TCS ENTERPRISES INC, 10QSB, 1995-11-14

TCS ENTERPRISES INC
10QSB, 1995-11-14
LOAN BROKERS

Previous: BURGER KING LTD PARTNERSHIP III, 10-Q, 1995-11-14

Next: STAR TECHNOLOGIES INC, 10-Q, 1995-11-14

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended SEPTEMBER 30, 1995 Commission file number 0-15419

TCS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

CALIFORNIA 95-3826310
(State of Incorporation) (IRS Employer Identification Number)

10525 Vista Sorrento Parkway, Suite 101

SAN DIEGO, CALIFORNIA 92121-2799
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (619) 452-8000

Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
---- ----

As of September 30, 1995, the registrant had outstanding 5,823,025
shares of common stock, no par value.

Transitional small business disclosure format. Yes No X
---- ----

<PAGE>
TCS ENTERPRISES, INC.
1995 FORM 10-QSB QUARTERLY REPORT
Quarter Ended September 30, 1995

INDEX

PART I

Page
----
Item 1. Financial Statements 1

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 20

PART II

Item 6. Exhibits and Reports on Form 8-K 28

(i)
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TCS ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
------------------ -----------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $0 $ 0
Restricted cash 38,000 398,000
Mortgage loans held for sale 2,903,000 146,000
Accounts receivable 310,000 113,000
Current portion of notes receivable
from related parties 248,000 278,000
Other current assets 114,000 195,000
---------- ----------
Total current assets 3,613,000 1,130,000

Property and equipment, net 151,000 229,000
Notes receivable from related parties,
net of current portion 441,000 403,000
Noncurrent net assets of discontinued operations 0 67,000
Other assets, net 87,000 30,000
---------- ----------
$4,292,000 $1,859,000
========== ==========
(Continued)
</TABLE>

<PAGE>

TCS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
------------------ -----------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
Current liabilities:
Cash overdraft $ 21,000 $ 25,000
Warehouse lines payable 2,810,000 143,000
Current portion of long-term debt 13,000 343,000
Short term notes payable 317,000 0
Accounts payable 817,000 1,006,000
Accrued payroll and related taxes 258,000 260,000
Accrued commissions 52,000 54,000
Current net liabilities of discontinued
operations 481,000 383,000
---------- ----------
Total current liabilities 4,769,000 2,214,000

Long-term debt, net of current portion 91,000 33,000
---------- ----------
Total liabilities 4,860,000 2,247,000

Stockholders' equity:
Common stock, no par value, authorized
30,000,000 shares, issued and outstanding
5,823,000 shares at September 30, 1995 and
December 31, 1994 10,317,000 10,214,000
Accumulated deficit (10,439,000) (10,154,000)
Less notes receivable from stockholders (446,000) (448,000)
---------- ----------

Total stockholders' equity (568,000) (388,000)
---------- ----------
$4,292,000 $1,859,000
========== ==========

The accompanying notes are an integral part of the unaudited financial statements.
</TABLE>

<PAGE>

TCS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

THREE MONTHS NINE MONTHS THREE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1994
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Income:
Loan fees $565,000 $1,434,000 $501,000 $2,084,000
Gain on sale of servicing 100,000 202,000 66,000 743,000
Interest 64,000 158,000 60,000 206,000
Management fees 199,000 500,000 150,000 151,000
Earnings (loss) from investments 8,000 11,000 (3,000) (5,000)
Other 4,000 20,000 16,000 2,000
---------------- ----------------- ----------------- ----------------
940,000 2,325,000 790,000 3,181,000
---------------- ----------------- ----------------- ----------------
Expenses:
Salaries, wages and related taxes $336,000 $972,000 $443,000 $1,729,000
Commissions 355,000 919,000 454,000 1,582,000
General and administrative 149,000 434,000 199,000 982,000
Promotion, entertainment and travel 15,000 29,000 33,000 118,000
Occupancy (10,000) 183,000 99,000 316,000
Interest 35,000 67,000 81,000 214,000
---------------- ----------------- ----------------- ----------------
$880,000 $2,604,000 $1,309,000 $4,941,000
---------------- ----------------- ----------------- ----------------

Income (loss) from continuing operations
before taxes and minority interest 60,000 (279,000) (519,000) (1,760,000)
Income taxes 0 6,000 (2,000) 6,000
---------------- ----------------- ----------------- ----------------
Income (loss) from continuing operations
before minority interest 60,000 (285,000) (517,000) (1,766,000)
Minority interest in (income) loss of subsidiary 0 0 (1,000) 38,000
---------------- ----------------- ----------------- ----------------
Income (loss) from continuing operations 60,000 (285,000) (518,000) (1,728,000)
Discontinued operations, net of income tax:
Income (loss) from discontinued operations 0 0 (749,000) (2,228,000)
---------------- ----------------- ----------------- ----------------
Net income (loss) $60,000 ($285,000) ($1,267,000) ($3,956,000)
================ ================= ================= ================

(Continued)

</TABLE>

<PAGE>

TCS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS, CONTINUED
(UNAUDITED)

THREE MONTHS NINE MONTHS THREE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1994
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Income (loss) per common share:
Continuing operations $0.01 ($0.05) ($0.10) ($0.33)
Discontinued operations 0.00 0.00 (0.14) (0.43)
---------------- ----------------- ----------------- ----------------

Net income (loss) $0.01 ($0.05) ($0.24) ($0.76)
================ ================= ================= ================

The accompanying notes are an integral part of the unaudited financial statements.

</TABLE>

<PAGE>

TCS ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
NINE MONTHS
------------------------------------------
ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Income (loss) from continuing operations ($285,000) ($1,728,000)
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:

Depreciation and amortization 69,000 72,000
(Earnings) loss from investments in partnerships (11,000) 5,000
Minority interest in loss of subsidiary 0 (35,000)
Note receivable from related party 0 508,000
Decrease (increase) in:
Mortgage loans held for sale (2,757,000) 5,580,000
Accounts receivable (197,000) 141,000
Other current assets 81,000 90,000
Other assets (46,000) 77,000
Increase (decrease) in:
Accounts payable (189,000) (131,000)
Accrued payroll and related taxes (2,000) (106,000)
Accrued commissions (2,000) (116,000)
--------- ---------

Net cash provided by (used in) continuing operations (3,339,000) 4,357,000

Net cash provided by (used in) discontinued operations 165,000 (2,279,000)
--------- ---------
Net cash provided by (used in) operating activities (3,174,000) 2,078,000
--------- ---------

Cash flows from investing activities:
Purchases of property & equipment 0 (70,000)
Disposal of property and equipment 9,000 0
Issuance of notes receivable from related parties (51,000) (484,000)
Collection of notes receivable from related parties 43,000 620,000
Collection of notes receivable from stockholders 2,000 2,000
--------- ---------
Net cash provided by (used in) investing activities 3,000 68,000
--------- ---------

(Continued)
</TABLE>

<PAGE>

TCS ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows Continued
(Unaudited)

<TABLE>
<CAPTION>
NINE MONTHS
------------------------------------------
ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in warehouse lines payable 2,667,000 (5,440,000)
Proceeds from issuance of line of credit 0 262,000
Repayment of line of credit 0 (262,000)
Proceeds from issuance of long term debt 69,000 30,000
Repayments of long-term debt (341,000) (6,000)
Proceeds from issuance of related party debt 371,000 2,870,000
Repayment of related party debt (54,000) (311,000)
Capital contributions 103,000 175,000
--------- ---------

Net cash provided by (used in) financing activities 2,815,000 (2,682,000)
--------- ---------

Net increase (decrease) in cash and cash equivalents (356,000) (536,000)

Cash and cash equivalents, beginning of period 373,000 1,093,000
--------- ---------

Cash and cash equivalents, end of period $17,000 $557,000
========= =========

Supplementary disclosures of cash flow information:
Cash paid during the period for:
Interest $64,000 $180,000
Income taxes 6,000 9,000

The accompanying notes are an integral part of the unaudited financial statements.

</TABLE>

6
<PAGE>
TCS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS

(1) ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of TCS
Enterprises, Inc. and its wholly-owned and majority-owned subsidiaries (the
"Company"). All significant intercompany balances and transactions have been
eliminated in consolidation.

During 1994, the Company experienced significant operating losses in most
of its subsidiaries. As a result of losses in 1994 and prior years, at
September 30, 1995 the Company has a deficit in stockholders' equity and
negative working capital. The Company experienced severe liquidity problems
caused, in part, by operating losses in its cultured dairy products,
publishing and environmental subsidiaries. Management is currently discussing
plans to alleviate liquidity problems, however, is unable to predict the
outcome of those discussions or determine when the Company will increase its
capital base. As described below, during the fourth quarter of 1994,
management implemented a plan to dispose of the Company's governmental
consulting, environmental, cultured dairy products and publishing businesses.
These actions have reduced expenses and operating losses as well as focused
management's efforts on the Company's mortgage-banking and real estate
management activities.

DISCONTINUED OPERATIONS

During the fourth quarter of 1994, the Company's management decided to
discontinue its governmental consulting operations, and sell its wholly-owned
subsidiary, TCS Governmental Consulting, Inc. ("Governmental"). Effective
November 1, 1994, the Company sold an 80.5% interest in Governmental to
Governmental's president in exchange for a note for $50,000.

During the fourth quarter of 1994, the Company's management decided to
discontinue its environmental consulting operations, and sell its
wholly-owned subsidiary, TCS Environmental, Ltd., a British Virgin Islands
international business company ("Environmental"). Effective October 20, 1994,
the Company sold a 100%

<PAGE>

interest in Environmental to Santa Anita Produce, Inc., an Arizona
corporation ("Santa Anita") in exchange for cancellation of $1,250,000 note
payable to Santa Anita (see Note 3).

During the fourth quarter of 1994, the Company's management decided to
discontinue the operations of its wholly-owned subsidiary TCS Ventura Dairy
Products, Inc. ("Ventura"). On January 30, 1995, the Company sold
substantially all of Ventura's assets and certain liabilities to Ventura's
management for approximately $52,000 cash and notes aggregating approximately
$181,000. Substantially all of the cash and payments on approximately
$130,000 of the notes were used to satisfy obligations to certain of
Ventura's suppliers.

During the fourth quarter of 1994, the Company's management decided to
discontinue its publishing operations, conducted through its wholly-owned
subsidiary, TCS Publishing, Inc. ("Publishing"). On December 30, 1994, the
Company signed a letter of intent with an unrelated publishing company (the
"Buyer") whereby the Buyer will acquire Publishing's rights under certain
contracts and certain of Publishing's assets. As consideration, the Buyer
will complete the publishing of certain of Publishing's uncompleted
contracts. The Company will retain substantially all the assets and
liabilities of Publishing, consisting principally of accounts receivable and
deferred revenue.

The Notes to Unaudited Consolidated Financial Statements exclude
discontinued operations unless stated otherwise.

The consolidated balance sheets are presented as of September 30, 1995
and December 31, 1994. The consolidated statements of operations are
presented for the nine months ended September 30, 1995 and 1994. The
consolidated statements of cash flows are presented for the same periods.

The unaudited consolidated financial statements do not include certain
financial presentations normally required under generally accepted accounting
principles. It

<PAGE>

should be understood that accounting measurement at interim dates inherently
involves greater reliance on estimates than at year end. The results of
operations for the nine months ended September 30, 1995 and 1994 are not
indicative of results that can be expected for the full year.

The consolidated interim financial statements included herein are
unaudited; however, they contain adjustments, consisting of normal recurring
accruals, which, in the opinion of the Company, are necessary to present
fairly the consolidated financial position of the Company at September 30,
1995 and the consolidated results of operations for the nine months ended
September 30, 1995 and 1994 and its consolidated cash flows for the same
period.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MORTGAGE LOANS HELD FOR SALE

Mortgage loans held for sale are stated at the lower of cost or market in
the aggregate. Cost is determined on an individual loan basis and includes
nonrefundable fees and direct costs associated with the origination of loans.
Market is determined by outstanding commitments and prevailing market prices.

PROPERTY AND EQUIPMENT

Property and equipment is carried at cost. Depreciation is provided for
using the straight-line basis with estimated useful life of seven years for
furniture and five years for equipment. Leasehold improvements are amortized
on a straight-line basis over the shorter of their useful lives or the terms
of the lease.

BROKERED LOAN FEES

Loan fees include direct origination fees and brokered loan fees.
Deferred origination fees and expenses are recognized at the time a loan is
sold and servicing released. Brokered loan fees represent fees received by
the Company for "placing" a loan with a lender, whereby no further
obligations exist. The fee is recognized when the borrower and lender sign a
loan commitment and the loan is funded.

<PAGE>

GAIN ON SALE OF SERVICING

Gains on sale of servicing represent
service release premiums on loans originated in-house. The gain on sale of
servicing is recognized as the loan is sold out of the warehouse and no
discount is taken since the fee is received at the same time.

INCOME TAXES

In February 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes". SFAS 109 requires a change from the deferred
method of accounting for income taxes of APB Opinion 11 to the asset and
liability method of accounting for income taxes. Under the asset and
liability method of SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Effective January 1, 1993, the Company adopted SFAS 109. The adoption of SFAS
109 did not have a material effect on the Company's financial position or
results of operations.

Pursuant to the deferred method under APB Opinion 11, which was applied
in 1992 and prior years, deferred income taxes are recognized for income and
expense items that are reported in different years for financial reporting
purposes and income tax purposes using the tax rate applicable in the year of
the calculation. Under the deferred method, deferred taxes are not adjusted
for subsequent changes in tax rates.

EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per common share is computed by dividing net earnings
(loss) by the weighted average number of common shares outstanding and common
stock

<PAGE>

equivalents, if dilutive. Common stock equivalents consist of shares issuable
upon the exercise of stock options and warrants. Fully dilutive earnings per
share for the periods presented is the same as primary earnings per share.
See Exhibit 11.1 for the computation of earnings (loss) per share.

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an initial maturity of six
months or less to be cash and cash equivalents.

RECLASSIFICATIONS

The 1994 financial statements have been reclassified to conform with
1995 presentation.

(3) RELATED PARTY TRANSACTIONS

In March, 1993, the Company assisted with the transfer of real estate
located in Tijuana, B.C., Mexico between Weslow, Ltd., a California Limited
Partnership ("Seller") and SDB Offshore, Ltd., A Bahamian corporation
("Buyer"). The majority owner of the Buyer is Hector Lomeli Villalobos who,
along with immediate family members, controls Santa Anita. Santa Anita became
the majority owner of the Company in 1994. Subsequent to the transaction, a
minority shareholder of the Seller became an employee of the Company and in
September 1993, was appointed to the Company's Board of Directors. This
individual has also maintained an ownership interest in the real estate
through ownership of a minority interest in the Buyer. In consideration for
the Company's role in bringing the parties together, negotiating financing on
behalf of the Buyer, and performing other activities in connection with the
sale, the Company received a fee of $1,350,000 in the form of an unsecured
note from the Buyer. The Buyer paid $350,000 on the note in December, 1993.
The balance of the note was due in six consecutive monthly equal installments
of principal and interest, at 8% per annum, beginning on July 31, 1994. All
unpaid principal and interest was due on December 31,

<PAGE>

1994. At September 30, 1995, the balance past due under the note is $239,000.
Concurrently the Company entered into a management agreement with the Buyer
to provide technical assistance and management services for a term of six
years, renewable annually thereafter by mutual agreement. Under the
agreement, the Company was to supervise the development of the industrial
park, operate, manage, and lease the property, and assist the Buyer in the
conduct of its daily business activities. The Company received a monthly
management fee of $50,000 beginning July 1994 through July 1995 when the
contract was terminated. Upon cancellation, the Company earned a termination
fee of $150,000.

During 1994, the Company borrowed under various note agreements an
aggregate of $2,375,000 from Santa Anita. The notes had interest rates from
10.1 to 10.5 percent and had maturties ranging from November 1995 to July
1996. Such notes, together with accrued interest of approximately $125,000
were forgiven by Santa Anita in connection with the sale of Environmental to
Santa Anita (Note 1) and the purchase of stock by Santa Anita as described
below.

On October 20, 1994, the Company sold 625,000 restricted shares of the
Company's stock to Santa Anita in exchange for cancellation of $1,250,000
owed to Santa Anita under various notes described above. The market value of
the shares on that date was approximately $1,175,000. The share certificates
have not been issued, however, the shares are considered issued and
outstanding. Concurrently, the Company granted warrants to purchase 175,000
shares of common stock.

The Company is a partner in a general partnership in which it has agreed
to subordinate any indebtedness from the partnership to a bank. At September
30, 1995 the balance of the subordinated debt is zero. In connection with
this, the Company has guaranteed $125,000 of the partnership note to the bank.

Notes receivable from related parties totaled $689,000 at September 30,
1995. Notes receivable includes a note with a principal balance of $239,000
as described above.

12
<PAGE>

Another note, with a principal balance of $200,000, bears interest at the
rate of 8.25% per annum, principal and all accrued interest is payable in
full in April 1999. The note is secured by 100,000 shares of the Company's
common stock. Another note, with a principal balance of $30,000, bears
interest at 12% per annum and is payable in monthly installments of principal
and interest of $504 commencing April 1990. The note is secured by a second
deed of trust and has been prepaid through April 1996. The note issued in
connection with the sale of Governmental (Note 1) has a principal balance of
$50,000 bears interest at prime and is payable in quarterly interest only
payments commencing January 1996. Principal and any unpaid interest is due in
November 1999. The notes issued in connection with the sale of Ventura (Note
1) have a principal balance of $52,000 and bear interest at 8.5% per annum.
Interest only is payable monthly beginning March 1, 1995 through February 1,
1996. Beginning March 1, 1996 and continuing until March 1, 1999 interest and
principal are payable monthly. The remaining notes, with a combined balance
of $118,000, bear interest at 8.25% and are due in full in September 1998.

In prior years, four executive officers exercised options for 481,355
shares of the Company's common stock. Notes receivable totaling $479,000 were
issued by these officers as payment. The notes bear interest at 8.25%
interest payable annually with remaining principal of $436,000 due on
September 20, 1998 and $10,000 due November 1, 1998. The notes are secured by
approximately 433,000 shares of the Company's common stock and are shown as a
reduction of stockholders' equity in the accompanying consolidated balance
sheets. At September 30, 1995 and December 31, 1994, the outstanding
principal amount of these notes is $446,000 and $448,000 respectively.

13
<PAGE>

(4) PROPERTY AND EQUIPMENT

Property and equipment at September 30, 1995 and December 31, 1994
is comprised of the following:

SEPT. 30, DEC. 31,
1995 1994
--------- ----------
Furniture and fixtures $298,000 $330,000
Equipment 888,000 906,000
Leasehold improvements 369,000 369,000
--------- ---------
1,555,000 1,605,000
Less accumulated depreciation
and amortization 1,404,000 1,376,000
--------- ---------
$151,000 $229,000
========= =========

(5) WAREHOUSE LINES PAYABLE

The Company finances its mortgage loans held for sale through warehouse
lines of credit. Mortgage loans held for sale secure such lines of credit. It
is expected that in the normal course of business, warehouse lines of credit
that expire will be renewed or replaced.

At September 30, 1995 and December 31, 1994, the Company had a warehouse
line of credit as follows:

<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
1995 1994
--------- ---------
<S> <C> <C>
Warehouse line of credit of $6,700,000
at December 31, 1994. Interest at prime
plus .5% original expiration of March 15,
1994, with extensions available at the sole
discretion of the lender, secured by a first
priority interest in collateral and a
compensating balance requirement. (The line
was extended by the lender in March 1994
and is now subject to an immediate notice
of cancellation by the lender. On February 1,
1995 the credit limit was decreased to $2,000,000
and the lender has allowed temporary increases.) 2,810,000 143,000
---------- --------
$2,810,000 $143,000
========== ========

</TABLE>

<PAGE>

(6) LONG-TERM DEBT

Long-term debt at September 30, 1995 and December 31, 1994, is
summarized as follows:

<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
1995 1994
---------- ----------
<S> <C> <C>
$331,000 note payable, secured by various
assets, and a $197,000 compensating
balance. Interest payable monthly at 6%,
due April 8, 1995. $ 0 $331,000
Other notes payable 104,000 45,000
-------- --------
104,000 376,000
Less: current portion (13,000) (343,000)
-------- --------
Long-term debt, net of current portion $91,000 $33,000
======== =======

</TABLE>

(7) COMMITMENTS AND CONTINGENCIES

The Company leases all of its office space under operating
leases. At September 30, 1995, the minimum rental payments due under the
Company's leases are as follows:

1995 $26,000
1996 12,000
-------
Total minimum lease obligations $38,000
=======

Minimum lease payments do not include contingent rental payable under
operating leases which are based on increases in certain cost-of-living
indices. Total rental expense under all operating leases, including
discontinued operations, for the nine months ended September 30, 1995 and
1994 was $109,000 and $440,000, respectively.

Because of the nature of their activities, the Company and its
subsidiaries are subject to pending and threatened legal actions which
arise out of the normal course of business. In the opinion of
management, the disposition of all such matters will not have a material
adverse effect on the consolidated financial statements.

The Company is a party to a line of credit agreement whereby it may
have to provide up to $25,000 in short-term advances to an investee company.
The Company has also guaranteed $125,000 of the investee company's bank debt.

15
<PAGE>

(8) COMPENSATING BALANCE ARRANGEMENTS

The Company is required to maintain compensating balances for its
warehouse line and for certain debt. At September 30, 1995 and December 31,
1994, cash of $38,000 and $67,000 respectively, was on deposit in a special
bank account to meet the warehouse line requirements and at December 31, 1994
$331,000 of the Company's cash was restricted to meet certain other debt
requirements. In January 1995, the restricted cash of $331,000 was used to
retire the maturing debt.

(9) EMPLOYEE BENEFIT PLANS

On October 6, 1983, the directors and shareholders of the Company adopted
the Company's 1983 employee stock option plan, the purpose of which was to
advance the interests of the Company by providing officers, directors, and
key employees an incentive to serve and continue service with the Company.
This plan provided for the grant of options to purchase up to 3,000,000
shares of the Company's common stock. On August 4, 1993, the directors
approved an amendment to the 1983 plan accelerating the vesting of any
options granted on or after August 4, 1993 in the event of a change in
control of the Company. The 1983 plan expired in 1993 and no further options
may be granted under this plan.

On December 15, 1986, the directors of the Company adopted the Company's
1986 employee non-qualified stock option plan which provides for the grant of
options to purchase up to 230,000 shares of the Company's common stock. On
May 25, 1994, the shareholders approved certain amendments to the 1986 plan
in order to: (i) increase the authorized number of shares issuable under the
Nonqualified Plan from 230,000 to 400,000 and (ii) create a sub-plan to
permit non-employee directors to participate in the Nonqualified Plan
under a formula award. The sub-plan calls for the annual grant of eight
thousand (8,000) nonqualified Options to each non-employee board member on
the date of the first Board meeting after the annual meeting of the
Shareholders. Such Options vest at a rate of 500 shares for each board or
committee meeting that the non-

16
<PAGE>

employee board member attends. The strike price of the Option is one hundred
ten percent (110%) of the closing market price of the Company's stock,
rounded up to the nearest 1/16 percent, on the first meeting date of the
Board of Directors subsequent to the non-employee board director's election
or appointment to the Board. For those non-employee directors who are members
of the Board of Directors on August 4, 1993, the price of the Option is one
hundred ten percent (110%) of the closing price of the Company's common
stock, rounded up to the nearest 1/16 percent, on August 4, 1993.

On June 9, 1993, the directors and shareholders of the Company adopted
the Company's 1993 employee stock option plan, the purpose of which is to
advance the interests of the Company by providing officers, directors and
key management employees with an incentive to serve and to continue service
with the Company. Under the 1993 plan, up to 3,000,000 shares of the
Company's common stock may be issued upon exercise of any granted incentive
stock options, nonqualified stock options, or stock appreciation rights.

Terms and conditions of the plans (including price, exercise date, and
number of shares) are determined by a committee of the Board of Directors
which administers the plans. For options granted, the exercise price
specified by the committee generally must be 100 percent of the fair market
value of the Company's common stock as of the date of grant. In case of
termination of employment, grants not yet exercisable are subject to
forfeiture, and exercisable options are generally forfeited six months after
the date of termination.

<PAGE>

At September 30, 1995, the following options to acquire common stock were
outstanding:

<TABLE>
<CAPTION>
TOTAL
PLAN OPTIONS OPTIONS EXERCISE
YEAR GRANTED EXERCISABLE PRICE
---- ------- ----------- --------
<S> <C> <C> <C>
1983 260,000 260,000 1.859
1983 100,000 100,000 5.000
1986 16,000 2,500 1.650
1986 64,000 32,500 1.860
1986 16,000 3,500 3.300
1986 8,000 2,000 2.070
1993 20,000 20,000 2.750
------- -------
484,000 420,500
======= =======
</TABLE>

Options vest at different times for different employees over a period from
the date of grant up to ten years subsequent. Options generally expire ten
years from the date of grant.

The Company has adopted a Stock Bonus and 401 (k) Retirement Plan, which
is organized under Section 401(k) of the Internal Revenue Code, allowing
employees who have completed one year of service and have reached age 21 to
participate. Eligible employees are allowed to contribute up to 15 percent of
their compensation on a pre-tax basis subject to the maximum allowed by the
Internal Revenue Code. Under certain conditions, the Company will make a
matching contribution of 50% of the first six percent contributed by the
employee. A participant's right to Company contributions vests over a five
or seven year period, based on the participant's date of service.

The Company has issued warrants to purchase shares of common stock to
former employees of the Company. Management has determined that the value of
these warrants is not material. Accordingly, no value has been attributed to
the warrants in the accompanying consolidated financial statements. At
September 30, 1995, the following warrants were outstanding:

18
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF EXERCISE EXPIRATION
SHARES PRICE DATE
--------- -------- ------------------
<S> <C> <C>
24,000 $3.50 June 15, 1996
700,000 $5.00 August 17, 1996
100,000 $2.00 October 26, 1996
100,000 $2.25 February 25, 1997
200,000 $6.00 February 25, 1997
200,000 $8.00 February 25, 1997
175,000 $3.00 October 20, 1999
65,000 $1.875 September 28, 2003
</TABLE>

(10) INCOME TAXES

The Company adopted FASB Statement No. 109, Accounting for Income Taxes,
as of January 1, 1993. The adoption of FASB 109 did not have a material
effect on the Company's financial position or results of operations. A
valuation allowance of $3,297,000 has been recognized to offset the deferred
tax assets as realization of such assets is uncertain.

At December 31, 1994 the Company had available federal net operating loss
carryforwards and investment tax credits of $4,821,000 and $33,000,
respectively. The net operating loss carryforwards are subject to certain
annual limitations due to the changes in majority ownership of the Company.
Following are the expiration dates of the federal net operating loss and
investment tax credit carryforwards:

<TABLE>
<CAPTION>
NET OPERATING INVESTMENT TAX
LOSS CREDIT
CARRYFORWARDS CARRYFORWARDS
------------- --------------
<S> <C> <C>
2000 $0 $3,000
2001 0 23,000
2002 0 7,000
2003 0 0
2004 0 0
2005 373,000 0
2006 2,158,000 0
2007 185,000 0
2008 139,000 0
2009 1,966,000 0
--------- ------
4,821,000 33,000
========= ======
</TABLE>

19
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1995, COMPARED
TO NINE MONTHS ENDED SEPTEMBER 30, 1994

RESULTS OF OPERATION

The Company is engaged, through its wholly-owned subsidiaries, in real
estate related financial services. The Company believes that it is positioned
for future growth and profitability and has aggressively worked to form the
new profile and business plan. As discussed later, the Company has entered
into an agreement which will result in a change in ownership and anticipates
it will also bring new business opportunities and capital or financing
support. Prior to 1995, the Company was involved in a varied base of
operations and in 1994 committed to turning the Company into a vertically
integrated entity focusing on real estate and related industries.

During the fourth quarter of 1994, the Company elected to dissolve or
close several lines of business. In October, the Board of Directors
approved the sale of TCS Environmental, Ltd. to its majority shareholder,
Santa Anita Produce, Inc. The Company was unable to sustain TCS
Environmental to the point that it would provide profits and cash flow to the
entity. The nature of the waste-water treatment business is such that it
requires intensive start-up capital and the Company was not in a position to
provide it. The sale also reduced the debt of the Company as the
consideration for the sale was relief of debt.

In November, the Board approved the sale of 80.5% of TCS Governmental
Consulting, Inc. Once again it was decided that this business did not fit the
profile of a real estate related, financial services company. The stock was
sold to Joel M. Strobl who had been the President of that subsidiary since
its inception in 1985.

In December, management entered into negotiations to sell its dairy
products company, TCS Ventura Dairy Products, Inc. This subsidiary also
required substantial

<PAGE>

capital and did not fit the new business profile. The sale of
substantially all of the assets of TCS Ventura was completed in January 1995.

Also in December, management entered into negotiations to sell the assets
of TCS Publishing, Inc. To date, the sale has not closed, although the buyer
has completed substantially all of their responsibilities under the contract
and management expects to sign final documentation shortly.

The financial statements for 1994 have been revised to conform with the
1995 presentation. The activity from TCS Governmental Consulting, Inc., TCS
Environmental, Ltd., TCS Ventura Dairy Products, Inc. and TCS Publishing,
Inc. is presented under a single line as "discontinued operations". The
following discussion relates to continuing operations only.

Total revenues decreased $856,000 or 43.8 percent for the nine months
ended September 30, 1995 as compared to 1994. Total expenses decreased
$2,337,000 or 47.3 percent for same period. The decrease in revenues was
primarily due to the decline in mortgage activity for single family
residential loans throughout the country and especially in Southern
California. With the increase in interest rates in early 1994, the activity
previously generated in the refinance market slowed considerably. The
decrease in expenses is also related to the decreased mortgage activity.
Related to the drop in loan fees, commissions paid to loan agents decreased.
In addition, the Company reduced its workforce throughout the year and
discretionary costs were reduced or eliminated.

Loan fees decreased $650,000 or 31.2% for the nine months ended September
30, 1995 over 1994 and gains on sales of servicing decreased $541,000 or 72.8
percent for the same period. Gains on sale of servicing represent release
premiums on loans originated in-house. The gain is recognized when the
funded loan is sold out of the warehouse. The decrease in this area is due
to the decreased activity by TCS Mortgage of its mortgage banking activities,
(i.e. funding fewer mortgage loans in-house). Related to

<PAGE>

this drop in loan activity, commission expense decreased $663,000 or 41.9%
for the period 1995 over 1994.

TCS Mortgage, Inc. receives prorated interest on loans funded in-house, to
offset interest charges on its warehouse lines. Related to the decreased
mortgage activity, interest income decreased $48,000 or 23.3% during the nine
months ended September 30, 1995 over 1994. Similarly, interest expense
decreased $147,000 or 68.7% for the same period.

Management fees represent fees earned by TCS Real Estate Services, Inc.
for supervising the development of an industrial park as well as managing and
leasing the property. TCS Real Estate received $50,000 a month as
management fees beginning in July 1994 until the contract was canceled in
July 1995. Upon cancellation, the Company earned a fee of $150,000.

Earnings from investments reflect the Company's share of Wateridge
Insurance Services which is accounted for under the equity method. Earnings
from investments increased $16,000 or 320.0% for the period 1995 over 1994.

Salaries, wages and related taxes decreased $757,000 or 43.8%, general and
administrative expenses decreased $548,000 or 55.8 percent, and promotion,
entertainment and travel decreased $89,000 or 75.4 percent for the nine
months ended September 30, 1995 as compared to the nine months ended
September 30, 1994. These decreases are attributable to the benefit of
several cost-cutting measures which were previously identified and
implemented by the Company, primarily, the review of critical personnel and
discretionary expenses necessary to support current operations. In addition,
occupancy expenses decreased $133,000 or 42.1% for the same period as the
Company successfully defended a lawsuit from its landlord and negotiated more
favorable rental terms.

22
<PAGE>

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

The Company and its subsidiaries continue to have restricted liquidity.
Working capital decreased $72,000 to a negative $1,156,000 at September 30,
1995 compared to a negative $1,084,000 at December 31, 1994. Although
negative, working capital did improve during the third quarter. The use of
working capital was substantially due to operating activities.

The Company identified several changes which were implemented in the
fourth quarter of 1994 which have alleviated the use of working capital by
operations. During 1994, the Company had outstanding approximately $2,500,000
in short term loans from related parties. Management negotiated for an
extinguishment of these debts as more particularly described below. The
Company also identified additional assets which were sold to streamline
operations and generate working capital.

The Company expected to favorably impact its working capital by
collecting the balance of a note receivable from a related party, Santa Anita
Produce, Inc., during the fourth quarter of 1994. The balance outstanding,
plus additional amounts due, of approximately $400,000 in principal and
accrued interest, was expected to be collected by the end of 1994 but,
because of the severe economic problems in Mexico in December 1994, was not
received. The balance due under the note was assumed by the Painter Group
Corporation, an unrelated third party, in the third quarter. These new
developments are more fully discussed below.

The Company is a partner in one general partnership to which it may have
to provide up to $25,000 in short-term advances in accordance with a line of
credit agreement. The Company has also guaranteed $125,000 of a partnership
note to a bank.

The Company has adopted a Stock Bonus and 401(k) Retirement Plan. For
the plan year ending December 31, 1994, the Company made a matching
contribution of 50 percent of the first six percent contributed by the
employee. The Company's contribution

<PAGE>

for the year ended December 31, 1994 was $31,000. The Company has not decided
if it will make a matching contribution in 1995.

During the fourth quarter of 1994, the Company completed several changes
which reduced the use of working capital.

On November 1, 1994, the Company sold 80.5% of the common stock of TCS
Governmental Consulting, Inc. The shares were sold to the individual who was
the president of the subsidiary since its inception in 1985. The subsidiary
experienced losses over the last several years due to the general economic
downturn in Southern California. It is the belief of all involved parties
that the operation may be able to streamline operations and reduce expenses.
The stock was sold at book value in exchange for a long-term note with
quarterly interest payments at prime due beginning January 1, 1996. The
principal and any accrued interest are due in full November 1, 1999. The note
is secured by a pledge of the shares in TCS Governmental Consulting, Inc.
sold by the Company to Joel M. Strobl.

Also effective October 31, 1994, the Company sold TCS Environmental,
Ltd. in its entirety to a related party, Santa Anita Produce, in lieu of
debt. In a three part transaction the following agreements were completed:
(i) Santa Anita purchased TCS Environmental for relief of $1,250,000 of debt,
(ii) Santa Anita purchased 625,000 shares of the Company's common stock for
$2.00 per share in exchange for relief of the remaining $1,250,000 of related
party debt, and (iii) the Company granted 175,000 common stock warrants with
a five year term at $3 per share to Santa Anita.

In the fourth quarter of 1994, the Company entered into negotiations to
sell its dairy products operation. It ultimately sold the majority of the
assets to Pacific Dairy Products, Inc. ("PDP") on January 30, 1995. Under the
terms of the sale, PDP paid cash for the year-end inventory of $51,890 and
executed notes for the accounts receivable and the fixed assets. The accounts
receivable note had a stated value of $113,874, but was revised per the
agreement for receivables collected by PDP through June 30, 1995. The

<PAGE>

revised balance of the note is $45,315. The stated value of the fixed assets
note was $33,750. This note also was revised and partially paid into escrow
to satisfy creditors. The balance of the note due the Company is $6,174. Both
notes bear interest at 8 1/2% per annum with interest only payments for the
first year. Beginning March 1, 1996 and continuing until March 1, 1999, the
notes fully amortize with interest and principal due monthly.

In December 1994, management entered into negotiations to sell the
assets of TCS Publishing, Inc. The agreement calls for the buyer to pay all
costs and expenses necessary to print, produce and deliver approximately 14
publications of TCS Publishing, Inc., and to remit, in the future, a royalty
payment based on negotiated sales goals. To date, the sale has not yet
closed, although the buyer has completed substantially all of their
responsibilities under the contract and management expects to sign final
documentation shortly. Once the transaction is finalized, the Company will be
able to recognize deferred revenue associated with the publications of
approximately $350,000.

In July 1995, the Board of Directors of the Company adopted resolutions,
subject to shareholder approval and final documentation, to: (i) effect a
reverse stock split on a one for two basis of all outstanding shares, options
and warrants, and (ii) issue six million eighty-nine thousand five hundred
post-split shares to the Painter Group Corporation, a Delaware corporation,
("Painter Group") and one hundred thousand shares of preferred stock in
exchange for 100% of the outstanding stock of USA Golf Corporation, a Nevada
Corporation ("USA Golf"). The balance of the preferred shares are to be
canceled, thereby leaving 100,000 shares of preferred stock authorized,
issued and outstanding. After this transaction the Painter Group will hold
approximately 70% of the outstanding common shares of the Company.

As additional consideration for the issuance of the Company's common and
preferred shares, the Painter Group has agreed to assume and pay certain
indebtedness owing to the Company from SDB Offshore Ltd. and Santa Anita
Produce, Inc. As

<PAGE>

consideration for the assumption of the debt, Santa Anita and Hector Lomeli,
an owner of Santa Anita and SDB Offshore, granted irrevocable proxies for
their combined 4,259,254 common shares to Helen Gibbel, President of the
Painter Group, for purposes of voting on the above described stock split and
share issuance.

The final terms of the agreement between the Company and the Painter
Group will be determined shortly and voted upon at the annual shareholder
meeting which the Company expects to hold in mid-January. This transaction
will result in a change of control of the Company and, upon completion, the
name of the Company will be changed to USA Golf Corporation. The Company will
continue to provide real estate related financial services with the primary
focus on golf course properties.

During the third quarter, the Painter Group loaned the Company $243,000
in unsecured, short term loans. In addition, the Painter Group signed a note
to TCS Mortgage, Inc. in the amount of $555,000. This note was used to
temporarily satisfy the minimum capital requirement for the Federal Home Loan
Mortgage Corporation ("FHLMC"). It is expected that the note will be replaced
with acceptable assets prior to December 1, 1995.

In July 1995, the Company also consented to the removal of its common
stock from the American Stock Exchange (AMEX). This action became necessary
because the Company no longer fully satisfied all the financial and market
value guidelines of the AMEX for continued listing. Management intends to
develop a market for its common stock with the NASDAQ over-the-counter market.

In an effort to assist the Company in meeting its current liquidity
demands, an officer and director of the Company has made several short term
loans. The loans are unsecured and carry interest rates of 11% and 12% per
annum. The balance due by the Company at September 30, 1995 is $74,000 plus
accrued interest.

The Company has reported improved results in each of the last three
quarters and hopes to continue to report favorable results in the fourth
quarter. Management expects

<PAGE>

that the improvement will be due primarily to the operations of its mortgage
operation. Long term interest rates continue to be low and the Company has
increased loan volume. Loans in process are up significantly over last year
and there is less competition in the industry. This positive trend, combined
with savings from the discontinued operations and the results of the
transaction with the Painter Group Corporation, lead to management's
expectation of better results.

Because of the nature of their activities, the Company and its
subsidiaries are subject to pending and threatened legal actions which arise
out of the normal course of business. In the opinion of management, the
disposition of all such matters will not have a material adverse effect on
the consolidated financial statements.

The Company does not know of any other demands, commitments, events or
uncertainties, that will result in decreased liquidity, except for the future
minimum lease payments and the repayment of debt as disclosed in footnote (7)
and (6), respectively, of the Consolidated Financial Statements.

The Company has no present significant commitments for capital
expenditures. Cash flows from operations may not be sufficient to fund
current expenses, although management believes that the third quarter change
in ownership, discussed above, will alleviate the immediate cash deficit and
ultimately restore net worth. However, it is not possible to predict that the
Company will have positive cash flow or net earnings in future periods.

<PAGE>

PART II OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibits filed as a part of this report are listed below.

EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Promissory Note dated June 16, 1995 between registrant
and Rick W. Jarrett II

10.2 Promissory Note dated June 22, 1995 between
registrant and Rick W. Jarrett II

10.3 Agreement dated July 14, 1995 between registrant, TCS
Publishing, Inc. Protocol Communications, Inc. and
Robert E. Jones

10.4 Promissory Note dated July 21, 1995 between registrant
and Rick W. Jarrett II

10.5 Agreement dated July 21, 1995 between registrant and
Painter Group Corporation

10.6 Promissory Note dated July 28, 1995 between registrant
and Painter Group Corporation

10.7 Promissory Note dated August 3, 1995 between registrant
and Painter Group Corporation

10.8 Promissory Note dated August 3, 1995 between TCS
Mortgage, Inc. and Painter Group Corporation

10.9 Promissory Note dated August 4,1995 between registrant
and Painter Group Corporation

10.10 Promissory Note dated August 11, 1995 between
registrant and Painter Group Corporation

10.11 Promissory Note dated August 15,1995 between
registrant and Rick W. Jarrett II

10.12 Executive Office Suite Sublease dated August 15, 1995
between TCS Mortgage, Inc. and Shannon Communities
of Nevada, Inc.

<PAGE>

10.13 Promissory Note dated August 22, 1995 between
registrant and Painter Group Corporation

10.14 Promissory Note dated August 30, 1995 between
registrant and Painter Group Corporation

10.15 Promissory Note dated August 30, 1995 between
registrant and Painter Group Corporation

10.16 Promissory Note dated September 1, 1995 between
registrant and Rick W. Jarrett II

10.17 Lease dated September 15, 1995 between TCS Mortgage,
Inc. and John E. Colyer and Suzanne J. Colyer,
Co-Trustees of the Colyer Revocable Living Trust
dated July 5, 1978.

10.18 Promissory Note dated September 15, 1995 between
registrant and Painter Group Corporation

10.19 Promissory Note dated September 21, 1995 between
registrant and Painter Group Corporation

10.20 Promissory Note dated September 28, 1995 between
registrant and Painter Group Corporation

10.21 Promissory Note dated September 29, 1995 between
registrant and Painter Group Corporation

(b) Reports on Form 8-K

On August 3, 1995, a report on Form 8-K was filed to report a change in
control of the registrant.

29
<PAGE>
SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

TCS ENTERPRISES, INC.
(Registrant)

September 10, 1995 /s/ Alan Painter
_______________________________ _______________________________
Date Alan Painter
Chairman of the Board
Chief Executive Officer

September 10, 1995 /s/ Cheryl B. Dodds
_______________________________ _______________________________
Date Cheryl B. Dodds
Chief Financial Officer

<PAGE>

EXHIBIT 11.1

TCS ENTERPRISES, INC. AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS (LOSS) PER SHARE

<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS THREE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1994
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
PRIMARY:

Average shares outstanding 5,823,000 5,823,000 5,198,000 5,198,000

Dilutive common stock options
based on the treasury stock method -- -- -- --

Dilutive common stock warrants
based on the treasury stock method -- -- -- --
------------------ ------------------ ------------------ ------------------

5,823,000 5,823,000 5,198,000 5,198,000
================== ================== ================== ==================

Net income (loss) $60,000 ($285,000) ($1,267,000) ($3,956,000)
================== ================== ================== ==================

Per share income (loss) $0.01 ($0.05) ($0.24) ($0.76)
================== ================== ================== ==================

</TABLE>

<PAGE>
EXHIBIT 10.1

PROMISSORY NOTE

$20,000.00 June 16, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Rick W. Jarrett,
II ("Jarrett"), at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Twenty Thousand Dollars ($20,000.00) with interest from the above date at the
rate of ten percent per annum. Interest shall be calculated on the basis of
a three hundred sixty (360) day year and on the actual number of days that
such principal was outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The undersigned hereby waives presentment, protest, notice of protest,
demand for payment, notice of dishonor and any and all other notices and
demands in connection with the delivery, acceptance, performance, default or
enforcement of this Note. No delay by the holder in exercising any power or
right hereunder shall operate as a waiver of any power or right.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy, proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

The foregoing option to accelerate the indebtedness evidenced by this
Note may be exercised by Jarrett at any time after the occurrence of any of
the events of default. The failure to exercise the foregoing option on the
occurrence of one or more of such events of default shall not prevent the
exercise upon the reoccurrence of such events of default or upon the
occurrence of any other event of default.

The undersigned agrees to pay all out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses) incurred by Jarrett hereunder
in connection with enforcing the obligations of the undersigned hereunder.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

6-16-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date TCS Enterprises, Inc.

<PAGE>
EXHIBIT 10.2

PROMISSORY NOTE

$13,200.00 June 22, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Rick W. Jarrett,
II ("Jarrett"), at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Thirteen Thousand Two Hundred Dollars ($13,200.00) with interest from the
above date at the rate of eleven percent per annum. Interest shall be
calculated on the basis of a three hundred sixty (360) day year and on
the actual number of days that such principal was outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

6-22-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date TCS Enterprises, Inc.

<PAGE>
Exhibit 10.3

AGREEMENT

This Agreement is made between Protocol Communications, Inc., a California
corporation ("Protocol") and TCS Enterprises, Inc., a California corporation,
and TCS Publishing, Inc., a California corporation (collectively, "TCS").

TCS and Protocol have agreed to settle all claims between them arising out of
the obligations owed to Protocol alleged in the Complaint for Breach of
Settlement Agreement, Etc., filed May 26, 1995, San Diego Superior Case No.
689163 on the following terms:

1. TCS agrees to produce and deliver the current issue of the
Bank Registers at its own expense on or before August 4, 1995.

2. TCS agrees to produce and deliver the current issue of the
Savings & Loan Register at its own expense on or before August 4, 1995.

3. On or before August 4, 1995, TCS agrees to deliver to Protocol all
files, documents, books and records relating to the Bank Register and the
Savings and Loan Register, including, but not limited to, the computer
hardware and software used to run the two Registers, the printer used to
print the two Registers, the library of books on file relating to the two
Registers, and all related records, documents, computer data and software.

4. Protocol shall take over production of the Bank Register and Savings &
Loan Register on August 4, 1995. As of that date, TCS assigns all right,
title and interest in the Bank Register and the Savings & Loan Register to
Protocol, including the right to receive payments related to the two
Registers.

<PAGE>

Agreement
Protocol/TCS
Page 2

5. In addition, TCS agrees to immediately transfer and assign to Protocol
all payments received for the current and future issues of the Savings & Loan
Register or the Bank Register until August 4, 1995. Thereafter, all payments
received for any issue, past or present, will become the property of Protocol
and will be forwarded to Protocol upon receipt.

6. TCS agrees to assist Protocol in the process of transferring the
toll-free telephone number used by the Bank Register subscribers
(800-237-2837) from TCS's name to that of Protocol.

7. TCS agrees to immediately transfer and assign to Protocol all rights,
title and interest in the personal property and assets listed on Attachment
"A". The parties have agreed to the value of the property. The value of the
property received by Protocol in excess of $5,000 will be discounted by fifty
percent. At such time as Protocol is in receipt of all items listed on
Attachment "A", Protocol will issue a check to TCS in the amount equal to
fifty percent of the agreed upon cost of the property exceeding $5000.

8. For a period of 120 days from the date of this Agreement, TCS agrees to
provide technical advice, information and assistance to Protocol as needed
by Protocol to assist in transitioning publication of the Bank and Savings &
Loan Registers from TCS. This assistance is subject to the technical ability
and employment of qualified personnel by TCS at the time the assistance is
requested.

9. TCS agrees that TCS will not compete against the Bank Registers and
Savings & Loan Registers nor assist other parties from competing against
Protocol in this area.

<PAGE>

Agreement
Protocol/TCS
Page 3

10. TCS agrees to release any restrictions on the transfer of stock by
Robert E. Jones, and in return, Robert E. Jones agrees he will not sell more
than 500 shares of stock per week through open market transactions. There
is no restriction on sales through private placement or other non-open market
transactions.

11. TCS agrees to deliver to Protocol the publishing software created by
Protocol and utilized by TCS Publishing since 1990, including the updated
tracking version. TCS agrees to install this software in the 486 computer
listed on Attachment "A". TCS further agrees to represent and warrant that
all software that was installed in the 486 computer and the Mac Quadra
computer at the time TCS and Protocol agreed on the price for each is still
and will remain on said computers until delivered to Protocol.

12. Jim Kylstad will make best efforts to assist Protocol in assuming the
publishing agreements set forth in the January 1995 Settlement Agreement,
specifically the AIA and the IIA Agreements.

PROTOCOL COMMUNICATIONS, INC.

/s/ Robert E. Jones Date: July 14, 1995
- ------------------------------ --------------------------
Robert E. Jones, President

/s/ Robert E. Jones Date: July 14, 1995
- ------------------------------ --------------------------
Robert E. Jones

TCS ENTERPRISES, INC.

/s/ Cheryl B. Dodds Date: 7-14-95
- ------------------------------ --------------------------
Cheryl B. Dodds

TCS PUBLISHING, INC.

/s/ Cheryl B. Dodds Date: 7-14-95
- ------------------------------ --------------------------
Cheryl B. Dodds

<PAGE>

ADDENDUM TO AGREETMENT
Between Protocol Communications, Inc., TCS Enterprises, Inc.
and TCS Publishing, Inc.
Dated July 14,1995

This Agreement becomes effective immediately upon the dissolution of
Protocal's case number 689163 filed on May 26, 1995. Further, TCS and
Protocol agree to mutually release each other from any other claims.

PROTOCOL COMMUNICATIONS, INC.

/s/ Robert E. Jones Date: July 14, 1995
- --------------------------------- ------------------------
Robert E. Jones, President

/s/ Robert E. Jones Date: July 14, 1995
- --------------------------------- ------------------------
Robert E. Jones

TCS ENTERPRISES, INC.

/s/ Cheryl B. Dodds Date: 7-14-95
- ------------------------------ --------------------------
Cheryl B. Dodds

TCS PUBLISHING, INC.

/s/ Cheryl B. Dodds Date: 7-14-95
- ------------------------------ --------------------------
Cheryl B. Dodds

<PAGE>

ATTACHMENT 'A'

ITEM DESCRIPTION

1. 486 COMPAQ w/monitor & installed software.

2. Mac Quadra w/monitor & installed software.

3. HP III SI Printer

4. Fax machine

5. Copier, Sharp 9500

6. Executive Desk

7. Executive Credenza

8. Leather Side Chair

9. Leather Side Chair

10. Secretarial Chair

11. Secretarial Chair

12. Secretarial Chair

13. Secretarial Chair

14. Two-Drawer Legal Size File Cabinet (2)

15. Four-Drawer Letter Size File Cabinet with locks (3)

Agreed upon value is $5,510

<PAGE>
EXHIBIT 10.4

PROMISSORY NOTE

$21,131.29 July 21, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Rick W. Jarrett,
II ("Jarrett"), at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Twenty One Thousand One Hundred Thirty One Dollars and twenty-nine cents
($21,131.29) with interest from the above date at the rate of eleven percent
per annum. Interest shall be calculated on the basis of a three hundred
sixty (360) day year and on the actual number of days that such principal was
outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

7-21-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date TCS Enterprises, Inc.

<PAGE>
EXHIBIT 10.5

AGREEMENT

This Agreement is between TCS Enterprise, Inc., a California corporation
and the Painter Group Corporation, a Delaware Corporation.

That TCS Enterprises, Inc., (TCS) is seeking a new direction for the
corporation.

That the Painter Group Corporation owns 100% of USA GOLF CORPORATION.

That both parties mutually agree as follows:

1. That TCS has an authorized capital of 30,000,000 shares of which
5,823,000 shares of Common are issued and outstanding plus options of 492,000
and warrants of 1,864,000 granted to insiders and employees listed as of
March 31, 1995 a copy of which is attached hereto and incorporated by this
reference for a total of 8,179,000. That the Board of Directors at the
meeting of July 21, 1995, have voted to reverse split the common stock on a
one for two basis including all outstanding Options and Warrants. The issued
and outstanding stock of the corporation, together with reserves for
unexercised vested options and warrants to an aggregate of 4,089,500 shares
of Common, there being no other class of shares outstanding and no other
Options and Warrants outstanding.

2. That TCS shall grant 6,089,500 shares (post split basis) of Common to the
Painter Group Corporation in exchange for One Hundred Percent of the stock of
USA GOLF CORPORATION.

3. That TCS shall authorize and issue solely to the Painter Group
Corporation 100,000 shares of Preferred Shares of TCS, at a price of $.001
per share, which shall represent 100% of all preferred shares to be issued by
the corporation.

4. The eight Directors of TCS shall resign effective immediately upon
approval of the Board of Directors to this Agreement there to remain on the
Board, James B. Kylstad, Rick W. Jarret, II, Cheryl B. Dodds, one Director to
be named by Santa Anita Produce, Inc., and the remaining directors shall
appoint Alan Painter, Jim Olsen, Helen Gibbel, Dr. Kenneth McGill, Sean
Kennally and Phillip Anton as Directors.

5. That TCS shall provide to the Painter Group Corporation a Certificate
from the Secretary of TCS confirming the approval of the Board of Directors
of TCS of this Agreement and the consent from the shareholders as defined and
required by the By-Laws of the Corporation, as to this Agreement herein.

6. That TCS shall forgive the indebtedness of SDB Offshore Ltd. and Santa
Anita Produce, Inc. in the amount of $378,975 and the penalty in the amount of
$150,000 for the cancellation of the Management Agreement between TCS and SDB
Offshore, Ltd.

<PAGE>

7. That the Painter Group Corporation agrees to exchange 100% of the
stock of USA GOLF CORPORATION for 6,089,500 shares of TCS under the
following terms and conditions:

8. That the Painter Group Corporation agrees to nominate the remaining
seats on the Board of Directors.

9. That the Painter Group Corporation agrees to assume the payment of the
liabilities of Santa Anita Produce to TCS in the amount of $528,975.

10. That the Painter Group Corporation agrees to an extension of the
expiration date of the Warrants issued in the name of Santa Anita Produce
from August 17, 1995, until August 17, 1996.

11. That the name of the public corporation shall be change to that of USA
Golf Corporation.

12. That the subsidiaries shall remain under their current names.

13. That all reasonable legal fees incurred by the Painter Group
Corporation in conjunction with the exchange of shares between USA Golf
Corporation and TCS shall be reimbursed by TCS, provided the transaction is
consummated as agreed and the Painter Group Corporation approves the payment.

14. That upon Board approval and signature herein two members of the
Painter Group Corporation will be active participants in the management of
the Corporation.

This shall be a binding agreement subject to shareholder approval, and
parties agree to proceed forwith to prepare a closing agreement setting forth
these terms in more detail to carry out this agreement and to close this
transaction as soon as practical.

This Agreement may be signed in counterparts and shall be deemed binding
and enforceable upon delivery of signatures by facsimile.

This Agreement is signed this 21st day of July, 1995, at San Diego,
California.

TCS Enterprises, Inc. The Painter Group Corporation

By: /s/ James B. Kylstad By: /s/ Alan Painter
-------------------- ----------------
James B. Kylstad, President Alan Painter, Chairman

<PAGE>

AGREEMENT

This Agreement is between the Painter Group Corporation of 210 North
Tustin Avenue, Suite C, Santa Ana, CA 92705 (PGC) and Santa Anita Produce,
Inc. of 1450 West La Quinta Road, Nogales, AZ 84621 (SAPI).

SAPI holds 3,511,476 shares of Common Stock of TCS Enterprises, Inc., a
California corporation, (TCS) and has entered into various financial
transactions with TCS as specified in form 10-QSB. Securities and Exchange
Commission, dated March 31, 1995.

SAPI desires to reduce their obligations to TCS Enterprises, Inc. (TCS).
Said obligations is a note with a balance of $378,975.00 and Management
Agreement, between TCS and SDB Offshore Ltd., cancellation penalty in the
amount of $150,000.

PGC hereby agrees to assume the above obligations of LOMELI in exchange
for the following considerations:

1. SAPI agrees to sign and deliver to the offices of TCS by Monday, July
24, 1995, 12:00 noon, the enclosed irrevocable Proxy, attached hereto and
incorporated herein by this reference.

2. SAPI agrees to the Board of Directors Meeting and Resolution of July
21, 1995, to a one for two reverse split of the common stock of TCS including
unexercised options and warrants outstanding and the purchase by TCS of 100%
of the shares of USA Golf Corporations held by PGC.

This Agreement may be signed in counterpart and shall be deemed binding
and enforceable upon delivery of signatures by facsimile.

This Agreement is dated this 21st day of July, 1995.

The Painter Group Corporation Santa Anita Produce, Inc.

by: /s/ Alan Painter by: /s/ Arturo Lomeli
-------------------------- -----------------
Alan Painter, Chairman President: Arturo Lomeli
------------------------
Print name and title of signator

<PAGE>

IRREVOCABLE PROXY

The undersigned holder of 1,511,476 Shares of TCS Enterprises, Inc.,
represented by certificates listed on Schedule "A", attached hereto and
incorporated herein by this reference, irrevocably appoints and constitutes
Helen Gibbel, President of the Painter Group Corporation, as its attorney
and proxy by attend meetings, vote, give consents and in all other ways to
act in its place and stead. The proxy shall have full power of substitution
and revocation and any proxies heretofore given are hereby revoked.

The proxy is made and executed pursuant to agreement of July 21, 1995,
in which the Painter Group Corporation agreed to extend credit to TCS
Enterprises, Inc. and agreed to assume certain obligation of Santa Anita
Produce, Inc. to TCS Enterprises, Inc. and this proxy is given as part of
said agreements.

This proxy shall be in full force and effect and irrevocable until the
closing of the issuance of shares to the Painter Group Corporation from TCS
for the shares of USA Golf Corporation.

This proxy shall be deemed binding and enforceable upon delivery of
signatures by facsimile.

Dated this 21st day of July, 1993.

SANTA ANITA PRODUCE, INC.

By: /s/ ARTURO LOMELI
------------------------------------
PRESIDENT: ARTURO LOMELI
------------------------------------
Print name and title of signator

<PAGE>

AGREEMENT

This Agreement is between the Painter Group Corporation of 210 North
Tustin Avenue, Suite C, Santa Ana, CA 92705 (PGC) and Hector Lomeli of Calle
6 Numero 630, Marcao De Abastos, Guadalajara Jalisco, Mexico (Lomeli).

LOMELI holds 747,778 shares of Common Stock of TCS Enterprises, Inc., a
California corporation, (TCS) and has entered into various financial
transactions with TCS as specified in form 10 QSB, Securities and Exchange
Commission, dated March 31, 1995.

LOMELI desires to reduce his obligations to TCS Enterprises, Inc. (TCS).
Said obligations is a note with a balance of $378,975.00 and Management
Agreement between TCS and SDB Offshore Ltd., cancellation penalty in the
amount of $150,000.

PGC hereby agrees to assume the above obligations of LOMELI in exchange
for the following considerations:

1. LOMELI agrees to sign and deliver to the offices of TCS by
Monday, July 24, 1995, 12:00 noon, the enclosed irrevocable Proxy, attached
hereto and incorporated herein by this reference.

2. LOMELI agrees to the Board of Directors' Meeting and Resolution
of July 21, 1995, to a one for two reverse split of the common stock of TCS
including unexercised options as warrants outstanding and the purchase by TCS
of 100% of the shares of USA Golf Corporation held by PGC.

This Agreement may be signed in counterparts and shall be deemed binding
and enforceable upon delivery of signatures by facsimile.

This Agreement is dated this 1st day of July, 1995.

The Painter Group Corporation Hector Lomeli

By: /s/ ALAN PAINTER /s/ HECTOR LOMELI
--------------------------- -----------------------------
Alan Painter, Chairman

<PAGE>

IRREVOCABLE PROXY

The undersigned holder of 747,778 Shares of TCS Enterprises, Inc.,
represented by certificates listed on Schedule "A", attached hereto and
incorporated herein by this reference, irrevocably appoints and constitutes
Helen Gibbel, President of the Painter Group Corporation, as its attorney
and proxy by attend meetings, vote, give consents and in all other ways to
act in its place and stead. The proxy shall have full power of substitution
and revocation and any proxies heretofore given are hereby revoked.

The proxy is made and executed pursuant to agreement of July 21, 1995,
in which the Painter Group Corporation agreed to extend credit to TCS
Enterprises, Inc. and agreed to assume certain obligations of LOMELI to TCS
Enterprises, Inc. and this proxy is given as part of said agreements.

This proxy shall be in full force and effect and irrevocable until the
closing of the issuance of shares to the Painter Group Corporation from TCS
for the shares of USA Golf Corporation.

This proxy shall be deemed binding and enforceable upon delivery of
signatures by facsimile.

Dated this 21st day of July, 1995.

Hector Lomeli

/s/ HECTOR LOMELI
--------------------------------

<PAGE>
EXHIBIT 10.6

PROMISSORY NOTE

$50,000.00 July 28, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation ("Painter"), at San Diego, California, or such other place as
the holder of this Note may from time to time in writing direct, the
principal sum of Fifty Thousand Dollars ($50,000.00) with interest from the
above date at the rate of ten percent per annum. Interest shall be
calculated on the basis of a three hundred sixty (360) day year and on the
actual number of days that such principal was outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

The foregoing option to accelerate the indebtedness evidenced by this
Note may be exercised by Painter at any time after the occurrence of any of
the events of default. The failure to exercise the foregoing option on the
occurrence of one or more of such events of default shall not prevent the
exercise upon the reoccurrence of such events of default or upon the
occurrence of any other event of default.

The undersigned agrees to pay all out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses) incurred by Painter hereunder
in connection with enforcing the obligations of the undersigned hereunder.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

7-28-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date TCS Enterprises, Inc.

f
<PAGE>
EXHIBIT 10.7

PROMISSORY NOTE

$25,000.00 August 3, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the
holder of this Note may from time to time in writing direct, the principal
sum of Twenty Five Thousand Dollars ($25,000.00) with interest from the above
date at the rate of ten percent (10%) per annum. Interest shall be
calculated on the basis of a three hundred sixty (360) day year and, if the
principal sum is paid earlier than the date due, on the actual number of days
that such principal was outstanding. Principal and interest will be payable
in six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

The foregoing option to accelerate the indebtedness evidenced by this
Note may be exercised by PGC at any time after the occurrence of any of
the events of default. The failure to exercise the foregoing option on the
occurrence of one or more of such events of default shall not prevent the
exercise upon the reoccurrence of such events of default or upon the
occurrence of any other event of default.

The undersigned agrees to pay all out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses) incurred by PGC hereunder
in connection with enforcing the obligations of the undersigned hereunder.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

8-3-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.8

PROMISSORY NOTE

$555,000.00 August 3, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to TCS Mortgage,
Inc. "TCSM", at San Diego, California, or such other place as the holder of
this Note may from time to time in writing direct, the principal sum of Five
Hundred Fifty Five Thousand Dollars ($555,000.00) with interest from the
above date at the rate of ten percent (10%) per annum. Interest shall be
calculated on the basis of a three hundred sixty (360) day year and, if the
principal sum is paid earlier than the date due, on the actual number of
days that such principal was outstanding. Principal and interest will be
payable in thirty days.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

The foregoing option to accelerate the indebtedness evidenced by this
Note may be exercised by TCSM at any time after the occurrence of any of
the events of default. The failure to exercise the foregoing option on the
occurrence of one or more of such events of default shall not prevent the
exercise upon the reoccurrence of such events of default or upon the
occurrence of any other event of default.

The undersigned agrees to pay all out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses) incurred by TCSM hereunder
in connection with enforcing the obligations of the undersigned hereunder.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

PAINTER GROUP CORPORATION

Aug. 3, 1995 /s/ Alan Painter
- -------------------- --------------------------
Date Alan Painter

<PAGE>
EXHIBIT 10.9

PROMISSORY NOTE

$20,000.00 August 4, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the
holder of this Note may from time to time in writing direct, the principal
sum of Twenty Thousand Dollars ($20,000.00) with interest from the above date
at the rate of ten percent (10%) per annum. Interest shall be calculated on
the basis of a three hundred sixty (360) day year and, if the principal sum
is paid earlier than the date due, on the actual number of days that such
principal was outstanding. Principal and interest will be payable in six
months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES
8-4-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.10

PROMISSORY NOTE (#4)

$20,000.00 August 11, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the
holder of this Note may from time to time in writing direct, the principal
sum of Twenty Thousand Dollars ($20,000.00) with interest from the above date
at the rate of ten percent (10%) per annum. Interest shall be calculated on
the basis of a three hundred sixty (360) day year, if the principal sum is
paid earlier than the date due, and on the actual number of
days that such principal was outstanding. Principal and interest will be
payable in six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

8-11-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.11

PROMISSORY NOTE

$45,000.00 August 15, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Rick W. Jarrett,
II ("Jarrett"), at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Forty Five Thousand Dollars ($45,000.00) with interest from the above date at
the rate of twelve percent per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and on the actual number of
days that such principal was outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

8-15-95 /s/ Cheryl B. Dodds
- -------------------- --------------------------
Date TCS Enterprises, Inc.

<PAGE>

EXHIBIT 10.12

EXECUTIVE OFFICE SUITE SUBLEASE

THIS EXECUTIVE OFFICE SUITE SUBLEASE ("Sublease") is entered into as of
August 15, 1995 ("Effective Date"), by and between SHANNON COMMUNITIES OF
NEVADA, INC., a Nevada corporation ("Sublessor"), and TCS MORTGAGE, INC., a
California corporation ("Sublessee"), with respect to the following:

A. Sublessor holds a leasehold interest in certain office spaces ("Premises")
pursuant to and as specifically described in that certain Office Lease for
Spanish Oaks Plaza dated July 13, 1993, a copy of which is attached here to
as Exhibit "A" and incorporated herein by this reference ("Master Lease").

B. Pursuant to Section 19 of the Master Lease, Sublessor may sublet the
Premises upon certain conditions, including the prior written consent of the
Landlord under such Master Lease.

C. Sublessor desires to sublet to Sublessee and Sublessee desires to hire
from Sublessor, with the written consent of Landlord, a portion of the
Premises to be used as an executive office suite by Tenant.

NOW, THEREFORE, in consideration of the foregoing and the covenants set forth
below, the parties agree as follows:

1. EXECUTIVE SUITE. Sublessor leases to Sublessee and Sublessee leases form
Sublessor all of the following ("Executive Suites"):

(a) Exclusive right to occupy the office spaces ("Offices") highlighted on
Exhibit "B": attached hereto, on the 2nd floor of the office building
located at the following address ("Building"):

3150 West Sahara, Suite B-21
Las Vegas, Nevada 89102

(b) Exclusive right to use one (2) telephone sets to be located within the
Office.

(d) A nonexclusive right to use the conference room located within the
Premises, to be scheduled on a first come basis for up to 10 hours per
month included in rent, and thereafter as available, and payable in
addition to the rent in accordance with Sublessor's current of rates.

(e) A nonexclusive right to use the kitchen area within the Premises.

<PAGE>

2. NATURE OF SUBLEASE. Sublease hereby acknowledges that the Premises is
being leased by Sublessor pursuant to the Master Lease and that this
Sublease if subject to all of the terms and conditions of the Master Lease.
In connection with the Master Lease, Sublessor and Sublessee agree as
follows:

(a) Sublessee shall assume and perform all of the obligations of
Sublessor as "Tenant" under said Master Lease, to the extent the terms
and conditions are applicable to the Office.

(b) Sublessee shall not commit or permit to be committed on the Premises,
including the Office, any act or omission which violates any term or
condition of the Master Lease.

(c) All of the terms and conditions of the Master Lease are incorporated
herein as additional terms and conditions of this Sublease (with each
reference therein to "Landlord" and "Tenant" to be deemed to refer to
Sublessor and Sublessee, respectively) and, along with all of the
provisions of this Sublease, shall constitute the entire terms and
conditions of this Sublease.

3. TERM. The term of the sublease shall be for a period of six (6) months,
commencing on August 15, 1995 and continuing until February 15, 1996, unless
sooner terminated in accordance with this Sublease. In the event that the
Sublessor is unable to deliver possession of the Office at the commencement
date described above, sublessor shall not be liable for any damage caused
thereby, nor shall this Sublease be void or voidable, but Sublessee shall
not be liable for rent until such time as Sublessor is able to deliver
possession of the Office to Sublessee.

4. RENT.

(a) On or before the first day of each calendar month of the term of this
Sublease, Sublessee shall pay to Sublessor in advance as rent for the
Executive Suite and without deduction, offset, prior notice, or demand,
the sum of EIGHT HUNDRED Dollars ($800.00) per month. If the term
commences on a day other than the first day of the calendar month,
rent shall be prorated for the first month based on that portion
of the calendar month remaining.

(b) If rent is received after the 10th day of the month, there shall be a
late charge of 10% of the monthly rent. All rent or other payments
due under this Sublease shall be made by Sublessee to Sublessor at
3150 West Sahara, B-21 Las Vegas, NV 89102.

5. ADVANCE PAYMENTS. Concurrently with the Sublessee's execution of this
Sublease, Sublessee shall deposit with Sublessor the following:

<PAGE>

(a) SECURITY DEPOSIT. FIVE HUNDRED Dollars $500.00 to be held by Sublessor
as a security deposit for the full and faithful performance of all of
the terms, covenants and conditions of this Sublease. If Sublessee
defaults with respect to any provision hereof, Sublessor may at its
election apply or retain all or any part of the aforesaid security
deposit for the payment of any other amount with Sublessor may spend
or become obligated to spend by reason of Sublessee's default.
Sublessor shall not be entitled to interest thereon. If Sublessee fully
and faithfully performs every provision of this Sublease to be
performed by Sublessee, the deposit or any balance thereof shall be
returned to Sublessee at the expiration of the term of this Sublease
and after Sublessee has vacated the Office. In the event of termination
of Sublessor's interest in this Sublease, Sublessor shall transfer said
deposit to Sublessor's successor in interest.

(b) TELEPHONE EQUIPMENT. ONE HUNDRED Dollars ($100.00)to be held by
Sublessor as a security deposit for telephone equipment. If Sublessee
removes or damages the telephone(s), Sublessor may use, apply or retain
all or any part of this security deposit to compensate Sublessor for
any loss or damage caused by Sublessee. Sublessee shall, within ten
(10) days after written demand, deposit cash with Sublessor in an
amount sufficient to restore the deposit to its original amount.
Sublessor shall not be required to maintain this security deposit
separate from its general funds, and Sublessee shall not be entitled
to interest thereon. If at the expiration of the term of this sublease,
the telephone(s) are within the Office and undamaged, this security
deposit shall be returned to Sublessee. In the event of termination
of Sublessor's interest in this Sublease, Sublessor shall transfer said
deposit to Sublessor's successor in interest.

6. USE. Sublessee shall use the Executive Suite for general office use. The
Executive Suite shall not be used for any other purpose without the
prior written consent of the Sublessor. The business of Sublessee shall
be established and conducted throughout the prior written consent of the
Sublessor. The business of Sublessee shall be established and conducted
throughout the term of this Sublease in a first class manner. Sublessee
shall not use or permit the Office or the premises to be used for the
conduct of any offensive, immoral, illegal, noisy or dangerous trade,
business, manufacture, or occupation, nor shall the Office or Premises
be used to conduct an auction sale. Sublessee shall not do or allow
anything to be done upon the Office or Premises which will cause
structural injury to the Office, Premises or Building. The Office or
Premises shall not be overloaded and no machinery, apparatus or other
appliance shall be used or operated in or upon the Office or Premises
which will in any manner injure, vibrate or shake the Office, Premises
or Building. No use shall be made of the Office which will in any way
impair the efficient operation of the sprinkler system within the
Building.

7. EXECUTIVE SUITE EQUIPMENT. This Sublease authorizes Sublessee to have
use of the

<PAGE>

telephone equipment, and conference room. Sublessee shall not be entitled to
use Sublessor's copy machines or facsimile machines.

8. RELOCATION. Sublessor shall have the right at any time during the term of
this Sublease, upon giving Sublessee not less than 60 days prior written
notice, to provide and furnish and to remove and place Sublessee in such
other office(s), with Sublessor to pay all reasonable out-of-pocket costs
and expenses incurred by Sublessee as a result of such relocation, provided
that such other office(s):

(a) are approximately the same size as the Office;

(b) contain comparable improvements as the Office; and

9. RULES AND REGULATIONS. Sublessee shall faithfully observe and comply
with any and all Rules and Regulations that Sublessor may from time to
time promulgate, in addition to those Rules and Regulations set forth in
the Master Lease.

10. TERMINATION. This Sublease may be cancelled by either party upon the
expiration of thirty (30) days prior written notice.

IN WITNESS WHEREOF, the parties have executed this Sublease as of the Effective
Date.

SUBLESSOR: SHANNON COMMUNITIES OF NEVADA, INC. a Nevada
Corporation

By:
-----------------------
Thomas P. Dobron,
President

SUBLESSEE: TCS MORTGAGE, INC., a California Corporation

By:
-----------------------
Richard W. Jarrett II,
President

<PAGE>
CONSENT AND WAIVER OF LANDLORD

The undersigned, Landlord under the Master Lease attached hereto as Exhibit
"A", hereby consents to the subletting of the Office described in Exhibit "B"
hereto and hereby waives any and all other requirements or obligations of
Sublessor to Landlord in connection with subletting the Office as set forth
in Section 19 of the Master Lease. This consent and waiver shall apply only
to this Sublease and shall not be deemed to be a consent or waiver as to any
other sublease of the Premises.

SPANISH OAKS LIMITED PARTNERSHIP

- -------------------------------- ------------------
Arthur V. Adams, General Partner Date

<PAGE>
EXHIBIT 10.13

PROMISSORY NOTE (#5)

$20,000.00 August 22, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the
holder of this Note may from time to time in writing direct, the principal
sum of Twenty Thousand Dollars ($20,000.00) with interest from the above date
at the rate of ten percent (10%) per annum. Interest shall be calculated on
the basis of a three hundred sixty (360) day year and, if the principal sum
is paid earlier than the date due, on the actual number of days that
such principal was outstanding. Principal and interest will be
payable in six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

8-22-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.14

PROMISSORY NOTE (#6)

$25,000.00 August 30, 1995

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

8-30-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.15

PROMISSORY NOTE (#7)

$20,000.00 August 30, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Twenty Thousand Dollars ($20,000.00) with interest from the above date at the
rate of ten percent (10%) per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and, if the principal sum is
paid earlier than the date due, on the actual number of
days that such principal was outstanding. Principal and interest will be
payable in six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

8-30-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.16

PROMISSORY NOTE

$29,000.00 September 1, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Rick W. Jarrett,
II ("Jarrett") at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Twenty Nine Thousand Dollars ($29,000) with interest from the above date
at the rate of twelve percent per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and on the actual number of
days that such principal was outstanding.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

9-1-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date TCS Enterprises, Inc.

<PAGE>
EXHIBIT 10.17

LEASE

THIS LEASE is made and entered into this 15 day of September, 1995 by and
between JOHN E. COLYER and SUZANNE J. COLYER, CO-TRUSTEES OF THE COLYER
REVOCABLE LIVING TRUST DATED JULY 5, 1978, herein "Landlord", and TCS
Mortgage, Inc., herein "Tenant".

WITNESSETH:

Landlord, for and in consideration of the agreements contained in this
Lease, does hereby lease to Tenant, and Tenant hereby leases from Landlord,
that certain commercial space located at 1000 Caughlin Crossing, Suite/Space
No. 20, consisting of approximately 674 gross leasable square feet, Reno,
Nevada, known as Caughlin Crossing Convenience Center, herein "the Leased
Premises". The Lease Premises are a portion of a building, herein "the
building", constructed at 1000 Caughlin Crossing, herein "the property".

The data set forth in (A) through (F) below is subject to the main body
of the Lease in general and to those paragraphs of the Lease pertaining to
the subject matter in particular.

SUMMARY OF BASIC TERMS:

(A) TERM: Initial 12 month term with 2 one year renewal options

(B) INITIAL MINIMUM MONTHLY RENT: $876

(D) INITIAL MONTHLY IMPOUND FOR TAXES: $53.52

(E) NAME OF BUSINESS: TCS Mortgage

(F) BUSINESS USE: Mortgage Brokerage

<PAGE>

THIS LEASE IS MADE UPON THE FOLLOWING TERMS, COVENANTS AND CONDITIONS,
TO WHICH THE PARTIES EXPRESSLY AGREE:

1. PREMISES.

1.1. LEASED PREMISES. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Leased Premises, together with those
appurtenances specifically granted in this Lease.

1.2. INGRESS AND EGRESS. Tenant shall have full and unimpaired access to
the Leased Premises and to the common area at all times including access by
non-exclusive easements of record, if any.

1.3. COMMON AREA.

1.3.1. COMMON AREA DEFINED. The term "common area" means all areas
of facilities outside the Leased Premises and within the exterior boundaries
of the property that are provided and designated by Landlord from time to
time for the general use and convenience of Tenant and of other tenants of
the property. Common areas include, without limitation, pedestrian walkways,
stairways, elevator, hallways, storage areas, mechanical areas, public
restrooms, sidewalks, landscaped grounds, parking areas, loading areas,
roads, and other areas of the building and property not specifically leased,
or available to be leased, to another tenant.

1.3.2. TENANT'S RIGHT TO USE. Landlord gives to Tenant and its
authorized representatives and invitees the non-exclusive right to use the
common area, with others who are entitled to use the common area, subject to
Landlord's designation, management and maintenance of the common area.

1.3.3. LANDLORD'S MAINTENANCE AND MANAGEMENT OF COMMON AREA.
Landlord shall maintain the common area in good condition at all times.
Landlord shall have the right to:

(i) Establish and enforce reasonable rules and regulations
applicable to all tenants concerning the maintenance, management, use and
operation of the common area. Landlord reserves the right to promulgate such
reasonable rules and regulations relating to the use of the common area, and
any part or parts thereof, as Landlord may deem appropriate and for the best
interest of the property. Tenant and Tenant's employees and invitees shall
faithfully observe and comply with any reasonable rules and regulations
governing the property as may from time to time be established by Landlord or
any entity or organization having jurisdiction over the property upon
delivery of a copy of them to Tenant. The rules and regulations may be
amended by

<PAGE>

Landlord or from time to time, with or without advance notice, and all
amendments shall be effective upon delivery of a copy of them to Tenant.

(ii) Close any of the common area to whatever extent
required in the opinion of Landlord's counsel to prevent a dedication of any
of the common area or the accrual of any rights of any person or of the
public to the common area.

(iii) Close temporarily any of the common area for
maintenance purposes.

(iv) Make changes to the common area including, without
limitation, changes in the location of driveways, vehicular parking spaces,
parking area, or the direction of the flow of traffic and changes in the size
and nature of the common area.

(v) Select a person or company to maintain and operate any
of the common area if at any time Landlord determines that the best interests
of the property will be served by having any of the common areas maintained
and operated by that person or company. Landlord shall have the right to
negotiate and enter into a contract with that person on such terms and
conditions and for such period of times as Landlord deems reasonable and
proper both as to service and as to cost.

1.3.4. TENANT'S SHARE OF COMMON AREA COSTS. Beginning at the time
Tenant's obligation to pay rent commences, Tenant shall pay to Landlord its
share of the total cost of maintaining the common area. Tenant's share of the
common area costs shall be the ratio of the total common area costs that the
total number of square feet of the Leased Premises bears to the total number
of leasable square feet in the property.

1.3.5. PAYMENT OF TENANT'S SHARE OF COMMON AREA COSTS. With each
payment of monthly rent, Tenant shall pay to Landlord the amount set forth
the paragraph entitled "Summary of Basic Terms" as an impound toward Tenant's
share of the common area maintenance costs. The amount of such impound is an
estimate only of Tenant's actual obligation. The actual obligation for common
area maintenance costs shall be determined and computed by Landlord not less
often than annually, and at the time each such computation is made, Landlord
and Tenant shall adjust for any difference between the impounded estimated
amounts and Tenant's computed actual share. Also, at the time of each
computation, Landlord may revise the monthly impound for common area
maintenance by written notification to Tenant.

2. TERMS

2.1. INITIAL TERM. The initial term of this Lease shall

<PAGE>

commence on October 1, 1995, and end at midnight on September 30, 1996,
unless renewed or continued pursuant to the provisions hereof, and provided
that Tenant shall not be in default hereunder.

2.2. OPTION TO EXTEND TERM. Tenant is given the option to extend the
term on all the provisions contained in this Lease, except for rent. Such
extension shall be for a further term of one year with an additional option
to extend for one additional year. Tenant shall exercise such option, if at
all, by giving notice of exercise of the option ("option notice") to
Landlord at least three (3) months but no more than one (1) year before the
expiration of the initial term. Provided that, if Tenant is in default on the
date of giving the option notice, the option notice shall be totally
ineffective, or if tenant is in default on the date the extended term is to
commence, the extended term shall not commence and this Lease shall expire at
the end of the initial term. Tenant shall have no other right to extend the
term beyond the term or the extended term.

2.3 ADJUSTED RENT FOR EXTENDED TERM. Rent for the extended term shall
be determined as provided in Section 3.1, below.

3. RENT.

3.1 MINIMUM MONTHLY RENT. Tenant shall pay to Landlord as minimum
monthly rent for the first twelve (12) months of the term, without deduction,
setoff, prior notice, or demand, the sum of Eight Hundred Seventy Six and
no/100 ($876.00) DOLLARS per month, in advance, on or before the first day of
each and every month commencing with the first month of the initial term and
continuing on the first day of each and every month thereafter during the
first year of the term. At the commencement of the second year of the term
(the anniversary date of the commencement of the term), and annually
thereafter during the term, including any extensions or renewals of the
term, the minimum monthly rent payable during the ensuing lease year shall be
an amount equal to 105% of the minimum monthly rent in effect for the prior
year of the term (without regard to any temporary abatement of rent then in
effect pursuant to any provision of this Lease).

If Tenant's obligation to pay rent commences other than on the first
day of a calendar month, the first month's minimum rent shall be prorated
based on a thirty-day month and paid at the commencement of obligation to pay
rent.

Tenant shall make rental and other payments to Landlord in lawful money
of the United States; provided, if any such payment made by check, draft or
money order is returned to Landlord due to non-sufficient funds, or
otherwise, Landlord shall have the right

<PAGE>

to require Tenant to make all subsequent payments in cash, or by cashier's or
certified check.

Tenant's timely payment of rent and other charges provided in this
Lease is an unconditional obligation of Tenant, and one on which Landlord is
relying in order to meet the financial obligations of the property. Tenant's
obligation to pay shall be continuous throughout the term of this Lease, even
during the pendency of any dispute resolution process which may arise during
the term hereof.

All rent shall be paid to Landlord at the address to which notices to
Landlord are to be given pursuant to Paragraph 18.4 of this Lease.

3.2. LATE PAYMENT CHARGE AND INTEREST. Any payment due and not paid to
Landlord within fifteen (15) days after it is due shall be subject to a late
payment charge equal to five percent (5.0%) of the total payment due. In
addition, any sums not paid within thirty (30) days from the due date shall
accrue interest at the rate of 1.8% per month (APR of 21.6%), or the maximum
rate allowed by law, whichever is less, until paid in full.

3.3 "RENT" DEFINED. The term "rent" as used in this Lease shall be
deemed to be and mean the minimum monthly rent, additional rent, rental
adjustments, tenant reimbursement and any other sums, however designated,
required to be paid by Tenant under this Lease.

3.4 LIEN FOR SUMS DUE. Tenant grants Landlord a security interest
("lien") as described in this Paragraph 3.4 and authorizes Landlord to file
all necessary documents, including UCC-ls, to perfect the lien. Tenant agrees
such filing may be done before or after execution of this Lease or occupancy
of the Leased Premises by Tenant. All money and other sums which become due
to Landlord by reason of any provision of this Lease are and shall always be
a valid and first lien upon the personal property, improvements and fixtures
of Tenant in the Leased Premises, (including, without limitation, any
insurance proceeds payable to Tenant), and upon all of the interest of Tenant
in this Lease, and such lien will have priority over any mortgage on the
property which Landlord may execute, and to any lien caused or permitted by
Tenant, with the sole exception of a properly perfected purchase money
security interest. Landlord may subordinate its lien to the lien of financing
proposed by Tenant. Landlord's consent to subordinate shall not be withheld
unreasonably. Landlord may require from Tenant in return for Landlord's
consent to subordinate, such further assurances and security as Landlord
deems reasonably necessary to maintain a level of security equivalent to its
position prior to Tenant's request to subordinate.

<PAGE>

4. SECURITY DEPOSIT.

4.1. On execution of this Lease, or on such other date as Landlord may
specify, Tenant shall deposit with Landlord the sum of One Thousand
($1,000.00) DOLLARS as a security deposit for the full and faithful
performance by Tenant of the provisions of this Lease. If Tenant is in
default, Landlord can use the security deposit, or any portion of it, to cure
the default or to reduce other charges or claims Landlord may have against
Tenant as a result of any default. Tenant shall immediately on-demand pay to
Landlord a sum equal to the portion of the security deposit expended or
applied by Landlord as provided in this paragraph so as to maintain the
security deposit in the sum initially deposited with Landlord. If Tenant is
not in default at the expiration or termination of this Lease, Landlord shall
return the security deposit to Tenant. Landlord shall not be required to pay
Tenant interest on the security deposit.

In the event of bankruptcy or other debtor/creditor proceedings against
Tenant, such security deposit shall be offset against any unpaid rent and
other charges due Landlord.

If for any reason this Lease is terminated prior to the commencement of
the term, other than for the non-performance of Landlord, in addition to any
rights it may have, Landlord may retain the security deposit.

5. TAXES AND ASSESSMENTS.

5.1. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all
taxes, assessments, license fees, and other charges ("taxes") that are levied
and assessed against Tenant's personal property installed or located in or on
the Leased Premises, and that become payable during the term. On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of such
payments.

5.2. REAL PROPERTY TAXES. Tenant shall pay as additional rent, at the
times and in the manner set forth below, Tenant's proportionate share of all
taxes commonly called real estate taxes, levied on, or assessed against, the
property of which the Leased Premises as a part. Beginning at the time
Tenant's obligation to pay rent commences, Tenant shall pay to Landlord
monthly, with each payment of minimum monthly rent, the amount set forth in
the paragraph entitled "Summary of Basic Terms" as an impound toward its
share of taxes. The amount of such impound is an estimate only of Tenant's
actual obligation. The actual obligation for taxes shall be determined and
computed by Landlord not less often than annually and at the time each such
computation is made, Landlord and Tenant shall adjust for any difference
between impounded amounts and Tenant's actual share. Also, at the time of each
computation, Landlord may revise the monthly impound

<PAGE>

for taxes by written notice to Tenant. Tenant shall pay its share of taxes,
for both the Leased Premises and the common area, during each year of the
Lease term. Should the Lease term commence or expire at a time other than the
beginning or end of a taxable year, Tenant's obligation shall be prorated
appropriately. Landlord shall furnish such figures, computations and
information as Tenant may reasonably request for the purpose of verifying the
amounts charged to Tenant by Landlord.

6. USE AND LIMITATION ON USE.

6.1. USE. Tenant shall use the Leased Premises for the following
purposes and for no other use without Landlord's written consent: Mortgage
Banking. Tenant shall not use the Leased Premises or permit the Leased
Premises to be used for any other purpose or purposes except with the prior
written consent of Landlord. It is understood by Tenant that this Lease
contains no exclusive use rights in favor of Tenant.

6.2. LIMITATIONS ON USE. Tenant's use of the property as provided in
this Lease shall be in accordance with the following:

6.2.1. CANCELLATION OF INSURANCE; INCREASE IN INSURANCE RATES.
Tenant shall not do, bring, or keep anything in or about the property that
will cause a cancellation of any insurance covering the building. If the rate
of any insurance carried by Landlord is increased as a result of Tenant's
use, Tenant shall pay to Landlord, within ten (10) days before the date
Landlord is obligated to pay a premium on the insurance, or within ten (10)
days after Landlord delivers to Tenant a certified statement from Landlord's
insurance carrier stating that the rate increase was caused primarily by an
activity of Tenant on the property as permitted in this Lease, whichever date
is later, a sum equal to the difference between the original premium and the
increased premium.

6.2.2. COMPLIANCE WITH LAWS. Tenant shall comply with all laws
concerning the property or Tenant's use of the property, including, without
limitation, the obligation at Tenant's cost to remodel and maintain the
Leased Premises in compliance and conformity with all laws relating to the
condition, use or occupancy of the Leased Premises during the term to the
extent Tenant is obligated to do so pursuant to Paragraph 8 herein.

6.2.3. NUISANCE; WASTE. Tenant shall not use the Leased Premises in
any manner that will constitute waste, nuisance or unreasonable annoyance
(including, without limitation, the use of loudspeakers or sound or light
apparatus that can be heard or seen outside the Leased Premises) to other
tenants in the building. Tenant shall not conduct or permit to be conducted
any liquidation,

<PAGE>

garage, going-out-of-business sale, or any sale by auction, on the Leased
Premises, or sell or display merchandise outside the confines of the Leased
Premises or in the common areas without the written consent of Landlord.

6.2.4 COVENANT OF CONTINUOUS OPERATION. Tenant shall continuously
use the Leased Premises for the uses specified in this lease during all usual
business hours and on all such days as comparable businesses in the area are
open for business.

7. FIXTURES AND ALTERATIONS.

7.1. TRADE FIXTURES. The furniture, trade fixtures, business
equipment and other property placed in, on or about the Leased Premises by
Tenant shall remain the property of Tenant and may be removed on the
expiration or termination of this Lease or any renewal thereof, subject to
the lien of Landlord (Paragraph 3.4); provided, however, Tenant shall be
responsible for any damage caused by or during such removal. Further, Tenant
shall, during the term hereof, pay for and keep said fixtures and other
personal property situated within the Leased Premises insured against fire
and other comprehensive coverage and will indemnify Landlord and save
Landlord harmless from and against any and all claims, actions, damages,
liabilities and expenses in connection with said fixtures.

7.2 ALTERATIONS. Tenant shall have the right at Tenant's own expense,
subject to adequate protection against mechanic's and materialman's liens,
and subject to Landlord's rights hereunder, to make such alterations and
non-structural changes in the Leased Premises as may be required for Tenant's
business purposes. No work shall be commenced or carried on which will
structurally alter the building or damage or undermine its support or that of
its neighbors. All work to be performed by Tenant shall be constructed by
Tenant in a good and workmanlike manner and free of any liens for labor and
materials. Tenant agrees to indemnify Landlord and hold Landlord harmless
against any loss, liability, claim, damage or expense resulting from such
work. Further, all additions, improvements and alterations made by Tenant in
and upon the Leased Premises, including but not limited to all permanently
attached electrical fixtures, wiring, service leads and paneling installed by
Tenant in and upon the Leased Premises shall become and remain the property
of Landlord. Tenant shall be responsible for obtaining any and all agency
permits necessary to make any alteration. Tenant agrees that in the event
that Landlord so elects not less than ten (10) days before expiration of the
term, or within ten (10) days after termination of the term, Tenant will
remove any alterations that Tenant has made to the Leased Premises. In that
event, Tenant, at its cost, shall restore the Leased Premises to the
condition designated by Landlord in its election, before the last day of the
term, or within ten (10) days after notice of election is given, whichever is
later.

<PAGE>

7.3 NOTICE OF NON-RESPONSIBILITY. Tenant will not permit any labor
to be performed, or material to be furnished upon the Leased Premises within
the definition of the mechanic's lien laws without first giving Landlord at
least ten (10) days written notice of the proposed work and when it is to
commence, and without first obtaining Landlord's consent in writing to the
work. Landlord shall have the responsibility of filing any notice of
non-responsibility. Whether or not a notice of non-responsibility is filed,
Tenant agrees to and shall indemnify Landlord and hold Landlord harmless
against any loss, liability, claim, damage or expense resulting
from such work.

7.4 MECHANIC'S LIENS. Tenant shall pay all costs for alterations
done by it or caused to be done by it on the Leased Premises as permitted
in this Lease. Tenant shall keep the building, other improvements and land on
which the Leased Premises are situated free and clear of all mechanic's liens
resulting from construction done by or for Tenant. Tenant shall have the
right to contest the correctness of the validity of any lien filed because of
Tenant's work if, immediately on demand by Landlord, Tenant procures and
records a lien release bond issued by a corporation authorized to issue
surety bonds in the State of Nevada in such amount as required by law.

8. MAINTENANCE AND REPAIR.

8.1 LANDLORD'S MAINTENANCE. Landlord at its cost shall maintain,
in excellent condition, the structural parts of the building and other
improvements in which the Leased Premises are located, which structural parts
include only the foundations, bearing and exterior walls (excluding glass and
doors), subflooring, and roof (excluding skylights); the portions of the
electrical, plumbing and sewage systems lying outside the Leased Premises;
and window frames, gutters and downspouts on the building and other
improvements in which the Leased Premises are located.

8.2 TENANT'S MAINTENANCE. Tenant at its cost shall maintain, in
excellent condition, all portions of the Leased Premises including, without
limitation, all Tenant's personal property, signs, plate glass, show windows;
the heating, ventilation, and air-conditioning systems, and those portions
of the electrical, plumbing, sewage systems and drains lying within the
Leased Premises. Tenant shall keep the sidewalks and common areas adjacent to
the Leased Premises clean and free of all debris. During the term of this
Lease, Tenant shall keep in force a preventative maintenance contract with a
qualified mechanical contractor covering the heating and air conditioning
equipment and, upon request, shall provide Landlord with a copy of such
contract. At the expiration or earlier termination of the Lease term Landlord
will cause an inspection of the heating and air conditioning equipment in the
Leased Premises by Tenant's mechanical contractor, or if Tenant does not have
a service contract in force, by a

<PAGE>

contractor of Landlord's selection, and obtain a cost estimate to bring such
equipment to good working order if defects are noted, and Tenant agrees to
pay to Landlord on demand an amount equal to 75% of such total cost estimate,
which share shall be deemed to be Tenant's deferred repair obligation after
excepting fair wear and tear. Tenant shall be liable for any damage to the
building resulting from the acts or omissions of Tenant or its authorized
representatives, including the costs of any repair or maintenance to the
electrical, plumbing and sewage systems lying outside the Leased Premises if
caused by Tenant.

9. UTILITIES.

9.1. TENANT'S OBLIGATIONS. From the time it first enters the Leased
Premises for the purpose of making tenant improvements or setting fixtures,
or from the commencement of the term of this Lease, whichever date is
earlier, and throughout the term of this Lease, Tenant shall pay for all
public and other utilities and related services rendered or furnished to the
Leased Premises, including, but not limited to, water, hot water, gas,
electricity, telephone, heat, light, sewer, refuse or garbage collection or
disposal, and related connection charges or deposits.

9.2. LANDLORD'S OBLIGATIONS. Landlord shall maintain the necessary
mains, fire line meters, conduits, wires and cables bringing utilities to the
Leased Premises, and the cost of such maintenance shall be treated as cost
under Paragraph 1.3 above. If Landlord should elect to supply utilities,
Tenant shall purchase its requirements for such utilities from Landlord.
Payment for any and all utilities used by Tenant and furnished by Landlord
shall be monthly and within ten (10) days of the presentation of bills by
Landlord to Tenant. Landlord may cut off and discontinue, without notice to
Tenant, such utilities whenever and during any period for which bills for the
service are not properly paid by Tenant.

9.3. INTERRUPTED SERVICE. Landlord shall not be liable in damages,
consequential or otherwise, nor shall there be any rent abatement, arising
out of any interruption whatsoever in utility services which is due to fire,
accident, strike, governmental authority, acts of God, or other causes beyond
the reasonable control of Landlord and any temporary interruption in such
service which is necessary to the making of alterations, repairs or
improvements to the building or any part of it.

10. INDEMNITY AND INSURANCE.

10.1. EXCULPATION OF LANDLORD. Landlord shall not be liable to Tenant
for any damage to Tenant or Tenant's property from any cause, and Tenant
waives all claims against Landlord and its agents for damage to person or
property arising for any reason, except damages to Tenant resulting from the
acts or omissions of

<PAGE>

Landlord amounting to at least "gross negligence". Specifically, but without
limitation, Landlord shall not be liable for any damage to property of Tenant
or of others located on the Leased Premises, nor for the loss of or damage to
any property of Tenant or others by theft or otherwise, nor shall Landlord be
liable for any injury or damage to persons or property resulting from fire,
explosion, falling materials, steam, gas, electricity, water, rain, snow,
ice, or leaks from any parts of the property or from the pipes, plumbing
works, electrical system, or from the roof, street, subsurface or from any
other place or from any other cause whatsoever in nature. Landlord shall not
be liable for any such damages caused by other tenants or persons in the
Leased Premises, occupants of property adjacent to the building or the
public, or caused by operation and construction of any public or quasi-public
work.

10.2. HOLD HARMLESS. Tenant will indemnify Landlord and save it
harmless from and against all claims, actions, damages, liabilities and
expenses in connection with the loss of life, personal injury and/or damage
to property arising from or out of any occurrence in, upon or at the Leased
Premises, or any occupancy or use by Tenant of the Leased Premises or any
part thereof, or occasioned in whole or in part by any act or omission of
Tenant, his agents, employees, contractors, sublessees or licensees. This
indemnity to hold harmless shall also apply in connection with all claims,
causes of action, damages, liabilities, expenses and judgments arising out of
the use of the common areas in the event they are the result, in whole or in
part, of the carelessness and neglect of Tenant, its agents, employees,
contractors, sublessees or licensees, except claims, causes of action and
judgments resulting from Landlord's sole negligence.

10.3. LIABILITY INSURANCE.

10.3.1. LANDLORD'S INSURANCE. Landlord shall provide an all risk
policy covering the building, appurtenant structures, including common areas,
and a general liability policy. Landlord shall provide insurance covering the
risk of rental income loss in an amount equal to twelve (12) months of rental
income. Any additional loss of rental income insurance may be obtained by
Tenant at its sole cost. Tenant shall pay its prorata share of the cost of
such insurance.

10.3.2. TENANT'S LIABILITY INSURANCE. Upon the commencement of the
term, Tenant will take out and will at all times maintain in full force and
effect, a standard owner, landlord and tenant policy of public liability
insurance insuring the respective parties as their interests may appear, with
limits in at least the following amounts per person, $1,000,000.00; per
occurrence, $1,000,000.00; property damage, $100,000.00. The limit of any
such insurance shall not, however, limit the liability of Tenant hereunder.
Certificates evidencing such coverage and providing that the insurance may
not be cancelled without thirty

<PAGE>

(30) days prior written notice to Landlord shall be delivered to Landlord
prior to Tenant's opening for business. If Tenant shall default in the
performance of this paragraph, Landlord may, at its option, procure such
insurance and for premiums for such insurance such sums of money as the
Landlord may deem necessary, and Tenant shall reimburse Landlord, immediately
on demand, for all amounts expended, plus interest at the rate specified in
Paragraph 3.2 from the date of the expenditure. Failure to make such
reimbursement shall carry the same consequences as a failure to pay rent.

10.3.3. TENANT'S FIRE INSURANCE. Tenant at its cost shall maintain
on all its personal property, trade fixtures, tenant's improvements and
alterations in, on, or about the Leased Premises, a policy of standard fire
and extended coverage insurance, with vandalism and malicious mischief
endorsements, to the extent of at least 100% of the replacement value. The
insurance policy shall be issued in the names of Landlord, Tenant, and
Landlord's lender, if any, as their interests appear. The policy shall
provide that any proceeds shall be made payable as provided in Paragraph 11.
The sole exception to this provision is that insurance proceeds for Tenant's
personal property and trade fixtures may be made payable to Tenant, subject,
however, to the lien set forth in Paragraph 3.4, above.

10.3.4 GROUP PROTECTION. If all insurance required by this Lease
can be obtained more economically as a package, Landlord and Tenant agree to
cooperate in placing all insurance with the same agent or carrier. In such
event, at Landlord's option, Landlord may pay all premiums for such
insurance, and each tenant shall pay his prorata share of the total premiums,
monthly along with payments of monthly rent. Any special risks or special
insurance for Tenant shall be at Tenant's sole cost.

11. DESTRUCTION.

11.1 DESTRUCTION DUE TO RISK COVERED BY INSURANCE. If during the term
the premises or the building and other improvements in which the Leased
Premises are located are totally or partially destroyed from a risk fully
covered by the insurance described in Paragraph 10 rendering the Leased
Premises totally or partially inaccessible or unusable, Landlord at its
election may restore the Leased Premises or the building and other
improvements in which the Leased Premises are located to substantially the
same condition as they were in immediately before destruction within nine (9)
months from the date of destruction. Provided, that this time shall be
extended if Landlord is proceeding diligently to restore the premises and if
restoration is prevented by a cause beyond Landlord's reasonable control.
Such destruction shall not terminate this Lease unless Landlord gives written
notice thereof to Tenant. If the existing laws do not permit the restoration,
either party can terminate this Lease immediately by giving notice

<PAGE>

to the other party.

11.1.1. If the cost of the restoration exceeds the amount of the
proceeds received from the insurance required under Paragraph 10, Landlord
can elect to terminate this Lease by giving notice to Tenant within fifteen
(15) days after determining that the restoration cost will exceed the
insurance proceeds. In the case of destruction to the Leased Premises only,
if Landlord elects to terminate this Lease, Tenant, within fifteen (15) days
after receiving Landlord's notice to terminate, can elect to pay to Landlord,
at the time Tenant notifies Landlord of its election, the difference between
the amount of insurance proceeds and the cost of restoration, in which case
Landlord shall restore the Leased Premises. Landlord shall give Tenant
satisfactory evidence that all sums contributed by Tenant as provided in this
paragraph have been expended by Landlord in paying the cost of restoration.

11.1.2. If Landlord elects to terminate this Lease and Tenant does
not elect to contribute toward the cost of restoration as provided in this
paragraph, this Lease shall terminate.

11.2 DESTRUCTION DUE TO RISK NOT COVERED BY INSURANCE. If, during the
term, the Leased Premises or the building and other improvements in which the
Leased Premises are located are totally or partially destroyed from a risk
not fully covered by the insurance described in Paragraph 10, rendering the
Lease Premises totally or partially inaccessible or unusable, Landlord at its
election may, subject to Paragraph 11.2.1. below, restore the Leased Premises
or the building and other improvements in which the Leased Premises are
located to substantially the same condition as they were in immediately
before destruction. Such destruction shall not terminate this Lease unless
Landlord gives written notice thereof to Tenant. If the existing laws do not
permit restoration, either party can terminate this Lease immediately by
giving notice to the other party.

11.2.1. If the cost of restoration exceeds five percent (5%) of the
then replacement value of the Leased Premises or the building and other
improvements in which the Leased Premises are located that are destroyed,
Landlord can elect to terminate this Lease by giving notice to Tenant within
fifteen (15) days after determining the restoration cost and replacement
value.

11.2.2. In the case of destruction to the Leased Premises only, if
Landlord elects to terminate this Lease, Tenant, within fifteen (15) days
after receiving Landlord's notice to terminate, can elect to pay to Landlord,
at the time Tenant notifies Landlord of its election, the difference between
five percent (5%) of the then replacement value of the Leased Premises and
the actual cost of restoration, in which case Landlord shall restore the
Leased Premises. Landlord shall give Tenant

<PAGE>

satisfactory evidence that all sums contributed by Tenant as provided in this
paragraph have been expended by Landlord in paying the cost of restoration.

11.2.3. If Landlord elects to terminate this Lease and Tenant does
not elect to perform the restoration or contribute toward the cost of
restoration as provided in this paragraph, this Lease shall terminate.

11.3. DESTRUCTION WITHIN SIX MONTHS OF TERM END. In the event that
the building or the Leased Premises is totally destroyed within six (6)
months of the date the term of this Lease expires, then Landlord, in its sole
discretion, may elect not to reconstruct.

11.4 ABATEMENT OR REDUCTION OF RENT. In case of destruction,
whether or not caused by a risk covered by the insurance provided in
paragraph 10, there shall be no abatement or reduction of rent except only to
the extent of any insurance proceeds which Landlord may obtain covering such
risks, as specified in Paragraph 10.3.1.

12. CONDEMNATION.

In the event that the entire Leased Premises shall be apportioned or
taken under the power of eminent domain by any public laws or public
authority, this Lease shall terminate and expire as of the date of such
taking and Tenant shall thereupon be released from the liability thereafter
accruing hereunder. In the event that a portion of the Leased Premises shall
be so appropriated or taken, and the remainder of the property shall not be
reasonably suitable for the use then being made of the property by
Tenant, Tenant shall have the right to terminate this Lease as of the date of
such taking by giving Landlord a written notice of termination within thirty
(30) days of such taking, if Landlord cannot restore any portion of the
Leased Premises to make the same reasonably suitable to the uses then being
made of the property by Tenant. In the event that a partial taking of the
Leased Premises does not render the Leased Premises unsuitable for the
conduct of Tenant's business, this Lease shall continue if full force and
effect for the part not taken, and the rent shall then be reduced as of the
date of the taking by the percentage determined by dividing the square feet
taken by the total leasable square feet in the building. All proceeds derived
from the power of eminent domain shall be owned and in the possession of
Landlord, provided, however, that Tenant shall be reimbursed for the value of
any of his personal property damaged or compromised by such taking.

13. ASSIGNMENT.

13.1. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING. Tenant shall not voluntarily assign

<PAGE>

or encumber its interest in this Lease, or any portion thereof, or in the
Leased Premises, or sublease all or any part of the Leased Premises, or allow
any other person or entity (except Tenant's authorized representatives) to
occupy or use all or any part of the Leased Premises, without first obtaining
Landlord's written consent, which consent will not be unreasonably withheld.
Any assignment, encumbrance, or sublease without Landlord's consent shall be
voidable and, at Landlord's election, shall constitute default. In
determining whether to give consent, however, Landlord shall consider the
following factors and such other factors as Landlord deems appropriate: The
character and quality of the proposed transferee, whether the addition of the
transferee would benefit the other tenants in the building, and whether the
proposed transferee would enhance the mix of tenants in the building. No
consent to any assignment, encumbrance or sublease shall constitute a further
waiver of the provisions of this paragraph, or a consent to a future
assignment.

13.1.1. If Tenant is a partnership, a withdrawal or change,
voluntary, involuntary, or by operation of law, of the partner or partners
owning 30% or more of the partnership, or the dissolution of the partnership,
shall be deemed a voluntary assignment. However, should all the remaining
partner(s) assume all responsibility for the Lease and for all of the Leased
Premises, Landlord shall give its consent, subject to Landlord's right to
require assignee to post such other and future security as Landlord deems
appropriate.

13.1.2. If Tenant consists of more than one person, a purported
assignment, voluntary, involuntary, or by operation of law, from a majority
of persons to the others shall be deemed a voluntary assignment.

13.1.3. If Tenant is a corporation, any dissolution, merger,
consolidation, or other reorganization of Tenant, or the sale or other
transfer of a controlling percentage of the capital stock(s) of Tenant, or
the sale of 51% of the value of the assets of Tenant, shall be deemed a
voluntary assignment. The phrase "controlling percentage" means the ownership
of, and the right to vote stock possessing at least 51% of the total combined
voting power of all classes of Tenant's capital stock issued, outstanding and
entitled to vote for the election of directors. This paragraph shall not
apply to corporations the stock of which is traded through an exchange or over
the counter.

13.1.4. Tenant may assign or transfer this Lease to a corporation
of which Tenant is the sole shareholder or in which Tenant has a controlling
percentage without the necessity of obtaining Landlord's consent, provided
that Tenant personally guarantees performance by the corporation and executes
and delivers a guarantee in form satisfactory to Landlord.

<PAGE>

13.2. INVOLUNTARY ASSIGNMENT. No interest of Tenant in this Lease
shall be assignable by operation of law (including, without limitation, the
transfer of this Lease by testacy or intestacy). An involuntary assignment
shall constitute a default by Tenant, and Landlord shall have the right to
elect to terminate this Lease, in which case this Lease shall not be treated
as an asset of Tenant. If a writ of attachment or execution is levied on this
Lease, Tenant shall have ten (10) days in which to cause the attachment or
execution to be removed. If any involuntary proceeding in bankruptcy is
brought against Tenant, or if a receiver is appointed, Tenant shall have
sixty (60) days in which to have the involuntary proceeding dismissed or the
receiver removed. Each of the following acts shall be considered an
involuntary assignment:

13.2.1. If Tenant (or, if Tenant is a partnership or
consists of more than one person or entity, if any partner of the partnership
or other person or entity) is unable to meet its obligations as they become
due, or is adjudicated a bankrupt, or makes a general assignment for the
benefit of creditors, or takes the benefit of any insolvency act.

13.2.2. If a writ of attachment or execution is levied on
this Lease.

13.2.3. If, in any proceeding or action to which Tenant is
a party, a receiver or trustee is appointed with authority to take possession
of the Leased Premises.

14. DEFAULT.

14.1. TENANT'S DEFAULT. The occurrence of any of the following shall
constitute a default by Tenant:

14.1.1. Failure to pay rent, taxes, or common area costs when
due.

14.1.2. Abandonment and vacation of the Leased Premises. Failure
to occupy and operate the premises for ten (10) consecutive days shall be
deemed an abandonment and vacation, unless Landlord is notified in writing
and agrees to a longer non-operational period.

14.1.3. Failure to perform any other provision, covenant,
condition, or requirement of this Lease if the failure to perform is not
cured within fifteen (15) days after notice has been given to Tenant. If the
default cannot reasonably be cured within fifteen (15) days, Tenant shall not
be in default on this Lease if Tenant commences to cure the default within
the fifteen-day period and diligently and in good faith continues to cure the
default.

<PAGE>

Notices given under this paragraph shall specify the alleged default and
the applicable Lease provisions, and shall demand that Tenant perform the
provisions of this Lease within the applicable period of time, or quit the
premises. No such notice shall be deemed a forfeiture or a termination of
this Lease unless Landlord so elects in the notice.

14.2. LANDLORD'S REMEDIES. Upon any such event of default, all of
Tenant's fixtures, furniture, equipment, improvements, additions,
alterations, and other personal property shall remain on the Leased Premises
and during the length of such default, Landlord shall have the right to take
the exclusive possession of them and to use them, rent or charge free, or
remove the same as provided herein, until all defaults are cured or, at
Landlord's option at any time during the remaining term of this Lease, to
require Tenant to immediately remove the same. Landlord shall have the
remedies which follow if Tenant commits a default. These remedies are not
exclusive; they are cumulative in addition to any remedies now or later
allowed by Nevada law.

14.2.1. TENANT'S LEASE NOT TERMINATED. Tenant shall be liable
immediately to Landlord for all costs, including, but not limited to, the
cost of recovering possession of the Leased Premises, the cost incurred in
reletting the Leased Premises, broker's commission, expenses of remodeling
the Leased Premises required by the reletting, and like costs. Reletting can
be for a period shorter or longer than the remaining term of this Lease.
Tenant shall pay to Landlord the rent due under this Lease and on the dates
the rent is due, less the rent Landlord receives from any reletting. No act
by landlord allowed by this paragraph shall terminate this Lease unless
Landlord notifies Tenant that Landlord elects to terminate this Lease.

14.2.2. TERMINATION OF TENANT'S LEASE. Landlord can terminate
Tenant's right to possession of the Leased Premises at any time. No act by
Landlord other than giving written notice to Tenant shall terminate this
Lease. Landlord shall have the right to enter and remove from the Leased
Premises all persons and property of Tenant. Such property may be stored in a
public warehouse or elsewhere at the cost of and for the account of Tenant.
Acts of maintenance, efforts to relet the premises, or the appointment of a
receiver on landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. On
termination, Landlord has the right to recover from Tenant:

(a) The worth, at the time of the award, of the unpaid
rent that had been earned at the time of termination of this Lease;

(b) The worth, at the time of the award, of the amount
by which the unpaid rent that would have been earned

<PAGE>

after the date of termination of this Lease until the time of award exceeds
the amount of loss of rent that Tenant proves could have been reasonable
avoided;

(c) The worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of the loss of rent that Tenant proves could have been reasonably
avoided; and

(d) Any other amount, attorney's fees, and court costs necessary
to compensate Landlord for all detriment proximately caused by Tenant's
failure.

Any amount due as a result of Tenant's default shall accrue interest
from the date of the default until paid in full, at the rate of 21.6% per
annum, or the maximum allowed by law, whichever is less.

14.2.3. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. Landlord, at
any time after Tenant commits a default, can cure the default at Tenant's
cost. If Landlord at any time, by reason of Tenant's default, pays any sum or
does any act that requires the payment of any sum, the sum paid by Landlord
shall be due immediately from Tenant to Landlord at the time the sum is paid,
and if paid at a later date shall bear interest at the rate of 21.6% per
annum, or the maximum allowed by law, whichever is less, from the date the
sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum
together with interest thereon, shall be additional rent.

15. SIGNS AND ADVERTISING.

15.1. SIGNS. Tenant shall not have the right to place or permit to
be placed, any sign, marquee, awning, decoration, or other attachment to the
roof, canopy, storefront, windows (inside or outside), doors (inside or
outside), or exterior walls of the Leased Premises or at any other location
in or adjacent to the building or other improvements of which the Leased
Premises are a part, without Landlord's written consent. Landlord may,
without liability to Tenant, enter upon the Leased Premises and remove any
such sign, marquee, awning, decoration or attachment affixed in violation of
this paragraph, and Tenant agrees to pay the cost of any such removal. Tenant
agrees to purchase and install at each exterior entrance a sign that will
conform to rules and regulations set forth in Landlord's sign criteria, which
rules and regulations Tenant agrees to abide by. Tenant shall not exhibit or
affix flags, pennants, banners or similar items to the exterior of the Leased
Premises.

15.2. ADVERTISING. No advertising medium shall be utilized by
Tenant which can be heard or experienced outside the Leased Premises
including, without limitation, flashing lights,

<PAGE>

searchlights, loudspeakers, phonographs, radios, or television. Tenant shall
not display, paint, or place, or cause to be displayed, painted, or placed,
any handbills, bumper stickers, or other advertising devices on any vehicle
parked in the parking area of the property, including those belonging to
Tenant, or to Tenant's agent or any other person, nor shall Tenant distribute
or cause to be distributed in the property any handbills or other advertising
devices.

16. LANDLORD'S ENTRY ON PREMISES.

16.1. Landlord and its authorized representatives shall have the right
to enter the Leased Premises at all reasonable times, for any purpose,
including, without limitation the following:

16.1.1. To determine whether the Leased Premises are in good
condition and whether Tenant is complying with its obligations under this
Lease.

16.1.2. To do any necessary maintenance and to make any restoration
to the Leased Premises or the building and other improvements in which the
Leased Premises are located that Landlord has the right or obligation to
perform.

16.1.3. To serve, post, or keep posted any notices, including
notices of non-responsibility, required or allowed under the provisions of
this Lease.

16.1.4. To post "for lease" signs during the last sixty (60) days
of the term or during any period while Tenant is in default.

16.1.5. To show the Leased Premises to prospective brokers, agents,
buyers, or persons interested in an exchange at any time during the term, and
to prospective tenants during the final one hundred eighty (180) days of the
Lease term.

Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising out of
Landlord's entry on the Leased Premises as provided in this paragraph, except
damage resulting from the acts or omissions of Landlord or its authorized
representatives amounting to at least gross negligence.

Tenant shall not be entitled to an abatement or reduction of rent if
Landlord exercises any rights reserved in this paragraph. Landlord shall
conduct its activities on the premises as allowed in this paragraph in a
manner that will cause the least possible inconvenience, annoyance or
disturbance to Tenant.

16.2. Landlord and its authorized representatives shall

<PAGE>

have the further right to construct any additions, alterations or improvement
in the building that the Landlord may determine are desirable or necessary.

16.2.1. Landlord agrees to conduct such construction projects in
such a way as to cause Tenant as little inconvenience as is practical.

16.2.2. Landlord shall not, however, be liable in any manner for
any inconvenience, disturbance, loss of business, nuisance, or other damage
arising out of Landlord's construction as provided in this paragraph, except
damage resulting from the acts or omissions of Landlord or its authorized
agents.

16.2.3. Except in the event of an emergency, Landlord agrees to
conduct the activities authorized by this paragraph only after reasonable
notice to Tenant, and in any event with due respect for the privacy
reasonably required by the professional activities of Tenant in the Leased
Premises.

17. SURRENDER OF PREMISES; HOLDING OVER.

17.1. SURRENDER OF PREMISES. Upon expiration or termination of the
term, Tenant shall surrender to Landlord the Leased Premises and all Tenant's
improvements and alterations in good condition (except for ordinary wear and
tear occurring after the last necessary maintenance made by Tenant and
destruction to the premises covered by Paragraph 11, except for alterations
that Tenant has the right to remove or is obligated to remove.) Tenant shall
remove all its personal property within the above stated time and shall
perform all restoration made necessary by the removal of any alterations or
Tenant's personal property.

17.1.1. Landlord can elect to retain or dispose of in any manner any
alterations or Tenant's personal property that Tenant does not remove from
the premises on expiration or termination of the term as allowed or required
by this Lease by giving at least ten (10) days' written notice to Tenant.
Title to any such alterations or Tenant's personal property that Landlord
elects to retain or dispose of on expiration of the ten (10) day period shall
vest in Landlord. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of any such
alterations or Tenant's personal property. Tenant shall be liable to Landlord
for Landlord's cost for storing, removing and disposing of any alterations or
Tenant's personal property.

17.1.2. If Tenant fails to surrender the Leased Premises to
Landlord on expiration or termination of the term, Tenant shall pay all
attorney's fees and costs incurred by Landlord and agrees to indemnify,
defend and hold Landlord harmless from all damages resulting from Tenant's
failure to surrender the premises,

<PAGE>

including, without limitation, claims made by a succeeding tenant resulting
from Tenant's failure to surrender the premises.

17.2. HOLDING OVER. If Tenant, with Landlord's consent, remains in
possession of the premises after expiration or termination of the term, or
after the date in any notice given by Landlord to Tenant terminating this
Lease, such possession by Tenant shall be deemed to be month-to-month tenancy
terminable on thirty (30) days' notice given at any time by either party.
During any such month-to-month tenancy, all provisions of this Lease except
those pertaining to rent, term and option to extend shall apply. Rent during
such month to month tenancy shall be 125% of the highest minimum monthly rent
previously paid by Tenant, plus any additional rent due under the Lease.

18. MISCELLANEOUS PROVISIONS

18.1 TIME OF ESSENCE. Time is of the essence of each provision of
this Lease.

18.2. ATTORNEY'S FEES. In the event of any action or proceeding
brought by either party against the other under this Lease, the prevailing
party shall be entitled to recover the fees of its attorneys' in such action
or proceeding, including costs of appeal, if any. In addition, should it be
necessary for Landlord to employ legal counsel to enforce any of the
provisions herein contained, Tenant agrees to pay all attorney's fees and
court costs reasonably incurred.

18.3 WAIVER. No delay or omission in the exercise of any right or
remedy of Landlord on any default by Tenant shall impair such a right or
remedy or be construed as a waiver. The receipt and acceptance by Landlord of
delinquent rent shall not constitute a waiver of any other default; it shall
constitute only a waiver of timely payment for the particular rent payment
involved. No act or conduct of Landlord, including, without limitation, the
acceptance of the keys to the Leased Premises, shall constitute an acceptance
of the surrender of the Leased Premises by Tenant before the expiration of
the term. Only a notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Leased Premises and accomplish a termination of the
Lease. Any waiver by Landlord of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision
of the Lease.

18.4. NOTICE. Any notice, demand, request, consent, approval or
communication that either party desires or its required to give to the other
party or any other person shall be in writing and either served personally or
sent by prepaid, first class, Certified Mail, Return Receipt Requested, to
the other party at the following address:

<PAGE>

Landlord:

JOHN E. COLYER AND SUZANNE J. COLYER
CO-TRUSTEES OF THE COLYER REVOCABLE
LIVING TRUST
Post Office Box 8003
Incline Village, Nevada 89452

Tenant:

TCS MORTGAGE INC.
10525 VISTA SORRENTO PARKWAY SUITE 101
SAN DIEGO, CA 92121-2799

with a courtesy copy of all notices to:

STEVE GRUMER
Attorney at Law
931 Tahoe Boulevard, Suite 6
Incline Village, Nevada 89451

and (Tenant's agent)

HARVEY FENNELL
DICKSON REALTY
1030 CAUGHLIN CROSSING
RENO, NV 89509

18.5. SUCCESSORS. This Lease shall be binding upon and inure to
the benefit of the parties and their successors, except as provided in
Paragraph 13.

18.6. APPLICABLE LAW. This Lease shall be construed and
interpreted in accordance with the laws of the State of Nevada.

18.7. INTEGRATED AGREEMENT; MODIFICATION. This Lease contains all
the agreements and representations of the parties and cannot be amended or
modified except by a written agreement.

18.8. PROVISIONS. All provisions, whether covenants or conditions,
on the part of Tenant shall be deemed to be both covenants and conditions.

18.9. CORPORATE AUTHORITY. If Tenant is a corporation, it shall
deliver to Landlord on execution of this Lease a certified copy of a
resolution of its board of directors authorizing the execution of this Lease
on behalf of the corporation.

18.10. REVIEW OF LEASE. Tenant hereby acknowledges that it has read
the entire Lease and understands the provisions contained therein, and has
obtained such advice and opinions

<PAGE>

concerning the lease terms as Tenant feels necessary prior to signing the
Lease.

18.11. PARKING. Automobiles of Tenant, its employees or agents, shall
not be parked within the property except in areas designated for employee
parking. Landlord shall have the right to cause to be removed any car of
Tenant, its employees or agents, that may be parked in any area other than an
employee parking area, without liability of any kind to Tenant, its agents or
employees, and Tenant agrees to save and hold harmless Landlord, its agents
or employees, from any and all claims, losses, damages, and demands asserted
or arising in respect to or in connection with the removal of any such
automobile.

18.12. SUBORDINATION. This Lease is and shall be subordinate to any
Deeds of Trust now of record or recorded after the date of this Lease
affecting the building, other improvements, and land of which the Leased
Premises are a part; provided, however, the beneficiaries of such Deeds of
Trust shall recognize the Lease of Tenant in the event of foreclosure if
Tenant is not in default under the terms of this Lease. Tenant agrees to
execute and deliver any instrument without cost which may be deemed necessary
to further effect the subordination of this Lease to any Deed of Trust.

18.13. OFFSET STATEMENTS. Tenant shall at any time, and from time to
time not less than five (5) days of prior request by Landlord, without
charge, execute, acknowledge and deliver to Landlord a statement in writing,
in form provided by Landlord, certifying the date of commencement of this
Lease, that this Lease is unmodified and in full force and effect and further
stating the date to which the monthly rent and other charges have been paid,
and setting forth such other matters as may reasonably be requested by
Landlord.

18.14. COMPLIANCE WITH LAW. Tenant shall, at all times, maintain and
conduct its business, insofar as the same relates to Tenant's use and
occupancy of the Leased Premises, in a lawful manner and in strict compliance
with all governmental laws, rules, regulations, orders and provisions of
insurance underwriters applicable to the business of Tenant conducted in and
upon the Leased Premises.

18.15. QUIET ENJOYMENT. Tenant shall not interfered with the business
opportunity or quiet enjoyment of any of the other tenants in the property.

IN WITNESS WHEREOF, the parties hereto have executed this Lease effective
the day and year first above written.

<PAGE>

LANDLORD:

------------------------------
JOHN E. COLYER

------------------------------
SUZANNE J. COLYER
CO-TRUSTEES OF THE COLYER
REVOCABLE LIVING TRUST DATED
JULY 5, 1978

TENANT:

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

STATE OF NEVADA
:SS
COUNTY OF WASHOE

On _______________, 1992, personally appeared before me, a Notary Public,
JOHN E. COLYER and SUZANNE J. COLYER, personally known to me to be the
persons whose names are subscribed to the above instrument who acknowledged
that they executed the instrument.

- ----------------------------
Notary Public

<PAGE>

STATE OF CALIFORNIA
:SS
COUNTY OF SAN DIEGO

On 9-18-95, 1992, personally appeared before me, a Notary Public,
RICK W. JARRETT, II, personally known to me to be the
person(s) whose name(s) are subscribed to the above instrument who acknowledged
that they executed the instrument.

[NOTARY SEAL]

- ----------------------------
Notary Public

<PAGE>
EXHIBIT 10.18

PROMISSORY NOTE (#8)

$20,000.00 September 15, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Twenty Thousand Dollars ($20,000.00) with interest from the above date at the
rate of ten percent (10%) per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and, if the principal sum is
paid earlier than the date due, on the actual number of days that such
principal was outstanding. Principal and interest will be payable in six
months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

9-15-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.19

PROMISSORY NOTE (#9)

$5,000.00 September 21, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Five Thousand Dollars ($5,000.00) with interest from the above date at the
rate of ten percent (10%) per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and, if the principal sum is
paid earlier than the date due, on the actual number of days that such
principal was outstanding. Principal and interest will be payable in
six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

9-21-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.20

PROMISSORY NOTE (#10)

$30,000.00 September 28, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Thirty Thousand Dollars ($30,000.00) with interest from the above date at the
rate of ten percent (10%) per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and, if the principal sum is
paid earlier than the date due, on the actual number of days that such
principal was outstanding. Principal and interest will be payable in
six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

9-28-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
EXHIBIT 10.21

PROMISSORY NOTE (#11)

$8,000.00 September 29, 1995

FOR VALUE RECEIVED, the undersigned promises to pay to Painter Group
Corporation "PGC", at San Diego, California, or such other place as the holder
of this Note may from time to time in writing direct, the principal sum of
Eight Thousand Dollars ($8,000.00) with interest from the above date at the
rate of ten percent (10%) per annum. Interest shall be calculated on the
basis of a three hundred sixty (360) day year and, if the principal sum is
paid earlier than the date due, on the actual number of days that such
principal was outstanding. Principal and interest will be payable in
six months.

Principal and interest shall be payable in lawful money of the United
States of America and all or any part of the unpaid balance of principal may
be repaid at any time, without premium or penalty.

The entire sum shall become immediately due and payable without further
notice, demand or presentment, at the option of the holder of this Note, upon
the occurrence at any time of any one or more of the following events
("events of default"): (a) an assignment by the undersigned for the benefit
of its creditors; (b) the initiation of involuntary bankruptcy proceedings
against the undersigned, which proceedings are not dismissed within 60 days
thereafter of (c) the filing by the undersigned of a petition under the
Federal Bankruptcy Code or comparable state laws for the reorganization,
arrangement or other judicial protection upon insolvency.

This Note shall be governed by and construed in accordance with the laws
of the State of California.

TCS ENTERPRISES, INC.

9-29-95 /s/ James B. Kylstad
- -------------------- --------------------------
Date James B. Kylstad

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
DATED SEPTEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 38
<SECURITIES> 0
<RECEIVABLES> 310
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,613
<PP&E> 151
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,292
<CURRENT-LIABILITIES> 4,769
<BONDS> 0
<COMMON> 10,317
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,292
<SALES> 0
<TOTAL-REVENUES> 2,325
<CGS> 0
<TOTAL-COSTS> 2,604
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (279)
<INCOME-TAX> 6
<INCOME-CONTINUING> (285)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (285)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)

</TABLE>