Document:

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                                                                   EXHIBIT 10.13

[BUILDING TO BE CONSTRUCTED]

                                                             822 Packer Way
                                                        ------------------------

                                                           21,600 square feet
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                                LEASE AGREEMENT

     THIS LEASE AGREEMENT, made and entered into by and between CROW SPARKS
ASSOCIATES TWO hereinafter referred to as "Landlord", and DAMON DISTRIBUTING CO,
a Nevada Corporation hereinafter referred to as "Tenant";

                               W I T N E S S T H

     1. Premises and Term. In consideration of the obligation of Tenant to pay
rent as herein provided, and in consideration of the other terms, provisions and
covenants hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby takes from Landlord certain premises situated within the County of
Washoe, State of Nevada, more particularly described on Exhibit "A" attached
hereto and incorporated herein by reference, together with all rights,
privileges, easements, appurtenances, and immunities belonging to or in any way
pertaining to the premises and together with the buildings and other
improvements situated or to be situated upon said premises said real property,
building and improvements being hereinafter referred to as the "premises").

     TO HAVE AND TO HOLD the same for a term commencing on the "commencement
date", as hereinafter defined, and ending 60 months thereafter, provided,
however, that, in the event the "commencement date" is a date other than the
first day of a calendar month, said term shall extend for said number of months
in addition to the remainder of the calendar month following the "commencement
date".

     The "commencement date" shall be the date upon which the buildings and
other improvements erected and to be erected upon the premises shall have been
substantially completed in accordance with the plans and specifications
described on Exhibit "B" attached hereto and incorporated herein by reference.
Landlord shall notify Tenant in writing as soon as Landlord deems said buildings
and other improvements to be completed and ready for occupancy as aforesaid. In
the event that said buildings and other improvements have not in fact been
substantially completed as aforesaid, Tenant shall notify Landlord in writing of
its objections. Landlord shall have a reasonable time after delivery of such
notice in which to take such corrective action as may be necessary, and shall
notify Tenant in writing as soon as it deems such corrective action has been
completed so that said buildings and other improvements are completed and ready
for occupancy. Taking of possession by Tenant shall be deemed conclusively to
establish that said buildings and other improvements have been completed in
accordance with the plans and specifications and that the premises are in good
and satisfactory condition, as of when possession was so taken. Tenant
acknowledges that no representations as to the repair of the premises have been
made by Landlord, unless such are expressly set forth in this lease. After such
"commencement date" Tenant shall, upon demand, execute and deliver to Landlord a
letter of acceptance of delivery of the premises. In the event of any dispute as
to substantial completion or work performed or required to be performed by
Landlord, the certificate of Landlord's architect or general contractor shall be
conclusive.

     2. Base Rent and Security Deposit.

     A. Tenant agrees to pay to Landlord rent for the premises, in advance,
without demand, deduction or set off, for the entire term hereof at the rate of
See Paragraph 26 attached hereto and made a part hereof Dollars ($-------------)
per month. One such monthly installment shall be due and payable on the date
hereof and a like monthly installment shall be due and payable on or before the
first day of each calendar month succeeding the commencement date recited above
during the hereby demised term, except that the rental payment for any
fractional calendar month at the commencement or end of the lease period shall
be prorated.

     B. In addition, Tenant agrees to deposit with Landlord on the date hereof
the sum of THREE THOUSAND EIGHT HUNDRED EIGHTY EIGHT & No/100 Dollars
($*3,888.00*), which sum shall be held by Landlord, without obligation for
interest, as security for the performance of Tenant's covenants and obligations
under this lease, it being expressly understood and agreed that such deposit is
not an advance rental deposit or a measure of Landlord's damages in case of
Tenant's default. Upon the occurrence of any event of default by Tenant,
Landlord may, from time to time, without prejudice to any other remedy provided
herein or provided by law, use such fund to the extent necessary to make good
any arrears of rent or other payments due Landlord hereunder, and any other
damage, injury, expense or liability caused by such event of default; and Tenant
shall pay to Landlord on demand the amount so applied in order to restore the
security deposit to its original amount. Although the security deposit shall be
deemed the property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant at such time after termination of this lease that
all of Tenant's obligations under this lease have been fulfilled.

     3. Use. The demised premises shall be used only for the purpose of
receiving, storing, shipping and selling (other than retail) products, materials
and merchandise made and/or distributed by Tenant and for such other lawful
purposes as may be incidental thereto. Outside storage, including without
limitation, trucks and other vehicles, is prohibited without Landlord's prior
written consent. Tenant shall at its own cost and expense obtain any and all
licenses and permits necessary for any such use. Tenant shall comply with all
governmental laws, ordinances and regulations applicable to the use of the
premises, and shall promptly comply with all governmental orders and directives
for the correction, prevention and abatement of nuisances in or upon, or
connected with, the premises, all at Tenant's sole expense. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, noise or
vibrations to emanate from the premises, nor take any other action which would
constitute a nuisance or would disturb or endanger any other tenants of the
building in which the premises are situated or unreasonably interfere with their
use of their respective premises. Without Landlord's prior written consent,
Tenant shall not receive, store or otherwise handle any product, material or
merchandise which is explosive or highly inflammable. Tenant will not permit the
premises to be used for any purpose or in any manner (including without
limitation any method of storage) which would render the insurance thereon void
or the insurance risk more hazardous or cause the State Board of Insurance or
other insurance authority to disallow any sprinkler credits.

     4. Taxes.

     A. Landlord agrees to pay before they become delinquent all taxes,
assessments and governmental charges of any kind and nature whatsoever
(hereinafter collectively referred to as "taxes") lawfully levied or assessed
against the building and the grounds, parking areas, driveways and alleys around
the building; provided, however, that the maximum amount of taxes to be paid by
Landlord hereunder during any one real estate tax year shall be those of 1982 -
1983. If in any real estate tax year during the term hereof or any renewal or
extension the taxes levied or assessed against the building and the grounds,
parking areas, driveways and alleys around the building during such tax year
shall exceed the sum set forth in the preceding sentence, Tenant shall pay to
Landlord as additional rental, upon demand, the amount of such excess. In the
event any such amount is not paid within twenty (20) days after the date of
Landlord's invoice to Tenant, the unpaid amount shall bear interest at the rate
of ten percent (10%) per annum from the date of such invoice until payment by
Tenant.

     B. In the event the premises constitute a portion of a multiple occupancy
building, Tenant agrees to pay to Landlord, as additional rental, upon demand,
the amount of Tenant's "proportionate share" of the excess taxes referred to in
Paragraph A above. Tenant's "proportionate share", as used in this lease, shall
mean a fraction, the numerator of which is the space contained in the premises
and the denominator of which is the entire space contained in the building.

     C. If at any time during the term of this lease, the present method of
taxation shall be changed so that in lieu of the whole or any part of any taxes,
assessments or governmental charges levied, assessed or imposed on real estate
and the improvements thereon, there shall be levied, assessed or imposed on
Landlord a capital levy or other tax directly on the rents received therefrom
and/or a franchise tax, assessment, levy or charge measured by or based, in
whole or in part, upon such rents for the present or any future building or
buildings on the premises, then all such taxes, assessments, levies or charges,
or the part thereof so measured or based, shall be deemed to be included within
the term "taxes" for the purposes hereof.

     D. The Landlord shall have the right to employ a tax consulting firm to
attempt to assure a fair tax burden on the building and grounds within the
applicable taxing jurisdiction. Tenant shall pay to Landlord upon demand from
time to time, as additional rent, the amount of Tenant's "proportionate share"
(as defined in subparagraph 4(B) above) of the cost of such service.

     E. Any payment to be made pursuant to this Paragraph 4 with respect to the
real estate tax year in which this lease commences or terminates shall be
prorated.

     5. Landlord's Repairs. Landlord shall at his expense maintain only the
roof, foundation and the structural soundness of the exterior walls of the
building in good repair, reasonable wear and tear excepted. Tenant shall repair
and pay for any damage caused by the negligence of Tenant, or Tenant's
employees, agents or invitees, or caused by Tenant's default hereunder. The term
"walls" as used herein shall not include windows, glass or plate glass, doors,
special store fronts or office entrys. Tenant shall immediately give Landlord
written notice of defect or need for repairs, after which Landlord shall have
reasonable opportunity to repair same or cure such defect. Landlord's liability
with respect to any defects, repairs or maintenance for which Landlord is
responsible under any of the provisions of this lease shall be limited to the
cost of such repairs or maintenance or the curing of such defect.

     6. Tenant's Repairs.

     A. Tenant shall at its own cost and expense keep and maintain all parts of
the premises (except those for which Landlord is expressly responsible under the
terms of this lease) in good condition, promptly making all necessary repairs
and replacements, including but not limited to, windows, glass and plate glass,
doors, any special office entry, interior walls and finish work, floors and
floor covering, downspouts, gutters, heating and air conditioning systems, dock
boards, truck doors, dock bumpers, paving, plumbing work and fixtures, termite
and pest extermination, regular removal of trash and debris, regular mowing of
any grass, trimming, weed removal and general landscape maintenance, including
rail spur areas, keeping the parking areas, driveways, alleys and the whole of
the premises in a clean and sanitary condition, and maintaining any spur track
serving the premises (Tenant agrees to sign a joint maintenance agreement with
the railroad company servicing the premises, if requested by the railroad
company). Tenant shall not be obligated to repair any damage caused by fire,
tornado or other casualty covered by the insurance to be maintained by Landlord
pursuant to subparagraph 12(A) below, except that Tenant shall be obligated to
repair all wind damage to glass except with respect to tornado or hurricane
damage.

     B. Tenant shall not damage any demising wall or disturb the integrity and
support provided by any demising wall and shall, at its sole cost and expense,
promptly repair any damage or injury to any demising wall caused by Tenant or
its employees, agents or invitees.

     C. In the event the premises constitute a portion of a multiple occupancy
building, Tenant and its employees, customers and licensees shall have the
exclusive right to use the parking areas, if any, as may be designated by
Landlord in writing, subject to such reasonable rules
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and regulations, as Landlord may from time to time prescribe and subject to
rights of ingress and egress of other tenants. Landlord shall not be responsible
for enforcing Tenant's exclusive parking rights against any third parties.
Further, in multiple occupancy buildings, Landlord reserves the right to perform
the paving and landscape maintenance, exterior painting and common sewage line
plumbing which are otherwise Tenant's obligations under subparagraph A above,
and Tenant shall, in lieu of the obligations set forth under subparagraph A
above with respect to such items, be liable for its proportionate share (as
defined in subparagraph 4(B) above) of the cost and expense of the care for the
grounds around the building, including but not limited to, the mowing of grass,
care of shrubs, general landscaping, maintenance of parking areas, driveways and
alleys, exterior repainting and common sewage line plumbing; provided, however,
that Landlord shall have the right to require Tenant to pay such other
reasonable proportion of said mowing, shrub care and general landscaping costs
as may be determined by Landlord in its sole discretion; and further provided
that if Tenant or any other particular tenant of the building can be clearly
identified as being responsible for obstructions or stoppage of the common
sanitary sewage line, then Tenant, if Tenant is responsible, or such other
responsible tenant, shall pay the entire cost thereof, upon demand, as
additional rent. Tenant shall pay when due its share, determined as aforesaid,
of such costs and expenses along with the other tenants of the building to
Landlord upon demand, as additional rent, for the amount of its share as
aforesaid of such costs and expenses in the event Landlord elects to perform or
cause to be performed such work.

     D. In the event the premises constitute a portion of a multiple occupancy
building, Landlord shall have the right to coordinate any repairs and other
maintenance of any rail tracks serving or to serve the building, and if Tenant
uses such rail tracks, Tenant shall reimburse Landlord from time to time upon
demand, as additional rent, for a share of the costs of such repairs and
maintenance and any other sums specified in any agreement to which Landlord is a
party respecting such tracks, such share to be a fraction, the numerator of
which is the space contained in the premises, and the denominator of which is
the entire space occupied by rail users in the building.

     E. Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
for servicing all hot water, heating and air conditioning systems and equipment
within the premises. The maintenance contractor and the contract must be
approved by Landlord. The service contract must include all services suggested
by the equipment manufacturer within the operation/maintenance manual and must
become effective (and a copy thereof delivered to Landlord) with thirty (30)
days of the date Tenant takes possession of the premises.

     7. Alterations. Tenant shall not make any alterations, additions or
improvements to the premises (including but not limited to roof and wall
penetration) without the prior written consent of Landlord. Tenant may, without
the consent of Landlord, but at its own cost and expense and in a good
workmanlike manner erect such shelves, bins, machinery and trade fixtures as it
may deem advisable, without altering the basic character of the building or
improvements and without overloading or damaging such building or improvements,
and in each case complying with all applicable governmental laws, ordinances,
regulations and other requirements. All alterations, additions, improvements and
partitions erected by Tenant shall be and remain the property of Tenant during
the term of this lease and Tenant shall, unless Landlord otherwise elects as
hereinafter provided, remove all alterations, additions, improvements and
partitions erected by Tenant and restore the premises to their original
condition by the date of termination of this lease or upon earlier vacating of
the premises; provided, however, that if Landlord so elects prior to termination
of this lease or upon earlier vacating of the premises, such alterations,
additions, improvements and partitions shall become the property of Landlord as
of the date of termination of this lease or upon earlier vacating of the
premises and shall be delivered up to the Landlord with the premises. All
shelves, bins, machinery and trade fixtures installed by Tenant may be removed
by Tenant prior to the termination of this lease if Tenant so elects, and shall
be removed by the date of termination of this lease or upon earlier vacating of
the premises if required by Landlord; upon any such removal Tenant shall restore
the premises to their original condition. All such removals and restoration
shall be accomplished in a good workmanlike manner so as not to damage the
primary structure or structural qualities of the buildings and other
improvements situated on the premises.

     8. Signs. Tenant shall have the right to install signs upon the premises
only when first approved in writing by Landlord and subject to any applicable
governmental laws, ordinances, regulations and other requirements. Tenant shall
remove all such signs by the termination of this lease. Such installations and
removals shall be made in such manner as to avoid injury or defacement of the
building and other improvements, and Tenant shall repair any injury or
defacement, including without limitation discoloration, caused by such
installation and/or removal.

     9. Inspection. Landlord and Landlord's agents and representatives shall
have the right to enter and inspect the premises at any reasonable time during
business hours, for the purpose of ascertaining the condition of the premises or
in order to make such repairs as may be required or permitted to be made by
Landlord under the terms of this lease. During the period that is six (6) months
prior to the end of the term hereof, Landlord and Landlord's agents and
representatives shall have the right to enter the premises at any reasonable
time during business hours for the purpose of showing the premises and shall
have the right to erect on the premises a suitable sign indicating the premises
are available. Tenant shall give written notice to Landlord at least thirty (30)
days prior to vacating the premises and shall arrange to meet with Landlord for
a joint inspection of the premises prior to vacating. In the event of Tenant's
failure to give such notice or arrange such joint inspection, Landlord's
inspection at or after Tenant's vacating the premises shall be conclusively
deemed correct for purposes of determining Tenant's responsibility for repairs
and restoration.

     10. Utilities. Landlord agrees to provide at its cost water, electricity
and telephone service connections into the premises; but Tenant shall pay for
all water, gas, heat, light, power, telephone, sewer, sprinkler charges and
other utilities and services used on or from the premises, together with any
taxes, penalties, surcharges or the like pertaining thereto and any maintenance
charges for utilities and shall furnish all electric light bulbs and tubes. If
any such services are not separately metered to Tenant, Tenant shall pay a
reasonable proportion as determined by Landlord of all charges jointly metered
with other premises. Landlord shall in no event be liable for any interruption
or failure of utility services on the premises.

     11. Assignment and Subletting. Tenant shall not have the right to assign
this lease or to sublet the whole or any part of the premises without the prior
written consent of Landlord. Notwithstanding any permitted assignment or
subletting, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of the rent herein specified and for
compliance with all of its other obligations under the terms, provisions and
covenants of this lease. Upon the occurrence of an "event of default" as
hereinafter defined, if the premises or any part thereof are 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 subtenant all
rents becoming due to Tenant under such assignment or sublease and apply such
rent against any sums due to Landlord from Tenant hereunder, and no such
collection shall be construed to constitute a novation or a release of Tenant
from the further performance of Tenant's obligations hereunder.

     12. Fire and Casualty Damage.

     A. Landlord agrees to maintain standard fire and extended coverage
insurance covering the building of which the premises are a part in an amount
not less than 80% (or such greater percentage as may be necessary to comply with
the provisions of any co-insurance clauses of the policy) of the "replacement
cost" thereof as such term is defined in the Replacement Cost Endorsement to be
attached thereto, insuring against the perils of Fire, Lightning and Extended
Coverage, such coverages and endorsements to be as defined, provided and limited
in the standard bureau forms prescribed by the insurance regulatory authority
for the State in which the premises are situated for use by insurance companies
admitted in such state for the writing of such insurance on risks located within
such state. Subject to the provisions of subparagraphs 12(C), 12(D) and 12(E)
below, such insurance shall be for the sole benefit of Landlord and under its
sole control. If during the second full lease year after the commencement date
of this lease, or during any subsequent year of the primary term or any renewal
or extension, Landlord's cost of maintaining such insurance shall exceed
Landlord's cost of maintaining such insurance for the first full lease year of
the term hereof, Tenant agrees to pay to Landlord as additional rental, the
amount of such excess (or in the event the premises constitute a portion of a
multiple occupancy building. Tenant's full proportionate share [as defined in
subparagraph 4(B) above] of such excess). Said payments shall be made to
Landlord within ten (10) days after presentation to Tenant of Landlord's
statement setting forth the amount due. Any payment to be made pursuant to this
subparagraph A with respect to the year in which this lease commences or
terminates shall bear the same ratio to the payment which would be required to
be made for the full year as the part of such year covered by the term of this
lease bears to a full year.

     B. If the buildings situated upon the premises should be damaged or
destroyed by fire, tornado or other casualty, Tenant shall give immediate
written notice thereof to Landlord.

     C. If the buildings situated upon the premises should be totally destroyed
by fire, tornado or other casualty, or if they should be so damaged thereby
that rebuilding or repairs cannot in Landlord's estimation be completed within
two hundred (200) days after the date upon which Landlord is notified by Tenant
of such damage, this lease shall terminate and the rent shall be abated during
the unexpired portion of this lease, effective upon the date of the occurrence
of such damage.

     D. If the buildings situated upon the premises should be damaged by any
peril covered by the insurance to be provided by Landlord under subparagraph
12(A) above, but only to such extent that rebuilding or repairs can in
Landlord's estimation be completed within two hundred (200) days after the date
upon which Landlord is notified by Tenant of such damage, this lease shall not
terminate, and Landlord shall at its sole cost and expense thereupon proceed
with reasonable diligence to rebuild and repair such buildings to substantially
the condition in which they existed prior to such damage, except that Landlord
shall not be required to rebuild, repair or replace any part of the partitions,
fixtures, additions and other improvements which may have been placed in, on or
about the premises by Tenant. If the premises are untenantable in whole or in
part following such damage, the rent payable hereunder during the period in
which they are untenantable shall be reduced to such extent as may be fair and
reasonable under all of the circumstances. In the event that Landlord should
fail to complete such repairs and rebuilding within two hundred (200) days after
the date upon which Landlord is notified by Tenant of such damage, Tenant may at
its option terminate this lease by delivering written notice of termination to
Landlord as Tenant's exclusive remedy, whereupon all rights and obligations
hereunder shall cease and terminate.

     E. Notwithstanding anything herein to the contrary, in the event the holder
of any indebtedness secured by a mortgage or deed of trust covering the premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.

     F. Each of Landlord and Tenant hereby releases the other from any loss or
damage to property caused by fire or any other perils insured through or under
them by way of subrogation or otherwise for any loss or damage to property
caused by fire or any other perils insured in policies of insurance covering
such property, even if such loss or damage shall have been caused by the fault
or negligence of the other party, or anyone for whom such party may be
responsible; provided, however, that this release shall be applicable and in
force and effect only with respect to loss or damage occurring during such times
as the releasor's policies shall contain a clause or endorsement to the effect
that any such release shall not adversely affect or impair said policies or
prejudice the right of the releasor to recover thereunder and then only to the
extent of the insurance proceeds payable under such policies. Each of the
Landlord and Tenant agrees that it will request its insurance carriers to
include in its policies such a clause or endorsement. If extra cost shall be
charged therefor, each party shall advise the other thereof and of the amount of
the extra cost, and the other party, at its election, may pay the same, but
shall not be obligated to do so.

     13. Liability. Landlord shall not be liable to Tenant or Tenant's
employees, agents, patrons or visitors, or to any other person whomsoever, for
any injury to person or damage to property on or about the premises, resulting
from and/or caused in part or whole by the negligence or misconduct of Tenant,
its agents, servants or employees, or of any other person entering upon the
premises, or caused by the buildings and improvements located on the premises
becoming out of repair, or cause by leakage of gas, oil, water or steam or by
electricity emanating from the premises, or due to any cause whatsoever, and
Tenant hereby covenants and agrees that it will at all times indemnify and hold
safe and harmless the property, the Landlord (including without limitation the
trustee and beneficiaries if Landlord is a trust), Landlord's

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agents and employees from any loss, liability, claims, suits, costs, expenses,
including without limitation attorney's fees and damages, both real and
alleged, arising out of any such damage or injury; except injury to persons or
damage to property the sole cause of which is the negligence of Landlord or the
failure of Landlord to repair any part of the premises which Landlord is
obligated to repair and maintain hereunder within a reasonable time after the
receipt of written notice from Tenant of needed repairs. Tenant shall procure
and maintain throughout the term of this lease a policy or policies of
insurance, at its sole cost and expense, insuring both Landlord and Tenant
against all claims, demands or actions arising out of or in connection with:
(i) the premises; (ii) the condition of the premises; (iii) Tenant's operations
in and maintenance and use of the premises; and (iv) Tenant's liability assumed
under this lease, the limits of such policy or policies to be in the amount of
not less than $300,000 per occurrence in respect of injury to persons
(including death), and in the amount of not less than $50,000 per occurrence in
respect of property damage or destruction, including loss of use thereof. All
such policies shall be procured by Tenant from responsible insurance companies
satisfactory to Landlord. Certified copies of such policies, together with
receipt evidencing payment of premiums therefor, shall be delivered to Landlord
prior to the commencement date of this lease. Not less than fifteen (15) days
prior to the expiration date of any such policies, certified copies of the
renewals thereof (bearing notations evidencing the payment of renewal premiums)
shall be delivered to Landlord. Such policies shall further provide that not
less than thirty (30) days written notice shall be given to Landlord before
such policy may be cancelled or changed to reduce insurance provided thereby.

     14. Condemnation.
     A. If the whole or any substantial part of the premises should be taken
for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof and the taking would prevent or materially interfere with the use of
the premises for the purpose for which they are being used, this lease shall
terminate and the rent shall be abated during the unexpired portion of this
lease, effective when the physical taking of said premises shall occur.

     B. If part of the premises shall be taken for any public or quasi-public
use under any governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this lease is not
terminated as provided in the subparagraph above, this lease shall not
terminate but the rent payable hereunder during the unexpired portion of this
lease shall be reduced to such extent as may be fair and reasonable under all
of the circumstances.

     C. In the event of any such taking or private purchase in lieu thereof,
Landlord and Tenant shall be entitled to receive and retain such separate
awards and/or portion of lump sum awards as may be allocated to their
respective interests in any condemnation proceedings.

     15. Holding Over. Tenant will, at the termination of this lease by lapse of
time or otherwise, yield up immediate possession to Landlord. If Landlord
agrees in writing that Tenant may hold over the expiration or termination of
this lease, unless the parties hereto otherwise agree in writing on the terms of
such holding over, the hold over tenancy shall be subject to termination by
Landlord at any time upon not less than five (5) days advance written notice,
or by Tenant at any time upon not less than thirty (30) days advance written
notice, and all of the other terms and provisions of this lease shall be
applicable during that period, except that Tenant shall pay Landlord from time
to time upon demand, as rental for the period of any hold over, an amount
equal to one and one-half (1-1/2) the rent in effect on the termination date,
computed on a daily basis for each day of the hold over period. No holding over
by Tenant, whether with or without consent of Landlord, shall operate to extend
this lease except as otherwise expressly provided. The proceeding provisions of
this paragraph 15 shall not be construed as Landlord's consent for Tenant to
hold over.

     16. Quiet Enjoyment. Landlord covenants that it now has, or will acquire
before Tenant takes possession of the premises, good title to the premises,
free and clear of all liens and encumbrances, excepting only the lien for
current taxes not yet due, such mortgage or mortgages as are permitted by the
terms of this lease, zoning ordinances and other building and fire ordinances
and governmental regulations relating to the use of such property, and
easements, restrictions and other conditions of record. In the event this lease
is a sublease, then Tenant agrees to take the premises subject to the
provisions of the prior leases. Landlord represents and warrants that it has
full right and authority to enter into this lease and that Tenant, upon paying
the rental herein set forth and performing its other covenants and agreements
herein set forth, shall peaceably and quietly have, hold and enjoy the premises
for the term hereof without hindrance or molestation from Landlord, subject to
the terms and provisions of this lease.

     17. Events of Default. The following events shall be deemed to be events
of default by Tenant under this lease:

          (a) Tenant shall fail to pay any installment of the rent herein
     reserved when due, or any payment with respect to taxes hereunder when due,
     or any other payment or reimbursement to Landlord required herein when due,
     and such failure shall continue for a period of five (5) days from the date
     such payment was due.

          (b) Tenant shall become insolvent, or shall make a transfer in fraud
     of creditors, or shall make an assignment for the benefit of creditors.

          (c) Tenant shall file a petition under any section or chapter of the
     National Bankruptcy Act, as amended, or under any similar law or status of
     the United States or any State thereof; or Tenant shall be adjudged
     bankrupt or insolvent in proceedings filed against Tenant thereunder.

          (d) A receiver or trustee shall be appointed for all or substantially
     all of the assets of Tenant.

          (e) Tenant shall desert or vacate any substantial portion of the
     premises.

          (f) Tenant shall fail to comply with any term, provision or covenant
     of this lease (other than the foregoing in this Paragraph 17).

     18. Remedies. Upon the occurrence of any of such events of default
described in Paragraph 17 hereof, Landlord shall have the option to pursue any
one or more of the following remedies without any notice or demand whatsoever:

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

          (b) Enter upon and take possession of the premises and expel or remove
     Tenant and any other person who may be occupying such premises or any part
     thereof, by force if necessary, without being liable for prosecution or any
     claim for damages therefor, and relet the premises and receive the rent
     therefor; and Tenant agrees to pay to the Landlord on demand any deficiency
     that may arise by reason of such reletting. In the event Landlord is
     successful in reletting the premises at a rental in excess of that agreed
     to be paid by Tenant pursuant to the terms of this lease, Landlord and
     Tenant each mutually agree that Tenant shall not be entitled, under any
     circumstances, to such excess rental, and Tenant does hereby specifically
     waive any claim to such excess rental.

          (c) Enter upon the premises, by force if necessary, without being
     liable for prosecution or any claim for damages therefor, and do whatever
     Tenant is obligated to do under the terms of this lease; and Tenant agrees
     to reimburse Landlord on demand for any expenses which Landlord may incur
     in thus effecting compliance with Tenant's obligations under this lease,
     and Tenant further agrees that Landlord shall not be liable for any damages
     resulting to the Tenant from such action, whether caused by the negligence
     of Landlord or otherwise.

In the event Tenant fails to pay any installment of rent hereunder as and when
such installment is due, to help defray the additional cost to Landlord for
processing such late payments Tenant shall pay to Landlord on demand a late
charge in an amount equal to five percent (5%) of such installment; and the
failure to pay such amount within ten (10) days after demand therefor shall be
an event of default hereunder. The provision for such late charge shall be in
addition to all of the Landlord's other rights and remedies hereunder or at law
and shall not be construed as liquidated damages or as limiting Landlord's
remedies in any manner.

     Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants herein contained. No act or thing done by the Landlord or its agents
during the term hereby granted shall be deemed a termination of this lease or
an acceptance of the surrender of the premises, and no agreement to terminate
this lease or accept a surrender of said premises shall be valid unless in
writing signed by Landlord. No waiver by Landlord of any violation or breach of
any of the terms, provisions and covenants herein contained shall be deemed or
construed to constitute a waiver of any other violation or breach of any of
the terms, provisions and covenants herein contained. Landlord's acceptance of
the payment of rental or other payments hereunder after the occurrence of an
event of default shall not be construed as a waiver of such default, unless
Landlord so notifies Tenant in writing. Forbearance by Landlord to enforce one
or more of the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default or of Landlord's
right to enforce any such remedies with respect to such default or any
subsequent default. If, on account of any breach or default by Tenant in
Tenant's obligations under the terms and conditions of this lease, it shall
become necessary or appropriate for Landlord to employ or consult with an
attorney concerning or to enforce or defend any of Landlord's rights or
remedies hereunder, Tenant agrees to pay any reasonable attorney's fees so
incurred.

     19. Landlord's Lien. In addition to any statutory lien for rent in
Landlord's favor, Landlord shall have and Tenant hereby grants to Landlord a
continuing security interest for all rentals and other sums of money becoming
due hereunder from Tenant, upon all goods, wares, equipment, fixtures,
furniture, inventory, accounts, contract rights, chattel paper and other
personal property of Tenant situated on the premises, and such property shall
not be removed therefrom without the consent of Landlord until all arrearages in
rent as well as any and all other sums of money then due to Landlord hereunder
shall first have been paid and discharged. In the event of a default under this
lease, Landlord shall have, in addition to any other remedies provided herein
or by law, all rights and remedies under the Uniform Commercial Code, including
without limitation the right to sell the property described in this Paragraph
19 at public or private sale upon five (5) days notice to Tenant. Tenant hereby
agrees to execute such financing statements and other instruments necessary or
desirable to Landlord's discretion to perfect the security interest hereby
created. Any statutory lien for rent is not hereby waived, the express
contractual lien herein granted being in addition and supplementary thereto.

  20. Mortgages. Tenant accepts this lease subject and subordinate to any
mortgage(s) and/or deed(s) of trust now or at any time hereafter constituting a
lien or charge upon the premises or the improvements situated thereon,
provided, however, that if the mortgagee, trustee, or holder of any such
mortgage or deed of trust elects to have Tenant's interest in this lease
superior to any such instrument, then by notice to Tenant from such mortgagee,
trustee or holder, this lease shall be deemed superior to such lien, whether
this lease was executed before or after said mortgage or deed of trust. Tenant
shall at any time hereafter on demand execute any instruments, releases or
other documents which may be required by any mortgagee for the purpose of
subjecting and subordinating this lease to the lien of any such mortgage.

     21. Landlord's Default. In the event Landlord should become in default in
any payments due on any such mortgage described in Paragraph 20 hereof or in
the payment of taxes or any other items which might become a lien upon the
premises and which Tenant is not obligated to pay under the terms and
provisions of this lease, Tenant is authorized and empowered after giving
Landlord five (5) days prior written notice of such default and Landlord's
failure to cure such default, to pay any such items for and on behalf of
Landlord, and the amount of any item so paid by Tenant for or on behalf of
Landlord, together with any interest or penalty required to be paid in
connection therewith, shall
<PAGE>   4
be payable on demand by Landlord to Tenant; provided, however, that Tenant shall
not be authorized and empowered to make any payment under the terms of this
Paragraph 21 unless the item paid shall be superior to Tenant's interest
hereunder. In the event Tenant pays any mortgage debt in full, in accordance
with this paragraph, it shall, at its election, be entitled to the mortgage
security by assignment or subrogation.

     22.  MECHANIC'S LIENS. Tenant shall have no authority, express or implied,
to create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner to bind, the interest of Landlord in the premises or to
charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs, and each such claim shall allect and each such
lien shall attach to, if at all, only the leasehold interest granted to Tenant
by this instrument. Tenant covenants and agrees that it will pay or cause to be
paid all sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the premises on
which any lien is or can be validly and legally asserted against its leasehold
interest in the premises or the improvements thereon and that it will save and
hold Landlord harmless from any and all loss, cost or expense based on or
arising out of asserted claims or liens against the leasehold estate or against
the right, title and interest of the Landlord in the premises or under the terms
of this lease.

     23.  NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by Landlord to Tenant or with reference to the sending, mailing or delivery of
any notice or the making of any payment by Tenant to Landlord shall be deemed to
be complied with when and if the following steps are taken:

     (a) All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address hereinbelow, set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith. Tenant's obligation to pay rent and any
other amounts to Landlord under the terms of this lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Landlord.

          (b) All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address hereinbelow set forth, or at such
other address within the continental United States as Tenant may specify from
time to time by written notice delivered in accordance herewith.

          (c) Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered whether actually received or not when
deposited in the United States Mail, postage prepaid, Certified or Registered
Mail, addressed to the parties hereto at the respective addresses set out below,
or at such other address as they have theretofore specified by written notice
delivered in accordance herewith:

         LANDLORD:                                         TENANT:

CROW SPARKS ASSOCIATES TWO                       DAMON DISTRIBUTING CO.
----------------------------                     -----------------------
TRAMMELL CROW COMPANY                            822 Packer Way
----------------------------                     -----------------------
2180 Sand Hill Road, Ste 100                     Sparks, NV  89431
----------------------------                     -----------------------
Menlo Park, CA  94025
----------------------------

If and when included within the term "Landlord", as used in this instrument,
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice specifying some
individual at some specific address for the receipt of notices and payments to
Landlord: if and when included, within the term "Tenant", as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Tenant. All parties
included within the terms "Landlord" and "Tenant", respectively, shall be bound
by notices given in accordance with the provisions of this paragraph to the same
effect as if each had received such notice.

     24. MISCELLANEOUS.

     A.  Words of any gender used in this lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.

     B.  The terms, provisions and covenants and conditions contained in this
lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, legal representatives, successors and
permitted assigns, except as otherwise herein expressly provided. Landlord shall
have the right to assign any of its rights and obligations under this lease.
Each party agrees to furnish to the other, promptly upon demand, a corporate
resolution, proof of due authorization by partners, or other appropriate
documentation evidencing the due authorization of such party to enter into this
lease.

     C.  The captions inserted in this lease are for convenience only and in no
way define, limit or otherwise describe the scope or intent of this lease, or
any provision hereof, or in any way affect the interpretation of this lease.

     D.  Tenant agrees from time to time within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this lease is in full force and effect, the date to
which rent has been paid, the unexpired term of this lease and such other
matters pertaining to this lease as may be requested by Landlord. It is
understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this lease.

     E.  This lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.

     F.  All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this lease shall survive the
expiration or earlier termination of the term hereof, including without
limitation all payment obligations with respect to taxes and insurance and all
obligations concerning the condition of the premises. Upon the expiration or
earlier termination of the term hereof, and prior to Tenant vacating the
premises, Tenant shall pay to Landlord any amount reasonably estimated by
Landlord as necessary to put the premises, including without limitation all
heating and air conditioning systems and equipment therein, in good condition
and repair. Tenant shall also, prior to vacating the premises, Tenant shall pay
to Landlord the amount, as estimated by Landlord, of Tenant's obligation
hereunder for real estate taxes and insurance premiums for the year in which the
lease expires or terminates. All such amounts shall be used and held by Landlord
for payment of such obligations of Tenant hereunder, with Tenant being liable
for any additional costs therefor upon demand by Landlord, or with any excess to
be returned to Tenant after all such obligations have been determined and
satisfied, as the case may be. Any security deposit held by Landlord shall be
credited against the amount payable by Tenant under the Paragraph 24(F).

     G.  If any clause or provision of this lease is illegal, invalid or
unenforceable under 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 shall not be affected thereby, and it is also the
intention of the parties to this lease that in lieu of each clause or provision
of this lease that is illegal, invalid or unenforceable, there be added as a
part of this lease contract a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.

     H.  Because the premises are on the open market and are presently being
shown, this lease shall be treated as an offer with the premises being subject
to prior lease and such offer subject to withdrawal or non-acceptance by
Landlord or to other use of the premises without notice, and this lease shall
not be valid or binding unless and until accepted by Landlord in writing and a
fully executed copy delivered to both parties hereto.

     I.  All references in this lease to "the date hereof" or similar references
shall be deemed to refer to the last date, in point of time, on which all
parties hereto have executed this lease.

     25. ADDITIONAL PROVISIONS.
         See Additional Paragraphs 26-28  attached hereto and made a part
hereof.

     EXECUTED BY LANDLORD, this 21 day of December, 1982.

                                             CROW SPARKS ASSOCIATES TWO
Attest/Witness                               ----------------------------------

/s/ D.L. Christian                           By: /s/ Dennis E. Singleton
-----------------------------------          ----------------------------------
                                                     Dennis E. Singleton

Title:                                       Title: Partner
                                             ----------------------------------

EXECUTED BY TENANT, this 3rd day of December, 1982.

                                             DAMON DISTRIBUTING CO.
Attest/Witness                               ----------------------------------

/s/ Jody Paul                                By: [ILLEGIBLE SIGNATURE]
-----------------------------------          ----------------------------------
Title: Admin. Assistant                      Title: President
-----------------------------------          ----------------------------------

<PAGE>   5
                                            LANDLORD: CROW SPARKS ASSOCIATES TWO

                                             TENANT:  DAMON DISTRIBUTING CO.

ADDITIONAL PROVISIONS:

Paragraph 26. Rental

The monthly rental for this facility shall be as follows:

     Months  1 - 30      $3,888.00 per month
     Months 31 - 60      $3,888.00 + CPI per month

     Rental in months 31 - 60 shall be the base rental of $3,888.00 per month,
     adjusted by any increase in the Consumer Price Index, as determined by the
     U.S. Bureau of Labor Statistics for U.S. City Average for all Urban
     Consumers over the first thirty (30) months of the lease. In no event will
     the monthly rental be less than $3,888.00.

Paragraph 27. Financial Statements

If Tenant is, or ever has been, in default of any terms or conditions of this
Lease Agreement, Tenant agrees to provide Landlord during this lease term, or
any extension thereof, upon written request, the most current set of financial
statements for Damon Distributing Co.

Paragraph 28. Renewal Option

Tenant shall have the right to renew for an additional five year period with
the initial renewal rental to be the rental during the previous two years
adjusted by any increase in the Consumer Price Index, as determined by the U.S.
Bureau of Labor Statistics for U.S. City Average for all Urban Consumers over
the previous two year term. In any event, monthly rental will be no less than
rental for the previous two year term. Rental payments for months 31 - 60 of
the renewal period will be adjusted in the same manner as months 31 - 60 of the
initial term. Tenant shall give written notice to exercise said option six
months prior to the expiration of this lease term and shall not be in default
of any terms or conditions of this lease.

<PAGE>   6
                                                                     EXHIBIT "A"

                                            LANDLORD: CROW SPARKS ASSOCIATES TWO

                                            TENANT:   DAMON DISTRIBUTING CO.

                               LEGAL DESCRIPTION

21,600 square feet, more or less, of office and warehouse space as outlined in
red on the attached site plan. The premises described are commonly known and
designated as 822 Packer Way, Building "C", East Glendale Business Center,
Sparks, Nevada.

<PAGE>   7
                                                       ATTACHMENT TO EXHIBIT "A"

                                   [SITE MAP]

<PAGE>   8
                                                                     EXHIBIT "B"

                                            LANDLORD: CROW SPARKS ASSOCIATES TWO

                                            TENANT:   DAMON DISTRIBUTING CO.

                                 SPECIFICATIONS

INTERIOR IMPROVEMENTS: Landlord will construct at its own expense approximately
700 square feet of office area. This area will include three private offices, a
storage room, a reception area and two restrooms.

The office area would have the following finishes:

     -- heating, ventilation and air conditioning throughout
     -- acoustical tile ceiling
     -- fire sprinklers
     -- recessed fluorescent lighting (standard office footcandle)
     -- painted walls (insulation in all perimeter and restroom walls)
     -- carpeted offices
     -- vinyl asbestos tile in all other areas, color selection by Tenant
     -- convenient electrical and telephone outlets
     -- 3' x 7' solid core wood doors and metal door frames
     -- electrical service, 200 amps of 120/208 volt power
     -- separate gas and electric meters
     -- sheet vinyl in restrooms
     -- restrooms to contain:

        men       one sink, one water closet
        women     one sink, one water closet

In addition, Landlord will construct, at its own expense, a room of
approximately 1,200 square feet. This room will have the following finishes:

     -- 10 foot ceiling height
     -- sheetrock walls and ceilings
     -- surface mounted fluorescent lights
     -- all walls painted (one coat semi-gloss paint)
     -- electrical power to the facility
     -- sealed concrete floor with two floor drains (as shown on the enclosed
          floor plan)
     -- hot and cold running water to be provided in four locations as shown on
          the attached floor plan)
     -- Tenant agrees to construct at its own expense, a sloped concrete floor
          within this room
     -- Tenant agrees to install in this room all electrical and plumbing
          connections necessary to its bottling operation.

The warehouse will have the following finishes:

     -- sealed concrete floor
     -- continuous strip fluorescent lights
     -- gas space heating
     -- full height sheetrock demising walls.

<PAGE>   9
EXTENSION AGREEMENT to be attached to and form a part of Lease (which together
with any amendments, modifications and extensions hereto are hereinafter called
the Lease), made the 21st day of December, 1982

     Between           Crow Sparks Associates Two                      as Lessor

     and               Damon Distributing Co., a Nevada Corporation
                                                                       as Lessee
covering the premises known as:

     822 Packer Way, Sparks, Nevada 89431

WITNESSETH that the Lease is hereby renewed and extended for a further term of
Sixty (60) months to commence on the First day of February, 1988 and to end on
the Thirty-first day of January, 1993, on condition that Lessor and Lessee
comply with all the provisions of the covenants and agreements contained in
the lease, except:

1)   Monthly rental shall be $5,184.00 inclusive of Tenant's share of any and
     all (a) taxes, assessments, levies, charges, or similar items, (b)
     insurance, and (c) common area maintenance, referred to in the Lease.

2)   Month one (1) of the renewal term shall be free of rent.

3)   Crow Sparks Associates Two will return to Damon Distributing Company the
     Security Deposit in the amount of $3,888.00 upon commencement of the
     renewal term.

4)   Landlord will at his sole cost and expense, construct improvements to the
     Premises at 822 Packer Way, Sparks, Nevada per the quote given by Wilford
     Construction Company on September 2, 1987. (Attached as Exhibit "B"
     hereto).
================================================================================
IN WITNESS WHEREOF, the parties hereto have signed and sealed this extension
agreement this 20th day of November, 1987.
               ----        --------

WITNESS:                                          Crow Sparks Associates Two
                                                  ------------------------------
                                                             LESSOR

[ILLEGIBLE SIGNATURE]                             By /s/ Richard C. Decker
-----------------------------                     ------------------------------
                                                              AGENT

ATTEST:                                           DAMON DISTRIBUTING COMPANY
                                                  ------------------------------
                                                             LESSEE

/s/ JoAnn Christensen                             By [ILLEGIBLE SIGNATURE]
-----------------------------                     ------------------------------
                                                               TITLE

<PAGE>   10
                                                                     EXHIBIT "B"

                                            LANDLORD: Crow Sparks Associates Two

                                            TENANT:   Damon Distributing Co.

                                 SPECIFICATIONS

Landlord will at his sole cost and expense, construct improvements to the
Premises at 822 Packer Way, Sparks, Nevada as follows:

<TABLE>
<CAPTION>
<S>                                                      <C>
-- Upgrade Heating System                                 $ 1,785.00
-- R-11 Ceiling Insulation                                    449.00
-- Replace carpet and base                                    645.00
-- Insulate 96 square feet (blown insulation)                 260.00
-- paint interior offices                                     806.00
-- Ceramic tile floor (bottling room)                       4,000.00
-- Add two (2) new offices                                  6,480.00
-- Labor                                                      672.00
                                                          ----------
   Sub total                                               15,097.00

   Profit & Overhead                                        1,509.70
                                                          ----------
   TOTAL                                                  $16,606.70
</TABLE>
<PAGE>   11
                              EXTENSION AGREEMENT

EXTENSION AGREEMENT to be attached to and form a part of the Lease (which
together with any amendments, modifications and extensions hereto are
hereinafter called the Lease), made the 21st day of December, 1982

     Between Packer Way II, Limited Partnership                 As Lessor
     (Formerly known as Crow Sparks Associates Two)

     And Damon Distributing Co., a Nevada Corporation           As Lessee

covering the premises known as 822 Packer Way, Sparks, Nevada. WITNESSETH that
the Lease is hereby renewed and extended for a further term of thirty six (36)
months to commence on the first day of February, 1993, and to end on the
thirty-first day of January, 1996.

Lessor and Lessee comply with all the provisions of the covenants and
agreements contained in the Lease.

Commencing June 1, 1990, Monthly rental for the premises shall be FIVE THOUSAND
FIVE HUNDRED AND EIGHT DOLLARS ($5,508.00) inclusive of Tenant's share of any
and all (a) taxes, assessments, levies, charges, or similar items, (b)
insurance, and (c) common area maintenance, referred to in the Lease.

Landlord at its sole cost and expense, agrees to construct a new bottling room
and floor on the Premises at 822 Packer Way, Sparks, Nevada per the attached
drawing (Exhibit A) and specifications (Exhibit B).

IN WITNESS WHEREOF, the parties hereto have signed and sealed this extension
agreement this 11th day of April, 1990.

AGREED AND ACCEPTED:

[ILLEGIBLE SIGNATURE]                         [ILLEGIBLE SIGNATURE]
----------------------------------            --------------------------------
Damon Distributing Company                    Packer Way II, Limited Partnership

President                                     Agent
----------------------------------            --------------------------------
Title                                         Title
<PAGE>   12
EXTENSION AGREEMENT to be attached to and form a part of Lease (which together
with any amendments, modifications and extensions hereto are hereinafter called
the Lease), made the 21st day of December, 1982

          Between   Packer Way II Limited Partnership, as Lessor

          And       Damon Industries, a Nevada Corporation, (Formerly Damon
                    Distributing Company) as Lessee

covering the premises known as: 822 Packer Way, Sparks, Nevada

WITNESSETH that the Lease is hereby renewed and extended for a further term of
thirty-six (36) months to commence on the 1st day of February, 1996, and to end
on the 31st day of January, 1999, on condition that Lessor and Lessee comply
with all the provisions of the covenants and agreements contained in the Lease
except that:

          Monthly Rental for the Premises shall be as follows:

               February 1, 1996 -- January 31, 1999 -- $6,480.00 per month
               ($.30 SF/month) inclusive of Lessee's share of any and all (a)
               taxes, assessments, levies, charges, or similar items, (b)
               insurance, and (c) common area maintenance, referred to in
               the Lease.

     IN WITNESS WHEREOF, the parties hereto have signed and sealed this
     Extension Agreement this 25th day of January, 1993.
                              ----        -------

     AGREED AND ACCEPTED:

                [ILLEGIBLE SIGNATURE]                DOUGLAS S. DAMON
               ----------------------------------  --------------------------
               PACKER WAY II LIMITED PARTNERSHIP   DAMON INDUSTRIES,
                                                   A NEVADA CORPORATION

                Agent                              PRESIDENT
               ----------------------------------  --------------------------
               TITLE                               TITLE

               1-25-93                             1/22/93
               ----------------------------------  --------------------------
               DATE                                DATE
<PAGE>   13
                 FOURTH EXTENSION AGREEMENT TO LEASE AGREEMENT

     THIS FOURTH EXTENSION TO LEASE AGREEMENT is entered into as of the 11th
day of July, 1997 by and between SECURITY CAPITAL INDUSTRIAL TRUST (the
"Landlord") and DAMON INDUSTRIES (the "Tenant").

                              W I T N E S S E T H:
                            -----------------------

     WHEREAS, Landlord (or its predecessor-in-interest) and Tenant have entered
into a Lease, dated as of the 21st day of December, 1982, as amended by those
certain Extension Agreements, dated the 20th day of November, 1987, 10th day of
April, 1990, and 25th day of January 1993, respectively, pursuant to which
Landlord leased to Tenant certain premises located at 822 Packer Way, Sparks,
Nevada (such lease, as heretofore and hereafter modified, being herein referred
to as the "Lease"); and

     WHEREAS, Landlord and Tenant desire to amend the Lease on the terms and
conditions set forth below.

     NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Landlord and Tenant agree as follows:

1. The term of the Lease is extended for thirty-six (36) months, commencing on
February 1, 1999 and continuing through and including January 31, 2002 (the
"Extension Period").

2. Monthly Base Rent during the Extension Period shall be Six Thousand Two
Hundred Sixty-four and no/100 ($6,264.00) per month ($.29 per square foot per
month Triple Net).

3. The estimated monthly Basic Operating Costs for the Extension Period will be
determined based on the 1999 Estimated Operating Expenses, prepared by
Landlord, or its agents.

4. For purposes of calculating the Basic Operating Cost of the Premises,
Tenant's Proportionate Share for the Premises shall be 50% for the Building,
and 20.79% for the Project.

5. Tenant will take the Premises in its "as-is" condition.

6. Landlord and Tenant hereby acknowledge and agree that upon full execution of
this Fourth Amendment, the Lease Guarantee provided by Douglas S. Damon for the
Lease dated the 21st day of December, 1982, shall no longer be in effect and
shall thereby be deemed null and void.

7. Any obligation or liability whatsoever of Security Capital Industrial Trust,
a Maryland real estate investment trust, which may arise at any time under the
Lease or this Agreement or any obligation or liability which may be incurred by
it pursuant to any other instrument, transaction of undertaking contemplated
hereby, shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of, its trustees, directors,
shareholders, officers, employees, or agents regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.

8. Except as otherwise specifically modified herein, all defined terms used in
this Fourth Extension Agreement shall have the same respective meanings as
provided for such defined terms in the Lease.

9. Except as herein amended, the terms and conditions of the Lease and any
amendments thereto, shall continue in full force and effect and the Lease (and
any amendments thereto) as amended herein is hereby ratified and affirmed by
Landlord and Tenant. Exhibit A attached to this Fourth Extension Agreement is
made a part hereof for all purposes.

10. This Fourth Extension Agreement shall be construed under and enforceable in
accordance with the laws of the State of Nevada.

IN WITNESS WHEREOF, the parties hereto have signed this Fourth Extension
Agreement to Lease Agreement in multiple counterparts, each of which shall have
the force and effect of an original.

DAMON INDUSTRIES                SECURITY CAPITAL INDUSTRIAL TRUST
a Nevada corporation            a Maryland real estate investment trust

By: /s/ Douglas S. Damon        By: /s/ Ned K. Anderson
-------------------------       -----------------------------------

Name: Douglas S. Damon          Name: Ned K. Anderson
-------------------------       -----------------------------------
Title: President                Title: Senior Vice President
-------------------------       -----------------------------------
<PAGE>   14
                       FIFTH AMENDMENT TO LEASE AGREEMENT

     THIS FIFTH AMENDMENT TO LEASE AGREEMENT is entered into as of the 21st day
of September, 2000 by and between PROLOGIS TRUST, formerly known as SECURITY
CAPITAL INDUSTRIAL TRUST, (the "Landlord") and DAMON INDUSTRIES (the "Tenant").

                              W I T N E S S E T H:

     WHEREAS, Landlord (or its predecessor-in-interest) and Tenant have entered
into a Lease, dated as of the 21st day of December, 1982, as amended by those
certain Extension Agreements dated the 20th day of November, 1987, the 10th day
of April, 1990, the 25th day of January 1993 and the 11th day of July 1997,
respectively, pursuant to which Landlord leased to Tenant certain premises
located at 822 Packer Way, Sparks, Nevada (such lease, as heretofore and
hereafter modified, being herein referred to as the "Lease").

     WHEREAS, Landlord and Tenant desire to extend the Lease on the terms and
conditions set forth below:

     NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Landlord and Tenant agree as follows:

     1.   The Lease is hereby amended by expanding the leased premises by
approximately 7,200 square feet ("Expansion Premises") more commonly known as
820 Packer Way, Sparks, NV.

     2.   The term for the Expansion Premises will commence on August 1, 2000
and continuing through and terminating on January 31, 2002.

     3.   Effective on the Expansion Premises Commencement Date, the Monthly
Base Rent for the Expansion Premises shall reflect the following:

          August 1, 2000 -- January 31, 2002   $2,376.00/mo. ($0.33 s.f./mo.NNN)

     4.   Effective on the Expansion Premises Commencement Date, the estimated
monthly Basic Operating Costs for the Expansion Premises shall be the following:

<TABLE>
          <S>                           <C>
           Property Taxes                 $24.00
           Insurance                      $18.00
           CAM                           $192.00
           Management Fees                $76.00
                                         -------
                                         $310.00

</TABLE>

     5.   For purposes of calculating the Basic Operating Cost of the Premises,
effective on the Expansion Premises Commencement Date, Tenant's Proportionate
Share for the Building shall be revised to reflect 100% and Tenant's
Proportionate Share for the Project shall be revised to reflect 41.57%.

     6.   Landlord agrees to furnish or perform at Landlord's sole cost and
expense those items of construction and those improvements to the Expansion
Premises (the "Tenant Improvements") specified below and Landlord shall be
under no further obligation to perform any other improvements to the Premises
or the Expansion Premises.

          Landlord, at Landlord's expense, shall paint the offices, shampoo the
          carpets, and shall provide an approximately 12' x 14' opening in the
          demising wall separating the Premises and the Expansion Premises.
          (Size to be mutually agreed upon.)

     7.   Any obligation or liability whatsoever of ProLogis Trust, a Maryland
real estate investment trust, which may arise at any time under the Lease or
this Amendment or any obligation or liability which may be incurred by it
pursuant to any other instrument, transaction or undertaking contemplated
hereby, shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of its trustees, directors,
shareholders, officers, employees, or agents regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.

     8.   Insofar as the specific terms and provisions of this Amendment
purport to amend or modify or are in conflict with the specific terms,
provisions and exhibits of the Lease, the terms and provisions of this
Amendment shall govern and control; in all other respects, the terms,
provisions and exhibits of the Lease shall remain unmodified and in full force
and effect.

     9.   Landlord and Tenant hereby agree that (a) this Amendment is
incorporated into and made a part of the Lease, (b) any and all references to
the Lease hereinafter shall include this Amendment, and (c) the Lease and all
terms, conditions and provisions of the Lease are in full force and effect as
of the date hereof, except as expressly modified and amended hereinabove.

    10.   Tenant represents and warrants that it has not dealt with any broker,
agent or other person in connection with this transaction and that no broker,
agent or other person brought about the transaction, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any broker,
agent or other person claiming a commission or other form of compensation by
virtue of having dealt with Tenant with regard to this transaction.

                                       1
<PAGE>   15
     IN WITNESS WHEREOF, the parties hereto have signed this Fourth Amendment
to Lease as of the day and year first above written.

DAMON INDUSTRIES                        PROLOGIS TRUST
                                        a Maryland Real Estate Investment Trust

By:    [signature illegible]             By:     /s/ Ned K. Anderson
       ------------------------                  -----------------------------
Name:                                    Name:       Ned K. Anderson
       ------------------------                  -----------------------------
Title:                                   Title:      Managing Director
       ------------------------                  -----------------------------
              (Tenant)                                   (Landlord)

                                       2<PAGE>   1
                                                                   EXHIBIT 10.14

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

1.   Basic Provisions ("Basic Provisions").

     1.1       Parties: This Lease ("Lease"), dated for reference purposes only,
August 26, 1998, is made by and between Ken Smith, Individual ("Lessor") and
Southwest Traders, Inc. ("Lessee"), (collectively the "Parties," or
individually a "Party").

     1.2(a)    Premises: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 3514 La Grande Blvd. (3401 51st),
located in the City of Sacramento, County of Sacramento, State of California,
with zip code 95832, as outlined on Exhibit A attached hereto ("Premises"). The
"Building" is that certain building containing the Premises and generally
described as (describe briefly the nature of the Building): Freezers #2 and #3.
Docks #5 ,#6, #7, #8, 2,000 sq. ft. of dry warehouse space, and other items as
outlined in Exhibit A. Also, 1 upstairs office in two story office & foyer. In
addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the "Industrial
Center." (Also see Paragraph 2.)

     1.2(b)    Parking: 0 unreserved vehicle parking spaces ("Unreserved Parking
Spaces"); and 8 reserved vehicle parking spaces ("Reserved Parking Spaces").
(Also see Paragraph 2.6.)

     1.3  Term: _______ years and 1 months ("Original Term") commencing
September 1, 1998 ("Commencement Date") and ending September 30, 1998 (Month to
Month) ("Expiration Date"). (Also see Paragraph 3.)

     1.4     Early Possession: N/A ("Early Possession Date"). (Also see
Paragraphs 3.2 and 3.3.)

     1.5     Base Rent: $5500.00 per month ("Base Rent"), payable on the 1st
day of each month commencing September 1, 1998 (Also see Paragraph 4.)

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

     1.6(a)  Base Rent Paid Upon Execution: $__________ as Base Rent for the
period ___________________________________.

     1.6(b)  Lessee's Share of Common Area Operating Expenses: ____________
percent (_______%) ("Lessee's Share") as determined by

[ ] prorata square footage of the Premises as compared to the total square
footage of the Building or [ ] other criteria as described in Addendum _____.

     1.7     Security Deposit: $5500.00 ("Security Deposit"). (Also see
Paragraph 5.)

     1.8  Permitted Use:________________________________________________________
________________________________________________________________________________
_________________________("Permitted Use") (Also see Paragraph 6.)

     1.9  Insuring Party. Lessor is the "Insuring Party." (Also see
Paragraph 8.)

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

[ ] _______________________________ represents Lessor exclusively ("Lessor's
Broker");
[ ] _______________________________ represents Lessee exclusively ("Lessee's
Broker"); or
[ ] _______________________________ represents both Lessor and Lessee ("Dual
Agency"), (Also see Paragraph 15.)

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

     1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by Southwest Traders, Inc. ("Guarantor"). (Also see Paragraph 37.)

     1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 51 and Exhibits A through A, all of which
constitute a part of this Lease.

2.   Premises, Parking and Common Areas.

     2.1  Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental and/or Common Area Operating Expenses, is
an approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.

     2.2  Condition. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at Lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
thirty (30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.

     2.3  Compliance with Covenants, Restrictions and Building Code. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth with specificity the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be reasonable
or appropriate to rectify the non-compliance. Lessor makes no warranty that the
Permitted Use in Paragraph 1.8 is permitted for the Premises under Applicable
Laws (as defined in Paragraph 2.4).

     2.4  Acceptance of Premises.  Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, and compliance with the Americans with
Disabilities Act and applicable zoning, municipal, county, state and federal
laws, ordinances and regulations and any covenants or restrictions of record
(collectively, "Applicable Laws") and the present and future suitability of the
Premises for Lessee's intended use; (b) that Lessee has made such investigation
as it deems necessary with reference to such matters, is satisfied with
reference thereto, and assumes all responsibility therefore as the same relate
to Lessee's occupancy of the Premises and/or the terms of this Lease; and (c)
that neither Lessor, nor any of Lessor's agents, has made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease.

     2.5  Lessee as Prior Owner/Occupant. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner of occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warrants.

(c) American Industrial Real Estate Association 1993
                            MULTI -- TENANT -- GROSS

<PAGE>   2
     2.6  VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9).

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

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

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

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

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

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

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

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

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

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

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

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

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

3.   TERM.

     3.1  TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

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

3.3  DELAY IN POSSESSION. If for any reason Lessor cannot deliver possession of
the Premises to Lessee by the Early Possession Date, if one is specified in
Paragraph 1.4, or if no Early Possession Date is specified, by the Commencement
Date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease, or the obligations of Lessee
hereunder, or extend the term hereof, but in such case, Lessee shall not except
as otherwise provided herein, be obligated to pay rent or perform any other
obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days after
the end of said sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall
terminate and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the Original Term actually commences, if
possession is not tendered to Lessee when required by this Lease and Lessee does
not terminate this Lease, as aforesaid, the period free of the obligation to pay
Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the
date of delivery of possession and continue for a period equal to the period
during which the Lessee would have otherwise enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee.

4.   RENT.

     4.1  BASE RENT. Lessee shall pay Base Rent and other rent or charges, as
the same may be adjusted from time to time, to Lessor in lawful money of the
United States, without offset or deduction, on or before the day on which it is
due under the terms of this Lease. Base Rent and all other rent and charges for
any period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.

     4.2  COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Shares (as specified in
Paragraph 1.8(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:

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

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

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

                      (bb) Exterior signs and any tenant directories.

                      (cc) Fire detection and sprinkler systems.

               (ii)   The cost of water, gas, electricity and telephone to
                      service the Common Areas.

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

               (iv)   Reserves set aside for maintenance and repair of Common
                      Areas.

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

               (vi)   Any "Insurance Cost increase" (as defined in Paragraph
                      8.1)

               (vii)  The cost of insurance carried by Lessor with respect to
                      the Common Areas.

               (viii) Any deductible portion of an insured loss concerning the
                      Building or the Common Area.

               (ix)   Any other services to be provided by Lessor that are
                      stated elsewhere in this Lease to be a Common Area
                      Operating Expense.

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

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

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

MULTI-TENANT - GROSS
                                      -2-

(c) 1998 - American Industrial Real Estate Association  1993
<PAGE>   3
5.   SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease, (as defined in Paragraph 13.1), Lessor may use, apply or
retain all or any portion of said Security Deposit for the payment of any amount
due Lessor or to reimburse or compensate Lessor for any liability, cost,
expense, loss or damage (including attorneys' fees) which Lessor may suffer or
incur by reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, Lessee shall within ten (10) days after written request
therefore deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. Any time the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional monies with Lessor as an addition to the Security Deposit so
that the total amount of the Security Deposit shall at all times bear the same
proportion to the then current Base Rent as the initial Security Deposit bears
to the initial Base Rent set forth in Paragraph 1.5. Lessor shall not be
required to keep all or any part of the Security Deposit separate from its
general accounts. Lessor shall, at the expiration or earlier termination of the
term hereof and after Lessee has vacated the Premises, return to Lessee (or, at
Lessor's option, to the last assignee, if any, of Lessee's interest herein),
that portion of the Security Deposit not used or applied by Lessor. Unless
otherwise expressly agreed in writing by Lessor, no part of the Security Deposit
shall be considered to be held in trust, to bear interest or other increment for
its use, or to be prepayment for any monies to be paid by Lessee under this
Lease.
6.   USE.
     6.1  PERMITTED USE.
          (a)  Lessee shall use and occupy the premises only for the Permitted
Use set forth in Paragraph 1.6, or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or permit the
use of the Premises in a manner that is unlawful, creates waste or a nuisance,
or that disturbs owners and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.
          (b)  Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by Lessee, Lessee's assignees or subtenants, and
by prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair
the structural integrity of the improvements on the Premises or in the Building
or the mechanical or electrical systems therein, does not conflict with uses by
other lessees, is not significantly more burdensome to the Premises or the
Building and the improvements thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold consent, Lessor shall within five
(5) business days after such request give a written notification of same, which
notice shall include an explanation of Lessor's reasonable objections to the
change in use.
     6.2  HAZARDOUS SUBSTANCES.
          (a) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any governmental
authority; or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof. Lessee
shall not engage in any activity in or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). "Reportable Use" shall mean (i) the installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may, without Lessor's prior consent, but upon notice to Lessor and in compliance
with all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the Permitted
Use, so long as such use is not a Reportable Use and does not expose the
Premises or neighboring properties to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may (but
without any obligation to do so) condition its consent to any Reportable Use of
any Hazardous Substance by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Lessor's option, removal on or before Lease expiration
or earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
          (b)  DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or the Building, other than as previously consented to by
Lessor, Lessee shall immediately give Lessor written notice thereof, together
with a copy of any statement, report, notice, registration, application, permit,
business plan, license, claim, action, or proceeding given to, or received from,
any governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under or about the Premises (including,
without limitation, through the plumbing or sanitary sewer system).
          (c)  INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time of such agreement.
     6.3  LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements", which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect. Lessee shall, within five (5) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information, including
but not limited to permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.
     6.4  INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lenders") shall have the right
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
government authority as the result of any such existing or imminent violation or
contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7.   MAINTENANCE, REPAIRS, UTILITY INSTALLATIONS, TRADE FIXTURES AND
     ALTERATIONS.
     7.1  LESSEE'S OBLIGATIONS.

          (a)  Subject to the provisions of Paragraph 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at
Lessee's sole cost and expense and at all times, keep the Premises and every
part thereof in good order, condition and repair (whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the elements or the
age of such portion of the Premises), including, without limiting the generality
of the foregoing, all equipment or facilities specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights, but
excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.

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

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

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

                                      -3-

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(c)American Industrial Real Estate
   Association 1993

<PAGE>   4
and/or smoke detection systems and equipment, fire hydrants, parking lots,
walkways, parkways, driveways, landscaping, fences, signs and utility systems
serving the Common Areas and all parts thereof, as well as providing the
services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or
replace windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Building, Industrial Center or
Common Areas in good order, condition and repair.

     7.3  Utility Installations, Trade Fixtures, Alterations.

          (a) Definitions;  Consent Required. The term "Utility Installations"
is used in this Lease to refer to all air lines, power panels, electrical
distribution, security, fire protection systems, communication systems, lighting
fixtures, heating, ventilating and air conditioning equipment, plumbing, and
fencing in, on or about the Premises. The term "Trade Fixtures" shall mean
Lessee's machinery and equipment which can be removed without doing material
damage to the Premises. The term "Alternations" shall mean any modification of
the improvements on the Premises which are provided by Lessor under the terms of
this Lease, other than Utility Installations or Trade Fixtures. "Lessee-Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a). Lessee shall not make nor cause to be made any Alterations
or Utility Installations in, on, under or about the Premises without Lessor's
prior written consent. Lessee may, however, make non-structural Utility
Installations to the Interior of the Premises (excluding the roof) without
Lessor's consent but upon notice to Lessor, so long as they are not viable from
the outside of the Premises, do not involve puncturing, relocating or removing
the roof or any existing walls, or changing or interfering with the fire
sprinkler or fire detection systems and the cumulative cost thereof during the
term of this Lease as extended does not exceed $2,500.00.

          (b) Consent.  Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon; (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alternations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and be in compliance with all Applicable
Requirements. Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor. Lessor may, (but without obligation
to do so) condition its consent to any requested Alteration or Utility
Installation that costs $2,500.00 or more upon Lessee's providing Lessor with a
lien and completion bond in an amount equal to one and one-half times  the
estimated cost of such Alteration or Utility Installation.

          (c) Lien Protection.  Lessee shall pay when due all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on, or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law, if
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense, defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof
against the Lessor or the Premises. If Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to one
and one-half times the amount of such contested lien claim or demand,
indemnifying Lessor against liability for the same, as required by law for the
holding of the Premises free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is to its best interest
to do so.

     7.4  Ownership, Removal, Surrender, and Restoration.

          (a)  Ownership. Subject to Lessor's right to require their removal and
to cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations made to the Premises
by Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Lessor may, at any time and at its option, elect in writing to
Lessee be the owner of all or any specified part of the Lessee-Owned Alterations
and Utility Installations. Unless otherwise instructed per Subparagraph 7.4(b)
hereof, all Lessee-Owned Alterations and Utility Installations shall, at the
expiration or earlier termination of this Lease, become the property of Lessor
and remain upon the Premises and be surrendered with the Premises by Lessee.

          (b)  Removal. Unless otherwise agreed in writing, Lessor may require
that any or all Lessee-Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding that their
installation may have been consented to by Lessor. Lessor may require the
removal at any time of all or any part of any Alterations or Utility
Installations made without the required consent of Lessor.

          (c)  Surrender/Restoration. Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. Ordinary wear and tear shall not include any
damage or deterioration that would have been prevented by good maintenance
practice or by Lessee performing all of its obligations under this Lease. Except
as otherwise agreed or specified herein, the Premises, as surrendered, shall
include the Alterations and Utility Installations. The obligation of Lessee
shall include the repair of any damage occasioned by the installation,
maintenance or removal of Lessee's Trade Fixtures, furnishings, equipment, and
Lessee-Owned Alterations and Utility installations, as well as the removal of
any storage tank installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee, all as
may then be required by Applicable Requirements and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.

8.   Insurance; Indemnity.

     8.1  Payment of Premium Increases.

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

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

     8.2  Liability Insurance.

          (a) Carried by Lessee. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee, Lessor and any Lender(s) whose names have been provided to
Lessee in writing (as additional insureds) against claims for bodily injury,
personal injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000 per occurrence with
an "Additional Insured-Managers or Lessors of Premises" endorsement and contain
the "Amendment of the Pollution Exclusion" endorsement for damage caused by
heat, smoke or fumes from a hostile fire. The policy shall not contain any
Intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Lessee's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by Lessee shall
not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.

          (b)  Carried by Lessor. Lessor shall also maintain liability insurance
described in Paragraph 8.2(a) above, in addition to and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named as an
additional insured therein.

     8.3  Property Insurance - Building, Improvements and Rental Value.

          (a)  Building and Improvements. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor, with
loss payable to Lessor and to any Lender(s), insuring against loss or damage to
the Premises. Such insurance shall be for full replacement cost, as the same
shall exist from time to time, or the amount required by any Lender(s), but in
no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved,
such latter amount is less than full replacement cost. Lessee-Owned Alternations
and Utility Installations, Trade Fixtures and Lessee's personal property shall
be insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and
commercially appropriate, Lessor's policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender or included in the Base Premium),
including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any undamaged sections of the
Building required to be demolished or removed by reason of the enforcement of
any building, zoning, safety or land use laws as the result of a covered loss,
but not including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any co-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located.

          (b) Rental Value. Lessor shall also obtain and keep in force during
the term of this Lease a policy or policies in the name of Lessor, with loss
payable to Lessor and any Lender(s), insuring the loss of the full rental and
other charges payable by all Lessees of the Building to Lessor for one year
(including all Real Property Taxes, Insurance costs, all Common Area Operating
Expenses and any scheduled rental increases). Said insurance may provide that in
the event the Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of the completion
of repairs or replacement of the Premises, to provide for one full year's loss
of rental revenues from the date of any such loss. Said insurance shall contain
an agreed valuation provision in lieu of any co-insurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected rental income,
Real Property Taxes, insurance premium costs and other expenses, if any,
otherwise payable, for the next 12-month period. Common Area Operating Expenses
shall include any deductible amount in the event of such loss.

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

MULTI-TENANT - GROSS
(C) American Industrial Real            -4-
    Estate Association 1993
<PAGE>   5
          (d) LESSEE'S IMPROVEMENTS. Since Lessor is the insuring Party, Lessor
shall not be required to insure Lessee-Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.

     8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property. Trade Fixtures and Lessee-Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by Lessor as the insuring Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations. Upon request from Lessor,
Lessee shall provide Lessor with written evidence that such insurance is in
force.

     8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least B+, V, or such other rating as may be required by a Lender, as set forth
in the most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except after thirty (30)
days prior written notice to Lessor. Lessee shall, at least thirty (30) days
prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.

     8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages (whether in contractor or in tort) against the
other, for loss or damage to their property arising out of or incident to the
perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.

     8.7 INDEMNITY. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in connection
with, the occupancy of the Premises by Lessee, the conduct of Lessee's business,
any act, omission or neglect of Lessee, its agents, contractors, employees or
invitees, and out of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part to be performed under this
Lease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Lessor) litigated and/or reduced to
judgment. In case any action or proceeding be brought against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified.

     8.8  EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.

9. DAMAGE OR DESTRUCTION.

     9.1 DEFINITIONS.

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

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

          (c) "INSURED LOSS" shall mean damage or destruction to the Premises,
other than Lessee-Owned Alterations and Utility Installations and Trade
Fixtures, which was caused by an event required to be covered by the insurance
described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage
limits involved.

          (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.

          (e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.

     9.2  PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial Damage
that is an insured loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and
Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect, in the event, however, that there is a
shortage of insurance proceeds and such shortage is due to the fact that, by
reason of the unique nature of the improvements in the Premises, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within ten (10) days following receipt of written notice of such shortage and
request therefor. If Lessor receives said funds or adequate assurance thereof
within said ten (10) day period, Lessor shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice  to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If Lessor does not receive such funds or assurance within such
ten (10) day period, and if Lessor does not so elect to restore and repair, then
this Lease shall terminate sixty (60) days following the occurrence of the
damage or destruction. Unless otherwise agreed, Lessee shall in no event have
any right to reimbursement from Lessor for any funds contributed by Lessee to
repair any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject  to Paragraph 9.3 rather than Paragraph 9.2,
notwithstanding that there may be some insurance coverage, but the net proceeds
of any such insurance shall be made available for the repairs if made by either
Party.

     9.3  PARTIAL DAMAGE - UNINSURED LOSS. If Premises Partial Damage that is
not an insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect), Lessor may at Lessor's
option, either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such damage of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the repair of such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required funds
or satisfactory assurance thereof within 30 days following such commitment from
Lessee. In such event this Lease shall continue in full force and effect, and
Lessor shall proceed to make such repairs as soon as reasonably possible after
the required funds are available. If Lessee does not give such notice and
provide the funds or assurance thereof within the times specified above, this
Lease shall terminate as of the date specified in Lessor's notice of
termination.

     9.4  TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate  sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 9.7.

     9.5  DAMAGE NEAR END OF TERM. If at any time during the last (6) months of
the term of this Lease there is damage for which the cost to repair exceeds one
month's Base Rent, whether or not an Insured Loss, Lessor may, at Lessor's
option, terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving a written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by (a) exercising such option, and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this
Paragraph 9.5.

     9.6  ABATEMENT OF RENT; LESSEE'S REMEDIES.

          (a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base Rent,
Common Area Operating Expenses and other charges, if any, payable by Lessee
hereunder for the period during which such damage or condition, its repair,
remediation or restoration continues, shall be abated in proportion to the
degree to which Lessee's use of the Premises is impaired, but not in excess of
proceeds from insurance required to be carried under Paragraph 8.3(b). Except
for abatement of Base Rent, Common Area Operating Expenses and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be performed
by Lessee, and Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair, remediation or restoration.

                                      -5-
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<PAGE>   6
          (b)  If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall accrue, Lessee may, at any
time prior to the commencement of such repair or restoration, given written
notice to Lessor and to any Lenders of which Lessee has actual notice of
Lessee's election to terminate this Lease on a date not less than sixty (60)
days following the giving of such notice. If Lessee gives such notice to Lessor
and such Lenders and such repair or restoration is not commenced within thirty
(30) days after receipt of such notice, this Lease shall terminate as of the
date specified in said notice. If Lessor or a Lender commences the repair or
restoration of the Premises within thirty (30) days after the receipt of such
notice, this Lease shall continue in full force and effect. "Commence" as used
in this Paragraph 9.6 shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever occurs first.

     9.7  Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000 whichever is greater, give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of
the occurrence of such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the excess costs of (a) investigation and remediation of such
Hazardous Substance Condition to the extent required by Applicable Requirements,
over (b) an amount equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days
following said commitment by Lessee. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

     9.8  Termination - Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance payment
made by Lessee to Lessor and so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.

     9.9  Waiver of Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent it is
inconsistent herewith.

10.  Real Property Taxes

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

     10.2 Real Property Tax Definitions.

          (a)  As used herein, the term "Real Property Taxes" shall include any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than inheritance, personal income or estate taxes)
imposed upon the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage, or other improvement
district thereof, levied against any legal or equitable interest of Lessor in
the Industrial Center or any portion thereof, Lessor's right to rent or other
income therefrom, and/or Lessor's business of leasing the Premises. The term
"Real Property Taxes" shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring, or
changes in Applicable Law taking effect, during the term of this Lease,
including but not limited to a change in the ownership of the Industrial
Center or in the improvements thereon, the execution of this Lease, or any
modification, amendment or transfer thereof, and whether or not contemplated by
the Parties.

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

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

     10.4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.

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

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

12.  Assignment and Subletting.

     12.1 Lessor's Consent Required.

          (a)  Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without Lessor's prior written consent given under the subject to the terms of
Paragraph 38.

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

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

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

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

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a)  Regardless of Lessor's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, nor (iii) after the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.

          (b)  Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent for performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.

          (c)  The consent or Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the assignee or
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable under this Lease or the sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.

                                      -8-

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<PAGE>   7
          (d) In the event of any Default or Breach of Lessee's obligation
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or
anyone else responsible for the performance of the Lessee's obligations under
this Lease, including any sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor.

          (e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the monthly Base Rent applicable to
the portion of the Premises which is the subject of the proposed assignment or
sublease, whichever is greater, as reasonable consideration for Lessor's
considering and processing the request for consent. Lessee agrees to provide
Lessor with such other or additional information and/or documentation as may be
reasonably requested by Lessor.

          (f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.

          (g) The occurrence of a transaction described in Paragraph 12.2(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased by an amount equal to six (6) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
Security Deposit increase a condition to Lessor's consent to such transaction.

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

     12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

          (a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease, Lessee may, except as otherwise provided in this Lease, receive, collect
and enjoy the rents accruing under such sublease. Lessor shall not, by reason of
the foregoing provision or any other assignment of such sublease to Lessor, nor
by reason of the collection of the rents from a sublessee, be deemed liable to
the sublessee for any failure of Lessee to perform and comply with any of
Lessee's obligations to such sublessee under such Sublease. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents and other charges due
and to become due under the sublease. Sublessee shall rely upon any such
statement and request from Lessor and shall pay such rents and other charges to
Lessor without any obligation or right to inquire as to whether such Breach
exists and notwithstanding any notice from or claim from Lessee to the contrary,
Lessee shall have no right or claim against such sublessee, or, until the Breach
has been cured, against Lessor, for any such rents and other charges so paid by
said sublessee to Lessor.

          (b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior defaults
or breaches of such sublessor under such sublease.

          (c) Any matter or thing requiring the consenting of the sublessor
under a sublease shall also require the consent of Lessor herein.

          (d) No sublessee under a sublease approved by Lessor shall further
assign or sublet all or any part of the Premises without Lessor's prior written
consent.

          (e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the rights to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.

13.  Default; Breach; Remedies.

     13.1 Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $380.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:

          (a) The vacating of the Premises without the intention to reoccupy
same, or the abandonment of the Premises.

          (b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent, Lessee's Share of Common Area
Operating Expenses, or any other monetary payment required to be made by Lessee
hereunder as and when due, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required under this lease, or
the failure of Lessee to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of
three (3) days following written notice thereof by or on behalf of Lessor to
Lessee.

          (c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Requirements per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or
subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37,
(v) the subordination or non-subordination of this Lease per Paragraph 30, (vi)
the guaranty of the performance of Lessee's obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.

          (d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that
are to be observed, complied with or performed by Lessee, other than those
described in Subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease by Lessee if
Lessee commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.

          (e) The occurrence of any of the following events; (i) the making by
Lessee of any general arrangement or assignment for the benefit of creditors;
(ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this Subparagraph 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.

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

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

     13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its own
option, may require all future payments to be made under this Lease by Lessee to
be made by cashier's check. In the event of a Breach of this Lease by Lessee (as
defined in Paragraph 13.1), with or without further notice or demand, and
without limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such Breach, Lessor may:

          (a) Terminate Lessee's right to possession of the premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligation under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District
in which the Premises are located at the time of award plus one percent (1%).
Efforts by Lessor to mitigate damages caused by Lessee's Default or Breach of
this Lease shall not waive Lessor's right to recover damages under this
Paragraph 13.2. If termination of this lease is obtained

                                      -7-

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<PAGE>   8
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding the unpaid rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit for such rent and/or damages. If a notice and grace period
required under Subparagraph 13.1(b), (c) or (d) was not previously given, a
notice to pay rent or quit, or to perform or quit, as the case may be, given to
Lessee under any statute authorizing the forfeiture of leases for unlawful
detainer shall also constitute the applicable notice for grace period purposes
required by Subparagraph 13.1(b), (c) or (d). In such case, the applicable grace
period under the unlawful detainer statue shall run concurrently after the one
such statutory notice, and the failure of Lessee to cure the Default within the
greater of the two (2) such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lessor to the remedies provided
for in this Lease and/or by said statute.

          (b)  Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
recover the rent as it becomes due, provided Lessee has the right to sublet or
assign, subject only to reasonable limitations. Lessor and Lessee agree that the
limitations on assignment and subletting in this Lease are reasonable. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Lessor's interest under this Lease, shall not
constitute a termination of the Lessee's right to possession.

          (c)  Pursue any other remedy now or hereafter available to Lessor
under the laws of judicial decisions of the state wherein the Premises are
located.

          (d)  The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof or by reason of Lessee's occupancy of the
Premises.

     13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach (as defined in Paragraph 13.1) of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions of this
Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of
such acceptance.

     13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive Installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary. Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.

     13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by any Lender(s) whose name and address shall have been furnished to Lessee
in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in
breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.

14.  CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the portion of
the Common Areas designated for Lessee's parking, is taken by condemnation,
Lessee may, at Lessee's option, to be exercised in writing within ten (10) days
after Lessor shall have given Lessee written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises taken
bears to the total rentable floor area of the Premises. No reduction of Base
Rent shall occur if the condemnation does not apply to any portion of the
Premises. Any award for the taking of all or any part of the premises under the
power of eminent domain or any payment made under threat of the exercise of such
power shall be the property of Lessor, whether such award shall be made as
compensation for diminution of value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any compensation, separately awarded to Lessee for Lessee's relocation
expenses and/or loss of Lessee's Trade Fixtures. In the event that this Lease is
not terminated by reason of such condemnation, Lessor shall to the extent of its
net severance damages received, over and above Lessee's Share of the legal and
other expenses incurred by Lessor in the condemnation matter, repair any damage
to the Premises caused by such condemnation authority. Lessee shall be
responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.

15.  BROKERS' FEES.

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

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

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

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

16.  TENANCY AND FINANCIAL STATEMENTS.

     16.1 TENANCY STATEMENT. Each Party (as "Responding Party") shall within ten
(10) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in a form similar to the then most current "Tenancy Statement" form published by
the American Industrial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.

     16.2 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor such
financial statements of Lessee and such Guarantors as may be reasonably required
by such lender or purchaser, including but not limited to Lessee's financial
statements for the past three (3) years. All such financial statements shall be
received by Lessor and such lender or purchaser in confidence and shall be used
only for the purposes herein set forth.

17.  LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises. In the event
of a transfer of Lessor's title or interest in the Premises or in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.

18.  SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19.  INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10) days
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.4.

20.  TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

21.  RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22.  NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.

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<PAGE>   9
23.  NOTICES.
     23.1  NOTICE REQUIREMENTS. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail or
U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission during normal business hours, and shall be deemed sufficiently
given if served in a manner specified in this Paragraph 23. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by written notice to
the other specify a different address for notice purposes, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for the purpose of mailing or delivering notices to Lessee. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as
Lessor may from time to time hereafter designate by written notice to Lessee.

     23.2  DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown
on the receipt card, or if no delivery date is shown, the postmark thereon. If
sent by regular mail, the notice shall be deemed given forty-eight (48) hours
after the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the United States Postal Service or courier. If any
notice is transmitted by facsimile transmission or similar means, the same
shall be deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.

24.  WAIVERS.  No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent
or similar act by Lessee, or be construed as the basis of an estoppel to enforce
the provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any Default or Breach by
Lessee of any provision hereof. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor, notwithstanding
any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.

25.  RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.

26.  NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased to two hundred percent
(200%) of the Base Rent applicable during the month immediately preceding such
expiration or earlier termination. Nothing contained herein shall be construed
as a consent by Lessor to any holding over by Lessee.

27.  CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.

28.  COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

29.  BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.

30.  SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

     30.1  SUBORDINATION.  This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default pursuant
to Paragraph 13.5. If any Lender shall elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device and shall
give written notice thereof to Lessee, this Lease and such Options shall be
deemed prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.

     30.2  ATTORNMENT.  Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.

     30.3  NON-DISTURBANCE.  With respect to Security Devices entered into by
Lessor after the execution of this lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

     30.4 SELF-EXECUTING.  The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
provided for herein.

31.  ATTORNEYS' FEES.  If any Party or Broker brings an action or proceeding to
enforce the terms hereof declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall be
entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term, "Prevailing Party" shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorneys' fees award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
incurred. Lessor shall be entitled to attorneys' fees, costs and expenses
incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced
in connection with such Default or resulting Breach. Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.

32.  LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building, as Lessor may reasonably deem necessary. Lessor may at any time place
on or about the Premises or Building any ordinary "For Sale" signs and Lessor
may at any time during the last one hundred eighty (180) days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to Lessee.

33.  AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first
having obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34.  SIGNS. Lessee shall not place any sign upon the exterior of the Premises
or the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the roof) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. The installation of
any sign on the Premises by or for Lessee shall be subject to the provisions of
Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations). Unless otherwise expressly agreed herein, Lessor reserves all
rights to the use of the roof of the Building, and the right to install
advertising signs on the Building, including the roof, which do not
unreasonably interfere with the conduct of Lessee's business; Lessor shall be
entitled to all revenues from such advertising signs.

35.  TERMINATION; MERGER. Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for
Breach by Lessee, shall automatically terminate any sublease or lesser estate
in the Premises; provided, however, Lessor shall, in the event of any such
surrender, termination or cancellation, have the option to continue any one or
all of any existing subtenancies. Lessor's failure within ten (10) days
following any such event to make a written election to the contrary by written
notice to the holder or any such lessor interest, shall constitute Lessor's
election to have such event constitute the termination of such interest.

36.  CONSENTS.
          (a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to
an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses (including
but not limited to architects', attorneys', engineers' and other consultants'
fees) incurred in the consideration of, or response to, a request by Lessee for
any Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor an amount of
money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.

          (b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the impositions by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.

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

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<PAGE>   10
     37.2 ADDITIONAL OBLIGATIONS OF GUARANTOR. It shall constitute a Default of
the Lessee under this Lease if any such Guarantor fails or refuses, upon
reasonable request by Lessor to give: (a) evidence of the due execution of the
guaranty called for by this Lease, including the authority of the Guarantor
(and of the party signing on Guarantor's behalf) to obligate such Guarantor on
said guaranty, and resolution of its board of directors, authorizing the making
of such guaranty, together with a certificate of incumbency showing the
signatures of the persons authorized to sign on its behalf, (b) current
financial statements of Guarantor as may from time to time be requested by
Lessor, (c) a Tenancy Statement, or (d) written confirmation that the guaranty
is still in effect.

38.  QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions or Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.

39.  OPTIONS.

     39.1 DEFINITION. As used in this Lease, the word "Option" has the following
meaning: (a) the right to extend the term of this Lease or to renew this Lease
or to extend or renew any lease that Lessee has on other property of Lessor; (b)
the right of first refusal to lease the Premises or the right of first offer to
lease the Premises or the right of first refusal to lease other property of
Lessor or the right of first offer to lease other property of Lessor; (c) the
right to purchase the Premises, or the right of first refusal to purchase the
Premises, or the right of first offer to purchase the Premises, or the right to
purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other property
of Lessor.

     39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1?? hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner
by reservation or otherwise.

     39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple Options
to extend or renew this Lease, a later option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.

     39.4 EFFECT OF DEFAULT ON OPTIONS.
          (a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary; (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1 and
continuing until the noticed Default is cured, or (ii) during the period of
time any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee
three (3) or more notices of separate Defaults under Paragraph 13.1 during the
twelve (12) month period immediately preceding the exercise of the Option,
whether or not the Defaults are cured.

          (b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).

          (c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option, if, after such exercise and during the term
of this Lease,(i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) Lessee commits a Breach of this Lease.

40.  RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations ("Rules and Regulations") which
Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants
or tenants of the Building and the Industrial Center and their invitees.

41.  SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.

42.  RESERVATIONS. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way,
utility raceways, and dedications that Lessor deems necessary, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights of way, utility raceways, dedications, maps and restrictions do not
reasonably interfere with the use of the Premises by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate any such
easement rights, dedication, map or restrictions.

43.  PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or as much thereof as it was not legally required to pay under the
provisions of this Lease.

44.  AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

45.  CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.

46.  OFFER. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.

47.  AMENDMENTS. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The Parties shall amend
the Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an Institutional Insurance company or pension plan Lender
in connection with the obtaining of normal financing or refinancing of the
property of which the Premises are a part.

48.  MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.

                                      -10-

MULTI -- TENANT -- GROSS
(C)American Industrial Real Estate Association 1993

<PAGE>   11
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.

     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEY'S
     REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO EVALUATE THE
     CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS,
     UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
     OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS
     TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE
     OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON
     THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
     THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN
     ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

Executed at: 27565 Diaz Rd., Temecula Ca. 92590
            ------------------------------------------------
on: August 26, 1998
   ---------------------------------------------------------

BY LESSOR:

Ken Smith, Individual
------------------------------------------------------------

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

By: /s/ Ken Smith
   ---------------------------------------------------------
Name Printed: Ken Smith
             -----------------------------------------------
Title:
      ------------------------------------------------------
By:
   ---------------------------------------------------------
Name Printed:
             -----------------------------------------------
Title:
      ------------------------------------------------------
Address:
        ----------------------------------------------------

------------------------------------------------------------
Telephone: (909) 699-7800, Ext. 112
                 -------------------------------------------
Facsimile: (909) 699-5717
                 -------------------------------------------

BROKER:

Executed at:
            ------------------------------------------------
on:
   ---------------------------------------------------------
By:
   ---------------------------------------------------------
Name Printed:
             -----------------------------------------------
Title:
      ------------------------------------------------------
Address:
        ----------------------------------------------------

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

Executed at: 27565 Diaz Rd., Temecula Ca. 92590
            ------------------------------------------------
on: August 26, 1998
   ---------------------------------------------------------

BY LESSEE:

Southwest Traders, Inc.
------------------------------------------------------------

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

By: /s/ Ken Smith
   ---------------------------------------------------------
Name Printed: Ken Smith
             -----------------------------------------------
Title: President
      ------------------------------------------------------
By:
   ---------------------------------------------------------
Name Printed:
             -----------------------------------------------
Title:
      ------------------------------------------------------
Address:
        ----------------------------------------------------

------------------------------------------------------------
Telephone: (909) 699-7800, Ext. 112
                 -------------------------------------------
Facsimile: (909) 699-5717
                 -------------------------------------------

BROKER:

Executed at:
            ------------------------------------------------
on:
   ---------------------------------------------------------
By:
   ---------------------------------------------------------
Name Printed:
             -----------------------------------------------
Title:
      ------------------------------------------------------
Address:
        ----------------------------------------------------

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

NOTE: These forms are often modified to meet changing requirements and needs of
the industry. Always write or call to make sure you are utilizing the most
current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 345 So. Figueroa
St., M-1, Los Angeles, CA 90071. (213) 687-8777.

                                      -11-

MULTI - TENANT -- GROSS
(C) American Industrial Real Estate Association 1993

<PAGE>   12
                                Lease Addendum I
                                 Dated 8/25/98

This is a lease addendum between Ken Smith (Owner), as an individual, and
Southwest Traders, Inc. (Tenant), for the property located at 3514 La Grande
Blvd., previously known as 3401 51st Avenue, Sacramento, California.

ADDITIONAL PROVISIONS:

49.  UTILITIES
     It is agreed that Owner will pay electrical utilities for above said
property. All other utilities including trash are the sole responsibility of
the Tenant as outlined in the agreement.

50.  COMPREHENSIVE DISCLOSURES

     AMERICANS WITH DISABILITIES ACT (ADA)
     Please be advised that a Lessor or Lessee of real property may be subject
to the American's With Disabilities Act (the ADA), a Federal law codified at 42
USQ Section 12101 et seg. Among other requirements of the ADA that could apply
to your property, Title III of the ADA requires owners and tenants of "public
accommodations" to remove barriers to access by disabled persons and provide
auxiliary aids and services for hearing, vision, or speech impaired persons by
January 26, 1992. The regulations under Title III of the ADA are codified at 28
CFR Part 36. State and local laws also may mandate changes.

     The Lessor in this transaction are not qualified to advise you as to what,
if any, changes may be required now, or in the future. Lessor and Lessee should
consult their attorney and qualified design professionals of their choice for
information regarding these matters. Real Estate brokers cannot determine which
attorneys or design professionals have the appropriate expertise in this area.

51.  HAZARDOUS WASTE
     Lessee, at its expense, shall comply with all applicable laws, regulations,
rules and orders relating to Lessee's use of the Premises, regardless of when
they become or became effective including, without limitation, those relating to
health, safety, environment protection, waste disposal, and water and air
quality, and furnish satisfactory evidence of such compliance upon request of
Lessor provided, however, that Lessee shall not be responsible for violations
predating Lessee's occupancy of the Premises or violations relating to the
physical condition of the Premises unless such violations or physical conditions
are caused by the act or omission of Lessee, its employees, agents, invitees,
contractors, or subcontractors.

     Should any discharge, leakage, spillage, emission, or pollution of any type
occur upon or from the Premises approximately caused by Lessee and not caused by
any act of Lessor or other Lessee, at its expense, shall be obligated to clean
all the property affected thereby, whether owned or controlled by Landlord and
to the satisfaction of any governmental body having jurisdiction thereover.

     Lessee shall indemnify, hold harmless and defend Lessor against all
liability, cost and expense (including, without limitation, any fines,
penalties, judgments, litigation costs and reasonable attorney's fees) incurred
by Lessor as a proximate result of Lessee's breach of this section, or as a
proximate result of any such discharge, leakage, spillage, emission or
pollution, regardless of whether such liability, cost of expense is proximately
caused solely by the active negligence of Lessor then Lessor shall be solely
liable therefore.

<PAGE>   13
     Lessee shall pay all amounts due Lessor under this section, as additional
rent, within thirty (30) days after receipt of notice from Lessor.

     Tenant hereby acknowledges that they have read this addendum, understand
it, agree to it, accept it, and have been given a copy.

Signature /s/ Ken Smith                        Date 8/25/98
         --------------------                      ------------------
LESSOR: Ken Smith

Signature /s/ Ken Smith President              Date 8/25/91
         ------------------------                  ------------------
LESSEE: Southwest Traders, Inc.
<PAGE>   14
December 15, 1999

This is an addendum to the lease Ken Smith and Southwest Traders, Inc. dated
September 3, 1998, regarding the property located at 3514 La Grande Blvd.
Sacramento, Ca. Effective January 1, 2000 Southwest Traders monthly lease
payment will increase to $7000 per month. All other terms and conditions will
remain the same.

In addition, Ken Smith as an individual has transferred all rights to the Smith
Family Trust dated February 2, 1999.

Signature: /s/ Ken Smith               Date: 12/15/99
           ------------------------          --------
            Ken Smith, Trustee

Signature: /s/ Ken Smith President     Date: 12/15/99
           ------------------------          --------
            Southwest Traders, Inc.
<PAGE>   15
June 1, 2000

This is an addendum to the lease between Ken Smith and Southwest Traders, Inc.
dated September 3, 1998. Effective June 1, 2000 Southwest Traders will expand
it's use of the facility as outlined in the revised Exhibit A dated June 1,
2000. Therefore, Southwest Traders monthly lease payment beginning June 1, 2000
will increase to $8100.00 per month.

In addition, Ken Smith as an individual has transferred all rights to the Ken &
Tina Smith Family Trust dated February 2, 1999.

Signature: /s/ Ken Smith               Date: 8/2/00
           ------------------------          --------
            Ken Smith, Owner

Signature: /s/ Ken Smith President     Date: 8/2/00
           ------------------------          --------
            Southwest Traders, Inc.
<PAGE>   16
                                                                       EXHIBIT A

                                   [SITE MAP]

                              3514 LA GRANDE BLVD.
                          Previously 3401 51st Avenue

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