BIKERS DREAM INC, SB-2/A, 1995-10-16

BIKERS DREAM INC
SB-2/A, 1995-10-16
BOOKS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE> 1

As filed with the Securities and Exchange Commission on October 16, 1995

Registration No. 33-92294

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

AMENDMENT NO. 1

FORM SB-2

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

BIKERS DREAM, INC.
(Name of Small Business Issuer in its Charter)

California
------------------------
(State of Incorporation)

5500
------
(Primary Standard Industrial Classification Code No.)

33-0140149
----------
(IRS Employer I.D. No.)

1420 Village Way, Santa Ana, California 92705
(714) 835-8464
(Address and Telephone Number of Principal Executive Office
and Principal Place of Business)

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

Dennis Campbell Copy to:
President Caldwell R. Campbell, Esq.
Bikers Dream, Inc. Day & Campbell
1420 Village Way 3070 Bristol Street, Suite 650
Santa Ana, California 92705 Costa Mesa, California 92626
(714) 835-8464 (714) 556-7716

(Name, Address and Telephone
Number of Agent for Service)
------------------------------------------------------------------

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.

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

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /x/
================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Class of Maximum Maximum
Securities Being Amount To Offering Price Aggregate Amount of
Registered Be Registered Per Unit(1) Offering Price(1) Registration Fee
---------- ------------- ----------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock 1,556,117 $4.375(2) $6,808,012(2) $2,348

Common Stock 665,000(3) $4.75 (4) $3,158,750(4) $1,090

Total Registration Fee $3,438

Previously Paid $2,348

TOTAL DUE $1,090
</TABLE>

(1) Estimated solely for the purpose of calculating the amount of the
registration fee under Rule 457.

(2) Based upon the average of the bid and asked prices for the Common
Stock on May 25, 1995, as reported by the OTC Bulletin Board.

(3) Additional shares of Common Stock being registered pursuant to this
Registration Statement.

(4) Based upon the average of the bid and asked prices for the Common
Stock on October 9, 1995, as reported by the OTC Bulletin Board.

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.

2
<PAGE> 3
BIKERS DREAM, INC.
CROSS REFERENCE SHEET
Between Items of Form SB-2 and Prospectus

<TABLE>
<CAPTION>
Registration Statement Item and Heading Prospectus Caption
- --------------------------------------- ------------------
<S> <C>
1. Forepart of the Registration Statement and Outside Front Cover Page
Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover Pages
of Prospectus

3. Summary Information and Risk Factors Prospectus Summary; Risk Factors

4. Use of Proceeds Not Applicable

5. Determination of Offering Price Not Applicable

6. Dilution Not Applicable

7. Selling Security Holders Selling Stockholders

8. Plan of Distribution Cover Page; Selling Stockholders

9. Legal Proceedings Business

10. Directors, Executive Officers, Promoters
and Control Persons Management

11. Security Ownership of Certain Beneficial
Owners and Management Principal Stockholders

12. Description of Securities Description of Securities

13. Interest of Named Experts and Counsel Legal Matters; Experts

14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities Management

15. Organization Within Last 5 Years Not Applicable

16. Description of Business Business

17. Management's Discussion and Analysis or Management's Discussion and Analysis of
Plan of Operations Financial Condition and Results of Operations

18. Description of Property Business

19. Certain Relationships and Related
Transactions Certain Transactions
</TABLE>

3
<PAGE> 4

<TABLE>
<S> <C>
20. Market Price for Common Equity and Market Price for Common Stock and
Related Stockholder Matters Related Stockholder Matters

21. Executive Compensation Management

22. Financial Statements Financial Statements

23. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure Not Applicable
</TABLE>

4
<PAGE> 5

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

PRELIMINARY PROSPECTUS DATED OCTOBER 16, 1995
SUBJECT TO COMPLETION

PROSPECTUS

BIKERS DREAM, INC.

2,221,117 Shares
of
COMMON STOCK

This Prospectus relates to 2,221,117 shares of Common Stock, without
par value (the "Common Stock"), of Bikers Dream, Inc., a California corporation
(the "Company") which are being offered for sale by certain selling
stockholders (the "Selling Stockholders."). The shares being offered hereby
include 1,626,117 outstanding shares of Common Stock and 595,000 shares of
Common Stock issuable by the Company upon the exercise of currently exercisable
options. See "Selling Stockholders."

The Company will not receive any of the proceeds from the sale of the
Common Stock by the Selling Stockholders, but will receive the exercise price
upon the exercise of options by the Selling Stockholders. The Common Stock may
be offered from time to time by the Selling Stockholders through ordinary
brokerage transactions in the over-the-counter market, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or
at negotiated prices.

The Selling Stockholders each may be deemed to be "an underwriter", as
defined in the Securities Act of 1933 (the "Securities Act"). If any
broker-dealers are used by the Selling Stockholders, any commissions paid to
broker-dealers and, if broker-dealers purchase any shares of Common Stock as
principals, any profits received by such broker-dealers on the resales of the
shares of Common Stock, may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any profits realized by the
Selling Stockholders may be deemed to be underwriting commissions. All costs,
expenses and fees in connection with the registration of the shares offered by
the Selling Stockholders will be borne by the Company. All brokerage
commissions, if any, attributable to the sale of the securities offered by the
Selling Stockholders will be borne by the Selling Stockholders. See "Selling
Stockholders."

Brokers or dealers effecting transactions in the shares should confirm
the registration of the shares under the securities laws of the states in which
such transactions occur or the existence of an exemption from such
registration, or should cause such registration to occur in connection with any
offer or sale of the shares.

The Common Stock of the Company is traded in the over-the-counter
market and quoted on the National Association of Securities Dealers Electronic
Bulletin Board ("OTC Bulletin Board") under the symbol "HOGS". The bid and
asked prices for the Common Stock on October 9, 1995, as reported by the OTC
Bulletin Board were $4.375 and $5.125 per share, respectively. To date, the
volume of trading in the Common Stock has been limited and, therefore, the
market prices for the Common Stock may not accurately reflect the value of the
Company.

THE COMMON STOCK OFFERED HEREBY IS HIGHLY SPECULATIVE AND INVOLVES A
HIGH DEGREE OF RISK. See "Risk Factors."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is ____________, 1995.
<PAGE> 6
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities and Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Northwest Atrium Building, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.

The Company intends to distribute to its stockholders annual reports
containing audited financial statements with a report thereon by independent
certified public accountants after the end of each fiscal year. In addition,
the Company may furnish to its stockholders quarterly reports for the first
three quarters of each fiscal year containing unaudited financial and other
information after the end of each fiscal quarter, upon written request to the
secretary of the Company.

The Company has filed with the Commission a registration statement on
Form SB-2 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Act. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.

No person is authorized to give any information or make any
representations other than those contained in this Prospectus and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than the
registered shares to which it relates or an offer to sell or a solicitation of
an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date hereof or
that the information contained herein is correct as of any time subsequent to
its date.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Market For Common Stock
and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . 8
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Management's Discussion and Analysis
of Financial Condition and Results of Operations . . . . . . . . . . . . 10
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 27
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Index to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

2
<PAGE> 7
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information and financial statements (including the notes thereto)
appearing elsewhere in this Prospectus.

The Company

The Company sells and services used Harley-Davidson motorcycles and
sells aftermarket parts and accessories for Harley-Davidson motorcycles.

The Company, which was formerly known as HDL Communications, was
incorporated in California in October, 1985. The Company was engaged in the
publishing business until June, 1989, when it discontinued operations. The
Company remained inactive until March 13, 1995 when it acquired Bikers Dream,
Inc., a California corporation engaged in sales and service of used
Harley-Davidson motorcycles and in retail sales of aftermarket accessories and
parts for Harley-Davidson motorcycles. Prior to its acquisition of Bikers
Dream, Inc., the Company effected a 1 for 1,363.341473 reverse split of its
outstanding Common Stock. After the acquisition, Bikers Dream, Inc. was merged
into HDL Communications and HDL Communications changed its name to Bikers Dream,
Inc. The financial statements of the Company included elsewhere herein relate
to the business which was known as Bikers Dream, Inc. prior to the merger. See
"Business."

The Company's principal executive offices are located at 1420 Village
Way, Santa Ana, California 92705, and its telephone number is (714) 835-8464.

The Selling Stockholder Offering

<TABLE>
<S> <C>
Common Stock outstanding as
of September 30, 1995(1) 5,535,920 shares

Common Stock offered by
Selling Stockholders(2) 2,221,117 shares

OTC Bulletin Board Symbol HOGS

Risk Factors The securities offered hereby involve a high degree of risk. See
"Risk Factors" and "Selling Stockholders."
</TABLE>

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

(1) Does not include 1,217,500 shares issuable upon the exercise of
outstanding options.

(2) Includes 595,000 shares issuable upon exercise of currently
exercisable options held by Selling Stockholders.

3
<PAGE> 8

Summary Financial Information

(In thousands, except share data)

The summary financial information which is set forth below should be
read in conjunction with the Financial Statements and related Notes thereto
appearing elsewhere in this Prospectus. The selected statement of operations
and balance sheet data for the fiscal years ended December 31, 1993 and 1994,
has been derived from financial statements of the Company which have been
audited by Lesley, Thomas, Schwarz and Postma, independent auditors, and
included herein. The unaudited balance sheet data as of June 30, 1995, and the
unaudited statement of operations information for the six months ended June 30,
1994 and 1995, has been derived from unaudited financial information prepared
on the same basis as the audited financial statements. In the opinion of
management, such unaudited financial information includes all adjustments,
consisting of normal recurring adjustments, necessary to present fairly the
information presented.

Statement of Operations Data:

<TABLE>
<CAPTION>
Fiscal Year Ended December 31, Six months Ended June 30,
------------------------------ -------------------------
1994 1993 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATIONS DATA:
Revenues $4,626,821 $1,436,374 $3,246,266 $1,878,290
Cost of sales 3,526,666 922,509 2,504,869 1,356,753
Selling, general,
administrative,
depreciation and
interest expenses 1,116,366 678,140 1,575,025 422,808
Net profit (loss) (13,012) (110,948) (896,779) 67,679
Net loss per share (.02) (.19) (.19) .10
Number of shares used
in computation 658,013 595,000 4,700,000 658,013
</TABLE>

<TABLE>
<CAPTION>
December 31, June 30, 1995
------------ -------------
1994 1993
---- ----
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets $1,118,649 $437,411 $2,115,125
Working Capital 249,269 (515) 467,250
Current Liabilities 653,094 265,972 1,177,479
Long Term Liabilities 151,687 136,549 179,992
Stockholders' Equity 313,868 34,890 757,654
</TABLE>

4
<PAGE> 9
RISK FACTORS

Investment in the Shares is speculative and involves a high degree of
risk. Prospective investors should carefully consider the following factors
(as well as detailed information appearing elsewhere in this Memorandum) before
deciding to purchase the Shares.

LIMITED OPERATING HISTORY; OPERATING LOSSES

Bikers Dream commenced its operations in December, 1991 and,
accordingly, has a limited operating history. Investors have only a brief
operating record to review in evaluating the performance of Bikers Dream.
Bikers Dream had losses, before provision for income taxes, of $3,126, $164,275
and $16,211 for its fiscal years ended December 31, 1992, 1993 and 1994,
respectively. For the first six months of fiscal year 1995, Bikers Dream had a
loss, before provision for income taxes, of $833,628. There is no assurance
that Bikers Dream will be profitable in fiscal 1995 or thereafter.

COMPETITION

The market in which the Company competes is highly competitive. The
main source of competition is the licensed Harley-Davidson motorcycle dealer
network which primarily sells new Harley-Davidson motorcycles, accessories and
parts and provides repair/maintenance service on all Harley-Davidson models.
The Company believes that most of the licensed Harley-Davidson dealers do not
emphasize the sale of used Harley-Davidson motorcycles or sell aftermarket
accessories and apparel. In addition, there are a substantial number of
motorcycle shops which provide aftermarket parts, services and accessories to
Harley-Davidson motorcycle owners. The Company believes that most of the
aftermarket motorcycle shops are small, privately owned businesses with limited
facilities, capital and other resources. The Company knows of only one
organization which is attempting to compete with the Harley-Davidson dealer
network on a national basis. This organization emphasizes apparel, and does
not offer the broad line of parts and accessories offered by the Company.
There can be no assurance, however, that current competitors will not expand
their facilities and operations or that new competitors with substantial
capital and other resources will not enter the market. See "Business."

DEPENDENCE ON MANAGEMENT

The success of the Company will depend, to a great extent, upon the
continued service of Dennis Campbell, its President and William R. Gresher, its
Senior Vice President and Chief Financial, Operating and Administrative
Officer. The Company has entered into a five year employment agreement with
Mr. Campbell and will maintain $3,000,000 key person insurance on his life.
The Company has also entered into a five year employment agreement with Mr.
Gresher. The Company also will depend on other members of senior management as
well as on its ability to attract, retain and motivate additional qualified
personnel. The competition for such personnel is intense, and the loss of the
services of one or more of these key employees could have a material adverse
effect on the Company. There can be no assurance that the Company will be
successful in retaining its existing key employees or in attracting and
retaining any additional personnel it requires. See "Management."

DEPENDENCE ON CONTINUED POPULARITY OF HARLEY-DAVIDSON MOTORCYCLES

The success of the Company's business is directly related to the
popularity of Harley-Davidson motorcycles. There are approximately 600,000
Harley-Davidson motorcycles currently registered in the United States. The
Company believes, based upon Harley-Davidson's current production plans, that
the number of Harley-Davidson motorcycles registered in the United States will
increase to approximately 900,000 by 1999. There can be no assurance that the
current popularity of Harley-Davidson motorcycles will continue or that the
expected production rate of new Harley-Davidson motorcycles will actually
occur. See "Business."

5
<PAGE> 10

CONTROL BY DIRECTORS

The Company's directors own an aggregate of 3,291,803 shares of Common
Stock (not including 880,000 shares issuable upon the exercise of options held
by the directors), of which 640,563 shares are being offered hereby (not
including 380,000 shares, which are being offered hereby, issuable upon the
exercise of an option held by one of the directors), or approximately 60% of
the total outstanding shares. Accordingly, the existing directors will be able
to exert significant control over the policy and affairs of the Company,
including the election of directors. In addition, Rowland W. Day II will have
the right for a period of three years after March 13, 1995, to designate two of
the members of the Company's Board of Directors (composed of a total of five
members) one of whom may be Mr. Day. See "Management - Stock Option Plans,"
"Principal Stockholders," and "Certain Transactions."

MANAGEMENT OF GROWTH

The Company's continued growth depends in part upon its ability to
expand into new geographic areas, either through the opening of new Superstores
or by increasing the number of franchised stores. There can be no assurance
that the Company will be successful in such expansion. The Company's current
expansion plans could place a significant strain on the Company's management,
working capital and financial and management control systems. The Company's
results of operations will be adversely affected if revenues do not increase
sufficiently to compensate for the increase in operating expenses resulting
from any expansion and there can be no assurance that any expansion will be
profitable or that it will not adversely affect the Company's results of
operations. In addition, the success of any expansion plans will depend in
part upon the Company's ability to continue to improve and expand financial and
management control systems, to attract, retain and motivate key employees, and
to raise additional capital. There can be no assurance that the Company will
be successful in these regards. See "Business - Business Strategy."

ADDITIONAL CAPITAL REQUIREMENTS

The Company will require substantial additional capital to implement
its expansion plan and to support future growth. Any additional equity
financing may be dilutive to stockholders, and debt financing may impose
substantial restrictions on the Company's ability to operate and raise
additional funds. There can be no assurance that additional capital will be
available or that, if available, such capital will be on satisfactory terms.

FRANCHISING ACTIVITIES

Bikers Dream has provided written notice to its three California
franchisees and one person who was negotiating to acquire a Bikers Dream
franchise of their remedies and rights under California franchise laws.
Franchisees who do not elect to pursue the remedies available to them under
California law will remain as franchisees of the Company. The Company has
acquired one operating franchise from a California franchisee for approximately
$304,000, is

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<PAGE> 11

negotiating to acquire another operating franchise from a California franchisee
for an amount not expected to exceed $140,000 and has agreed to refund the
$15,000 franchisee fee plus out-of-pocket expenses of approximately 6,000 to
a non-operating California franchisee. The Company is also negotiating to
settle a dispute with a former California franchise applicant as to the terms
of a proposed franchise, and based upon recent discussions, management
believes that the dispute can be resolved without any material adverse effect
on the Company.

In addition, the Company is currently evaluating the status of its
relationship with its seven existing non-California franchisees to determine if
any notification requirements exist regarding possible prior franchise
violations. Management believes, based upon recent discussions with these
franchisees regarding the Company's restructured franchise program, that all or
substantially all of them will accept the Company's offer and remain as
franchisees of the Company.

ABSENCE OF DIVIDENDS

The Company has not paid any cash dividends on its Common Stock since
its organization, and it is not anticipated that any cash dividends will be
paid in the foreseeable future.

LIMITED PUBLIC MARKET FOR SECURITIES OF THE COMPANY.

Although the Company's Common Stock is listed on the National
Association of Securities Dealers ("NASD") Electronic Bulletin Board, there is
expected to be only an extremely limited and sporadic trading market for the
Common Stock.

NASDAQ LISTING REQUIREMENTS; RISK OF LOW-PRICED SECURITIES

The Securities and Exchange Commission (the "Commission") recently
approved rules imposing more stringent criteria for the listing of securities
on NASDAQ, including total assets and net worth requirements of $4,000,000 and
$2,000,000, respectively. The Company does not currently satisfy NASDAQ's
listing criteria and if it is unable to satisfy such criteria in the future,
trading, if any, is and will be conducted in the over-the-counter market in the
so-called "pink sheets" or the NASD Electronic Bulletin Board. As a
consequence, investors could find it more difficult to dispose of, or to obtain
accurate quotations as to the price of, the Company's securities.

In addition, the Common Stock would be subject to Rules 15g1-15g6
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") that
imposes additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally, a person with assets in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with his or her spouse). For
transactions covered by this rule, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. Consequently, the rule may
affect the ability of broker-dealers to sell the Company's securities and may
affect the ability of investors to sell their securities in the secondary
market.

The Commission has also recently adopted regulations which define a
"penny stock" to be any equity security that has a market price (as defined) of
less than $5.00 per share or an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the regulations require the delivery, prior to the transaction,
of a disclosure schedule prepared by the Commission relating to the penny stock
market. The broker-dealer must also disclose the commissions payable to both
the broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on
the limited market in penny stocks. While many NASDAQ-listed securities are
covered by the definition of penny stock, transactions in a NASDAQ-listed
security are exempt from all but the sole market-maker provision for (i)
issuers who have $2,000,000 in tangible assets ($5,000,000 if the issuer has
not been in continuous operation for three years), (ii) transactions in which
the customer is an institutional accredited investor, or (iii) transactions
that are not recommended by the broker-dealer. In addition, transactions in a
NASDAQ security directly with a NASDAQ market-maker for such security are
subject only to the sole

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<PAGE> 12
market-maker disclosure, and the disclosure with respect to commissions to be
paid to the broker-dealer and the registered representative.

The Company's Common Stock, as of the date of this Prospectus, is
within the definitional scope of a penny stock. As a result, the regulations
on penny stocks could limit the ability of broker/dealers to sell the Company's
securities and thus the ability of purchasers of the Company's securities to
sell their securities in the secondary market.

OUTSTANDING OPTIONS

As of the date of this Prospectus, the Company had granted options to
purchase 550,000 shares of Common Stock at a price of $1.00 per share, options
to purchase 337,500 shares of Common Stock at a price of $1.50 per share and
options to purchase 330,000 shares at a price of $2.50 per share. Under the
terms of the options, the holders are given the opportunity to profit from a
rise in the market price of the Common Stock, and their exercise may dilute the
book value per share of the Common Stock. The existence of the options may
adversely affect the terms on which the Company may obtain additional equity
financing since the holders are likely to exercise their options at a time when
the Company would otherwise be able to obtain needed capital on terms more
favorable to the Company than could be obtained through the exercise of such
options. See "Description of Securities."

RULE 144 SALES

Of the shares of the Company's Common Stock presently outstanding,
approximately 5,410,920 are "restricted securities" as that term is defined by
Rule 144 promulgated under the Securities Act and in the future may be sold
only in compliance with Rule 144 or pursuant to registration under the
Securities Act or pursuant to another exemption therefrom. For so long as the
Registration Statement of which this Prospectus is a part is current and
effective, the shares owned by the Selling Shareholders and offered hereby may
be sold without regard to the volume limitations, described below, set forth in
Rule 144. Generally, under Rule 144, each person having held restricted
securities for a period of two years may, every three months, sell in ordinary
brokerage transactions an amount of shares which does not exceed the greater of
one percent (1%) of the Company's then outstanding shares of Common Stock, or
the average weekly volume of trading of such shares of Common Stock as reported
during the preceding four calendar weeks. A person who has not been an
affiliate of the Company for at least the three months immediately proceeding
the sale and who has beneficially owned shares of the Common Stock for at least
three years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above. Of such restricted shares,
approximately 175,000 are currently eligible for sale under Rule 144, an
additional 4,400,000 restricted shares will be eligible for sale under Rule 144
in March 1997, and an additional 835,000 restricted shares will be eligible for
sale in August, 1997. Actual sales, or the prospect of sales by the present
stockholders of the Company or by future holders of restricted securities under
Rule 144, or otherwise, may, in the future, have a depressive effect upon the
price of the Company's shares of Common Stock in any market that may develop
therefor, and also could render difficult sales of the Company's securities
purchased by investors herein. See "PRINCIPAL STOCKHOLDERS".

MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock has been traded in the over-the-counter
market on the OTC Bulletin Board under the symbol HOGS since April 20, 1995.
There was no active trading market for the Company's Common Stock for more than
two years prior to April 20, 1995.

8
<PAGE> 13

The following table reflects the high and low bid prices of the
Company's Common Stock as reported by the OTC Bulletin Board from April 20,
1995 to October 9, 1995. Such prices are inter-dealer quotations without
retail mark-ups, mark-downs or commissions, and may not represent actual
transactions.

<TABLE>
<CAPTION>
1995 High Low
---- ---- ---
<S> <C> <C>
Second Quarter $4.00 $1.75

Third Quarter 4.75 1.25

Fourth Quarter (through 4.75 4.375
October 9)
</TABLE>

On October 9, 1995, the bid and ask price of the Company's Common
Stock was $4.375 and $5.125 per share, respectively.

As of September 15, 1995, there were approximately 1,260 stockholders
of record.

The Company has never paid any cash dividends on its Common Stock and
anticipates that, for the foreseeable future, no cash dividends will be paid on
its Common Stock.

Payment of future cash dividends will be determined by the Company's
Board of Directors based upon conditions then existing, including the Company's
financial condition, capital requirements, cash flow, profitability, business
outlook and other factors.

SELECTED FINANCIAL DATA

The following summary of certain financial information relating to the
Company for the fiscal years ended December 31, 1993 and December 31, 1994 has
been derived from, and is qualified by reference to, the audited financial
statements of the Company included elsewhere herein and should be read in
conjunction with such audited financial statements and notes thereto. The
unaudited balance sheet information as of June 30, 1995 and the unaudited
statement of operations information for the six months ended June 30, 1995 has
been derived from unaudited financial information prepared on the same basis as
the audited financial statements. In the opinion of management, such unaudited
financial information includes all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the information presented.

<TABLE>
<CAPTION>
Fiscal Year Ended December 31, Six months Ended June 30,
------------------------------ -------------------------
1994 1993 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATIONS DATA:
Revenues $4,626,821 $1,436,374 $3,246,266 $1,878,290
Cost of sales 3,526,666 922,509 2,504,869 1,356,753
Selling, general,
administrative,
depreciation and
interest expenses 1,116,366 678,140 1,575,025 422,808
Net profit (loss) (13,012) (110,948) (869,779) 67,679
Net loss per share (.02) (.19) (.19) .10
Number of shares used
in computation 658,013 595,000 4,700,000 658,013
</TABLE>

9
<PAGE> 14

<TABLE>
<CAPTION>
December 31, June 30, 1995
------------ -------------
1994 1993 (In thousands)
---- ----
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets $1,118,649 $437,411 $2,115,125
Working capital 249,269 (515) 467,250
Current liabilities 653,094 265,972 1,177,479
Long term liabilities 151,687 136,549 179,992
Stockholders' equity 313,868 34,890 757,654
</TABLE>

MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction
with the Financial Statements and the notes thereto appearing elsewhere in
this Prospectus.

Bikers Dream, Inc, incorporated in California in December, 1991, sells
used Harley-Davidson motorcycles ("Harleys") and aftermarket parts, accessories
and related apparel to Harley enthusiasts. Until late 1993, the business
operated in a facility of approximately 2,400 square feet in Huntington Beach,
California. In December, 1993, the Company opened it's first Superstore, a
12,000 square foot facility located in an up-scale commercial center in Santa
Ana, California.

In addition to retail sales at it's Superstores, aftermarket parts,
accessories and related apparel are sold through the Company's 100 page full
color retail order catalogue.

The Company is in the process of establishing a network of franchised
Bikers Dream stores. As of September 30, 1995, the Company had sold ten Bikers
Dream franchises (three in California and seven in other states) at a price of
$15,000 per franchise, seven of which are currently open and operating. In
addition, the Company has conducted negotiations with several other potential
franchisees for the sale of a Bikers Dream franchise. The Company was advised
by its recently retained special franchise counsel that certain previous
franchise sales and offers to sell franchises were not made in compliance with
applicable federal and state franchise laws and regulations. Special franchise
counsel also advised the Company that applicable federal and state franchise
laws have broad enforcement provisions, and that under certain state laws the
potential and existing franchisees may have a private cause of action for
franchise violations. Consequently, the Company suspended its franchise sales
activities in March, 1995 while it was in the process of preparing the required
disclosure documents and complying with federal and state franchising laws for
future offers and sales of franchises. The Company, through its wholly owned
subsidiary, Bikers Dream International, Inc. ("BDII"), has filed its franchise
registrations as required by law, and as of September 30, 1995, is authorized to
sell franchises in all states and possessions of the United States except for
the following states: Hawaii, Illinois and New York. The Company restructured
its franchise program and resumed its franchise sales activities in August,
1995. Bikers Dream has provided written notice to its three California
franchisees and one person who was negotiating to acquire a Bikers Dream
franchise of their remedies and rights under California franchise laws.
Franchisees who do not elect to pursue the remedies available to them under
California law will remain as franchisees of the Company. The Company has
acquired one operating franchise from a California franchisee for approximately
$304,000, is negotiating to acquire another operating franchise from a
California franchisee for an amount not expected to exceed $140,000 and has
agreed to refund the $15,000 franchisee fee plus out-of-pocket expenses of
approximately $6,000 to a non-operating California franchisee. The Company is
also negotiating to settle a dispute with a former California franchise
applicant as to the terms of a proposed franchise, and based upon recent
discussions, management believes that the dispute can be resolved without any
material adverse effect on the Company. In addition, the Company is currently
evaluating the status of its relationship with its seven existing non-California
franchisees to determine if any notification requirements exist regarding
possible prior franchise violations. Management believes, based upon recent
discussions with these franchisees regarding the Company's restructured
franchise program, that all or substantially all of them will accept the
Company's offer and remain as franchisees of the Company. See "Business -
Franchising Activities."

10
<PAGE> 15

The Company's objective is to become the market leader in sales of used
Harleys and aftermarket parts, accessories and related apparel in the United
States. The Company's strategy for growth includes (i) targeting the opening
of one additional Superstore in 1995, seven additional Superstores in 1996 and
two additional Superstores in 1997, (ii) selling and opening an average of 16
franchised stores per year beginning in 1996 to a total of 70 franchised stores
by year-end 1999, (iii) opening, staffing and stocking a central warehouse in
1996 to replenish inventories of Superstores and franchised stores and fill
mail-order catalogue orders and (iv) publishing and distributing a new 300 page
color mail-order catalogue.

RESULTS OF OPERATIONS

The three and six months ended March 31, 1995 and June 30, 1995,
respectively as compared to the three and six months ended March 31, 1994 and
June 30, 1994, respectively.

Net sales for the second quarter ended June 30, 1995 were $1,820,650,
an increase of $565,542 or 45.1% from the second quarter ended June 30, 1994.
The increase in net sales is primarily due to the opening of the Company's
second Superstore in Dallas, Texas, increased sales in the Company-owned
Superstore in Santa Ana, California, and sales of parts and accessories to
opened and operating franchises.

Comparable store sales increased 30.9% over the same period of the
prior year. This increase in sales was due to increased sales of used
motorcycles, as authorization to sell used motorcycles was not received from
the California Department of Motor Vehicles until late March, 1994.

Net sales for the six months ended June 30, 1995 were $3,246,266 an
increase of $1,367,976 or 72.8% over the same period ended June 30, 1994. The
increase in net sales is due to the same reasons outlined above for the second
quarter results, plus the move in late 1993 into the Santa Ana Superstore.

Total gross profit for the second quarter ended June 30, 1995 was
$334,937, a decrease of $49,086, or 12.8% from the second quarter of 1994. The
decrease in gross profit is due to: 1) a higher mix of lower margin products
such as used motorcycles, 2) initial establishment of reserves for inventory
shrinkage, and obsolescence, and 3) the result of an adjustment to the
perpetual inventory records as a result of implementing a cycle count procedure
during the second quarter in the Company's Santa Ana Superstore. The latter
two items account for approximately 10 percentage points of the gross profit
rate erosion which occurred between the two quarters. As a result of this
inventory adjustment, the Company initiated a physical inventory of the Santa
Ana Superstore in mid August. This physical inventory highlighted the need for
management to thoroughly review all inventory movement transactions and their
effects on the general ledger, and immediately take action to modify or change
those procedures which affect the accuracy of the financial statements. This
has also prompted management to accelerate it's plans to replace the current
point of sale and perpetual inventory systems with the integrated financial
systems package which was purchased during the second quarter of this year.
Management has not modified the financial statements for the quarter ended June
30, 1995 as a result of the physical inventory, and believes that the current
financial statements conservatively reflect the results of operations and
inventory balances as of June 30, 1995.

Gross profit for the first half of 1995 was $741,397, an increase of
$219,860 or 42.2% over the same period in 1994. The gross profit rate for the
first six months of 1995 was 22.8% as compared to 27.8% for the same period
last year. The change in gross profit rate was caused mainly by the mix
changes and the inventory reserves which relate to the second quarter 1995
activities mentioned previously. The inventory reserve and cycle count policy
change reduced the gross profit rate by 6 percentage points for the six month
period ended June 30, 1995.

Selling, general and administrative expenses were $999,042 for the
second quarter ended June 30, 1995 which represents an increase of $752,048 or
304.5% from the comparable period for the prior year. The increase is due to
higher costs associated with: 1) the opening of the second Superstore located
in Texas; 2) accounting and legal fees relating to filings with the SEC to
register the Company's newly issued shares in conjunction with its reverse
acquisition of HDL Communications on March 13, 1995, 3) legal fees relating to
the re-registration and approval for the Company to continue selling franchises
throughout the United States, 4) the establishment of an in-house accounting
function which was previously performed by an outside service bureau, and 5) an
increase in the number of employees to support the third Company-owned
Superstore that opened in the third quarter of 1995.

11
<PAGE> 16

Selling, general and administrative expenses were $1,553,629 for the
first six months of 1995, an increase of $1,134,424 or 270.6% over the same
period in 1994. The increase was due to the same reasons as outlined above for
the second quarter 1995, plus additional costs associated with a publicly
traded company which commenced in March, 1995 following the reverse acquisition
of HDL Communications.

Depreciation and amortization expense was $25,823 and $6,238 for the
second quarter ended June 30, 1995 and 1994, respectively. The increase of
$19,585 or 314.0% is due almost entirely to the acquisition of new equipment
and leasehold improvements to support the new Company-owned Dallas Superstore,
and the newly acquired computer and software required to operate the in-house
accounting system.

Depreciation and amortization expense was $33,639 for the first six
months ended June 30, 1995. This increase of $21,163 or 169.6% from the same
period last year was due to the same items previously discussed in the results
for the second quarter ended June 30, 1995.

The provision for income taxes was $104,804 for the quarter ended June
30, 1995 as compared to $39,150 for the same period last year. The provision
for income taxes in the second quarter ended June 30, 1995 results from the
Company's decision to fully reserve the previously recognized Deferred Tax
Asset related to its net operating loss carry forwards. The Company's
management has concluded that, based upon its assessment of all available
evidence, the future benefit of this asset cannot be projected accurately at
this time. The major underlying reason which led to this conclusion is the
uncertainty of the Company's ability to raise sufficient debt and equity
capital necessary to expand the number of Company-owned Superstores and absorb
the corporate overhead structure costs.

The income tax provision for the first half of 1995 was $63,151, an
increase of $32,101 or 103.4% over the same period in 1994. This increase
results from the Company's decision to fully reserve for the Deferred Tax Asset
as previously discussed.

The net loss for the quarter ended June 30, 1995 was $791,843 as
compared to a net profit of $90,646 for the quarter ended June 30, 1994. The
loss for the second quarter 1995 was due to the continued investment by the
Company to grow the business through the opening of new Superstores in various
parts of the U.S. as well as the costs associated with the reverse acquisition
of HDL Communications in March, 1995 and becoming a publicly traded company,
and the write off of the Deferred Tax Asset.

The net loss for the first six months ended June 30, 1995 was $896,779
versus a profit of $67,679 for the same period in 1994. The loss for the first
half of 1995 is due to continued investment by the Company to grow the number
of Superstores and franchises as identified in previous commentary on the
second quarter ended June 30, 1995, and the Company's decision to fully reserve
for the Deferred Tax Asset.

While the Company does not expect inflation to have a material impact
upon its operating results, there can be no assurance that inflation will not
affect the Company's business in the future. The Company expects to mitigate
inflationary increases through securing additional purchase volume discounts as
net sales increase through the opening of future Superstores and franchises.

The fiscal year ended December 31, 1994 as compared to the fiscal year
ended December 31, 1993.

Net sales for the fiscal year ended December 31, 1994 were $4,626,821,
an increase of $3,190,447 or 222% from the fiscal year ended December 31, 1993.
The increase in net sales is primarily due to the move from the Company's
former location consisting of approximately 2,400 square feet to its new
Superstore location consisting of nearly 12,000 square feet. In addition, the
Company was authorized by the California Department of Motor Vehicles to sell
used motorcycles beginning in the second quarter of 1994, whereas it had no
such authorization during 1993.

Total gross profit for the fiscal year ended December 31, 1994 was
$1,100,155, an increase of $586,290 or 114% from the fiscal year ended December
31, 1993. The increase in gross profit is due primarily to higher sales
volume. The decline in the gross profit rate from 35.8% of net sales for
fiscal year ended December 31, 1993 to 23.8%

12
<PAGE> 17
for the fiscal year ended December 31, 1994 is due to: (i) promotional sales
programs in the beginning of 1994 to reduce inventories prior to the move to
the new Superstore facility during the first quarter of that year, and (ii) the
inclusion of used Harley-Davidson motorcycle sales, which began in the second
quarter of 1994, whose gross profit is inherently lower than that of parts,
accessories and service labor.

Selling, general and administrative expenses were $1,121,484 for the
fiscal year ended December 31, 1994, which represents an increase of $479,498
or 74.7% from the same period in 1993. The increase is due to higher occupancy
costs associated with the move to the new location and higher personnel costs
relating to an increase in the number of employees to support the opening of
new Company-owned Superstores and franchises in future periods.

Depreciation and amortization expense was $20,115 and $16,004 for the
fiscal years ended December 31, 1994 and December 31, 1993, respectively. The
increase of $4,111 or 25.7% is due almost entirely to the acquisition of new
equipment and leasehold improvements for the new Company-owned Santa Ana
Superstore.

Franchise income was $45,000 for the fiscal year ended December 31,
1994, the first fiscal year in which franchises were sold.

The net loss for the fiscal year ended December 31, 1994 was $13,012,
as compared to the net loss of $110,948 for the comparable period in 1993. The
loss in 1994 was reduced from that incurred in 1993 due to (i) the increase in
gross profit dollars due to volume, (ii) management control over the growth
rate of operating expenses versus that of gross profit, and (iii) the sale of
three franchises which did not occur in 1993.

LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has relied upon equity capital to sustain its
present growth. In connection with the Company's reverse acquisition of HDL
Communications on March 13, 1995, the Company received $1.4 million from the
private placement of common stock.

The Company intends to finance future expansion through a combination
of equity and debt financing. The Company is aggressively pursuing various
alternatives to obtain either debt or equity capital to continue its growth.
Although the Company received $1,225,000 from the private placement of its
convertible promissory notes in June and July, 1995, such amount was less than
anticipated and is not sufficient to fund all future planned expansion. The
Company cannot, therefore, project its success of future endeavors with a high
degree of accuracy nor can it project the related impact on the business of not
securing appropriate levels of financing.

BUSINESS

The Company operates four retail outlets known as Bikers Dream
Superstores ("Superstores"), selling quality used Harley- Davidson motorcycles
("Harleys") and a full range of aftermarket parts, accessories and service to
Harley enthusiasts. The Company is not a licensed Harley-Davidson dealer and
does not sell new Harley-Davidson motorcycles or buy any products or services
directly from the Harley-Davidson Company. The aftermarket for parts and
accessories for Harleys is believed to be quite large, although there is no
known public source of sales statistics, since there are more than 600,000
Harleys currently registered in the United States and, based upon
Harley-Davidson Company's current production plans, this number will increase
to approximately 900,000 by 1999. New Harleys are in high demand, with
customers waiting up to one year or more to buy one, and many customers have
turned to the resale market to satisfy their desire for a Harley. The Company
believes that Harley customers typically spend between $4,000 and $10,000 on
their newly acquired Harleys in the form of custom upgrades and accessories.

13
<PAGE> 18

The Company's Superstores are located in Santa Ana, California,
Thousand Oaks, California, Dallas, Texas and Tampa Bay, Florida. The Company
is also establishing a network of franchised Bikers Dream stores, six of which
have been opened to date. Sales of aftermarket parts and accessories are also
made through the Company's 100 page full color mail order catalogue.

The Company intends to actively pursue a strategy of business growth
that involves the opening of up to 10 additional Superstores by mid 1997 and
the sale and opening of up to approximately 60 additional franchised Bikers
Dream stores by the end of 1999. In addition, the Company plans to open and
stock a central warehouse to replenish inventories of Superstores and
franchised stores and to fill orders received from mail-order catalogue
customers.

BIKERS DREAM SUPERSTORES

General. The Company sells and services used Harleys and offers a
full range of aftermarket parts, accessories and apparel at discount prices to
Harley enthusiasts. Most current providers of aftermarket parts, accessories
and services to Harley owners are small, independently owned shops, sometimes
referred to as "grease shops," ranging in size from approximately 1,500 to
4,000 square feet and located in older facilities. These shops have limited
space for display of motorcycles and accessories which appeal to today's
typical Harley customer. In addition, most Harley dealers have few, if any,
new Harleys in their showroom since they have all been pre-sold, nor do they
carry a large number of used Harleys. The Company has designed its Bikers
Dream Superstores to address the needs of the new breed of Harley customer,
sometimes referred to as a "rich urban biker" or "RUB," who purchases a
motorcycle primarily for recreational purposes and has an average household
income of approximately $54,000.

The Company currently owns and operates Bikers Dream Superstores
located in Santa Ana, California, Thousand Oaks, California, Dallas, Texas and
Tampa Bay, Florida. The Dallas and Tampa Bay Superstores opened in April 1995
and July, 1995, respectively. The Santa Ana, Thousand Oaks, Dallas and Tampa
Bay Superstores are approximately 12,000, 4,200, 10,000 and 10,500 square feet,
respectively. The large Superstores (approximately 10,000 square feet) are up
to 75% larger than most Harley dealers and other retail outlets.

Each Superstore features a large showroom for displays of merchandise,
warehousing for inventory and a repair and customizing shop. The Santa Ana
Superstore also contains administrative and franchise training offices. The
showroom is organized to allow variation in location of the displays to
accommodate customer traffic flow within the store and heighten interest. Some
in-store displays have been installed in the showroom by distributors and
manufacturers to present their products in a trade show mode, which enables
Bikers Dream to display products at manufacturers' expense. The area
designated as the warehouse offers adequate space to stock and store quantities
of all items on display in the showroom, along with numerous other parts items
not displayed, which are in constant demand. The area designated as service
and assembly is large enough to house a staff of mechanics and service
personnel and is capable of accommodating the custom building and rebuilding of
motorcycles. The forward area of the showroom is reserved for a display of
used Harley-Davidson motorcycles for sale.

Used Harley Sales. Each large Superstore typically has 30 or more
quality used Harleys in its showroom at all times. Approximately 70% of these
are 1990 to 1995 model Harleys, approximately 20% are 1984 to 1990 models and
the remaining 10% are pre-1984 models and an occasional classic. Most of the
Harley models on display feature the "Evolution" powertrain which the Harley-
Davidson Company began producing in 1984. Approximately 80% of the used
Harleys on display in a Superstore showroom are owned by the Company and the
remaining 20% are taken on consignment.

Sources for used Harley purchases are numerous and include individual
private sellers, regional brokers, in-house buyers and regional/national
motorcycle sales publications. The Company buys used Harleys taking into
consideration the wholesale value of the motorcycle and the costs of buying,
delivering, repairing, reconditioning and otherwise making the motorcycle ready
for sale. The Company believes that it will not encounter significant
difficulty in maintaining its inventory of used Harleys, although prices of
used Harleys are subject to market variations.

Approximately 20% of the used Harleys sold by the Company have been
taken on consignment. Under this arrangement, the Company receives a flat fee
plus the difference between the actual sales price and the price agreed upon by
the Company and the consignee. Consignments are obtained through local ads,
referrals and ongoing consignee relationships.

14
<PAGE> 19

The Company utilizes an on-line video system in each of its
Superstores which allows customers to view, in real time full motion video, all
models of Harley motorcycles and other custom items such as custom paint jobs
available at each Superstore and at participating Bikers Dream franchise
stores. Management believes that this is a new concept in retail sales. The
new video system has been favorably received by the Company's customers.

As part of its commitment to sell quality used Harleys, the Company's
service department inspects each motorcycle in accordance with a standard
inspection list. All safety-related items such as brakes, lights and tires,
are repaired as needed. Other repairs and reconditioning, if required, can
also be done by the Company's service department. Certain specialty work is
frequently less costly when performed by independent shops, however, and the
Company utilizes outside services as necessary. All motorcycles are thoroughly
detailed before they are placed on the showroom floor.

The Company offers financing through several financing sources at
rates which the Company believes are competitive with other financing sources
for motorcycles. The Company also offers third party warranty policies on the
late model Harley motorcycles it sells. The warranty policies are normally
sold at a premium over dealer cost. Motorcycle insurance is also offered
through several national companies. The Company receives a fee of up to 20% of
the annual insurance premium. Warranties and insurance are also often
financed. The Company receives a participation fee of up to 4% of the total
amount financed.

Customers may also obtain a Bikers Dream credit card which can be used
to purchase motorcycles as well as parts, accessories and clothing. The cards
are issued and underwritten by a leading national financial institution and can
be used only at Superstores and participating Bikers Dream franchise stores.

Aftermarket Products. The Company stocks and sells, at discount
prices, an extensive range of aftermarket products for the Harley enthusiast.
Many of these products are not offered by Harley dealers because of sourcing
restrictions in their dealer agreements, or by independent retailers who
typically carry a limited range of products for a variety of motorcycles.
According to published reports, only 23% of the independent retailers carry
aftermarket parts and accessories for Harleys. The Company currently offers as
many as 10,000 different parts and accessories, including replacement parts for
Harley motorcycles. The Company does not buy any products directly from the
Harley-Davidson Company.

The Company has supply arrangements in place with most of the major
motorcycle aftermarket parts and accessories suppliers. Under these
arrangements, none of which are the subject of a formal agreement, the Company
is entitled to quantity discounts on a distributor-type basis, allowing the
Company to sell certain products at dealer price levels to the Company's
franchisees and other dealers. The Company purchases its parts and accessories
on a COD basis and considers its relationship with its suppliers to be good.
No single company supplies more than 20% of the products sold by the Company.
Management believes that the loss of any supplier would not have a material
adverse effect on the Company because other suppliers could be relied upon to
meet the Company's requirements at a comparable cost.

The Company sells a line of accessories under the brand names Dream
Products and Bikers Dream Products. Some of these products such as Dream Seats
(custom motorcycle seats) are designed in-house, and some are existing products
which are private labeled. The Company, pursuant to arrangements with the
manufacturers, also blister packs or repackages certain items using the Bikers
Dream logo. The Company plans to expand its proprietary product line and
utilize blister packaging as merchandising and sales warrant.

Catalogue Sales. The Company has published a 100 page full color
mail-order catalogue of parts and accessories. The catalogues are marketed to
existing customers, at trade shows, in advertising materials and by word of
mouth. The catalogues are sold for a nominal amount plus postage and handling.
Approximately 5,000 catalogues were distributed in 1994. Catalogue generated
mail-order sales amounted to approximately $580,000 in fiscal 1994.

A newer and larger full color Bikers Dream catalogue is currently in
development and is scheduled for publication and distribution in 1995. The new
catalogue is expected to have approximately 300 pages and will, like the first
catalogue, be sold to prospective customers to defray its cost of development,
printing and distribution.

Service Department. The service department of each Superstore
services and repairs customer-owned Harleys as well as the used Harleys on
display in the showroom. The service department can also install parts and
accessories sold in the Superstore.

15
<PAGE> 20

Computerized Information System. The Company utilizes a
non-proprietary retail point of sale software system which the Company's
management believes satisfies all of the operations and day-to-day requirements
of the Company's aftermarket motorcycle business. All of the Company's
franchised stores also use the system. The system's capabilities include
inventory control, management reporting and point of sales information.

BUSINESS STRATEGY

The Company's objective is to become the market leader in sales of
aftermarket Harley motorcycles, parts, accessories and related apparel in the
United States. There are nearly 600,000 Harleys currently registered in the
United States and, based upon Harley-Davidson Company's current production
plans, this number is expected to increase to 900,000 by 1999. The Harley
biker of today is typically a male in his late thirties, with a household
income of approximately $54,000 and who is purchasing a motorcycle primarily
for recreational purposes. The Company has designed its Superstores and
developed a marketing plan to address the needs of this new breed of Harley
customer. The Company's strategy includes the following elements:

- Targeting the opening of one additional Superstore in
1995, seven additional Superstores in 1996 and two
additional Superstores in 1997 in major
metropolitan areas with a high concentration of
motorcycle registrations, such as San Jose,
California, Los Angeles, California, San Diego,
California, Reno, Nevada, Houston, Texas and Daytona,
Florida.

- Maintaining an adequate supply of quality used
Harleys for sale in each Superstore.

- Opening approximately three previously sold
franchised Bikers Dream stores in 1995 and selling
and opening an average of 16 franchised Bikers Dream
stores per year beginning in 1996 in mid-size market
areas not served by Superstores to a total of 70
franchised stores by year-end 1999.

- Opening, staffing and stocking a central warehouse in
1996 to replenish inventories of Superstores and
franchised stores and fill mail-order catalogue
orders.

- Publishing and distributing a new 300 page all color
mail-order catalogue to customers in areas not served
by Superstores or franchised Bikers Dream stores.

MARKETING AND ADVERTISING

There are currently in excess of 600,000 Harleys registered in the
United States and, based upon Harley-Davidson Company's current production
plans, this number is expected to grow to 900,000 by 1999. New Harleys are in
high demand, with customers waiting up to one year or more to buy a new one.
Many customers have turned to the resale market to satisfy their desire for a
Harley. The Company believes that Harley customers typically spend between
$4,000 and $10,000 on accessories to customize and upgrade their newly acquired
Harleys.

The Company markets exclusively to Harley customers, and its
Superstores and franchised stores have been designed to appeal to the new breed
of Harley customer. The Superstores feature a large inventory of quality used
Harleys and an extensive range of aftermarket parts and accessories.

The Company advertises its products in electronic and print media most
frequently seen or heard by the Company's targeted customer group. Catalogue
sales and retail locations are advertised nationally in various specialty
motorcycle magazines. Motorcycles are advertised in local trade publications
and in the automotive classified section of local newspapers. Direct mail,
local radio and, occasionally, local cable television are used during certain
promotions and to support special events.

16
<PAGE> 21
CENTRAL WAREHOUSE

The Company plans to stock, staff and operate a strategically located
warehouse to function as a central distribution plant for its Superstores and
franchise outlets and to fill orders from its mail-order catalogue customers.
The central warehouse is expected to improve order fulfillment rates. Although
the Company anticipates that the central warehouse will be located in Reno,
Nevada, the site selection has not been finalized.

FRANCHISING ACTIVITIES

The Company is in the process of establishing a network of franchised
Bikers Dream stores. The franchise stores, which are modeled after the
Company-owned Superstores, will be located throughout the United States to
service the mid-size markets not served by Superstores. The Company has sold
ten Bikers Dream franchises (three in California and seven in other states)
at a price of $15,000 per franchise, seven of which are currently open and
operating. In addition, the Company is conducting negotiations with
several other potential franchisees for the sale of a Bikers Dream franchise.

The Company has marketed its franchises primarily by advertising in
motorcycle and specialty magazines. The franchise advertisement has appeared
in a portion of a larger general advertisement featuring the Company's
products, service and mail-order catalogue. The majority of responses to the
franchise advertisements have been from Harley owners and enthusiasts. The
Company intends to advertise in publications such as the Wall Street Journal
and other national publications such as Inc. Magazine, The Robb Report, The
DuPont Registry and Bigtwin.

Each franchisee receives an exclusive territory for which the
franchisee pays an initial franchise fee and monthly royalties based on sales.
The Company provides franchisees with in-house and on site training and a copy
of the Company's franchise operations manual, ongoing newsletters, site
support and other operational marketing assistance.

The Company was advised by its recently retained special franchise
counsel that certain previous franchise sales and offers to sell franchises
were not made in compliance with applicable federal and state franchise
laws and regulations. Special franchise counsel also advised the Company that
applicable federal and state franchise laws have broad enforcement provisions,
and that under certain state laws the potential and existing franchisees may
have a private cause of action for franchise violations. Consequently, the
Company suspended its franchise sales activities in March, 1995 while it was in
the process of preparing the required disclosure documents and complying with
federal and state franchising laws for future offers and sales of franchises.
The Company, through its wholly owned subsidiary, Bikers Dream International,
Inc. ("BDII"), has filed its franchise registrations as required by law, and as
of September 30, 1995, is authorized to sell franchises in all states and
possessions of the United States except for the following states: Hawaii,
Illinois, and New York. The Company restructured its franchise program and
resumed its franchise sales activities in August, 1995. Bikers Dream has
provided written notice to its three California franchisees and one person who
was negotiating to acquire a Bikers Dream franchise of their remedies and
rights under California franchise laws. Franchisees who do not elect to pursue
the remedies available to them under California law will remain as franchisees
of the Company. The Company has acquired one operating franchise from a
California franchisee for approximately $304,000, is negotiating to acquire
another operating franchise from a California franchisee for an amount not
expected to exceed $140,000 and has agreed to refund the $15,000 franchisee fee
plus out-of-pocket expenses of approximately $6,000 to a non-operating
California franchisee. The Company is also negotiating to settle a dispute
with a former California franchise applicant as to the terms of a proposed
franchise, and based upon recent discussions, management believes that the
dispute can be resolved without any material adverse effect on the Company. In
addition, the Company is currently evaluating the status of its relationship
with its seven existing non-California franchisees to determine if any
notification requirements exist regarding possible prior franchise violations.
Management believes, based upon recent discussions with these franchisees
regarding the Company's restructured franchise program, that all or
substantially all of them will accept the Company's offer and remain as
franchisees of the Company.

COMPETITION

The market in which Bikers Dream competes is highly competitive. The
main source of competition is the licensed Harley-Davidson motorcycle dealer
network which primarily sells new Harley-Davidson motorcycles, accessories and
parts and provides repair/maintenance service on all Harley-Davidson models.
Bikers Dream believes that most of the licensed Harley-Davidson dealers neither
emphasize nor use marketing or business practices and procedures comparable to
those used by the Company in the sale of used Harley-Davidson motorcycles or
the sale of aftermarket accessories and apparel. In addition, there are a
substantial number of independent motorcycle shops which provide

17
<PAGE> 22
aftermarket parts, services and accessories to Harley-Davidson motorcycle
owners. Bikers Dream believes that most of the aftermarket motorcycle shops
are small, privately owned businesses with limited facilities, capital and
other resources.

PATENTS, LICENSES AND TRADEMARKS

The Company has no patents or licenses. The Company has obtained a
service mark registration in the United States for the mark "BIKERS DREAM."

REGULATION

The Company's operations are subject to regulation, supervision and
licensing under various federal, state and local statutes, ordinances and
regulations. Compliance with existing laws and regulations applicable to the
Company has not had a material adverse effect on the Company's operations.
Management believes that it maintains all requisite licenses and permits and is
in substantial compliance with all applicable federal, state and local laws and
regulations.

EMPLOYEES

As of September 30, 1995, the Company had 72 full-time employees.

PROPERTIES

The Company leases approximately 12,000 square feet of space in Santa
Ana, California, approximately 10,000 square feet of space in Dallas, Texas,
approximately 10,500 square feet of space in Tampa Bay, Florida and
approximately 4,200 square feet in Thousand Oaks, California. The Company pays
rent of approximately $10,970 per month under its Santa Ana lease and
approximately $8,000 per month under its Dallas lease. The Company has agreed
to pay monthly rent under its Tampa Bay lease of approximately $4,000 during
the first year and approximately $8,000, $8,400, $8,800 and $9,200 during each
of the remaining four years of the lease. The Company has agreed to pay
monthly rent under its Thousand Oaks lease of approximately $3,500 during the
first two years and $4,1000, $4,200 and $4,410 during each of the remaining
three years of the lease. The Santa Ana lease expires on August 31, 2003, with
two successive five year options to renew, the Dallas lease expires on December
31, 1999 with two successive five year options to renew, the Tampa Bay lease
expires on May 31, 2000 with a five year option to renew and the Thousand Oaks
lease expires on June 30, 1999. All of the leased property is in good
condition.

LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceedings.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's current management consists of the following persons,
all of whom have held office since March 13, 1995 (the date of the acquisition
by the Company of Bikers Dream, Inc.) other than Rowland W. Day II who has been
a director since October, 1985 serving in various capacities, including
President, from October, 1985 until March 13, 1995.

<TABLE>
<CAPTION>
Name Office
---- ------
<S> <C>
Dennis Campbell President and Director
William R. Gresher Senior Vice President, Chief Financial, Operating and
Administrative Officer and Director
Jeffrey L. Simons Executive Vice President
Richard E. King, Jr. Secretary and Director
Rowland W. Day II Director
</TABLE>

18
<PAGE> 23

The Company has agreed for a period of three years commencing March
13, 1995 to nominate and elect two members of the Company's Board of Directors
(to be composed of a total of five members) designated by Rowland W. Day II,
one of whom may be Mr. Day and both of whom shall be "independent directors"
(i.e., directors who are not also officers and/or employees of the Company).
As of the date of this Prospectus, Mr. Day has not designated anyone other than
himself to serve on the Board of Directors.

Directors are elected on an annual basis at the Company's annual
meeting of stockholders. The present term for each director will expire at the
next annual meeting of stockholders or at such time as their successor is duly
elected and qualified. Executive officers are elected annually and, except to
the extent governed by employment contracts, serve at the discretion of the
Board of Directors.

DENNIS CAMPBELL, President, Director and founder of Bikers Dream.
Prior to founding Bikers Dream in 1990 as a sole proprietorship and
incorporating the business in 1991, Mr. Campbell had extensive experience in
developing, opening, and operating automobile parts and accessories stores. In
1983, Mr. Campbell opened Vee Dub Parts Unlimited, which offered custom parts
and accessories for Volkswagen automobiles. Within one year of its inception,
Vee Dub Parts Unlimited was one of the industry leaders on a worldwide basis.
In 1985, Mr. Campbell started Vee Dub Parts Unlimited Machine Shop, a division
of Vee Dub Parts Unlimited, dedicated to building engines, custom machining,
and development of signature series hi-flow racing heads. In 1986, Mr.
Campbell purchased Ed's Machine, a crankshaft manufacturing company, which
provided a complete line of high performance crankshafts for Volkswagen
automobiles. In 1987, Mr. Campbell sold Denmar Enterprises, Inc., a holding
company for Vee Dub Parts Unlimited and Ed's Machine. From 1987 to 1990, Mr.
Campbell was employed as Finance Manager of Bill Maxey Toyota in Huntington
Beach, California.

WILLIAM R. GRESHER, Senior Vice President, Chief Financial, Operating
and Administrative Officer and Director. Prior to joining the Company on a
full time basis in September, 1995, Mr. Gresher was Vice President-Finance of
Allergan, Inc. Irvine, California. Mr. Gresher served in various financial
executive positions with Allergan since early 1990. Immediately prior
to becoming Vice President-Finance of Allergan, he was Vice President
and Controller of Allergan Europe, based in the U.K. Prior to joining
Allergan he held various financial executive positions with Baxter
International, Deerfield, Illinois for 10 years, Bell & Howell, in Lincolnwood,
Illinois and Tokyo, Japan, and earlier as a Senior Auditor with Arthur Anderson
& Co., certified public accountants, at the Chicago office for 5 years. Mr.
Gresher retains his credential as a certified public accountant and is an
active member of the American Institute of Certified Public Accountants and the
California Society of Certified Public Accountants. He holds Bachelor of
Science and Master of Business Administration degrees from Northern Illinois
University.

JEFFREY L. SIMONS, Executive Vice President. Prior to joining the
Company in 1995, Mr. Simons served as Director of Retail Operations and
Merchandising with Easyriders Franchising, Inc. where he was responsible for
all facets of franchise development and implementation, including concepts,
planning, operations, systems, staffing, training, and merchandising. From
1982 to 1994, Mr. Simons ascended through various divisions in
Harley-Davidson, Inc., and Harley-Davidson International, Inc. where he was
involved in testing and development, engineering and powertrain performance,
international sales, marketing, and distribution. He was also responsible for
the strategic planning, implementation, and management of all Harley-Davidson
International "Designer Store" franchise development, renovation, and
merchandising programs outside of North America. During his career with
Harley-Davidson, he spent extensive periods of time overseas engaged in
negotiation, sales, and communication with independent distributors, subsidiary
management, and the franchise dealers network.

RICHARD E. KING, JR., Secretary and Director. Mr. King is a
practicing attorney in Newport Beach, California. He has practiced in the area
of business and corporate law, corporate finance, tax and international tax,
and estate planning for 32 years. He has also served as President and Chief
Executive Officer of two corporations in the construction and sports industries
and has served on the Board of Directors of a number of corporations. Mr. King
is a member of the California, Pennsylvania, Federal District Courts and U.S.
Tax Court bars. He holds a Bachelor of Arts degree from Denison University,
Granville, Ohio and a Juris Doctorate from the University of Michigan Law
School, Ann Arbor.

ROWLAND W. DAY II, Director. Mr. Day is a partner in the law firm of
Day & Campbell in Costa Mesa, California. He has practiced in the area of
business and corporate law and corporate finance for 12 years. Mr. Day is a
member of the California bar. He holds a bachelor of arts degree from
California State University at Fullerton and a Juris Doctorate from Whittier
Law School.

19
<PAGE> 24

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has established a compensation committee consisting of the
two members of the Board who are not otherwise affiliated with the Company.
The Company currently has no other committees of its Board of Directors, but it
is anticipated that standing audit and stock option committees will be
established. It is expected that the audit committee will consist of members
of the Board who are not otherwise affiliated with the Company.

COMPENSATION OF DIRECTORS

The Company currently has no standard compensation arrangements with
its directors. It expects it will pay an annual fee and/or per meeting fees to
each of its directors who is not an employee of the Company, but such amounts
have not yet been determined. All directors of the Company are eligible to
receive options under the Company's stock option plan. See "Management - Stock
Option Plans."

EXECUTIVE COMPENSATION

The following table sets forth certain summary information regarding
compensation paid by the Company for services rendered during the last fiscal
year by the chief executive officer of the Company. There are no other
executive officers whose annual salary and bonus compensation exceeded
$100,000.

<TABLE>
<CAPTION>
Annual Compensation
Name and Principal ------------------- Other
Position Salary Bonus Compensation
-------- ------ ----- ------------
<S> <C> <C> <C>
Dennis Campbell $141,277 $9,000 $2,000(1)
President
</TABLE>

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

(1) Allowance for automobile expenses.

EMPLOYMENT AGREEMENTS

The Company has entered into a five year employment agreement with
Dennis Campbell effective as of September 1, 1994, pursuant to which Mr.
Campbell is entitled to receive an annual salary of $120,000, a monthly car
allowance of $500, a bonus of $50,000 for each new Bikers Dream Superstore that
is opened and a commission of 20% of the franchise fee for each Bikers Dream
franchise sold by the Company that is opened. The Company has agreed to pay
the premiums on a disability policy providing income continuation of 60% of Mr.
Campbell's salary in the event he becomes disabled and has also agreed to pay
the premiums on a term life insurance policy providing for death benefits in
the amount of $500,000 to a beneficiary designated by Mr. Campbell. Upon
termination of the agreement by the Company without good cause (as defined in
the agreement), Mr. Campbell is entitled to receive an amount equal to four
years annual salary at the then current rate of compensation.

The Company has entered into a five year employment agreement with
William R. Gresher effective as of September 25, 1995, pursuant to which Mr.
Gresher is entitled to receive an annual salary of $185,000. Mr. Gresher is
also entitled to receive a bonus of 5% of the first one million dollars of
annual net after tax profits and 2% of the second one million dollars of annual
net after tax profits of the Company. The Company has agreed to grant Mr.
Gresher options to purchase, at an exercise price of $2.50 per share, 300,000
shares of Common Stock, 240,000 of which shall be granted under the Company's
Incentive Stock Option Plan. The options are immediately vested as to 50,000
of such shares and vest over a five year period as to the balance of such
shares. The Company has agreed to pay the premiums on a term life insurance
policy providing for death benefits in the amount of $500,000 to a beneficiary
designated by Mr. Gresher. Upon termination of the agreement by the Company
without good cause (as defined in the Agreement) during the first 12 months of
employment, Mr. Gresher is entitled to receive severance pay in an amount equal
to his monthly

20
<PAGE> 25

salary for a period of 12 months plus one additional month for each month of
service performed, up to an additional 12 months, under the Agreement.

The Company has entered into a five year employment agreement with
Jeffrey L. Simons effective as of March 1, 1995, pursuant to which Mr. Simons
is entitled to receive an annual salary of $108,000. Mr. Simons is also
entitled to receive a bonus of $2,750 for each new Bikers Dream Superstore that
is opened, excluding repurchased franchise stores, and 20% of the initial
franchise fee for each new franchise store that is opened. The Company has
agreed to grant to Mr. Simons an option to purchase, at an exercise price of
$1.50 per share, 100,000 shares. The option vests, on a pro-rata quarterly
basis, 10,000 shares, 15,000 shares, 20,000 shares, 25,000 shares and 30,000
shares during fiscal years 1995, 1996, 1997, 1998 and 1999, respectively. The
Company has also agreed to pay Mr. Simons a net cash bonus equal to $1.50 for
each share issued to Mr. Simons upon exercise of the option.

STOCK OPTION PLANS

The Company has adopted a non-qualified stock option plan
("Non-Qualified Plan") for its directors and has reserved a total of 250,000
shares to be issued upon exercise of options granted under the Non-Qualified
Plan. The Non-Qualified Plan has not yet been submitted to the Company's
stockholders for approval. In April, 1995, the Company granted options to
purchase, at an exercise price of $1.50 per share, 50,000 shares to each of
Messrs. Dennis Campbell, William R. Gresher, Richard E. King, Jr. and Rowland
W. Day II. The options are immediately vested as to 10,000 shares and the
balance will vest at the rate of 2,500 shares per quarter over a four-year
period.

The Company has adopted an incentive stock option plan ("Incentive
Plan") for its employees and has reserved a total of 1,000,000 shares of Common
Stock to be issued upon exercise of options granted under the Incentive Plan.
The Incentive Plan has not yet been submitted to the Company's stockholders for
approval. At September 30, 1995, options to purchase 137,500 shares had been
granted at an exercise price of $1.50 per share, and options to purchase
240,000 shares had been granted at an exercise price of $2.50 per share, none
of which have been exercised.

The Incentive Plan provides for the grant by the Company of options to
purchase shares of the Company's Common Stock to its officers and key
employees. The Incentive Plan provides that it is to be administered by a
committee appointed by the Board of Directors (the "Committee") who are
"disinterested" as such term is defined under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended. The Committee has discretion, subject to the
terms of the Incentive Plan, to select the persons entitled to receive options
under the Incentive Plan, the terms and conditions on which options are
granted, the exercise price, the time period for vesting such shares and the
number of shares subject thereto.

No incentive stock option may be granted to any person who owns stock
possessing more than 10% of the combined voting power of all classes of the
Company's stock or of its parent ("10% Stockholders") unless the exercise price
is at least equal to 110% of fair market value on the date of grant. Options
may be granted under the Incentive Plan for terms of up to 10 years, except for
options granted to 10% stockholders which are limited to 5-year terms. The
exercise price of incentive options granted under the Incentive Plan must be at
least equal to the fair market value of the Common stock as of the date of
grant. No options may be granted to an optionee under the Incentive Plan if
the aggregate fair market value (determined on the date of grant) of the stock
with respect to which options are exercisable by such optionee in any calendar
year under all such plans of the Company and its affiliates exceeds $100,000.

LIMITATION ON DIRECTORS' LIABILITIES UNDER CALIFORNIA LAW

The Company's Bylaws provide for indemnification of directors and
officers against certain liabilities. Officers and directors of the Company
are indemnified generally against expenses, judgments, fines and other amounts
actually and reasonably incurred in connection with actions, suits or
proceedings, whether civil or criminal, provided that it is determined that
they acted in good faith and in a manner they reasonably believed to be in the
best interests of the Company, and, in any criminal matter, had reasonable
cause to believe that their conduct was not unlawful; provided, however, that
in the case of a suit or proceeding by or in the right of the Company, such
persons shall be indemnified only to the extent of expenses actually and
reasonably incurred by them in connection with the defense or settlement
thereof and no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Company, unless and only to the extent that the court in which such corporate
suit or

21
<PAGE> 26
proceeding was pending shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper. The Company has also obtained directors'
and officers' liability insurance in the amount of $1,000,000.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors and officers of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

CERTAIN TRANSACTIONS

During 1994 and 1993, the Company incurred $156,923 and $59,832,
respectively, in legal fees and/or consulting services fees from a law firm
with which Rowland W. Day II, a director of the Company, was associated.

During 1993, the Company issued 66,014 shares of Common Stock
(adjusted to give effect to the completion of a 1 for 1,363.341473 reverse
split of the Company's outstanding Common Stock) to Rowland W. Day II and
Robert C. Horlick, a former officer and director of the Company, and to a
partner in the law firm with which Mr. Day was associated in lieu of payment
for certain consulting and acquisition investigation services rendered, which
aggregated $63,000. Of those shares issued, 61,613 were issued to such former
officers and directors of the Company.

In August, 1994, Rowland W. Day II loaned $300,000 to the Company.
The loan was evidenced by the Company's non-interest bearing convertible
promissory note which was converted into shares of the Company's Common Stock
upon consummation of the Bikers Dream Acquisition at the conversion price of
$1.00 per share. The Company used the proceeds of the loan from Mr. Day along
with the proceeds of other loans from non-affiliates in the aggregate
additional amount of $200,000 to make a $500,000 secured loan to Bikers Dream
upon the signing of the Acquisition Agreement. The Company agreed to issue
warrants to such non-affiliates to purchase 200,000 shares of the Company's
Common Stock at a price of $1.50 per share.

In February, 1995, Rowland W. Day II loaned $50,000 to the Company,
the proceeds of which were used to purchase four used Harley-Davidson
motorcycles. The Company repaid the loan and interest thereon in the amount of
$2,000 to Mr. Day in March, 1995.

The Company agreed to grant to Rowland W. Day II, and/or his assigns,
upon consummation of the Bikers Dream Acquisition, an irrevocable three year
option to purchase, at a price of $1.00 per share, 550,000 shares of Common
Stock. Mr. Day has assigned his right to receive options to purchase 170,000
of such shares to other persons. The option provides that the holders of
shares issued upon exercise of the option will have certain rights to register
such shares under the Securities Act.

Rowland W. Day II will have the right for a period of three years
after the consummation of the Bikers Dream Acquisition to designate two members
of the Company's Board of Directors (to be composed of a total of five
members), one of which may be Mr. Day, and the right to attend meetings of the
Company's Board of Directors as an observer.

In April, 1995, the Company granted options to each of its current
directors to purchase, at an exercise price of $1.50 per share, 50,000 shares
of Common Stock. See "Management - Stock Option Plan."

In April and August, 1995, Dennis Campbell loaned $75,000 and $24,000,
respectively, to the Company, the proceeds of which were used for working
capital. The Company has agreed to repay the loans and interest thereon on
demand.

In September, 1995, the Company granted an option to William R.
Gresher to purchase, at an exercise price of $2.50 per share, 300,000 shares of
Common Stock. The option is immediately vested as to 50,000 shares and vests
as to the balance of the shares over a five year period. See "Management -
Employment Agreements."

22
<PAGE> 27

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of September 30, 1995, information
regarding ownership of Common Stock by each person known by the Company to be
the beneficial owner of more than 5% of the Company's outstanding Common Stock,
by each director and by all executive officers and directors of the Company as
a group. All persons named have sole voting and investment power over their
shares except as otherwise noted.

<TABLE>
<CAPTION>
Number of Percent
Name Shares Owned of Class
---- ------------ --------
<S> <C> <C>
Dennis Campbell 2,467,990 (1) 44%
1420 Village Way
Santa Ana, California 92705

William R. Gresher 390,632 (2) 6.8%
1420 Village Way
Santa Ana, California 92705

Richard E. King, Jr. 15,000 (3) .08%

Rowland W. Day II 888,181 (4) 14.8%
3070 Bristol Street, Suite 650
Costa Mesa, CA 92626

Brian Downing 255,555 4.6%
4861 Silver Spur
Yorba Linda, California 92686

All officers and directors
as a group (5 persons) 3,761,803 (1)(2)(3)(4)(5) 62.3%
</TABLE>

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

(1) Includes 10,000 shares subject to the presently exercisable portion of an
option held by Mr. Campbell to purchase a total of 50,000 shares. See
"Management - Stock Option Plans."

(2) Includes 60,000 shares subject to the presently exercisable portion of
options held by Mr. Gresher to purchase a total of 350,000 shares. See
"Management - Employment Agreements."

(3) Includes 10,000 shares subject to the presently exercisable portion of an
option held by Mr. King to purchase a total of 50,000 shares.

(4) Includes 390,000 shares subject to the presently exercisable portion of
options held by Mr. Day and the Day Family Trust.

(5) Does not include up to 100,000 shares which may be issued upon exercise of
an option granted to Jeffrey Simons in accordance with the terms of his
employment agreement. See "Management - Employment Agreements."

SELLING STOCKHOLDERS

The Selling Stockholders are offering hereby a total of 2,221,117
shares of Common Stock, including 595,000 shares of Common Stock issuable upon
the exercise of currently exercisable options. The following table sets forth
the name of each person who is a Selling Stockholder, the number of securities
owned by each such person as of September 30, 1995 and the number of shares of
Common Stock such person will own after the completion of this offering. The

23
<PAGE> 28

following table assumes the exercise of all options beneficially owned by each
such stockholder for which the underlying shares of Common Stock are being
offered hereby.

<TABLE>
<CAPTION>
Shares Beneficially Owned
After Offering(1)
--------------
Shares Beneficially Owned Shares Included
Name of Selling Stockholder Prior to Offering In This Offering Number Percent
- --------------------------- ----------------- ---------------- ------ -------
<S> <C> <C> <C> <C>
Dennis Campbell, 2,457,990 245,799 2,212,191 40%
Trustee of the Dennis
Campbell Revocable Trust(2)

Kemper Clearing Corp. 60,000 22,263 37,737 *%
FBO William R. Gresher
IRA(3)

Richard E. King, Jr.(4) 5,000 500 4,500 *

Day Family Trust(5) 485,334 485,334 0 -

Rowland W. Day II IRA(6) 266,667 266,667 0 -

Brian and Cheryl Downing, 255,555 25,555 230,000 4.1%
Trustees of the Downing
Revocable Trust

Eric C.S. Meyer(7) 12,500 12,500 0 -

Eric and Mary Ellen Meyer(7) 5,000 5,000 0

Donald Duffy(8) 10,000 10,000 0 -

Caldwell R. Campbell(9) 114,670 100,000 14,670 *

James J. Coyne 50,000 50,000 0 -

Kemper Clearing Corp.
FBO William McLeod IRA 11,666 11,666 0 -

Lawrence E. Peschke and
Susan V. Peschke 10,000 10,000 0 -

Peter Kapsimalis 70,000 70,000 0 -

George J. Donohue 20,000 20,000 0 -

Gregory G. Schmidt and 75,000 75,000 0 -
Katitza Schmidt

Lenard S. Dacanay 3,333 3,333 0 -

David Manley 4,000 4,000 0 -

Robert London 16,666 16,666 0 -
</TABLE>

24
<PAGE> 29

<TABLE>
<S> <C> <C> <C> <C>
Donald B. Kearns and 16,667 16,667 0 -
Jean K. Wickersham

Douglas B. Schreier 6,000 6,000 0 -

Rowland W. Day(10) 68,000 68,000 0 -

MD Strategic, L.P. 120,000 120,000 0 -

Don C. Barton 6,667 6,667 0 -

Tom and Shellie Paul 5,000 5,000 0 -

Sue and Larry Peschke 5,000 5,000 0 -

Robert and Bernadette Gresher 2,000 2,000 0 -

Stanton F. Weissenborn 12,500 12,500 0 -

Ian A. Reddin 25,000 25,000 0 -

William Whalen 25,000 25,000 0 -

Charles T. Young 25,000 25,000 0 -

Elliot M. Lavigne 25,000 25,000 0 -

Warren Weiner 25,000 25,000 0 -

Paul A. Minor 50,000 50,000 0 -

Paul Tanico 37,500 37,500 0 -

William James Bell 25,000 25,000 0 -

Dr. John F. Bunk 25,000 25,000 0 -

James Coleman 2,500 2,500 0 -

Victoria Dauphinot 2,500 2,500 0 -

Timothy C. Davis 5,000 5,000 0 -

Martin D. Fife 5,000 5,000 0 -

William J. Fusco 5,000 5,000 0 -

D. Bruce Horton 7,500 7,500 0 -

Michael Green 5,000 5,000 0 -

Thomas P. Kikis 12,500 12,500 0 -
</TABLE>

25
<PAGE> 30

<TABLE>
<S> <C> <C> <C> <C>
Marshall Manley 25,000 25,000 0 -

Glenn T. Marcin 25,000 25,000 0 -

William J. Marshall 7,500 7,500 0 -

Douglas L. Mason 7,500 7,500 0 -

Boyce Meyer 50,000 50,000 0 -

Donald J. O'Neil 25,000 25,000 0 -

Elaine G. Reddin 25,000 25,000 0 -

Mimi Vail 2,500 2,500 0 -

Wavemark Partners, L.P. 25,000 25,000 0 -

Meyer, Duffy & Associates, Inc.(11) 45,000 45,000 0 -
</TABLE>

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

* Less than 1%

(1) Gives effect to exercise of all of the options for which the
underlying shares of Common Stock are being offered hereby and the
sale of all of the shares of Common Stock being offered by the Selling
Stockholders.

(2) Mr. Campbell is President and a director of the Company. Does not
include 50,000 shares subject to an option held by Mr. Campbell.

(3) Mr. Gresher is Senior Vice President, Chief Financial, Operating and
Administrative Officer and a director of the Company. Does not
include 350,000 shares subject to options held by Mr. Gresher or
308,369 shares held by Mr. Gresher which are not being offered hereby.

(4) Mr. King is Secretary and a director of the Company. Does not include
50,000 shares subject to an option held by Mr. King.

(5) Mr. Day, a Co-Trustee of the Day Family Trust, is a director of the
Company. Includes 200,000 shares subject to a currently exercisable
option.

(6) Mr. Day is a director of the Company. Includes 180,000 shares subject
to a currently exercisable option. Does not include 50,000 shares
subject to an option held by Mr. Day or 126,180 shares held by Mr. Day
which are not being offered hereby.

(7) Mr. Meyer is a former director of the Company. Includes 10,000 shares
subject to a currently exercisable option.

(8) Mr. Duffy is a former director of the Company. Includes 10,000 shares
subject to a currently exercisable option.

(9) Includes 100,000 shares subject to a currently exercisable option.

(10) Includes 50,000 shares subject to a currently exercisable option

(11) Includes 30,000 shares subject to a currently exercisable option.

26
<PAGE> 31

All costs, expenses and fees in connection with the registration of
the shares offered hereby will be borne by the Company. All brokerage
commissions, if any, attributable to the sale of shares will be borne by the
Selling Stockholders.

The Selling Stockholders' sales of shares of Common Stock may be
effected from time to time in transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions,
through the writing of options on the Common Stock, or a combination of such
methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling
Stockholders may effect such transactions by selling Common Stock directly to
purchasers or to or through broker-dealers which may act as agents or
principals. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Stockholders and/or the
purchasers of Common Stock for whom such broker-dealers may act as agents or
to whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act. The Selling Stockholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against certain liabilities, including liabilities arising
under the Securities Act.

Because the Selling Stockholders may each be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act, the
Selling Stockholders will be subject to prospectus delivery requirements under
the Securities Act. Furthermore, in the event of a "distribution" of its
shares, the Selling Stockholder, any selling broker or dealer and any
"affiliated purchasers" may be subject to Rule 10b-6 under the Exchange Act
until its participation in that distribution is completed.

The Selling Stockholders may also use Rule 144 under the Securities
Act to sell the shares if they meet the criteria and conform to the
requirements of such Rule.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company's Articles of Incorporation authorizes the issuance of
25,000,000 shares of Common Stock without par value, of which approximately
5,535,920 shares were outstanding as of September 30, 1995.

Holders of shares of Common Stock are entitled to one vote for each
share on all matters to be voted on by the shareholders and, upon the giving of
notice as required by law, are entitled to cumulate their votes in the election
of directors. Holders of shares of Common Stock are entitled to share ratably
in dividends, if any, as may be declared, from time to time by the Board of
Directors in its discretion, from funds legally available therefor. In the
event of a liquidation, dissolution or winding up of the Company, the holders
of shares of Common Stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. Holders of Common Stock have no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to such shares.

In connection with its acquisition of Bikers Dream, Inc., the Company
agreed not to issue, without the unanimous approval of its Board of Directors,
during each year of a three year period commencing on March 13, 1995, any
shares of Common Stock, or any shares convertible into Common Stock, or any
options, warrants or other rights to purchase shares of Common Stock, in excess
of 5% of the total number of shares of Common Stock outstanding immediately
after the consummation of such acquisition (such number of outstanding shares
being 4,700,000), except for shares issued in connection with acquisitions or
shares issued upon exercise of options and warrants outstanding immediately
after the consummation of such acquisition.

27
<PAGE> 32

OPTIONS

The Company has granted options to purchase 550,000 shares of Common
Stock at an exercise price of $1.00 per share. The options are exercisable at
any time prior to March 13, 1998.

The Company has granted options under the Company's Non-Qualified
Stock Option Plan to each of its four current directors to purchase, at an
exercise price of $1.50 per share, 50,000 shares of Common Stock. The options
are immediately vested as to 10,000 shares and the balance will vest at the
rate of 2,500 shares per quarter over a four year period. See "Management -
Stock Option Plans."

The Company has granted to employees under the Company's Incentive
Stock Option Plan options to purchase 137,500 shares of Common Stock at an
exercise price of $1.50 per share, and options to purchase 240,000 shares of
Common Stock at an exercise price of $2.50 per share. See "Management - Stock
Option Plans."

The Company has granted an option to William R. Gresher to purchase,
at an exercise price of $2.50 per share, 60,000 shares of Common Stock. The
option is immediately vested as to 10,000 shares and the remaining portion of
the option is vested over a five year period commencing in September, 1995.
See "Management - Employment Agreements."

The Company has granted an option to a consultant to purchase, at an
exercise price of $2.50 per share, 30,000 shares of Common Stock.

REGISTRAR AND TRANSFER AGENT

The Registrar and Transfer Agent for the Company's Common Stock is
American Securities Transfer, 1825 Lawrence Street, Suite 444, Denver, Colorado
80202.

LEGAL MATTERS

Certain matters with respect to the validity of the shares of Common
Stock offered hereby will be passed upon for the Company by Day & Campbell,
Costa Mesa, California. Mr. Rowland W. Day II, a member of the firm, is a
director of the Company and owned 498,181 shares of the Company's Common Stock
as of the date of this Prospectus and also holds options to purchase an
additional 430,000 shares of the Company's Common Stock from the Company.
Caldwell R. Campbell, a member of the firm, owned 14,670 shares of the
Company's Common Stock as of the date of this Prospectus and also holds an
option to purchase an additional 100,000 shares of the Company's Common Stock
from the Company.

EXPERTS

The audited financial statements of the Company as of December 31,
1993 and 1994 and for the years then ended in this Prospectus and the related
Registration Statement, have been audited by Lesley, Thomas, Schwarz & Postma,
independent auditors, as set forth in their report thereon appearing elsewhere
herein and in the Registration Statement, and are included in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.

FURTHER INFORMATION

The Company has filed with the Securities and Exchange Commission
("Commission"), a Registration Statement on Form SB-2 with respect to the
securities which are offered by this Prospectus. This Prospectus omits certain
information which is contained in the Registration Statement as permitted by
the Rules and Regulations of the Commission. For further information,
reference is made to the Registration Statement including the exhibits filed

28
<PAGE> 33
therewith, which may be examined without charge at the Washington, D.C. offices
of the Commission and copies of all or any part thereof may be obtained upon
payment of the Commission's charge for copying. The statement contained in
this Prospectus as to the contents of any contract or other document identified
as exhibits in this Prospectus are not necessarily complete, and in each
instance, reference is made to the copy of such contract or document filed as a
exhibit to the Registration Statement, each statement being qualified in any
and all respects by such reference.

29
<PAGE> 34
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Independent Auditors' Report of Lesley, Thomas, Schwarz & Postma F-2

Balance Sheets as of December 31, 1994 and December 31, 1993, and as of
June 30, 1995 (unaudited) F-3

Statements of Operations for the years ended December 31, 1994, 1993 and 1992,
and for the six months ended June 30, 1995 (unaudited) F-5

Statements of Changes in Shareholders' Equity for the years ended December 31, 1994,
1993 and 1992, and for the six months ended June 30, 1995 (unaudited) F-6

Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992, and
for the six months ended June 30, 1995 (unaudited) F-7

Notes to Financial Statements F-9
</TABLE>

F-1
<PAGE> 35

March 15, 1995

Independent Auditors' Report

To the Stockholders of
Bikers Dream, Inc.

We have audited the accompanying balance sheet of Bikers Dream, Inc.
as of December 31, 1994 and 1993, and the related statements of operations,
changes in stockholders' equity, and cash flows for each of the three years in
the period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bikers Dream, Inc.
as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.

Lesley, Thomas, Schwarz and Postma

F-2

<PAGE> 36

BIKERS DREAM, INC.
------------------
BALANCE SHEET
-------------

ASSETS
------
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
JUNE 30,
1995 1994 1993
------------ ---------- --------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 234,228 $ 18,136 $
Accounts receivable (Note 2) 117,643 98,014 7,068
Inventories (Note 2) 1,211,125 701,301 237,411
Note receivable from stockholder
(Note 4) 24,616 20,978
Employee advances 15,844 1,870
Prepaid expenses 58,329 58,426
Current portion note receivable 7,560
---------- ---------- --------
Total current assets 1,644,729 902,363 265,457

PROPERTY AND EQUIPMENT,
at cost, less accumulated depreciation
and amortization of $61,721, $28,082
and $25,438 (Notes 2 and 3) 429,837 114,282 95,366

DEFERRED TAX ASSET (Note 8) 64,785 57,878

NOTE RECEIVABLE, less current portion 11,389

DEPOSITS 29,170 37,219 18,710
---------- ---------- --------

$2,115,125 $1,118,649 $437,411
========== ========== ========
</TABLE>

See the accompanying notes to these financial statements

F-3

<PAGE> 37
BIKERS DREAM, INC.
------------------
BALANCE SHEET
-------------

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
JUNE 30,
1995 1994 1993
----------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT LIABILITIES
Bank overdraft $ $ $ 41,922
Accounts payable 197,178 5,116 78,850
Other accrued expenses 313,942 125,748 122,100
Current portion of long-term debt
(Note 6) 666,359 1,230 8,100
Notes payable (Note 10) 521,000 15,000
----------- ----------- ---------

Total current liabilities 1,177,479 653,094 265,972

DEFERRED RENT (Note 5) 82,624 73,504

DEFERRED TAX LIABILITY 3,425 5,859 2,951

LONG-TERM DEBT, less current portion
(Note 6) 93,943 72,324 133,598
----------- ----------- ---------

Total liabilities 1,357,471 804,781 402,521
----------- ----------- ---------

COMMITMENTS (Note 5)

STOCKHOLDERS' EQUITY
Common stock, no par value;
25,000,000 and 1,000,000 shares
authorized at June 30, 1995 and
December 31, 1994 and 1993,
respectively; 4,700,000, 658,013 and
595,000 shares issued at June 30,
1995, December 31, 1994 and 1993,
respectively 448,990 448,990 157,000
Additional paid-in-capital 1,340,565
Accumulated deficit (1,031,901) (135,122) (122,110)
----------- ----------- ---------

Total stockholders' equity 757,654 313,868 34,890
----------- ----------- ---------

$ 2,115,125 $ 1,118,649 $ 437,411
=========== =========== =========

</TABLE>

See the accompanying notes to these financial statements

F-4

<PAGE> 38

BIKERS DREAM, INC.
------------------
STATEMENT OF OPERATIONS
-----------------------

<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED ------------------------
JUNE 30, 1995 1994 1993 1992
-------------------------------------------------------
(UNAUDITED)

<S> <C> <C> <C> <C>
NET SALES $ 3,246,266 $ 4,626,821 $ 1,436,374 $ 1,155,273

COST OF GOODS SOLD 2,504,869 3,526,666 922,509 683,782
----------- ----------- ----------- -----------
GROSS PROFIT 741,397 1,100,155 513,865 471,491
----------- ----------- ----------- -----------
OTHER (INCOME) AND EXPENSES
Selling, general and administrative
expenses 1,553,629 1,121,484 641,986 443,444
Depreciation and amortization 33,639 20,115 16,004 13,912
Interest (income) expense (153) 19,990 22,980 17,315
Franchise income (Note 11) (8,500) (45,000)
Other (income) expense (3,590) (223) (2,830) (54)
----------- ----------- ----------- -----------
1,575,025 1,116,366 678,140 474,617
----------- ----------- ----------- -----------
LOSS BEFORE (BENEFIT) PROVISION
FOR INCOME TAXES (833,628) (16,211) (164,275) (3,126)

(BENEFIT) PROVISION FOR INCOME
TAXES (Note 8) 63,151 (3,199) (53,327) 800
----------- ----------- ----------- -----------
NET LOSS $ (896,779) $ (13,012) $ (110,948) $ (3,926)
=========== =========== =========== ===========
NET LOSS, per common share $ (0.19) $ (0.02) $ (0.19) $ (.007)
=========== ============ =========== ===========

</TABLE>

See the accompanying notes to these financial statements

F-5

<PAGE> 39
BIKERS DREAM, INC.
------------------

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------

<TABLE>
<CAPTION>
COMMON STOCK
-------------------- ADDITIONAL TOTAL
PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY/(DEFICIT)
--------- -------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1991 $ (7,236) $ (7,236)

ISSUANCE OF COMMON STOCK 525,000 $ 17,000 17,000

NET LOSS (3,926) (3,926)
--------- -------- ---------- ----------- ----------

BALANCE, December 31, 1992 525,000 17,000 (11,162) 5,838

ISSUANCE OF COMMON STOCK 70,000 140,000 140,000

NET LOSS (110,948) (110,948)
--------- -------- ---------- ----------- ----------

BALANCE, December 31, 1993 595,000 157,000 (122,110) 34,890

ISSUANCE OF COMMON STOCK 63,013 291,990 291,990

NET LOSS (13,012) (13,012)
--------- -------- ---------- ----------- ----------

BALANCE, December 31, 1994 658,013 448,990 (135,122) 313,868

NET LOSS (Unaudited) (896,779) (896,779)

ISSUANCE OF COMMON STOCK
(Unaudited) 4,041,987 $1,340,565 1,340,565
------- -------- ---------- ----------- ----------

BALANCE, June 30, 1995
(Unaudited) 4,700,000 $448,990 $1,340,565 $(1,031,901) $ 757,654
========= ======== ========== =========== ==========

</TABLE>

See the accompanying notes to these financial statements

F-6

<PAGE> 40
BIKERS DREAM, INC.
------------------
STATEMENT OF CASH FLOWS
-----------------------

<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED --------------------------------------
JUNE 30, 1995 1994 1993 1992
------------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(896,779) $ (13,012) $(110,948) $ (3,926)
--------- --------- --------- ---------
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities
Deferred income taxes 62,351 (3,999) (54,127)
Depreciation and amortization 33,639 20,115 16,004 13,912
Abandonment of fixed assets 8,161
Change in assets and liabilities
Decrease (increase) in accounts
receivable (19,629) (90,945) 12,535 (17,067)
Decrease (increase) in inventories (509,824) (463,890) 133,091 (193,644)
Decrease (increase) in deposits 8,049 (18,509) (12,069) (1,141)
Decrease (increase) in prepaid
expenses 100 (58,426) 9,408
Increase in employee advances (13,974) (1,870)
Increase (decrease) in accounts
payable 192,052 (73,735) (147,985) 164,082
Increase (decrease) in cash
overdraft (41,922) (1,083) 43,004
Increase in deferred rent 9,120 73,504
Increase in other accrued
expenses 188,191 3,648 80,057 15,238
--------- --------- --------- ---------
Total adjustments (49,925) (656,029) 43,992 24,384
--------- --------- --------- ---------
Net cash provided by (used
in) operating activities (946,704) (669,041) (66,956) 20,458
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments for purchase of fixed assets (349,184) (63,647) (56,213) (3,257)
--------- --------- --------- ---------
Net cash used in investing
activities (349,184) (63,647) (56,213) (3,257)
--------- --------- --------- ---------

</TABLE>

See the accompanying notes to these financial statements

F-7

<PAGE> 41
BIKERS DREAM, INC.
------------------
STATEMENT OF CASH FLOWS (CONTINUED)
-----------------------------------

<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED --------------------------------
JUNE 30, 1995 1994 1993 1992
-------------- ---------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES

Advances received on employee note
receivable 18,949)
Proceeds from long-term debt 705,803 64,000 3,029
Principal payments made on long-term
debt (40,055) (83,144) (65,127) (29,956)
Payments received on note receivable
from stockholder 24,616 20,978 2,868
Proceeds from issuance of common
stock 840,565 291,990 140,000
Proceeds from issuance of notes payable 521,000 15,000
Advances on note receivable from
stockholder (33,572)
Advances on note payable to stockholder 9,726
----------- --------- --------- --------
Net cash provided by (used
in) financing activities 1,511,980 750,824 123,169 (17,201)
----------- --------- --------- --------

NET INCREASE IN CASH AND CASH
EQUIVALENTS 216,092 18,136 0 0

CASH AND CASH EQUIVALENTS,
beginning of year 18,136 0 0 0
----------- --------- --------- --------
CASH AND CASH EQUIVALENTS,
end of year $ 234,228 $ 18,136 $ 0 $ 0
=========== ========= ========= ========

</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITY:
A note payable in the amount of $500,000 was converted to stock at March 31,
1995

See the accompanying notes to these financial statements

F-8

<PAGE> 42
BIKERS DREAM, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1994, 1993 AND 1992

JUNE 30, 1995 (UNAUDITED)

NOTE 1 - COMPANY OPERATIONS

Bikers Dream, Inc. (the "Company"), was incorporated in 1991. The
Company is in the business of selling motorcycle accessories, the sale of
Harley Davidson motorcycles and the repair and maintenance of Harley Davidson
motorcycles.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES - Inventories are valued using a cost method which
approximates the first-in, first-out (FIFO) method at the lower of cost or
market. The entire inventory consists of purchased items and are categorized as
finished goods.

PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost
with depreciation and amortization provided using the straight-line method over
the estimated useful lives of the assets which range from five to seven years.
Repairs and maintenance to property and equipment are expensed as incurred.
When property and equipment are retired or disposed of, the related costs and
accumulated depreciation and amortization are eliminated from the accounts and
any gain or loss on such disposition is reflected in income.

CONCENTRATION OF RISK - The Company is operating in a growing market
due to the current nationwide popularity in Harley Davidson motorcycles. Its
future success is dependent on the continuation of interest in the recreational
motorcycle industry.

CASH AND CASH EQUIVALENTS - For purposes of the balance sheet and the
statement of cash flows, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.

ACCOUNTS RECEIVABLE - The Company utilizes the allowance method of
recording doubtful accounts receivable for financial statement purposes and the
direct write off method for income tax purposes. At December 31, 1994 and
1993, and June 30, 1995, no allowance for doubtful accounts receivable was
deemed necessary.

FRANCHISE INCOME - Revenue from sales of individual franchises is
recognized when substantially all significant services to be provided by the
Company have been performed.

F-9

<PAGE> 43

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
ESTIMATED JUNE 30,
USEFUL LIVES 1995 1994 1993
------------ ------------ ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Furniture and fixtures 7 years $ 55,150 $ 31,012 $ 21,026
Leasehold improvements 7 years 190,450 22,255 15,022
Equipment 5 years 41,915 29,756 51,911
Computers 5 years 171,680 29,493 26,291
Phone system 7 years 9,069 6,554 6,554
Displays 7 years 23,294 23,294 --
--------- --------- ---------
491,558 142,364 120,804
Less: accumulated depreciation and amortization (61,721) (28,082) (25,438)
--------- --------- ---------
$ 429,837 $ 114,282 $ 95,366
========= ========= =========

</TABLE>

NOTE 4 - NOTE RECEIVABLE FROM STOCKHOLDER

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
JUNE 30,
1995 1994 1993
---------------- ------- --------
(UNAUDITED)
<S> <C> <C> <C>
The Company has a note receivable
from its majority stockholder that is
non-interest bearing and is payable on
demand $ -- $24,616 $ 20,978
================ ======= ========

</TABLE>

NOTE 5 - COMMITMENTS

The Company leases its Santa Ana, California operating facility under
a non-cancellable tenant operating lease for a monthly rent of $10,970 subject
to annual CPI increases starting the third year of the lease. The lease term
is 120 months commencing November 1, 1993 with two successive five year
options. The Company received eight months of abated monthly rent from the
lessor granted in the first year of the lease. The total amount of base rent
payments is being charged to expense on the straight-line method over the term
of the lease. The Company has recorded a deferred credit to reflect the excess
of rent expense over cash payments since inception of the lease. Deferred rent
expense amounted to $73,504 at December 31, 1994 and $9,120 at June 30, 1995.

Prior to November 1, 1993, the Company leased its operating facilities
under non-cancellable tenant operating leases for a monthly rent of $5,280.
The Company continued to be obligated under one of the leases until April 1994.
The monthly rent of this facility was $2,880.

F-10

<PAGE> 44
NOTE 5 - COMMITMENTS (CONTINUED)

Subsequent to December 31, 1994, the Company negotiated a lease at a
second corporate store in Dallas, Texas. The terms of the lease call for a
monthly rent of $8,000 subject to CPI increases. The lease term is sixty
months commencing January 1, 1995 with two successive five year options. The
Company received two months of abated rent from the lessor to be granted in the
first year of the lease. The lessor has also agreed to reimburse the Company
$30,000 for tenant improvements.

In addition, on March 1, 1995 the Company negotiated a lease to open
another corporate store in Florida. The lease term is 60 months commencing
June 1, 1995 with the monthly lease payments varying from $4,000 to $9,261 per
month. The Company has a five year option to extend this lease.

Total rent expense incurred by the Company for the years ended
December 31, 1994, 1993 and 1992 were $142,878, $76,930 and $64,834,
respectively.

Minimum future annual rental commitments are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AMOUNT
- ----------------------- ---------
<S> <C>
1995 $ 251,640
1996 299,640
1997 326,040
1998 330,960
1999 336,126
Thereafter 527,276
----------

$2,071,682
==========
</TABLE>

NOTE 6 - LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
JUNE 30,
1995 1994 1993
-------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to lender, collateralized
by a vehicle, in monthly installments of
$239, including principal and interest
at 12.2%, matured August 1994. $ -- $ -- $ 1,913
</TABLE>

F-11
<PAGE> 45
NOTE 6 - LONG-TERM DEBT (CONTINUED)

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
JUNE 30,
1995 1994 1993
-------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to lender, collateralized
by a vehicle, in monthly installments of
$584, including principal and interest
at 14.95%, maturing October 1996.
Assumed by Company's president in
1994. -- -- 16,011

Note payable to lender in monthly
installments varying from $457 to
$492, including principal and interest
at rates varying from 5% to 7.5%,
matures January 2023. Monthly
installments are subject to change
every six months. 54,499 73,554 83,974

Convertible notes payable to various
lenders under a Note Agreement dated
June 19, 1995, accruing interest at a
rate of 8% per annum, principal and
accrued interest due and payable one
year after the date of each note
through June 1996. The notes may, at
the option of the holders, be converted
into shares of common stock of the
Company pursuant to and in
accordance with the terms of the Note
Agreement. 625,000 -- --

Capitalized lease obligation payable to
a finance company, collateralized by
certain computer equipment, requiring
principal and interest payments of
$2,272 per month, with interest
accruing at 20% per annum through
May 2000. 80,803 -- --
</TABLE>

F-12
<PAGE> 46
NOTE 6 - LONG-TERM DEBT (CONTINUED)

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
JUNE 30,
1995 1994 1993
-------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
Advances to former stockholder,
bearing no interest, payable thirteen
months from demand. Converted to
common stock in 1994. -- -- 39,800
--------- --------- ---------
760,302 73,554 141,698
Less: current portion (666,359) (1,230) (8,100)
--------- --------- ---------

Long-term debt, net of current portion $ 93,943 $ 72,324 $ 133,598
========= ========= =========
</TABLE>

Minimum future principal debt payments are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AMOUNT
- ----------------------- --------
<S> <C>
1995 $ 1,230
1996 1,293
1997 1,359
1998 1,428
1999 1,501
Thereafter 66,743
--------

$ 73,554
========
</TABLE>

NOTE 7 - INTEREST EXPENSE/INCOME TAX

For the years ended December 31, 1994, 1993 and 1992, $12,126, $22,980
and $17,315, respectively, of cash was paid for interest expense, and $800 of
cash was paid for income taxes each year. For the period ended June 30, 1995,
$15,563 and $800 of cash was paid for interest expense and taxes, respectively.

F-13
<PAGE> 47

NOTE 8 - INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (``SFAS 109''), ``Accounting for Income
Taxes'', which mandates the asset and liability method of accounting for income
taxes and permits the recognition of net deferred tax assets subject to an
ongoing assessment of realizability. This method was adopted retroactively
effective June 30, 1993.

Deferred income taxes are provided for timing differences in the
recognition of certain income and expense items for tax and financial statement
purposes. These differences result from principally deducting state income
taxes subsequent to the year of accrual and the use of accelerated depreciation
methods for property and equipment for tax purposes as compared to the
straight-line method for financial statement purposes.

The benefit for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
JUNE 30,
1995 1994 1993 1992
--------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Current $ 800 $ 800 $ 800 $ 800
Deferred 62,351 (3,999) (54,127)
--------- --------- --------- ---------

Total (benefit) provision for income taxes $ 63,151 $ (3,199) $ (53,327) $ 800
========= ========= ========= =========
</TABLE>

The tax effect of the temporary differences giving rise to the
Company's deferred tax assets and liabilities are shown on the following table:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
JUNE 30,
1995 1994 1993
--------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
DEFERRED TAX ASSETS
Net operating loss carryforwards $ 324,670 $ 64,561 $ 57,654
State tax liability -- 224 224
--------- --------- ---------

Total gross deferred income tax
assets 324,670 64,785 57,878
Less: valuation allowance (324,670) -- --
--------- --------- ---------

Total deferred income tax assets $ -- $ 64,785 $ 57,878
========= ========= =========

DEFERRED TAX LIABILITY
Depreciation $ 3,425 $ 5,859 $ 2,951
--------- --------- ---------

Total deferred income tax liability $ 3,425 $ 5,859 $ 2,951
========= ========= =========
</TABLE>

F-14
<PAGE> 48

NOTE 8 - INCOME TAXES (CONTINUED)

A valuation allowance is provided to reduce the deferred tax assets to
a level which, more likely than not, will be realized. The net deferred assets
reflects management's estimate of the amount which will be realized from future
profitability which can be predicted with reasonable certainty. The Company
has net operating loss carryforwards of $168,403 and $30,556 at December 31,
1994 which expire through 2008 to offset future federal and state taxable
income, respectively, for income tax purposes as follows:

<TABLE>
<CAPTION>
YEAR OF EXPIRATION FEDERAL CALIFORNIA
- ------------------ --------- ----------
<S> <C> <C>
2007 $ 14,306 $ 0
2008 154,097 30,556
--------- ----------

$ 168,403 $ 30,556
========= ==========
</TABLE>

NOTE 9 - SUBSEQUENT EVENTS

Effective March 13, 1995, the Company was acquired by a publicly
traded entity formerly known as HDL Communications. HDL Communications was
engaged in the publishing business until June 1989 when it discontinued
operations. HDL Communications remained inactive until March 13, 1995 when it
acquired all of the outstanding stock of Bikers Dream, Inc. Prior to its
acquisition of the Company, HDL Communications effected a 1 for 1,363.341473
reverse split of its outstanding common stock. After the acquisition, Bikers
Dream, Inc. was merged into HDL Communications and HDL Communications changed
its name to Bikers Dream, Inc., and the substance of the transaction was a
recapitalization by Bikers Dream, Inc. in exchange of Bikers Dream's shares for
HDL shares.

The following tables summarizes the effect on earnings per share had
the acquisition occurred as of January 1, 1992:

<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Net loss per common share $(0.003) $(0.020) $(0.001)
======= ======= =======
</TABLE>

In addition, the Company opened a second corporate store in Dallas,
Texas in April 1995. A third corporate store will open in Florida in 1995.

F-15
<PAGE> 49

NOTE 10 - NOTES PAYABLE

The notes payable consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
JUNE 30,
1995 1994 1993
--------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to related party, HDL
Communications, Inc., accruing
interest at 1% plus the prime rate on
$200,000 of the unpaid principal
balance, principal plus any accrued
interest due March 1995, collateralized
by all assets of the Company. This
note was converted to 333,333 shares
of common stock in March 1995. $ -- $ 500,000 $ --

Note payable to lender, accruing no
interest, due on demand. This note
was paid off in February 1995. -- 21,000 --

Note payable to lender, accruing
interest at 30%, due on demand. Paid
in 1994. -- -- 5,000

Note payable to lender, accruing
interest at 9%, due on demand. Paid
in 1994. -- -- 10,000
---------- --------- ---------

$ -- $ 521,000 $ 15,000
========== ========= =========
</TABLE>

NOTE 11 - FRANCHISE INCOME

The Company entered into three franchise agreements during fiscal year
1994. The Company received a $15,000 fee for each store and will collect five
percent (5%) of each store's weekly sales under the agreements.

F-16
<PAGE> 50

NOTE 12 - NON-CASH INVESTING AND FINANCING ACTIVITIES

During 1994, the Company's president assumed ownership of the Company
vehicle for the net book value of the automobile of $24,616.

NOTE 13 - WARRANTS AND OPTIONS

The Company has issued warrants in conjunction with the HDL and Bikers
Dream merger to purchase 200,000 shares of common stock at an exercise price of
$1.50 per share. The warrants are exercisable at any time prior to September
4, 1995.

The Company has issued options in conjunction with the HDL and Bikers
Dream merger to purchase 550,000 shares of common stock at an exercise price of
$1.00 per share. The options are exercisable at any time prior to March 13,
1998.

The Company has granted options to each of its four current directors
to purchase, at an exercise price of $1.50 per share, 50,000 shares of common
stock. The options vest over a five year period commencing in April, 1995, and
will expire, if not exercised, on the tenth anniversary of the date of grant.

The Company has granted options to purchase 100,000 shares of common
stock at an exercise price of $1.50 per share to Company officers. The options
vest over a five year period commencing in March 1995.

The Company has granted options to purchase 37,500 shares of common
stock at an exercise price of $1.50 per share to Company employees. The
options vest over a five year period beginning in March 1995.

The warrants and options were issued at amounts substantially
equivalent to the stock's market value.

F-17
<PAGE> 51
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

22. Indemnification of Directors and Officers

The Company's Bylaws and Section 317 of the California General
Corporation Law provide for indemnification of directors and officers against
certain liabilities. Officers and directors of the Company are indemnified
generally against expenses, judgments, fines and other amounts actually and
reasonably incurred in connection with actions, suits or proceedings, whether
civil or criminal, provided that it is determined that they acted in good faith
and in a manner they reasonably believed to be in the best interests of the
Company, and, in any criminal matter, had reasonable cause to believe that
their conduct was not unlawful.

23. Other Expenses of Issuance and Distribution

<TABLE>
<S> <C>
Registration fee $ 3,438
Blue sky fees and expenses 500
Legal fees and expenses 70,000
Accounting fees and expenses 5,000
Printing 500
Miscellaneous 562
-----------
$ 80,000

TOTAL(1)
</TABLE>

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

(1) All of the above expenses except the SEC registration fee are
estimates. All of the above expenses will be paid by the Company.

24. Recent Sales of Unregistered Securities

The Company has sold the following securities within the last three
years:

Prior to its acquisition by the Company, Bikers Dream, Inc. sold a
total of 658,013 shares of Common Stock to a total of eight persons, three of
whom were officers, one of whom was related to one of the officers, and the
rest of whom were prior business acquaintances of one of the officers. The
issuance of such securities was exempt from registration under the Securities
Act of 1933 pursuant to Section 4(2) thereof and Regulation D promulgated
thereunder.

In April, 1993, the Company issued 66,014 shares of Common Stock for
consulting and acquisition investigation services valued at $63,000 to Rowland
W. Day II, Robert C. Horlick and Caldwell R. Campbell. The issuance of such
securities was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof and Regulation D promulgated thereunder.

In August, 1994, the Company issued secured convertible promissory
notes in the aggregate principal amount of $500,000 to Rowland W. Day II,
Glenoaks Overseas Corp. and Silverstone International Corp., which notes were
converted into 500,000 shares of the Company's Common Stock in March, 1995.
The issuance of such securities was exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) thereof and Regulation D
promulgated thereunder and/or pursuant to Regulation S.

In August, 1994, the Company issued warrants to purchase an aggregate
of 200,000 shares of Common Stock at a price of $1.50 per share to Glenoaks
Overseas Corp. and Silverstone International Corp. The warrants were issued
pursuant to Regulation S promulgated under the Securities Act of 1933. The
Warrants were exercised in September, 1995.

II-1
<PAGE> 52

In March, 1995, the Company issued 600,000 shares of Common Stock for
$900,000 cash to accredited investors. The issuance of such securities was
exempt from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof and Regulation D promulgated thereunder.

In March, 1995, the Company issued 3,300,000 shares of Common Stock to
the stockholders of Bikers Dream, Inc. in exchange for all of their shares of
stock of Bikers Dream, Inc. pursuant to the terms and conditions of an
Agreement and Plan of Reorganization among the Company, Bikers Dream, Inc. and
the stockholders of Bikers Dream, Inc. The issuance of such securities was
exempt from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof and Regulation D promulgated thereunder.

In March, 1995, the Company granted options to purchase, at a price of
$1.00 per share, 200,000 shares, 180,000 shares, 100,000 shares, 50,000 shares,
10,000 shares and 10,000 shares to Rowland W. Day II IRA, the Day Family Trust,
Caldwell R. Campbell, Rowland W. Day, Eric Meyer and Don Duffy, respectively.
The grant of such options was exempt from registration under the Securities Act
of 1933 pursuant to Section 4(2) thereof and Regulation D promulgated
thereunder.

In April, 1995, the Company granted options to purchase 50,000 shares
of Common Stock at a price of $1.50 per share to each of Dennis Campbell,
William R. Gresher, Richard E. King, Jr. and Rowland W. Day II, the Company's
current directors. The grant of such options was exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) thereof and
Regulation D promulgated thereunder.

In April, 1995, the Company granted options to purchase, at a price of
$1.50 per share, a total of 137,500 shares to four key employees. The grant of
such options was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof and Regulation D promulgated thereunder.

In July and August, 1995, the Company issued its convertible
promissory notes in the aggregate principal amount of $1,240,000 to accredited
investors. The convertible notes were converted into a total of 620,000 shares
of Common Stock in August and September, 1995. The issuance of such securities
was exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) thereof and Regulation D promulgated thereunder.

In October, 1995, the Company issued 15,000 shares of Common Stock and
granted an option to purchase, at an exercise price of $2.50 per share, 30,000
shares of Common Stock, to Meyer, Duffy and Associates, Inc. for consulting
services. The issuance of such securities was exempt from registration under
the Securities Act of 1933 pursuant to Section 4(2) thereof and Regulation D
promulgated thereunder.

In September, 1995, the Company granted options to William R. Gresher
to purchase, at an exercise price of $2.50 per share, 300,000 shares of Common
Stock. The grant of such options was exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) thereof and Regulation D
promulgated thereunder.

25. Exhibits

2.1 Agreement and Plan of Reorganization dated August 4, 1994
among HDL Communications (now known as Bikers Dream, Inc.),
Bikers Dream, Inc. and the stockholders of Bikers Dream, Inc.,
as amended by agreements dated November 11, 1994, February 3,
1995 and February 20, 1995.*

3.1 Articles of Incorporation, as amended, of Bikers Dream, Inc.
(formerly known as HDL Communications).*

3.2 Certificate of Ownership of HDL Communications (now known as
Bikers Dream, Inc.).*

3.3 Bylaws, as amended, of Bikers Dream, Inc.*

II-2
<PAGE> 53

5.1 Opinion of Day & Campbell.

10.1 Loan and Security Agreement between the Company and Rowland W.
Day II dated August 4, 1994, as amended by agreement dated
February 3, 1995.*

10.2 Convertible Secured Promissory Note of the Company dated
August 4, 1994 payable to Rowland W. Day II in the amount of
$300,000.*

10.3 Loan and Security Agreement among the Company, Glenoaks
Overseas Corp. and Silverstone International Corp. dated
August 4, 1994, as amended by agreement dated February 3,
1995.*

10.4 Convertible Secured Promissory Note of the Company dated
August 4, 1994 payable to Glenoaks Overseas Corp. in the
amount of $100,000.*

10.5 Convertible Secured Promissory Note of the Company dated
August 4, 1994 payable to Silverstone International Corp. in
the amount of $100,000.*

10.6 Common Stock Purchase Warrant dated August 4, 1994 to purchase
100,000 shares of Common Stock issued in the name of Glenoaks
Overseas Corp.*

10.7 Common Stock Purchase Warrant dated August 4, 1994 to purchase
100,000 shares of Common Stock issued in the name of
Silverstone International Corp.*

10.8 Option dated March 13, 1995 granted to Rowland W. Day II IRA
to purchase 200,000 shares of Common Stock at a price of $1.00
per share.*

10.9 Option dated March 13, 1995 granted to the Day Family Trust to
purchase 180,000 shares of Common Stock at a price of $1.00
per share.*

10.10 Option dated March 13, 1995 granted to Caldwell R. Campbell to
purchase 100,000 shares of Common Stock at a price of $1.00
per share.*

10.11 Option dated March 13, 1995 granted to Rowland W. Day to
purchase 50,000 shares of Common Stock at a price of $1.00 per
share.*

10.12 Option dated March 13, 1995 granted to Eric Meyer to purchase
10,000 shares of Common Stock at a price of $1.00 per share.*

10.13 Option dated March 13, 1995 granted to Donald Duffy to
purchase 10,000 shares of Common Stock at a price of $1.00 per
share.*

10.14 Employment Agreement dated as of September 1, 1994 between the
Company and Dennis Campbell.*

10.15 Employment Agreement dated as of February 8, 1995 between the
Company and Jeffrey L. Simons, as amended.

10.16 Lease dated August 5, 1993 between the Company and McFadden
Plaza.*

10.17 Lease dated November 1, 1994 between the Company and Valley
View Partnership.*

10.18 Lease dated February 20, 1995 between the Company and KD
Sauder Trust.*

10.19 Franchise Agreement between the Company and Steven Hyder, and
a Schedule identifying other franchise agreements to which the
Company is a party which are substantially identical to the
above-described Franchise Agreement except with respect to the
parties thereto, dates of execution and territory.

II-3
<PAGE> 54

10.20 Consulting Agreement dated April 6, 1995 between the Company
and Meyer, Duffy & Associates.*

10.21 The Non Qualified Directors Stock Option Plan of the Company.

10.22 The Incentive Stock Option Plan of the Company.

10.23 Employment Agreement dated as of September 11, 1995 between
the Company and William R. Gresher.

10.24 Consulting Agreement effective as of October 1, 1995 between
the Company and Meyer, Duffy and Associates.

10.25 Asset Purchase Agreement dated September 22, 1995 between the
Company, Joe Melia and Charles Melia.

10.26 Lease Agreement dated June 9, 1994 between Charles Melia
and Joe Melia and Westlake Professional Center Partnership
and Assignment thereof to the Company dated September 22, 1995.

21.1 List of Subsidiaries.

23.1 Consent of Lesley, Thomas, Schwarz & Postma.

23.2 Consent of Day & Campbell, counsel for the Registrant,
included in Exhibit 5.1.

24.1 Power of Attorney.*

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

* Previously filed

26. Undertakings

A. Supplementary and Periodic Information, Documents and Reports

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority in that
Section.

B. Item 512 Undertaking with Respect to Rule 415 Under the
Securities Act of 1933

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:

(a) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(b) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; and

(c) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.

II-4
<PAGE> 55
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post- effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.

C. Indemnification

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("Securities Act") may be permitted to directors,
officers or persons controlling the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

D. Item 512 Undertaking with Respect to Rule 430A

The undersigned registrant hereby undertakes that:

(i) For purposes of determining any liability under the
Securities Act of 1933, the registrant will treat the
information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act as part of this registration statement as of
the time it was declared effective.

(ii) For the purpose of determining any liability under
the Securities Act of 1933, the registrant will treat each
post-effective amendment that contains a form of prospectus as
a new registration statement for the securities offered in the
registration statement, and the offering of such securities at
that time as the initial bona fide offering thereof.

II-5
<PAGE> 56
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and has duly caused this
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Ana, State of
California on October 16, 1995.

BIKERS DREAM, INC.

By:/s/ Dennis Campbell
-----------------------------------
Dennis Campbell, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ Dennis Campbell October 16, 1995
- --------------------------------------------------------------------------------
Dennis Campbell, President (Principal
Executive Officer) and Director

/s/ William R. Gresher October 16, 1995
- --------------------------------------------------------------------------------
William R. Gresher, Senior Vice President and
Chief Financial Officer (Principal Financial
Officer and Principal Accounting
Officer) and Director

Richard E. King, Jr.* October 16, 1995
- --------------------------------------------------------------------------------
Richard E. King, Jr.,
Secretary and Director

Rowland W. Day II* October 16, 1995
- --------------------------------------------------------------------------------
Rowland W. Day II, Director

* Dennis Campbell, by signing his name hereto, does sign this Amendment
to Registration Statement on behalf of each of the indicated persons
on the date indicated pursuant to a power of attorney duly executed by
such person.

/s/ Dennis Campbell October 16, 1995
- --------------------------------------------------------------------------------
Dennis Campbell, Attorney-in-Fact

<PAGE> 57
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
No. Exhibits Page No.
- --- -------- --------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization dated August 4, 1994 among HDL
Communications (now known as Bikers Dream, Inc.), Bikers Dream, Inc.
and the stockholders of Bikers Dream, Inc., as amended by agreements
dated November 11, 1994, February 3, 1995 and February 20, 1995.*

3.1 Articles of Incorporation, as amended, of Bikers Dream, Inc.
(formerly known as HDL Communications).*

3.2 Certificate of Ownership of HDL Communications (now known as Bikers
Dream, Inc.).*

3.3 Bylaws, as amended, of Bikers Dream, Inc.*

5.1 Opinion of Day & Campbell.

10.1 Loan and Security Agreement between the Company and Rowland W. Day II
dated August 4, 1994, as amended by agreement dated February 3,
1995.*

10.2 Convertible Secured Promissory Note of the Company dated August 4,
1994 payable to Rowland W. Day II in the amount of $300,000.*

10.3 Loan and Security Agreement among the Company, Glenoaks Overseas
Corp. and Silverstone International Corp. dated August 4, 1994, as
amended by agreement dated February 3, 1995.*

10.4 Convertible Secured Promissory Note of the Company dated August 4,
1994 payable to Glenoaks Overseas Corp. in the amount of $100,000.*

10.5 Convertible Secured Promissory Note of the Company dated August 4,
1994 payable to Silverstone International Corp. in the amount of
$100,000.*

10.6 Common Stock Purchase Warrant dated August 4, 1994 to purchase
100,000 shares of Common Stock issued in the name of Glenoaks
Overseas Corp.*

10.7 Common Stock Purchase Warrant dated August 4, 1994 to purchase
100,000 shares of Common Stock issued in the name of Silverstone
International Corp.*

10.8 Option dated March 13, 1995 granted to Rowland W. Day II IRA to
purchase 200,000 shares of Common Stock at a price of $1.00 per
share.*

10.9 Option dated March 13, 1995 granted to the Day Family Trust to
purchase 180,000 shares of Common Stock at a price of $1.00 per
share.*

10.10 Option dated March 13, 1995 granted to Caldwell R. Campbell to
purchase 100,000 shares of Common Stock at a price of $1.00 per
share.*

10.11 Option dated March 13, 1995 granted to Rowland W. Day to purchase
50,000 shares of Common Stock at a price of $1.00 per share.*

10.12 Option dated March 13, 1995 granted to Eric Meyer to purchase 10,000
shares of Common Stock at
</TABLE>

<PAGE> 58
<TABLE>
<S> <C>
a price of $1.00 per share.*

10.13 Option dated March 13, 1995 granted to Donald Duffy to purchase
10,000 shares of Common Stock at a price of $1.00 per share.*

10.14 Employment Agreement dated as of September 1, 1994 between the
Company and Dennis Campbell.*

10.15 Employment Agreement dated as of February 8, 1995 between the Company
and Jeffrey L. Simons, as amended.

10.16 Lease dated August 5, 1993 between the Company and McFadden Plaza.*

10.17 Lease dated November 1, 1994 between the Company and Valley View
Partnership.*

10.18 Lease dated February 20, 1995 between the Company and KD Sauder
Trust.*

10.19 Franchise Agreement between the Company and Steven R. Hyder, and a
Schedule identifying other franchise agreements to which the Company
is a party which are substantially identical to the above-described
Franchise Agreement except with respect to the parties thereto, dates
of execution and territory.

10.20 Consulting Agreement dated April 6, 1995 between the Company and
Meyer, Duffy & Associates.*

10.21 The Non Qualified Directors Stock Option Plan of the Company.

10.22 The Incentive Stock Option Plan of the Company.

10.23 Employment Agreement dated as of September 11, 1995 between the
Company and William R. Gresher, as amended.

10.24 Consulting Agreement effective as of October 1, 1995 between the
Company and Meyer, Duffy and Associates.

10.25 Asset Purchase Agreement dated September 22, 1995 between the
Company, Joe Melia and Charles Melia.

10.26 Lease Agreement dated June 9, 1994 between Charles Melia and Joe
Melia and Westlake Professional Center Partnership, and Assignment
thereof to the Company.

21.1 List of Subsidiaries.

23.1 Consent of Lesley, Thomas, Schwarz & Postma.

23.2 Consent of Day & Campbell, counsel for the Registrant, included in
Exhibit 5.1.

24.1 Power of Attorney.*
</TABLE>

- ----------------------
*Previously filed

<PAGE> 1

[DAY & CAMPBELL LETTERHEAD]

05008.004

October 12, 1995

Bikers Dream, Inc.
1420 Village way
Santa Ana, California 92705

Re: Registration Statement on Form SB-2
(SEC Registration No. 33-92294)

Ladies and Gentlemen:

You have requested our opinion as counsel for Bikers Dream, Inc., a
California corporation (the "Company"), as to the matters set forth below in
connection with the registration under the Securities Act of 1933 on Form SB-2
(SEC Registration No. 33-92294) of 2,221,117 shares of the Company's Common
Stock, without par value (the "Shares"), including 595,000 Shares (the "Option
Shares") issuable upon exercise of outstanding options (the "Options").

We have examined the Company's Registration Statement on Form SB-2
(Registration No. 33-92294) filed with the Securities and Exchange Commission
("Commission") on May 31, 1995 (the "Registration Statement"), and Amendment
Number 1 thereto which was filed with the Commission on October 11, 1995. We
have also examined the Articles of Incorporation of the Company, as amended,
the Bylaws and the minute books of the Company, and such other documents as we
deemed pertinent as a basis for the opinion hereinafter expressed.

Based on the foregoing, it is our opinion that:

The Shares have been duly authorized and are, or in the case of the
Option Shares upon exercise of the respective Options and upon payment
therefor will be, legally and validly issued, fully paid and non-assessable.

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 5.1

<PAGE> 2
Bikers Dream, Inc.
October 12, 1995
Page 2

We consent to the inclusion of our name in the Registration
Statement under the caption "Legal Matters" and the filing of this opinion as
an exhibit to the Registration Statement.

Very truly yours,

DAY & CAMPBELL

CRC/sp

<PAGE> 1
EMPLOYMENT CONTRACT

BIKERS DREAM, INC., a California corporation, located at 1430 Village Way,
Santa Ana, California 92705, hereinafter referred to as the Employer, and
JEFFREY L. SIMONS of Milwaukee, Wisconsin, hereinafter referred to as the
Employee, in consideration of the mutual promises made herein, agree as
follows:

ARTICLE 1. TERM OF EMPLOYMENT

Specified Term

Section 1.01. The Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of five (5) years beginning on
March 1, 1995.

Earlier Termination

Section 1.02. This agreement may be terminated earlier as hereinafter
provided.

ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE

Title and Description of Duties

Section 2.01. Employee shall serve as Executive Vice President and Vice
President/Retail Operations and Merchandising of Bikers Dream, Inc. In that
capacity, Employee shall do and perform all services, acts, or things necessary
or advisable to fulfill the duties of a corporate Vice President with
management responsibilities in retailing, merchandising, store planning,
franchise operations and international marketing and distribution of Employer's
products and services. However, Employee shall at all times be subject to the
direction of the President, and to the policies established by the Board of
Directors, of Employer.

Loyal and Conscientious Performance of Duties

Section 2.02. Employee agrees that to the best of his ability and
experience he will at all times loyally and conscientiously perform all of the
duties and obligations required of him either expressly or implicitly by the
terms of this agreement.

Devotion of Entire Time to Employer's Business

Section 2.03. (a) Employee shall devote his entire productive time,
ability, and attention to the business of Employer during the term of this
contract.

(b) During the term of this agreement, Employee shall not engage in
any other business duties or pursuits whatsoever. Furthermore, during the term
of this agreement, Employee shall not, whether directly or indirectly, render
any services of a commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Employer's President.

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.15

<PAGE> 2
(c) This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
those activities do not interfere with the services required under this
agreement. However, Employee shall not, directly or indirectly, acquire, hold,
or retain any interest in any business competing with or similar in nature to
the business of Employer.

Competitive Activities

Section 2.04. During the term of this contract Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer.

Uniqueness of Employee's Services

Section 2.05. Employee hereby represents and agrees that the services
to be performed under the terms of this contract are of a special, unique,
unusual, extraordinary, and intellectual character that gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law. Employee therefore expressly agrees that
Employer, in addition to any other rights or remedies which Employer may
possess, shall be entitled to injunctive and other equitable relief to prevent
or remedy a breach of this contract by Employee.

Indemnification for Negligence or Misconduct

Section 2.06. Employee shall indemnify and hold Employer harmless from
all liability for loss, damage, or injury to persons or property resulting from
the negligence or misconduct of Employee.

Trade Secrets

Section 2.07. (a) The parties acknowledge and agree that during the
term of this agreement and in the course of the discharge of his duties
hereunder, Employee shall have access to and become acquainted with information
concerning the operation of Employer, including without limitation, marketing,
franchise information, financial information, personnel, sales, planning, and
other information that is owned by Employer and regularly used in the operation
of Employer's business and that this information constitutes Employer's trade
secrets.

(b) Employee agrees that he shall not disclose any such
trade secrets, directly or indirectly, to any other person or use them in any
way, either during the term of this agreement or at any other time thereafter,
except as is required in the course of his employment with Employer.

(c) Employee further agrees that all files, records,
documents, equipment, and similar items relating to Employer's business,
whether prepared by Employee or others, are and shall remain exclusively the
property of Employer and that they shall be removed from the premises of
Employer only with the express prior consent of Employer's President.

2
<PAGE> 3
Physical Examinations

Section 2.08. Employee agrees to submit himself annually for physical
examination by a physician selected by Employer for insurance purposes.

ARTICLE 3. OBLIGATIONS OF EMPLOYER

General Description

Section 3.01. Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.

Office and Staff

Section 3.02. Employee will maintain his office in his home in
Milwaukee, Wisconsin until such time as Employer may transfer Employee, which
shall not occur until January 1, 1996 or thereafter upon 60 days notice. If
and when such transfer occurs, Employer will provide Employee with suitable
office facilities. Employer will supply to Employee a laptop computer
equivalent to a NEC Versa E 486/DX 75 MHZ, 340 Mg HD 8 Mg ram, 14400 internal
modem, a suitable camera, cellular phone and pager, which items will remain the
property of Employer and will be returned in the event of termination of
employment for any reason. Employer will also supply Employee with equipment
for his home office, including, but not limited to, a fax machine, filing
cabinet, copier and the like, which equipment will remain the property of
Employer and will be returned in the event of termination for any reason.

Section 3.03. Employee may hire an administrative assistant, project
coordinator, field representative. and other support staff as deemed necessary
by Employer and Employee, at the expense of Employer; however, hiring of
personnel may occur only with the prior approval from time to time of the
President of Employer.

Indemnification of Losses of Employee

Section 3.04. Employer shall indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his duties on
Employer's behalf.

ARTICLE 4. COMPENSATION OF EMPLOYEE

Annual Salary

Section 4.01. (a) As compensation for the services to be rendered by
Employee hereunder, Employer shall pay Employee an annual salary at the rate
per annum of $108,000.00 payable in equal semi-monthly installments on the
fifth (5th) and twentieth (20th) days of each month during the period of
employment, prorated for any partial employment period.

(b) Employee may receive such annual increases in salary
as are determined by Employer's Board of Directors in its sole discretion.

3
<PAGE> 4
Tax Withholding

Section 4.02. Employer shall have the right to deduct or withhold from
the compensation due to Employee hereunder any and all sums required for
federal income and Social Security taxes and all state or local taxes now
applicable or that may be enacted and become applicable in the future.

ARTICLE 5. EMPLOYEE INCENTIVES

Cash Bonus Based on New Store Openings

Section 5.01. (a) Employer shall pay to Employee a cash bonus of
$2,750.00 contemporaneously with the opening of each new Bikers Dream store,
whether corporate or franchise, during the term of Employee's employment with
Employer, with the exception of the Dallas, Texas store, which is nearing
completion and opening at the time of execution hereof.

Restricted Stock Bonus

Section 5.02. (a) As additional compensation, Employer agrees to
transfer to Employee each year during the employment term, on a pro-rata
quarterly basis, the 10,000 shares of Employer's common stock for fiscal 1995,
15,000 shares for fiscal 1996, 20,000 shares for fiscal 1997, 25,000 shares for
fiscal year 1998, and 30,000 shares for fiscal 1999, which may be increased by
the Board of Directors based on performance.

(b) All shares transferred to Employee pursuant to this
section shall be subject to the restriction that they must be sold back to
Employer at book value, or current fair market value, whichever is greater, if
the employment term is terminated for any reason whatsoever, except the death
of Employee, prior to the completion of the term of the employment specified
herein. The stock repurchase shall be at the option of Employer, and shall be
consummated within ninety (90) days of termination.

ARTICLE 6. EMPLOYEE BENEFITS

Annual Vacation

Section 6.01. Employee shall be entitled to one week vacation time for
each four months continuous service with pay. Employee may be absent from his
employment for vacation only at such times as Employer's President shall
determine from time to time. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he shall be deemed to have waived any entitlement to vacation time for
that year.

Group Medical Insurance

Section 6.04. Employer agrees to continue, by direct payment of
reimbursement, Employee's present group medical insurance coverage at $350.00
per month, to a maximum of $600.00 per month, at the same benefit level as at
present, if premiums are increased.

4
<PAGE> 5
ARTICLE 7. BUSINESS EXPENSES

Business Expenses

Section 7.01. (a) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee in promoting the business of
Employer, including expenditures for entertainment and travel. The meal budget
for Employee shall be a per diem of $35.00 while traveling. Frequent flyer
awards for the first year of employment shall be the property of Employer.

(b) Each such expenditure shall be reimbursable only if
it is of a nature qualifying it as a proper deduction on the federal and state
income tax return of Employer.

(c) Each such expenditure shall be reimbursable only if
Employee furnishes to Employer adequate records and other documentary evidence
required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of that expenditure as an
income tax deduction.

Relocation Expenses

Section 7.02. In the event that Employee is relocated/transferred,
Employer will pay all reasonable relocation expenses of Employee, including,
but not limited to, movers, vehicle mover, temporary lodging, and travel
expense, but excluding purchase of any residence of Employee. In addition,
Employer will reimburse initial moving expenses at the outset of employment,
not to exceed $1,000.00.

ARTICLE 8. TERMINATION OF EMPLOYMENT

Termination for Cause

Section 8.01. (a) Employer reserves the right to terminate this
agreement if employee (1) wilfully breaches or habitually neglects the duties
which he is required to perform under the terms of this agreement, or (2)
commits acts of dishonesty, fraud, misrepresentation, or other acts of moral
turpitude, that would prevent the effective performance of his duties.

(b) Employer may at its option terminate this agreement
for the reasons stated in this section by giving written notice of termination
to Employee without prejudice to any other remedy to which Employer may be
entitled either at law, in equity, or under this agreement.

(c) The notice of termination required by this section
shall specify the ground for the termination and shall be supported by a
statement of relevant facts.

(d) Termination under this section shall be considered
"for cause" for the purposes of this agreement.

5
<PAGE> 6
Termination Without Cause

Section 8.02. (a) This agreement shall be terminated upon the death of
Employee.

(b) Employer reserves the right to terminate this
agreement within three (3) months after Employee suffers any physical or mental
disability that would prevent the performance of his duties under this
agreement. Such a termination shall be effected by giving ten (10) days'
written notice of termination to Employee.

Effect of Merger, Transfer of Assets, or Dissolution

Section 8.03. (a) This agreement shall not be terminated by any
voluntary or involuntary dissolution of Employer resulting from either a merger
or consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.

Termination by Employee

Section 8.04. Employee may terminate his obligations under this
agreement by giving Employer at least four (4) months notice in advance.

Effect on Compensation

Section 8.05. In the event that this agreement is terminated prior to
the completion of the term of employment specified herein, Employee shall be
entitled to the compensation earned by and vested in him prior to the date of
termination as provided for in this agreement, computed pro rata up to and
including that date. Employee shall be entitled to no further compensation as
of the date of termination.

Section 8.06. In the event Employee is terminated without cause,
Employee shall be entitled to severance compensation equivalent to 75% of his
base pay for a period equivalent to the number of months of completed service,
not to exceed a period of 24 months, and payable semi-monthly for the duration
of that period.

ARTICLE 9. GENERAL PROVISIONS

Notices

Section 9.01. Any notices to be given by either party to the other
shall be in writing and may be transmitted either by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written

6
<PAGE> 7
notice in accordance with this section. Notices delivered personally shall be
deemed communicated as of the date of actual receipt; mailed notices shall be
deemed communicated as of the date of mailing.

Arbitration

Section 9.02. (a) Any controversy between Employer and Employee
involving the construction or application of any of the terms, provisions, or
conditions of this agreement shall on the written request of either party
served on the other be submitted to arbitration. Arbitration shall comply with
and be governed by the provisions of the California Arbitration Act, or shall
be submitted to an alternative dispute resolution panel.

(b) Employer and Employee shall each appoint one person
to hear and determine the dispute. If the two persons so appointed are unable
to agree, then those persons shall select a third impartial arbitrator whose
decision shall be final and conclusive upon both parties.

Attorneys' Fees and Costs

Section 9.03. If any legal action is necessary to enforce or interpret
the terms of this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.

Entire Agreement

Section 9.04. This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer, and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by
any party, or anyone acting on behalf of any party, which are not embodied
herein, and that no other agreement, statement, or promise not contained in
this agreement shall be valid or binding.

Modifications

Section 9.05. Any modification of this agreement will be effective
only if it is in writing signed by the party to be charged.

7
<PAGE> 8
Effect of Waiver

Section 9.06. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times b e deemed a waiver or relinquishment of that right or power
for all or any other times.

Partial Invalidity

Section 9.07. If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.

Law Governing Agreement

Section 9.08. This agreement shall be governed by and construed in
accordance with the laws of the State of California.

Sums Due Deceased Employee

Section 9.09. If Employee dies prior to the expiration of the term of
his employment, any sums that may be due him from Employer under this agreement
as of the date of death shall be paid to Employee's executors, administrators,
heirs, personal representatives, successors, and assigns.

Executed on February 8, 1995 at Santa Ana, California.

EMPLOYER

Bikers Dream, Inc.

By /s/ DENNIS CAMPBELL
-------------------------------
Dennis Campbell, President

EMPLOYEE

/s/ JEFFREY L. SIMONS
-------------------------------
Jeffrey L. Simons

8
<PAGE> 9
AMENDMENT TO EMPLOYMENT CONTRACT FOR

EXECUTIVE VICE PRESIDENT

THIS AMENDMENT is to that certain Employment Contract by and between
Bikers Dream, Inc., a California Corporation, ("Employer") and Jeffrey Simons,
Executive Vice President, ("Employee") entered, which became effective on
March 1, 1995.

A) Cash Bonus Based on New Store Openings

Article 5, Section 5.01 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employer shall pay to Employee a cash bonus of $2,750.00
contemporaneously with the opening of each Bikers Dream Store, as to
company owned stores (not including repurchased franchises), and as to
franchise stores, 20% of the franchise fee received by Employer."

B) Stock Options

Article 5, Section 5.02(a), relating to Restricted Stock Bonuses is
deleted in its entirety and the following language substituted
therefor: "As additional incentive compensation, Employer grants to
Employee stock options under its Incentive Stock Option Plan, vesting
on a pro-rata quarterly basis, 10,000 shares of Employer's common
stock for fiscal 1995, 15,000 shares for fiscal 1996, 20,000 shares
for fiscal year 1997, 25,000 shares for fiscal year 1998, and 30,000
shares for fiscal year 1999. Such stock options are granted at a
price of $1.50 per share, the fair market value of the stock on the
date of adoption of the Plan, April 4, 1995."

Stock Option grants may be increased by the Board of Directors in its
sole discretion.

Section 5.02(b) is deleted in its entirety, and the following language
substituted therefore: "Employee will be entitled to cash bonuses at
the time the Stock Options indicated in Section B above are exercised.
The net amount of the bonuses will be equal to the number of shares
exercised under the Stock Option times the Option price of
$1.50/share. The Employer will be responsible for payment of the
Federal, State, FICA, Medicaid and SDI taxes on this bonus."

1
<PAGE> 10
C) Officer and Directors Liability Insurance

The company will cover Employee under Employer's Director's and
Officer's liability insurance in equal comparable amounts to that
coverage provided to other officers and directors of Employer when
such coverage is available.

D) To the extent this Amendment shall be inconsistent with the Employment
Agreement of May 11, 1995, this document shall prevail.

E) In all other respects, the Employment Agreement on May 11, 1995
between the parties hereto is confirmed and ratified in its entirety.

Employer

Bikers Dream, Inc. Dated: 29 Sept. 95
-------------------------------

By: /s/ DENNIS CAMPBELL By: /s/ JEFFREY SIMONS
----------------------------------- ----------------------------------
Dennis Campbell, Jeffrey Simons,
President and CEO Executive Vice President

<PAGE> 1

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Preliminary Statement . . . . . . . . . . . . . . . . . . . . . . 1
2. Grant of Franchise . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Duration of This Agreement . . . . . . . . . . . . . . . . . . . . 1
4. Initial Franchise Fee . . . . . . . . . . . . . . . . . . . . . . 1
5. Recurring Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Franchise and Advertising Fees . . . . . . . . . . . . . . . 2
B. Gross Receipts . . . . . . . . . . . . . . . . . . . . . . . 2
C. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Restriction to Location of BDI STORES and Limitation on Number
BDI STORES in Franchisee's Area . . . . . . . . . . . . . . . . . 2
A. Restriction of Location . . . . . . . . . . . . . . . . . . 2
B. Limitation on Number of BDI STORES in Franchisee's Area . . 2
C. Right of First Refusal . . . . . . . . . . . . . . . . . . . 3
D. Location Zone and Franchise Area . . . . . . . . . . . . . . 3
7. Lease, Construction and Opening of BDI STORE . . . . . . . . . . . 3
A. Lease or Purchase . . . . . . . . . . . . . . . . . . . . . 3
B. Construction of BDI STORE . . . . . . . . . . . . . . . . . 4
C. Equipment, Signs and Inventory . . . . . . . . . . . . . . . 4
D. BDI STORE Opening . . . . . . . . . . . . . . . . . . . . . 4
E. Termination of Franchisee for Failure to open BDI STORE . . 5
8. Training and Operations Assistance . . . . . . . . . . . . . . . . 5
A. Training . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Requirement of Completion of Training/Failure to Complete . . 5
C. Hiring of Employees and Training . . . . . . . . . . . . . . 5
D. Operations Assistance . . . . . . . . . . . . . . . . . . . 6
E. Group Purchasing of Inventory . . . . . . . . . . . . . . . 6
F. Product Availability . . . . . . . . . . . . . . . . . . . . 6
G. Delivery of Equipment and Services . . . . . . . . . . . . . 6
9. Operation of BDI STORE . . . . . . . . . . . . . . . . . . . . . . 6
A. Operating Standards . . . . . . . . . . . . . . . . . . . . 6
B. Alteration to BDI STORE . . . . . . . . . . . . . . . . . . 7
C. Uniformity, Authorized Services . . . . . . . . . . . . . . 7
D. Use of Approved Products . . . . . . . . . . . . . . . . . . 7
E. Materials Imprinted with Names . . . . . . . . . . . . . . . 8
F. Standards, Specifications & Procedures . . . . . . . . . . . 8
G. Compliance with Law and Good Business Practices . . . . . . 8
H. Prices for Services Determined by Franchisee . . . . . . . . 9
I. Duty to Manage and Avoid Conflicting or Competing Interests 9
J. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 9
K. Operations Meetings . . . . . . . . . . . . . . . . . . . . 10
10. Procedures and Operating Manual . . . . . . . . . . . . . . . . . 10
11. Trade Secrets . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.19
<PAGE> 2
<TABLE>
<S> <C> <C>
12. Advertising and Promotion . . . . . . . . . . . . . . . . . . . . 10
13. Records Keeping Standards and Reporting Procedures . . . . . . . . 11
A. Records and Accounting . . . . . . . . . . . . . . . . . . . 11
B. Business Reports and Tax Returns . . . . . . . . . . . . . . 11
C. Financial Statements . . . . . . . . . . . . . . . . . . . . 11
14. Names and Marks . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. ownership of Names and Marks . . . . . . . . . . . . . . . . 12
B. Limitation on Use of Names and Marks by Franchisee . . . . . 12
C. Notification of Infringement and Claims . . . . . . . . . . 12
D. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 12
15. Inspections and Audits . . . . . . . . . . . . . . . . . . . . . . 13
A. Right of Inspection . . . . . . . . . . . . . . . . . . . . 13
B. Right of Audit . . . . . . . . . . . . . . . . . . . . . . . 13
16. Termination of Franchise . . . . . . . . . . . . . . . . . . . . . 13
A. By Franchisee . . . . . . . . . . . . . . . . . . . . . . . 13
B. By BDI . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
17. Franchisee's Rights and Obligations Upon Termination or Expiration 15
A. Payment of amounts Owed to BDI . . . . . . . . . . . . . . . 15
B. Return of Proprietary Materials . . . . . . . . . . . . . . 15
C. Repurchase . . . . . . . . . . . . . . . . . . . . . . . . 15
D. Cancellation of Assumed Names and Transfer of
Telephone Numbers . . . . . . . . . . . . . . . . . . . . . 15
E. Modification of Agreement by Franchisee . . . . . . . . . . 15
F. Modification of Agreement by BDI . . . . . . . . . . . . . . 15
G. Assignment by BDI . . . . . . . . . . . . . . . . . . . . . 15
H. Death or Incapacity of Franchisee . . . . . . . . . . . . . 15
I. Removal of All Signs and Identification . . . . . . . . . . 16
J. Covenant Not to Compete . . . . . . . . . . . . . . . . . . 16
K. Continuing Obligation . . . . . . . . . . . . . . . . . . . 16
L. Franchisee's Right to Sell BDI STORE . . . . . . . . . . . . 16
18. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
A. By BDI . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
B. Franchisee May Not Assign Without Approval of BDI . . . . . 17
C. Assignment to Partnership or Corporation . . . . . . . . . . 17
D. BDI'S Right of First Refusal . . . . . . . . . . . . . . . . 17
19. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
A. Judicial Enforcement . . . . . . . . . . . . . . . . . . . . 18
B. Jurisdiction, Venue and Waiver of Jury Trial . . . . . . . . 18
C. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . 19
D. Severability and Substitution of Valid Provisions . . . . . 19
E. Waiver of Obligations . . . . . . . . . . . . . . . . . . . . 19
F. Franchisee May Not Withhold Payments Due BDI . . . . . . . . 19
G. Rights of Parties are Cumulative . . . . . . . . . . . . . . 20
H. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 20
I. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 20
J. Construction . . . . . . . . . . . . . . . . . . . . . . . . 20
20. Independent Contractors/Indemnification . . . . . . . . . . . . . 20
21. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
22. Failures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
23. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 3
BIKER'S DREAM, INC.

FRANCHISE AGREEMENT

THIS AGREEMENT is made and entered into this 21st day of November,
1994 by and between BIKER'S DREAM, Inc., a California Corporation (hereinafter
"BDI") and STEVEN R. HYDER (hereinafter "FRANCHISEE"), whose principal address
is: SCPLO SE, ALBUQUERQUE, NEW MEXICO 87123

1. PRELIMINARY STATEMENT. BDI is developing a chain of
Motorcycle, motorcycle parts, accessories and service Dealerships under the
trade name "BIKER'S DREAM" (hereinafter "BDI"). Each BDI LOCATION is built to
standard specifications and uses standard operating procedures, equipment,
forms, signs and designs. All BDI LOCATIONS are to be operated in accordance
with franchise uniform standards of identity, quality, appearance, operating
methods and services provided.

2. GRANT OF FRANCHISE. BDI hereby grants to FRANCHISEE, as an
individual, subject to the provisions of this Agreement, a franchise to operate
one (1) BDI LOCATION within the following location zone:

THE STATE OF NEW MEXICO
CITY OF ALBUQUERQUE WILL BE THE
PHYSICAL LOCATION OF STORE

3. DURATION OF THIS AGREEMENT. This agreement shall begin as of
the date of execution hereof and shall continue for a term of fifteen (15)
years and, unless either party gives written notice of its intention to
terminate this Agreement at least one hundred eighty (180) days prior to the
expiration of the fifteen (15) year term, the term of this Agreement shall be
deemed to be renewed for five (5) years and thereafter for further periods of
five (5) years duration, unless BDI or FRANCHISEE mails a written notice of
intention not to renew to the other party at least one hundred eighty (180)
days prior to the end of any renewal period. If such notice is so mailed, the
Agreement shall terminate as to all parties at the end of the current period.

4. INITIAL FRANCHISE FEE. FRANCHISEE shall pay to BDI a
nonrefundable initial franchise fee in the amount of Fifteen thousand dollars
($15,000.00) in cash, payable in cash upon the execution of this Agreement.
The initial franchise fee shall be fully earned by BDI when paid, provided that
if BDI elects to terminate the franchise due to the failure of FRANCHISEE to
complete satisfactorily the prescribed training program or to lease or purchase
suitable premises for the BDI LOCATION, or to open the BDI LOCATION in the time
prescribed in this agreement,

1.
<PAGE> 4
BDI shall refund to FRANCHISEE that part of the initial franchise fee
heretofore paid by FRANCHISEE. BDI shall have the right, at its option, to
repurchase at cost any and all equipment, supplies and training material which
it sold to FRANCHISEE.

5. RECURRING FEES.

(A) FRANCHISE AND ADVERTISING FEES. Beginning at the time
FRANCHISEE opens the BDI LOCATION for business and through the duration of this
franchise agreement, FRANCHISEE shall pay to BDI in weekly amounts, recurring
franchise fees of a sum equal to five (5%) percent and advertising trust fund
contributions of a sum equal to two (2%) percent (or $250.00, whichever is
greater) of the gross receipts for the preceding calendar week from the BDI
LOCATION operated by FRANCHISEE. The check or money order in full payment of
the said recurring franchise fee and the advertising trust fund contribution
for the preceding week shall be transmitted with the weekly business report and
shall be due and payable at the home office of BDI at 1420 Village Way, Santa
Ana, CA 92705 by 5:00 p.m. on Thursday, the 3rd day after the day on which the
weekly business report is mailed. These fees are nonrefundable.

(B) GROSS RECEIPTS. "Gross receipts" shall consist of money and
other consideration of any kind howsoever received by FRANCHISEE from any
source as the result of, or in connection with, the exercise of the franchise
granted hereunder including but not limited to all monies or other
consideration received for clothing, accessories and services sold and/or
rendered within or without the BDI LOCATION being operated by FRANCHISEE under
this franchise. Monies received from Motorcycle sales are not considered "Gross
receipts".

(C) INTEREST. All recurring franchise fees, advertising trust
account contributions and amounts owed for products purchased by FRANCHISEE
pursuant to the franchise shall bear interest after due date at the current six
month Treasury Bill rate plus two (2%) percent.

6. RESTRICTION TO LOCATION OF BDI LOCATIONS AND LIMITATION ON
NUMBER OF BDI LOCATIONS IN FRANCHISEE'S AREA.

(A) RESTRICTION OF LOCATION. FRANCHISEE may operate the BDI
LOCATION only within the Location Zone identified herein or a substitute
location and/or premises hereinafter approved by BDI in writing. Specific
location must be approved by BDI. If the FRANCHISEE'S lease for the premises
of the BDI LOCATION expires or terminates without fault of FRANCHISEE, or if
the premises are damaged, condemned or otherwise rendered unusable, or if in
the judgment of BDI and FRANCHISEE there is a change in the character of the
location of the BDI LOCATION sufficiently detrimental to its business potential
to warrant its relocation, BDI will grant permission for relocation of the BDI
LOCATION to a location and premises approved by BDI.

(B) LIMITATION ON NUMBER OF BDI LOCATIONS IN FRANCHISEE'S AREA.
BDI agrees that the number of franchised BDI LOCATIONS shall be limited to a
maximum of one BDI LOCATIONS within the Location Zone. BDI will not establish
any franchised or Company owned BDI LOCATIONS within ten (10) miles of
Franchisee's location without Franchisee's consent.

2.
<PAGE> 5
(C) RIGHT OF FIRST REFUSAL. FRANCHISEE shall have the right of
first refusal for any franchise which BDI proposes to grant immediately
adjacent to FRANCHISEE'S Franchise Area, as designated below. To exercise this
right, FRANCHISEE must execute the then current Franchise Agreement and pay ten
thousand dollars ($10,000.00) of the then current initial franchise fee within
fifteen (15) days of written notification of the proposed grant of franchise.
The balance of the initial franchise fee shall be payable within an additional
thirty (30) days.

(D) LOCATION ZONE. The BDI LOCATION to be operated pursuant to
this Franchise Agreement shall be located within the following designated
Location Zone:

El Paso, Texas
Durango, Colorado

For the term of this agreement, BDI will not grant any new franchises or open
any company-owned BDI LOCATIONS within the Location Zone.

7. LEASE, CONSTRUCTION AND OPENING OF BDI LOCATION.

(A) LEASE OR PURCHASE. FRANCHISEE will lease or purchase the
premises of the BDI LOCATION described in paragraph 2 of this Agreement within
ninety (90) days after execution of this Agreement. If specific premises are
not identified in paragraph 2 of this Agreement, FRANCHISEE agrees to lease or
purchase suitable premises, reasonably acceptable to BDI, within ninety (90)
days after execution of this Agreement. If FRANCHISEE fails to lease or
purchase suitable premises within ninety (90) days after execution of this
Agreement, BDI may terminate this Agreement, effective upon delivery of written
notice of termination to FRANCHISEE. In the event of such termination, the

3.
<PAGE> 6
parties agree to execute all instruments required to rescind fully all
agreements, purchases and any other transaction between BDI and FRANCHISEE.
Upon execution of all required instruments, BDI shall refund to FRANCHISEE that
part of the initial franchise fee heretofore paid by FRANCHISEE, less Two
Thousand Five Hundred Dollars ($2,500.00) dollars to cover training and
administration expense, whether or not training has been completed. BDI shall
have the right, at its option to repurchase at cost any or all
equipment,supplies and training material which it sold to FRANCHISEE.

(B) CONSTRUCTION OF BDI LOCATION. BDI will furnish to FRANCHISEE
its standard detailed specifications for a BDI LOCATION, including requirements
for dimensions, exterior design, interior layout, building materials,
equipment, signs and color scheme. FRANCHISEE agrees to do or cause to be done
the following:

(1) obtain all required building, utility, sign, use,
health, sanitation and business permits, licenses and other required
permits and licenses;

(2) submit to BDI for its approval FRANCHISEE'S BDI
LOCATION plans;

(3) construct the premises and paint the premises in
compliance with plans and specifications approved by BDI;

(4) purchase or lease and install all equipment and signs
required for the BDI LOCATION; and

(5) secure all financing required by FRANCHISEE to fully
develop the BDI LOCATION.

(C) EQUIPMENT, SIGNS AND INVENTORY. BDI will provide FRANCHISEE
with a complete list of all inventory, parts, components, accessories, signs
and equipment required to open the BDI LOCATION. FRANCHISEE agrees to use in
the operation of his BDI LOCATION only those brands of inventory, parts,
components, accessories, signs and equipment that BDI has approved for BDI
LOCATIONS as meeting its standards and specifications for function,
attractiveness, serviceability and overall appearance. FRANCHISEE may purchase
or lease approved brands of these items from any supplier If FRANCHISEE
proposes to purchase or lease any brand which is not then approved by BDI,
FRANCHISEE shall first notify BDI and shall submit to BDI, upon its request,
sufficient specifications, photographs, drawings and/or other information or
samples for determination by BDI whether such brand of inventory, parts,
components, accessories, signs and equipment complies with its standards and
specifications, which determination will be made and communicated to FRANCHISEE
in writing within a reasonable time.

(D) BDI LOCATION OPENING. Upon completion of FRANCHISEE'S
training program, as described in paragraph 8 of this agreement, and within
fifteen (15) days after BDI'S determination that the premises described herein
are in suitable condition and comply with the standards and specifications
prescribed by BDI, FRANCHISEE agrees to open the BDI LOCATION for business and
commence the conduct of business. BDI will assist FRANCHISEE in the opening of
the BDI LOCATION.

4.
<PAGE> 7
ADDENDUM TO FRANCHISE AGREEMENT

1. The franchise will probably be put in a corporation.
If so, it will be the only business in said corporation.

2. Franchise area will include all of the State of New
Mexico. Because of the low population and sparsely populated
areas, this will enable me to focus on mail order business
throughout the State. The physical location will be in
Albuquerque. No other Company owned BDI LOCATIONS will be
established in New Mexico. No other franchised locations will
be established in New Mexico with any other party or parties.

3. I will have a specific first right of refusal for the
El Paso, Texas area as well as for the Durango, Colorado area.
To enable me to properly evaluate the feasibility of these
locations at any given time, I will need 60 days, rather than
15 days, and another 30 days to arrange financing.

4. Weekly reports will be mailed on Mondays. I will not
be penalized for late mail service.

5. I will have the right to carry and sell the
"Illusion" motorcycles, and the "Indian" motorcycles (if that
dealership becomes available) within the franchise location.

6. The advertising fund fee shall be waived for a period
of six months beginning on the first day of opening the
location.

7. In terms of any visits or audits, as outlined in
Section 15, I will be given at least one day prior notice.

8. I will be responsible only for my employees expenses
to attend training in California. I will not be responsible
for BDI's expenses when training in New Mexico.

9. The 3% figure regarding audits and variances will be
raised to 5%.

5.
<PAGE> 8
(E) TERMINATION OF FRANCHISEE FOR FAILURE TO OPEN BDI LOCATION.

If the FRANCHISEE fails to complete preparation of the BDI LOCATION
and open the BDI LOCATION for business within one hundred eighty (180) days
after execution of this Agreement, BDI shall have the right to terminate this
Agreement, effective upon delivery to FRANCHISEE of written notice of
termination. In the event of such termination and upon delivery to BDI of all
releases, waivers and other instruments required to rescind fully all
agreements, purchases and other transactions between BDI and FRANCHISEE, BDI
shall refund to FRANCHISEE that part of the initial franchise fee paid by
FRANCHISEE, less Two Thousand Five Hundred Dollars ($2,500.00) for training and
administrative expense (or actual costs incurred), whichever is greater. BDI
shall have the right, at its option, to repurchase at cost any or all
equipment, supplies, inventory and training material which it sold to
FRANCHISEE.

8. TRAINING AND OPERATIONS ASSISTANCE.

(A) TRAINING. Before the opening of the BDI LOCATION, BDI shall
train FRANCHISEE in the operation of a BDI LOCATION. Such training shall take
place at a time and place specified by BDI. Training will be conducted at the
BDI home office at 1420 Village Way, Santa Ana CA 92705 and at FRANCHISEE'S
location. Training will be for one week at each location. Training at home
office will be completed within sixty (60) days after signing this agreement.
Training at Franchisee's location will be completed prior to and during first
week of operation of Franchisee's BDI LOCATION. FRANCHISEE shall be
responsible for any travel and living expenses incurred in connection with the
training program. Training will cover four distinct areas: (1) Operation of a
BDI LOCATION; (2) Purchasing and financing motorcycles, parts, and accessories;
(3) Sales and marketing; (4) Business and systems procedures. Initial training
class may be attended by three persons, one of which must be FRANCHISEE.

(B) REQUIREMENT OF COMPLETION OF TRAINING/FAILURE TO COMPLETE.
FRANCHISEE shall complete the training program provided by BDI. If BDI
reasonably determines that FRANCHISEE is unable to complete satisfactorily the
said training program, this Agreement shall terminate and upon delivery to BDI
of all assignments, releases, waivers and other instruments required to rescind
fully all agreements, purchases and other transactions between BDI and
FRANCHISEE, BDI shall refund to FRANCHISEE that part of the initial franchise
fee paid by FRANCHISEE to BDI pursuant to this agreement. BDI shall have the
right, at its option, to repurchase at cost any or all equipment, supplies and
training material which it sold to FRANCHISEE.

(C) HIRING OF EMPLOYEES AND TRAINING OF EMPLOYEES BY FRANCHISEE.
FRANCHISEE shall hire all employees of the BDI LOCATION and be exclusively
responsible for the terms of their employment,'compensation and the training of
such employees in the proper conduct of their jobs in operation of a BDI
LOCATION. BDI will make available to FRANCHISEE training for new employees or
updating those already employed. Such training and updating shall take place
at a time and place specified by BDI. Training will be conducted at the BDI
home office or at another BDI LOCATION designated by BDI. FRANCHISEE shall be
responsible for any travel and living expenses incurred by such employees, in
connection with the training.

6.
<PAGE> 9
(D) OPERATIONS ASSISTANCE. BDI shall advise FRANCHISEE of
problems arising out of the operation of the BDI LOCATION as disclosed by
reports submitted to BDI by FRANCHISEE or by inspections conducted by BDI of
the BDI LOCATION. BDI will furnish FRANCHISEE with such assistance in
connection with the operation of the BDI LOCATION as is reasonably determined
to be necessary by BDI from time to time. Operations assistance may consist of
advice and guidance with respect to:

(1) proper utilization of procedures developed for a BDI
LOCATION including sales and display procedures developed by BDI;

(2) additional services and products authorized for BDI
LOCATIONS;

(3) purchase of various products, materials and supplies;

(4) the institution of proper administrative,
bookkeeping, accounting, inventory control, supervisory and general
operating procedures for the effective operation of a BDI LOCATION;

(5) advertising and promotional programs.

(E) GROUP PURCHASING OF INVENTORY AND SUPPLIES. FRANCHISEE shall
have the right to participate on the same basis as other franchisees of BDI and
BDI owned BDI LOCATIONS in group purchasing of motorcycles, parts,
accessories, and other materials and supplies which BDI may from time to time
develop and sponsor.

(F) PRODUCT AVAILABILITY. During the term of this Agreement, BDI
will make available for purchase by FRANCHISEE approved products necessary to
operate a BDI LOCATION.

(G) DELIVERY OF EQUIPMENT AND SERVICES. All of the
specifications, equipment and inventory lists, training, equipment, operations
manuals, and pre-opening operations assistance to be provided by BDI to
FRANCHISEE pursuant to this Agreement shall be delivered within ninety (90)
days after execution of this Agreement.

9. OPERATION OF BDI LOCATION.

(A) OPERATING STANDARDS. FRANCHISE agrees to operate and maintain
his BDI LOCATION in a manner consistent with the public image of a BDI LOCATION
as a clean, modern and efficient retail motorcycle, parts and accessories
store, providing high quality products and services. FRANCHISEE agrees to
effect a maintenance program for the BDI LOCATION which will assure such
condition, appearance and operation, including replacement of worn out or
obsolete equipment and signs, repair of the interior and exterior of the BDI
LOCATION, painting and periodic cleaning, consistent with the nature of the
business of the BDI LOCATION and the reputation of BDI. If, at any time in
BDI'S reasonable judgement, the general state of repair, appearance of
cleanliness of the premises of the BDI LOCATION or its equipment or signs does
not meet BDI'S

7.
<PAGE> 10
standards therefor, BDI shall so notify FRANCHISEE specifying the action to be
taken by FRANCHISEE to correct such deficiency. If FRANCHISEE fails or refuses
to initiate corrective action within thirty (30) days after receipt of such
notice, and thereafter continue, a bona fide program to undertake and complete
any such required maintenance, BDI shall have the right, but shall not be
obligated, to enter upon the premises of the BDI LOCATION and effect such
repairs, painting and/or replacement of equipment or signs on behalf of
FRANCHISEE and FRANCHISEE shall pay the entire costs thereof to BDI upon
demand.

(B) ALTERATIONS TO BDI LOCATION. FRANCHISEE agrees that he shall
make no material alterations to the structural improvements or appearance of
the BDI LOCATION nor shall FRANCHISEE make any material replacements or
alterations to the equipment or signs of the BDI LOCATION without prior written
approval of BDI.

(C) UNIFORMITY, AUTHORIZED PRODUCTS AND SERVICES. Uniformity of
products, procedures and services and the image such uniformity creates in the
mind of the public are essential elements of a successful franchise chain.
FRANCHISEE therefore agrees to offer motorcycles, parts, accessories, services
and products which BDI from time to time authorizes for BDI LOCATIONS
FRANCHISEE agrees to submit written requests for authorization of additional
products or services to be offered for sale at FRANCHISEE'S BDI LOCATION.
FRANCHISEE further agrees that the BDI LOCATION will not, without prior written
approval by BDI, offer any other products or services nor shall the BDI
LOCATION or the premises it occupies be used for any purpose other than the
operation of an authorized BDI LOCATION in compliance with the terms of the
Agreement.

(D) USE OF APPROVED PRODUCTS. Consistency of quality in the
products and services offered by BDI is essential to the maintenance and
enhancement of BDI'S reputation and the good will it has generated by the sale
of high quality products and the efficient delivery of high quality services to
its customers. For these reasons FRANCHISEE agrees that all motorcycles,
parts, accessories and other inventory, materials and supplies used in the
operation of the BDI LOCATION shall be purchased by FRANCHISEE from the list of
types or brands approved by BDI as meeting its specifications and standards.
If FRANCHISEE desires to use in the operation of the BDI LOCATION any type or
brand of motorcycles, accessories and other inventory, materials and supplies
which is not then approved by BDI as meeting its standards and specifications,
FRANCHISEE shall first notify BDI, in writing, and shall upon request by BDI
submit samples and such other information as BDI reasonably requires for
examination and/or testing to determine otherwise whether such product meets
its standards and specifications. BDI shall notify FRANCHISEE within a
reasonable tire whether it approves such product. The BDI LOCATION shall at
all times maintain an inventory of motorcycles, parts, accessories and other
inventory, materials and supplies, sufficient to satisfy customer demand and
operate efficiently.

8.
<PAGE> 11
(E) MATERIALS IMPRINTED WITH NAMES AND MARKS. FRANCHISEE shall
in the operation of the BDI LOCATION utilize letterheads, business cards, forms
and other materials imprinted with the Names and Marks as prescribed from time
to time by BDI.

(F) STANDARDS, SPECIFICATIONS AND PROCEDURES. FRANCHISEE agrees
as a material part of the consideration of this Agreement to comply with all
mandatory standards, specifications and operating procedures relating to the
operation of a BDI LOCATION, including but not limited to the following:

(1) use of standard sales and operating procedures;

(2) general appearance of employees;

(3) use of quality products and high standards of methods
and procedures relating to retail business;

(4) use of Names and Marks;

(5) prescribed hours of operation during which the BDI
LOCATION will be open for business;

(6) use of standard forms, programs, formats, and records
keeping including the preparation and retention of duplicate customer
sales slips and related documents;

(7) identification of the FRANCHISEE as the owner of the
BDI LOCATION; and

(8) proper use and illumination of BDI signs, posters,
displays and other advertising and promotional displays as prescribed
by BDI from time to time.

BDI agrees that all such standards, specifications, procedures and operating
requirements shall be reasonable and consistent with the obligations of
FRANCHISEE under the lease or deed for the premises of the BDI LOCATION and
applicable ordinances. Mandatory standards, specifications and operating
procedures prescribed from time to time by BDI in the procedures and operating
manuals for BDI LOCATIONS or otherwise communicated to FRANCHISEE in writing,
shall constitute provisions of this Agreement as if fully set forth herein.
All references herein to this Agreement shall include all such mandatory
standards, specifications and operating procedures. BDI reserves the absolute
right to change, modify, add to or delete any and all standards, specifications
and operating procedures.

(G) COMPLIANCE WITH LAW AND GOOD BUSINESS PRACTICES. FRANCHISEE
shall secure, file and maintain in full force and effect all required licenses,
permits, certificates, notices and disclosures relating to the operation of a
BDI LOCATION and shall operate the BDI LOCATION in full compliance with all
applicable federal, state and local statutes, regulations, and ordinances,
including but not limited to all government regulations relating to retail
facilities, occupational hazards and health, workers' compensation insurance,
federal and state withholding and payment of federal and state income taxes,
social security taxes and sales taxes.

9.
<PAGE> 12
All advertising and participation by FRANCHISEE shall be completely factual and
shall conform to the highest standards of ethical advertising. FRANCHISEE
agrees to refrain from any business or advertising practice which way be
injurious to the business and good name of BDI and the reputation and good will
associated with Names and Marks of BDI and BDI LOCATIONS.

(H) PRICES FOR PRODUCTS AND SERVICES DETERMINED BY FRANCHISEE.
From time to time BDI may advise FRANCHISEE of prices for products and services
offered by BDI LOCATIONS which BDI in its considered judgment believes to be
appropriate and consistent with good business practice. FRANCHISEE shall not
be obligated to accept any such advice and shall have the sole right to
determine the prices to be charged by the BDI LOCATION. FRANCHISEE understands
and agrees that such advice furnished by BDI shall in no way be deemed or
construed to impose upon FRANCHISEE any obligation to charge any fixed, minimum
or maximum price for any product or service offered for sale by the BDI
LOCATION.

(I) DUTY TO MANAGE AND AVOID CONFLICTING OR COMPETING INTERESTS.
The BDI LOCATION shall at all times be under the direct, on-premises
supervision of FRANCHISEE and/or a trained and competent employee.
FRANCHISEE shall keep BDI informed at all times of the identity of any
employee(s) acting as manager(s) of the BDI LOCATION. FRANCHISEE agrees that
he will at all times faithfully, honestly and diligently perform his obligation
under this Agreement and that he will continuously exert his best efforts to
promote and enhance the business of the BDI LOCATION. FRANCHISEE further
agrees not to engage in any business which will detract from or conflict with
his obligation hereinunder.

(J) INSURANCE. FRANCHISEE shall at all times during the term of
this Agreement or any amendment or renewal hereto maintain in full force and
effect at his sole expense, comprehensive, public and product insurance against
claims for bodily and personal injury, death and property damage caused by or
occurring in conjunction with the operation of the BDI LOCATION or otherwise in
conjunction with conduct of business by FRANCHISEE pursuant to this franchise.
Such insurance coverage shall be maintained under one or more policies of
insurance containing a comprehensive general liability policy including
products liability in the minimum amount of $500,000/$500,000 bodily injury
liability and $500,000 property damage liability, an "umbrella" package in the
amount of $1,000,000, or such other amounts as BDI may reasonably request for
the operation of the premises. All such liability insurance policies shall
name BDI as an additional insured and shall provide that BDI receives thirty
(30) days prior written notice of termination, expiration or cancellation of
any such policy. BDI way reasonably increase the minimum liability protection
requirement annually to reflect inflation or higher damage awards in public or
product liability litigation. FRANCHISEE shall have his insurance carriers
submit to BDI annually a statement of coverage. All policies shall be renewed
and evidence of renewal mailed to BDI prior to the expiration date. If
FRANCHISEE at any time fails or refuses to maintain any insurance coverage
required by BDI or to furnish satisfactory evidence thereof, BDI at its option
and in addition to its other rights and remedies hereunder, may, but need not,
obtain such insurance coverage on behalf of the FRANCHISEE and

10.
<PAGE> 13
FRANCHISEE shall pay to BDI on demand any costs and premiums incurred by BDI in
connection therewith. FRANCHISEE is responsible for all loss or damage and
contractual liability to third persons originating in or in connection with the
operation of a BDI LOCATION and for all claims or demands for damages to
property or for injury, illness or death of persons directly or indirectly
resulting therefrom. FRANCHISEE agrees to defend, indemnify and hold BDI
harmless from and with respect to any such claim, losses, or damages as
hereinabove described.

K. OPERATIONS MEETINGS. From time to time BDI will call
operations meetings. These meetings will be held regionally where feasible to
keep expense and time loss for FRANCHISEE to a relative minimum. Attendance at
operations meetings is mandatory for FRANCHISEE or his Manager(s).

10. PROCEDURES AND OPERATING MANUALS. BDI will license to
FRANCHISEE, to use during the term of the franchise, a proprietary special
design computer software program and one or more copies of procedures and
operating manuals for BDI LOCATIONS containing mandatory and suggested
standards, specifications and operating procedures for BDI LOCATIONS and
up-to-date information relative to such standards, specifications and operating
procedures along with other obligations of FRANCHISEE hereunder with respect to
the operation of a BDI LOCATION. BDI shall have the right to add to and
otherwise modify the procedures and operating manuals from time to time to
reflect changes in authorized products and services, product quality or
standards of service or the operation of a BDI LOCATION provided that no such
addition or modification shall alter FRANCHISEE'S fundamental status and rights
under this Agreement. The operating and procedures manuals contain proprietary
information of BDI and FRANCHISEE agrees to keep the computer software program
and the operating and procedures manuals confidential at all times during and
after the terms of the franchise.

11. TRADE SECRETS. FRANCHISEE as a material part of the
consideration for this Agreement understands and agrees that his knowledge of
the operation of a BDI LOCATION will be derived from information disclosed to
FRANCHISEE by BDI pursuant to the franchise and that certain such information
is proprietary, confidential and a trade secret of BDI. FRANCHISEE agrees that
he will maintain the absolute confidentiality of all such information during
and after the term of the franchise and that he will not use any such
information in any other business or in any manner not specifically authorized
or approved by BDI.

12. ADVERTISING AND PROMOTION. FRANCHISEE agrees that it is
essential for the growth of the BDI franchise chain that he participates and
cooperates in advertising programs and other promotional activities.
Accordingly, FRANCHISEE agrees to contribute to an advertising trust fund
administered by BDI, or its designated agent. (Paragraph 6 section A of
Offering Circular and Paragraph 5, this Agreement). The said monies shall be
used by BDI exclusively for advertising and promotional purposes. Advertising
and promotional purposes may include, but are not limited to, radio and
television advertising, newspaper advertisements, and the production and
distribution of such advertising. BDI agrees to provide FRANCHISEE with an
annual statement of the receipts and disbursements of the advertising trust
fund. It is understood by BDI and Franchisee, that after BDI has five (5)
franchises open and operating, an executive advertising committee will be
selected by BDI, that will include Franchisees. This committee will be
instrumental in administering the distribution of the advertising trust monies.

11.
<PAGE> 14
The uncommitted reserve in the advertising trust fund will be
reconciled with expenditures annually at the close of BDI'S fiscal year to
limit the reserve to an amount not greater than the most recent ninety (90) day
expenditure or the succeeding ninety (90) day planned expenditure. BDI shall
thereafter notify FRANCHISEE of the appropriate pro rata reduction of
FRANCHISEE'S advertising trust fund contributions until the excess in the
uncommitted reserve, if any, is depleted.

13. RECORDS KEEPING STANDARDS AND REPORTING PROCEDURES.

(A) RECORDS AND ACCOUNTING. FRANCHISEE shall establish a record
keeping, bookkeeping and accounting system in conformance with the requirements
prescribed by BDI including, but not limited to, the use and retention of sales
records, invoices, payroll records, check stubs, bank deposit receipts, sales
tax records and returns, cash disbursements journals and general ledgers.

(B) BUSINESS REPORTS AND TAX RETURNS. FRANCHISEE shall furnish to
BDI, in accordance with BDI'S procedures and operating manual for BDI
LOCATIONS, the following:

(1) by Monday of each week on the business report form, a report
of the gross and net revenues of the BDI LOCATION for the preceding week
together with all information required by BDI as part of the weekly business
report procedure;

(2) within thirty (30) days after the date federal and state
income tax and sales tax returns are filed, FRANCHISEE shall provide BDI with
exact copies of such returns and all schedules attached thereto.

(1) within thirty (30) days after the end of each month, a monthly
profit and loss statement from the beginning of FRANCHISEE'S fiscal year to
the end of the preceding month for the BDI LOCATION, prepared, verified and
signed by FRANCHISEE; and

(2) within sixty (60) days after the end of each fiscal year of the
BDI LOCATION, an unaudited annual statement of profit and loss and source and
application of funds of the BDI LOCATION for the fiscal year and a balance
sheet for the BDI LOCATION as of the end of the fiscal year, compiled or
reviewed by an independent public accountant or a certified public accountant
in accordance with standards published by the A.I.C.P.A., verified and signed
by FRANCHISEE as to the information furnished to such accountant.

(3) BDI may order FRANCHISEE to provide an audited financial
statement at any time. If this audit discloses an understatement for the
period covered greater than three (3%) percent, FRANCHISEE will pay all costs
associated with the audit and within fifteen (15) days pay to BDI all
recurring franchise fees and advertising trust fund contributions due on the
amount of the understatement. BDI shall then have the right to require
FRANCHISEE to furnish audited financial statements thereafter. If the
understatement is three (3%) percent or less, BDI will pay the reasonable
auditor's fees.

14. NAMES AND MARKS.

(A) OWNERSHIP OF NAMES AND MARKS. FRANCHISEE acknowledges and
agrees as a material part of the consideration for this Agreement that BDI is
the owner of the following names and Marks: "THE BIKERS DREAM", "BIKERS DREAM"',
BIKER'S DREAM" and "DREAM", referred to in this Agreement as "Names and
Marks". BDI hereby licenses FRANCHISEE to use the Names and Marks in the
operation of the franchise. FRANCHISEE'S right to use the Names and Marks is
derived solely from this Agreement, and is limited to the operation of the BDI
LOCATION in compliance with this Agreement. FRANCHISEE shall use and display
the Names and Marks only in a manner and form expressly approved by BDI.
FRANCHISEE, upon request by BDI, shall affix to any materials displaying the
Marks, whatever legends, markings, and notices of trademark ownership or
FRANCHISOR/FRANCHISEE relationship as my be specified by BDI.

12.
<PAGE> 15
(B) FRANCHISEE acknowledges the right of BDI and its affiliates to
use the Marks, including any additions, deletions, or changes thereto, in
connection with the products and services to which they are or may be applied
by BDI and its affiliates, and represents, warrants and agrees that FRANCHISEE
shall not, either during the term of this Agreement or after the expiration or
other termination hereof, directly or indirectly contest or aid in contesting
the validity, ownership, registration, or use of the marks or any additions,
deletions or changes thereto by BDI, or take any action whatsoever in derogation
of the rights claimed therein by BDI.

(C) The License granted to Franchise under this Agreement to use
the Marks is nonexclusive, and BDI, in its sole and absolute discretion, has the
right to grant other licenses in, to and under those names and marks in
addition to those licenses already granted, and to develop and license other
names and marks an any such terms as BDI deems appropriate.

(D) Nothing contained in this Agreement shall be construed to vest
in FRANCHISEE any right, title or interest in or to any of the Marks, the
goodwill now or hereafter associated therewith, or any right in the design of
any building or premises, other than rights and license expressly granted
herein for the term hereof.

(E) FRANCHISEE shall not use any of the Marks in connection with
any statement or material which may, in the judgement of BDI, be in bad taste or
inconsistent with BDI'S public image or tend to bring disparagement, ridicule
or scorn upon BDI, any of the Marks, or the goodwill associated therewith.
FRANCHISEE shall not adopt, use, display or register, in whole or in part, any
trademarks, service marks, trade names, logos, insignia, slogans, emblems,
symbols, designs or other identifying characteristics. Neither FRANCHISEE nor
any entity directly or indirectly affiliated with FRANCHISEE shall adopt, use
or register (by filing a certificate or articles of incorporation, a fictitious
business name statement, or otherwise) any trade or business name, style or
design which includes, or is similar to, in whole or in part, any of the Marks
or any other of BDI'S trademarks, service marks, trade names, logos, insignia,
slogans, emblems, symbols, designs or other identifying characteristics.

(F) BDI shall have the right at any time and from time to time upon
notice to FRANCHISEE to make additions to, deletions from, and changes in any
of the Marks, or any of them, all of which shall be as effective as if they
were incorporated in this Agreement. All such additions, deletions and changes
shall be made in good faith, on a reasonable basis and with a view toward the
overall best interests of the System. No such addition, deletion or change
will cause any change in any of FRANCHISEE'S financial obligations to BDI.

(G) LIMITATIONS ON USE OF NAMES AND MARKS BY FRANCHISEE.
FRANCHISEE agrees to use the Names and Marks during the term of the franchise
as the sole serviceman and tradename identification of the BDI LOCATION.
FRANCHISEE shall not use during the term of the franchise any Name and Mark as
part of any corporate name or with any prefix, suffix or other modifying words,
terms, designs or symbols, or any modified form, nor may FRANCHISEE use any
Name or Mark in connection with the sale of any unauthorized product or service
or in any other manner not explicitly authorized in writing by BDI.

(H) NOTIFICATION OF INFRINGEMENT AND CLAIMS. FRANCHISEE shall
immediately notify BDI of any apparent infringement of or challenge to
FRANCHISEE'S use of any Name or Mark.

(I) INDEMNIFICATION. BDI agrees to indemnify FRANCHISEE for all
damages for which he is held liable in any proceeding arising out of his use of
any Name or Mark, pursuant to and in compliance with this Agreement and for all
costs reasonably incurred by FRANCHISEE in the defense of any such claim
brought against him or in any such proceeding in which he is named as a party,
provided that FRANCHISEE has timely notified BDI of such claim or proceeding and
has otherwise complied with this Agreement, and further provided that if it
becomes advisable at any time in the sole discretion of BDI for FRANCHISEE to
modify or discontinue use of any Name or Mark, and/or use additional or
substitute Names or Marks, FRANCHISEE agrees to do so and the sole obligation
of BDI in any such event shall be to reimburse FRANCHISEE for the out-of-
pocket costs of

13.
<PAGE> 16
complying with this obligation. BDI, at its sole discretion may elect to
defend or participate in the defense or prosecution of any action relating to
the protection of the Service Mark and to protect the FRANCHISEE against claims
of infringement or unfair competition with respect to the Service Mark. In
such event, BDI will have the sole discretion to take such action as it deems
appropriate. FRANCHISEE is not precluded from taking over a cause of action
should BDI decide not to proceed with same.

15. INSPECTIONS AND AUDITS.

(A) RIGHT OF INSPECTION. In order to determine whether FRANCHISEE
is in compliance with this Agreement, BDI shall have the right at any time
during business hours, without prior notice to FRANCHISEE, to inspect the BDI
LOCATION and the business records, bookkeeping and accounting records,
invoices, payroll records, check stubs, bank deposit receipts, sales tax
records and returns, sales records and other supporting records and documents
and the inventory of products, materials and supplies of the BDI LOCATION.

(B) RIGHT TO AUDIT. BDI shall have the right at any time during
business hours, and without prior notice to FRANCHISEE, to audit or cause to be
audited the weekly business reports, tax returns, and schedules and other
forms, information and supporting records which FRANCHISEE is required to
submit to BDI hereunder and the books and records of the BDI LOCATION and of
any corporation or partnership which owns or operates the BDI LOCATION. In the
event any such audit shall disclose an understatement of the gross receipts of
the BDI LOCATION for any period or periods, FRANCHISEE shall pay to BDI within
fifteen (15) days after receipt of the audit report, the recurring franchise
fee plus any required advertising trust account contribution due on the amount
of such understatement. Further, in the event such understatement for any
period or periods shall be greater than three (3%) percent, FRANCHISEE shall
reimburse BDI for the cost of such audit, including, but not limited to, the
fee of any independent accountant and the travel expenses, room, board and
compensation of employees of BDI, unless FRANCHISEE demonstrates that such
understatement resulted from inadvertent error.

16. TERMINATION OF FRANCHISE.

(A) BY FRANCHISEE. If FRANCHISEE is in substantial compliance
with this Agreement and BDI breaches this Agreement and fails to cure such
breach within thirty (30) days after written notice thereof is delivered to
BDI, FRANCHISEE may terminate this Agreement effective ten (10) days after
delivery to BDI of notice thereof. The termination of this Agreement by
FRANCHISEE without complying with the foregoing requirement or for any reason
other than breach of this Agreement by BDI and BDI'S failure to cure such
breach within thirty (30) days after receipt of written notice thereof shall be
deemed a termination by FRANCHISEE without cause.

(B) BY BDI. In addition to BDI'S right to terminate this
Agreement in the event of the failure of FRANCHISEE to lease or purchase a
premises for the BDI'S LOCATION to develop or open the BDI'S LOCATION as
provided in subparagraph (A) of paragraph 5 herein or upon BDI'S determination
that FRANCHISEE is unable to complete satisfactorily prescribed training as
provided in subparagraph (B) of paragraph 6 herein, BDI may terminate this
Agreement effective upon delivery of notice of termination to FRANCHISEE, if
FRANCHISEE or the BDI LOCATION

14.
<PAGE> 17
(1) makes an assignment for the benefit of creditors or
an admission of his inability to pay his obligations as they become
due;

(2) files a voluntary petition in bankruptcy or any
pleading seeking any reorganization, liquidation or dissolution under
any law, or admitting or failing to contest the material allegations
of any such pleading filed against him or is adjudicated a bankrupt or
insolvent or a receiver is appointed or a substantial part of the
assets of FRANCHISEE or BDI LOCATION are abated or subject to a
moratorium under any law;

(3) abandons or surrenders or transfers control of the
operation of the BDI LOCATION or fails actively to operate the BDI
LOCATION, unless precluded from doing so by damage to the premises of
the BDI LOCATION, war or civil disturbance, natural disaster, or other
event beyond FRANCHISEE'S control;

(4) suffers cancellation of, or fails to renew or extend
the lease for, or otherwise fails to maintain possession of, the
premises of the BDI LOCATION identified herein or a substitute
premises approved by BDI;

(5) submits to BDI on two (2) or more separate occasions
at any time during the term of the franchise, a weekly business
report, tax return or schedule or other information or supporting
records which understates the gross receipts of the BDI LOCATION by
more than three (3) percent for any period of time, unless FRANCHISEE
demonstrates to the satisfaction of BDI that such understatement
results from inadvertent error;

(6) fails or refuses to submit when due, weekly reports,
tax returns, schedules or other information or supporting records,
whether or not such failure or refusal is corrected after notice
thereof is delivered to FRANCHISEE;

(7) operates the BDI LOCATION in a manner which presents
a health or safety hazard to its customers, employees or the public;

(8) makes an unauthorized assignment of the franchise or
ownership of FRANCHISEE as hereinafter defined in paragraph 17 and 18;

(9) operates the BDI LOCATION in a manner in violation of
or inconsistent with all applicable federal, state and local statutes,
regulations, rules and ordinances, including, but not limited to, all
government regulations relating to retail stores;

(10) fails or refuses to pay any amount owed to BDI
for recurring franchise fees, advertising trust account contributions,
any products purchased from BDI or any amounts due to BDI or fails or
refuses to comply with any mandatory standards, specifications or
operating procedures prescribed by BDI relating to the quality of
products, cleanliness or sanitation and does not correct such failure
or refusal within ten (10) days after written notice thereof is
delivered to FRANCHISEE. Said notice shall describe what corrective
action FRANCHISEE must take; or

15.
<PAGE> 18
(11) fails to comply with any other provision of this
Agreement or any other mandatory standard, specification or operating
procedures prescribed by BDI and does not correct such failure within
thirty (30) days after written notice of such failure to comply is
delivered to FRANCHISEE, provided that if such failure can not
reasonably be corrected within thirty (30) days, then FRANCHISEE must
initiate a program of corrective action within such thirty (30) day
period and thereafter continue such program of corrective action so
that such failure may be corrected within a reasonable time
thereafter. The written notice of failure as herein described shall
describe to FRANCHISEE what corrective action he must take.

17. FRANCHISEE'S RIGHTS AND OBLIGATIONS UPON TERMINATION OR
EXPIRATION.

(A) PAYMENT OF AMOUNTS OWED TO BDI. FRANCHISEE agrees to pay to
BDI within fifteen (15) days after the effective date of termination or
expiration such recurring franchise fees, advertising trust account
contributions, amounts owed for products purchased by FRANCHISEE from BDI and
other amounts owed to BDI which are then unpaid.

(B) RETURN OF PROPRIETARY OR CONFIDENTIAL MATERIALS. FRANCHISEE
further agrees that upon termination or expiration of the franchise, he will
immediately return to BDI all copies of proprietary and confidential materials
including, but not limited to, BDI'S computer software program and all
operating and procedures manuals.

(C) REPURCHASE. BDI shall have the right, at its option, to
repurchase at cost any and all equipment, inventory, supplies and training
material which it sold to FRANCHISEE.

(D) CANCELLATION OF ASSUMED NAMES AND TRANSFER OF TELEPHONE
NUMBERS. FRANCHISEE further agrees that upon termination or expiration of the
franchise, he will take such action as may be required to cancel all
fictitious business names or registrations relating to his use of any Name or
Mark and to notify the telephone company and all listing agencies of the
termination or expiration of FRANCHISEE'S right to use any telephone numbers
and any classified and other telephone directory listings with any Name or Mark
or with the BDI LOCATION and to authorize transfer of same to BDI or its
franchisee.

(E) MODIFICATION OF AGREEMENT BY FRANCHISEE. This Agreement may
be modified by FRANCHISEE only by written agreement with BDI.

(F) MODIFICATION OF AGREEMENT BY BDI. This Agreement may be
modified by BDI only by written agreement with FRANCHISEE.

(G) ASSIGNMENT BY BDI. This agreement is fully assignable by BDI,
and BDI remains liable for the performance of its obligations hereunder.

(H) DEATH OR INCAPACITY OF FRANCHISEE. The Franchise may be
transferred to the heirs or personal representative of the FRANCHISEE upon the
death or incapacity of FRANCHISEE upon written approval of BDI on the same
terms and conditions as any other assignment of the franchise.

16.
<PAGE> 19
(I) REMOVAL OF ALL SIGNS AND IDENTIFICATION. FRANCHISEE further
agrees upon termination or expiration of the franchise, he will immediately
remove all BDI signs and identification from the premises, and immediately and
permanently discontinue the use of the Names and Marks.

(J) COVENANT NOT TO COMPETE. If this Agreement is terminated
prior to its expiration BY BDI in accordance with the provisions of this
Agreement or by FRANCHISEE without cause, FRANCHISEE agrees that for a period
of two (2) years commencing on the effective date of termination of this
Agreement, or the date which FRANCHISEE ceases to conduct the business
conducted pursuant to this Agreement, whichever is later, he will not have any
interest as owner (except of publicly traded securities), partner, director,
officer, employee consultant, representative or agent, or in any other
capacity, in any business offering substantially the same products and services
offered by a BDI LOCATION and located within the county wherein the BDI
LOCATION or any BDI LOCATION is located. THIS COVENANT NOT TO COMPETE MAY NOT
BE ENFORCEABLE UNDER CALIFORNIA LAW.

(K) CONTINUING OBLIGATION. All obligations of BDI and FRANCHISEE
which expressly or by their nature survive the expiration or termination of the
franchise shall continue in full force and in effect subsequent to and
notwithstanding the expiration or termination of this Agreement and until they
are satisfied in full or by their nature expire.

(L) FRANCHISEE'S RIGHT TO SELL BDI LOCATION. If BDI terminates
the franchise for a cause other than those specified in paragraph 16 (B),
subparagraphs (3), (4), and (8) of this Agreement, or elects not to renew the
franchise, FRANCHISEE for a period of ten (10) days commencing on the date of
notice of termination or nonrenewal shall have the right to elect to attempt to
sell the BDI LOCATION to a person reasonably acceptable to BDI as a BDI
LOCATION franchisee, providing that the provisions of paragraph (17),
subparagraphs (B) and (D) shall be applicable to any proposed sale of the BDI
LOCATION pursuant to this paragraph. FRANCHISEE'S right to elect hereunder
shall be contingent upon FRANCHISEE reasonably establishing that:

(1) FRANCHISEE will make a bona fide effort to sell the BDI
LOCATION to an acceptable person;

(2) until the closing of such sale or the prior expiration or
termination of FRANCHISEE'S right to sell the BDI LOCATION pursuant to this
paragraph, the BDI LOCATION will be operated in compliance with this AGREEMENT;
and

(3) all amounts owed to BDI pursuant to this Agreement will be
paid to BDI at or prior to the closing of such sale. FRANCHISEE shall deliver
to BDI within the ten (10) day period referred to above, a written notice of
his election to make a bona fide effort to sell the BDI LOCATION to an
acceptable person. FRANCHISEE'S right to sell the BDI LOCATION pursuant to this
paragraph shall expire, in the case of nonrenewal of the franchise, at the
expiration date of the franchise, and in the case of a termination of the
franchise, ninety (90) days after the initial effective date of termination
indicated in the notice from BDI or such earlier date as BDI reasonably
determines that FRANCHISEE has abandoned a bona fide effort to effect a sale of
the BDI LOCATION or fails to operate the BDI LOCATION in compliance with this
Agreement.

17.
<PAGE> 20
18. ASSIGNMENT.

(A) BY BDI. This Agreement is fully assignable by BDI and shall
inure to the benefit of any assignee or other legal successor to the interest
of BDI herein, provided that BDI will subsequent to any such assignment remain
liable for the performance of its obligations under this Agreement. The
franchise may be transferred to the heirs or personal representative of
FRANCHISEE upon the death or incapacity of FRANCHISEE upon the written approval
of BDI on the same terms and conditions as any other assignment of the
franchise.

(B) FRANCHISEE MAY NOT ASSIGN WITHOUT APPROVAL OF BDI. The franchise
is personal to FRANCHISEE and neither the franchise (except as hereinafter
provided with respect to assignment to a partnership or a corporation) nor any
part of the ownership of FRANCHISEE may be voluntarily, involuntarily directly
or indirectly assigned, subdivided, subfranchised or otherwise transferred by
FRANCHISEE or its owners (including Will, declaration of or transfer in trust
or the laws of intestate succession) without the prior written approval of BDI
and any such assignment or transfer without such approval shall constitute a
breach hereof. BDI shall not unreasonably withhold its approval of an
assignment or transfer of the franchise to proposed assignees are transferees
who meet BDI'S then applicable standards for franchisees and who are willing
to execute and be bound by all provisions of BDI'S then current form of
Franchise Agreement, which shall provide for the then applicable rates of
recurring franchise fees, advertising trust fund contributions payable
thereunder and a term equal to the remaining term of the franchise. BDI shall
not charge such assignee an initial franchise fee for the franchise, but will
charge FRANCHISEE a transfer fee of Two Thousand Five Hundred ($2,500.00)
Dollars. Any and all obligations of FRANCHISEE hereunder shall be fully paid
and satisfied prior to BDI'S approval of an assignment or transfer.

(C) ASSIGNMENT TO PARTNERSHIP OR CORPORATION. The franchise may
be assigned to a partnership or corporation which conducts no business other
than the BDI LOCATION (and other BDI LOCATIONS under franchise agreements with
BDI), which is actively managed by FRANCHISEE and in which FRANCHISEE owns and
controls not less than fifty-one (51) percent of the general partnership
interest or the equity and voting power, provided that all partners or
shareholders shall execute an Assignment Agreement undertaking to be bound
jointly and severally by all provisions of this Agreement and all issued and
outstanding stock certificates of such corporation shall bear a legend
reflecting or referring to the restrictions of subparagraph (B) of this
paragraph 18.

(D) BDI'S RIGHT OF FIRST REFUSAL. If FRANCHISEE or its owners
shall at any time determine to sell the BDI LOCATION or an ownership interest
in the franchise, FRANCHISEE or its owners shall obtain a bona fide, executed
written offer from a responsible and fully disclosed purchaser and shall submit
an exact copy of such offer to BDI, which shall, for a period of thirty (30)
days from the date of delivery of such offer, have the right, exercisable by
written notice to FRANCHISEE or its owners, to purchase the BDI LOCATION or
such ownership interest for the price and terms and conditions contained in
such offer, provided that BDI my substitute cash or debt cancellation or a
combination thereof for any form of payment proposed in such offer. If BDI
does not exercise this right of first refusal, FRANCHISEE shall conclude such
sale within one hundred twenty (120) days following the expiration of such
thirty (30) day first refusal period in compliance with the terms of the offer
presented to BDI. After the expiration of such one hundred twenty (120) day
period, FRANCHISEE may not make any transfer without again complying with the
provisions of this section.

18.
<PAGE> 21
19. ENFORCEMENT.

(A) JUDICIAL ENFORCEMENT, INJUNCTIVE AND OTHER EQUITABLE RELIEF.
FRANCHISEE acknowledges and agrees as a material part of the consideration for
this Agreement that the damages to be suffered by BDI and other BDI FRANCHISEES
as a result of the violation of the provisions of this Agreement relating to
FRANCHISEE'S use of the Names and Marks of BDI, the obligations of FRANCHISEE
with respect to advertising and the obligations of FRANCHISEE upon termination
or expiration of this Agreement and assignment of the franchise and ownership
interests in the franchise will be in an immeasurable amount and neither BDI
nor other BDI FRANCHISEES will have an adequate remedy at law. For these
reasons, BDI shall be entitled without bond to the entry of temporary and
permanent injunctions and orders of specific performance enforcing the
provisions of this Agreement relating to FRANCHISEE'S use of the Names and
Marks, the obligations of FRANCHISEE with respect to advertising, the
obligations of FRANCHISEE upon termination or expiration of this Agreement and
assignment of the franchise and ownership interests in the franchise. And
further, BDI shall be entitled to the entry of temporary and permanent
injunctions and orders of specific performance to prohibit any act or
omission by FRANCHISEE or employees of the BDI LOCATION that constitute a
violation of any law, ordinance, or regulation, is dishonest or misleading to
customers of the BDI LOCATION or other BDI LOCATIONS, constitutes a danger to
employees or customers of the BDI LOCATION or to the public, or may impair the
goodwill associated with the Names and Marks and BDI LOCATIONS. If BDI secures
any such injunctive orders or orders for specific performance, FRANCHISEE
agrees to pay BDI an amount equal to the aggregate of its cost of obtaining
such relief, including, but not limited to, reasonable attorney's fees, costs
of investigation and proof of facts, court costs, other litigation expenses,
travel and living expenses, and any damages incurred by BDI as a result of the
breach of any such provision including interest from date of breach, at the
then current prime rate plus two (2%) percent.

(B) JURISDICTION, VENUE AND WAIVER OF JURY TRIAL. FRANCHISEE
acknowledges and agrees that this Agreement is entered into in the City of
Huntington Beach, County of Orange, State of California and that any action
commenced for the purpose of enforcing the terms and provisions hereof may be
commenced in the following courts, at the sole option of BDI:

(1) the Federal District Court for the Southern District
of California;

(2) the Superior Court of the State of California in and
for the County of Orange;

(3) the Municipal Court of California, Orange County
Judicial District; or

(4) the United States District Court, Court of general
jurisdiction for the state, or inferior court for the judicial
district in which FRANCHISEE'S BDI LOCATION is located.

19.
<PAGE> 22
It is mutually agreed by and between the parties hereto that the respective
parties shall and they hereby do, waive trial by jury in any action, proceeding
or counterclaim, whether at law or equity brought by either of the parties
hereto against the other or any matters whatsoever arising out of, or in any
way connected with, this Agreement or the performance by the parties of this
Agreement.

(C) ARBITRATION. Except insofar as BDI elects to enforce this
Agreement by judicial process, injunction or specific performance as
hereinabove provided, all disputes and claims arising out of this Agreement
and/or standards, specifications and operating procedures and/or any other
obligations of FRANCHISEE or BDI or any claim that any portion of this
Agreement, any standard specification or operating procedure or other
obligation of the FRANCHISEE or BDI is illegal or otherwise unenforceable under
any law, ordinance, regulation or ruling shall be settled by three member
arbitration in the County of Orange, State of California, under the United
States Arbitration Act (9 U.S.C. Section 1 et seq.), if applicable, and the
Rules of CCP 1060, provided that the arbitrators shall award, or include in
their awards, the specific performance of this Agreement unless he determines
that performance is impossible. Judgment upon the award of the arbitrator may
be entered in any court having jurisdiction thereof or of BDI or FRANCHISEE.
During the pendency of an arbitration proceeding hereunder, FRANCHISEE and BDI
shall fully perform this Agreement.

(D) SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS. All
provisions of this Agreement are severable and this Agreement shall be
interpreted and enforced as if all completely invalid or unenforceable
provisions were not contained herein and partially valid and enforceable
provisions shall be enforced to the extent valid and enforceable. If any
applicable law or rule requires a greater prior notice of the termination or
of refusal to renew this Agreement than is required hereunder, or the taking
of some action not required hereunder, the prior notice and/or other action
required by such law or rule shall be substituted for the notice requirements
hereof.

(E) WAIVER OF OBLIGATIONS. BDI and FRANCHISEE may by written
instrument unilaterally waive any obligation of, or restriction upon, the
other under this Agreement. No acceptance by BDI of any payment by FRANCHISEE
and no failure, refusal or neglect of BDI or FRANCHISEE to exercise any right
under this Agreement or to insist upon full compliance by the other with its
obligations hereunder, including but not limited to any mandatory standards,
specifications or operating procedure, shall constitute a waiver of any
provision of this Agreement.

(F) FRANCHISEE MAY NOT WITHHOLD PAYMENTS DUE BDI. FRANCHISEE
agrees that he will not withhold payment of any recurring franchise fee,
advertising trust fund contribution, amounts owed to BDI for products purchased
by FRANCHISEE or any other amounts owed to BDI on grounds of the
non-performance by BDI of any of its obligations hereunder.

20.
<PAGE> 23
All such claims by FRANCHISEE, if not otherwise resolved by BDI and FRANCHISEE
shall, at the option of BDI, be submitted to arbitration as provided in
paragraph 19, subparagraph (C).

(G) RIGHTS OF PARTIES ARE CUMULATIVE. The rights of BDI and
FRANCHISEE hereunder are cumulative and no exercise or enforcement by BDI or
FRANCHISEE of any right or remedy hereunder shall preclude the exercise or
enforcement by BDI or FRANCHISEE of any other right or remedy hereunder or
which BDI or FRANCHISEE is entitled by law to enforce.

(H) GOVERNING LAW. Except to the extent governed by applicable
federal laws and regulations and the United States Arbitration Act, this
Agreement and the franchise shall be governed by the State of California.

(I) BINDING EFFECT. This Agreement is binding upon the parties
hereto and their respective heirs, assigns and successors in interest.

(J) CONSTRUCTION. The preliminary statements are parts of this
Agreement which constitutes the entire Agreement of the parties and there are
no other oral or written understandings or agreements between BDI and
FRANCHISEE relating to the subject matter of this Agreement, except as
specifically referred to in this Agreement. The headings of the several
sections and paragraphs hereof are for convenience only and do not define,
limit or construe the contents of such sections or paragraphs. The term
"FRANCHISEE" as used herein is applicable to one or more persons, a corporation
or a partnership, as the case may be, and the singular usage includes the
plural and the masculine and neuter usages the other and the feminine.
References to "FRANCHISEE" applicable to an individual or individuals shall
mean the principal owner or owners of the equity or operating control of the
franchise if FRANCHISE is a corporation or partnership.

20. INDEPENDENT CONTRACTIONS/INDEMNIFICATION. BDI and FRANCHISEE
are independent contractors. FRANCHISEE shall conspicuously identify himself
at the premises of the BDI LOCATION and in all dealings with suppliers as the
owner of the BDI LOCATION. FRANCHISEE agrees to file applicable fictitious
name statements in the manner prescribed by law. Neither BDI nor FRANCHISEE
shall make any agreements, representations or warranties in the name of, or on
behalf of, the other or represent that the relationship is other than
franchisor and franchisee and that neither BDI nor FRANCHISEE shall be
obligated by or have any liability under any agreements, representations or
warranties made by the other, nor shall BDI be obligated for any damage to any
person or property directly or indirectly arising out of the operation of the
BDI LOCATION or FRANCHISEE'S business conducted pursuant to the franchise,
whether caused by FRANCHISEE'S negligent or willful action or failure to act.
BDI shall have no liability for any sales, use, excise, income, property or
other taxes levied upon the BDI LOCATION or its assets or in connection with
the services performed or sales made or business conducted by the BDI LOCATION.
FRANCHISEE agrees to indemnify BDI against and to reimburse BDI for all such
obligations, damages and taxes for which it is held liable and for all costs
reasonably incurred by BDI in defense of any such claim brought against it or
in any action in which it is named as a party, included but not limited to
reasonable attorney's fees, costs of investigation, proof of facts, court
costs, other litigation expenses, travel and living expenses.

21.
<PAGE> 24
BDI shall have the right to defend any such claim against it. BDI agrees to
indemnify FRANCHISEE against and to reimburse FRANCHISEE for any obligations or
liability for damages attributable to agreements, representations or warranties
of BDI or caused by the negligence or willful action of BDI, and for costs (as
hereinabove defined) reasonably incurred by FRANCHISEE in the defense of any
such claim brought against him or the BDI LOCATION or in any action in which he
is named as a party, provided that BDI shall have the right to participate in
and, to the extent, BDI deems necessary, to control any litigation or proceeding
which might result in liability of or expense to FRANCHISEE subject to such
indemnification. The indemnities and assumption of liabilities and obligation
herein shall continue in full force and effect subsequent to and
notwithstanding the expiration or termination of this Agreement.

21. NOTICES. All written notices permitted or required to be
delivered by the provisions of this Agreement or of the operating manual shall
be deemed so delivered by hand or three (3) days after placed in the mail by
Registered or Certified mail, Return Receipt Requested, postage prepaid and
addressed to the party to be notified at its most current principal business
address of which the notifying party has been notified.

22. FAILURE TO EXERCISE RIGHTS. No failure by BDI to exercise any
power given to it hereunder or to insist upon strict compliance with any
obligation or condition hereunder and no custom or practice of the parties at
variance with the terms hereof shall constitute a waiver of BDI'S rights to
demand exact compliance with the terms hereof. Waiver by BDI of any particular
default by FRANCHISEE shall not affect or impair BDI'S rights in respect to any
subsequent default of the same or different nature; nor shall any delay or
omission of BDI to exercise any rights arising from a default affect or impair
BDI'S rights as to said default or any subsequent default.

23. ENTIRE AGREEMENT. This Agreement contains the entire agreement
containing the subject matter hereof, and no representations, inducements,
promises or agreements, oral or otherwise, between the parties with reference
thereto and not embodied herein shall be of any force and effect. Any
agreements hereafter made shall be ineffective to change, modify, add or
discharge in whole or in part the obligations and duties under this Agreement
unless such agreement is in writing and signed by BDI and FRANCHISEE.

BIKER'S DREAM, INC.

BY: /s/ DENNIS CAMPBELL
-----------------------------------

FRANCHISEE:

/s/ ?
- ---------------------------------------

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

22.
<PAGE> 25

SCHEDULE
TO
EXHIBIT 10.19

1. Franchise Agreement dated December 23, 1994 between Bikers
Dream, Inc. and Raymond Vanegas.

2. Franchise Agreement dated February 20, 1995 between Bikers
Dream, Inc. and Christine and Randy Crowner.

3. Franchise Agreement dated October 27,1 994 between Bikers Dream,
Inc. and Robert and Donna Conkling.

4. Franchise Agreement dated June 10, 1994 between Bikers Dream,
Inc. and Marble Pierce Enterprises, L.L.C.

5. Franchise Agreement dated June 24, 1994 between Bikers Dream,
Inc. and Brenda Bogert.

6. Franchise Agreement dated December 13, 1994 between Bikers
Dream, Inc. and James T. Kinnicutt, Jr.

<PAGE> 1

NONQUALIFIED DIRECTOR'S STOCK OPTION PLAN Of

BIKERS DREAM, INC.,
a California Corporation

Purpose of Plan

1. The purpose of this Plan is to strengthen BIKERS DREAM, INC.,
(hereafter "Corporation") by providing stock options as a means to attract,
retain, and compensate Directors of the Corporation.

Administration of Plan

2. This Plan shall be administered by the Board of Directors.
The Board of Directors shall have the power to make all determinations
necessary for the administration of the Plan, subject to the restrictions on
such powers set forth in Corporations Code Section 311.

Grant of Options

3. BIKERS DREAM, INC. is hereby authorized to grant stock
options to all members of the Board of Directors of the Corporation. Any
option granted under this Plan shall be granted within 10 years from the date
this Plan is adopted, or the date this Plan is approved by the shareholders
pursuant to P 13, whichever is earlier.

Stock Subject to Plan

4. The aggregate number of shares that may be issued pursuant to
options granted under this Plan shall be two hundred fifty thousand (250,000)
shares of the Corporation's voting common stock.

Aggregate Fair Market Value

5. The aggregate fair market value of the stock, as determined in
good faith by the Board of Directors at the time the option is granted, with
respect to which stock options are exercisable for the first time by a director
during any calendar year shall not exceed $200,000.

Exercise of Option

6. Any option granted pursuant to this Plan shall contain
provisions, established by the Board of Directors, setting forth the manner of
exercising the option. However, no option granted under this Plan shall be
exercisable by its terms after the expiration of 10 years from the grant of the
option.

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.21
<PAGE> 2
Option Price

7. The price for a share of stock subject to an option granted
pursuant to this Plan shall not be less than the fair market value for the
stock at the time the option is granted, as determined in good faith by the
Board of Directors at the time the option is granted.

Options Nontransferable

8. The terms of any option granted under this Plan shall make the
option nontransferable by the options except by will, revocable living trust or
the laws of descent and distribution, and exercisable only by the optionee
during his or her lifetime.

Termination of Service

9. An optionee's option shall not expire by virtue of termination
of service as a member of the Board of Directors. In the event that an
optionee's service on the Board of Directors is terminated for any reason, all
options granted pursuant to this Plan shall immediately vest, regardless of the
length of service. If an optionee should die while serving on the Board of
Directors of the Corporation, or its parent subsidiary, or successor, the
person to whom the optionee's rights pass by will or the laws of descent and
distribution may exercise the option for any of the shares not previously
exercised during Employee's lifetime, within three years after the optionee's
death.

Stock Subject to Option

10. The Corporation shall at all times during the term of this
Plan reserve the number of shares of two hundred fifty thousand (250,000)
required to meet the requirements of this Plan, and shall pay all fees and
expenses necessarily incurred by the Corporation in connection with the
exercise of options under this Plan.

In the event of a stock split, reverse stock split, stock
dividend, combination, or reclassification of the Corporation's stock, an
appropriate and proportionate adjustment shall be made in the number of shares
to which stock options may be granted. A corresponding change shall be made to
the number and kind of shares, and the exercise price per share, of unexercised
options.

Merger, Consolidation, or Dissolution of Corporation

11. Following the merger of one or more corporations into the
Corporation, or any consolidations of the Corporation and one or more
corporations in which the Corporation is the surviving corporation, the
exercise of options under this Plan shall apply to the shares of the surviving
corporation.
<PAGE> 3
Notwithstanding any other provision of this Plan, all options
under this Plan shall terminate on the dissolution or liquidation of the
Corporation.

Other Option Terms

12. Any option granted pursuant to this Plan shall contain any
other terms that the Board of Directors or the Corporation's legal counsel
Committee deems necessary.

Effective Date of Plan

13. This Plan shall be effective on approval by the outstanding
shares of the Corporation.

Amendment and Termination of Plan

14. The Board of Directors may at any time amend or terminate this
Plan. No option may be granted after termination. The amendment or
termination of the Plan shall not, however, alter any optionee's rights or
obligations under an option previously granted, unless the optionee consents to
that alteration.

Adopted by the Board of Directors on April 4, 1995.

<PAGE> 1
1995 INCENTIVE STOCK OPTION PLAN OF
BIKERS DREAM, INC.,
a California Corporation

1. PURPOSE OF PLAN. The purpose of this incentive stock option
plan (the "Plan") is to strengthen Bikers Dream, Inc. (hereinafter
"Corporation") by providing incentive stock options as a means to attract,
retain, and motivate corporate personnel.

2. ADMINISTRATION. The Plan shall be administered by
disinterested members of the board of directors of Corporation, (the "Board
Committee") whose construction and interpretation of the terms and provisions
of the Plan shall be final and conclusive. The Board Committee may, in its
sole discretion, grant options to purchase shares of the common stock of
Corporation to eligible employees (as designated herein) and issue shares upon
exercise of such options as provided in the Plan. The Board Committee may,
subject to the express provisions of the Plan, construe any option agreement
and the terms of the Plan; prescribe, amend, and rescind rules and regulations
relating to the Plan; determine the terms and provisions of any option
agreement entered into between the Corporation and its employees; advance the
lapse of any waiting or installment periods and exercise dates; and make all
other determinations that, in the judgment of the Board Committee, is necessary
or desirable for the administration of the Plan. The Board Committee, in its
sole discretion, may correct any defect, supply any omission, or reconcile any
inconsistency either in the Plan or in any option agreement in the manner and
to the extent it shall deem expedient to carry the Plan into effect.

3 . NO DIRECTOR LIABILITY. No director shall be liable for any
action or determination made in good faith.

4. DELEGATION TO COMPENSATION COMMITTEE. The Board shall
delegate the administration of this Plan to a compensation committee (the
"Board Committee") composed of members selected by, and serving at the pleasure
of, the Board. The Board Committee shall make all determinations necessary for
the administration of the Plan, subject to the restrictions on committee powers
set forth in California Corporations Code Section 311.

5. GRANT OF OPTIONS. Corporation is hereby authorized to grant
incentive stock options (as defined in Internal Revenue Code Section 422A) to
its officers, key employees, and such other categories of employees either
designated from time to time or as set forth in the employee manual
(collectively referred to herein as "Exempt Employees"). Options may not be
granted to employees who own stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Corporation,
except pursuant to the restrictions set forth in Sections 12 and 13
hereinbelow. Any option granted under this Plan shall be granted within ten
(10) years from the earlier of the date that this Plan is adopted or ten (10)
years from the date that this Plan is approved by the shareholders pursuant to
Section 25.

-1-

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.22
<PAGE> 2
6. STOCK SUBJECT TO PLAN. The aggregate number of shares that
may be issued pursuant to options granted under this Plan shall be one
million (1,000,000) shares of the voting common stock of the Corporation. Such
shares shall be authorized and unissued shares. Any options granted to a
person who is an officer or who holds more than 10% of the outstanding shares
shall be subject to a holding period of six months after date of grant or six
months after shareholder approval, whichever occurs last. If an option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject to such option shall again be
available for subsequent option grants under the Plan. Stock issuable upon
exercise of an option granted under the Plan may be subject to such
restrictions on transfer, repurchase rights' or other restrictions as shall be
determined by the Board Committee.

7. AGGREGATE FAIR MARKET VALUE LIMITATION. The aggregate fair
market value of the stock, as determined in Section 13 hereinbelow, with
respect to which incentive stock options are exercisable for the first time by
an Exempt Employee during any calendar year (under all incentive stock option
plans of the Corporation) shall not exceed $100,000.

8. GRANT OF OPTIONS. Corporation may grant to an Exempt Employee
an option to purchase that number of shares designated by the Board Committee
pursuant to this Plan beginning six (6) months following the first day of
employment of the Exempt Employee.

9. VESTING OF OPTIONS. The options granted an Exempt Employee
shall vest pursuant to the following schedule:

<TABLE>
<CAPTION>
Percentage of
Year Options Vested
---- --------------
<S> <C>
1 year from the date of grant 25%
2 years from the date of grant 50%
3 years from the date of grant 75%
4 years from the date of grant 100%
</TABLE>

Except in instances where the Board of Directors, upon recommendations of the
Board Committee, shall make exceptions as an element of key employees contract
negotiations.

No options shall vest following the termination of employment or death of an
Exempt Employee. Further, no option shall vest except upon the anniversary of
the grant of the option as hereinabove provided irrespective of the termination
of employment or death of an Exempt Employee.

10. EXERCISE OF OPTION. An Exempt Employee may exercise all, or
any portion, of his vested options from the time that the options vest (and at
the end of each vesting anniversary thereafter) until nine (9) years following
the grant of the options (at the end of said nine (9) year period the option
shall expire) by delivering written notice thereof to Corporation no more than

-2-
<PAGE> 3
fifteen (15) days prior to the exercise date; provided, however, that an Exempt
Employee may exercise 100% of his options for the one (1) year period prior to
the expiration of the options.

11. EXERCISE OF OPTIONS FOLLOWING ACQUISITION. Should
substantially all of the assets of the Corporation be acquired by a third
party(ies) not related to the Corporation (i.e., a person(s) or entity(ies)
that would be determined not to be a constructive shareholder of Corporation
pursuant to the rules of Internal Revenue Code Section 318), an Exempt Employee
may immediately exercise his option (including any unvested shares) from the
date of said acquisition until thirty (30) days thereafter, at the end of which
time all options not exercised shall expire.

12. LIMITATION ON TIME FOR EXERCISING OF OPTION. No option
granted under this Plan shall be exercisable by its terms after the expiration
of nine (9) years from the grant of the option, and no option granted to a
person who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of Corporation shall be
exercisable by its terms after the expiration of five (5) years from the date
of the grant. The option may be subject to earlier termination as provided
herein.

13. OPTION PRICE. The price for each share of stock, subject to
an option granted pursuant to this Plan, shall not be less than the fair market
value for the stock as of the date of the grant of the option. For purposes of
this Agreement, the fair market value of the stock shall be determined by the
Board in its reasonable discretion, but said fair market value determination
shall be equal to no more than 1.25, and no less than 0.75, multiplied by the
quotient resulting from:

(i) The market price of the stock as quoted on the
Bulletin Board or NASDAQ, at the close of the business day of the grant, or if
that is not practicable;

(ii) The annual net revenue (i.e., gross revenue less
returns) of Corporation as indicated on its most recent financial statement;
divided by

(iii) The sum of the number of issued and outstanding
shares and the number of issued, but unexercised, options to purchase shares.

14. PAYMENT OF PURCHASE PRICE. Options granted under the Plan
shall provide for the payment of the exercise price by delivery of cash or a
check to the order of the Corporation in the amount equal to the exercise price
of such options.

15. OPTIONS NON-TRANSFERABLE. The terms of any option granted
under this Plan shall make the option non-transferable by the Exempt Employee
(or any other holder of the option) except by will or the laws of descent and
distribution.

16. TERMINATION OF EMPLOYMENT. Except for termination of
employment due to

-3-
<PAGE> 4
disability or death, a stock option shall expire thirty (30) days after
termination of employment of an Exempt Employee subject to earlier termination
pursuant to Section 12 of this Plan.

17. DISABILITY OF EXEMPT EMPLOYEE. A stock option shall expire
four (4) months after termination of employment due to permanent and total
disability of an Exempt Employee, as defined in Internal Revenue Code Section
22(e)(3), subject to earlier termination pursuant to Section 12 of this Plan.

18. DEATH OF EXEMPT EMPLOYEE. If an Exempt Employee should die
while employed by the Corporation, or its successor-in-interest, or within the
thirty (30) day period after termination of his employment, the person to whom
the rights of the Exempt Employee pass by will or the laws of descent and
distribution may exercise the option for any of the vested shares not
previously exercised during the lifetime of the Exempt Employee within four (4)
months after the death of an Exempt Employee, subject to earlier termination
pursuant to Section 12 of this Plan.

19. STOCK SUBJECT TO OPTION. The Corporation shall at all times
during the term of this Plan reserve the number of shares of common voting
stock required to meet the requirements of this Plan and shall pay all fees and
expenses necessarily incurred by the Corporation in connection with the
exercise of options under this Plan.

20. PROPORTIONATE ADJUSTMENT. In the event of a stock split,
reverse stock split, stock dividend, combination, or reclassification of the
stock of Corporation, an appropriate and proportionate adjustment shall be made
in the number of shares to which stock options may be granted. A corresponding
change shall be made to the number and kind of shares, and the exercise price
per share, of unexercised options. Such adjustment to outstanding options
shall be made without change in the total price applicable to the unexercised
portion of such options, and a corresponding adjustment in the applicable
option price per share shall be made. No such adjustment shall be made which
would, within the meaning of any applicable provisions of the Internal Revenue
Code, constitute a modification, extension, or renewal of any option right or a
grant of additional benefits to the holder of an option.

21. EMPLOYEE TO EXECUTE OPTION AGREEMENT. As a condition to the
grant of an option under the Plan, each Exempt Employee shall execute an option
agreement in such form not inconsistent with the Plan as shall be specified by
the Board at the time such option is granted.

22. REORGANIZATION. Following the merger of one or more
corporations into the Corporation, or any consolidation of the Corporation and
one or more corporations in which the Corporation is the surviving corporation,
the exercise of options under this Plan shall apply to the shares of the
surviving corporation.

23. DISSOLUTION OF CORPORATION. Notwithstanding any other
provision of this Plan, but subject to the provisions of Section 11 of this
Agreement, all options under this Plan shall terminate upon the dissolution or
liquidation of the Corporation, or on any

-4-
<PAGE> 5
merger or consolidation in which the Corporation is not the surviving
corporation.

24. OTHER OPTION TERMS. Any option granted pursuant to this Plan
shall contain any other terms that either the Board, legal counsel for
Corporation, or the Committee deems necessary including, but not limited to,
requiring all Exempt Employees to enter into a stock buy-sell agreement upon
the exercise of the option.

25. EFFECTIVE DATE OF PLAN. This Plan shall be effective upon
approval either by the outstanding shares or by unanimous written consent of
the shareholders of the Corporation.

26. AMENDMENT AND TERMINATION OF PLAN. The Board may amend or
terminate this Plan and no option may be granted after termination. The
amendment or termination of the Plan shall not, however, alter any of the
rights or obligations of an Exempt Employee under an option previously granted.

27. INVESTMENT REPRESENTATIONS. Corporation may require an Exempt
Employee, as a condition of the exercising of such option, to give written
assurances in substance and form satisfactory to the Corporation to the
effect that such person is acquiring the common stock subject to the option for
his account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Corporation
deems necessary or appropriate in order to comply with federal and applicable
state securities laws.

28. COMPLIANCE WITH SECURITIES LAWS. Each option granted pursuant
to this Plan shall be subject to the requirement that, if at any time, counsel
to the Corporation shall determine that the listing, registration, or
qualification of the shares subject to such option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance or purchase of shares thereunder, such option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained on
conditions acceptable to the Board. Nothing herein shall be deemed to require
the Corporation to apply for or to obtain such listing, registration, or
qualification.

29. NO RIGHTS AS A SHAREHOLDER. The holder of an option shall have
no rights as a shareholder with respect to any shares covered by the option
until the date of exercise of the option and full payment for the shares
purchased.

30. NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in the Plan,
or in any option granted under the Plan, shall confer upon any Exempt Employee
any right with respect to the continuation of employment by the Corporation or
interfere with the right of the Corporation, subject to the terms of any
separate employment agreement to the contrary, to terminate such employment or
to increase or decrease the compensation of the Exempt Employee from the rate
in existence at the time of the grant of an option.

-5-
<PAGE> 6
31. OTHER EMPLOYEE BENEFITS. The amount of any compensation
deemed to be received from Corporation by an Exempt Employee as a result of the
exercise of an option or the sale of shares received upon such exercise shall
not constitute "earnings" with respect to which any other Exempt Employee
benefits of such employee are determined including, without limitation,
benefits under any pension, profit-sharing, life insurance, or salary
continuation plan.

32. AMENDMENT OF THE PLAN. The Board may, at any time, modify or
amend the Plan in any respect, except that without the approval of the
shareholders of the Corporation holding more than fifty percent (50%) of the
common voting stock of Corporation, the Board may not:

(a) Materially increase the benefits accruing to individuals who
participate in the Plan;

(b) Materially increase the maximum number of shares which may be
issued under the Plan; or

The termination, modification, or amendment of the Plan shall not, without the
consent of an Exempt Employee, affect his rights under an option previously
granted to him. With the consent of the Exempt Employee affected, the Board
may amend outstanding option agreements in a manner not inconsistent with the
Plan. The Board may amend or modify the terms and provisions of the Plan, and
of any outstanding incentive stock options granted under the Plan, to the
extent necessary to qualify any such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Internal Revenue Code Section 422A.

33. WITHHOLDING. The obligation of Corporation to deliver shares
upon the exercise of any option granted under the Plan shall be subject to the
payment, if any, by the Exempt Employee to the Corporation, or otherwise
providing for the payment of, all money necessary to comply with all applicable
federal, state, and local income and employment tax withholding requirements.
The Corporation may make reasonable requirements for security or other
assurance that all such tax withholding payments will be made in the event of a
premature disposition of the stock.

Adopted by the Board of Directors
on April 4, 1995.

Adopted by the Shareholders on
______________________ 1992.

-6-

<PAGE> 1
EMPLOYMENT CONTRACT FOR SENIOR EXECUTIVE

Bikers Dream, Inc., a California corporation, located at 1420 Village
Way, Santa Ana, California 92705, hereinafter referred to as Employer, and
William R. Gresher, hereinafter referred to as Employee, in consideration of
the mutual promises made herein, agree as follows:

ARTICLE 1. TERM OF EMPLOYMENT

Specified Period

Section 1.01. Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of Five (5) years beginning on
September 25, 1995 and terminating on September 24, 2000. This Agreement shall
thereafter be renewed annually, unless a party shall have given 30 days' notice
to the other of intention not to renew.

"Employment Term" Defined

Section 1.02. As used herein, the phrase "employment term" refers to
the entire period of employment of Employee by Employer hereunder, whether for
the periods provided above, or whether terminated earlier as hereinafter
provided or extended automatically or by mutual agreement between Employer and
Employee.

ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE

General Duties

Section 2.01. Employee shall serve as the Senior Vice President and
Chief Financial, Operating and Administrative Officer of Bikers Dream, Inc. In
the aforesaid capacities as Senior Vice President of Bikers Dream, Inc.,
Employee shall do and perform all services, acts, or things necessary or
advisable to manage and conduct the financial activities, operations and
administration of Employer.

Specific Duties and Authority

Section 2.02. Employee shall have the authority to approve or
disapprove all cash disbursements, except for ongoing contractual obligations
in existence at the date of hire, develop and approve budgets and business and
Corporate planning, manage human resources, oversee all operations, and
administration of staff and systems. Employee shall work with and report to
the president and Board of Directors of the corporation, which shall comprise
the only elements of superior authority in Employer corporation.

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.23
<PAGE> 2
Matters Requiring Consent of Board of Directors

Section 2.03. Employee shall not without specific approval of
Employer's Board of Directors, do or contract to do any of the following:

(1) Borrow on behalf of Employer during any one fiscal year an
amount in excess of $100,000.

(2) Permit any customer of Employer to become indebted to Employer
in an amount in excess of $100,000.

(3) Purchase capital equipment for amounts in excess of
$10,000,00.

(4) Sell any single capital asset of Employer having a market
value in excess of $10,000 or a total of capital assets during a fiscal year
having a market value in excess of $30,000.

(5) Terminate the services of any other officer of Employer or
hire any replacement of any officer whose services have been terminated.

Devotion to Employer's Business

Section 2.04. (a) Employee shall devote his entire productive time,
ability, and attention to the business of Employer during the term of this
contract.

(b) Employee shall not engage in any other business duties or
pursuits whatsoever, or directly or indirectly render any services of a
business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Employer's Board of Directors.

(c) This agreement shall not be interpreted to prohibit Employee
from making passive personal investments or conducting private business affairs
if those activities do not materially interfere with the services required
under this agreement.

Competitive Activities

Section 2.05. During the term of this contract Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer.

Uniqueness of Employee's Services

Section 2.06. Employee hereby represents and agrees that the services
to be performed under

2
<PAGE> 3
the terms of this contract are of a special, unique, unusual, extraordinary,
and intellectual character that gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law.
Employee therefore expressly agrees that Employer, in addition to any other
rights or remedies that Employer may possess, shall be entitled to injunctive
and other equitable relief to prevent or remedy a breach of this contract by
Employee.

Indemnification for Misconduct

Section 2.07. Employee shall indemnify and hold Employer harmless from
all liability for loss, damage, or injury to persons or property resulting from
the misconduct of Employee. Misconduct shall include acts involving moral
turpitude, illegal acts, or acts outside of Employee's authority which cause
damage to Employer.

Trade Secrets

Section 2.08. (a) The parties acknowledge and agree that during the
term of this agreement and in the course of the discharge of his duties
hereunder, Employee shall have access to and become acquainted with information
concerning the operation of Employer, including without limitation, customer
lists, financial, personnel, sales, and other information that is owned by
Employer and regularly used in the operation of Employer's business, and that
such information constitutes Employer's trade secrets.

(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly, to
any other person or use them in any way, either during the term of this
agreement or at any other time thereafter, except as is required in the course
of his employment hereunder.

(c) Employee acknowledges and agrees that the sale or unauthorized
use or disclosure of any of Employer's trade secrets obtained by Employee
during the course of his employment under this agreement, including information
concerning Employer's current or any future and proposed work, services, or
products, the facts that any such work, services, or products are planned, under
consideration, or in production, as well as any descriptions thereof,
constitute unfair competition. Employee promises and agrees not to engage in
any unfair competition with Employer, either during the term of this agreement
or at any other time thereafter.

(d) Employee further agrees that all files, records, documents,
specifications, equipment, and similar items relating to Employer's business,
whether prepared by Employee or others, are and shall remain exclusively the
property of Employer and that they shall be removed from the premises of
Employer only with the express prior written consent of Employer's Board of
Directors.

Services as Consultant

Section 2.09. Following Employee's retirement, and if the employment
term has not been terminated for cause, Employee shall make his advice and
counsel available to Employer for three months, at not less than one half of
his previous year's compensation. The parties agree that this

3
<PAGE> 4
advice and counsel shall not entail full time service and shall be consistent
with Employee's retirement status.

ARTICLE 3. OBLIGATIONS OF EMPLOYER

General Description

Section 3.01. Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.

Office and Staff

Section 3.02. Employer shall provide Employee with a private office,
stenographic help, office equipment, supplies, and other facilities and
services, suitable to Employee's position and adequate for the performance of
his duties.

Indemnification of Losses of Employee

Section 3.03. Employer shall Indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his duties on
Employer's behalf.

ARTICLE 4. COMPENSATION OF EMPLOYEE

Annual Salary

Section 4.01. (a) As compensation for the services to be performed
hereunder, Employee shall receive a salary at the rate of $185,000 per annum
payable not less than bi-monthly during the employment term.

(b) Employee shall receive such annual increases in salary, if
any, as may be determined by Employer's Board of Directors in its sole
discretion at a meeting the agenda of which includes compensation of officers.

Tax Withholding

Section 4.02. Employer shall have, the right to deduct or withhold
from the compensation due to Employee hereunder any and all sums required for
federal income and Social Security taxes and all state or local taxes now
applicable or that may be enacted and become applicable in the future.

4
<PAGE> 5
ARTICLE 5. EMPLOYEE INCENTIVES

Bonus

Section 5.01. Employee shall receive a sum equivalent to five percent
(5%) of the first $1 million net profits after tax of Employer, and two percent
(2%) of the second $1 million of net profits after tax of Employer, computed
for purposes of quantifying this bonus without its inclusion as an expense
item. For purposes of this computation, the opinion of the Employee's
independent accountants shall be binding on the parties. The bonus will be
paid to Employee within 60 days of the end of each fiscal year during the term
or any extension hereof.

Stock Options

Section 5.02. Employee will be granted stock options outside of
Employer's Incentive Stock Options Plan in the aggregate amount of 300,000
shares, exercisable at $2.50 per share at any time within two years of the
expiration date of all options. 50,000 of the stock options shall vest upon
execution of this agreement and commencement of employment, and 50,000 shall
vest on each anniversary of the date hereof for five years. Options granted
pursuant to this Agreement shall expire on September 25, 2002.

ARTICLE 6. EMPLOYEE BENEFITS

Annual Vacation

Section 6.01. Employee shall be entitled to five weeks vacation time
each year, with an increase of one week for each three years of service.
Vacation will vest throughout the year beginning as of the date of employment,
with 1/24 being earned each semi-monthly payroll period. The Employee shall
have the right to buyback vacation up to two weeks a year. Any accrued,
vested and unused vacation at the termination of employment for any reason will
be due and payable as compensation at the time of termination without loss of
other elements of compensation. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he may accumulate that time and add it to vacation time for any following
year, not to exceed 10 weeks in the aggregate.

Medical Coverage

Section 6.02. Employer agrees to, within 5 months of hire, include
Employee in the coverage of its medical, major medical, hospital, dental, and
eye care insurance. This shall include a flex spending account, and a PPO or
HMO option; a "cafeteria" plan will be provided if practical.

Life Insurance

Section 6.03. (a) Employer agrees to obtain a term life insurance
policy on the life of Employee in the face amount of $500,000. Employer
further agrees to make that insurance policy

5
<PAGE> 6
payable to the beneficiary or beneficiaries designated by Employee. Employer
agrees to pay all premiums on the policy during the term of employment provided
herein.

(b) Employee agrees to submit to a physical examination at any
time requested by Employer for the purpose of Employer's obtaining life
insurance on the life of Employee for the benefit of Employer; provided,
however, that Employer shall bear the entire cost of that examination. Employer
shall pay for an annual physical examination at a physician/institution of
Employee's choosing.

ARTICLE 7. BUSINESS EXPENSES

Reimbursement of Business Expenses

Section 7.01. (a) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee in connection with the
business of Employer.

(b) Each such expenditure shall be reimbursable only if Employee
furnishes to Employer adequate records and other documentary evidence required
by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.

ARTICLE 8. TERMINATION OF EMPLOYMENT

Termination for Cause

Section 8.01. (a) Employer reserves the right to terminate this
agreement if Employee wilfully breaches or habitually neglects the duties which
he is required to perform under the terms of this agreement; or commits such
acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude
as would prevent the effective performance of his duties.

(b) Employer may at its option terminate this agreement for the
reasons stated in this Section by giving written notice of termination to
Employee without prejudice to any other remedy to which Employer may be
entitled either at law, in equity, or under this agreement.

(c) The notice of termination required by this section shall
specify the ground for the termination and shall be supported by a statement of
all relevant facts.

(d) Termination under this section shall be considered "for cause"
for the purposes of this agreement.

Termination Without Cause

Section 8.02. (a) If Employee is terminated by Employer during the
first 12 months of

6
<PAGE> 7
employment without cause, Employee shall be entitled to severance pay equal to
one year's compensation, incremented by one additional month for each month of
service, not to exceed a total of 24 months, payable in the same manner as if
Employee remained employed by Employer.

Effect of Merger, Transfer of Assets, Dissolution, other termination.

Section 8.03. (a) At the option of Employee, this agreement shall not
be terminated by any voluntary or involuntary dissolution of Employer resulting
from either a merger or consolidation in which Employer is not the consolidated
or surviving corporation, or a transfer of all or substantially all of the
assets of Employer.

(b) In the event of any such merger or consolidation or transfer
of assets, Employer's rights, benefits, and obligations hereunder shall be
assigned to the surviving or resulting corporation or the transferee of
Employer's assets.

(c) If Employee does not wish to continue his employment with a
corporation other than Employer which is not the surviving corporation in a
merger, Employee shall be entitled to severance pay equal to one years total
compensation, incremented by one additional month for each month of service,
not to exceed a total of 24 months.

Termination by Employee

Section 8.04. Employee may terminate his obligations under this
agreement by giving Employer at least one months notice in advance.

Death of Employee

Section 8.05. This Agreement shall be terminated upon the death of
Employee.

ARTICLE 9. GENERAL PROVISIONS

Notices

Section 9.01. Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt;
mailed notices shall be deemed communicated as of five days after date of
mailing.

Arbitration

Section 9.02. (a) Any controversy between Employer and Employee
involving the

7
<PAGE> 8
construction or application of any of the terms, provisions, or conditions of
this agreement shall on the written request of either party served on the other
be submitted to arbitration. Arbitration shall comply with and be governed by
the provisions of the California Arbitration Act.

(b) Employer and Employee shall each appoint one person to hear
and determine the dispute. If the two persons so appointed are unable to
agree, then those persons shall select a third impartial arbitrator whose
decision shall be final and conclusive upon both parties.

Attorneys' Fees and Costs

Entire Agreement

Section 9.04. This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no representation,
inducements, promises, or agreements, orally or otherwise, have been made by
any party, or anyone acting on behalf of any party, which are not embodied
herein, and that no other agreement, statement, or promise not contained in
this agreement shall be valid or binding on either party.

Modifications

Section 9.05. Any modification of this agreement will be effective
only if it is in writing and signed by the party to be charged.

Effect of Waiver

Section 9.06. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times be deemed a waiver or relinquishment of that right or power
for all or any other times.

Partial Invalidity

8
<PAGE> 9
Law Governing Agreement

Section 9.08. This agreement shall be governed by and construed in
accordance with the laws of the State of California.

Sums Due Decreased Employee

Executed on September 11, 1995, at Santa Ana, California.
------------- ----------
EMPLOYER

Bikers Dream, Inc.

By: /s/ DENNIS CAMPBELL
----------------------------
Dennis Campbell, President

EMPLOYEE

By: /s/ WILLIAM R. GRESHER
----------------------------
William R. Gresher

9
<PAGE> 10
AMENDMENT TO EMPLOYMENT CONTRACT FOR
SENIOR VICE PRESIDENT, CHIEF FINANCIAL,
OPERATING AND ADMINISTRATIVE OFFICER

THIS AMENDMENT is to that certain Employment Contract by and between
Bikers Dream, Inc., a California corporation, ("Employer") and William R.
Gresher, Senior Vice President, Chief Financial, Operating and Administrative
Officer, ("Employee"), which became effective on September 25, 1995.

A) Stock Options
-------------
Article 5, Section 5.02 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employee will be granted stock options in the aggregate amount of
300,000 shares, exercisable at $2.50 per share at any time within two
years of the expiration date of all options. 240,000 of these options
are granted under the Employer's Incentive Stock Options Plan, and
60,000 of these options are outside of the Employer's Incentive Stock
Options Plan. 50,000 of the stock options shall vest upon execution of
this agreement and commencement of employment, and 50,000 shall vest
each anniversary of the date hereof for five years. At each option
vesting date, 80% of the options will be under the Employer's
Incentive Stock Options Plan, and the balance will be outside of the
Employer's Incentive Stock Options Plan. All options granted pursuant
to this Agreement shall expire on September 25, 2002."

Employer
Bikers Dream, Inc. Dated: 10/5/95
------------------

By: /s/ DENNIS CAMPBELL By:
----------------------------- -----------------------------
Dennis Campbell William R. Gresher
President & CEO Senior Vice President, Chief
Financial Operating and
Administrative Officer
<PAGE> 11
AMENDMENT TO EMPLOYMENT CONTRACT FOR
SENIOR VICE PRESIDENT, CHIEF FINANCIAL,
OPERATING AND ADMINISTRATIVE OFFICER

A) Stock Options
-------------
Article 5, Section 5.02 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employee will be granted stock options in the aggregate amount of
300,000 shares, exercisable at $2.50 per share at any time within two
years of the expiration date of all options. 240,000 of these options
are granted under the Employer's Incentive Stock Options Plan, and
60,000 of these options are outside of the Employer's Incentive Stock
Options Plan. 50,000 of the stock options shall vest upon execution
of this agreement and commencement of employment, and 50,000 shall
vest each anniversary of the date hereof for five years. At each
option vesting date, 80% of the options will be under the Employer's
Incentive Stock Options Plan, and the balance will be outside of the
Employer's Incentive Stock Options Plan. All options granted pursuant
to this Agreement shall expire on September 25, 2002."

Employer
Bikers Dream, Inc. Dated: 10/5/95
---------

By: By: /s/ WILLIAM R. GRESHER
--------------------------- ---------------------------
Dennis Campbell William R. Gresher
President & CEO Senior Vice President, Chief
Financial Operating and
Administrative Officer

<PAGE> 1
CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is entered into this 26 day of
September, 1995, is to be effective October 1, 1995, and sets forth a new
understanding which has been reached between Meyer Duffy & Associates (the
"Consultant") and Bikers Dream, Inc. (the "Company"), concerning the provision
of certain management consulting, financial advisory and investment banking
services by the Consultant to the Company. This Consulting Agreement shall not
supplant the Consulting Agreement of April 6, 1995 ("Initial Consulting
Agreement"), which shall also continue in force until its expiration date of
October 4, 1995.

I. Purpose: The Company hereby engages the Consultant for a ten
month term commencing October 1, 1995 to render consulting advice to the
Company relating to management, financial and similar matters upon the terms and
conditions set forth herein.

II. Duties of the Consultant: During the term of the Agreement,
the Consultant shall use its best efforts to provide the Company with such
regular and customary financial consulting advice and management consulting as
is reasonably requested by the Company consistent with the foregoing, and
shall use its best efforts to obtain a commitment from a reputable investment
banking firm to raise up to Ten Million ($10,000,000.00) Dollars of capital for
the Company.

A. The Consultant's duties may include, but will not
necessarily be limited to, providing recommendations concerning the following
financial and related matters:

1. Rendering advice with regard to internal
operations, including:

a. the formation of corporate goals and
their implementation;

b. revising the Company's business
plan;

c. the Company's financial structure,
including its divisions or
subsidiaries;

d. corporate organization and
personnel;

2. Rendering advice and assistance with regard
to any of the following corporate finance
matters:

a. changes in capitalization of the
Company;

b. changes in the Company's corporate
structure;

c. redistribution of shareholdings of
the Company's stock;

d. offerings of securities in public
transactions;

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.24
<PAGE> 2
e. sales of securities in private
transactions;

f. alternative uses of corporate
assets;

g. structure and use of debt; and

h. sales of stock by insiders;

3. Disseminating information about the Company
to the investment community at large;

4. Rendering advice and assistance in connection
with the preparation of annual and interim
reports and press releases;

5. Assisting in the Company's financial public
relations;

6. Arranging, on behalf of the Company, at
appropriate times, meetings with securities
analysts of major regional investment banking
firms;

7. Assistance in negotiations with regional
investment banking firms with the goal of
maximizing the evaluation of the Company and
procuring additional equity and debt capital;

8. introducing clients, customers or other
business opportunities with a view to
generating sales of goods or services by the
Company.

B. In addition to the foregoing, the Consultant agrees
to furnish advice to the Company in connection with (i) the acquisition and/or
merger of or with other companies, any divestiture or any other similar
transaction, or the sale of the Company itself (or any significant
percentage of the assets, subsidiaries or affiliates thereof, and (ii) bank
financing or any other financing from financial institutions.

C. The Consultant shall reader such other financial
advisory and investment and/or investment banking services as may from time to
time be agreed upon by the Consultant and the Company.

III. Compensation: The compensation provided for herein is
performance based; that is, contingent upon the achievements of certain goals
by the Company with the assistance of Consultants. In consideration for the
services rendered by the Consultant to the Company pursuant to this Agreement
(and in addition to its expenses), the Company shall compensate the Consultant
as follows:

A. The Consultant is entitled to receive a monthly fee
grant of 2,500 shares of the Company's common stock for the six month period
ending October 4, 1995, an aggregate of

2
<PAGE> 3
15,000 shares, pursuant to the Initial Consulting Agreement.

B. In addition, in consideration of Consultants'
assistance in placing the Company's $625,000.00 convertible debt offering, the
Company will grant to Consultant an option, in the form of the option attached
hereto, to purchase at any time within two years of the date of the grant
30,000 shares of the Company's common stock at a price of $2.50 per share.

C. In addition, in consideration of Consultants'
assistance in placing an additional $600,000 of the Company's convertible debt
and other services rendered and to be rendered pursuant to this Agreement, the
Company will pay Consultant the sum of $49,200.00, beginning October 1, 1995,
in the following increments:

On October 1, 1995, $4,200.00, and $5,000.00 per month on
November 1, 1995 and the first day of each month thereafter
until fully paid with the final payment due July 1, 1996.

D. In addition, the Consultant is assisting the Company
in raising up to $10,000,00.00 of additional capital through an investment
banker or bankers introduced by Consultant to the Company. Upon the successful
closing of an offering(s) through such an investment banker, the Company agrees
to grant to Consultant an option, in the form of the option attached hereto, to
purchase 10,000 shares of the Company's common stock for each $1,000,000 of
capital received by the Company in such offering(s), up to a maximum of 100,000
shares for $10,000,000 of capital received. The options shall be granted in
pro rata increments, e.g., 7,500,000 in capital raised equates to $75,000.00 in
options. The option shall be exercisable at a price of $2.50 per share, at any
time within two years after the date of completion of a successful financing
pursuant hereto.

E. The Company hereby grants to Consultant observer
status at meetings of its Board of directors, which may be effected by
telephone.

IV. Expenses: The Company shall reimburse the Consultant for the
Consultant's counsel and the Consultant's travel and out-of-pocket expenses
incurred in connection with the services performed by the Consultant pursuant
to the Agreement, provided that any expenses above $500.00 for any single item
shall be pre-approved by the Chief Financial Officer of the Company and, upon
reasonable request, may be advanced.

V. Trade Secrets of the Consultant: The Company acknowledges that
all opinions and advice (written or oral) given by the Consultant to the
Company in connection with the Consultant's engagement are intended solely for
the benefit and use of the Company in considering the transaction to which they
relate, and the Company agrees that no person or entity other than the Company
shall be entitled to make use of or rely upon the advice of the Consultant
given under the Agreement. The Company further acknowledges that any
information given to it by the Consultant, including the names of any funding
sources, ESOP consultants, brokerage houses or management consultants, are

3
<PAGE> 4
confidential, and are trade secrets proprietary to the Consultant, and during
the term of the Agreement and for 5 years thereafter the Company may make no
use of such information without the express written consent of the consultant.

VI. Registration Rights: The Company shall grant the Consultant
piggyback registration rights with respect to any shares issued to Consultants
pursuant to the Initial Consulting Agreement or shares issuable on exercise
of options granted to Consultant under this Agreement.

VII. The Consultant's Services to Others: The Company acknowledges
that the Consultant and its affiliates are in the business of providing
financial services and consulting advice to others. Nothing herein contained
shall be construed to limit or restrict the Consultant in conducting such
business with respect to others, or in rendering such advice to others.

VIII. Indemnification: The Company shall indemnify and hold the
Consultant harmless to the fullest extent usual and customary in relationships
of this nature. Consultant shall indemnify and hold the Company harmless from
damages accruing to third parties and the Company arising from the disclosure
of information known to Consultant to be inaccurate or misleading.

IX. The Consultant as Independent Contractor: The Consultant shall
perform its services under the Agreement as independent contractor and not as
an employee of the Company or an affiliate thereof.

X. Accurate Information: The Company hereby represents and
warrants that all information provided the Consultant pertaining to the Company
shall be true and correct; and the Company shall hold the Consultant harmless
from any and all liability, expenses or claims arising from the disclosure or
use of such information.

XI. Confidentiality: Right to Publish Tombstone: The parties
shall enter into a confidentiality agreement customary for relationships of
this nature in order to protect the confidentiality of proprietary business
information. The Company specifically acknowledges, however, that the
Consultant shall be entitled to publish or distribute notices in the nature of
so called "tombstone" advertisements to announce the closing of transactions
involving the Company.

XII. Applicable Law: The Agreement will be governed by and
construed under the laws of the State of California, and any action brought by
either party against the other party to enforce or interpret the Agreement
shall be subject to binding arbitration within such State. In the event of

4
<PAGE> 5
any such action, the prevailing party shall recover all costs and expenses
thereof, including reasonable attorney's fees, from the losing party.

The undersigned concur with the matters set forth in the
foregoing Agreement.

MEYER DUFFY & ASSOCIATES

By: /s/ ERIC MEYER
----------------------------------

THE COMPANY

By: /s/ DENNIS CAMPBELL
---------------------------------
Dennis Campbell, President

5
<PAGE> 6
OPTION AGREEMENT

THIS OPTION AGREEMENT (the "Agreement") is entered into as of
September 26, 1995 by and between Bikers Dream, Inc., a corporation organized
under the laws of the State of California ("Company") and Meyer, Duffy &
Associates, Inc. ("Optionee").

RECITALS
--------

WHEREAS, Company and Optionee have entered into a Consulting Agreement
dated June 12, 1995 (the "Initial Consulting Agreement") and a second
Consulting Agreement dated September ____, 1995, ("Consulting Agreement"); and

WHEREAS, the company, pursuant to the terms of the Consulting
Agreement, has agreed to grant Optionee an option to purchase shares of the
Company's Common Stock in accordance with the terms of the Consulting
Agreement.

NOW THEREFORE, it is agreed:

1. Grant of Option. Company grants to Optionee on the date
hereof (the "Date of Grant") the irrevocable right and option (the "Option") to
purchase thirty thousand (30,000) shares of the Company's Common Stock (the
"Shares") at a price of Two Dollars and fifty Cents ($2.50) per share.

2. Option Term. The terms of the Option shall be for a period of
two (2) years commencing on the date hereof.

3. Exercise of Option. The Option shall be exercisable as
follows:

3.1 Thirty thousand (30,000) Shares covered by the Option
and shall become exercisable and vest upon the
execution of this Agreement.

4. Method of Exercise. The Option may be exercised by giving
written notice of exercise of the Option to the Company at the address and in
the manner set forth below. The notice shall state Optionee's election to
exercise the Option and this number of Shares with respect to which the Option
is being exercised. The notice of exercise shall be accompanied by full
payment (in cash or by check) of the amount of the purchase price of the Shares
as to which the Option is being exercised. A certificate or certificates for
the Shares as to which the Option is exercised shall be delivered to Optionee
as soon as practicable after the notice and payment has been received by the
Company.

5. Investment Representations. By accepting this Option, Optionee
represents, acknowledges and agrees that:

(a) Optionee is acquiring the Option and any Shares
acquired upon exercise of the Option for Optionee's
own account or for Eric Meyer and Donald Duffy,
<PAGE> 7
principals of Optionee, not with a view to, or for
sale in connection with, any distribution thereof.

(b) The Shares shall not be sold or transferred until
either (i) they first shall have been registered
under the Securities Act of 1933, or (ii) the Company
first shall have been furnished with an option of
legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is
exempt from the registration requirements of the
Securities Act of 1933.

(c) The certificates evidencing the Shares issued upon
exercise of the Option will bear the following
restrictive legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT") AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT OR
AN OPTION OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED
TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."

6. Privileges of Stock Ownership. Neither Optionee nor any
transferee of Optionee shall have any of the rights or privileges of a
stockholder of the Company with respect to any Shares issuable upon the
exercise of the Option until certificates representing such Shares shall have
been issued and delivered.

7. Adjustments to Number and Purchase Price of Shares. If the
outstanding shares of the Common Stock of the Company are increased, decreased,
changed into or exchanged for a different number or kind of shares or
securities of the Company through merger, consolidation, combination, exchange
of shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as to which
the Option may be exercised pursuant to this Agreement. Any such adjustment in
shares subject to the Option shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the Option.

Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the property of the Company to
another person or persons, appropriate provision shall be made in writing in
connection with such transaction for the continuance of the option and for the
assumption of the obligations of the Company hereunder, or the substitution for
the Option granted hereunder of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate adjustment as
to the number and kind of shares and exercise prices.

2
<PAGE> 8
8. Registration Rights. The Optionee shall be entitled to the
following registration rights with respect to the Shares, regardless of whether
the Option has been exercised at the time of registration:

(a) If, at any time after the date hereof, the Company
proposes to register any of its securities under the
Securities Act of 1933 (the "Act"), it shall give to
the Optionee written notice of its intention in that
regard and use its best efforts to effect the
registration under such Act, if such registration is
permissible, of such number of Shares as may be
specified by written notice from the Optionee
delivered to the Company within twenty (20) days
after such notice is given (which notice shall be
deemed to have been given upon the deposit thereof in
first class or express U.S. mail, postage prepaid,
addressed to the Optionee at the address of such
person as shown on the books of the Company). The
costs and expenses of such offering, including, but
not limited to, legal fees, special audit fees,
printing expenses, filing fees, fees and expenses
relating to qualifications under state securities or
blue sky laws and premiums for insurance, if any,
incurred by the Company in connection with any
registration made pursuant to this Section 8 shall be
borne entirely by the Company.

(b) In the event of any registration of Shares pursuant
hereto, the Company shall indemnify the holders of
the Shares being registered, their officers and
directors and each person, if any, who controls such
holders within the meaning of Section 15 of the
Securities Act of 1933, against all losses, claims,
damages and liabilities caused by any untrue
statement or alleged untrue statement of a material
fact contained in any registration statement or
prospectus (and as amended or supplemented) or any
preliminary prospectus or any offering circular,
relating to such registration, or caused by any
omission or alleged omission to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances under which they are made, unless such
statement or omission was made in reliance upon and
in conformity with information furnished in writing
to the Company by the holder expressly for use
therein. The obligations of the Company to register
any of its securities in accordance with the
foregoing shall be subject to the condition that the
Optionee shall agree in writing to indemnify the
Company, its officers and directors, and each person,
if any, who controls the Company within the meaning
of Section 15 of the Securities Act of 1933, and
each person, if any, who controls such underwriter
with respect to losses, claims, damages and
liabilities caused by any untrue statement or
omission made in reliance upon and in conformity with
information furnished in writing by the Optionee to
the Company expressly for use in such registration
statement, prospectus or offering circular.

3
<PAGE> 9
(c) Upon the exercise of registration rights pursuant
hereto, the Optionee agrees to supply the Company
with such information as may be required by the
Company to register or qualify the Shares as
described herein.

(d) The registration rights granted to the Optionee
pursuant to this Agreement shall also be for the
benefit of, and enforceable by, any subsequent holder
of the Shares, whether or not any express assignment
of such rights to any such subsequent holder is made.

9. General Provisions.

(a) The subject headings of the sections and paragraphs
of this Agreement are included for purposes of
convenience only, and shall not affect the
construction or interpretation of any of its
provisions.

(b) This Agreement constitutes the entire agreement
between the parties, pertaining to the subject matter
contained in it and supersedes all prior and
contemporaneous agreements, representations and
understandings of the parties. No supplement,
modification, or amendment of this Agreement shall be
binding unless executed in writing by all of the
parties. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a
continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.

(c) This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed
an original, but all of which together shall
constitute one and the same instrument.

(d) This Agreement shall be binding on, and shall inure
to the benefit of, the parties to it and their
respective heirs, legal representatives, successors
and permitted assigns.

(e) Any and all notices, demands or other communications
required or desired to be given hereunder by any
party shall be in writing and shall be validly given
or made to another party if given by personal
delivery, telex, facsimile, telegram or if deposited
in the United States mail, certified or registered,
postage prepaid, return receipt requested. If such
notice, demand or other communication is given by
personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time
of receipt. If such notice, demand or other
communication is given by mail, such notice shall be
conclusively deemed given forty-eight (48) hours
after the deposit thereof in the United States mail
addressed to the party to whom such notice, demand
of other communication is to be given as hereinafter
set forth:

4
<PAGE> 10
To Company: Bikers Dream, Inc.
1420 Village Way
Santa Ana, California 92705

To Optionee: At the Address set forth below his
name on the signature page of this
Agreement.

Any party may change its address for purposes of this paragraph by
giving the other parties written notice of the new address in the manner set
forth above.

IN WITNESS WHEREOF, the parties have executed this Option Agreement
as of the day and year first above written.

"COMPANY" "OPTIONEE"

Bikers Dream, Inc. Meyer, Duffy & Associates, Inc.

By: /s/ DENNIS CAMPBELL By: /s/ DONALD DUFFY
--------------------------- -----------------------------
Dennis Campbell Its: Secretary/CFO
Its: President ------------------------

Address: 237 Park Avenue
Eighth Floor
New York, New York 10017

<PAGE> 1

ASSET PURCHASE AGREEMENT

between

JOSEPH C. MELIA

and

CHARLES J. MELIA

as "Sellers"

and

BIKERS DREAM, INC.,

A CALIFORNIA CORPORATION

as "Purchaser"

BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.25
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1 - SALE AND PURCHASE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Assets Sold and Acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

(a) Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(c) Furniture, Fixtures, Equipment and Other Personal Property . . . . . . . . . . 2
(d) Leasehold Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) Customer Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(f) Work in Process and Unfilled Orders . . . . . . . . . . . . . . . . . . . . . 2
(g) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(h) Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(i) Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(j) Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(k) Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.2 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

(a) Cash at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Cash Thirty Days After Closing . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Assumption of Delinquent Rent Amount . . . . . . . . . . . . . . . . . . . . . 3
(e) Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.3 Work in Process and Unfilled Orders . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 No Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Sales and Use Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8 Verification of Value of Leasehold Improvements and Personal Property . . . . . . . 4

SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THE SELLERS . . . . . . . . . . . . . . . . . . . . . 5

2.1 Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Litigation and Other Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Notice of Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>

<PAGE> 3
<TABLE>
<S> <C>
2.7 Leasehold Improvements and Personal Property . . . . . . . . . . . . . . . . . 6
2.8 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10 The Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Work in Process and Unfilled Orders . . . . . . . . . . . . . . . . . . . . . 6
2.12 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.13 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15 Compliance With Legislation Regulating Environmental Quality . . . . . . . . . 7
2.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.17 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . . . . . . . . . . . . . . 8

3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Litigation and Other Proceedings . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 4 - THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.1 The Closing Date and Place . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Actions and Deliveries by the Sellers At the Closing . . . . . . . . . . . . . 9
4.3 Actions and Deliveries by the Purchaser at the Closing . . . . . . . . . . . . 10

SECTION 5 - CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.1 Conditions Precedent of the Purchaser . . . . . . . . . . . . . . . . . . . . 10

(a) Representations and Warranties True at Closing . . . . . . . . . . . . . 10
(b) Compliance with Agreement . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Condition of the Assets . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Value of the Leasehold Improvements and Personal Property . . . . . . . 11
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
5.2 Conditions Precedent of the Sellers . . . . . . . . . . . . . . . . . . . . . 11

(a) Representations and Warranties True at Closing . . . . . . . . . . . . . 11
(b) Compliance with Agreement . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 6 - SELLERS' OBLIGATIONS AFTER CLOSING . . . . . . . . . . . . . . . . . . . . . . . 11

6.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

(a) Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

6.2 Indemnification by the Sellers . . . . . . . . . . . . . . . . . . . . . . . 12

(a) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Defense of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6.3 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 Waiver of Unknown Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 13

SECTION 7 - PURCHASER'S OBLIGATIONS AFTER CLOSING . . . . . . . . . . . . . . . . . . . . . 14

7.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Indemnification by the Purchaser . . . . . . . . . . . . . . . . . . . . . . . 14

(a) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Defense of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

7.3 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Waiver of Unknown Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 8 - COSTS AND BROKER'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

8.1 Costs Borne by Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 9 - FORM OF AGREEMENT AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . 16

9.1 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>

iii
<PAGE> 5
<TABLE>
<S> <C>
9.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 10 - PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

10.1 Other Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 11 - SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 17

SECTION 12 - NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SECTION 13 - CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

13.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

(a) Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Nondisclosure and Nonuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 14 - GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>

iv
<PAGE> 6
EXHIBITS

<TABLE>
<S> <C>
Exhibit A Excluded Assets
Exhibit B Purchased Assets
Exhibit C Accounts Receivable
Exhibit D Furniture, Fixtures and Equipment
Exhibit E Customer Materials
Exhibit F Work in Process and Unfilled Orders
Exhibit G Inventory
Exhibit H Lease
Exhibit I Promissory Note
Exhibit J Security Agreement
Exhibit K Form UCC-1
Exhibit L Allocation of Assets
Exhibit M Litigation
Exhibit N Insurance Policies
Exhibit O Bill of Sale
</TABLE>

v
<PAGE> 7
ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement"), effective as of
September 22, 1995, is made by and between JOSEPH C. MELIA and CHARLES J. MELIA,
both California resident individuals (collectively, with joint and several
liability, the "Sellers") and BIKERS DREAM, INC., a California corporation (the
"Purchaser"):

WITNESSETH:

WHEREAS, the Sellers are the owners and operators of a motorcycle,
motorcycle parts, accessories and service business (the "Business") located at
75 Long Court, Thousand Oaks, California 91360 (the "Location") being operated
under the trade name "Bikers Dream" in accordance with the terms and conditions
of that certain franchise agreement dated May 13, 1994 between Sellers, as the
franchisee, and the Purchaser, as the franchisor (the "Franchise Agreement");
and

WHEREAS, the Sellers desire to sell certain assets of the Business to
the Purchaser and the Purchaser desires to acquire such assets from the
Sellers;

NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein set forth and One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and subject to the terms and conditions hereof, the parties agree as follows:

SECTION 1
SALE AND PURCHASE OF ASSETS

1.1 ASSETS SOLD AND ACQUIRED. Subject to the terms and conditions
set forth in this Agreement, the Sellers do hereby agree to sell, transfer, and
deliver to the Purchaser, and the Purchaser does hereby agree to purchase,
acquire, and accept from the Sellers, on the Closing Date all rights, title and
interest of Sellers in and to properties, assets and rights of any kind, except
for the excluded assets (the "Excluded Assets") set forth on Exhibit A, whether
tangible or intangible, real or personal of the Sellers used in connection with
the Business (the "Assets") including, without limitation, the assets set forth
on Exhibit B, and the following:

(a) CASH. All cash held by Sellers with respect to the
Business;

(b) ACCOUNTS RECEIVABLE. All accounts receivable
(whether current or noncurrent) and refunds, deposits, prepayments or prepaid
expenses of the Sellers with respect to the Business, a true and accurate list
of which is attached hereto as Exhibit C;

<PAGE> 8
(c) FURNITURE, FIXTURES, EQUIPMENT AND OTHER PERSONAL
PROPERTY. All tools and equipment, furniture, fixtures, computer equipment,
software and other personal property of the Business (the "Personal Property"),
a true and accurate list of which is attached hereto as Exhibit D;

(d) LEASEHOLD IMPROVEMENTS. All rights, if any, of the
Sellers to the leasehold improvements attached to, appurtenant to or located in
or on the Location (the "Leasehold Improvements");

(e) CUSTOMER MATERIALS. All customer lists, current and
potential customer mailing lists, customer working files and customer
correspondence pertaining to the customers of the Business (the "Customer
Materials") including, without limitation, the customer lists and mailing lists
attached hereto as Exhibit E;

(f) WORK IN PROCESS AND UNFILLED ORDERS. The items of
work in process and unfilled orders of the Business, if any, existing on the
Closing Date which have been assumed by Purchaser pursuant to Section 1.3 (the
"Work in Process and Unfilled Orders"), a true and accurate list of which,
including itemized deposits received, is attached hereto as Exhibit F;

(g) INVENTORY. All parts inventory and all finished,
partially finished and unfinished motorcycle inventory of the Business on the
Closing Date wherever located including, without limitation, inventory which is
for sale elsewhere on consignment (the "Inventory"), a true and accurate list
of which is attached hereto as Exhibit G;

(h) LEASE. That certain Standard Industrial/Commercial
Single-Tenant Lease-Gross dated June 9, 1994 between Westlake Professional
Center Partnership, as landlord, and the Sellers, as tenant, for the use and
occupancy of the Location, a copy of which is attached hereto as Exhibit H and
incorporated herein by reference (the "Lease");

(i) PERMITS. All permits, licenses and other
governmental approvals necessary to the operation of the Business, to the
extent transferable (the "Permits");

(j) CLAIMS. All claims, causes of action, choses in
action, rights of recovery and rights of set-off including, without limitation,
any liens, security interests or other rights to payment or to enforce payment
in connection with sales which occurred prior to the Closing Date (the
"Claims"); and

(k) INTANGIBLE ASSETS. All other intangible properties of
Sellers with respect to the Business.

1.2 CONSIDERATION. The Purchaser agrees to pay the Sellers the
sum of Three Hundred Six Thousand Three Hundred and No/100ths Dollars
($306,300.00) (the "Purchase Price") as consideration for the sale, transfer
and delivery to the Purchaser of the Assets, payable in the following manner:

2
<PAGE> 9
(a) CASH AT CLOSING. $50,000 in cash or by wire transfer
of federal funds on the Closing Date;

(b) CASH THIRTY DAYS AFTER CLOSING. $100,000 in cash or
by wire transfer of federal funds on that date which is thirty (30) days after
the Closing Date;

(c) NOTE. $150,000, together with interest thereon at the
per annum rate of nine percent (9%), by executing and delivering to the Sellers
that certain Promissory Note, a copy of which is attached hereto as Exhibit I
and incorporated herein by reference, in such amount, executed by the Purchaser
in favor of the Sellers (the "Note"); the indebtedness represented by the Note
shall be payable in twelve (12) equal monthly installments of principal and
interest (each in an amount sufficient to fully amortize the balance over such
12-month period), commencing on that date which is sixty (60) days after the
Closing Date;

(d) ASSUMPTION OF DELINQUENT RENT AMOUNT. $6,300 by the
Purchaser assuming and agreeing to pay this amount in delinquent rent due under
the Lease; and

(e) SECURITY INTEREST. To secure the Purchaser's
performance of its obligations under the Note and to secure the performance of
its obligations under this Agreement executed by the Purchaser in connection
with this Agreement, the Purchaser shall execute and deliver to the Sellers on
the Closing Date a security agreement in the form of the security agreement
attached hereto as Exhibit J and incorporated herein by reference (the
"Security Agreement"), pursuant to which the Purchaser shall grant to the
Sellers a first priority security interest in and to the assets of Purchaser
set forth and described in the Security Agreement. In addition to the Security
Agreement, the Purchaser shall execute and deliver to the Sellers on the
Closing Date, and shall cause to be filed with the California Secretary of
State a Financing Statement on Form UCC-1 in the form of Exhibit K attached
hereto and incorporated herein by reference (the "UCC-1") and such other
documents as may be reasonably requested by the Sellers to evidence and perfect
the Sellers' security interest in and to such assets.

1.3 WORK IN PROCESS AND UNFILLED ORDERS. Prior to the Closing
Date, the Sellers shall prepare and deliver to the Purchaser a list setting
forth all work in process and unfilled orders of the Business sufficient to
enable the Purchaser to examine all work in process and unfilled orders of the
Business. The Purchaser shall have the option, but not the obligation, to
assume some or all of such work in process and assume some or all of such
unfilled orders from the Sellers on the Closing Date. All such items of work in
process and unfilled orders which the Purchaser does not desire to assume will
be retained by the Sellers as their property and, notwithstanding any other
language to the contrary contained in this Agreement or any agreement executed
in connection with this Agreement, the Sellers shall be free to dispose of such
retained items in any fashion they choose. All of such retained items shall be
removed from the Location by the Sellers, at the Sellers' expense, no later
than five (5) days after the Closing Date. Any such retained items not so
removed may be disposed of or utilized by the Purchaser as it deems fit, with
no obligation whatsoever to account to the Sellers for any such disposal or
utilization. With respect to any work in process and unfilled orders which the

3
<PAGE> 10
Purchaser elects to assume from the Sellers, the value of such items shall not
be in addition to, and shall be included within, the Purchase Price payable to
the Sellers pursuant to Section 1.2 above.

1.4 INVENTORY. A physical count of all Inventory of the Business
will be taken by representatives of the Sellers and the Purchaser on or before
the Closing Date and again, in an abbreviated fashion, on the Closing Date.
For the purposes of this Agreement, the value of each item of Inventory shall
be determined at the Sellers' cost for such item, and only usable, merchantable
items of the Inventory shall be included in the calculation of the value of the
Inventory. A vendor's invoice setting forth the cost of each item so included
in the value of the Inventory shall be delivered to the Purchaser at the time
of the examination and at the Closing Date. All valuations of the net
Inventory must be supported by vendor's invoices. If, at the Closing Date, the
value of the Inventory as determined pursuant to this Section 1.4 is less than
$27,000, then the Purchase Price and the amount of the Note shall be reduced by
an amount equal to the amount by which such valuation is less than $27,000.

1.5 ALLOCATION. The Sellers and the Purchaser agree that the
Purchase Price shall be allocated among the Assets in accordance with the
allocation set forth on Exhibit L attached hereto and incorporated herein by
reference, and agree to report this transaction for tax purposes in accordance
with such allocation.

1.6 NO ASSUMPTION OF LIABILITIES. Except for the Lease and the
$6,300 of delinquent rent assumed by the Purchaser pursuant to Section 1.2(d)
above, the Purchaser will not assume, nor has the Purchaser agreed to pay for,
any liability, claim or other obligation of the Sellers, whether now existing
or arising in the future, whether accrued, contingent or otherwise, including,
without limitation, the payment of rent, utilities, wages (and other employee
benefits), taxes, material supplies, unpaid installments of the price of
inventory, equipment, furniture and fixtures, and any other liabilities of the
Sellers accrued through the Closing Date, and the Sellers shall remain
responsible for, and shall pay or provide for, all such liabilities, claims and
other obligations of the Sellers.

1.7 SALES AND USE TAXES. All sales and use taxes, and any other
transfer taxes, payable with respect to the transfer of the Assets pursuant to
this Agreement shall be paid by the Sellers on or about the date on which the
amount set forth in Section 1.2(b) is paid.

1.8 VERIFICATION OF VALUE OF LEASEHOLD IMPROVEMENTS AND PERSONAL
PROPERTY. Evidence reasonably satisfactory to the Purchaser of the cost to the
Sellers of each item of Leasehold Improvements and Personal Property shall be
delivered to the Buyer on or prior to the Closing Date. The valuation of the
Leasehold Improvements and the Personal Property, for the purposes of Sections
2.7 and 5.1(e) below, must be supported by such evidence.

4
<PAGE> 11
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

In order to induce the Purchaser to enter into this Agreement, each of
the Sellers, jointly and severally, represents and warrants to, and covenants
with, the Purchaser as set forth below:

2.1 POWER. The Sellers are California resident individuals, are
under no legal disability and have the power and authority to execute and
deliver, and to perform their obligations under, this Agreement and any
agreements to be executed in connection with this Agreement on the Closing
Date.

2.2 BINDING OBLIGATION. This Agreement has been, and any
agreements to be executed in connection with this Agreement on the Closing Date
will have been, duly executed by and on behalf of each of the Sellers and
constitutes, or will constitute when executed, valid and binding obligations of
each such person, respectively, in accordance with their terms, which
obligations are enforceable in accordance with their terms, subject only to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws.

2.3 NO CONFLICTS. The execution, delivery, and performance of
this Agreement, and any agreements to be executed in connection with this
Agreement on the Closing Date, by the Sellers do not and will not violate,
conflict with, or result in a breach of, or constitute a default under, any of
the terms, conditions or provisions of any statute, law or regulation of any
jurisdiction as it relates to the Sellers, or any one or more of them, or any
judgment, order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental or regulatory body against or binding
upon the Sellers, or any agreement contract or obligation binding upon the
Sellers, or any one or more of them, or as to which any of their assets may be
subject.

2.4 LITIGATION AND OTHER PROCEEDINGS. There are no claims,
actions, suits or proceedings pending before any court or governmental
authority or, to the knowledge of the Sellers, any investigations pending, nor
have Sellers received notice of any claims, actions, suits, proceedings or
investigations threatened, which question or challenge the validity of this
Agreement, and any agreements to be executed in connection with this Agreement
on the Closing Date, or any action taken or to be taken by the Sellers in
connection with the transactions contemplated hereby.

2.5 TITLE. The Sellers have, or will have on the Closing Date,
good and marketable title to each item of the Assets free and clear of all
liens, mortgages, claims, charges, security interests, encumbrances or other
restrictions or limitations of any nature whatsoever.

2.6 NOTICE OF VIOLATIONS. The Sellers have received no notice
from any governmental agency having jurisdiction, or from any of its insurers,
that any of the Assets being sold or the Location is in violation of any
law, rule or regulation, including, without limitation, any law, rule or
regulation pertaining to the environment. No item of the Assets being sold or
the Location is in violation of any law, rule or regulation, including without
limitation, any law, rule or regulation

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pertaining to the environment. All permits, licenses and other governmental
approvals necessary to the operation of the Business have been obtained and are
in full force and effect.

2.7 LEASEHOLD IMPROVEMENTS AND PERSONAL PROPERTY. All items of
Leasehold Improvements and Personal Property shall be in good working order and
condition on the Closing Date, ordinary wear and tear excepted. The net book
value, determined utilizing the Sellers' documented cost, of all items of
Leasehold Improvements and Personal Property shall not, on the Closing Date, be
less than $60,000. If, at the Closing Date, the value of the Leasehold
Improvements and Personal Property is less than $60,000, then the Purchase
Price and the amount of the Note shall be reduced by an amount equal to the
amount by which such valuation is less than $60,000.

2.8 INVENTORY. Each item of the net Inventory included in the
calculation of the value of the Inventory in accordance with the terms of
Section 1.4 above is usable and in good and merchantable condition and is of
the kind customarily stocked and sold or utilized by a company in the Business.

2.9 TAXES. All federal, state and local taxes of the Sellers due
and owing on or before the Closing Date will have been paid in full on or
before the Closing Date. The Sellers will have paid, on or before the Closing
Date, to the proper authorities in the State of California all unemployment
compensation due and owing on or before the Closing Date with regard to their
employees.

2.10 THE LEASE. A true and accurate copy of the Lease is attached
to this Agreement as Exhibit I and is in full force and effect. No default by
the Sellers and, to the knowledge of the Sellers, by the landlord under the
Lease exists under the terms and conditions of the Lease.

2.11 WORK IN PROCESS AND UNFILLED ORDERS. All items of Work in
Process and Unfilled Orders have been entered into by the Sellers in the
ordinary course of business, have not been prepaid by the customers (except
with respect to those deposits set forth on Exhibit E which have been
transferred on the Closing Date from the Sellers to the Purchaser), and
represent good faith transactions negotiated at arms length.

2.12 EMPLOYEES. Prior to the Closing Date, Purchaser shall be free
(but shall not be obligated) to offer employment to such of the employees
formally employed by the Sellers as Purchaser may elect, such employment to
commence on the Closing Date. Notwithstanding anything else in this Agreement
to the contrary, (a) Sellers shall be liable for any and all severance
obligations, shut-down pay or benefits, accrued vacation and similar
obligations, if any, to its employees resulting from or arising out of the
transactions contemplated by this Agreement or otherwise, and (b) nothing in
this paragraph creates or is intended to create any rights of any kind or
nature in any third parties, including, without limitation, any rights or
remedies in favor of any of Sellers' employees to be employed, or respecting
the terms of employment, for any specified period of time.

2.13 CONTRACTS. True copies of all material contracts
("Contracts") of Sellers with respect to the Business, including all amendments
and supplements thereto, have been or will be made

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available to Purchaser prior to the Closing Date. All of the Contracts are
valid and in full force and effect. Sellers have duly performed all of its
obligations under the Contracts to the extent those obligations to perform have
accrued, and no default or breach under any Contracts by any party has occurred
which will impair the ability of Sellers or Purchaser to enforce its rights
thereunder.

2.14 LITIGATION. Except as set forth in Exhibit M, there is no
action, order, writ, injunction, judgment or decree outstanding or claim, suit,
litigation, proceeding, labor dispute (other than routine grievance procedures
or routine, uncontested claims for benefits under any benefit plans for
personnel), arbitration or investigation pending or, to the knowledge of
Sellers, threatened or anticipated, against, relating to affecting (i) Sellers
or (ii) the transactions contemplated by this Agreement. Sellers are not in
default with respect to any judgment, order, writ, injunction or decree of any
court or governmental agency and there are no unsatisfied judgments against
Sellers, the Business or any Business-related property.

2.15 COMPLIANCE WITH LEGISLATION REGULATING ENVIRONMENTAL QUALITY.

(a) To the best of Seller's knowledge, no toxic wastes or
other toxic or hazardous substances or materials have, while under the contract
of Sellers, been used, stored or otherwise held, treated, disposed of or
released on, under or about the premises leased by the Sellers pursuant to the
Lease (the "Premises") or currently are being stored or otherwise held,
treated, disposed of or released on, under or about the Premises in violation
of Environmental Laws, as hereinafter defined. To the best of Sellers'
knowledge, no underground tanks are or have been on the Premises.

(b) The Premises are, and while under the control of the
Sellers have been, maintained in compliance with all federal, state and local
environmental protection, occupational, health and safety or similar laws,
ordinances, restrictions, licenses, including but not limited to, the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), Safe Drinking
Water Act (42 U.S.C. Section 3000(f) et seq.), Toxic Substances Control Act (15
U.S.C. Section 261 et seq.), Clean Air Act (42 U.S.C. Section 7401 et seq.),
Comprehensive Environmental Response of Compensation and Liability Act (42
U.S.C. Section 6901 et seq.), California Health & Safety Code (Section 25100 et
seq., Section 3900 et seq.), and California Water Code (Section 13000 et seq.)
(collectively, "Environmental Laws"). The Sellers have at all times disposed
of the Business's waste in full compliance with all applicable Environmental
Laws.

(c) The Sellers have no notice of any pending or
threatened action, claim or proceeding under Environmental Laws arising out of
the condition of the Premises. The Sellers have not been served any citation
or received any notice or other communication of non-compliance with any
Environmental Laws. The Sellers have no notice of any formal or informal
assertion by any governmental agency or other person that the Sellers or a
predecessor business or landowner may be a potentially responsible party in
connection with any waste disposal site or facility.

(d) No liens have been, or are, imposed on the Premises
under any Environmental Laws.

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2.16 INSURANCE. Exhibit N attached hereto contains a complete and
accurate list of all policies or binders of fire, liability, title, worker's
compensation and other forms of insurance (showing as to each policy or binder
the carrier, policy number, coverage limits, expiration dates, annual premiums
and a general description of the type of coverage provided) maintained by
Sellers on the Business, property or personnel.

2.17 FULL DISCLOSURE. No representation, covenant or warranty made
by the Sellers in this Agreement or in any exhibit attached hereto or in any
document, instrument or agreement contemplated hereby contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
fail to state a material fact necessary to make any representations, covenants
or warranties made not misleading. All representations and warranties made by
the Sellers hereunder, or in any exhibit attached hereto or in any document,
instrument or agreement contemplated hereby shall be deemed remade on the
Closing Date.

SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

In order to induce the Sellers to enter into this Agreement, the
Purchaser represents and warrants to, and covenants with, the Sellers as set
forth below:

3.1 ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
California, and has the corporate power and authority to execute and deliver,
and to perform its obligations under, this Agreement and any agreements to be
executed in connection with this Agreement on the Closing Date.

3.2 AUTHORITY. The execution, delivery, and performance of this
Agreement have been, and any agreements to be executed in connection with this
Agreement on the Closing Date will have been, duly and validly authorized and
approved by the Board of Directors of the Purchaser, and no further corporate
action is required to authorize the execution, delivery, or performance of this
Agreement, and any agreements to be executed in connection with this Agreement
on the Closing Date, by such corporation.

3.3 BINDING OBLIGATION. This Agreement has been, and any
agreements to be executed in connection with this Agreement on the Closing Date
will have been, duly executed by and on behalf of the Purchaser and
constitutes, or will constitute when executed, the valid and binding obligation
of such corporation, which obligations are enforceable in accordance with their
terms, subject only to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws.

3.4 NO CONFLICTS. The execution, delivery, and performance of
this Agreement, and any agreements to be executed in connection with this
Agreement on the Closing Date, by the Purchaser, do not and will not violate,
conflict with, or result in a breach of, or constitute a default under, any of
the terms, conditions, or provisions of the Articles of Incorporation or Bylaws
of such corporation,

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any statute, law, or regulation of any jurisdiction as it relates to such
corporation, or any judgment, order, injunction, decree, or award of any court,
arbitrator, administrative agency, or governmental or regulatory body against
or binding upon such corporation.

3.5 LITIGATION AND OTHER PROCEEDINGS. Except as disclosed to the
Sellers, there are no claims, actions, suits or proceedings pending before any
court or governmental authority or, to the knowledge of the Purchaser, any
investigations pending, or claims, actions, suits, proceedings or
investigations threatened, which question or challenge the validity of this
Agreement, and any agreements to be executed in connection with this Agreement
on the Closing Date, or any action taken or to be taken by each such
corporation in connection with the transactions contemplated hereby.

3.6 NO CONSENT. No consent of any other party and no consent,
license, approval or authorization of, or exemption by, or registration or
declaration or filing with, any governmental authority is required in
connection with the execution, delivery or performance of this Agreement with
respect to the Purchaser, or the consummation by the Purchaser of the
transactions contemplated hereby.

3.7 FULL DISCLOSURE. No representation, covenant or warranty made
by the Purchaser in this Agreement or in any exhibit attached hereto or in any
document, instrument or agreement contemplated hereby contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
fail to state a material fact necessary to make any representations, covenants
or warranties made not misleading. All representations and warranties made by
the Purchaser hereunder, or in any exhibit attached hereto or in any document,
instrument or agreement contemplated hereby shall be deemed remade on the
Closing Date.

SECTION 4
THE CLOSING

4.1 THE CLOSING DATE AND PLACE. The delivery of the bill of sale,
assignments, authorizations and other instruments of transfer for the Assets by
the Sellers, and the delivery of the consideration by the Purchaser (the
"Closing") shall take place at the offices of the Sellers in Thousand Oaks,
California, on or before 5:00 p.m. Pacific Daylight Time on September 22, 1995
(the "Closing Date").

4.2 ACTIONS AND DELIVERIES BY THE SELLERS AT THE CLOSING. At the
Closing, the Sellers shall deliver or cause to be delivered to the Purchaser,
against delivery of the items specified in Section 4.3:

(a) A general bill of sale, in the form of Exhibit 0
attached hereto and incorporated herein by reference, conveying, assigning,
transferring and selling the Assets to the Purchaser, together with the
relevant documents of title thereto, if any;

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(b) An assignment of the Lease,

(c) The originals of the Customer Materials and Permits
(to the extent such items are currently in the possession of Sellers); and

(d) Possession of the Assets.

4.3 ACTIONS AND DELIVERIES BY THE PURCHASER AT THE CLOSING. At the
Closing, the Purchaser shall deliver or cause to be delivered to the Sellers,
against delivery of the items specified in Section 4.2:

(a) The cash portion of the Purchase Price due pursuant
to Section 1.2(a) above;

(b) The Note;

(d) The Security Agreement, and the UCC-1.

SECTION 5
CONDITIONS TO CLOSING

5.1 CONDITIONS PRECEDENT OF THE PURCHASER. The obligations of the
Purchaser under this Agreement to be performed on the Closing Date shall be
subject to the conditions that, on or before the Closing Date:

(a) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Each
of the representations and warranties of the Sellers contained in this
Agreement or any certificate or document delivered pursuant to the provisions
of this Agreement shall be true in all material respects on and as of the
Closing Date as though such representations and warranties were made at and as
of such date;

(b) COMPLIANCE WITH AGREEMENT. The Sellers shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by such parties prior to or at the
Closing Date;

(c) CONDITION OF THE ASSETS. The Assets shall, on the
Closing Date, be in substantially the same condition as they were on September
22, 1995, reasonable wear and tear excepted;

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(d) LEASE. The landlord under the Lease shall have given
and delivered to the Purchaser its written consent to the assignment of the
Lease to the Purchaser or shall have entered into a new lease agreement for the
Location with the Purchaser under substantially the same terms and conditions
as are contained in the Lease or on such other terms and conditions as are
acceptable to the Purchaser; and

(e) VALUE OF THE LEASEHOLD IMPROVEMENTS AND PERSONAL
PROPERTY. The value of the Leasehold Improvements and the Personal Property,
as determined in accordance with this Agreement, shall be not less than
$60,000.

5.2 CONDITIONS PRECEDENT OF THE SELLERS. The obligations of the
Sellers under this Agreement to be performed on the Closing Date shall be
subject to the following conditions that, on or before the Closing Date:

(a) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Each
of the representations and warranties of the Purchaser contained in this
Agreement or any certificate or document delivered pursuant to the provisions
of this Agreement shall be true in all material respects on and as of the
Closing Date as though such representations and warranties were made at and as
of such date; and

(b) COMPLIANCE WITH AGREEMENT. The Purchaser shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by such parties prior to or at the
Closing Date.

SECTION 6
SELLERS' OBLIGATIONS AFTER CLOSING

6.1 FURTHER ASSURANCES.

(a) INSTRUMENTS. The Sellers, on and at any time after
the Closing Date, will execute, acknowledge, and deliver any further
assignments, conveyances, and other assurances, documents, and instruments of
transfer reasonably requested by the Purchaser and will take any other action
consistent with the terms of this Agreement that may be reasonably requested by
the Purchaser for the purpose of selling, transferring, assigning, granting,
conveying, delivering or confirming to the Purchaser any or all of the Assets
as of the Closing Date.

(b) ENFORCEMENT. If reasonably requested by the
Purchaser, the Sellers, at the Purchaser's sole cost and expense, further agree
to prosecute or otherwise enforce in their own name for the benefit of the
Purchaser any claims, rights or benefits that are transferred to the Purchaser
by this Agreement and that require prosecution or enforcement in the Sellers'
name.

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6.2 INDEMNIFICATION BY THE SELLERS.

(a) INDEMNIFICATION. The Sellers hereby jointly and
severally agree to indemnify and hold harmless the Purchaser and its officers,
directors, partners, employees, agents, and counsel, from and against any and
all damages or deficiencies resulting from (i) any misrepresentation, breach of
warranty or nonfulfillment of any covenant, indemnity, undertaking or agreement
on the part of either of the Sellers contained in this Agreement or any
agreement executed in connection with this Agreement, (ii) any liability from,
under, or with respect to the operation of the Assets or the Business on or
before the Closing (including, but not limited to, the distribution of products
and services by the Sellers, work in process and any claims or lawsuits brought
based on any acts of omission or commission by the Sellers that occurred on or
before the Closing); (iii) any costs, liabilities or claims arising out of the
failure of the Sellers or the Purchaser to comply with the California bulk
sales law or any other law, statute, regulation, ordinance or rule relating to
or affecting the transfer of the Assets from the Sellers to the Purchaser
pursuant to this Agreement; and (iv) any and all actions, suits, proceedings,
demands, assessments or judgments, costs or expenses (including, but not
limited to, reasonable attorneys' fees and other costs and expenses incident to
proceedings or investigations or to the defense of any claim) related to any of
the foregoing. Any liability under this Section 6.2 shall accrue and be due
and payable to the Purchaser as and when such damages or deficiencies are
accrued and due and payable by the Purchaser. The Purchaser shall have the
right to offset and deduct the amount of any liability of the Sellers resulting
from (i) liens imposed by any taxing authority (presently existing or
hereinafter arising) against the Business or otherwise encumbering the Assets
and existing after payment of amounts pursuant to Section 1.2(b) above and (ii)
any costs, liabilities or claims (payable to third party creditors of the
Business) arising out of the failure of the parties to comply with the
California bulk sales law, from any payments or obligations due and owing from
the Purchaser to the Sellers, including, but not limited to, any obligations
under this Agreement or the Note. Notwithstanding the foregoing, Purchaser
shall tender any claims by third party creditors which may be asserted as a
result of the failure of the parties to comply with the California bulk sales
law to the Sellers for review and approval prior to paying such claim and/or
offsetting and deducting the amount thereof in the manner set forth above. In
the event that the Sellers fail to approve payment within ten days, the
Purchaser shall pay the disputed amount into an interest-bearing escrow account
pending resolution of the matter pursuant to escrow instructions mutually
acceptable to the Purchaser and the Sellers. After resolution of the dispute
funds deposited in connection therewith will be disbursed to the third party
creditor or the Sellers as the case may be.

(b) DEFENSE OF CLAIM. If the Purchaser (the "Indemnified
Party") asserts that either of the Sellers has become obligated to the
Indemnified Party pursuant to this Section 6.2, or in the event that any suit,
action, investigation, claim or proceeding is begun, made or instituted as a
result of which either of the Sellers may become obligated to the Indemnified
Party under this Section 6.2, then the Indemnified Party shall give prompt
written notice thereof to the Sellers. The Sellers shall have the right, at
their expense and with counsel of their choosing, to control and defend,
contest, settle (at no cost to the Indemnified Party), or otherwise protect
against any such suit, action, investigation, claim or proceeding. The
Indemnified Party shall have the right, but not the obligation, to participate
at its own expense in the defense thereof by counsel of the Indemnified Party's
choice.

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In any event, the Indemnified Party shall cooperate with the Sellers in the
defense of any such suit, action, investigation, claim or proceeding. Without
limiting the generality of the foregoing, the Indemnified Party shall furnish
documentary or other evidence as is then in its possession as may reasonably be
requested by the Sellers for the purpose of defending against any such suit,
action, investigation, claim or proceeding. In the event that the Sellers do
not elect to control and defend, contest, settle or otherwise protect against
any such suit, action, investigation, claim or proceeding, the Indemnified
Party may do so and the Sellers shall indemnify the Indemnified Party with
respect thereto and reimburse the Indemnified Party's expenses as incurred.

6.3 RELEASE. The Sellers, and their successors, heirs and assigns
(all of the foregoing persons and entities are hereinafter collectively
referred to as the "Seller Entities") do hereby, effective as of the date
hereof, release and forever discharge the Purchaser and its officers,
directors, shareholders, subsidiaries (including without limitation Bikers
Dream International, Inc., a California corporation), employees, agents,
counsel, successors and assigns (all of the foregoing persons and entities
other than the Seller Entities are hereinafter referred to as the "Purchaser
Entities") from any and all causes of action, suits, claims, demands, damages,
judgments, losses, penalties, expenses (including, but not limited to,
reasonable attorneys' fees), costs, settlements and liabilities whatsoever,
whether known or unknown, liquidated or unliquidated, fixed, contingent, direct
or indirect, whether at law or in equity, which the Seller Entities, or any one
or more of them, have had or now have or may in the future have against the
Purchaser Entities, or any one or more of them, for, upon or by reason of any
matter, fact or thing whatsoever from the beginning of time to the date of this
Agreement, including, but not limited to, all obligations of the Purchaser
Entities under the Franchise Agreement (which, by execution of this Agreement,
is hereby terminated in all respects) and all obligations or liabilities
arising out of the violation or alleged violation of any federal, state or
local laws, regulations or ordinances, including, but not limited to all
franchise registration and relationship laws and all securities laws; provided,
however, specifically excluded from the release provisions of this Section
shall be (i) any obligations of the Purchaser Entities pursuant to the terms
and conditions of this Agreement and any agreement executed in connection with
this Agreement and (ii) any obligations of the Purchaser Entities for
contribution or indemnification under the Franchise Agreement in the event of
any claims brought against the Seller Entities by third parties.

6.4 WAIVER OF UNKNOWN CLAIMS. The Sellers expressly acknowledge
that they understand the meaning and significance of Section 1542 of the
California Civil Code, and having such understanding, waive any and all rights
they may have under said Section 1542 which provides:

"A general release does not extend to claims which the
creditor does not know or expect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected the settlement of the debtor."

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SECTION 7
PURCHASER'S OBLIGATIONS AFTER CLOSING

7.1 FURTHER ASSURANCES. The Purchaser, on and at any time after
the Closing Date, will execute, acknowledge, and deliver any further
assurances, documents, and instruments of transfer, assignment or assumption
reasonably requested by the Sellers and will take any other action consistent
with the terms of this Agreement that may be reasonably requested by the
Sellers for the purpose of concluding the transactions contemplated by this
Agreement.

7.2 INDEMNIFICATION BY THE PURCHASER.

(a) INDEMNIFICATION. The Purchaser hereby agrees to
indemnify and hold harmless the Sellers, their respective heirs and successors,
from and against any and all damages or deficiencies resulting from (i) any
misrepresentation, breach of warranty or nonfulfillment of any covenant,
indemnity, undertaking or agreement on the part of the Purchaser contained in
this Agreement or any agreement executed in connection with this Agreement
including, without limitation, the Security Agreement, (ii) any liability
arising from, under, or with respect to the operation of the Assets or the
Business after the Closing (including, but not limited to, the Lease, the
distribution of products and services by the Purchaser, completion of work in
process and any claims or lawsuits brought based on any acts of omission or
commission by the Purchaser that occur after the Closing), and (iii) any and
all actions, suits, proceedings, demands, assessments or judgments, costs, or
expenses (including, but not limited to, reasonable attorneys' fees and other
costs and expenses incident to proceedings or investigations or to the defense
of any claim) related to any of the foregoing. Any liability under this
Section 7.2 shall accrue and be due and payable to the Sellers as and when such
damages or deficiencies are accrued and due and payable by the Sellers. The
Sellers shall have the right to offset and deduct the amount of any liability
of the Purchaser under this Section 7.2 from any liabilities or payments owed
by the Sellers to the Purchaser under this Agreement or the Lease.

(b) DEFENSE OF CLAIM. If either of the Sellers (the
"Indemnified Party") asserts that the Purchaser has become obligated to the
Indemnified Party pursuant to this Section 7.2, or in the event that any suit,
action, investigation, claim or proceeding is begun, made or instituted as a
result of which the Purchaser may become obligated to the Indemnified Party
under this Section 7.2, then the Indemnified Party shall give prompt written
notice thereof to the Purchaser. The Purchaser shall have the right, at its
expense and with counsel of its choosing, to control and defend, contest,
settle (at no cost to the Indemnified Party), or otherwise protect against any
such suit, action, investigation, claim or proceeding. The Indemnified Party
shall have the right, but not the obligation, to participate at his own expense
in the defense thereof by counsel of the Indemnified Party's choice. In any
event, the Indemnified Party shall cooperate fully with the Purchaser in the
defense of any such suit, action, investigation, claim or proceeding. Without
limiting the generality of the foregoing, the Indemnified Party shall furnish
the Purchaser with documentary or other evidence as is then in his possession
as may be reasonably requested by the Purchaser for the purpose of defending
against any such suit, action, investigation, claim or proceeding. In the
event that the Purchaser does not elect

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to control and defend, contest, settle or otherwise protect against any such
suit, investigation, claim or proceeding, the Indemnified Party may do so and
the Purchaser shall indemnify the Indemnified Party with respect thereto and
reimburse the Indemnified Party's expenses as incurred.

7.3 RELEASE. The Purchaser Entities do hereby, effective as of
the date hereof, release and forever discharge the Seller Entities and their
employees, agents and counsel from any and all causes of action, suits, claims,
demands, damages, judgments, losses, penalties, expenses (including but not
limited to reasonable attorneys' fees), costs, settlements and liabilities
whatsoever, whether known or unknown, liquidated or unliquidated, fixed,
contingent, direct or indirect, whether at law or in equity, which the
Purchaser Entities, or any one or more of them, have had or now have or may in
the future have against any one or more of the Sellers for, upon or by reason
of any matter, fact or thing whatsoever from the beginning of time to the date
of this Agreement, including, but not limited to, all claims under the
Franchise Agreement (which, by execution of this Agreement, is hereby
terminated in all respects); provided, however, specifically excluded from the
release provisions of this Section shall be (i) any obligations of the Sellers
pursuant to the terms and conditions of this Agreement and any agreement
executed in connection with this Agreement and (ii) any obligations of the
Sellers for contribution or indemnification under the Franchise Agreement in
the event of any claims brought against the Purchaser Entities by third
parties.

7.4 WAIVER OF UNKNOWN CLAIMS. Purchaser expressly acknowledges
that it understands the meaning and significance of Section 1542 of the
California Civil Code, and having such understanding, waives any and all rights
it may have under said Section 1542 which provides:

SECTION 8
COSTS AND BROKER'S FEES

8.1 COSTS BORNE BY PARTIES. Except as otherwise provided herein,
the Sellers and the Purchaser shall pay all costs and expenses incurred by them
in negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.

8.2 BROKER'S FEES. The Purchaser and the Sellers each represent
and warrant to the other that it or they did not deal directly or indirectly
with or through any broker or finder in connection with the transactions
contemplated by this Agreement.

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SECTION 9
FORM OF AGREEMENT AND SEVERABILITY

9.1 HEADINGS. The subject headings of the Sections of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.

9.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter contained in it
and supersedes all prior and contemporaneous agreements, representations,
negotiations and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
the party against whom enforcement is sought. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.

9.3 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

9.4 SEVERABILITY. If any terms or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable, the validity of the
other terms and provisions hereof shall in no way be affected thereby.

SECTION 10
PARTIES

10.1 OTHER PARTIES. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third persons to any party to
this Agreement, nor shall any provision give any third persons any right of
subrogation or action against any party to this Agreement.

10.2 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, and obligations hereunder shall be assigned by any of
the parties hereto without prior written consent of each of the other parties
hereto.

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SECTION 11
SURVIVAL OF REPRESENTATIONS AND WARRANTIES

The representations, warranties, opinions, or other writings provided
for in this Agreement and the covenants and agreements to be performed or
complied with by the respective parties before or on or after the Closing Date
shall be deemed to be continuing and shall survive the Closing.

SECTION 12
NOTICES

All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of service if served personally on the party to whom notice is to
be given, or (b) on the day of mailing, if mailed to the party to whom notice
is to be given by first class mail, registered or certified, postage prepaid,
and properly addressed as set forth below:

<TABLE>
<S> <C>
To the Sellers (prior to Closing): JOSEPH C. MELIA
CHARLES J. MELIA
68 Long Court
Thousand Oaks, CA 91360

With a Copy To: FULBRIGHT & JAWORSKI L.L.P.
865 South Figueroa Street
Twenty Ninth Floor
Los Angeles, CA 90017-2571
Attention: Mr. Richard R. Mainland
Attorney at Law

- and -

With a Copy To: ARTHUR H. BARENS, P.C.
Barens Law Building
10209 Santa Monica Boulevard
Los Angeles, CA 90067
Attention: Mr. Jeffrey D. Stulberg
Attorney at Law
</TABLE>

17
<PAGE> 24
<TABLE>
<S> <C>
To the Sellers (after the Closing): JOSEPH C. MELIA
CHARLES J. MELIA
68 Long Court
Thousand Oaks, CA 92360

With a Copy To: FULBRIGHT & JAWORSKI L.L.P.
865 South Figueroa Street
Twenty Ninth Floor
Los Angeles, CA 90017-2571
Attention: Mr. Richard R. Mainland
Attorney at Law

- and -

With a Copy To: ARTHUR H. BARENS, P.C.
Barens Law Building
10209 Santa Monica Boulevard
Los Angeles, CA 90067
Attention: Mr. Jeffrey D. Stulberg
Attorney at Law

To the Purchaser: BIKERS DREAM, INC.
1420 Village Way
Santa Ana, CA 92705
Attention: Mr. Jeffrey L. Simons
President

With a Copy To: DAY & CAMPBELL
3070 Bristol Street
Suite 650
Costa Mesa, CA 92626
Attention: Rowland W. Day II
Attorney at Law
</TABLE>

Any party may change its address for purposes of this Section by giving the
other parties notice of the new address in the manner set forth above;
provided, however, any notice of change of address shall not be effective until
received.

18
<PAGE> 25
SECTION 13
CONFIDENTIALITY

13.1 CONFIDENTIAL INFORMATION.

(a) DEFINITION. For the purposes of this Agreement,
"Confidential Information" shall mean any information, knowledge and know-how,
not known to the general public, regarding the Purchaser Entities or the
Purchaser Entities' processes and products, customers, suppliers, accounts,
financial statements, business systems and any other information, knowledge and
know-how relating to the Purchaser Entities or the Purchaser Entities'
business. In addition, "Confidential Information" shall mean any information
disclosed to the Sellers, or to which they obtained access as a franchisee of
the Purchaser, which they should reasonably believe to be confidential or
proprietary to the Purchaser Entities, or which is treated by the Purchaser
Entities as being confidential or proprietary. "Confidential Information"
shall include, but not be limited to, trade secrets and all customer
information of the Purchaser Entities.

(b) NONDISCLOSURE AND NONUSE. Neither of the Sellers
shall in any manner or form disclose, provide or otherwise make available, in
whole or in part, any Confidential Information to any person or entity without
the prior written consent of the Purchaser unless disclosed pursuant to court
or government actions. Neither of the Sellers shall in any manner or form use
or permit others within their control to use any Confidential Information for
their own account or for the account of others without the prior written
consent of the Purchaser.

(c) REMEDIES. The Sellers expressly agree that the
foregoing is reasonable and needed to protect the legitimate business interests
of the Purchaser Entities. The Sellers also agree that the Purchaser will be
irreparably harmed and that damages alone cannot adequately compensate the
Purchaser if there is a violation or breach by the Sellers of the provisions of
this Section 13.1, and that injunctive relief is essential for the protection
of the Purchaser. Therefore, the Purchaser shall be entitled to obtain
injunctive relief without posting any bond or security, in addition to all of
their rights and remedies which may be available under this Agreement or
applicable law.

SECTION 14
GOVERNING LAW

This Agreement, the rights and obligations hereunder, and the remedies
available hereunder or at law or in equity, shall be governed by and construed
in accordance with the laws of the State of California. By execution of this
Agreement, the parties hereto agree and submit to personal jurisdiction in the
State of California for the purposes of any suit or proceeding brought to
enforce or construe the terms and conditions of this Agreement and agree that
venue for any such suit or proceeding shall be in Ventura County, California.

19
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and effective as of the date first above written.

The "Sellers"

/s/ JOSEPH C. MELIA
-------------------------------------
JOSEPH C. MELIA

/s/ CHARLES J. MELIA
-------------------------------------
CHARLES J. MELIA

The "Purchaser"

BIKERS DREAM, INC.

By /s/ DENNIS CAMPBELL
----------------------------------
Dennis Campbell
Its President and Chief Executive
Officer

20
<PAGE> 27
AMENDMENT NO.1
TO
ASSET PURCHASE AGREEMENT

The Asset Purchase Agreement dated as of September 22, 1995 by and
between JOSPEH C. MELIA and CHARLES J. MELIA, both California resident
individuals (collectively, with joint and several liability, the "Sellers") and
BIKERS DREAM, INC., a California corporation (the "Purchaser") is hereby
amended, as follows:

1. Section 1.2(a) is revised in its entirety, as follows:

"(a) Cash at Closing, $50,000 in cash, by check or by wire transfer
of federal funds on the Closing Date;"

2. Section 1.2(d) is revised to include the following parenthetical
language after the word "Lease":

"(Purchaser also agrees to be responsible for payment of rent in the
amount of $938 which is due under the Lease for the period of
September 22, 1995 through September 30, 1995)".

3. Section 5.2(c) is hereby added to the Agreement, as follows:

"Good Funds. In the event the Purchaser elects to deliver a
corporate check at the Closing [in lieu of cash or a wire
transfer of federal funds pursuant to Section 1.2(b)], such check
shall have been cleared by the issuing bank prior to any formal
closing of the purchase transaction being deemed effective."

4. Section 6.2(b) at page 13, line 2 is hereby amended by deleting the
parenthesis after the word "Business" and by inserting after the phrase "bulk
sales law" the phrase "or any customer)".

<PAGE> 28
Except as provided in this Amendment No. 1 to Asset Purchase Agreement,
all terms and provisions of the Asset Purchase Agreement are in full force and
effect, and have not been changed, amended or modified.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to Asset Purchase Agreement to be duly executed and effective as of the date
first above written.

The "Sellers"

/s/ JOSEPH C. MELIA
--------------------------
JOSEPH C. MELIA

/s/ CHARLES J. MELIA
--------------------------
CHARLES J. MELIA

The "Purchaser"

BIKERS DREAM, INC.

By /s/ DENNIS CAMPBELL
-----------------------
Dennis Campbell

Its President and Chief
Executive Officer

<PAGE> 1
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-GROS
(Do not use this form for Multi-Tenant Property)

1. BASIC PROVISIONS ("BASIC PROVISIONS")

1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes
only, June 9, 1994, is made by and between Westlake Professional Center
Partnership ("LESSOR") and Chuck Melia and Joseph Melia dba: Biker's Dream
("LESSEE") (collectively the "PARTIES," or individually a "PARTY").

1.2 PREMISES: That certain real property, including all
improvements therein or to be provided by Lessor under the terms of the Lease,
and commonly known by the street address of 75 Long Court, City of Thousand
Oaks located in the County of Ventura, State of California and generally
described as (describe briefly the nature of the property) Commercial
Retail/Office Building consisting of approximately 4,092 square feet
("PREMISES"). (See Paragraph 2 for further provisions.)

1.3 TERM: Five (5) years and 0 months ("ORIGINAL TERM") commencing
July 1, 1994 ("COMMENCEMENT DATE") and ending June 30, 1999 ("EXPIRATION
DATE"). (See Paragraph 3 for further provisions.)

1.4 EARLY POSSESSION: See attached Addendum, Para. 54 ("EARLY
POSSESSION DATE"). (See Paragraphs 3.2 and 3.3 for further provisions.)

1.5 BASE RENT: $ See Attached Schedule "Exhibit A" per month
("BASE RENT"), payable on the 1st day of each month commencing July 1, 1994.
(See Paragraph 4 for further provisions.)

[X] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.

1.6 BASE RENT PAID UPON EXECUTION: $ Twelve Thousand Three Hundred
Twenty Dollars ($12,320.00) as Base Rent for the period first months rent
($3,500.00) and two month's security deposit ($8,820.00) equal to two months
rent in fifth year. ($4,410 x 2 = $8,820.00).

1.7 SECURITY DEPOSIT: $8,820.00 ("SECURITY DEPOSIT"). (See
Paragraph 5 for further provisions.)

1.8 PERMITTED USE: Sales and repairs of Biker's Dream products and
motorcycles including executive offices and mail order. (See Paragraph 6 for
further provisions.)

1.9 INSURING PARTY: Lessor is the "INSURING PARTY." $805.00 is the
"BASE PREMIUM." (See Paragraph 8 for further provisions.)

1.10 REAL ESTATE BROKERS: The following real estate brokers
(collectively, the "BROKERS") and brokerage relationships exist in the
transaction and are consented to by the Parties (check applicable boxes):
Landlord represents himself. 222 Commercial Group representative.

[ ] Lessor exclusively; [X] Lessee, exclusively, and Call Company
representative.

[X] Lessee exclusively ("LESSEE'S BROKER"); [ ] both Lessee and Lessor. (See
Paragraph 15 for further provisions.)

1.11 GUARANTOR. The obligations of the Lessee under this Lease are
to be guaranteed by Chuck Melia and Joseph Melia ("GUARANTOR"). (See Paragraph
37 for further provisions.)

1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting
of Paragraphs 49 through 61 and Exhibits "A", "B" and "C" all of which
constitute a part of this Lease.

2. PREMISES.

2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental, is an approximation which Lessor
and Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.

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

2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE.
Lessor warrants to Lessee that the improvements on the Premises comply with
applicable covenants or restrictions of record and applicable building codes,
regulations, and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alteration or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee. If the Premises do not comply with said warranty. Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
six (6) months following the Commencement Date, correction of the
non-compliance shall be the obligation of Lessee at Lessee's sole cost and
expense.

2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it
has been advised by the Brokers to satisfy itself with respect to the condition
of the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable Law as
defined in Paragraph 6.3) and the present and future suitability of the
Premises for Lessee's intended use, (b) that Lessee has made such Investigation
as it deems necessary with reference to such matters and assumes all
responsibility therefor as the same relate to Lessee's occupancy of the
Premises and/or the term of this Lease, and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warrants with
respect to the said matters other than as set forth in this Lease.

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

3. TERM.

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

3.2 EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease, however, (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in
effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.

Initials

GROSS PAGE 1
FORM SB-2
EXHIBIT 10.26
<PAGE> 2
[COPY MISSING]
therefor, nor shall such failure affect the validly of this Lease, or the
obligations of Lessee hereunder, or extend the term hereof, but in such case,
Lessee shall not, except as otherwise provided herein, be obligated to pay rent
or perform any other obligation of Lessee under the terms of this Lease until
Lessor delivers possessions of the Premises to Lessee. If possession of the
Premises is not delivered to Lessee within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in writing to Lessor
within ten (10) days thereafter, cancel its Lease, in which event the Parties
shall be discharged from all obligations hereunder; provided, however, that if
such written notice by Lessee is not received by Lessor within said ten (10)
day period, Lessee's right to cancel this Lease shall terminate and be of no
further force or effect. Except as may be otherwise provided, and regardless of
when the term actually commences, if possession is not tendered to Lessee when
required by this Lease and Lessee does not terminate this Lease, as aforesaid,
the period free of the obligation to pay Base Rent, if any, that Lessee would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have enjoyed under
the terms hereof, but minus any days of delay caused by the acts, changes or
omissions of Lessee.

4. RENT.

4.1 BASE RENT. Lessee shall cause payment of Base Rent and other
rent or charges, as the same may be adjusted from time to time, to be received
by Lessor in lawful money of the United States, without offset or deduction, on
or before the day on which it is due under the terms of this Lease. Base Rent
and all other rent and charges for any period during the term hereof which is
for less than one (1) full calendar month shall be prorated based upon the
actual number of days of the calendar month involved. Payment of Base Rent and
other charges shall be made to lessor at its address stated herein or to such
other persons or at such other addresses as Lessor may from time to time
designate in writing to Lessee.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon
execution hereof the Security Deposit set forth in Paragraph 1.7 as security
for Lessee's faithful performance of Lessee's obligations under this Lease. If
Lessee fails to pay Base Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), Lessor may
use, apply or retain all or any portion of said Security Deposit for the
payment of any amount due Lessor or to reimburse or compensate Lessor for any
liability, cost, expense, loss or damage (including attorneys' fees) which
Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or
any portion of said Security Deposit, Lessee shall within ten (10) days after
written request therefor deposit moneys with Lessor sufficient to restore said
Security Deposit to the full amount required by this Lease. Any time the Base
Rent increases during the term of this Lease, Lessee shall, upon written
request from Lessor, deposit additional moneys with Lessor sufficient to
maintain the same ratio between the Security Deposit and the Base Rent as those
amounts are specified in the Basic Provisions. Lessor shall not be required to
keep all or any part of the Security Deposit separate from its general
accounts. Lessor shall, at the expiration or earlier termination of the term
hereof and after Lessee has vacated the Premises, return to Lessee (or, at
Lessor's option, to the last assignee, if any, of Lessee's interest herein),
that portion of the Security Deposit not used or applied by Lessor. Unless
otherwise expressly agreed in writing by Lessor, no part of the Security
Deposit shall be considered to be held in trust, to bear interest or other
increment for its use, or to be prepayment for any moneys to be paid by Lessee
under this Lease.

6. USE.

6.1 USE. Lessee shall use and occupy the Premises only for the
purposes set forth in Paragraph 1.8, or any other use which is comparable
thereto and for no other purpose. Lessee shall not use or permit the use of the
Premises in a manner that creates waste or a nuisance, or that disturbs owners
and/or occupants of, or causes damage to, neighboring premises or properties.

6.2 HAZARDOUS SUBSTANCES.

(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance, chemical
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health,
safety or welfare, the environment or the Premises, (ii) regulated or monitored
by any governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum gasoline, crude oil or any products, by-products or
fractions thereof. Lessee shall not engage in any activity in, on or about the
Premises which constitutes a Reportable Use (as hereinafter defined) of
Hazardous Substances without the express prior written consent of Lessor and
compliance in a timely manner (at Lessee's sole cost and expense) with all
Applicable Law (as defined in Paragraph 6.3). "REPORTABLE USE" shall mean (i)
the installation or use of an above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Uses shall also include Lessee's being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may without Lessor's prior consent, but
in compliance with all Applicable Law, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of Lessee's
business permitted on the Premises, so long as such use is not a Reportable
Use and does not expose the Premises or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any liability
therefor. In addition, Lessor may (but without any obligation to do so)
condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but
not limited to, the installation (and removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of and additional
Security Deposit under Paragraph 5 hereof.

(b) DUTY TO INFORM LESSOR. If Lessee knows, or has
reasonable cause to believe, that a Hazardous Substance, or a condition
involving or resulting from same, has come to be located in, on, under or about
the Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor. Lessee shall also
immediately give Lessor a copy of any statement, report, notice, registration,
application, permit business plan, license, claim, action or proceeding given
to, or received from, any governmental authority to private party, or persons
entering or occupying the Premises, concerning the presence, spill, release,
discharge of, or exposure to, any Hazardous Substance or contamination in, on,
or about the Premises, including but not limited to all such documents as may
be involved in any Reportable Uses involving the Premises.

(c) INDEMNIFICATION. Lessee shall indemnify, protect,
defend and hold Lessor, its agents, employees, lenders and ground
lessor, if any, and the Premises, harmless from and against any and all loss of
rents and/or damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, permits and attorney's and consultant's fees arising out of or
involving any Hazardous Substance or storage tank brought onto the Premises by
or for Lessee or under Lessee's control. Lessee's obligations under this
Paragraph 6 shall include, but not be limited to, the effects of any
contamination or injury to person property or the environment created or
suffered by Lessee, and the cost of investigation (including consultant's and
attorney's fees and testing), removal remediation, restoration and/or abatement
thereof, or of any contamination therein involved, and shall survive the
expiration or earlier termination of this Lease. No termination, cancellation
or release agreement entered into by Lessor and Lessee shall release Lessee
from its obligations under this Lease with respect to Hazardous Substances or
storage tanks, unless specifically so agreed by Lessor in writing at the time
of such agreement.

6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in
this Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently
and in a timely manner, comply with all "APPLICABLE LAW," which term is used in
this Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any
manner to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or
not reflecting a change in policy from any previously existing policy. Lessee
shall, within five (5) days after receipt of Lessor's written request, provide
Lessor with copies of all documents and information, including, but not limited
to, permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint on pertaining to or involving failure by Lessee or the
Premises to comply with any Applicable Law.

6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as
defined in Paragraph 8.3(a)) shall have the right to enter the Premises at any
time in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease and all Applicable Laws (as defined in
Paragraph 6.3), and to employ experts and/or consultants in connection
therewith and/or to advise Lessor with respect to Lessee's activities,
including but not limited to the installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance or storage tank on or from
the Premises. The costs and expenses of any such inspections shall be paid
by the party requesting same, unless a Default or Breach of this Lease,
violation of Applicable Law, or a contamination, caused or materially
contributed to by Lessee is found to exist or be imminent, or unless the
inspection is requested or ordered by a governmental authority as the result of
any such existing or imminent violation or contamination. In any such case,
Lessee shall upon request reimburse Lessor or Lessor's Lender, as the case may
be, for the costs and expenses of such inspections.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.

7.1 LESSEE'S OBLIGATIONS.

(a) Subject to the provisions of Paragraphs 2.2 (Lessor's
warranty as to condition), 2.3 (Lessor's warranty as to compliance with
covenants, etc. 7.2 (Lessor's obligations to repair), 9 (damage and
destruction), and 14 (condemnation), Lessee shall, at Lessee's sole cost and
expense and at all times keep the Premises and every part thereof in good order,
condition and repair, (whether or not such portion of the Premises requiring
repair, or the means of repairing the same, are reasonably or readily accessible
to Lessee, and whether or not the need for such repairs occurs as a result of
Lessee's use.

Initials

GROSS PAGE 2
<PAGE> 3
if one is specified in Paragraph ILLEGIBLE COPY therefor, nor shall such
failure affect the validity of this Lease, or the obligations of Lessee
hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any
other obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the Parties shall be discharged
from all obligations hereunder; provided, however, that if such written notice
by Lessee is not received by Lessor within said ten (10) day period, Lessee's
right to cancel this Lease shall terminate and be of no further force or
effect. Except as may be otherwise provided, and regardless of when the term
actually commences, if possession is not tendered to Lessee when required by
this Lease and Lessee does not terminate this Lease, as aforesaid, the period
free of the obligation to pay Base Rent, if any, that Lessee would otherwise
have enjoyed shall run from the date of delivery of possession and continue for
a period equal to what Lessee would otherwise have enjoyed under the terms
hereof, but minus any days of delay caused by the acts, changes or omissions of
Lessee.

4. RENT.

4.1 BASE RENT. Lessee shall cause payment of Base Rent and other rent
or charges, as the same may be adjusted from time to time, to be received by
Lessor in lawful money of the United States, without offset or deduction, on or
before the day on which it is due under the terms of this Lease. Base Rent and
all other rent and charges for any period during the term hereof which is for
less than one (1) full calendar month shall be prorated based upon the actual
number of days of the calendar month involved. Payment of Base Rent and other
charges shall be made to Lessor at its address stated herein or to such other
persons or at such other addresses as Lessor may from time to time designate in
writing to Lessee.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or
retain all or any portion of said Security Deposit for the payment of any
amount due Lessor or to reimburse or compensate Lessor for any liability, cost,
expense, loss or damage (including attorneys' fees) which Lessor may suffer or
incur by reason thereof. If Lessor uses or applies all or any portion of said
Security Deposit, Lessee shall within ten (10) days after written request
therefor deposit moneys with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. Any time the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional moneys with Lessor sufficient to maintain the same ratio
between the Security Deposit and the Base Rent as those amounts are specified
in the Basic Provisions. Lessor shall not be required to keep all or any part
of the Security Deposit separate from its general accounts. Lessor shall, at
the expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.

6. USE

6.1 USE. Lessee shall use and occupy the Premises only for the
purposes set forth in Paragraph 1.8, or any other use which is comparable
thereto and for no other purpose. Lessee shall not use or permit the use of
the Premises in a manner that creates waste or a nuisance, or that disturbs
owners and/or occupants of, or causes damage to, neighboring premises or
properties.

6.2 HAZARDOUS SUBSTANCES.

(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance, chemical
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health,
safety or welfare, the environment or the Premises, (ii) regulated or monitored
by any governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum gasoline, crude oil or any products, by-products or
fractions thereof. Lessee shall not engage in any activity in, on or about the
Premises which constitutes a Reportable Use (as hereinafter defined) of
Hazardous Substances without the express prior written consent of Lessor and
compliance in a timely manner (at Lessee's sole cost and expense) with all
Applicable Law (as defined in Paragraph 6.3). "REPORTABLE USE" shall mean (i)
the installation or use of an above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Use shall also include Lessee's being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may, without Lessor's prior consent, but
in compliance with all Applicable Law, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of Lessee's
business permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any meaningful
risk of contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may (but without any obligation to do so) condition its consent
to the use or presence of any Hazardous Substance, activity or storage tank by
Lessee upon Lessee's giving Lessor such additional assurances as Lessor, in its
reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefrom or therefor, including, but not limited to, the
installation (and removal on or before Lease expiration or earlier termination)
of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit under
Paragraph 5 hereof.

(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance, or a condition involving or
resulting from same, has come to be located in, on, under or about the
Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor. Lessee shall also
immediately give Lessor a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action or proceeding given
to, or received from, any governmental authority or private party, or persons
entering or occupying the Premises, concerning the presence, spill, release,
discharge of, or exposure to, any Hazardous Substance or contamination in, on,
or about the Premises, including but not limited to all such documents as may
be involved in any Reportable Uses involving the Premises.

(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits any attorney's and consultant's fees arising out of or involving any
Hazardous Substance or storage tank brought onto the Premises by or for Lessee
or under Lessee's control. Lessee's obligations under this Paragraph 6 shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Lessee, and the cost
of investigation (including consultant's and attorney's fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances or storage tanks, unless
specifically so agreed by Lessor in writing at the time of such agreement.

6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in
this Lease, Lessee shall, at Lessee's sole cost and expense, fully, diligently
and in a timely manner, comply with all "APPLICABLE LAW," which term is used in
this Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any
manner to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or
not reflecting a change in policy from any previously existing policy. Lessee
shall, within five (5) days after receipt of Lessor's written request, provide
Lessor with copies of all documents and information, including, but not limited
to, permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law specified by Lessor, and
shall immediately, upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee or
the Premises to comply with any Applicable Law.

6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined
in Paragraph 8.3(a)) shall have the right to enter the Premises at any time in
the case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by
Lessee with this Lease and all Applicable Laws (as defined in Paragraph 6.3),
and to employ experts and/or consultants in connection therewith and/or to
advise Lessor with respect to Lessee's activities, including but not limited to
the installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination, caused or materially contributed to by Lessee is found to exist
or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination, in any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.

7.1 LESSEE'S OBLIGATIONS.

(a) Subject to the provisions of Paragraphs 2.2 (Lessor's
warranty as to condition), 2.3 (Lessor's warranty as to compliance with
covenants, etc., 7.2 (Lessor's obligations to repair), 9 (damage and
destruction), and 14 (condemnation), Lessee shall, at Lessee's sole cost and
expense and at all times keep the Premises and every part thereof in good
order, condition and repair, (whether or not such portion of the Premises
requiring repair, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use

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fire hydrants, fixtures, walls (interior and exterior), ceilings, floors,
windows, doors, plate glass, skylights, landscaping, driveways, parking lots,
fences, retaining walls, signs, sidewalks and parkways located in, on, about,
or adjacent to the Premises, but excluding foundations, the exterior roof and
the structural aspects of the Premises. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance, security and/or
monitoring of, the Premises, the elements surrounding same, or neighboring
properties, that was caused or materially contributed to by Lessee, or
pertaining to or involving any Hazardous Substance and/or storage tank brought
onto the Premises by or for Lessee or under its control. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good
maintenance practices. Lessee's obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair.

(b) Lessee shall, at Lessee's sole cost and expense,
procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in,
the inspection, maintenance and service of the following equipment and
improvements, if any, located on the Premises: (i) heating, air conditioning
and ventilation equipment, (ii) boiler, fired or unfired pressure vessels,
(iii) fire sprinkler and/or standpipe and hose or other automatic fire
extinguishing systems, including fire alarm and/or smoke detection, (iv)
landscaping and irrigation systems, (v) roof covering and drain maintenance and
(vi) asphalt and parking lot maintenance.

7.2 LESSOR'S OBLIGATIONS. Upon receipt of written notice of the
need for such repairs and subject to Paragraph 13.5, Lessor shall, at Lessor's
expense, keep the foundations, exterior roof and structural aspects of the
Premises in good order, condition and repair. Lessor shall not, however, be
obligated to paint the exterior surface of the exterior walls or to maintain
the windows, doors or plate glass or the interior surface of exterior walls.
Lessor shall not, in any event, have any obligation to make any repairs until
Lessor receives written notice of the need for such repairs. It is the
intention of the Parties that the terms of this Lease govern the respective
obligations of the parties as to maintenance and repair of the Premises.
Lessee and Lessor expressly waive the benefit of any statute now or hereafter
in effect to the extent it is inconsistent with the terms of this Lease with
respect to, or which affords Lessee the right to make repairs at the expense of
Lessor or to terminate this Lease by reason of, any needed repairs.

7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all carpeting, window
coverings, air lines, power panels, electrical distribution, security, fire
protection systems, communication systems, lighting fixtures, heating,
ventilating, and air conditioning equipment, plumbing, and fencing in, on or
about the Premises. The term "TRADE FIXTURES" shall mean Lessee's machinery
and equipment that can be removed without doing material damage to the
Premises. The term "ALTERATIONS" shall mean any modification of the
improvements on the Premises from that which are provided by Lessor under the
terms of this Lease, other than Utility Installations or Trade Fixtures,
whether by addition or deletion. "LESSEE OWNED ALTERATIONS AND/OR UTILITY
INSTALLATIONS" are defined as Alterations and/or Utility Installations made by
Lessee that are not yet owned by Lessor as defined in Paragraph 7.4(a). Lessee
shall not make any Alterations or Utility Installations in, on, under or about
the Premises without Lessor's prior written consent. Lessee may, however, make
non-structural Utility Installations to the interior of the Premises (excluding
the roof), as long as they are not visible from the outside, do not involve
puncturing, relocating or removing the roof or any existing walls, and the
cumulative cost thereof during the term of this Lease as extended does not
exceed $25,000.

(b) CONSENT. Any Alterations or Utility
installations that Lessee shall desire to make and which require the consent of
the Lessor shall be presented to Lessor in written form with proposed detailed
plans. All consents given by Lessor, whether by virtue of Paragraph 7.3(a) or
by subsequent specific consent, shall be deemed conditioned upon: (i) Lessee's
acquiring all applicable permits required by governmental authorities, (ii) the
furnishings of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to Lessor prior to
commencement of the work thereon, and (iii) the compliance by Lessee with all
conditions of said permits in a prompt and expeditious manner. Any Alterations
or Utility Installations by Lessee during the term of this Lease shall be done
in a good and workmanlike manner, with good and sufficient materials, and in
compliance with all Applicable Law. Lessee shall promptly upon completion
thereof furnish Lessor with as-built plans and specifications therefor. Lessor
may (but without obligation to do so) condition its consent to any requested
Alteration or Utility Installation that costs $10,000 or more upon Lessee's
providing Lessor with a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such Alteration or Utility Installation
and/or upon Lessee's posting an additional Security Deposit with Lessor under
Paragraph 36 hereof.

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

7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

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

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

(c) SURRENDER/RESTORATION. Lessee shall surrender
the Premises by the end of the last day of the Lease term or any earlier
termination date, with all of the improvements, parts and surfaces thereof
clean and free of debris and in good operating order, condition and state of
repair, ordinary wear and tear excepted. "ORDINARY WEAR AND TEAR" shall not
include any damage or deterioration that would have been prevented by good
maintenance practice or by Lessee performing all of its obligations under this
Lease. Except as otherwise agreed or specified in writing by Lessor, the
Premises, as surrendered, shall include the Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
Installation, maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Alterations and/or Utility Installations, as well as the removal
of any storage tank installed by or for Lessee, and the removal, replacement,
or remediation of any soil, material or ground water contaminated by Lessee,
all as may then be required by Applicable Law and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.

8. INSURANCE; INDEMNITY.

8.1 PAYMENT OF PREMIUM INCREASES.

(a) Lessee shall pay to Lessor any Insurance cost
increase ("INSURANCE COST INCREASE") occurring during the term of this Lease.
"INSURANCE COST INCREASE" is defined as any increase in the actual cost of the
insurance required under Paragraphs 8.2(b), 8.3(a) and 8.3(b). ("REQUIRED
INSURANCE"), over and above the Base Premium, as hereinafter defined,
calculated on an annual basis. "INSURANCE COST INCREASE" shall include, but
not be limited to, increases resulting from the nature of Lessee's occupancy,
any act or omission of Lessee, requirements of the holder of a mortgage or
deed of trust covering the Premises, increased valuation of the Premises,
and/or a premium rate increase. If the parties insert a dollar amount in
Paragraph 1.9, such amount shall be considered the "BASE PREMIUM." In lieu
thereof, if the Premises have been previously occupied, the "BASE PREMIUM"
shall be the annual premium applicable to the most recent occupancy. If the
Premises have never been occupied, the "BASE PREMIUM" shall be the lowest
annual premium reasonably obtainable for the Required Insurance as of the
commencement of the Original Term, assuming the most nominal use possible of
the Premises. In no event, however, shall Lessee be responsible for any
portion of the premium cost attributable to liability insurance coverage in
excess of $1,000,000 procured under Paragraph 8.2(b) (Liability Insurance
Carried By Lessor).

(b) Lessee shall pay any such Insurance Cost Increase to
Lessor within thirty (30) days after receipt by Lessee of a copy of the premium
statement or other reasonable evidence of the amount due. If the insurance
policies maintained hereunder cover other property besides the Premises, Lessor
shall also deliver to Lessee a statement of the amount of such Insurance Cost
Increase attributable only to the Premises showing in reasonable detail the
manner in which such amount was computed. Premiums for policy periods
commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement or Expiration of the
Lease term.

8.2 LIABILITY INSURANCE.

(a) CARRIED BY LESSEE. Lessee shall obtain and keep
in force during the term of this Lease a Commercial General Liability policy of
insurance protecting Lessee and Lessor (as an additional insured) against
claims for bodily injury, personal injury and property damage based upon,
involving or arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing single limit coverage in an amount not less than
$1,000,000 per occurrence with an "Additional Insured-Managers or Lessors of
Premises" Endorsement and contain the "Amendment of the Pollution Exclusion"
for damage caused by heat, smoke or fumes from a hostile fire. The policy
shall not contain any Intra-Insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this
Lease as an "Insured contact" for the performance of Lessee's indemnity
obligations under this Lease. The limits of said insurance required by this
Lease or

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(b) CARRIED BY LESSOR. In the event Lessor is the Insuring
Party, Lessor shall also maintain liability insurance described in Paragraph
8.2(b) herein. In addition to, and not in lieu of, the insurance required to be
maintained by Lessee, Lessee shall not be named as an additional insured
therein.

8.3 PROPERTY INSURANCE--BUILDING, IMPROVEMENTS AND RENTAL VALUE.

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

(b) RENTAL VALUE. Lessor shall, in addition, obtain and keep
in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender(s), insuring the loss of the
full rental and other charges payable by Lessee to Lessor under this Lease for
one (1) year (including all real estate taxes, insurance costs, and any
scheduled rental increases). Said insurance shall provide that in the event the
Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any, otherwise
payable by Lessee, for the next twelve (12) month period.

(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or if the Premises are part of a group of buildings owned by Lessor
which are adjacent to the Premises, the Lessee shall pay for any increase in
the premiums for the property insurance of such building or buildings if said
increase is caused by Lessee's acts, omissions, use or occupancy of the
Premises.

(d) TENANT'S IMPROVEMENTS. Since Lessor is the Insuring Party,
the Lessor shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.

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

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

8.6 WAIVER OF SUBROGRATION. Without affecting any other rights or
remedies, Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve
the other, and waive their entire right to recover damages (whether in contract
or in tort) against the other, for loss of or damage to the Waiving Party's
property arising out of or incident to the perils required to be insured
against under Paragraph 8. The effect of such releases and waivers of the right
to recover damages shall not be limited by the amount of insurance carried or
required, or by any deductibles applicable thereto.

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

8.8. EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or
any other person in or about the Premises, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is accessible or
not. Lessor shall not be liable for any damages arising from any act or neglect
of any other tenant of Lessor. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable to injury to Lessee's
business or for any loss of income or profit therefrom.

9. DAMAGE OR DESTRUCTION.

9.1 DEFINITIONS.

(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned Alteration and
Utility Installations, the repair cost of which damage or destruction is less
than 50% of the then Replacement Cost of the Premises immediately prior to such
damage or destruction, excluding from such calculation the value of the land
and Lessee Owned Alterations and Utility Installations.

(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installation the repair cost of which damage or destruction is 50% or more of
the then Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.

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

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

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

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

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Lessee (in which event Lessee shall make the ...... ILLEGIBLE COPY .....
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the
damage or destruction is an Insured Loss or was caused by a negligent or
willful act of Lessee. In the event, however, that the damage or destruction
was caused by Lessee, Lessor shall have the right to recover Lessor's damages
from Lessee except as released and waived in Paragraph 8.6.

9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor may,
at Lessor's option, terminate this Lease effective sixty (60) days following
the date of occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within thirty (30) days after the date of occurrence
of such damage. Provided, however, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, within twenty (20) days following the occurrence of the
damage, or before the expiration of the time provided in such option for its
exercise, whichever is earlier ("EXERCISE PERIOD"), (i) exercising such option
and (ii) providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs. If Lessee duly exercises such
option during said Exercise Period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Lessor shall,
at Lessor's expense repair such damage as soon as reasonably possible and this
Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during said Exercise Period,
then Lessor may at Lessor's option terminate this Lease as of the expiration of
said sixty (60) day period following the occurrence of such damage by giving
written notice to Lessee of Lessor's election to do so within ten (10) days
after the expiration of the Exercise Period, notwithstanding any term or
provision in the grant of option to the contrary.

9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.

(a) In the event of damage described in Paragraph 9.2 (Partial
Damage--Insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, Insurance premiums, and other
charges, if any; payable by Lessee hereunder for the period during which such
damage, its repair or the restoration continues (not to exceed the period for
which rental value insurance is required under Paragraph 8.3(b)), shall be
abated in proportion to the degree to which Lessee's use of the Premises is
impaired. Except for abatement of Base Rent, Real Property Taxes, Insurance
premiums, and other charges, if any, as aforesaid, all other obligations of
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such repair or
restoration.

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

9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by
Applicable Law and this Lease shall continue in full force and effect, but
subject to Lessor's rights under Paragraph 13), Lessor may at Lessor's option
either (i) investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) if the estimated
cost to investigate and remediate such condition exceeds twelve (12) times the
then monthly Base Rent or $100,000, whichever is greater, give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the giving of
such notice. In the event Lessor elects to give such notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten (10)
days after the receipt of such notice to give written notice to Lessor or
Lessee's commitment to pay for the investigation and remediation of such
Hazardous Substance Condition totally at Lessee's expense and without
reimbursement from Lessor except to the extent of an amount equal to twelve
(12) times the then monthly Base Rent or $100,000, whichever is greater.
Lessee shall provide Lessor with the funds required of Lessee or satisfactory
assurance thereof within thirty (30) days following Lessee's said commitment.
In such event this Lease shall continue in full force and effect, and Lessor
shall proceed to make such investigation and remediation as soon as reasonably
possible and the required funds are available. If Lessee does not give such
notice and provide the required funds or assurance thereof within the times
specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination. If a Hazardous Substance Condition occurs for
which Lessee is not legally responsible, there shall be abatement of Lessee's
obligations under this Lease to the same extent as provided in Paragraph 9.6(a)
for a period of not to exceed twelve months.

9.8 TERMINATION--ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor under
the terms of this Lease.

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

10. REAL PROPERTY TAXES.

10.1 (a) PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes,
as defined in Paragraph 10.2, applicable to the Premises; provided, however,
that Lessee shall pay, in addition to rent, the amount, if any, by which Real
Property Taxes applicable to the Premises increase over the fiscal tax year
during which the Commencement Date occurs ("TAX INCREASE"). Subject to
Paragraph 10.1(b), payment of any such Tax Increase shall be made by Lessee
within thirty (30) days after receipt of Lessor's written statement setting
forth the amount due and the computation thereof. Lessee shall promptly furnish
Lessor with satisfactory evidence that such taxes have been paid. If any such
taxes to be paid by Lessee shall cover any period of time prior to or after the
expiration or earlier termination of the term hereof, Lessee's share of such
taxes shall be equitably prorated to cover only the period of time within the
tax fiscal year this Lease is in effect, and Lessor shall reimburse Lessee for
any overpayment after such proration.

(b) ADVANCE PAYMENT. In order to insure payment when due and
before delinquency of any or all Real Property Taxes, Lessor reserves the right
at Lessor's option, to estimate the current Real Property Taxes applicable to
the Premises, and to require such current year's Tax Increase to be paid in
advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the
amount due, at least twenty (20) days prior to the applicable delinquency date,
or (ii) monthly in advance with the payment of the Base Rent. If Lessor elects
to require payment monthly in advance, the monthly payment shall be that equal
monthly amount which, over the number of months remaining before the month in
which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully discharge before
delinquency the estimated Tax Increase to be paid. When the actual amount of
the applicable Tax Increase is known, the amount of such equal monthly advance
payment shall be adjusted as required to provide the fund needed to pay the
applicable Tax Increase before delinquency. If the amounts paid to Lessor by
Lessee under the provisions of this Paragraph are insufficient to discharge the
obligations of Lessee to pay such Tax Increase as the same becomes due, Lessee
shall pay to Lessor, upon Lessor's demand such additional sums as are necessary
to pay such obligation. All moneys paid to Lessor under this Paragraph may be
intermingled with other moneys of Lessor and shall not bear interest. In the
event of a Breach by Lessee in the performance of the obligations of Lessee
under this Lease, then any balance of funds paid to Lessor under the provisions
of this Paragraph may, subject to proration as provided in Paragraph 10.1(a),
at the option of Lessor, be treated as an additional Security Deposit under
Paragraph 5.

(c) ADDITIONAL IMPROVEMENTS. Notwithstanding Paragraph
10.1(a) hereof, Lessee shall pay to Lessor upon demand therefor the entirety of
any increase in Real Property Taxes assessed by reason of Alterations or Utility
Installations placed upon the Premises by Lessee or at Lessee's request.

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

10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuation
assigned in the assessor's work sheets or such other information as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

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........MISSING COPY........
shall cause its Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property ........
If any of Lessee's said personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property or, at Lessor's option, as provided in
Paragraph 10.1(b).

11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.

12. ASSIGNMENT AND SUBLETTING.

12.1 LESSOR'S CONSENT REQUIRED.

(a) Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or otherwise transfer or encumber (collectively,
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this Lease or
in the Premises without Lessor's prior written consent given under and subject
to the terms of Paragraph 36.

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

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

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

12.1 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

(a) Regardless of Lessor's consent, any assignment or
subletting shall not: (i) be effective without the express written assumption
by such assignee or sublessee of the obligations of Lessee under this Lease,
(ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.

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

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

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

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

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

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

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

12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all
or any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Lessee, and Lessor
may collect such rent and income and apply same toward Lessee's obligations
under this Lease; provided, however, that until a Breach (as defined in
Paragraph 13.1) shall occur in the performance of Lessee's obligations under
this Lease, Lessee may, except as otherwise provided in this Lease, receive,
collect and enjoy the rents accruing under such sublease. Lessor shall not, by
reason of this or any other assignment of such sublease to Lessor, nor by
reason of the collection of the rents from a sublessee, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee under such sublease. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice
from Lessor stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents and other charges due
and to become due under the sublease. Sublessee shall rely upon any such
statement and request from Lessor and shall pay such rents and other charges to
Lessor without any obligation or right to inquire as to whether such Breach
exists and notwithstanding any notice from or claim from Lessee to the
contrary Lessee shall have no right or claim against said sublessee, or, until
the Breach has been cured, against Lessor, for any such rents and other charges
so paid by said sublessee to Lessor.

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

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

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

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

13. DEFAULT; BREACH; REMEDIES.

13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in
said notice as rent due and payable to cure said Default. A "DEFAULT" is
defined as a failure by the Lessee to observe, comply with or perform any of
the terms, covenants, conditions or rules applicable to Lessee under this
Lease. A "BREACH" is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies
set forth in Paragraphs 13.2 and/or 13.3:

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

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evidence of insurance or surety bond required under this Lease, or the failure
of Lessee to fulfill any obligation [ILLEGIBLE COPY] threatens life or
property, where such failure continues for a period of three (3) days
following written notice thereof by or on behalf of Lessor to Lessee.

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

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

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

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

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

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

(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee: (i) the worth at the
time of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of the leasing commission paid by Lessor applicable to the unexpired
term of this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the prior sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent. Efforts by Lessor to mitigate damages caused by
Lessee's Default or Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the
right to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Lessor may reserve therein the right to recover all or
any part thereof in a separate suit for such rent and/or damages. If a notice
and grace period required under subparagraph 13.1(b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing the forfeiture of
leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by subparagraph 13.1(b), (c) or (d). In such
case, the applicable grace period under subparagraphs 13.1(b), (c) or (d) and
under the unlawful detainer statute shall run concurrently after the one such
statutory notice, and the failure of Lessee to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lessor to the remedies provided
for in this Lease and/or by said statute.

(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after
Lessee's Breach and abandonment and recover the rent as it becomes due,
provided Lessee has the right to sublet or assign, subject only to reasonable
limitations. See Paragraphs 12 and 36 for the limitations on assignment and
subletting which limitations Lessee and Lessor agree are reasonable. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Lessor's interest under the Lease, shall not
constitute a termination of the Lessee's right to possession.

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

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

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

13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any installment or rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within five (5)
days after such amount shall be due, then, without any requirement for notice
to Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%)
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or Breach with
respect to such overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.

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

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part to taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall

Initials JM
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[ILLEGIBLE LINE]
Premises. No reduction of Base Rent shall occur if the only portion of the
Premises taken is land on which there is no building. Any [ILLEGIBLE] of all or
any part of the Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as a severance damages; provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade
Fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall to the extent of its net severance damages received,
over and above the legal and other expenses incurred by Lessor in the
condemnation matter, repair any damage to the Premises caused by such
condemnation, except to the extent that Lessee has been reimbursed therefor by
the condemning authority. Lessee shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.

15. BROKER'S FEE.

15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease.

15.2 Upon execution of this Lease by both Parties, Lessor shall pay to
said Brokers jointly, or in such separate shares as they may mutually designate
in writing, a fee as set forth in a separate written agreement between Lessor
and said Brokers (or in the event there is no separate written agreement
between Lessor and said Brokers, the sum of $(see addendum Para. 61) for
brokerage services rendered by said Brokers to lessor in this transaction.

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

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

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

15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.

16. TENANCY STATEMENT.

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

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

17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of a liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligation and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.

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

19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.

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

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

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein and
no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Broker that it
has made, and is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other Party to the Lease
and as to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.

23. NOTICES.

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

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

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

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

26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination this
Lease.

27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedy at
law or in equity.
Initial /s/ J.M.
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[ILLEGIBLE LINE]
in which the Premises are located.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the
cure of said default before invoking any remedies Lessee may have by reason
thereof. If any Lender shall elect to have this Lease and/or any Option granted
hereby superior to the lien of its Security Device and shall give written
notice thereof to Lessee, this Lease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the documentation
or recordation thereof.

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

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

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

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

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

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

34. SIGNS. Lessee shall not place any sign upon the Premises, except that
Lessee may, with Lessor's prior written consent, install (but not on the roof)
such signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). [STRIKEOUT] Unless otherwise expressly agreed
herein, Lessor reserves all rights to the use of the roof and the right to
install, and all revenues from the installation of, such advertising signs on
the Premises, including the roof, as do not reasonably interfere with the
conduct of Lessee's business. [End Strikeout]
JM CM NUG

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

36. CONSENTS.

(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to
an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses (including
but not limited to architects', attorneys', engineers' or other consultants'
fees) incurred in the consideration of, or response to, a request by Lessee for
any Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to
Lessor upon receipt of an Invoice and supporting documentation therefor.
Subject to Paragraph 12.2(3) (applicable to assignment or subletting), Lessor
may, as a condition to considering any such request by Lessee, require that
Lessee deposit with Lessor an amount of money (in addition to the Security
Deposit held under Paragraph 5) reasonably calculated by Lessor to represent
the cost Lessor will incur in considering and responding to Lessee's request.
Except as otherwise prvided, any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.

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

37. GUARANTOR.

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

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

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

39. OPTIONS.

39.1 DEFINITION. As used in this Paragraph 39 the word "OPTION" has
the following meaning: (a) the right to extend the term of this Lease or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the right of first refusal to lease the Premises or the
right of first offer to lease the Premises or the right of first refusal to
lease other property of Lessor or the right of first offer to lease other
property of Lessor; (c) the right to purchase the Premises, or the right of
first refusal to purchase the Premises, or the right of first offer to purchase
the Premises, or the right to purchase other property of Lessor, or the right
of first refusal to purchase other property of Lessor, or the right of first
offer to purchase other property of Lessor.

39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in Paragraph 1.1
hereof, and cannot be voluntarily assigned or exercised by any person or entity
other than said original Lessee while the original Lessee is in full and actual
possession of the Premises and without the intention of thereafter assigning or
subletting. The Options, if any, herein granted to Lessee are not assignable,
either as a part of an assignment of this Lease or separately or apart
therefrom, and no Option may be separated from this Lease in any manner, by
reservation or otherwise.

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

Initial J.M.
---------
GROSS PAGE 9 N.G. C.M.
---------

<PAGE> 11
time any monetary obligation due Lessor from Lessee is unpaid (without regard
to written notice ([ILLEGIBLE] is given Lessee), or (iii) during the time
Lessee is in Breach of this Lease, or (iv) in the event that Lessor has given
to Lessee three (3) or more notices of Default under Paragraph 13.1, whether
or not the Defaults are cured, during the twelve (12) month period immediately
preceding the exercise of the Option.

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

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

40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for
the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred
in connection therewith.

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

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

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

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

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

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

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

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

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

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

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

Executed at Westlake Village, CA Executed at Somis, CA
---------------------------- ------------------------
on 6-16-94 on 6-13-94
------------------------------------- ---------------------------------
by LESSOR: by LESSEE:

Westlake Professional Center Chuck Melina /s/ CHUCK MELINA
- ---------------------------------------- -----------------------------------
Partnership Joseph Melina /s/ JOSEPH MELINA
- ---------------------------------------- -----------------------------------

by /s/ NEMAT GHAUSI By /s/ CHUCK MELINA
-------------------------------------- ----------------------------------
Name Printed: Nemat Ghausi Name Printed: Chuck Melina
--------------------------- -----------------------
Title: General Partner Title:
---------------------------------- ------------------------------

By By /s/ JOSEPH MELIA
--------------------------------------- ----------------------------------
Name Printed: Name Printed: Joseph Melia
---------------------------- ----------------------
Title: Title:
----------------------------------- -----------------------------
Address: 3180 Willow Lane Suite 200 Address: P.O. Box 243
--------------------------------- ---------------------------
Westlake Village, CA 91361 Somis, CA 93066
- ----------------------------------------- ------------------------------------
Tel. Fax Tel. Fax
No. (805) 497-3910 No.(805) 497-3110 No. (805) 386-3446 No.
---------------- ---------------- ---------------- -----------

GROSS PAGE 10

NOTICE: These forms are often modified to meet changing requirements of law
and industry needs. Always write or call to make sure you are
utilizing the most current form: American Industrial Real Estate
Association, 345 South Figueroa Street, Suite M-1, Los Angeles,
CA 90071. (213) 687-8777. Fax No. (213) 687-8616.

[ILLEGIBLE]

FORM 105G-3/9

<PAGE> 12
"EXHIBIT A"
RENT SCHEDULE
75 LONG CT, THOUSAND OAKS, CA 91360

The rent schedule is to be as follows:

<TABLE>
<S> <C>
YEAR 1 - $3,500.00 PER MONTH - $ 42,000.00 ANNUALLY

YEAR 2 - $3,500.00 PER MONTH - $ 42,000.00 ANNUALLY

YEAR 3 - $4,000.00 PER MONTH - $ 48,000.00 ANNUALLY

YEAR 4 - $4,200.00 PER MONTH - $ 50,400.00 ANNUALLY

YEAR 5 - $4,410.00 PER MONTH - $ 52,920.00 ANNUALLY
-----------
TOTAL - $235,320.00

Initial /s/ J.M.
-----------
C.M.
-----------
N.G.
</TABLE>
<PAGE> 13
GUARANTEE OF LEASE

PROJECT: 75 Long Ct. Thousand Oaks

Whereas, a Lease Agreement dated June 9, 1994 is entered between
(Landlord) Westlake Professional Center Partnership and Chuck Melia and Joseph
Melia dba Biker's Dream (Tenant).
and

Whereas, Landlord leases to Tenant and Tenant leases from Landlord that
certain demised premises and other improvements located thereon situated in the
City of Thousand Oaks, County of Ventura, State of California, Commonly known
as: Commercial Office/Retail Building at 75 Long Ct., T.O.
and

Whereas, Landlord requires as a condition to the execution of the Lease
the undersigned's guarantee of full and faithful performance of the obligations
of the Tenant under the Lease;

Now, therefore, in consideration of the execution of said Lease by
Landlord, the undersigned unconditionally guarantees the full and faithful
performance of each and every provision, covenant and condition of the Lease to
be kept and performed by Tenant, including the payment of all rentals and other
charges to accrue hereunder.

The undersigned further agrees that this guarantee of the Lease
Agreement shall continue in favor of Landlord notwithstanding any extension,
modification, or alteration of the Lease entered into and by the parties
thereto, their succesors or assigns.

In witness whereof, the undersigned executes this guarantee this 13th
of day of June, 199?.

By: /s/ CHUCK MELIA 6/13/94
-------------------------------------
GUARANTOR

Print Name: CHUCK MELIA
-----------------------------

BY: /s/ JOSEPH MELIA 6/13/94
-------------------------------------
GUARANTOR

Print Name: JOSEPH MELIA
-----------------------------

<PAGE> 14
LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------------

THIS LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered
into as of this 22nd day of September, 1995 by and among Westlake Professional
Center Partnership (hereinafter referred to as the "Landlord"), Joseph C. Melia
and Charles J. Melia (hereinafter referred to, collectively, as the
"Assignors"), and Bikers Dream, Inc., a California corporation (hereinafter
referred to as the "Assignee");

W I T N E S S E T H:

WHEREAS, the Landlord and the Assignors have entered into that
certain Standard Industrial/Commercial Single-Tenant Lease (Gross) dated
June 9, 1994, a copy of which is attached hereto as Exhibit A and incorporated
herein by reference (the "Lease"); and

WHEREAS, the Assignee desires to acquire from the Assignors all of
their rights, title and interest in and to the Lease; and

WHEREAS, the Landlord has agreed to consent to this Assignment by the
Assignors and the assumption by the Assignee of the Lease on the terms and
conditions set forth in this Assignment;

NOW, THEREFORE, the Landlord, the Assignors and the Assignee hereby
agree and contract as follows:

1. ASSIGNMENT. The Assignors hereby sell, assign and transfer to
the Assignee all of the Assignors' rights, title and interest in and to the
Lease and all deposits hereunder, and the Assignee hereby accepts the
assignment of the Lease and such deposits from the Assignors, all to be
effective as of September 22nd 1995.

2. ASSUMPTION. The Assignee hereby assumes and accepts all of the
obligations, responsibilities, duties and liabilities under and resulting from
the Lease and accruing after the effective date set forth in Section 1 above
and agrees, in all respects, to comply with and perform all of the terms,
conditions and covenants of the Lease including, but not limited to, the
obligation to make all payments accrued after such effective date pursuant to
and under the Lease. In addition, the Assignee hereby assumes the obligation of
the Assignors for delinquent and unpaid rent due under the lease in an amount
not to exceed $6,300.

3. CONSENT. The Landlord hereby consents in all respects to this
Assignment.

<PAGE> 15
IN WITNESS WHEREOF, the Landlord, the Assignors and the Assignee have
caused this Assignment to be executed as of the date first set forth above.

"Landlord"

Westlake Professional Center Partnership, a

CA Partership
----------------------------

By /s/ ?
----------------------------------------

Its General Partner
---------------------------------------

"Assignors"

/s/ JOSEPH C. MELIA
-------------------------------------------
Joseph C. Melia

/s/ CHARLES J. MELIA
-------------------------------------------
Charles J. Melia

"Assignee"

BIKERS DREAM, INC.

By /s/ DENNIS CAMPBELL
---------------------------------------
Dennis Campbell
Its President

<PAGE> 1

LIST OF SUBSIDIARIES

1. Bikers Dream International, Inc.

BIKERS DREAM, INC
FORM SB-2
EXHIBIT 21.1

<PAGE> 1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use in this Registration Statement on Form
SB-2 of our report dated March 15, 1995 relating to the financial statements of
Bikers Dream, Inc. for the years ended December 31, 1992, 1993, and 1994,
respectively, and the reference to our firm under the caption "EXPERTS" in the
Prospectus.

LESLEY, THOMAS, SCHWARZ & POSTMA
CERTIFIED PUBLIC ACCOUNTANTS

Newport Beach, California
October 13, 1995

Bikers Dream, Inc.
Form SB-2
Exhibit 23.1