STANDARD INDUSTRIAL LEASE -- GROSS
                   American Industrial Real Estate Association


1. Parties.  This Lease,  dated, for reference purposes only, December 19, 1996,
is made by and between OLEN  PROPERTIES  CORP.,  A Florida  Corporation  (herein
called  "Lessor")  and,  ADVANCED  AERODYNAMICS  & STRUCTURES,  INC., a Delaware
Corporation (herein called "Lessor").

2.  Premises.  Lessor  hereby leases to Lessee and Lessee leases from Lessor for
the term, at the rental,  and upon all of the conditions set forth herein,  that
certain  real  property  situated  in  the  County  of  Los  Angeles,  State  of
California,  commonly known as 3499-3501 Lakewood Blvd., Long Beach,  California
and described as the improved  building and a portion of the airport  tarmac and
parking  lot.  Said  real  property,  including  the land  and all  improvements
therein, is herein called the "Premises."

3. Term.

     3.1. Term.  The term of this Lease shall be for one (1) year  commencing on
January  1, 1997 and  ending on  December  31,  1997  unless  sooner  terminated
pursuant to any provision hereof.

     3.2. Delay in Possession.  Notwithstanding  said commencement  date, if for
any reason  Lessor cannot  deliver  possession of the Premises to Lessee on said
date,  Lessor  shall not be subject to any  liability  therefor,  nor shall such
failure affect the validity of this Lease or the obligations of Lessee hereunder
or extend the term  hereof,  but in such case,  Lessee shall not be obligated to
pay rent until  possession  of the  Premises is  tendered  to Lessee;  provided,
however,  that if Lessor  shall not have  delivered  possession  of the Promises
within  sixty (60) days from said  commencement  date,  Lessee  may, at Lessee's
option,  by notice in writing to Lessor within ten (10) days thereafter,  cancel
this Lease,  in which event the parties shall be discharged from all obligations
hereunder;  provided further,  however, that if such written notice of Lessee is
not received by Lessor within said ten (10) day period, Lessee's right to cancel
this Lease hereunder shall terminate and be of no further force or effect.

     3.3.  Early  Possession.  If Lessee  occupies  the  Premises  prior to said
commencement  date,  such occupancy  shall be subject to all provisions  hereof,
such occupancy shall not advance the termination date, and Lessee shall pay rent
for such period at the initial  monthly  rates set forth below  except for Early
Possession period.

4. Rent Lessee shall pay to Lessor as rent for the Premises, monthly payments of
$15,000.00,  in  advance,  on the  first day of each  month of the term  hereof.
Lessee  shall  pay  Lessor  upon the  execution  hereof  $30,000.00  as rent for
January,  1997 plus a Security  Deposit  equal to one month's  rent  pursuant to
Article 5 herein.  Rent for any period  during the term hereof which is for less
than one month  shall be a pro rata  portion of the  monthly  installment.  Rent
shall be payable in lawful  money of the United  States to Lessor at the address
stated  herein or to such other  persons  or at such other  places as Lessor may
designate in writing. 5. Security Deposit. Lessee shall deposit with Lessor upon
execution  hereof  $15,000.00 as security for Lessee's  faithful  performance of
Lessee's obligations hereunder. If Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,


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Lessor may use,  apply or retain  all or any  portion  of said  deposit  for the
payment of any rent or other  charge in default or for the  payment of any other
sum to which Lessor may become  obligated by reason of Lessee's  default,  or to
compensate  Lessor for any loss or damage  which Lessor may suffer  thereby.  If
Lessor so uses or applies  all or any  portion  of said  deposit,  Lessee  shall
within ten (10) days after written demand  therefor  deposit cash with Lessor in
an amount  sufficient  to restore  said  deposit to the full amount  hereinabove
stated and Lessee's  failure to do so shall be a material  breach of this Lease.
If the monthly rent shall,  from time to time,  increase during the term of this
Lease, Lessee shall thereupon deposit with Lessor additional security deposit so
that the amount of security  deposit  held by Lessor shall at all times bear the
same  proportion to current rent as the original  security  deposit bears to the
original  monthly  rent set forth in  paragraph  4 hereof.  Lessor  shall not be
required to keep said  deposit  separate  from its general  accounts.  If Lessee
performs all of Lessee's obligations hereunder, said deposit, or so much thereof
as has not  theretofore  been  applied by  Lessor,  shall be  returned,  without
payment of interest or other  increment  for its use, to Lessee (or, at Lessor's
option,  to the last assignee,  if any, of Lessee's  interest  hereunder) at the
expiration  of the term hereof,  and after Lessee has vacated the  Premises.  No
trust  relationship  is created herein between Lessor and Lessee with respect to
said Security Deposit.

NOTE: SECURITY DEPOSIT SHALL NOT BE APPLIED TOWARD THE LAST MONTH'S RENT.

6. Use:

     6.1. Use. The premises shall be used and occupied only for general  office,
aviation  services  and  assembly  as approved by the City of Long Beach and the
Long Beach Airport Authority or any other use which is reasonably comparable and
for no other purpose.

     6.2. Compliance with Law.

          (a) Lessor warrants to Lessee that the Premises, in its state existing
on the date that the Lease term  commences,  but  without  regard to the use for
which  Lessee  will  use  the  Premises,  does  not  violate  any  covenants  or
restrictions of record, or any applicable building code, regulation or ordinance
in effect on such Lease term  commencement  date.  In the event it is determined
that this  warranty has been  violated,  then it shall be the  obligation of the
Lessor, after written notice from Lessee, to promptly, at Lessor's sole cost and
expense, rectify any such violation. In the event Lessee does not give to Lessor
written notice of the violation of this warranty within six months from the date
that the Lease term commences, the correction of same shall be the obligation of
the Lessee at Lessee's  sole cost.  The  warranty  contained  in this  paragraph
6.2(a)  shall be of no  force or  effect  if,  prior to the date of this  Lease,
Lessee was the owner or occupant  of the  Premises,  and, is such event,  Lessee
shall correct any such violation at Lessee's sole cost.

          (b) Except as provided in paragraph 6.2(a),  Lessee shall, at Lessee's
expense,  comply  promptly  with all  applicable  statutes,  ordinances,  rules,
regulations,  orders,  covenants and restrictions of record, and requirements in
effect  during the term or any part of the term  hereof,  regulating  the use by
Lessee of the Premises.  Lessee shall not use nor permit the use of the Premises
in any manner that will tend to create waste or a nuisance or, if there shall be
more than one tenant in the  building  containing  the  Premises,  shall tend to
disturb such other tenants.



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     6.3. Condition of Premises.

          (a) Lessor  shall  deliver the  Premises  to Lessee  clean and free of
debris on Lease  commencement  date (unless Lessee is already in possession) and
Lessor further warrants to Lessee that the plumbing, lighting, air conditioning,
heating,  and loading doors in the Premises shall be in good operating condition
on the Lease  commencement  date. In the event that it is  determined  that this
warranty has been  violated,  then it shall be the  obligation of Lessor,  after
receipt of written notice from Lessee setting forth with  specificity the nature
of the violation,  to promptly,  at Lessor's sole cost,  rectify such violation.
Lessee's  failure to give such written  notice to Lessor within thirty (30) days
after the Lease  commencement  date shall cause the conclusive  presumption that
Lessor has  complied  with all of Lessor's  obligation  hereunder.  The warranty
contained  in this  paragraph  6.3(a) shall be of no force or effect if prior to
the date of this Lease, Lessee was the owner or occupant of the Premises.

          (b) Except as otherwise provided in this Lease,  Lessee hereby accepts
the Premises in their condition  existing as of the Lease  commencement  date or
the date that Lessee takes  possession  of the  Premises,  whichever is earlier,
subject to all applicable zoning,  municipal,  county and state laws, ordinances
and  regulations  governing  and  regulating  the use of the  Premises,  and any
covenants or restrictions of record,  and accepts this Lease subject thereto and
to all matters  disclosed  thereby and by any exhibits  attached hereto.  Lessee
acknowledges that neither Lessor nor Lessor's agent has made any  representation
or warranty  as to the present or future  suitability  of the  Premises  for the
conduct of Lessee's business.

7. Maintenance, Repairs and Alternations.

     7.1. Lessor's  Obligations.  Subject to the provisions of Paragraphs 6, 7.2
and 9 and  except for  damage  caused by any  negligent  or  intentional  act or
omission  of Lessee,  Lessee's  agents,  employees,  or  invitees in which event
Lessee shall repair the damage,  Lessor, at Lessor's expense, shall keep in good
order,  condition and repair the  foundations,  exterior  walls and the exterior
roof of the  Premises.  Lessor  shall not,  however,  be obligated to paint such
exterior,  nor shall  Lessor be  required to maintain  the  interior  surface of
exterior walls,  windows,  doors or plate glass. Lessor shall have no obligation
to make repairs under this  Paragraph 7.1 until a reasonable  time after receipt
of written  notice of the need for such  repairs.  Lessee  expressly  waives the
benefits of any statute now or hereafter in effect which would otherwise  afford
Lessee the right to make repairs at Lessor's  expense or to terminate  the Lease
because of Lessor's  failure to keep the Premises in good order,  condition  and
repair.

     7.2. Lessee's Obligations.

          (a) Subject to the  provisions  of Paragraph 6, 7.1 and 9, Lessee,  at
Lessee's  expense,  shall keep in good order,  condition and repair the Premises
and every part  thereof  (whether or not the damaged  portion of the Premises or
the means of repairing the same are reasonably or readily  accessible to Lessee)
including,  without  limiting the  generality  of the  foregoing,  all plumbing,
heating,  air  conditioning,  (Lessee shall  procure and  maintain,  at Lessee's
expense,   an  air  conditioning  system  maintenance   contract)   ventilating,
electrical and lighting facilities and equipment within the Premises,  fixtures,
interior walls and interior surface of exterior walls, ceilings, windows, doors,
plate glass,  and skylights,  located within the Premises,  and all landscaping,
driveways, parking lots, fences


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and signs located in the Premises and all sidewalks and parkways adjacent to the
Premises.  Lessee expressly waives the benefit of any statute now or hereinafter
in effect  which  would  otherwise  afford  Lessee the right to make  repairs at
Lessor's  expense or to terminate this Lease because of Lessor's failure to keep
the Premises in good order, condition and repair.

          (b) If  Lessee  fails  to  perform  Lessee's  obligations  under  this
Paragraph 7.2 or under any other paragraph of this Lease, Lessor may at Lessor's
option enter upon the  Premises  after 10 days' prior  written  notice to Lessee
(except in the case of  emergency,  in which case no notice shall be  required),
perform such  obligations on Lessee's behalf and put the Premises in good order,
condition and repair, and the cost thereof together with interest thereon at the
maximum rate then  allowable by law shall be due and payable as additional  rent
to Lessor together with Lessee's next rental installment.

          (c) On the last day of the term hereof, or on any sooner  termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted,  clean and free of debris.  Lessee shall repair
any damage to the  Premises  occasioned  by the  installation  or removal of its
trade  fixtures,  furnishings  and  equipment.  Notwithstanding  anything to the
contrary otherwise stated in this Lease, Lessee shall leave the air lines, power
panels,  electrical distribution systems,  lighting fixtures, space heaters, air
conditioning,  plumbing and fencing on the premises in good operating condition.
(except for rear exterior storage shed).

     7.3. Alterations and Additions.

          (a) Lessee shall not, without Lessor's prior written consent, make any
alternations,  improvements, additions, or Utility Installations in, on or about
the Premises,  except for  nonstructural  alterations  not  exceeding  $2,500 in
cumulative costs during the term of this Lease. In any event,  whether or not in
excess of $2,500 in cumulative costs,  Lessee shall make no change or alteration
to the  exterior of the  Premises  nor the  exterior of the  building(s)  on the
Premises without  Lessor's prior written consent.  As used in this Paragraph 7.3
the term "Utility  Installation"  shall mean carpeting,  window  coverings,  air
lines, power panels,  electrical distribution systems,  lighting fixtures, space
heaters, air conditioning, plumbing, and fencing. Lessor may require that Lessee
remove  any or all of  said  alterations,  improvements,  additions  or  Utility
Installations  at the  expiration of the term, and restore the Premises to their
prior condition.  Lessor may require Lessee to provide Lessor,  at Lessee's sole
cost and  expense,  a lien and  completion  bond in an  amount  equal to one and
one-half times the estimated cost of such improvements, to insure Lessor against
any liability for mechanic's and materialmen's liens and to insure completion of
the work. Should Lessee make any alterations, improvements, additions or Utility
Installations  without  the prior  approval of Lessor,  Lessor may require  that
Lessee remove any or all of the same.

          (b) Any alterations,  improvements, additions or Utility Installations
in, or about the Premises  that Lessee  shall desire to make and which  requires
the consent of the Lessor  shall be presented  to Lessor in written  form,  with
proposed detailed plans. If Lessor shall give its consent,  the consent shall be
deemed  conditioned  upon Lessee  acquiring  a permit to do so from  appropriate
governmental  agencies,  the furnishing of a copy thereof to Lessor prior to the
commencement  of the work and the compliance by Lessee of all conditions of said
permit in a prompt and expeditious manner.



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          (c) 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 in
the  Premises,  which  claims  are or  may  be  secured  by  any  mechanics'  or
materialmen's  lien against the Premises or any interest  therein.  Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in the  Premises,  and  Lessor  shall  have the  right to post  notices  of
non-responsibility in or on the Premises as provided by law. If Lessee shall, in
good faith,  contest the validity of any such lien, claim or demand, then Lessee
shall,  at its sole expense  defend itself and Lessor against the same and shall
pay and satisfy any such adverse  judgment that may be rendered  thereon  before
the enforcement  thereof against the Lessor or the Premises,  upon the condition
that if Lessor  shall  require  Lessee  shall  furnish  to Lessor a surety  bond
satisfactory to Lessor in an amount equal to such contested lien claim or demand
indemnifying Lessor against liability for the same and holding the Premises free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's  attorneys fees and costs in participating in such action if Lessor
shall decide it is to its bests interest to do so.

          (d) Unless Lessor  requires their  removal,  as set forth in Paragraph
7.3(a),  all  alterations,  improvements,  additions  and Utility  Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may be made on the  Premises,  shall  become  the  property  of Lessor and
remain upon and be surrendered  with the Premises at the expiration of the term.
Notwithstanding  the provisions of this Paragraph 7.3(d) Lessee's  machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without  material  damage to the Premises,  shall remain the property of
Lessee and may be  removed by Lessee  subject  to the  provisions  of  Paragraph
7.2(c).

8. Insurance; Indemnity.

     8.1.  Liability  Insurance - Lessee.  Lessee  shall,  at Lessee's  expense,
obtain  and keep in force  during  the term of this  Lease a policy of  Combined
Single Limit Bodily Injury and Property  Damage  insurance  insuring  Lessee and
Lessor against any liability arising out of the use, occupancy or maintenance of
the Premises and all other areas appurtenant thereto. Such insurance shall be in
an amount not less than  $1,000,000  per  occurrence.  The policy  shall  insure
performance  by Lessee of the  indemnity  provisions  of this  Paragraph  8. The
limits of said  insurance  shall not,  however,  limit the  liability  of Lessee
hereunder.

     8.2.  Liability  Insurance - Lessor.  Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined  Single Limit  Bodily  Injury
and Property Damage  Insurance,  insuring  Lessor,  but not Lessee,  against any
liability  arising out of the  ownership,  use,  occupancy or maintenance of the
Premises and all areas appurtenant thereto in an amount not less than $1,000,000
per occurrence.

     8.3. Property  Insurance.  Lessor shall obtain and keep in force during the
term of this Lease a policy or policies of insurance  covering loss or damage to
the Premises, but not Lessee's fixtures,  equipment or tenant improvements in an
amount not to exceed the full replacement  value thereof,  as the same may exist
from time to time,  providing  protection against all perils included within the
classification of fire, extended coverage, vandalism,  malicious mischief, flood
(in the  event  same is  required  by a lender  having a lien on the  Premises),
special  extended  perils  ("all  risk"  as such  term is used in the  insurance
industry) but not plate glass  insurance.  In addition,  the Lessor shall obtain
and keep in force,  during  the term of this  Lease,  a policy  of rental  value
insurance covering


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<PAGE>

a period of one year,  with loss payable to Lessor,  which  insurance shall also
cover all real estate taxes and insurance costs for said period.

     8.4. Payment of Premium Increase.

          (a) Lessee shall pay to Lessor, during the term hereof, in addition to
the rent,  the amount of any  increase in premiums  for the  insurance  required
under  Paragraphs  8.2 and 8.3 over and above such premiums paid during the Base
Period,  as  hereinafter  defined,  whether such premium  increase  shall be the
result of the  nature of  Lessee's  occupancy,  any act or  omission  of Lessee,
requirements of the holder of a mortgage or deed of trust covering the Premises,
increased  valuation of the Premises,  or general rate  increases.  In the event
that the Premises have been occupied  previously,  the words "Base Period" shall
mean the last  twelve  months of the  prior  occupancy.  In the  event  that the
Premises  have never been  previously  occupied,  the premiums  during the "Base
Period" shall be deemed to be the lowest premiums reasonably obtainable for said
insurance assuming the most nominal use of the Premises.  Provided,  however, in
lieu of the Base  Period,  the parties may insert a dollar  amount at the end of
this sentence which figure shall be considered as the insurance  premium for the
Base Period - $1997 Base Year  Budget.  In no event,  however,  shall  Lessee be
responsible  for any  portion of the  premium  cost  attributable  to  liability
insurance coverage in excess of $1,000,000 procured under paragraph 8.2.

          (b) Lessee  shall pay any such premium  increases to Lessor  within 30
days  after  receipt  by  Lessee  of a copy of the  premium  statement  or other
satisfactory  evidence of the amount due. If the insurance  policies  maintained
hereunder  cover other  improvements  in addition to the Premises,  Lessor shall
also deliver to Lessee a statement of the amount of such  increase  attributable
to the  Premises  and  showing in  reasonable  detail,  the manner in which such
amount was  computed.  If the term of this Lease  shall not expire  concurrently
with the expiration of the period covered by such insurance,  Lessee's liability
for premium increases shall be prorated on an annual basis.

          (c) If the Premises are part of a larger  building,  then Lessee shall
not be  responsible  for paying any increase in the property  insurance  premium
caused by the acts or omissions of any other tenant of the building of which the
Premises are a part.

     8.5. Insurance Policies. Insurance required hereunder shall be in companies
holding a "General Policyholders Rating" of at least B plus or such other rating
as may be required by a lender  having a lien on the  Premises,  as set forth in
the most current issue of "Best Insurance Guide." Lessee shall deliver to Lessor
copies of  policies of  liability  insurance  required  under  Paragraph  8.1 or
certificates  evidencing  the existence and amounts of such  insurance.  No such
policy  shall be  cancelable  or  subject  to  reduction  of  coverage  or other
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 renewals or "binders" thereof, or Lessor may order
such  insurance  and charge the cost  thereof to Lessee,  which  amount shall be
payable by Lessee upon demand. Lessee shall not do or permit to be done anything
which shall invalidate the insurance policies referred to in Paragraph 8.3.

     8.6.  Waiver of  Subrogation.  Lessee and Lessor  each  hereby  release and
relieve the other,  and waive their entire  right of recovery  against the other
for loss or damage  arising  out of or incident  to the perils  insured  against
under paragraph 8.3, which perils occur in, on or about the Premises,


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whether due to the  negligence of Lessor or Lessee or other  agents,  employees,
contractors  and/or  invitees.  Lessee  and Lessor  shall,  upon  obtaining  the
policies of insurance required  hereunder,  give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is contained in this
Lease.

     8.7.  Indemnity.  Lessee shall  indemnify and hold harmless Lessor from and
against any and all claims  arising from Lessee's use of the  Premises,  or from
the conduct of  Lessee's  business or from any  activity,  work or things  done,
permitted or suffered by Lessee in or about the Premises or elsewhere  and shall
further  indemnify and hold harmless  Lessor from and against any and all claims
arising  from any breach or  default in the  performance  of any  obligation  on
Lessee's part to be performed under the terms of this Lease, or arising from any
negligence of the Lessee, or any of Lessee's agents,  contractors, or employees,
and from and  against  all costs,  attorney's  fees,  expenses  and  liabilities
incurred  in the defense of any such claim or any action or  proceeding  brought
thereon;  and in case any  action or  proceeding  be brought  against  Lessor by
reason of any such claim,  Lessee upon notice from Lessor  shall defend the same
at Lessee's  expense by counsel  satisfactory to Lessor.  Lessee,  as a material
part of the  consideration  to  Lessor,  hereby  assumes  all risk of  damage to
property or injury to persons,  in, upon or about the Premises  arising form any
cause and Lessee hereby waives all claims in respect thereof against Lessor.

     8.8.  Exemption of Lessor from Liability.  Lessee hereby agrees that Lessor
shall  not be  liable  for  injury to  Lessee's  business  or any loss of income
therefrom or for damage to the goods,  wares,  merchandise  or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the  Premises,  nor shall  Lessor be liable  for injury to the person of Lessee,
Lessee's  employees,  agents or  contractors,  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, sprinklers, wires,
appliances,  plumbing,  air conditioning or lighting fixtures, or from any other
cause,  whether the said damage or injury results from  conditions  arising upon
the  Premises or upon other places and  regardless  of whether the cause of such
damage or injury or the means of repairing the same is  inaccessible  to Lessee,
Lessor  shall not be liable for any damages  arising  from any act or neglect of
any other tenant, if any, of the building in which the Premises are located.

9. Damage or Destruction.

     9.1. Definitions

          (a) "Premises  Partial Damage" shall herein mean damage or destruction
to the  Premises  to the extent  that the cost of repair is less than 50% of the
fair  market  value  of  the  Premises  immediately  prior  to  such  damage  or
destruction.  "Premises  Building  Partial  Damage"  shall herein mean damage or
destruction  to the building of which the Premises are a part to the extent that
the cost of repair is less than 50% of the fair market value of such building as
a whole immediately prior to such damage or destruction.

          (b)  "Premises  Total   Destruction"   shall  herein  mean  damage  or
destruction to the Premises to the extent that the cost of repair is 50% or more
of the fair market  value of the  Premises  immediately  prior to such damage or
destruction.  "Premises  Building Total Destruction" shall herein mean damage or
destruction  to the building of which the Premises are a part to the extent that
the


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cost of repair is 50% or more of the fair  market  value of such  building  as a
whole immediately prior to such damage or destruction.

          (c) "Insured Loss" shall herein mean damage or  destruction  which was
caused  by an  event  required  to be  covered  by the  insurance  described  in
paragraph 8.

     9.2. Partial Damage - Insured Loss. Subject to the provisions of paragraphs
9.4,  9.5 and 9.6,  if at any time during the term of this Lease there is damage
which is an Insured  Loss and which  falls into the  classification  of Premises
Partial  Damage or Premises  Building  Partial  Damage,  then Lessor  shall,  at
Lessor's sole cost, repair such damage, but not Lessee's fixtures,  equipment or
tenant  improvements,  as soon as  reasonably  possible  and  this  Lease  shall
continue in full force and effect.

     9.3.  Partial  Damage  -  Uninsured  Loss.  Subject  to the  provisions  of
Paragraphs  9.4, 9.5 and 9.6, if at any time during the term of this Lease there
is damage which is not an Insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage, unless caused by
a  negligent  or willful  act of Lessee (in which  event  Lessee  shall make the
repairs at Lessee's  expense),  Lessor may at Lessor's  option either (i) repair
such damage as soon as reasonably  possible at Lessor's expense,  in which event
this Lease shall continue in full force and effect,  or (ii) give written notice
to Lessee  within  thirty  (30) days  after the date of the  occurrence  of such
damage of Lessor's  intention to cancel and terminate this Lease, as of the date
of the occurrence of such damage. In the event Lessor elects to give such notice
of Lessor's intention to cancel and terminate this Lease,  Lessee shall have the
right  within ten (10) days after the  receipt  of such  notice to give  written
notice  to Lessor of  Lessee's  intention  to  repair  such  damage at  Lessee's
expense,  without  reimbursement  from  Lessor,  in which event this Lease shall
continue in full force and effect, and Lessee shall proceed to make such repairs
as soon as reasonably possible.  If Lessee does not give such notice within such
10-day period this Lease shall be canceled and  terminated as of the date of the
occurrence of such damage.

     9.4. Total Destruction.  If at any time during the term of this Lease there
is damage,  whether or not an Insured Loss,  (including  destruction required by
any  authorized  public  authority),  which  falls  into the  classification  of
Premises Total  Destruction or Premises Building Total  Destruction,  this Lease
shall automatically terminate as of the date of such total destruction.

     9.5. Damage Near End of Term.

          (a) If at any time  during  the last  six  months  of the term of this
Lease there is damage,  whether or not an Insured  Loss,  which falls within the
classification of Premises Partial Damage,  Lessor may at Lessor's option cancel
and  terminate  this Lease as of the date of occurrence of such damage by giving
written notice to Lessee of Lessor's  election to do so within 30 days after the
occurrence of such damage.

          (b) Notwithstanding  paragraph 9.5(a), in the event that Lessee has an
option to extend or renew this Lease,  and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be  exercised at all, no later than 20 days after the  occurrence  of an Insured
Loss falling  within the  classification  of Premises  Partial Damage during the
last six months of the term of this Lease.  If Lessee duly exercises such option
during said 20 day period, Lessor shall, at Lessor's expense, repair such damage
as soon as reasonably possible and this


                                      - 8 -
<PAGE>

Lease shall continue in full force and effect.  If Lessee fails to exercise such
option during said 20 day period,  then Lessor may at Lessor's option  terminate
and  cancel  this  Lease as of the  expiration  of said 20 day  period by giving
written notice to Lessee of Lessor's  election to do so within 10 days after the
expiration of said 20 day period,  notwithstanding  any term or provision in the
grant of option to the contrary.

     9.6. Abatement of Rent; Lessee's Remedies.

          (a) In the event of damage  described  in  paragraphs  9.2 or 9.3, and
Lessor or Lessee repairs or restores the Premises  pursuant to the provisions of
this  Paragraph 9, the rent payable  hereunder  for the period during which such
damage,  repair or  restoration  continues  shall be abated in proportion to the
degree to which  Lessee's use of the Premises is impaired.  Except for abatement
of rent,  if any,  Lessee  shall  have no claim  against  Lessor  for any damage
suffered by reason of any such damage, destruction, repair or restoration.

          (b) If Lessor  shall be  obligated  to repair or restore the  Premises
under the  provisions of this  Paragraph 9 and shall not commence such repair or
restoration  within 90 days after such obligations  shall accrue,  Lessee may at
Lessee's  option cancel and terminate this Lease by giving Lessor written notice
of  Lessee's  election  to do so at any time prior to the  commencement  of such
repair or  restoration.  In such event this Lease shall terminate as of the date
of such notice.

     9.7.  Termination  -  Advance  Payments.  Upon  termination  of this  Lease
pursuant to this Paragraph 9, an equitable  adjustment  shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition,  return to  Lessee so much of  Lessee's  security  deposit  as has not
theretofore been applied by Lessor.

     9.8.  Waiver.  Lessor and Lessee waive the provisions of any statutes which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.

10. Real Property Taxes.

     10.1.  Payment of Tax Increase.  Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Premises;  provided,  however, that
Lessee  shall pay,  in  addition  to rent,  the  amount,  if any,  by which real
property taxes applicable to the Premises  increase (unless such increase is due
to Lessor's construction of additional  improvements over the fiscal real estate
tax year 1996 1997. Such payment shall be made by Lessee within thirty (30) days
after  receipt of Lessor's  written  statement  setting forth the amount of such
increase and the computation thereof. If the term of this Lease shall not expire
concurrently with the expiration of the tax fiscal year,  Lessee's liability for
increased  taxes for the last partial  lease year shall be prorated on an annual
basis.

     10.2.  Additional  Improvements.  Notwithstanding  paragraph  10.1  hereof,
Lessee shall pay to Lessor upon demand  therefor the entirety of any increase in
real property tax if assessed solely by reason of additional improvements placed
upon the Premises by Lessee or at Lessee's request.

     10.3.  Definition of "Real  Property  Tax". As used herein,  the term "real
property tax" shall include any form of real estate tax or assessment,  general,
special, ordinary or extraordinary, and any


                                      - 9 -
<PAGE>

license fee,  commercial rental tax,  improvement bond or bonds, levy or tax and
any other real property  taxes,  such as traffic taxes (other than  inheritance,
personal income or estate taxes) imposed on the Premises by any authority having
the  direct or  indirect  power to tax,  including  any city,  state or  federal
government,  or any school,  agricultural,  sanitary,  fire, street, drainage or
other improvement  district thereof,  as against any legal or equitable interest
of Lessor in the  Premises or in the real  property of which the  Premises are a
part, as against Lessor's right to rent other income  therefrom,  and as against
Lessor's  business of leasing the Premises.  The term "real  property tax" shall
also include any tax, fee, levy,  assessment of charge (i) in  substitution  of,
partially or totally,  any tax,  fee,  levy,  assessment  or charge  hereinabove
included  within the  definition of "real  property  tax", or (ii) the nature of
which was hereinabove  included within the definition of "real property tax," or
(iii) which is imposed for a service or right not charged prior to June 1, 1978,
or, if previously charged,  has been increased since June 1, 1978, or (iv) which
is imposed as a result of a  transfer,  either  partial  or total,  of  Lessor's
interest  in the  Premises  or which is  added to a tax or  charge  hereinbefore
included  within the definition of real property tax by reason of such transfer,
or (v) which is  imposed  by reason of this  transaction,  any  modification  or
changes hereto, or any transfers hereof.

     10.4.  Joint  Assessment.  If the  Premises  are not  separately  assessed,
Lessee's  liability shall be an equitable  proportion of the real property taxes
for all of the land and  improvements  included within the tax parcel  assessed,
such  proportion  to be  determined  by Lessor  from the  respective  valuations
assigned  in the  assessor's  work  sheets or such other  information  as may be
reasonably available.  Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

     10.5. Personal Property Taxes.

          (a) Lessee shall pay prior to delinquency  all taxes assessed  against
and levied upon trade  fixtures,  furnishings,  equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures,  furnishings,  equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.

          (b) If any of Lessee's said personal  property  shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee
within 10 days after  receipt  of a written  statement  setting  forth the taxes
applicable to Lessee's property.

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone and other  utilities and services  supplied to the Premises,  together
with any taxes  thereon.  If any such  services  are not  separately  metered to
Lessee,  Lessee shall pay a reasonable  proportion to be determined by Lessor of
all charges jointly metered with other premises.

12. Assignment and Subletting.

     12.1.  Lessor's  Consent  Required.  Lessee  shall  not  voluntarily  or by
operation of law assign,  transfer,  mortgage,  sublet, or otherwise transfer or
encumber all of any part of Lessee's  interest in this Lease or in the Premises,
without  Lessor's  prior written  consent,  which Lessor shall not  unreasonably
withhold.  Lessor shall respond to Lessee's  request for consent  hereunder in a
timely manner and any attempted assignment,  transfer, mortgage,  encumbrance or
subletting  without such consent shall be void, and shall constitute a breach of
this Lease.



                                     - 10 -
<PAGE>

     12.2.  Lessee Affiliate.  Notwithstanding  the provisions of paragraph 12.1
hereof,  Lessee may  assign or sublet  the  Premises,  or any  portion  thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee,  or to any  corporation  resulting form the
merger or consolidation  with Lessee,  or to any person or entity which acquires
all the  assets of  Lessee  as a going  concern  of the  business  that is being
conducted on the Premises,  provided that said assignee  assumes,  in full,  the
obligations of Lessee under this Lease.  Any such  assignment  shall not, in any
way,  affect or limit the liability of Lessee under the terms of this Lease even
if after such  assignment or subletting  the terms of this Lease are  materially
changed or altered without the consent of Lessee,  the consent of whom shall not
be necessary.

     12.3. No Release of Lessee.  Regardless of Lessor's consent,  no subletting
or assignment  shall release Lessee of Lessee's  obligation or alter the primary
liability of Lessee to pay the rent and to perform all other  obligations  to be
performed by Lessee  hereunder.  The acceptance of rent by Lessor from any other
person  shall not be deemed  to be a waiver by Lessor of any  provision  hereof.
Consent  to one  assignment  or  subletting  shall not be deemed  consent to any
subsequent assignment or subletting.  In the event of default by any assignee of
Lessee  or any  successor  of  Lessee,  in the  performance  of any of the terms
hereof,  Lessor may proceed  directly  against  Lessee  without the necessity of
exhausting  remedies  against said  assignee.  Lessor may consent to  subsequent
assignments or subletting of this Lease or amendments or  modifications  to this
Lease with assignees of Lessee,  without  notifying  Lessee, or any successor of
Lessee, and without obtaining its or their consent thereto and such action shall
not relieve Lessee of liability under this Lease.

     12.4.  Attorneys's  Fees.  In the event  Lessee  shall assign or sublet the
Premises or request the consent of Lessor to any  assignment or subletting or if
Lessee  shall  request the  consent of Lessor for any act Lessee  proposes to do
then Lessee shall pay Lessor's reasonable  attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $350.00 for each such request.

13. Defaults; Remedies.

     13.1.  Defaults.  The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by Lessee:

          (a) The vacating or abandonment of the Premises by Lessee.

          (b) The  failure  by Lessee to make any  payment  of rent or any other
payment  required to be made by Lessee  hereunder,  as and when due,  where such
failure shall  continue for a period of three days after written  notice thereof
from Lessor to Lessee.  In the event that Lessor  serves Lessee with a Notice to
Pay Rent or Quit pursuant to applicable  Unlawful  Detainer statutes such Notice
to Pay  Rent  or  Quit  shall  also  constitute  the  notice  required  by  this
subparagraph.

          (c) The failure by Lessee to observe or perform any of the  covenants,
conditions  or  provisions  of this Lease to be observed or performed by Lessee,
other than  described in paragraph (b) above,  where such failure shall continue
for a period of 30 days  after  written  notice  hereof  from  Lessor to Lessee;
provided, however, that if the nature of Lessee's default is such that more than
30 days are reasonably required for its cure, then Lessee shall not be deemed to
be in  default if Lessee  commenced  such cure  within  said  30-day  period and
thereafter diligently prosecutes such cure to completion.




                                                      - 11 -
<PAGE>



          (d) (i) The making by Lessee of any general  arrangement or assignment
for the benefit of  creditors;  (ii) Lessee  becomes a "debtor" as defined in 11
U.S.C.  Section 101 or any successor  statute thereto (unless,  in the case of a
petition filed against Lessee, the same is dismissed within 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  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 30 days.  Provided,  however, in the event that
any provision of this paragraph  13.1(d) is contrary to any applicable law, such
provision shall be of no force or effect.

          (e) The  discovery  by Lessor that any  financial  statement  given to
Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor
in interest of Lessee or any guarantor of Lessee's obligation hereunder, and any
of them, was materially false.

     13.2.  Remedies.  In the event of any such  material  default  or breach by
Lessee, Lessor may at any time thereafter,  with or without notice or demand and
without  limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such default or 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 of the Premises to Lessor. In such event Lessor
shall be  entitled  to recover  from  Lessee all  damages  incurred by Lessor by
reason of Lessee's default 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  attorney's fees, and any
real  estate  commission  actually  paid;  the worth at the time of award by the
court having jurisdiction thereof of the amount by which the unpaid rent for the
balance  of the term  after the time of such  award  exceeds  the amount of such
rental loss for the same period that Lessee proves could be reasonably  avoided;
that portion of the leasing  commission  paid by Lessor pursuant to Paragraph 15
applicable to the unexpired term of this Lease.

          (b) Maintain  Lessee's  right to  possession  in which case this Lease
shall  continue  in effect  whether  or not  Lessee  shall  have  abandoned  the
Premises.  In such  event,  Lessor  shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

          (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial  decisions  of the state  wherein the Premises are located.
Unpaid  installments  of rent and other unpaid  monetary  obligations  of Lessee
under the  terms of this  Lease  shall  bear  interest  from the date due at the
maximum rate then allowable by law.

     13.3. Default by Lessor. Lessor shall not be in default unless Lessor fails
to perform  obligations  required of Lessor within a reasonable  time, but in no
event later than thirty (30) days after  written  notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises whose
name and address  shall have  theretofore  been  furnished to Lessee in writing,
specifying  wherein  Lessor  has  failed to perform  such  obligation;  provided
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance


                                     - 12 -
<PAGE>

then Lessor shall not be in default if Lessor commences  performance within such
30-day period and thereafter diligently prosecutes the same to completion.

     13.4. Late Charges.  Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder  will cause Lessor to incur costs
not  contemplated  by this Lease,  the exact  amount of which will be  extremely
difficult to ascertain.  Such costs include,  but are not limited to, processing
and accounting  charges,  and late charges which may be imposed on Lessor by the
terms of any mortgage or trust deed covering the Premises.  Accordingly,  if any
installment  of rent or any other sum due from  Lessee  shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
late charge equal to 6% of such overdue  amount.  The parties  hereby agree that
such late charge  represents a fair and reasonable  estimate of the costs Lessor
will incur by reason of late payment by Lessee.  Acceptance  of such late charge
by Lessor shall in no event constitute a waiver of Lessee's default with respect
to such overdue  amount,  nor prevent  Lessor from  exercising  any of the other
rights  and  remedies  granted  hereunder.  In the event  that a late  charge is
payable  hereunder,   whether  or  not  collected,  for  three  (3)  consecutive
installments  of rent,  then rent shall  automatically  become  due and  payable
quarterly in advance,  rather than monthly,  notwithstanding  paragraph 4 of any
other provision of this Lease to the contrary.

     13.5.  Impounds.  In the event  that a late  charge is  payable  hereunder,
whether  or not  collected,  for  three  (3)  installments  of rent or any other
monetary obligation of Lessee under the terms of this Lease, Lessee shall pay to
Lessor,  if Lessor shall so request,  in addition to any other payments required
under this Lease, a monthly advance installment, payable at the same time as the
monthly  rent,  as estimated  by Lessor,  for real  property  tax and  insurance
expenses on the  Premises  which are  payable by Lessee  under the terms of this
Lease.  Such fund  shall be  established  to  insure  payment  when due,  before
delinquency,  of any or all such real property taxes and insurance premiums.  If
the amounts paid to Lessor by Lessee under the  provisions of this paragraph are
insufficient  to discharge the  obligations  of Lessee to pay such real property
taxes and insurance premiums as the same become due. Lessee shall pay to Lessor,
upon Lessor's  demand,  such additional sums 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 default in the
obligations  of Lessee to perform under this Lease,  then any balance  remaining
from funds paid to Lessor under the  provisions  of this  paragraph  may, at the
option of Lessor, be applied to the payment of any monetary default of Lessee in
lieu of  being  applied  to the  payment  of  real  property  tax and  insurance
premiums.

14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent domain,  or sold under the threat of the exercise of said power
(all of which are herein called  "condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever  first occurs.  If more than 10% of the floor area of the
building  on the  Premises,  or more than 25% of the land  area of the  Premises
which is not occupied by any building, is taken by condemnation,  Lessee may, at
Lessee's  option,  to be  exercised  in writing  only 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 rent shall be reduced in


                                     - 13 -
<PAGE>

the  proportion  that the floor area of the  building  taken  bears to the total
floor area of the building situated on the Premises.  No reduction of rent shall
occur if the only area  taken is that  which  does not have a  building  located
thereon.  Any award for the taking of all or any part of the Premises  under the
power of eminent domain or any payment made under threat of the exercise of such
power  shall be the  property  of Lessor,  whether  such award  shall be made as
compensation  for  diminution in value of the leasehold or for the taking of the
fee, or as severance damages;  provided,  however, that Lessee shall be entitled
to any award for loss of or damage to  Lessee's  trade  fixtures  and  removable
personal  property.  In the event that this Lease is not terminated by reason of
such  condemnation,  Lessor shall to the extent of severance damages received by
Lessor in connection with such  condemnation,  repair any damage to the Premises
caused by such condemnation except to the extent that Lessee has been reimbursed
therefor by the condemning  authority.  Lessee shall pay any amount in excess of
such severance damages required to complete such repair.

15. Broker's Fee.

          (a) Upon execution of this Lease by both parties,  Lessor shall pay to
N/A Licensed real estate broker(s),  a fee as set forth in a separate  agreement
between  Lessor  and  said  broker(s),  or in the  event  there  is no  separate
agreement  between Lessor and said  broker(s),  the sum of $per  agreement,  for
brokerage services rendered by said broker(s) to Lessor in this transaction.

          (b)  Lessor  further  agrees  that if Lessee  exercises  any Option as
defined in paragraph 39.1  of this Lease,  which is granted to Lessee under this
Lease,  Lessor shall pay said broker(s) a fee in accordance with the schedule of
said broker(s) in effect at the time of execution of this Lease.

          (c)  Lessor  agrees to pay said fee not only on  behalf of Lessor  but
also on behalf of any person,  corporation,  association, or other entity having
an ownership  interest in said real property or any part thereof,  when such fee
is due  hereunder.  Any transferee of Lessor's  interest in this Lease,  whether
such  transfer is by agreement  or by operation lf law,  shall be deemed to have
assumed  Lessor's  obligation  under this  Paragraph 15.  Said broker shall be a
third party beneficiary of the provisions of this Paragraph 15.

16. Estoppel Certificate.

          (a) Lessee  shall at any time upon not less than ten (10) days'  prior
written  notice  from  Lessor  execute,  acknowledge  and  deliver  to  Lessor a
statement in writing  (i) certifying  that this Lease is unmodified  and in full
force and effect (or, if modified,  stating the nature of such  modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which  the rent and  other  charges  are paid in  advance,  if any,  and
(ii) acknowledging  that  there are not,  to  Lessee's  knowledge,  any  uncured
defaults on the part of Lessor hereunder, or specifying such defaults if any are
claimed.  Any such statement may be conclusively  relied upon by any prospective
purchaser or encumbrancer of the Premises.

          (b) At Lessor's  option,  Lessee's  failure to deliver such  statement
within such time shall be a material breach of this Lease or shall be conclusive
upon  Lessee  (i) that  this  Lease  is  in  full  force  and  effect,   without
modification  except as may be  represented  by Lessor,  (ii) that  there are no
uncured  defaults  in  Lessor's  performance,  and  (iii) that  no more than one
month's  rent has been paid in  advance or such  failure  may be  considered  by
Lessor as a default by Lessee under this Lease.


                                     - 14 -
<PAGE>


          (c) If Lessor desires to finance,  refinance, or sell the Premises, or
any part  thereof,  Lessee  hereby  agrees to deliver to any lender or purchaser
designated  by Lessor such  financial  statements of Lessee as may be reasonably
required by such lender or  purchaser.  Such  statements  shall include the past
three years' financial statements of Lessee. All such financial statements shall
be received by Lessor and such lender or  purchaser in  confidence  and shall be
used only for the purposes herein set forth.

17.  Lessor's  Liability.  The term  "Lessor" as used herein shall mean only the
owner or owners at the time in question of the fee title or a lessee's  interest
in a  ground  lease  of the  Premises,  and  except  as  expressly  provided  in
Paragraph 15,  in the event of any  transfer of such title or  interest,  Lessor
herein named (and in case of any subsequent transfers then the grantor) shall be
relieved  from and after the date of such  transfer of all liability as respects
Lessor's obligations thereafter to be performed,  provided that any funds in the
hands of  Lessor  or the then  grantor  at the time of such  transfer,  in which
Lessee has an  interest,  shall be delivered  to the  grantee.  The  obligations
contained in this Lease to be performed by Lessor  shall,  subject as aforesaid,
be binding on Lessor's  successors  and assigns,  only during  their  respective
periods of ownership.

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

19. Interest on Past-Due Obligations.  Except as expressly herein provided,  any
amount due to Lessor not paid when due shall bear  interest at the maximum  rate
then  allowable  by law from the date due.  Payment of such  interest  shall not
excuse or cure any default by Lessee under this Lease,  provided,  however, that
interest  shall not be payable  on late  charges  incurred  by Lessee nor on any
amounts upon which late charges are paid by Lessee.

20. Time of Essence. Time is of the essence.

21.  Additional  Rent.  Any monetary  obligations  of Lessee to Lessor under the
terms of this Lease shall be deemed to be rent.

22.  Incorporation  of Prior  Agreements;  Amendments.  This Lease  contains all
agreements of the parties with respect to any matter mentioned  herein. No prior
agreement or  understanding  pertaining  to any such matter shall be  effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification.  Except as otherwise stated in this Lease,  Lessee
hereby  acknowledges  that neither the real estate broker listed in Paragraph 15
hereof  nor any  cooperating  broker on this  transaction  nor the Lessor or any
employees  or  agents  of any of said  persons  has  made  any  oral or  written
warranties  or  representations  to Lessee  relative to the  condition or use by
Lessee  of said  Premises  and  Lessee  acknowledges  that  Lessee  assumes  all
responsibility  regarding the Occupational  Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and  regulations  in effect  during the term of this Lease  except as  otherwise
specifically stated in this Lease.

23. Notices.  Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified mail, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee
or to Lessor at the address noted below the signature of the


                                     - 15 -
<PAGE>

respective  parties, as the case may be. Either party may by notice to the other
specify a different address for notice purposes except that upon Lessee's taking
possession of the Premises,  the Premises shall constitute  Lessee's address for
notice  purposes.  A copy of all notices  required or  permitted  to be given to
Lessor  hereunder shall be concurrently  transmitted to such party or parties at
such addresses as Lessor may from time to time hereafter  designate by notice to
Lessee.

24.  Waivers.  No waiver by Lessor  or any  provision  hereof  shall be deemed a
waiver of any other  provision  hereof or of any subsequent  breach by Lessee of
the same or any other  provision.  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 act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding  breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless  of  Lessor's  knowledge  of such  preceding  breach  at the  time of
acceptance of such rent.

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.

26. Holding Over. If Lessee, with Lessor's consent, remains in possession of the
Premises or any part  thereof  after the  expiration  of the term  hereof,  such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease  pertaining to the  obligations  of Lessee,  but all options and rights of
first  refusal,  if any,  granted  under the terms of this Lease shall be deemed
terminated and be of no further effect during said month to month tenancy.

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. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.

29. Binding Effect;  Choice of Law. Subject to any provisions hereof restricting
assignment  or   subletting   by  Lessee  and  subject  to  the   provisions  of
Paragraph 17, this Lease shall bind the parties, their personal representatives,
successors  and  assigns.  This Lease shall be governed by the laws of the State
wherein the Premises are located.

30. Subordination.

          (a) This Lease, at Lessor's option, shall be subordinate to any ground
lease,  mortgage,  deed of trust, or any other  hypothecation or security now or
hereafter  placed upon the real property of which the Premises are a part and to
any  and  all  advances  made  on the  security  thereof  and  to all  renewals,
modifications,    consolidations,    replacements   and   extensions    thereof.
Notwithstanding  such  subordination,  Lessee's right to quiet possession of the
Premises  shall not be  disturbed  if Lessee  is not in  default  and so long as
Lessee shall pay the rent and observe and perform all of the  provisions of this
Lease,  unless this Lease is otherwise  terminated pursuant to its terms. If any
mortgagee,  trustee or ground lessor shall elect to have this Lease prior to the
lien of its  mortgage,  deed of trust or ground  lease,  and shall give  written
notice  thereof to Lessee,  this Lease shall be deemed  prior to such  mortgage,
deed of trust, or ground lease, whether this Lease is dated prior or


                                     - 16 -
<PAGE>

subsequent  to the date of said  mortgage,  deed of trust or ground lease or the
date of recording thereof.

          (b) Lessee agrees to execute any  documents  required to effectuate an
attornment,  a  subordination  or to make  this  Lease  prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be. Lessee's failure to
execute such documents  within 10 days after written  demand shall  constitute a
material  default by Lessee  hereunder,  or, at Lessor's  option,  Lessor  shall
execute such documents on behalf of Lessee as Lessee's attorney-in-fact.  Lessee
does  hereby  make,  constitute  and  irrevocably  appoint  Lessor  as  Lessee's
attorney-in-fact  and in  Lessee's  name,  place  and  stead,  to  execute  such
documents in accordance with this paragraph 30(b).

31. Attorney's Fees. If either party or the broker named herein brings an action
to enforce the terms hereof or declare rights hereunder, the prevailing party in
any such  action,  on trial or  appeal,  shall  be  entitled  to his  reasonable
attorney's  fees to be paid by the  losing  party  as fixed  by the  court.  The
provisions  of this  paragraph  shall inure to the  benefit of the broker  named
herein who seeks to enforce a right hereunder.

32.  Lessor's  Access.  Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times for the purpose of inspecting the same, showing
the same to  prospective  purchasers,  lenders,  or  lessees,  and  making  such
alterations,  repairs,  improvements  or  additions  to the  Premises  or to the
building  of which they are a part as Lessor may deem  necessary  or  desirable.
Lessor may at any time place on or about the Premises  any  ordinary  "For Sale"
signs and  Lessor may at any time  during  the last 120 days of the term  hereof
place on or about the  Premises  any  ordinary  "For Lease"  signs,  all without
rebate of rent or liability to Lessee.

33.  Auctions.  Lessee shall not  conduct,  nor permit to be  conducted,  either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained  Lessor's  prior  written  consent.  Notwithstanding  anything  to  the
contrary in this Lease,  Lessor  shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34. Signs.  Lessee shall not place any sign upon the Premises  without  Lessor's
prior written consent except that Lessee shall have the right, without the prior
permission  of Lessor  to place  ordinary  and  usual  for rent or sublet  signs
thereon.

35.  Merger.  The  voluntary or other  surrender  of this Lease by Lessee,  or a
mutual  cancellation  thereof,  or a  termination  by  Lessor,  shall not work a
merger,  and  shall,  at the  option of Lessor,  terminate  all or any  existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all such subtenancies.

36. Consents. Except for paragraph 33 hereof, wherever in this Lease the consent
of one party is required to an act of the other party, such consent shall not be
unreasonably withheld.

37.  Guarantor.  In the event  that there is a  guarantor  of this  Lease,  said
guarantor shall have the same obligations as Lessee under this Lease.

38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants,  conditions and provisions on Lessee's part
to be observed and


                                     - 17 -
<PAGE>

performed hereunder,  Lessee shall have quiet possession of the Premises for the
entire  term  hereof  subject  to all of  the  provisions  of  this  Lease.  The
individuals  executing  this Lease on behalf of Lessor  represent and warrant to
Lessee  that  they are  subject  to all of the  provisions  of this  Lease.  The
individuals  executing  this Lease on behalf of Lessor  represent and warrant to
Lessee that they are fully  authorized  and legally  capable of  executing  this
Lease on behalf of Lessor and that such  execution  is binding  upon all parties
holding an ownership interest in the Premises.

39. Options.

     39.1  Definition.  As used in this  paragraph  the word  "Options"  has the
following  meaning:  (1) the right or option to extend the term of this Lease or
to renew  this  Lease or to extend or renew any lease  that  Lessee has on other
property  of  Lessor;  (2) the  option  or right of first  refusal  to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease  other  property of Lessor or the right of first offer to lease
other property of Lessor;  (3) the right or option to purchase the Premises,  or
the right of first refusal to purchase the Premises, or the right of first offer
to purchase  the Premises of the right or option to purchase  other  property of
Lessor,  or the right of first refusal to purchase  other  property of Lessor or
the right of first offer to purchase other property of Lessor.

     39.2  Options  Personal.  Each  Option  granted to Lessee in this Lease are
personal  to Lessee and may not be  exercised  or be  assigned,  voluntarily  or
involuntarily,  by or to any  person  or entity  other  than  Lessee,  provided,
however,  the Option may be exercised by or assigned to any Lessee  Affiliate as
defined in  paragraph 12.2  of this Lease.  The Options herein granted to Lessee
are not assignable separate and apart from this Lease.

     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
option to extend or renew this Lease has been so exercised.

     39.4 Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option,  notwithstanding
any  provision  in the  grant of  Option to the  contrary,  (i) during  the time
commencing from the date Lessor gives to Lessee a notice of default  pursuant to
paragraph 13.1(b)  or 13.1(c) and continuing  until the default  alleged in said
notice of default is cured,  or (ii) during the period of time commencing on the
date  after a  monetary  obligation  to Lessor  is due from  Lessee  and  unpaid
(without  any  necessity  for notice  thereof to  Lessee)  continuing  until the
obligation is paid, or (iii) at any time after an event of default  described in
paragraphs 13.1(a), 13.1(d), or 13.1(e) (without any necessity of Lessor to give
notice of such default to Lessee), or (iv) in the event that Lessor has given to
Lessee three or more notices of default  under  paragraph 13.1(b),  where a late
charge  becomes  payable  under  paragraph 13.4  for each of such  defaults,  or
paragraph 13.1(c),  whether or not the defaults  are cured,  during the 12 month
period prior to the time that Lessee intends to exercise the subject 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).



                                     - 18 -
<PAGE>

          (c) All  rights of  Lessee  under the  provisions  of an Option  shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely  exercise of the Option,  if, after such  exercise and during the term of
this Lease,  (i) Lessee  fails to pay to Lessor a monetary  obligation of Lessee
for a period of 30 days after such obligation becomes due (without any necessity
of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to commence to
cure a default specified in paragraph 13.1(c) within 30 days after the date that
Lessor gives notice to Lessee of such default and/or Lessee fails  thereafter to
diligently prosecute said cure to completion,  or (iii) Lessee commits a default
described in  paragraph 13.1(a),  13.1(d) or 13.1(e)  (without any  necessity of
Lessor to give notice of such default to Lessee), or (iv) Lessor gives to Lessee
three or more notices of default  under  paragraph 13.1(b),  where a late charge
becomes  payable  under  paragraph 13.4  for each  such  default,  or  paragraph
13.1(c), whether or not the defaults are cured.

40.  Multiple  Tenant  Building.  In the event that the  Premises  are part of a
larger building or group of buildings, then Lessee agrees that it will abide by,
keep and observe all reasonable rules and regulations which Lessor may make from
time to time for the management,  safety,  care, and cleanliness of the building
and grounds,  the parking of vehicles and the preservation of good order therein
as well as for the  convenience of other  occupants and tenants of the building.
The  violations  of any such  rules and  regulations  shall be deemed a material
breach of this Lease by Lessee.

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 Lessee, its agents and
invitees from acts of third parties.

42. Easements.  Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
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 shall sign any of the
aforementioned  documents  upon  request  of Lessor  and  failure to do so shall
constitute a material breach of this Lease.

43.  Performance  Under Protest.  If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment  "under  protest"  and such payment  shall not be
regarded as a voluntary  payment,  and there shall survive the right on the part
of said  party  to  institute  suit for  recovery  of such  sum.  If it shall be
adjudged  that  there was no legal  obligation  on the part of said party to pay
such sum or any part  thereof,  said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.

44.  Authority.  If  Lessee is a  corporation,  trust,  or  general  or  limited
partnership,  each  individual  executing  this  Lease on behalf of such  entity
represents and warrants that he or she is duly authorized to execute and deliver
this  lease on behalf of said  entity.  If  Lessee  is a  corporation,  trust or
partnership,  Lessee  shall,  within  thirty (30) days after  execution  of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.



                                     - 19 -
<PAGE>

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. Addendum.  See Addenda A,  B, and C and Exhibit A attached hereto and made a
part hereof.

47. Rent  Payments.  Rent  payments  are due on the first of each month.  Please
remit to Olen Properties  Corp., 7 Corporate  Plaza,  Newport Beach,  California
92660. LESSOR DOES NOT INVOICE ON A MONTHLY BASIS.

          LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
          TERM AND PROVISION  CONTAINED  HEREIN AND, BY 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.

          IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN  PREPARED FOR  SUBMISSION
          TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION
          IS MADE BY THE AMERICAN  INDUSTRIAL REAL ESTATE  ASSOCIATION OR BY THE
          REAL  ESTATE  BROKER  OR ITS  AGENTS  OR  EMPLOYEES  AS TO  THE  LEGAL
          SUFFICIENCY,  LEGAL EFFECT,  OR TAX  CONSEQUENCES OF THIS LEASE OR THE
          TRANSACTION  RELATING THERETO;  THE PARTIES SHALL RELY SOLELY UPON THE
          ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES
          OF THIS LEASE.



                                     - 20 -
<PAGE>

The parties hereto have executed this Lease at the place on the dates  specified
immediately adjacent to their respective signature.

Executed at:  Newport Beach on December 23, 1996

Address:  7 Corporate Plaza, Newport
          Beach, CA  92660



OLEN PROPERTIES CORP., a Florida
corporation


By: /s/ Charles C. Aufhammer
     Charles C. Aufhammer
     Director of Marketing

"LESSOR"                                                    (Corporate seal)

Executed at:  ___________________________________
On:______________________________________________
Address:_________________________________________

ADVANCED AERODYNAMICS &
STRUCTURES, INC. a Delaware
corporation

By: /s/ Gene Comfort
     Gene Comfort
     Executive Vice President

"LESSEE"                                                    (Corporate seal)



                                     - 21 -
<PAGE>

                                  ADDENDUM "A"


             BY AND BETWEEN:                    OLEN PROPERTIES CORP.
                                                A FLORIDA CORPORATION

             AS LESSOR; AND:                    ADVANCED AERODYNAMICS &
                                                STRUCTURES, INC., A DELAWARE
                                                CORPORATION
             AS LESSEE

             TO LEASE DATED:                    DECEMBER 19, 1996
______________________________________________________________________________

1.       EXTERIOR STORAGE:

          Except  for  aircraft,  Lessee  shall  neither  store nor permit to be
          stored, any goods,  machinery,  merchandise,  equipment,  or any other
          items  whatsoever,  on the  exterior of the  building or parking  lot,
          other than wholly within a closed building,  without the prior written
          consent of the City of Long Beach.

2.       PARKING:

          Deleted in its entirety.

3.       SIGN CRITERIA:

          These  regulations  are  established in order to assure that all signs
          comply with the signage ordinances in the City of Long Beach, the Long
          Beach  Airport  Complex,  and in order to  maintain  a  continuity  in
          appearances  throughout the project.  Conformance  to the  regulations
          will be strictly enforced.

         A.       GENERAL REQUIREMENTS

               1. The signs  shall be  constructed  and  installed  at  Lessee's
               expense.

               2. No electrical or audible signs shall be permitted.

               3. Except as provided herein, no advertising  placards,  banners,
               pennants,  names,  insignia,  trademarks,  or  other  descriptive
               material  shall be affixed or maintained  upon the glass panes or
               exterior walls of the building.


         B.       SPECIFICATIONS

               1. Placement of the sign on the building shall be in the specific
               location and  installation  shall be by the method  designated by
               Lessor.



<PAGE>

               2. The materials, colors, and dimensions of the signs are subject
               to the City of Long  Beach,  the  Long  Beach  Airport  authority
               requirements  and shall  meet  Lessor's  reasonable  approval  in
               advance of installation.

4.       COMMON AREA CHARGES:

          Lessee  acknowledges  a  portion  of its base rent  includes  Lessee's
          prorata  share of the 1997 base year  common  are  budget.  The budget
          includes,  but is not limited to Lessor's estimated costs of landscape
          maintenance,  parking lot  sweeping,  maintenance  and  repair,  trash
          removal,  management fees, utilities which are not separately metered,
          and all other  costs or expenses  incurred by Lessor  under this Lease
          which are not otherwise  reimbursed by tenants of the project.  Should
          Lessor's  common area  budget  increase  in 1997 or  thereafter,  then
          Lessee's  prorata share of such increases shall be passed on to Lessee
          annually beginning January 1, 1998, pursuant to Articles 7.2 and 11 of
          this Lease.  Should Lessor's common area budget decrease,  then Lessor
          shall credit the  difference to Lessee's next monthly  installment  of
          rent. Lessee's prorata share of the project is: 70%.

          Lessee's  $15,000.00  per month rent  includes the above  "Common Area
          Charges" for 1997.

          In no event shall Lessee have increases in taxes, insurance and common
          area expenses for the first twelve months of this lease term.

5.       DECLARATION OF COVENANTS AND RESTRICTIONS:

          Lessee acknowledges that his leasehold estate is part of a Development
          subject to Covenants,  Conditions,  and  Restrictions  of a land lease
          held by the City of Long Beach.  Lessee agrees to accept its leasehold
          estate subject to the aforementioned  Land Lease and agrees to perform
          and comply with any and all restrictions set forth by the City of Long
          Beach or to make adequate provisions to permit entry and other actions
          by Lessor  for the  purpose of  performing  and  complying  with these
          restrictions.

6.       Lessee is leasing the Building and grounds in "as is" condition.

7.       Lessee shall be responsible for its own trash pick-up.

8.        Lessee  acknowledges that the area marked in blue on Exhibit "A" which
          includes the outside shed, exterior electrical panel and exterior area
          for  compressor  hook-up are available for Lessee's use for the entire
          lease term. Commencing with the first day of the Option Period, should
          Lessee exercise same, Lessor shall have the right to remove said shed,
          panel and compressor pad to allow for  construction  of an addition to
          the  building.  Lessor  will give Lessee a minimum of thirty (30) days
          notice of its intent to remove these and Lessee will promptly relocate
          its personal property to accommodate Lessor.

9.       HAZARDOUS SUBSTANCES:

          Reportable Uses Requires  Consent.  The term "Hazardous  Substance" as
          used in  this  Lease  shall  mean  any  product,  substance,  chemical
          material or waste whose presence, nature,



<PAGE>

          quantity and/or intensity of existence,  use,  manufacture,  disposal,
          transportation,  spill,  release  or  effect  either  by  itself or in
          combination  with other  materials  expected to be on the  Premises is
          either:  (i)  potentially  injurious  to the public  health  safety or
          welfare, the environment or the Premises,  (ii) regulated or monitored
          by any  governmental  authority,  or (iii) a basis  for  liability  of
          Lessor to any governmental  agency or third party under any applicable
          statute or common law theory.  Hazardous Substance shall include,  but
          not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any
          products, by-products or fractions thereof. Lessee shall not engage in
          any  activity  in,  on or  about  the  premises  which  constitutes  a
          Reportable  Use  (as  hereinafter  defined)  of  Hazardous  Substances
          without the express prior written  consent of Lessor and compliance in
          a  timely  manner  (at  Lessee's  sole  cost  and  expense)  with  all
          applicable law.  "Reportable  Use" shall mean (i) the  installation or
          use of any above or below ground  storage tank,  (ii) the  generation,
          possession,  storage, use, transportation,  or disposal of a Hazardous
          Substance  that  requires a permit  from,  or with  respect to which a
          report, notice, registration, or business plan is required to be filed
          with, any  governmental  authority.  Reportable Use shall also include
          Lessee being responsible for the presence in, on or about the Premises
          of a Hazardous  Substance  with  respect to which any  applicable  law
          requires  that a notice be given to persons  entering or occupying the
          Premises or neighboring properties.  "Reportable Use" does not include
          the possession,  storage or use of gasoline,  lubricating oil or other
          petroleum  products  reasonably  required  to be used by Lessee in the
          normal course of Lessee's  business.  Notwithstanding  the  foregoing,
          Lessee may without Lessor's prior consent,  but in compliance with all
          applicable  law, use any ordinary and customary  materials  reasonably
          required to be used by Lessee in the normal curse of Lessee's business
          permitted on the Premises, so long as such use is not a Reportable Use
          and does not expose the  Premises  or  neighboring  properties  to any
          meaningful  risk of  contamination  or damage or expose  Lessor to any
          liability  therefor.   In  addition,   Lessor  may  (but  without  any
          obligation  to do so)  condition its consent to the use or presence of
          any  Hazardous  Substance  activity  or  storage  tank by Lessee  upon
          Lessee's  giving Lessor such additional  assurances as Lessor,  in its
          reasonable discretion,  deems necessary to protect itself, the public,
          the Premises and the  environment  against  damage,  contamination  or
          injury  and/or  liability  therefrom or therefor,  including,  but not
          limited  to,  the  installation   (and  removal  on  or  before  Lease
          expiration  or  earliest  removal  on or before  Lease  expiration  or
          earliest termination) of reasonably necessary protective modifications
          to the Premises (such as concrete encasement) and/or the deposit of an
          additional Security Deposit.

          Duty to Inform Lessor.  If Lessee knows,  or has  reasonable  cause to
          believe,  that a  Hazardous  Substance,  or a condition  involving  or
          resulting from same, has come to be located in, on, under or about the
          Premises,  other than as  previously  consented  to by Lessor,  Lessee
          shall  immediately give written notice of such fact to Lessor.  Lessee
          shall also  immediately  give Lessor a copy of any statement,  report,
          notice,  registration,  application,  permit,  business plan, license,
          claim,   action  or  proceeding   given  to,  or  received  from,  any
          governmental  authority  or  private  party,  or persons  entering  or
          occupying  the Premises,  concerning  the  presence,  spill,  release,
          discharge of, or exposure to, any Hazardous Substance or contamination
          in, on, or about the  Premises,  including but not limited to all such
          documents  as may be involved in any  Reportable  Uses  involving  the
          Premises.

          Indemnification.  Lessee  shall  indemnify,  protect,  defend and hold
          Lessor, its agents, employees,  lenders and ground lessor, if any, and
          the Premises harmless from and against any



<PAGE>

          and all loss of rents and/or damages, liabilities,  judgements, costs,
          claims,  liens,  expenses,  penalties,  permits,  and  attorney's  and
          consultant's fees arising out of or involving any Hazardous  Substance
          or storage  tank  brought  onto the Premises by or for Lessee or under
          Lessee's  control.  Lessee's  obligations  under this Paragraph  shall
          include,  but not be limited to the  effects of any  contamination  or
          injury to person,  property or the environment  created or suffered by
          Lessee,  and the cost of  investigation  (including  consultant's  and
          attorney's fees and testing), removal, remediation, restoration and/or
          abatement thereof, or of any contamination therein involved, and shall
          survive  the  expiration  or earlier  termination  of this  Lease.  No
          termination,  cancellation or release agreement entered into by Lessor
          and Lessee shall release Lessee from its obligations  under this Lease
          with  respect  to  Hazardous   Substances  or  storage  tanks,  unless
          specifically  so  agreed  by  Lessor  in  writing  at the time of such
          agreement.

10.      EARLY POSSESSION AGREEMENT:

          Lessor agrees to grant Lessee early  occupancy of said  Premises,  the
          date to be December 24, 1996.  Lease payments shall not commence until
          January 1, 1997. Lessor shall have no liability or responsibility  for
          damages to the personal  property  of, or any loss  suffered by Lessee
          through  vandalism,  theft,  or destruction of the property by fire or
          other causes. It is agreed by Lessee and Lessor that all the terms and
          conditions of the lease are to be in full force and effect,  except as
          to rent, as of the date of Lessee's possession of subject Premises.




<PAGE>


                                  ADDENDUM "B"


             BY AND BETWEEN                     OLEN PROPERTIES CORP.
                                                A FLORIDA CORPORATION

             AS LESSOR; AND                     ADVANCED AERODYNAMICS &
                                                STRUCTURES, INC., A DELAWARE
                                                CORPORATION
             AS LESSEE

             TO LEASE DATED:                    DECEMBER 19, 1996
______________________________________________________________________________

1.   No  sign,  placard,  picture,  advertisement,   name  or  notice  shall  be
     inscribed, displayed or printed or affixed on or to any part of the outside
     or inside of the building  without the written  consent of Lessor first had
     and obtained and Lessor shall have the right to remove and destroy any such
     sign, placard, picture, advertisement, name or notice without notice to and
     at the expense of Lessee.

     All approved signs or lettering on doors shall be printed, painted, affixed
     or inscribed at the expense of Lessee by a person approved by the Lessor.

     Lessee  shall not place  anything  or allow  anything to be placed near the
     glass of any window,  door,  partition  or wall which may appear  unsightly
     from outside the Premises;  provided,  however, that the Lessor may furnish
     and install a building  standard window  covering at all exterior  windows.
     Lessee shall not without prior written consent of Lessor cause or otherwise
     install sunscreen on any window.

2.   The sidewalks, halls, passages, exists, entrances, elevators and stairways,
     driveways,  and parking areas shall not be obstructed by Lessees or used by
     them  for any  purpose  other  than  for  ingress  and  egress  from  their
     respective Premises.

3.   Lessee shall be solely  responsible  for all existing locks or installation
     of any new or  additional  locks or bolts on any  doors or  windows  of the
     Premises  and  agrees to  provide  keys to Lessor  for all such  locks upon
     vacation of Premises.

4.   The toilet rooms, urinals, wash bowls and other apparatus shall not be used
     for any  purpose  other  than that for which they were  constructed  and no
     foreign  substance of any kind  whatsoever  shall be thrown therein and the
     expense of any breakage,  stoppage,  or damage resulting from the violation
     of this  rule  shall be borne by the  Lessee  who,  or whose  employees  or
     invitees shall have caused it.

5.   Lessee  shall not  overload  the floor of the Premises or in any way deface
     the Premises or any part thereof.



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6.   Lessee shall not use, keep or permit to be used or kept any foul or noxious
     gas (excluding  aviation fuel) or substances in the Premises,  or permit or
     suffer  the  Premises  to be  occupied  or used in a  manner  offensive  or
     objectionable to the Lessor or other occupants of the Building by reason of
     noise, odors and/or vibrations,  or interfere in any way with other Lessees
     or those having business therein, nor shall any animals or birds be brought
     in or kept in or about the Premises or the Building.

7.   No cooking  shall be done or permitted by any Lessee on the  Premises,  nor
     shall the premises be used for washing  clothes,  for  lodging,  or for any
     improper, objectionable or immoral purpose.

8.   Lessee  shall  not  keep in the  Premises  or the  Building  any  kerosene,
     gasoline or inflammable or combustible fluid or material, or use any method
     of heating or air  conditioning  other than that  supplied  or  approved in
     writing by the  Lessor,  except as same is approved to be stored or used in
     accordance with the regulations of all applicable codes of the City of Long
     Beach and the Long Beach Airport Authority.

9.   Lessor will direct electricians as to where and how telephone and telegraph
     wires are to be introduced.  No boring or cutting for wires will be allowed
     without the consent of the Lessor. The locations of telephones,  call boxes
     and other office equipment  affixed to the premises shall be subject to the
     approval of Lessor.

10.  Lessor  reserves the right to exclude or expel from the Building any person
     who, in the judgment of Lessor,  is  intoxicated  or under the influence of
     liquor or drugs,  or who shall in any manner do any act in violation of any
     of the rules and regulations of the Building.

11.  Lessee shall not disturb,  solicit, or canvass any occupant of the Building
     and shall cooperate to prevent same.

12.  Without the written consent of Lessor, Lessee shall not use the name of the
     Building in connection  with or in promoting or advertising the business of
     Lessee except as Lessee's address.

13.  Lessor  shall have the right to control and operate the public  portions of
     the Building, and the public facilities,  and heating and air conditioning,
     as well as facilities  furnished for the common use of the Lessees, in such
     manner as it deems best for the benefit of the Lessees generally.

14.  All garbage and refuse shall be placed by Lessee in the  containers  at the
     location prepared by Lessor for refuse collection, in the manner and at the
     times and places  specified  by Lessor.  Lessee shall not burn any trash or
     garbage of any kind in or about the Leased  premises or the business  Park.
     All  cardboard  boxes must be "broken  down"  prior to being  placed in the
     trash container. All styrofoam chips must be bagged or other wise contained
     prior to  placement  in the  trash  container,  so as not to  constitute  a
     nuisance. Pallets may



<PAGE>



     not be  disposed  of in the trash bins or  enclosures.  It is the  Lessee's
     responsibility to dispose of pallets by alternative means.

     Should any garbage or refuse not be  deposited  in the manner  specified by
     Lessor,  Lessor may after  three (3) hours  verbal  notice to Lessee,  take
     whatever action necessary to correct the infracture at Lessee's expense.

15.  No aerial  antenna  shall be erected on the roof or  exterior  walls of the
     Leased Premises, or on the grounds,  without in each instance,  the written
     consent of Lessor first being obtained.  Any aerial or antenna so installed
     without such written  consent  shall be subject to removal by Lessor at any
     time without notice.

16.  No loud speakers,  televisions,  phonographs, radios or other devises shall
     be  used in a  manner  so as to be  heard  or seen  outside  of the  Leased
     Premises  or in  neighboring  space  without the prior  written  consent of
     Lessor.

17.  The outside areas  immediately  adjoining the Leased Premises shall be kept
     clean and free from dirt and rubbish by the Lessee,  to the satisfaction of
     the  Lessor,  and  Lessee  shall  not place or permit  any  obstruction  or
     materials in such areas.

18.  Lessee shall use at Lessee's cost such pest  extermination  contractors  as
     Lessor may direct and at such intervals as Lessor may require.

19.  These  common  types of damages  will be charged back to the Lessee if they
     are not corrected prior to vacating the premises:

-    Keys not  returned  to Lessor for ALL  locks,  requiring  the  service of a
     locksmith and rekeying.

-    Removal of all decorator painting,  wallpapering and paneling,  or Lessor's
     prior consent to remain.

-    Electrical conduit and receptacles on the surface of walls.

-    Phone outlets, wiring, or phone equipment added on wall surfaces.

-    Security  tape/magnetic  tape  switches for burglar  alarm systems added to
     windows and door surfaces.

-    Penetration of roof membrane in any manner.

-    Holes in walls, doors, and ceiling surfaces.

-    Addition or change of standard door hardware.



<PAGE>


-    Painting or gluing of carpet or tile on warehouse floors.

-    Glass damage.

-    Damage to warehouse ceiling insulation.

-    Stains or damage to carpeting beyond normal wear-and-tear.

-    Damage to warehouse ceiling insulation.

-    Stains or damage to carpeting beyond normal wear-and-tear.

-    Damaged, inoperative, or missing electrical, plumbing, or HVAC equipment.

-    Debris and furniture requiring disposal.

-    Damaged or missing mini-blinds, draperies, and baseboards.

-    Installation  of additional  improvements  without  lessor's  prior written
     approval or obtainment of required City building permits.

     Lessee  agrees to comply  with all such rules and  regulations  upon notice
     from Lessor. Should Lessee not abide by these Rules and Regulations, Lessor
     may serve a three (3) day notice to correct deficiencies. If Lessee has not
     corrected  deficiencies by the end of the notice period,  Lessee will be in
     default of lease.

     Lessor  reserves the right to amend or supplement  the foregoing  rules and
     regulations  and to adopt and promulgate  additional  rules and regulations
     applicable to the leased premises. Notice of such rules and regulations and
     amendments and supplements thereto, if any, shall be given to the Lessee.


<PAGE>


                                  ADDENDUM "C"


            BY AND BETWEEN:                    OLEN PROPERTIES CORP.
                                               A FLORIDA CORPORATION

            AS LESSOR; AND:                    ADVANCED AERODYNAMICS &
                                               STRUCTURES, INC., A DELAWARE
                                               CORPORATION
            AS LESSEE

            TO LEASE DATED:                    DECEMBER 19, 1996
______________________________________________________________________________


OPTION TO RENEW/LEASE EXTENSION

Providing Lessee is not in default under any of the terms of this Lease,  Lessee
shall have the  Option to Extend the terms of this Lease for ONE (1)  FOUR-MONTH
period on all the same terms and conditions as contained in this Lease,  and the
minimum base monthly rent and security  deposit as set forth in Article 4  and 5
shall remain as follows:

Beginning on January 1,  1998,  through  April 30,  1998,  the minimum base rent
shall be $15,000.00 and the security deposit shall be $15,000.00.

To exercise this Option to Extend,  Lessee must give notice IN WRITING to Lessor
by Certified Mail, return receipt  requested,  at least SIXTY (60) DAYS prior to
the expiration of the original term.

ALL TERMS AND  CONDITIONS OF ARTICLES 39 OF THE LEASE SHALL REMAIN IN FULL FORCE
AND EFFECT.


_________                                                          _________
Lessor's Initials                                           Lessee's Initials