AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

            STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-GROSS
                (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, May
16,  1994,  is  made by and  between  Harold  Pease  ("Lessor")  and  FLIGHTWAYS
MANUFACTURING,  INC., A California  Corporation  ("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 this Lease,  and commonly
known by the street  address of 7660  Densmore  Avenue,  Van Nuys located in the
County of Los Angeles State of California  and generally  described as (describe
briefly the nature of the property) a 15,000 square foot industrial building and
two (2) metal storage structures on M-1 zoned land. ("Premises"). (See Paragraph
2 for further provisions.)
     1.3 Term: five (5) years and 0 months  ("Original  Term") commencing August
1, 1994 ("Commencement Date") and ending July 31, 1999 ("Expiration Date"). (See
Paragraph 3 for further provisions).
     1.4 Early  Possession:  June 1, 1994 to July 31,  1994  ("Early  Possession
Date") (See Paragraphs 3.2 and 3.3 for further provisions.)
     1.5 Base Rent: $7,500.00 per month ("Base Rent"),  payable on the first day
of each  month  commencing  September  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:  $7,500.00  as Base Rent for the period
August, 1994 (Base rent for June and July 1994 is abated.
     1.7 Security Deposit:$ 30,000.00 * ("Security  Deposit").  (See Paragraph 5
for further provisions.)
     1.8 Permitted Use: manufacturing of aircraft seating components and related
legal uses. (See Paragraph 6 for further provisions.)
     1.9 Insuring  Party:  Lessor is the "Insuring  Party."  $_____ 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 this  transaction  and are
consented to by the Parties (check applicable boxes):
     DELPHI BUSINESS PROPERTIES represents
[ ]  Lessor exclusively ("Lessor's Broker"); [X] both Lessee and Lessor, and N/A
     represents
[ ]  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 (None) ("Guarantor"). (See Paragraph 37 for further provisions.)
     1.12  Addenda.  Attached  hereto is an  Addendum or Addenda  consisting  of
Paragraphs 49 through 55 and Exhibits  (None) 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 all
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
Alterations 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 that 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 warranties 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  any
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,
shall be in effect  during  such  period.  Any such early  possession  shall not
affect nor advance the Expiration Date of the Original Term.

  *See Paragraph #52 on Addendum.                                Initials CJL
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       (C) Copyright 1990-By American Industrial Real Estate Association.
               All rights reserved. No part of these works may be
              reproduced in any form without permission in writing.

                                                               FORM 105G-R-12/91
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     3.3 Delay In Possession. If for any reason Lessor cannot deliver possession
of the Premises to Lessee as agreed herein by the Early  Possession  Date if one
is specified in Paragraph 1.4, or, if no Early Possession Date is specified,  by
the Commencement  Date,  Lessor shall not be subject to any liability  therefor,
nor shall such failure affect the validity of this Lease,  or the obligations of
Lessee hereunder, or extend the term hereof, but in such case. Lessee shall not,
except as  otherwise  provided  herein,  be obligated to pay rent or perform any
other  obligation of Lessee under the terms of this Lease until Lessor  delivers
possession  of the  Premises to Lessee.  If  possession  of the  Premises is not
delivered to Lessee within sixty (60) days after the Commencement  Date,  Lessee
may,  at its  option,  by  notice in  writing  to  Lessor  within  ten (10) days
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.  (See Paragraph #52 on Addendum.) 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.  Lessor
hereby agrees to not  unreasonably  withhold or delay its consent to any written
request by Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee,  its assignees and subtenants,  for a modification
of said  permitted  purpose for which the premises  may be used or occupied,  so
long as the same will not impair the structural integrity of the improvements on
the Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements  thereon,  and is otherwise
permissible  pursuant to this  Paragraph  6. If Lessor  elects to withhold  such
consent,  Lessor shall within five (5) business days give a written notification
of same,  which  notice  shall  include an  explanation  of Lessor's  reasonable
objections to the change in use.
     6.2 Hazardous Substances.
        (a) Reportable Uses Require Consent.  The term "Hazardous  Substance" as
used in this Lease  shall mean any  product,  substance,  chemical,  material or
waste whose  presence,  nature,  quantity  and/or  intensity of existence,  use,
manufacture,  disposal,  transportation,  spill,  release or  effect,  either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially  injurious to the public health,  safety or welfare, the
environment  or the Premises,  (ii)  regulated or monitored by any  governmental
authority,  or (iii) a basis for 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 any above or
below ground  storage  tank,  (ii) the  generation,  possession,  storage,  use,
transportation,  or  disposal of a Hazardous  Substance  that  requires a permit
from, or with respect to which a report,  notice,  registration or business plan
is required to be filed with, any governmental  authority.  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  of  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  descretion,  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, penalities, 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 to, the effects of any contamination or injury to person, property of 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 covenant, etc.


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7.2  (Lessor's  obligations  to  repair),  9 (damage  and  destruction),  and 14
(condemnation), Lessee shall, at Lessee's said cost and expense and at all times
keep the Premises and every part  thereof in good order,  condition  and repair,
(whether or not such portion of the Premises  requiring  repair, or the means of
repairing the same, are reasonably or readily  accessible to Lessee, and whether
or not the need for such  repairs  occurs as a result of Lessee's use, any prior
use,  the  elements  or the age of such  portion  of the  Premises),  including,
without  limiting the generality of the  foregoing,  all equipment or facilities
serving the Premises, such as plumbing, heating, air conditioning,  ventilating,
electrical,  lighting  facilities,  boilers,  fired or unfired pressure vessels,
fire sprinkler and/or  standpipe and hose or other automatic fire  extinguishing
system, including fire alarm and/or smoke detection systems and equipment,  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 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  furnishing  of copies of such
permits together with a copy of the plans and  specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon, and
(iii) the  compliance by Lessee with all  conditions of said permits in a prompt
and  expeditious  manner.  Any  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 surely  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  service  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) pays 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"


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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
contract"  for the  performance  of Lessee's  indemnity  obligations  under this
Lease.  The  limits of said  insurance  required  by this Lease or as carried by
Lessee shall not,  however,  limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not  contributory  with any similar  insurance  carried by Lessor,  whose
insurance shall be considered excess insurance only.
         (b)  Carried  By Lessor.  In the event  Lessor is the  Insuring  Party,
Lessor shall also maintain  liability  insurance  described in Paragraph 8.2(a),
above  in  addition  to,  and not in  lieu  of,  the  insurance  required  to be
maintained  by  Lessee.  Lessee  shall  not be  named as an  additional  insured
therein.
     8.3  Property  Insurance-Building,   Improvements  and  Rental  Value.  (a)
Building and  Improvements.  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 of 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 Utilities  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 of 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 the  additional  insureds,
required under  Paragraph  8.2(a) and 8.4. No such policy shall be cancelable or
subject to  modification  except after thirty (30) days prior written  notice to
Lessor.  Lessee shall at least thirty (30) days prior to the  expiration of such
policies,  furnish  Lessor with  evidence of  renewals  or  "insurance  binders"
evidencing  renewal  thereof,  or Lessor may order such insurance and charge the
cost  thereof to Lessee,  which amount shall be payable by Lessee to Lessor upon
demand.
     8.6 Waiver of Subrogation.  Without affecting any other rights or remedies,
Lessee and Lessor  ("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 for injury to Lessee's
business or for any loss of income or profit therefrom.

9.   Damage or Destruction.
     9.1 Definitions.
         (a) "Premises  Partial  Damage" shall mean damage or destruction to the
improvements  on the Premises,  other than Lessee Owned  Alterations 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 Installations 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 or coverage limits
involved.
         (d)  "Replacement  Cost"  shall mean the cost to repair or rebuild  the
improvements  owned by Lessor at the time of the  occurrence to their  condition
existing  immediately prior thereto,  including  demolition,  debris removal and
upgrading required by the operation of applicable building codes,  ordinances or
laws, and without deduction for depreciation.
         (e)  "Hazardous  Substance  Condition"  shall  mean the  occurrence  or
discovery of a condition  involving  the presence of, or a  contamination  by, a
Hazardous  Substance  as  defined  in  Paragraph  6.2(a),  in,  on, or under the
Premises.
     9.2 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  to 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 said funds or adequate
assurance  thereof  within  said ten (10) day period, 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 Lessor does not receive  such
funds or assurance within said period,  Lessor may nevertheless elect by written
notice to Lessee within ten (10) days  thereafter to make such  restoration  and
repair  as is  commercially  reasonable  with  Lessor  paying  any  shortage  in
proceeds,  in which case this Lease shall remain in full force and effect. If in
such case Lessor does not so elect,  then this Lease shall  terminate sixty (60)
days following the  occurrence of the damage or  destruction.  Unless  otherwise
agreed, Lessee shall in no event have any right to reimbursement from Lessor for
any funds contributed by Lessee to repair


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any  such  damage  or  destruction.  Premises  Partial  Damage  due to  flood or
earthquake  shall  be  subject  to  Paragraph  9.3  rather  than  Paragraph  9.2
notwithstanding that there may be some insurance coverage,  but the net proceeds
of any such insurance  shall be made available for the repairs if made by either
Party.
     9.3 Partial Damage-Uninsured Loss. If a Premises Partial Damage that is not
an Insured  Loss occurs,  unless  caused by a negligent or willful act of Lessee
(in which event Lessee shall make the repairs at Lessee's expense and this Lease
shall  continue in full force and effect,  but subject to Lessor's  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 haw 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 of 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 (12) 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 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 or transfer thereof, and whether or not contemplated by the Parties.


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     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  valuations
assigned  in the  assessor's  work  sheets or such other  information  as may be
reasonably available.  Lessor's reasonable  determination thereof, in good faith
shall be conclusive.
     10.4 Personal  Property  Taxes.  Lessee shall pay prior to delinquency  all
taxes  assessed  against  and levied  upon  Lessee  Owned  Alterations,  Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee  contained in the Premises or elsewhere.  When possible,  Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed  separately from the real property of Lessor if any of
Lessee's said 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 of Lessee shall  constitute  an  assignment
requiring Lessor's consent. The transfer,  on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall  constitute a change
in control for this purpose.
         (c) The  involvement  of Lessee or its  assets in any  transaction,  or
series  of  transactions  (by  way  of  merger,  sale,  acquisition,  financing,
refinancing,  transfer, leveraged buy-out or otherwise), whether or not a formal
assignment  or  hypothecation  of this Lease or Lessee's  assets  occurs,  which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of 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 nondurable  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 market
rental  value,  if disputed by Lessee,  Lessee shall pay the amount set forth in
Lessor's Notice,  with any overpayment  credited against the next installment(s)
of Base Rent coming due, and any  underpayment  for the period  retroactively to
the effective date of the adjustment being due and payable  immediately upon the
determination  thereof.  Further,  in the event of such Breach and 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.
         (e)  Lessee's  remedy for any breach of this  Paragraph  12.1 by Lessor
shall be limited to compensatory damages and injunctive relief.
     12.2 Terms and Conditions Applicable to Assignment and Subletting.
         (a) Regardless of Lessor's consent,  any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease,  (ii) release Lessee of
any obligations  hereunder,  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,

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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, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3.
         (a) The  vacating of the  Premises  without the  intention  to reoccupy
same, or the abandonment of the Premises.
         (b) Except as expressly  otherwise  provided in this Lease, the failure
by  Lessee  to make any  payment  of Base  Rent or any  other  monetary  payment
required to be made by Lessee hereunder, whether to Lessor or  to a third party,
as and when due,  the  failure  by  Lessee to  provide  Lessor  with  reasonable
evidence of insurance or surety bond required  under this Lease,  or the failure
of Lessee to  fulfill  any  obligation  under  this  Lease  which  endangers  or
threatens life or property,  where such failure  continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.
         (c) Except as expressly  otherwise  provided in this Lease, the failure
by Lessee to provide Lessor with reasonable  written  evidence (in duly executed
original  form,  if  applicable)  of (i)  compliance  with  applicable  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 Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease if
required  under  Paragraphs  1.11 and 37,  (vii) the  execution  of any document
requested  under Paragraph 42 (easements) or (viii) any other  documentation  or
information  which  Lessor may  reasonably  require of Lessee under the terms of
this  Lease,  where  any such  failure  continues  for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
         (d) A Default  by Lessee as to the  terms,  convenants,  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. sec. 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  (1%).  Efforts by Lessor to  mitigate  damages
caused by  Lessee's  Default  or Breach of this Lease  shall not waive  Lessor's
right to recover damages under this  Paragraph.  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  subparagraphs  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  subparagraphs  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 to as "Inducement  Provisions,"  shall be
deemed  conditioned  upon Lessee's full and faithful  performance  of all of the
terms,  covenants  and  conditions  of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended.  Upon the  occurrence
of a Breach 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 of 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 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.

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14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent  domain or sold under the threat of the  exercise of said power
(all of which are herein called  "condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises,  or more than  twenty-five  percent (25%) of the 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 condeming  authority shall have taken possession)
terminate  this  Lease  as of the  date  the  condemning  authority  takes  such
possession.  If Lessee  does not  terminate  this Lease in  accordance  with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises  remaining,  except that the Base Rent shall be reduced in the same
proportion as the rentable  floor area of the Premises  taken bears to the total
rentable  floor area of the building  located on the  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  award  for the  taking  of all or any  part of the
Premises  under the power of eminent  domain or any payment made under threat of
the exercise of such power shall be the  property of Lessor,  whether such award
shall be made as  compensation  for  diminution in value of the leasehold or for
the taking of the fee, or as severance damages,  provided,  however, that Lessee
shall be entitled to any compensation  separately awarded to Lessee for Lessee's
relocation  expenses and/or loss of Lessee's Trade  Fixtures.  In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above 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 $ Sep.  Agreement)  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
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 all liability with respect to the obligations and/or covenants under
this Lease  thereafter to be performed by the Lessor.  Subject to the foregoing,
the  obligations,  and/or  covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.

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

19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other  than late  charges,  not  received  by  Lessor  within  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 Brokers that it has made,
and is relying solely upon,  its own  investigation  as to the nature,  quality,
character and financial  responsibility  of the other Party to this Lease and as
to  the  nature,  quality  and  character  of  the  Premises.  Brokers  have  no
responsibility  with  respect  thereto or with  respect to any default or breach
hereof by either Party.

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 or delivering notices to
Lessee.  A copy of all  notices  required  or  permitted  to be given to  Lessor
hereunder  shall be  concurrently  transmitted  to such party or parties at such
addresses as Lessor may from time to time hereafter  designate by written notice
to Lessee.
     23.2 Any notice  sent by  registered  or  certified  mail,  return  receipt
requested,  shall be deemed  given on the date or delivery  shown on the receipt
card or if no delivery date is shown, the postmark  thereon.  If sent by regular
mail the notice shall be deemed given  forty-eight  (48) hours after the same is
addressed as required herein and mailed with postage prepaid.  Notices delivered
by United  States  Express Mail or overnight  courier that  guarantees  next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier.  If any notice is transmitted by
facsimile  transmission  or similar  means,  the same shall be deemed  served or
delivered upon telephone  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 of Breach by
Lessee of any  provision  hereof,  other  than the  failure of Lessee to pay the
particular rent so accepted.  Any payment given Lessor by Lessee may be accepted
by Lessor on  account  of moneys or  damages  due  Lessor,  notwithstanding  any
qualifying  statements  or conditions  made by Lessee in  connection  therewith,
which such statement and/or conditions shall be of no force or effect whatsoever
unless  specifically  agreed to in  writing  by Lessor at or before  the time of
deposit of such payment.

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

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26.  No Right To  Holdover.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof  beyond the  expiration or earlier  termination  of
this Lease.

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

28.  Covenants and  Conditions.  All  provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their  personal  representatives,  successors and assigns and be governed by the
laws of the State in which the Premises are located.  Any litigation between the
Parties hereto  concerning  this Lease shall be initiated in the county in which
the Premises are located.

30.  Subordination; Attornment; Non-Disturbance.
     30.1  Subordination.  This Lease and any  Option  granted  hereby  shall be
subject and subordinate to any ground lease,  mortgage,  dead 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 (1) 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-distrubance 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 agents shall
have the right to enter the Premises at any time,  in the case of an  emergency,
and  otherwise  at  reasonable  times for the  purpose  of  showing  the same to
prospective  purchasers,  lenders,  or  lessees,  and making  such  alterations,
repairs,  improvements  or additions to the Premises or to the building of which
they are a Part of, 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.  Lessees 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  of  the
contrary  in this  Lease. Lessor shall not be obligated to exercise any standard
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).  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  unreasonably  interfere  with the  conduct  of
Lessee's business.

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(e)  (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
provided, 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 rot constitute an  acknowledgement  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  signature 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,  condition,  and
provisions  on Lessee's  part to be  observed  and  performed  under this Lease,
Lessee  shall have quiet  possession  of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

39.  Options.
     39.1  Definition.  As used in this  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 or  involuntarily  assigned or exercised by any person or
entity other than said original Lessee while the original Lessee

                                                                 Initials CJL
                                                                          HP
GROSS                                PAGE 72

<PAGE>

is in full and actual  possession  of the Premises and without the  intention of
thereafter  assigning or  subletting.  The Options,  it any,  herein  granted to
Lessee are not  assignable,  either as a part of an  assignment of this Lease or
separately or apart therefrom, and no Option may be separated from this Lease in
any manner, by reservation or otherwise.
     39.3 Multiple Options. In the event that Lessee has any Multiple Options to
extend or renew this Lease, a later  Option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.
     39.4 Effect of Default on Options.
          (a) Lessee shall have no right  to exercise an Option, notwithstanding
any  provision  in the grant of Option to the  contrary;  (i)  during the period
commencing  with the giving of any notice of Default  under  Paragraph  13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any  monetary  obligation  due Lessor from Lessee is unpaid  (without  regard to
whether notice  thereof is given Lessee),  or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of 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 (3) of more  notices of Default  under  Paragraph  13.1 during any
twelve (12) 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 itself the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights and decications
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  Lessees  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,  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
PREMISE.

     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 Woodland Hills, CA         Executed at North Hollywood, CA
-----------------------------------    --------------------------------------
on  June   , 1994                      on   June 2, 1994
-----------------------------------    --------------------------------------
by LESSOR:                             by LESSEE:
           HAROLD PEASE                  FLIGHTWAYS MANUFACTURING, INC.
-----------------------------------    --------------------------------------
                                         A California Corporation
-----------------------------------    --------------------------------------
By     /s/ Harold Pease                By
-----------------------------------    --------------------------------------
Name Printed:   Harold Pease           Name Printed:  Chris Luhnow
-----------------------------------    --------------------------------------
Title:   Owner                         Title:  President
-----------------------------------    --------------------------------------

By                                     By
-----------------------------------    ---------------------------------------
Name Printed:                          Name Printed:
-----------------------------------    ---------------------------------------
Title:                                 Title:
-----------------------------------    ---------------------------------------
Address: 20600 Oaksboro Circle         Address: 11130 Sherman Way
-----------------------------------    ---------------------------------------
         Woodland Hills, CA 91364               North Hollywood, CA 91352
-----------------------------------    ---------------------------------------
Tel.No.(818)_____ Fax No.(  )______    Tel.No.(818)503-6400 Fax No.( )________


GROSS                                PAGE 

        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.


       (C) Copyright 1990-By American Industrial Real Estate Association.
               All rights reserved. No part of these works may be
              reproduced in any form without permission in writing.

                                                               FORM 105G-R-12/91
                                       73
<PAGE>

                               RENT ADJUSTMENT(S)

                                  ADDENDUM TO
                                 STANDARD LEASE

          Dated May 16, 1994
          By and Between (Lessor) HAROLD PEASE
                         (Lessee) FLIGHTWAYS MANUFACTURING, INC.
                                  A California Corporation

          Property Address:  7660 Densmore Avenue, Van Nuys, CA 91406

Paragraph 49

A.   RENT ADJUSTMENTS:

     The monthly rent for each month of the adjustment period(s) specified below
shall be increased using the method(s) indicated below:

(Check Method(s) to be Used and Fill in Appropriately)

[X]  1.    Cost of Living Adjustment(s)(COL)

     (a) On (Fill in COL Adjustment  Date(s):  December 1, 1995 and June 1, 1997
and December 1, ____ the monthly rent payable under  paragraph 1.5 ("Base Rent")
of the  attached  Lease shall be adjusted by the change,  if any,  from the Base
Month  specified  below,  in the  Consumer  Price  index of the  Bureau of Labor
Statistics  of the U.S.  Department  of Labor for (select  one): [ ] CPIW (Urban
Wage Earners and Clerical Workers) or [X] CPIU )All Urban Consumers),  for (Fill
in Urban Area) Los Angeles - Anaheim - Riverside. All Items (1982-1984 = 100), 
herein referred to as "C.P.I."

     (b) The monthly rent payable in  accordance  with  paragraph  A1(a) of this
Addendum shall be calculated as follows the Base Rent set forth in paragraph 1.5
of the attached Lease,  shall be multiplied by a fraction the numerator of which
shall be the C.P.I.  of the calendar month 2 (two) months prior to the months(s)
specified  in  paragraph  A1(a) above  during  which the  adjustment  is to take
effect,  and the  denominator of which shall be the C.P.I. of the calendar month
which is two (2) months prior to (select  one):  [X] the first month of the term
of this Lease as set forth in paragraph 1.3 ("Base Month") or [ ] (Fill in Other
"Base Month");  N/A. The sum so calculated shall constitute the new monthly rent
hereunder,  but in no event,  shall any such new  monthly  rent be less than the
rent payable for the month immediately preceding the date for rent adjustment.

     (c) In the event the compilation  and/or publication of the C.P.I. shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the C.P.I. shall be used to
make such calculation.  In the event that Lessor and Lessee cannot agree on such
alternative  index,  then the matter  shall be  submitted  for  decision  to the
American  Arbitration  Association  in  accordance  with the then  rules of said
association  and the  decision  of the  arbitrators  shall be  binding  upon the
parties.  The cost of said  Arbitrators  shall be paid  equally  by  Lessor  and
Lessee.



Initials: _______                                                  Initials: CJL
          _______                                                            HP

                               RENT ADJUSTMENT(S)
                                     Page 74

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.

Copyright American Industrial Real Estate Association.

<PAGE>





                         [THIS IS INTENTIONALLY BLANK]





Initials: _______                                                  Initials: CJL
          _______                                                            HP

                               RENT ADJUSTMENT(S)
                                     Page 75

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.

Copyright American Industrial Real Estate Association.


<PAGE>


                               OPTION(S) TO EXTEND

                                  ADDENDUM TO
                                 STANDARD LEASE

          Dated May 16, 1994
          By and Between (Lessor) HAROLD PEASE
                         (Lessee) FLIGHTWAYS MANUFACTURING, INC.
                                  A California Corporation

          Property Address:  7660 Densmore Avenue, Van Nuys, CA 91406

Paragraph 50

A.     OPTION(S) TO EXTEND:

       Lessor hereby grants to Lessee the option to extend the term of the Lease
for 1  additional  60 month period  commencing  when the prior term expires upon
each and all of the following terms and conditions.

 (i) Lessee  gives to Lessor,  and Lessor  actually  receives on a date which is
prior to the date that the option  period would  commence (if  exercised)  by at
least four and not more than six months, a written notice of the exercise of the
option(s)  to extend  this  Lease for said  additional  term(s),  time  being of
essence.  If said notification of the exercise of said option(s) is (are) not so
given and received, the option(s) shall automatically expire; said option(s) may
(if more than one) only be exercised consecutively;

(ii) The provisions of paragraph 39, including the provision relating to default
of Lessee  set forth in  paragraph  39.4 of this  Lease  are  conditions  of the
Option;

 (iii) All of the terms and  conditions of this Lease except where  specifically
modified by this option shall apply;

 (iv) The monthly rent for each month of the option  period shall be  calculated
as follows, using the method(s) indicated below:

(Check Method(s) to be Used and Fill in Appropriately)

[X]    1.   Cost of Living Adjustment(s)(COL)

       (a) On (Fill in COL  Adjustment  Date(s):  August,  1, 1999,  February 1,
2001,  August 1,  2002 and  February  1, 2004 the  monthly  rent  payable  under
paragraph  1.5 ("Base  Rent") of the  attached  Lease  shall be  adjusted by the
change, if any, from the Base Month specified below, in the Consumer Price index
of the Bureau of Labor  Statistics  of the U.S.  Department of Labor for (select
one): [ ] CPIW (Urban Wage Earners and Clerical  Workers) or [X] CPIU )All Urban
Consumers),  for (Fill in Urban  Area) Los  Angeles - Anaheim -  Riverside.  All
Items (1982-1984 = 100), herein referred to as "C.P.I."

      (b) The monthly rent payable in accordance  with  paragraph  A1(a) of this
Addendum shall be calculated as follows the Base Rent set forth in paragraph 1.5
of the attached Lease,  shall be multiplied by a fraction the numerator of which
shall be the C.P.I.  of the calendar month 2 (two) months prior to the months(s)
specified  in  paragraph  A1(a) above  during  which the  adjustment  is to take
effect,  and the  denominator of which shall be the C.P.I. of the calendar month
which is two (2) months prior to (select  one):  [X] the first month of the term
of this Lease as set forth in paragraph 1.3 ("Base Month") or [ ] (Fill in Other
"Base Month");  N/A. The sum so calculated shall constitute the new monthly rent
hereunder,  but in no event,  shall any such new  monthly  rent be less than the
rent payable for the month immediately preceding the date for rent adjustment.

      (c) In the event the compilation and/or publication of the C.P.I. shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the C.P.I. shall be used to
make such calculation.  In the event that Lessor and Lessee cannot agree on such
alternative  index,  then the matter  shall be  submitted  for  decision  to the
American  Arbitration  Association  in  accordance  with the then  rules of said
association  and the  decision  of the  arbitrators  shall be  binding  upon the
parties.  The cost of said  Arbitrators  shall be paid  equally  by  Lessor  and
Lessee.


Initials: _______                                                  Initials: CJL
          _______                                                            HP

                               OPTIONS(S) TO EXTEND
                                     Page 76

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.

Copyright American Industrial Real Estate Association.

<PAGE>







                         [THIS IS INTENTIONALLY BLANK]








Initials: _______                                                  Initials: CJL
          _______                                                            HP

                               OPTIONS(S) TO EXTEND
                                     Page 77

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.

Copyright American Industrial Real Estate Association.
<PAGE>


                                    ADDENDUM

ADDENDUM TO THE LEASE DATED MAY 16, 1994, BY AND BETWEEN  HAROLD PEASE AS LESSOR
AND  FLIGHTWAYS  MANUFACTURING,  INC. AS LESSEE FOR THE  PREMISES  KNOWN AS 7660
DENSMORE AVENUE, VAN NUYS, CA 91406.

49.  COST OF LIVING ADJUSTMENTS: See Addendum #49 attached hereto.

50.  OPTION TO EXTEND: See Addendum #50 attached hereto.

51.  CONDITION  AND  AVAILABILITY  OF  ELECTRICAL  SERVICES:   Lessee  is  given
     possession  of the  Premises  with  the  understanding  that  all  existing
     electrical  services may contain  amperage and power  services panel within
     the Premises and/or on the marketing brochures prepared by Broker. However,
     Broker is unable to confirm,  guarantee or substantiate  that such amperage
     or power services are located  within such  electrical  service  panel,  or
     supply to the subject  service,  and Lessee  agrees to confirm the presence
     and/or  the   availability  of  such  electrical   services  with  Lessee's
     electrical  contractor  and/or with the City of Los Angeles or The Southern
     California Edison Company, or such applicable utilities service company and
     shall   hold   Broker's   harmless   from  any  such   electrical   service
     insufficiencies that may exist.

52.  SECURITY  DEPOSIT  REBATE:  Provided Lessee is not then, or has not been in
     default or any obligation, term or condition under this Lease, Lessor shall
     apply one (1) month of the Security Deposit to the thirteenth  (13th) month
     Base Rent and one (1) month to the twenty-fifth (25th) month Base Rent.

53.  LESSOR UTILIZATION OF METAL BUILDING: For the Term hereof, or any extension
     thereof,  Lessor  shall  retain for its own use a 20' x 20'  portion of the
     metal  building on the east side of the Premises  (the  subject  portion is
     demised  form the balance of the  building).  Lessor is granted full access
     without limitation  vis-a-vis time or days of the week and a locking system
     will be arranged to allow both Parties access at all times.

54.  NOTICE  TO OWNERS  AND  PROSPECTIVE  TENANTS  AND  BUYERS OF REAL  PROPERTY
     REGARDING THE AMERICANS WITH DISABILITIES ACT

     a.   Please be  advised that  an owner or  tenant of real  property  may be
          subject to the Americans  With  Disabilities  Act (ADA), a Federal Law
          codified at 42 USC Section 12101 et seq. Among other  requirements  of
          the ADA  that  could  apply  to your  property,  Title  III of the ADA
          requires  owners  and  tenants of  "public  accommodations"  to remove
          barriers to access by disabled  persons and provide  auxiliary aid and
          services for hearing, vision or speech impaired persons by January 26,
          1992.  The  regulations  under Title III of the ADA are codified at 28
          CFR Part 36.

     b.   We  recommend  that  you  and  your  attorney  review  the ADA and the
          regulations,  and, if  appropriate,  your  proposed  lease or purchase
          agreement, to determine if this law would apply to you, and the nature
          of the requirements.  These are legal issues.  You are responsible for
          condusting your own independent  investigation of these issues. Delphi
          Business Properties cannot give you legal advice on these issues.

     c.   Lessee shall be  responsible,  at it's sole cost and expense,  for any
          and all required alterations to the Premises causes by Lessee's use or
          actions.

                                                                  Initials: CJL
                                                                            HP

                                       78
<PAGE>

55.  NOTICE  TO  BUYERS,  TENANTS  AND  OWNERS  CONCERNING  HAZARDOUS  WASTES OR
     SUBSTANCES AND UNDERGROUND STORAGE TANKS:

                 THIS IS AN IMPORTANT NOTICE - READ IT CAREFULLY

     a.   Under recently  passed  Federal  and State  laws  governing  the  use,
          storage, handling, cleanup, removal and disposal of "hazardous  wastes
          or  substances",  an owner,  buyer,  tenant  and  other  users of real
          property  can be held  responsible  for the cost to clean up hazardous
          wastes,  for the  payment of damages and for the  modification  of the
          real  property to conform  with  environmental safety  standards  (for
          example:  the  removal of  asbestos  and the  closure  of  underground
          storage tanks. "Hazardous wastes  and substances" includes, but is not
          limited to: any petroleum based products,  paints and solvents,  lead,
          cyanide,  DDT, printing inks, acids,  pesticides,  ammonium compounds,
          asbestos, PCBs and toxic chemical products.

     b.   Since these laws  affect every kind of real property, it  is essential
          that  legal and  technical  advice  be  obtained  by you to  determine
          whether the laws have been complied  with,  and what, if anything,  is
          required  to be done  in  connection  with  the  proposed  transaction
          involving  the  real  property  described  above,  to  minimized  your
          liability.  Such professionals as attorneys,  engineers and geologists
          specializing in toxic waste matters are among those you should consult
          to obtain a clear  understanding of the condition of the real property
          and your rights and  obligations  under the  hazardous  waster laws in
          connection with this transaction.

WE STRONGLY RECOMMEND THAT YOU RETAIN LEGAL,  ENGINEERING AND GEOLOGICAL EXPERTS
TO  ADVISE   YOU AS  WILL AS ANY  OTHER  EXPERTS  WHICH  YOU OR  THEY  MAY  DEEM
APPROPRIATE.

     c.   Please note that Broker  must disclose to  all prospective  parties to
          this  transaction  any knowledge we actually  possess  concerning  the
          condition of the real  property  described  above and the existence of
          hazardous  wastes,  substances,  or  underground  storage tanks on the
          property.  In addition,  Broker nor any of its employees or agents has
          made any investigations or obtained reports regarding the condition of
          the property or the past or present  existence of hazardous  wastes or
          substances on the property.

     d.   Therefore, for the purposes of this transaction, Broker nor any of its
          employees or agents makes any  representation to any prospective buyer
          or tenant concerning the condition of the property or the existence or
          nonexistence of hazardous wastes or substances, or underground storage
          tanks on the property.

     e.   If you own the real property described above, you are  hereby notified
          that prospective purchasers or tenants may feel that the potential for
          liability for remedial costs  necessitates an  environmental  audit or
          investigation of the  property  prior to closing in order to  discover
          whether the nature and/or quantity of, existence,  use, manufacture or
          effect of any hazardous  substances on the property renders it subject
          to Federal, State or local regulation,  investigation,  remediation or
          removal as potentially  injurious to public health or welfare.  Broker
          hereby  disclaims  any  liability for damages to you stemming from the
          initiation, completion or result of any such investigation.


                                                                  Initials: CJL
                                                                          HP
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