SINGLE-TENANT LEASE-NET

1. Basic Provisions ("Basic Provisions")

     1.1 Parties: This Lease ("Lease"),  dated for reference purposes only, June
12, 1997, is made by and between Chamberlain Development, L.L.C., ("Lessor") and
Orthologic  Corp.  ("Lessee"),  (collectively  the "Parties," or  individually a
"Party").

     1.2  Premises:  That  certain real  property,  including  all  improvements
therein or to be provided by Lessor under the terms of this Lease, and described
on the attached Exhibit "A" located in the County of Maricopa, State of Arizona,
and generally  described as 100,000  square foot  office/manufacturing  facility
("Premises"). (See Paragraph 2 for further provisions.)

     1.3 Term: Ten (10) years and zero (0) months  ("Original  Term") commencing
December 1, 1997 ("Commencement Date") and ending November 30, 2007 ("Expiration
Date"). (See Paragraph 3 for further provisions.)

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

     1.5  Base  Rent:  $78,145.00  per  month  ("Base  Rent"),  plus  applicable
transaction  privilege taxes,  payable on the first day of each month commencing
December  1, 1997 (See  Paragraph 4 for  further  provisions.)  : If this box is
checked, there are provisions in this Lease for the Base Rent to be adjusted.

     1.6 Base Rent Paid Upon  Execution:  $78,145.00 as Base Rent for the Period
December 1, 1997 to December 31, 1997.

     1.7 Security Deposit: $50,000.00 ("Security Deposit"). (See Paragraph 5 for
further provisions.)

     1.8 Permitted Use: General office and light  manufacturing (See Paragraph 6
for further provisions.)

     1.9 Insuring Party:  Lessee is the "Insuring Party" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)

     1.10 Real Estate Brokers: The following real estate brokers  (collectively,
the "Brokers") and brokerage  relationships  exist in this  transaction  and are
consented to by the Parties (check  applicable  boxes):

          N/A
--------------------------------------------------------------------------------
represents [_] Lessor exclusively ("Lessor's Broker")[_] both Lessor and Lessee,
and

          Kit Tiedemann, CB Commercial
--------------------------------------------------------------------------------
represents [X] Lessee exclusively ("Lessee's Broker")[_] both Lessee and Lessor.
(See Paragraph 15 for further provisions.)

     1.11 Guarantor. Deleted.

     1.12  Addenda.  Attached  hereto is an  Addendum or Addenda  consisting  of
Paragraphs 49 through 63 and Exhibits "A" and "B" all of which constitute a part
of this Lease.

2. Premises.

     2.1 Letting.  Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor,  the Premises,  for the term, at the rental,  and upon all of the terms,
covenants and  conditions  set forth in this Lease.  Unless  otherwise  provided
herein,  any  statement of square  footage set forth in this Lease,  or that may
have been used in  calculating  rental,  is an  approximation  which  Lessor and
Lessee  agree is  reasonable  and the rental  based  thereon  is not  subject to
revision  whether or not the actual square  footage is more or less. The parties
acknowledge  that the  improvements  to be  included in the  Premises  are to be
conveyed by Lessor to the City of Tempe pursuant to the City Agreement described
in  Paragraph  62 below and  leased  back by Lessor  pursuant  to the City Lease
described  therein,  such that for so long as the City Lease is in  effect,  the
Premises include Lessor's  leasehold  interest in such improvements  rather than
fee title  thereto.  Upon request,  Lessee will confirm in writing the 
                                       1
<PAGE>
foregoing  for the benefit of Lessor,  the City or any other party as reasonably
requested  by  Lessor.  After the City  Lease has  expired  or  terminated,  the
Premises will include Lessor's fee interest in the improvements  (subject to the
Sublease described in Paragraph 62 below).

     2.2  Condition.  Lessor shall deliver the Premises to Lessee clean and free
of debris on the  Commencement  Date and  warrants to Lessee  that the  Premises
(including  without  limitation)  existing  plumbing,   fire  sprinkler  system,
lighting, air conditioning, heating, and loading doors, if any, in the Premises,
other than improvements or alterations  constructed by Lessee,  shall be in good
operating  condition on the  Commencement  Date. If a  non-compliance  with said
warranty exists as of the Commencement  Date, Lessor shall,  except as otherwise
provided in this Lease,  promptly  after  receipt of written  notice from Lessee
setting  forth with  specificity  the nature and extent of such  non-compliance,
rectify same at Lessor's expense.  If Lessee does not give Lessor written notice
of  a  non-compliance   with  this  warranty  within  one  (1)  year  after  the
Commencement Date, (except for customary Apunch list@ items for which the period
shall be thirty  (30)  days),  correction  of that  non-compliance  shall be the
obligation of the Lessee at Lessee's sole cost and expense.

     2.3 Compliance  with  Covenants,  Restrictions  and Building  Code.  Lessor
warrants to Lessee that the Premises  comply with all  Applicable Law (including
without  limitation  all  covenants  or  restrictions  of record and  applicable
building codes,  regulations and ordinances) in effect on the Commencement Date.
Said warranty does not apply to the use to which Lessee will put the Premises or
to any  Alterations or Utility  Installations  (as defined in Paragraph 7.3 (a))
made or to be made by Lessee.  If the Premises do not comply with said warranty,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written  notice from Lessee  setting  forth with  specificity  the nature and
extent of such  non-compliance,  rectify the same at Lessor's expense. If Lessee
does not give  Lessor  written  notice of a  non-compliance  with this  warranty
within  one  (1)  year  following  the  Commencement  Date,  correction  of that
non-compliance  shall be the  obligation  of  Lessee at  Lessee's  sole cost and
expense.

     2.4  Acceptance of Premises.  Lessee hereby  acknowledges:  (a) that it has
been advised by the Brokers to satisfy  itself with respect to the  condition of
the Premises  (including  but not limited to the  electrical  and fire sprinkler
systems,  security,  environmental  aspects,  compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigations it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to Lessee's occupancy of the Premises and/or the term of this
Lease,  and (c) that neither Lessor,  nor any of Lessor's  agents,  has made any
oral or written  representations  or warranties with respect to the said matters
other than as set forth in this Lease.

     2.5 Lessee  Prior  Owner/Occupant.  The  warranties  made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately  prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event,   Lessee  shall,   at  Lessee's  sole  cost  and  expense,   correct  any
non-compliance of the Premises with said warranties. 

3. Term

     3.1 Term. The Commencement Date,  Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3

     3.2 Early possession.  If Lessee totally or partially occupies the Premises
prior  to the  Commencement  Date,  the  obligation  to pay Base  Rent  shall be
prorated for the period of such early possession. All other terms of this Lease,
(including  but not limited to the  obligations  to pay Real Property  Taxes and
insurance  premiums and to maintain the Premises) shall be in effect during such
period.  Any such early  possession  shall not affect nor advance the Expiration
Date of the Original Term.

     3.3 Delay In Possession. If for any reason Lessor cannot deliver possession
of the Premises to Lessee as agreed herein by the Early  Possession Date, if one
is specified in Paragraph 1.4, or, if no Early Possession Date 
                                       2
<PAGE>
is  specified,  by the  Commencement  Date,  Lessor  shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the  obligations  of Lessee  hereunder,  or extend the term hereof,  but in such
case, Lessee shall not, except as otherwise provided herein, be obligated to pay
rent or perform  any other  obligation  of Lessee  under the terms of this Lease
until Lessor delivers possession of the Premises to Lessee. If possession of the
Premises  is  not   delivered  to  Lessee  within  sixty  (60)  days  after  the
Commencement  Date,  Lessee may,  at its option,  by notice in writing to Lessor
within ten (10) days  thereafter,  cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder;  provided,  however, that if
such written notice by Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease shall terminate and be of no further
force or effect. Except as may be otherwise provided, and regardless of when the
term actually  commences,  if possession is not tendered to Lessee when required
by this Lease and Lessee does not terminate this Lease, as aforesaid, the period
free of the  obligation to pay Base Rent,  if any,  that Lessee would  otherwise
have enjoyed shall run from the date of delivery of possession  and continue for
a period  equal to what Lessee  would  otherwise  have  enjoyed  under the terms
hereof,  but minus any days of delay caused by the acts, changes or omissions of
Lessee.

4. Rent.

     4.1 Base Rent.  Lessee  shall cause  payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction,  on or before
the day on which it is due  under  the  terms of this  Lease.  Base Rent and all
other rent and charges for any period  during the term hereof  which is for less
than one (1) full calendar  month shall be prorated based upon the actual number
of days of the calendar month  involved.  Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other  addresses as Lessor may from time to time designate in writing to
Lessee.

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit set forth in Paragraph  1.7 as security for Lessee's  faithful
performance  of Lessee's  obligations  under this Lease.  If Lessee fails to pay
Base Rent or other rent or charges due  hereunder,  or otherwise  Defaults under
this Lease (as defined in Paragraph  13.1),  Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability,  cost, expense,  loss or
damage  (including  attorneys'  fees) which Lessor may suffer or incur by reason
thereof.  If Lessor uses or applies all or any portion of said security Deposit,
Lessee shall within ten (10) days after written request  therefor deposit moneys
with  Lessor  sufficient  to restore  said  Security  Deposit to the full amount
required by this Lease. Any time the Base Rent increases during the term of this
lease, Lessee shall, upon written request from Lessor, deposit additional moneys
with Lessor  sufficient to maintain the same ratio between the Security  Deposit
and the Base Rent as those amounts are specified in the Basic Provisions. Lessor
shall not be required to keep all or any part of the Security  Deposit  separate
from  its  general  accounts.   Lessor  shall,  at  the  expiration  or  earlier
termination of the term hereof and after Lessee has vacated the Premises, return
to Lessee (or,  at Lessor's  option,  to the last  assignee,  if any of Lessee's
interest  herein),  that portion of the Security  Deposit not used or applied by
Lessor;  provided,  however,  that the Security  Deposit shall apply to rent due
after the  Commencement  Date, shall be applied to the first  installment(s)  of
rent due on or  following  the  Commencement  Date  prior  to any  out-of-pocket
payment of rent by Lessee and the parties  will execute a  confirmation  of such
application, and Lessee will have no further right or claim for refund or return
of the Security Deposit so applied. Unless otherwise expressly agreed in writing
by Lessor,  no part of the Security  Deposit  shall be  considered to be held in
trust,  to bear interest or other increment for its use, or to be prepayment for
any moneys to be paid by Lessee under this Lease.

6. Use

     6.1 Use. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other  purpose.  Lessee  shall not use or permit  the use of the  Premises  in a
manner  that  creates  waste  or a  nuisance,  or that  disturbs  owners  and/or
occupants of, or causes 
                                        3
<PAGE>
damage to, neighboring premises or properties.

     6.2 Hazardous Substances.

          (a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease  shall mean any  product,  substance,  chemical,  material or
waste whose  presence,  nature,  quantity  and/or  intensity of existence,  use,
manufacture,  disposal,  transportation,  spill,  release or  effect,  either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially  injurious to the public health,  safety or welfare, the
environment  or the Premises,  (ii)  regulated or monitored by any  governmental
authority,  or (iii) a basis for liability of Lessor to any governmental  agency
or third party  under any  applicable  statute or common law  theory.  Hazardous
Substance  shall  include,  but  not be  limited  to,  hydrocarbons,  petroleum,
gasoline,  crude oil or any products,  by-products or fractions thereof.  Lessee
shall not engage in any activity in, on or about the Premises which  constitutes
a Reportable Use (as hereinafter  defined) of Hazardous  Substances  without the
express  prior written  consent of Lessor and  compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3).  "Reportable  Use" shall mean (i) the  installation or use of any above or
below ground  storage  tank,  (ii) the  generation,  possession,  storage,  use,
transportation,  or  disposal of a Hazardous  Substance  that  requires a permit
from, or with respect to which a report,  notice,  registration or business plan
is required to be filed with, any governmental  authority.  Reportable Use shall
also include  Lessee's  being  responsible  for the presence in, on or about the
Premises of a  Hazardous  Substance  with  respect to which any  Applicable  Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring  properties.  Notwithstanding  the  foregoing,  Lessee may,  without
Lessor's  prior  consent,  but in compliance  with all  Applicable  Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's  business  permitted on the Premises,  so long as such
use is not a  Reportable  Use and does not expose the  Premises  or  neighboring
properties to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor.  In addition,  Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous  substance,
activity or storage tank by Lessee upon Lessee's  giving Lessor such  additional
assurances as Lessor, in its reasonable  discretion,  deems necessary to protect
itself,   the  public,   the  Premises  and  the  environment   against  damage,
contamination or injury and/or liability therefrom to therefor,  including,  but
not limited to, the  installation  (and removal on or before Lease expiration or
earlier  termination) of reasonably  necessary  protective  modifications to the
Premises  (such as concrete  encasements)  and/or the  deposit of an  additional
Security Deposit under Paragraph 5 hereof.

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

          (c) Indemnification.  Lessee shall indemnify, protect, defend and hold
Lessor,  its agents,  employees,  lenders  and ground  lessor,  if any,  and the
Premises,  harmless  from and against any and all loss of rents and/or  damages,
liabilities,  judgments, costs, claims, liens, expenses,  penalties, permits and
reasonable  attorneys'  and  consultants'  fees arising out of or involving  any
Hazardous  Substance  or storage tank brought onto the Premises by or for Lessee
or under  Lessee's  control  except  as the same is  caused  by  Lessor's  gross
negligence or willful  misconduct.  Lessee's  obligations under this Paragraph 6
shall include, but not be limited to, the effects of any contamination or injury
to person,  property or the environment  created or suffered by Lessee,  and the
cost of 
                                       4
<PAGE>
investigation (including consultants' and attorneys' fees and testing), removal,
remediation,  restoration  and/or  abatement  thereof,  or of any  contamination
therein  involved,  and shall survive the  expiration or earlier  termination of
this Lease. No termination,  cancellation or release  agreement  entered into by
Lessor and Lessee shall  release  Lessee from its  obligations  under this Lease
with respect to Hazardous  Substances or storage tanks,  unless  specifically so
agreed by Lessor in writing at the time of such agreement.

     6.3 Lessee's  Compliance  with Law.  Except as  otherwise  provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense,  fully,  diligently and
in a timely manner, comply with all "Applicable Law," which term is used in this
Lease  to  include  all  laws,  rules,  regulations,   ordinances,   directives,
covenants,  easements and restrictions of record,  permits,  the requirements of
any   applicable   fire  insurance   underwriter  or  rating  bureau,   and  the
recommendations  of  Lessor's  engineers  and/or  consultants',  relating in any
manner to the Premises  (including but not limited to matters  pertaining to (i)
industrial  hygiene,  (ii)  environmental  conditions on, in, under or about the
Premises,  including  soil  and  groundwater  conditions,  and  (iii)  the  use,
generation,  manufacture,   production,   installation,   maintenance,  removal,
transportation,  storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee shall,
within five (5) days after receipt of Lessor's written  request,  provide Lessor
with copies of all documents  and  information,  including,  but not limited to,
permits,  registrations,  manifests,  applications,  reports  and  certificates,
evidencing  Lessee's compliance with any Applicable Law specified by Lessor, and
shall  immediately  upon  receipt,  notify Lessor in writing (with copies of any
documents  involved)  of any  threatened  or  actual  claim,  notice,  citation,
warning, complaint or report pertaining to or involving failure by Lessee or the
Premises to comply  with any  Applicable  Law.  Notwithstanding  the  foregoing,
Lessor shall,  at its sole cost and expense,  fully,  diligently and in a timely
manner, comply with all Applicable Law as it relates to the specific obligations
of Lessor found in Paragraph 7.2 below only.

     6.4 Inspection;  Compliance.  Lessor and Lessor's  Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an  emergency,  and otherwise at  reasonable  times,  for the purpose of
inspecting the condition of the Premises and for verifying  compliance by Lessee
with this Lease and all  Applicable  Laws (as defined in Paragraph  6.3), and to
employ  experts and/or  consultants'  in connection  therewith  and/or to advise
Lessor with  respect to Lessee's  activities,  including  but not limited to the
installation,  operation,  use,  monitoring,  maintenance,  or  removal  of  any
Hazardous  Substance  or  storage  tank on or from the  Premises.  The costs and
expenses of any such  inspections  shall be paid by the party  requesting  same,
unless a Default or Breach of this  Lease,  violation  of  Applicable  Law, or a
contamination,  caused or materially  contributed to by Lessee is found to exist
or  be  imminent,  or  unless  the  inspection  is  requested  or  ordered  by a
governmental  authority as the result of any such existing or imminent violation
or  contamination.  In any such case, Lessee shall upon request reimburse Lessor
or  Lessor's  Lender,  as the case may be,  for the costs and  expenses  of such
inspections.

7. Maintenance; Repairs; Utility Installations;  Trade Fixtures and Alterations.
(See Paragraph 57 for additional requirements)

     7.1 Lessee's Obligations.

          (a) Subject to the Provisions of Paragraphs 2.2 (Lessor's  warranty as
to condition),  2.3 (Lessor's  warranty as to compliance with covenants,  etc.),
6.3 (Compliance with Law), 7.2 (Lessor's  obligations to repair),  9 (damage and
destruction),  and 14  (condemnation),  Lessee shall,  at Lessee's sole cost and
expense  and at all times,  keep the  Premises  and every  part  thereof in good
order, condition and repair,  structural and non-structural (whether or not such
portion of the Premises  requiring  repair,  or the means of repairing the same,
are reasonably or readily  accessible to Lessee, and whether or not the need for
such repairs  occurs as a result of Lessee's use, any prior use, the elements or
the age of such  portion  of the  Premises),  including,  without  limiting  the
generality 
                                       5
<PAGE>
of the  foregoing,  all  equipment or facilities  serving the Premises,  such as
plumbing,   heating,  air  conditioning,   ventilating,   electrical,   lighting
facilities,  boilers,  fired or unfired pressure vessels,  fire sprinkler and/or
standpipe and hose or other automatic fire extinguishing system,  including fire
alarm and/or smoke  detection  systems and equipment,  fire hydrants,  fixtures,
walls (interior and exterior),  foundations,  ceilings,  roofs, floors, windows,
doors, plate glass,  skylights,  landscaping,  driveways,  parking lots, fences,
retaining  walls,  signs,  sidewalks  and  parkways  located in, on,  about,  or
adjacent  to the  Premises.  Lessee  shall  not cause or  permit  any  Hazardous
Substance  to be  spilled  or  released  in, on,  under,  or about the  Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's  expense,  take all  investigatory  and/or remedial  action  reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination  of, and for the maintenance,  security and/or  monitoring of, the
Premises,  the elements  surrounding same, or neighboring  properties,  that was
caused or materially contributed to by Lessee, or pertaining to or involving any
Hazardous  Substance  and/or  storage  tank  brought onto the Premises by or for
Lessee or under its  control.  Lessee,  in keeping  the  Premises in good order,
condition and repair,  shall  exercise and perform good  maintenance  practices.
Lessee's obligations shall include  restorations,  replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in
good order,  condition and state of repair.  If Lessee occupies the Premises for
seven (7) years or more,  Lessor may require  Lessee to repaint the  exterior of
the buildings on the Premises as reasonably  required,  but not more  frequently
than once every seven (7) years.

          (b) Lessee  shall,  at  Lessee's  sole cost and  expense,  procure and
maintain contracts,  with copies to Lessor, in customary form and substance for,
and  with   contractors   specializing   and  experienced  in,  the  inspection,
maintenance  and service of the following  equipment and  improvements,  if any,
located  on  the  Premises:   (i)  heating,  air  conditioning  and  ventilation
equipment,  (ii) boiler, fired or unfired pressure vessels, (iii) fire sprinkler
and/or  standpipe  and  hose or  other  automatic  fire  extinguishing  systems,
including fire alarm and/or smoke  detection,  (iv)  landscaping  and irrigation
systems,  (v) roof covering and drain  maintenance  and (vi) asphalt and parking
lot maintenance.

     7.2 Lessor's  Obligations.  Except for the  warranties  and  agreements  of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises),  2.3
(relating to compliance  with  covenants,  restrictions  and building  code),  9
(relating to  destruction of the Premises) and 14 (relating to  condemnation  of
the  Premises),  it is  intended  by the  Parties  hereto  that  Lessor  have no
obligation,  in any manner whatsoever,  to repair and maintain the Premises, the
improvements located thereon, or the equipment therein, all of which obligations
are intended to be that of the Lessee under  Paragraph  7.1 hereof,  except that
Lessor shall,  at its cost,  maintain and repair the structural  elements of the
foundations,  structural  walls  (excluding any interior or exterior  decorative
surfaces  and  utility  equipment  therein  or  thereon),   structural   pillars
(excluding any interior or exterior  decorative  services and utility  equipment
therein or thereon) and the structural elements of the roof (expressly excluding
the roof surface or coating and roof  membrane),  and  expressly  excluding  any
damage done or caused by Lessee or its agents, employees, contractors, licensees
or invitees, whether or not the same involves negligence or misconduct. Lessor's
obligations   under  the  preceding   sentence  shall  be  to  perform  required
maintenance,  repair and/or replacements within a reasonable period after Lessor
has actual notice of the need therefor.  It is the intention of the Parties that
the terms of this Lease govern the  respective  obligations of the Parties as to
maintenance  and repair of the Premises.  Lessee and Lessor  expressly waive the
benefit  of  any  statute  now or  hereafter  in  effect  to  the  extent  it is
inconsistent  with the terms of this Lease with the respect to, or which affords
Lessee the right to make repairs at the expense of Lessor or to  terminate  this
Lease by reason of, any needed repairs.

     7.3 Utility Installations; Trade Fixtures; Alterations.

          (a) Definitions; Consent Required. The term "Utility Installations" is
used in this Lease to refer to all carpeting, window coverings, air lines, power
panels,   electrical   distribution,    security,   fire   protection   systems,
communication  systems,  lighting  fixtures,  heating,   ventilating,   and  air
conditioning equipment,  plumbing, and 
                                       6
<PAGE>
fencing  in, on or about the  Premises.  The term  "Trade  Fixtures"  shall mean
Lessee's  machinery and  equipment  that can be removed  without doing  material
damage to the Premises.  The term  "Alterations"  shall mean any modification of
the  improvements  on the Premises  from that which are provided by Lessor under
the terms of this Lease,  other than Utility  Installations  or Trade  Fixtures,
whether by  addition or  deletion.  "Lessee  Owned  Alterations  and/or  Utility
Installations" are defined as Alterations  and/or Utility  Installations made by
Lessee that are not yet owned by Lessor as defined in Paragraph  7.4(a).  Lessee
shall not make any Alterations or Utility  Installations  in, on, under or about
the Premises without Lessor's prior written consent.  Lessee may, however,  make
non-structural  Utility Installations to the interior of the Premises (excluding
the roof),  as long as they are not  visible  from the  outside,  do not involve
puncturing,  relocating  or removing  the roof or any  existing  walls,  and the
cumulative  cost  thereof  during  the term of this Lease as  extended  does not
exceed $25,000.

          (b) Consent.  Any  Alterations  or Utility  Installations  that Lessee
shall  desire to make and which  require  the  consent  of the  Lessor  shall be
presented to Lessor in written form with proposed  detailed plans.  All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon; (i) Lessee's acquiring all applicable
permits required by governmental  authorities,  (ii) the furnishing of copies of
such  permits  together  with a copy of the  plans  and  specifications  for the
Alteration or Utility  Installation  to Lessor prior to commencement of the work
thereon,  and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility  Installations by
Lessee  during  the term of this Lease  shall be done in a good and  workmanlike
manner,  with  good  and  sufficient  materials,  and  in  compliance  with  all
Applicable  Law.  Lessee shall promptly upon  completion  thereof furnish Lessor
with  as-built  plans  and  specifications  therefor.  Lessor  may (but  without
obligation  to do so)  condition  its  consent to any  requested  Alteration  or
Utility  Installation that costs $10,000 or more upon Lessee's  providing Lessor
with a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility  Installation  and/or upon Lessee's
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.

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

     7.4 Ownership; Removal; Surrender; and Restoration.

          (a)  Ownership.  Subject to Lessor's right to require their removal or
become the owner  thereof as  hereinafter  provided in this  Paragraph  7.4, all
Alterations  and Utility  Additions  made to the Premises by Lessee shall be the
property of and owned by Lessee,  but considered a part of the Premises.  Lessor
may, at any time and at its  option,  elect in writing to Lessee to be the owner
of all or any  specified  part  of the  Lessee  Owned  Alterations  and  Utility
Installations.  Unless otherwise  instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility  Installations  shall, at the expiration or
earlier termination of this Lease, become 
                                       7
<PAGE>
the  property  of Lessor and remain upon and be  surrendered  by Lessee with the
Premises.

          (b) Removal.  Unless otherwise  agreed in writing,  Lessor may require
that any or all Lessee Owned Alterations or Utility  Installations be removed by
the  expiration  or earlier  termination  of this Lease,  notwithstanding  their
installation  may have been  consented  to by  Lessor.  Lessor may  require  the
removal  at any  time of all or any  part of any  Lessee  Owned  Alterations  or
Utility Installations made without the required consent of Lessor.

          (c) Surrender/Restoration.  Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier  termination date, with all
of the improvements,  parts and surfaces thereof clean and free of debris and in
good  operating  order,  condition  and state of repair,  ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
that  would  have  been  prevented  by good  maintenance  practice  or by Lessee
performing all of its obligations  under this Lease.  Except as otherwise agreed
or specified in writing by Lessor, the Premises,  as surrendered,  shall include
the Utility Installations.  The obligation of Lessee shall include the repair of
any damage  occasioned by the  installation,  maintenance or removal of Lessee's
Trade  Fixtures,   furnishings,   equipment,   and  Alterations  and/or  Utility
Installations,  as well as the removal of any storage  tank  installed by or for
Lessee, and the removal,  replacement,  or remediation of any soil,  material or
ground water  contaminated by Lessee,  all as may then be required by Applicable
Law and/or good  practice.  Lessee's Trade Fixtures shall remain the property of
Lessee and shall be removed by Lessee  subject to its  obligation  to repair and
restore the Premises per this Lease.

8. Insurance and Indemnity. (See Paragraph 61 for additional requirements)

     8.1 Payment For  Insurance.  Regardless  of whether the Lessor or Lessee is
the Insuring  Party,  Lessee  shall pay for all  insurance  required  under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $5,000,000  per  occurrence.  Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to  correspond  to the  Lease  term.  Payment  shall be made by Lessee to Lessor
within ten (10) days following receipt of an invoice for any amount due.

     8.2 Liability Insurance.

          (a) Carried by Lessee.  Lessee  shall  obtain and keep in force during
the term of this  Lease a  Commercial  General  Liability  policy  of  insurance
protecting  Lessee and  Lessor (as an  additional  insured)  against  claims for
bodily  injury,  personal  injury and property  damage based upon,  involving or
arising out of the ownership,  use, occupancy or maintenance of the Premises and
all areas  appurtenant  thereto.  Such insurance shall be on an occurrence basis
providing  single  limit  coverage  in an amount  not less than  $5,000,000  per
occurrence  with  an  "Additional   Insured-Managers  or  Lessors  of  Premises"
Endorsement  and contain the  "Amendment of the Pollution  Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured  exclusions as between insured persons or  organizations,  but
shall  include  coverage for  liability  assumed under this Lease as an "insured
contract"  for the  performance  of Lessee's  indemnity  obligations  under this
Lease.  The  limits of said  insurance  required  by this Lease or as carried by
Lessee shall not,  however,  limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not  contributory  with any similar  insurance  carried by Lessor,  whose
insurance shall be considered excess insurance only.

          (b)  Carried By Lessor.  In the event  Lessor is the  Insuring  Party,
Lessor shall also maintain  liability  insurance  described in Paragraph 8.2(a),
above, in addition to, and not lieu of, the insurance  required to be maintained
by Lessee. Lessee shall not be named as an additional insured therein.

     8.3 Property Insurance-Building, Improvements and Rental Value.

          (a) Building  and  Improvements.  The Insuring  Party shall obtain and
keep in force  during the term of this Lease a policy or policies in the name of
Lessor,  with loss payable to Lessor and to the holders of any mortgages,  deeds
of trust or ground leases on the Premises ("Lender(s)"), insuring loss or damage
to the  
                                       8
<PAGE>
Premises.  The amount of such insurance  shall be equal to the full  replacement
cost of the  Premises,  as the same shall exist from time to time, or the amount
required by Lenders,  but in no event more than the commercially  reasonable and
available  insurable  value thereof if, by reason of the unique nature of age of
the  improvements  involved,  such latter  amount is less than full  replacement
cost. If Lessor is the Insuring  Party,  however,  Lessee Owned  Alterations and
Utility Installations shall be insured by Lessee under Paragraph 8.4 rather than
by Lessor.  If the  coverage is available  and  commercially  appropriate,  such
policy or policies  shall insure  against all risks of direct  physical  loss or
damage  (except  the perils of flood  and/or  earthquake  unless  required  by a
Lender),  including  coverage for any  additional  costs  resulting  from debris
removal and reasonable  amounts of coverage for  enforcement of any ordinance or
law regulating the  reconstruction  or replacement of any undamaged  sections of
the Premises  required to be demolished or removed by reason of the  enforcement
of any  building,  zoning,  safety  or land use laws as the  result of a covered
cause of loss.  Said policy or policies  shall also contain an agreed  valuation
provision  in  lieu  of any  coinsurance  clause,  waiver  of  subrogation,  and
inflation guard protection  causing an increase in the annual property insurance
coverage  amount by a factor of not less than the adjusted  U.S.  Department  of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located.  If such insurance  coverage has a deductible  clause,
the deductible  amount shall not exceed $1,000 per occurrence,  and Lessee shall
be liable for such deductible amount in the event of an Insured Loss, as defined
in Paragraph 9.1(c).

          (b) Rental Value.  The Insuring Party shall,  in addition,  obtain and
keep in force  during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and Lender(s), insuring the loss of the full
rental and other  charges  payable by Lessee to Lessor  under this Lease for (1)
year (including all real estate taxes, insurance costs, and any scheduled rental
increases).  Said  insurance  shall  provide  that in the  event  the  Lease  is
terminated by reason of an repairs or  replacement  of the Premises,  to provide
for one full year's loss of rental revenues from the date of any such loss. Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause,  and the amount of coverage  shall be  adjusted  annually to reflect the
projected  rental  income,  property  taxes,  insurance  premium costs and other
expenses,  if any,  otherwise payable by Lessee,  for the next twelve (12) month
period.  Lessee shall be liable for any  deductible  amount in the event of such
loss.

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

          (d) Tenant's  Improvements.  If the Lessor is the Insuring Party,  the
Lessor  shall not be required to insure  Lessee  Owned  Alterations  and Utility
Installations  unless the item in  question  has become the  property  of Lessor
under the terms of this  Lease.  If Lessee is the  Insuring  Party,  the  policy
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.

     8.4 Lessee's Property  Insurance.  Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's  option,
by endorsement to a policy already carried,  maintain  insurance coverage on all
of  Lessee's   personal   property,   Lessee  Owned   Alterations   and  Utility
Installations  in, on, or about the Premises similar in coverage to that carried
by the  Insuring  Party  under  Paragraph  8.3.  Such  insurance  shall  be full
replacement  cost  coverage  with  a  deductible  of not to  exceed  $1,000  per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal  property or the restoration of Lessee Owned Alterations
and Utility  Installations.  Lessee shall be the Insuring  Party with respect to
the insurance required by the insurance required by this Paragraph 8.4 and shall
provide Lessor with written evidence that such insurance is in force.

     8.5 Insurance Policies.  Insurance required hereunder shall be in companies
duly licensed to transact  business 
                                       9
<PAGE>
in the state where the Premises are located,  and maintaining  during the policy
term a "General Policyholders Rating" of at least B+, V, or such other rating as
may be required by a Lender having a lien on the  Premises,  as set forth in the
most current issue of "Best's Insurance Guide." Lessee shall not do or permit to
be done anything which shall  invalidate the insurance  policies  referred to in
this  Paragraph  8. If Lessee is the  Insuring  Party,  Lessee shall cause to be
delivered  to  Lessor   certified  copies  of  policies  of  such  insurance  or
certificates  evidencing  the existence and amounts of such  insurance  with the
insureds  and loss  payable  clauses as required  by this Lease.  No such policy
shall be  cancelable  or subject to  modification  except after thirty (30) days
prior written notice to Lessor.  Lessee shall at least thirty (30) days prior to
the  expiration of such  policies,  furnish  Lessor with evidence of renewals or
"insurance  binders"  evidencing  renewal  thereof,  or Lessor  may  order  such
insurance  and charge the cost thereof to Lessee,  which amount shall be payable
by Lessee to Lessor upon demand. If the Insuring Party shall fail to procure and
maintain the insurance  required to be carried by the Insuring  Party under this
Paragraph  8, the other  Party may,  but shall not be required  to,  procure and
maintain the same, but at Lessee's expense.

     8.6 Waiver of Subrogation.  Without affecting any other rights or remedies,
Lessee and Lessor  ("Waiving  Party") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils  required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be  limited  by the  amount of  insurance  carried  or  required,  or by any
deductibles applicable thereto.

     8.7 Indemnity.  Except for Lessor's  negligence,  willful misconduct and/or
breach of express warranties,  Lessee shall indemnify,  protect, defend and hold
harmless the Premises,  Lessor and its agents, Lessor's master or ground lessor,
partners and Lenders,  from and against any and all claims, loss of rents and/or
damages,   costs,  liens,   judgments,   penalties,   permits,   attorneys'  and
consultants' fees, expenses and/or liabilities arising out of, involving , or in
dealing with,  the  occupancy of the Premises by Lessee,  the conduct of Lessees
business,  any act,  omission  or neglect of Lessee,  its  agents,  contractors,
employees  or  invitees,  and out of any  Default  of  Breach  by  Lessee in the
performance  in a  timely  manner  of any  obligation  of  Lessee's  part  to be
performed under this Lease. The foregoing shall include,  but not be limited to,
the  defense  or  pursuit  of any  claim or any  action or  proceeding  involved
therein,  and  whether  or not  (in the  case of  claims  made  against  Lessor)
litigated  and/or reduced to judgment,  and whether well founded or not. In case
any  action or  proceeding  be  brought  against  Lessor by reason of any of the
foregoing  matters,  Lessee upon notice  from  Lessor  shall  defend the same at
Lessee's expense by counsel  reasonably  satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense.  Lessor need not have first paid any such
claim in order to be so indemnified.

     8.8 Exemption of Lessor from Liability.  Except as caused by Lessor's gross
negligence, willful misconduct and/or breach of express warranties (which is not
corrected  within a reasonable  time) and subject to Paragraph 8.6, Lessor shall
not be liable for injury or damage to the person or goods, wares, merchandise or
other property of Lessee, Lessee's employees, contractors,  invitees, customers,
or any other person in or about the  Premises,  whether such damage or injury is
caused by or results from fire, steam, electricity,  gas, water or rain, or from
the breakage,  leakage,  obstruction or other defects of pipes, fire sprinklers,
wires, appliances,  plumbing, air conditioning or lighting fixtures, or from any
other cause,  whether the said injury or damage results for  conditions  arising
upon the  Premises or upon other  portions of the building of which the Premises
are a part, or from other sources or places and  regardless of whether the cause
of such damage or injury or the means of  repairing  the same is  accessible  or
not.  Lessor shall not be liable for any damages arising from any act or neglect
of any other tenant of Lessor.  Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business  or  for  any  loss  of  income  or  profit  therefrom.  

9. Damage or Destruction.
                                       10
<PAGE>
     9.1 Definitions.

          (a) "Premises  Partial Damage" shall mean damage or destruction to the
improvements  on the Premises,  other than Lessee Owned  Alterations and Utility
Installations,  the repair cost of which damage or  destruction is less than 50%
of the then Replacement Cost of the Premises immediately prior to such damage or
destruction,  excluding from such  calculation  the value of the land and Lessee
Owned Alterations and Utility Installations.

          (b) "Premises Total  Destruction"  shall mean damage or destruction to
the Premises,  other than Lessee Owned Alterations and Utility Installations the
repair  cost  of  which  damage  or  destruction  is 50%  or  more  of the  then
Replacement  Cost  of  the  Premises   immediately   prior  to  such  damage  or
destruction,  excluding from such  calculation  the value of the land and Lessee
Owned Alterations and Utility Installations.

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

          (d)  "Replacement  Cost"  shall mean the cost to repair or rebuild the
improvements  owned by Lessor at the time of the  occurrence to their  condition
existing  immediately prior thereto,  including  demolition,  debris removal and
upgrading required by the operation of applicable building codes,  ordinances or
laws, and without deduction for depreciation.

          (e)  "Hazardous  Substance  Condition"  shall mean the  occurrence  or
discovery of a condition  involving  the presence of, or a  contamination  by, a
Hazardous  Substance  as  defined  in  Paragraph  6.2(a),  in,  on, or under the
Premises.

     9.2 Partial  Damage-Insured  Loss. If a Premises  Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense,  repair such damage
(but not  Lessee's  Trade  Fixtures  or Lessee  Owned  Alterations  and  Utility
Installations)  as soon as reasonably  possible and this Lease shall continue in
full force and  effect;  provided,  however,  that  Lessee  shall,  at  Lessor's
election,  make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds   available  to  Lessee  on  a  reasonable   basis  for  that  purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance  proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly  contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event,  however,  the shortage in proceeds  was due to the fact that,  by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not  commercially  reasonable and  available,  Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises  unless Lessee  provides Lessor with the funds to
cover  same,  or  adequate  assurance  thereof,  within ten (10) days  following
receipt of written  notice of such  shortage  and  request  therefor.  If Lessor
receives  said funds or  adequate  assurance  thereof  within  said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably  possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance  within said period,  Lessor may
nevertheless  elect by written notice to Lessee within ten (10) days  thereafter
to make such  restoration and repair as is  commercially  reasonable with Lessor
paying any shortage in  proceeds,  in which case this Lease shall remain in full
force and  effect.  If in such case  Lessor  does not so elect,  then this Lease
shall  terminate  sixty  (60) days  following  the  occurrence  of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction.  Premises Partial damage due to flood or earthquake shall
be subject to Paragraph  9.3 rather than  Paragraph  9.2,  notwithstanding  that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either party.

     9.3 Partial Damage-Uninsured Loss. If a Premises Partial Damage that is not
an Insured  Loss occurs,  unless  caused by a negligent or willful act of Lessee
(in which event Lessee shall make the repairs at Lessee's 
                                       11
<PAGE>
expense and this Lease shall  continue in full force and effect,  but subject to
Lessor's rights under Paragraph 13), Lessor may at Lessor's option,  either: (i)
repair such damage as soon as reasonably  possible at Lessor's expense, in which
event this Lease shall  continue in full force and effect,  or (ii) give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of
the  occurrence of such damage of Lessor's  desire to terminate this Lease as of
the date  sixty (60) days  following  the  giving of such  notice.  In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee  shall  have the right  within  ten (10) days  after the  receipt of such
notice to give written  notice to Lessor of Lessee's  commitment  to pay for the
repair of such damage totally at Lessee's expense and without reimbursement from
Lessor.  Lessee shall  provide  Lessor with the required  funds or  satisfactory
assurance thereof within thirty (30) days following Lessee's said commitment. In
such event this Lease shall continue in full force and effect,  and Lessor shall
proceed to make such  repairs as soon as  reasonably  possible  and the required
funds are  available.  If Lessee does not give such notice and provide the funds
or  assurance  thereof  within  the times  specified  above,  this  Lease  shall
terminate as of the date specified in Lessor's notice of termination.

     9.4 Total  Destruction.  Notwithstanding  any other provision  hereof, if a
Premises Total  Destruction  occurs  (including any destruction  required by any
authorized public authority), this Lease shall terminate (60) days following the
date  of  such  Premises  Total  Destruction,  whether  or  not  the  damage  or
destruction  is an Insured  Loss or was caused by a negligent  or willful act of
Lessee.  In the event,  however,  that the damage or  destruction  was caused by
Lessee,  Lessor  shall have the right to recover  Lessor's  damages  from Lessee
except as released and waived in Paragraph 8.6.

     9.5 Damage Near End of Term.  If at any time during the last six (6) months
of the term of this Lease there is a damage for which the cost to repair exceeds
one (1)  month's  Base Rent,  whether or not an Insured  Loss,  Lessor  may,  at
Lessor's  option,  terminate this Lease  effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within  thirty (30) days after the date of  occurrence of such
damage.  Provided however,  if Lessee at that time has an exercisable  option to
extend this Lease or to purchase the  Premises,  then Lessee may  preserve  this
Lease by, within twenty (20) days  following  the  occurrence of the damage,  or
before the  expiration  of the time  provided in such  option for its  exercise,
whichever is earlier  ("Exercise  Period"),  (i) exercising such option and (ii)
providing Lessor with any shortage in insurance  proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said  Exercise  Period and  provides  Lessor with funds (or  adequate  assurance
thereof) to cover any shortage in insurance proceeds,  Lessor shall, at Lessor's
expense  repair such damage as soon as reasonably  possible and this Lease shall
continue in full force and effect.  If Lessee fails to exercise  such option and
provide such funds or assurance during said Exercise Period,  then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty (60) day
period  following  the  occurrence  of such damage by giving  written  notice to
Lessee of Lessor's  election to do so within ten (10) days after the  expiration
of the Exercise  Period,  notwithstanding  any term or provision in the grant of
option to the contrary.

     9.6 Abatement of Rent; Lessee's Remedies.

          (a) In the  event  of  damage  described  in  Paragraph  9.2  (Partial
Damage-Insured),  whether  or not  Lessor  or Lessee  repairs  or  restores  the
Premises,  the Base Rent, Real Property  Taxes,  insurance  premiums,  and other
charges,  if any,  payable by Lessee  hereunder for the period during which such
damage,  its repair or the  restoration  continues (not to exceed the period for
which  rental value  insurance is required  under  Paragraph  8.3(b)),  shall be
abated in  proportion  to the degree to which  Lessee's  use of the  Premises is
impaired.  Except for  abatement of Base Rent,  Real Property  Taxes,  insurance
premiums,  and other  charges,  if any, as aforesaid,  all other  obligations of
Lessee  hereunder  shall be performed by Lessee,  and Lessee shall have no claim
against  Lessor  for any  damage  suffered  by  reason  of any  such  repair  or
restoration.

          (b) If Lessor  shall be  obligated  to repair or restore the  Premises
under  the  provisions  of  this  Paragraph  9  
                                       12
<PAGE>
and shall not  commence,  in a  substantial  and  meaningful  way, the repair or
restoration of the Premises within ninety (90) days after such obligation  shall
accrue,  Lessee  may,  at any time prior to the  commencement  of such repair or
restoration,  give  written  notice to Lessor and to any Lenders of which Lessee
has actual  notice of Lessee's  election to  terminate  this Lease on a date not
less than sixty (60) days  following the giving of such notice.  If Lessee gives
such notice to Lessor and such  Lenders and such  repair or  restoration  is not
commenced within sixty (60) days after receipt of such notice,  this Lease shall
terminate as of the date specified in said notice. If Lessor or Lender commences
the repair or restoration of the Premises  within thirty (30) days after receipt
of such notice,  this Lease shall continue in full force and effect.  "Commence"
as used in this Paragraph shall mean either the  unconditional  authorization of
the  preparation of the required  plans,  or the beginning of the actual work on
the Premises, whichever first occurs.

     9.7 Hazardous  Substance  Conditions.  If a Hazardous  Substance  Condition
occurs,  unless  Lessee is legally  responsible  therefor  (in which case Lessee
shall make the investigation and remediation  thereof required by Applicable Law
and this Lease shall continue in full force and effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and  remediate  such  Hazardous  Substance  Condition,  if required,  as soon as
reasonably  possible  at  Lessor's  expense,  in which  event this  Lease  shall
continue in full force and effect,  or (ii) if the estimated cost to investigate
and remediate  such  condition  exceeds  twelve (12) times the then monthly Base
Rent or $100,000,  whichever is greater,  give written  notice to Lessee  within
thirty (30) days after receipt by Lessor of knowledge of the  occurrence of such
Hazardous  Substance  Condition of Lessor's desire to terminate this Lease as of
the date  sixty (60) days  following  the  giving of such  notice.  In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee  shall  have the right  within  ten (10) days  after the  receipt of such
notice to give written  notice to Lessor of Lessee's  commitment  to pay for the
investigation and remediation of such Hazardous  Substance  Condition totally at
Lessee's expense and without  reimbursement  from Lessor except to the extent of
an amount  equal to twelve (12) times the then  monthly  Base Rent or  $100,000,
whichever is greater.  Lessee shall  provide  Lessor with the funds  required of
Lessee or  satisfactory  assurance  thereof  within  thirty (30) days  following
Lessee's said commitment.  In such event this Lease shall continue in full force
and effect,  and Lessor shall proceed to make such investigation and remediation
as soon as reasonably  possible and the required funds are available.  If Lessee
does not give such notice and provide the required  funds or  assurance  thereof
within the times  specified  above,  this Lease shall  terminate  as of the date
specified in Lessor's notice of termination.  If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible,  there shall be abatement of
Lessee's  obligations  under  this  Lease  to the same  extent  as  provided  in
Paragraph 9.6(a) for a period of not to exceed twelve months.

     9.8 Termination - Advance Payments. Upon termination of this Lease pursuant
to this Paragraph 9, an equitable  adjustment  shall be made concerning  advance
Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,
in addition,  return to Lessee so much of Lessee's  Security  Deposit as has not
been,  or is not then  required  to be,  used by Lessor  under the terms of this
Lease.

     9.9 Waive  Statutes.  Lessor and Lessee  agree that the terms of this Lease
shall govern the effect of any damage to or  destruction  of the  Premises  with
respect to the  termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.

10. Real Property Taxes.

     10.1 (a) Payment of Taxes.  Lessee shall pay the Real  Property  Taxes,  as
defined in Paragraph  10.2,  applicable to the Premises  during the term of this
Lease.  Subject to Paragraph  10.1(b),  all such payments shall be made at least
ten (10)  days  prior to the  delinquency  date of the  applicable  installment.
Lessee shall promptly furnish Lessor with satisfactory  evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's  share of such  taxes  shall be  equitably  prorated  to cover only the
period of time  within the tax fiscal  year this 
                                       13
<PAGE>
Lease is in effect,  and Lessor shall reimburse Lessee for any overpayment after
such proration.  If Lessee shall fail to pay any Real Property Taxes required by
this  Lease to be paid by Lessee,  Lessor  shall have the right to pay the same,
and Lessee shall  reimburse  Lessor  therefor upon demand.  See Paragraph 58 for
additional requirements.

          (b) Advance  Payment.  In order to insure  payment when due and before
delinquency of any or all Real Property  Taxes,  Lessor  reserves the right,  at
Lessor's  option,  to estimate the current Real Property Taxes applicable to the
Premises,  and to require such current  year's Real Property Taxes to be paid in
advance  to Lessor by  Lessee,  either:  (i) in a lump sum  amount  equal to the
installment  due, at least twenty (20) days prior to the applicable  delinquency
date,  or (ii) monthly in advance  with the payment of the Base Rent.  If Lessor
elects to require payment monthly in advance,  the monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax  installment  would become  delinquent  (and without
interest  thereon),  would provide a fund large enough to fully discharge before
delinquency  the  estimated  installment  of taxes to be paid.  When the  actual
amount of the  applicable  tax bill is known,  the amount of such equal  monthly
advance  payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by Lessee
under the  provisions  of this  Paragraph  are  insufficient  to  discharge  the
obligations  of Lessee to pay such Real  Property  Taxes as the same become due,
Lessee shall pay to Lessor,  upon Lessor's  demand,  such additional sums as are
necessary  to pay  such  obligations.  All  moneys  paid to  Lessor  under  this
Paragraph  may be  intermingled  with other  moneys of Lessor and shall not bear
interest.  In  the  event  of a  Breach  by  Lessee  in the  performance  of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may,  subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.

     10.2 Definition of "Real Property  Taxes".  As used herein,  the term "Real
Property  Taxes"  shall  include  any  form of real  estate  tax or  assessment,
general, special, ordinary or extraordinary, any lease excise tax (including but
not  limited  to any  government  property  lease  excise  tax due under  A.R.S.
'42-1901 et seq.  because of the City Lease  described in Paragraph 62 below and
the City's  ownership of  improvements),  and any commercial  rental tax, (other
than inheritance, personal, income or estate taxes) imposed upon the Premises by
any authority  having the direct or indirect  power to tax,  including any city,
state or  federal  government,  or any  school,  agricultural,  sanitary,  fire,
street, drainage or other improvement district thereof, levied against any legal
or equitable  interest of Lessor or Lessee in the  Premises or against  Lessee's
Alterations,   Utility  Improvements  or  Trade  Fixtures,  and  any  charge  or
assessment of any kind whatsoever  resulting from the Premises  inclusion in any
property owners association.

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

     10.4 Personal  Property  Taxes.  Lessee shall pay prior to delinquency  all
taxes  assessed  against  and levied  upon  Lessee  Owned  Alterations,  Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee  contained in the Premises or elsewhere.  When possible,  Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's  said  personal  property  shall be  assessed  with the  Lessor's  real
property,  Lessee shall pay Lessor the taxes  attributable  to Lessee within ten
(10)  days  after  receipt  of a  written  statement  setting  forth  the  taxes
applicable to Lessee's property or, at Lessor's option, as provided in Paragraph
10.1(b).

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone,  trash  disposal and other  
                                       14
<PAGE>
utilities  and  services  supplied  to the  Premises,  together  with any  taxes
thereon. If any such services are not separately metered to Lessee, Lessee shall
pay a reasonable proportion,  to be determined by Lessor, of all charges jointly
metered with other premises.

12. Assignment and Subletting.

     12.1 Lessor's Consent Required.

          (a)  Lessee  shall not  voluntarily  or by  operation  of law  assign,
transfer, mortgage or otherwise transfer or encumber (collectively "assignment")
or sublet all or any part of Lessee's  interest in this Lease or in the Premises
without  Lessor's prior written  consent given under and subject to the terms of
Paragraph 36.

          (b) A change in the control of Lessee shall  constitute  an assignment
requiring Lessor's consent. The transfer,  on a cumulative basis, of twenty-five
percent (25%) or more or the voting control of Lessee shall  constitute a change
in control for this purpose, except to the extent it results from the trading of
securities on any national or regional stock exchange.

          (c) The  involvement of Lessee or its assets in any  transactions,  or
series  of  transactions  (by  way  of  merger,  sale,  acquisition,  financing,
refinancing,  transfer, leveraged buy-out or otherwise), whether or not a formal
assignment  or  hypothecation  of this Lease or Lessee's  assets  occurs,  which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of the execution
by Lessor of this Lease or at the time of the most  recent  assignment  to which
Lessor has consented,  or as it exists  immediately  prior to said  transactions
constituting  such reduction,  at whichever time said Net Worth of Lessee was or
is greater,  shall be  considered an assignment of this Lease by Lessee to which
Lessor may reasonably  withhold its consent.  "Net Worth of Lessee" for purposes
of this  Lease  shall be the net  worth of  Lessee  (excluding  any  guarantors)
established under generally accepted accounting principles consistently applied.

          (d) An assignment  or  subletting  of Lessee's  interest in this Lease
without Lessor's  specific prior written consent shall, at Lessor's option, be a
Default  curable  after notice per  Paragraph  13.1(c),  or a noncurable  Breach
without the necessity of any notice and grace period.  If Lessor elects to treat
such  unconsented  to assignment or  subletting as a noncurable  Breach,  Lessor
shall have the right to either:  (i) terminate  this Lease,  or (ii) upon thirty
(30) days written notice ("Lessor's Notice"),  increase the monthly Base Rent to
fair market  value or one  hundred  ten percent  (110%) of the Base Rent then in
effect,  whichever  is  greater.  Pending  determination  of the new fair market
value, if disputed by Lessee,  Lessee shall pay the amount set forth in Lessor's
Notice,  with any overpayment  credited against the next  installment(s) of Base
Rent  coming  due,  and any  underpayment  for the period  retroactively  to the
effective  date of the  adjustment  being due and payable  immediately  upon the
determination  thereof.  Further,  in the event of such Breach and market  value
adjustment,  (i) the purchase  price of any option to purchase the Premises held
by Lessee shall be subject to similar  adjustment  to the then fair market value
(without  the  Lease  being  considered  an  encumbrance  or  any  deduction  or
depreciation  or  obsolescence,  and considering the Premises at its highest and
best use and in good condition),  or one hundred ten percent (110%) of the price
previously in effect,  whichever is greater,  (ii) any index-oriented  rental or
price adjustment  formulas  contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index  applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the  remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect  immediately  prior to the market
value adjustment.

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease,  (ii) release Lessee of
any obligations  hereunder,  or (iii) alter the primary  liability of Lessee for
the  payment  of Base  Rent and  other  sums  due  Lessor  hereunder  or for the
performance of any other obligations to be performed by 
                                       15
<PAGE>
Lessee under this Lease.

          (b) Lessor may accept any rent or performance of Lessee's  obligations
from any  person  other  than  Lessee  pending  approval  or  disapproval  of an
assignment.  Neither a delay in the approval of disapproval  of such  assignment
nor the  acceptance  of any rent or  performance  shall  constitute  a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any terms, covenants or conditions of this Lease.

          (c) The consent of Lessor to any  assignment or  subletting  shall not
constitute a consent to any subsequent  assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent  subletting and  assignments of the sublease or
any amendments or modifications  thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without  obtaining  their consent,  and such
action  shall not  relieve  such  persons  from  liability  under  this Lease or
sublease.

          (d) In the event of any  Default  or Breach  of  Lessee's  obligations
under this Lease,  Lessor may proceed directly against Lessee, any Guarantors or
any one else responsible for the performance of the Lessee's  obligations  under
this Lease, including the sublessee,  without first exhausting Lessor's remedies
against  any other  person or entity  responsible  therefor  to  Lessor,  or any
security held by Lessor or Lessee.

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

          (f) Any assignee of, or sublessee  under,  this Lease shall, by reason
of accepting such assignment or entering into such sublease,  be deemed, for the
benefit of Lessor,  to have  assumed  and agreed to conform and comply with each
and every term,  covenant,  condition  and  obligation  herein to be observed or
performed by Lessee during the term of said  assignment or sublease,  other than
such  obligations  as are  contrary to or  inconsistent  with  provisions  of an
assignment or sublease to which Lessor has specifically consented in writing.

          (g) The  occurrence  of a transaction  described in Paragraph  12.1(c)
shall  give  Lessor  the right  (but not the  obligation)  to  require  that the
Security  Deposit  be  increased  to an  amount  equal to six (6) times the then
monthly  Base Rent,  and  Lessor  may make the  actual  receipt by Lessor of the
amount  required to  establish  such  Security  Deposit a condition  to Lessor's
consent to such transaction.

          (h) Lessor,  as a condition to giving its consent to any assignment or
subletting,  may require  that the amount and  adjustment  structure of the rent
payable  under this Lease be  adjusted to what is then the market  value  and/or
adjustment structure for property similar to the Premises as then constituted.

     12.3  Additional  Terms  and  Conditions  Applicable  to  Subletting.   The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises  and shall be deemed  included in all  subleases  under
this Lease whether or not expressly incorporated therein:

          (a) Lessee  hereby  assigns  and  transfers  to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises  heretofore or hereafter made by Lessee,  and Lessor may collect
such rent and income  and apply  same  toward  Lessee's  obligations  under this
Lease;  provided,  however,  that until a Breach (as defined in Paragraph  13.1)
shall occur in the performance of Lessee's  obligations under this Lease, Lessee
may, except as otherwise provided in this Lease, receive,  collect and enjoy the
rents accruing  under such sublease.  Lessor shall not, by reason of this or any
other assignment of such sublease to Lessor,  nor by reason of the collection of
the rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's  obligations to such sublessee
under such sublease.  Lessee hereby irrevocably  authorizes and directs any such
sublessee,  upon receipt of a written  notice from Lessor  stating 
                                       16
<PAGE>
that a Breach  exists in the  performance  of  Lessee's  obligations  under this
Lease,  to pay to Lessor the rents and other charges due and to become due under
the  sublease.  Sublessee  shall rely upon any such  statement  and request from
Lessor  and  shall  pay such  rents and other  charges  to  Lessor  without  any
obligation   or  right  to  inquire  as  to  whether  such  Breach   exists  and
notwithstanding  any notice  from or claim from Lessee to the  contrary.  Lessee
shall have no right or claim  against said  sublessee,  or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.

          (b) In the  event of a Breach  by  Lessee  in the  performance  of its
obligations  under this Lease,  Lessor, at its option and without any obligation
to do so, may require any  sublessee to attorn to Lessor,  in which event Lessor
shall  undertake the  obligations of the sublessor  under such sublease from the
time of the  exercise  of  said  option  to the  expiration  of  such  sublease;
provided,  however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.

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

          (d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

          (e) Lessor shall  deliver a copy of any notice of Default or Breach by
Lessee to the sublessee,  who shall have the right to cure the Default of Lessee
within the grace period, if any,  specified in such notice.  The sublessee shall
have a right of  reimbursement  and offset from and against  Lessee for any such
Defaults cured by the sublessee.

13. Default; Breach; Remedies.

     13.1 Default;  Breach. A "Default" is defined as a failure by the Lessee to
observe, comply with or perform any of the terms, covenants, conditions or rules
applicable to Lessee under this Lease.  A "Breach" is defined as the  occurrence
of any one or more of the following Defaults, and, where a grace period for cure
after  notice is  specified  herein,  the failure by Lessee to cure such Default
prior to the expiration of the applicable grace period, and shall entitle Lessor
to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:

          (a) The  vacating of the  Premises  without the  intention to reoccupy
same, or the abandonment of the Premises.

          (b) Except as expressly  otherwise provided in this Lease, the failure
by  Lessee  to make any  payment  of Base  Rent or any  other  monetary  payment
required to be made by Lessee hereunder,  whether to Lessor or to a third party,
as and when due,  the  failure  by  Lessee to  provide  Lessor  with  reasonable
evidence of insurance or surety bond required  under this Lease,  or the failure
of Lessee to  fulfill  any  obligation  under  this  Lease  which  endangers  or
threatens  life or  property,  where  any  such  failure  in  this  subparagraph
continues  for a period of three (3)  business  days  following  written  notice
thereof by or on behalf of Lessor to Lessee.

          (c) Except as expressly  otherwise provided in this Lease, the failure
to provide Lessor with reasonable  written  evidence (in duly executed  original
form, if applicable) of (i)  compliance  with  applicable law per Paragraph 6.3,
(ii) the inspection,  maintenance and service contracts required under Paragraph
7.1(b),  (iii) the recision of an  unauthorized  assignment  or  subletting  per
Paragraph  12.1(b),  (iv) a Tenancy  Statement per  Paragraphs 16 or 37, (v) the
subordination  or  non-subordination  of this Lease per  Paragraph  30, (vi) the
guaranty of the performance of Lessee's obligations under this Lease if required
under  Paragraphs  1.11 and 37, (vii) the  execution  of any document  requested
under Paragraph 42 (easements), or (viii) any other documentation or information
which  Lessor may  reasonably  require of Lessee  under the terms of this Lease,
where any such failure continues for a period of ten (10) days following written
notice by or on behalf of Lessor to Lessee.

          (d) A Default  by Lessee as to the  terms,  covenants,  conditions  or
provisions of this Lease,  or of the rules  adopted  under  Paragraph 40 hereof,
that are to be observed,  complied with or performed by Lessee, other than 
                                       17
<PAGE>
those  described  in  subparagraphs  (a),  (b) or (c) above,  where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee;  provided,  however,  that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably  required for its
cure,  then it shall not be  deemed  to be a Breach  of this  Lease by Lessee if
Lessee  commences  such cure within  said thirty (30) day period and  thereafter
diligently prosecutes such cure to completion.

          (e) The occurrence of any of the following  events:  (i) The making by
Lessee of any general  arrangement  or assignment  for the benefit of creditors;
(ii) Lessee's  becoming a "debtor" as defined in 11 U.S.C. '101 or any successor
statute thereto  (unless,  in the case of a petition filed against  Lessee,  the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of  substantially  all of Lessee's assets located at
the  Premises or of Lessee's  interest in this Lease,  where  possession  is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial  seizure of  substantially  all of Lessee's assets located at the
Premises  or of  Lessee's  interest  in the  Lease,  where  such  seizure is not
discharged  within thirty (30) days;  provided,  however,  in the event that any
provision  of this  subparagraph  (e) is contrary to any  applicable  law,  such
provision  shall be of no force or effect,  and not affect the  validity  of the
remaining provisions.

          (f) The  discovery  by Lessor that any  financial  statement  given to
Lessor  by  Lessee  or any  Guarantor  of  Lessee's  obligations  hereunder  was
materially false.

     13.2  Remedies.  If  Lessee  fails  to  perform  any  affirmative  duty  or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without  obligation to do so),  perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental  licenses,  permits or approvals.  The costs
and  expenses  of any such  performance  by Lessor  shall be due and  payable by
Lessee to Lessor upon invoice therefore.  If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn,  Lessor, at its option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's  check.  In the event of a Breach of this Lease by Lessee,  as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting  Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:

          (a)  Terminate  Lessee's  right to  possession  of the Premises by any
lawful means,  in which case this Lease and the term hereof shall  terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the  award  of the  unpaid  rent  which  had  been  earned  at  the  time  of
termination;  (ii) the  worth at the time of award of the  amount  by which  the
unpaid  rent which would have been earned  after  termination  until the time of
award  exceeds the amount of such rental loss that the Lessee  proves could have
been reasonably  avoided;  (iii) the worth at the time of award of the amount by
which the unpaid  rent for the  balance of term after the time of award  exceeds
the  amount of such  rental  loss that the  Lessee  proves  could be  reasonably
avoided;  and (iv) any other amount  necessary to compensate  Lessor for all the
detriment  proximately caused by the Lessee's failure to perform its obligations
under this Lease or which in the  ordinary  course of things  would be likely to
result therefrom, including but not limited to the cost of recovering possession
of the  Premises,  expenses of reletting,  including  necessary  renovation  and
alteration of the Premises,  reasonable attorneys' fees, and that portion of the
leasing  commission  paid by Lessor  applicable  to the  unexpired  term of this
Lease.  The worth at the time of award of the amount  referred  to in  provision
(iii) of the prior sentence shall be computed by discounting  such amount at the
discount rate of the Federal  Reserve Bank of San Francisco at the time of award
plus one  percent.  Efforts by Lessor to  mitigate  damages  caused by  Lessee's
Default  or Breach of this  Lease  shall not  waive  Lessor's  right to  recover
damages under this Paragraph.  If termination of this Lease is obtained  through
the  provisional  remedy of unlawful  detainer,  Lessor  shall have the right to
recover in such  proceeding  the  unpaid  rent and  
                                       18
<PAGE>
damages as are recoverable  therein,  or Lessor may reserve therein the right to
recover all or any part thereof in a separate suit for such rent and/or damages.
If a notice and grace period required under  subparagraphs  13.1(b),  (c) or (d)
was not  previously  given, a notice to pay rent or quit, or perform or quit, as
the case may be, given to Lessee under any statute authorizing the forfeiture of
leases for unlawful  detainer shall also  constitute  the applicable  notice for
grace period purposes  required by  subparagraphs  13.1(b),  (c) or (d). In such
case, the applicable grace period under  subparagraphs  13.1 (b), (c) or (d) and
under the unlawful  detainer  statue shall run  concurrently  after the one such
statutory  notice,  and the  failure  of Lessee to cure the  Default  within the
greater of the two such grace periods shall constitute both an unlawful detainer
and a Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.

          (b)  Continue  the Lease and Lessee's  right to  possession  in effect
after Lessee's  Breach and  abandonment  and recover the rent as it becomes due,
provided  Lessee has the right to sublet or assign,  subject only to  reasonable
limitations.  See  Paragraphs 12 and 36 for the  limitations  on assignment  and
subletting  which  limitations  Lessee and Lessor agree are reasonable.  Acts of
maintenance or preservation,  efforts to relet the Premises,  or the appointment
of a receiver  to  protect  the  Lessor's  interest  under the Lease,  shall not
constitute a termination of the Lessee's right to possession.

          (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.

          (d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession  shall not relieve  Lessee from liability  under
any  indemnity  provisions  of this Lease as to matters  occurring  or  accruing
during the term hereof or by reason of Lessee's occupancy of the Premises.

     13.3 Inducement  Recapture In Event Of Breach.  Any agreement by Lessor for
free or abated rent or other  charges  applicable  to the  Premises,  or for the
giving  or  paying  by  Lessor  to or for  Lessee  of any cash or  other  bonus,
inducement or consideration  for Lessee's entering into this Lease, all of which
concessions are  hereinafter  referred to as "Inducement  Provisions",  shall be
deemed  conditioned  upon Lessee's full and faithful  performance  of all of the
terms,  covenants  and  conditions of this Lease to be performed and observed by
Lessee during the term hereof as the same may be extended.  Upon the  occurrence
of a Breach of this Lease by Lessee,  as defined  in  Paragraph  13.1,  any such
Inducement  Provision shall  automatically be deemed deleted from this Lease and
of no future force or effect, and any rent, other charge,  bonus,  inducement or
consideration  theretofore  abated,  given  or  paid  by  Lessor  under  such an
Inducement  Provision  shall be immediately due and payable by Lessee to Lessor,
and   recoverable   by  Lessor  as   additional   rent  due  under  this  Lease,
notwithstanding  any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which  initiated  the operation of this
Paragraph  shall not be deemed a wavier  by  Lessor  of the  provisions  of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.

     13.4 Late Charges.  Lessee hereby  acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder  will cause Lessor to incur costs
not  contemplated  by this Lease,  the exact  amount of which will be  extremely
difficult to ascertain.  Such costs include,  but are not limited to, processing
and  accounting  charges,  and late charges  which may be imposed upon Lessor by
terms of any  ground  lease,  mortgage  or trust  deed  covering  the  Premises.
Accordingly,  if any  installment of rent or any other sum due from Lessee shall
not be received  by Lessor or  Lessor's  designee on the first day of each month
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such late charge  represents  a fair and  reasonable  estimate of the
costs Lessor will incur by reason of late payment by Lessee.  Acceptance of such
late charge by Lessor shall in no event  constitute a waiver of Lessee's Default
or  Breach  with  respect  to such  overdue  amount,  not  prevent  Lessor  from
exercising any of the other rights and remedies granted hereunder.  In the event
that a late charge is payable hereunder, whether or not collected, for three (3)
consecutive installments of Base Rent, then notwithstanding 
                                       19
<PAGE>
Paragraph 4.1 or any other  provision of this Lease to the  contrary,  Base Rent
shall, at Lessor's option, become due and payable quarterly in advance.

     13.5 Breach by Lessor.  Lessor  shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable  time to perform an obligation  required
to be performed by Lessor.  For  purposes of this  Paragraph  13.5, a reasonable
time shall in no event be less than  thirty  (30) days after  receipt by Lessor,
and by the holders of any ground lease,  mortgage or deed of trust  covering the
Premises whose name and address shall have been furnished  Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such  that more than  thirty  (30) days  after  such  notice  are  reasonably
required for its  performance,  then Lessor shall not be in breach of this Lease
if  performance  is commenced  within such thirty (30) day period and thereafter
diligently pursued to completion, and further provided that such period shall be
shortened  to the  extent  reasonably  required  in  the  event  of a bona  fide
emergency which, if not addressed more quickly, may result in material injury or
damage to persons or property.

14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent  domain or sold under the threat of the  exercise of said power
(all of which are herein called  "Condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises,  or more than  twenty-five  percent (25%) of the land area
not occupied by any building, is taken by condemnation,  Lessee may, at Lessee's
option,  to be exercised in writing within ten (10) days after Lessor shall have
given  Lessee  written  notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate  this  Lease  as of the  date  the  condemning  authority  takes  such
possession.  If Lessee  does not  terminate  this Lease in  accordance  with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises  remaining,  except that the Base Rent shall be reduced in the same
proportion as the rentable  floor area of the Premises  taken bears to the total
rentable  floor area of the building  located on the  Premises.  No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there  is no  building.  Any  award  for the  taking  of all or any  part of the
Premises  under the power of eminent  domain or any payment made under threat of
the exercise of such power shall be the  property of Lessor,  whether such award
shall be made as  compensation  for  diminution in value of the leasehold or for
the taking of the fee, or as severance damages;  provided,  however, that Lessee
shall be entitled to any compensation, separately awarded to Lessee for Lessee's
relocation  expenses and/or loss of Lessee's Trade  Fixtures.  In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation,  except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment of any amount in excess of such net  severance  damages  required to
complete such repair.

15. Deleted
    -------

16. Tenancy Statement.

     16.1.  Each Party (as  "Responding  Party") shall within ten (10) days from
the other Party (the "Requesting Party") execute, acknowledge and deliver to the
Requesting Party a statement in writing in form similar to the then most current
"Tenancy  Statement"  form  published  by the  American  Industrial  Real Estate
Association , plus such additional  information,  confirmation and/or statements
as may be reasonably requested by the Requesting Party.

     16.2 If Lessor desire to finance,  refinance, or sell the Premise, any part
thereof,  or the  building  of which the  Premises  are a part,  Lessee  and all
Guarantors  of Lessee's  performance  hereunder  shall  deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such  Guarantors as 
                                       20
<PAGE>
may be  reasonably  required  by such  lender or  purchaser  and are  reasonably
available by Lessee,  including but not limited to Lessee's financial statements
for the past three (3) years. All such financial statements shall be received by
Lessor and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth.

17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises,  or, if this is
a  sublease,  of the  lessee's  interest in the prior  lease.  In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease,  Lessor
shall  deliver to the  transferee  or assignee (in cash or by credit) any unused
Security  Deposit  held by Lessor at the time of such  transfer  or  assignment.
Except as  provided  in  Paragraph  15, upon such  transfer  or  assignment  and
delivery of the  Security  Deposit,  as  aforesaid,  the prior  Lessor  shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease  thereafter to be performed by the Lessor.  Subject to the foregoing,
the  obligations  and/or  covenants  in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinafter defined.

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

19. Interest On Past-Due Obligations. Any monetary payment due Lessor hereunder,
other  than late  charges,  not  received  by  Lessor  within  thirty  (30) days
following  the  date  of  which  it  was  due,  shall  bear  interest  from  the
thirty-first  (31st) day after it was due at the rate of 12% per annum,  but not
exceeding  the  maximum  rate  allowed by law,  in  addition  to the late charge
provided for in Paragraph 13.4.

20. Time of Essence.  Time is of the essence with respect to the  performance of
all obligations to be performed or observed by the Parties under this Lease.

21. Rent Defined.  All monetary  obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. No Prior or Other  Agreements;  Broker  Disclaimer.  This Lease contains all
agreements  between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each  represents and warrants to the Brokers that is has made,
and is relying solely upon, its owner  investigation as to the nature,  quality,
character and financial  responsibility  of the other Party to this Lease and as
to  the  nature,  quality  and  character  of  the  Premises.  Brokers  have  no
responsibility  with  respect  thereto or with  respect to any default or breach
hereof by either Party.

23. Notices.

     23.1 All notices  required or  permitted  by this Lease shall be in writing
and may be delivered  in person (by hand or by messenger or courier  service) or
may be sent by regular,  certified or  registered  mail or U.S.  Postal  Service
Express Mail, with postage prepaid, or by facsimile  transmission,  and shall be
deemed  sufficiently given if served in a manner specified in this Paragraph 23.
The addressees  noted adjacent to Party's  signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes.  Either Party may by
written  notice to the other  specify a different  address for notice  purposes,
except that upon Lessee's taking possession of the Premises,  the Premises shall
constitute  Lessee's address for the purpose of mailing or delivering notices to
Lessee.  A copy of all  notices  required  or  permitted  to be given to  Lessor
hereunder  shall be  concurrently  transmitted  to such party or parties at such
addresses as Lessor may from time to time hereafter  designate by written notice
to Lessee.

     23.2 Any notice  sent by  registered  or  certified  mail,  return  receipt
requested,  shall be deemed  given on the date of delivery  shown on the receipt
card, or if no delivery date is shown, the postmark thereon.  If sent by regular
mail the notice shall be deemed given  forty-eight  (48) hours after the same is
addressed as required herein and mailed with postage prepaid.  Notices delivered
by United  State  Express Mail or overnight  courier  
                                       21
<PAGE>
that guarantees next day delivery shall be deemed given  twenty-four  (24) hours
after  delivery of the same to the United States Postal  Service or courier.  If
any notice is transmitted by facsimile  transmission or similar means,  the same
shall be deemed served or delivered  upon telephone  confirmation  of receipt of
the transmission thereof, provided a copy is also delivered via delivery or mail
in the manner expressly  provided in this paragraph.  If notice is received on a
Sunday or legal holiday, it shall be deemed received on the next business day.

24. Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereto by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or  approval  of,  any act shall  not be  deemed to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an estoppel to enforce the provision
or  provisions  of this Lease  requiring  such  consent.  Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting  rent,  the acceptance
of rent by Lessor  shall not be a waiver of any  preceding  Default or Breach by
Lessee of any  provision  hereof,  other  than the  failure of Lessee to pay the
particular rent so accepted.  Any payment given Lessor by Lessee may be accepted
by Lessor on  account  of moneys or  damages  due  Lessor,  notwithstanding  any
qualifying  statements  or conditions  made by Lessee in  connection  therewith,
which such statement and/or conditions shall be of no force or effect whatsoever
unless  specifically  agreed to in  writing  by Lessor at or before  the time of
deposit such payment.

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

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

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

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

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

30. Subordination; Attornment; Non-Disturbance.

     30.1 Subordination.  Subject to the non-disturbance  provision of Paragraph
30.3,  this Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security
device (collectively, "Security Device"), now or hereafter placed by Lessor upon
the real property of which the Premises are a part, to any and all advances made
on the security  thereof,  and to all renewals,  modifications,  consolidations,
replacements   and  extensions   thereof,   and  the  Ground  Lease,   Sublease,
Declaration, Title Exceptions, Miscellaneous Exceptions, REA, City Agreement and
City Lease described in Paragraph 62 below, including any amendments,  additions
or  supplements  thereto that are  permitted  under  Paragraph 62 below.  Lessee
agrees that the lenders  holding any such  Security  Device  shall have no duty,
liability or obligation to perform any of the  obligations  of Lessor under this
Lease,  but that in the  event of  
                                       22
<PAGE>
Lessor's  default  with  respect to any such  obligation,  Lessee  will give any
lender  whose name and address  have been  furnished  Lessee in writing for such
purpose  notice of  Lessor's  default  and allow such  lender  thirty  (30) days
following  receipt of such notice the cure of said default  before  invoking any
remedies  Lessee may have by reason  thereof.  If any lender shall elect to have
this Lease and/or any Option granted hereby superior to the lien of its Security
Device  and shall give  written  notice  thereof to Lessee,  this Lease and such
Options  shall be deemed  prior to such  Security  Device,  notwithstanding  the
relative dates of the documentation or recordation thereof.

     30.2.  Attornment.  Subject to the  non-disturbance  provision of Paragraph
30.3,  Lessee  agrees to attorn  to a lender  or any  other  party who  acquires
ownership of the Premises by reason of a foreclosure of a Security  Device,  and
that in the event of such  foreclosure,  such new owner shall not: (i) be liable
for any act or omission of any prior  lessor  with  respect to events  occurring
prior to  acquisition  of ownership,  (ii) be subject to any offsets or defenses
which  Lessee  might  have  against  any  prior  lessor,  or  (iii)  be bound by
prepayment of more than one month's rent.

     30.3 Non-Disturbance;  Recognition of Lease by SRP and PPC. With respect to
Security  Devices other than the Ground Lease and the Sublease  (both as defined
in Paragraph 62 below), Lessee's subordination of this Lease shall be subject to
receiving  assurance  (a  "Non-Disturbance  Agreement")  from  the  Lender  that
Lessee's  possession  and this Lease,  including  any options to extend the term
hereof,  will not be  disturbed  so long as Lessee is not in Breach  hereof  and
attorns to the record owner of the Premises. Lessor has obtained and provided to
Lessee a  Nondisturbance  and  Recognition  Agreement  from SRP (as  defined  in
Paragraph 62) dated June 27, 1997  confirming  that the Sublease is a "Permitted
Sublease"  pursuant  to the terms of the Ground  Lease.  Lessor  represents  and
warrants  that if the Ground  Lease is  terminated  for any reason,  Lessor will
promptly take all steps set forth in Section 6.04 of the Ground Lease to protect
the  Sublease  as  a  Permitted  Sublease  with  SRP,  including  obtaining  the
attornment and recognition of SRP with respect to the Sublease,  subject to said
Section 6.04.  Lessor has obtained a  Nondisturbance  and Recognition  Agreement
from PPC (as defined in Paragraph 62 below) dated June 27, 1997  confirming that
this Lease is a  "Permitted  Sublease"  pursuant to Section 17.2 of the Sublease
and containing  PPC's agreement not to disturb  Lessee's  possession  subject to
Article 16 of the Sublease.

     30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be
effective  without the execution of any further  documents;  provided,  however,
that,  upon  written  request  from Lessor or a lender,  Lessee and Lessor shall
execute  such  further  writings as may be  reasonably  required  to  separately
document  any  such  subordination  or   non-subordination,   attornment  and/or
non-disturbance agreement as provided herein.

     30.5  Provisions  Relating to Sublease.  With respect to the  Sublease,  as
defined in  Paragraph  62 below,  and without  limiting  the  generality  of the
foregoing,  the parties  expressly agree and acknowledge that (a) this Lease and
the rights of Lessee  hereunder are subject and  subordinate to the Sublease and
the rights of the Landlord  thereunder;  (b) if the Sublease is terminated prior
to the  expiration of the term thereof,  Lessee will attorn to such Landlord and
recognize  such  Landlord  as the new  Lessor  hereunder;  (c) in the  event the
Sublease is terminated and the Landlord under the Sublease is not then receiving
rents under this Lease which result in such Landlord realizing the net amount of
the  annual  Minimum  Rent then due under the  Sublease  after  considering  all
expenses of holding, operating and managing the building(s) within the Premises,
then  notwithstanding  any  agreement on the part of such  Landlord to recognize
this Lease,  such Landlord  shall have the right to terminate  this Lease at any
time by the giving of 365 days prior notice to Lessee and such Landlord's making
a  termination  payment  to Lessee in the amount  equal to one year's  Base Rent
payable  under this Lease  calculated  at the rental  rate in effect at the time
Landlord's  written  notice of termination is given.  Such  termination  payment
shall be paid by Landlord to Lessee within fifteen (15) days after the date that
this Lease is terminated and Lessee and any other occupants of the Premises have
vacated the Premises and left it in the  condition  required  under Article 6 of
the 
                                       23
<PAGE>
Sublease.

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

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of emergency,  and
otherwise at reasonable times for the purpose of showing the same to prospective
purchasers,   lenders,  or  lessees,  and  making  such  alterations,   repairs,
improvements or additions to the Premises or to the building of they are a part,
as Lessor  may  reasonably  deem  necessary.  Lessor may at any time place on or
about the Premises or building  any ordinary  "For Sale" signs and Lessor may at
any time during the last one hundred  twenty (120) days of the term hereof place
on or about the Premises any ordinary "For Lease" signs.  All such activities of
Lessor shall be without abatement of rent or liability to Lessee.

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

34.  Signs.  Lessee  shall not place any signs upon the  Premises,  except  that
Lessee may, with Lessor's prior written  consent,  install (but not on the roof)
such signs as are reasonably  required to advertise  Lessee's own business.  The
installation  of any sign on the  Premises by or for Lessee  shall be subject to
the  provisions of Paragraph 7  (Maintenance,  Repairs,  Utility  Installations,
Trade  Fixtures and  Alterations).  Unless  otherwise  expressly  agreed herein,
Lessor reserves all rights to the use of the roof and the right to install,  and
all revenues from the installation  of, such advertising  signs on the Premises,
including  the  roof,  as do not  unreasonably  interfere  with the  conduct  of
Lessee's business.

35.  Termination;  Merger.  Unless  specifically  stated otherwise in writing by
Lessor,  the  voluntary or other  surrender of this Lease by Lessee,  the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee,  shall  automatically  terminate any sublease or lesser estate in the
Premises,  provided;  however, Lessor shall, in the event of any such surrender,
termination or  cancellation,  have the option to continue any one or all of any
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser  interest,  shall constitute  Lessor's  election to have such
event constitute the termination of such interest.

36. Consents.

     (a) Except for  Paragraph 33 hereof  (Auctions)  or as  otherwise  provided
herein,  wherever  in this Lease the consent of a Party is required to an act by
or for the other  Party,  such  consent  shall not be  unreasonably  withheld or
delayed.  Lessor's  actual  reasonable  costs and  expenses  (including  but not
limited to  architects',  attorneys',  engineers'  or other  consultants'  fees)
incurred in the  consideration  of, or response  to, a request by Lessee for any
Lessor  consent  pertaining  to this Lease or the  Premises,  including  but not
limited to consents to an  assignment,  a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be 
                                       24
<PAGE>
paid by Lessee to Lessor upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an acknowledgment that no Default or
Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver
of any then existing Default or Breach, except as may be otherwise  specifically
stated in writing by Lessor at the time of such consent.

     (b) All  conditions  to  Lessor's  consent  authorized  by this  Lease  are
acknowledged  by Lessee as being  reasonable.  The failure to specify herein any
particular  condition to Lessor's  consent shall not preclude the  imposition by
Lessor at the time of consent of such  further or other  conditions  as are then
reasonable  with reference to the  particular  matter for which consent is being
given.

37. Deleted

38.  Quiet  Possession.  Upon payment by Lessee of the rent for the Premises and
the  observance  and  performance  of  all  of the  covenants,  conditions,  and
provisions  on Lessee's  part to be  observed  and  performed  under this Lease,
Lessee  shall have quiet  possession  of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

39. Options.

     39.1  Definition.  As used in this  Paragraph 39 the word  "Option" has the
following  meaning:  (a) the right to extend  the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other  property of
Lessor;  (b) the right of first  refusal to lease the  Premises  or the right of
first offer to lease the  Premises or the right of first  refusal to lease other
property  of Lessor  or the  right of first  offer to lease  other  property  of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises,  or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.

     39.2 Options Personal to Original Lessee.  Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be  voluntarily or  involuntarily  assigned or exercised by any person or
entity other than said original  Lessee while the original Lessee is in full and
actual  possession  of the  Premises  and without the  intention  of  thereafter
assigning or subletting.  The Options,  if any, herein granted to Lessee are not
assignable,  either as a part of an  assignment  of this Lease or  separately or
apart  therefrom,  and no Option may be separated from this Lease in any manner,
by reservation or otherwise.

     39.3 Multiple Options. In the event that Lessee has any multiple Options to
extend or renew this Lease, a later option cannot be exercised  unless the prior
Options to extend or renew this Lease have been validly exercised.

     39.4 Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option,  notwithstanding
any  provision  in the grant of Option to the  contrary;  (i)  during the period
commencing  with the giving of any notice of Default  under  Paragraph  13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any  monetary  obligation  due Lessor from Lessee is unpaid  (without  regard to
whether notice  thereof is given Lessee),  or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of Default under Paragraph 13.1, whether or not the Defaults
are cured,  during  the  twelve  (12) month  period  immediately  preceding  the
exercise of the Option.

          (b) The period of time within which an Option may be  exercised  shall
not be  extended or  enlarged  by reason of  Lessee's  inability  to exercise an
Option because of the provisions of Paragraph 39.4(a).

          (c) All  rights of  Lessee  under the  provisions  of an Option  shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely  exercise of the Option,  if, after such  exercise and during the term of
this Lease (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for
a period of thirty  (30) 
                                       25
<PAGE>
days after such obligation  becomes due (without any necessity of Lessor to give
notice thereof to Lessee),  or (ii) Lessor gives to Lessee three or more notices
of Default under  Paragraph 13.1 during any twelve month period,  whether or not
the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.

40.  Multiple  Buildings.  If the  Premises  are  part of a group  of  buildings
controlled by Lessor,  Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management,  safety,  care,  and  cleanliness  of the  grounds,  the parking and
unloading of vehicles  and the  preservation  of good order,  as well as for the
convenience  of other  occupants  or tenants of such other  buildings  and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.

41. Security  Measures.  Lessee hereby  acknowledges  that the rental payable to
Lessor  hereunder  does not include the cost of guard service or other  security
measures,  and that Lessor shall have no obligation  whatsoever to provide same.
Lessee assumes all  responsibility  for the protection of the Premises,  Lessee,
its agents and invitees and their property from the acts of third parties.

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

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

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

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

46. Offer.  Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.

47.  Amendments.  This  Lease may be  modified  only in  writing,  signed by the
parties in interest  at the time of the  modification.  The parties  shall amend
this Lease from time to time to reflect any adjustment that are made to the Base
Rent or other rent payable under this Lease.  As long as they do not  materially
change  Lessee's  obligations  hereunder,  Lessee agrees to make such reasonable
non-monetary  modifications  to this Lease as may be  reasonably  required by an
institutional,  insurance company, or pension plan Lender in connection with the
obtaining  of normal  financing  or  refinancing  of the  property  of which the
Premises are a part.

48. Multiple  Parties.  Except as otherwise  expressly  provided herein, if more
than one  person or entity is named  herein  as  either  Lessor or  Lessee,  the
obligations   of  such   multiple   parties  shall  be  the  joint  and  several
responsibility of all persons or entities named herein as such Lessor or Lessee.

LESSOR AND LESSEE HAVE  CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM 
                                       26
<PAGE>
AND PROVISION  CONTAINED  HEREIN,  AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY  CONSENT  THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND  EFFECTUATE  THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

         IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN  PREPARED FOR  SUBMISSION
         TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
         TO EVALUATE THE  CONDITION OF THE PROPERTY AS TO THE POSSIBLE  PRESENCE
         OF ASBESTOS,  STORAGE TANKS OR HAZARDOUS SUBSTANCES.  NO REPRESENTATION
         OR  RECOMMENDATION  IS  MADE BY THE  AMERICAN  INDUSTRIAL  REAL  ESTATE
         ASSOCIATION  OR BY  THE  REAL  ESTATE  BROKER(S)  OR  THEIR  AGENTS  OR
         EMPLOYEES  AS  TO  THE  LEGAL   SUFFICIENCY,   LEGAL  EFFECT,   OR  TAX
         CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES.  THE
         PARTIES  SHALL RELY  SOLELY  UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
         THE LEGAL AND TAX  CONSEQUENCES OF THIS LEASE. IF THE SUBJECT  PROPERTY
         IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE
         WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

The parties hereto have executed this Lease at the place on the dates  specified
above to their respective signatures.


Executed at Tempe, Arizona             Executed at   
           -------------------------               -----------------------------
on July 1, 1997                         on
  ----------------------------------      --------------------------------------

By LESSOR:                              By LESSEE:

CHAMBERLAIN DEVELOPMENT, L.L.C.         ORTHOLOGIC CORP., a Delaware corporation


By /s/ Jim Chamberlain                  By:    /s/ Allen Dunaway
  ----------------------------------       -------------------------------------
Name Printed: JIM CHAMBERLAIN           Name:  ALLEN DUNAWAY
             -----------------------         -----------------------------------
Title: Member                           Title: CFO
      ------------------------------          ----------------------------------

By /s/ Patsy L. Chamberlain             By:
  ----------------------------------       -------------------------------------
Name Printed: PATSY L. CHAMBERLAIN      Name Printed:
             -----------------------                 ---------------------------
Title: Member                           Title:
      ------------------------------          ----------------------------------
Telephone:                              Telephone:
          --------------------------              ------------------------------
Facsimile:                              Facsimile:
          --------------------------              ------------------------------
                                       27
<PAGE>
                ADDENDUM TO STANDARD INDUSTRIAL LEASE/COMMERCIAL
                            SINGLE-TENANT LEASE - NET

49.    PREMISES.

       The Premises  shall  include the real  property  described in Exhibit "A"
       attached hereto,  containing  approximately 293,056 square feet, together
       with an  industrial  building (the  "Building)  to be erected  thereon by
       Lessor.  The Building shall be erected  substantially  in accordance with
       the plans and  specifications  prepared in conformity with the site plan,
       floor plan and elevations  described in Exhibit "B" attached  hereto (the
       "Approved   Plans  and   Specifications")   (subject  to  possible  minor
       deviations therefrom), as they may be modified as hereinafter provided.

50.    TERM; OPTION TO EXTEND.

       The term of this Lease (the "Term") shall be for ten (10) years (plus the
       partial month at the beginning of the Term if the Term  Commencement Date
       is a day other than the first day of a calendar month), unless this Lease
       is sooner terminated as hereinafter provided.  The Term shall commence on
       the date  the  Improvements  are  deemed  completed  in  accordance  with
       Paragraph  52  (the  "Term  Commencement   Date").   Notwithstanding  the
       foregoing, if Lessee takes possession of or begins to use the Premises or
       any part thereof prior to the Term Commencement Date (as defined herein),
       the Term of this Lease shall commence on the date such  possession or use
       begins.  Upon the  commencement  of the Term,  Lessor  and  Lessee  shall
       execute an amendment to this Lease specifying the  commencement  date and
       expiration date of the Term.

       Subject to compliance with the following provisions,  if this Lease is in
       full force and effect as of the end of the  scheduled  original  ten (10)
       year  Term,  Lessee  shall  have one (1)  option to extend  the Term (the
       "Option") for a period of five (5) years  ("Option  Term") upon the terms
       and provisions set forth in this Lease, except for the adjustment to Base
       Rent set forth  below.  The  Option may only be  exercised  by a written,
       binding notice of exercise  ("Notice") given by Lessee to Lessor at least
       six (6) months prior to the end of the original Term in  accordance  with
       Paragraph  23. The  Notice  shall not be  effective  or valid if a Breach
       exists when the notice is given or when the Option  Term would  otherwise
       commence, and if this Lease or Lessee's right to possession is terminated
       after a Notice is given,  the  Notice  and the  Option  shall be null and
       void. The Base Rent for the Option Term shall be one hundred  fifteen per
       cent  (115%) of the Base  Rent in  effect  as of the end of the  original
       Term.

51.    CONSTRUCTION OF THE IMPROVEMENTS.

       As soon as  practicably  possible,  Lessor  shall apply for all  building
       permits and other  governmental  permits and approvals  necessary for the
       improvements  described in the  Approved  Plans and  Specifications  (the
       "Improvements").  Thereafter,  Lessor at its sole expense  shall  proceed
       diligently with the  construction  and completion of the  Improvements in
       accordance with the Approved Plans and  Specifications and all applicable
       governmental  permits and approvals and all applicable laws,  ordinances,
       regulations and court 
                                       28
<PAGE>
       orders.  Lessor shall complete the  Improvements  and they shall be ready
       for occupancy by Lessee not later than December 1, 1997, as such date may
       be extended  by Force  Majeure.  As used in this  Lease,  the term "Force
       Majeure"  shall mean war,  fire,  earthquake,  flood,  unavailability  of
       materials and court orders  (provided the court orders do not result from
       the conduct of the party claiming the delay).  Lessor shall notify Lessee
       in writing of any Force Majeure  event within  fifteen (15) days after it
       occurs.

       Lessor hereby  agrees to hold Lessee  harmless from and against any liens
       filed in  connection  with the  Improvements  (other than liens caused by
       Lessee),  including without limitation liens filed in connection with any
       repair  or  reconstruction  of  the  Premises  by  Lessor.  Lessor  shall
       reimburse  Lessee  upon  demand for any costs and  expenses  incurred  in
       connection with any such lien,  including without  limitation  attorneys'
       fees.

       Lessor shall provide the following allowances to Lessee:

       (a)    $1,875,000 for Tenant Improvements.
       (b)    $110,000 for architectural  expenses for Tenant Improvements,  for
              design work of Lessee's Tenant Improvements  architect  reasonably
              approved by Lessor.
       (c)    $140,000  for covered  parking.  
       (d)    $30,000  for an  elevator.  
       (e)    $10,000 for signage. 
       (f)    $75,000 for moving.

       The work  described in Items (a), (c), (d) and (e) will be constructed by
       Sun State  Builders  per its contract  with Lessor,  at cost plus ten per
       cent  (10%),  in  accordance  with plans and  specifications  approved by
       Lessor.  Lessee will deliver such plans and  specifications in sufficient
       time to not delay  construction  and if  Lessee  fails to do so, or makes
       changes  thereto,  the provisions of Paragraph 54 below relating to delay
       will apply thereto.  Any cost in excess of the allowance for an item will
       be paid by Lessee per  Paragraph  54 below.  If an allowance is not fully
       utilized,  the Base Rent will be reduced using the formula for adjustment
       set forth in Paragraph 54 below.  There is no allowance  for art work, as
       that budgeted amount is being used for improvement of the wash area.

       Further,  provided there is then no Breach or Default in existence  under
       this Lease by Lessee, Lessor agrees to provide an allowance of the lesser
       of (a) $15.00 per square foot of the Building  that is not built out with
       the initial Tenant  Improvements or (b) $375,000 (the "Future Allowance")
       for future Tenant  Improvements of the area of the Building that will not
       be initially built out (the "Future Tenant Improvements")  subject to the
       following  provisions:  

       (i)    The Future  Allowance  must be utilized  within three (3) years of
              the  Commencement  Date. To accommodate that  requirement,  Lessee
              must  submit  proposed  plans and  specifications  for the  Future
              Tenant  Improvements  for Landlord's  review and approval at least
              ____ months  prior to the third  anniversary  of the  Commencement
              Date. The Future Tenant Improvements must be generic as reasonably
              determined by Lessor.
       (ii)   As provided  above,  Sun State  Builders will construct the Future
              Tenant Improvements at cost plus ten per cent (10%).
       (iii)  The portion of the Future Allowance utilized for the Future Tenant
              Improvements  will be  amortized  over the New Term of this  Lease
              described in (iv) below with an interest factor of eleven per cent
                                       29
<PAGE>
              (11%),  with such  amortizing  amount to be  included in Base Rent
              upon the  Commencement  Date of the New Term. If the Future Tenant
              Improvements cost more than the Future Allowance,  the excess will
              be paid by Tenant in cash per Paragraph 54.
       (iv)   Upon completion of the Future Tenant  Improvements,  as defined in
              Paragraph  52, the parties will execute an amendment to this Lease
              confirming the date of  completion,  and the Original Term will be
              extended  to end ten (10)  years from such  completion  date ("New
              Term"),  with Base Rent after such completion date increased under
              (iii) above. If Lessee interferes with or delays  completion,  the
              date for completion  shall be advanced by the period of delay, for
              purposes of the New Term and Base Rent adjustment.
       (v)    No  commissions  will be paid with  respect to the New Term or the
              increased Base Rent.

52.    COMPLETION AND DELIVERY.

       The Improvements shall be deemed completed when:

       (a)  All  work  of  construction  has  been  substantially  completed  in
       accordance with the Approved Plans and Specifications,  subject to normal
       minor  so-called  "Punch-list  Items"  (defined below) agreed to after an
       inspection by Lessor and Lessee;

       (b)  The  architect  or  engineer  in  charge  of   construction  of  the
       Improvements  has  prepared,  certified by his signature and delivered to
       Lessor and Lessee a written  statement  certifying that the  Improvements
       have  been   completed  in  accordance   with  the  Approved   Plans  and
       Specifications,   the  working  drawings  and  any  properly   authorized
       construction changes, and certifying the date of such completion; and

       (c) A temporary or permanent  certificate  of occupancy  for the Building
       has been delivered to Lessee.

       Notwithstanding the foregoing,  if issuance of a certificate of occupancy
       is  delayed by reason of  Lessee's  work,  the Term of this  Lease  shall
       commence upon  substantial  completion  of Lessor's  work, as provided in
       subparagraphs  (a) and (b) above,  and the certificate of occupancy shall
       be obtained thereafter upon completion of Lessee's work.

       Lessor  shall  diligently  complete  any  Punch-List  Items  as  soon  as
       reasonably  possible,  and within sixty (60) days after the inspection by
       Lessor and Lessee.  "Punch-List  Items," as used  herein,  shall refer to
       minor, non-structural repairs and/or minor, non-structural replacement of
       work not installed (i) in a workmanlike  manner and/or (ii) in accordance
       with  the  Approved  Plans  and  Specifications.  "Minor,  non-structural
       repairs and replacements" shall mean repairs and replacements that do not
       interfere  with the  occupancy of the Building and Premises or use of the
       Building and Premises for their intended purposes. If Lessor's work shall
       not be completed by the scheduled  completion  date stated above,  Lessor
       shall not be subject to liability for failure to give  possession by such
       date.  Failure to  complete  the work as  aforesaid  shall not affect the
       validity of this Lease nor Lessee's obligations  hereunder,  but the Term
       of this Lease shall not commence until Lessor has completed such work.

53.    LESSEE'S WORK.
                                       30
<PAGE>
       Lessee,  at its own cost and  subject  to all of the terms of this  Lease
       (other  than  the  obligation  to pay  the Net  Rent  and  other  charges
       hereunder prior to the commencement of the Term), may perform work in the
       Building  concurrently  with  Lessor's  work,  to fit  the  Building  for
       Lessee's  occupancy,  provided  Lessee's  work  does not  interfere  with
       Lessor's work; Lessee's work may be performed through Lessor's contractor
       or, if no labor discord  would be caused  thereby,  through  Lessee's own
       contractor.  Lessee shall not allow any liens or encumbrances of any kind
       to be  attached  to or placed  upon the  Premises as a result of Lessee's
       work and in the event such liens or encumbrances  are discovered,  Lessee
       agrees to promptly satisfy and remove same.  Lessee hereby agrees to hold
       Lessor  harmless from and against any liens caused by Lessee,  and Lessee
       shall reimburse Lessor upon demand for any costs and expenses incurred in
       connection with any such lien,  including without  limitation  attorneys'
       fees.

54.    LESSEE REQUESTED CONSTRUCTION CHANGES.

       Lessee may, at any time, by a written  request  signed by one of Lessee's
       Change  Representatives  and delivered or mailed in accordance  with this
       Lease to one of Lessor's Change  Representatives  at Lessor's address for
       notices,  make  any  change  in the  work  within  the  general  scope of
       construction  contemplated  by the  Approved  Plans  and  Specifications,
       including, but not limited to changes:

       (a) in the plans,  specifications or working drawings,  including without
       limitation the Approved Plans and Specifications; provided, however, that
       no such  request  shall  result  in any  major  structural  change to the
       Building  or change the  "footprint"  of the  Building as depicted in the
       Approved Plans and Specifications; or

       (b) in the method or manner of performance of the work.

       Lessee requested  construction changes will be transmitted to Lessor only
       by means of written requests  ("Construction  Change  Requests") given in
       accordance with this section.  "Lessee's Change  Representatives" will be
       those two (2) persons  designated by Lessee to Lessor in writing who will
       be the only  representatives of Lessee authorized to request construction
       changes.  Until such  designation is received by Lessor,  Lessor may send
       requests for construction changes to Lessee's address for notices without
       reference to any Lessee  Change  Representative,  and Lessee may not make
       any Construction Change Requests.

       Upon receipt of any  Construction  Change Request issued pursuant to this
       section,   Lessor  shall  immediately  proceed  in  accordance  with  the
       directions contained in the Requested Construction Change Request. Lessor
       shall have the right to (i)  require  Lessee to pay,  in  addition to any
       other payments due under this lease,  all of the increase in costs caused
       by the change as such changes are  completed or (ii)  increase the annual
       rent  payable  under this  Lease by One  Hundred  Ten and No/100  Dollars
       ($110.00)  for every One  Thousand  and  No/100  Dollars  ($1,000.00)  of
       increases in costs  caused by the change;  provided,  however,  that such
       costs  payable  by  Lessee  for the  Construction  Change  Request  or as
       increased  rent shall be limited to Lessor's  reasonable  costs for labor
       and materials, brokerage commissions,  interest and other carrying costs,
       and  sales  and  excise  taxes   (excluding  any  and  all  overhead  and
       administration costs and any profit margin in excess of ten percent (10%)
       of such costs) resulting from such Construction Change Request.
                                       31
<PAGE>
       If Lessee shall have requested a construction change and Lessor elects to
       increase  the annual  rent,  then within  thirty (30) days after the Term
       Commencement  Date,  Lessor and Lessee shall execute an amendment to this
       lease  setting  forth the rent  payable  under this  Lease,  as  adjusted
       pursuant to this Section.  Lessee shall not be required to pay Lessor any
       increases in rent  pursuant to this Section  until such an amendment  has
       been  executed  or any  arbitration  of the  increase  in rent  has  been
       concluded,  but Lessee shall thereupon  promptly pay any past due rent to
       Lessor.

       Except as provided in this Section,  no order,  statement,  or conduct of
       Lessee's Change Representatives,  or of any manager, inspector, engineer,
       architect,  employee  representative,  or consultant of Lessee,  shall be
       treated as a change order under this Section.

       The time period  specified  above for the completion of the  Improvements
       shall be  extended  by delays  caused by  Construction  Change  Requests.
       Further, at Lessor's option, the Base Rent will commence to be payable at
       the  later of  December  1,  1997 or when  construction  would  have been
       completed  under  Paragraph  52  above  but for the  Construction  Change
       Request.

55.    LESSOR REQUESTED CONSTRUCTION CHANGES.

       Lessor may, at any time, by a written request  ("Lessor Change  Request")
       signed by one of Lessor's Change  Representatives  which expressly refers
       to this  paragraph  and which is delivered or mailed in  accordance  with
       this Lease to Lessee's  Change  Representatives  at Lessee's  address for
       notices,  request  any  reasonable  change in the work within the general
       scope of the  construction  necessary  to  comply  with  law,  to  obtain
       required   governmental   permits  or  approvals,   or  to  complete  the
       Improvements  in accordance  with the Approved Plans and  Specifications,
       including changes:

       a) in the plans, specifications or working drawings,  including,  without
       limitation the Approved Plans and Specifications; provided, however, that
       no such  request  shall  result  in any  major  structural  change to the
       Building  or change the  "footprint"  of the  Building as depicted in the
       Approved Plans and Specifications; and

       b) in the  method  or  manner  of  performance  of the  work  or  type of
       materials provided,  however that no such change will degrade the quality
       of the Building and provided,  further that no change in materials may be
       requested  unless the change is  necessary  because of any  inability  to
       obtain the material or the new  materials is necessary to comply with law
       or to obtain required governmental permits or approvals.

       "Lessor's  Change   Representatives"   will  be  those  two  (2)  persons
       designated  by  Lessor  to  Lessee  in  writing  who  will  be  the  only
       representatives  of Lessor  authorized  to make Lessor  Change  Requests.
       Until  such   designation   is  received  by  Lessee,   Lessee  may  send
       Construction  Change  Requests  to Lessor's  address for notices  without
       reference to any Lessor  Change  Representative,  and Lessor may not make
       any Lessor Change Requests. Lessor Change Requests will be transmitted to
       Lessee by means of a written  request  describing  in full the  requested
       change,  plus the reasons,  effects and results of the change as compared
       to the original and/or existing  working  drawings or plans pertaining to
       the requested  change.  The Lessor Change Request will include  drawings,
       documents,  specifications,  and  all  pertinent  data  relating  to  the
       requested change.
                                       32
<PAGE>
       Upon receipt of any Lessor Change Request, Lessee shall immediately begin
       analysis of the Lessor Change Request.  Lessee will unilaterally have the
       option to:

       (a) Accept the Lessor  Change  Request by issuing a  Construction  Change
       Request referencing the specific Lessor Change Request.

       (b) Enter into  fact-finding  or negotiations  with Lessor  pertaining to
       Lessor Change Request.

       (c) Reject the Lessor Change Request in writing and require the Lessor to
       perform the work in accordance with the Approved Plans and Specifications
       at no delay to Lessee in Building occupancy.

       Should Lessee not act within ten (10)  business  days after  submittal of
       any Lessor Change Request,  the requested change will be considered to be
       rejected by Lessee.  Under no condition will the Lessor begin work on any
       Lessor  Change   Request   until  after  receipt  of  a  fully   executed
       Construction Change Request from Lessee.

       Except as provided in this  Section,  no order,  statement  or conduct of
       Lessor's Change Representatives or of any manager,  inspector,  engineer,
       architect or other employee representative, or consultant of Lessor shall
       be treated as a change request under this Section.

56.    RENTAL ADJUSTMENTS.

       Notwithstanding anything to the contrary contained in the Lease, the Base
       Rent  commencing  with the  sixty-first  (61st)  month of the term of the
       Lease  shall be  increased  to 115% of the Base  Rent in the  immediately
       preceding  month.  For example,  if there are no changes in the Base Rent
       pursuant to Paragraph 54 or otherwise such that the Base Rent in the 60th
       month is $78,145.00,  the Base Rent for the 61st month shall be increased
       to: $89,866.00.  Applicable  transaction privilege taxes will be added to
       all rental amounts.

57.    ADDITIONAL MAINTENANCE REQUIREMENTS.

       Lessee  shall  maintain  a  contract  with a fire  sprinkler  maintenance
       company that provides quarterly inspections of the fire sprinklers on the
       Premises.  Lessee shall  provide a copy of the contract and copies of the
       quarterly inspection reports to Lessor.

       Lessee shall  maintain a contract  with a roof  maintenance  company that
       provides  for  two  (2)  yearly  inspections,  the  sealing  of all  roof
       protrusions,  and any necessary  repairs,  including  without  limitation
       caulking or adhesive  work.  Lessee shall provide  copies of the contract
       and copies of all inspection reports to Lessor.

       Lessee shall keep all roof drains and  scuppers  free of debris and shall
       promptly notify the roof warranty company and/or roof maintenance company
       of all additional protrusions made by Lessee.
                                       33
<PAGE>
58.    PROPERTY TAXES.

       Lessee  will  receive  a bill in  October  of each  year  for the  year's
       property taxes to be paid to Lessor in two  installments.  This bill will
       include transaction  privilege taxes on the property taxes as required by
       the State and City.

       Lessor shall have the option to appeal tax  valuations  each year. In the
       event the tax appeal service obtains a reduction in the assessor's  value
       as originally  published for that year, Lessee shall reimburse Lessor the
       fee paid to the tax  service.  If Lessor  does not file an appeal for any
       year  Lessee may appeal such taxes thru a tax appeal  service  reasonably
       approved by Lessor who shall follow reasonable  instructions of Lessor to
       avoid  impairing  the long term tax position of the  Premises.  All costs
       shall be paid by Lessee and Lessee  shall  receive  all  benefits of such
       appeals applicable to the Term.

       EXAMPLE:

       Property tax before appeal:              $10,000.00

       Property tax after appeal:                $9,000.00
                                                 ---------

       Tax savings:                              $1,000.00

       Tax service fee:                            $350.00
                                                   -------

       Total tax savings for Lessee:               $650.00

59.    BROKERS' COMMISSIONS.

       Section 15 of the Lease is hereby stricken in its entirety. Lessor agrees
       to  pay a  brokers'  commission  to Kit  Tiedemann,  CB  Commercial  (the
       "Broker") for brokerage  services in connection  with this Lease pursuant
       to the terms of a separate  agreement  between Lessor and said Broker and
       Lessor's  indemnity  below shall apply thereto.  Lessor and Lessee hereby
       represent  and warrant to one another  that,  except for the Broker named
       above, neither has dealt with any person in such a manner to give rise to
       a valid claim for a brokerage commission in connection with this Lease or
       in connection with the foregoing option to purchase.  If any person other
       than the Broker named above shall assert a claim to a fee,  commission or
       other compensation on account of alleged employment as a broker,  finder,
       or  intermediary in connection  with this  transaction,  the party hereto
       under  whom  the  broker,  finder,  or  intermediary  is  claiming  shall
       indemnify  and hold  harmless  the other party  against and from any such
       claim and all costs, expenses and liabilities incurred in connection with
       such claim or any action or proceeding  brought thereon  (including,  but
       without limitation, counsel and witness fees and court costs in defending
       against such claim).

60.    TAX ABATEMENT.

       Lessee  intends to apply for tax  abatement  from the City of Tempe under
       A.R.S. ss.42-1901 et seq. Lessor 
                                       34
<PAGE>
       will reasonably  cooperate with Lessee in Lessee applying for and seeking
       such tax  abatement as Lessor's  sole  obligation  with respect  thereto.
       Lessor makes no representations or warranties concerning the availability
       or effect of tax abatement.

61.    LESSOR INDEMNITY.

       Lessor  shall  indemnify,  protect,  defend and hold  Lessee,  its agent,
       employees  and  lenders,  if any,  harmless  from and against any and all
       damages,  liabilities,  judgments,  costs,  liens,  expenses,  penalties,
       permits and attorneys' and consultants'  fees arising out of or involving
       any  Hazardous  Substance or storage tank brought onto the Premises by or
       for Lessor or under  Lessor's  control or existing on the  Premises as of
       the  earlier of the date Lessor  tenders  possession  of the  Premises to
       Lessee or the date  Lessee  begins  work  under  Paragraph  53.  Lessor's
       obligation under this paragraph shall include, but not be limited to, the
       effects  of any  contamination  or  injury  to  person,  property  or the
       environment  created or suffered by Lessor and the cost of investigation,
       (including  consultants'  and  attorneys'  fees  in  testing),   removal,
       remediation,   restoration   and/or   abatement   thereof,   or  of   any
       contamination  therein  involved,  and shall  survive the  expiration  or
       earlier  termination  of this  Lease.  No  termination,  cancellation  or
       release  agreement entered into by Lessee and Lessor shall release Lessor
       from its obligations under this Lease with respect to Hazardous Substance
       or storage tanks,  unless  specifically so agreed by Lessee in writing at
       the  time  of  such  agreement.  Lessor's  indemnity  shall  not  include
       consequential damages, including but not limited to damages for injury to
       reputation,  reduction of leasehold  value except to the extent of actual
       loss of use thereof,  or future business or similar matters,  or punitive
       damages.  Further,  Lessor shall have no  obligation  to take remedial or
       corrective  action  unless and to the extent  such  action is required of
       Lessor or Lessee under Applicable Laws.

62.    PROPERTY DOCUMENTS.

       The parties agree and acknowledge that Lessor does not own the fee of the
       Premises.  Rather, the fee to the Premises is owned by Salt River Project
       Agricultural  Improvement and Power District, an agricultural improvement
       district  organized  under the laws of the State of Arizona  (ASRP@)  who
       ground  leases the  Premises  and other  property to Papago Park  Center,
       Inc., an Arizona corporation  (APapago@),  an affiliate of SRP, under and
       pursuant  to that  Ground  Lease  dated  March 6, 1989,  as  periodically
       amended (the AGround Lease@).  In turn, Papago has subleased the Premises
       to  Lessor  pursuant  to that  Ground  Sublease  dated  June 27,  1997 as
       periodically amended (the ASublease@), which is subordinate to the Ground
       Lease.  Further,  the  Premises  and other  property  are subject to that
       Declaration of Covenants, Conditions and Restrictions dated July 18, 1990
       and recorded  July 27, 1990 as Document No.  90-336258,  as  periodically
       amended  thereafter  and the Design  Guidelines as  periodically  amended
       (collectively, the ADeclaration@).

       Lessor has  provided a copy of a  Commitment  for Title  Insurance  dated
       March 24, 1997 and prepared by Security Title Agency (the ATitle Report@)
       to Lessee,  disclosing  various other title exceptions  (collectively the
       ATitle  Exceptions@).  During  the  development  of the  Premises  and/or
       construction  of the  Building  and/or  otherwise  during the term of the
       Lease, Lessor may need to grant or execute other easements,  declarations
       or other  restrictions  that will  encumber the Premises as  periodically
       amended (the  AMiscellaneous  Exceptions@),  including but not limited to
       that Declaration of Reciprocal Easements and Maintenance  Agreement dated
       June 12, 1997 and recorded August 22, 1997 as Document No.
                                       35
<PAGE>
       97-0579636 as  periodically  amended (the AREA@).  Lessee approves of the
       REA and approves of all such other Miscellaneous Exceptions to be created
       in the future expressly provided the same do not materially and adversely
       affect Lessee's use of the Premises. The foregoing shall be automatic but
       within ten (10) days of request, Lessee will acknowledge that it consents
       to and is bound by any such Miscellaneous Exceptions as provided above.

       In addition, Lessor has entered or will enter into that Agreement for the
       Conveyance of  Improvements  dated July 9, 1997 with the City of Tempe as
       periodically  amended  ("City  Agreement")  pursuant to which Lessor will
       convey the improvements  included in the Premises to the City and receive
       back a leasehold  interest  therein  pursuant to the  Improvements  Lease
       attached to the City Agreement as periodically amended ("City Lease").

       Without  limiting  any other  provision of this Lease,  Lessee  expressly
       agrees and acknowledges  that during the term of the Lease,  Lessee shall
       fully and timely  comply with all terms and  provisions  of Sections 2.05
       (Governmental Approvals), 2.09.01 (Compliance with Environmental Laws), 5
       (Permitted Uses), 7.01  (Construction  Permitted),  7.02 (Payment Bonds),
       7.03  (Performance   Bonds),   7.04  (Standard  of  Construction),   7.05
       (Mechanics' Liens), 8.01 (Maintenance), 8.02 (Right to Make Alterations),
       9.03,  second  sentence  (Removal),  9.04 (Removal of Trade  Fixtures and
       Personal Property), 12 (Insurance),  22.03 (Estoppel  Certificates),  and
       22.05  (Lessor's  Right to Enter,  Inspect and Test) of the Ground  Lease
       (and any amendments  thereto which do not materially and adversely affect
       Lessee or which are consented to by Lessee under Paragraph 36 above), and
       Section 4.1  ("Additional  Rent" and  "Impositions"  Defined),  Article 5
       (Insurance),  Section 6.1 (Surrender - Removable  Property),  Section 6.2
       (Waste)  Article  8  (Use  and   Maintenance  of  Premises),   Article  9
       (Compliance),  Article 10  (Construction  of Buildings  and  Landscaping;
       Other Improvements), Article 11 (Impairment of Landlord's Title), Article
       12  (Inspection),   Article  22  (Estoppel   Certificates),   Article  24
       (Adjoining  Excavation)  and Article 26 (Trade  Fixtures,  Machinery  and
       Equipment) of the Ground Sublease (and any amendments thereto that do not
       materially and adversely  affect Lessee,  as well as any others consented
       to by  Lessee  under  Paragraph  36)) to the  extent  they  relate to the
       Premises and the Term (and any other period of Lessee's  possession)  and
       expressly  subject  to and  excluding  Lessor's  construction  and  other
       obligations  set forth in this Lease.  Lessee shall also fully and timely
       comply with all terms and  provisions of the  following  documents to the
       extent they apply to Lessee as the party in  possession  of the  Premises
       (but  not to the  extent  they  apply  to any  property  other  than  the
       Premises):  Declaration  (and any amendments  thereto as permitted  under
       Section  10.1 of the  Sublease,  as well as any  others  consented  to by
       Lessee under  Paragraph 36 above),  Title  Exceptions (and any amendments
       thereto that do not  materially and adversely  affect Lessee,  as well as
       any others  consented  to by Lessee  under  Paragraph  36),  REA (and any
       amendments thereto that do not materially and adversely affect Lessee, as
       well  as  any  others   consented  to  by  Lessee  under  Paragraph  36),
       Miscellaneous   Exceptions  (and  any  amendments  thereto  that  do  not
       materially and adversely  affect Lessee,  as well as any others consented
       to by Lessee under  Paragraph  36), City  Agreement  (and any  amendments
       thereto  approved by Lessee under  Paragraph  36) and City Lease (and any
       amendments  thereto approved by Lessee under Paragraph 36)  (collectively
       the  obligations  of  Lessee  under  the prior  sentence  and under  this
       sentence are the AObligations@, as if they were set forth in this Lease).
       The Obligations  shall not include any obligations  regarding the payment
       of Base Rent under the Ground Lease or Sublease.  Lessee shall  indemnify
       and  hold  Lessor  harmless  from  and  against  any and  all  liability,
       responsibility,  obligations, costs, damages, expenses or attorneys' fees
       incurred or  sustained  by Lessor as a result of the failure of Lessee to
       timely and fully perform the Obligations under this Paragraph 62.
                                       36
<PAGE>
       Without limiting the generality of the foregoing, Lessee shall pay and be
       solely   responsible  for  (and  the   Obligations   shall  include)  all
       assessments,  charges,  deposits,  dues or  other  amounts  payable  with
       respect to the  Premises,  and relating to periods  occurring  within the
       Term, under the Declaration and the REA, as amended as permitted above.

       Lessor represents and warrants that it has constructed and covenants that
       it will  construct  all  improvements  which are Lessor's  responsibility
       under this Lease in full  compliance with the  Obligations,  and that the
       Premises  (including such  improvements)  will be in full compliance with
       the  Obligations  upon tender of  possession  of the  Premises to Lessee.
       Lessor will not agree to or consent to any  amendment of the  Obligations
       if and to the extent  the same  would  materially  and  adversely  affect
       Lessee's use of the  Premises or its right under this Lease.  Lessor will
       indemnify and hold Lessee  harmless from any and all  liability,  claims,
       expenses and attorneys'  fees incurred by Lessee if and to the extent the
       representations  and warranties in the prior two sentences are materially
       incorrect  or if Lessor  materially  fails to perform the  covenants  set
       forth therein.

63. SUBORDINATION OF LESSOR'S LIEN ON PERSONAL PROPERTY.

       At  the  request  of  Lessee,   Lessor  will  subordinate  its  statutory
       Landlord's lien in Lessee's personal property in the Premises to purchase
       money financing  (including  equipment leases) for such specific personal
       property in an amount not exceeding the actual  purchase  price (or lease
       amount)   thereof  and/or  to  security  for  bank  or  other   financial
       institution  lines of credit  obtained in the ordinary course of Lessee's
       business. Such subordination shall utilize a reasonable form of agreement
       reasonably approved by Lessor.
                                       37