STANDARD FORM
                                INDUSTRIAL LEASE
                                 (SINGLE TENANT)


Landlord  HEWSON/BRECKNER-BASELINE, L.L.C., an Arizona limited liability company
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Tenant          ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation
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                            Dated as of April 8, 1997


                                TABLE OF CONTENTS



1.    Defined Terms............................................................1

2.    Leased Premises..........................................................2
      (a)      Property to be Leased...........................................2
      (b)      Reserved Rights of Landlord.....................................2

3.    Completion of Premises...................................................2
      (a)      Plans...........................................................2
      (b)      Scheduled Commencement Date; Delays Caused by Tenant............3
      (c)      Remedy..........................................................3
      (d)      Changes.........................................................3
      (e)      Ready for Occupancy.............................................4
      (f)      Construction Representative.....................................4
      (g)      Early Entry.....................................................4
      (h)      Quality of Construction.........................................4
      (i)      Tenant Improvement Allowance. ..................................5

4.    Term.....................................................................5

5.    Rent.....................................................................6
      (a)      Fixed Rent......................................................6
      (b)      Adjustments.  ..................................................6
      (c)      Pro Rata Rent...................................................6
      (d)      Net Lease.......................................................6

6.    Security.................................................................6
      (a)      Security Deposit................................................6
      (b)      Lien and Security Interest.  ...................................7

7.    Use......................................................................7
      (a)      General.........................................................7
      (b)      Compliance with Law.............................................7
      (c)      Existing Title and Condition of Premises........................7
      (d)      Signs...........................................................8
      (e)      Governmental Regulation.........................................8

8.    Maintenance and Repairs..................................................8
      (a)      Tenant's Maintenance............................................8
      (b)      Landlord's Obligations to Repair................................8
      (c)      Surrender.......................................................9
<PAGE>
9.    Utilities................................................................9

10.   Alterations and Additions................................................9
      (a)      Limitation......................................................9
      (b)      Liens..........................................................10
      (c)      Removal........................................................10

11.   Insurance...............................................................10
      (a)      General Liability..............................................10
      (b)      Extended Coverage..............................................10
      (c)      Policies.......................................................11
      (d)      Waiver of Subrogation..........................................11
      (e)      Tenant's Contents..............................................11
      (f)      Workmen's Compensation.........................................11
      (g)      Rental Income Insurance........................................12

12.   Indemnity; Exemption of Landlord from Liability.........................12
      (a)      General........................................................12
      (b)      Tenant's Business..............................................12

13.   Damage or Destruction; Obligation to Rebuild............................12
      (a)      Landlord's Obligation to Rebuild...............................12
      (b)      Abatement of Rent..............................................12
      (c)      Option to Terminate............................................13
      (d)      Uninsured Casualties...........................................13
      (e)      Damage Near End of Term........................................13
      (f)      Tenant's Waiver................................................13

14.   Taxes and Assessments...................................................14
      (a)      Payment........................................................14
      (b)      Definition.....................................................14
      (c)      Separate Assessment............................................14
      (d)      Personal Property..............................................14
      (e)      Rent Tax.......................................................14
      (f)      Declaration.  .................................................14
      (g)      Project Assessments............................................14
      (h)      Right to Contest...............................................15

15.   Condemnation............................................................15
      (a)      Rent Reduction or Lease Termination............................15
      (b)      Award..........................................................15
      (c)      Temporary Condemnation.........................................15

16.   Assignment and Subletting...............................................16
      (a)      Consent........................................................16
      (b)      Tenant's Continuing Liability..................................16
      (c)      Information....................................................16
      (d)      Excess Sublease Rental.........................................16
      (e)      Release........................................................17
      (f)      Controlled Entity..............................................17
      (g)      Attorneys' Fees................................................17

17.   Defaults; Remedies......................................................17
      (a)      Defaults.......................................................17
      (b)      Remedies.......................................................18
      (c)      Late Charges...................................................20
      (d)      Payment or Performance by Landlord.............................21
                                      -ii-
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18.   Miscellaneous...........................................................21
      (a)      Estoppel Certificates..........................................21
      (b)      Landlord's Liability...........................................22
      (c)      Construction...................................................22
      (d)      Interest on Past-Due Obligations...............................22
      (e)      Time of Essence................................................22
      (f)      Counterparts.  ................................................22
      (g)      Incorporation of Prior Agreements; Amendments..................22
      (h)      Notices........................................................22
      (i)      Waivers........................................................23
      (j)      Recording......................................................23
      (k)      Holding Over...................................................23
      (l)      Covenants and Conditions.......................................23
      (m)      Binding Effect.................................................23
      (n)      Subordination..................................................23
      (o)      Attorneys' Fee.................................................24
      (p)      Landlord's Access..............................................24
      (q)      Auctions.  ....................................................24
      (r)      Merger.........................................................24
      (s)      Joint and Several Liability....................................24
      (t)      Individual Liability...........................................24
      (u)      Attornment.....................................................24
      (v)      Lenders Right to Cure..........................................25
      (w)      Revisions to Lease.  ..........................................25
      (x)      Administrative Charge..........................................25
      (y)      Estimated Payments.............................................25

19.   Toxic Materials.........................................................26
      (a)      Definitions....................................................26
      (b)      Prohibition on Hazardous Materials.............................26
      (c)      Exception to Prohibition.......................................26
      (d)      Compliance with Environmental Laws.............................27
      (e)      Environmental Notices..........................................27
      (f)      Tenant's Environmental Indemnity...............................27
      (g)      Remedial Work at Tenant's Expense..............................27
      (h)      Landlord's Option..............................................28
      (i)      Injunctive Relief..............................................28
      (j)      Self-Help......................................................28
      (k)      Other Tenants and Owners.......................................28
      (l)      Environmental Inspection.......................................28
      (m)      Surrender of Premises - Environmental Considerations...........29
      (n)      Landlord's Environmental Indemnity.............................29
      (o)      Remedial Work at Landlord's Expense............................29


Exhibit A      The Site Plan for Premises
Exhibit B      Legal Description of Property
Exhibit C      Space Plan for Tenant Improvements
Exhibit D      Certain Tenant Improvements to be Furnished by Landlord
Exhibit E      Parking Plan
Exhibit F      Option to Extend Term
Exhibit G      Hazardous Materials
Exhibit H      Tenant's Sign Plan
                                      -iii-
<PAGE>
         1. Defined Terms.  Each reference in this Lease to any of the following
terms  shall  incorporate  the data  stated  for that term.  Other  terms are as
defined in the Lease.

         (a)  Landlord and Landlord's     HEWSON/BRECKNER-BASELINE, L.L.C.
              Address (subparagraph       c/o Hewson Properties, Inc.
              18(h)):                     4636 East University Drive, Suite 265
                                          Phoenix, AZ  85034

         (b)  Tenant and Tenant's         ACTION PERFORMANCE COMPANIES, INC.,
              Address for Notices         an Arizona corporation
              (subparagraph 18(h)):       Until Commencement Date:
                                          2401 West First Street
                                          Tempe, AZ 85281
                                          Attn: Mr. Chris Bening

                                          After Commencement Date:
                                          4707 East Baseline Road
                                          Phoenix, AZ 85034
                                          Attn: Mr. Chris Bening

                                          See subparagraph  18(h) for additional
                                          notices

         (c)  Street Address of Pre-      4707 East Baseline Road  
              mises (paragraph 2):        Phoenix, AZ 85034

         (d)  Leased Premises             The real property described in Exhibit
                                          B attached hereto and all improvements
                                          now  or  hereafter   located  thereon,
                                          including  an existing  building  (the
                                          "Building")    which   will    contain
                                          approximately  138,110  square feet of
                                          rentable space (117,410 square feet of
                                          floor area and 20,700  square  feet of
                                          mezzanine  area); the parking areas to
                                          be  provided  to Tenant in  accordance
                                          with  the   provisions  of  Exhibit  E
                                          "Parking  Plan" attached  hereto;  and
                                          the  area  described  in  subparagraph
                                          3(a) below and  designated on Exhibits
                                          A and E as "Future Parking Area";  all
                                          as   designated   on  the  Site   Plan
                                          attached  hereto  as  Exhibit  A  (the
                                          "Premises").

         (e)  Landlord's Construction     Michael Corbett
              Representative (subpara-   
              graph 3(f)):

         (f)  Tenant's Construction       Irving Bush
              Representative (subpara-
              graph 3(f)):

         (g)  Term (paragraph 4):         One hundred twenty (120) months

         (h)  Scheduled Commencement      12:01 a.m. on August 15, 1997
              Date (paragraph 4):

         (i)  Fixed Rent (subpara-        Months 1-60       $67,510.00
              graph 5(a)):                Months 61-120     $76,316.00

         (j)  Rental Period (sub-         Monthly
              paragraph 5(a)):
<PAGE>
         (k)  Security Deposit (sub-      $67,510.00 
              paragraph 6(a)):

         (l)  Permitted Uses (para-       General   office  and  warehouse  use,
              graph 7):                   together with any other uses permitted
                                          by law upon the prior written  consent
                                          of  the   Landlord   as   provided  in
                                          paragraph 7                           
                                          
         (m)  Liability Insurance         $2,000,000
              (subparagraph 11(a)):

         (n)  Project                     The  Pointe  South  Mountain  Business
                                          Park

         2. Leased Premises.

         (a) Property to be Leased. Landlord hereby leases to Tenant, and Tenant
hereby  leases  from  Landlord,  subject to the terms and  conditions  contained
herein,  (i) that certain real property  located at the street address set forth
in  paragraph  1 hereof and more  particularly  described  in Exhibit B attached
hereto and  incorporated  herein by this  reference (the  "Property");  (ii) the
improvements  located on the Property,  including  the Building  (the  "Existing
Improvements");  and (iii) those  improvements to be constructed on the Property
in accordance  with the  provisions  of paragraph 3 below and more  particularly
described in Exhibits C and D attached  hereto and  incorporated  herein by this
reference (the "Tenant Improvements").  The Existing Improvements and the Tenant
Improvements  are  hereinafter   sometimes   referred  to  collectively  as  the
"Improvements",  and the Property and the Improvements are sometimes hereinafter
collectively  referred to as the  "Premises".  The  Premises  includes  the area
designated on Exhibit A as "Unpaved Future Parking Area" and Tenant,  subject to
the approvals and other provisions of subparagraph  10(a) below,  shall have the
right,  at Tenant's  sole  expense,  to pave such area for  additional  parking;
provided,  however,  the paving and other parking area improvements shall not be
removed at the expiration of the Term of this Lease.

         (b)  Reserved  Rights  of  Landlord.   Notwithstanding  the  foregoing,
Landlord reserves the right from time to time, without unreasonable interference
with Tenant's use, to grant easements on, or dedicate  portions of, the Premises
for public utilities  without Tenant's  consent,  provided that no such grant or
dedication  shall  unreasonably  interfere  with Tenant's use of the Premises or
otherwise cause Tenant to incur cost or expense.

         3. Completion of Premises.

         (a) Plans.  Landlord and Tenant have  approved the space plan  attached
hereto as Exhibit C for the interior of the Building.  Landlord's architect will
also prepare  preliminary  plans and outline  specifications  (the  "Preliminary
Tenant  Improvement  Plans") for the  construction of improvements  (the "Tenant
Improvements")  in and to the Building in accordance with the space plan,  which
Tenant  Improvements  are  described  on Exhibit D  attached  hereto and by this
reference made a part hereof.  Landlord and Tenant will expeditiously review the
Preliminary  Tenant Improvement Plans prepared by Landlord's  architect.  Within
ten (10) days after  delivery to Tenant of the  Preliminary  Tenant  Improvement
Plans,  as  approved  by  Landlord,  which  approval  shall not be  unreasonably
withheld,  Tenant shall set forth in writing,  with particularity and precision,
any  revisions  which  Tenant  wishes  to have  made to the  Preliminary  Tenant
Improvement  Plans,  which  revisions  shall be subject to Landlord's  approval,
which approval shall not be  unreasonably  withheld.  Landlord's  architect will
then make the appropriate  revisions and submit the revised  Preliminary  Tenant
Improvement  Plans to both  Landlord  and Tenant.  If Tenant  wishes to have any
additional  revisions made to the revised  Preliminary Tenant Improvement Plans,
Tenant  shall  set  forth  such   revisions  in  writing,   with  precision  and
particularity,  and deliver the revisions to Landlord and  Landlord's  architect
within ten (10) days after delivery to Tenant of such revised Preliminary Tenant
Improvement Plans. Landlord's architect shall make the appropriate revisions and
the further  revised plans shall be deemed the  Preliminary  Tenant  Improvement
Plans  for  the  following  provisions  and  paragraphs  of this  Article  3 and
subparagraph 3(a).
                                        2
<PAGE>
         Landlord  shall  thereafter  cause  to  be  prepared  final  plans  and
specifications   (the  "Final  Tenant  Improvement   Plans")   substantially  in
conformity with the Preliminary  Tenant  Improvement Plans and Exhibits C and D,
which need not include  working detail  drawings.  The term "Tenant  Improvement
Plans" shall hereinafter mean the Preliminary Tenant Improvement Plans and, when
prepared, the Final Tenant Improvement Plans. The Final Tenant Improvement Plans
shall be delivered to Tenant as soon as reasonably  possible  after  preparation
thereof,  subject  to any  period  of  delay  encountered  by  Landlord  in such
preparation  as a result of requests  by Tenant for changes in the Final  Tenant
Improvement Plans after preparation thereof. Within ten (10) days after delivery
of the Final Tenant Improvement Plans,  Tenant shall set forth in writing,  with
particularity  and precision,  any corrections or changes necessary to bring the
Final Tenant Improvement Plans into substantial  conformity with the Preliminary
Tenant Improvement Plans and Exhibits C and D, except that Tenant may not object
to any logical  development or refinement of the Preliminary  Tenant Improvement
Plans.  Failure to deliver to Landlord written notice of any such corrections or
changes within said ten (10) day period shall  constitute  approval of the Final
Tenant Improvement Plans by Tenant.  Following such approval of the Final Tenant
Improvement  Plans,  both parties  shall  endorse  approval for filing  purposes
thereon,  in duplicate;  thereafter  changes may be made only in accordance with
subparagraph  (d) below;  and Landlord  shall employ  Landlord's  contractor  to
construct the Tenant Improvements.

         (b) Scheduled Commencement Date; Delays Caused by Tenant.  Landlord, at
its sole expense,  shall proceed  diligently with construction and completion of
the Tenant Improvements  substantially in accordance with the Tenant Improvement
Plans ("Landlord's  Work").  Landlord shall complete the Tenant Improvements and
they shall be Ready for  Occupancy  (as defined  below) by Tenant not later than
the  Scheduled  Commencement  Date set  forth in  paragraph  1 above;  provided,
however, that such Scheduled Commencement Date shall be extended for a period of
time  equal  to the  period  of any  delay or  delays  encountered  by  Landlord
affecting construction because of fire, earthquake,  inclement weather, or other
acts  of  God,  acts  of the  public  enemy,  riot,  insurrection,  governmental
regulations of the sales of materials or supplies or the transportation thereof,
strikes or boycotts,  shortages of material or labor, Tenant's early entry under
the  provisions of  subparagraph  (g) below,  changes in the Tenant  Improvement
Plans pursuant to subparagraph  (d) below, or any other cause beyond the control
of Landlord;  and  provided,  further,  the  financial  inability of Landlord to
perform Landlord's  construction  obligations shall not be deemed a cause beyond
the control of the Landlord.

         (c) Remedy.  If the Premises  are not Ready for  Occupancy on or before
the Scheduled  Commencement Date as extended pursuant to subparagraph (b) above,
the sole  remedy of Tenant  shall be the option to  terminate  this Lease by the
delivery to Landlord of written  notice within ten (10) days after the day three
(3) months  following  the  Scheduled  Commencement  Date,  as extended,  if the
Premises are not Ready for Occupancy prior to the giving of such written notice.
Anything in the foregoing to the contrary  notwithstanding,  if periods of delay
attributable  solely to events  described in the second sentence of subparagraph
(b) above (exclusive of those described in subparagraphs (d) or (g) or otherwise
caused by Tenant or Tenant's agents, employees,  contractors or licensees) cause
the Scheduled  Commencement  Date to be extended for periods  totaling more than
six (6) months after the initial  Scheduled  Commencement  Date, then Tenant, as
Tenant's sole remedy,  shall also have the option to terminate this Lease by the
delivery to Landlord of written  notice within ten (10) days after the Scheduled
Commencement  Date has been extended for periods  totaling six (6) months solely
as a result of events described in the second sentence of subparagraph (d) above
(exclusive of those described in subparagraphs (d) or (g) or otherwise caused by
Tenant or Tenant's agents, employees, contractors or licensees).

         (d)  Changes.  Tenant  shall have the right to  request  changes in the
Tenant  Improvement  Plans  (including  but not  limited to changes  intended to
reduce the anticipated  costs of constructing  the Tenant  Improvements),  which
request shall not be  unreasonably  denied;  provided,  however,  (i) such right
shall not be  exercised  unreasonably,  (ii) no such  request  shall  effect any
structural  change in the Building,  (iii) Tenant shall pay any additional  cost
incurred by Landlord  required  to  implement  such  change,  including  without
limitation loss of rents  calculated as provided in subparagraph  5(a) below for
any delay period,  architectural  fees,  increase in construction  costs and any
other charges payable hereunder caused by delay, with all said costs
                                        3
<PAGE>
to be paid immediately upon demand by Landlord (except that any payment for loss
of rents shall be payable at the time provided in  subparagraph  5(a) below that
such rents would have been payable if such delay had not occurred),  (iv) except
as provided in clause (v) below,  such requests shall constitute an agreement on
the part of Tenant  to  accept  any  delay in  completion  caused by  reviewing,
processing and implementing any such request and/or changes,  and (v) changes in
the Tenant  Improvement  Plans  will be  authorized  only by  written  agreement
setting forth any additional  cost and expense and  additional  time required to
complete the Tenant  Improvements as a result thereof. If Landlord believes that
any such  change may cause a delay in  completion  of the  Tenant  Improvements,
Landlord  will notify  Tenant and such  change  shall be  performed  only if the
parties  agree in  writing  to  extend  the date for  completion  of the  Tenant
Improvements by the number of days of such  anticipated  delay and set forth the
effect of such delay upon the  commencement  of rent.  If Landlord and Tenant do
not enter into such an  agreement,  Tenant may withdraw its request for a change
and the Scheduled  Commencement  Date shall not be extended except to the extent
of any temporary delay resulting from the cessation of those activities, if any,
which (A) would have been  inconsistent  with the requested  change or (B) could
not be engaged in  because  the  subject  work would have been  affected  by the
pending change requested.

         (e) Ready for  Occupancy.  The Premises shall be deemed to be ready for
occupancy  ("Ready for  Occupancy")  when the architect or engineer in charge of
the work of construction  certifies:  (i) that the work of construction has been
substantially  completed in accordance with the Tenant  Improvement  Plans;  and
(ii) the date of such completion. Landlord shall diligently complete, as soon as
reasonably  possible,  any items of work and  adjustment  not completed when the
Premises are Ready for Occupancy.

         (f)  Construction  Representative.  In  connection  with  the  original
construction  of the  Premises  each  party  shall be bound by its  Construction
Representative  set  forth  in  paragraph  1  above.  A party  may  designate  a
substitute  Construction  Representative  by giving  written notice to the other
party.

         (g) Early Entry.  With the prior  written  consent of  Landlord,  which
consent shall not be unreasonably  withheld or delayed,  Tenant may, at any time
prior to the  commencement of the Term, at its sole risk, enter upon and install
such trade  fixtures and  equipment  in the Premises as it may elect;  provided,
however,  that (i) Tenant's early entry shall not interfere with Landlord's work
of  construction  or cause  labor  difficulties;  (ii) Tenant  shall  execute an
indemnity  agreement  in favor of  Landlord  in form  and  substance  reasonably
satisfactory to Landlord; and (iii) Tenant shall pay for and provide evidence of
insurance reasonably satisfactory to Landlord. Tenant shall not use the Premises
for the storage of  inventory or  otherwise  commence the  operation of business
prior to the  commencement of the Term without the express prior written consent
of Landlord.

         (h)  Quality  of  Construction.  All  work  shall be done in a good and
workmanlike  manner  and in  compliance  with all  applicable  laws  and  lawful
ordinances,  bylaws, regulations and orders of governmental authority and of the
insurers of the Improvements.  No part of the Building or the Improvements shall
encroach on adjacent  properties and the construction  thereof shall not violate
any recorded covenants,  conditions or restrictions applicable to the Project or
the  Premises.  Landlord  assumes no  liability  for special,  consequential  or
incidental  damages of any kind.  There are no  representations,  warranties  or
guaranties,  express or implied,  including warranties of merchantability or use
of the Premises,  except as are expressly set forth herein. Tenant hereby waives
the benefit of any rule that disclaimers of warranty shall be construed  against
Landlord.

         For one (1) year from the Commencement Date, Landlord,  at its cost and
expense,  will  promptly  correct:  (i) any of the  Landlord's  Work found to be
defective  or  failing  to  conform  to this  Lease;  (ii)  any  defects  in the
construction,  design,  workmanship  or  materials  used in the  Premises or the
plumbing,  electrical,   heating,  ventilation,  air  conditioning  or  building
equipment serving the Premises;  and (iii) any defects in Landlord's Work or the
structural  elements of the Premises  required to be  corrected by  governmental
authorities. Landlord hereby assigns to Tenant, for the term of the Lease and to
the extent of Tenant's  obligations  hereunder,  all warranties  relating to the
equipment and facilities  required to be maintained by Tenant, and Landlord,  at
the request and expense of Tenant,  will  cooperate with Tenant to enforce same.
Landlord will execute such further
                                        4
<PAGE>
instruments of assignment of such  warranties as may be reasonably  requested by
Tenant from time to time.

         (i) Tenant Improvement  Allowance.  The cost of constructing the Tenant
Improvements (including but not limited to the costs for plans, permits and fees
as more  particularly  described  in  Exhibit  D)  shall  be  paid by  Landlord;
provided,   however,   if  the  amount  expended  for  constructing  the  Tenant
Improvements  is or  will be more  than  $1,450,000,  Tenant  hereby  agrees  to
reimburse  Landlord  for all  costs  incurred  in  connection  with  the  Tenant
Improvements  except  for  $1,450,000  which is the  Landlord's  allowance  (the
"Allowance")  and, except as otherwise  provided  herein,  is Landlord's  entire
monetary  obligation for the Tenant  Improvements;  and provided,  further,  any
excess  costs  incurred  as a result of the fault or neglect of  Landlord  or of
Landlord's contractors,  employees or agents shall be borne entirely by Landlord
and Tenant  shall be  responsible  for all costs  incurred  in  connection  with
Landlord's Work as a result of the fault or neglect of Tenant.  Tenant shall pay
any costs which are Tenant's responsibility  hereunder (the "Excess Costs") on a
pro rata basis with  Landlord's  payments  for  design and  construction  of the
Tenant Improvements, so that Landlord will always have paid a share of the total
costs then incurred which is equal to the  percentage  which the Allowance is of
the sum of the Allowance and Excess Costs, as then  determined,  and Tenant will
always  have paid a share of the total  costs for the Tenant  Improvements  then
incurred  which is equal to the  percentage  which  the  Excess  Costs,  as then
determined,  is to the  sum of the  Allowance  and  the  Excess  Costs,  as then
determined.  Determination(s) of the amount of the Excess Costs may be made from
time to time  prior to,  during or after  construction.  Tenant  shall make such
payments,   including  any  adjustments   necessary  to  maintain  the  Tenant's
appropriate  share of the total costs as a result of subsequent  determinations,
based upon  requisitions  setting forth in reasonable detail the reason for such
Excess  Costs  and the  amount  thereof,  together  with any  other  information
reasonably requested by Tenant, and the amounts owing by Tenant shall be paid by
Tenant to Landlord  within ten (10) days after receipt of each such  requisition
and other information.  Except as otherwise  provided herein,  Tenant shall have
complete  responsibility  for the cost of the  Tenant  Improvements  and for the
construction by Tenant of any other improvements and alterations to the Premises
in connection  with Tenant's  occupancy  thereof,  Tenant agreeing to accept the
same "AS  IS",  subject  only to the  construction  by  Landlord  of the  Tenant
Improvements  and any other  obligation of Landlord  under this Lease.  Landlord
shall  promptly  furnish to Tenant  estimates  of the  anticipated  costs of the
various  elements of the Tenant  Improvements  as such estimates are received by
Landlord. If Tenant believes that the amount of any estimate is excessive Tenant
may  request  changes  in  the  Tenant  Improvement  Plans  in  accordance  with
subparagraph  (d) above.  On or before sixty (60) days after  completion  of the
Tenant  Improvements,  Landlord  will  provide  a  final  reconciliation  of the
Allowance,  the Excess Costs and the total costs of the Tenant  Improvements and
each party shall promptly  thereafter  make any payment to the other party which
is necessary to effect the correct  allocation  of the total costs of the Tenant
Improvements as provided in this subparagraph.

         (j) Permits.  Landlord shall be solely responsible for the procuring of
all building and other  permits,  licenses and  approvals  and  certificates  of
occupancy  necessary for  construction  of the Tenant  Improvements  and for the
occupancy  of  the  Premises  as  constructed  in  accordance  with  the  Tenant
Improvement  Plans. If Landlord  determines that any activities or installations
by Tenant or Tenant's agents, employees,  contractors or licensees have, will or
are  likely to result in any  delays or  failures  to obtain  any such  permits,
licenses or  approvals,  Landlord  will  promptly  notify  Tenant in writing and
Landlord will not be  responsible  for any delays  caused by such  activities or
installations.

         4.  Term.  The Term of this  Lease,  which  shall be for the period set
forth in paragraph 1 above  (sometimes  hereinafter  referred to as the "Initial
Term"),  shall  commence  on the  first  to occur of the  following  dates  (the
"Commencement Date"):

         (a) The Scheduled  Commencement Date set forth in paragraph 1 above (as
it may be extended pursuant to the terms of paragraph 3 above); or

         (b) The date upon which Tenant actually commences to do business in the
Premises.
                                        5
<PAGE>
Notwithstanding the foregoing,  in the event that the Premises are not Ready for
Occupancy by the Scheduled  Commencement Date, then such Scheduled  Commencement
Date shall be extended  until such time as the Premises are Ready for Occupancy,
but Tenant  shall pay to  Landlord  amounts  equal to the Fixed Rent which would
have been owing during the period of any delays in the Commencement  Date caused
by Tenant or Tenant's agents, employees, contractors or licensees, including but
not limited to delays  resulting  from the  exercise of  Tenant's  rights  under
subparagraph 3(d) above. In addition, the Term of this Lease shall be subject to
extension as provided in Exhibit F attached hereto.

         5. Rent.

         (a)  Fixed  Rent.  Tenant  shall  pay  Landlord  as fixed  rent for the
Premises a sum equal to the Fixed Rent set forth in paragraph 1 on or before the
first day of each and every calendar month during the Term of this Lease, except
that Fixed Rent for the first full  calendar  month of the Term shall be payable
simultaneously with the execution of this Lease by Tenant.

         (b) Adjustments. INTENTIONALLY DELETED.

         (c) Pro Rata  Rent.  Rent for any  period  during the Term which is for
less  than  one  month  shall  be a  pro  rata  portion  of  the  Rental  Period
installment. Rent shall be payable, without deduction or offset, in lawful money
of the United  States to Landlord at the address  stated herein or to such other
persons or at such other places as Landlord may designate in writing;  provided,
however, if Tenant obtains a judgment against Landlord on the basis of a default
by Landlord  in the  performance  of  Landlord's  obligations  under this Lease,
Tenant may offset  amounts  owing under such judgment  against  amounts owing by
Tenant to Landlord under this Lease, but such offset rights may not be exercised
against any lender  holding a lien on the  Premises,  either  before or after an
acquisition of the Premises by such lender, or after any sale of the Premises at
a foreclosure or other sale of the Premises pursuant to exercise of the lender's
lien rights against the Property.

         (d) Net Lease.  This Lease is what is commonly called a "net lease", it
being  understood  that  Landlord  shall  receive  the  Rent  set  forth in this
paragraph free and clear of any and all impositions,  taxes,  liens,  charges or
expenses of any nature  whatsoever in connection  with its ownership and leasing
of the Premises except those expenses  specifically  designated in this Lease to
be borne by Landlord. In addition to the Rent provided in this paragraph, Tenant
shall pay all impositions,  taxes, insurance premiums,  operating charges, costs
and expenses  which arise or may be  contemplated  under any  provisions of this
Lease during the Term. All of such charges,  costs and expenses shall constitute
additional  rent,  and upon the  failure  of  Tenant  to pay any of such  costs,
charges or  expenses,  Landlord  shall  have the same  rights  and  remedies  as
otherwise  provided in this Lease for the  failure of Tenant to pay Rent.  It is
the intention of the parties hereto that Tenant shall in no event be entitled to
any  abatement  of or reduction in Rent or  additional  rent payable  hereunder,
except as expressly  provided herein.  Any present or future law to the contrary
shall not alter this agreement of the parties.

         6. Security.

         (a) Security  Deposit.  Tenant shall  deposit with  Landlord,  prior to
Landlord being obligated to commence  construction  of the Tenant  Improvements,
the  Security  Deposit set forth in  paragraph 1 above as security  for Tenant's
faithful performance of Tenant's obligations  hereunder.  If Tenant fails to pay
Rent or any other charges  payable by Tenant  hereunder,  or otherwise  defaults
with  respect to any  provision  of this Lease,  Landlord may at its option use,
apply or  retain  all or any  portion  of the  Security  Deposit  (i) to  remedy
Tenant's  defaults  in the  payment of Rent or any other sums  payable by Tenant
pursuant to the terms hereof,  (ii) to repair any damage to the Premises,  (iii)
to clean and otherwise maintain the Premises, or (iv) to compensate Landlord for
any other loss or damage which Landlord may suffer thereby.  If Landlord so uses
or applies all or any portion of the Security Deposit,  Tenant shall, within ten
(10) days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full amount hereinabove stated
and Tenant's failure to do so shall be
                                        6
<PAGE>
a breach of and a default  under this Lease.  Landlord  shall not be required to
keep the Security Deposit separate from its general  accounts.  If Tenant is not
in default of Tenant's  obligations  hereunder at the expiration of the Term and
the Security  Deposit has not been previously  refunded to Tenant as hereinafter
provided,  the Security Deposit,  or so much thereof as has not theretofore been
applied by  Landlord,  shall be returned,  without  payment of interest or other
increment  for its  use,  to  Tenant  (or,  at  Landlord's  option,  to the last
assignee,  if any, of Tenant's interest hereunder) at the expiration of the Term
hereof, after Tenant has vacated the Premises.  In addition, if Tenant is not in
default of Tenant's obligations  hereunder upon that date which is two (2) years
after the  Commencement  Date,  the full  Security  Deposit shall be returned to
Tenant,  without  payment of interest or other  increment for its use,  promptly
after written request therefor by Tenant and Tenant shall no longer be obligated
to maintain a Security Deposit with Landlord.

         (b) Lien and Security Interest. INTENTIONALLY DELETED.

         7. Use.

         (a)  General.  The  Premises  shall be used and  occupied  only for the
Permitted  Uses set forth in paragraph 1 above and for no other purpose  without
Landlord's prior written consent. Landlord, upon request for such consent, shall
not  withhold  such  consent so long as  Landlord is given such  information  as
Landlord may  reasonably  request  concerning  such other use and such other use
shall not increase  materially the amount of, scope of or potential liability to
Landlord from Environmental  Activities (as defined in subparagraph 19(a) below)
on the Premises.

         (b)  Compliance  with Law.  Tenant  shall,  at  Tenant's  sole cost and
expense,   comply  with  all  present  and  future  laws,  ordinances,   orders,
declarations of covenants and restrictions,  rules, regulations and requirements
of  all  federal,   state  and  municipal  governments,   courts,   departments,
commissions,  boards  and  officers,  and any  national  or local  Board of Fire
Underwriters,  or any other body exercising functions similar to those of any of
the foregoing, foreseen or unforeseen, ordinary as well as extraordinary,  which
may be applicable to the Premises, and the sidewalk,  curbs and vaults adjoining
the Premises or to the use or manner of use of the Premises, whether or not such
law,  ordinance,  order,  rule,  regulation  or  requirement  shall  necessitate
structural  changes or  improvements,  or the  removal of any  encroachments  or
projections,  ornamental,  structural or otherwise,  onto or over the streets or
sidewalks adjacent to the Premises, or onto or over other property contiguous or
adjacent thereto.  Tenant shall obtain any required certificates or permits with
respect to its particular use of the Premises, the Improvements and the Property
within  thirty  (30) days from the  Commencement  Date and shall  deliver a copy
thereof to Landlord  within such  thirty  (30) day  period;  provided,  however,
Landlord shall obtain any certificate of occupancy required for the shell of the
Building  and the general  occupancy of any  improvements  to the Premises to be
made by Landlord  pursuant to paragraph 3 above.  Tenant shall not use or permit
the use of the  Premises  in any  manner  that will  tend to  create  waste or a
nuisance.

         (c) Existing Title and Condition of Premises. Tenant hereby accepts the
Premises and this Lease subject to all applicable zoning, municipal,  county and
state laws,  ordinances and regulations  governing and regulating the use of the
Premises,  subject to all covenants,  conditions and restrictions  affecting the
Property,  Project or Premises and subject to all liens, claims and encumbrances
currently  existing  against the  Premises or any part  thereof,  including  all
matters  disclosed by any of the foregoing or by any exhibits  attached  hereto;
provided,  however, such acceptance shall not negate any obligations of Landlord
with respect to the Premises under this Lease. Landlord, in accordance with (and
except as otherwise  provided in) subparagraph 8(b) below,  shall be responsible
for causing the roof and bearing  walls of the Premises to be in good  condition
and  repair  at  the  Commencement  Date  and  shall  also  cause  the  heating,
ventilating and air conditioning  system, the plumbing system and the electrical
system to be in good operating  condition as of the Commencement  Date. All such
systems  shall be deemed in the  condition  required  at the  Commencement  Date
unless Tenant gives Landlord written notice of any defects in such systems on or
before one hundred twenty (120) days after the Commencement Date. Except for any
representation  or warranty which may be  specifically  set forth in this Lease,
Tenant  acknowledges  that neither Landlord nor Landlord's  agents have made any
representations or
                                        7
<PAGE>
warranties as to the Premises,  including without limitation, any representation
or warranty as to condition or fitness of the Building or the suitability of the
Building for the conduct of Tenant's business.

         (d)  Signs.  Tenant  shall  not erect or  install  on any  exterior  or
interior window,  any door, or any exterior wall any signs,  advertising  media,
placards,  trademarks,  drapes,  screens,  tinting materials,  shades, blinds or
similar  items,  without first securing  Landlord's  written  permission,  which
permission  shall not be  unreasonably  withheld  if the signs  comply  with the
following  standards.  All signs shall comply with all  applicable  governmental
requirements,  shall  conform to the design,  motif and decor of the Project and
shall be in good taste,  as  determined  in  Landlord's  reasonable  discretion.
Landlord  hereby  approves  the sign plan for the  Premises  attached  hereto as
Exhibit H. Tenant shall properly maintain all approved signs. Upon expiration of
the Lease,  Tenant  promptly  shall  remove  all signs  placed in and around the
Premises  by Tenant and shall  repair any damage to the  Premises  caused by the
removal of such signs.  Landlord  may also  require  Tenant to erect an exterior
identifying  sign in form and  substance  satisfactory  to Landlord,  which sign
shall also be subject to all of the other provisions of this subparagraph (d).

         (e) Governmental  Regulation.  In addition to the general obligation of
Tenant to comply with laws and without limitation thereof, Landlord shall not be
liable to Tenant nor shall  this Lease be  affected  if any  parking  privileges
appurtenant  to or on the Premises or the Building are impaired by reason of any
moratorium,  initiative,  referendum, statute, regulation, or other governmental
decree or action which could in any manner  prevent or limit the parking  rights
of Tenant  hereunder.  Any governmental  charges or surcharges or other monetary
obligations  imposed  relative to parking rights with respect to the Premises or
the  Building  shall be  considered  as  Property  Taxes and shall be payable by
Tenant under the provisions of paragraph 14 hereof.

         8. Maintenance and Repairs.

         (a)  Tenant's  Maintenance.  Tenant  shall,  at Tenant's  sole cost and
expense, keep and maintain the Premises, including, without limitation, the roof
and outside  wall  surfaces,  the  subfloors  and floor  coverings,  any and all
alterations and additions made by Tenant pursuant to the provisions  hereof, all
walks, driveways,  parking and loading areas, lawns and landscaping,  fences and
signs  located in the areas which are adjacent to or included with the Premises,
in all respects in good repair and in a clean and safe condition.  Tenant shall,
at Tenant's own expense,  immediately  replace all  interior,  exterior or other
glass in or about the Premises  that may be broken during the Term with glass at
least equal to the specification and quality of the glass so replaced. If Tenant
fails to perform Tenant's  obligations under this subparagraph,  Landlord may at
its option enter upon the Premises  after ten (10) days prior written  notice to
Tenant  and put the  same in good  order,  condition  and  repair,  and the cost
thereof  together with interest thereon at the rate of fifteen percent (15%) per
annum shall  become due and payable as  additional  rental to Landlord  together
with  Tenant's next monthly Rent  payment.  Nothing  herein shall imply any duty
upon the part of  Landlord  to do any such work and the  performance  thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
the  same.  Landlord  may,  during  the  progress  of any such work in or on the
Premises,  keep and store therein all necessary materials,  tools,  supplies and
equipment.  Landlord  shall  not be  liable  for the  inconvenience,  annoyance,
disturbance, loss of business or other damage of Tenant by reason of making such
repairs  or  the  performance  of any  such  work,  or on  account  of  bringing
materials,  tools, supplies or equipment into or through the Premises during the
course  thereof,  and the  obligations  of Tenant  under this Lease shall not be
affected thereby.

         (b) Landlord's  Obligations to Repair.  Landlord shall, at its expense,
after  written  notice from Tenant,  repair in a prompt and diligent  manner any
damage to  structural  portions of the roof and bearing  walls of the  Premises;
provided, however, that if such damage is caused by an act or omission of Tenant
or Tenant's agents, invitees, employees or contractors, then such repairs shall,
to the  extent not  covered  by the  insurance  maintained  by Tenant  under the
provisions of this Lease, be at Tenant's  expense,  payable to Landlord pursuant
to this paragraph. There shall be no abatement of Rent during the performance of
such work.  Landlord shall not be liable to Tenant for injury or damage that may
result from any defect in the construction or conditions of
                                        8
<PAGE>
the  Premises and Tenant  shall seek  recovery for such injury or damage  solely
from Tenant's insurance and/or any other persons or entities which may be liable
to  Tenant;  provided,   however,   Landlord  shall  comply  with  its  warranty
obligations  under  paragraph 3 of this Lease.  Tenant  waives any right to make
repairs at the expense of Landlord  under any law,  statute or ordinance  now or
hereafter in effect unless Tenant has given Landlord  written notice of the need
for such repairs,  such repairs are the  obligation of Landlord under this Lease
and Landlord has failed to make the needed repairs within a reasonable period of
time after the receipt of such notice.  Tenant expressly  acknowledges  that any
repairs to the walls of the  Improvements  relating to maturity or weathering of
construction  materials,  as contrasted to damage to the structural integrity of
the bearing walls,  shall be the  responsibility  of the Tenant.  If Landlord or
Tenant  performs any repairs or replacement  work pursuant to this  subparagraph
(b) or other provisions of this Lease (except paragraph 3) which would be deemed
a capital  expenditure  to the  Premises  under  generally  accepted  accounting
principles,  then (i) the cost of the capital  expenditure  shall be  amortized,
with  interest  at the rate of ten percent  (10%) per annum,  over the period of
their useful life; (ii) the cost, with interest,  attributable on such amortized
basis to the remaining Term of the Lease,  including,  if applicable,  the First
and Second  Extended  Terms,  shall be payable by Tenant to Landlord;  and (iii)
such  amount  shall be payable in equal  monthly  installments  at the time each
payment of Fixed  Rent is due under this  Lease,  including  but not  limited to
payments  during  the First or Second  Extended  Terms if Tenant  exercises  its
option(s) to extend the Term of this Lease under Exhibit F.

         (c)  Surrender.  On  the  last  day  of  the  Term,  or on  any  sooner
termination  of this Lease,  Tenant shall  surrender the Premises to Landlord in
the same condition as when received,  broom clean,  ordinary wear and tear alone
excepted;   provided,   however,   Tenant  may  leave  certain  alterations  and
improvements  on the Premises in accordance with  subparagraphs  10(a) and 10(c)
below.  Tenant shall repair any damage to the Premises occasioned by the removal
of Tenant's  alterations and improvements  (including,  without limitation,  its
trade fixtures,  furnishings and equipment), which repair shall include, without
limitation, the patching and filling of holes and repair of structural damage.

         9.  Utilities.  Tenant shall pay for water,  gas, heat,  light,  power,
telephone and other  utilities and services  supplied to the Premises,  together
with any taxes thereon.  Landlord  represents and warrants that each utility now
supplied  to the  Premises  or to be  supplied  upon  completion  of the  Tenant
Improvements  will be separately  metered.  Landlord reserves the right to grant
easements  on the  Premises  for public  utilities,  and to dedicate  for public
utility  purposes  portions  thereof,  without Tenant's consent provided that no
such grant or dedication  shall  interfere  with Tenant's use of the Premises or
otherwise  cause  Tenant  to  incur  cost or  expense.  From  time to time  upon
Landlord's demand, Tenant shall execute, acknowledge and deliver to Landlord, in
accordance  with Landlord's  instructions,  any and all documents or instruments
necessary to effect Tenant's covenants herein.

         10. Alterations and Additions.

         (a)  Limitation.  Tenant shall not,  without  Landlord's  prior written
consent, make any alterations, improvements, additions, or utility installations
(which  term  "utility  installations"  shall  include  ducting,  power  panels,
fluorescent  fixtures,  space heaters,  conduits and wiring) in, on or about the
Premises,  except for interior nonstructural alterations to the Premises costing
less than Fifty  Thousand  Dollars  ($50,000) in the aggregate  over any one (1)
year period.  As a condition to giving such  consent,  Landlord may require that
Tenant  agree to (i) remove any such  alterations,  improvements,  additions  or
utility  installations at the expiration of the Term and restore the Premises to
their  prior  condition  or,  in  the   alternative,   (ii)  require  that  such
alterations,  improvements,  additions or utility installations shall become the
property of  Landlord  and shall be left by Tenant  upon the  expiration  of the
Term; provided,  however, Landlord may not require that Tenant remove any of the
foregoing  items which are typically  installed for office and/or  warehouse use
such as normal  partitions,  offices and  shelving,  but items such as,  without
limitation,  foundations, hoists and refrigeration equipment shall not be deemed
items typically  installed in an office or warehouse.  As a further condition to
giving  such  consent,  Landlord  may  require  Tenant to provide  Landlord,  at
Tenant's sole cost and expense, lien and completion bonds
                                        9
<PAGE>
or other adequate security in an amount equal to one hundred five percent (105%)
of the  estimated  cost of such  improvements  to insure  Landlord  against  any
liability for mechanics' and materialmen's liens and to insure completion of the
work.

         (b)  Liens.  Tenant  shall  keep the  Premises,  the  Building  and the
Property  free from any liens  arising out of any work  performed  or alleged to
have been performed for Tenant's account on the Premises or materials  furnished
to the Premises for Tenant's  account.  Tenant shall give Landlord not less than
ten (10) days notice prior to the commencement of any work on the Premises,  and
Landlord shall have the right to post notices of non-responsibility in or on the
Premises as provided by law.

         (c) Removal.  Unless  Landlord  requires  their removal as set forth in
subparagraph (a) above or otherwise  consents to such removal,  all alterations,
improvements, additions and utility installations which may be made on or to the
Premises  shall  become  the  property  of  Landlord  and  remain  upon  and  be
surrendered with the Premises at the expiration of the Term. Notwithstanding the
provisions of this subparagraph (c), Tenant's shelving, 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 Tenant and
may be removed by Tenant subject to the provisions of subparagraph 8(c) above.

         11. Insurance.

         (a) General Liability. Tenant at its sole cost and expense, but for the
mutual benefit of Landlord,  Landlord's  property manager (if any) and Tenant as
named  insureds,   shall  maintain   commercial   general  liability   insurance
("Liability  Insurance") on an  "occurrence  basis" against claims for "personal
injury," including without limitation,  bodily injury, death or property damage,
occurring  upon,  in or about the  Premises  and on,  in or about the  adjoining
sidewalks,  streets and passageways and for all other areas appurtenant thereto,
such  insurance  to  afford  immediate  minimum  protection,  at the time of the
inception  of this Lease,  and at all times  during the Term,  to a limit of not
less than Two Million  Dollars  ($2,000,000)  with respect to personal injury or
death to any one or more persons or to damage to property.  Such insurance shall
also include  coverage  against  liability for bodily injury or property  damage
arising  out of the use,  by or on behalf  of  Tenant,  or any  other  person or
organization,  of any owned, non-owned,  leased or hired automotive equipment in
the conduct of any and all operations called for under this Lease. The limits of
said insurance shall not, however, limit the liability of Tenant hereunder.

         (b) Extended Coverage. Tenant, at its sole cost and expense, shall keep
the Improvements  insured during the Term for the mutual benefit of Landlord and
Tenant as named  insureds,  against  loss or damage  by fire and  lightning  and
against  loss or damage by other  risks  embraced by  coverage,  of the type now
known as the broad form of extended coverage, including but not limited to fire,
riot and civil  commotion,  vandalism and malicious  mischief,  special extended
perils (all risk) and sprinkler leakage, and against such other risks or hazards
as Landlord may from time to time reasonably designate, in amounts sufficient to
prevent  Landlord or Tenant from  becoming a  co-insurer  under the terms of the
applicable  policies,  but in any  event in an  amount  not  less  than the full
replacement   cost  of  the   Improvements,   without   deduction  for  physical
depreciation,  and with not more than Two Thousand Five Hundred Dollars ($2,500)
deductible  from the loss  payable for any  casualty.  The policies of insurance
carried in accordance  with this  paragraph  shall contain a  "Replacement  Cost
Endorsement."  Such full replacement cost shall be determined from time to time,
but not more frequently than once in any twelve (12) consecutive calendar months
(except in the event of substantial  changes or alterations to the  Improvements
undertaken  by  Tenant as  permitted  hereunder)  upon the  written  request  of
Landlord by an  appraiser,  architect  or  contractor  who shall be mutually and
reasonably  acceptable to Landlord and Tenant. A copy of any such  determination
shall  promptly  be  sent to  Landlord,  and  subject  to the  approval  of such
determination by Landlord,  the insurance  maintained in this paragraph shall be
adjusted to the new full  replacement  cost.  Said  insurance  shall provide for
payment for loss thereunder to Landlord or, at Landlord's request, to the holder
of any mortgage or deed of trust on the Premises but the proceeds  thereof shall
be applied as provided in paragraph 13 below.
                                       10
<PAGE>
         (c) Policies.  Insurance required hereunder shall be by companies rated
AX or better in "Best's Insurance Guide" licensed to do business in the state in
which the Premises are located and  acceptable to Landlord and the holder of any
mortgage or deed of trust on the Premises or any part or portion thereof. Tenant
shall deliver to Landlord  copies of policies of such insurance or  certificates
evidencing the existence and amounts of such insurance with loss payable clauses
satisfactory  to  Landlord.  No such policy  shall be  cancelable  or subject to
reduction  of  coverage  or other  modification  except  after  thirty (30) days
written notice to Landlord. Tenant shall, within ten (10) days of the expiration
of such  policies,  furnished  Landlord with renewals or "binders"  thereof,  or
Landlord may order such  insurance and charge the cost thereof to Tenant,  which
amount shall be payable by Tenant upon demand.  Each such policy or  certificate
therefor  issued by the  insurer  shall to the extent  obtainable  contain (i) a
provision  that no act or omission of Tenant  which  would  otherwise  result in
forfeiture or reduction of the insurance  therein provided shall affect or limit
the obligation of the insurance  company to pay the amount of any loss sustained
and (ii) an  agreement  by the insurer  that such  policy  shall not be canceled
without at least thirty (30) days prior  written  notice by  registered  mail to
Landlord.  Tenant  shall  not do or  permit  to be  done  anything  which  shall
invalidate the insurance  policies  referred to herein.  If Tenant shall fail to
procure and maintain any insurance  required to be maintained by it by virtue of
any  provision of this  paragraph,  Landlord  may, but shall not be required to,
procure and maintain the same, but at the expense of Tenant.

         (d) Waiver of  Subrogation.  Landlord  and Tenant each hereby waive any
and all rights of recovery against the other, or against the partners, officers,
employees,  agents and  representatives  of the other,  for loss of or damage to
such  waiving  party or its  property  or the  property  of the other  under its
control to the  extent  that such loss or damage is  insured  against  under any
insurance policy in force at the time of such loss or damage. Tenant 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.

         (e)  Tenant's  Contents.  Tenant shall assume the risk of damage to any
fixtures,  goods,  inventory,  merchandise,  equipment,  furniture and leasehold
improvements  which remain the property of Tenant or as to which Tenant  retains
the right of removal from the  Premises,  and  Landlord  shall not be liable for
injury to  Tenant's  business or any loss of income  therefrom  relative to such
damage.  Tenant shall maintain the following  insurance coverage with respect to
such items during the Term:

                  (i)  Against  fire,  extended  coverage,   and  vandalism  and
         malicious  mischief  perils in an amount not less than  ninety  percent
         (90%) of the full replacement cost thereof;

                  (ii) Broad form boiler and  machinery  insurance  on a blanket
         repair and replacement basis with limits per accident not less than the
         replacement  cost of all  leasehold  improvements  and of all  boilers,
         pressure vessels, air conditioning equipment,  miscellaneous electrical
         apparatus  and all other  insurable  objects  owned or  operated by the
         Tenant or by others  (other than  Landlord)  on behalf of Tenant in the
         Premises, or relating to or serving the Premises; and;

                  (iii)  Business  interruption  insurance  in such an amount as
         will  reimburse   Tenant  for  direct  or  indirect  loss  of  earnings
         attributable  to all  such  perils  insured  against  in  subparagraphs
         11(e)(i) and (ii) hereinabove.

         (f) Workmen's Compensation.  Tenant shall, at its own cost and expense,
keep and maintain in full force and effect during the Term, a policy or policies
of workmen's  compensation  insurance covering all Tenant's employees working in
the Premises, and shall furnish Landlord with certificates thereof.

         (g) Rental  Income  Insurance.  Tenant  shall  obtain and keep in force
during the term of this Lease a policy of rental  income  insurance in an amount
adequate to cover Fixed Rent and Adjustments for a period of twelve (12) months,
with loss payable to Landlord, which insurance
                                       11
<PAGE>
shall also cover all real estate taxes and  insurance  costs for which Tenant is
obligated hereunder during such twelve (12) month period.

         12. Indemnity; Exemption of Landlord from Liability.

         (a) General.  In addition to any other obligations of Tenant hereunder,
including the obligations of Tenant to provide insurance, Tenant shall indemnify
and hold Landlord harmless for, from and against any and all claims arising from
Tenant's use of the Premises,  or from the conduct of Tenant's  business or from
any activity,  work or things done,  permitted or suffered by Tenant in or about
the Premises or elsewhere and shall further indemnify and hold Landlord harmless
for,  from and against any and all claims  arising from any breach or default in
the  performance  of any  obligation on Tenant's part to be performed  under the
terms of this  Lease,  or  arising  from any  negligence  of  Tenant,  or any of
Tenant's agents, contractors, or employees, and for, from and against all costs,
attorneys'  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 Landlord by reason of any such claim,  Tenant upon
notice  from  Landlord  shall  defend  the same at  Tenant's  expense by counsel
satisfactory to Landlord;  provided,  however, the foregoing indemnity shall not
apply to  claims  made as a  result  of the  active  negligence  or  intentional
misconduct  of Landlord.  Tenant,  as a material  part of the  consideration  to
Landlord for Landlord's execution of this Lease, also hereby assumes all risk of
damage to property or injury to persons in, upon or about the  Premises  arising
from any cause  whatsoever;  hereby waives all claims in respect thereof against
Landlord;  and agrees that all claims with respect  thereto shall be made solely
against any  insurance  carried by Tenant  and/or  against any other  persons or
entities which may be liable for such claims; provided, however, the assumption,
waiver and agreement set forth in this sentence shall not negate or diminish the
warranty obligations of Landlord set forth in paragraph 3 of this Lease.

         (b) Tenant's  Business.  In addition to any other  obligation of Tenant
hereunder,  including  any  obligation  of Tenant to provide  insurance,  Tenant
hereby agrees that Landlord shall not be liable for injury to Tenant's  business
or any loss of income therefrom or for damage to the goods,  wares,  merchandise
or other property of Tenant,  Tenant's employees,  invitees,  customers,  or any
other person in or about the Premises,  nor shall  Landlord be liable for injury
to the person of Tenant or Tenant'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 whatsoever,  resulting from conditions arising
upon the Premises,  or from other sources or places,  and  regardless of whether
the  cause of such  damage  or  injury  or the  means of  repairing  the same is
inaccessible to Tenant. Instead, Tenant shall seek recovery for any such injury,
loss or damage solely from any insurance carried by Tenant and/or from any other
persons  or  entities  which may be liable to Tenant  for such  injury,  loss or
damage.

         13. Damage or Destruction; Obligation to Rebuild.

         (a)  Landlord's  Obligation to Rebuild.  If the Premises are damaged or
destroyed  during the Term,  Landlord  shall,  except as  hereinafter  provided,
diligently  repair or rebuild them to substantially  the condition in which they
existed  immediately  prior to such  damage or  destruction;  provided  that any
damage  which is  estimated  in good faith by Landlord to be under Two  Thousand
Five Hundred Dollars ($2,500.00) shall be repaired by Tenant, and Landlord shall
reimburse  Tenant upon demand for  expenses  incurred in such repair work to the
extent of any proceeds  received by Landlord  from extended  coverage  insurance
maintained pursuant to paragraph 11 above.

         (b) Abatement of Rent. Rent due and payable  hereunder shall be abated,
but only to the extent of any proceeds  received by Landlord  from rental income
insurance   maintained  pursuant  to  paragraph  11  above,  during  the  period
commencing  with such  damage or  destruction  and ending  with the  substantial
completion by Landlord of the work of repair or reconstruction which Landlord is
obligated or undertakes to do;  provided,  however,  if such abatement period is
sixty (60) days or more,  Tenant's  obligation  to pay Rent  shall not  commence
until the earlier of (i)
                                       12
<PAGE>
occupancy of the damaged portion of the Premises by Tenant,  or (ii) thirty (30)
days after Landlord gives Tenant written notice of the approximate date that the
work of repair or restoration will be substantially complete.

         (c) Option to Terminate.  If the  Improvements are damaged or destroyed
to the extent that the same cannot, with reasonable diligence, be fully repaired
or restored by Landlord  within one hundred  eighty (180) days after the date of
the damage or destruction,  Tenant shall have the option to terminate this Lease
by written  notice given to Landlord  within  thirty (30) days after the date of
the damage or destruction. If the Building, including the Premises, can be fully
repaired or restored within the one hundred eighty (180) day period, or if it is
determined that such repair or restoration cannot be made within said period but
Tenant does not elect to terminate within thirty (30) days from the date of said
damage or  destruction,  this  Lease  shall  remain in full force and effect and
Landlord  shall  diligently  repair and restore the damage as soon as reasonably
possible.

         (d) Uninsured Casualties.  Notwithstanding anything contained herein to
the contrary,  in the event of damage to or destruction of all or any portion of
the Improvements  which is not fully covered (except for deductible  amounts) by
the  insurance  proceeds  received  by  Landlord  under the  insurance  policies
required to be maintained  pursuant to paragraph 11 above,  or in the event that
any portion of such  insurance  proceeds must be paid over to or are retained by
the  holder  of any  mortgage  or deed of trust  on the  Property  or  Premises,
Landlord  may  terminate  this Lease by written  notice to Tenant,  given within
thirty  (30)  days  after the date of notice  to  Landlord  that said  damage or
destruction  is not so covered or that the proceeds are not available for repair
of the damage or destruction;  provided, however, within a period of twenty (20)
days after  receipt of  Landlord's  termination  notice,  Tenant may, by written
notice given to Landlord,  make available to Landlord, for repair or restoration
but without any  reimbursement  by Landlord,  the funds  necessary to effect the
complete  repair  and  restoration  and,  in such  event,  Landlord's  notice of
termination  shall be rescinded.  If Landlord  does not elect to terminate  this
Lease or Tenant makes  available  the funds for repair or  restoration  as above
provided,  the Lease shall remain in full force and effect and the  Improvements
shall be repaired and rebuilt in accordance  with the  provisions for repair set
forth in subparagraph 13(a) above.

         (e)  Damage  Near  End of  Term.  If  the  Improvements  are  partially
destroyed or damaged  during the last  eighteen (18) months of the Term, as such
Term may have been extended pursuant to Exhibit F to this Lease, and the cost to
repair or restore the Premises  shall be Three  Hundred Fifty  Thousand  Dollars
($350,000) or greater,  either Landlord or Tenant may, at its option, cancel and
terminate  this  Lease as of the date of  occurrence  of such  damage  by giving
written  notice to the other party of such  election to do so within thirty (30)
days after the date of  occurrence  of such damage;  provided,  however,  if the
damage or destruction  occurs during the thirteenth  (13th) to eighteenth (18th)
month prior to the  expiration  of the Initial Term or First  Extended  Term (as
defined in Exhibit F) and Tenant then retains,  but has not yet  exercised,  its
option to extend the Term for an additional five-year period pursuant to Exhibit
F,  Tenant  may  elect,  by written  notice to  Landlord  given on or before the
earlier of (i) the date which is sixty  (60) days  after  receipt of  Landlord's
notice of  termination,  or (ii) one (1) year prior to expiration of the Initial
Term or First Extended Term, as applicable, to exercise its option to extend the
Term for an  additional  five-year  period as provided in Exhibit F and, in such
event,  any notice of termination  given by Landlord shall be rescinded and this
Lease shall continue in full force and effect.

         (f) Tenant's Waiver.  With respect to any destruction which Landlord is
obligated  to repair or may elect to repair  under the terms of this  paragraph,
Tenant  hereby  waives  all right to  terminate  this Lease  pursuant  to rights
otherwise  presently or hereafter  accorded by the provisions of Arizona Revised
Statutes Section 33-343 or other applicable laws to tenants, except as expressly
otherwise provided herein.

         14. Taxes and Assessments.
                                       13
<PAGE>
         (a) Payment.  Tenant shall pay all  Property  Taxes (as defined  below)
applicable to the Premises  during the Term. Each payment shall be made at least
ten (10) days prior to the delinquency date of such payment; provided,  however,
that if (i) in  connection  with  any  financing  obtained  by  Landlord  on the
Premises  or any  portion  thereof,  Landlord is required to pay into an impound
account  any  sums  due as  Property  Taxes,  and  (ii)  Tenant  has at any time
committed a default under  paragraph 17 of this Lease by failing to pay when due
and prior to the expiration of any applicable  cure period any monetary  amounts
to be paid by  Tenant  under  this  Lease,  then  Tenant  shall pay such sums to
Landlord  in  satisfaction  of  Tenant's  obligations  to pay  such  sums due as
Property Taxes as additional  rent and without  deduction or offset on or before
the first day of each and every month  during which said sums are required to be
impounded.  Tenant shall promptly furnish Landlord with evidence satisfactory to
Landlord  that  Property  Taxes have been paid.  If any Property  Taxes due with
respect  to the  Premises  shall  cover any period of time prior to or after the
expiration of the Term, Tenant's share of such Property Taxes shall be equitably
prorated  to cover only the period of time  within  the tax fiscal  year  during
which this Lease shall be in effect.  If Tenant  shall fail to pay any  Property
Taxes,  Landlord shall have the right, but not the obligation,  to pay the same,
in which case Tenant shall repay such amount to Landlord with Tenant's next Rent
installment.

         (b) Definition. As used herein, the term "Property Taxes" shall include
any form of general or special  assessment,  license fee, levy  penalty,  or tax
(other than  inheritance  or estate taxes)  imposed by any authority  having the
direct or indirect power to tax,  including any city,  county,  state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district,  or any part or parts  thereof,  or  against  any  legal or  equitable
interest of Landlord in the Premises or any part  thereof or against  Landlord's
right to rent or other  income  therefrom  (but  exclusive of taxes levied on or
computed  by  reference  to  Landlord's  net  income  as a  whole),  or  against
Landlord's  business  of leasing the  Premises,  it being the  intention  of the
parties  hereto  that the Rent to be paid  hereunder  shall be paid to  Landlord
absolutely  net,  without  deduction of any nature  whatsoever,  foreseeable  or
unforeseeable.

         (c)  Separate   Assessment.   Landlord   warrants   that  the  Premises
constitutes  all of one or more tax parcels for the  purposes of  assessment  of
real property taxes by the State of Arizona, and that no portion of the Premises
is jointly assessed with any other real property as a single tax parcel.

         (d) Personal Property.  Tenant shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings,  equipment and all
other  personal  property  contained on the Premises or elsewhere.  Tenant shall
cause  such  trade  fixtures,  furnishings,  equipment  and all  other  personal
property to be assessed and billed separately from the Premises.

         (e) Rent Tax.  Tenant  shall pay to  Landlord a sum equal to the amount
which  Landlord is required  to pay or collect by reason of any  privilege  tax,
sales tax, gross proceeds tax, rent tax, or like tax levied, assessed or imposed
by any governmental  authority or subdivision  thereof,  upon or measured by any
Rent,  Reimbursable  Expense,  or other  charges or sums  required to be paid or
improvements  to be made by  Tenant  under  this  Lease.  Such sum shall be paid
simultaneously with the payment by Tenant to Landlord of the Fixed Rent or other
charge  to  which  such  tax is  attributable  or,  in  the  case  of a tax  not
attributable  to Fixed Rent or other  charges,  at such time as  Landlord  shall
demand payment thereof.  Nothing contained in this Lease shall require Tenant to
pay any franchise,  corporate, estate, inheritance,  succession, or transfer tax
of Landlord or any tax upon the net income of Landlord.

         (f) Declaration. INTENTIONALLY DELETED.

         (g) Project  Assessments.  Tenant shall pay to Landlord or the owner or
manager of the Project, as Landlord may direct, prior to delinquency any and all
charges,  assessments, fees or other costs of any type which are due and payable
by Landlord or other  occupant of the  Premises as a result of the  inclusion of
the Premises in the Project,  including  but not limited to those  payable under
any covenants, conditions, restrictions or declarations affecting the Premises.
                                       14
<PAGE>
         (h) Right to Contest. Either party, at its expense, will have the right
to  contest  the  legality,  validity  or  amount of any  Property  Taxes or the
assessments or valuations  upon which same are based by appropriate  proceedings
prosecuted  in good faith.  Such  contest may be made in the name of Landlord or
Tenant, or both, and if requested by Tenant,  Landlord will actively at Tenant's
expense  participate  in such  contest.  Landlord  will be  notified of any such
contest by Tenant and will cooperate  with Tenant and, if required,  join Tenant
in any such proceedings. No such contest, however, shall permit any tax owing to
become delinquent or subject the Premises to a lien for delinquent taxes alleged
to be due and owing.

         15. Condemnation.

         (a) Rent Reduction or Lease Termination. If the Premises or any portion
thereof is 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 (the  "Condemnation
Date") and the Rent shall be reduced (as of the  Condemnation  Date) as provided
below.  If (i) more than ten  percent  (10%) of the floor  area of any  building
comprising the Improvements or more than  twenty-five  percent (25%) of the land
area of the  Property  which is not  occupied  by any such  building is taken by
condemnation, and (ii) as a result of such taking by condemnation the balance of
the Premises  remaining after such  condemnation is not reasonably  suitable for
the  use  to  which  the  Premises  were  being  put  immediately  prior  to the
condemnation,  Tenant may, at Tenant's  option,  to be exercised in writing only
within ten (10) days after  Landlord  shall have given Tenant  written notice of
such  taking  (or in the  absence  of such  notice,  within ten (10) days of the
Condemnation  Date) terminate this Lease as of the Condemnation  Date. If Tenant
does not terminate this Lease in accordance with the foregoing,  or in the event
that that  portion of the Premises  taken by  condemnation  is not  sufficiently
large so as to give rise to the right to terminate this Lease as above provided,
this  Lease  shall  remain in full  force and  effect as to the  portion  of the
Premises  remaining,  except  that the Fixed Rent  shall be  reduced  (as of the
Condemnation  Date) in the proportion  that the floor area of the Building taken
by condemnation bears to the total floor area of the Building.

         (b) Award.  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  Landlord,  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 Tenant
shall  be  entitled  to any  award  specifically  attributed  by the  condemning
authority to loss or damage to Tenant's  trade  fixtures and removable  personal
property or to Tenant's  relocation  costs.  In the event that this Lease is not
terminated  by reason of such  condemnation,  Landlord  shall,  to the extent of
severance  damages received by Landlord in connection with such condemnation and
not paid to or  retained  by the holder of any  mortgage or deed of trust on the
Property  or the  Premises,  repair  any damage to the  Premises  caused by such
condemnation  except to the extent that Tenant has been  reimbursed  therefor by
the condemning authority (in which event such reimbursement to Tenant shall also
be  applied  to such  repair).  Tenant  shall  pay any  amount in excess of such
severance damages required to complete such repair;  provided,  however,  if the
severance  damages are not  sufficient to pay all of the repair costs and if any
specific  item of repair  work  shall be  expected  to have a useful  life which
extends  beyond the term of this Lease  (including the term of any options which
Tenant may have the right to  exercise),  then Tenant  shall be obligated to pay
with respect to the identifiable cost of such item of repair only the portion of
the total  cost of such item of repair  which  bears the same ratio to the total
cost of such item of repair as the remaining  term of this Lease (as  determined
on the Condemnation  Date and including the term of any options which the Tenant
may have the right to exercise) bears to the reasonably  anticipated useful life
of such item of repair.

         (c)  Temporary  Condemnation.  If the temporary use of the whole or any
part of the Premises shall be taken by condemnation,  the Term shall not, except
as  hereinafter  specifically  provided,  be reduced or affected in any way, and
Tenant in such event shall  continue  to pay in full the Rent and other  charges
herein reserved,  without reduction or abatement, and, except to the extent that
Tenant is  prevented  from so doing by  reason  of any  order of the  condemning
authority,
                                       15
<PAGE>
shall continue to perform and observe all of the other covenants, conditions and
agreements  of this Lease to be  performed  or observed by Tenant as though such
taking had not occurred. In the event of any such temporary  condemnation Tenant
shall,  so long as it is otherwise in  compliance  with the  provisions  of this
Lease, be entitled to receive for itself any and all awards or payments made for
such use of that  portion of the  Premises  so taken;  provided,  however,  that
Tenant shall repair any and all damages to the Premises  (whether or not covered
by any award to Tenant) caused by such temporary  condemnation.  Anything in the
foregoing  to the  contrary  notwithstanding,  if the  period  of any  temporary
condemnation   exceeds  twelve  (12)  months  and  the  temporary   condemnation
materially interferes with Tenant's use of the Premises, Tenant may, at any time
thereafter  prior to the termination of such temporary  condemnation,  terminate
this Lease by written notice to Landlord, with such termination to have the same
force and  effect as if the Term of the  Lease  had  expired  as of such date of
termination.

         16. Assignment and Subletting.

         (a)  Consent.  Tenant  shall not  voluntarily  or by  operation  of law
assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any
part of Tenant's  interest in this Lease or in the Premises  without  Landlord's
prior written consent,  which consent Landlord shall not unreasonably  withhold;
provided,  however,  (a) Landlord  may withhold its consent to such  assignment,
transfer, mortgage,  subletting or other transfer or encumbrance pursuant to the
preceding sentence for substantive reasons including,  without  limitation,  the
financial  condition of the proposed  assignee or  transferee;  and (b) Landlord
shall be obligated to consent to any transfer or  assignment  which is part of a
merger  transaction  involving  Tenant or which is to a person  or entity  which
controls Tenant,  is controlled by Tenant or is controlled by the same entity as
Tenant. Any attempted assignment,  transfer, mortgage, subletting or encumbrance
without such consent shall be void and shall  constitute a breach of this Lease.
The consent of Landlord to any one assignment,  transfer, mortgage,  subletting,
or encumbrance shall not be deemed to be a consent to any subsequent assignment,
transfer, mortgage, subletting, or encumbrance.

         (b) Tenant's Continuing Liability. Regardless of Landlord's consent, no
subletting or assignment shall alter the primary  liability of Tenant to pay the
Rent or release Tenant of Tenant's  obligation to perform all other  obligations
to be performed by Tenant hereunder unless  Landlord's  written consent shall so
specifically  provide, and Landlord under no circumstances shall be obligated to
release Tenant from any such liability.  The acceptance of rent by Landlord from
any other person shall not be deemed to be a waiver by Landlord of any provision
hereof.

         (c)  Information.   In  connection  with  any  proposed  assignment  or
sublease, Tenant shall submit to Landlord in writing:

                  (i) The name of the proposed assignee or sublessee;

                  (ii) Such information as to the financial  responsibility  and
         standing of said  assignee or  sublessee  as  Landlord  may  reasonably
         require; and

                  (iii) All of the terms and conditions  upon which the proposed
         assignment or subletting is to be made.

         (d) Excess Sublease Rental.  If for any sublease or assignment,  Tenant
receives  rent  or  other  consideration,  either  directly  or  indirectly  (by
performance of Tenant's  obligations or otherwise) and either  initially or over
the Term of the sublease or assignment, in excess of the Fixed Rent, Adjustments
and  additional  rent called for  hereunder,  or in the case of the  sublease or
assignment  of a  portion  of the  Premises,  in  excess  of  such  Fixed  Rent,
Adjustments  and  additional  rent  fairly  allocable  to  such  portion,  after
appropriate  adjustments to assure that all other payments  called for hereunder
are appropriately taken into account,  Tenant shall pay to Landlord, at the same
time as Fixed Rent is due  hereunder,  one-half (1/2) of the excess of each such
payment of rent or other  consideration  received by Tenant  promptly  after its
receipt; provided,  however, such payment shall be required only with respect to
sums received by Tenant which are
                                       16
<PAGE>
attributable  to periods in an  Extended  Term (as  defined in Exhibit F) during
which  Tenant  has  assigned  and/or  sublet  all  or  substantially  all of the
Premises.

         (e) Release.  Whenever  Landlord  conveys its interest in the Premises,
Landlord  shall be  automatically  released  from  the  further  performance  of
covenants on the part of Landlord herein contained, and from any and all further
liability, obligations, costs and expenses, demands, causes of action, claims or
judgments arising from or growing out of, or connected with this Lease after the
effective  date  of said  release;  provided,  however,  Landlord  shall  not be
released  from the  obligations  to refund to Tenant  the  Security  Deposit  in
accordance  with  subparagraph  6(a) of this Lease in  accordance  with the next
sentence  hereof unless and until Landlord has either paid the Security  Deposit
to the  assignee or given the  assignee  credit for the amount of such  Security
Deposit.  The  effective  date of said  release  shall be the date the  assignee
executes an  assumption  of such an  assignment  whereby the assignee  expressly
agrees to assume all of Landlord's  obligations,  duties,  responsibilities  and
liabilities  with respect to this Lease.  If  requested,  Tenant shall execute a
form of release  and such other  documentation  as may be required to effect the
provisions of this paragraph.

         (f) Controlled Entity. Notwithstanding the provisions of this paragraph
16, Tenant may assign or sublet the Premises,  or any portion  thereof,  without
Landlord's  consent,  after  written  notice to  Landlord,  to any entity  which
controls,  is controlled by, or is under common ownership with Tenant, or to any
entity resulting from the merger or consolidation  with Tenant, or to any person
or entity  which  acquires  all the  assets of Tenant as a going  concern of the
business that is being conducted on the Premises or all of the outstanding stock
of Tenant,  provided that said assignee  assumes,  in full,  the  obligations of
Tenant under this Lease.  Any such  assignment  shall not, in any way, affect or
limit the  liability  of Tenant 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  Tenant,  the  consent  of whom  shall not be
necessary for such change or alteration.

         (g)  Attorneys'  Fees.  In the event that  Landlord  shall consent to a
sublease or assignment under subparagraph (a) above, Tenant shall pay Landlord's
reasonable  attorneys'  fees  incurred  in  connection  with the  giving of such
consent and review of the information  submitted by Tenant;  provided,  however,
the amount of such fees which Tenant  shall be  obligated  to pay in  connection
with any single consent shall not exceed Five Hundred Dollars ($500).

         17. Defaults; Remedies.

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

                  (i) INTENTIONALLY DELETED.

                  (ii) The  failure by Tenant to make any payment of Rent or any
         other payment required to be made by Tenant hereunder, as and when due,
         where such failure shall continue for a period of five (5) working days
         after written notice thereof from Landlord to Tenant;

                  (iii) The  failure by Tenant to observe or perform  any of the
         covenants,  conditions  or  provisions  of this Lease to be observed or
         performed by Tenant,  other than those described in  subparagraph  (ii)
         above,  where such failure  shall  continue for a period of thirty (30)
         days after written  notice  thereof from Landlord to Tenant;  provided,
         however,  that if the  nature of  Tenant's  default  is such that it is
         capable of being cured but more than  thirty  (30) days are  reasonably
         required for its cure, then Tenant shall not be deemed to be in default
         if Tenant  commences  such cure  within such thirty (30) day period and
         thereafter diligently prosecutes such cure to completion; or

                  (iv) The making by Tenant of any  general  assignment  for the
         benefit of creditors, the filing by or against Tenant of a petition for
         order of relief in bankruptcy for
                                       17
<PAGE>
         the purpose of bankruptcy  liquidation or reorganization  under any law
         relating to  bankruptcy  whether  now  existing  or  hereafter  enacted
         (including, without limitation, any petition filed by or against Tenant
         under  any one or  more of the  following  Chapters  of the  Bankruptcy
         Reform Act of 1978, 11 U.S.C.  ss.ss.  101-1330  ("Bankruptcy Code") as
         amended:  Chapter 7 or Chapter 9 or Chapter 11 or Chapter 12 or Chapter
         13)  except  that,  in the case of a filing  against  Tenant  of such a
         petition,  such  filing  shall  not be a  default  if the  petition  is
         dismissed or  discharged on or before ninety (90) days after the filing
         thereof; the appointment of a trustee or receiver to take possession of
         all or substantially  all of Tenant's assets located at the Premises or
         of Tenant's interest in this Lease, where possession is not restored to
         Tenant within ninety (90) days; or the  attachment,  execution or other
         judicial seizure of substantially all of Tenant's assets located at the
         Premises or of Tenant's  interest in this Lease,  where such seizure is
         not  discharged  within  ninety (90) days.  Unless  Landlord's  express
         written  consent  thereto  is first  obtained,  in no event  shall this
         Lease,  or any  interest  herein or  hereunder  or any  estate  created
         hereby,  be assigned or  assignable  by  operation  of law or by, in or
         under voluntary or involuntary bankruptcy liquidation or reorganization
         proceedings or otherwise and in no event shall this Lease or any rights
         or  privileges  hereunder  be an asset of Tenant  under any  bankruptcy
         liquidation or reorganization proceedings.  Any purported assignment or
         transfer in violation of the provisions of this subparagraph (iv) shall
         constitute a material default and breach of this Lease by Tenant and in
         connection  with any such  default and breach  Landlord  shall have the
         rights and remedies  described in  subparagraph  (b) below,  including,
         without  limitation,  the election to terminate this Lease.  As used in
         this   subparagraph   (iv)  the  words   "bankruptcy   liquidation   or
         reorganization proceedings" shall include any proceedings under any law
         relating to  bankruptcy  whether  now  existing  or  hereafter  enacted
         (including,  without  limitation,  proceedings under any one or more of
         the Bankruptcy Code as amended: Chapter 7 or Chapter 9 or Chapter 11 or
         Chapter 12 or Chapter 13).

         (b) Remedies.

                  (i) In the event of any default and breach by Tenant of any of
         its obligations  under this Lease and  notwithstanding  the vacation or
         abandonment  of the  Premises by Tenant,  this Lease shall  continue in
         effect so long as Landlord does not expressly  terminate Tenant's right
         to  possession  in any of the manners  specified in this  paragraph and
         Landlord may, at Landlord's option and without limiting Landlord in the
         exercise of any other rights or remedies which it may have by reason of
         such  default  and  breach,  exercise  all of its rights  and  remedies
         hereunder, including, without limitation:

                           (A) the  right  to  declare  the  Term  ended  and to
                  reenter the  Premises and take  possession  thereof and remove
                  all persons therefrom,  and Tenant shall have no further claim
                  in or to the Premises or under this Lease; or

                           (B) the right without  declaring  this Lease ended to
                  reenter the  Premises,  take  possession  thereof,  remove all
                  persons  therefrom  and  occupy or lease the whole or any part
                  thereof  for and on  account of Tenant and upon such terms and
                  conditions  and for such rent as Landlord  may deem proper and
                  to  collect  such  rent or any other  rent that may  hereafter
                  become payable and apply the same as provided in  subparagraph
                  (ii) below; or

                           (C) the right,  even though  Landlord  may have relet
                  the  Premises  or brought an action to collect  Rent and other
                  charges without terminating this Lease, to thereafter elect to
                  terminate  this Lease and all of the rights of Tenant in or to
                  the Premises; or

                           (D) the right,  without  terminating  this Lease,  to
                  bring an action or actions to collect  Rent and other  charges
                  hereunder  which are from time to time past due and  unpaid or
                  to  enforce  any  other  provisions  of  this  Lease  imposing
                  obligations on Tenant,  it being  understood that the bringing
                  of any such action or actions shall not  terminate  this Lease
                  unless written notice of termination is given;
                                       18
<PAGE>
                  provided, however;

                           (Y) if  Tenant  is in  possession  of  the  Premises,
                  Landlord  shall not be entitled to recover  possession  of the
                  Premises  by means of a  lock-out  or other  self-help  remedy
                  until there has been a determination by a court of appropriate
                  jurisdiction  that  Landlord is entitled to possession or that
                  Tenant is no longer entitled to possession; and

                           (Z) Landlord  shall not be entitled to exercise,  and
                  hereby  waives,  any statutory  landlord liens with respect to
                  Tenant's personal property, equipment and fixtures.

                  (ii) Should  Landlord  relet the Premises under the provisions
         of subparagraph  (b)(i)(B) above, Landlord may execute any lease either
         in its own name or in the name of Tenant,  but Tenant  hereunder  shall
         have no right or  authority  whatever  to collect any rent from the new
         tenant.  The proceeds of any such  reletting  shall first be applied to
         the  payment  of the costs and  expenses  of  reletting  the  Premises,
         including  without  limitation,  reasonable  brokerage  commissions and
         alterations and repairs which Landlord,  in its sole discretion,  deems
         reasonably  necessary  and  advisable  and to the payment of reasonable
         attorneys'  fees incurred by Landlord in  connection  with the Tenant's
         default,  the retaking of the Premises and such reletting and,  second,
         to the payment of any  indebtedness,  other than Rent,  due  hereunder,
         including,  without  limitation,  storage  charges owing from Tenant to
         Landlord;  provided,  however,  the amount of the proceeds which may be
         applied to reimburse Landlord for the cost of repair and restoration of
         the Premises in connection  with a reletting shall not exceed the costs
         necessary  to  restore  the  Premises  to  the  condition  which  would
         otherwise  have been  required  at the  expiration  of the Term of this
         Lease, but Tenant  acknowledges that Landlord will have no duty to make
         any  other  improvements  to the  Premises  in  order  to  satisfy  any
         obligation  Landlord  may have under  applicable  law to use good faith
         efforts to relet the Premises in order to mitigate  damages.  When such
         costs and expenses of reletting have been paid, and if there is no such
         indebtedness  or such  indebtedness  has  been  paid,  Tenant  shall be
         entitled  to a credit for the net amount of rental  received  from such
         reletting  each month  during the  unexpired  balance of the Term,  and
         Tenant  shall pay  Landlord  monthly  on the first day of each month as
         specified  herein  such sums as may be  required to make up the rentals
         provided for in this Lease. Nothing contained herein shall be construed
         as obligating Landlord to relet the whole or any part of the Premises.

                  (iii) Should  Landlord elect to terminate this Lease under the
         provisions of subparagraphs  (b)(i)(A) or (C) above,  Landlord shall be
         entitled to recover  immediately  from Tenant (in addition to any other
         amounts  recoverable  by Landlord as  provided by law),  the  following
         amounts:

                           (A) the worth at the time of award of the unpaid rent
                  which had been earned at the time of termination;

                           (B) the  worth at the time of award of the  amount by
                  which the unpaid  rent  which  would  have been  earned  after
                  termination until the time of award exceeds the amount of such
                  rental  loss that  Tenant  proves  could have been  reasonably
                  avoided;

                           (C) the  worth at the time of award of the  amount by
                  which the  unpaid  rent for the  balance of the Term after the
                  time of award  exceeds  the  amount of such  rental  loss that
                  Tenant proves could be reasonably avoided; and

                           (D) any other amount necessary to compensate Landlord
                  for all the detriment  proximately  caused by Tenant's failure
                  to  perform  its  obligations  under the Lease or which in the
                  ordinary course of things would be likely to result therefrom.
                                       19
<PAGE>
         For purposes of  computing  "the worth at the time of the award" of the
         amount specified in subparagraph  (b)(iii)(C)  above, such amount shall
         be discounted  at the discount rate of the Federal  Reserve Bank of San
         Francisco at the time of award. For purposes of computing "the worth at
         the time of the award" under subparagraphs  (b)(iii)(A) and (b)(iii)(B)
         above,  an  interest  rate of ten  percent  (10%)  per  annum  shall be
         utilized.

                  (iv) If  Landlord  shall  elect to  reenter  the  Premises  as
         provided  above,  Landlord shall not be liable for damages by reason of
         any reentry so long as  Landlord  has acted in a  reasonable  manner in
         effecting   such  reentry.   Except  for  claims  based  on  negligent,
         malicious,  reckless  or willful and wanton  acts of  Landlord,  Tenant
         hereby  waives all claims and demands  against  Landlord for damages or
         loss arising out of or in  connection  with any  reentering  and taking
         possession  of the  Premises  and waives all claims for damages or loss
         arising out of or in connection  with any  destruction  of or damage to
         the  Premises  and any loss of property  belonging  to Tenant or to any
         other person,  firm or corporation which may be in or upon the Premises
         at the time of such reentry.

                  (v)  Landlord  shall  not be deemed  to have  terminated  this
         Lease, Tenant's right to possession of the Premises or the liability of
         Tenant to pay Rent  thereafter  to accrue or its  liability for damages
         under any of the provisions  hereof by any reentry  hereunder or by any
         action in unlawful  detainer or otherwise to obtain  possession  of the
         Premises,  unless Landlord shall notify Tenant in writing that Landlord
         has so elected to terminate this Lease.  Tenant agrees that the service
         by Landlord of any notice pursuant to the unlawful detainer statutes or
         comparable  statutes of the state or locality in which the Premises are
         located and the surrender of  possession  pursuant to such notice shall
         not (unless  Landlord  elects to the  contrary at the time of or at any
         time  subsequent to the service of such notice and such election  shall
         be  evidenced  by a  written  notice  to  Tenant)  be  deemed  to  be a
         termination  of this Lease or of  Tenant's  obligations  hereunder.  No
         reentry or reletting under this paragraph shall be deemed to constitute
         a surrender  or  termination  of this  Lease,  or of any of the rights,
         options, elections, powers and remedies reserved by Landlord hereunder,
         or a release of Tenant from any of its  obligations  hereunder,  unless
         Landlord shall specifically  notify Tenant, in writing, to that effect.
         No such reletting  shall preclude  Landlord from thereafter at any time
         terminating this Lease as herein provided.

                  (vi) All fixtures,  furnishings, goods, equipment, chattels or
         other personal property of Tenant remaining on the Premises at the time
         that Landlord takes  possession  thereof may at Landlord's  election be
         stored at Tenant's expense or sold or otherwise disposed of by Landlord
         in any manner permitted by applicable law.

                  (vii) All rights, options,  elections,  powers and remedies of
         Landlord  under the  provisions  of this Lease are  cumulative  of each
         other and of every other right, option, election, power or remedy which
         Landlord may otherwise have at law or in equity and all or any of which
         Landlord is hereby authorized to exercise.  The exercise of one or more
         rights, options,  elections,  powers or remedies shall not prejudice or
         impair  the  concurrent  or  subsequent  exercise  of other  rights  or
         remedies  Landlord may have upon a breach and default  under this Lease
         and shall not be deemed to be a waiver of Landlord's rights or remedies
         thereupon  or to be a  release  of  Tenant  from  Tenant's  obligations
         thereon  unless  such  waiver or release is  expressed  in writing  and
         signed by Landlord.

                  (viii) INTENTIONALLY DELETED.

         (c) Late  Charges.  Tenant  hereby  acknowledges  that late  payment by
Tenant to Landlord of Rent and other sums due hereunder  will cause  Landlord 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
Landlord  by the terms of any  mortgage  or trust deed  covering  the  Premises.
Accordingly,  if any  installment of rent or any other sum due from Tenant shall
not be received by Landlord or  Landlord's  designee  within ten (10) days after
such amount  shall be due,  Tenant  shall pay to Landlord a late charge equal to
five percent (5%) of such overdue amount.
                                       20
<PAGE>
The parties hereby agree that such late charge  represents a fair and reasonable
estimate of the costs  Landlord  will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's  default with respect to such overdue amount,  nor prevent  Landlord
from exercising any of the other rights and remedies granted hereunder.

         (d) Payment or  Performance  by Landlord.  Landlord  may, at Landlord's
option  and  without  any  obligation  to do so, pay any sum or do any act which
Tenant has failed to pay or do at the time  Tenant  was  obligated  to make such
payment or perform  such act and  Landlord  shall be  entitled  to recover  from
Tenant,  upon  demand,  all sums  expended by Landlord in making such payment or
performing  such act,  together  with  interest  thereon at the rate provided in
subparagraph  18(d)  from  the  date of  expenditure  until  repaid  by  Tenant;
provided,  however, unless Landlord reasonably deems such payment or performance
by Landlord to be necessary  prior to expiration of any  applicable  cure period
set forth in  subparagraph  (a) above in order to protect  Landlord's  interest,
Landlord  shall not be entitled to recover  such sums and  interest  from Tenant
unless Landlord waited until after  expiration of any applicable cure period for
such non-payment or non-performance set forth in subparagraph (a) above. Any sum
and  interest  payable  by Tenant  under this  subparagraph  (d) shall be deemed
additional rent under this Lease.

         18. Miscellaneous.

         (a) Estoppel Certificates.

                  (i) Tenant  shall at any time upon not less than ten (10) days
         prior written notice from Landlord execute, acknowledge, and deliver to
         Landlord  a  statement  in  writing   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 acknowledging  that
         there are not, to Tenant's knowledge,  any uncured defaults on the part
         of Landlord hereunder,  or specifying such defaults if any are claimed.
         Any such  statement  may be  conclusively  relied upon by any person to
         whom it  shall be  delivered  by  Landlord  including  any  prospective
         purchaser or encumbrancer of the Premises,  the Building, the Property,
         or any part thereof.

                  (ii) Tenant's  failure to deliver such  statement  within such
         time shall be  conclusive  upon Tenant that this Lease is in full force
         and  effect,  without  modification  except  as may be  represented  by
         Landlord; that there are no uncured defaults in Landlord's performance;
         and that not more than one month's Rent has been paid in advance.

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

                  (iv)  Landlord  shall at any time  upon not less than ten (10)
         days prior written notice from Tenant execute, acknowledge, and deliver
         to  Tenant  a  statement  in  writing  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 acknowledging  that
         there are not, to  Landlord's  knowledge,  any uncured  defaults on the
         part of  Tenant  hereunder,  or  specifying  such  defaults  if any are
         claimed.  Any such  statement  may be  conclusively  relied upon by any
         person  to  whom  it  shall  be  delivered  by  Tenant   including  any
         prospective  encumbrancer  of Tenant's  inventory or any part  thereof.
         Landlord's  failure to deliver such statement within such time shall be
         conclusive in favor of the prospective  encumbrancer that this Lease is
         in  full  force  and  effect,  without  modification  except  as may be
         represented by Tenant; that there are no uncured defaults
                                       21
<PAGE>
         in Tenant's  performance;  and that not more than one month's  Rent has
         been paid in advance.

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

         (c) Construction.  Paragraph captions are solely for the convenience of
the parties and shall not be deemed to or be used to define,  construe, or limit
the terms  hereof.  As used in this Lease,  the  masculine,  feminine and neuter
genders shall be deemed to include the others,  and the singular number shall be
deemed to include the plural,  whenever the context so requires.  The invalidity
of  any  provisions  of  this  Lease  as  determined  by a  court  of  competent
jurisdiction  shall in no way affect the validity of any other provision hereof.
This Lease shall be governed by the laws of the state in which the  Premises are
located.

         (d)  Interest  on  Past-Due  Obligations.  Except as  expressly  herein
provided,  any amount due to Landlord or Tenant and not paid when due shall bear
interest  at the  lesser  of (i)  fifteen  percent  (15%)  per annum or (ii) the
maximum rate  permitted by law,  from the date due until the date such amount is
paid.  Payment of such interest shall be made when such amount is paid.  Payment
of such  interest  shall not  excuse or cure any  default  by Tenant  under this
Lease.

         (e) Time of  Essence.  Time is of the  essence of this Lease and all of
the covenants and obligations hereof.

         (f) Counterparts. INTENTIONALLY DELETED.

         (g) 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,  which writing shall be
signed by the parties in interest at the time of the modification.

         (h) Notices. Any notices, approvals,  agreements,  certificates,  other
documents or  communications  between the parties  hereto  required or permitted
under this Lease shall be in writing. Any such communications shall be deemed to
have been duly given or served if  delivered in hand or  forty-eight  (48) hours
after deposit in the United States mail,  certified or  registered,  postage and
fees  prepaid,  return  receipt  requested,  addressed  to  the  parties  at the
addresses set forth in paragraph 1 of this Lease.  The address to which any such
communications  shall be sent may be changed by either party hereto from time to
time by a notice mailed as aforesaid. A copy of each notice to Tenant shall also
be sent to:

                  Scott A. Rose, Esq.
                  O'Connor, Cavanagh, Anderson, Killingsworth & Beshears
                  One East Camelback Road, Suite 1100
                  Phoenix, AZ 85012-1656

but copies of notices sent in accordance  with this  sentence are  informational
and are not required in order for the notices  given to Landlord or Tenant to be
effective.

         (i) Waivers.  No waiver by Landlord or Tenant of any  provision  hereof
shall be  deemed a waiver  of any other  provision  hereof or of any  subsequent
breach by the  other  party of the same or any other  provision.  Landlord's  or
Tenant's consent to or approval of any act shall
                                       22
<PAGE>
not be deemed to render  unnecessary  the  obtaining of  Landlord's  or Tenant's
consent to or approval of any subsequent act by the other party.  The acceptance
of Rent hereunder by Landlord  shall not be a waiver of any preceding  breach by
Tenant of any  provision  hereof,  other  than the  failure of Tenant to pay the
particular  Rent  so  accepted,  regardless  of  Landlord's  knowledge  of  such
preceding breach at the time of acceptance of such Rent.

         (j)  Recording.  Landlord and Tenant shall,  upon the request of either
party,  execute,  acknowledge and deliver to the other a "short form" memorandum
of this Lease for recording purposes.

         (k) Holding  Over.  If Tenant  remains in possession of the Premises or
any part thereof after the expiration of the Term or sooner  termination of this
Lease with the express written  consent of Landlord and without  executing a new
lease,  such occupancy shall be construed as a tenancy from  month-to-month at a
rental equal to one hundred fifty  percent  (150%) of the last monthly Rent plus
all other charges  payable  hereunder,  and upon all the terms hereof insofar as
the same are applicable to a month-to-month  tenancy.  Nothing contained in this
subparagraph  shall be construed  to grant Tenant the right to holdover  without
the express written consent of Landlord.

         (l) Covenants and Conditions.  Each provision of this Lease performable
by Tenant shall be deemed both a covenant and a condition.

         (m)  Binding  Effect.  Subject  to any  provisions  hereof  restricting
assignment or subletting by Tenant and subject to the provision of  subparagraph
(b) above, this Lease shall bind the parties and their personal representatives,
successors and assigns.

         (n) Subordination.

                  (i) This Lease, at Landlord's option,  shall be subordinate to
         any ground lease,  mortgage,  deed of trust, or any other hypothecation
         for security now or hereafter placed upon the Premises, the Building or
         the Property, or any part or parts thereof, and to any and all advances
         made  on the  security  thereof  and to  all  renewals,  modifications,
         consolidations, replacements and extensions thereof; provided, however,
         such subordination  shall not be binding on Tenant unless the holder of
         the mortgage, deed of trust or other interest to which this Lease is to
         be  subordinate  agrees  that,  so long  as  Tenant  is not in  default
         hereunder:

                           (A) the holder will not disturb  Tenant's  possession
                  of the Premises;

                           (B) the holder agrees that, while it is in possession
                  of the Premises, it will perform Landlord's  obligations under
                  this  Lease  which  are  attributable  to the  period  of such
                  possession; and

                           (C) the holder will permit  insurance  proceeds to be
                  used for repair and restoration as provided in this Lease.

         If any present or future  mortgagee,  trustee or ground lessor shall at
         any time  elect to have this Lease  prior to the lien of its  mortgage,
         deed of trust or ground  lease,  and  written  notice of such  election
         shall be given to  Tenant,  this  Lease  shall be deemed  prior to such
         mortgage,  deed of trust, or ground lease,  whether this Lease is dated
         prior  or  subsequent  to the date of said  mortgage,  deed of trust or
         ground lease or the date of recording thereof.

                  (ii)  Tenant  agrees to  execute  any  documents  required  to
         effectuate such  subordination  or to make this Lease prior to the lien
         of any mortgage, deed of trust or ground lease, as the case may be, and
         failing to do so within ten (10) days after written demand, does hereby
         make,  constitute and irrevocably appoint Landlord as Tenant's attorney
         in fact and in  Tenant's  name,  place and stead,  to do so;  provided,
         however, such
                                       23
<PAGE>
         documents  shall grant to Tenant the benefits  and rights  described in
         clauses (A), (B) and (C) of subparagraph (n)(i) above.

         (o)  Attorneys'  Fee. If either  party  brings an action to enforce the
terms hereof or declare  rights under this Lease,  the  prevailing  party in the
final adjudication of any such action, on trial or appeal,  shall be entitled to
its costs and  expenses  of suit,  including,  without  limitation,  its  actual
attorneys'  fees,  to be paid by the losing party as fixed by the court.  In any
situation  in which a dispute  is settled  other  than by action or  proceeding,
Tenant shall pay all Landlord's costs and attorneys' fees relating thereto.

         (p) Landlord's  Access.  Landlord and Landlord'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 or lenders, and making such
alterations,   repairs,  improvements  or  additions  to  the  Premises  or  the
improvements  as Landlord may deem  necessary or desirable;  provided,  however,
except in a situation reasonably deemed by Landlord to be an emergency, Landlord
shall give Tenant not less than  twenty-four  (24) hours prior written notice of
Landlord's  planned entry.  Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the  Premises any ordinary  "For
Lease" signs, all without rebate of rent or liability to Tenant.

         (q) Auctions. INTENTIONALLY DELETED.

         (r) Merger.  The voluntary or other  surrender of this Lease by Tenant,
or a mutual  cancellation  thereof,  shall not work a merger,  and shall, at the
option of Landlord,  terminate all or any existing  subtenancies  or may, at the
option of Landlord,  operate as an  assignment to Landlord of any or all of such
subtenancies.  During any period  while  Tenant is in default  under this Lease,
Landlord,  in addition to any other  rights and  remedies it may have under this
Lease,  shall have the right to collect  directly from any subtenant all rentals
owing to Tenant  under any  subtenancy  and to apply such rentals to any amounts
owing to  Landlord by Tenant and the  payment of such  amounts by the  subtenant
directly to Landlord shall not be a default under the subtenancy.

         (s) Joint and  Several  Liability.  Each  party  signing  this Lease as
Tenant  shall be jointly  and  severally  liable for the  failure on the part of
Tenant to pay any sums due under  the terms of this  Lease or for the  breach by
Tenant or any of the covenants or obligations of Tenant contained herein.

         (t) Individual Liability.  The obligations of Landlord under this Lease
do not constitute personal  obligations of the individual  partners,  directors,
officers, or shareholders of Landlord,  and Tenant shall look solely to the real
estate that is the subject of this Lease and to no other  assets of Landlord for
satisfaction  of any  liability  in  respect  of this  Lease  and  will not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or any of their personal assets for such satisfaction.

         (u) Attornment.  Tenant shall, in the event any proceedings are brought
for the  foreclosure  of, or in the event of exercise of the power of sale under
any mortgage or deed of trust made by the Landlord,  its  successors or assigns,
encumbering the Premises, or any part thereof, or in the event of termination of
the ground lease, if any, and if so requested, attorn to the purchaser upon such
foreclosure  or sale or upon  any  grant of a deed in lieu of  foreclosure,  and
shall recognize such purchaser as the Landlord under this Lease, so long as such
purchaser grants to Tenant the rights and benefits set forth in clauses (A), (B)
and (C) of subparagraph 18(n)(i) above.

         (v)  Lenders  Right to Cure.  Tenant  agrees to give the  holder of any
mortgage or trust deed  encumbering the Premises,  by registered mail, a copy of
any notice of default or  nonperformance  served upon  Landlord,  provided  that
prior to such notice,  Tenant has been notified in writing (by way of Assignment
of Rents and Leases or otherwise) of the address of such mortgagee or trust deed
holder. Tenant further agrees that Landlord shall not be in default under
                                       24
<PAGE>
this Lease unless (i) Tenant has given a written notice to Landlord stating that
Landlord has failed to perform Landlord's  obligations under this Lease and (ii)
specifying  with  particularity  the  obligations  which  Landlord has failed to
perform,  and Landlord thereafter (A) fails to commence the cure of such default
within thirty (30) days after receipt of such notice or (B) fails to perform any
of its  obligations  so  specified  within a  reasonable  time after  Landlord's
receipt  of such  notice.  If  Landlord  shall  fail to  commence  or cure  such
nonperformance  in a timely  manner as above  provided,  then such  mortgagee or
trust deed holder shall have an additional thirty (30) days within which to cure
the  default,  or, if such default  cannot be cured within that time,  then such
additional  time as may be  necessary  if  within  such  thirty  (30)  days such
mortgagee  or trust deed holder has  commenced  and is  diligently  pursuing the
remedies   necessary  to  cure  such  default  (including  but  not  limited  to
commencement of foreclosure  proceedings,  if necessary to effect such cure), in
which event this Lease shall not be terminated by Tenant while such remedies are
being so diligently pursued.

         (w) Revisions to Lease. INTENTIONALLY DELETED.

         (x) Administrative  Charge. In addition to Fixed Rent,  Adjustments and
other charges hereunder,  Tenant shall pay to Landlord an overall administrative
charge of five percent (5%) of any charge  which is Tenant's  responsibility  to
pay, which Landlord pays on behalf of Tenant and for which Landlord subsequently
bills Tenant.

         (y)  Estimated  Payments.  If Tenant has at any time during the Term of
this Lease  committed a default  under  paragraph 17 of this Lease by failing to
pay when due and prior to the  expiration  of any  applicable  cure  period  any
monetary amount to be paid by Tenant under this Lease, Landlord may require that
Tenant  thereafter  during the remaining Term of this Lease pay to Landlord,  in
monthly  payments due at the time payments of Fixed Rent are due hereunder,  the
estimated  amounts of the annual  premiums for all or a portion of the insurance
to be carried  by Tenant and  payments  of  Property  Taxes to be made by Tenant
under this Lease;  provided,  however,  if the Landlord  requires such estimated
payments and Tenant,  for a period of twenty-four (24) consecutive  months after
the first time Landlord  requires  such  estimated  payments,  does not commit a
default under paragraph 17 of this Lease by failing to pay when due and prior to
the expiration of any applicable  cure period any monetary  amount to be paid by
Tenant under this Lease (including but not limited to such estimated  payments),
Tenant,  except as otherwise provided in subparagraph  14(a), shall no longer be
required to make such  estimated  payments  unless and until  Tenant at any time
thereafter  commits a default under paragraph 17 of this Lease by failing to pay
when due and prior to  expiration  of any  applicable  cure period any  monetary
amount to be paid by Tenant under this Lease. The estimated payments required by
this  subparagraph (y) shall be in addition to any impound payments  required by
subparagraph  14(a),  but  Tenant  may credit  against  payments  due under this
subparagraph  (y) any impound  payments made by Tenant  pursuant to subparagraph
14(a) to the extent such impound  payments  apply to the same expense item as an
estimated  payment  under this  subparagraph  (y). The amount of each  estimated
monthly  payment shall be determined by dividing the Landlord's  estimate of the
annual  amount of the  applicable  payment,  as  determined  in the  exercise of
Landlord's  reasonable  discretion,  by twelve (12). Landlord shall then use the
estimated  payments to pay the amounts  owing if Tenant is not in default  under
this Lease;  provided,  however,  Tenant shall remain fully  obligated to pay to
Landlord or directly  to the  applicable  entity,  as Landlord  may direct,  any
deficiency  between the amount  owing for the  applicable  insurance  premium or
Property  Tax and the amount of the  estimated  payments  held by  Landlord  for
application  to such premium or Property  Tax. The amount of estimated  payments
paid and to be paid by  Tenant  shall be  reconciled  on an annual  basis,  with
appropriate  deficiency  payments and adjustments to be made or credits given in
the event that the estimated  payments result in any underpayment or overpayment
to Landlord by Tenant when the amount of the actual  charges for the  applicable
premiums and/or Property Taxes are actually determined.

         19. Toxic Materials.

         (a) Definitions.
                                       25
<PAGE>
                  (i) As used in this Lease,  the term  "Hazardous  Material[s]"
         means any oil,  flammable  items,  explosives,  radioactive  materials,
         hazardous or toxic  substances,  material or waste or related materials
         including, without limitation, any substances that pose a hazard to the
         Premises  or to persons  on or about the  Premises  and any  substances
         defined as or  included in the  definition  of  "hazardous  substance,"
         "hazardous waste," "hazardous material," "toxic substance,"  "extremely
         hazardous  waste,"  "restricted  hazardous  waste" or words of  similar
         import,  now or  subsequently  regulated  in any way  under  applicable
         federal,  state  or  local  laws  or  regulations,   including  without
         limitation,  petroleum-based products, paints, solvents, lead, cyanide,
         DDT,  printing inks,  acids,  pesticides,  ammonia  compounds and other
         chemical products,  asbestos,  PCBs, urea formaldehyde foam insulation,
         transformers or other equipment containing  dielectric fluid, levels of
         polychlorinated  biphenyls,  or radon gas, and similar  compounds,  and
         including any different  products and materials which are  subsequently
         found to have  adverse  effects  on the  environment  or the health and
         safety of persons.

                  (ii) As used herein, the term "Environmental Law[s]" means any
         one or all of the following: the Comprehensive  Environmental Response,
         Compensation and Liability Act, as amended by the Superfund  Amendments
         and  Reauthorization  Act of 1986 (42 U.S.C.  ss.ss. 9601 et seq.); the
         Resource  Conservation  and Recovery  Act as amended (42 U.S.C.  ss.ss.
         6901 et seq.); the Safe Drinking Water Act as amended (42 U.S.C. ss.ss.
         300f et seq.); the Clean Water Act as amended (33 U.S.C. ss.ss. 1251 et
         seq.);  the Clean Air Act as amended (42 U.S.C.  ss.ss.  7401 et seq.);
         the Toxic  Substances  Control Act as amended (15 U.S.C.  ss.ss. 136 et
         seq.); the Solid Waste Disposal Act as amended (42 U.S.C.  ss.ss.  3251
         et seq.); the Hazardous Materials  Transportation Act (49 U.S.C. ss.ss.
         1801 et seq.); the regulations  promulgated under any of the foregoing;
         and all other laws, regulations,  ordinances,  standards, policies, and
         guidelines  now in effect or  hereinafter  enacted by any  governmental
         entity  (whether  local,  state  or  federal)  having  jurisdiction  or
         regulatory   authority  over  the  Premises  or  the  Project  or  over
         activities  conducted  therein  and which deal with the  regulation  or
         protection  of human  health,  industrial  hygiene or the  environment,
         including the soil, subsurface soil, ambient air, groundwater,  surface
         water, and land use.

                  (iii) As used herein, the term  "Environmental  Activity[ies]"
         means any generation, manufacture,  production, pumping, bringing upon,
         use,  storage,  treatment,  release,  discharge,   escaping,  emitting,
         leaching, disposal or transportation of Hazardous Materials.

         (b) Prohibition on Hazardous Materials. Except as specifically provided
in subparagraph  (c) below,  Tenant shall not cause or permit any  Environmental
Activities in, on or about the Premises by Tenant or Tenant's agents, employees,
contractors,   assignees,   sublessees  or  invitees  (hereinafter  cumulatively
referred to as "Tenant's Agents") without the prior written consent of Landlord.
Landlord  shall be  entitled  to take  into  account  such  factors  or facts as
Landlord  may  reasonably  determine  to be relevant in  determining  whether to
consent to Tenant's  proposed  Environmental  Activity  and  Landlord may attach
conditions to any such consent if such  conditions are  reasonably  necessary to
protect Landlord's  interests in avoiding  potential  liability upon Landlord or
damage to Landlord's property arising from any Environmental  Activity by Tenant
or Tenant's  Agents.  In no event  shall  Landlord be required to consent to the
installation or use of any storage tanks on the Premises.

         (c) Exception to Prohibition. Notwithstanding the prohibition set forth
in subparagraph (b) above,  but subject to Tenant's  covenant to comply with all
Environmental  Laws and with the other  provisions of this  paragraph 19, Tenant
may  bring  upon,  keep  and  use in  the  Improvements  (but  not  outside  the
Improvements)  (i)  general  office  supplies  typically  used in an  office  or
warehouse  in the  ordinary  course of business,  such as copier  toner,  liquid
paper, glue, ink and janitorial  supplies,  so long as such supplies are used in
the manner for which they were designed and in such amounts as may be normal for
the  business  operations  conducted by Tenant in the  Premises,  and (ii) those
Hazardous Materials, if any, described on Exhibit G attached hereto
                                       26
<PAGE>
and by this  reference  made a part  hereof so long as Tenant has  delivered  to
Landlord a description of the handling,  storage, use and disposal procedures to
be utilized by Tenant with respect thereto.

         (d) Compliance with Environmental  Laws. Tenant shall keep and maintain
the Premises in compliance  with,  and shall not cause or permit the Premises to
be in violation  of, any  Environmental  Laws.  All Tenant's  activities  at the
Premises  shall be in  accordance  with all  Environmental  Laws.  Additionally,
Tenant shall obtain any and all necessary permits for Tenant's activities at the
Premises.  Tenant's  obligations and  liabilities  under this paragraph 19 shall
continue so long as Landlord  bears any  liability or  responsibility  under the
Environmental Laws for any action that occurs on the Premises during the term of
this Lease.

         (e)  Environmental  Notices.  Each party shall  immediately  notify the
other party of, and upon request  from the other party shall  provide such other
party with copies of, the following:

                  (i)  Any  correspondence,  communication  or  notice,  oral or
         written,  to or from any governmental  entity regarding the application
         of  Environmental  Laws to the Premises or Tenant's  operations  on the
         Premises including,  without limitation,  notices of violation, notices
         to comply and citations;

                  (ii) Any reports filed  pursuant to any  Environmental  Law or
         self-reporting requirements;

                  (iii)    Any permits and permit applications; and

                  (iv) Any change in Tenant's  operations  on the Premises  that
         will  change or has the  potential  to change  Tenant's  or  Landlord's
         obligations or liabilities under Environmental Laws.

Tenant shall also notify the Landlord of the release of any  Hazardous  Material
in, on, under, about or above the Premises or the Project.

         (f) Tenant's Environmental Indemnity.  Tenant shall protect, indemnify,
defend (with counsel  satisfactory  to Landlord) and hold harmless  Landlord and
its  directors,  officers,  partners,  employees,  agents,  lenders,  and ground
lessees,  if any, and their  respective  successors  and assigns  for,  from and
against any and all losses, damages, claims, costs, expenses,  penalties,  fines
and  liabilities of any kind  (including,  without  limitation,  the cost of any
investigation,   remediation  and  cleanup,   and  attorneys'  fees)  which  are
attributable  to (i) any  Environmental  Activity on the Premises  undertaken or
committed  by Tenant or  Tenant's  Agents  or caused by the  negligence  of such
persons  during the Term of this  Lease,  (ii) any  remedial  or  clean-up  work
undertaken by or for Tenant in connection with Tenant's Environmental Activities
or Tenant's compliance with Environmental Laws, or (iii) the breach by Tenant of
any of its  obligations  and covenants set forth in this paragraph 19.  Landlord
shall  have the right but not the  obligation  to join and  participate  in, and
control, if it so elects, any legal proceedings initiated in connection with the
Environmental  Activities  of  Tenant  or  Tenant's  Agents.  Landlord  may also
negotiate,  defend,  approve  and  appeal  any  action  taken or  issued  by any
applicable  governmental  authority with regard to contamination of the Premises
or Project by a Hazardous  Material.  Any costs or expenses incurred by Landlord
for which Tenant is responsible  under this paragraph 19 or for which Tenant has
indemnified Landlord shall be reimbursed by Tenant on demand, as additional rent
and with interest thereon, as provided by subparagraph 17(d) of this Lease. This
indemnity shall survive the termination of this Lease.

         (g)  Remedial  Work  at  Tenant's  Expense.  If (i)  any  Environmental
Activity undertaken by Tenant or Tenant's Agents results in contamination of the
Premises  or  Project  or any  portion  thereof,  or  the  soil  or  groundwater
thereunder, or (ii) any investigation,  site monitoring,  containment,  cleanup,
removal,  restoration  or other  remedial work of any kind or nature  ("Remedial
Work") is necessary or appropriate  due to or in connection with Tenant's use or
occupancy of the Premises,  then,  subject to Landlord's  prior written approval
and any  conditions  imposed by  Landlord,  Tenant  shall  promptly  perform all
Remedial Work, at Tenant's
                                       27
<PAGE>
sole  expense and  without  abatement  of rent,  as is  necessary  to return the
affected  portion of the Premises and/or Project and the soil and groundwater to
the condition existing prior to the introduction of the contaminating  Hazardous
Material  and to  otherwise  comply  with  all  applicable  Environmental  Laws.
Landlord's approval of such Remedial Work shall not be unreasonably  withheld so
long as such actions will not cause a material adverse effect on the Premises or
the Project  during or after  expiration of the Lease Term.  Landlord shall also
have the right to  approve  any and all  contractors  hired by Tenant to perform
such Remedial Work. All such Remedial Work shall be performed in compliance with
all  applicable  laws,  ordinances  and  regulations  and in such a manner as to
minimize  any  interference  with  the use and  enjoyment  of the  Premises  and
Project.  All costs and expenses of such  Remedial  Work shall be paid by Tenant
including,  without  limitation,  the  charges  of such  contractor(s),  and the
reasonable fees and costs of the attorneys and consultants for Landlord incurred
in connection with monitoring or review of such Remedial Work.

         (h)  Landlord's   Option.   Landlord  may  elect,  at  Landlord's  sole
discretion,  to perform any Remedial Work.  Landlord and Landlord's agents shall
have the right to enter the Premises at all reasonable times to inspect, monitor
and/or perform  Remedial  Work. All expenses  incurred by Landlord in connection
with performing  Remedial Work pursuant to subparagraph (g) above are payable by
Tenant,   upon  Landlord's  demand,   with  interest  thereon,  as  provided  by
subparagraph 17(d).

         (i) Injunctive  Relief.  Tenant's failure to abide by the terms of this
paragraph 19 shall be restrainable by injunction.

         (j) Self-Help.  Landlord shall have the right of "self-help" or similar
remedy in order to minimize any damages, expenses, penalties and related fees or
costs  arising  from or related to a  violation  of any  Environmental  Law with
respect to the Premises or the Project.

         (k) Other  Tenants and Owners.  Other  tenants or owners of property in
the Project may be using,  handling or storing  certain  Hazardous  Materials in
connection with such tenants' or owners' use of their premises or property.  The
failure of another tenant or owner to comply with applicable laws and procedures
could  result  in  a  release  of  Hazardous   Materials  and  contamination  to
improvements within the Project or the soil and groundwater  thereunder.  In the
event of such a release,  the tenant or owner  responsible for the release,  and
not Landlord,  shall be responsible for any claim, damage or expense incurred by
Tenant by reason of such  contamination  and  Tenant  and  Landlord  shall  each
exhaust all of their respective remedies against such other tenant or owner with
respect to any claim the Tenant or Landlord, as applicable, may have against the
other tenants or owners without any right to seek any recovery against the other
party to this Lease.

         (l) Environmental  Inspection.  Tenant shall, if reasonably required by
Landlord  on account of the  activities  or  suspected  activities  of Tenant or
Tenant's Agents, retain a recognized environmental consultant (the "Consultant")
acceptable to Landlord to conduct an  investigation of the Premises and of other
portions  of  the  Project  deemed   appropriate  by  Landlord   ("Environmental
Assessment") (i) for Hazardous Materials  contamination in, about or beneath the
Premises  or the Project as a result of such  activities  and (ii) to assess all
Environmental  Activities  of Tenant and Tenant's  Agents on the Premises or the
Project for compliance with all applicable laws,  ordinances and regulations and
for the use of procedures intended to reasonably reduce the risk of a release of
Hazardous Materials. The Environmental Assessment shall be performed in a manner
reasonably   calculated   to  discover  the  presence  of  Hazardous   Materials
contamination  and shall be of a scope and  intensity  reflective of the general
standards  of  professional  environmental  consultants  who  regularly  provide
environmental  assessment services in connection with the transfer or leasing of
real property.  Additionally,  the Environmental Assessment shall take into full
consideration  the past and present  uses of the  Premises and Project and other
factors   unique  to  the  Premises  and  Project.   If  Landlord   obtains  the
Environmental Assessment because of the activities of Tenant or Tenant's Agents,
as  reasonably  demonstrated  by  Landlord  or  indicated  in the  Environmental
Assessment,  Tenant shall pay  Landlord on demand the cost of the  Environmental
Assessment, with interest thereon, as additional rent and in accordance with
                                       28
<PAGE>
subparagraph  17(d). If Landlord so requires,  Tenant shall comply,  at its sole
cost  and  expense,  with  all  reasonable   recommendations  contained  in  the
Environmental  Assessment with respect to Environmental  Activities by Tenant or
Tenant's Agents,  including any  recommendation  with respect to the precautions
which should be taken with respect to  Environmental  Activities on the Premises
or the  Project or any  recommendations  for  additional  testing and studies to
detect the  presence of Hazardous  Materials.  Tenant  covenants  to  reasonably
cooperate with the  Consultant  and to allow entry and reasonable  access to all
portions of the Premises for the purpose of Consultant's investigation.

         (m) Surrender of Premises - Environmental  Considerations.  Prior to or
after the  expiration  or  termination  of the Lease Term,  Landlord may have an
Environmental   Assessment  of  the  Premises   performed  in  accordance   with
subparagraph (l) above. Tenant shall perform, at its sole cost and expense,  any
Remedial  Work  recommended  by the  Consultant  which is  necessary  to remove,
mitigate or remediate any Hazardous  Materials  contamination of the Premises or
Project in connection  with any  Environmental  Activities of Tenant or Tenant's
Agents;  provided,  however,  if no such  Remedial  Work is  recommended  by the
Consultant  as necessary  for the above  specified  reasons,  Landlord,  and not
Tenant as  provided  in  subparagraph  (l) above,  shall pay for the cost of the
Environmental  Assessment.  Prior to  surrendering  possession  of the Premises,
Tenant shall also,  unless otherwise  directed by Landlord,  remove any personal
property,  equipment,  fixture  (except for any fixture  installed  by Landlord)
and/or storage device or vessel on or about the Premises and/or Project which is
contaminated by or contains Hazardous Materials as a result of the activities of
Tenant or Tenant's  Agents and repair all damage to the Premises and the Project
caused by such removal.

         (n)  Landlord's  Environmental   Indemnity.   Landlord  shall  protect,
indemnify, defend (with counsel satisfactory to Tenant) and hold harmless Tenant
and its  directors,  officers,  partners,  employees  and agents,  for, from and
against any and all losses, damages, claims, costs, expenses,  penalties,  fines
and  liabilities of any kind  (including,  without  limitation,  the cost of any
investigation,   remediation  and  cleanup,   and  attorneys'  fees)  which  are
attributable  to any  Environmental  Activity  on  the  Premises  undertaken  or
committed by Landlord or Landlord's Agents (except for Environmental  Activities
undertaken  by or on behalf of Landlord in the  exercise  of  Landlord's  rights
under this  paragraph 19) or caused by the negligence of such persons during the
Term of this Lease.

         (o)  Remedial  Work at  Landlord's  Expense.  If (i) any  Environmental
Activity undertaken by Landlord or Landlord's Agents results in contamination of
the Premises or any portion thereof, or the soil or groundwater  thereunder,  or
(ii) any Remedial Work is necessary or  appropriate on the Premises due to or in
connection with  Environmental  Activities by Landlord or Landlord's Agents, and
if such  contamination  may have any material adverse effect on Tenant's use and
enjoyment of the Premises or impose any liability on Tenant, then Landlord shall
promptly perform all Remedial Work, at Landlord's sole expense,  as is necessary
to return the affected  portion of the  Premises to a condition  which no longer
has any material  adverse  effect on Tenant's use and  enjoyment  thereof and no
longer exposes  potential  liability on Tenant.  All such Remedial Work shall be
performed in compliance with all applicable laws, ordinances and regulations and
in such a manner as to minimize any  interference  with the use and enjoyment of
the  Premises.  All costs and  expenses of such  Remedial  Work shall be paid by
Landlord.
                                       29
<PAGE>
         IN WITNESS WHEREOF,  the undersigned have executed this Lease as of the
date and year first above written.


LANDLORD

HEWSON/BRECKNER-BASELINE, L.L.C.,
an Arizona limited liability company


By:__________________________________
   HEWSON PROPERTIES, INC.,
   a California Corporation

   Its:  Manager

   By: 
        -----------------------------
   Its:
        -----------------------------



TENANT

ACTION PERFORMANCE COMPANIES, INC.,
an Arizona corporation


By:__________________________________
Name:________________________________
Title:_______________________________
                                       30
<PAGE>
TENANT ACKNOWLEDGMENTS:


STATE OF ARIZONA                    )
                                    ) ss:
COUNTY OF MARICOPA                  )

         The foregoing  instrument was acknowledged  before me this _____ day of
April, 1997, by ___________________________,  the ___________________________ of
ACTION PERFORMANCE  COMPANIES,  INC., an Arizona  corporation,  on behalf of the
corporation.

                                      __________________________________________
                                                   NOTARY PUBLIC

My Commission Expires:

__________________________





LANDLORD ACKNOWLEDGMENTS:
------------------------

STATE OF ARIZONA                    )
                                    ) ss:
COUNTY OF MARICOPA                  )

         The foregoing  instrument was acknowledged  before me this _____ day of
April, 1997, by Gary J. Hewson, the Managing Member of HEWSON/BRECKNER-BASELINE,
L.L.C., an Arizona limited liability company, on behalf of the limited liability
company.

                                      __________________________________________
                                                   NOTARY PUBLIC

My Commission Expires:

__________________________

STATE OF ARIZONA                    )
                                    ) ss:
COUNTY OF MARICOPA                  )

         The foregoing  instrument was acknowledged  before me this _____ day of
April, 1997, by  _______________________,  the  _____________________  of HEWSON
PROPERTIES,     INC.,    a    California     corporation    and    Manager    of
HEWSON/BRECKNER-BASELINE,  L.L.C.,  an Arizona  limited  liability  company,  on
behalf of the limited liability company.

                                      __________________________________________
                                                   NOTARY PUBLIC

My Commission Expires:

__________________________
                                       31
<PAGE>
                                    EXHIBIT F


                     4707 E. BASELINE ROAD, PHOENIX, ARIZONA


                           OPTION TO EXTEND LEASE TERM


First Extended Term
-------------------

         Provided  that at the time of exercise  Tenant is not in default  under
any term or provision of this Lease beyond  expiration  of any  applicable  cure
period,  then Tenant  shall have the option to extend the term of this Lease for
an additional period of five (5) years (the "First Extended Term") upon the same
terms and conditions set forth in this Lease, so far as applicable,  except that
the rental for the First Extended Term shall be ninety-five percent (95%) of the
market rent as hereinafter  determined for the consummation,  at the time of the
exercise of such option, of similar lease transactions for comparable properties
located in the general  geographical  area in which the  Premises  are  located;
provided,  however,  the  monthly  amount of the  Fixed  Rent  during  the First
Extended  Term  shall not be less  than the  monthly  amount  of the Fixed  Rent
payable  during the tenth  year of the  Initial  Term nor more than one  hundred
fourteen percent (114%) of the amount of the Fixed Rent payable during the tenth
year of the Initial Term. In the event the Tenant wishes to exercise this option
to extend the term of the Lease,  Tenant shall give Landlord  written  notice of
such  election  not later  than  three  hundred  sixty-five  (365) days prior to
expiration of the initial Term.

Second Extended Term
--------------------

         Provided  that at the time of exercise  Tenant is not in default  under
any term or provision of this Lease beyond  expiration  of any  applicable  cure
period and Tenant has  previously  exercised  its option for the First  Extended
Term,  then  Tenant  shall have the option to extend the term of this Lease (the
"Second  Extended  Term") for one (1) additional  period of five (5) years after
the First  Extended  Term upon the same terms and  conditions  set forth in this
Lease, so far as applicable,  except that Tenant shall have no additional option
to extend the Term hereof (beyond the Second  Extended Term) and the rental rate
for the Second  Extended Term shall be  ninety-five  percent (95%) of the market
rent  for the  consummation,  at the time of the  exercise  of such  option,  of
similar lease  transactions  for  comparable  properties  located in the general
geographical  area in which the Premises  are  located.  In the event the Tenant
wishes to  exercise  this option to extend the term of the Lease,  Tenant  shall
give  Landlord  written  notice of such  election  not later than three  hundred
sixty-five (365) days prior to expiration of the First Extended Term.

Market Rental
-------------

         Upon  receipt by  Landlord of a notice  that  Tenant is  exercising  an
option to extend the term of the Lease,  Landlord  and Tenant  shall  attempt to
determine the market rent for the First or Second  Extended Term, as applicable,
with the market rent to reflect  both a Fixed Rent as  provided in  subparagraph
5(a) of the Lease and those  adjustments  to Fixed Rent during the Extended Term
which are of a type then  typical  in the  rental  market and to be based on the
market  rental  for new  leases  being  executed  as of one  year  prior  to the
expiration of the Initial Term or of the First Extended Term, as applicable (the
"Valuation  Date").  In  determining  the market rent for an Extended  Term, due
consideration  shall be given, among other things, to the length of the Extended
Term;  the amount of the Fixed  Rent;  whether or not such Fixed Rent  should be
subject to periodic  Consumer  Price Index or other  adjustments;  allowances to
tenants for, and the making by Landlord of,  tenant  improvements;  liability of
tenants   for   reimbursable    expenses;   and   the   respective   maintenance
responsibilities of landlords and tenants; provided,  however, the effect of all
such  considerations   shall  be  reflected  in  the  Fixed  Rent  and  periodic
Adjustments to Fixed Rent; no other  provisions of this Lease shall be modified;
and Landlord shall have no tenant improvement construction obligations.
<PAGE>
         Landlord,  within thirty (30)  business days after the Valuation  Date,
shall present Tenant in writing with the proposed  market  rental.  If Tenant is
dissatisfied with the proposed market rental presented by Landlord,  Tenant may,
by  delivery to Landlord of notice  within ten (10)  business  days  thereafter,
elect to rescind Tenant's  exercise of the option,  in which event all rights of
Tenant under this Exhibit C shall terminate,  and if such exercise of the option
to extend was made pursuant to the provisions of subparagraph  13(e) above, then
Landlord's  notice of termination of the Lease  pursuant to  subparagraph  13(e)
shall be reinstated.  If Tenant does not so rescind Tenant's notice of exercise,
then Tenant shall,  within thirty (30) business days after receipt of Landlord's
proposed market rental, either accept the market rental proposed by the Landlord
or present Landlord in writing with its proposed market rental.  Within five (5)
business  days  thereafter,  Landlord  shall either  accept the market rental or
notify Tenant that the proposed market rental is  unacceptable.  If the proposed
market  rental is  unacceptable  to Landlord,  and/or if Landlord and Tenant are
unable to agree as to the  renewal  fair  market  rental at least six (6) months
prior to the Expiration  Date of the Initial Term or the First Extended Term, as
applicable,  Landlord and Tenant will jointly  appoint an appraiser to determine
whether the market rental  (including  adjustment  provisions) first proposed by
Landlord or the market rental (including  adjustment  provisions) first proposed
by Tenant is the rental which most accurately reflects the fair market rental at
the  Valuation  Date.  If Landlord  and Tenant  fail to agree upon an  appraiser
within five (5) months prior to the applicable  Expiration  Date, such appraiser
will be  appointed by the then  President  of the Local  Chapter of The American
Society  of  Appraisers  and will be  experienced  in the  appraisal  of office,
commercial  and  industrial  properties in the Phoenix  metropolitan  area.  The
decision  of  such  appraiser  will  be in  writing  and in  duplicate;  will be
delivered  to each of the  parties  to the  Lease;  and will  either  select all
aspects of Landlord's  first proposal  (including  adjustment  provisions) or of
Tenant's first proposal (including  adjustment  provisions) as the market rental
provisions most  reflective of the market  conditions at the Valuation Date. The
market rental provisions selected by the appraiser shall then be the rental rate
provisions for the Extended Term,  subject to the limitations and adjustments to
such market rental rate set forth in this Exhibit F for  determining  the actual
rental payable for each of the First Extended Term and the Second Extended Term,
as  applicable.  The fee of the  appraiser  will be paid equally by Landlord and
Tenant.  If no  determination  is made prior to the  commencement of an Extended
Term, Tenant will continue to pay to Landlord the Fixed Rent plus Adjustments as
in effect at the end of the term  immediately  preceding such Extended Term and,
upon such fair market rental being  determined,  Tenant will pay to Landlord the
difference between the rent already paid by Tenant for the Extended Term and the
actual amount of rent attributable to the Extended Term through the date of such
determination.  Upon the  determination  of the fair market rental as aforesaid,
the parties will enter into an amendment to the Lease stating the Fixed Rent and
any Adjustments for the Extended Term.
                                        2