Document:

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                                                                   EXHIBIT 10.34

            SECOND MODIFICATION AND RATIFICATION OF LEASE AGREEMENT

This Second Modification and Ratification of Lease Agreement is made and entered
into between Regal Business Center, Inc. (Lessor and Landlord) and PUBLISHER
DISTRIBUTION SERVICES, INC. A NEVADA CORPORATION, (Lessee and Tenant) for and in
consideration of good and valuable consideration, the receipt of which is hereby
acknowledged.

                              W I T N E S S E T H

Landlord and Tenant hereby confirm and ratify, except as modified below, all of
the terms and conditions and covenants in that certain written Lease Agreement
dated September 1, 1998, and later amended through a First Modification and
Ratification of Lease Agreement dated October, 1998, between Regal Business
Center, Inc. and Publisher Distribution Services, Inc., a Nevada corporation for
the following described property:

             4653 LESTON AVENUE, SUITE 706, DALLAS, TEXAS 75247 AND
             CONSISTING OF APPROXIMATELY 47,877/SF OF LEASEABLE AREA.

Whereas, Landlord and Tenant wish to modify the referenced Lease effective
immediately. The parties, therefore, agree as follows:

1.    Certain Lease Agreement is renewed and extended for an additional
      thirty-six (36) months commencing November 1, 2001 and ending on
      October 31, 2004.

2.    The monthly base rental for subject space shall be payable as follows:

              Months l-36:       $3.55/SF or $l4,163.61 per month

3.    The operating expenses as outlined in Section 1.06 and Section 3.05 of the
      Lease Agreement shall be amended to reflect $1.02 per square foot. The
      base year for taxes as outlined in Section 1.12 of the Lease Agreement
      shall be amended to reflect a base year of 2000.

4.    Tenant accepts the Leased Premises in its current "as-is" condition.

Landlord and Tenant acknowledge that CB Richard Ellis, Inc. is acting as an
intermediary in this transaction and consent to such.

Except as herein expressly changed and amended, all of the other terms and
conditions of the Lease shall remain in full force and effect as originally set
forth therein.

DATED AS OF THIS   DAY OF OCTOBER, 2001.

LANDLORD:                                     TENANT: PUBLISHER DISTRIBUTION
REGAL BUSINESS CENTER, INC.                           SERVICES, INC.
                                                      A NEVADA CORPORATION

By:  /s/ Barry Kotler                          By: /s/ Dave Buescher
  ------------------------                       ----------------------
    Barry Kotler - President                       Dave Buescher

By:  /s/ David Nisker                          Title:    CEO
  -------------------------                         --------------------
     David Nisker - Vice President

BROKER: CB RICHARD ELLIS, INC.                 BROKER: CB RICHARD ELLIS, INC.

By:  /s/ David F. Easterling                   By: /s/ Steven Berger
  ---------------------------                    ----------------------
     David F. Easterling                            Steven Berger

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                     FIRST MODIFICATION AND RATIFICATION OF
                                 LEASE AGREEMENT

This First Modification and Ratification of Lease Agreement is made and entered
into between REGAL BUSINESS CENTER, INC. ("Lessor and Landlord") and PUBLISHER
DISTRIBUTION SERVICES, INC., A NEVADA CORPORATION ("Lessee and Tenant") for and
in consideration of good and valuable consideration, the receipt of which is
hereby acknowledged.

                                  WITNESSETH

Landlord and Tenant hereby confirm and ratify, except as modified below, all of
the terms and conditions and covenants in that certain written Lease Agreement
dated September 1, 1998 between PUBLISHER DISTRIBUTION SERVICES, INC., A NEVADA
CORPORATION and REGAL BUSINESS CENTER, INC. for leased premises situated at 4653
Leston Ave., Suite 706, Dallas, Texas 75247 and consisting of approximately
47,877 square feet of leasable area.

Whereas, Landlord and Tenant wish to modify the referenced Lease effective
immediately. The parties, therefore, agree as follows:

          Lease Rider "B" shall be amended to reflect the correct Tenant's name
          as PUBLISHER DISTRIBUTION SERVICES, INC., A NEVADA CORPORATION.

Except as herein expressly changed and amended, all of the other terms and
considerations of the Lease Agreement shall remain in full force and effect as
originally set forth therein.

DATED AS OF THIS    DAY OF OCTOBER, 1998.

LANDLORD: REGAL BUSINESS CENTER, INC.        TENANT: PUBLISHER
                                             DISTRIBUTION SERVICES INC., A
                                             NEVADA CORPORATION.

By:                                          By:   /s/ Dave Buescher
   ---------------------------                  --------------------------
       Barry Kotler                                Dave Buescher
       President

By:
   ---------------------------
       David Nisker
       Vice President

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                                 LEASE AGREEMENT

ARTICLE ONE: BASIC TERMS

        1.01   Date of Leases:        September 1, 1998

        1.02   Landlord:              Regal Business Center, Inc.
               Address of Landlord:   c/o CB Richard Ellis, Inc.
                                      5400 LBJ Freeway, Suite 1100, Dallas,
                                      Texas 75240

        1.03   Tenant:                Publisher Distribution Services, Inc., A
               Address of Tenant:     Nevada Corporation
                                      4653 Leston Ave.
                                      Suite 706
                                      Dallas, Texas 75247

        1.04   Property:              (Include street address, as well as legal
                                      description and approximate square
                                      footage). Approximately 47,877 square feet
                                      of office/warehouse space located at 4653
                                      Leston Ave., Suite 706, Dallas, Texas
                                      75247 in Regal Business Center. A legal
                                      description is attached hereto, see Lease
                                      Rider "A".

        1.05   Lease Term:            Thirty seven (37) months beginning on
                                      October 1, 1998 and ending on October 31,
                                      2001.

        1.06   Rent:                  $160,388.04 (per year)
               Dollars:               $13,365,67 (per month) (INCLUDES BASE YEAR
                                      OPERATING EXPENSES OF $0.85/SF)
               Operating Expenses:    $0.85 per square foot (for the Property)

        1.07   Security Deposit:      $13,366.00

        1.08   Permitted Use (see Sec. 6.01): Warehousing and distribution of
               periodicals and related uses

        1.09   Principal AGENT:       CB Richard Ellis, Inc.
                                      5400 LBJ Freeway, Suite 1100
                                      Dallas, Texas 75240
                                      Attn: David Esserling

        1.10   Cooperating AGENT:     CB Richard Ellis, Inc.
                                      5400 LBJ Freeway, Suite 1100
                                      Dallas, Texas 75240
                                      Attn: Steve Berger

        1.11   AGENT'S COMMISSIONS (See Article Fourteen):
               A.       Commissions due to the undersigned Principal AGENT and
                        to the Cooperating AGENT, if any, shall be calculated
                        and paid in accordance with Section 14.01 below.

        1.12   Base Year for Taxes (see Section 4.02): 1997
               NOTE: Base Year taxes will be included in the amount defined in
               Paragraph 1.06 of this Lease Agreement and will be calculated in
               the same manner.

        1.13   Party to Receive Payment
               from Tenant Hereunder:           Regal Business Center, Inc.

        1.14   Daily Late Charge (see Section 3.03): Fifty dollars ($50) per day
               after the fifth (5th) day AFTER WRITTEN NOTICE OF DELINQUENCY, SO
               LONG AS SUCH NOTICE IS NOT REQUIRED MORE THAN TWO(2) TIMES IN A
               CALENDAR YEAR.

        1.15   Acceptance (see Section 15.13):  The number of days for
               acceptance shall be ten (10) days.

ARTICLE TWO: LEASE AND LEASE TERM

        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 stated in
Section 1.05. As used herein, the "Commencement Date" shall be the date
specified in Section 1.05 for the beginning of the Lease Term, unless advanced
or delayed by any provision of this Lease.

        2.02   DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant if
Landlord does not deliver possession of the Property to Tenant on the first date
specified in Section 1.05 above. Landlord's non-delivery of the Property to
Tenant on the date shall not affect this Lease or the obligations of Tenant
under this Lease. However the Commencement Date shall be delayed until
possession of the Property is delivered to Tenant. The Lease Term shall be
extended for a period equal to the delay in delivery of possessions of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of the month. If Landlord does not deliver possession of the
Property to Tenant within THIRTY (30) days after the first date specified in
Section 1.05 above, Tenant may elect to cancel the Lease by giving written
notice to Landlord within ten (10) days after the THIRTY (30) day period ends.
If Tenant gives such notice, the Lease shall be canceled effective as of the
date of its execution, and no party hereto shall have any obligations, one to
the other. If Tenant does not give such notice, Tenant's right to cancel the
Lease shall expire and the Lease Term shall commence upon the delivery of
possession of the Property to Tenant. If delivery of possession of the Property
to Tenant is delayed, Landlord and Tenant shall, upon delivery, execute an
amendment to this Lease setting forth the Commencement Date and expiration date
of the Lease.

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        2.03   EARLY OCCUPANCY. If Tenant occupies the Property prior to the
Commencement Date, Tenant's occupancy of the Property shall be subject to all
the provisions of this Lease. Early occupancy of the Property shall not advance
the expiration date of this Lease. Tenant shall pay Base Rent and all other
charges specified in the Lease for the occupancy period except that the Tenant
shall be permitted access to the Property prior to the Commencement Date to
install phone and data systems, and during the final fifteen (15) days prior to
the Commencement Date shall be permitted to move furniture, equipment and
inventory in without advancing the date on which Rent becomes due.

         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 incurred by Landlord from any
delay by Tenant in vacating the Property. If Tenant does not vacate the Property
upon termination of the Lease. 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 fifty percent (50%). Nothing contained in this Section 2.04 shall
be construed as Landlord's consent for Tenant to hold over.

ARTICLE THREE: RENT AND SECURITY DEPOSIT

        3.01   MANNER OF PAYMENT. All sums to become due hereunder by Tenant
shall be made to the party named in Section 1.13 above, at the address stated
herein for such party, unless such address is changed as provided herein. Any
and all payments made to the Principal AGENT for the account of Landlord shall
be deemed made to Landlord when received by the Principal AGENT. All sums
payable by Tenant hereunder, whether or not expressly denominated as rent,
shall constitute rent for the purpose of Section 5.02 (b)(6) of the Bankruptcy
Code, as the same may be redesigned or amended form time to time.

        3.02   TIME OF PAYMENT. Upon execution hereof, Tenant shall pay the
rent for the first month of the Lease Term. On or before the first day of the
second month of the Lease Term and of each month thereafter, a like monthly
installment shall be due and payable, in advance, without off-set, deduction or
prior demand. If the Lease Term commences or ends during a calendar month, the
rent for any fractional calendar month following the Commencement Date or
preceding the end of the Lease Term shall be prorated.

        3.03   LATE CHARGES. Tenant's failure to pay sums due hereunder
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, deed of trust or
mortgage encumbering the Property. Therefore if any sum due hereunder is not
received on its due date. Tenant shall pay the party named in Section 1.13
above a late charge equal to the sum stated in Section 1.14 above for each day
from its due date until such delinquent sum is received. If any check tendered
in payment of any sum due from its due date until such delinquent sum is retuned
for any reason. Tenant shall pay a late charge for each day from said due until
such check is made good. 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 or such returned check.

        3.04   SECURITY DEPOSIT. Upon execution hereof, Tenant shall deposit
with the party named in Section 1.13 above a cash Security Deposit in the sum
stated in Section 1.07. 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 default
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 the 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. Upon any termination of this Lease not resulting from Tenant's default,
and after Tenant has vacated the Property in the manner required by this Lease.
Landlord shall refund the unused portion of the Security Deposit to Tenant,
within 30 days of lease termination.

        3.05   ADDITIONAL RENT. The rent payable under Section 1.06 above is
determined, in part, on Landlord's estimate of operating expense (as defined in
the subsection 3.05(d) below) during the calendar year in which the lease
commences. Tenant agrees to pay additional rent in accordance with Section 3.01
and the following provisions.

                      (a)    In the event that operating expenses for a calendar
        year during the Lease Term exceed $0.85 per square foot of the Property
        as set forth in Section 1.06 above. Landlord shall give Tenant written
        notification thereof, and within thirty (30) days after receipt of such
        notice Tenant shall pay to Landlord as additional rent, such excess
        determined by multiplying such excess by the square feet of the Property
        (the "additional rent"). For the purpose of this Lease in regard to
        Additional Rent for the Property, Suite 706 represents 12.50% of the
        380,109 square feet that are stipulated in the office/warehouse category
        of operating expenses at Regal Business Center. Upon written request
        during such thirty-day period Tenant may, at its own expense, audit
        Landlord's books and records relevant to the additional rent due under
        this subsection 3.05 (a). Tenant shall provide to Landlord a copy of any
        such audit. Tenant may object to the additional rent by notifying
        Landlord in writing during such thirty-day period; however if Tenant
        does not object to the additional rent charged hereunder within thirty
        (30) days. Tenant shall be deemed to have agreed to such additional
        rent. Tenant shall timely pay the additional rent notwithstanding
        Tenant's objection thereto and/or any audit by Tenant of Landlord's
        books and records. If any audit by Tenant discloses that Tenant's
        payment, hereunder exceeds the actual amount of such additional rent,
        Landlord shall reimburse the difference between the actual amount of
        Tenant's payment and the amount that Tenant is obligated to pay under
        this subsection 3.05(a); provided, however, if any such audit discloses
        that Tenant's payment hereunder is less than the actual amount of
        additional rent due under this subsection 3.05(a), Tenant shall
        immediately pay to Landlord such shortfall.

                      (b)    Effective January 1 in any year following a year of
        the Lease Term in which there is additional rent, the rent per year set
        out in Section 1.06 shall be increased by an amount equal to the
        additional rent payable during the immediately preceding year; provided,
        however, the terms of subsection 3.05(a) shall continue in full force
        and effect notwithstanding the increase in the rent under this
        subsection 3.05(b). On or before April 30 of every calendar year during
        the Lease Term (other than the year in which the lease commences)
        Landlord shall deliver to Tenant a statement including (i) the previous
        calendar year's operating expenses for the Property and (ii) the
        additional rent due or the amount of additional rent previously paid by
        Tenant but due for reimbursement to Tenant, if any, pursuant to
        subsection 3.05(a). Notwithstanding anything to the contrary contained
        in this subsection 3.05(b), the rent shall never be less than the rent
        set forth in Section 1.06.

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                      (c)    Notwithstanding any expiration or earlier
        termination of this Lease, Tenant shall pay additional rent, if any,
        under this Lease for all days through and including the date of such
        expiration or termination. Upon expiration of the Lease or in the event
        of any earlier termination, Landlord may estimate the amount of any
        unpaid additional rent due from Tenant for the remaining term of the
        Lease and present such estimate to Tenant within thirty (30) days prior
        to the expiration or termination of the Lease Term. Tenant shall pay
        such amount to Landlord upon demand, subject to adjustment as set forth
        in subsection 3.05(b) above. Tenant's obligation to pay additional rent
        under this Lease and Landlord's and Tenant's obligation to make the
        adjustment required under subsection 3.05(b) above shall survive any
        expiration or termination of this Lease.

                      (d)    The term "operating expense" includes all costs and
        expenses of owning, operating, maintaining, and managing the Property,
        including, without limitation, maintenance and repair costs, Landlord's
        utility costs, security, janitorial services, trash and snow removal,
        landscaping and pest control, services, supplies, replacements, and all
        other expenses for maintaining and operating the Property, (including
        the common area and parking areas. The term "operating expenses" also
        includes all real estate taxes and special assessments and landlord's
        casualty and liability insurance premiums and rental interruption
        insurance.

                      (e)    The term "real estate taxes" include any tax,
        general or special assessment, or levy or charge of any kind whatsoever
        imposed by any governmental entity on the interest of the Landlord in
        the Property or the right to receive rent or other income from the
        Property, whether measured by the value of the real property and
        improvements or otherwise. Real estate taxes shall not include, however,
        Landlord's federal or state net income tax, franchise tax, or estate,
        gift or inheritance tax.

 ARTICLE FOUR: TAXES

        4.01   PAYMENT BY LANDLORD. Landlord shall pay the real estate taxes on
the Property during the Lease Term.

        4.02   IMPROVEMENTS BY TENANT. In the event the real estate taxes
levied against the Property for the real estate tax year in which the Lease term
commences are increased as a result of any alterations, additions or
improvements made by Tenant or by Landlord at the request of Tenant, Tenant
shall pay to Landlord upon demand the amount of such increase. For the purposes
of the calculations under Section 3.05 of this Lease, the amount of the real
estate taxes during the real estate tax year in which the Lease Term commences
shall not include any taxes resulting from any such alterations, additions or
improvements made in or to the Property. Landlord shall obtain from the tax
assessor or assessors a written statement of the total amount of such
increase.

        4.03   JOINT ASSESSMENT. If the real estate taxes are assessed against
the Property jointly with other property not constituting a part of the
Property, the real estate taxes for such year, shall be equal to the amount
bearing the same proportion to the aggregate assessment that the total square
feet of building area in the Property bears to the total square feet of building
area included in the joint assessment.

        4.04   PERSONAL PROPERTY TAXES. Tenant shall pay all taxes charged
against trade fixtures, furnishings, equipment or any other personal property
belonging to Tenant. Tenant shall try to have its personal property taxes
separately from the Property, but if any of Tenant's personal property is taxes
with the Property, Tenant shall pay the taxes for the personal property within
fifteen (15) days after Tenant receives a written statement for such personal
property taxes.

ARTICLE FIVE: INSURANCE AND INDEMNITY

        5.01   CASUALTY INSURANCE. During the Lease Term, Landlord shall
maintain policies of insurance covering loss or damage to the Property in such
amount or percentage of replacement value as Landlord or its insurance advisor
deems reasonable in relation to the age, location, type of construction and
physical condition of the Property and the availability of such insurance at
reasonable rates. Such policies shall provide protection against all perils
included within the classification of fire and extended coverage any other
perils which Landlord deems necessary. Landlord may obtain insurance coverage
for Tenant's fixtures, equipment or building improvements installed by
Tenant in or on the Property. Tenant shall, at Tenant's expense, maintain such
primary or additional insurance on its fixtures, equipment and building
improvements as Tenant deems necessary to protect its interest. Tenant shall not
do or permit to be done anything which invalidates any such insurance policies.
Any casualty insurance which may be carried by Landlord or Tenant shall be for
the sole benefit of the party carrying such insurance and under its sole
control.

        5.02   INCREASE IN PREMIUMS. Tenant shall not permit any operation or
activity to be conducted or storage or use or any volatile or any other
materials on the Property that would cause suspension or cancellation of any
fire and extended coverage insurance policy carried by Landlord, or increase the
premiums therefore, without the prior written consent of Landlord. If Tenant's
use and occupancy, OR ABANDONMENT of the Property causes an increase in the
premiums for any fire and extended coverage insurance policy carried by Landlord
on the day before tenant shall have first gone into possession of the Property
under the Lease, Tenant shall pay, as additional rent, the amount of such
increase to Landlord upon demand and presentation of written evidence of the
increase by Landlord.

        5.03   LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain
a policy  of comprehensive public liability insurance, at Tenant's expense,
insuring Landlord against liability arising out of the ownership, use, occupancy
or maintenance of the Property. The initial amount of such insurance shall be at
lease $1,000,000.00 and shall be subject to periodic increase based upon
inflation, increased liability awards, recommendations of professional insurance
advisors, and other relevant factors. However, the amount of such insurance
shall not limit Tenant's liability nor relieve Tenant of any obligation
hereunder. The policy shall contain cross-liability endorsements, if applicable,
and shall insure Tenant's performance of the indemnity provisions of Section
5.04. Such policy shall contain a provision which prohibits cancellation or
modification of the policy except upon thirty (30) days prior written notice to
Landlord. Tenant may discharge its obligations under this Section by naming
Landlord as an additional insured under a policy of comprehensive liability
insurance maintained by Tenant and containing the coverage and provisions
described in this Section. Tenant shall deliver a copy of such policy or
certificate (or a renewal thereof) to Landlord prior to the Commencement Date
and prior to the expiration of any such policy during the Lease Term. If Tenant
fails to maintain such policy, Landlord may elect to maintain such insurance at
Tenant's expense. Tenant shall, at Tenant's expense, maintain such other
liability insurance as Tenant deems necessary to protect Tenant.

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        5.04   INDEMNITY. Landlord shall not be liable to Tenant or to Tenant's
employees, agents or visitors, or to any other person whomsoever, for any injury
to persons or damage to property on or about the Property or any adjacent area
owned by Landlord caused by the negligence or misconduct of Tenant, it
employees, subtenants, licenses or concessionaires or any other person entering
the Property under express or implied invitation of Tenant, or arising out of
the use of the property by Tenant and the conduct of its business therein, or
arising out of any breach or default by Tenant in the performance of its
obligations hereunder; and the Tenant hereby agrees to indemnify Landlord and
hold it harmless from any misconduct of Tenant, or its employees or agents.

        5.05   WAIVER OF SUBROGATION. Each party hereto waives any and every
claim which arises or may arises in its favor against the other party hereto
during the term of this Lease or any renewal or extension thereof for any and
all loss of, or damage to, any of its property located within or upon, or
constituting a part of, the Property, which loss or damage is covered by valid
and collectible fire and extended coverage insurance policies, to the extent
that such loss or damage is recoverable under such insurance policies. Such
mutual waivers shall be in addition to, and not in limitation or derogation of,
any other waiver or release contained in the Lease with respect to any loss of,
or damage to property of the parties hereto. Inasmuch as such mutual waivers
will preclude the assignment of any aforesaid claim by way of subrogation or
otherwise to an insurance company (any other person), each party hereby agrees
immediately to give to each insurance company which has issued to it policies of
fire and extended coverage insurance, written notice of the term of such mutual
waivers, and to cause such insurance policies to be properly endorsed, if
necessary, to prevent the invalidation of such insurance coverages by reason of
such waivers.

 ARTICLE SIX: USE OF PROPERTY

        6.01   PERMITTED USE. Tenant may use the Property only for the permitted
use stated in Section 1.08.

        6.02   COMPLIANCE WITH LAW. Tenant shall comply with all governmental
 laws, ordinances and regulations applicable to the use of the Property, and
 shall promptly comply with governmental orders and directives for the
 correction, prevention and abatement of nuisances in or upon, or connected with
 the Property, all at Tenant's sole expense.

        6.03   CERTIFICATE OF OCCUPANCY. Tenant shall obtain all licenses,
permits, certificates of occupancy, or other approvals or consents required by
any federal, state, or local governmental authority and pertaining to Tenant's
use or occupancy of the Property or the conduct of its business therein,
provided, however this Lease shall not be contingent upon issuance thereof.
Nothing contained in this Section 6.03 shall obligate Landlord to make any
alterations, or improvements to the Property, unless expressly agreed upon by
Landlord in writing.

        6.04   SIGNS. Without the prior written consent of Landlord which shall
not be unreasonably withheld, Tenant shall not place or affix any signs or other
objects upon or to the Property, including but not limited to the roof or
exterior walls of the building or the improvements thereon, or paint or
otherwise deface said exterior walls. Any signs installed by Tenant shall
conform with all applicable federal, state, and local laws, roles, and
ordinances and with all deed and other restrictions, if any. Landlord may from
time to time, in its sole discretion, maintain sign criteria governing the
property, and Tenant hereby covenants to comply with said criteria. Upon
Landlord's request, Tenant shall remove all signs at the expiration or earlier
termination of this Lease and shall repair any damage and close any holes caused
or revealed by such removal, thereby restoring the Property as near as possible
to its original condition, ordinary wear and tear excepted. In the event Tenant
fails to remove any sign either upon expiration or termination of this Lease or
upon the failure of the sign to comply with any law, regulation or ordinance,
Landlord may remove such sign at Tenant's sole expense without any liability to
Tenant, and Tenant shall indemnify and hold Landlord harmless from and against
any and all liabilities, claims, damages, losses, costs and expenses, including,
without limitation, attorneys' fees incurred by Landlord and arising out of or
related to Tenant's failure to remove any sign.

        6.05   UTILITY SERVICES. Tenant shall pay the cost of utility  services,
including but not limited to initial connection charges, all charges for gas,
water, telephone, and electricity used on the Property, and for all electric
lights, lamps, and tubes.

        6.06   LANDLORD'S ACCESS. Landlord and its authorized agents shall have
the right, during normal business hours, to enter the Property (a) to inspect
the general condition and state of repair thereof, (b) to make repairs required
or permitted under this Lease, (c) to show the property to any prospective
tenant or purchaser or (d) for any other reasonable purpose. During the final
120 days of the lease Term, Landlord and its authorized agents shall have the
right to erect and maintain on or about the Property customary signs advertising
the Property for lease or for sale.

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

        6.08   EXEMPTIONS FOR 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 properly 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 condition or lighting
fixtures or any other cause; (c) conditions arising on or about the Property or
upon other portions of any building of which the Property is a part, or from
other sources or places; or (d) any act or omission of any other tenant of any
building of which the Property is a part. 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
6.08 shall not, however, exempt Landlord from liability for Landlord's gross
negligence or willful misconduct.

ARTICLE SEVEN: MAINTENANCE, REPAIRS, AND ALTERATIONS

        7.01   ACCEPTANCE OF PREMISES. Subject to the completion of Landlord's
work, Tenant acknowledges that it has fully inspected the Property and accepts
the Property in its condition as of the execution of this Lease subject to Lease
Rider "B" as suitable for the purposes for which it is leased. Tenant
acknowledges and agrees that Landlord has made no representation or warranty,
express or implied, as to the habitability, merchantability, suitability,
quality, condition, or fitness for any particular purpose with regard to the
Property or the property of which the Property is a part. Tenant hereby waives,
to the extent permitted by law, any defects in the Property and the property of
which the Property is a part and any claim or cause of action based upon any
warranties, express or implied, as to habitability, merchantability,
suitability, quality, condition, or fitness for any particular purpose with
regard to the Property. Tenant's taking possession of the Property shall be
conclusive evidence that (a) Tenant has inspected (or caused to inspected) the
Property and the property of which the Property is a part (b) tenant accepts the
Property and the property of which the Property is part in their present
condition subject to Lease Rider  "B", (c) tenant accepts the property and the
property of which the Property is a part as being in good satisfactory condition
and suitable for tenant's purpose, and (d) the Property and

<PAGE>
property of which the property is a part fully comply with Landlord's covenants
and obligations hereunder.

        7.02   LANDLORD'S OBLIGATION TO REPAIR. Subject to the provisions of
Article Eight (Damage or Destruction), Article Nine (Condemnation), and Section
7.03 below pertaining to Tenant's liability for certain costs and expenses,
Landlord shall keep the foundation, roof, and the structural portions of
exterior walls of the improvements of the Property in good order, condition,
and repair. However, Landlord shall not be obligated to maintain or repair
windows, doors, plate glass or the surfaces of walls. In addition, Landlord
shall not be obligated to make any repairs under this Section until a reasonable
time after receipt of written notice from Tenant of the need of such repairs. If
any repairs are required to be made by Landlord, Tenant shall, at Landlord's
sole cost and expense, promptly remove Tenant's fixtures inventory, equipment
and other property, to the extent required to enable Landlord to make such
repairs. Landlord's liability hereunder shall be limited to the cost of such
repairs or corrections.

        7.03   TENANT'S OBLIGATION TO REPAIR. Subject to the provisions of
Sections 7.01 and 7.02 above, Article Eight (Damage or Destruction), and Article
Nine (Condemnation), Tenant shall, at all times, keep that portion of the
Property not required to be maintained by Landlord in good order, condition,
repair, including but not limited to repairs (including all necessary
replacements) of the windows, plate glass, doors, heating system,
air-conditioning equipment, fire protection sprinkler system, interior and
exterior plumbing and the interior of the Property in general, and including
care of landscaping and regular mowing of grass end maintenance of any paving
and railroad siding; provided, however, Tenant shall submit plans and
specifications to Landlord for all maintenance and repairs required by this
Section 7.03 for Landlord's approval prior to performing such work. At
Landlord's request Tenant shall provide to Landlord copies of invoices marked
paid or releases and lien waivers from all contractors performing all or any
part of such work. All warranties or guarantees for any work performed or any
property installed or affixed to the property as a replacement of any existing
property pursuant to this Section 7.03 shall be for the benefit and use of both
Tenant and Landlord, and Tenant shall promptly provide Landlord with copies of
all written warranties and guarantees. Notwithstanding anything to the contrary
contained in Section 7.02 above, Tenant shall be liable for all costs and
expenses of Landlord repairing any damage to the roof, foundation, or structural
portions of exterior walls caused by the acts or omissions of Tenant or Tenants'
contractors. If Tenant fails to maintain and repair the Property as required by
this Section, Landlord may, on ten (10) days' prior written notice, enter the
Property and perform such maintenance or repair on behalf of Tenant, except that
no notice shall be required in case of emergency, and Tenant shall reimburse
Landlord for all costs incurred in performing such maintenance or repair
immediately upon demand. All building systems and equipment for which the Tenant
shall have the obligation to keep in good working order shall be delivered to
the Tenant in good working order as of the first day of the Lease Term.
Notwithstanding anything herein to the contrary, with respect to the existing
heating system and air-conditioning equipment, the Tenant's obligation to keep
the heating system and the air-conditioning equipment in good working order
shall require the tenant to pay only the first $500.00 (herein after referred to
as the "Annual Maximum Amount") of the maintenance, repair or replacement cost
of each individual unit, in a calendar year during the Lease Term; it shall be
the sole cost and obligation of the Landlord if the actual cost in any calendar
year to repair or replace the heating system and air-conditioning equipment
exceeds the Annual Maximum Amount.

        7.04   ALTERATIONS, ADDITIONS AND IMPROVEMENTS. Tenant shall not create
any openings in the roof or exterior walls, or make any alterations, additions
or improvements to the Property without the prior written consent of Landlord.
Consent for nonstructural alterations, additions or improvements shall not be
unreasonably withheld by Landlord. Tenant shall have the right to erect or
install shelves, bins, machinery, air conditioning or heating equipment and
trade fixtures, provided the Tenant complies with all applicable governmental
laws, ordinances and regulations. At the expiration or termination of the Lease,
Tenant shall, subject to the restrictions of Section 7.05 below, have the right
to remove such items so installed by it, provided Tenant is not in default at
the time of such removal and provided further that Tenant shall, at the time of
removal of such items, repair in a good and workmanlike manner any damage caused
in installation or removal thereof. Tenant shall pay for all costs incurred or
arising out of alterations, additions or improvements in or to the Property and
shall not permit a mechanic's or materialman's lien to be asserted against the
Property. Upon request by Landlord, Tenant shall deliver to Landlord proof of
payment reasonable satisfactory to Landlord of all costs incurred or arising out
of any such alternations, additions or improvements.

        7.05   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 the lease. However, Tenant
shall not be obligated to repair any damage which Landlord is required to repair
under Article Eight (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 termination 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 termination of the Lease. In no event, however, shall Tenant remove any
of the following materials or equipment 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 EIGHT: DAMAGE OR DESTRUCTION

        8.01   NOTICE. If the building or other improvements situated on the
Property  should be damaged or destroyed by fire, tornado or other casualty,
Tenant shall immediately give written notice thereof to Landlord.

        8.02   PARTIAL DAMAGE. If the building or other improvements situated on
the Property should be damaged by fire, tornado or the casualty but not such an
extent that rebuilding or repairs cannot reasonably be completed within 90 days
from the date Landlord receives written notification by Tenant of the happening
of the damage, this Lease shall not terminate, but Landlord shall, at its sole
cost and risk, proceed forthwith and use reasonable diligence to rebuild or
repair such building and other improvements on the Property (other than
leasehold improvements made by Tenant or any assignee, subtenant or other
occupant of the Property) to substantially the condition in which they existed
prior to such damage. If Tenant does not elect to exercise its renewal option
or if there is no renewal option contained herein or previously unexercised at
such time, this Lease shall terminate at the option of Landlord and rent shall
be abated for the unexpired portion of this Lease, effective from the date of
actual receipt by Landlord of the written notification of the damage. If the
building and other improvements are to be rebuilt or repair and area
untenantable in whole or in part following such damage, the rent payable
hereunder during the period in which they are untenantable shall be adjusted
equitably.
<PAGE>
         8.03 Substantial or Total Destruction. If the building or other
improvements situated on the Property should be substantially or totally
destroyed by fire, tornado or other casualty, or so damaged that rebuilding or
repairs cannot reasonably be completed within 90 days from the date Landlord
receives written notification by Tenant of the happening of the damage, and such
damage is not caused by tenant, its employees, customers, or any other person
associated with tenant, this Lease shall terminate and rent shall be abated for
the unexpired portion of this Lease, effective from the date of receipt by
Landlord of such written notification.

         8.04 Insurance Proceeds. Notwithstanding anything to the contrary
contained herein, in the event of any partial, substantial, a total damage or
destruction to the Property, Landlord shall not be in default hereunder and this
Lease shall not terminate, but rent shall be abated hereunder as provided in
Section 8.02, if any mortgages, holder of a deed of trust, or other liabilities
affecting all or any part of the Property withholds funds, causes any insurance
carrier to withhold payment of insurance proceeds, or otherwise prevents payment
to Landlord of funds from any other source for the rebuilding or repair of the
Property.

ARTICLE NINE: CONDEMNATION

         If, during the term of this Lease or any extension or renewal thereof,
all or a substantial part of the Property should be taken for any public or
quasi-public use under any governmental law, ordinance or regulation of by right
of eminent domain, or should be sold to the condemning authority under threat of
condemnation, this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective from the date of taking of the
Property by the condemning authority. If less then a substantial part of the
demised premises is taken for public or quasi-public use under any governmental
law, ordinance or regulation, or by right of eminent domain, or is sold to the
condemning authority under threat of condemnation, Landlord, at its option, may
by written notice terminate this Lease or shall forthwith at its sole expense
restore and reconstruct the buildings and improvements (other than leasehold
improvements made by Tenant or any assignee, subtenant or other occupant of the
Property) situated on the Property in order to make the same reasonably
tenantable and suitable for the use for which the Property is leased as defined
in Section 6.01. The rent payable hereunder during the unexpired portion of this
Lease shall be adjusted equitably. Landlord and Tenant shall each be entitled to
receive and retain such separate awards and portions of lump sum awards as may
be allocated to their respective interests in any condemnation proceedings. The
termination of this Lease shall not affect the rights of the respective parties
to such awards. Tenant shall not make any claim for and Landlord shall be
entitled to all awards for the value of the terminated leasehold estate in
connection with this Lease.

ARTICLE TEN: ASSIGNMENT AND SUBLETTING

         Tenant shall not, without the prior written consent of Landlord which
shall not be unreasonably withheld, assign this Lease, or sublet the Property or
any portion thereof. Any assignment or subletting shall be expressly subject to
all terms and provisions of this Lease, including the provision of Section 6.01
pertaining to the use of the Property. In the event of any assignment or
subletting, Tenant shall remain fully liable for the full performance of all
Tenant's obligations under this Lease. Tenant shall not assign its rights
hereunder or sublet the Property without first obtaining a written agreement
from the assignee or sublessee whereby the assignee or sublessee agrees to be
bound to the term of this Lease. No such assignment or subletting shall
constitute a novation. In the event of the occurrence of an event of default
while the Property is assigned or sublet, Landlord. In addition to any other
remedies provided herein or by law, may, at Landlord's option, collect directly
from such assignee or subtenant all rents becoming due under such assignment or
subletting shall release end apply such rent against any sums due to Landlord
hereunder. No direct collection by Landlord from any such assignee or subtenant
shall release Tenant from the performance of its obligations hereunder. Any
transfer of all or any part of the Tenant's interest in the Lease or the
Tenant's leasehold estate hereunder by agreement operation of law, or otherwise
shall be deemed an assignment or subletting. The grant by Tenant of a security
interest or other encumbrance upon Tenant's interest in the Lease or the
Tenant's leasehold estate hereunder by agreement, operation of law, or otherwise
shall be deemed an assignment or subletting. If Tenant is a corporation,
partnership, business association, or other entity, the sale, agreement, or
transfer, by agreement, operation of law, or otherwise, (i) of fifty percent
(50%) or more of the corporate stock, partnership interests, or other interest
comprising Tenant by a party or parties owning such stock or interest as of the
date of this Lease or (ii) of direct or indirect control of Tenant, shall be
deemed an assignment or subletting.

ARTICLE ELEVEN: DEFAULT AND REMEDIES

         11.01 Default. The following events shall be deemed to be events of
default under this Lease.

                  (a) Failure of Tenant to pay any installment of the rent or
         other sum payable to Landlord hereunder on the date that same is due
         and such failure shall continue for a period of ten (10) days of
         written notice so long as such notice shall not be required more than
         two times in any calendar year.

                  (b) Failure of Tenant to comply with any term, condition or
         covenant of this Lease, other than the payment of rent or other sum of
         money, and such failure shall not be cured within thirty (30) days
         after written notice thereof to Tenant;

                  (c) Tenant or any guarantor of Tenant's obligations hereunder
         shall generally not pay its debts as they become due or shall admit in
         writing is inability to pay its debts, or shall make a general
         assignment for the benefit of creditors;

                  (d) Tenant or any guarantor of Tenant's obligations hereunder
         shall commence any case, proceeding or other action seeking
         reorganization, arrangement, adjustment, liquidation, dissolution or
         composition of it or its debt under any law relating to bankruptcy,
         insolvency, reorganization or relief of debtors, or seeking appointment
         of a receiver, trustee, custodian or other similar official for it or
         for all or any substantial part of its property;

                  (e) Any case, proceeding or other action against Tenant or any
         guarantor of Tenant's obligations hereunder shall be commenced seeking
         to have an order for relief entered against it as debtor, or seeking
         reorganization, arrangement, adjustment, liquidation, dissolution or
         composition of it or its debts under any law relating to bankruptcy,
         insolvency, reorganization or relief of debtors, or seeking appointment
         of a receiver, trustee, custodian or other similar official for it or
         for all or any substantial part of its property, and Tenant (i) fails
         to obtain a dismissal of such case, proceeding, or other action within
         sixty (60) days of its commencement or (ii) converts the case from one
         chapter of the Federal Bankruptcy Code to another chapter or (iii) is
         the subject of an Order of Relief which is not fully stayed within
         seven (7) business days after the entry thereof.

<PAGE>
                  11.02 Remedies. Upon the occurrence of any of the events of
         default listed in Section 11.01. Landlord shall have the option to
         pursue any one or more of the following remedies without any notice or
         demand whatsoever;

                  (a) Terminate this Lease, in which event Tenant shall
         immediately surrender the Property to Landlord. If Tenant fails to so
         surrender such premises, Landlord may, without prejudice to any other
         remedy which it may have for possession of the Property or arrearages
         in rent, enter upon and take possession of the Property and expel or
         remove Tenant and any other person who may be occupying such premises
         or any part thereof, by force if necessary, without being liable for
         prosecution or any claim for damages therefor. Tenant shall pay to
         Landlord on demand the amount of all loss and damage which Landlord may
         suffer by reason of such termination, whether through inability to
         re-let the property on satisfactory terms or otherwise.

                  (b) Enter upon and take possession of the Property, without
         terminating this Lease and without being liable for prosecution or for
         any claim for damage therefor, and expel or remove Tenant and any other
         person who may be occupying such premises or any part thereof, Landlord
         may re-let the Property and receive the rent therefor. Tenant agrees to
         pay Landlord monthly or on demand from time to time any deficiency that
         may arise by reason of any such reletting. Tenant shall pay to Landlord
         upon demand all costs and expenses incurred by Landlord in connection
         with such re-letting, including, without limitation, brokerage
         commissions, attorneys' fees, remodeling expenses, and free rent and
         other concessions to the new tenant, or at Landlord's option, in
         determining the amount of the deficiency arising by reason of any
         re-letting, Landlord may subtract such costs and expenses from the
         amount of rent received under such re-letting.

                  (c) Enter upon the Property, without terminating this Lease
         and without being liable for prosecution or for any claim for damage
         therefor, and do whatever Tenant is obligated to do under the term of
         this Lease. Tenant agrees to pay Landlord on demand for expense which
         Landlord may incur in this effecting compliance with Tenant's
         obligations under this Lease, together with interest thereon at the
         rate of twelve percent (12%) per annum from the date expended until
         paid. Landlord shall not be liable for any damages resulting to Tenant
         from such action, whether caused by negligence of Landlord or
         otherwise.

                  (d) Alter all locks and security devises at the Property
         without obligation to provide a new key to Tenant if Landlord has
         elected either to terminate this Lease under subsection 11.O2(a) above
         or permanently repossess the Property under (b) above. If Landlord
         alters all locks and security devices at the Property without electing
         either to terminate this Lease or permanently repossess the Property,
         then Landlord shall provide a new key to Tenant only during the regular
         business hours of Landlord's property manager and only upon (i)
         Tenant's payment of all rent and additional rent and performance of all
         obligations necessary to cure its default under the Lease and (ii)
         Tenant's reasonable assurances to Landlord of Tenant's ability to
         perform its remaining obligations under this Lease. In the event
         Landlord alters the locks and does not provide a new key to Tenant
         accompanied by such releases and waivers as Landlord may require,
         Landlord, at its option, may (i) escort Tenant to the Property to
         retrieve personal belongings and other property not subject to
         Landlord's lien and security interest or (ii) obtain from Tenant a list
         of personal belongings and personal property and advise Tenant of a
         time and place where such items will be made available to Tenant. If
         Landlord elects the latter option, then Tenant shall reimburse to
         Landlord the cost of moving and/or storing the items prior to
         Landlord's making same available.

         No re-entry or taking possession of the Property by Landlord shall be
         construed as an election on its part to terminate this Lease, unless a
         written notice of such intention shall be given to Tenant.
         Notwithstanding any such re-letting or re-entry or taking possession,
         Landlord may at any time thereafter elect to terminate this Lease for a
         previous default. Landlord shall not have any obligation to re-let the
         Property. Pursuit of any of the foregoing remedies shall not prelude
         pursuit of any of the other remedies herein provided or any other
         remedies provided by law, nor shall pursuit of any remedy herein
         provided constitute a forfeiture or waiver of any rent or additional
         rent due Landlord hereunder or of any damages accruing to Landlord by
         reasons of the violation of any terms, conditions, and covenants herein
         contained.

         If Landlord re-enters and takes possession of the Property, Landlord
         shall also have the right to remove from the Property (without the
         necessity of obtaining a distress warrant, writ of sequestration, or
         other legal process) all or any portion of the furniture, fixtures,
         equipment and other personal property located on the Property and place
         such property in storage, and Tenant shall be liable to Landlord for
         all Landlord's costs and expenses incurred in removing and storing such
         property and shall promptly pay such amounts to Landlord upon demand.
         Tenant shall indemnify and hold Landlord harmless from all liabilities,
         claims, damages, losses, costs, and expenses incurred by Landlord in
         connection with removing and storing such property. Landlord shall also
         have the right to relinquish possession of such property to any person
         claiming to be entitled to possession thereof who presents any
         instrument (or copy of any instrument) purportedly granting such person
         the right to take possession of such property, without the necessity of
         Landlord's inquiring into the authenticity of the instrument (or copy
         thereof) and without the necessity of Landlord's making any
         investigation or inquiry as to the validity of the factual or legal
         basis upon which such person purports to act; and Tenant agrees to
         indemnify and hold Landlord harmless from all liabilities, claims,
         damages, losses, costs, and expenses incident to Landlord's
         relinquishment of possession of all or any portion of such furniture,
         fixtures, equipment, of other personal property to the person. The
         rights of Landlord set forth in this paragraph are in addition to any
         and all other rights of Landlord at law or in equity, and Tenant
         stipulates and agrees that the rights herein granted Landlord are
         commercially reasonable. Tenant knowingly and irrevocably waives any
         claims it may have against Landlord arising from Landlord's removal and
         storage of Tenant's personal property, as provided in this paragraph,
         including, without limitation, any claims under Section 93.002 of the
         Texas Property Code, as the same may be amended from time to time.

         11.03 Notice of Default. 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 the Lease unless
Landlord (or such ground lessor, mortgagee or beneficiary) fails to cure such
non-performance within twenty (20) 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
twenty (20) day period and thereafter diligently pursued to completion.
<PAGE>
         11.04 Limitation of Landlord's Liability. As used in this Lease, the
"Landlord" means only the current owner or owners of the fee title to the
Property or the leasehold estate under a ground lease of the Property 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 previously paid by Tenant if such funds have not yet
been applied under the terms of this Lease. Tenant shall have no right to
terminate or rescind this Lease as a result of any default by Landlord under
this Lease or as a result of the breach of any promises or inducement hereof,
whether in this Lease or elsewhere. Tenant hereby waives such remedies of
termination and rescission and hereby agrees that Tenant's remedies for default
hereunder and for breach of any promise or inducement shall be limited to a suit
or damages and/or injunction.

ARTICLE TWELVE: LANDLORD'S LIEN

ARTICLE THIRTEEN: PROTECTION OF LENDERS

         13.01 Subordination. Tenant accepts this Lease subject and subordinate
to any mortgage, deed of trust or other lien presently existing or hereafter
arising upon the Premises, or upon the Project and to any renewals, refinancing
and extensions thereof, but Tenant agrees that any such mortgagee shall have the
right at any time to subordinate such mortgage, deed of trust or other lien of
this Lease on such term and subject to such conditions as such mortgagee may
deem appropriate in its discretion. Landlord is hereby irrevocably vested with
full power and authority to subordinate this Lease to any first lien mortgage,
deed of trust or other first lien now existing or hereafter placed upon the
Premises, or the Project as a whole, and Tenant agrees upon demand to execute
such further instruments subordinating this Lease or attorning to the holder of
any such liens as Landlord may request. The terms of this Lease are subject to
the approval by the Landlord's lender(s), and such approval is a condition
precedent to Landlord's obligations hereunder. In the event that Tenant should
fail to execute any subordination or other agreement required by this paragraph,
promptly as requested, Tenant hereby irrevocably constitutes Landlord as its
attorney in fact to execute such instrument in Tenant's name, place and stead,
it being agreed that such power is one coupled with an interest. Tenant agrees
that it will from time to time upon request by Landlord execute and deliver to
such persons as Landlord shall request a statement in recordable form certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same in full force and effect as to modified),
stating the dates to which rent and other charges payable under this Lease have
been paid, stating that Landlord is not in default hereunder (or if Tenant
alleges a default stating the nature of such alleged default) and further
stating such other matters as Landlord shall reasonably require.

         13.02 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.

         13.03 Signing of Documents. Tenant shall sign and deliver any
instruments 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 instruments or
document.

         13.04 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 canceled or terminated; (iii) the
         last date or payment of the Base Rent and other charges and the time
         period covered by such payment and (iv) that Landlord is not in default
         under this Lease (or, if Landlord is claimed to be in default, stating
         why). Tenant shall deliver such statement to Landlord within ten (10)
         days after Landlord's request. Any such statement by Tenant may be
         given by Landlord to any prospective purchaser or encumber of the
         Property. Such purchaser or encumber 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 encumber, 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 canceled 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
         estoppelled from denying the truth of such facts.
<PAGE>
         13.05 Tenant's Financial Condition. Within the ten (10) days after
written request from Landlord so long as landlord has just cause, Tenant shall
deliver to Landlord such financial statements as are reasonably required by
Landlord 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 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 herein.

ARTICLE FOURTEEN: AGENT'S COMMISSION

         14.01 Amount and Manner of Payment of Commissions. Commissions due to
the Principal AGENT and to the Cooperating AGENT, if any, shall be calculated
and paid in accordance with Exhibit B, Article 1B of that certain Management
Agreement, dated as of August 15, 1992, between Landlord and CB Commercial Real
Estate Group, Inc.

         14.02 Broker's or Agent's Commission. Tenant represents and warrants
that Tenant has made no agreements for brokerage commissions, compensation to
any broker, or finder's fees, except as listed below, and that there are no
claims for brokerage commissions, compensation, or finder's fees in connection
with this Lease, except as listed below, arising out of or related to any acts
of Tenant. Tenant agrees to indemnify and hold Landlord harmless from and
against all liabilities, claims, damages, losses, costs, and expenses,
including, without limitation, attorneys' fees, arising out of or related to any
breach of Tenant's representation and warrants in this Section 14.02.

Name and Address of Broker(s):

        CB Richard Ellis, Inc.
        5400 LBJ Freeway, Suite 1100
        Dallas, Texas 75240
        Attention: David Easterling

         14.03 Termination. The termination of this Lease by the mutual
agreement of Landlord and Tenant, Tenant not being in default hereunder, shall
not affect the right of the Principal AGENT to continue to receive the monthly
commission agreed to be paid by Landlord under Section 14.01 above, just as if
Tenant had continued to occupy the Property and had paid the monthly rental
during the remaining term of this Lease. Termination of this Lease under Article
Eight, Article Nine, or Article Eleven shall terminate the right to such monthly
commission.

ARTICLE FIFTEEN: MISCELLANEOUS

         15.01 Force Majuere. In the event performance by Landlord-of any term,
condition or covenant in this Lease is delayed or prevented by any Act of God,
strike, lockout, shortage of material or labor, restriction by any governmental
authority, civil root, flood, or any other cause not within the control of
Landlord, the period for performance of such term, condition or covenant shall
be extended for a period equal to the period Landlord-is so delayed or hindered.

         15.02 Interpretation. The captions of 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. For convenience, each party hereto is referred to in the neuter
gender, but the masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omission of Tenant, the
"Tenant" shall include Tenant's agents, employees, contractors, invitees,
successors or other using the Property with Tenant's expressed or implied
permission.

         15.03 Waivers. All waivers must be in writing and signed by the waiving
party. Landlord's failure to enforce any provisions 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. No payment by Tenant or receipt by Landlord of a lesser amount than
the full amount of rent or additional rent due under this Lease shall be deemed
to be other than on account of the earliest rent or additional rent due
hereunder, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, or a
limitation or waiver of Landlord's right to recover the balance of such rent or
additional rent or pursue any other remedy in this Lease.

         15.04 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 provisions or
this Lease, which shall remain in full force and effect.

         15.05. Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.

         15.06 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.

         15.07 Notices. All notices required or permitted under this Lease shall
be in writing and shall be personally delivered or shall be deemed delivered,
whether actually received or not, when deposited in the United States mail,
postage pre-paid, registered or certified mail, return receipt requested,
addressed and stated herein. 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 any other party hereto shall be delivered to the address specified in
Article One as the address for such party. Any party hereto may change its
notice address upon written notice to the other parties.

<PAGE>
                                 Lease Rider "A"
                                LEGAL DESCRIPTION

                                                           REGAL BUSINESS CENTER

TRACT I:

BEING a tract of land out of the James McLaughlin Survey, Abstract No. 845,
Dallas County, Texas, being all of Block 7702 of SECOND INSTALLMENT, IRVING
BOULEVARD BUSINESS CENTER, an addition to the City of Dallas, Dallas County,
Texas according to the plan thereof recorded in Volume 73108, Page 3548, Map
Records, Dallas County, Texas and being more particularly described as follows:

BEGINNING at a point lying on the South Right-of-Way line of Leston Avenue (a 60
foot Right-of-Way), and being South 89 degrees 35 minutes 07 seconds East,
368.00 feet from the intersection of the said South line and the East line of
Regal Row (a 100 foot Right-of-Way);

THENCE South 89 degrees 35 minutes 07 seconds East, along said South line, a
distance of 34.86 feet to the point of a curvature of a circular curve to the
left having a central angle of 6 degrees 41 minutes 17 seconds and a radius of
616.39 feet;

THENCE Easterly, along said curve, an arc distance of 71.95 feet to its point of
tangency;

THENCE North 83 degrees 43 minutes 36 seconds East, continuing along said South
line, a distance of 608.52 feet to the point of curvature of a circular curve to
the right having a central angle of 6 degrees 41 minutes 39 seconds and a radius
of 794.93 feet;

THENCE Easterly, along said curve, an arc distance of 92.88 feet to its point of
tangency;

THENCE South 89 degrees 34 minutes 45 seconds East, a distance of 1.25 feet to a
point far corner;

THENCE South 0 degrees 47 minutes 07 seconds East, a distance of 5.0 feet to a
point for corner;

THENCE South 89 degrees 34 minutes 45 seconds East, a distance of 359.3 feet to
a point for corner;

THENCE South 0 degrees 45 minutes 14 seconds East, a distance of 264.50 feet to
a point for corner;

THENCE North 89 degrees 31 minutes 09 seconds West, a distance of 135.0 feet to
a point for a corner;

THENCE South 0 degrees 45 minutes 14 seconds East, a distance of 449.99 feet to
a point for a corner; said point lying on the North Right-of-Way line of Irving
Boulevard;

THENCE North 89 degrees 31 minutes 09 seconds West, along said North line, a
distance of 684.47 feet to an angle point;

THENCE North 73 degrees 06 minutes 52 seconds West, continuing along said North
line, a distance of 374.84 feet to a point for corner;

THENCE North 0 degrees 24 minutes 53 seconds East, departing said North line, a
distance of 531.68 feet to the PLACE OF BEGINNING and CONTAINING 727,113.19
square feet or 16.6922 acres of land.

TRACT II:

BEING a tract of land out of the James McLaughlin Survey, Abstract No. 845,
Dallas County, Texas, being all of Lot 1, Block 7702 of the FIRST INSTALLMENT,
IRVING BOULEVARD BUSINESS CENTER, an addition to the City of Dallas, Dallas
County, Texas according to the plat thereof recorded in Volume 73087, Page 2144,
Map Records, Dallas County, Texas and being more particularly described as
follows:

BEGINNING at a point lying on the North Right-of-Way line of Leston Street (a 60
foot Right-of-Way) and being the following bearings and distances from the
intersection of said North line and the East Right-of-Way line of Regal Row (a
100 foot Right-of-way);

         South 89 degrees 35 minutes 07 seconds East, 418.00 feet;
         North 83 degrees 43 minutes 36 seconds East, 206.40 feet;

THENCE North 0 degrees 24 minutes 53 seconds East, departing said North line, a
distance of 1056.33 feet to a point for corner, said point lying on the South
Right-of-Way line of the C.R.I. & P. Railroad;

THENCE South 88 degrees 46 minutes 34 seconds East, along said South line, a
distance of 528.01 feet to a point for corner;

THENCE South 0 degrees 47 minutes 07 seconds East, departing said South line, a
distance of 990.59 feet to a point for corner, said point lying on the North
line of Leston Street, said North line being a circular curve to the left having
a central angle of 6 degrees 41 minutes 39 seconds and whose center bears South
0 degrees 25 minutes 15 seconds West, 854.93 feet;

THENCE Westerly, along said curve and said North line of Leston Street, an arc
distance of 99.89 feet to its point of tangency;

THENCE South 83 degrees 47 minutes 36 seconds West, continuing along said North
line, a distance of 452.12 feet to the PLACE OF BEGINNING and CONTAINING
549,749.24 square feet or 12.6205 acres of land.

<PAGE>

         15.08 ATTORNEY'S FEES. If on account of any breach or default by any
party hereto in its obligations to any other party hereto (including but not
limited to the Principal AGENT), it shall become necessary for the non-binding
party to employ an attorney to enforce or defend any of its rights or remedies
hereunder, the defaulting party agrees to pay to the non-binding party its
reasonable attorney's fees, whether or not suit is instituted in connection
therewith.

         15.09 VENUE. All obligations hereunder, including but not limited to
the payment of commission to the Principal AGENT, shall be performable and
payable in Dallas, Dallas County, Texas.

         15.10 GOVERNING LAW. The laws of the State of Texas shall govern this
Lease.

         15.11 SURVIVAL. All obligations of any party hereto not fulfilled at
the expiration or the earlier termination of this Lease shall survive such
expiration or earlier termination as continuing obligations of such party. All
indemnities of either party hereunder shall expressly survive any expiration or
earlier termination of this Lease and shall continue in full force and effect
as obligations of the indemnifying party.

         15.12 BINDING EFFECT. This Lease shall insure to the benefit and be
binding upon each of the parties hereto and their heirs, representatives,
successors and assigns, provided, however, Landlord shall have no obligations to
Tenant's successors or assigns unless the right or interest of such successors
or assigns are acquired in accordance with the terms of this Lease.

         15.13 EXECUTION AS OFFER. The execution of this Lease by the first
party to do so constitutes an offer to lease the Property. Unless within the
number of days stated in Section 1.15 above from the date of its execution by
the first party to do so, this Lease is accepted by the other party and a fully
executed copy if delivered to the first party, such offer shall be automatically
revoked and terminated.

ARTICLE SIXTEEN: ADDITIONAL PROVISIONS AND RIDERS

         Additional provisions may be set forth in the blank space below, and/or
a rider or riders attached hereto. If no additional provisions are to be
inserted in the blank space below, please draw a line through such space. If no
rider or riders are to be attached hereto, please state "no riders" in the blank
space below. If a rider or riders are to be attached hereto, please state in the
blank space below: "See rider or riders attached", and please have Landlord and
Tenant initial all such riders.

         16.01 LEGAL DESCRIPTION OF PROJECTS: See Rider "A" attached hereto and
hereby made an integral part of this Lease.

         16.02 ADDITIONAL PROVISIONS: See Rider "B" attached hereto and hereby
made an integral part of this Lease.

         16.03 EXISTING FLOOR PLAN: See Rider "C" attached hereto and hereby
made an integral part of this Lease.

         16.04 LEASE GUARANTEE: See Rider "D" attached hereto and hereby made an
integral part of this Lease. Executed as of the date stated in Section 1.01
above.

LANDLORD: REGAL BUSINESS CENTER, INC.       TENANT: PUBLISHER DISTRIBUTION
                                                    SERVICES, INC. A NEVADA
                                                    CORPORATION

By: /s/ Barry Lotler                        By: /s/ Dave Buescher
   ------------------------------------        ---------------------------------
   Barry Lotler                                Dave Buescher

Title: President                            Title: President

By: /s/ David Nisker                        Date of Execution by Tenant: 9-14-98
   ------------------------------------                                 --------
   David Nisker

Title: Vice President

Date of Execution by Landlord:
                              ---------

PRINCIPAL AGENT:                            COOPERATING AGENT:

CB RICHARD ELLIS, INC.                      CB RICHARD ELLIS, INC.

By: /s/ David Easterling                    By: /s/ Steve Berger
   ------------------------------------        ---------------------------------
   David Easterling                            Steve Berger

<PAGE>

This Lease Rider "B" contains additional terms and conditions of the Agreement
between REGAL BUSINESS CENTER, INC. as Landlord, and INTERNATIONAL PERIODICAL
DISTRIBUTORS, INC., as Tenant. The terms and conditions in this Lease Rider
shall supersede any conflicting provisions in the printed Lease Agreement
attached hereto.

1.       LANDLORD IMPROVEMENTS: Prior to Lease Commencement Landlord shall
         complete the following improvements:

         -        Installation of three (3) dock levelers surface mounted;

         -        Three (3) roll-up doors shall be painted (currently peeling);

         -        The railings at all entries shall be repaired;

         -        All carpet in office area, which is on top of the vinyl tile
                  floor shall be removed and the vinyl tile floor shall be
                  buffed and waxed;

         -        All interior office areas shall be painted;

         -        Replace broken or stained ceiling tiles;

         -        All yellowed or cracked lighting lenses shall be replaced;

         -        Clean existing mini blinds and replace two (2) mini blinds;

         -        Landlord shall install fifteen (15) 400 watt metal halide
                  fixtures throughout the warehouse area;

         -        Landlord shall provide one 220V/3PH/30AMP plug in warehouse;

         -        Property shall be in code compliance sufficient for the
                  issuance of the certificate of occupancy.

         Landlord shall construct Tenant Improvements to the Premises in
         accordance with the above improvements. Landlord shall contribute a
         total of no more than $23,500 toward the cost of construction of the
         Tenant Improvements ("Tenant Improvement Allowance"). Costs eligible
         for reimbursement from the Tenant Improvement Allowance shall include
         only those items set forth above. Landlord shall pay the Tenant
         Improvement Allowance directly to any architects, contractors and/or
         subcontractors performing the Tenant Improvements in the Premises. Any
         cost of construction of Tenant Improvements in excess of the Tenant
         Improvement Allowance shall be paid in cash by Tenant to Landlord (as
         "Additional Rent") within ten (10) days of receipt of Landlord's
         invoice.

2.       In addition to work described above, prior to Lease Commencement,
         Landlord at its sole cost shall place all HVAC, mechanical, electrical,
         plumbing, lighting, and overhead doors in good working order.

3.       (a)      Tenant covenants not to introduce any form of hazardous or
                  toxic materials onto the Premises or Project without complying
                  with all applicable Federal, State and local laws or
                  ordinances pertaining to transportation, storage, use or
                  disposal of such material, including but not limited to,
                  obtaining property permits.

         (b)      If Tenant's transportation, storage, use or disposal of
                  hazardous or toxic materials on the Premises results in: (1)
                  contamination of the soil or surface or ground water, or (2)
                  loss or damage to person(s) or property, then Tenant agrees to
                  respond in accordance with the following paragraph:

                  Tenant agrees: (i) to notify Landlord immediately, provided
                  urgency does not prohibit Tenant from contracting Landlord
                  first, of any contamination, claim of contamination, loss, or
                  damage, (ii) after consultation and approval by Landlord, to
                  clean up the contamination in full compliance with all
                  applicable statutes, regulations and standards, and (iii) to
                  indemnify, defend and hold Landlord harmless from and against
                  any claims, suits, causes of actions, costs and fees,
                  including reasonable attorney's fees, arising from and
                  connected with any such contamination, claim of contamination,
                  loss or damage. These provisions shall survive termination of
                  this Lease.

4.       Tenant must contract with a qualified and properly insured HVAC
         contractor to have HVAC units serviced at a minimum of once every six
         months. Such services shall include, but not be limited to cleaning of
         the coil and condenser units of each unit; checking of the electrical
         connections, oil or refrigerant leaks, safety devices, blower belt
         wearer, tension and alignment, expansion valve and coil temperature and
         condensate drain; and the lubrication and addition of Freon.

<PAGE>

5.       LEASE RENEWAL: While this Lease is in full force end effect, provided
         that Tenant is not then in default of any of the terms, covenants and
         conditions thereof, Landlord hereby grants to Tenant the right and
         option to renew and extend the term of this Lease for one (1) term of
         three (3) years. Such extension or renewal of the current terms shall
         be on the same terms, covenants and conditions as provided for in the
         Lease during the primary term, except for this paragraph and except
         that the rental during such three (3) year extended term shall be at
         the fair market rental rate then in effect on equivalent properties, of
         equivalent size, in equivalent areas as designated by Landlord.
         Notwithstanding the above, in no case shall the renewal rate be less
         than the rental rate for the lest year of the lease. Notice of Tenant's
         intention to exercise the option must be given to Landlord in writing,
         by Certified or Registered Mail, Return Receipt Requested, postage
         prepaid, or reputable overnight courier, at lease one hundred twenty
         (120) days prior to expiration of the current term of this Lease.
         Landlord shall, within fifteen (15) days following receipt of Tenant's
         notice of its intention to exercise the option, notify Tenant in
         writing of the proposed renewal rate and the Tenant shall, within the
         next fifteen (15) days following receipt of the proposed rate, notify
         the Landlord in writing of its acceptance or rejection of the proposed
         rental rate. Rejection of the proposed rental rate terminates any
         renewal option pursuant to this paragraph.

6.       Notwithstanding anything to the contrary herein, monthly rental shall
         be abated for the fourth month of the lease term (November, 1998).

<PAGE>

                              Existing Floor Plan

                                  [FLOOR PLAN]

<PAGE>
                                 LEASE RIDER "D"
                                 LEASE GUARANTY

         The undersigned (collectively the "Guarantor") hereby absolutely and
unconditionally, jointly and severally, guarantees the prompt, complete and full
and punctual payment, observance, and performance of all the terms, covenants,
and conditions provided to be paid, kept, and performed by the tenant under that
certain Lease Agreement (such lease, as amended, being herein referred to as the
"Lease"), dated September 1, 1998 between Regal Business Center, Inc. as
Landlord ("Landlord") and Publisher Distribution Services, Inc., as Tenant
("Tenant") covering the premises located at 4653 Leston Ave., Suite 706, Dallas,
Texas 75247, and all renewals, amendments, expansions, and modifications of the
Lease. This Guaranty shall include any liability of Tenant, which shall accrue
under the Lease for any period preceding, as well as any period following the
term of the Lease.

         The obligation of the Guarantor is primary and independent of Tenant's
obligations under the Lease and may be enforced directly against the Guarantor
independently of and without proceeding against the Tenant or exhausting or
pursuing any remedy against Tenant or any other person or entity. Guarantor
waives any requirement that Landlord mitigate damages under the Lease.

         The instrument may not be changed, modified, discharged, or terminated
orally or in any manner other than by an agreement in writing signed by
Guarantor and the Landlord.

         The obligations of Guarantor under this Guaranty shall not be released
or otherwise affected by reason of any sublease, assignment, or other transfer
of the Tenant's interest under the Lease, whether or not Landlord consents to
such sublease, assignment, or other transfer.

         Any act of Landlord, or the successors or assigns of Landlord,
consisting of a waiver of any of the terms or conditions of said Lease, or the
giving of any consent to any manner or thing relating to said Lease, or the
granting of any indulgences or extensions of time to Tenant, may be done without
notice to Guarantor and without releasing the obligations of Guarantor
hereunder.

         The obligations of Guarantor hereunder shall not be released by
Landlord's receipt, application, or release of security given for the
performance and observance of covenants and conditions in said Lease contained
on Tenant's part to be performed or observed nor by any modification of such
Lease; but in case of any such modification, the liability of Guarantor shall be
deemed modified in accordance with the terms of any such modification of the
Lease.

         Guarantor waives any defense or right arising by reason of any
disability or lack of authority or power of Tenant and shall remain liable
hereunder if Tenant or any other party shall not be liable under the Lease for
such reason.

         Until all the covenants and conditions in said Lease on Tenant's part
to be performed and observed are fully performed and observed, Guarantor (i)
shall have no right of subrogation against Tenant by reason of any payments or
acts of performance by the Guarantor, in compliance with the obligations of the
Guarantor hereunder; (ii) waives any right to enforce any remedy which
Guarantor, now or hereafter, shall have against Tenant by reason of any one or
more payments or acts of performance in compliance with the obligations of
Guarantor hereunder; and (iii) subordinates any liability or indebtedness of
Tenant, now or hereafter, held by Guarantor to the obligations of Tenant to the
Landlord under said Lease.

         The liability of Guarantor hereunder shall not be released or otherwise
affected by (i) the release or discharge of Tenant in any insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant (collectively "proceeding for relief"); (ii) the impairment,
limitation, or modification of the liability of Tenant or the estate of the
Tenant in any proceeding for relief, or of any remedy for the enforcement of
Tenant's liability under the Lease, resulting from the operation of any law
relating to bankruptcy, insolvency, or similar proceeding or other law or from
the decision in any court; (iii) the rejection or disaffirmance of the Lease in
any proceeding for relief; or (iv) the cessation from any cause whatsoever of
the liability of Tenant.

         This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment by Tenant to Landlord under the Lease is
rescinded or must otherwise be returned by Landlord upon the insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant, all as though such payment had not been made.

         This Guaranty is executed and delivered for the benefit of Landlord and
its successors and assigns, and is and shall be binding upon Guarantor and it
successors and assigns, but Guarantor may not assign its obligations hereunder.

         GUARANTOR AND LANDLORD WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
LANDLORD AND GUARANTOR ARISING OUT OF THIS GUARANTY OR ANY OTHER DOCUMENT OR
INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR ANY TRANSACTION RELATED TO THIS
GUARANTY.

         Guarantor agrees to pay all costs and expenses, including reasonable
attorney's fees, incurred by Landlord in enforcing the terms of this Guaranty.

<PAGE>

         This Guaranty shall be governed by and construed in accordance with the
internal laws of the State, which governs the Lease excluding any principles of
conflicts of laws. For the purpose solely of litigating any dispute under this
Guaranty, this undersigned submits to the jurisdiction of the courts of said
state.

         If the Guarantor is more than one person or entity, the liability of
each such Guarantor shall be joint and several.

         WITNESS THE EXECUTION hereof this ______________ day of September,
1998.

                                     GUARANTOR:

                                     International Periodical Distributors, Inc.

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

                                     Title:
                                           -------------------------------------<PAGE>

                                                                   EXHIBIT 10.35

                       ASSIGNMENT AND ASSUMPTION OF LEASE

         THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") made and
entered into as of this 27th day of APRIL, 2001, by and between COMAG MARKETING
GROUP, LLC, a Delaware limited liability company ("Assignor"), and INTERNATIONAL
PERIODICAL DISTRIBUTORS, INC., a NEVADA corporation ("Assignee").

                              W I T N E S S E T H:

         WHEREAS, Assignor is the current lessee under a lease (the "Lease")
dated September 26, 1995, between Milan Industrial Park, Ltd., as lessor,
("Lessor") and Eastern News Distributors, Inc., as lessee ("Eastern"), by the
terms of which certain real property situated in the City of Milan, Ohio was
leased to Eastern;

         WHEREAS, Eastern's interest as lessee under the Lease was assigned to
Assignor; and

         WHEREAS, Assignor desires to assign all of its right, title, estate and
interest as lessee under the Lease to Assignee as of the Effective Date, as
hereinafter defined, and Assignee desires to assume all of Assignor's right,
title, estate, interest, duties and obligations as lessee under the Lease as of
the Effective Date;

         NOW, THEREFORE, in consideration of the agreements and obligations
hereinafter set forth and other good and valuable consideration received to the
full satisfaction of Assignor and Assignee, the parties hereto agree as follows:

         1.       As of the Effective Date, Assignor conveys, transfers and
assigns unto Assignee all of Assignor's right, title, estate and interest which
Assignor has or may have in and to the Lease and the leased premises under the
Lease.

         2.       Assignee hereby accepts the foregoing assignment from Assignor
of the Lease and the leased premises and assumes, as of the Effective Date, all
of the liabilities and obligations of the lessee under the Lease and agrees to
pay all rent and other sums required to be paid under the Lease and to keep,
perform and observe all of the obligations, terms and conditions of the Lease on
the part of the lessee therein to be kept, performed and observed from and after
the Effective Date.

         3.       Assignee agrees to indemnify, defend and hold Assignor
harmless from and against any and all liability, damage, loss, cost, expense
(including, without limitation, reasonable attorneys' fees and out-of-pocket
expenses), actions, claims and causes of action incurred or suffered by Assignor
by reason of any breach by Assignee of the covenants, agreements, obligations,
terms and conditions of the Lease with respect to periods from and after the
Effective Date.

<PAGE>

         4.       Assignor agrees to indemnify, defend and hold Assignee
harmless from and against any and all liability, damage, loss, cost, expense
(including, without limitation, reasonable attorneys' fees and out-of-pocket
expenses), actions, claims and causes of action incurred or suffered by Assignee
by reason of any breach by Assignor of the covenants, agreements, terms and
conditions of the Lease with respect to periods prior to the Effective Date.

         5.       This Assignment shall be effective on May 1, 2001 (the
"Effective Date).

         6.       This Assignment shall be deemed to contain all of the terms
and conditions agreed upon, it being understood that there are no outside
representations or oral agreements.

         7.       This Assignment shall be binding on and shall [ILLEGIBLE] to
the benefit of the parties hereto and their respective successors and assigns.

         IN WITNESS WHEREOF, Assignor and Assignee have hereunto subscribed
their names as of the day and year first above written.

Signed and acknowledged
in the presence of:                    COMAG MARKETING GROUP, LLC

/s/ Bridgett Fitzpatrick               By: /s/ Debra Delmar
-------------------------                  -------------------------------------
                                       Its: Vice President, Business Development

/s/ Bridgett Fitzpatrick
-------------------------
As to Assignor

                                       INTERNATIONAL PERIODICAL
                                       DISTRIBUTORS, INC.

/s/ Delia Everett                     By: /s/ Norman Raben
-------------------------                  -------------------------------------
                                       Its: Norman Raben
Delia Everett
-------------------------
As to Assignee

<PAGE>

                                LEASE AGREEMENT

This lease agreement is made and entered into as of this ___ day of [1]
September, 1995, at Milan, Ohio, by and between Milan Industrial Park, a ______,
hereinafter called Lessor, and Eastern News Distributors, Inc., a New York
corporation and a wholly owned subsidiary of The Hearet Corporation, hereinafter
called Lessee.

                  ARTICLE 1. DEMISE, DESCRIPTION, USE AND TERM

         1.01 Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, that certain property, hereinafter called the leased premises, situated
in the Township of Milan, Erie County, Ohio, more particularly described on
Exhibit A attached hereto, together with the Improvements which are to be
constructed thereon by Lessor in accordance with Article 7 hereof which shall
contain 75,000 square foot of manufacturing, warehouse and distribution space,
and 7,500 square feet of office space, to be used only as a manufacturing,
warehouse and distribution facility and for no other purpose, for an initial
term of approximately one hundred and twenty (120) months commencing on the
Commencement Date (as defined in Article 7) and ending on the last day of the
month which is one hundred twenty (120) months after the Commencement Date, for
the minimum rental determined and payable as specified in Article 2, provided
that if Lessee is not then in default beyond the applicable cure period it may,
by written notice delivered to Lessor at least ninety (90) days prior to the
then expiring term, have two (2) extension terms of

<PAGE>

five (5) years' each, on the same terms and conditions as the initial term,
except that the minimum rental in each extension term shall be determined under
Article 2, Section 2.02.

                                 ARTICLE 2. RENT

         2.01 Lessee shall pay Lessor at 12508 U.S. Rte. 250 N., Milan, Ohio
44846, or at such other place as Lessor shall designate from time to time in
writing, as rent for the leased premises: During the initial term, the minimum
base annual rental sum of Two Hundred Eighty Eight Thousand Seven Hundred Fifty
Dollars ($288,750), payable without demand and without setoff or deduction
except as herein specifically permitted, in equal monthly installments of Twenty
Four Thousand Sixty-Two and 50/100 Dollars ($24,062.50) each in advance on the
first day of each calendar month commencing with the first day of the month next
succeeding the commencement Data, which shall be known as the "Anniversary Date"
of each year of the Lease.

         2.02 The minimum annual base rental during each year of the first
extension term shall be Two Hundred and Six Thousand Two Hundred Fifty Dollars
($206,250.00), payable without demand and without setoff or deduction except as
herein specifically permitted, in equal monthly installments of Seventeen
Thousand One Hundred Eighty-Seven and 50/100 Dollars ($17,187.50) in accordance
with the same terms and conditions set forth in Section 2.01. The minimum annual
lease rental during each year of the second extension term shall be Two Hundred
Forty-Three Thousand Three Hundred Seventy-Five Dollars ($243,375.00),

                                      -2-

<PAGE>

payable without demand and without setoff or deduction except as herein
specifically permitted, in equal monthly installments of Twenty Thousand Two
Hundred Eighty-One and 25/100 Dollars ($20,281.25) in accordance with the same
terms and conditions set forth in Section 2.01.

                                ADDITIONAL RENTAL

         2.03 Lessee agrees to pay during the term of this Lease as rent,
without demand setoff or deduction except as herein specifically permitted, in
addition to the minimum rental hereinbefore provided, the following:

                             UTILITIES AND CHARGES

                  (a) All utility charges, including telephone, electric, gas,
         water and sewer/septic charges, all garbage and/or trash collection
         charges, and snow and ice removal costs assessed or imposed on the
         leased premises shall be timely paid by Lessee. Lessee shall place in
         its name all utility services it is responsible for. Lessee shall hold
         Lessor harmless from any liability with respect to those utilities and
         charges for which Lessee is responsible.

                        ARTICLE 3. TAXES AND ASSESSMENTS

         3.01 Lessee agrees to pay and discharge all real estate taxes and
general and special assessments as may be levied against the leased premises and
are payable during the term of this lease. Lessor represents that only the
following special

                                      -3-

<PAGE>

assessments are in existence with respect to the leased premises as of the date
of this Lease: [2] None. Further Lessee shall not be responsible for special
assessments which are levied or assessed to pay for Improvements which are the
responsibility of lessor to install under Article 7. Any special assessment for
which Lessee is responsible shall be spread over the longest period permitted by
law and Lessee shall be responsible only for installments of special assessments
which are payable during the term of this Lease. All taxes and assessments
payable for periods, part of which are within the term of this Lease and part of
which are not, shall be prorated between lessor and Lessee based upon the number
of days in such period that the Lease was in force.

         3.02 Lessee shall pay all taxes upon the operation of its business and
the contents of the premises.

         3.03 Lessee reserves the right to contest by appropriate procedures any
tax with respect to the leased premises or the improvements thereon. Lessor
agrees to cooperate with Lessee in any such contest.

         3.04 Lessor covenants and agrees to comply in all respects with the
Ohio Enterprise Zone Agreement dated July 13, 1995, between Lessor, Lessee and
the Board of county Commissioners of Erie County, Ohio (the "Tax Abatement
Agreement") in order to preserve and maintain for the benefit of Lessee the real
property tax abatement granted therein.

                                      -4-

<PAGE>

                              ARTICLE 4. INSURANCE

         4.01 Lessee will maintain fire and extended coverage insurance upon the
Improvements during the term hereof and shall name Lessor as an additional
insured thereon. The fire and [ILLEGIBLE] coverage insurance shall include one
year's rent [ILLEGIBLE] less coverage.

         4.02 Lessee, at its own cost and expense, shall obtain and maintain in
full force and effect at all times during the continuance or this Lease (a)
comprehensive general liability insurance for bodily injury or death occurring
upon, in or about the leased premises, such insurance to afford protection to
the limit of not less than Three Million Dollars ($3,000,000.00) in respect of
bodily injury or death to any one person, and to the limit of not less than
Three Million Dollars ($3,000,000.00) in respect to any one accident; and (b)
for property damage, including fire and extended coverage insurance on Lessee's
fixtures, goods, wares, equipment and merchandise in, on or about the leased
premises, such insurance to afford protection to the limit of not less than
replacement cost. Lessee agrees to cause the insurance companies issuing the
aforesaid policies to forward to Lessor certificates of insurance for the same.

                         ARTICLE 5. WASTE AND NUISANCE

         5.01 Lessee shall not commit, or suffer to be committed, any waste on
the Leased premises, nor shall Lessee maintain, commit, or permit the
maintenance or commission of any

                                      -5-

<PAGE>

nuisance on the leased premises or use the leased premises for any unlawful
purpose.

                               ARTICLE 6. REPAIRS

         6.01 Except to the extent the same is the obligation of Lessor under
Section 6.02, Lessee agrees to keep the leased premises in good order and
repair, reasonable wear and tear and damage by casualty excepted. Lessee further
agrees to keep the leased premises clean, and to maintain, repair or replace all
broken or damaged doors, windows, all utility fixtures and lines including
plumbing and lighting, and pipes, floors, stairways, railings, loading
facilities, parking lots and all exterior lighting or other portions of the
leased premises which are not Lessor's responsibility under Section 6.02. Lessee
shall provide new filters for the heating and air conditioning unit at least
once every month. Lessee shall, at its sole cost and expense, maintain and
repair the heating and air conditioning facilities and electrical lighting and
the same shall be returned to Lessor at the end of the term in the same
condition as they are now or may be put in during the initial term by Lessee,
reasonable wear and tear and damage by casualty only excepted. Notwithstanding
anything contained in this Article 6 to the contrary, Lessee shall not be
responsible for making repairs, replacements, or maintenance which is Lessor's
responsibility under Section 6.02 or where the same have been determined by
Lessor and Lessee to have been the result of the actions, whether negligent or
otherwise, of Lessor's general contractor or its subcontractors.

                                      -6-

<PAGE>

                                 LESSOR'S DUTY

         6.02 Lessor will maintain in good condition and repair and replace, if
necessary, the roof and exterior of the building, the foundation and all
structural walls of the building and all water and sewer lines and other utility
lines to the outside building wall. Lessor will bring the necessary telephone
and other utility lines to the building and Lessee shall thereafter be solely
responsible for the further installation and maintenance of its telephone
system.

    ARTICLE 7. INITIAL CONSTRUCTION, ALTERATIONS, IMPROVEMENTS, AND FIXTURES

         7.01 Lessor shall be responsible for the construction of the building
and other improvements described on Exhibit B attached hereto (the
"Improvements"), in accordance with Lessee's outline Specifications attached
hereto as EXHIBIT "C" and all drawings, specification, construction memoranda
and other information related thereto, as prepared by Lessee (collectively
referred to as the "Plans"). Lessor, at its sole cost and expense, shall
complete the Improvements in accordance with the Plans, including any additional
work required to complete the Improvements and as otherwise reasonably
contemplated within the scope of the specific work set forth in the Plans
("Landlord's Construction").

         The Plans shall be submitted by Lessee to Lessor by _____, 199___.

         7.02 The Improvements shall be completed and delivered to Lessee
promptly and with due diligence. If Lessor has not

                                      -7-

<PAGE>

commenced construction by September [3] 30, 1995, Lessee may terminate this
lease on written notice to Lessor. Lessor shall diligently prosecute Lessor's
Construction to completion without interruption or delay, in a good and
workmanlike manner, using good materials in accordance with the Plans, and in
compliance with all applicable laws and regulations of federal, state and
municipal governments, or any department or division thereof, including building
and other codes. Lessor, at Lessor's expense, shall procure all building and
other permits and approvals necessary for performing Lessor's Construction. If
Lessor's construction is not completed by December 1, 1995 subject to delays
due to labor disputes, fire, unusual delays in transportation and materials,
adverse weather conditions not reasonably anticipated, unavoidable casualties or
other causes beyond Lessor's control. Lessee shall have the right, in addition
to any other rights and remedies available to Lessee at law or in equity, to
terminate this Lease by written notice to Lessor. Upon completion of Lessor's
Construction, Lessor and Lessee shall jointly inspect the Improvements and
prepare an agreed upon punchlist which shall be corrected by Lessor within
thirty (30) days. Upon Lessee's acceptance of the Improvements, Lessor shall
deliver possession to Lessee, which date of possession shall be the Commencement
Date under this Lease.

         7.03 Lessor shall unconditionally guarantee all work performed by or
for Lessor in the construction of the Improvements against defective workmanship
and materials for the period of one (1) year from the Commencement Date. Lessor
shall

                                      -8-

<PAGE>

assign to Lessee any and all guarantees and/or warranties of workmanship and
materials which it may receive or which are required in the Plans with respect
to those portions of the Improvements required to be maintained and repaired by
Lessee hereunder.

         7.04 Lessee may, at its own expanse, from time to time, make such
alterations, additions or changes, structural or otherwise, in and to the leased
premises as it may deem necessary or suitable; provided, however, Lessee shall
obtain Lessor's prior written consent to drawings and specifications for
structural alterations, additions or changes, which consent shall not be
unreasonably withheld or delayed; provided, further, Lessor shall not withhold
its consent thereto if the structural integrity of the Improvements will not be
impaired by such work. The term "structural changes", as used herein, shall not
include moving of non-load bearing walls, relocation of building entry doors,
minor plumbing and electrical work, and other modifications which do not reduce
or impair the value or utility of the Improvements. Lessor, at Lessor's cost,
shall cooperate with Lessee in securing building and other permits or
authorizations required from time to time for any work permitted hereunder or
for installations permitted hereunder by Lessee. All such alterations additions,
or changes shall be done in accordance with all applicable laws, rules,
regulations, and orders, including applicable building codes. Lessee shall not
allow any mechanic's liens to be filed as a consequence of the alterations or
changes made by Lessee and if any are filed Lessee

                                      -9-

<PAGE>

will cause them to be removed (or bonded) within thirty (30) days after notice.

         7.05     If Lessee desires to add additional space to the leased
premises (an "Addition"), it may do so in accordance with the requirements and
limitations of Section 7.04 hereof, or it may require that Lessor construct the
Addition in accordance with the following terms and conditions:

         (a)  Lessee shall submit drawings and specifications for the Addition
to Lessor for Lessor's approval, which may not be unreasonably withheld or
delayed;

         (b)  Lessor shall cause the Addition to be commenced promptly after the
drawings and specifications are approved and shall diligently pursue the
completion of construction without interruption in accordance with a mutually
approved construction schedule;

         (c)  Lessor shall obtain a minimum of three bids for each major trade
for the work, which bids shall be subject to the reasonable approval of Lessor
and Lessee. Lessor shall be responsible for the payment of the entire cost of
the work, subject to the rent adjustment in subparagraph (d) below; and

         (d)  The actual out-of-pocket cost of the work shall be the "Total
Cost" of the work. Commencing with the first month following substantial
completion of the work, the monthly base rent shall be increased by the amount
required to amortise the Total Cost over the balance of the then term of this
lease at an interest rate equal to [4] 2% per annum above the rate of interest
incurred by Lessor on the funds borrowed by Lessor to construct the Addition,
which Lessor represents shall be the best rate then available to Lessor from
commercial lending sources in the Milan area provided, however, at Lessee's
option, Lessee may then exercise any of the remaining options to extend the term
and

                                      -10-

<PAGE>

[5] [ILLIGIBLE]mortize the Total Cost over the balance of the term as extended.

                        ARTICLE 8. SURRENDER OF PREMISES

         8.01 Lessee shall, without demand therefor and at its own cost and
expense within ten (10) days after expiration or sooner termination of the term
hereof or of any extended term hereof remove all property belonging to Lessee
and all alterations, improvements and fixtures which by the terms hereof Lessee
is permitted to remove, repair all damage to the leased promises caused by such
removal, and restore the leased premises to the condition they were in prior to
the installation of the property so removed. Any property not so removed shall
be deemed to have been abandoned by Lessee and may be retained or disposed of by
Lessor.

          ARTICLE 9. DESTRUCTION OR DAMAGE BY FIRE AND OTHER CASUALTY

         9.01 If the leased premises are damaged or destroyed in whole or in
part by fire or other casualty during the term hereof, Lessor shall repair and
restore the same to a tenantable condition following the occurrence thereof and
the rent herein provided shall abate entirely in case the entire leased premises
are untenantable and pro rata for the portion rendered untenantable in case a
part only is untenantable, until the same shall be restored to a tenantable
condition. Such repairs and/or restoration shall be commenced by Lessor within
forty-five (45) days after the date of any such damage or destruction and shall
be substantially completed within ninety (90) days from the commencement of
restoration, due regard being had to unusual conditions including, but not
limited to, strikes, lockouts, unusual delays in transportation of material,
adverse weather

                                      -11-

<PAGE>

conditions not reasonably anticipated, unavoidable casualties, and acts of God.
In the event the said work is not commenced within said forty-five (45) day
period, unless the commencement is delayed because of unavailability of labor
due to strikes or lockouts, adverse weather conditions or unavailability of
material for any reason whatsoever, then Lessee may at its option terminate this
lease by a written notice to Lessor. In the event the total cost of repairing
and/or restoring the damaged or destroyed buildings exceeds the total amount
received by Lessor from all policies of insurance obtained and maintained by
Lessee in accordance with Article 4 hereof and Lessee will not agree to fund the
difference, than Lessor may, at its election (a) terminate this Lease by a
written notice to Lessee; or (b) complete such repairs or restoration. In the
event the destruction or damage occurs at any time during the last six (6)
months of the initial term or any renewal of this Lease, Lessor shall not be
obligated to repair and/or restore unless Lessee shall first elect to exercise
its next remaining option to renew, if any. If Lessee shall not so agree, than
Lessor may, at its option, terminate this Lease by a written notice to Lessee.
Upon any termination of this Lease under this Article 9 the obligations of
Lessee hereunder shall cease as of the effective date of such termination.

                           ARTICLE 10. EMINENT DOMAIN

         10.01    In the event the entire leased premises are taken for any
public or quasi public use, under any Statute or by

                                      -12-

<PAGE>

right of eminent domain, or if any part of the leased premises are taken and the
part not taken is insufficient for the reasonable operation of lessee's
business, then in either of such events this Lease shall terminate on the date
when possession is required for the public use, and all rents, taxes and other
charges shall be prorated and paid to such date. In the event only part of the
leased premises and/or buildings thereon are so taken and the part not so taken
shall be sufficient in Lessee's judgment for the reasonable operation of
Lessee's business, this Lease shall remain unaffected except that (a) Lessee
shall be entitled to a pro rata reduction in the rent to be paid hereunder,
based on the proportion which the rental value of the portion of the leased
premises so taken bears to the rental value of the entire leased premises
originally demised, and (b) Lessor shall promptly after such taking and at
Lessor's own cost and expense, restore that part of the building not so taken to
as near its former condition as the circumstances will permit. In case of any
such taking, whether of all or any part of the leased premises and regardless of
whether this Lease survives, Lessee shall, however, be entitled to claim, prove
and receive in such condemnation proceedings, such award as may be allowed for
damages based on ownership of leasehold improvements, loss or business, money,
expenses, business relocation expenses and other damages available under the
applicable law.

                             ARTICLE 11. INDEMNITY

                                      -13-

<PAGE>

         11.01    Lessee agrees to indemnify and hold Lessor harmless against
any and all claims, demands, damages, costs and expenses, including reasonable
attorneys' fees for the defence thereof, arising from the conduct or management
of Lessee's business on or about the leased premises or from any breach on the
part of Lessee of any condition of this Lease, or from any negligent or reckless
act of Lessee, its agents, contractors, employees, subtenants, if any,
concessionaires, or licenses in or about the leased premises. In case of any
action or proceeding brought against Lessor by reason of any such claim, Lessee,
upon notice from Lessor, covenants to defend such action or proceeding by
counsel reasonably acceptable to Lessor.

                       ARTICLE 12. DEFAULTS AND REMEDIES

         12.01    If Lessee shall allow the rent to be in arrears more than ten
(10) days following written notice thereof, or shall remain in default under any
other condition of this Lease for a period of thirty (30) days following written
notice thereof (unless the same cannot reasonably be cured within said thirty
(30) day period, in which event Lessee shall not be in default if it diligently
pursues such cure to completion), or should any other person than Lessee secure
possession of the premises, or any part thereof, by reason of any receivership,
bankruptcy proceeding, or other operation of law in any manner whatsoever and
such possession is not returned to Lessee within sixty (60) days, Lessor may,
at its option, without notice to Lessee, terminate this Lease, or in the
alternative, Lessor may

                                      -14-

<PAGE>

re-enter and take possession of said premises and remove all persons and
property therefrom, without being deemed guilty of any manner of Trespass,
and relet the leased promises or any part hereof, for all or any part of the
remainder of said term, to a party satisfactory to Lessor, and at such monthly
rental as Lessor may with reasonable diligence be able to secure. Should Lessor
be unable to relet after reasonable efforts to do so, or should such monthly
rental be less than the rental Lessee was obligated to pay under this Lease, or
any renewal thereof, plus the expense of reletting, the Lessee shall pay the
amount of such deficiency to Lessor.

    All rights and remedies of Lessor under this Lease shall be cumulative, and
none shall exclude any other right or remedy at law. Such rights and remedies
may be exercised and enforced concurrently and whenever and as often as occasion
therefore arises.

                       ARTICLE 13. INSPECTION BY LESSOR

         13.01    Lessee shall permit Lessor and its agents to enter into and
upon the leased premises at all reasonable times upon reasonable prior notice
for the purpose of inspecting the same or for the purpose of maintaining or
making repairs or alterations to the Improvements.

                      ARTICLE 14. ASSIGNMENT AND SUBLEASE

         14.01    Lessee shall not assign this Lease nor sublet all or any
portion of the leased premises without the prior

                                      -15-

<PAGE>

written consent of Lessor, which consent shall not be unreasonably withheld or
delayed, and further provided that Lessee shall remain liable to the Lessor
hereunder.

         14.02    Notwithstanding the foregoing, Lessee may, upon prior written
notice to Lessor and without Lessor's consent, transfer, assign or sublet the
leased premises or any part thereof to (a) any entity owned or controlled by or
under common control with Lessee or the Hearst Corporation, (b) any successor,
by merger or otherwise, to all or substantially all of the assets of Lessee or
(c) to any entity or party with a net worth in excess of $10,000,000 but in any
such event Lessee shall remain responsible for the obligations of the lessee
under this lease.

                           ARTICLE 15. MISCELLANEOUS

         15.01    All notices provided to be given under this agreement shall be
deemed given when received by certified mail or registered mail, addressed to
the proper party, at the following address:

         Lessor: ______________________
                 ______________________
                 ______________________

         Lessee: ______________________
                 ______________________
                 ______________________

                                 PARTIES BOUND

         15.02    This agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective

                                      -16-

<PAGE>

heirs, executors, administrators, legal representatives, successors, and assigns
when permitted by this agreement.

                               OHIO LAW TO APPLY

         15.03    This agreement shall be construed under and in accordance with
the laws of the State of Ohio.

                               LEGAL CONSTRUCTION

         15.04    In case any one or more of the provisions contained in this
Lease shall for any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision thereof and this Lease shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.

                         ROLE AGREEMENT OF THE PARTIES

         15.05    This Lease constitutes the sole and only agreement of the
parties hereto and supersedes any prior understandings or written or oral
agreements between the parties respecting the within subject matter.

                                   AMENDMENT

         15.06    No amendment, modification, or alteration of the terms hereof
shall be binding unless the same be in writing,

                                      -17-

<PAGE>

dated subsequent to the date hereof, and duly executed by the parties hereto.

                               WAIVER OF DEFAULT

         15.07    No waiver by the parties hereto of any default or breach of
any term, condition, or covenant of this Lease shall be deemed to be a waiver of
any breach of the same of any other term, condition, or covenant contained
herein.

                               PEACEFUL ENJOYMENT

         15.08    Lessee, upon paying the rent and keeping and performing the
covenants of this Lease, on its part to be kept and performed, shall peacefully
and quietly hold, occupy and enjoy the premises during the term hereof, and any
renewal thereof, without any hindrance or molestation by any person whatsoever.
Lessor covenants and agrees that it is the owner of the leased premises in fee
simple subject only to the exceptions to title listed on Exhibit D.

         15.09    Upon written request by Lessor, Lessee shall execute and
deliver an agreement subordinating this Lease to any first mortgage upon the
leased premises, provided, however, such subordination shall be upon the express
condition that the validity of this Lease shall be recognised by the mortgages
and that, notwithstanding any default by the mortgagor with respect to said
mortgage or any foreclosure thereof, Lessee's possession and right of use under
this Lease in and to the leased premises

                                      -18-
<PAGE>

shall not be disturbed by such mortgages unless and until Lessee shall breach
any of the provisions hereof and this Lease or Lessee's right to possession
hereunder shall have been terminated in accordance with the provisions of this
Lease.

         15.10    In the event Lessor shall fail to perform any obligation
specified in this Lease, then Lessee may, after the continuance of any such
default for thirty (30) days after written notice thereof by Lessee to Lessor,
do all necessary work and make all necessary payments in connection therewith
and Lessor shall, on demand, pay Lessee, forthwith, the amount no paid by Lessee
from the date of payment until re-payment and Lessee may, to the extent
necessary, withhold any and all rent payments and other payments thereafter due
to Lessor and apply the same to the payment of such indebtedness.

         15.11    Lessor represents that it has made a thorough investigation of
the physical condition of the leased premises, that it is fully familiar with
the present and prior uses of the leased, premises and that there are not now or
have there been any toxic or hazardous wastes or substances used, generated,
stored, treated or disposed on the leased premises. Lessor hereby, indemnifies
Lessee from and against any loss, liability, claim or expense, including,
without limitation, cleanup, engineering and attorney's fees and expenses that
Lessee may incur by reason of the above representation being false or by reason
of any investigation or claim of any governmental agency or third parties in
connection therewith. Lessor's representations' and

                                      -19-

<PAGE>

indemnity to Lessee under this paragraph shall survive the cancellation or
termination of this Lease.

         15.12    In the absence of any written agreement to the contrary, if
Lessee should remain in occupancy of the leased premises after the expiration of
the lease term it shall so remain as a tenant from month to month and all
provisions of this Lease applicable to such tenancy shall remain in full force
and effect.

         15.13    The conditions, covenants and agreement contained in this
Lease shall be binding upon and inure to the benefit of the parties hereof and
their respective heirs, executors, administrators, successors and assigns. All
covenants and agreements of this Lease shall run with the land.

         15.14    The parties hereto have, simultaneously with the execution and
delivery of this Lease, executed and delivered a Memorandum of Lease which
Lessor shall, at its sole expense, cause to be recorded within sixty (60) days
following delivery of this Lease and returned to Lessee by Lessor within sixty
(60) days thereafter.

                                PURCHASE RIGHTS

         16.01    In the event that Lessor, during the initial or any renewal
term of this Lease, shall receive a bona fide offer for the purchase of the
leased premises, which offer Lessor shall be ready and willing to accept, Lessor
shall give Lessee written notice of the terms and conditions as contained in
such offer. Lessee may exercise its right of first refusal by giving

                                      -20-

<PAGE>

Lessor written notice within said thirty (30) day period and such notice by
Lessee shall create a binding purchase agreement between Lessor and Lessee upon
the terms and conditions contained in the offer except that Lessee shall not be
required to close the purchase until a minimum of sixty (60) days after Lessee
exercises its right of first refusal.

         16.02    Lessor hereby grants to Lessee the option to purchase the
leased premises at the expiration of the [6] second renewal term of this Lease
(provided Lessee shall have exercised its rights to renew this lease for the
first and second renewal terms) on the following terms and conditions:

                  (a)      Lessee must exercise its option by delivering written
         notice to Lessor at least sixty (60) days prior to the expiration of
         the initial or any renewal term of this Lease.

                  (b)      The purchase price for the leased premises shall be
         the greater of $2,000,000 or the "fair market value" of the leased
         premises as of the date Lessee exercises its option to purchase. The
         fair market value shall be determined by mutual agreement of Lessor and
         Lessee within thirty (30) days after Lessee exercises its option. If
         Lessor and Lessee cannot agree on the fair market value within said
         thirty (30) day period, each party shall select an MAI appraiser who
         together shall determine the fair market value of the leased premises.
         If the two appraisers cannot agree on the value the two appraisers
         shall select a

                                      -21-

<PAGE>

         third MAI appraiser and the purchase price shall be the value
         determined by the third appraiser.

                  (c)      Lessor shall convey the Leased property to Lessee by
         general warranty deed subject to such exceptions to title as are
         approved by Lessee.

                  (d)      Lessor shall pay the cost of conveyance fees and
         transfer taxes. Lessee shall pay the cost of title insurance and the
         cost of recording the deed.

                                      -22-

<PAGE>

                  (e)      The closing date shall be determined by Lessee but
         shall not be Later than ninety (90) days after Lessee exercises its
         option to purchase.

                   ARTICLE 17. RESERVATION OF EASEMENT RIGHTS

         17.01    Lessor reserves the right to permit the owners Lessees or
occupants of an approximately ten (10) acre of real property identified on the
site plan attached hereto as EXHIBIT E to use the driveway to be constructed by
Lessor as shown on said EXHIBIT E for access to U.S. Highway $250, provided that
from and after the date that such party or parties commence to use the driveway,
one-half of the cost of maintaining, snow removal, repaying and replacing that
portion of the driveway used by such party of parties shall be paid by Lessor to
Lessee within twenty (20) days after receipt of an invoice from Lessee for such
cost, and if payment is not so made Lessee pay not off Lessor's share of such
cost against rent.

         IN WITNESS WHEREOF, the undersigned Lessor and Lessee hereto execute
this agreement as of the day and year first above written.

Signed and acknowledged                      LESSOR:
in the presence of:                          MILAN INDUSTRIAL PARK

_______________________                      By_________________________
                                               Managing Partner.

_______________________

                                             LESSEE:
                                             EASTERN NEWS DISTRIBUTORS

_______________________                      By:________________________

_______________________                      By:________________________

                                      -23-

<PAGE>

AMENDMENT TO LEASE AGREEMENT OF 9/26/95
MILAN INDUSTRIAL PARK/EASTERN NEWS DIST., INC.
PAGE TWO

State of Ohio  )
               ) ss:
County of Erie )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself to be the
President of Milan Industrial Park, Ltd., and that he, as such President, being
authorized to do so, executed the foregoing Amendment to the Lease Agreement
dated September 26, 1995, for the purposes therein contained by signing the name
of the corporation by himself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1 day of October, 1996.

                                            /s/ Shelda L. Robbins
                                            -------------------------
                                            Notary Public

                                               SHELDA L. ROBBINS
                                            Notary Public, State of Ohio
                                            My Commission Expires 12/9/97

State of Ohio )
              ) ss:
County of Erie)

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself/herself to
be the Landlord of Eastern News Distributors, Inc., and that he/she, as such
Landlord, being authorized to do so, executed the foregoing Amendment to the
Lease Agreement dated September 26, 1995, for the purposes therein contained by
signing the name of the corporation by himself/herself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at notary, _________________, this 1 day of October, 1996.

                                            /s/ Shelda L. Robbins
                                            -----------------------
                                            Notary Public

                                               SHELDA L. ROBBINS
                                            Notary Public, State of Ohio
                                            My Commission Expires 12-9/97

This Amendment to the Lease Agreement dated September 26, 1995, was prepared by
Robert M. Moore, Muehlhauser & Moore, Attorneys at Law, 422 Columbus Avenue,
P.O. Box 790, Sandusky, Ohio 44870.

<PAGE>

AMENDMENT TO LEASE AGREEMENT OF 9/26/95
MILAN INDUSTRIAL PARK/EASTERN NEWS DIST., INC.
PAGE TWO

State of Ohio  )
               ) ss:
County of Erie )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself to be the
President of Milan Industrial Park, Ltd., and that he, as such President, being
authorized to do so, executed the foregoing Amendment to the Lease Agreement
dated September 26, 1995, for the purposes therein contained by signing the name
of the corporation by himself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1 day of October, 1996.

                                            /s/ Shelda L. Robbins
                                            --------------------
                                            Notary Public

                                              SHELDA L. ROBBINS
                                            Notary Public, State of Ohio
                                            My Commission Expires 12/9/97

State of Ohio   )
                ) ss:
County of Erie )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself/herself to
be the Landlord of Eastern News Distributors, Inc., and that he/she, as such
Landlord, being authorized to do so, executed the foregoing Amendment to the
Lease Agreement dated September 26, 1995, for the purposes therein contained by
signing the name of the corporation by himself/herself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at notary, _____________, this 1 day of October, 1996.

                                            /s/ Shelda L. Robbins
                                            -----------------------
                                            Notary Public

                                              SHELDA L. ROBBINS
                                            Notary Public, State of Ohio
                                            My Commission Expires 12-9/97

This Amendment to the Lease Agreement dated September 26, 1995, was prepared by
Robert M. Moore, Muehlhauser & Moore, Attorneys at Law, 422 Columbus Avenue,
P.O. Box 790, Sandusky, Ohio 44870.

<PAGE>

    SECOND ADDENDUM TO LEASE AGREEMENT EXECUTED SEPTEMBER 26, 1995 BETWEEN MILAN
INDUSTRIAL PARK AND EASTERN NEWS DISTRIBUTORS, INC.

         On the 1 day of July 1999, the MILAN INDUSTRIAL PARK, an Ohio limited
liability company, the LESSOR, and EASTERN NEWS DISTRIBUTORS, INC., a New York
corporation and a wholly owned subsidiary of The Hearst Corporation, the LESSEE,
hereby amends the lease dated September 26, 1995, to provide as follows:

         WHEREAS, LESSOR agrees to install three (3) dock doors and relocate the
trash compactor at the leased premises; and

         WHEREAS, the LESSEE agrees to pay Five Hundred One and 93/100 Dollars
($501.93) per month to the LESSOR beginning, on July 1, 1999, for seventy-eight
(78) months, which shall be in addition to the rent the LESSEE pays to LESSOR as
set forth in Article 2 of the September 26, 1995, lease.

         NOW THEREFORE, in consideration of the promises, mutual covenants, and
representations contained herein, the LESSOR and the LESSEE agree to the
above-captioned terms and conditions. Except as hereby amended, all terms,
conditions, and provisions of the September 26, 1995 lease shall remain in full
force and effect and the parties hereto ratify the same.

         IN WITNESS WHEREOF, the LESSEE and LESSOR have entered into this Second
Addendum to Lease Agreement as set forth on the date above.

                                            MILAN INDUSTRIAL PARK, LTD.

[ILLEGIBLE]                                 By:/s/ Harry Perdue
------------------------                       -----------------------------
Witness                                        Harry Perdue, Jr., President

[ILLEGIBLE]
-------------------------
Witness

                                            EASTERN NEWS DISTRIBUTORS, INC.

[ILLEGIBLE]                                 By: /s/ Donald Hawkins
--------------------------                     ----------------------------
Witness

[ILLEGIBLE]
--------------------------
Witness

<PAGE>

SECOND ADDENDUM TO LEASE AGREEMENT OF 9/26/95
MILAN INDUSTRIAL PARK/EASTERN NEWS DIST., INC.
PAGE TWO

State of Ohio  )
               ) ss:
County of Erie )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself to be the
President of Milan Industrial Park, Ltd., and that he, as such President, being
authorized to do so, executed the foregoing Second Addendum to the Lease
Agreement dated September 26, 1995, for the purpose therein contained by signing
the name of the corporation by himself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Milan, Ohio, this 1st day of July, 1999.

                                            /s/ Shelda L. Robbins
                                            -------------------------
                                            Notary Public

State of Ohio  )                              SHELDA L. ROBBINS
               ) ss:                        Notary Public, State of Ohio
County of Erie )                            My Commission Expires 11/19/02

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Donald Hawkins, who acknowledged himself/herself to be
the Director of Eastern News Distributors, Inc., and that he/she, as such
Director, being authorized to do so, executed the foregoing Second Addendum to
the Lease Agreement dated September 26, 1995, for the purposes therein contained
by signing the name of the corporation by himself/herself as Eastern News.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Milan, Ohio, this 1st day of July, 1999.

                                            /s/ Shelda L. Robbins
                                            -------------------------
                                            Notary Public

                                              SHELDA L. ROBBINS
                                            Notary Public, State of Ohio
                                            My Commission Expires 11/19/02

This First Addendum to the Lease Agreement dated September 26, 1995, was
prepared by Robert M. Moore, Muehlhauser & Moore, Attorneys at Law, 422 Columbus
Avenue, P.O. Box 790, Sandusky, Ohio 44870.

<PAGE>

                          MEMORANDUM OF LEASE ADDENDUM

         On the 1 day of July, 1999, the Second Addendum of the September 26,
1995, lease was entered into between Milan Industrial Park, Ltd. and Eastern
News Distributors, Inc. This Memorandum of Lease Addendum is presented for
recording:

         1.       Name of lessor in lease: Milan Industrial Park, Ltd.

         2.       Name of lessee therein: Eastern News Distributors, Inc.

         3.       Addresses set forth in lease as addresses of lessor and
                  lessee:
                  Lessor: 250 West 55th St., Rm. 201, New York, NY 10011
                  Lessee: 12508 St. Rt. 250, Milan, OH 44846

         4.       Date of Lease: September 26, 1995

         5.       Date of Lease Addendum: 1 July 1999

         6.       Description of leased premises as set forth in lease.

                             SEE ATTACHED EXHIBIT A

         7.       Term of the Addendum to lease: Seventy-eight months.

SIGNED AND ACKNOWLEDGED
IN THE PRESENCE OF:                                  LESSOR

                                            Milan Industrial Park, Ltd.

[ILLEGIBLE]                                 By: /s/ Harry A. Perdue, Jr.
--------------------------                      ----------------------------
Witness                                         Harry A. Perdue, Jr.
                                                President

[ILLEGIBLE]
--------------------------
Witness

                                                         LESSEE

                                            Eastern News Distributors, Inc.

[ILLEGIBLE]                                 By: /s/ Donald Hawkins
--------------------------                      ----------------------------
Witness

                                            Its ___________________________

[ILLEGIBLE]
--------------------------
Witness

<PAGE>

STATE OF OHIO   )
                ) ss:
COUNTY OF ERIE  )

         Before me, a Notary Public, in and for said County and State,
personally appeared the above named Harry A. Perdue, Jr. who acknowledged
himself to the President of Milan Industrial Park, Ltd. and that he, as such
President being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the corporation by himself as
President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1st day of July, 1999.

                                                        /s/ Shelda L. Robbins
                                                        ---------------------
                                                        Notary Public

                                                        SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02
STATE OF OHIO   )
                ) ss:
COUNTY OF ERIE  )

         Before me, a Notary Public, in and for said County and State,
personally appeared the above named Donald Nawkins who acknowledged himself to
the Director of Eastern News Distributors, Inc. and that he, as such Director
being authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the corporation by himself as Eastern
News.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1st day of July, 1999.

                                                        /s/ Shelda L. Robbins
                                                        ---------------------
                                                        Notary Public

                                                       SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02

         This instrument was prepared by Robert M. Moore, MUEHLHAUSER & MOORE,
422 Columbus Avenue, P.O. Box 790, Sandusky, Ohio 44870.

                                       2

<PAGE>

  SECOND ADDENDUM TO LEASE AGREEMENT EXECUTED SEPTEMBER 26, 1995 BETWEEN MILAN
              INDUSTRIAL PARK AND EASTERN NEWS DISTRIBUTORS, INC.

         On the 1 day of July 1999, the MILAN INDUSTRIAL PARK, an Ohio limited
liability company, the LESSOR, and EASTERN NEWS DISTRIBUTORS, INC., a New York
corporation and a wholly owned subsidiary of The Hearst Corporation, the LESSEE,
hereby amends the lease dated September 26, 1995, to provide as follows:

         WHEREAS, LESSOR agrees to install three (3) dock doors and relocate the
trash compactor at the leased premises; and

         WHEREAS, the LESSEE agrees to pay Five Hundred One and 93/100 Dollars
($501.93) per month to the LESSOR beginning, on July 1, 1999, for seventy-eight
(78) months, which shall be in addition to the rent the LESSEE pays to LESSOR as
set forth in Article 2 of the September 26, 1995, lease.

         NOW THEREFORE, in consideration of the promises, mutual covenants, and
representations contained herein, the LESSOR and the LESSEE agree to the
above-captioned terms and conditions. Except as hereby amended, all terms,
conditions, and provisions of the September 26, 1995 lease shall remain in full
force and effect and the parties hereto ratify the same.

         IN WITNESS WHEREOF, the LESSEE and LESSOR have entered into this Second
Addendum to Lease Agreement as set forth on the date above.

                                              MILAN INDUSTRIAL PARK, LTD.

/s/ [ILLEGIBLE]                               By: /s/ Harry Perdue, Jr.
---------------------                             ----------------------
Witness                                           Harry Perdue, Jr., President

/s/ [ILLEGIBLE]
---------------------
Witness                                       EASTERN NEWS DISTRIBUTORS, INC.

/s/ [ILLEGIBLE]                               By: /s/ Donald Hawkins
---------------------                             ----------------------
Witness

/s/ [ILLEGIBLE]
---------------------
Witness

<PAGE>

SECOND ADDENDUM TO LEASE AGREEMENT OF 9/26/95
MILAN INDUSTRIAL PARK/EASTERN NEWS DIST., INC.
PAGE TWO

State of Ohio    )
                 ) ss:
County of Erie   )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Harry Perdue, Jr., who acknowledged himself to be the
President of Milan Industrial Park, Ltd., and that he, as such President, being
authorized to do so, executed the foregoing Second Addendum to the Lease
Agreement dated September 26, 1995, for the purposes therein contained by
signing the name of the corporation by himself as President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Milan, Ohio, this 1st day of July, 1999.

                                                        /s/ Shelda L. Robbins
                                                        ---------------------
                                                        Notary Public

                                                       SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02

State of Ohio    )
                 ) ss:
County of Erie   )

         Before me, a Notary Public in and for said County and State, personally
appeared the above-named Donald Hawkins, who acknowledged himself/herself to be
the Director of Eastern News Distributors, Inc., and that he/she, as such
Director, being authorized to do so, executed the foregoing Second Addendum to
the Lease Agreement dated September 26, 1995, for the purposes therein contained
by signing the name of the corporation by himself/herself as Eastern News.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Milan, Ohio, this 1st day of July, 1999.

                                                        /s/ Shelda L. Robbins
                                                        ---------------------
                                                        Notary Public

                                                       SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02

This first Addendum to the Lease Agreement dated September 26, 1995, was
prepared by Robert M. Moore, Muehlhauser & Moore, Attorneys at Law, 422 Columbus
Avenue, P.O. Box 790, Sandusky, Ohio 44970.

<PAGE>

                          MEMORANDUM OF LEASE ADDENDUM

         On the 1 day of July, 1999, the Second Addendum of the September 26,
1995, lease was entered into between Milan Industrial Park, Ltd. and Eastern
News Distributors, Inc. This Memorandum of Lease Addendum is presented for
recording:

         1.       Name of lessor in lease: Milan Industrial Park, Ltd.

         2.       Name of lessee therein: Eastern News Distributors, Inc.

         3.       Addresses set forth in lease as addresses of lessor and
                  lessee:
                  Lessor: 250 West 55th St., Rm. 201, New York, NY 10011
                  Lessee: 12508 St. Rt. 250, Milan, OH 44846

         4.       Date of Lease: September 26, 1995

         5.       Date of Lease Addendum: 1 July, 1999

         6.       Description of leased premises as set forth in lease.

                             SEE ATTACHED EXHIBIT A

         7.       Term of the Addendum to lease: Seventy-eight months.

SIGNED AND ACKNOWLEDGED
IN THE PRESENCE OF:                                       LESSOR

                                                Milan Industrial Park, Ltd.

/s/ [ILLEGIBLE]                               By: /s/ Harry A. Perdue, Jr.
------------------------                          --------------------------
Witness                                           Harry A. Perdue, Jr.,
                                                  President
/s/ [ILLEGIBLE]
------------------------
Witness

                                                          LESSEE

                                              Eastern News Distributors, Inc.

/s/ [ILLEGIBLE]                               By: /s/ Donald Hawkins
------------------------                          --------------------------
Witness
                                                Its:________________________
/s/ [ILLEGIBLE]
------------------------
Witness

<PAGE>

STATE OF OHIO   )
                ) ss:
COUNTY OF ERIE  )

         Before me, a Notary Public, in and for said County and State,
personally appeared the above named Harry A. Perdue, Jr. who acknowledged
himself to the President of Milan Industrial Park, Ltd. and that he, as such
President being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the corporation by himself as
President.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1st, day of July, 1999.

                                                   /s/ Shelda L. Robbins
                                                   ---------------------
                                                   Notary Public

                                                       SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02

STATE OF OHIO   )
                ) ss:
COUNTY OF ERIE  )

         Before me, a Notary Public, in and for said County and State,
personally appeared the above named Donald Hawkins who acknowledged himself to
the Director of Eastern News Distributors, Inc. and that he, as such Director
being authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the corporation by himself as Eastern
News.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal at Sandusky, Ohio, this 1st day of July, 1999.

                                                   /s/ Shelda L. Robbins
                                                   ---------------------
                                                   Notary Public

                                                       SHELDA L. ROBBINS
                                                  Notary Public, State of Ohio
                                                  My Commission Expires 11/19/02

         This instrument was prepared by Robert M. Moore, MUEHLHAUSER & MOORE,
422 Columbus Avenue, P. O. Box 790, Sandusky, Ohio 44870.

                                       2

<PAGE>

SECOND ADDENDUM TO LEASE AGREEMENT EXECUTED SEPTEMBER 26, 1995 BETWEEN MILAN
INDUSTRIAL PARK AND EASTERN NEWS DISTRIBUTORS

         On the first day of July 1999, the MILAN INDUSTRIAL PARK, an Ohio
limited company, the LESSOR, and EASTERN NEWS DISTRIBUTORS, a division of HEARST
DISTRIBUTION GROUP, INC., the LESSEE, hereby amends the lease dated September
26, 1995, to provide as follows:

         WHEREAS, LESSOR agrees to install three (3) dock doors and relocate the
trash compactor at the leased premises; and

         WHEREAS, the LESSEE agrees to pay Five Hundred One and 93/100 Dollars
($501.93) per month to the LESSOR beginning on July 1, 1999, for seventy-eight
(78) months, which shall be in addition to the rent the LESSEE pays to LESSOR as
set forth in Article 2 of the September 26, 1995, lease.

         NOW THEREFORE, in consideration of the promises, mutual covenants, and
representations contained herein, the LESSOR and the LESSEE agree to the
above-captioned terms and conditions. Except as hereby amended, all terms,
conditions, and provisions of the September 26, 1995 lease shall remain in full
force and effect and the parties hereto ratify the same.

         IN WITNESS WHEREOF, the LESSEE and LESSOR have entered into this Second
Addendum to Lease Agreement as set forth on the date above.

                                     MILAN INDUSTRIAL PARK, LTD.

/s/ [ILLEGIBLE]                      By: /s/ Harry Perdue, Jr. President
----------------------                   -------------------------------
Witness                              Harry Perdue, Jr., President

/s/ [ILLEGIBLE]
----------------------
Witness

                                     EASTERN NEWS DISTRIBUTORS
                                     DIVISION OF HEARST DISTRIBUTION GROUP, INC.
/s/ [ILLEGIBLE]
----------------------
Witness                              By: /s/ Donald Hawkins
                                         -------------------------------

/s/ [ILLEGIBLE]
----------------------
Witness

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