Document:

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                AMENDMENT NO. 14 TO LOAN AND SECURITY AGREEMENT
                -----------------------------------------------

                            AM GENERAL CORPORATION
                            105 North Niles Avenue
                        South Bend, Indiana  46634-7025

                                                               December 21, 1999

Congress Financial Corporation
1133 Avenue of the Americas
New York, New York 10036

Gentlemen:

     Congress Financial Corporation ("Lender") and AM General Corporation
("Borrower") have entered into financing arrangements pursuant to which Lender
may make loans and advances and provide other financial accommodations to
Borrower as set forth in the Loan and Security Agreement, dated as of April 30,
1992, by and between Lender, Borrower, AM General Sales Corporation ("AM Sales")
and General Engine Products, Inc. ("General Engine"), as amended pursuant to
Amendment No. 1 to Loan and Security Agreement, dated July 10, 1992, Amendment
No. 2 to Loan and Security Agreement, dated October 27, 1992, Amendment No. 3 to
Loan and Security Agreement, dated September 15, 1993, Amendment No. 4 to Loan
and Security Agreement, dated November 16, 1994, Amendment No. 5 to Loan and
Security Agreement, dated December 14, 1994, Amendment No. 6 to Loan and
Security Agreement, dated February 23, 1995, Amendment No. 7 to Loan and
Security Agreement, dated April 25, 1995, Amendment No. 8 to Loan and Security
Agreement, dated April 27, 1995, Amendment No. 9 to Loan and Security Agreement,
dated June 26, 1996, Amendment No. 10 to Loan and Security Agreement, dated
August 22, 1996, Amendment No. 11 to Loan and Security Agreement, dated December
17, 1996, Amendment No. 12 to Loan and Security Agreement, dated March 14, 1997
and Amendment No. 13 to Loan and Security Agreement, dated as of October 30,
1998 (as the same may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement," and together with
all agreements, documents and instruments at any time executed and/or delivered
in connection therewith or related thereto, collectively, the "Financing
Agreements").
<PAGE>

     Borrower designs and manufactures High-Mobility Multipurpose Wheeled
Vehicles for sale to the U.S. and foreign military services (the "HUMVEE").
Borrower also designs and manufactures a commercial version of the HUMVEE under
the name, "HUMMER" (the "Current Vehicle").

     Borrower has advised Lender that it may acquire its current plant and
property located in Mishawaka, Indiana (the "Existing Facility") and enter into
mortgage financing for such acquisition secured by a lien on the Existing
Facility.

     Borrower is also entering into arrangements with General Motors
Corporation, a Delaware corporation ("GM"), pursuant to which GM will, at its
expense, design, engineer, certify and release a new generation vehicle based
upon an existing GM platform bearing the HUMMER trademark (the "New Vehicle")
and retain Borrower to assemble the New Vehicle. In connection with these
arrangements, GM will make a non-interest bearing, secured loan to Borrower in
the approximate amount set forth in Exhibit A hereto ("GM Loan"). Borrower will
use the proceeds of the GM Loan to finance: (i) the engineering and construction
of a new addition on to the Existing Facility (the "HUMMER Annex"); (ii) the
purchase of certain machinery and equipment for use in the production of the New
Vehicle and to be installed in the HUMMER Annex; and (iii) costs required for
Borrower to prepare to assemble the New Vehicles (except for the cost of the
time of Borrower's management and employees dedicated to the performance of the
activities contemplated by the GM Agreements (as such term is hereinafter
defined)). Borrower will repay the GM Loan with a portion of the fee it receives
from GM for the delivery by Borrower to GM of an assembled New Vehicle. At
certain times, GM has the option to convert all or part of the outstanding
balance of the GM Loan into capital stock of Borrower, subject to certain
limitations as set forth in the GM Equity Conversion Agreement (as hereinafter
defined). Borrower will also assign all of its right, title and interest to the
HUMMER Trademark (as hereinafter defined) to GM and GM will license such
trademark to Borrower for Borrower to continue to use in connection with the
manufacture and distribution of the Current Vehicle.

     Borrower has requested that Lender consent to: (i) the assignment by
Borrower to GM of the HUMMER Trademark pursuant to the GM Assignment, (ii) the
Indebtedness of Borrower to GM arising pursuant to the GM Loan, (iii) the grant
of a security interest in and lien upon the GM Collateral (as hereinafter
defined) by Borrower to GM to secure the GM Loan, (iv)  the release by Lender of
its liens on the HUMMER Trademark, (v) certain amendments to the Senior Note
Indenture required by the arrangements of Borrower with GM, (vi) the issuance of
additional shares of common stock by Borrower to GM pursuant to the GM Equity
Conversion Agreement, (vii) the grant by Borrower to GM of the right to use the
GM Collateral and the right to use or occupy certain assets of Borrower pursuant
to the GM Right of Access Agreement, (viii) the amendment to the Loan Agreement
with respect to the amount of Capital Expenditures permitted thereunder, (ix)
contract assembly work by Borrower, and (x) certain other amendments to the Loan
Agreement as set forth herein.

     1.     Definitions
            -----------

     1.1 Additional Definitions.  As used herein, the following terms shall have
         ----------------------
the respective meanings given to them below and the Loan Agreement shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:

         (1)  "Amendment No. 14" shall mean this Amendment No. 14 to the Loan
               ----------------
and Security Agreement by and among Borrower, AM Sales, General Engine and
Lender.

         (2)  "Current Vehicle" shall have the meaning set forth above.
               ---------------

         (3)  "Eligible HUMVEE Finished Goods Inventory" shall mean Inventory of
               ----------------------------------------
Borrower which is otherwise Eligible Inventory consisting of HUMVEES which are
first quality finished goods held for resale in the ordinary course of the
business of Borrower, which do not use or bear any of the HUMMER Trademarks.

                                      -6-
<PAGE>

         (4)  "Eligible HUMVEE Service Parts Inventory" shall mean engines,
               ---------------------------------------
transmissions, wheels, doors, tires, panels, and other components, parts,
appliances, accessories, accessions, attachments or other equipment to be
incorporated in, affixed or attached to, installed on or otherwise related to
the HUMVEES constituting current service parts, which do not use or bear any of
the HUMMER Trademarks.

         (5)  "Eligible HUMVEE Work-In-Process Inventory" shall mean engines,
               -----------------------------------------
transmissions, wheels, doors, tires, panels and other components, parts,
appliances, accessories, accessions, attachments or other equipment to be
incorporated in, affixed or attached to, installed on or otherwise related to
the HUMVEES constituting current work-in-process, which do not use or bear any
of the HUMMER Trademarks.

         (6)  "GM" shall mean General Motors Corporation, a Delaware
               --
corporation, and its successors and assigns.

         (7)  "GM Agreements" shall mean, collectively, the following (as the
               -------------
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced): (i) the GM Note, (ii) the GM Security Agreement,
(iii) the GM Right of Access Agreement, (iv) the GM Assignment, (v) the GM
Equity Conversion Agreement, (vi) the GM Assembly Agreement, (vii) the GM
License Agreement, and (viii) all agreements, documents and instruments executed
and/or delivered in connection therewith; the foregoing may sometimes be
referred to herein, individually, as a "GM Agreement".

         (8)  "GM Assembly Agreement" shall mean the New Vehicle Assembly
               ---------------------
Agreement, dated on or about the date hereof, by and between GM and Borrower, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

         (9)  "GM Assignment" shall mean the Assignment Agreement, dated on or
               -------------
about the date hereof, by and between Borrower, as assignor and GM, as assignee,
with respect to the HUMMER Trademark as the same now exists and may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

         (10) "GM Collateral" shall mean the equipment and the HUMMER Annex
               -------------
acquired by Borrower after the date hereof, with the proceeds of the GM Loan,
used in the production of the New Vehicles; provided, that, in no event shall
                                            --------  ----
the "GM Collateral" include: (i) any of the assets and properties of Borrower
existing as of the date hereof, (ii) any existing or hereafter arising or
acquired accounts receivable, chattel paper, documents, instruments, letters of
credit, deposit accounts, inventory or general intangibles of Borrower (other
than general intangibles relating specifically and directly to the equipment and
real property constituting the GM Collateral), and (iii) any amounts at any time
deposited in or received in the lockbox or blocked account established by
Borrower in connection with its financing arrangements with Lender for the
handling of collections of accounts or other assets and the remittance thereof
to Lender or any other amounts at any time paid to Lender in respect of the
obligations of Borrower to Lender.

         (11) "GM Equity Conversion Agreement" shall mean the Equity Conversion
               ------------------------------
Agreement, dated on or about the date hereof, by and between Borrower and GM, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

         (12) "GM Note" shall mean the Promissory Note, dated on or about the
               -------
date hereof, issued by Borrower payable to GM in the original principal amount
set forth in Exhibit A hereto as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

         (13) "GM Right of Access Agreement" shall mean the Right of Access
               ----------------------------
Agreement, dated on or about the date hereof, by and between Borrower and GM, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

                                      -7-
<PAGE>

         (14) "GM Security Agreement" shall mean the Security Agreement, dated
               ---------------------
on or about the date hereof, by Borrower in favor of GM with respect to the GM
Collateral, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

         (15) "HUMMER Annex" shall have the meaning set forth above.
               ------------

         (16) "HUMVEE" shall have the meaning set forth above.
               ------

         (17) "HUMMER Trademark" shall mean the trademarks, marks, words, names,
               ----------------
letters, numbers, symbols, emblems, shapes, designs, devices and trade dress, or
any combination thereof listed on Exhibit B hereto.

         (18) "New Vehicle" shall have the meaning set forth above.
               -----------

         (19) "Supplemental Senior Note Indenture" shall mean the Supplement to
               ----------------------------------
Indenture, dated on or about the date hereof, by and between Borrower and
Trustee.

     1.2 Amendment to Definition.
         -----------------------

         (1)  The term "Eligible Non-Hummer Part Inventory" shall be amended to
add the following on the end of that definition immediately before the period:

     "and HUMVEES."

         (2)  The term "Hummers" in the Loan Agreement shall be amended to add
the following clause on the end of such definition:

     ", excluding any HUMVEE vehicles (as each such term is defined in Amendment
     No. 14)."

         (3)  The term "Inventory" shall be amended to add the word ", HUMVEES"
after each time that the word "Hummer" appears in such definition.

     1.3 Interpretation.
         --------------

         (1)  For purposes of this Amendment, all terms used herein, including
but not limited to, those terms used and/or defined herein or in the recitals
hereto shall have the respective meanings assigned thereto in the Loan
Agreement.

         (2)  Until the execution and delivery of any GM Agreement, any
reference to such GM Agreement herein shall refer to the most recent draft of
such agreement provided by Borrower to Lender prior to the date hereof;
provided, that, in each case, to the extent such agreement contains any terms
--------  ----
which are different in any material respect (in the determination of Lender)
from such drafts (including any terms in such draft which have not been
completed as of the date of such draft), such new or different terms must be
acceptable to Lender. On and after the execution and delivery of such GM
Agreement, the delivery to Lender of a true, correct and complete copy thereof
and the appraisal by Lender of changed terms as described above, any reference
to such agreement shall be to the agreement as so executed and delivered.

     1.  Consents and Acknowledgment.
         ---------------------------

     1.4 Consents.  Subject to the satisfaction of each of the terms and
         --------
conditions contained herein, Lender hereby consents to the following:

                                      -8-
<PAGE>

         (1)  the assignment by Borrower to GM of the HUMMER Trademark pursuant
to the GM Assignment;

         (2)  the Indebtedness of Borrower to GM arising pursuant to the GM Loan
evidenced by the GM Note to the extent permitted under Section 6.3(r) of the
Loan Agreement;

         (3)  the grant of a security interest in, and lien upon, the GM
Collateral by Borrower to GM to secure the Indebtedness of Borrower to GM
arising pursuant to the GM Loan evidenced by GM Note;

         (4)  the amendments to the Senior Note Indenture pursuant to the
Supplemental Senior Note Indenture (as in effect on the date hereof);

         (5)  the issuance of additional shares of common stock of Borrower to
GM pursuant to the GM Equity Conversion Agreement;

         (6)  Indebtedness of Borrower to a financial institution up to
$5,500,000 to be incurred in connection with Borrower's acquisition of the
Existing Facility and the grant of a lien and security interest upon the
Existing Facility to such financial institution to secure such indebtedness;
provided, that, Borrower complies with the terms of Sections 4.7, 6.3(d) and
--------  ----
6.5(e) of the Loan Agreement;

         (7)  the Capital Expenditures by Borrower in connection with the
acquisition of the Existing Facility, construction of the HUMMER Annex and
otherwise under the GM Agreements as permitted pursuant to Section 3.4 hereof;
and

         (8)  contract assembly work by Borrower for GM pursuant to the GM
Agreements.

     1.5 Acknowledgments.
         ---------------

         (1)  The grant by Borrower to GM of the right to use the GM Collateral,
the Equipment, the Real Property and de minimus amounts of  consumable supplies
                                     -- -------
of Borrower which shall in no event constitute Eligible Inventory shall be
permitted under Section 4.7 of the Loan Agreement and the Lender acknowledges
that the requirements of Section 4.7 of the Loan Agreement have been satisfied
so long as (i) Lender shall have received true, correct and complete copies of
the GM Agreements, duly authorized, executed and delivered by GM and Borrower
and such agreement is in full force and effect and GM and Borrower have complied
with the terms thereof, and (ii) GM shall only have the right to use such
Equipment, Real Property and de minimus amounts of consumable supplies of
                             -- -------
Borrower to the extent that it is reasonably necessary for the production of New
Vehicles by GM after the occurrence of the events set forth in the GM Right of
Access Agreement which entitles GM to the right to use such assets.

         (2)  Subject to the terms of this Amendment No. 14, the performance by
Borrower of the GM Agreements shall be permitted under Section 6.11 of the Loan
Agreement.

     2. Amendments.
        ----------

     1.6 Loans.
         -----

         (1)  Section 2.1 (a) of the Loan Agreement is hereby amended and
restated as follows:

         "(a) Subject to, and upon the terms and conditions contained herein,
at Borrower's request, Lender shall, in its discretion, make Loans to Borrower,
in such amounts from time to time as Lender shall determine, in its discretion,
of up to:

                                      -9-
<PAGE>

               (1) ninety (90%) percent of the Net Amount of Eligible Accounts
                         (or such greater or lesser percentage thereof as Lender
                         may determine from time to time); plus

               (2) fifty (50%) percent of the value of Eligible HUMVEE Finished
                         Goods Inventory (or such greater or lesser percentage
                         thereof as Lender may determine from time to time);
                         plus

               (3) fifty (50%) percent of the value of Eligible HUMVEE Service
                         Parts Inventory (or such greater or lesser percentage
                         thereof as Lender may determine from time to time);
                         plus

               (4) twenty (20%) percent of the value of Eligible HUMVEE Work-in-
                         Process Inventory (or such greater or lesser percentage
                         thereof as Lender may determine from time to time);
                         plus

               (5) thirty-five (35%) percent of the value of Eligible Non-Hummer
                         Parts Inventory (or such greater or lesser percentage
                         thereof as Lender may determine from time to time)."

          (2) Section 2.1(d) of the Loan Agreement is hereby amended to delete
the reference to Sections 2.1(a)(ii), (iii), (iv), (v) and (vii) therein and
replace it with the following reference: "Sections 2.1 (ii), (iii), (iv) and
(v)".

     1.7 Indebtedness.
         ------------

         (1) Section 6.3 of the Loan Agreement is hereby amended to add the
following to the end of Section 6.3(d) of the Loan Agreement:

     ", except, that, Borrower may also incur Indebtedness to a financial
     institution in an amount not to exceed $5,500,000 in connection with the
     acquisition of the Existing Facility so long as Borrower complies with
     Sections 4.7 and 6.5 (e) of the Loan Agreement;"

         (a)   Section 6.3 of the Loan Agreement is hereby amended to add a new
Section 6.3(r) to the Loan Agreement:

     "(r) Indebtedness of Borrower to GM arising after the date hereof pursuant
     to loans in cash or immediately available funds by GM to Borrower as
     evidenced by the GM Note, provided, that, (i) such Indebtedness shall not
                               --------  ----
     bear any interest, (ii) such Indebtedness is, and shall only be secured by,
     the security interests and liens upon the GM Collateral as permitted under
     Section 6.5(k) hereof, (iii) the rights and remedies of GM arising in
     connection with or pursuant to the GM Loan are limited to recourse against
     the GM Collateral and Borrower does not have any personal liability to GM
     in respect of the obligations of Borrower to GM arising pursuant to the GM
     Loan (such that Borrower does not have any liability in the event of any
     deficiency for amounts owing to GM after GM has exercised its rights and
     remedies with respect to the GM Collateral), (iv) the terms and conditions
     of such Indebtedness shall be acceptable in all respects to Lender, (v) the
     proceeds of the loan giving rise to such Indebtedness shall be used for:
     (A) the engineering and construction of the HUMMER Annex, (B) the purchase
     of certain machinery and equipment for use in the production of the New
     Vehicle; and (C) costs required for Borrower to prepare to assemble the New
     Vehicles (except for the cost of the time of Borrower's management and
     employees dedicated to the performance of the activities contemplated by
     the GM Agreements), (vi) such Indebtedness shall not exceed approximately
     the amount set forth in Exhibit A hereto

                                     -10-
<PAGE>

     (less the aggregate amount of all repayments or repurchases of principal in
     respect thereof), (vii) Borrower shall not, directly or indirectly, make
     any payments with respect to such Indebtedness, including, but not limited
     to any prepayments or any non-mandatory payments, except that (A) GM may
                                                       ------ ----
     obtain payments in respect of such Indebtedness by offsetting against the
     assembly fee otherwise payable to Borrower pursuant to the terms of the GM
     Assembly Agreement in an amount equal to the aggregate principal amount of
     the GM Loan made to Borrower divided by the number of New Vehicles set
     forth in Exhibit A hereto for each New Vehicle delivered by Borrower to GM
     pursuant to the GM Assembly Agreement, and (B) Borrower may make
     prepayments in respect of the GM Note pursuant to the terms of the GM
     Equity Conversion Agreement so long as (1) as of the date of any such
     prepayment and after giving effect thereto, the Excess Availability shall
     not have been less than $10,000,000, and for each of the thirty (30)
     consecutive days immediately prior to any such prepayment, Excess
     Availability shall not be less than $10,000,000, (2) Lender shall have
     received not less that seven (7) days prior written notice of the intention
     of Borrower to make such prepayment, together with such information with
     respect thereto as Lender may request, and (3) as of the date of any such
     prepayment and after giving effect thereto, no Event of Default or act,
     condition or event which with notice or passage of time or both would
     constitute an Event of Default shall exist or have occurred, (viii)
     Borrower shall not, directly or indirectly, (A) amend, modify, alter or
     change any terms of such Indebtedness or any of the GM Agreements, or (B)
     redeem, retire, defease, purchase or otherwise acquire such Indebtedness,
     or set aside or otherwise deposit or invest any sums for such purpose, and
     (ix) Borrower shall furnish to Lender all notices or demands in connection
     with such Indebtedness either received by Borrower or on its behalf,
     promptly after the receipt thereof or sent by Borrower or on its behalf
     concurrently with the sending thereof, as the case may be."

     1.8 Limitations on Liens. Section 6.5 of the Loan Agreement is hereby
     --- --------------------
amended to add a new Section 6.5(j) as follows:

         "(j) the purchase money mortgages or other purchase money liens or
     security interests upon the GM Collateral in favor of GM pursuant to the GM
     Security Agreement to secure the Indebtedness of Borrower to GM permitted
     under Section 6.3(r) above."

     1.9 Sale of Assets, Consolidation, Merger, Dissolution, Etc.  Section 6.11
     --- -------------------------------------------------------
of the Loan Agreement is hereby amended to add the following clause to the end
of Section 6.11(b):

         "except, that, Borrower may assign the HUMMER Trademark to GM pursuant
          ------  ----
     to the GM Assignment (as in effect on the date of Amendment No. 14) and may
     issue stock to GM pursuant to the GM Equity Conversion Agreement,"

     2.1 Capital Expenditures. Section 6.14 of the Loan Agreement is hereby
         --------------------
amended to add the following clause to the end of Section 6.14(b) immediately
before the period:

         "provided, that, such limitation shall not apply to the Capital
          --------  ----
     Expenditures by Borrower (i) of up to $5,500,000 for the purpose of
     acquiring the Existing Facility, and (ii) made with the proceeds of the GM
     Loan utilized to construct the HUMMER Annex and for Capital Expenditures
     pursuant to Borrower's arrangements with GM under the GM Agreements."

     2.2 Properties in Good Condition.  Section 6.17 of the Loan Agreement is
         ----------------------------
hereby amended to add on the following clause to the end of the third sentence
of Section 6.17(b):

         "provided, that, Borrower may obtain certain parts and supplies on
          --------  ----
     consignment from GM needed for use in the assembly of the New Vehicles so
     long as such parts and supplies shall at all times be segregated and
     separately identifiable as consigned goods and in any report with respect
     to the Inventory

                                     -11-
<PAGE>

     delivered to Lender under Section 6.21(a)(v) hereof, such parts and
     supplies shall be separately and clearly identified."

     2.  Eligible Accounts.   Without limiting any right of Lender to determine
         -----------------
whether an Account is an Eligible Account or the amount of such Account which
may be an Eligible Account (including any Accounts which may be owing by GM to
Borrower), any Account payable by GM shall only be an Eligible Account to the
extent of the amount owing by GM to Borrower after reduction by the amount which
GM has the right to set off against such Account under the terms of the GM
Assembly Agreement in payment of amounts owing to GM under the GM Note or
otherwise, and shall constitute an Eligible Account so long as such Account
would other otherwise satisfy the requirements of the definition of Eligible
Accounts.

     3.  Collateral.
         ----------

     3.1 GM Collateral.  Notwithstanding anything to the contrary contained in
         -------------
Section 4 of the Loan Agreement, upon the satisfaction of each of the conditions
to the effectiveness of this Amendment No. 14, Lender hereby agrees that the
Collateral shall not include the GM Collateral.

     3.2 Release of HUMMER Trademark.  Upon the satisfaction of each of the
         ---------------------------
conditions to the effectiveness of this Amendment No. 14, Lender shall at
Borrower's cost and expense release its security interest in and lien upon the
HUMMER Trademark (identified in Exhibit B hereto) to the extent such assets have
been validly transferred and assigned to GM pursuant to the GM Assignment.

     3.  Representations, Warranties and Covenants.   In addition to the
         ------------------------------------------
continuing representations, warranties and covenants at any time made by
Borrower to Lender pursuant to the other Financing Agreements, Borrower hereby
represents, warrants and covenants with and to the Lender as follows (which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof and shall be incorporated into and made a part of
the Financing Agreements):

     3.3 GM Agreements.
         -------------

         (1) The latest drafts of the GM Agreements have been delivered to
Lender and have been annexed hereto as Exhibit C and the final form of such
agreements shall be the same as such drafts or shall contain such new or
different terms as Lender may otherwise specifically agree pursuant to Section
1.3(b) of this Amendment No. 14.

         (2) Borrower has received all necessary consents and approvals of third
parties, to the transactions contemplated by the GM Agreements including, the
Trustee and the holders of the Senior Notes.

         (3) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the GM Agreements and no governmental or other action
or proceeding has been threatened or commenced, seeking any injunction,
restraining order or other order which seeks to void or otherwise modify the
transactions described in the GM Agreements.

         (4) None of the Collateral shall be located in the HUMMER Annex except,
                                                                         ------
that, a total of eighteen (18) Hummers, at any one time, may be located therein
----
while such vehicles are in the process of being painted.

         (5) The only assets of Borrower which may be subject to the GM Right of
Access Agreement are the assets which constitute the GM Collateral and certain
of the Equipment, Real Property and de minimus amounts of consumable supplies of
                                    -- -------
Borrower which shall in no event constitute Eligible Inventory; provided, that,
                                                                --------- ----
(i)  GM shall only have the right to use any of such Equipment, Real Property
and de minimus amounts of consumable supplies of Borrower to the extent that it
    -- -------
is reasonably necessary for the production of New Vehicles by GM after the
occurrence of the events set forth in the GM Right of Access Agreement which
entitle GM to the right to use such assets, (ii) the use thereof by GM does not
impair, hinder, delay or interfere with the ability of Borrower, Lender or its
designees to manufacture, distribute, produce,  sell or otherwise deal with any
of the Collateral or of

                                     -12-
<PAGE>

Lender to sell or otherwise realize on the Collateral, and (iii) such Equipment
or Real Property is not then being used by Borrower, Lender or on its behalf or
anticipated to be used by Borrower, Lender or on its behalf shortly thereafter
in the manufacture, distribution, production, sale of, or to otherwise deal
with, any of the Collateral.

         (6) The proceeds of the GM Loan are and shall be sufficient for the
construction of the HUMMER Annex and the purchase of the machinery and equipment
required for the assembly of the New Vehicle by Borrower in accordance with the
terms of the GM Agreements.  Borrower shall have good and marketable title to
all assets purchased with the proceeds of the GM Loan and otherwise relating to
the HUMMER Annex.  GM shall provide Borrower with all of the parts and supplies
(except for de minimus amounts of consumable supplies) needed for the assembly
            -- -------
of the New Vehicle.  All of such parts and direct materials shall at all times
be segregated and separately identifiable as assets of GM.  In no event shall
any report with respect to the Inventory include any such parts, supplies or de
                                                                             --
minimus amounts of consumable supplies, except to the extent separately and
-------
clearly identified.

         (7) Within thirty (30) days after the end of each month, Borrower shall
deliver a report to Lender setting forth the outstanding balance of the GM Loan.

     3.4 Supplemental Senior Note Indenture.  Borrower has received all consents
         ----------------------------------
required in order for the Supplemental Senior Note Indenture to be binding and
enforceable with respect to the Trustee and each of the holders of the Senior
Notes which consents are valid and in full force and effect.

     3.5 No Default.  No Event of Default exists on the date of Amendment No. 14
         ----------
immediately after giving effect to the amendments to the Loan Agreement made by
the provisions of Amendment No. 14.

     3.6 Corporate Power and Authority.  This Amendment has been duly executed
         -----------------------------
and delivered by Borrower, AM Sales and General Engine and is in full force and
effect as of the date of Amendment No. 14 and the agreements and obligations of
Borrower contained herein constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms.

     3.7 Additional Items to be Delivered.
         --------------------------------

         (1) Borrower hereby agrees that, in addition to all other terms,
conditions and provisions set forth in the other Financing Agreements, Borrower
shall deliver or cause to be delivered to Lender, the following items, each in
form and substance satisfactory to Lender, as soon as possible, but in any
event, by no later than January 1, 2000:

          (i) true, correct and complete copies of all of the GM Agreements,
each duly authorized, executed and delivered by GM and Borrower and evidence
that the transactions to be performed by the date of such delivery under each of
the GM Agreements have been performed in accordance with the terms thereof in
all respects, including the fulfillment (not merely the waiver, except as have
been disclosed to Lender and consented to in writing by Lender) of all
conditions precedent set forth therein; and

          (ii) evidence that all actions and proceedings required to be
performed by the date of such delivery under the GM Agreements, applicable law
or regulation have been taken and the transactions contemplated thereunder have
been duly and validly consummated.

     4.  Conditions Precedent.  The effectiveness of the consents, waivers and
         --------------------
other terms and conditions contained herein shall be subject to the receipt by
Lender of each of the following, in form and substance satisfactory to Lender:

     4.1 true, correct and complete copies of the Supplemental Senior Note
Indenture and all related agreements, duly authorized, executed and delivered by
Borrower, Trustee and any other party required for the effectiveness thereof;
and

                                     -13-
<PAGE>

     4.2 an original of Amendment No. 14, duly authorized, executed and
delivered by Borrower, AM Sales and General Engine.

     4.  Additional Events of Default.  The parties hereto acknowledge, confirm
         ----------------------------
and agree that the failure of Borrower to comply with the covenants, conditions
and agreements contained herein shall constitute an Event of Default under the
Financing Agreements (subject to the applicable cure period, if any, with
respect thereto provided for in the Loan Agreement as in effect on the date
hereof).  In addition, any default by Borrower or GM under any of the GM
Agreements (subject to any applicable cure period set forth therein) or the
termination of any of the GM Agreements, shall constitute an Event of Default
under the Financing Agreements, except as Lender may otherwise agree.

     5.  Effect of this Amendment.  Except as modified pursuant hereto, no other
         ------------------------
waivers, changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of
effective date hereof.  Any acknowledgment or consent contained herein shall not
be construed to constitute a consent to any other or further action by Borrower
or to entitle Borrower to any other consent.  The Loan Agreement and this
Amendment shall be read and construed as one agreement.  To the extent of
conflict between the terms of this Amendment and the other Financing Agreements,
the terms of this Amendment shall control.

     6.  Further Assurances.  The parties hereto shall execute and deliver such
         ------------------
additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment.

     7.  Governing Law.  The rights and obligations hereunder of each of the
         -------------
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.

     8.  Binding Agreement.  Without limiting any other provision in this
         -----------------
Agreement, this agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                     -14-
<PAGE>

     9.  Counterparts.  This letter agreement may be executed in counterparts,
         ------------
but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this letter agreement, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties thereto.

                              Very truly yours,

                              AM GENERAL CORPORATION

                              By:     /s/ Paul Cafiero
                                 ---------------------

                              Title: Vice President & Chief Financial Officer
                                     ----------------------------------------

ACKNOWLEDGED AND AGREED

AM GENERAL SALES CORPORATION

By:       /s/ Paul Cafiero
     ---------------------

Title:  Vice President & Chief Financial Officer
        ----------------------------------------

GENERAL ENGINE PRODUCTS, INC.

By:       /s/ Paul Cafiero
     ---------------------

Title:   Vice President & Chief Financial Officer
        -----------------------------------------

AGREED:

CONGRESS FINANCIAL CORPORATION

By:   /s/ Janet Last
    ----------------

Title:   First Vice President
       ----------------------

                                     -15-<PAGE>

                                LEASE AGREEMENT

     THIS LEASE AGREEMENT, is dated effective as of June 30, 1999, by and
between AMLAND PROPERTIES, INC., a Delaware corporation ("Landlord"), and AM
GENERAL CORPORATION, a Delaware corporation ("Tenant").

                             W I T N E S S E T H:

          Subject to the terms, provisions, and conditions of this Lease, and
each in consideration of the duties, covenants, and obligations of the other
hereunder. Landlord does hereby lease, demise, and let unto Tenant and Tenant
does hereby lease from Landlord the Premises (as hereinafter defined).

                                   ARTICLE 1
                                  DEFINITIONS
                                  -----------

          1.1  Definitions. For purposes of this Lease, the following terms
               -----------
shall have the meanings respectively indicated:

          "Building" means that certain structure(s) containing approximately
415,000 (which figure the parties agree to use whether the same be more or less
in actuality) square feet of gross outside area of office, manufacturing and/or
warehouse space and the associated parking lots and infrastructure serving same,
constructed upon the Site. The Building is known as 13200 McKinley Avenue, South
Bend, Indiana.

          "Premises" means the Building and the Site.

          "Site" means that certain tract or parcel of real property lying and
being situated in St. Joseph County, Indiana, which land consists of
approximately 56 acres of land and is generally described in Exhibit "A"
attached hereto and incorporated herein for all purposes, and all right, title,
and interest of the Landlord, if any, in and to any land lying in the bed of any
street, road or avenue, open or proposed, in front of or adjoining the land and
in and to the easements, franchises, rights, appendages and appurtenances
including, without limitation, any side track agreements, belonging or
appertaining to the land.

                                   ARTICLE 2
                                     TERM
                                     ----

          Subject to and upon the terms and conditions set forth herein, or in
any exhibit or addendum hereto, this Lease shall continue in force for a term
(the "Term") of sixty (60) months, commencing October 1, 1999, and expiring on
September 30, 2004.

                                   ARTICLE 3
                                     RENT
                                     ----

          3.1  Rent. The total rental payable by Tenant for the term of this
               ----
Lease shall be Three Million Nine Hundred Forty-Two Thousand Five Hundred and
No/100ths Dollars ($3,942,500.00), payable in monthly installments ("Monthly
Rent") on the 1st day of each month throughout the Term, in advance, commencing
on October 1, 1999, as follows:

Dates                  Monthly Amount        Annual Rent       Amount for Period
-----                  --------------        -----------       -----------------

10/1/99 - 9/30/01      $60,520.83            $726,250.00       $1,452,500.00

9/30/01 - 10/1/04      $69,166.67            $830,000.00       $2,490,000.00

          3.2  Late Charge. In the event that Tenant shall fail to pay any
               -----------
installment of Monthly Rent within five (5) business days after the date on
which such installment is due, or Additional Rent within five (5) business days
after accrual thereof or billing thereof, there shall be added to such unpaid

                                       1
<PAGE>

amount a late charge of three percent (3%) of the installment or amount due in
order to compensate Landlord for the extra administrative expenses incurred.
After thirty (30) days have elapsed from the date of accrual or billing of any
Monthly Rent or Additional Rent, the total amount then due, including any late
charge, shall bear interest at the rate of eighteen percent (18%) per annum,
until paid. Such late fees and interest shall be in addition and without
limitation to any and all other rights and remedies which may be available to
Landlord under this Lease, at law or in equity, and all such rights and remedies
shall be cumulative and may be exercised concurrently, in any order or not
exercised without waiving such rights and remedies by Landlord in its sole
discretion.

     3.3  Additional Rent. All sums, liabilities, obligations, and other amounts
          ---------------
which Tenant is required to pay or discharge pursuant of this Lease (including,
without limitation, those set forth in Articles 7, 8 and 10, below) in addition
to Monthly Rent or as a result of Landlord's curing an event of default pursuant
to Section 18.2 of this Lease, together with any interest, penalty, or other sum
which may be added for late payment thereof, shall constitute additional rent
hereunder ("Additional Rent"). Except as specifically provided in this Lease,
Additional Rent shall be paid without abatement, deduction or set off of any
kind, it being the intention of the parties that, to the full extent permitted
by law, Tenant's covenant to pay Additional Rent shall be independent of all
other covenants contained in this Lease, including Tenant's continued occupancy
of the Premises. In the event of any failure on the part of Tenant to pay or
discharge any of the foregoing, Landlord shall have all rights, powers, and
remedies provided for herein or by law or equity or otherwise in the case of
nonpayment of rent.

                                   ARTICLE 4
                            LEASEHOLD IMPROVEMENTS
                            ----------------------

     Tenant is in possession of the Premises, and Tenant (a) accepts the
Premises as suitable for the purpose for which they are leased; (b) accepts the
Building and every part and appurtenance thereof as being in a good and
satisfactory condition; (c) accepts the Premises in its present condition "as
is"; and (d) waives any defects in the Premises. Landlord has not made any
representation or warranty, express or implied, to Tenant with respect to the
Building or the Site. Tenant agrees to make all changes in the Building or Site
required by any public agency to comply with an applicable law or ordinance,
including, but not limited to, compliance with all local subdivision ordinances
applicable to the Site. This Lease does not cover any movable personal property
leased by Tenant from third persons.

                                   ARTICLE 5
                                NON-TERMINATION
                                ---------------

     This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease or to be released, relieved, or discharged from any
obligations or liabilities hereunder for any of the following reasons:

     (a)  The inadequacy, incorrectness, or failure of the description of the
Premises or any portion thereof; and

     (b)  Any bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, or other proceeding affecting Landlord or any assignee
of Landlord.

Except as expressly provided in-this Lease, Tenant waives all rights now or
hereafter conferred by law (i) to any abatement, suspension, deferment,
diminution, or reduction of rent or other amounts payable by Tenant hereunder or
(ii) to terminate this Lease.

                                   ARTICLE 6
                                      USE
                                      ---

     6.1  Prescribed Use. Tenant shall use the Premises solely for any office,
          --------------
manufacturing and/or warehouse facility or for any other use approved by
Landlord in writing.

                                       2

<PAGE>

     6.2   Nuisance. Excepting existing uses, Tenant shall not commit or suffer
           --------
to be committed upon the Premises any nuisance or thing which may disturb the
quiet enjoyment of any other person or business within a reasonable distance
from the Premises.

     6.3   Laws, etc. Tenant shall, at Tenant's sole cost and expense, comply
           ---------
in all material respects with all laws, ordinances, orders, rules, and
regulations promulgated by all federal, state, county, and municipal bodies and
agencies having jurisdiction (including, without limitation, the Americans with
Disabilities Act), which laws, ordinances, orders, rules, and regulations relate
to the business of Tenant and the effect of that business on the use, condition,
structure, or occupancy of the Premises; and Tenant shall install, remove, or
alter such of Tenant's fixtures, equipment, and facilities in the Premises and
obtain all licenses and permits as may be necessary to so comply. From time-to-
time, Tenant shall furnish to Landlord such evidence as Landlord may reasonably
require to the effect that the Site and the use thereof by Tenant is in
compliance with Ordinance No. APC 317-82 of the St. Joseph County Code, as
amended, or any applicable successor statute.

     6.4   Dangerous Goods and Activities. Tenant hereby agrees not to engage in
           ------------------------------
any activity, or store upon the Premises any goods and equipment which would
render the fire and extended coverage insurance described in Article 10 hereof
void or which would increase the premiums of same unless Tenant reimburses
Landlord the amount of the increase in the premium.

     6.5   Hazardous Materials. In addition and without limitation to the terms
           -------------------
and conditions of Sections 6.1 through 6.4, above, Tenant covenants and agrees
that it shall not cause or permit any Hazardous Material (as defined below) to
be brought upon, kept, or used in or about the Premises or Building by Tenant,
its agents, employees, contractors or invitees. The foregoing covenant shall not
extend to substances typically found or used in Tenant's general office,
manufacturing and/or warehouse applications so long as (i) such substances and
any equipment which generates such substances are maintained only in such
quantities as are reasonably necessary for Tenant's operations in the Premises,
(ii) such substances are used strictly in accordance with the manufacturers'
instructions therefor, (iii) such substances are not disposed of in or about the
Building in a manner which would constitute a release or discharge thereof, and
(iv) all such substances and any equipment which generates such substances are
removed from the Building by Tenant upon the expiration or earlier termination
of this Lease. Any use, storage, generation, disposal, release or discharge by
Tenant of Hazardous Materials in or about the Building as is permitted pursuant
to this Paragraph shall be carried out in compliance in all material respects
with all applicable federal, state and local laws, ordinances, rules and
regulations. Tenant shall, annually within thirty (30) days after Tenant's
receipt of Landlord's written request therefor, provide to Landlord a written
certification by Tenant stating, in substance, that neither Tenant nor, to the
best of its knowledge, any person for whom Tenant is responsible has released or
discharged any Hazardous Materials in or about the Building other than in
compliance with all applicable federal, state and local laws, ordinances, rules
and regulations.

     In the event that Tenant proposes to conduct any use or to operate any
equipment which will or may utilize or generate a Hazardous Material other than
as specified in the first paragraph of this subsection 6.5, Tenant shall first
in writing submit such use or equipment to Landlord for approval, which approval
will not be unreasonably withheld. No approval by Landlord shall relieve Tenant
of any obligation of Tenant pursuant to this subsection, including the removal,
clean-up and indemnification obligations imposed upon Tenant by this subsection.
Tenant shall, within five (5) days after receipt thereof, furnish to Landlord
copies of all notices or other communications received by Tenant with respect to
any actual or alleged release or discharge of any Hazardous Material in or about
the Premises or the Building and shall, whether or not Tenant receives any such
notice or communication, notify Landlord in writing of any reportable discharge
or release of Hazardous Material by Tenant or anyone for whom Tenant is
responsible in or about the Premises or the Building. In the event that Tenant
is required to maintain any Hazardous Materials license or permit in connection
with any use conducted by Tenant or any equipment operated by Tenant in the
Premises, copies of each such license or permit, each renewal or revocation
thereof and any communication relating to suspension, renewal or revocation
thereof shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant. Compliance by Tenant with the two immediately preceding
sentences shall not relieve Tenant of any other obligation of Tenant pursuant
to this subsection.

                                       3
<PAGE>

     Upon any violation of the foregoing covenants, Tenant shall be obligated,
at Tenant's sole cost, to clean-up the subject released or discharged Hazardous
Materials introduced into the Building by Tenant or any person or entity for
whom Tenant is responsible. Such clean-up and removal shall include all testing
and investigation required by any governmental authorities having jurisdiction
and preparation and implementation of any remedial action plan required by any
governmental authorities having jurisdiction. All such clean-up and removal
activities of Tenant shall, in each instance, be conducted to the reasonable
satisfaction of Landlord and the satisfaction of all governmental authorities
having jurisdiction. Landlord's right of entry pursuant to Article 16 above
shall include the right to enter and inspect the Premises for violations of
Tenant's covenants herein.

     Tenant shall indemnify, defend and hold harmless Landlord and Landlord's
Related Parties from and against any and all claims, liabilities, losses,
actions, costs and expenses (including attorney's fees and costs of defense)
incurred by such indemnified persons, or any of them, as the result of (i) the
introduction into or about the Building by Tenant or anyone for whom Tenant is
responsible of any Hazardous Materials, (ii) the usage, storage, maintenance,
generation, disposition or disposal by Tenant or anyone for whom Tenant is
responsible of Hazardous Materials in or about the Building, (iii) the discharge
or release in or about the Building by Tenant or anyone for whom Tenant is
responsible of any Hazardous Materials, (iv) any injury to or death of persons
or damage to or destruction of property resulting from the use, introduction,
maintenance, storage, generation, disposal, disposition, release or discharge by
Tenant or anyone for whom Tenant is responsible of Hazardous Materials in or
about the Building, and (v) any failure of Tenant or anyone for whom Tenant is
responsible to observe the foregoing covenants of this subsection.

     Upon Tenant's failure to clean up any subject released or discharged
Hazardous Materials, Landlord shall be entitled to exercise all remedies
available to a landlord against a defaulting tenant, including but not limited
to those specifically set forth in this Lease. Without limiting the generality
of the foregoing, Tenant expressly agrees that upon any such violation Landlord
may, at its option, immediately terminate this Lease. No action by Landlord
hereunder shall impair the obligations of Tenant pursuant to this subsection.

     As used in this subsection, "Hazardous Materials" is used in its broadest
sense and shall include any petroleum based products, pesticides, paints and
solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium
compounds and other chemical products and any substance or material defined or
designated as hazardous or toxic, or other similar term, by any federal, state
or local environmental statute, regulation, or ordinance affecting the Premises
or Building presently in effect or that may be promulgated during the term,
including any extended term of this Lease, as such statutes, regulations and
ordinances may be amended from time to time, including but not limited to the
following statutes: Resource Conservation and Recovery Act of 1976, 42 U.S.C.
(S) 6901 et seq.; Comprehensive Environmental Response, Compensation, and
         -------
Liability Act of 1980, 42 U.S.C. (S) 9601 et seq.; Clean Air Act, 42 U.S.C.
                                          -------
(S)(S) 7401-7626; Water Pollution Control Act (Clean Water Act of 1977), 33
U.S.C. (S) 1251 et seq.; Insecticide, Fungicide, and Rodenticide Act (Pesticide
                -------
Act of 1987), 7 U.S.C. (S) 135 et seq.; Toxic Substances Control Act, 15 U.S.C.
                              -------
(S) 2601 et seq.; Safe Drinking Water Act, 42 U.S.C. (S) 300(f) et seq.;
         -------                                                -------
National Environmental Policy Act (NEPA) 42 U.S.C. (S) 4321 et seq.; Refuse Act
                                                            -------
of 1899, 33 U.S.C. (S) 407 et seq.; Tenant acknowledges that incorporation of
                           -------
any material containing asbestos into the Building is absolutely prohibited.
Tenant agrees, represents and warrants that it shall not incorporate or permit
or suffer to be incorporated, knowingly or unknowingly, any material containing
asbestos into the Premises.

                                   ARTICLE 7
                                   NET LEASE
                                   ---------

     It is the intention of Landlord and Tenant that rental shall be absolutely
net to Landlord; that all costs, expenses, and obligations of every kind
relating directly or indirectly in any way, foreseen and unforseen, to Tenant's
use, occupancy, and possession of the Premises, which may arise or become due
during the Term hereof shall be paid by Tenant (except those costs, expenses,
and obligation expressly provided in this Lease as being the obligations of
Landlord); and that Landlord shall be indemnified by Tenant against all such
costs, expenses, and obligations. Such net rental shall be paid without
abatement, diminution, reduction, deduction, or set off. The terms and
conditions of this Article 7, along with the terms and conditions of any and all
other provisions of this Lease

                                       4
<PAGE>

relating to the payment of money by Tenant to Landlord or the indemnification by
Tenant of Landlord, shall survive the expiration or sooner termination of this
Lease.

                                   ARTICLE 8
                      IMPOSITION, UTILITIES, MAINTENANCE
                      ----------------------------------

     8.1   Impositions.
           -----------

           (a) Tenant shall pay all real estate taxes, assessments for local
improvements, water, and storm and sanitary sewer rates and charges, licenses
and permit fees, personal property taxes, other taxes, and governmental levies
and charges, general and special, ordinary and extraordinary, unforeseen as well
as foreseen, of any kind and nature whatsoever which are assessed, levied,
confirmed, imposed, or become a lien upon the Premises, or become payable during
the Term of this Lease or any renewal or extension thereof (the "Impositions"),
payment thereof to be made before any fine, penalty, interest, or cost may be
added thereto for the nonpayment thereof; provided, however, that if by law any
Imposition is payable, or may at the option of the taxpayer be paid, in
installments, whether or not interest shall accrue on the unpaid balance of such
Imposition, Tenant may pay the same (and any accrued interest on the unpaid
balance of such Imposition) in installments as the same respectively become due
and payable and before any fine, penalty, interest, or cost may be added thereto
for the nonpayment of any such installment and interest; and provided, further,
that any Imposition relating to a fiscal period of the taxing authority a
portion of which is included within the Term and a portion of which is included
in a period of time prior to commencement date hereof or after the expiration of
the Term or any extensions thereof (for reasons other than Tenant's default
hereunder) shall be adjusted between Landlord and Tenant as of the commencement
date hereof or such expiration date. Forty-five (45) days prior to the
expiration of the Term, Landlord shall bill Tenant for its pro rata share of the
Impositions based upon the overlap of the last year of the Lease and the fiscal
period of the taxing authorities, as reasonably estimated by Landlord, which
shall not be subject to re-adjustment. Such pro rata billing shall be based upon
the Impositions for the previous fiscal year. Tenant shall pay each such pro
rata billing to Landlord within thirty (30) days of receipt thereof; provided,
however, that if the Impositions for the last fiscal year of the taxing
authorities into which the Term extends shall vary from those of the previous
fiscal year, Tenant and Landlord shall make a final adjustment at the end of the
last such fiscal year based upon the Impositions actually paid by Landlord, and
any such liability of Landlord or Tenant for any such adjustment shall
specifically survive the termination of this Lease.

           (b) Nothing hereinabove contained shall require Tenant to pay sums
owing under Landlord's mortgage or mortgages, any franchise, estate,
inheritance, succession, capital levy, stamp levy, stamp tax, or transfer of
Landlord or any income, excess profits, or revenue tax, or any other tax,
assessment, charge, or levy based on or measured by the gross income or capital
stock of Landlord or upon the net rental payable by Tenant under this Lease;
provided, however, that if at any time during the Term of this Lease an
occupation or excise tax on rents is levied or assessed against Landlord or the
net rental, as a substitution in whole or in part for taxes assessed or imposed
on the Premises, the same shall be deemed to be included within the term
"Impositions" as hereinabove defined and Tenant shall pay and discharge the same
in accordance with the provisions of this subsection in respect to the payment
of Impositions. Landlord covenants to forward promptly to Tenant any and all
notices or statements relating to taxes, assessments, fees, water, sewer, or
other rent, rate or charge, excise, levy, license fee, permit fee, inspection
fee, or other authorization fee and Landlord shall indemnify Tenant (without
hereby implying any rights of abatement, diminution, reduction, deduction, or
setoff), upon notice from Tenant, for penalty, late charge, delinquency charge,
or damages incurred by Tenant due to failure of Landlord to so forward said
notice or statement. Tenant shall furnish to Landlord, within thirty (30) days
after the date when any Imposition is due, official receipts of the appropriate
taxing authority or other evidence satisfactory to Landlord evidencing payment
thereof. The certificate, advice, or bill of nonpayment of any Imposition from
the appropriate official designated by law to make or issue the same or to
receive payment of any Imposition shall be prima facie evidence that such
Imposition is due and unpaid at the time of the making or issuance of such
certificate, advice, or bill of nonpayment.

                                       5

<PAGE>

          (a) In the event that Tenant shall contest the collection or
assessment of any tax, assessment, fee, water or sewer charge or rate, excise,
or levy by legal proceedings or other appropriate action, then Tenant shall,
prior to the prosecution or defense of any such claim, notify Landlord in
writing of its decision to contest such, and on written demand by Landlord shall
make a sufficient deposit of funds with an escrow agent designated by Landlord
in such written demand or provide a surety bond in amount sufficient to cover
the total contested amount plus penalties and interest thereon less any sum
previously paid into court or paid to the charging entity or provide such
security as may be required by the holder of the first-lien deed of trust with
respect to the Premises. Such deposit shall remain with the escrow agent until
such contest is concluded by final judgment or is otherwise satisfied;
provided, however, that in the event that Landlord reasonably deems itself in
danger of losing its interest in the Premises because of action by the taxing
authority prior to the conclusion of the contest, the funds shall be released
immediately without the necessity of further authorization from Tenant. If it be
determined that Tenant is liable for any such payment, the funds shall be paid
to the extent of such payment to the charging entity, together with interest and
penalties due thereon, if any, and the balance, if any, shall be returned to
Tenant. In the event that the amount of such deposit is insufficient to make
such payment, together with interest and penalties due thereon, after such final
judgment, the deficit shall be paid by Tenant; provided, however, that Landlord
may, at its option, pay such deficiency and the amount so paid shall be due
immediately from Tenant as Additional Rent hereunder. If, however, Tenant
prevails in its contest, such funds shall be returned to Tenant.

          (d) As an inducement to Landlord to enter into this Lease, Tenant has
 agreed to, and does hereby, indemnify and save harmless Landlord, it successors
 and assigns from and against any and all taxes pursuant to the Indiana Gross
 Income Tax Act of 1933, as amended, or similar law, arising out of or in
 connection with any transactions, transfers, or assignments of the Site or any
 ownership interest in any corporation, partnership, trust, or other entity that
 has ever owned the Site, which transaction, transfer or assignment occurred on
 or before the effective date of this Lease.

     8.2 Utilities. Tenant shall be responsible for and promptly pay all charges
         ---------
incurred for all utility services to the Premises, including, but not limited
to, telephone service, sanitary sewer, water, natural gas, and electricity
arising out of Tenant's use, occupancy, and possession of the Premises. Tenant
shall also provide all replacement light bulbs and tubes and pay for all
maintenance upon utilities. In no event shall Landlord be liable for any
interruption or failure of utility service to the Premises. Notwithstanding
anything to the contrary above, in the event any utility service furnished to
the Premises shall be interrupted solely by reason of the grossly negligent or
willful act of Landlord or its agents; then in addition to any other rights and
remedies available to Tenant under this Lease or under law and provided further
that such service is not restored within forty-eight (48) hours following such
failure or inability (which period shall not be extended by force majeure),
Tenant shall be entitled to an abatement of rent for each day thereafter that
such service is not furnished until the date that such service is restored.

     8.3 Maintenance, Repairs. Subject to the provisions of Article 21, below,
         --------------------
relating to destruction of or damage to the Premises, Tenant agrees that at its
own expense it will keep and maintain the Premises, including, without limiting
the generality of the foregoing, the roof, exterior, foundation, structural, and
operational parts, paving, and landscaping, in a condition and repair similar to
its condition and repair on the commencement date hereof, reasonable wear and
tear excepted and subject to and excluding any alterations, improvements,
modifications, or additions made by Tenant pursuant to Article 11. Tenant shall
also pay all costs of maintaining railroad spur tracks, if any, serving the
Premises. Tenant shall be responsible for disposal of its trash from the
Building. Replacement and repair parts, materials, and equipment shall be of
quality equivalent to those initially installed within the Premises and repair
and maintenance work shall be done in accordance with the then existing federal,
state, and local laws, regulations, and ordinances pertaining thereto. Upon any
termination of this Lease, Tenant shall surrender the Premises in a condition
and repair similar to its condition and repair on the commencement date hereof,
reasonable wear and tear excepted and subject to and excluding any alterations,
improvements, modifications, or additions made by Tenant pursuant to Article 11,
and shall surrender all keys for the Premises to Landlord at the place then
fixed for the payment of rent.

                                       6

<PAGE>

                                   ARTICLE 9
                 RELEASE; INDEMNIFICATION; LIMITS ON LIABILITY
                 ---------------------------------------------

     9.1  Release. Tenant hereby waives any and all claims against Landlord, its
          -------
beneficiaries, mortgagees, stockholders, agents (including, without limitation,
management agents), partners, officers, servants and employees, and their
respective agents, partners, officers, servants and employees ("Related
Parties") for injury to persons, damage to property or to any other interest of
Tenant sustained by Tenant or any person claiming through Tenant resulting from
any occurrence in or upon the Premises or Building, or surrounding areas,
including, but not limited to, such claims for damages resulting from: (a) any
equipment or appurtenances becoming out of repair; (b) the Premises being
out of repair; (c) injury or damage done or occasioned by wind, water, flooding,
freezing, fire, explosion, earthquake, excessive heat or cold, vandalism, riot
or disorder or other casualty; (d) any defect in or failure of plumbing, heating
or air conditioning equipment, electric wiring or installation thereof, gas,
water, steam pipes, stairs, railings or walls; (e) broken glass; (f) the backing
up of any sewer pipe or down spout; (g) the bursting, leaking or running of any
tank, tub, washstand, water closet, water pipe, drain, cooling coil or any
other pipe or tank in, upon or about the Premises; (h) the escape of steam or
hot water; (i) water, snow or ice being upon or coming through the roof,
skylight, trapdoor, stairs, walks or any other place upon or near the Premises
or otherwise; (j) the falling of any fixture, plaster or stucco; (k) any act,
omission, or negligence of co-tenants or of other persons or occupants of said
building or of adjoining or contiguous buildings or of owners of adjacent or
contiguous property and/or (i) accidents. Except as waived pursuant to Section
10.1 of this Lease, Tenant has not and does not waive any claims, actions,
losses, damages, or expenses suffered by Tenant which are (1) caused in whole or
in part by Landlord's failure to perform its covenants and obligations under
this Lease or (2) caused wholly or in a material part by the negligent act or
omission of Landlord, its agents, employees, contractors, or invitees; provided,
however, that the provisions of Section 10.1 of this Lease shall, to the extent
contrary to the provisions of this sentence, control and supersede.

     9.2  Indemnification. Tenant hereby indemnifies and holds harmless Landlord
          ---------------
and Landlord's Related Parties from and against any and all claims, actions,
damages, liabilities, and expenses in connection with the loss of life, personal
injury, and/or damage to property arising from or out of (a) any occurrence in,
upon, or at the Premises, Building or Site, however caused, including
occurrences caused by the sole or contributory negligence of Tenant, its agents,
customers, invitees, concessionaires, contractors, servants, vendors,
materialmen, or suppliers; (b) the occupancy, use, or misuse by Tenant, or
Tenant's employees, of the Premises, Building or Site, service areas, parking
areas, pedestrian areas, pedestrian walks, or driveways; (c) any occurrence
elsewhere on the Site occasioned wholly or in part by any act or omission of
Tenant, its agents, customers, invitees, concessionaires, contractors, servants,
vendors, materialmen, or suppliers; (d) any occurrence occasioned by the
violation of any law, regulation or ordinance by Tenant or its agents,
customers, invitees, concessionaires, contractors, servants, vendors,
materialmen, or suppliers, and/or (e) from any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part of Tenant to
be performed pursuant to the terms of this Lease; provided, however, that the
provisions of this indemnity shall only be applicable to the extent not caused
by the negligent act or omission of Landlord. In case Landlord shall be made a
party to any litigation commenced by or against Tenant for any of the above
reasons, then Tenant shall protect and hold Landlord harmless and pay all costs,
penalties, charges, damages, expenses, and reasonable attorneys' fees incurred
or paid by Landlord. The foregoing indemnity shall be in addition to Tenant's
obligation to supply the insurance as required by Article 10 of this Lease and
not in discharge of or substitution for same.

     9.3  Tenant's Fault. In addition and without limitation to the preceding
          --------------
paragraphs, if any damage to the Premises or Building or any equipment or
appurtenance therein, whether belonging to Landlord or to other tenants in the
Building, results from any act or neglect of Tenant, its agents, employees,
guests or invitees, Tenant shall be liable therefor and Landlord may, at
Landlord's option repair such damage, and Tenant shall, upon demand by Landlord,
reimburse Landlord the total cost of such repairs and damages to the Building.
If Landlord elects not to repair such damage, Tenant shall promptly repair such
damages at its own cost and in accordance with the provisions of this Lease. If
Tenant occupies space in which there is exterior glass, then Tenant shall be
responsible for the damage, breakage or repair of such glass, except to the
extent such loss or damage is recoverable under Landlord's insurance, if any.

                                       7
<PAGE>

     9.4  Limitation on Liability. Tenant agrees that in the event Tenant shall
          -----------------------
have any claim against Landlord or Landlord's Related Parties under this Lease
arising out of the subject matter of this Lease, Tenant's sole recourse shall be
against Landlord's interest in the Building, for the satisfaction of any claim,
judgment or decree requiring the payment of money by Landlord or Landlord's
Related Parties as a result of a breach hereof or otherwise in connection with
this Lease, and no other property or assets of Landlord, Landlord's Related
Parties or their successors or assigns, shall be subject to the levy, execution
or other enforcement procedure for the satisfaction of any such claim, judgment,
injunction or decree.

     9.5  Landlord's Indemnification. Subject only to Sections 9.1 and 9.4
          --------------------------
above, Landlord agrees to indemnify, defend and hold Tenant and its officers,
directors, partners and employees harmless from and against all liabilities,
losses, demands, actions, expenses or claims, including attorneys' fees and
court costs but excluding consequential damages, for injury to or death of any
person or for damage to any property to the extent such are determined to be
caused by the negligence or willful misconduct of Landlord, its agents,
employees, or contractors in or about the Premises or Building. None of the
events or conditions set forth in this paragraph shall be deemed a constructive
or actual eviction or entitle Tenant to any abatement or reduction of Rent.

                                  ARTICLE 10
                                   INSURANCE
                                   ---------

     10.1 Waiver of Subrogation. Notwithstanding any other provision of this
          ---------------------
Lease to the contrary, Landlord and Tenant each hereby waive all rights of
action against the other for loss of damage to the Premises, or the Building and
property of Landlord and Tenant in the Building, which loss or damage is insured
or is required pursuant to this Lease to be insured by valid and collectible
insurance policies to the extent of the proceeds collected or collectible under
such insurance policies, subject to the condition that this waiver shall be
effective only when the waiver is permitted by such insurance policies or when,
by the use of good faith effort, such waiver could have been permitted in the
applicable insurance policies. The policies of insurance required to be
maintained by Tenant under the terms of this Lease shall contain waiver of
subrogation clauses in form and content satisfactory to Landlord.

     10.2 Public Liability and Property Damage. Bodily injury and property
          ------------------------------------
damage liability insurance will be carried and maintained by Tenant, at Tenant's
sole cost and expense, providing a single limit of liability of Six Million
Dollars ($6,000,000) per occurrence from and after the date hereof. All such
bodily injury insurance and property damage liability insurance shall
specifically make reference to the indemnity agreement contained in Article 9
hereof and shall name Landlord and its real estate investment manager as
additional insureds.

     10.3 Worker's Compensation Coverage. Worker's compensation coverage
          ------------------------------
insurance shall be procured by Tenant in whatever amounts are necessary to
comply with the requirements of the State of Indiana for Tenant's employees.

     10.4 Fire and Extended Coverage. Tenant agrees at its expense to procure
          --------------------------
and maintain during the term of this Lease and any extensions thereof, fire and
extended coverage insurance on the Building in the full amount of the
replacement value of the Building, which value shall be redetermined by Landlord
at the beginning of each calendar year of the term of this Lease. It shall be
the responsibility of Landlord to give Tenant written notice of such
redetermined value, the obligations of Tenant hereunder being limited to the
amount stated in the written notice last received by Tenant. The policy of
insurance shall specifically provide that landlord and the beneficiary of any
deed of trust encumbering the Premises are additional insureds and that all
payments shall be made as their interests appear. Such coverage shall have a
deductible not to exceed $100,000 per occurrence.

     10.5 Policy Form. All policies of insurance provided for herein to be
          -----------
carried by Tenant shall be issued by insurance companies reasonably acceptable
to Landlord, shall be issued in the names of both Landlord and Tenant as co-
insureds (without any liability on the part of Landlord for premiums). Executed
copies of such policies of insurance or certificates thereof shall be delivered
to Landlord within ten (10) days after delivery of possession of the Premises
and thereafter within

                                       8

<PAGE>

thirty (30) days prior to the expiration of such policy. As often as any such
policy shall expire or terminate, renewal or additional policies shall be
procured and maintained by Tenant in like manner and to like extent. All
policies of insurance delivered to Landlord must contain a provision that the
company writing said policy will give to Landlord twenty (20) days' notice in
writing in advance of any cancellation or lapse of the effective date of any
reduction in the amounts of insurance. The requirements of Section 10.2 shall
not preclude Tenant from carrying additional bodily injury liability insurance
and/or property damage liability insurance in its name and at its cost. All
public liability and property damage policies shall be written as primary
policies, not contributing with, and not in excess of, coverage which Landlord
may carry, if any.

                                  ARTICLE II
                           ALTERATIONS AND FIXTURES
                           ------------------------

     11.1 Prior Consent. Tenant shall not make any alterations, improvements,
          -------------
modifications, or additions to the Premises at a total cost and expense in
excess of $250,000 per alteration, improvement, modification, or addition,
without first having obtained in each instance the written consent of Landlord
which consent will not be unreasonably withheld or delayed by Landlord.
Landlord shall have the right to reasonably approve or disapprove the proposed
plans and specifications for such alterations, improvements, modifications, or
additions costing in excess of $250,000.  Tenant shall submit to Landlord any
proposed plans and specifications for its approval or disapproval.  If Landlord
shall fail to notify Tenant within ten (10) business days after receipt of such
plans and specifications that it disapproves such plans and specifications, then
Landlord shall be deemed to have approved such proposed plans and
specifications. Any alteration, improvement, modification, or fixture which is
installed by either Landlord or Tenant on the Premises and which is permanently
attached to the floors, walls, or ceilings shall remain upon the Premises when
the Premises are surrendered by Tenant unless the removal by Tenant of any
alterations, improvements, modifications, or fixtures made by Tenant will not
result in irreparable damage to the Premises.

     11.2 Trade Fixtures. Notwithstanding any language in this Article 11 to the
          --------------
contrary, all normal trade fixtures, equipment, shelves, racks, machinery, and
furniture installed in the Premises at the cost of Tenant other than
replacements for fixtures, equipment, shelves, machinery, and furniture
constituting fixtures may be removed by Tenant on or before the termination date
of this Lease; provided (a) Tenant is not in default under this Lease; (b)
removal shall be done in a workmanlike manner so as not to damage the
fundamental structural integrity of the Building; and (c) Tenant, at Tenant's
sole expense, shall repair all damage to the Premises, Building and Site
resulting from the removal of such trade fixtures, equipment, shelves, machinery
and furniture.

                                  ARTICLE 12
                      MECHANICS' AND MATERIALMEN'S LIENS
                      ----------------------------------

     Tenant shall not create or permit to be created or to remain, and will
discharge by payment, bond, or escrow in the manner provided in Section 8.1(c)
hereof, any lien (including, but not limited to, the liens of mechanics,
laborers, artisans, or materialmen for work or materials alleged to be done
or furnished in connection with the Premises), encumbrance, or other charge
upon the Premises or any part thereof, upon Landlord's interest therein, or upon
Tenant's leasehold interest; provided, that Tenant shall not be required to
discharge any such liens, encumbrances, or charges as may be placed upon the
Premises by the act of Landlord.

                                  ARTICLE 13
                                     SIGNS
                                     -----

     Landlord shall have the right to approve or disapprove the number and
location of, and changes in any and all exterior signs which are in excess of
twenty-four (24) square feet in size and which are installed, erected, attached,
and/or maintained on the exterior of the Premises.  Upon the expiration or
sooner termination of this Lease, Tenant shall remove such signage and repair
any and all damage caused by such signage or the removal thereof.  In the event
Tenant fails to promptly perform under this Article 13. Tenant hereby appoints
Landlord as its attorney-in-fact to perform all work necessary to remove such
signage and make applicable repairs at Tenant's sole cost and expense.

                                       9

<PAGE>

                                  ARTICLE 14
                           ASSIGNMENT AND SUBLETTING
                           -------------------------

     14.1   Prior Written Consent. Except as otherwise set forth in this Section
            ---------------------
14.1, Tenant shall not, without-the prior written consent of Landlord, (a)
assign or in any manner transfer this Lease or any part thereof or estate or
interest therein; (b) permit any assignment of this Lease or any interest or
estate therein by operation of law, including the sale or transfer of a
controlling interest in Tenant; (c) sublet the Building or any part thereof; or
(d) mortgage, pledge or hypothecate its leasehold interest. Landlord shall not
unreasonably withhold its consent to any transaction contemplated by (a) through
(d) immediately above, but nothing in this sentence shall be deemed to affect
Landlord's rights under Section 14.2 below.

     Consent by Landlord to one or more assignments or sublettings shall not
operate as a waiver of Landlord's rights as to any subsequent assignments or
sublettings. Notwithstanding the giving of any such consent, the undersigned
Tenant and any guarantor of Tenant's obligations under this Lease shall remain
jointly and severally liable (along with each approved assignee or subtenant who
shall automatically become liable for all obligations of Tenant hereunder) and
Landlord shall be permitted to enforce the provisions of this instrument
directly against the undersigned Tenant and/or any guarantor of Tenant's
obligations hereunder and/or any assignee or subtenant without proceeding in any
way against any other person. If an event of default, as hereinafter defined,
should occur while the Building or any part thereof is then assigned or sublet,
Landlord, in addition to any other remedies herein provided or provided by law,
may at its option collect directly from such assignee or sublessee all rents
becoming due to Tenant under such assignment or sublease, and apply such rent
against any sums due to Landlord by Tenant hereunder, and Tenant hereby
authorizes and directs any such assignee or sublessee to make such payments of
rent direct to Landlord upon receipt of notice from Landlord. No direct
collection by Landlord from any such assignee or sublessee shall be construed to
constitute a novation or a release of Tenant or any guarantor of Tenant's
obligations hereunder from the further performance of its obligations hereunder.
Receipt by Landlord of rent from any assignee, sublessee, or occupant of the
Building shall not be deemed a waiver of the covenant contained in this Lease
against assignment and subletting or a release of Tenant under this Lease. The
receipt by Landlord from any such assignee or sublessee obligated to make
payments of rent shall be a full and complete release, discharge, and
acquittance to such assignee or sublessee to the extent of any such amount of
rent so paid to Landlord. Landlord is authorized and empowered, on behalf of
Tenant, to endorse the name of Tenant upon any check, draft, or other instrument
payable to Tenant evidencing payment of rent, or any part thereof, and to
receive and apply the proceeds therefrom in accordance with the terms hereof.

     14.2   Landlord's Options. If Tenant requests Landlord's consent to an
            ------------------
assignment of the Lease or subletting of all or a part of the Building, it shall
submit to Landlord in writing at least sixty (60) days in advance of the date on
which Tenant desires to make such assignment or sublease, the name of the
proposed assignee or subtenant. Landlord shall have the option (to be exercised
within thirty (30) days from submission of Tenant's written request), (a) to
permit Tenant's to assign or sublet such space, provided, however, that if the
rental rate agreed upon by and between Tenant and the proposed subtenant under
any proposed sublease of the Premises (or any part thereof) is greater than the
rental rate being currently paid by Tenant to Landlord, Tenant must pay Landlord
hereunder for that portion of the Premises that is subject to such proposed
sublease, or if any consideration shall be received by Tenant in connection with
such proposed assignment or sublease (in addition to rental as provided in such
proposed sublease), then fifty percent (50%) of such excess rental or such
consideration, as the case may be (or both), shall be considered additional rent
owed by Tenant to Landlord, and shall be paid by Tenant to Landlord, in the case
of excess rentals, in the same manner that Tenant pays Monthly Rent and, in the
case of any other consideration, immediately upon receipt thereof by Tenant; or
(b) to refuse to consent to Tenant's assignment or subleasing of such space and
to continue this Lease in full force and effect as to the entire Leased
Premises. If Landlord should fail to notify Tenant in writing of such election
within such thirty (30) day period, Landlord shall be deemed to have elected
option (b) above. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold its consent to an assignment of lease or a subletting by Tenant of all
or a portion of the Building.

                                      10

<PAGE>

     In the event of the transfer and assignment by Landlord of its' interest in
this Lease and the Premises, Landlord shall be released from any further (but
not then accrued) obligation hereunder and Tenant agrees to look solely to such
successor in interest of the Landlord for performance of such further
obligations that may arise after the date of such transfer and assignment.

                                  ARTICLE 15
                                QUIET ENJOYMENT
                                ---------------

     Tenant, upon its payment of all rents and sums herein provided and upon its
compliance with the performance of all those provisions, terms, and conditions
applicable to and performable by Tenant, shall peaceably and quietly hold
occupy, and enjoy the Premises for the Term of this Lease without hindrance,
ejection, or interruption by Landlord, or persons lawfully or equitably claiming
under or through Landlord; provided that this covenant shall be binding upon
Landlord and its successors and assigns only with respect to breaches occurring
during its or their respective ownership of Landlord's interest hereunder.

                                  ARTICLE 16
                                RIGHT OF ACCESS
                                ---------------

     Subject to all applicable Federal, State and local security laws governing
Tenant's operations at the Site, Landlord shall have the right, but not the
obligation, to enter the Premises upon twenty-four (24) hours advance oral
notice to Tenant (except in an emergency) to examine the same and to make such
repairs, alterations, improvements, or additions as Tenant has failed to make in
accordance with the terms of this Lease, and Landlord shall be allowed to take
all materials into and upon the Premises that may be required therefor without
the same constituting an eviction of Tenant, actual or constructive, and the
rent shall in no way abate while such repairs, alterations, improvements, or
additions are being made, by reason of loss or interruption of business of
Tenant; provided, however, that Landlord shall not unreasonably interfere with
the normal business operations of Tenant. During the six (6) months prior to the
expiration of the term of this Lease and upon no less than forty-eight (48)
hours' notice, Landlord may exhibit the Premises to prospective tenants or
purchasers during normal business hours and place upon the Premises the usual
notices "For Sale" or "For Rent" and Tenant shall permit the same to remain.
Notwithstanding anything to the contrary contained herein, if Landlord enters
the Premises for the purpose of performing work permitted under the terms of
this Lease, including the rights reserved to Landlord elsewhere under this
Lease, Landlord agrees to the following:

     (a)  To indemnify Tenant in accordance with the terms and conditions of
Section 9.5, above;

     (b)  To schedule the work at a time which is mutually convenient for
Landlord and Tenant and to pay the cost of Tenant's ordinary security practices,
if such work is to be performed after hours; and

     (c)  To use commercially reasonable efforts to minimize interference with
Tenant's conduct of business.

     Any time Landlord shall enter upon the Premises to perform repairs or other
work, Landlord shall indemnify and hold Tenant harmless from any damage to
person or property as a result of such activity whether during the work period
or after.

                                  ARTICLE 17
                                 HOLDING OVER
                                 ------------

     Should Tenant remain in possession of the Premises, or any part thereof,
after termination of this Lease (whether by the expiration of the term of this
Lease or otherwise) without the execution of a new lease by Landlord and Tenant,
Tenant, at the option of Landlord, shall become a tenant from month-to-month of
the Premises, or any part thereof, at one hundred and fifty percent (150%) of
the Monthly Rent pro rated and effective in the last month of the term of this
Lease, and under all other

                                      11
<PAGE>

terms, conditions, provisions, and obligations of this Lease insofar as the same
are applicable to a tenancy from month-to-month.

                                  ARTICLE 18
                             DEFAULT AND REMEDIES
                             --------------------

     18.1  Events of Default. The occurrence of one or more of the following
           -----------------
events shall constitute an event of default pursuant to the terms of this Lease:

          (a)  The failure of Tenant to comply with or to observe any terms,
provisions, or conditions of this Lease performable by and obligatory upon
Tenant, excluding the rent provisions hereof within thirty (30) days after
written notice by Landlord plus such additional time as cure is continuously and
diligently (in the sole, but reasonable, opinion of Landlord) undertaken by
Tenant.

          (b)  The failure of Tenant to pay to Landlord any monthly installment
of Monthly Rent or any other monetary charge due from Tenant hereunder within
ten (10) business days after written notice by Landlord, provided that, with
respect to Monthly Rent, if Landlord is required to give such notice more than
once in any twelve (12) consecutive-month period, it shall not be obligated
thereafter to give any such notice during the remainder of such twelve (12)
month period;

          (c)  Except as provided herein, the assignment of this Lease or
subletting of the Premises, or any part thereof, by Tenant without the prior
written approval of Landlord;

          (d)  The taking of Tenant's leasehold estate by execution or other
process of law;

          (e)  The entry of an order for relief against Tenant as a bankrupt or
insolvent according to law;

          (f)  The assignment of a substantial part of Tenant's property for the
benefit of creditors;

          (g)  The appointment of a receiver, guardian, conservator, trustee in
involuntary bankruptcy, or similar officer by a court of competent jurisdiction
to take charge of a substantial part of Tenant's property;

          (h)  The filing of a petition for involuntary bankruptcy or
reorganization of Tenant pursuant to any provision of the federal Bankruptcy
Code now or hereafter enacted, without subsequent dismissal thereof within
thirty (30) days;

          (i)  The filing by Tenant of a petition for bankruptcy, voluntary
reorganization, or for an arrangement under any provision of the federal
Bankruptcy Code now or hereinafter enacted, which petition provides for a plan
by which Tenant will settle, satisfy, or extend the time for the payment of
Tenant's debts; or

          (j)  The abandonment of the Premises, or a substantial portion
thereof, by Tenant, unless such abandonment is the result of a casualty event
covered by Article 21 hereof or a condemnation covered by Article 22 hereof.

     18.2 Remedies.  Upon the occurrence of any event of default enumerated in
          --------
Section 18.1 hereof, Landlord shall have the following rights and remedies,
which shall be distinct, separate and cumulative, and which may be exercised by
Landlord concurrently or consecutively in any combination and which shall not
operate to exclude or deprive Landlord of any other right or remedy which
Landlord may have in law or equity: (i) terminating this Lease by written notice
thereof to Tenant, (ii) continuing this Lease in full force and effect, or (iii)
curing the default on behalf of Tenant.

                                      12

<PAGE>

          (a)  In the event that Landlord shall elect to terminate this Lease,
upon written notice to Tenant, this Lease shall be ended as to Tenant and all
persons holding under Tenant, and all of Tenant's rights shall be forfeited and
lapsed, as fully as if this Lease had expired by lapse of time. In such event,
Tenant shall be required immediately to vacate the Premises and there shall
immediately become due and payable the amount by which (i) the present value
(discounted at a rate equal to one percent (1%) in excess of the discount rate,
including any surcharge thereon, on ninety (90) day commercial paper in effect
at the Federal Reserve Bank in Dallas, Texas, on the date of termination) of the
total rent and other benefits which would have accrued to Landlord under this
Lease for the remainder of the Term of this Lease if the terms and provisions of
this Lease had been fully complied with by Tenant exceeds (ii) the present value
(discounted at a rate equal to one percent (1%) in excess of the discount rate,
including any surcharge thereon, on ninety (90) day commercial paper in effect
at the Federal Reserve Bank in Dallas, Texas, on the date of termination) of the
total fair market rental value of the Premises for the balance of the Term of
this Lease as determined by Landlord in good faith (it being the intention of
both parties hereto that Landlord shall receive the benefit of its bargain); and
Landlord shall at once have all of the rights of re-entry upon the Premises,
without becoming liable for damages or guilty of a trespass. In addition to the
sum immediately due from Tenant under the foregoing provision, there shall be
recoverable from Tenant; (i) the reasonable cost of restoring the Premises to
good condition, normal wear and tear excepted; (ii) all accrued unpaid sums,
plus interest at the rate of eighteen percent (18%) per annum and late charges,
if in arrears, under the terms of this Lease up to the date of termination;
(iii) Landlord's reasonable cost of recovering possession of the Premises; and
(iv) rent and sums accruing subsequent to the date of termination pursuant to
the holdover provisions of Article 27.

          (b)  In the event that Landlord shall elect to continue this Lease in
full force and effect, Tenant shall continue to be liable for all rents and
other amounts due and payable hereunder. Landlord shall nevertheless have all
the rights of re-entry upon said Premises without becoming liable for damages or
guilty of a trespass and Landlord after re-entry may relet the Premises or any
part thereof, to a substitute tenant or tenants for a period of time equal to or
lesser or greater than the remainder of the term on whatever terms and
conditions Landlord, at Landlord's sole discretion, deems advisable. Against the
rents and sums due from Tenant to Landlord during the remainder of the term,
credit shall be given Tenant in the net amount of rent received from the new
tenant after reduction by Landlord for: (i) the costs incurred by Landlord in
reletting the Premises (including, without limitation, restoration of the
Premises to the condition specified in Section 8.3, brokerage fees, legal fees,
and the like); (ii) the accrued sums, plus interest and late charges if in
arrears, under the terms of this Lease; (iii) Landlord's cost of recovering
possession of the Premises; and (iv) the cost of storing any of Tenant's
property left on the Premises after re-entry. Notwithstanding any provision in
this Section 18.2(b) to the contrary, upon the default of any substitute tenant
or upon the expiration of the lease term of such substitute tenant before the
expiration of the Term of this Lease, Landlord may, at Landlord's election,
either relet to still another substitute tenant or terminate this Lease and
exercise its rights under Section 18.2(a) hereof.

          (c)  In the event that Landlord shall elect to cure the default of
Tenant, all sums expended by Landlord in effecting such cure, plus interest
thereon at the lesser of (i) eighteen percent (18%) per annum or (ii) the
highest lawful rate per annum, shall be due and payable immediately. Such sum
shall constitute Additional Rent hereunder pursuant to Section 3.3 hereof, and
failure to pay such sum when due shall enable Landlord to exercise all of its
remedies under this Lease.

     18.3 Attorneys' Fees and Collection Costs.   In the event that Tenant
          ------------------------------------
defaults in the performance of any of the terms, covenants, agreements, or
conditions contained in this Lease and Landlord places the enforcement of this
Lease, or any part thereof, or the collection of any rent or charge due, or to
become due, or the recovery of the possession of the Premises, in the hands of
attorneys, or files suit upon the same, Tenant agrees to pay Landlord's
reasonable attorneys' fees and other costs associated with such collection.

     18.4 Waiver.   Failure on the part of Landlord to complain of any action or
          ------
non-action on the part of Tenant, no matter how long the same may continue,
shall never be deemed to be a waiver by Landlord of any of its rights hereunder.
Further, it is covenanted and agreed that no waiver at any time of any of the
provisions hereof by Landlord shall be construed as a waiver of any of the other
provisions hereof and that a waiver at any time of any of the provisions hereof
shall not be construed

                                      13

<PAGE>

as a waiver at any subsequent time of the same provisions. The consent or
approval by Landlord to or of any action by Tenant requiring Landlord's consent
or approval shall not be deemed to waive or render unnecessary Landlord's
consent or approval to or of any subsequent similar act by Tenant.

     18.5  Removal of Tenant's Property. All property removed from the Premises
           ----------------------------
by Landlord pursuant to any provisions of this Lease or of law shall be handled,
removed or stored by Landlord at the cost, expense and risk of Tenant, and
Landlord, shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay Landlord upon demand for all expenses
incurred by Landlord in such removal and storage.

                                  ARTICLE 19
                      PROTECTION OF LANDLORD'S MORTGAGEES
                      -----------------------------------

     19.1  Subordination. This Lease shall be subject and subordinate to any
           -------------
mortgages or deeds of trust that may have been placed or may be hereafter placed
upon the Premises by Landlord, and to any advances to be made thereunder, and to
any interest thereon, and to all renewals, replacements, and extensions thereof;
provided, however, that any mortgagee or trustee may elect by written
notification to Tenant to give the rights and interests of Tenant under this
Lease priority over the lien of its mortgage or deed of trust. Regardless of
whether this Lease is declared by Landlord or its successor to be superior or
subordinate to any such mortgages or deeds of trust, upon a foreclosure or
trustee's sale thereunder, the purchaser of Landlord's interest shall become
Landlord hereunder and shall recognize the rights and interest of Tenant under
this Lease, if Tenant is not then in default hereunder. Whether or not this
Lease is declared superior or subordinate to any such mortgages or deeds of
trust, Tenant shall, in the event that any proceedings are brought for
foreclosure of the Premises or the power of sale under any mortgage made by
Landlord covering the Premises is exercised, attorn to the purchaser upon any
such foreclosure or sale if so requested, and recognized such purchaser as
Landlord under this Lease providing such purchaser agrees to a commercially
reasonable non-disturbance agreement.

     19.2  Necessary Instruments. Although Section 19.1 hereof is self-
           ---------------------
executing, Tenant shall execute and deliver whatever instruments may be required
by Landlord's mortgagees for the purposes of evidencing the subordination of
this Lease or making this Lease superior within ten (10) days of written notice
by such mortgagee or its trustee.

     19.3  Notice to Landlord's Mortgagee. In the event of any default by
           ------------------------------
Landlord hereunder, Tenant shall notify Landlord's mortgagee, or its trustee, by
registered or certified mail, provided that such mortgagee, or its trustee,
shall have furnished Tenant with its mailing address. Such mortgagee, or its
trustee, shall thereafter have a reasonable opportunity to cure Landlord's
default, including time to obtain possession of the Premises by power of sale or
judicial foreclosure, if same should prove necessary to effect a cure.

     19.4  Notice of Landlord's default. Landlord will use its best efforts to
           ----------------------------
cause to be included in any mortgages or deeds of trust hereafter placed upon
the Premises by Landlord to include a provision requiring the holder of such
mortgage or deed of trust to give to Tenant notice of, and a reasonable
opportunity to cure any default by Landlord under such mortgage or deeds of
trust prior to the institution of foreclosure proceedings thereunder.

                                  ARTICLE 20
                             LANDLORD'S ASSIGNEE
                             -------------------

     20.1  Right to Assign. Subject to Tenant's purchase options under the terms
           ---------------
and conditions of Article 25, Landlord shall have the right to sell, transfer,
or assign its interest hereunder, or any part thereof, without the prior consent
of Tenant. After such sale, transfer, or assignment, Tenant shall attorn to such
purchaser, transferee, or assignee, and provided that such purchaser,
transferee, or assignee assumes Landlord's obligations hereunder and agrees to a
commercially reasonable non-disturbance agreement, Landlord shall be released of
all obligations hereunder after the effective date of such sale, transfer, or
assignment.

                                      14

<PAGE>

     20.2    Estoppel Certificate. Tenant agrees promptly following any
             --------------------
request by Landlord (a) to execute and deliver to Landlord any documents
(including an estoppel certificate (i) certifying that this Lease is unmodified
and in full force and effect, or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect and the date to which the rent and other charges are paid in advance,
if any, (ii) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, or so specifying such
defaults, if any, as are claimed, and (iii) such other matters as Landlord may
reasonably request) evidencing the status of the Lease as may be required,
either by a lender making a loan to Landlord to be secured by a deed of trust or
mortgage covering the Premises, or a purchaser of the Premises, from Landlord
and (b) to deliver to Landlord current financial statements of Tenant (with an
opinion by a certified public accountant, if available), including a balance
sheet and a profit and loss statement for at least two (2) years, all prepared
in accordance with generally accepted accounting principles consistently
applied. Tenant's failure to deliver an estoppel certificate within such time
shall be conclusive upon Tenant that (c) this Lease is in full force and effect,
without modification except as may be represented by Landlord; (d) to Tenant's
knowledge there are no uncured defaults in Landlord's performance; and (c) no
rent has been pain in advance except as set forth in this Lease.

                                  ARTICLE 21
                                  DESTRUCTION
                                  -----------

     21.1    Landlords's Obligations.
             -----------------------

             (a)  In the event that the Building shall be damaged by fire
or other casualty, and such damage does not materially affect Tenant's ability
to carry on its business operations or render the Building partially
untenantable in Landlord's reasonable and good faith determination, regardless
of the time remaining in the Term of this Lease, Landlord shall, at its own
expense, cause such damage to be repaired, and the rent shall not be abated.

             (b)  If the Building shall be damaged by fire or other casualty and
the Building shall be rendered partially untenantable, unless the damage occurs
within the last two (2) years of the Term of this Lease, then Landlord shall, at
its own expense, cause the damage to be repaired, and the Monthly Rent shall be
abated proportionately as to the portion of the Building rendered untenantable.
If, however, the Building shall be damaged by fire or other casualty and the
Building shall be rendered partially untenantable during the last two (2) years
of the term of this Lease, then Landlord may, at its option, elect to (i) repair
such damage at its own expense and the Monthly Rent shall be abated
proportionately as to the portion of the Building rendered untenantable, or (ii)
terminate this Lease by giving Tenant written notice of termination within
thirty (30) days from the date of such occurrence, and the Monthly Rent shall be
abated as to the untenantable portion until the date of termination, when a
final adjustment of rent shall occur; provided, however, that in the event that
Tenant shall notify Landlord within ten (10) days after the occurrence of such
damage that it intends to elect to extend the term of this Lease pursuant to
Article 26 hereof the rights of Landlord under clause (ii) of this sentence to
terminate this Lease in the last two (2) years of the Term shall be temporarily
suspended for a period of twenty (20) days. During such twenty (20) day period,
Landlord and Tenant shall endeavor to mutually determine the Prevailing Rate for
Comparable Space (as defined in Article 26) for the next extended term. In the
event Landlord and Tenant mutually agree on the Prevailing Rate for Comparable
Space, which will be applicable to the next extended term, then Tenant shall
have the option for a period of ten (10) days after such determination to
unconditionally extend the term of this Lease pursuant to Article 26; and upon
the exercise of such option by Tenant in writing, Landlord's rights under this
paragraph (b) of Section 21.1 to terminate the Lease in the last two (2) years
of the term of this Lease shall be suspended, and Landlord shall be obligated to
make the repairs as contemplated by clause (i) above. If, on the other hand,
Landlord and Tenant for any reason cannot mutually agree upon the Prevailing
Rate for Comparable Space which will be applicable to the next extended term (or
if determined, but Tenant fails to unconditionally extend the term of this Lease
as provided above), then Landlord may elect to repair such damage or terminate
this Lease as provided in clauses (i) and (ii) of this paragraph (b) of Section
21.1.

                                     15

<PAGE>

          (c)  If the Building shall be damaged by fire or other casualty and
the Building shall be rendered wholly untenantable by reason of such occurrence,
regardless of the time remaining in the Term of this Lease, then either Landlord
or Tenant may at its election terminate this Lease by giving written notice of
termination to the other within thirty (30) days from the date of such
occurrence, and in the event of such termination, the monthly rent shall be
adjusted as of the date of such occurrence. If neither Landlord nor Tenant shall
terminate this Lease within such thirty (30) day period, then Landlord shall, at
its own cost and expense, cause such damage to be repaired, and the Monthly Rent
shall be abated until the Building has been restored and rendered tenantable.

     21.2 Time for Repairs.   If Landlord is obligated to repair or to restore
          ----------------
the Building damaged by fire or other casualty not rendering the Building wholly
untenantable as hereinabove provided, then Landlord shall commence to repair any
such damage or to restore the Building within sixty (60) days after the date of
such occurrence and shall complete such repairs or restoration within one
hundred eighty (180) days after commencement. If Landlord elects to restore the
Building rendered wholly untenantable by reason of fire or other casualty as
hereinabove provided, then Landlord shall commence such repairs and/or
restoration within ninety (90) days following the date of such occurrence and
shall complete such repairs or restoration within two hundred ten (210) days
after date of commencement. If Landlord has not completed any repairs or
restoration within three hundred sixty five (365) days after the occurrence of
such damage (including days of force majeure under Article 23) the Tenant may
terminate this Lease by giving Landlord written notice of termination within
three hundred seventy five (375) days after the occurrence of such damage, and
in the event of such termination, the Monthly Rent shall be adjusted as of the
date of such occurrence.

     21.3 Scope of Landlord's Repairs.  In the event that Landlord elects or
          ---------------------------
shall be obligated to repair or restore any damage or destruction aforesaid, the
scope of work shall be limited to the original basic building and leasehold
improvements, if any, existing on the date of occurrence at its expense; time of
completion shall be subject to the provisions of Article 23 hereof; and Tenant
shall forthwith replace and/or fully repair and restore all of Tenant's signs,
trade fixtures, equipment, display cases, inventory, and other property
originally provided by Tenant. In no event shall Landlord's monetary
obligations hereunder exceed insurance proceeds actually received by Landlord
from insurance carried by Tenant pursuant to Section 10.4 hereof nor shall
Landlord be obligated because of the provisions hereof to repair or restore any
part of the industrial park or project of which the Building is a part outside
of the Building.

     21.4 Extension of Term.  The Term of this Lease shall be extended for a
          -----------------
length of time equal to that during which rent shall be totally abated for
repairs under the provisions of this Article 21.

                                 ARTICLE 22
                                CONDEMNATION
                                ------------

     22.1 Definitions. For purposes of this Article 22, the following terms
          -----------
shall have the respective meanings set forth below:

          (a) "Taking" means a taking of the Premises or any damage related to
the exercise of the power of eminent domain and including a voluntary conveyance
to any agency, authority, public utility, person, or corporate entity empowered
to take or condemn property in lieu of court proceedings;

          (b) "Total Permanent Taking" means the Taking of the entire Premises
or so much of the Premises as to prevent or substantially impair the use thereof
by Tenant; a Taking of over fifty percent (50%) or more of the gross square feet
in the Building shall be deemed to be total for purposes hereof;

          (c) "Partial Permanent Taking" means the Taking of only a portion of
the Premises which does not constitute a Total Permanent Taking;

                                      16
<PAGE>

          (d)  "Date of Taking" means the date upon which title to the Premises,
or a portion thereof, passes to and vests in the condemnor or the effective date
of any order for possession if issued prior to the date title vests in the
condemnor;

          (e)  "Award" means the amount of any award made, consideration paid,
or damages ordered as a result of a Taking;

          (f)  "Total Temporary Taking" means the Taking of all of the Premises
for a temporary term; and

          (g)  "Partial Temporary Taking" means the Taking of any part of the
Premises for a temporary term.

     22.2 Total Permanent Taking.  In the event of a Total Permanent Taking
          ----------------------
during the Term of this Lease (or Total Temporary Taking for a period ending on
or subsequent to the end of the Term of this Lease) the following shall occur:
(a) the rights of Tenant under the Lease and the leasehold estate of Tenant in
and to the Premises shall cease and terminate as of the Date of Taking; (b)
Landlord shall refund to Tenant any prepaid rent; (c) Tenant shall pay to
Landlord any rent or charges due Landlord under the Lease, each prorated as of
the Date of Taking; (d) Tenant shall receive from the Award those portions of
the Award attributable to improvements to the Premises made and paid for by
Tenant and trade fixtures, equipment, and furniture of Tenant; and (e) the
remainder of the Award shall be paid to and be the property of Landlord.

     22.3 Partial Permanent Taking.  In the event of a Partial Permanent Taking
          ------------------------
of the Premises during the Term of this Lease (or Partial Temporary Taking for a
period ending on or subsequent to the end of the term of this Lease) the
following shall occur: (a) the rights of Tenant under the Lease and the
leasehold estate of Tenant in and to the portion of the Premises taken shall
cease and terminate as of the Date of Taking; (b) from and after the Date of
Taking the Monthly Rent shall be adjusted so that Tenant shall be required to
pay for the remainder of the Term the same portion of the Monthly Rent as the
number of gross square feet in the Premises remaining after the condemnation
bears to the number of gross square feet in the Premises at the date of
condemnation; (c) Tenant shall receive from the Award that portion of the Award
attributable to improvements to the Premises made and paid for by Tenant and
trade fixtures, equipment, and furniture of Tenant; and (d) the remainder of the
Award shall be paid to and be the property of Landlord. Landlord, from its
portion of the Award shall restore the remainder of the Premises, as nearly as
possible, to one (1) architectural unit.

     22.4 Temporary Taking - Period Ending Before Expiration of Lease.  In the
          -----------------------------------------------------------
event of a Total or Partial Temporary Taking during the term of this Lease for a
period ending on or before the expiration of the Term of this Lease, the
following shall occur; (a) this Lease shall continue in full force and effect;
(b) the Award shall be paid to Landlord; (c) the Monthly Rent which becomes due
during the period of the Temporary Taking shall be reduced by the amount of the
Award; (d) any excess of the Award over the amount of the Monthly Rents which
becomes due during the period of the Temporary Taking shall be the property of
Landlord; and (e) if the Award is not sufficient to pay the Monthly Rents and
other obligations as they become due during the period of the Temporary Taking,
any deficiency shall be paid by Tenant to Landlord as the Monthly Rent becomes
due. In the case of a Partial Temporary Taking, Landlord, from its portion of
the Award, shall restore the remainder of the Premises, as nearly as possible,
to one (1) architectural unit.

                                  ARTICLE 23
                                 FORCE MAJEURE
                                 -------------

     Without limiting the generality and effect of the provisions of this Lease,
in the event that Landlord shall be delayed, hindered or prevented from the
performance of any act required hereunder by reason of Acts of God, fire,
unavoidable casualties, unusual weather or abnormal climatic conditions,
strikes, lockouts, labor disputes, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war, or by any act, omission, delay, or neglect of Tenant,
or by any of Tenant's employees or agents, or by any separate contractor
employed by Tenant, or other reason of like nature not the fault of Landlord,
then the performance

                                      17
<PAGE>

of such acts shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay.

                                  ARTICLE 24

[Intentionally Omitted]

                                  ARTICLE 25
                          TENANT'S OPTION TO PURCHASE
                          ---------------------------

     Landlord hereby grants to Tenant the non-assignable right and option to
purchase the Premises in its then present "as is", "where is" and "with all
faults" condition, from Landlord at any time prior to September 30, 2001,
subject to and upon the following terms, provisions, and conditions:

     (A)  At any time after October 1, 1999, but prior to March 31, 2001, Tenant
may give to Landlord written notice (i) that Tenant desires to purchase the
Premises pursuant to the provisions hereof and to those provisions of a mutually
acceptable purchase agreement executed by the parties (which agreement the
parties shall promptly negotiate in good faith following the receipt by Landlord
of Tenant's notice), and (ii) of a closing date (the "Closing"), which date
shall not in any event be later than one hundred eighty (180) days after the
date of Tenant's notice under this subparagraph (A). Depending on the date
Landlord receives the applicable notice, the purchase price shall be as follows:

     Date on Which
     -------------
     Landlord Receives Notice                       Purchase Price
     ------------------------                       --------------

     On or before 10/1/99                           $5,000,000.00

     10/2/99 - 4/1/00                               $5,100,000.00

     4/2/00 - 10/1/00                               $5,200,000.00

     10/2/00 - 4/1/01                               $5,300,000.00

     (B)  At the Closing, Landlord will execute, have acknowledged and deliver
to Tenant a warranty deed and bill of sale conveying to Tenant indefeasible
title to the Premises free and clear of all liens and encumbrances other than
(i) liens and encumbrances which are reflected in that certain Owner's Policy of
Title Insurance dated on or about the date of the Existing Lease (as defined in
Section 27.10, below), issued by Abstract Company of St. Joseph County, Inc. on
behalf of Lawyers Title Insurance Corporation to Landlord, a copy of which has
been furnished to Tenant, (ii) any liens or encumbrances approved in writing by
Tenant after the date hereof, (iii) taxes for the year in which the Closing is
to occur and subsequent years, (iv) zoning ordinances and utility easements
which do not adversely affect the use of the Property, (v) any discrepancies,
conflicts or shortages in area or boundary lines, or any encroachments, or
overlapping of improvements which would be shown on a current survey reasonably
acceptable to Tenant, and (iv) rights of tenants in possession under valid and
existing leases.

     (C)  Rents, lease commissions, interests and ad valorem taxes for the then
current year shall be prorated at the Closing effective as of the Closing.

                                      18

<PAGE>

                                  ARTICLE 26
                               OPTION TO EXTEND
                               ----------------

     26.1  Prevailing Rate.  As used in this lease, the term "Prevailing Rate
           ---------------
for Comparable Space" shall mean the average of the annual rates then being
charged in the county in which the Premises are located, for space and land
comparable to the Premises (taking into consideration the use, location,
leasehold improvements provided, age, rental concessions, and the time the
particular new rate under consideration shall be effective, which rate may be an
escalating rate during the new extended term of this Lease) but in no event less
than the monthly amount charged immediately prior to the applicable renewal
period. In the event Landlord and Tenant cannot agree upon the Prevailing Rate
for Comparable Space within sixty (60) days after the date Tenant has notified
Landlord that it intends to extend the initial term of this Lease, or any
extension thereof, as provided in this Article 26, Landlord shall serve a
written notice on Tenant stating that an appraisal should be conducted, in which
event twenty (20) days after such notice is given, Landlord shall nominate and
appoint one appraiser, and Tenant shall nominate and appoint one appraiser. Upon
the appointment of the two appraisers as hereinabove provided, said two
appraisers shall be sworn faithfully and fairly to determine the Prevailing Rate
for Comparable Space. The two appraisers shall afford to Landlord and Tenant a
hearing and the right to submit evidence, with the privilege of cross-
examination, on the question at issue, and shall, with all possible speed, make
their respective determinations in writing and shall give notice to Landlord and
Tenant of their respective conclusions. If there is a variance of less than 5%
in the Prevailing Rate for Comparable Space determined by the two appraisers,
the average of the values so determined shall be controlling and shall be
binding upon Landlord and Tenant. If there is a variance of more than 5% in the
Prevailing Rate for Comparable Space determined by the two appraisers, said
appraisers shall forthwith and within ten (10) days after both of said
appraisers have made their determinations appoint in writing a third appraiser
and give written notice of such appointment to Landlord and Tenant. In the event
the two appraisers shall fail to appoint or agree upon such third appraiser
within said ten (10) day period, a third appraiser shall be selected by Landlord
and Tenant, if they so agree upon such third appraiser within a further period
of ten (10) days. If any appraiser shall not be appointed or agreed upon within
the time herein provided, then either Landlord or Tenant may apply to the
appropriate Court of the State of Indiana for the appointment of such appraiser.
Said appraiser shall be sworn faithfully and fairly to determine, pursuant to
the procedures set forth above, the Prevailing Rate for Comparable Space. The
third appraiser's determination shall be controlling unless it is (i) higher
than the higher of the determinations of Prevailing Rate for Comparable Space of
the two original appraisers, in which case such previous high determination will
be controlling and binding upon Landlord and Tenant, or (ii) lower than the
lower of the determinations of the two original appraisers in which case such
previous low determination will be controlling and binding upon Landlord and
Tenant.

     Landlord and Tenant shall pay the respective fees and expenses of the
appraisers they individually appoint, and the fees and expenses of the third
appraiser and any general expenses incurred by the panel of appraisers in
connection with the appraisal shall be paid by Landlord and Tenant, jointly and
equally. In the event any appraiser appointed as aforesaid shall thereafter die
or become unable or willing to act, such appraiser's successor shall be
appointed in the same manner as provided herein for the appointment of the
appraiser so dying or becoming unable or unwilling to act. Any appraiser
appointed hereunder shall have no less than five (5) years' experience in the
appraisal of investments of the type being appraised and shall be a MAI
appraiser unless otherwise jointly agreed.

     In order to exercise any option to extend as provided in this Article 26,
Tenant shall notify Landlord of its intention thereof at least eighteen (18)
calendar months before the expiration of the initial Term hereof, or any
extension thereof, as the case may be. Thereafter, Landlord and Tenant shall
immediately proceed to determine the Prevailing Rate for Comparable Space as of
the commencement of such extended Term as provided in this Section 26.1. Tenant
shall have the option, exercisable at any time after the final determination of
the Prevailing Rate for Comparable Space but at least one (1) year before the
expiration of the initial Term hereof (unless such determination has not been
made through no fault of Tenant in which event Tenant may exercise its option
within ten (10) days after such determination even if such determination is not
made until after the initial or extended term of the Lease, as applicable, has
expired), or any extension thereof, as the case may be, to extend the Term
hereof as hereinafter provided in this Article 26.

                                      19

<PAGE>

     26.2 First Option to Extend.
          ----------------------

     Tenant at its option may extend the Term of this Lease for an additional
five (5) years by serving written notice thereof upon Landlord at least one year
before the expiration of the initial Term hereof or as otherwise set forth in
Section 26.1 above, provided that at the time of such notice and at the
commencement of such extended Term, there shall exist no event of default as
defined in Article 18 of this Lease. Upon the service of said notice and subject
to the conditions set forth in the preceding sentence, this Lease shall be
extended without the necessity of the execution of any further instrument or
document. Such extended Term shall commence upon the expiration date of the
initial Term of this Lease, expire the annual anniversary of said date five (5)
years thereafter, and be upon the same terms, covenants and conditions as
provided in this Lease for the initial Term, except that the Annual Rent payable
during the extended Term shall be at the Prevailing Rate for Comparable Space at
the commencement of such extended Term. Payment of all additional rent and other
charges required to be made by Tenant as provided in this Lease for the initial
Term shall continue to be made during such extended Term. Any termination of
this Lease during the initial Term shall terminate all rights of extension
hereunder. Any assignment or subletting by Tenant pursuant to Article 24 of this
Lease shall terminate the option of Tenant contained herein.

     26.3 Second Option to Extend.
          -----------------------

     Tenant at its option may extend the Term of this Lease for an additional
five (5) years by serving written notice thereof upon Landlord at least one year
before the expiration of the initial extended Term hereof or as otherwise set
forth in Section 26.1 above, provided that at the time of such notice and at the
commencement of such second extended term, there shall exist no event of default
as defined in Article 18 of this Lease. Upon the service of such notice and
subject to the conditions set forth in the preceding sentence, this Lease shall
be extended without the necessity of the execution of any further instrument or
document. Such second extended Term shall commence upon the expiration date of
the extended Term of this Lease, expire upon the annual anniversary of said date
five (5) years thereafter, and be upon the same terms, covenants and conditions
as provided in this Lease for the initial extended Term, except that the Annual
Rent payable during the second extended Term shall be at the Prevailing Rate for
Comparable Space at the commencement of such second extended Term. Payment of
all additional rent and other charges required to be made by Tenant as provided
in this Lease for the initial extended Term shall continue to be made during
such second extended Term. Any termination of this Lease during the initial Term
or the initial extended Term shall terminate all rights of extension hereunder.
Any assignment or subletting by Tenant pursuant to Article 14 of this Lease
shall terminate the option of Tenant contained herein.

                                  ARTICLE 27
                              GENERAL PROVISIONS
                              ------------------

     27.1 Notice. Any notice or request (hereinafter severally and collectively
          ------
called "notice") in this Lease provided for or permitted to be given, made or
accepted by either party to the other must be in writing, and may, unless
otherwise in this Lease expressly provided, be given or be served by
depositing the same in the United States mail, postpaid and certified and
addressed to the party to be notified, with return receipt requested, or by
delivering the same in person to such party (or, in the case of a corporate or
partnership party, to an officer or general partner of such party, as the case
may be), or by prepaid telegram when appropriate, addressed to the party to be
notified. Notice deposited in the mail in the manner hereinabove described shall
be effective, unless otherwise stated in this Lease, from and after the date it
is so deposited. Notice given in any other manner shall be effective only if and
when received by the party to be notified. For purposes of notice, the addresses
of the parties shall, until changed as herein provided, be as follows:

     For Landlord:            Amland Properties, Inc.
                              c/o CB Richard Ellis Investors, LLC
                              800 Boylston Street, Suite 1475
                              Boston, Massachusetts 02199-8001
                              Attn: Director of Asset Management

                                      20

<PAGE>

   With Copy To:              Amland Properties, Inc.
                              c/o CB Richard Ellis Investors, LLC
                              865 S. Figueroa Street, 35th Floor
                              Los Angeles, CA 90017
                              Attn: Portfolio Manager

   For Tenant:                AM General Corporation
                              105 North Niles Avenue
                              South Bend, Indiana 46634
                              Attn: Paul J. Cafiero

However, the parties hereto and their respective heirs, successors, legal
representatives, and assigns shall have the right from time to time and at any
time to change their respective addresses and each shall have the right to
specify as its address any other address by at least fifteen (15) days' written
notice to the other party given in conformance with this Section 27.1.

     27.2 Entire Agreement-Amendments. It is expressly agreed by Tenant that
          ---------------------------
there are no representations, understandings or promises pertaining to the
Premises except as herein set forth. This Agreement may not be altered, changed
or amended except by an instrument in writing, signed by both parties hereto.
Paragraph captions herein are for Landlord's and Tenant's convenience only, and
neither limit nor amplify the provisions of this instrument.

     27.3 Broker's Commission. Each of the parties agrees to indemnify the other
          -------------------
against, and hold it harmless from, all liabilities arising from any claim for
"broker's or leasing agent's" commission, other than with respect to such
commissions agreed, in writing, to be paid by the party charged with the payment
therefor.

     27.4 Rights of Successors and Assigns. Each of the provisions of this Lease
          --------------------------------
shall extend to and shall, as the case may require, bind and inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives, and in case of an assignment or sublease is consented to in
writing by Landlord, to Tenant's assigns and sublessees. Subject to the terms of
Section 20.1, Landlord shall have the right to transfer and assign, in whole or
in part, all its rights and obligations hereunder and in the Premises referred
to herein, and in such event and upon such transfer, Landlord shall be released
from any further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such obligations.

     27.5 Severability and Captions. If any clause or provision of this Lease
          -------------------------
contract, or the application thereof to any person or circumstance, shall, to
any extent, be illegal, invalid or unenforceable under the present or future
laws effective during the Term of this Lease, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to whom or which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law. The caption of each
paragraph hereof is added as a matter of convenience only and shall be
considered to be of no effect in the construction of any provision or provisions
of this Lease.

     27.6 No Personal Liability. The liability of Landlord to Tenant for any
          ---------------------
default by Landlord under the terms of this Lease shall be limited to the
interest of Landlord in the Premises, and Tenant agrees to look solely to
Landlord's interest in the Premises for the recovery of any judgment from
Landlord, it being intended that Landlord shall not be personally liable for any
judgment or deficiency.

     27.7 Governing Law. This Lease and the rights and obligations of the
          -------------
parties hereto shall be interpreted, construed, and enforced in accordance with
the laws of the State of Indiana.

                                      21
<PAGE>

     27.8   Short Form Lease.  Tenant agrees not to record this Lease, but each
            ----------------
party hereto agrees, on request of the other, to execute a Memorandum of Lease
in form recordable and comply with applicable Indiana laws. In no event shall
such document set forth the rental or other charges payable by Tenant under this
Lease; and any such document shall expressly state that it is executed pursuant
to the provisions contained in this Lease, and is not intended to vary the terms
and conditions of this Lease.

     27.9   WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, LANDLORD AND
            --------------------
TENANT AND THERE RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES AGREE THAT
EACH SHALL, AND DO HEREBY, WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY, BETWEEN OR AGAINST THE PARTIES HERETO OR THEIR
SUCCESSORS OR ASSIGNS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND
EMPLOYEES ON ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
THE RELATIONSHIP OF LANDLORD AND TENANT, AND/OR TENANT'S USE OR OCCUPANCY OF THE
PREMISES. THIS WAIVER IS MADE FREELY AND VOLUNTARILY, WITHOUT DURESS AND ONLY
AFTER EACH OF THE PARTIES HERETO HAS HAD THE BENEFIT OF ADVICE FROM LEGAL
COUNSEL ON THIS SUBJECT.

     27.10  Existing Lease.  Tenant is currently occupying the Premises pursuant
            --------------
to an existing lease with Landlord dated September 11, 1994, as amended
("Existing Lease"). Upon the Commencement Date of this Lease, the Existing Lease
shall automatically terminate and be of no further force or effect, except that
Tenant shall continue to be obligated to pay any rent and other sums which may
be owing under the terms of the Existing Lease, to the extent that such sums
accrue through the date of termination of the Existing Lease. Any failure by
Tenant to timely pay any amounts owing under the Existing Lease, or to otherwise
comply with its obligations thereunder, shall constitute an event of default
under this Lease.

     27.11  Authority.  Landlord and Tenant covenant to each other that each has
            ---------
full right and authority to make this Lease.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      22

<PAGE>

     THIS LEASE IS DATED EFFECTIVE AS OF THE DATE AND YEAR FIRST ABOVE WRITTEN.

LANDLORD:

AMLAND PROPERTIES, INC.,
a Delaware corporation
By: CB RICHARD ELLIS INVESTORS, LLC,
a Delaware limited liability company

                                        WITNESS 1:

By: /s/ Mark H. Luz                     /s/ John Matteson
    ----------------------------        ------------------------------------
Name: Mark H. Luz                       Name: John Matteson
      --------------------------              ------------------------------
Title: Authorized Signatory

                                        WITNESS 2:

                                        /s/ Peter J. Mafera
                                        ------------------------------------
                                        Name: Peter J. Mafera
                                              ------------------------------

By: /s/ William Harris
    ----------------------------
Name: William Harris
      --------------------------
Title: Authorized Signatory

TENANT:

AM GENERAL CORPORATION,
a Delaware corporation

                                        WITNESS 1:

By: /s/ Paul J. Cafiero                 /s/ Judith A. Ciesiolka
    ----------------------------        ------------------------------------
Name: Paul J. Cafiero                   Name: Judith A. Ciesiolka
      --------------------------              ------------------------------
Title: Vice President & CFO
       -------------------------

                                        WITNESS 2:

                                        /s/ Craig C. Macnab
                                        ------------------------------------
                                        Name: Craig C. Macnab
                                              ------------------------------

                                      23
<PAGE>

                                   EXHIBIT A

A tract of land in the Southeast Quarter of Section 1 and Northeast Quarter of
Section 12 both in Township 37 North, Range 3 East; and in the Northwest Quarter
of Section 7, Township 37 North, Range 4 East all in Penn Township, St. Joseph
County, Indiana, more particularly described as follows:

Beginning at the Northwest Corner of said Section 7, Township 37 North, Range 4
Last; thence North 89 54' 49" East along the north line of said Section 7,466.94
feet; thence South 0 03' 27" East 1929.66 feet to the centerline of Jefferson
Highway; thence 152.87 feet along said centerline on a curve to the left having
a radius of 933.17 feet and subtended by a long chord 152.70 feet in length
having a bearing of South 57 40' 55" West; thence South 52 59' 20" West along
said centerline 852.27 feet, thence continuing on said centerline 429.21 feet
along a curve to the right having a radius of 696.94 feet and subtended by a
long chord 422.47 feet in length having a bearing of South 70 37' 55" West to
the South line of the Northeast Quarter of said Section 12; thence continuing on
said centerline of Jefferson Highway South 88 16' 30" West along said South line
18.04 feet to the intersection with the Easterly right of way line of the Twin
Branch Railroad; thence Northeasterly along said Easterly right of way line
909.6C feet along a curve to the left having a radius of 1246.28 feet (R.R.
definition) and subtended by a long chord 889.78 feet in length having a bearing
of North 19 02' 22" East; thence continuing on said easterly right of way line
North 01 52' 30" West 2097.97 feet to the centerline of Indiana State Highway
No, U.S. 20 thence North 69 07' 30" East along the centerline of said Highway
573.33 feet to the East line of Section 1, Township 37 North, Range 3 East;
thence South 0 00' 00" West along the east line of said Section 42.81 feet to
the Southerly right of way line of said highway; thence continuing along the
East line of Section 1, South 0 00' 00" West 405.18 feet to the Southeast corner
of Section 1 and the Northeast corner of Section 12, Township 37 North, Range! 3
East; thence continuing South along the East line of said Section 12 South 0 00'
00" West 27.00 feet to the Northwest corner of Section 7, Township 37 North,
Range 4 East and the Point of Beginning, containing 56.022 acres more or less.

                                      24

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