AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

            STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
                (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1.       Basic Provisions ("Basic Provisions").

         1.1 Parties:  This Lease  ("Lease")  dated for reference  purposes only
August 21,  1998 is made by and  between  Beardsley  & I-17  L.L.C.,  an Arizona
limited liability company  ("Lessor") and Gum Tech  International,  Inc., a Utah
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 as 510 East University Drive, Phoenix, Arizona 85004 located in the County
of Maricopa,  State of Arizona, and generally described as (describe briefly the
nature of the property and, if  applicable,  the  "Project",  if the property is
located  within  a  Project)  a  31,460  square  foot   manufacturing   facility
("Premises"). (See also Paragraph 2).

         1.3 Term: 5 years and 0 months  ("Original Term") commencing August 21,
1998 ("Commencement  Date") and ending August 31, 2003 ("Expiration Date"). (See
also Paragraph 3).

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

         1.5 Base Rent:  $10,067.20 per month ("Base Rent"),  payable on the 1st
day of each month  commencing  September 1, 1998. (See also Paragraph 4). |_| 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: $10,258.47 (inclusive of 1.9% rental
tax) as Base Rent for the period August 21, 1998 through September 30, 1998.

         1.7  Security  Deposit:  $20,000.00  ("Security  Deposit").  (See  also
Paragraph 5).

         1.8  Agreed  Use:  General  office  administration,  manufacturing  and
storage of gum products and for no other purpose. (See also Paragraph 6).

         1.9 Insuring  Party:  Lessor is the "Insuring  Party" unless  otherwise
stated herein. (See also Paragraph 8).

         1.10 Real Estate Brokers: (See also Paragraph 15).

                  (a)   Representation:   The  following   real  estate  brokers
(collectively,   the  "Brokers")  and  brokerage  relationships  exist  in  this
transaction (check applicable boxes):
transaction (check applicable boxes):
<TABLE>
<S>                                   <C>
|X|CORE/Jackson - ONCOR International represents Lessor exclusively ("LESSOR'S BROKER");
|_|__________________________________ represents Lessee exclusively ("LESSEE'S BROKER");or
|_|__________________________________ represents both Lessor and Lessee ("Dual Agency").
</TABLE>
                  (b) Payment to Brokers:  Upon  execution  and delivery of this
Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their
separate  written  agreement (or if there is no such  agreement,  the sum of per
separate  agreement% of the total Base Rent for the brokerage  services rendered
by said Broker).

         1.11  Guarantor.  The obligations of the Lessee under this Lease are to
be guaranteed by NA ("Guarantor"). (See also Paragraph 37).

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         1.12 Addenda and  Exhibits.  Attached  hereto is an Addendum or Addenda
consisting of  Paragraphs 1 through 3 and Exhibits A, 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 size set forth in this Lease, or that may have
been used in calculating  rental, is an approximation which the Parties agree is
reasonable  and the rental based  thereon is not subject to revision  whether or
not the actual size is more or less.

         2.2 Condition.  Lessor shall deliver the Premises to Lessee broom clean
and free of  debris  on the  Commencement  Date or the  Early  Possession  Date,
whichever  first occurs  ("Start  Date"),  and, so long as the required  service
contracts  described  in Paragraph  7.1(b)  below are obtained by Lessee  within
thirty  (30)  days  following  the  Start  Date,   warrants  that  the  existing
electrical,  plumbing, fire sprinkler,  lighting,  heating,  ventilating and air
conditioning  systems  ("HVAC"),  loading  doors,  if any,  and all  other  such
elements in the Premises,  other than those  constructed by Lessee,  shall be in
good operating  condition on said date and that the  structural  elements of the
roof,  bearing  walls and  foundation  of any  buildings  on the  Premises  (the
"Building")  shall be free of material  defects.  If a non-compliance  with said
warranty exists as of the Start Date,  Lessor shall, as Lessor's sole obligation
with  respect  to such  matter,  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, after the Start Date, Lessee does not give Lessor written
notice of any  non-compliance  with this warranty within: (i) one year as to the
surface of the roof and the  structural  portions of the roof,  foundations  and
bearing  walls,  (ii) six (6) months as to the HVAC  systems,  (iii) thirty (30)
days as to the remaining systems and other elements of the Building,  correction
of such  non-compliance  shall be the obligation of Lessee at Lessee's sole cost
and expense.

         2.3 Compliance.  Lessor warrants that the  improvements on the Premises
comply with all applicable laws,  covenants or restrictions of record,  building
codes, regulations,  and ordinances ("Applicable Requirements") in effect on the
Start 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.  NOTE:  Lessee  is  responsible  for
determining  whether or not the zoning is appropriate for Lessee's intended use,
and acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said  warranty,  Lessor  shall,  except as otherwise
provided,  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 Start
Date,  correction of that  non-compliance  shall be the  obligation of Lessee at
Lessee's sole cost and expense.  If the  Applicable  Requirements  are hereafter
changed (as opposed to being in existence at the Start Date,  which is addressed
in Paragraph  6.2(e) below) so as to require  (during the term of this Lease the
construction of an addition to or an alteration of the Building, the remediation
of any Hazardous Substance,  or the reinforcement or other physical modification
of the Building  ("Capital  Expenditure"),  Lessor and Lessee shall allocate the
cost of such work as follows:

                  (a)  Subject  to  Paragraph  2.3(c)  below,  if  such  Capital
Expenditures  are  required  as a result of the  specific  and unique use of the
Premises by Lessee as compared with uses by tenants in general,  Lessee shall be
fully responsible for the cost thereof,  provided,  however that if such Capital
Expenditure is required during the last two (2) years of this Lease and the cost
thereof  exceeds six (6) months' Base Rent,  Lessee may instead  terminate  this
Lease unless  Lessor  notifies  Lessee,  in writing,  within ten (10) days after
receipt of Lessee's  termination notice that Lessor has will pay for the Capital
Expenditure.  If Lessee elects  termination,  Lessee shall immediately cease the
use of the  Premises  which  requires  such Capital  Expenditure  and deliver to
Lessor  written notice  specifying a termination  date at least ninety (90) days
thereafter.  Such termination date shall,  however,  in no event be earlier than
the last day that Lessee could legally utilize the Premises  without  commencing
such Capital Expenditure.
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                  (b) If  such  Capital  Expenditure  is not the  result  of the
specific  and  unique use of the  Premises  by Lessee  (such as,  governmentally
mandated seismic modifications), then Lessor shall make the modifications at its
cost  and  expense;  provided,  however,  that if such  Capital  Expenditure  is
required  during the last two years of this Lease or exceeds six months  Rental,
Lessor shall have the option to terminate this Lease upon ninety (90) days prior
written notice to Lessee unless Lessee notifies Lessor,  in writing,  within ten
(10) days after receipt of Lessor's  termination notice that Lessee will pay for
such Capital  Expenditure.  If Lessor does not elect to terminate,  and fails to
tender its share of any such Capital Expenditure,  Lessee may advance such funds
and deduct same,  with  Interest,  from Rent until  Lessor's share of such costs
have been fully paid. If Lessee is unable to finance  Lessor's  share, or if the
balance  of the Rent due and  payable  for the  remainder  of this  Lease is not
sufficient to fully reimburse  Lessee on an offset basis.  Lessee shall have the
right to terminate this Lease upon thirty (30) days written notice to Lessor.

                  (c)  Notwithstanding  the  above,  the  provisions  concerning
Capital  Expenditures are intended to apply only to  non-voluntary,  unexpected,
and  new  Applicable  Requirements.  If the  Capital  Expenditures  are  instead
triggered by Lessee as a result of an actual or proposed  change in use,  change
in intensity of use, or  modification  to the Premises  then, and in that event,
Lessee shall be fully  responsible  for the cost  thereof,  and Lessee shall not
have any right to terminate this Lease.

         2.4 Acknowledgments.  Lessee acknowledges that: (a) it has been advised
by Lessor and/or  Brokers to satisfy itself with respect to the condition of the
Premises  (including but not limited to the electrical,  HVAC and fire sprinkler
systems,  security,   environmental  aspects,  and  compliance  with  Applicable
Requirements),  and their  suitability for Lessees  intended use, (b) Lessee has
made such investigation as it deems necessary with reference to such matters and
assumes all  responsibility  therefor as the same relate to its occupancy of the
Premises,  and (c) neither Lessor,  Lessor's agent,  nor any Broker has made any
oral or written representations or warranties with respect to said matters other
than as set forth in this Lease.  In addition,  Lessor  acknowledges  that:  (a)
Broker has made no representations,  promises or warranties  concerning Lessee's
ability to honor the Lease or suitability to occupy the Premises,  and (b) it is
Lessor's sole  responsibility  to investigate  the financial  capability  and/or
suitability of all proposed tenants.

         2.5 Lessee as Prior  Owner/Occupant.  The warranties  made by Lessor in
Paragraph  2 shall be of no force or  effect if  immediately  prior to the Start
Date  Lessee was the owner or occupant of the  Premises.  In such event,  Lessee
shall be responsible for any necessary corrective work.

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
(including  but not limited to the  obligations  to pay Real Property  Taxes and
insurance premiums and to maintain the Premises),  shall,  however, be in effect
during such period.  Any such early  possession  shall not affect the Expiration
Date.

         3.3 Delay In  Possession.  Lessor  agrees to use its best  commercially
reasonable  efforts  to  deliver  possession  of the  Premises  to Lessee by the
Commencement  Date.  If,  despite  said  efforts,  Lessor is  unable to  deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease, Lessee shall not, however,
be  obligated  to pay Rent or perform  its other  obligations  until it receives
possession of the Premise. If possession is not delivered within sixty (60) days
after the  Commencement  Date,  Lessee may, at its option,  by notice in writing
within ten (10) days after the end of such sixty (60) day  period,  cancel  this
Lease,  in which event the Parties  shall be  discharged  from all  obligations,
hereunder. If such written notice is not received by Lessor within said ten (10)
day  period,  Lessee's  right to cancel  shall  terminate.  Except as  otherwise
provided,  if  possession is not tendered to Lessee by the Start Date and Lessee
does not terminate this Lease,  as aforesaid,  any period of rent abatement that
Lessee  would  otherwise  have  enjoyed  shall run from the date of  delivery of
possession and continue for a period equal to what
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Lessee would  otherwise have enjoyed under the terms hereof,  but minus any days
of delay  caused  by the acts or  omissions  of  Lessee.  If  possession  of the
Premises is not delivered  within four (4) months after the  Commencement  Date,
this Lease shall  terminate  unless other  agreements are reached between Lessor
and Lessee, in writing.

         3.4  Lessee  Compliance.   Lessor  shall  not  be  required  to  tender
possession of the Premises to Lessee until Lessee  complies with its  obligation
to provide  evidence of  insurance  (Paragraph  8.5).  Pending  delivery of such
evidence,  Lessee shall be required to perform all of its obligations under this
Lease  from  and  after  the  Start  Date   including   the   payment  of  Rent,
notwithstanding Lessor's election to withhold possession pending receipt of such
evidence  of  insurance.  Further,  if Lessee is  required  to perform any other
conditions  prior to or  concurrent  with the Start  Date,  the Start Date shall
occur but Lessor may elect to  withhold  possession  until such  conditions  are
satisfied.

4.       Rent.

         4.1. Rent Defined.  All monetary  obligations of Lessee to Lessor under
the terms of this Lease (except for the Security  Deposit) are deemed to be rent
("Rent").

         4.2  Payment.  Lessee  shall  cause  payment of Rent to be  received by
Lessor in lawful money of the United States, without offset or deduction (except
as  specifically  permitted in this Lease),  on or before the day on which it is
due.  Rent 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
said month. Payment of Rent shall be made to Lessor at its address stated herein
or to such other  persons or place as Lessor may from time to time  designate in
writing.  Acceptance  of a payment  which is less than the amount then due shall
not be a waiver of Lessor's  rights to the balance of such Rent,  regardless  of
Lessor's endorsement of any check so stating.

5.       Security  Deposit.  Lessee  shall  deposit  with Lessor upon  execution
hereof the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this  Lease,  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,  expense,  loss or damage 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  additional  monies with Lessor  sufficient to restore
said  Security  Deposit to the full amount  required by this Lease.  If the Base
Rent increases during the term of this Lease,  Lessee shall upon written request
from Lessor,  deposit  additional moneys with Lessor so that the total amount of
the  Security  Deposit  shall  at all  times  bear the  same  proportion  to the
increased  Base Rent as the initial  Security  Deposit  bore to the initial Base
Rent.  Should the Agreed Use be amended to accommodate a material  change in the
business of Lessee or to accommodate a sublessee or assignee.  Lessor shall have
the right to increase the Security Deposit to the extent necessary,  in Lessor's
reasonable  judgment,  to  account  for any  increased  wear and  tear  that the
Premises may suffer as a result thereof. If a change in control of Lessee occurs
during this Lease and following  such chance the  financial  condition of Lessee
is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit
such additional  monies with Lessor as shall be sufficient to cause the Security
Deposit  to be at a  commercially  reasonable  level  based  on said  change  in
financial  condition.  Lessor shall not be required to keep the Security Deposit
separate  from its  general  accounts.  Within  fourteen  (14)  days  after  the
expiration or termination of this Lease,  if Lessor elects to apply the Security
Deposit only to unpaid Rent,  and  otherwise  within  thirty (30) days after the
Premises  have been vacated  pursuant to Paragraph  7.4(c)  below,  Lessor shall
return that  portion of the Security  Deposit not used or applied by Lessor.  No
part of the Security  Deposit shall be  considered to be held in trust,  to bear
interest  or to be  prepayment  for any  monies to be paid by Lessee  under this
Lease.

6.       Use.

         6.1 Use.  Lessee shall use and occupy the Premises  only for the Agreed
Use, or any other legal use which is reasonably  comparable thereto,  and for no
other purpose. Lessee shall not use or
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permit the use of the  Premises in a manner that is  unlawful,  creates  damage,
waste or a nuisance,  or that  disturbs  owners  and/or  occupant  of, or causes
damage to  neighboring  properties.  Lessor shall not  unreasonably  withhold or
delay its consent to any written  request for a modification  of the Agreed Use,
so long as the same will not impair the structural integrity of the improvements
on  the  Premises  or the  mechanical  or  electrical  systems  therein,  is not
significantly  more  burdensome  to the  Premises.  If Lessor elects to withhold
consent,  Lessor  shall  within five (5)  business  days after such request give
written  notification  of same,  which notice shall  include an  explanation  of
Lessor's 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,  or waste
whose presence, use, manufacture,  disposal,  transportation, or release, either
by itself or in combination with other materials expected to be on the Premises,
is either:  (i) potentially  injurious to the public health,  safety or welfare,
the environment or the Premises, (ii) regulated or monitored by any governmental
authority,   or  (iii)  a  basis  for  potential  liability  of  Lessor  to  any
governmental  agency or third party under any  applicable  statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum,  gasoline, and/or crude oil or any products, by-products or fractions
thereof.  Lessee shall not engage in any  activity in or on the  Premises  which
constitutes a Reportable Use of Hazardous  Substances  without the express prior
written consent of Lessor and timely  compliance (at Lessee's  expense) with all
Applicable Requirements.  "Reportable Use"shall mean (i) the installation or use
of any above or below ground  storage  tank,  (ii) the  generation,  possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit  from,  or with  respect  to which a report,  notice,  registration  or
business plan is required to be filed with any  governmental  authority,  and/or
(iii) the  presence at the  Premises of a Hazardous  Substance  with  respect to
which any  Applicable  Requirements  requires  that a notice be given to persons
entering or occupying the Premises or  neighboring  properties.  Notwithstanding
the foregoing,  Lessee may use any ordinary and customary  materials  reasonably
required to be used in the normal  course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements,  is not a Reportable Use, and
does not expose the Premises or neighboring property to any unreasonable risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may  condition  its consent to any  Reportable  Use upon  receiving  such
additional  assurances as Lessor  reasonably  deems necessary to protect itself,
the public, the Premises and/or the environment  against damage,  contamination,
injury and/or  liability,  including,  but not limited to, the installation (and
removal  on  or  before  Lease   expiration   or   termination)   of  protective
modifications  (such as concrete  encasements)  and/or  increasing  the Security
Deposit.

                  (b) Duty to Inform Lessor.  If Lessee knows, or has reasonable
cause to  believe,  that a  Hazardous  Substance  has come to be located in, on,
under or about the Premises,  other than as  previously  consented to by Lessor,
Lessee shall immediately give written notice of such fact to Lessor, and provide
Lessor with a copy of any report,  notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance.

                  (c) Lessee  Remediation.  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)  except in
compliance with applicable laws 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 or  neighboring
properties,  that  was  caused  or  materially  contributed  to  by  Lessee,  or
pertaining  to or involving any  Hazardous  Substance  brought onto the Premises
during the term of this Lease, by or for Lessee, or any third party.

                  (d) Lessee Indemnification. Lessee shall indemnity, defend and
hold Lessor, its agents, employees,  lenders and ground lessor, if any, harmless
from  and  against  any  and all  loss of  rents  and/or  damages,  liabilities,
judgments,  claims,  expenses,  penalties,  and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided,  however, that Lessee shall have no
liability under this
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Lease with respect to underground migration of any Hazardous Substance under the
Premises from adjacent properties).  Lessee's obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or
the environment  created or suffered by Lessee,  and the cost of  investigation,
removal,  remediation,  restoration  and/or  abatement,  and shall  survive  the
expiration or termination of this Lease. No termination, cancellation or release
agreement  entered  into by Lessor  and Lessee  shall  release  Lessee  from its
obligations  under this  Lease with  respect  to  Hazardous  Substances,  unless
specifically so agreed by Lessor in writing at the time of such agreement.

                  (e)  Lessor  Indemnification.  Lessor and its  successors  and
assigns shall indemnify,  defend,  reimburse and hold Lessee,  its employees and
lenders, harmless from and against any and all environmental damages,  including
the cost of  remediation,  which existed as a result of Hazardous  Substances on
the Premises prior to the Start Date or which are caused by the gross negligence
or willful misconduct of Lessor, its agents or employees.  Lessor's obligations,
as and when required by the Applicable  Requirements,  shall include, but not be
limited to, the cost of investigation,  removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

                  (f) Investigations  and Remediations.  Lessor shall retain the
responsibility and pay for any  investigations or remediation  measures required
by governmental  entities having  jurisdiction  with respect to the existence of
Hazardous  Substances  on the  Premises  prior to the Start  Date,  unless  such
remediation  measure  is  required  as  a  result  of  Lessee's  use  (including
"Alterations",  as defined in paragraph 7.3(a) below) of the Premises,  in which
event Lessee shall be responsible for such payment. Lessee shall cooperate fully
in any such activities at the request of Lessor,  including  allowing Lessor and
Lessor's agents to have reasonable access to the Premises at reasonable times in
order to carry out Lessor's investigative and remedial responsibilities.

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

         6.3  Lessee's  Compliance  with  Applicable  Requirements.   Except  as
otherwise provided in this Lease. Lessee shall, at Lessee's sole expense, fully,
diligently  and in a  timely  manner,  materially  comply  with  all  Applicable
Requirements,  the requirements of any applicable fire insurance  underwriter or
rating bureau,  and the reasonable  recommendations of Lessor's engineers and/or
consultants  which  relate in any  manner  to the  Premises,  without  regard to
whether said  requirements are now in effect or become effective after the Start
Date.  Lessee  shall,  within ten (10) days after  receipt of  Lessor's  written
request,  provide  Lessor with copies of all  permits and other  documents,  and
other   information   evidencing   Lessee's   compliance   with  any  Applicable
Requirements  specified by Lessor,  and shall  immediately upon receipt,  notify
Lessor in writing (with copies of any documents  involved) of any  threatened or
actual claim, notice, citation, warning,
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                                        6
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complaint  or report  pertaining  to or  involving  the failure of Lessee or the
Premises to comply with any Applicable Requirements.

         6.4 Inspection: Compliance. Lessor and Lessor's "Lender" (as defined in
Paragraph 30 below) and consultants  shall have the right to enter into Premises
at any time, in the case of an emergency, and otherwise at reasonable times with
reasonable advance notice to Lessee, for the purpose of inspecting the condition
of the Premises and for verifying compliance by Lessee with this Lease. The cost
of any  such  inspections  shall  be paid  by  Lessor,  unless  a  violation  of
Applicable Requirements, or a contamination is found to exist or be imminent, or
the  inspection is requested or ordered by a governmental  authority  because of
suspected  environmental  contamination  or other  violations of applicable laws
caused by Lessee.  In such case,  Lessee shall upon request reimburse Lessor for
the  reasonable  cost  of such  inspections,  so  long  as  such  inspection  is
reasonably related to the violation or contamination.

7.       Maintenance;   Repairs,  Utility  Installations:   Trade  Fixtures  and
         Alterations.

         7.1      Lessee's Obligations.

                  (a) In General.  Subject to the  provisions  of Paragraph  2.2
(Condition),   2.3  (Compliance),   6.3  (Lessee's  Compliance  with  Applicable
Requirements),  7.2 (Lessor's  Obligations),  9 (Damage or Destruction),  and 14
(Condemnation),  Lessee  shall,  at Lessee's  sole  expense,  keep the Premises,
Utility  Installations,  and  Alterations  in good order,  condition  and repair
(whether or not the portion of the Premises requiring  repairs,  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,  but
not  limited  to,  all  equipment  or  facilities,  such as  plumbing,  heating,
ventilating,   air-conditioning,   electrical,   lighting  facilities,  boilers,
pressure  vessels,  fire  protection  system,   fixtures,  walls  (interior  and
exterior),  foundations,  ceilings,  roofs, floors, windows, doors, plate glass,
skylights, landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, or adjacent to the Premises.  Lessee,  in
keeping the Premises in good order,  condition  and repair,  shall  exercise and
perform good maintenance  practices,  specifically including the procurement and
maintenance  of the  service  contracts  required  by  Paragraph  7.1(b)  below.
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. Lessee shall, during the term of this
Lease, keep the exterior  appearance of the Building in a first-class  condition
consistent  with  the  exterior   appearance  of  other  similar  facilities  of
comparable age and size in the vicinity, including, when necessary, the exterior
repainting  of the  Building,  damage  from  normal  wear and tear and  casualty
excepted.

                  (b) Service Contracts. Lessee shall, at Lessee's sole expense,
procure and maintain  contracts,  with copies to Lessor,  in customary  form and
substance  for,  and  with  contractors  specializing  and  experienced  in  the
maintenance of the following equipment and improvements  ("Basic Elements"),  if
any,  if and when  installed  on the  Premises:  (i) HVAC  equipment,  (ii) fire
extinguishing  systems,  including  fire alarm  and/or  smoke  detection,  (iii)
landscaping and irrigation systems, (iv) roof covering and drains, (v) driveways
and parking lots, (vi)  clarifiers  (vii) basic utility feed to the perimeter of
the Building, and (viii) any other equipment, if reasonably required by Lessor.

                  (c) Replacement. Subject to Lessee's indemnification of Lessor
as set forth in Paragraph 8.7 below,  and without  relieving Lessee of liability
resulting  from  Lessee's  failure to  exercise  and  perform  good  maintenance
practices,  if the Basic  Elements  described  in  Paragraph  7.1 (b)  cannot be
repaired other than at a cost which is in excess of 50% of the cost of replacing
such Basic Elements,  then such Basic Elements shall be replaced by Lessor,  and
the cost thereof shall be prorated  between the Parties and Lessee shall only be
obligated to pay, each month during the remainder of the term of this Lease,  on
the  date  on  which  Base  Rent is due,  an  amount  equal  to the  product  of
multiplying the cost of such  replacement by a fraction,  the numerator of which
is one, and the  denominator of which is the number of months of the useful life
of such replacement as such useful life is specified  pursuant to Federal income
tax regulations or guidelines for depreciation
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                                        7
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thereof (including  interest on the unamortized  balance as is then commercially
reasonable in the judgment of Lessor's  accountants),  with Lessee reserving the
right to prepay its obligation at any time.

         7.2 Lessor's Obligations. Subject to the provisions of 2.2 (Condition),
2.3  (Compliance),  9  (Damage  or  Destruction)  and 14  (Condemnation),  it is
intended by the Parties  hereto  that Lessor have no  obligation,  in any manner
whatsoever,  to repair and maintain the Premises,  or the equipment therein, all
of which  obligations are intended to be that of the Lessee. 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,  and they  expressly
waive the benefit of any statute now or  hereafter in effect to the extent it is
inconsistent with the terms of this Lease.

         7.3      Utility Installations; Trade Fixtures; Alterations.

                  (a)   Definitions;   Consent   Required.   The  term  "Utility
Installations"  refers to all floor  and  window  coverings,  air  lines,  power
panels,   electrical   distribution,   security  and  fire  protection  systems,
communication systems, lighting fixtures, HVAC equipment,  plumbing, and fencing
in or on 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,  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 pursuant to Paragraph 7.4(a). Lessee shall not make any Alterations or
Utility  Installations  to the Premises  without Lessor's prior written consent.
Lessee may, however,  make non-structural  Utility Installations to the interior
of the  Premises  (excluding  the roof)  without such consent but upon notice to
Lessor,  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 this Lease as extended does not exceed $50,000 in
the aggregate or $10,000 in any one year.

                  (b) Consent.  Any  Alterations or Utility  Installations  that
Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be deemed
conditioned upon Lessee's:  (i) acquiring all applicable  governmental  permits,
(ii)  furnishing  Lessor  with  copies  of both the  permits  and the  plans and
specifications  prior to commencement of the work, and (iii) compliance with all
conditions  of said permits and other  Applicable  Requirements  in a prompt and
expeditious manner. Any Alterations or Utility  Installations shall be performed
in a  workmanlike  manner  with  good and  sufficient  materials.  Lessee  shall
promptly upon completion furnish Lessor with as-built plans and  specifications.
For work which costs an amount equal to the greater of one month's Base Rent, or
$10,000,  Lessor may  condition  its consent  upon  Lessee  providing 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.

                  (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
mechanic's or materialmen's  lien against the Premises or any interest  therein.
Lessee  shall  give  Lessor  not less  than ten (10)  days  notice  prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the
right to post  notices  of  non-responsibility.  If  Lessee  shall  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. If Lessor shall require,  Lessee shall furnish a
surety  bond 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.  If Lessor  elects to  participate  in any such  action,  Lessee shall pay
Lessor's attorneys' fees and costs.
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                                        8
<PAGE>
         7.4      Ownership; Removal; Surrender; and Restoration.

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

                  (b)  Removal.  By  delivery  to Lessee of written  notice from
Lessor not earlier than ninety (90) and not later than thirty (30) days prior to
the end of the term of this  Lease.  Lessor may  require  that any or all Lessee
Owned  Alterations  and Utility  Installations  be removed by the  expiration or
termination  of this Lease provided that Lessor may not require Lessee to remove
any  Alterations or Utility  Installations  consented to by Lessor unless Lessor
notified  Lessee in writing at the time it gave its consent that Lessor reserved
the right to require Lessee to remove such Alterations or Utility Installations.
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.

                  (c) Surrender/Restoration. Lessee shall surrender the Premises
by the  Expiration  Date  or  any  earlier  termination  date,  with  all of the
improvements,  parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair,  ordinary wear and tear and
damage from casualty  excepted.  "Ordinary  wear and tear" shall not include any
damage or  deterioration  that would  have been  prevented  by good  maintenance
practice.  Lessee  shall  repair  any  damage  occasioned  by the  installation,
maintenance  or removal  of Trade  Fixtures.  Lessee  Owned  Alterations  and/or
Utility Installations,  furnishings, and equipment 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 groundwater  contaminated by Lessee.  Trade
fixtures shall remain the property of Lessee and shall be removed by Lessee. The
failure  by Lessee to timely  vacate the  Premises  pursuant  to this  Paragraph
7.4(c) without the express written consent of Lessor shall constitute a holdover
under the provisions of Paragraph 26 below.

8.       Insurance; Indemnity.

         8.1 Payment For Insurance.  Lessee shall pay for all insurance required
under  Paragraph 8 except to the extent of the cost  attributable  to  liability
insurance  carried by Lessor under Paragraph  8.2(b) in excess of $2,000,000 per
occurrence.  Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term.  Payment shall
be made by  Lessee to  Lessor  within  ten (10)  days  following  receipt  of an
invoice.

         8.2      Liability Insurance.

                  (a) Carried by Lessee. Lessee shall obtain and keep in force a
Commercial  General  Liability Policy of Insurance  protecting Lessee and Lessor
against claims for bodily injury, personal injury and property damage based upon
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 $2,000,000 per
occurrence  with  an  "Additional   Insured-Managers   or  Lessors  of  Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion  Endorsement"
for damage caused by heat,  smoke or fumes from a hostile fire. The Policy shall
not  contain  any  intra-insured   exclusions  as  between  insured  persons  or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's  indemnity  obligations
under this Lease.  The limits of said insurance  shall not,  however,  limit the
liability  of  Lessee  nor  relieve  Lessee  of any  obligation  hereunder.  All
insurance  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.
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                                        9
<PAGE>
                  (b)  Carried  by  Lessor.   Lessor  shall  maintain  liability
insurance as described in Paragraph  8.2(a), 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 a policy or policies in the name of Lessor,  with loss payable
to Lessor, any groundlessor, and to any Lender(s) insuring loss or damage to the
Premises.  The amount of such insurance  shall be equal to the full  replacement
cost of the  Premises,  as the same shall exist from time to time, or the amount
required by any Lenders,  but in no event more than the commercially  reasonable
and available insurable value thereof. If Lessor is the Insuring Party, however,
Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's
personal  property shall be insured by Lessee under Paragraph 8.4 rather than by
Lessor. 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 debris  removal and the  enforcement  of any  Applicable
Requirements requiring the upgrading, demolition,  reconstruction or replacement
of any portion of the Premises as the result of a covered  loss.  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.  If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed  $1,000 per  occurrence,  and Lessee shall be liable for such  deductible
amount in the event of an Insured Loss.

                  (b) Rental Value.  The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender,  insuring the loss of the full Rent for one (1) year. 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 Rent 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
Rent otherwise payable by Lessee, for the next twelve (12) month period.  Lessee
shall be liable for any deductible amount in the event of such loss.

                  (c)  Adjacent  Premises.  If the Premises are part of a larger
building,  or of a group of buildings  owned by Lessor which are adjacent to the
Premises, the Lessee shall pay for any increase in the premiums for the property
insurance of such  building or buildings if said  increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.

         8.4      Lessee's Property/Business Interruption Insurance.

                  (a)  Property   Damage.   Lessee  shall  obtain  and  maintain
insurance  coverage on all of Lessee's personal  property,  Trade Fixtures,  and
Lessee Owned Alterations and Utility Installations. 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,  Trade Fixtures and Lessee Owned  Alterations
and Utility  Installations.  Lessee shall provide  Lessor with written  evidence
that such insurance is in force.

                  (b)  Business  Interruption.  Lessee shall obtain and maintain
loss of income and extra expense  insurance in amounts as will reimburse  Lessee
for direct or indirect  loss of  earnings  attributable  to all perils  commonly
insured  against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.

                  (c) No  Representation of Adequate  Coverage.  Lessor makes no
representation  that the  limits or forms of  coverage  of  insurance  specified
herein  are  adequate  to  cover  Lessee's  property,   business  operations  or
obligations under this Lease.
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                                       10
<PAGE>
         8.5 Insurance Policies. Insurance required herein shall be by companies
duly  licensed or admitted 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, as set forth in the most  current  issue of  "Best's
Insurance  Guide",  or such other rating as may be required by a Lender.  Lessee
shall  not do or permit  to be done  anything  which  invalidates  the  required
insurance  policies.  Lessee shall,  prior to the Start Date,  deliver to Lessor
certified  copies of policies of such insurance or  certificates  evidencing the
existence  and  amounts  of the  required  insurance.  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.  Such policies  shall be for a term of at least
one year, or the length of the remaining term of this Lease,  whichever is less.
If either Party shall fail to procure and maintain the insurance  required to be
carried by it, the other Party may,  but shall not be required  to,  procure and
maintain the same.

         8.6  Waiver of  Subrogation.  Without  affecting  any  other  rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages  against the other,  for loss of or damage
to its property  arising out of or incident to the perils required to be insured
against  herein.  The effect of such  releases and waivers is not limited by the
amount of  insurance  carried  or  required,  or by any  deductibles  applicable
hereto.  The Parties agree to have their  respective  property damage  insurance
carriers  waive any right to  subrogation  that such  companies may have against
Lessor  or  Lessee,  as the  case  may  be,  so  long  as the  insurance  is not
invalidated thereby.

         8.7  Indemnity.   Except  for  Lessor's  gross   negligence  or  wilful
misconduct,  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,
liens, judgments,  penalties,  attorneys' and consultants' fees, expenses and/or
liabilities  arising out of,  involving,  or in connection  with, the use and/or
occupancy  of the  Premises by Lessee.  If any action or  proceeding  is brought
against  Lessor by reason of any of the  foregoing  matters,  Lessee  shall upon
notice 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 defended or indemnified.

         8.8  Exemption of Lessor from  Liability.  Except from  Lessor's  gross
negligence  or  willful  misconduct,  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,  HVAC 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.  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,  which can  reasonably  be repaired in six (6) months or
less from the date of the damage or  destruction.  Lessor shall notify Lessee in
writing within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

                  (b)  "Premises  Total   Destruction"   shall  mean  damage  or
destruction  to the Premises,  other than Lessee Owned  Alterations  and Utility
Installations and Trade Fixtures, which
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                                       11
<PAGE>
cannot  reasonably  be  repaired  in six (6) months or less from the date of the
damage or destruction.  Lessor shall notify Lessee in writing within thirty (30)
days from the date of the damage or  destruction as to whether or not the damage
is Partial or Total.

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

                  (d)  "Replacement  Cost"  shall  mean  the cost to  repair  or
rebuild the improvements  owned by Lessor at the time of the occurrence to their
condition  existing  immediately  prior thereto,  including  demolition,  debris
removal and upgrading required by the operation of Applicable Requirements,  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;  provided,  however,  that  Lessee  shall,  at  Lessor's
election,  make the repair of any damage or destruction the total cost to repair
of  which  is  $10,000  or less,  and,  in such  event,  Lessor  shall  make any
applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose.  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 (except as to
the  deductible  which  is  Lessee's  responsibility)  as and when  required  to
complete said repairs. In the event,  however, such shortage 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 such funds or assurance  are not received,  Lessor may  nevertheless
elect by written  notice to Lessee within ten (10) days  thereafter to: (i) 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;  or (ii) have this Lease terminate thirty (30) days  thereafter.  Lessee
shall not be entitled to  reimbursement  of any funds  contributed  by Lessee to
repair any such damage or destruction.  Premises  Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3,  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),
Lessor may  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)  terminate this Lease by giving written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the  occurrence of such
damage.  Such termination  shall be effective sixty (60) days following the date
of such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within ten (10) days after receipt of the  termination  notice to
give written  notice to Lessor of Lessee's  commitment  to pay for the repair of
such damage without  reimbursement from Lessor. Lessee shall provide Lessor with
said funds or  satisfactory  assurance  thereof  within  thirty  (30) days after
making such  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
                                                        Initials _______ _______
                                       12
<PAGE>
possible  after the required  funds are  available.  If Lessee does not make the
required commitment,  this Lease shall terminate as of the date specified in the
termination notice.

         9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total  Destruction  occurs,  this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the gross
negligence  or  willful  misconduct  of Lessee,  Lessor  shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

         9.5  Damage  Near End of Term.  If at any time  during the last six (6)
months 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 terminate this
Lease  effective sixty (60) days following the date of occurrence of such damage
by giving a written  termination  notice to Lessee within thirty (30) days after
the date of occurrence of such damage.  Notwithstanding the foregoing, if Lessee
at that time has an  exercisable  option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such option and
(b)  providing  Lessor with any  shortage in  insurance  proceeds  (or  adequate
assurance  thereof)  needed to make the  repairs on or before the earlier of (i)
the date which is ten days after  Lessee's  receipt of Lessor's  written  notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which
such option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any shortage
in  insurance  proceeds,  Lessor  shall,  at  Lessor's  commercially  reasonable
expense,  repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect.  If Lessee fails to exercise  such option and
provide  such funds or  assurance  during  such  period,  then this Lease  shall
terminate on the date specified in the  termination  notice and Lessee's  option
shall be extinguished.

         9.6      Abatement of Rent; Lessee's Remedies.

                  (a)  Abatement.  In the event of  Premises  Partial  Damage or
Premises Total Destruction or a Hazardous  Substance  Condition for which Lessee
is not responsible  under this Lease,  the Rent payable by Lessee for the period
required  for the repair,  remediation  or  restoration  of such damage shall be
abated in  proportion  to the degree to which  Lessee's  use of the  Premises is
impaired,  but not to  exceed  the  proceeds  received  from  the  Rental  Value
insurance.  All other  obligations  of Lessee  hereunder  shall be  performed by
Lessee,  and Lessor  shall have no liability  for any such damage,  destruction,
remediation, repair or restoration except as provided herein.

                  (b)  Remedies.  If  Lessor  shall be  obligated  to  repair or
restore the Premises and does not commence, in a substantial and meaningful way,
such repair or restoration  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 and such repair or restoration  is not commenced  within thirty (30)
days  thereafter,  this Lease shall  terminate as of the date  specified in said
notice.  If the repair or restoration is commenced within said thirty (30) days,
this Lease shall continue in full force and effect. "Commence" 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  Termination-Advance  Payments.  Upon  termination  of  this  Lease
pursuant to Paragraph  6.2(g) or 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.

         9.8 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.
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                                       13
<PAGE>
10.      Real Property Taxes.

         10.1  Definition  of "Real  Property  Taxes." As used herein,  the term
"Real  Property  Taxes"  shall  include  any form of  assessment;  real  estate,
general, special,  ordinary or extraordinary,  or rental levy or tax (other than
inheritance,  personal income or estate taxes); improvement bond; and/or license
fee imposed upon or levied against any legal or equitable  interest of Lessor in
the Premises, Lessor's right to other income therefrom, and/or Lessor's business
of leasing,  by any  authority  having the direct or  indirect  power to tax and
where the funds are generated with  reference to the Building  address and where
the proceeds so generated  are to be applied by the city,  county or other local
taxing  authority of a jurisdiction  within which the Premises are located.  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 during
the term of this Lease,  including but not limited to, a change in the ownership
of the Premises.

         10.2

                  (a) Payment of Taxes. Lessee shall pay the Real Property taxes
applicable to the Premises  during the term of this Lease.  Subject to Paragraph
10.2(b),  all such  payments  shall be made at least ten (10) days  prior to any
delinquency  date.  Lessee  shall  promptly  furnish  Lessor  with  satisfactory
evidence  that such  taxes have been paid.  If any such  taxes  shall  cover any
period of time prior to or after the  expiration or  termination  of this Lease,
Lessee's share of such taxes shall be prorated to cover only that portion of the
tax bill applicable to the period that this Lease is in effect, and Lessor shall
reimburse Lessee for any  overpayment.  If Lessee shall fail to pay any required
Real  Property  Taxes,  Lessor shall have the right to pay the same,  and Lessee
shall reimburse Lessor therefor upon demand.

                  (b) Advance Payment.  In the event Lessee incurs a late charge
on any three  rent  payments  in any 12 month  period,  Lessor  may at  Lessor's
option, estimate the current Real Property Taxes, and require that such taxes be
paid in advance to Lessor by Lessee,  either:  (i) in a lump sum amount equal to
the  installment  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 an amount  equal to the amount of the  estimated  installment  of taxes
divided  by the  number  of months  remaining  before  the  month in which  said
installment  becomes  delinquent.  When the actual amount of the  applicable tax
bill is known,  the  amount of such  equal  monthly  advance  payments  shall be
adjusted as required to provide the funds needed to pay the applicable taxes. If
the amount  collected by Lessor is  insufficient to pay such Real Property Taxes
when due,  Lessee shall pay Lessor,  upon demand,  such  additional  sums as are
necessary  to pay  such  obligations.  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 its
obligations under this Lease, then any balance of funds paid to Lessor under the
provisions  of this  Paragraph  may at the  option of  Lessor,  be treated as an
additional Security Deposit.

         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  conclusively  determined  by Lessor from the  respective
valuations  assigned in the assessor's work sheets or such other  information as
may be reasonably available.

         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.  When  possible.  Lessee shall cause such 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's  property  within ten (10) days
after receipt of a written statement.

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
                                                        Initials _______ _______
                                       14
<PAGE>
services  are not  separately  metered to Lessee.  Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered.

12.      Assignment and Subletting.

         12.1     Lessor's Consent Required.

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

                  (b) A change in the  control  of Lessee  shall  constitute  an
assignment  requiring  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,  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 by an amount
greater than  twenty-five  percent (25%) of such Net Worth as it was represented
at the time of the  execution  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,  whichever was or
is greater,  shall be considered an assignment of this Lease to which Lessor may
withhold its consent.  "Net Worth of Lessee"  shall mean the net worth of Lessee
(excluding any  guarantors)  established  under  generally  accepted  accounting
principles.

                  (d) An assignment  or subletting  without  consent  shall,  at
Lessor's option, be a Default curable after notice per Paragraph  13.1(c),  or a
noncurable  Breach  without the  necessity  of any notice and grace  period.  If
Lessor elects to treat such unapproved  assignment or subletting as a noncurable
Breach,  Lessor may either:  (i) terminate this Lease,  or (ii) upon thirty (30)
days written  notice,  increase the monthly Base Rent to one hundred ten percent
(110%) of the Base Rent then in effect. Further, in the event of such Breach and
rental adjustment, (i) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to one hundred ten percent
(110%) of the  price  previously  in  effect,  and (ii) all fixed and  non-fixed
rental  adjustments  scheduled  during the  remainder of the Lease term shall be
increased to One Hundred Ten Percent (110%) of the scheduled adjusted rent.

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

         12.2     Terms and Conditions Applicable to Assignment and Subletting.

                  (a)  Regardless  of  Lessor's   consent,   any  assignment  or
subletting shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the  obligations of Lessee under this Lease,  (ii)
release  Lessee  of any  obligations  hereunder,  or  (iii)  alter  the  primary
liability of Lessee for the payment of Rent or for the  performance of any other
obligations to be performed by Lessee.

                  (b)  Lessor  may  accept  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 Rent or performance  shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessee's Default or Breach.

                  (c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
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                                       15
<PAGE>
                  (d) In the event of any  Default or Breach by  Lessee,  Lessor
may proceed directly  against Lessee,  any Guarantors or anyone else responsible
for the  performance  of Lessee's  obligations  under this Lease,  including any
assignee or sublessee,  without first exhausting  Lessor's  remedies against any
other person or entity responsible  therefore to Lessor, or any security held by
Lessor.

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

                  (f) Any assignee of, or sublessee under,  this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed 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 to in writing.

         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 Rent payable on any  sublease,  and Lessor may collect
such Rent and apply same toward Lessee's obligations under this Lease; provided,
however,  that until  receipt by Lessee of written  notice  from Lessor a Breach
shall occur in the performance of Lessee's obligations,  Lessee may collect said
Rent.  Lessor shall not, by reason of the  foregoing or any  assignment  of such
sublease,  nor by  reason of the  collection  of Rent,  be deemed  liable to the
sublessee  for any  failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee.  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 all Rent due and to become due under the sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents to Lessor  without
any   obligation  or  right  to  inquire  as  to  whether  such  Breach  exists,
notwithstanding any claim from Lessee to the contrary.

                  (b) In the event of a Breach by  Lessee,  Lessor  may,  at its
option,  require  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 prior Defaults or Breaches
of such sublessor.

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

                  (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.
                                                        Initials _______ _______
                                       16
<PAGE>
13.      Default; Breach; Remedies.

         13.1 Default; Breach. A "Default" is defined as a failure by the Lessee
to comply with or perform any of the terms, covenants, conditions or rules under
this  Lease.  A  "Breach"  is defined  as the  occurrence  of one or more of the
following  Defaults,  and the failure of Lessee to cure such Default  within any
applicable grace period:

                  (a) The  abandonment  of the Premises;  or the vacating of the
Premises without providing a commercially reasonable level of security, or where
the coverage of the property insurance described in Paragraph 8.3 is jeopardized
as a result  thereof,  or without  providing  reasonable  assurances to minimize
potential vandalism.

                  (b) The  failure of Lessee to make any  payment of Rent or any
Security Deposit required to be made by Lessee  hereunder,  whether to Lessor or
to a third  party,  when due, to provide  reasonable  evidence of  insurance  or
surety bond, or to fulfill any  obligation  under this Lease which  endangers or
threatens  life or property,  where such failure  continues for a period of five
(5) business days following written notice to Lessee.

                  (c) The  failure by Lessee to provide (i)  reasonable  written
evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii)  the  rescission  of an  unauthorized  assignment  or  subletting,  (iv) a
Estoppel Certificate,  (v) a requested  subordination,  (vi) evidence concerning
any guaranty and/or Guarantor,  (vii) 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 to
Lessee.

                  (d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease,  or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs  13.1(a),  (b) or (c), above,  where
such Default  continues for a period of thirty (30) days after  written  notice;
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 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 of any general  arrangement  or assignment  for the benefit of creditors;
(ii)  becoming a  "debtor"  as  defined  in 11 U.S.C.  ss. 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 that any financial statement of Lessee or of
any Guarantor given to Lessor 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  basis,  and Lessee's  failure,  within  sixty (60) days  following
written notice of any such event,  to provide 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.
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                                       17
<PAGE>
         13.2 Remedies. If Lessee fails to perform any of its affirmative duties
or  obligations,  within  ten (10) days after  written  notice (or in case of an
emergency,  without  notice),  Lessor may, at its option,  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 upon receipt of 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 by Lessee to
be by cashier's  check.  In the event of a Breach.  Lessor may,  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:

                  (a) Terminate  Lessee's right to possession of the Premises by
any lawful  means,  in which case this Lease shall  terminate  and Lessee  shall
immediately  surrender  possession  to  Lessor.  In such event  Lessor  shall be
entitled to recover  from  Lessee:  (i) 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 any leasing  commission  paid by Lessor in connection with this Lease
applicable to the unexpired  term of this Lease.  The worth at the time of award
of the  amount  referred  to in  provision  (iii) of the  immediately  preceding
sentence  shall be computed by  discounting  such amount at the discount rate of
the Federal  Reserve Bank of the District  within which the Premises are located
at the time of award  plus one  percent  (1%).  Efforts  by Lessor  to  mitigate
damages  caused by Lessee's  Breach of this Lease shall not waive Lessor's right
to recover  damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer. Lessor shall have the right
to recover in such  proceeding  any unpaid Rent and  damages as are  recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period  required  under  Paragraph 13.1 was
not previously  given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful  detainer  statute shall also constitute the notice
required by Paragraph  13.1. In such case, the applicable  grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently,  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  and
recover the Rent as it becomes  due, in which event Lessee may sublet or assign,
subject only to reasonable limitations.  Acts of maintenance,  efforts to relet,
and/or the  appointment of a receiver to protect the Lessor's  interests,  shall
not constitute a termination of the Lessee's right to possession.

                  (c) Pursue any other remedy now or hereafter  available  under
the laws or judicial  decisions  of the state  wherein the Premises are located.
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.  Any  agreement for free or abated rent or
other  charges,  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.  Upon
Breach  of  this  Lease  by  Lessee,   any  such   Inducement   Provision  shall
automatically  be deemed  deleted  from this  Lease and of no  further  force or
effect, and any rent, other charge, bonus, inducement or consideration
                                                        Initials _______ _______
                                       18
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theretofore abated,  given or paid by Lessor under such an Inducement  Provision
shall be immediately  due and payable by Lessee to Lessor,  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 of Rent 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 any Lender. Accordingly, if any Rent
shall not be received by Lessor  within five (5) days after such amount shall be
due, then,  without any  requirement  for notice to Lessee,  Lessee shall pay to
Lessor a one-time  late charge  equal to five  percent (5%) of each such overdue
amount provided that Lessor shall give Lessee notice of non-payment and five (5)
days from  receipt of such  notice to cure such  non-payment  once in any twelve
month period before assessing such late fees/interest.  The parties hereby agree
that such late charge  represents  a fair and  reasonable  estimate of the costs
Lessor will incur by reason of such late payment. 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 the  exercise of 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  any provision of this Lease to
the  contrary,  Base Rent  shall,  at  Lessor's  option,  become due and payable
quarterly in advance.

         13.5 Interest.  Any monetary payment due Lessor  hereunder,  other than
late charges, not received by Lessor, when due as to scheduled payments (such as
Base Rent) or within thirty (30) days following the date on which it was due for
non-scheduled  payment,  shall  bear  interest  from the date  when  due,  as to
scheduled  payments,  or the  thirty-first  (31st)  day  after  it was due as to
non-scheduled  payments. The interest ("Interest") charged shall be equal to the
prime rate reported in the Wall Street Journal as published closest prior to the
date when due plus four  percent  (4%),  but shall not exceed the  maximum  rate
allowed by law.  Interest is payable in addition  to the  potential  late charge
provided for in Paragraph 13.4.

         13.6     Breach by Lessor.

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

                  (b)  Performance  by Lessee on Behalf of Lessor.  In the event
that neither  Lessor nor Lender cures said breach  within thirty (30) days after
receipt of said notice,  or if having commenced said cure they do not diligently
pursue it to  completion,  then Lessee may elect to cure said breach at Lessee's
expense and offset from Rent an amount  equal to the greater of one month's Base
Rent  or the  Security  Deposit,  and to pay an  excess  of such  expense  under
protest,  reserving  Lessee's right to reimbursement  from Lessor.  Lessee shall
document the cost of said cure and supply said documentation to Lessor.

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 (collectively  "Condemnation"),  this Lease shall terminate as to the part
taken  as of the date  the  condemning  authority  takes  title  or  possession,
whichever first occurs.  If more than ten percent (10%) of any building  portion
of the premises, or more than twenty-five percent (25%) of the land area portion
of the premises not occupied by any building,  is taken by Condemnation,  Lessee
may, at Lessee's option, to be exercised
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                                       19
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in writing  within ten (10) days after Lessor  shall have given  Lessee  written
notice of such  taking (or in the absence of such  notice,  within ten (10) days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning  authority takes such  possession.  If Lessee does
not terminate  this Lease in  accordance  with the  foregoing,  this Lease shall
remain in full force and effect as to the  portion  of the  Premises  remaining,
except that the Base Rent shall be reduced in  proportion  to the  reduction  in
utility of the Premises caused by such Condemnation.  Condemnation awards and/or
payments  shall be the  property of Lessor,  whether such award shall be made as
compensation  for  diminution in value of the  leasehold,  the value of the part
taken,  or for  severance  damages;  provided,  however,  that  Lessee  shall be
entitled to any compensation for Lessee's relocation expenses,  loss of business
goodwill and/or Trade  Fixtures,  without regard to whether or not this Lease is
terminated  pursuant to the provisions of this  Paragraph.  All  Alterations and
Utility   Installations  made  to  the  Premises  by  Lessee,  for  purposes  of
Condemnation  only,  shall be  considered  the property of the Lessee and Lessee
shall be entitled to any and all compensation which is payable therefor.  In the
event that this Lease is not  terminated by reason of the  Condemnation,  Lessor
shall repair any damage to the Premises caused by such Condemnation.

15.      Brokers' Fee.

         15.1 Additional  Commission.  In addition to the payments owed pursuant
to Paragraph 1.10 above,  and unless Lessor and the Brokers  otherwise  agree in
writing,  Lessor agrees that: (a) if Lessee exercises any Option,  (b) if Lessee
acquires  any  rights to the  Premises  or other  premises  owned by Lessor  and
located within the same Project,  if any,  within which the Premises is located,
(c) if Lessee remains in possession of the Premises, with the consent of Lessor,
after the expiration of this Lease, or (d) if Base Rent is increased, whether by
agreement or operation of an escalation  clause herein,  then,  Lessor shall pay
Brokers a fee in  accordance  with the schedule of said Brokers in effect at the
time of the execution of this Lease.

         15.2  Assumption  of  Obligations.  Any buyer or transferee of Lessor's
interest  in this  Lease  shall be deemed to have  assumed  Lessor's  obligation
hereunder.  Each Broker shall be a third party  beneficiary of the provisions of
Paragraphs  1.10,  15, 22 and 31. If Lessor fails to pay to a Broker any amounts
due as and for commissions  pertaining to this Lease when due, then such amounts
shall  accrue  Interest.  In  addition,  if Lessor  fails to pay any  amounts to
Lessee's Broker when due,  Lessee's Broker may send written notice to Lessor and
Lessee of such failure and if Lessor  fails to pay such amounts  within ten (10)
days after said  notice,  Lessee  shall pay said monies to its Broker and offset
such amounts against Rent. In addition,  Lessee's Broker shall be deemed to be a
third party  beneficiary  of any  commission  agreement  entered  into by and/or
between Lessor and Lessor's Broker.

         15.3  Representations and Indemnities of Broker  Relationships.  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) in
connection  with this  Lease,  and that no one other than said named  Brokers is
entitled to any  commission or finder's fee in connection  herewith.  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.

16.      Estoppel Certificates.

                  (a) 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  "Estoppel  Certificate"  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.

                  (b) If the  Responding  Party shall fail to execute or deliver
the Estoppel  Certificate  within such ten day period,  the Requesting Party may
execute an Estoppel Certificate stating that:
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                                       20
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(i) the Lease is in full force and effect without  modification except as may be
represented by the Requesting  Party,  (ii) there are no uncured defaults in the
Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not
more than one month's rent has been paid in advance.  Prospective purchasers and
encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the
Responding Party shall be estopped from denying the truth of the facts contained
in said Certificate.

                  (c) If  Lessor  desires  to  finance,  refinance,  or sell the
Premises,  or any part thereof,  Lessee and all Guarantors  shall deliver to any
potential lender or purchaser  designated by Lessor such financial statements 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.      Definition  of Lessor.  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 this Lease.  Lessor
shall  deliver to the  transferee  or assignee (in cash or by credit) any unused
Security  Deposit held by Lessor.  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.  Notwithstanding  the above, and subject to the provisions of Paragraph
20 below,  the original Lessor under this Lease,  and all subsequent  holders of
the Lessor's  interest in this Lease shall remain  liable and  responsible  with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above.

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.      Days. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.

20.      Limitation  on  Liability.  Subject to the  provisions  of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute  personal
obligations  of  Lessor,  the  individual  partners  of  Lessor  or its or their
individual partners, directors, officers or shareholders,  and Lessee shall look
to the Premises,  and to no other assets of Lessor,  for the satisfaction of any
liability  of Lessor  with  respect to this Lease,  and shall not seek  recourse
against the individual partners of Lessor, or its or their individual  partners,
directors,  officers or  shareholders,  or any of their personal assets for such
satisfaction.

21.      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.

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.  The  liability  (including  court costs and  Attorneys'
fees),  of any  Broker  with  respect to  negotiation,  execution,  delivery  or
performance  by either  Lessor or Lessee  under this Lease or any  amendment  or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided,  however, that the foregoing limitation
on each Broker's  liability  shall not be applicable to any gross  negligence or
willful misconduct of such Broker.
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                                       21
<PAGE>
23.      Notices.

         23.1 Notice  Requirements.  All notices  required or  permitted by this
Lease shall be in writing and may be delivered in person (by hand or by courier)
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 notices.  Either Party may by written
notice to the other  specify a different  address  for notice,  except that upon
Lessee's  taking  possession  of the  Premises,  the Premises  shall  constitute
Lessee's  address  for  notice.  A copy  of  all  notices  to  Lessor  shall  be
concurrently  transmitted  to such party or parties at such  addresses as Lessor
may from time to time hereafter designate in writing.

         23.2 Date of Notice.  Any notice sent by registered or certified  mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed  given  forty-eight  (48) hours after
the same is  addressed  as  required  herein and mailed  with  postage  prepaid.
Notices  delivered  by United  States  Express  Mail or  overnight  courier that
guarantee next day delivery shall be deemed given  twenty-four  (24) hours after
delivery of the same to the Postal  Service or courier.  Notices  transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt, provided a copy is also delivered via delivery or mail.
If notice is received on a Saturday, 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.  The acceptance of
Rent by Lessor  shall not be a waiver of any  Default or Breach by  Lessee.  Any
payment by Lessee may be  accepted by Lessor on account of moneys or damages due
Lessor,  notwithstanding any qualifying  statements or conditions made by Lessee
in connection therewith,  which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.

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

26.      No Right To Holdover.  Lessee has no right to retain  possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee  holds over,  then the Base Rent shall be  increased to
one hundred fifty percent  (150%) of the Base Rent  applicable  during the month
immediately  preceding the expiration or termination.  Nothing  contained herein
shall be construed as consent by Lessor to any holding over by Lessee.

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

28.      Covenants and Conditions;  Construction of Agreement. All provisions of
this  Lease to be  observed  or  performed  by  Lessee  are both  covenants  and
conditions.  In  construing  this  Lease,  all  headings  and titles are for the
convenience  of the  parties  only and  shall not be  considered  a part of this
Lease.  Whenever required by the context,  the singular shall include the plural
and vice versa.  This Lease shall not be  construed as if prepared by one of the
parties, but rather according to its fair meaning as a whole, as if both parties
had prepared it.

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
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                                       22
<PAGE>
Premises are located.  Any litigation between the Parties hereto concerning this
Lease shall be initiated in the county in which the Premises are located.

30.      Subordination; Attornment; Non-Disturbance.

         30.1  Subordination.  This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease,  mortgage,  deed of trust, or other
hypothecation  or security  device  (collectively,  "Security  Device"),  now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and all renewals,  modifications, and extensions thereof. Lessee agrees
that the holders of any such Security  Devices (in this Lease together  referred
to as  "Lender")  shall have no liability  or  obligation  to perform any of the
obligations of Lessor under this Lease.  Any Lender may elect to have this Lease
and/or any Option granted hereby  superior to the lien of its Security Device by
giving written  notice thereof to Lessee,  whereupon 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  a  commercially  reasonable   non-disturbance
agreement (a "Non-Disturbance  Agreement") from the Lender which Non-Disturbance
Agreement  provides  that Lessee's  possession of the Premises,  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.  Further,  within  sixty (60) days after the  execution of this Lease,
Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any  pre-existing  Security Device which is secured
by  the   Premises.   In  the  event  that  Lessor  is  unable  to  provide  the
Non-Disturbance  Agreement  within  said sixty (60) days,  then  Lessee  may, at
Lessee's  option,  directly contact Lessor's lender and attempt to negotiate for
the execution and delivery of a Non-Disturbance Agreement.

         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
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

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

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 upon at least one day  advance
notice to Lessee for the purpose of showing the same to
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                                       23
<PAGE>
prospective  purchasers,  lenders,  or  lessees,  and making  such  alterations,
repairs,  improvements or additions to the Premises as Lessor may deem necessary
provided that Lessor shall take reasonable  precaution to ensure that entry does
not interfere with operations. All such activities shall be without abatement of
rent or  liability  to Lessee.  Lessor may at any time place on the Premises any
ordinary  "For Sale"  signs and Lessor may during the last six (6) months of the
term hereof place on the Premises any ordinary "For Lease" signs.  Lessee may at
any time place on or about the Premises any ordinary "For Sublease" sign.

33.      Auctions.  Lessee  shall not conduct,  nor permit to be  conducted  any
auction upon the Premises without  Lessor's prior written consent.  Lessor shall
not be  obligated  to exercise any  standard of  reasonableness  in  determining
whether to permit an auction.

34.      Signs. Except for ordinary "For Sublease" signs, Lessee shall not place
any sign upon the Premises  without  Lessor's prior written  consent.  All signs
must comply with all Applicable Requirements.

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,  that Lessor may elect to continue any one or all
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to elect 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.  Except as otherwise provided herein,  wherever in this Lease
the  consent of a Party is required  to an act by or for the other  Party,  such
consent  shall  not  be  unreasonably  withheld  or  delayed.   Lessor's  actual
reasonable  costs  and  expenses  (including  but not  limited  to  architects',
attorneys',   engineers'   and  other   consultants'   fees)   incurred  in  the
consideration  of, or response  to, a request by Lessee for any Lessor  consent,
including  but not limited to consents to an  assignment,  a  subletting  or the
presence or use of a Hazardous  Substance,  shall be paid by Lessee upon receipt
of an invoice and supporting  documentation  therefor.  Lessor's  consent to any
act,  assignment or subletting  shall not constitute an  acknowledgment  that no
Default or Breach by Lessee of this  Lease  exists,  nor shall  such  consent be
deemed a  waiver  of any then  existing  Default  or  Breach,  except  as may be
otherwise  specifically stated in writing by Lessor at the time of such consent.
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.  In the event that either Party disagrees with
any  determination  made by the other  hereunder  and  reasonably  requests  the
reasons for such determination,  the determining party shall furnish its reasons
in writing and in reasonable detail within ten (10) business days following such
request.

37.      Guarantor.

         37.1 Execution.  The Guarantors,  if any, shall each execute a guaranty
in the form most  recently  published  by the  American  Industrial  Real Estate
Association,  and each such Guarantor shall have the same  obligations as Lessee
under this Lease.

         37.2  Default.  It shall  constitute  a  Default  of the  Lessee if any
Guarantor  fails or  refuses,  upon  request to  provide:  (a)  evidence  of the
execution of the  guaranty,  including  the  authority  of the party  signing on
Guarantor's  behalf  to  obligate  Guarantor,  and in the  case  of a  corporate
Guarantor,  a  certified  copy  of  a  resolution  of  its  board  of  directors
authorizing the making of such guaranty, (b) current financial statements, (c) a
Estoppel Certificate,  or (d) written confirmation that the guaranty is still in
effect.

38.      Quiet  Possession.  Subject  to  payment  by  Lessee  of the  Rent  and
performance of all of the covenants,  conditions and provisions on Lessee's part
to be  observed  and  performed  under  this  Lease,  Lessee  shall  have  quiet
possession and quiet enjoyment of the Premises during the term hereof.
                                                        Initials _______ _______
                                       24
<PAGE>
39.      Options.

         39.1 Definition.  "Option" shall mean: (a) the right to extend the term
of or renew this Lease or to extend or renew any lease that  Lessee has on other
property  of  Lessor;  (b) the right of first  refusal  or first  offer to lease
either the  Premises or other  property of Lessor;  (c) the right to purchase or
the right of first refusal to purchase the Premises or 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,  and cannot be assigned or
exercised by anyone other than said original  Lessee and only while the original
Lessee is in full  possession of the Premises and, if requested by Lessor,  with
Lessee  certifying  that Lessee has no  intention  of  thereafter  assigning  or
subletting.

         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 have been validly exercised.

         39.4     Effect of Default on Options.

                  (a) Lessee  shall  have no right to  exercise  an Option:  (i)
during the  period  commencing  with the  giving of any  notice of  Default  and
continuing until said Default is cured,  (ii) during the period of time any Rent
is unpaid  (without  regard to whether notice  thereof is given  Lessee),  (iii)
during  the time  Lessee is in Breach of this  Lease,  or (iv) in the event that
Lessee has been given three (3) or more notices of separate Default,  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) 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 prior to the  commencement  of the extended  term,  (i)
Lessee  fails to pay Rent for a period  of  thirty  (30)  days  after  such Rent
becomes due  (without  any  necessity  of Lessor to give notice  thereof),  (ii)
Lessor gives to Lessee three (3) or more notices of separate  Default 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 a part of a group of buildings
controlled by Lessor,  Lessee agrees that it will observe all  reasonable  rules
and  regulations  which  Lessor  may make from time to time for the  management,
safety,  and care of said properties,  including the care and cleanliness of the
grounds and including the parking,  loading and unloading of vehicles,  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, is
agents and invitees and their property from the acts of third parties.

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

43.      Performance  Under Protest.  If at any time a dispute shall arise as to
any  amount  or sum of money  to be paid by one  Party to the  other  under  the
provisions  hereof,  the Party  against whom the  obligation to pay the money is
asserted have the right to make payment "under protest" and such
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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.

44.      Authority.  If either Party  hereto is a  corporation,  trust,  limited
liability company,  partnership,  or similar entity,  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.  Each party
shall,  within  thirty  (30) days  after  request,  deliver  to the other  party
satisfactory evidence of such authority.

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

46.      Offer.  Preparation  of this Lease by either  Party or their  agent and
submission  of same to the other  Party shall not be deemed an offer to lease to
the other  Party.  This Lease is not intended to be binding  until  executed and
delivered by all Parties hereto.

47.      Amendments.  This Lease may be modified only in writing,  signed by the
Parties  in  interest  at the time of the  modification.  As long as they do not
materially  change Lessee's  obligations  hereunder,  Lessee agrees to make such
reasonable  non-monetary  modifications  to  this  Lease  as may  be  reasonably
required by a Lender in  connection  with the  obtaining of normal  financing or
refinancing of the Premises.

48.      Multiple Parties.  If more than one person or entity is named herein as
either  Lessor or Lessee,  such  multiple  Parties  shall have joint and several
responsibility to comply with the terms of this Lease.

49.      Mediation  and  Arbitration  of  Disputes.  An Addendum  requiring  the
Mediation  and/or the  Arbitration  of all disputes  between the Parties  and/or
Brokers arising out of this Lease |_| is |_| is not attached to this Lease.

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

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ATTENTION:   NO  REPRESENTATION  OR  RECOMMENDATION  IS  MADE  BY  THE  AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT,  OR TAX  CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

1.SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2.RETAIN APPROPRIATE  CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES.  SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS  SUBSTANCES,  THE ZONING OF THE PREMISES,  THE  STRUCTURAL
INTEGRITY,  THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR LESSEE'S INTENDED USE.

WARNING:  IF THE PREMISES IS LOCATED IN A STATE OTHER THAN  CALIFORNIA,  CERTAIN
PROVISIONS  OF THE LEASE MAY NEED TO BE REVISED  TO COMPLY  WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.
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<PAGE>
The  parties  hereto  have  executed  this  Lease at the  place and on the dates
specified above their respective signatures.

Executed at:__________________________   Executed at:___________________________
on:___________________________________   on:____________________________________
By LESSOR:                               By LESSEE:
Beardsley & I-17, L.L.C., an Arizona     Gum Tech International, Inc.,
limited liability company                a Utah corporation

By:  /s/ R. Randy Stolworthy             By:  /s/ Gary Kehoe
Name Printed: R. Randy Stolworthy        Name Printed:  Gary Kehoe
Title:________________________________   Title: President

By:___________________________________   By: ___________________________________
Name Printed:_________________________   Name Printed:__________________________
Title:________________________________   Title:_________________________________
Address:  4131 North 24th Street,               Address: 246 East Watkins Street
          Suite C-207                           Phoenix, Arizona 85004
          Phoenix, Arizona 85016
Telephone (602) 553-0082                        Telephone (602) 252-1617
Facsimile: (602) 553-0084                       Facsimile (602) 252-6650
Federal ID No.________________________   Federal ID No._________________________

NOTE:    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, 700 So.
         Flower  Street,  Suite  600,  Los  Angeles,   California  90017.  (213)
         687-8777. Fax No. (213) 687-8616
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<PAGE>
                                ADDENDUM TO LEASE

This ADDENDUM TO LEASE,  made this 21st day of August,  1998 is hereby  attached
and incorporated by reference of that Lease dated August 21, 1998, herewith (the
"Lease")  by  and  between   Beardsley   I-17  L.L.C.   ("Lessor")  and  GumTech
International,  Inc., a Utah Corporation ("Lessee").  In the event of a conflict
between the terms and provisions of the Lease and this  Addendum,  this Addendum
shall control.

1.   Base Rent:               Months 1-12                $10,067.20 NNN*
                              Months 13-24               $11,954.80 NNN*
                              Months 25-36               $12,584.00 NNN*
                              Months 37-48               $13,527.80 NNN*
                              Months 49-60               $14,157.00 NNN*

                              *Plus applicable  rental tax currently at 1.9% and
                              subject to change

2.   Tenant Improvements:     The  parties  agree that  Lessor  shall  reimburse
                              Lessee for certain approved Tenant Improvements to
                              be placed by Tenant on the Premises. The amount of
                              such reimbursement shall not exceed Forty Thousand
                              Dollars ($40,000.00).  As a condition to obtaining
                              such   reimbursement,   Lessee   shall   prior  to
                              construction  submit  to  Lessor  a  list  of  the
                              proposed Tenant Improvements to be placed upon the
                              Premises  together with three (3) competitive bids
                              for any and all such Tenant Improvement.  Landlord
                              shall reasonably  approve the lowest of such bids.
                              Following  completion of  construction of all such
                              Improvements, Lessee shall submit to Lessor copies
                              of paid invoices,  unconditional lien waivers from
                              all  contractors,   subcontractors   and  material
                              suppliers   together   with   a   Certificate   of
                              Completion   by   Lessee's   general   contractor,
                              architect  or such other  individual  or entity as
                              reasonably   approved  by  Lessor.   Lessor  shall
                              reimburse  Lessee for the  amount of the  approved
                              bid within  forty-five  (45) days of  submittal of
                              such invoices together with appropriate supporting
                              documents.

3.   Option to Renew:         Provided  Tenant  is not then in  default  nor has
                              been in default  more than twice  during the prior
                              twelve (12)  months,  Lessee shall have the option
                              to extend the term of this lease for an additional
                              sixty (60) calendar  months.  Such option shall be
                              exercised  by  Lessee  giving  written  notice  to
                              Lessor no earlier than twelve (12) months nor less
                              than six (6) months prior to the expiration of the
                              initial five (5) year term.

                              The base year rate shall be 95% of the then market
                              rent for like properties.
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<PAGE>
                                   EXHIBIT "A"

This Exhibit depicts the Premises and is not to scale and should not be used for
measurements.  Lessor shall patch,  paint and repair the walls  indicated on the
floor plan in addition to the Tenant Improvement Allowance outlined in Paragraph
2 of the Addendum.
                                [GRAPHIC OMITTED]

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