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                                 LEASE OVERVIEW
                               OVERLAND SHEEPSKIN




             Location:   1655 Broadway
                 Size:   6,500 square feet
               Tenant:   Alfalfa's Boulder
           Lease Type:   Triple Net
            Guarantor:
           Lease Date:   April 10, 1989
    Commencement Date:   May 4, 1984 (Sublease agreement)

      Amendment Dated:   September 10, 1991

                 Term:   Lease term to expire May 15, 2000 per amendment
      Renewal Options:   6 years commencing 5/16/2000
                         Written Notice to Landlord by November 16, 1998

    Current Base Rent:                          $8,035.00
  Current CAM Charges:   Taxes                   1,239.00
                         Insurance                 188.00

     Annual Base Rent:   $96,423 (through May 16, 1997)
                         $14.83 per foot per year

          Escalations:   At each anniversary date rent shall increase by the
                         Implicit Price Deflator Index for Private Businesses. 
                         This adjustment to be calculated by the lessor on an
                         annual basis.
                         
      Percentage Rent:   None
     Security Deposit:   None
<PAGE>   2

                              ASSIGNMENT AGREEMENT

         This Assignment Agreement, dated this 10th day of April, 1989, between
Overland Outfitters, Inc.(formerly known as Overland Sheepskin Co.,) an Iowa
corporation ("Overland"), and Alfalfa's Boulder, Inc., a Colorado corporation
("Alfalfa's").

                                    RECITALS

                 A.       Overland is tenant and First Interstate Bank of
Denver, N.A., in its capacity as nominee is landlord ("Landlord") under a lease
agreement (the "Master Lease") dated May 16, 1984 (a copy of which is attached
as Exhibit A hereto), and covering the real property and improvements located
at 1655 Broadway, Boulder, Colorado (the "Premises").

                 B.       Alfalfa's is successor in interest to Natural
Horizons, Inc.'s rights as sublessee under the sublease with Overland dated
August 7, 1984, as amended August 7, 1984, and covering a portion of the
Premises.

                 C.       Alfalfa's desires to assume Overland's obligations
under the Master Lease, and Overland desires to assign its interests in the
Master Lease to Alfalfa's.

                                   AGREEMENT

                 For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                 1.       Assignment. Overland hereby assigns, transfers and
conveys to Alfalfa's, and Alfalfa's agrees to assume from Overland, effective
as of the 15th day of April, 1989 (the "Effective Date"), the rights and
obligations of Overland under the Master Lease, to have and to hold the Master
Lease by Alfalfa's, its successors and assigns, on the terms and conditions set
forth herein. In the event that the Landlord fails to consent below to this
Assignment on or before April 15, 1989, this Agreement will not be deemed
effective. Alfalfa's agrees to pay, perform and discharge all liabilities and
obligations arising under the Master Lease after the Effective Date.
<PAGE>   3
                 2.       Consideration for Assumption of Liabilities. In
consideration for the assumption by Alfalfa's of Overland's obligations and
liabilities under the Master Lease, Overland hereby agrees to release Alfalfa's
from any further obligations to Overland under the Sublease, including but not
limited to liability for rent and reimbursement for tenant finish work. In
addition, Overland agrees to pay to the Landlord the amount of rent due from
Alfalfa's for the Premises for the 30-day period from April 16 through May 15,
1989. Alfalfa's also agrees to pay Overland all sublease payments for this same
30-day period.

                 3.       Representations, Warranties and Covenants of
Overland. (a) Overland hereby covenants and agrees that on or before the
Effective Date, Overland will remove all removable wall coverings, display
cases and other trade and light fixtures, and shall repair any damage caused by
such removal.

                 (b)      Overland hereby covenants, represents and warrants
that as of the date of this Assignment and as of the Effective Date, the
Premises are in good repair and condition, normal wear and tear excepted, and
that no repairs costing more than $500 in the aggregate are required to meet
Overland's obligations under section 14 of the Master Lease. Overland further
represents and warrants that as of the Effective Date, the Premises are in
compliance with all applicable laws, rules, regulations and codes.

                 (c)      Overland hereby represents and warrants as of the
date hereof and as of the Effective Date that Overland's interest in the Master
Lease is free and clear of all liens and encumbrances, the Master Lease is in
full force and effect and that the copy attached hereto as Exhibit A is true
and correct and has not been amended, and that Overland is not presently in
default under the Master Lease and has not committed or failed to commit any
act which, with notice or the passage of time, or both, would result in a
breach of the Master Lease.

                 4.       Rent, Utilities, Taxes and Assessments. (a) Overland
shall pay all utility charges accruing up to the Effective Date, and Alfalfa's
shall pay all utilities charges thereafter.

                 (b)      Overland shall pay, on or before the Effective Date,
its pro rata share of real and personal property, sales and other applicable
taxes and assessments accruing to the Effective Date, and Alfalfa's shall pay
all taxes accruing thereafter.

                                      -2-
<PAGE>   4
                 (c)      Overland shall pay all rent and additional rent
charges, operating expenses and other assessments accruing pursuant to the
terms of the Master Lease through the Effective Date, and Alfalfa's shall pay
all rent and other charges accruing thereafter.

                 5.       Risk of Damage. In the event that the Premises are
damaged or destroyed by casualty or other damage prior to the Effective Date,
Alfalfa's may elect to either (a) terminate this Assignment Agreement with no
further obligation of either party, or (b) continue this Agreement in full
force and effect, in which case Overland shall assign in writing to Alfalfa's
all insurance proceeds, settlements and other sums receivable by Overland as a
result of such damage or destruction, and shall assist Alfalfa's in the
prosecution of or negotiation with any insurer or other party from whom amounts
may be receivable as a result of such damage.

                 6.       Indemnification. (a) Overland hereby agrees to
indemnify and hold harmless Alfalfa's, its affiliates, and their officers,
directors, employees and agents from any loss, cost, liability or expense
(including but not limited to attorneys' fees and costs) arising or resulting
from (i) Overland's breach of any of its representations, warranties or
covenants given to Alfalfa's, or (ii) any actions or inactions of Overland
relating to Overland's use of the Premises or performance under the Master
Lease prior to the Effective Date.

                 (b)      Alfalfa's hereby agrees to indemnify and hold
harmless Overland and its officers, directors, employees and agents from any
loss, cost, liability or expense (including but not limited to attorneys' fees
and costs) arising or resulting from any actions or inactions of Alfalfa's
relating to Alfalfa's use of the Premises or performance under the Master Lease
after to the Effective Date.

                 7.       Termination of Sublease. Upon the Effective Date, the
Sublease Agreement dated August 2, 1984 shall terminate and be of no further
force and effect.

                 8.       Consents. Under paragraph 26 of the Master Lease,
Tenant may not, without the prior consent of the Landlord, assign the Master
Lease or any interest therein. Accordingly, the consent of the Landlord to this
Assignment is a specific condition precedent to the assignment contemplated
herein.

                                      -3-
<PAGE>   5
This Assignment shall not be deemed effective unless on or before April 15,
1989 the Landlord executes the consent to this Assignment set forth below which
also releases Overland from further liability.

                 9.       Miscellaneous. (a) This Assignment Agreement shall be
governed by and construed under the laws of the State of Colorado.

                 (b)      Any notices required to be sent hereunder shall be
sent to Alfalfa's at 1655 Broadway, Boulder, Colorado 80302, Attention: Mark
Retzloff, and to Overland at P.O. Box 647, Fairfield, Iowa 52556, Attention:
Roger Leahy.

                 (c)      Alfalfa's has not retained any broker, agent or
finder or agreed to pay any commissions or finders' fees in connection with
this Assignment. Overland has retained Colorado Commercial Real Estate as its
broker, shall be solely liable for all commissions and other expenses payable
thereto, and shall hold harmless Alfalfa's and Landlord from any such
commissions or other expenses payable to any broker or finder.

                 (d)      Alfalfa's assumes ALL responsibility for securing
governmental approvals for its use of the space and indemnifies the Landlord
from any costs or obligations by governing agencies due to Alfalfa's particular
use of the space.  Also, Alfalfa's agrees not to invoke Paragraph B on Exhibit
E to the Master Lease dated May 4, 1984.

                    Executed as of the date set forth above.

OVERLAND OUTFITTERS, INC.,        ALFALFA'S BOULDER, INC., a
an Iowa corporation               Colorado corporation

By:  /s/ ROGER LEAHY              By:  /s/ DALE K. KANIBAYOSKI 
    ----------------------            -------------------------
    President                         President

THIS ASSIGNMENT IS CONSENTED TO THIS    DAY OF        1989. IT IS UNDERSTOOD AND
AGREED THAT ALFALFA'S BOULDER, INC. WILL ASSUME ALL LIABILITIES ARISING FROM
AND AFTER THE EFFECTIVE DATE OF THIS ASSIGNMENT UNDER THE MASTER LEASE, AND
LANDLORD SHALL LOOK SOLELY TO ALFALFA'S BOULDER, INC. FOR PERFORMANCE OF ALL
OBLIGATIONS ARISING UNDER THE MASTER LEASE AFTER THE EFFECTIVE DATE HEREOF.

First Interstate Bank of Denver,
N.A., Nominee

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

                                      -4-
<PAGE>   6

                                   EXHIBIT A

                          (Attached to and made a part
                          of the Assignment Agreement)

                                THE MASTER LEASE


                                      -5-
<PAGE>   7
                                                                     APPENDIX I

                                LEASE AGREEMENT

        THIS LEASE, made and entered into this       day of                 ,
1984, by and between COLORADO NATIONAL BANK, Boulder Nominee (hereinafter
referred to as "Landlord") and OVERLAND SHEEPSKIN CO., a New Mexico Corporation
qualified to do business in Colorado, with its principal place of business at
P.O. Box 588, Taos, New Mexico 87571 (hereinafter referred to as "Tenant");

                             W I T N E S S E T H :

        IN CONSIDERATION of the covenants, terms, conditions, agreements and
payments as hereinafter set forth, the parties hereto covenant and agree as 
follows:

        1.      Property - Leased Premises. Landlord hereby leases unto Tenant
the building located at 1655 Broadway, (hereinafter also referred to as the
"premises"), also known more particularly as the building located on the
following legal description:

        Beginning at the Northeast corner of Lot 6, SMITH'S ADDITION to the City
        of Boulder, according to the recorded plat thereof; thence westerly
        along the North line of said Lot 6 a distance of 40 feet to the True
        Place of Beginning (said 40-feet line being the Northerly line of the
        strip conveyed by Lewis Cheney to the City of Boulder by deed dated
        April 7th, 1884, and recorded April 9th, 1884 in Book 73 at Page 545, of
        the records of the Clerk and Recorder of Boulder County); thence from
        said True Place of Beginning Westerly along the North line of said Lot 6
        and Lot 7, in said Smith's Addition to the City of Boulder, a distance
        of 130 feet; thence Southerly and parallel with the East line of said
        Lot 6,  a distance of 100 feet; thence Easterly and parallel with the
        North line of said Lots 7 and 6 a distance of 130 feet, to the Westerly
        line of said 40-feet strip conveyed by Lewis Cheney to the City of
        Boulder, above referred to; thence Northerly along said Westerly line
        of said 40-feet strip and parallel with the East line of said Lot 6 a
        distance of 100 feet to the True Place of Beginning, all situtate in
        the County of Boulder, and State of Colorado

on an "as-is" basis, the leasing of which shall be governed by the terms of
this Lease.
<PAGE>   8
        2.      Term. The term of this Lease (hereinafter also referred to as
"Initial Term") shall commence at 12:00 noon on the 4th day of May, 1984, until
and unless terminated or renewed as herein provided for, shall end at 12:00
noon six years after the commencement date of this Lease.

                Landlord shall give possession of the leased premises on the
date of commencement of the term hereof with respect to the area (approximately
4,500 square feet) currently used by Blue Mountain Arts for storage, and
possession of the balance of the leased premises (currently used by Alfalfa's
for storage) by April 25, 1984. By the signing of this lease, or any option
relating hereto, Tenant shall be deemed to have accepted the leased premises
and acknowledges that the leased premises are in satisfactory condition. No
failure to give possession on the date of commencement of the term shall affect
the validity of this Lease or the obligations of Tenant hereunder.

        3.      Option to Extend. Upon full and complete performance of all the
terms, covenants and conditions herein contained by Tenant and payment of all
rental due under the terms hereof, Tenant shall be given the option to renew
this Lease for an additional term of six years (hereinafter also referred to as
"Extended Term") upon the same conditions. In the event Tenant desires to
exercise said option to renew the term of this Lease, Tenant shall give written
notice of such fact to Landlord not less than ninety (90) days nor more than
one hundred fifty (150) days prior to the expiration of the current term of
this Lease. In the event of such exercise, this Lease Agreement shall be deemed
to be extended for the additional six-year




                                      -2-
<PAGE>   9
period, subject to the right of the Landlord to make such adjustments and/or
assessment of charges against Tenant as is provided herein.

        4.      Rent. Tenant shall pay to Landlord, at the address of
landlord's agent as herein set forth, or to such other address as Landlord may
advise Tenant in writing, the following as rental for the leased premises:

                A.      Base Rental Rate:

        (1)     The base annual rental for the first full year of the term
hereof shall be $68,250.00 per year. Said rental shall be payable in monthly
installments (basic first year monthly rental) of $5,687.50, in advance, on the
first day of each month during the term hereof; provided, however, that
Landlord waives the right to, and Tenant shall be under no obligation to pay,
the basic first year monthly rental until August 1st, 1984.

                B.      Escalation of Base Rental Rate. On a date which shall
be one year from the commencement date of the term of this Lease and thereafter
on each annual anniversary date of this Lease during the "Initial Term" as
provided herein (hereinafter referred to as the "adjustment date"), the base
annual rental due hereunder shall be adjusted upward (but not downward)
(hereinafter also referred to as the "adjustment") by the annual percentage
increase in the Index for the Implicit Price Deflator, Gross National Product
(hereinafter also referred to as the "Index") (sample attached hereto as
Schedule "A" and encircled in red). The first "adjustment" of the base annual
rental herein set forth shall be based upon the percentage increase in the
"Index" between that published on the closest date of publication prior to the
commencement of the term of this lease, and that published on the closest date
of publication thereof




                                      -3-
<PAGE>   10
prior to the first annual anniversary date following the commencement of the
term of this Lease multiplied by 50%. Thereafter, any such "adjustment" during
the "Initial Term" of this Lease shall be based upon the annual percentage
change in the "Index" multiplied by 50%. Upon each "adjustment date" the base
annual rental then being paid shall be increased by an amount equal to the
amount arrived at by multiplying the percentage increase in the "Index" for
the preceding twelve months by 50%, the product of which shall then be
multiplied by the then payable base annual rental.

                In the event the Tenant exercises its option to renew the term 
of this Lease for an "Extended Term" of six years as provided herein, the Base
Annual Rental due during the first year of the "Extended Term" (hereinafter also
referred to as the "Extended Base Annual Rental") shall be $68,250.00 plus an
amount equal to $68,250.00 multiplied by the percentage increase in the "Index"
for the preceding six (6) years (hereinafter referred to as the "Six-Year Index
Factor"). The "Six-Year Index Factor" is based upon 100% of the increase in the
"Index" instead of 50% as hereinbefore provided. The "Six-Year Index Factor" is
equal to the percentage increase in the "Index" for the six years between that
published on the closest date of publication prior to the commencement of the
term of this Lease, and that published on the closest date of publication
thereof prior to the commencement date of the "Extended Term" of this Lease. On
a date which shall be one year from the commencement date of the "Extended Term"
of this Lease, and thereafter on each annual anniversary date of the "Extended
Term" of this Lease as provided herein (the "Extended Adjustment Date"), the
"Extended Base Annual Rental" due hereunder shall be adjusted upward (but not
downward) by the annual percentage increase in the "Index." The first such
"adjustment" of the "Extended Base Annual Rental" herein




                                      -4-
<PAGE>   11
set forth shall be based upon the percentage increase in the "Index" between 
that published on the closest date of publication thereof prior to the 
commencement date of the "Extended Term" of this Lease, and that published on 
the closest date of publication thereof prior to the first annual anniversary 
date following the commencement of the "Extended Term" of this Lease, 
multiplied by 80%. Thereafter, the yearly "adjustment" during the "Extended 
Term" of this Lease shall be based upon the annual percentage change in the
"Index" multiplied by 80%. Upon each "Extended Adjustment Date" during the
"Extended Term" the "Extended base Annual Rental" then being paid shall be 
increased by an amount equal to the amount arrived at by multiplying the 
percentage increase in the "Index" for the preceding twelve months by 80%, the 
product of which shall then be multiplied by the then payable "Extended Base 
Annual Rental."

        If publication of the "Index" shall be discontinued, the parties hereto
shall thereafter accept the C.P.I. (Consumer Price Index) for all items, or if
that "Index" is discontinued the parties hereto shall thereafter accept
comparable statistics on the cost of living for United States cities, as they
shall be computed and published by an agency of the United States or by a
responsible financial periodical of recognized authority then to be selected by
the parties hereto. In the event of (1) use of comparable statistics in place of
the Index as above-mentioned, or (2) publication of the index figure at other
than bi-monthly intervals, there shall be made in the method of computation
herein provided for such revisions as the circumstances may require to carry out
the intent of this paragraph.

        5.      Security Deposit. Subject to collection, the Tenant has on the 
date this lease is signed by the parties hereto deposited with the Landlord the 
sum of $11,375.00 as security for the performance by the Tenant of the terms of 
this Lease. The Landlord may use, apply or retain the whole or any part of the 
security so deposited to the extent required for the payment of any rent and 
additional rent or other sum as to which the Tenant is


                                      -5-
<PAGE>   12
in default or for any loan which the Landlord may expend or may be required to 
expend by reason of the Tenant's default in respect of any of the terms of this 
Lease including, but not limited to, any damages or deficiency in the reletting 
of the leased property, whether such damages or deficiency accrued before or 
after summary proceedings or other re-entry by the Landlord. In the event that 
the Tenant shall comply with all of the terms of this Lease, the security 
deposit shall be returned to the Tenant at such time as Tenant has completed 
construction and installation of all improvements to be made by Tenant, and 
such improvements have been inspected and approved by the City of Boulder, and 
Landlord has been satisfied that all labor and materials incorporated into such 
improvements have been paid for or that all mechanics' lien rights with respect 
thereto have expired. In the event of a sale or lease of the premises of which 
the leased property forms a part, prior to refunding such deposit, the Landlord 
shall have the right to transfer the security deposit to the vendee or lessee 
and the Landlord shall thereupon be released from all liability for the return 
of such security deposit and the Tenant shall look solely to the new landlord 
for the return of such security deposit.  The Tenant shall not assign or 
encumber the money deposited as security, and neither the Landlord nor its 
successors or assigns shall be bound by any such assignment or encumbrance.

        6.      Taxes - Real Property - Responsibility. Tenant shall pay all 
taxes, levies and assessments including, but not limited to, the general real 
property taxes on 1655 Broadway and the land and improvements of which the 
leased premises are a part. Additionally, Tenant shall pay 100% of the increase 
in the general real property taxes due to any improvements to the leased 
premises made by Tenant. At the election of the Landlord, Landlord may advise 
Tenant of the estimated amount of such real property taxes, based on the most 
current available assessment and levy, and Tenant shall pay monthly to 
Landlord, as additional rent under the terms hereof, a sum equal to one-twelfth 
of Tenant's such estimated real property taxes. In the event the first and last 
months of the lease term are not full calendar months, the liability of Tenant 
under the terms hereof shall be prorated




                                      -6-
<PAGE>   13
with Tenant being liable for only those number of days in such month during 
which this lease was in effect.

        In the event Tenant has not paid any and all sales and/or use taxes due 
or claimed to be due by and to any governing municipality as and when due, 
Landlord may declare Tenant to be in default pursuant to the terms and 
conditions of the within lease agreement, and Landlord further reserves the 
right to require Tenant to submit proof to Landlord at any time and from time 
to time that payment for such taxes are and have been duly and timely made to 
and received by all governing municipalities and authorities.

        7.      Taxes - Personal Property - Responsibility. Tenant shall pay 
for any and all taxes and/or assessments levied and/or assessed against any 
furniture, fixtures, equipment and items of a similar nature installed and/or 
located in or about the leased premises by Tenant.

        8.      Insurance - Responsibility of Landlord. The Landlord shall have 
and maintain in effect at all times during the term of this Lease insurance 
coverage on the leased premises, including permanently installed improvements 
and betterments, in an amount of at least 80% of the replacement value covering 
losses by fire, wind, hail, explosion, riot, malicious mischief and vandalism. 
Coverage for loss due to flood will be obtained for maximum limit available. 
Tenant shall pay to Landlord, as additional rent due hereunder, the premium 
payable for such insurance coverage. Landlord shall notify tenant of the 
premium for such insurance, and on the first day of the month next following 
receipt of notification of the amount of such a premium, and on the first day 
of each month thereafter until subsequent notification of any change, tenant 
shall pay to landlord 1/12th of the amount of such annual premium.

        Property damage insurance maintained by Landlord will not cover 
exterior signs, fences or other exterior improvements, nor shall it provide 
coverage for loss by earthquake, theft, or any other peril not listed above.




                                      -7-
<PAGE>   14
        9.      Insurance -- Responsibility of Tenant.

                A.      During the construction of any improvement to the
leased premises by tenant, tenant shall obtain and maintain workman's
compensation insurance as shall be required by the laws of the State of
Colorado or shall insist upon such coverage being maintained by the contractor
doing the construction. Tenant shall further obtain and maintain during the
course of any such construction a specific policy or endorsement affording to
the landlord public liability insurance protection during the course of such
construction, in which landlord shall be named as an insured. Before any work
on the leased premises is commenced by tenant, tenant shall furnish to landlord
proof of such insurance coverage.

                B.      Tenant shall procure, pay for and maintain at all times
during the term of this lease comprehensive public liability insurance with
limits of at $500,000 per occurrence for bodily injury and not less than
$100,000 per occurrence for property damage. Such policy shall specifically
name landlord as an additional insured therein. Tenant shall deliver to
landlord a certificate of insurance evidencing such coverage, which certificate
of insurance and policy shall assure landlord that the same may not be
cancelled or terminated by the carrier without at least 30 days prior written
notification to landlord.

                C.      Tenant shall procure, pay for and maintain at all times
during the term of this lease property damage insurance and flood insurance, in
such amounts as tenant may deem appropriate, covering damage to inventory,
fixtures, business equipment, building glass, exterior signs, fences, storage
facilities or other improvements installed or erected by tenant, other than
interior real property improvements and betterments.

        10.     Utilities. Tenant shall pay the cost of the installation of all
meters and for all the ongoing utility services for the leased premises,
including, but not limited to, heat, water, gas, electric and sewer services.
In no event shall Landlord be liable for any interruption or failure in the
supply of any such utility to the leased premises not caused by the Landlord.

        11.     Parking Facilities. Landlord shall provide to Tenant nine
parking spaces at the location depicted upon the diagram attached hereto as
Exhibit "B". Landlord, at its cost, shall provide for all snow removal, repair,
maintenance, replacement and striping of the parking lot, except as otherwise
provided herein. Tenant, or Tenant in conjunction with other 





                                      -8-
<PAGE>   15
tenants using the parking lot, shall be responsible for monitoring, supervising,
policing and enforcing the exclusivity of the parking spaces which are
specifically allocated to Tenant as shown on Exhibit "B".

        12.     Tenant's Operating and Upkeep Expense. The Tenant at its own
expense shall be responsible for the reasonable and necessary operation,
maintenance and repair of the leased premises, including, but not limited to,
exterior signs, fences, storage facilities, sidewalks, parking areas, plumbing
and all interior utility equipment installed or erected by Tenant. Landlord
will keep the roof, structural parts of the walls, foundations and other
structural parts of the building in good repair.

        13.     Alterations, Changes and Additions by Tenant.

                A.      Landlord's Initial Responsibilities. Within sixty (60)
days following the date this Lease is signed by both Landlord and Tenant,
Landlord shall, at its cost and expense, take whatever steps may be necessary
to assure that the presently installed fire sprinkler system in the leased
premises is in operating condition and that the present ceiling insulation is,
if now inadequate, brought up to satisfy requirements of the City of Boulder
Building Code. Any modifications of the sprinkler system required to suit
Tenant's needs or remodeling plans as a result of Tenant's intended use of the
leased premises shall be made by Tenant at Tenant's sole cost and expense. In
the event floodgates in or on the leased premises are required by the City of
Boulder laws, codes or regulations, Tenant shall obtain and submit to Landlord
bids for, or estimates of, the cost of installing the same. If approved by
Landlord, Tenant shall thereafter cause such floodgates to be installed and,
upon completion, Landlord shall reimburse Tenant the bid or estimate amount. If
not approved by Landlord, Landlord shall cause such floodgates to be installed,
at Landlord's cost and expense, at or by the time Tenant has completed its
remodeling and is ready to occupy the leased premises.





                                      -9-
<PAGE>   16
        Landlord agrees to pay for, and provide, any necessary upgrading of 
utility service lines, and meter stub-ups for the leased premises as may be 
required by the City or utility companies. Tenant agrees to pay for, and have 
installed, any required meters, disconnects, service and distribution panels 
or lines that Tenant shall deem necessary.

        B.      Interior of Leased Premises. Tenant may, during the term of
this Lease, at Tenant's expense, but only upon demonstration of Tenant's
financial ability and with the prior written approval of the Landlord, such
approval not to be unreasonably withheld or delayed erect inside partitions,
add new or add to existing plumbing and electric power service, add telephone
outlets, add light fixtures, install additional heating and/or air conditioning
or make such other changes or alterations as Tenant may desire, all of which
shall be subject to Landlord's prior written approval of all materials,
designs, and specifications, and which approval shall be obtained prior to
Tenant's submission to any governing authority for any building permits. Prior
to the commencement and during the course of such construction, Tenant shall
comply with the existing PUD for the leased premises and all relevant laws,
ordinances, regulations and orders and shall procure all necessary approvals,
permits and certificates in connection therewith as may be required by all
governmental agencies having jurisdiction thereof. At the end of this Lease,
all such fixtures, additions, and/or alterations (except trade fixtures,
if any, installed by Tenant and, if any, to be described on Exhibit "D" and
attached hereto) shall be and remain the property of Landlord; provided,
however, Landlord shall have the option to require Tenant to remove any
or all such fixtures, additions and/or alterations Landlord deems to be of a
specific use or nature, and to restore the leased premises to good condition,
all at Tenant's cost and expense. All such work shall be done in a good and
workmanlike manner and shall consist of new materials unless agreed to
otherwise by Landlord, and all such work, upon completion, must be approved by
the Building Inspector of the City of Boulder and all other governing
authorities having jurisdiction thereof. Any 





                                      -10-
<PAGE>   17
and all repairs, installations, changes and/or modifications thereto shall be
the responsibility of and at the cost of Tenant.

                C.      Exterior of Leased Premises. Landlord must approve in
writing, which approval shall not be unreasonably withheld, any signs to be
placed in or on the leased premises, regardless of size or value, and/or any
addition, change or alteration to the exterior of the leased premises. Prior to
the cutting of any holes in the roof and/or any exterior surfaces or prior to
any work being performed and/or any equipment being installed on the roof by
Tenant, Tenant must submit to Landlord a structural report of the work to be
performed. The prior written approval of such work by the Landlord is to be
obtained by Tenant, which approval shall not be unreasonably withheld. If
Tenant fails to obtain such prior written approval, then any roof or structural
repairs necessitated by such change shall be the responsibility of Tenant. As a
condition to the granting of such approval, Landlord shall have the right to
require Tenant to furnish a bond or other security acceptable to Landlord
sufficient to insure completion of and payment for any such work to be so
performed. Prior to the commencement and during the course of such
construction, Tenant shall comply with the existing PUD for the leased premises
and relevant laws, ordinances, regulations and all orders and shall procure all
necessary approvals, permits and certificates in connection therewith as may be
required by all governmental agencies having jurisdiction thereof.

        14.     Care of Property -- Responsibility.

                Tenant shall furnish and maintain in good repair all equipment,
machinery and appliances necessary for heat and air conditioning, furnish and
maintain roughed-in electrical wiring and plumbing, provide all exterior
maintenance, repairs and groundskeeping to and for the leased premises, except
for repairs to the roof and other structural parts of the building. Tenant
shall also be responsible for, and shall provide for, snow removal in
connection with those sidewalk access facilities which are depicted on Exhibit
"B" attached hereto (exclus-





                                      -11-
<PAGE>   18
ive of the parking lot). Regardless of anything to the contrary herein, it 
shall be Tenant's sole responsibility to repair, maintain, and replace any and 
all improvements made by Tenants, both within and without the demised premises 
throughout the term of this Lease.

        Landlord may, but shall not be required to, enter the leased premises 
at all reasonable times to make such repairs, alterations, improvements and 
additions, including repairs and alterations to ducts and all other facilities 
for air conditioning service as Landlord may be required to do by the City of 
Boulder or by the order or decree of any court or by any other governmental 
authority, all at the sole cost and expense of Tenant.

        Tenant shall have the option to terminate this lease if Tenant is 
required by the City of Boulder or any other governmental authority to make 
repairs, alterations, improvements or additions to the leased premises costing 
in excess of the amount of $25,000.00; provided, however, that the foregoing 
shall not pertain to any repairs, alterations, improvements or additions 
initially proposed to be made to the leased premises by Tenant immediately 
following the inception of this lease nor during the first six (6) months of 
the term hereof. In the event Tenant elect to terminate this lease pursuant to 
this paragraph, Landlord shall not be liable to Tenant for any damages 
resulting from such termination, nor shall Landlord be obligated to refund to 
Tenant any security deposit then held by Landlord.

        Tenant will, at his own expense (but subject to any contractors' or 
builders' warranties) keep the leased premises, which shall be deemed to 
include all areas within or inside the exterior door to the leased premises and 
the exterior door itself, including all exterior glass, in good repair and 
tenantable condition during the term of this Lease, and Tenant shall promptly 
and adequately repair all damage to the leased premises and replace or repair 
all damaged or broken glass, fixtures and appurtenances, under the supervision 
and with the approval of Landlord, within a reasonable period of time. If 
Tenant does not do





                                      -12-
<PAGE>   19
so, Landlord may, but need not, make such repairs and replacements, and Tenant
shall pay Landlord the cost thereof forthwith upon being billed for same.

        Tenant is responsible for replacement of all burned-out light bulbs
within the leased premises whether the light fixture is owned by Tenant or
Landlord. Tenant further agrees at the end of the term to return the leased
premises to Landlord in substantially as good condition as when received,
except for usual and ordinary wear and tear. Tenant further agrees to be
responsible for any repairs and/or maintenance required for any part of the
improvements of which the leased premises are a part where such repair and/or
maintenance is necessitated by actions or inactions of Tenant and/or activities
conducted by Tenant on the leased premises and/or as may be necessitated by any
governing authority.

        15.     Control of Common Areas. All parking areas, grounds and other
facilities furnished by Landlord in, on or near the improvements of which the
leased premises are a portion, shall at all times be subject to the exclusive
control and management of the Landlord, and Landlord shall have the right from
time to time to establish, modify and enforce reasonable rules and regulations
with respect to said facilities and said areas; provided, however, that such
exclusive control and management of the parking area shall not impose upon
Landlord the obligation to provide, beyond the extent or degree which Landlord
may voluntarily elect to provide, for policing, supervision, and enforcement of
the exclusivity of the particular parking spaces assigned to tenant pursuant to
paragraph 11 of this Lease.

        16.     Use of the Premises and Care of Grounds -- Tenant. Tenant shall
use the leased premises primarily for retailing of clothing goods and related
activities and services, and other uses as permitted herein. The use of the
leased premises for any other purpose is hereby expressly prohibited unless
Landlord otherwise agrees in writing. Tenant shall continuously and
uninterruptedly during the term or any extended term of this Lease occupy and
use the leased premises for the purposes hereinabove specified unless prevented
from doing by causes beyond Tenant's control. The requirements of the preceding
sentence shall not be breached or violated by closings of Tenant's business
operations for holidays or weekends, or by





                                      -13-
<PAGE>   20
closings during vacation periods of no more than two consecutive weeks
occurring no more frequently than twice each calendar year. Tenant shall not do
anything in or about the leased premises, which will, in any way, void or make
voidable any insurance on the leased premises and/or the improvement of which
the leased premises are a part and/or the real property on which said
improvements are located. Tenant agrees to pay, as additional rent, an amount
equal to any increase in the insurance premiums that may be charged during the
term of this lease for the amount of the insurance carried by Landlord on the
total improvements of which the leased premises are a part and/or the real
property on which said improvements are located. Tenant agrees to pay, as
additional rent, an amount equal to any increase in the insurance premiums that
may be charged during the term of this Lease for the amount of the insurance
carried by Landlord on the total improvements of which the leased premises are
a part when such increase results from activities carried on by Tenant on the
leased premises, whether or not Landlord has consented to the same. Tenant
shall conform to all present and future laws and ordinances of any governmental
authority having jurisdiction over the leased premises. Tenant shall not allow
any accumulation of trash or debris on the leased premises or within any
portion of the improvements of which the leased premises are a part. No storage
of any material outside of the leased premises shall be allowed unless first
approved by Landlord in writing, and then in only such areas as are designated
by Landlord. Tenant will not use or permit upon the premises anything
unreasonably dangerous to life or limb. Tenant will not in any manner deface or
injure the building or any part thereof. Tenant shall not commit or suffer any
waste on the leased premises nor shall Tenant permit any nuisance to be
maintained on the leased premises or permit any disorderly conduct, common noise
or other activity having a tendency to annoy or disturb any occupants of any
part of the improvements of which the leased premises are a part and/or any
adjoining property, except





                                      -14-

<PAGE>   21
during the period of construction of any improvements to be made by Tenant as
provided herein, which period of construction shall not continue for longer
than three (3) months from the commencement date of this Lease or as reasonably
may be necessary thereafter.

        17.     Liability for Overload.  It shall be Tenant's sole and
exclusive responsibility to meet all fire regulations of any governmental unit
having jurisdiction over the leased premises as such regulations affect
Tenant's use of sidewalks and pavements adjoining the same which will result
from the movement of heavy articles. Tenant shall be liable for the cost of any
damage to the leased premises, the improvements of which the leased premises
are a part or the sidewalks and pavements adjoining the same which will result
from the movement of heavy articles. Tenant shall not unduly load or overload
the floors or any part of leased premises.

        18.     Glass and Door Responsibility.  Replacement and repair of all
glass and doors on, within or bounding the leased premises shall be the
responsibility of the Tenant. Any replacement or repair shall be promptly
completed at the expense of the Tenant.

        19.     Rules and Regulations.  Landlord reserves the right to adopt
and promulgate reasonable rules and regulations applicable to the leased
premises and the land and improvements of which the leased premises are a part
and from time to time to amend or supplement said rules and regulations. Notice
of such rules and regulations and amendments and supplements thereto shall be
given to Tenant, and Tenant agrees to comply with and observe such rules and
regulations and amendments and supplements thereto, provided, however, the same
shall apply uniformly to all tenants of the improvements of which the leased
premises are a part and shall not materially adversely affect Tenant's rights
hereunder. 

        20.     Damage to Leased Premises.  In the event that the leased
premises are destroyed or so damaged by fire or other casualty that, as
reasonably estimated by landlord, repairs to the leased premises in order to
render the same tentantable once again would require in excess of 120 days from
the date of the




                                      -15-
<PAGE>   22
destruction or damage if promptly and diligently processed, the landlord shall
have the option to terminate this Lease, provided that if the landlord wishes
to terminate this Lease it give written notice of termination to tenant within
thirty (30) days of the date of such damage or the option to terminate shall be
void. In the event that landlord exercises the option to terminate, this Lease
shall be deemed to have been terminated on the day of the casualty and the
tenant shall surrender possession within ten days after the effective date of
the notice of termination. In the event that Landlord does not exercise the
said option to terminate this Lease, the Landlord, at its sole expense, shall
repair the damage with reasonable dispatch, restoring the leased premises as
nearly as possible to its condition prior to such damage, including any
addition or improvements made by the tenant which become the property of the
Landlord under the terms of this Lease, but excluding other Tenant fixtures,
contents or improvements with respect to which Tenant is obligated under this
Lease to maintain property damage insurance coverage. If the damage to the
leased premises has rendered the leased premises untenantable, either in whole
or in part, unless Landlord elects to terminate this Lease as aforesaid and
unless and except where such casualty damage was caused by Tenant's negligence,
there shall be an equitable reduction in rent until the damage has been
repaired. In determining what constitutes reasonable dispatch, consideration
shall be given to delays caused by strikes, adjustments of insurance, and other
causes beyond the Landlord's control; provided, however, that in the event the
damage has not been repaired within nine (9) months from the date of said
damage, Tenant, in its sole discretion, may terminate this Lease by given ten
(10) days' written notice thereof to the Landlord.

        Landlord and Tenant hereby grant to each other, on behalf of themselves
and any insurer providing fire and extended insurance coverage to either of
them covering the leased premises, improvements thereon and contents therein, a
waiver of liability to the extent of losses covered by either's insurance
coverage and any right of subrogation that any such insurer of one party may
have against the other party by virtue of payment of any loss under such
insurance, such waiver to be effective so long as each is empowered to grant
such waiver under the terms of his or its insurance policy or policies. The
foregoing shall not constitute a waiver of any claim of liability by either
party against the other for losses suffered by either that are not covered by
insurance coverages maintained or required to be maintained pursuant to the
terms of this Lease, including, without limitations, losses within policy
deductible amounts or losses in excess of limits of coverage either actually
maintained or required by this Lease to be maintained, whichever is greater.





                                      -16-


<PAGE>   23
        21.     Inspection of and Right of Entry to Leased Premises.

                A.      Landlord, and/or Landlord's agents and employees, shall
have the right to enter the leased premises at all times during regular
business hours and, at all times during emergencies, to examine the leased
premises, to make such repairs, alterations, improvements or additions as
Landlord may deem necessary or desirable, provided there is no unreasonable
interference with Tenant's substantially the same conduct of its business, and
Landlord shall be allowed to take all materials into and upon said premises
that may be required therefor without the same constituting an eviction of
Tenant in whole or in part, and the rent reserved shall in no way abate while
such repairs, alterations, improvements or additions are being made, for reason
of loss or interruption of business of Tenant or otherwise. Landlord reserves
the right, at any time during the term hereof, to exhibit the leased premises
to any prospective purchaser of the improvements of which the leased premises
are a part and/or to place upon the leased premises and/or the improvements of
which the leased premises are a part a notice or sign indicating the property
is for sale, and during the ninety (90) days prior to the expiration of the
term of this Lease or any renewal thereof, Landlord may exhibit the premises to
prospective tenants and may place upon the leased premises the usual notices
indicating the leased premises are for lease.

                B.      Landlord shall have the right to approve the weight,
size and location of safes and other heavy equipment and articles in and about
the leased premises and the access and parking areas and to require all such
items and furniture and similar items to be moved into and out of the building
and within the building and leased premises only at such times as will not
interfere with business operations of other tenants. Movements of Tenant's
property into or out of the building and within the building are entirely at
the risk and responsibility of Tenant.





                                      -17-
<PAGE>   24
                C.      Landlord shall have the right to take all reasonable 
measures necessary for the security of the building and its occupants. Tenant 
agrees, however, that security within its leased premises is solely the 
responsibility of the Tenant.

                D.      Nothing contained herein shall impose any obligation 
upon the Landlord to do or perform any of the above and foregoing. Landlord may 
enter upon the premises and may exercise any or all of the foregoing rights 
hereby reserved without being deemed guilty of an eviction or disturbance of 
Tenant's use or possession and without being liable in any manner to Tenant.

        22.     Covenant against Liens.

        Tenant shall post notice pursuant to section 38-22-101, et seq., C.R.S.
1973, as amended, negating Landlord's liability for any mechanic's liens
resulting from any work, labor or materials performed for or delivered at
Tenant's request for incorporation into the leased premises.

        In case any such lien attaches to the leased premises for work claimed
to have been furnished to Tenant, Tenant shall promptly and within ten (10)
days either pay off or otherwise satisfy or remove lien at Tenant's expense, or
file with the Clerk of the District Court in Boulder County a corporate surety
bond equal to one and one-half the amount of the lien, or such other amount as
may be required to remove said lien, plus all costs associated therewith
pursuant to the requirements of section 38-22-131 C.R.S. (1981 Cum. Supp.) and
any amendments thereto.

        Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon Landlord's title or
interest in the leased premises, and any and all liens and encumbrances created
by Tenant shall attach to Tenant's interest only.




                                      -18-

<PAGE>   25
        23.     Default - Remedies of Landlord. Annual Base Rent and any other
amount to be paid with the Annual Base Rent in regular monthly installments
shall be due on the first day of each calendar month and shall be delinquent if
not received by Landlord on or before the tenth of the month. Any other rent,
fee, charge or payment to be made by Tenant hereunder (all of which are to be
considered additional rental payments, unless other time limits for payment are
prescribed herein), shall be due ten days after receipt by Tenant of a
statement from Landlord and shall be delinquent if not received by Landlord
within ten days from the date due.

        If Tenant shall be delinquent in the payment of rent or other charges
due from Tenant hereunder or default in the keeping of any of the terms,
covenants or conditions of this Lease to be kept and/or performed by Tenant, or
if any proceedings be commenced by or for Tenant under any of the bankruptcy
laws or if Tenant is adjudged insolvent by any court, or if Tenant makes an
assignment for the benefit of creditors, or if Tenant enters into a general
extension agreement with creditors, or if Tenant's leasehold interest shall be
levied upon by execution or seized by virtue of any writ of any court of law,
then such events, if not cured within thirty (30) days after notice of default
(from Landlord to Tenant), shall constitute a breach of this Lease and Landlord
may, at Landlord's option, exercise any one or more of the rights available to
Landlord under the laws of the State of Colorado now or hereafter in effect,
consequently or concurrently, including, without limitation, those set forth
below. Upon the occurrence of any event of default, Landlord shall give written
notice thereof to Tenant, specifying the act or event of default, in accordance
with the notice provisions set forth in paragraph 35 of this Lease. Tenant
shall have thirty (30) days following the effective date of such notice within
which to cure and/or correct such default. Upon Tenant's failure to do so:




                                      -19-
<PAGE>   26
                A.      Landlord may, if Tenant refuses upon proper demand to
quit the premises, immediately or at any time thereafter, terminate this Lease
pursuant to section 13-40-101, et seq., C.R.S. 1973, as amended, and obtain
through judicial process a writ of restitution and thereby repossess the leased
premises, together with all additions, alterations and improvements thereto.
Landlord may, at its option, at any time and from time to time thereafter,
relet the leased premises or any part thereof for the account of Tenant or
otherwise, and receive and collect the rents therefor and apply the same first
to the payment of such expenses as Landlord may have incurred in recovering
possession and for putting the same in good order and condition for re-rental,
and expense, commissions and charges paid by Landlord in reletting the leased
premises. Any such reletting may be for the remainder of the term of this Lease
or for a longer or shorter period. In lieu of reletting such leased premises,
Landlord may occupy the same or cause the same to be occupied by others.
Whether or not the leased premises or any part thereof be relet, and provided
that Landlord does not reoccupy them, Tenant shall pay the Landlord the rent and
all other charges required to be paid by Tenant up to the time of the expiration
of this Lease or reoccupancy by Landlord, as the case may be, and thereafter,
Tenant, if required by Landlord, shall pay to Landlord until the end of the term
of this Lease, the equivalent of the amount of all rent reserved herein and all
other charges required to be paid by Tenant, less the net amount received by
Landlord for such reletting, if any, and Landlord shall have the duty to
exercise its best effort to re-lease the premises, and nothing herein is
intended to alter such obligation of the Landlord.





                                      -20-
<PAGE>   27
        If the leased premises shall be re-occupied by Landlord, then, from
and after the date of repossession, the Lease shall be deemed to have been
terminated by Landlord and Tenant shall be discharged of any obligations to
Landlord under the provisions hereof for the payment of rent.

        In the event of any default by Tenant, and regardless of whether the
premises shall be relet or possessed by Landlord, any fixtures, additions, and
the like then on the premises may be retained by Landlord, in accordance with
the provisions herein.

        In the event Tenant is in default under the terms hereof and, by the
sole and reasonable determination of Landlord. Tenant is in default and has
abandoned the leased premises, Landlord shall have the right to remove all of
Tenant's property from the leased premises and dispose of said property in a
commercially reasonable manner, and in accordance with the provisions herein,
all at the cost and expense of Tenant and without liability of Landlord for the
actions so taken. Such re-entry and removal of personal property shall not be
considered or construed to be a forcible entry and shall be a remedy in
addition to and separate and apart from the Landlord's right of distraint
provided for in paragraph 23D below.

                B.      Landlord shall also have the right to continue this
lease in full force and effect, including Tenant's right to possession and
Landlord's right to collect rental as it becomes due, provided Landlord may, at
Landlord's option, take any action necessary or appropriate, including entering
upon the demised premises to cure any breach, in which event the reasonable
cost to Landlord for such cure, including attorney's fees, shall become
immediately due and payable by Tenant as additional rental per annum. Any
installment of rent or other payment which is not paid when due shall bear
interest at the rate of eighteen per cent (18%) per annum.

                C.      Additionally, Landlord shall have the right to seek
such equitable relief as may be appropriate.




                                      -21-
<PAGE>   28
enter upon the leased premises at any reasonable time to exercise its right of
distraint against any property of the Tenant and may, subject to the provisions
herein, seize such property having a value of the amount of unpaid rent and
Landlord may keep said property in its possession until the time such rental
payment or payments have been made.

                E.      All powers and remedies given by this Lease to Landlord
may be exercised, from time to time, and as often as occasion may arise or as
may be deemed expedient. No delay or omission of Landlord to exercise any right
or power arising from any default shall impair any such right or power or shall
be considered to be a waiver of any such default or acquiescence thereof. The
acceptance of rental by Landlord shall not be deemed to be a waiver of any
breach of any of the covenants herein contained or of any of the rights of
Landlord to any remedies herein given.

        24.     Legal Proceedings -- Responsibility. In the event of any
proceeding at law or in equity wherein Landlord, without being in default as to
its covenants under the terms hereof, shall be made a party to any litigation
by reason of Tenant's interest in the leased premises, Landlord shall be
allowed and Tenant shall be liable for and shall pay all costs and expenses
incurred by Landlord, including reasonable attorneys' fees, except those costs,
expenses and fees covered by policies of insurance held by Landlord, assuming
such costs, expenses and fees are, in fact, paid to the Landlord. In the event
either party shall be required to commence any legal proceeding relating to the
leased premises and/or Tenant's occupancy thereof and/or Tenant's relation
thereto, prevailing party shall be allowed and other party shall be liable for
and shall pay all costs and expenses incurred by the prevailing party, including
reasonable attorneys' fees.

        25.     Hold Harmless of Landlord and Tenant. Except to the extent of
the waiver of liability and subrogation rights for insured losses, as set forth
in paragraph 20 of this Lease, Landlord and Tenant will indemnify and hold the
other harmless from and against any and all claims, losses, expenses, costs,
judgments and/or demands arising from their respective conduct on 





                                      -22-
<PAGE>   29
the leased premises and/or on account of their respective operation or actions
and/or from and against all claims arising from any breach or default by them
or any act of negligence by them, their agents, contractors, servants,
employees, licensees, or invitees; or any accident, injury or death of any
person or damage to any property in or about the leased premises arising from or
caused by their respective conduct, misconduct or negligence.

        26.     Assignment or Subletting. Tenant shall not without the consent
of the Landlord, which shall not be unreasonably withheld, assign this Lease or
any interest hereunder, or suffer or permit any assignment thereof by operation
of law. Tenant may sublet the leased premises or any part thereof or permit the
use of the premises by any parties other than Tenant, its agents and employees
for any use, provided, however, that no use of the leased premises by Tenant or
any Subtenant or other user should be permitted for the purpose of operating
therein any food preparation or sales or restaurant use; any adult
entertainment arcade, show or bookstore; any night club; or other business or
use of a similar nature to those just enumerated, nor for any activity
disallowed by any reason by any regulatory or governing authority, and further
provided that prior to any such subletting, Tenant shall execute any additional
form requested by Landlord to further enumerate or effectuate an assignment of
leases and rents between Tenant and any sub-tenant.

        In the event Tenant subleases all or any part of the leased premises,
Tenant hereby assigns, transfers and sets over unto Landlord all of Tenant's
right, title and interest in and to any such subleases and any extensions and
renewals thereof and the rents, profits and income derived from the property by
or through such subleasing, with full and complete authority and right in the
landlord, in case of default by Tenant in the payment of the rental due under
this lease or the failure of the Tenant to comply with any of the other terms
and conditions contained in this lease, to demand, collect, receive and receipt
for such sublease rents, profits and income and to apply the same against any
and all amounts owing from Tenant to Landlord under this lease. Tenant
covenants and agrees not to receive or collect any rents from any present or
future sublessees of the leased premises or any part thereof for a period of
more than one





                                      -23-
<PAGE>   30
month in advance, nor to pledge, transfer, mortgage or otherwise encumber or
assign future payments of said rents, nor to waive, excuse, condone, discount,
set off, compromise or any manner release or discharge any subtenants of and
from any obligations, covenants, conditions and agreements by the said
subtenants to be kept, observed and performed, including the obligations to pay
the rents thereunder. In the event Tenant defaults in the observance or
performance of any term, obligation, covenant, condition or warranty in this
paragraph, then, in each such instance the same shall constitute and be deemed
to be a default under this lease. So long as there shall exist no default by
Tenant in the payment of any amount due Landlord under this lease or in the
observance and performance of any other obligation, term, covenant or condition
herein, Tenant shall have the right under a license granted hereby to collect
upon, but not prior to accrual, all of the said rents arising from or out of
subleases of the leased premises or any renewals or extensions thereof, and
Tenant shall receive such rents and shall hold the same as well as the right
and license to receive the same as a trust fund to be applied (and Tenant
hereby covenants to so apply the same) to the payment of any and all amounts
due from Tenant to Landlord under this lease. Tenant will deliver to Landlord
copies of any and all executed subleases pertaining to the leased premises and
agrees to make, execute and deliver unto Landlord upon demand at any time or
times, any and all assignments and other instruments sufficient for the purpose
or that the Landlord may deem to be advisable for carrying out the true
purposes and intent of the foregoing assignment.

        27.     Warranty of Title. Landlord covenants it has good right to
lease the leased premises in the manner described herein and that Tenant shall
peaceably and quietly have, hold, occupy and enjoy the premises during the term
of the Lease.

        28.     Governmental Acquisition of Property. In the event all or any
portion of the leased premises and/or the improvements of which the leased
premises are a part shall be taken by condemnation or eminent domain, Landlord
shall have the right to terminate this lease upon written notice to Tenant,
provided, however, that in the event only a portion of the leased premises
shall be so taken by condemnation or eminent domain, the Tenant, with the
written consent of Landlord which shall not be unreasonably withheld, shall
have the right to continue leasing any portion of the leased premises not so
taken by governmental action upon the same terms and conditions as provided 
herein,





                                      -24-
                                        
<PAGE>   31
except that the base annual rental due hereunder shall be prorated to reflect
the actual number of square feet then available for Tenant's use. Landlord
agrees not to initiate or otherwise request that any condemnation proceedings
be instituted against the property.

        Landlord shall have complete freedom of negotiation and settlement of
all matters pertaining to the governmental acquisition of the real property and
real property improvements, it being understood and agreed that any financial
settlement respecting the land and the improvements to be taken, whether
resulting from negotiation and agreement or condemnation proceedings, shall be
the exclusive property of Landlord, except to the extent that Tenant shall be
entitled to share with Landlord in any such financial settlement or award to
the extent of the undepreciated value of Tenant's real property improvements
and betterments, calculated on the basis of such improvements or betterments 
being written off by Tenant over the initial six-year term of this lease. The
foregoing, however, shall not preclude Tenant from claiming and obtaining from
anyone other than Landlord compensation for the taking of any personal property
belonging to Tenant or for incidental damages suffered by Tenant so long as such
incidental damages do not detract or diminish from the recovery to which
Landlord might otherwise be entitled. The taking of the land or any improvements
leased hereunder shall not be considered as a breach of this lease by Landlord,
nor give rise to any claims by Tenant for damages or compensation from Landlord
except as hereinabove provided.

        29.     Changes and Additions to Improvements by Landlord.  Landlord
reserves the right at any time to make alterations or additions to the
improvements of which the leased premises are a part and/or to build additions
or other structures adjoining said improvements. Landlord also reserves the
right to construct other buildings and/or improvements in the immediate area of
the improvements in which the leased premises are located and to make
alterations or additions thereto, all as Landlord shall determine. However,
such changes and additions by Landlord shall not deny Tenant access to the
leased premises nor shall they materially impair or impede Tenant's ability to
make reasonable use of the leased premises as provided in Section 16 herein,
and Landlord shall use its best efforts to prevent such denial of access to, or
impairment of,




                                      -25-
<PAGE>   32
use of the leased premises. Landlord further reserves the exclusive right to
the roof of the improvements of which the leased premises are a part and the
airspace above said roof; provided, however, that Tenant shall have the right
to install and maintain improvements on the roof subject to the provisions of
this Lease. In the event a significant alteration or addition is to be made by
Landlord upon the leased premises, Landlord shall give to Tenant written notice
of such alteration or addition prior to commencement of construction thereof.
Tenant shall, within thirty (30) days following receipt of any such notice,
register with Landlord, in writing, any objection or protest thereto, and upon
failure to do so shall be deemed to have waived any objection or protest 
thereto.

        30.     Subordination. It is expressly understood and agreed that this
Lease shall be subject and subordinate to any mortgage or deed of trust now
upon the demised premises and any mortgage or deed of trust hereafter placed
upon the demised premises, provided that the mortgagee or beneficiary under
such future mortgage or deed of trust agrees in writing with Tenant or adequate
provision is made in such mortgage or deed of trust that, regardless of any
default or breach under said mortgage or deed of trust or of any possession or
sale of the whole or any part of the premises under or through such mortgage or
deed of trust, this Lease and Tenant's possession shall not be disturbed by
mortgagee or beneficiary or any other party claiming under or through such
mortgage or deed of trust; provided, however, that Tenant shall continue to
observe and perform Tenant's obligations under this Lease and pay rent to
whomsoever may be lawfully entitled to same from time to time. Tenant hereby
agrees to execute, if same is required, any and all instruments in writing
which may be requested by Landlord to subordinate Tenant's rights acquired by
this Lease to the lien of any such mortgage or deed of trust, as aforesaid.





                                      -26-


<PAGE>   33
        31.     Holding Over. If, after expiration of the term of this Lease,
including any renewal thereof, Tenant shall remain in possession of the leased
premises and continue to pay rent without a written agreement as to such
possession, the Tenant shall be deemed a month-to-month Tenant and the rental
rate during such holdover Tenant shall be equivalent to the monthly rental paid
for the last month of tenancy under this Lease and shall be increased by an
amount equal to twenty-five (25%) per cent of said last monthly rental amount.
No holding over by Tenant shall operate to renew or extend this Lease without
the written consent of Landlord to such renewal or extension having first been 
obtained.

        32.     Modification. No modification of this Lease shall be binding
unless in writing and signed by the parties hereto.

        33.     Late Charge. The Landlord shall have the right to collect from
Tenant a collection charge for each and every payment due to Landlord hereunder
which is delinquent, said charge being Twenty Five and No/100 Dollars ($25.00)
or three per cent (3%) of said payment, whichever sum shall be greater. Said
amounts shall be considered late rental payments under the terms of this lease.
Payment of such late rental payments shall not excuse or cure any default by
Tenant under this Lease.

        34.     Memorandum of Lease - Recording. The parties hereto agree this
Lease shall be recorded.

        35.     Notice Procedure. All notices, demands, and requests which may
or are required to be given by either party to the other shall be in writing
and such that are to be given to Tenant shall be deemed to have been properly
given if served on Tenant or sent to Tenant by United States registered mail,
return receipt requested, properly sealed, stamped, and addressed to Tenant at
Box 588, Taos, New Mexico, 87571, and such as are to be given to Landlord shall
be deemed to have been properly given if personally served on Landlord or if





                                      -27-
<PAGE>   34
sent to Landlord, United States registered mail, return receipt requested,
properly sealed, stamped and addressed to Landlord's representative as
indicated herein, or at such other place as Landlord may from time to time
designate in a written notice to Tenant. Any notice given by mailing shall be
effective as of the date of mailing as shown by the receipt given therefor.

        36.     Controlling Law. This lease and all terms hereunder shall be
construed consistent with the laws of the State of Colorado. Any dispute
resulting in litigation hereunder shall be resolved in Court proceedings
instituted in Colorado in no other jurisdiction.

        37.     Binding Upon Successors. The covenants and agreements herein
contained shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, personal representatives, successors and assigns. This Lease
shall be signed by the parties in duplicate, each of which shall be a complete
and effective original Lease.

        38.     Partial Invalidity. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Lease of the
application of such term, covenant or condition to persons and circumstances
other than those to which it has been held invalid or unenforceable, shall not
be affected thereby, and each term, covenant and condition of this Lease shall
be valid and shall be enforced to the fullest extent permitted by law.

        39.     Broker's Commission. Tenant warrants and represents that Ruth
Kinnie and Moore and Company are the only persons and/or companies with the
Tenant has dealt that brought about this lease agreement, and Tenant does
hereby indemnify and hold Landlord harmless from and against any claim for
commissions, fees, or payments of any kind, or notice from any and all other
persons and/or companies with whom the Tenant may have dealt.





                                      -28-
<PAGE>   35
        40.     Miscellaneous. All marginal notations and paragraph headings
are for purposes of reference and shall not affect the true meaning and intent
of the terms hereof. Throughout this Lease, wherever the words "Landlord" and
"Tenant" are used, they shall include and imply to the singular, plural,
persons both male and female, companies, partnerships and corporations, and in
reading said Lease, the necessary grammatical changes required to make the
provisions hereof mean and apply as aforesaid shall be made in the same manner
as though originally included in said Lease.

        See Exhibit A attached hereto for further provisions and amendments to
this Lease.

        IN WITNESS WHEREOF, the parties have executed this Lease as of the date
hereof.

                LANDLORD:       COLORADO NATIONAL BANK, Boulder Nominee

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

                TENANT:         OVERLAND SHEEPSKIN CO.

                                By: /s/ JAMES LEAHY
                                    -----------------------------------------
                                        James Leahy, President






                                      -29-

<PAGE>   36
                                   EXHIBIT E
                                   ---------

                               TO LEASE AGREEMENT

                                    BETWEEN

               COLORADO NATIONAL BANK, BOULDER NOMINEE (Landlord)

                                      AND

                        OVERLAND SHEEPSKIN CO. (Tenant)

                               DATED MAY 4, 1984

        The following terms and provisions are incorporated by reference into
the Lease, and amend, modify, and supersede anything to the contrary contained
in the Lease.

        A.      With reference to paragraph 13B of the Lease, the following
proviso of such paragraph is deleted in its entirety:

                Provided, however, Landlord shall have the option to require
                Tenant to remove any or all such fixtures, additions and/or
                alterations Landlord deems to be of a specific use or nature,
                and to restore the leased premises to good condition, all at
                Tenant's cost and expense.

The following proviso is deleted in its entirety and the following matter is
substituted therefor:

                Provided, however, Landlord shall have the option to require
                Tenant to remove any and all such fixtures, additions and/or
                alterations Landlord reasonably deems to be specific and 
                appropriate only to the business of the Tenant or its
                subtenants hereunder and generally inappropriate to other
                retail business use, and in case such removal is required,
                Tenant shall restore the leased premises to a good condition, 
                all at Tenant's cost and expense.

        B.      With reference to the third unnumbered paragraph of paragraph
14 of the Lease, such paragraph is deleted in its entirety and the following
matter is substituted therefor:

                Upon execution of this Lease, the Tenant shall make reasonable 
                good faith efforts to obtain building approval, from the city   
                of Boulder and from any 
                         
<PAGE>   37
                other governmental authority from which building approval is
                required, for plans and specifications approximating those
                appended hereto, which plans may require a change in location of
                doors and windows and which plans, when final, shall include any
                and all landscaping as may be required by any governing
                authority and which plans shall be approved by Landlord. In the
                event that, after such reasonable good faith efforts, Tenant is
                unable to obtain such approvals within one month from the date
                of commencement of this Lease, Tenant shall then have 5 days
                during which the Tenant may terminate this Lease, and if the
                Tenant does so terminate the Lease, pursuant to paragraph 
                5 hereof, the Landlord shall retain any sums paid herewith as
                security deposit provided, however, that Tenant shall have no
                right of assignment or subletting during such period ending with
                the expiration of the option to terminate this Lease upon
                failure to obtain building approvals. In the event Tenant
                obtains such building approvals within said one-month period, or
                in the event that, having failed to obtain such approvals,
                Tenant does not exercise its option to terminate within said
                5-day period, the Tenant shall have no option to terminate the
                lease pursuant to this paragraph for the duration of the period
                of initial construction of the repairs, alterations,
                improvements or additions initially proposed to be made to the
                lease premises by the Tenant as above referenced. Upon
                completion of such construction, however, (i) Tenant shall then
                have the option to terminate this Lease if the Tenant is
                required by the City of Boulder or governmental authority to
                make repairs, alterations, improvements or additions to the
                leased premises costing in excess of $25,000; and (ii) Tenant
                shall again have the rights of assignment and subletting set
                forth in this Lease. 

        C.      With reference to the first unnumbered paragraph of paragraph
20 of the Lease, the phrase "as reasonably estimated by Landlord" in the third
line thereof is deleted, and the following matter is substituted therefore:

                as certified to by a registered architect reasonably acceptable
                to the Landlord and the Tenant,

so that the first sentence of such first unnumbered paragraph of paragraph 20
shall read as follows:

                In the event that the lease premises are destroyed or so damaged
                by fire or other casualty that, as certified to by a registered
                architect reasonably acceptable to the Landlord and the Tenant,
                repairs to the leased premises in order to render the same
                tenantable once again would require in excess of 120 days from
                the date of destruction or damage if promptly and diligently
                processed, the Landlord shall have the option to terminate this
                Lease, provided that if the Landlord wishes to terminate this
                Lease it gives written notice of termination to Tenant within
                thirty (30) days of the date of such damage or the option to
                terminate shall be void.




                                      -2-
<PAGE>   38
        D.      With reference to the second unnumbered paragraph of
paragraph 23 of the Lease and notwithstanding anything to the contrary
contained therein, in the event of a breach by the Tenant (other than failure
of the Tenant to pay sums of money when due) and such breach would reasonably
require more than 30 days to cure after notice of default, the Tenant shall be
deemed to have cured the breach if the Tenant shall have substantially
commenced to cure such breach within 30 days after receipt of notice of default
and shall diligently thereafter complete the cure of such breach, and further
provided that tenant shall continue to make any and all payments due to
Landlord on a timely basis.

        E.      With reference to paragraph 30 of the Lease, the following
underlined matter is added at the end of such paragraph, so that the last
sentence thereof reads as follows:

                Tenant hereby agrees to execute, if same is required, any and
                all instruments in writing which may be requested by Landlord
                to subordinate Tenant's rights acquired by this Lease to the
                lien of any such mortgage or deed of trust, as aforesaid;
                provided, however, that such subordination agreements contain
                -------------------------------------------------------------
                the non-disturbance agreements contemplated by the provisions
                -------------------------------------------------------------
                of this paragraph.
                ------------------

        F.      With further reference to paragraph 30, the following matter is
added thereto as a second unnumbered paragraph of such paragraph 30:

                The premises are presently encumbered by the lien of a deed of
                trust in favor of Boulder Historical Society, securing an
                initial indebtedness of $225,000.00, dated March 18, 1981,
                recorded March 19, 1981 on Film 1158 as Reception No. 438519 of
                the Boulder County records.  The indebtedness secured bears
                interest at the rate of 11% per annum, and is payable in
                quarterly amortizing payments over a term of 25 years, each in
                the approximate amount of $6,600.00.  Landlord agrees that, in
                the event of any default by Landlord in paying said
                indebtedness which results in commencement of foreclosure
                against the demised premises, and if permitted by law or by the
                holder or beneficiary of said deed of trust, Tenant may pay
                such amount as may be required to cure such default and
                thereafter to maintain payments to such holder so as to avoid
                further defaults, and any amount so paid by Tenant to such
                encumbrancer shall be credited against amounts of rent next due
                from Tenant to Landlord under this Lease.  Tenant shall pay to
                Landlord the amount of excess, if any, of rental due hereunder
                over the amount paid to said encumbrancer.

        G.      With reference to paragraph 39 of this Lease, and
notwithstanding anything to the contrary contained herein, the Landlord hereby
agrees to pay any and all commissions due to Ruth Kinnie and Moore and Company
arising from the negotiation and/or consummation of this Lease.





                                      -3-
<PAGE>   39
                                                   APPENDIX 2
                                        
                               SUBLEASE AGREEMENT

        This Sublease Agreement made and entered into this 7 day of 
August, 1984, by and between Overland Sheepskin Co., a New Mexico 
corporation qualified to do business in Colorado, hereinafter referred
to as Sublessor, and Natural Horizons, Inc., a Colorado corporation,
hereinafter referred to as Sublessee.

                                  WITNESSETH:

        WHEREAS, Sublessor, is the tenant of that certain lease dated
May 16, 1984, between Colorado National Bank, Boulder, Nominee, Landlord 
and Sublessor, Tenant, of the building located at 1655 Broadway, Boulder, 
Colorado, hereinafter referred to as the Base Lease, and which is 
incorporated herein as Exhibit A hereto, and

        WHEREAS, Sublessee desires to lease from Sublessor that part of 1655
Broadway described in the attached Exhibit B, said portion hereinafter called
Subleased Premises, for the purpose of storage and food preparation of
Alfalfa's Market and other grocery stores of Natural Horizons, Inc., and

        WHEREAS, Sublessor desires to sublease the said Subleased Premises to 
Sublessee,

        IT IS THEREFORE AGREED by and between the parties for and in
consideration of the mutual promises and undertakings herein contained 
as follows:

        1.      Sublessor does hereby lease unto Sublessee the Subleased
Premises for a term commencing at 12:00 noon on the date of execution hereof,
until 12:00 noon six years after the commencement date of the Base Lease (the
"Initial Term"), unless sooner terminated or extended as provided herein,
subject to the agreement herein contained.

        2.      In the event Sublessor renews the Base Lease pursuant to
paragraph 3 of the Base Lease, Sublessee shall be given the option to renew
this Sublease for an additional term of six years ("Extended Term") upon the
same conditions as herein set forth, by giving written notice of its intention
to renew not less than 120 days nor more than 180 days prior to the expiration
of the Initial Term.

        3.      Sublessee shall pay rent in advance, on the first day of each
month beginning when all improvements to the Subleased Premises are
substantially complete so that the Subleased Premises are ready for use and
have been approved by governmental authorities, but in no event shall this be
subsequent to September 30, 1984. Rent to be paid in the following amounts:

        a.      A fixed percentage of all rental amounts and additional rents 
or other charges payable by Sublessor to Landlord pursuant to the Base Lease,
including rental adjustments or escalations for both terms if applicable, real
property taxes, insurance premiums, and including common building operating and
upkeep expenses. This fixed percentage will be a percentage of the rental
amounts set forth above and such percentage will be the percentage of the total
area of the Sublessor's leased premises that are herein rented by the Sublessee.
Such fixed percentage will be agreed to by the parties in a written addendum
hereto as soon as the dividing wall separating the Subleased Premises from the
remainder of 1655 Broadway is completed. When the dividing wall is completed,
the parties will determine accurately the percentage of 1655 Broadway being
subleased hereby. In the event the parties cannot agree on such percentage, such
percentage shall be finally and conclusively determined by a 
<PAGE>   40
registered architect or engineer mutually acceptable to Sublessor and
Sublessee.  In the event the Sublessor and Sublessee cannot agree on a single
architect or engineer, each party shall select a registered architect or
engineer and the two architects or engineers so selected shall elect a third
and together the three architects or engineers shall jointly determine such
percentage. 

                b.     An additional monthly charge for rent equal to $2.00
per square foot per year of the Subleased Premises, as determined by the
parties pursuant to the above paragraph, shall be payable monthly in advance so
as to cover Sublessee's share of the cost of initial improvements to 1655
Broadway and the expense of financing such improvements over the Initial
Term.  This additional monthly charge shall run for 72 consecutive months at
which time it shall cease.

                c.      In the event that insurance costs are increased
because of the existence of a food preparation business in the Subleased
Premises or due to the uses of Sublessee in the Subleased Premises, this
insurance increase shall be borne solely by the Sublessee.

        4.      Sublessee shall also pay the costs of utilities incurred in the
Subleased Premises through separate meters with direct billing to Sublessee.

        5.      Sublessee shall have possession of the Subleased Premises
immediately after obtaining any and all required governmental approvals for the
contemplated operations and uses of the Subleased Premises, and, along with its
employees, business invitees, guests, and suppliers, shall have use of the
Subleased Premises at all times during the Initial Term and Estimated Term
hereof.  Sublessee shall use and occupy the Subleased Premises solely and
exclusively for the purposes of storage and food preparation for Alfalfa's
Market and its other grocery stores.  Sublessee shall not use or permit upon
the premises anything unreasonably dangerous to life or limb, deface or injure
the premises, nor create a nuisance on the premises, including unpleasant
odors, and will comply with all governmental, health and policy requirements
respecting the premises as well as the terms and conditions of the Base Lease
which apply to it.

        6.      Sublessee shall install an adequate sprinkler system for the
Subleased Premises in order to satisfy all governmental and insurance 
requirements.

        7.      All rights and remedies of Landlord contained in the Base Lease
(i) are incorporated herein by reference; (ii) shall for the purposes hereof be
deemed rights of the Sublessor against the Sublessee; and (iii) may be used by
Sublessor in the event of a breach of the terms and conditions of the Base
Lease and of the Sublease.  All the obligations of Sublessor to the Landlord in
the Base Lease shall similarly be binding on Sublessee and shall be obligations
of Sublessee to Sublessor, except for (i) the payment of rents and (ii) other
provisions which are specifically covered hereunder.  There is nothing in the
Sublease that shall invalidate the Base Lease or extensions thereof or which
supersedes the terms of the Base Lease or extension thereof. The Sublease shall
indemnify and hold harmless the Sublessor from any losses or damages, whether
direct or consequential, suffered by the Sublessor as a result of any breach of
this Sublease or the Base Lease by the Sublessee.  Such indemnify shall extend
to all losses of Sublessor, including costs of court and reasonable attorney
fees, arising from the enforcement of any rights of the Landlord against the
Sublessor as a result of breach of this Sublease or the Base Lease by the
Sublessee.

        8.      Sublessee shall prepare the Subleased Premises in such a manner
at to avoid unreasonable interference with Sublessor's ability to obtain its
necessary occupancy permits





                                      -2-
<PAGE>   41
in order to open its business August 1, 1984.  Should any action of Sublessee
defer Sublessor's ability to do the same, and notwithstanding anything
contained herein to the contrary, Sublessee's percentage of rent and other
additional rents pursuant to section 3 hereof shall be 100% until Sublessee
complies with whatsoever requirements are necessary to allow Sublessor to
obtain the necessary occupancy permits for its business.

        9.      This Sublease shall have no force or effect unless and until
the Landlord's approval set forth hereinbelow has been executed by the Landlord.

        EXECUTED by the parties hereto on the dates set forth beneath their
respective signatures.


SUBLESSOR:                                    SUBLESSEE:
Overland Sheepskin Co.                        Natural Horizons, Inc.
a New Mexico corporation                      a Colorado corporation


By /s/ JIM TERRY                              By /s/ OFFICER OF NATURAL
   ----------------------                            HORIZONS, INC.
   President                                     ---------------------
                                                 President

Dated: August 7, 1994                         Dated:  Aug 14, 1984

Subject to all the terms and conditions of the Base Lease Agreement between
Colorado National Bank-Boulder, Nominee as Landlord and Overland Sheepskin Co.
as Tenant, including, but not limited to, the assignment of leases and rents,
and without passing on any of the other contents herein, and further subject to
the rules and regulations attached hereto and made a part hereof, we,
therefore, as Landlord and pursuant to paragraphs 16 and 26 of the Base Lease,
hereby consent to the above Sublease and agree to the use of the Subleased
Premises for the purposes included in paragraph 5 of this Sublease including,
but not limited to, food preparation and use of a similar nature.

LANDLORD:

Colorado National Bank,
Boulder Nominee


By /s/ ROBERT POLIS
  --------------------------
   Robert Polis, Appointee

Dated:  8/17/84


                                      -3-
<PAGE>   42
                                BROADWAY COMPLEX
                       PARKING LOT RULES AND REGULATIONS

        1)      There shall be no loading or unloading of any trucks for any
                tenant in any location except directly outside of that tenant's
                leased premises or in areas designated by the landlord.

        2)      There shall be no storage, temporary or permanent, of any
                skids, pallets, boxes, containers, supplies, equipment, or
                inventory in the parking lot, common areas, or anywhere in the
                exterior of the leased premises.

        3)      There shall be no trash receptacles on the exterior of the
                leased premises unless approved in writing by the landlord.

        4)      Trash shall not be permitted to accumulate in greater quantity
                than the approved trash receptacle was meant to accommodate.

        5)      Odors from trash, inventory, or operations of business shall be
                removed immediately and shall be prevented from recurring by the
                tenant causing such odors.
<PAGE>   43
Addendum to Sublease Agreement dated August 7, 1984, between Overland Sheepskin
Company and Natural Horizons Inc.

1.      NOTWITHSTANDING ANYTHING in the sublease agreement, the parties hereby
agree that the area of the building leased to sublessee is 2456 square feet
which comprises 37.8% of the 6500 square foot building referred to in the base
lease. 

2.      The beginning monthly base rent shall be $2150 per month (.378 X
5687.50) and shall be adjusted annually according to the provisions in the base
lease. 

3.      Sublessee agrees to pay for all costs of installation of sublessee's
own electrical service, gas service, sprinkler system, plumbing service, water
service, telephone, security, and all other improvements and installs on the
subleased premises.

4.      Sublessor agrees to provide the space in the following condition only:

        a.      Existing walls and ceiling and floors unfinished and unrepaired

        b.      No plumbing service or fixtures

        c.      Existing door

5.      NOTWITHSTANDING ANYTHING to the contrary in the sublease agreement,
sublessor does not grant sublessee the use of any parking assigned for the
specific use of sublessor in the base lease.

6.      The fixed percentage referred to in paragraph 3a of the sublease
agreement is 37.8%.

7.      The additional monthly rental charge referred to in paragraph 3b shall
be $409 per month. (2456 X 2 / 12 = $409)

                              Dated August 7, 1984


OVERLAND SHEEPSKIN COMPANY                      NATURAL HORIZONS, INC.


/s/  OFFICER OF OVERLAND                        /s/ OFFICER OF NATURAL 
     SHEEPSKIN COMPANY                              HORIZONS, INC.
------------------------------                  -------------------------------
Sublessor                                       Sublessee
<PAGE>   44
                                   EXHIBIT D

                                   SCHEMATIC

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