Document:

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                                                                   Exhibit 10.12

                              SHOPPING CENTER LEASE

THIS LEASE MADE THIS 1st day of June, 2000 by and between JOSEPH DI GERLANDO,
hereinafter called Lessor, and PETSVETSANDYOU.COM, INC., A FLORIDA CORPORATION
hereinafter called Lessee, ID# E59-3619483

                              W I T N E S S E T H:

Lessor hereby leases to lessee, the terms and conditions hereinafter set
forth, the building space (hereinafter called "Premises") as shown on Exhibit
"A" attached. The Premises shall consist of approximately 800 square feet in the
building as shown on said Exhibit "A" and shall be in "As Is" condition

The building is located at 10919 N. DALE MABRY HWY, TAMPA FLORIDA, HILLSBOROUGH
County, Florida, on real property described on Exhibit "B" attached.

1.       CONSTRUCTION. All other improvements in the Premises, including but not
limited to interior partitioning, custom display windows and entryways,
telephone wiring, telephone piping, telephone outlets, plumbing, electrical
systems and equipment, will be installed by Lessee at Lessees' cost; such
improvements shall be subject to the written approval of Lessor and shall be
performed by licensed contractors. Improvements to be made by Lessee shall
include all electrical equipment which must be located outside the Premises, but
which serve only the Premises. Lessee may make no improvements whatsoever on the
leased premises without first making a written request and obtaining written
approval from the Lessor. After approval has been obtained, said improvement
shall be performed by a licensed contractor.

Lessor may make limited relocations of the premises and may increase, reduce, or
change the number, dimensions or location of the improvements comprising the
Shopping Center or any of them in any manner whatsoever as Lessor shall deem
proper; provided, however, that Lessor may not substantially alter the location
of the Premises as shown on Exhibit "A" without the prior written consent of
lessee.

2.       TERM. THE TERM OF THIS LEASE IS FOR A PERIOD OF ONE (1) Year(s) from
the date of possession as defined in Paragraph 9. The Commencement date of this
Lease shall be the date that Lessor delivers the leased premises to Lessee for
improvements. Except as herein provided to the contrary the phrase "Rental
Commencement Date" shall mean JUNE 15, 2000

If the Rental Commencement date is a date other than the first day of the
calendar month, there shall be due and payable on or before such date a minimum
guaranteed rental for the balance of such calendar month a sum equal to the
proportion of the rent specified for the first full calendar month as herein
provided, which the number of days from the commencement date shall fall bears
to the total number of days in such month.

3.       EXTENDED TERM PERIODS. (Complete, if None, state so, if any, list
here). NONE

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4.       RENT. The fixed minimum annual rent during the term of this lease shall
be payable by the tenant in equal monthly installments plus applicable sales
tax, on or before the first day of each month in advance, at the office of
landlord or at such other place designated by Landlord without any prior demand
therefore, and without any deduction or set-off whatsoever, and shall be as
follows:

<TABLE>
<CAPTION>
YEAR              BASE RENT          CAM       MONTHLY TOTAL      YEARLY LEASE
<S>               <C>               <C>        <C>                <C>
#1                $600.00           250.00       $850.00           $10,200.00
---               ---------         ------     -------------      ------------

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

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

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

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

The increase to the monthly base rent for the second year and each consecutive
year as listed in extended terms, each one year period throughout the initial
term and for each year of any renewal term shall be computed by multiplying the
monthly base rent for the preceding rental term by a fraction not to exceed six
percent (6%), plus common area maintenance plus applicable tax, unless otherwise
stated in this lease.

Lessor further acknowledges receipt of $907.38 for the first monthly installment
of annual minimum rental and expense amounts as herein set out, including state
sales tax.

Rent may be paid by Lessee or by an assignee of Lessee or by a subtenant, having
been approved by the Lessor. It is understood that applicable sales and use tax
is to be paid by the Lessee for each installment under the original term and any
option periods.

5.       ADDITIONAL RENT. In addition to the base rent, Lessee shall pay as
additional rent his prorate share of: (a) all real estate taxes and assessments
assessed, imposed or levied against Lessor (of which Lessee's Premises are a
part), during any fiscal tax year which occurs wholly or partly during the term
of this lease; (b) all insurance including liability, fire and casualty on the
building and common areas of the Shopping Center; (c) all common area
maintenance, lawn service, landscaping, pest control, painting, roof, parking
area and maintenance of exterior walls, common area lighting, trash removal and
utility (water and sewer) charges; and (d) administrative management fees.

The amount due from Lessee is estimated at $3.75 per square foot plus all
applicable State of Florida Sales and Use taxes and shall be payable monthly
with the base rent.

All of the above expense item shall be billed on prorata basis for the exact
amount of such expenses except those tenants which cause additional expenses by
excessive use or abuse, such as, but not limited to; insurance, utilities,
parking usage, water, sewer, trash pickup and common area cleaning. Said
additional expenses shall be estimated at the Lessor's discretion. Any overages
shall be credited to the amounts due for the ensuing period and any shortages
shall be billed to the tenants. Such prorata share shall be computed on the
bases of square footage leased of 800 square feet to total square footage of
15,800 square feet. The square footage leased is calculated as follows; exterior
walls are measured from outside wall line to outside wall line, interior
partition walls are measured from center line to center line. Such prorata
share, for the first year and billed annually. The rate will be adjusted on an
annual basis and a revised fee will be billed to the Lessee.

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6.       ANNUAL RENTAL ADJUSTMENT. In the event Tenant remains in possession of
the Premises after the expiration of this lease and without the execution of a
new lease, it shall be deemed to be occupying the Premises as a tenant from
month to month, subject to all the conditions, provisions, and obligations, of
this Lease in so for as the same can be applicable to month-to-month tenancy
cancelable by either party upon thirty (30) days written notice to the other and
the rental rate shall be increased to double the last months rent.

7.       DEPOSITS. Lessor hereby acknowledges receipt of $1,360.00 Dollars
Security Deposit as security for the performance of Lessee's obligations under
this Lease, including without limitation the surrender of possession of the
Premises to Lessor as herein provided. Upon default hereunder by Lessee, Lessor
may apply said deposit to any loss or damage resulting from such default. The
security deposit shall not be considered and shall not be credited against any
rents due under the lease. See Article "4" of this special provision if
applicable. Lessee is not permitted to use the deposit as the last month's rent.

8.       COVENANT TO PAY RENT. Lessee shall pay the rent and any additional rent
as herein provided to Lessor at Lessor's address stated herein or at such other
place as Lessor shall designate in writing without demand and without
counterclaim, deduction or set-off. If any Monthly Rent Payment is not paid
within three (3) business days after its due date, lessee also agrees to pay
with said Monthly Rent Payment a late charge of $25.00 per day. After ten (10)
days Lessor shall protect himself according to the laws of the State of Florida.

9.       POSSESSION. The taking of possession of the Premises by Lessee and the
commencement of interior improvements by Lessee shall constitute complete
acceptance of the Premises in their then condition, and a waiver of any
obligation of Lessor to make any further improvements to the Premises. Lessee
agrees to execute an estoppel letter or letter of acceptance at the time Lessee
takes possession. Lessee further agrees to furnish Lessor, at the time of taking
possession, with Certificate of Insurance giving proof of Lessee's compliance
with the insurance requirements of this Lease. Lessee further agrees to furnish
to Lessor at Lessor's request an executed estoppel letter stating the amount of
the security deposit being held by lessor, the amount and date due of the
monthly rental payment and that Lessee is not in default under the terms of this
Lease. Possession to begin on June 1, 2000 for Lessee to start with
improvements.

INITIAL
  JD
-------

10.      USE OF THE PREMISES. Lessee represents and warrants that the Leased
Premises shall be used and occupied for the conduct of ADMINISTRATIVE OFFICE
TELEMARKETING NOT PERMITTED and for no other use. Lessee hereby agrees that it,
its successors and assigns, shall not use nor permit the use of the Demised
Premises for any other use. Lessee shall not suffer or permit any coin-operated
games, pin-ball machines, video or television games, juke boxes, or any other
coin-operated music or amusement machines or devices, or any other electrical or
mechanical devises, games, machines, or amusements without prior written consent
of Lessor.

Lessee covenants that it will use, occupy and operate the entire Premises
continuously and without interruption during the Term in a competent, dignified,
and energetic manner consistent with all the terms and conditions of this Lease
(including the rules and Regulations that may be promulgated by Lessor).

Lessee agrees to adequately staff its store with sufficient employees and carry
sufficient quantity of stock of such character and quality to handle the maximum
business (b) to keep the Premises in a clean neat condition and not suffer,
permit, or commit any waste or nuisance.

11.      CARE OF PREMISES. Lessee shall commit no acts of waste and shall take
good care of the Premises and the fixtures and appurtenances therein, and shall,
in the use and occupancy of the premises, conform to all laws, orders and
regulation of the federal, state, and municipal governments and any of their
departments. Tenant shall keep the Premises in a clean and sightly, first class
condition.

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12.      MAINTENANCE AND REPAIR Lessee shall replace or repair any damage to the
Premises caused by Lessee or by any of Lessee's employees, agents, customers,
invitees, licensees, or caused by break-in, other than from ordinary wear.
Lessee shall maintain or replace, the interior of the Premises, including but
not limited to, all doors, windows, heating, cooling and mechanical equipment
and plate glass, and Lessor agrees, whenever possible, to extend to Lessee the
benefit of any enforceable manufacturer's warranties on such equipment, Lessee
is responsible for damages resulting from a break-in. If Lessee refuses or
neglects to make repairs or replace and/or refuses to maintain or replace the
Premises or any part thereof in a manner reasonably satisfactory to Lessor,
Lessor shall have the right, upon giving Lessee reasonable written notice of its
election to do so, to make such repairs or perform such maintenance on behalf of
and for the account of Lessee. In such event, such work shall be paid for by
Lessee promptly upon receipt of a bill thereof. Lessor reserves the right to
connect electrical extension cords to the leased Premises for temporary
maintenance purposes.

Lessor may choose to make inspections to the interior premises to see if proper
maintenance is being performed, including, but not limited to; such as, changing
of the air conditioning filters, repairing or replacing dripping faucets,
running toilets, worn out toilet flappers, worn out fluidmasters, etc.. If
Lessor finds maintenance is being neglected, Lessor shall make the necessary
repairs after giving Lessee 5 days to make the repairs and such work shall be
paid for by Lessee promptly upon receipt of a bill, thereof.

Lessor shall maintain in good condition and repair, the roof, exterior walls and
common areas of the Premises, (excluding store front, doors, window glass and
plate glass), Lessor shall not in any way be liable to Lessee for failure to
make repairs as herein specifically required unless Lessee has previously
notified Lessor in writing of the need for such repairs within a reasonable
period of time following receipt of such notification.

13.      REMOVAL OF PROPERTY. All authorized improvements made by Lessee to the
premises shall be removed not later than the last day of the lease term. Removal
of the Lessee's personal property and all the authorized improvements by Lessee
shall be made without causing any injury to the Premises and all the necessary
repairs shall be done in a good workmanship manner. Lessee shall surrender the
Premises in as good and original condition as they were at the beginning of the
term.

Lessor, upon written request by Lessee at his sole discretion, may waive in
writing all or part of the above obligation by the Lessee. All property or
improvements of Lessee that were to be removed remaining on the Premises after
the last day of the term of this lease, shall be conclusively deemed abandoned
and nay be removed by Lessor and Lessee shall reimburse Lessor for the cost of
such removal. Rent shall be due for reasonable additional time to perform such
removal. Rent shall be at the rate agreed in this lease.

At such time, Lessor shall return without interest Lessee's security deposit.
Throughout the term of this Lease, Lessor may utilize said security deposit for
construction of the Premises. All property of Lessee remaining on the Premises
after the last day of the term of this lease shall be conclusively deemed
abandoned and may be removed by Lessor, and lessee shall reimburse Lessor for
the cost of such removal.

14.      ALTERATIONS. Lessee shall not make any structural or exterior
alterations or additions upon said Premises. Lessee shall not have the right to
make alterations or repairs without first obtaining written consent of Lessor.
Lessee is not permitted to glue down carpet, install wood paneling or install
wallpaper.

15.      HAZARDOUS ACTIVITIES, WASTE, ABANDONMENT. Lessee shall not do or suffer
anything to be done on the Premises that will increase the rate of Fire
insurance on the building. Lessee shall not permit the accumulation of waste or
refuse matter on this Leased Premises or anywhere in or near the building.
Lessee shall not, without first obtaining the written consent of Lessor, abandon
the Premises or allow the Premises to become vacant or deserted. Lessee shall
place all trash inside sealed bags, break & flatten all boxes before placing
inside dumpster, keep dumpster lid closed at all times and keep the dumpster
area, the grounds and the parking area clean and free of debris.

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16.      RULES AND REGULATIONS. Lessee shall observe and comply with such
reasonable rules and regulations as Lessor may prescribe, on written notice to
Lessee for the safety, care and cleanliness of the building and the comfort,
quiet and convenience of other occupants of the building. Rules and Regulations
as of date of this lease are attached here as Exhibit C.

17.      CONTROL OF EXTERIOR APPEARANCE. The exclusive right is reserved by
Lessor to control the exterior appearance of the entire Premises, including but
not limited to all signs, decorations, lettering mid advertising visible from
the exterior of the building, (including those on the interior or on windows or
doors), shades, awnings, window coverings, exterior or interior lights, antenna,
canopies, or anything whatsoever affecting the visual appearance of the
building. Lessee will not place or cause to be placed or maintain any item of
any kind on or in any of the Premises affecting the visual appearance of the
building or common areas without first obtaining Lessor's written approval and
consent. Lessee further agrees to maintain any said items as may be approved in
good conditions and repair at all times.

18.      UTILITY SERVICES. Lessee shall pay for all utility services which may
be furnished to or used in or about the Premises and shall keep the same free
and clear of any lien or encumbrance of any kind whatsoever created by Lessee's
acts or omissions. Lessor shall cause all utilities to be separately metered to
the Premises, except for water and sewer which will be a common meter and Lessee
will be billed for its equitable share of water and sewer usage. In the event
that Lessor leases a portion of the Premises to a Lessee deemed by the Lessor to
be a user of water and sewer services in excess of the normal usage required by
other Lessees then the Lessor will either, at the Lessee's expense install a
flow meter to separately monitor the Lessee's water usage and bill the Lessee
directly or re-estimate the portion of usage by Lessee deemed to be in excess of
that amount considered normal and customary and to bill for added estimated
expense. The balance of the utility charges will be billed to the remaining
Lessee's for their equitable share of water use.

19.      DAMAGES. If the Leased Premises are damaged or destroyed by fire or
casualty and Lessor does not elect to terminate this Lease, Lessor shall proceed
with reasonable diligence to restore the same to its former condition. Lessee
agrees that during any period of reconstruction or repair of the Premises it
will continue the operation of its business within the Premises to the extent
practicable. During the period from the occurrence of the casualty until
Lessor's repairs are completed, the minimum guaranteed rental shall be reduced
by the Lessor to such extent as may be fair and reasonable, however, there shall
be no abatement of the other charges provided for herein.

20.      WAIVER OF SUBROGATION. Lessor shall not be liable to Lessee for any
damage by fire or other peril, whether or not included in the coverage afforded
by the standard form of fire insurance policy with extended coverage endorsement
attached (whether or not such coverage is in effect), no matter how caused, it
being understood that the Lessee will look solely to its insurer for
reimbursement. Any waiver of Lessor's rights against Lessee contained in this
Section shall be ineffective if such waiver shall cause Lessor's insurance to be
unobtainable, or result in an increase in the cost of Landlord's insurance,
unless Lessee shall pay such increase within ten (10) days after notice thereof

21.      REMEDIES OF LESSOR. If Lessee shall default in the payment of the rent
reserved herein, or in the payment of any item of additional rent or other
monies, due hereunder, or any part of same, or lessee shall default in the
observance of any of the other terms, covenants and conditions of this Lease; or
if the Demised Premises must be abandoned, deserted or vacated or if Lessee
shall sublet the demised Premises or assign this Lease except as herein
Provided; or

If Lessee shall make an assignment for the benefit of creditors, or file a
voluntary petition in bankruptcy or be adjudicated a bankrupt by any court and
such adjudication shall not be vacated thirty (30) days or Lessee takes the
benefit of any insolvency act, or Lessee be dissolved voluntarily or
involuntarily or have a receiver of Lessee's property appointed in any
proceedings other than bankruptcy proceedings, and such appointment shall not
be vacated within thirty (30) days after it has been made; then, upon the
happening of any one

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or more of the defaults events specified above, this lease and the term hereof
shall at the option and election of the Lessor wholly cease and terminate, and
there upon or at any time thereafter, Lessor may re-enter said Premises either
by force or otherwise and have possession of the same and/or may recover
possession thereof by summary proceedings otherwise but Lessee shall remain
liable to Lessor.

If Lessee shall default in the performance or observance of any term or
condition in this Lease and shall not cure such default within such 15 day
period and thereafter proceed with diligence to complete such cure Lessor may,
but shall not be obligated to, cure such default by Lessee under this Lease; and
whenever Lessor so elects all costs and expenses incurred by Lessor, including
reasonable attorney's fees, incurring a default shall be paid by Lessee to
Lessor on demand, together with interest thereon from the date of payment by
lessor to date of payment by lessee.

In the event of any one or more of the defaults set out above, all payments of
rent, additional rent remaining unpaid for the balance of the term of this Lease
or any extension thereof, shall, at the option of Lessor, become immediately due
and payable in full. Lessor may re-enter the Demised Premises using such force
for that purpose as may be necessary without being liable to any prosecution
therefore, and Lessor may repair or alter the Demised Premises in such manner as
Lessor may seem necessary or advisable to relet the Demised Premises. The Lessor
has the right to relet said Premises and to collect any deficiency in reletting
in addition to any reasonable expenses incurred, however, the Lessee's
obligation to pay damages must survive the termination of this Lease and the
election by Lessor of any single remedy does not preclude the use of any other
remedy whether or not mentioned in this Lease.

22.      LITIGATION, COURT COSTS, ATTORNEY'S FEES. In the event that at any time
either Lessor or Lessee shall institute any action or proceeding against the
other relating to the provisions on this Lease or any default hereunder than an
in the event the prevailing party in such action or proceeding shall be entitled
to recover from the other party its reasonable costs, expenses and attorneys'
fees which shall be deemed to have accrued on the commencement of such action is
prosecuted to judgment. The parties waive trial by jury in any action,
proceeding or counterclaim brought by either of them against the other on any
matters whatsoever arising under this Lease. This Lease shall be governed by,
construed and enforced in accordance with the laws of the State of Florida.

23.      ASSIGNMENT AND SUBLETTING. Lessee may assign or encumber this Lease and
the estate granted hereby and may sublease Leased Premises in whole or in part,
with written permission of Lessor. Consent by Lessor to one or more assignments
or sublettings shall not operate as a waiver of Lessor's rights as to any
subsequent assignments and sublettings. Lessee, however notwithstanding any such
assignments and sublettings, Lessee shall remain primarily responsible to Lessor
for the payment of rent and performance of all covenants, term and conditions
hereof on Lessee's part to be performed. The assignee or sublessee must agree to
perform any and all obligations of the Lessee under this Lease. If Lessee is a
corporation, partnership or other than an individual entity, a transfer of fifty
percent (50%) or more of the ownership or interest of Lessee, (whether such
transaction occurs at one or more times) shall be deemed to be an assignment for
purposes of this paragraph and shall require Lessor's consent.

24.      SUBORDINATION OF LEASE. This Lease shall be subject to and subordinate
to all mortgages that may now or hereinafter be granted by Lessor on the real
property of which the Premises form a part and also to all renewals,
modifications, consolidations and replacement of such mortgages. Lessee hereby
appoints Lessor attorney-in-fact, irrevocably, to execute and deliver any such
instrument for Lessee. Upon occupancy Lessee shall execute an Estoppel
Certificate and Agreement in the format: shown here as Exhibit "F".

Lessee shall within fifteen (15) days of receipt of written request from
Landlord, subsequent mortgagee, or purchaser provide an estoppel letter executed
and witnessed in the form requested by Landlord, subsequent mortgagee or
purchaser. Failure to deliver the estoppel letter within fifteen (15) days of
the request will become a default under the terms and conditions of this Lease.

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25.      MECHANIC'S LIENS. Lessee shall within ten (10) days after notice from
Lessor, discharge or bond off any mechanics' liens for materials or labor
claimed to have arisen out of acts or omissions of Lessee, third parties are
hereby placed on notice that the interest of the Lessor shall not be subject to
liens for improvements made by or on behalf of the Lessee upon the Demised
Premises and Lessee shall have no authority to subject Lessor's interest to such
claims or liens.

26       NOTICE.

                  LESSOR:           Joseph DiGerlando
                                    PO Box 15658
                                    Tampa, FL 33684-5658

                  LESSEE:           PETSVETSANDYOU.COM, INC.
                                    10919 N. DALE MABRY HWY.
                                    TAMPA, FLORIDA 33618

Any notice which is to be given to either party hereunder shall be deemed
sufficiently given if sent by certified or registered mail, postage prepaid, to
such party at its address appearing above in writing any notice given to Lessee
shall also be given to any assignee or sublessee and all notices to assignee or
sublessee of Lessee shall also be sent to Lessee.

27.      RIGHT TO INSPECT AND REPAIR. Lessor may, but shall not be obligated to,
enter the Premises at any reasonable time, on reasonable notice to Lessee
(except that no notice be given in case of emergency) for the purposed of
inspection or the making of such repairs, replacements, or additions in, to, on
and about the Premises or building, as Lessor deems necessary or desirable.

28.      CONSTRUCTIVE EVICTION. Lessee shall not be entitled to claim a
constructive eviction for any cause unless Lessee shall have first notified
Lessor in writing of the condition or conditions given rise to such claim and if
the complaint be justified, unless Lessor shall have failed within a reasonable
time after receipt of such notice to commence remedying such conditions. Lessee
shall serve notice of Lessor's default to the holder of the first mortgage on
the Premises. The holder of the first mortgage shall have the right, but not the
obligation, to cure the default.

29.      CONDEMNATION. The parties hereto agree that should the demised
Premises, or such portion thereof as will make the Premises unusable for the
purposes herein leased, be taken or condemned by competent authority for public
or quasi public use, then this Lease shall terminate from the date when
possession of the part so taken shall be required for the use and purpose for
which it had been taken.

If this Lease continues after a partial taking, the rent shall abate
proportionately as to the part taken. All compensation awarded for such taking
of the building, the fee, and this Leasehold, shall belong to and be the
property of Lessor; provided, however, the Lessor shall not be entitled to any
portion of the award made to Lessee for the value of Lessee's trade fixtures.
Lessee shall not be entitled to any damages for the unexplored portion of the
term of this Lease, or injury to its leasehold interest.

30.      INSURANCE

(a)      Tenant shall provide and maintain a comprehensive policy of liability
insurance with respect to the Demised Premises. Lessor and any designee of
Lessor shall be named as additional insureds. The liability insurance policy
shall protect Lessor, Lessee and any designee of Lessor against any liability
which arises from any occurrence on or about the demised Premises or any
appurtenance of the Demised Premises or which arises from any of the Claims
indicated in Paragraph 32 against which Lessee is required to indemnify Lessor.

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(b)      The policy is to be written by a good and solvent insurance company
satisfactory to Lessor. The coverage limits of the policy shall be at least
$1,000,000.00 single limits.

(c)      Lessee shall keep all plate glass of the Demised Premises insured
against all for the benefit of Lessor and Lessee in amounts and with a company
satisfactory to Lessor.

(d)      Lessee shall obtain and provide such other insurance that may be
carried on the Premises and Lessee's operations may be required by law or as may
be reasonably determined by Lessor.

On or before Lessee enters the demised Premises for any reason and before any
insurance policy shall expire, Lessee shall deliver to Lessor evidence of the
policy or a renewal thereof, as the case may be, together with evidence of
payment of applicable premiums. All insurance policies required to be carried
under this Lease by or on behalf of Lessee shall provide (and any certificate
evidencing the existence of any insurance policies, shall certify) that Landlord
shall be given ten (10) days written notice of any cancellation of failure to
renew or material change to, the policies, as the case may be.

Lessee agrees, at its own expense, to comply with all of the rules and
regulations of the Fire Insurance Rating Organization having jurisdiction and
any similar body. If as a result of failure by lessee to comply with the
foregoing sentence the fire insurance rate(s) applicable to the Premises, the
building or to any other premises in the building and/or to the contents of the
aforesaid (including rent insurance relating thereto) shall be higher than that
which would be applicable for the least hazardous type of occupancy legally
permitted therein, Lessee agrees that it will pay to lessor, on demand, as
additional rent, such portion of the premium for all fire insurance policies in
force as shall be attributable to such higher rate(s). If Lessee installs any
electrical equipment that overloads the lines in the Premises or the building
Lessee shall at its own expense, promptly make whatever changes are necessary to
remedy the condition and to comply with all requirements of the Lessor, the
board of Fire Insurance Underwriters (and any similar body) any governmental
authority having jurisdiction.

31.      FIRE EXTINGUISHERS. In the event that this Lease so permits and Lessee
engages in the preparation of food or packaged foods or engages in the use, sale
or storage of flammable or combustible material Lessee shall install a chemical
extinguishing device (such as U.L. approved ansul system) approved by the Fire
Insurance Rating Organization and shall keep such devices under service as
required by such organization.

32.      INDEMNITY. Lessee covenants that Lessor shall not be liable for any
damages or liability of any kind or for any injury to or death of persons or
damage to property of Lessee or any other person during the term of this Lease,
from any cause whatsoever, by reason of the use, occupancy and enjoyment of the
Premises by lessee or any person thereon or holding under said Lessee and that
Lessee will indemnify and save harmless lessor from all liability whatsoever on
account of any such real or claimed damage or injury and from all liens, claims
and demands arising out of the use upon said Premises, but Lessee shall not be
liable for damage or injury occasioned by the negligence of lessor and its
designated agents, servants or employees. This obligation to indemnify shall
include reasonable legal counsel and investigation costs and all other
reasonable costs, expenses and liabilities from the first notice that any claim
or demand is to be made or may be made.

33.      FAILURE TO OPEN FOR BUSINESS. In the event the Lessee fails to open the
Demised Premises for business, before NA fully fixtured, stocked and staffed,
Lessor shall have, in addition, to all other remedies herein provided, the right
to collect from leasee not only the minimum rent and additional rent, but also a
penalty at the rate of $25.00 per day for each day that Lessee shall have failed
to open for business after being required by the terms of this Lease to do so.

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34.      LESSOR RIGHT TO CANCEL. Should Lessee's business be or become or
attract customers whose conduct is offensive or in any way threatening to the
Lessor, the other tenants in the Shopping Center or the customers of the
Shopping Center or the customers of the tenants, the lessor may, at Lessor's
option, cancel and terminate this Lease, effective thirty (30) days after
written notice thereof to Lessee.

35.      QUIET ENJOYMENT. Provided Lessee has performed all of the terms,
covenants, agreements and conditions of this Lease, including the payment of
Rent and all other sums due hereunder, Lessee shall peaceably and quietly hold
and enjoy the Premises against Lessor and all persons claiming by, through or
under lessor, for the term herein described, subject to the provisions and
conditions of this Lease.

The Lessor agrees to make reasonable efforts to protect the Lessee from
interference or disturbance by third persons; However, the Lessor shall not be
liable for any such interference or disturbance, whether caused by other Lessees
of the Lessor or other persons, nor shall this Lessee be released from any of
the obligations of this Lease because of such interference or disturbance.

36.      LESSEE SIGNS. Lessee shall have the right to erect and maintain a sign
on the from wall of the building forming apart of the Demised Premises providing
it is in harmony with the decor of the balance of the shopping center and
provided Lessor has given its written consent to same, which shall not be
unreasonably withheld. Lessee or its agents or employees shall be responsible
for obtaining all required sign permits. Reference sign Criteria exhibit "d".
Lessee agrees to remove signs, if necessary for pressure washing. If Lessee
refuses, Lessor may remove the sign with no liability, at Lessee's expense.

37.      EXCLUSIONS. Lessee agrees that the premises will not be used for the
following purposes without the express written consent of Lessor; General
Dentist, Insurance, hair Salon, Title Company, Veterinarian, Pet Supplies.

38.      RECOGNITION. Upon execution of this Lease by both parties, Lessor shall
pay to      NONE    licensed real estate broker(s), a fee as set forth in a
separate ---------- agreement between Lessor and said broker(s), for brokerage
services rendered by said broker(s) to Lessor in this transaction.

39.      INTERPRETATION. If any provisions of this Lease are contrary to the law
of the State of Florida, each provision shall be deemed stricken herefrom and
the balance of this Lease shall remain fully in effect. If there is more than
one lessee or Lessor they shall be bound jointly and severally. The terms
"Lessor" and Lessee" and pronoun referring thereto shall be deemed to include
their respective heirs, executors, administrators, successors, and assigns
without regard to gender or number wherever the context so permits. The captions
to each article are used for convenience only and are not to be considered a
part of this agreement nor used in interpreting it.

40.      AUTHORITY TO EXECUTE. Lessor and Lessee do each hereby respectively
represent to the other that it has the capacity and authority to enter into this
agreement.

41.      NO OTHER REPRESENTATIONS. No representations or promises shall be
binding on the parties hereto except those representations and promises
contained herein or in some future writing signed by the party making such
representations or promises.

42.      ADDITIONAL TERMS. Any additional terms of this Lease may be set forth
in an attachment hereto and in the event of any conflict or inconsistency
between the terms of the text of this Lease and the provisions set forth in the
attachment the provisions of the attachment shall govern.

                                      -9-
<PAGE>   10

43.      APPROVAL OF LENDER. This Lease subject to approval by the permanent
lender.

44.      Any new codes or requirements by any agency such as but not limited to
City, County, State, Federal, or insurance company requirements will be done at
the tenants expense.

45.      Lessee agrees to move at the end of the monthly period, at the end of
the Lease. The monthly rent will not be prorated. Lessee is not permitted to pay
less than the monthly amount each month.

46.      Disposal of cardboard boxes requires the boxes to be broken down before
disposing in the proper container. All food trash must be double bagged and
sealed before placing in the dumpster. Lessor reserves the right to require the
Lessee to furnish his own dumpster if Lessee does not comply with the
requirements established by the Lessor for neatness and cleanliness.

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the day and year first above written.

WITNESSES;

Ruth Draycott                     By: /s/ Joseph Di Gerlando
--------------------------           -------------------------------------------
                                     "Lessor"

                                     JOSEPH DI GERLANDO
--------------------------           Post Office Box 17715
                                     Tampa, Florida 33682-7715
                                     (813) 936-5400

                                  By: /s/ James J. Carlstedt
--------------------------           -------------------------------------------
                                     "Lessee" JAMES J. CARLSTEDT
--------------------------           (Printed name) PETSVETSANDYOU.COM,INC.
                                     Address: 3103  SAMARA DRIVE
                                     City  TAMPA     State FL        Zip 33618
                                     Phone 813-935-8752
                                     Federal ID or
                                     E59-3619483

                                   By       None
--------------------------           -------------------------------------------
                                     "Guarantor"
--------------------------           Printed Name
                                     Address
                                         City           State             Zip
                                         Phone
                                     Social Security #

                                      -10-
<PAGE>   11
                                 BENTREE PLAZA

                                  EXHIBIT "A"

                                  [SITE PLAN]

<PAGE>   12

                                   EXHIBIT "B"

                                LEGAL DESCRIPTION

                                 BENTTREE PLAZA

That portion of the NE 1/4 of Section 16, Township 28 South, Range 18 East,
Hillsborough County, Florida, more fully described as follows;

Beginning at the SW corner of Bentree Estates, as recorded in PB 47, page of
Hillsborough County, Florida, thence N 89 49' 05" West along the N ROW line of
Floyd Road a distance of 170.63 feet, thence N 03 31' 29" East along the E ROW
line of State Road 597 (Dale Mabry Highway) a distance of 425.73 feet, thence
South 89 49' 05" East a distance of 147.01 feet, thence South 00 20' 41" West
along the West boundary of aforesaid Bentree Estates for a distance of 425.00
feet to the POB.

<PAGE>   13

EXHIBIT "C" (Page 1 of 2)

RULES AND REGULATIONS

The following Building Rules and Regulations have been adopted by the Lessor for
the care, protection and benefit of the Premises and the building and for
general comfort and welfare of all tenants.

1.       The sidewalks, entrances, service court service drive, trash collectors
or mechanical equipment shall not be obstructed by lessee or used by Lessee for
any purpose other than for ingress and egress to and from the premises and
Lessee, Rental Space.

2.       Lessor reserves the right to designate the time when freight,
furniture, foods, merchandise and other articles may be brought into, moved or
taken from lessee's Rental Space or the shopping Center.

3.       Lessee shall not put additional locks or Latches upon any door without
the written consent of Lessor. Any and all locks so added on any door shall
remain for the benefit of lessor and the keys to such locks shall be delivered
to lessor by and from lessee upon vacating the Premises.

4.       Lessor shall furnish parking facilities near the building for use by
Lessee, Lessee's employees, agents, guests, invitees, but Lessor does not
guarantee the availability of parking spaces. Such parking spaces will not be
directly assigned nor supervised by Lessor and lessor shall not be liable for
injuries, damage, theft or loss to persons or property that may occur upon or
near said parking areas, driveways, entrances and exits. The driveways,
entrances and exits upon, into and from such parking area shall not be
obstructed by Lessee, lessee's employees, agents, guests or invitees; providing,
however, Lessor shall not be responsible or liable for failure of any person to
observe this rule. Lessor reserves the right to control the parking if necessary
by designating certain areas or spaces for employees, agents, guests and/or
invitees, lessee, and employees shall park their vehicles in the parking
facilities located in the rear of the building.

5.       Lessor reserves the right at all times to exclude newsboys, loiterers,
vendors, solicitors and peddlers from the Premises and to require registration
or satisfactory identification or credentials from all persons seeking access to
any part of the building outside ordinary business hours. Lessor will exercise
its best judgment in the execution of such control but shall not be liable for
the granting or refusal of such access.

6.       No wires of any kind or type (including but not limited to T.V. and
radio antennas) shall be attached to the outside of the building and no wires
shall be run or installed in any part of the Building without Lessor's prior
written consent.

7.       Lessor shall furnish a reasonable number of door keys to Lessee's space
and the service entrance, if applicable, which shall be surrendered on
termination of the Lease. Lessor reserves the right to require a deposit for
such keys to insure their return at the termination of the Lease. Lessee shall
get keys only for Lessor and shall not obtain duplicate keys from any outside
source. Further, lessee shall not alter the locks or effect any substitution
of such keys as are presently being used in lessee's space or the service
entrance without written consent of the Lessor.

8.       Lessee shall remove all trash, garbage and other refuse each business
day from the service court and place properly in the trash collector container
in the rear of the Promises. Lessee shall at all times maintain the service
court surrounding the rear entrance to the Lessee's space in a neat, clean and
sanitary condition.

<PAGE>   14

EXHIBIT "C" (Page 2 of 2)

9.       Lessor reserves the right at all times to control signage, both
permanent and temporary within and without the tenants rental space. Lessor
further reserves the right to require the immediate removal of objectionable
displays, signs, or merchandise within the Tenants Premises. Lessor is not
responsible for tenants signs. Tenant agrees to remove his sign from the
building if the if Landlords request its removal for the purpose of washing or
painting.

10.      Lessee agrees to pay Lessor all expenses, he may incur for the
enforcement of the rules, regulations 7 terms of this lease, such as but not
limited to; long distance telephone calls, stamps, legal fees, inspection,
administration expenses, gas, car mileage, towing fees and any kind of
miscellaneous expenses, after first notice of breach is given and Lessee fails
to make corrections.

<PAGE>   15

                                   EXHIBIT "D"

                                 BENTTREE PLAZA
                                SIGNAGE CRITERIA

The Tenant shall be permitted to place individual lettering naming its business
above Tenant's entrance. Letter size is to be no greater than 6" in height, and
may be made of wood, plastic or styrofoam and painted in a white color that
matches the other signs. Letter type and style may be either (a) ESBRO or (b)
ROMAN. Landlord shall have the right to approve layout copy and sign company
prior to Installation.

Landlord is not responsible for the sign for any reason whatsoever, including
but not limited to damages caused by anyone working on the premises, visitors,
breakage by wind, rain or weather. If a sign is broken, Tenant will be
responsible for repair or replacement.

RE: DIRECTORY SIGN ONLY:

EACH TENANT SHALL BE REQUIRED TO PURCHASE AN ACRYLIC-PLEX PANEL WHICH WILL BE
INSTALLED ON EACH SIDE OF THE DIRECTORY, FROM: SIGNS BY FONG, PHONE # 239-3085,
IF TENANT DESIRES A SIGN ON THE DIRECTORY. COPY, LAYOUT AND DESIGN TO BE
APPROVED BY LESSOR AND REQUIRED TO BE OF UNIFORM TYPE, STYLE AND COLOR.

TENANT IS RESPONSIBLE FOR THE COST OF REMOVING ALL SIGNS AT THE END OF THE LEASE
AND RESTORING THE SURFACE UNDER THE SIGNS

<PAGE>   16

EXHIBIT "E"

GUARANTEE OF LEASE

         In consideration of the granting of the lease from Joseph Di Gerlando
"Lessor" to _______________________________"Lessee" (hereinafter called
"guarantors") jointly and severally guarantee the timely payment of all rent due
from Lessee to Lessor and the timely and proper performance of all other
obligation of lessee to lessor. The guarantee shall apply during the original
term of the lease and during any extension whether by exercise of the option
contained in the lease, or by other written Agreement and during all other
periods when lessee is in possession of the premises, whether by holding over or
otherwise. Guarantors waive notice of default by Lessee and agree that
guarantors shall be responsible for ascertaining whether Lessee is performing
his obligations. Guarantors consent to any extension or extensions of time for
payment of rent or performance of other obligations due from Lessee. In the
event of default by lessee or surrender or attempted surrender of the premises
by Lessee, Lessor may at its options, without terminating the obligation of the
guarantors, re-enter the premises and relet the premises and guarantors shall be
liable for any deficiency of the rent received from such re-letting form the
rent and other obligations due from Lessee according to the terms of the lease.
In the event of default by Lessee, lessor shall have obligation whatsoever to
attempt to re-let the premises; and may leave the premises vacant and Guarantors
consent to any changes in the lease which may be made by Lessor and lessee.
Guarantors consent to any change in the character of the use of the premises and
to any sublease or assignment of the lease by Lessee; and to any assignment of
the rents by Lessor, or sale of the Lessor's interest in the premises and agree
to be bound to Lessor's successors or assignees. In the event of default by
lessee, Lessor need not first exhaust Lessor's remedies against lessee, but may
proceed directly against guarantors. Guarantors will pay Lessor's attorney's
fees, expert witness fees and court costs incurred in the enforcement of
Lessor's rights against guarantor, together with all such fees and court costs
against guarantor, incurred in the enforcement of Lessor's rights against
guarantors together with all such fees and court costs incurred on account of
any default by lessee.

Executed this ____day of______________, ________.
Lessee   NONE
      --------------------------------------------------------------------------
      Sign

      Print Name
                 ---------------------------------------------------------------
      Address
              ------------------------------------------------------------------
      City                               State                      ZIP
           ------------------------------      ---------------------    --------
      Phone#
             ----------------------------
      Social Security Number
                            -------------------------------

<PAGE>   17

EXHIBIT "F"

ESTOPPEL CERTIFICATE AND AGREEMENT

     ESTOPPEL LETTER.  Lessee agrees within ten (10) days after request therefor
by Lessor to execute in recordable form and deliver to Lessor a statement, in
writing, certifying (a) that this Lease is in full force and effect, (b) the
date of commencement of the term of this Lessee, (c) that rent is paid currently
without set-off or defense thereto, (d) the amount of rent, if any, paid in
advance, and (e) that there are no incurred defaults by Lessor or stating those
claimed by Lessee, provided that, in fact such facts are accurate and
ascertainable.

     ATTORNMENT. Lessee shall, in the event any proceedings are brought for the
foreclosure of or in the event of exercise of the power of sale under any
mortgage made by Lessor covering the leased premise, attorn to the purchaser
upon any such foreclosure or sale and recognize such purchaser as the Lessor
under this lease.

     SUBORDINATION. Lessee agrees that this Lease shall, at the request of the
Lessor, be subordinate to any and all advances to be made thereunder, and to the
interest thereon, and all renewals, replacements and extensions thereof. Lessee
also agrees that any mortgage or trustee may elect to have this Lease a prior
lien to its mortgage or deed of trust, and in the event of such election and
upon notification by such mortgagee or trustee to Lessee to that effect, this
Lease shall be deemed prior lien to the said mortgage or deed of trust, whether
this Lease is dated prior to or subsequent to the date of said mortgage or deed
or trust. Lessee agrees, that upon the request of Lessor, any mortgage or any
trustee it shall execute whatever instruments may be required to carry out the
intent of this Section.

LESSEE /s/ James J. Carlstedt
       -------------------------------
           James J. Carlstedt
       (Signature and Printed Name)

<PAGE>   18

EXHIBIT "G"

"FLORIDA STATUTES 404.056(8) requires the following statement:

"RADON GAS: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
unit.

<PAGE>   19

EXHIBIT "H" (Page 1 of 2)

HAZARDOUS SUBSTANCES RIDER

In consideration of the execution of the Lease between the parties to which this
Rider is attached, Tenant warrants and represents to Landlord the following:

(a)      The premises at all times hereafter will be in full compliance with all
federal, state and local environmental laws and regulations, including but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), The Superfund Amendments and Reauthorization Act of 1986
("SARA"), the federal water Pollution and control Act, the Federal clean Water
Act, The national environmental Policy act. the Resource conservation and
recovery act of 1976 ("RCRA") the hazardous Material Transportation Act, the
Federal clean Air Act, chapters 376 ("Pollutant Discharge Prevention and
Removal"), 377 ("Energy Resources"), and 403 ("Environmental Control") of
Florida Statutes and rules related thereto including Chapters 17, 27 and 40 of
the Florida Administrative code (hereinafter together with any amendments
thereto "Environmental Laws").

(b)      Tenant has fully disclosed to the Landlord the extent of its use on the
Premises of certain regulated materials which are "Hazardous Substances" (as
hereinafter defined) and Tenant has obtained and will maintain all licenses,
permits and approvals required with respect thereto and is in full compliance
with all of the terms, conditions and requirements of such licenses, permits and
approvals.

(c)      Tenant shall not, intentionally or unintentionally, release, spill,
leak, pump, pour, emit, empty or dump Hazardous Substances into or onto the
premises.

(d)      Tenant shall promptly notify Landlord of any change in the nature or
extent of any Hazardous Substances maintained, on, in or under the Premises or
used in connection therewith and shall immediately notify Landlord should Tenant
receive a summons, citation, directive, letter or other communication, written
or oral, from any federal, state or local governmental agency or department
concerning any intentional or unintentional act or omission by Tenant or any
other person or entity with respect to the Premises which resulted in the
releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of
hazardous substances into or onto the premises, or concerning any other actual
or alleged violation with respect to the premises of any federal, state or local
statue, ordinance, rule, regulation or other law pertaining to hazardous
substances.

(e)      Tenant, shall, at its sole expense, take all actions as may be
necessary or advisable for the clean up of hazardous Substances on or with
respect to the Premises, including without limitation, all removal, containment
and remedial actions in accordance with all applicable laws and in all event in
a manner satisfactory to landlord and shall further pay or cause to be paid all
clean up, administrative and enforcement costs of governmental agencies with
respect to hazardous Substances on or with respect to the Premises if obligated
to do so by contract or law.

(f)      Tenant covenants and agrees, at its sole cost and expense, to
indemnify, protect and hold landlord harmless against and from any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs, clean up orders,
disbursements or expenses, including, without limitation, attorney's and
environmental consultant's fees and expenses, of any kind or nature or of any
nature whatsoever, which may at any time, be imposed upon, incurred by or
assessed or awarded against landlord and arising from or out of any hazardous
Substances on, in, under or affecting all or any portion of the Premises. This
indemnification shall include, without limitation, all of the following:

(I)      The cost of removal of any and all hazardous Substances from all or any
portion of the Premises or common areas or any surrounding areas which are
required to be cleaned up as a result of Tenant's operations.

<PAGE>   20

EXHIBIT "H" (Page 2 of 2)

(II)     Additional costs required to take necessary precautions to protect
against the release of hazardous Substances on, in, under or affect the Premises
or the common areas into the air, any body of water, any other public domain or
any surrounding areas; and

(III)     Costs incurred to comply, in connection with all or any portion of the
Premises, or the common Areas, or any surrounding areas where hazardous
Substances were released on the Premises, with all applicable environmental
Laws. Landlord's rights under this section shall be in addition to all other
rights of Landlord under this lease. The indemnification and hold harmless
agreements set forth herein shall survive the expiration or termination of the
term of this lease.

(g)      For the purposes of this Lease, "Hazardous substances" shall mean any
hazardous material, substance, waste or other environmentally regulated
substances (including without limitation, asbestos, polychlorinated biphenals
(PCB's), petroleum products, toxic or radioactive materials, ammonia, chlorine,
pesticides, bulk chemicals, substances listed in the United States Department of
Transportation Table or by the Environmental Protection Agency (or any successor
agencies) as hazardous Substances or which are classified as hazardous or toxic
under local, state or federal laws, rules or regulations).

<PAGE>   21

EXHIBIT "I"

ADDITIONAL CONDITIONS

(A)      Tenant is not allowed to glue down the carpet or install any wall paper
or paneling.

(B)      Under no circumstance is Tenant allowed to do any improvements to the
premises without written authorization from Landlord.

(C)      Tenant shall return the premises at the end of the lease term in the
same condition they were at the date of Tenant move in, ______ including but not
limited to the following:

         (1) floors; exposed concrete or______________(Carpet to be removed by
the Lessee when Lessee vacates the premises.)

         (2)      Perimeter walls: Painted or______________________.

         (3)      Cabinets: To be removed unless Tenant receives permissions in
writing to leave in place. NONE EXISTING

         (4)      Ceilings: replace damaged tiles, ceiling grids, unless caused
by roof leaks.

         (5)      Outside Sign: Remove, patch and paint all affected areas.

         (6)      Landlord reserves the right to connect electrical extension
cords to the premises for temporary maintenance.

         (7)      Built in equipment: remove, restore, patch, and repair paint
as necessary to affected areas, unless Tenant receives written permission to
leave them in place.

         (8)      Any work or improvements or repairs done to the Premises,
without written authorization will be a breach of the Lease constituting
Default.

         (9)      Tenant to comply with all federal, state, county, city
licenses, rules, regulations, statues, etc., including but not limited to Code
of Environmental Protection Regulations as per compliance list attached hereby
and made a part of this Lease, as Exhibit "G". Any noncompliance with this
sub-paragraph will constitute a Default by Tenant.

LESSEE: /s/ JAMES J. CARLSTEDT, CHAIRMAN
        ------------------------------------
         Sign     JAMES J. CARLSTEDT

                  PETSVETSANDYOU.COM,INC.
         -----------------------------------
         Print Name<PAGE>   1
                                                                   EXHIBIT 10.21

                         MERITAGE HOSPITALITY GROUP INC.

                      1996 MANAGEMENT EQUITY INCENTIVE PLAN

                                   ARTICLE 1.
                                   OBJECTIVES

         Meritage Hospitality Group Inc. has established this Management Equity
Incentive Plan effective April 16, 1996 as an incentive to the attraction and
retention of dedicated and loyal employees of outstanding ability, to stimulate
the efforts of such persons in meeting Meritage Hospitality Group Inc.'s
objectives and to encourage ownership of its Common Shares by employees.

                                   ARTICLE 2.
                                   DEFINITIONS

         .1 For purposes of the Plan the following terms shall have the
definition which is attributed to them, unless another definition is clearly
indicated by a particular usage and context.

                  A. "CODE" means the Internal Revenue Code of 1986, as amended.

                  B. The "COMPANY" means Meritage Hospitality Group Inc. and any
         subsidiary of Meritage Hospitality Group Inc., as the term "subsidiary"
         is defined in Section 424(f) of the Code.

                  C. "DATE OF EXERCISE" means the date on which the Company has
         received a written notice of exercise of an Option, in such form as is
         acceptable to the Committee, and full payment of the purchase price.

                  D. "DATE OF GRANT" means the date on which the Committee makes
         an award of an Option.

                  E. "ELIGIBLE EMPLOYEE" means any individual who performs
         services for the Company and is treated as an employee for federal
         income tax purposes.

                  F. "FAIR MARKET VALUE" means the last sale price reported on
         any stock exchange or over-the-counter trading system on which Shares
         are trading on the last trading day prior to a specified date or, if no
         last sales price is reported, the average of the closing bid and asked
         prices for a Share on a specified date. If no sale has been made on the
         specified date, then prices on the last preceding day on which any such
         sale shall have been made shall be used in determining Fair Market
         Value under either method prescribed in the previous sentence.

                  G. "INCENTIVE SHARE OPTION" shall have the same meaning as
         given to that term by Section 422 of the Code.

                  H. "NONQUALIFIED SHARE OPTION" means any Option granted under
         the Plan which is not considered an Incentive Share Option.

<PAGE>   2

                  I. "OPTION" means the right to purchase a stated number of
         Shares at a specified price. The Option may be granted to an Eligible
         Employee subject to the terms of this Plan, and such other conditions
         and restrictions as the Committee deems appropriate. Each Option shall
         be designated by the Committee to be either an Incentive Share Option
         or a Nonqualified Share Option.

                  J. "OPTION PRICE" means the purchase price per Share subject
         to an Option and shall be fixed by the Committee, but shall not be less
         than 100% of the Fair Market Value of a Share on the Date of Grant in
         the case of an Incentive Share Option.

                  K. "PERMANENT AND TOTAL DISABILITY" shall mean any medically
         determinable physical or mental impairment rendering an individual
         unable to engage in any substantial gainful activity, which disability
         can be expected to result in death or which has lasted or can be
         expected to last for a continuous period of not less than 12 months.

                  L. "PLAN" means this 1996 Management Equity Incentive Plan as
         it may be amended from time to time.

                  M. "SHARE" means one Common Share, $.01 par value, of the
         Company.

                                   ARTICLE 3.
                                 ADMINISTRATION

         .1 The Plan shall be administered by a committee (the "Committee")
designated by the Board of Directors of the Company. The Committee shall be
comprised solely of three or more directors each of whom shall be (i) a
"disinterested person" as defined under Rule 16b-3 of the Securities Exchange
Act of 1934 (the "Act") and (ii) an "outside director" to the extent required by
Section 162(m) of the Internal Revenue Code ("Section 162(m)"). Notwithstanding
the foregoing, to the extent relevant state law now or hereafter permits, the
Committee may be comprised solely of two or more such directors.

         Actions shall be taken by a majority of the Committee.

         .2 Except as specifically limited by the provisions of the Plan, the
Committee in its discretion shall have the authority to:

                  A. Determine which Eligible Employees shall be granted
         Options;

                  B. Determine the number of Shares which may be subject to each
         Option;

                  C. Determine the Option Price;

                  D. Determine the term of each Option;

                  E. Determine whether each Option is an Incentive Share Option
         or Nonqualified Share Option;

                  F. Interpret the provisions of the Plan and decide all
         questions of fact arising in its application; and

                  G. Prescribe such rules and procedures for Plan administration
         as from time to time it may deem advisable.

                                       2

<PAGE>   3

         .3 Any action, decision, interpretation or determination by the
Committee with respect to the application or administration of this Plan shall
be final and binding upon all persons, and need not be uniform with respect to
its determination of recipients, amount, timing, form, terms or provisions of
Options.

         .4 No member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Option
granted hereunder, and to the extent permitted by law, all members shall be
indemnified by the Company for any liability and expenses which may occur
through any claim or cause of action.

                                   ARTICLE 4.
                             SHARES SUBJECT TO PLAN

         .1 The Shares that may be made subject to Options granted under the
Plan shall not exceed 725,000 Shares in the aggregate. Except as provided in
Section , upon lapse or termination of any Option for any reason without being
completely exercised, the Shares which were subject to such Option may again be
subject to other Options.

         .2 The maximum number of Shares with respect to which Nonqualified
Share Options may be granted to any employee during each fiscal year of the
Company is 50,000 Shares. If a Nonqualified Share Option is canceled, it
continues to be counted against the maximum number of Shares for which
Nonqualified Share Options may be granted to an employee. If an Nonqualified
Share Option is repriced, the transaction is treated as a cancellation of the
Nonqualified Share Option and a grant of a new Nonqualified Share Option.

                                   ARTICLE 5.
                               GRANTING OF OPTIONS

         Subject to the terms and conditions of the Plan, the Committee may,
from time to time prior to April 16, 2006, grant Options to Eligible Employees
on such terms and conditions as the Committee may determine. More than one
Option may be granted to the same Eligible Employee.

                                   ARTICLE 6.
                                TERMS OF OPTIONS

         .1 Subject to specific provisions relating to Incentive Share Options
set forth in Article , each Option shall be for a term of from one to ten years
from the Date of Grant and may not be exercised during the first twelve months
of the term of said Option. Commencing on the first anniversary of the Date of
Grant of an Option, the Option may be exercised for 20% of the total Shares
covered by the Option with an additional 20% of the total Shares covered by the
Option becoming exercisable on each succeeding anniversary until the Option is
exercisable to its full extent. This right of exercise shall be cumulative and
shall be exercisable in whole or in part. The Committee in its sole discretion
may permit particular holders of Options to exercise an Option to a greater
extent than provided herein. The Committee may establish a different exercise
schedule and impose other conditions upon exercise for any particular Option or
groups of Options.

         .2 The holder of an Option must remain continuously in the service of
the Company as an employee for a period of at least twelve months. Nothing
contained in this Plan or in any Option granted pursuant to it shall confer upon
any employee any right to continue in the employ of the Company or to interfere
in any way with the right of the Company to terminate employment at any time. So
long as a holder of an Option shall continue to be an employee of the Company,
the Option shall not be affected by any change of the employee's duties or
position.

                                       3
<PAGE>   4

                                   ARTICLE 7.
                               EXERCISE OF OPTIONS

         Any person entitled to exercise an Option in whole or in part may do so
by delivering a written notice of exercise to the Company, attention Corporate
Secretary, at its principal office. The written notice shall specify the number
of Shares for which an Option is being exercised and the grant date of the
option being exercised and shall be accompanied by full payment of the Option
Price for the Shares being purchased.

                                   ARTICLE 8.
                             PAYMENT OF OPTION PRICE

         .1 Payment of the Option Price may be made in cash, by the tender of
Shares, or both. Shares tendered shall be valued at their Fair Market Value on
the Date of Exercise.

         .2 Payment through tender of Shares may be made by instruction from the
Optionee to the Company to withhold from the Shares issuable upon exercise that
number which have a Fair Market Value on the Date of Exercise equal to the
exercise price for the Option or portion thereof being exercised.

                                   ARTICLE 9.
             INCENTIVE SHARE OPTIONS AND NONQUALIFIED SHARE OPTIONS

         .1 The Committee in its discretion may designate whether an Option is
to be considered an Incentive Share Option or a Nonqualified Share Option. The
Committee may grant both an Incentive Share Option and a Nonqualified Share
Option to the same individual. However, where both an Incentive Share Option and
a Nonqualified Share Option are awarded at one time, such Options shall be
deemed to have been awarded in separate grants, shall be clearly identified, and
in no event will the exercise of one such Option affect the right to exercise
the other such Option.

         .2 Any option designated by the Committee as an Incentive Share Option
will be subject to the general provisions applicable to all Options granted
under the Plan. In addition, the Incentive Share Option shall be subject to the
following specific provisions:

                  A. At the time the Incentive Share Option is granted, if the
         Eligible Employee owns, directly or indirectly, shares representing
         more than 10% of (i) the total combined voting power of the Common
         Shares of the Company, or (ii) a corporation that owns 50% or more of
         the total combined voting power of the Common Shares of the Company,
         then:

                           (i) The Option Price must equal at least 110% of the
                  Fair Market Value on the Date of Grant; and

                           (ii) The term of the Option shall not be greater than
                  five years from the Date of Grant.

                  B. The aggregate Fair Market Value of Shares (determined at
         the Date of Grant) with respect to which Incentive Share Options are
         exercisable by an Eligible Employee for the first time during any
         calendar year under this Plan or any other plan maintained by the
         Company shall not exceed $100,000.

         .3 If any Option is not granted, exercised, or held pursuant to the
provisions noted immediately above, it will be considered to be a Nonqualified
Share Option to the extent that the grant is in conflict with these
restrictions.

                                       4

<PAGE>   5

                                  ARTICLE 10.
                            TRANSFERABILITY OF OPTION

         An Option in not transferable by the Eligible Employee to whom granted
other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title 1 of the
Employee Retirement Income Security Act, as amended.

                                  ARTICLE 11.
                             TERMINATION OF OPTIONS

         .1 An Option will terminate as follows:

                  A. Upon exercise or expiration by its terms.

                  B. Except as provided in Subsection , upon termination of
         employment for reasons other than cause, the then-exercisable portion
         of any Option will terminate on the 60th day after the date of
         termination. The portion not then exercisable will terminate on the
         date of termination of employment. For purposes of the Plan, a leave of
         absence approved by the Company shall not be deemed to be termination
         of employment.

                  C. If an Eligible Employee holding an Option dies or becomes
         subject to a Permanent and Total Disability while employed by the
         Company, or within 60 days after termination of employment, for reasons
         other than cause, such Option may be exercised, to the extent
         exercisable on the date of such death, Permanent and Total Disability
         or termination of employment, at any time within one year after the
         date the employment of such Eligible Employee terminated, by the estate
         or guardian of such person or by those persons to whom the Option may
         have been transferred by will or by the laws of descent and
         distribution.

                  D. Options shall terminate immediately if employment is
         terminated for cause. Cause is defined as including, but not limited
         to, theft of or intentional damage to Company property, intentional
         harm to the Company's reputation, material breach of the Optionee's
         duty of fidelity to the Company, the use of illegal drugs, the
         commission of a criminal act, willful violation of Company policy, or
         trading in securities of the Company for personal gain based on
         knowledge of the Company's activities or results when such information
         is not available to the general public.

                  E. If an Eligible Employee holding an Option violates any
         terms of any written employment or noncompetition agreement between the
         Company and the Eligible Employee, all existing Options held by such
         Employee will terminate. In addition, if at the time of such violation
         the Employee has exercised Options but has not received certificates
         for the shares to be issued, the Company may void the Option and its
         exercise. Any such actions by the Company shall be in addition to any
         other rights or remedies available to the Company in such
         circumstances.

         .2 Except as provided in Article hereof, in no event will the
continuation of the term of an Option beyond the date of termination of
employment allow the Eligible Employee, or his beneficiaries or heirs, to accrue
additional rights under the Plan, or to purchase more Shares through the
exercise of an Option than could have been purchased on the day that employment
was terminated. In addition, notwithstanding anything contained herein, no
Option may be exercised in any event after the expiration of ten years from the
date of grant of such Option.

                                       5
<PAGE>   6

                                  ARTICLE 12.
                     ADJUSTMENTS TO SHARES AND OPTION PRICE

         .1 In the event of changes in the outstanding Common Shares of the
Company as a result of share dividends, split-ups, recapitalizations,
combinations of Shares or exchanges of Shares, the number and class of Shares
for all purposes covered by the Plan, and the number and class of Shares and
price per Share for each Option and each outstanding Option covered by the Plan,
shall be correspondingly adjusted by the Committee.

         .2 The Committee shall make appropriate adjustments in the Option Price
to reflect any spin-off of assets, extraordinary dividends or other
distributions to shareholders.

         .3 In the event of the dissolution or liquidation of the Company or any
merger, consolidation, exchange or other transaction in which the Company is not
the surviving corporation or in which the outstanding Shares of the Company are
converted into cash, other securities or other property, each outstanding Option
shall terminate as of a date fixed by the Committee provided that not less than
20 days' written notice of the date of expiration shall be given to each holder
of an Option and each such holder shall have the right during such period
following notice to exercise the Option as to all or any part of the Shares for
which it is exercisable at the time of such notice. The Committee, in its sole
discretion, may provide that Options in such circumstances may be exercised to
an extent greater than the number of Shares for which they were exercisable at
the time of such a notice.

         .4 All outstanding Options shall become immediately exercisable in full
if a change in control of the Company occurs. For purposes of this Agreement, a
"change in control of the Company" shall be deemed to have occurred if (a) any
"person," as such term is used in Sections 13(d) and 14(d) of the Act, other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company becomes the "beneficial owner," as defined in Rule 13d-3
under the Act, directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities; or (b) during any period of one year (not including any period prior
to the execution of this Agreement), individuals who at the beginning of such
period constitute the Board of Directors and any new director whose election by
the Board or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof.

                                  ARTICLE 13.
                                OPTION AGREEMENTS

         .1 All Options granted under the Plan shall be evidenced by a written
agreement in such form or forms as the Committee in its sole discretion may
determine.

         .2 Each optionee, by acceptance of an Option under this Plan, shall be
deemed to have consented to be bound, on the optionee's own behalf and on behalf
of the optionee's heirs, assigns and legal representatives, by all terms and
conditions of this Plan.

                                  ARTICLE 14.
                       AMENDMENT OR DISCONTINUANCE OF PLAN

         .1 The Board of Directors of the Company may at any time amend,
suspend, or discontinue the Plan; provided, however, that no amendments by the
Board of Directors of the Company shall, without further approval of the
shareholders of the Company:

                  A. Change the definition of Eligible Employees;

                                       6
<PAGE>   7

                  B. Except as provided in Articles and hereof, increase the
         number of Shares which may be subject to Options granted under the
         Plan; or

                  C. Cause the Plan or any Option granted under the Plan to fail
         to be excluded from the $1 million deduction limitation imposed by
         Section 162(m) of the Code, or qualify as an "Incentive Share Option"
         as defined by Section 422 of the Code.

         .2 No amendment or discontinuance of the Plan shall alter or impair any
Option granted under the Plan without the consent of the holder thereof.

                                  ARTICLE 15.
                                 EFFECTIVE DATE

         This Plan shall become effective as of April 16, 1996, having been
adopted by the Board of Directors of the Company on such date subject to
approval by the affirmative vote of the holders of a majority of the Common
Shares of the Company voting on the issue, and all Options granted prior to such
approval are expressly conditioned upon such approval being received. If
shareholder approval is not received within 12 months of the Effective Date,
Options granted pursuant to this Plan shall be null and void.

                                  ARTICLE 16.
                                  MISCELLANEOUS

         .1 Nothing contained in this Plan or in any action taken by the Board
of Directors or shareholders of the Company shall constitute the granting of an
Option. An Option shall be granted only at such time as a written Option shall
have been executed and delivered to the respective employee and the employee
shall have executed an agreement respecting the Option in conformance with the
provisions of the Plan.

         .2 Certificates for Shares purchased through exercise of Options will
be issued in regular course after exercise of the Option and payment therefor as
called for by the terms of the Option but in no event shall the Company be
obligated to issue certificates more often than once each quarter of each fiscal
year. No persons holding an Option or entitled to exercise an Option granted
under this Plan shall have any rights or privileges of a shareholder of the
Company with respect to any Shares issuable upon exercise of such Option until
certificates representing such Shares shall have been issued and delivered. No
Shares shall be issued and delivered upon exercise of an Option unless and until
the Company, in the opinion of its counsel, has complied with all applicable
registration requirements of the Securities Act of 1933 and any applicable state
securities laws and with any applicable listing requirements of any national
securities exchange on which the Company securities may then be listed as well
as any other requirements of law.

         .3 This Plan shall continue in effect until the expiration of all
Options granted under the Plan unless terminated earlier in accordance with
Article ; provided, however, that it shall otherwise terminate ten years after
the Effective Date.

                                       7

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