys' tees to be paid by the losing party. Such attorneys' fees
shall be fixed by the court in such action. This Paragraph is included in this
Lease for the benefit of Landlord's Broker.

         Section 14.03. AGENCY DISCLOSURE; NO OTHER BROKERS. Landlord and Tenant
each warrant that they have dealt with no other real estate broker(s) in
connection with this transaction except: CB COMMERCIAL, who represents Lessor
Richard Ellis and Colliers, who represents Lessee.

         In the event that CB COMMERCIAL REAL ESTATE GROUP, INC. represents both
Landlord and Tenant, Landlord and Tenant hereby confirm that they were timely
advised of the dual representation and that they consent to the same, and that
they do not expect said broker to disclose to either of them the confidential
information of the other party.

ARTICLE FIFTEEN: COMPLIANCE

         The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this Agreement,
including, but not limited to, the 1964 Civil Rights Act and all amendments
thereto, the Foreign Investment In Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The Americans With
Disabilities Act.

         ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED
HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED,
PLEASE DRAW A LINE THROUGH THE SPACE BELOW.

                                        12
<PAGE>   13

         Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialled all
Riders which are attached to or incorporated by reference in this Lease.

                                            "LANDLORD"

Signed on                , 19        PACIFIC GULF PROPERTIES, INC.
         ----------------    ---    -----------------------------------------

at                                   a Maryland corporation
  ------------------------------.   -----------------------------------------

                                    By:
                                       --------------------------------------
                                            ROBERT A. DEWEY

                                    Its: Senior Vice President
                                        -------------------------------------

                                    By:
                                       --------------------------------------
                                              J.R. WETZEL

                                    Its: Executive Vice President
                                        -------------------------------------

                                               "TENANT"

Signed on                , 19        NATURAL ALTERNATIVES INTERNATIONAL, INC.
         ----------------    ---    -----------------------------------------

at                                   a Delaware corporation
  ------------------------------.   ------------------------------------------

                                    By: /s/ MARK A. LeDOUX
                                       ---------------------------------------
                                            MARK A. LeDOUX

                                    Its: C.E.O.
                                        --------------------------------------

                                    By:
                                       ---------------------------------------

                                    Its:
                                        --------------------------------------

         IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH
A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.

         THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE
DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND
OFFICE REALTORS(R), INC. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE REALTORS(R),
INC., ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR
EMPLOYEES OR AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD
RETAIN LEGAL COUNSEL TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE
ADVICE OF SUCH LEGAL COUNSEL.

                                        13
<PAGE>   14

                                 ADDENDUM

THIS ADDENDUM IS ATTACHED TO AND MADE PART OF THE LEASE DATED July 17, 1998 BY
AND BETWEEN: PACIFIC GULF PROPERTIES, INC., a Maryland corporation as LESSOR,
and NATURAL ALTERNATIVES INTERNATIONAL, INC., a Delaware corporation as LESSEE,
for the premises located at 1215 Park Center Dr., Suites C/D/E, Vista, CA 92083.
Should there be a conflict between the preceding 15 articles and the provisions
of this Addendum, the provisions of the Addendum shall prevail.

49. TRASH DISPOSAL: Lessee agrees that all trash and debris is to be deposited
in trash bins provided within the complex and all trash bins shall remain inside
enclosures as provided by Lessor. If it is determined that Lessee is regularly
disposing of an unusually large amount of refuse, Lessee shall, within ten (10)
days receipt of written notice from Lessor and at Lessee's sole expense, provide
for an additional trash bin and pickup service at his or her leased premises.
Lessor reserves the right to stipulate location of storage for Lessee's
additional bin. Lessee agrees not to store any items or leave any debris outside
premises in any of the common area, including the parking lot and in the event
Lessor must remove items or debris, Lessor shall charge the cost of removing
said items or debris to Lessee, and Lessee shall pay same upon removal or be in
default of this Lease as defined in Paragraph 13 of this Lease.

50. GOVERNMENTAL AUTHORITY COMPLIANCE: Lessee shall, Lessee's expense, comply
promptly with all governmental authorities and all applicable statutes,
ordinances, rules, regulations, orders, covenants, and restrictions of record,
and requirements in effect during the term or any part of the term hereof,
regulating the use by Lessee of the Premises, including compliance with the
Uniform Fire Code.

51. WAIVER OF JURY TRIAL: The parties hereto shall and they hereby do waive
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way related to this Lease, the relationship of Lessor and Lessee, Lessee's
use or occupancy of the Premises, the building or the Park, and/or any claim of
injury, loss or damage.

52. COUNTERCLAIMS: In the event Lessor commences any proceedings for nonpayment
of Rent, or any other sums or amounts due hereunder, Lessee shall not interpose
any counterclaim of whatever nature or description in any such proceedings,
provided, however, nothing contained herein shall be deemed or construed as a
waiver of the Lessee's right to assert such claims in any separate action
brought by Lessee or the right to offset the amount of any final judgment owed
by Lessor to Lessee.

53. WARRANTY OF AUTHORITY: Each person executing this agreement on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder.

54. LESSOR'S PERSONAL LIABILITY: The liability of Lessor (which, for purposes of
this Lease, shall include Lessor and the owner of the Building if other than
Lessor) to Lessee for any default by Lessor under the terms of this Lease shall
be limited to the actual interest of Lessor and its present or future partners
in the Premises or the Building and Lessee agrees to look solely to the
Premises for satisfaction of any liability and shall not look to other assets
of Lessor nor seek any recourse against the assets of the individual partners,
directors, officers, shareholders, agents or employees of Lessor; it being
intended that Lessor and the individual partners, directors, officers,
shareholders, agents or employees of Lessor shall not be personally liable in
any manner whatsoever for any judgement or deficiency. The liability of Lessor
under this Lease is limited to its actual period of ownership of title to the
Building, and Lessor shall be automatically released from further performance
under this Lease and from all further liabilities and expenses hereunder upon
transfer of Lessor's interest in the Premises or the Building. Lessee agrees to
attorn to any entity purchasing or otherwise acquiring the Premises.

55. RECORDATION: Lessee shall not record this Lease or a short form memorandum
hereof without the prior written consent of the Lessor.

56. WARRANTIES OF LESSEE: Lessee hereby warrants and represents to Lessor, for
the express benefit of Lessor, that Lessee has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Lessee has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Lessee hereby further warrants
and represents to Lessor, for the express benefit of Lessor, that in entering
into this Lease, Lessee has not relied upon any statement, fact, promise or
representation (whether express or implied, written or oral) not specifically
set forth herein in writing and that any statement, fact, promise or
representation (whether express or implied, written or oral) made at anytime to
Lessee, which is not expressly incorporated herein in writing is hereby waived
by Lessee.
<PAGE>   15

 ADDENDUM
 Page two

57. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for the
Premises or any portion thereof, Lessor's lender shall request reasonable
modifications(s) to this Lease as a condition to such financing, Lessee shall
not unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Lessee's rights hereunder or
the use, occupancy or quiet enjoyment of Lessee hereunder.

58. LESSOR AS REAL ESTATE INVESTMENT TRUST: Pacific Gulf Properties, Inc.
("PGP"), is a real estate investment trust, and all rental income received by
Lessor must therefore qualify as "rents from real property" within the meaning
of section 856(d) of the Internal Revenue Code of 1954, as amended. In order to
insure such qualifications, Lessee agrees that in the event Lessee shall assign
its interest in this Lease or sublet the Premises, no amount received or
accrued, directly or indirectly, with respect to such assignment or sublease
shall depend in whole or part on the income or profits of the assignee or
sublessee, or any other person deriving income from the Premises. If PGP
notifies Lessee that PGP has in good faith determined that its status as a real
estate investment trust under the provisions of the Internal Revenue Code of
1954, as heretofore or hereafter amended, with be jeopardized because of any
provision of this Lease, Lessor may request reasonable amendments to this Lease
and Lessee will not unreasonably withhold, delay or defer its consent thereto,
provided that such notifications do not (i) increase the monetary obligations of
Lessee pursuant to this Lease, or (ii) in any other manner adversely affect its
interest in the premises.

59. MONTHLY RENT: The monthly rental rate shall be as follows:

                8/8/98 - 8/31/99    $24,803.00
                9/1/99 - 8/31/00    $25,795.00
                9/1/00 - 8/31/O1    $26,827.00
                9/1/02 - 8/31/02    $27,900.00
                9/1/02 - 8/31/03    $29,016.00

60. COMMON AREA OPERATING EXPENSES (CAO): CAO charges are estimated at $.09PSF
and shall be paid monthly as additional rent. For the first twelve (12) months,
CAO charges are estimated at $4853.00/MO. These charges are defined in Article
4.

61. SECURITY DEPOSIT: The security deposit owing on this Lease Agreement is
$24,803.00. If, at the end of the twenty-fourth (24") month, Lessee has never
been in default of this Lease Agreement, Lessor shall apply the security deposit
to the rent owing for the twenty-fifth (25") month.

LESSOR IMPROVEMENTS: In consideration of the execution of this Lease Agreement,
Lessor shall at Lessor's sole cost and expense, provide the following:

                     a. Remove all existing rooms within the warehouse area.
                     b. Remove the vents in the warehouse.
                     c. Repair the roof from any roof penetrations caused by the
                        vents.
                     d. All electrical, plumbing and HVAC shall be in reasonable
                     working order.

Additionally, Lessor shall provide Lessee with a tenant improvement allowance of
$53,920.00. This amount will be processed after execution of this Lease
Agreement.

All additional modifications, refurbishments and/or improvements shall be at
Lessee's sole cost and expense.

63. LESSEE IMPROVEMENTS: Lessor acknowledges that Lessee shall be improving the
existing office area and adding additional HVAC. Lessor shall approve all
improvements to the premises. All work must be done by a licensed contractor and
per all City of Vista codes and regulations.

64. OPTION FOR ADDITIONAL SPACE: Per the terms of their Lease, Hunter Industries
has First Right of Refusal for additional space in Bldg. 1215 Park Center Drive.
If Hunter Industries refuses the space, or additional space is available, Lessee
then has the Right of Refusal for space in Bldg. 1215. Upon notification of
Right of Refusal by Lessor, Lessee has five (5) business days to negotiate and
accept or refuse the space. If Lessee refuses the space, Lessor has the right to
market and lease the space to any prospective tenant, For a period of thirty
(30) days from the date Lessee refuses the space, if Lessor offers the space to
a prospective tenant at a rate lower than the offer to Lessee, Lessor must
present same offer to Lessee. Lessee has three (3) business days to accept or
refuse said offer.

65. ROOF REPLACEMENT: Lessor shall be responsible for the re-roofing of Bldg.
1215 with warranty for no less than 7 years. The exact date has not been
determined, but is estimated to occur during the fiscal year 1999. Work is to be
completed by a licensed roofing contractor and there shall be no unreasonable
disruption of Lessee's work during the replacement time. Lessor and roofing
contractor shall be responsible for any damage to NAI installed air handling
equipment. Lessee shall not be responsible for roof maintenance until after roof
is replaced.

<PAGE>   16

ADDENDUM
Page three

66. OPTION TO EXTEND: Lessee shall have the option to extend the term of this
Lease ("Option") on ALL OF the terms, conditions, covenants and provisions,
contained in this Lease, except for the Monthly Rent, for two (2) additional
terms of five (5) years following the Termination Date. Each Option Term shall
commence on the day immediately following the Termination Date.

Lessee may exercise each Option by giving written notice of exercise of the
Option to Lessor at least one hundred twenty (120) days before the Termination
Date. If Lessee is in default on the date of giving the Option Notice, the
Option Notice shall be totally ineffective. If the Option Notice is not given,
the Option shall automatically expire and be of no further force or effect.

The Option granted to Lessee in this Lease is personal to the original Lessee
and may be exercised only by the original Lessee while physically occupying the
Premises. The Option may not be exercised or assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee. Any consent by
Lessor to an assignment of the Lease or a sublet of the Premises, or any portion
thereof, shall not be construed as a waiver of this prohibition.

Monthly Rent during each Option period shall be at Fair Market Value, as
determined by Lessor, at the time Lessor receives the Option Notice. In the
event the Lessor and Lessee cannot agree on the new base rent, the matter shall
be submitted for decision to a panel of three arbitrators. Lessor and Lessee
shall each appoint one arbitrator who shall by profession be a licensed
commercial real estate broker or an NAI real estate appraiser, and who shall be
familiar with the premises Building and have been active in the brokering or
appraisal of properties in an area within a three (3) mile radius of the
Premises. Each such arbitrator shall be appointed within fifteen (15) days after
Lessee's notice to Lessor of its election to have New Base Rent determined by
this arbitration procedure. The two arbitrators so appointed shall within
fifteen (15) days of the date of the appointment of the last appointed
arbitrator agree upon and appoint a third arbitrator who shall be qualified
under the same criteria set forth hereinabove for qualification of the initial
two arbitrators. Failing such agreement, either Lessor or Lessee shall have the
right to petition for the appointment of the third arbitrator by the Presiding
Judge of the Superior Court of the County of San Diego. The three arbitrators
shall within thirty (30) days of the appointment of the third arbitrator reach a
decision as to whether the parties shall use Lessor's or Lessee's proposed New
Base Rent, and shall notify Lessor and Lessee therefore. The decision of the
majority of the three arbitrators shall be binding upon Lessor and Lessee. The
cost of the arbitration shall be paid by Lessor and Lessee equally. In no event,
shall the monthly rent for the Option term be less than a four percent (4%)
increase over the previous year's monthly rent. Upon agreement to the terms of
the Option, Lessor shall immediately execute an Extension of Lease Agreement.
All rights of Lessee with respect to the Option shall terminate and be of no
further force or effect if Lessor and Lessee do not come to agreement on the
Option. Neither Lessor nor Lessee shall have the right to have a court or third
party set the Monthly Rent.

<PAGE>   17

                                   EXHIBIT "A"
                                   SITE PLAN

THIS EXHIBIT IS ATTACHED TO AND MADE PART OF THE LEASE DATED JULY 17, 1998 BY
AND BETWEEN: PACIFIC GULF PROPERTIES, INC., a Maryland corporation as LESSOR and
NATURAL ALTERNATIVES INTERNATIONAL, INC., a Delaware corporation as LESSEE, for
the premises located at 1215 Park Center Drive, Suites C/D/E, Vista, CA 92083.

                           VISTA DISTRIBUTION CENTER

                                  [SITE PLAN]

<PAGE>   18

                                   EXHIBIT "B"
                               RULES & REGULATIONS

THIS EXHIBIT IS ATTACHED TO AND MADE PART OF THE LEASE dated July 17, 1998, BY
AND BETWEEN: PACIFIC GULF PROPERTIES, INC., a Maryland corporation as Lessor and
NATURAL ALTERNATIVES INTERNATIONAL, INC., a Delaware corporation as LESSEE, for
the premises located at 1215 Park Center Dr., Suites C/D/E, Vista, CA 92083.

1.       Lessee shall be entitled to park in the vehicle parking spaces provided
         in Section 1.11 in common with other tenants of Lessor. Lessee agrees
         not to overburden the parking facilities and agrees to cooperate with
         Lessor and other tenants in the use of parking facilities. Lessor
         reserves the right in its absolute discretion to determine whether
         parking facilities are becoming crowded and, in such event, to allocate
         parking spaces among Tenants or to designate specific areas within
         which Lessee must park.

2.       No automobile, recreational vehicle or equipment, other than Lessee's
         trucks, shall remain upon the common area longer than twenty-four (24)
         hours. No automobile, recreational vehicle, commercial vehicle
         and/or equipment may be dismantled, repaired, serviced, washed, waxed
         and/or cleaned within the common area.

3.       Lessee shall not permit the obstruction of any Common Areas, including
         driveways, walkways and stairways.

4.       Signs shall conform to Sign Criteria established from time-to-time by
         Lessor. No other signs, placards, A-Frames, pictures, advertisements,
         merchandise, balloons, names or notices shall be inscribed, displayed,
         printed or affixed on or to any part of the outside of the building
         and/or common areas, without the prior written consent of Lessor.
         Lessor shall have the right to remove any such non-conforming signs,
         placards, A-Frames, pictures, advertisements, merchandise, balloons,
         names and/or notices, at any time, without notice to Lessee and at the
         expense of Lessee.

         No rooftop and/or ground level cold air balloons shall be displayed
         without prior written consent of Lessor. No parking lot sales shall be
         permitted, except at times and dates previously determined by Lessor
         and with prior written consent by Lessor.

5.       No Lessee, employee and/or invitee shall go upon the roof of the
         building without Lessor's prior written consent.

6.       Lessee is responsible for placing all garbage and refuse in the trash
         bins provided throughout the common area by Lessor. Trash bins are to
         remain in the trash enclosures provided by Lessor.

         Lessee may contract for Lessee's own trash bin to be kept inside the
         leased premises. If Lessee is regularly disposing of an unusually large
         amount of trash, Lessee shall receive written notice from Lessor, and
         Lessee shall be required to contract for trash bin to be kept inside
         the leased premises.

7.       Recycle bins are provided throughout the common area for all cardboard.
         All empty cardboard boxes are to be placed inside the recycle bins, not
         the regular trash bins.

8.       No furniture, mattresses, large appliances, pallets, concrete, large
         construction materials and/or oversized items of any kind are to be
         placed in the trash bins, in the trash enclosures, or on the ground
         anywhere in the common area. No trash, regardless of size, is to be
         left anywhere in the common area, except in the trash bins provided.

         If Lessee is found to be in violation of this regulation, Lessor shall
         have the items picked up and placed in the bins, and/or hauled away,
         and Lessee shall be fined fifty dollars ($50.00) for each occurrence
         and in addition, shall be charged the hauling fees.

9.       No open storage shall be permitted anywhere within the common areas.

10.      Lessee shall not install any radio or television antenna, satellite
         dish, loudspeaker, or other devise on the roof or exterior walls of the
         building. No loudspeakers, televisions, phonographs, radios or other
         devices shall be used in such a way as to be heard or seen outside of
         the premises without the prior written consent of the Lessor.

11.      No vending machine(s) of any description shall be installed, maintained
         or operated upon the common areas.

<PAGE>   19

Rules & Regulations
Page two

12.      No noxious or offensive trade or activity shall be carried on upon any
         units or any part of the common area, nor shall anything be done
         thereon which may be or which shall in any way interfere with the quiet
         enjoyment of each of the other tenants of the Center or which shall in
         any way increase the rate of insurance or overburden utility facilities
         from time-to-time existing in the Center.

13.      The leased premises shall not be used for lodging or for any improper,
         immoral or objectionable purpose.

         No cooking shall be done or permitted by Lessee on the Premises, except
         that use by Lessee of Underwriters Laboratory approved equipment for
         brewing coffee, tea, hot chocolate and/or similar beverages, which
         shall be permitted, provided that such equipment and use is in
         accordance with all applicable federal, state, county and city laws,
         codes, ordinances, rules and regulations. Lessee shall have the right
         to use microwave ovens and refrigerators to serve its employees and
         customers.

14.      Shutters and/or blinds may be installed as window covers. No windows
         shall be covered with aluminum foil, newspapers or other material, not
         designed for use as a window cover.

15.      There shall be no domestic animals allowed in or on the premises and/or
         common areas at any time, unless with Lessor's prior written consent.
         Lessor reserves the right to revoke said consent at any time.

      * Lessor may waive any one or more of these Rules & Regulations for the
        benefit of Lessee, but no such waiver by Lessor shall be construed as a
        waiver of such Rules & Regulations in favor of Lessee, nor prevent
        Lessor from thereafter enforcing any such rules & Regulations against
        any or all of the Tenants in the Project.

      * These Rules & Regulations are in addition to, and shall not be construed
        to, in any way, modify or amend, in whole or in part, the terms,
        covenants, agreements and conditions of this Lease Agreement.

      * Lessor reserves the right to change, rescind or to make such other and
        reasonable rules and regulations as in its judgement may from time to
        time be needed for safety and security, for care and cleanliness of the
        Project and/or for the preservation of good order therein.

      * Lessee shall be deemed to have read these Rules & Regulations and to
        have agreed to abide by them, and any additional rules and regulations
        which are adopted, as a condition of Lessee's occupancy of the premises
        herein leased.

      * Lessee shall also be responsible for the observance of all of the
        foregoing rules and regulations by Lessee's employees, agents, clients,
        customers, invitees and/or guests.

<PAGE>   20

                         HAZARDOUS MATERIALS DISCLOSURE
                                   EXHIBIT "C"

THIS EXHIBIT IS ATTACHED TO AND MADE PART OF THE LEASE DATED July 17, 1998 BY
AND BETWEEN: PACIFIC GULF PROPERTIES, INC., a Maryland corporation as LESSOR,
and NATURAL ALTERNATIVES INTERNATIONAL, INC., a Delaware corporation as LESSEE,
for the premises located at 1215 Park Center Dr., Suites C/D/E, Vista, CA 92083.

I, MARK LEDOUX represent that the following disclosure accurately reflects the
usage or nonusage of hazardous materials on the above referenced premises:

Description of Lessee's usage and business operations (if not applicable, please
state "none"):

Petroleum products, chemicals, container sizes, and amounts to be utilized by
Lessee at any time during tenancy:
                                  ----------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Method and storage locations of hazardous materials:
                                                    ----------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

List any operations discharges in or on Premises:
                                                 -------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

I, MARK LEDOUX, certify that I will comply fully with all applicable
environmental laws governing hazardous materials and their usage in our
operations.

 "LESSEE"
 NATURAL ALTERNATIVES INTERNATIONAL, INC.
   a Delaware corporation

 BY: /s/ MARK LEDOUX
    -----------------------------
            Mark LeDoux
 Its:
     ----------------------------

<PAGE>   21

                              LABORATORY CHEMICALS
                    (WITH VOLUMES KEPT ON SITE LISTED BELOW)

1.  ACETONE - 10 LITERS

2.  PYRIDINE - 2 LITERS

3.  ACETONITRILE - 15 LITERS

4.  ETHYL ACETATE - 3 LITERS

5.  BUTYL ALCOHOL - 3 LITERS

6.  2-PROPANOL - 20 GALLONS

7.  TETRAHYDROFURAN - 8 LITERS

8.  HEPTANE - 3 LITERS

9.  ETHER - 3 LITERS

10. TRIETHYLAMINE - 3 LITER

11. PHENOLPHTHALEIN - 1/2 LITER

12. DIMETHOXYPROPANE - 3 LITERS

13. ETHYL ALCOHOL - 3 LITERS

14. ISOPROPINOL - 20 GALLONS

15. METHANOL - 15 LITERS

16. HEXANES - 15 LITERS

<PAGE>   22

22. PHOSPHORIC ACID - 1/4 LITER

23. FORMIC ACID - 1/4 LITER

24. ACETIC ACID, GLACIAL - 3 LITERS

25. NITRIC ACID - 3 LITERS

26. HYDROCHLORIC ACID - 3 LITERS

27. SULFURIC ACID, ION - 3 LITERS

PRODUCTION CHEMICALS
--------------------

1. ISOPROPYL ALCOHOL - 5 GALLONS

2. BLEACH - 1-3 GALLONS

ADDITIONAL CHEMICALS ON SITE
----------------------------

1. ARGON - 1-160 LITER DEWER

2. NITROGEN - D SIZE CYLINDER<PAGE>   1
                                                                    EXHIBIT 10.3

                          STANDARD BUSINESS PARK LEASE

     THIS LEASE (hereinafter called the "Lease"), executed in duplicate is
entered into this 9th day of January, 1995, by and between Brigitte Zemmrich
hereinafter called "Lessor", and Natural Alternatives International, hereinafter
called "Lessee". Lessor and Lessee hereby agree as follows:

1.   LEASED PREMISES. Lessor hereby lets and demises to Lessee, and Lessee
hereby hires from Lessor, on the terms, covenants, and conditions set forth
herein, those premises designated in Exhibit "A" attached hereto and
incorporated herein, hereinafter called the "Leased Premises", known as and
located at 425 Ryan Drive, Suite A, San Marcos, CA 92069 (approximately 5,612
square feet), being a portion of a building, hereinafter called the "Building",
located individually or as a group of contiguous buildings including the land
and all improvements thereon, hereinafter called the "Business Park," other
portions of which building and which business park shall from time to time be
leased by Lessor to other Lessees.

2.   TERM. The term of the Lease (the "Lease Term") shall be for Fifteen (15)
months, commencing on February 1, 1995, and ending April 30, 1996.

3.   LATE OR EARLY DELIVERY OF POSSESSION. In the event that Lessor is unable to
deliver possession of the Leased Premises to Lessee on the above stated
commencement date for any reason whatsoever, Lessor shall not be subject to any
liability for loss or damages resulting therefrom, nor shall the validity of
this Lease be affected nor the term thereof extended, but under such
circumstances there shall be a proportionate reduction in rent to cover the
period of time from the above stated commencement date to the date that
possession of the Leased Premises is tendered to Lessee; provided, however, that
if possession of the Leased Premises is not tendered by Lessor to Lessee within
ninety (90) days following the above stated commencement date, then at any time
after the ninety (90) day period and prior to tender by Lessor of possession,
Lessee may terminate this Lease by delivery of written notice of such
termination to Lessor, and thereupon all rights and obligations hereunder of
both parties shall cease. If Lessor is able to deliver possession of the Leased
Premises to Lessee prior to the above stated commencement date and Lessee
accepts such early possession, the ending date of the Lease Term shall not be
affected but the Lease Term shall be extended so as to advance the commencement
date to the date of early acceptance of possession, and Lessee shall pay Lessor,
at the time Lessee takes possession, a proportionate increase in rent to cover
such additional period of time. The Leased Premises shall be deemed to have been
delivered to Lessee upon Lessor's tender of the Leased Premises in a
substantially complete condition, subject to minor punch list items.

4.   RENT.

     (a) Lessee agrees to pay to Lessor, at such place as Lessor may designate,
without deduction, offset, prior notice or demand, the minimum rent for the
Leased Premises during the Lease Term of Thirty Eight Thousand Seven Hundred
Ninety and no/100 DOLLARS ($38,790.00) in lawful money of the United States,
payable in monthly installments of Two Thousand Five Hundred Eighty Six and
no/100 ($2526 Base Rent + $60 Water) Dollars ($2,586.00). All payments of rent
shall be due and payable in advance on the first day of each calendar month
during the Lease Term. The amount of Five Thousand One Hundred Seventy Two and
no/100 DOLLARS ($5,172.00) is paid herewith to Lessor upon the execution of this
Lease, receipt of which is hereby acknowledged, which sum shall represent
payment of First Month's Rent plus Security Deposit DOLLARS ($-0-) for rent
during the remaining portion of the calendar month in which the Lease Term
commences, plus the payment of DOLLARS ($-0-) which sum shall represent payment
of the month's rent. Lessee acknowledges and agrees that Lessor will not be
required to send monthly statements or invoices as a condition to Lessee's
obligation of timely payment of rent under this Lease, and that Lessee shall not
have any right of offset against any rent coming due under this Lease.

     (b) Lessee acknowledges that late payment by Lessee to Lessor of rent or
other sums due hereunder will cause Lessor to incur costs in excess of those
contemplated by this Lease, the exact amount of which would be extremely
difficult and impractical to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or deed of trust covering the Lease
Premises. Therefore, in the event that Lessee should fail to pay any installment
of rent or any other sum due under this lease after such amount is due, Lessee
shall pay to Lessor as additional rent a late charge equal to five percent (5%)
of each such installment or other sum, or Twenty Five Dollars ($25.00) per
month, whichever is greater.

     (c) Should any payment be made by a check, and following its deposit by
Lessor such check is returned for any reason, Lessee hereby agrees to pay to
Lessor, as additional rent, a service charge of FIFTEEN DOLLARS ($15.00).

     (d) In the event that Lessee requests Lessor to construct or to permit the
construction of additional tenant improvements and Lessor agrees to permit such
additional tenant improvements, all as provided by paragraph 8 below, Lessee
agrees that the rent shall be increased by a sum to be determined by the parties
prior to construction of the additional tenant improvements.

     (e) The minimum annual rent set forth in section (a) of this paragraph 4
shall be subject to an upward only adjustment at the end of each one-year period
of the Lease Term hereof, including option periods, if any. The first such
adjustment shall take effect beginning with the first day of the first full
calendar month following one year from the date of commencement of the Lease
Term hereof, but if the date of commencement is the first day of a month, then
the adjustment shall take effect one year thereafter, at which time the monthly
rental payment for the ensuing twelve (12) months shall be adjusted upward only
to a new amount, which new amount shall be the product of the minimum annual
rent set forth in section (a) of paragraph 4 of this Lease multiplied by a
fraction, the denominator of which is the Consumer Price Index as of the date of
the commencement of the Lease Term, and the numerator of which is the Consumer
Price Index for the month of the

                                       1
<PAGE>   2
appropriate adjustment date. The Consumer Price index referred to herein shall
be the 1967 = 100; Consumer Price Index published by the Bureau of Labor
Statistics of the United States Department of Labor. If such index is not
published for the period for which a rental adjustment determination is to be
based upon, another index generally recognized as being comparable and
authoritative shall be substituted by Lessor. Inasmuch as the appropriate index
numbers may not be available on the date when any such adjustment is to be
effective, the latest available index numbers shall be used until such time as
the appropriate index numbers become available, at which time the calculation
shall then be made as soon as reasonably possible, and the rent payment next
falling due shall be appropriately adjusted so as to include both the correctly
adjusted monthly rent and any additional amount required to bring such adjusted
monthly rent current from the intended adjustment date.

5.   DEPOSITS. Lessee has deposited with Lessor a security deposit in the sum of
Two Thousand Five Hundred Eighty Six and no/100 dollars (2,2586.00), receipt of
which is hereby acknowledged, as security for the full performance by Lessee of
all of the provisions of this Lease. Should Lessee comply with all of the terms,
covenants and conditions of this Lease by said Lessee to be performed, and
promptly pay all rent provided for herein and all other sums payable by Lessee
to Lessor hereunder, then the said security deposit, except for FIFTY DOLLARS
($50.00) thereof which is a nonrefundable lease origination fee, shall be
returned in full to Lessee upon expiration of this Lease, after surrender to
Lessor of the Lease Premises and after prompt inspection by Lessor whereby
Lessor has determined that the Leased Premises are in as good condition as on
the date of the commencement of the Lease Term set forth above, excepting only
ordinary wear and tear. Lessee's interest in said security deposit is not
assignable by Lessee. Lessor may at its option apply said security deposit, or
so much thereof as may reasonably be necessary, to remedy defaults by Lessee in
payment of rent, to repair damages to the Leased Premises or the Building caused
by Lessee, to claim the Leased Premises upon termination of the Lease, or to
compensate Lessor for any loss or damage sustained or suffered by Lessor due to
any breach of this Lease by Lessee. In the event that said sum or any portion
thereof is so applied by Lessor, Lessee shall, upon written demand of Lessor,
immediately remit to Lessor an amount sufficient to restore said deposit to the
original sum. The exercise of the options given Lessor under this section shall
in no way affect any other remedy available to Lessor. Following the termination
of this Lease, any remaining portion of said security deposit shall be returned
to Lessee. Lessor shall not be required to keep this security deposit separate
from its general funds. Lessor's obligation with respect to the security deposit
is that of a debtor, not a trustee, and the security deposit may be commingled
or dissipated or both, and in any event no interest shall accrue thereon. Should
the interest of Lessor in the Leased Premises be sold, Lessor may deliver funds
deposited by Lessee to the purchaser of such interest and thereupon Lessor shall
be discharged from any further liability concerning such deposits.

6.   UTILITIES. Lessee shall pay for all water, gas, heat, light, electricity,
telephone service and all other service metered or chargeable to the Leased
Premises, and furnish such deposits as each public utility providing any such
service may require. Lessor reserves the right to install separate meters for
any public utility service the Leased Premises for which a meter is not
presently installed, in which event Lessee shall make payments when due directly
to the appropriate public utility. As additional rent, Lessee shall pay to
Lessor the sum of $-0- (Trash Removal is Lessee's Responsibility) per month for
trash removal, and when water service is not separately metered, Lessee shall
pay to Lessor for restroom water service the sum of $60.00 (Sixty and no/100)
per month payable monthly, in advance, concurrently with the payment of rent as
specified in paragraph 4 above. Lessee agrees not to over-burden the trash
facilities. Lessee shall not overload any of the mechanical, electrical,
plumbing, sewer or other utility equipment. If there is an increase in Lessee's
use of trash removal service or facilities over the normal needs initially
anticipated by Lessor, or if Lessee uses the water service for other than normal
restroom purposes, Lessee agrees to pay such additional monthly charges as may
reasonably be determined by Lessor.

7.   USE OF PREMISES.  The Leased Premises may be used and occupied only for
Light Manufacturing and all other lawful uses, and for no other purpose or
purposes with Lessor's express written consent. Lessee shall at all times comply
with all laws, ordinances, orders, and regulations affecting the Leased Premises
or the cleanliness, safety, occupation or use

                                       2
<PAGE>   3
thereof, Lessee shall not do or permit anything to be done in or about the Lease
Premises, or bring or keep anything in the Leased Premises, that will in any way
increase the premiums for, or the existing rate of, insurance on the Building or
the Business Park without the express written consent of Lessor, nor shall any
part of the Leased Premises be used for residential purposes or for the storage
of any animal. Should any activity of Lessee result in an increase in any
insurance premium covering the Building or the Business Park, Lessee shall pay
the entire amount of such increase. Lessee shall not perform or permit any act
or carry on any practice which may injure or impair the Building or any portion
of the Business Park, or be a nuisance or menace to, or materially or
unreasonably interfere with the permitted activities of, other lessees within
the Business Park. Lessee shall not cause, maintain or permit any outside
storage on or about the Leased Premises. Lessee agrees not to use or suffer or
permit the Leased Premises or any part thereof to be used for any purpose other
than as hereinabove specifically permitted. Lessee shall not conduct, or permit
to be conducted, any sale by auction upon the Leased Premises. Lessee shall not
cause or permit any loud noise, music, or loudspeaker sound system upon the
Leased Premises.

8.  ALTERATIONS; TRADE FIXTURES. Lessee agrees not to make or permit or suffer
to be made any alterations, improvements, or additions to the Leased Premises
or any part thereof without the prior written consent of Lessor, except such
repairs as Lessee is required to make by the provisions of this Lease. Should
Lessee desire to alter the Leased Premises and should Lessor give written
consent to such alterations, Lessee shall, at Lessor's option contract with a
contractor approved by Lessor for the construction of such alterations. All
such work, regardless of by whom performed, shall be done at such time and in
such manner as Lessor may from time to time designate.

Any alterations of or additions to the Leased Premises, excepting movable
furniture and trade fixtures, shall, at Lessor's option, become part of the
realty and belong to Lessor; however, Lessee may, upon written consent of
Lessor, install trade fixtures (exclusive of trade fixtures or other trade
equipment which would effectively convert warehouse area to additional office
area), machinery of other trade equipment in conformance with the ordinances of
the applicable city and county, any covenants, conditions or restrictions of
record, and such rules as Lessor shall from time to time establish, and the
same may be removed upon the termination of this Lease provided that Lessee is
not then in default under any of the terms or conditions of this Lease and
further provided that the Leased Premises would not be damaged by such removal.

Upon the termination of this Lease, Lessee shall return the Leased Premises in
the same condition as when rented to Lessee, reasonable wear and tear excepted.
Throughout the term hereof, Lessee shall take good care of the Leased Premises,
its appurtenances, fixtures, and equipment, and shall not drill into, disfigure,
or deface any part of the Building or the buildings, grounds, or any part or
portion of the Business Park, or suffer the same to be done. Lessee shall
immediately notify Lessor and repair the Leased Premises, its appurtenances,
fixtures, and equipment, whenever needed as a result of the misuse or neglect
of Lessee. In lieu of such repairs by Lessee, Lessor may, at its option,
perform such repairs for Lessee and in that event the cost thereof shall be
determined on statements rendered by Lessor to Lessee and the sum so determined
shall be payable to Lessor upon delivery of such statement.

9.  MECHANICS' AND OTHER LIENS. Lessee shall neither permit nor suffer any
mechanics' lien or other lien to be filed against the Leased Premises or the
Building or any other part of the Business Park, by reason of any work or labor
performed for, materials supplied to, or obligations incurred by, Lessee or at
Lessee's request or consent, or at the request or consent of any of Lessee's
agents, employees, sublessees, or invitees.

Should any such lien be filed, Lessee shall cause it to be removed forthwith.
Should Lessee fail to discharge any such lien or fail to furnish an insurance
bond in twice the amount of such lien against the foreclosure thereof, Lessor
may, but shall not be obligated to, discharge the same or take such other
action as Lessor deems necessary to prevent a judgment or foreclosure on said
lien from being executed against any portion of the Business Park, and all
costs and expenses thereof, including reasonable attorney's fees incurred by
Lessor, shall be repaid by Lessee to Lessor on written demand therefor.

Nothing in this Lease shall be construed as in any way constituting a consent or
request by Lessor, expressed or implied, by inference or otherwise, to any
contractor, subcontractor, laborer, or materialman for the performance of any
labor or the furnishing of any materials for any specific or general
improvement, alteration, or repair of or to the Leased Premises or any portion
of the Business Park. Lessor shall have the right in the event of any
construction, alteration, repair, or work in, on, or to the Leased Premises or
to any part thereof, to post and file such notices of nonresponsibility as are
now or shall hereafter be provided by law, and Lessee shall give Lessor written
notice five (5) days prior to employing any laborer or contractor to perform any
such service.

10.  ACCEPTANCE OF PREMISES. Lessee acknowledges that Lessee has thoroughly
examined the Leased Premises and that no statement or representation not herein
expressed as to the past, present or future condition or repair thereof, or of
the Building or the Business Park, has been made by or on behalf of Lessor. By
taking possession hereunder, Lessee acknowledges that the Leased Premises are
in good and sanitary order, condition and repair and Lessee hereby waives any
claim or right on account of the condition thereof.

11.  SURRENDER OF THE LEASED PREMISES. At the expiration of the tenancy hereby
created, Lessee shall surrender the Leased Premises in the same condition as the
Leased Premises were in upon delivery of possession thereto under this Lease,
reasonable wear and tear excepted, and damage by unavoidable casualty excepted
to the extent that the same is covered by Lessor's fire insurance policy, and
Lessee shall surrender all keys for the Leased Premises to Lessor at the place
then fixed for the payment of rent and shall inform Lessor of all combinations
on locks, safes and vaults, if any, in the Leased Premises. Lessee shall, at the
option of Lessor, remove all of Lessee's trade fixtures before surrendering the
Leased Premises and repair any damage to the Leased Premises caused thereby. If
the Leased Premises are not surrendered immediately upon termination of this
Lease, Lessee shall be responsible to Lessor for all damages which Lessor may
suffer by reason thereof, and Lessee shall indemnify Lessor against, and hold
Lessor harmless from, any and all claims made by any succeeding lessees against
Lessor, resulting from delay in delivering possession of the Leased Premises to
such succeeding lessee, so far as such delay is occasioned by the failure of
Lessee to so surrender the Leased Premises. Lessee's obligation to observe and
perform this covenant shall survive the expiration or other termination of the
term of this Lease.

12.  WASTE. Lessee shall not commit or suffer any waste upon the Leased
Premises or any portion of the Business Park.

13.  INSURANCE. No use shall be made or permitted to be made of the Leased
Premises, nor acts done, which will increase the premiums for, or the existing
rate of insurance on, the Building or the Business Park, or cause the
cancellation of any insurance policy covering the Building or the Business Park,
nor shall Lessee sell, or permit to be kept, used or sold, in or about the
Leased Premises, any article which may be prohibited by standard form fire
insurance policies. Lessee shall, at its sole cost and expense, comply with any
and all requirements pertaining to the Leased Premises established by any
insurance organization or company, which requirements are necessary for the
maintenance of reasonable fire and public

                                       3
<PAGE>   4
liability insurance covering the Leased Premises, the Building, or the Business
Park.

Lessee shall maintain in full force and effect on all of its fixtures and
equipment in the Leased Premises a policy or policies of fire and extended
coverage insurance with standard coverage endorsement to the extent of at least
eighty percent (80%) of their insurable value. During the Lease Term the
proceeds from any such policy or policies of insurance shall be used for the
repair or replacement of the fixtures and equipment so insured. Lessor shall
have no other interest in Lessee's insurance upon Lessee's equipment and
fixtures. Lessee shall furnish Lessor with a certificate of such policy within
thirty (30) days of the commencement of the Lease Term, and whenever requested
by Lessor, Lessee shall satisfy Lessor that such policy is in full force and
effect. Lessor shall not be required to carry any insurance on Lessee's
possessions.

During the entire Lease Term, Lessee shall, at Lessee's sole cost and expense,
provide and keep in force, policies of insurance written by companies acceptable
to Lessor, insuring Lessor and Lessee jointly against liability for bodily
injury with limits of not less than FIVE HUNDRED THOUSAND DOLLARS ($500,000) for
injuries to or death of one person and ONE MILLION DOLLARS ($1,000,000) for
injuries to or death of more than one person in any one occurrence, and with
limits of not less than FIVE HUNDRED THOUSAND DOLLARS ($500,000) per occurrence
for damage to property, such limits to be for any greater amounts as may be
reasonably indicated by circumstances from time to time existing. Lessee shall
furnish Lessor with a certificate of such policy and whenever requested shall
satisfy Lessor that such policy is in full force and effect. Such policy shall
name Lessor as an additional insured and shall be primary and noncontributing
with any insurance carried by Lessor. The policy shall further provide that it
shall not be cancelled or altered without twenty (20) days' prior written notice
to Lessor.

14.     MUTUAL WAIVER OF SUBROGATION.  Lessor and Lessee each hereby waive any
and all rights of recovery, causes of action, claims and demands against the
other, or against the officers, employees, agents, or representatives of the
other that may hereafter exist, by reason of the loss, destruction or damage
occasioned to such waiving party of its property or the property of others under
its control, caused by any peril included within the classification of fire and
extended coverage insurance, to the extent that such loss or damage is insured
against under any insurance policy of the waiving party in force at the time of
such loss or damage.

15.     INDEMNIFICATION BY LESSEE.  This Lease is made on the express condition
that Lessor shall not be liable, or suffer loss by reason of injury to person or
property, from whatever cause, all or in any way connected with the condition or
use of the Leased Premises or the improvements or personal property therein or
thereon, including without limitation any liability for injury to the person or
property of Lessee, its agents, officers, employees or invitees. Except as
provided in paragraph 14 hereof with respect to waiver of subrogation, Lessee
agrees to indemnify Lessor and Lessor's agents, and hold Lessor and Lessor's
agents harmless from any and all liability, loss, cost, claim, or obligation on
account of, or arising out of, any such injury or loss however occurring,
including without limitation Lessee's use of the Leased Premises, the Building,
or the Business Park, or from the conduct of Lessee's business, or from any
activity, work, or thing done, permitted or suffered by Lessee in or about the
Leased Premises, the Building, the Business Park, or elsewhere. Lessee shall
further indemnify and hold Lessor and Lessor's agents harmless from and against
any and all claims arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under this Lease, or arising from
any negligence of Lessee or Lessee's agents, contractors, or employees, and from
and against all costs, attorneys' fees, expenses, and liabilities incurred in
the defense of any such claim or any action or proceeding brought thereon.

In the event that any action, suit, or proceeding is brought against Lessor,
or any of Lessor's agents by reason of any such occurrence, then upon Lessor's
request, Lessee shall, at Lessee's expense, resist and defend such action, suit
or proceeding, or cause the same to be resisted and defended by counsel
designated by the insurer whose policy covers the occurrence or by counsel
designated by Lessee and approved by Lessor. The obligations of Lessee under
this section arising by reason of any occurrence taking place during the Lease
Term or any other time of possession or use of the Leased Premises by Lessee,
shall survive any termination of this Lease.

16.     WAIVER OF CLAIMS.  Lessee hereby waives all claims against Lessor for
damages to goods, wares and merchandise in, upon or about the Leased Premises
and for injury to Lessee, its agents, employees, invitees, or third persons in
or about the Leased Premises from any cause arising at any time.

Lessor shall not be liable for injury to Lessee's business or loss of income
therefrom or for damage which may be sustained by the person, goods, wares,
merchandise, or property of Lessee, its employees, invitees, customers, agents,
or contractors, or any other person in or about the Leased Premises, the
Building, or the Business Park caused by or resulting from fire, steam,
electricity, gas, water, or rain, which may leak, or flow from or into any part
of the Leased Premises, or from the breakage, leakage, obstruction, or other
defects of pipes, sprinklers, wires, appliances, plumbing, heating, air
conditioning, or lighting, or fixtures of the same, whether such damage or
injury results from conditions arising upon the Leased Premises, the Building,
or the Business Park, 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 inaccessible to Lessee. Lessor shall not be liable for any damages arising
from any act or neglect of any other lessees of the Business Park.

17.     MAINTENANCE AND REPAIRS.  Lessee shall, at all times and at its sole
cost and expense, keep and maintain the Leased Premises and appurtenances and
every part thereof (excepting heating and air conditioning equipment, exterior
walls, and roofs which shall be maintained by Lessor, the costs of which shall
be part of common area maintenance), including plumbing, windows and skylights,
any store front, glass, carpet, draperies, and the interior of the Leased
Premises, in good and sanitary order, condition and repair. Lessee shall, at its
sole cost and expense, keep and maintain all utilities, fixtures and mechanical
equipment used by Lessee in good order, condition, and repair. In the case of
equipment installed by Lessor for Lessee where Lessee is responsible for
maintenance of the equipment, such maintenance will be provided by a reputable
maintenance service company acceptable to Lessor at Lessee's expense. Evidence
of such a service contract shall be provided to Lessor by Lessee upon Lessor's
request.

If Lessee refuses or neglects to undertake and properly complete, to the
reasonable satisfaction of Lessor, any matter of repair required of Lessee
hereunder, then Lessor may make such repairs and Lessor shall not have any
liability to Lessee for any loss or damage that may accrue to Lessee's
merchandise, fixtures, or other property or to Lessee's business by reason
thereof, and upon completion thereof, lessee shall pay all of Lessor's costs for
making such repairs plus an additional twenty percent (20%) of such costs for
overhead and supervision, upon presentation of a statement therefor, as
additional rent. Said statement may include interest at the rate of ten percent
(10%) per annum on said total cost from the date of substantial completion of
repairs by Lessor.

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<PAGE>   5
18.  SIGNS, LANDSCAPING. Lessee shall not place, or permit to be placed or
maintained, on any exterior door, wall or window of the Leased Premises any
sign, awning or canopy, or advertising matter or other thing of any kind, and
will not place or permit to be placed or maintained, any decoration, sign,
lettering or advertising matter of the glass of any window or door, or other
place that can be seen through the glass of the Leased Premises without first
obtaining Lessor's written approval and consent. Lessee further agrees to
maintain such sign, awning, canopy, decoration, lettering, advertising matter,
or thing as may be approved be Lessor, in good condition and repair at all
times. Lessee shall not place any sign on a vehicle in the parking areas.

Lessee agrees to pay for the cost and maintenance of a sign identifying Lessee's
business, said sign to be in conformity to existing signs within the building
(white lettering only). Any signs not in conformity may be immediately removed
and destroyed by Lessor without notice. Notwithstanding the foregoing, Lessor
reserves the right, at any time and from time to time, to waive or otherwise
grant exceptions for any other lessee, without in any way waiving or granting an
exception to Lessee's obligation to conform strictly, and Lessee hereby consents
to Lessor's allowing non-conforming signs of other lessees.

Lessor shall have the right to control all landscaping and Lessee shall not in
any way damage or alter the landscaping.

19.  ENTRY BY LESSOR. Lessee shall permit Lessor and Lessor's agents to enter
the Leased Premises at all reasonable times for the purpose of inspecting the
same or for the purpose of maintaining the Building, or for the purpose of
making repairs, alterations, or additions to any portion of the Building,
including the erection and maintenance of such scaffolding, canopies, fences and
props as may be required, or for the purpose of posting notices of
non-responsibility for alterations, additions, or repairs, or for the purpose of
placing upon the Building any usual or ordinary "for sale" signs, without any
rebate of rent and without any liability to Lessee for any loss of occupancy or
quiet enjoyment of the Leased Premises thereby occasioned; and Lessee shall
permit Lessor, at any time within sixty (60) days prior to the expiration of
this Lease, to place upon the Leased Premises any usual or ordinary "to let",
"for lease", "available", or comparable signs.

20. TAXES. Lessee shall pay before delinquency any and all taxes, assessments,
license fees, and public charges levied, assessed or imposed and which become
payable during the Lease Term upon Lessee's fixtures, furniture, appliances or
personal property installed or located in the Leased Premises.

Lessee shall pay to Lessor upon demand as additional rent Lessee's percentage
portion (as set forth in paragraph 4(f) above) of all real property taxes which
shall, during the Lease Term, be assessed against the land and improvements
within the Business Park, in excess of the real property taxes assessed against
such real property for the fiscal year in which the Lease Term commences. As
used herein the term "real property taxes" shall include any form of assessment,
license fee, commercial rental charge or tax, levy, penalty, or tax, or charge
in lieu of, or like, or measured by any such charge or tax, imposed by any
authority having the direct or indirect power to tax, assess, or charge a fee,
including any city, county, state or federal government, or any school,
agricultural, utility, drainage, or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Leased Premises or in
the Building or in the Business Park, and shall include all taxes and charges
levied upon or measured by the rent payable hereunder, whether as a so called
sales tax, transaction privilege tax, excise tax, or otherwise (but no income
taxes shall be payable by Lessee).

21. ENVIRONMENTAL FACTOR ADJUSTMENT. In the event that any tax, assessment,
levy, or surcharge is made upon Lessor or the Building or the grounds of which
the Leased Premises are a part, which is based upon the National Environmental
Policy Act, the California Environmental Quality Act, or any other legislation
or rule, regulation, or ordinance relating to environmental quality or energy
conservation, and which charge is measured by any physical element,
configuration, status, or use of such Building or grounds, or energy use therein
or thereon, Lessee shall pay to Lessor upon demand, as additional rent, Lessee's
percentage portion (as numerically set forth in paragraph 4(f) above) of all
such charges.

22. DESTRUCTION. In the event that the Leased Premises or the Building are
damaged by fire or other perils covered by Lessor's extended coverage insurance,
or in the event that the Leased Premises or the Building are declared unsafe or
unfit for occupancy by any authorized public authority for any reason (other
than Lessee's act, neglect, use or occupation) which declaration requires
repairs to either the Leased Premises or the Building, Lessor shall promptly
make such repairs, provided such repairs can reasonably be undertaken and
completed within sixty (60) days under the laws and regulations of authorized
public authorities, and this Lease shall remain in full force and effect, except
that Lessee shall be entitled to a proportionate reduction of the rent while
such repairs are being made, such proportionate reduction to be based upon the
extent to which the making of such repairs shall materially interfere with the
business carried on by the Lessee in the Leased Premises. If the damage or
declaration is due to the fault or neglect of Lessee or its agents or employees,
there shall be no abatement of rent. If repairs cannot reasonably be undertaken
and completed within sixty (60) days, or repairs cannot be made under the then
current laws and regulations, this Lease may be terminated at the option of
either party, by notice to the other party within sixty (60) days of the damage
or declaration, as of the date specified in such notice, which date shall be no
less than thirty (30) and no more than sixth (60) days after the giving of such
notice. As to any partial destruction (including any destruction necessary in
order to make repairs required by any declaration) for which Lessor is obligated
to repair or may elect to repair under the terms of this paragraph, the
provisions of Section 1932, Subdivision (2), and Section 1933, Subdivision (4),
of the Civil Code of the State of California are waived by Lessee. In the event
that the Leased Premises or the Building of which the Leased Premises are a part
are damaged as a result of any cause other than the perils covered by Lessor's
fire and extended coverage insurance, then Lessor shall have the option: (1) to
repair such damage, this Lease continuing in full force and effect, in which
case the rent shall be proportionately reduced as hereinabove in this paragraph
provided, or (2) give notice to Lessee at any time within sixty (60) days after
such damage terminating this Lease as of the date specified in such notice,
which date shall be no less than thirty (30) and no more than sixty (60) days
after the giving of such notice. In the event of giving notice of termination of
the Lease as provided in this paragraph 22, this Lease shall expire and all
interest of Lessee in the Leased Premises shall terminate on the date so
specified in such notice and the rent, reduced by a proportionate amount, based
upon the extent, if any, to which such damage materially interfered with the
business carried on by Lessee in the Leased Premises, shall be paid up the date
of such termination.

     Notwithstanding anything to the contrary contained in this paragraph 22,
Lessor shall not have any obligation whatsoever to repair, reconstruct, or
restore the Leased Premises when the damage resulting from any casualty covered
under this paragraph 22 occurs during the last twelve (12) months of the term of
this Lease or any extension thereof.

     In no event shall Lessor be required to repair any injury or damage from
fire or other cause, or to make any repairs or replacements of any panels,
decoration, office fixtures, railings, floor covering, partitions, fixtures or
any other property installed in the Leased Premises by Lessee.

                                       5

<PAGE>   6
     Lessee shall not be entitled to any compensation or damages from Lessor for
loss of the use of the whole or any part of the Leased Premises, or Lessee's
personal property, or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.

23. ASSIGNMENT AND SUBLEASING. Lessee shall not sublease the Leased Premises nor
any portion thereof, nor shall Lessee assign any interest under this Lease or
permit the use of the Leased Premises by any person or persons other than
Lessee, whether voluntarily or involuntarily, except upon the written consent of
Lessor. Lessor shall not unreasonably withhold its consent to any assignment of
this Lease by Lessee. Any attempted assignment or subletting without
Lessor's written consent shall be void and shall, at the option of Lessor,
terminate this Lease. Consent by Lessor to any assignment or subletting shall
not release Lessee from its primary liability under the Lease, and Lessor's
consent to one assignment, subletting or occupation or use by a party other than
Lessee shall not be deemed a consent to any other assignment, subletting or
occupation or use by any other party, nor a waiver of Lessor's right to approve
or disapprove thereof.

24. INSOLVENCY. If Lessee or any guarantor of this Lease shall become bankrupt
or insolvent, or unable to pay its debts as such become due, or file any debtor
proceedings, or take or have taken against Lessee or any guarantor in any court
pursuant to any statute either of the United States or of any State a petition
in bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of Lessee's or any such guarantor's
property, or if Lessee or any such guarantor makes an assignment for the benefit
of creditors, or petitions for or enters into such arrangement, and any such
condition, proceedings, petition, appointment, assignment or action continues
unremoved for a period of thirty (30) days, then Lessee shall, for purposes of
this Lease, be deemed to be insolvent and in default under this Lease, and this
Lease shall thereupon terminate, and Lessor, in addition to any other rights or
remedies it may have, shall have the immediate right or reentry and may remove
all persons and property from the Leased Premises and such property may be
removed and stored in a public warehouse or elsewhere at the cost of, and for
the account of Lessee, all without service of notice or resort to legal process
and without being deemed guilty of trespass, or becoming liable for any loss or
damage which may be occasioned thereby.

25. ABANDONMENT. Lessee shall not vacate nor abandon the Leased Premises at any
time during the Lease Term, nor permit the Leased Premises to remain unoccupied
for a period longer than five (5) consecutive days during the Lease Term; and if
Lessee shall so abandon, or vacate or surrender the Leased Premises, or suffer
this Lease or the Leased Premises to be taken under any writ of execution or in
any other way be dispossessed by process of law, or otherwise, any of which
shall, for purposes of this Lease, be deemed an abandonment, then Lessee shall
be in default under this Lease and any personal property belonging to Lessee and
left on the Leased Premises shall, at the option of the Lessor, be deemed
abandoned.

26. DEFAULT AND RIGHT TO RE-ENTER. In the event that Lessee: (a) fails to make
any payment of rent or any other payment required to be made by lessee hereunder
within ten (10) days after the same shall be due, or within three (3) days after
written notice and demand, or (b) fails to perform any other of the terms,
conditions or covenants of this Lease to be observed or performed by Lessee and
such failure continues for more than fourteen (14) days after written notice of
such default, or (c) becomes insolvent as described in paragraph 24 hereof, or
(d) abandons the Leased Premises as described in paragraph 25 hereof, or (e)
assigns or sublets all or any portion of the Leased Premises or the Leased
Premises are occupied or used by any other party without first obtaining
Lessor's written consent; then Lessee shall be in default under this Lease, and
Lessor shall have, in addition to any other rights or remedies which Lessor may
have, the immediate right of re-entry and Lessor may remove all persons and
property from the Leased Premises and such property may be removed and stored in
a public warehouse or elsewhere at the cost of, and for the account of Lessee,
all without service of notice or resort to legal process and without Lessor's or
Lessor's agent's being deemed guilty of trespass or becoming liable for any loss
or damage which may be occasioned thereby.

Should Lessor elect to re-enter, as herein provided, or should Lessor take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, Lessor may either terminate this Lease or Lessor may from time to time
without terminating this Lease, make such alterations and repairs as may be
necessary in order to relet the Leased Premises, and relet said premises or any
part thereof for such term or terms and upon such conditions as Lessor in its
sole discretion may deem advisable; and upon each such reletting all rentals
received by Lessor from such reletting shall be applied, first, to the payment
of any indebtedness other than rent due hereunder from Lessee to Lessor; second,
to the payment of any costs and expenses of such reletting, including brokerage
fees and attorney's fees and all costs of such alterations and repairs; third,
to the payment of rent due and unpaid hereunder, and the residue, if any, shall
be held by Lessor and applied in payment of future rent as the same may become
due and payable hereunder. If such rentals received by Lessor from such
reletting during any month are less than the amount to be paid during that month
by Lessee hereunder, Lessee shall pay any such deficiency to Lessor. Such
deficiency shall be calculated and paid monthly.

No such re-entry or taking possession of the Leased Premises by Lessor shall be
construed as an election by Lessor to terminate this Lease unless a notice of
such intention is sent to Lessee or unless the termination of this Lease is
decreed by a court of competent jurisdiction. Notwithstanding any such reletting
without termination, Lessor may at any time thereafter elect to terminate this
Lease for such previous breach provided such breach has not been cured. Should
Lessor at any time terminate this Lease for any breach, in addition to any other
remedy Lessor may have, Lessor may recover from Lessee all damages which Lessor
may incur by reason of such breach, including the cost of recovering the Leased
Premises, and including (1) all amounts that would have fallen due as rent
between the time of termination of this Lease and the time of the claim,
judgment, or other award, less the avails of all relettings and attornments,
plus interest on the balance at the rate of ten percent (10%) per year; and (2)
the worth at the time of the claim, judgment or other award, of the amount by
which the unpaid rent for the balance of the Lease Term exceeds the amount of
such rental loss that Lessee proves could be reasonably avoided. "Worth", as
used in this provision, is computed by discounting the total at the discount
rate of the Federal Reserve Bank of San Francisco at the time of the claim,
judgment, or award, plus one percent (1%).

27. SURRENDER OF LEASE NOT MERGER. The voluntary or other surrender of this
Lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of Lessor, terminate all or any existing subleases and
subtenancies, or may, at the option of Lessor, operate as an assignment to
Lessor of any or all of such subleases or subtenancies.

28. ATTORNEYS' FEES AND COLLECTION CHARGES. In the event of any legal action or
proceeding between the parties hereto, reasonable attorneys' fees and expenses
of the prevailing party in any such action or proceeding may be added to the
judgment therein. Should Lessor be named as a defendant in any suit brought
against Lessee in connection with or arising out of Lessee's occupancy
hereunder, Lessee shall pay to Lessor all costs and expenses incurred by Lessor
in such suit, including reasonable attorneys' fees. In addition to the charges
provided for in paragraph 4(b) hereof in the event of a late

                                       6

<PAGE>   7
Payment by Lessee to Lessor of rent or other sums due hereunder, Lessee shall
pay a charge of $75.00 to Lessor for preparation of a demand for delinquent
rent.

29.  CONDEMNATION. If any part of the Leased Premises or the Building shall be
taken or condemned for a public or quasi-public use, and a part thereof remains
which is susceptible of occupation hereunder, this Lease shall, as to the part
so taken, terminate as of the date title shall vest in the condemnor, and the
rent payable hereunder shall be adjusted so that the Lessee shall be required to
pay, during the remainder of the Lease Term, only such portion of such rent as
the number of square feet in the part remaining after the condemnation bears to
the number of square feet in the entire Leased Premises at the date of
condemnation; but in such event Lessor shall have the option to terminate this
Lease as of the date when title to the part so condemned vests in the condemnor.
If all of the Leased Premises be taken or condemned, or such part thereof so
that there does not remain a portion susceptible for use and occupancy
hereunder, this Lease shall thereupon terminate. If a part or all of the Leased
Premises be taken or condemned, all compensation awarded upon such condemnation
or taking shall go the the Lessor, and Lessee hereby irrevocably assigns and
transfers to Lessor any right to compensation or damages to which the Lessee may
be entitled during the term hereof by reason of the condemnation of all or a
part of the Leased Premises.

30.   NOTICES. All notices, statements, demands, request, consents, approvals,
authorizations, offers, agreements, appointments and designations under this
Lease by either party to the other shall be in writing and shall be sufficiently
given and served upon the other party when served personally, or forty-eight
(48) hours after being deposited in the United States Mail, sent by registered
or certified mail, return receipt requested, postage prepaid, and addressed to
Lessor or Lessee respectively at the address set forth after their signatures at
the end of this Lease, or to such other address as either of the respective
parties may designate in such a notice.

31.  WAIVER. The waiver by Lessor of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term,
covenant, or condition of any subsequent breach of the same or any other term,
covenant, or condition herein contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to be a waiver of any preceding breach
by Lessee of any term, covenant, or condition of this Lease, other than the
failure of Lessee to pay the particular rent so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such rent.

32.  EFFECT OF HOLDING OVER. If Lessee should remain in possession of the Leased
Premises after the expiration of the Lease Term and without executing a new
lease, then such holding over shall be construed as a tenancy from month to
month, subject to all the conditions, provisions, and obligations of this Lease
insofar as the same are applicable to a month-to-month tenancy, except that the
monthly rent shall be one and one-half (1-1/2) times the monthly amount of the
minimum annual rent for the last month of the Lease Term.

33.   PARKING. Lessee shall be entitled to park in common with other lessees of
Lessor. Lessee agrees not to overburden the parking facilities and agrees to
cooperate with Lessor and other lessees in the use of parking facilities. Lessor
reserves the right in its absolute discretion to determine whether parking
facilities are becoming crowded and, in such event, to allocate parking spaces
among Lessee and other lessees, and, at Lessor's election, to locate and from
time to time to relocate such spaces.

34.  WAIVER OF TRIAL BY JURY, COUNTERCLAIMS, AND RIGHTS OF REDEMPTION. The
parties hereto shall and they hereby do waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of or in any way connected with this
Lease, the relationship of Lessor and Lessee, Lessee's use or occupancy of the
Leased Premises, or any claim of injury or damage. In the event Lessor commences
any proceedings for nonpayment of rent, minimum rent, or additional rent, Lessee
will not interpose any counterclaim of whatever nature or description in any
such proceedings. This shall not, however, be construed as a waiver of Lessee's
right to assert such claims in any separate action or actions brought by the
Lessee.

Lessee hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of Lessee's being evicted or
dispossessed for any cause, or in the event of Lessor's obtaining possession of
the Leased Premises, by reason of the violation by Lessee of any of the terms,
covenants, or conditions of this Lease, or otherwise.

35.  SUBORDINATION. Lessor hereby reserves the right to place liens on,
encumber, mortgage, convey by deed of trust, or hypothecate for security the
Leased Premises, the Building, the Business Park, or any part thereof, and in
such event this Lease and the leasehold interest hereby created shall, at
Lessor's option, be subject and subordinate thereto, and to all advances made on
the security thereof and to all renewals, extensions, or replacements thereof.
Lessee agrees to and shall, within ten (10) days following the written request
of Lessor to do so, execute, acknowledge, and deliver to Lessor or to the
recipient designated by Lessor, any and all documents required or reasonably
requested to subordinate Lessee's rights under and interest in this Lease to any
such lien, encumbrance, mortgage, deed of trust, or hypothecation. Should Lessee
fail or refuse to so execute, acknowledge, and deliver such documents, Lessee's
interest in this Lease nevertheless shall be, at the option of Lessor,
subordinate to any such lien. Lessee also hereby agrees to deliver to any lender
designated by Lessor, within ten (10) days following the written request of
Lessor, such financial statements of Lessee as may be reasonably required by
such lender. Such statements shall include the past three years' financial
statements of Lessee. All such financial statements shall be received in
confidence.

36.  ESTOPPEL CERTIFICATE. Lessee shall, within not more than ten (10) days
after written notice from Lessor, execute, acknowledge and deliver to Lessor a
statement in writing (1) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect), and
stating the date to which the rent and other charges are paid in advance, if
any, and stating the amount and nature of any and all sums deposited with
Lessor, if any, and (2) acknowledging that there are not, to Lessee's knowledge,
any uncured defaults on the part of Lessor hereunder, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of any property of which the Leased
Premises are a part. Lessee's failure to deliver such statement within such time
shall be conclusive upon Lessee (1) that this Lease is in full force and effect,
without modification except as may be represented by Lessor, (2) that there are
no uncured defaults in Lessor's performance, and (3) that not more than one
month's rent has been paid in advance.

37.  LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners at the time in question of the fee title of the Leased Premises,
and except as expressly herein provided, in the event of any transfer of such
title or interest, Lessor herein named (and in case of any subsequent transfers,
the then grantor) shall be relieved from and after the

                                       7
<PAGE>   8
date of such transfer of all liability with respect to Lessor's obligations
thereafter to be performed, provided that any funds in the hands of Lessor (or
the then grantor) at the time of such transfer, in which Lessee has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.

38.  CONDITION TO LEASE. In the event that the combined period of the Lease
Term, together with all options granted herein, if any, exceed five (5) years,
then as a condition subsequent to the obligation of the parties hereunder, the
holder of the first mortgage or first deed of trust secured by the real property
of which the Leased Premises are a part, may reject and terminate this Lease
provided that written notice thereof shall be given to Lessee within thirty (30)
days of the date hereof. In the event of such rejection or termination, Lessee
shall immediately vacate and surrender the Leased Premises as provided in this
Lease, and Lessor shall have no liability to Lessee as a result of such
rejection or termination.

39.  LIMITATION OF LIABILITY. (Strike if Lessor is not a partnership). In
consideration of the benefits accruing hereunder, Lessee and all successors and
assigns covenant and agree that, in the event of any actual or alleged failure,
breach or default hereunder by Lessor:

     (a) the sole and exclusive remedy against Lessor shall be against the
partnership entity and its partnership assets;
     (b) no partner of Lessor shall be sued or named as a party in any suit or
action (except as may be necessary to secure jurisdiction of the partnership);
     (c) no service of process shall be made against any partner of Lessor
(except as may be necessary to secure jurisdiction of the partnership);
     (d) no partner of Lessor shall be required to answer or otherwise plead to
any service of process;
     (e) no judgment will be taken against any partner of Lessor;
     (f) any judgment taken against any partner of Lessor may be vacated and set
aside at any time without hearing;
     (g) no writ of execution will ever be levied against the assets of any
partner of Lessor;
     (h) these covenants and agreements are enforceable by Lessor and also by
any partner of Lessor.

Lessee agrees that teach of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.

40. RULES AND REGULATIONS. Lessee hereby agrees to the following:

     (a) All garbage and refuse shall be placed by Lessee in the containers at
the location prepared by Lessor for refuse collection, in the manner and at the
times and places specified by Lessor
     (b) No aerial or antenna shall be erected on the roof or exterior walls of
the Leased Premises, or on the grounds, without in each instance, the written
consent of Lessor first being obtained. Any aerial or antenna so installed
without such written consent shall be subject to removal by Lessor at any time
without notice.
     (c) No loud speakers, televisions, phonographs, radios or other devices
shall be used in a manner so as to be heard or seen outside of the Leased
Premises without the prior written consent of Lessor.
     (d) The outside areas immediately adjoining the Leased Premises shall be
kept clean and free from dirt and rubbish by Lessee, to the satisfaction of the
Lessor, and Lessee shall not place or permit any obstruction or materials in
such areas. No exterior storage shall be allowed without permission in writing
from Lessor.
     (e) The plumbing facilities shall not be used for any purposes other than
that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the expense of any breakage, stoppage, or damage
resulting from a violation of this provisions shall be borne by Lessee.
     (f) Lessee shall use at Lessee's cost such pest extermination contractor as
Lessor may direct and at such intervals as Lessor may require.
     (g) Lessee shall not burn any trash or garbage of any kind in or about the
Leased Premises or the Business Park.

Lessor reserves the right from time to time to amend or supplement the foregoing
rules and regulations, and to adopt and promulgate additional rules and
regulations applicable to the Leased Premises. Notice of such rules and
regulations and amendments and supplements thereto, if any, shall be given to
the Lessee.

Lessee agrees to comply with all such rules and regulations upon notice from
Lessor, provided that such rules and regulations shall apply to a majority of
all lessees of the Building of which the Leased Premises are a part.

41.  DRAPERIES. Lessor shall select a standard drapery and color for use
throughout the Building and Lessee shall use such standard drapery for all
windows to be covered by Lessee. Lessee shall be required to provide, at
Lessee's expense, prescribed draperies in front of windows in which the space is
utilized for other than office use, such as storage and manufacturing.

42.  MISCELLANEOUS PROVISIONS.

     (a) Whenever the singular number is used in this Lease and when required by
the context, the same shall include the plural, and the masculine, feminine, and
neuter genders shall each include either of the others as may be appropriate,
and the word "person" shall include corporation, firm, or association. If there
be more than one Lessee, the obligations imposed under this Lease upon Lessee
shall be joint and several.
     (b) The headings or titles to the paragraphs of this Lease are not a part
of this Lease and shall have no effect upon the construction or interpretation
of any part of this Lease.
     (c) This instrument contains all of the agreements and conditions made
between the paries to this Lease and may not be modified orally or in any manner
other than by an agreement in writing signed by all of the parties to this
Lease. No oral or written statement by any party or by the agent of any party,
made or delivered prior to or concurrently with the execution of this Lease, and
which is not a part of this written Lease, shall be binding upon any party to
this Lease.
     (d) Time is of the essence of each term and provision of this Lease.
     (e) Except as otherwise expressly stated, each payment required to be made
by Lessee shall be in addition to and not in substitution for other payments to
be made by Lessee.
     (f) Except as expressly provided for herein, the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the heirs,
executors, administrators, successors, and assigns of Lessor and Lessee.
     (g) If any of the terms, conditions, or provisions of this Lease should be
held invalid or in violation of law, this Lease and all other terms, conditions,
and provisions thereof shall nevertheless remain in full force and effect.

                                       8
<PAGE>   9
43.  COVENANTS, CONDITIONS, AND RESTRICTIONS. Lessee acknowledges that as of the
date of this Lease, the Leased Premises are encumbered by certain covenants,
conditions, and restrictions and grants of easement of record, and Lessee agrees
to be bound by all of the terms, conditions, and provisions thereof.

44.  MORTGAGEE PROTECTION. In the event of any default on the part of Lessor,
Lessee will give notice by registered or certified mail to any beneficiary of a
deed or trust or mortgagee of a mortgage covering the Leased Premises whose
address shall have been furnished to Lessee, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale or by a judicial foreclosure,
if such should prove necessary to effect a cure.

In the event of a judicial foreclosure or trustee's sale pursuant to a mortgage
or deed of trust covering the Leased Premises, the purchaser may elect not to
terminate this Lease, in which event Lessee shall attorn to such new purchaser
and, if requested, Lessee shall execute a new lease on the same terms as this
Lease for the balance of the Lease Term.

45.  DEPOSIT AGREEMENT. Lessee hereby agrees that Lessor shall be entitled to
immediately endorse and cash Lessee's good faith rent and security deposit
check(s) accompanying this Lease. It is further agreed and understood that such
action shall not guarantee acceptance of this Lease by Lessor but in the event
Lessor does not accept this Lease the deposit shall be refunded in full to
Lessee. This Lease shall be effective only after Lessee has received a copy
fully executed by Lessor.

46.  SPECIAL PROVISIONS. Special provisions of this Lease numbered 47 through 61
are attached hereto and are made a part hereof. If none, so state in the
following space ____________. See Special Provisions made part of this Lease as
pages 10 and 11.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the day and
year first above written.

<TABLE>
<S>                                          <C>
"LESSOR"  BRIGITTE ZEMMRICH                  "LESSEE"  NATURAL ALTERNATIVES
                                                       INTERNATIONAL
----------------------------------------     -----------------------------------------

By  /s/ BRIGITTE ZEMMRICH                    By  /s/ WILLIAM P. SPENCER
   -------------------------------------        -------------------------------------
        Brigitte Zemmrich                            William P. Spencer
                                                     Executive Vice President
   C/O  Sherry Bailey
   -------------------------------------        -------------------------------------

Address P.O. Box 28115                       Address 1185 Linda Vista Drive, Suite D
        --------------------------------             --------------------------------
        San Diego, CA 92198-0115                     San Marcos, CA 92069
        --------------------------------             --------------------------------

Phone   (619) 485-0376                       Phone   (619) 744-7340
        --------------------------------             --------------------------------

</TABLE>

                                    GUARANTY

     The undersigned guarantor(s) hereby irrevocably guarantee to Lessor the
full performance of each and every obligation of Lessee required to be performed
under the terms of the above Lease, including the payment of all rent and other
sums due from Lessee to Lessor. This Guaranty is entered into in order to induce
Lessor to execute the above Lease with Lessee and will continue in full force
and effect throughout the term of the above Lease or any extension thereof. The
undersigned guarantor(s) hereby consent to and waive notice of any and all
modifications of, amendments to, or changes in the terms and conditions of the
above Lease, which may be agreed to between Lessor and Lessee, and agree that
this Guaranty shall nevertheless continue in full force and effect.

     Executed on 1/24, 1995, at _______________________________________________.

<TABLE>
<S>                                          <C>
GUARANTORS

/s/ WILLIAM P. SPENCER
----------------------------------------     ----------------------------------------
(Signature)                                  (Signature)

William P. Spencer,
Executive Vice President
----------------------------------------     ----------------------------------------
(Name-printed or typed)                      (Name-printed or typed)

Address                                      Address
        --------------------------------             --------------------------------

----------------------------------------     ----------------------------------------

Phone                                        Phone
      ----------------------------------           ----------------------------------
</TABLE>

                                       9
<PAGE>   10

PAGE 10

         ADDENDUM TO STANDARD BUSINESS PARK LEASE DATED JANUARY 9, 1995
                  BY AND BETWEEN BRIGITTE ZEMMRICH, LESSOR, AND
                   NATURAL ALTERNATIVES INTERNATIONAL, LESSEE.

47.    EARLY POSSESSION. Lessee shall have access to the suite upon signing of
       the lease by both parties, and upon the vacating of the space by the
       present tenant and following necessary cleaning and painting on or about
       January 23, 1995. All terms and conditions of the lease shall be in full
       force and effect as of that date except that rent shall not start until
       February 1, 1995.

48.    BUSINESS LICENSE. Lessee understands that he is responsible for obtaining
       a business license from the City of San Marcos to legally operate his
       business from the premises. Upon signing of this lease, Lessee warrants
       that he has satisfied this requirement.

49.    CERTIFICATE OF INSURANCE. Lessor will receive a Certificate of Insurance
       from Lessee naming Lessor as additionally insured and referencing all
       suites leased by March 1, 1995 to be sent c/o Sherry Bailey, P.O. Box
       28115, San Diego, CA 92198-0115 as set forth in item #13 of this lease.

50.    RENTAL PAYMENTS. Monthly rental payments are due on the 1st of each month
       and past due after the 10th. Checks should be mailed and made payable to:

                                Brigitte Zemmrich
                                c/o Sherry Bailey
                                 P.O. Box 28115
                            San Diego, CA 92198-0115

       NOTE: Rental payments are to be postmarked no later than the 10th of each
       month. If rent is not received by the 15th of the month, you will be
       subject to a 5% late charge and service of a 3 Day Notice to Pay or Quit
       along with its associated $75.00 charge.

51.    SIGNAGE. Lessor gives Lessee permission to place one (1) company sign
       above each suite conforming with the existing signs of the business
       center. See item #18 of this lease.

52.    ALTERATIONS/ADDITIONS. Any alterations, additions or improvements to the
       premises will require PRIOR WRITTEN APPROVAL FROM THE LESSOR. Said
       alterations, additions and/or improvements (at Lessee's sole expense)
       shall be permitted, done by a licensed contractor and conform to all
       current building codes and regulations to include payment of all
       applicable fees. Plans showing the improvements must be submitted to
       Lessor for review and approval prior to any construction. Lessor reserves
       the right to require that the Lessee restore the premises (to include
       walls removed or doorways created) to the original condition/
       configuration at the termination of the lease as set forth on page 3,
       item #8 of this lease. LESSEE FURTHER AGREES THAT ALL CITY ORDINANCES
       REGARDING FIRE WALLS WILL BE ADHERED TO, AND IF THERE IS ANY ALTERATION
       TO A FIRE WALL, THE INTEGRITY OF THE FIRE WALL WILL BE MAINTAINED. Lessee
       and Lessor understand and agree that the existing improvements done by
       previous tenants are accepted in "as is" condition to include the air
       conditioning system and window coverings.

53.    HAZARDOUS AND TOXIC MATERIALS. Lessee agrees to maintain the premises in
       compliance with all city, county, state and federal hazard and toxic
       waste regulations. No use shall be made or permitted to be made of said
       premises, nor acts done or continued, which will violate said
       regulations, nor shall Lessee sell, or permit to be kept, used, or sold,
       in or about said premises, any article, liquid, or material of whatever
       kind of nature which may be prohibited by city, county, state or federal
       regulations pertaining to hazard and toxic waste materials.
       Notwithstanding any other remedies provided to Lessor, either within this
       agreement or by law, upon receipt of notice from any appropriate agency
       that Lessee is in violation of such regulations, Lessor shall be entitled
       to enter onto the premises and correct said violation and/or remove any
       such materials or items deemed to be in violation of such regulations.
       The costs of such correction and/or removal shall be the sole expense of
       Lessee and may be charged to Lessee as additional rent.

<PAGE>   11

PAGE 11

         ADDENDUM TO STANDARD BUSINESS PARK LEASE DATED JANUARY 9, 1995
                  BY AND BETWEEN BRIGITTE ZEMMRICH, LESSOR, AND
                   NATURAL ALTERNATIVES INTERNATIONAL, LESSEE.

54.    LEASE RATE INCREASES. Lease rate increases shall be based on the Consumer
       Price Index, All Urban Consumers, Los Angeles - Riverside to be applied
       annually on the anniversary date each year of the lease term and any
       option term or extension period as set forth in 4(e).

55.    HEATING AND AIR CONDITIONING EQUIPMENT. Lessor agrees to maintain and
       repair existing heating and air conditioning equipment. Any additional
       equipment installed by Lessee's at sole expense will be maintained by
       Lessor, but repairs to said additional equipment shall be the
       responsibility of Lessee. Lessee agrees that any roof leaks caused by
       penetrations made in the roof by Lessee shall be the responsibility of
       the Lessee, and that at the termination of the Lease, the roof shall be
       left in a water-tight condition.

56.    BOUNCED RENT CHECKS. Should a rent check be returned by the bank for
       insufficient funds, all future rental payments must be made by
       cashier/certified check or money order.

57.    COMPLETION OF LEASE TERM/EXTENSION/OPTION PERIOD. Should Lessee fail to
       complete lease term or any extension/option period for any reason,
       Security Deposit shall be used for any unpaid rent as well as for
       restoring the premises to leasable condition (i.e. cleaning carpet,
       painting, etc.) to include any necessary repairs.

58.    KEYS. Lessee will be supplied with three (3) front/back door keys and
       three (3) mail box keys. There will be a $25.00 charge if all keys are
       not returned when premises are vacated and will be deducted from the
       Security Deposit.

59.    CONTINGENCIES.

       1.     A lease fully executed by both Lessee and Lessor.
       2.     Lessee assures Lessor that there shall be no odor associated with
              the products manufactured in this unit. Lessor shall not be held
              liable for any product or chemical that the City, County, State or
              Federal Government might determine to be a pollutant to the air or
              water which results in fines or increased water billing.

60.    TENANT IMPROVEMENTS. Lessor agrees to install a gate on the existing
       trash enclosure.

61.    LESSEE ALTERATION. Permission is hereby given by Lessor for Lessee, at
       Lessee's sole expense, to create a doorway in the demising wall which
       separates Suites A and B to accommodate a forklift. Should this wall be a
       fire wall, Lessee hereby guarantees that all city codes will be adhered
       to relating to fire walls and that the integrity of the fire wall will be
       maintained at all times (to include but not limited to auto-close fire
       doors). Lessor reserves the right to require Lessee to restore demising
       wall to original configuration at the termination of this lease as set
       forth on page 3, item #8 of this lease.

LESSOR:    BRIGITTE ZEMMRICH            LESSEE:    NATURAL ALTERNATIVES
                                                   INTERNATIONAL
BY:  /s/ BRIGITTE ZEMMRICH
   ----------------------------         BY:  /s/ WILLIAM P. SPENCER
                                           -------------------------------------
                                           William P. Spencer,
                                           Executive Vice President
DATE:  2/1/95
     --------------------------         DATE:     1/24/95
                                             -----------------------------------

<PAGE>   12
           STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE -- GROSS
                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
                                     [LOGO]

1.   BASIC PROVISIONS ("BASIC PROVISIONS").

     1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only, April
11, 1994, is made by and between Brigitte Zemmrich ("LESSOR") and Natural
Alternatives International ("LESSEE"), (collectively the "PARTIES," or
individually a "PARTY").

     1.2(a) PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 425 Ryan, #B, located in the City of San
Marcos, County of San Diego, State of California, with zip code 92069, as
outlined on Exhibit N/A attached hereto ("PREMISES"). The "BUILDING" is that
certain building containing the Premises and generally described as (describe
briefly the nature of the Building): That certain space containing approximately
2,900 square feet. In addition to Lessee's rights to use and occupy the Premises
as hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any rights to the roof, exterior walls or utility raceways of the
Building or to any other buildings in the Industrial Center. The Premises, the
Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as
the "INDUSTRIAL CENTER." (Also see Paragraph 2.)

     1.2(b) PARKING: 5 unreserved vehicle parking spaces ("UNRESERVED PARKING
SPACES"); and N/A reserved vehicle parking spaces ("RESERVED PARKING SPACES").
(Also see Paragraph 2.6.)

     1.3 TERM: 1 years and - months ("ORIGINAL TERM") commencing April 15, 1994
("COMMENCEMENT DATE") and ending April 14, 1995 ("EXPIRATION DATE"). (Also see
Paragraph 3.)

     1.4 EARLY POSSESSION: Upon Full Execution ("EARLY POSSESSION DATE"). (Also
see Paragraphs 3.2 and 3.3.)

     1.5 BASE RENT: $1,305.00 per month ("BASE RENT"), payable on the 15th day
of each month commencing April 15, 1994 (Also see Paragraph 4.)

[ ]  If this box is checked, this Lease provides for the Base Rent to be
     adjusted per Addendum _______, attached hereto.

     1.6(a) BASE RENT PAID UPON EXECUTION: $1,335.00 as Base Rent for the period
April 15 - May 14, 1994 ($1,305 Base Rent + $30/Water).

     1.6(b) LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: N/A percent
(_____%) ("LESSEE'S SHARE") as determined by [ ] prorata square footage of the
Premises as compared to the total square footage of the Building or [ ] other
criteria as described in Addendum ________.

     1.7 SECURITY DEPOSIT: $1,335.00 ("SECURITY DEPOSIT"). (Also see Paragraph
5.)

     1.8 PERMITTED USE: Light manufacturing and all other allied uses.
_______________________________________________________________________________
_____________________________________ ("PERMITTED USE") (Also see Paragraph 6.)

     1.9 INSURING PARTY. Lessor is the "INSURING PARTY." (Also see Paragraph 8.)

     1.10(a) REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):

[ ] ______________________ represents Lessor exclusively ("LESSOR'S BROKER");

[ ] ______________________ represents Lessee exclusively ("LESSEE'S BROKER"); or

[X] Iliff, Thorn & Company represents both Lessor and Lessee ("DUAL AGENCY").
(Also see Paragraph 15.)

     1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease by both
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate shares
as they may mutually designate in writing, a fee as set forth in a separate
written agreement between Lessor and said Broker(s) (or in the event there is no
separate written agreement between Lessor and said Broker(s), the sum of $ per
schedule) for brokerage services rendered by said Broker(s) in connection with
this transaction.

     1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by Natural Alternatives International ("GUARANTOR"). (Also see
Paragraph 37.)

     1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 57, and Exhibits - through -, all of which
constitute a part of this Lease.

2.   PREMISES, PARKING AND COMMON AREAS.

     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 and/or Common Area Operating Expenses, is
an approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) 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, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems, and loading doors, if any, in the Premises, other than
those constructed by Lessee, shall be in good operating condition on the
Commencement Date. 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 that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth with specificity the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be
reasonable or appropriate to rectify the non-compliance. Lessor makes no
warranty that the Permitted Use in Paragraph 1.8 is permitted for the Premises
under Applicable Laws (as defined in Paragraph 2.4).

     2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) 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, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations, and any
covenants or restrictions of record (collectively, "APPLICABLE LAWS") 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, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms 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 said matters other than as set forth in this Lease.

     2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warranties.
<PAGE>   13

     2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "PERMITTED SIZE
VEHICLES." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)

              (a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.

              (b) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.

              (c) Lessor shall at the Commencement Date of this Lease provide
the parking facilities required by Applicable Law.

     2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Industrial Center and interior utility raceways within the Premises that
are provided and designated by the Lessor from time to time for the general
nonexclusive use of Lessor, Lessee and other lessees of the Industrial Center
and their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.

     2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Lessor under the terms hereof or under the terms of any rules and regulations
or restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Lessor or Lessor's designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.

     2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other person(s)
as Lessor may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to establish, modify,
amend and enforce reasonable Rules and Regulations with respect thereto in
accordance with Paragraph 40. Lessee agrees to abide by and conform to all such
Rules and Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees of the Industrial Center.

     2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:

              (a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;

              (b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;

              (c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;

              (d) To add additional buildings and improvements to the Common
Areas;

              (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and

              (f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Industrial Center as Lessor may,
in the exercise of sound business judgment, deem to be appropriate.

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 an Early Possession Date is specified in Paragraph
1.4 and if Lessee totally or partially occupies the Premises after the Early
Possession Date but prior to the Commencement Date, the obligation to pay Base
Rent shall be abated for the period of such early occupancy. All other terms of
this Lease, however, (including, but not limited to, the obligations to pay
Lessee's Share of Common Area Operating Expenses and to carry the insurance
required by Paragraph 8) shall be in effect during such period. Any such early
possession shall not affect nor advance the Expiration Date of the Original
Term.

     3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver possession
of the Premises to Lessee 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 within ten (10) days after
the end of said sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall
terminate and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the Original 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 the period
during which the Lessee would have otherwise 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 pay Base Rent and other rent or charges, as the
same may be adjusted from time to time, to 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 full month shall be
prorated based upon the actual number of days of the 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.

     4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:

              (a) "COMMON AREA OPERATING EXPENSES" are defined, for purposes of
this Lease, as all costs incurred by Lessor relating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:

                    (i) The operation, repair and maintenance, in neat, clean,
good order and condition, of the following:

                        (aa) The Common Areas, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area
lighting facilities, fences and gates, elevators and roof.

                        (bb) Exterior signs and any tenant directories.

                        (cc) Fire detection and sprinkler systems.

                    (iii) Trash disposal, property management and security
services and the costs of any environmental inspections.

                    (v) Any increase above the Base Real Property Taxes (as
defined in Paragraph 10.2(b)) for the Building and the Common Areas.

                    (vi) Any "insurance Cost Increase" (as defined in Paragraph
8.1)
                    (ix) Any other services to be provided by Lessor that are
stated elsewhere in this Lease to be a Common Area Operating Expense.

              (b) Any Common Area Operating Expenses and Real Property Taxes
that are specifically attributable to the Building or to any other building in
the Industrial Center or to the operation, repair and maintenance thereof, shall
be allocated entirely to the Building or to such other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.

              (c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.

              (d) Lessee's Share of Common Area Operating Expenses shall be
payable by Lessee within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option, however,
an amount may be estimated by Lessor from time to time of Lessee's Share of
annual Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be credited the amount of such over-

                                      -2-
<PAGE>   14
payment against Lessee's Share of Common Area Operating Expenses next
becoming due. If Lessee's payments under this Paragraph 4.2(d) during said
preceding year were less than Lessee's Share as indicated on said statement,
Lessee shall pay to Lessor the amount of the deficiency within ten (10) days
after delivery by Lessor to Lessee of said statement.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefore
deposit monies with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Any time the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor as an addition to the Security Deposit so that the
total amount of the Security Deposit shall at all times bear the same proportion
to the then current Base Rent as the initial Security Deposit bears to the
initial Base Rent set forth in Paragraph 1.5. Lessor shall not be required to
keep all or any part of the Security Deposit separate from its general accounts.
Lessor shall, at the expiration or earlier termination of the term hereof and
after Lessee has vacated the Premises, return to Lessee (or, at Lessor's option,
to the last assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be considered
to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease.

6.   USE.

     6.1 PERMITTED USE.

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

              (b) Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by Lessee, Lessee's assignees or subtenants, and
by prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair
the structural integrity of the improvements on the Premises or in the Building
or the mechanical or electrical systems therein, does not conflict with uses by
other lessees, is not significantly more burdensome to the Premises or the
Building and the improvements thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days after such request give a written notification of same,
which notice shall include an explanation of Lessor's reasonable objections to
the change in use.

     6.2 HAZARDOUS SUBSTANCES.

              (a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" 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, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential 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 or by-products
thereof. Lessee shall not engage in any activity in 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 Requirements (as
defined in Paragraph 6.3). "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; and
(iii) the presence in, on or about the Premises of a Hazardous Substance with
respect to which any Applicable Laws require that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may, without Lessor's prior consent, but upon notice to
Lessor and in compliance with all Applicable Requirements, use any ordinary and
customary materials reasonably required to be used by Lessee in the normal
course of the Permitted Use, 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 any
Reportable Use of any Hazardous Substance by Lessee upon Lessee's giving Lessor
such additional assurances 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 therefor, including,
but not limited to, the installation (and, at Lessor's option, removal on or
before Lease expiration or earlier termination) of reasonably necessary
protective modifications to the Premises (such as concrete encasements) and/or
the deposit of an additional Security Deposit under Paragraph 5 hereof.

              (b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in, on,
under or about the Premises or the Building, other than as previously consented
to by Lessor, Lessee shall immediately give Lessor written notice thereof,
together with 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 concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous Substance
including, but not limited to, all such documents as may be involved in any
Reportable Use involving the Premises. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including, without limitation, through the plumbing or sanitary sewer
system).

              (c) INDEMNIFICATION. 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 damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultants' and attorneys' 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 release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time of such agreement.

     6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"APPLICABLE REQUIREMENTS," which term is used in this Lease to mean 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), now in effect or which may hereafter come into
effect. Lessee shall, within five (5) 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 Requirements
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 Requirements.

     6.4 INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("LENDERS") shall have the right
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance 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 by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to 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 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 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or 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 (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 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 specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights, but
excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below. 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.

              (b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance for
and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilation system
for the Premises. However, Lessor reserves the right, upon notice to Lessee, to
procure and maintain the contract for the heating, air conditioning and
ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor,
upon demand, for the cost thereof.

              (c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Lessee's behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.

     7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the
foundations, exterior walls, structural condition of interior bearing walls,
exterior roof, fire sprinkler and/or standpipe and hose (if located in the
Common Areas) or other automatic fire extinguishing system including fire alarm
and/or smoke detection

                                      -3-
<PAGE>   15
systems and equipment, fire hydrants, parking lots, walkways, parkways,
driveways, landscaping, fences, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing the services for which there
is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not
be obligated to paint the exterior or interior surfaces of exterior walls nor
shall Lessor be obligated to maintain, repair or replace windows, doors or plate
glass of the Premises. Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Building, Industrial Center or Common Areas in good order,
condition and repair.

       7.3    UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.

              (a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
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 which can be removed without doing
material damage to the Premises. The term "ALTERATIONS" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "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 pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to be
made 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) without Lessor's consent but upon notice to Lessor, so long as they
are not visible from the outside of the Premises, do not involve puncturing,
relocating or removing the roof or any existing walls, or changing or
interfering with the fire sprinkler or fire detection systems and the cumulative
cost thereof during the term of this Lease as extended does not exceed
$2,500.00.

              (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 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 be in compliance with all Applicable
Requirements. 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 $2,500.00 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.

              (c) LIEN PROTECTION. 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
mechanic's 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. If Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor, in an
amount equal to one and one-half times the amount of such contested lien claim
or demand, indemnifying Lessor against liability for the same, as required by
law for the holding of the Premises free from the effect of such lien or claim.
In addition, Lessor may require Lessee to pay Lessor's attorneys' fees and costs
in participating in such action if Lessor shall decide it is to its best
interest to do so.

       7.4    OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.

              (a) OWNERSHIP. Subject to Lessor's right to require their removal
and to cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations 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 the Premises and be surrendered
with the Premises by Lessee.

              (b) REMOVAL. Unless otherwise agreed in writing, 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
that their installation may have been consented to by Lessor. Lessor may require
the removal at any time of all or any part of any 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, 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 herein, the Premises, as surrendered, shall
include the Alterations and 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
Lessee-Owned Alterations and 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 Requirements 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 OF PREMIUM INCREASES.

              (a) As used herein, the term "INSURANCE COST INCREASE" is defined
as any increase in the actual cost of the insurance applicable to the Building
and required to be carried by Lessor pursuant to Paragraphs 8.2(b), 8.3(a) and
8.3(b), ("REQUIRED INSURANCE"), over and above the Base Premium, as hereinafter
defined, calculated on an annual basis. "Insurance Cost Increase" shall include,
but not be limited to, requirements of the holder of a mortgage or deed of trust
covering the Premises, increased valuation of the Premises, and/or a general
premium rate increase. The term "Insurance Cost Increase" shall not, however,
include any premium increases resulting from the nature of the occupancy of any
other lessee of the Building. If the parties insert a dollar amount in Paragraph
1.9, such amount shall be considered the "BASE PREMIUM." If a dollar amount has
not been inserted in Paragraph 1.9 and if the Building has been previously
occupied during the twelve (12) month period immediately preceding the
Commencement Date, the "Base Premium" shall be the annual premium applicable to
such twelve (12) month period. If the Building was not fully occupied during
such twelve (12) month period, the "Base Premium" shall be the lowest annual
premium reasonably obtainable for the Required Insurance as of the Commencement
Date, assuming the most nominal use possible of the Building. In no event,
however, shall Lessee be responsible for any portion of the premium cost
attributable to liability insurance coverage in excess of $1,000,000 procured
under Paragraph 8.2(b).

              (b) Lessee shall pay any Insurance Cost increase to Lessor
pursuant to Paragraph 4.2. Premiums for policy periods commencing prior to, or
extending beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement Date or Expiration Date.

     8.2 LIABILITY INSURANCE.

              (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee, Lessor and any Lender(s) whose names have been provided to
Lessee in writing (as additional insureds) 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 an amount not 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" endorsement 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. 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. Lessor 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 any Lender(s), insuring against loss or
damage to the Premises. Such insurance shall be for full replacement cost, as
the same shall exist from time to time, or the amount required by any Lender(s),
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. Lessee-Owned
Alterations and Utility Installations, Trade Fixtures and Lessee's personal
property shall be insured by Lessee pursuant to Paragraph 8.4. If the coverage
is available and commercially appropriate, Lessor's 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 or included in the Base
Premium), 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 Building 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
loss, but not including plate glass insurance. Said policy or policies shall
also contain an agreed valuation provision in lieu of any co-insurance 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.

              (b) RENTAL VALUE. Lessor shall also 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 any Lender(s), insuring the loss of the full rental
and other charges payable by all lessees of the Building to Lessor for one year
(including all Real Property Taxes, insurance costs, all Common Area Operating
Expenses and any scheduled rental increases). Said insurance may 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 co-insurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected rental income,
Real Property Taxes, insurance premium costs and other expenses, if any,
otherwise payable, for the next 12-month period. Common Area Operating Expenses
shall include any deductible amount in the event of such loss.

              (c) ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Industrial Center if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.

                                      -4-
<PAGE>   16

              (d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party,
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.

     8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Trade Fixtures and Lessee-Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by Lessor as the Insuring Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations. Upon request from Lessor,
Lessee 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, 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. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable 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.

     8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor 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 or damage to their 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. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.

     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, loss of permits, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in connection
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 foregoing 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. 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 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, 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
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.

9.   DAMAGE OR DESTRUCTION.

     9.1 DEFINITIONS.

              (a) "PREMISES PARTIAL DAMAGE" 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 less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.

              (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 fifty percent (50%) or more of
the then Replacement Cost of the Premises (excluding Lessee-Owned Alterations
and Utility Installations and Trade Fixtures) immediately prior to such damage
or destruction. In addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any
lessees of the Building, the cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost (excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures of any lessees of the
Building) of the Building shall, at the option of Lessor, be deemed to be
Premises Total Destruction.

              (c) "INSURED LOSS" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, 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 PREMISES PARTIAL DAMAGE -- INSURED LOSS. If 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. In the event, however, that there is a
shortage of insurance proceeds and such shortage is due to the fact that, by
reason of the unique nature of the improvements in the Premises, 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, Lessor 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 Lessor does not receive such funds or assurance within such
ten (10) day period, and if Lessor does not so elect to restore and repair, 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.

     9.3 PARTIAL DAMAGE -- UNINSURED LOSS. If 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), 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 of knowledge of the occurrence of such damage of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date 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 such
commitment from Lessee. 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 after 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
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 9.7.

     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 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 (a) exercising such option, and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such 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 such period,
then this Lease shall terminate as of the date set forth in the first sentence
of this Paragraph 9.5.

     9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.

              (a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base Rent,
Common Area Operating Expenses and other charges, if any, payable by Lessee
hereunder for the period during which such damage or condition, its repair,
remediation or restoration continues, shall be abated in proportion to the
degree to which Lessee's use of the Premises is impaired, but not in excess of
proceeds from insurance required to be carried under Paragraph 8.3(b). Except
for abatement of Base Rent, Common Area Operating Expenses 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 damage, destruction, repair, remediation or restoration.

                                      -5-

<PAGE>   17

              (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
ninety (90) 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 the receipt of such notice, this Lease
shall continue in full force and effect. "COMMENCE" as used in this Paragraph
9.6 shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever
occurs first.

     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
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and 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 or $100,000, whichever is greater, 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 date 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 excess costs of (a) investigation and remediation of such
Hazardous Substance Condition to the extent required by Applicable Requirements,
over (b) an amount equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days
following said commitment by Lessee. 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 after the required funds are
available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

     9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this Paragraph 9, Lessor shall return to Lessee any advance payment made by
Lessee to Lessor and 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 WAIVER OF STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent it is inconsistent
herewith.

10.  REAL PROPERTY TAXES.

     10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as defined
in Paragraph 10.2(a), applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any increases in such amounts over the
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.

     10.2 REAL PROPERTY TAX DEFINITION.

     (a) 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 license fee, commercial rental tax, improvement bond or bonds, levy or
tax (other than inheritance, personal income or estate taxes) imposed upon the
Industrial Center 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 Industrial Center or
any portion thereof, Lessor's right to rent or other income therefrom, and/or
Lessor's business of leasing the Premises. The term "REAL PROPERTY TAXES" shall
also include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in Applicable Law taking
effect, during the term of this Lease, including, but not limited to, a change
in the ownership of the Industrial Center or in the improvements thereon, the
execution of this Lease, or any modification, amendment or transfer thereof, and
whether or not contemplated by the Parties.

     (b) As used herein, the term "BASE REAL PROPERTY TAXES" shall be the amount
of Real Property Taxes, which are assessed against the Premises, Building or
Common Areas in the calendar year during which the Lease is executed. In
calculating Real Property Taxes for any calendar year, the Real Property Taxes
for any real estate tax year shall be included in the calculation of Real
Property Taxes for such calendar year based upon the number of days which such
calendar year and tax year have in common.

     10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Operating Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.

     10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building 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.

     10.5 LESSEE'S PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center. When
possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, 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 property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.

11. UTILITIES. Lessee shall pay directly for all utilities and services supplied
to the Premises, including, but not limited to, electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. If
any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a reasonable
proportion to be determined by Lessor of all such charges jointly metered or
billed with other premises in the Building, in the manner and within the time
periods set forth in Paragraph 4.2(d).

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, "assign") 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.

              (b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a cumulative basis, of
twenty-five percent (25%) or more of the voting control of Lessee shall
constitute a change in control for this purpose.

              (c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of full
execution and delivery of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably withhold its consent. "NET
WORTH OF LESSEE" for purposes of this Lease shall be the net worth of Lessee
(excluding any Guarantors) established under generally accepted accounting
principles consistently applied.

              (d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1, or a non-curable Breach without
the necessity of any notice and grace period. If Lessor elects to treat such
unconsented to assignment or subletting as a non-curable Breach, Lessor shall
have the right to either: (i) terminate this Lease, or (ii) upon thirty (30)
days' written notice ("LESSOR'S NOTICE"), increase the monthly Base Rent for the
Premises to the greater of the then fair market rental value of the Premises, as
reasonably determined by Lessor, or one hundred ten percent (110%) of the Base
Rent then in effect. Pending determination of the new fair market rental value,
if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's Notice,
with any overpayment credited against the next installment(s) of Base Rent
coming due, and any underpayment for the period retroactively to the effective
date of the adjustment being due and payable immediately upon the determination
thereof. Further, in the event of such Breach and rental adjustment, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to the then fair market value as reasonably
determined by Lessor (without the Lease being considered an encumbrance or any
deduction for depreciation or obsolescence, and considering the Premises at its
highest and best use and in good condition) or one hundred ten percent (110%) of
the price previously in effect, (ii) any index-oriented rental or price
adjustment formulas contained in this Lease shall be adjusted to require that
the base index be determined with reference to the index applicable to the time
of such adjustment, and (iii) any fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased in the same ratio as the new
rental bears to the Base Rent in effect immediately prior the adjustment
specified in Lessor's Notice.

              (e) Lessee's remedy for any breach of this Paragraph 12.1 by
Lessor shall be limited to compensatory damages and/or injunctive relief.

     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, nor (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 for 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 assignee or
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 under this Lease or the sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.

                                      -6-
<PAGE>   18
              (d) In the event of any Default or Breach of Lessee's obligation
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or
anyone else responsible for the performance of the Lessee's obligations under
this Lease, including any sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor.

              (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 $1,000 or ten percent (10%) of the monthly Base Rent
applicable to the portion of the Premises which is the subject of the proposed
assignment or sublease, whichever is greater, 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 occurrence of a transaction described in Paragraph 12.2(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased by an amount equal to six (6) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
Security Deposit increase a condition to Lessor's consent to such transaction.

              (h) Lessor, as a condition to giving its consent to any assignment
or subletting, may require that the amount and adjustment schedule of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment schedule for property similar to the Premises as then constituted, as
determined by Lessor.

     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 the foregoing
provision 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 such 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 under a sublease approved by Lessor 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), $350.00 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" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"BREACH" by Lessee 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.

              (b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent, Lessee's Share of Common
Area Operating Expenses, or any other monetary payment required to be made by
Lessee hereunder 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
three (3) 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
Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7.1(b), (iii) the rescission of an
unauthorized assignment or subletting per Paragraph 12.1, (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 ten (10) 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 13.1(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. Code Section 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 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.

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

              (g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure, within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurances of security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the Guarantors that existed at the time of execution of this Lease.

     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 own
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 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 any leasing commission paid by Lessor in connection with
this Lease 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 immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco or the Federal Reserve Bank
District in which the Premises are located at the time of award plus one percent
(1%). 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 13.2. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such pro-

                                      -7-
<PAGE>   19
ceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit for such
rent and/or damages. If a notice and grace period required under Subparagraph
13.1(b), (c) or (d) was not previously given, a notice to pay rent or quit, or
to perform or quit, as the case may be, given to Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also constitute
the applicable notice for grace period purposes required by Subparagraph
13.1(b), (c) or (d). In such case, the applicable grace period under the
unlawful detainer statute shall run concurrently after the one such statutory
notice, and the failure of Lessee to cure the Default within the greater of the
two (2) such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in this Lease
and/or by said statute.

              (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 recover the rent as it becomes due, provided Lessee has the right to sublet
or assign, subject only to reasonable limitations. Lessor and Lessee agree that
the limitations on assignment and subletting in this Lease 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 this 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 (as defined in Paragraph 13.1) of this Lease by Lessee, 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 paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding 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 13.3 shall not be deemed a waiver by Lessor of the provisions of this
Paragraph 13.3 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 deed of trust covering the Premises.
Accordingly, if any installment of rent or 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 six percent (6%) 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 any Lender(s) whose name and address shall have been furnished to 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 thirty (30) 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 thirty (30) 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 portion of
the Common Areas designated for Lessee's parking, is taken by condemnation,
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 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 Premises. No reduction of Base
Rent shall occur if the condemnation does not apply to any portion of the
Premises. 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 of 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 Lessee's share of
the legal and other expenses incurred by Lessor in the condemnation matter,
repair any damage to the Premises caused by such condemnation authority. Lessee
shall be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair.

15.  BROKERS' FEES

     15.1 PROCURING CAUSE. The Broker(s) named in Paragraph 1.10 is/are the
procuring cause of this Lease.

     15.2 ADDITIONAL TERMS. Unless Lessor and Broker(s) have otherwise agreed in
writing, Lessor agrees that: (a) if Lessee exercises any Option (as defined in
Paragraph 39.1) granted under this Lease or any Option subsequently granted, or
(b) if Lessee acquires any rights to the Premises or other premises in which
Lessor has an interest, or (c) if Lessee remains in possession of the Premises
with the consent of Lessor after the expiration of the term of this Lease after
having failed to exercise an Option, or (d) if said Brokers are the procuring
cause of any other lease or sale entered into between the Parties pertaining to
the Premises and/or any adjacent property in which Lessor has an interest, or
(e) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then as to any of said transactions, Lessor shall pay
said Broker(s) a fee in accordance with the schedule of said Broker(s) in effect
at the time of the execution of this Lease.

     15.3 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's
interest in this Lease, whether such transfer is by agreement or by operation of
law, shall be deemed to have assumed Lessor's obligation under this Paragraph
15. Each Broker shall be an intended third party beneficiary of the provisions
of Paragraph 1.10 and of this Paragraph 15 to the extent of its interest in any
commission arising from this Lease and may enforce that right directly against
Lessor and its successors.

     15.4 REPRESENTATIONS AND WARRANTIES. Lessee and Lessor each represent and
warrant to the other that it has had no dealings with any person, firm, broker
or finder other than as named in Paragraph 1.10(a) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other
than said named Broker(s) is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the indemnifying Party, including any costs, expenses, and/or attorneys' fees
reasonably incurred with respect thereto.

16.  TENANCY AND FINANCIAL STATEMENTS.

     16.1 TENANCY STATEMENT. Each Party (as "RESPONDING PARTY") shall within ten
(10) days after written notice from the other Party (the "REQUESTING PARTY")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in a 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 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
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, including, but not limited to, Lessee's financial
statements for the past three (3) years. 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. 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 15.3, 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 ten (10) days following
the date on which it was due, shall bear interest from the date due at the prime
rate charged by the largest state chartered bank in the state in which the
Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential 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. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.

                                      -8-
<PAGE>   20
23.  NOTICES.

     23.1 NOTICE REQUIREMENTS. 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
during normal business hours, 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, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for the purpose of mailing or delivering notices to Lessee. 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 DATE OF NOTICE. 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 forty-eight (48) 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 or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a 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 any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such 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 Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of monies 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. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased to two hundred percent
(200%) of the Base Rent applicable during the month immediately preceding such
expiration or earlier termination. Nothing contained herein shall be construed
as a consent by Lessor to any holding over by Lessee.

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.

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 the 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. 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 pursuant
to Paragraph 13.5. 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, this Lease 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 foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or 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 (1) 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 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. ATTORNEYS' 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) in any such proceeding, action, or appeal thereon, shall be
entitled to reasonable attorneys' 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 claim or defense. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
incurred. Lessor shall be entitled to attorneys' fees, costs and expenses
incurred in 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. Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.

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 at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, 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 eighty (180) 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 exterior of the Premises or
the Building, 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 so long as such signs are in a location designated by
Lessor and comply with Applicable Requirements and the signage criteria
established for the Industrial Center by Lessor. 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 of the Building, and the right to install advertising signs on the
Building, including the roof, which do not unreasonably interfere with the
conduct of Lessee's business; Lessor shall be entitled to all revenues from such
advertising signs.

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' and 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, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), 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. 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 or 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 impositions
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.

     37.1 FORM OF GUARANTY. If there are to be any Guarantors of this Lease per
Paragraph 1.11, the form of the guaranty to be executed by each such Guarantor
shall be in the form most recently published by the American Industrial Real
Estate Association, and each such Guarantor shall have the same obligations as
Lessee under this Lease, including, but not limited to, the obligation to
provide the Tenancy Statement and information required in Paragraph 16.

                                      -9-
<PAGE>   21

     37.2 ADDITIONAL OBLIGATIONS OF GUARANTOR. It shall constitute a Default of
the Lessee under this Lease if any such Guarantor fails or refuses, upon
reasonable request by Lessor to give: (a) evidence of the due execution of the
guaranty called for by this Lease, including the authority of the Guarantor (and
of the party signing on Guarantor's behalf) to obligate such Guarantor on said
guaranty, and resolution of its board of directors authorizing the making of
such guaranty, together with a certificate of incumbency showing the signatures
of the persons authorized to sign on its behalf, (b) current financial
statements of Guarantor as may from time to time be requested by Lessor, (c) a
Tenancy Statement, or (d) written confirmation that the guaranty is still in
effect.

38. QUIET POSSESSION. Upon payment by Lessee of the Rent for the Premises and
the performance of all of 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 Lease, 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 first 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 a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this 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.

     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 from 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 separate Default under Paragraph 13.1 during
the twelve (12) month period immediately preceding the exercise of the Option,
whether or not the Defaults are cured.

              (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 pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) if Lessee commits a Breach of this Lease.

40. RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations ("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 the Building and the Industrial Center and their invitees.

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 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 the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by 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 thirty (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 either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered 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.

                                      -10-
<PAGE>   22
LESSOR AND LESSEE HAVE CAREFULLY 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, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE 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 YOUR ATTORNEY'S
     REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO EVALUATE THE
     CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS,
     UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
     OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, 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 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 and on the dates
specified above their respective signatures.

Executed at:                              Executed at: SAN MARCOS, CA
             -------------------------                 -------------------------

on:    4/30/94                            on: APRIL 21, 1994
    ----------------------------------        ----------------------------------

BY LESSOR: Brigitte Zemmrich              BY LESSEE: Natural Alternatives
                                                     International
---------------------------------------   --------------------------------------

---------------------------------------   --------------------------------------

By: /s/ BRIGITTE ZEMMRICH                 By: /s/ WILLIAM P. SPENCER
   ------------------------------------      -----------------------------------

Name Printed: BRIGITTE ZEMMRICH           Name Printed: WILLIAM P. SPENCER
             --------------------------                -------------------------

Title: OWNER                              Title: EXECUTIVE VICE PRESIDENT
      ---------------------------------         --------------------------------

By:                                       By:
   ------------------------------------      -----------------------------------

Name Printed:                             Name Printed:
             --------------------------                -------------------------

Title: c/o Sherry Bailey                  Title:
      ---------------------------------         --------------------------------

Address: P.O. Box 28115                   Address: 1185 Linda Vista, Suite D
        -------------------------------           ------------------------------
         San Diego, CA 92198-0115                  San Marcos, CA 92069
---------------------------------------   --------------------------------------

Telephone: (619) 485-0376                 Telephone: (619) 744-7340
            --- -----------------------               --- ----------------------

Facsimile: (   )                          Facsimile: (619) 744-9589
            --- -----------------------               --- ----------------------

BROKER:                                   BROKER:

Executed at:                              Executed at:
            ---------------------------               --------------------------

on:                                       on:
   ------------------------------------      -----------------------------------

By:                                       By:
   ------------------------------------      -----------------------------------

Name Printed:                             Name Printed:
             --------------------------                -------------------------

Title:                                    Title:
      ---------------------------------         --------------------------------

Address: 2386 Faraday Avenue, Suite 100   Address:
        -------------------------------           ------------------------------
         Carlsbad, CA 92008
---------------------------------------   --------------------------------------

Telephone: (619) 438-8950                 Telephone: (   )
            --- -----------------------               --- ----------------------

Facsimile: (   )                          Facsimile: (   )
            --- -----------------------               --- ----------------------

NOTE: These forms are often modified to meet changing requirements of law and
      needs of the industry. Always write or call to make sure you are utilizing
      the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700
      South Flower Street, Suite 600, Los Angeles, California 90017. (213)
      687-8777.

(c)1993 by American Industrial Real Estate Association. All rights reserved. No
   part of these words may be reproduced in any form without permission in
   writing.

                                      -11-
<PAGE>   23

ADDENDUM TO STANDARD INDUSTRIAL /COMMERCIAL MULTI-TENANT LEASE - GROSS DATED
APRIL 11,1994, BY AND BETWEEN BRIGITTE ZEMMRICH AS LESSOR, AND NATURAL
ALTERNATIVES INTERNATIONAL, AS LESSEE.

--------------------------------------------------------------------------------

49.    Lessee shall have access to the Suite upon the full execution of the
       lease by both parties. All terms and conditions of the Lease shall be in
       full force and effect as of that date except that rent shall not start
       until April 15, 1994.

50.    Lessee understands that he is responsible for obtaining a business
       license from the City of San Marcos to legally operate his business from
       the premises. Upon signing of this Lease, Lessee warrants that he has
       satisfied this requirement.

51.    Lessor will receive a Certificate of Insurance from Lessee naming Lessor
       as additionally insured and referencing all suites leased by May 15, 1994
       to be sent c/o Sherry Bailey, P. O. Box 28115, San Diego, CA, 92198-0115
       as set forth in item #8.5 of this lease.

52.    Monthly rental payments are due on the 15th of each month and past due
       after the 25th. Checks should be mailed and made payable to:

                                Brigitte Zemmrich
                                c/o Sherry Bailey
                                 P. O. BOX 28115
                            San Diego, CA 92198-0115

53.    Lessor gives Lessee permission to place one (1) company sign above the
       suite conforming with the existing signs of the business center. SEE ITEM
       #34 of the Lease.

54.    Lessee understands that he has the right to make certain improvements to
       the space. All improvements must be submitted to the Lessor first for her
       approval, must be permitted and done by a licensed contractor. Lessor
       reserves the right to have the Lessee remove any improvements at the
       termination of the lease and bring the space back to its existing
       condition. Lessee agrees that any roof leaks caused by penetrations made
       in the roof by the Lessee shall be the responsibility of the Lessee, and
       that at the termination of the lease, the roof shall be left in a
       water-tight condition.

55.    Hazardous and Toxic Materials. Lessee agrees to maintain the premises in
       compliance with all city, county, state and federal hazard and toxic
       waste regulations. No use shall be made or permitted to be made of said
       premises, nor acts done or continued, which will violate said
       regulations, nor shall Lessee sell, or permit to be kept, used, or sold,
       in or about said premises, any article, liquid, or material of whatever
       kind or nature which may be prohibited by city, county, state or federal
       regulations pertaining to hazard and toxic waste materials.
       Notwithstanding any other remedies provided to Lessor, either within this
       agreement or by law, upon receipt of notice from any appropriate agency
       that Lessee is in violation of such regulations, Lessor shall be entitled
       to enter onto the premises and correct said violation of such
       regulations. The costs of such correction and/or removal shall be the
       sole expense of Lessee and may be charged to Lessee as additional rent.

56.    Contingencies:

       1.     A lease fully executed by both Lessor and Lessee.

       2.     Lessee assures Lessor that there shall be no odor associated with
              the products manufactured in this unit. Lessor shall not be held
              liable for any product or chemical that the City, County, State or
              Federal Government might determine to be a pollutant to the air or
              water which results in fines or increased water billing.

57.    Lessee shall have a forty-eight (48) hour Right of First Refusal to lease
       the adjacent Suite A. When Suite A becomes available and the Lessor
       receives an offer which she would accept, written notice shall be given
       to the Lessee, and the Lessee shall have forty-eight (48) hours in which
       to exercise their option by matching the offer to lease. The Lessee shall
       also have a forty-eight (48) hour right of first refusal to match any
       offer to purchase the entire building upon written notification from the
       owner that there has been an offer recorded which the owner would accept.
       This Right of First Refusal to lease or purchase shall run only as long
       as Natural Alternatives International is a Tenant in the building.

LESSOR:     BRIGITTE ZEMMRICH           LESSEES:      NATURAL ALTERNATIVES
                                                      INTERNATIONAL
BY:  /s/ BRIGITTE ZEMMRICH              BY:  /s/ [SIGNATURE ILLEGIBLE]
   ----------------------------            -------------------------------------

DATE:  4/30/94                           DATE:  APRIL 21, 1994
     --------------------------              -----------------------------------

<PAGE>   24

                               EXTENSION OF LEASE

I.   PARTIES:

     THIS AMENDMENT is executed at San Marcos, California this 21st day of
January, 2000, by and between Brigitte Zemmrich the ("Lessor") and Natural
Alternatives International the ("Lessee").

II.  RECITALS:

     Lessor and Lessee, being parties to that certain Lease dated April
11/January 9, 1994/95, hereby express their mutual desire and intent to extend
the terms of the Lease and amend by this writing those terms, covenants and
conditions contained in "TERM" and "RENT" as hereinafter provided for the
premises located at 425 Ryan Drive, Suites A & B, San Marcos, California 92069.

III. AMENDMENTS:

     "TERMS" shall hereafter additionally provide for Twelve (12) months
commencing on May 1, 2000 and ending April 30, 2001.

     "RENT" shall hereafter additionally provide as follows: Lessee shall pay to
Lessor as rent for the Premises without deduction, offset, prior notice or
demand, equal monthly payments of $4,202.00* including trash and water, in
advance on the first day of each month of the term hereof. Rent shall be payable
in lawful money of the United States.

     The Security Deposit is increased by the sum of N/A Dollars ($-0-) which
shall be submitted to Lessor with signing of this Renewal. Tenant has therefore
deposited with Lessor Security Deposit totalling Seven thousand eight hundred
eighty six and no/100 Dollars ($7,886.00). Such Amendment to Lease shall not be
accepted by Lessor without submitted above Security Deposit Balance at the same
time.

     *New rental amount reflects 2.3% annual CPI increase.

IV.  INCORPORATION:

     Except as modified herein, all other terms and conditions of the Lease
between the Parties described above, shall continue. If there is a conflict in
terms between the Lease and the Extension of Lease, the Extension of Lease shall
control.

V.   DEADLINE POLICY:

     If Amendment to Lease is not returned to Lessor, fully signed by Lessee and
accompanied by Security Deposit Balance, by 5:00 p.m. on 4th (day) of February,
2000, THIS AMENDMENT TO LEASE SHALL BECOME NULL AND VOID. ***********

VI.  ADDITIONAL PROVISIONS:

     Provided Lessee is not in default under any terms and conditions of the
original Lease, Lessee shall give Lessor at least ninety (90) days written
notice prior to expiration if Lessee desires to extend Lease. Should Lease be
extended, Lease rate shall be increased based upon the Consumer Price Index
increase (All Urban Consumers, Los Angeles-Riverside-Orange County) for the most
recently published twelve (12) month period.

     IN WITNESS WHEREOF Lessor and Lessee have executed this Amendment as of the
day and year above written.

                                        NATURAL ALTERNATIVES INTERNATIONAL

By:   /s/ BRIGITTE ZEMMRICH             By:   /s/ PETER WULFF
      ----------------------------            ----------------------------
          Brigitte Zemmrich                       Peter Wulff,
                                                  Chief Financial Officer

Date: 2/08/00                           Date: 2/1/00
      ----------------------------            ----------------------------

               ("LESSOR")                              ("LESSEE")

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