LEASE AGREEMENT

     THIS LEASE AGREEMENT (the "Lease") made as of the 1st day of January, 1997,
by and between  PRODUCTION  REALTY,  INC.,  a  California  corporation,  and its
successors and assigns ("Landlord"), and PACIFIC/AIR BALANCE, INC., a California
corporation, and its successors and assigns ("Tenant").

                            WITNESSETH

     THAT FOR AND IN CONSIDERATION of the mutual covenants and agreements herein
contained,  and  intending  to be legally  bound,  the parties  hereto do hereby
covenant and agree as follows:

1. Lease of Premises.  Landlord hereby leases to Tenant and Tenant hereby leases
from  Landlord  that certain  parcel of real  property  commonly  known as 13516
Desmond  Street,  Pacoima,  California,  91331,  and  generally  described as an
approximately  51,000  square  foot  parcel  of land with a 25,000  square  foot
industrial  building  situated  thereon  (the  "Building"),  together  with  all
improvements thereon (the "Premises").

2. Term. This Lease shall commence on the date hereof (the "Commencement Date"),
and shall continue for twenty-four (24) months (the "Initial Term"),  and may be
renewed for one additional  lease term, of twenty-four  (24) months  duration at
the  expiration  of the  Initial  Term upon the terms and  conditions  contained
herein,  upon Tenant  providing  thirty (30) days prior  written  notice of such
renewal  to  Landlord;  and  subject to  further  extension  of such term as may
hereafter  be  otherwise  agreed in writing  between  Landlord  and Tenant.  The
Initial  Term and any annual  renewal  thereof may be referred to as the "Term".
Landlord and Tenant agree that this Lease shall not be recorded.

3.   Rent

     3.1 Payment of Rent. Tenant covenants and agrees to pay Landlord rent in an
amount equal to:

          (a)  Thirty-Eight  Cents  ($0.38) per square foot of the Building , in
advance, on or before the first day of each month during the Initial Term;

          (b) Forty Cents  ($0.40) per square foot of the Building , in advance,
on or before the first day of each month during the renewal of the Initial Term,
if any, of the term of this Lease; and

     3.2 Past Due Rent.  If Tenant shall fail to pay any Rent within twenty (20)
days of when  the  same is due and  payable,  such  unpaid  amounts  shall  bear
interest  from the due date thereof to the date of payment at the annual rate of
interest  of twelve  percent  (12%) per annum or such  lesser  rate which is the
maximum  allowed by law (the  "Default  Rate").  It is not the  intention of the
parties to contract  for,  pay or collect any  interest in excess of the maximum
lawful  rate.  In the event any sum is paid by Tenant as  interest  in an amount
which would be in excess of such lawful  rate,  then such sum shall be deemed to
be a prepayment by Tenant of its immediately  succeeding  obligations under this
Lease and shall not be deemed to be interest.

4. Insurance.  At all times during the term of this Lease,  Tenant shall secure,
keep in force and pay for  directly,  at Tenant's  sole  expense,  the following
insurance:

          4.1 Real  Property  Insurance.  Tenant  shall,  at its  sole  cost and
expense  and at all times  during the Term,  provide  and keep in full force and
effect fire and extended  coverage  insurance on the Premises with a replacement
cost endorsement (if available) in an amount equal to at least


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eighty percent (80%) of the full  replacement  cost of the  improvements  on the
Premises,  including  without  limitation  all  fixtures  located  on or in  the
Premises. If the coverage is available and commercially appropriate, such policy
or  policies  shall  insure  against  all risks  (except the perils of flood) of
direct  physical  loss or damage  including  coverage for any  additional  costs
resulting  from  debris  removal  and  reasonable  amounts of  coverage  for the
endorsement of any ordinance or law regulating the reconstruction or replacement
of any undamaged  sections of the Premises  required to be demolished or removed
by reason of the enforcement of any building, zoning, safely or land use laws as
the result of a covered cause of loss.

          4.2  Personal  Property  Insurance.  Tenant  shall,  at Tenant's  sole
expense,  obtain  and  keep in  force a policy  of fire  and  extended  coverage
insurance  with  respect to the  Premises  insuring  Tenant  against any and all
property damage or casualty loss or other hazards thereto, up to the fair market
value of the personal  property of Tenant  stored upon the  Premises.  Tenant is
solely  responsible for the security of its personal  property upon the Premises
and holds Landlord harmless for any loss thereof.

          4.3 Liability Insurance. Tenant shall, obtain and keep in force during
the term of this Lease a policy of comprehensive  public liability  insurance in
the amount of not less than One Million Dollars ($1,000,000),  insuring,  Tenant
and,  as  additional  insured,  Landlord  against any  liability  arising out of
Tenant's  use,  occupancy,   or  maintenance  of  the  Premises  and  all  areas
appurtenant thereto.

          4.4 Workers'  Compensation.  Tenant  shall,  at Tenant's sole expense,
obtain  and keep in force  during  the term of this  Lease a policy of  workers'
compensation  covering any and all of its  employees who may occupy or work upon
the Premises as required by the laws and regulations of the State of California.

          4.5 Landlord's  Approval.  Each policy evidencing such insurance shall
(a) name Landlord and any other of its designees as additional  insureds (except
with respect to Tenant's own personal property and workers'  compensation),  (b)
shall contain a provision by which the insured agrees that such policy shall not
be cancelled except after thirty (30) days' written notice to Landlord,  and (c)
shall  provide  that  coverage  shall not be  limited or denied by reason of the
provisions in this Lease,  including  those relating to limitations of liability
and waivers of subrogation and other rights. For all insurance policies procured
by Tenant,  a certificate of such  insurance  shall be provided to Landlord upon
its written  request.  If Tenant  shall fail to perform  any of its  obligations
under  this  Article  4, then in  addition  to any other  remedies  it may have,
Landlord  may, but is not required to,  perform the same,  and the cost thereof,
together with interest thereon at the Default Rate,  shall be deemed  additional
rent and shall be payable upon Landlord's demand.

5. Utilities.  At all times during the Term of this Lease,  Tenant shall pay for
the cost of all utilities,  including, but without limitation, water, gas, heat,
light,  power,  electricity,  fuel,  sewer  charges,  supplied to or consumed by
Tenant  at the  Premises  together  with any  taxes  thereon  (collectively  the
"Utilities").  If Tenant shall fail to perform any of its obligations under this
Article 5, then in addition to any  remedies it may have,  Landlord  may, but is
not required to, perform the same, and the cost thereof,  together with interest
thereon  at the  Default  Rate,  shall be  deemed  additional  rent and shall be
payable upon Landlord's demand.

6. Taxes. Lessee shall pay the Real Property Taxes (which shall include any tax,
fee, levy,  assessment or charge,  or any increase  therein imposed by reason of
events occurring, or changes in applicable law taking effect, during the term of
this  Lease,  including  but not  limited  to a change in the  ownership  of the
Premises or in the improvements  thereon)  applicable to the Premises during the
term of this Lease.  All such  payments  shall be made at least 10 days prior to
the  delinquency  date of the  applicable  installment.  Lessee  shall  promptly
furnish Lessor with satisfactory evidence that such taxes have been paid.


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7. Quiet  Possession.  Upon Tenant paying all of the  obligations  hereunder and
performing all of the covenants,  conditions, and provisions on Tenant's part to
be observed and performed under this Lease,  Tenant shall have quiet  possession
of the Premises during the Term,  subject to all the  conditions,  covenants and
provisions  of this  Lease.  The  Premises  are  leased  subject  to any and all
existing encumbrances,  conditions, rights, covenants, easements,  restrictions,
rights-of-way,  and any matters of record,  applicable zoning and building laws,
restrictions  on use and such  matters  as may be  disclosed  by  inspection  or
survey.

8.   Improvements and Alterations

     8.1  Improvements  by  Tenant.   Tenant  shall  not  make  any  substantial
alterations,  renovations or  improvements or cause to be installed any fixtures
costing in excess of  $10,000  in, on, or to the  Premises  or any part  thereof
(including,  without limitation,  any structural alterations,  or any cutting or
drilling into any part of the Premises or any securing of any fixture, apparatus
or  equipment of any kind to any part of the  Premises)  unless and until Tenant
shall have caused plans and  specifications  therefor to have been prepared,  at
Tenant's expense,  by an architect or other duly qualified person and shall have
obtained  Landlord's  written approval thereof.  Tenant shall be responsible for
the cost of any tenant improvements.  Upon any expiration or termination of this
Lease,  Tenant shall remain responsible for all costs of any tenant improvements
and the  completion  thereof,  as set  forth  in the  plans  and  specifications
therefor and the portion of the costs of any tenant improvements that are unpaid
and outstanding shall be immediately due and payable by any Tenant.

     8.2  Mechanic's  Liens.  Tenant shall keep the Premises free from any liens
arising out of any work or service  performed  or material  furnished  by or for
Tenant or any person or entity claiming  through or under Tenant whether for any
tenant  improvements  or  otherwise.   Prior  to  Tenant's  performance  of  any
construction  or  other  work on or  about  the  Premises,  whether  for  tenant
improvements or otherwise, for which a lien could be filed against the Premises,
Tenant  shall take all action  which is  legally  permissible  to cause all such
liens  which then or at any time in the future  may be filed or  claimed,  to be
finally waived by all  contractors,  subcontractors,  materialmen and all others
performing or to perform any such work.  Notwithstanding  the foregoing,  if any
mechanic's or other lien shall be filed  against the Premises,  purporting to be
for labor,  services or material  furnished or to be furnished at the request of
Tenant,  then Tenant shall at its expense  cause such lien to be  discharged  of
record by payment,  bond or otherwise,  within twenty (20) days after the filing
thereof.  If Tenant  shall  fail to cause such lien to be  discharged  of record
within such twenty (20) day period,  Landlord, in addition to any other remedies
it may have,  may, but is not required to, cause such lien to be  discharged  by
payment, bond or otherwise,  without investigation as to the validity thereof or
as to any offsets or defenses thereto,  and Tenant shall, upon demand,  promptly
reimburse Landlord for all amounts paid and costs incurred, including attorneys'
fees,  in having such lien  discharged  of record  together with interest at the
Default Rate.

     8.3 Contractor's Insurance. Prior to engaging any contractor,  Tenant shall
require any contractor performing work on the Premises at Tenant's request or on
Tenant's behalf to carry and maintain such insurance in such amounts of coverage
as Landlord  may require  from time to time,  including  contractor's  liability
coverage  and  workers'  compensation  insurance  and  to  name  Landlord  as an
additional  insured  upon the  contractor's  insurance  policy for the terms and
purpose of the work upon the Premises.

9. Use of Premises.  Tenant's use and occupancy of the Premises shall be for the
purpose of  assembly,  manufacture,  warehousing,  storing  and  shipping of its
products  (the  "Products").  Tenant  shall not use or permit the Premises to be
used for any other purpose  without the prior written  consent of Landlord.  The
storage of the  Products  shall be  accomplished  in a neat and  orderly  manner
creating  proper  aisles  and not in a  manner  that  will  interfere  with  the
operation of any building systems.  Tenant shall be responsible for and promises
to  reimburse  Landlord  promptly  upon  demand for any  increase  in  insurance
premiums assessed by Landlord's property and casualty


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insurer due to Tenant's use, misuse or occupancy of the Premises.

     9.1 Prohibited  Uses.  Tenant shall not do or permit anything to be done in
or about the  Premises  which will  materially  obstruct or  interfere  with the
rights of Landlord or its employees,  or to use or allow the Premises to be used
for any improper,  immoral,  unlawful or objectionable purpose, nor shall Tenant
cause,  maintain or permit any  nuisance  in, on or about the  Premises.  Tenant
shall not  commit or allow to be  committed  any  material  waste in or upon the
Premises,  reasonable  wear and tear excepted.  Tenant shall not cause or permit
any hazardous or toxic substance, material or waste including without limitation
any oil, pollutant,  contaminant,  hazardous waste, asbestos, or other hazardous
substance,  as such term or similar terms are now defined, used or understood in
or  under  any  federal,  state,  local  or other  governmental  statute,  rule,
regulation, ordinance or order which relates in any way to the protection of the
environment  ("Environmental  Laws")  to be used,  stored,  released,  dumped or
disposed of upon the Premises in violation of the Environmental Laws.

     9.2  Compliance  with Law.  Tenant  shall not use or permit  the use of the
Premises in any way in conflict with any law or governmental rule or regulation.
Tenant shall, at Tenant's sole cost,  promptly  comply in all material  respects
with  all  such  laws  and  governmental  rules  and  regulations  and  with the
requirements  of any  board of  underwriters  or  other  similar  bodies  now or
hereafter  constituted  relating  to  the  condition,  use or  occupancy  of the
Premises  whether  or  not  expressly   ordered  to  do  so  by  the  applicable
governmental  authority.  The judgment of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant that Tenant has violated in
a material manner any statute,  regulation or rule, whether or not Landlord is a
party, shall be conclusive of the fact as between Landlord and Tenant.

10. Repairs and Maintenance.  Landlord shall, at its own cost and expense and at
all  times,  repair  and  maintain  the  exterior  walls and  foundation  of the
Premises.  Tenant shall, at Tenant's own cost and expense and at all times, keep
the Premises neat,  clean, and in a sanitary  condition,  including the neat and
orderly  storage of the  Products,  and keep and use the Premises in  accordance
with all applicable laws, ordinances,  rules,  regulations,  and requirements of
governmental  bodies and authorities.  Except as set forth in the first sentence
of this Section 10,  Tenant shall make such repairs as are necessary to maintain
the Premises in as good  condition as the Premises now are,  reasonable  use and
wear  excepted.  If Tenant refuses or neglects its duties under this Section 10,
then,  at the  expiration  of thirty  (30)  days'  written  demand to Tenant (or
without  demand in the case of emergency)  Landlord may, but is not required to,
make,  perform or cause such repairs as it deems  necessary and Tenant agrees to
reimburse Landlord promptly upon demand for the cost thereof, including interest
thereon at the Default Rate. If Landlord  refuses or neglects its duties to make
repairs to the exterior  walls and foundation of the Premises under this Section
10, then, at the  expiration  of thirty (30) days' written  demand to Tenant (or
without  demand in the case of  emergency),  Tenant may, but is not required to,
make,  perform or cause such repairs as it deems  necessary and Landlord  agrees
that Tenant may offset any amounts expended by it in making such repairs against
any amounts due and payable hereunder for the Rent.

11. Hold Harmless.  To the extent  permitted by law, and except to the extent of
Landlord's  acts or omissions  for which  Landlord is solely  negligent,  Tenant
shall  indemnify and hold Landlord  harmless from and against any and all claims
arising from, in connection with or related to (a) Tenant's use of the Premises,
(b) the conduct of Tenant's business,  (c) any activity,  work, or other things,
done, permitted,  or suffered by Tenant in or about the Premises, (d) any act or
negligence  of Tenant  or any  officer,  agent,  affiliate,  employee,  guest or
invitee of Tenant.

12. Entry by Landlord.  At any and all reasonable  times during regular business
hours,  Landlord  reserves  and shall  have the right to enter the  Premises  to
inspect  the same a  reasonable  number of  times,  to submit  the  Premises  to
prospective purchasers or tenants, to repair the Premises and any portion of the
building that Landlord may deem  necessary or  desirable,  without  abatement of
rent,


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and may for that purpose erect scaffolding and other necessary  structures where
reasonably  required by the  character of the work to be  performed,  using best
efforts to avoid  blocking the entrance to the Premises and  providing  that the
business of Tenant shall not be  interfered  with  unreasonably.  Tenant  hereby
waives  any  claim  for  damages  or  for  any  injury  or  inconvenience  to or
interference  with  Tenant's  business,  and any  loss  of  occupancy  to  quiet
enjoyment of the Premises. Landlord shall have the right to enter at any and all
times and to use any and all means  which  Landlord  may deem proper to open any
doors or  otherwise  obtain  access to the  Premises in any actual or  perceived
emergency,  without liability to Tenant,  and any entry to the Premises obtained
by Landlord by any of said means or otherwise shall not under any  circumstances
be construed or deemed to be a forcible or unlawful  entry into or a detainer of
the Premises or an eviction of Tenant from the Premises or any portion thereof.

13.  Assignment  and  Subletting.  Tenant  shall not  either  voluntarily  or by
operation of law assign, transfer,  mortgage, pledge,  hypothecate,  or encumber
this Lease or any interest therein and shall not sublet the Premises or any part
thereof or any right or privilege  appurtenant  thereto or allow any person (the
employees,  agents,  servants, and invitees of Tenant excepted) to occupy or use
the Premises or any portion thereof.  Any such assignment or subletting shall be
voidable by Landlord and may constitute a default under the terms of this Lease.
A consent by Landlord to one assignment,  subletting,  occupation, or use by any
other  person  shall not be deemed to be consent to any  subsequent  assignment,
subletting,  occupation,  or use by another person. A consent by Landlord to any
such assignment,  subletting,  occupation or use by any other person shall in no
way relieve  Tenant of any  liability  under this Lease.  It is  understood  and
agreed that  Landlord may fully assign or encumber  Landlord's  interest in this
Lease as  Landlord.  Landlord  may assign or  encumber  the Rent to any  person,
partnership, corporation, or bank, and Tenant agrees when notified in writing by
the assignee of such  assignment to make the rental  payments to assignee  under
the terms of said assignment.

14. Tenant's Default.  The occurrence of any one or more of the following events
shall constitute an event of default and breach of this Lease by Tenant:

     14.1 Failure to Pay  Obligations.  Tenant fails to make any payment of Base
Rent or any other payment required to be made by Tenant  hereunder,  as and when
due,  where such failure  shall  continue for a period of five (5) business days
after written notice thereof by Landlord to Tenant.

     14.2 Failure to Observe Other Covenants. Tenant fails to observe or perform
any of the covenants,  conditions, or provisions of this Lease to be observed or
performed by Tenant,  other than  described  in Section 12.1 herein,  where such
failure  shall  continue for a period of twenty (20) days after  written  notice
thereof by Landlord to Tenant; provided, however, that if the nature of Tenant's
default is such that more than twenty (20) days are reasonably required for cure
of such  condition,  then Tenant  shall not be deemed to be in default if Tenant
commences  such cure  within said  twenty  (20) days and  thereafter  diligently
prosecutes such cure to completion.

15. Remedies on Default.  In the event of any default or breach of this Lease by
Tenant,  Landlord may, at any time  thereafter  with or without notice or demand
and  without  limiting  Landlord  in the  exercise  of a right or  remedy  which
Landlord  may have by reason of such  default  or  breach,  exercise  any of the
following remedies:

     15.1 Termination of Possession. Landlord may terminate immediately Tenant's
right to  possession  of the  Premises by written  notice to Tenant or any other
lawful means,  terminate this Lease by written notice to Tenant, revoke Tenant's
right to any lease  concessions  and recover  the value of any such  concessions
made,  re-enter and take possession of the Premises and Tenant shall immediately
surrender possession of the Premises to Landlord.

     15.2  Removal of Personal Property.  In the event of a retaking of
possession of the Premises


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by Landlord, Tenant shall remove all personal property located thereon and, upon
failure to do so upon demand of Landlord, Landlord may remove and store the same
in any  place  selected  by  Landlord,  including  without  limitation  a public
warehouse,  at the expense and risk of Tenant.  If Tenant  shall fail to pay the
cost of  storing  any such  property  after it has been  stored  for a period of
thirty (30) days of more, Landlord may sell any or all of such personal property
at a public or private sale or auction and shall apply the proceeds of such sale
first to the cost of such  sale,  secondly  to the  payment of the  charges  for
storage, if any, and thirdly to the payment of any other sums of money which may
be due from Tenant to Landlord  under the terms of this Lease,  and the balance,
if any, to Tenant.

     15.3 Other Remedies. In addition to the foregoing,  Landlord may pursue any
other remedy now or hereafter  available to Landlord  under the laws or judicial
decisions  of  the  State  of  California.  It is  understood  and  agreed  that
Landlord's  remedies hereunder are cumulative,  and the exercise of any right or
remedy shall not  constitute  a waiver,  merger or  extinguishment  of any other
right or remedy.

16. Damage.  In the event the Premises are rendered  untenantable in whole or in
part by fire,  the  elements  or other  casualty  during the term of this Lease,
Tenant  shall  immediately  notify  Landlord,  specifically  stating any repairs
needed  to  maintain  the  Tenant's  manufacturing  operation  at the  Premises.
Landlord  may elect not to restore or rebuild the  Premises  and shall so notify
Tenant. In such an event,  Tenant may, at its option (a) vacate the Premises and
this Lease  shall  terminate  effective  thirty  (30) days after such  notice is
delivered with an abatement of the Rent payable with respect to the time period,
or (b) occupy  that  portion  of the  Premises  which  remains  tenable  with an
abatement of the Rent in the amount equal to the rent for the untenable  portion
of the  Premises,  or (c)  Tenant  may make such  repair to the  Premises  as is
required  and  desirable  to permit  Tenant to use the  Premises  for the stated
purpose, and Tenant may offset such amount expended by it in making such repairs
against any amounts due hereunder for the Rent.

17.  Eminent  Domain.  In the event of any taking or  appropriation  whatsoever,
Landlord shall be entitled to any and all awards,  payments or settlements which
may be given,  made or  ordered  and  Tenant  shall  have no claim  against  the
condemning  authority  or Landlord for the value of any  unexpired  term of this
Lease,  and Tenant  hereby  assigns to Landlord any and all claims to any award,
payments  or  settlement.  Nothing  contained  herein  shall be  deemed  to give
Landlord  any  interest in or to require  Tenant to assign to Landlord any award
made to Tenant for the taking of  personal  property or  fixtures  belonging  to
Tenant, for the interruption of or damage to Tenant's business,  or for Tenant's
moving expenses.

18. Signs.  Tenant may, at Tenant's sole expense,  place an external sign on the
Premises,  provided  such sign has been  approved  in advance by  Landlord,  and
provided  such sign does not violate any statute or regulation  existing  during
the term of this Lease.  Tenant shall pay the costs of removal of such sign upon
termination of the Lease, and such sign shall remain the property of Tenant.  At
any time during the term of this  Lease,  Landlord  may place upon the  Premises
"for lease", "for sale" or other signs.

19.  Subordination.  Tenant agrees that this Lease shall be  subordinate  to any
mortgage  or deed of  trust  that is now or may  hereafter  be  placed  upon the
Premises  and to any and all  advances to be made  thereunder,  to the  interest
thereon, and all renewals,  replacements,  and extensions thereof; provided, the
lender  secured by and named in such  mortgage  or deed of trust  shall agree in
writing to recognize this Lease of Tenant in the event of foreclosure, if Tenant
is not in default.  Tenant agrees to take all actions and to execute and deliver
all  certificates,  instruments,  documents and agreements,  including,  without
limitation,  agreements of  subordination,  waiver and attornment,  necessary or
proper to effect the foregoing.

20.  Authority of Parties.  Each of Tenant and Landlord represents and warrants
that it is a


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corporation duly organized and in good standing and that the execution, delivery
and  performance  of this  Lease  has  been  duly  authorized  by all  requisite
corporate  action.  Each  individual  executing  this  Lease  on  behalf  of the
corporation  that is a party hereto  represents  and warrants  that he or she is
duly  authorized to execute,  deliver and perform this Lease for, in the name of
and on behalf of the  respective  party,  in accordance  with the bylaws of such
corporation, and that this Lease is legally binding upon and enforceable against
such  entity in  accordance  with its terms.  Upon  request,  each of Tenant and
Landlord agrees to provide a Certificate of Officer  verifying the authority and
position of each signatory.

21.  General Provisions.  Landlord and Tenant agree to the following general
provisions:

     21.1  Waiver.  A waiver by Landlord  of any term,  covenant,  or  condition
herein  contained  shall  not be  deemed  to be a future  waiver  of such  term,
covenant, or condition,  nor the waiver of any other term, covenant or condition
herein contained. The subsequent acceptance of any payment hereunder by Landlord
shall not be deemed to be a waiver  of any  preceding  default  by Tenant of any
term, covenant, or condition of this Lease.

     21.2  Time.  Time is of the  essence  of this  Lease  and  each and all its
provisions in which performance is a factor.

     21.3 Headings.  The heading and section titles of this Lease are not a part
of this Lease and shall have no effect upon the  construction or  interpretation
of any part hereof.

     21.4 Successors and Assigns.  The covenants and conditions herein contained
subject  to the  provisions  as to  assignment,  apply to and  bind  the  heirs,
successors,  executors,  administrators,  and  permitted  assigns of the parties
hereto.

     21.5 Prior  Agreements.  This Lease  contains all of the  agreements of the
parties  hereto with  respect to any matter  covered or mentioned in this Lease,
and no prior agreements or  understandings  pertaining to any such matters shall
be effective or binding upon any party.  In case of conflict or  ambiguity,  the
terms of this Lease shall govern.

     21.6  Inability  to  Perform.  This  Lease  and the  obligations  of Tenant
hereunder  shall not be  affected  or  impaired  because  Landlord  is unable to
fulfill any of  Landlord's  obligations  hereunder or is delayed in doing so, if
such inability or delay is caused by reason of strike,  labor troubles,  or acts
of God so long as Landlord makes a good faith effort to fulfill its  obligations
promptly after the cause of such inability or delay has abated.

     21.7 Partial Invalidity.  Any provisions of this Lease which shall prove to
be invalid,  void, or illegal shall in no way affect,  impair, or invalidate any
other provision hereof, and such other provisions shall remain in full force and
effect.

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

     21.9  Governing  Law.  This Lease  shall be governed  by and  construed  in
accordance with the laws of the State of California.

     21.10 Real  Estate  Commission.  No broker is due any  finders' or brokers'
commissions with respect to this Lease or the payment of any rent hereunder.

     21.11  Accord  and  Satisfaction.  No  payment  by  Tenant  or  receipt  or
acceptance by Landlord of a lesser amount than the Rent or any other obligations
of Tenant  under  this  Lease  including  the  obligation  to pay for any tenant
improvements, herein stipulated, shall be deemed to be other than


<PAGE>


on account of the stipulated amount nor shall Landlord's acceptance of any check
or payment accompanied by and endorsement or statement be deemed to result in an
accord and  satisfaction of Landlord's right to recover the balance of such Rent
or pursue any remedy provided in this Lease.

     21.12 Subrogation Waiver. Landlord and Tenant each hereby release the other
and waive all rights of recovery  against  the other for loss or damage  arising
out of the perils  described  in any policy of insurance in force at the time of
the loss to the extent permissible under such policies.

     21.13  Notice.  Any notices or other  communications  required or permitted
hereunder or otherwise in connection  herewith  shall be in writing and shall be
deemed  to have been duly  given  when  delivered  in person or  transmitted  by
facsimile  transmission  or on receipt after dispatch by express,  registered or
certified mail, postage prepaid, addressed, as follows:

          If to Landlord:
          Production Realty, Inc.
          260 North Elm Street
          Westfield, MA 01085
          Attention:  Stewart B. Reed

          If to Tenant:
          Pacific/Air Balance, Inc.
          260 North Elm Street
          Westfield, MA   01085
          Attention: Stephen M. Shea

     21.14 Survival. All agreements, covenants, warranties,  representations and
indemnification  contained  herein or made in writing  pursuant  to the terms of
this Lease by or on behalf of Tenant shall be deemed  material and shall survive
the expiration or sooner termination of this Lease.

DATED as of the date first set forth above.

                              LANDLORD:
                             PRODUCTION REALTY, INC.


                             By:/S/ STEWART B. REED
                                 Stewart B. Reed



                              TENANT:
                            PACIFIC/AIR BALANCE, INC.


                           By:/S/ RICHARD J. MCKNIGHT
                              Richard J. McKnight,
                        Vice President & General Manager