SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                                   (Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended March 31, 1997

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                         Commission File Number O-25030

                       PLAY CO. TOYS & ENTERTAINMENT CORP.
             (Exact name of registrant as specified in its charter)

 Delaware                                  95-3024222
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
Incorporation or organization)                                             

                550 Rancheros Drive, San Marcos, California 92069
                    (Address of principal executive offices)

                                 (760) 471-4505
              (Registrant's telephone number, including area code)

               Securities registered pursuant to Section 12(b) of
                                    the Act:

Title of each class                  Name of each exchange on which registered
                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                                (Title of Class)

                         Common Stock Purchase Warrants
                                (Title of Class)

         Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such  shorter  period that  registrant  was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No [ ]

         Check if no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B is contained in this form,  and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB [ X].

         The Registrant's revenues for its fiscal year ended March 31, 1997 were
$19,624,276.

         The  aggregate  market  value of the  voting  stock  on June  10,  1997
(consisting  of Common Stock,  par value $.01 per share) held by  non-affiliates
was  approximately  $5,529,434,  based upon the average bid and asked prices for
such Common Stock on said date ($1.125),  as reported by a market maker. On such
date, there were 12,250,556 shares of Registrant's Common Stock outstanding.



<PAGE>
                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

History

         Play Co. Toys &  Entertainment  Corp.  ("the  Company")  was founded in
1974,  at which  time it  operated  one store  under  the name Play Co.  Toys in
Escondido,  California.  The Company now operates  twenty-one1 stores throughout
Southern California in the Los Angeles,  Orange, San Diego,  Riverside,  and San
Bernadino  Counties  and  expects to operate  twenty-eight  stores by the end of
fiscal 1999. Prior to its corporate restructuring in 1996 and its acquisition of
Toys International  ("Toys") in January 1997, the Company,  which was a retailer
of children's and adult toys,  games, and hobby products,  operated stores which
averaged  approximately  10,000  square feet in size and were  located in highly
trafficked  strip  shopping  centers.  These stores  ("Playco  Originals")  sell
traditional and promotional toys.

         In the beginning of 1996, the Company redefined its corporate goals and
philosophy,  changing  its  focus  from  the  sale  of  solely  promotional  and
traditional  toys to the sale of educational,  new electronic  interactive,  and
specialty  and  collectible  toys and items.  In light of its new focus,  during
fiscal 1997, the Company redesigned three of its Playco Originals,  opened a new
flagship store in Santa Clarita,  and acquired three Toys stores. In conformance
with its new goals,  the  Company's new stores ("the  Contemporaries")  shall be
smaller  (3,500 to 5,200 square feet in size) and shall  operate in  "exclusive"
highly  trafficked  malls rather than in strip shopping  centers.  The Company's
Toys stores and  Contemporaries  are expected to produce  higher  gross  profits
since,  in addition to  carrying  their  historical  inventory  of lower  margin
promotional  toys, they shall sell educational and electronic  interactive games
and toys, specialty products, and collector's toys, which generally carry higher
gross margins.

Acquisition of Toys International

         In January 1997, the Company acquired  substantially  all of the assets
of Toys. The acquisition,  in principal,  included the assignment to the Company
of the three store leases held by Toys and all of Toys'  inventory.  In order to
ensure a smooth  transition  in  operations,  the  President of Toys,  Mr. Gayle
Hoepner,  continued  on as a  consultant  to the  Company for a period of ninety
days.  The  funding  for the  purchase  of the stores was  obtained  through the
exercise  by  Europe  America  Capital  Corporation  ("EACC")  of its  option to
purchase  1,200,000  shares of the  Company's  Series E Preferred  Stock.  These
shares  were  issued to an  assignee  of EACC.  The  funding  obtained  from the
exercise was $1,200,000.

Recent Developments

         On  February  1, 1996,  the Company  entered  into a Loan and  Security
Agreement ("the Loan Agreement") with Congress Financial  Corporation  (Western)
("Congress")  to replace its then existing  credit line with Imperial  Bank. The
Loan  Agreement  provides the Company with a secured line of credit of up to 60%
of the value of all of its inventory,  not to exceed  $7,000,000  ("the Congress
Financing").  The Congress  Financing is secured by all of the Company's  assets
and a $2,000,000 letter of credit ("L/C") provided by EACC, an affiliate of Ilan
Arbel, a former

--------
1 This  number and all  numbers  hereafter  which  pertain  to stores  currently
operated by the Company,  except where otherwise indicated,  include four stores
which the Company has  darkened  temporarily  until the  November  and  December
holiday season.



<PAGE>
     Director of the Company.  The  Congress  Financing  is also  guaranteed  by
United   Textiles  &  Toys  Corp.   ("UTTC"),   formerly   Mister  Jay  Fashions
International, Inc., the majority stockholder of the Company.

     In  connection  with the  issuance of the L/C,  on  February  2, 1996,  the
Company granted to EACC options (i) to purchase an aggregate of 1,250,000 shares
of Common  Stock at a  purchase  price of 25% of the  closing  bid price for the
Common Stock on the last  business  day prior to  exercise,  for a period of six
months from issuance (this option expired unexercised);  and (ii) to purchase an
aggregate of 20,000,000  shares of the Company's  Series E Preferred  Stock.  To
date,  EACC has  exercised  its option and  purchased  an aggregate of 2,862,070
shares of the Series E Preferred Stock of which  2,500,570  shares are presently
outstanding  after the conversion of an aggregate of 361,500 of such shares into
Common Stock. In addition,  in March 1997, EACC issued an additional  $1,000,000
L/C to  Congress in order for the Company to obtain  additional  financing  from
Congress.  In April and May 1997,  Europe America Capital  Foundation  ("EACF"),
European  Ventures Corp.  ("EVC"),  and  Vermongenstreuhand  G,H,M,B provided an
additional  aggregate  amount of $700,000  to the Company as an advance  against
equity.

     In  April  1997,  the  Company  signed  a  lease  to  open a new  store  in
Clairemont,  California.  This  facility  should  open  during the 3rd  calendar
quarter of 1997.  Since March 1997,  the Company  also has closed,  temporarily,
until the November and December holiday season,  four stores.  These stores were
closed  because they did not  generate  revenues as  anticipated;  they were not
permanently  closed,  however,  because the leases  therefor are of considerable
duration and cannot be broken  without  significant  potential  hardship  (legal
and/or  financial)  to the  Company.  The  Company  is  searching  for  suitable
replacement  tenants to assume the Company's lease obligations for these stores.
See "Item 3. Legal Proceedings."

     In addition,  the Company is now converting  its Rialto  location to an off
price clearance center. The Company feels that this under-performing location is
demographically  better suited for this concept.  Fewer  markdowns  should,  and
will,  be taken at the  other  locations  as  slower  moving  inventory  will be
transferred to the Rialto location for faster turnover.

Merchandising Strategy; Refocusing of Corporate Direction

     Traditionally,  the  Company's  merchandising  strategy  was  to  offer  an
alternative,  less  intimidating  environment than that provided by Toys R Us, a
competitor of the Company. In particular, the Company stocks all of its items at
eye level (not vertically,  as other stores often do), provides clerks to assist
customers,  and  implements a policy of treating its customers with courtesy and
respect.  The Company has augmented its product lines in its  Contemporaries and
will  continue to provide  these  quality  services to its patrons at all of its
stores. As discussed herein, in the beginning of 1996, management of the Company
realized the inherent  value in, and thus the demand for, a retail  outlet which
provides a combination  of (i)  educational,  new  electronic  interactive,  and
specialty and collectible  toys and items;  and (ii) traditional and promotional
toys.  Accordingly,  it  refocused  its  corporate  objectives  and  changed its
business plan to emphasize the marketing and sale of such goods.  To achieve its
goals,  the Company  developed a new store  design and  marketing  format  which
provides an interactive  setting together with a retail  operation.  This format
and design will form the  foundation  for the  Company's  future  direction  and
growth plans,  thereby  allowing the Company to meet the demand mentioned above.
The Company has thus far (i)  implemented  its new design in the three stores it
acquired  from  Toys  and  in  the  three  Playco   Originals  it  remodeled  as
Contemporaries  in fiscal year 1997; and (ii) opened its first  Contemporary  in
Santa Clarita, California. During fiscal year




<PAGE>
     1998, it intends (i) to open three Contemporaries,  in upscale malls rather
than in strip centers where most of the Company's  Playco Originals are located;
and (ii) to redesign five Playco Originals as  Contemporaries,  thereby ensuring
that the Company's redirection and new business plan are implemented in at least
fifteen  of its then  twenty-four  stores.  In the  years to come,  the  Company
expects to continue to transform its Playco Originals to  Contemporaries  and to
review each  individual  store's  sales  history and  prospects on an individual
basis to  decide on the  appropriate  product  mix.  The  Company  views its new
corporate  goals with excitement and shall continue to refocus its product lines
and strategies for the future. The majority of its stores, the Playco Originals,
will  continue to offer a broad  in-stock  selection of products at  competitive
prices and with an emphasis on customer  service.  The Company  generally prices
its promotional  items to be competitive  with Toys R Us, using Toys R Us prices
as a  guideline.  While the  Company  does not stock  the  depth or  breadth  of
selection  of toys as Toys R Us, for its  Playco  Originals,  it does  strive to
stock all basic  categories of toys and all television  promotional  items.  The
Company  also  offers a special  order  program  for many items and offers  this
service free to its customers. Financing for the Company's operations, including
(i) the acquisition of substantially all of the assets of Toys; (ii) the opening
of the Santa Clarita store;  (iii) the remodeling of the three Playco Originals;
and (iv) the  financing of the Company's  losses,  has come  primarily  from the
proceeds of EACC's  exercise of its option to purchase  shares of the  Company's
Series E Class I Preferred Stock and from the additional financing received from
Congress based upon an additional  $1,000,000 L/C received from EACC. During the
limited  time that has passed  since the Toys  acquisition  and the  opening and
remodeling of the various stores aforementioned, the Company has shown increased
same store sales and higher profit margins in these stores.  Thus  management is
optimistic  that its  attempt  in fiscal  year 1998 to open three new stores and
renovate/redesign  five existing stores will succeed. See  "Financing."Wholesale
Operations  Since  June  1994,  the  Company  has sold toy and hobby  items on a
wholesale  basis to military bases located in Southern  California.  The Company
presently  sells  toys and hobby  items on a  wholesale  basis to the  following
military  bases:  (i) Camp Pendleton  Marine Corp.  Recruit Depot;  (ii) Miramar
Naval Base;  (iii)  Marine Base,  Barstow,  California;  (iv) Marine  Corp.  Air
Station, El Toro, California; (v) Marine Corp. Air Station at Yuma, Arizona; and
(vi) 29 Palms  Marine Base in 29 Palms,  California.  With four of six  military
bases to which it sells,  the  Company has  agreements  which  provide  that the
Company  shall  sell to such  purchasers,  on a  wholesale  basis,  those  items
requested  and shall  give  credit  for those  items  which are not sold and are
returned  to the  Company.  Though  the  profit  margin  obtained  from  selling
wholesale is low, the costs incurred in selling  wholesale are minimal since the
Company already has inventory,  trucks, and warehouse space. The Company intends
to attempt to expand its sales  through  additional  wholesale  sales of toy and
hobby items to additional  military  bases,  although  there can be no assurance
that it will be  successful  in selling  such items on a  wholesale  basis or in
expanding  its  wholesale  sales  from  present  levels.  The  plan to  increase
wholesale  sales is solely intended to augment the Company's  retail  operation.
Wholesale sales to military bases totaled approximately  $619,000 or 3% of sales
for the year ended March 31, 1997 as  compared to  $911,400,  or 4% of sales for
the year ended March 31, 1996.Products




<PAGE>
     The  Company  carries  most major  brand name toy and hobby  products.  The
Playco  Originals sell  children's and adult toys,  games,  bicycles,  and other
wheel goods, sporting goods, puzzles, Nintendo, and Sega electronic game systems
and  cartridges  for such game systems,  cassettes,  and books.  They offer over
15,000 items for sale. The  Contemporaries  and two of the Toys stores also sell
some of these toys and in addition, sell educational toys, Beanie Babies, Steiff
and North  America  Bears,  Small World toys,  LBG trains,  CD-ROMs,  electronic
software  games,  and  Learning  Curve  products.  The third Toys  store,  Tutti
Animali, is a unique store which sells only stuffed animals.

Inventory

     Until  recently,  the  Company's  stores were  serviced  from two  adjacent
distribution facilities (one 43,000 square feet in size, the other 18,000 square
feet in size)  encompassing  an aggregate of  approximately  61,000 square feet.
However,  as of April 15, 1997, the Company  returned  12,800 feet of the 18,000
square foot warehouse space to the landlord.  The Company  continues to purchase
approximately  95% of its products  directly  from  manufacturers  and ships the
products to its stores from its distribution  center.  Inventory and shipment of
products continues to be monitored by a computerized  point-of-sale system which
was installed  during fiscal years 1990 and 1991 at an  approximate  cost to the
Company of $1,000,000.  The  point-of-sale  system is a sophisticated  scanning,
inventory  control,  purchasing,  and  warehouse  system which allows each store
manager to monitor sales activity and inventory at each store. It monitors sales
at all store  locations  and  automatically  notifies the warehouse and shipping
department  each time stock of a particular  item is low or out,  depending upon
the item and the instructions programmed into it. The Company's stores generally
are  restocked  with  products on a weekly basis,  although  certain  stores and
certain items may be restocked at different intervals.  In addition,  restocking
of  products  is  generally  increased  during the fourth  calendar,  during the
November and December  holiday season:  some stores and some items are restocked
on a daily basis during such period.

     All shipments to stores are made by Company owned or leased vehicles.  Each
store employs a store  manager,  an assistant  manager,  and between  fifteen to
twenty-five  full  time and part time  employees.  Each of the  Company's  store
managers  reports to the  Company's  Director  of  Operations  and  Director  of
Merchandising who in turn report directly to the Company's Executive Officers.

Seasonality

     The Company's  business is highly seasonal,  with the majority of its sales
and  profits  being  generated  in the  fourth  quarter  of the  calendar  year,
particularly  during the November and December  holiday  season.  Even after the
introduction of educational  products described herein, the Company  anticipates
that the  majority  of its sales will  continue  to be  generated  in the fourth
quarter of the calendar year,  particularly in November and December.  While the
Company  anticipates that sales in the remaining three quarters will increase as
a result of its refocus and the opening of three Contemporaries,  the remodeling
of three Playco Originals,  and the acquisition of three Toys stores,  there can
nonetheless be no assurance that the Company is correct in such opinion.

Research and Development

     In determining the appropriate  site at which to open new store  locations,
the Company utilizes a site evaluation model based upon demographics.  The model
was originally developed in




<PAGE>
     1990 by National Decision Systems, Encinitas,  California, at a cost to the
Company of  approximately  $10,000.  It is based upon  approximately  400 census
variables  which were  originally  derived from the  variables  surrounding  the
Company's  then  existing  eighteen  stores.  Whenever the Company  contemplates
opening  a Playco  Original  or a  Contemporary,  it  compares  the  demographic
variables of the contemplated  location against those of its model.  (This model
is not used for Toys stores.)  Positive  factors and negative  factors are given
certain ratings,  and a score is derived from such ratings.  The strength of the
score guides  management of the Company as to whether or not to proceed with the
contemplated store location.

     Demographic  variables  which are  examined  by the site  evaluation  model
include  income  level,  number of children  per  household,  age groups of such
children,  number of wage earners per household,  proximity of other toy stores,
and the percentage of home ownership  within a one, three,  and five mile radius
of the contemplated store location.

     The Company continues its practice of typically not opening stores within a
three  mile  radius  of a Toys R Us store.  Management's  policy is based on its
understanding of Toys R Us' policy of not opening a new Toys R Us store within a
ten mile radius of an existing  Toys R Us location.  Such policy  generally  has
allowed the Company to open new stores in between Toys R Us locations,  with the
assurance  that a new Toys R Us store,  in all  likelihood,  would not be opened
within a three mile radius of any Playco stores.  This policy is consistent with
the  parameters  of its site  evaluation  model,  and  management  believes that
reliance on the model  significantly  increases the probability that a new store
will be  successful.  There can be no  assurance,  however,  that  management is
correct in such opinion.

Trademarks

     In 1976,  the Company  received a federal  registration  for the  trademark
"Play Co. Toys," which  trademark is utilized by the Company in connection  with
its marketing and sales of toy and hobby items. In addition, the Company applied
for, and was granted in 1994, a federal registration for the trademark "TKO."

Financing

     As mentioned  previously,  on February 1, 1996, the Company  entered into a
Loan  Agreement with Congress to replace its credit line with Imperial Bank. The
Loan  Agreement  provides  the Company with a line of credit of up to 60% of the
value of all of its  inventory,  not to exceed  $7,000,000.  This  financing  is
secured by all of the  Company's  assets and a $2,000,000  L/C provided by EACC.
Additionally,  the  Congress  Financing is  guaranteed  by UTTC,  the  Company's
majority stockholder.

     In  connection  with the  issuance of the L/C,  on  February  2, 1996,  the
Company  granted to EACC options (i) to purchase up to an aggregate of 1,250,000
shares of Common  Stock at a purchase  price of 25% of the closing bid price for
the Common Stock on the last business day prior to exercise, for a period of six
months from issuance (this option expired unexercised);  and (ii) to purchase up
to an aggregate of 20,000,000 shares of the Company's Series E Preferred Stock.

     The opening of Contemporaries,  the remodeling of Playco Originals, and the
acquisition of Toys was financed  primarily by EACC's  exercise of its option to
purchase shares of the Series E Preferred Stock. Since February,  1996, EACC has
invested  $6,000,000  in the Company,  inclusive  of two L/C's in the  aggregate
amount of  $3,000,000,  which it issued to  Congress  in order to  increase  the
usable portion of the Company's credit lines, and $3,000,000 as a result of




<PAGE>
     its exercise of options to purchase the Company's Series E Preferred Stock.
In April and May 1997,  EACF, EVC, and  Vermongenstreuhand  G,H,M,B  provided an
additional  aggregate  amount of $700,000  to the Company as an advance  against
equity.

     The Company relies on credit terms from  manufacturers  to purchase  nearly
all of its inventory. While 90% of accounts payable to vendors are current as of
the date of this  document,  there can be no assurance  that the Company will be
able to keep such payables current in the future.  Such credit arrangements vary
for reasons both within and outside the control of the Company.

Competition

     The toy and  hobby  products  market  is  highly  competitive.  Though  the
Company's  Contemporary  and Toys  stores,  unlike  other  toy  stores,  offer a
combination   of   promotional,   traditional,   educational,   new   electronic
interactive,  specialty,  and collectible toys and items, the Company remains in
direct competition with local, regional,  and national toy retailers,  including
Toys R Us (considered to be the dominant toy retailer in the United States) with
respect to its traditional toy items.  In order to combat the  competition,  the
Company's  Contemporary  and Toys stores  offer  specialty  items such as Beanie
Babies and Steiff and North American bears,  etc. Since the Company's prices are
in part based upon Toys R Us' prices, the aggressive pricing policy of Toys R Us
has  resulted  in the  Company's  lowering  its  prices on many  items,  thereby
reducing the Company's profits.

     The toy and hobby products  market is particularly  characterized  by large
retailers and discounters with intensive advertising and marketing campaigns and
with deeply discounted  pricing of such products.  The Company faces competition
from hobby vendors that market through direct sales forces and from distributors
that rely on mail order and  telemarketing.  The  Company  competes as to price,
personnel,  service, speed of delivery, and breadth of product line. Many of the
Company's  competitors have greater  financial and marketing  resources than the
Company. Both Toys R Us and Kay Bee dominate the retail toy industry in Southern
California.  Although both the Company and Toys R Us have been in the retail toy
industry in Southern  California for  approximately  twenty years, Toys R Us has
increased its market share at a significantly  faster rate than the Company. The
domination of Toys R Us and Kay Bee, the weak Southern California  economy,  and
the Company's  policy of not opening Playco Originals and  Contemporaries  store
within  three  miles of an existing  Toys R Us store may  inhibit the  Company's
ability to compete  effectively  in the retail toy industry or to establish  new
stores in favorable locations.

     The Company feels that the unfulfilled  need in the marketplace is a retail
outlet  which  offers a  combination  of the  traditional,  name-brand,  quality
promotional toy items and educational,  electronic interactive,  and collector's
items and products.  Combining the  promotional  and educational toy segments of
the market into one retail  location is  believed  to be a unique  concept  that
should  prove to  differentiate  the  Company's  stores from those of any of its
larger or similar  size  competitors.  Management  has been unable to locate any
other retailer currently using this combined marketing concept. The Company will
compete for the  educational  toy customer with other  specialty  stores such as
Disney Stores,  Warner Bros.  Stores,  Imaginarium,  Learning Smith, Lake Shore,
Zainy Brainy, and Noodle Kidoodle.

Employees

     As of March 31, 1997, the Company has one executive  office,  approximately
70 full time employees,  and approximately 280 part time employees.  None of the
employees of the Company




<PAGE>
     is represented by a union, and the Company considers  employee relations to
be good.

ITEM 2.           DESCRIPTION OF PROPERTY

         The Company  maintains  approximately  3,500  square feet of  executive
office space and until  recently,  the  Company's  stores were serviced from two
adjacent  distribution  facilities  (one 43,000  square feet in size,  the other
18,000 square feet in size),  encompassing an aggregate of approximately  61,000
square feet, at 550 Rancheros  Drive,  San Marcos,  California.  As of April 15,
1997,  however,  the  Company  returned  12,800  feet of the 18,000  square foot
warehouse  space to the  landlord.  The combined  51,700  square foot office and
warehouse space are leased at an approximate annual cost of $281,000,  the lease
expiring on April 30, 2000.  The office and  warehouse are leased from a company
owned in part by Richard Brady, the President and a Director of the Company. The
Company believes that the lease is on terms no more or less favorable than terms
it might otherwise have negotiated with an unaffiliated party. In addition,  the
Company  currently leases the following  premises on the following terms for its
retail stores:
<TABLE>
<CAPTION>


                                    SIZE                      LEASE
STORE LOCATIONS                     (IN SQ. FEET)             EXPIRATION                ANNUAL COST

<S>                                 <C>                       <C>                       <C>     
Escondido (1)                       11,200                    01/00                     $120,096
316 W. Mission Blvd.
Escondido, CA 92025

Convoy                              8,257                     10/97                      97,610
4531 Convoy
San Diego, CA 92111

Mission Viejo                       7,800                     01/01                      84,840
27690 B Santa Margarita
Mission Viejo, CA 92692

Chula Vista                         8,250                     12/99                      84,150
1193 Broadway
Chula Vista, CA 92011

El Cajon                            10,030                    05/00                      127,881
327 N. Magnolia
El Cajon, CA 92020

Simi Valley                         11,383                    11/99                       88,319
1117 East Los Angeles
Ste. C
Simi Valley, CA 93065

Riverside (1)                       10,156                     01/01                      91,404
3531 Riverside Plaza
Riverside, CA 92506

Encinitas                           10,000                     09/05                      116,752
280 N. El Camino Real
Encinitas, CA 92024

<PAGE>
Orange                              13,125                     01/01                      96,360
1349 E. Katella
Orange, CA 92513

Pasadena                            9,800                      12/98                      96,000
885 Arroyo Parkway
Pasadena, CA 91105

San Dimas (1)                       8,780                      03/01                     108,136
612 W. Arrow Highway
San Dimas, CA 91773

Rialto                             10,600                      11/03                      78,000
578 W. Foothill Blvd.
Rialto, CA 92376

Redlands                           10,478                      06/97                      95,942
837 Tri-City Center
Redlands, CA 92373

Whittier (1)                       12,197                      01/00                      94,500
13231 E. Whittier Blvd.
Whittier, CA  90602

Rancho Cucamonga                   10,097                      05/98                      79,239
9950 W. Foothill Blvd.
Rancho Cucamonga, CA 91730

Corona
1210 West Sixth Street             10,000                      10/04                      60,000
Corona, CA 91720

Woodland Hills                      9,400                      12/03                     165,480
19804 Ventura Blvd.
Woodland Hills, CA 91364

Santa Clarita                      12,000                      08/06                     108,000
19232 Soledad Canyon Rd.
Santa Clarita, CA  91351

South Coast Plaza                   5,183                      01/04                     159,377
Toys International
3333 Bristol Street, Suite 1030
Costa Mesa, CA  92626

Century City                        3,869                      01/98                     133,481
Toys International
Building B, 1st level
10250 Santa Monica Blvd.
Los Angeles, CA  90067

Crystal Court                       1,220                      01/99                  5% of sales
Tutti Animali
333 Bear Street
Costa Mesa, CA  92626
----------------
</TABLE>




<PAGE>
(footnote from previous page)

(1) In fiscal 1997,  the Company  temporarily  closed four stores,  all of which
will be reopened for the November and December  holiday  season.  The Company is
attempting to locate suitable replacement tenants to assume the leases for these
stores.

         In  addition  to the above  stores,  the  Company  previously  operated
several Playco  Originals which were closed for various  reasons.  The effect of
closing the stores  generally has been positive,  as most of them were operating
at a loss prior to closure.  Although there are expense charges  associated with
the  closing of store  locations,  the  effect of such  charges is offset by the
savings realized from closing stores which operate at a loss. In addition, since
fixtures from closed stores are typically used in new store locations,  the cost
of opening new locations is minimized.

ITEM 3.           LEGAL PROCEEDINGS

         The Company is not a party to any material  litigation and is not aware
of any threatened  litigation  that would have a material  adverse effect on its
business,  except for the litigation  matters involving three of the four stores
the Company has temporarily  closed. No Director,  Officer,  or affiliate of the
Company,  nor any associate of same,  is a party to, or has a material  interest
in, any proceeding adverse to the Company.

         From March 1997 through May 1997, the Company  temporarily  closed four
of its locations  due to  non-profitable  operations.  The Company is seeking to
sublease such  locations or return the locations to the landlords  pursuant to a
settlement;  however,  in the  event  that  the  Company  is  unable  to  obtain
subleases,  it will reopen the stores for the holiday season in October. In June
1997, the landlords for three of the four locations  filed lawsuits  against the
Company  seeking,  in one of the suits, the full value of the lease payments for
the terms of the leases.  The Company is preparing answers to these lawsuits and
intends to defend  against the actions  unless  resolutions  between the parties
thereto can be reached.  Management  expects that these  actions will be settled
before trial without there being a material effect on the Company's operations.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On March 3, 1997,  the Company held its annual  meeting during which it
proposed to elect three Directors to the Board. The proposal was adopted and the
following  were  elected  Directors  of the Board  for a term of one year:  Ilan
Arbel, Harold Rashbaum, and Sheikhar Boodram.

         The votes cast or withheld  for the election of the  Directors  are set
forth as follows:
<TABLE>
<CAPTION>

         Nominees                                    Votes For                  Votes Withheld

<S>                                                           <C>                       <C>  
         Ilan Arbel                                           7,396,426                 8,664
         Harold Rashbaum                                      7,396,426                 8,664
         Sheikhar Boodram                                     7,396,426                 8,664

</TABLE>



<PAGE>
     On April 29, 1997,  Mr. Arbel  resigned as  Director.  On May 23, 1997,  in
order to fill the vacancy left by Mr.  Arbel,  the Board of Directors  appointed
Richard Brady as a Director.

     On June 10,  1997,  the  Company  mailed a Notice  of  Special  Meeting  of
Stockholders and Proxy Statement to its shareholders advising of a June 30, 1997
special meeting wherein the following  proposals will be voted on: (i) a reverse
split of the Company's  outstanding shares on a 1 for 3 basis; (ii) an amendment
to the Company's  Certificate of Incorporation which will effect an amendment to
the rights and  preferences of the Series E Preferred Stock to (a) eliminate the
Series E Class I Preferred Stock, (b) eliminate the dividend, and (c) change the
conversion  ratio  from  20 to 1 to 6 to 1;  and  (iii)  authorization  for  the
issuance of up to 1,000,000  shares of the Company's Series E Class II Preferred
Stock by the Company for sale in an initial public offering.

     The Company has  submitted  a proposal to the Nasdaq  stock  market for its
review,  describing the proposed transactions detailed in proposals (ii) & (iii)
above.  It has asked Nasdaq to consider  approving  the trading of the Company's
Series E Preferred Stock in the event that an offering is consummated. Nasdaq is
reviewing  this request and has not  responded as of June 10, 1997. In the event
that Nasdaq  responds  negatively to the Company's  request,  Proposals (ii) and
(iii)  will be  re-evaluated  by  management,  and a notice  will be sent to the
Company's  stockholders  advising  same that votes on these  matters will not be
accepted.

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

     The Company's  Common Stock and Warrants are currently quoted on the Nasdaq
SmallCap Stock Market.  The following table sets forth  representative  high and
low closing bid quotes as reported by a market maker  during the periods  stated
below.  Bid quotations  reflect prices  between  dealers,  do not include resale
mark-ups,  mark-downs,  or other  fees or  commissions,  and do not  necessarily
represent actual transactions.
<TABLE>
<CAPTION>

                                                           Common Stock(1)                     Warrants(1)              Units(2)
Calendar Period                                             Low       High                Low       High           Low       High
---------------                                             ---       ----                ---       ----           ---       ----
<S>                                                         <C>       <C>                 <C>       <C>            <C>       <C>

1995
01/01/95 - 02/06/95                                                                                                11 1/2    21 1/4
02/06/95 - 03/31/95                                         3 3/4     13 1/4              1 1/8     7 1/2
04/01/95 - 06/30/95                                         2 1/8     7 5/8               3/16      2 3/16
07/01/95 - 09/30/95                                         2 1/8     3 1/2               1/8       5/8
10/01/95 - 12/31/95                                         1 1/2     3 3/8               1/8       3/8

1996
01/01/96 - 03/31/96                                         7/8       2 3/8               1/8       1/4
04/01/96 - 06/30/96                                         1 1/8     3                   1/8       1/4
07/01/96 - 09/30/96                                         3/4       2 1/2
10/01/96 - 12/31/96                                         1 1/8     1 3/8

1997
01/01/97 - 03/31/97                                         1         1 1/4
04/01/97 - 06/10/97                                         1 1/8     1 1/8
---------------------
</TABLE>

<PAGE>
         (footnotes from previous page)

     (1) The Common Stock and Warrants  started to trade  separately on February
6, 1995. The warrants expired in February 1997.

     (2) The Company's Units only traded from November 2, 1994 through  February
6, 1995.

         As of June 10, 1997,  there were 260 holders of record of the Company's
Common Stock,  although the Company believes that there are approximately  1,000
additional  beneficial  owners of shares of Common Stock held in street name. As
of June 10, 1997, the number of outstanding shares of the Company's Common Stock
was 12,250,556.


                                     PART II

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSES OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

         The following table summarizes  certain selected  financial data and is
qualified in its entirety by the more detailed  financial  statements  contained
elsewhere in this document.
<TABLE>
<CAPTION>

                                                    Year Ended
                                                   March 31,

                                            1994                        1995                      1996               1997
                                            -----                      ------                    ------              -----
         Balance Sheet Data:

<S>                                         <C>                        <C>                      <C>                  <C>         
         Working Capital (deficiency)       $(102,132)                 $1,805,396               $46,589              $(1,570,486)
         Total Assets                       9,005,405                  11,119,692               9,213,104            9,378,618
         Total Current Liabilities          7,094,257                  7,298,136                6,673,570            8,148,657
         Long-term obligations              99,274                     140,218                  726,007              226,925
         Redeemable preferred stock         929,380                    242,275                  87,680               ---
         Stockholders' equity               882,494                    3,439,063                1,725,847            1,003,036
         Common stock dividends             ---                        ---                      ---                  ---

                                                    Year Ended
                                   March 31,

                                             1994                       1995                      1996               1997
                                             -----                     ------                    ------              -----
         Operating Data:

         Net sales                          $21,756,847                $25,374,722               $21,230,853         $19,624,276
         Cost of sales                      15,001,015                 16,704,757                15,132,895          13,669,104
         Operating expenses                 8,489,222                  9,292,632                 9,105,515           8,881,438
         Net loss                           1,631,775                  875,788                   3,542,715           3,584,881
         Loss per common share(1)           (1.69)                     (0.87)                    (2.77)              (1.29)
         Average shares outstanding(1)      966,322                    1,011,284                 1,287,843           2,791,876
</TABLE>

     (1)  Adjusted  for  contemplated  1 for  3  reverse  split.  See  "Item  4.
Submission of Matters to a Vote of Security Holders."

Results of Operations

<PAGE>

Statements  contained  in this  report  which  are not  historical  facts may be
considered forward looking  information with respect to plans,  projections,  or
future  performance  of the  Company as  defined  under the  Private  Securities
Litigation  Reform Act of 1995. These forward looking  statements are subject to
risks and  uncertainties  which could cause actual results to differ  materially
from those projected.

         The Company's  operations  are  substantially  controlled by UTTC,  the
Company's  parent.  UTTC  currently owns  approximately  59.3% of the issued and
outstanding shares of the Company's Common Stock.

For the year ended March 31, 1997 compared to the year ended March 31, 1996

         The Company  generated net sales of $19,624,276 in the year ended March
31, 1997 (also referred to as fiscal year 1997).  This represented a decrease of
$1,606,577,  or 7.6%,  from net sales of $21,230,853 in the year ended March 31,
1996 (also  referred  to as fiscal  year  1996).  Approximately  $485,150 of the
decline in sales is directly  attributable  to decreased  sales of milk cap game
products.  Milk cap game  products  represented  a  significant  portion  of the
Company's business mix in fiscal year 1995 and a lesser percentage (2.6%) of the
Company's sales in the 1996 fiscal year.  Milk cap game products  represented an
insignificant portion (.4%) of the Company's sales in fiscal year 1997.

         The Company had 21 retail  locations  in the year ended March 31, 1997,
including 3 Toys  International  stores acquired on January 16, 1997. During the
year ended March 31, 1996, the Company operated 20 retail locations. The Company
closed four locations in fiscal year 1996. Same store sales decreased by 1.8% in
fiscal year 1997 compared to fiscal year 1996.

         The Company posted a gross profit of $5,955,172 in the year ended March
31, 1997. While this represented a decrease of $142,786, or 2.3%, from the gross
profit of $6,097,958  in the year ended March 31, 1996, it actually  represented
an improvement in the Company's  gross margin from 28.7% in the 1996 fiscal year
to 30.3% in the 1997 fiscal year. This 1.6% gross margin improvement was largely
due  to  the  implementation  of the  Company's  ongoing  plan  to  augment  its
traditional  product  base  of  lower  margin  promotional  toys  with  a mix of
educational  and specialty  toys,  which  generally  produce better margins than
promotional toys.

         Operating  expenses in the year ended  March 31, 1997 were  $8,474,423.
This represented a $94,254,  or 1.1%,  improvement over the Company's  operating
expenses of $8,568,677 in the year ended March 31, 1996.  The primary reason for
the operating  expense  reduction was a decrease in payroll and payroll  related
expenses of $73,833.

         In the year  ended  March  31,  1996,  the  Company  recorded  costs of
$129,577  associated with the permanent  closure of retail stores. No such costs
were  recorded  in the year ended  March 31,  1997.  Non-cash  depreciation  and
amortization  expenses were constant at approximately  $407,000 in both the 1997
and 1996 fiscal years.

         The  Company's  operating  loss  improved  from  $3,007,557 in the 1996
fiscal  year  to  $2,926,266  in the  1997  fiscal  year.  This  represented  an
improvement of $81,291, or 2.7%.

          Interest  expense totaled  $658,615 for the year ended March 31, 1997.
This  represented  a  $123,457,  or 23.1%,  increase  over  interest  expense of
$535,158 in the year
ended March 31, 1996.  The primary  reason for the  increased  level of interest
expense was a higher level of borrowings in fiscal year 1997 than in fiscal year
1996.




<PAGE>
         During each of the years  ended  March 31,  1997 and 1996,  the Company
recorded net income tax provisions consisting only of the current portion of the
minimum income taxes required by various  jurisdictions  including the States of
California  and  Delaware;  such  amounts  were  immaterial  and are included in
operating  expenses.  Changes in deferred taxes were offset dollar for dollar by
adjustments  to the  Company's  valuation  allowance  which has  reduced its net
deferred  tax assets to zero as of March 31, 1997 and 1996 and resulted in a net
zero dollar  provision  for  deferred  income  taxes for each of the years ended
March 31, 1997 and 1996.

         As a result of the above mentioned factors,  the Company recorded a net
loss of  $3,584,881  for the fiscal  year ended March 31, 1997 and a net loss of
$3,542,715  recorded  in the fiscal year ended  March 31,  1996.  In fiscal year
1996,  the net loss  applicable to common  shares  differed from the net loss by
$27,545,  as a result of preferred stock dividends accrued in that year. The net
loss per common  share for the 1997 fiscal  year was  $(1.29)  compared to a net
loss per common  share in the 1996 fiscal  year of $(2.77).  The loss per common
share  decreased in the 1997 year  compared to the prior year due to an increase
in the weighted  average number of shares  outstanding  from 1,287,843 in fiscal
year 1996 to  2,791,876  in fiscal  year 1997.  All share and per share  amounts
reflect the effects of the  contemplated  1 for 3 reverse split of common stock.
See "Submission of Matters to a Vote of Stockholder."

Liquidity and Capital Resources

         At March 31,  1997,  the  Company  had a  working  capital  deficit  of
$(1,570,486)  compared  to a working  capital  position  of $46,589 at March 31,
1996. The Company has generated  operating losses for the past several years and
has  historically  financed  those losses and its working  capital  requirements
through financing transactions,  most recent from the exercise by Europe America
Capital  Corporation  ("EACC") of its option to purchase shares of the Company's
Series E Preferred Stock and from the additional  financing provided by Congress
due to the additional  $1,000,000 letter of credit received from EACC. There can
be no assurance that the Company will be able to generate sufficient revenues or
have   sufficient   controls   over   expenses  and  other  charges  to  achieve
profitability.

         For the year ended March 31, 1997, the Company used  $2,275,962 of cash
in its  operations  compared to $1,176,172  used in operations in the year ended
March 31, 1996.  The Company's net loss was  approximately  $3.5 million in both
years.  The primary  factor in the  $1,099,790  difference in the amount of cash
consumed in operations between the two years was the generation of $1,673,284 of
cash from  inventories  in the 1996  fiscal  year  compared  to $431,154 of cash
generated from inventories in the 1997 fiscal year.

         The Company used $1,024,127 of cash in its investing  activities during
the year ended March 31,  1997  compared to $322,523 in the year ended March 31,
1996.  This  increase was due to the  addition of 3 new retail  locations in the
Toys International acquisition (see below).

         The Company generated  $3,285,410 from its financing  activities in the
year  ended  March 31,  1997  compared  to the  generation  of  $1,441,171  from
financing  activities in the year ended March 31, 1996. The largest contribution
to the Company's financing activities in the 1997 fiscal year was the receipt of
$2,334,000  from the sale of preferred  stock.  Those proceeds were used for the
acquisition of Toys International and to finance the Company's operating losses.

         As a result of the above  factors,  the Company  had a net  decrease in
cash of $14,679 in the year ended March 31, 1997  compared to a net  decrease in
cash of $57,524 in the year




<PAGE>
ended March 31, 1996.

         Management  has  developed a plan to focus more of its attention on the
educational  and  specialty  toy  market  in  its  existing  and  future  retail
locations. Such a focus is believed to be necessary to differentiate the Company
from the larger mass retailers and discount chains that focus on the promotional
toy market.  In addition,  Management  believes the educational toy market to be
one that is less seasonal in nature from the promotional toy market in which the
Company is currently operating. The Company has redesigned certain of its retail
locations to include  learning and activity centers within the stores as well as
entertainment  facilities including wide screen televisions.  Management expects
to continue this process of redesigning its retail  locations to this new format
over the fiscal year ending March 31, 1998.

         In addition, educational toy sales are expected to achieve gross profit
margins of approximately  42%,on average,  which is higher than the gross profit
of 28-32%  historically  achieved  by the  Company on sales of  promotional  toy
items. Management knows of no other toy retailer currently utilizing the concept
of combining  educational and promotional  toys to the scale  anticipated by the
Company in any single retail outlet.

         On January 16, 1997,  the Company  acquired  certain  inventories,  the
assignment of three leases,  store and corporate office fixtures,  the corporate
name and logo,  and  certain  prepaid  items from a  specialty  toy chain,  Toys
International,  pursuant to an Asset Purchase Agreement.  The aggregate purchase
price for Toys International was $1,024,184,  of which $927,000 was allocated to
inventory,  $32,184 for certain prepaid  expenses and $65,000 for the balance of
the assets.  In addition,  the Company  assumed a liability and paid $400,000 as
additional  rent to the landlord of one of the new  locations  to reimburse  for
tenant  improvements  constructed by the landlord for the previous owner of Toys
International.  As a result of the  acquisition,  the Company was  assigned  the
leases of the three retail locations for the remaining terms of the leases which
expire at various dates between January 31, 1998 and January 31, 2004 as well as
certain operating contracts.  The Company paid cash for all of the above amounts
except for  $265,000  which was in the form of two  non-interest  bearing  notes
payable. One note carried a principal balance of $200,000,  which required eight
quarterly  installments  of $25,000  beginning  April 16, 1997.  The second note
carried a principal balance of $65,000, which required three monthly payments of
$11,667 in February, May, and June, 1997 and two payments of $15,000.

         The three Toys  International  stores are located in up-scale  shopping
malls  in  southern   California.   Each  location  carries  specialty  toy  and
collectible  items  which  typically  command  a higher  gross  margin  than the
traditional promotional toy lines carried by the Company. The Toys International
locations also stock a number of promotional items which are also carried at the
Company's  other locations but have  historically  been sold at a higher mark-up
than at the Company's stores.  Management  expects the operations of these three
locations will be enhanced by reducing the Toys International  overhead expenses
and by obtaining purchase  discounts on promotional  merchandise that is sold in
the Toys International stores through the Company's purchasing power.

         Management believes that the Toys International acquisition complements
its  strategy  of  changing  its  business  mix  toward a higher  percentage  of
educational  and specialty  toys. In addition to its existing plan of converting
certain of its current  locations to the redesigned  format discussed above, the
Company  plans to open a number of new  locations in up-scale  malls bearing the
Toys International name and motif.

     At March 31, 1997,  the Company had an inventory  financing  line of credit
with




<PAGE>
Congress in connection  with a Loan and Security  Agreement  ("Loan  Agreement")
that was executed on February 1, 1996. The Loan  Agreement  provides for maximum
borrowings of  $7,000,000  based on the "Cost Value of Eligible  Inventory,"  as
defined in the Loan  Agreement.  The Loan Agreement also requires the Company to
maintain, at all times, a net worth of $500,000. The Loan Agreement requires the
payment of a quarterly service fee of $10,000.  The line of credit is secured by
substantially  all assets of the Company,  is guaranteed by UTTC, and is further
collateralized by $3,000,000 in letters of credit provided by EACC.  Interest on
outstanding  balances is charged at prime plus 1.5%. The Loan Agreement  matures
February 1, 1998 but can be extended for an additional year at Congress' option.

         As compensation  for the issuance of the letter of credit,  the Company
granted to EACC options (i) to purchase up to an  aggregate of 1,250,000  shares
of the  Company's  Common  Stock at a purchase  price of 25% of the  closing bid
price for the Common Stock on the last  business  day prior to  exercise,  for a
period of six months from the date of issuance,  which  option has expired;  and
(ii) to purchase up to an aggregate of 20,000,000 shares of the Company's Series
E Preferred Stock.

         The Company  purchases  approximately 95% of its products directly from
manufacturers.  Approximately 30% of the Company's  inventory purchases are made
directly from five (5) manufacturers.  The Company typically  purchases products
from its suppliers on credit  arrangements  provided by the  manufacturers.  The
five major manufacturers  mentioned above generally provide credit terms of 180+
days while other vendors offer credit terms of 30 to 120 days.

         The toy  industry  is  seasonal  with  approximately  45% to 49% of the
Company's annual sales occurring during the months of October through  December.
As a result,  sources  of funds to repay  amounts  due under  inventory  finance
arrangements  with  financial   institutions  and  manufacturers  are  typically
generated from sales during the peak selling season.

         The Company  plans to finance its program of  remodeling  its  existing
stores to focus on the  educational  and specialty toy market and of opening new
stores under the Toys  International  name in up-scale  shopping malls primarily
through lease financing.

         The Company has prepared cash flow forecasts for the fiscal year ending
March 31, 1998. Management acknowledges that the Company will require additional
financing  in  addition to its letter of credit  with  Congress  and from vendor
credit  lines in order to meet its  capital  requirements  for the  fiscal  year
ending March 31, 1998. In addition,  the Company will require additional capital
to redesign  current and future  retail  locations to  incorporate  its plans to
focus on the educational and specialty toy market.  The Company has entered into
a letter of intent with West America Securities Corp. ("West"), a broker dealer,
to engage in an initial  public  offering for the  Company's  Series E Preferred
Shares.  The letter of intent  provides  for an offering of  $2,000,000.  In the
event  Nasdaq  does not  approve  the  listing  of the  shares  of the  Series E
Preferred Stock, the offering may not be undertaken by West. Further,  there can
be no  assurances  that this  offering will be  consummated.  In addition,  Ilan
Arbel,  in a letter dated June 10, 1997,  represented his willingness to provide
additional  working  capital to the Company,  should such be necessary,  through
September 30, 1998.

Trends Affecting Liquidity, Capital Resources, and Operations

         The  Company's  sales  efforts  are  focused  primarily  on  a  defined
geographic  segment,  consisting of individuals in the southern California area.
The Company's future financial performance will depend upon continued demand for
toys and hobby items by individuals in




<PAGE>
southern  California,  general economic conditions within such geographic market
area, the Company's  ability to choose  locations for new stores,  the Company's
ability to purchase  product at favorable  prices on favorable  terms as well as
the effects of increased competition and changes in consumer preferences.

         The toy and hobby retail industry faces a number of potentially adverse
business  conditions  including  price and gross  margin  pressures  and  market
consolidation.  The  domination of the toy industry by Toys R Us has resulted in
increased  price  competition  among various toy  retailers and declining  gross
margins for such retailers.  Moreover,  the domination of Toys R Us has resulted
in the  liquidation  or bankruptcy of many toy retailers  throughout  the United
States,  including in the southern California market.  There can be no assurance
that the Company's  business  strategy will enable it to compete  effectively in
the toy industry.

         Management  currently knows of no trends reasonably  expected to have a
material  impact upon the Company's  operations or liquidity in the  foreseeable
future. The Company's  operating history has been characterized by narrow profit
margins and,  accordingly,  the Company's earnings will depend  significantly on
its  ability  to  purchase  its  product on  favorable  terms,  to obtain  store
locations  on  favorable  terms,  retail a large  volume and variety of products
efficiently and to provide quality support  services.  The Company's prices are,
in part, based on market surveys of its competitors' prices,  primarily those of
Toys R Us. As a result,  aggressive pricing policies, such as those used by Toys
R Us, have  resulted in the Company  reducing  its retail  prices on many items,
thereby reducing the available profit margin. Moreover, increases in expenses or
other  charges  to income may have a material  adverse  effect on the  Company's
results of  operations.  There can be no assurance that the Company will be able
to generate  sufficient  revenues or have sufficient  controls over expenses and
other charges to achieve profitability.

         The Company's  common stock is currently  traded on the NASDAQ SmallCap
Market  System which  requires the Company to maintain  total assets of at least
$2,000,000,  stockholders'  equity of  $1,000,000,  and a  minimum  bid price of
$1.00.  If the  Company's  result of  operations  from future  periods cause the
Company to be in a position  where it is unable to satisfy these  criteria,  its
securities  will be  subject  to  being  delisted  and  trading,  if any,  would
thereafter  be  conducted in the  over-the-counter  market and quoted on the OTC
Bulletin Board. Consequently,  an investor may find it more difficult to dispose
of or obtain  accurate  quotations as to the price of the Company's  securities.
Such an event of  delisting  may also have a  negative  impact on the  Company's
ability to raise additional  equity or debt financing.  In May 1997, the Company
proposed  the  listing of its Series E  Preferred  Stock in  conjunction  with a
proposed  offering by West and certain other capital  transactions for which the
Company has requested  stockholder  approval,  which meeting is set for June 30,
1997. See "Submission of Matters to a Vote of Security Holders." There can be no
assurances  that Nasdaq will  approve the  proposal or consent to the listing of
the shares of Series E Preferred Stock.

New Accounting Pronouncement:

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards ("SFAS") No. 128 Earnings Per Share ("EPS").
SFAS No. 128 requires all  companies to present  "basic" EPS and, if they have a
complex  capital  structure,  "diluted" EPS. Under SFAS No. 128,  "basic" EPS is
computed by dividing income  (adjusted for any preferred stock dividends) by the
weighted  average  number  of  common  shares  outstanding  during  the  period.
"Diluted" EPS is computed by dividing  income  (adjusted for any preferred stock
or convertible stock dividends and any potential income or loss from




<PAGE>
convertible  securities)  by  the  weighted  average  number  of  common  shares
outstanding  during the period plus the number of additional  common shares that
would have been  outstanding  if any  dilutive  potential  common stock had been
issued.  The  issuance of  antidilutive  potential  common  stock  should not be
considered  in the  calculation.  In  addition,  SFAS No. 128  requires  certain
additional  disclosures relating to EPS. SFAS No. 128 is effective for financial
statements  issued for periods ending after December 15, 1997. Thus, the Company
expects  to  adopt  the  provisions  of this  statement  in  fiscal  year  1998.
Management  does  not  expect  the  adoption  of  this  pronouncement  to have a
significant impact on the Company's financial statements.

ITEM 7.           FINANCIAL STATEMENTS

         See attached Financial Statements.

ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                  ON ACCOUNTING AND FINANCIAL DISCLOSURE

     On February 20, 1997, the Company engaged Haskell & White, Certified Public
Accountants, as its new independent accountants to audit the Company's financial
statements  for the year ending March 31, 1997,  replacing  BDO Seidman,  LLP as
auditors of the Company. Prior to engaging Haskell & White, such accounting firm
was not  consulted  on any matters  relative to the  application  of  accounting
principles on specified  transactions or in any matter that was the subject of a
disagreement  between the Company  and its former  accountants.  During the past
year,  Haskell & White has provided services of a general  financial  consulting
nature to the  Company  and has  performed  agreed  upon  procedures  in the due
diligence  process related to the January 1997 acquisition of substantially  all
the assets of Toys.

         In  December  1996,  Haskell  & White  was  engaged  by  U.S.  Wireless
Corporation,  formerly known as American Toys,  Inc., the former parent company,
to re-audit the financial  statement of American  Toys,  Inc. for the year ended
March 31, 1996. In so doing,  Haskell & White re-audited the financial statement
of the Company for the year ended March 31, 1996 and therefore provided an audit
report for the  comparative  financial  statements for the years ended March 31,
1997 and 1996.

         The  change  in  accountants  was  not  due  to  any  discrepancies  or
disagreements  between  the  Company  and  BDO  Seidman,  LLP on any  matter  of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure.  The former accountants'  reports on the Company's financial
statements  for the years  ended  March 31,  1995 and 1996 did not  contain  any
adverse opinions or disclaimers of opinion;  nor were they qualified or modified
as to uncertainty,  audit scope or accounting principles as required by Item 304
(a)(3) of  Regulation  S-B  promulgated  under the  Securities  Act of 1933,  as
amended.



<PAGE>
                                    PART III

ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors

         The Directors of the Company are elected annually by the  shareholders,
and the Officers are appointed annually by the Board of Directors.  Vacancies on
the Board of Directors may be filled by the remaining  Directors.  Each Director
and Officer will hold office until the next annual  meeting of  shareholders  or
until his  successor  is elected  and  qualified.  The  Executive  Officers  and
Directors of the Company are as follows:
<TABLE>
<CAPTION>


NAME                                        AGE                        POSITION

<S>                                         <C>                                             
Harold Rashbaum                             70                         Chairman of the Board

Richard Brady                               45                         Chief Executive Officer, President, and Director

Angela Burnett                              44                         Secretary, Comptroller

James Frakes                                40                         Chief Financial Officer

Sheikhar Boodram                            34                         Director
</TABLE>


         All Directors hold office until the next annual meeting of stockholders
or until their  successors are duly elected and qualified.  Officers are elected
annually by, and serve at the discretion  of, the Board of Directors.  There are
no family  relationships  between  or among any  Officers  or  Directors  of the
Company.  Each Director is elected for a period of one year at an annual meeting
of the  Company's  shareholders  and serves until his successor is duly elected.
The Company's Officers serve at the discretion of the Board of Directors. Angela
Burnett has been the Secretary of the Company since June 1994.  Ms.  Burnett has
resigned as Secretary effective July 3, 1997.

         As  permitted  under  the  Delaware   Corporation  Law,  the  Company's
Certificate of Incorporation  eliminates the personal liability of the Directors
to the Company or any of its shareholders for damages caused by breaches of said
Directors' fiduciary duties. As a result of such provision,  stockholders may be
unable to recover  damages  against then Directors for actions which  constitute
negligence or gross  negligence or are in violation of their  fiduciary  duties.
This  provision in the Company's  Certificate  of  Incorporation  may reduce the
likelihood of derivative,  and other types of  shareholder,  litigation  against
Directors.

     Harold  Rashbaum  was  appointed  Chairman  of the  Board of  Directors  on
September 10, 1996. He has been the President,  Chief Executive  Officer,  and a
Director of Hollywood  Productions,  Inc. ("Hollywood") since January 1997. From
May 1996 to January  1997,  Mr.  Rashbaum  served as Secretary  and Treasurer of
Hollywood and the President of Breaking Waves,  Inc., a subsidiary of Hollywood.
Also since May 1996, Mr. Rashbaum has served as the Secretary,  Treasurer, and a
Director  of D.L.  Productions,  Inc.  ("DLP").  He became  President  of DLP in
January 1997.  Since February 1996, Mr. Rashbaum has also been the President and
a Director of H.B.R.  Consultant Sales Corp.  ("HBR"),  of which his wife is the
sole stockholder. Mr. Rashbaum was a consultant to the Company from July 1995 to
September 10, 1996.  Prior thereto from February 1992 to June 1995, Mr. Rashbaum
was a consultant  to 47th Street  Photo,  Inc.,  an  electronics  retailer.  Mr.
Rashbaum held this position at the request of the bankruptcy




<PAGE>



     court  during the time 47th  Street  Photo,  Inc.  was in Chapter  11. From
January  1991 to February  1992,  Mr.  Rashbaum  was a  consultant  for National
Wholesale Liquidators, Inc., a major retailer of household goods and housewares.

     Richard Brady is a co-founder of the Company and has acted as the Company's
Chief  Executive  Officer and President  since  December 1995. Mr. Brady was the
Executive Vice President, Secretary, and a Director from the Company's inception
in 1974 until  December  1996. He was  reelected  Director of the Company in May
1997.

     Angela Burnett has been the Secretary and  Comptroller of the Company since
June 1994 and 1989,  respectively.  Ms. Burnett was the Company's Treasurer from
1992 to June 1997 and the Chief  Financial  Officer of the Company  from January
1996 to May 1997.  Since 1989,  Ms.  Burnett has been the manager of  Management
Information  Services.  Ms. Burnett has been employed by the Company since 1985:
she was  initially  employed  as a data entry  employee  in charge of  inventory
control and subsequently became assistant controller of the Company in 1988.

     James  Frakes was elected  Chief  Financial  Officer of the Company in June
1997.  Prior  thereto,  from  June  1990 to March  1997,  Mr.  Frakes  was Chief
Financial  Officer  of  Urethane  Technologies,  Inc.  ("UTI")  and  two  of its
subsidiaries:   Polymer   Development   Laboratories,   Inc.   ("PDL")  and  BMC
Acquisition,  Inc. These were specialty  chemical companies which focused on the
polyurethane  segment  of the  plastics  industry.  Mr.  Frakes  was  also  Vice
President  and a Director  of UTI  during  this  period.  In March  1997,  three
unsecured  creditors of PDL filed a petition for the  involuntary  bankruptcy of
PDL. This matter is pending before the United States Bankruptcy  Court,  Central
District  of  California.  In  1989,  Mr.  Frakes  and his  wife  purchased  JLJ
Enterprises  d/b/a TME Travel ("JLJ"),  a travel agency which provided  services
primarily for the business community.  Mr. Frakes was the Vice President,  Chief
Financial  Officer,  and a Director  of JLJ;  his wife was the  President  and a
Director. In November 1992, Mr. Frakes and his wife sold JLJ. From 1985 to 1990,
Mr.  Frakes was a manager for Berkeley  International  Capital  Corporation,  an
investment  banking  firm  specializing  in  later  stage  venture  capital  and
leveraged  buyout  transactions.  In 1980,  Mr.  Frakes  obtained  a Masters  in
Business Administration from University of Southern California.  He obtained his
Bachelor  of Arts  degree in  history  from  Stanford  University  from which he
graduated with honors in 1978.

     Sheikhar  Boodram was appointed as a Director of the Company on February 2,
1996. Mr. Boodram was a Director of American Toys, Inc. from May 1993 until July
1996.  Since  September  1992,  Mr.  Boodram has been the Vice  President  and a
Director of UTTC.  From October 1991 to September 1992, Mr. Boodram was employed
as a designer  with UTTC.  Mr.  Boodram has been the  President and Secretary of
Multimedia  Concepts  International,  Inc.  since June 12, 1995.  He is the sole
Officer and Director of American Eagle  Industries Corp. and Match II, Inc. From
1979 until October 1991,  Mr.  Boodram was the  production  manager for for Lady
Helene  Sophisticates,  Ltd., a manufacturer  of ladies  garments,  which ceased
operations in 1991.

Compliance with Section 16(a) of the Exchange Act

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's  Officers,  Directors,  and persons who  beneficially own
more than ten percent of a registered class of the Company's  equity  securities
to file reports of securities  ownership and changes in such  ownership with the
Securities and Exchange Commission  ("SEC").  Officers,  Directors,  and greater
than ten percent beneficial owners also are required by rules promulgated by the
SEC to furnish  the Company  with  copies of all Section  16(a) forms they file.
Based solely




<PAGE>
upon requests for information of the Company's Officers,  Directors, and greater
than 10%  shareholders,  during fiscal 1997,  the Company has been informed that
all Officers,  Directors, or greater than 10% shareholders have stated that they
have filed such  reports as are  required  pursuant to Section  16(a) during the
1996 fiscal year.  The Company has no basis to believe that any required  filing
by any of the above indicated individuals has not been made.

ITEM 10.          EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

         The following  provides  certain  information  concerning  all Plan and
Non-Plan (as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded
or paid by the Company during the years ended March 31, 1997,  1996, and 1995 to
each of the named Executive Officers of the Company.
<TABLE>
<CAPTION>

                           Summary Compensation Table
                               Annual Compensation

         (a)                                         (b)               (c)             (d)                 (e)
         Name and Principal                                                            Other Annual
         Position                                    Year              Salary($)       Bonus($)(1)          Compensation($)

<S>                                                  <C>               <C>                                  <C>     
         Richard Brady                               1997              108,000         -                    6,179(2)
         Chief Executive Officer,                    1996              117,230         -                    7,979(2)
          President and Director                     1995              120,000         -                    7,829(2)
         ----------------------
</TABLE>

     (1) No bonuses were paid during the periods herein stated.

     (2) Includes an automobile allowance of $4,800 for 1997 and $6,600 for 1996
and 1995,  and the payment of life  insurance  premiums of $1,379,  $1,379,  and
$1,888 for 1997, 1996, and 1995, respectively.

1994 Stock Option Plan

         In 1994, the Company adopted the Company's 1994 Stock Option Plan ("the
Plan").  The Board  believes  that the Plan is  desirable  to attract and retain
executives  and other key  employees  of  outstanding  ability.  Under the Plan,
options to purchase an aggregate of not more than 150,000 shares of Common Stock
may be  granted  from  time  to  time  to key  employees,  Officers,  Directors,
advisors, and independent consultants to the Company and its subsidiaries. As of
June 1, 1994,  10,000 options,  exerciseable at $2.10 per share, were granted to
Angela Burnett. No other options have been granted to any other party.

         The Board of Directors is charged with  administration  of the Plan and
is generally  empowered to interpret the Plan,  prescribe  rules and regulations
relating thereto, determine the terms of the option agreements,  amend them with
the consent of the  Optionee,  determine the employees to whom options are to be
granted,  and  determine  the number of shares  subject  to each  option and the
exercise price thereof. The per share exercise price for incentive stock options
("ISOs")  will not be less than 100% of the fair market  value of a share of the
Common Stock on the date the option is granted (110% of fair market value on the
date of grant of an ISO if the  Optionee  owns more than 10% of the Common Stock
of the Company).

         Options  will be  exerciseable  for a term  (not  less  than one  year)
determined  by the Board.  Options  may be  exercised  only  while the  original
grantee has a  relationship  with the Company or at the sole  discretion  of the
Board, within ninety days after the original grantee's termination. In the event
of termination due to retirement,  the Optionee,  with the consent of the Board,
shall have the right to exercise  his option at any time  during the  thirty-six
month  period  following  such  retirement.  Options  may  be  exercised  up  to
thirty-six months after the death or total and




<PAGE>
permanent  disability  of an Optionee.  In the event of certain basic changes in
the  Company,  including  a change in control  of the  Company as defined in the
Plan,  in the  discretion  of the  Board,  each  option  may  become  fully  and
immediately exerciseable. ISOs are not transferable other than by will or by the
laws of descent and  distribution.  Options may be exercised during the holder's
lifetime only by the holder or his guardian or legal representative.

         Options granted pursuant to the Plan may be designated as ISOs with the
attendant tax benefits  provided  therefor  pursuant to Sections 421 and 422A of
the  Internal  Revenue Code of 1986.  Accordingly,  the Plan  provides  that the
aggregate  fair market value  (determined  at the time an ISO is granted) of the
Common  Stock  subject to ISOs  exerciseable  for the first time by an  employee
during any calendar  year (under all plans of the Company and its  subsidiaries)
may not exceed $100,000.  The Board may modify,  suspend, or terminate the Plan,
provided,  however, that certain material modifications  affecting the Plan must
be approved by the  shareholders,  and any change in the Plan that may adversely
affect an Optionee's  rights under an option  previously  granted under the Plan
requires the consent of the Optionee.

1994 401(k) Employee Stock Option Plan ("ESOP")

    In May 1994, the Company adopted  corporate  resolutions  approving a 401(k)
Employee Stock Ownership Plan ("the ESOP Plan") which covers  substantially  all
employees  of the  Company.  The ESOP Plan was  filed on July 14,  1995 with the
Internal  Revenue  Service  and  includes  provisions  for both  employee  stock
ownership  and a 401(k)  Plan.  The ESOP Plan allows  contributions  only by the
Company:  these can be made annually at the discretion of the Company's Board of
Directors.  The ESOP Plan has been designed to invest primarily in the Company's
stock.  The  401(k)  portion  of the ESOP  Plan  will be  contributed  to by the
employees of the Company through payroll deductions. The Company does not intend
to match contributions to the 401(k).  Contributions to the ESOP Plan may result
in an  expense,  resulting  in a  reduction  in  earnings,  and may  dilute  the
ownership interests of persons who currently own securities of the Company.



<PAGE>
ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

         The following table sets forth certain  information as of June 10, 1997
based upon information  obtained by the persons named below, with respect to the
beneficial  ownership  of shares of Common Stock by (i) each person known by the
Company to be the owner of 5% or more of the outstanding shares of Common Stock;
(ii) each Officer and Director; and (iii) all Officers and Directors as a group.
Except to the  extent  indicated  in the  footnotes  to the  table,  each of the
individuals  listed below possesses sole voting power with respect to the shares
of Common Stock listed opposite his name.
<TABLE>
<CAPTION>

Name and Address of Beneficial              Amount and Nature of
Owner                                       Beneficial Ownership                        Percentage of Class (%)
            
<S>                                               <C>                                     <C>
                                                   --                                      --
Harold Rashbaum
c\o Play Co. Toys &
 Entertainment Corp.
550 Rancheros Drive
San Marcos, CA

Sheikhar Boodram
c\o Play Co. Toys &
 Entertainment Corp.
550 Rancheros Drive                               --                                      --
San Marcos, CA

United Textiles & Toys Corp. (1)                  7,258,742                               59.3
448 West 16th Street
New York, NY 10011

Multimedia Concepts International,                --(2)                                   --
Inc.
448 West 16th Street
New York, NY 10011

Europe America Capital Foundation                 --(3)                                   --
Box 47
Tortola, BVI

All Officers and Directors as                     76,762                                  *
a group (4 persons) (1) - (4)
</TABLE>


* Less than 1%

     (1) Does not include  4,500,000  (1,350,000 after the 1 for 3 reverse stock
split) shares issuable,  at any time, upon the exercise of 225,000 shares of the
Series  E Class I  Preferred  Stock.  Includes  578,742  shares  issued  to UTTC
(formerly known as Mister Jay Fashions  International,  Inc.) in connection with
the distribution of the Company's shares by U.S. Wireless Corporation  (formerly
known as American Toys, Inc.) in August 1996.

     (2) Does not includes 15,500,000 (4,818,420 after the 1 for 3 reverse stock
split) shares issuable,  at any time, upon the exercise of 803,070 shares of the
Series E Class I Preferred Stock.

     Does not includes  23,450,000  (7,035,000  after the 1 for 3 reverse  stock
split) shares  issuable,  at any time, upon the exercise of 1,172,500  shares of
the Series E Class I Preferred Stock.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS




<PAGE>
     On January 30, 1996,  pursuant to the  requirements  of the Company's  Loan
Agreement with Congress,  American Toys,  Inc.  converted all $1,400,000 of debt
owed by the Company into equity.  In exchange for the debt,  American Toys, Inc.
agreed to receive  from the Company  one share of Series D Preferred  Stock with
the right to elect 2/3 of the  Company's  Board of  Directors  upon  stockholder
approval.  In  August  1996,  the one  share of  Series D  Preferred  Stock  was
converted  into  1,157,028  shares of the  Company's  Common  Stock based on the
initial  amount of the debt divided by the average  price of the shares for a 90
day period  prior to the  conversion.  This was  performed in order for American
Toys, Inc. to spin such shares off to its  stockholders  and divest its interest
in the Company.

     In February  1996,  pursuant to the terms of the Congress  Financing,  EACC
delivered  to  Congress a  $2,000,000  L/C.  EACC,  as  described  supra,  is an
affiliate  of Ilan  Arbel,  a  former  Director  of the  Company.  The  Congress
Financing is also  guaranteed by UTTC, the majority  stockholder of the Company.
See "Business Financing."

     From October 1996 to May 1997,  EACC  exercised its option and purchased an
aggregate of 2,862,070  shares of the Series E Class I Preferred Stock, of which
there are 2,500,570 shares  outstanding  after the conversion of an aggregate of
361,500  shares.  The proceeds of the funds  received for such  investment  have
enabled  the  Company to  acquire  substantially  all of the assets of Toys,  to
finance the opening of a Contemporary in Santa Clarita,  California, to redesign
three other store locations,  and to support  continued losses. In April and May
1997, EACF, EVC, and Vermongenstreuhand G,H,M,B provided an additional aggregate
amount of $700,000 to the Company as an advance against equity.

     In March 1997,  EACC  issued an  additional  $1,000,000  L/C to Congress as
security.  This L/C has enabled the  Company to receive  additional  advances in
such amounts from  Congress.  EACC has not  received  any  compensation  for the
issuance of this L/C.



<PAGE>
ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

     (a) The following financial  statements of the Company are included as Part
II, Item 8:
<TABLE>
<CAPTION>

<S>                                                                                                                          <C>
                  Index to Financial Statements                                                                              F-1
                  Report of Independent Certified Public Accountants                                                         F-2
                  Balance Sheets                                                                                             F-3
                  Statements of Operations                                                                                   F-5
                  Statements of Stockholders' Equity                                                                         F-6
                  Statements of Cash Flows                                                                                   F-7
                  Notes to Financial Statements                                                                              F-9
</TABLE>

(b) During the last quarter,  the Company filed two Forms 8-K. In February 1997,
the Company filed a Form 8-K apprising of a change in accounting firms. In April
1997, the Company filed a Form 8-K apprising of Mr. Ilan Arbel's  resignation as
a Director of the Company.

(c) All exhibits,  except those designated with an asterisk (*), which are filed
herewith,  previously have been filed with the Commission in connection with the
Company's  Registration  Statement on Form SB-2,  dated November 2, 1994,  under
file No. 33-81940-NY and pursuant to 17 C.F.R.  ss.230.411,  are incorporated by
reference  herein.  Exhibits  previously  filed  but  not as  part  of the  SB-2
Registration  Statement are incorporated  herein by reference to the appropriate
document.
<TABLE>
<CAPTION>

<S>                                <C>                                                                               <C> <C>  
3.1                        -        Certificate of Incorporation of the Company filed June 15, 1994.
3.2                        -        By-Laws of the Company.
3.3                        -        Specimen Common Stock Certificate.
3.4                        -        Letter waiving redemption right and Put Option on
                                    Series C Preferred Stock.
4.4                        -        ESOP Plan.
10.11                      -        Stock Purchase Agreement between Play Co. and American Toys.
10.22                      -        Lease Agreement for Store-Escondido.
10.23                      -        Lease Agreement for Store-Convoy.
10.26                      -        Lease Agreement for Store-Chula Vista.
10.27                      -        Lease Agreement for Store-El Cajon.
10.29                      -        Lease Agreement for Store-Simi Valley.
10.30                      -        Lease Agreement for Store-Encinitas.
10.31                      -        Lease Agreement for Store-San Dimas.
10.33                      -        Lease Agreement for Store-Rialto.
10.34                      -        Lease Agreement for Store-Redlands.
10.35                      -        Lease Agreement for Store-Rancho Cucamonga.
10.36                      -        Lease Agreement for Store-Woodland Hills.
10.37                      -        Lease Agreement for Warehouse-Executive Offices.
10.38                      -        Lease Agreement for Store-Pasadena.
10.38(a)                   -        Lease Agreement for Store-Whittier.
10.41                      -        The Company Incentive Stock Option Plan.
10.43                      -        Lease Agreement for Store-Lakewood.
10.44                      -        Lease Agreement for Store-Corona Plaza.
10.50                      -        Extension of Warehouse Lease.
10.65                      -        Direct delivery Purchase Agreement between the Company and Camp
                                    Pendleton.
<PAGE>
10.66                      -        Direct delivery Purchase Agreement between the Company and MCRD,
                                    San Diego.
10.74                      -        Agreement with Congress Financial.
10.75                      -        Asset Purchase Agreement for the purchase of Toys International.
10.76*                     -        Lease Agreement for Store-Riverside.
10.77*                     -        Lease Agreement for Store-Santa Clarita.
10.78*                     -        Lease Agreement for Store - South Coast Plaza.
10.79*                     -        Lease Agreement for Store - Century City.
10.80*                     -        Lease Agreement for Store - Crystal Court.
10.81                      -        Lease Agreement for Store - Orange County (incorporated by reference
                                    herein to exhibit (i) of the Company's 10-QSB/A-1 for
                                    the period  ended  September  30, 1995 filed with the
                                    Commission).
10.82                      -        Loan and Security Agreement with by and between Congress Financial
                                    Corporation  (Western) as Lender and Play Co. Toys as Borrower dated
                                    February 1, 1996  (incorporated by reference herein to exhibit (i) of the
                                    Company's 10-QSB for the period ended December 31, 1995).
10.83                      -        Stock Purchase Option Agreement with Europe America Capital
                                    Corporation for Series E. Preferred Stock (incorporated by reference
                                    herein to exhibit (ii) of the Company's 10-QSB for the period ended
                                    December 31, 1995).
10.84                      -        Stock Purchase Option Agreement with Europe America Capital
                                    Corporation for Common Stock (incorporated by reference herein to
                                    exhibit (iii) of the Company's 10-QSB for the period ended December 31,
                                    1995).
10.85                      -        Lease Agreement for Store - Mission Viejo (incorporated by reference
                                    herein to exhibit (iv) of the Company's 10-QSB for the period ended
                                    December 31, 1995).
16.01                      -        Letter from BDO Seidman, LLP (incorporated by reference herein to
                                    Form 8-K dated February 20, 1997).
27.01*                     -        Financial Data Schedule.
</TABLE>





<PAGE>
                                   SIGNATURES


         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized, this 25th day of June, 1997.

                                             PLAY CO. TOYS & ENTERTAINMENT CORP.


                                                           By: \s\ Richard Brady
                                                  Richard Brady, Chief Executive
                                                           Officer and President


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>

<S>                                                  <C>                                                  <C>
\s\ Harold Rashbaum                                  Chairman of the                                      06/25/97
Harold Rashbaum                                      Board of Directors                                   Date


\s\ Richard Brady                                    Chief Executive Officer                              06/25/97
Richard Brady                                        President, and Director                              Date


\s\ Jim Frakes                                       Chief Financial Officer                              06/25/97
Jim Frakes                                                                                                Date

\s\ Angela Burnett                                   Secretary, Comptroller,                              06/25/97
Angela Burnett                                       and Principal Accounting Officer                     Date


\s\ Shiekhar Boodram                                 Director                                             06/25/97
Sheikhar Boodram                                                                                          Date
</TABLE>


<PAGE>
                       PLAY CO. TOYS & ENTERTAINMENT CORP.
                 (A SUBSIDIARY OF UNITED TEXTILES & TOYS CORP.)

                                TABLE OF CONTENTS

                             MARCH 31, 1997 AND 1996

<TABLE>
<CAPTION>


                                                                                                               Page

<S>                                                                                                              <C>
Report of Independent Certified Public Accountants                                                             F-2

Balance Sheets                                                                                                 F-3

Statements of Operations                                                                                       F-5

Statements of Stockholders' Equity                                                                             F-6

Statements of Cash Flows                                                                                       F-7

Notes to Financial Statements                                                                                  F-9

</TABLE>



                                     F - 1


<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Play Co. Toys & Entertainment Corp.

We  have  audited  the  accompanying   balance  sheets  of  Play  Co.  Toys  and
Entertainment  Corp. (a subsidiary of United  Textiles & Toys Corp.) as of March
31,  1997 and 1996  and the  related  statements  of  operations,  stockholders'
equity,  and cash flows for each of the two years in the period  ended March 31,
1997.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Play Co. Toys and Entertainment
Corp. at March 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the two years in the period ended March 31, 1997 in conformity
with generally accepted accounting principles.




                                                                 HASKELL & WHITE
                                                    Certified Public Accountants

                                                       Newport Beach, California
                                                                   May 13, 1997,

     except the last two sections of Note 15 which are as of June 10, 1997,  and
the last paragraph of Note 9 which is as of June 20, 1997


                                     F - 38


<PAGE>
                       PLAY CO. TOYS & ENTERTAINMENT CORP.
                 (A SUBSIDIARY OF UNITED TEXTILES & TOYS CORP.)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>



                                 ASSETS (Note 5)


                                                                                             March 31,
                                                                                                               1997         1996
Current
<S>                                                                                                      <C>          <C>       
     Cash ............................................................................................   $   177,722    $   192,401
     Accounts receivable (Note 2) ....................................................................        60,206         35,273
     Merchandise inventories .........................................................................     6,092,930      6,259,084
     Other current assets ............................................................................       247,313        233,401
                                                                                                         -----------    -----------

                  Total current assets ...............................................................     6,578,171      6,720,159

Property and equipment, net of accumulated
     depreciation and amortization of $2,828,913
     and $2,457,813, respectively (Note 3) ...........................................................     2,475,650      1,858,538

Deposits and other assets (Notes 4 and 5) ............................................................       324,797        634,407
                                                                                                         -----------    -----------

                                                                                                         $ 9,378,618    $ 9,213,104
                                                                                                         ===========    ===========

                                       LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                                             March 31,
                                                                                                                1997           1996
Current
     Bank overdraft ..................................................................................   $   135,325    $   108,751
     Borrowings under financing agreement (Note 5) ...................................................     4,438,875      3,403,025
     Accounts payable ................................................................................     3,123,851      2,878,183
     Accrued expenses and other liabilities ..........................................................       308,940        283,611
     Current portion of notes payable (Note 7) .......................................................       141,666           --
                                                                                                         -----------    -----------

                  Total current liabilities ..........................................................     8,148,657      6,673,570

Notes payable, net of current portion (Note 7) .......................................................       100,000           --

Due to affiliate (Note 8) ............................................................................          --          528,070

Deferred rent liability (Note 9) .....................................................................       126,925        197,937
                                                                                                         -----------    -----------

                  Total liabilities ..................................................................     8,375,582      7,399,577
                                                                                                         -----------    -----------

Redeemable preferred stock (Note 13)
     Series B preferred  stock,  $.01 par, 81,579 and 244,736 shares  authorized
       and outstanding, full liquidation value
       of $81,579 ....................................................................................          --           87,680
                                                                                                         -----------    -----------

Commitments and contingencies (Notes 4, 5, 8, 10, 11 and 13)

Stockholders'  (deficit) equity (Notes 13 and 15) Series D preferred stock, $.01
     par, 1 share authorized and
       outstanding, full liquidation value of $1,400,000 (Note
                                                                                                    13)         --        1,399,044
     Series E preferred stock, $1 par, 4,000,000 shares
       authorized; 2,500,570 shares outstanding, full liquidation
       value at $2,500,600 ...........................................................................     2,500,570           --
     Common stock, $.01 par value, 40,000,000 shares
       authorized; 4,083,519 and 1,287,843 shares outstanding ........................................        40,835         12,878
     Additional paid-in capital ......................................................................     6,512,107      4,779,520
     Accumulated deficit .............................................................................    (8,050,476)    (4,465,595)
                                                                                                         -----------    -----------

                  Total stockholders' equity .........................................................     1,003,036      1,725,847
                                                                                                         -----------    -----------

                                                                                                         $ 9,378,618    $ 9,213,104
                                                                                                         ===========    ===========
</TABLE>

                 See accompanying notes to financial statements.

                                      F-41


<PAGE>

                       PLAY CO. TOYS & ENTERTAINMENT CORP.
                 (A SUBSIDIARY OF UNITED TEXTILES & TOYS CORP.)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>




                                                       March 31,
                                                  1997           1996


<S>                                              <C>             <C>         
Net sales (Note 2) ...........................   $ 19,624,276    $ 21,230,853
Cost of sales ................................     13,669,104      15,132,895
                                                 ------------    ------------
                  Gross profit ...............      5,955,172       6,097,958
                                                 ------------    ------------
Operating expenses:
    Operating expenses (Notes 11 and 12) .....      8,474,423       8,568,677
    Depreciation and amortization ............        407,015         407,261
    Costs associated with permanent closure of
      retail stores (Note 9) .................           --           129,577
                                                 ------------    ------------
                  Total operating expenses ...      8,881,438       9,105,515
                                                 ------------    ------------
Operating loss ...............................     (2,926,266)     (3,007,557)
Interest expense (Notes 4 and 5) .............        658,615         535,158
                                                 ------------    ------------
Net loss .....................................   $ (3,584,881)   $ (3,542,715)
                                                 ============    ============

Net loss applicable to common shares .........   $ (3,584,881)   $ (3,570,260)
                                                 ============    ============
Net loss per common share ....................   $      (1.29)   $      (2.77)
                                                 ============    ============

Weighted average number of common shares and
   share equivalents outstanding .............      2,791,876       1,287,843
                                                 ============    ============
</TABLE>



                 See accompanying notes to financial statements.
                                      F-42
<PAGE>
                       PLAY CO. TOYS & ENTERTAINMENT CORP.
                 (A SUBSIDIARY OF UNITED TEXTILES & TOYS CORP.)

                  STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY

<TABLE>
<CAPTION>



                                                                        Additional       Redeemable Preferred Stock             
                                              Common Stock              Paid-in          Series B                       Series D
                                             Shares        Amount       Capital          Shares         Amount          Shares 

<S>            <C>                          <C>         <C>           <C>                <C>        <C>                        
Balance, April 1, 1995 ................     1,287,843   $    12,878   $ 4,349,065        244,736    $   242,275           --   
Issuance of common stock options ......          --            --         458,000           --             --             --   
Conversion of stockholders' notes
   payable and related accrued interest
   to Series D preferred stock ........          --            --            --             --             --                1
Redemption of preferred stock .........          --            --            --         (163,157)      (163,157)          --   
Payment of accrued dividends ..........          --            --            --             --          (18,983)          --   
Accrued dividends on redeemable
   preferred stock ....................          --            --          (9,153)          --            9,153           --   
Accretion of discount on redeem-
   able preferred stock ...............          --            --         (18,392)          --           18,392           --   
Net loss for the year .................          --            --            --             --             --             --   
 
Balance, March 31, 1996 ...............     1,287,843        12,878     4,779,520         81,579         87,680              1

Redemption of preferred stock .........          --            --            --          (81,579)       (81,579)          --   
Payment of accrued dividends ..........          --            --            --             --           (6,101)          --   
Conversion of due to affiliate and
   related accrued interest to Series
   E Class I preferred stock ..........          --            --            --             --             --             --   
Issuance of Series E Class I
   preferred stock for cash ...........          --            --            --             --             --             --   
Conversion of Series E Class I
   preferred stock to common ..........     2,410,000        24,100       337,400           --             --             --   
Conversion of Series D preferred
   stock to common ....................       385,676         3,857     1,395,187           --             --               (1)
Net loss for the year .................          --            --            --             --             --             --   

Balance, March 31, 1997 ...............     4,083,519   $    40,835   $ 6,512,107           --      $      --             --   
                                          ===========   ===========   ===========    ===========    ===========    ===========

</TABLE>
<TABLE>
<CAPTION>


                                         See accompanying notes to financial statements.

 
                                                       Preferred Stock
                                                      Series E Class I          Accumulated
                                             Shares         Amount              Deficit

<S>                                              <C>            <C>            <C>       
Balance, April 1, 1995 ................          $--            $--            $(922,880)
Issuance of common stock options ......          --             --             --
Conversion of stockholders' notes
   payable and related accrued interest
   to Series D preferred stock ........          --             --             --
Redemption of preferred stock .........          --             --             --
Payment of accrued dividends ..........          --             --             --
Accrued dividends on redeemable
   preferred stock ....................          --             --             --
Accretion of discount on redeem-
   able preferred stock ...............          --             --             --
Net loss for the year .................          --             --       (3,542,715)


Balance, March 31, 1996 ...............          --             --       (4,465,595)

Redemption of preferred stock .........          --             --             --
Payment of accrued dividends ..........          --             --             --
Conversion of due to affiliate and
   related accrued interest to Series
   E Class I preferred stock ..........       528,070        528,070           --
Issuance of Series E Class I
   preferred stock for cash ...........     2,334,000      2,334,000           --
Conversion of Series E Class I
   preferred stock to common ..........      (361,500)      (361,500)          --
Conversion of Series D preferred
   stock to common ....................          --             --             --
Net loss for the year .................          --             --       (3,584,881)

Balance, March 31, 1997 ...............     2,500,570    $ 2,500,570    $(8,050,476)
</TABLE>

                 See accompanying notes to financial statements.
                                      F-43


<PAGE>
                       PLAY CO. TOYS & ENTERTAINMENT CORP.
                 (A SUBSIDIARY OF UNITED TEXTILES & TOYS CORP.)

                            STATEMENTS OF CASH FLOWS
                                    (Note 14)
<TABLE>
<CAPTION>

                                                                 March 31,
                                                          1997             1996

Cash flows from operating activities:

<S>                                                       <C>             <C>          
     Net loss .........................................   $ (3,584,881)   $ (3,542,715)
     Adjustments to reconcile net loss to net cash
       used for operating activities:
         Depreciation and amortization ................        407,015         407,261
         Amortization of common stock options .........        214,743          64,300
         Deferred rent ................................        (71,012)         57,719
     Increase (decrease) from changes in:
         Accounts receivable ..........................        (24,933)        586,827
         Merchandise inventories ......................        431,154       1,673,284
         Other current assets .........................        (13,912)        (52,099)
         Deposits and other assets ....................         94,867         (49,986)
         Accounts payable .............................        245,668        (380,817)
         Accrued expenses and other liabilities .......         25,329          60,054
                                                          ------------    ------------

                  Cash used for operating activities ..     (2,275,962)     (1,176,172)
                                                          ------------    ------------

Cash flows from investing activities:

     Purchases of property and equipment ..............     (1,024,127)       (340,311)
     Amounts due from stockholder .....................           --            17,788

                  Cash used for investing activities ..     (1,024,127)       (322,523)
                                                          ------------    ------------

Cash flows from financing activities:

     Change in bank overdraft .........................   $     26,574    $    108,751
     Borrowings under bank lines of credit ............           --         1,092,361
     Repayments under bank line of credit .............           --        (3,466,852)
     Borrowings under financing agreement .............     22,404,385       5,637,392
     Repayments under financing agreement .............    (21,368,535)     (2,234,367)
     Payments on capital lease obligations ............           --           (42,045)
     Repayment of notes payable .......................        (23,334)           --
     Due to affiliate .................................           --           528,070
     Redemption of preferred stock ....................        (81,579)       (163,157)
     Payment of dividends on preferred stock ..........         (6,101)        (18,982)
     Proceeds from issuance of preferred stock ........      2,334,000            --
                                                          ------------    ------------

                  Cash provided by financing activities      3,285,410       1,441,171
                                                          ------------    ------------

Net decrease in cash ..................................        (14,679)        (57,524)

Cash, beginning of year ...............................        192,401         249,925
                                                          ------------    ------------

Net cash, end of year .................................   $    177,722    $    192,401
                                                          ============    ============
</TABLE>

                 See accompanying notes to financial statements.

                                                      F-8


<PAGE>

1.       Summary of Accounting Policies

         Business Organization and Revenue Recognition

         Play Co.  Toys &  Entertainment  Corp.  (the  "Company")  is a Delaware
         corporation  that owns and  operates  retail  stores  which  sell toys,
         games,  hobby and craft  merchandise.  The Company had twenty-one  (21)
         retail stores located within Southern  California at March 31, 1997. In
         the beginning of 1996, the Company began to change its focus to include
         the sale of  educational,  new  electronic  interactive,  specialty and
         collectible toys and items.

         On May 7, 1993 the Company became a subsidiary of American Toys,  Inc.,
         (now  known  as  U.S.  Wireless  Corporation)  ("American  Toys")  when
         American  Toys  acquired 90% of the then  outstanding  shares of common
         stock  directly from the original  stockholders  (Note 13).  Accounting
         practices  prescribed by the Securities and Exchange  Commission  (SEC)
         normally require "push-down" accounting to revalue the Company's assets
         at the time of the acquisition. The effects of such were immaterial.

         In November 1994, the Company  completed an initial public  offering of
         common  stock and warrants  (Note 13) and is  therefore  subject to the
         accounting and reporting requirements of the SEC.

         In August 1996,  the Company  became a subsidiary of United  Textiles &
         Toys Corp. ("United  Textiles"),  formerly known as Mister Jay Fashions
         International   ("Mister   Jay"),   when   United   Textiles   acquired
         approximately  57% of the  then  outstanding  shares  of  common  stock
         directly  from American Toys (Note 13). When American Toys spun-off its
         investment  in the  Company  to  American  Toys'  stockholders,  United
         Textiles was a majority stockholder of American Toys at the record date
         for the spin-off.

         Merchandise Inventories

         Merchandise  inventories  are  stated at the  lower of cost  (first-in,
         first-out method - "FIFO") or market.





<PAGE>
1.       Summary of Accounting Policies (continued)

         Property and Equipment

         Property  and   equipment  is  recorded  at  cost.   Depreciation   and
         amortization  are  provided  using the  straight-line  method  over the
         estimated useful lives (3 - 15 years) of the related assets.  Leasehold
         improvements  are amortized  over the lesser of the related lease terms
         or the  estimated  useful lives of the  improvements.  Maintenance  and
         repairs are charged to operations as incurred.

         Store Opening and Closing Costs

         Costs  incurred  to open a new  retail  location  such as  advertising,
         training expenses and salaries of newly hired employees are expensed as
         incurred and improvements to leased  facilities are  capitalized.  Upon
         permanently closing a retail location,  the costs to relocate fixtures,
         terminate  employees  and other related costs are expensed as incurred.
         In  addition,  the  unamortized  balance  of  any  abandoned  leasehold
         improvements are expensed.  If significant,  the remaining payments due
         under lease  agreements are discounted to present value and recorded as
         an expense and a liability  to the extent such are not offset by rental
         income generated through existing sub-leases of the property.

         Income Taxes

         The Company uses the liability method of accounting for income taxes in
         accordance  with Statement of Financial  Accounting  Standards No. 109,
         Accounting for Income Taxes. Deferred income taxes are recognized based
         on the differences  between financial statement and income tax bases of
         assets and  liabilities  using  enacted rates in effect for the year in
         which the differences are expected to reverse. Valuation allowances are
         established,  when necessary,  to reduce the deferred tax assets to the
         amount  expected  to  be  realized.  The  provision  for  income  taxes
         represents  the tax  payable  for the period and the change  during the
         period in deferred tax assets and liabilities,  including the effect of
         change in the valuation allowance, if any.




<PAGE>
         1.       Summary of Accounting Policies (continued)

         Net Loss Per Share

         Net loss per share  has been  computed  by  dividing  net  loss,  after
         reduction  for  preferred  stock  dividends  and the  accretion  of the
         discount on redeemable  preferred stock, by the weighted average number
         of common shares and common share equivalents  outstanding  during each
         period.  Outstanding stock options were considered to be anti-dilutive.
         Dividends  accrued  and  accretion  recorded  on the Series B preferred
         stock  aggregated  zero and  $27,545 for the years ended March 31, 1997
         and 1996.

         Additionally,  share and per  share  amounts  have  been  retroactively
         adjusted  for the  effects of the  one-for-three  reverse  stock  split
         expected  to be  approved by the  Company's  stockholders  at a special
         meeting on June 30, 1997 (Note 15).

         Statements of Cash Flows

         For purpose of the statements of cash flows, the Company  considers all
         highly liquid investments  purchased with an original maturity of three
         months or less to be cash equivalents.

         Fair Value of Financial Instruments

         The carrying amount of the Company's financial instruments,  consisting
         of accounts receivable, accounts payable, and borrowings,  approximates
         their fair value.

         Use of Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities, revenues and expenses, and disclosure of contingent assets
         and liabilities at the date of the financial statements. Actual amounts
         could differ from those estimates.

         Reclassifications

         Certain 1996 amounts have been  reclassified to conform to current year
         presentation.  The reclassifications  have no effect upon the Company's
         financial position or results of operations as previously reported.




<PAGE>
1.       Summary of Accounting Policies (continued)

         Impairment of Long-Lived Assets

         Statement of Financial  Accounting  Standards No. 121,  "Accounting for
         the  Impairment  of  Long-Lived  Assets  and  Long-Lived  Assets  to be
         Disposed Of," requires that long-lived assets and certain  identifiable
         intangibles to be held and used by an entity be reviewed for impairment
         whenever events or changes in circumstances  indicate that the carrying
         amount of an asset may not be recoverable. The Company adopted SFAS 121
         effective  April 1, 1996.  There was no impact of such  adoption on the
         Company's financial condition and results of operations.

         Stock-Based Compensation

         Statement of Financial  Accounting  Standards No. 123,  "Accounting for
         Stock-Based   Compensation,"   established   financial  accounting  and
         reporting  standards for stock-based  employee  compensation  plans and
         certain other transactions involving the issuance of stock. The Company
         adopted SFAS 123 effective  April 1, 1996.  There was no impact of such
         adoption  on  the   Company's   financial   condition  and  results  of
         operations.

         New Accounting Pronouncements

         In February 1997,  the Financial  Accounting  Standards  Board ("FASB")
         issued SFAS No. 128, Earnings Per Share ("EPS").  SFAS No. 128 requires
         all  companies  to  present  "basic"  EPS and,  if they  have a complex
         capital  structure,  "diluted" EPS. Under SFAS No. 128,  "basic" EPS is
         computed  by  dividing   income   (adjusted  for  any  preferred  stock
         dividends) by the weighted average number of common shares  outstanding
         during  the  period.  "Diluted"  EPS is  computed  by  dividing  income
         (adjusted for any preferred  stock or convertible  stock  dividends and
         any  potential  income  or loss  from  convertible  securities)  by the
         weighted average number of common shares  outstanding during the period
         plus the  number of  additional  common  shares  that  would  have been
         outstanding if any dilutive potential common stock had been issued. The
         issuance  of  antidilutive   potential   common  stock  should  not  be
         considered in the calculation.
          In addition,  SFAS No. 128  requires  certain  additional  disclosures
         relating to EPS.  SFAS No. 128 is effective  for  financial  statements
         issued for periods  ending after  December 15, 1997.  Thus, the Company
         expects to adopt the provisions of this statement in fiscal year 1998.




<PAGE>

2.       TKO Product Line

         During the year ended  March 31,  1995,  the  Company  began  wholesale
         distribution  of its TKO  product  line items.  Wholesale  sales of TKO
         items for the year ended March 31, 1997 and 1996 approximated  $202,000
         and $570,000, respectively. At March 31, 1997 and 1996, the Company had
         accounts  receivable from wholesale sales of TKO items totaling $17,747
         and $35,273, respectively.

         The milk cap game (principal  product of the TKO product line) has lost
         its popularity since its  introduction to Southern  California in 1994.
         Accordingly,  milk cap game  pieces  and  accessories  sold  under  the
         Company's  TKO  trademark  have  reached the end of their  product life
         cycle.  Management  anticipates  that future sales of the Company's TKO
         product line items will be insignificant.

3.       Property and Equipment

Property and equipment consisted of the following:
<TABLE>
<CAPTION>
                                                                                                         March 31,
                                                                                                       1997           1996

<S>                                                                                             <C>            <C>        
Furniture, fixtures and equipment ...........................................................   $ 3,231,161    $ 2,918,621

Leasehold improvements ......................................................................     1,220,246        542,785
Computerized inventory management system ....................................................       468,210        484,074
Signs .......................................................................................       280,034        265,959
Vehicles ....................................................................................       104,912        104,912


                                                                                                  5,304,563      4,316,351

Accumulated depreciation and amortization ...................................................    (2,828,913)    (2,457,813)

                                                                                                $ 2,475,650    $ 1,858,538
</TABLE>

<PAGE>
         4.       Bank Line of Credit

         In  November  1995,  European  American  Capital  Corp.  ("EACC"),   an
         affiliate,  provided  a  $2,000,000  letter  of  credit  for  financing
         purposes  in  connection  with a bank  line  of  credit  agreement.  In
         connection therewith, the Company granted an option to purchase 350,000
         shares of common stock.  The Company  estimated the value of the option
         to be $224,000 and recorded such amount as additional  paid-in capital.
         For the years ended March 31, 1997 and 1996,  amortization of the value
         of the option  aggregated  $97,740  and  $44,800,  respectively  and is
         included in interest  expense.  The unamortized  value of the option at
         March 31,  1997 and 1996 was $81,460  and  $179,200  and is included in
         other  assets.  The  exercise  period  expired on April 16, 1996 and no
         options were exercised.

         On February 7, 1996, the Company obtained alternative financing and the
         entire  balance  due under the bank line of credit  was  repaid and the
         agreement  was  terminated.  The  letter of credit was  transferred  as
         collateral under the new financing arrangement (Note 5).

5.       Financing Agreement

         On February 7, 1996,  the Company  borrowed,  under an agreement with a
         financing company,  approximately $2,243,000,  which proceeds were used
         to repay the then outstanding  borrowings under the bank line of credit
         agreement  (Note 4).  The  financing  agreement  provides  for  maximum
         borrowings up to  $7,000,000  based upon a percentage of the cost value
         of eligible inventory, as defined. Outstanding borrowings bear interest
         at 1.5% above the prime rate,  as defined  (the prime rate at March 31,
         1997 was  8.5%).  The  agreement  matures  February  1, 1998 and can be
         renewed for one additional year at the lender's option.

         The agreement  includes a financial  covenant  requiring the Company to
         maintain, at all times, adjusted net worth, as defined, of $500,000. At
         March 31,  1997,  the Company  was in  compliance  with this  financial
         covenant.

         The financing  agreement is secured by substantially  all assets of the
         Company,  is  guaranteed  by United  Textiles and  collateralized  by a
         $2,000,000  letter of credit  provided by EACC. In connection  with the
         letter of credit  provided by EACC, the Company  granted to EACC (i) an
         option  to  purchase  up to an  aggregate  of  1,250,000  shares of the
         Company's common stock at a purchase price of 25 percent of the closing
         bid price for the Company's common stock on




<PAGE>
5.       Financing Agreement (continued)

         the last  business  day prior to  exercise,  for a period of six months
         commencing  February 7, 1996, such option having  expired,  and (ii) an
         option to  purchase  up to an  aggregate  of  20,000,000  shares of the
         Company's  Series E preferred  stock  (Note 13) at a purchase  price of
         $1.00 per share during the period from May 9, 1996 through  January 30,
         1998.  The  Company's  estimated  value of the option  described in (i)
         above is insignificant to the accompanying  financial  statements.  The
         Company estimated the value of the option described in (ii) above to be
         $234,000 and recorded such amount as additional  paid-in  capital.  For
         the years ended March 31, 1997 and 1996,  amortization  of the value of
         the  option  aggregated  $117,000  and  $19,500,  respectively,  and is
         included  in  interest  expense.  The  unamortized  value of the option
         aggregates  $97,500 at March 31, 1997 and  $214,500 at March 31,  1996,
         and is included in other assets.

         In March 1997,  the agreement was amended  during the year to allow the
         Company  to  execute  a  Note  payable  to  the   stockholder  of  Toys
         International  Inc. for $265,000 (Notes 6 and 7). The financing company
         continues to hold a senior  interest in the assets of the  Company.  In
         addition,  United  Textiles was  substituted  for American  Toys as the
         guarantor due to the spin-off of the Play Co. ownership.  Further,  the
         agreement was amended to increase the borrowing ratios on inventory and
         increase special loan advances provided EACC issue an additional letter
         of credit in the amount of $1,000,000 which was provided in March 1997.
         As such, at March 31, 1997, the agreement is  collateralized by letters
         of credit aggregating $3,000,000.

6.       Asset Purchase Agreement

         On January 16, 1997 the board of directors of the Company  approved the
         purchase of the assets and assumption of certain  existing  liabilities
         of Toys  International.  Toys  International is a high-end  retailer of
         toys which  operated three mall  locations in Southern  California.  As
         part of the purchase agreement,  the Company obtained the rights to the
         Toys International and Tutti Animali operating name trademarks and also
         assumed the existing leases at the three locations.  The total purchase
         price was $1,024,184  which  consisted  mainly of inventory and certain
         prepaid expenses and deposits.  The purchase price was paid in the form
         of a cash payment of $759,184 in January 1997 and the  execution of two
         promissory Notes aggregating $265,000 (Note 7).




<PAGE>
         7.       Notes Payable



         Note  payable  to  stockholder  of  Toys  International,   non-interest
         bearing,  guaranteed by United Textiles,  payable in five  installments
         ranging from  $11,667 to $15,000  through  maturity,  on June 16, 1997.
         Note  is  subordinate  to the  financing  agreement  with  a  financial
         institution (Note 5).    

         Note payable to stockholder of Toys International non-interest bearing,
         guaranteed by United  Textiles,  payable in quarterly  installments  of
         $25,000 through  maturity,  on January 16, 1999. Note is subordinate to
         the financing agreement with a financial institution (Note 5).         


                                                            March 31,
                                                  1997                     1996

Total long-term debt                              241,666                  -

Less current portion                              (141,666)                -

Long-term debt                                    $100,000                 $-



            Future obligations under these promissory Notes as of March 31, 1997
are as follows:

Year
March 31 Amount

1998 $ 141,666
---------
1999 100,000
--------------

$ 241,666




<PAGE>
8.       Due to Affiliate

         During  March 1996,  EACC loaned  $500,000 to the Company and  incurred
         costs related to the financing  agreement (Note 5) totaling $28,070. On
         June 3, 1996,  EACC exercised  options to acquire 528,070 shares of the
         Company's  Series E preferred stock (Notes 5 and 13) and the amount due
         to affiliate, aggregating $528,070 at March 31, 1996, was extinguished.
         This transaction resulted in an increase in the Company's stockholders'
         equity of $528,070.

9.       Costs Associated with Closure of Retail Stores

         During the year ended March 31, 1996,  the Company  permanently  closed
         four of its retail stores which were not meeting the  objectives of the
         Company.  The costs  associated  with the  permanent  closure  of these
         stores,  which included the write-off of leasehold  improvements,  were
         accrued as of March 31,  1996.  During the year ended  March 31,  1996,
         those stores generated sales of approximately  $3,069,000 and operating
         losses of approximately $309,000 before allocation of certain corporate
         charges, interest and income taxes.

         As a  result  of the  Company  permanently  closing  one of its  retail
         locations in June 1995, the Company recorded an expense during the year
         ended March 31, 1996 of $85,000 as a  settlement  with the landlord for
         the  early  termination  of the  lease.  The  settlement  required  six
         quarterly  installments  of $14,167  through  August 1, 1997,  of which
         $28,332  was  outstanding  at March 31, 1997 and is included in accrued
         expenses and other liabilities in the accompanying balance sheet.

         In March,  April, and May 1997, the Company vacated four locations with
         the  intent  of  temporarily  closing  the  stores  and  reopening  the
         locations  during the  Christmas  1997 peak  season.  The  Company  may
         consider  temporarily  closing  the  stores  again  thereafter.  In the
         meantime,  the Company and certain of the landlords  are  attempting to
         find  suitable  sub-tenants  to occupy the  locations and to assume the
         lease responsibilities.

     In June 1997,  landlords  for three of the four  locations  filed  lawsuits
against the Company to collect unpaid rent on the stores, which has been accrued
to date by the Company;  as well as rental obligations due on the balance of the
lease terms. Management expects that these suits will ultimately be settled with
the landlords without a material effect on the financial statements.




<PAGE>
10.      Income Taxes

         Deferred  income  taxes  reflect  the  net  tax  effects  of  temporary
         differences  between the carrying amounts of assets and liabilities for
         financial  reporting  purposes  and the  amounts  used for  income  tax
         purposes. The tax effects of significant items comprising the Company's
         net deferred income tax assets and liabilities are as follows:
<TABLE>
<CAPTION>

                                                                                             March 31,
                                                                                     1997                1996

<S>                                                                             <C>                <C>              
         Inventories                                                            $      (183,192)   $        (57,883)
         AMT tax credits                                                                (23,260)            (23,260)
         Accrued expenses                                                               (15,119)            (17,816)
                                                                                ---------------    ----------------

                  Current portion of net deferred income
                    tax (assets) liabilities                                           (221,571)            (98,959)
                                                                                ---------------    ----------------

         Depreciation and amortization                                                  150,857             246,185

         Net operating loss carryforwards                                            (3,142,710)         (1,958,123)
         Deferred rent liability                                                        (50,945)            (79,447)
                                                                                ---------------    ----------------
                  Long-term portion of net deferred
                    income tax (assets) liabilities                                  (3,042,798)         (1,791,385)
                                                                               ---------------    ----------------
         Total net deferred income tax (assets) liabilities                          (3,264,369)         (1,890,344)

         Valuation allowance                                                          3,264,369           1,890,344

                  Net deferred income taxes                                     $             -    $              -
</TABLE>

         At March 31, 1997, a 100% valuation  allowance has been provided on the
         net deferred income tax assets since the Company can not determine that
         it is "more likely than not" to be realized.

<PAGE>
10.      Income Taxes (continued)

         The  reconciliation  of income taxes computed at the federal  statutory
         tax  rate to  income  taxes  at the  effective  income  tax rate in the
         statements of operations is as follows:
<TABLE>
<CAPTION>

                                                                      March 31,
                                                                      1997      1996

<S>                                                                   <C>       <C>    
Federal statutory income tax (benefit) rate                           (34.0)%   (34.0)%
State income taxes, net of federal benefit                            0.1       0.1
Non-deductible expenses                                               -         2.0
Change in valuation allowance                                         33.9      31.9
------------- -------

Effective income tax rate                                             - %       - %
</TABLE>


         At  March  31,  1997,   the  Company  has  net  operating   loss  (NOL)
         carryforwards  of  approximately  $8,000,000  for federal  purposes and
         approximately  $4,000,000  for state  purposes.  The  federal  NOLs are
         available to offset future  taxable  income and expire at various dates
         through March 31, 2012 while the state NOLs are available and expire at
         various dates through March 31, 2002.

         A portion of the NOLs described  above are subject to provisions of the
         Internal  Revenue  Code 382  which  limits  use of net  operating  loss
         carryforwards when changes of ownership of more than 50% occur during a
         three year testing  period.  During the year ended March 31, 1994,  the
         Company's  ownership changed by more than 50% as a result of the common
         and preferred stock transactions  described in Note 13. Further changes
         in common and preferred stock ownership during the year ended March 31,
         1997 have also potentially  limited the use of NOLs. The effect of such
         limitation has yet to be determined.

         NOLs could be further  limited upon the exercise of outstanding  stock
         options or an initial public offering of preferred stock (Note 15).




<PAGE>
11.      Commitments and Contingencies

         1994 Stock Option Plan

         In June 1994,  the  Company  adopted  the 1994 Stock  Option  Plan (the
         "Plan") which provides for options to purchase an aggregate of not more
         than 50,000 post-reverse split shares of common stock as may be granted
         from time to time by the Company's Board of Directors.  Concurrent with
         the  adoption  of the Plan,  an option to purchase  3,334  post-reverse
         split  shares of common  stock at $6.30 per share;  as adjusted for the
         one-for-three  reverse  split  (Note 15) was  granted to the  Company's
         Secretary/Treasurer.  As of March 31,  1997,  no  options  to  purchase
         common stock had been exercised.

         401(k) Employee Stock Ownership Plan

         In August 1994, the Company  adopted a 401(k)  Employee Stock Ownership
         Plan (the  "Plan")  which  covers  substantially  all  employees of the
         Company.  The  Plan  includes  provisions  for both an  Employee  Stock
         Ownership Plan ("ESOP") and a 401(k) Plan.

         The ESOP allows  only  contributions  by the Company  which can be made
         annually at the  discretion  of the Company's  Board of Directors.  The
         ESOP is designed to invest  primarily  in the  Company's  stock.  As of
         March 31,  1997,  there had been no  transactions  with  regards to the
         ESOP.

         The 401(k)  portion of the Plan is  contributed  to by the employees of
         the Company through payroll  deductions.  The Company makes no matching
         contributions to the 401(k).

         Operating Leases

         The Company  leases its retail  store  properties  under  noncancelable
         operating  lease  agreements  which expire  through  September 2005 and
         require various  minimum annual rentals.  Several of the leases provide
         for  renewal  options  to extend  the  leases  for  additional  five or
         ten-year  periods.  Certain  store  leases also  require the payment of
         property taxes,  normal maintenance and insurance on the properties and
         additional  rents  based on  percentages  of sales in excess of various
         specified retail sales levels.

         During the years ended March 31,  1997 and 1996,  the Company  incurred
         rental expense under all operating leases of $2,681,728 and $2,841,215,
         respectively.

         Contingent rent expense was insignificant during the years ended March
         31, 1997 and 1996.

<PAGE>
         11.      Commitments and Contingencies (continued)

         Operating Leases (continued)

         During the years ended March 31, 1997 and 1996, the Company  sub-leased
         portions of its  warehouse  building and a portion of one of its retail
         locations under noncancelable operating leases. Sub-lease income during
         the years ended March 31, 1997 and 1996 was $134,093 and $93,822  (Note
         12).

         At  March  31,  1997  the  aggregate   future  minimum  lease  payments
         (receipts) due under these noncancelable leases are as follows:
<TABLE>
<CAPTION>


                      Year Ending                                                  Operating              Operating
                       March 31,                                                    Leases                Sub-Leases

                         <S>                                                         <C>                  <C>
                         1998                                                   $     2,099,491    $      (67,066)
                         1999                                                         1,776,806           (65,937)
                         2000                                                         1,641,013           (67,153)
                         2001                                                         1,014,003           -
                         2002                                                           774,325           -
                      Thereafter                                                      1,968,345           -

                  Total minimum lease payments (receipts)                        $    9,273,983    $      (200,156)
</TABLE>

         Dependence on Suppliers

         Approximately  thirty-one  percent  (31%)  of the  Company's  inventory
         purchases are made directly  from five (5)  manufacturers.  The Company
         typically  purchases products from its suppliers on credit arrangements
         provided by the manufacturers.  The termination of a credit line or the
         loss  of a  major  supplier  or  the  deterioration  of  the  Company's
         relationship with a major supplier could have a material adverse effect
         on the Company's business.

<PAGE>
         11.      Commitments and Contingencies (continued)

         Seasonality

         The Company's  business is highly  seasonal with a large portion of its
         revenues and profits  being  derived  during the months of November and
         December.  Accordingly,  in order for the Company to  operate,  it must
         obtain substantial short-term borrowings from lenders and the Company's
         suppliers  during  the  first  three-quarters  of each  fiscal  year to
         purchase inventory and for operating  expenditures.  Historically,  the
         Company  has  been  able  to  obtain  such  credit   arrangements   and
         substantially  repay the amounts  borrowed  from  suppliers  and reduce
         outstanding borrowings from its lender during the fourth quarter of its
         fiscal year.

         Joint Venture

         On  March  14,  1995,  the  Company  entered  into  an  agreement  (the
         "Agreement"),  with an individual to form a Limited  Liability  Company
         (the "LLC") to engage in the  distribution  of toy  products.  Profits,
         losses and  distributions  of the LLC were to be allocated  pursuant to
         the above percentage  interests.  On December 31, 1995, the Company and
         the individual entered into a termination agreement whereby the Company
         withdrew from the LLC. In connection therewith, the Company received an
         aggregate of $32,000  representing  the Company's  share of net profits
         earned  by the  LLC  through  December  31,  1995,  and  return  of the
         Company's initial investment in the LLC totaling $800.

         The Company made purchases from the LLC at five percent above the LLC's
         cost  which  aggregated  approximately  $263,000  during the year ended
         March 31, 1996.  Due to  termination  of this venture in December 1995,
         such  agreement had no impact on the Company's  operations for the year
         ended March 31, 1997.

12.      Related Party Transactions

         Office and Warehouse Lease

         The Company leases an office and warehouse  building from a partnership
         of which one of the  partners  is a Company  officer,  stockholder  and
         director.  Rent expense  under this lease for the years ended March 31,
         1997 and 1996 totaled  $227,546 and $227,916,  respectively.  The lease
         expires in April 2000.




<PAGE>
         12.      Related Party Transactions (continued)

         Sub-lease

         During the years ended March 31, 1997 and 1996, sub-lease rental income
         included $68,173 and $54,422,  from an entity in which stockholders and
         employees of the Company have an ownership interest.

         Consulting Agreement

         During  the year  ended  March  31,  1997 the  Company  entered  into a
         consulting  agreement with the stockholder of Toys  International.  The
         term of the agreement  commenced on January 16, 1997,  expired on April
         16,  1997 and  called  for three  monthly  payments  of  $10,000  each.
         Expenses  related to the  agreement  totaled  $6,666 for the year ended
         March 31, 1997.

         Board of Director Fees

         The Company  made  payments  aggregating  $7,000 to the chairman of the
         board of  directors  for various  consulting  services  during the year
         ended March 31, 1997.

13.      Equity Transactions

         On April 3, 1995, the Company  redeemed an aggregate  122,368 shares of
         Series B preferred  stock at the redemption  price of $122,368 and paid
         dividends on the Series B preferred stock aggregating $15,931. On March
         4, 1996,  the Company  redeemed an aggregate  40,789 shares of Series B
         preferred  stock at the redemption  price of $40,789 and paid dividends
         on the Series B preferred stock aggregating $3,052.

         All unpaid  dividends due on the Series A and Series B preferred stock,
         aggregating  $6,101 as of March 31,  1996,  have been  accrued  and are
         reflected  in  the   respective   preferred   stock   balances  in  the
         accompanying balance sheets.

         In April 1996, the Company redeemed all remaining outstanding shares of
         Series B preferred stock,  aggregating  81,579, at the redemption price
         of  $81,579  and  paid  dividends  on  the  Series  B  preferred  stock
         aggregating $6,101.





<PAGE>
13.      Equity Transactions (continued)

         In April 1996, EACC exercised  options to acquire 528,070 shares of the
         Company's Series E preferred stock. In connection therewith, the amount
         due  to  affiliate,   aggregating  $528,070  at  March  31,  1996,  was
         extinguished.

         On June 30,  1996 the  Company  issued  334,000  shares of the Series E
         Class I preferred  stock to EACC at a rate of $1.00 per share for total
         cash  considerations  of $334,000.  The shares were then transferred to
         United Textiles.

         On August 8, 1996 the Company amended its Certificate of  Incorporation
         upon approval by the board of directors to allow the Series D preferred
         stock to be convertible  into 385,676  post-reverse  split shares (Note
         15) of the Company's common stock. In addition,  the Company  increased
         the number of  authorized  shares of common  stock to  40,000,000.  The
         newly  authorized  common stock has identical  rights to the previously
         authorized common stock.  Further,  the Company authorized the issuance
         of Series E  preferred  stock to be issued in two  separate  classes of
         1,900,000  shares,  designated  Series  E  Class I and  100,000  shares
         designated  Series  E  Class  II.  The  Series  E  preferred  stock  is
         non-voting  and provides for  cumulative  dividends to holders at $1.00
         per  share.  The  dividends  are  payable  within  90 days of each year
         anniversary  of  issuance  and may  only be  declared  by the  board of
         directors out of legally  available  funds. The board of directors have
         not declared any dividends at March 31, 1997 and the annual anniversary
         date of any  issuance  has not  occurred.  The  holders of the Series E
         preferred  stock  have the  option of  converting  each share held into
         twenty (20) of the Company's  common stock. The holders of the Series E
         preferred stock shall be entitled to be paid an amount in cash equal to
         $1.00 per share prior to any  distributions to the holders of shares of
         common stock.  Should the Company's  assets be  insufficient to pay the
         holders of the Series E  preferred  stock,  the holders of the Series E
         preferred  stock shall share ratably,  in any  distributions,  with any
         other  equivalent  securities of the Company that may be established by
         the  Company's  board  of  directors.  See  Note 15 for  discussion  of
         additional  subsequent  changes to the  Company's  common and preferred
         stock capital structure.

         On August 11,  1996,  American  Toys  converted  its share of preferred
         Series D stock into 385,676  post-reverse split shares (Note 15) of the
         Company's  common stock.  At this time,  American Toys owned  1,235,319
         post-reverse  split shares (Note 15) of the common stock of the Company
         which were  spun-off to the  majority  stockholder  of  American  Toys,
         United  Textiles.  As a result,  United  Textiles  became the  majority
         stockholder of the Company.





<PAGE>
13.      Equity Transactions (continued)

         In August 1996,  the 334,000  Series E Class I preferred  stock held by
         United Textiles was converted into 2,226,667  post-reverse split shares
         (Note 15) of the Company's common stock. In addition, in February 1997,
         EACC  converted  27,500 shares of the Series E Class I preferred  stock
         into  183,333  post-reverse  split  shares  (Note 15) of the  Company's
         common  stock  all  of  which  were  transferred  to  two  unaffiliated
         companies.

         In October 1996, EACC exercised  options to acquire 500,000 and 300,000
         shares of Series E Class I  preferred  stock.  In  January  1997,  EACC
         exercised options to acquire an additional 1,200,000 shares of Series E
         Class I preferred stock. All options were exercised at $1.00 per share.

         On  February  7,  1997,   the  Company   amended  its   certificate  of
         incorporation to increase the authorized  Series E preferred stock from
         2,000,000 to 4,000,000 shares of which 3,900,000 are designated  Series
         E Class I preferred  stock and 100,000 shares are  designated  Series E
         Class II preferred  stock.  See Note 15 for  discussion  of  additional
         subsequent  changes to the Company's common and preferred stock capital
         structure.

14.      Supplemental Cash Flow Information

         Cash paid for income taxes and interest was as follows:

                                             Years Ended March 31,
                                             1997                1996

Interest paid                                $ 443,875           $ 464,832
Income taxes                                 $ 800               $ 800



         For the year  ended  March  31,  1997,  non-cash  financing  activities
         include  the  extinguishment  of balance due to  affiliate  aggregating
         $528,070 in exchange  for 528,070  shares of Series E Class I preferred
         stock (Note 5), the  conversion on 1 share of Series D preferred  stock
         for 385,676  post-reverse  split shares (Note 15) of common stock (Note
         13) and the  conversion of 361,500 shares of Series E Class I preferred
         stock  for  2,410,000  post-reverse  split  shares  (Note 15) of common
         stock. In addition,  the Company incurred  $265,000 in Notes payable to
         the stockholder of Toys International as a result of the asset purchase
         which consisted mainly of inventory.






<PAGE>
         14.      Supplemental Cash Flow Information (continued)

         For the year  ended  March  31,  1996,  non-cash  financing  activities
         include the  extinguishment  of stockholders  Notes payable and related
         accrued interest,  aggregating $1,399,044, in exchange for one share of
         Series D  preferred  stock (Note 13) and the  issuance of common  stock
         options aggregating $458,000 (Notes 4 and 5).

15.      Subsequent Events

         Termination of Warehouse Lease

         In April 1997, the Company  negotiated a settlement with a landlord for
         an excess warehouse facility, whereby the Company was released from the
         lease  obligation  for  a  settlement  of  $60,000.  This  early  lease
         termination  will result in annual  savings of  approximately  $235,000
         based on the original scheduled lease term through April 2000.

         Additional Financing

         On  various  dates  subsequent  to March 31,  1997,  affiliates  of the
         majority  stockholder of United Textiles  advanced amounts  aggregating
         $700,000 to the Company.  Such  advances have been  represented  by the
         providers  to  be  advances  against  the  future  issuance  of  equity
         securities,  the exact  form and number of shares of which is yet to be
         determined.  The providers of such funds have further  represented that
         such advances are not a loan and the Company has no obligation to repay
         such funds.

         Additionally,  the  individual,  beneficial,  majority  stockholder  of
         United  Textiles  has  represented  his intent  and  ability to provide
         additional  working  capital to the Company,  should such be necessary,
         through September 1998.

         Changes in Capital Structure

         On  June  10,  1997,  the  Company  mailed  a  Proxy  Statement  to its
         stockholders announcing a special meeting of the Company's stockholders
         to  be  held  on  June  30,  1997.   The  issues  being   presented  to
         stockholders' approval would have the following effect on the Company's
         capital structure. In the Proxy Statement, the Company has informed the
         stockholders  that  directors  and  officers  of the  Company and other
         principal  stockholders  owning of record,  beneficially,  directly and
         indirectly,  an aggregate  of  approximately  59.9% of the  outstanding
         shares on the record date,  have agreed to vote in favor of approval of
         the proposals.





<PAGE>
         15.      Subsequent Events (continued)

         Changes in Capital Structure (continued)

     A  one-for-three  reverse split of the Company's  common stock.  Effects of
such  reverse  split  have been  retroactively  adjusted  to share and per share
amounts in the financial statements.

     The elimination of Series E Class I preferred stock. There are no shares of
Series E Class I preferred stock outstanding.

     1 The  elimination  of the  dividend  provisions  on the Series E preferred
stock.

     1 The  reduction of the ratio for Series E preferred  stock  conversion  to
shares of common stock from 20 to 1 to a ratio of 6 to 1.

     The  authorization  for  the  issuance  of up to  1,000,000  shares  of the
Company's  Series  E Class II  preferred  stock  by the  Company  for sale in an
Initial Public Offering.

     Such changes,  once stockholder votes are confirmed,  are to be effected by
filing an amendment to the Company's Certificate of Incorporation.

     The Company has  submitted  a proposal to the Nasdaq  stock  market for its
review  describing  the  proposed  transaction  in items 2) to 5) above  and has
requested  Nasdaq to consider  approving the trading of the  Company's  Series E
preferred  stock in the event that an  offering is  consummated.  Nasdaq has not
responded to the request as of June 10, 1997.

<PAGE>
                  
                                      10.76

                      Lease Agreement for Store-Riverside.
<PAGE>

                              SHOPPING CENTER LEASE






                             HUGHES RIVERSIDE LTD.,
                        a California limited partnership

                                  ("Landlord~)






                              PLAY CO. TOYS, INC.,
                             a Delaware corporation

                                   ("Tenant")

                                dba Play Co. Toys




<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS
                                                                                                                Page
<S>                                                                                                                <C>
ARTICLE        I            FUNDAMENTAL LEASE PROVISIONS                                                           1
ARTICLE        II           EXHIBITS                                                                               2
ARTICLE        III          PREMISES                                                                               2
               3.1          Premises                                                                               2
ARTICLE        IV           TERM                                                                                   2
               4.1          Duration
                                                                                                                   2
               4.2          Option to Extend                                                         ...           3
               4.3          Commencement                                                                           3
               4.4          Tenant's Certificate                                                                   4
               4.5          Automatic Termination                                                    ...           4
               4.6          Definition of "Lease Year"                                                             4
ARTICLE        V            RENT
                                                                                                                   4
                5.1         Minimum Annual Rent                                                                    4
                5.2         Percentage Rent                                                                        5
                5.3         "Net" Lease  . .                                                                       8
                5.4         Additional Rent                                                                        8
                5.5         Timely Payment of Rent                                                                 9
                5.6         Limitations on Rent Adjustments                                                        9
ARTICLE VI                  INTENTIONALLY OMITTED
                                                                                                                   9
     ARTICLE VII            USE                                                                                    9
               7.1          Limitations on Use                                                                     9
               7.2          Further Limitations on Use                                                            10
               7.3          Compliance with Laws                                                                  11
               7.4          Trash Removal                                                                         11
               7.5          Compliance with Rules and Regulations                                                 11
               7.6          Deliveries . . . .                                                                    12
               7.7          Hazardous Waste and Materials                                                         12
ARTICLE VIII                TAXES AND INSURANCE                                                                   13
                8.1         Taxes and Insurance                                                                   13
                8.2         Definition of "Floor Area"                                                            14
                8.3         Allocation of Taxes                                                                   14   
                8.4        Payment in Installments                                                                15
                8.5        Allocation of Insurance                                     o . .                  . . 15
                8.6         Definition of Taxes                                                                   15
                8.7         Tax on Rent                                                                           16
ARTICLE        IX           UTILITIES SERVICES                                                                    16
               9.1          Utility Charges                                                                       16
                 9.2        Failure to Pay                                                                        16
                 9.3        No Liability                                                                          16
ARTICLE        X            INDEMNITY - INSURANCE - WAIVER OF SUBROGATION  . . . .                                17
               10.1         Indemnity by Tenant                      .                                            17
                 10.2       Waiver of Subrogation                                                                 17
                 10.3       Insurance Maintained by Tenant                                                        17
                 10.4       Insurance Requirements .                                                              18
                 10.5       Blanket Policy                                                                        19
                 10.6         Insurance Maintained by Landlord                                                    19
               10.7         Avoidance of Increased Risk                                                           19
ARTICLE XI                  TENANT'S RIGHTS TO MAKE ALTERATIONS AND
                            IMPROVEMENTS                                                                          20
                 11.1       Alterations and Improvements                                                          20
                11.2        Delivery of Permits and Contracts.                                                    21
                11.3        Tenant's Insurance of Improvements .                                                  21


PS2\267\O64I2~oo3 l\2154990.5 aO8'O7~95                   -1-

<PAGE>
ARTICLE        XII          MECHANIC'S LIENS              .   .                                                    22.
               12 - 1       Free of Liens  -                 -                                                     22
               12.2         Contest of Liens              .   . .                          -                       22
               12.3         Landlord's Right to Pay                                                                22
               12.4         Notice of Lien                                                                         22
               12.5         Advance Notice for Nonresponsibility                                                   23

ARTICLE        XIII         ADVERTISING MEDIA                                                                      23
               13.1         Approval of Tenant's Signage -                                                         23
               13.2         Signage Location                                                                       23
               13.3         Restrictions on Signage, Handbills and Other Advertising Devices                       23     
               13.4         Signage in Food Courts                                                                 24

ARTICLE        XIV          FIXTURES AND PERSONAL PROPERTY                                                         24
                14.1        Rights to Fixtures and Personal Property                                               24
                14.2        Landlord's Property                                                                    24
                14.3        Taxes, Fees, Assessments and Damages                                                   25

ARTICLE        XV           ASSIGNING AND SUBLETTING                                                               25
                15.1        Restrictions on Transfer                                                               25
                15.2        Notice of Proposed Transfer                                                            26
                15.3        Landlord's Response                                                                    26
                15.4        Standards for Landlord's Approval                                                      27
                15.5        Tenant Not Released; Documentation Fee                                                 28
                15.6        Documentation of Transfer  -                                                           28
                15.7        Adjustment to Minimum Annual Rent                                                      28

ARTICLE XVI                 TENANT'S CONDUCT OF BUSINESS                                                           28
               16.1         Continuous Operation                                                                   28               
               16.2         Hours of Operation                                                                     29     
               16.3         Additional Charge                                                                      29
               16.4         Opening of Mall                                                                        29
               16.5         Operation of New Locations                                                             30     
               16.6         Cessation of Business                                                                  30

ARTICLE XVII                REPAIRS AND MAINTENANCE                                                                30     
                  17.1      Tenant's Obligations -                                                - .        .     30
                  17.2      Landlord's Obligations                                                                 31
                  17.3      Condition of Premises                                                                  31    
                 17.4       Surrender of Premises                                                 - . . .          32
                 17.5       Inspection; Right to Cure                                                              32

ARTICLE        XVIII  RECONSTRUCTION

                 18.1       Partial Insured Casualty                                                              32      
                 18.2       Substantial and Uninsured Casualties                                                  32
                 18.3       Reconstruction                                                                        33
                 18.4       Termination                                                                           33      
                 18.5       Rent Abatement .                                       . . .                          33
                 18.6       Waiver                                                                                34      

ARTICLE        XIX          COMMON AREAS
                                                                                       -   .  .      .   .  .     34
                19.1        Definition of Common Areas                                                            34
                19.2        Tenant's License for Use                                                              34
                19.3        Common Area Expenses                                                                  34
                19.4        Payment of Common Area Expenses                                                       36
                19.5        Reservations by Landlord                                                              37
                19.6        No Liability                                                                          37
                19.7        Regulation of Common Areas                                 -                          37
                19.8        Control of Common Areas  -                                 .                          38
                19.9       Unauthorized Persons                  .  .                                             38
                19.10      Employee Parking . .                  .      .  .          -          . . .      .     38
                19.11      Parking Surcharge  .                  .  .                                             38
                19.12      Tenant's Audit                     - .                                      . . .      38
                                                                                                           
ARTICLE XX                  INTENTIONALLY. OMITTED                                                                39


Fs2\267\064l2~oo3l\2l5499o.s aO8~O7~95                     -                                              

<PAGE>
ARTICLE        XXI          BANKRUPTCY - INSOLVENCY                                                               39
                21.1        Conditions to Lease Assumption                                                        39
                21.2        Adequate Assurance   .                                                                40
                21.3        Continuing Performance .                                                              40
                21.4        Deemed Rejection   .                                                                  40
                21.5        Landlord's Services                                                                   40
                21.6        Funds Held by Landlord                                                                40
                21.7        Application of United States Bankruptcy
                            Code                                                                                  41

ARTICLE XXII   DEFAULTS BY TENANT; LANDLORD'S REMEDIES                                                            41
               22.1         Tenant's Default                                                                      41
               22.2         Landlord's Remedies                                                                   41
               22.3         ARBITRATION OF DISPUTES; WAIVER OF RIGHT
                            TO JURY TRIAL                                                                         42    
               22.4         Re-entry by Landlord                                                                  44 
               22.5         Termination of Lease; Damages  .                                                      44 
               22.6         Determination of Rent                                                                 45 
               22.7         Cumulative Remedies; No Waiver                                                        45 
               22.8         Landlord's Right to Cure                                                              45 

ARTICLE XXIII  DEFAULTS BY LANDLORD . .                                                                           46
               23.1         Landlord's Default                                                                    46
               23.2         Tenant's Notice of Landlord's Default                                                 46

ARTICLE        XXIV         EMINENT DOMAIN                                                                        46
               24.1         Total Taking                                                                          46
               24.2         Substantial Taking                                                                    47
               24.3         Restoration                                                                           47
               24.4         Right to Award                                                                        47
               24.5         Termination of Major Department Store
                            Leases . . . .                                                                        47 
               24.6        Voluntary Sale; Waiver                                                                 47

ARTICLE XXV                 ATTORNEYS' FEES                                                                       48

ARTICLE XXVI   SALE OR MORTGAGE OF PREMISES BY LANDLORD                                                           48

ARTICLE XXVII  ESTOPPEL - SUBORDINATION - ATTORNMENT                                                              48

               27.1         Estoppel .                                                                            48
               27.2         Subordination                                                                         49

ARTICLE XXVIII INTENTIONALLY OMITTED                                                                         . .  49

ARTICLE XXIX   MODIFICATION OF PROJECT/SUBSTITUTE PREMISES                                                        50      

               29.1         Reservation of Right to Modify Project                                                50

ARTICLE XXX                 GENERAL PROVISIONS                                                                    51

               30.1       Lease Interpretation .                          .                                       51
               30.2       Consumer Price Index                                                                    51 
               30.3       Notices  . . .                 . . . .                 .                                52
               30.4         No Partnership                                                                        52
               30.5         Authority                                                                             52
               30.6         No Oral Agreements or Representations                                                 52
               30.7         No Waiver  .                               .                                          53
               30.8         Force Majeure                                                                         53
               30.9         Time of Essence.                                                                      53
               30.10        NonRedemption                                                                         53
               30.11        Joint and Several Obligations.                                                        53      
               30.12      Continuing Obligations                               . ...                       o      53
               30.13      Initialing . .   . . ..                                                                 54
</TABLE>

FS2\267\064l2~oo31\2I5499o.s aO8IO7~95                   -iii-
<PAGE>
                              SHOPPING CENTER LEASE


     THIS LEASE is made and entered into in Orange County,  California as of the
15th day of August 1995,  by and between  HUGHES  RIVERSIDE  LTD., a California~
limited  partnership   ("Landlord"),   and  PLAY  CO.  TOYS,  INC.,  a  Delaware
corporation ("Tenant")


                                    ARTICLE I

                          FUNDAMENTAL LEASE PROVISIONS

         Certain  Fundamental Lease Provisions are presented in this Article and
represent the agreement of the parties hereto, subject to further definition and
elaboration in the respective  referenced  sections and elsewhere in this Lease.
In the event of any conflict  between any  Fundamental  Lease  Provision and the
balance of this Lease, the latter shall control. References to specific sections
are for convenience  only and designate some of the sections where references to
the particular Fundamental Lease Provisions may appear.

(a)      Tenant's Trade Name:  Play Co. Toys                          (See .7.1)

(b)    Lease Term:    Five (5) lease years, plus a partial lease
                      year, such that the initial Lease Term shall
                      expire on January 31, 2001.                   (See ss.4.5)

(c)      Tenant's Space Number: B-O                                   (See Ex.B)

(d)      Approximate Floor Area of Premises:  10,156 square feet;
         approximate frontage:  100 feet; approximate depth: Irregular
          feet.                                           (See ss.5.1(b) and SB)

(e)      Minimum Annual Rent:
         $91,404.00 per year payable $7,617.00 per month
                                                                      (See ss.5)
         through the initial Lease Term.

         The  Minimum   Annual  Rent  is  subject  to   adjustment   upon  final
         determination  of the  Floor  Area  of the  Premises  as set  forth  in
         ss.5.1(b).

(f)      Rent Commencement Date: See Section 4.1                     (See s.4.2)

(g)      Percentage Rent Rate: Five percent(5%)                      (See s.5.2)

(h)      Security Deposit: $ N/A                                       (See s.6)

(i)      Use: The retail sale of toys and other closely related items sold
         in all of Tenant's other toy stores, and for no other purpose.
         Tenant agrees that the display of such closely related items shall
         not exceed five percent (5%) of the Floor Area devoted to sales.    
                                                                      (See ss.7)
(j)    Notice Address
Landlord:                                         Tenant:

c/o Hughes/Purcell                                550 Rancheros Drive
P.O. Box 8700                                     San Marcos, CA  92069
Newport Beach, CA                                 Phone No. (619) 471-4505
92658-8700
Phone No. (714) 759-9531

                                                                    (See s.30.3)
(k)      Occupancy Charge:  $  N/A


Fs2~267\%4t2ckm3I\2ls499o.5 a08107195

<PAGE>
   (1)   Project: Integrated retail shopping center in City of
         Riverside, County of Riverside, State of California commonly
         known as "Riverside Plaza"                                     (See S2)


                                   ARTICLE II

                                    EXHIBITS

         The following  drawings and special  provisions are attached  hereto as
Exhibits and are hereby  incorporated in this Lease by reference and made a part
hereof.

     EXHIBIT "A" - General site plan of Project.  The portion  thereof  owned by
Landlord is  hereinafter  referred to as the  "Shopping  Center".  The site plan
shows,  among other  things,  the  principal  improvements  which  comprise  the
Project.  Tenant  acknowledges that Landlord may change or reduce, or consent to
the change or reduction of, the shape, size, height,  location and number of the
improvements  shown and eliminate or add any  improvements to any portion of the
Project.

     EXHIBIT "B" - Lease Plan showing the location of the Premises.

     EXHIBIT "C" -  Description  of any work to be  performed by Landlord and by
Tenant in or on the Premises.

     EXHIBIT "D" - Tenant's Certificate.

     EXHIBIT "E" Sign Criteria.

     EXHIBIT "F" Rules and Regulations.

     EXHIBIT "G Rent Adjustment Statement.



                                   ARTICLE III

                                    PREMISES

     3.1 Premises. Landlord, in consideration of the rental and the covenants to
be paid and performed by Tenant,  hereby leases to Tenant and Tenant does hereby
lease from  Landlord,  for the term,  at the rental and upon the  covenants  and
conditions  herein set forth,  the  commercial  space  referred to herein as the
"Premises". The location of the Premises is cross-hatched in red on the attached
Exhibit  "B".  Tenant  accepts the Premises in an "AS-IS"  condition  except for
those items of work to be  performed by Landlord as of the  commencement  of the
Lease  Term,  if any,  as set  forth in the  description  of  "Landlord's  Work"
contained  in  Exhibit  "C".  Tenant  at its  sole  cost  and  expense  shall be
responsible for the completion of those items of work described as the "Tenant's
Work" in Exhibit "C" in accordance with Exhibit "C".


                                   ARTICLE IV

                                      TERM

     4.1 Duration.  The term of this Lease ("Lease Term") shall be the number of
"Lease Years" (as hereinafter  defined)  specified in Article I, subsection (b),
plus any partial calendar month during which the term commences if the term does
not  commence on the first day of a calendar  month,  unless  sooner  terminated
pursuant to the terms hereof.  Except as otherwise  specifically  stated in this
Lease, references to the "Lease Term" shall include


FS2~67\064l2~omI\2l5499o.s '08/07)95                      -2-

<PAGE>
the original Lease Term and any extension, renewal or holdover thereof.

         4.2 Option to Extend.  Provided (i) Tenant has performed  everything by
it to be performed hereunder, (ii) Tenant is not closed for business pursuant to
Section  16.6  below  either  at  the  time  of  exercise  hereunder  or at  the
commencement  of the extended  term,  (iii)  Tenant is not in default  hereunder
beyond  applicable  cure periods either at the time of exercise  hereunder or at
the  commencement  of the extended  term,  and (iv)  Tenant's  "Gross Sales" (as
defined in Section 5.2 below) for the twelve (12) month period immediately prior
to the date Tenant exercises its option,  exceed One Million Three Hundred Fifty
Thousand Dollars ($1,350,000.00),  Landlord grants to Tenant an option to extend
said Lease Term for one (1) term of five (5) years.

         If Tenant  elects to exercise  its option,  it shall do so by notice in
writing  mailed to Landlord not earlier than one (1) year and not later than six
(6) months before the expiration of the then existing term of the Lease.  In the
event  Tenant  fails to give such  written  notice to  Landlord at least six (6)
months prior to the  expiration  of the then  existing  term,  this option shall
automatically  terminate without any further action by Landlord.  Time is of the
essence of this provision.

         It is hereby  understood  and agreed that in the event Tenant elects to
exercise its option to extend hereunder, the Premises will be accepted by Tenant
on an "as is" basis,  and Landlord  shall have no obligation to perform any work
therein.

         The extended term shall be upon the same terms and conditions set forth
in this Lease,  provided,  however,  that (a) Tenant shall not have an option to
extend the term  following the extended  term; (b) the option to extend the term
shall be available  only to the original  Tenant named herein or an affiliate of
Tenant permitted pursuant to Section 15.1 below; and (c) the Minimum Annual Rent
shall be adjusted upon the  commencement of the extended term as provided herein
below.

         Upon the  commencement  of the extended  term,  the Minimum Annual Rent
shall be adjusted in  proportion to changes in the  "Consumer  Price Index",  as
defined  in Section  30.2.  Such  adjustment  shall be made by  multiplying  the
Minimum  Annual  Rent  payable  immediately  prior  to the  commencement  of the
extended  term by a fraction,  the numerator of which is the value of said Index
for the  calendar  month  three (3) months  preceding  the  commencement  of the
extended term,  and the  denominator of which is the value of said Index for the
calendar  month five (5) years prior to the index month used for the  numerator.
However,  in no event shall the Minimum Annual Rent by reduced below the Minimum
Annual Rent in effect  immediately  preceding the  commencement  of the extended
term,  nor shall the Minimum  Annual Rent be increased by an amount greater than
fifteen  percent (15%)  compounded  from the  commencement  of the initial Lease
Term.

         4.3 Commencement.  The Lease Term shall commence  ("Commencement Date")
on the date  which is  forty-five  (45) days  after the date  Landlord  delivers
written  notice to Tenant  per  Section  30.3 of  tender  of  possession  of the
Premises. Landlord hereby agrees to deliver possession of the Premises to Tenant
on September 1, 1995.

         Tenant shall commence the  construction  of Tenant's Work promptly upon
tender of possession  of the Premises by Landlord,  shall  diligently  prosecute
such  construction  to  completion  and shall open for  business in the Premises
prior to the expiration of the forty-five (45) day period provided herein above.
During the period of Tenant's  construction  work until the  Commencement  Date,
Tenant shall observe and be bound by all of the  provisions of this Lease except
those  requiring  the  payment of rent and other  charges to be paid  during the
Lease Term.


                                                                          

PS2\267\064l2~003I\2I54990.6 sOR/14/95                    -3-

<PAGE>
         4.4 Tenant's Certificate. Following the Commencement Date, Tenant shall
execute,  acknowledge and deliver to Landlord a tenant's certificate in the form
of Exhibit "D" ("Tenant's Certificate), within ten (10) days of Tenant's receipt
of the Tenant's  Certificate  from Landlord setting forth among other things the
Commencement  Date and the termination date of this Lease.  Notwithstanding  the
foregoing, Tenant's failure to execute the Tenant's Certificate shall not affect
Landlord's  determination  of the  Commencement  Date  in  accordance  with  the
provisions  of this  Lease.  Failure of the Tenant to execute  and  deliver  the
Tenant's Certificate in the form prepared by Landlord,  with such corrections or
additions as may be required, shall constitute an acceptance of the Premises and
acknowledgment   by  Tenant  that  the  statements   included  in  the  Tenant's
Certificate are true and correct without exception.

         4.5 Automatic  Termination.  Anything  contained herein to the contrary
notwithstanding,  if  Landlord  has  not  notified  Tenant  in  writing  of  the
substantial completion of the Landlord's Work, if any, and tendered the Premises
to Tenant prior to the  expiration  of twelve (12) months after the date of this
Lease, this Lease shall thereupon automatically terminate and cease to be of any
force and effect whatsoever as if void from the inception hereof. Landlord shall
have no  obligation  or liability to Tenant by reason of any delay or failure to
deliver possession of the Premises to Tenant at any time prior to the expiration
of such twelve  (12) month  period,  nor for failure to deliver the  Premises to
Tenant upon or following  expiration of such twelve (12) month  period,  nor for
said automatic termination of this Lease.

         4.6  Definition of "Lease  Year".  A "Lease Year" is a period of twelve
(12) consecutive  calendar months  commencing on the first day of the first full
calendar  month during the Lease Term;  provided that the first Lease Year shall
also  include any partial  calendar  month during  which the  Commencement  Date
occurs,  if the Commencement  Date does not occur on the first day of a calendar
month and the last Lease Year shall terminate upon the expiration or termination
of this Lease.


                                    ARTICLE V

                                      RENT

         5.1          Minimum Annual Rent.

                               (a)Tenant  agrees  to pay  as  rent  the  minimum
                      annual rent specified in Article I, subsection (e) hereof,
                      subject to adjustment as provided in Section  5.1(b) below
                      and to such other  adjustments as are provided for in this
                      Lease  ("Minimum  Annual  Rent").  Minimum  Annual Rent is
                      payable in twelve (12) equal monthly  installments  during
                      each Lease Year, in advance, on or before the first day of
                      each   calendar   month   without   offset  or  deduction,
                      commencing   on  the   Commencement   Date.   Should   the
                      Commencement  Date be on a day other than the first day of
                      a calendar  month,  then the Minimum  Annual Rent for such
                      fractional  month  shall be  computed on a daily basis for
                      the period from the  Commencement  Date to the end of such
                      calendar    month,    and   at   an   amount    equal   to
                      one-three-hundred~sixtieth  (1/360) of the Minimum  Annual
                      Rent for each day in such  period  and shall be due on the
                      Commencement  Date, and  thereafter  shall be computed and
                      paid as aforesaid.

                               (b)Following   completion   of   Tenant's   Work,
                      Landlord  may,  at  Landlord's  option,  cause  Landlord's
                      architect  to  determine  the  actual  Floor  Area  of the
                      Premises,  in  accordance  with Section 8.2 below.  In the
                      event the Floor Area of the Premises as so  determined  is
                      greater  or less than the  approximate  Floor  Area of the
                      Premises specified in Article I,


FS2\267\OMi2~o03I\2ls499o.s a08107195                     -4-
<PAGE>
         subsection (d) above, Landlord shall,  effective as of the Commencement
         Date, adjust the Minimum Annual Rent, Occupancy Charge, if any, and all
         items of  Additional  Rent based upon Floor Area in  proportion  to the
         change in the Floor Area from that  specified in Article I,  subsection
         (d) . Following such determination,  Landlord shall deliver to Tenant a
         statement  in  substantially  the form of Exhibit "a"  attached  hereto
         setting  forth the actual  Floor  Area of the  Premises  determined  by
         Landlord's  architect and the resulting  adjustments  in Minimum Annual
         Rent,  Occupancy  Charge and other  items of  Additional  Rent based on
         Floor Area ("Rent Adjustment Statement"). Tenant shall, within ten (10)
         days  from  Landlord's  delivery  to  Tenant  of  the  Rent  Adjustment
         Statement, execute and return the Rent Adjustment Statement to Landlord
         evidencing Tenant's  acknowledgment of such changes and pay to Landlord
         the amount, if any, by which the Minimum Annual Rent,  Occupancy Charge
         and other  items of  Additional  Rent  applicable  pursuant to the Rent
         Adjustment  Statement through the first day of the first calendar month
         following the date of the Rent Adjustment Statement exceeds the Minimum
         Annual  Rent,  Occupancy  Charge,  and other items of  Additional  Rent
         actually paid by Tenant for such period.  Tenant shall  thereafter  pay
         the Minimum  Annual Rent and other items of Additional  Rent based upon
         such adjusted Floor Area as set forth in the Rent Adjustment  Statement
         and  subject  to such other  adjustments  as are  provided  for in this
         Lease.  In the event  the  Floor  Area of the  Premises  as  determined
         pursuant to this Section 5.1(b) is less than the approximate Floor Area
         of the Premises specified in Article I, subsection (d) above,  Landlord
         shall credit the Minimum Annual Rent and  Additional  Rent next payable
         by Tenant  under the Lease,  in the amount by which the Minimum  Annual
         Rent,  Occupancy  Charge and  Additional  Rent  actually paid by Tenant
         exceeds  the  adjusted  Minimum  Annual  Rent,   Occupancy  Charge  and
         Additional  Rent  payable  for  such  period,  in  accordance  with the
         adjusted amounts identified in the Rent Adjustment Statement -

         5.2          Percentage Rent.

                               (a)In addition to the Minimum Annual Rent, Tenant
                      shall pay to Landlord at the time and in the manner herein
                      specified  a sum equal to the  difference  between (i) the
                      product of the  Percentage  Rent Rate specified in Article
                      I,  subsection  (g) above,  times the  amount of  Tenant's
                      "Gross  Sales" (as  hereinafter  defined) made in, upon or
                      from the  Premises  during  each full or partial  calendar
                      year of the Lease Term, including the option to extend, if
                      exercised,  in excess of the "Percentage Rent Breakpoint",
                      as defined herein below ("Percentage Rent").

                               (b)Tenant   agrees  to  furnish  to   Landlord  a
                      statement  of the Gross Sales of Tenant for each  calendar
                      month  within  fifteen  (15) days  after the close of each
                      such calendar month during the Lease Term, and ending with
                      the  fifteenth day of the month next  succeeding  the last
                      month of the Lease  Term.  Tenant  shall  also  furnish to
                      Landlord a statement  of the annual  Gross Sales of Tenant
                      within  thirty (30) days after the close of each  calendar
                      year.  Tenant shall pay the  Percentage  Rent on a monthly
                      basis,  once the amount of  Tenant's  Gross  Sales for the
                      current  calendar  year  exceeds One Million  Four Hundred
                      Thousand   Dollars   ($1,400,000.00)   ("Percentage   Rent
                      Breakpoint"), within twenty (20) days following the end of
                      each calendar month during the Lease Term. Notwithstanding
                      the preceding  sentence,  Tenant shall pay the  Percentage
                      Rent for calendar year 1995 on a monthly  basis,  once the
                      amount of Tenant's  Gross Sales for the 1995 calendar year
                      exceeds SIX HUNDRED  THOUSAND DOLLARS  ($600,000.00).  For
                      subsequent  years after 1995' Tenant shall pay  Percentage
                      Rent  on the  basis  of  the  Percentage  Rent  Breakpoint
                      established above. Except for


F82\267\06412ck0031\2154990.s aO8~07~95                   5-

<PAGE>
         calendar year 1995,  the  Percentage  Rent  Breakpoint  for any partial
         calendar  year (or any  calendar  year which  includes a period of time
         during  which  Tenant  is closed  for  business  due to  causes  beyond
         Tenant's  reasonable control or as permitted in Section 16.6), shall be
         proportionately  decreased  to reflect the length of such  partial year
         (or  calendar  year less such  period(s)  of closure) on the basis of a
         three hundred sixty-five (365) day year. Each statement shall be signed
         by Tenant,  if Tenant is an  individual,  by a  responsible  officer of
         Tenant, if Tenant is a corporation or by Tenant's managing partner,  if
         Tenant is a partnership.  The person signing each such statement  shall
         be  deemed  to  have  certified  under  penalty  of  perjury  that  the
         information in such statement is true and correct.

                               (c)Tenant  shall  record at the time of sale,  in
                      the presence of the  customer,  all receipts from sales or
                      other  transactions,  whether  cash or  credit,  in a cash
                      register(s)  or  point  of sale  computer(s)  ,  having  a
                      cumulative retrievable total and which numbers consecutive
                      purchases. Tenant shall prepare and keep full and accurate
                      books  of  account,  records  and all such  cash  register
                      receipts  or  computer  records  with  regard to the Gross
                      Sales, credits,  refunds and other pertinent  transactions
                      made from or upon the Premises  (including the Gross Sales
                      of any subtenant, licensee or concessionaire and including
                      any claimed  exclusions or deductions  from Gross Sales) .
                      Such  books,  receipts  and  records  shall  be kept for a
                      period of five (5) years after the close of each  calendar
                      year,  regardless  of  whether  the five  (5) year  period
                      extends  beyond the Lease Term, and shall be available for
                      inspection  and audit on the  Premises by Landlord and its
                      representatives  at  all  times  during  regular  business
                      hours.  In  addition,  upon  request of  Landlord,  Tenant
                      agrees to  furnish to  Landlord a copy of all of  Tenant's
                      (and of Tenant's subtenants, licensees or concessionaires)
                      Sales and Use Tax  Returns if  required to be filed in the
                      State or  County  or City  where  the  Shopping  Center is
                      located and  consents to  Landlord's  right to obtain such
                      returns directly from the taxing authorities.

                               (d)The  receipt by Landlord of any  statement  or
                      payment of  Percentage  Rent for any period shall not bind
                      it as to the  correctness of the statement or the payment.
                      Landlord shall, within five (5) years after the receipt of
                      any such statement,  be entitled to an audit of such Gross
                      Sales either by Landlord or by  Landlord's  representative
                      to be  designated.  Such audit shall be  conducted  during
                      normal  business  hours  at the  Premises.  If it shall be
                      determined as a result of such audit that there has been a
                      deficiency  in the payment of Percentage  Rent,  then such
                      deficiency  shall become  immediately due and payable with
                      interest at the lesser of eighteen percent (18%) per annum
                      or the maximum  rate  permitted  by law from the date when
                      the  Percentage  Rent payment  should have been made until
                      receipt by Landlord of payment  thereof.  In addition,  if
                      Tenant's  statement  for any Lease  Year shall be found to
                      have  understated  Gross  Sales by more  than one  percent
                      (1%),  or if such audit  shows  that  Tenant has failed to
                      maintain the books of account and records  required hereby
                      so that  Landlord  is  unable to verify  the  accuracy  of
                      Tenant's statement,  then Tenant shall pay to Landlord all
                      costs and  expenses  incurred  by  Landlord in making such
                      audit and in determining and collecting any  underpayment.
                      If Tenant's  statement shall be found to have  understated
                      Gross  Sales by more than three  percent  (3%) , or in the
                      event  it  is  determined  that  Tenant's   statement  was
                      understated  intentionally,   then,  in  addition  to  the
                      Landlord's  aforesaid rights,  such  understatement  shall
                      constitute an incurable  material breach of this Lease and
                      Landlord may terminate this Lease upon notice to Tenant.


FS2\267\064I2~oo3l~2I5499o.s no8~07I9s                    -6-

<PAGE>
                               (e)The term "Gross  Sales" as used herein,  means
                      the  total  gross  receipts  from  all  goods,  wares  and
                      merchandise  sold or leased and the actual charges for all
                      services,  without  exception,  performed  by Tenant or by
                      anyone    including    any    subtenant,    licensee    or
                      concessionaire,  in, at, from or arising out of the use of
                      the  Premises,  whether  wholesale or retail,  whether for
                      cash or credit,  or otherwise,  and including the value of
                      all consideration other than money received for any of the
                      foregoing,  without  reserve or  deduction or inability or
                      failure to  collect,  including  but not limited to sales,
                      leases and services

     (i)where the orders therefore originate, in, at, from or arising out of the
use,  in whole or part,  of any  portion of the  Premises,  whether  delivery or
performance is made from the Premises or from some other place and regardless of
the place of bookkeeping for, payment of or collection of any accounts; or

     (ii)made or performed by mail,  telephone,  or telegraph orders received or
tilled in, at or from the Premises; or

     (iii) made or performed by means of mechanical or other vending machines in
the Premises, or

     (iv) which Tenant,  or any subtenant,  licensee or  concessionaire,  in the
normal and customary  course of its  business,  would credit or attribute to its
operations at the Premises or any part thereof.

         Any deposit  accepted and retained by Tenant shall be included in Gross
         Sales.  Each  installment  or credit sale shall be treated as a sale to
         the extent  payment (by cash,  credit or otherwise) is received,  which
         payment shall be reported at the time payment is received.  Gross Sales
         shall include any amount allowed upon any  "trade-in",  the full retail
         price of any  merchandise  delivered or redeemed for trading  stamps or
         coupons or sold to  employees  at discount  prices and all deposits not
         refunded to purchasers.  No franchise,  capital stock tax, tax based on
         assets or net worth or gross receipts tax, and no income or similar tax
         based on income or profits  shall be deducted  from Gross Sales.  Gross
         Sales shall not include sales tax, so called  luxury  taxes,  consumers
         excise  taxes,  gross  receipts  taxes and other  similar  taxes now or
         hereafter imposed upon the sale of merchandise or services, but only if
         collected  separately from the selling price of merchandise or services
         and collected from  customers.  Also excluded from Gross Sales shall be
         the following:

                               (a)To the extent the selling price of merchandise
                      was  previously   included  in  Gross  Sales  reported  to
                      Landlord  but  subsequently  returned  or traded in by the
                      customer for full or partial  credit,  or by credit ogiven
                      by way of discount or allowance  there an without  return,
                      there may be  subtracted  from  Gross  Sales the amount of
                      such credit,  discount or allowance at such otime,  and to
                      the extent  redeemed at a location of Tenant's  other than
                      the  Premises,  provided,  however,  that if a credit from
                      another  location of Tenant's is redeemed at the Premises,
                      such credit  shall be included in Gross Sales and reported
                      to Landlord;

                               (b)Goods  returned  to  sources or  suppliers  or
                      transferred to another store,  warehouse or facility owned
                      by or affiliated  with Tenant when such return or transfer
                      is not related to a sale of merchandise;


F82\267\064 12(}003 I \2154990.j aOSICflIqj               -7-

<PAGE>



                      (c) The  price  allowed  on all  merchandise  traded in by
                      customers for credit or the amount of credit for discounts
                      and allowances made in lieu of acceptance thereof;

                               (d)Cash refunds made to customers in the ordinary
                      course of business,  but this exclusion  shall not include
                      any amount paid or payable for what are commonly  referred
                      to as trading stamps;

                               (e)Sales   taxes,    so-called    luxury   taxes,
                      consumers'  excise taxes,  gross  receipts taxes and other
                      similar  taxes now or  hereafter  imposed upon the sale of
                      merchandise or services,  but only if collected separately
                      from the selling  price of  merchandise  or  services  and
                      collected from customers;

                               (f)Sales of  fixtures,  equipment  or property at
                      wholesale  which  are not  stock in  trade  and not in the
                      ordinary course of business  (provided no such sales shall
                      be made from the Premises)

                               (g)Bad checks and/or bad debts  actually  written
                      off and reported as losses on Tenant's  federal income tax
                      return with respect to the premises,  not to exceed in the
                      aggregate,  when  added  to the  sales in (h)  below,  two
                      percent  (2%)  of  Tenant's  Gross  Sales  in  any  single
                      calendar  year  on  a  non-cumulative  basis  and  further
                      provided that to the extent  subsequently  collected  said
                      checks  and/or debts shall be included  within Gross Sales
                      in the calendar year in which subsequently collected;

                               (h)Sales at discount to  employees  not to exceed
                      in the  aggregate,  when added to sales in (g) above,  two
                      percent  (2%)  of  Tenant's  Gross  Sales  in  any  single
                      calendar year on a non-cumulative basis; and

                               (i)The  amount  of  any  merchant  fee  or  other
                      charge,  however  designated,  paid by Tenant to  American
                      Express in  connection  with a customer  using an American
                      Express credit card in excess of the merchant fee or other
                      charge,  however designated,  then being paid by Tenant to
                      VISA for customers  using a VISA credit card. For example,
                      the current  American  Express merchant fee paid by Tenant
                      is approximately  four percent (4%) of the sales price and
                      the VISA merchant fee is approximately two percent (2%) of
                      the sales price. Therefore, the two percent (2%) above the
                      VISA charge would be excluded from Gross Sales.

         5.3 "Net"  Lease.  It is the  intention of Landlord and Tenant that the
rent herein specified shall be net to the Landlord, and that all costs, expenses
and  obligations  of every kind relating to the Premises or the use,  operation,
management  (subject to the  limitations on management fees set forth in Section
19.3 below) or occupancy  thereof  together  with Tenant's  share  determined in
accordance  with this Lease of all expenses  applicable  to the Shopping  Center
(except as specifically excluded herein), whether or not now customary or within
the  contemplation  of the parties hereto,  which may arise or become due during
the Lease Term, shall be paid by Tenant.

         5.4  Additional  Rent.  In  addition  to the  Minimum  Annual  Rent and
Percentage  Rent,  Tenant  shall pay to Landlord as  additional  rental  (herein
sometimes  collectively  called  "Additional Rent") , all other sums or money or
charges of whatsoever  nature required to be paid by Tenant to Landlord pursuant
to this Lease, whether or not the same is designated as "Additional Rent".


FS2\267\064I2~oo3I\2I5499o.5 no8Io7~95                    -8-

<PAGE>
         5.5          Timely Payment of Rent.

                               (a)Minimum  Annual  Rent,   Percentage  Rent  and
                      Additional   Rent  payable  by  Tenant  under  this  Lease
                      (collectively  hereinafter sometimes referred to as "rent"
                      or "rental")  shall be paid when due without  prior demand
                      (unless  such prior  demand is  expressly  provided for in
                      this Lease),  shall be payable  without any  deductions or
                      set-offs  whatsoever to Landlord at Landlord's address set
                      forth in  Article  I,  subsection  (j) of this Lease or at
                      such other address as may be designated  from time to time
                      by notice from Landlord to Tenant. Any rent or installment
                      thereof which is not paid by Tenant to Landlord within ten
                      (10)  calendar days after it is due shall bear interest at
                      the  lesser  of  eighteen  percent  (18%) per annum or the
                      maximum rate  permitted by law from and after its due date
                      until  payment is  actually  received by  Landlord,  which
                      interest shall be paid by Tenant upon demand as Additional
                      Rent.

                               (b)In   addition   to   such   interest,   Tenant
                      acknowledges  that  the  late  payment  by  Tenant  of any
                      monthly  installment  of Minimum  Annual Rent,  Percentage
                      Rent or  Additional  Rent  will  cause  Landlord  to incur
                      certain  costs and  expenses not  contemplated  under this
                      Lease,  the exact amount of which are extremely  difficult
                      or impractical to fix or determine. Therefore, if any such
                      payment is not  received  by  Landlord  from Tenant by the
                      tenth (10th) day following the date payment is due without
                      notice,  Tenant shall  immediately  pay to Landlord a late
                      charge  equal to five  percent  (5%) of such payment and a
                      late charge in that same  amount  shall be due and payable
                      for  each  month  thereafter  that  such  payment  remains
                      outstanding.  Landlord  and  Tenant  agree  that this late
                      charge represents a reasonable  estimate of such costs and
                      expenses and is fair compensation to Landlord for its loss
                      suffered by such non-payment by Tenant. Acceptance of this
                      late  charge  shall not  constitute  a waiver of  Tenant's
                      default  with  respect to such  non-payment  by Tenant nor
                      prevent  Landlord  from  exercising  all other  rights and
                      remedies available to it under this Lease.

         5.6  Limitations  on Rent  Adjustments.  In the event  that at any time
during the Lease Term,  any  governmental  law, rule or regulation  prohibits or
postpones, in whole or in part, any increase in the Minimum Annual Rent or other
sums payable by Tenant hereunder to be made pursuant to this Lease, then, and in
either  of such  events,  such  increase  shall  be made to the  maximum  extent
permissible  by law at the time  provided in this  Lease,  and/or at any time or
times thereafter such increase, or any portion thereof, may lawfully be made and
any such increase in the Minimum Annual Rent, or any portion  thereof,  or other
sums payable  hereunder,  or portions thereof,  the payment of which has been so
prohibited or postponed,  shall thereafter become due and payable to the maximum
extent and at the earliest time or times permitted by law.



                                   ARTICLE VI

                              INTENTIONALLY OMITTED


                                   ARTICLE VII

                                       USE

         7.1  Limitations on Use.  Tenant shall use and occupy the Premises only
for the  purposes and under the trade name  specified in Article I,  subsections
(a) and (i)  above.  Tenant  shall not use or permit  the  Premises  or any part
thereof  to be used  for any  other  purpose  or  under  any  other  trade  name
whatsoever, No use other than


FS2~267\064l2noo3I\2Is4990.5 nosIo7~95                    -9-

<PAGE>
that specified in Article I,  subsection (i) above may be implied,  even if such
use is customary to businesses of like nature to the use  specified.  Any change
of use  without  Landlord's  consent  in its sole  and  absolute  discretion  is
strictly  and  absolutely  prohibited.  In the event of a dispute  concerning  a
permitted use, the specified use will be construed as narrowly as possible.

     7.2 Further  Limitations on Use. Without limiting the generality of Section
7.1 above,  additional  restrictions regarding the manner of use of the Premises
are as follows.'

                               (a)Tenant  shall  not (i) sell  merchandise  from
                      vending  machines  or allow any coin  operated  vending or
                      gaming  machines on the Premises;  (ii) sell any alcoholic
                      beverages  from the Premises;  (iii) sell any groceries or
                      other  food  or  beverages  (excluding  candy)  for  on or
                      off-premises consumption from the Premises,  except to the
                      extent that the use of vending  machines or coin  operated
                      vending  or  gaming   machines,   the  sale  of  alcoholic
                      beverages or the sale for on or  off-premises  consumption
                      of groceries or other food or beverages  (excluding candy)
                      is  expressly  permitted  under  the terms of  Article  I,
                      subsection  (i) above;  (iv) sell or permit the sale on or
                      about the Premises of items  containing  or  consisting of
                      pornography,    nudity,    graphic    violence   or   drug
                      paraphernalia;  or (v)  sell or  permit  the  sale of live
                      animals on or about the Premises.

                               (b)Tenant  covenants  and agrees that it will not
                      use or suffer or permit  any  person or persons to use the
                      Premises or any part thereof for  conducting a second-hand
                      store,  auction,  distress or fire sale or  bankruptcy  or
                      going-out-of-business  sale,  or for any use or purpose in
                      violation  of the laws of the United  States of America or
                      the laws, ordinances,  regulations and requirements of the
                      State of California, the County and City where the Project
                      is   located,    or   of   other    lawful    authorities.
                      Notwithstanding  the  foregoing,  one (1) time  during the
                      Lease   Term,   Tenant  may   conduct  a   bankruptcy   or
                      going-out-business sale lasting no longer than thirty (30)
                      days,  provided  that the  advertising,  signage  or sales
                      promotion  regarding  the sale  shall not state  "Lost Our
                      Lease," "Forced to Move" or any such similar statement.

                               (c)Tenant  covenants  and agrees  that during the
                      Lease Term and all other  times that Tenant  occupies  the
                      Premises,  the Premises  and every part  thereof  shall be
                      kept by Tenant in a clean and wholesome condition, free of
                      any  objectionable   noises,   music  volumes,   odors  or
                      nuisances,  and that all  health  and  police  regulations
                      shall, in all respects and at all times, be fully complied
                      with by Tenant.

                               (d)Tenant  shall not display or sell  merchandise
                      or allow  carts,  portable  signs,  devices  or any  other
                      objects  to be  stored or to remain  outside  the  defined
                      exterior  walls  or roof  and  permanent  doorways  of the
                      Premises,  or in  hallways  or in any  area  in  front  of
                      Tenant's   storefront,   regardless  of  where  the  exact
                      boundaries of the Premises may be located. Notwithstanding
                      the  foregoing,  Tenant  shall  have the right to  conduct
                      sidewalk  sales,  with  Landlord's  prior  approval,  such
                      approval not to be unreasonably withheld, on not more than
                      four (4) weekends in any calendar year,  provided that (i)
                      Tenant  shall give  Landlord  at least  twenty  (20) days'
                      prior  written  notice  of  its  intent  to  conduct  such
                      sidewalk promotion,  (ii) the sidewalk promotion shall not
                      extend  beyond the  sidewalk  adjacent to the  building in
                      which the  Premises  is  located,  and shall not block any
                      entrances,  exits,  ramps or curb  cuts,  and  (iii)  such
                      sidewalk  promotion  shall  not  interfere  with any other
                      tenants in the  Shopping  Center.  Tenant  shall not place
                      anything  on the roof or  exterior  walls of the  Premises
                      without first  obtaining,  in each  instance,  the written
                      consent of Landlord,. which consent may be withheld in


FS2\267\%412~oo3l~2Is499o.5 aO8YO7/95                    -10-

<PAGE>
         Landlord's sole and absolute discretion.  In addition,  Tenant will not
         solicit or  distribute  materials  in any manner in any  portion of the
         building  in which the  Premises  are  located  other  than  within the
         Premises itself.

                               (e)Tenant  covenants  that it  shall  not use the
                      Premises  for any use or  purpose  in  violation  of or in
                      conflict with any covenants; conditions,  easements, trust
                      deeds, ground lease(s), rights, rights-of-way or any other
                      matters now or  hereafter  of record or in other leases of
                      building space within the Project in effect as of the date
                      of  this  Lease,  provided  that  the  provisions  of this
                      sentence shall not be construed so as to prohibit Tenant's
                      operation  of the general  type of business  described  in
                      Article I,  subsection (i) above from the Premises  during
                      the Lease Term.

         7.3 Compliance with Laws.  Tenant hereby warrants that its proposed use
and occupancy of the Premises and its proposed  manner of operation  will comply
with all applicable  laws, and Tenant assumes the risk that such use,  occupancy
and manner of operation  are, and will  continue to be, in  compliance  with all
municipal ordinances,  state and Federal statutes,  governmental regulations and
other applicable laws, including without limitation,  all zoning laws regulating
the use and  enjoyment of the Premises.  At Tenant's sole expense,  Tenant shall
procure,  maintain and hold available for Landlord's inspection any governmental
license  or permit  required  for the proper  and  lawful  conduct  of  Tenant's
business.  Tenant  agrees to install  and pay for any  improvements,  changes or
alterations  in the  Premises  required by any  governmental  authority,  and if
Landlord performs such alterations  because of Tenant's failure to do so, Tenant
shall promptly  reimburse Landlord for such costs plus interest at the lesser of
eighteen  percent  (18%~) per annum or the  maximum  rate  permitted  by law, as
Additional  Rent.  Tenant's  violation  of  applicable  laws shall  constitute a
material  non-curable  breach  of this  Lease.  The  judgment  of any  court  of
competent  jurisdiction  or the  admission of Tenant in any action or proceeding
against  Tenant,  whether  Landlord be a party  thereto or not,  that Tenant has
violated any such order or statute  shall be  conclusive of that fact as between
the Landlord and Tenant.  Citations by a  governmental  agency shall  constitute
prima facie evidence of a material non-curable breach of this Lease.

         7.4  Trash  Removal.   Tenant  shall  use  the  sanitation   contractor
designated by Landlord for the storage,  removal and disposal of all rubbish and
trash from the Premises and in connection  therewith shall comply with rules and
regulations established by Landlord from time to time and shall confine Tenant's
rubbish in metal  containers  located  within trash storage areas  designated by
Landlord  so as not to be visible to the  public.  If Tenant  fails to  promptly
store,  remove  and/or  dispose of all trash and  rubbish  from the  Premises in
accordance with this provision,  Landlord may do so at Tenant's  expense as more
particularly provided in Section 17.5 below.

         7.5  Compliance  with Rules and  Regulations.  Tenant shall  faithfully
observe and comply with such rules and regulations, including but not limited to
those set forth in the attached  Exhibit "F" (which rules and regulations  shall
be reasonable and nondiscriminatory as among tenants with similar uses, location
and premises size), that Landlord may from time to time promulgate and/or modify
or supplement  relating to the use and  operation of the Shopping  Center and/or
any  adjacent  areas  and/or  the  protection  of  the  improvements  upon  such
properties.  Violation of such rules and regulations shall constitute a material
breach of this  Lease.  Landlord  shall  not be  responsible  to Tenant  for the
nonperformance  of any of  said  rules  and  regulations  by  other  lessees  or
occupants.   Any  Tenant's  Handbook  provided  to  Tenant  and  all  rules  and
regulations, once adopted, after notice of same is provided to


FS2\267\064I2~oo3I\2I549qo.s aOSIO7/9S                   -11-

<PAGE>
Tenant,  shall become  material  terms of this Lease and violation of same shall
constitute a material breach of this Lease.

         7.6  Deliveries.  Tenant shall  attempt to cause no delivery  trucks or
other vehicles  servicing the Premises to park or stand in front of the Premises
at any time from  10:00  a.m.  to 9:00 p.m.  of each day,  or at the rear of the
Premises for more than two (2) hours at a Lime.  Landlord  reserves the right to
further reasonably regulate the activities of the Tenant in regard to deliveries
and servicing of the Premises by the adaption of rules and regulations  relating
thereto pursuant to Section 7.5 above.

         7.7  Hazardous  Waste and  Materials.  Tenant  shall not  engage in any
activity on or about the Premises that violates any Environmental Law, and shall
promptly,  at Tenant's  sole cost and  expense,  take all  investigatory  and/or
remedial action required or ordered by any governmental  agency or Environmental
Law for  cleanup  and  removal  of any  contamination  involving  any  Hazardous
Material  created  or  caused  directly  or  indirectly  by  Tenant.   The  term
"Environmental  Law"  shall  mean  any of the  acts,  statutes  and  regulations
referred to in the definition of Hazardous Material contained herein, as amended
from time to time,  and any other federal,  state or local  statute,  ordinance,
rule,  regulation,  order,  consent  decree,  judgment or  common-law  doctrine,
interpretation  thereof,  and provisions  and  conditions of permits,  licenses,
plans,  approvals and other operating  authorizations whether currently in force
or hereafter enacted relating to (i) pollution or protection of the environment,
including natural resources;  (ii) exposure of persons,  including employees, to
Hazardous  Material  or  other  products,  raw  materials,  chemicals  or  other
substances; (iii) protection of the public health or welfare from the effects of
by-products,  wastes,  emissions,  discharges or releases of chemical substances
from  industrial  or  commercial  activities;  (iv)  the  manufacture,   use  or
introduction   into  commerce  of  chemical   substances,   including,   without
limitation,   their   manufacture,    formulation,    labeling,    distribution,
transportation,  handling,  storage and disposal; (v) the use, storage, disposal
or transportation of Hazardous  Material;  (vi) the  investigation,  assessment,
monitoring,  clean-up,  treatment or remediation of Hazardous Material; or (vii)
the release or threatened  release into the environment or presence of materials
or substances which have been determined to be a nuisance or dangerous, toxic or
hazardous  or a pollutant  or  contaminant.  The term  "Hazardous  Material"  is
defined to include and mean any hazardous or toxic substance,  material or waste
which is or becomes regulated by any local governmental authority,  the State of
California,  or the United  States  Government.  The term  "Hazardous  Material"
includes,  without  limitation,  (i) any  material or substance  which  contains
petroleum,  oil,  gasoline,  diesel fuel or other petroleum  hydrocarbons or any
direct or derivate product or byproduct thereof;  (ii) any material or substance
which is flammable,  radioactive,  corrosive or carcinogenic; (iii) any material
or substance, the presence of which on the Premises causes or threatens to cause
a nuisance or health hazard affecting the Premises or property adjacent thereto;
(iv) any material or substance,  the presence of which on the Premises  requires
investigation or remediation  under any  Environmental  Law; (v) any material or
substance which is defined as a "hazardous waste, " "extremely  hazardous waste"
or "restricted  hazardous  waste" under  Sections  25115,  25117 or 25122.7,  or
listed  pursuant to Section  25140,  of the  California  Health and Safety Code,
Division  20,  Chapter 6.5  (Hazardous  Waste  Control Law) (vi) any material or
substance which is defined as a "hazardous substance" under Section 25316 of the
California    Health   and   Safety    Code,    Division    20,    Chapter   6.8
(Carpenter-Presley-Tanner  Hazardous  Substance Account Act); (vii) any material
or substance which is defined as a "hazardous material," "hazardous  substance,"
or  "hazardous  waste"  under  Sections  25501(j)  and  (k) and  25501.1  of the
California  Health and  Safety.  Code,  Division  20,  Chapter  6.95  (Hazardous
Materials Release Response Plans and Inventory); (viii)


FS2\267\%412~oo3l\2Is499o.s n08107195                   - 12 -

<PAGE>
any material or  substance  which is defined as a  "hazardous  substance"  under
Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground Storage of Hazardous Substances);  (ix) "used oil" as defined under
Section 25250.1 of the California Health and Safety Code; (x) asbestos; (xi) any
material or substance which is listed under Article 9 or defined as hazardous or
extremely hazardous pursuant to Article 1 of Title' 22 of the California Code of
Regulations,  Division 4, Chapter 30;  (xii) any material or substance  which is
defined as waste or a hazardous  substance pursuant to the  Porter-Cologne  Act,
Section 13050 of the  California  Water Code;  (xiii) any material or substances
designated  as a "toxic  pollutant"  pursuant  to the  Federal  Water  Pollution
Control  Act, 33 U.S.C.  ss. 1317 or regulated by the Clean Water Act, 33 U.S.C.
Sections XII 1251 et sea.; (xiv) any material or substance which is defined as a
"hazardous  waste" pursuant to the Federal  Resource  Conservation  and Recovery
Act, 42 U.S.C.  ss. 6901 et sea.  (42 U.S.C.  ss.  6903);  (xv) any  material or
substance  which  is  defined  as  a  "hazardous   substance"  pursuant  to  the
Comprehensive Environmental Response,  Compensation and Liability Act, 42 U.S.C.
S 9601 et sea. (42 U.S.C.  S 9601)  ("CERCLA");  (xvi) any material or substance
which is defined as "Hazardous  Material"  pursuant to the  Hazardous  Materials
Transportation  Act, 49 U.S.C. S 1801 et sea.;  (xvii)  substances  known by the
State of California to cause cancer and/or reproductive toxicity; or (xviii) any
material or substance  which is defined as such or regulated by any  "Superfund"
or  "Superlien"  law,  or any  other  federal,  state  or  local  law,  statute,
ordinance, code, rule, regulation,  order or decree regulating,  relating to, or
imposing liability or standards of conduct concerning  Hazardous Material and/or
oil wells and/or underground  storage tanks and/or pipelines,  as now, or at any
time  hereafter,  in effect.  It is the intent of the parties hereto to construe
the terms "Hazardous  Material" and "Environmental Law" in their broadest sense.
Tenant shall provide all notices  required  pursuant to the Safe Drinking  Water
and Toxic  Enforcement  Act of 1986,  California  Health and Safety Code Section
25249.5 et sea.  Tenant shall provide  prompt  written notice to Landlord of the
existence of Hazardous  Material on the Premises and all notices of violation of
Environmental  Law  received by Tenant.  Tenant's  obligations  pursuant to this
Section 7.7 shall be referred  to in this Lease as  "Environmental  Compliance".
Landlord  acknowledges that Tenant sells models,  model building  supplies,  and
model  fuel in  connection  with its  business  and that such sale  shall not be
prohibited  by this Section 7.7 50 long as the storage and sale of such products
complies with the Environmental Laws and all other laws and statutes  applicable
thereto.  Landlord warrants to Tenant that to Landlord's knowledge,  at the time
of delivery of the  Premises,  the  Premises  and the  building  containing  the
Premises shall be free of all Hazardous Materials,  including but not limited to
asbestos, in excess of levels permitted by Environmental Laws.


                                  ARTICLE VIII

                               TAXES AND INSURANCE

         8.1 Taxes and  Insurance.  From and  after  the  Commencement  Date and
continuing for the balance of the Lease Term,  Tenant agrees to pay to Landlord,
in addition to the rent  payable  pursuant to Article V hereof (a) the amount of
Taxes  (as  defined  below)  levied  and  assessed  upon  the  Premises  and the
underlying  realty;  and (b) the cost to Landlord of the insurance that Landlord
elects to maintain on the Premises pursuant to Article X below. Such sum for any
partial year of the Lease Term shall be prorated on a daily basis. Payment shall
be made in the  following  manner:  From and  after  the  Commencement  Date and
thereafter on the first day of each calendar month during the Lease Term, Tenant
shall pay to  Landlord  an amount  estimated  by  Landlord to be the monthly sum
payable hereunder by Tenant. Landlord may adjust the monthly estimated sum


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<PAGE>
at the end of each calendar  quarter on the basis of Landlord's  experience  and
reasonably  anticipated costs. Within ninety (90) days following the end of each
calendar year, or at Landlord's  option,  each tax year,  Landlord shall furnish
Tenant with a statement  covering  such year just  expired  showing the total of
such  Taxes and  insurance  expenses  payable  by  Tenant  for such year and the
payments  made by Tenant with  respect to such period as set forth  above.  Upon
Tenant's  written  request,  Landlord  shall  provide  Tenant with copies of the
applicable  tax and  insurance  premium  bills.  If the  sums  payable  for such
expenses  exceed  Tenant's  payments  so made,  Tenant  shall pay  Landlord  the
deficiency  within ten (10) days after  receipt  of such  statement.  Landlord's
delay in furnishing such a statement shall not excuse Tenant from timely payment
of the sums due, nor  constitute a waiver of  Landlord's  right to said sums. If
Tenant's  payments  exceed the sums payable for such  expenses,  Tenant shall be
entitled to offset the excess  against  payments  next  thereafter to become due
Landlord under this Section.

         8.2  Definition  of  "Floor  Area".  The  term  "Floor  Area"  as  used
throughout  this Lease means  separately with respect to the Premises the actual
number of square feet of floor space  within the  Premises as measured  from the
exterior  of  exterior  walls and the center  line of common  walls,  and,  with
respect to the balance of the Project, the actual number of square feet of floor
space  (exclusive  of any space on  mezzanines,  and  basements  or on  exterior
balconies  unless  used for the sale,  consumption  or display  of  merchandise)
within the  exterior  faces of building  walls and  measured  from the center of
common walls,  but excluding any such space (a) not intended by Landlord for the
exclusive  occupancy by lessees;  (b) within  outside sales and/or seating areas
whether or not roofed and/or enclosed;  and (c) within truck ramps and/or docks,
trash storage and compaction  areas.  The term Floor Area,  both with respect to
the  Premises and the balance of the Project,  shall not include  outside  sales
display or food  consumption  areas to the extent  that they  extend  beyond the
building lines of buildings  fronting upon the area designated as "mall area" on
the attached  Exhibit "A", whether or not roofed and regardless of how enclosed,
other than areas  within  three  dimensional  popout store fronts and floor area
within wall kiosk units attached to any such building, as determined by Landlord
in any reasonable and consistent manner. For the purpose of making any proration
or  allocation  to be made under this Lease based upon Floor Area,  Landlord may
conclusively  assume that the Floor Area of the Premises is the estimated  Floor
Area of  Premises  specified  in Article  I,  subsection  (d) above,  subject to
adjustment as provided in Section 5.1(b) above.

         8.3 Allocation of Taxes. In the event that the Taxes are not separately
levied or assessed  against the Premises  and the  underlying  realty,  Landlord
shall prorate the Taxes levied or assessed  against either the Shopping  Center,
or any smaller tax parcel in which the Premises are situated and/or any building
in which the  Premises are  situated,  at  Landlord's  sole  discretion,  to the
Premises and the underlying realty in any reasonable manner. An allocation based
upon a proration  or  information  obtained  from the County  Assessor,  or upon
construction  costs, or an allocation based upon. the ratio that the total Floor
Area of the  Premises  bears to the total  Floor Area  within the  relevant  tax
parcel or parcels or  building,  as to that  portion of such Taxes  allocated to
building improvements,  and based on the ratio between the number of square feet
of ground  Floor Area  within the  Premises to the number of square feet of land
area covered by the relevant tax statement or statements,  as to that portion of
such  Taxes  allocable  to land,  exclusive  of  building  improvements,  or any
combination  thereof,  shall be deemed  to be a  reasonable  allocation  for the
purposes of this Section.  Notwithstanding  the  foregoing,  if the Premises are
situated  within a  multi-story  building,  Landlord  shall  allocate  the Taxes
attributable to the land beneath the Premises between the


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Premises and the Floor Area above or below the Premises in such  building in any
reasonable manner selected by Landlord.

         8.4  Payment in  Installments.  With  respect to any Taxes which may be
levied  against or upon the Premises and the underlying  realty,  or which under
the laws then in force may be evidenced by improvement or other bonds, or may be
paid in annual  installments,  only the amount of such annual  installment (with
appropriate  proration for any partial year) and statutory interest hereon shall
be  included  within the  computation  of the annual  Taxes  levied  against the
Premises and the underlying realty.

         8.5  Allocation of Insurance.  In the event the cost to Landlord of the
insurance  that Landlord  elects to maintain on the Premises  under Article X of
this Lease is not separately charged to Landlord by the insurance  carrier,  the
portion of such cost  applicable  to the Premises  shall be that portion of such
cost which the Floor Area of the Premises  bears to the Floor Area of all of the
areas which are covered by such  insurance  and are  available for the exclusive
use and  occupancy  of tenants of the Shopping  Center,  whether or not actually
occupied and open for business.

         8.6 Definition of Taxes.  As used herein the term "Taxes" shall include
any  form of  real  estate  tax or  assessment,  general,  special  ordinary  or
extraordinary,  and any  license  fee,  license  tax,  tax or  excise  on  rent,
improvement bond or bonds, levy, penalty, charge, expense or other tax, together
with any  statutory  interest  thereon,  imposed or  required at any time by any
authority  having  the  direct or  indirect  power to tax,  including  any city,
county, state or federal government,  any political  subdivision thereof, or any
school,  agricultural,  sanitary,  fire,  street,  lighting,  drainage  or other
improvement  or special  assessment  district  thereof,  as against any legal or
equitable  interest  of Landlord  or Tenant,  or both in the  Premises or in the
underlying  realty,  or as  against  Landlord's  rights to rent or other  income
therefrom or as against  Landlord's  business of leasing the Premises.  The term
"Taxes"  shall also  include any tax,  fee,  levy,  assessment,  charge or other
imposition (a) in  substitution  of,  partially or totally,  any tax, fee, levy,
assessment,  charge  or  other  imposition  herein  above  included  within  the
definition  of  "Taxes",  including  without  limitation,  those  calculated  to
increase tax increments and to pay for such services as fire protection, street,
sidewalk and road  maintenance,  refuse removal or other  governmental  services
formerly  provided  without  charge to  property  owners or  occupants;  (b) any
impositions  allocable  to or  measured  by the  area  of the  Premises,  or the
underlying real property,  or any rental payable  hereunder,  including  without
limitation,  any gross  income tax or excise tax levied by the  federal,  state,
county or city government, or any political subdivision thereof, with respect to
the receipt of such rent,  or upon or with  respect to the  possession,  leasing
operation,  management,  maintenance,  alteration,  repair,  use or occupancy by
Tenant of the  Premises,  or any  portion  thereof;  (c) which is imposed  for a
service  or right or on an  interest  not  charged  prior to June 1, 1978 or, if
previously charged,  has been increased since June 1, 1978; (d) which is imposed
as a result of transfer,  either partial or total, of Landlord's interest in the
Premises  or the  underlying  realty  or  which  is  added  to a tax  or  charge
hereinbefore  included  within  the  definition  of  '1Taxes"  by reason of such
transfer; provided, however, that during the first two (2) Lease Years, Tenant's
portion of the Taxes shall not include any  increase in Taxes  imposed by reason
of such  transfer;  (e) which is  imposed  by reason  of this  transaction,  any
modifications  or changes hereto,  or any transfers  hereof;  or (f) any and all
reasonable  costs  (including  without  limitation,  the  fees of  experts,  tax
consultants  and attorneys,  provided that Tenant's share of the Taxes shall not
include  a fee paid to an  independent  third  party to  process  a tax  contest
exceeding Two Thousand Dollars ($2,000.00)) incurred by Landlord should Landlord
elect to negotiate or contest the amount


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<PAGE>
of any Taxes in formal or informal  proceedings  before the taxing  governmental
agency.  The term  "Taxes"  shall not include  any penalty or interest  for late
payment of taxes and assessments,  Landlord's income,  franchise,  estate, gift,
inheritance and capital levy taxes,  environmental  surcharges imposed by reason
of Landlord's  violation of Environmental  Laws, or taxes or assessments imposed
to finance the  construction of new capital  improvements on the Shopping Center
to the extent  inconsistent  with the  limitations for the imposition of capital
improvement  costs paid through  Common Area  Expenses  pursuant to Section 19.3
below.

         8.7 Tax on Rent.  If at any time during the Lease Term,  under the laws
of the United  States  Government,  State,  County,  or City,  or any  political
subdivision thereof in which the Premises are situated,  a tax or excise on rent
or any other tax however  described is levied or assessed by any such  political
body,  against  Landlord on account of or  measured  by any  rentals  payable to
Landlord  hereunder,  such tax or excise  shall be  considered  "Taxes"  for the
purpose of this Article VIII,  excluding,  however,  from such tax or excise all
general income taxes, gift taxes, inheritance taxes and estate taxes.



                                   ARTICLE IX

                               UTILITIES SERVICES

         9.1 Utility  Charges.  Tenant shall pay before  delinquency all charges
for water, gas, heat, electricity, power, sewer, telephone service and all other
services and utilities  (collectively  "Utilities")  used in, upon, or about the
Premises by Tenant or any of its subtenants, licensees or concessionaires during
the Lease  Term,  prior to the  Commencement  Date or at any other time when any
party is occupying or using the Premises by or under Tenant. If any such charges
are not paid when due, Landlord may, but shall not be required to, pay the same,
and any amount so paid by Landlord shall  immediately  thereafter  become due to
Landlord from Tenant as Additional Rent. Landlord  acknowledges that electricity
and water are separately metered to the Premises.

         9.2 Failure to Pay. Tenant's failure to pay the Utility Charges or IWAC
Charges,  if any, when due, shall be deemed a monetary default under this Lease.
Landlord, in addition to any other remedies set forth in this Lease by reason of
such  default,  shall have the right,  but not the  obligation,  to pay any such
Utility Charges, HVAC Charges or other charges for utilities to the Premises and
any such payments  shall be due from Tenant as Additional  Rent upon demand from
Landlord.

         9.3 No Liability.  Landlord shall not be liable in damages or otherwise
to Tenant or any third party for any discontinuance,  failure or interruption of
service to the  Premises of  Utilities  or HVAC  System.  Additionally,  no such
discontinuance,  failure,  interruption  or entry shall be deemed a constructive
eviction,  or an interference  with Tenant's quiet enjoyment of the Premises and
shall  not  entitle  Tenant  to  terminate  this  Lease or to any  abatement  or
reduction  in  Minimum  Annual  Rent,  Additional  Rent or other rent or charges
payable  hereunder.  If Landlord elects to discontinue  furnishing the Utilities
and/or  IWAC  System  to  the  Premises  for  any  reason  other  than  Tenant's
non-payment  of the Utility  and/or IWAC  Charges,  or other rent due under this
Lease,   Tenant  shall  obtain  its  own  Utilities   and/or  an  alternate  air
conditioning system for the Premises and Tenant shall have a non-exclusive right
to use all meters,  pipes,  conduits,  equipment,  components and facilities for
Utilities and air conditioning which may be located in the Premises.


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<PAGE>
                                    ARTICLE X

                  INDEMNITY - INSURANCE - WAIVER OF SUBROGATION

         10.1 Indemnity by Tenant.  Tenant covenants with Landlord that Landlord
shall not be liable for any damage or liability of any kind or for any injury to
or death of  persons,  or damage  to  property  of  Tenant  or any other  person
occurring from and after the execution of this Lease, from any cause whatsoever,
by reason of the use, occupancy and/or enjoyment of the Premises, areas adjacent
thereto  and/or the Shopping  Center by Tenant or any person  thereon or holding
under Tenant, or by reason of Tenant's failure to perform any of its obligations
under this Lease (including,  without  limitation,  those obligations defined in
Section 7.7 as  Environmental  Compliance) , or by reason of any act or inaction
on the part of  Tenant  or of  anyone  entering  upon the  Premises  by or under
Tenant,  and that  Tenant  will  indemnify  and  save  Landlord,  its  officers,
partners,  employees  and  agents  harmless  from  any and all  claims,  losses,
proceedings,  damages, causes of action, liability, costs or expenses (including
attorneys'  fees and costs) , on  account of any such real or claimed  damage or
injury and from all liens,  claims,  and  demands  arising out of the use of the
Premises and its facilities, or any repairs or alterations which Tenant may make
upon said Premises.  Notwithstanding  the foregoing,  Tenant shall not be liable
for damage or injury  occasioned  by the willful  misconduct  of Landlord or its
designated agents, servants or employees,  unless covered by insurance Tenant is
required to provide. This obligation to indemnify shall include Tenant's payment
of reasonable  attorneys' fees and investigation  costs and all other reasonable
costs, expenses and liabilities incurred or suffered by Landlord from Landlord's
receipt  of the  first  notice  that any claim or demand is to be made or may be
made.

         10.2  Waiver  of  Subrogation.  Landlord  (to  the  extent  and  on the
condition  that Tenant carries and maintains the insurance at all times required
under Section 10.3) and Tenant hereby waive any rights each may have against the
other on  account of any loss or damage  occasioned  by  property  damage to the
Premises or its contents  arising from any risk  generally  covered by insurance
against the perils of fire,  extended coverage,  vandalism,  malicious mischief,
theft,  sprinkler damage and earthquake sprinkler leakage.  Each of the parties,
on behalf of their  respective  insurance  companies  insuring  such property of
either Landlord or Tenant against such loss, waive any right of subrogation that
it may have against the other.  The foregoing  waivers of  subrogation  shall be
operative only so long as available in California  and provided  further that no
such policy is invalidated thereby.

         10.3 Insurance  Maintained by Tenant.  Tenant covenants and agrees that
from and after the earlier of the  Commencement  Date or Tenant's entry onto the
Premises,  Tenant will carry and  maintain,  at its sole cost and  expense,  the
following  types  of  insurance,  in the  amounts  specified  and  in  the  form
hereinafter provided:

                               (a)Public  Liability.  Bodily injury and property
                      damage   comprehensive   general  liability  insurance  or
                      commercial  general  liability   insurance  with  coverage
                      limits   of  not   less   than   Three   Million   Dollars
                      ($3,000,000.00)  combined single limit, per occurrence and
                      in the aggregate insuring against any and all liability of
                      Tenant,  its occupants,  assigns,  permittees and invitees
                      with respect to the Premises,  the Shopping Center, or any
                      part of either, or arising out of the maintenance,  use or
                      occupancy  thereof.   All  such  bodily  injury  liability
                      insurance and property  damage  liability  insurance shall
                      include  a  broad  form  contractual  liability  insurance
                      coverage  specifically  insuring the performance by Tenant
                      of the indemnity agreement  contained in Section.  10.1 as
                      to liability  for injury to or death of persons and injury
                      or damage to property. During the option term, if validly


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<PAGE>
         exercised  pursuant  to Tenant  hereunder,  and if, in the  opinion  of
         Landlord's  lender or of  Landlord's  insurance  agent,  the  amount of
         public liability and the property damage insurance coverage required by
         this  subparagraph at that time is not adequate,  Tenant shall increase
         the insurance  coverage as required or recommended by either Landlord's
         lender or Landlord's insurance broker;  provided,  however,  that in no
         event shall the general  liability  coverage limits exceed Five Million
         Dollars ($5,000,000.00).

                               (b)Worker's  Compensation.  Workers' Compensation
                      Insurance  with  benefits  and  limits  according  to  the
                      statutory  law of the State of  California,  and employers
                      liability  insurance with limits not less than One Million
                      Dollars  ($1,000,000.00)  per  employee  and  One  Million
                      Dollars ($1,000,000.00) per occurrence.

                               (c)Plate  Glass.   Insurance  covering  the  full
                      replacement  cost  of all  plate  glass  on the  Premises.
                      Tenant shall have the option either to insure commercially
                      or to self-insure the risk.

                               (d)Tenant's Improvements.  Insurance covering all
                      of the items  specified as "Tenant's Work" in Exhibit o"C"
                      Si   Tenant's   leasehold   improvements   and   fixtures,
                      alterations,  additions or  improvements  permitted  under
                      Article  XI,  trade  fixtures,   signs,   merchandise  and
                      personal  property  from  time to time in,  on or upon the
                      Premises,  in an amount  not less than  their  depreciated
                      value from time to time during the Lease  Term,  providing
                      protection   against   any  peril   included   within  the
                      classifications  "Fire and Extended Coverage",  "All-Risk"
                      and/or  "Special  Form",  together with insurance  against
                      sprinkler and flood damage, vandalism, theft and malicious
                      mischief   and  such  other   coverage   as   required  or
                      recommended by Landlord's  mortgagee or insurance analyst.
                      Any  policy  proceeds  shall  be used  for the  repair  or
                      replacement  of the property  damaged or destroyed  unless
                      this Lease shall cease and terminate  under the provisions
                      of Article XVIII hereof.

          10.4 Insurance Requirements. All policies of insurance provided for in
this   Article  X  shall  be  issued  by   insurance   companies   with  general
policyholder's  rating  of not less than A- and a  financial  rating of not less
than Class VI as rated in the most current available "Best's" Insurance Reports,
qualified to do business in the State of California.  All such policies shall be
written to apply to all bodily  injury,  property  damage,  personal  injury and
other covered loss, as applicable, however occasioned,  occurring or arising (or
the onset of which  occurring or arising  occurs) in whole or in part during the
covered term.  All such policies  shall  contain  endorsements  (i) deleting any
employee  exclusion on personal  injury  coverage;  (ii) including  employees of
Landlord  and Tenant as  additional  insured (in  addition  to Landlord  and its
designees  as  provided  below);'  and (iii)  waiving  the  insurer's  rights of
subrogation against Landlord.  All such policies shall be issued in the names of
Landlord  and  Tenant,  and if  requested  by  Landlord,  such other  persons or
entities as Landlord  shall  designate,  which policies shall be for. the mutual
and joint  benefit and  protection of Landlord and Tenant and such other persons
or entities.  Executed  copies of such  policies of  insurance  or  certificates
thereof, with loss payable clauses satisfactory to Landlord,  shall be delivered
to Landlord  within ten (10) days after  substantial  completion of the Premises
and  thereafter,  executed copies of renewal  policies or  certificates  thereof
shall be delivered to Landlord at least thirty (30) days prior to the expiration
of each such policy. Time is of the essence with respect to delivery of executed
policies or  certificates  of insurance.  Tn the event Tenant permits a lapse in
coverage of any of the  policies  required to be carried by Tenant,  at any time
during the Lease Term, such lapse shall constitute a material


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<PAGE>
noncurable  default of the Lease entitling  Landlord,  at its sole election,  to
immediately  terminate  the Lease  without  notice.  All  public  liability  and
property damage  policies shall provide for  severability of interests and shall
contain a  provision  that an act or  omission  of one of the named  insureds or
additional  insureds  shall not reduce or avoid  coverage  to the other named or
additional  insureds.  As often as any such policy  shall  expire or  terminate,
renewal or  additional  policies  shall be procured and  maintained by Tenant in
like manner and to like extent.  All policies of insurance  and or  certificates
evidencing  such  insurance  delivered to Landlord must contain a provision that
the company writing said policy will give to Landlord thirty (30) days notice in
writing in advance  of any  cancellation  of  insurance.  All public  liability,
property  damage  and  other  casualty  policies  shall be  written  as  primary
policies,  not  contributing  with, and not in excess of coverage which Landlord
may carry.  Tenant agrees to permit Landlord at all reasonable  times to inspect
any policies of insurance  of Tenant  which  policies or copies  thereof are not
delivered to Landlord.

          10.5  Blanket  Policy.   Notwithstanding   anything  to  the  contrary
contained  within this Article x,  Tenant's  obligations  to carry the insurance
provided for herein may be brought  within the  coverage of a so-called  blanket
policy or policies of  insurance  carried and  maintained  by Tenant;  provided,
however,  that Landlord,  Landlord's  mortgagee or beneficiary and other parties
with an insurable  interest  designated by Landlord shall be named as additional
assureds  thereunder,  as their  interests  may  appear,  and that the  coverage
afforded  Landlord  and  such  other  named  assureds  will  not be  reduced  or
diminished  by  reason  of the use of such  blanket  policy  of  insurance,  and
provided further that the requirements set forth in this Article X are otherwise
satisfied.

          10.6  Insurance  Maintained by Landlord.  Landlord  shall at all times
from and after  substantial  completion  of the  Premises  maintain  in effect a
policy or policies of insurance  covering the building of which the Premises are
a part (excluding  occupants'  trade fixtures,  merchandise,  inventory or other
items used in the trade or  business of building  occupants  and, at  Landlord's
option,  their  leasehold  improvements)  , in an amount  not less  than  eighty
percent (80%) of full  replacement  cost  (exclusive of the cost of excavations,
foundations  and footings) from time to time during the Lease Term or the amount
of such  insurance  Landlord's  mortgagee  may  require  Landlord  to  maintain,
whichever  is the  greater,  providing  protection  against any peril  generally
included in the classifications "Fire and Extended Coverage",  "All-Risk" and/or
"Special  Form".  At Landlord's  option,  such  insurance may include  insurance
against  sprinkler damage,  vandalism and malicious  mischief and loss of rental
income. If required or recommended by Landlord's mortgagee or insurance analyst,
Landlord  shall have the right but not the  obligation  to procure and  maintain
coverage for other perils,  such as earthquake  (to the extent such premiums are
commercially  reasonable)  or  flood.  Tenant  shall  have no  interest  in such
insurance  and/or  the  proceeds  thereof.  Landlord's  obligation  to carry the
insurance  provided  for  herein  may be  brought  within  the  coverage  of any
so-called  blanket  policy or policies of insurance  carried and  maintained  by
Landlord.

          10.7  Avoidance of Increased  Risk.  Tenant agrees that it will not at
any time  during the Lease Term  carry any stock or goods or do  anything  in or
about the Premises  which will in any way tend to increase the  insurance  rates
upon the building of which the Premises are a part or other buildings within the
Project.  Tenant agrees to pay to Landlord  forthwith  upon demand the amount of
any increase in  insurance  premiums  that may be charged  during the Lease Term
resulting  from a breach of the foregoing  sentence or from Tenant doing any act
in or about said Premises which does so increase the insurance rates, whether or
not  Landlord  shall have  consented  to such act as on the part of  Tenant.  If
Tenant installs


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<PAGE>
upon the Premises any electrical  equipment which constitutes an overload of the
electrical  lines  of the  Premises,  Tenant  shall,  at its own  expense,  make
whatever  changes are necessary to comply with the requirements of the insurance
underwriters and any governmental authority having jurisdiction  thereover,  but
nothing herein  contained  shall be deemed to constitute  Landlord's  consent to
such   overloading.   Tenant  shall,  at  its  own  expense,   comply  with  all
requirements,  including the installation of fire extinguishers or automatic dry
chemical extinguishing system, of the insurance underwriters or any governmental
authority having jurisdiction  thereover,  necessary for the maintenance of fire
and extended coverage insurance for the Premises.


                                   ARTICLE XI

            TENANT'S RIGHTS TO MAKE ALTERATIONS AND IMPROVEMENTS

         11.1  Alterations  and   Improvements.   Tenant's  right  to  make  any
alterations,  installations,  construction,  signage,  additions,  replacements,
improvements,  changes  or  anything  attached  to or  affixed,  permanently  or
temporarily  (collectively referred to in this Article XII as Improvements),  to
the Premises or the Shopping  Center shall be exercised  strictly in  accordance
with this Article XI and any other provisions of this Lease respecting same.

                      Ca)  Landlord  agrees  that Tenant may, at its own expense
                      and after  giving  Landlord  at least  twenty  (20)  days'
                      notice in writing  of its  intention  to do so,  make such
                      Improvements  in  and  to the  interior  of  the  Premises
                      costing,  in the  aggregate,  Two  Thousand  Five  Hundred
                      Dollars  ($2,500.00) or less, as Tenant may find necessary
                      or convenient for Tenant's purposes.  Notwithstanding  the
                      foregoing, no Improvements may be made that would diminish
                      the value of the  Premises.  No  Improvements  costing  in
                      excess of Two Thousand Five Hundred  Dollars  ($2,500.00),
                      in the aggregate,  may be made without first obtaining the
                      written  consent of  Landlord,  which  consent,  except as
                      provided   in   subparagraph   (b)   below,   may  not  be
                      unreasonably  withheld.  Within  thirty  (30)  days  after
                      completing any such Improvements,  Tenant shall certify to
                      Landlord in writing  Tenant's  actual coat of constructing
                      such Improvements.

                               (b)No  Improvements  may be  made  to  any  store
                      front,  mechanical  system,  utilities or utility systems,
                      the  exterior  walls or roof of the  Premises,  nor  shall
                      Tenant  erect any  mezzanine or increase the size of same,
                      if one be initially constructed,  nor may any Improvements
                      of  a  structural   nature  be  made  without   Landlord's
                      approval,  which  approval  may be withheld in  Landlord's
                      sole and  absolute  discretion.  In no event shall  Tenant
                      make or cause to be made any  penetration  into or through
                      the roof or the floor of the  Premises  without  the prior
                      written  approval  of  Landlord,  which  approval  may  be
                      withheld  in  Landlord's  sole  and  absolute  discretion.
                      Notwithstanding   the  foregoing,   in  the  event  Tenant
                      requires the use of a television antenna for the operation
                      of its business in the Premises,  Tenant shall be entitled
                      to  connect  to  Landlord's  cable  television  or similar
                      system,  if  such  system  is  available  in the  Shopping
                      Center,  at  Tenant's  sole cost and  expense.  If no such
                      system exists, Tenant shall be entitled to install one (1)
                      television  antenna  upon  the roof at  Tenant's  cost and
                      expense,  provided  such  antenna is fully  screened  from
                      view,  with the prior  written  approval of Landlord as to
                      its size,  location  and  installation,  engineering  with
                      respect   to   support   of  the   roof  and   plans   and
                      specifications  therefor, all of which shall be determined
                      in the  sole  discretion  of the  Landlord.  Landlord  may
                      require Tenant to use its electrical contractor,  with all
                      expenses paid by Tenant, or approve & qualified contractor
                      selected by

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<PAGE>
          Tenant.  Tenant agrees to relocate such antenna, at Tenant's
          expense, to a location Landlord selects if Landlord requires the
          antenna to be moved.

                               (c)Tenant shall be liable for and shall indemnify
                      and defend Landlord from any claim,  demand,  lien,  loss,
                      damage or expenses, including reasonable attorney fees and
                      costs,  arising  from  any  Improvements  permitted  under
                      Article XI and/or from violation of the provisions of this
                      Article XI~

                               (d)All  Improvements  to be made to the  Premises
                      which  require the  approval of Landlord  shall be planned
                      and inspected by a competent licensed  contractor approved
                      by  Landlord  and  made  in  accordance   with  plans  and
                      specifications  approved in writing by Landlord before the
                      commencement of such work. Any such Improvements  shall be
                      performed and done  strictly in  accordance  with the laws
                      and ordinances relating thereto and in accordance with the
                      requirements  set forth as  applicable to Tenant's Work in
                      Exhibit "C" attached hereto.  All work with respect to any
                      Improvements  shall  be  done  in a good  and  workmanlike
                      manner and diligently prosecuted to completion so that the
                      Premises shall at all times be secure and complete  except
                      during the period of work.  Upon  completion of such work,
                      Tenant  shall  file for record in the office of the County
                      Recorder  for the County in which the  Shopping  Center is
                      located a Notice of Completion as required or permitted by
                      law.

                               (e)In   performing   the   work   of   any   such
                      Improvements, Tenant shall have the work performed in such
                      a manner as not to obstruct  the access to the premises of
                      any other tenant in the  Shopping  Center or to any of the
                      Common  Areas.  As a condition to granting its approval to
                      any of the  Improvements,  Landlord may require  Tenant to
                      provide Landlord with reasonably  satisfactory evidence of
                      Tenant's  financial  ability  to pay for the  costs of the
                      Improvements  and to complete the same as required by this
                      Lease.

                              (f)Any  Improvements made or constructed by Tenant
                      shall be deemed  fixtures and not trade fixtures and shall
                      not be removed  by Tenant but shall at once  become a part
                      of the Premises and be  surrendered  therewith;  provided,
                      however,  upon the expiration or sooner termination of the
                      Lease Term, Tenant shall, upon written demand by Landlord,
                      at Tenant's sole cost and expense,  forthwith and with all
                      due diligence,  remove any Improvements made by Tenant and
                      designated  by Landlord to be  removed,  and Tenant  shall
                      forthwith  and with all due  diligence,  at Tenant's  sole
                      cost and expense, repair any damage to the Premises caused
                      by such  removal.  In the  event  Landlord  elects  not to
                      require  that any such  Improvements  be removed  from the
                      Premises,  such  election  shall be  based  on  Landlord's
                      determination   that   the   cost  of   removal   of  such
                      Improvements  and the  potential  damage  to the  Premises
                      exceeds the value of the Improvements. Tenant acknowledges
                      that the  Improvements  made by  tenant  are for  Tenant's
                      benefit,  have no value to  Landlord,  and do not increase
                      the  value  of the  Premises  or the  Shopping  Center  to
                      Landlord.

         11.2 Delivery of Permits and Contracts. At least ten (10) days prior to
the commencement of any Improvement  requiring Landlord's approval under Section
11.1  above,  Tenant  shall  furnish to  Landlord  (i) a  certified  copy of all
necessary  permits  from all  applicable  governmental  authorities;  and (ii) a
certified  copy  of  all  applicable  contractors  agreements,  satisfactory  to
Landlord.

         11.3         Tenant's Insurance of Improvements.  In the event that
Tenant shall make any Improvements to the Premises, Tenant agrees to
carry such insurance required by Article X covering any such

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<PAGE>
such Improvements  shall be insured by Landlord under the insurance it may carry
upon the  building  of which the  Premises  are a part,  nor shall  Landlord  be
required under any provisions for reconstruction of the Premises to reinstall or
repair damages to any such Improvements.


                                   ARTICLE XII

                                MECHANIC'S LIENS

         12.1 Free of Liens. Tenant agrees that it will pay all costs for labor,
services and/or materials supplied in the prosecution of any work done or caused
to be done by Tenant on the Premises,  and Tenant will keep the Premises and the
Shopping  Center  free and clear of all  mechanic's  liens  and  other  liens on
account of work done or alleged to have been done for Tenant or persons claiming
under  Tenant.  Tenant agrees to and shall  indemnify,  defend and save Landlord
free and harmless against any and all claims, demands,  liability, loss, damage,
costs,  attorneys'  fees and all other  expenses on account of claims of lien of
contractors,  laborers or material  suppliers  or others for work  performed  or
materials  or  supplies  furnished  for or  alleged  to have been  performed  or
furnished  for  Tenant  or  persons  claiming  under  Tenant,  whether  liens of
attachment,  judgment or otherwise  (collectively,  "Liens").  Tenant shall keep
Tenant's  leasehold interest and any of those improvements to the Premises which
are or become the property of Landlord  pursuant to this Lease free and clear of
all Liens.  Tenant's  failure to remove the effect of any Lien from the Premises
and the Shopping  Center within ten (10) days following  written demand therefor
by Landlord  shall  constitute a material  noncurable  default  under this Lease
entitling  Landlord to terminate  this Lease at Landlord's  option and to assert
all remedies provided in Article XXII below.

         12.2  Contest of Liens.  If Tenant  shall  desire to contest  any Lien,
within ten (10) days  following the filing of such Lien Tenant shall release the
property  from  said  Lien of record by  providing  the bond  then  required  by
California law for such release of that Lien. If a final  judgment  establishing
the  validity or  existence  of a Lien for any amount is entered,  Tenant  shall
immediately pay and satisfy same.

         12.3  Landlord's  Right to Pay. If Tenant  shall fail to pay any charge
for which a Lien and/or suit to  foreclose  the Lien have been filed,  and shall
not have  obtained  the release of said Lien from the  property  subject to such
Lien, in either case,  within ten (10) days following the filing  thereof,  then
Landlord,  in  addition to any other  rights or  remedies it may have,  may (but
shall not be obligated  to),  discharge  said Lien by (a) paying the claimant an
amount  sufficient to settle and  discharge the Lien and all claims  thereunder;
(b)  posting a  mechanics'  lien  release  bond;  or (c) taking  such  action as
Landlord  shall  deem  appropriate.  In any  such  event,  Tenant  shall  pay as
Additional Rent, on Landlord's demand, all costs (including  attorneys' fees and
costs)  actually  incurred by Landlord in settling  and  discharging  said Lien,
together with interest at the lesser of eighteen  percent (18%) per annum or the
maximum rate  permitted by law from the date of Landlord's  payment until repaid
by  Tenant.  Landlord's  payment of said  costs  shall not waive any  default of
Tenant under this Article XII, including without  limitation,  Landlord's right,
under  Section  12.1  above,  to  treat  the  failure  to  remove  the Lien as a
non-curable default under this Lease.

         12.4 Notice of Lien.  Should any Lien be filed  against the Premises or
any action  affecting  the title to such  property be  commenced,  Tenant,  upon
receiving  notice of such Lien or action shall  forthwith give Landlord  written
notice thereof.


FS2\267\064120003 I  154990.5 n08107195                  -22-

<PAGE>
          12.5   Advance   Notice  for   Nonresponsibility.   Landlord   or  its
representatives  shall have the right to go upon and inspect the Premises at all
reasonable  times and shall have the right to post and maintain  thereon notices
of  non-responsibility,  or such other  notices  which  Landlord  may deem to be
proper for the  protection of the interests of Landlord and any ground lessor in
the Premises.  Tenant  shall,  before the  commencement  of any work which might
result in any Lien, give to Landlord written notice of its intention to do so in
sufficient  time,  and in any  event at least  twenty-five  (25)  days  prior to
commencing  any such  work,  to enable  the  posting  and/or  recording  of such
notices.


                                  ARTICLE XIII

                                ADVERTISING MEDIA

         13.1 Approval of Tenant's  Signage.  Tenant shall, at Tenant's cost and
expense,  design,  construct and install  Tenant's signs in accordance  with the
sign criteria  attached  hereto as Exhibit "E" ("Sign  Criteria").  Tenant shall
submit  scale  drawings of Tenant's  sign to Landlord  for its written  approval
prior to the  construction  or  installation  of the sign.  Such  sign  shall be
installed  prior  to the  opening  of the  Premises  for  business,  or as  soon
thereafter as is reasonably  possible.  Any sign not  constructed  in compliance
with the Sign Criteria or not in accordance  with the plan approved by Landlord,
shall be  immediately  removed by Tenant and if not removed by Tenant within ten
(10) days of written  notice from  Landlord to Tenant,  then Landlord may remove
and  destroy  said sign  without  Tenant's  approval  and without  liability  or
obligation  to Tenant.  Any such sign so removed under this Section or otherwise
shall be promptly replaced by Tenant with a sign complying with the requirements
of this Lease.

         13.2 Signage Location.  Tenant shall not place,  affix or maintain upon
the glass panes and  supports  of the show  windows or within  twenty-four  (24)
inches of the lease line, or on any windows,  doors or the exterior walls of the
Premises,  any  signs,  advertising  placards,   names,  insignia,   trademarks,
descriptive  material  or any  other  such  like  item or  items  without  first
obtaining  the  written  approval  of  Landlord  as to the  size,  type,  color,
location,  copy,  nature  and  display  qualities,   such  approval  not  to  be
unreasonably  withheld.  Anything to the contrary in this Lease notwithstanding,
Tenant shall not affix any sign to the roof of the Premises. Notwithstanding the
foregoing, Tenant shall have the right to use the glass portions of the Premises
to advertise its business,  provided that any such advertising is professionally
prepared,  covers  no more than  fifty  percent  (50%) of the glass  area of the
Premises and shall remain no longer than thirty (30) days without  being changed
or removed.

         13.3 Restrictions on Signage  Handbills and Other Advertising  Devices.
All  signs,  banners,  handbills  and  other  advertising  materials  posted  or
otherwise  utilized  within the Premises  shall be  professionally  prepared and
printed  and of  business-like  quality,  shall not be  handwritten  or manually
printed and shall  comply with any other  limitations  contained  in this Lease,
including without limitation,  Landlord's Sign Criteria. No such signs, banners,
handbills or other advertising  materials shall be used or posted outside of the
Premises  excepting  the  signage  permitted  by  Landlord  in  accordance  with
Landlord's  Sign  Criteria.  No  advertising  medium shall be utilized by Tenant
which  can be heard or  experienced  outside  the  Premises,  including  without
limitation, flashing lights, searchlights,  loudspeakers, phonographs, radios or
television.  'Tenant shall not display, paint or place or cause to be displayed,
painted or placed, any handbills,  bumper stickers or other advertising  devices
on any vehicle parked in the parking area of the Project,  whether  belonging to
Tenant, or to Tenant's agent, or to any other person;


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<PAGE>
nor shall Tenant  distribute,  or cause to be distributed,  in the Project,  any
handbills or other advertising devices.

         13.4 Signage in Food Courts.  Tenants located within any portion of the
Shopping Center  designated as "Food Court" or "FC" on the attached  Exhibit "B"
shall not affix or  maintain  any signs,  advertising  placards,  menu boards or
other advertising  material of any kind within the Premises or within any common
seating areas adjacent to the Premises, unless Landlord grants its prior written
consent to all such signs or advertising  material,  in accordance with the Sign
Criteria.


                                   ARTICLE XIV

                         FIXTURES AND PERSONAL PROPERTY

         14.1  Rights  to  Fixtures  and  Personal  Property.  Tenant  agrees to
fixturize the Premises in a manner comparable to retail stores of similar nature
in the Southern  California area and in accordance with plans and specifications
for such work approved by Landlord.  All Tenant's  Personal Property (as defined
below)  installed  in or  attached  to the  Premises  by  Tenant  must be new or
like-new  when  so  installed  or  attached.  Any  trade  fixtures,   furniture,
furnishings,  signs and other  personal  property  of Tenant not  affixed to the
Premises  ("Tenant's  Personal  Property")  shall remain the property of Tenant.
Landlord  agrees that Tenant may,  provided  Tenant is not in default  under the
terms of this Lease,  remove or replace  during the Lease Term, at Tenant's sole
cost and expense,  any of Tenant's Personal Property which it may have stored or
installed in or on the  Premises,  provided  that Tenant shall not remove any of
Tenant's  Personal Property if such removal would render the Premises in any way
unsuitable for  conducting  the type of business  specified in subsection (i) of
Article I above, unless Tenant's Personal Property is immediately  replaced with
similar Tenant's Personal Property of comparable or better quality.  However, in
the event Tenant is in default  under this Lease,  after the  expiration  of any
applicable cure periods,  Tenant may not remove any Tenant's  Personal  Property
from the Premises and all such Tenant's  Personal  Property shall, at Landlord's
election,  belong to Landlord. Tenant shall, at its expense, upon the expiration
or earlier  termination  of this Lease,  if not then in  default,  or if then in
default,  upon  Landlord's  request to do so,  remove all of  Tenant's  Personal
Property not affixed to the Premises,  immediately  repair any damage occasioned
to the Premises by reason of the removal of any such Tenant's Personal Property,
and upon the last day of the Lease  Term or the date of earlier  termination  of
this Lease,  shall  leave the  Premises  in a neat and clean  condition  free of
debris and in good order and repair. All Tenant's Personal Property remaining on
the  Premises  after  expiration  or other  termination  of the Lease Term shall
belong to  Landlord.  Landlord  shall  have the right to  retain or  dispose  of
Tenant's Personal Property as Landlord deems best and to recover from Tenant all
costs of removing,  storing,  and disposing of Tenant's  Personal  Property plus
interest  thereon  at the  lesser  of  eighteen  percent  (l8%) per annum or the
maximum rate allowed by law.  Landlord shall have no liability to Tenant for any
retention or disposal of such Tenant's Personal Property following expiration or
other  termination  of the Lease Term nor shall Tenant be entitled to any offset
or reduction in liability to Landlord by reason thereof.

         14.2  Landlord's  Property All  improvements to the Premises by Tenant,
including but not limited to mechanical systems, light fixtures, floor coverings
and partitions and other items comprising  Tenant's Work pursuant to Exhibit "C"
but excluding  Tenant's  Personal  Property not affixed to the  Premises,  shall
become the property of Landlord upon  installation and shall remain as a part of
the Premises and remain thereon following expiration or earlier


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<PAGE>
termination of this Lease, subject,  however, to Landlord's right to require the
removal of the same under Section 11.1 above.

          14.3 Taxes.  Fees.  Assessments  and Damages.  Tenant shall pay before
delinquency,  all taxes  (including sales and use taxes),  assessments,  license
fees and public charges levied, assessed or imposed upon its business operation,
as well as upon its trade fixtures,  leasehold improvements (including,  but not
limited to, those Tenant is required to make in accordance  with the  provisions
of Exhibit "C" hereof),  merchandise and other Tenant's Personal Property in, on
or upon the Premises.  whenever  possible  Tenant shall cause Tenant's  Personal
Property  and  Tenant's  leasehold  improvements  and other such  property to be
assessed and billed  separately  from the balance of the Premises.  In the event
any such items of property are assessed with the balance of the Premises,  then,
and in such event,  such assessment shall be equitably  divided between Landlord
and Tenant to the end that Tenant  shall pay only its  equitable  proportion  of
such  assessment.  Landlord  shall  determine  the basis of  prorating  any such
assessments  and such  determination  shall be binding  upon both  Landlord  and
Tenant.  Tenant shall pay its share of any such assessment  within ten (10) days
after  receipt from Landlord of a written  statement  computing  Tenant's  share
thereof.


                                   ARTICLE Xv

                            ASSIGNING AND SUBLETTING

          15.1 Restrictions on Transfer. Tenant acknowledges and agrees that the
Shopping Center consists of an interdependent  group of retail  ~enterprises and
that the realization of the benefits of this Lease, both to Landlord and Tenant,
is dependent upon Tenant's  creating and maintaining a successful and profitable
retail  operation in the  Premises.  Landlord and Tenant  further agree that the
'tenant  mix" of the  Shopping  Center is also vital to the  realization  of the
benefits of this Lease,  both to Landlord and Tenant.  For these reasons,  among
others,  Tenant shall not,  either  voluntarily or by operation of law except as
provided in Article XXI below,  assign,  sell,  encumber,  hypothecate,  pledge,
lien, franchise,  license, grant concessions in or otherwise transfer all or any
part of  Tenant's  leasehold  estate  hereunder,  or permit the  Premises  to be
occupied  by anyone  other than Tenant or Tenant's  employees  (collectively  an
"Assignment") , without Landlord's written consent, which consent shall be given
or withheld as provided in Sections 15.2, 15.3 and 15.4. Tenant shall not sublet
the Premises,  or any portion thereof, and Tenant is absolutely  prohibited from
subletting  the Premises or any portion  thereof as authorized  and permitted by
California  Civil Code  Section  1995.230.  Consent by  Landlord  to one or more
Assignments of the Premises shall not operate to exhaust Landlord's rights under
this Article XV. The  voluntary or other  surrender of this Lease by Tenant or a
mutual  cancellation  hereof shall not work a merger and shall, at the option of
Landlord,  terminate  all or any  existing  subleases or  subtenancies  or shall
operate as an assignment to Landlord of such subleases or subtenancies.  Failure
to first  obtain in writing  Landlord's  consent  or failure to comply  with the
provisions of this Article XV shall operate to prevent any such  Assignment from
becoming effective and shall constitute a material default under this Lease.

          Affiliate Transfers.  Notwithstanding  Section 15.1 or anything to the
contrary  contained  herein,  Tenant  shall have the right,  without  Landlord's
consent,  to assign this Lease for the then  remaining term of this Lease to (a)
any  corporation  which  owns one  hundred  percent  (100%)  of  Tenant's  stock
(Tenant's parent);  (b) any corporation in which Tenant owns one hundred percent
(100%)  of the  stock  thereof  (Tenant's  subsidiary);  (c) any  company  which
directly or indirectly has a controlling interest in Tenant which is at


Ps2\267\%412~oo3l\2I5499o.~ a08107195                    -25-

<PAGE>
least a fifty-one  percent  (51%)  interest or in which Tenant has a controlling
interest which is at least a fifty-one percent (51%) interest; (d) a corporation
which  succeeds  to the assets or  business  of Tenant or  Tenant's  parent as a
result of merger or  consolidation;  (e) a corporation or other business  entity
acquiring all or substantially all of Tenant's assets or capital stock; provided
that in each such  instance (i) Tenant shall not be in default  under this Lease
at the time of said transfer; (ii) no change in use of the Premises shall result
by reason of such  transfer;  (iii) Tenant  shall give  Landlord at least thirty
(30) days'  prior  written  notice of said  transfer;  (iv) the  assignee  shall
furnish  Landlord  at least  thirty  (30) days  prior to the  transfer a written
instrument reasonably  satisfactory to Landlord by which such assignee agrees to
assume and perform all  covenants  and  conditions  of Tenant  contained in this
Lease;  and (v) in the event of an assignment  to a parent or subsidiary  and in
the event of an assignment to a company  acquiring all or  substantially  all of
the assets or capital  stock of Tenant,  the  assignee  has a net worth (in 1995
dollars)  equal to or  greater  than the net worth of Tenant at the time  Tenant
entered into this Lease.  No such assignment or other transfer shall release the
original Tenant or any assignee thereof from liability under this Lease,  except
in the event of  merger  or  consolidation  where  Tenant  is not the  surviving
entity.

          15.2 Notice of  Proposed  Transfer.  If Tenant  desires at any time to
assign this Lease and Tenant is not in default in any covenant or  obligation to
be observed or performed  by Tenant  under the Lease,  Tenant shall first notify
Landlord of its desire to do so and shall submit in writing to Landlord,  all in
such  reasonable  detail as Landlord may  request,  (a) the name of the proposed
assignee; (b) the nature of the proposed assignee's business to be carried on in
the Premises; (c) the proposed agreement of assignment and all of the contracts,
instruments  and  agreements  relating  to the  proposed  assignment;  (d)  such
financial and other information as Landlord may request  concerning the proposed
assignee,  including without  limitation,  current per square foot sales figures
and  advertising  budgets  for  the  proposed  assignee's   comparable  business
operations from other locations and other merchandising  information as Landlord
may request;  (e) a resume of the proposed assignee and its operators sufficient
to demonstrate suitable experience on the part of the assignee and its operators
in the same  business as that  specified  in Article I,  subsection  (i) of this
Lease; (f) current audited  financial  statements for the transferee;  and (g) a
statement that Tenant intends to consummate the transaction if Landlord consents
thereto.

          15.3  Landlord's  Response.  At any time within thirty (30) days after
Landlord's receipt of the information  specified in Section 15.2 above, Landlord
may, in Landlord's  sole and absolute  discretion,  by written  notice to Tenant
elect to (a)  consent  to the  Assignment  upon the  terms  and to the  assignee
proposed;  (b) refuse to give its consent;  (c) take an  assignment  of Tenant's
leasehold  estate hereunder upon the same terms (excluding terms relating to the
use of Tenant's name, the  continuation  or manner of  continuation  of Tenant's
business or other business within the Premises and the sale of Tenant's Personal
Property and trade  fixtures and no such  assignment  by Landlord  once effected
shall be subject to the  provisions  of this Article XV) as those offered to the
proposed  assignee,  as the case  may be;  or (d)  terminate  this  Lease,  such
termination to be effective as of the date such proposed  Assignment  would have
become  effective,  but not more than sixty (60) days nor less than  thirty (30)
days  following  Landlord's  receipt  of  such  information,  in  its  entirety.
Landlord's election of either alternative Cc) or (d) above shall be binding upon
Tenant and shall not be  affected  by  Tenant's  withdrawal  of its  request for
Landlord's  approval of the subject  Assignment  following  Tenant's  receipt of
notice of such election.  In the event this Lease is terminated pursuant to this
Section 15.3, the rents and other charges  payable  hereunder  shall be prorated
and paid to and from


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<PAGE>
the date of such  termination.  No action or  inaction  by  Landlord  under this
Section 15.3 shall entitle  Tenant to recover  damages from  Landlord,  it being
understood  and agreed that  Tenant's  sole remedy,  in such event,  shall be an
action for declaratory relief or to require that Landlord  specifically  perform
its obligations under this Lease.

          15.4  Standards for  Landlord's  Approval.  If Landlord does not elect
alternative  15.3(c) or 15.3(d) above following  Tenant's  request that Landlord
consent to an  Assignment,  Landlord's  consent to any such proposed  Assignment
shall  be  subject  to  satisfaction  of each of the  following  conditions,  in
accordance  with  Section  1995.250(b)  of the  California  Civil Code:  (a) the
proposed  assignee's general financial  condition,  including  liquidity and net
worth,  verified by audited financial  statements prepared by a Certified Public
Accountant in conformity with generally accepted accounting  principles is equal
to or greater than One Million Dollars  ($1,000,000.00)  (in 1995 dollars);  (b)
the proposed  assignee has a demonstrated  merchandising  capability  reasonably
acceptable  to Landlord;  (c) the proposed  assignee is morally and  financially
responsible;  (d) the proposed  assignee or any affiliate thereof shall not have
been or presently be in default under any lease or other agreement with Landlord
or any of  Landlord's  affiliates;  (e) the proposed  assignee or any  affiliate
thereof or any management or supervisorial  employee of the proposed assignee or
any  affiliate of the  proposed  assignee  shall not have been  convicted of any
felony, had any license or permit relating to its operation of business revoked,
had  prior   bankruptcy  or  similar   reorganization   filings,   voluntary  or
involuntary,   had  any  of  its  properties   foreclosed  upon,  judicially  or
nonjudicially  or been  found  liable  for any  fraud or other  causes of action
involving moral turpitude in any civil proceedings;  (f) in Landlord's judgment,
the proposed  assignee  will generate at least the same amount of Gross Sales as
could reasonably be projected from Tenant's past Gross Sales, to be generated by
the Tenant during each remaining  Lease Year throughout the balance of the Lease
Term;  (g) Tenant is not in default in the payment of any sums or performance of
any  obligations  required of Tenant  under this Lease;  (h) if the use is other
than that permitted in Article I, subsection (i) above, then such use is subject
to the  following  limitations:  (1) the use may not  violate any  exclusive  or
restrictive  agreement  granted to any other tenant in the Shopping Center;  (2)
the  use  may  not  involve  the  sale  of  food  or  beverage  items  for on or
off-premises  consumption;  (3) may not be a restaurant or financial institution
or a home  improvement  store  or for  the  sale,  repair  and/or  servicing  of
automobiles  or for the  sale of  toxic  materials,  such  as  paints,  cleaning
supplies  and/or  automotive  fuel or for any office use,  other than office use
incidental to the conduct of another permitted retail business; (4) the Premises
may  not be used  for  any use or  purpose  that  is not  customarily  found  in
first-class  neighborhood centers in the Southern California area or for any use
or purpose  other than the retail  sale of goods  and/or  services to the public
(and for office or storage ancillary  thereto) ; or (5) for a use, in Landlord's
reasonable  discretion,  that would cause  detrimental  competition with another
tenant in the Shopping  Center or would  materially  alter the tenant mix in the
Shopping  Center;  (~)  the  proposed  assignee  shall  assume  in  writing  the
obligations of Tenant under this Lease in form satisfactory to Landlord; and (j)
the conditions in Sections 15.5, 15.6 and 15.7 shall be satisfied. If any of the
foregoing  conditions are not satisfied,  Landlord may, in its sole and absolute
discretion,  refuse to consent  to any such  Assignment  or may  consent to such
proposed Assignment. If Landlord consents to such Assignment, Tenant may, within
thirty  (30)  days  after the date of  Landlord's  consent,  enter  into a valid
assignment  of the  Premises or portion  thereof  upon the terms and  conditions
described  in the  information  required to be  furnished  by Tenant to Landlord
pursuant  to Section  15.2  above,  or upon other  terms not more  favorable  to
Tenant; provided, however, that any material change in


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<PAGE>
such terms shall be subject to  Landlord's  consent as provided in this  Article
XV.

          15.5 Tenant Not Released:  Documentation  Fee. No Assignment,  whether
with or without Landlord's  consent,  shall relieve Tenant or any guarantor from
its covenants and  obligations  under this Lease and under any guaranty  hereof.
Tenant  agrees to  reimburse  Landlord  for the  direct  and  indirect  expenses
incurred by Landlord in conjunction with the processing and documentation of any
such requested Assignment,  including without limitation,  Landlord's attorneys'
fees and costs, such reimbursement to be made within the earlier of (i) ten (10)
days following  Landlord's  written demand therefor;  or (ii)  concurrently with
Landlord's   execution  of  any  documentation   pertaining  to  such  requested
Assignment.

          15.6 Documentation of Transfer. Each such Assignment to which Landlord
has consented  shall be evidenced by an  instrument in Landlord's  standard form
executed by Tenant and by the transferor,  assignor,  licensor,  concessionaire,
hypothecator or mortgagor and the  transferee,  assignee,  sublessee,  licensee,
concessionaire  or  mortgagee  in each  instance,  as the case  may be.  One (1)
executed copy of such written instrument shall be delivered to Landlord.

          15.7  Adjustment  to Minimum  Annual  Rent.  In the event Tenant shall
assign its  interest in this Lease  (other than to  Landlord),  then the Minimum
Annual Rent then payable pursuant to Sections 5.1 shall be increased,  effective
as of the  date of such  Assignment,  to an  amount  equal  to the  total of the
Minimum  Annual  Rent,  plus  Percentage  Rent,  required  to be paid by  Tenant
pursuant to this Lease during the twelve (12) month period immediately preceding
such Assignment.  In addition to the foregoing,  Tenant agrees that in the event
Tenant  shall  assign its  interest  in this Lease or sublet  the  Premises,  in
accordance  with the several  provisions of this Article XV, Tenant shall pay to
Landlord any and all  consideration  received by Tenant for such Assignment,  to
the extent that such  consideration  exceeds the  unamortized  value of Tenant's
leasehold  improvements (but only to the extent said leasehold improvements were
paid for by Tenant as evidenced by appropriate documentation),  depreciated on a
straight-line  basis over the portion of the Lease Term remaining  following the
completion of such  leasehold  improvements  plus the direct out of pocket costs
incurred by Tenant in making such Assignment.


                                   ARTICLE XVI

                          TENANT'S CONDUCT OF BUSINESS

          16.1 Continuous  Operation..  Tenant acknowledges that the realization
of the benefits of this Lease,  both to Landlord and Tenant,  is dependent  upon
Tenant's  maintaining  a  successful  and  profitable  retail  operation  in the
Premises  and that  Tenant's  failure  to  continuously  operate  its  permitted
business  from the  Premises  may or will have  adverse  effects on the  overall
operation  of the  Shopping  Center,  and other  businesses  within the Shopping
Center as well as on the  benefits to be realized  under this Lease in ways that
may be difficult to ascertain  or quantify in monetary  damages.  Tenant  agrees
that Landlord shall be entitled to injunctive relief in the event of a violation
of this Section 16.1 or Section  16.2 below,  in addition to any other  remedies
provided by law and/or under this Lease.  Subject to the  provisions  of Section
16.6 below,  Tenant covenants and agrees that,  continuously and uninterruptedly
from and after its initial  opening for business and  throughout the Lease Term,
it will  operate  and  conduct  within the  Premises  the  business  which it is
permitted to operate and conduct under the  provisions of Article I,  subsection
(i) during  all hours  required  under  Section  16.2  below,  except  while the
Premises are untenantable by reason of fire or other casualty,  and that it will
at all times keep and maintain within and upon the


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<PAGE>
Premises  an adequate  stock of  merchandise  and trade  fixtures to service and
supply the usual and ordinary demands and requirements of its customers and that
it will keep its Premises in a neat, clean and orderly condition.

          16.2 Hours of  Operation.  Recognizing  that it is in the interests of
both Tenant and  Landlord  to have  regulated  hours of business  for all of the
Shopping  Center,  but subject to the  provisions of Section 16.6 below,  Tenant
agrees that  commencing  with the opening for business by Tenant in the Premises
and for the remainder of the Lease Term, Tenant shall be open for business daily
from 10:00 A.M. to 9:00 P.M.,  Monday  through  Friday,  10:00 A.M. to 6:00 P.M.
Saturday,  12:00 noon to 5:00 P.M. Sunday, and shall, in addition,  continuously
so remain  open for  business  during  all  hours on all days that the  Shopping
Center is open for  business  to the public as  determined  in  Landlord's  sole
discretion.  Tenant further agrees to have its window  displays,  exterior signs
and exterior  advertising  displays adequately  illuminated  continuously during
such  hours as the  Shopping  Center  is open for  business  to the  public,  as
determined by Landlord.  It is agreed,  however,  that the foregoing  provisions
shall  be  subject,   as  respects  any  business   controlled  by  governmental
regulations or labor union contracts in its hours of operation,  to the hours of
operation  so  prescribed  by  such  governmental  regulations  or  labor  union
contracts, as the case may be.

          16.3  Additional  Charge.  If Tenant fails to take possession of or to
open or to reopen the Premises for business, fully fixtured, stocked and staffed
within the times herein provided, or to carry on business at all times specified
in Sections 16.1 and 16.2 during the Lease Term, duly and strictly in accordance
with the terms, covenants and conditions contained in this Lease, Landlord shall
be entitled (a) to collect (in addition to the Minimum  Annual Rent,  Percentage
Rent and  Additional  Rent) an additional  charge at the daily rate of Ten Cents
($0.10) per square foot of the Floor Area of the Premises or One Hundred Dollars
($100.00),  whichever  is  greater,  for each and every day or  partial  day the
Tenant fails to commence to do or to carry on business as herein provided,  such
additional  charge is a liquidated sum  representing  the minimum  damages which
Landlord is deemed to have suffered, including damages as a result of Landlord's
failure  to receive  Percentage  Rent,  if any,  under this Lease and is without
prejudice to Landlord's  right to claim and prove a greater sum of damages;  and
(b) to avail itself of any other  remedies for such breach by Tenant  hereunder,
including  obtaining an  injunction  or an order for specific  performance  in a
court of competent  jurisdiction  to restrain  Tenant from  continuing  any such
breach and to compel Tenant to comply with such obligations under this Lease, as
the case may be,  including a mandatory  injunction  to compel Tenant to open or
reopen the whole of the  Premises  for  business to the public  fully  fixtured,
stocked and  staffed,  and Tenant  hereby  consents to Landlord  obtaining  such
injunction,  order or mandatory  injunction  upon  establishing  by affidavit or
other  evidence  that Tenant has  breached or Landlord has  reasonable  cause to
believe  Tenant is about to commit any such  breach;  and (c) if Tenant fails to
open the Premises for business  within fifteen (15) days after the  Commencement
Date, to terminate  this Lease  without the necessity for any legal  proceedings
and without prejudice to any other rights or remedies of Landlord.

     16.4 Opening of Mall. Landlord shall not be obligated to open any mall from
time to time within the  Shopping  Center so that  Tenant may  conduct  business
except on those  days and hours  when (a) any two (2) of the  "Major  Department
Stores" in the Shopping  Center shall be open for business or (b) at least fifty
percent  (50%) of the number of tenants in the Shopping  Center  fronting on any
such mall give reasonable advance notice to Landlord that they desire to be open
for business. The term "Major Department Store" shall mean


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<PAGE>
any retail store containing fifty thousand (50,000) square feet of Floor Area or
more.

          16.5  Operation  of New  Locations.  Tenant  agrees  that it will  not
directly  or  indirectly,  operate nor own any  interest in any similar  type of
business (not so operated or owned on the date of this Lease) within a radius of
five (5) miles from the location of the Premises.  Without  limiting  Landlord's
remedies, in the event Tenant should violate this covenant, Landlord may, at its
option and for so long as Tenant is  operating  or has an interest in said other
business, include the Gross Sales of such other business in the Gross Sales made
from  the  Premises  for the  purpose  of  computing  the  Percentage  Rent  due
hereunder.  Tenant  acknowledges  that the  operation of a similar type business
will adversely  affect Gross Sales and the growth of Gross Sales of the business
conducted on the Premises and thereby  adversely affect  Percentage Rent payable
hereunder as well as the number of potential customers attracted to the Shopping
Center.

          16.6 Cessation of Business.  Notwithstanding  anything to the contrary
contained in this  Article XVI or elsewhere in the Lease,  at any time after the
end of the  second  (2nd)  Lease  Year,  Tenant  shall  have the  right to cease
operating its business in the Premises.  If Tenant ceases operating for a period
of thirty (30) consecutive days, then Landlord shall have the right to terminate
the Lease upon  thirty (30) days'  written  notice to Tenant,  whereupon  Tenant
shall  vacate the Premises in the manner  required  herein.  Should  Tenant give
written notice to Landlord  within ten (10) days after the receipt of Landlord's
termination  notice  indicating  Tenant's  intent to reopen its  business in the
Premises within thirty (30) days and Tenant  thereafter does reopen its business
fully  staffed,  stocked  and  fixturized  within  such  thirty (30) day period,
Landlord's termination notice shall be rescinded. Should Tenant thereafter cease
operating in the Premises for a period of thirty (30) consecutive days, Landlord
may elect to  terminate  the Lease in the  manner  set forth  herein.  If Tenant
elects to assign the Lease,  such  period(s)  of time during which Tenant is not
operating  the  Premises  as  permitted  hereunder,  shall be  disregarded  when
determining Tenant's Gross Sales pursuant to Section 15.4(f).


                                  ARTICLE XVII.

                             REPAIRS AND MAINTENANCE

          17.1 Tenant's Obligations.  Tenant agrees at all times, from and after
substantial  completion of Landlord's Work, if any, in the Premises, at Tenant's
sole cost and expense, to repair, maintain in good and tenantable condition, and
replace, as necessary,  the Premises and every part thereof (except that portion
of the Premises to be maintained by Landlord in Section 17.2), including without
limitation,   all  utility  meters,  pipes  and  conduits,   all  fixtures,  air
conditioning and heating  equipment serving the Premises (whether located inside
or outside of the Premises) and other equipment therein, including any equipment
installed by Tenant which is part of said system,  the store front, all Tenant's
signs, locks and closing devices, all window sashes,  casements or frames, doors
and door frames, floor coverings, including carpeting, terrazzo or other special
flooring, and all such items of repair, maintenance,  alteration and improvement
or  reconstruction  as may at any  time or from  time to time be  required  by a
governmental  agency having jurisdiction  thereof.  Tenant shall contract with a
service  company,  which  contract  and service  company is approved by Landlord
(such approval shall not unreasonably be withheld),  for the monthly maintenance
of the heating, ventilating and air conditioning equipment exclusively servicing
the  Premises.  A copy of the service  contract  shall be  furnished to Landlord
within ten (10) days after Tenant's opening for business, and a


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<PAGE>
copy of any subsequent contracts shall be furnished from time to time during the
Lease Term. Any such service contract shall be sufficient to maintain Landlord's
warranties  and/or  guarantees with respect to such equipment.  All glass,  both
exterior and interior, is at the sole risk of Tenant, and any glass broken shall
be promptly replaced by Tenant with glass of the same kind, size or quality.

          17.2 Landlord's  Obligations.  Subject to the foregoing  provisions of
this Article XVII and to Tenant's  obligation to reimburse Landlord for costs as
is  hereinafter   provided,   Landlord  shall  maintain  and  repair  (including
replacements when Landlord  determines in its sole and absolute  discretion that
same are necessary) the roof,  exterior walls,  structural parts of the Premises
and structural floor, pipes and conduits outside the Premises for the furnishing
to the Premises of various utilities (except to the extent that the same are the
obligations of public utility  company);  provided,  however that Landlord shall
not be required  to perform any  maintenance  nor make  repairs or  replacements
necessitated  by reason of the  negligence  of Tenant or anyone  claiming  under
Tenant,  or by  reason  of the  failure  of Tenant to  perform  or  observe  any
conditions  or  agreements in this Lease  contained,  or caused by  alterations,
additions,  or  improvements  made by Tenant or anyone claiming under Tenant and
all such  maintenance,  repairs  or  replacements  shall be made by  Tenant,  at
Tenant's sole cost and expense, or at Landlord's election,  made by Landlord and
paid for by Tenant upon demand, together with interest at the lesser of eighteen
percent  (18%) per annum or the  maximum  rate  allowed  by law from the date of
demand until  receipt of payment  thereof.  As used in this  Section,  "exterior
walls" shall not be deemed to include store fronts, plate glass, window cases or
window frames, doors or door frames,  security grills or similar enclosures.  It
is agreed that Landlord shall be under no obligation to perform any  maintenance
nor to make any repairs, alterations,  renewals, replacements or improvements to
and upon the  Premises  or the  mechanical  equipment  exclusively  serving  the
Premises at any time except as in this Lease expressly provided. Anything to the
contrary notwithstanding  contained in this Lease, Landlord shall not in any way
be liable to Tenant for failure to perform or properly  perform any  maintenance
or to make or properly make any repairs or replacements  as herein  specifically
required unless Tenant has previously  notified  Landlord in writing of the need
for such and  Landlord has failed to commence  and  complete  such  maintenance,
repairs or replacements  within a reasonable period of time following receipt of
Tenant's  written  notification,  provided  nothing  in the  foregoing  shall be
construed as imposing  any  obligation  on Landlord to perform any  maintenance,
repairs or replacements except as otherwise required to be performed by Landlord
pursuant to the terms of this Lease. In the event that Tenant shall have a claim
for consequential  damages caused by Landlord's failure,  when and to the extent
required pursuant to this Lease, to construct, maintain, or keep the Premises in
good  condition  or repair,  Tenant  shall  present  such claim to Landlord  and
Landlord  shall  submit such claim to  Landlord's  general  liability  insurance
company. Tenant shall be limited in any recovery of damages from Landlord solely
to the amount paid by Landlord's  general  liability  insurance  company on that
claim,  if any, and such recovery  shall be Tenant's sole remedy for that claim.
Tenant agrees to pay, as Additional Rent, Tenant's pro rata portion of all costs
incurred by Landlord pursuant to this Section 17.2 for the building within which
the  Premises  are  situated  based on the ratio that the Floor Area  within the
Premises bears to the total Floor Area of such building.  Any such payment shall
be due and payable to  Landlord,  as  Additional  Rent,  within ten (10) days of
Tenant's receipt of a request for such payment.

     17.3  Condition of Premises.  Tenant  hereby  agrees,  at its sole cost and
expense, to maintain the Premises in good repair and in an up-to-date  condition
throughout the Lease Term. In the event


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<PAGE>
Tenant  validly  exercises  its right to extend  the Lease  Term as set forth in
Section 4.2 above,  Tenant shall replace the floor and wall coverings,  lighting
fixtures  and  signage and repair or replace  any of  Tenant's  Work  previously
installed in the Premises  which is showing signs of wear or tear.  Tenant shall
conduct any such work in accordance  with the terms and conditions of Article XI
of the Lease and all  improvements  installed by Tenant shall be in  conformance
with Exhibits "C" and "E' to the Lease.

          17.4 Surrender of Premises. Upon any surrender of the Premises, Tenant
shall redeliver the Premises to Landlord in a clean and undamaged  condition and
with all  improvements  in the Premises in at least as good condition and repair
as when Tenant opened the Premises for business to the public.

          17.5  Inspection:  Right to Cure.  Tenant  agrees to  permit  Landlord
and/or its authorized  representatives to enter the Premises at all times during
usual  business  hours for the purpose of  inspecting  same.  Tenant agrees that
Landlord or any person  authorized by Landlord may go upon the Premises and make
any necessary repairs to the Premises and perform any work therein (a) which may
be necessary to comply with all laws,  ordinances,  rules or  regulations of any
public authority or of the Insurance  Service Offices or of any similar body; or
(b) that  Landlord  may deem  necessary  to prevent  waste or  deterioration  in
connection with the Premises if Tenant does not make or cause such repairs to be
made or performed or cause such work to be performed  promptly  after receipt of
written  demand from Landlord;  or (c) that is required to store,  remove and/or
dispose of all trash and rubbish  from the  Premises as required in Section 7.4,
if Tenant fails to perform such work promptly  after  receipt of written  demand
from Landlord;  or (d) that Landlord may deem  necessary to perform  remodeling,
construction  or other work  incidental  to any portion of the Shopping  Center,
including without limitation the premises of another tenant, adjacent to, above,
or below the Premises. Nothing contained in this Section shall imply any duty on
the part of  Landlord  to do any such work nor  constitute  a waiver of Tenant's
default in failing to do any such work that Tenant is  otherwise  required to do
under this Lease.  No exercise by Landlord of any rights herein  reserved  shall
entitle  Tenant to any damage or  compensation  for any injury or  inconvenience
occasioned  thereby nor to any abatement of rent. In the event Landlord makes or
causes any such repairs to be made or performed,  as provided for herein, Tenant
shall pay the cost thereof to Landlord, as Additional Rent promptly upon receipt
of a bill  therefor,  except for that work as  provided in  subclause  Cd) above
which will be at the sole cost and expense of  Landlord.  In the event  Landlord
performs any work as provided in  subclause  Cd) above,  Landlord  agrees to use
reasonable  efforts to minimize  impairment  of access to and  visibility of the
Premises.


                                  ARTICLE XVIII

                                 RECONSTRUCTION

          18.1 Partial  Insured  Casualty.  Tenant  shall give prompt  notice to
Landlord in case of any fire or other  damage to the Premises or the building of
which it is a part. If the Premises shall be partially  damaged by fire or other
casualty  required to be insured by Landlord pursuant to Section 10.6, then upon
Landlord's  receipt  of  the  insurance  proceeds,  Landlord  shall,  except  as
otherwise  provided in this Article XVIII  promptly  repair and restore the same
(exclusive of Tenant's leasehold improvements,  alterations or additions,  trade
fixtures,  signs or other  personal  property)  substantially  to the  condition
thereof  immediately prior to said damage or destruction,  limited,  however, to
the extent of the insurance proceeds actually received by Landlord& therefor.


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          18.2  Substantial and Uninsured  Casualties.  If (a) both the Premises
and the  improvements  constituting  the Shopping Center shall be damaged to the
extent of fifty percent (50%) or more of the cost of replacement thereof; or (b)
the Premises or the building of which the Premises are a part shall be destroyed
or damaged as a result of a risk not required to be insured by Landlord pursuant
to Section  10.6 hereof;  or (c) the Premises  shall be damaged to the extent of
twenty-five  percent (25%) or more of the cost of replacement thereof during the
last two (2) years of the Lease  Term;  or (d) the  buildings  constituting  the
Shopping Center shall be damaged to the extent of fifty percent (50%) or more of
the cost of replacement  thereof,  whether or not the Premises shall be damaged;
or (e) as a result of  damages to the  Shopping  Center the leases of any two or
more of the Major Department Stores are terminated;  then in any of such events,
Landlord may elect either to repair the damages as aforesaid,  or to cancel this
Lease by written notice of cancellation  given to Tenant within ninety (90) days
after the date of such  occurrence,  and  thereupon  this Lease  shall cease and
terminate twenty (20) days following Tenant's receipt of such notice, and Tenant
shall vacate and surrender the Premises to Landlord in accordance with the terms
of this Lease.  In  determining  the cost of  replacement of the Premises or any
building or  improvement,  the cost of  foundations  and  footings  shall not be
included,  except to the extent of the cost of repair  thereto  required by such
damage or destruction.

          18.3  Reconstruction.  In  the  event  of  any  reconstruction  of the
Premises  under  this  Article  XVIII,  said  reconstruction  shall be in strict
conformity  with the  provisions of Exhibit "C" and to the extent of the work as
therein set forth as "Landlord's Work" and "Tenant's Work". Notwithstanding that
all  reconstruction  work shall be performed by  Landlord's  contractor,  unless
Landlord shall otherwise agree in writing,  Landlord's obligation to reconstruct
the Premises shall be only to the extent of the work as described in "Landlord's
Work" in Exhibit "C" and if not so described  Landlord's  obligation shall be to
reconstruct  only to the  extent  of the  condition  of the  Premises  prior  to
commencement of Tenant's Work.  Tenant,  at its sole cost and expense,  shall be
responsible  for the repair and  restoration of all items set forth in "Tenant's
Work" in Exhibit "C" and the  replacement  of its signs,  stock in trade,  trade
fixtures,  furniture,  furnishings  and  equipment.  Tenant shall  commence such
installation of fixtures,  equipment and  merchandise  promptly upon delivery to
Tenant of  possession  of the  Premises  and  shall  diligently  prosecute  such
installation to completion.

          18.4 Termination.  Upon any termination of this Lease under any of the
provisions of this Article  XVIII,  the parties  shall be released  thereby from
obligations  to the  other  party  accruing  from and  after  the  surrender  of
possession of the Premises to Landlord,  except for Tenant's removal of Tenant's
Personal  Property as provided in Section 14.1 and for  Tenant's  removal of any
leasehold  improvements  under Section 11.1.  In the event of  termination,  all
proceeds from Tenant's fire and extended coverage  insurance under Article X and
covering  the items set forth in  "Tenant's  Work" in Exhibit  "C", and Tenant's
leasehold  improvements,  but excluding proceeds for Tenant's Personal Property,
shall be disbursed and paid to Landlord.

          18.5  Rent  Abatement.  In the  event of  repair,  reconstruction  and
restoration to the Premises by Landlord as provided in this Article  XVIII,  the
Minimum  Annual Rent  provided to be paid under Article V hereof shall be abated
proportionately  with  the  degree  to which  Tenant's  use of the  Premises  is
impaired  commencing  from the date of  destruction  and  continuing  during the
period of Landlord's  repair,  reconstruction  or  restoration  of the Premises.
Tenant shall  continue the operation of its business on the Premises  during any
such period to the extent reasonably  practicable from the standpoint of prudent
business management, and the obligation of


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<PAGE>
Tenant to pay Percentage Rent and Additional Rent shall remain in full force and
effect.  Tenant  shall not be  entitled  to any  compensation  or  damages  from
Landlord  for  loss of the use of the  whole or any  part of the  Premises,  the
building of which the Premises are a part, or Tenant's  personal property or any
inconvenience or annoyance occasioned by such damage, repair,  reconstruction or
restoration.

          18.6 Waiver.  Tenant hereby waives any statutory rights of termination
which may arise by reason of any partial or total  destruction  of the  Premises
which  Landlord  is  obligated  to  restore  or  may  restore  under  any of the
provisions of this Lease.


                                   ARTICLE XIX

                                  COMMON AREAS

          19.1 Definition of Common Areas. The term "Common Areas" refers to all
areas within the exterior boundaries of the Shopping Center and the Project from
time to time made  available  for the general  use,  convenience  and benefit of
Landlord and other persons entitled to occupy Floor Area in the Shopping Center,
including without  limitation,  automobile parking areas,  including any parking
structures,  driveways, open or enclosed malls, sidewalks,  walkways, landscaped
and planted areas.

          19.2 Tenant's License for Use. Tenant, its employees and invitees are,
except as otherwise provided in this Lease,  licensed to use the Common Areas in
common with other persons during the Lease Term. Landlord agrees to maintain and
operate, or cause to be maintained and operated (except as hereinafter  provided
with  reference to cost of  maintenance)  , the Common Areas for the benefit and
use of the customers  and patrons of Tenant,  and of other  tenants,  owners and
occupants  of the  land  constituting  the  Project  and  others  authorized  by
Landlord.  All Common Areas and facilities  which Tenant may be permitted to use
and occupy are to be used and  occupied  under a  revocable  license and if such
license is revoked or the location,  arrangement  or amount of such Common Areas
and/or facilities are diminished,  increased, or modified, Landlord shall not be
subject to any  liability by reason  thereof nor shall Tenant be entitled to any
compensation,  diminution or abatement of rent,  or injunctive  relief nor shall
such circumstances constitute any actual or constructive eviction.

          19.3 Common Area Expenses. Landlord shall keep or cause to be kept the
Common  Areas in  neat,  clean  and  orderly  condition,  properly  lighted  and
landscaped,  and shall  make any  replacements  necessary  and repair any damage
thereto, but all Common Area Expenses (as defined herein below) shall be charged
and  prorated in the manner  hereinafter  set forth.  It is agreed that the term
"Common  Area  Expenses"  as used herein  shall mean all sums  expended  for the
repair, maintenance and replacement of any equipment,  facilities and structures
of the Common Areas,  including without limitation,  all general maintenance and
repairs, replacement,  repaving,  resurfacing,  painting, restriping,  cleaning,
sweeping, trash removal and/or compaction and janitorial services;  maintenance,
repair and  replacement  of public  toilets,  music  program  equipment and loud
speakers, floors, walls, ceilings, roofs, skylights,  windows, sidewalks, curbs,
Shopping Center signs,  sprinkler  systems,  planting and  landscaping;  shuttle
transportation  services provided pursuant to Section 19.11 below;  lighting and
other utilities,  directional signs and other markers and bumpers;  maintenance,
repair and replacement of any fire protection systems,  lighting systems,  storm
drainage  systems and other  utility  systems;  personnel to implement  any such
services  including,  if Landlord deems necessary,  the cost of security guards;
all on-site costs and personnel  expenses in managing the Shopping Center;  real
and personal property taxes and assessments (including all items


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<PAGE>
included  within the  definition  of Taxes above) on the  improvements  and land
comprising the Common Areas and personal  property thereon or used in connection
therewith;  any  governmental  imposition or surcharge  imposed upon Landlord or
assessed  against  any  portion  of the  Common  Areas;  all costs  and  expense
pertaining  to any  security  alarm  system;  amortization  on  maintenance  and
operating  machinery and equipment (if owned) and rental paid for such machinery
and equipment (if rented); public liability and property damage insurance on the
Common Areas and fire and extended coverage and/or "All Risks"  insurance,  with
such endorsements and/or additional  coverages as Landlord may deem appropriate;
and repair,  maintenance  and  replacement  of covering  parking  structures and
rental  payments  for  said  parking  structures.   The  term  "replacement"  or
"replacements"  as used in this  Section 19.3 is subject to the  limitations  on
Common Area Expenses,  as  applicable,  described in Section  19.3(f) below.  In
addition,  the Common Area Expenses  shall include a sum payable to Landlord for
the  accounting,  bookkeeping  and  collection of the Common Area Expenses in an
amount  equal  to  fifteen  percent  (15%) of the  total  of the  aforementioned
expenses  (excluding  taxes and insurance) for each calendar year.  Landlord may
cause any or all of said services to be provided by an independent contractor or
contractors.  Anything to the contrary notwithstanding  contained herein (a) all
expenses in connection with the original  construction  and  installation of the
Common  Areas shall be at the sole cost and expense of the owners of the Project
and shall not in any event be charged to Tenant,  and (b) Landlord  shall not be
responsible  for any failure to operate and/or  maintain the Common Areas within
those portions of the Project not owned by Landlord,  to the extent the same are
to be operated  and/or  maintained by any owner or lessee with respect  thereto.
Notwithstanding  anything  contained  to the  contrary in this Lease,  all costs
associated with the  acquisition  and development of any subsequent  adjacent or
non-contiguous  Common Area shall be at the sole cost and  expense of  Landlord,
nor shall Common Area  Expenses  billed to Tenant  include any of the  following
items, notwithstanding anything contained to the contrary in this Lease:

     (a)Removal,  encapsulation  or other  treatment  of any  hazardous or toxic
substances including, but not limited to, asbestos and chlorofluorocarbons;

     (b)Imputed  rents and costs  incurred  to satisfy the  requirements  of any
other tenant;

     (c)Landlord's  mortgage  interest or ground rentals  (except ground rentals
for offsite parking which may be included in Common Area Expenses)

     (d)Advertising  and other costs associated with any Merchant's  Association
or Promotional Fund paid by Landlord;

     (e)The purchase price or cost of initial capital  improvements and interest
thereon  associated with surplus lands or surplus parking which Landlord retains
as future expansion areas;

     (f)If the costs  incurred  by Landlord in  replacing  capital  improvements
exceed Two Hundred  Thousand  Dollars  ($200,000.00)  in any calendar year, such
costs shall be  amortized  over the useful life of such  improvements  using the
rate of interest paid by Landlord on any  commercially  reasonable  loan used to
fund such replacement,  or if a loan is not obtained, the prime rate then quoted
by a national banking association  selected by Landlord,  plus two percent (2%),
and in no event  shall such  capital  improvements  include  the  initial  costs
incurred in  connection  with the  enclosure of the mall or the initial costs of
any new improvements such as additional  buildings or parking structures for the
Project;


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<PAGE>
     (g)Leasing costs of any type, be it procuring  tenants or releasing as well
as retaining existing tenants;

     (h)Overhead  and profit paid to  subsidiaries or affiliates of the Landlord
for management services or materials to the extent that the costs of those items
would  not have  been paid had the  services  and  materials  been  provided  by
unaffiliated parties on a competitive basis;

     (i)Management  fees and salaries  paid to  personnel  above the position of
Shopping Center Property  Manager (e.g.,  salaries paid to Landlord's  executive
and corporate officers);

     (j)Costs  attributable to enforcing  leases against tenants in the Shopping
Center,  such as attorney's  fees,  court costs,  adverse  judgments and similar
expenses;

     (k)Depreciation  and amortization of debt,  except as provided in subclause
(if) above; and

     (1)Repairs  and other work  occasioned by fire, or other  casualty that the
Landlord is  reimbursed  by insurance  that was required to be carried under the
Lease.

          19.4 Payment of Common Area Expenses.  The  contributions,  if any, of
any tenant  occupying more than thirteen  thousand  (13,000) square feet ('Major
Store") toward the Common Area Expenses shall be credited  toward payment of the
entirety of the Common Area Expenses and the balance of the Common Area Expenses
shall be prorated in the following manner:

                               (a)From  and  after  the  Commencement  Date  and
                      during the Lease Term,  Tenant shall pay to  Landlord,  as
                      Additional  Rent, on the first day of each calendar month,
                      an amount  estimated  by Landlord to be Tenant's  share of
                      the Common Area Expenses.  The foregoing estimated monthly
                      charge  may be  adjusted  by  Landlord  at the  end of any
                      calendar quarter on the basis of Landlord's experience and
                      reasonably anticipated costs.

                               (b)Within  ninety (90) days  following the end of
                      each  calendar  quarter  or, at  Landlord's  option,  each
                      calendar  year,  Landlord shall furnish Tenant a statement
                      covering the calendar quarter or year just expired showing
                      the total of the Common Area  Expenses  for such  calendar
                      quarter  or year  and the  payments  made by  Tenant  with
                      respect to such  period as set forth in  subparagraph  (a)
                      above.  Actual  payment  by  Landlord  shall  conclusively
                      establish the total of such expenses. If Tenant's share of
                      the Common  Area  Expenses  exceeds  Tenant's  payments so
                      made,  Tenant shall pay Landlord the deficiency within ten
                      (10)  days  after  receipt  of  such  statement.  If  said
                      payments   exceed   Tenant's  share  of  the  Common  Area
                      Expenses,  Tenant  shall be  entitled to offset the excess
                      against  payments  next  thereafter to become due Landlord
                      for Common Area Expenses as set forth in subparagraph  (a)
                      above.  Tenant's share of the Common Area Expenses for the
                      previous calendar quarter or year shall be that portion of
                      all  such  Common  Area  Expenses  which  is  equal to the
                      proportion  thereof  which the  number  of square  feet of
                      Floor Area in the Premises bears to the greater of (i) the
                      total  number of square feet of Floor Area of buildings in
                      the Project which are occupied and open for business as of
                      the   commencement  of  such  calendar  quarter  or  year,
                      exclusive of the Floor Area  occupied by the Major Stores;
                      and  (ii)  eighty  percent  (80%)  of the  Floor  Area  of
                      buildings  in the  Project  exclusive  of the  Floor  Area
                      occupied by Major  Stores.  There shall be an  appropriate
                      adjustment  of Tenant's  share of the Common Area Expenses
                      as of the  Commencement  Date  and the  expiration  of the
                      Lease Term. Notwithstanding the foregoing, should Landlord
                      replace any


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<PAGE>
          Major  Store  existing as of the  Commencement  Date with a tenant who
          contributes less in Common Area Expenses than its  predecessor,  or if
          an existing Major Store  negotiates  with Landlord to reduce its share
          of Common Area Expenses, Landlord agrees that Tenant's share of Common
          Area  Expenses  shall  not be  increased  by  reason  of such  reduced
          contribution to Common Area Expenses.

                      (c) No failure or delay by  Landlord in  providing  Tenant
                      with (i) an estimated monthly charge under (a) above; (ii)
                      a  statement  of actual  expenses  for any  period of time
                      under (b) above; or (iii) request or demand for payment of
                      the sums  payable  by Tenant  under  this  Section;  shall
                      constitute  a waiver by  Landlord of the right of Landlord
                      to  collect  the same from  Tenant at any later time after
                      providing any such estimate,  statement  and/or request or
                      demand, or to estop Landlord from so doing.

          19.5  Reservations  by Landlord.  Landlord shall at all times have the
right and  privilege  of  determining  the  nature,  extent,  size,  boundaries,
location  and  configuration  of the  Common  Areas,  whether  the same shall be
surface,  underground or  multiple-deck,  and of making such changes therein and
thereto from time to time which in  Landlord's  opinion are  appropriate  to the
development and operation of the Project and/or the Shopping  Center,  including
the location and relocation of driveways,  entrances,  exits, automobile parking
spaces,  the direction and flow of traffic,  installation  of prohibited  areas,
landscaped areas, and all other facilities thereof.  Landlord may also from time
to time designate portions of the Common Areas as building area, and portions of
the  building  area within the  Project as Common  Areas.  Landlord  reserves to
itself the right, from time to time, to add additional  property to the Shopping
Center and/or the Project or delete property from the Shopping Center and/or the
Project,  as Landlord,  in its sole, absolute and subjective  discretion,  deems
necessary or advisable.

          19.6 No Liability.  Nothing contained herein shall be deemed to create
any  liability  upon  Landlord for any damage to motor  vehicles of customers or
employees of Tenant or for loss of property from within such motor vehicles.

          19.7  Regulation  of Common  Areas.  Landlord  shall have the right to
establish, and from time to time change, alter and amend, and to enforce against
Tenant and the other users of the Common Areas  reasonable rules and regulations
(including the exclusion of employee's  parking  therefrom) as Landlord may deem
necessary or advisable for the proper and efficient operation and maintenance of
the Common Areas. The rules and regulations herein provided may include, without
limitation,  the hours during which the Common Areas, or portions thereof, shall
be open for use, including any enclosed mall. Landlord may establish a system or
systems of validation or other type of operation,  including a system of charges
against  nonvalidated  parking checks of users,  and Tenant agrees to conform to
and  abide  by all  such  rules  and  regulations  in its use and the use of its
customers and patrons with respect to the automobile  parking area of the Common
Areas; provided,  however, that all such rules and regulations and such types of
operation  or  validation  of parking  checks and other  matters  affecting  the
customers   and  patrons   of~Tenant   shall  all  apply   equally  and  without
discrimination to substantially all of the lessees of the Shopping Center.  Such
rules may include,  but shall not be limited to, the  following:  (a) the access
routes  and  hours.  for  delivery  to the  Premises  by  trucks  and  trailers,
consistent  with the  provisions of Section 7.6 above,  (b) the  restriction  of
designated areas for drive through banking,  savings,  restaurant or other drive
through facilities, promotional and/or seasonal sales activities and/or loading,
trash and other  storage  areas,  whether or not such  storage  areas are roofed
and/or enclosed,  and for sidewalk sales  activities,  and (c) the regulation of
the removal, storage and disposal


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<PAGE>
of tenants' refuge and other rubbish. Attached hereto as Exhibit "F" are certain
rules and  regulations  relating to the Common Areas in effect as of the date of
this Lease.

          19.8 Control of Common Areas.  Landlord  shall at all times during the
Lease Term have the sole and exclusive  control of the Common Areas,  and may at
any time and from time to time during the Lease Term  exclude and  restrain  any
person from use or occupancy  thereof,  excepting,  however bona fide customers,
patrons and  service-suppliers  of Tenant, and other tenants of the Landlord who
make use of the  Common  Areas in  accordance  with the  rules  and  regulations
established by Landlord from time to time with respect  thereto.  Landlord shall
have the right to lease space  within the Common Area to tenants for the sale of
merchandise  and/or  services  and the  right to  permit  advertising  displays,
educational  displays and entertainment in the Common Area. The rights of Tenant
hereunder in and to the Common Areas shall at all times be subject to the rights
of  Landlord,  and the other  tenants of  Landlord  and the other  owners of the
Common Areas and their tenants and the respective  permittees of such parties to
use the same in common with  Tenant,  and it shall be the duty of Tenant to keep
all of the Common Areas free and clear of any obstructions  created or permitted
by Tenant or resulting  from Tenant's  operation and to permit the use of any of
the Common  Areas only for normal  parking  and  ingress  and egress by the said
customers, patrons and service-suppliers to and from the Premises.

     19.9  Unauthorized  Persons.  Nothing  herein  shall  affect  the rights of
Landlord at any time to remove any unauthorized persons from the Common Areas or
to restrain the use of the Common Areas by unauthorized persons.

          19.10 Employee Parking.  It is agreed that the employees of Tenant and
the other tenants of Landlord  within the Shopping Center shall not be permitted
to park their  automobiles in the  automobile  parking areas of the Common Areas
designated for patrons of the Shopping Center.  Landlord at all times shall have
the right to designate the  particular  parking area to be used by any or all of
such employees and any such designation may be changed from time to time. Tenant
and its  employees  shall park their cars only in those  portions  of the Common
Areas, if any, designated for that purpose by Landlord.  Upon written request by
Landlord,  Tenant shall in writing furnish  Landlord with its and its employees'
license  numbers.  If  Tenant  or its  employees  fail  to  park  their  cars in
designated parking areas, then Landlord may charge Tenant, without prior notice,
Ten Dollars  ($10.00)  per day for each day or partial day per car parked in any
areas other than those  designated.  Anything  contained  herein to the contrary
notwithstanding,  Landlord  shall  have the right  during all  holiday  shopping
seasons,  including the period  November 1 through  December 31 of each year, to
designate  special  employee  parking for such holiday  shopping  season  either
within the  Project  or at any  location  within  two (2) miles of the  Project,
provided Landlord shall provide  reasonable shuttle  transportation  services if
such parking area is not located within one (1) block of the Project.  If Tenant
or its employees fail to park their cars in such designated  parking areas, then
Landlord may charge Tenant Twenty-Five  Dollars ($25.00) for each day or partial
day per car parked in any other area or in  adjacent  properties  designated  by
Landlord as  non-employee  parking areas,  without first  receiving  notice from
Landlord.  All  amounts  due  under  the  provisions  of this  Section  shall be
Additional  Rent and be  payable by Tenant  within  ten (10) days  after  demand
therefor.

          19.11  Parking  Surcharge.  In the event that a parking  surcharge  or
regulatory  fee,  however  designated,  is  imposed  upon or levied or  assessed
against the Project or on, or on account of, the parking spaces thereon,  or any
portion thereof,  by any governmental agency or authority pursuant to the "Clean
Air  Act"  or any  plan  implemented  pursuant  to  such  Act  or any  enactment
amendatory or in


Fs\267\064I2~oo3I\2ls49qo~s aOS/07195                    -38-

<PAGE>
substitution thereof, Tenant agrees that Landlord may, at Landlord's option, but
Landlord shall not be obligated so to do, institute a system of pay parking and,
in such  event,  the  proceeds  of  such  system  will  be used to pay any  such
surcharge or fee and the cost of implementing or administering  such system.  In
the event of any overage in the  collection  of such parking  fees  collected by
Landlord,  the excess  shall be  credited on a pro rata basis  against  Tenant's
Common Area Expenses. Except as provided in this Section 19.12 and Section 19.11
above, there shall be no charge for employee parking.

          19.12 Tenant's  Audit.  Within twelve (12) months  following  Tenant's
receipt of Landlord's annual  reconciliation of the Common Area Expenses for the
previous  calendar year,  upon thirty (30) days' prior written  notice,  and not
more than one (1) time each year,  Tenant shall have the right, at Tenant's sole
expense,  to audit Landlord's books and records relating to Common Area Expenses
for the previous  calendar year during regular  business hours in the offices of
Landlord or at the Shopping  Center as designated  by Landlord.  Tenant shall be
entitled to inspect only those records  necessary to verity  charges  imposed by
Landlord on Tenant  hereunder.  If Tenant's audit of the previous  calendar year
reveals a discrepancy  in Tenant's favor and a refund of Common Area Expenses is
due on account thereof, Tenant shall be entitled to inspect Landlord's books and
records for an  additional  two (2) prior years,  but only with respect to those
particular  expenses  for which  Tenant was  overcharged,  and in no event shall
Tenant's audit be extended beyond the three (3) previous  calendar years. In the
event  Tenant's audit reveals a discrepancy in Tenant's favor of more than three
percent (3%) (as verified by Landlord)  and a refund of Common Area  Expenses is
due on account thereof,  Landlord shall refund such overpaid expenses to Tenant,
and  Landlord  shall also pay  Tenant's  reasonable  audit  costs in  connection
therewith.


                                   ARTICLE XX

                              INTENTIONALLY OMITTED


                                   ARTICLE XXI

                             BANKRUPTCY - INSOLVENCY

          21.1  Conditions  to Lease  Assumption.  In the event of the filing or
commencement  of any  proceeding by or against Tenant or any party in possession
of the  Premises,  under  the  Federal  Bankruptcy  Code as  amended,  the  duly
appointed Trustee, Receiver or Tenant, as a debtor in possession, shall not have
the  right to  assume  this  Lease or to  assign  this  Lease  or to  pledge  or
hypothecate this Lease for security without the consent of Landlord, which shall
not be unreasonably  withheld provided all of the following conditions are first
satisfied:

                               (a)Any  defaults  by Tenant  under this Lease are
                      cured or Landlord is provided  "adequate  assurance"  that
                      such defaults will be promptly cured;

                               (b)Landlord    is    compensated   or   "adequate
                      assurance"  is  provided  that  Landlord  will be promptly
                      compensated  for any  actual  pecuniary  loss to  Landlord
                      resulting  from any  defaults by Tenant  under this Lease;
                      and

                               (c)Landlord is provided  "adequate  assurance" of
                      future performance of all of the covenants, agreements and
                      obligations of Tenant under the terms of this Lease.


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<PAGE>
     21.2  Adequate  Assurance.  For the  purposes  of Section  21.1,  "adequate
assurance"  of future  performance  of the terms and  provisions  of this Lease,
shall include adequate assurance:

     (a)Of the source of rent and other  consideration due under this Lease, and
in the  case of an  assignment,  that  the  financial  condition  and  operating
performance  of the  proposed  assignee  and its  guarantors,  if any,  shall be
similar  to  the  financial   condition  and   operating   performance   of  the
debtor-tenant  and its  guarantors,  if any as of the time the debtor became the
tenant under this Lease.

     (b)That  any  Percentage  Rent  due  under  this  Lease  will  not  decline
substantially.

     (c)That  assumption  or  assignment  of this  Lease is  subject  to all the
provisions thereof,  including (but not limited to) provisions such as a radius,
location,  use, or  exclusivity  provision,  and is further  subject to any such
provision contained in any other lease, financing agreement, or master agreement
relating to the Project.

     (d)That  assumption or assignment of this Lease will not disrupt any tenant
mix or balance in the Project.

     (e)Any other  requirement  hereafter  imposed by law or which  landlords or
Courts  are  hereafter  authorized  or  permitted  by law to  impose  on such an
assumption, assignment, pledge or hypothecation.

     21.3  Continuing  Performance.  In  any  case  under  any  chapter  of  the
Bankruptcy  Code as  amended,  the  Trustee,  Receiver  or Tenant,  as debtor in
possession,  shall  timely  perform  all the  obligations  of the  debtor-tenant
arising  from and after any order for relief  under this  Lease,  if  unexpired,
until this Lease is assumed or rejected.  This  subsection  shall not affect the
trustee  or  debtor-tenant's  obligations  under  any other  subsection  of this
Article XXI, and  acceptance of  performance  under this  subsection by Landlord
does not constitute a waiver or  relinquishment  of Landlord's rights under this
Lease.

          21.4 Deemed  Rejection.  The  failure by the  Trustee  (or Tenant,  as
debtor in possession)  in any case under any chapter of the  Bankruptcy  Code to
assume or reject this Lease within sixty (60) days after the order for relief or
within such additional time as the Court, for cause,  within such sixty (60) day
period shall fix,  shall be deemed a rejection,  and the Trustee,  Receiver,  or
Tenant, as the case may be, must immediately surrender the Premises to Landlord.
Landlord  agrees,  however,  that it will not oppose a properly  filed motion by
Tenant to extend the time to assume or reject this Lease for an additional sixty
(60) days so long as Tenant is then current with all its  obligations  under the
Lease.  Any rejection of this Lease pursuant to the foregoing or otherwise shall
be deemed a non~curable  default under this Lease. This Lease may not be assumed
if the  Lease  Term  has  expired  or  the  Lease  has  been  terminated  before
commencement of any bankruptcy proceeding.

     21.5 Landlord's  Services.  Neither the Trustee,  Receiver nor Tenant, as a
debtor in possession acting in accordance with the provisions  contained in this
Article XXI, shall under any circumstances, require Landlord to provide services
or supplies incidental to this Lease before any assumption of this Lease, unless
Landlord shall be compensated under the terms of this Lease for any services and
supplies provided under this Lease before such assumption.

     21.6 Funds Held by Landlord.  In the event of the filing or commencement of
any  proceeding by or against  Tenant or any party in possession of the Premises
under the Federal Bankruptcy Code, as


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<PAGE>
amended,  Landlord  shall have the right to withhold  any funds held by Landlord
which would otherwise be payable to Tenant under this Lease, whether relating to
security  deposits,  construction  allowances (if provided for herein) , refunds
due based on adjustment in Minimum Rent,  Additional  Rent,  Percentage Rent, or
otherwise,  until such time as final  determination is made (affirmatively or by
operation of law)  regarding  the  assumption or rejection of this Lease in such
proceedings.  In the event of  assumption  of this  Lease,  such funds  shall be
continued to be held by Landlord  until all conditions in Sections 21.1 and 21.2
are  satisfied.  In the event of  rejection of this Lease  (affirmatively  or by
operation of law), Landlord shall be entitled to offset any such sums held which
would  otherwise be payable to Tenant against damages  otherwise  recoverable by
Landlord  under  this  Lease,   whether   arising  prior  to  or  following  the
commencement of such proceedings.

          21.7 Application of United States  Bankruptcy Code. Upon the filing of
a petition by or against Landlord and Tenant under the United States  Bankruptcy
Code,  as the  same  may  from  time to time be  amended  or  supplemented  (the
'Bankruptcy  Code") , Landlord and Tenant shall have the rights and  obligations
provided in the Bankruptcy Code; provided, however, that it is the intent herein
that the provisions of this Article XXI be enforced to the full extent permitted
under the Bankruptcy Code.


                                  ARTICLE XXII

                      DEFAULTS BY TENANT: LANDLORD'S REMEDIES

     22.1 Tenant's Default. Landlord may treat the occurrence of any one or more
of the following  events as a breach and default of this Lease: (a) Tenant fails
to make any payment of rent or other charges  payable when due; (b) Tenant fails
in the prompt and full  performance  of any other of its promises,  covenants or
agreements herein contained;  Cc) Tenant vacates (except as permitted in Section
16.6) in or abandons the Premises; (d) any other event or circumstance described
as a default by Tenant in this Lease;  Ce) if,  within any period of twelve (12)
months,  Tenant  shall have been in  default  in the  timely  payment of Minimum
Annual Rent or any item of  Additional  Rent  payable  hereunder on three (3) or
more occasions and Landlord, by reason of such defaults, shall have delivered to
Tenant  three (3) or more  notices  of default  within  said  twelve  (12) month
period;  or (f) if,  within any period of twelve (12) months,  Tenant shall have
failed in the  performance of any covenants on the part of  Tenant~contained  in
this Lease (other than those described in Sections 22.1(a) and 22.1(e)) on three
(3) or more  occasions  and  Landlord,  by reason of such  defaults,  shall have
delivered to Tenant three (3) or more notices of default within said twelve (12)
month period.  A default under  subsection Ce) or (f) of the foregoing  sentence
shall be deemed to be deliberate  and shall  conclusively  constitute a material
non-curable  default,  notwithstanding  that such default  shall have been cured
within any permitted period following notice as above provided.

          22.2  Landlord's  Remedies.  In the event of any  breach or default by
Tenant  under this Lease,  in addition to any or all other rights or remedies of
Landlord set forth in this Lease and/or by law  provided,  Landlord  may, at its
option,  without  further  notice  or  demand of any kind to Tenant or any other
person:

                      (a)  Terminate  this  Lease as  provided  by law,  recover
                      possession  of the  Premises  and  recover  damages  under
                      California  Civil  Code  Section  1951.2  as  provided  in
                      Section  22.5 hereof.  Landlord  shall not be permitted to
                      terminate this Lease without first giving Tenant three (3)
                      days  notice  of  Tenant's  failure  to pay  rent or other
                      charges,  or fifteen (15) days notice of any  non-monetary
                      default on the part of Tenant  under this Lease.  Any such
                      notice may be given as provided in


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<PAGE>
          Section 30.3 of this Lease and notice given in the manner  provided by
          Section 30.3 shall be in lieu of notice under California Code of Civil
          Procedure ss. 1161 and 1162; or

                               (b)Without  terminating  this Lease or  declaring
                      the term of this Lease  ended,  reenter the  Premises  and
                      occupy the whole or any part thereof for and on account of
                      Tenant  and  to  collect  any  unpaid  rentals  and  other
                      charges,   which  have  become   payable,   or  which  may
                      thereafter become payable, and recover damages as provided
                      in Section 22.2(a) above; or

                      (c) Even though  Landlord may have reentered the Premises,
                      Landlord may thereafter  elect to terminate this Lease and
                      all of the rights of Tenant in or to the Premises;    or


                      (d) Continue  this Lease in effect  pursuant to California
                      Civil Code Section  1951.4  without  terminating  Tenant's
                      right to  possession  even though Tenant has breached this
                      Lease  and  abandoned  the  Premises  and  enforce  all of
                      Landlord's rights and remedies under this Lease, at law or
                      in equity,  including  the right to recover the rent as it
                      becomes  due under this  Lease;  provided,  however,  that
                      Landlord  may at any time  thereafter  elect to  terminate
                      this Lease for such previous breach by notifying Tenant in
                      writing that Tenant's  right to possession of the Premises
                      has been terminated.

          In addition to the foregoing rights and remedies,  Landlord shall have
the  right to  impose a fine in the  event of any  violation  of the  rules  and
regulations  promulgated  under  this Lease  and/or in the event of any  default
described in Section  22.1(f) above.  The amount of the fine for such default or
violation  shall  be  Five  Hundred  Dollars  ($500.00)  .  Neither   Landlord's
imposition of such fine nor Landlord's  acceptance of payment of such fine shall
operate as or be  construed  as a waiver of any of  Landlord's  other rights and
remedies  set  forth in this  Section  22.2 by  reason  of any such  default  or
violation or for any  subsequent  default or violation.  Landlord  shall further
have the right at any time during the Lease Term to (a) make such employment and
credit investigations as Landlord may, in its sole and absolute discretion, deem
advisable from such sources as Landlord may determine so as to evaluate Tenant's
credit standing and/or  financial  status;  and (b) report to one or more credit
reporting  services or bureaus  (i) any  monetary  default  under this Lease not
cured within the time periods provided herein; or (ii) any default under Section
22.1(e) above.

          22.3        ARBITRATION OF DISPUTES WAIVER OF RIGHT TO JURY TRIAL.

                      (a)  EXCEPT FOR AN ACTION FOR  UNLAWFUL  DETAINER  AND THE
         DISPUTES,  CONTROVERSIES AND ISSUES TO BE DECIDED THEREIN, ALL DISPUTES
         AND  CONTROVERSIES   RELATING  TO  THE  INTERPRETATION,   CONSTRUCTION,
         PERFORMANCE  OR BREACH OF THIS LEASE  SHALL BE SETTLED BY  ARBITRATION.
         THE ARBITRATION SHALL BE GOVERNED BY CALIFORNIA LAW, SHALL HE SUBMITTED
         TO ARBITRATION IN ORANGE COUNTY, CALIFORNIA AND JUDGMENT UPON THE AWARD
         RENDERED  BY  THE  ARBITRATORS  MAY BE  ENTERED  IN  ANY  COURT  HAVING
         JURISDICTION THEREOF. THE PARTY SEEKING ARBITRATION  ("ELECTING PARTY")
         SHALL SET FORTH THE  PARTICULARS  OF ITS CLAIM AND THE  IDENTITY OF ITS
         QUALIFIED  ARBITRATOR (AS HEREINAFTER  DEFINED) IN A NOTICE TO BE GIVEN
         IN WRITING TO THE OTHER PARTY (THE "NON-ELECTING  PARTY") BY REGISTERED
         OR CERTIFIED  MAIL.  AS USED HEREIN,  THE TERM  "QUALIFIED  ARBITRATOR"
         SHALL MEAN A PERSON WHO IS AN ATTORNEY  LICENSED TO PRACTICE LAW IN THE
         STATE OF CALIFORNIA AND WHO HAS NOT LESS THAN FIVE (5) YEARS EXPERIENCE
         IN  COMMERCIAL  LEASING  EITHER AS AN ATTORNEY  OR REAL ESTATE  BROKER.
         WITHIN SEVEN (7) DAYS AFTER  RECEIPT OF THAT NOTICE,  THE  NON-ELECTING
         PARTY SHALL DESIGNATE ITS OWN QUALIFIED  ARBITRATOR IN A WRITTEN NOTICE
         TO THE ELECTING PARTY. THE TWO


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<PAGE>
         ARBITRATORS SO SELECTED SHALL THEN MUTUALLY AGREE ON A THIRD  QUALIFIED
         ARBITRATOR (HEREINAFTER DESIGNATED THE "NEUTRAL ARBITRATOR"), WHO SHALL
         ALONE ARBITRATE THE MATTER. THE NEUTRAL ARBITRATOR SHALL BE A QUALIFIED
         ARBITRATOR.  THE  FAILURE  OF  EITHER  PARTY TO  EITHER  (i)  APPOINT A
         QUALIFIED  ARBITRATOR  WITHIN THE  SPECIFIED  TIME  PERIOD,  OR (ii) TO
         APPOINT  AN  ARBITRATOR  WHO  IS  A  QUALIFIED  ARBITRATOR,   SHALL  BE
         CONCLUSIVELY  DEEMED EQUIVALENT TO APPOINTING THE QUALIFIED  ARBITRATOR
         APPOINTED  BY THE OTHER PARTY AS THE SOLE  ARBITRATOR  FOR THE DISPUTE,
         WHO ALONE SHALL ARBITRATE THE MATTER. IN THE EVENT THE PARTIES APPOINT,
         OR  ARE  DEEMED  TO  APPOINT  A  SOLE  ARBITRATOR,  THERE  SHALL  BE NO
         APPOINTMENT OF A NEUTRAL ARBITRATOR AND THE SOLE ARBITRATOR SHALL ALONE
         THEN  SET THE  MATTER  FOR  HEARING  AND,  AFTER  HEARING,  RENDER  THE
         DECISION.  SHOULD THE TWO (2) QUALIFIED ARBITRATORS FAIL TO APPOINT THE
         NEUTRAL  ARBITRATOR  WITHIN  SEVEN (7) DAYS  AFTER  DESIGNATION  OF THE
         SECOND QUALIFIED ARBITRATOR, THE NEUTRAL ARBITRATOR SHALL BE DESIGNATED
         PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE  SECTION 1281.6, AS THAT
         SECTION  MAY BE AMENDED OR  REDESIGNATED  FROM TIME TO TIME,  PROVIDED,
         HOWEVER,  THAT THE NEUTRAL  ARBITRATOR SO APPOINTED MUST BE A QUALIFIED
         ARBITRATOR. ARBITRATION SHALL BE SET FOR HEARING WITHIN SIXTY (60) DAYS
         OF THE  APPOINTMENT  OF THE  NEUTRAL OR SOLE  ARBITRATOR  (COLLECTIVELY
         HEREAFTER  "ARBITRATOR")  . THE  HEARING  DATE  SHALL BE SET BY WRITTEN
         NOTICE  FROM THE  ARBITRATOR.  THERE  SHALL BE NO  CONTINUANCES  OF THE
         ARBITRATION HEARING EXCEPT BY AGREEMENT~ OF THE PARTIES. THE NEUTRAL OR
         SOLE  ARBITRATOR,  AS APPLICABLE,  SHALL REQUIRE A FEE DEPOSIT BASED ON
         FIVE (5)  HOURS OF TIME AT THE  ARBITRATOR'S  USUAL  HOURLY  RATE.  THE
         PARTIES SHALL EACH PAY ONE-HALF  (1/2) OP THE FEE DEPOSIT  WITHIN SEVEN
         (7) DAYS OF DEMAND~  THEREFOR.  IF A PARTY FAILS TO PAY THE FEE DEPOSIT
         WITHIN THE PRESCRIBED TIME, THE MATTER SHALL PROCEED AS A DEFAULT AS TO
         THAT  PARTY,  AND THE  DEFAULTING  PARTY SHALL HAVE NO RIGHT TO PRESENT
         EVIDENCE AT THE ARBITRATION HEARING. THE NEUTRAL OR SOLE ARBITRATOR, AS
         APPLICABLE,  SHALL USE HIS OR HER BEST  EFFORTS  TO  RENDER A  DECISION
         WITHIN TEN (10) DAYS OF THE  ARBITRATION  HEARING.  THE NEUTRAL OR SOLE
         ARBITRATOR,  AS APPLICABLE,  ACTING ALONE MAY MAKE AN APPROPRIATE AWARD
         OR DECISION PERMITTED UNDER THIS SECTION.  SUCH AWARD OR DECISION SHALL
         BE  FINAL  AND  BINDING  ON  THE  PARTIES  TO THE  PROCEEDING,  WHETHER
         PARTICIPATING  OR NOT.  PARTICIPANTS  SHALL  HAVE  THE  FULL  RIGHT  OF
         DISCOVERY PURSUANT TO THE CALIFORNIA CODE OF CIVIL PROCEDURE; PROVIDED,
         HOWEVER,  THAT SUCH  DISCOVERY  RIGHTS SHALL NOT  OTHERWISE  EXTEND THE
         HEARING DATE SET BY THE NEUTRAL OR SOLE  ARBITRATOR.  THE PROVISIONS OF
         THE CALIFORNIA  CIVIL CODE AND THE CALIFORNIA  EVIDENCE CODE BEARING ON
         THE INTERPRETATION OF CONTRACTS AND THE ADMISSIBILITY OF EVIDENCE SHALL
         APPLY AND BE ENFORCED AT THE ARBITRATION  HEARING. THE PREVAILING PARTY
         IN ANY  ARBITRATION  PROCEEDING  SHALL BE  ENTITLED  TO RECOVER  ACTUAL
         ATTORNEYS'  FEES AND COSTS WHICH SHALL BE  DETERMINED BY THE NEUTRAL OR
         SOLE ARBITRATOR AS PART OF ITS DECISION IN THE ARBITRATION.

                      NOTICE:  BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING
         TO  HAVE  ANY  DISPUTE  ARISING  OUT OF THE  MATTERS  INCLUDED  IN THIS
         "ARBITRATION OF DISPUTES"  PROVISION DECIDED BY NEUTRAL  ARBITRATION AS
         PROVIDED BY  CALIFORNIA  LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
         POSSESS TO HAVE THE  DISPUTE  LITIGATED  IN A COURT OR JURY  TRIAL.  BY
         INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
         DISCOVERY AND APPEAL,  UNLESS SUCH RIGHTS ARE SPECIFICALLY  INCLUDED IN
         THIS '~ARBITRATION OF DISPUTES"  PROVISION.  IF YOU REFUSE TO SUBMIT TO
         ARBITRATION  AFTER AGREEING TO THIS PROVISION,  YOU MAY BE COMPELLED TO
         ARBITRATE   UNDER  THE  AUTHORITY  OF  THE  CALIFORNIA  CODE  OF  CIVIL
         PROCEDURE.  YOUR AGREEMENT TO THIS ARBITRATION  PROVISION IS VOLUNTARY.
         WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES


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<PAGE>
     ARISING OUT OF THE MATTERS INCLUDED IN THIS "ARBITRATION OF DISPUTES PSION
TO NEUTRAL ARBITRATION.

'TENANT'S INITIALS            LANDLORD'S INITIALS


                      (b) EXCEPT AS SUBMITTED TO ARBITRATION PURSUANT TO SECTION
         22.3(a)  ABOVE,  ANY ACTION OR PROCEEDING  UNDER THIS LEASE,  INCLUDING
         WITHOUT  LIMITATION,  AN UNLAWFUL  DETAINER  PROCEEDING  TO ENFORCE ANY
         DEFAULT UNDER THE LEASE OR TO RECOVER  POSSESSION OF THE PREMISES AFTER
         THE  EXPIRATION  OF THE LEASE TERM,  SHALL BE TRIED  BEFORE A JUDGE AND
         BOTH  LANDLORD  AND  TENANT  IRREVOCABLY  WAIVE  THE  RIGHT TO HAVE THE
         PROCEEDING  DECIDED BY JURY ON ALL ISSUES  WHICH MAY BE DECIDED IN SUCH
         PROCEEDING,  INCLUDING BUT NOT LIMITED TO RIGHT TO  POSSESSION,  DAMAGE
         FOR  UNLAWFUL  DETENTION  OF THE  PREMISES,  PAST DUE  RENTS  AND OTHER
         CHARGES, TREBLE DAMAGES, ATTORNEYS' FEES, INTEREST AND COSTS OF SUIT.

          22.4 Reentry by Landlord.  Should Landlord have reentered the Premises
under the provisions of Section  22.2(b) above,  Landlord shall not be deemed to
have  terminated this Lease, or the liability of Tenant to pay any rent or other
charges  thereafter  accruing,  or to have  terminated  Tenant's  liability  for
damages under any of the provisions hereof, by any such reentry or by any action
in unlawful detainer or otherwise to obtain  possession of the Premises,  unless
Landlord  shall  have  notified  Tenant in  writing  that it has so  elected  to
terminate this Lease, and Tenant further  covenants that the service by Landlord
of any notice pursuant to the unlawful  detainer statutes of the State where the
Shopping  Center is situated and the  surrender of  possession  pursuant to such
notice  shall not (unless  Landlord  elects to the contrary at the time of or at
any  time  subsequent  to the  serving  of such  notices  and such  election  is
evidenced by a written  notice to Tenant) be deemed to be a termination  of this
Lease.  In the  event of any  entry or  taking  possession  of the  Premises  as
aforesaid,  Landlord  shall have the right,  but not the  obligation,  to remove
therefrom all or any part of the personal property located therein and may place
the same in storage at a public warehouse at the expense and risk of Tenant.

     22.5 Termination of Lease: Damages. Should Landlord elect to terminate this
Lease  pursuant to the provisions of Section  22.2(a) or Section  22.2(c) above,
Landlord may recover from Tenant as damages the following:

     (a)The  worth  at the time of award of any  unpaid  rental  which  had been
earned at the time of such termination; plus

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

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

     (d) Any other amount  reasonably  necessary to compensate  Landlord for all
the detriment  proximately caused by Tenant'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 any costs or expenses incurred
by Landlord in (i) retaking  possession of the Premises,.  including  reasonable
attorney's


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<PAGE>
          fees therefor;  (ii) maintaining or preserving the Premises after such
          default;  (iii)  preparing the Premises for reletting to a new tenant,
          including  repairs or  alterations  to the Premises for such reletting
          and/or by reason of damage  caused by or under  Tenant;  (iv)  leasing
          commissions;  and (v)  reimbursement  of any payments made by Landlord
          for Tenant's Improvements; plus

                               (e)At Landlord's election,  such other amounts in
                      addition  to or  in  lieu  of  the  foregoing  as  may  be
                      otherwise  provided in this Lease  and/or  permitted  from
                      time to time by the laws of the State  where the  Shopping
                      Center is situated.

As used in subparagraphs  (a) and (b) above, THE "worth at the time of award" is
computed  by allowing  interest  at the lesser of two percent  (2%) per annum in
excess of the rate announced as the prime or reference rate by any national bank
reasonably selected by Landlord (THE "Applicable  Interest Rate") or the maximum
rate per annum allowed by law. As used in subparagraph  (c) above, THE "worth at
the time of award" is computed by  discounting  such amount at the discount rate
of the Federal  Reserve  Bank  situated  nearest to the location of the Shopping
Center at the time of award plus one  percent  (1%) per annum,  but not  greater
than eight percent (8%) per annum.

          22.6 Determination of Rent. For all purposes of this Article XXII, THE
term  "rental"  or  "rent"  shall  be  deemed  to be the  Minimum  Annual  Rent,
Percentage  Rent,  Additional  Rent and any and all other  charges to be paid by
Tenant  pursuant  to the terms of this  Lease.  All such  sums,  other  than the
Minimum  Annual  Rent,  shall be computed  on the basis of the  average  monthly
amount thereof  accruing during any preceding  twelve (12) month period selected
by Landlord occurring within the preceding five (5) year period,  except that if
it becomes  necessary  to compute  such  rental  before such a twelve (12) month
period has  occurred  then such  rental  shall be  computed  on the basis of the
average monthly amount hereof accruing during such shorter period.

          22.7 Cumulative Remedies: No Waiver. THE remedies given to Landlord in
this  Article  XXII are in  addition  and  supplemental  to all other  rights or
remedies  which  Landlord  may have  under  laws  then in  force or under  other
provisions  of this  Lease.  THE waiver by  Landlord  of any breach of any term,
covenant or  condition  herein  contained  shall not be deemed to be a waiver of
such term,  covenant or condition or of any subsequent breach of the same or any
other term, covenant or condition herein contained. THE subsequent acceptance of
rental hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term,  covenant or condition  of this Lease,  other than
the failure of Tenant to pay the  particular  rental so accepted,  regardless of
Landlord's  knowledge of such preceding breach at the time of acceptance of such
rental.  No covenant,  term,  or condition of this Lease shall be deemed to have
been waived by Landlord unless such waiver be in writing signed by Landlord.

          22.8 Landlord's Right to Cure. Should Tenant fail to pay and discharge
any claim for damages arising out of the repair, alteration, maintenance and use
of the  Premises,  or should Tenant fail to provide or evidence the provision of
any insurance  policy as required by this Lease,  or should Tenant fail to fully
pay or perform any sum to be paid or any  covenant or  agreement to be performed
by Tenant,  as provided for in this Lease,  after ten (10) days' written  notice
from Landlord, then Landlord may, at its option and without waiving or releasing
Tenant from any of Tenant's obligations hereunder, pay any such claim or charge,
or settle or discharge any action therefor or satisfy any judgment  thereon,  or
obtain any such  insurance,  or pay any such sum or perform any such covenant or
agreement.  All costs,  expenses  and other sums  incurred  or paid by  Landlord
in~connection therewith (including without


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<PAGE>
limitation, attorneys' fees and costs) , together with interest at the lesser of
the  Applicable  Interest  Rate or the maximum  rate of interest  per annum then
permitted  by law on such costs,  expenses,  and sums from the date  incurred or
paid by Landlord,  shall be deemed to be Additional  Rent hereunder and shall be
paid by Tenant,  upon demand,  and any default therein shall constitute a breach
of the covenants and conditions of this Lease.


                                  ARTICLE XXIII

                              DEFAULTS BY LANDLORD

          23.1 Landlord's  Default.  Tn the event Landlord shall neglect or fail
to perform or observe any  provisions or  conditions  contained in this Lease on
Landlord's  part to be  performed  or  observed  within  thirty  (30) days after
written notice from Tenant to Landlord specifying the nature of the default (or,
when more  than  thirty  (30) days may be  required  to cure  such  default,  if
Landlord  shall  fail to  proceed  diligently  to cure such  default  after such
written  notice),  Landlord  shall be liable to Tenant  for any and all  damages
sustained by Tenant as a result of Landlord's breach. Such notice is a necessary
condition  precedent to any suit whatsoever  against  Landlord under this Lease.
Tenant  shall have no right to  terminate  this Lease as a result of  Landlord's
default and Tenant's  remedy shall be limited to damages  and/or an  injunction.
Tenant expressly  understands and agrees that any money judgment  resulting from
any default by Landlord or other claim against Landlord arising under this Lease
shall be  satisfied  only out of the rents,  issues,  profits  and other  income
actually received by Landlord from the operation of the Shopping Center,  net of
all operating expenses, liability reserves and debt service associated with said
operation ("income"), and no other real, personal or mixed property of Landlord,
wherever  situated,  shall  be  subject  to levy on any such  judgment  obtained
against  Landlord.  In the event such income is insufficient  for the payment of
any such judgment(s),  Tenant will not institute any further action, suit, claim
or demand,  in law or in equity,  against Landlord for or on the account of such
deficiency. Tenant hereby waives, to the extent waivable under law, any right to
satisfy any such money judgment  against Landlord except from income received by
Landlord from the operation of the Shopping Center. For purposes of this Section
23.1 only the term  "Landlord"  shall mean any and all  partners,  both  general
and/or limited, if any, which comprise Landlord.

          23.2  Tenant's  Notice of Landlord's  Default.  If the Premises or any
part thereof are at any time subject to a ground lease,  master lease,  mortgage
and/or deed of trust,  and this Lease or the  rentals due from Tenant  hereunder
are assigned to such ground  lessor,  master lessor,  mortgagee,  trustee and/or
beneficiary  (called  "Assignee"  for purposes of this  Article  XXIII only) and
Tenant is given written  notice  thereof,  including the post office  address of
such  Assignee(s),  then Tenant shall give written  notice to such  Assignee(s),
specifying the default in reasonable  detail,  and affording such  Assignee(s) a
reasonable opportunity to make performance for and on behalf of Landlord. If and
when any Assignee has made performance on behalf of Landlord, such default shall
be deemed cured.


                                  ARTICLE XXIV

                                 EMINENT DOMAIN

     24.1 Total Taking.  In the event the entire  Premises shall be appropriated
or taken  under  the power of  eminent  domain  by any  public  or  quasi-public
authority,  this Lease shall terminate and expire as of the date of such taking,
and Landlord and Tenant shall


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<PAGE>
each be released from any liability  accruing  under this Lease  following  such
termination.

          24.2 Substantial  Taking.  In the event more than twenty percent (20%)
of the square  footage of Floor Area of the Premises is taken under the power of
eminent domain by any public or quasi-public  authority,  or if by reason of any
appropriation or taking, regardless of the amount so taken, THE remainder of the
Premises is not one undivided  building  space,  either Landlord or Tenant shall
have the right to  terminate  this Lease as of the date  Tenant is  required  to
vacate a portion of the Premises, upon giving notice in writing of such election
within thirty (30) days after receipt by Tenant from Landlord of written  notice
that the Premises  have been so  appropriated  or taken.  Landlord  agrees after
learning  of any  appropriation  or taking to  promptly  give to Tenant  written
notice thereof. Furthermore, should less than twenty percent (20%) of the square
footage  of  Floor  Area of the  Premises  be  taken,  but  such  portion  taken
constitutes  a material  portion of the Premises and Tenant,  in the exercise of
its reasonable and prudent business  judgment,  determines that it can no longer
operate its business in the Premises by reason of such taking, then Tenant shall
have the right to  terminate  this Lease  upon  giving  notice of such  election
within thirty (30) days after receipt by Tenant from Landlord of written  notice
that the Premises has been so appropriated or taken.

          24.3  Restoration.  If  (i)  neither  Landlord  nor  Tenant  elect  to
terminate  this Lease when  entitled to under this Article XXIV; or (ii) neither
Landlord nor Tenant have the right to so terminate this Lease under this Article
XXIV, then in either such event Landlord agrees,  at Landlord's cost and expense
and as soon as  reasonably  possible,  to the  extent of any  severance  damages
attributable  to damages to the Premises  available to Landlord,  to restore the
Premises  remaining to a complete  unit of like quality and character as existed
prior to such  appropriation  or taking;  and thereafter the Minimum Annual Rent
provided for in Article V hereof shall be reduced in proportion to the reduction
in the Floor Area of the  Premises  resulting  from such  taking  and  following
Landlord's  restoration  and  repair  and  items of  Additional  Rent  which are
calculated  on THE basis of Floor Area  shall be  thereafter  calculated  on the
basis of such remaining Floor Area.

          24.4 Right to Award. Landlord shall be entitled to the entire award or
compensation in any such eminent domain proceedings.  Tenant's rights to receive
compensation or damages for its merchandise  and personal  property,  relocation
costs and  goodwill  (provided  such  recovery of  goodwill by Tenant  shall not
reduce any award  otherwise  payable to  Landlord)  shall not be affected in any
manner  hereby.  In the event of  termination  of this  Lease  pursuant  to this
Article  XXIV,  THE rental  and other  charges  for the last  month of  Tenant's
occupancy  shall be prorated to and from the date of  termination  and  Landlord
agrees to refund to Tenant any rent or other charges paid in advance.

          24.5 Termination of Major Department Store Leases. If more than twenty
percent (20%) of the Floor Area of the buildings constructed within the Shopping
Center are taken under the power of eminent domain,  whether or not the Premises
are acquired in whole or in part, or if, as a result of any appropriation  under
the  power  of  eminent  domain,  THE  leases  of any two or  more of the  Major
Department  Stores in the  Shopping  Center are  terminated,  Landlord  may,  by
written notice to Tenant, terminate this Lease, such termination to be effective
thirty (30) days following Tenant's receipt of such notice.

     24.6  Voluntary  Sale.  Waiver.  For the purposes of this  Article  XXIV, a
voluntary  sale or  conveyance  in lieu  of  condemnation  shall  be  deemed  an
appropriation or taking under the power of eminent domain.  Tenant hereby waives
any statutory rights


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<PAGE>
of  termination  which may arise by reason of any partial taking of the Premises
under the power of eminent domain.


                                   ARTICLE XXV

                                 ATTORNEYS' FEES

          In the event that  either  Landlord or Tenant  institutes  any action,
proceeding or  arbitration  against the other relating to the provisions of this
Lease,  or any  default  hereunder,  THE  unsuccessful  party  in  such  action,
proceeding or arbitration  shall  reimburse the successful  party for reasonable
attorneys'  fees,  costs and fees of expert  witnesses,  and all other costs and
expenses  incurred  therein by the  successful  party,  including fees and costs
incurred in any appellate  proceeding.  Such  attorneys' fees and costs shall be
due and payable within ten (10) days after written demand therefor.


                                  ARTICLE XXVI

                      SALE OR MORTGAGE OF PREMISES BY LANDLORD

          Landlord may, without Tenant's consent, contract to and/or perform any
sale, purchase, exchange, transfer, assignment, lease, conveyance,  encumbrance,
pledge,  mortgage  or  hypothecation  of all or any  portion of the  interest of
Landlord in this Lease, THE Premises, THE real property underlying the Premises,
THE Shopping Center, THE Project, or the improvements  associated therewith.  In
the event of any sale,  exchange or  conveyance  of the Premises by Landlord and
assignment  by  Landlord  of this Lease,  Landlord  shall be entirely  freed and
relieved of all liability  under any and all of its  covenants  and  obligations
contained in or derived from this Lease  arising out of any act,  occurrence  or
omission relating to the Premises or this Lease occurring after the consummation
of such sale or  exchange  and  assignment  and the party  acquiring  Landlord's
interest in and to the Premises  shall be deemed  without any further  agreement
between the parties or their  successors  in interest or between the parties and
any such party so acquiring Landlord's interest in and to the Premises,  to have
assumed and agreed to carry out any and all of the covenants and  obligations of
Landlord  under this Lease to be performed  from and after the date of such sale
or exchange and assignment.


                                  ARTICLE XXVII

                      ESTOPPEL - SUBORDINATION - ATTORNMENT

          27.1  Estoppel.  Within  twenty (20) days after  written  request from
Landlord, or from any mortgagee,  deed of trust trustee or beneficiary or lessor
of Landlord,  Tenant agrees to execute and deliver a current financial statement
and/or  estoppel  certificate  (in  recordable  form if  requested  by Landlord)
addressed to any proposed mortgagee,  purchaser, exchangee or assignee and/or to
Landlord certifying the information requested, including among other things, THE
amount  of  the  monthly  Minimum  Annual  Rent  then  payable,   THE  dates  of
commencement and termination of this Lease, THE amount of any Security Deposit:,
THE date to which  rents have been paid and that this Lease is in full force and
effect (if such be the case),  that this Lease has not been  modified or amended
(or if modified or amended specifying such modifications and/or amendments), and
that there are no differences,  offsets or defaults of Landlord,  or noting such
differences,  offsets or defaults as actually exist.  Tenant shall be liable for
any loss or liability  resulting  from any incorrect  information  certified and
Landlord and such mortgagee, purchaser, exchangee and/or assignee shall have the
right to rely on such estoppel certificate and financial statement.


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Tenant shall in the same manner acknowledge and execute any assignment of rights
to receive rents as required by any mortgagee of Landlord.

          27.2 Subordination.  Tenant acknowledges that any mortgagee or deed of
trust  trustee  or  beneficiary  has THE  right to  subordinate  at any time its
interest  in this  Lease and the  leasehold  estate to that of  Tenant,  without
Tenant's  consent.  Within  twenty (20) days  following  the written  request of
Landlord or of any first mortgagee or first deed of trust  beneficiary or lessor
of Landlord's,  Tenant will, in writing, subordinate its rights hereunder to the
lien of any first  mortgage  or first  deed of trust now or  hereafter  in force
against  the  land and  building  of which  the  Premises  are a part and to all
advances made or thereafter to be made upon the security  thereof  and/or to the
interest of any ground  lessor of the land upon which the  Premises are situated
and/or confirm the subordination of such interests to this Lease. As a condition
to such  subordination,  THE  mortgagee  and  trustee  under  deeds  of trust or
mortgages  and the ground  lessor  under any ground lease  (herein  collectively
referred to as "Lender")  shall execute and deliver to Tenant a Recognition  and
Non-Disturbance  Agreement  which shall provide that so long as Tenant is not in
default beyond any applicable cure periods, Tenant's opossession of the Premises
and its rights and  privileges  under the Lease shall not be disturbed by Lender
for any reason other than one which would  entitle the Landlord to terminate the
Lease under its terms. So long as Tenant is not in default beyond any applicable
cure  period,  Lender  shall  not join  Tenant  as a party  for the  purpose  of
terminating or otherwise  disturbing  Tenant's  interest under the Lease, in any
action of  foreclosure  or other  proceeding  brought by Lender to  enforce  any
rights arising because of any default under a deed of trust,  mortgage or ground
lease. Lender may, however, join~Tenant as a party if joinder is necessary under
any statute or law to secure the remedies  available to Lender under its deed of
trust,  mortgage or ground lease, but joinder shall be for that purpose only and
not for the purpose of  terminating  the Lease or disturbing  Tenant's  right of
possession  of the  Premises.  In the  event any  proceedings  are  brought  for
foreclosure,  or in the event of the  exercise  of the  power of sale  under any
mortgage or deed of trust made by Landlord covering the Premises,  or should the
lease in which Landlord is the lessee be terminated,  Tenant shall attorn to the
purchaser  or lessor under said lease upon any such  foreclosure,  sale or lease
termination  and recognize  such  purchaser or lessor as the landlord under this
Lease,  whether  or not  this  Lease  is  subordinate  to the  interest  of such
mortgage,  deed of trust or lease,  provided  that the purchaser or lessor shall
acquire and accept the Premises subject to this Lease;  provided,  however, that
such lessor's sole obligation to Tenant in the event of such  termination of the
lease in which  Landlord is the lessee shall be to recognize  Tenant's  right to
possession,  and lessor shall have no  affirmative  obligation to perform any of
the obligations of Landlord under this Lease. Without limiting the generality of
the  foregoing  or the  automatic  effectiveness  of such  attornment,  upon the
request of Landlord,  Tenant agrees to execute a written agreement memorializing
its  obligations to so attorn.  Tenant shall, at the option of such purchaser or
lessor, execute a new lease with such purchaser or lessor as landlord, providing
for the same terms and conditions as set forth in this Lease,  for the remaining
term of this Lease.


                                 ARTICLE XXVIII

                              INTENTIONALLY OMITTED


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<PAGE>
                                  ARTICLE XXIX

                   MODIFICATION OF PROJECT/SUBSTITUTE PREMISES

          29.1 Reservation of Right to Modify Project. In addition to the rights
reserved to Landlord in Section 19.5 above,  Landlord  hereby reserves the right
(but not the obligation) to renovate, modernize,  rehabilitate,  expand, reduce,
reconfigure,  enclose and/or  otherwise  alter or. improve all or any portion of
the  Project  (collectively  Modification"),  in such manner and at such time or
times,  throughout  the Lease Term,  as Landlord  may, in its sole and  absolute
discretion,  deem to be in the best interests of the Project. Such Modifications
may include,  without  limitation,  THE right to construct  new buildings in the
Project for additional retail, office, hotel, parking and/or other uses; remove,
demolish,  renovate,  repair, add additional floors and/or ground square footage
to, modernize or otherwise alter the building in which the Premises are situated
as  well  as  other  buildings,   facilities,   structures,   malls,   walkways,
landscaping,  Common  Areas or other areas  within the  Project;  use the Common
Areas or building areas in the Shopping Center as staging areas for construction
within the Shopping Center; change and/or close off customer entrances;  require
removal of exterior  signage;  install temporary and/or permanent columns within
tenants' premises for structural support, utilities, ventilation and/or ducting;
add utility vaults, elevators,  stairways, trash chutes, master and submeters in
the Common  Areas  and/or  tenants'  premises  and  require the  abandonment  of
existing  utility service and connection to new utility  service.  In connection
with any and all such  Modifications,  Landlord  may enter the  Premises  to the
extent   reasonably   required  by  Landlord   to  pursue  and   complete   such
Modifications.  Landlord  reserves  the right to enter the  Premises to erect or
install structural support, drainage devices, pipes, cables, conduit,  plumbing,
vents,  wiring  and all  other  improvements  as  Landlord  deems  necessary  or
appropriate  for such  Modifications.  In addition,  Landlord may temporarily or
permanently close portions of the Common Areas and cause temporary  obstructions
within the Premises and Common Areas in connection with any Modification. Tenant
recognizes  that the  Modifications  that may be made by Landlord in  accordance
with the rights  reserved  in this  Section  29.1 may be  substantial  and cause
disruption  or other harm to Tenant's  business at the Shopping  Center.  Tenant
also  recognizes  that  (a)  Landlord's  interest  in  reserving  its  right  to
substantially  alter and/or improve the Shopping Center without adverse claim by
Tenant, is to provide  flexibility in maintaining and/or enhancing the long term
profitability of the Shopping  Center;  and (b)  Modifications  made pursuant to
this  Section  29.1 could  ultimately  increase  the volume of  customers at the
Shopping  Center,  or  have  other  beneficial  effects  that  could  result  in
increasing  the value of this Lease or Tenant's  business  (although the fact or
amount of such increase is not warranted by Landlord,  nor can it be known until
the Lease runs its course) . Landlord and Tenant  acknowledge that regardless of
any benefit that accrues to Tenant because of a Modification, Tenant will not be
subject to an increase in the Minimum Annual Rent payable  hereunder,  except as
otherwise  provided herein,  and will not be required to participate in the cost
of capital  improvements made in the course of the Modification,  which shall be
borne  solely by  Landlord.  In  recognition  of the  above,  and the  potential
benefits  and  burdens  of such  Modifications,  Tenant  agrees  that  under  no
circumstances  shall the  Modification  of any  portion of the  Project,  or the
construction activity that takes place in the course of making the Modification,
or the manner in which the  Modification  is done, or the time taken to make the
Modification  or  any  aspect  thereof,  including  Landlord's  entry  into  the
Premises,  constitute an eviction,  partial eviction or constructive eviction of
Tenant or a breach of Tenant's right to quiet  enjoyment,  nor entitle Tenant to
damages,  injunctive relief or other equitable relief, nor entitle Tenant to any
abatement or reduction in Minimum


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<PAGE>
                                  ARTICLE XXIX

                   MODIFICATION OF PROJECT/SUBSTITUTE PREMISES

          29.1 Reservation of Right to Modify Project. In addition to the rights
reserved to Landlord in Section 19.5 above,  Landlord  hereby reserves the right
(but not the obligation) to renovate, modernize,  rehabilitate,  expand, reduce,
reconfigure,  enclose and/or  otherwise  alter or. improve all or any portion of
the Project  (collectively  "Modification"),  in such manner and at such time or
times,  throughout  the Lease Term,  as Landlord  may, in its sole and  absolute
discretion,  deem to be in the best interests of the Project. Such Modifications
may include,  without  limitation,  THE right to construct  new buildings in the
Project for additional retail, office, hotel, parking and/or other uses; remove,
demolish,  renovate,  repair, add additional floors and/or ground square footage
to, modernize or otherwise alter the building in which the Premises are situated
as  well  as  other  buildings,   facilities,   structures,   malls,   walkways,
landscaping,  Common  Areas or other areas  within the  Project;  use the Common
Areas or building areas in the Shopping Center as staging areas for construction
within the Shopping Center; change and/or close off customer entrances;  require
removal of exterior  signage;  install temporary and/or permanent columns within
tenants' premises for structural support, utilities, ventilation and/or ducting;
add utility vaults, elevators,  stairways, trash chutes, master and submeters in
the Common  Areas  and/or  tenants'  premises  and  require the  abandonment  of
existing  utility service and connection to new utility  service.  In connection
with any and all such  Modifications,  Landlord  may enter the  Premises  to the
extent   reasonably   required  by  Landlord   to  pursue  and   complete   such
Modifications.  Landlord  reserves  the right to enter the  Premises to erect or
install structural support, drainage devices, pipes, cables, conduit,  plumbing,
vents,  wiring  and all  other  improvements  as  Landlord  deems  necessary  or
appropriate  for such  Modifications.  In addition,  Landlord may temporarily or
permanently close portions of the Common Areas and cause temporary  obstructions
within the Premises and Common Areas in connection with any Modification. Tenant
recognizes  that the  Modifications  that may be made by Landlord in  accordance
with the rights  reserved  in this  Section  29.1 may be  substantial  and cause
disruption  or other harm to Tenant's  business at the Shopping  Center.  Tenant
also  recognizes  that  (a)  Landlord's  interest  in  reserving  its  right  to
substantially  alter and/or improve the Shopping Center without adverse claim by
Tenant, is to provide  flexibility in maintaining and/or enhancing the long term
profitability of the Shopping  Center;  and (b)  Modifications  made pursuant to
this  Section  29.1 could  ultimately  increase  the volume of  customers at the
Shopping  Center,  or  have  other  beneficial  effects  that  could  result  in
increasing  the value of this Lease or Tenant's  business  (although the fact or
amount of such increase is not warranted by Landlord,  nor can it be known until
the Lease runs its course) . Landlord and Tenant  acknowledge that regardless of
any benefit that accrues to Tenant because of a Modification, Tenant will not be
subject to an increase in the Minimum Annual Rent payable  hereunder,  except as
otherwise  provided herein,  and will not be required to participate in the cost
of capital  improvements made in the course of the Modification,  which shall be
borne  solely by  Landlord.  In  recognition  of the  above,  and the  potential
benefits  and  burdens  of such  Modifications,  Tenant  agrees  that  under  no
circumstances  shall the  Modification  of any  portion of the  Project,  or the
construction activity that takes place in the course of making the Modification,
or the manner in which the  Modification  is done, or the time taken to make the
Modification  or  any  aspect  thereof,  including  Landlord's  entry  into  the
Premises,  constitute an eviction,  partial eviction or constructive eviction of
Tenant or a breach of Tenant's right to quiet  enjoyment,  nor entitle Tenant to
damages,  injunctive relief or other equitable relief, nor entitle Tenant to any
abatement or reduction in Minimum


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<PAGE>
Annual  Rent,  Additional  Rent or other  rent,  charges  or sums due under this
Lease.


                                   ARTICLE XXX

                               GENERAL PROVISIONS

         30.1   Lease Interpretation.

                               (a)THE  captions of Articles and Sections of this
                      Lease  are for  convenience  only,  are not a part of this
                      Lease and do not in any way limit or amplify the terms and
                      provisions of this Lease.

                               (b)THE   parties   hereto   agree  that  all  the
                      provisions  hereof are to be construed  as  covenants  and
                      agreements as though the words  importing  such  covenants
                      and  agreements  were  used  in  each  separate  paragraph
                      hereof, and that all of the provisions hereof,  subject to
                      restrictions  on  assignment,  shall bind and inure to the
                      benefit of the parties hereto, and their respective heirs,
                      legal representatives, successors and assigns.

                               (c)It is  agreed  that if any  provision  of this
                      Lease  shall  be  determined  to be void by any  court  of
                      competent jurisdiction,  then such determination shall not
                      affect  any  other  provision  of this  Lease and all such
                      other provisions shall remain in full force and effect. It
                      is  the  intention  of  the  parties  hereto  that  if any
                      provision  of this Lease is capable of two  constructions,
                      one of which would render the provision void and the other
                      of  which  would  render  the  provision  valid,  then the
                      provision shall have the meaning which renders it valid.

                      Cd) It is  understood  that  this  Lease  constitutes  the
                      entire agreement between the parties hereto,  there are no
                      oral agreements  between the parties hereto affecting this
                      Lease,  and this Lease  supersedes and cancels any and all
                      previous negotiations, arrangements, brochures, agreements
                      and understandings,  if any, between the parties hereto or
                      displayed  by  Landlord  to  Tenant  with  respect  to the
                      subject matter  hereof,  and none thereof shall be used to
                      interpret or construe this Lease.

                               (e)THE  laws of the  State  of  California  shall
                      govern the validity,  performance  and enforcement of this
                      Lease.  Landlord and Tenant agree that venue in any action
                      or  proceeding  commenced  between  them will be in Orange
                      County,  California.  This  Lease  shall be  construed  as
                      drafted  jointly by  Landlord  and Tenant and shall not be
                      construed  against or in favor of either party, but rather
                      the meaning of the words used and the expressed  intent of
                      the parties shall control.

          30.2 Consumer Price Index.  For purposes of this Lease,  THE "Consumer
Price Index" shall mean the Consumer  Price Index,  United  States City Average,
All Urban Consumers-All Items, published monthly by the United States Department
of Labor,  in which 1982-64 equals 100. If the Consumer Price Index is no longer
published  at any  applicable  adjustment  date,  it  shall  be  constructed  by
conversion  tables  included  in any new index  published  by the United  States
Department  of Labor with such a  conversion  index  selected  by  Landlord.  If
neither the Consumer Price Index nor conversion tables are published any longer,
then the most widely  published  all  encompassing  index of buying power in the
United States shall be used. If no such index is published, then the most widely
published, all encompassing commodity index for the United States shall be used.
If there is a dispute as to which index is to be used,  then such index shall be
selected by three arbitrators in


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accordance  with the rules of the  American  Arbitration  Association,  and such
determination  shall be final and binding upon the  parties.  If no such indices
are  published,  THE  rent and  charges  to be  increased  under  this  Lease in
accordance  with the Consumer Price Index shall be increased to approximate  the
average  increases  in cost of living in the United  States,  as  determined  by
arbitration  in  the  manner  set  forth  above.  In  any  event,  however,  and
notwithstanding any decrease in such index, no rent or charges payable by Tenant
to Landlord  under this Lease shall at any time be less than that payable during
the immediately preceding calendar year.

          30.3 Notices. Wherever in this Lease it shall be required or permitted
that notice or demand be given or served by either  party to this Lease to or on
the other,  such  notice or demand  shall be given or  served,  and shall not be
deemed to have been duly given or served unless (a) in writing; (b) addressed to
the addresses of the parties specified in Article I, subsection (j) hereof;  and
(c) either (i)  personally  delivered  or delivered  by personal  service;  (ii)
deposited in the United States Postal  Service by certified or registered  mail,
postage  prepaid;   (iii)  sent  by  Federal  Express  or  other  reputable  and
customarily used overnight delivery service,  costs prepaid,  and deposited with
such service prior to the deadline  time for next day delivery;  or (iv) sent by
telecopy,  provided that the original or copy of such notice is forwarded within
one (1) day by one of the methods  specified in the preceding (i) through (iii).
Any notice or demand given shall be  effective on the earlier of actual  receipt
thereof or one (1) day subsequent to transmittal  thereof when given pursuant to
one of the  aforesaid  methods.  Either party may change such address by written
notice by certified or registered mail, return receipt requested,  to the other.
Notices  served  pursuant to this Section 30.3 shall  constitute  service  under
California Code of Civil Procedure Section 1162, equivalent to and additional to
the methods of service provided in said Civil Procedure Code Section.

          30.4 No Partnership. It is agreed that nothing contained in this Lease
shall be deemed or construed as creating a partnership or joint venture  between
Landlord and Tenant or between  Landlord and any other party,  or cause Landlord
to be responsible in any way for the debts or obligations of Tenant or any other
party.  Notwithstanding  any allowance or payment made to Tenant for any purpose
in  connection  with  this  Lease,  Landlord  is not and  shall not be deemed or
construed to be the principal,  owner, participating owner, or agent in the work
performed by, in the business of, or otherwise with Tenant for any purpose.

          30.5 Authority.  In the event Tenant hereunder shall be a corporation,
THE persons executing this Lease on behalf of Tenant hereby covenant and warrant
that (a) Tenant is a duly  qualified  corporation  and all steps have been taken
prior to the date  hereof  to  quality  Tenant  to do  business  in the State of
California;  (b) all franchise and corporate  taxes have been paid to date;  and
(c) all future forms, reports, fees and other documents necessary to comply with
applicable  laws will be filed when due. Upon  request,  Tenant shall deliver to
Landlord  such  corporate  resolutions,   certified  by  the  Secretary  of  the
corporation  and stamped with the corporate  seal,  confirming  the authority of
said corporation to enter into this Lease as Landlord may require.

          30.6 No Oral  Agreements  or  representations.  Landlord  reserves the
absolute  right to  effect  such  other  tenancies  in the  Shopping  Center  as
Landlord, in the exercise of its sole business judgment, shall determine. Tenant
does not  rely on the  fact,  nor does  Landlord  represent,  that any  specific
tenant,  type or types of tenant or uses or number of tenants  shall  during the
Lease Term occupy any space in the Shopping Center or the Project. Tenant has no
right to restrict  Landlord or other tenants or occupants of the Shopping Center
respecting the use of space (other than THE


Fs2\267\064l2~oo31\2l5499o.s nO8I07~95                   -52-

<PAGE>
Premises)  within the Shopping  Center.  THE  designation  of any type of use or
tenancy  with  respect to any  building  site on the  attached  site plan of THE
Project is not intended as a covenant or representation  that said building site
shall be  constructed  or devoted to such a use or tenancy nor shall Landlord be
responsible  or liable to Tenant  should any other tenant or lessee fail to open
or continue to be opened for business  during the Lease Term.  This Lease is and
shall be  considered  to be the only  agreement  between the parties  hereto and
their   representatives   and  agents.  All  negotiations  and  oral  agreements
acceptable to both parties have been merged into and are included herein.  There
are no other  representations or warranties between the parties and all reliance
with  respect  to  representations  is  solely  upon  the   representations  and
agreements  contained in his Lease.  Further,  this lease shall not be modified,
except by written  agreement signed by Landlord and Tenant.  It is the intent of
the  parties  that  neither  can  claim an oral  modification  hereof  under any
circumstances   and  both  warrant  that  they  may  not  rely  on  any  claimed
representation,  oral  modification or other oral term but rather rely solely on
the  written  terms of this Lease,  except as  modified  by a written  agreement
signed by Landlord and Tenant.

          30.7 No  Waiver.  A waiver  of any  breach or  default  shall not be a
waiver of any other  breach or default.  Landlord's  consent to, or approval of,
any act by Tenant requiring  Landlord's  consent or approval shall not be deemed
to  waive  or  render  unnecessary  Landlord's  consent  to or  approval  of any
subsequent  similar act by Tenant.  Landlord's  acceptance of rent or any charge
due under the Lease shall not constitute a waiver of any default by Tenant under
any circumstances.

          30.8  Force  Majeure.  This  Lease  and the  obligations  of Tenant or
Landlord or  hereunder  shall not be affected  or impaired  because  Landlord or
Tenant is unable to fulfill any of their respective  obligations hereunder or is
delayed in doing so, if such  inability  or delay is caused by reason of strike,
labor troubles, acts of God, or any other cause beyond the reasonable control of
Landlord or Tenant (excluding financial inability);  provided, however, that the
timely payment by Tenant of Minimum Annual Rent and all Additional Rent or other
monetary  obligations  hereunder shall not be extended by reason of this Section
30.8. The time during which Landlord or Tenant is required to perform any of its
obligations  under  this  Lease  (excluding  Tenant's  payment  of all  monetary
obligations as described above) shall be extended by reason of any of the causes
described in the preceding sentence.

          30.9 Time of  Essence,  Time is of the  essence of this Lease and each
and all of its provisions in which performance by Tenant is a factor.

          30.10 No Redemption. Tenant hereby expressly waives any and all rights
of  redemption  granted by or under any  present or future  laws in the event of
Tenant being evicted or dispossessed  for any cause, or in the event of Landlord
obtaining possession of the Premises by reason of the violation by Tenant of any
of the covenants and conditions of this Lease or otherwise.  THE rights given to
Landlord  herein are in  addition to any rights that may be given to Landlord by
any statute or otherwise.

          30.11       Joint and Several Obligations.  If there be more than one
party acting as the Tenant hereunder, THE obligations hereunder imposed
shall be the joint and several obligations of such parties.

          30.12 Continuing  Obligations  Notwithstanding  anything  contained in
this Lease to the contrary,  THE  termination  or expiration of this Lease shall
not release  either  party from its  obligations  of  indemnity  hereunder  with
respect to acts occurring  prior to such  termination,  nor Tenant from Tenant's
obligations to remove its personal  property and/or leabehold  improvements from
THE


FS2\267\%4l2~oo3I\2Is499o.5 sfl8/07~95                  - 53 -

<PAGE>
Premises and to repair any damage to the Premises resulting from such removal.

         30.13  Initialing  Failure of Landlord or Tenant to initial any page or
provision  of this Lease  which is stamped or  otherwise  marked for  initialing
shall not,  in and of itself,  affect the  validity  or enforce  ability of this
Lease or the provisions for which initials were omitted.

         IN WITNESS WHEREOF, Landlord and Tenant have made and entered into this
Lease in Orange County, California on the day and year first above written.

     THIS LEASE  SHALL NOT BECOME  EFFECTIVE  UNTIL  EXECUTED  BY  LANDLORD  AND
DELIVERED  TO  TENANT  AND THE  SUBMISSION  OF THIS  FORM OF LEASE TO  TENANT BY
LANDLORD,  OR  LAND-LORD'S  AGENT,  DOES NOT  CONSTITUTE  AN OFFER TO LEASE.  NO
EMPLOYEE OR AGENT OF LANDLORD OR ANY PERSON WITH WHOM TENANT MAY HAVE NEGOTIATED
THIS  LEASE  HAS ANY  AUTHORITY  TO  MODIFY  THE  TERMS  HEREOF  OR TO MAKE  ANY
AGREEMENTS, REPRESENTATIONS, OR PROMISES UNLESS THE SAKE ARE CONTAINED HEREIN OR
ADDED HERETO IN WRITING.

HUGHES RIVERSIDE LTD.,  a California limited
partnership

By      HUGHES INVESTMENTS, a California general
        partnership, General Partner

By      William Hughes, Jr. General Partner
                                                    "Landlord
PLAY CO. TOYS, a Delaware corporation

By
      Thomas M. Davidson, President


By:
      Richard L. Brady
      Executive Vice President

PS2\267\%4I2~oo3~\2l549qo.s a08107195                  - 54 -

<PAGE>
[graphic]
<PAGE>

[graphic]
<PAGE>
                                   EXHIBIT 'C"

                        TENANT'S WORK AND LANDLORD'S WORK


          TENANT'S WORK

     A.  The  work  to be done by  Landlord  in  satisfying  its  obligation  to
construct  Tenant's  store or  provide  the  Premises  under the Lease  shall be
limited to that described  under the heading  Landlord's  Work below.  All other
items of work  necessary to conduct  Tenant's  business on the Premises shall be
provided  by the  Tenant  at  Tenant's  expense  and is  herein  referred  to as
"Tenant's  Work."  Except as to  Landlord's  Work, if any, to be performed as of
commencement  of the Lease  Term,  Tenant  accepts  the  Premises in its present
condition.  Tenant's  Work shall  include,  but not be limited to, the  purchase
and/or  installation  and/or  performance  and/or repair or  replacement  of the
following:

Premises.

     1. All interior partitions and curtain walls within the


     2.  All  Tenant  required  conditioned  air  system  work in the  Premises,
including but not limited to, connection to supply and return lines, generators,
air conditioning  units and/or duct work and any controls or circuitry  required
for the satisfactory operation of said system.

     3. All ceilings.

     4. All floor covering.

     5. All drywall or plaster within Premises including demising partitions.

     6. Internal  communication  systems,  alarm systems, or any fire protection
and alarm systems as may be required by any government agency.

     7. Interior and exterior storefront, store fixtures, and furnishings.

     8. All plumbing  fixtures and  rough-in.  Tenant's  plumbing  contractor to
provide  approved  receptors for  air-conditioning  condensate  drains and water
heater overflow, if any, as required.

     9. Elevators,  dumbwaiters, chutes, conveyors, duct shafts, pneumatic tubes
and their shafts,  doors and other components,  including the electrical hook-up
and service, if any, from the electrical panel to said equipment.

     10. Show window display platforms and window backs.

     11. All interior finish in show windows.

     12.  Tenant's  sign(s) must be installed prior to Tenant being permitted to
open for business.

     13. All Tenant  required  electrical  work  including work from the central
distribution  point,  electrical panels and distribution  within the Premises as
required.

     14.  Tenant  shall be  required  to obtain  all  requisite  approvals  from
governmental  agencies for all work to be performed at the Premises,  except for
work to be performed  exclusively by Landlord.  If Landlord and Tenant share the
responsibility  for  installation  of one or  more  improvements,  it  shall  be
Tenant's  responsibility to prepare the plans and  specifications for and obtain
governmental approval of all such improvements, at Tenant's

                                   EXHIBIT "C
                            TO SHOPPING CENTER LEASE


PS2\223\064I2~oo3l\2l5504a.3 nO8IO7~9S

<PAGE>
sole cost and expense.  Without  limiting the generality of the  foregoing,  (i)
plan check,  building  permits  and sewer  connection  charges  shall be paid by
Tenant;  (ii) Tenant is responsible for all work to cause the Premises to comply
with federal, state, county and city laws, regulations and ordinances, including
without  limitation,  the  American  with  Disabilities  Act;  (iii)  Tenant  is
responsible  for all  Title 24 plans  and  specifications  and for  governmental
approvals  thereof;  (iv) all other City, County and State charges in connection
with any of Tenant's Work or in  connection  with work in the Premises for which
Landlord and Tenant share responsibility,  if any, pursuant to this Lease, shall
be at Tenant's expense; and (v) in the event Landlord constructs any of Tenant's
Work or other tenant  improvements on Tenant's behalf,  Tenant shall prepare the
plans and specifications and obtain all governmental approvals for such work, at
Tenant's  sole  cost  and  expense.  The  design  and  quality  of all  work and
installations  undertaken  by Tenant in the  Premises  shall be  subject  to the
approval of Landlord and of any architect,  employed by Landlord  (collectively,
or as applicable,  the "Project  Consultant")  and in accordance with all County
and State ordinances,  rules and regulations relating thereto, and in accordance
with the Shopping Center Tenant Handbook.

     15.  Removal of all  Tenant  trash and debris to  centrally  located  trash
receptacles  during the work to the Premises and  connection to temporary  power
including all temporary power lines, transformers and electrical distribution.

     16. Tenant shall be responsible  for obtaining all approvals from the local
building and health department, as required.

     17.  During  construction,  Landlord  will allow  Tenant  temporary  use of
existing utilities,  in tenant spaces where available,  consisting of electrical
service and water from the time Tenant's  contractor starts  construction  until
the  utilities  are  transferred  to the  Tenant's  meter.  Tenant's  electrical
subcontractor shall be required to provide ground fault protection for all power
equipment used in the Premises. Tenant shall supply all temporary lighting.

     18. Where  Tenant's  floor finish at storefront  requires use of mall floor
tile, Landlord will furnish mall floor tile at Tenant's expense.

          B. 1. Landlord has provided or will provide to Tenant, on request; (i)
a space  plan  for the  Premises;  (ii)  project  drawings  associated  with the
Premises; (iii) the Shopping Center Tenant Handbook; and (iv) Construction Rules
and Regulations, all of which shall govern Tenant's Work within the Premises.

     2. Within thirty (30) days after the execution of this Lease,  Tenant shall
submit to Landlord four (4) sets of fully detailed working drawings, one (1) set
of  reproducible   working  drawings   covering  all   alterations,   additions,
replacements  or  modifications  to be  made by  Tenant,  at  Tenant's  expense,
together with a description of all items to be repaired,  one (1) set of colored
elevations and/or  photograph of matching  existing  elevation and one (1) color
and material sample board showing all finish materials and colors. Said drawings
shall  provide  for work  consistent  with the  requirements  set  forth in this
Exhibit "C", and the Shopping Center Tenant Handbook and Construction  Rules and
Regulations, as the same may be revised from time to time in Landlord's sole and
absolute  discretion.  Within twenty (20) days of the receipt  thereof  Landlord
shall notify Tenant in writing of any changes  required in said detailed working
drawings for approval by Landlord and by any Project Consultant and Tenant shall
make such required changes before commencing any work. Landlord may exercise its
sole and  absolute  discretion  to require  changes in the working  drawings and
Tenant shall be absolutely required to make


                                       -2-


FS2\223\%4I2~0()3l\2Is5046~3 ao8~o7~9s

<PAGE>
all  such  changes.  Tenant's  Work  shall be  performed  in a  first-class  and
workmanlike  manner in conformity with the working drawings approved by Landlord
and any Project  Consultant.  Only new or like-new  materials shall be used. All
work  shall  conform  to all  applicable  laws  and  ordinances  and  applicable
standards of the National Board of Fire  Underwriters,  the National  Electrical
Code and the American Gas Association.

     3. The Tenant  and/or  Tenant's  representative  is  responsible  for field
verifying all  dimensions  shown on the space plan for the Premises  provided by
Landlord to Tenant before submittal of final drawings.

     4. All of Tenant's  contractors,  subcontractors  and  architects  shall be
licensed in the State of California.

          C. The  requirements  set  forth  below in this  Paragraph  C shall be
Tenant's  obligations  for the  benefit of  Landlord  and,  to the  extent  such
requirements  require  action by or the approval of Tenant's  contractors,  such
requirements shall be incorporated as "Special  Conditions" into the contract(s)
between Tenant and its contractor(s) in a manner  satisfactory to Landlord (with
a copy of the contract(s) to be furnished to Landlord at least fifteen (15) days
prior to the commencement of construction of Tenant's Work)

     1. Prior to start of Tenant's Work,  Tenant shall provide  Landlord with an
estimated completion date for Tenant's Work.

     2. Tenant's contractor shall diligently perform all work in a manner and at
times which do not impede or delay any  contractors of Landlord's  working in or
about the Premises and/or the Shopping  Center.  Any delays in the completion of
any work by Landlord's  contractors  or the  commencement  of the Minimum Annual
Rent and any damage to any work  caused by Tenant's  contractor  shall be at the
sole cost and expense of Tenant.

     3. Tenant's  contractor  shall be responsible  for the repair,  replacement
and/or clean-up of any damage done by it to other  contractors'  work and/or the
Premises or adjacent  properties which specifically  includes  accessways to the
Premises which may be concurrently used by others.

     4.  Tenant's  contractor  shall accept the  Premises  prior to starting any
trenching  operations.  Any rework of subbase or compaction  required  after the
contractor's  initial  acceptance  of the  Premises  shall  be done by  Tenant's
contractor,  which shall  include the removal  from the  Shopping  Center of any
excess dirt or debris.

     5.  Tenant's  contractor  shall  contain its storage of  materials  and its
operations  within the  Premises  and such other  space as it may be assigned by
Landlord.  Tenant hereby waives any claims against Landlord and shall indemnify,
defend  and hold  Landlord  harmless  from and  against  any loss,  liabilities,
damages, claims or expenses,  including attorneys' fees and costs,  attributable
to any damage or loss to materials of Tenant stored within the Shopping  Center.
Should Tenant's  contractor be assigned space outside of the Premises,  it shall
move to such other space as Landlord  shall direct it from time to time to avoid
interference  or delays  with other work or the  conduct  and  operation  of the
businesses within the Shopping Center and/or access thereto.

     6. All trash and surplus construction  materials shall be stored within the
Premises and shall be promptly removed from the Shopping Center.

     7 Tenant's  contractor shall notify Landlord or Landlord's  Shopping Center
general  manager of any planned  work to be done on other than normal  operating
hours of the Shopping Center.


                                       -3-


FS2\223\%4I2~Oo3I\2l55()46~3 aOSIOlIQS

<PAGE>
     8. Tenant and Tenant's  contractor are  responsible for compliance with all
applicable  codes  and  regulations  of  duly  constituted   authorities  having
jurisdiction  insofar as the performance of the work and completed  improvements
are concerned for all work  performed by Tenant or Tenant's  contractor  and all
applicable safety  regulations  established by Landlord for the Shopping Center,
and Tenant  further  agrees to save and hold Landlord  harmless for said work as
provided  in Article X of this Lease.  Prior to  commencement  of  construction,
Tenant shall  submit to Landlord  evidence of insurance as required by Article X
of this Lease and this Exhibit "C"

     9.  During  construction  the  Premises  shall  be  enclosed  by a  drywall
enclosure in a form  approved by  Landlord,  separating  the  Premises  from the
balance of the  Shopping  Center  and any mall.  The  enclosure  shall be taped,
sanded,  painted and decorated in a form  satisfactory  to Landlord so as not to
detract from the Shopping  Center or the mall in which the Premises are located.
Upon Landlord's  direction,  Tenant shall use Landlord's  painting contractor to
paint Shopping Center graphics or logos on said enclosures

     10. Tenant's contractor or subcontractors  shall not post signs on any part
of the Shopping Center or on the Premises.

     11.  Following  completion,   Tenant  shall  provide  Landlord  with  final
unconditional lien waivers from Tenant's general contractor, subcontractors, and
material suppliers.

     12. Tenant shall be responsible for and shall obtain and record a Notice of
Completion  promptly  following  completion of Tenant's Work, and shall promptly
forward a copy to  Landlord.  Tenant's  Work shall be deemed  complete as of the
date of issuance of Tenant's Certificate of Occupancy.

          D. Tenant's Work shall be coordinated under Landlord's  direction with
the work  being done or to be  performed  by  Landlord  and/or  other  owners or
tenants in the Shopping  Center so that Tenant's Work will not interfere with or
delay the completion of any other  construction work in the Shopping Center, and
Tenant shall cause its  contractors  to  coordinate  Tenant's Work with any such
other work with Landlord or, at Landlord's direction, with Landlord's contractor
or the Project Consultants.

     E. Tenant's  contractors and subcontractors shall be required to remove and
dispose of, at least once a week or more frequently as Landlord may direct,  all
debris and  rubbish  caused by or  resulting  from the  construction  and,  upon
completion of Tenant's Work, remove all temporary structures, surplus materials,
debris and  rubbish of whatever  kind  remaining  in the  building or within the
Shopping  Center  which had been  brought in or created by the  contractors  and
subcontractors  in the  construction  of Tenant's Work. If any  contractors  and
subcontractors  shall  neglect,  refuse,  or fail to  remove  any  such  debris,
rubbish,  surplus  material  or  temporary  structures  within one (1) day after
notice to Tenant from Landlord with respect thereto, Landlord may cause the same
to be removed by contract or otherwise as Landlord may determine expedient,  and
charge the cost thereof to such contractor or subcontractor and/or to Tenant.

          F.  All  of  Tenant's   contractors  and  subcontractors  shall  carry
Workmen's  Compensation Insurance covering all of their respective employees and
shall also carry public liability insurance,  including property damage, and the
policies  therefor  shall name  Landlord and Tenant as  additional  insureds and
shall  identify  the  address of the  Premises  and the  location of the work of
construction. Certificates for all of the foregoing insurance shall be delivered
to Landlord  before  construction  of Tenant's  Work is started or  contractor's
equipment  is moved onto the site.  Tenant  shall cause to be carried  insurance
against damage by fire



                                       -4-


FS2\223\064I2~oo3l\2lss046.3 aOS/07195

<PAGE>
to the construction and improvements to be made by Tenant. Certificates for such
insurance shall be delivered to Landlord  before the  construction is started or
contractor's  equipment  is moved onto the site.  In the event  that  during the
course  of  Tenant's  Work  any  damage  shall  occur  to the  construction  and
improvements  being made by Tenant,  Tenant  shall  repair the same at  Tenant's
cost.

          G. Any alterations  and/or additions and  reinforcements to Landlord's
structure required to accommodate Tenant's Work shall be Tenant's responsibility
and shall be subject to the prior written  approval of Landlord and ~any Project
Consultant. Except as provided in Section 11.1(b), there shall be no penetration
of the roof or installation of radio and television  antennas  without the prior
written approval of both Landlord and any Project  Consultant.  Any and all roof
penetrations  required by Tenant and so  approved  by  Landlord  and any Project
Consultant shall be at Tenant's expense and shall be engineered and installed in
a  manner  approved  by  Landlord  and any  Project  Consultant.  All  flashing,
counter-flashing   and  roofing   repairs  shall   conform  to  the   reasonable
requirements of Landlord and any Project  Consultant and such work shall be paid
for by Tenant and performed by a roofing subcontractor approved by Landlord.

          H. Carpeting and/or other quality floor  coverings,  such as glazed or
unglazed  pavers or wood parquet  shall be used for flooring in Tenant's  public
areas. A hard washable floor surface (i.e., marble, tile or like material) shall
extend a minimum of twelve inches (12") beyond the  storefront  grill toward the
interior of the Premises. Vinyl asbestos tile is prohibited.  Flooring and store
front  entry  areas  shall be  identical  in  quality,  color and pattern to the
flooring  material used or to be used by Landlord in the adjacent  enclosed mall
area,  or such other  durable  materials as may be approved by Landlord and must
match the plans of the existing mall floor.

          I. Except as otherwise set forth in Tenant's plans and  specifications
approved by Landlord:  (i) all  fluorescent  fixtures in Tenant's  public areas,
other than decorative  fixtures,  shall be recessed and installed with parabolic
or parawedge  shielding;  (ii) Fluorescent  fixtures with acrylic lenses are not
permitted; and (iii) Bare lamp, fluorescent or incandescent fixtures may be used
only in concealed areas and/or  stockrooms.  Particular note is made that Tenant
shall  comply  with Title 24 of the Energy  Conservation  Design  Manual for New
Non-Residential Buildings.

          J. Landlord's approval of Tenant's working drawings and/or preliminary
drawings  shall not be deemed to  constitute  approval as to  compliance of such
drawings with governmental laws, ordinances,  orders, rules,  regulations and/or
requirements,  as to "as-built" conditions, as to unknown underground work or as
to structural integrity or suitability for Tenant's intended purposes.

          K. Landlord may cause Tenant's  working  drawings and all corrections,
additions,  modifications, or alterations thereto to be processed by one or more
of  the  Project  Consultants,   at  Landlord  expense.  All  such  corrections,
additions,  modifications,  or  alterations  shall be subject to the approval of
Landlord and of any Project Consultant.

II.  LANDLORD'S WORK

          EXCEPT  AS MAY BE  OTHERWISE  SPECIFICALLY  SET FORTH IN  PARAGRAPH  E
BELOW,  LANDLORD  SHALL DELIVER THE PREMISES TO TENANT IN AN "AS-IS"  CONDITION.
THE  FOLLOWING   DESCRIPTION  OF  LANDLORD'S   WORK  SHALL  APPLY  ONLY  TO  THE
RECONSTRUCTION  OF THE PREMISES  PURSUANT TO SECTION 18.3 IN THE EVENT OF DAMAGE
OR DESTRUCTION.





                                                                    .5-


Fs2\223\064l2a~oo3l\2I55()46.3 noR~07I9s

<PAGE>
          A. Landlord agrees that it will, at its own cost and expense,  subject
to the provisions of this Exhibit "C",  commence and complete the work specified
in Paragraph B below.  Landlord  shall not be liable for any delay or failure to
complete Landlord's Work and Tenant's remedy for any such delay or failure shall
be limited to the right of termination provided in Section 4.5 of this Lease. It
is expressly understood and agreed that the building of which the Premises are a
part shall constitute a portion of a larger building.

          B. Landlord shall, at Landlord's expense, and in accordance with plans
and  specifications  prepared by Landlord according to Landlord's design, do the
following work on the Premises prior to the commencement of the Lease Term:

                   1.       Complete the structure of the Premises as follows:

     (i)The building in which Tenant's Premises are located shall be designed by
the Project Consultants. Construction shall not be less than V-N and sprinklered
in accordance  with NFPA  requirements,  the current  applicable  edition of the
Uniform Building Code, and requirements of the City in which the Shopping Center
is located.

     (ii)Although the demising partitions may be on the column center lines, the
column being  thicker than the wall,  extends  slightly  into the  Premises.  No
deduction  is allowed  from the Floor Area of the Premises by reason of columns,
sprinkler  risers,  roof drains,  structural  braces,  sheer walls and braces of
air-conditioning  units  exclusively  serving  Tenant  and  located  within  the
Premises. Tenant acknowledges that it may be necessary for Landlord to utilize a
portion of the Premises to  accommodate  shafts,  ducts and pipes to serve other
tenants and  Landlord  reserves the right to utilize an area within the Premises
for said purpose.

     (iii)  Exterior trim and other  exterior work normally  requiring  painting
shall be painted.

     (iv) Normal rear service door (excluding  panic hardware) shall be provided
as required by the Building Code where the Shopping Center is situated.

     (v)Exterior  walls shall be of metal stud and masonry  veneer or such other
material or materials as are selected by the Project Consultant.

     (vi) Where desirable in Landlord's  opinion,  a vertical neutral strip will
be located at the storefront area between stores.  The center line of said strip
shall coincide with the lease line defining the Premises.

     2.  Landlord will perform  interior  finish work,  construct  sidewalks and
provide utilities by Landlord as follows:

     (i)Concrete  floor  slabs  within the  interior of the  Premises  and in an
entrance way shall be  substantially  in a smooth  concrete  finish.  Such floor
shall be on a single level. At Landlord's option, the floor may be sloped.

     (ii)At  Landlord's  option  demising  partitions of unfinished  metal studs
twenty-four  inch (24") on center and to a height of at least  twelve feet (12')
will be provided.  Where demising partitions fall on structural column lines, at
structural braces or structural expansion joints,  projections may occur at such
locations.

     (iii)  Sidewalks  adjacent to the Premises  shall be concrete or such other
suitable material selected by Landlord.




                                                                    -6-


Fs2\223\064I2~oo3i\2I55~6.3 aO3~97I95

<PAGE>
     (iv) Utilities shall be provided by Landlord as follows:


     (1)Water service and sewer laterals shall be brought to the Premises.

     (2)Exterior  fire hydrants and standpipes shall be installed as required by
Building Code where the Shopping Center is situated.

     (3)The  automatic  sprinkler  systems shall be installed in accordance with
Landlord's  standard grid pattern which shall include one (1) sprinkler head per
one hundred  thirty  (130)  square feet of Floor Area within the  Premises for a
ceiling height of twelve feet (12').  Any sprinkler  heads which are required to
be relocated or are  required in addition to this amount to meet  Building  Code
approval   and/or  which  are  required  due  to   irregularities   of  Tenant's
partitioning  and/or  ceiling  design  shall be paid for by Tenant  pursuant  to
Paragraph D below.

     (4)Heating  and cooling  equipment  serving the Floor Area in the  Premises
shall  be  capable  of  automatically   maintaining  an  even  inside  dry  bulb
temperature of seventy degrees (70) Fahrenheit with outside dry bulb temperature
of twenty-nine  degrees (29) Fahrenheit for heating and the cooling system shall
be capable of automatically maintaining seventy-five degrees (75) Fahrenheit dry
bulb  and  fifty  percent  (50-~~)  humidity  inside   conditions  with  outside
conditions of  ninety-three  degrees (93)  Fahrenheit  dry bulb and  sixty-eight
degrees (68) Fahrenheit wet bulb controlled. Such equipment shall be designed to
handle a  maximum  3.85  watts per  square  foot of the Floor  Area  within  the
Premises.

     (5)Landlord  shall  provide  electrical  service to a central  distribution
point for all tenants.

     (6)The main electrical  switch at the main  distribution  point,  the empty
conduit for main  electrical  service and  telephone  conduit from  distribution
points to Tenant's Premises shall be provided.

     (7)A point of  connection  for the toilet room  plumbing vent pipe shall be
provided.

     (8)Natural  gas (if available)  will be provided at a central  distribution
point and Tenant shall  provide for gas piping to the Premises.  Tenant,  at its
expense, shall arrange for a gas meter with the local utility company.

                   As to all building  materials and equipment which Landlord is
obligated to supply under this  description of Landlord's  Work,  Landlord shall
select the manufacturer thereof.  Where two (2) types of materials or structures
are indicted, the option to select either will be with Landlord.  Landlord shall
complete Landlord's Work according to Landlord's design criteria.  Landlord may,
but is not  required  to,  conform  Landlord's  Work to  Tenant's  architectural
drawings but instead has obligated  itself to provide only  Landlord's  standard
improvements according to Landlord's design.

     C.  As  of  commencement  of  the  Lease  Term,   Landlord  shall  have  no
responsibility for any work to the Project, the Shopping Center, the Premises or
the building of which the Premises are part.

     D.  Notwithstanding  anything to the contrary  contained in this Part II of
Exhibit  "C",  Landlord  agrees  that the heating  and  air-conditioning  system
serving the Premises shall be in working


                                                                    -7-


Fs2\223\%4I2~oo3I\2I55046.3 aO8I07~95

<PAGE>
order and the roof of the building  containing  the Premises  shall be tree from
leaks  during the first six (6)  months of the Lease  Term.  Landlord  agrees to
repair the HVAC system and fix any roof leaks not necessitated by the actions or
inactions of Tenant provided Tenant notifies Landlord of the necessity  therefor
within the first six (6) months of the Lease Term.
































Fs2\223\064I2~oo31\2l55(}46.3 a08107/9S

<PAGE>
                                   EXHIBIT "D"

                              TENANT'S CERTIFICATE
                          STATEMENT OF TENANT RE LEASE


                                                                           Date:
                                                                    Re: Address:
                                                                              19

                                                                For Premises in:
                                                                 Riverside Plaza
                                                           Riverside, California

Gentlemen:

     The undersigned,  as Tenant under that certain Lease dated  _______________
19 , made and entered into between HUGHES/RIVERSIDE,  LTD., a California limited
partnership,  as Landlord,  and the  undersigned,  as Tenant  ("Lease"),  hereby
ratifies  the Lease and  certifies  that (a) the  undersigned  has entered  into
occupancy  and accepted  possession  of the  Premises  described in the Lease on
______________  19___;  (b) the Minimum  Annual  Rent in the  monthly  amount of
$_______________ was payable from 19 ; (c) the Lease is in full force and effect
and has not been assigned, modified,  supplemented or amended in any way (except
by __________________________ [if none, so state) ; (d) the Lease Term commenced
on  _______________ 19 , ends on _______________ 19 (e) the Lease represents the
entire  agreement  between the parties as to this leasing and the Premises;  (f)
all conditions  under the Lease to be performed by Landlord have been satisfied,
all  required  contributions  by  Landlord  to Tenant  on  account  of  Tenant's
improvements have been received, and on this date there are no existing defenses
or offsets which the undersigned has against the enforcement of the Lease by the
Landlord;  (g)  Landlord  is not in  default  under  the  Lease and no event has
occurred  which,  with the giving of notice  and/or the  passage of time,  would
constitute a default;  (h) Tenant is not in default under the Lease and no event
has  occurred  which,  with the giving of notice or the  passage of time,  would
constitute a default; (i) rental has (has not) been paid in advance and security
in the sum of  $____________  has  been  deposited  with  Landlord;  and (j) the
Minimum Annual Rent for _____________ 19 has been paid.



                                                               Very truly yours,




                                                                             By:
                                                                            Its:

















                                   EXHIBIT "D
                            TO SHOPPING CENTER LEASE


FS2\223\O64l2~003I\2Issoso.l a08107195

<PAGE>
                                   EXHIBIT "E"

                                  SIGN CRITERIA


          These  criteria have been  established  for the purpose of securing an
outstanding  shopping  center  and  for  the  mutual  benefit  of  all  tenants.
Conformance  will be  strictly  enforced  and any  installed  non-confirming  or
unapproved signs must be brought into conformance at the expense of Tenant.

A.   GENERAL requirements.

     1. All permits for signs and their installation shall be obtained by Tenant
or its representative.

     2. All signs shall be constructed and installed at Tenant's expense.

     3. Tenant shall be responsible for the  fulfillment of all  requirements of
these  criteria,  and shall  submit  samples of sign  material if  requested  by
Landlord.

B.   GENERAL SPECIFICATIONS.

     1. No animated, flashing or audible signs will be permitted.

     2. No exposed lamps or tubing will be permitted.

     3. All signs shall bear the UL label, and their  installation  shall comply
with all local building and electrical codes.

     4. No exposed raceways, crossovers or conduits will be permitted.

     5. All cabinets,  conductors,  transformers  and other  equipment  shall be
concealed. Visible fasteners will not be permitted.

     6. Electrical service to all signs shall be on Tenant's

     7. Painted lettering will not be permitted,  except as specified under F.2.
of this Exhibit "E".

C.        LOCATION OF SIGNS.

     1.  Tenant's  signs shall not be  permitted on the exterior of the enclosed
mall.

     2. Tenant will be  permitted  to install  one (1)  illuminated  sign on the
enclosed mall storefront The maximum projection of the sign from the face of the
storefront  shall  be six  inches  (6") or to the face of the  adjacent  neutral
strip, whichever is greater.

     3. If any signs perpendicular to the face of the building or storefront are
permitted,  they will be located  within the "blade sign area" as  designated by
Landlord. If no "blade sign area" is designated,  then no signs perpendicular to
the face of the building or storefront will be permitted.

D.   DESIGN REQUIREMENTS.

     1. All Tenant  storefront  entrance/store  identification  designs shall be
subject to the  approval of  Landlord.  Imaginative  designs  which  depart from
traditional methods and placement will be encouraged.



                                   EXHIBIT "E
                            TO SHOPPING CENTER LEASE


FS2\267\%412({0031\2155053. I nOSIU?195

<PAGE>
     2.  Wording of signs shall not  include the product  sold except as part of
Tenant's trade name, insignia or logo.

     3. Tenants  facing the mall shall have  identification  signs designed in a
manner   compatible   with  and   complementary   to  any  adjacent  and  facing
three-dimensional  popout  storefronts and Landlord's overall design concept for
an enclosed mall.

     4. Tenants are encouraged to have signs designed as an integral part of the
storefront  design  with  letter  size and  location  appropriately  scaled  and
proportioned  to the  overall  storefront  design.  The  design  of  all  signs,
including style and placement of lettering, size, color, materials and method of
illumination shall be subject to the approval of Landlord.

     5. Signs designed in the more traditional manner with the lettering applied
to a background  surface  that is part of the  storefront  shall  conform to the
following requirements:

                            (a)The sign area shall not exceed five  percent (5%)
                   of the area of the  storefront  or twelve (12)  square  feet,
                   whichever is larger and shall be located at least  thirty-six
                   inches (36") from each lease line. Sign area will be measured
                   by  circumscribing  a  rectangle  around the main body of the
                   sign.

                            (b)The  overall  length of the sign shall not exceed
                   two-thirds  (2/3)  of the  width of the  storefront  exposure
                   between neutral strips.

                            (c)The maximum height for letters in the body of the
                   signs is  fourteen  inches  (14").  The  maximum  height  for
                   initial capitals is eighteen inches (18").

     6. Signs shall be  composed  of  individual  or script  letter.  Signs with
background panels shall be designed in a manner compatible with the storefront.

     7. Sign boxes and cans will not be permitted.

     8. All mall  storefront  signs  including  acrylic  plastic  signs shall be
fabricated of material with a matte finish.

     9. Acrycap retainers used at the perimeter of sign letter faces shall match
in color and finish the face or the sides of the sign.

E.   CONSTRUCTION REQUIREMENTS.


     1. All exterior  signs,  bolts  fastenings  and clips shall be of enameling
iron with porcelain enamel, stainless steel, aluminum, brass or bronze. No black
iron materials of any type will be permitted.

     2.  Interior  enclosed  mall front signs only may be  fabricated  of carbon
bearing steel with painted finish.

     3. All exterior letters or signs exposed to the weather shall be mounted at
least  three-quarters  inch (3/4") from the building  wall to permit proper dirt
and water drainage.  Non-corrosive  spacers shall be used to prevent rust damage
to the building.

     4. All letters shall be fabricated using full-welded construction.

     5.  Location  of all  openings  for  conduit  and sleeves in sign panels of
building walls shall be indicated by the sign  contractor on drawings  submitted
to and approved by Landlord.


                                       -2-


FS2\267\%4I2~oo3I\2I55o53. I a08107195

<PAGE>
     6.  All   penetrations  of  the  building   structure   required  for  sign
installation  shall be neatly sealed in a watertight  manner as inspected by and
approved by Landlord.

     7. No sign company labels will be permitted on the exposed surface of signs
except  those  required  by  local  ordinance  which  shall  be  applied  in  an
inconspicuous location.

     8. Tenant,  or its sign contractor,  shall be responsible for the repair of
damage to the building caused by the installation of Tenant's sign.

     9. Tenant shall be fully  responsible  for the  operations of Tenant's sign
contractors.

     10. Threaded rods or anchor bolts shall be used to mount sign letters which
are spaced out from background panels. Angle clips attached to letter sides will
not be permitted.

F.   MISCELLANEOUS REQUIREMENTS.

          1.  Tenant  will be  permitted  to place  upon  each  entrance  of its
Premises not more than one hundred  forty-four  (144) square inches of gold leaf
or  decal  application  lettering  not to  exceed  two  inches  (2") in  height,
indicating hours of business, emergency telephone numbers, etc.

          2. If Tenant has a non-customer door for receiving merchandise, it may
have  uniformly  applied on said door in location,  as directed by Landlord,  in
two-inch (2") high block letters, the Tenant's name and address. Where more than
one Cl) tenant uses the same door, each name and address shall be applied. Color
of letters will be as selected by Landlord.

          3. Tenant may install on its enclosed mall storefront,  if required by
the U.S. Post Office, the numbers only from the street address in exact location
stipulated by Landlord.  Size,  type and color of numbers shall be as stipulated
by Landlord.

          4. Floor signs such as inserts into terrazzo, etc., shall be permitted
within Tenant's lease line in the storefront, if approved by Landlord.

          5.  Except as  provided  herein,  no  advertising  placards,  banners,
pennants,  names, insignia,  trademarks,  or other descriptive material shall be
affixed or maintained  upon the glass panes and supports of the show windows and
doors, or upon the exterior walls of the building or storefront.

G.   FOOD COURT.

          Anything to the contrary  notwithstanding  herein, the size and design
of all tenant storefronts, signs, and menu boards, located within the Food Court
shall be subject to the  approval of  Landlord.  Landlord  reserves the right to
require that colored canvas canopies be required on storefronts  within the Food
Court. In such event,  all signs shall be either painted,  silk screened or sewn
onto said  canopies.  The size and design of such signs shall be  appropriate to
the size and style of each such canopy and both the canopy and the sign  thereon
shall be subject to  Landlord's  approval.  If colored  canvas  canopies are not
required  then Tenant shall  conform its  storefront  to  Landlord's  storefront
design criteria.  In addition,  Tenant shall conform all interior,  exterior and
menu boards to Landlord's design criteria.

H.   EXTERIOR STOREFRONTS.

          Anything to the contrary  notwithstanding  herein, the size and design
of all tenant  storefronts  located on the exterior of the Shopping Center shall
be subject to the approval of Landlord.


                                                                    -3-


FS2~267\064I2~oo3I\2l55o53. I aOsf07~95
<PAGE>
I.        MALL ENCLOSURE.


          If the mall  adjacent  to the  Premises  is not  enclosed  on the date
Tenant opens for  business  from the  Premises,  Tenant's  exterior  sign on the
storefront of the Premises  shall either  satisfy the criteria set forth in this
Exhibit "E" or shall otherwise be satisfactory to Landlord.  Landlord shall have
the right to remove any such sign in connection with Landlord's enclosure of the
mall,  if any, if such removal is reasonably  required in  connection  with such
work.  In such event,  Tenant shall store and/or  otherwise  dispose of any such
removed sign and promptly  replace same with a new sign consistent with drawings
approved by Landlord under Section 13.1 of this Lease and the criteria set forth
in this Exhibit "B" (or  reinstall the removed sign if such  reinstallation  has
been approved by Landlord and such sign satisfies the criteria set forth in this
Exhibit "E~)

J.       TENANT'S SIGN SPECIFICATIONS.

          Notwithstanding  anything to the  contrary  contained  in this Exhibit
"E", Landlord agrees that, subject to approval by the City of Riverside,  Tenant
may  install  thirty-six  (36) inch  letters on its  exterior  sign and may also
install an exterior sign on the north facing side of the building containing the
Premises with thirty-six (36) inch letters. Furthermore,  subject to the City of
Riverside's  approval,  Landlord  approves  the Tenant's  sign exhibit  attached
hereto as "Schedule 1" to this Exhibit "E".



















FS2\267\O64l2~oo3I\2I55o5a. I nOS~O?~95

<PAGE>
                                    Exhibit E

                                   Schedule 1


     Tenant shall be allowed to use his logo as shown in all signing.

     Sign  shall  be  Pan  Channel  letter,   5"  returns   (metal)   internally
illuminated.  Colors shall be fl313E Dark Bronze on metal returns,  #2793 Red on
Plea Face and shall have 3/4" Cold Trim Cap.

     Colors of sign with landlord  approval,  may to changed to best  illustrate
Tenant's logo and best fit with exterior colors of building.

     Size of individual  letter shall be as large as legally allowed,  but shall
not exceed 36" in height and shall be bound by Paragraph "LI', of Exhibit "E".











                                   [Graphic]





FS2\267\O64l2~oo3I\2I55o5a. I nOS~O?~95



<PAGE>



                                      10.77

                    Lease Agreement for Store-Santa Clarita.


<PAGE>
                                      LEASE




                                     between


                            CANYON COUNTRY PLAZA L.P.
                        a California limited partnership,

                                    Landlord


                                       and


                      PLAY CO. TOYS CANYON COUNTRY, INC.,
                             a Delaware corporation,

                                     Tenant




                              CANYON COUNTRY PLAZA
                            Santa Clarita, California



                         Effective Date: August 29,1996



<PAGE>



                               TABLE OF CONTENTS
                                                                              1
ARTICLE  I
FUNDAMENTAL LEASE TERMS                                                1
      Effective Date                                                   1
      Shopping  Center                                                 1
      Premises                                                         1
      Landlord                                                         1
      Tenant                                                           1
      Tenant's Contractor                                              1
      Brokers                                                          1
      Lease Term                                                       2
      Option Terms                                                     2
      Base Rent                                                        2
      Percentage Rent                                                  2
      Base  Sales                                                      2
      Minimum Sales                                                    2
      1996 Budgeted Common Area Costs                                  2
      Tenant' s  Share                                                 2
      Building GLA                                                     2
      Shopping Center GLA                                              2
      Construction Allowance                                           2
      Estimated Delivery Date                                          2

  ARTICLE  II
  DEFINITIONS                                                          2
        Additional Rent                                                2
        Adjustment Date                                                3
        Adjustment Index                                               3
        Affiliate                                                      3
        Agreed Rate                                                    3
        Base Rent                                                      3
        Base  Sale                                                     3
        Beginning Index                                                3
        Brokers                                                        3
        Building                                                       3
        Capital Expenditures                                           3
        City                                                           3
        Common Area                                                    3
        Common Area  Costs                                             4
        Competing Business                                             4
        Construction Allowance                                         4
        Control                                                        4
        County                                                         4
        Default                                                        4


<PAGE>
        Delivery Date                                                  4
        Effective Date                                                 4
        Estimated Delivery Date                                        4
        FF&E                                                           5
        Force Majeure                                                  5
        Governmental Restrictions                                      5
        Gross Sales                                                    5

     HVAC  System      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  6
     Hazardous  Substance      .  .  .  .  .  .  .  .  .  .  .  .  .  .6
     Hazardous Substances Laws  . . . . . . . . . . . . . . .          6
     Improvements  .  .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  6
     Index     .  .  .  .  .  .  .   .  .  .  .  .  .  .  .  .  .  .  .7
     Insurance  Costs           .  .   .  .  .  .  .  .  .  .  .  .  . 7
     Landlord  .  .  .  .       .  .   .  .  .  .  .  .  .  .  .  .  . 7
     Landlord' s Work           .  .   .  .  .  .  .  .  .  .  .  .  . 7
     Lease     .  .  .  .  .    .  .   .  .  .  .  .  .  .  .  .  .  . 7
     Lease Terza  .  .  .       .  .   .  .  .  .  .  .  .  .  .  .  . 7
     Lease Year  .  .                  .  .  .  .  .  .  .  .  .  .  . 7
     Losses  and  Liabilities  .  .  .  .  .  .  .  .  .  .  .  .  .  .7
     Minimum Sales      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
     Mortgage  .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8 .  .
     Mortgagee       .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8 .  .  .
     Notice  .  .    .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8 .  .  .
     Notice  of  Default     .  .  .  .  .  .  .  .  .  .  .  .  .  ,  8
     Objectionable Use      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8 .
     Option Term      .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  8
     Parking Lot      .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  8  .  .
     Party     .  .  .   .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  8.  .  .
     Parties        .  .   .  .  .   .  .  .  .  .  .  .  .  .  .  .  .8.  .  .
     Percentage Rent               .   .  .  .  .  .  .  .  .  .  .  . 8,  ,  ,
     Permittee             .  .  .   .   .  .  .  .  .  .  .  .  .  .  8  .  .
     Person  .  .          .  .  .   .   .  .  .  .  .  .  .  .  .  .  8
     Premises  .           .  .  .   .   .  .  .  .  .  .  .  .  .  .  8 .
     Real  Estate Taxes                  .  .  .  .  .  .  .  .  .  .  9  .
     Reasonable Approval       .  .  .  .  ,  .  .  .  .  .  .  .  .  .9
     Remedial  Work     .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .9 .  .
     Rent . . . . . . . . . . . . . . . . . . . . . . . . . .          9
     Rent  Commencement  Date  .  .  .  .  .  .  .  .  .  .  .  .  .  .9
     Representatives      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  9  .
     Restricted Use  .    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  9  .
     Shopping Center      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  9  .
     Site  Plan   .  .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .9 .  .
     Subordination, Non-disturbance and Attornment Agreement .         10
     Tenant  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .10.  .
     Tenant's Contractor  . . . . . . . . . . . . .. . . . .           10
     Tenant's  Share  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .10.
     Tenant' s Work    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10 .
     Uncured Default      .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10 .
     Work Letter     .  .   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .10,  .

ARTICLE III
DEMISE OF PREMISES        .   .  .  .  .  .  .  .  .  .  .  .  .  .  , 10
<PAGE>
      3.1    Premises     .   .  .  .  .  .  .  .  .  .  .  ,  ,  ,  , 10  .  .
      3.2    Improvements  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10
      3.3    Building|^|  .  .  .  .  .  |^|  .  .  .  .  .  ,  ,  ,  .10,  .  .
      3.4    Shopping|^|  Center      .  .  .  .  .  .  .  .  .  .  .  11

ARTICLE IV
LEASE TERM     .  .  .  .  .  .  .  .   .  .  .  .  .  .  .  .  .  .  .11.  .  .
     4.1    Lease  Term  .  .  .       .  .  .  .  .  .  .  .  .  .  . 11.  .  .
     4.2    Option Terms  .         .    .  .  .  .  .  .  .  .  .  .  11 .
     4.3    Early Lease Termination; Release . . . . . . . . .         12

ARTICLE V
RENT   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .12.  .  .
      5.1   Base Rent         .  .  .  .  .  .  .  .  .  .  .  .  .  . 12  .
      5.2   Consumer Price Index Increases . . . . . . . . . .         13
      5.3   Percentage Rent        .  .  .   .  .  .  .  .  .  .  .  . 13
      5.4   Late Charge; Interest; Miscellaneous . . . . . . .         14

ARTICLE VI
TAXES  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .14.  .  .
      6.1   Real  Estate Taxes        .  .  .  .  .  .  .  .  .  .  .  14
      6.2   Personal Property Taxes  . . . . . . . . . . . . .         16
      6.3   Proration  of  Taxes  .  .  .  .  .  .  .  .  .  .  .  .  .16

ARTICLE VII
COMMON AREA  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .17
      7.1    Changes  in Common Area  .  .  .  .  .  .  .  .  .  .  .  17
      7.2    Use  of  Common Area  .  .  .  .  .  .  .  .  .  .  .  .  17
      7.3    Operation and Maintenance of Common Area . . . . .        17
      7.4    Common Area  Costs       .  .  .  .  .  .  .  .  .  .  .  18
      7.5    Payment     .  .  .  .  .   .  .  .  .  .  .  .  .  .  .  19 .  .
      7.6    Rules  and Regulations        .  .  .  .  .  .  .  .  .  .19
      7.7    Additional  Land        .  .  .   .  .  .  .  .  .  .  .  20

ARTICLE VIII
UTILITIES  .  .  .  .  .  .  .  .  .   .  .  .   .  .  .  .  .  .  .  .20.  .  .
      8.1    Utilities Usage           .  .  .   .  .  .  .  .  .  .  .20.  .  .
      8.2    Utilities Repair          .  .  .   .  .  .  .  .  .  .  .20.  .  .

ARTICLE IX
USE; EXCLUSIVES; ASSIGNMENT AND SUBLEASE  . . . . .                    21
      9 .1   Use    .  .  .  .  .  .   .  .  .  .  .  .  .  .  .  .  . 21  .  .
      9.2    Exclusives  .  .  .       .  .  .  .  .  .  .  .  .  .  . 21  .  .
      9.3    Objectionable Uses . . . . . . . . . . . . . . . .        22
      9.4    Compliance with Governmental Restrictions  . . . .        23
      9.5    Assignment and Subletting  . . . . . . . . . . . .        24
      9.6    Business Operation . . . . . . . . . . . . . . . .        25
      9.7    Non-competition  .  .  .  .  .  .  .  .  .  .  .  .  .  . 25

ARTICLE X
MAINTENANCE AND REPAIRS  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .   25
      10.1  Landlord Re|^|airs  .  .  .  .  .  .  .  .  .  .  .  .  .  25
      10.2  Tenant Repairs  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .26

<PAGE>
      10.3  Alterations and Construction . . . . . . . . . . .         27
      10.4   Fixtures  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  27 
      10.5   Liens   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28 
      10.6    Rubbish Removal     .  .  .  .  .  .  .  .  .  .  .  .  .28

ARTICLE XI
INSURANCE;  INDEMNITY      .  .  .   .  .  .  .  .  .  .  .  .  .  .  .28
    11.1      Landlord's Insurance . . . . . . . . . . . . . . .       28
     11.2   Tenant's Insurance                                         29
     11.3   Insurance Certificates , . . , .                           30
     11.4    Mutual Release Waiver of  Subrogation                     30
     11.5   Mutual  Indemnification                                    30

ARTICLE XII
DAMAGE OR DESTRUCTION                                                  30
     12.1   Damage or Destruction                                      30
     12.2   During Last Three Years                                    31
     12.3   Termination                                                32

ARTICLE XIII
EMINENT DOMAIN                                                         32
    13,1  Automatic Termination                                        32
    13.2 .Termination Right                                            32
    13.3  Restoration                                                  33
    13.4   Award             .  .  .  .  .  .   ,  ,  .  .    .  .   . 33
    13.5   Termination                                                 33

ARTICLE XIV
DEFAULT  .  .  .  .  .  .  ,  ,          ,  .  .                       34
      14.1   Default                                                   34
      14.2   Notice of default;  Right to Cure                         34
      14.3   Limitation on Landlord's Liability                        35
      14.4   Land
      14.5   Election to Terminate                                     36
      14.6   Alternative Damages                                       37
      14.7   Additional Remedy                                         37
      14.8   Prevailing Party                                          37
      14.9   Landlord's Right to Cure Tenant's Uncured Default         38
      14.10 Remedies Cumulative                                        38
      14.11 Mortgagee Protection                                       38

ARTICLE XV
COVENANT OF QUIET  ENJOYMENT                                           39
     15.1  Covenant of Quiet Enjoyment                                 39
     15.2  Representation and Warranty                                 39

ARTICLE XVI
SUBORDINATION                                                          39

ARTICLE XVII
TRANSFERS  BY  LANDLORD                                                40

ARTICLE XVIII


<PAGE>
LANDLORD CONTINGENCIES                                                 40
    18.1  Consent of the Mortgagee                                     41
    18.2  Receipt  Governmental Approvals                              41.
    18.3 Receipt of  Guaranty      .  .  .  .  .  .       .  .         41.
    18.4  Failure of Conditions                                        41

ARTICLE XIX
EXPIRATION; TERMINATION . . . . . . . . . . . . . . . . . . .          41
    19.1  Duty to Surrender  . . . . , . . . . . . . . . . .           41
    19.2  Failure to Surrender . . . . . . . . . . . . . . .           42
    19.3  Additional Documents . . . . . . . . . . . . . . .           42

ARTICLE XX
MISCELLANEOUS  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 42
      20.1   Holding Over  .  .  .  .  .  .  .  .  .  .  .  .  ,  .  , 42
      20.2   Non-Waiver of Default  . . . . . . . . . . . . . .        42
      2 0 . 3   Recording          .  .  .  .  .  .  .  .  .  .  .  .  42
      20.4      Notice  .  .       .  .  .  .  .  .  .  .  .  .  .  .  42 .  . 
      20.5      Successors and Assigns . . . . . . . . . . . . . .     43
      20.6      Partial Invalidity . . . . . . . . . . . . . . . .     43
      20.7      Interpretation  .  .  .  .  .  .  .  ,  .  .  .  .  .  43 .
      20.8      Headings, Captions and References  . . . . . . . .     43
      20.9      Brokerage Commissions  . . . . . . . . . . . . , .     43
      20.10     Governing  Law           .  .  .  .  .  .  .  .  .  .  43 .  .
      20.11 Transfer Tax  .              .  .  .  .  .  .  ,  .  .  .  44 .
      20.12 Execution of Documents . . . . . , . . . . . . . ,         44
      20.13     Title  Exceptions  .  .  .  .  .  .  .  .  .  .  .  .  44
      20.14 Hazardous Substances . . . . . . . . . . . . . . .         44
      20.15     Force Majeure          .  .  .  .  .  .  .  .  .  .  . 47  .  .
      20.16 Estoppel Certificate . . . . . . . . . . . . . . .         47
      20.17     Effectiveness       .  .  .  .  .  .  .  .  ,  ,  ,  , 48  ,  ,
      20.18     Sig|^|nag|^|e    .  .  .   .  .  .  .  .  .  .  .  .  .48.  .  .
      20.19 Amendments in Writing  . . . . . . . . . . , . . .         48
      20.20     Time  of  Essence        .  .  .  .   .  .  .  .  .  , 48
      20.21 Corporate or Other Authority . . . . . . . . . . .         48
      20.22 Landlord's Rights of Entry and Inspection  . . . .         49
      20.23 Non-liability of Representatives  . . . . . . . . .        49
      20.24     Counterparts  .  .  .  .  .  .  .  .  ,  .  .  .  .  . 49
      20.25 No Rights of Third Parties . . . . . . . . . . . .         49
      20.26 Liability Joint and Several  . . . . . . . . . . .         49
      20.27     Entire Agreement  .  .  .  .  .  .  .  .  .  .  .      50
      20.28 Execution and Delivery of Lease  . . . . . . . . .         50

LIST OF EXHIBITS

      EXHIBIT A           Site Plan      .  .  .  .  .  .  .  .  .  .  A-1
      EXHIBIT B           Property Descriptions   . . . . . . . . .    B-1
                            Description of Premises
                            Legal Description of Shopping Center
      EXHIBIT C           Work Letter   . . . . . . . . . . . . . .    C-1
      EXHIBIT D           Subordination,  Non-disturbance  and  Attornment


<PAGE>
                          Agreement         .  .  .  .  .  .  .  .     D-1  
      EXHIBIT E           Access and Rental Payment Agreement          E-1
      EXHIBIT F           Guaranty of Lease   . . . . . . .            F-1
      EXHIBIT G           Estoppel, Certificate  . . . . . . . . . .   G-1
      EXHIBIT H           Memorandum of Lease   . . . . . . . . . .    H-1
      EXHIBIT I           Restricted Uses   . . . . . . . . . . . .    I-1
      EXHIBIT J           Existing Uses   . . . . . . . . . . . . .    J-1





<PAGE>
                                      LEASE

    This lease  (Lease) is made and entered  into as of the  Effective  Date set
forth in Article I by and  between  CANYON  COUNTRY  PLAZA  L.P. , a  California
limited  partnership  (Landlord)  , and PLAY CO. TOYS CANYON  COUNTRY,  INC.,  a
Delaware corporation (Tenant).  Except as otherwise noted,  references herein to
an Index,  Article,  Section,  Exhibit or Schedule are to such  portions of this
Lease,  all of which together  constitute the Lease.  All initially  capitalized
terms used in this Lease are defined in Articles I and II.


                                    ARTICLE I
                             FUNDAMENTAL LEASE TERMS

    For convenience,  this Article I summarizes certain fundamental economic and
business  terms of this Lease.  If these  fundamental  terms  conflict  with the
balance of the Lease, the latter shall control.

Effective Date:   See Title Page

Shopping Center:   Canyon Country Plaza located at Southeast Corner
                   of  Soledad Canyon and Whites Canyon  Roads in
                   Santa Clarita, California.

Premises:  19232 Soledad Canyon Road, Santa Clarita,  California 91351. See
Exhibit B (Description of Premises)

Landlord:          CANYON COUNTRY PLAZA L.P.
                   366 Comstock Avenue
                   Los Angeles, CA  90024

Tenant:            PLAY CO. TOYS CANYON COUNTRY, INC.
                   550 Rancheros Drive
                   San Marcos, California  92069

Tenant's
Contractor:        RETAIL DESIGNS by Kermit Newell

Brokers:           For Tenant:   PACIFIC RETAIL PARTNERS
                                   by Allen Ginsborg
                   For Landlord:   PARKER COMMERCIAL
                                     by Carter White



<PAGE>
Lease Term:        Initially, Ten (10) Years, subject to extension
                   at Tenant's election by one or more Option Terms.
option Terms:      Two (2) successive periods of Five (5) Years each
                   extending the initial Lease Term.

Base Rent:        ONE HUNDRED EIGHT THOUSAND DOLLARS ($108,000) per
                  year, subject to adjustment every five ( 5 ) years .
                  See Section 5.2.

Percentage Rent:   THREE PERCENT (3%) of Gross Sales exceeding Base
                   Sales.  See Section 5.3.

Base Sales:        ONE  MILLION  SEVEN  HUNDRED  THOUSAND  DOLLARS
                   ($1,700,000) per Lease Year.  See Section 5.3.

Minimum  Sales:     ONE MILLION FIVE  HUNDRED  THOUSAND  DOLLARS  ($1,500,000)
                    occurring over twelve (12)  consecutive  months between the 
                    30th and 54th months of the Lease Term. See Section 4.3.

1996 Budgeted
Common Area Costs: TWO & 40/100 DOLLARS ($2.40) per sq. ft. of GLA

Tenant's Share:   SEVEN AND FOUR/TENTHS PERCENT (7.4%), determined
                  in accordance with definition thereof in Article
                  II.

Building GLA:     TWELVE THOUSAND (12,000) sq. ft. (approximate)

shopping Center
GLA:              ONE HUNDRED SIXTY THOUSAND EIGHTY (160,080) sq. ft

Construction
Allowance:        NINETY THOUSAND DOLLARS ($90,000.00)

Estimated
Delivery Date:    FORTY-FIVE (45) DAYS AFTER EFFECTIVE DATE


                                   ARTICLE II
                                   DEFINITIONS

     Listed below are definitions of certain initially capitalized terms used in
this Lease with  particular  meanings . Unless  otherwise  noted, a defined term
includes, where appropriate to the context, the noun (singular and plural), verb
and adjective forms of the term.

      Additional  Rent is all amounts  due from  Tenant to Landlord  pursuant to
this Lease, other than Base Rent and Percentage Rent,


<PAGE>
including, without limitation, Tenant's Share of Common Area Costs,
Insurance Costs and Real Estate Taxes.

     Adjustment  Date is the first day of the sixth  (6th)  Lease Year and every
five (5) Lease Years thereafter.

     Adjustment  Index is the  Index  published  three  (3)  months  before  the
applicable Adjustment Date.

     Affiliate  is  any  Person  that,  directly  or  indirectly,  Controls,  is
Controlled by, or is under common ownership or Control with, a Party.

     Agreed Rate is an annual  rate of  interest  equal to the lesser of (i) two
percent  (2.0%)  above the rate of interest  announced  from time to time by the
Bank of America,  Downtown Los Angeles,  Main Branch,  as the prime or reference
rate (or, in the event said bank ceases to announce a prime or reference rate or
is  acquired  or ceases  operations  and  there is no  successor  bank,  another
established and financially  secure  commercial  bank,  having a headquarters in
California, selected by Landlord), or (ii) the highest rate permitted by law, if
any.

     Base Rent is the  annual  rent for the  Premises  set forth in  Article  I,
payable in  accordance  with Section 5.1 and subject to adjustment in accordance
with Section 5.2.

     Base sales is the amount of Gross Sales per Lease Year defined in Article I
in excess of which  Percentage  Rent is payable in accordance  with Section 5.3;
provided,  however,  that if a Lease Year has more or less than twelve (12) full
months, said amount of Base Sales for such Lease Year shall be a fraction of the
amount  set forth in  Article I whose  numerator  is the  number of days in such
Lease Year and whose denominator is three hundred sixty-five (365) .

     Beginning  Index is the Index  published three ( 3 ) months before the Rent
Commencement Date. -

     Brokers are the Tenant's Broker and Landlord's  Broker set forth in Article
I.

     Building is  Tenant's  store  building  located as shown on Exhibit A (Site
Plan) and containing that approximate GLA specified in Article I.

     Capital  Expenditures  are those  expenditures  which,  in accordance  with
generally  accepted  accounting   principles,   are  "capitalized"  rather  than
"expensed."

     City is the City of Santa Clarita, California.

     Common  Area is all  areas,  improvements,  facilities,  installations  and
equipment  existing  from time to time within the Shopping  Center that Landlord
shall provide  pursuant to this Lease and in  accordance  with the Site Plan for
the common use and benefit of


<PAGE>
     Tenant and other occupants of the Shopping Center, their employees, agents,
licensees,  customers and other invitees,  including  parking areas,  entrances,
exits,  access  roads,  driveways,   footways,   side-walks,   retaining  walls,
landscaped areas and pedestrian malls and courts.

     Common  Area Costs are all those  costs that  Landlord  incurs  annually in
maintaining  the Common Area,  including all ordinary  operation and maintenance
expenditures  and  Insurance  Costs (see Section 11.1) but excluding all Capital
Expenditures, as more fully described in Section 7.4.

     Competing  Business is a business whose sales of any of the following items
exceed ten  percent ( 10% ) of the total  sales of such  business at a specified
location:  (a) toys,  including  educational  toys and/or computer  software for
children; and/or (b) games, including video games.

     Construction Allowance is that amount specified in Article I which Landlord
will pay Tenant to perform Tenant's Work in accordance with the Work Letter.

     Control  is the power,  exercisable  jointly  or  severally,  to manage and
direct a Person through the direct or indirect ownership of partnership or other
business interest, corporate stock and/or voting rights.

     County is the County of Los Angeles, California.

     Default is a Party's  breach of any  covenant,  condition  or duty  arising
under this Lease.

      Delivery Date is the actual date Landlord  shall have first ( i) completed
all of  Landlord's  Work,  including  that  necessary to satisfy the  conditions
contained in Section 2 (a) of Exhibit C (Work  Letter),  and (ii)  delivered the
Premises to Tenant ready for Tenant's  installation  of fixtures in the Building
in accordance  with Section 3 of the Work Letter,  which date shall be no sooner
than  the  Estimated  Delivery  Date  specified  in  Article  I nor  later  than
forty-five  (45) days  thereafter.  Upon the  occurrence  of the Delivery  Date,
Landlord  shall deliver a Notice to Tenant of the Delivery Date for which Tenant
shall give its Reasonable Approval within five (5) days.

      Effective  Date is the  earliest  date the  Parties  shall  have  mutually
executed and delivered this Lease and Landlord's  Mortgagee  shall have approved
the Lease by executing and delivering to Tenant a Subordination, Non-disturbance
and Attornment Agreement.  For all purposes hereunder,  the Effective Date shall
be the date to be inserted on the Title Page  hereof  that Tenant  receives  the
Subordination,  Non-disturbance and Attornment  Agreement,  of which date Tenant
shall promptly give Notice to Landlord.



<PAGE>
      Estimated  Delivery  Date is that date specified in Article I on which
Landlord estimates the Delivery Date will occur,  which date shall be extended
for each day that Force Majeure delays Landlord's Work.

     FF&E is all trade fixtures, furniture and equipment that Tenant installs in
the Premises, at its expense, from and after the Effective Date.

     Force Majeure is any of the following events that prevents, delays, retards
or hinders a Party's  performance  of its duties  hereunder:  act of God;  fire;
earthquake; flood; explosion; war; invasion;  insurrection;  riot; mob violence;
sabotage;  vandalism;  inability  to  procure  or  general  shortage  of  labor,
equipment,  facilities,  materials  or supplies in the open  market;  failure of
transportation;   strikes;  lockouts;  litigation;  condemnation;   requisition;
governmental restrictions, including inability to obtain, or delay in obtaining,
governmental  consents  or  permits;  laws or  orders  of  governmental,  civil,
military or naval authorities; or any other cause, whether similar or dissimilar
to the foregoing,  not within such Party's control.  Notwithstanding anything in
this Lease to the contrary, Force Majeure shall not apply to the payment of Rent
hereunder  nor to a Party's lack of, or inability to procure,  monies to fulfill
its commitments and obligations under this Lease.

     GLA is  gross  leasable  floor  area of the  interior  ground  floor of the
Building or any structure in the Shopping Center  intended for human  occupancy,
measured  from the  outside of  exterior  walls and the center of common  walls,
excluding,  however,  any  mezzanine  (if  used  only  for  office  and  storage
purposes), truck well, truck loading dock, sidewalk or Common Area.

     Governmental  Restrictions  are  any  and  all  laws,  statutes,   official
policies, ordinances, codes, decrees, rulings, regulations,  writs, injunctions,
orders,  rules,  conditions of approval or  authorizations  of any  governmental
entity,  agency or political  subdivision,  now in force or  hereafter  adopted,
which are applicable to the Premises or the use thereof as of the date such term
is being applied.      

     Gross Sales is the total of all selling prices of all  merchandise  sold to
the public for cash or credit at the Premises  (each sale upon  installments  or
credit  shall be treated as a sale for the full cash price at the time of sale),
excluding:

l.    returned merchandise for which Tenant gives the customer full
      credit or other discounts or allowances in lieu thereof;

2.    uncollected sales amounts and dishonored check penalties Tenant
      collects from the customer;

3.    goods returned to suppliers or transferred to other stores or
      warehouses  of  Tenant  or  its  Affiliates  not  for  purposes  of
      completing a specific sale thereof to the public;

4.    bulk merchandise, property other than stock-in-trade, store
      equipment or trade fixtures sold to one other than a regular
      retail customer;


<PAGE>
5.    interest, discounts or other charges Tenant paid to credit card
      providers or other credit or check-cashing accommodations;

6.    sales, use, luxury, consumer excise, gross receipts or similar
      taxes imposed on sale of merchandise or services and collected
      from the customer or paid by Tenant and included in the selling
      price thereof; and

7.    all merchandise sold at a discount to employees of Tenant or
      its Affiliates ,  not to exceed two percent  ( 2 % )  of Gross Sales .

      HVAC system is the heating,  ventilating and  air-conditioning  system for
the Building.

    Hazardous  Substance  is any  material  or  substance  that  is  defined  or
classified under federal,  state, or local laws as: (a) a "hazardous  substance"
pursuant  to  section   101  of  the   Comprehensive   Environmental   Response,
Compensation  and Liability Act, 42 U.S.C.  (0) 9601(14),  or section 311 of the
Federal Water  Pollution  Control Act, 33 U. S. C. (0) 1321, as now or hereafter
amended; (b) a "hazardous waste" pursuant to section 1004 or section 3001 of the
Resource  Conservation and Recovery Act, 42 U.S.C.  (0)(0) 6903, 6921, as now or
hereafter  amended;  (c) a  toxic  pollutant  under  section  307 (a) (1) of the
Federal Water Pollution Control Act, 33 U.S.C. (0) 1317(a) (1); (d) a "hazardous
air  pollutant"  under section 112 of the Clean Air Act, 42 U.S.C.  (0) 7412, as
now or  hereafter  amended;  (e) a  "hazardous  material"  under  the  Hazardous
Materials Transportation Uniform Safety Act of 1990, 49 U.S.C. App. (0) 1802(4),
as now or hereafter amended; ( f ) toxic or hazardous  materials,  as defined in
regulations  promulgated now or hereafter under the aforementioned  laws; or (g)
any materials or substances presenting a risk to human health or the environment
under other applicable federal, state or local laws, ordinances, or regulations,
existing from and after the Effective Date. Hazardous Substance is any substance
that,  after  release  into  the  environment  and  upon  exposure,   ingestion,
inhalation, or assimilation, either directly from the environment or directly by
ingestion  through food chains,  will or may  reasonably be anticipated to cause
death,  disease,  behavior  abnormalities,  cancer,  or  genetic  abnormalities,
including, for example, asbestos,  polychlorinated biphenyls ("PCBs"), petroleum
and petroleum-based derivatives, and urea formaldehyde.

    Hazardous  substances  Laws  are all  applicable  Governmental  Restrictions
pertaining to the use, generation, release, storage or disposal of any Hazardous
Substance.


<PAGE>
     Improvements are all improvements to the interior of the Building  existing
at the Effective Date or constructed in accordance with the Work Letter.

     Indemnify  means that a Party  (Indemnitor)  shall  indemnify,  protect and
defend the other Party (Indemnitee) from and against all Losses and Liabilities,
resulting from the death, bodily injury or

personal injury of any Person or physical damage to, or (in case of a mechanic's
lien)  economic  loss of, any property  arising out of the  specified  duties or
conduct of the Indemnitor or its agents and employees.  An Indemnitee includes a
Party and its  Representatives.  No Party  shall be  obligated  to  Indemnify  a
proposed Indemnitee where the Losses and Liabilities (a) are caused, in whole or
in part,  by the  Indemnitee's  act,  omission  or  negligence,  or (b) has been
released and waived in accordance with Section 11.4.

     Index is the United States Department of Labor,  Bureau of Labor Statistics
Consumer  Price Index for All Urban  Consumers in Los  Angeles/Anaheim/Riverside
(base year 1982-84 = 100) or any comparable  successor or substitute  index.  If
the Index  changes so that the base year differs from the  aforesaid  base year,
the Index shall be converted in accordance with the conversion  factor published
by said Bureau of Labor  Statistics  to the 1982-84  base year.  If the Index is
discontinued  or revised during the Lease Term, such other  government  index or
computation  with  which  it is  replaced  shall  be used  in  order  to  obtain
substantially  the same  result as would be  obtained  if the Index had not been
discontinued or revised.

    Insurance Costs are the premiums and deductible  amounts  Landlord incurs in
maintaining  insurance for the Shopping  Center  (including the Building and the
Common Area), as more fully described in Section 11.1.

     Landlord is identified in Article I.

     Landlord's  Work is all work the  Landlord  shall  perform to the  Building
before delivering possession thereof to Tenant. See Exhibit C (Work Letter).

     Lease is this agreement by and between Landlord and Tenant for lease of the
Premises.

     Lease  Term is the  period  from  the  Rent  Commencement  Date  until  the
expiration of this Lease in accordance  with Section 4.1 or earlier  termination
of this Lease as provided in this Lease.

     Lease  Year is  each  twelve  ( 12 ) month  period  commencing  February  1
subsequent to the Rent Commencement  Date;  provided,  however,  the first Lease
Year shall commence on the Rent  Commencement Date and end on the second January
31 occurring after the Rent Commencement Date. .


<PAGE>
     Losses and  Liabilities  are all  liabilities,  claims,  losses,  causes of
action,  charges,   penalties,  liens  (including  mechanic's  liens),  damages,
interest, costs and expenses (including reasonable attorney fees and costs) , of
whatsoever character, nature and kind, whether to property or person, whether by
direct  or  derivative  action,  and  whether  known or  unknown,  suspected  or
unsuspected, latent or patent.

     Minimum Sales is that minimum  level of Gross Sales  specified in Article I
which,  if not  achieved  during any  consecutive  twelve (12) months  occurring
between the thirtieth (30th) and  fifty-fourth  (54th) months of the Lease Term,
shall permit Tenant to terminate this Lease on six (6) months' Notice.

     Mortgage is any mortgage or deed of trust encumbering from time to time the
Landlord's or Tenant's estates in the Premises and/or the Shopping Center.

     Mortgagee is the holder of the beneficial interest of a Mortgage.

     Notice is any notice, payment,  statement,  request for approval,  consent,
reply, cure or performance, or other communication required or permitted between
the Parties which shall be given as specified in Section 20.4.

     Notice of Default is a Party's  Notice  requesting the other Party cure its
alleged Default within a specified time period, as specified in Section 14.2.

     Objectionable Use is any use of the Premises prohibited in Section 9.3.

     Option  Term is any  extension  of the  initial  Lease  Term  arising  from
Tenant's  exercise,  in  accordance  with  Section  4.2,  of any of the  options
described in Article I.

     Parking Lot is all Common Area  designated on the Site Plan for the passage
and parking of  vehicles,  including  all  entrances,  exits,  access  roads and
driveways.

     Party is Landlord or Tenant.

     Parties are Landlord and Tenant.

     Percentage Rent is Rent payable annually equal to the percentage  specified
in  Article  I of the  excess of Gross  Sales  over Base  Sales,  as more  fully
described in Section 5.3.

     Permittee is any  subtenant,  licensee,  concessionaire,  employee,  agent,
customer or invitee of Tenant.

     Person is an individual,  partnership,  firm, association,  corporation, or
any other form of business or governmental entity.

     Premises are the Building,  Improvement's,  other  improvements made to the
Building  from time to time,  and the land  thereunder  as well as the following
easements in the Common Area appurtenant  thereto:  an exclusive easement to use
the truck loading docks,  truck wells and truck staging area located at the rear
of the Building; exclusive and nonexclusive easements for signage as

<PAGE>

described in the Work Letter;  and a nonexclusive easement to use the
Common Area for access and parking.

      Real Estate  Taxes are all real  estate  taxes and  assessments  for land,
improvements  and  fixtures  levied or assessed by any lawful  authority  on the
Shopping  Center for each tax  fiscal  year,  including  sewer  rents,  excises,
levies,  charges for public  utilities and all other charges of whatsoever  kind
and nature and whether any of the  foregoing be general or special,  ordinary or
extraordinary,  foreseen or unforeseen, as finally determined in accordance with
law,  net of any  applicable  abatements,  refunds or rebates  but  specifically
including costs (including reasonable attorney fees) incurred in connection with
any  contest of Real Estate  Taxes.  Real  Estate  Taxes are further  defined in
Section 6.1.

     Reasonable  Approval  means a Party's  Notice of approval  or  disapproval,
which shall be given reasonably and promptly to the other Party.

     Remedial Work is any and all monitoring, investigation,  clean-up, removal,
abatement,  rededication and/or other remedial work the Hazardous Substance Laws
may require  because of the presence of any  Hazardous  Substance on any part of
the Shopping Center.

      Rent is the Base Rent,  Percentage  Rent and all Additional Rent due under
this Lease.

     Rent  Commencement  Date is that date which is one hundred  five (105) days
after the Delivery Date; provided,  however, the Rent Commencement Date shall be
extended  f or each day that  Force  Majeure  delays  Tenant  Work  (but not the
securing of building permits  therefor) and otherwise as Section 2(b) of Exhibit
C provides.

     Representatives are the officers, directors, shareholders, managers, staff,
employees,  members,  agents,  principals,   affiliates,  partners,  independent
contractors, attorneys, accountants and representatives of the referenced entity
and the predecessors, heirs, successors and assigns of all such Persons.

     Restricted  Use is any  exclusive or  restricted  use  Landlord  shall have
granted to another  tenant in its lease at the Shopping  Center at the Effective
Date as  listed  in  Exhibit  I  (Restricted  Uses) or at any  time  thereafter;
provided,  however,  that Landlord  shall grant any such exclusive or restricted
use after the Effective  Date that  conflicts  with  Tenant's  exclusive use set
forth in Section 9.2.

     Shopping  Center is all land,  improvements  and  fixtures ( including  the
Premises)  existing from time to time and  constituting a shopping center in the
location and with the aggregate GLA shown therefor in Article I.

    Site Plan is the plan showing the location of all structures




<PAGE>
and improvements in the Shopping  Center,  approved by the Parties and contained
in Exhibit A (Site Plan).

    Subordination,  Non-disturbance  and  Attornment  Agreement  is that form of
agreement attached as Exhibit D (Subordination,  Non-disturbance  and Attornment
Agreement) or any other form agreement complying with Article XVI and containing
commercially  reasonable  provisions  customarily contained in such an agreement
prepared by a commercial lender.

    Tenant is identified in Article I.

    Tenant's Contractor is identified in Article I.

     Tenant's  Share  is that  percentage  of  Common  Area  Costs  (  including
Insurance  Costs)  and Real  Estate  Taxes  equal  to a  fraction  thereof,  the
numerator of which is the GLA of the Building,  and the  denominator of which is
the  aggregate of the GLA of all  buildings in the  Shopping  Center;  provided,
however,  notwithstanding the foregoing,  Tenant's Share shall never exceed that
percentage,  if any,  set  forth  in  Article  I,  except  where  the GLA of all
buildings in the Shopping Center is reduced due to casualty or condemnation.

     Tenant's  Work is all  Improvements  to the interior of the  Building  that
Tenant shall install in accordance with Tenant's specifications and requirements
and whose  quality  shall be  consistent  with the  highest  quality of Tenant's
stores operating at the Effective Date.

     Uncured  Default is any Default which a Party has failed to cure within the
period required in a Notice of Default. See Article XIV.

     Work Letter is the Parties'  agreement for construction of the Improvements
set forth in Exhibit C (Work Letter).

     Zone of Control is that portion of the Common Area shown on Exhibit A (Site
Plan) in which all changes from its condition at the Effective  Date are subject
to Tenant's Reasonable Approval, in accordance with Section 7.1.


                                   ARTICLE III
                               DEMISE OF PREMISES

     3.1 Premises.  For and in  consideration  of the  covenants and  agreements
contained herein and other valuable consideration,Landlord leases to Tenant, and
Tenant  leases from  Landlord,  the Premises upon the terms and  conditions  set
forth herein.

     3.2  Improvements.  The Parties  shall  construct the  Improvements  to the
Premises in accordance with the Work Letter.

     3.3 Building.  Subject to the terms and conditions of this Lease, including
Landlord's  completion,  and Tenant's Reasonable Approval, of Landlord's Work in
accordance  with the Work Letter,  Tenant  accepts the Building and remainder of
the Shopping Center "AS IS."

     3.4 shopping|^| Center. The Shopping Center has approximately the aggregate
GLA set  forth  in  Article  I and is  legally  described  in  Exhibit  B (Legal
Description of Shopping Center).

<PAGE>
                                   ARTICLE IV
                                   LEASE TERM

     4.1 Lease Term. The Lease Term shall commence on the Rent Commencement Date
and shall  expire on the last day of the later to occur of (i) the TENTH  (10th)
Lease Year (i.e.,  January  31,  2007) or (ii) the FIFTH (5th) Lease Year of the
last Option Term, if any, that Tenant shall have  exercised  pursuant to Section
4.2. It is expressly  acknowledged and agreed by the Parties that this Lease and
the terms and  provisions  hereof are binding in all  respects on the  Effective
Date,  notwithstanding  that the  Lease  Term  does  not  commence  and  certain
obligations,  including  the  obligation to pay Base Rent, do not accrue until a
later time as expressly provided elsewhere in this Lease.

     4.2 Option Terms.  Tenant shall have that number of  successive  options to
extend the Lease Term by the Option Terms  specified in Article I, upon the same
terms and conditions of the Lease then in effect,  except as otherwise expressly
provided  herein,  exercisable by Tenant on not less than six (6), nor more than
twelve (12), months' Notice to Landlord prior to expiration of the Lease Term or
Option Term,  as the case may be. If Tenant fails to give any such Notice within
the  aforesaid  time  limit,   Tenant's  right  to  exercise  its  option  shall
nevertheless  continue until thirty (30) days after Landlord gives Tenant Notice
of Landlord's  election to terminate  such option,  and Tenant may exercise such
option at any time until the expiration of said thirty (30) day period. Landlord
shall  have the right to extend the Lease Term from one (1) to six (6) months at
the  then-existing  Rent on Notice given to Tenant  within five ( 5 ) days after
Tenant  fails,  or gives  Notice of its  decision  not, to accept an Option Term
within said thirty (30) day  period.  Notwithstanding  Tenant's  failure to give
Notice of its  acceptance  of an  Option  Term,  Tenant  shall be deemed to have
elected to extend the Lease Term by an Option Term if Tenant pays,  and Landlord
negotiates payment of, the increased Rent applicable for the first month of such
Option Term. After the valid exercise of any option to extend, all references in
this Lease to the Lease Term hereof shall be to the Lease Term as extended,  and
all  references  to the end of `r-he Lease Term shall be to the end of the Lease
Term as extended.

     Tenant's  right to  exercise  the option to extend for each  Option Term is
subject to satisfaction of the following  conditions  precedent:  (i) this Lease
shall be in effect at the time Tenant gives

<PAGE>
Notice of its  exercise  of an option to extend and on the last day of the Lease
Term prior to its  extension;  (ii)  Tenant  shall not be in  Default  under any
provision  of this Lease at the time Tenant  gives Notice of its exercise of the
option  nor shall a Default  exist as of the last day of the Lease Term prior to
its  extension;  and (iii)  Tenant's  Notice of exercise of the option to extend
shall be delivered in compliance with the  requirements  and limitations in this
Section 4.2.  The options to extend the Lease Term  provided in this Section 4.2
shall immediately and  automatically  terminate and shall be of no further force
or effect in the event  that this Lease is  terminated  in  accordance  with the
terms and provisions of this Lease.

    4.3   Early Lease Termination; Release.

    (a) Delivery  Date. On immediate  Notice to Landlord,  Tenant shall have the
right to  terminate  this  Lease if the  Delivery  Date  does not  occur  within
forty-five (45) days of the Estimated Delivery Date.

     (b)  Minimum  Sales;  Competition.  On six (6)  months'  Notice to Landlord
delivered  within twelve ( 12 ) months after the occurrence of either or both of
the events  described  in subpart  (i) or (^n),  Tenant  shall have the right to
terminate this Lease if, between the thirtieth  (30th) and  fifty-fourth  (54th)
months of the Lease Term:

       ( i)   Tenant's Gross Sales do not exceed the Minimum Sales for
              any consecutive twelve (12) month period, or

       ( ii )   Either Toys R Us or WalMart opens a store within five  ( 5 )
                miles of the perimeter of the Shopping Center.

       (c) Release.  Upon termination of the Lease under Sections 4.3(a) or (b),
9.5, 9.6, 18.4 or 20.14, (i) each Party shall thereafter be released and have no
further  liability or obligation to the other or to any third party with respect
to this Lease (except for Rent and Losses and Liabilities  that accrued prior to
the date of such Lease  termination),  (ii) Tenant shall have no further  rights
whatsoever  with respect to the  Premises,  and (iii)  Landlord  shall  promptly
refund to Tenant all Rent  Tenant  shall have paid for any  portion of the Lease
Term that would have occurred after the date of such Lease termination.


                                    ARTICLE V
                                      RENT


<PAGE>
    5.1 Base Rent. For each Lease Year, Tenant shall pay Landlord the Base Rent,
subject to adjustment in accordance with Section 5.2; provided,  however, Tenant
shall pay one-twelfth (1/12) of the Base Rent for each month in excess of twelve
(12) months occurring during the first Lease Year.

      Tenant shall pay Base Rent in advance, in equal monthly  installments,  on
the  first  day of each  and  every  calendar  month  from  and  after  the Rent
Commencement  Date  during the Lease  Term.  Base Rent shall be  proportionately
reduced for any partial month occurring  during the Lease Term based on a thirty
(30) day month.

     5.2 Consumer Price Index  Increases.  Subject to the  limitations set forth
herein,  the  Base  Rent  shall  be  increased  on each  Adjustment  Date by the
percentage  of  increase,  if any, in the Index as follows.  On each  Adjustment
Date, the Base Rent shall be adjusted by multiplying  the initial Base Rent by a
fraction,  the  numerator of which is the  applicable  Adjustment  Index and the
denominator of which is the Beginning Index; provided,  however, the increase in
Base Rent over the previously  applicable  Base Rent shall not exceed twelve and
one-half percent (12.5%) at each Adjustment Date. The amount so determined shall
be the adjusted Base Rent payable under Section 5.2 for the Lease Year beginning
on the applicable Adjustment Date and until the next Adjustment Date.

     5.3  Percentage|^|e  Rent.  Not later than sixty (60) days after the end of
each Lease Year,  Tenant  shall  deliver to  Landlord  for such Lease Year (1) a
Notice,  signed by a  responsible  officer  of Tenant,  reporting  the amount of
Tenant's  Gross  Sales  and  all  amounts  excluded  therefrom,  ( 2 ) a copy of
Tenant's state and local sales tax reports,  and (3) Percentage Rent computed on
the excess of Gross Sales reported over Base Sales.

      Tenant shall record at the time of sale,  in the presence of the customer,
all receipts from sales or other transactions whether for cash or credit in cash
registers that provide a cumulative total and that number consecutive purchases.

     For three (3) years following the end of each Lease Year, Tenant shall keep
full and  accurate  books of account and records of Gross Sales,  including  all
cash  register  receipts,  credits,  refunds and other  pertinent  transactions,
generated in the operation of the business of Tenant and any subtenant, licensee
or  concessionaire  at the  Premises.  On five (5) days'  Notice,  Landlord or a
certified  public  accountant  designated  by  Landlord  shall have the right to
inspect and audit such books and records at the Premises at all reasonable times
during regular business hours to determine Gross Sales.

     If Landlord  determines as a result of such audit that Tenant has underpaid
Percentage Rent, then Tenant shall  immediately pay the deficiency in Percentage
Rent with interest at the Agreed Rate from the date of underpayment  until paid.
In addition,  if  Landlord's  audit shows that Tenant has  under-reported  Gross
Sales by more than two  percent  (2%),  then  Tenant  shall pay all  Losses  and
Liabilities   Landlord  shall  have  incurred  in  conducting  such  audit.  Any
information  Landlord  obtains from Tenant's  reports and records of Gross Sales
shall be  confidential  and shall not be  disclosed  other than to carry out the
purposes of this Lease; provided, however, Landlord

<PAGE>
may divulge the contents of any such reports and records in connection  with any
financing  arrangements,  sales or  assignments  of  Landlord's  interest in the
Premises or any  administrative  or judicial  proceedings  in which  Landlord is
involved where Landlord may be required to divulge such information.  Landlord's
receipt of any report of Gross  Sales or  payment of  Percentage  Rent shall not
bind Landlord as to the correctness of thereof.

     5.4 Late Charge : Interest; Miscellaneous. If, for three (3) or more months
in a Lease Year,  Tenant fails to pay the monthly Base Rent due each month under
this Lease  within ten (10) days after  Landlord's  delivery of Notice that such
monthly  Base  Rent is  overdue,  then  commencing  with  such  third  month and
continuing  every month  thereafter that Base Rent is overdue,  Tenant shall pay
immediately to Landlord an additional five percent ( 5% ) of each amount of Base
Rent as  liquidated  damages,  it being  agreed  that such amount  represents  a
reasonable  estimate of the Losses and  Liabilities  (other than interest due on
the unpaid Base Rent) that Landlord will suffer in such circumstances.

     Landlord's  acceptance  of the  Rent  without  the  late  charge  will  not
constitute a waiver of Tenant's  Default with respect to Tenant's  nonpayment of
the late  charge,  nor prevent  Landlord  from  exercising  any other rights and
remedies available under this Lease.  Land-lord's  failure to require or collect
the late charge in any one or more  instances  shall not  constitute a waiver of
the  right to  collect  subsequent  late  charges.  Rent  shall be paid  without
deduction,  abatement,  offset,  prior  Notice or  demand,  except to the extent
otherwise expressly provided in this Lease.

    Any unpaid Rent that becomes an Uncured  Default  shall bear interest at the
Agreed Rate from the date such Uncured Default first occurs until paid.

    Tenant shall pay all  installments of Rent to Landlord as they become due in
lawful money of the United States of America in cash or by corporate check drawn
on sufficient available funds, at the address shown for Landlord in Article I or
such other address of which Landlord shall have delivered  Notice to Tenant from
time to time.

<PAGE>
                                   ARTICLE VI
                                      TAXES

    6.1   Real Estate Taxes.

     (a)  Landlord  shall pay all Real  Estate  Taxes.  Landlord  shall take the
maximum   benefit  of  any  law  allowing  Real  Estate  Taxes  to  be  paid  in
installments,  and if installments are allowed, only the amount actually paid by
Landlord  during the  applicable tax year shall be included in Real Estate Taxes
for purposes of this Article VI. The Parties shall make appropriate  adjustments
to previous reimbursements from Tenant to Landlord on account of any abatements,
refunds or rebates of Real Estate Taxes immediately  following the determination
of the amounts thereof.

     (b)  Notwithstanding  anything  which  may be or appear to be herein to the
contrary,  if at any time during the Lease Term, any authority  having the power
to tax, including without limitation any federal, state, county, city government
or any  political  subdivision  thereof (a "Taxing  Authority")  shall alter the
methods and/or standards of taxation and assessment (the "Tax Plan") against the
legal  or  equitable  interests  of  Landlord  in  the  Shopping  Center  or the
underlying realty, in whole or in part, so as to impose a Tax Plan in lieu of or
in addition  to the Tax Plan in  existence  as of the date of this  Lease,  Real
Estate  Taxes due from Tenant  under this Lease shall  include  such  additional
taxes,  assessments,  excise,  surcharge,  fee,  levy  penalty,  bond or similar
impositions  (collectively,  "Impositions")  based  upon  such  other  Tax Plan,
including  without  limitation any  Impositions  (a) on Landlord's  right to, or
receipt of,  rental or other  income from the  Shopping  Center (but not on such
income) or as against Landlord's business of leasing the Shopping Center, (b) in
substitution or in lieu,  partially or totally, of any Impositions assessed upon
the  Shopping  Center  prior  to any such  alteration  in the Tax  Plan,  (c) on
Tenant's possession, leasing, operation,  management,  maintenance,  alteration,
repair,  use or occupancy of the Premises or any portion  thereof,  and (d) upon
this Lease  transaction or any document to which Tenant is a party which creates
or  transfers  any  interest  or  estate  in or to  the  Premises  other  than a
documentary transfer tax described in Section 20.11. Any special,  unforeseen or
extraordinary Impositions, however described, shall be considered as Real Estate
Taxes for the purposes of this Lease, except to the extent specifically excluded
pursuant to subparagraph (c) below.

     (c)  Notwithstanding  anything  herein to the  contrary,  Real Estate Taxes
shall not include the  following:  (i) income,  intangible,  franchise,  capital
stock,  estate or inheritance  taxes or taxes  substituted for or in lieu of the
foregoing exclusions; and (ii) any taxes applicable to periods prior to the Rent
Commencement  Date or any  assessment for special  improvements  to the Shopping
Center,  including  but not  limited to the  widening  of  exterior  roads,  the
installation  of sewer  lines,  sanitary  and storm  drainage  systems and other
utility installations,  but only if such assessment is made within two (2) years
after the Rent Commencement Date.
<PAGE>

     (d) If the Shopping  Center is reassessed for purposes of RealEstate  Taxes
because Landlord transfers some or all of its interest in the Shopping Center or
in any entity owning the Shopping Center, Tenant shall pay Tenant's Share of any
increase  in Real  Estate  Taxes  arising  from  Landlord's  first (lst) such
transfer but thereafter  shall pay no portion of any such increase  arising from
any subsequent transfer by Landlord; provided, however, that if Tenant elects to
extend the Lease Term by an Option Term,  Tenant shall pay Tenant's Share of the
increases in Real Estate Taxes  arising from all of  Landlord's  transfers  that
occurred prior to the commencement of such Option Term.

     (e) Landlord shall pay all Real Estate Taxes upon the Shopping Center prior
to the last date that the same may be paid without  penalty or interest or prior
to the last day that any discount is available. Without cost to Tenant, Landlord
shall bear all interest,  penalties,  late charges and lost discount amounts, if
any, incurred as a result of Landlord's failure to timely pay any installment of
Real  Estate  Taxes.  Notwithstanding  the  foregoing,  Landlord  shall  not  be
obligated to accelerate any such payments  otherwise  payable in installments to
obtain a discount.

    6.2 Personal  Property Taxes.  Tenant shall pay all personal  property taxes
assessed on Tenant's  personal  property on the  Premises . If Landlord has paid
any such  tax in the  first  instance,  as  required  by the  applicable  taxing
authority,  Tenant  shall  reimburse  Landlord  upon  Tenant's  receipt  of paid
invoices for such taxes,  provided that Landlord shall use reasonable efforts to
deliver Notice to Tenant of any such tax prior to Landlord's payment thereof.

     6.3   Proration of Taxes.

     (a) On thirty  (30) days'  Notice from  Landlord of Tenant's  Share of Real
Estate Taxes due and a computation thereof,  Tenant shall reimburse Landlord for
Tenant's Share of such Real Estate Taxes.

     (b) If the first  Lease Year  commences,  or the last  Lease Year ends,  on
other  than  the  first  or last  day,  respectively,  of the tax  fiscal  year,
Tenant|^|s  Share of Real Estate Taxes for the first or last Lease Year shall be
a fraction of the Real Estate Taxes for the full tax fiscal year whose numerator
is the  number  of days of such  Lease  Year in the tax  fiscal  year and  whose
denominator is three hundred sixty-five (365).

     (c) Landlord  shall furnish Tenant with copies of all bills for Real Estate
Taxes  promptly upon receipt  thereof and in sufficient  time to allow Tenant to
determine whether or not to contest any increase in Real Estate Taxes. If Tenant
desires to contest such tax increase,  Tenant shall promptly Notify Landlord and
Tenant  shall  have the  right  to do so at its  expense.  Notwithstanding  such
contest, Tenant shall continue to pay timely Tenant's Share of Real Estate Taxes
due as provided in this  Article VI.  Landlord  shall not be required to join in
any contest  brought by Tenant unless the provisions of any law require that the
proceeding  or contest be brought by, or in the name of Landlord or any owner of
the Premises.  In that case,  Landlord shall join in the contest or permit it to
be brought in Landlord's name, but such action shall be without cost to Landlord
and Tenant shall reimburse Landlord upon demand for any reasonable attorney fees
and costs  incurred  therein.  If Tenant does  contest  such tax  increase and a
savings results, Tenant shall



<PAGE>
protection and the  maintenance  and repair of fire  protection  systems;  storm
drainage and the  maintenance  and repair of storm drain systems;  and patching,
re-paving and striping of the parking  area.  Landlord  shall paint,  stripe and
otherwise  maintain,  repair and replace all  improvements  to the Common  Area,
including  all  access  ways,  the  Parking  Lot,  sidewalks,  retaining  walls,
restrooms (if any),  benches,  building  directories,  light poles,  directional
signs,  pedestrian  coverings and any other  improvements not listed herein,  as
necessary in a manner  consistent  with the quality and character of first-class
shopping centers in the market area of the Shopping Center.

      7.1 Common Area Costs.  Common Area Costs include all costs,  premiums and
charges  incurred  by  Landlord  with  respect  to  the  operation,  repair  and
maintenance  of the Common  Area as  provided  in Section  7.3 above,  including
without limitation the following: personnel to implement the foregoing services;
personal  property taxes and  assessments  on the  improvements  comprising,  or
equipment servicing,  the Common Area; any governmental  imposition or surcharge
imposed  upon  Landlord or assessed  against any portion of the Common Area with
respect to Landlord's  operation  thereof;  maintenance of the area(s),  if any,
designated by Landlord for the storage and removal of rubbish,  and the costs of
such removal (excluding rubbish bins owned or rented by Tenant and other tenants
of the  Shopping  Center);  amortized  cost of,  or rent  for,  maintenance  and
operating machinery and equipment,  if owned or rented  respectively;  Insurance
Costs;  and an  administrative  fee, payable to Landlord for  administering  the
foregoing services and for accounting,  bookkeeping and collection of the Common
Area Costs,  in an amount  equal to ten  percent  (10%) of the Common Area Costs
excluding Real Estate Taxes and Insurance  Costs.  Landlord may cause any or all
of the  foregoing  services  to be  provided  by an  independent  contractor  or
contractors or by an Affiliate of Landlord.

     Notwithstanding  anything  herein to the  contrary,  none of the  following
items shall be Common Area Costs: (i) expenses  incurred in leasing space,  such
as legal expenses, brokerage commissions or advertising or promotional expenses;
(ii) interest and amortization under mortgages or any other secured or unsecured
loan payable by Landlord;  (iii)  expenses  separately  reimbursed  by any other
tenants of the Shopping  Center other than  pursuant to Common Area  maintenance
provisions in their  respective  leases;  (iv) financing and refinancing  costs,
including  fees paid by  Landlord to obtain  financing  or  refinancing  such as
origination  fees and  brokerage  commissions;  (v)  Landlord's  management  and
overhead costs (other than the administrative fee described herein above);  (vi)
depreciation; (vii) costs incurred in connection with the enforcement of leases,
including  attorney  fees or other costs  incurred in  connection  with  summary
proceedings  to dispossess any other tenant in the Shopping  Center;  (viii) any
Capital  Expenditure  (which  shall not  include  the costs  for  re-paving  and
re-striping  the Parking  Lot); ( ix) costs for re-paving  and  re-striping  the
Parking  Lot to the extent  such  costs  exceed  the  reasonable  costs for such
re-paving more than once every five (5) years and for such re-striping more than
once every two (2) years and provided that no more than one-fifth  (1/5) of such
costs  shall be  included  in  Common  Area  Costs  annually;  (x) any  expenses
associated with any special  requirements  of a particular  tenant in connection
with the Common  Area or the  maintenance  thereof;  and (xi)  Landlord's  costs
incurred under Section 10.1.

    7.5 Payment.  Landlord's budgeted Common Area Costs at the Rent Commencement
Date are set forth in Article I. In  December of each  calendar  year during the
Lease Term,  Landlord  shall deliver  Notice to Tenant of Landlord's  reasonably
estimated  budget for Common Area Costs for the next  calendar year and Tenant's
Share thereof. Contemporaneously with its payment of Base Rent, Tenant shall pay
Landlord one-twelfth (1/12) of said estimated Tenant's Share as set forth in the
Notice.  If Landlord  fails to deliver any such  Notice for any  calendar  year,
Tenant shall  continue to pay the amount  Landlord  shall have  estimated in its
most recent Notice thereof to Tenant.
<PAGE>
    Within ninety (90) days after the end of each  calendar  year, or quarter at
Landlord's  option,  Landlord  shall  prepare a detailed  statement  reconciling
budgeted and actual Common Area Costs for such period and shall  deliver  Notice
to Tenant thereof . If Tenant shall have overpaid its actual  Tenant's Share for
such period, Landlord shall credit Tenant's Share with such overpayment;  but if
Tenant shall have underpaid its actual  Tenant's  Share for such period,  Tenant
shall  reimburse  Landlord the amount of such  underpayment  within fifteen (15)
days of such Notice.

     Landlord shall retain all its records  relating to the Common Area Costs at
Landlord's  principal  office for three (3)  years,  and upon  reasonable  prior
Notice to  Landlord,  Tenant  shall  have the  right to audit all of  Landlord's
records relating to such costs annually;  provided, however, that any such audit
of  records  relating  to such  costs  which are  contained  within a  statement
delivered  to Tenant  must take  place  within  one (1) year of  receipt of such
statement or Tenant  shall be deemed to have  accepted  such costs.  Appropriate
adjustments  shall be made for errors in the  computation of such costs revealed
by such  audit.  If Tenant's  audit shows that Tenant was charged  more than one
hundred  three  percent ( 103 % ) of the actual  Tenant's  Share for any audited
period,  Landlord shall  reimburse  Tenant for the reasonable  costs of Tenant's
audit within fifteen (15) days after  Tenant's  Notice to Landlord of such audit
findings and costs; otherwise, Tenant shall bear the expenses of Tenant's audit.

     7.6 Rules and Regulations.  From time to time,  |^|Landlord  shall have the
right to establish,  amend and enforce against Tenant and the other users of the
Common Area such reasonable,  nondiscriminatory  rules and regulations as may be
deemed  necessary  or  advisable  for the proper  and  efficient  operation  and
maintenance of the Common Area. These rules and regulations may include, without
limitation,  the hours  during  which the Common  Area shall be open for use and
reasonable  restrictions  on  Tenant's  employees  parking,  such  as  requiring
Tenant's employees to park at the rear of the Shopping Center.

     Landlord may, if in Landlord's  opinion the same is advisable,  establish a
system or systems of parking  validation  or other type  operation to attempt to
limit the use of the parking  facilities  within the Common Area to customers of
tenants  in  the  Shopping  Center,   including  a  system  of  charges  against
non-validated  parking checks of users;  provided,  however, that Landlord shall
not  voluntarily  impose a parking  fee to the  customers  of Tenant or of other
tenants in the Shopping Center.

    Tenant  shall  conform  to and abide by all such  rules and  regulations  in
Tenant's use and the use by Tenant's  customers  and patrons of the Parking Lot;
provided,  however,  that all  such  rules  and  regulations  and such  types of
operation  or  validation  of parking  checks and other  matters  affecting  the
customers and patrons of Tenant shall apply  equally and without  discrimination
to  all  Persons  entitled  to  use  the  Parking  Lot.  Landlord  shall  not be
responsible to Tenant or to any other Person for the nonperformance by any other
Tenant,  occupant or invitee of the Shopping Center of any rules and regulations
now or in the future promulgated by Landlord.

     7.7 Additional Land. Landlord shall have the right, but not the obligation,
to annex "Out  Parcel No. 1" as shown on Exhibit A (Site  Plan) to the  Shopping
Center.


                                  ARTICLE VIII
                                    UTILITIES

     8.1 Utilities Usage.  Tenant shall pay the applicable  utility companies or
governmental  agencies  directly  for  all  utilities  Tenant  consumes  on  the
Premises.  Landlord  shall not take any action that will  interrupt or interfere
with any electric,  gas, water, sewage and/or telephone service to the Premises.
If any such interruption or interference  occurs as a result of Landlord's gross
negligence  or wilful  misconduct  and  continues  for longer  than one (1) day,
Tenant's  Base Rent  shall be fully  abated  for each  additional  day that such
interruption or interference continues.

     8.2  Utilities  Repair.  If utility  conduits or other  equipment in, on or
under the  Shopping  Center  (but not within the  Premises)  must be repaired to
service the Premises with such utilities,  Landlord shall promptly make all such
repairs which shall be a Common Area Cost.

<PAGE>
                                   ARTICLE IX
                     USE; EXCLUSIVE; ASSIGNMENT AND SUBLEASE

     9.1 Use.  Tenant shall use the Premises  solely for the retail sale of toys
and other incidentally  related items customarily sold in other stores of Tenant
or its  Affiliates  and  for no  other  purpose  without  Landlord's  Reasonable
Approval.   Landlord  shall  give  its  Reasonable   Approval  if  the  proposed
alternative use is (i) consistent with a "first-class promotional retail center"
and (ii) neither an Objectionable Use nor a Restricted Use at that time.

     Notwithstanding  anything  in the Lease to the  contrary,  Tenant  shall be
permitted to do each of the following for promotional purposes only: (1) use the
sidewalk  contiguous  with the Premises  for (i)  promotional  events  and/or to
provide   refreshments  to  employees  and  customers,   subject  to  Landlord's
Reasonable Approval,  and (ii) twelve (12) sales each Lease Year, with each sale
lasting no more than three (3) days, and additional sales, subject to Landlord's
Reasonable Approval; (2) park trailers for additional storage in the Common Area
at the rear of the Premises from October  through  December;  ( 3 ) periodically
paint  professionally up to fifty percent (50%) of the windows of the Premises;,
and (4)  professional-  ly install banner signs on the exterior of, the Premises
periodically to advertise special sales or events;  provided,  however,  no such
activities  shall  violate  Governmental  Restrictions,   impede  pedestrian  or
vehicular traffic, or interfere with the business activities of other tenants of
the Shopping Center.

     9.2 Exclusives.  So long as Tenant uses  substantially  all of the Premises
for the retail sale of toys and other incidental  related items customarily sold
in other stores of Tenant or its Affiliates,  neither Landlord nor any Affiliate
of Landlord  shall lease,  or otherwise  authorize  the use of, any space in the
Shopping  Center,  or during the first five (5) Lease  Years,  any retail  space
Landlord  or its  Affiliate  own within a five (5) mile  radius of the  Shopping
Center for the operation of any Competing Business.

     The foregoing  restriction  shall not apply to any space whose lease at the
Effective Date, or any space that Landlord or any Affiliate acquires within said
five (5) mile radius  after the  Effective  Date whose lease at the  acquisition
date,  permits  operation  of a  Competing  Business.  Landlord  represents  and
warrants that,  except as disclosed in Exhibit I (Restricted  Uses) or Exhibit J
(Existing  Uses) , no lease  for space in the  Shopping  Center in effect at the
Effective Date permits operation of a Competing Business.


<PAGE>
     For purposes of this Section 9.2 only, an "Affiliate of |^| Landlord" is an
Affiliate  whose Control results from owning at least fifty percent (50%) of the
interests, stock or voting rights.

     At no time  shall  Landlord  grant  any  exclusive  to any  tenant or other
occupant of space in the Shopping Center that may encumber,  violate or infringe
upon  Tenant's  exclusive use of the Premises.  Landlord's  foregoing  covenant,
warranty and  representation  has  materially  induced Tenant to enter into this
Lease and, if Landlord  breaches  the same,  Tenant shall have the right to seek
appropriate  injunctive  or other  equitable  relief in  addition to any and all
other remedies at law.

     9.3 Objectionable  Uses.  Neither the Premises nor any other portion of the
Shopping  Center  shall be used for any  nonretail  use other than  service uses
common to first-class  shopping centers such as banks,  real estate  brokerages,
and travel  agencies.  Except for the uses listed in Exhibit J (Existing  Uses),
Landlord  shall not lease,  or permit the use of,  any  portion of the  Shopping
Center for any of the following  purposes:  bookstore,  movie or video  business
primarily selling,  exhibiting or delivering  pornographic or obscene materials;
any so-called "head shop"; video or other type of game room or arcade; off-track
betting  parlor;  pawn shop;  business  selling  so-called  "second-hand  goods"
(except for  "high-end  resale"  stores for clothing,  sporting  goods and alike
located in similar quality shopping centers); junk yard; flea market;  recycling
facility  (except as required by or necessitated  by  Governmental  Restrictions
including  those  which  impose fees or  penalties  for the failure to provide a
recycling  facility);  motor  vehicle or boat  dealership  or  storage  facility
(except  at the rear of the  Shopping  Center and not  visible to the  public) ;
vehicle repair shop ( including  lubrication  and/or service  center);  body and
fender  shop;  car wash  facility;  auditorium;  sports  or other  entertainment
viewing facility (whether live, film, audio/visual or video); discotheque, dance
hall,  bar or night  club  unless  part of a  restaurant  located  more than two
hundred feet (200' ) from the Premises;  bowling alley; skating rink; health spa
or exercise facility having more than three thousand (3,000) square feet of GLA;
office other than that  incidental  to  permitted  uses or with rear entry only;
industrial or manufacturing  uses;  restaurant/bar  unless located more than two
hundred feet (200' ) from the Building;  dry cleaning or laundry plant unless an
establishment  that  receives  and  dispenses  items for  laundering  and/or dry
cleaning other than on its premises;  and any training or  educational  facility
including,  for example, a beauty school, barber college, reading room, place of
instruction or any other activity catering  primarily to students or trainees as
opposed to customers (other than one used  exclusively as a children's  tutorial
facility).

     No oil development operations, oil refining, quarrying or mining operations
of any kind shall be permitted upon or in anyportion of the Shopping Center, nor
shall oil wells,  tanks,  tunnels,  or mineral excavation or shafts be permitted
upon the surface of any portion of the Shopping  Center,  or within five hundred
feet (500') below the surface of any portion of the Shopping Center.  No derrick
or other  structure  designed for use in boring for water,  oil,  natural gas or
other minerals  shall be erected,  maintained or permitted on any portion of the
Shopping Center.  Notwithstanding the foregoing,  tanks shall be permitted under
the Shopping Center so long they are maintained or closed in accordance with all
Governmental Restrictions.

    Landlord  shall not  allow  these  uses to  operate  in the Zone of  Control
without Tenant's Reasonable  Approval:  traveling  carnivals,  fairs,  auctions,
shows,  kiosks,  booths for the sale of fire works, sales by transient merchants
utilizing vehicles or booths and other promotions of any nature. If unauthorized
Persons,  including  tenants or  invitees  of tenants  of the  Shopping  Center,
utilize the  Parking Lot for other than  temporary  parking as  customers  while
shopping in the Shopping  Center,  upon  Tenant's  request  Landlord  shall take
whatever action Landlord deems reasonably necessary to prevent said unauthorized
utilization and the cost of such action shall be a Common Area Cost.
<PAGE>
     Landlord approves Tenant's  inventory and FF&E lender's use of the Premises
in accordance with the terms of Exhibit E (Access and Rental Payment  Agreement)
 . Tenant  shall not use or suffer or permit  any Person to use the  Premises  to
conduct an auction,  distress,  fire or  bankruptcy  sale, or for any purpose in
violation  of  applicable  Governmental  Restrictions.  Tenant  shall  keep  the
Premises (including exterior and interior portions of all windows, doors and all
other  glass)  in  a  clean  and  wholesome  condition,  free  of  any  loud  or
objectionable noises (including,  without limitation,  loudspeakers which can be
heard outside of the  Premises),  odors or nuisances and otherwise in compliance
with all applicable health and police Governmental Regulations. Tenant shall not
place a load on any floor  exceeding  the floor load per square  foot such floor
was designed to carry.  Tenant shall not install,  operate or maintain any heavy
item of equipment  in the Premises  except in such manner as to achieve a proper
distribution of weight.

     Except as permitted  under Sections 9.1 and 10.4,  Tenant shall not display
or sell  merchandise  nor allow  carts,  portable  signs,  devices  or any other
objects to remain outside the exterior walls, roof and doorways of the Building,
shall not use the roof of the Premises for any purpose,  and shall not cause, or
do any act that may result in a, violation of the roof bond for the Building.

     9.4 compliance with Governmental  Restrictions.  During the Lease Term, (i)
the  Premises  and each  portion  thereof  shall  comply  with all  Governmental
Restrictions and Tenant shall, at its sole cost and expense,  take such steps as
may be required,  from time to time, to maintain such  compliance,  (ii) neither
the Premises  nor any portion  thereof  shall be  improved,  used or occupied in
violation of any Governmental Restrictions by Tenant, and (iii) Tenant shall not
permit any act to be done or any  condition to exist on the Premises or any part
thereof  or any  article  to be  brought  thereon,  which does not comply in all
respects with all  Governmental  Restrictions or which may be dangerous or which
may make void or voidable  any  insurance  then in force with  respect  thereto.
Tenant shall pay when and as due all license fees,  permit fees and charges of a
similar  nature for the conduct by Tenant or any  subtenant  of any  business or
undertaking authorized hereunder to be conducted in the Premises.

     9.5 Assignment and subletting Provided Tenant is not then in Default,  upon
thirty (30) days' Notice to Landlord, Tenant shall have the right to assign this
Lease, or sublet all or any portion of the Premises with  Landlord's  Reasonable
Approval.  Landlord  shall not withhold its approval of such transfer if (i) the
transferee's  proposed use of the  Premises is  consistent  with a  "first-class
promotional  retail center" and is not an  Objectionable  Use or Restricted Use,
and (ii) the  proposed  transferee  has a  reasonably  acceptable  net worth and
business  experience  respecting its proposed use of the Premises.  Tenant shall
not  require  Landlord s  approval,  and shall be  released  from all Losses and
Liabilities  accruing and arising  under the Lease from and after the date of an
assignment  of the  Lease,  if the  assignee,  in  addition  to  satisfying  the
requirements  of subpart (i) of this Section 9.5, (a) has a minimum net worth of
Five Hundred Thousand Dollars ($500, 000) and (b) has earned a profit during the
past three (3) full fiscal years in operating its retail business.  If Tenant is
not released  because all of the foregoing  criteria are not  satisfied,  Tenant
shall remain fully  responsible under the Lease,  notwithstanding  that Landlord
approves the  assignment.  Tenant's  Notice of an assignment  or sublease  shall
include  evidence of the  transferee's  net worth and past  business  profit (as
shown in  financial  statements  and tax  returns)  and  copies of all  proposed
agreements and documents (collectively, the "Transfer Documents") memorializing,
facilitating and/or evidencing the proposed assignment or sublease. The Transfer
Documents  shall  expressly  provide  that an  assignee  assumes the Lease and a
subtenant is bound by all of Tenant's  duties under the Lease except  payment of
Rent;  provided,  however,  that a subtenant shall become  obligated to pay Rent
under the Lease if the subtenant  fails to surrender  possession of the Premises
upon expiration or earlier termination of the Lease.

     Any single transfer of, or successive transfers  cumulating,  fifty percent
(50%)  or  more of any  stock  or  ownership  interest  in  Tenant  shall  be an
assignment of this Lease for purposes of this Section 9.5.
<PAGE>
     After  receiving  Notice  of  Tenant's  intended  assignment  or  sublease,
Landlord  shall  have the right to  terminate  this  Lease on thirty  (30) days'
Notice to Tenant  unless  Tenant  rescinds  its prior  Notice of  assignment  or
sublease  within said thirty (30) day period.  If the Lease so  terminates,  the
provisions of Section 4.3(c) shall apply.  If Tenant  consummates the assignment
or sublease,  Tenant  shall  promptly  deliver a copy of the  executed  Transfer
Documents to Landlord.

     On the  effective  date of transfer by assignment of this Lease or sublease
of the Premises, the Base Rent for the portion of the Premises transferred shall
be  increased  by  one-half  (1/2)  of all  rent  and  other  consideration  the
transferee  shall pay to Tenant (as and when so paid)  pursuant to the  executed
Transfer  Documents  in excess of the total Rent  otherwise  payable  under this
Lease. In no event shall the Base Rent, after such assignment or subletting,  be
less  than  the Base  Rent  payable  immediately  prior  to such  assignment  or
subletting.

     At all times,  Tenant shall have the right to Mortgage its interest in this
Lease,  provided  the  proceeds of the  Mortgage  are used  solely to  construct
Tenant's Work, make alterations to the Premises under Section 10.3, or otherwise
install FF&E in the Premises.  Before obtaining a Mortgage, Tenant shall deliver
a  complete  copy of the  Mortgage  documents  to  Landlord  for its  Reasonable
Approval as to the form of the documents.

     9.6 Business  operation.  Tenant has no duty to operate any business in the
Premises.  If Tenant does not continuously  operate its business at the Premises
at all times the Shopping  Center is open for business for more than ninety (90)
days  (excluding any period of not more than ninety (90) days while the Premises
are being repaired or restored),  Landlord shall have the right to terminate the
Lease on thirty  (30)  days'  Notice  to Tenant  unless  Tenant  resumes  normal
business  operations at the Premises within said thirty (30) day period.  If the
Lease so terminates, the provisions of Section 4.3(c) shall apply.

     9.7  Noncompetition.  During the first five (5) Lease  Years  after  Tenant
opens for business,  Tenant and its Affiliates shall not directly or indirectly,
as an owner, operator,  proprietor,  manager,  stockholder,  officer,  director,
franchiser, franchisee, principal, agent, lender, consultant or partner, operate
any business  within five (5) miles of the Premises  that directly or indirectly
competes with the business conducted at the Premises;  provided, however, Tenant
is not precluded from  operating  such a business that Tenant  acquires from any
Person that is not an Affiliate of Tenant at the  Effective  Date.  If Tenant or
its Affiliates violate this  non-competition  covenant,  Tenant shall report the
Gross Sales of such competing  business to Landlord which may,  without limiting
its remedies and for so long as Tenant or its  Affiliates  operate the competing
business,  include such Gross Sales of the competing business in the Gross Sales
of the Premises for the purpose of computing the Percentage  Rent due under this
Lease.  If a court of  competent  jurisdiction  determines  that  the  foregoing
non-competition  covenant is illegal or  unenforceable  in whole or in part, the
covenant  shall be revised to conform to the  requirements  of law as such court
shall find.


<PAGE>
                                    ARTICLE X
                             MAINTENANCE AND REPAIRS

     10.1  Landlord   Repairs.   In  addition  to  all  repair  and  maintenance
obligations  not expressly  required of Tenant in Section 10.2,  Landlord  shall
maintain the Premises in good repair as follows.

     Landlord shall maintain all structural portions of the Premises,  including
the Building's walls,  foundations,  floor slab, roof, the roof structure,  roof
membrane, roof drainage system, and all gutters and downspouts,  unless any such
repairs or replacements are necessitated by Tenant's failure to promptly perform
its repair  obligations  pursuant to Section  10.2 or by the wilful or negligent
acts of Tenant, its employees, agents and contractors. Landlord shall repair and
maintain  the HVAC System and those  portions  of all  electrical  and  plumbing
facilities located outside and serving the Building.

      Landlord  shall  repair,  replace  or modify  all  Building  structure  or
component systems as may be required by Governmental  Restrictions pertaining to
the Premises which are not due or  attributable  to Tenant's manner of operating
in the Premises or are not  triggered by Tenant's  alterations  or repairs.  All
such required repairs,  replacements or modifications shall be commenced as soon
as it is  determined  they are required and shall be  diligently  prosecuted  to
completion and, until completed and, if necessary, certified by the governmental
entity involved, the Base Rent shall be proportionately  reduced to reflect that
portion of the Premises not usable by Tenant.  Landlord's obligations under this
paragraph  are subject to the same  monetary  limitation  as provided in Section
12.1 respecting a Major Casualty.

     In making any repairs hereunder, Landlord shall give Tenant as much advance
Notice as practicable under the circumstances of Landlord's intention to perform
such repairs,  including a description  of the manner in which the intended work
is to be accomplished  and an estimated time for its  completion,  and shall not
unreasonably interfere with Tenant's normal operations at the Premises.

     10.2 Tenant  Repairs.  Except for those items  Landlord  shall maintain and
repair in accordance  with Section 10.1, from and after the Delivery Date Tenant
shall  repair,  replace and  maintain,  at Tenant's  sole cost and in a good and
tenantable  condition  consistent  with the highest  quality of Tenant's  stores
operating at the Effective  Date,  all interior,  nonstructural  portions of the
Premises,  including:  plate glass in the storefront;  component systems serving
only the Premises (excluding the HVAC System but including those portions of all
electrical  and plumbing  facilities  located inside and serving the Building) ;
fixtures;  signs;  locks and closing  devices;  all window sashes,  casements or
frames;  door and door frames;  floor  coverings,  carpeting,  terrazzo or other
special  flooring;  any loading  platform,  truck dock and/or truck  maneuvering
space in the Common  Area that Tenant uses  exclusively;  and any  nonstructural
portions  of  the  Premises  that  Governmental  Restrictions,  whether  or  not
presently   in  effect  or   anticipated,   require  be   repaired  or  altered.
Notwithstanding the foregoing,  if such repairs or replacements are necessitated
by Landlord's  failure to perform  promptly its obligations  pursuant to Section
10.1,  by  the  wilful   misconduct  or  negligent   acts  of  Landlord  or  its
Representatives,  or by damage  from fire or other  casualty  which  Landlord is
responsible  to repair  pursuant  (except to the extent Tenant is responsible to
repair any Improvements constituting Tenant's Work or alterations by Tenant), in
which case Landlord shall repair the same in accordance with Section 10.1.
<PAGE>
     10.3 Alterations and Construction.  From time to time at its expense on not
less than fifteen ( 15 ) days'  Notice to Landlord,  Tenant shall have the right
to make interior,  nonstructural  alterations to the Premises without  obtaining
Landlord's consent , provided that such alterations do not impair the structural
integrity  of  the  Premises.   Prior  to  making  any  structural  or  exterior
alterations  to the  Premises,  Tenant  shall so Notify  and  deliver  plans and
specifications therefor to Landlord for Landlord's Reasonable Approval. Landlord
shall execute all necessary instruments necessary to obtain licenses and permits
from the  applicable  governmental  authorities  in order to make such permitted
alterations.  All  permanent  alterations,  additions and  improvements  made by
Tenant  to  the  Premises  shall  become  the  property  of  Landlord  upon  the
termination  of this Lease,  without any  compensation  to Tenant,  and shall be
surrendered at such time as a part of the Premises.

     All alterations and construction  Tenant performs or causes to be performed
at the Premises, including Tenant's Work, shall (i) comply with all Governmental
Restrictions and, in all material  respects,  with the plans and  specifications
therefor Landlord shall have approved,  if this Lease so requires,  (ii) be done
in a good,  workmanlike manner with materials of only high quality; and (iii) be
performed so as not to  unreasonably  interfere with the business,  construction
of, or access to,  the  premises  of any other  tenant at the  Shopping  Center.
Tenant shall promptly repair any damage to the Shopping Center or other property
of Landlord that Tenants alterations and/or construction cause.

     10.|^|  Fixtures.  All FF&E that Tenant  installs in the  Premises,  at its
expense,  prior to or during  the Lease  Term shall  remain  Tenant's  property,
notwithstanding whether applicable law deems such FF&E to be part of the realty,
and Tenant or the FF&E lessor shall have the right to remove such FF&E, provided
that Tenant and such lessor shall  repair,  at their sole cost and expense,  any
material damage to the Premises  caused by such removal,  other than normal wear
and tear.  Notwithstanding  the  foregoing,  in no event shall Tenant remove any
light  fixtures  installed  in the Premises  without  Landlord's  prior  written
consent which may be withheld in Landlord's sole discretion.

     Tenant shall be  permitted  to install on its  Premises  telecommunications
equipment,  subject  to  applicable  Governmental  Restrictions.   Tenant  shall
maintain and repair said  installation,  and to the extent the roof  membrane is
penetrated by the roof structure is affected thereby, Tenant shall thereafter be
responsible  for the repair and maintenance of the roof, roof structure and roof
membrane.  Tenant shall also be responsible for any injury or damage  occasioned
to person or property  resulting  from its  penetration of the roof membrane and
shall and hereby agrees to Indemnify Landlord and its  Representatives  from any
Losses and Liabilities arising therefrom.

      10.5 Liens.  Each Party shall promptly pay when due the entire cost of all
work or  materials  either  Party  supplies to the  Premises  and shall keep the
Premises free of liens for labor or materials. Should mechanics',  materialmen's
or other  liens be filed  against  the  Premises by reason of the acts of either
Party,  such Party shall cause the lien to be canceled and  discharged of record
by bond or otherwise  on thirty (30) days'  Notice of such lien.  At any and all
times  during  the Lease  Term,  both  Parties  shall have the right to post and
maintain  on the  Premises,  and to record as  required  by law,  all notices of
non-responsibility  provided  for by the  mechanics'  lien  laws of the State of
California.  Each Party shall  promptly pay when due the entire cost of all work
or materials either Party supplies,  or has supplied,  to the Premises and shall
keep the  Premises  free of liens for  labor or  materials.  Should  mechanics',
materialmen's or other liens be filed against the Premises by reason of the acts
of either Party,  such Party shall cause the lien to be canceled and  discharged
of record by bond or otherwise on thirty (30) days' Notice of such lien.  Should
either  Party fail to pay and  discharge,  or cause the  Premises to be released
from any such lien or claim of lien or to provide a bond or other  assurance  as
permitted  hereunder on thirty (30) days'  Notice,  the affected  Party may pay,
adjust,  compromise  and  discharge any such lien or claim of lien on such terms
and in such manner as such Party deems appropriate and the Noticed Party, shall,
on demand,  reimburse the affected Party for the full amount so paid,  including
all Losses and  Liabilities,  together with interest  thereon at the Agreed Rate
from the date of payment.
<PAGE>

      10.6 Rubbish Removal. Tenant shall not burn any materials on the Premises.
At its sole cost,  Tenant  shall  accumulate  all rubbish  from the  Premises in
covered containers located in those areas of the Premises and/or Shopping Center
designated  for such use and shall  cause such  rubbish  to be removed  from the
Shopping Center regularly.


                                   ARTICLE XI
                              INSURANCE; INDEMNITY

     11.1  Landlord's  Insurance.  From and after the Effective  Date,  Landlord
shall maintain or cause to be maintained:

     (a) commercial  general  liability  insurance for bodily  injury,  personal
injury and damage to property,  including Landlord's  contractual  liability for
Indemnity hereunder,  covering only Landlord's use, operation and maintenance of
the  Common  Area,  naming  Tenant as an  additional  insured,  with a  minimum,
combined  single limit of $3,000,000,  per occurrence and in the aggregate,  and
with an annual deductible not to exceed $25,000;

     (b) "all-risk"  property  insurance covering the Shopping Center (including
the  Building  and the  Common  Area)  for the full  replacement  cost  thereof,
providing  protection against perils included in the standard form of "all-risk"
insurance  policy for  California,  together with  insurance  against  sprinkler
damage, vandalism, and malicious mischief;

     (c) workers'  compensation for Landlord's employees or similar insurance to
the extent required by law; and

     (d) rental interruption insurance (and business loss insurance, if required
by Landlord's  Mortgagee) in an amount  sufficient to cover any loss of rents or
income from the  Premises  and the  Shopping  Center  suffered by Landlord for a
period of twelve (12) months.

     Tenant shall pay  Landlord,  as a component of Common Area Costs,  Tenant's
Share of the cost to Landlord of the  insurance  required  to be  maintained  by
Landlord  under  Section 11.1 (the  "Insurance  Costs" ) for each  calendar year
during the Lease Term.

     11.2 Tenant's  Insurance.  From and after the Delivery  Date,  Tenant shall
maintain:

     (a) commercial  general  liability  insurance for bodily  injury,  personal
injury  and  property  damage,  including  Tenant's  contractual  liability  for
Indemnity  hereunder,  covering  Tenant's use,  operation and maintenance of the
Premises,  with a minimum,  combined single limit of $1,000,000,  per occurrence
and in the aggregate,  and with an annual  deductible not to exceed $25, 000. On
the fifth anniversary of the Effective Date and every five (5) years thereafter,
the above  prescribed  minimum  coverages  shall be increased,  upon Notice from
Landlord,  to levels reasonably  determined by Landlord to be customary in other
shopping centers in the vicinity of the Shopping Center;

     (b)  workers'  Compensation  for the benefit of Tenant's  employees  to the
extent required by law;

     (c) all risk property  insurance  covering the Improvements,  providing the
same type of protection described in Section 11.1(b); and

     (d) before  commencement of Tenant's Work, Tenant shall procure or cause to
be procured,  and shall  maintain in force until  completion  and  acceptance of
Tenant's Work (i) "all risks" builder's risk insurance,  including  coverage for
vandalism  and  malicious  mischief,  in a form and  amount  and with a  company
reasonably  acceptable  to Landlord,  and (ii) worker's  compensation  insurance
covering all persons  employed in connection  with such work on the Premises and
with respect to whom death or bodily  injury  claims  could be asserted  against
Landlord or the Premises.

<PAGE>
     11.3  Insurance  Certificates.  All of  the  foregoing  insurance  policies
required  pursuant to  Sections  11.1 and 11.2 shall be written  with  companies
licensed to do business in the state in which the  Premises  are located  with a
financial rating of VIII or better and a policyholder's  rating of A- or better,
as  defined  in the  latest  edition of Best's  Rating'  Guide on  Property  and
Casualty  Insurance  Companies  published as of the  Effective  Date,  and shall
provide  that the other Party shall be given at least ten ( 10 ) days' Notice by
any such insurance company prior to the cancellation,  termination or alteration
of the terms or limits of such  coverage.  Each Party shall deliver to the other
Party the  foregoing  insurance  policies or  certificates  thereof prior to the
tender of  possession  of the Premises to Tenant and evidence of all renewals or
replacements of same not less than ten (10) days prior to the expiration date of
such  policies.  All such  policies may be  maintained  under a Party's  blanket
insurance policy.

     11.4  Mutual  Release;  Waiver of  Subrogation.  Notwithstanding  any other
provision  of the Lease to the  contrary,  for itself  and any  Person  claiming
through or under it by way of  Subrogation,  each  Party  hereby  releases,  and
waives  all claims  against,  the other  Party  with  respect to any loss of, or
damage to,  property,  whether or not caused by the  negligence  or fault of the
other Party,  to the extent such loss or damage is insured  under the  releasing
Party's "all risk"  property  insurance  required to be carried by Sections 11.1
and 11.2. In addition,  Landlord and Tenant shall each cause their  insurers for
the  Premises,  the Shopping  Center or the  contents  thereof to waive in their
insurance  policies  all rights of  recovery by way of  Subrogation  against the
other Party in  connection  with any loss or damage to property  covered by such
policies.

     11.5  Mutual  Indemnification.  Subject to Section  11.4 ,  Landlord  shall
Indemnify Tenant from and against all Losses and Liabilities arising from injury
to any Person or  property,  or loss of life,  arising  out of  Landlord's  use,
operation or maintenance of the Shopping Center,  exclusive of the Premises, and
Tenant  shall  Indemnify  Landlord  from and against all Losses and  Liabilities
arising from injury to any Person or property,  or loss of life,  arising out of
Tenant's use,  operation or maintenance of the Premises.  The Parties' Indemnity
obligations  hereunder  shall survive the  expiration or earlier  termination of
this Lease.

                                   ARTICLE XII
                              DAMAGE OR DESTRUCTION


     12.1 Damage or  Destruction.  From and after the Effective  Date, if either
the Premises or the Shopping  Center is  damaged|^||^|r  destroyed by a casualty
loss,  Landlord shall  promptly and diligently  rebuild and restore the Premises
and the Shopping Center, at its expense, to their condition existing immediately
prior to such damage or destruction,  excluding trade fixtures Tenant shall have
installed. All Base Rent and Tenant's Share of Common Area Costs and Real Estate
Taxes shall be prorated as of the date of  occurrence  of a casualty  and abated
until  restoration  is  completed.  Tenant  shall have the right to continue the
operation of its  business on the Premises  during any such period to the extent
reasonably  practicable,  in Tenant's sole discretion;  and in such event,  Base
Rent and Tenant's obligation to pay Tenant's Share of Common Area Costs and Real
Estate Taxes shall be abated,  based on the  proportion  that the Gross Sales at
that time bear to the  Gross  Sales  during  the most  comparable  period of the
immediately  preceding Lease Year, less any unusual costs and expenses  incurred
by Tenant  occasioned by the damage or destruction or to accommodate  the repair
and restoration.
<PAGE>
      If the  Building  or the  Shopping  Center are  damaged as a result of any
casualty  not  required to be covered by  Landlord's  insurance  or any casualty
covered by Landlord's  insurance but, for whatever reason,  the proceeds thereof
are  insufficient  to effect the  complete  restoration  thereof  and, in either
event,  the  out-of-pocket  costs of Landlord to effect such  restoration  would
exceed the greater of Fifty Thousand  Dollars  ($50,000) or ten percent (10%) of
the replacement cost thereof (a "Major  Casualty"),  Landlord may, within ninety
(90) days following the date of the casualty, commence repair, reconstruction or
restoration  of the Building or the Shopping  Center,  in which event this Lease
shall continue in full force and effect,  or within such 90-day period elect not
to so repair,  reconstruct  or restore the  Premises,  in which event this Lease
shall cease and  terminate.  In either such  event,  Landlord  shall give Tenant
thirty (30) days'  Notice of  Landlord's  intention  within such 90-day  period.
Tenant  may elect to bear the  excess  cost of  repair  and  restoration  of the
Building in which  event it shall  deliver  Notice to  Landlord of its  election
within said 30-day  period;  in such event,  Landlord shall restore the Building
upon Tenant's deposit with Landlord of such excess restoration cost.

     If Landlord  does not commence  the repair and  restoration  work  required
pursuant to this  Section  12.1  within  ninety (90) days after the date of such
damage or  destruction,  or thereafter  does not diligently  pursue such work to
completion,  then Tenant shall have the right, at Tenant's option,  to: (a) seek
specific  performance of Landlord's repair and restoration  obligations pursuant
to applicable  law (except in the event  Landlord has  terminated  this Lease as
provided herein above);  or (b) terminate this Lease on thirty (30) days' Notice
to Landlord without waiving Tenant's rights to damages for Landlord's failure to
perform its covenants and obligations hereunder.

     12.2 During Last Three Years.  Notwithstanding  the  provisions  of Section
12.1,  if during the last three (3) Lease  Years,  the  Premises or the Shopping
Center is damaged to the extent of  thirty-five  percent  (35%) or more of their
respective full restoration costs (exclusive of the land and foundations),  then
this Lease may be  terminated  at the  election  of either  Landlord  or Tenant,
provided that Notice of such election  shall be delivered by the electing  Party
to the other  within  thirty  (30) days after the  occurrence  of such damage or
destruction.  Notwithstanding  the  foregoing,  however,  if at the time of such
damage or destruction Tenant has the right to extend the Lease Term, then Tenant
may elect to  exercise  such  right  within  twenty  (20) days  after  Notice of
Landlord's election to terminate pursuant to this Section 12.2, and in such case
Landlord's  Notice of  termination  shall be void and Landlord  shall repair and
restore the Premises or the Shopping  Center,  if required by and as provided in
Section 12.1.

     12.3 Termination. If this Lease is terminated pursuant to this Article XII,
(i) neither Party shall  thereafter have any further  liability or obligation to
the other or to any third  party with  respect to this Lease  (except  for items
which have previously  accrued and remain unpaid and except for any liability of
Tenant or Landlord which survives such  termination),  (ii) Tenant shall have no
further rights whatsoever with respect to the Premises,  and (iii) all Rent paid
by Tenant for periods after the date of termination shall be promptly refunded.
<PAGE>
                                  ARTICLE XIII
                                 EMINENT DOMAIN

     13.1 Automatic Termination. From and after the Effective Date, if the whole
of the  Premises  shall be taken under power of eminent  domain by any public or
private  authority,  or conveyed by Landlord to said  authority  in lieu of such
taking,  then this Lease and the Lease Term shall cease and  terminate as of the
date of such taking;  provided,  however,  Tenant  shall have the right,  at its
election,  to  continue  to  occupy  the  Premises,  subject  to the  terms  and
provisions of this Lease, for all or such part, as Tenant may determine,  of the
period  between  the date of such  taking  and the date when  possession  of the
Premises  shall be taken by the taking  authority,  and Landlord shall refund to
Tenant any unearned  Rent,  if any,  Tenant shall have paid in advance  which is
applicable  to the period after the date  possession of the Premises is taken by
the taking authority.

     13.2 Termination  Right.  From and after the Effective Date , if any taking
under  the power of  eminent  domain by a public  or  private  authority  or any
conveyance by Landlord in lieu thereof shall result in:

     (a) reduction of fifteen  percent (15%) or more of the G.A. of the Building
or of fifteen percent (15%) or more of the G.A. of the Shopping Center exclusive
of the Premises;

     (b) a.reduction of ten (10%) percent or more of the Parking Lot;

     (c) a taking that results in the closing of any  material  entrance or exit
to the Shopping Center; or

     (d) a taking of any  portion of the Common  Area,  the access  roads to the
Premises or the Shopping Center,  which taking materially  impedes or materially
interferes  with access to the Premises,  or  materially  affects the conduct of
Tenant's business conducted at the Premises,  then within thirty (30) days after
Notice of such  taking,  Tenant may, at its  election,  terminate  this Lease on
thirty (30) days'  Notice to  Landlord.  If Tenant so elects to  terminate  this
Lease, this Lease and the Lease Term shall cease and terminate as of the date of
the  expiration of Tenant's  Notice;  provided,  however,  Tenant shall have the
right, as its election, to continue to occupy the Premises, subject to the terms
and provisions of this Lease,  for all or such part, as Tenant may determine for
the period  between the date of such taking and the date when  possession of the
Premises  shall be taken by the  appropriating  authority,  and  Landlord  shall
refund to Tenant any unearned  Rent Tenant  shall have paid in advance  which is
applicable  to the period after the date  possession of the Premises is taken by
the taking authority.

     13.3 Restoration. In the event of a taking in respect of which Tenant shall
have no right to terminate this Lease or, having such right,  shall have elected
not to  terminate  this Lease,  this Lease and the Lease Term shall  continue in
full force and effect and  Landlord,  at  Landlord's  sole cost and expense (but
only to the extent of proceeds  received from the condemning  authority),  shall
promptly  and  diligently  proceed  to restore  the  remaining  portions  of the
Premises and Common Area to an  architectural  whole in  substantially  the same
condition as they existed prior to such taking.  An equitable  proportion of the
Base Rent and Tenant's Share of Common Area Costs and Real Estate Taxes shall be
abated,  as provided in the first paragraph of Section 12.1 until the completion
of such  restoration  and thereafter the Base Rent and Tenant's Shares of Common
Area  Costs  and Real  Estate  Taxes  shall be  reduced  proportionately  to the
reduction in the GLA of the Premises.

     13.4 Award. All compensation awarded for any taking,  whether for the whole
or a portion of the  Premises,  shall belong to Landlord,  provided  that Tenant
shall be entitled to any award made,  whether to Landlord or to Tenant,  for the
unamortized  cost of Tenant's  Improvements  (but only to the extent that Tenant
paid for same pursuant to the Work Letter, or otherwise) , moving and relocation
expenses,  the value of Tenant's trade fixtures,  for any other  compensation as
provided under  applicable  federal and state laws and for the loss of the bonus
value, if any, in Tenant's  leasehold  estate.  With respect to any compensation
awarded for any taking, Landlord shall immediately pay to Tenant from the amount
received by Landlord any amount specifically awarded for the aforesaid interests
of Tenant,  except to the extent that Tenant  receives a separate award from the
condemning authority to cover such losses.

    13.5 Termination. If this Lease is terminated pursuant to this Article XIII,
(i) neither Party shall  thereafter have any further  liability or obligation to
the other or to any third  party with  respect to this Lease  (except  for items
which have previously




<PAGE>
accrued  and remain  unpaid and except for any  liability  of Tenant or Landlord
which  survives  such  termination),  (ii) Tenant  shall have no further  rights
whatsoever  with respect to the Premises,  and (iii) all Rent paid by Tenant for
periods after the date of termination shall be promptly refunded.

                                   ARTICLE XIV
                                     DEFAULT

     14.1 Default.  The  occurrence  of any one or more of the following  events
constitutes a Default of Tenant or Landlord, as applicable:

     (a) Tenant's failure to pay any Rent when due;

     (b) either  Party's  failure to observe and  perform  any other  condition,
restriction,  covenant,  obligation or provision of this Lease to be observed or
performed by Tenant or Landlord, as applicable, including without limitation the
inaccuracy of any representation or warranty set forth herein or Tenant's breach
of Articles IX or XVI;

     (c) Tenant's  abandonment or vacation of the Premises,  including  Tenant's
failure to take possession of the Premises as required herein for more than five
(5) successive days;

     (d) a general  assignment  by Tenant for the benefit of  creditors,  or the
filing by or against Tenant of any proceeding under any insolvency or bankruptcy
law  (unless  in the  case of a  proceeding  filed  against  Tenant  the same is
dismissed  within sixty (60) days),  or the appointment of a trustee or receiver
to take possession of all or  substantially  all of the assets of Tenant (unless
possession is restored to Tenant within thirty ( 3 0 ) days ) , or any execution
or other judicially  authorized  seizure of all or substantially all of Tenant's
assets  located upon the Premises or of Tenant's  interest in this Lease (unless
such seizure is discharged within thirty (30) days), or Tenant's  convening of a
meeting of its  creditors  or any class  thereof for the purpose of  effecting a
moratorium upon or composition of its debts;

     (e) Tenant  conducting an auction,  distress,  fire or bankrupt- cy sale in
violation of Section 9.3; or

     (f) either Party's violation of any of its obligations respecting Hazardous
Substances  as set forth in Section  20.14.  t 14.2 Notice of Default;  Right to
Cure. If either Party has  committed or permitted to exist a Default,  the other
Party shall have the right to give Notice of said  Default ( "Notice of Default"
) to the Party in  Default  and its  Mortgagee,  if Section  14.12 so  requires.
Following  the  giving of the Notice of  Default,  the  nonperformance  which is
complained  of  shall  constitute  an  "Uncured  Default"  of the  Party if such
nonperformance continues for the applicable period set forth herein below.

     (a) For  nonpayment of Rent,  the Notice of Default shall afford Tenant ten
(10) days to cure the Default.

     (b) For a Default  described  in  Section  14.1(b)  or (c),  the  Notice of
Default  shall  afford the Party in Default  thirty  (30) days  within  which to
commence promptly, and prosecute diligently and continuously to completion,  the
cure of such Default;  provided,  however, that if the nature of said Default is
such that the Default cannot reasonably be cured within said 30-day period,  the
Party in Default shall have such additional  time as is reasonably  necessary to
cure such Default,  provided such cure is completed within sixty (60) days after
delivery of the Notice of Default.

     (c) A Default  described in Section  14.1(d)  shall  constitute an "Uncured
Default" of Tenant  without the need for Landlord to give a Notice of Default or
Tenant being afforded any time period to cure such Default.

     (d) For a Default described in Section 14.1(e), the Notice of Default shall
afford Tenant twenty-four (24) hours to cure the Default.

     (e) For a Default described in Section 14.1(f), the Notice of Default shall
require the Defaulting Party to commence curing the Default within five (5) days
but shall  afford such Party as much time as is  necessary  to cure the Default,
provided the Defaulting Party commences promptly,  and prosecutes diligently and
continuously to completion, such cure.

    Any  Notice  of  Default   shall  also  be  deemed  to  satisfy  the  notice
requirements  under California Code of Civil Procedure Section 1161, as the same
may be amended hereafter from time to time, and no additional notice pursuant to
California  Code of Civil  Procedure  Section 1161 shall be required in order to
commence an unlawful detainer proceeding.

     14.3 Limitation on Landlord's  Liability.  Notwithstanding  anything to the
contrary in this Lease,  any money judgment  Tenant may obtain against  Landlord
resulting from any Uncured Default or other claim arising under this Lease shall
be  satisfied  only  out  of  the  rents,  issues,   profits  and  other  income
(collectively  "Income")  actually  received  from  Landlord's  operation of the
Shopping Center


<PAGE>
after entry of such judgment,  and no other real,  personal or mixed property of
Landlord or its Representatives,  wherever situated, shall be subject to levy on
any such judgment.  If there is a deficiency because such Income is insufficient
to satisfy such  judgment,  Tenant  waives,  and shall not institute any further
action,  suit,  claim or demand,  in law or in equity,  against  Landlord or its
Representatives to satisfy, such deficiency.

     14.4  Landlord's  Remedies.  In the event of any Uncured Default by Tenant,
Landlord may, at its option and in addition to any other  remedies  available to
it at law or in equity,  without  further Notice or demand of any kind to Tenant
or any other Person:

      (a) Declare the Lease Term ended and reenter the Premises and the Building
and take possession thereof and remove all Persons  therefrom,  and Tenant shall
have no further claim thereon or hereunder; or

     (b)  Without  declaring  this Lease  ended,  reenter the  Premises  and the
Building  and occupy the whole or any part  thereof for and on account of Tenant
and collect any unpaid Rent which has, , or may thereafter, become payable; or

     (c) Even though  Landlord may have  reentered the Premises or the Building,
thereafter  elect to terminate  this Lease and all of the rights of Tenant in or
to the Premises and the Building.

     Should  Tenant  have  surrendered   possession  of,  and/or  Landlord  have
reentered,  the Premises or the Building  pursuant to a Notice of Default or any
notice other  statutory  notice from Landlord to Tenant,  Landlord  shall not be
deemed to have  terminated this Lease or the liability of Tenant to pay any Rent
thereafter  accruing or damages under any of the  provisions  hereof by any such
reentry  or by any  unlawful  detainer  proceeding  or other  action  to  obtain
possession  of the Premises  and/or the  Building,  unless  Landlord  shall have
delivered  a Notice  to  Tenant  expressly  declaring  Land-lord's  election  to
terminate this Lease.

     14.5 Election to Terminate.  Should  Landlord elect to terminate this Lease
pursuant to the provisions of clauses (a) or (c) of Section 14.4 above, Landlord
may recover from Tenant as damages, the following:

     (a) The worth at the time of award of any unpaid Rent which had been earned
at the time of such termination; plus

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

     (c) The worth at the time of award of the amount by which the  unpaid  Rent
for the balance of the Lease Term after the time of award  exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus r (d)|^|
Any  other  amount  necessary  to  compensate  Landlord  for all  the  detriment
proximately  caused by Tenant's  failure to perform its  obligations  under this
Lease or which in the  ordinary  course  of  things  would be  likely  to result
therefrom  including,  without  limitation,  any costs or  expenses  incurred by
Landlord in (i) re-

<PAGE>
taking  possession  of the  Premises  and  the  Building,  including  reasonable
attorney  fees,  (ii)  maintaining  or preserving  the Premises and the Building
after such Default,  and (iii) any other costs necessary or appropriate to relet
the Premises such as repairs or alterations  to the Premises to facilitate  such
reletting and leasing commissions; plus

     (e) At Landlord's  election,  such other amounts in addition to, or in lieu
of, the foregoing as may be permitted from time to time by the laws of the State
of California.

     As used in clauses  (a) and (b) above,  the "worth at the time of award" is
computed by allowing  interest at the highest lawful rate. As used in clause (c)
above,  the "worth at the time of award" is 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 (1%).  For all purposes of this Section 14.5,  Percentage
Rent and Additional  Rent shall be computed on the basis of the average  monthly
amount  thereof  accruing  during  the  immediately  preceding  sixty (60) month
period,  except that if it becomes necessary to compute such amounts before such
a sixty (60) month period has  occurred,  then such amounts shall be computed on
the basis of the average monthly amounts accruing during such shorter period.

     14.6 Alternative Damages.  Should Landlord elect to bring an action against
Tenant in unlawful  detainer or for damages or both or otherwise  (and  Landlord
may bring as many  actions as Landlord may elect to bring  throughout  the Lease
Term) , without  terminating  this Lease and in  addition  to  Tenant's  ongoing
obligations thereunder,  Landlord may recover from Tenant as damages the Rent as
it becomes due.

    14.7 Additional  Remedy. The Landlord has the remedy described in California
Civil Code  Section  1951.4  whereby  Landlord  may continue the Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due without
the need to re-enter or re-lease the Premises

     14.8  Prevailing  Party.  If either Party  institutes  any judicial  action
against the other for any legal or equitable relief with respect to any Default,
the  prevailing  Party in such  action  shall be  entitled  to recover  from the
non-prevailing  Party, as part of the prevailing Party's costs or damages in the
action,  said  prevailing  Party's  reasonable  attorney fees and costs incurred
sincecommencement of the action, as the court shall fix.

     A Party  shall be deemed  "prevailing"  if such Party by law is entitled to
recover  its costs in the  action,  whether or not the action  proceeds to final
judgment.  A Party not entitled to recover its costs shall not recover  attorney
fees; provided,  however, where a Party shall have instituted and then dismissed
an action  against a  defendant  Party,  without the  concurrence  of such other
Party,  such  defendant  Party shall be the  prevailing  Party. A final judgment
shall specify the prevailing  Party|^|s right to recover its costs of the action
(including  attorney  fees and costs)  incurred  in  enforcing,  perfecting  and
executing such judgment,  including all costs incurred in connection with any of
the following:  (i)  post-judgment  motions;  (ii) contempt  proceedings;  (iii)
garnishment, levy, and debtor/third party examinations;  (iv) discovery; and (v)
bankruptcy  litigation.  The term "attorney  fees" shall include fees of outside
legal  counsel  and  reasonable  costs  allocable  to a Party's  in-house  legal
counsel.

    14.9 Landlord's Right to Cure Tenant's Uncured Defaults. After expiration of
the applicable time for curing a particular Default, Landlord may, at Landlord's
election,  make any payment  (other than Rent payable to  Landlord)  required of
Tenant  under this Lease or perform or comply  with any  covenant  or  condition
imposed on Tenant  under this Lease and,  except as may  expressly  be  provided
otherwise under this Lease,  the amount so paid, plus the reasonable cost of any
such  performance or  compliance,  plus interest on such sum at the Agreed Rate,
from the date of payment, performance, or compliance until the date of repayment
by Tenant, shall be due and payable by Tenant, on demand, as Additional Rent. No
such act shall  constitute  a waiver of any Default or of any remedy for Default
or render  Landlord  liable for any loss or damage  resulting  from any such act
(except to the extent such loss or damage arises from  Landlord's  negligence or
intentional or willful misconduct).

     14.10  Remedies  Cumulative.  All  remedies of  Landlord  or Tenant  herein
created or otherwise  existing at law or in equity are  cumulative and a Party's
exercise  of one or more  rights or  remedies  shall not be deemed to exclude or
waive such Party's  right to exercise of any other.  All rights and remedies may
be exercised and enforced  concurrently and whenever and as often as Landlord or
Tenant shall deem necessary.

      14.11 Mortgagee Protection  Contemporaneously  with service of a Notice of
Default on a Party in Default,  the serving  Party shall  deliver a copy of such
Notice to any  Mortgagee  of the Party in Default of whose name and  address the
Party in Default shall have previously given Notice to the serving Party.

      In  addition  to all time  periods  afforded  the  Defaulting  Party,  its
Mortgagee  shall have ten (10) days to cure each monetary,  and thirty (30) days
to cure each  non-monetary,  Default.  Landlord's  Mortgagee shall become liable
only for Landlord's Lease obligations


<PAGE>
accruing  and  arising  from and after the date  Landlord's  Mortgagee  acquires
Landlord's fee and  reversionary  estates in the Shopping  Center by judicial or
non-judicial  foreclosure or  d|^|:ed-in-lieu  thereof.  Upon acquiring Tenant's
leasehold  estate  by  judicial  or  non-judicial  foreclosure  or  deed-in-lieu
thereof,  Tenant's  Mortgagee  shall  become  liable for all of  Tenant's  Lease
obligations whenever accruing or arising.


                                   ARTICLE XV
                           COVENANT OF QUIET ENJOYMENT

     15.1  Covenant of Quiet  Enjoyment.  Landlord  covenants  and warrants that
Landlord is the true and lawful  owner of the  Premises,  subject  only to those
matters Landlord has disclosed in writing to Tenant prior to the Effective Date,
and has good right and full power to lease the same. Landlord agrees that Tenant
shall,  so long as Tenant is not in Default  hereunder,  quietly  and  peaceably
hold, possess and enjoy the Premises and the nonexclusive use of the Common Area
of the Shopping Center from and after the Effective Date,  without any hindrance
or molestation by the agents or employees of Landlord.

     Landlord shall defend Tenant's right to use and enjoy the Premises  against
the claims of all other Persons, except those claiming by or through the Tenant.
Landlord  covenants that Tenant's  customers,  employees and visitors shall have
continuous  access to Tenant's  Premises from all entries to the Shopping Center
by way of the public streets bordering the Shopping Center. If all access to the
Premises is prohibited other than temporarily, such prohibition shall constitute
Landlord's Default of its covenant of quiet enjoyment. Landlord shall diligently
cure such Default within thirty (30) days of Tenant's  delivery to Landlord of a
Notice of Default with  respect  thereto.  If such Default is not cured,  Tenant
shall have the right to terminate this Lease without further liability by either
Party thereafter.

     15.2  Representation and Warranty.  Landlord hereby represents and warrants
that  Landlord,  its  successors  or assigns  shall not enter into,  or agree to
modify,  amend,  revise or change any  documents,  including  any  declarations,
easements,  restrictions,  or  other  similar  instruments  that  are  or may be
recorded  against the Shopping Center or the Premises,  or that otherwise affect
the Shopping  Center,  the  Premises,  or the rights and/or  obligations  of the
Tenant, in a way which materially and detrimentally affects the rights of Tenant
hereunder without first obtaining  Tenant's prior consent,  which consent Tenant
may withhold in its sole and absolute discretion.


                                   ARTICLE XVI
                                  SUBORDINATION

     This Lease is and shall  automatically  be subject and  subordinate  to any
Mortgage of Landlord  which now or in the future may affect the  Premises or any
portion thereof, and to all renewals, additions, modifications,  consolidations,
replacements and extensions of same. Although the provisions of this Article XVI
are  intended  to be  self-operative,  on ten (10) days'  Notice,  Tenant  shall
execute, acknowledge and deliver a Subordination, Non-disturbance and Attornment
Agreement, provided such agreement contains the following provisions: (i) in the
event of foreclosure or other


<PAGE>
action  taken by  Landlord's  Mortgagee,  this  Lease  and the  rights of Tenant
hereunder shall not be disturbed or diminished, but shall continue in full force
and effect so long as Tenant  complies  with the terms hereof;  (ii)  Landlord's
Mortgagee shall permit insurance proceeds and proceeds from condemnation  awards
to be used for any  restoration and repair required by Article XI or Article XII
of this Lease; and (^n i) Tenant shall attorn and recognize Landlord's Mortgagee
as Landlord  hereunder.  In  addition,  Tenant  shall  execute any and all other
documents  or  instruments  Landlord  shall  reasonably  request as necessary or
proper to assure the  subordination of this Lease to Landlord's  Mortgage or any
renewal,  addition,  modification,   consolidation,   replacement  or  extension
thereof.  Tenant's  failure to timely execute any of the foregoing  after Notice
from Landlord shall constitute a Default of Tenant.

     Should  Landlord  sell,  convey or transfer  its  interest in the  Shopping
Center or should  any  Mortgagee  of  Landlord  succeed to  Landlord's  interest
through  foreclosure  or deed in lieu  thereof  ,  Tenant  shall  attorn to such
succeeding  party  as its  landlord  under  this  Lease  promptly  upon any such
succession, provided that such succeeding party assumes all of Landlord's duties
and obligations  under this Lease. Such succeeding party shall not be liable for
any of Landlord's  obligations  and duties  hereunder prior to its assumption of
Landlord's  duties  and  obligations  hereunder,  except  that  Tenant  shall be
entitled  to any  offsets  or  defense  which  may  have  arisen  prior  to such
succeeding party's  assumption,  which such offsets or defenses are specifically
provided herein or are otherwise permitted by law.


                                  ARTICLE XVII
                              TRANSFERS BY LANDLORD

     No transfer or sale of Landlord's interest hereunder shall release Landlord
from any of its  obligations  or duties  hereunder  accruing  or  arising  prior
thereto.  Landlord  shall be released  from all ongoing  obligations  arising or
accruing  under this Lease  from and after the date of such  transfer  (provided
Landlord's  transferee  shall have  assumed all of  Landlord's  duties under the
Lease) or the date  Landlord's  Mortgagee  succeeds to Landlord's  estate in the
Shopping  Center by  judicial  or  non-judicial  foreclosure  or  deed-in-  lieu
thereof.  Notwithstanding anything contained herein to the contrary, in no event
shall  Landlord  have the right to transfer or sell its interest in the Premises
or this Lease  prior to  delivering  possession  of the  Premises  to Tenant and
satisfactorily completing all of Landlord's duties under the Work Letter.


                                  ARTICLE XVIII
                             LANDLORD CONTINGENCIES

    The  obligations of Landlord  under this Lease are expressly  subject to the
conditions precedent set forth in this Article XVIII.

     18.1  Consent  of the  Mortgagee.  Landlord  shall  obtain  the  consent of
Landlord's Mortgagee to the terms, covenants and provisions of this Lease, which
consent shall be evidenced by Landlord's Mortgagee's execution and delivery of a
Subordination, Non-disturbance and Attornment Agreement to Tenant.

     18.2 Receipt of Governmental Approvals.  Landlord shall obtain all building
permits and licenses which are required to permit the construction of Landlord's
Work within thirty (30) days of the Effective Date.

     18.3 Receipt of Guaranty.  Landlord shall receive the executed Guaranty, in
the form attached hereto as Exhibit F, concurrently with the Tenant's  execution
and delivery of this Lease.
<PAGE>
     18.4  Failure of  Conditions.  If Landlord (i) does not receive from Tenant
the  executed  Lease and  Guaranty  concurrently,  (ii) is unable to obtain  all
building  permits and licenses  required for  construction  of  Landlord's  Work
within forty-five (45) days of the Estimated Delivery Date or (iii) is unable to
obtain the consent and approval of Landlord's Mortgagee to the terms,  covenants
and  provisions  of this Lease on or before  thirty  (30) days after the Parties
have executed and delivered the Lease to Landlord's  Mortgagee,  then  Landlord,
with respect to items (i) and (ii), and either Party, with respect to item (iii)
, may elect to terminate this Lease on thirty (30) days' Notice delivered at any
time  thereafter,  unless  Tenant  shall  have  elected to  terminate  the Lease
pursuant to Section 4. 3 (a) . If either Party so elects to terminate the Lease,
this Lease shall  terminate  thirty (30) days after  delivery of such Notice and
the provisions of Section 4. 3 (c) shall apply; provided, however, if all of the
foregoing  conditions  are  satisfied  or waived by Landlord  before said 30-day
period  expires,  the Lease shall remain in full force and effect in  accordance
with its terms, it being  understood that Tenant shall have the right to obtain,
on Landlord's  behalf, any building permits and licenses required for Landlord's
Work during the 30-day  period  following  Landlord's  election to terminate the
Lease.

                                  ARTICLE XIX
                             EXPIRATION; TERMINATION

      19.1 Duty to Surrender.  At the expiration or earlier  termination of this
Lease,  Tenant shall  surrender to Landlord  possession of the Premises free and
clear of all liens  and  encumbrances  other  than  those,  if any,  created  by
Landlord or those which  encumbered  the Premises  prior to the Effective  Date.
Tenant  shall leave the  Premises  and any other  property  surrendered  in good
condition  and repair,  reasonable  wear and tear  excepted.  All property  that
Tenant is not  required  to  surrender  but that  Tenant  abandons by failing to
remove said  property  within  thirty (30) days after the  expiration or earlier
termination  of this Lease shall,  at  Landlord's  election,  become  Landlord's
property.

     19.2 Failure to Surrender. If Tenant fails to surrender the Premises at the
expiration or earlier termination of this Lease, Tenant shall Indemnify Landlord
and its Representatives  for all Losses and Liabilities  resulting from Tenant's
delay or failure to  surrender  the  Premises,  including,  without  limitation,
claims of any succeeding tenant resulting from Tenant's delay or failure.

    19.3  Additional  Documents.  If requested to do so, Tenant shall,  upon the
expiration  or earlier  termination  of this  Lease,  execute,  acknowledge  and
deliver to Landlord such  instruments of further  assurance as in the opinion of
Landlord are  necessary or  desirable  to confirm or perfect  Landlord's  right,
title and interest in and to the Premises, and any other property surrendered to
Landlord pursuant to this Lease, free and clear of any claim by Tenant. Tenant's
obligations  under this  Article  XIX shall  survive the  expiration  or earlier
termination of this Lease.


                                   ARTICLE XX
                                  MISCELLANEOUS

     20.1 Holding  Over.  Tenant  promises to not remain in possession of all or
any part of the Premises  after the  expiration  or earlier  termination  of the
Lease,  without the express written  consent of Landlord.  No acceptance of Rent
and no act or statement by any  Representative  of Landlord shall constitute the
consent of Landlord to Tenant's  holding  over.  Should Tenant hold over without
the express written consent of Landlord, such tenancy shall be at the sufferance
of Landlord,  and not a renewal hereof or an extension of the Lease Term, and in
such  case,  all Rent shall be  payable  at one and  one-half  (l 1/2) times the
amount set forth in this Lease and at the times specified in this Lease and such
tenancy-at-sufferance  shall  be  subject  to every  other  term,  covenant  and
agreement  contained  herein.  Tenant  understands  that  Landlord is relying on
Tenant's  covenant  to not  hold  over  and to  surrender  the  Premises  at the
expiration or earlier termination of this Lease.
<PAGE>
     20.2 Non-Waiver of Default.  No Party's  acquiescence to any Default of the
other  shall  operate as a waiver of such  acquiescing  Party of its rights with
respect  to any other  Default,  whether  of the same or any other  covenant  or
condition.  By  accepting  Rent,  Landlord  shall not be  deemed to have  waived
Landlord's right to enforce any term or provision hereof.

     20.3 Recording This Lease shall not be recorded. On either Party's request,
the Parties  shall  execute,  acknowledge  and  deliver to each other  duplicate
originals of a short form or memorandum of this Lease in substantially  the form
of Exhibit Ho(Memorandum of Lease),  describing the Premises and the Lease Term,
which may be recorded.

     20.4 Notice. In addition to service of any notice in the manner required by
law, any Notice this Lease requires or permits either Party to give the other or
its Mortgagee shall be given or  communicated  in writing by personal  delivery,
receipted  overnight courier service, or United States certified mail or express
mail service,  (return receipt requested,  with postage fully prepaid) addressed
to the other  Party at the  address  specified  in  Article  I or at such  other
addresses  as either  Party or its  Mortgagee  may specify  from time to time by
Notice.  All  Notices  hereunder  shall be deemed to have been given on the date
personally  delivered or the date marked on the return receipt,  unless delivery
is refused or cannot be made (in which case the date of postmark shall be deemed
the date Notice has been given).

     20.5  Successors  and  Assigns.   All  covenants,   promises,   conditions,
representations  and agreements  herein contained shall be binding upon,  apply,
and  inure  to  the  parties  hereto  and  their  respective  heirs,  executors,
administrators, successors (including subtenants), and permitted assigns.

     20.6 Partial Invalidity.  If any provision of this Lease or the application
thereof to any Person or circumstance  shall to any extent be held invalid,  the
remainder  of this  Lease or the  application  of such  provision  to persons or
circumstances  other  than  those as to which it is held  invalid  shall  not be
affected  thereby,  and  each  provision  of  this  Lease  shall  be  valid  and
enforceable to the fullest extent permitted by law.

     20.7  Interpretation.  In  interpreting  this  Lease in its  entirety,  any
additions written or typed thereon shall be given equal weight,  and there shall
be no inference,  by operation of law or  otherwise,  that any provision of this
Lease shall be construed  against  either  Party.  This Lease shall be construed
without regard to any presumption or other rule requiring  construction  against
the Party causing this Lease to be drafted.

     20.8  Headings  Captions  and  References.  The  captions  for Articles and
Sections  contained in this Lease are for convenience only and do not in any way
limit or amplify any term or provision hereof . The terms "hereof, " "hereunder"
and "herein" refer to this Lease as a whole,  inclusive of all Exhibits,  except
where  noted  otherwise.   The  terms  "include,"   "includes"  and  "including"
incorporate the meaning "without limitation."

     20.9  Brokerage  Commissions.  Landlord  shall  Indemnify  Tenant  from all
brokerage  commissions  due to the Brokers of Landlord and Tenant in  connection
with this Lease, and each Party shall Indemnify


<PAGE>
     the other from any and all Losses and Liabilities arising from the claim of
any  other  real  estate  broker,  agent or finder  to a real  estate  brokerage
commission  or fee earned in  connection  with this Lease and  arising  from the
Indemnifying Party's conduct.  Tenant shall not receive any brokerage commission
or similar fee as a consequence of entering this Lease.

     20.10  Governin  Law.  This  Lease  shall be  construed  under  the laws of
California.

     20.11  Transfer Tax.  Landlord  shall pay any  documentary  transfer tax or
other tax payable to the County or other governmental taxing authority by reason
of the execution of this Lease and/or recordation of a memorandum of this Lease.

     20.12 Execution of Documents. Each Party shall cooperate with the other and
execute  such  documents  as either may  reasonably  require or request so as to
enable such Party to conduct its operations, so long as the requested conduct or
execution of documents  does not have the effect of  derogating  or altering the
powers, rights, duties and responsibilities of the respective Parties.

     20.13 Title Exceptions.  Tenant shall have the right to obtain and approve,
within ten (10) days after the Effective  Date, a commitment for the issuance of
a  leasehold  title  policy,  issued by a title  insurance  company  approved by
Tenant,  showing only the  exceptions to Landlord's  title and a  Subordination,
Non-disturbance and Attornment  Agreement from Landlord's  Mortgagee holding any
Mortgage to which this Lease is, or may become,  subordinate. If Tenant fails to
disapprove said title insurance  commitment  within said 10-day period by Notice
to Landlord,  Tenant shall be deemed to have approved said commitment. If Tenant
disapproves said  commitment,  Tenant shall specify the reasons therefor in such
Notice and Landlord  may,  within thirty (30) days after receipt of such Notice,
elect to cure any such  disapproved  matter,  including  electing to pay for the
cost of any title  endorsement and, upon such election,  this Lease shall remain
in full force and effect.  If Tenant  timely  disapproves  such  commitment  and
Landlord fails to elect to correct any such disapproved matter,  Tenant shall be
permitted  to  terminate  this Lease on thirty (30) days'  Notice  ("Termination
Notice") given to Landlord  within five (5) days after  expiration of Landlord's
30- day cure period and, unless  Landlord  elects during such subsequent  30-day
period  to cure  such  disapproved  matter,  this  Lease  shall  terminate  upon
expiration  of such  subsequent  30-day  period.  If Tenant fails to deliver the
Termination  Notice  within said 5-day  period,  this Lease shall remain in full
force and effect.  If the Lease is terminated as provided in this Section 20.13,
(i) neither Party shall  thereafter have any further  liability or obligation to
the other or to any third  party with  respect to this Lease  (except  for items
which have previously  accrued and remain unpaid and except for any liability of
Tenant or Landlord which survives such termination) , and (ii) Tenant shall have
no further rights whatsoever with respect to the Premises.

     20.14 Hazardous  Substances.  Landlord warrants and represents that, except
as set forth below, and to its actual knowledge: (i) neither the Shopping Center
nor any portion thereof, including the soil, groundwater and soil vapor, contain
any Hazardous Substance;  (ii) Landlord is not subject to any existing,  pending
or threatened  investigation by any  governmental  authority under the Hazardous
Substances Laws; (iii) any use, generation, release,
<PAGE>
storage or disposal of  Hazardous  Substances  that has occurred on the Shopping
Center to date has been in compliance  with all Hazardous  Substances  Laws; and
(iv) no leak,  spill,  release,  discharge,  emission,  or disposal of Hazardous
Substances  has occurred on the Shopping  Center as of  Landlord's  execution of
this Lease.  As used in this Section 20.14,  "actual  knowledge"  shall mean the
actual (and not constructive)  knowledge of Robert N. Gold,  without any duty of
investigation.

    If,  at any time,  through  no fault of  Tenant,  Hazardous  Substances  are
determined to be present on the Shopping  Center (other than in the Building and
Improvements  and except as set forth below),  Landlord shall promptly  commence
Remedial Work with respect thereto. Landlord shall use reasonable efforts not to
interfere  materially with the conduct of Tenant's business while performing its
Remedial  Work.  The costs of Landlord's  Remedial Work shall not be included in
Common Area Costs and Tenant shall not be liable for any share thereof.

    If  Landlord   fails  to  commence   promptly  or  perform   diligently  and
continuously  to completion  its Remedial  Work,  Tenant may deliver a Notice of
Default  to  Landlord  in  accordance  with  Section  14 .1 ( f ) . If  Landlord
thereafter fails to commence promptly and perform diligently and continuously to
completion its cure of such Default  pursuant to Section  14.2(e),  such Default
shall  constitute  an Uncured  Default,  entitling  Tenant to seek  damages from
Landlord. Either Party shall be deemed to have "commenced" its cure of a Default
under  Sections 14 . 2 (e) and 20.14 by beginning to  investigate or monitor the
Hazardous  Substance or to conduct interviews with consulting and/or remediation
professionals respecting such proposed investigation or monitoring.

    Notwithstanding  Landlord's  timely  performance  of any Remedial  work,  if
Tenant  reasonably  anticipates that the presence of any Hazardous  Substance on
the Shopping Center (other than in the Building or Improvements) in violation of
the Hazardous  Substances Laws may reduce its Gross Sales,  Tenant may deliver a
Notice to Landlord of the date such presence was determined.

     If ( i ) any such Hazardous Substance so remains on the Shopping Center for
a period of sixty  (60) days or more  after  Tenant's  Notice  thereof  and (ii)
Tenant's Gross Sales during such 60-day period shall have decreased at least ten
percent (10%) from Tenant's average Gross Sales during the same 60-day period of
the three (3) [or all, if there are fewer than three (3)] immediately  preceding
Lease  Years due to the  presence  of such  Hazardous  Substance  or  Landlord's
Remedial Work with respect  thereto,  then Base Rent and Tenant's  obligation to
pay Tenant's Share of Common Area Costs and Real Estate Taxes shall thereupon be
abated,  based on the proportion  that Tenant's Gross Sales at that time bear to
Tenant's average Gross Sales during the same period of the three (3) [or all, if
applicable] immediately preceding Lease Years.

    If (i) any such Hazardous  Substance so remains on the Shopping Center for a
period of one (1) year or more after  Tenant's  Notice thereof and (ii) Tenant's
Gross Sales during such 1-year period shall have  decreased at least ten percent
(10%) from  Tenant's  average Gross Sales during the three (3) [or all, if there
are fewer than three (3)] immediately  preceding Lease Years due to the presence
of such Hazardous  Substance or Landlord's  Remedial Work with respect  thereto,
then Tenant may elect to terminate this Lease immediately on Notice to Landlord.
If Tenant so  terminates  this Lease,  the  provisions  of Section  4.3(c) shall
apply.

    All exceptions to the Landlord's  foregoing  representations  and warranties
about Hazardous Substances are listed below ( if there are no exceptions,  write
"NO EXCEPTIONS"): NO EXCEPTIONS.


LANDLORD'S INITIALS:
<PAGE>
      Tenant  shall not allow any  Hazardous  Substance  to be used,  generated,
released,  stored or disposed of on, under or about,  or  transported  from, the
Premises or the Shopping Center, unless: (i) Landlord, exercising its Reasonable
Approval after Notice from Tenant,  shall have approved such activity;  and (ii)
such activity is conducted in compliance  with the provisions  hereof . Landlord
may  condition its approval on Tenant's  compliance  with  reasonable  standards
Landlord  deems  necessary  to protect the  Shopping  Center,  the  Premises and
Landlord's  interests  and  Landlord  may  withhold  its  approval  if  Landlord
determines that such proposed  activity involves a material risk of a release or
discharge of Hazardous  Substances  or a violation of any  Hazardous  Substances
Laws or that Tenant has not  provided  reasonable  assurances  of its ability to
remedy such a violation and fulfill its  obligations  under this Section  20.14.
Notwithstanding  the  foregoing,  this  provision  shall  not  be  construed  or
understood to prohibit Tenant from allowing  Hazardous  Substances to be brought
upon the Premises so long as they are Hazardous  Substances  which are customary
and common to the normal course of business in the  construction or operation of
a first-class retail business and so long as such Hazardous Substances are used,
stored .and disposed of in strict accordance with all Hazardous Substances Laws.

     Tenant  shall  strictly  comply  with,  and shall  maintain the Premises in
compliance with, all Hazardous Substances Laws. Tenant shall obtain and maintain
in full force and effect all permits,  licenses and other governmental approvals
required for Tenant's operations on the Premises under all Hazardous  Substances
Laws and shall  comply  with all terms and  conditions  thereof.  At  Landlord's
request,  Tenant shall deliver copies of, or|^| allow  Landlord to inspect,  all
such  permits,  licenses and  approvals.  Tenant shall perform all remedial Work
required  as a result of any release or  discharge  of any  Hazardous  Substance
affecting  the Premises or the Shopping  Center,  or any  violation of Hazardous
Substances  Laws,  by Tenant  or any  sublessee  of  Tenant or their  respective
Representatives storage or disposal of Hazardous Substances that has occurred on
the Shopping Center to date has been in compliance with all Hazardous Substances
Laws; and (iv) no leak,  spill,  release,  discharge,  emission,  or disposal of
Hazardous  Substances  has  occurred  on the  Shopping  Center as of  Landlord's
execution  of  this  Lease.   As  used  in  this  Section  20.14,   |^||^|actual
knowledge|^||^| shall mean the actual (and not constructive) knowledge of Robert
N. Gold, without any duty of investigation.

    If,  at any time,  through  no fault of  Tenant,  Hazardous  Substances  are
determined to be present on the Shopping  Center (other than in the Building and
Improvements  and except as set forth below),  Landlord shall promptly  commence
Remedial Work with respect thereto. Landlord shall use reasonable efforts not to
interfere  materially with the conduct of Tenant's business while performing its
Remedial  Work.  The costs of Landlord's  Remedial Work shall not be included in
Common Area Costs and Tenant shall not be liable for any share thereof.

    If  Landlord   fails  to  commence   promptly  or  perform   diligently  and
continuously  to completion  its Remedial  Work,  Tenant may deliver a Notice of
Default  to  Landlord  in  accordance  with  Section  14 .1 ( f ) . If  Landlord
thereafter fails to commence promptly and perform diligently and continuously to
completion its cure of such Default  pursuant to Section  14.2(e),  such Default
shall  constitute  an Uncured  Default,  entitling  Tenant to seek  damages from
Landlord.  Either Party shall be deemed to have  |^||^|commenced"  its cure of a
Default  under  Sections 14 . 2 (e) and 20.14 by  beginning  to  investigate  or
monitor the Hazardous  Substance or to conduct interviews with consulting and/or
remediation professionals respecting such proposed investigation or monitoring.

    Notwithstanding  Landlord's  timely  performance  of any Remedial  work,  if
Tenant  reasonably  anticipates that the presence of any Hazardous  Substance on
the Shopping Center (other than in the Building or Improvements) in violation of
the Hazardous  Substances Laws may reduce its Gross Sales,  Tenant may deliver a
Notice to Landlord of the date such presence was determined.
<PAGE>
     If ( i ) any such Hazardous Substance so remains on the Shopping Center for
a period of sixty  (60) days or more  after  Tenant's  Notice  thereof  and (ii)
Tenant's Gross Sales during such 60-day period shall have decreased at least ten
percent (10%) from Tenant's average Gross Sales during the same 60-day period of
the three (3) [or all, if there are fewer than three (3)] immediately  preceding
Lease  Years due to the  presence  of such  Hazardous  Substance  or  Landlord's
Remedial Work with respect  thereto,  then Base Rent and Tenant's  obligation to
pay Tenant's Share of Common Area Costs and Real Estate Taxes shall thereupon be
abated,  based on the proportion  that Tenant's Gross Sales at that time bear to
Tenant's average Gross Sales during the same period of the three (3) [or all, if
applicable] immediately preceding Lease Years.

    If (i) any such Hazardous  Substance so remains on the Shopping Center for a
period of one (1) year or more after  Tenant's  Notice thereof and (ii) Tenant's
Gross Sales during such 1-year period shall have  decreased at least ten percent
(10%) from  Tenant's  average Gross Sales during the three (3) [or all, if there
are fewer than three (3)] immediately  preceding Lease Years due to the presence
of such Hazardous  Substance or Landlord's  Remedial Work with respect  thereto,
then Tenant may elect to terminate this Lease immediately on Notice to Landlord.
If Tenant so  terminates  this Lease,  the  provisions  of Section  4.3(c) shall
apply.

    All exceptions to the Landlord's  foregoing  representations  and warranties
about Hazardous Substances are listed below ( if there are no exceptions,  write
"NO EXCEPTIONS"): NO EXCEPTIONS.


LANDLORDS INITIALS:

      Tenant  shall not allow any  Hazardous  Substance  to be used,  generated,
released,  stored or disposed of on, under or about,  or  transported  from, the
Premises or the Shopping Center, unless: (i) Landlord, exercising its Reasonable
Approval after Notice from Tenant,  shall have approved such activity;  and (ii)
such activity is conducted in compliance  with the provisions  hereof . Landlord
may  condition its approval on Tenant's  compliance  with  reasonable  standards
Landlord  deems  necessary  to protect the  Shopping  Center,  the  Premises and
Landlord's  interests  and  Landlord  may  withhold  its  approval  if  Landlord
determines that such proposed  activity involves a material risk of a release or
discharge of Hazardous  Substances  or a violation of any  Hazardous  Substances
Laws or that Tenant has not  provided  reasonable  assurances  of its ability to
remedy such a violation and fulfill its  obligations  under this Section  20.14.
Notwithstanding  the  foregoing,  this  provision  shall  not  be  construed  or
understood to prohibit Tenant from allowing  Hazardous  Substances to be brought
upon the Premises so long as they are Hazardous  Substances  which are customary
and common to the normal course of business in the  construction or operation of
a first-class retail business and so long as such Hazardous Substances are used,
stored .and disposed of in strict accordance with all Hazardous Substances Laws.

     Tenant  shall  strictly  comply  with,  and shall  maintain the Premises in
compliance with, all Hazardous Substances Laws. Tenant shall obtain and maintain
in full force and effect all permits,  licenses and other governmental approvals
required for Tenant's operations on the Premises under all Hazardous  Substances
Laws and shall  comply  with all terms and  conditions  thereof.  At  Landlord's
request,  Tenant shall deliver copies of, or allow Landlord to inspect, all such
permits, licenses and approvals. Tenant shall perform all Remedial Work required
as a result of any release or discharge of any Hazardous Substance affecting the
Premises or the Shopping Center, or any violation of Hazardous  Substances Laws,
by Tenant or any  sublessee  of Tenant  or their  respective  Representatives  .
Landlord  shall  have the  right to  intervene  in any  governmental  action  or
proceeding  involving any Remedial Work, and to approve performance of the work,
in order to protect Landlord's interests.
<PAGE>

    Tenant shall Notify  Landlord within two (2) days after any of the following
occurs:  (a) a release or discharge of any Hazardous  Substance,  whether or not
the release or discharge is in quantities  that would otherwise be reportable to
a public  agency;  (b) Tenant's  receipt of any order of a  governmental  agency
requiring  any Remedial  Work pursuant to any  Hazardous  Substances  Laws;  (c)
Tenant's  receipt of any warning,  notice of inspection,  notice of violation or
alleged violation, or Tenant's receipt of notice or knowledge of any proceeding,
investigation of enforcement action,  pursuant to any Hazardous Substances Laws;
or (d) Tenant's  receipt of notice or knowledge of any claims made or threatened
by any third party against Tenant or the Premises relating to any loss or injury
resulting from Hazardous Substances.  Tenant shall deliver to Landlord copies of
all test results,  reports and business or management plans required to be filed
with any governmental agency pursuant to all Hazardous Substances Laws.

     Each Party shall  Indemnify  the other Party and its  Representatives  for,
from  and  against  any  and  all  Losses  and  Liabilities  arising  out of the
Indemnifying  Party's Default of its duties under this Section 20.14. As used in
this Section 20.14,  Losses and Liabilities  include,  without  limitation,  all
foreseeable and unforeseeable consequential damages and the cost of any Remedial
Work. Each Party's  foregoing duty to Indemnify shall be in addition to, and not
a limitation of, that Party's other duties to Indemnify  contained  elsewhere in
this Lease and shall  survive  the  expiration  or earlier  termination  of this
Lease.

      Neither  Landlord's  consent  given  pursuant  to this  Section  20.14 nor
Tenant's strict compliance with all Hazardous  Material Laws shall excuse Tenant
from Tenant's duty to Indemnify Landlord hereunder.

     20.15 Force  Majeure.  Except as  otherwise  provided,  whenever a Party is
required to perform an act under this Lease by a certain time, the time for such
performance  shall be extended  for so long as such  performance  is  prevented,
delayed, retarded or hindered by Force Majeure.

     20.16 Estoppel Certificate.  Within ten (10) days after request by Landlord
or  Tenant  (which  request  may be from  time to time as  often  as  reasonably
required by Landlord or Tenant), each Party agrees to execute in recordable form
and deliver to the requesting Party a certificate in  substantially  the form of
Exhibit G (Estoppel  Certificate)  . Any such  certificate  may be  conclusively
relied upon by any prospective purchaser,  tenant,  subtenant or encumbrancer of
the Premises.

     If the other  Party  fails to respond to such  request  within  such 10-day
period,  the  requesting  Party shall deliver a second  Notice  stating that the
failure of the other Party to respond to such request  within three (3) business
days after receipt of such second request will result in a deemed  approval with
respect to the requested  matters.  The failure to deliver such statement within
that  three-day  period shall (with respect to third  parties  relying upon such
estoppel  certificate),  without  limiting any other remedy which the requesting
Party may have as a result of such failure,  be conclusive  upon the Party which
fails to deliver such statement that this Lease is in force and effect with only
such  modifications as have been identified by the requesting  Party, that there
are no outstanding Defaults in the performance of the requesting Party, and that
there have not been any  payments of advance  Rent other than as provided in the
provisions of this Lease.

     20.17  Effectiveness  . This Lease  shall not be deemed  effective  for any
purpose or binding on either Party unless and until the Effective Date.

     20.18 Signage.  Landlord  covenants that the pylon sign structure  shown on
Exhibit A (Site Plan) shall be the only freestanding  pylon  structure(s) in the
Shopping  Center and that the name of the Shopping  Center shall not include the
name  of any  tenant  except  Tenant's.  Landlord  shall  maintain,  repair  and
illuminate the pylon structure and all signs thereon,  as a Common Area Cost or,
at Landlord's discretion, as a cost to be shared proportionately by tenants with
signage on such pylon sign based on the area occupied by each respective tenant.

     20.19  Amendments  in  Writing.  This  Lease  cannot be orally  amended  or
modified.  Any modification or amendment hereof must be in writing and signed by
the Party to be charged.

     20.20 Time of  Essence.  Time is of the essence of each  provision  in this
Lease.

     20.21 Corporate or Other Authority. If Tenant is a corporation, partnership
or limited  liability  company,  Tenant and the Persons  executing this Lease on
behalf  of  Tenant  hereby  covenant  and  warrant  that  (i)  Tenant  is a duly
organized, validly existing and qualified corporation (or partnership or limited
liability  company) and all steps have been taken prior to the Effective Date to
qualify  Tenant to do business in the State of  California,  (ii) Tenant has all
requisite  power and authority to enter into and perform its  obligations  under
this Lease,  (iii) all consents,  approvals and authorizations of all applicable
governmental  authorities,  and all consents or  approvals of Tenant's  board of
directors,  shareholders,  partners or members  required in connection  with the
execution,  delivery and  performance by Tenant of this Lease have been obtained
on or before the  Effective  Date,  (iv) all  franchise  and corporate and other
business taxes have been paid to date, and (v) all future forms,  reports,  fees
and other documents  necessary to comply with applicable laws will be filed when
due.


<PAGE>
     20.22  Landlord's  Rights  to  Entry  and  Inspection.   Landlord  and  its
Representatives  shall have the right during business hours,  upon not less than
24  hours'  oral or  written  Notice to  Tenant  (except  that in the case of an
emergency,  the existence of which  Landlord  shall  determine in its reasonable
judgment,  no advance  Notice  shall be required) to enter upon the Premises for
purposes of  inspecting  the same and  exercising  its rights  under this Lease,
provided  that such  inspections  shall be conducted in a manner that will cause
the least possible inconvenience, annoyance, or disturbance to Tenant's business
activities.  In addition,  Landlord or any Person  authorized by Landlord may so
enter the Premises to (i) make any repairs  which it is obligated or entitled to
make to the  Premises and perform any work that  Landlord may deem  necessary to
prevent waste or deterioration of the Premises,  or (ii) to perform  remodeling,
construction  or other work  incidental  to any portion of the Shopping  Center,
including without  limitation the premises of another tenant.  Nothing contained
in this  Section  20.22  shall  imply any duty on the part of Landlord to do any
such work which,  under any  provision of this Lease,  Tenant may be required to
do, nor shall it  constitute  a waiver of Tenant's  Default in failing to do the
same.  No exercise by Landlord of any rights  contained  in this  Section  20.22
shall entitle  Tenant to any damage for any injury or  inconvenience  occasioned
thereby nor to any  abatement of Rent.  Subject to the Notice  requirements  set
forth herein above,  the Mortgagee  shall be permitted to enter the Premises and
make or cause to be made such  independent  inspections as are permitted by this
Lease to be made by Landlord and as it deems necessary for its own protection.

     20.23  Nonliability of  Representatives.  No Representative of either Party
shall be personally liable to the other Party, or its successor-in-interest,  if
any Party is in Default of this Lease.

     20.24   Counterparts.   This  Lease  may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

     20.25 No Rights of Third Parties. None of the promises or undertakings made
herein are for the  benefit of any  Person  which is not a Party to this  Lease,
except  that,  with  respect  to (i) a  Mortgagee  owning or  holding a Mortgage
encumbering  the  Premises,  such Lender shall be entitled to the benefit of the
lender protection rights included herein expressly for its benefit, and (ii) the
estoppel  certificate  provisions  set forth in Section  20.16 above,  the third
parties  described  therein  shall  be  entitled  to rely  upon  the  provisions
expressly provided for their benefit in Section 20.16.

     20.26 Liability Joint and Several. All the terms,  covenants and conditions
contained  in this Lease to be performed  by either  Party,  if such Party shall
consist of more than one Person or organization, shall be deemed to be joint and
several,  and all rights and  remedies of the Parties  shall be  cumulative  and
non-exclusive of any other remedy at law or in equity.

     20.27 Entire Agreement.  There are no oral agreements  between Landlord and
Tenant  affecting this Lease,  and this Lease supersedes and cancels any and all
previous negotiations,  arrangements,  brochures,  letters of intent, agreements
and  understandings,  written or oral,  if any,  between  Landlord and Tenant or
displayed  by Landlord to Tenant with  respect to the  Premises and the Shopping
Center, and none of them shall be used to interpret or construe this Lease. This
Lease is and shall be considered to be the only agreement  between  Landlord and
Tenant  and  their   representatives  and  agents.  All  negotiations  and  oral
agreements  acceptable  to  Landlord  and Tenant  have been  merged into and are
included in this Lease. There are no other representations or warranties between
Landlord and Tenant and all reliance with respect to  representations  is solely
upon the representations and agreements contained in this Lease.

     20.28  Execution and Delivery of Lease.  Subject to Section  18.4,  neither
Party shall have any obligation or liability to the other until each Party shall
have executed and delivered this Lease to the other.

     IN WITNESS  WHEREOF,  this Lease has been  executed and delivered as of the
Effective Date.
<PAGE>

     LANDLORD: CANYON COUNTRY PLAZA L.P., a California limited partnership


                              By :   GSF Canyon Country ,  Inc . ,
                                     a California corporation

                              Its: General Partner



                                   By:
                                   Name: Robert N. Gold
                                   Its:   President



                  TENANT:     PLAY CO. TOYS CANYON COUNTRY, INC.,
                              a Delaware corporation


                                                               ,
                                By:
                                Name:    Richard Brady
                                Its:      President and CEO


                                By:
                                Name:     Angela Burnett
                                Its:      Chief Financial Officer



<PAGE>
                                LIST OF EXHIBITS


EXHIBIT A      Site Plan

EXHIBIT B      Property Descriptions
                  Description of Premises
                  Legal Description of Shopping Center

EXHIBIT C      Work Letter

EXHIBIT D      Subordination, Non-disturbance and Attornment
               Agreement

EXHIBIT E      Access and Rental Payment Agreement

EXHIBIT F      Guaranty

EXHIBIT G      Estoppel Certificate

EXHIBIT H      Memorandum of Lease

EXHIBIT I      Restricted Uses

EXHIBIT J      Existing Uses



<PAGE>

[graphic]


<PAGE>



                                    EXHIBIT B
                             Description of Premises

  Spaces 3 and 4 as shown  on the Site  Plan,  containing  approximately  12,000
    square feet of floor area.


         Legal Description of Shopping Center


THE LAND  SITUATED  IN THE  STATE  OF  CALIFORNIA,  COUNTY  OF LOS  ANGELES  AND
DESCRIBED AS FOLLOWS:

PARCEL 1:

THAT PORTION OF THE NORTH HALF OF THE SOUTHEAST  QUARTER OF SECTION 20, TOWNSHIP
4 NORTH, RANGE 15 WEST, SAN BERNARDINO MERIDIAN,  ACCORDING TO THE OFFICIAL PLAT
THEREOF, DESCRIBED AS FOLLOWS:

     BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE WESTERLY
LINE OF WHITES  CANYON ROAD,  50 FEET WIDE,  AS SHOWN ON MAP OF TRACT NO. 25924,
RECORDED  IN HOOK 667 PAGES 93 TO 97  INCLUSIVE  OF MAPS,  IN THE  OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY,  WITH THE WESTERLY  PROLONGATION OF THAT CERTAIN
COURSE IN THE  CENTER  LINE OF SOLEDAD  CANYON  ROAD,  110 FEET  WIDE,  HAVING A
BEARING AND LENGTH OF NORTH 89' 58' 39" EAST 1355.68 FEET, AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY PROLONGATION, SOUTH O' 26' 36" EAST 722.24 FEET TO A
POINT OF INTERSECTION  WITH THE NORTHEAST LINE OF LOT 210 OF TRACT NO. 25927, AS
SHOWN ON MAP RECORDED IN BOOK 731 PAGES 3 TO 8 INCLUSIVE OF MAPS,  IN THE OFFICE
OF SAID COUNTY  RECORDER;  THENCE  ALONG SAID  NORTHEAST  LINE SOUTH 63' 24' 45"
EAST,  557.99 FEET;  THENCE  LEAVING SAID  NORTHEASTERLY  LINE NORTH 26' 35' 15"
EAST,  248.49 FEET;  THENCE NORTH 89' 58' 39' EAST,  199.94 FEET THENCE NORTH O'
16' 54" WEST,  750 FEET TO THE CENTER LINE OF SAID SOLEDAD  CANYON ROAD;  THENCE
ALONG  SAID  CENTER  LINE  SOUTH  89' 58 39" WEST,  809.94  FEET TO THE POINT OF
BEGINNING.

     EXCEPT THAT PORTION OF SAID LAND INCLUDED  WITHIN THE SOLEDAD  CANYON ROAD,
AS SHOWN ON SAID MAP OF TRACT NO. 25924.

     ALSO EXCEPT ALL OIL, GAS AND MINERAL RIGHTS BELOW 500 FEET, BUT WITHOUT ANY
SURFACE RIGHTS AND RIGHT OF SURFACE ENTRY,  FROM THAT PORTION OF SAID LAND LYING
SOUTHWESTERLY OF SOLEDAD CANYON ROAD, AS ESTABLISHED BY DECLARATION OF THE HOARD
OF SUPERVISORS OF SAID COUNTY,  NOTED IN ROAD HOOK 6 PAGE 123 , RECORDS OF' SAID
BOARD OF  SUPERVISORS,  AS  RESERVED IN THE DEED FROM ETHEL M.  FURNIVALL,  ALSO
KNOWN AS EDITH M. FURNIVALL,  JOHN COLONKA,  JR. AND JOAN IDA COLONKA,  RECORDED
JUNE 23, 1962 IN BOOK D-1647 PAGE 8, OFFICIAL RECORDS.

     ALSO EXCEPT ANY AND ALL MINERAL  RIGHTS,  INCLUDING OIL AND ALL HYDROCARBON
SUBSTANCES IN THE LAND HEREIN DESCRIBED AT A DEPTH OF

                            B-1



<PAGE>
     MORE THAN 500 FEET BELOW THE SURFACE Of SAID LAND.  GRANTOR  SHALL NOT HAVE
ANY RIGHT TO ENTER UPON THE SURFACE OF SAID LAND TO EXPLORE FOR OR REMOVE ANY OF
SAID  MINERALS,  HUT SHALL HAVE AN UNLIMITED  RIGHT TO ENTER UPON SAID LAND AT A
DEPTH IN EXCESS OF 500 FEET FROM THE  SURFACE  THEREOF TO EXPLORE  FOR OR REMOVE
ANY  MINERALS ,  INCLUDING  PETROLEUM  PRODUCTS , FROM THAT PORTION OF SAID LAND
LYING NORTHEASTERLY OF SOLEDAD CANYON ROAD, AS ESTABLISHED BY DECLARATION OF THE
BOARD OF SUPERVISORS OF SAID COUNTY,  NOTED IN ROAD BOOK 6 PAGE 123,  RECORDS OF
SAID HOARD OF SUPERVISORS,  AS RESERVED BY EDWIN A. CARPENTER, A MARRIED MAN, AS
HIS  SEPARATE  PROPERTY,  AND EDWIN A.  CARPENTER,  TRUSTEE FOR THE ESTATE OF E.
PEARL CARPENTER, DECEASED, RECORDED NOVEMBER 10, 1960 AS INSTRUMENT NO. 2619, IN
BOOK D 1031 PAGE 976, OFFICIAL RECORDS.

PARCEL 2:

     THAT  PORTION OF THE NORTH  HALF OF THE  SOUTHEAST  QUARTER OF SECTION  20,
TOWNSHIP 4 NORTH,  RANGE 15 WEST,  SAN  BERNARDINO  MERIDIAN,  ACCORDING  TO THE
OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:

     BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE WESTERLY
LINE OF WHITES  CANYON  ROAD,  50 FEET WIDE AS SHOWN ON MAP OF TRACT NO.  25924,
RECORDED  IN BOOK 667 PAGES 93 TO 97  INCLUSIVE  OF MAPS,  IN THE  OFFICE OF THE
COUNTY RECORDER OF' SAID COUNTY, WITH THE WESTERLY  PROLONGATION OF THAT CERTAIN
COURSE IN THE  CENTER  LINE OF SOLEDAD  CANYON  ROAD,  110 FEET  WIDE,  HAVING A
HEARING AND LENGTH OP' NORTH 89' 58' 39" EAST 1355.68 FEET AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY  PROLONGATION , SOUTH O ' 16 - 3 6'- EAST 3 9 0 . 51
FEET TO THE TRUE POINT OF  BEGINNING;  THENCE  CONTINUING  ALONG SAID  SOUTHERLY
PROLONGATION  SOUTH 0' 16' 36" EAST 331.73 FEET TO THE NORTHEASTERLY LINE OF LOT
210 OF TRACT NO.  25927,  AS PER MAP RECORDED IN HOOK 731 PAGES 3 TO 8 INCLUSIVE
OF MAPS, IN SAID OFFICE OF THE COUNTY RECORDER;  THENCE ALONG THE  NORTHEASTERLY
LINE OF SAID LOT 210 NORTH 63' 24' 45" WEST  114.85 FEET TO THE  BEGINNING  OF A
NON-TANGENT  CURVE  CONCAVE  NORTHWESTERLY  HAVING A RADIUS OF 1550.00  FEET,  A
RADIAL  LINE OF SAID  CURVE AT SAID  BEGINNING  BEARS  NORTH 64 ' 39' 06"  WEST;
THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL.  ANGLE OF 11' 01 57" AN
ARC DISTANCE OF 298.46 FEET TO THE TRUE POINT OF BEGINNING.

                                       B-2



<PAGE>
                                    EXHIBIT C
                                   Work Letter


     Section l.  Lnndlord's  Work. At its sole cost,  Landlord shall perform the
following  work prior to  delivering  exclusive  occupancy  of the  Building  to
Tenant.

     A. Ceiling|^|.  Landlord shall remove the existing drop ceiling and provide
a ceiling for the Building as follows:

     l.  Ceiling  shall  be  an  open,   exposed-structure  type,  insulated  to
applicable  UBC  standards  with foil or Kraft  paper  facing  towards the store
interior.

     2. Insulation shall be paint-ready and installed so as to present a uniform
surface when viewed from the floor below.

     3. The  bottom  edges of all  structural  members,  all  HVAC  plenums  and
ducting,  and all electrical supply conduits,  junctions and fittings,  shall be
located  no lower  than  fourteen  feet (14')  above the  finished  floor of the
Building ("AFF").

     B. HVAC System.  Landlord  shall modify the existing HVAC System to provide
one meeting these criteria:

     l. All  ducting  for HVAC  System  over  retail  sales  area shall be rigid
spiral.

     2. Duct routes  throughout the Building shall be parallel or  perpendicular
to the perimeter walls of the Building.

     3. The bottom of the largest  duct, or lowest  plenum,  shall be located at
fourteen feet (14') AFF.

     4.  Insulation  for the  HVAC  System  shall  complement  the  open-ceiling
aesthetics with neat duct joints and support strapping.

     5.  Registers  shall be fed from supply  ducts with direct  vertical  drops
positioned at twelve and one-half feet (12.5') AFF.

     6. Thermostats shall be provided with twelve (12) hour bypass timers.


<PAGE>
     7. All storage rooms shall be provided with a separate,  roof-mounted  HVAC
unit that shall also provide supply and return air  conditioning  for any office
in the Building.

     8. All conditioning capacity throughout the Building shall be not less than
1-ton/375 sq. ft. At a minimum,  Landlord shall add a 5 ton unit, a 7.5 ton unit
and all ducting necessary to achieve said standard.

     C.  Walls.  Landlord  shall  provide  demising  walls for the  Building  as
follows:

     l.  Landlord  shall  provide a  demising  wall,  continuous  from  floor to
ceiling,  that  shall  separate  the front  retail  sales area from and the rear
storage  area,  as shown in Tenant's  approved  store plans.  This demising wall
shall have two (2)  man-doors,  lockable  from the sales side and equipped  with
automatic closers.

     2. The side  perimeter  walls shall be furred out as follows.  Except where
enclosed by the storage  room,  existing  masonry  wall shall be furred out with
five-eighths inch (5/8") standard,  square-edged  drywall,  applied horizontally
with  staggered  vertical  joints.  The  furring  gap  shall  be not  less  than
three-quarters  inch  (3/4")  nor more  than one and  one-half  inches  (l|^|").
Drywall shall be complete from concrete  floor to roof panels or ledger  boards,
as applicable.  Joints shall be taped and finish-sanded.  Vertical intersections
with existing walls, or the store front, shall be filled and clean finished.

     3. All wall  surfaces  shall be clear of  conduit  and  other  piping  from
eight-and-one-half feet (8.5,) to fourteen feet (14') AFF.

     4. All wall surfaces shall be taped, finish-sanded and paint-ready.

     D. Restrooms. Landlord shall provide restrooms in the Building as follows.

     l.  Two  (2)   handicapped-accessible   restrooms  meeting  all  applicable
governmental standards, with appropriate accessibility signage and equipped with
automatically closing doors.

     2. Where not  otherwise  finished,  restroom  walls and  ceilings  shall be
painted with Sinclair Arizona white semi-gloss enamel paint.

     3. Each  restroom  shall be  provided  with hot water  supply;  "insta-hot"
supply shall be accessible.

     E. Office.  Within the storage  area,  Landlord  shall provide an office as
follows.

     l. The office shall be about one hundred  (100) sq. ft. and shall include a
lockable, automatically closing door.

     2. Office walls shall be painted with  Sinclair  Arizona  white  semi-gloss
enamel paint.

     3. Each office  wall shall have a standard  duplex  receptacle.  A one-half
inch  (1/2")  PVC or EMT  conduit  shall  be  routed  from the  vicinity  of the
telephone  backboard and shall terminate in a flush-mounted  J-box in the office
wall at the location specified in Tenant's approved plans.

     4. The office  shall have two (2) plate  glass  windows:  b 

     (a) a 36" x 36" one-way  window  between the office and retail  sales area;
and

     (b) a 36" x 36" clear glass window between the office and storage area.
<PAGE>
     F. Security Room. Within the storage area,  Landlord shall provide a 50 sq.
ft. office with a lockable, automatically closing door.


     Section 2. Conditions to Delivery of Possession of Premises.

     (a) Landlord shall deliver  possession of the Premises to Tenant subject to
Tenant's  satisfaction  or waiver of the  following  conditions on or before the
Estimated  Delivery Date, which  conditions shall also constitute  warranties of
Landlord as of such date:

     (i) the Premises shall be in "broom-clean" condition;

     (ii) the structure,  HVAC System, and the lighting,  electrical,  plumbing,
sewer and all other systems and fixtures  serving the Premises  shall be in good
condition and working order;

     (iii) sufficient utilities,  including gas, water and electricity, shall be
available  to heat,  light,  power,  ventilate  and  air-condition  the Premises
adequately;

     (iv) the Premises  shall conform with the approved  Building  Plans and all
applicable  building  codes,  laws,  ordinances,  rules and  regulations  of any
governmental authority, Board of Insurance Underwriters or similar agency;

     (v) the entire Parking Lot will be paved, striped and lighted; and

     (vi) the City or other  appropriate  governmental  agency shall have issued
all  certificates,  or have initialed as completed the City's  inspection cards,
for  Landlord's  Work to permit  Tenant to occupy the  Premises  to install  its
fixtures and Landlord shall have delivered copies of the same to Tenant.

     (b) Neither Tenant's taking  possession of the Premises nor its opening for
business therein shall constitute its acceptance of

     Landlord's  Work.  Tenant shall use reasonable  efforts to provide Landlord
with a "punchlist" of any defects in the Premises  within thirty (30) days after
the Delivery Date, but in all events Landlord shall promptly  correct any latent
defects and any work that is  defective  or that does not conform with this Work
Letter.  Defective  or  nonconforming  Landlord's  Work  shall  delay  the  Rent
Commencement  Date only if it prevents  Tenant from  opening  the  Premises  for
business.  Tenant shall permit  Land|^|ord access to the Premises to correct any
defective or nonconforming Landlord's Work.

     (c) In addition to its duties  under  Section  10.1 of the Lease,  Landlord
shall make all necessary repairs or replacements to the Premises'  structure and
to all systems and  fixtures  installed by Landlord for a period of one (1) year
after  the  Rent  Commencement  Date.   Landlord  shall  assign  to  Tenant  the
nonexclusive right to enforce all warranties existing or accruing after the Rent
Commencement  Date for any labor and  materials  used on or in the  Premises and
Landlord  shall  use its best  efforts  to obtain  and  transfer  to Tenant  all
extended manufacturers' warranties,  including a warranty for five (5) years for
the compressor and related parts for the HVAC System.


<PAGE>
     Section 3. Tenant's Work.  Tenant shall install all other  fixtures,  trade
fixtures,  furniture  and  improvements  to the interior of the Building  Tenant
shall require for its use and occupancy during the Lease Term ("Tenant's Work").


     Section  4.  Construction  Allowance.  Provided  Tenant  is not in  Default
hereunder,  within  five (5) days of  Tenant's  Notice to  Landlord  of the date
Tenant  shall have first  opened  for  business  at the  Premises  and  Tenant's
delivery of (i) full,  final and  unconditional  mechanic's lien releases and/or
waivers from all  suppliers of labor and  materials for Tenant's Work and (ii) a
copy of Tenant's  certificate of occupancy for the Premises,  Landlord shall pay
Tenant the Construction Allowance specified in Article I.


     Section 5. Tenant's  Signage.  At Tenant's sole cost, Tenant shall have the
right to maintain the following  signage at the Shopping Center,  subject to all
applicable  City  approvals.  In all cases,  Tenant shall be allowed the maximum
allowable  signage  the City shall  permit and  Landlord  shall  support,  at no
out-of-pocket cost to Landlord,  any sign variance Tenant shall request from the
City.

     A. Pylon Sign. At its sole cost, Tenant shall have the right to install its
standard  "PLAY CO. TOYS" signage in the bottom panel position of the pylon sign
for the Shopping  Center  located on Whites  Canyon Road,  as shown on Exhibit A
(Site Plan); provided,  however, that Tenant's right to such pylon signage shall
be subject to Landlord's  termination  if the City permits Tenant to install the
Building signage described in Section 5.B below.

     B.  Building  Sign.  At it s sole cost and subject to the City's  approval,
Tenant  shall have the right to install its  standard  "PLAY CO. TOYS" sign with
letters  no less  than  forty-eight  inches ( 48'- ) high on the  front and rear
exterior walls of the Building.

     C. Monument  Sign. At its sole cost,  Tenant shall  have|^|the  right to be
identified  in the  second-from-top  position  on the  monument  signage for the
Shopping Center as "PLAY CO. TOYS'-.

     D. Costs.  Within ten (10) days after Notice from  Landlord  itemizing  the
cost to construct  and maintain  each pylon and  monument  sign Tenants  signage
occupies,  Tenant shall pay its '-proportionate share" of such cost, which shall
equal a fraction  thereof whose numerator is the area Tenants  signage  occupies
and whose denominator is the area of all signage on such sign.


<PAGE>
LOAN NO. 950204006

TENANT:   Play Co. Toys Canyon Country, Inc.,
          a Delaware corporation

                                 SUBORDINATION,
                    NON-DISTURBANCE AND ATTORNMENT AGREEMENT



             THIS SUBORDINATION,  NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is entered into by and among Play Co. Toys Canyon Country,  Inc., a
Delaware  corporation  ("Tenant"),  whose  address is 550 Rancheros  Drive,  San
Marcos,  California  92069,  Canyon  Country Plaza,  L.P., a California  limited
partnership,  ("Landlord"),  whose address is 366 Comstock Avenue,  Los Angeles,
California  90024,  and CB  Commercial  Mortgage  Company,  Inc.,  a  California
corporation ("Lender"),  whose address is 533 South Fremont Avenue, Los Angeles,
California 90071-1798.


WITNESSETH:


              WHEREAS,  Landlord is the owner in fee simple of the real property
described in Exhibit "A" attached hereto, together with the improvements thereon
(the "Property");

           WHEREAS,  Landlord or its  predecessor and Tenant have entered into a
certain Lease (as the same may have been or may hereafter be amended,  modified,
renewed,  extended or replaced,  the "Lease"),  dated August 29, 1996 leasing to
Tenant a portion of the Property (the "Premises");

           WHEREAS,  Lender has made a certain  mortgage loan to Landlord in the
original  principal  amount of TEN MILLION DOLLARS  ($10,000,000)  (the "Loan"),
which is evidenced by Landlord's Promissory Note in such amount (the "Note") and
secured by,  among other  things,  a certain  Deed of Trust with  Assignment  of
Rents,  Security  Agreement and Fixture  Filing (the  "Mortgage")  and a certain
Assignment  of Leases  and Rents  and  Security  Deposits  (the  "Assignment  of
Leases") encumbering the Property,  which Mortgage and Assignment of Leases were
each recorded on February 29, 1996 as Instrument  No. 96- 325972 and  Instrument
No. 96-325973, respectively, in the Official Records of Los Angeles County;

           WHEREAS,   Lender,  Landlord  and  Tenant  desire  to  confirm  their
understanding  with  respect  to the Lease and the Loan and the rights of Tenant
and Lender thereunder.

             NOW  THEREFORE,  in  consideration  of  the  mutual  covenants  and
agreements contained herein and for other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:


            l. Subordination. Notwithstanding anything to the contrary set forth
in the Lease and subject to the terms and conditions of this  Agreement,  Tenant
hereby  subordinates  and subjects the Lease and the  leasehold  estate  created
thereby and all of Tenant's  rights  thereunder  to the  Mortgage  and the liens
thereof  and all  advances  and rights of Lender  thereunder  and to any and all
renewals, modifications, consolidations, replacements and extensions thereof, as
fully  and  as  if  the  Mortgage  and  all  of  its  renewals,   modifications,
consolidations,  replacements  and extensions  had been executed,  delivered and
recorded  prior to  execution  of the Lease.  Without  affecting  the  foregoing
subordination,  Lender may, from time to time: (a) extend,  in whole or in part,
by renewal or otherwise,  the terms of payment or  performance of any obligation
secured  by the  Mortgage;  (b)  release,  surrender,  exchange  or  modify  any
obligation secured by the Mortgage, or any security for such obligation;  or (c)
settle or  compromise  any claim with respect to any  obligation  secured by the
Mortgage or against any person who has given security for any such obligation.

            2. Non-Disturbance.  If, at any time, Lender or any person or entity
or any of their successors or assigns who shall acquire the interest of Landlord
under the Lease through a foreclosure of the Mortgage, the exercise of the power
of sale under the Mortgage, a deed-in-lieu of foreclosure, an assignment-in-lieu
of foreclosure or otherwise (each, a "New Owner") shall succeed to the interests
of  Landlord  under the  Lease,  so long as the Lease is then in full  force and
effect, Tenant complies with this Agreement and no "Uncured Default" (as defined
in the Lease)  exists  under the Lease or no default or event  exists  under the
Lease that,  with the passage of time or giving of notice,  or both,  becomes an
Uncured  Default on the part of Tenant  (collectively,  a "Default"),  the Lease
shall  continue in full force and effect as a direct lease between the New Owner
and Tenant,  upon and subject to all of the terms,  covenants and  conditions of
the Lease,  for the balance of the term thereof.  Tenant hereby agrees to attorn
to and accept any such New Owner as landlord  under the Lease and to be bound by
and perform all of the obligations imposed by the Lease, and Lender, or any such
New Owner of the  Property,  agrees that it will not disturb the  possession  of
Tenant and will be bound by all of the  obligations  imposed on the  Landlord by
the Lease; provided, however, that any New Owner shall not be:
<PAGE>
                  (a)  liable  for  any  act or  omission  of a  prior  landlord
(including  Landlord)  arising  prior to the date upon which the New Owner shall
succeed to the interests of Landlord under the Lease; or

                   (b) subject to any claims,  offsets or defenses  which Tenant
might have against any prior landlord (including  Landlord) arising prior to the
date upon which the New Owner shall succeed to the  interests of Landlord  under
the Lease; or

                   (c) bound by any rent or  additional  rent which Tenant might
have paid in advance to any prior landlord (including  Landlord) for a period in
excess of one (1) month or by any security  deposit,  cleaning  deposit or other
prepaid  charge which  Tenant  might have paid in advance to any prior  landlord
(including  Landlord),  except to the extent that such New Owner  actually comes
into exclusive possession of the same; or

                  (d)  bound  by any  assignment  (except  as  permitted  by the
Lease), surrender,  release, waiver, cancellation,  amendment or modification of
the Lease made without the written consent of Lender; or

                   (e)  responsible  for the  making of any  improvement  to the
Property or repairs in or to the  Property in the case of damage or  destruction
of the Property or any part  thereof due to fire or other  casualty or by reason
of condemnation unless such New Owner shall be obligated under the Lease to make
such repairs and shall have received insurance  proceeds or condemnation  awards
sufficient to finance the completion of such repairs; or

                   (f)  obligated to make any payment to Tenant  except for the
timely return of any security deposit actually received by such New Owner.

                    Nothing contained herein shall prevent Lender from naming or
joining  Tenant in any  foreclosure  or other action or proceeding  initiated by
Lender pursuant to the Mortgage to the extent  necessary under applicable law in
order  for  Lender to avail  itself of and  complete  the  foreclosure  or other
remedy,  but such naming or joinder  shall not be in derogation of the rights of
Tenant as set forth in this Agreement.


     3. Cure by Lender of Landlord Defaults.  Tenant hereby agrees that from and
after the date  hereof,  in the event of any act or omission  by Landlord  which
would give Tenant the right,  either  immediately or after the lapse of time, to
terminate  or cancel  the Lease or to claim a partial or total  eviction,  or to
abate or reduce rent, Tenant will not exercise any such right until it has given
Lender the notice and  opportunity  to cure required in Section 14 of the Lease;
provided that in the event Lender cannot  commence such cure without  possession
of the  Property,  Tenant will not exercise  any such right if Lender  commences
judicial or non judicial proceedings to obtain possession within such period and
thereafter  diligently  prosecutes  such  efforts  and cure to  completion;  and
provided further,  Tenant shall not, as to Lender,  require cure of any such act
or omission which is not susceptible to cure by Lender.


     4. Payments to Lender and Exculpation of Tenant.  Tenant is hereby notified
that the Lease and the rent and all other sums due thereunder have been assigned
to Lender as security for the Loan. In the event that Lender or any future party
to whom Lender may assign the Mortgage  notifies  Tenant of a default  under the
Mortgage and directs that Tenant

                                        3



<PAGE>
pay its rent and all  other  sums  due  under  the  Lease to  Lender  or to such
assignee, Tenant shall honor such direction without inquiry and pay its rent and
all other  sums due under the Lease in  accordance  with such  notice.  Landlord
agrees that  Tenant  shall have the right to rely on any such notice from Lender
or any such assignee without  incurring any obligation or liability to Landlord,
and Tenant is hereby instructed to disregard any notice to the contrary received
from Landlord or any third party.


     5.  Estoppel.  Tenant hereby states,  declares,  represents and warrants as
follows:

     (a) The  description of the Lease in the recitals  hereof is true,  correct
and complete,  including all amendments,  supplements and modifications thereto.
Concurrently  herewith,  Tenant is  delivering  to Landlord a true,  correct and
complete copy of the Lease,  certified to be so pursuant to a Certificate in the
form  attached  hereto as Exhibit "B" , which is not  intended  to be  recorded.
Tenant  has  properly  executed  the Lease  and the  Lease is in full  force and
effect, subject to Lender's execution and delivery to Tenant of this Agreement;

     (b) As of the Rent Commencement  Date (as defined in the Lease),  Tenant is
obligated  to pay rent on a current  basis  for the  following  portions  of the
Premises (if all, so state) in the Lease:  ALL The minimum  monthly or base rent
Tenant  shall pay for said space  pursuant  to the terms of the lease is $ 9.000
per  month.  If  applicable,  percentage  rent due under the Lease has been paid
through  and the amount of  percentage  rent for the last period paid was $ None
(if none, so state). If applicable,  common area maintenance,  taxes,  insurance
and other  charges due under the Lease have been paid through None (if none,  so
state).

     (c) With respect to the portions of the Premises referenced in subparagraph
(b) above, Tenant has accepted possession thereof under the Lease, and all items
of an executory  nature  relating  thereto to be performed by Landlord have been
completed,  including,  but not limited to,  completion of construction  thereof
(and all other  improvements  required  under  the  Lease)  in  accordance  with
applicable plans and specifications and within the time periods set forth in the
Lease,  and the  payment by  Landlord  of any  contribution  towards  work to be
performed  by Tenant  under the Lease,  except as follows  (if none,  so state):
"Landlord's  Work" as defined in the Lease has not been completed and Tenant has
not accepted the Premises.


     (d) The Premises  shall be expanded by the addition of the following  space
on the dates hereinafter indicated (if none, so state): None

     (e) Tenant  acknowledges that the initial term of the Lease commenced on 19
and shall expire on , 19_, unless sooner terminated in accordance with the terms
of the Lease.  Tenant has no option to renew or extend the lease term, except as
follows  (if none,  so  state):  Tenant has two 2 options to extend the Lease as
provided in Section 4.2 of the Lease.

     No Default on the part of Tenant exists under the Lease in the  performance
of the terms,  covenants and conditions of the Lease required to be performed on
the part of Tenant.

     (g) No  Default  on the part of  Landlord  exists  under  the  Lease in the
performance  of the terms,  covenants and conditions of the Lease required to be
performed on the part of Landlord.

     (h) Tenant has not assigned, sublet, transferred, hypothecated or otherwise
disposed of its interest in the Lease and/or the Premises, or any part thereof.

     (i)  There  have  been no  promises  or  representations  made to Tenant by
Landlord concerning the Lease or the Premises not contained in the Lease.

     (j) Neither the Lease nor any  obligations of Tenant  thereunder  have been
guaranteed by any person or entity,  except as follows (if none, so state): Play
Co. Toys Inc. a Delaware  corporation has so guaranteed as provided in Exhibit F
to the Lease.
<PAGE>
     (k) No hazardous  substances  are being (or have been or will be during the
term of the Lease) generated,  used, handled, stored or disposed of by Tenant on
the Premises or on the Property in violation of any  applicable  laws,  rules or
regulations or the terms of the Lease.

     (1) No rentals are accrued and unpaid under the Lease.

     (m) No security  or  deposits  as security  have been made under the Lease,
except  for the sum of $ None (if  none,  so  state),  in cash,  which  has been
deposited by Tenant with Landlord pursuant to the terms of the Lease.

     (n) Tenant has no defense as to its obligations  under the Lease and claims
no setoff or counterclaim against Landlord.

     (o)  Tenant  has not  received  notice  of any  assignment,  hypothecation,
mortgage  or pledge of  Landlord's  interest  in the Lease or the rents or other
amounts  payable  thereunder,  except as follows (if none,  so state):  None (p)
Tenant has no right or option of any nature whatsoever,  whether pursuant to the
Lease or  otherwise,  to purchase the Premises or the  Property,  or any portion
thereof  or any  interest  therein,  and to the  extent  that  Tenant has had or
hereafter acquires any such right or option, the same is hereby  acknowledged to
be subject and  subordinate  to the Mortgage  and is hereby  waived and released
with respect to, and shall not be asserted against, any New Owner.

                  Whenever  requested by Lender,  Tenant shall,  without charge,
execute and deliver to Lender a written  confirmation  that the  representations
contained in this  paragraph  remain  correct and complete  (or  specifying  any
matter to the contrary).


            6.  Limitation of Liability.  Lender shall not,  either by virtue of
the  Mortgage,  the  Assignment  of  Leases  or this  Agreement,  be or become a
mortgagee-in-possession  or be or become  subject to any liability or obligation
under the Lease or otherwise  until  Lender shall have  acquired the interest of
Landlord in the Premises,  by foreclosure or otherwise,  and then such liability
or obligation  of Lender under the Lease shall extend only to those  liabilities
or  obligations  accruing  subsequent  to the date that Lender has  acquired the
interest of Landlord in the Premises as modified by the terms of this Agreement.
In addition, upon such acquisition,  Lender shall have no obligation,  nor incur
an liability  beyond  Lender s then equity  interest,  if any, in the  Premises.
Furthermore,  in the event of the  assignment  or  transfer  of the  interest of
Lender under this  Agreement,  all  obligations  and liabilities of Lender under
this  Agreement  shall  terminate  and,  thereupon,  all  such  obligations  and
liabilities  shall  be the sole  responsibility  of the  party to whom  Lender's
interest is assigned or transferred.


            7. Notice. Any notice, demand, statement,  request, consent or other
communication  made hereunder  shall be in writing and delivered (i) personally,
(^n) mailed by certified or registered  mail,  postage  prepaid,  return receipt
requested  or (^ni) by  depositing  the same  with  FedEx or  another  reputable
private courier service, postage prepaid, for next business day delivery, to the
parties at their  addresses first set forth above and shall be deemed given when
delivered personally, or four (4) Business Days after being placed in the United
States mail,  if sent by certified or  registered  mail, or one (1) business day
after deposit with such private courier  service.  Rejection or other refusal to
accept or the inability to deliver because of changed address of which no notice
was given as herein required shall be deemed to be receipt of the notice, demand
or request  sent.  By giving to the other  parties  hereto at least fifteen (15)
days' prior written notice thereof in accordance with the provisions hereof, the
parties hereto shall have the right from time to time to change their respective
addresses  to any other  address  within the United  States of  America.  Tenant
agrees to send a copy of any  notice or  statement  under the Lease to Lender at
the same time such notice or statement is sent to Landlord.
<PAGE>
            8. Miscellaneous.

                 (a) In the event of any conflict or  inconsistency  between the
provisions of this  Agreement and the Lease,  the  provisions of this  Agreement
including  any  provisions  of the Lease  expressly  incorporated  herein  shall
govern;  provided,  however,  that  the  foregoing  shall  in  no  way  diminish
Landlord's  obligations  or  liability  to  Tenant  under  the  Lease.  Lender's
enforcement  of any  provisions  of this  Agreement  or the  Mortgage  shall not
entitle Tenant to claim any interference with the contractual  relations between
Landlord  or Tenant or give rise to any claim or  defense  against  Lender  with
respect to the enforcement of such provisions.

                  (b) Tenant agrees that this Agreement  satisfies any condition
or  requirement  in the Lease  relating  to the  granting  of a  non-disturbance
agreement.

                  (c) Tenant  agrees that it will not  subordinate  the Lease to
the lien of any  mortgage or deed of trust of Landlord  other than the  Mortgage
for so long as the Mortgage shall remain a lien on the Property.

                   (d) This Agreement  shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided,  however, that the
interest of Tenant  under this  Agreement  may not be  assigned  or  transferred
without the prior written consent of Lender, which Lender shall not unreasonably
withhold or delay.

                  (e)  The  captions   appearing  under  the  paragraph   number
designations  of this Agreement are for  convenience  only and are not a part of
this  Agreement and do not in any way limit or amplify the terms and  provisions
of this Agreement.

                  (f) If any portion or portions of this Agreement shall be held
invalid or inoperative,  then all of the remaining portions shall remain in full
force and effect,  and, so far as is reasonable  and  possible,  effect shall be
given to the intent  manifested by the portion or portions held to be invalid or
inoperative.

                  (g) This  Agreement  shall be  governed  by and  construed  in
accordance with the laws of the State in which the Property is located.

                  (h) This  Agreement  may be executed in any number of separate
counterparts,  each of which  shall be  deemed  an  original,  but all of which,
collectively and separately, shall constitute one and the same agreement.

                   (i) This  Agreement  cannot be  altered,  modified,  amended,
waived, extended,  changed, discharged or terminated orally or by any act on the
part of Tenant,  Landlord or Lender,  but only by an agreement in writing signed
by  the  party  against  whom  enforcement  of  any  alteration,   modification,
amendment, waiver, extension, change, discharge or termination is sought.

            IN WITNESS  WHEREOF,  the parties have executed this Agreement as of
the dates set forth adjacent to their signatures below to be effective as of the
date of the Mortgage.


Date:                 , 1996  TENANT: PLAY CO. TOYS CANYON COUNTRY,
                             INC., a Delaware corporation

                             By:
                             Name:
                             Title:

Date:   ,         19 LANDLORD: CANYON COUNTRY PLAZA, L.P., a
                            California limited partnership
                            By:
                            Name:
                            Title:

Date:             , 19_  LENDER: CB COMMERCIAL MORTGAGE
                                COMPANY, INC., a California corporation

                                By:
                                Name:
                                Title:

<PAGE>


WHEN RECORDED, RETURN TO:

Wilkie Farr & Gallagher
One Citicorp Center
153 East 53 rd Street
New York, New York 10022-4677
Attention: Monty Davis


<PAGE>
STATE OF CALIFORNIA
                            )    ss.
COUNTY OF LOS ANGELES                 )



                                       personally appeared
                                                         and

personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the person(s) whose name(s) (is) (are)  subscribed  to|^|t|^|h|^|e  within
instrument and acknowledged to me tha ( e (she) (they) executed the same in (his
(her)  (their)  authorized  capacity(ies),   and  that  by  (his  (her)  (their)
signature(s) on the instrument the person(s),  or the entity upon behalf o which
the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

            CHRISTINA BRUNO
            Notary Public in and for said State

(SEAL)

STATE OF CALIFORNIA
                                  ss.
COUNTY OF                    )



                                            personally appeared
                                                                 and

personally known to me ( ) to be the person whose  namesubscribed  to the within
instrument  and  acknowledged  to me that  Executed  the same in his  authorized
capacity and that by his  Signature on the  instrument  the  person|^|.,  or the
entity upon behalf of which the person, acted, executed the instrument.

WITNESS my hand and official seal.

                           BETTE J. HULL
                                  Notary Public in and for said State



<PAGE>
STATE OF CALIFORNIA           )
                              )    ss.
COUNTY OF )



                                                personally appeared
                                                     and

personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the person(s) whose name(s) is (are)  subscribed to the within  instrument
and  acknowledged  to me that e (she)  (they)  executed  the  same in |^|  (her)
(their) authorized  capacity(ies),  and that by is (her) (their) signature(s) on
the instrument  the person(s),  or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.
            Elsa J. Gonsalves
              Comm. #11014427

 NOTARY PUBLIC  CALIFORNIA
            Comm. Expires. Jan. 23,1998    Notary Public in  and for  said State

(SEAL)







<PAGE>
                                  EXHIBIT "A"

                              PROPERTY DESCRIPTION


     THE LAND  SITUATED  IN THE STATE OF  CALIFORNIA,  COUNTY OF LOS ANGELES AND
DESCRIBED AS FOLLOWS:

PARCEL 1:

     THAT  PORTION OF THE NORTH  HALF OF THE  SOUTHEAST  QUARTER OF SECTION  20,
TOWNSHIP 4 NORTH,  RANGE 15 WEST,  SAN  BERNARDINO  MERIDIAN,  ACCORDING  TO THE
OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:

     BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE WESTERLY
LINE OF WHITES  CANYON ROAD,  50 FEET WIDE,  AS SHOWN ON MAP OF TRACT NO. 25924,
RECORDED  IN BOOK 667 PAGES 93 TO 97  INCLUSIVE  OF MAPS,  IN THE  OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY,  WITH THE WESTERLY  PROLONGATION OF THAT CERTAIN
COURSE IN THE  CENTER  LINE OF SOLEDAD  CANYON  ROAD,  110 FEET  WIDE,  HAVING A
BEARING AND LENGTH OF NORTH 89 58' 39" EAST 1355.68  FEET, AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY PROLONGATION, SOUTH Oo 16' 36" EAST 722.24 FEET TO A
POINT OF INTERSECTION  WITH THE NORTHEAST LINE OF LOT 210 OF TRACT NO. 25927, AS
SHOWN ON MAP RECORDED IN BOOK 731 PAGES 3 TO 8 INCLUSIVE OF MAPS,  IN THE OFFICE
OF SAID COUNTY RECORDER;  THENCE ALONG SAID NORTHEAST LINE SOUTH 63 24' 45" EAST
557.99  FEET;  THENCE  LEAVING  SAID  NORTHEASTERLY  LINE NORTH 26 35' 15" EAST,
248.49 FEET;  THENCE NORTH 89 58' 39" EAST,  199.94 FEET; THENCE NORTH O 16' 54"
WEST, 750 FEET TO THE CENTER LINE OF SAID SOLEDAD CANYON ROAD; THENCE ALONG SAID
CENTER LINE SOUTH 89 58' 39" WEST , 809.94 FEET TO THE POINT OF BEGINNING.

     EXCEPT THAT PORTION OF SAID LAND INCLUDED  WITHIN THE SOLEDAD  CANYON ROAD,
AS SHOWN ON SAID MAP OF TRACT NO. 25924.

     ALSO EXCEPT ALL OIL, GAS AND MINERAL RIGHTS BELOW 500 FEET, BUT WITHOUT ANY
SURFACE RIGHTS AND RIGHT OF SURFACE ENTRY,  FROM THAT PORTION OF SAID LAND LYING
SOUTHWESTERLY OF SOLEDAD CANYON ROAD, AS ESTABLISHED BY DECLARATION OF THE BOARD
OF  SUPERVISORS OF SAID COUNTY,  NOTED IN ROAD BOOK 6 PAGE 123,  RECORDS OF SAID
BOARD OF  SUPERVISORS,  AS  RESERVED IN THE DEED FROM ETHEL M.  FURNIVALL,  ALSO
KNOWN AS EDITH M. FURNIVALL,  JOHN COLONKA,  JR. AND JOAN IDA COLONKA,  RECORDED
JUNE 13, 1962 IN BOOK D-1647 PAGE 8, OFFICAIL RECORDS.

     ALSO EXCEPT ANY AND ALL MINERAL  RIGHTS,  INCLUDING OIL AND ALL HYDROCARBON
SUBSTANCES  IN THE LAND HEREIN  DESCRIBED AT A DEPTH OF MORE THAN 500 FEET BELOW
THE  SURFACE  OF SAID LAND.  GRANTOR  SHALL NOT HAVE ANY RIGHT TO ENTER UPON THE
SURFACE OF SAID LAND TO EXPLORE  FOR OR REMOVE ANY OF SAID  MINERALS,  BUT SHALL
HAVE AN UNLIMITED RIGHT TO ENTER UPON SAID LAND AT A DEPTH IN EXCESS OF 500 FEET
FROM THE  SURFACE  THEREOF TO  EXPLORE  FOR OR REMOVE  ANY  MINERALS,  INCLUDING
PETROLEUM  PRODUCTS,  FROM THAT  PORTION  OF SAID LAND  LYING  NORTHEASTERLY  OF
SOLEDAD  CANYON ROAD, AS  ESTABLISHED BY DECLARATION OF THE BOARD OF SUPERVISORS
OF SAID  COUNTY,  NOTED  IN ROAD  BOOK 6 PAGE  123,  RECORDS  OF SAID  BOARD  OF
SUPERVISORS,  AS RESERVED BY EDWIN A. CARPENTER,  A MARRIED MAN, AS HIS SEPARATE
PROPERTY, AND EDWIN A. CARPENTER,  TRUSTEE FOR THE ESTATE OF E. PEARL CARPENTER,
DECEASED, RECORDED NOVEMBER 10, 1960 AS INSTRUMENT NO. 2619, IN BOOK D 1031 PAGE
976, OFFICIAL RECORDS.

PARCEL 2:

     THAT  PORTION OF THE NORTH  HALF OF THE  SOUTHEAST  QUARTER OF SECTION  20,
TOWNSHIP 4 NORTH,  RANGE 15 WEST,  SAN  BERNARDINO  MERIDIAN,  ACCORDING  TO THE
OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:

     BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE WESTERLY
LINE OF WHITES  CANYON  ROAD,  50 FEET WIDE AS SHOWN ON MAP OF TRACT NO.  25924,
RECORDED  IN BOOK 667 PAGES 93 TO 97  INCLUSIVE  OF MAPS,  IN THE  OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY,  WITH THE WESTERLY  PROLONGATION OF THAT CERTAIN
COURSE IN THE  CENTER  LINE OF SOLEDAD  CANYON  ROAD,  110 FEET  WIDE,  HAVING A
BEARING AND LENGTH OF NORTH 89 58' 39" EAST 1355.68 FEET AS SHOWN ON SAID MAP|^|
THENCE ALONG SAID  SOUTHERLY  PROLONGATION,  SOUTH O 16' 36" EAST 390.51 FEET TO
THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID SOUTHERLY PROLONGATION
SOUTH O 16' 36" EAST 331.73 FEET TO THE  NORTHEASTERLY  LINE OF LOT 210 OF TRACT
NO.  25927,  AS PER MAP RECORDED IN BOOK 731 PAGES 3 TO 8 INCLUSIVE OF MAPS,  IN
SAID OFFICE OF THE COUNTY RECORDER;  THENCE ALONG THE NORTHEASTERLY LINE OF SAID
LOT 210 NORTH 63 24' 45" WEST  114.85  FEET TO THE  BEGINNING  OF A  NON-TANGENT
CURVE  CONCAVE  NORTHWESTERLY  HAVING A RADIUS OF 1550.00 FEET, A RADIAL LINE OF
SAID CURVE AT SAID BEGINNING BEARS NORTH 64 39' 06" WEST;  THENCE  NORTHEASTERLY
ALONG  SAID CURVE  THROUGH A CENTRAL  ANGLE OF 11 o 01' 57" AN ARC  DISTANCE  OF
298.46 FEET TO THE TRUE POINT OF BEGINNING.
<PAGE>
                                   EXHIBIT "B"

                           CERTIFICATE REGARDING LEASE


                               LOAN NO. 950204006


           The  undersigned  ("Tenant"),   hereby  certifies  to  CB  Commercial
Mortgage  Company,  Inc., its successors and assigns,  that attached hereto is a
true,  correct and complete  copy of the Lease,  including  all  amendments  and
modifications  thereto,  if any, between Tenant,  as tenant,  and Canyon Country
Plaza, L.P., a California limited partnership,  as landlord, with respect to the
premises located at 19120 Soledad Canyon Road, Santa Clarita, California 91351.

            Executed this      day of                      199




                                   TENANT

                                   PLAY CO. TOYS CANYON COUNTRY, INC.,
                                   a Delaware corporation

                                   By:
                                   Name:
                                   Title:




                                    13



<PAGE>



                                   EXHIBIT "A"

                              PROPERTY DESCRIPTION








<PAGE>
                                   EXHIBIT "B"

                           CERTIFICATE REGARDING LEASE


                                    LOAN NO.


           The  undersigned  ("Tenant"),   hereby  certifies  to  CB  Commercial
Mortgage  Company,  Inc., its succession and assigns,  that attached hereto is a
true,  correct and complete  copy of the lease,  including  all  amendments  and
modifications  thereto,  if any, between Tenant, as tenant, and , a as landlord,
with  respect  to the  premises  located at 19120  Soledad  Canyon  Road,  Santa
Clarita, California 91351.

            Executed this   day of                    ,   199




                                TENANT




                                By:
                                Name:
                                Title:






                      ACCESS AND RENTAL PAYMENT AGREEMENT


     WHEREAS,  CONGRESS FINANCIAL CORPORATION (WESTERN) ("Congress") has entered
or is about to enter  into  certain  financing  agreements  with  PLAY CO.  TOYS
("Debtor"),  pursuant  to which  Congress  has been or may be granted a security
interest in any or all of Debtor's personal property, including, but not Limited
to, inventory and equipment (Hereinafter the "Personal Property") and,

     WHEREAS,  the Personal  Property has or may become affixed to or be located
on, wholly or in part, the certain real estate located at ......  .. . ..... ...
 ... . ........  . ..... ....  ........  ..... . ... ..... ..  ..........  .. the
legal  description  of which is sct forth in  Exhibit  "A"  attached  hereto and
incorporated herein by this reference (hereinafter the "Premises") and,

     WHEREAS,  the  undersigned  has an  interest  in  the  Premises  as  owner,
mortgagee  or lessor,  Now,  THEREFORE  in  consideration  of any loans or other
financial  accommodation  extended by Congress to Debtor, at any tine, and other
good and valuable consideration, the undersigned agrees as follows|^|

     (a) 'I|^|at it waives and  relinquishes  any landlord's Lien, all rights of
Levy or distraint,  security  interest or other interest the undersigned may now
or  hereinafter  have  in any of the  Personal  Property  whether  for  rent  or
otherwise;

     (b) That the  Personal  Property  may be  installed  in or  located  on the
Premises and is not and shall not be deemed a fixture or part of the real estate
but shall at all times be considered personal property; .

     (c) that it disclaims  any interest in the Personal  Property and agrees to
assert no claim to the Personal Property while Debtor is indebted to Congress;

     (d) That Congress or its representatives may enter upon the Premises at any
time to inspect or remove the Personal  Property and may advertise and conduct a
public or private sale or sales thereon;

     (e) That Congress, at its option, may enter the Premises for the purpose of
repossessing,   removing,  selling  or  otherwise  dealing  with  said  Personal
Property, and such license shaIl be irrevocable and shall continue from the date
Congress  enters the Premises for as long as Congress deems necessary but not to
exceed a period of three (3) months  after The  receipt by  Congress  of written
notice by the  undersigned  directing  removal of the  Personal  Property at the
receipt ,  prorated  on a per diem basis to be  determined  on a thirty (SO) day
month, without incurred any other obligations of Debtor
<PAGE>
     (f) The  undersigned  agrees to give  notice in  writing  by  certified  or
registered  mail of any default by Debtor of any of the provisions of said Lease
or the mortgage upon the premises held by the  undersigned,  as the case may be,
to:


                       CONGRESS FINANCIAL CORPORATION
                       225 South Lake Avenue, Suite 1000
                       Pasadena. California 91101
                       Attn:  Portfolio Manager

Upon receipt of said notice,  Congress shall  thereupon have the right,  but not
the  obligation,  to cure said default with ten (10) days thereafter Any payment
made or act done by Congress to cure any such default  shall not  constitute  an
assumption of the lease or any obligations of Debtor -

      This Access and Rental payment  Agreement may not be changed or terminated
orally  and  is  binding   upon  the   undersigned   and  the  heirs,   personal
representatives,  successors  and assigns of the  undersigned  and inures to the
benefit of Congress and the successors of Congress. .

Dated this           .. . day of .1996
Witnessed By




                               Landlord-Mortgagee


                               Landlord-Mortgagee
ACCEPTED by:

CONGRESS FINANCIAL. CORPORATION

By.

Title: Senior Vice President




              INSERTS TO ACCESS AND RENTAL PAYMENT AGREEMENT

    1-  pursuant to a lease (the "Lease") for the Premises with Debtor
    as tenant,

    2.  but Congress shall repair all damage caused to the Premises
    thereby,

    3.  earlier of (i) Congress entering the Premises, or (^n)

    4.  Congress shall be liable for all obligations occurring under
    the Lease from and after its entry and through its vacation of the
    Premises including



<PAGE>
                                GUARANTY OF LEASE


          THIS  GUARANTY  OF  LEASE  (this  "Guaranty")  is  made  for  valuable
consideration by PLAY CO. TOYS, INC., a Delaware corporation (--Guarantor"),  in
favor  of  CANYON  COUNTRY  PLAZA,  L.P  .,  a  California  limited  partnership
("Landlord'-),  in connection with that certain lease dated , 1996 (the "Lease")
pursuant  to which  Landlord  leases to PLAY CO. TOYS CANYON  COUNTRY,  INC.,  a
Delaware corporation ('-Tenant"),  those certain premises in the shopping center
known  as  -'canyon   country   Plaza'-  in  Santa  Clarita,   California   (the
'-Premises").

          NOW, THEREFORE, Guarantor hereby agrees as follows:

          1. Guarantor does hereby absolutely and unconditionally  guarantee and
promise to Landlord the due, punctual and full performance by Tenant of each and
all of the  covenants,  obligations,  liabilities  and  promises of Tenant to be
performed  from the "Effective  bate" until the  expiration of the  thirty-sixth
(36th)  month of the "Lease  Term'- as such terms are defined in the Lease,  and
the truth and accuracy of each and all of the  representations and warranties of
Tenant  contained in the Lease,  including  without  limitation,  the payment of
"Rent'- (as defined in the Lease);  provided  that Tenant-s  non-performance  or
inaccuracy shall have become an "Uncured Default" (as defined in the Lease).

     2.  Guarantor  does hereby agree that,  without the consent of or notice to
Guarantor and without  affecting any of the obligations of Guarantor  hereunder:
(a) any term,  covenant or condition  of the Lease may be amended,  compromised,
released  or  otherwise  altered by  Landlord  and Tenant,  and  Guarantor  does
guarantee and promise to perform all the  obligations  of Tenant under the Lease
as so amended,  compromised,  released or altered; (b) any guarantor of or party
to the  Lease may be  released,  substituted  or added;  (c) any right or remedy
under the Lease or any other  instrument  or  agreement  may be  exercised,  not
exercised, impaired, modified, limited, destroyed, or suspended; (d) Landlord or
any other Person may deal in any manner with Tenant, any guarantor, any party to
the Lease or any other  Person;  and (e) all or any part of the  Premises  or of
Tenant's  rights or  liabilities  under the Lease  may be  sublet,  assigned  or
assumed.  Notwithstanding  anything herein to the contrary,  prior to commencing
any judicial  action against  Guarantor,  Landlord shall give Guarantor ten (10)
days- written notice and opportunity to perform this Guaranty.

          3. Guarantor  hereby waives and agrees not to assert or take advantage
of (a) any right to  require  Landlord  to proceed  against  Tenant or any other
Person or to pursue any other remedy before proceeding  against  Guarantor;  (b}
the defense of any statute of limitations in any action under or related to this
Guaranty or the Lease;  (c) any right or defense that may arise by reason of the
incapacity,  lack of  authority,  death or  disability  of  Tenant  Or any other
Person;  (d) any right or defense arising by reason of the absence,  impairment,
modification,  limitation,  destruction  or  cessation  ( in  bankruptcy,  by an
election  or  remedies,  or  otherwise)  of  the  liability  of  Tenant,  of the
Subrogation  rights of Guarantor or of the right of Guarantor to proceed against
Tenant for  reimbursement,  and (e) the benefits of any  statutory  provision or
procedural rule limiting the liability of a surety.

         4.  Guarantor  hereby waives and agrees not to assert or take advantage
of any right or defense based on the absence of any or all presentments, demands
(including  demands  for  performance),  notices  (including  notices of adverse
change in the financial status of Tenant or other facts which increases the risk
to  Guarantor,  notices of  non-performance  and notices of  acceptance  of this
Guaranty) and protests of each every kind.

     5. Guarantor does hereby agree that if claim is ever made upon Landlord for
repayment  or recovery of any amount or amounts  received by Landlord in payment
or on account of the amounts hereby  guaranteed and Landlord  repays all or part
of such amount by reason of (a) any judgment, decree or order or of any court or
administrative  body having  jurisdiction or (b) any settlement or compromise of
any such claim effected by Landlord with any such claimant  (including Tenant or
any other  guarantor}  for any reason  other than that no  Uncured  Default  had
occurred , then in such event guarantor  agrees that any such judgment,  decree,
order, settlement or compromise shall be binding upon Guarantor, notwithstanding
the expiration or termination of the Lease or other instrument evidencing any of
the amounts hereby guaranteed and Guarantor shall be and remain liable hereunder
for the amount so repaid or  recovered  to the same extent as if such amount had
never originally been received by Landlord.
<PAGE>
     6.  Guarantor does hereby agree that for the benefit of Landlord and Tenant
and  to  the  fullest  extent  permitted  by  law,  Guarantor   irrevocably  and
unconditionally  waives  any  and  all  rights  of  subrogation,  reimbursement,
indemnification,  contribution,  or similar  rights against Tenant or its assets
(arising by contract or by law or otherwise) as a consequence  of this Guaranty,
including,  without  limitation,  the payment or performance of any  obligations
hereby  guaranteed,  and further  agrees that Guarantor will not assert any such
right of subrogation,  reimbursement,  indemnification,  contribution or similar
right at any time in respect to the Lease. It is agreed that  Landlord's  rights
under this  Paragraph 6 are such that the remedy at law for breach thereof would
be inadequate,  and that Landlord shall be entitled tP specific  performance and
enforcement  thereof,  including,   without  limitation,  the  imposition  of  a
restraining  order or injunction.  Nothing in this Paragraph 6 shall diminish or
relieve any  obligations  or  liabilities  of Tenant to  Landlord.  Landlord and
Tenant and their  respective  successors  and assigns are  intended  third party
beneficiaries  of the  waivers  and  agreements  made  in this  Paragraph  6 and
Landlord's  rights  under this  Paragraph  6 shall  survive  the  expiration  or
termination of the Lease.

          '7. The liability of Guarantor and all rights,  powers and remedies of
Landlord  hereunder and the liability and  obligations of Tenant and all rights,
powers and remedies of Landlord under the Lease and under this Guaranty shall be
in addition to all rights, powers and remedies given to Landlord by law.

           s. This  Guaranty  applies to, inures to the benefit of and binds all
parties hereto,  their heirs,  devisees,  legatees,  executors,  administrators,
representatives,  successors  and assigns  (including  any purchaser at judicial
foreclosure  or  trustee's  sale or a holder  of a deed in lieu  thereof).  This
Guaranty may be assigned by Landlord  voluntarily or by operation of law without
reducing or modifying the liability of Guarantor hereunder.

          9.  This  Guaranty  shall  constitute  the  entire  agreement  between
Guarantor and Landlord with respect to the subject matter  hereof.  No provision
of this  Guaranty  or right of  Landlord  hereunder  may be  waived  nor may any
guarantor be released  from any  obligation  hereunder  except by a writing duly
executed by an authorized officer, director, trustee or partner or Landlord.

          10. If more than one Person  signs  this  Guaranty,  each such  Person
shall be deemed a Guarantor and the obligation of all such  Guarantors  shall be
joint and several. When the context and construction so requires, all words used
in the singular herein shall be deemed to have been used in the plural. The word
"Person" as used herein shall include an individual, company, firm, association,
partnership, corporation, limited liability company, trust or other legal entity
of any kind whatsoever.

         11. Should any one or more provisions of this Guaranty be determined to
be  illegal  or  unenforceable,  all  other  provisions  shall  nevertheless  be
effective.

     12. The waiver or failure to enforce any provision of this  Guaranty  shall
not  operate  as a waiver of any other  breach  of such  provision  or any other
provisions hereof.

     13. If either= Landlord or Guarantor  participates in an action against the
other arising out of or in connection  with this  Guaranty,  the one  prevailing
shall be  entitled  to have and recover  grons the other  reasonable  attorneys'
fees,  collection  costs and other costs incurred in and in preparation  for the
action.

     14. Guarantor agrees that all questions with respect to this Guaranty shall
be  governed  by,  and  decided  in  accordance  with,  the laws of the State of
California.

     15.  Guarantor agrees that the United States District Court for the Central
District of California and the Los Angeles County Superior court are appropriate
venues to litigate any dispute  which may arise with respect to this Guaranty or
the relationship of Guarantor and Landlord hereunder, and hereby consents to the
jurisdiction of said courts to adjudicate any such disputes.
<PAGE>
     16. If Guarantor  executes this Guaranty as a partnership,  each individual
executing  this Guaranty on behalf of that  partnership  represents and warrants
that he or she is a general partner of the partnership and that this Guaranty is
binding upon the partnership in accordance with its terms. If Guarantor executes
this Guaranty as a corporation,  each of The Persons  executing this Guaranty on
behalf of the corporation  covenants and Warrants that the corporation is a duly
authorized and existing  corporation,  that the corporation has and is qualified
to transact  business in the State o= California,  that the corporation has full
right,  authority  and power to enter  into this  Guaranty  and to  perform  its
obligations  hereunder,  that each Person signing this Guaranty on behalf of the
corporation  is  authorized  to do so and that this Guaranty is binding upon the
corporation in accordance with its terms.

     17. In the event Tenant shall become  insolvent or shall be  adjudicated  a
bankrupt,  or shall file a petition  for  reorganization,  arrangement  or other
relief under any present or future  provisions of the United  States  Bankruptcy
Code, or if such a petition be filed by creditors of Tenant,  or if Tenant shall
seek a judicial  readjustment  of that rights of its creditors under any present
or future  Federal or State law,  or if a  receiver  of all or part of  Tenant's
property  or  assets  Is  appointed  by the  State  or  Federal  court,  no such
proceeding or action taken therein shall modify,  diminish, or in any way affect
the liability of Guarantor  under this Guaranty,  and the liability of Guarantor
with respect to the Lease shall be of the same scope as if Guarantor had .itself
executed  the lease as the named  Tenant  therein,  and no  "rejection-'  and/or
"termination-|^|  of the  Lease in any of the  proceedings  referred  to in this
Paragraph 17 shall be  effective  to release  and/or  terminate  the  continuing
liability of Guarantor to Landlord under this Guaranty.  If, in connection  with
any of the  circumstances  referred to in this  Paragraph  17,  Landlord  should
request  that  Guarantor  execute a new lease for the  balance of the Lease Term
guaranteed  hereunder  (unaffected by any such '-rejection" and/or "termination"
in any of such proceedings), but in all other respects identical with the Lease,
Guarantor shall do so as the named tenant under such new lease  (irrespective of
the fact that the case may have been  "rejected" or  "terminated"  in connection
with any of the proceedings  referred to in this paragraph 17). Should Guarantor
fail or refuse to execute such a new lease, without limiting any of the legal or
equitable  remedies available to Landlord on account of such failure or refusal,
Guarantor acknowledges and agrees that Landlord may seek specific performance o!
the covenant of Guarantor  contained in this  Paragraph 17 to execute such a new
lense.

              IN WITNESS  WHEREOF,  Guarantor  has  executed  and  delivered  to
Landlord this Guaranty as of this 18 day of July , 1996 .

                             GUARANTOR

                             PLAY  CO.  TOYS,  INC, a  Delaware
                             corporation


                             By:
                             Name
                             Its:


                             By:
                             Name: Angela Burnett
                             Its: Chief Financial Officer








<PAGE>
                                 ACKNOWLEDGMENT

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO


     On July , 1996,  before me, the  under"signed,  a Notary  Public in and for
said  State,  personally  "  appeared  Richard  L.  Brady and  Angela  Burnett ,
personally  known  to me ( ' ) to be the  person(s)  whose  name(s)  |^| re sub-
scribed|^| he within  instrument and  acknowledged  to me that they executed the
same in  their)  authorized  capacity,  and  that by  their  signature  s on the
instrument  the  person(s) , or the entity  upon  behalf of which the  person(s)
acted, executed the instrument.

    WITNESS my hand and official seal.



                          Signature:
[SEAL]
                       Printed Name:

<PAGE>
                                   EXHIBIT G
                              Estoppel Certificate

                              [date]

TO:

    CANYON COUNTRY PLAZA, L.P., a California limited partnership (Landlord), and
PLAY CO. TOYS CANYON COUNTRY,  INC., a Delaware corporation  (Tenant),  refer to
that certain Lease dated , 1996 (Lease) , by and between Landlord and Tenant for
those Premises located in Santa Clarita, California, and as more fully described
on Exhibit 1 attached hereto.

    To the best of its actual knowledge as of the date hereof,  Tenant certifies
the following:

     (1) The undersigned has entered into occupancy of the Premises described in
said Lease;

     (2) The  Lease is in full  force  and  effect  and has not  been  assigned,
modified, supplemented or amended in any way, except as follows:

     (3) The Rent Commencement Date of the Lease is , 19 ;

     (4) The Lease Term shall  expire on , 19 ;  provided,  however,  Tenant has
additional options to extend the Lease Term as provided therein;

     (5) Current annual Base Rent is C$ ), payable in monthly installments of C$
) .

     (6) Tenant has certain  exclusive  rights with respect to the sale of goods
and services in the Shopping Center, and Landlord has agreed to restrict certain
uses of the Shopping  Center which  rights and  restrictions  are more fully set
forth in the Lease;

     (7) All  conditions  of the Lease to be performed by Landlord and necessary
to the enforce ability of the Lease have been satisfied;

     (8) There are no defaults by either Landlord or Tenant thereunder;

     (9) No rents have been paid in advance of one (1) month except ;

     (10) There are no existing  defenses or offsets which the  undersigned  has
against the Landlord;

     (11) There have been no assignments  of the Lease,  in whole or in part, or
subleases of all or part of the Premises except ; and

     (12) There have been no amendments or modifications to the Lease except

    Executed as of the date first written above.

                  TENANT:     PLAY CO. TOYS CANYON COUNTRY INC.,
                              a Delaware corporation



                              By:
                              Name:
                              Its:

WHEN RECORDED, RETURN TO:

Wilkie Farr & Gallagher
One Citicorp Center
153 East 53 rd Street
New York, New York 10022-4677
Attention: Monty Davis

Re:  Canyon Ccountry Plaza
    Santa Clarita, CA

<PAGE>
                               MEMORANDUM OF LEASE

     This MEMORANDUM of LEASE  Memorandum) is made and entered into effective as
of v 2 , 1996, by and between CANYON COUNTRY PLAZA L. P. , a California  limited
partnership  (Landlord)  , and PLAY CQ. TOYS CANYON  COUNTRY,  INC. , a Delaware
corporation (Tenant) .

     1. TERM AND PREMISES.  For the Lease Term and upon the provisions set forth
in that certain  written  lease of even date  herewith  from  Landlord to Tenant
(Lease),  all of which provisions are specifically  made a part hereof as though
fully and completely  set forth herein,  Landlord  leases to Tenant,  and Tenant
leases  from  Landlord,  that  certain  real  property  consisting  of land  and
improvements  (Premises)  located  in the City of Santa  Clarita,  County of Los
Angeles, State of California, depicted on Exhibit A hereto and legally described
in Exhibit B hereto,  together  with all  rights of  ingress  and egress and all
other rights appurtenant to said Premises,  including,  without limitation,  the
right  to  use  the  Building  constructed  on the  Premises  for  the  purposes
contemplated in the Lease, all of which rights are more  particularly  described
in the Lease. The Premises will be part of the commercial  shopping center known
as "Canyon Country Plaza" (shopping Center).

     2. OPTIONS TO EXTEND TERM- Reference is particularly  made to Article TV of
the Lease  wherein  Tenant is  granted  options  to extend the Lease Term on the
terms and conditions set forth therein

     3. RESTRICTIONS.  Reference is particularly made to Article IX of the Lease
wherein (among other things) Tenant is granted certain  exclusive rights to sell
merchandise  described  therein and under the terms and conditions set forth, in
or upon the  Shopping  Center.  In addition,  said Article IX specifies  certain
other permitted and restricted uses.

     4. PARKING AREA AND COMMON  FACILITIES.  Reference is particularly  made to
Article VII of the Lease,  concerning  those  common  areas,  including  parking
facilities,  used in common by other tenants in the Shopping  Center as depicted
on Exhibit A, and the operation and  maintenance  of such common areas,  wherein
Landlord  grants to Tenant a  nonexclusive  easement  to use such  common  areas
during the Lease Term.

     5. PURPOSE OF  MEMORANDUM  OF LEASE.  This  Memorandum  is prepared for the
purposes  of  recording  and in no  way  modifies  the  express  and  particular
provisions  of the  Lease.  If  terms  of  this  Memorandum  and the  Lease  are
inconsistent, the terms of the Lease shall control.

     6. FOR THB BENEFIT OF THE  PREMISES.  Landlord  and Tenant  intend that the
covenants, conditions and restrictions described and referred to herein shall be
both  personal  to  Landlord  and Tenant and  binding  on their  successors  and
assigns-in-interest.  Each  successive  owner of the  Premises or of any portion
thereof,  and each person having any interest  therein derived through any owner
thereof,  shall be bound by such covenants,  conditions and restrictions for the
benefit of the Premises.

    IN WITNESS WHEREOF this Memorandum of Lease has been executed as of the date
first written above.

          LANDLORD                           TENANT

CANYON  COUNTRY  PLAZA  L.P.,  a   PLAY CO. TOYS CANYON COUNTRY,
California limited partnership     INC., a Delaware corporation

By:  GSF Canyon Country ,
    Inc., a California corporation, General Partner



By :                                                    By
Name:  Robert N. Gold                                   Name   Richard Brady
Its:   president                                        Its: president, CEO







<PAGE>
                                 ACKNOWLEDGMENTS

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

     me , appeared personally Notary

     personally  known to me (or  proved  to me ( ) whose  name(s)  satisfactory
evidence) to be are subscribed to the within  instrument and  acknowledged to me
that  he/she/they  executed  the  same  their  signature(s)  on  the  instrument
capacity(ies),  and that by  his/her/  upon  behalf of which the  person(s)  the
person ( s) , or the entity acted, executed the instrument.

     WITNESS my hand and official seal.


                     Signature:

                                                  
                     Printed Name:



STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

a, the undersigned, a
personally appeared

     personally known to me subscribed to to be the person whose name the within
instrument  executed the same in his authorized  capacity(ies),  and that by his
signature  on the  instrument  the person or the entity upon behalf of which the
person (acted, executed the instrument.

    WITNESS my hand and official seal.

                      Signature:

                       Printed Name:






<PAGE>
                                    EXHIBIT I

                                 RESTRICTED USES

Tony Haddad, Ronald Schubert and R.S. Resources Incorporated

     Per the  Amendment  to  Lease,  "Landlord  agrees,  so long as  Assignees's
primary  business is dry cleaner and tailoring,  not to lease any other premises
in the shopping  center for the primary  purpose of dry cleaning and  tailoring.
Primary use is defined as in excess of 50% of its business  from its premises in
the shopping center. This clause does not apply to leases in the shopping center
executed prior to the date of this lease. "

Longs Drug Store

     Per Addendum No. l, "no other tenant in the shopping center is permitted to
operate a pharmacy in the shopping  center  (excepting  that Landlord may have a
pharmacy  in one  supermarket  located  within the  shopping  center at any time
during the course of this lease). For those situations within the control of the
Landlord,  and subsequent to the date of execution of this lease by all parties,
Landlord  agrees,  so long as Tenant's  primary  business is the  operation of a
super  drug  store,  Landlord  covenants  that it  will  not  (except  as to the
Premises)  construct  or lease a  building  thereon or sell or lease any of such
property or permit or use of any such property for any one or more or all of the
following within the shopping center:

     (a) For the conduct of any store,  business,  trade, or profession (whether
separately  or as part of  another  entity)  which  is  engaged  in the  routine
dispensing of prescription  drugs by any appropriately  licensed  individuals or
requires  or has a license or permit to conduct a pharmacy  from the  California
State Board of Pharmacy or other  agency  which  hereafter  may be  empowered to
license or permit the conduct of a pharmacy  or which  employs or is required to
employ a registered pharmacist as such;

     (b) For the conduct of any store,  business,  trade, or profession (whether
separately or as part of another entity) which is called,  labeled, named, or is
commonly known as or referred to as a "drug store," "pharmacy," or "apothecary."

     (c) For the conduct of any store,  business, or trade which sells alcoholic
beverages (including beer and wine) for off Premises consumption.

     (d) For the purpose of any office  building  (service type office users are
permitted such as medical, dental,  chiropractor,  insurance, real estate, etc.)
entertainment or recreational facility, or a training or education^nal facility.
"

     UNDER THE ADDENDUM, "SO LONG AS TENANT IS OPERATING A DRUG STORE WITHIN THE
LEASED PREMISES,  THIS EXCLUSIVE USE PROVISION APPLIES TO LEASES IN THE SHOPPING
CENTER EXECUTED PRIOR TO AND AFTER TO THE DATE OF THIS LEASE."

     "Notwithstanding any provision of this Article or Exclusive Use provision ,
Landlord shall have the right throughout the course of this lease to lease space
to one  supermarket,  and in so doing,  the supermarket  shall have the right to
sell  liquor and shall have the right to have a  pharmacy  operation  within its
leased premises within the same shopping center. "

Clothestime

     Under Article 24,  Landlord  shall not lease for use any other space within
the shopping center for the sale of "juniors' off price ready-to-wear clothes".

<PAGE>
Blockbuster Video

     Under  Article  l.D.,  "...except  for Food 4 Less and Longs  Drugs,  their
successors  and assigns and  replacement  tenants of similar  uses  occupying at
least ninety  percent (90 % ) of the leasable space  presently  occupied by such
tenant,  and except for Newberry's and PlayCo,  their successors and assigns (to
the extent permitted under their existing leases,  including  extensions and /or
renewals thereof provided for in their existing  leases),  Tenant shall have the
exclusive right (hereinafter, "Tenant's Exclusive Right") in the Shopping Center
or any property contiguous or adjacent to the Shopping Center owned or leased by
Landlord or any  affiliate of Landlord,  directly or  indirectly  to sell,  rent
and/or distribute prerecorded video cassettes,  video games (including,  without
limitation,  CD-I),  video  tapes,  video  disks or video  software  and/or  any
substitutes  for or items which are a  technological  evolution of the foregoing
items  (hereinafter  Tenant's  Exclusive  Items").  This  covenant  and Tenant's
Exclusive  Right shall run with the land on which the Shopping Center is located
and on any  property  contiguous  or adjacent to the  Shopping  Center  owned or
leased by Landlord or any affiliate of Landlord, directly or indirectly, so long
as the Demised  Premises is for the sale,  rental,  or  distribution of Tenant's
Exclusive  Items.  Landlord agrees to enforce  Tenant's  Exclusive Right against
other tenants in the Shopping  Center using all reasonable  legal means provided
the enforcement thereof does not violate antitrust or other laws. "

Food 4 Less

     During  the term of the lease and so long as the  demised  premises,  or at
least 50 |^|o thereof,  are used as a grocery store,  "Landlord  shall not allow
any other  tenant or occupant of any property  owned,  leased,  or  subsequently
acquired by Landlord  within the Shopping  Center to operate as a grocery store,
food department,  or food store. With respect to property  subsequently acquired
by Landlord, nothing herein shall affect any rights or restrictions that existed
on the date landlord  acquired said property.  As used in this Lease,  the terms
'food store' and 'food  department'  shall mean a store or  department  within a
store which sells  groceries,  meats,  meat  products,  fish,  poultry,  fruits,
vegetable,   delicatessen   products,   alcoholic   beverage  for  off  premises
consumption, and commercial bakery products. However, the parties agree that the
above  restrictions  shall  not  apply to the  sale of  alcoholic  beverage  for
off-premises  consumption by a business primarily being used as a drug store, or
to the sale of food items  normally sold by a drug store in Southern  California
and shall not apply to stores whose  primary  business is any of the  following:
bagel shop, donut shop, yogurt and/or ice cream store,  sandwich shop, specialty
health food store, a sundries shop, gourmet wine and cheese shop, or deli and/or
baked goods department within a restaurant."



Newberry's (McCrory)

     Under  Section|^| 7.01 and 7.03,  tenant has the exclusive right to operate
"a variety,  bargain, budget or close-out store," and may terminate the lease or
pursue  other  remedies  if another  tenant is allowed  to operate  such  stores
(except a Pic 'N' Save store).


Trak Corporation dba Trak Corporation I

     The controlling  lease is actually a sublease between Thrifty Drug and Trak
Auto which was assigned back to Canyon Country Plaza. The sublease provides that
Trak shall have the  exclusive  right and  privilege,  on the Lessor's  property
(i.e.  Thrifty's property) and in the building of which the demised premises are
a part
<PAGE>
     and upon any property owned or controlled by the Lessor  adjacent to, or in
the vicinity of, the Lessor's  property  and  building,  of  conducting a retail
business  selling  primarily  automobile  parts and  accessories  to the general
public.  Lessor  covenants and agrees with respect to said  exclusive  right and
privilege  not to permit any building or other  improvement  located  within the
aforesaid  area to be used or  occupied  for the  purpose of  conducting  such a
business;  provided, however, in no event does this exclusive provision prohibit
the Thrifty's  from  handling and selling any of the items which it  customarily
handles and sells.


<PAGE>
                                    EXHIBIT J

                                  EXISTING USES



General Nutrition Corporation

     "Retail sale of vitamins,  mineral supplements,  weight gain products, diet
and weight loss products,  sports nutrition  supplements,  health foods, natural
source  cosmetics and other natural  source beauty aids,  male and female indoor
and outdoor exercise clothing, wear, and apparel,  exercise equipment,  exercise
related accessories  (including charts,  books, and cassette tapes),  diagnostic
equipment (including meters, watches, kits, and scales), and such other items as
are sold from time to time in the General Nutrition Stores, and the use of up to
three (3) coin-operated machines for health-check screening."



Aldik Silk Flowers

     "Retail  sales of artificial  flowers,  plants,  and directly  allied items
only. "



Bank of America Automated Teller

     "Up to 1 automated  teller  machines which may also include a Customer Bank
Communication  Terminal ("CBCT") System or any other appropriate technology that
may be required,  and to provide related services including,  but not limited to
night depository.  " Without Landlord's consent,  Tenant shall have the right at
any time,  from time to time,  to convert the ATM facility to a shared,  on-line
computerized  system  capable of accepting and operating with any and all bank ,
credit,  debit,  or  identification  cards or devices  designated  or allowed by
Tenant.


Bank of America (Banking Facility)

     "Lessee  shall use the demised  premises for the purpose of carrying on and
conducting  thereon  a  general  banking  business,  and  for no  other  purpose
whatsoever,  except upon the written  consent and approval  first  obtained from
Lessor. "



Craft Mall (Sandra L. and Stephen J. Silver and Betty J. Kurowski)

     "Craft Mall only."



Tony Haddad, Ronald Schubert and R.S. Resources Incorporated

     "Laundry,  dry cleaning and related  activities,  and shoe repair (Landlord
may,  upon thirty (30) days written  notice,  revoke  Tenant's  right to do shoe
repair.)"  Also,  under the Amendment to Lease,  "Assignee may also offer U.P.S.
drop off and tuxedo rental; however, upon thirty (30) days prior written notice,
Landlord may revoke Assignees's right to provide U.P.S. drop off service."


<PAGE>
Sally Beauty Company         .

     "Retail sale of beauty supplies and allied items."



Longs Drug Store

     "Tenant  shall use the  Premises  for the purpose of  conducting  therein a
general  retail store  dealing  principally  in medicines,  toiletries,  liquor,
tobacco,  cosmetics,  drug sundries, photo finishing and photo supplies,  candy,
stationary,  toys and nursery,  garden and patio supplies,  and shall not use or
permit the Premises to be used for any other  purpose  without the prior written
consent of Landlord which consent shall not be unreasonably  withheld or delayed
so  long  as  Tenant  is a  solely  owned  corporation  of  Longs  Drugs  Stores
California,  Inc. and same is further  subject to all other terms and conditions
of this Lease."

     Under Article 8, "Tenant  shall not do or permit  anything to be done in or
about the Premises  which will in any way obstruct or interfere  with the rights
of other  tenants or occupants of the Building or injure or annoy them or use or
allow  the  Premises  to  be  used  for  any  improper,   immoral,  unlawful  or
objectionable purpose. "

     Also,  "Nothing  contained  herein  shall  prevent  Tenant from  storing or
offering for sale all such items  typically found in a super drug store, so long
as  such  items  are  handled  in  accordance   with  all  applicable  laws  and
regulations. "

        
     In addition to the  foregoing,  under  Addendum No. 1 to this lease,  Longs
agrees not to violate the exclusive use benefits afforded Food 4 Less, Newberry,
Clothestime, Trak Auto and Studio 5.


Henry Mayo Family Medical Center

     "General office use for Tenant's employees only."



Clothestime

     "The premises may be used for the sale of  ready-to-wear  clothes,  related
accessories and gifts,  and other items sold in Clothestime  stores from time to
time-and for any other lawful  purpose not in  violation  of any  exclusive  use
agreements or provisions  affecting the Shopping  Center as of the  Commencement
Date. "



Blockbuster Video

     "The Demised  Premises may be used and occupied for the purpose of the sale
and rental of  prerecorded  audio  and/or  video  products  (including,  but not
limited to, tapes and CD's),  audio and/or video  software  (including,  but not
limited to, CD-I and CD-ROM), laser disks and/or home entertainment  soft\-rare;
the rental of video and/or  audio  equipment  and sale and/or  rental of related
accessories,  including,  but not limited to, the  demonstration,  display,  and
training;  the sale of  electronic  equipment;  the sale  and/or  rental  of any
substitutes  for, or items  which are a  technological  evolution  of any of the
foregoing items; the sale of BLOCKBUSTER and movie related promotional products;
the sale,  rental, and or use of related products as well as all uses incidental
thereto (including storage, service, and repair); the sale of food products that
are normally sold in a movie  theater;  and for any lawful retail uses which are
not then (i) in  violation  of  exclusive  use  restrictions  in written  leases
between Landlord and any other tenants located in the shopping  center,  (^n) in
conflict with other tenants' primary uses, or
<PAGE>
     (iii) any of the uses  prohibited  by the first  sentence  of  Article  le"
(which  prevents  the use of any  portion of the  shopping  center as a theater,
auditorium,  meeting hall, school, or other place of public assembly, gymnasium,
health club , exercise or dance  studio,  dance  hall,  bar,  off track  betting
business,  billiard or pool hall; for bingo or similar games of chance, or, as a
massage parlor, game arcade,  bowling alley, skating rink, pet store immediately
adjacent to the demised  premises,  car wash, car repair,  or car rental agency,
night club or adult book or adult video tape store  (which are defined as stores
in which any portion of the  inventory  is not  available  for sale or rental to
children  under 18 years old because  such  inventory  explicitly  deals with or
depicts human sexuality).



Food 4 Less

     "Tenant shall have the right to use the Demised  Premises for the operation
of a  supermarket  or ANY OTHER LAWFUL RETAIL  PURPOSE."  Provided it may not be
used for "a  second-hand,  army,  navy, or surplus store,  or for the conduct of
distress,  auction,  flea market,  health club,  automotive  repair shop,  price
clearance center  operation;  or for a bar,  restaurant (fast food or sit-down),
dance hall,  billiard or poll hall,  video game arcade,  bowling alley,  massage
parlor, night club or adult bookstore. "


Newberry's (McCrory)

     "The Demised Premises may be used for any lawful purpose, provided that the
Demised  Premises shall not be used (i) for any use which would violate a lawful
exclusive use granted by Landlord to another tenant in the shopping center prior
to the date such use is  commenced  upon the Demised  Premises  and provided the
tenant to whom the  exclusive  was granted is  engaged,  at the time such use is
commenced  upon the Demised  Premises,  in the use for which the  exclusive  was
granted,  such exclusive uses being set forth [as provided herein], (ii) for any
use  which  would  duplicate  the  primary  use in which  another  tenant in the
shopping  center is engaged as of the date such use is commenced upon the Leased
Premises,  such  primary uses being set forth [as  provided  herein],  (^ni) any
non-retail  purpose  or an  entertainment  use  including  but not  limited to a
theater,  night club,  health club or bowling alley, or (iv) any of the uses set
forth in  Sections  7.01(2)  to and  including  7.01  (11)."  Such uses  include
discotheque,  saloon,  tavern, bar, billiard or pool hall, adult or pornographic
materials  store,  massage parlor,  off-track  betting  facility,  skating rink,
educational,  training or vocational institute, bingo parlor or hall, or flea or
farmers' market.

     Provided,  however, that the Leased Premises ma at an or all times, be used
for the operation of a variety store,  selling items of merchandise  customarily
sold therein."

Holtzman's Little Folk Shop, Inc. dba Kids Mart

     "Tenant  shall use the  premises  for the sale of infants'  and  children's
apparel and  accessories and shall not use or permit the premises to be used for
any other purpose without the prior written consent of Landlord."



Trak Corporation dba Trak Corporation I

     "The  demised  premises  may be  used by the  Lessee  for  the  purpose  of
conducting any lawful retail business. "


La Bota (El Chapparal)

     "Mexican restaurant"
<PAGE>
Volume Shoe Corporation (Payless Shoe Source)

     "Tenant  shall use the  Demised  Premises  for the  purpose  of  conducting
therein the business of a retail family shoe store and for  incidental  purposes
related  thereto,  or for any other legally  permissible  business or commercial
venture  subject to the operation of Section 12.00 hereof"  (which Section 12.00
prohibits  subleasing to tenants whose use would violate any existing exclusives
or covenants granted other tenants within the development).



<PAGE>

                                      10.78

                 Lease Agreement for Store - South Coast Plaza.



<PAGE>
                                SOUTH COAST PLAZA

                         SOUTH COAST PLAZA RETAIL CENTER

                          SOUTH COAST PLAZA EXPANSION,
                                    Landlord
                                       and



                        TOYS INTERNATIONAL/TUTTI ANIMALI/
                                     Tenant
<PAGE>
SOUTH COAST PLAZA RETAIL CENTER

     -In  consideration  of the  rents  and  covenants  hereinafter  set  forth,
Landlord  hb by leases to Tenant,  and Tenant  hereby  hires from  Landlord  the
following described premises upon the following terms and conditions:
FUNDAMENTAL LEASE PROVISIONS


Dated (for identification purposes):July 31, 1986

Landlord: SOUTH COAST PLAZA EXPANSION, a California Limited Partnership

Tenant     TOYS INTERNATIONAL, a California corporation

Tenant's Trade Name:  TUTTI ANINALI

Use of Premises: For the retail sale of plush toys and games.  (Section 6.01)

Lease Term:               Ten (10) full lease years To Tenant:    (Section 2.01)

           (plus any partial lease year prior to the first full lease year)

Initial Monthly Minimum Rent $2,412   (S 24.00 per sq.ft.per yr.) (Section 3.01)
                             ------      ------

Rent commencement Date:  October 27, 1996                         (Section 2.02)

Percentage Rent:     in excess or a breakpoint $413,485.71 per lease year
                                                                  (Section 3.03)
Estimated Initial Common Area Charges: $ 5.80 per sq. ft. per yr*
                                                                 (Section 14.03)
                                         ----
Estimated Initial Real Property Taxes: S 2.43 per sq. ft. per year
                                                              (Secs. 5.01.14.03)

Estimated Initial Tenant Area HVAC Charges: $ 3.00 per sq. ft. per yr.
                                                                 (Section 12.04)


Estimated Initial Mall HVAC Charges: $0.75 per sq. ft. per yr*   (Section 12.05)

Promotional Fund: $ 1.25 per sq. ft. per yr*                     (Section 16.15)

Floor area of premises: 1,206 1,220 square feet                  (Section 16.04)

Security Deposit/Opening Deposit:(pound)None/None                (Section 16.05)
                                        ---------

Broker(s): None                                                  (Section 16.12)

Addresses for Notices:                                           (Section 16.11)

           To Landlord:

           South Coast Plan Expansion                  TOYS INTERNATIONAL
           Management Office                           3333 Bristol Street
           3333 Bristol at San Diego Fwy.              Costa Mesa, CA  92626
           South Coast Plaza, California 92626         Attn: Mr. Gayle Hoepner
           Ann: General Manager

           with a copy to:

           South Coast Plaza Expansion
           3315 Fairview Road
           Costa Mesa, California 92626
           Attn:Controller

     *  (to be adjusted to reflect actual final square footage)

        (based  upon  estimated   amounts  for  current  fiscal  year,   without
        representation  as to actual  amounts  determined for current and future
        fiscal years)
<PAGE>
     The  Fundamental  Lease  Provisions  are an integral part of this lease and
each reference in this lease to any of the Fundamental Lease Provisions shall be
construed to incorporate  all of the terms provided under each such  Fundamental
Lease  Provision.  In the event of any conflict  between any  Fundamental  Lease
Provision and the balance of the lease, the latter shall control.  References to
specific  sections are for  convenience  only and designate some of the sections
where references to the particular Fundamental Lease Provisions appear.
<PAGE>
                             SOUTH COAST PLAZA MALL


                                      INDEX
ARTICLE                                                                PAGE

     I  PREMISES
          1.01     Premises Defined                                     5

        II TERM
          2.01     Length of Term                                       5
          2.02     Commencement Date                                    5
          2.03     Lease Year                                           5
    III RENT
          3.01     Minimum Rent   See Addendum.                         6
          3.02     Cost of Living Increase .~See Addendum               6
          3.03     Percentage Rent      See Addendum                    6
          3.04     Rent                                                 7
    IV  RECORDS,   REPORTS AND ACCOUNTING
          4.01     Records                                              7
          4.02     Statements of gross Sales                            7
          4.03     Audit                                                8

     V  TAXES
          5.01     Real Property Taxes                                  8
          5.02     Definitions                                          8
          5.03     Other taxes                                          8
    VI  CONDUCT    OF BUSINESS BY TENANT
          6.01     Use of premises                                      9
          6.02     Restrictions on Use                                  9
          6.03     Other Locations       S~e~c Addendum                10
    VII MAINTENANCE , REPAIRS AND ALTERATIONS
          7.01     Landlord's Obligations                              10
          7.02     Tenant's Obligations                                10
          7.03     Alterations and Additions                           II
          7.04     Cleanliness: Waste and Nuisance                     II
          7.05     Health Matters                                      11
   VIII  INSURANCE: INDEMNITY
          8.01     Liability Insurance-Premises                        12
          8.02     Fire Insurance-Fixtures, Equipment See Addendum
                   and Tenant Improvements                             13
          8.03     Fire Insurance-Premises                             13
          8.04     Insurance Policies                                  13
          8.05     Waiver of Subrogation                               13
          8.06     Indemnity                                           14
          8.07     Exemption of Landlord                               14
          8.08     Landlord's Security                                 14
    IX  REPAIRS AND RESTORATION
          9.01     Insured or Minor Damage                             14
          9.02     Major damage                                        14
          9.03     Major Damage to Center                              14
          9.04     Damage Near End of term                             15
          9.05     Abatement of Rent; Remedies for Non-Performance     15
          9.06     Definitions                                         15

     X  ASSIGNMENT AND SUBLETTING
         10.01     Landlord's Rights              See Addendum         I5
         10.02     No Release of Tenant                                17

                                                   2

<PAGE>
                                  ARTICLE PAGE

    XI  EMINENT    DOMAIN
         11.01     Entire or Substantial Taking                        17
          11.02    Partial Taking                                      17
          11.03    Taking of Center                                    17
          11.04    Awards                                              17
          11.05    Sale Under Threat of condemnation                   18
    XII UTILITY SERVICES
          12.01    Utility Charges                                     18
          12.02    Furnishing of Services                              18
          12.03    Interruption or service                             18
         12.04     Premises Air Conditioning                           18
          12.05    Enclosed Mall Air Conditioning                      Is
   XIII DEFAULTS AND REMEDIES
          13.01    Defaults                                            19
          13.02    Remedies                                            19
          13.03    Default by Landlord                                 20
          13.04    Expense of Litigation                               20
          13.05    Holding Over                                        20
          13.06    Landlord's Rights                                   21
         13.07     Trial Without Jury                                  21
   XIV  COMMON     AREAS
          14.01    Definition                                          21
         14.02     Use                                                 21
          14.03    Control by Landlord                                 21
          14.04    Common Area Costs                                   22
          14.05    Proportionate Payment                               23
    Xv  SIGNS, LIGHTING AND ADVERTISING
         15.01     Prohibited Activities                               23
         15.02     Maintenance                                         23
         15.03     Display Window Lighting                             24
         15.04     Advertised Name and Address                         24
                                                See Addendum
         15.05
                   Advertising Expenditures                            24
         15.06     Use of Private Credit Card     See Addendum         24
         15.07     Catalog Advertising   See Addendum                  24
         15.08     Signs On Exterior Fascia                            24

    XVI MISCELLANEOUS
                                                                              25
         16.01     Offset Statement
                                                                              25
         16.02     Landlord's Right of access
                                                                              25
         16.03     Transfer of Landlord's Interest
                                                                              25
         16.04     Floor area
                                                                              26
         16.05     Deposits and Financial statements .See Addendum~
                                                                       26
         16.06     Late Payments and Deliveries     See Addendum
                                                                       27
         16.07     Separability
                                                                              27
         16.08     Time of essence
                                                                              27
         16.09     Headings
                                                                              27
         16.10     Incorporation of Prior Agreements, Amendments
                                                                       27
         16.11     Notices
                                                                              28
         16.12     Brokers
         16.13     Waivers                                             28
         16.14     Recording                                           28
         16.15     Promotional Fund                                    28
         16.16     Liens                                               29
         16.17     Subordination                                       29
                                                                              29
         16.18     Tenant's Authority
                                                                              30
         16.19     Safety and Health
                                                                              30
         16.20     Indemnities
                                                                              30
         16.21     Nondisclosure of Lease Terms


                                                   3

<PAGE>
ARTICLE                                                          PAGE


16.22 Gender Tenants                                             30
16.23 Force Majeure                                              30
16.24 Yield Up Premises                                          31
16.25 Relocation of tenant                                       31
16.26 No Option                                                  31
16.27 Landlord Liability                                         31
16.28 Termination                                                31
16.29 Tax Benefits See Addendum                                  32

                          XVII CONSTRUCTION OF PREMISES
17.01 Condition of Premises                                      32
17.02 Design Review                                              32
17.03 Plans for Tenant's Work.. See Addendum                     33
17.04 Tenant's Work See Addendum                                 33
ADDENDUM
EXHIBIT "A" -Site Plan of shopping  Center with  Premises  Depicted  EXHIBIT "B"
-Lease Plan of Premises  EXHIBIT "B-2" -Map Showing  Prohibited Area EXHIBIT "C"
-General Description of Landlord's Work and of Tenant's Work EXHIBIT "D" -Tenant
Ventilation and Cold Air Annual Charge Schedule
EXHIBIT "E" -Detailed Design Criteria and Standards for Landlord's Work and 
             for Tenant's Work
EXHIBIT "F" -Accelerated Building Plan Review Agreement
EXHIBIT  "G" -Rules and  Regulations  for South  Coast  Plaza  EXHIBIT "H" -Sign
Criteria EXHIBIT "I" Form of Guaranty of Tenant's Obligations ?Pursuant to Lease


<PAGE>
                                    ARTICLE I
                                    PREMISES

PREMISES Section 1.01
DEFINED

     Landlord  hereby  leases to Tenant and Tenant  hereby  hires from  Landlord
those certain  premises (the  "Premises")  located in the South Coast Plaza Mall
Expansion in the City of Costa Mesa, County of Orange,  State or California (the
"Center").  which Center  Premises  and the enclosed  mall on which the Premises
open (the "Enclosed  Mall") are more  particularly  depicted on Exhibits "A" and
"B" attached hereto. for the term, at the rental, and upon all of the conditions
and agreements set forth herein; reserving to Landlord,  however. the use or the
exterior  walls and roof and the right to  install.  maintain,  use,  repair and
replace pipes, ducts,  conduits.  and wires serving other portions of the Center
through the  Premises in  locations  which will not  materially  interfere  with
Tenant's  use  thereof.  Landlord  further  reserves  the  right,  prior  to the
commencement of tenant's Work in the Premises. to make changes in the lent Lines
shown in Exhibit "B" or to relocate the Premises in either  direction  along the
Enclosed  M~Jl,  on either side  thereof but on the same level.  so long as such
changes or relocation do not materially change the size of the Premises

                                   ARTICLE II
                                      TERM
LENGTH OF Section 2.01
TERM

     The  term  of this  lease  shall  be the  number  of NI!  lease  years  (as
hereinafter  defined)  specified in the applicable  Fundamental  Lease Provision
from  the  Commencement.  Date.  plus  any  partial  lease  year  following  the
Commencement Date If such date is other than the first day or February.

COMMENCEMENT DATE

     (a) The  "Commencement  Date"  or this  lease  shall  be the  date on which
Landlord  delivers  possession ENT DATE of the Premises to Tenant From and after
the Commencement  Date,  Tenant shall observe and perform all obligations of the
tenant pursuant to this lease. other than those requiring the payment of Minimum
Rent,  Percentage Rent and additional rent The "Rent  Commencement Date" of this
lease  shall  be the  first to  occur~or  the date  specified  in or  determined
pursuant to the  applicable  Fundamental  Lease  Provision  or the date on which
Tenant  opens the Premises for  business.  From and after the Rent  Commencement
Date, Tenant shall observe and perform all obligations of the tenant pursuant to
this lease.  including  those  requiring the payment of Minimum Rent  Percentage
Rent and additional rent, No delay in Landlord's  delivery of the Premises shall
entitle  Tenant to  terminate  this  lease or to any  damages on account of such
delay.

     (b)Within thirty (30) days following the Rent Commencement  Date.  Landlord
and Tenant shall execute and acknowledge a supplemental  agreement  setting fond
the Rent  Commencement  Date of this lease and the Floor Area of the Premises as
determined pursuant to Section 16.04. $notwithstanding the foregoing. failure or
Tenant to  execute  such  supplemental  agreement  shall not  affect  Landlord's
determination  of the Rent  Commencement  Date and floor Area of the Premises in
accordance with the provisions of this lease.

     (c)If  tenant  shall fail to complete  its work in the Premises and to open
the same for business  within sixty (60) days after the  occurrence  of the Rent
Commencement Date,  Landlord shall have the option to terminate this lease. Such
option may be exercised by written  notice from  Landlord to Tenant given at any
time  after  the  expiration  or such  sixty  (60) day  period  and prior to the
completion  of tenant's  work in the  Premises  and opening or the  Premises for
business.  If  Landlord  shall be entitled to give the notice and shall give the
notice provided for in this subsection.  this lease shall terminate on the tenth
(10th) day after the date of such notice unless  Tenant shall  complete its work
in the Premises and open the same for business  within such ten (10) day period.

<PAGE>
If this lease shall be  terminated  pursuant to this  subsection.  Tenant shall.
within fifteen (IS) days after the date of termination. remove from the Premises
all merchandise,  furniture.  furnishings.  equipment and movable trade fixtures
and shall  surrender  the  Premises  to Landlord  in the  condition  required by
Sections  7.02(c).  7.03 and 7.04.  Tenant shall,  at Tenant's cost.  repair any
damage  to the  Premises  caused by such  removal.  Any  items  which  Tenant is
permitted to remove but fails to remove  prior to the  surrender of the Premises
to Landlord  shall be deemed  abandoned  by Tenant.  and  Landlord may retain or
dispose of the same as Landlord sees fit without  claim by Tenant  thereto or to
any proceeds thereof. In the event ora termination  pursuant to this subsection,
Tenant shall pay all amounts payable by it through the date of termination, each
of the parties shall bear their own costs and fees incurred (including all costs
incurred in performing their respective  obligations hereunder) through the date
of termination  and from and after the date of  termination  neither party shall
have any further  obligations  to the other.  except for those  obligations  set
forth in this subsection and in Sections 16.05 and 16.16. In addition,  upon any
termination of this lease pursuant to this subsection. the provisions of Section
16.28(b) shall apply.

LEASE YEAR

Section 2.03

     A Lease year is a period of twelve (12) full calendar months  commencing on
the first day of February  and ending on the last day of January  except that if
the  Commencement  Date occurs on a date other than  February I there shall be a
partial  lease  year  for the  period  from  the  Commencement  Date to the next
following  January 31. both dates  inclusive,  and the last lease year,  if this
lease is  terminated  on a date other than January 31. shall be a partial  lease
year for the period  beginning on February I following the last preceding  lease
year and ending on the termination date.

                                         RENT

MINIMUM   Section 3.01    See Addendum
RENT

     Tenant shall pay to Landlord for each full calendar  month during the lease
term the monthly  Minimum Rent  specified in the  applicable  Fundamental  Lease
Provision.  Minimum  Rent shall be payable in advance upon the first day of each
calendar  month  without  any  deduction  or offset.  The  Minimum  Rent for any
fractional  pan of a calendar  month at the  beginning  or end or the lease term
shall be a proportionate pan of the Minimum Rent for a full calendar month. Such
proration and all other  prorations  pursuant to this lease shall be made on the
basis of a 30-day month and a 360-day year.  COST of Section See Addendum LIVING
IN The monthly Minimum Rent shall be adjusted as of the expiration of each lease
year or partial  lease  CREASE year to reflect any change in the cost of living.
The adjustment, if any. shall be calculated upon the basis of the United

COST OF LIVING INCREASE

     States Department of Labor, Bureau of Labor Statistics Consumer Price Index
of Urban Wage Earners and  Clerical  Workers  (Revised  Series),  Subgroup  "all
items,"  entitled  "Consumer  Price  Index of Urban Wage  Earners  and  Clerical
Workers (Revised Series), Los Angeles-Long  Beach-Anaheim Average,  (1967=100)."
The  Index  for  said  subgroup  published  for  the  month  prior  to the  Rent
Commencement  Date shall be considered the "base." The monthly  Minimum Rent for
each lease  year or partial  lease  year  shall be  adjusted  by the  percentage
increase  or  decrease,  if any,  in the Index  published  for  December  of the
preceding lease year or partial lease year over the "base";  provided.  however,
that in no  event  shall  the  monthly  Minimum  Rent be less  than  the  amount
specified in the applicable  Fundamental  Lease Provision,  notwithstanding  the
fact that the Index may, as of some  adjustment  date,  be less than the "base."
When  the  monthly  Minimum  Rent  for a lease  year or  partial  lease  year is
determined,  Landlord shall give Tenant written notice to that effect indicating
how  the  new  monthly  Minimum  Rent  figure  was  computed.  If at any  rental
adjustment  date there  shall not exist the  Consumer  Price Index of Urban Wage

<PAGE>
Earners and Clerical  Workers  (Revised Series) in the same format as recited in
this Section 3.02, Landlord shall substitute any official index published by the
Bureau of Labor Statistics,  or successor or similar governmental agency, as may
then be in  existence  and  shall  be most  nearly  equivalent  thereto.  If any
adjustment  provided for herein shall not have been made at the  commencement of
the lease  year for which  applicable,  Tenant  shall  continue  to pay  monthly
Minimum  Rent at the last  rate  applicable  until  Tenant  receives  Landlord's
written  notice  as to such  adjustment.  Within  ten (10) days  after  Tenant's
receipt of  Landlord's  notice,  Tenant shall pay to Landlord an amount equal to
the new monthly Minimum Rent times the number or months from the commencement of
the then current  lease year to the date of receipt of Landlord's  notice,  less
the aggregate  amount paid by Tenant on account of monthly  Minimum Rent for the
same period.  Thereafter,  Tenant shall pay monthly Minimum Rent at the new rate
set forth in Landlord's notice.

PERCENT- Section 3.03 See Addendum
AGE RENT

     (a) In addition to the Minimum Rent,  Tenant shall pay to Landlord for each
lease year or partial lease year during the lease term, as Percentage  Rent, the
percentage  specified in the applicable  Fundamental Lease Provision of Tenant's
gross sales (as  hereinafter  defined) for such lease year or partial lease year
in  excess of the  breakpoint  specified  in the  applicable  Fundamental  Lease
Provision.

     (b)On or before the  fifteenth  (15th) day following  each  calendar  month
during  the  lease  term,  Tenant  shall pay to  Landlord,  on  account  of such
Percentage Rent, the stated  percentage of the amount, if any, of Tenant's gross
sales for such preceding calendar month in excess of one-twelfth (l/l2th) of the
breakpoint set forth in the applicable  Fundamental  Lease  Provision.  Promptly
upon Tenant's  submission  pursuant to Section  4.02(b) of its annual  certified
report of gross sales, the panics shall make any adjustment necessary}' to place
the Percentage  Rent~n a lease year basis. Any additional amount due from Tenant
shall be paid by  Tenant to  Landlord  within  ten (10)  days  after the date of
Tenant's receipt of Landlord's invoice therefor.  Any refund due to Tenant shall
be credited  against the next Percentage Rent payable by Tenant pursuant to this
lease.

     (c)(i)  The term  "gross  sales" as used  herein  means the  entire  amount
charged,  whether  wholly or partly for cash,  on credit or  otherwise,  for all
merchandise  sold,  and all  charges  made  for  services  performed  or for the
extension of credit in, at or from the Premises,  or through the substantial use
of the  Premises,  by  Tenant or anyone  acting  on  Tenant's  behalf or under a
sublease,  license or concession from Tenant,  including,  without  limiting the
generality of the foregoing,  the amount allowed upon any "trade-in," the retail
price of any merchandise delivered on redemption of trading stamps, all deposits
not refunded to purchasers, all catalog sales at or from the Premises, the gross
proceeds from the sale of stamps or theater or sporting event  tickets,  and all
orders taken in or from the Premises or which Tenant would in the normal  course
of its  operations  credit or attribute to its  business in the  Premises,  even
though such orders may be filled  elsewhere,  without  deduction in any case for
uncollected or uncollectible  credit  accounts.  There shall also be included in
"gross sales" the gross receipts from all  mechanical and other vending  devices
placed in the Premises by Tenant or under authority from Tenant, other than such
devices  which are  installed in portions of the Premises not open to the public
for the convenience of Tenant's  employees,  mail or phone order sales solicited
from or returned to the Premises  and mail order or  telephone  order sales from
the  Premises  in  response  to  advertisements  using the  Premises  address or
telephone number and all sales made by televideo or other electric or

                                       TENANT'S
                                       INITIALS
                                      LANDLORD'S
                                       INITIALS

                                          6

<PAGE>
     electronic  media of any type wh such media  direct the sale or order to th
remises.  Gross  receipts from sales made and orders taken in the Premises shall
be  included  in" gross  sales"  even  though  the  account  may be  transferred
elsewhere  for  collection  and though the delivery of  merchandise  sold or the
performance  of services  ordered may be made  elsewhere  than at the  Premises.
Every transaction on a deferred payment basis shall be treated as a sale for the
full price at the time such  transaction  is entered into,  irrespective  of the
time for payment or the time when title passes.

     (ii) The term  "gross  sales" as used  herein  shall not  include  (or,  if
included, there shall be deducted to the extent of such inclusion) the amount or
any cash or credit refund in fact made upon sales from the  Premises,  where the
merchandise  sold or some pan thereof is returned by the  purchaser and accepted
by Tenant, nor exchanges and transfers of merchandise  between stores of tenant,
where made solely for the  convenient  operation  of Tenant's  business  and not
having the effect of  consummating  a sale made or which would have been made at
the Premises, nor returns to shippers or manufacturers, nor sales of fixtures or
equipment after their substantial use in the conduct of Tenant's business in the
Premises,  nor the amount of any sales, luxury or excise taxes on sales from the
Premises,  where  such taxes are both added to the  selling  price (or  absorbed
therein) and paid to the taxing  authorities by Tenant (but not by any vendor of
Tenant).

     (iii) If Tenant's  gross sales are  required to be reported on any federal,
state or municipal  sales tax return or any other  similar  form of return,  and
gross sales as so reported on any of said  returns  shall exceed the gross sales
as reported by Tenant,  as herein provided,  then the gross sales shall be taken
at the highest figure 50 reported. If any governmental  authority shall increase
the gross sales reported by Tenant on any such tax return,  after audit. for any
lease year or partial lease year for which such sales have been  reported,  then
Tenant shall notify  Landlord  promptly of such increase and pay any  additional
Percentage Rent due at that time. For purposes of this subparagraph  gross sales
shall  mean,  if Tenant  reports  sales from more than one  location on any such
return, only that portion of the gross sales reported as relate to the Premises.
Moreover,  for all purposes pursuant to this subparagraph,  gross sales shall be
adjusted to the lease definition of gross sales.

RENT         Section 3.04

     As used in this lease, the term "rent" shall mean Minimum Rent,  Percentage
Rent and additional rent, and the term "additional  rent" shall mean all amounts
payable by Tenant  pursuant to this lease other than Minimum Rent and Percentage
Rent. All Minimum Rent,  Percentage  Rent and  additional  rent shall be paid in
lawful  money of the United  States  which shall be legal  tender at the time of
payment. Where no other time is stated herein for payment, payment of any amount
due from Tenant to Landlord  hereunder  shall be made within ten (10) days after
oTenant's receipt of Landlord '5 invoice or statement therefor.


                                   ARTICLE IV
                     RECORDS, REPORTS AND ACCOUNTING

RECORDS         Section 4.01

     Tenant shall keep and shall require its subtenants and concessionaires,  if
any, to keep at the  Premises or at such other place as Landlord  may approve in
writing  complete and accurate  books of account and records of, but not limited
to, all purchases  and receipts of  merchandise,  inventories  and all sales and
other transactions from which Tenant's gross sales and advertising  expenditures
at, upon or from the Premises  can be  determined.  Tenant  agrees to record all
sales,  at the time each sale is made,  whether  for cash or  credit,  in a cash
register or registers  containing  locked-in  cumulative  tapes with  cumulation
capacity  satisfactory  to Landlord.  Tenant shall keep all  pertinent  original
sales books and records,  which records  shall include (a) daily dated  register
tapes;  (b) serially  numbered  sales slips;  (c) mail and catalog  orders;  (d)
telephone orders:  (e) settlement report sheets of transactions with sublessees,
concessionaires and licensees;  (f) records showing that merchandise returned by
customers was purchased by such customers at or from the Premises:  (g) receipts
or other records of merchandise leased,  licensed or taken out on approval;  (h)
duplicate  bank deposit  slips and bank  statements;  (i) such other  records as
would normally be required to be kept and examined by an independent  accountant
in  accordance  with  accepted  auditing  practices  in  performing  an audit of
Tenant's gross sales; and (j) all income, sales and occupation tax returns.

                                           7

<PAGE>
STATEMENTS OF GROSS SALES         Section 4.02

     (a)Tenant  shall  submit to  Landlord,  on or  before  the 15th day of each
month, a written  statement  showing in reasonable detail the gross sales in, at
or from the Premises for the preceding calendar month.

     (b)Tenant shall submit to Landlord,  on or before the 20th day of the month
following the end of each lease year or partial lease year, a written  statement
certified by the chief financial  officer of Tenant showing in reasonable detail
the gross sales in, at or from the  Premises  for such  preceding  lease year or
partial lease yean

     (c)All statements  pursuant to this Section shall be in such form and shall
contain such information as Landlord reasonably  determines.  Each certification
shall  be   satisfactory   to  Landlord  in  scope  and  substance  and  without
qualification except as expressly permitted by Landlord.




                                       TENANT'S
                                       INITIALS
                                      LANDLORD'S
                                       INITIALS

AUDIT       Section 4.03

     (a)The  accept e by Landlord of payments of Percent-  Rent shall be without
prejudice to Landlord's right to an examination of Tenant's books and records of
its gross  sales and  inventories  of  merchandise  in the  Premises in order to
verify the amount of Tenant's gross sales.

     (b)At any  reasonable  time, and upon five (5) days prior written notice to
Tenant,  Landlord  may cause a  special  audit to be made of  Tenant's  business
affairs and  records  relating to the  Premises  for the period  covered by such
statement. Except as provided in (c) below, the cost of such audit shall be paid
by Landlord.  Any such special audit performed by a certified public  accountant
selected by Landlord shall be binding upon the panics.

     (c) If it shall be determined as a result of such audit that there has been
a deficiency  in the payment of  Percentage  Rent,  then such  deficiency  shall
become  immediately  due  and  payable  with  interest  at the  rate  per  annum
determined pursuant to Section 16.06 from the date when said payment should have
been made. If the aforementioned  deficiency is in excess of two percent (2%) of
the rentals  theretofore  computed and paid by Tenant for the period  covered by
the audit, Tenant shall also pay to Landlord the cost of the audit. If Tenant is
permitted  by  Landlord to maintain  its books and records  with  respect to the
Premises  outside of Orange  County,  California,  then the phrase  "cost of the
audit"  shall  include  the  reasonable  travel,  meal and  lodging  expenses of
Landlord auditor(s).


                                    ARTICLE V
                                      TAXES
REAL PROPERTY  TAXES       Section 5.01

     Tenant  shall pay, at the time and in the manner  specified in Article XIV,
Tenant's proportionate share 0 all real property taxes applicable to the Center,
including the common areas  thereof.  Tenant's  proportionate  share 0 such real
property taxes shall be determined pursuant to Section 14.05.
<PAGE>
Section 5.02 DEFINITIONS

     (a)  The  term  "real  property  taxes"  shall  include:

     (i) All taxes,  assessments and governmental  charges and surcharges levied
upon or with respect to the real  property and  improvements  within the Center,
including those portions thereof defined in Sect~on 14.01 a "common areas";

     (ii)All other taxes,  assessments  and  governmental  charges or surcharges
levied upon or with respect to the  fixtures,  equipment  and other  property of
Landlord in or about the Center, whether real or personal;

     (iii) Fees and assessments for any  governmental  service(s) to the Center,
including  service payments in lieu of taxes;

     (iv) Any and all taxes  payable by  Landlord:  (A) upon,  allocable  to, or
measured by or on the gross or net rent  payable  hereunder,  including  without
limitation  any gross  income tax,  sales tax or excise tax levied b' the State,
any' political  subdivision  thereof,  or the federal government with respect to
the receipt of such rent;  (B upon or with respect to the  possession,  leasing,
operation, management, maintenance, alteration, repair, use 0: occupancy' of the
Premises or any portion thereof, including any sales, use or service tax imposed
as a result  thereof (C) upon or measured by' Tenant's gross receipts or payroll
or the value of  Tenant's  equipment,  furniture,  fixtures  and other  personal
property' of Tenant or leasehold improvements.  alterations or additions located
in the Premises: o (D) upon this transaction or any' document to which Tenant is
a party creating or transferring an interest or an estate in the Premises; and

     (v)All expenses reasonably incurred by Landlord in seeking reduction by the
taxing authorities of the taxes described in clauses (i) through (iv) above.

     Provided,  however,  that the term "real property  taxes" shall not include
any  franchise,  estate,  inheritance,  succession  capital levy,  net income or
excess  profits taxes  imposed upon Landlord  except that in the event that real
property  taxes are withdrawn in whole or in part and any substitute tax is made
therefor,  such  tax  shall  in any  event  for the  purpose  of this  lease  be
considered a tax included in "real property taxes" pursuant to this Section 5.02
regardless of how denominated or the source from which it is collected.

     (b) For the purposes of this Section,  real property taxes which are levied
on a fiscal year basis  shall bi deemed to apply  one-twelfth  to each  calendar
month in such fiscal year.

OTHER     Section 5.03
TAXES

     Tenant  shall be  responsible  for and shall  pay  before  delinquency  all
municipal,  county, state an(pound) federal taxes, levies,  assessments and fees
of every  kind and  nature,  including  but not  limited  to  general or special
assessments,  assessed  during  the term of this  lease  against  any  leasehold
interest,  leasehold  improvements  or  personal  property  of any kind owned by
placed in, upon or about the  Premises by tenant.  When  possible.  Tenant shall
cause  such  personal  property  and  other  items  to be  assessed  and  billed
separately  from the  Premises  and the Center.  If any such  taxes.  levies and
assessments  are levied against  Landlord or the Center or if the assessed value
of the Center is increased by the  inclusion  therein of a value placed upon any
items  described  in this  Section  and if Landlord  pays the taxes,  levies and
assessments based upon such increased assessment,  which Landlord shall have the
right to do regardless of the validity thereof, but only under proper protest if
requested by Tenant,  Tenant shall upon demand repay to Landlord.  as additional
rent,  the taxes,  levies and  assessments so levied  against  Landlord,  or the
proportion of such taxes, levies and assessments resulting from such increase in
the  assessment,  together  with  interest  thereon  from the date of payment by
Landlord to the date of reimbursement by Tenant at the rate determined  pursuant
to Section 16.06.  Provided,  however,  that in any such event Tenant shall have
the right,  in the name of Landlord and with  Landlord's  full  cooperation  but
without  any  cost  to  Landlord,  to  bring  suit  in any  court  of  competent
jurisdiction to recover the amount of any such taxes,  levies and assessments so
paid under protest, any amount so recovered to belong to Tenant.
<PAGE>
                                   ARTICLE VI
                          CONDUCT OF BUSINESS BY TENANT

USE OF    Section 6.01
PREMISES

     (a)  Tenant  shall use the  Premises  solely for the use  specified  in the
applicable  Fundamental  Lease  Provision.  Tenant shall use the Premises solely
under the trade name specified in the applicable Fundamental Lease Provision and
under no other  trade  name  whatsoever  without  the prior  written  consent of
Landlord.  Tenant shall devote the entire Premises to such use, except for areas
reasonably  required  for office or storage  space uses  limited to the business
conducted   by  Tenant  in  the   Premises.   Tenant  shall   continuously   and
uninterruptedly  during the term  hereof  conduct its  business  activity in the
Premises  during all business hours usual for Tenant's type of business,  but in
any event during those minimum hours from time to time  established  by Landlord
for the Center,  which may at the option of  Landlord  include  Sundays,  unless
Tenant is prevented from doing so by strike, fire or other cause beyond Tenant's
reasonable  control.  Failure of any other tenant of the Center, with or without
the consent of Landlord,  to observe the minimum hours of operation  established
by Landlord for the Center shall not relieve Tenant of its obligation to observe
such minimum  hours or prevent  Landlord from  requiring  Tenant to observe such
minimum  hours.  Tenant  shall at all times carry a full and  complete  stock of
merchandise  offered  for sale and  shall  maintain  an  adequate  staff for the
service of its  customers.  Tenant shall employ its best  judgment,  efforts and
abilities to operate the business conducted by it in the Premises in such manner
as to produce the maximum  profitable volume of sales reasonably  obtainable and
to enhance the  reputation  and  attractiveness  of the Center  Nothing  herein,
however,  shall be deemed to give Landlord any right of consent or approval with
respect to prices charged by Tenant

     (b) For the purpose of computing  Percentage Rent, Tenant's gross sales for
any period  during which Tenant (i) does not  continuously  and  uninterruptedly
conduct its  business as required by this Section 6.01 or (ii) does not maintain
a  complete  stock of  merchandise  or an  adequate  staff of sales  persons  in
accordance  with  subsection  (a) above  shall be deemed  to be the  greater  of
tenant's gross sales for (A) such period, or (B) the corresponding period of the
preceding  calendar year.  For the purpose of determining  whether the condition
set forth in clause (ii) above exists,  any trend in Tenant's  gross sales which
is contrary to the trend in gross sales in Tenant's  reporting category shall be
conclusive evidence that such condition exists.


RESTRICTIONS
ON USE       Section 6.02

     Tenant shall comply  promptly  with all  applicable  statutes,  ordinances,
rules, regulations,  orders and requirements regulating the use by Tenant of the
Premises  and  all  requirements  of  all  insurance  carriers  or  underwriters
providing coverage on the Center,  the Premises or the contents thereof.  Tenant
shall not use or permit the use of the  Premises in any manner that will tend to
create a  nuisance,  create  an  ultra-hazardous  use or tend to  disturb  other
tenants  or  occupants  of the Center or tend to injure  the  reputation  of the
Center or which will invalidate any insurance  maintained on the Premises or the
Center.  No auction,  fire sale,  bankruptcy  sale,  sidewalk sale, end of lease
sale,  or going out of business  sale may be conducted in the Premises nor shall
Tenant use any form of advertising for any such sale,  without the prior written
consent of Landlord,  which may be withheld in Landlord's sole  discretion.  Any
such sale shall comply with any reasonable  conditions  established by Landlord,
which conditions shall not include pricing. Tenant shall use its best efforts to
complete or cause to be completed all deliveries,  loading,  unloading,  rubbish
removal,  and other services to the Premises prior to 10:00 A.M. of each day and
shall not permit loading,  unloading or parking of delivery vehicles in areas of
the Center other than those  designated by Landlord for such  purpose.  Landlord
reserves  the right to further  regulate the  activities  of Tenant in regard to
deliveries  and  servicing of the  Premises,  and Tenant agrees to abide by such
further nondiscriminatory regulations of Landlord.

<PAGE>
     Tenant shall comply at all times with the Rules and Regulations attached to
this lease as Exhibit  "G" and such  amendments  and  modifications  thereof and
additions  thereto as Landlord  may from time to time  reasonably  adopt for the
safety,  care and  cleanliness of the Center or the  preservation  of good order
therein. Landlord shall not be liable to Tenant for the failure of any tenant or
other person to comply with such Rules and Regulations.
                                          9
TENANT'S INITIALS                       LANDLORD'S INITIALS


OTHER
LOCATIONS      Section 6.03  See Addendum

     Neither Tenant nor any parent,  affiliate or subsidiary of Tenant, directly
or indirectly, shall operate, manage or have any interest in any other competing
store,  including a concession in another store, within any prohibited area. The
prohibited  areas shall be:

     (a)That  area  located  within an eight (8) mile  radius  outward  from the
outside  boundary of the  Center;  and

     (b)That area located  within a corridor  extending ten (10) miles along the
San Diego Freeway in either  direction from the center point of the intersection
of Bristol  Street and the San Diego Freeway and extending  three (3) miles from
the center line or the San Diego Freeway on either side.

     Provided however, that the foregoing restriction shall not be applicable to
and the prohibited areas shall not include the area west of Beach Boulevard (and
any  extensions  thereof)  or north of  Westminster  Avenue  (or any  extensions
thereof). Attached hereto as Exhibits "A" and "B-2" are illustrations depicting,
respectively, the outside boundaries of the Center and the prohibited areas.


     Without limiting Landlord's remedies, if Tenant should violate the covenant
contained in this Section,  Landlord may, at its option, include the gross sales
of such  competing  store in the gross sales  transacted in the Premises for the
purpose of computing  Percentage  Rent due  hereunder,  as though said sales had
actually been made from the Premises.  If Landlord so elects, all the provisions
of Article IV hereof  shall be  applicable  to all  records  pertaining  to such
competing  store or  business.  However,  any such  competing  store or business
existing  as of the date of this lease may  continue  to be  operated,  managed,
conducted and owned in the same manner as on the date of this lease.

     For the purpose of this Section.

     (i) A "parent" of Tenant  shall be any person or entity who or which holds,
directly or indirectly, a majority of the outstanding voting rights in or profit
and loss interests in Tenant; a "subsidiary" of Tenant shall be any entity as to
which Tenant holds, directly or indirectly, a majority of the outstanding voting
rights in or profit and loss interests of such entity:  and an "affiliate" shall
be any  officer,  director  or  general  partner of tenant,  any  franchisee  or
licensee of tenant, any parent or subsidiary of tenant or any other affiliate of
tenant,  any  subsidiary  of any  parent of Tenant  and,  if Tenant is a natural
person, any spouse, sibling or first generation lineal descendant or Tenant.

<PAGE>
     (ii) All  distances  shall be  measured  on a straight  line  rather than a
driving  distance  basis.  In the event that any  portion of a retail  center is
located within a prohibited area described herein the entire retail center shall
be deemed to be located within such prohibited area.

     (iii)  A  "competing  store"  shall  be  any  store  operation,  retail  or
wholesale,  conducted  under the same trade name then in use at the  Premises or
conducted  under a different  trade name but  offering for sale  merchandise  or
services which are  substantially  similar to or the same as the  merchandise or
services offered for sale at the Premises.

     (iv)  Nothing  contained  in this  Section  6.03 or elsewhere in this lease
shall be deemed or construed to prevent or restrict Landlord in leasing space in
the Center to other tenants,  including one or more tenants who may, in whole or
in part, compete with Tenant at the Center.


                                   ARTICLE VII
                      MAINTENANCE, REPAIRS AND ALTERATIONS


LANDLORD'S
OBLIGATIONS Section 7.01

     Subject to the  provisions  of  Articles IX and XI hereof,  Landlord  shall
during the term of this lease keep in  first-class  order,  condition and repair
the foundations,  the interior and exterior  surfaces of exterior windows of the
Center (excluding the interior surfaces of exterior walls of premises, including
the Premises.  leased to tenants), all windows, doors, plate glass and showcases
of the Center (excluding windows, doors, plate glass and showcases located in or
comprising  a pan of  premises,  including  the  Premises,  leased to  tenants),
downspouts,  gutters and roofs of the buildings  constituting the Center, except
for any damage  thereto caused by any negligent act or omission of Tenant or its
agents,  employees  or  invitees,  and  except  for  reasonable  wear and  tear;
provided,  however,  that  Landlord  shall have no  obligation 10 repair until a
reasonable  time after the receipt by Landlord of written notice of the need for
repairs, which notice Tenant shall give Landlord promptly when Tenant determines
any  such  repairs  are  required.  Tenant  waives  the  provisions  of any  law
permitting Tenant to make repairs at Landlord's expense.

                                           S

     Landlord's  costs and expenses for the  foregoing  maintenance  and repair,
excluding  partial  or  complete  restoration   necessitated  by  casualty,  but
including  Landlord's  cost of the insurance  provided  pursuant to Section 8.03
hereof,  shall be  included  in common  area  expenses  reimbursed  by Tenant to
Landlord pursuant to Article XIV of this lease.


TENANT'S
OBLIGATIONS Section 7.02

     (a)  Subject to the  provisions  of  Articles  IX and XI hereof and Section
7.01,  Tenant  shall  during the term of this lease keep in  first-class  order,
condition  and repair the Premises and every part  thereof;  including,  without
limiting  the  generality  of  the  foregoing,   all  plumbing,   heating,   air
conditioning, ventilating, electrical and lighting

TENANT"S LANDLORD'S INITIALS
INITIALS 
<PAGE>
     facilities and equipment within the Premises,  fixtures, interior walls and
interior surfaces of exterior walls, ceilings,  floors and floor coverings,  win
vs, doors,  plate glass,  showcases,  skylight  trances and  vestibules  located
within the Premises. Tenant shall paint the interior walls and interior surfaces
of  exterior  walls as often as may be required  to keep the  Premises  neat and
attractive.

     (b)If tenant  fails to perform its  obligations  under this  Section  7.02,
Landlord may at its option, after five (5) days' written notice to Tenant, enter
upon the Premises and put the same in good order,  condition  and repair and the
cost  thereof  shall  become  due and  payable as  additional  rent by Tenant to
Landlord upon demand.

     (c)On the last day of the term hereof, or on any sooner termination, Tenant
shall surrender the Premises to Landlord in good condition,  damage by fire, the
elements  or any other cause  beyond the  control of Tenant.  and for which this
least is terminated pursuant to Article IX, excepted.

ALTERA-             Section 7.03
TIONS AND ADDITIONS

     (a) Tenant shall not,  without the prior written consent of Landlord,  make
any alterations, improvements. remodeling or additions to either the interior or
exterior of the Premises or to fixtures  installed  therein in  accordance  with
approved fixture plans, or mark,  paint,  drill or in any way deface any portion
of the Premises. All alterations, improvements, remodeling or additions shall be
subject to the provisions of article XVII and Exhibits "C" and "E.9'

     (b)All alterations,  improvements, remodeling, additions or fixtures, other
than trade fixtures not permanently  affixed to the Premises,  which may be made
or  installed  in the  Premises  and which are  attached to the floor,  walls or
ceiling of the  Premises and any floor  covering  which is cemented or otherwise
affixed to the floor of the Premises shall be the property of Landlord and shall
remain upon and be  surrendered  with the  Premises at the  termination  of this
lease,  unless  Landlord  shall direct  Tenant to remove such items,  or some of
them, by written  notice given to Tenant not less than thirty (30) days prior to
the  expiration  of this lease or within  fifteen  (15) days  after the  earlier
termination  hereof Tenant shall remove any such items, at Tenant's cost,  prior
to the expiration of this lease, or in the event of an early termination, within
fifteen (15) days after Landlord's notice.

     (c) If the term of this lease shall be longer  than  five(S)  lease  years,
then  Landlord  may. at any time at or after the  expiration of the fourth (4th)
lease year and prior to the commencement of the next to last lease year, require
Tenant, at Tenant's cost, to renovate and refurbish the Premises as necessary to
maintain the Premises as a first-class  store. Such  refurbishment or renovation
shall be as specified by Landlord by written  notice to Tenant,  and may include
new carpeting,  painting,  new wall covering and new tenant  fixtures.  All such
work by Tenant shall be in accordance  with this Section  7.03,  Article XVII or
this lease and Exhibits "C" and "E" hereto and shall be completed within six (6)
months  after the date of  landlord's  notice.  Failure of tenant to perform its
obligations  pursuant to this Section shall be a default  pursuant to this lease
entitling  Landlord to exercise all remedies  available to a landlord  against a
defaulting tenant, including but not limited to those set forth in Article XIII.
As a part  of the  required  refurbishing  or  renovation  under  this  Section,
Landlord  may  require  higher  grade or  quality  wall or floor  coverings  and
fixtures than those originally installed in the Premises by Tenant.

CLEANLINESS:
WASTE AND NUISANCE

Section 7.04

     Tenant shall keep the  Premises at all times in a neat,  clean and sanitary
condition,  shall neither commit nor permit any waste or nuisance  thereon,  and
shall keep the walks and corridors  adjacent thereto free from Tenant's waste or
debris.
<PAGE>

HEALTH MATTERS

Section 7.05

     If tenant's  permitted use of the Premises pursuant to the applicable Basic
Lease  Provision  includes the sale or preparation  of food,  then the following
provisions  shall apply.  Further,  the last two sentences of subsection (a) and
subsections  (c),  (d) and (e)  shall  apply to all  tenants  other  than  those
involved in the sale or preparation of food:

     (a)Tenant shall, at its own cost,  retain a licensed,  bonded  professional
pest and sanitation  control service to perform  inspections of the Premises not
less  frequently  than once each thirty (30) days for the purpose of eliminating
infestation  and controlling  the presence of insects,  rodents,  and vermin and
shall promptly cause any corrective or  extermination  work  recommended by such
service to be  performed.  Such work shall be  performed  pursuant  to a written
contract,  and a copy  thereof  shall be  delivered  to  Landlord by Tenant upon
request.  If Tenant fails to perform its  obligations  under this Section  7.05,
Landlord  may, at its option and after five (5) days  written  notice to Tenant,
cause  such  inspection  to  be  performed  and  any  necessary   corrective  or
extermination  work  which  is  recommended  to be  done  and  the  cost of such
inspection and corrective or extermination work shall be additional rent payable
upon demand. In addition,  Landlord may elect to provide the services  specified
in  this  subsection  to  tenants  other  than  those  engaged  in the  sale  or
preparation of food. In such event. the cost of providing such services shall be
included  in the common  area costs  charged to the  tenants  for whom  Landlord
provides such services.

     (b) Tenant acknowled ges that Health Department requirements and Landlord's
constructio  n require  ments may  require  that  Tenant (i) enlarge the kitchen
drain line from the  Premises  to the main sewer line and (ii)  install a grease
trap in the floor drain of the kitchen of the  Premises.  Tenant  acknowled  ges
that it shall,  if required  and as a pan of Tenant's  Work  pursuant to Article
XVII, enlarge such sewer line and install such grease trap and



                                                      TENANT'S      LANDLORD'S
                                                  INITIALS       INITIALS(pound)


     shall,  during the term of this lease,  clean and maintain such grease trap
as a pan of Tenant's  obligations pursuant to Section 7.02 in such manner as may
be required by the Health Department or other  governmental  authorities  having
jurisdiction.

     (c)Tenant  shall store all waste and garbage in a refrigerated  or cool and
dry  location  within the  Premises  and shall  dispose of all waste and garbage
(including  wet  garbage  and food) only in trash  containers  placed in service
areas by Landlord for such purpose.  Tenant shall not  accumulate or permit such
materials to  accumulate in hallways,  service  corridors or other common areas.
Any waste or garbage,  and any food deliveries,  stored or accumulated by Tenant
outside of the Premises  (other than garbage placed in Center trash  containers)
may be removed  immediately by Landlord without notice to Tenant and the cost of
such   removal.   together  with  $50  per   occurrence   to  cover   Landlord's
administrative  cost in providing  such service to Tenant,  shall be  additional
rent payable by Tenant to Landlord upon demand.

     (d)Tenant  shall comply with all Health  Department and other  governmental
rules and  regulations  applicable  to Tenant's  operations  in the Premises and
shall  promptly (I) furnish or cause to be  furnished to Landlord  copies of all
Health Department and other governmental  reports.  notices and citations issued
with  respect  to  the  Premises  and  (ii)  cure  or  otherwise  eliminate  all
deficiencies   and  violations   noted  by  the  Health   Department  and  other
governmental   authorities  and  take  all  required   actions  to  prevent  the
reoccurrence of such deficiencies and violations.
<PAGE>
     (e)Failure of Tenant to perform any obligation  pursuant to subsections (a)
through  (d) above  shall be deemed an event of default  pursuant  to this lease
entitling  Landlord to exercise all remedies  available to a Landlord  against a
defaulting tenant, including those provided for in Article XIII of this lease.

                                  ARTICLE VIII
                              INSURANCE; INDEMNITY
LIABILITY
INSURANCE &-
PREMISES

Section 8.01

     Tenant shall at all times during the term hereof and at Tenant's  cost, for
the protection of Tenant and Landlord.  as their interests may appear.  maintain
in full force and effect a policy' or policies  of  insurance  which  afford the
following coverages:

     (a) Worker's Compensation in the statutorily required amount, together with
employer's  liability  coverage in an aggregate  liability  amount not less than
$1,000,000.

     (b) Comprehensive  General Liability  Insurance with an aggregate liability
amount not less than $3,000,000 combined single limit for both bodily injury and
property damage,  including blanket  contractual  liability,  broad form damage,
personal injury, completed operations, products liability, host liquor liability
(or  liquor  liability,  if  applicable)  and  owned  and  non-owned  automobile
coverage.  At least  $1,000,000 of such coverage  shall be provided by a primary
liability  policy',  and the  balance may be  provided  by the  umbrella  policy
required pursuant to Section 8.02.

     The minimum limit of the coverage  provided in subsection  (b) above may be
adjusted  upward or downward at the expiration of each third (3rd) lease year as
follows:  Not less than sixty (60) days prior to the relevant  adjustment  date,
Landlord may request such insurance  brokerage firm as is then placing insurance
for  Landlord  (the  "Reviewing  Broker"),  to  review  Tenant's  then  existing
liability  insurance  coverage,  to review the then use of the  Premises and the
claims history with respect thereto and to recommend,  in writing, the amount of
coverage to be carried by Tenant pursuant to subsection (b). Such recommendation
shall be  based  upon the then  use of the  Premises  and the  liability  claims
history with respect to the  Premises  and shall be  consistent  with amounts of
coverage  generally  recommended by such  Reviewing  Broker for similar types of
tenants or users of property  with uses  similar to that of the  Premises in the
geographical  area which  includes the Premises.  If the Reviewing  Broker shall
recommend  an increase in the amount of coverage  then  provided by Tenant under
subsection (b),  Tenant shall promptly  increase its coverage to the recommended
amount.  In no event  shall  there be any  reduction  in the amount of  coverage
provided  by Tenant  under  subsection  (b) below the  initial  amount set forth
herein, notwithstanding any recommendation by the Reviewing Broker.

     Landlord,  and any other  persons  designated  by  Landlord  and  having an
insurable  interest  in the  Premises  shall  be added  as  additional  insureds
pursuant  to such  policies  (although  they shall not have any  obligations  of
"named" insureds  therein).  The insurance required by this Section shall be the
primary  insurance  as  respects  Landlord  (and any other  additional  insureds
designated by Landlord) and not contributory with any other available insurance.
The policy or policies  providing the coverage  required by subsection (b) above
shall contain an endorsement providing, in substance, that "such insurance as is
afforded  hereby  for the  benefit  of  [Landlord  and any  additional  insureds
designated by Landlord) shall be primary and any insurance  carried by [Landlord
and any  additional  insureds  designated  by Landlord]  shall be excess and not
contributory." In no event shall the limits of any coverage maintained by Tenant
pursuant to this  Section be  considered  as limiting  the  liability  of Tenant
pursuant to this lease.

LANDLORD'S     TENANT'S
INITIALS       INITIALS

<PAGE>
FIRE INSURANCE FIXTURES, EQUIPMENT
AND TENANT IMPROVEMENTS                 Section 8.02   See Addendum

     (a)  Tenant  shall at all times  during the term  hereof,  and at its cost,
maintain in effect policies of insurance covering (i) all tenant improvements on
the  Premises,   providing  protection  against  any  pan  included  within  the
classification  "All Risk," including but not limited to insurance against fire,
windstorm,  cyclone,  tornado,  hail, explosion,  riot. riot attending a strike,
civil commotion,  aircraft,  vehicle, smoke damage, sprinkler leakage, vandalism
and malicious mischief, and, if required by Landlord, earthquake and flood, such
insurance  to be in an amount not less than the full  replacement  value of such
improvements,  which  shall be  determined  at the time the policy is  initially
obtained,  and not less frequently  than once every three (3) years  thereafter,
and such other  insurance  as may be required  by  Landlord's  lender;  (ii) all
personal  property of Tenant  located in or on the  Premises,  including but not
limited to fixtures,  furnishings,  equipment. furniture, inventory and stock in
trade.  in an amount  not less than  their  full  replacement  value.  providing
protection  against any peril included within~n the  classification  "All Risk."
including  but not  limited  to  insurance  against  fire,  windstorm,  cyclone,
tornado,  hail,  explosion,  riot,  riot  attending a strike,  civil  commotion,
vehicles,  aircraft.  smoke damage.  sprinkler leakage,  vandalism and malicious
mischief and, if required by Landlord, earthquake and flood: and (iii) all plate
glass on the Premises, together with an umbrella policy to provide any liability
coverage not included under Tenant's primary'  liability policy carried pursuant
to Section 8.01. The insurance  required by this subsection shall be the primary
insurance with respect to the property covered thereby.

     (b)The proceeds of such insurance shall be made payable to Landlord and, so
long as this lease  remains in  effect.  shall be used to repair or replace  the
pans of the Premises, any improvements thereto and personal property so insured.
Upon any termination of this lease by Landlord pursuant to Sections 9.02,9.03 or
9.04, Landlord may keep or apply the proceeds of the insurance required pursuant
to  clauses  (I) and (iii) of  subsection  (a)  above,  at its  discretion;  the
remaining  proceeds  shall be the  property of Tenant and shall be  delivered by
Landlord to Tenant.

     (c)Tenant  shall  at its  cost  maintain  business  interruption  insurance
assuring that the rent, including the Percentage Rent, payable hereunder will be
paid to  Landlord  for a period  of not less  than  twelve  (12)  months  if the
Premises are destroyed or rendered  inaccessible  by a risk insured against by a
policy of All Risk insurance,  with any endorsements  required by subsection (a)
above.

FIRE INSURANCE-PREMISES Section 8.03

     Landlord  shall at all times  during the term  hereof  maintain in effect a
policy or policies  of  insurance  covering  the  Center,  including  Landlord's
interest  in all  tenant  improvements  in the  Premises  paid for by  Landlord,
providing  protection  against any pan included within the  classification  "All
Risk,"  together  with  insurance  against  sprinkler  leakage,   vandalism  and
malicious  mischief and, if Landlord so elects,  rental  interruption  insurance
assuring that the rent under this lease will be paid to Landlord for a period of
not less than twelve  (12)  months if the  Premises  are  destroyed  or rendered
inaccessible by a risk insured against under the foregoing coverage. The cost of
maintaining  such insurance shall be included in the costs  reimbursed by Tenant
to Landlord pursuant to Article XIV.


INSURANCE
POLICIES       Section 8.04

     All  insurance  required  to be carried by Tenant  hereunder  shall be with
companies  rated A:XIII,  or better,  in the then most recent  version of Best's
Insurance  Guide and licensed to provide the relevant  insurance in the State of
California. Tenant shall deliver to Landlord, on or prior to the date possession

<PAGE>
of the Premises is delivered to Tenant, and thereafter at least thirty (30) days
prior to the  expiration  or renewal  date of any policy  maintained  by Tenant,
copies of the policies or certificates  evidencing such insurance.  All policies
and  certificates  delivered  pursuant to this Section shall  contain  liability
limits not less than those set forth in Sections  8.01 and 8.02,  shall list the
additional  insureds,  shall  specify all  endorsements  and  special  coverages
required by such  Sections and shall be effective on or before the  Commencement
Date.  Each such policy' shall contain  provisions (by endorsement or otherwise)
requiring not less than thirty (30) days written notice to Landlord prior to any
cancellation,  non-renewal or material  amendment thereof and requiring that the
proceeds of the insurance  maintained  pursuant to Section 8.02 shall be payable
to Landlord.  For the purposes of this  Article  VIII,  the phrase "term of this
lease" shall mean the period from the Commencement Date through the later of the
expiration  or  termination  of the  lease  term or the date  Tenant  surrenders
physical possession of the Premises to Landlord. Any insurance required pursuant
to this lease may be provided by means of a so-called  "blanket" policy, so long
as the Premises are  specifically  covered (by rider,  endorsement or otherwise)
and the policy otherwise complies with the provisions of this lease.

WAIVER OF SUBROGATION    Section 8.05

     Landlord  and Tenant  each  hereby  waives  any and all rights of  recovery
against the other,  and  against any other  tenant or occupant of the Center and
against the officers, employees, agents, representatives. customers and business
visitors  of such other  party and of each such other  tenant or occupant of the
Center,  for loss of or  damage to such  waiving  party or its  property  or the
property of others under its control,  arising  from any cause  insured  against
under any policy of  insurance  required  to be carried  by such  waiving  party
pursuant  to the  provisions  of this  lease (or any other  policy of  insurance
carried  by such  waiving  party in lieu  thereof)  at the time of such  loss or
damage.  The foregoing waiver shall be effective  whether or not a waiving party
actually  obtains  and  maintains  the  insurance  which such  waiving  party is
required  to obtain  and  maintain  pursuant  to this  lease (or any  substitute
therefor).  Landlord and Tenant shall,  upon obtaining the policies of insurance
which they are required to maintain  hereunder,  give notice to their respective
insurance carrier or carriers that the foregoing mutual waiver of Subrogation is
contained in this lease.

                                               Tenant'S      LANDLORD'S
                                               INITIALS       INITIALS

INDEMNITY  Section 8.06

     To the fullest extent permitted by law, Tenant shall indemnify,  defend and
hold Landlord harmless from and against any liability or expense  (including but
not limited to attorneys' fees and costs of defense) for any damage or injury to
persons  or  property  in or about the Center  which may result  from the use or
occupation  of the Premises by or the breach of the  provisions of this Lease by
Tenant, its agents,  employees.  invitees,  licensees,  concessionaires or other
persons  claiming  under Tenant.  It is understood and agreed that payment shall
not  be a  condition  precedent  to  enforcement  of  the  foregoing  indemnity.
Provided,  however,  that the foregoing shall not extend to any damage or injury
which Tenant  establishes  in a court of competent  jurisdiction  was solely and
proximately caused by the negligence of Landlord, its agents or employees.

EXEMPTION OF LANDLORD

Section 8.07

     Landlord shall not be liable for injury or damage which may be sustained by
the person, goods, wares, merchandise or property of Tenant, Tenant's employees.
invitees or customers or any other person in or about the Premises  caused by or
resulting  from any peril  which may  affect  the  Premises,  including  but not
limited to fire, steam. electricity,  gas, water or rain, which may leak or flow
from  or  into  any  part  of the  Premises,  or  from  the  breakage,  leakage,
obstruction  or other  defects  of the  pipes,  sprinklers,  wires,  appliances.
plumbing, air conditioning or lighting fixtures of the same. whether such damage
or injury  results  from  conditions  arising  upon the  Premises  or upon other
portions of the building of which the Premises are a pan. or from other sources.
Landlord shall not be liable for any damages  arising from any act or neglect of
any other tenant of the Center,  or any of their  officers,  employees,  agents,
representatives,  customers,  business visitors or invitees.  Provided, however,
that the  foregoing  shall  not  apply to any  damage  or  injury  which  Tenant
establishes  in a court of  competent  jurisdiction  was solely and  proximately
caused by the negligence of Landlord, its agents or employees.
<PAGE>

LANDLORD'S
SECURITY

Section 8.08

     Landlord  may, but shall have no obligation  to. from time to time,  employ
one or more  persons 0!  entities to patrol or provide  security  for the common
areas.   Notwithstanding   any  such  activity,   Tenant  shall  have  the  sole
responsibility  of providing  security for the Premises and the persons therein.
Under no  circumstances  shall:  Landlord  be  liable  to Tenant or to any other
person by reason of any theft, burglary, robbery, assault. trespass unauthorized
entry. vandalism, or any other act of any third person occurring in or about the
Premises, and Tenant shall indemnify, defend and hold Landlord harmless from and
against  any  and  all  losses,  liabilities,  judgments.  cost'.  and  expenses
(including  but not  limited to  reasonable  attorneys'  fees and other costs of
investigation  or  defense:  which  Landlord  may  suffer by reason of any claim
asserted -by any person arising out of, or related to, any of the foregoing.  To
the extent Landlord elects to provide such patrol or security services, the cost
thereof shall be included in common area costs pursuant to Section 14.04 hereof.




                                   ARTICLE IX
                             REPAIRS AND RESTORATION

INSURED OR MINOR DAMAGE          Section 9.01

     Subject to the  provisions or sections 9.03 and 9.04, if at any time during
the term hereof the  Premises 0 the Center are  destroyed  or damaged and either
(a) such damage is not "substantial" as that term is hereinafter defined, or (b)
such  damage was  caused by a casualty  required  to be  insured  against  under
Sections  8.02 and 8.02 then  Landlord  shall  promptly  repair  such  damage to
portions  of the  Center  located  outside  of the  exterior  boundaries  of the
Premises, Tenant shall repair the Premises and this lease shall continue in full
force and effect.


MAJOR DAMAGE  Section 9.02

     Subject to the  provisions of sections 9.03 and 9.04, if at any time during
the term  hereof the  Premise  are  destroyed  or damaged  and if such damage is
"substantial" as that term is hereinafter defined, and if such damage was caused
by a casualty not required to be insured  against under  Sections 8.02 and 8.03,
then Landlord may at it option either (a) promptly conduct the repair to be made
by Landlord  pursuant to Section  9.01,  in which ever Tenant shall  conduct the
repair  to be made by Tenant  pursuant  to  Section  9.01 and this  lease  shall
continue in fu force and effect,  or (b) cancel and  terminate  this lease as of
the date of the  occurrence of such damage,  by giving Tenant  written notice of
its election to do so within  fifteen (15) days after the date of  occurrence of
such damage

MAJOR DAMAGE TO CENTER Section 9.03

     In the event that premises in the Center  aggregating  twenty-five  percent
(25%) or more of the tot floor area of all buildings within the Center leased or
offered for lease to tenants (other than the  Robinson's at Broadway  buildings)
shall be  damaged  or  destroyed,  whether or not the  Premises  are  damaged or
destroyed'  Landlord may at Landlord's option cancel and terminate this lease by
giving written notice to Tenant of Landlord  election to do so within sixty (60)
days after the date of  occurrence  of such  damage,  in which  event this lease
shall' terminate on the date such notice is given.

Tenant'S                 LANDLORD
INITIALS                 INITIALS



                                           14

<PAGE>
NEAR END OF TERM

     If the Premises are destroyed or damaged during the last  twenty~four  (24)
months  of the term of this  lease and the  estimated  cost 0 pair  exceeds  ten
percent  (10%) of the Mit am Rent then  remaining  to be paid by Tenant  for the
balance of the term,  Landlord may at its option cancel and terminate this lease
as of the date of occurrence of such damage by giving  written  notice to Tenant
of its election to do so within  fifteen (IS) days after the date of  occurrence
of such  damage.  If Landlord  shall not so elect to terminate  this lease,  the
repair of such damage  shall be governed by Sections  9.01,  9.02 or 9.03 as the
case may be.

ABATEMENT Section 9.05
OF RENT:
REMEDIES FOR NON-PERFORMANCE

     (a) If the  Premises or the Center are  destroyed  or damaged and  Landlord
elects to repair or restore  pursuant to the provisions of this Article,  Tenant
shall  continue  the  operation  of its  business in the  Premises to the extent
reasonably  practicable from the standpoint of prudent business management.  The
Minimum Rent,  Percentage  Rent and  additional  rent payable  hereunder for the
period during which such damage, repair or restoration continues shall be abated
in proportion  to the degree to which  Tenant's use of the Premises is impaired,
but only to the  extent  that  Landlord  is  compensated  for  such  loss by the
insurance carrier pursuant to Sections 8.02 and 8.03. Tenant shall have no claim
against Landlord for any damage suffered by Tenant by reason of any such damage,
destruction,  repair or restoration.  Tenant waives the provisions of Civil Code
Sections 1932(2) and 1933(4) and any present or future laws or case decisions to
the same effect.  Upon  completion of such repair or  restoration,  Tenant shall
promptly refixture and restock the Premises substantially to the condition prior
to the casualty and shall reopen for business if closed by the casualty.

     (b)If  either  party  shall be  obligated  to repair or  restore  under the
provisions  of this  Article and shall not commence  such repair or  restoration
within thirty (30) days after such obligation shall accrue,  the other party may
at its option  cancel and  terminate  this lease as of the date of occurrence of
such damage by giving to the non-performing party written notice of its election
to do so at any time after the  expiration  of each  thirty  (30) day period and
prior to the  commencement of such repair or restoration.  Such obligation shall
be deemed to accrue on the later of (i) receipt by the party obligated to repair
of any governmental  permit or approval  necessary to commence such work or (ii)
settlement of any insurance claim with respect 10 such casualty. The restoration
obligations of Tenant hereunder shall include repair, restoration or replacement
of tenant's  equipment and personal  property.  If the panics are required to or
elect to repair or restore  pursuant to this  Article,  then each party shall be
entitled to the proceeds of the insurance  maintained  pursuant to Sections 8.02
and 8.03 as pertain to the improvements to be repaired or restored by it.

DEFINITIONS    Sectoin 9.06

     (a) For the purpose of this Article,  "substantial"  damage to the Premises
shall be deemed to be damage to the  building of which the  Premises  area part,
the  estimated  cost of  repair  of which  exceeds  one-fifth  (1/5) of the then
estimated replacement cost of such building.

     (b)The  determination  in good faith by Landlord of the  estimated  cost of
repair of any damage  and~or of the estimated  replacement  cost of any building
shall be conclusive for the purpose of this Article.

<PAGE>
                                    ARTICLE X
                            ASSIGNMENT AND SUBLETTING

LANDLORD'S RIGHTS   Section 10.01 See Addendum

     (a)Tenant  shall not,  either  voluntarily or by operation of law,  assign,
sell,  encumber,  pledge  or  otherwise  transfer  all  or any  pan of  Tenant's
leasehold  estate  hereunder,  or permit the  Premises  to be occupied by anyone
other than Tenant or Tenant's  employees  or sublet the  Premises or any portion
thereof,  without Landlord's prior written consent in each instance.  Consent by
Landlord to one or more  assignments of this lease or to one or more sublettings
of the  Premises  shall not  operate to  exhaust  Landlord's  rights  under this
Section.  The  voluntary or other  surrender of this lease by Tenant or a mutual
cancellation  hereof  shall  not  work a  merger,  and  shall at the  option  of
Landlord,  terminate all or any existing  subleases or subtenancies or shall, at
Landlord's  option,  operate as an assignment  to Landlord of such  subleases or
subtenancies.  If  tenant  is  a  corporation  which,  under  the  then  current
guidelines  published  by the  Commissioner  of  Corporations  of the  State  of
California,  is  not  deemed  a  public  corporation,  or is  an  unincorporated
association or partnership.  the transfer,  assignment or  hypothecation  of any
stock  or  interest  in such  corporation,  association  or  partnership  in the
aggregate in excess of  twenty-five  percent (25%) shall be deemed an assignment
within the meaning and  provisions of this  Article.  Tenant agrees to reimburse
Landlord  for  Landlord's  reasonable  costs and  attorneys'  fees  incurred  in
connection  with  the  processing  and   documentation  of  any  such  requested
assignment,  subletting,  transfer, change of ownership or hypothecation of this
lease or Tenant's interest in and to the Premises.

     (b)If  tenant  desires  at any time to assign  this  lease or to sublet the
Premises or any portion thereof, it shall first notify Landlord of its desire to
do so and shall  submit in  writing  to  Landlord  (i) the name of the  proposed
subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's
business to be carried on in the  Premises:  (iii) the terms and prov. is of the
proposed sublease or assignme .and the proposed effective date thereof: and (iv)
such  reasonable  financial  information as Landlord may request  concerning the
proposed subtenant or assignee,  including but not limited to a balance sheet of
the proposed subtenant or assignee as of a date within ninety (90) days prior to
the request for Landlord's  consent,  statements of income or profit and loss of
the proposed subtenant or assignee for the two year period preceding the request
for  Landlord's  consent and a written  statement m reasonable  detail as to the
business  and retail  merchandising  experience  of the  proposed  subtenant  or
assignee  during  the five (5)  years  preceding  the  request~  for  Landlord's
consent.

     (c) At any time  within  thirty (30) days after  Landlord's  receipt of the
information  specified in  subsection  (b),  Landlord  may by written  notice to
Tenant elect to (I) consent to the  subletting or assignment  upon the terms and
to the  subtenant  or  assignee  proposed;  (ii)  refuse  to give  its  consent,
specifying in reasonable  detail the reason(s)  therefor;  or (iii) sublease the
Premises  or the portion  proposed  to be  subleased  or take an  assignment  of
Tenant's  leasehold  estate  hereunder  upon the  same  terms  (excluding  terms
relating to the purchase of stock,  the use of Tenant's name or the continuation
of Tenant's business) as those offered to the proposed subtenant or assignee, as
the case may be. If Landlord  elects to proceed  pursuant to clause (iii) above,
any payment by Landlord to Tenant  pursuant to such clause  shall not exceed the
amount which  Tenant would have  received  pursuant to  subsection  (e) below if
Landlord  had  elected to proceed  pursuant  to clause (i) above.  If this lease
shall be terminated with respect to the entire  Premises,  the term shall end on
the date  stated in Tenant's  notice as the  effective  date of the  sublease or
assignment  as if that  date had been  originally  fixed in this  lease  for the
expiration of the term. If Landlord  recaptures  only a portion of the Premises,
the Minimum  Rent and  additional  rent during the  unexpired  term shall abate,
proportionately,  based  on the rent as of the  date  immediately  prior to such
recapture. Tenant shall, at Tenant's own cost and expense, discharge in full any
commissions which may be due and owing as a result of any proposed assignment or
subletting,  whether or not the  Premises  are  recaptured  pursuant  hereto and
rented by Landlord to the proposed tenant or any other tenant
<PAGE>
     (d)  Landlord  shall have the right to approve or  disapprove  any proposed
assignee or  sublessee.  In  exercising  such right of approval or  disapproval,
Landlord  shall be  entitled  to take  into  account  any fact or  factor  which
Landlord deems relevant to such decision,  including but not necessarily limited
to any or all of the following:

     (i) The financial strength of the proposed assignee or subtenant, including
the  adequacy  of  its  working  capital  to pay  all  expenses  anticipated  in
connection with any remodeling and restocking of the Premises.

     (ii) The  experience of the proposed  assignee or subtenant with respect to
businesses  of the type and size which such  assignee or  subtenant  proposes to
conduct in the Premises.

     (iii) The quality and nature of the merchandise and retail services offered
for sale by the proposed  assignee or subtenant in any other  locations which it
has, as reflected  by, among other things,  average unit sales,  and the quality
and  nature of the  merchandise  and retail  services  which  such  assignee  or
subtenant proposes to offer for sale in the Premises.

     (iv)  Violation of exclusive use rights  previously  granted by Landlord to
other tenants of the Center.

     (v) The effect of the type of services and  merchandise  which the proposed
assignee or subtenant  proposes to sell in the  Premises  upon the tenant mix in
the portion of the Center which contains the Premises,  including duplication of
services and merchandise offered by surrounding tenants and compatibility of the
services and  merchandise  which such assignee or subtenant  proposes to sell in
the Premises with merchandise offered by surrounding tenants in the Center

     (vi) Diminution or potential diminution of Percentage Rent payable pursuant
to this lease as the result of such assignment or subletting.

     (vii) The quality of the store appearance  resulting from any remodeling or
renovation  to be  conducted  by the  proposed  assignee or  subtenant,  and the
compatibility  of such  quality  with that of other  stores in the the Center in
which the Premises are located.

     (viii)  Whether the store in the  Premises  is, and whether the store to be
operated by the proposed  assignee or subtenant will be, a  "destination  store"
(i.e.,  a store which draws patrons to the Center  specifically  to shop at such
store).

     (ix) Whether there then exists any default by Tenant pursuant to this lease
or any non-payment or non-performance by Tenant under this lease which, with the
passage of time and/or the giving of notice  would  constitute  a default  under
this lease.

     Moreover,  Landlord shall be entitled to be reasonably  satisfied that each
and every  covenant,  condition or obligation  imposed upon Tenant by this lease
and each and every right,  remedy or benefit afforded  Landlord by this lease is
not impaired or diminished by such assignment or subletting.

     (e) As a condition to Landlord's  consent to any  assignment or subletting,
Landlord  shall be entitled to receive,  in the case of a  subletting,  all rent
(however  denominated  and paid) payable by the subtenant to Tenant in excess of
that  payable by Tenant to  Landlord  pursuant to the other  provisions  of this
lease and, in the case of an assignment.  all consideration  given.  directly or
indirectly,  by the assignee to Tenant for Tenant's  leasehold estate hereunder,
and Landlord shall be entitled to increase the monthly  Minimum Rent to the then
fair market rental value of the Premises.  For the purposes of this clause,  the
term "rent" shall mean all consideration paid or given, directly or

                                     16
<PAGE>
     indirectly,  for the use of the  mises  or any  portion  thereof.  The term
~consideration"  shall mean and include money,  services,  property or any other
thing  of  value  such as  payment'  ~f  costs,  cancellation  of  indebtedness,
discounts,  rebates and the like. Any rent or other consideration which is to be
passed through to Landlord by Tenant pursuant to this  subsection  shall be paid
to  Landlord  promptly  upon  receipt  by  Tenant  and  shall  be paid in  cash,
irrespective  of the form in which  received  by Tenant  from any  subtenant  or
assignee.  In the event that any rent or other consideration  received by Tenant
from a subtenant  or assignee is in a form other than cash,  Tenant shall pay to
Landlord in cash the fair value of such consideration.

     (f)All options to extend.  renew or expand, if any, contained in this lease
are  personal to Tenant.  Consent by Landlord to any  assignment  or  subletting
shall not include  consent to the assignment or transfer of any such rights with
respect to the Premises,  any special  privileges or extra  services  granted to
Tenant by this lease, or any addendum or amendment hereto or letter of agreement
(and such options,  rights,  privileges or services  shall  terminate  upon such
assignment or subletting),  unless Landlord  specifically grants in writing such
options, rights, privileges or services to such assignee or subtenant.

     (g)If  Landlord  consents  to such  assignment  or  subletting  or does not
exercise  any option set forth in  subsection  (c) within  said  thirty (30) day
period,  Tenant may  thereafter  within sixty (60) days after the  expiration of
said thirty  (30) day period  enter into a valid  assignment  or sublease of the
Premises or portion  thereof,  upon the terms and  conditions  described  in the
information  required  to  be  furnished  by  Tenant  to  Landlord  pursuant  to
subsection  (b), or upon other  terms not less  favorable  to Tenant,  provided,
however,  that any material  change in such terms shall be subject to Landlord's
consent as provided in this Section and, provided further, that any amount to be
paid to Landlord by Tenant in connection  therewith  pursuant to subsection  (e)
above  shall  be paid  to  Landlord  upon  the  later  of  consummation  of such
transaction or receipt by Tenant of such consideration.

NO RELEASE OF TENANT      Section 10.02

     No  subletting  or  assignment,  even with the consent of  Landlord,  shall
relieve Tenant of its obligation to pay the rent and to perform all of the other
obligations to be performed by Tenant  hereunder.  The acceptance by Landlord of
any payment due hereunder  from any person other than Tenant shall not be deemed
to be a waiver by Landlord of any  provision of this lease or to be a consent to
any assignment or subletting.  The foregoing  restrictions shall be binding upon
any assignee or subtenant to which Landlord has consented. Any sale, assignment,
mortgage,  transfer of this lease or  subletting  which does not comply with the
provisions of this Article shall be void.



                                   ARTICLE XI
                                 EMINENT DOMAIN

ENTIRE OR SUBSTANTIAL TAKING  Section 11.01

     If the  entire  Premises,  or so much  thereof as to make the  balance  not
reasonably  adequate  for  the  conduct  of  Tenant's  business  notwithstanding
restoration by Landlord as hereinafter provided,  shall be taken under the power
of eminent domain,  this lease shall  automatically  terminate as of the date on
which the condemning authority takes possession.

PARTIAL TAKING Section 11.02

     In the event of any taking under the power of eminent domain which does not
so result in a termination  of this lease,  the Minimum Rent and all  additional
rent other than Percentage


<PAGE>
     Rent payable hereunder shall be reduced,  effective as of the date on which
the condemni ng authority takes  possessio n, in the same  proportion  which the
floor area of the portion of the  Premises  taken bears to the floor area of the
entire  Premises  prior to the taking,  Landlord  shall  promptly at its expense
restore the portion of the Premises not so taken to as near its former condition
as is  reasonably  possible,  and this lease  shall  continue  in full force and
effect



TAKING OF CENTER    Section 11.03

     If premises in the Center aggregating  twenty-five percent (25%) or more of
the total floor area of all  buildings  within the Center  leased or offered for
lease to tenants  (other than the Robinson's  and Broadway  buildings)  shall be
taken by eminent domain, whether or not the Premises are so taken, Landlord may,
at its option,  terminate this lease by written notice to Tenant of its election
to do so prior to the date the condemning  authority  requires  possession.  and
this  lease  shall  terminate  on the date  the  condemning  authority  requires
possession.



AWARDS     Section 11.04

     Any award for any taking of all or any pan of the Premises  under the power
of eminent domain shall be the property of Landlord, whether such award shall be
made as  compensation  for diminution in value of the leasehold or for taking of
the fee. Nothing contained herein,  however,  shall be deemed to preclude Tenant
from  obtaining.  or to give  Landlord  any interest in, any award to Tenant for
loss of or damage to Tenant's trade fixtures and removable  personal property or
for damages for cessation or interruption of Tenant's business.

UNDER
THREAT OF CONDEMNATION

     A sale by  Landlord  to any  authority  having the power of eminent  domain
condemnation or while  condemnation  proceedings  are pending,  shall be dec 1 a
taking under the power of eminent domain for all purposes under this Article.


                                   ARTICLE XII
                                UTILITY SERVICES

UTILITY CHARGES     Section 12.01

           Tenant  shall pay all  charges,  surcharges  and other fees  (however
denominated) for gas, electricity,  telephone and other utility services used in
the  Premises  during the lease term.  If any such charges are not paid when due
Landlord may pay the same,  and any amount so paid by Landlord  shall  thereupon
become due to Landlord  from Tenant as  additional  rent.  In  addition.  if the
Premises are used for the preparation of food, then water and sewer charges will
also be billed  directly to Tenant and paid  directly by Tenant to the purveyor;
otherwise  Tenant's water and sewer usage charge will be included in common area
costs pursuant to Section 14.04.

FURNISHING OF SERVICES   Section 12.02

            If  Landlord  shall  elect to furnish  any  utility  services to the
Premises,  Tenant shall purchase its requirements  thereof from Landlord so long
as the rates charged therefor by Landlord do not exceed those which Tenant would
be required to pay on an  individual  basis if-such  services were  furnished it
directly by a public utility.  Landlord may  discontinue,  without  notice,  any
utility  service  being  furnished by Landlord if Tenant fails to pay, when due,
the bills for such service or any rent payable by Tenant hereunder.
<PAGE>
INTERRUPTION OF SERVICE  Section 12.03

            Landlord shall not be liable in damages or otherwise for any failure
or  interruption of any utility service being furnished the Premises and no such
failure or  interruption  shall entitle Tenant to terminate this lease, or to an
abatement of the rent due hereunder.

PREMISES AIR CONDITIONING     Section 12.04

           Landlord shall operate and maintain a roof-mounted, packaged variable
air volume  ventilation  and air  conditioning  system to serve the Premises and
shall provide ventilating and conditioned air to the Premises, at the times, and
meeting the  standards  set forth in Exhibits "C," "D" and "E." Tenant shall pay
Landlord.  as additional rent. for such ventilating and conditioned air, monthly
in  advance,  the amount  specified  in Exhibit  "D." Tenant  shall  operate its
business  in  such  a  manner  as  not to  use  unreasonable  quantities  of the
conditioned   air  so  furnished,   and  so  as  to  maintain  in  the  Premises
approximately  the same  temperatures  which are from time to time maintained by
Landlord in the Enclosed Mall. Such  ventilating and conditioned air meeting the
criteria set forth in Exhibit "D" shall be provided to the  Premises  during the
same hours that ventilating and air is provided to the Enclosed Mall pursuant to
Section 12.05. Landlord may enter the Premises,  from time to time, to ascertain
if any changes have been made which may alter the cooling load of the  Premises.
If any such alteration is noted, Landlord may measure such cooling load and may.
at  Landlord's  option,  recalculate  the  amount  due from  Tenant to  Landlord
pursuant to Exhibit "D" from the date of such alteration.  Any additional amount
due shall be paid  within ten (10) days  after  Tenant's  receipt of  Landlord's
invoice  therefor.  For the purposes of this Section,  all package units serving
tenant  premises may be deemed to  constitute a single  system or, at Landlord's
election,  each unit may be deemed a separate system for purposes of determining
costs of operation and charges to tenants, including Tenant.

ENCLOSED MALL AIR CONDITIONING     Section 12.05

     Landlord shall operate and maintain a roof-mounted,  packaged  variable air
volume  ventilation  and air  conditioning  system  to cool  and  ventilate  the
Enclosed Mall during the required minimum and optional opening hour from time to
time established by Landlord.  Tenant shall pay for such services, as additional
rent,  in equal  monthly'.  installments  in advance,  the sum  specified in the
applicable  Fundamental Lease Provision per year per square foot 0 Floor Area of
the Premises, subject to adjustment pursuant to Exhibit "D." Any such adjustment
shall  be  computed  ii the  same  manner  specified  in  Exhibit  "D"  for  the
computation of adjustments in rates for ventilating and conditioned air supplied
to the Premises. 

                                  ARTICLE XIII
                             DEFAULTS AND REMEDIES

DEFAULTS Section 13.01

     The occurrence of any one or more of the following  events shall constitute
a default hereunder by Tenant:

     (a)The abandonment of the Premises by Tenant. Abandonment is herein defined
to include,  but is not limited to, any absence by Tenant from the  Premises for
five (5) days or longer.

     (b)The failure by Tenant to make any payment of rent,  additional  rent, or
other payment required to be made by Tenant  hereunder,  as and when due, or the
failure of Tenant to observe  the  minimum  hours of  operation  established  by
Landlord, where such failure shall continue for a period of three (3) days after
written notice thereof from Landlord to Tenant: provided. however, that any such
notice  shall be in lieu of, and not in addition to, any notice  required  under
California Code of Civil Procedure Sec. 1161, et. seq., as amended. For purposes
of this  subsection  (b),  Tenant  shall not be  deemed to have  cured a default
resulting  from  Tenant's  failure to observe  the  minimum  hours of  operation
established  by  Landlord  if Tenant  shall,  within  thirty (30) days after any
purported cure. again fail to observe such minimum hours of operation.
<PAGE>
     (c)The  failure by Tenant to observe or  perform  any of the  covenants  or
provisions  of this lease to be observed or performed  by Tenant,  other than as
specified in (a) or (b) above,  where such failure  shall  continue for a period
often (10) days after written notice thereof from Landlord to Tenant;  provided,
however,  that any,'such notice shall be in lieu of, and not in addition to, any
notice  required under  California Code of Civil Procedure Sec. 1161 et seq., as
amended;  provided further,  that if the nature of Tenant's default is such that
more than ten (10) days are reasonably  required for its cure, then Tenant shall
not be deemed to be in default if Tenant  shall  commence  such cure within said
ten (10) day period and thereafter diligently prosecute such cure to completion.
Notwithstanding the foregoing,  if the covenant or other provision of this lease
which is violated by Tenant cannot  thereafter  be performed  (such as obtaining
Landlord's  prior written consent to an assignment of Tenant's  interest in this
lease, a subletting of the Premises,  a change in trade name, a change in use or
a physical  alteration to the  Premises) by Tenant,  then Landlord need not give
the foregoing  notice  demanding  performance  to Tenant (or to any subtenant or
assignee) for such violation to constitute a default under this lease  entitling
Landlord to exercise its remedies upon a default by Tenant,  including those set
forth in this Article XIII.

     (d)(I) The making by Tenant of any  general  assignment  for the benefit of
creditors;  (ii) the filing by or against  Tenant of a petition  to have  Tenant
adjudged bankrupt or a petition for  reorganization or arrangement under any law
relating to bankruptcy  (unless, in the case of a petition filed against Tenant,
the same is  dismissed  within  thirty (30) days):  (iii) the  appointment  of a
trustee or receiver to take possession of  substantially  all of Tenant's assets
located at the Premises or of Tenant's interest in this lease,  where possession
is not  restored  to  Tenant  within  thirty  (30)  days:  (iv) the  attachment,
execution or other  judicial  seizure of  substantially  all of Tenant's  assets
located at the  Premises  or of  Tenant's  interest  in this  lease,  where such
seizure is not discharged within thirty (30) days: or (v) Tenant's  convening of
a meeting of its  creditors or any class  thereof for the purpose of effecting a
moratorium upon or composition of its debts, or any class thereof.


REMEDIES   Section 13.02

     (a) In the event of any default by Tenant as defined  herein,  Landlord may
exercise the following remedies:

     (I)Terminate  Tenant's  right to  possession  of the Premises by any lawful
means,  in which case this lease shall  terminate  and Tenant shall  immediately
surrender  possession of the Premises to Landlord.  In such event Landlord shall
be entitled to recover  from  Tenant all amounts  which  Landlord is entitled to
recover  pursuant  to  Section  1951.2  of the  California  Civil  Code  (or any
successor thereto), including, but not limited to:

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

     (ii)Any other amount necessary to compensate Landlord for all the detriment
proximately  caused by Tenant's  failure to perform its  obligations  under this
lease or which in the  ordinary  course  of  thing.  would be  likely  to result
therefrom.  including,  but not limited to, the cost of recovering possession of
the Premises expenses of reletting,  including necessary repair,  renovation and
alteration of the Premises,  reasonable attorneys' fees and any other reasonable
costs.

     The  "worth at the time of award" of all  rental  amounts  other  than that
referred to in clause (i) above  shall be  computed by allowing  interest at the
rate per annum  determined  pursuant to Section 16.06 from the date such amounts
accrue to Landlord.  The worth at the time of award of the amount referred to in
clause  (i) above  shall be  computed  by  discounting  such  amount at one (I )
percentage  point above the  discount  rate of the Federal  Reserve  Bank of San
Francisco at the time of award.
<PAGE>
     (2)Without terminating or effecting a forfeiture of this lease or otherwise
relieving  Tenant 0 any obligation  hereunder in the absence of express  written
notice of Landlord's  election to do so,  Landlord  may. bu need not,  relet the
Premises  or any  portion  thereof at any time or from time to time and for such
terms and upon such conditions and rental as Landlord in its discretion may deem
proper.  Whether or not the Premises are relet, Tenant shall pay to Landlord all
amounts  required by Tenant  hereunder up to the date that  Landlord  terminates
Tenant's  right to possession of the Premises.  Such payments by Tenant shall be
due at the times  provided in this lease,  and Landlord  need not wait until the
termination of this lease to recover them by legal action or in any other manner
If Landlord relets the Premises or any portion thereof, such reletting shall not
relieve Tenant of any obligation hereunder, except that Landlord shall apply the
rent or other  proceeds  actually  collected  by it for such  reletting  against
amounts  due from  Tenant  hereunder  to the  extent  such  proceeds  compensate
Landlord for non-performance of any obligation of Tenant hereunder. Landlord may
execute  any  lease  made  pursuant  hereto  in its own  name.  and  the  lessee
thereunder shall be under no obligation to see to the application by Landlord of
any  proceeds to  Landlord,  nor shall Tenant have any right to collect any such
proceeds.  Landlord  shall  not by any  re-entry  or other act be deemed to have
accepted any surrender by Tenant of the Premises or Tenant's  interest  therein.
or be deemed to have  terminated  this lease,  or to have relieved Tenant of any
obligation  hereunder,  unless  Landlord shall have given Tenant express written
notice of Landlord's election to do so as set forth herein.

     (3)Landlord may terminate this lease by express written notice to Tenant of
its  election  to do so.  Such  termination  shall  not  relieve  Tenant  of any
obligation hereunder which has accrued prior to the date of such termination. In
the event of such termination, Landlord shall be entitled to recover from Tenant
the amounts determined pursuant to paragraph (I) above.

     (b)Landlord shall be under no obligation to observe or perform any covenant
of this lease on its part to be observed or performed  which  accrues  after the
date of any default by Tenant hereunder.

     (c)In any action for unlawful detainer commenced by Landlord against Tenant
by reason of any default hereunder,  the reasonable rental value of the Premises
for the period of the unlawful detainer shall be deemed to be the amount of rent
and additional  rent reserved in this lease for such period,  unless Landlord or
Tenant shall prove to the contrary' by competent evidence.

     (d)The rights and remedies reserved to Landlord herein, including those not
specifically  described,   shall  be  cumulative,  and  except  as  provided  by
California  statutory law in effect at the time,  Landlord may pursue any or all
of such rights and remedies, at the same time or otherwise.

     (e)No delay or omission of Landlord to exercise  any right or remedy  shall
be construed as a waiver of any such right or remedy or of any default by Tenant
hereunder.  The  acceptance  by  Landlord of any rent  hereunder  shall not be a
waiver of any  preceding  breach or default by Tenant of any  provision  hereof,
other than the failure of Tenant to pay the particular rent accepted, regardless
of  Landlord's  knowledge  of such  preceding  breach or default at the time' of
acceptance of such rent, or a waiver of Landlord's  right to exercise any remedy
available to Landlord by virtue of such breach or default. The acceptance of any
payment from a debtor in possession,  a trustee,  a receiver or any other person
acting on behalf of Tenant or Tenant's  estate shall not waive or cure a default
under Section 13.01(d).

     (f)Tenant  hereby waives any right of redemption or relief from  forfeiture
under Code of Civil  Procedure  Sections 1174 and 1179, and under any present or
future  statutes or case  decisions to the same  effect,  in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any default by
Tenant hereunder.
<PAGE>
DEFAULT BY LANDLORD Section 13.03

     Landlord  shall not be deemed to be in  default in the  performance  of any
obligation  required to be  performed  by it  hereunder  unless and until it has
failed to perform such  obligation  within thirty (30) days after written notice
by Tenant to Landlord  specifying  wherein  Landlord  has failed to perform such
obligation;  provided,  however.  that if the nature of Landlord's obligation is
such that more than  thirty  (30) days are  required  for its  performance  then
Landlord  shall  not be  deemed  to be in  default  if it  shall  commence  such
performance  within  such  thirty  (30) day  period  and  thereafter  diligently
prosecute the same to completion. Tenant's remedies for Landlord's default shall
be limited to suit or action and shall not extend to  withholding  or offsetting
rent


EXPENSE
OF LITIGTION Section 13.04

     If either party incurs any expense,  including reasonable  attorneys' fees,
in connection with any action or proceeding instituted by either party by reason
of any  default  or  alleged  default of the other  party  hereunder,  the party
prevailing  in such action or  proceeding  shall be entitled to recover its said
reasonable expenses from the other party. For purposes of this provision, in any
unlawful  detainer or other action or proceeding  instituted  by Landlord  based
upon any  default or  alleged  default by Tenant  hereunder,  Landlord  shall be
deemed the  prevailing  party if (a) judgment is entered in favor of Landlord or
(b) prior to trial or judgment  Tenant  shall pay all or any portion of the rent
and charges claimed by Landlord, eliminate the condition(s), cease the act(s) or
otherwise  cure the  omission(s)  claimed by Landlord to constitute a default by
Tenant hereunder.


HOLDING OVER   Section 13.05

     If Tenant or anyone claiming under Tenant shall remain in possession of the
Premises  or any part  thereof  after  expiration  of the lease  term or earlier
termination thereof without any agreement in writing between Landlord and Tenant
with  respect  thereto,  Tenant  shall  (a)  occupy  upon all of the  terms  and
conditions  of this lease  except that the monthly  Minimum Rent due from Tenant
shall be three hundred  percent (300%) of the monthly  Minimum Rent in effect at
end of the  term,  (b) pay all  damages  Lined by  Landlord  by  reason  of such
retention  and (c)  indemnify,  defined,  and hold  landlord  harmless  from and
against any loss or liability  resulting  from such holding over. If Landlord so
notifies Tenant in writing, such holding over shall constitute a renewal of this
lease for a one year term: otherwise Landlord's  acceptance of rent shall create
only a  month-to-month  tenancy in either  case upon the terms set forth in this
Section.  Any such month-to-month  tenancy shall be terminable at the end of any
calendar  month by either  party by written  notice to the other party given not
less than ten (10) days prior to the end of such  month.  Nothing  contained  in
this Section shall be deemed or construed to waive  Landlord's  right of reentry
or any other right of Landlord hereunder or at law.

LANDLORD'S RIGHTS   Section 13.06

     All  covenants  and  agreements  to be performed by Tenant under this lease
shall be performed  by Tenant at Tenant's  sole cost and expense and without any
abatement  of rent.  If Tenant  fails to pay any sum of money,  other than rent,
required  to be paid by it or fails to  perform  any other act on its part to be
performed,  and such failure  continues  beyond any applicable  grace period set
forth in the Article providing for such obligation (or if no grace period is set
forth in such  Article,  then  the  applicable  grace  period  pursuant  to this
Article),  then in addition to any other remedies  provided herein Landlord may,
but shall not be obligated so to do,  without  waiving or releasing  Tenant from
any  obligations of Tenant,  make any such payment or perform any such other act
on Tenant's  part,  including  the removal of any  offending  signs.  Landlord's
election to make any such  payment or perform any such act on Tenant's pan shall
not give rise to any  responsibility  of Landlord to continue making the same or
similar  payments or performing the same or similar acts.  Tenant shall,  within
ten (10) days after written demand therefor by Landlord,  reimburse Landlord for
all sums so paid by Landlord and all necessary  incidental costs,  together with
interest thereon at the rate determined  under Section 16.06,  accruing from the
date of such  payment  by  Landlord  and the late  performance  charge  provided
therein:  and  Landlord  shall have the same rights and remedies in the event of
failure by Tenant to pay such  amounts as Landlord  would have in the event of a
default by Tenant in payment of rent.
<PAGE>
TRIAL WITHOUT JURY  Section 13.07

     LANDLORD AND Tenant EACH ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF COUNSEL
OF  ITS  CHOICE  WITH  RESPECT  TO  ITS  RIGHTS  TO  TRIAL  BY  JURY  UNDER  THE
CONSTITUTIONS  OF THE  UNITED  STATES  AND THE STATE OF  CALIFORNIA.  EACH PARTY
EXPRESSLY AND KNOWINGLY  WAIVES AND RELEASES ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION,  PROCEEDING,  OR  COUNTERCLAIM  BROUGHT BY EITHER PARTY  AGAINST THE
OTHER ON ANY MATTERS ARISING~F OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S
USE OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM F0R INJURY OR DAMAGE.


                                   ARTICLE XIV
                                  COMMON AREAS

DEFINITION     Section 14.01

     All areas within the exterior boundaries of the Center which are not now or
hereafter  held for exclusive  use by Landlord or by other  persons  entitled to
occupy floor space in the Center, including, without limiting the generality~ of
the foregoing,  parking areas and structures,  driveways,  truck ways,  delivery
passages,  elevators and escalators,  loading docks, sidewalks,  ramps, open and
enclosed courts and malls, landscaped and planted areas, exterior stairways, bus
stops, retaining walls, restrooms not located within the premises of any tenant,
and other areas and  improvements  provided  by  Landlord  for the common use of
Landlord  and tenants and their  respective  employees  and  invitees,  shall be
deemed  "common  areas."  Landlord may make changes at any time and from time to
time in the size, shape, location,  number and extent of the common areas or any
of them, and no such change shall entitle Tenant to any abatement of rent.

USE            Section 14.02

     Tenant and its employees  and invitees  shall be entitled to use the common
areas  during the lease term,  in common with  Landlord  and with other  persons
authorized  by  Landlord  from time to time to use such  areas,  subject to such
reasonable rules and regulations  relating to such use as Landlord may from time
to time establish.


CONTROL BY LANDLORD Section 14.03

     (a) Landlord shall operate,  manage,  equip, police,  light. repair, clean,
and  maintain  the  common  areas in such  manner  as  Landlord  may in its sole
discretion  determine  to be  appropriate.  Landlord may  temporarily  close any
common area for repairs or alterations,  to prevent a dedication  thereof or the
accrual  of  prescriptive  rights  therein.  or  for  any  other  reason  deemed
sufficient by Landlord.

     (b)Landlord  shall at all times during the term of this lease have the sole
and exclusive control of the automobile parking areas, driveways,  entrances and
exits and the sidewalks and pedestrian  passageways and other common areas,  and
may at any time and from time to time during the term hereof restrain any use or
occupancy  thereof except as authorized by the rules and regulations for the use
of such areas  established by Landlord from time to time.  Without  limiting the
generality  of the  foregoing,  Landlord  may  operate or cause to be operated a
valet  parking  service for Center  customers  in one or more  locations  in the
Center selected by Landlord, and the cost of such service shall be a common area
cost pursuant to Section 14.04.  The rights of Tenant in and to the common areas
shall at all times be subject 0 the  rights of  Landlord.  the other  tenants of
Landlord  and the other owners of stores in the Center to use the same in common
with Tenant, and Tenant shall keep said areas free and clear of any obstructions
created or permitted by Tenant or resulting from Tenant's  operation.  If in the
opinion of Landlord  unauthorized  persons are using any of said areas by reason
of the presence of Tenant in the Center, Tenant, upon demand of Landlord,  shall
restrain such unauthorized use by appropriate proceedings.  Nothing herein shall
affect the right of Landlord at any time to remove any such unauthorized  person
from  the  common  areas  or to  prohibit  the  use  of  any of  said  areas  by
unauthorized persons.

     (c)Tenant and its employees  shall park their vehicles only in such parking
areas as are from time to time  designated  for that  purpose by  Landlord.  and
Landlord may change such  designated  areas at any time upon  written  notice to
Tenant.  The areas designated for employee parking may be located on the highest
or lowest level of the Center  parking  structure  and in those  portions of the
Center most distant from the store buildings. Tenant shall furnish Landlord with
a list of its and its  employees'  vehicle  license  numbers within fifteen (15)
days after taking  possession of the Premises and Tenant shall thereafter notify
Landlord  of any change in such list  within  five (5) days  after  such  change
occurs.  Tenant agrees to assume  responsibility for compliance by its employees
with the~~parking  provisions  contained herein. If Tenant or its employees park
in other than such designated parking areas, then Landlord may charge Tenant. as
an additional  charge.  Twenty Dollars  ($20.00) per day for each day or partial
day each such  vehicle is parked in any part of the common areas other than that
designated.  Tenant  acknowledges that Landlord may tow away from the Center any
vehicle  belonging to Tenant or Tenant's  employees parked in violation of these
provisions.  and/or to attach violation stickers or notices to such vehicle. All
costs of such  towing  will be  charged to Tenant or the  employee  who owns the
towed vehicle and must be paid prior to the release of the vehicle to its owner.
<PAGE>
     Without  limiting the generality of the foregoing,  Landlord shall have the
right during the Christmas  shopping period  (Thanksgiving  day through December
31) to locate  off-site  parking  at any  location  within  two (2) miles of the
Center. to designate such off-site area as parking for Tenant's employees and to
require  Tenant's  employees to shuttle-bus  from such off-site parking areas to
the Center.  If Landlord elects to use such off-site  employee  parking.  Tenant
shall (i) park and require  Tenant's  employees to park in such off-site parking
areas and use  Landlord's  shuttle  buses for  travel to and from the Center and
(ii) pay to  Landlord,  as  additional  rent,  Tenant's  proportionate  share of
Landlord's costs incurred in using such off-site areas and providing shuttle bus
service to the Center  plus an amount  equal to  fifteen  percent  (15%) of such
costs to cover  Landlord's  overhead  and  administrative  expenses  incurred in
providing  such  service.  Tenant's  proportionate  share of such costs shall be
determined  in the manner  specified  in Section  14.05(a)  and may be billed to
Tenant either in monthly installments or a single lump sum.

     (d)In the event Landlord  elects or is required to limit or control parking
by customers or invitees of the Center, whether by validation of parking tickets
or  any  method  of  assessment,  or  any  program  for  free  or  reduced  cost
transportation,  Tenant agrees to participate in such validation.  assessment or
transportation  program under such reasonable  rules and regulations as are from
time to time established by Landlord with respect thereto.

COMMON AREA COSTS        Section 14.04

     Tenant shall pay to Landlord.  as additional  rent in the manner and at the
time provided  below,  Tenant's  proportionate  share,  as defined below, of all
costs and expenses incurred by Landlord in the operation, repair and maintenance
of the common areas during the term of this lease, including real property taxes
assessed against the Center,  Landlord's  expenses pursuant to Section 7.01 and,
if the Premises are used for other than the preparation of food, the cost of all
water and sewer service  which is not  separately  metered to individual  Center
tenants. Such costs and expenses shall include,  without limiting the generality
of the foregoing, utility costs (including costs and fees charged to Landlord in
connection  with  membership  in energy  conservation  associations  and,  as to
tenants whose use of their  Premises is other than for  preparation of food, the
cost  of all  water  and  sewer  service  which  is not  separately  metered  to
individual Center tenants),  gardening,  landscaping,  repaving.  cost of public
liability.  property damage, vandalism,  malicious mischief and other insurance,
real property  taxes (as defined in Section 5.02),  personal  property taxes and
vehicle taxes and fees,  repairs  (including repair and maintenance  pursuant to
Section 7.01),  painting.  lighting,  cleaning,  trash removal,  depreciation of
equipment,   security.  fire  protection,   and  similar  items,  together  with
Landlord's cost of purchasing.  installing and removing seasonal  decorations at
the Center, the cost of providing a management office at the Center and the cost
of providing a manager and support  staff to operate such office and the Center,
and an amount equal to fifteen  percent  (15%) of all such costs and expenses to
cover Landlord's  indirect  administrative and overhead expense.  Such costs and
expenses  shall not  include  any  allowance  for  depreciation  of common  area
improvements. or any costs or expenses attributable to the ventilating and air

<PAGE>
     conditioning of the Enclosed .11, but shall include all charges,  surcharge
and other levies of whatsoever  nature imposed by, and all costs (whether or not
capital in nature) of compliance with the requirements of, any federal. state or
local  governmental  agency  regulating  the  environmental,  health  and safety
aspects of the Center and all costs,  as  reasonably  amortized by Landlord with
interest  at the rate  determined  pursuant  to Section  16.06,  of any  capital
improvement which is reasonably calculated to reduce common area costs.


PROPORTIONATE PAYMENT  Section 14.05

     (a)Tenant's  proportionate  share of such  common  area costs shall be that
portion  thereof which the floor area of the Premises bears to the floor area of
the  premises  from time to time  leased and  occupied  by tenants in the Center
(other than the Robinson's and Broadway buildings). Tenant's proportionate share
shall be based upon the common area costs remaining after the deduction of costs
paid directly by the owners or tenants of the Robinson's and Broadway buildings.

     (b)Prior  to April 1 of each  lease  year,  Landlord  shall  give  Tenant a
written  estimate  of  Tenant's  proportionate  share of such  common area costs
(after taking into account the  contributions  referred to in (a) above) for the
ensuing fiscal year ending March 31. Tenant shall pay such  estimated  amount to
Landlord in equal  monthly  installments,  in advance.  In the event that actual
common area costs experienced  during any fiscal year shall be greater or lesser
than  the  estimates  used  by  Landlord  for   calculating   Tenant's   monthly
installments,   Landlord  may  revise  its   estimates   and  Tenant's   monthly
installments  thereof Any changes to Tenant's monthly installment payments shall
be effective with the first full calendar month  following  Tenant's  receipt of
notice from Landlord setting forth such revisions. Within ninety (90) days after
the end of each such fiscal year,  Landlord  shall furnish to Tenant a statement
showing in reasonable detail the costs and expenses incurred by Landlord for the
operation  and  maintenance  of  the  common  areas  (taking  into  account  the
contributions referred to in (a) above) during such fiscal year. and the parties
shall make any adjustment  necessary to place Tenant's  proportionate share on a
fiscal year basis. Any additional amount due from Tenant shall be paid by Tenant
to  Landlord  within  ten (10)  days  after  the  date of  Tenant's  receipt  of
Landlord's  invoice  therefor.  Any amount due Tenant shall be credited  against
installments next coming due under this Section.


                                   ARTICLE XV
                         SIGNS, LIGHTING AND ADVERTISING

PROHIBITED ACTIVITIES    Section 15.01

     Tenant shall not, without  Landlord's prior written consent,  do any of the
following:

     (a)Install  or  affix to the  exterior  of the  Premises  any  lighting  or
plumbing fixtures,  shades, awnings, or exterior decorations (including exterior
painting).

     (b) Install or affix to the  exterior  doors or windows of the  Premises or
within four feet of such doors and windows  and  visible  therefrom,  any signs.
lettering,  placards,  sign  easels or the like.  In no event  shall such signs,
lettering and placards exceed four (4) square feet in size.

     (c)  Display  or sell  merchand  ise in, or  otherwise  obstruct,  any area
outside of the Premises.

     (d) Cause or permit to be used any  advertisin g materials or methods which
are  objectionable  to  Landlord  or which  intrude  upon the  premises of other
tenants  of the  Center,  including,  without  limiting  the  generality  of the
foregoing,  loudspeakers,  phonographs, radios, television, mechanical or moving
display  devices,~unusually  bright or flashing  lights and similar  devices the
effect  of  which  may be seen,  heard  or  otherwise  experienced  outside  the
Premises.
<PAGE>
     (e)Solicit  business in the parking or other common areas,  distribute  any
hand bills or other  advertising  matter in the parking  area or in other common
areas or utilize any truck or other vehicle signs.

     (f)Use  any  sign  or  advertising  material  that  is not of  professional
quality.  For the purpose of this  Article,  the term  "exterior"  shall include
exposures on the  Enclosed  Mall.  No signs.  lighting or  advertising  shall be
permitted on any portion of the Premises  which is exposed to the parking areas.
Landlord may. without notice,  remove any materials which violate the provisions
of this Section,  and the cost of such removal shall be additional  rent payable
by Tenant upon demand. Approval or disapproval of items pursuant to clauses (a),
(b). (d) and (f) above shall be based upon the sign  criteria for the Center,  a
copy of which is attached as Exhibit "H."

MAINTENANCE  Section 15.02

     Tenant shall at all times maintain its show windows,  signs and store front
entrance floor in a neat, clean and orderly condition.  If, as to any such sign.
show window or entrance  door located on an exposure to the Enclosed Mall or the
parking  areas,  Tenant shall fail to do so within two (2) days after receipt of
written  notice  from  Landlord,  Landlord  may repair,  clean or maintain  such
exterior  sign,  show  window or  entrance  door and the cost  thereof  shall be
payable by Tenant to Landlord upon demand as additional rent.


LIGHTING DISPLAY     Section 15.03
WINDOW

     Tenant shall keep its display  windows well  lighted  during all  operating
hours of Tenant and until such reasonable time as may be fixed from time to time
by Landlord  for all of the tenants in the Center,  unless  prevented  by causes
beyond Tenant's reasonable control.

ADVERTISED NAME AND ADDRESS  Section 15.04

     Tenant shall use as its advertised  business address the words "South Coast
Plaza." Tenant shall not use the words "South Coast Plaza" for any purpose other
than as the address of the business to be  conducted by Tenant in the  Premises,
and Tenant shall not acquire any property right in or to any name which contains
said word  combination as a pan thereof Any permitted use by Tenant of the words
"South  Coast  Plaza"  during the term of this lease shall not permit  Tenant to
use, and Tenant shall not use, such words either after the  termination  of this
lease or at any other location.


ADVERTISING EXPENDITURES      Section 15.05   See Addendum

     (a)Tenant  shall spend each lease year an amount equal to not less than two
percent  (2%) or its gross  sales for such lease year on  advertising  its South
Coast Plaza location in or for magazines,  newspapers, radio, television, direct
mail advertising or other measured media providing  advertising  external to the
Center and selected by Tenant,  but providing for  distribution or dissemination
within the primary trade area of the Center For this purpose and for the purpose
of subsection  (c), the primary trade area of the Center shall be the prohibited
area described in Section 6.03 (without  reference to any typed or interlineated
changes to such Section).

     (b) Tenant shall furnish to Landlord,  together  with the annual  statement
furnished  under  Section  4.02 (b), a statement  showing  the amounts  spent by
Tenant on advertising  its South Coast Plaza  location as above provided  during
the preceding  lease year.  In the event it shall appear from such  statement or
from an audit of such  statement  that Tenant has expended for such  advertising
less than the  required  two  percent  (2%) of gross  sales as herein  provided.
Tenant shall pay the difference  between the amount  actually  expended for such
advertising  and two percent (2%) of Tenant's gross sales for such lease year to
the  promotional  fund  provided for in Section  16.15 within  thirty (30) day's
After demand is made therefor by Landlord.
<PAGE>
     (c)In  addition to Tenant's  annual  advertising  requirement set forth in
this Section,  Tenant shall expend on  advertising  appearing  during the period
from thirty (30) days prior to thirty (30) days  subsequent to the date on which
Tenant opens the Premises for business an amount equal to two (2) months initial
Minimum Rent. Such expenditures shall be limited to advertisements promoting the
opening of the  Premises,  any such media shall be as selected by Tenant and any
such media shall be distributed or disseminated in the primary trade area of the
Center. The first statement submitted by Tenant pursuant to subsection (b) above
shall  separately  set forth the  amount  expended  by Tenant  pursuant  to this
subsection  (c), and if Tenant  shall fail to spend the amount  required by this
subsection.  then Tenant shall pay the difference between the amount required to
be spent  hereunder and the amount  actually spent by Tenant to the  promotional
fund  provided for in Section 16.15 within thirty (30) days after demand is made
therefor by Landlord.

USE OF
PRIVATE CREDIT CARD Section 15.06 See Addendum

     Landlord has made  arrangements  with a financial  institution (the "Bank")
for the Bank to establish and maintain a private credit card program pursuant to
which  cardholders  may charge  purchases  from  participating  merchants at the
Center (the  "Program ").  Within thirty (30) days after the delivery of a fully
executed copy of this lease to Tenant, Tenant shall complete. and deliver to the
Bank an  applicatio  n to  become  a  participant  in the  Program.  Subject  to
acceptance by the Bank of such application, Tenant shall become and shall at all
times  during  the term of this lease  remain a  participating  merchant  in the
Program.  Tenant shall comply with all  requirements  established,  from time to
time,  by the Bank for  merchants  participating  in the Program.  Tenant shall,
subject to  requirements  established by the Bank with respect  thereto,  accept
credit card  charges  from  Program  cardholders  at the  Premises and shall not
accept such charges at any other location of Tenant.  Nothing  contained  herein
shall constitute a representation by Landlord that the Bank will accept Tenant's
application or will continue the Program or Tenant's  participation  therein for
any period of time. Tenant acknowledges that the Program is owned and controlled
solely  by the Bank and that  Landlord  has no  financial  interest  therein  or
control thereof.

CATALOG ADVERTISING Section 15.07  See Addendum

         Tenant shall  purchase  advertisements  of its location in the Premises
(only) in each of the two (2) seasonal brochures (Christmas and Spring) prepared
and  disseminated  annually  through  the  promotional  fund.  The  size of such
advertisements  shall be as  selected by Tenant and the costs  thereof  shall be
established by Landlord.  Nothing herein shall require  Landlord to continue the
preparation and distribution of such seasonal brochures.

SIGNS ON EXTERIOR FASCIA      Section  15.08

     Tenant  acknowledges  that it has been  advised by  Landlord  that the sign
criteria  for  the  Center  and  the  ordinances  of  the  City  of  Costa  Mesa
substantially  restrict  signs on the exterior  fascia of the Center (i.e.,  the
exterior of Center common areas). Accordingly, Tenant acknowledges that Landlord
has  informed  Tenant that Tenant may not place any sign on the  exterior of the
Center and Tenant  agrees to comply  with such  restriction.  Nothing  contained
herein,  however,  shall be deemed or construed to preclude  Tenant's  signs (in
conformity  with the  provisions  of  Exhibits  "C," "E" and "H"  hereto) on the
exterior of the Premises fronting onto the Enclosed Mall.


<PAGE>
                                   ARTICLE XVI
                                  MISCELLANEOUS

OFFSET STATEMENT    Section 16.01

     (a)  Tenant  shall a: any time  and from  time to time  upon not less  than
twenty (20) days' prior written notice from Landlord  execute,  acknowle dge and
deliver to Landlord a statement  in writing  (i)  certifying  that this lease is
unmodifie d and in full force and effect (or, if modified, stating the nature of
such  modification  and certifying that this lease,  as so modified.  is in full
force and effect) and the dates to which the Minimum  Rent and  additional  rent
are paid in advance.  if any, (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed and (iii)  acknowledging (if true) the accuracy
of such other facts as are  included in such  statement  by  Landlord.  Any such
statement may be relied upon by any prospective purchaser or encumbrancer of the
Premises or of all or any portion of the real property of which the Premises are
a pan. 

     (b) Tenant's  failure to deliver such  statement  within such time shall be
conclusive upon Tenant (i) that this lease is in full force and effect,  without
modification  except as may be represented  by Landlord,  (ii) that there are no
uncured defaults in Landlord's performance, (iii) that not more than one month's
Minimum Rent has been paid in advance and (iv) that any other statements of fact
included by Landlord in the  statement  are correct.  

     (c) Tenant shall be liable for all loss, cost or expense resulting from the
failure of any sale or funding of any loan caused by any  material  misstatement
contained in any estoppel  certificate  supplied by Tenant.  Tenant  irrevocably
appoints Landlord as  attorney-in-fact  for Tenant with full power and authority
to execute and deliver in the name of Tenant any estoppel  certificate if Tenant
fails  to  deliver  the same  within  such  twenty  (20)  day  period,  and such
certificate, as signed by Landlord, shall be binding on Tenant.


LANDLORD'S RIGHT OF ACCESS    Section 16.02

     Landlord  and its agents  shall have the right (a) to enter the Premises at
all  reasonable  times for the purpose of  examining or  inspecting  the same to
ascertain  if  they  are in  good  repair,  making  such  alterations,  repairs,
improvements  or  additions  to the  Premises  as  Landlord  may be  required or
permitted to make hereunder,  exhibiting the same to prospective  purchasers and
lenders and posting notices which Landlord may deem necessary for its protection
and (b) at any time in an emergency.  During the six (6) months prior to the end
of the term of this lease (and during any period  during which Tenant is holding
over with or without the consent of Landlord),  Landlord may post the usual "for
rent" or "for  lease"  signs.  Tenant  shall not  disturb  such  signs and shall
cooperate  with  Landlord in  exhibiting  the Premises to  prospective  tenants.
Access by Landlord  hereunder shall not, under the  circumstances,  unreasonably
interfere with Tenant's use and enjoyment of the Premises, and Tenant waives any
claim for  damages  for any  injury or  inconvenience  to or  interference  with
Tenant's  business,  occupancy~' or quiet enjoyment arising out of any permitted
entry by Landlord.  Tenant  acknowledges that Landlord shall not retain a key to
the Premises and may, in any emergency~'  enter the Premises in any manner which
Landlord reasonably determines to be necessary, without

                                              25

<PAGE>
     liability therefor to Tenant. No entry by Landlord pursuant to this Section
shall be deemed to  constitute  an eviction of Tenant or a forcible  detainer of
the Premises.


TRANSFER OF LANDLORD'S INTEREST    Section 16.03

     In the event of any  transfer or transfers  of  Landlord's  interest in the
Premises,  the  transferor  shall  be  automatically  relieved  of any  and  all
obligations and liabilities on the part of Landlord  accruing from and after the
date of such transfer.

FLOOR AREA     Section 2.02.

     "Floor Area" as used in this lease means,  with respect to the Premises and
with respect to each store separately leased. the aggregate of (a) the number of
square feet of floor space on all floor levels,  including mezzanines,  measured
from the center line of party walls  between  tenant areas and the exterior face
of all other  walls,  and (b) all  outside  selling  areas  used for the sale of
merchandise by tenants.  No deduction or exclusion from Floor Area shall be made
by  reason  of  columns,  stairs,  elevators,   escalators,  or  other  interior
construction or equipment. Landlord may, at any time and from time to time, make
changes or  additions  to the Center  which result in an increase or decrease in
the  aggregate  Floor Area  occupied or designed for occupancy by tenants of the
Center;  provided,  that.  except as provided herein, no such change or addition
shall increase or decrease the Floor Area of the Premises without Tenant's prior
consent. 

     Landlord shall,  upon completion of tenant's Work, cause the Premises to be
remeasured by Landlord's  architect in  accordance  with the  provisions of this
Section and shall include the Floor Area of the Premises as so determined in the
supplemental  agreement as to the Rent Commencement Date provided for in  In the

                                              25

<PAGE>
     event that the Floor Area of t~ "remises as so determined is greater or le~
- than mat set forth in the applicable  Fundamental  Lease  Provision,  Landlord
shall,  effective as of the Rent  Commencement  Date, adjust the monthly Minimum
Rent  (based  upon  the  per  square  root  rate  set  forth  in the  applicable
Fundamental  Lease Provision) and all item~. of additional rent based upon Floor
Area (based upon the applicable  charge rates in effect at the Rent Commencement
Date),  and shall  supply to Tenant a statement  setting  forth,  in  reasonable
detail, such adjustments. Subsequent to the Rent Commencement Date, Tenant shall
pay monthly  Minimum Rent based upon such  adjusted  Floor Area and all items of
additional rent based upon Floor Area in the adjusted  amounts set forth in such
statement.

DEPOSITS FINANCIAL STATEMENTS

     (a) Tenant has deposited  with Landlord the sum specified in the applicable
Fundamenta l Lease  Provision as security for the full and faithful  performance
of every  provision of this lease to be performed by Tenant.  If tenant defaults
with respect to any  provisions of this lease,  including but not limited to the
provisions  relating to the payment of rent,  Landlord may use,  apply or retain
all or any part of this  security  deposit  for the payment of any rent or other
sum in default,  or for the payment of any other amount which Landlord may spend
or become  obligated to spend. by reason of Tenant's  default,  or to compensate
Landlord  for any other loss or damage  which  Landlord  may suffer by reason of
Tenant's default.  If any portion of said deposit is so used or applied,  Tenant
shall within five(S) days after receipt of written demand therefor  deposit cash
with  Landlord in an amount  sufficient  to restore the security  deposit to its
original amount and Tenant's failure to do so shall be a material breach of this
lease.  Landlord  shall not be required to keep this security  deposit  separate
from its  general  funds,  and Tenant  shall not be entitled to interest on such
deposit.  If Tenant shall fully and faithfully  perform every  provision of this
lease to be performed by it, the security  deposit shall be applied  against any
amounts  owed by Tenant to Landlord at the  expiration  or  termination  of this
Lease and any balance  thereof  shall be  returned  to Tenant (or at  Landlord's
option,  to the last assignee of Tenant's  interest  hereunder)  within the time
specified in Civil Code Section 1950.7.  

     (b) Tenant shall, prior to or upon its execution and delivery of this lease
to Landlord,  provide to Landlord current financial statements  consisting of at
least (a) a balance  sheet of Tenant as of a date within  ninety (90) days prior
to  Tenant's  execution  of this  lease%t,  (b) an  income  or  profit  and loss
statement of tenant for its last full fiscal year and (c) if Tenant's  last full
fiscal  year ends  more than  ninety  (90)  days  prior to the date of  Tenant's
execution.  of this lease,  a profit and loss  statement for the period from the
end of such last full fiscal year to a date within ninety (90) days prior to the
date of Tenant's  execution  of this lease.  If such  financial  statements  are
audited  or  reviewed  by  an  independent  public  accountant,  such  financial
statements shall be accompanied by the letter or certificate of such accountant.
Otherwise.  such  financial  statements  shall be  accompanied  by a certificate
executed by Tenant or Tenant's  chief  financial  officer  certifying  as to the
accuracy and completeness of such financial statements. 

     (c) Tenant has deposited  with Landlord the sum specified in the applicable
Fundamental  Lease Provision as an opening deposit (the "Opening  Deposit").  If
Tenant shall not then be in default under any of the terms or conditions of this
lease,  the Opening  Deposit,  less any portion  thereof  applied or retained by
Landlord  as provided  herein..  shall be  returned  without  interest to Tenant
within thirty (30) days after Tenant opens the Premises for  business.  Landlord
shall have the right to retain a portion of the  Opening  Deposit as  liquidated
damages as follows:  (i) fifteen  percent (15%) of the Opening Deposit if Tenant
fails to schedule the  preliminary  design  meeting (the "PDM")  within the time
period  provided in Section  17.02(a) or,  after  scheduling  the PDM,  fails to
attend the same;  (ii) twenty  percent  (20%) of the  Opening  Deposit if Tenant
fails to deliver to Landlord the preliminary  plans required by Section 17.03(a)
within thirty (30) days after the PDM; (iii) twenty percent (20%) of the Opening
Deposit if Tenant fails to deliver to Landlord the working drawings  required by
Section  17.03(b)  within  thirty (30) days after  approval  of the  preliminary
plans: and (iv) forty-five  percent (45%) of the Opening Deposit If tenant fails
to open the  Premises  for  business  on or before  the Rent  Commencement  Date
specified in  the~~applicable  Fundamental Lease Provision.  
<PAGE>
     Landlord  shall also have the right to apply the  Opening  Deposit,  or any
portion  thereof,  against any  amounts  due from Tenant to Landlord  hereunder.
Tenant's  payment of the Opening  Deposit shall not limit  Tenant's  obligations
hereunder.  Landlord's retention of the Opening Deposit, or any portion thereof,
as liquidated  damages shall not, in and of itself,  be deemed a termination  of
this lease by Landlord.  Tenant's  failure to meet any date provided for in this
subsection  shall  also be  deemed  an  event of  default  by  Tenant  hereunder
entitling  Landlord to exercise all remedies  available to a landlord  against a
defaulting  tenant  pursuant to a written  lease,  including  but not limited to
those set forth in Article XIII of this lease.

LATE PAYMENTS AND DELIVERIES  Section 16.06 See Addendum 

     (a) Any amount due from Tenant to Landlord  hereunder  which is not paid to
Landlord  when due shall bear  interest  at the maximum  rate of  interest  then
permitted by the applicable usury law, accruing from the date due until the same
is fully paid.  Payment of such interest shall not excuse or cure any default by
Tenant pursuant to this Lease.

     (b) TENANT ACKNOWLEDGES THAT THE LATE PAYMENT BY TENANT TO LANDLORD OF RENT
AND OTHER SUMS DUE  HEREUNDER  AND THE  FAILURE  TO DELIVER ON TIME GROSS  SALES
REPORTS AND OTHER ITEMS  REQUIRED TO BE DELIVERED  WILL CAUSE  LANDLORD TO INCUR
COSTS  NOT  CONTEMPLATED  BY THIS  LEASE,  THE  EXACT  AMOUNT  OF WHICH  WILL BE
EXTREMELY DIFFICULT TOP ASCERTAIN SUCH COSTS MAY INCLUDE, BUT ARE NOT LIMITED TO
ADMINISTRATIVE.  PROC SING AND  ACCOUNTING  CHARGES ND LATE CHARGES WHICH MAY BE
IMPOSED ON  LANDLORD  BY THE TERMS OF ANY  ENCUMBRANCE  COVERING  THE  PREMISES.
ACCORDINGLY,  IF ANY SUM DUE FROM TENANT, ANY GROSS SALES REPORT DUE FROM TENANT
OR ANY OTHER ITEM DUE FROM TENANT HEREUNDER SHALL NOT HE RECEIVED BY LANDLORD OR
LANDLORD'S DESIGNEE WITHIN FIVE (5) DAYS AFTER THE DATE DUE, TENANT SHALL PAY TO
LANDLORD, IN ADDITION TO ANY INTEREST ON DELINQUENT AMOUNTS  PROVIDED.:ABOVE,  A
LATE CHARGE EQUAL TO THE GREATER OF TWO PERCENT (2%) OF THE DELINQUENT AMOUNT OR
(pound)100.00,  AS LIQUIDATED  DAMAGES.  THE PARTIES AGREE THAT SUCH LATE CHARGE
REPRESENTS A FAIR AND  REASONABLE  ESTIMATE OF THE COST  LANDLORD  WILL INCUR BY
REASON OF LATE  PAYMENT  OR LATE  DELIVERY  BY TENANT.  ACCEPTANCE  OF SUCH LATE
CHARGE SHALL NOT  CONSTITUTE  A WAIVER OF TENANT'S  DEFAULT WITH RESPECT TO SUCH
OVERDUE  AMOUNT OR OTHER  ITEM.  NOR  PREVENT L LORD FROM  EXERCISING  ANY OTHER
RIGHTS AND REMEDIES GRANTED  HEREUNDER Y LAW TO LANDLORD~~  Landlord's  Initials
Tenant's Initials

     (c) If Tenant shall, during any six (6) month period, be more than ten (10)
days  delinquent  in the payment of any rent or other  amount  payable by Tenant
hereunder on three (3) or more occasions then,  notwithstanding  anything herein
to the  contrary,  Landlord may, by written  notice to Tenant,  elect to require
Tenant to pay all Minimum Rent and additional rent payable  hereunder  quarterly
in advance.  Such right of  Landlord  shall be in addition to and not in lieu of
any other right or remedy  available to Landlord  hereunder or at law on account
of Tenant's default hereunder.

SEPARABILITY   Section 16.07

     Any  provision  of this lease  which  shall  prove to be  invalid,  void or
illegal shall in no way affect,  impair or invalidate any other provision hereof
and such  remaining  provisions  shall remain in full force and effect.  Section
16.07  

TIME OF ESSENCE     Section  16.08 

     Time is of the essence with respect to the  performance of every  provision
of this lease in which time of performance is a factor.

HEADINGS       Section 16.09

     The  article  and  section  captions   contained  in  this  lease  are  for
convenience   only  and  shall  not  be  considered  in  the   construction   or
interpretation of any provision hereof

<PAGE>
INCORPORATION or PRIOR AGREEMENTS: AMENDMENTS     Section 16.10

     This lease and the exhibits hereto cover in full each and every'  agreement
of every kind or nature  whatsoever  between the parties  hereto  concerning the
Premises and the Center,  and all  preliminary  negotiations  and  agreements of
whatsoever  kind with  respect  to the  Premises  or the  Center,  except  those
contained  herein,  are superseded and of no further force or effect. No person,
firm or corporation  has at any time had any  authority~'  from Landlord to make
any  representations  or promises on behalf of  Landlord,  and Tenant  expressly
agrees that if any such  representations  or promises have been made by Landlord
or others,  Tenant hereby waives all right to rely thereon.  No verbal agreement
or implied  covenant shall be held to vary the provisions  hereof,  any statute,
law, or custom to the contrary  notwithstanding.  No provision of this lease may
be amended or added to except by an agreement  in writing  signed by the parties
hereto or their  respective  successors  in  interest.  No  employee or agent of
Landlord  shall  have  authority.   by  letter,   memorandum  or  other  written
communication,  to amend,  vary or delete  any  provision  of this  lease or any
exhibit hereto, unless such written instrument bears the signature of Landlord's
managing general partner. 

NOTICES        Section 16.11
               
     Any notice,  consent or approval  ("Notice")  required or  permitted  to be
given hereunder shall be in writing and may be served  personally or by mail; if
served by mail it shall be addressed as specified in the applicable  Fundamental
Lease  Provision.  Any notice to Tenant may, after Tenant opens the Premises for
business, be sent instead to it at the Premises.  Any notice which is personally
served shall be effective upon service; any notice given by mail shall be deemed
effectively  given,  if  deposited  in the  United  States  mail in the State of
California,  registered  or certified  with return  receipt  requested,  postage
prepaid and  addressed  to the  Premises  (for  Tenant) or as  specified  in the
applicable  Basic  Lease  Provision,   on  the  date  of  receipt,   refusal  or
non-delivery  indicated on the return receipt.  Provided,  however.  that in the
event of a postal strike. the parties shall use telex,  telegram or other method
of notice reasonably calculated to assure delivery.  Either party may by written
notice to the other from time to time  specify a  different  address  for notice
purposes. 
<PAGE>
BROKERS        Section 16.12

     Tenant  warrants that it has had no dealings with any real estate broker or
agent in connection with the  negotiation of this lease.  except as specifically
stated to the  contrary  in the  applicable  Fundamental  Lease  Provision,  and
expressly agrees and~ covenants to hold Landlord harmless and to defend Landlord
from any claims, threatened or asserted, by any broker, finder or agent claiming
under or through Tenant in connection with the negotiation and execution of this
lease.  Any  broker or finder  specified  in the  applicable  Fundamental  Lease
Provision  shall  be paid by  Landlord  but only in such  amount(s)  and at such
time(s)  as shall be agreed  upon in  writing  by  Landlord  and such  broker or
finder. Payment of any broker or finder claiming through Tenant shall, except as
set forth in the immediately  preceding sentence.  be the sole responsibility of
Tenant.

WAIVERS        Section 16.13
               
     No waiver  of any  provision  hereof  shall be deemed a waiver of any other
provision hereof. Consent to or approval of any act by one of the parties hereto
shall not be deemed to render  unnecessary the obtaining of such party's consent
to or approval of any subsequent act.  Failure of Landlord to take any action or
send any  notice to Tenant  shall  not be  deemed a waiver  by  Landlord  of any
failure by Tenant to timely and  properly  exercise an option  granted to Tenant
pursuant to this lease or any  amendment  hereto.  Any such option  which is not
exercised  within  the time  and in the  manner  specified  for  exercise  shall
automatically lapse without requirement of any action by Landlord.

RECORDING      Section 16.14

     Tenant  shall not record this lease  without the prior  written  consent of
Landlord.  Tenant, upon the request of Landlord, shall execute,  acknowledge and
deliver a "short form" memorandum of this lease for recording purposes.


PROMOTIONAL FUND         Section 16.15

     (a) Landlord  shall  establish an  advertising  and  promotional  fund (the
"Fund") to furnish and maintain professional group advertising, sales promotions
and other activities for the promotion and benefit of all  contributing  tenants
of the Shopping Center.

     (b) Tenant shall contribute to the Fund an annual amount per square foot of
Floor Area as specified in the applicable  Fundamental  Lease Provision,  but in
any event not less than  $1,000.  Tenant's  contributions  to the Fund  shall be
Additional  Rent  pursuant  to this  lease,  and  failure  of  Tenant to pay any
required  contribution  to the Fund as and when due  shall be  deemed a  default
under this lease  entitling  Landlord to exercise  all  remedies  available to a
landlord against a defaulting tenant,  including those set forth in Article XIII
hereof.  Such  contribution  shall be payable in equal monthly  installments  in
advance at the same times as Minimum Rent payments are due.

     (c) Tenant's  initial  contribution may be adjusted at the end of any lease
year after Tenant first  becomes  obligated to contribute to the Fund to reflect
any change in the cost of operating the Fund. The adjustment shall be calculated
using a percentage equal to the percentage increase in the electronic, print and
outdoor  advertising  rates of the media  used for  advertising  and  promotions
during  the just  ended  lease  year in the media  market in which the Center is
located.  In no event shall Tenant's  required  annual  contribution to the Fund
after any such  adjustment be less than Tenant's  required  annual  contribution
immediately  prior to such adjustment,  and in no event shall Tenant's  required
annual  contribution  after any such adjustment exceed 110% of Tenant's required
annual  contribution  immediately  prior  to  such  adjustment,  notwithstanding
increases  or  decreases  in  the  cost  of  such  media  advertising  as of any
adjustment  date which would justify a larger increase or a decrease in Tenant's
required annual  contribution.  For the purposes of each adjustment  pursuant to
this subsection,  the lease year ending on the relevant adjustment date shall be
the comparison year and the immediately  prior lease year shall be the base year
for purposes of comparing media costs.  
<PAGE>
     (d)  Landlord  agrees to  contribute  to the Fund each lease year an amount
equal to twenty-five percent (25%) of the aggregate  contributions of tenants of
the Center to the Fund,  provided that  Landlord's  contribution to the Fund for
any lease year shall not exceed  $16,000.  

     (e) Landlord shall have the exclusive right to hire a promotional director,
secretary and other personnel who, in Landlord's sole judgment,  are required to
carry  out the  purposes  of the  Fund.  MI such  personnel  shall be under  the
exclusive control and supervision of Landlord, who shall have the sole authority
and  responsibility  to hire and discharge such personnel and to determine their
compensation and benefits.  Landlord shall have the sole authority to direct the
performance by such personnel of their activities, including but not limited to,
placement of  advertising,  scheduling of  promotional  events and attendance at
trade or industry  conventions.  

     (f)  Landlord  shall have the right to select a  committee,  composed  of a
representative of Landlord and not more than four (4) representatives of tenants
at the Center,  to render advice to Landlord in connection with  promotional and
advertising  activities  conducted  through the Fund. MI such committee  members
shall be  selected  to and shall serve at the  pleasure  of  landlord.  The sole
function  of such  committee  shall be to render  advice when and ii required by
Landlord.  and such  committee  shall have no  approval  or consent  rights with
respect to Landlord'! decisions concerning the use of the Fund. Tenant agrees to
serve or to cause  its  manager  to serve as a member  of such  committee  if so
requested by Landlord. 

     (g) Nothing  contained  herein shall require  Landlord to spend more in any
lease  year  in  operating   the  Fund  than   Landlord   collects  from  tenant
contributions to the Fund plus Landlord's contribution specified above. Landlord
may  charge  all costs and  expenses  or  operating  the Fund in any lease  year
against  the  budget  therefor.  Said costs and  expenses  may  include  without
limitation the following.
  
     (i)the  services  of a  promotional  director  and all  staff  and  outside
consultants  (including  professional  marketing service  organizations)  deemed
necessary  by  Landlord  to carry  out  effectively  the  purposes  of the Fund,
including without limitation all payroll, payroll taxes and employee benefits of
any such  director  and staff:  

     (ii)such  reasonable  amount of space within the Center or elsewhere as may
be necessary to operate the Fund,  the rental  therefor to be  comparable to the
rentals for similarly sized tenant spaces in the Center;  

     (iii) all actual costs  incurred in  advertising  and promoting the Center,
including without limitation radio, newspaper,  television.  direct and indirect
costs of services,  artwork, copy, printing, paper, stationery and supplies: and

     (iv) such  office  equipment,  utilities  and  telephones  as may be deemed
necessary  by  the  promotional  director  

     (h)In addition to Tenant's annual  contributions to the Fund,  Tenant shall
also pay to Landlord upon execution of this lease an initial  advertising charge
in an amount equal to Tenant's  initial annual  contribution  to the Fund.  Such
initial  advertising  charge  shall  be used by  Landlord  for  advertising  and
promotional activities with respect to the opening of the Center.


LIENS     Section 16.16

     Tenant  shall do all things  reasonably  necessary to prevent the filing of
any  mechanics'  or other liens against the Center or any part thereof by reason
of work, labor,  services or materials supplied or claimed to have been supplied
to Tenant, or anyone holding the Premises, or any pan thereof,  through or under
Tenant.  If any such lien shall at any time be filed against the Center,  Tenant
shall either cause the same to be  discharged  of record within twenty (20) days

<PAGE>
after the date of filing of the same or, if Tenant in Tenant's discretion and in
good faith  determines  that such lien should be  contested,  shall furnish such
security  as  may be  necessary  or  required  to (i)  prevent  any  foreclosure
proceedings  against the Center  during the pendency of such  contest,  and (ii)
cause Ticor Title Insurance Company of California or other mutually satisfactory
title company to remove such lien as a matter affecting title to the Center on a
title report or title  policy  issued with respect to the Center If Tenant shall
fail to discharge such lien within such period or fail to furnish such security.
then,  in  addition  to any other  right or remedy of  Landlord  resulting  from
Tenant's  said default,  Landlord may, but shall not be obligated to,  discharge
the same  either by paying the  amount  claimed  to be due or by  procuring  the
discharge of such lien by giving  security or in such other manner as is, or may
be.  prescribed  by law.  Tenant  shall repay to Landlord,  on demand,  all sums
disbursed or deposited by Landlord pursuant to the foregoing  provisions of this
Section 16.16,  including Landlord's costs,  expenses and reasonable  attorneys'
fees  incurred  in  connection  therewith,  with  interest  thereon  at the rate
determined  pursuant to Section 16.06.  Nothing contained herein shall imply any
consent or  agreement  on the pan of  Landlord to subject  Landlord's  estate to
liability  under any  mechanics'  or other lien law.  Tenant shall give Landlord
adequate  opportunity  and Landlord shall have the right to post such notices of
non-responsibility   as  are  provided  for  in  the  mechanics'  lien  laws  of
California.


SUBORDINATION       Section 16.17

     This lease shall, at Landlord's  option,  be either superior or subordinate
to any  mortgage or deed of trust that may exist or hereafter be placed upon the
Center or any pan thereof and to any and all advances to be made  thereunder and
to the  interest  thereon  and  to all  renewals,  replacements  and  extensions
thereof.  Tenant  shall,  upon  written  demand by  Landlord,  (a) execute  such
instruments  as may be required at any time and from time to time to subordinate
the  rights  and  interests  of Tenant  under this lease to the lien of any such
mortgage or deed-n:.trust, or, if requested by Landlord. to subordinate any such
mortgage  or  deed of  trust  to  this  lease  and  (b)  supply  such  financial
information  concerning  Tenant  as may be  requested  by any  ground  lessor or
lender.  Provided,  however, that tenant shalt, in the event any proceedings are
brought for the  termination of such ground lease or the foreclosure of any such
mortgage  or deed of  trust,  attorn to the  ground  lessor  or  purchaser  upon
foreclosure  sale or sale under power of sale,  and shall  recognize such ground
lessor or purchaser as Landlord under this lease,  and, so long as Tenant is not
in default  hereunder,  such termination or foreclosure shall not terminate this
lease or otherwise affect Tenant's rights hereunder

TENANT'S AUTHORITY  Section 16.18

     Each  individual  executing  this lease on behalf of Tenant  represents and
warrants  that the  execution  and delivery of this lease on behalf of Tenant is
duly  authorized  and that he or she is  authorized  to execute and deliver this
lease on behalf of Tenant. If Tenant is a corporation,  Tenant shall, within ten
(10) days after execution of this lease, deliver to Landlord a certified copy of
a resolution of Tenant's board of directors or the executive  committee  thereof
authorizing  or  ratifying  the  execution  of this lease.  Failure of Tenant to
provide such resolution  shall not,  however,  relieve Tenant of its obligations
pursuant to this lease.
<PAGE>

SAFETY AND HEALTH   Section  16.19  

     Tenant  covenan ts at all times during the term of the lease to comply with
the require ments of the Occupat  ional Safety and Health Act of 1970,29  U.S.C.
Section 651 ci seq.  and any analogo us  legislati  on in Californ ia  (collecti
vely,  the "Act"),  to the extent that the Act applies to the  Premises  and any
activities  thereon.  Without  limiting the generality of the foregoing,  Tenant
covenants to maintain all working areas,  all machinery,  structure,  electrical
facilities  and the like upon the  Premises in a condition  that fully  complies
with  the  requirements  of the Act,  including  such  requirements  as would be
applicable with respect to agents,  employees or contractors  of~p,:1~rd who may
from time to time be present upon the  Premises,  and Tenant agrees to indemnify
and bold harmless Landlord from any liabilities.  claims or damages arising as a
result of a breach of the  foregoing  covenant and from all costs,  expenses and
charges arising therefrom  including.  without  limitation,  attorneys' fees and
court costs incurred by Landlord in connection therewith.  which indemnity shall
survive the expiration or termination of this lease.

INDEMNITIES               Section 16.20

     The   obligations   of  the   indemnifying   party  under  each  and  every
indemnification  and hold  harmless  provision  contained  in this  lease  shall
survive the  expiration  or earlier  termination  of this lease to and until the
last to occur of (a) the last  date  permitted  by law for the  bringing  of any
claim or action  with  respect  to which  indemnification  may be claimed by the
indemnified party against the indemnifying party under such provision or (b) the
date on which any claim or action for which indemnification may be claimed under
such provision is fully and finally resolved and, if applicable,  any compromise
thereof or judgment or award thereon is paid in full by the  indemnifying  party
and the  indemnified  party is  reimbursed  by the  indemnifying  party  for any
amounts paid by the indemnified party in compromise  therefor upon a judgment or
award  thereon  and in defense  of such  action or claim,  including  reasonable
attorneys' fees incurred.

    
NONDISCLOSURE OF LEASE TERMS     Section 16.21

     Landlord and Tenant agree that the terms of this lease are confidential and
constitute  proprietary  information  of the parties  hereto.  Disclosure of the
terms hereof could  adversely  affect the ability of Landlord to negotiate  with
other  tenants of the Center.  Each of the panics hereto agrees that such party,
and  its  respective  partners,  officers,  directors.   employees.  agents  and
attorneys,  shall not  disclose  the terms and  conditions  of this lease to any
other person without the prior written  consent of the other party hereto except
pursuant to an order of a court of competent  jurisdiction.  Provided,  however,
that  Landlord  may  disclose  the terms  hereof to any lender now or  hereafter
having a lien on Landlord's interest in the Center, or any portion thereof,  and
either  party may  disclose  the  terms  hereof  to its  respective  independent
accountants  who review its  respecti  ve  financial  stateme nts or prepare its
respecti ve tax returns,  to any prospect ive transfere e of all or any portions
of their respecti ve interests  hereund er (includi ng a prospect ive sublesse e
or assignee of Tenant),  to any lender or prospect ive lender to such party,  to
any  governmental  entity.  agency or person to whom  disclosure  is required by
applicable law,  regulation or duty of diligent  inquiry' and in connection with
any action brought to enforce the terms of this lease,  on account of the breach
or alleged  breach hereof or to seek a judicial  determination  of the rights or
obligations of the panics hereunder.
<PAGE>
GENDER; TENANTS     Section 16.22 

     The use of the masculine  pronoun includes the feminine and neuter genders;
the use of the singular form of a pronoun includes the plural and vice-versa. If
there be more than one person or entity indicated as Tenant herein.  each person
or entity  subscribing as a Tenant shall be jointly and severally liable for all
obligations  of Tenant  hereunder.  Subject to the  provisions of Article X, the
terms, conditions and covenants contained herein shall ne binding upon and inure
to the  benefit of the heirs,  successors,  executors,  administrators,  marital
communities, if any, and assigns of the parties hereto.


FORCE MAJEURE       Section 16.23

     In the event that either  Landlord or Tenant is delayed in  performing  any
obligation of Landlord or Tenant  pursuant to this lease by any cause beyond the
reasonable  control of the party required to perform such  obligation,  the time
period for  performing  such  obligation  shall be  extended by a period of time
equal to the period of the delay.  For the purpose of this  Section:  

     (a)A cause shall be beyond the reasonable  control of a party to this lease
when such cause  would  affect any person  similarly  situated  (such as a power
outage, labor strike or truckers' strike) but shall not be beyond the reasonable
control of such party when  peculiar to such party (such as financial  inability
or failure to order long lead time materials  sufficiently in advance).  

     (b)This Section shall not apply to any obligation to pay money or delay the
Rent Commencement Date. 

     (c)In the event of any  occurrence  which a party  believes  constitutes  a
cause  beyond  the  reasonable  control  of such  party and which will delay any
performance by such party hereunder, such party shall promptly in writing notify
the other  party of the  occurrence  and nature of such cause,  the  anticipated
period of delay and the steps being taken by such party to mitigate  the effects
of such delay

YIELD UP    Section 16.24
PREMISES 

     At the  expiration  or earlier  termination  of this  lease,  Tenant  shall
peaceably  yield  up the  Premises  and all  additions  made  upon  the  same to
Landlord, in first class condition and shall execute, acknowledge and deliver to
Landlord. within five (5) days after written demand from Landlord to Tenant, any
quitclaim  deed or other  document  which  may be  reasonably  requested  by any
reputable title company to remove this lease as a matter  affecting title to the
Premises.



RELOCATION OF TENANT          Section 16.25

     Landlord.  at its sole expense. on at least 90 days prior written notice at
any time during the term,  may require Tenant to move from the Premises to other
space of comparable  size and decor in order to permit  Landlord to  consolidate
the space leased to Tenant with other  adjoining space leased or to be leased to
another  tenant.  Provided.  however.  that in the event of  receipt of any such
notice, Tenant by written notice to Landlord given within twenty (20) days after
receipt of  Landlord's  notice  may elect not to move to the other  space and in
lieu  thereof to terminate  this lease,  effective 60 days after the date of the
original notice of relocation by Landlord.  In the event of any such relocation,
Landlord will pay all expenses of preparing and  decorating  the new premises so
that they will be  substantially  similar to the Premises and Landlord will also
pay the  expense of  moving~g  Tenant's  trade  fixtures  and  equipment  to the
relocated  premises.  In such  event  this  Lease and each and all of the terms,
covenants  and  conditions  hereof  shall  remain in full  force and  effect and
thereupon be deemed  applicable to such new space except that: (a)The applicable
Fundamental Lease Provisions shall be revised and substituted to reflect the new
premises.  any change in Floor  Area and any  changes  in the  Minimum  Rent and
additional  rent,  effective  as of the  date of  relocation,  resulting  from a
difference  in the Floor Area of the  Premises  and such  substituted  premises.
(b)There  shall be no  abatement  of any rent  payable  hereunder  on account of
Tenant's  relocation  or any  inconvenience  or  business  loss caused to Tenant
thereby.
<PAGE>
NO OPTION      Section 16.26 

     Submis sion of this lease  shall not be deemed to be a reservat  ion of the
Premise s.  Landlor d shall not be bound  hereby until its delivery to Tenant of
an execute d copy  hereof  signed by Landlor d,  already  having  been signed by
Tenant.  and until such  delivery'  Landlord  reserves  the right to exhibit and
lease  the  Premises  10 other  prospective  tenants.  Notwithstanding  anything
contained herein to the contrary,  Landlord may withhold  delivery of possession
of the  Premises  from Tenant until such time as Tenant has paid to Landlord the
security  deposit  require&by  Section  16.05.  the first  month's  Minimum Rent
pursuant to Section 3.01, and any other sum owed pursuant hereto.

LANDLORD LIABILITY       Section 16.27

     The  obligations of Landlord  herein are intended to be binding only on the
property of the entity acting as Landlord and shall not be  personally  binding,
nor shall any resort be had to the private  properties of, the general  partners
thereof or any employees or agents of Landlord.



TERMINATION   Section 16.28

     If this lease is terminated by Landlord  under any  provision  hereof,  and
upon the  expiration of the term of this lease  collectively,  the  "termination
date"), the following shall pertain:  

     (a)Tenant  shall,  within fifteen (IS) days after the date of  termination,
remove from the Premises all merchandise,  furniture, furnishings, equipment and
movable  trade  fixtures  and shall  surrender  the  Premises to Landlord in the
condition required by Sections 7.02(c), 7.03 and 7.04. Tenant shall, at Tenant's
cost, repair any damage to the Premises caused by such removal.  Any items which
Tenant is permitted to remove but fails to remove prior to the  surrender of the
Premises to Landlord  shall be deemed  abandoned  by Tenant,  and  Landlord  may
retain or  dispose  of the same as  Landlord  sees fit  without  claim by Tenant
thereto or to any proceeds  thereof If Landlord  elects to remove and dispose of
any such items abandoned by Tenant,  the cost of such removal and disposal shall
be additional  rent payable by Tenant to Landlord upon demand.  Tenant shall pay
all amounts  payable by it through the date of termination and any costs charged
pursuant to the immediately  preceding sentence,  each of the parties shall bear
their own costs and fees incurred  (including  all costs  incurred in performing
their respective  obligations  hereunder)  through the termination date and from
and after the termination date neither party shall have any further  obligations
to the other,  except for those  obligations  set forth in this  subsection,  in
Section 16.16 and in subsection (b) below.  

     (b)Notwithstanding   the  provisions  of  subsection  (a),  upon  any  such
termination or expiration, the following shall pertain:

     (i) Landlor d agrees to defend.  indemn ify and hold  harmles s Tenant from
and against any and all claims,  costs, expense s, losses, damage s, actions and
causes of action for which  Landlord is  responsible  under this lease and which
accrue on or before the termination date. 

     (ii)Tenant agrees to defend,  indemnify and hold harmless Landlord from and
against any and all claims, costs, losses, expenses. damages, actions and causes
of action for which Tenant is  responsible  under this lease and which accrue on
or before the termination date.
     
     (iii) Ten shall  remain  liable  for the cost or all util' wed in or at the
Premises  through the termination  date accrued and unpaid,  whether or not then
billed.  as of the  termination  date until full payment there: by Tenant Tenant
shall  obtain  directly  from the  companies  providing  such  services  closing
statements  for all  service  rendered  through the  termination  date and shall
promptly  pay the same.  [C any utility  statement  with  respect to th Premises
includes charges for a period partially prior to and partially subsequent to the
termination  date, such charge shall be prorated as between  Landlord and Tenant
with Tenant  responsible  for the portion  thereof  (based upon  fraction  whose
numerator  is the  number  of days of  service  on such  statement  through  the
termination dare and whose denominator is the total number of days or service on
such statement)  through the termination  date and Landlord shall be responsible
for the balance. The parry receiving any such statement which requires proration
hereunder  shall promptly pay such  statement and the other parry shall,  within
ten (IC)  days  after  receipt  of a copy or such  statement  remit to the party
paying the  statement  any amount  for which  such  other  party is  responsible
hereunder.  
<PAGE>
     (iv) Tenant shall remain responsible for any taxes of the type described in
Section 5.03 an assessed against the Premises and the personal  property located
therein or thereon with a lien date prior to th termination  date.  irrespective
or the date of the billing  therefor.  and shall  indemnify&  and hold  Landlord
harmless wit respect to any claims for such taxes or resulting from  non-payment
thereof.

TAX BENEFITS          Section 16.29  See Addendum

     All  investment  tax credits,  rehabilitation  c-edits.  energy credits and
other  similar  state  and  federal  ta  benefits   generated   from   leasehold
improvements.  fixturization  and other  eligible  property  shall be  allocated
Landlord to the extent that Landlord pays for the same.  Prior to the payment to
Tenant or any Tenant  allowance  Tenant shall supply to Landlord a detailed list
or all such  items and  their  respective  costs,  including  installation  cost
purchased  by Tenant for use in the  Premises.  For the purposes of this Section
and the  allocation  or tax  benefit,  provided  for herein,  funds  provided by
Landlord as a Tenant  allowance  shall be attributed  first to the items on such
list  eligible for such tax benefits  and the tax  benefits  applicable  thereto
shall inure to the benefit of Landlord.

                                  ARTICLE XVII
                            CONSTRUCTION OF PREMISES

CONDITION OF PREMISES    Section   17.01

     Except for the work to be perfor  med by Landlo rd for Tenant  pursua nt to
part III of Exhibit "C, Tenant accepts the Premis es "as is', and after inspecti
on by  Tenant  Tenant  ackno  wledge s that  neither  Landlo rd nor any agent or
Landlord has made any representation or warranty with respect to the Premises or
the Center or the: suitability of either for the conduct or Tenant's business.




<PAGE>
DESIGN         Section 17.02  See Addendum
REVIEW   

     Within seven (7) business days after  Tenant's  receipt of a fully executed
copy of this lease,  Tenant an  Landlord's  architect  shall hold a  preliminary
design  meeting (the "PDM").  to review and discuss  Tenant's  Work  pursuant to
Section 17.04. The PDM shall be subject to and in accordance with the following:


     (a)Tenant shall be responsible to schedule the PDM promptly upon receipt by
Tenant or a ful executed copy or this lease. The PDM shall be scheduled  through
Landlord's  architectural department at (714 S46~l 10. Tenant shall not commence
preparation or preliminary plans and specifications  until the PDM has bee held.
and  in no  event  will  Landlord  review  and  approve  preliminary  plans  and
specifications  until the PDM has bee held.  

     (b)Tenant  shall  cause  its  architect  and any other  person(s),  such as
interior  design  consultants  or  electrical/mechanical  engineers  employed by
Tenant in connection  with Tenant's Work.  whom Tenant believes w be involved in
the  design  or  Tenant's  Work to  attend  the PDM.  Landlord  shall  cause its
architect and or  consultant(s)  deemed necessary by Landlord to attend the PDM.


     (c)At or prior to the PDM.  Tenant shall  deliver to  Landlord's  architect
each or the  following:  

     (i) A conceptual color board with colors and materials which Tenant intends
to use as part'  Tenant's  Work;  a. 

     (ii) A conceptual  dimensioned  store front  elevation  with all colors and
materials identified or Tenant's sign depicted on the Premises storefront or, in
the  alternative.  photographs  or artists'  renderings  storefronts  previously
constructed by Tenant;  

     (iii) Material samples of the conceptual  interior floor covering and entry
floor covering which Tenant proposes to use in the Premises;  and 

     (iv) Any other samples. photographs or renderings or other Tenant locations
which Tenant:  believes will be useful to Landlord in reviewing and  considering
Tenant's proposed concept for the Premises.

     All materials  submitted by Tenant shall be tagged or otherwise  identified
to Tenant and shall be dated.  All such'  materials will be retained by Landlord
until completion or Tenant's Work. 

(d)At the PDM, the following shall occur:

     (i) Landlord's  architect shall review Tenant's submission and shall orally
advise Tenant or a items which do not meet the  requirements of Exhibits "C" and
"E."

     (ii)Land.  and Tenant shall establish a design and C iruction  schedule (in
bar~chart form) for design and construction of Tenant's Work.  however,  nothing
contained on such  schedule  shall be deemed or construed to alter or affect the
Rent Commencement Date.

     (iii) Tenant shall designate one individual  employee or agent who shall be
authorized to act on behalf of Tenant with respect to all matters  pertaining to
this lease,  including all matters relative to Tenant's Work. Landlord may treat
any  approval  or  consent  given by such  person  as the  approval  or  consent
ofTenant.  Tenant  may, by written  notice to  Landlord.  change its  designated
representative  with  respect to matters  arising  after the date of  Landlord's
receipt of such notice.

     (e)The  PDNI  is  not  a  substitute  for  either   preliminary  plans  and
specifications or working  drawings,  and no approvals given at the PDM shall be
construed as relieving Tenant of its  responsibility  to prepare and submit such
items.  Any  approvals  given by Landlord at the PDM will be as to concept only,
and shall not  relieve  Tenant of its  obligation  to comply  with the  specific
criteria  set forth in Exhibits  "C" and "E" or  eliminate  LandlorQ's  right to
require   changes  upon   submission   by  Tenant  or   preliminary   plans  and
specifications  or  working  drawings.  Required  attendance  at a PDNI shall be
waived  only  under  special  circumstances  and  only in a  writing  signed  by
Landlord.
<PAGE>
PLANS FOR
TENANTS
WORK           Section 17.03 See Addendum

     (a)Promptly upon completion of the PDM,  Tenant,  at Tenant's sole cost and
expense,  shall cause to be prepared and  delivered  to Landlord for  Landlord's
approval  two (2) sets of  preliminary  plans and  specifications  ("preliminary
plans")  prepared in conformity  with the applicable  provisions of Exhibits "C"
and "H" by a licensed  architect  approved by Landlord.  Landlord shall promptly
notify Tenant of the respects,  if any, in which said preliminary' plans fail to
conform to the  applicable  provisions of Exhibits "C" and "E," and Tenant shall
promptly  make any  revisions  necessary'  to correct  such  matters  and obtain
Landlord's  approval.  Landlord's  approval,  which  shall  not be  unreasonably
withheld or delayed,  shall be evidenced by  Landlord's  causing one (I ) set of
such preliminary' plans to be initialed on its behalf and returned to Tenant.

     (b)Promptly after Landlord's approval of the preliminary plans,  Tenant, at
Tenant's  sole cost and expense,  shall cause to be prepared and  delivered  for
Landlord's  approval  four  (4)  sets of  working  drawings  and  specifications
("working  drawings") prepared in conformity with the approved preliminary plans
and  with  the  applicable  provisions  of  Exhibits  "C" and "H" by a  licensed
architect  approved by Landlord.  Landlord shall  promptly  notify Tenant of the
respects, if any, in which said working drawings fail to conform to the approved
preliminary' plans and/or the applicable  provisions of Exhibits "C" and "E" and
Tenant shall promptly make any revisions  necessary' to correct such matters and
obtain Landlord's approval. Landlord's approval, which shall not be unreasonably
withheld or delayed,  shall be evidenced by  Landlord's  causing one (I ) set of
such  working  drawings to be  initialed  on its behalf and  returned to Tenant.

     (c)After  Landlord's  approval of the working  drawings no change  shall be
made therein except as provided in this subsection (c): 

     (i)No change may be made by either parry without the prior written  consent
of the other (which shall not be unreasonably withheld or delayed), and 

     (ii) All architectural  services necessitated shall be rendered by Tenant's
architect at the expense of the party requesting the change.  

     (d)For  purposes of design and  approval of Tenant's  Work.  

     (i)In no event shall Tenant  proceed with working  drawings  until Landlord
has approved in all respects  Tenant's  preliminary'  plans and  specifications.


     (ii)Tenant's  preliminary plans and  specifications  shall contain detailed
depictions of all aspects of Tenant's Work, and shall be at least as detailed as
the sample drawing and storefront elevation collectively attached to Exhibit "E"
as "Schedule I." 

     (iii)  Tenant  shall  be  solely  responsible  to  ensure  compliance  with
Divisions 1-4 ofTitle 24ofthe California Administrative Code. Accordingly, at or
prior to the date that Tenant submits its working  drawings to Landlord,  Tenant
shall  submit to Landlord  (A)  engineered  electncal  drawings for the Premises
signed by an electrical  engineer  licensed in the State of California and (B) a
complete set  ofcalculations  showing the electrical load for the Premises (upon
completion of Tenant's Work) and demonstrating compliance, both as to electrical
and mechanical requirements,  with Title 24. 

     (iv) Landlord's review and approval of materials, plans, specifications and
working drawings  pursuant to this Section shall indicate no more than aesthetic
approval.  Approval by Landlord  shall not relieve  Tenant of its  obligation to
obtain all  approvals  and  permits  from all  governmental  authorities  having
jurisdiction or constitute a warranty that any items approved by Landlord comply
with  applicable law or any  requirements  of  governmental  authorities  having
jurisdiction.  
<PAGE>
TENANT'S  Section  17.04 See  Addendum  
WORK 

     (a) As a material  consideration  for the  execution  by  Landlord  of this
lease,  Tenant  agrees to construct  tenant  improvements  in the Premises  with
quality work using first class materials. Such work of redecorating,  remodeling
and  renovating  ("Tenant's  Work") shall include a new storefront and sign, new
fixtures,  and new wall tenants work, have the right to insist on a distinctive,
high quality store using only first class  materials and workmanship and meeting
the ~ :criteria  set forth in this lease.  Moreover,  L, ord's  insistence  upon
production  of a higher  quality  store  (in  terms  of  design,  materials  and
workmanship) than previously  constructed by Tenant, as a condition to the grant
of any approval  required to be obtained by Tenant from  Landlord,  shall not be
deemed to render Landlord's approval or disapproval unreasonable. Subject to the
foregoing,  however, Landlord's approvals pursuant to Section 17.03 shall not be
unreasonably  withheld so long as Tenant's  Work  complies  with the  applicable
requirements of Exhibits "C," "E" and "H" and  governmental  authorities  having
jurisdiction.

     (b) Tenant shall cause Tenant's Work to be performed by a licensed  general
contractor or contractors approved by Landlord. Tenant's Work shall be commenced
promptly after  Landlord's  approval of the working  drawings  therefrom  Tenant
shall cause  Tenant's  Work to be completed in  accordance  with the  applicable
provisions of Exhibits "C" and "H" on or before the Rent  Commencement  Date and
shall open the Premises for business upon such completion,  having  theretofore,
at its sole expense,  completed the  equipping,  decoration  and stocking of the
Premises to the extent  necessary to enable it to so open for  business.  Tenant
acknowledges  that it has ascertained  those portions,  if any. of Tenant's Work
which require a long lead time for fabrication or delivery,  that all such items
will be available in sufficient time to permit Tenant to complete  Tenant's Work
by the Rent  Commencement  Date and that no delays arising from late delivery of
such items shall delay or affect the Rent  Commencement  Date. 

     (c)  Tenant's  Work shall be at  Tenant's  sole cost and  expense and there
shall be no  allowance  or abatement of any kind by Landlord to or for Tenant on
account of Tenant's  Work, or the cost thereof.  The provisions of Section 16.16
shall be  specifically  applicable to Tenant's  Work,  and Tenant shall promptly
furnish to Landlord  upon  completion of Tenant's Work (i) a copy of a Notice of
Completion  with respect to Tenant's Work showing thereon the recording stamp of
the  Orange  County  Recorder;  and (ii)  evidence  reasonably  satisfactory  to
Landlord  that all of  tenant's  Work has been paid in full and that no claim of
any mechanic or material man may become a lien on the Premises. 

     (d) Landlord and Tenant  acknowledge  that review by the City of Costa Mesa
(the "City") of plans for and issuance of a permit with respect to Tenant's Work
may require  several weeks due to the backlog of projects  currently in the City
awaiting  review and approval.  Landlord has made  arrangements to expedite such
process by use of an independent engineer approved by the City. Accordingly.  in
connection with Tenant's Work,  Tenant shall enter into an Accelerated  Building
Plan Review Agreement (the  "Agreement")  with the City and an engineer approved
by the City and  designated  by Landlord and in the form of Exhibit "F" attached
hereto. All plans with respect to Tenant's Work requiring City approval shall be
submitted  to such  engineer  for  review  and  approval  and all fees and costs
incurred in such review and approval process shall be borne by Tenant.  Landlord
shall  cooperate  with Tenant as required in effecting  such review and approval
(including  executing  the  Agreement  if  required ), but all costs and fees in
connection therewith shall be borne by Tenant.

                                 34

<PAGE>
     (e) Any  additional  work or  remodeling  during  the lease  term  shall be
subject to all of the  provisions of Sections 7.03 and 16.16,  this Article XVII
and the applicable provisions of Exhibits "C" and "E" hereto, subject,  however,
in each case to the use of such time period(s) and date(s)  therefor as shall be
agreed  upon by  Landlord  and  Tenant.  

     (f) Failure of tenant to perform its  obligations  pursuant to this Article
XVII in timely  fashion  shall be deemed a default  by Tenant  pursuant  to this
lease  entitling  Landlord  to exercise  all  remedies  available  to a landlord
against a  defaulting  tenant,  including  but not limited to those  provided in
Article XIII.

     IN WITNESS WHEREOF the parties hereto have executed this lease on the dates
indicated  below,  the latter of which shall be deemed the date of  execution of
this lease.

(CORPORATE SEAL)

SOUTH COAST PLAZA EXPANSION,
   a California Limited Partnership 

BEAR ASSOCIATES,
   a partnership, General Panner

By BEAR DEVELOPMENT. ASSOCIATES,
     a partnership, General Partner


                                   "Landlord"

Date:

TOYS INTERNATIONAL,
a California corporation
<PAGE>
     ADDENDUM TO LEASE DATED JULY 31, 1986 BETWEEN SOUTH COAST PLAZA  EXPANSION,
A  CALIFORNIA  LIMITED  PARTNERSHIP,  as  LANDLORD,  and TOYS  INTERNATIONAL,  A
CALIFORNIA CORPORATION, as TENANT


Section 3.01, Minimum Rent

     (a) Subject to the provisions of the last paragraph of Section 16.04 of the
lease form, monthly Minimum Rent shall be as follows:

     (i) For the period from the Rent  Commencement  Date through the end of the
second full lease year,  the sum of $2,412 ($24.00 per square foot of Floor Area
per year).

     (ii) For the third and fourth full lease years,  the sum of $3,015  ($30.00
per square foot of Floor Area per year).

     (iii) For the fifth and sixth full lease years,  the sum of $3,618  ($36.00
per square foot of Floor Area per year).

     (iv) For the seventh and eighth full lease years, the sum of $4,221 ($42.00
per square foot of Floor Area per year).

     (v) For the ninth and tenth full lease years, the sum of $4,824 ($48.00 per
square foot of Floor Area per year).

     In the event that,  pursuant to the last  paragraph of the lease form,  the
Floor Area of the Premises is  determined  to be greater or lesser than that set
forth in the applicable  Fundamental  Lease Provision,  the monthly Minimum Rent
figures  set forth  above  shall be  adjusted  to those  amounts  determined  by
multiplying  the Floor Area as finally  determined by  one-twelfth of the annual
Minimum Rent rates set forth above.

     (b) The phrase "a 30-day  month and a 360-day  year"  appearing  in Section
3.01 of the lease  form  shall be It  amended  to read "a  calendar  month and a
365-day year.


Section 3.02 Cost of Living Increase

     The  provisions of Section 3.02 of the lease form shall have no application
with respect to this lease.

Section 3.03   Percentage Rent

     Subject to the  provisions of Section 3.01 above and the second  unnumbered
paragraph  of  Section  16.04 of the lease  form,  the  annual  Percentage  Rent
breakpoints pursuant to this lease shall be as follows:

                                       36


<PAGE>
     (a)From the Rent Commencement Date through the end of the second full lease
year, $413,485.71 per year.

     (b)For the third and fourth full lease years, the sum of $516,857.14.

     (c)For the fifth and sixth full lease years, the sum of $620,228.57.

     (d)For the seventh and eighth full lease years, the sum of $723,600.

     (e)For the balance of the lease term, the sum of $826,971.42.

     In the event that the monthly Minimum Rent is adjusted  pursuant to Section
3.01 above and the second  unnumbered  paragraph  of Section  16.04 of the lease
form,  the foregoing  Percentage  Rent  breakpoint  figures shall be adjusted to
those amounts  determined by dividing the annual Minimum Rent amounts after such
adjustments by seven percent (7%). In addition,  the Percentage  Rent breakpoint
for the first  partial  lease year shall be equal to fifty  percent (50%) of the
full breakpoint~and the Percentage Rent breakpoint for any partial lease year at
the end of the lease term shall be determined by multiplying the Percentage Rent
breakpoint  for 1W the full lease year by a fraction  whose  numerator is the Na
'~r  number of days in  the~partial  lease  year and whose  denominator  is 365.

Section 6.03 Other Locations

     Landlord and Tenant  acknowledge  that Tenant  currently  operates  another
store under the tradename "Toys International" at the existing South Coast Plaza
Retail  Center and will  continue to operate such store after the opening of the
Premises.  Continued  operation of such store shall not be deemed to violate the
provisions of Section 6.03 of the lease form.

Section 8.02 Fire Insurance - Fixtures, Equipment and Tenant Improvements

     The phrase  "earthquake  and  flood" in  Section  8.02(a) of the lease form
shall be deleted in each place that it appears.

Section 10.01 Assignment and Subletting

     (a)Clause  (vi)  of  Section  10.01(d)  of the  lease  form  shall  have no
application with respect to this lease.

     (b)The last clause of the first  sentence of Section  10.01(e) of the lease
form  (commencing with the words "and Landlord shall be entitled") shall have no
application with respect to this lease.

     (c)Notwithstanding  the provisions of Section 10.01 of the lease form, such
Section shall not apply to and

                                               37
<PAGE>
Landlord's approval shall not be required in connection with:

     (i) A merger or consolidation to which Tenant is a party;

     (ii) A sale of all or substantially all of Tenant's capital tock or assets:
or

     (iii)  Transfers  of all or a portion  of the  capital  stock  Tenant by or
between  Gayle  Hoepner  and his  spouse,  to the  lineal  descendents  or to an
intervivos  or  testamentary  r st for  the  benefit  of  some  or  all of  such
individuals. 1/2

     Provided,  however,  that in connection with any such  transaction,  Tenant
shall comply with each of the following as are applicable to such transaction:

     (A) There shall be no change in the tradename in use at the Premises and no
substantial  change in the business conducted at the Premises in connection with
such  transaction  except,  in each instance,  with the prior written consent of
Landlord.

     (B) In connection  with any such  transaction,  Tenant shall not then be in
default pursuant to this lease.

     (C) In connection  with any  transaction of the types  specified in clauses
(i) and (ii) above:

     (x) Unless the obligations of the tenant pursuant to this lease are assumed
by the transferee by operation of law, such transferee shall execute and deliver
to Landlord a written assumption of Tenant's  obligations pu*suant to this lease
in form and substance reasonably satisfactory to Landlord.

     (y)  Tenant  shall,  in  writing,  not less than ten (~0) days prior to the
effective date of the transaction notify Landlord of the transaction,  the facts
which bring the  transaction  within the  provisions of this  subsection and any
change in the address for notices and billings to Tenant pursuant to this lease.
Any assumption required by clause (x) shall accompany such notice.

     (D) No transaction  pursuant to this subsection shall relieve the Guarantor
specified  in Addendum  Section  18.01 of his  obligations  with respect to this
lease.

Section 15.05     Advertising Expenditures

     (a)  Section  15.05(a)  of the lease form shall be amended to read,  in its
entirety, as follows.

     "Tenant  shall spend each lease year an amount equal to one percent (1%) of
its gross sales for such lease year on advertising its South Coast




                                               38

        
<PAGE>
     Plaza location in newspapers,  radio, television or other media or forms of
promotion selected by Tenant."

     (b) The phrase o'two  percent  (2%)"  appearing in Section  15.05(b) of the
lease  form  shall be amended  to read "one  percent  (1%)" each place  where it
appears.

     (c) The  provisions  of  Section  15.05(c)  of the lease form shall have no
application with respect to this lease.

Section 15.06 Use of Private Credit Card 

     The  provisions  of  Section  15.06  of  the  lease  form  shall  htve#1/2o
application with respect to this lease. 

Section 15.07 Catalog Advertising

     Notwithstanding  the provisions  of~Section 15.07 of the lease form, Tenant
shall be required to purchase only one (1) advertisement in Landlord's Christmas
brochure (only) and such advertisement may be a joint  advertisement of Tenant's
store in the  Prernises  and  Tenant's  existing  store at the South Coast Plaza
Retail Center.

Section 16.05  Deposits

     The provisions of subsettions 16.05(a) and 16.05(c) of the lease form shall
have no application with respect to this lease.

Section 16.06        Late Payments and Deliveries

     The following shall be added at the end of subsection 16.06(a) of the lease
form:

     "The interest rate as determined  pursuant to this subsection  shall remain
in effect following any default by Tenant pursuant to this lease."

Section 16.29        Tax Benefits

     All tax benefits~with  respect to eligible property in the Premises,  other
than those allocated to Landlord  pursuant to Section 16.29 of the lease form by
virtue of the Tenant's Allowance, shall belon~ to Tenant.

Sections 17.02 through 17.04 Tenant's Work
              
     Notwithstanding  the  provisions  of Sections  17.02 and 17.04 of the lease
form,  design and  construction  of Tenant's  Work in the  Premises  shall be in
accordance with the following:

     (a) The  PDM was  held  prior  to the  execution  of  this  lease,  and all
submissions  required of tenant  pursuant to Section 17.02 were made at or prior
to the PDM.

     (b) All design work with respect to Tenant's  work shall be  completed  and
all required  approvals  with respect  thereto shall be obtained by Tenant on or
before September 15, 1986. 

     (c) All  construction  of Tenant's work shall be completed o~ or before the
Rent Commencement Date. 

Section 17.05       Tenant's Allowance

     (a) Landlord shall provide to Tenant an allowance with rfrsp~ct to the cost
of Tenant's Work in the Premises ("Tena.?' t's~Allowance") in an amount equal to
the lesser of (a) $?5,000 or (b) the aggregate  allowed  costs.  As used herein,
the term "allowed  costs't shall mean all out of pocket costs incurred by Tenant
with  respect  to  construction  of  permanent  improvements  to  the  Premises,
including  (i)  contractors'  profit  and  overhead,   (ii)  all  fees  paid  to
professionals,  such as architects and engineers,  in connection with the design
of  permanent  improvements  to the  Premises,  (iii) all costs and fees paid to
governmental  authorities in connection with all permits and approvals  required
for the  construction or installation of permanent  improvements to the Premises
and (iv) all permanent  decorative  items,  such as paint,  carpet,  tile,  wall
coverings  and drop  ceilings in the  Premises.  Allowed costs shall not include
Tenant's trade fixtures not permanently attached to the Premises, cash registers
and other portable machinery and equipment, furniture and furnishings, inventory
of merchandise and other  miscellaneous  movable  personal  property,  placed or
installed by Tenant in the Premises.
<PAGE>
     (b) Tenant's  Allowance shall be paid by Landlord to Tenant within ten (10)
days  after the last to occur of (i)  submission  by Tenant to  Landlord  of the
detailed list required by Section  16.29 of the lease form,  (ii)  submission by
Tenant to Landlord of the last of the items specified in Section 17.04(c) of the
lease form,  (iii)  submission  by Tenant to Landlord  of  documentary  evidence
reasonably  satisfactory  to Landlord as to the amount of allowed costs and (iv)
the opening of the Premises for business by Tenant.  Provided,  however, that in
no event shall  Landlord be required to pay such  Tenant's  Allowance  until and
unless Tenant is not then in default  pursuant to this lease.  The provisions of
Section  16.29 of the lease form shall  apply to the actual  Tenant's  Allowance
paid to Tenant by Landlord pursuant~to this Section 17.05.

Section 18.Ol  Guaranty

     Landlord and Tenant  acknowledge  and agree that the deliye'ry by Tenant to
Landlord of a guaranty of Tenant's  obligations  pursuant to this lease executed
by Gayle  Hoepner  ("Guarantor1')  is a material  consideration  for  Landlord's
execution  of this lease and that  Landlord  would not execute and deliver  this
lease but for such  guaranty.  Accordingly,  Tenant  shall  deliver to  Landlord
within ten (10) days after  receipt by Tenant of a fully  executed  copy of this
lease a written  guaranty  executed by Guarantor  and in the form of Exhibit "I"
attached hereto (the "Guaranty")



                                               40
<PAGE>
     In the event that  Tenant  shall fail to deliver to Landlord  the  executed
Guaranty  within such ten (10) day period,  Landlord may terminate this lease by
written notice to Tenant given at any time after the expiration of such ten (10)
day period and prior to the delivery of such executed  Guaranty.  In such event,
this lease shall  terminate  upon Tenant's  receipt of Landlordts  notice,  each
party  shall bear itS own  expenses  and fees  incurred in the  negotiation  and
preparation  of  this  lease  and in  complying  herewith  through  the  date of
termination,  Tenant  shall  promptly  surrender  possession  of the Premises to
Landlord,  Landlord  shall be  entitled  to retain,  as  liquidated  damages for
Tenant's  default,  the deposit of Tenant pursuant to Addendum Section 19.01 and
neither party shall have any further rights or obligations  with respect' to the
other hereunder.

Section 19.01  VAC Payment

     Landlord and Tenant  acknowledge that Landlord has instal%d or will install
for the benefit of Tenant a variable air c4ntrol system together with associated
ducting to serve the  Premises.  Concurrently  with the execution of this lease,
Tenant shall  reimburse  Landlord for such work in the amount of $5,000.  Tenant
shall not, however, be required to reimburse Landlord for any of the other costs
identified  in Part Ill-B of Exhibit "C', or, if Tenant opens for business on or
before the Rent  Corrirnencement  Date,  in  paragraphs 2 and 3 of Part Ill-C of
Exhibit "C."

Section 20.01  Interpretation

     This  addendum is  attached to and forms a part of a certain  lease of even
date between Landlord and Tenant. In the event of any inconsistency  between the
provision of this Addendum and any other provision of the lease,  the provisions
of this addendum shall control.

TOYS INTERNATIONAL,
a California corporation


 
SOUTH COAST PLAZA EXPANSION,
a California Limited Partnership



By BEAR ASSOCIATES, a partnership,
General Partner


By BEAR DEVELOPMENT ASSOCIATES, a
partnership, General Partner

Dated_  1986
<PAGE>
[graphic]
<PAGE>
[graphic]
<PAGE>
[graphic]
<PAGE>
[graphic]
<PAGE>
                                SOUTH COAST PLAZA


                     GENERAL DESCRIPTION OF LANDLORD'S WORK
                                     AND OF
                                  TENANTS WORK


I  LANDLORD'S  WORK  The  following  work  or  construction  is to be  performed
   exclusively by Landlord at Landlord~.' sole expense:

   A Common Area:

     I. Parking  Areas,  Roads and  Sidewalks.  Paved,  drained,  landscaped and
lighted parking areas, roads. anc sidewalks, together with directional signs and
markers.

      2.Utilities

     (a)Sanitary  Sewer.  Connections  for  Tenant's  lines will be  provided to
existing sewer mains at points to be determined by Landlord,

     (b)Domestic  Water. Main will be furnished to approved points of connection
as  determined  by Landlord  Water meters will be in common  (except for tenants
engaged in food preparation) and will be located as determined by Landlord

     (c)Natural Gas. Mains will be furnished to approved points of connection as
determined  by Landlord  Landlord  will also provide  meter  locations  (but not
meters) for Tenant at lower level parking. Tenant to place mete and run gas line
in Landlord  approved  locations to Premises  from point or  connection on lower
level.  

     (d)Electrical  Service.  120/208  volt three  phase,  four wire service and
required conduits will be provided to point or main service panels in electrical
rooms as  determined  and provided by  Landlord.  Service will be sized to allow
approximately  4.5 watts per square  root or Floor Area for  lighting  and power
loads.  Such wattage is for  approximation  only, and actual power input will be
determined  based upon Tenant's  requirements  in the Premises but not to exceed
4.5  watts  per  square  foot of  Floor  Area  for  lighting  and  power  loads.

     (e)Telephone  Service.  A telephone  terminal backboard with cable capacity
adequate  for  Tenant's  use will be located in a common area as  determined  by
Landlord.  

     (f) Fire Sprinkler  $system.  See Exhibit "E." 

     3.Interior Common Areas and Common Facilities

     (a)Toilet Facilities. Landlord will provide a public toilet facility in the
common area, including  furnishings  installation of toilet fixtures,  painting.
ventilation,  soap. tissue and paper towel dispensers (or wall mounted electric'
hand dryer units) all in accordance with applicable building codes.

     (b)Corridor.  Stairways. Escalator and Elevation. To be located as Landlord
shall determine and ii accordance with governing building codes.


     (c)Truck Receiving Facilities Will be provided as determined by Landlord in
lower level parking area.

     (d)Trash Removal Facilities. Will be provided as determined by Landlord.

     (e)Enclosed  Mall and  Courts.  Heated,  ventilated,  air  conditioned  and
lighted with  architecture an' landscaping  treatment as determined by Landlord.
Ceiling  will be  suspended  acoustic  or gypsum  board  ceiling  system.  Floor
finishes in the Enclosed Mall will be concrete slab with decorative  finishes as
selected  by Landlord  interior  wall areas,  other than  storefronts,  shall be
gypsum board with taped and floated joints,  painted.  A neutral strip above the
storefront line shall be selected by Landlord. Fire sprinklers will! be provided
throughout and Below' the Enclosed Mall as required by code in addition to a dry
standpipe  system with outlets in and un&r~t~  Enclosed' Mall as required by the
fire department Low intensity lighting will be provided  throughout the Enclosed
Mall wit electrical outlets provided for seasonal decorations,  maintenance. and
special  promotions.  A central public address and music system with speakers in
the ceiling will be provided throughout the mall.
<PAGE>
(f)Hot and  Cod Air  Distribution  system.  See  Exhibit "E"

     4.Exterior  Malls and Courts.  Lighted.  paved and drained as determined by
Landlord. B.Enclosed Mall Building I. Building Shell

     (a)Frame-Ant. Second and Third Mall Levels. See Exhibit "E."

     (b)Structural  Clear Heights.  For maximum clear heights  measured from the
finished floor slab to the lower  structural  member.  see  structural  drawings
pertaining to the Premises.

     (c) Roof Insulated and built-up composition roofing.

     (d) Exterior Building Walls. Enclosing the building shell. except at tenant
storefront  areas. Wall materials of suitabnature  having a finished  appearance
and decorative quality will be or Landlord's selection.

2.  Interior  Finishes  

     (a) Walls.  Walls or partitions  separating  the Premises from common areas
will be exposed metal walls  construction with drywall finish on the common area
side only. Exposed metal studs only will be installed fc demising walls.

     (b)Doors.  Where the Premises adjoin a common area corridor.  Landlord will
provide  one (I)  doorway an door to connect  the  Premises  to such common area
corridor.  If required by applicable building codes.  Landlord w\ provide a door
for emergency exits to corridors or stairs.

     (c)Mall Access.  Access will be provided via common area service  corridors
and  stairways  located as  Landlord  shall  determine  and in  accordance  with
governing building codes.

     3.Neutral Strips A vertical neutral strip will be located at the storefront
line between  stores;  the center of said str will  coincide with the lease line
defining the Premises.


                                   EXHIBIT C
<PAGE>

        II TENANT'S WORK I

     A, Stare  interior  Finish Work All work required to complete and place the
Premises in finished condition for opening for business over and above that work
described  herein as  Landlord's  Work and that work to be performed by Landlord
Tenant's  cost  pursuant to part III hereof  shall be done by Tenant,  except as
provided herein or in Exhibit "Et' to the contra I and shall be at Tenant's sole
expense.  All  such  work  shall be in  accordance  with  the  Working  Drawings
prepared-&~d  by Tenant  architect in conformity  with this Exhibit "C." Exhibit
'E.' and the South Coast Plaza  architectural  design criteria manual a approved
by Landlord as provided in Article XVII of the lease. Said store interior finish
work shall include. but shall not limited to, the following:

     1.Ventilating and Air Conditioning. All air conditioning equipment required
within the Premises  including the d work, VAV boxes, air diffusers.  grille and
temperature controls with connections to Landlord's conditioned air distribution
syste~ (See Exhibit  "E").  Access  panels must be provided to all VAV boxes and
fire dampen.  THE DESIGN F( TENANT  VENTILATING AND AIR CONDmONING WORK SMALL BE
PREPARED BY AN AIR CON! TrONING ENGINEER DESIGNATED BY LANDLORD. SUCH WORK SHALL
BE AT TENANT'S  COST A~ SHALL BE UNDER A DIRECT  co~I'TRACT  BETWEEN  TENANT AND
SUCH ENGINEEL THE WOI PURSUANT TO SUCH CONTRACT SHALL INCLUDE PREPARATION OF ALL
DRAWINGS.  AIR BALA$ INC AND A WPED  REPORT  THEREOF  AND ALL LOAD  CALCULATIONS
(INCLUDrNG    ANTICIPATi    TENANT   CHARGES)    REQUIRED   fly   EXHIBIT   "E."

     2.Electrical  SyStems,   Equipment  and  Lighting  Fixtures  with  Lamping.
Electrical   power  and  distribution  fr  Landlord's  point  or  connection  in
electrical  room to and  within the  Premises  including  electrical  subpanels,
conduits Premises,  outlet boxes, switch outlets,  service fuses, copper wiring.
disconnect  switch.  meter and lighting  fixtures % lamping.  This work includes
Tenant's cost  responsibility  for all additional  electrical  service  capacity
required if Tenar combined  lighting and power loads exceed 4.5 watts per square
foot,  (See  Landlord's  Work,  Section  t  above).   

     3.Plumbing.  All plumbing distribution and fixtures including connection to
water and sewer mains  provided  Landlord for both  employee and publk  restroom
facilities  within Premises.  Any removal and replacement ofthe exist structural
slab  shall  be  accomplished  in a  manner  prescribed  by  Landlord  prior  to
commencement of such removal.

     4.Ceiling. All finished ceilings.

     5.Floor  Coverings.  All  floor  coverings  and floor  finishes,  including
hardwood.  tile,  brick.  slate.  marble  and  terraz  Tenant's  finished  floor
elevation shall match the enclosed mall finished floor elevatio~

     6.Interior Painting. All interior painting and decoration.

     7.Storefront, Walls and Panitions with Finishei All interior partitions and
walls within the Premises.  storefr finishes,  walls and columns,  including the
wall surfacing and wall finishes required on exposed metal or wood St erected as
pan of Landlord's Work,

     8.Doors. All doors and hardware within the Premises.

     9.Roof openings.  Roof openings.  induding necessary curbs and flashings to
accommodate the installation  Tenant's Work. Boo fopenings shall be located only
as directed by  Landlord.  Reroofing of approved  roof  openings be performed by
Landlord at Tenant's  expense.  Tenant shall not install any roof vents  without
Landlord's  consent  shall  install  roof vents only in  locations  approved  by
Landlord.

     10.  Public and Employee  Toilet Rooms,  Janitorial  and Drinking Faun rain
racilities.  Furnish and install together v work customarily  incidental thereto
to applicable building code requirements.

     11. Mechanical Equipment All mechanical equipment,  including dumb waiters.
elevators.  freight  elevat  conveyors and their shafts and doors located within
the Premises,  including all electrical.  mechanical and structural required for
installation and operation of these items, I
<PAGE>
     12.Food Preparation and Combustible Materials.  In the event Tenant engages
in the  preparation or rood or ba goods.  Tenant shall, at Tenant's own cost and
expense: (i) install dry chemical  extinguishing  devices (such as An~~ approved
by the  local  fire  insurance  rating  organization  and  Landlord's  insurance
carriers,  and keep such  devices in g working  order and  repair and  regularly
serviced under a maintenance  agreement or the type required by Landlord or such
fire  insurance  rating  organization  or  carriers;  (ii) keep and maintain all
exhaust  ducts and  filters in a clean  condit  (iii)  place and store  Tenant's
garbage and refuse in closed containers which shall be kept, until collected. in
a contained.  refrigerated area within the Premises set aside for the storage of
garbage and refuse and (iv) install gre traps as  required.  In the event Tenant
engages in the use, sale or storage of flammable or combustible  materials.  Ter
shall  install and  maintain  chemical  extinguishing  devices  similar to those
rererrred to in clause Ci) above.  In the event is used in the Premises,  Tenant
shall  install a proper gas cut~W  valve.  If Tenant  shall fail to install  any
devices  requ by this  paragraph  and/or to provide for the  servicing  thereof.
Landlord  shall have the right to enter  upon the  Premise  make such  necessary
installations and servicing and charge the cost or such installations and/or the
servicing therec Tenant

     13.Telephone Facilities. Conduits. cabinets and outlets within the Premises
as required by the utility comp  supplying  the service  requested by Tenant and
extension of conduits to central telephone backboard.

     14.Utility Meters and Connections.

     (a)Water and Gas Meters.  When  required  shall be located  within the mall
building  at a meter  loca  determined  by  Landlord  or in a common  meter area
outside of the Premises designated by Landlord and accesf I by Tenant

     (b)Electrical  Meter.  Shall  be  located  in an  electrical  meter  closet
provided by Landlord in a common accessible by Tenant . ..,~

     (c)Utility  Connection  Lines.  All water,  electric,  gas and sewer  lines
necessary to reach the point or connec to Landlord's utility and sewer mains.

     15.Intercom.  Annunciator,  Are,  Smoke  Alarm,  Burglar,  Speaker and Musk
Systems. Furnish and install.

     16.Garbage and Rubbish.  Storage area for dry and/or wet rubbish collection
containers  to be  provided  withir I Premises  readily  accessible  to Tenant's
service  corridor  access.  

     17.Fire  Sprinklers.  Modification or extension of primary sprinkler system
through the ceiling to conform to Ten merchandising and ceiling plans.


                                      C-2

<PAGE>
   B Store Fixturing and Merchandising. Tenant shall bear the entire expense and
responsibility  for  providing  within  the  Premises  (whether  affixed  to the
Prernises or not) all trade  fixtures and  merchandise,  and all other  property
incidental to the business to be  operated~by  Tenant,  all meeting the criteria
set forth in Exhibit "E," induding, but not limited to, the following

     I.Furnishing  and  installation of all carpets,  shelving,  store fixtures,
furnishings,  interior  decorations,  graphics,  exterior  and  interior  signs,
mirrors, cornices and an other fixtures, lighting and other special effects.

     2, Electrical and mechanical connection or all store merchandising fixtures
and equipment with related pans. induding kitchen and food service equipment and
other equipment peculiar to Tenant's occupancy.

     III WORK BY LANDLORD AT TENANT'S EXPENSE

     A,  Vendiating and Air  Conditioning  Systent As described in Exhibit "E,.'
Landlord  will furnish a roof mounted  variable air volume  ventilating  and air
conditioning  system and the main ducts  thetefor for  connection  to and use by
Tenant in the Prem~ Such system and  services  are provided in lieu of requiring
Tenant to purchase and install Tenant's own system. Tenant shall pay to Landlord
a tap-in fee prior to connection of Tenant's  ventilating  and afr  conditioning
equipment and Tenant's  toilet  exhawt,  if any. in the Premises to such system.
The amount of such fee shall be determined by reference to the floor Area of the
Premises  and  shall  be in  accordance  with  Landlord's  ventilation  and  air
conditioning connection fee schedule. as in efrect fmm time to time.

     B. Work hr Landford in the Premiset  Landlord  will  perform the  following
required  work in the  Premises0ee4n-tt~'  -xp:rtz;.  All  such  work  shall  be
performed in accordance with the standards set rorth in this Exhibit "C.' and/or
Exhibit "E," [section struck out]

     I.Demising  Studs Landlord will furnish and install metal demising studs to
separate  the Premises  from other  tenant  premises and from common area (semce
corndors  fire  corridors.  stairways.  et~) of the Center.[section struck out]

     2.Vertical Neutral Stnps As provided in Part I above. Landlord will furnish
and instafl  vertical  strips at the  storefront [section struck out]

     3 Honrontal  Neutral Stnp As provided in Pant above,  Landlord will furnish
and install a horizcntal  [section struck out]

     4 Floor Slab Landlord has  furnished or will furnish a concrete  floor slab
for the  Premises  designed to support a [section struck out]

     5.Service floor and Hardware. Landlord will nirnish and install in some but
not all tenant  premises a service door  (including all hardware  therefor) from
the Premises to a common area  corridor.  Such service  doors shall be installed
only in tenant premises which adjoin a common area corridor.[section struck out]

     6.Fire Sprinkler  $ystem.  Landlord will furnish and install a primary fire
sprinkler system in the Center meeting applicable code  requirements,  including
fire  sprinkler  heads in the Premises.  Any  relocation of sprinkler  lines and
sprinkler  heads  required to  accommodate  Tenant's Work in the Premises is the
responsibility  of  Tenant,  both  as  to  performance  and  payment  or  costs.
[section struck out]

     7.Smoke  Detector.  Landlord will flirnish and install a smoke  detector in
the Premises meeting applicable code requirements. [section struck out]

     8.Electrical  Panet and Switch. As provided in Pan [ above,  Landlord shall
furnish and install a main electrical panel, including a main disconnect switch,
in an electrical room furnished by Landlord. Such racilities and equipment shall
be in conformance with Part I above to enable Tenant to draw electrical  service
for the  Premises  in  accordance  with pan rr above and Exhibit  "E."  [section
struck out]

     C.  Temporary  Services:  Storefront  Barricade and Signs.  Tenant shall be
responsible  for or shall  bear  the  cost or all  temporary  or  interim  items
relative to the construction of the Premises and the completion of Tenant's Work
with respect thereto, including but not limited to the following:

     1.Temporary  Senket During the construction  ofTenant's Work,  Tenant shall
provide  and pay  for  connections  and  meters  for  temporary  water,  gas and
electrical  services brought to such point as Landlord shall  determine.  Tenant
shall pay for all  water,  gas,  electrical  current,  fuels  and all  temporary
services  required by Tenant during  construction  or Tenant's Work at a rate of
So.50 per square foot of floor Area of the Premises.

     2.Storefront Earricade.  Landlord shall erect and/or realign and remove the
temporary  storefront  barricade for the Premises to reasonably  accommodate the
completion  ofTenant's  Work.  Tenant shall pay to Landlord as additional  rent,
upon  demand,  an amount  equal to 375.00 per  lineal  root  ofthe  front  ofthe
Premises for Landlord's  costs incurred in such erection and/or  realignment and
removal.

     3.Store Opening Sigit Landlord shall provide to Tenant a store opening sign
with respect to the Premises  consisting  of Tenant's  logo and/or trade name in
Tenant's  typesryle  which  shall be painted  on or  affixed  to the  storefront
barricade  for the  Premises by Landlord.  and Tenant shall pay to Landlord,  as
additional rent, upon demand,  Landlord's  actual cost incurred in such painting
or affixing. which cost shall not exceed 3500.

     D. Payments by Tenant.  The payment  required  pursuant to section A. above
shall be made by Tenant upon  execution  and  delivery  of this lease.  [section
struck out]

                                      C-3


<PAGE>
     fifteen  (15) days  after  Tenant's  receipt  of  Landlord's  invoice.  All
payments required from Tenant pursuant to this Pan In shall be deemed additional
rent pursuant to this lease,  and the failure of Tenant to make any such payment
when  required  shall be  deemed a  default  by Tenant  pursuant  to this  lease
entitling  Landlord to exercise all remedies  available to a landlord for breach
by a tenant of a written  lease.  induding but not limited to those set forth in
Article XIII of this lease.

                                      C-4

<PAGE>

                                SOUTH COAST PLAZA

                         TENANT VENTILATION AND COLD AIR
                             ANNUAL CHARGE SCHEDULE

GENERAL

Tenant's  charge for  ventilation and cold air is calculated as an annual amount
using the rate,  expressed on a square foot basis,  shown on the Base Rate Curve
Sheet attached as Schedule 'A,' applied  against  Tenant's Floor Area, with rate
adjustments as provided for in Sections II and III of this Exhibit "9."

I.  CALCULATION OF ANNUAL CHARGE

    The  following  procedure  will be used in  developing  the annual charge to
Tenant:

    A. The floor area of the Premises,  calculated  in  accordance  with Section
       16.04 of the lease,  shall be used to determine Tenant's annual base rate
       per square foot taken from the Base Rate Curve Sheet attached as Schedule
       'A.'

    B. The annual  rate per  square  foot in effect at the  commencement  of the
       lease term shall be the amount  calculated in accordance with Paragraph A
       above,  modified to the extent,  if any,  provided for in Sections II and
       III of this Exhibit "D."

    C. The annual rate per square foot as  developed  in Paragraph B above shall
       then be  multiplied  by the Floor Area to develop  the annual  charge for
       cold air to the Premises. The annual charge will be divided into 12 equal
       installments with one such installment  billed to Tenant each month. Such
       monthly billings may include any applicable  adjustments  provided for in
       Sections II and III below, or Landlord may separately bill Tenant for any
       adjustment retroactive to the event causing such adjustment.

     II. CALCULATION OF ANNUAL RATE ADJUSTMENT DUE TO ADDITIONAL TENANT COLD AIR
AND VENTILATION REQUIREMENTS BEYOND THE STANDARDS SET FORTH IN EXHIBIT "E"

     A. The annual base rate per square foot shall be increased if:

     I. The air supply  quantity  required by Tenant  exceeds 1.2 cfm per square
foot of Floor Area; or

     2. The internal  sensible  cooling load,  including heat absorbed above and
below the ceiling but exclusive of roof and wall transmission, exceeds 19.4 BTUH
per square foot of Floor Area; or

     3. The amount of air exhausted to the outdoors  exceeds 0.10 cfm per square
foot of Floor Area; or

     4. The required and optional  hours of operation  for the Center as a whole
are  increased  above 3,700 hours  annually  (the Base Rate Curve Sheet is based
upon  required  hours of  10:00a.m.  to  9:00p.m.  Monday  through  Friday,  and
10:00a.m.  to 6:00p.m.  Saturday,  and  optional  opening  hours of 6:00p.m.  to
9:00p.m. Saturday and 11:00a.m. to 6:00 p.m. Sunday).

     B. The adjustments to the annual base rate per square foot called for under
Paragraphs Al. and A2. above shall be computed as described under Paragraphs BI.
and 82. below.

     I. For each 0.10 cfm per square foot of air  required  by Tenant  above the
1.2 cfm per square foot design criteria,  the additional  annual rate per square
foot will be  determined  from the  Adjusted  Base Rate Curve Sheet  attached as
Schedule 'B.'

     2. The additional  annual rate per square foot for added internal  sensible
cooling load shall be computed as follows:

   Additional       Current                             Calculated Internal
   Annual      -    Annual         [(#4        x      Sensible Cooling Load)  13
   Rate             Rate                                    Floor Area     7

     C. The  adjustment to the annual base rate per square foot under  Paragraph
A3. above shall be computed as follows:  For each additional 0.10 cfm of exhaust
air per square  foot above the 0.10 cfm per square  foot  design  standard,  the
additional annual rate per square foot will be 2.0 cents.

     Note:  This  annual  rate  adjustment  is subject to  escalation  using the
criteria set forth in Section III below.

     D. The  adjustment to the annual base rate per square foot under  Paragraph
A4. above shall be computed as follows:
     
Additional        Current          (Required and Optional Hours of
Annual       =    Annual      x           Operation Annual            I)
Rate              Rate                         3,700

     E. The  adjusted  annual rate per square foot shall be the sum of the above
separate annual rate  adjustments  added to the annual base rate per square foot
from Schedule 'A,' as escalated from time to time pursuant to Section III below.










                                    EXHIBIT D

<PAGE>

III.CALCULATION OF ANNUAL RATE ADJUSTMENTS DUE TO COSTS AND EXPERIENCE

    A. Tenant's annual base rate per square foot shall be increased or decreased
       due to (I)  changes  in utility  operating  cos and  personnel  and other
       operating  costs which are caused by escalations in the utility and other
       rate schedules used the criteria for  establishing  Schedule 'A,' and (2)
       charges based on  Landlord's  experience  with the cold air  distribution
       system.  The Base Rate Curve set forth on Schedule  'A' is based upon the
       consumption  criteria and utility ra schedules and other  operating  cost
       schedules indicated below.  Published changes in these base utility rates
       ar changes in the other base  operating cost schedules will establish the
       basis on which  adjustments  to Tenant's  base ra per square foot will be
       determined as follows. 

1. Utility Operating Cost Adjustment

          a. Base Criteria

             (I ) Utiity Base Year Consumption
                 The Base Rate Curve Sheet was  established on the basis of base
                 year  consumption   figures   calculated  t  Landlord's  system
                 engineers for each of the following utilities:  

(a) Electricity

                 (b) Natural  gas 

(c) Water and sewer The base year  consumption
                 figures were  calculated to reflect the first operating year of
                 full occupancy the Center.

             (2) Utility Base Rare Schedules

                 The Base Rate Curve Sheet was  established  on the basis of the
                 Southern  California  Edison  Compan  Southern  California  Gas
                 Company and Mesa  Consolidated  Water  District rate  schedules
                 identified C Schedule 'A.' as to  electricity,  natural gas and
                 water and sewer, respectively.

          b. Method  of  Calculation.   For  every   published   change  in  the
             electricity.  natural  gas and water and sewer utili  rates,  there
             shall be made a utility operating cost adjustment equal to Tenant's
             pro rata share of the increase' decrease in utility operating cost.
             The  increase  or  decrease  in  utility  operating  cost  shall be
             calculated I  multiplying  the  published  utility rate increase or
             decrease by the appropriate base year consumption  figure,  defined
             in  Paragraph  Al.  above.  Tenant's  pro rata share of the utility
             operating cost increase ordecrease sh~be a fraction,  the numerator
             of which shall be Tenant's floor area and the  denominator of which
             shall be tt aggregate  floor area of all tenants or other occupants
             connected to the central cold air distribution system at ti time of
             adjustment.

       2. Operating and Maintenance Personnel Cost Adjustment

          a. Base  Criteria.  The Base Rate Curve Sheet was  established  on the
             basis of an average per hour base labor ra for system operating and
             maintenance  personnel calculated to reflect the average labor rate
             in  effect in ti Center  area  labor  marker  for  equivalent  type
             personnel at the date indicated on Schedule 'A.

          b. Method  of  Calculation.  For  each ten cent  ($0.10)  increase  or
             decrease in the average  base labor rate,  Tenani  annual base rate
             per square foot shall be correspondingly  increised or decreased to
             the extent of  four-tenths  one cent  ($0004)  per  square  foot of
             Tenant's  floor area times the number of operating  and  maintenani
             personnel  employed or under contract for the system at the time of
             adjustment.
<PAGE>
     3.Insurance and Tax Cost Adjustment

     a. Base Criteria. The Base Rate Curve Sheet was established on the basis of
the insurance and tax cos experienced as of the date indicated on Schedule 'A.

     b.  Method  ofAdjusrn'enr.  Any  increase  or decrease in the costs used in
subparagraph  3a.  above  shall  be  prorate  Tenant's  pro  rata  share of such
insurance or tax costs increase or decrease shall be a fraction, the which shall
be Tenant's floor area and the denominator of which shall be the aggregate floor
area of all tenan or other  occupants  connected  to the central  plant cold air
distribution system at the time of adjustment.

     4. Accounting and Administrative Personnel Cost Adjustment

     a. Base Criteria. The Base Rate Curve Sheet was established on the basis of
the average  accounting ar  administrative  personnel cost experienced as of the
date indicated on Schedule 'A.

     b. Method of Calculation. For each ten cent ($0.10) increase or decrease in
the average per hour accounting ar  administrative  personnel  costs, the annual
base rate per square foot shall be  correspondingly  increased  decreased to the
extent of two-tenths of one cent ($0002) per square foot of Tenant's  floor area
times tI number of accounting and administrative  personnel employed by Landlord
at the time of adjustment.

     B. Experience Adjustment

     In  addition  to the annual base rate  adjustment  provided in  Paragraph A
ofthis Section III, Landlord reserves the rig to increase or decrease the annual
base rate per squre  foot from time to time by the  issuance  ofa  revised  rate
schedu based on Landlord's accumulated experience compiled from the operation of
the ventilation  and central cold a distribution  system,  including  unusual or
extraordinary  costs in  maintaining,  repairing or replacing the ventilation ar
cold air distribution system.




                                       D-2
<PAGE>
[graphic]
<PAGE>
[graphic]
<PAGE>
                                SOUTH COAST PLAZA

              DETAILED DESIGN CRITERIA AND STANDARDS FOR LANDLORD'S

                           WORK AND FOR TENANT'S WORK

Table of Contents

<TABLE>
<CAPTION>
<S>                                                                                            <C>
SECTION I SPECIAL CONDITIONS FOR TENANT'S DESIGN AND CONSTRUCTION WORK                         E-2

SECTION II ENCLOSED MALL BUILDING SHELL                                                        E-3     

SECTION III ROOF MOUNTED PACKAGED VARIABLE AIR VOLUME VENTILATING AND AIR CONDITIONING SYSTEM  E-3

SECTION IV STORE FINISHING                                                                     E-4

A.           Architectural                                                                     E-4
B.           Signs                                                                             E-4
C.           Electrical                                                                        E-5
0.           Description of air Distribution System                                            E-5
E.           Landlord and Tenant Work Design Criteria for Plumbing and Gas Fitting             E-6

SECTION V BID AND CONSTRUCTION PROCEDURES FOR TENANT'S CONTRACTOR                              E-7
</TABLE>

     * THIS EXHIBIT SET FORTH. IN GREATER DETAIL,  CERTAIN ASPECTS OF LANDLORD'S
WORK AND TENANT'S WORK SET FORTH  GENERALLY IN EXHIBIT "C" AND SHOULD BE READ IN
CONJUNCTION

                                    EXHIBIT E

<PAGE>
     WITH EXHIBIT  "C."  EXHIBITS "C" AND o'E" ARE  INTENDED,  TOGETHER,  TO SET
FORTH COMPREHENSIVE  STANDARDS AND CRITERIA WITH RESPECT TO TENANT'S WORK IN THE
PREMISES.

     I SPECIAL  CONDITIONS  FOR  TENANTS  DESIGN AND  CONSTRUCTION  \WORK.  This
section sets font  minimum  standards of  performance  for the work  required of
Tenant by the Lease.

     A.Codes  and  Standards  All work  shall  comply in all  respects  with the
following:
 
     I.The  Uniform  Building  Code and/or  state,  county,  city or other laws,
codes,  ordinances,  and  regulations,  as cad may apply according to rulings or
determinations of governmental  authorities having  jurisdiction with respect to
thc Center.

     2.Applicable  standards  orthe  National  Board  ofFire  Underwriters,  the
National Electrical Code, the American Ga Association,  and the American Society
of Heating, Refrigerating and Air Conditioning Engineers.

     3.Building material manufacturers' specifications.

     B. Drawings and Specifications.

     I. Plans shall include:

     (a)Floor  Plan and  Merchandising  Plan (I/S" or 1/4"  scale)  showing  the
outline of the  Premises  and tht  location  and extent of interior  partitions,
sales fixtures,  racks and fittings,  decorative treatments,  signs and displays
storage,  shelving,  racks or other devices,  counters, and all other materials,
equipment  and  features  (other thai  merchandise)  installed  or placed in the
Premises.

     (b)Reflected  Ceiling Plan (1/8" or 1/4" scale)  showing the outline of the
sales area and the location,  type and size of lighting fixtures, air diffusers,
grilles, acoustical ceiling pattern or drywall and fire sprinkler heads.

     (c)Store Front  Elevations and Sections,  including sign design and details
(minimum 1/4" scale).

     (d)Architectural  cross  sections  and  details as required  (minimum  3/8"
scale).

     (e)All Interior Elevations (minimum 1/4" scale).

     (f)Color and material sample board.

     2.Preliminary  Plans and  Specifications  shall be  prepared  by a licensed
architect  and  shall be of the  degree 0  completeness  shown in the  "Standard
Preliminary  Drawings of Store and Finish Work" and "Sample Storefron  Elevation
Indicating Minimum Information for POM" collectively attached as Schedule "I" to
this Exhibit "E." Outlin  specifications  submitted with the  Preliminary  Plans
shall list the materials and equipment to be used.

     3.Working  Drawings  arid  Specifications  shall be  prepared by a licensed
architect  (electrical and mechanical desigi and construction  documents must be
prepared  by a  licensed,  professional  engineer)  and shall  include  drawing!
specifications  and bid  forms of such  scope  as to  completely  delineate  the
construction work to be performed including.
            
     (a)Electrical calculations showing:

     I.Number of circuits

     2.Connected load of each circuit

     3.Number of spare circuits

     (b)Mechanical calculations showing:

                                       E-2
<PAGE>
     1.The heating required (transmission and ventilation losses) in each space.
                    
     2.The  ventilation  supply  and  exhaust  required  for each  space and the
ventilation supply and exhau5 provided, if any.

     3.The cooling load in each space.

     4.The total air flow in each space.

     (c)Mechanical equipment data showing:

     I.Temperature control system including control diagram and specification of
make.

     2.Gas calculations as required by the gas company providing service.

     (d)Engineered  electrical drawings signed by an electrical engineer showing
electrical  loads in the  Premises an  accompanied  by detailed  electrical  and
mechanical calculations  demonstrating compliance with Divisions 1-4 of Title 24
of the California Administrative Code.

     C. Approval of Drawings,  Specifications  and Contractors.  In this Exhibit
"E" any  reference  to  "Landlord"  shall mea Landlord or  Landlord's  tenant or
construction   coordinator~or   other  agents.   The  merchandising   plans  and
preliminary  an  working  drawings  and  specifications  shall  comply  with the
provisions set forth in Exhibit "C," the South Coast Plaza architectural  design
criteria  manual  and this  Exhibit  "E" and  shall  be  subject  to  Landlord's
approval.  Later additions and/c  alterations must also comply with Exhibit "C,"
the South Coast Plaza  architectural  design  criteria manual and Exhibit "E" an
must be  approved by  Landlord.  Tenant  shall use  Landlord's  approved  tenant
improvement  contractor(s) ("Landlord contractor") to perform all Tenant's Work.
Tenant shall be notified in advance of the day when Tenant may commence work.
            
     D.Utilities. Tenant shall obtain and deliver to Landlord all approvals with
respect to  electrical,  gas, water and telephone work as may be required by the
utility companies  supplying the services.  Tenant shall obtain utility service,
including meter from the utility  companies which supply service unless Landlord
elects to supply service and/or meters.  Landlord, a independent contractor,  or
an authorized utility company, as the case may be, shall have the right, subject
to Landlord written approval, to run utility lines, pipes, conduits or ductwork,
where  necessary or desirable,  through attic space,  column space,  partitions,
beneath the floor slab,  in or through other pans of the Premises and to repair,
alter,  replace  or  remove  same,  all in a manner  which  does  not  interfere
unnecessarily with Tenant's use thereof.

     E.Casualty  Insurance  Requirements.  Tenant  shall  cause to be carried or
shall  self-insure  insurance  against  damage t fire and other  casualty to the
construction and  improvements to be made by Tenant.  Such insurance shall be in
the amount and with such extended coverage endorsements as are required pursuant
to Article VIII of the lease and shall name Landlord as an  additional  insured.
Certificates   for  such  insurance   shall  be  delivered  to  Landlord  before
construction is started  contractor's  equipment is moved on the site. If during
the course of  tenant's  Work any damage  shall  occur to the  construction  and
improvements  being made by Tenant,  Tenant  shall  repair the same at  Tenant's
cost.

     F.Landlord's  Right to Perform  Tenant's Work. As described in Exhibit "C,"
the design for Tenant's  ventilating and a conditioning  work shall be performed
by an air  conditioning  contractor  designated by Landlord,  at Tenant's  cost.
Landlord  shall also have the right (but shall not be  obligated)  to perform by
its own contractor or subcontractor,  on behalf of and f{ the account of tenant,
any Tenant's Work which Landlord  determines should be so performed.  Generally,
such work shall t work which affects any structural component, including out not
limited to, the Mall Building Shell or the general utility system located within
the Mall Building Shell. 

                                         E-2

<PAGE>
     Landlord may, at its option,  by written notice given at least five(S) days
prior to the commencement of such work, enter

     upon the Premises and perform such work and Landlord's cost of planning and
performing  such work shall become due and payable by Tenant as additional  rent
upon demand.  Similarly,  Landlord  may, if Tenant fails to properly  perform or
correct any of tenant's  Work  within  five (5) days after  written  notice from
Landlord to Tenant  setting  forth such  failure or  deficiency,  enter upon the
Premises and perform such work and  Landlord's  cost of planning and  performing
such work shall be payable by Tenant as additional rent upon demand.

     G.Cooperation. Tenant's architects, engineers, and contractors will work in
harmony  with  each  other and with  those of  Landlord  so as to insure  proper
maintenance of good labor relationships.

     H.  Coordination.  Tenant's  Work  shall be  coordinated  under  Landlord's
direction  with work being done by Landlord and other tenants in the Center,  so
that Tenant's Work will not interfere  with or delay the completion of any other
construction work in the Center.

     I.Acceptance  of work;  Completion  of  Punchlist  list  Items.  Landlord's
Acceptance  of Tenant's Work as being  complete in accordance  with the approved
Working  Drawings and  Specifications  and Exhibits "C" and "B" shall be subject
~to Landlord's  inspection and subsequent  written  approval.  Tenant shall give
Landlord  prior  written  notification  of the  anticipated  completion  date of
Tenant's Work and shall schedule a "walk-through"  prior to opening the Premises
for business. The walk-through shall be attended by Tenant,  Tenant's architect,
Tenant's contractor and a representative of Landlord.  A "punchlist" of items to
be completed and/or corrected by Tenant shall be compiled. Tenant shall promptly
correct and/or  complete all items on such punchlist and failure to do so within
thirty (30) days after the walk-through  shall permit Landlord,  without notice.
to correct and/or  complete such items pursuant to Article VII of the Lease.  IN
NO EVENT SHALL TENANT OPEN PRIOR TO SUCH WALK-THROUGH.

     j.Ownership of  Improvements.  Notwithstanding  any other provision of this
Exhibit "B,'t title to all of Tenant's Work under  construction or completed and
all  alterations,  improvements  and additions  thereto which are of a permanent
nature and affixed to the Premises shall vest in Landlord, except trade fixtures
and furniture installed by Tenant.


     II.ENCLOSED   MALL  BUILDING   SHELL  This  Section  sets  forth   detailed
specifications as to the Enclosed Mall Building Shell as constructed by Landlord
and described generally in Exhibit "C."

     A. Structure.
      
     I. Frame.  A structural  frame of steel and concrete  with floors and roofs
designed to carry the following allowable live loads per square foot: 
<PAGE>
     (a) First, Second and Third Level Mall 75 pounds

     (b) Roof 20 pounds

     (c) Court and Malls 100 pounds

     2. Walls.

     (a) The  interior  side of all  exterior  walls will be exposed  reinforced
concrete, exposed masonry or metal studs.

     (b) Interior  partitions  separating  tenant areas from common corridors or
stairs will be exposed  metal studs with finish  extended to structure  above on
common area side only.  Interior  wall finish will extend only to finished  wall
ceiling.

     (c)The  common  area side of common  corridors  and stairs will be finished
with a minimum of  five-eighths  inch (5/8") gypsum wall board or other one hour
fire rated materials.

     3.Exterior  Finishes.  Wall finish of a suitable  nature and of appropriate
material,  having a finished  appearance and  decorative  quality as designed by
Landlord's architect

     4. Interior Finishes.

     (a)Floors  for tenant areas shall be smooth cement  finish.  The floor slab
will be depressed 1/2" j below  Enclosed Mall finished  floor Tenant's  finished
floor elevation shall match the Enclosed Mall finished floor elevation.

     (b)Ceilings  for tenant  areas  shall be exposed  structural  steel  and/or
exposed concrete on all levels.

     B.Utilities.

     I.ElectricaL See Exhibit "C."

     2.Water. If tenant (except for restrooms) should require water, Tenant will
be individually supplied from Landlord's meter which will be located in a common
area  accessible to Tenant.  Tenant shall be responsible  for service lines from
connection with Landlord's main to Premises. Tenants engaged in food preparation
shall be responsible  for both the service line from  connection with Landlord's
main to Premises and the meter at Tenant's sole expense.

     3.Gas. If Tenant (excluding  Tenants involved in food  preparation)  should
require gas,  Tenant will be individually  supplied from Landlord's  meter which
will be  located  in a  common  area  accessible  to  Tenant.  Tenant  shall  be
responsible  for service line from  connection with Landlord's main to Premises.
Tenants involved in food  preparation  shall be responsible for both the service
line from  connection with Landlord's main to Premises and the meter at Tenant's
sole expense.

     4.Telephone. See Exhibit "C."

     5.Fire Sprinklers.  A complete system of fire sprinklers shall be installed
throughout the Enclosed Mall Building Shell as required by applicable Code.


     III.ROOF  MOUNTED  PACKAGED   VARIABLE  AIR  VOLUME   VENTILATING  AND  AIR
CONDITIONING SYSTEM.

     A.Roof mounted  packaged  variable air volume systems will serve all tenant
areas by means of medium  pressure duct mains which will  distribute air to each
tenant store.

     B.The  duct mains will  extend  into each  tenant  area for  connection  to
variable air volume (VAV) boxes  furnished by Tenant as a part of Tenant's Work.

     C.Temperature  controls shall be electric and furnished by Tenant as a part
of Tenant's Work and will vary the air volume to meet the space  temperature set
point. All boxes are to be pressure independent.

                                         E-3

<PAGE>
     IV. STORE  FINISHING.  This portion of this Exhibit shall govern the design
and  installation of architectural  finishes,  signs,  mechanical,  plumbing and
electrical Systems for store finishing.  Permission for any deviations by Tenant
from the provisions hereof must be obtained in writing from Landlord.

     A.  Architectural.  All materials and methods of construction listed herein
are  intended  to  indicate  the  minimum   acceptable   level  of  quality  and
performance.  Alternate or additional  materials and methods of construction are
subject to the prior written approval of Landlord.

     I.Areas in the Enclosed  Mall Building  accessible to customers,  including
but not limited to sales areas,  dressing and fitting rooms,  restrooms,  office
areas, etc.:

     (a)Ceilings  shall  be  gypsum  board  or  non-combustible   acoustic  tile
suspended on an adequate  concealed  spline  suspension  system  supported  from
hanger  wires.  The space  above the  ceiling  line which is not  occupied by or
allotted to Landlord's work (structural members, duct work, piping, etc.) may be
used for installation of suspended  ceilings.  recessed lighting  fixtures,  and
duct work.  Tenant ceiling and store front design shall be such that an eighteen
inch (IS")  smoke  curtain  drop is  maintained  between  the  Premises  and the
Enclosed Mall. 

     (b) Interior All partition  walls  separating  tenants or tenant areas from
common  areas will extend to a height of twelve feet with I" x I" wire fabric or
other security methods as approved by Landlord to structure. Finish materials on
partitions  separating  tenants or separating tenant areas from common corridors
or stairs will extend to Tenant's finished ceiling. All such partitions shall be
finished with five eighths inch (5/8") thick type X gypsum wallboard  applied to
metal  studs with  mechanical  fasteners  in such a manner  that the wall,  when
finished on both sides, will be an approved one-hour fire resistant wall. Joints
shall be taped and floated.

     (c)Partitions  within the Premises shall meet fire resistance  specified in
governing building code.

     (d)Floors.  Minimum  standards for floor  covering  where required shall be
resilient,  vinyl  tile.  All  raised  floor  areas  shall be of fire  resistant
materials  meeting  applicable  building  code  requirements  or be  serviced by
sprinklers meeting applicable code requirements.

     (e)Store Fronts.  All storefronts shall be creatively  designed in a manner
consistent  with the  architectural  integrity  of the  Enclosed  Mall and shall
incorporate  only first quality design,  architectural  detailing,  lighting and
security provisions.

     (f)Swinging  Entrance Doors must be recessed in such a manner that the door
when open will not project beyond the lease line defining the Premises. Entrance
doors shall have concealed door closers. No store front or any pan thereof shall
project beyond the lease lines  describing the limits of the Premises.  MI glass
in all entrance doors, and all glass in door sidelights, shall be heat tempered.

     (g)All  Planters  shall  be  self-contained  with  no  discharge  of  water
permitted and are subject to Landlord's approval.

     (h)Structural Members. Tenant will perform all necessary patching or repair
work with respect to  fireproofing  on all monocoate  structural  members in the
Premises.

     2.Areas not  accessible  to customers in the Enclosed  Mall  Building:  All
areas in the Enclosed  Mall  Building at all levels not  accessible to customers
shall have not less than the following minimum finish:

     (a)Ceiling Finish, Painting. Floor Covering not required.

     (b)Interior Metal Stud Partitions  separating  tenants or separating tenant
areas from common corridors or stairs shall be finished to structure  subject to
provisions for return air plennum,  with five-eighths inch (5/8") thick X gypsum
wall board  applied to metal studs with  mechanical  fasteners  in such a manner
that the wall when  finished  on both sides will be an  approved  one-hour  fire
resistant wall.
<PAGE>
     (c)Interior Partitions within Premises shall meet fire resistance specified
in governing code.

     B. Signs

     I.Introduction.  It is intended by these criteria that the signs for Tenant
stores be developed in an  imaginative  and varied  manner.  The  development of
signs  with  various  styles  and  materials,   consistent  with  the  materials
referenced below and the design criteria set forth below, is encouraged.

     2.Administration.  Landlord's  written  approval of tenant's  prepared sign
drawings and specifications is mandatory.  Landlord reserves the right to reject
any sign design which in its sole opinion is not  compatible  with the esthetics
of the Center  EXCEPTIONS TO SIGN CRITERIA WILL BE EXTREMELY RARE AND MUST BE IN
WRITING SIGNED BY LANDLORD OR ITS ARCHITECT

     3.Other Materials.  Landlord has established detailed sign criteria for the
Center,  and the  following  paragraph  is  merely a  summary  of the  principal
provisions  thereof A copy of such sign  criteria  is  attached  to the lease as
Exhibit "H." In addition, reference should also be made to the South Coast Plaza
architectural design criteria manual.

     4.Criteria. Interior Signs for tenants in Enclosed Mall Building:

     (a)All signs and identifying marks shall occur within the limits of demised
Premises  between the floor line and twelve-foot  ceiling line except as allowed
in (b) below.

     (b)Signs shall not project beyond the line of the Premises bordering common
areas more than two (2")  inches if less than  eight  (8') feet  above  finished
floor line or more than six (6") inches if above eight (8') feet.

     (c)Signs  may be placed at a right angle to the store front only inside the
lease line of the Premises.

     (d)The wording of signs shall be limited to the store name only.

     (e)Corporate crests, shields or insignia are acceptable.  Corporate crests,
shields or insignia shall not exceed eighteen (18") inches in width or height.

     (f)Multiple or repetitive  signs may be allowed provided the aggregate area
of such signs conforms to the limitations set forth herein.

     (g)Paper signs and stickers shall be prohibited.

     (h)Signs shall have no moving or flashing lights.

     (i)Letters may be  back-illuminated  with lamps contained wholly within the
depth of the  letter  and with  maximum  brightness~s  not in excess of 100 foot
lamberts.  Non-illuminated  letters  installed  entirely within the Premises may
deviate  from  restrictions  of height  and area  only  with the  prior  written
approval of Landlord.


                                         E-4

     <PAGE>
     (j)No exposed cond tubing, raceways,  ballast boxes, or transfu(pound)1ners
will be permitted.

     (k) Sign company names or stamps shall be concealed.

     (I) The average height of letters shall not exceed eighteen (IS") inches.

     (m) The total sign area (rectangle enclosing each group of letters. symbols
and logos) for each facade fronting on common area (Mall,  side malls,  and mall
courts), shall not exceed ten percent (10%) of the area of the store front.

     (n) Working Drawings must include sign design and specifications.

     (o) Sign shall be a minimum or three feet (30") from neutral  strip and the
horizontal  dimension  of signs shall not exceed  two-thirds  (2/3) the width of
store frontage.

     (p) Boxed, cabinet or "CAN" signs are not permitted.

     (q) Landlord has established  detailed sign criteria for the Center and the
foregoing is merely a summary of the principal provisions thereof A copy of such
sign criteria is attached to the lease as Exhibit "H."

     C. Electrical

     I. Electrical System shall be designed for available short circuit duty.

     2. Tenant's  Electrical~ Load for lighting and power requirements shall not
exceed an average of 4.5 watts per square foot of Floor Area.

     3.  Materials,  Products and Equipment,  including all components  thereof,
shall be new and selected from the  Underwriters  Laboratories  List of Approved
Items and shall meet requirements of ASTM, IESE, APCEA, NEC, NEMA. CBM and other
recognized  standards and shall be sized in conformity with  requirements of the
National  Electrical  Code  and  other  applicable  codes,  whichever  are  more
stringent. Copper wiring will be used exclusively in all installations.

     4. Lighting  Panelboards  shall be the 3 phase, 4 wire distributed  phasing
type, cabinets shall be constructed of code gauge steel, totally enclosed,  wall
mounted or free-standing.

     (a) All breakers shall be of the bolted type.

     (b) Lighting circuits shall be 20 ampere capacity,  with connected load not
to exceed 70% of breaker trip rating.

     (c) Circuit breakers shall be thermal  magnetic type,  molded case with all
two and three pole breakers of the common trip type.  One spare circuit  breaker
of 20 ampere capacity shall be provided for every five active circuits.

     5. Magnetic Motor Starters  shall be used for integral  horsepower  motors.
Starters  shall have three (3) overload  elements.  Combination  starters,  when
used,  shall contain AB circuit  breakers or fused  switches with double element
fuses.

     6.  Illumination.  The store  lighting,  especially  as it pertains to heat
production,  should be coordinated with the air conditioning design criteria set
forth in Paragraph D below. Store lighting shall not include exposed fluorescent
fixtures.

     7. Installation shall be as follows:

     (a)  All  work  shall  be  installed  so as to be  readily  accessible  for
operating, servicing, maintaining and repairing.

     (b) Hangers shall include all miscellaneous steel, such as channels,  rods,
etc.,  necessary  for the  installation  of work.  Hangers  shall be fastened to
steel,  concrete or masonry,  but not to piping and the electrical work shall be
installed in a manner which will not overload the building structure.
<PAGE>
     (c) All conduits shall be concealed.

     (d) Conductors shall be in conduits, ducts, or approved raceways.

     8.  Grounding  shall  be  as  follows:   (a)  Conductors  in  conduit.  (b)
Connections  bolted or brazed.  (c)  Connections  to cold  water  lines for each
conduit system and neutrals of transformer.

     9. Maintenance and Operation

     (a) Tenant shall maintain all electrical equipment and distribution systems
within the Premises and promptly replace faulty or burned-out lamps.

     (b) Tenant  shall keep the  Premises  adequately  lighted at all times when
open for business.

     10.  Electrical  Data  Tabulation.  Tenant shall  submit to  Landlord,  for
information and approval,  two copies of an electrical data tabulation  sheet on
Landlord's form,  completed with required data for  determination of service and
feeder

     11.Distribution  Panels shall be of the convertible type.  Circuit breakers
shall be  thermal  magnetic  type,  molded  case,  with all two and  three  pole
breakers of the common trip type.

     D. Description of Air Distribution System

     I.  Heating,  ventilating  and  conditioned  air for the Enclosed  Mall and
tenant  areas  will  be  provided   from  various  roof  mounted   packaged  air
conditioning units.

     2. All control systems will be electric.

     3. The heating,  ventilating and cooling systems for the Enclosed Mall will
be provided complete by Landlord.

     4. The  ventilating and cooling systems for the tenant areas will be of the
all-air  type.  Supply unit and unit  controls  will be provided by Landlord.  A
medium  pressure  supply main will run throughout each floor level within tenant
areas.  Low  pressure  ductwork  and the  variable  volume boxes will be part of
Tenant's Work. Also, Tenant's Work will include diffusers,  registers,  grilles,
duct  insulation,  and zone and area electric control devices within each tenant
area.  Spaces  above  ceilings  in tenant  areas will be  utilized as return air
plenums. Return air registers in tenant area ceilings will be provided as a part
of Tenant's  Work. A toilet exhaust main will also be provided for connection by
Tenant.

     (a) Tenant Area Criteria

     I. Design Conditions-Heating

     a) inside dry bulb temperature: 700 F

     b) Outside dry bulb temperature: 360 F

     2. Design Conditions-Cooling

     a) Inside dry bulb temperature: 750 F

     b) Maximum inside relative humidity: 50%


                                         E-5

<PAGE>
     c) Outside dry' bulb ten rature: 88~ F

     d) Outside wet bulb temperature: 70~ F

     3. Information on Supply' Air Quantities

     a) Tenant  Area:  Maximum of 1.20  average  CFM per square  foot over total
Floor Area.

     b) Outside Air: Maximum of 0.1 CFM per square foot (included in item a) (b)
Miscellaneous Tenant Responsibilities

     I. All odor and  moisture  producing  areas  must be  exhausted  by special
exhaust  systems to  atmosphere.  This  includes  employee  and public  toilets,
kitchens,  beauty parlors and alteration rooms. Special exhaust systems shall be
designed  to prevent  odors  and/or  moisture  from  entering  the  general  air
conditioning  system  and  from  traveling  beyond  the  Premises.  Exhaust  air
quantities shall not be less than required by code.

     2. Special  Exhaust  ~'stem shall be provided  com~lete by Tenant.  Work by
Tenant will  include  ductwork,  fans,  registers  and  grilles.  Ductwork  will
terminate  outside of building  above roof in  locations  approved by  Landlord.
Special  exhaust systems shall not draw air from the ceiling return air plenums.
In all cases,  ductwork  shall  connect  directly to exhaust hoods in ventilated
spaces or to registers or grilles mounted in ceiling in ventilated spaces.

     3. Any Special  Exhaust  Systems will have to be  compensated by additional
outside air make-up in the air conditioning system.  Therefore,  any exhaust air
will result in additional charges in accordance with the outside air charge rate
curve.

     4. Special cooling and heating  ~stenrs such as required for  refrigeration
display cases and walk-in coolers,  and for alteration room  steam-pressing  and
blocking  equipment shall be provided  complete by Tenant.  Energy and equipment
for  heating or cooling  shall be provided  entirely  by Tenant.  Any exhaust or
make-up air requirements for this service will be provided by Tenant and may not
be exhausted into the return air plenum.

     5. Location of Equipment  serving  special  exhaust and make-up air systems
and special heating and cooling  systems shall be designated  and/or approved by
Landlord.  Routing of  ductwork  serving  exhaust  and  make-up  air systems and
routing  of  piping  serving  special  heating  and  cooling  systems  shall  be
designated and/or approved by Landlord.

     6. All Tenant Stores Air Conditioning Exhaust or Special Cooling or Heating
Systems  shall be submitted  to Landlord for approval in the manner  provided in
Section 1 of this Exhibit "E."

     7. Maintenance.  Shall be performed by Tenant  periodically  throughout the
term on the VAV boxes and related parts of the system located in the Premises.

     (c) Requirements for Tenant's Work

     I. Design and Equipment Selection:


<PAGE>
     a) Refer to Tenant Area Criteria (Paragraph D.4.a above) for the following:

     I )Required cooling design conditions.

     2) Maximum supply air quantities provided by Landlord.

     3) Supply air temperatures.

     4) Supply air pressures.

     2. Materials and Methods of Construction and Workmanship

     a) MI material shall be new and free from defects.

     b) Installation and materials,  including ductwork and fire dampers,  shall
meet the  requirements  of the City of Costa Mesa, the State of California,  the
Factory  Insurance  Association  (FIA.),  and the Pacific  Fire  Rating  Bureau,
whichever is most stringent.

     c)  Allductwork  shall be galvanized  steel except  ductwork for kitchen or
other  special  equipment  which shall be in  accordance  with  applicable  code
requirements.

     d) Insulation on supply  ductwork  shall be no less than I" thick No. I pcf
duct wrap.

     e)  Allductwork  within the  Premises  shall be  complete  with  diffusers,
dampers, extractors, turning vanes. hangers and specialties.

     3. Testing and Balancing

     a) Allair  outlets  shall be adjusted as a pan of Tenant's  Work to provide
the air quantities shown on tenant air conditioning drawings.

     b) After  completion of air balance work,  the volume  adjustment  knobs or
levers on all air valves and mixing  boxes in the  Premises  shall be locked and
the keys shall be turned over immediately to Landlord.

     c)  Allair  balancing  shall be  performed  by a  certified  air  balancing
company.  After  completion  of air  balancing.  a  typewritten  report shall be
prepared by such company and three  copies  shall be submitted to Landlord.  The
report  shall show  actual air volume  readings at all inlets and outlets to the
air conditioning  supply,  exhaust and make-up air systems.  Static pressure and
air volume  readings  shall be shown for each supply and exhaust fan. Air inlets
and outlets,  fans and air handling  units shall be identified by  manufacturer,
type,  model  number and size.  Each report shall  include a summary  tabulation
showing the following:
                  
     1) Floor level and area in square feet of the Premises.

     2) Total CFM air supplied to the Premises from air conditioning system.

     3) Total CFM air exhaust from the Premises.

     4) Total CFM make-up air supplied to the Premises.

     E. Landlord and Tenant Work Design Criteria for Plumbing and Gas Fitting.

     1. All plumbing shall be  constructed  in  conformance  with all applicable
codes and ordinances.

     2.  During  the term of the  lease,  Tenant  shall  maintain  all  plumbing
facilities  in  conformance  with all  ordinances.  Tenant shall also  maintain,
including periodic flushing, Tenant's sewer line to Landlord's main.
<PAGE>
     3. If supplementary  plumbing facilities are installed,  service piping for
such facilities shall be concealed in accessible service chases.  Water closets.
urinals,  lavatories,  janitor sinks,  and drinking  fountains  shall be of good
standard  manufacture.  If hot water tank is provided by Tenant for its domestic
hot water  requirements,  then hot  water  tanks  shall be less than 80  gallons
capacity,  shall be  electric  automatic,  and shall have all  necessary  safety
controls.

     4. If food is prepared on the Premises,  Health Department requirements may
include (a)  enlargement  of the sewer line from the  Premises to the main sewer
line and (b) installation of a grease trap in any kitchen floor drain. Such


                                             E-6

<PAGE>
     installations,  and cleaning and n.  ..tenance  thereof in accordance  with
Health Department requirements,  shall be Tenant's sole responsibility,  both as
to payment of costs and performance.

     V. BID AND  CONSTRUCTION  PROCEDURES  FOR  TENANT'S  CONTRACTOR.  To assure
construction of Tenant's Work without undue  interference with the operations of
the Center and in compliance  with the  provisions of the Lease and Exhibits "C"
and "E," Landlord has designated a tenant improvement  contractor(s)("Landlord's
Contractor").  Landlord's  Contractor(s)  shall  be used by  Tenant  to  perform
Tenant's work and shall obtain a minimum of three (3) competitive  bids from all
subcontractors to assure a competitive cost for Tenant's Work. In addition,  all
HVAC design work must be performed by an air conditioning engineer designated by
Landlord.  When  requesting  bids or contracts  with  respect to Tenant's  Work,
Tenant shall present for signature  and return to Landlord  Landlord's  standard
form  "Contractors  Bid and.  Construction  Procedure"  (copies  of which may be
obtained from  Landlord's  construction  coordinator  located in the  Management
Offices of the Center). The following shall apply, however,  irrespective of the
execution  and return  ofsuch  instrument  and Tenant  shall,  in any event,  be
responsible for compliance with the following procedures.

     A. Procedures Regarding Bids and Contracti

     1. Each contractor  shall review the plans,  drawings.  specifications  and
other  descriptive  material  regarding  Tenant's  Work and direct any questions
regarding  these  materials  to Tenant's  architect or  Landlord's  construction
coordinator prior to submitting a bid or contract proposal.
         
     2.Each contractor shall review the lease exhibits which pertain to Tenant's
Work and become familiar with them.

     3.Each contractor shall state in his bid or contract proposal the number of
days required to complete Tenant's Work.

     4.Each  contractor shall state in his bid or contract proposal all items of
work that deviate from the approved plans,  drawings or specifications and shall
set fonh clearly the alternates which he proposes.

     5.Each contractor shall include in his bid or contract proposal a provision
that he will  guarantee  that  Tenant's  Work shall be free from any  defects in
workmanship  and  materials  for a period of not less than one (I) year from the
date  of  completion  thereof  Such  contractor  shall  be  responsible  for the
replacement or repair.  without additional charge, of all work done or furnished
in accordance with his contract which shall become defective within one (1) year
after  substantial  completion  of the work.  The  correction of such work shall
include,  without  additional  charge,  all  additional  expenses  or damages in
connection with such removal or replacement of all or any part ofTenant's  Work,
the Enclosed Mall Building Shell and/or the common area  improvements  which may
be damaged or disturbed  thereby.  Such warranties or guaranties as to materials
and  workmanship  of or with respect to Tenant's  Work shall be contained in the
contract and shall be so written that such guaranties or warranties  shall inure
to the benefit of both Landlord and Tenant,  as their  respective  interests may
appear and can be directly enforced by either. Upon completion of Tenant's Work,
the  contractor  and/or  architect  shall  furnish  to  Landlord  two (2) copies
approved by the contractor of all warranties,  guaranties and operating  manuals
relating to the equipment installed as a part of Tenant's Work.

     B. Procedures Prior to Commencement of Tenant's Work

     1.Tenant's  contractors  will review  Landlord's  "as-built"  drawings with
respect to the Center to become  familiar with existing  conditions  relating to
sewers, water lines, sprinkler lines, concrete slabs and structural members.4

     2.Tenant's  contractor  will visit the Premises and the Center to determine
the  location  of existing  "temporary"  power and will  arrange  for  temporary
electrical  service and other  temporary  utilities as necessary to the Premises
meeting all O.S.H.A.  codes. The cost of bringing such temporary services to the
Premises,  and the costs of such services,  shall be Tenant's  responsibility as
provided  in  Exhibit  "C."  Such   contractor   shall  review  with  Landlord's
construction  coordinator  the location of electrical  and other services and be
aware of the distance and requirements to bring these services to the Premises.
<PAGE>
     3.Tenant's contractor shall submit to Landlord's  construction  coordinator
for approval a list of proposed subcontractors and a bar chart progress schedule
listing suppliers, major items and any key sub-items.

     4.Tenant's contractor shall hold a pre-construction meeting with Landlord's
construction coordinator to review and schedule Tenant's Work and to discuss any
unusual aspects thereof or problems anticipated in connection therewith.

     5.Tenant's  contractor  shall  select only  subcontractors  who  diligently
perform their work in a timely manner.

     6.Tenant's  contractor shall obtain and pay for all necessary  permits with
respect to Tenant's Work.

     7.Tenant's  contractor  shall  obtain  from  each  subcontractor  a written
guaranty or warranty of the type set fonh in AS above, covenng the portion(s) of
Tenant's  Work for  which  such  subcontractor  is  responsible.  Tenant's  sole
responsibility, both as to payment of costs and performance.

     C. Procedures During Construction of Tenant's Work

     I.Tenant's contractor shall do or cause to be done all demolition work such
as  jackhammer  work,  concrete saw cutting,  wrecking and removal  oftrash in a
manner that does not create noise,  dust and interference with the operations of
the  Center.  All  jackhammer  and  similar  work shall stop at 10:00 A.M.  each
morning,  unless approval to continue past such hour is obtained in advance from
Landlord's construction coordinator

     2.Tenant's contractor and any subcontractor  participating in Tenant's Work
shall obtain approval from Landlord for any space outside of the Premises within
the Center, including all exterior areas, which such contractor or subcontractor
desires to use for storage,  handling and moving of materials and equipment,  as
well as for the location of any field office and/or facilities for personnel.

     3.Tenant's  contractor shall maintain a clean and orderly jobsite and shall
not use the  trash  removal  system  for the  Center to  remove  trash  form the
Premises.  Tenant's contractor and all subcontractors  participating in Tenant's
Work shall  remove and dispose of, at least once a week and more  frequently  as
Landlord  may direct,  all debris and rubbish  caused by or  resulting  from the
construction  of  Tenant's  Work and,  upon  completion,  remove  all  temporary
structures.  surplus materials, debris and rubbish of whatever kind remaining in
the  Premises or within the Center  which has been  brought in or created by the
contractor and subcontractors  performing  Tenant's Work. If any such contractor
shall  neglect,  refuse,  or fail to remove any such  debris,  rubbish,  surplus
material or  temporary  structures  within two (2) days after notice to Tenant's
contractor from Landlord,  Landlord may cause the same to be removed by contract
or otherwise as Landlord may determine expendient and charge the cost thereof to
such contractor.


                                             E-7

<PAGE>
     4. If the Premises have service~c doors, Tenant's contractors shall arrange
for all employees,  tools, equipment and supervisory personnel to enter and exit
the  Premises  through  such  service  doors.   Tenant's   contractor  shall  be
responsible  to clean up any dust,  dirt,  or tracks  which result from entry or
exit  through any other doors or  entrances to the Center When size and shape of
materials or equipment makes impossible the use of the service doors, permission
for access through other  entrances will be granted by the Security  Department,
but only prior to 10:00  A.M.  Where the  premises  do not have  service  doors,
Tenant's  contractor shall cause materials and major items to be delivered prior
to 10:00 A.M.  Tenant's  contractor  shall also maintain proper cleanup and dust
removal during the course of the working day.

     5.  Prior to the  installation  of floor  fill  which is  applied  over the
concrete sub-floor, a method of adhesion to the sub-floor shall be submitted for
approval  by  Landlord's  construction   coordinator.   Landlord's  construction
coordinator  shall  inspect the area to receive  floor fill prior to filling and
approve the method of adhesion.

     6. Tenant's  contractor will be responsible for advising his  subcontractor
doing fire  protection  work of Landlord's  regulations  and method of reporting
"shutdown" of landlord's fire  protection  system to Landlord prior to the start
of any work of this type. In addition, Tenant's contractor shall be aware of the
monocoate fire protection on structural  steel and shall be held responsible for
the protection and repair of same.

     7. Tenant's contractor shall notify Landlord's construction  coordinator in
writing of any long delivery or special  condition  items which appear to create
time delays or excessive costs with respect to Tenant's Work.

     D. Miscellaneous Procedures

     1.  Tenant's  Work and all portions  thereof  shall be performed in a first
class and workmanlike manner in conformity with the Working Drawings approved by
Landlord.  Any matters of design  criteria  or work which are not in  conformity
with the Working  Drawings and the  procedures set forth in this Exhibit "E" and
Exhibit "C" shall be promptly reported to Landlord's  construction  coordinator.
Upon  completion  of Tenant's  Work,  the  Premises  shall be in good and usable
condition.

     2.  Tenant's   contractor   shall  provide   on-the-job   supervision  when
subcontractors  or employees are working in the  Premises.  The  supervisor  for
Tenant's   contractor  shall  be  responsible  for  conformance  to  all  Center
regulations regarding tenant construction. A reasonable portion of Tenant's Work
shall be performed by Tenant's  contractor  to allow him to maintain  control of
the work in progress.

     3. Tenant's  contractor  shall maintain and require all  subcontractors  to
maintain  worker's  compensation  insurance  covering  all of  their  respective
employees and shall also carry public liability  insurance,  including  property
damage. with limits and on forms and in companies approved by Landlord,  and the
policies  therefor shall insure  Landlord and Tenant as well as the  contractor.
Certificates  for all of the foregoing  insurance shall be delivered to Landlord
before construction is started or contractor's equipment is moved onto the site.

     4. Tenant's  contractor  shall cooperate with and coordinate  scheduling of
construction with Landlord's construction coordinator to avoid interference with
other  construction  work in and  about  the  Center  or  interference  with the
operations of the Center and its tenants.

     5. Upon  completion  of tenant's  Work,  Tenant's  contractor  and Tenant's
architect   shall  furnish  to  Landlord  one  (I)  complete  set  of  as-built,
reproducible  drawings  on  mylar  depicting  the  improvements  constructed  as
Tenant's Work. As built drawings shall clearly show by means of notes,  clouding
and dates changes to the construction documents.


                                             E-8

<PAGE>
[graphic]
<PAGE>
[graphic]
<PAGE>



                   ACCELERATED BUILDING PLAN REVIEW AGREEMENT


     THIS AGREEMENT, dated ________ is made by the CITY OF COSTA MESA, municipal
corporation,  (CITY) and  _______________  (DEVELOPER)  and  (ENGINEER) IN Costa
Mesa, California.



                               W I T N E S S E T H

     WHEREAS,  the CITY has  established  a procedure  whereby a  DEVELOPER  may
retain the services or a qualified  independent ENGINEER to perform the building
plan review normally conducted by the CITY or its private contractors: and

     WHEREAS,  DEVELOPER proposes to utilize the accelerated plan review process
in   connection   with  the  proposed   development   of  property   located  at
__________________________ in the city of Costa Mesa; and

     WHEREAS,  ENGINEER  represents  that he is duly  licensed  by the  State of
California,   and  that  he   shall   meet  all   minimum   qualifications   and
responsibilities required by CITY as hereinafter stated; and

     WHEREAS,  DEVELOPER understands and agrees that no building permit shall be
issued  until  all  requirements  and  conditions  of this  agreement  have been
satisfied; and

     WHEREAS,  ENGINEER  represents  that  he has  that  degree  of  specialized
expertise contemplated within California Government Code Section 37103 and holds
all necessary licenses to practice and perform the services herein contemplated;
and

     WHEREAS,  no official  or employee of CITY has a financial  interest in the
subject  matter  of  this  agreement   contemplated  within  the  provisions  of
California Government Code, Sections 1090-1092; and

     WHEREAS,  ENGINEER  declares  that he shall  perform  the  services  herein
contemplated  in  compliance  with the Federal and  California  Laws  related to
minimum  hours and wages,  (40 U.S.C.  276 A ca seq. and  California  Labor Code
Section 6300 et. seq. and California  Labor Code,  Section 1410 et seq.), to the
extent same are applicable herein.

     NOW THEREFORE,  Inconsideration of the mutual promises of the parties,  and
other good and sufficient consideration, the parties agree to the following:

     I. BUILDING PLAN REVIEW SERVICES

     A.CITY does hereby agree to accept ENGINEER to perform building plan review
in accordance with the terms and conditions herein set forth.

     B.ENGINEER  shall review plans for compliance with pertinent City and State
regulations  falling within the purview of the building  official of the City of
Costa Mesa.

     II. FEES FOR BUILDING PLAN REVIEW SERVICE

     A.Fees for performing the building plan review shall be negotiated  between
DEVELOPER and the ENGINEER and said fees shall be paid to ENGINEER by DEVELOPER.
The CITY shall not be  responsible to ENGINEER to any extent for the fee owed by
DEVELOPER.  CITY shall not be called upon to assume any liability for the direct
or indirect  payment of the fee owed by  DEVELOPER  or of any salary.  wage,  or
compensation of any person employed by ENGINEER.
<PAGE>
     B.At the time the building permit is issued, an administrative fee equal to
25 percent of what would  normally  have been the plan check fee,  had the plans
been checked by the CITY.  will be charged and  collected by the CITY.  This fee
will be in addition to the building permit fee.

     III.LIABILITY EXPOSURE AND COVERAGE

     A.All officers,  agents,  employees, and subcontractors,  and their agents,
officers,  and  employees  who  are  hired  by or  engaged  by  ENGINEER  in the
performance of the building plan review.  shall be deemed officers,  agents, and
employees and  subcontractors  of ENGINEER only and CITY shall not be liable for
their acts or omissions nor responsible to them for anything whatsoever.

     B ENGINEER and DEVELOPER shall each separately  indemnify and save harmless
CITY, its officers,  and its employees,  from and against any and all damages to
property or injuries to, or death of any person or persons,  including  property
and employees of CITY, and shall defend, save harmless,  and indemnify CITY, its
officers,  and its  employees,  from and against  any and all  claims,  demands,
liabilities,  suits, actions, proceedings, or judgments therefor. resulting from
or arising out of their own negligent acts or omissions or the negligent acts or
omissions of their respective  employees or subcontractors;  except that neither
ENGINEER nor DEVELOPER  shall hereby incur any such obligation for the negligent
acts or omissions of the other.

     C.ENGINEER shall obtain and maintain the following insurance coverage:

     1. COMPREHENSIVE  GENERAL LIABILITY coverage with policy limits of not less
than$1,000,000  combined  single limit per  occurrence,  with CITY as additional
insured,  and  with  an  endorsement  thatthe  insurance  provided  the  CITY as
additional  insured shall be deemed  primary and  noncontributing  with anyother
insurance of CITY

     2.  PROFESSIONAL  LIABILITY  coverage  for  $1,000,000  with a  contractual
liability provision sufficient to insure Paragraph III. B. above. .4

     3. WORKER'S COMPENSATION INSURANCE in statutory amount.

     4. The general and professional liability insurance shall provide continued
coverage for at least  12months  following  completion  of  construction  of the
project and shall not be canceled,  modified,  or reduced  without  first giving
CITY thirty (30) days written notice.

     D. ENGINEER shall provide CITY certificates of insurance  acceptable to the
CITY  Attorney  showing  the above  coverage  and policy  endorsements  prior to
commencement of any plan check services.


                                  EXHIBIT F

<PAGE>
     IV. GENERAL CONDITIONS

     A. The  ENGINEER  shall  comply  with all the  provisions  of the  Worker's
Compensation  insurance  and  Safety  Acts  of  the  State  of  California,  the
applicable  provisions of Division 4 and S of the California Labor Code. and all
amendments  thereto,  and  regulations  adopted  pursuant  thereto  by the State
Department of Labor and similar State or Federal acts or laws applicable.

     B.ENGINEER  shall certify in a form and manner  acceptable to CITY that the
plans he has checked  comply with all  applicable  codes,  ordinances,  and laws
relating to the particular type of development  proposed and that permits may be
issued for the construction of same.

     C.If omissions or errors in the plans are  discovered  during the course of
construction,  corrections  shall  be  made at no cost  to  CITY.  and all  work
performed  shall be  required to comply  with the codes and  ordinances  of CITY
prior to final building inspection.

     D.DEVELOPER  shall,  prior to or concurrently with the building plan review
by ENGINEER, contact the Planning Division, Fire Marshal, and/or Public Services
Department  of  CITY,  the  Costa  Mesa  Sanitary'   District  and/or  the  Mesa
Consolidated Water District to determine any conditions or special  requirements
which  may be  administered  by those  departments.  Failure  to do so may delay
issuance of building permits.

     E.The licensed architect,  registered engineer, or other authorized person,
entity,  or  corporation  who prepared or supervised  preparation of the project
plans, specifications, and/or engineering calculations being reviewed, shall not
be associated in any way with ENGINEER.


     V.  RESPONSIBILITIES OF ENGINEER ENGINEER shall review plans for compliance
with  pertinent  CITY and State  regulations  falling  within the purview of the
building official of the CITY. More  specifically,  the services to be performed
by ENGINEER shall consist of but not be limited to:

    PLAN CHECK

     a.Classify the building and verify compliance for the following:

     I)Occupancy group

     2) Type of construction

     3) Location on property

     4) Floor area

     5) Height and number of stories

     6) Occupant load

     b.Verify compliance of the building with detailed occupancy requirements.

     C.Verify  compliance of the building  with  detailed  type of  construction
requirements.

     d.Verify compliance of the building with exit requirements.

     e.Verify compliance of the building with detailed Code regulations.

     f.Verify  compliance  with  engineering  regulations and  requirements  for
materials of construction.

     g.Verify  compliance with California  Title 24 by reviewing  mechanical and
electrical plan schedules and work sheets for thermal insulation.

     h.Verify  compliance  with  California  Title 25 and Section  13-144 of the
Costa Mesa  Municipal!  Ordinances  by  reviewing  mechanical,  electrical,  and
plumbing plans,  details,  calculations,  and any required Acoustical Engineer's
report.
<PAGE>
     i.Provide the following:

     I ) Coordinate with CITY Engineering personnel for grades determination

     2) Provide drainage review by CITY Ordinance

     3) Check drainage flow "Q" calculations

     j.Review plumbing, electrical, and heating drawings

     k. Provide for review and  verification of all of the above items until all
corrections are made and all data are in compliance with all codes,  ordinances,
and State and Federal Laws.


     VI. CERTIFICATION

     The  following  certification  statement  shall  appear on each page of the
drawings submitted and shall be signed and dated by the registered  architect or
ENGINEER:



                       ARCHITECT OR ENGINEER CERTIFICATION

     I hereby  certify  that the work  proposed  to be done on these plans is in
conformance with all Codes and Ordinances of the CITY of Costa Mesa and further,
if omissions or errors are discovered, I understand that the work performed will
be required to comply  with the Codes and  Ordinances  of the CITY of Costa Mesa
prior to final building inspection.

                  Signature                Date           State License


     VII.PERMIT ISSUANCE

     Building   permits  shall  be  issued  by  CITY  upon   completion  of  all
requirements  specified  above and upon  completion of all  requirements  of any
other affected department of CITY or other guvemmental agency.

                                     F-2

<PAGE>
     VIII. ACKNOWLEDGENIENTS

     - DEVELOPER and ENGINEER acknowledge that they have read and understand the
above statement of conditions,  requirements, and direction and agree to perform
accordingly.  Furthermore,  they  understand  that no building  permits shall be
issued for any project until these  requirements  have been satisfied,  and they
certify that no work has been  undertaken by the ENGINEER  involving  plan check
services prior to submittal of the required  certificates of insurance and prior
to approval of same by the Costa Mesa City Attorney.


     IX. INCORPORATION OF EXHIBIT AS TO SCOPE OF PROJECT

     The scope of project  description  attached hereto as Exhibit "A" is hereby
incorporated  by reference.  All of the  provisions of this  Agreement  shall be
construed in accordance  with the particular  project  covered by this AgreemenL
Without  limiting the generality of the foregoing,  DEVELOPER and ENGINEER shall
only be reponsible for compliance  ofthe plans and  construction  of the work in
accordance with such of the  requirements  set forth in Paragraph  Vabove as are
applicable to the particular project covered by this Agreement.


     IN WITNESS WHEREOF the parties have signed below.


    DEVELOPER:









     ENGINEER:












                                     F-3

<PAGE>
                   RULES AND REGULATIONS FOR SOUTH COAST PLAZA
                      WHICH CONSTITUTE A PART OF THE LEASE

     1. No tenant or its agents or employees  shall loiter in the enclosed  mall
areas or other common areas of South Coast Plaza (the "Center"),  nor shall they
in any way obsc;tict the  sidewalks,  entry  passages,  pedestrian  passageways,
driveways,  entrances and exits to the Center,  and they shall use the same only
as  passageways  to and from  their  respective  premises.  Each  tenant and its
employees  shall comply with all  regulations  with respect to the common areas,
including,  but  not by way of  limitation,  posted  speed  limits.  directional
markings and parking stall markings.  Landlord  reserves the right to exclude or
expel  from  the  Center  any  person  who,  in the  judgment  or  Landlord,  is
intoxicated  or under the  influence  of  liquor  or drugs,  or who shall in any
manner do any act in violation of the rules and regulations of the Center.

     2. No doors, windows, lights and skylights that reflect or admit light into
the common areas of the Center shall be covered or obstructed by any tenant, and
doors  leading into the common areas (other than the Enclosed  Mall) from tenant
premises shall not be left open by any tenant.

     3. Water  closets and urinals  shall not be used for any purpose other than
those for which  they were  constructed,  and no  rubbish,  newspapers  or other
substances  of any kind shall be thrown  into them.  No tenant or his agents and
employees shall throw or discard cigar or cigarette butts on other substances or
litter of any kind in or about South Coast Plaza,  except in receptacles  placed
therein for such purposes by Landlord or governmental authorities.  All garbage,
including  wet  garbage,  refuse and trash shall be placed by each tenant in the
receptacles  provided by Landlord for that purpose. No tenant shall place in any
trash  receptacle of the Center any material  which cannot be disposed of in the
ordinary and  customary  manner of trash and garbage  disposal.  All garbage and
refuse disposal shall be made in accordance with directions  issued from time to
time by Landlord.

     4. All trash.  refuse and waste materials  shall be regularly  removed from
the premises of each tenant of the Center, and until removal shall be stored (a)
in adequate  containers,  which such containers shall be located so as not to be
visible to the  general  public  shopping  in the  Center,  and (b) so as not to
constitute any health or fire hazard or nuisance to any occupant of the Center.

     5. No tenant shall place or allow anything to be placed against or near any
glass doors or windows whIch may, in Landlord's  opinion,  appear unsightly from
outside the Premises.

     6. No tenant shall do anything in any  premises,  or bring or keep anything
therein,  which will in any way increase or tend to increase the risk of fire or
the rate of fire insurance or which shall conflict with applicable law, rules or
regulations established by any governmental body or official havingjurisdiction,
the  regulations of the fire department or the provisions or requirements of any
insurance  policy on such  premises or any pan thereof.  No tenant shall use any
machinery in its premises, even though the installation may have been originally
permitted, which may cause any unreasonable noise orjar, or tremor to the floors
or  walls,  or which by its  weight  might  injure  the  walls or floors Sr such
premises or any other portion of the Center.

     7. No tenant  shall place a load upon any floor which  exceeds the load per
square foot which such floor was  designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight,  size and position of all
equipment,  materials,  furniture or other  property  brought into any premises.
Heavy objects shall stand on such  platforms as are determined by Landlord to be
necessary to properly  distribute the weight, and each tenant shall pay the cost
of any structural bracing required by Lanllord to accommodate the same. Business
machines and mechanical  equipment  belonging to any tenant which cause noise or
vibration  that may be  transmitted to the structure of any tenant's store or to
any space therein to such a degree as to be  objectionable to Landlord or to any
tenants shall be placed and maintained by such tenant, at such tenant's expense,
on vibration  elimination  or other  devices  sufficient  to eliminate  noise or
vibration. The persons employed to move such equipment in or out of any tenant's
store must be acceptable to Landlord.  Landlord will not be responsible for loss
of, or damage to, any such equipment or other  property from any cause,  and all
damage done to any building or the common areas of the Center by  maintaining or
moving such  equipment or other property shall be repaired at the expense of the
tenant causing the same.
<PAGE>
     8. No tenant or its  agents  and  employees  shall make or permit any loud,
unusual or improper  noises in the Center,  nor  interfere in any way with other
tenants or those having  business with them,  nor bring into nor keep within the
Center any animal or bird, or any bicycle or other vehicle, except such vehicles
as tenants are  permitted to park in the Center  parking lot, and Tenant and its
agents and employees  shall park only in the areas  designated from time to time
for employee parking generally.

     9. No tenant shall install any radio or television antenna,  loudspeaker or
other device on the roof or exterior  walls  ofsuch  tenant's  store.  No tenant
shall  interfere with radio or television  broadcasting  or reception from or in
the Center or elsewhere.  No tenant shall install,  maintain or operate upon any
premises or in any common  areas  under the  exclusive  control of Landlord  any
vending machines or video games without Landlord's prior written consent. If any
tenant requires telegraphic,  telephonic,  burglar alarm or similar services, it
shall first obtain, and comply with,  Landlord's  instructions  concerning their
installation.  No tenant  shall engage in the sale of tickets or coupons for any
lottery or other games of chance.

     10. No portion of the Center shall be used for lodging purposes.

     11. All freight must be moved into,  within and out of tenant premises only
during such hours and according to such  regulations as may be established  from
time to time by the  General  Manager  of the  Centen  No  person  shall use any
utility  area,  truck and  trash  facility  or other  area  reserved  for use in
connection  with the conduct of business,  except for the specific  purposes for
which intended.

     12.  Tenants are  required to observe  all  secunty  regulations  issued by
Landlord  and  to  comply  with  instructions  and~or  directions  of  the  duly
authorized  security  personnel for the protection of the Center.  Access by any
tenant to his premises or the Center  before or after hours  ofoperation  of the
Center shall be subject to clearance by the security personnel of the Center and
to  compliance  with  such  procedures  as may be  imposed  by  such  personnel,
including presentation of identificatior satisfactory to such personnel.

     13. No tenant and no  employee  or invitee of any tenant  shall go upon the
roofof the Center without the prior approval ot Landlord.


                                  EXHIBIT G

<PAGE>
     14. No person shall use any roadway,  walkway or mall, except as a means of
egress  from or  ingress to any store and  automobile  parking  area  within the
Center,  or adjacent public streets.  Such use shall be in an orderly manner, in
accordance with the directional or other signs or guides.  Roadways shalt not be
used at a speed in excess or  twenty  (20)  miles per hour and shall not be used
for  parking or  stopping,  except for the  immediate  loading or  unloading  of
passengers.  No  walkway  or the  Enclosed  Mall  shall be used for  other  than
pedestrian travel.

     15. No person shall use any automobile  parking area except for the parking
of motor vehicles during the period of time such person or the occupants of such
vehicle are customers or business invitees of the retail, service and restaurant
establishments  within  the  Center.  All motor  vehicles  shall be parked in an
orderly manner within the painted lines defining the individual  parking places.
During peak periods of business  activity,  limitations may be imposed as to the
length of time for parking use. Such limitations may be made in specified areas.

     16. No person, without the written consent of Landlord,  shall in or on any
part of the Common Area:

     (a)Vend,  peddle  or  solicit  orders  for  sale  or  distribution  of  any
merchandise,  device,  service,  periodical,  book,  pamphlet  or  other  matter
whatsoever.

     (b)Exhibit any sign, placard, banner, notice or other written material.

     (c)Distribute any circular, booklet, handbill, placard or other material.

     (d)Solicit  membership in any  organization,  group or  association  or any
contribution for any purpose.

     (e)Parade, rally. patrol, picket, demonstrate or engage in any conduct that
might tend to interfere  with or impede the use of any of the common area by any
permittee,  create a disturbance,  attract attention or harass. annoy, disparage
or be detrimental to the interest of any of the retail establishments within the
Center.

     (f)Use  any common  area for any  purpose  when none of the  establishments
within the Center is open for business or empjoyment.

     (g)Throw,  discard or deposit any paper,  glass or extraneous matter of any
kind, except in designated receptacles, or create litter or hazards of any kind.

     (h)Use  any  sound-making  device of any kind or create or  produce  in any
manner noise or sound that is annoying.  unpleasant, or distasteful to occupants
or permittees of the Centen

     (i)Deface,  damage  or  demolish  any  sign,  light  standard  or  fixture,
landscaping  material or other improvement within the Center, or the property of
customers, business invitees or employees situated within the Centen

     17. The  requirements  of any tenant will be attended to only upon  written
application to Landlord at the general  offices of the Center,  and employees of
Landlord  shall not  perform any work or do  anything  outside of their  regular
duties except upon instructions from Landlord.
   
     18.  Landlord  may waive any one or more of these  rules for the benefit of
any  particular  tenant or  tenants,  but no such  waiver by  Landlord  shall be
construed as a waiver of such rules in favor of any other tenant or tenants, nor
prevent Landlord from thereafter  enforcing any such rules against any or all of
the tenants of the Centen No waiver of any rule or regulation by Landlord  shall
be effective unless expressed in writing and signed by Landlord.

     19.  Landlord  reserves  the  right to close  and keep  locked  any and all
entrances  and exit doors of the Center and gates or doors  closing  the parking
areas  thereof  during such hours as Landlord may deem to be  advisable  for the
adequate protection of the Center.
<PAGE>
     20.  Landlord  reserves  the right,  at any time,  to change or rescind any
one~or  more of these  rules and  regulations  or to make such other and further
reasonable rules and regulations as in Landlord's judgment may from time to time
be necessary for the management. safety, care and cleanliness of the Center, for
the preservation of good order therein and for the convenience of tenants of and
visitors to the Center.  Any such  amendments.  deletions  or additions to these
rules and regulations  shall be effective  immediately  upon delivery of written
notice thereof to tenants.

     21. Each tenant shall abide by any additional  rules or  regulations  which
are ordered or requested by any governmental or military authority.  Each tenant
shall be responsible for the observance of these rules and any such rules by its
employees, agents, clients, customers. invitees and guests.

     22.  Landlord shall not be responsible to any tenant or to any other person
for the  non~bservance  or violation of these rules and regulations by any other
tenant or other person.

     23. A copy of these rules and  regulations  shall be attached to and form a
part of each  tenant  lease at the Center.  Each tenant who  executes a lease of
space at the Center shall be deemed to have read these rules and regulations and
to have agreed to abide by them as a condition to its  occupancy of space at the
Center. In the event of any conflict between these rules and regulations, or any
amendments or additions thereto,  and the provisions of any tenant's lease, such
lease provisions shall control. 

                                      G-2

<PAGE>
                                 SIGN CRITERIA

     These  criteria  have been  established  for the  purpose  of  assuring  an
outstanding  shopping  center,  and for the mutual benefit of all tenants of the
Center.  Conformance will be strictly enforced; and any installed  nonconforming
or  unapproved  signs must be brought  into  conformance  at the  expense of the
tenant who installed the same.

     The Center  Architect is to administer  and interpret the criteria,  but is
not empowered to authorize any departure without written approval of Landlord.

     A. GENERAL REQUIREMENTS

     1.Each  tenant  shall  submit  or cause to be  submitted  to  Landlord  for
approval before  fabrication at least three copies of detailed drawings covering
the location, size, layout, design and color of the proposed sign, including all
lettering and/or graphics.

     2.No signs shall be  permitted  outside of the  Enclosed  Mall areas unless
approved by Landlord.

     3.All  permits  for signs and their  installation  shall be obtained by the
tenant or his representative.

     4.Each tenant shall be responsible for the fulfillment of all  requirements
and specifications contained herein and in Exhibit "E" and the South Coast Plaza
architectural design criteria applicable to tenant signs.

     B. DESIGN REQUIREMENTS

     I.Signs  shall be  permitted  only within the sign areas as  designated  by
Landlord, and as shown on the approved improvement plans.

     2.The horizontal  dimension of signs shall not exceed  two-thirds (2/3) the
width of store frontage.

     3.The total sign area (rectangle  enclosing each group of letters,  symbols
or logos) shall not exceed ten percent (10%) of the area of the store front, and
shall be located at least thirty-six inches from each lease line.

     4.While  it is desired  to permit  tenants  to present to the public  their
typical sign image,  signs which do not conform to the  dimensions  and location
described in Section B-2 above must be submitted to Landlord for approval.

     5.No signs  perpendicular  to the face of the  building  shall be permitted
unless uniformly established by Landlord and the Project Architect, and as shown
on the approved improvement plans.

     6.No  signs of any sort  shall be  permitted  on canopy  roofs or  building
roofs.

     7.Wording of signs shall not include the product sold except as a part of a
tenant's trade name or insignia.

     8.No sign, or any portion thereof,  may project above the parapet or top of
the wall upon which it is mounted.

     C. GENERAL SPECIFICATIONS

     1.Painted  lettering  will not be  permitted,  except  as  specified  under
Article D- 2. Paper signs and stickers shall be prohibited.

     2.Flashing. moving or audible signs will not be permitted.

     3.Pylon or pole signs will not be permitted.
<PAGE>
     4.All electrical signs shall bear the UL label, and their installation must
comply with all local building and electrical codes.

     5.No exposed conduit, tubing, raceways,  ballast boxes or transformers will
be permitted.

     6.No exposed neon  lighting  shall be used on signs.  symbols or decorative
elements.

     7.All conductors, transformers and other equipment shall be concealed.

     8.Electrical  service to all signs shall be on a tenant's  meter and not be
part of common area construction or operation costs.

     9.All signs,  bolts,  fastening and clips shall be of hot dipped galvanized
iron, stainless steel, aluminum, brass or bronze. and no black iron materials of
any type will be permitted.

     10.Exterior  signs for mall tenants will not be  permitted,  except where a
mall tenant has an entry or window  penetrating  the exterior  wall or the mall.
All exterior  letters or signs  exposed to the weather  shall be mounted with at
least 3/4"  clearance  from the  building  wall to permit  proper dirt and water
drainage.

     11.Location  of all  openings  for  conduit  and  sleeves in sign panels of
building walls shall be indicated by the sign  contractor on drawings  submitted
to Landlord.  Each tenant sign contractor  shall install his signs in accordance
with the approved drawings.

     12.No sign maker's labels or other  identification will be permitted on the
exposed  surfaces of signs,  except  those  required by local  ordinance,  which
latter shall be in an inconspicuous location.

     13.Except  within the  Enclosed  Mall,  all  penetrations  of the  building
structure  required for sign installation shall be neatly sealed in a watertight
condition.

     14.Each sign  contractor  shall repair any damage to any work caused by his
work.

     15.Each  tenant shall be fully  responsible  for the operations of its sign
contractors.

     D. MISCELLANEOUS REQUIREMENTS

     I.Each tenant will be permitted to place upon each entrance of its premises
not more than 144 square inches of gold leaf or decal application lettering, not
to  exceed  two  inches  in  height,  indicating  hours of  business,  emergency
telephone numbers, etc.

     2.Each tenant who has a  non-customer  door for receiving  merchandise  may
have  uniformly  applied on said door in a location as directed by Landlord,  in
two inch high block letters, the tenant's name and address.  Where more than one
tenant  uses the same door,  each name and address  shall be  applied.  Color of
letters will be as selected by Landlord.

     3.A tenant may install on the Enclosed Mall front,  if required by the U.S.
Post  Office,  the  numbers  only for the street  address in the exact  location
specified by Landlord.  Size, type and color of numbers shall be as specified by
Landlord.

     4.All  provisions  relating to tenant signs contained in Exhibit "E" to the
lease form and in the South Coast Plaza architectural design criteria manual are
also incorporated  herein by this reference and are included in the requirements
to be met by tenant pursuant to this Exhibit "H."

                               EXHIBIT H

<PAGE>
     E. DEPARTMENT STORES

     I.The provisions of this Exhibit, except as otherwise expressly provided in
this  Exhibit,  shall  not be  applicable  to the  identification  signs  of the
department stores, it being understood and agreed that the department stores may
have their usual identification  signs on their buildings,  as the same exist on
similar  buildings  operated  from time to time by them in Southern  California:
provided,  however,  there  shall  be no  roof-top  signs,  or signs  which  are
flashing,  moving or audible  and that such  signs  comply  with all  applicable
requirements  of governmental  authorities  having  jurisdiction.  Enclosed Mall
entrance  signs at each level  shall be similar to those of the same  department
stores in other Enclosed Ni all shopping centers in Southern California.

     2.Nothing  herein  shall be deemed to prohibit the  department  stores from
having  identification  signs attached to the exterior facades of any mechanical
penthouse upon its respective Store, provided that such sign(s) shall not extend
higher than the top of such penthouse.

     F. RELATED PROVISIONS No tenant shall, without the prior written consent of
Landlord:

     1. ~.Install o? use in the Center any sign or advertising  material that is
not  professionally   done,  that  does  not  conform  to  all  pertinent  laws,
ordinances, rules and regulations, or that is not safe, secure, and structurally
sound.
  
     2.Install or affix any exterior  shades,  awnings or  decorations.  For the
purpose of this provision,  the term  "exterior"  shall mean, but not be limited
to,  exposures on the Enclosed Mall,  automobile  parking area, and other common
area.
    
     G.  ADMINISTRATION In the event any conflict of interpretation  between any
tenant  and  Landlord  as  to  the  application  of  these  criteria  cannot  be
satisfactorily  resolved,  the  decision of Landlord  shall be final and binding
upon the tenant.

















                                  H-2

<PAGE>
                             GUARANTY OF OBLIGATIONS
                           OF TENANT PURSUANT TO LEASE


     In  consideration  of the  execution  by SOUTH  COAST  PLAZA  EXPANSION,  a
California Limited  partnership  ("Landlord"),  of that certain lease dated July
31, 1986 (the "Lease") between Landlord, as landlord, and TOYS INTERNATIONAL,  a
California corporation, as tenant ("Tenant") and as an inducement to landlord to
execute the Lease,  the  undersigned  hereby  guarantees  to Landlord and to its
successors and assigns, the payment by Tenant when due of the rent and all other
sums provided for in the Lease and the due  performance  by Tenant of all of the
provisions of the Lease and any and all modifications or extensions  thereof. In
the event of Tenant's failure,  or the failure of its successors or assigns,  if
any,  to pay said sums or to render any other  performance  required  of Tenant,
when due, the  undersigned  will  forthwith  pay all amounts that may be due and
will  forthwith  perform all of the  provisions of said Lease to be performed by
Tenant and pay all damages that may result from the  non~performance  thereof by
Tenant- The  undersigned  hereby consents to and waives notice of any extensions
of  time  for  performance  which  Landlord  may  grant  to  Tenant  and  to any
modifications  or amendments of said Lease or extensions or renewals of the term
thereof to which  Landlord and Tenant,  or their  successors  and  assigns,  may
agree.

     The  undersigned  waives  notice of  acceptance of this Guaranty and of any
default in the payment of rent,  additional rent or any other amounts  contained
or reserved in said Lease, and notice of any breach or non~performance of any of
the covenants, conditions or agreements contained in said Lease.

     The  undersigned  further agrees that the liability  under this Guaranty of
the  undersigned  shall be  primary,  and that in any right of action  which may
accrue  to  Landlord,  its  successors  or  assigns,  under  said  Lease or this
Guaranty,  Landlord and its  successors or assigns,  at their option may proceed
against the undersigned without having taken or commenced any action or obtained
any judgment  against Tenant and without  applying any security deposit or other
property  of Tenant or any other  person  held as  collateral  security  for the
performance  of the  obligations  of Tenant  under the Lease or otherwise to the
discharge of the obligations of Tenant under the Lease.  The undersigned  waives
any right to require  Landlord to pursue any remedy in Landlord's  power against
Tenant and waives as  defenses  to the  obligations  hereunder  the  pleading or
defense of any statute of limitations. Any partial payment, performance or other
circumstance  which  operates  to toll any statute of  limitations  as to Tenant
shall operate to toll the statute of  limitations  as to the  undersigned  under
this Guaranty.

     Neither the  obligation  of the  undersigned  to make payment in accordance
with the terms of this Guaranty nor any remedy for the enforcement thereof shall
be impaired,  modified, changed, released or limited in any manner whatsoever by
any impairment,  modification, change, release or limitation of the liability of
Tenant,  or its estate in  bankruptcy,  or  otherwise,  or of any remedy for the
enforcement thereof, resulting from the operation of any present or






JWD-l8D:05

<PAGE>

     future  provision of the federal  Bankruptcy Code or any other statute,  or
from the decision of any Court.

     Landlord may,  without notice to or demand upon the undersigned and without
affecting the obligation of the  undersigned  hereunder,  take and hold security
for the  obligations  under this  Guaranty  and the Lease,  add to,  exchange or
release  any such  security,  apply or realize  upon such  security  as Landlord
determines and release) add or substitute any one or more guarantors should more
than one person or entity be or become  liable on this  Guaranty.  Landlord  may
exercise any right or remedy it may have against  Tenant or any security held by
Landlord  without  impairing the obligation of the undersigned on this Guaranty,
and the undersigned waives any defense arising out of the absence, impairment or
loss  of  any  right  of  reimbursement,  Subrogation  or  other  remedy  of the
undersigned  against  Tenant or any such  security,  whether  resulting from any
election by Landlord or otherwise.

     The  undersigned  assumes  the  responsibility  to  keep  informed  of  the
financial condition of Tenant and all other circumstances  bearing upon the risk
of non-payment  or  non-performance  by Tenant under the Lease,  and agrees that
absent a request for such information by the undersigned, Landlord shall have no
duty to advise the undersigned of information  known to Landlord  regarding such
condition or  circumstances.  Liability of the  undersigned  under this Guaranty
shall not be terminated by the death of the  undersigned  and all obligations of
Tenant  existing  prior to the  death of the  undersigned,  or any of them,  but
becoming due  thereafter or due but unpaid at the death of the  undersigned,  or
any of them,  shall survive and become payable by the estate of the undersigned.
This  Guaranty  shall  bind the  undersigned,  his  successors,  administrators,
executors, heirs and assigns.

     Should any action at law or in equity be filed or  instituted  to  construe
the terms of, for the breach of, to  enforce  the terms of, or to  interpret  or
declare the rights of the parties under this Guaranty,  the successful  party in
such action shall,  in addition to all other relief  afforded to the  successful
party,  recover  its or his costs and  expenses  (whether  or not  taxable)  and
reasonable attorneys' fees incurred in such action.

     The  undersigned  agrees that this Guaranty is made and executed  under and
shall be construed in accordance with the laws of the State of California,  that
the  Courts of the State of  California  shall have  jurisdiction  of any action
brought upon this Guaranty and that venue may be placed in the Superior Court of
the County of Orange with service of process in accordance  with the  California
Code of Civil Procedure as then in effect.

     Landlord  may,  with or  without  notice to the  undersigned,  assign  this
Guaranty in whole or in part. The undersigned  expressly waive the provisions of
Section 2845 of the Civil Code of California.

     All notices  required or permitted  pursuant to this  Guaranty  shall be in
writing and shall be personally  served or sent by registered or certified mail,
return receipt requested to Landlord at its address pursuant to the Lease


                                   2

<PAGE>
     or to the  undersigned  at his address set forth below his  signature.  Any
notice  personally  served shall be effective upon delivery.  Any notice sent by
registered or certified mail, properly addressed,  postage prepaid and deposited
in the United States mail in the State of  California  shall be effective on the
date of  delivery,  refusal or  non-delivery  indicated  on the return  receipt.
Either  Landlord or the undersigned may change its or his address for notices by
written notice to the other pursuant to this  paragraph.  EXECUTED this ____ day
of o 1986.




                                         Address for Notices:
                                         do Toys International
                                         South Coast Plaza
                                         3333 Bristol Street
                                         Costa Mesa, CA 92626


                                   3

<PAGE>




                                      10.79

                    Lease Agreement for Store - Century City.



<PAGE>

[GRAPHIC OMITTED]


                              CENTURY CITY SHOPPING
                                     CENTER





                               RREEF USA Fund-II,
                                    Landlord




                                       and
                              TOYS INTERNATIONAL,
                            a California corporation


                                     Tenant

<PAGE>
                          CENTURY CITY SHOPPING CENTER


     In consideration of the rents and covenants hereinafter Set forth, Landlord
hereby leases to Tenant,  and Tenant hereby leases from Landlord the  following;
described premises upon the following terns and conditions.
<TABLE>
<CAPTION>



                             BASIC LEASE PROVISIONS

Lease Reference Date November 15, 1989

Landlord:     RREEF USA Fund-II, a California Group Trust, suite 196
              10250 Santa Monica Boulevard, Los Angeles, CA 90067

Tenant:       TOYS INTERNATIONAL,  a California Corporation

Tenant's Trade Name: "TOYS INTERNATIONAL"

Premises:  Building  B  first  level  Space  No.  10 

     (see Exhibit "A" for depiction of attached) hereto and incorporated  herein
~ reference)

<S>                                                                                                 <C>   
Floor Area of Premises: Approximately 3,869 square feet                                             (section 16.04)

Use of Premises: The retail sale of toy's and hobbies and                                           (Section 6.01)
for no other purposes

Radius length : See paragraph of Addendum No.1.                                                     (Section 6.03)
Lease Term: 8                 years, 5             months, 0                 days                   (Section 2.01)


Lease Commencement 1, 1989 (See paragraph 4 of Addendum No.1)
Rent Commencement: September 1, 1989                                                                (Section 2.02)
Lease Termination : Jan 31, 1998

Initial monthly Minimum Rent: See paragraph 1 of Addendum No. 1
Rent: Six percent (6%).

Payable monthly after Tenant has exceeded annual breakpoint
Breakpoint: See paragraph 2 of Addendum No. 1

Security Deposit: $none     Payable: n/a



Addresses for Notices:

To Landlord:

The RREEF  Funds
Regional Shopping center Division
650 California Street, lath Floor
San Francisco, California 94108
                                                                                        (Section 3.01) (Section
                                                                                        3.03)
To

TOYS INTERNATIONAL
 3333 Bristol Street
Costa Mesa, CA  92626
Attn: Gayle Hoepner

with a copy to:

RREEF USA Fund-II, A california corporation
Group Trust
Century City Shopping Center #196
10250 Santa Monica Boulevard
Los Angeles, CA  90067
Attn:    General Manager


TOYS INTERNATIONAL
10250 Santa Monica Blvd. suite B-10
Los Angeles, CA  90067
Attn:    Gayle Hoepner


</TABLE>

                                        i

<PAGE>





                       CENTURY CITY SHOPPING CENTER LEASE

                                      INDEX

ARTICLE

I     PREMISES                                              1
II    TERM                                                  1
III   RENT                                                  2
IV    RECORDS, REPORTS AND ACCOUNTING                       3
V     TAXES                                                 4
VI    CONDUCT OF BUSINESS BY TENANT                         5
VII   MAINTENANCE. REPAIRS AND ALTERATIONS                  6
VIII  INSURANCE AND INDEMNITY                               7
IX    REPAIRS AND RESTORATION                               9
X     ASSIGNMENT AND SUBLETTING                             10
XI    EMINENT DOMAIN                                        12
XII   UTILITY SERVICES                                      12
XIII  DEFAULTS AND REMEDIES                                 13
XIV   COMMON AREAS                                          16
XV    SIGNS, LIGHTING AND ADVERTISING                       17
XVI   MISCELLANEOUS                                         18
XVII  CONSTRUCTION OF PREMISES                              25
XVIII OPERATIONAL PROVISIONS                                27

Exhibit "A" - Plot Plan of Premises
Exhibit "B" - Site Plan of Shopping  Center
Exhibit  "C" - Rules and  Regulations
Exhibit  "D" -  Requirements  for  Tenant Construction
Exhibit  "E" -  Tenant  Sign  Criteria
Exhibit  "D-2~--  Tenant's Remodeling Requirements



<PAGE>
     The Basic  Lease  provisions  are an  integral  part of this lease and each
reference in this lease to any of the Basic Lease  Provisions shall be construed
to incorporate all or the terms provided under each such Basic Lease  Provision.
In (lie event or any conflict between any Basic Lease Provision and tine balance
or the lease, the latter shall control.  References to specific sections are for
convenience  only and  designate  some of the sections  where  references to the
particular Basic Lease Provisions appear.


LANDLORD:                                    TENANT:

RREEF USA Fund-It, a California              TOYS INTERNATIONAL,
Group Trust                                  a California corporation

By:RREEF MANAGEMENT COMPANY, a
    California corporation




By                                        By
   Lynda Bundrock                            Gayle Hoepner

Title Vice president,                        Title: President
   Director of Leasing   regional
   shopping center Division)

Dated:


Thomas F. Heyse Title
General Manager

By:
Dated:

                                            ii

<PAGE>
                                    ARTICLE I
                                    PREMISES

PREMISES
DEFINED


Section 1.01

     Landlord  hereby  leases to Tenant and Tenant  hereby  leases from Landlord
those certain  premises (the  "Premises") in the Century City Shopping Center in
the City of Los Angeles. County of~*Angeles,  State of California (the "Shopping
Center"),  for the  term,  at the  rental,  and upon all of the  conditions  and
agreements set forth herein.  The Premises areas depicted or outlined on Exhibit
"A" attached hereto and form a pan or the Shopping Center as depicted on Exhibit
"B"  attached  hereto.  Landlord  reserves  to itself,  however.  the use of the
exterior  walls and roof and the right to  install,  maintain,  use,  repair and
replace  pipes,  ducts,  conduits,  and wires  through the Premises in locations
which will not materially interfere with Tenant's use thereof.

PROPORTIONATE SHARE

Section 1.02

     As used herein,  "Tenant's  Proportionate  Share" shall be that  percentage
obtained  by  dividing  the floor area of the  Premises by the floor area of all
buildings from time to time  comprising the Shopping  Center other than: (a) the
management  office of the  Shopping  Center,  (b) any  separate  office or space
maintained for use by the merchants'  association of the Shopping Center or by a
promotional director and staff~administering any promotional fund which replaces
the merchants'  association and (c) [section struck out] (i.e.,  those buildings
located on the  "Bullock's  Site' the "Broadway  Site",  am' the "Gelson's  Site
/a*ll as shown on Exhibit "B"). Tenant's initial Proportionate Share shall be as
set forth in a written  notice from  Landlord to Tenant.  Landlord  reserves the
right to adjust Tenant's Proportionate Share from time to time by written notice
to Tenant to reflect changes in the floor area of the Shopping Center: provided,
however,  that  such  adjustments  shall  not be more  frequent  than  once each
calendar  quarter (i.e.,  no more than once during any period of  January-March,
April-June,  July-September or  October-December),  Tenant's  Proportionate Sham
shall be used to determine  Tenant's share of taxes with respect to the Shopping
Center (Section 5.01), insurance and maintenance charges for the Shopping Center
(Section 7.01) common area charges for the Shopping  Center (Section 14.05) and,
if  applicable,  charges  assessed  under  Sections  14.04.  18.06 and any other
provision of this lease  providing for charges to be assessed to Tenant  without
specification  of a method  other  than on the basis of  Tenant's  Proportionate
Share. In determining  Tenant's share of any expense payable by Tenant hereunder
as additional  rent,  there shall first be deducted from the aggregate amount of
such expense the  amount(s),  if any, of such expense  reimbursed to Landlord by
the [section struck out] and thereafter  Tenant's  Proportionate  Share shall be
applied to the amount remaining after such deduction(s).
<PAGE>

                                   ARTICLE II
                                      TERM

LENGTH
OF TERM

Section 2.01

    The term of this lease shall be the period specified [section struck out]


COMMENCEMENT
AND RENT
COMMENCEMENT
DATES

Section 2.02 /**as specified pursuant to the applicable Basic Lease Provisions

     (a) [section struck out]

     (b)The Rent  Commencement Date shall be the date specified in or determined
pursuant to the applicable  Basic Lease  Provision and may. if so specified,  be
the commencement date determined  ~pursuant to subsection (a) above. If the Rent
Commencement  Date shall occur subsequent to the commencement  date,  during the
period from the  commencement  date to the Rent  Commencement  Date Tenant shall
observe and perform all obligations of Tenant pursuant to this lease, other than
those  requiring the payment of minimum  Rent,  Percentage  Rent and  additional
rent.  Intendant  shall  open for  business  in the  Premises  prior to the Rent
Commencement  Date specified in or determined  pursuant to the applicable  Basic
Lease  Provision,  Tenant shall not be required to pay Minimum Rent,  Percentage
Rent or  additional  rent  during  the  period  from  such  opening  to the Rent
Commencement  Date. If the Rent  Commencement Date is determined by reference to
the  commencement  date, and Landlord does not deliver the Premises to Tenant in
the condition  required by subsection (a) above by the  commencement  date, then
the Rent  Commencement  Date shall be deferred by a period equal to the delay in
such delivery.

     (c) [section struck out]
<PAGE>


LEASE YEAR

Section 2.03

    A lease year is a period of twelve (12) full calendar  months  commencing on
the first day of January and ending on the last day of  December  except that if
the Rent  Commencement Date occurs on a date other than January I there shall be
a partial lease year for the period from the Rent  Commencement Date to the next
following  December 31, both dates  inclusive,  and the last lease year, if this
lease is  terminated  or expires on a date other than  December  31.  shall be a
partial  lease year for the period  beginning  on January I  following  the last
preceding lease year and ending on the termination or expiration date.

                                   ARTICLE III

                                      RENT

MINIMUM
RENT

Section 3.01 See paragraph 1 of Addendum No.1.

    Subject to Section 3.02, Tenant shall pay to Landlord for each full calendar
month during the lease term the monthly Minimum Rent specified in the applicable
Basic Lease  Provision.  Minimum Rent shall be payable in advance upon the first
day or each calendar month without any deduction or offset and without notice or
demand  at  Landlord's  address  as set  forth  in the  applicable  Basic  Lease
Provision  or to such  other  person  or at such  other  place as  Landlord  may
designate by written notice to Tenant.  The Minimum Rent for any fractional part
of a  calendar  month  at the  beginning  or end of the  lease  term  shall be a
proportionate  part of the Minimum Rent for a full calendar  month.  Ml rent and
additional  rent shall be paid in lawful money of the United  States which shall
be legal tender at the time or payment.


Section 3.02 [section struck out]
                                                      2

<PAGE>

PERCENTAGE RENT

Section 3.03 See paragraph 2 of Addendum No.1.

     (a) In addition to the Minimum Rent,  Tenant shall pay to Landlord for each
lease year or partial lease year during the lease term, as Percentage  Rent, the
excess,  if any.  of the  percentage  specified  in the  applicable  Basic Lease
Provision of Tenant's gross sales (as  hereinafter  defined) for such lease year
or partial lease year.  over the Minimum Rent paid by Tenant for such lease year
or partial lease year.

     (b) On or before the  fifteenth  (15th) day following  each calendar  month
Tenant shall pay to Landlord,  on account of such Percentage  Rent. the amount,.
if any.  by which  the  stated  percentage  OC  Tenant's  gross  sales  for such
preceding month exceeds the Minimum Rent paid by Tenant for such month. Promptly
upon Tenant's  submission  pursuant to Section  4.02(b) of its annual  certified
report of gross sales, the parties shall make any adjustment  necessary to place
the Percentage Rent on a lease year basis.


                                                      2

<PAGE>
     Any  additional  amount due from Tenant  shall be paid by Tenant  currently
with its  delivery of its annual  certified  report  of(pound)gross  sales;  any
excess paid by Tenant shall be credited against the next Nwemwgr Rent payment(s)
due from Tenant hereunder.

     (C) ) (I) The term "gross  sales" as used herein means the entire amount of
the price  charged,  whether  wholly or partly  for cash or on  credit,  for all
merchandise  sold,  and all  charges  made  for  services  performed  or for the
extension  of credit in, at or from any part of the  Premises,  or  through  the
substantial  use of the Premises,  by Tenant or anyone acting on Tenant's behalf
or under a sublease,  license or  concession  from  Tenant,  including,  without
limiting  the  generality  of  the  foregoing,   the  amount  allowed  upon  any
"trade-in,"  the retail  price of any  merchandise  delivered on  redemption  of
trading stamps, all deposits not refunded to purchasers, all catalog sales at or
from the  Premises,  the gross  proceeds  from the sale of stamps or  theater or
sporting  event  tickets,  and all orders taken in or from the Premises or which
Tenant would in the normal course of its  operations  credit or attribute to its
business in the  Premises,  even  though  such  orders may be filled  elsewhere,
without deduction in any case for uncollected or uncollectible  credit accounts.
There  shall  also be  included  in "gross  sales" the gross  receipts  from all
mechanical  or other vending  devices  placed in the Premises by Tenant or under
authority  from Tenant,  other than such devices which are installed in portions
of the Premises  not open to the public  solely for the  convenience  and use of
Tenant's employees,  mail order sales solicited from or returned to the Premises
and mail  order or  telephone  order  sales from the  Premises  in  response  to
advertisements using the Premises address or telephone number and all sales made
by televidec or other electric or electronic  media of any type where luch media
direct  the sale or order to the  Premises.  Gmss  receipts  from sales made and
orders taken in the Premises  shall be included in "gross sales" even though the
account may be  transferred  elsewhere for collection and though the delivery of
merchandise  sold or the  performance of services  ordered may be made elsewhere
than at the Premises.  Every  transaction  on a deferred  payment basis shall be
treated  as a sale for the full  price at the time such  transaction  is entered
into, irrespective of the time for payment or the time when title passes.

     (ii)  The  term  "gmss  sales"  as  used  herein  shall  not  include  (or,
ifincluded,  there shall be deducted to the extent of such inclusion) the amount
of any cash or credit  refund in fact made upon sales from the  Premises,  where
the  merchandise  sold or some part  thereof is  returned by the  purchaser  and
accepted by Tenant, nor exchanges and transfers of merchandise between stores of
Tenant,  where made solely for the convenient operation of Tenant's business and
not having the effect of  consummating a sale made or which would have been made
at the Premises, nor returns to shippers or manufacturers, nor sales of fixtures
or equipment after their  substantial use in the conduct of Tenant's business in
the Premises.  nor the amount of any sales,  luxury or exdse taxes on sales fiom
the Premises,  where such taxes are both added to the selling price (or absorbed
therein) and paid to the taxing  authorities by Tenant (but not by any vendor or
See Tenant A ph 5 of Addendum No.1.

     (iii) If Tenant's  gross sales are  required to be reported on any federal,
state or municipal  sales tax return or any other  similar  form of return,  and
gross sales as so reported on any of said  returns  shall exceed the gross sales
as reported by Tenant,  as herein provided,  then the gross sales shall be taken
at the highest figure so reported. I~ any governmental  authority shall increase
the gross sales reported by Tenant on any such tax return,  after audit, for any
lease year or partial lease year for which such sales have been  reported.  then
Tenant shall notify  Landlord  promptly of such increase and pay any  additional
percentage rent due at that time. For purposes of this subparagraph  gross sales
shall  mean,  if Tenant  reports  sales from more than one  location on any such
return,  only that portion ofthe gross sales reported as relate to the Premises.
Moreover,  for all purposes pursuant to this subparagraph,  gross sales shall be
adjusted to the lease definition of gross sales.

                                                      3

<PAGE>
Section 3.04 [section struck out]

RENT

Section 3.05

     As used in this lease, the term "rent" shall mean Minimum Rent,  Percentage
Rent and additional rent, and the term "additional  rent" shalt mean all amounts
payable by Tenant  pursuant to this lease other than Minimum Rent and Percentage
Rent.


                                   ARTICLE IV
                         RECORDS, REPORTS AND ACCOUNTING

RECORDS              Section 4.01

     Tenant shall keep and shall require its subtenanis and concessionaires.  if
any. [section struck out] complete and accurate books of account and

/*Tenantes corporate headquarters,


                                                      3

<PAGE>

     records,  written in English,  of, but not limited  to, all  purchases  and
receipts  of  merchandise,  inventories  shall  include  and all sales and other
transactions  from which Tenant's gross sales and advertising  expenditures  at.
upon or from the Premises can be determined.  Tenant agrees to record all sales,
at the time each sale is made whether for cash or credit,  in a cash register or
registers   containing  locked-in  cumulative  tapes  with  cumulation  capacity
satisfactory to Landlord and having such other features reasonably  requested by
Landlord.  Tenant shall keep for at least three (3) years  following  the end of
each lease year or partial  lease year all  pertinent  original  sales books and
records,  which records [section struck out] Tenanets gross sales and exclusions
from gross sales.


Section 4.02

STATEMENTS OF GROSS SALES

     (a)Tenant  shall submit to  Landlord,  on or before the 15th day after each
calendar month a written  statement showing in reasonable detail the gross sales
in, at or from the Premises for the preceding  calendar  month.  60th

     (b)Tenant shall submit to Landlord on or before the-" day following the end
of each lease year or partial  lease year a written  statement  certified  by an
officer of Tenant  showing in reasonable  detail the gross sales,  in at or from
the Premises for such preceding lease year or partial lease year.

     All  statements  pursuant to this Section shall be in such form and contain
such information as Landlord  reasonably  determines.  Each certification  shall
reasonably   satisfaction   Landlord   in  scope  and   substance   and  without
qualification except as expressly permitted by Landlord.




                                     4

<PAGE>
AUDIT
              Section 4.03

     (a)The  acceptance  by Landlord of  payments  of  Percentage  Rent shall be
without  prejudice to Landlord's  right to an  examination of Tenant's books and
records or its gross sales and  inventories  of  merchandise  in the Premises in
order to verify the amount of Tenant's gross sales.

     (b)At any  reasonable  time  within  three (3) years  after  receipt of any
statement furnished it by Tenant, and upon five (5) days prior written notice to
Tenant,  Landlord  may  cause a  special  audit to be made of  Tenant's  records
relating to the Premises  for the period  covered by such  statement.  Except as
provided  in (c)  below,  the  cost  of such  audit  shall  be paid by  Landlord
[section struck out].

     See Paragraph of Addendum No

     (c) If it shall be determined as a result of such audit that there has been
a deficiency  in the payment of  Percentage  Rent,  then such  deficiency  shall
become  immediately  due and  payable  with  interest  at the  S~rate  per annum
determined  pursuant  to Section  16.07(pound)  from  t~%~jtflwhen,sf&4  payment
should  have been made.  If the  aforementioned  deficiency  is in excess of hue
percent~$ of the rentals theretofore  computed~and paid by Tenant for the period
covered by the audit,  Tenant shall also pay to Landlord the /reasonable cost of
the audit?!?fleafldit.

                                    ARTICLE V
                                     TAXES

     (d)Each  statement of gross sales  submitted by Tenant shall become binding
upon Landlord three (3) years after delivery  thereof to Landlord  unless within
such  three (3) year  period  Landlord  shall  cause  such  special  audit to be
commenced.





                                     4

<PAGE>
                                      TAXES

              Section 5.01

     Tenant shall pay to Landlord Tenant's  Proportionate Share of all taxes, as
defined below. with respect to the Shopping Center. DEFINITIONS Section 5.02 (a)
The term "taxes" shall include:

     (i)All taxes,  assessments and governmental  charges and surcharges  levied
upon or with respect to the real property and  improvements  within the Shopping
Center.  other than the  portions  thereof  defined in Section  14.01 as "common
areas";

     (ii)All other taxes,  assessments and  governmental  charges and surcharges
levied upon or with respect to the  fixtures,  equipment  and other  property or
Landlord in or about the Shopping Center. whether real or personal:

     (iii) Fees and assessments for any governmental  service(s) to the Shopping
Center. including service payments in lieu of taxes:

     (iv) Dues and assessments  payable to any property owners'  association due
to Landlord's ownership or operation of the Shopping Center:

     (v)Any  and all taxes  payable  by  Landlord:  (A) upon,  allocable  to. or
measured  by*or on the gross or net rent payable  hereunder,  including  without
limitation any gross income tax. sales tax or


                                     4

<PAGE>

     excise tax levied by the State, any political  subdivision  thereof, or the
Federal  Government  with respect to the receipt of such rent:  (B) upon or with
respect  to  the  possession,  leasing,  operation.   management,   maintenance,
alteration,  repair.  use or occupancy  of the Premises or any portion  thereof,
including any sales, use or service tax imposed as a result thereof; (C) upon or
measured  by  Tenant's  gross  receipts  or  payroll  or the  value of  Tenant's
equipment,  furniture,  fixtures,  and  other  personal  property  of  Tenant or
leasehold improvements, alterations or additions located in the Premises; or (D)
upon this  transaction  or any document to which  Tenant is a party  creating or
transferring an interest or an estate in the Premises;

     (vi) All expenses  reasonably  incurred in seeking  reduction by the taxing
authorities (or association  assessing  clause (iv) dues and assessments) of the
taxes described in clauses (i) through (v) above.

     (vii) Any payments by Landlord to any ground lessor of the Shopping  Center
in reimbursement  of payments by such ground lessor of any amounts  specified in
clauses (i) through (vi) above.

     Provided,  however,  that the term "taxes" shall not include any franchise,
estate.  inheritance,  succession,  capital levy,  net income or excess  profits
taxes  imposed upon Landlord  except that in the event that real property  taxes
are withdrawn in whole or in part and any substitute tax is made therefor,  such
tax  shall in any  event  for the  purpose  or this  lease be  considered  a tax
included in "taxes"  pursuant to this Section 5.02 regardless of how denominated
or the source from which it is collected.

     (b)Taxes shall include all items  identified or described in subsection (a)
above. whether or not such items are customary and whether or not such items are
within the contemplation or the parties at the date of execution of this lean.

     (c)For the purpose of this  Section,  taxes  which are levied,  assessed or
charged on a fiscal  year  basis  shall be deemed to apply  one-twelfth  to each
calendar month in such fiscal year.

                                     5

<PAGE>

OTHER TAXES

Section 5.03

     Tenant  shall be  responsible  for and shall  pay  before  delinquency  all
municipal.  county or state  taxes,  levies and fees of every  kind and  nature,
including but not limited to general or special assessments. assessed during the
term of this lease against any leasehold  interest,  leasehold  improvements  or
personal property of any kind, owned by or placed in, upon or about the Premises
by Tenant.

                                ARTICLE VI

                      CONDUCT OF BUSINESS BY TENANT


USE OF PREMISES

              Section 6.01

     (a)Tenant  shall use the  Premises  solely for the  purposes  and under the
trade name specified in the applicable Basic Lease  Provision,  and for no other
purposes  and under no other trade name  whatsoever  without  the prior  written
consent of Landlord. Tenant shall devote the entire Premises to such use, except
for areas  reasonably  required for office or storage  space uses limited to the
business  conducted by Tenant in the  Premises.  Tenant shall  continuously  and
uninterruptedly  during the term  hereof  conduct its  business  activity in the
Premises  during all business hours usual for Tenant's type of business,  but in
any event during those minimum hours from time to time  established  by Landlord
for the Shopping  Center,  which may at the option of Landlord  include Sundays,
unless Tenant is prevented  from doing so by strike,  fire or other cause beyond
Tenant's reasonable control, and except during reasonable periods for repairing.
cleaning  and  decorating  the  Premises.  Failure  of any  other  tenant of the
Shopping Center, with or without the consent of Landlord, to observe the minimum
hours of operation  established  by Landlord  for the Shopping  Center shall not
relieve  Tenant of its  obligation  to  observe  such  minimum  hours or prevent
Landlord from requiring  Tenant to observe such minimum  hours.  Tenant shall at
all times carry a Cull and complete  stack of  merchandise  offered for sale and
shall maintain an adequate staff for

                                     5

<PAGE>

     the  service of its  customers!  Tenant  shall  employ  its best  judgment,
efforts and abilities to operate the business conducted by it in the Premises in
such  manner as to produce  the maximum  profitable  volume of sales  reasonably
obtainable  and to enhance the  reputation  and  attractiveness  of the Shopping
Center.

     (b)For the purpose of computing  Percentage Rent,  Tenant's gross sales for
any period during which Tenant does not continuously and uninterruptedly conduct
its  business as required by this Section 6.01 shall be deemed to be the greater
of Tenant's gross sales for (i) such period, or (ii) the corresponding period of
the next preceding lease year during which Tenant did so conduct its business.

RESTRICTIONS
ON USE

Section 6.02           See paragraph 7 of Addendum No.1.

     Tenant shall comply  promptly  with all  applicable  statutes,  ordrinences
rules, regulations,  orders and requirements regulating the use by Tenant of the
Premises and reasonable  requirements of all insurance  carriers or underwriters
providing  coverage on the Shopping Center, the Premises or the contents thereof
Tenant  shall not use or permit the use of the  Premises in any manner that will
tend to create a nuisance or tend to disturb  other  tenants or occupants of the
Shopping Center or tend to injure the reputation of the Shopping Center or which
will  invalidate any property  damage or liability  insurance  maintained on the
Premises. the building in which located or the Shopping Center. No auction. fire
sale.  bankruptcy  sale.  sidewalk  sale.  end of lease sale,  or going,  out of
business, sale may be conducted in the Premises without the written



                                     5

<PAGE>
     consent of Landlord,  which may be withheld in Landlord's sole  discretion.
Tenant  shall use its best  efforts to  complete  or cause to be  completed  all
deliveries,  loading,  unloading,  rubbish  removal,  and other  services to the
Premises prior to 10:00 A.M. of each day and shall not permit loading. unloading
or parking of delivery vehicles in areas of the Shopping Center other than those
designated by Landlord for such purpose.  Landlord reserves the right to further
regulate the  activities of Tenant in regard to deliveries  and servicing of the
Premises,  and  Tenant  agrees  to  abide  by  such  further   nondiscriminatory
regulations of Landlord.

     Tenant  shall  comply at all times with the Rules and  Regulations  fled to
this lease as Exhibit  "C" and such  amendments  and  modifications  thereof and
additions  thereto as Landlord  may from time to time  reasonably  adopt for the
safety,  care and deadliness of the Shopping Center or the  preservation of good
order  therein.  Landlord  shall not be liable to Tenant for the  failure of any
tenant or other person to comply with such Rules and Regulations. Landlord shall
be reasonable and  nondiscriminatory  application  of the rules and  regulations
adopted pursuant to this Section 6.02

OTHER LOCATIONS

Section 6.03

     Neither Tenant nor any parent,  affiliate or subsidiary of Tenant, directly
or indirectly. shall operate. manage or have any interest in any other competing
store or business, including a department or concession in another store, within
an area, measured from the nearest outside boundary of the Shopping Center, with
a radius  length set forth in the  applicable  Basic  Lease  Provision.  Without
limiting Landlord's remedies,  if Tenant shall violate the covenant contained in
this  Section,  Landlord  may,  at its option 1 exercised  by written  notice to
Tenant, increase Tenant's Percentage Rent rate set forth in the applicable Basic
Lease  Provision by five percent (5%),  with such increase to be effective  from
the date such  violation  first  occurred  and to continue  in effect  until the
cessation  of such  violation.  However,  any such  competing  store or business
existing  as of the date of this lease may  continue  to be  operated,  managed,
conducted and owned in the same manner as on the date of this lease.

     For the purpose of this Section:

     (a)A  "parent" of Tenant  shall be any person or entity who or which holds,
directly or indirectly, a majority of the outstanding voting rights in or profit
and loss interests in Tenant; a "subsidiary" of Tenant shall be any entity as to
which Tenant holds, directly or indirectly. a majority of the outstanding voting
rights in or profit and loss interests of such entity;  and an "affiliate" shall
be any officer,  director or general  partner of Tenant,  any  subsidiary of any
parent of Tenant and,  if Tenant is a natural  person,  any  spouse,  sibling or
first generation lineal descendent of Tenant;

     (b)All distances shall be measured on a straight line rather than a driving
distance  basis.  In the event that any  portion  of a retail  center is located
within the prohibited area described  herein,  the entire retail center shall be
deemed to be located within such prohibited area;

     (c)A "competing store" shall be a store operation  conducted under the same
trade name then in use at the Premises or conducted under a different trade name
but  offering   merchandise   or  services  for  sale  which  are  the  same  or
substantially  similar to the  merchandise  or services  offered for sale in the
Premises.

  See paragraph  8 of Addendum No.1



                                     6

<PAGE>
                               ARTICLE VII

                   MAINTENANCE, REPAIRS AND ALTERATIONS

LANDLORD'S OBLIGATIONS

Section 7.01

     Subject to the  provisions of Article IX hereof,  Landlord shalt during the
term  of  this  lease  keep in  first-class  order,  condition  and  repair  the
foundations,  the  exterior  surfaces  of  exterior  walls and  surfaces  of the
Shopping Center (excluding all storefronts of premises.  including the Premises,
leased to tenants),  downspouts,  gutters and roof of the buildings constituting
the Shopping  Center,  except for any damage thereto caused by any negligent act
or  omission  of Tenant or its  agents.  employees  or  invitees  and except for
reasonable  wear and  tear.  Provided,  however,  that  Landlord  shall  have no
obligation  to repair until a  reasonable  time after the receipt by Landlord of
written notice of the need for repairs.  which notice Tenant shall give Landlord
promptly when Tenant determines any such repairs are required. Tenant waives the
provisions of any law permitting Tenant to make repairs at Landlord's expense.

     Tenant  shall  reimburse   Landlord,   as  additional  rent,  for  Tenant's
proportionate  share of all costs and  expenses  incurred  by  Landlord  for the
foregoing  maintenance and repair.  Such costs shall exclude partial or complete
restoration  necessitated by casualty,  but shall include Landlord's cost of all
insurance  provided by Landlord pursuant to Section 8.03 hereof. See paragraph 9
of Addendum No.1.


TENANT'S
OBLIGATIONS

        Section 7.02

     (a) Subject to the provisions of Article IX hereof and Section 7.01 of this
Article  VII,  Tenant  shall  during the term of this lease keep in  first-class
order,  condition  and repair the  Premises and every part  thereof,  including,
without  limiting the generality of the foregoing,  all plumbing,  heating.  air
conditioni ng,  ventilating,  electrical  and lighting  facilities and equipment
within the Premises.  fixtures, interior walls and interior surfaces of exterior
walls,  ceilings.  floors  and  floor  coverings,   windows.  doors,  showcases,
skylights.  entrances  and  vestibules  located  within  the  Premises  and  the
storefront of the Premises.  Tenant shall paint or otherwise  treat the interior
walls, interior surfaces of exterior walls and the storefront of the Premises as
often as may be required to keep, the Premises neat and attractive.

     (b) If Tenant fails to perform its  obligations  under this  Section  7.02,
Landlord may at its option.  after  /II,-~Ays'  written notice to Tenant.  enter
upon the Premises and put the same in good order. condition


                                     6

<PAGE>



     and repair and the COMPETITIVE cost thereof shall become due and payable as
additional rent by Tenant to Landlord upon demand.

See paragraph 10 of Addendum No 1

     (C) On the last  day of the  term  hereof,  or on any  sooner  termination,
Tenant shall surrender the Premises to Landlord in good condition, ordinary wear
and tear and damage by fire,  the elements or any other cause beyond the control
of Tenant excepted.

ALTERATIONS
AND
ADDITIONS

Section 7.03

     (a) Tenant shall not, without the prior written consent of Landlord,  which
consent may be withheld in Landlord's  sole  discretion,  make any  alterations,
improvements,  remodeling or additions to either the interior or exterior of the
Premises or to fixtures  installed  therein in accordance with approved  fixture
plans, or mark,  paint,  drill or in any way deface any opinion of the Premises.
Landlord may  condition any approval upon such  requirements  as Landlord  deems
appropriate,  including  a  requirement  that all work be  covered by a lien and
completion bond and  requirements  as to the manner in which,  the time at which
and the  contractor(s)  by whom  such  work  shall  be  done.  All  alterations,
improvements,  remodeling  or additions  shall be subject to the  provisions  of
Article XVII hereof and Exhibit "D" hereto.

     (b)All alterations,  improvements, remodeling, additions or fixtures, other
than trade fixtures not permanently  affixed to the Premises,  which may be made
or  installed  in the  Premises  and which are  attached to the floor,  walls or
ceiling of the  Premises and any floor  covering  which is cemented or otherwise
affixed to the floor of the Premises shall be the property of Landlord and shall
remain upon and be  surrendered  with the  Premises at the  termination  of this
lease, unless Landlord shall direct Tenant to remove  __________________f.l.  .,
by written  notice  given to Tenant not less than  thirty (30) days prior to the
expiration  of this lease or within ten (IC) days after the earlier  termination
hereof.  Tenant shall personal at Tenant's cost, prior to the expiration of this
lease,  or in the event of an early  termination,  within  ten (10)  days  after
Landlord's notice. See paragraph 11 of Addendum No.1.

                                     7

<PAGE>

CLEANLINESS:  WASTE AND NUISANCE

              Section 7,04

   Tenant  shall keep the  Premises at all times in a neat,  clean and  sanitary
condition,  shall neither commit nor permit any waste or nuisance  thereon,  and
shall keep the walks and corridors  adjacent thereto free from Tenant's waste or
debris.


                                  ARTICLE VIII

                             INSURANCE AND INDEMNITY

LIABILITY INSURANCE

Section 8.01

     Tenant shall at all times  during the term hereof and at Tenant's  cost and
expense,  for the  protection  of Tenant and  Landlord,  as their  interests may
appear,  maintain  in full force and effect a policy or  policies  of  insurance
which afford the following coverages:

     (a)Worker's  Compensation in the statutorily required amount, together with
employer's liability coverage with a liability amount not less than $1,000,000.

     (b)Comprehensive  General  Liability  Insurance with a liability amount not
less than  $1,000,000  combined single limit for both bodily injury and property
damage, personal injury, completed operations.  products liability,  host liquor
liability  (or  liquor  liability,   if  applicable)  and  owned  and  non-owned
automobile coverage.

     The minimum limit of the coverage  provided in subsection  (b) above may be
adjusted upward at the expiration of each third (3rd) lease year as follows: Not
less than sixty (60) days prior to the relevant  adjustment date, Landlord shall
request such insurance  brokerage firm as is then placing insurance for Landlord
(the "Reviewing  Broker"),  to review Tenant's then existing liability insurance
coverage. to review the

                                     7

<PAGE>
     then use of the Premises and the claims history with respect thereto and to
recommend,  in writing,  the amount of coverage to be carried by Tenant pursuant
to subsection  (b). Such  recommendation  shall be based upon the then we of the
Premises and the liability claims history with respect to the Premises and shall
be consistent with amounts of coverage  generally  recommended by such Reviewing
Broker for similar  types of tenants or users of property  with uses  similar to
that of the Premises in the  geographical  area which includes the Premises.  If
the Reviewing  Broker shall  recommend an  increase(s) in the amount of coverage
then provided by Tenant under  subsection (b), Tenant shall promptly  increase -
its  coverage  to the  recommended  amount(s).  In no event  shall  there by any
reduction  in the amount of coverage  provided by Tenant  under  subsection  (b)
below the initial amount set forth herein, notwithstanding any recommendation by
the Reviewing Broker.  Provided however~ Tenant' S Co hensive Liability Coveraqe
shall not be increased beyond $3,000,000.00 during the ~ Landlord, and any other
persons  designjt~e~b~.~  landlord  and  having  an  insurable  interest  in the
Premises,  shall be added  as  additional  insureds  pursuant  to such  policies
[although they shall not have any obligations of "named" insureds  therein.  The
insurance  required by this Section  shall be the primary  insurance as respects
Landlord  [and any other  additional  insureds  designated  by Landlord] and not
contributory  with  any  other  available  insurance.  The  policy  or  policies
providing  the  coverage  required  by  subsection  (b) above  shall  contain an
endorsement providing, in substance,  that "such insurance as is afforded hereby
for the benefit of the  additional  insureds  shall be primary and any insurance
carried by the additional  insureds shall be excess and not contributory." In no
event shall the limits of any  coverage  maintained  by Tenant  pursuant to this
Section be  considered  as limiting  the  liability  of Tenant  pursuant to this
lease.


                                     7

<PAGE>



PROPERTY INSURANCE-TENANT
Section 8.02

     (a) Tenant shall at all times  during the term hereof,  and at its cost and
expense,  maintain  in effect  policies  of  insurance  covering  (i) all tenant
improvement  s in or to the  Premises,  providing  protection  against  any  pan
included  within the  classification  "Ml Risk,"  including  but not  limited to
insurance  against sprinkler  leakage,  vandalism and malicious  mischief;  such
insurance  to be in an amount not less than the full  replacement  value of such
improvements,  which  shall be  determined  at the time the policy is  initially
obtained,  and not less frequently  than once every three (3) years  thereafter,
and such  other  insurance  as may be  required  by  Landlord's  lender(CU)  all
personal  property of Tenant  located in or on the  Premises,  including but not
limited to fixtures, furnishings,  equipment, furniture, inventory arid stock in
trade,  in an amount  not less than  their  full  replacement  value,  providing
protection  against  any peril  included  within the  classification  "Ml Risk,"
including but not limited to insurance against sprinkler leakage.  vandalism and
malicious  mischief;  and  (ii) all  plate  glass on the  Premises.  Tenant  may
self-insure for plate glass. (b) The proceeds of such insurance, so long as this
lease remains in effect,  shall be held in trust by the  insurance  carriers and
used to repair or replace the pans of the Premises, any improvements thereto and
personal  property so insured.  Upon any  termination  of this lease pursuant to
Sections 9.02 or 9.03,  Landlord may keep or apply the proceeds of the insurance
required  pursuant  to clauses  (I) and (iii) of  subsection  (a) above,  at its
discretion; the remaining proceeds shall be the property of Tenant.

     (c)  Tenant  shall at its cost  maintain  business  interruption  insurance
assuring that the rent payable  hereunder  will be paid to Landlord for a period
of not less than twelve (12) months if the  Premises  are  destroyed or rendered
inaccessible by a risk insured  against by a policy of All Risk insurance,  with
any endorsements required by subsection (a) above.


PROPERTY INSURANCE  -  LANDLORD

  Section 8.03

     Landlord  shall at all times  during the term  hereof  maintain in effect a
policy  or  policies  of  insurance  covering  the  Shopping  Center,  including
Landlord's  interest  in all tenant  improvements  in the  Premises  paid for by
Landlord,   t)roviding   protection   against  any  pan   included   within  the
classification  "Ml Risk," together with insurance  against  sprinkler  leakage,
vandalism  and  malicious  mischief.  Landlord may, but shall not be required to
maintain  coverage  against  earthquake  and  flood  as a pan or  the  insurance
maintained

                                     8

<PAGE>



     by Landlord  hereund er. The cost of maintain ing all such insuranc e shall
be in  Tl~u;e~ d in the costs  reimburs  ed by Tenant to  Landlord  pursuant  to
Section 7.01.


INSURANCE
POLICIES


Section 8.04

     All  insurance  required  to be carried by tenant  hereund er shall be with
companies  rated/-Mm.,  or  better,  in the then most  recent  version of Best's
Insurance  Guide.  Tenant shall  deliver to Landlord at least  fifteen (15) days
prior to the time such insurance is first required to be carried by Tenant,  and
thereafter at least thirty (30) days prior to the  expiration or renewal date of
any policy  maintained by Tenant,  copies of the peib.  certificates  evidencing
such  insurance.  Ml -we..-~'  certificates  delivered  pursuant to this Section
shall  contain  liability  limits not less than those set forth in Sections 8.01
and 8.02, shall list the additional  insureds and shall specify all endorsements
and  special  coverages  required  by such  Sections.  pql,;cy  shall  contain a
provision (by endorsement or otherwise)  requiring not less than dii", /4*%'wvhS
~ nt en notice to Landlord  prior to any  cancellation,  non-renewal or material
amendment  thereof.  For the purposes of this Article VIII,  the phrase "Term of
this lease" shall mean the period from the  commencement  date through the later
of the expiration or termination of the lease term or the date Tenant surrenders
physical possession of the Premises to Landlord. Any insurance required pursuant
to this lease may be provided by means of a so-called  "blanket" policy, so long
as the Premises are  specifically  covered (by rider,  endorsement or otherwise)
and the policy otherwise complies with the provisions of this lease.

WAIVER OF SUBROGATION

Section 8.05 See paragraph 12 of Addendum No.1.

     Landlord  and Tenant  each  hereby  waives  any and all rights of  recovery
against  the other,  and against  any other  tenant or occupant of the  Shopping
Center and against the officers, employees. agents,  representatives,  customers
and  business  visitors of such other party and of such other tenant or occupant
of the  Shopping  Center,  for loss of or  damage to such  waiving  party or its
property or property of others under its control, arising from any cause insured
against  under any policy of  insurance  required to be carried by such  waiving
party  pursuant to the  provisions  of this lease (or any other polic y of 'insu
rance carri ed by such waivi ng party in lieu there of) at the time of such loss
or damag e. The foreg oing waive r shall be effec tive  whether or not a waiving
party actually  obtains and maintains the insurance  which such waiving party is
required  to obtain  and  maintain  pursuant  to this  lease (or any  substitute
therefor.)  Landlord and Tenant shall,  upon obtaining the policies of insurance
which they are required to maintain  hereunder,  give notice to their respective
insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this lease.  Landlord's  notice  hereunder may be a general  notice
with respect to all leases,  including this lease,  then or thereafter in effect
at the Shopping Center.

INDEMNITY      Section 8.06

     To the fullest extent permitted by law, Tenant shall indemnify,  defend and
hold  landlord  harmless  from and against any  liability or expense  (including
attorneys'  fees and costs of  defense)  for any  damage or injury to persons or
property  in or about  the  Shopping  Center  which may  result  from the use or
occupation  of  the  Premises  by  Tenant,  its  agents,  employees,   invitees,
licensees. concessionaires or other


                                     8

<PAGE>
See paragraph 13 of Addendum No.1.





EXEMPTION
OF LANDLORD



persons  claiming  under  Tenant or from any  breach or default by Tenant in its
obligations  pursuant to this tease.  It is  understood  and agreed that payment
shalt not be a condition  precedent to enforcement of the foregoing.  indemnity.
If any action or  proceeding is brought  against  Landlord by reason of any such
claim.  Tenant,  upon  Landlord's  request.  shall  defend  the same by  counsel
reasonably  satisfactory  to Landlord  and at Tenant's  expense.  The  foregoing
indemnification  shall  not  extend to  damage  or  injury  which is solely  and
proximately  caused by the  negligence  or  intentional  acts of  Landlord,  its
agents, employees and contractors.

Section 8.07

     Landlord shall not be liable for injury or damage which may be sustained by
the person, goods. wares, merchandise or property of Tenant, Tenant's employees.
invitees or customers or any other person in or about the Premises  caused by or
resulting  from any peril  which may  affect  the  Premises,  including  but not
limited to fire, theft, steam,  electricity,  gas. water or rain, which may leak
or flow from or into any pan of the  Premises,  or from the  breakage,  leakage,
obstruction  or other  defects  of the  pipes,  sprinklers.  wires,  appliances.
plumbing,  air  conditioning  or  lighting.  fixtures of the same,  whether such
damage or injury results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a pan, or from other sources.
Landlord shall not be liable for any damages  arising from any act or neglect of
any other tenant of the Shopping  Center,  or any of their officers.  employees.
agents.  representatives.  customers,  business visitors or invitees.  Provided,
however,  that the  foregoing  shall  no!  apply to any  damage  which  Tenant ~
jurisdiction wasIM$y"WrYi an or , its agents or employees.


LANDLORD'S
SECURITY



Section 8.08

     Landlord  may. but shall have no obligation  to. from time to time,  employ
one or more  persons or  entities to patrol or provide  security  for the common
areas.   Notwithstand  ing  any  such  activity,  Tenant  shall  have  the  sole
responsibili ty of providing security for the Premises and the' persons therein.
Under no circumstances shall Landlord be liable to Tenant or to any other person
by reason of any  theft,  burglary.  robbery,  assault,  trespass,  unauthorized
entry, vandalism, or any other act of any third person occurring in or about the
Premises, and Tenant shall indemnify. defend and hold Landlord harmless from and
against any and all losses, liabilities, judgments, costs or expenses (including
reasonable  attorneys' fees and other costs of  investigation  or defense) which
Landlord may suffer by reason of any claim asserted by any person arising out of
or related to any of the foregoing. If Landlord elects to provide such patrol or
mnetitiir~  security services,  the"cost thereof ~or snail be included in common
area costs pursuant to Section 14.05 hereof

                                   ARTICLE IX

                             REPAIRS AND RESTORATION

INSURED OR MINOR DAMAGE

Section 9.01

    Subject to the  provisions  of Section  9.04, if at any time during the term
hereof the Premises  are  destroyed or damaged and either (a) such damage is not
"substantial" as that term is hereafter  defined,  or (b) such damage was caused
by a casualty  required to be insured  against under Section 8.03, then Landlord
shall  promptly  repair such damage at  Landlord's  expense and this lease shall
Continue in full force and effect.

SUBSTANTIAL
DAMAGE

Section 9.02

    Subject to the  provisions  of Section  9.04, if at any time during the term
hereof the Premises are destroyed or damaged and if such damage is "substantial"
as that term is hereinafter defined, and if such damage was caused by a casualty
not required to be insured  against under Section 8.03, then Landlord may at its
option either (a) promptly  repair such damage at Landlord's  expense.  in which
event*his  lease  shall  continue  in full force and  effect,  or (b) cancel and
terminate this lease as or the date of the occurrence of such damage.  by giving
Tenant written notice of its election to do so within thirty (30) days after the
date of the occurrence of such damage.

DAMAGE TO
CENTER

Section 9.03

    In the event that premises in the Shopping  Center  aggregating  twenty-five
percent  (25%) or more of the  total  floor  area of all  buildings  within  the
Shopping  Center  leased or  offered  for lease to  tenants  shall be damaged or
destroyed,  whether or not: the Premises are damaged or destroyed,  Landlord may
at Landlord's option cancel and terminate this lease by giving written notice to
Tenant of Landlord's  election to do so within sixty (60) days after the date of
occurrence of such damage, in which event this lease shall terminate on the date
such notice is given. /*


DAMAGE NEAR
END OF TERM

Section 9.04

     If the Premises are destroyed or damaged during the last  twenty-four  (24)
months  of the term of this  lease  and the  estimated  cost of  repair  exceeds
ten&percent of the term~~ of t~ Minimum Rent then remaining to be paid by Tenant
for the balance of the term either  Landlord or Tenant may at its option  cancel
and  terminate  this lease as of the date of occurrence of such damage by giving
written no.~to the other party a election to do so within thirty (30) days after
the date of occurrence of such damage.  If Landlord and or S all not so elect to
not discriminate  against Tenant in the exercise of its right to terminate event
of damage as a result of casualty specified in Section 9.03.


                                          9

<PAGE>
     terminate  this  lease,  the repair of such  damage  shall be  governed  by
Section 9.0!, 9.02 or 9.03, as the case may be.

ABATEMENT
OF RENT;
TENANT'S
REMEDIES

Section 9.05

     (a) If the  Premises  are  destroyed  or damaged  and  Landlord  repairs or
restores them pursuant to the provisions of this Article,  Tenant shall continue
the  operation  of  its  business  in the  Premises  to  the  extent  reasonably
practicable from the standpoint of prudent business management,  and the Minimum
Ken'  payable  hereunder  for the period  during  which such  damage,  repair or
restoration  continues  shall be abated  in  proportion  to the  degree to which
Tenant's use of the Premises is  impaired.  There shall be no.  abatement of the
Percentage Rent or any additional rent payable hereunder,  and Tenant shall have
no. claim  against  Landlord for any damage  suffered by Tenant by reason of any
such damage, destruction.  repair or restoration. Tenant waives the provision of
Civil Code  Sections  1932(2) and 1933(4) and an) present or future laws or case
decisions  to the same effect.  Upon  completion  of such repair  in-restoration
Tenant shall promptly  refixture and restock the Premises  substantially  to the
condition  prior to the  casualty and shall reopen for business if closed by the
casualty.

     (b)~ If Landlord shall be obligated to repair or restore the Premises under
the provisions of this Article and shall not commence such repair or restoration
within thirty (30) days after such  obligation  shalt accrue,  Tenant may at its
option  cancel and  terminate  this lease as of the date of  occurrence  of such
damage by giving  Landlord  written  notice or its election to do so at any time
prior to the  commencement of such repair or restoration.  Such obligation shall
be  deemed  to  accrue  on  the  later  of  (i)  receipt  by *  Landlord  of any
governmental  permit  or  approval  necessary  to  commence  such  work/or  (ii)
settlement of ~ /*provided that obtaining of such permit.

See paragraphs 14 & 26 of Addendum No.1.






DEFINITIONS

Section 9.06

     (a)For the purpose of this  Article,  "substantial"  damage to the Premises
shall be deemed to be damage to the building of which the Premises area pan, the
estimated cost or repair of which exceeds  one-fifth (1/5) of the then estimated
replacement cost of such building.

     (b)The  determination  in good faith by Landlord of the  estimated  cost of
repair of any damage  and~or of the estimated  replacement  cost of any building
shall be conclusive for the purpose of this Article.

                                    ARTICLE X

                            ASSIGNMENT AND SUBLETTING

LANDLORD'S
RIGHTS

Section 10.01 See paragraph 15 of Addendum No.1.

     (a) Tenant shall not,  either  voluntarily or by operation of law,  assign.
sell,  encumber.  pledge  or  otherwise  transfer  all  or any  pan of  Tenant's
leasehold  estate  hereunder,  or permit the  Premises  to be occupied by anyone
other than Tenant or Tenant's  employees  or sublet the  Premises or any portion
thereof,   without  Landlord's  prior  written  consent  in  each  instance.  In
exercising such right of consent.  Landlord's  consent shall not be unreasonably
withheld and, in exercising such right of consent. Landlord shall be entitled to
take into  account  any fact or factor  which  Landlord  deems  relevant to such
decision. including but not necessarily limited to any or all of the following:

     (i) The financial strength of the proposed assignee or subtenant.

     (ii) The  experience of the proposed  assignee or subtenant with respect to
businesses  of the type and site which such  assignee or  subtenant  proposes to
conduct in the Premises.

     (iii) The  quality  of the  merchandise  offered  for sale by the  proposed
assignee or  subtenant in any other  locations  which it has, and the quality of
the merchandise  which such assignee or subtenant  proposes to offer for sale in
the  Premises.  (iv)  Violation or potential  violation of exclusive  use rights
previously granted by Landlord to other tenants of the Shopping Center.

     (v) Potential  diminution of Percentage Rent payable pursuant to this lease
as the result of such assignment or subletting.

     (vi)/If  Tenant is a  destination,  Whether the store to be operated by the
proposed  assignee or subtenant  will be, a  "destination  store" (i.e., a store
which draws patrons to the Shopping Center  specifically to shop at such store).
(vii) Whether there then exists ~ pursuant to this lease or any  non-payment  or
non-performance  by Tenant  under this  lease  which,  with the  passage of time
and~or the giving of notice would constitute a default under this lease.

     The foregoing  restrictions shall be binding upon any assignee or subtenant
to  which  Landlord  has  consented,  and  consent  by  Landlord  to one or more
assignments  of this lease or to one or more  sublettings  of the Premises shall
not operate to exhaust Landlord's rights under this paragraph.  The voluntary or
other  surrender of this lease by Tenant or a mutual  cancellation  hereof shall
not work a merger.  and shall.  at the option of Landlord,  terminate all or any
existing subleases or subtenancies or shall operate as an assignment to Landlord
of such subleases or subtenancies.  If Tenant is a corporation  which, under the
then current  guidelines  published by the  Commissioner  or Corporations of the
State of California.  is not deemed a public corporation or is an unincorporated
association or partnership.  the transfer.  assignment or  hypothecation  of any
stock interest in such corporation.  association or partnership in the aggregate
in excess of  forty-nineshall  be deemed an  assignment  within the  meaning and
provisions of this Article.

                                         10

<PAGE>
     (b) In the event  Tenant  desires to sublet the  Premises,  or any  portion
thereof;  or assign its interest in this lease, Tenant shall give written notice
thereof  to  Landlord  at least  days but not  more  than 180 days  prior to the
proposed effective date of such subletting or assignment, which notice shall set
forth or be  accompanied~ed  by the name or the proposed  subtenant or assignee,
the relevant  terms of any sublease or assignment,  the proposed  effective date
thereof,  the nature of the proposed  subtenant's  or assignee's  business to be
carried on in the Premises and such reasonable financial information as Landlord
may request  concerning  the proposed  subtenant or assignee,  including but not
limited to a balance  sheet of the  proposed  subtenant  or assignee for the two
year period preceding the request for Landlord's consent and a written statement
in reasonable detail as to the business and retail  merchandising  experience of
the proposed  subtenant or assignee  during the five years preceding the request
for  Landlord's  consent.

     (c) At any time within --days after  Landlord's  receipt of the information
specified in Section 10.01(b), Landlord may by written notice to Tenant elect to
(i) consent to the subletting or assignment  upon the terms and to the subtenant
or assignee proposed; (II) refuse to give its consent,  specifying in reasonable
detail the reason(s)-therefor; [section struck out].


     (d) -All options to extend, renew or expand, if any contained in this lease
are  personal to Tenant.  Consent by Landlord to any  assignment  or  subletting
shall not include  consent to the assignment or transfer of any such rights with
respect to the Premises,  any special  privileges or extra  services  granted to
Tenant  by this  lease,  or any  addendum  or  amendment  thereto  or  letter of
agreement (and such options, rights, privileges or services shall terminate upon
such assignment or subletting).  unless Landlord  specifically  rants in writing
such options, rights,  privileges or services to such assignee or subtenant. Any
sale, assignment,  mortgage, transfer of this lease or subletting which does not
comply with the provisions of this Article shall be void.

     (e)As a condition to Landlord's  consent to any  assignment or  subletting,
Landlord shall be entitled * to receive, [section struck out].


     (f) If  Landlord  consents to such  assignment  or  subletting  or does not
exercise any option set forth in this Section  10.01 within said thirty (30) day
period,  Tenant may there after within sixty (60) days after the  expiration  of
said period enter into a valid assignment or sublease of the Premises or portion
thereof,  upon the terms and conditions described in the information required to
be furnished  by Tenant to Landlord  pursuant to  subsection  (b), or upon other
terms not less favorable to Tenant; provided,  however, that any material change
in such terms shall be subject to Landlord's consent as provided in this Section
and,  provided  further,  that any  amount to be paid to  Landlord  by Tenant in
connection  therewith pursuant to subsection (e) above shall be paid to Landlord
upon the later of consummation of such  transaction or receipt by Tenant of such
consideration.



LANDLORD'S
COSTS

Section 10.02

     Should  Landlord  approve an  assignment  or  sublease,  Tenant will pay to
Landlord on demand a sum equal to all of Landlord's reasonable costs,  including
attorney's  fees,  incurred in connection with  processing and documenting  such
assignment or transfer.  Provided  however,  in no event shall such costs exceed
$1,500.


NO RELEASE
OF TENANT


Section 10.03

    Notwithstanding  any  assignment  or  subletting,  even with the  consent of
Landlord,  Tenant shall at all times remain  directly and primarily  responsible
and liable for the payment of the rent herein  specified and for compliance with
all of its other  obligations  under this Lease/Upon the occurrence of an "event
of default" (as  hereinafter  defined),  if the Premises or any part thereof are
then sublet,  Landlord,  in addition to any other remedies provided herein or by
law, may collect  directly from any subtenant all rents due and

/**see paragraph
16 of Addendum No.1.


                                         10

<PAGE>
     becoming due to Tenant under such  sublease and apply such rent against any
sums due to Landlord from Tenant hereunder.  No such collection directly from an
assignee or subtenant shall be construed to constitute,  a novation or a release
of Tenant from the further performance of Tenant's  obligations  hereunder.  The
acceptance by Landlord of any payment due hereunder  from any other person shall
not be deemed to be a waiver by Landlord of any provision of this Lease or to be
a consent to any assignment or subletting.


                                   ARTICLE XI

                                 EMINENT DOMAIN

ENTIRE OR
SUBSTANTIAL
TAKING

Section 11.01

   If the  entire  Premises,  or so much  thereof  as to make  the  balance  not
reasonably  adequate  for  the  conduct  of  Tenant's  business  notwithstanding
restoration by Landlord as hereinafter provided,  shall be taken under the power
of eminent domain,  this lease shall  automatically  terminate as of the date on
which the condemning authority takes possession.


PARTIAL
TAKING

Section 11.02

   Iii the event of any taking under the power of eminent  domain which does not
so result in a termination  of this lease,  the Minimum Rent and all  additional
rent other than Percentage Rent payable hereunder shall be reduced, effective as
or the date on which the  condemning  authority  takes  possession.  in the lame
proportion  which the floor area of the portion of the  Premises  taken bears to
the floor  area of the  entire  Premises  prior to the  taking,  Landlord  shall
promptly at its expense  restore the portion of the  Premises not so taken to as
near its former  condition  as is  reasonably  possible,  and this  lease  shall
continue in full force and effect,


TAKING OF
CENTER

Section 11.03

     If premises in the Shopping Center aggregating twenty-five percent (25%) or
more of the total floor area of the building for lease to tenants shall be taken
by eminent domain whether or not the Premises are so taken, Landlord may, at its
option. terminate this not discriminate lease by written notice to Tenant of its
election  to  do  so  prior  to  the  date  the  condemning  authority  requires
possession,  and this lease shall terminate on the date the condemning authority
requires possession.



AWARDS            Section 11.04

     Any award for any taking of all or any pan of the Premises  under the power
of eminent domain shall be the property of Landlord, whether such award shall be
made as  compensation  for diminution in value of the leasehold or for taking of
the fee. Nothing contained herein,  however,  shall be deemed to preclude Tenant
from  obtaining,  or to give  Landlord  any interest in. any award to Tenant for
loss of or damage to Tenant's trade fixtures and removable  personal property or
for damages for  cessation or  interruption  of Tenant's  business,  or Tenant's
goodwill and tenant improvements paid for by Tenant.


SALE UNDER
THREAT OF
CONDEMNATION

Section 11.05

   A sale by  .Landlord  to any  authority  having the power of eminent  domain,
either  under  threat of  condemnation  or while  condemnation  proceedings  are
pending,  shall be deemed a taking  under the power of  eminent  domain  for all
purposes under this Article.

                                    ARTICLE XII

                                 UTILITY SERVICES

UTILITY
CHARGES

                Section 12.01

     Tenant shall pay all charges for gas, water, sewer, electricity,  telephone
and other utility  services  used in the Premises  during the lease term. If any
such charges are not paid when due Landlord  ma'7pay the same, and any amount so
paid  by  Landlord  shall  thereupon  become  due to  Landlord  from  Tenant  as
additional rent.

     If  utilities  services,  or any of them,  are  separately  metered  to the
Premises,  then Tenant  shall  cause the charges for such  services to be billed
directly to Tenant and shall pay such  charges  directly to the  purveyor(s)  of
such services. If utilities services, or any of them, are not separately metered
to the Premises,  then as to any utility  service not separately  metered to the
Premises, (a) Landlord shall pay the bills for such services, (b) Landlord shall
allocate such bills between Tenant and the other tenants of the Shopping  Center
served by the meter on which  such  bills  are based on such  basis as  Landlord
determines to be  reasonable~a*ND  (c) Tenant shall pay its allocated portion of
such bills to Landlord,  as additional rent,  within ten (10) days after receipt
of  Landlord's  notice  or  invoice  therefor.  As to any  utility  service  not
separately  metered to the  Premises  at the  commencement  date of this  lease,
Landlord reserves the right to require Tenant, as a part of Tenant's work in the
Premises  and at  Tenant's  cost.  to install a separate  meter or  submeter  to
monitor  the  usage of such  utility  service  in the  Premises.  The  foregoing
provisions shall also apply to any utility service used by Tenant to operate the
heating, ventilating and air conditioning unit serving the Premises.

                                        12


<PAGE>

FURNISHING OF
SERVICES

Section 12.02

   If Landlord  shall elect to furnish  any  utility  services to the  Premises,
Tenant shall  purchase  its  requirements  thereof from  Landlord so long as the
rates  charged  therefor by Landlord do not exceed  those which  Tenant would be
required to pay if such services were furnished it directly by a public utility.


INTERRUPTION
OF SERVICE

Section 12.03

     Landlord  shall not be liable in damages or  otherwise  for any  failure or
interruption  of any utility  service  being  furnished the Premises and no such
failure or  interruption  shall entitle Tenant to terminate this lease, or to an
abatement of the Minimum Rent,  additional  rent or other charges due hereunder.
See paragraph 17 of Addendum No.1.


TENANT'S
HVAC

        Section 12.04

   During the term of this  lease,  heating,  ventilating  and air  conditioning
("HVAC") for the Premises shall be provided as follows:

     (a)Tenant  shall  purchase  and  install  its  own  HVAC  unit(s)  and  all
associated  vents,~flng and controls.  Such  installation  shall be accomplished
concurrently  with  Tenant's  Work  pursuant  to  Section  17.04 and shall be in
accordance with the following:

     (i)Ml HVAC units  shall be located on the roof of the  Premises  which they
serve:

     (iiThe  location of the HVAC  units,  all lines,  ducts,  connections  and
controls  shall be subject to the prior wrinen  appmval of Landlord;  (iii ) The
meth od and loca tion of all roof  penetrations  shall be  subject  to the prior
written  approval of Landlord,  and  Landlord  shall have the right to make such
penetrations for Tenant and at Tenant's cost;

     (iv) All HVAC units shall be attached to utility meters separately  serving
the Premises or to separate  meters  installed  by Tenant and billed  directy to
Tenant.

     (v) All costs of  purchase  and  installation  of the HVAC  units,  meters,
ducting and controls shall be the sole responsibility of Tenant.

     (b)During  the lease term,  Tenant  shall  maintain  Tenant's  HYAC unit(s)
serving the Premises, as follows:

     (i) Tenant shall arrange for periodic  inspection,  maintenance  and repair
services  for  Tenant's  rooftop  HVAC  units by an HVAC  service  approved.  in
advance, in writing by Landlord.

     (ii) Tenant shall also be solely responsible to operate,  maintain, service
and repair all components of the HYAC system serving the Premises other than the
rooftop HVAC unit(s) and other rooftop installations.

     (iii)  All  costs of  operating.  inspecting,  servicing,  maintaining  and
repairing or replacing Tenant's HVAC system shall be borne by Tenant.

     (c) Notwithstanding the provisions of subsection (b) above, Landlord may at
any time elect, by written notice to Tenant,  to maintain  Tenant's HVAC unit(s)
serving the Premises. In such event:

     (i)Landlord shall arrange for periodic  inspection,  maintenance and repair
service for Tenant's  HYAC units by an HVAC service  selected by Landlord.  Such
service entity may. at Landlord's election, be the same service entity providing
similar services with respect to other HVAC units in the Shopping Center./*

     (ii) Tenant shall  reimburse  Landlord,  as additional  rent, for alt costs
incurred by Landlord  pursuant to paragraph (i) above. If Landlord uses one HVAC
service  entity to service and  maintain  Tenant's  HVAC unit (s) an dother HVAC
units in the  Shopping  Center,  the  charges of such  service  entity  shall be
apportioned  or allocated  between Tenant and the owners of the other HVAC units
so serviced and  maintained as Landlord,  in its  reasonable  discretion,  shall
determine.  Amounts  payable by Tenant  pursuant to this paragraph shall be paid
within ten (10) days after Tenant's  receipt of Landlord's  invoice or statement
therefor.  Landlord may also elect. at any time by written notice to Tenant,  to
cease providing all services provided to Tenant pursuant to this subsection and,
in such event, Tenant shall thereafter service and maintain its own HVAC unit(s)
pursuant to subsection (b) above.

     (d) At the expiration or earlier termination of this lease, all HVAC units,
ducting,  controls apd meters shall become the property of Landlord and shall be
surrendered by Tenant to Landlord along with the Premises.


                                  ARTICLE XIII

                              DEFAULTS AND REMEDIES

DEFAULTS         Section 13.01

     The occurrence of any one or more of the following  events shall constitute
a default hereunder by Tenant:

     (a)The abandonment of the Premises by Tenant. Abandonment is herein defined
to include.  but is not limited to, any absence by Tenant from the  Premises for
five (5) days or longer while in default ofany provision of this lease.


                                         13

<PAGE>
    (b) The  failure by Tenant to make any payment of rent or  additional  rent
required  to be made by Tenant  hereunder,  as and when due,  or the  failure of
Tenant to observe the ~the minimum tours of operation  established  by Landlord,
where such failure shall continue for a period of A-P.  n~(~~)days after written
notice thereof from Landlord to Tenant; provided,  however, that any such notice
shall  be in  lieu  of.  and nor in  addition  to,  any  notice  required  under
California  Code of Civil  Procedure  Section  1161 et  seq..  as  amended.  For
purposes  of this  subsection  (b),  Tenant  shall not be deemed to have cured a
default  resulting  from  Tenant's  failure  to  observe  the  minimum  hours of
operation established by Landlord if Tenant shall, within thirty (30) days after
any purported cure, again fail to observe such minimum hours of operation.

     (c)The  failure  by Tenant ,o  observe  or  perform  any of the  express or
implied  covenants  or  provisions  of this lease to be observed or performed by
tenant than as specified in (a) or (b) above,  where such failure shall continue
for a period  of,.~~twenty  days after written  notice  thereof from Landlord to
Tenant; provided,  however, that any such notice shall be in lieu of, and not in
addition  to, any  notice  required  under  California  Code of Civil  Procedure
Section 1161 ci seq., as amended,  and provided  further,  that if the nature of
Tenant's  default is such that more than ten (10) days are  reasonably  required
for its cure,  then Tenant  shall not be deemed to be in default if Tenant shall
commence  such cure within osaid ten (10) day period and  thereafter  diligently
prosecute such cure to completion.

     (d)(i) The making by Tenant of any  general  assignment  for the benefit of
creditors;  (il) the filing by or against  Tenant of a petition  to have  Tenant
adjudged  a debtor in any  proceeding  under the  Federal  Bankruptcy  Code or a
petition for  reorganization or arrangement under any law relating to bankruptcy
(unless,  in the case of a petition filed against Tenant,  the same is dismissed
within thirty (30) days): (iii) the appointment of a trustee or receiver to take
possession of  substantially  all of Tenant's assets located at the Premises~~pr
of Tenant's  interest in this lease,  where possession is not restored to Tenant
within.-'  /~g4~;"ci'v)  the attachment,  execution or other judicial seizure of
substantially  all of Tenant's assets a Premises or of Tenant's interest in this
lease,  where such seizure is not  discharged  within  /4-+#,(60)  Days:  or (v)
Tenant's  convening of a meeting of its  creditors or any class  thereof for the
purpose of effecting a moratorium upon or composition of its debts, or any class
thereof.


REMEDIES

Section 13.02

     (a)In the event of any default by Tenant as defined  herein,  Landlord  may
exercise the following remedies:

     (I)Terminate  Tenant's  right to  possession  of the Premises by any lawful
means,  in which~ case this lease shall  terminate and Tenant shall  immediately
surrender  possession of the Premises to Landlord.  In such event Landlord shall
be entitled to recover from Tenant:

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

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

     (iv)  Any  other  amount  necessary  to  compensate  Landlord  for  all the
detriment  proximately  caused by Tenant'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 repair,
renovation  and  alteration of the Premises,  brokers'  commissions,  reasonable
attorneys' fees, and any other reasonable costs, provided,  however, in no event
shall such amount include costs incurred by Landlord to improve the Premises for
a new tenant with new leasehold improvements The "worth at the time of award" of
the amounts referred to in subparagraphs (I) and (ii) above shall be computed by
allowing  interest at the rate per annum  determined  pursuant to Section  16.07
from tenant allowance the date such amounts accrue to Landlord. The worth at the
time of award of the amount  referred  to in or  otherwise.  subparagraph  (iii)
above shall be computed by discounting  such amount at one (I) percentage  Point
above the discount rate of the Federal Reserve Bank of San Francisco at the time
of award.

     (2)Without terminating or effecting a forfeiture of this lease or otherwise
relieving  Tenant of any obligation  hereunder in the absence of express written
notice of Landlord's  election to do so,  Landlord may, but need not,  relet the
Premises  or an~  portion  thereof at any time or from time to time and for such
terms and upon such conditions and rental as Landlord in its sole discretion may
deem proper. Whether or not the Premises are relet, Tenant shall pay to Landlord
all amounts required by Tenant hereunder up to the date that Landlord terminates
Tenant's right to possession of the Premises..  Such payments by Tenant shall be
due at the times  provided in this lease,  and Landlord  need not wait until the
termination  of this  Lease to  recover  them by legal  action  or in any  other
manner.  If Landlord relets the Premises or any portion thereof,  such reletting
shall not relieve Tenant of any obligation hereunder, except that Landlord shall
apply the rent or other  proceeds  actually  collected by it for such  reletting
against amounts due from Tenant hereunder to the extent such proceeds compensate
Landlord for non-performance of any


                                           14

<PAGE>
     obligation  of Tenant  hereunder.  Landlord  may  execute  any  lease  made
pursuant  hereto in its own name,  and the lessee  thereunder  shall be under no
obligation  to see to the  application  by Landlord of any proceeds to Landlord,
nor shall Tenant have any right to collect any such proceeds. Landlord shall not
by any re-entry or other act be deemed to have  accepted any surrender by Tenant
of the Premises or Tenant's  interest  therein,  or be deemed to have terminated
this lease,  or to have  relieved  Tenant of any  obligation  hereunder,  unless
Landlord shall have given Tenant express  written notice of Landlord's  election
to do so as set forth herein.

     (3)Landlord may terminate this lease by express written notice to Tenant of
its  election  to do so.  Such  termination  shall  not  relieve  Tenant  of any
obligation hereunder which has accrued prior to the date of such termination. In
the event of such termination, Landlord shall be entitled to recover from Tenant
the amounts determined pursuant to paragraph (I) above.

     (b)Landlord shall be under no obligation to observe or perform any covenant
of this lease on its part to be observed or performed  which  accrues  after the
date of any default by Tenant hereunder.

     (c)In any action for unlawful detainer commenced by Landlord against Tenant
by reason of any default hereunder,  the reasonable rental value of the Premises
for the period of the unlawful detainer shall be deemed to be the amount of rent
and additional  rent reserved in this lease for such period.  unless Landlord or
Tenant shall prove to the contrary by competent evidence.

     (d)The rights and remedies reserved to Landlord herein. including those not
specifically  described,  shall  be  cumulative,  and,  except  as  provided  by
California  statutory law in effect at the time,  Landlord may pursue any or all
of such rights and remedies, at the same time or otherwise.

     (e)No delay or omission of Landlord ~ exercise,'e any right or remedy shall
be construed as a waiver of any such right or remedy or of any default by Tenant
hereunder.  The  acceptance  by  Landlord of any rent  hereunder  shall not be a
waiver of any  preceding  breach or default by Tenant of any  provision  hereof.
other than the failure or Tenant to pay the particular rent accepted. regardless
of  Landlord's  knowledge  of such  preceding  breach or  default at the time of
acceptance of such rent, or a waiver or Landlord's  right to exercise any remedy
available to Landlord by virtue of such breach or default. The acceptance of any
payment from a debtor in possession,  a trustee,  a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a 'default
under Section 13.01(d).

     (f)Tenant  hereby waives any right of redemption or relief from  forfeiture
under Code of Civil  Procedure  Sections 1174 and 1179, and under any present or
future  statutes or case  decisions to the same  effect,  in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any default by
Tenant hereunder.

DEFAULT
BY LANDLORD

Section 13.03

    Landlord  shall not be deemed to be in  default  in the  performance  of any
obligation  required to be  performed  by it  hereunder  unless and until it has
failed to perform such  obligation  within thirty (30) days after written notice
by Tenant to Landlord  specifying  wherein  Landlord  has failed to perform such
obligation;  provided,  however,  that if the nature of Landlord's obligation is
such that more than  thirty  (30) days are  required  for its  performance  then
Landlord  shall  not be  deemed  to be in  default  if it  shall  commence  such
performance  within  such  thirty  (30) day  period  and  thereafter  diligently
prosecute the same to completion. Tenant's remedies for Landlord's default shall
be limited to suit or action and shall not extend to  withholding  or offsetting
rent.


EXPENSE
OF LITIGATION

Section 13.04

    If either party incurs any expense, including reasonable attorneys' fees, in
connection with any action or proceeding instituted by either party by reason of
any  default  or  alleged  default  of the  other  parry  hereunder,  the  party
prevailing  in such action or  proceeding  shall be entitled to recover its said
reasonable expenses from the other party. For purposes of this provision, in any
unlawful  detainer or other action or proceeding  instituted  by Landlord  based
upon any  default or  alleged  default by Tenant  hereunder.  Landlord  shall be
deemed the  prevailing  party if (a) judgment is entered in favor of Landlord or
(b) prior to trial or judgment  Tenant  shall pay all or any portion of the rent
and charges claimed by, landlord,  eliminate the condition(s),  cease the act(s)
or otherwise cure the omission(s) claimed by Landlord to constitute a default by
Tenant hereunder.


HOLDING          Section 13.05
OVER

     If Tenant or anyone claiming under Tenant shall remain in possession of the
Premises  or any part  thereof  after  expiration  of the lease  term or earlier
termination  thereof  without any  agreement  in writing  /*Controlling  between
Landlord  and Tenant with  respect1thereto,  Tenant shall (a) occupy upon all of
the terms and over the  provisions  of Section  conditions  of this lease except
that the monthly  Minimum  Rent due from Tenant  s~all be two hundred  13.05 the
increased  Minimum Rent percent (200%) of the monthly  Minimum Rent in effect at
the end of the term/(b) pay all damages shall not take  sustained by Landlord by
reason of such retention and (c) indemnify,  defend,  and hold landlord harmless
effect  until the from and against  any loss or  liability  resulting  from such
holding over. If Landlord so notifies Tenant in writing, such holding over shall
constitute a renewal of this lease after the a month-to-month tenancy. case upon
the  terms  set  forth in ation of the  this  Section.  Any such  month-to-month
tenancy shall be terminable at the end of any calendar  month by either party by
written  notice to the other  party given not less than thirty days prior to the
end of such such sixty (60) day-period the parties are in good faith negotiating
a renewal, or extension


                                           14

<PAGE>
     month.  Nothing  contained in this Section  shall be deemed or construed to
waive Landlord's right of reentry or any other right of Landlord hereunder or at
law.

LANDLORD
RIGHTS

Section 13.06

   All  covenants  and  agreements  to be performed ~ by Tenant at Tenant's sole
cost and expense and without  abatement as provided herein If tenantfails to pay
any sum of money, other than rent, required to be paid by it or fails to perform
any other act on its pan to be performed,  and such failure continues beyond any
applicable grace period set forth in this Article, then in addition to any other
remedies  provided  herein  Landlord  may.  but shall not be obligated so to do,
without  waiving or releasing  Tenant from any  obligations of Tenant,  make any
such payment or perform any such other act on Tenant's part. Landlord's election
to make any such payment or perform any such act on Tenant's part shall not give
rise to any  responsibility of I-landlord to continue making the same or similar
payments or performing the same or similar acts.  Tenant shall,  within ten (10)
days after written demand therefor by Landlord,  reimburse Landlord for all sums
so paid by Landlord and all necessary~~incidental  costs, together with interest
thereon at the rate  determined  under Section 16.07,  accruing from the date of
such payment by Landlord;  and Landlord  shall have the tame rights and remedies
in the event of failure by Tenant to pay such amounts as Landlord  would have in
the event of a default by Tenant in payment of rent.


Section 13.07 [section struck out].

                                   ARTICLE XIV

                                  COMMON AREAS

DEFINITION

Section l4.01

     All areas within the exterior  boundaries of the Shopping  Center which are
not now or  hereafter  held for  exdtsive  use by Landlord  or by other  persons
entitled  to  occupy  floor  area in the  Shopping  Center.  including,  without
limiting  the  generality  of  the  foregoing,  parking  areas  and  structures,
including  the  underground  parking  garage,  driveways,   truckways,  delivery
passages.  elevators and escalators,  loading docks, sidewalks,  ramps. open and
endosed courts and malls, landscaped and planted areas, exterior stairways,  bus
stops, retaining walls, restrooms not located within the premises of any tenant.
and other areas and  improvements  provided  by  Landlord  for the common use of
Landlord and tenants and their respective employees and invitees, and the median
strip located between Santa Monica Boulevard  (north) and Santa Monica Boulevard
(south) on which the sign for the  Shopping  Center is located.  shall be deemed
"common  areas."  Landlord may make changes at any time and from time to time in
the size. shape, location,  number and extent ofthe common areas or any of them,
and no such change shall entitle  Tenant to any abatement of rent.

See paragraph 18 of Addendum No.1.

USE

Section 14.02

     Tenant and its employees and invitees shall be entitled to the non~xclusive
use of the comnton  areas during the lease term in common with Landlord and with
other  persons  authorized  by  Landlord  from  time to time to use such  areas,
subject  to such  reasonable  rules  and  regulations  relating  to such  use as
Landlord  may from time to time  establish.  Landlord  shall be  reasonable  and
nondiscriminatory  in its  application  of the  rules  and  regulations  adopted
pursuant to Section 14.02.

CONTROL BY Section 14.03
LANDLORD

     (a)Landlord shall operate,  manage. equip, police. light, repair. clean and
maintain the common areas in such manner as Landlord may in its sole  discretion
determine to be  appropriate/Landlord  may temporarily close any common area for
repairs  or  alterations,  to  prevent a  dedication  thereofor  the  accrual of
prescriptive  rights  therein,  or for any other  reason  deemed  sufficient  by
Landlord.

     (b)Landlord  shall at all times during the term of this lease have the sole
and exclusive control of the automobile parking areas, driveways,  entrances and
exits and the sidewalks and pedestrian  passageways and other common areas.  and
may at any time and from time 10 time during the term hereof restrain any use or
occupancy  thereof except as authorized by the rules and regulations for the use
of such  areas

     /* So long as it is a first-class  manner  consistent  with other  shopping
Centers in Southern - California -


                                           14

<PAGE>
     established  by Landlord from time to time.  The rights of Tenant in and to
the common  areas  shall at a times be subject  to the rights of  Landlord,  the
other  tenants of Landlord and the other owners of stores I the Shopping  Center
to use the same in common with Tenant,  and Tenant shall keep said areas free an
clear of any  obstructions  created or  permitted  by Tenant or  resulting  from
Tenant's operation.  If in th opinion of Landlord unauthorized persons are using
any of said  aretas~retson4th%rrtsAnceofTenar  in the Shopping  Center,  Tenant,
upon  demand of a  restrain  suc  unauflrorzed  use b  appropriate  proceedings.
Nothing  herein shall affect the right of Landlord at any time to remove any suc
unauthorized persons. See paragraph 18 of Addendum No - 1 -

     (c) In the event Landlord elects or is required to limit or control parking
by customers or invitees C the Shopping Center, whether by validation of parking
tickets or any method of  assessment,  or an  program  for free or reduced  cost
transportation,  Tenant agrees to participate in such  validation,  assessmer or
transportation  program under such reasonable  rules and regulations as are from
time to time  establishe by Landlord with respect  thereto.  See paragraph 16 of
Addendum No.1.

EMPLOYEE
PARKING

Section 14.04

     Tenant and its  employees  shall park their  vehicles  only in such parking
areas in the  Shopping  Center if any, as are from time to time  designated  for
that purpose by Landlord,  and Landlord may change suci designated  areas at any
time upon written notice Ten employees'  vehicle  license numbers within fifteen
[section struck out]. Tenant agrees to assume  responsibility  for compliance by
its employees with the parkin provisions  contained herein.  Landlord may charge
TenantA  atrditignra~reinLt  or e ist SUCCR  triolation anc Twenty-Five  Dollars
($25.00) for each subsequent  violation.  Tenant also hereby authorizes Landlord
t( tow away from the Shopping Center any vehide  belonging to Tenant or Tenant's
employees  parked ir violation of these  pmvisions,  and/or to attach  violation
stickers or notices to. such vehicle.

     Without  limiting the generality of the foregoing,  Landlord shall have the
right for the month 0 December to locate off-site parking at any location within
two (2) miles of the Shopping Center. to designate such off-site area as parking
for Tenant's  employees an to require Tenant's employees tc shutde-bus from such
off-site  parking areas to the Shopping  Center/  ~tLandlord  elects to use such
off-sirt  employee  parking,  Tenant shall pay to Landlord,  as additional rent,
Tenant's  Proportionate Sham oi Landlord's costs incurred in using such off-site
areas and providing shuttle bus ser-vice to the Shoppinj Center. /**proyided the
majority of the other tenants' of the Shopping  Center are similarly  obligated.



COMMON
AREA
COSTS

Section 14.05

     Tenant shall pay to Landlord,  as additional rent,  Tenant's  proportionate
share all costs and expenses  incurred by Landlord in the operation,  repair and
maintenance of the common areas,  including the underground garage, median strip
and sign located thereon  referred to in Section 14.01,  during the term of this
lease. Such costs and expenses shalt include, without limiting the generality of
the foregoing, utility costs, gardening,  landscaping,  repaving, cost of public
liability, property damage. vandalism and malidous mischief and other insurance,
taxes (as defined in Section 5.02, but applicable to the common areas). repairs,
painting. lighting, deaning. trash removal, depredation of equipment, security,-
fire protection,  and similar items and an amount equal to fifteen percent (15%)
of all such costs and expenses to cover Landlord's  administrative  and overhead
expense. Such costs and expenses shall not include any allowance for depredation
of common area improvements, but shall include all charges. surcharges and other
levies of whatsoever nature imposed by, and all costs (whether or not capital in
nature) of  compliance  with the  requirements  of, any federal,  state or local
governmental  agency regulating the environmental,  health and safety aspects of
the Shopping  Center and all costs,  as reasonably  amortized by Landlord,  with
interest  at the rate  determined  pursuant  to Section  16.07,  of any  capital
improvement  which is  reasonably  calculated  to reduce  common area  operating
costs.



                                   ARTICLE XV

                         SIGNS, LIGHTING AND ADVERTISING

PROHIBITED
ACTIVITIES

Section 15.01

     Tenant shall not, without  Landlord's prior written consent,  do any of the
following:

     (a)  Install or affix to the  exterior  of the  Premises  any  lighting  or
plumbing fixtures,  shades. awnings. or exterior decorations (including exterior
painting).

     (b) Install or affix to the  exterior  doors or windows of the  Premises or
within any area  immediately  fronting  on such doors and  windows  and  visible
therefrom, any signs, lettering, placards or the like. /*

     (c) Display or sell merchandise in, or otherwise obstruct. any area outside
of the Premises.

     (d) Cause or permit to be used any  advertising  materials or methods which
are  objectionable  to  Landlord  or to other  tenants of the  Shopping  Center,
including,  without  limiting the  generality  of the  foregoing,  loudspeakers.
mechanical or moving display  devices,  unusually  bright or flashing lights and
similar devices the effect of which may be seen or heard outside the Premises.

     (e) Solicit  business in the parking or other common areas,  nor distribute
any hand bills or other advertising matter in the parking or other common areas.

                                          17



<PAGE>


     (f)  Use any  sign  or  advertising  material  that is not of  professional
quality.

     For  the  purpose  of this  Article,  the  term  "exterior"  shall  include
exposures on any enclosed mall, and when constructed.

MAINTENANCE    Section 15.02

     Tenant  shall at all times  maintain  its show windows and signs in a neat,
clean and orderly  conditior If, as to any sign located on an exterior  exposure
ofthe  Premises,  Tenant shall fail to do so after three (3 days written  notice
from Landlord, Landlord may repair, clean or maintain such exterior sign and the
co thereof  shall be payable by Tenant to  Landlord  upon  demand as  additional
rent.

DISPLAY WINDOW UGHTING

Section 15.03

     Tenant shall keep its display  windows well  lighted  during all  operating
hours or Tenant and until suci reasonable time as may be fixed from time to time
by Landlord for all of the tenants in the Shoppin4-Center, unless prevented from
doing so by causes beyond Tenant's reasonable control.

ADVERTISED
NAME AND ADDRESS

Section 15.04

     Tenant  shall use as its  advertised  business  address the words  "Century
City." Tenant shall not use tht words Century City for any purpose other than as
the  address of the  business to be  conducted  by Tenant ir the  Premises,  and
Tenant  shall not acquire any  property  right in or to any name which  contains
said worc  combination  as a part  thereof.  Any  permitted use by Tenant of the
words  Century City during the term 0 this lease shall not permit Tenant to use,
and Tenant shall not use, such words either after the  terminatior of this lease
or at any other location.

ADVERTISING
EXPENDITURES

Section 15.05 See paragraph 19 of Addendum No.1.

[section struck out]

                                   ARTICLE XVI

                                  MISCELLANEOUS

OFFSET
STATEMENT

Section 16.01

     (a)  Landlord  and Tenant  shall at any time and from time to time upon not
less than  twenty  days  prior  written  notice  from the other  party  execute,
acknowledge  and deliver to Landlord a statement in writing (i) certifying  that
this lease is unmodified and in full force and effect (or, if modified,  stating
the nature of such  modification and certifying that this lease, as so modified,
is in Cull  force  and  effect)  and the  dates to which  the  Minimun  Rent and
additional rent are paid in advance, if any that there are not. uncured defaults
on the part of, hereunder,  or satisfying such defaults if any claimed and (iii)
acknowledging the accuracy of such other facts as are included in such statement
by may be  relied  upon by any  prospective  purchaser  or  encumbrancer  of the
Premises or ofall or any portion  ofthe real property of which the Premises area
part.

     (b)Either  party's failure to deliver such statement within such time shall
be  conclusive  ~ (i) that  this  lease is in full  force  and  effect,  without
modification  except as may be  represented  by /L~..ll~.' (n) that there are no
uncured  defaults  in4~r4's  performance.  (iii)  that not more than one  months
Minimum Rent has been paid in advance and (iv) that any other statements of fact
included by in the statement are correct.

(c) [section struck out]
                                           18

<PAGE>
LANDLORD'S
RIGHT OF
ACCESS

Section 16.02

     Landlord  and its agents  shall have the right (a) to enter the Premises at
all  reasonable  time for*r the purpose of examining or  inspecting  the same to
ascertain  if  they  are in  good  repair,  making  such  alterations,  repairs,
improvements  or  additions  to the  Premises  as  Landlord  may be  required or
permitted to make hereunder,  exhibiting the same to prospective  purchasers and
posting  notices which Landlord may deem necessary for its protection and (b) at
any time in an emergency. During the six (6) months prior to the end of the term
of this lease (and during any period during which Tenant is holding over with or
without  the  consent  of  Landlord),  ... - 1 " Tenant I shall  cooperate  with
Landlord in exhibiting the Premises to prospective  tenants.  Access by Landlord
hereunder  shall  not,~under  the  circumstances,  unreasonably  interfere  with
-Tenant's  use and  enjoyment of the  Premises,  and tenant waives any claim for
damages  for any  injury  or  inconvenience  to or  interference  with  Tenant's
business,  occupancy or quiet  enjoyment  arising out of my  permitted  entry~by
Landlord.  Tenant  acknowledges  that  Landlord  shall  not  retain a key to the
Premises  and may, in any  emergency,  enter the  Premises  in any manner  which
Landlord  reasonably  determines to be necessary.  without liability therefor to
Tenant.  No entry by  Landlord  pursuant  to this  Section  shall be  deemed  to
constitute  an  eviction  of  Tenant or a  forcible  detainer  of the  Premises.
/**excluding  Landlord's  agents  and  representatives   negligence  or  willful
misconduct,

/*and upon ~reasonable notice,


TRANSFER OF
LANDLORD'S
INTEREST

Section 16.03

     In the event of any  transfer or transfers  of  Landlord's  interest in the
Premises,  the  transferor  shall  be  automatically  relieved  of any  and  all
obligations and  liabilities on the pan of Landlord  accruing from and after the
date of such transfer~  provided the transferee assumes all such obligations and
liabilities.


FLOOR AREA

Section 16.04

     "Floor area as used in this lease  means,  with respect to the Premises and
with respect to each store separately leased, the aggregate of (a) the number of
square feet of floor space on all floor levels, measured from the center line of
party walls between  tenant areas and the exterior face of all other walls,  and
(b) all outside  selling areas used for the sale at merchandise  by tenants.  No
deduction  or  exclusion  from floor  area  shall be made by reason of  columns,
stairs,  elevators,  escalators,  or other interior  construction  or equipment.
Landlord  may, at any time and from time to time,  make  changes or additions to
the Shopping  Center  which  result in an increase or decrease in the  aggregate
floor area occupied or designed for occupancy by tenants of the Shopping Center;
provided,  that,  except as provided  herein,  no such change or addition  shall
increase or  decrease  the floor area of the  Premises  without  Tenant's  prior
consent.

SEPARABILITY

Section 16.05


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


Section 16.06 [section struck out]

LATE
PAYMENTS

Section 16.07

     (a)Any  amount due from Tenant to Landlord  hereunder  which is not paid to
Landlord  when due shall bear  interest  at the maximum  rate of  interest  then
permitted by the applicable usury law, accruing from the date due until the same
is fully paid.  Payment ofsuch  interest shall not excuse or cure any default by
Tenant pursuant to this Lease.

     (b)TENANT  ACKNOWLEDGES THAT THE LATE PAYMENT BY TENANT TO LANDLORD OF RENT
AND OTHER SUMS DUE HEREUNDER WILL CAUSE LANDLORD TO INCUR COSTS NOT CONTEMPLATED
BY THIS LEASE, THE EXACT AMOUNT OF WHICH WILL BE


                                         19

<PAGE>
     EXTREMELY  DIFFICULT  TO  ASCERTAIN.  SUCH  COSTS MAY  INCLUDE,  BUT ARE NO
LIMITED TO,  ADMINIST~VE,  PROCESSING AND ACCOUNTING  CHARGES,  AND LATE CHARGES
WHICH MAY BE IMPOSED ON LANDLORD BY THE TERMS OF ANY  EMCUMBRANCH  COVERING  THE
PREMISES.  ACCORDINGLY,  IF ANY SUM DUE FROM  TENANT  SHALL NOT BE  RECEIVED  BY
LANDLORD OR LANDLORD'S DESIGNEE WITHIN FIVE DAY AFTER THE DATE DUE, TENANT SHALL
PAY TO LANDLORD,  IN ADDITION TO nil INTEREST  PROVIDED  ABOVE, A LATE CHARGE IN
THE AMOUNT OF $100.00, AS LIQUIDATED  DAMAGES.  THE PARTIES AGREE THAT SUCH LATE
CHARGE REPRESENTS A FAIF AND REASONABLE ~MATE OF THE COST LANDLORD WILL INCUR BY
REASON OI LATE  PAYMENT  BY  TENANT.  ACCEPTANCE  OF SUCH LATE  CHARGE  SHALL Nm
CONSTITUTE A WAIVER OF TENANT'S DEFAULT WITH RESPECT TO SUCH OVERDUE AMOUNT, NOR
PREVENT  LANDLORD FROM EXERCISING ANY OTHER RIGHTS AND REMEDIES  GRANTED{1/2NDER
OR BY LAW TO LANDLORD.

 Landlord's Initials Tenant's Initials

[section struck out]

TIME OF
ESSENCE

Section 16.08

    Time is of the essence with respect to the performance of every provision of
this lease in which time of performance is a factor.


HEADINGS

Section 16.09

    The article and section captions contained in this lease are for convenience
only and shall not be considered in the  construction or  interpretation  of any
provision hereof.


INCORPRATION OF
PRIOR AGREEMENTS;
AMENDMENTS

Section 16.10

     This lease and the exhibits  hereto cover in full each and every  agreement
or every kind or nature  whatsoever  between the parties  hereto  concerning the
Premises  and  the  Shopping  Center,  and  all  preliminary   negotiations  and
agreements  of  whatsoever  kind with  respect to the  Premises or the  Shopping
Center, except those contained herein, are superseded and of no further force or
effect.  No person.  firm or corporation  has at any time had any authority from
Landlord td make any  representations  or promises  on behalf of  Landlord,  and
Tenant expressly agrees that if any such  representations  or promises have been
made by Landlord or others,  Tenant hereby waives all right to rely thereon.  No
verbal  agreement  or  implied  covenant.shall  be held to vary  the  provisions
hereof, any statute, law, or custom expense to the contrary notwithstanding.  No
provision  of this lease may be amended  or added to except by an  agreement  in
writing signed by the parties hereto or their respective successors in interest.

NOTICES

Section 16.11

     Any notice,  consent or approval  ("notice")  required or  permitted  to be
given hereunder shall be in writing and may be served  personally or by mail; if
served by mail it shall be addressed as specified in the applicable  Basic Lease
Provision T~- --- . - Any notice which is  personally  served shall be effective
upon service:  any notice given by mail shall be deemed  effectively given three
(3) days after  deposit in the United  States  mail,  registered  or  certified,
postage  prepaid and  addressed to the Premises  (for Tenant) or as specified in
the applicable Basic Lease Provision.  Either party may by written notice to the
other from time to time specify a different address for notice purposes.


BROKERS

Section 16.12

    Landlord and

     /Tenant warrants that it has had no dealings with any real estate broker or
agent in connection with the  negotiation of this lease,  except as specifically
stated to the coptury in the applicable  Irasic Lease  Provision,  and expressly
agrees and covenants to hold ~ea.e~AarmIess and to defenW Lee"- from any claims,
threatened or asserted, by any broker, finder or agent claiming under or through
in connection with the negotiation and execution of this lease.

  /*the other


WAIVERS   Section 16.13

     No waiver  of any  provision  hereof  shall be deemed a waiver of any other
provision  to or  approval of any act by one of the panics  hereto  shall not be
deemed to  render  obtaining  of such  party's  consent  to or  approval  of any
subsequent act.


RECORDING       Section 16.14

     Tenant  shall not record this lease  without the prior  written  consent of
Landlord.  Tenant. upon the request of Landlord, shall execute and acknowledge a
"short form"  memorandum  of this lease for recording  purposes,  which shall be
prepared and recorded at Landlord's expense.

                                       20

<PAGE>

GROUP
PROMOTION
ACTIVITIES

Section 16.15

     (a) - Tenant shall join and maintain  membership  as a tenant member in the
CENTURY. CITY SHOPPING CENTER MERCHANTS ASSOCI~ON (the "Association" herein) and
shall abide by the by-laws and regulations of the Association  Tenant shall pay.
as additional  rent,  minimum annual dues with respect to such membership in the
initial  amount  per  year  per  square  foot  of  floor  area  of the  Premises
established  from time ib time by  Association.  Tenant  shall pay such  minimum
annual dues at the rate so established  (or. as to premises with less than 1,000
square   feet  of  floor   area,   in  the  amount   ofSl,OOO.00,   if  greater)
notwithstanding  the fact that one or more other members of the  Association may
now or hereafter pay at a lesser rate or in a lesser minimum  amount.  Provided,
however,  that in the event the per square foot rate for annual dues  payable by
tenant  members  is  increased  in the  manner  provided  in the  by-laws of the
Association to a rate in excess of that in effect at the date of this lease,  or
in the event the amount of minimum  annual dues for a tenant member is increased
to an amount greater than $1,000.00 then, in either such event, Tenant shall pay
dues at such higher rate or in such higher minimum amount.  Such additional rent
shall be payable  monthly or  quarterly  as  determined  by  Landlord,  shall be
payable  with and at the same time as the next  Minimum  Rent  payment due after
receipt  of an  invoice  for such  installment  of dues and shall be  payable to
Landlord or, at Landlord's election, to the Association. Any such dues which are
paid to Landlord  shall be delivered by it to the  Association  for its use, and
Landlord shall have no liability to account (other than to the  Association) for
any  such  dues  received  by it.  The  promotional  director,  if  any,  of the
Association  shall be under the exclusive  control and  supervision of Landlord,
which shall have the sole authority  with respect to  employment.  discharge and
compensation of such promotional director. Landlord represents and warrants that
excluding the majors, the majority of the other tenants are similarly obligated.


     (b)Tenant  acknowledges that Landlord and Tenant each desire to improve the
collective  advertising  and  promotions for the Shopping  Center.  To that end,
Landlord is seeking to  establish a  promotional  fund (the "Fund") to establish
more centralized  control of promotional  policies,  activities and expenditures
and to eliminate inefficiencies which have arisen in the conduct of proniotional
activities through the Association. Landlord and Tenant acknowledge that, due to
the  requirements  of  existing  leases  with  tenants of the  Shopping  Center,
establishing   the  Fund  and   relieving   the   Association   of   promotional
responsibility will be a process which may require a substantial period of time.
Accordingly, Landlord and Tenant agree as follows:


     (i) To and until the end of the  calendar  month in which  Tenant  receives
from Landlord the written notice provided for in clause (II) below, Tenant shall
maintain  membership in the Association and pay dues and assessments  thereto in
the manner  required by subsection  (a) above.  From and after the expiration of
such calendar  month,  Tenant shall cease to be a member of the  Association and
shall no longer be required  to compiy with the  provisions  of  subsection  (a)
(except to pay  accrued and unpaid  dues and  assessments  owed by Tenant to the
Association  as of the end of such  calendar  month).  Thereafter.  Tenant shall
contribute to the fund in the manner and amounts provided in clause (iii) below.
Moreover, from and after such date, all references in Section 15.05 to the Board
of  Directors  of the  Association  shall be  amended  to  refer  to  Landlord's
promotional director for the Fund.


     (ii) Landlord may at any time hereafter elect, by written notice to Tenant,
to require  Tenant to commence  the  contributions  to the Fund  provided for in
clause  (ili) (and,  concurrently,  to  eliminate  Tenant's  future  obligations
pursuant to subsection  (a)).  Provided,  however.  that  Landlord  shall not be
entitled to give such notice to Tenant unless and until fifty-one  percent (51%)
of the tenants (by number) of the Shopping Center (induding Tenant) (A) shall be
required to contribute to the Fund,  and (B) shall be given the notice  provided
for in this clause.  Landlord's delivery to Tenant of the notice provided for in
this dause shall be deemed a  certification  by Landlord that the conditions set
forth in this clause have been met or are being met  concurrently  with delivery
of such notice to Tenant. Apart from meeting the foregoing conditions,  Landlord
shall not be  restricted or limited in any way in its selection of the time when
the notice provided for in this clause shall be given, and Landlord may elect to
give such notice to less than all tenants of the Shopping  Center then obligated
to contribute to the Fund upon  Landlord's  election (so long as the  percentage
requirement  set forth above is met),  or to give such notices to tenants of the
Shopping Center at different  times.  Any notice hereunder shall be given in the
manner provided in Section 16.11.

     (iii) The Fund shall be established, maintained and used as follows:

     (A)Landlord  may, at its option.  establish and continue an advertising and
promotional  Fund to furnish and  maintain  professional  advertising  and sales
promotions for the benefit of all  contributing  tenants of the Shopping Center.
The purposes of the Fund shall  b~e~ttrnssist  the  businesses  of  contributing
tenants by sales promotions.  group  advertising and other activities  promoting
contributing Tenants.

     (B)Tenant  shall  initially  contribute  to the  Fund an  amount  equal  to
Tenant's dues and  assessments to the  Association at the date that Tenant first
becomes obligated to commence  contributions to the Fund. Such contributions may
be  expressed  in terms of a rate per  square  foot of floor area (and a minimum
contribution  without  regard to floor area) and shall be made in such  periodic
installments as Landlord may select,  but no more  frequently than monthly.  The
rate used for determining the amount  ofTenant's  contributions to the Fund need
not be the same rate used in determining the amount of contributions to the Fund
by other  tenants  of the  Shopping  Center  Contributions  to the Fund shall be
additional  rent  pursuant  to this  tease.  and  failure  of  Tenant to pay any
required contribution to the Fund as and when due shall be deemed


                                         21

<PAGE>


     a default  under this lease  entitling  Landlord to exercise  all  remedies
available to a Landlord against a defaulting  tenant,  including those set forth
in Article XIII.

     Tenant's initial contribution may be increased at the end of any tease year
after Tenant first  becomes  obligated to  contribute to the Fund to reflect any
change in the cost of living.  [section  struck out] In no event shall  Tenant's
required annual  contribution to the Fund after any such adjustment be less than
Tenant's required annual contribution immediately prior to such adjustment,  and
in  no  event  shall  Tenant's  required  annual  contribution  after  any  such
adjustment  exceed 108% of Tenant's  required  annual  contribution  immediately
prior to such adjustment, notwithstanding increases or decreases in the index as
of any  adjustment  date which would justify a larger  increase or a decrease in
Tenant's  required annual  contribution.  Except as expressly  provided  herein,
adjustments  of Tenant's  annual  contribution  to the Fund shall be made in the
manner  provided in against a defaulting  tenant,  including  those set forth in
Article XIII. Section 3.02.

/*See paragraph 21 of Addendum No.1.

     (C)Landlord shall have the exclusive right to hire a promotional  director,
secretary and other personnel who, in Landlord's sole judgment,  are required to
carry  out the  putp~  es-of the  Fund.  All such  personnel  shall be under the
exclusive control and supervision of Landlord, who shall have the sole authority
and  responsibility  to hire and discharge such personnel and to determine their
compensation and benefits.  Landlord shall have the sole authority to direct the
performance by such personnel of their activities, including but not limited to,
placement of  advertising,  scheduling of  promotional  events and attendance at
trade or industry conventtons.

     (D)Landlord  shall  have the right to  select a  committee,  composed  of a
representative of Landlord and not more than four (4) representatives of tenants
at the  Shopping  Center,  to  render  advice to  Landlord  in  connection  with
promotional  and  advertising  activities  conducted  through the Fund. All such
committee  members  shall be  selected  by and shall  serve at the  pleasure  of
Landlord. The sole function of such committee shall be to render advice when and
if required by Landlord,  and such  committee  shall have no approval or consent
rights with  respect to  Landlord's  decisions  concerning  the use of the Fund.
Tenant agrees to cause its manager to serve as a member or such  committee if so
requested by Landlord.

     (E)During  any period during which the  Association  continues to exist and
conduct promotional and~or advertising functions, Landlord may, but shall not be
required  to.  conduct  joint  advertising  or  promotions  involving  both  the
Association  and the Fund, with the cost of such activity split between the Fund
and the  Association  based upon the respective  aggregate  floor areas of their
contributors or on such other basis as Landlord determines to be equitable.

     (iv)  From  and  after  Tenant's  obligation  to  contribute  to  the  Fund
commences,  Tenant shall have no further interest,  voting or otherwise,  in the
Association, and the Association may continue or elect to liquidate and dissolve
as the  members  thereof  determine,  without  notice to or vote or  consent  of
Tenant.

[section struck out]


LIENS               Section 16.16

     Tenant  shall do all things  reasonably  necessary to prevent the filing of
any mechanics' or other liens against the Shopping  Center or any pan thereof by
reason  ofwork,  labor,  services or materials  supplied or claimed to have been
supplied to Tenant, or anyone holding the Premises, or any part thereof, through
or under  Tenant.  If any such  lien  shall  at any  time be filed  against  the
Shopping  Center,  Tenant shall either cause the same to be discharged  ofrecord
within  twenty  (20) days after the date  offiling  of the same or, if Tenant in
Tenant's  discretion  and in good  faith  determines  that such  lien  should be
contested.  shjtll  furnish such security as may be necessary or required to (a)
prevent any  foreclosure  proceedings  against the  Shopping  Center  during the
pendencyofsuch  contest,  and (b) cause a title company  selected by Landlord to
remove  such  lien as a matter  affecting  title  to the  Shopping  Center  on a
preliminary  title  report or title  policy  issued with respect to the Shopping
Center.

     Nothing  contained  herein shall imply any consent or agreement on the part
of Landlord to subject  Landlord's  estate to liability  under any mechanics' or
other lien law.  Tenant shall give Landlord  adequate  opportunity  and Landlord
shall have the right to post such notices of  nonresponsibility  as are provided
for in the mechanics' lien laws of California.


SUBORDINATION       Section 16.17

     This lease shall, at Landlord's  option,  be either superior or subordinate
to any ground  lease.  mortgage or deed of trust that may exist or  hereafter be
placed upon the Shopping Center or any part hereof and to


                                         22

<PAGE>


     any and all payments and advances to be made thereunder and to the interest
thereon and to all renewal  replacements and extensions  thereof.  Tenant shall,
upon written demand by Landlord,  (a) execute suc instruments as may be required
at any time and from time to time to  subordinate  the  rights  and  interest  o
Tenant  under this lease to the position of such ground lease or the lien of any
such mortgage or deed C trust, 0'? if requested by Landlord,  to subordinate any
such ground lease, mortfla&~9~~eed of tru~t to thi

GENDER;
TENANTS


     lease,'( b) supply such financial  information  concerning  Tenant as may ~
lesso or lender or (c) amend this lease in any manner  reasonabglgenypseterd  by
such  ground  lessor  or lender s~ long as such  amendment  does not  materially
impair/any  ngftts or  remedies of Tenant  hereunder  7Provided,  however,  that
Tenant shall,  in the event any  proceedings are brought for termination of suci
/*See pat~gtaph ~ ground lease or for the foreclosure of any mortgage or deed of
trust,  attorn  to  the  ground  lessor  C  of  Addendum  No.1.  purchaser  upon
foreclosure  sale or sale under power of sale,  and shall  recognize such ground
lessor purchaser as Landlord under this lease,  and, so long as Tenant is not in
default hereunder, sud termination or foreclosure shall not terminate this lease
or otherwise affect Tenant's rights hereunder.

FORCE
MAJEURE        Section 16.18

     In the event that either  Landlord or Tenant is delayed in  performing  any
obligation of Landlord or Tenant  pursuant to this lease by any cause beyond the
reasonable  control of the party required to perform such  obligation,  the time
period for  performing  such  obligation  shall be  extended by a period of time
equal to the period of the delay. For the purpose of this Section:

     (a)A cause shall be beyond the reasonable  control of a party to this lease
when such cause  would  affect any person  similarly  situated  (such as a power
outage, labor strike or truckers' strike) but shalt noi be beyond the reasonable
control of such party when  peculiar to such party (such as financial  inability
or ordering long lead time materials).

     (b)This Section shall not apply to any obligation to pay money or delay the
Rent Commencement Date.

     (c)In the event of any  occurrence  which a party  believes  constitutes  a
cause  beyond  the  reasonable  control  of such  party and which will delay any
performance by such party hereunder, such party shall promptly in writing notify
the other  party of the  occurrence  and nature of such cause,  the  anticipated
period of delay and the steps being taken by such party to mitigate  the effects
of such delay.


YIELD UP PREMISES              Section 16.19

     At the  expiration  or earlier  termination  of this  lease,  Tenant  shall
peaceably  yield  up the  Premises  and all  additions  made  upon  the  same to
Landlord, in first class condiu.oda*nd shall execute, acknowledge and deliver to
Landlord, within five (5) days after written demand from Landlord to Tenant, any
quitclaim  deed or other  document  which  may be  reasonably  requested  by any
reputable title company to remove this lease as a matter  affecting title to the
Premises.

/*reasonable wear and tear excepted

TENANT'S
AUTHORITY      Section 16.20

     Each  individual  executing  this lease on behalf of Tenant  represents and
warrants  that the  execution  and delivery of this lease on behalf of tenant is
duly  authorized  and that he or she is  authorized  to execute and deliver this
lease on behalf of the*Tenant,~if Tenant is a corporation/Tenant  shall within~n
(10) days after  execution of this lease,  deliver  to'~er  certified  copy of a
resolution ~ board of directors or the executive  committee thereof  authorizing
or ratifying the execution of this lease.

/**Landlord or


SAFETY
AND HEALTH          Section  16.21

     T e n a nt c o venants at all times during the term of this lease to comply
with the  requirements  of the  Occupational  Safety  and  Health Act of 1970,29
U.S.C.  Section  651  Ct  seq.  and  any  analogous  legislation  in  California
(collectively,  the "Act"),  to the extent that the Act applies to the  Premises
and any activities  therein.  Without  limiting the generality of the foregoing,
Tenant  covenants  to maintain all working  areas,  all  machinery,  structures,
electrical  facilities  and the like upon the Premises in a condition that fully
complies with the requirements of the Act,  including such requirements as would
be applicable  with respect to agents,  employees or contractors of Landlord who
may from  time to time be  present  upon the  Premises,  and  Tenant  agrees  to
indemnify and hold harmless  Landlord  from any  liabilities,  claims or damages
arising as a result of a breach of the  foregoing  covenant  and from all costs,
expenses and charges arising therefrom including, without limitation, attorneys'
fees and court costs incurred by Landlord in connection therewith.

See paragraph 22 of Addendum No.1.

INDEMNITIES      Section 16.22

     The obligations of the indemnifyi ng party under each and every  indemnific
ation and hold  harmless  provision  contained  in this lease shall  survive the
expiration or earlier  terminatio n of this lease to and until the last to occur
of (a) the last date  permitted  by law for the  bringing of any claim or action
with respect to which  indemnification  maybe claimed by the  indemnified  party
against the indemnifying party under such provision or (b) the date on which any
claim or action for which indemnification may be claimed under such provision is
fully and  finally  resolved  and,  if  applicable.  any  compromise  thereof or
judgment  or award  thereon  is paid in full by the  indemnifying  party and the
indemnified  party is reimbursed by the indemnifying  party for any amounts paid
by the  indemnified  party in  compromise  thereof or upon a  judgment  or award
thereon and in defense of such action or claim,  including reasonable attorneys'
fees incurred.



                                         23

<PAGE>



NON-DISCLOSURE

Section 16.23

   Landlord and Tenant agree that the terms of this lease are  confidential  and
constitute  proprietary  information  of the parties  hereto.  Disclosure of the
terms hereof could  adversely  affect the ability of Landlord to negotiate  with
other  tenants of the Shopping  Center.  Each of the parties  hereto agrees that
such parry, and its respective partners, officers, directors,  employees, agents
and attorneys.  shall not disclose the terms and conditions of this lease to any
other person without the prior written  consent of the other patty hereto except
pursuant to an order of a court of competent  jurisdiction.  Provided.  however,
that  either  party  hereto  may  disclose  the terms  hereof to its  lenders or
prospective  lenders  or its  respective  accountants  who audit its  respective
financial  statements or prepare its respective tax returns,  to any prospective
transferee  of all or any  portions  of  their  respective  interests  hereunder
(including a  prospective  sublessee  of Tenant),  to any  governmental  entity,
agency or person to whom disclosure is required by applicable law, regulation or
duty of diligent  inquiry and in connection  with any action  brought to enforce
the terms of this lease, on account of the breach or alleged breach hereof or to
seek a  judicial  determination  of the  rights  or  obligations  of the  panics
hereunder.


GENDER;
TENANTS

Section 16.24

   The use of the masculine  pronoun  includes the feminine and neuter  genders:
the use of the singular form of a pronoun includes the plural and vice-versa. If
there be more than one person or entity indicated as tenant herein,  each person
or entity  subscribing  as tenant shall be jointly and severally  liable for all
obligations of tenant hereunder.


QUIET
ENJOYMENT

Section 16.25


     Landlord  represents  and warrants  that it has full right and authority to
enter into this lease and that Tenant,  so long as it pays the rent and performs
its other covenants and agreements herein set forth, shalt peaceably and quietly
have, hold and enjoy the Premises for the term without  hindrance or molestation
from Landlord  subject to the terms and  provisions of this lease.  In the event
this lease is a sublease, then Tenant agrees to take the Premises subject to the
provisions  of  the  prior  leases.   Landlord  shall  not  be  liable  for  any
interference or disturbance of other tenants or third persons,  nor shall Tenant
be  released  from any of its  obligations  under  this  lease  because  of such
interference or disturbance.

ERISA WARRANTY

Section 16.26

     Tenant  represents  and warrants to Landlord  that,  as of the date hereof,
neither   Tenant  nor  any   affiliate  of  Tenant  has   employee   pension  or
profit-sharing   plans  that  hold,  in  the  aggregate.   beneficial  interests
representing  greater  than five  percent  (5%) of the total assets of any RREEF
investment   fund.   Tenant   acknowledges   that  a  breach  of  the  foregoing
representation  and warranty may constitute a prohibited  transaction  under the
terms or the Employee  Retirement  Income  Security Act of 1975 and the Internal
Revenue Code, as modified by "TE 82-SI, an administrative exemption from certain
of the  prohibited  transaction  rules  granted to the RREEF Funds by the United
States  Department  of Labor (46 Fed. Reg.  14,238 (April 2, 1982)).  If, at any
time,  Tenant or any affiliate of Tenant has employee pension or  profit-sharing
plans that hold, in the aggregate,  beneficial  interests  representing  greater
than five percent (5%) of the total assets of any RREEF investment fund,  Tenant
shall promptly advise Landlord of such fact in writing.

ASSIGNS

Section 16.27

     Subject to the provisions of Article X, the terms, covenants and conditions
contained  herein  shall be binding  upon and inure to the benefit of the heirs,
successors, executors, administrators,  marital communities, if any, and assigns
of the panics hereto.

NO OPTION

Section 16.28

     Submission  of this lease  shall not be deemed to be a  reservation  of the
Premises.  Landlord shall not be bound hereby until its delivery to Tenant of an
executed copy hereof signed by Landlord,  already  having been signed by Tenant,
and until such  delivery  Landlord  reserves  the right to exhibit and lease the
Premises to other prospective tenants. Notwithstanding anything contained herein
to the  contrary,  Landlord may withhold  delivery of possession of the Premises
from Tenant until such time as Tenant has paid to Landlord the security  deposit
required by Section  16.06,  the first month's  Minimum Rent pursuant to Section
3.01, and any other sum owed pursuant hereto.

LANDLORD
LIABILITY

Section 16.29

   The  obligations  of Landlord  herein are  intended to be binding only on the
property of the entity acting as Landlord and shall not be  personally  binding.
nor shall any resort be had to the private properties of, any of its trustees or
board of directors and officers, as the case may be, its investment manager, the
general partners thereof any employees or agents of Landlord.  or the investment
manager.


ACCOUNTS         Section 16.30  See paragraph  23  of Addendum No.1.

                                                                 *six (6) months
     Tenant's failure to object to any statement, invoice or billing by Landlord
within----after  receipt thereof shall  constitute  Tenant's  acquiescence  with
respect  thereto and shall  conclusively  establish such  statement,  invoice or
billing as an account stated between Landlord and Tenant


                                    24

<PAGE>
                                  ARTICLE XVII

                            CONSTRUCTION OF PREMISES

CONDITION
OF PREMISES

Section 17.01

   Tenant  accepts the  Premises as [5 and after  inspection  by Tenant.  Tenant
acknowledges  that  neither  Landlord  nor any  agent of  Landlord  has made any
representation  or warranty with respect to the Premises or the Shopping  Center
or the suitability of either for the conduct of Tenant's business.


DESIGN
REVIEW

Section 17.02

   Within seven (7) business  days after  Tenant's  receipt of a fully  executed
copy of this  lease,  Tenant  and the  Shopping  Center  General  Manager or his
designee (the "Manager") shall hold a preliminary design meeting (the "PDM"), to
review and discuss  Tenant's  Work pursuant to Section  17.04.  The PDM shall be
subject to and in accordance with the following:

     (a)Tenant shall be responsible to schedule the PDM promptly upon receipt by
Tenant  of a fully  executed  copy of this  lease.  The POM  shall be  scheduled
through the Manager at (213) 553-5300.  Tenant shall not commence preparation of
preliminary  plans and  specifications  until the PDM has been  held,  and in no
event will  Landlord  review and approve  preliminary  plans and  specifications
until the POM has been held.

     (b)Tenant  shall  cause  its  architect  and any other  person(s),  such as
interior design  consultants  and electrical  mechanical  engineers  employed by
Tenant in connection  with Tenant's Work,  whom Tenant believes will be involved
in the design of  Tenant's  Work to attend  the PDM.  Landlord  shall  cause the
Manager and any consultant(s) deemed necessary by Landlord to attend the PDM.

     (c)At or prior to the PDM,  Tenant shall deliver to the Manager each of the
following:

     (i) A color board with colon and materials  which Tenant  intends to use as
part of Tenant's Work;

     (II) A  dimension  store  front  elevation  with all colors  called out and
Tenant's  sign  depicted for the  Premises  storefront  or, in the  alternative,
photographs  or artists'  renderings of  storefronts  previously  constructed by
Tenant:

     (iii) Material  samples of the floor covering which Tenant  proposes to use
in the Premises; and

     (iv) Any other samples, photographs or renderings of other Tenant locations
which Tenant  believes will be useful to Landlord in reviewing  and  considering
Tenant's proposed concept for the Premises.

     All materials  submitted by Tenant shall be tagged or otherwise  identified
to Tenant and shall be dated.  Ml such  materials  will be  retained by Landlord
until completion of Tenant's Work.

     (d)At the PDM, the following shall occur

     (i) The Manager shall review  Tenant's  submission  and shall orally advise
Tenant or any items which do not meet the requirements of Exhibit "0."

     (iii)  Landlord  and  Tenant  shall  establish  a design  and  construction
schedule  (in  bar-chart  form) for design and  construction  of Tenant's  Work.
However,  nothing  contained  on such  schedule  shall be deemed or construed to
alter or affect the Rent Commencement Date.

     (iii) Tenant shall designate one individual  employee or agent who shall be
authorized to act on behalf of Tenant with respect to all matters  pertaining to
this lease,  including all matters relative to Tenant's Work. Landlord may treat
any  approval  or consent  given by such  person as the  approval  or consent of
Tenant.  Tenant  may,  by written  notice to  Landlord,  change  its  designated
representative  with  respect to matters  arising  after the date of  Landlord's
receipt of such notice.

     (e)The  PDM  is  not  a  substitute  for  either   preliminary   plans  and
specifications or working  drawings,  and no approvals given at the PDM shall be
construed as relieving Tenant of its  responsibility  to prepare and submit such
items.  Any approvals given at the PDM will be as to concept only. and shall not
relieve Tenant of its obligation to comply with the specific  criteria set forth
in Exhibit "D." Required  attendance at a PDM shall be waived only under special
circumstances and only in a writing signed by Landlord.  PLANS FOR Section 17.03
TENANT'S WORK (a)Promptly  upon completion of the PDM, Tenant,  at Tenant's sole
cost and  expense,  shall cause to be prepared  and  delivered  to Landlord  for
Landlord's  approval  two  (2)  sets of  preliminary  plans  and  specifications
("preliminary  plans") prepared in conformity with the applicable  provisions of
Exhibit  "D" by a  licensed  architect  approved  by  Landlord.  Landlord  shall
promptly notify Tenant of the respects.  if any, in which said preliminary plans
fail to conform to the  applicable  provisions  of Exhibit "D," and Tenant shall
promptly  make any  revisions  necessary  to  correct  such  matters  and obtain
Landlord's  approval.  Landlord's  approval.  which  shall  not be  unreasonably
withheld or delayed,  shall be  evidenced by  Landlord's  causing one (I) set of
such preliminary plans to be initialed on its behalf and returned to Tenant.

PLAN'S FOR TENANT'S WORK

     (b)Promptly after Landlord's approval of the preliminary plans,  Tenant, at
Tenant's  sole cost and expense.  shall cause to be prepared and  delivered  for
Landlord's  approval  four  (4)  sets of  working  drawings  and  specifications
("working  drawings") prepared in conformity with the approved preliminary plans
and with the  applicable  provisions  of  Exhibit  "D" by a  licensed  architect
approved by Landlord.  Landlord shall promptly notify Tenant of the respects, if
any, in which said working drawings fail to conform to the approved  preliminary
plans and/or the applicable provisions of Exhibit "D," and Tenant shall promptly
make any  revisions  necessary  to correct  such  matters and obtain  Landlord's
approval.

     Landlord's approval,  which shall not be unreasonably  withheld or delayed,
shall be evidenced by Landlord's causing one (I) set of such working drawings to
be initialed on its behalf and returned to Tenant.

     (c)After  Landlord's  approval of the working  drawings no change  shall be
made therein except as provided in this subsection (c):

     (i) No change may be made by either party without the prior written consent
of the other (which shall not be unreasonably withheld or delayed); and

     (iii) All architectural services necessitated shall be rendered by Tenant's
architect at the expense of the party requesting the change.

     (d)For purposes of design and approval of Tenant's Work:

     (i) In no event shall Tenant  proceed with working  drawings until Landlord
had approved in all respects Tenant's preliminary plans and specifications.

     (ii) Tenant's  preliminary plans and specifications  shall contain detailed
depictions of all aspects of tenant's Work, and shall be at least as detailed as
the requirements set forth in Exhibit "D" hereto.

     (iii)  Tenant  shall  be  solely  responsible  to  ensure  compliance  with
Divisions 1-4 of title 24 of the California Administrative Code. Accordingly, at
or prior to the date that  Tenant  submits its  working  drawings  to  Landlord,
Tenant  shall  submit to Landlord  (A)  engineered  electrical  drawings for the
Premises  signed by an electrical  engineer  licensed in the State of California
and (B) a complete  set of  calculations  showing  the  electrical  load for the
Premises (upon completion of Tenant's Work) and demonstrating  compliance,  both
as to electrical and mechanical requirements, with Title 24.

     (iv) Landlord's review and approval of materials, plans, specifications and
working drawings  pursuant to this Section shall indicate no more than aesthetic
approval.  Approval by Landlord  shall not relieve  Tenant of its  obligation to
obtain all  approvals  and  permits  from all  governmental  authorities  having
jurisdiction or constitute a warranty that any items approved by Landlord comply
with  applicable law or any  requirements  of  governmental  authorities  having
jurisdiction.

TENANT'S WORK  Section 17.04

     (a)As a material consideration to Landlord for the execution by Landlord of
this lease,  Tenant agrees to construct tenant improvements in the Premises with
quality work using first class materials. Such work of redecorating,  remodeling
and  renovating  ('Tenant's  Work") shall include a new storefront and sign, new
fixtures,  and new wall and floor  coverings.  Landlord  and  Tenant  agree that
Landlord shall, in exercising its approval rights with respect to Tenant's Work.
have the right to insist on a  distinctive,  high quality store using only first
class materials and workmanship and meeting the specific  criteria  as~~forth in
this lease. Moreover,  Landlord's insistence upon production of a higher quality
store  (in  terms  of  design,   materials  and  workmanship)   then  previously
constructed by Tenant,  as a condition to the grant of any approval  required to
be obtained by Tenant from  Landlord,  shall not be deemed to render  Landlord's
approval  or  disapproval  unreasonable.  Subject  to  the  foregoing,  however,
Landlord's  approvals  pursuant  to  Section  17.03  shall  not be  unreasonably
withheld so long as Tenant's Work complies with the applicable  requirements  of
Exhibit "D" and governmental  authorities having  jurisdiction.

     (b)Tenant  shall cause Tenant's Work to be performed by a licensed  general
contractor,  or  contractors,  approved  by  Landlord.  Tenant's  Work  shall be
commenced  promptly after Landlord's  approval of the working drawings therefor.
Tenant  shall  cause  Tenant's  Work to be  completed  in  accordance  with  the
applicable provisions of Exhibit "D" on or before the Rent Commencement Date and
shall open the Premises for business upon such completion,  having  theretofore,
at its sole expense.  completed the  equipping,  decoration  and stocking of the
Premises to the extent necessary to enable it to so open for business.

     (c)Tenant's Work shall be at Tenant's sole cost and expense and there shall
be no allowance or abatement of any kind by Landlord to or for Tenant on account
of Tenant's Work, or the cost thereof.  The provisions of Section 16.16 shall be
specifically  applicable to Tenant's Work, and Tenant shall promptly  furnish to
Landlord  upon  completion of tenant's Work (i) a copy of a Notice of Completion
with respect to Tenant's  Work showing  thereon the  recording  stamp of the Los
Angeles County Recorder;  and (ii) evidence reasonably  satisfactory to Landlord
that  all of  tenant's  Work  has  been  paid in full  and  that no claim of any
mechanic or materialmen may become a lien on the Premises.

     (d)Any additional work of remodeling during the lease term shall be subject
to all of the  provisions of sections 7.03 and 16.16,  this Article XVII and the
applicable provisions of Exhibit "D" hereto,  subject.  however, in each case to
the use of such time  period(s) and date(s)  therefor as shall be agreed upon by
Landlord and Tenant.

     (e)Failure  of tenant to perform its  obligations  pursuant to this Article
XVII in timely  fashion  shall be deemed a default  by Tenant  pursuant  to this
lease  entitling  Landlord  to exercise  all  remedies  available  to a landlord
against a  defaulting  tenant,  including  but not limited to those  provided in
Article XIII.


                                    26

<PAGE>
PAYMENT
PROVISIONS

Section l8.O1

     With respect to Tenant's  Proportion ate Share of taxes under Section 5.0!,
insurance and maintenance  expenses under Section 7.01,  common area costs under
Section 14.05 and, if applicable, Tenants proportionate share of additional rent
items under  Sections  14.04 and 18.06 or elsewhere  in this lease  Landlord may
bill and  collect  for such  items (a) as and when  incurred  by  Landlord,  (b)
periodically in arrears (such as for a month or quarter then ended) or (c) on an
estimated  basis  monthly  e-qmn- in  advance.  If  Landlord  elects to bill and
collect for such items, or any of them,  pursuant to clause (c) above then prior
to the  commencement  of each lease year  Landlord  shall give  Tenant a written
estimate of Tenant's  Proportionate Share of each additional rent item so billed
for the ensuing lease year.  Tenant shall pay such estimated  amount to Landlord
in equal monthly  eeqae-s  installments  as determined by Landlord,  in advance.
Within  ninety (90) days after the end of each such lease year,  Landlord  shall
furnish to Tenant a statement  showing in reasonable  detail the actual Tenant's
Proportionate Share of the costs and expenses incurred by Landlord and billed to
Tenant on an  estimated  basis  during  such lease year,  and the parties  shall
within  thirty  (30) days make any  payment  or  allowance  necessary  to adjust
Tenant's  estimated payment to Tenant's actual  Proportionate  Share as shown by
such annual statement. Any amount due Tenant shall be credited against estimated
installments  next coming  due.  Any amount  payable by Tenant  pursuant to this
lease shall be due and payable within ten (10) days after the date of Landlord's
invoice  therefor  unless a  different  time for  payment  thereof is  elsewhere
provided in this lease.


FOOD
OPERATIONS          Section 18.02

     If Tenant's  permitted use of the Premises pursuant to the applicable Basic
Lease  Provision  includes the sale or preparation  of food,  then the following
provisions shall apply:


     (a) Tenant shall, at its own cost, retain a licensed,  bonded  professional
pest and sanitation  control service to perform  inspections of the Premises not
less  frequently  then once each thirty (30) days for the purpose of controlling
infestation  by  insects,  rodents  and  vermin  and  shall  promptly  cause any
corrective or extermination work recommended by such service to be performed. If
Tenant fails to perform its obligations under this Section 18.02,  Landlord may,
at its  option  and after five (5) days  written  notice to  Tenant,  cause such
inspection to be performed and any necessary  corrective or  extermination  work
which is recommended  to be done and the cost of such  inspection and corrective
or extermination work shall be additional rent.

     (b) Tenant acknowledges that Health Department  requirements and Landlord's
construction  requirements  may  require  that Tenant (i) enlarge the sewer line
from the  Premises  to the main sewer line and (h)  install a grease trap in the
floor drain of the kitchen of the Premises.  Tenant  acknowledges that it shall,
if required and as a pan of Tenant's  Work  pursuant to Section  :7.04,  enlarge
such sewer line and install such grease trap and shall,  during the term of this
lease,  clean and  maintain  such grease trap as a part of Tenant's  obligations
pursuant  to  Section  7.02 in such  manner  as may be  required  by the  Health
Department or other governmental authorities having jurisdiction.

     (c) Failure of Tenant to perform any obligation pursuant to subsections (a)
and/or  (b) above  shall be deemed an event of  default  pursuant  to this lease
entitling  Landlord to exercise all remedies  available to a Landlord  against a
defaulting Tenant, including those provided for in Article XIII.

TERMINATION     Section 18.03

     If this lease is terminated by Landlord  under any  provision  hereof,  and
upon the expiration of the term of this lease  (collectively.  the  "termination
date"), the following shall pertain:

     (a)Tenant shall, within five (5) days after the date of termination, remove
from (he Premises all merchandise, furniture, furnishings. equipment and movable
trade  fixtures and shall  surrender  the Premises to Landlord in the  condition
required by Sections 7.02 and 7.04. Tenant shall, at Tenant's cost, repair any ~
the  Premises  caused by such  removal.  Any items which  Tenant is permitted to
remove but fails to remove  prior to the  surrender  of the Premises to Landlord
shall be deemed  abandoned by Tenant,  and Landlord may retain or dispose of the
same as Landlord  sees fit without  claim by Tenant  thereto or to any  proceeds
thereof.  Tenant  shall  pay all  amounts  payable  by it  through  the  date of
termination,  each of the parties  shall bear their own costs and fees  incurred
(including  all  costs  incurred  in  performing  their  respective  obligations
hereunder)  through the termination date and from and after the termination date
neither party shall have any further  obligations to the other, except for those
obligations set forth in this subsection, in Section 16.16 and in subsection (b)
below.

     (b)Notwithstanding   the  provisions  of  subsection  (a),  upon  any  such
termination or expiration. the following shall pertain:

     (i)Landlord  agrees to defend,  indemnify and hold harmless Tenant from and
against any and all claims, costs, expenses, losses, damages, actions and causes
of action for which Landlord is responsible under this lease and which accrue on
or before the termination date.

     (ii)Tenant agrees to defend,  indemnify and hold harmless Landlord from and
against any and all claims, costs, losses, expenses, damages, actions and causes
of action for which Tenant is  responsible  under this lease and which accrue on
or before the termination date.


                                    27

<PAGE>
     (iii) Tenant shall remain liable for the cost of all  utilities  used in or
at the Premises through the termination date accrued and unpaid,  whether or not
then billed,  as of the  termination  date until full payment thereof by Tenant.
Tenant  shall  attempt to obtain  directly  from the  companies  providing  such
services  closing  statements for all services  rendered through the termination
date and shall  promptly pay the same.  In the event that any utility  statement
with respect to the Premises  includes  charges for a period  partially prior to
and partially subsequent to the termination date, such charges shall be prorated
as between Landlord and Tenant,  with Tenant responsible for the portion thereof
(based upon a fraction whose  numerator is the number of days of service on such
statement through the termination date and whose denominator is the total number
of days of service on such statement)  through the termination date and Landlord
shall be  responsible  for the balance.  The party  receiving any such statement
which  requires  proration  hereunder  shall promptly pay such statement and the
other  party  shall,  within  ten  (10)  days  after  receipt  of a copy of such
statement,  remit to the party  paying the  statement  any amount for which such
other party is responsible hereunder.

     (iv) Tenant shall remain responsible for any taxes of the type described in
Section 5.03 and assessed against the Premises and the personal property located
therein or thereon with a lien date prior to the termination date,  irrespective
of the date of the  billing  therefor,  and shall  indemnify  and hold  Landlord
harmless with respect to any claims for such taxes or resulting from non-payment
thereof.

RELOCATION
OF
TENANT         Section 18.04 See paragraph 24 of Addendum No.1.

     Landlord,  at its sole expense, on at least 90 days prior written notice at
any time during the~term,  may require Tenant to move from the Premises to other
space of comparable  size and  decor'~in  order&9ifi%Y&~  to permit  Landlord to
consolidate  the space leased to Tenant with other  adjoining space leased or to
be leased to another tenant. Provided,  however, that in the event of receipt of
any such notice,  Tenant by written  notice to Landlord may elect not to move to
the other space and in lieu  thereof  terminate  this lease,  effective  60 days
after the date of the original notice of relocation by Landlord. In the event of
any such relocation,  Landlord will pay all expenses of preparing and decorating
the new premises so that they will be substantially  similar to the Premises and
Landlord  will  also pay the  expense  of moving  Tenant's  trade  fixtures  and
equipment to the relocated  premises.  In such event this Lease and each and all
of the terms,  covenants  and  conditions  hereof shall remain in full force and
effect and thereupon be deemed applicable to such new space except that:

     (a)The  applicable  Basic Lease Provisions shall be revised and substituted
to reflect the new premises and any changes in the Minimum Rent, effective as of
the date of  relocation,  resulting  from a difference  in the floor area of the
Premises and such substituted premises.

     (b)Tenant's  Proportionate  Share shall,  as of the date of relocation,  be
adjusted pursuant to the provisions of Section 1.02.

     (c) There shall be no abatement of any rent payable hereunder on account of
tenant's  relocation  or any  inconvenience  or  business  loss caused to Tenant
thereby.

REFURBISH AND
UPGRADE

Section 18.05

     If the  term .of this  lease  shall be  longer  than  five(S)  years,  then
Landlord  may, at any time at or after the  expiration of the fourth (4th) lease
year and  prior to the  commencement  of the next to last  lease  year,  require
Tenant, at Tenant's cost, to renovate and refurbish the Premises as necessary to
maintain the Premises as a first class store.  Such  refurbishment or renovation
shall be as specified by Landlord by written  notice to Tenant,  and may include
new carpeting,  painting,  I' A &I'wm.  All such work by Tenant pursuant to this
Section shall be in accordance  with Section 7.03 and Article XVII of this lease
and Exhibit "D" hereto and shall be  completed  within six (6) months  after the
date of Landlord's notice. Failure of Tenant to perform its obligations pursuant
to this Section shall be a default pursuant to this lease entitling  Landlord to
exercise all  remedies  available  to a landlord  against a  defaulting  tenant,
including  but not  limited  to those  set forth in  ArtideX~I.  As a pan of the
required  refurbishing or renovation under this Section,  Landlord may ~ grade -
[section struck out] originally installed in the Premises by Tenant.


Section 18.06       [section struck out]

LANDLORD:

RREEF USA FUND-II, a California Group Trust

By:   RREEF MANAGEMENT COMPANY, a
      California corporation


Tenant

TOYS INTERNATIONAL,
a California Corporation

                                       29
<PAGE>
[Graphic]
<PAGE>

[Graphic]
<PAGE>
                      LEASE ADDENDUM AGREEMENT~ NO.1



         This Lease  Addendum  Agreement No. 1  (hereinafter  referred to as the
"Agreement")  is entered into as of the Lease Reference Date as set forth in the
Basic  Lease  Provisions  page of the lease  referred  to in  paragraph  A below
(hereinafter  referred  to as the  "Effective  Date") by and  between  RREEF USA
FUND-I!,  a  California  Group  mist  and  TOYS   INTERNATIONAL,   a  California
corporation (hereinafter referred to as the "Tenant") and is made with reference
to the following facts:

     A.  Landlord  and  Tenant  are,  concurrently  with the  execution  of this
Agreement,  entering  into a written lease  agreement as of the  Effective  Date
(hereinafter  referred to as the "Lease"),  of and to those certain  premises in
Los  Angeles,  California,  commonly  known as and located at 10250 Santa Monica
Boulevard,  Building  B, Level 1, Space No. 10 and as  designated,  depicted  or
outlined on Exhibit "A"  attached to the Lease  containing  approximately  3,869
square feet of floor area  (hereinafter  referred to as the  "Premises")  in the
Century City Shopping Center (the "Shopping Center").

     B.  Landlord  and  Tenant  wish to amend and  modify  the Lease in  certain
respects and affirm, ratify and confirm the Lease in all other particulars.

         NOW, THEREFORE, in consideration of the terms, covenants and conditions
of the Lease and this Agreement, and other good and valuable consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereto
agree as follow:

     1. Section  3.01 of the Lease is amended by the  addition of the  following
specifications  of the amount of Minimum Rent that shall be payable by Tenant to
Landlord during the term of this

Lease:

     "The monthly Minimum Rent during the Lease Term shall be as follows:

     "(a) For that part of the Lease  Term from the Lease  Commencement  Date as
specified in the Basic Lease Provisions through December 31, 1990, the monthly t
Minimum Rent shall be the sum


     LEASE  ADDENDUM   AGREEMENT~   NO.1  of  Seven  Thousand  Seven  7  Hundred
Thirty-Eight and 00/100 Dollars ($7,738.00) per month. ( 1/2
<PAGE>
      "(b) For that part of the Lease Term from January 1, 1991 through December
      31, 1991, the monthly  Minimum Rent shall be the sum of Eight Thousand Two
      Hundred Twenty-One and 63/100 Dollars ($8,221.63) per month.

      "(c) For that part of the Lease Term from January 1, 1992 through December
      31,  1992,  the monthly  Minimum  Rent shall be the sum of Eight  Thousand
      Seven Hundred Five and 25/100 Dollars ($8,705.25) per
      month.

      "Cd) For that part of the Lease Term from January 1, 1993 through December
      31, 1993,  the monthly  Minimum Rent shall be the sum of Nine Thousand One
      Hundred Eighty-Eight and 88/100 Dollars ($9,188.88) per month.

      "(e) For that part of the Lease Term from January 1, 1994 through December
      31, 1994,  the monthly  Minimum Rent shall be the sum of Nine Thousand Six
      Hundred Seventy-Two and 50/100 Dollars ($9,672.50) per
      month.

      "(f) For that part of the Lease Term from January 1, 1995 through December
      31,  1995,  the monthly  Minimum Rent shall be the sum of Ten Thousand One
      Hundred Fifty-Six and 13/100 Dollars ($10,156.13) per month.

      "(g) For that part of the Lease Term from January 1, 1996 through December
      31,  1996,  the monthly  Minimum Rent shall be the sum of Ten Thousand Six
      Hundred Thirty-Nine and 75/100 Dollars ($10,639.75) per
      month.

      "(h) For that part of the Lease Term from  January  .1,  1997  through the
      Termination Date as specified in the Basic Lease  Provisions,  the monthly
      Minimum Rent shall be the sum of Eleven Thousand One Hundred  Twenty-Three
      and 38/100 Dollars ($11,123.38) per

                                  2

<PAGE>

      2.  Sections 3.03 of the Lease is amended by the addition of the following
language  relative  to the  breakpoint  for the  purpose of the  computation  of
Percentage Rent:

      "On or before the  fifteenth  (15th) day following  each  calendar  month,
      beginning in the month gross sales for the lease year in- question  exceed
      the  breakpoint set forth below,  in addition to the Minimum Rent,  Tenant
      shall  pay to  Landlord  for each  preceding  calendar  month  or  partial
      calendar  month during the Lease Term, as Percentage  Rent, the percentage
      specified below of Tenant's gross sales (as defined in the Lease) for such
      preceding calendar month or partial month as~t ztwa~ follows:

      "(a) For that part of the Lease Term from the Lease  Commencement  Date as
      specified in the Basic Lease Provisions, Tenant through December.31, 1990,
      Tenant  shall pay to Landlord  for each  calender  month  during said time
      period,  as Percentage  Rent,  without  regard to the Minimum Rent paid by
      Tenant,  six  percent  (6%) of all gross  sales in  excess of One  Hundred
      Twenty-Eight   Thousand  Nine  Hundred   Sixty-Six   and  67/100   Dollars
      ($128,966.67) in each such calendar month.

      "(b) For that part of the Lease Term from January 1, 1991 through December
      31, 1991, Tenant shall pay to Landlord for each calender month during said
      time period,  as Percentage Rent,  without regard to the Minimum Rent paid
      by Tenant,  six  percent  (6%) of all gross sales in excess of One Hundred
      Thirty-seven  Thousand  Twenty-Seven  and 08/100 Dollars  ($137,027.08) in
      each such calendar month.


                                  2

<PAGE>


      "(c) For that part of the Lease Term from January 1, 1992 through December
      31, 1992, Tenant shall pay to Landlord for each calender month during said
      time period,  as Percentage Rent,  without regard to the Minimum Rent paid
      by Tenant,  six  percent  (6%) of all gross sales in excess of One Hundred
      Forty-Five Thousand  Eighty-Seven and 50/100 Dollars ($145,087.50) in each
      such calendar month.

      "(d) For that part of the Lease Term from January 1, 1993 through December
      31, 1993, Tenant shall pay to Landlord for each calender month during said
      time period,  as Percentage Rent,  without regard to the Minimum Rent paid
      by Tenant,  six  percent  (6%) of all gross sales in excess of One Hundred
      Fifty-Three   Thousand  One  Hundred   Forty-Seven   and  92/100   Dollars
      ($153,147.92) in each such calendar month.

      "(e) For that part of the Lease Term from January 1, 1994 through December
      31, 1994, Tenant shall pay to Landlord for each calender month during said
      time period,  as Percentage Rent,  without regard to the Minimum Rent paid
      by Tenant,  six  percent  (6%) of all gross sales in excess of One Hundred
      Sixty-One  Thousand Two Hundred Eight and 33/100 Dollars  ($161,208.33) in
      each such calendar month.

      "(f) For that part of the Lease Term from January 1, 1995 through December
      31, 1995, Tenant shall pay to Landlord for each calender month during said
      time period,  as Percentage Rent,  without regard to the Minimum Rent paid
      by Tenant,  six  percent  (6%) of all gross sales in excess of One Hundred
      Sixty-Nine   Thousand   Two  Hundred   Sixty-Eight   and  75/100   Dollars
      ($169,268.75) in each such calendar month.

      "(g) For that part of the Lease Term from January 1, 1996 through December
      31, 1996, Tenant shall pay to Landlord for each calender month during said
      time

                                  3

<PAGE>



      period,  as Percentage  Rent,  without  regard to the Minimum Rent paid by
      Tenant,  six  percent  (6%) of all gross  sales in  excess of One  Hundred
      Seventy-Seven  Thousand  Three  Hundred  Twenty-Nine  and  17/100  Dollars
      ($177,329.17) in each such calendar month.
                                                                               4

     "(h) For that part of the Lease Term from January 1, 1997 through the Lease
Termination  Date as specified or determined  pursuant to the  applicable  Basic
Lease  Provisions,  Tenant shall pay to Landlord for each calender  month during
said time period, as Percentage Rent, without reg~rd to the Minimum Rent paid by
Tenant, six percent (6%) of all gross sales in excess of One Hundred Eighty-Five
Thousand Three Hundred Eighty-Nine and 58/100 Dollars ($185,389.58) in each such
calendar  month."  *Insert  Rider Page 3-A 3. It is  understood  and agreed that
notwithstanding  the  modification  of Tenant's  obligation  with respect to the
payment  of  Minimum  Annual  Rent  as  set  forth  in  paragraph  1  above  and
notwithstanding  the  modification  of Tenant's  obligation  with respect to the
payment of  Percentage  Rent as set forth in paragraph 2 above,  Tenant shall be
obligated to fully  perform all  covenants as specified in the Lease,  including
without


                                  3

<PAGE>



                                          4.

           For the  purpose of  computing  the  Percentage  Rent for the partial
calendar year in which the term of this Lease  commences,  if any,  Tenant shall
pay, in addition to the Minimum Pent, a sum  equivalent to the product  obtained
by  multiplying  (a) the amount by which six percent (6%) of the gross sales for
the "Hypothetical Year" (hereinafter defined),  exceeds the Minimum Rent paid by
Tenant for such  Hypothetical  Year,  by (b) a fraction,  the numerator of which
shall be the number of days in the partial calendar year, and the denominator of
which shall be the number of days in the  Hypothetical  Year. The  "Hypothetical
Year" shall be the period from the Rent  Commencement Date until the last day of
the calendar  month in the  succeeding  year during which the Term of this Lease
shall  have  commenced,  unless the Term  shall  commence  on the first day of a
calendar month, in which case the Hypothetical  Year shall end in the succeeding
year on the day next preceding the commencement of the Term. Tenant shall submit
a statement of annual gross sales to Landlord for the  Hypothetical  Year within
60 days after the expiration thereof, together with its remittance of Percentage
Rent, if any, for the partial calendar year.




                           RIDER PACE 3-A

<PAGE>



limitation, the obligation to pay~common area charges,  insurance, taxes and all
other  additional  rent and shall be  required  to pay in full any and all other
monies  required  to be paid  pursuant  to the  Lease  commencing  with the Rent
Commencement Date as specified in or determined pursuant to the applicable Basic
Lease Provisions.

      4. It is  understood  and  agreed  that the Lease and this  Agreement  are
specifically  contingent  upon  the  concurrent  execution  of  the  Termination
Agreement,  terminating  that certain Lease Agreement dated June 4, 1979 and any
and all other amendments connected thereto, by and between century City, Inc., a
Delaware  corporation,  Landlord's  predecessor  in interest  and Tenant.  It is
further  understood and agreed that if the  Termination  Agreement  described in
this paragraph 4 is not executed concurrently with the Lease and this Agreement,
then the Lease and this Agreement shall be null, void and of no further force or
effect and Landlord and Tenant shall be released from the  performance  of their
obligation under the


<PAGE>



Lease and this Agreement.

      5.   Section 3.03  (c)  of the Lease  is amended by the
addition of a new subsection 3.03 (c)(iv), as follows:

      "(iv)     For the purpose of determining Percentage
      Rent payable hereunder, the following may be excluded
      from gross sales:

                (a)Sales subject to employee discounts,  only to the extent that
           the same do not exceed one (1%)  percent of gross  sales in any lease
           year; and

                (b)Uncollected or uncollectible  debts arising from sales at the
           Premises,  only to the  extent  that the same do not  exceed one (1%)
           percent of gross sales in any lease year,  and  provided  that if any
           such uncollected or uncollectible  debts are subsequently  collected,
           the amounts thereof shall be included in Tenant's gross sales.

      6.   Section 4.03(c)  is amended by the addition of the
following language thereto:

     "In the event  that  Tenant  disputes  the  results  of such audit and such
dispute  cannot be resolved by the parties,  then Landlord and Tenant shall each
appoint a certified public accountant,  and each such appointed certified public
accountant  shall select a mutually  satisfactory  independent  certified public
accountant to perform a second audit, the results of which shall be binding upon
both  Landlord  and Tenant.  If such audit  confirms the results of the original
audit,  then Tenant shall pay to Landlord the cost of such audit.  If,  however,
such audit  discloses a  deficiency  of less than two percent  (2%) of the Gross
Sales  theretofore  computed  and paid by Tenant for the period  covered by such
audit, then Landlord and Tenant shall equally divide the costs of this audit."

     7. Section 6.02 of the Lease and item no. 6 of Exhibit "C"

     "Rules and Regulations" are hereby amended by the addition of the following
language:

      "Landlord  acknowledges  that, at the date of execution  hereof,  Tenant's
      permitted use as specified in the Basic Lease Provisions does not create a
      nuisance or disturb other tenants' of the Shopping Center or invalidate or
      cause an increase in any property damage or liability insurance maintained
      on the Premises, the building in which located or the Shopping Center."

     8.  Section  6.03 of the Lease is hereby  amended  by the  addition  of the
following language thereto:

      "Notwithstanding  the foregoing,  it is agreed that the radius restriction
      herein  described  shall only apply to the  location  currently  known as,
      Beverly  center at Beverly  Blvd.,  and La Cienega  Blvd.,  and within the
      boundaries of the city of Beverly Hills.. It is

                                  5

<PAGE>



      further agreed that the radius  restriction  shall exclude  Tenant's other
      retail store  concept  operated as "TUTTI  ANIMALE" and a competing  store
      owned by an entitiy which aquires Tenant."

      9.   Section 7.01 of the Lease is hereby amended by the
addition of the following language:

      "Landlord  shall use  reasonable  efforts to conduct its activities in the
      Premises  in a manner  which  will  not  unreasonably  interfere  with the
      operation of Tenant's business.

      "Except  where  Landlord's  activities  or repairs are made  necessary  by
      Tenant's  failure to make necessary  repairs or by Tenant's  breach of the
      Lease  in some  other  respect,  Landlord  shall  be  required  to  employ
      reasonable  measures in its  performance of such  activities or repairs to
      minimize  the  disturbance  of  Tenant's   business   occasioned  by  such
      activities or repairs.

      "Landlord, its agents, contractors,  servants and employees, may enter the
      Premises for the purposes  stated  therein only during  business hours and
      upon  reasonable  advance  notice  to  Tenant  except  in the  event of an
      emergency,  in which case  Landlord may enter the Premises at any time and
      without advance notice Tenant.

     "Subject  to  Section  7.02 of this  Article  VII,  Landlord's  maintenance
obligations  shall also  include the  structural  components  of the building in
which the Premises are located,  common utility pipes and conduits in the common
areas servicing the building, excluding any utility pipes and conduits servicing
the Premises exclusively or any maintenance required by the negligence of Tenant
or a breach by Tenant in its obligations under this Lease."


                                  5

<PAGE>


     10.  Section  7.02(b) of the Lease is hereby amended by the addition of the
following language:

     "Notwithstanding  anything to the contrary  contained in this Section 7.02,
with respect to repairs or replacements (other than emergency repairs) which are
not capable of being  commenced or completed  within ten (10) days after written
demand by Landlord, Tenant shall be deemed to have complied with its obligations
provided  Tenant (i) as soon as  practicable  upon receipt of Landlord's  demand
and,  in any  event,  not more than ten (10) days  thereafter,  communicates  in
writing to  Landlord  the  reasons why such  repairs or  replacements  cannot be
commenced  or  completed  within  such ten (10) day  period,  and (ii)  promptly
commences  such repairs or  replacements  as soon as is reasonable and practical
under  the   circumstances,   and  (iii)  diligently  and  continuously   (using
extraordinary  measures if required)  prosecutes such repairs or replacements to
completion."

     11.  Article VII of the Lease is amended by the addition of new  subsection
7.03(c), as follows:

     Notwithstanding  anything to the contrary  contained in this section  7.03,
Tenant shall have the right,  without Landlord's prior written consent,  to make
nonstructural  interior  oalterations to the Premises which require expenditures
of less than. $10,000.00 in any calendar year; provided,  however, that any such
alterations  must be in compliance  with all  requirements  of the provisions of
Article XVII and Exhibit "0" of the Lease and all applicable  governmental rules
and  regulations;  and  further  provided  that (i) the  design  concept  of the
Premises  is not  changed  and  (ii)  such  alterations  are  not in  excess  of
$10,000.00  per  calendar  year  and do  not  involve  (a)  any  changes  to the
electrical  and/or  mechanical  loads of the  Premises or (b) any changes to the
electrical  and/or  mechanical  systems of the shopping  center.  Any structural
modifications,  any exterior modifications,  any change of the design concept of
the Premises,  any changes to the electrical or mechanical loads of the Premises
or the systems of the shopping center, or any alterations which are in excess of
$10,000.00  in any calendar year shall  require  Landlord's  consent as provided
herein." A

     12.  section  8.05 of the Lease is hereby  amended by the  addition  of the
following language:

     "It is hereby  understood  and agreed that ~ waiver of right of recovery as
described  in this  Section  8.05 against any tenant or occupants or other third
parties  of the  Shopping  center  shall  only  apply if such  other  tenant  or
occupants  or other third  parties'  policies of  insurance  provide the same or
similar mutual waiver of Subrogation in favor of Tenant.

     "Excluding those items covered under the policies of insurance  required to
be carried pursuant to Section 8.01(b), it is further understood and agreed that
in the event of an  occurrence  of  casualty  resulting  from  Landlord's  gross
negligence  or willful  misconduct,  Tenant  shall not be  required to waive its
rights of recovery as required under this Section 8.05."


                                6

<PAGE>


     13.  Section  8.06 of the Lease is hereby  amended by the  addition  of the
following language:

     "To the fullest  extent  permitted by law and except as otherwise  provided
herein,  Landlord  shall  indemnify and hold Tenant  harmless from all expenses,
losses,  claims, suits, actions,  damages and liabilities,  including reasonable
attorneys'  fees  arising  from  the  breach  or  default  by  Landlord  in  its
obligations  pursuant to the Lease or the  negligence  or willful  misconduct of
Landlord's agents." *

     14.  Section  9.05(a) of the Lease is hereby amended by the addition of the
following language:

     "It is hereby  understood  and agreed  that,  in the event the  building in
which the  Premises  are  located is damaged and  destroyed,  and if such damage
cannot  reasonably  be repaired  within one (1) year of the  occurrence  of such
casualty, than this Lease shall at either Landlord or Tenant's option, terminate
upon written  notice to either  party within  thirty (30) days after the date of
the occurrence of such casualty. Landlord's right of termination herein granted,
shall be nondiscriminatorily enforced."



                                7

<PAGE>


     15.  Article  X of the  Lease is  hereby  amended  by the  addition  of new
subsections 10.01(g), (h), o(i), (j) and (k) as follows:

     "(g)  Notwithstanding  anything to the contrary provided in this Article X,
Tenant may assign this Lease without  Landlord's prior written  consent,  if the
proposed  assignee  shall  continue  to  operate  the same  business  as is then
operated at the Premises under the trade name 'TOYS INTERNATIONAL' or such other
name as Tenant may use in the conduct of Tenant's  business at the  Premises and
all of the following criteria are satisfied.

     "The proposed  assignee is a corporation or entity which has a net worth of
at least One Million Dollars ($1,000,000.00); and

     or "(A) the proposed  assignee is a subsidiary of affiliate of Tenant,  and
such subsidiary or affiliate is a corporation in which Tenant owns a controlling
interest; or

Tenant; or

     "(B) the proposed assignee is the parent of


     "(C) the  majority of the stock of such  proposed  assignee is owned by the
owner of the majority of stock of Tenant; or

     "(D)  the  proposed  assignee  shall  own all or  substantially  all of the
capital  stock of Tenant  or  Tenant's  parent  corporation  as the  result of a
consolidation or merger of Tenant and/or Tenant's parent corporation; or

     "(E) the proposed  assignee is the purchaser of all or substantially all of
the assets of Tenant; or A .


                                7

<PAGE>


     "(F) the  proposed  assignee  shall own all the  stores and  businesses  of
Tenant or Tenant's  parent  corporation  including the business  operated at the
Premises.

     "(h) If any  assignment of this Lease is made  pursuant to  subsection  (g)
above, Tenant shall give Landlord written notice at least ten (10) days prior to
any such  assignment,  and shall advise  Landlord as to the reason and basis for
such  assignment.  Should Tenant fail to provide the notice required to be given
by  tenant  herein,  then  any  purported  assignment  which  was  made  without
Landlord's  prior  written  consent  shall  be  null,  void  and  of  no  effect
whatsoever.

     "(i) It is  understood  and  agreed  that  any  assignment  of  this  Lease
permitted by Article x shall be null, void and of no effect  whatsoever  unless,
at the time of such assignment or at the time Tenant provides  Landlord with the
notice  required to be given  pursuant to  subsection  (h) above,  such assignee
assumes all of the obligations of Tenant under the Lease.

     "(j) It is understood and agreed that any assignment of this Lease pursuant
to  subsection  10.01(g)  above shall not release  Tenant from its covenants and
obligations under the Lease.

     "(k) It is  understood  and agreed that  notwithstanding  any  provision of
Section  10.01 to the  contrary,  Tenant  shall not be  permitted to assign this
Lease or sublease the Premises  during any time in which Tenant is in default of
any of

                                8

<PAGE>


     Tenant's   obligations  under  the  Lease,  unless  the  default  is  cured
concurrently with such assignment." A


     16.  Section  10.03 of the Lease is hereby  amended by the  addition of the
following language:

     "Provided  however,  in the event such  proposed  assignee  has a net worth
greater  than that of Tenants  and Tenant has  provided  Landlord  with  audited
financial  statements  certifying  the same,  Tenant shall be released  from all
future liability under this Lease."


                                8

<PAGE>


     17.  Section 12.03 of the Lease is amended by the addition of the following
language:

     "Provided however, if such interruption is caused by Landlord or Landlord's
employees',  agents and representatives' gross negligence or willful misconduct,
then in such  event,  if the  utility  services  are  disrupted  for  more  than
forty-eight (48) hours after Tenant's written notice to Landlord  regarding such
disruption and Tenant is not able to open for business, Tenant shall be entitled
to an abatement of Minimum Rent and Additional  Rent. Such abatement shall begin
on the second  business day  following  such notice of  interruption  of utility
services  and continue up to and until Tenant is able to open any portion of the
Premises for business."

     18. Sections  14.01,  14.03(b) and 14.03(c) of the Lease are hereby amended
by the addition of the following language:

     "Landlord  agrees that no change or addition to the Shopping  Center or the
Common Area made pursuant to the terms of the Lease shall,  oexcept  temporarily
during  construction,  (i)  reduce  parking  available  to  Tenant  or  Tenant's
customers  below the  requirements  of the city in which the shopping  Center is
located;  (ii) materially and  substantially  interfere with Tenant's ability to
operate  from the Premises or (iii)  materially  impair  customer  access to the
Premises.  Any such change or addition shall be made in a manner consistent with
first-class shopping centers and reasonable steps shall be taken to minimize any
adverse impact upon the Premises occasioned by such change or addition."

     19. Section 15.05 of the Lease is deleted in its entirety and the following
shall be inserted in lieu thereof:

     "(a) In  consideration  for Landlord having agreed to delete Section 15.05,
concerning advertising  expenditures,  from the Lease, Tenant agrees that Tenant
shall  participate  in a  minimum  of three  (3)  advertisements,  cooperatively
sponsored  by the  Association  (as  defined in Section  16.15 of the Lease) per
lease year.  Provided however, in no event shall the total cost of the three (3)
advertisements  per  lease  year  exceed a sum  equal  to one half  (1/2) of one
percent of Tenant's annual gross sales,

                                9

<PAGE>


     nor shall  Tenant  spend  less than  $4,500 per lease year on the three (3)
advertisements.

     (b) Tenant's failure to so participate shall~result~in Section 15.05 of the
Lease being reinserted and the obligations  stated therein of Tenant reinserted.
It is understood and agreed that the deletion of Section 15.05 from the Lease is
personal to Tenant and any  assignment of this Lease or sublease of the Premises
or any other  transfer  of Tenant's  rights and  obligations  hereunder,  except
pursuant to Section  10.01(g),  shall void the  deletion of Section  15.05 shall
result in a reinsertion of Section 15.05 and a reinstatement  of the obligations
stated therein."


     20. Section 16.01(c) of the Lease is hereby deleted in its entirety and the
following shall be inserted in lieu thereof:

     "Failure of Tenant to execute any  statements or  instruments  necessary or
desirable to  effectuate  the foregoing  provisions of this Article XVI,  within
twenty (20) days after written request so to do by Landlord,  shall constitute a
breach of this Lease. In the event of such failure, Landlord, in addition to any
other  rights or remedies  it might have,  shall have the right by not less than
twenty (20) days' notice to Tenant to declare this Lease terminated and the term
ended, in which event this lease shall cease and terminate on the date specified
in such  notice  with the same  force and effect as though the date set forth in
such  notice  were the date  originally  set  forth  herein  and  fixed  for the
expiration of the term; upon such termination  Tenant shall vacate and surrender
the Premises,  but shall remain liable for all  obligations  arising  during the
original stated term as provided in this lease by reason of said breach." a


                                9

<PAGE>


     21. Section  16.15(b)(iii)(B)  of the Lease is hereby amended by inserting,
where a single asterisk appears on page 22 of the Lease, the following:

     "The adjustment, if any, shall be calculated upon the basis of the Consumer
Price  Index of Urban Wage  Earners * and  Clerical  Workers  (Revised  Series),
Subgroup 'all items',  entitled  'Consumer Price Index of Urban Wage Earners and
Clerical  Workers  (Revised  Series),  Los   Angeles-Anaheim-Riverside   Average
(1982-84=100)' (the 'Index') or any successor  substitute index published by the
Bureau of Labor Statistics,  or successor or similar governmental agency, as may
then be in existence and as shall most nearly be equivalent  thereto.  The Index
published  as of the month  prior to the month in which  Tenant is  required  to
commence its  contributions to the Fund shall be considered the 'Base Index' and
annual  adjustments  shall  utilize the Index  published  as of December of each
lease year as the 'comparison  Index'.  Tenant's  contribution for each lease or
partial  lease year shall  utilize  the Index  published  as of December of each
lease year as the 'Comparison Index'.  Tenant's contribution for each lease year
or partial lease year shall be adjusted by the percentage  increase or decrease,
if any,  in the Index  published  for the  relevant  Comparison  Index  over the
relevant Base Index. when the new amount of Tenant's contribution to the Fund is
determined,  Landlord shall give Tenant written notice to that effect indicating
how the new  contribution  figure was  computed.  If the new amount of  Tenant's
contribution  shall not have been determined as of any adjustment  date,  Tenant
shall  continue to pay  Tenant's  contribution  at the last rate in effect until
receipt of Landlord's determination. Within ten (10) days after Tenant's receipt
of Landlord's  determination of Tenant's new  contribution,  Tenant shall pay to
Landlord an amount equal to the new contribution times the number of months from
the relevant adjustment date through the date of Landlord's notice, less the sum
which Tenant has  previously  paid on account of Tenant's  contribution  for the
same period. Thereafter,  Tenant shall, until the next determination pursuant to
this Section  16.15(b)(iii)(B),  pay Tenant's contribution at the rate set forth
in Landlord's  notice.  Failure of Landlord to make the adjustment  provided for
herein for any lease year or partial lease year shall not prevent  Landlord from
including  the  adjustment  for such  lease  year or  partial  lease  year in an
adjustment pursuant to this Section 16.15(b)(iii)(B) for a subsequent lease year
or partial lease year."

     22.  Section  16.21 of the Lease is hereby  amended by the  addition of the
following language:

     "Controlling  over any contrary  provisions  of Section  16.21,  Landlord's
maintenance  obligations  shall also include the  structural  components  of the
building in which the Premises are located, common utility pipes and conduits in
the common  areas  servicing  the  building,  excluding  any  utility  pipes and
conduits servicing the Premises  exclusively or any maintenance  required by the
negligence of Tenant or a breach by Tenant in its obligations under this Lease."


                               10

<PAGE>

     23.  Section  16.30 of the Lease is hereby  amended by the  addition of the
following language:

     "Tenant  hereby  reserves unto itself the right at anytime up to six months
of receipt of Landlord's  annual statement  pursuant to section 18.01 hereof, to
object to any  statement or invoice for charges  that were billed  monthly on an
estimated basis during the preceding Lease Year."

     24.  Section  18.04 of the Lease is hereby  amended by the  addition of the
following language:

     "Controlling  over any contrary  provisions of Section  18.04,  in no event
shall any such relocation  occur during the period from October 1 to January 15,
inclusive, of any calender year.

     "Controlling over any contrary provision of section 18.04,  Landlord agrees
that~it shall pay all reasonable costs and expenses  directly incurred by Tenant
in the  relocation of Tenant's  business,  provided that such costs and expenses
have been approved by Landlord in advance.  In addition to the foregoing,  in no
event shall there be a cessation of Tenant's business for more than two (2) days
a result of the relocation."  25. (a) Tenant agrees that Tenant,  its agents and
contractors,  shall not use,  manufacture,  store or  dispose  of any  flammable
explosives,  radioactive materials,  hazardous wastes or materials, toxic wastes
or materials, or other similar substances  (collectively  "Hazardous Materials")
on, under or about the Premises,  provided that Tenant may handle, store, use or
dispose of products  containing small quantities of Hazardous  Materials,  which
products  are of a type  customarily  found in offices and  households  (such as
aerosol cans containing  insecticides,  toner for copiers, paints, paint remover
and the like), provided further that Tenant shall handle, store, use and dispose
of any such Hazardous  Materials in a safe and lawful manner and shall not allow
such Hazardous Materials to contaminate the Premises or the environment.

     (b) In  accordance  with the  California  Health and Safety  Code,  Section
25359.7(b),  if Tenant has knowledge,  or has reasonable cause to believe,  that
any Hazardous Materials have come to be located on, under or about the Premises,
Tenant  shall,  give written  notice of that  condition to Landlord.  Failure of
Tenant to provide  written  notice to Landlord as herein defined shall make this
Agreement and the Lease voidable at the

                        11


<PAGE>

     discretion  of  Landlord.  If Tenant has  knowledge  of the presence of any
Hazardous  Materials  located on, under or about the Premises and  knowingly and
willfully  fails to provide  written  notice to Landlord  when  herein  defined,
Tenant  is  liable  for a civil  penalty  not to exceed  Five  Thousand  Dollars
($5,000.00) for each separate violation.

     (c) If Landlord  believes that the Premises or the environment  have become
contaminated  with  Hazardous  Materials,  in breach of the  provisions  of this
Agreement and the Lease,  then  Landlord,  in addition to its other rights under
this  Agreement  and the Lease,  may enter upon the Premises and obtain  samples
from the Premises,  including the soil and groundwater  under the Premises,  for
the purposes of analyzing  the same to determine  whether and to what extent the
Premises or the  environment  have become so  contaminated.  Landlord shall give
Tenant reasonable  advance notice of any such entry,  provided that in the event
of an  "emergency",  as defined below,  Landlord may enter the Premises  without
notice and shall have the right to use any and all means that  Landlord may deem
proper to obtain entry to any portion of the Premises. Landlord shall repair any
damage  occasioned to Tenant's  storefront  resulting from Landlord's  emergency
entry.  Provided however, in the event it is determined that Hazardous Materials
were placed in, on, or about the Premises by Tenant,  Landlord's  obligation  to
repair  shall  not  apply.  For  the  purposes  of  this  subparagraph  (c),  an
"emergency"  shall  mean~tflb~  presence of any Hazardous  Materials which could
constitute a violation of any applicable  laws,  regulations or  requirements or
could  pose a health  or safety  hazard  to  occupants  of the  Premises  or the
Shopping Center, as determined by Landlord in its sole discretion.  In the event
it is  determined  that  Hazardous  Materials  were  place  in,  on or about the
Premises by Tenant in breach of the  provisions of this Agreement and the Lease,
Landlord  shall  promptly  notify Tenant in writing  thereof,  and Tenant shall,
without limiting  Tenant's other  obligations under this Agreement and the Lease
(including but not limited to the


                        12

<PAGE>
     duty to indemnify Landlord as provided in subparagraph (d) below, reimburse
Landlord for the  reasonable  costs of such  inspection,  sampling and analysis.
Except in the event of any emergency,  Landlord agrees to use reasonable efforts
to minimize any  interference  with  Tenant's use and enjoyment of the Premises.
caused by any entry under this subparagraph (c). The exercise by Landlord of the
foregoing  rights shall not be deemed a constructive  eviction of Tenant,  shall
not  result in any  liability  of  Landlord  to Tenant  (subject  to  Landlord's
covenant to use reasonable  efforts to minimize  interference  with Tenant's use
and enjoyment of the Premises as provided  above),  and shall not entitle Tenant
to any abatement or other reduction in Minimum Rent or other sums due hereunder.

     (d) Without  limiting the above,  Tenant shall  indemnify and hold harmless
Landlord  from and  against any and all claims,  losses,  liabilities,  damages,
costs and expenses,  including  without  limitation,  attorneys'  fees and costs
arising out of or in any way  connected  with the use,  manufacture,  storage or
disposal of Hazardous  Materials by Tenant,  its agents or contractors on, under
or about the Premises including, without limitation, the cost of any required or
necessary repair,  cleanup or detoxification  and the preparation of any closure
or other required  plans in connection  herewith.  The indemnity  obligations of
Tenant' under this paragraph 25 of this Agreement  shall survive any termination
of this Agreement and/or the Lease.

     (e) Landlord agrees that during the term of this Lease neither Landlord nor
its agents or contractors shall use, manufacture, store, transport or dispose of
any Hazardous  Materials on, under, or about the Premises,  except for Hazardous
Materials that are of a type customarily  found or used in households,  shopping
centers or offices or found or used in construction  Without limiting the above,
but  subject  to  subparagraph  (f) below,  Landlord  shall  indemnify  and hold
harmless  Tenant  from and  against  any and all  claims,  losses,  liabilities,
damages, costs, and expenses, including without


                                       13

<PAGE>
     limitation,  reasonable attorney's. fees and costs, arising out of the use,
manufacture,  storage,  transportation  or disposal of  Hazardous  Materials  by
Landlord,  its agents or contractors on, under, or about the Premises including,
without limitation,  the cost of any repair, cleanup, or detoxification required
by any governmental authority having jurisdiction.  The indemnity obligations of
Landlord  under this  paragraph  25(e)  shall  survive any  termination  of this
Agreement and/or the Lease.

     (f) In the  event  Tenant  is  forced  to  close to the  public  due to the
required  cleanup  or removal  of  Hazardous  Materials  for which  Landlord  is
responsible  under  subparagraph  (e) above,  from  either the  Premises  or the
Shopping  Center,  the  Minimum  Rent and all  items of  additional  rent  shall
abate~from  the date  Tenant is forced to close until the date Tenant can safely
and lawfully reopen.  Notwithstanding  anything to the contrary herein, Landlord
shall not be responsible  for, and Tenant on behalf of itself and its successors
and assigns,  fully and  unconditionally  waives its rights to recover from, and
releases,   Landlord   and   its   officers,   directors,    trustees,   agents,
representatives  and contractors,  and their respective  assigns and successors,
from any and all  consequential  losses and damages including but not limited to
loss of or interference with use of the Property or loss of profits, incurred by
Tenant or its  successors  or assigns,  arising  out of any  repair,  cleanup or
removal of the Hazardous Materials.

     26.  Section  9.05(a)  of the  Lease is  amended  by adding  the  following
language relative to Tenant's  obligation to pay additional rent in the event of
damage or destruction to the Premises:

     "Notwithstanding  the  foregoing,  it is  agreed  that  in the  event  that
Landlord has insurance  coverage for the payment of additional rent and receives
proceeds from such insurance  specifically  for additional  rent,  then, in such
event,  Tenant's  payment of additional rent may abate in an amount equal to the
proceeds received by Landlord from Landlord's insurance carrier specifically for
additional  rent in  proportion  to the  degree  to  which  Tenant's  use of the
Premises is impaired and such  abatement  shall  continue for the period  during
which  such  damage,  repair  or  restoration  continues.  Tenant  shall  remain
obligated to pay the

                                       14


<PAGE>
     amount of  additional  rent in excess of that  received  by  Landlord  from
Landlord's  insurance carrier specifically for additional rent. when such period
of damage, repair or restoration  terminates,  such abatement of additional rent
shall also  terminate  and Tenant shall be obligated to pay the entire amount of
Tenant's  additional rent as if such abatement had not occurred  commencing with
the month immediately  subsequent to the month in which said period  terminates.
Should  Landlord  not  have any  such  insurance  coverage  for the  payment  of
additional  rent or should Landlord not receive any proceeds from such insurance
specifically  for such additional  rent, then there shall be no abatement of any
additional  rent  payable  under  this Lease and Tenant  shall  continue  to pay
Landlord's  additional rent during such period of damage, repair or restoration.
In no event shall there be any abatement of  Percentage  Rent payable under this
Lease."

     27.  Section  16.17 of the Lease is hereby  amended by  inserting,  where a
single asterisk appears on page 23 of the Lease, the following:

     "Provided  however,  so long as Tenant is not in default,  this Lease shall
only be  subordinate  of any holder of any ground  lease or  mortgage or deed of
trust if such party agrees Tenant's  possession of the Premises under this Lease
shall not be disturbed."

     28. Tenant  acknowledges  that as an inducement  for Landlord to enter into
the Lease and this  Agreement,  Tenant  has  agreed  at  Tenant's  sole cost and
expense,  to perform a complete  interior and  exterior  remodel of the Premises
which shall be limited to those items set forth in Exhibit "D-2" attached hereto
(hereinafter  "Remodel  Work").  It is  understood  and agreed that Tenant shall
complete  the all of the Remodel Work in the Premises on or before May 15, 1990.
It is further  understood and agreed that in the event that Tenant shall fail to
complete the Remodel Work as specified in and in accordance  with Exhibit "D-2",
thP. s Agreement and all other  applicable  provisions of this the Lease, in the
Premises on or before June 15 1990,  then,  in such event,  Tenant  shall pay to
Landlord,  as  additional  rent,  a sum equal to Two Hundred and 00/100  Dollars
($200.00) per day for each day  subsequent to June 15, 1990 that Tenant fails to
complete the Remodel Work.

     29. All of the terms,  covenants  and  conditions  of the Lease,  except as
specifically modified herein, shall remain in full force and effect.

12/7/89


                                       15

<PAGE>



     IN WITNESS WHEREOF,  this Agreement has been entered into by the parties as
of the day and year first above written.

                                    Landlord:

                BREEF USA FUND-Il, a
                California Group Trust

                By:RREEF MANAGEMENT COMPANY,
                                        a
                   California corporation

By:
Lynd&L. Bundrock
Vice President~ Director
of
Leasing Regional Shopping
Center
Dated: /2/wa,


By:
Thomas F. Hefse, General
Manager

Dated:


TENANT:
I
TOYS INTERNATIONAL, a
Ca1ifornia corporation


By:1/2/WWay%& Gayle Hoepner,

16




President



Dated: 1/2 3/44 1/4 -25, /9&~,


12/7/89


                        16

<PAGE>

                              TERMINATION AGREEMENT



     This  Termination  Agreement  (hereinafter  the  "Agreement") is made as of
__________,  1989 (the  "Effective  Date") by and between  RREEF USA FUND-Il,  a
California group trust  (hereinafter the "Landlord") and TOYS  INTERNATIONAL,  a
California corporation  (hereinafter the "Tenant") and is made with reference to
the following facts:

        A. On or about June 4, 1979 Landlord's predecessor in interest,  Century
City,  Inc., a Delaware  corporation as owner of those certain premises known as
and described approximately 3,825 square feet of floor area, consisting of Store
No. 10 in Building B in the Century City Shopping Center, located at 10250 Santa
Monica Boulevard, Los Angeles,  California (the "Shopping Center"), entered into
a written lease  agreement with Tenant  pursuant to the terms of a written lease
agreement dated June 4, 1979 as amended by that certain  (undated)  Statement as
To Lease Term (hereinafter collectively the "Lease") for a term of approximately
ten (10) years commencing on April 4, 1980 and terminating April 30, 1990.

        B.  Concurrently  with the  execution  of this  Agreement,  Landlord and
Tenant are entering into a written lease agreement  whereby  Landlord has leased
to  Tenant  the  premises  described  in  paragraph  A  above  (hereinafter  the
"Premises"),  for a term of  approximately  eight (8) years,  commencing  on the
Effective  Date and  terminating  on  January  31,  1998  (hereinafter  the "New
Lease").

        WHEREFORE,  in  consideration  of  the  foregoing,  the  parties  hereto
covenant and agree as follows:

     1. It is  understood  and agreed that the Lease shall be  terminated  as of
September 1, 1989 (hereinafter the "Termination Date").

     2.  Concurrently  upon  execution of this Agreement by Landlord and Tenant,
Landlord and Tenant shall execute and enter into the New Lease.


<PAGE>
     3. The Lease shall be  terminated as of the  Termination  Date and Landlord
and  Tenant  shall  be  released  from  the  performance  of any  of the  terms,
conditions  and  obligations  of the Lease  subsequent to the  Termination  Date
except as hereinafter set forth.  During the remaining term of the Lease through
and  including  the  Effective  Date,  Tenant  shall remain fully liable for the
performance  of all of the  terms  and  conditions  of  the  Lease  through  and
including the Termination  Date and each of the parties hereto shall perform all
of their respective obligations and duties under the Lease through and including
the Termination Date.

     4. The parties  hereto  agree that,  pursuant to Lease,  certain  sums will
accrue  and  become  due and  owing  to  Landlord  from  Tenant  through  to the
Termination Date,  including,  without limitation,  amounts representing monthly
rent,  percentage rent and additional  rent.  Tenant agrees to pay all such sums
when due under the Lease  through the  Termination  Date. As to any such amounts
that have not been  computed  or billed  to Tenant as of the  Termination  Date,
Landlord agrees that as soon as reasonably practical after the Termination Date,
Landlord shall send Tenant a statement for such charges, and that said sum shall
be pro rated for the period through the  Termination  Date. It is understood and
agreed that Tenant shall pay  Landlord an amount  equal to such  charges  within
fifteen (15) days after receipt of said statement.

     5. It is agreed that Landlord shall within ten (10) days of the Termination
Date hereof,  return to Tenant in accordance with Section 18.06 of the Lease the
Three  Thousand  Eight Hundred and 00/100 Dollar  ($3,800.00)  Security  Deposit
Landlord is holding on Tenant's behalf.

     6. Except as specifically set forth herein,  Tenant represents and warrants
that (i) there are no monies  which are or will be at the  Termination  Date due
and owing to any individuals and/or entities relative to any improvements at the
Premises or relative to the business  conducted by Tenant at the Premises  which
may result in a claim against the Premises or Landlord,



<PAGE>

     (ii) that there are no preliminary  notices or mechanic's  liens which have
or will be served or recorded  by any  individuals  or entities  relative to any
construction at the Premises  during the tenancy of Tenant under the Lease,  and
(iii)  that  there  are no sums or  amounts  which  have or will be  payable  by
Landlord  related to or arising out of the Lease, the occupancy of Tenant of the
Premises or relating to any actions or inactions of Tenant of only type, kind or
nature whatsoever.

     7. Tenant and Landlord  represent that they each individually have not made
any assignment, sublease, transfer, conveyance or other disposition of the Lease
or interest in the Lease and that neither  Landlord nor Tenant has any knowledge
of any claims,  demands,  obligations,  actions or causes of action arising from
the  Lease or  Tenant's  occupancy  of the  Premises  and/or  possession  of the
premises  which  are  not  being  released  hereby  Each of the  parties  hereto
represents  and  warrants  that,  as to each  said  party,  said  party  has the
authority to execute this Agreement.

     8. Should any party hereto  institute  any action or  proceeding to enforce
any  provision  hereof,  or for damages by reason of any  alleged  breach of any
provision of this  agreement,  or for a  declaration  of such party's  rights or
obligations  hereunder,  or for any other judicial remedy,  the prevailing party
shall be  entitled  to be  reimbursed  by the  losing  party  for all  costs and
expenses  incurred  thereby,  including,  but not limited to, such amount as the
court may adjudge to be reasonable attorneys' fees for the services rendered the
party finally prevailing in any such action or proceeding.

        9. Each of the parties does hereby  expressly  waive the  provisions  of
Section 1542 of the California Civil Code, which reads in full as follows:

     "Section 1542. (Certain claims not affected by general release).  A general
release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of  executing  the release  which if known by him
inust have materially affected his settlement with the debtor."

     10.  Tenant  understands  that if  Tenant  fails to  execute  the New Lease
Agreement, this Termination Agreement shall be void a~d



<PAGE>



     Tenant's obligation to perform under the Lease is continuing and absolute.

     11. This Agreement  shall be binding upon and shall inure to benefit of the
parties hereto and their respective successors assigns.

     IN WITNESS WHEREOF,  this Agreement has been entered into by the parties as
of the day and year first above written.

                             Landlord:
                             RREEF USA GROUP)-II, a California Group Trust

                             By:  RREEF MANAGEMENT COMPANY, a
                                  California corporation


                                             By:
                                  Lynn L. Bundrock
                                  Vice President, Director of Leasing
                                  Regional Shopping Center Division

                             Dated:

                             By:

                              Thomas F. Heyse, ~General Manager

                             Dated:


                             TENANT:

                             TOYS INTERNATIONAL, a California corporation


12/7/89


                                             By:

                             Gayle Hoepner, Prdsident
                             Dated:

12/7/89

<PAGE>

             RULES AND REGULATIONS FOR CENTURY CITY SHOPPING CENTER
                      WHICH CONSTITUTE A PART OF THE LEASE

     1. No tenant or its agents or  employees  shall loiter in the mall areas or
other common areas of Century City  Shopping  Center (the  "Center"),  nor shall
they in any way obstruct the sidewalks, entry passages,  pedestrian passageways,
driveways,  truck ways, loading docks, package pick-up stations, ramps, Stairway
entrances  and  exits  to the  Center,  and  they  shall  use the  same  only as
passageways to and from their respective  premises.  Landlord reserves the right
to exclude Cr expel from the Center any person who, in the judgment of Landlord,
is  intoxicated  or under the influence of liquor or drugs,  or who shall in any
manner do any act in violation of the rules and regulations of the Center.

     2. .Doors leading into thereof from tenant  premises shall remain  unlocked
shopping center bus

     3.Water  closets and urinals  shall not be used for any purpose  other than
those for which  they were  constructed,  and no  rubbish,  newspapers  or other
substances  of any kind  shall be thrown  into  them.  No tenant - L.' [ ~ shall
throw or discard cigar or cigarette  butts or other  substances or litter of any
kind in or about the  Center,  except in  receptacles  placed  therein  for such
purposes by Landlord or governmental  authorities./*All  garbage,  including wet
garbage,  refuse  and trash  shall be placed by each  tenant in the  receptacles
provided by Landlord for that purpose. Each tenant shall store all its trash and
garbage  within  its  Premises.  No  tenant  shall  place  in any  trash  box or
receptacle  of the  Center  any  material  which  cannot be  disposed  of in the
ordinary and  customary  manner or trash and garbage  disposal.  All garbage and
refuse disposal shall be made in accordance with directions  issued from time to
time by Landlord.

     4.Tenants shall not mark, drive nails, screw or drill into, paint or in any
way  deface any  exterior  walls,  roof  foundations,  bearing  walls or pillars
without the prior  written  consent of Landlord.  No boring or cutting for wires
shall be allowed,  except with the consent of Landlord. The expense of repairing
any breakage,  stoppage or damage resulting from a violation of this rule or the
preceding  rule shall be borne by the tenant  violating or  responsible  for the
violation of such rule.

     5.No awning or shade shall be affixed to or  installed  over or in the show
windows or the  exterior  or any  premises.  If any tenant  desires  window drop
curtains in the show windows of his  premises,  the same must be of such uniform
shape, color, material and make as may be prescribed by Landlord and must be put
up as directed by Landlord, and paid for by the tenant. No tenant shall place or
allow  anything to be placed  against or near any glass  doors or windows  which
may, in Landlord's opinion, appear unsightly from outside the Premises.

     6.No tenant shall do anything in any  premises,  or bring or keep  anything
therein,  which will in any way increase or tend to increase the risk of fire or
the rate or fire insurance or which shall conflict with applicable law, rules or
regulations   established   by  any   governmental   body  or  official   having
jurisdiction,  the  regulations  of the fire  department  or the  provisions  or
requirements  of any  insurance  policy on such  premises or any part thereof No
tenant shall use any machinery in its premises, even though the installation may
have been originally permitted which may cause any unreasonable noise or jar, or
tremor to the floors or walls,  or which by its weight might injure the walls or
floor of such  premises or any other  portion of the Center.  See paragraph 7 of
Addendum No.1.

     7.No tenant  shall  place a load upon any floor which  exceeds the load per
square foot which such floor was  designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight,  size and position of all
equipment,  materials,  furniture or other  property  brought into any premises.
Heavy objects shall stand on such  platforms as are determined by Landlord to be
necessary to properly  distribute the weight, and each tenant shall pay the cost
of any structural bracing required by Landlord to accommodate the same. Business
machines and mechanical  equipment  belonging to any tenant which cause noise or
vibration  that may be  transmitted to the structure of any tenant's store or to
any space therein to such a degree as to be  objectionable to Landlord or to any
tenants shall be placed and maintained by such tenant, at such tenant's expense,
on vibration  elimination  or other  devices  sufficient  to eliminate  noise or
vibration. The ~r-sons employed to move such equipment in or out of any tenant's
store must be  acceptable  to Landlord  will not be  responsible  for loss of or
damage to. any such equipment or other  property from any cause,  and all damage
done to any building or the common areas or the Center by  maintaining or moving
such  equipment or other property shall be repaired at the expense of the tenant
causing the same.  /*Landlord 'S consent shall not be  unreasonably  withheld or
delayed.

     8.No  tenant or its  agents  and  employees  shall make or permit any loud,
unusual or improper  noises in the Center,  nor  interfere in any way with other
tenants or those having  business with them,  nor bring into nor keep within the
Center any animal or bird, or any bicycle or other vehicle. except such vehicles
as tenants are permitted to park in the Center parking lots and structures,  and
shall park only in the areas  designated from time to time for employee  parking
generally.

     9.No tenant shall install any radio or television  antenna,  loudspeaker or
other device on the roof or exterior  walls of tenant's  store.  No tenant shall
interfere  with radio or  television  broadcasting  or reception  from or in the
Center or  elsewhere.  No tenant  shall  install,  maintain or operate  upon any
premises or in any common  areas  under the  exclusive  control of Landlord  any
vending machines or video games without Landlord's prior written consent.

     10. . No  machinery  of any kind will be  allowed  in any  tenant  premises
without the  written  consent of  Landlord.  This shall not apply.  however,  to
customary office equipment or trade fixtures or package handling equipment.,  or
cash registers -


                                   EXHIBIT "C"

<PAGE>
     11. Except for those tenants whose use clause permits the  preparation  and
serving of food, no cooking  shall be done or permitted in any premises  without
Landlord's prior written consent, except that equipment for brewing coffee, tea,
hot  chocolate  and similar  beverages  shall be  permitted,  provided that such
equipment and use is in accordance with all~applicable  federal,  state and city
laws,  codes,  ordinances,  rules and regulations  and such food  preparation is
limited exclusively 10. food consumed by tenant or such tenant's employees.

     12.'If  any  tenant  requires  telegraphic,  telephonic.  burglar  alarm or
similar  services,   it  shall  first  obtain,   and  comply  with,   Landlord's
instructions concerning their installation.

     13.All freight must be moved into,  within and out of tenant  premises only
during such hours and according 10. such  regulations as may be posted from time
10. time in the general offices of the Center.

     14.Tenants  are required 10.  observe all  security  regulations  issued by
Landlord  and  10.  comply  with  instructions  and/or  directions  of the  duly
authorized  security  personnel for the protection of the Center and all tenants
therein.  Access by any tenant 10. his  premises  or the Center  before or after
hours of operation of the Center shall be subject 10.  clearance by the security
personnel  of the Center and 10.  compliance  with  suet'  procedures  as may be
imposed by such personnel, including presentation of identification satisfactory
10. such personnel.

     15.  [section struck out]

     16. No tenant and no  employee  or invitee of any tenant  shall go upon the
roof of any building  without the prior approval of Landlord which consent shall
not be unreasonably withheld or delayed.

     17. The  requirements  of any tenant will be attended 10. only upon written
application 10. Landlord at the general offices of the Center,  and employees of
Landlord  shall not  perform any work or do  anything  outside of their  regular
duties except upon instructions from Landlord.

     18.  Landlord  may waive any one or more of these  rules for the benefit of
any  particular  tenant or  tenants,  but no such  waiver by  Landlord  shall be
construed  ma waiver of such mica in favor of any other  tenant or tenants,  nor
prevent Landlord from thereafter  enforcing any such rules against any or all of
the tenants of the Center. No waiver of any rule or regulation by Landlord shall
be  effective  unless  expressed in a writing  signed by  Landlord.

     19.  Landlord  reserves  the  right to close  and keep  locked  any and all
entrances  and exit doors of the Center and gates or doors  closing  the parking
areas thereof during such hours.  as Landlord may deem to. be advisable for 'the
adequate protection of the Center and all tenants therein. /*

     20. Landlord reserves the right, at any time, to. change or rescind any one
or more of these  rules  and  regulations  or to make  such  other  and  further
reasonable  rules and  regulations  as in Landlord's  judgment may from time to.
time be  necessary  for the  management,  safety,  care and  cleanliness  or the
Center,  for the  preservation  of good order therein and for the convenience or
tenants of and  visitors  to. the  Center.  Any such  amendments,  deletions  or
additions to these rules and  regulations  shall be effective  immediately  upon
within a reasonable time after delivery of written notice tenants.

     21.Each tenant shall abide by any additional rules or regulations which are
ordered or  requested by any  governmental  or military  authority.  Each tenant
shall be responsible for the observance of these rules and any such rules by its
employees, agents, clients, customers, invitees and guests.

     22,  Landlord shall not be responsible to any tenant or to any other person
for the  non~observance or violation of these rules and regulations by any other
tenant  or other  person~ut  shall  enforce  such  rules  and  regulations  in a
non-discriminatory  manner.

     23.A copy of these  rules and  regulations  shall be attached to and form a
part of each  tenant  lease at the Center.  Each tenant who  executes a lease of
space at the Center shall be deemed to have read these rules and regulations and
to have agreed to abide by them as a condition to its  Occupancy of space at the
Center. In the event of any conflict between these rules and regulations, or any
amendments or additions thereto,  and the provisions of any tenant's lease, such
lease provisions shall control.

     /*?provided  however,  Landlord  shall use its best  efforts  to leave such
doors  unlocked  during the hours the  Shopping  Center is open for business and
shall  exercise  reasonable  judgement in the event a closure  and/or locking is
required.


                                    2

<PAGE>
                      REQUIREMENTS FOR TENANT CONSTRUCTION

                          CENTURY CITY SHOPPING CENTER

SECTION A: GENERAL PROVISIONS

     I.  This  Exhibit  "D"  shall  apply to.  all  construction,  improvements.
modifications,  alterations or additions  ("Improvements") by any tenant to. its
premises, ('premises"),  whether done as the initial completion of the Premises,
or as a change to. the  Premises  at any time  during the term of such  tenant's
lease (the "Lease").

     2.        [section struck out]

     3. Tenant hereby  releases the landlord under the Lease  ("Landlord")  from
any claim for damages  against  Landlord  for any delay in the date on which the
Premises shall be ready for occupancy by Tenant.

     4.  Tenant  agrees  that upon  delivery of  possession  of the  Premises to
Tenant,  Tenant will accept the building in the  condition  which it may then be
and  waives  any  right or claim  against  Landlord  for any  cause  direedy  or
indirectly arising out of the condition of the Premises,  appurtenances thereto,
the improvements  thereon and the equipment thereof; and Tenant shall thereafter
save and hold  harmless  Landlord  from  liability as elsewhere  provided in the
Lease. Landlord shall not be liable for any latent or patent defects therein.

     5. The fact that  Tenant  may enter  into  possession  prior to the  actual
completion  of the building  shell for the purpose of  installing  Improvements,
fixtures or equipment  shall not be deemed an acceptance by Tenant of completion
by Landlord until actual  completion  shall have taken place,  but in such event
Tenant  shall hold  harmless  Landlord  and  indemnify  Landlord for any loss or
damage to Tenant's  fixtures,  Improvements,  equipment and  merchandise and for
injury  to any  persons.  unless  same be  caused by the  active  negligence  of
Landlord or its agents.

     6. All Improvements shall be constructed with new and first~lass  materials
~nd in good and  workmanlike  manner,  and shall comply with all applicable laws
and regulations of all governmental  authorities  having  jurisdiction.  and all
construction  shall  be  lien  free.  Without  limiting  the  generality  of the
foregoing, all Improvements shall comply in all respects with:

     (a)The  Uniform  Building  Code and/or state,  county,  city or other laws,
codes,  ordinances,  and regulations,  as each may apply according to rulings or
determinations of governmental  authorities having  jurisdiction with respect to
the Shopping Center.

     (b)Applicable  standards of the National  Hoard of Fire  Underwriters,  the
National Electrical Code, the American Gas Association, and the American Society
of Heating, Refrigerating and Air Conditioning Engineers.

     (c) Building material manufacturers' specifications.

     Any matters not in conformity  with the approved  working  drawings and the
procedures set forth in the Exhibit "D" shall be promptly reported to Landlord's
construction  coordinator.  Upon  completion of the  Improvements,  the Premises
shall be in good and usable condition.

SECrION B: DESCRIPTION or LANDLORD'S WORK

     The following is a deseripu.o'n of Landlord's construction obligations with
respect to the Premises.  Unless indicated on an addendum to the Lease, all such
responsibilities  have  been met by  Landlord  at the date of  execution  of the
Lease. Landlord's construction obligations with respect to the Premises shall be
only those items  indicated  on such  addendum  to the Lease.  Where two or more
types  of  materials  or  structures  are  indicated,  the  option  will be with
Landlord.

     I.The  building  of  which  the  Premises  are a part  shall  (if  not  yet
completed) be designed by Landlord's architect. Constructioti is Type I, per the
Los Angeles City Building Code.  Structural  clear heights to lowest  structural
members will be as established by Landlord.  Roof will be insulated and built-up
composition.  Exterior walls enclosing the building shell,  except at storefront
areas, will have a finished  appearance and such decorative  quality, if any. as
may be selected by Landlord.  Landlord will provide  normal rear setvice door as
required by Code.

     2. Where desirable in Landlord's  opinion, a vertical neutral strip will be
located at the storefront line between Premises.

     3. All floors provided by Landlord within Premises provided.  at Landlord's
option. either "as is" or shall be concrete,  recessed  approximately three (3')
inches  below mall level to the  structural  slab.  Tenant  shall be required to
perform all work  necessary to raise or lower  Premises floor to match the level
of the malt.

     4. Interior demising  partitions shall consist or metal studs only, maximum
16' on center. demising partitions fall on structural column lines,  projections
may occur at such locations.

     5. Utilities  will be furnished as follows:  Where

     (a)Sanitary  sewer  main  will be  brought  to garage  below the  Premises.
Connections for Tenant's lines to existing mains will be at points determined by
Landlord.


                               EXHIBIT "D"

<PAGE>
     (b)Water  service main will be brought to garage below Premises to approved
point  of  connection  determined  by  Landlord.  Landlord  will  provide  meter
locations (but not meters) for Tenant.

     (c)Natural  gas mains will be  furnished to approved  points of  connection
determined  by Landlord  and  Landlord  will provide  meter  locations  (but not
meters) for Tenant.

     (d)Landlord will provide 277/480 volt, three phase electrical  service at a
central  distribution  point  in the  garage.  Service  will be  sized  to allow
approximately  4.5 watts per  square  foot of floor  area.  Such  wattage  is an
approximation  only,  and  actual  power  input  will be  determined  based upon
Tenant's  requirements  in the Premises,  but not to exceed 4.5 watts per square
foot of floor area.

     (e)A telephone terminal backboard with cable capacity adequate for Tenant's
use will be located in a common area as determined by Landlord.

     (f)Main fire spnnkler lines will be furnished to Premises. All distribution
lines, heads and other features are the responsibility of Tenant.

    6. Common areas will be constructed, lighted, paved, landscaped and drained
as selected by Landlord. Common areas will include:

     (a)Public toilet facilities,  including furnishings9 installation of toilet
fixtures,  painting.  ventilation,  soap,  tissue and paper towel dispensers (or
wall mounted  electrical  hand dryer units) all in  accordance  with  applicable
building codes.

     (b)Stairways  and  elevators  located  as  determined  by  Landlord  and in
accordance with applicable building codes.

     (c)Truck  receiving  facilities  and trash  removal  facilities  located as
determined by Landlord.

     7. Landlord  shall select the  manufacturer  of all building  materials and
equipment which Landlord is obligated to supply.


SECTION C: DESCRIPTION OF TENANT'S WORK

See paragraph 25 of Addendum No.1.

     The work to be done by  Landlord  shall be limited  to that  work,  if any,
described  in an  addendum  to the Lease.  All other  items of work not  therein
provided to be done by Landlord and required to place the Premises in a finished
condition for opening for business  shall be provided by Tenant at Tenant's sole
expense,  and in compliance  with the working  drawings  approved by Landlord as
hereinafter  provided.  This  work  shall  include,  but not be  limited  to the
following:

     I. All storefront work including  doors,  entranceways,  floors,  ceilings.
etc. and all interior walls.  partitions,  ceilings,  etc., and their respective
paints and other finishes,  with the exception ofdemising wall studs supplied by
Landlord.

     2. Finish  floor fill,  including a Building  Code  required  minimum of l~
ofconcrete above the structural slab, and all floor coverings thereon, including
matching floor level of Premises to level of mall.

     3.  Installation  of all  required  utilities  services  to  the  Premises,
including:

     (a)Electrical  power and distribution from Landlord's central  distribution
point in the garage to and within the  Premises,  including  electrical  panels,
conduits and wire conduit,  outlet boxes, switch outlets,  service fuses, copper
wiring,  lighting  fixtures  with  lamping  and  connection  of heating  and air
conditioning  units.  This work includes  Tenant's cost  responsibility  for all
additional  electrical  service capacity  required if Tenant's combined lighting
and power loads exceed 4.5 watts per square foot.

     (b)All plumbing  distribution  and fixtures  including  connection to water
utility  and sewer  mains  provided by  Landlord  for both  employee  and public
restroom facilities within Premises. Any removal and replacement of the existing
structural slab shall be  accomplished in a manner  prescribed by Landlord prior
to commencement of such removal.

     (c)Telephone conduits, cabinets and outlets within the Premises as required
by the utility company  supplying the service  requested by Tenant and extension
of conduits to central telephone backboard.

     (d)All gas lines and  connections,  if required,  from Landlord's  point of
connection to and in the~ Premises.

     (e)Modification  or  extension  of primary  sprinkler  system  through  the
ceiling to conform to Tenant's merchandising and ceiling plans.

     (f)All meters for utilities shall be furnished and installed by Tenant in a
location(s) designated by Landlord.

     4. All heating. cooling or ventilating, except as provided by Landlord.

     5. Any special  equipment  required  by Tenant,  including  all  mechanical
equipment  such as dumb  waiters  and  conveyors  and  their  shafts,  doors and
electrical  connections  and all mechanical  and  structural  work necessary for
installation  and  operation  of such  items.  Special  equipment  includes  any
burglar. speaker, intercom and music systems required by Tenant.

     6. Any storage area required for dry rubbish collection  containers and wet
garbage  cans.  which  area  must be  located  within  the  Premises  in an area
accessible to Tenant's service door.


                                    2

<PAGE>
     7. Furnishing and installation of all toilet rooms, janitorial and drinking
fountains,  together  with  all  work  customarily  incidental  thereto  to meet
applicable building code requirements.

     8. If Tenant  engages in the  preparation  of food or baked  goods,  Tenant
shall, at Tenant's cost: (i) install dry chemical extinguishing devices (such as
Ansul) approved by the local fire insurance rating  organization~and  Landlord's
insurance  carriers,  and keep such devices in good working order and repair and
regularly  serviced  under a  maintenance  agreement  of the  type  required  by
Landlord or by such fire insurance rating organization or carriers and (ii) keep
and  maintain  all  exhaust  ducts and filters in a clean  condition.  If Tenant
engages in the use,  sale or  storage of  flammable  or  combustible  materials,
Tenant shall  install and maintain  chemical  extinguishing  devices  similar to
those  referred to in clause (i) above.  If gas is used in the Premises,  Tenant
shall  install a proper gas cut-off  valve.  If Tenant shall fail to install any
devices required by this paragraph and/or to provide for the servicing  thereof,
Landlord  shall have the right to enter upon the Premises to make such necessary
installations  and charge the cost of such  installations  and ~or the servicing
thereof to Tenant.

     9. Roof  openings,  including  necessary  curbs and flashings to accomodate
installation of the Improvements.

     10.  Furnishing  of all trade  fixtures,  merchandise  and  other  property
incidental to Tenant's business, including but not limited to:

     (a)All  shelving,  store  fixtures,   furnishings,   interior  decorations,
graphics,  mirrors, cornices and all other fixtures,  lighting and other special
effects.

     (b)Electrical and mechanical connection or all store merchandising fixtures
and equipment with related pans.  including  kitchen and food service  equipment
and other equipment peculiar to Tenant's occupancy.

     11.Tenant's  signs.  which shall be in  accordance  with the Tenant's  Sign
Criteria, Exhibit "E" to the Lease.

SECTION D: DESIGN APPROVAL PROCEDURES

     No construction, improvement, alteration, modification or addition shall be
made to the  Premises  until  complete  detailed  plans  for the same  have been
submitted  to and approved in writing by Landlord as provided in Article xvir of
the Lease. The following  procedures are intended to amplify the requirements of
Article XVII.

     1. Tenant must submit detailed  preliminary plans,  [section struck out]-of
the proposed Improvements.  These plans must be submitted in duplicate and shall
include the following

     (a)Merchandising  Plan (to scale)  showing the outline of the  Premises and
the  location  and extent of  interior  partitions,  sales  fixtures,  racks and
fittings,  decorative treatment, signs and displays. storage, shelving, racks or
other devices,  counters, and all other material,  equipment and features (other
than merchandise) installed or placed in the Premises.

     (b)Ceiling  Plan (to scale)  showing  the outline of the sales area and the
location,  type.  and  size  of  lighting  fixtures,   air~diffusers,   grilles,
acoustical board pattern and sprinkler heads.

     (c)Storefront Elevations (to scale).

     (d)Longitudinal Section (to scale).

     (e)All Interior Elevations (to scale).

     Outline specifications  submitted with the preliminary plans shall list the
materials and equipment to be used.

     2.  Landlord,  within  14  days,  will  review  and  return  one set of the
preliminary  plans  to  Tenant  along  with  Landlord's  approval,   conditional
approval, or disapproval of same. If a disapproval is given by Landlord,  Tenant
shall resubmit revised preliminary plans for Landlord's review. Upon approval or
conditional  approval of  preliminary  plans,  Tenant  shall  submit two sets of
working  drawings  prepared by a licensed  architect  (electrical and mechanical
work must be performed by a licensed  engineer),  conforming to the basic design
indicated on the preliminary plans as approved by Landlord. The working drawings
are to be fully  dimensioned  drawings at 'A' scale, and shall include drawings,
specifications  and bid  forms of such  scope  as to  completely  delineate  the
construction work to be performed, including:

     (a) Electrical Calculations showing:

     (1) Number of circuits

     (2) Connected load of each circuit

     (3)Number of spare circuits

     (b)Mechanical Calculations showing:

     (1)The  heating  required  (transmission  and  ventilation  losses) in each
space.

     (2)The  ventilation  supply  and  exhaust  required  for each space and the
ventilation supply and exhaust provided. if any.

                                   3
<PAGE>


     (3) The cooling load in each space.

     (4)The total air flow in each space.

     (5)The independent return air plenum in each space.

     (c)Mechanical Equipment Data showing:

     (I)Temperature  Control System including  control diagram and specification
or make.

     (2)Gas calculations as required by the gas company providing service.

     (d)Engineered  electrical drawings signed by an electrical engineer showing
electrical  loads in the Premises and  accompanied  by detailed  electrical  and
mechanical calculations  demonstrating compliance with Divisions 1-4 of Title 24
of the California Administrative Code.

     (e)All colors.

     The  working  drawings  shall be subject to review by  Landlord in the same
manner prescribed above for preliminary  plans. ~. . I II ~ J.~. ~ I. n~(pound).
~

     3.  Approval  of  preliminary  plans  and  working  drawings  shall  not be
construed as approval of Tenant's  proposed signs,  separate  drawings for which
shall be submitted in accordance with Exhibit "E' to the Lease.

     4. In the  event  agreement  cannot  be  reached  as to the  design  of the
Premises  within 120 days after the date of delivery of a fully executed copy of
the Lease to Tenant, for any reason  whatsoever.  the Lease shall, at the option
of Landlord  exercised  by written  notice to Tenant,  be  terminated  and of no
further force or effect.

     5. Tenant may not  construct  any portion of the  Premises in a design,  or
with finishes or materials other than those approved by Landlord.

     6.  No  changes,  modifications  or  alterations  in the  approved  working
drawings shall be made without the prior written  consent of Landlord.  Requests
for such  changes  must be  submitted  by Tenant  in  writing  with  appropriate
descriptive drawings.

SECTION F: DESIGN CRITERIA

     All  materials  and methods of  construction  listed  herein  indicate  the
minimum  acceptable  level of quality and  performance.  Alternate or additional
methods of  construction  and materials are subject to Landlord's  prior written
approval. -a I.Storefront Work

     A. All storefronts shall be in keeping with the overall plan, character and
design of the Shopping Center as determined by Landlord.

     B. All  storefront  aluminum  shall  be of a color  approved  by  Landlord.
Security shall be by means of painted steel roll-up grilles or anodized aluminum
folding or sliding  glass  doors.  The closed front  portion of all  storefronts
shall have plate glass set in continuous  standard anodized aluminum  storefront
sections which may be combined with other durable and  appropriate  materials as
approved by Landlord.  All storefronts shall be designed and engineered so as to
avoid excessive deflection of plate glass panels.  Aluminum sections shall be of
such standard  manufacture as are readily  available on the competitive  market.
All storefront glass within sixteen inches of floorline shall be heat tempered.

     C. No  storefront or any pan thereof shall project over the lease line into
the mall or other common areas. Swinging entrance doom shall all be narrow stile
and must be  recessed  in such a manner that the door when open will not project
beyond the lease line defining the Premises. Entrance doors shall have concealed
door closers.  No storefront or any part thereof shall project  beyond the lease
lines  describing the limits of the Premises.  All glass in all entrance  doors,
and all glass in door sidelights,  shall be heat tempered. All planters shall be
self-contained with no discharge of water permitted.

     D. Storefront Construction:  All storefront work shall be supported at head
sections  by a welded  structural  steel  framework,  which in turn is  securely
attached,   suspended  and  braced  to  the  existing  building  structure.  All
storefront material shall be durable material such as glazed

     E.  Storefront  curbs,  if used,  must conform to standard  Shopping Center
details.

     2.Signs.

     All signs shall be designed,  constructed  and located in  accordance  with
Exhibit "E" to the Lease and shall be subject to the prior  written  approval of
Landlord.

     3. Floors.

     Carpeting  and/or other quality floor,  such as glazed or unglazed  pavers,
wood  parquet or pure  vinyls  shall be used in  Tenant's  public  areas.  Vinyl
asbestos tile shall not be used in Tenant's public areas


                                        4

<PAGE>
     without the prior  written  approval of  Landlord.  All raised  floor areas
shall  be  of  fire  resistant   materials  meeting  applicable   building  code
requirements or be serviced by sprinklers meeting applicable code requirements.

     4. Ceilings

     A. The ceiling must be concealed spline,  hanger-wire  supported acoustical
tile, drywall. piaster construction, or other material approved by Landlord.

     B. The use of wood or other  combustible  material  above the ceiling or in
any other attic space is prohibited.

     5.Structural Work

     Any alterations and/or additions and reinforcements to Landlord's structure
required to accommodate Tenant's work shall be Tenant's responsibility and shall
be subject to  Landlord's  prior  written  approval as to design,  materials and
methods of construction.

     6. Roof

     A. There shall be no  penetrations  of the roof  without the prior  written
approval of Landlord. Any such roof penetrations required by Tenant and approved
by Landlord  shall be  engineered  and  installed in  accordance  with  standard
shopping center details.

     B. ALL flashing, counter-flashing and roofing repairs shall be performed by
a roofing contractor approved in advance in writing by Landlord.

     C. Toilet room exhaust  shall not be permitted to penetrate  the roof,  but
shall instead be directed to the ceiling  plenum area through a carbon filter or
by another method approved by Landlord in writing in advance.

     7. All partition walls  separating  tenant areas will extend to a height of
twelve  feet with I X I wire  fabric or other  security  methods as  approved by
Landlord to structure.  Finish materials on partitions  separating  tenant areas
will extend to tenant's finished ceiling.  All such partitions shall be finished
with five eighths inch thick type X gypsum wallboard applied to metal studs with
mechanical  fasteners  in such a manner  that the wall,  when  finished  on both
sides,  will be an approved  one-hour fire resistant wall. Joints shall be taped
and floated. Partitions within the Premises shall meet fire resistance specified
in governing building code.

     8.Electrical

     All fluorescent or incandescent lighting fixtures in Tenant's public areas,
other than decorative  fixtures,  shall be recessed.  Fluorescent fixtures shall
have acrylic lenses or diffusers. Bare lamp fluorescent or incandescent fixtures
may be used only in concealed areas. Electrical  installations shall comply with
the following:

     A. THE  electrical  system shall be designed for  available  short  circuit
duty.

     B.  Materials,  products and equipment,  including all components  thereof,
shall be new and selected from the  Underwriters  Laboratories  List of Approved
Items and shall meet requirements of ASTM, IESE, APCEA, NEC, NEMA, CBM and other
recognized standards and shall be sized in - conformity with requirements of the
National  Electrical  Code,  and  other  applicable  codes,  whichever  are more
stringent. Copper wiring will be used exclusively in all installations.

     C. Lighting  Panelboards  shall be the 3 phase, 4 wire distributed  phasing
type, cabinets shall be constructed of code gauge steel, totally enclosed,  wall
mounted or free-standing.

     (I)All breakers shall be of the bolted type.

     (2)Lighting  circuits shall be 20 ampere capacity,  with connected load not
to exceed 70% of breaker trip rating.

     (3)Circuit  breakers shall be thermal  magnetic type,  molded case with all
two and three pole breakers of the common trip type.  One spare circuit  breaker
of 20 ampere capacity shall be provided for every five active circuits.

     D. Magnetic motor starters  shall be used for integral  horsepower  motors.
Starters  shall have three (3) overload  elements.  Combination  starters,  when
used,  shall contain AB circuit  breakers~~of  fused switches and double clement
fuses.

     E. Installation shall be as follows:

     (I)Hangers shall include all miscellaneous  steel, such as channels,  rods,
etc.,  necessary  for the  installation  of work.  Hangers  shall be fastened to
steel,  concrete or masonry,  but not to piping and the electrical work shall be
installed in a manner which will not overload the building structure.

     (2)All conduits shall be concealed.

     (3)Conductors shall be in conduits, ducts, or approved raceways.

     F. Grounding shall be as follows:

     (1)Conductors in conduit.


                                        5

<PAGE>

     (2) Connections bolted or brazed.

     (3) Connections to cold water lines for each conduit system and neutrals to
transformer.

     G. Distribution  panels shall be of the convertible type.  Circuit breakers
shall be  thermal  magnetic  type,  molded  case,  with all two and  three  pole
breakers of the common trip type.

     9. Plumbing and Gas Fitting.  of its within th~ Premises

     A.  During  the term of the  Lease,  Tenant  shall  maintain  all  plumbing
facilities  in  conformance  with all  ordinances.  Tenant shall also  maintain,
including periodic flushing, Tenant's sewer line to Landlord's main.

     B. If supplementary  plumbing facilities are installed,  service piping for
such facilities shall be concealed in accessible service chases.  Water closets,
urinals,  lavatories,  janitor sinks,  and drinking  fountains  shall be of good
standard  manufacture.  or hot water tank is provided by Tenant for its domestic
hot water  requirements,  then hot  water  tanks  shall be less than 80  gallons
capacity,  shall be  electric  automatic,  and shall have all  necessary  safety
controls.

     C. If food is prepared on the Premises,  Health Department requirements may
include  enlargement  of the sewer line from the Premises to the main sewer line
and  (b)  installation  of a  grease  trap  in any  kitchen  floor  drain.  Such
installations,  and cleaning and  maintenance  thereof in accordance with Health
Department requirements, shall be Tenant's sole responsibility.

     10.Miscellaneous Tenant Responsibilities.

     A. ALL odor and  moisture  producing  areas  must be  exhausted  by special
exhaust systems.  This includes  employee and public toilets,  kitchens,  beauty
parlors and alteration rooms.

     B. Special  exhaust Systems shall be provided  complete by Tenant.  Work by
Tenant  will  include  ductwork,  fans,  registers  and  grilles.  In all cases,
ductwork  shall connect  directly to exhaust  hoods in  ventilated  spaces or to
registers or grilles mounted in ceiling in ventilated spaces.

     C. Special cooling and heating  systems such as required for  refrigeration
display cases and walk-in coolers,  and for alteration room  steam-pressing  and
blocking  equipment shall be provided  complete by Tenant.  Energy and equipment
for  heating or cooling  shall be provided  entirely  by Tenant.  Any exhaust or
make-up air requirements for this service will be provided by Tenant.

     D. Location of equipment  serving  special  exhaust and make-up air systems
and special heating and cooling  systems shall be designated  and/or approved by
Landlord.  Routing of  ductwork  serving  exhaust  and  make-up  air systems and
routing  of  piping  serving  special  heating  and  cooling  systems  shall  be
designated and~or approved by Landlord.

     E. Air conditioning  exhaust or special cooling or heating systems shall be
submitted to Landlord for approval in the manner provided in this Exhibit "D."

     II. Material Requirements.

     A. All material shall be new and free from defects.

     B. Installation and materials,  including ductwork and fire dampers,  shall
meet the requirements of the City of Los Angeles,  the State of California,  the
Factory  Insurance  Association  (FIA),  and the  Pacific  Fire  Rating  Bureau,
whichever is more stringent.

     C. All ductwork  shall be galvanized  steel except  ductwork for kitchen or
other  special  equipment  which shall be in  accordance  with  applicable  code
requirements.

     D.  Insulation on supply  ductwork shall be no less than I' thick No. I pef
duct wrap.

     E. All  ductwork  within the  Premises  shall be complete  with  diffusers,
dampers, extractors. turning vanes, hangers and specialties.

     F. Pneumatic thermostats shall be of the non-bleed type to conserve air.

     G.  Pneumatic  tubing shall be hard drawn copper with wrought copper solder
fittings.  Flare  or  compression  fittings  shall  be used  for  connection  to
instruments and control devices.

     12.Inconsistencies.

     Where final drawings are  inconsistent  with the provisions of this Exhibit
"D," the provisions of this Exhibit "D" shall prevail.

     13.Building Exterior

     Tenant  shall not place or maintain on the  exterior  of the  building  any
awnings,  canopies.  signs.  appurtenances,  or any  other  item  of any  nature
whatsoever except with the written consent of Landlord.

     14.Governmental Regulations.

     It shall be the  responsibility  of Tenant to conform  to all  governmental
regulations,  codes.  rules.  etc.  pertaining to Tenant's  work,  including the
obtaining of all permits,  inspections,  etc.  required.  and copies of all such
permits shall be forwarded to Landlord immediately upon receipt thereof.


                                        6

<PAGE>

SECTION F: CONSTRUCTION PROCEDURES


     1. Tenant and/or Tenant's  contractor  shall not use the malls,  driveways.
parking  areas or other  common  areas for storage of  materials or equipment or
other construction activities without the prior written consent of Landlord, and
all such storage  shall be limited to those areas  designated  by Landlord.  Any
damage,  staining  or  defacing  of the mall  surfaces  or other  areas shall be
repaired by Tenant at its cost and such repairs shall be to the  satisfaction of
Landlord.

     2.  Tenant  or  its  contractor  shall  provide  a  temporary  construction
barricade of a standard design and color as specified by Landlord. The barricade
shall  be  maintained  in a  clean  and  neat  manner  for the  duration  of the
construction activities.

     3. Tenant shall at all times during the construction of Improvements assure
that the Premises and the surrounding  area are maintained in a clean,  neat and
orderly manner.  Any rubbish caused by construction  operations shall be removed
immediately and shall not be placed in the trash removal system for the Shopping
Center.  Should  Tenant fail to conform to the  requirements  of this  paragraph
within 24 hours after written notice of any deficiency by Landlord, Landlord may
cause such  deficiencies  to be  corrected  by others and may charge the cost of
same to Tenant,  as  additional  rent  payable by Tenant  pursuant to the I-ease
within ten (10) days after Tenant's receipt of Landlord's invoice therefor.

     4. All field labor  employed in the  construction  of the Premises shall be
performed in accordance  with the terms and conditions set forth in the Southern
California Master Labor agreements.

     5. The garage and mall slabs are suspended structural surfaces and as such,
are  subject to loading  limitations,  particularly  from  vehicles,  storage of
construction materials,  etc. It shall be the responsibility of Tenant to review
with  Landlord  any  unusually  high  loads  before  placing  such  loads on the
suspended  slabs.  In particular,  transit mix concrete  trucks,  or vehicles of
similar size or weight, are expressly prohibited.

     6 No sign of any type  shall be  placed  on or about  the  Premises  or the
Shopping Center during the construction period without the prior written consent
of Landlord.

     7. Any damage to the mall or garage or the buildings or other structures of
the Shopping  Center  occurring as a result of Tenant's  Activities by Tenant at
its cost and such repairs shall be to the satisfaction of Landlord.

     8.  Landlord  shall  have  the  right  to  approve,  in  writing,  Tenant's
contractor prior to start of work. and Landlord shall not unreasonably  withhold
or delay such approval  provided that such contractor has all required state and
local  licenses,  and has reasonable  experience  with projects of the scope and
type of Tenant's work.

     9. It shall be Tenant's  responsibility  to obtain from its  contractor and
forward to Landlord a complete set of "as-built"  drawings  showing  thereon all
architectural,  structural, mechanical and electrical work actually installed in
the Premises.  These drawings shall be furnished  immediately  upon  substantial
completion  of the work,  but in no event  later  than the date on which  Tenant
commences to conduct its business in the Premises.

     10. Tenant shall obtain and deliver to Landlord all approvals  with respect
to  electrical,  gas. water and telephone work as may be required by the utility
companies supplying the services. Tenant shall obtain utility service, including
meters,  from the utility  companies which supply service unless Landlord elects
to supply service  and/or meters.  Landlord,  an independent  contractor,  or an
authorized utility company. as the case may be, shall have the right, subject to
Landlord's written approval,  to run utility lines. pipes. conduits or ductwork,
where  necessary or desirable,  through attic space,  column space,  partitions.
beneath  the floor  slab,  or in or through  other pans of the  Premises  and to
repair,  alter,  replace  or  remove  the  same.  all  in a  manner  which  does
unreasonably interfere~e~ with Tenant's use thereof.

     11. Tenant shall cause to be carried  insurance  against damage by fire and
other casualty to the Improvements to be made by Tenant. Such insurance shall be
in the amounts and with such  extended  coverage  endorsements  as are  required
pursuant to Article VIII of the Lease.  Certificates for such insurance shall be
delivered to Landlord before  construction is started or contractor's  equipment
is moved on the site.  If during the course of  Tenant's  work any damage  shall
occur to the  Improvements,  Tenant shall repair the same at Tenant's  cost.

     l2.  [section struck out]

     13.  Landlord  shall have the right (but shall not be obligated) to perform
by its own  contractor  or  subcontractor,  on behalf of and for the  account of
tenant,  any work  which is the  responsibility  of Tenant  and  which  Landlord
determines  should be so  performed.  Generally,  such work  shall be work which
affects any structural  component of the building  shell or the general  utility
systems serving the building in which the Premises are located.

     Landlord may. at its option, by written notice given at least five (5) days
prior to the commencement of such work, enter upon the Premises the perform such
work and Landlord's  cost of planning and performing  such work shall become due
and payable by Tenant as additional rent upon demand.  Similarly,  Landlord may.
if Tenant fails to properly  perform or correct any of Tenant's work within five
(5) days after  written  notice  from  Landlord  setting  forth such  failure or
deficiency, enter upon the premises and perform such work and Landlord's cost of
planning and performing  such work shall he payable by Tenant as additional rent
upon demand.


                                        7

<PAGE>
     14. Tenant's  architects,  engineers,  and contractors will work in harmony
with each other and those of Landlord so as to insure proper maintenance of good
labor  relationships.  Tenant's  work  shall  be  coordinated  under  Landlord's
direction  with work being done by Landlord  and other  tenants in the  Shopping
Center, so that Tenant's work will not interfere with or delay the completion of
any other construction work in the Shopping Center.

     15. Landlord's  acceptance of Tenant's work as being complete in accordance
with the  approved  working  drawings  and this  exhibit  shall  be  subject  to
Landlord's  inspection  and  subsequent  written  approval.  Tenant  shall  give
Landlord  prior  written  notification  of the  anticipated  completion  date of
Tenant's work and shall schedule a "walk-through"  prior to opening the Premises
for business,  The walkthrough shall be attended by Tenant,  Tenant's contractor
and a representative of Landlord.  A 'punchlist" of items to be completed and/or
corrected by Tenant shall be compiled.  Tenant  shall  promptly  correct  and/or
complete  all items on such  punchlist  and failure to do so within  thirty (30)
days after the walk-through  shall permit Landlord,  without notice,  to correct
and/or complete such items pursuant to Section 7.02(b) of the Lease. IN NO EVENT
SHALL TENANT OPEN PRIOR TO SUCH WALK-THROUGH.

     16. Notwithstanding any other provisions of this Exhibit o'D," title to all
Improvements  under  construction  or completed  shall vest in Landlord,  except
trade fixtures and furniture installed by Tenant.

SECTION C: Tenant'S CONTRACTOR

     The  following  procedures  shall  govern  those  persons  bidding upon and
performing for Tenant any  Improvements  in or to the Premises.  Such procedures
shall apply whether or not such  contractor(s)  shall review subsection I below,
as contemplated by this Section G.

     I. Bids and Contracts

     A. Each contractor  shall review this Exhibit "D" and the plans,  drawings,
specifications and other descriptive material regarding Tenant's Work and direct
any  questions  regarding  these  materials to Tenant's  architect or Landlord's
construction coordinator prior to submitting a bid or contract proposal.

     B. Each contractor  shall state in his bid or contract  proposal the number
of days  requested  to  complete  the  Improvements  and all  items of work that
deviate from the approved plans,  drawings or specifications and shall set forth
clearly the alternates which he proposes.

     C.  Each  contractor  shall  include  in his  bid or  contract  proposal  a
provision that he will guarantee  that the  Improvements  shall be free from any
defects in workmanship  and materials for a period of not less than one (I) year
from the date of completion  thereof.  Such contractor  shall be responsible for
the  replacement  or  repair,  without  additional  charge,  of all work done or
furnished in accordance  with his contract which shall become  defective  within
one (1) year after  substantial  completion of the work.  The correction of such
work shall  include,  without  additional  charge,  all  additional  expenses or
damages in connection  with such removal or replacement of all or any pan of the
Improvements,  the building shell and/or the common area improvements  which may
be damaged or disturbed thereby.  Such guaranties as to materials or workmanship
of or with  respect to the  Improvements  shall be contained in the contract and
shall be so  written  that such  guaranties  or  warranties  shall  inure to the
benefit of both Landlord and Tenant,  as their  respective  interests may appear
and can be directly enforced by either,

     2. Prior to Commencement of Improvements

     A. Tenant's  contractor  will visit the Premises and the Shopping Center to
determine  the  location  of  existing  "temporary"  power and will  arrange for
temporary  electrical service and other temporary  utilities as necessary to the
Premises  meeting  all  O.S.H.A.  codes.  The cost of  bringing  such  temporary
services  to the  Premises,  and the cost of such  services  shall  be  Tenant's
responsibility.  Such  contractor  shall  review  with  Landlord's  construction
coordinator  the location of electrical  and other  services and be aware of the
distance and requirements to bring these services to the Premises.

     B. Tenant's contractor shall submit to Landlord's construction  coordinator
for approval a list of proposed subcontractors and a bar chart progress schedule
listing  suppliers,  major items and any key sub-items,

     C.  Tenant's   contractor  shall  hold  a  pre-construction   meeting  with
Landlord's construction  coordinator to review and schedule the Improvements and
to discuss any unusual  aspects  thereof or problems  anticipated  in connection
therewith.

     D. Tenant's  contractor  shall select only  subcontractors  who  diligently
perform their work in a timely manner.

     E. Tenant's  contractor shall obtain and pay for all necessary permits with
respect to the Improvements.

     F.  Tenant's  contractor  shall  obtain from each  subcontractor  a written
guaranty  or  warranty  of the  type  set  forth  in I.C.  above,  covering  the
portion(s) of the Improvements for which such  subcontractor is responsible.

     3. During Construction of Improvements

     A. Tenant's  contractor  shall do or cause to be done all  demolition  work
such as jackhammer work, concrete saw cutting,  wrecking and removal of trash in
a manner that does not create noise,  dust and interference  with the operations
of the Shopping Center. All jackhammer and similar work shall stop at 10:00 A.M.
each morning,  unless approval to continue past such hour is obtained in advance
from Landlord's construction coordinator.


<PAGE>
     B. Upon completion or the  Improvements,  Tenant's  contractor shall remove
all temporary structures, surplus materials, debris and rubbish of whatever kind
remaining in the  Premises or within the Shopping  Center which had been brought
in or created by the contractor and subcontractors performing the Improvements..

     C. If the Premises have service doors,  Tenant's  contractor  shall arrange
for all employees.  tools, equipment and supervisory personnel to enter and exit
the  Premises  through  such  service  doors.   Tenant's   contractor  shall  be
responsible  to clean up any dust,  dirt,  or tracks  which result from entry or
exit through any other doors or entrances to the  Premises.  When size and shape
of  materials  or  equipment  makes  impossible  the use of the  service  doors,
permission  for access  through other  entrances will be granted by the Security
Department,  but only prior to 10:00 A.M. Where the premises do not have service
doors, Tenant's contractor shall cause materials and major items ro be delivered
prior to 10:00 A.M.  Tenant's  contractor shall also maintain proper cleanup and
dust removal during the course of the working day.

     D.  Prior to the  installation  of floor  fill  which is  applied  over the
concrete sub-floor,  a method of adhesion to the sub-floor will be submitted for
approval  by  Landlord's  construction   coordinator.   Landlord's  construction
coordinator  shall  inspect the area to receive  floor fill prior to filling and
approve the method of adhesion.

     E. TENANT's  contractor will be responsible for advising his  subcontractor
doing fire  protection  work of Landlord's  regulations  and method of reporting
"shutdown" of Landlord's fire  protection  system to Landlord prior to the start
of any work or this type. In addition, Tenant's contractor shall be aware of the
monocoate fire protection on structural  steel and shalt be held responsible for
the protection and repair of same.

     F. TENANT's contractor shall notify Landlord's construction  coordinator in
writing of any long delivery or special  condition  items which appear to create
time delays or excessive costs with respect to the Improvements.

     4.Miscellaneous

     A.  Tenant's   contractor   shall  provide   on-the-job   supervision  when
subcontractors  or employees are working in the Premises.  The  super-visor  for
Tenant's contractor shall be responsible for -conformance to all Shopping Center
regulations   regarding  tenant  construction.   A  reasonable  portion  of  the
Improvements shall be performed by Tenant's  contractor to allow him to maintain
control of the work in progress.

     B. TENANT's  contractor  shall maintain and require all  subcontractors  to
maintain  worker's  compensation  insurance  covering  all or  their  respective
employees and shall also carry public liability  insurance,  including  property
damage, with limits and on forms and in companies approved by Landlord,  and the
policies  therefor shall insure  Landlord and Tenant as well as the  contractor.
Certificates  for all or the foregoing  insurance shall be delivered to Landlord
before construction is started or contractor's equipment is moved onto the site.

     SECTION H: TEMPORARY SERVICES

     1. During the  construction of the  improvements,  Tenant shall provide and
pay for connections and meters for temporary water, gas and electrical  services
brought to such point as  Landlord  shall  determine.  Tenant  shall pay for alt
water,  gas.  electrical  current  and fuels  used  during the  construction  of
Tenant's   Work [section struck out]  with  respect  to  all  other
temporary  services required by Tenant during  construction of the Improvements.
All such charges shall be additional rent payable upon demand by Landlord.

     2. [section struck out]

                                       9

<PAGE>
                 TENANT SIGN CRITERIA FOR EXTERIOR TENANT SIGNS
                         AT CENTURY CITY SHOPPING CENTER

GENERAL REQUIREMENTS

     1.These  specifications  have been  established  to  ensure an  outstanding
Shopping Center and for the mutual benefit of all tenants thereof.  They will be
strictly  enforced  and be a part of each tenant lease (the  "Lease").  Landlord
reserves the tight to bring any installed  non-conforming  or  unapproved  signs
into conformance at the expense of the relevant tenant ("Tenant").

     2. Each  Tenant  and such  Tenant's  sign  contractor  shall  review  these
specifications before preparing sign drawings for submittal.

     3. It is intended that Tenant  signing at Century City  Shopping  Center be
developed in an  imaginative  and varied manner.  The  development of signs with
various  styles  and  materials,   consistent  with  these  specifications,   is
encouraged.  Although  previous and current signing practices of the Tenant will
be  considered,  they will not govern  signs to be  installed  in  Century  City
Shopping Center or be the basis for deviation from these specifications.

     4.  Drawings for signs  and/or  graphics to be installed by Tenant shall be
submitted to Landlord for approval. No sign of any type shall be placed anywhere
on or about the Premises  without the express prior written approval of Landlord
as to design, color. format,  layout, type face and location.  Landlord reserves
the  right to  disapprove  any sign  design  which  in its sole  opinion  is not
compatible with these specifications and the esthetics of the Center. Exceptions
to these  specifications  will be extremely rare and must be in a writing signed
by the Landlord.

     5. Approval of preliminary  plans or working drawings for any premises does
not constitute  approval of any sign work.  Concurrently  with or promptly after
submission of preliminary plans for Tenant's  premises (the "Premises"),  Tenant
shall  submit  to  Landlord  drawings  and  specifications,   in  quadruplicate.
including  samples of  materials  and colors,  for all proposed  sign work.  The
drawings shall clearly show the location of each sign on a storefront elevation,
together with all graphics,  color and construction and attachment details. Full
information   regarding   electrical   load   requirements   and  brightness  in
foot-lambert also is to be included.

     Landlord  shall  return  one  (I)  set of the  sign  drawings,  as  soon as
possible,  to Tenant.  The drawing will either be marked  "Approved."  "Approved
Based on Landlord's  Modifications'  or  "Disapproved."  Sign drawings that have
been "Approved Based on Landlord's Modifications" are to be returned to Landlord
bearing  Tenant's  approval,  or  are  to  be  redesigned  and  resubmitted  for
Landlord's approval within seven (7) days after receipt by Tenant. Sign drawings
that have been  disapproved are to be redesigned and resubmitted to Landlord for
approval also within seven (7) days after receipt by Tenant.

     6. Furnishing and installation of signs and all costs incurred shall be the
responsibility  of Tenant.  Sign  construction  is to be completed in compliance
with the instructions, limitations and criteria contained in this exhibit.

     7. The wording of signs shall be limited to the store name only.  Corporate
crests.  shields or insignia are acceptable.  Such items shall not exceed thirty
six inches (36*) in width or height.

     8. In no case shall there be  installed  more than one (I) primary sign per
tenant storefront.  Tenants occupying comer spaces shall be allowed one sign per
elevation  with a maximum  of two (2) signs,  or one sign ~only on the  diagonal
comer of the leased  storefront.  All signs and  identifying  marks  shall occur
within the limits of the Premises between the floor line and the roofline. Signs
shall not project beyond the lease line of the Premises  bordering  common areas
more than two inches (2') if less than eight feet (8') above  finished  grade or
more than six inches  (6') if above  eight  feet (8').  Signs may be placed at a
right angle to a storefront only inside the lease line of the Premises.

     9. No sign of any sort shall be  permitted  on the  fascia  edges of mails,
covered  walkways or conopies.  or suspended from the ceiling of malls,  covered
walkways,  or placed on canopy roofs,  building  roofs or monitor  walls,  or on
building walls except as approved by Landlord.

     10.  Painted  or hand  lettered  signs  will  not be  permitted  except  as
expressly  approved by Landlord  in writing in  advance.  Decals,  gold leaf and
handpainted  lettering will be permitted on display  windows only with the prior
written approval of Landlord.

     II.All illuminated signs shall have individual letters,  reverse channel or
plastic  face  letters  only.  Illuminated  plastic  face  sign cans will not be
permitted.  All illuminated  signs and their  installation  must comply with all
applicable building and electrical codes.  Letters may be back-illuminated  with
lamps  contained  wholly  within  the  depth  or the  letter  and  with  maximum
brightness not in excess of 100 foo(pound). lamberts. Signs shall have no moving
or  flashing  lights and no  luminous  letters on back  panels.  No  flashing or
animated signs will be permitted.

     12. Lettering running on a diagonal and exposed neon are not permitted.

     13. No sign of any type other than those  described  in  paragraph 10 above
may be attached to or temporarily placed within the display windows of any store
except where constructed of self-supporting  materials and made an integral part
of the display in said window.  Credit card decals and temporary cardboard signs
will not be permitted on the exterior of display windows.

     14.  The total area of all signs on any  storefront  shall not  exceed.  in
square feet. the foot frontage of the storefront  multiplied by 0.375.  For this
purpose:


                                   EXHIBIT "E"

<PAGE>
                                   EXHIBIT D-2

                        (Toys International - Space #B1O)



     1. Storefront  remodel to consist of new Spandil glass, floor tile, plastic
laminate  sign  soffit  and sign,  new  mullion  finish,  new flaqs and  overall
"spruce-up" of existing finish to remain in use.

     2. Installation 0+ additional general sales lighting.

     3- Rework and add additional  merchandise  area for "plush"  merchandise to
include valance cove lighting.

     4. New carpet throughout public access area.

     5. New wall and ceiling  paint and finish.  ~ll  damaged,  aged,  or soiled
fixtures shall be repaired to "like new"

     6. Existing toiletroom and second means 0+ egress shall be upgraded to meet
latest codes.


11/14/89

<PAGE>
     (a)The  area of a sign is the area of a  rectangle  surrounding  all of the
letters of the sign.  Where upper and lower case  letters are used,  the average
height of the letters shall be used to determine the height of the rectangle.

     (b)Foot frontage of a storefront is the length of the facade measured along
the lease line separating the Premises from the adjacent mall.

     In addition, the average height of letters shall not exceed eighteen inches
( l8~).  Multiple or repetitive signs may be allowed provided the aggregate area
of such signs conforms to the limitations set forth herein.

     IS.  Service  doors  will be signed  with a uniform  type style and size to
match signage on existing service doors.

     CONSTRUCTION AND INSTALLATION REQUIREMENTS.

     1.All permits for sign  structures  and  installation  shall be obtained by
Tenant's sign contractor.

     2. No sign  cabinets or exposed  conduit  will be permitted on the exterior
face of a sign or building.

     3. No exposed  raceways,  ballast boxes or  transformers  will be permitted
under any circumstances.

     4. All raceways,  transformers,  electrode  boxes and other wiring shall be
located in furred ceiling spaces or behind monitor walls or sign background.

     5. No exposed crossovers between letters or words will be permitted.

     6. All metal sign  materials,  fastenings  and clips of all types  shall be
hot-dipped galvanized iron, stainless steel or brass; no black iron materials of
any type will be permitted.

     7. Power sources and  connections  for all  illuminated  signs shall be the
responsibility of Tenant.

     8. No labels will be permitted on the exposed surface of signs except those
required  by local  ordinances,  and all such labels  shall be in  inconspicuous
locations.


                                        2

<PAGE>




<PAGE>

                                      10.80

                   Lease Agreement for Store - Crystal Court.



<PAGE>

                        SOUTH COAST PLAZA RETAIL CENTER


                                SOUTH COAST PLAZA
                                    Landlord

                                       and




                         TOYS INTERNATIONAL a California
                                     Tenant



<PAGE>

                         SOUTH COAST PLAZA RETAIL CENTER

     In consideration of the rents and covenants hereinafter set forth, Landlord
hereby  leases to Tenant,  and Tenant  hereby hires from  landlord the following
described premises upon the following terms and conditions:

                       FUNDAMENTAL LEASE PROVISIONS May 10
             Dated (for identification purposes). ____________ 1993

<TABLE>
<CAPTION>



Tenant:                 TOYS INTERNATIONAL, a California corporation
Landlord:               SOUTH COAST PLAZA, a partnership 

<S>                                                                             <C>
Tenant's Trade name: TOYS INTERNATIONAL
Suite Number 1030
Use of Premises: Retail sale of quality toys and related items                  (Section 6.01)
Initial Monthly Minimum Rent: $11 ,121.85 ($25.75 per sqft. peryr)              (Section 3.01)
Rent Commencement Date: September 21, 1993 see Addendum                         (Section 2.02)
Lease Expiration Date: January 31 2004                                          (Section 2.01)
Outside Date for PDM:        See Addendum                                       (Section 17.03)
Outside Date for Start of Tenant's Work:             See Addendum               (Section 17.04)
Percentage Rent: 6% in excess of breakpoint of $2,224,370.00 per lease year     (Section 3.03)
Estimated Initial Common Area Charges: S 10.88 per sq. ft. per yr.t*            (Section 14.05)
Estimated Initial Real Property Taxes: $ 1.45 per sq. ft. per yr.~'             (Secs. 5.01, 14.05)
Estimated Initial Tenant Area HVAC Charges: $ 4.66 -- per sq. ft. per yr.**     (Section 12.04)
Estimated Initial Enclosed Mail HVAC Charges: ~~1.26 per sq. ft. per yr."       (Section 12.05)
Promotional Fund: $ 2.48 per sq. ft. per yr                                     (Section16.15)
Initial Promotional Fund Payment: ~.None                                        (Section 16.15)
Floor Area of Premises! 5,183 sq. ft.                                           (Section 16.04)
Security Deposit: None                                                          (Section 16.05)
Plan Review Fee: None                                                           (Section 17.03)
HVAC Hookup and Upgrade Fee: ~ None                                             (Section 17.04)
Broker(s): None                                                                 (Section 16.12)

Addresses for Notices:                                                          (Section 16.11)
</TABLE>


To Landlord:
South Coast Plaza
Management Office
3333 Bristol Street
South Coast Plaza, California 92626
Attn: General Manager

With a copy to:
South Coast Plaza
3315 Fairview Road
Costa Mesa, California 92626
Attn: Controller

To Tenant:
Mr. Gayle Hoepner, President
Toys International
3631 Seaview Avenue
Corona del Mar, California 92625 

With a copy to
Mr. Gayle Hoepner, President
CEO Toys International
South Coast Plaza
3333 Bristol Street
Costa Mesa, CA 92626

     * to be  adjusted  to reflect  actual  Floor  Area 

     **  based  upon  estimated  amounts  for  current  calendar  year,  without
representation  as to actual amounts  determined for current and future calendar
years


<PAGE>
     The  Fundamental  Lease  Provisions  are an integral part of this lease and
each reference in this lease to any of the Fundamental Lease Provisions shall be
construed to incorporate  al] of the terms provided under each such  Fundamental
Lease  Provision.  In the event of any conflict  between any  Fundamental  Lease
Provision and the balance of this lease, the latter shall control. References to
specific  Sections are for  convenience  only and designate some of the sections
when  references to the particular  Fundamental  Lease  Provisions  appear.  The
listing in the  Fundamental  Lease  Provisions  of monetary  charges  payable by
Tenant shall not be construed to bean  exhaustive list of all amounts payable by
Tenant pursuant to this lease.

                                       (I)

<PAGE>

<TABLE>
<CAPTION>


                                TABLE OF CONTENTS

<S>                                                                                                 <C>
ARTICLE I-PREMISES                        SEE ADDENDUM
   Section 1.01  Premises Defined                                    ...... .... ..... .............1
ARTICLE II-TERM
  Section 2.01  Length of Term..          SEE ADDENDUM                                              1
  Section 2.02  Commencement Date and Rent Commencement Date SEE ADDENDUM                           1
  Section 2.03  Lease Year .... ...                                                                 2
ARTICLE III-RENT                    See Addendum
  Section 3.01  Minimum Rent...     SEE ADDENDUM                                                    2
[Intentionally Deleted                                                                              2
  Section 3.03  Percentage Rent..  SEE ADDENDUM                                                     2
  Section 3.04  Rent Defined.......                                                                 3
ARTICLE IV-RECORDS, REPORTS AND ACCOUNTING
  Section 4.01  Records...             SEE ADDENDUM                                                 3
  Section 4.02  Statements of Gross Sales                                                           4
  Section 4.03  Audit....... .... ....  .....SEE ADDENDUM                                           4
ARTICLE V-TAXES                                             ...   ................. ...... .... ....
   Section 5.01  Real Property Taxes                                                                4
   Section 5.02  Definitions      SEE ADDENDUM                                                      4
   Section 5.03  Other Taxes .... ...                                                               5
ARTICLE VI-CONDUCT OF BUSINESS BY TENANT
  Section 6.01  Use of Premises .......         SEE ADDENDUM                                        5
  Section 6.02  Restrictions on Use .SEE ADDENDUM                                                   5
  Section 6.03  Other Locations... ...SEE ADDENDUM                                                  8
ARTICLE VII-MAINTENANCE, REPAIRS AND ALTERATIONS
  Section 7.01  Landlord's Obligations SEE ADDENDUM                                                 9
   Section 7.02  Tenant's Obligations...SEE ADDENDUM                                                9
   Section 7.03  Alterations and Additions ..SEE ADDENDUM                                           9
   Section 7.04  Cleanliness; Waste and Nuisance     SEE ADDENDUM                                   10
   Section 7.05  Health Matters... ..SEE ADDENDUM                                                   10
ARTICLE VIII-INSURANCE; INDEMNITY                                        ........ ..
   Section 8.01  Liability Insurance-Premises.... SEE ADDENDUM                                      10
   Section 8.02  Fire Insurance-Fixtures, Equipment and Tenant  Improvements SEE
ADDENDUM                                                                                            11
   Section 8.03  Fire Insurance-Premises                                                            11
   Section 8.04  Insurance Policies.                                                                12
   Section 8.05  Waiver of Subrogation...SEE ADDENDUM                                               12
   Section 8.06  Indemnity .SEE ADDENDUM                                                            12
   Section 8.07  Exemption of Landlord ...SEE ADDENDUM                                              12
   Section 8.08  Landlord's Security                                                                13
   Section 8.09  Tenant's Security..                                                                13

ARTICLE IX-REPAIRS AND RESTORATION
   Section 9.01  Insured or Minor Damage......  SEE ADDENDUM                                        13


<PAGE>
   Section 9.02  Major Damage...               SEE ADDENDUM                                         13
   Section 9.03  Major Damage to Center..SEE ADDENDUM                                               13
   Section 9.04  Damage Near End of Term ...        SEE ADDENDUM                                    13
   Section 9.05  Abatement of Rent; Remedies for Non-Performance....                                14
   Section 9.06  Definitions  SEE ADDENDUM                                                          14

ARTICLE X-ASSIGNMENT AND SUBLETTING
  Section 10.01  Landlord's Rights        SEE ADDENDUM                                              14
  Section 10.02  No Release of Tenant..SEE ADDENDUM                                                 16

ARTICLE XI-EMINENT DOMAIN                                   ....... ...... .... ......... . ........
  Section 11.01  Entire or Substantial Taking  SEE ADDENDUM                                         17
  Section 11.02  Partial Taking...SEE ADDENDUM                                                      17
  Section 11.03  Taking of Center SEE ADDENDUM                                                      17

ARTICLE XIII-DEFAULTS AND REMEDIES
   Section 13.01  Defaults............... . . .SEE ADDENDUM                                         18
   Section 13.02  Remedies  SEE ADDENDUM                                                            19
   Section 13.03  Default By Landlord.... ... .SEE ADDENDUM                                         20
   Section 13.04  Expense of Litigation                                                             20
   Section 13.05  Holding Over...SEE ADDENDUM                                                       20
   Section 13.06  Landlord's Rights ...SEE ADDENDUM                                                 20
  Section 13.07  Lien For Rent                                                                      21
  Section 13.08  Trial Without Jury.                                                                21

ARTICLE XIV-COMMON AREAS
 Section 14.01  Definition..        SEE ADDENDUM                                                    21
  Section 14.02  Use.....            SEE ADDENDUM.........                                          21
  Section 14.03  Control by Landlord SEE ADDENDUM                                                   22
  Section 14.04  Common Area Costs....     SEE ADDENDUM                                             23
  Section 14.05  Proportionate Payment SEE ADDENDUM .................... . ..                       23

ARTICLE XV-SIGNS, LIGHTING AND ADVERTISING
   Section 15.01  Prohibited Activities ....   ... ,                                                24
   Section 15.02  Maintenance......     ...... ...                                                  24
   Section 15.03  Display Window Lighting..... .... . . ............... .. .... .                   24
   Section 15.04  Advertised Name and Address...   . ......... ............ ....... . .. .,. ..     24
   Section 15.05  Advertising Expenditures......SEE ADDENDUM ... .. .                               24
   Section 15.06  Acceptance of Center Credit Card and Gift Certificates.....                       25
   Section 15.07  Catalog Advertising ... ..SEE ADDENDUM . ......                                   25
   Section 15.08  Signs on Exterior Fascia   .  . ........... ................ ..  .............    25

ARTICLE XVI-MISCELLANEOUS  SEE ADDENDUM

   Section 16.01  Offset Statement                                                                  25


<PAGE>
   Section 16.02  Landlord's Right of Access....SEE ADDENDUM                                        26
   Section 16.03  Transfer of Landlord's Interest                                                   26
   Section 16.04  Floor Area SEE ADDENDUM                                                           26
   Section 16.05  Deposit and Financial Statements SEE ADDENDUM                                     26
   Section 16.06  Late                      .SEE ADDENDUM                                           27
   Section 16.07  Separability....SEE ADDENDUM ..                                                   27
   Section 16.08  Time of Essence.. .                                                               27
   Section 16.09  Headings.                                                                         27
   Section 16.10  Incorporation of Prior Agreements; Amendments; Counterparts                       28
   Section 16.11  Notices...SEE ADDENDUM                                                            28
   Section 16.12  Brokers.....   . ....   ............ . . .                                        28
   Section 16.13  Waivers....                                                                       28
   Section 16.14  Recording.  .SEE ADDENDUM                                                         28
   Section 16.15  Advertising and Promotional Fund SEE ADDENDUM ..... .........                     28
   Section 16.16  Liens ........  . . ............ ..............  . . .                            29
   Section 16.17  Subordination..................... ........  ...  .   .                           30
   Section I 6.18  Tenant's Authority .............. ........ . . ............................ . ...30 . .
   Section 16.19  Safety and Health ..... ........... .. . .............. .  ...................... 30
   Section 16.20  Indemnities.........  .  . ................ .   .                                 30
   Section 16.21  Non-disclosure of Lease Terms ..SEE ADDENDUM .............-....                   30
   Section 16.22  Gender, Tenants...... .                                                           30
   Section 16.23  Force Majeure.... ............ .. .. ............ . .. .........                  31
   Section 16.24  Yield Up Premises                                                                 31
   Section 16.25  Relocation of Tenant...SEE ADDENDUM . .  .........                                31
   Section 16.26  No Option...................... . .......... . . ............. . . ............   31
   Section 16.27  Landlord Liability ....... . ... ...................... .............. . .........31
   Section 16.28  Termination.........  SEE ADDENDUM                                                32
   Section 16.29  Tax Benefits                                                                      32
   Section 16.30  Accord and Satisfaction                                                           32
   Section 16.31  Financing..                                                                       32
Intentionally Deleted                                                                               33
</TABLE>

<PAGE>

EXHIBIT "A-I" -Site Plan of Center 
EXHIBIT "A-2" -Lease Plan of Premises 
EXHIBIT "B-1" -Plot Plan  Showing  Center  
EXHIBIT  "B-2" -Map Showing  Prohibited  Area
EXHIBIT "B-3" -Statement of Compliance
EXHIBIT "C" -General Description of Landlord's Work and of Tenant's Work 
EXHIBIT "D"  -Tenant  Cold Air Annual  Charge  Schedule  
EXHIBIT  "E"  -Detailed  Design Criteria and  Standards  for  Landlord's  Work 
          and for Tenant's Work 
EXHIBIT "F" -Accelerated  Building Plan Review Agreement  
EXHIBIT "G" -Rules and Regulations for South  Coast Plaza  
EXHIBIT "H"  -Location  of  Asbestos  Bearing  Materials
EXHIBIT "I" -Form of Guaranty of Tenant's  Obligations Pursuant to Lease 
EXHIBIT "J" -Illustrative Loan Amortization Schedule



<PAGE>



                                    ARTICLE I
                                    PREMISES


     PREMISES Section 1.01 SEE ADDENDUM 
     DEFINED 

     landlord  hereby  leases to Tenant and Tenant  hereby  hires from  Landlord
those certain premises (the "Premises")  located in the South Coast Plaza Retail
Center in the City of Costa Mesa,  County of Orange,  State of  California  (the
"Center"),  which  Center,  Premises and the enclosed mall on which the Premises
open (the "Enclosed  Mall") are more  particularly  depicted on Exhibits "A" and
"B" attached hereto, for the term, at the rental, and upon all of the conditions
and agreements sct forth herein; reserving to Landlord,  however, (a) the use of
the  exterior  walls,  roof,  return air plenum and the area under the  Premises
floor and (b) the  rights to make  structural  (building)  modifications  and to
install,  maintain,  use, repair and replace pipes, ducts,  conduits,  and wires
serving  other  portions of the Center  through the Premises in locations  which
will not materially interfere with Tenant's use thereof.



                                   ARTICLE II
                                      TERM

LENGTH OF   Section 2.01 SEE ADDENDUM
TERM        

     The  term of this  lease  shall be from the  Commencement  Date  determined
pursuant  to Section  

     2.02  to  and  until  the  expiration  date  specified  in  the  applicable
Fundamental  Lease  Provision,  unless  earlier  !  terminated  pursuant  to any
provision of this lease.

COMMENCE-      Section 2.02 SEE ADDENDUM
MENT DATE                      (a)
AND RENT
COMMENCE-
MENT DATE

     (b) Within thirty (30) days following the Rent Commencement Date,  Landlord
and Tenant shall execute and acknowledge a supplemental  agreement setting forth
the Commencement Date and Rent Commencement Date of this lease.  Notwithstanding
the  foregoing,  failure  of Tenant to execute  and  deliver  such  supplemental
agreement shall not affect Landlord's determination of the Commencement Date and
Rent Commencement Date in accordance with the provisions of this lease. When the
Floor Area of the  Premises is finally  determined  pursuant  to Section  16.04,
Landlord  shall  notify  Tenant in  writing  as to the final  Floor  Area of the
Premises.  

     (c) If Tenant  shall fail to complete  and open the  Premises  for business
within  sixty  (60) days after the  occurrence  of the Rent  Commencement  Date,
Landlord  shall have the option to  terminate  this  lease.  Such  option may be
exercised by written  notice from Landlord to Tenant given at any time after the
expiration of such sixty (60) day period and prior to the completion of Tenant's
work in the Premises and the opening of the Premises for  business.  If Landlord
shall be entitled to give the notice and shall give the notice  provided  for in
this  subsection,  this lease shall terminate on the tenth ( l0th) day after the
date of such notice  unless  Tenant shall  complete its work in the Premises and
open the same for business within such ten (10) day period.  If this lease shall
be terminated  pursuant to this  subsection,  Tenant shall,  within fifteen (15)
days after the date of  termination , remove from the Premises all  merchandise,
furniture, furnishings, equipment and movable trade fixtures and shall surrender
the Premises to Landlord in the condition required by Sections 7.02(c), 7.03 and
7.04.  Tenant shall, at Tenant's cost,  repair any damage to the Premises caused
by such  removal.  Any items which  Tenant is  permitted  to remove but fails to
remove  prior to the  surrender  of the  Premises  to  Landlord  shall be deemed
further obligations to the OTHER, except for those obligations set forth in this
subsection and in Sections 16.05,  16.06,  16.16,  16.20 and 16.24. In addition,
upon any termination of this lease pursuant to this  subsection,  the provisions
of Section 16.28 shall apply.

LEASE YEAR   Section 2.03
 
     A lease year is a period of twelve ( 12) full calendar months commencing on
the first day OF February  and ending on the last day of January  except that if
the  Commencement  Date occurs on a date OTHER than  February 1 there shall be a
partial  lease  year  for the  period  from  the  Commencement  Date to the next
following  January 31, both dates  inclusive,  and the last lease year,  if this
lease is  terminated  on a date OTHER than January 31, shall be a partial  lease
year for the period  beginning on February 1 following the last preceding  lease
year and ending on the termination date.


                                   ARTICLE III
                                      RENT


MINIMUM            Section 3.01  SEE ADDENDUM
RENT

     Tenant shall pay to Landlord for each full  calendar  month  following  the
Rent  Commencement  Date the monthly  Minimum Rent  specified in the  applicable
Fundamental  Lease Provision.  Minimum Rent shall be payable in advance upon the
first day of each calendar  month  without any deduction or offset.  The Minimum
Rent for any fractional  part of a calendar month at the beginning or end of the
lease term shall be a proportionate part of the Minimum Rent for a full calendar
month.  Such proration and all other prorations  pursuant to this lease shall be
made on the basis a 365 day year. *the actual number of days in such **365

COST OF
LIVING
INCREASE                   Intentionally omitted

PERCENTAGE     Section 3.03   SEE ADDENDUM
RENT              

     (a) In addition to the Minimum Rent,  Tenant shall pay to Landlord for each
lease year or partial . lease year during the Lease term,  as  Percentage  Rent,
The  percentage  specified  in the  applicable  Fundamental  Lease  Provision of
Tenant's  gross sales (as  hereinafter  defined)  for such lease year or partial
lease year in excess of the breakpoint  specified in the applicable  Fundamental
Lease Provision. Upon any adjustment 

<PAGE>
     Promptly upon Tenant's  submission  pursuant to Section 4.02(b) OF Tenant's
annual certified statement of gross sales, the parties shall make any adjustment
necessary to place the  Percentage  Rent on a lease year basis.  Any  additional
amount due from Tenant shall be paid by Tenant to Landlord with Tenant's  annual
statement  of gross sales  pursuant to Section  4.02(b) or within ten ( 10) days
after the date of Tenant's  receipt of  Landlord's  invoice  therefor if no such
annual  statement  is  furnished.  Any  refund due to Tenant  shall be  credited
against the next Percentage Rent Payable by Tenant pursuant to or, if at the end
of the term , refund to Tenant.  

     (c)(i)  The term  "gross  sales" as used  herein  means the  entire  amount
charged,  whether  wholly or partly for cash,  on credit or  otherwise,  for all
merchandise  sold,  and all  charges  made  for  services  performed  or for the
extension of credit in, at or from the Premises,  or through the substantial use
of the  Premises,  by  Tenant or anyone  acting  on  Tenant's  behalf or under a
sublease,  license or concession from Tenant,  including,  without  limiting the
generality of the foregoing,  the amount allowed upon any "trade-in," the retail
price OF any merchandise delivered on redemption of trading stamps, all deposits
not  refunded to  purchasers,  all catalog  sales at or from the  Premises,  all
direct  mail sales  made from any  location  but based  upon a list OF  Tenant's
customers at the Premises, the gross proceeds from the sale of stamps or theater
or sporting event tickets, all receipts from electronic or other video games and
from  advertising  conducted at the Premises by Tenant for others and all orders
taken in or from the Premises or which Tenant would in the normal  course OF its
operations credit or attribute to its business in the Premises, even though such
orders may be filled elsewhere, without deduction in any case for uncollected or
uncollectible credit accounts. There shall also be included in "gross sales" the
gross receipts from all mechanical,  electronic and other vending devices placed
in the  Premises  by Tenant or under  authority  from  Tenant,  OTHER  than such
devices  which are  installed in portions of the Premises not open to the public
for the convenience of Tenant's  employees,  mail or phone order sales solicited
from or returned to the Premises  and mail order or  telephone  order sales from
the  Premises  in  response  to  advertisements  using the  Premises  address or
telephone number and all sales made


<PAGE>



     by TeleVideo or other  electric or electronic  media of any type where such
media direct the sale or order to the Premises.  Gross  receipts from sales made
and orders taken in the Premises  shall be included in "gross sales" even though
the account may be transferred  elsewhere for collection and though the delivery
of merchandise sold or the performance of services ordered may be made elsewhere
than at the Premises.  Every  transaction  on a deferred  payment basis shall be
treated  as a sale for the full  price at the time such  transaction  is entered
into,  irrespective of the time for payment or the time when title passes.  

     (ii) The term  "gross  sales" as used  herein  shall not  include  (or,  if
included, there shall be deducted to the extent of such inclusion) the amount of
any cash or credit refund in fact made upon sales from the  Premises,  where the
merchandise  sold or some part thereof is returned by the purchaser and accepted
by Tenant, nor exchanges and transfers of merchandise  between stores of Tenant,
where made solely for the  convenient  operation  of Tenant's  business  and not
having the effect of  consummating  a sale made or which would have been made at
the Premises, nor returns to shippers or manufacturers, nor sales of fixtures or
equipment after their substantial use in the conduct of Tenant's business in the
Premises,  nor the amount OF any sales, luxury or excise taxes on sales from the
Premises,  where  such taxes are both added to the  selling  price (or  absorbed
therein) and paid to the taxing  authorities by Tenant (but not by any vendor of
Tenant).  

     (iii) If Tenant's  gross sales are  required to be reported on any federal,
state or municipal  sales tax return or any other  similar  form of return,  and
gross sales as so reported on any of said  returns  shall exceed the gross sales
as reported by Tenant,  as herein  provided,  then gross sales shall be taken at
the highest figure so reported. If any governmental authority shall increase the
gross  sales  reported by Tenant on any such tax return,  after  audit,  for any
lease year or partial lease year for which such sales have been  reported,  then
Tenant shall notify  Landlord  promptly of such increase and pay any  additional
Percentage Rent due at that time. For purposes of this subparagraph, gross sales
shall  mean,  if Tenant  reports  sales from more than one  location on any such
return, only that portion of the gross sales reported as relate to the Premises.


<PAGE>
     Moreover, for all purposes pursuant to this paragraph, gross sales shall be
adjusted to the lease definition OF gross sales.

RENT           Section 3.04
DEFINED 

     As used in this lease, the term "rent" shall mean Minimum Rent,  Percentage
Rent and additional rent, and the term "additional  rent" shall mean all amounts
payable by Tenant to Landlord pursuant to this lease other than Minimum Rent and
Percentage  Rent. All Minimum Rent,  Parentage Rent and additional rent shall be
paid in lawful  money of the United  States  which shall be legal  tender at the
time of payment.  Where no other time is stated  herein for payment,  payment of
any amount due from Tenant to Landlord  hereunder shall be made within ten ( 10)
days after Tenant's receipt of Landlord's invoice or statement therefor.

<PAGE>
                                   ARTICLE IV
                        RECORDS, REPORTS AND ACCOUNTING


     in a cash register or registers  containing locked-in cumulative tapes with
cumulation  capacity  satisfactory  to  Landlord  and the  capacity  to identify
individual sales by method of payment (cash, check or credit card). Tenant shall
keep all pertinent original sales books and records, which records shall include
(a) daily dated register tapes; (b) serially  numbered sales slips; (c) mail and
catalog  orders;   (d)  telephone  orders;   (e)  settlement  report  sheets  of
transactions with sublessees, concessionaires and licences; (|^| records showing
That  merchandise  returned by customers was  purchased by such  customers at or
from the Premises; (g) receipts or OTHER records of merchandise leased, licensed
or taken out on approval;  (h) duplicate bank deposit slips and bank statements;
(i) such other records as would  normally be required to be kept and examined by
an  independent  accountant in accordance  with accepted  auditing  practices in
performing  an audit of Tenant's  gross  sales;  and (j) all  income,  sales and
occupation  tax returns.  ln addition to  Landlord's  audit  rights  pursuant to
Section 4.03,  Landlord may  periodically  conduct  on-Premises  observations to
confirm compliance by Tenant with this Section.


STATEMENTS        Section 4.02
OF GROSS   

     (a) Tenant shall submit to Landlord,  on or before  fifteenth (15th) day of
each month,  a SALES written  statement  showing in reasonable  detail the gross
sales in, at or from the Premises for the preceding calendar month.  

     (b) Tenant shall submit to Landlord, on or before following the end of each
lease year or partial  lease year,  a written  statement  certified by the chief
financial  officer OF Tenant showing in reasonable detail the gross sales in, at
or from the Premises for such  preceding  lease year or partial lease year.  

     (c) All statements pursuant to this Section shall be in such form and shall
contain such information as Landlord reasonably  determines.  Each certification
shall be  satisfactoryto  Landlord in scope and  substance  and shall be without
qualification except as expressly permitted by Landlord.

AUDIT             Section 4.03  SEE ADDENDUM
                     
     (a)The  acceptance  by Landlord of  payments  of  Percentage  Rent shall be
without  prejudice to Landlord's  right to an  examination of Tenant's books and
records of its gross sales and  inventories  OF  merchandise  in the Premises in
order to verify the amount of Tenant's gross sales.  

     (b) At any reasonable  time, and upon five (5) days prior written notice to
Tenant,  Landlord  may cause a special  audit to be made of Tenant's and records
relating to the Premises for the period covered by any annual statement of gross
sales.  Except as provided in (c) below, the cost of such audit shall be paid by
Landlord.  Any such special  audit  performed by a certified  public  accountant
selected  by  Landlord  shall be binding  upon the  parties.  

     (c) lf it shall be determined as a result of such audit that there has been
a deficiency  in the payment of  Percentage  Rent,  then such  deficiency  shall
become  immediately  due  and  payable  with  interest  at the  rate  per  annum
determiner pursuant to Section 16.06 from the date when such payment should have
been made. If the aforementioned  deficiency is in excess of two percent (2%) OF
the  Percentage  Rent  theretofore  ~ computed and paid by Tenant for the period
covered by the audit,  Tenant  shall also pay to Landlord the cost OF the audit.
If Tenant is  permitted  by  Landlord to  maintain  its books and  records  with
respect to the Premises  outside of Orange County,  California,  then the phrase
"cost of the audit"  shall  include  the  reasonable  travel,  meal and  lodging
expenses of Landlord's auditor(s). *books 

                                    ARTICLE V
                                      TAXES

REAL section 5.01  
PROPERTY  
TAXES 

     Tenant  shall pay, at the time and in the manner  specified in Article XIV,
Tenant's  proportionate  TO share of all real property  taxes  applicable to the
Center, including the common areas thereof. Tenant's proportionate share of such
real property  taxes shall be determined  pursuant to Sections  14.04 and 14.05.
For the purposes of this Article and Article XIV, real  property  taxes shall be
considered to be common area costs.

DEFINITIONS       Section 5.02   SEE ADDENDUM

     (a)  The  term  "real  property  taxes"  shall  include:   

     (i) All taxes,  assessments and governmental  charges and surcharges levied
upon  or  with  respect
 
     tax levied by the state, any political  subdivision thereof, or the federal
government with respect to the receipt of such rent; (B) upon or with respect to
the possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy of the Premises or any portion  thereof,  including  any sales,
use or service tax imposed as a result thereof; (C) upon or measured by Tenant's
gross  receipts  or  payroll  or the  value of  Tenant's  equipment,  furniture,
fixtures,  and other  personal  property  of Tenant or  leasehold  improvements,
alterations or additions  located in the Premises;  or (D) upon this transaction
or any document to which Tenant is a party creating or  transferring an interest
or an  estate in the  Premises;  and 

     (v) All expenses  reasonably  incurred by Landlord in seeking  induction by
the taxing authorities OF the taxes described in clauses (i) through (iv) above.
Provided,  however,  that the term "real  property  taxes" shall not include any
franchise, estate, inheritance,  succession,  capital levy, net income or excess
profits taxes imposed upon Landlord  except that in the event that real property
taxes are withdrawn in whole or in part and any substitute tax is made therefor,
such tax shall in any event for the  purpose of this lease be  considered  a tax
included in "real property  taxes"  pursuant to this Section 5.02  regardless of
bow denominated or the source from which it is collected.

     (b) For the purposes of this Section,  real property taxes which are levied
on a fiscal year basis shall be deemed to apply  one-twelfth ( 1 / 12th) to each
calendar month in such fiscal year.

OTHER TAXES   Section 5.03
            
     Tenant  shall be  responsible  for and shall  pay  before  delinquency  all
municipal, county, state or federal taxes, levies, assessments and fees of every
kind and nature,  including  but not limited to general or special  assessments,
assessed during the term of this lease against any leasehold interest, leasehold
improvements  or  personal  property  of any kind owned by or placed in, upon or
about  the  Premises  by  Tenant  or upon  Tenant's  business  operation  in the
Premises.  When  possible,  Tenant shall cause such personal  property and OTHER
items to be assessed and billed separately from the Premises and the Center.

                                   ARTICLE VI
                          CONDUCT OF BUSINESS BY TENANT

USE OF         Section 6.01 SEE ADDENDUM
PREMISES       

     (a)  Tenant  shall use the  Premises  solely for the use  specified  in the
applicable  Fundamental  Lease  Provision.  Tenant shall use the Premises solely
under the trade name specified in the applicable Fundamental Lease Provision and
for no other purpose and under no other trade name whatsoever  without the prior
written  consent of Landlord.  Tenant  shall devote the entire  Premises to such
use,  except for areas  reasonably  required  for  office or storage  space uses
limited  to the  business  conducted  by Tenant in the  Premises.  Tenant  shall
continuously  and  uninterruptedly  during the term hereof  conduct its business
activity in the Premises  during all business  hours usual for Tenant's  type of
business,  but in any  event  during  those  minimum  hours  from  time  to time
established  by Landlord for the Center,  which- may, at the option OF Landlord,
include  Sundays,  unless Tenant is prevented  from doing so by strike,  fire or
other cause beyond Tenant's reasonable  control.  Failure of any other tenant of
the  Center,  with or without the  consent OF  Landlord,  to observe the minimum
hours of  operation  established  by Landlord  for the Center  shall not relieve
Tenant of its obligation to observe such minimum hours or prevent  Landlord from
requiring Tenant to observe such minimum hours.  Tenant shall at all times carry
stock of merchandise  offend for sale and  shall-maintain  an adequate staff for
the service of its customers.  Tenant shall employ its best judgment, charts and
abilities to operate the business conducted by it in the Premises in such manner
as to produce the maximum  profitable volume of sales reasonably  obtainable and
to enhance the  reputation and  attractiveness  of the Center.  Nothing  herein,
however,  shall be deemed to give Landlord any right of consent or approval with
respect  to the  prices  charged by  Tenant.  

     (b) For the purpose of computing  Percentage Rent, Tenant's gross sales for
any period during 

RESTRICTIONS Section 6.02 SEE ADDENDUM
ON USE 

     (a) Tenant shall comply promptly with all applicable statutes,  ordinances,
rules, regulations,  orders and requirements regulating the use by Tenant of the
Premises  and  all  requirements  of  all  insurance  carriers  or  underwriters
providing coverage on the Center,  the Premises or the contents thereof.  Tenant
shall,  at Tenant's  expense,  procure  any and all  governmental  licenses  and
permits  required  for Tenant's  permitted  use of the Premises and shall at all
times comply with all requirements of each such license or permit.  Tenant shall
not use or permit the use of the Premises in any manner That will tend to create
a nuisance,  create an  ultra-hazardous  use,  tend to disturb  other tenants or
occupants of the Center,  tend to injure the  reputation  OF the Center or which
will  invalidate  any  insurance  maintained  on the Premises or the Center.  No
auction,  fire sale, bankruptcy sale, sidewalk sale, end of lease sale, or going
out of business sale may be conducted in the Premises,  nor shall Tenant use any
form of  advertising  for any such sale,  without the prior  written  consent OF
landlord,  which may be withheld in Landlord's  sole  discretion.  Any such sale
shall comply with any  reasonable  conditions  established  by  landlord,  which
conditions  shall not  include  pricing.  Tenant  shall use its best  efforts to
complete or cause to be completed all deliveries,  loading,  unloading,  rubbish
removal,  and other services to the Premises prior to 10:00 a.m. of each day and
shall not permit loading,  unloading or parking of delivery vehicles in areas of
the Center other than those  designated by Landlord for such  purpose.  Landlord
reserves  the right to further  regulate the  activities  of Tenant in regard to
deliveries  and  servicing of the  Premises,  and Tenant agrees to abide by such
further  nondiscriminatory  regulations of Landlord.  

     (b)  Tenant  shall  comply  at all times  with the  Rules  and  Regulations
attached  to this lease as Exhibit  "G" and such  amendments  and  modifications
thereof and additions  thereto as Landlord may from time to time  reasonably for
the safety, care and cleanliness of the Center or the preservation of good order
therein. Landlord shall not be liable to Tenant for the failure of any tenant or
other person to comply with such Rules and Regulations. 

     (c) Without  limiting the generality of the foregoing  provisions of t|^|'s
Section,  Tenant  covenants  and agrees  that  Tenant,  its  employees,  agents,
contractors  and  other  third  parties  shall not bring  into,  maintain  upon,
generate,  use, store, dispose of or release or discharge in or about the Center
any hazardous or toxic substances or hazardous waste  (collectively,  "hazardous
materials").  The foregoing  covenant  shall not extend to substances  typically
found


<PAGE>



     or used in general retail  applications  so long as (i) such substances and
any equipment  which  generates  such  substances  are  maintained  only in such
quantities as are reasonably  necessary for Tenant's  operation in the Premises,
(ii) such  substances  are used strictly in accordance  with the  manufacturers'
instructions  therefore,  (iii) such  substances are not disposed of in or about
the Center in a manner which would constitute a release or discharge thereof and
(iv) all such  substances and any equipment  which generates such substances arc
removed from the Center by Tenant upon the expiration or earlier  termination of
this lease.  Any use,  storage,  generation,  disposal,  release or discharge by
Tenant of hazardous materials in or about the Center as is permitted pursuant to
this paragraph shall be carried out in compliance  with all applicable  federal,
state and local laws, ordinances, rules and regulations.  Moreover, no hazardous
waste  resulting  from any operations by Tenant shall be stored or maintained by
Tenant in or about the Center for more than ninety (90) days prior to removal by
Tenant. Tenant shall, annually within thirty (30) days after Tenant's receipt of
Landlord's  written  request  therefore,  provide  to  Landlord  a written  list
identifying any hazardous materials then maintained by Tenant in the Center, the
use of each such hazardous  material and the  approximate  quantity of each such
hazardous material so maintained by Tenant,  together with written certification
by Tenant  stating,  in substance,  that neither  Tenant nor any person for whom
Tenant is responsible  has released or discharged any hazardous  materials in or
about the  Center.  

     In the event that  Tenant  proposes  to conduct  any use or to operate  any
equipment which will or may utilize or generate a hazardous  material other than
as specified in the first  paragraph of this  subsection,  Tenant shall first in
writing  submit such use or equipment to Landlord for  approval.  No approval by
Landlord  shall  relieve  Tenant of any  obligation  of Tenant  pursuant to this
subsection,  including  the removal,  clean-up and  indemnification  obligations
imposed upon Tenant by this subsection. Tenant shall, within five (5) days after
receipt   thereof,   furnish  to  Landlord   copies  of  all  notices  or  other
communications  received by Tenant with respect to any actual or alleged release
or discharge of any hazardous material in or about


<PAGE>



     the  Premises or the Center and shall,  whether or not Tenant  receives any
such notice or  communication,  notify  Landlord in writing of any  discharge or
release of hazardous material by Tenant or anyone for whom Tenant is responsible
in or about the Premises or the Center.  In the event that Tenant is required to
maintain any hazardous  materials  license or permit in connection  with any use
conducted by Tenant or any equipment operated by Tenant in the Premises,  copies
of each such  license or permit,  each  renewal or  revocation  thereof  and any
communication  relating to  suspension,  renewal or revocation  thereof shall be
furnished  to  Landlord  within five (5) days after  receipt  thereof by Tenant.
Compliance  by Tenant with the two  immediately  preceding  sentences  shall not
relieve Tenant of any other  obligation of Tenant  pursuant to this  subsection.


     Upon any violation of the foregoing  covenants,  Tenant shall be obligated,
at  Tenant's  sole cost,  to clean-up  and remove from the Center all  hazardous
materials  introduced into the Center by Tenant or any person or entity for whom
Tenant is responsible. Such clean-up and removal shall include all testing and 
investigation  required by any governmental  authorities having jurisdiction and
preparation and implementation  

     hazardous materials in or about the Center, (C) the discharge or release in
or about the Center by Tenant or anyone for whom  Tenant is  responsible  of any
hazardous  materials,  (D) any  injury  to or death of  persons  or damage to or
destruction  of  property  resulting  from the use,  introduction,  maintenance,
storage, generation,  disposal,  disposition,  release or discharge by Tenant or
anyone for whom Tenant is  responsible  of  hazardous  materials in or about the
Center,  and (E) any failure of Tenant or anyone for whom Tenant is  responsible
to observe the foregoing covenants of this subsection. 

     Upon any violation of the foregoing  covenants,  Landlord shall be entitled
to exercise all remedies  available to a landlord  against a defaulting  tenant,
including but not limited to those set forth in Article XIII.  Without  limiting
the  generality of the  foregoing,  Tenant  expressly  agrees that upon any such
violation Landlord may, at its option,  (I) immediately  terminate this lease or
(II) continue this lease in effect until  compliance by Tenant with its clean-up
and removal covenant  notwithstanding any earlier expiration date of the term OF
this lease.  No action by Landlord  hereunder  shall impair the  obligations  of
Tenant  pursuant  to this  subsection.  

     As  used  in  this  subsection,   "hazardous   materials"  shall  petroleum
substances and all hazardous materials,  hazardous wastes and hazardous or toxic
substances as defined in the Comprehensive Environmental Response,  Compensation
and  Liability  Act of 1980,  as amended  (42 U.S.C.  (0)(0)9601  et seq.),  the
Resource  Conservation  and Recovery  Act, as amended (42 U.S.C.  (0)(0)6901  et
seq.),  the Toxic Substances  Control Act, as amended ( 15 U.S.C.  (0)(0)2601 et
seq.) and  California  Health and Safety  Code  Section  25316,  including  such
hazardous  or toxic  substances  or waste as are  identified,  defined or listed
elsewhere where such identifications, definitions or lists arc incorporated into
such acts or section  by  reference,  as well as all  products  containing  such
hazardous substances.

     (d) PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 25915.5, LANDLORD
HEREBY NOTIFIES  TENANT THAT LANDLORD HAS HAD AN ASBESTOS SURVEY  PERFORMED WITH
RESPECT TO THE CENTER AND THAT ASBESTOS-BEARING MATERIALS ARE LOCATED IN PHASE I
OF THE CENTER.  DETAILED  INFORMATION  AS TO SUCH  SURVEY,THE  LOCATIONS OF SUCH
MATERIALS,  ABATEMENT EFFORTS BEING CONDUCTED BY LAND- LORD AND PROCEDURES TAKEN
TO AVOID  RELEASE OF SUCH  MATERIALS  IS SET FORTH IN EXHIBIT "C," AND TENANT IS
DIRECTED TO SUCH EXHIBIT FOR SUCH  INFORMATION,  FOR CERTAIN  INFORMATION  AS TO
POTENTIAL HEALTH RISKS RESULTING FROM EXPOSURE TO SUCH MATERIALS AND FOR CERTAIN
NOTICE  REQUIREMENTS  APPLICABLE  TO TENANT WITH  RESPECT TO ITS  EMPLOYEES  AND
CONTRACTORS.   

     (e) Tenant  acknowledges  that  incorporation  of any  material  containing
asbestos  into the  Premises,  or any portion of Tenant's  World,  is absolutely
prohibited. Tenant agrees, represents and warrants that it shall not incorporate
or permit or suffer to be incorporated,  knowingly or unknowingly,  any material
containing asbestos into the Premises or Tenant's Work. 

*mean



<PAGE>

OTHER        Section 6.SEE ADDENDUM
LOCATIONS

     (a)  Neither  Tenant nor any parent,  affiliate  or  subsidiary  of Tenant,
directly or indirectly,  shall operate, manage or have any interest in any other
competing store,  including a concession in another story, within the prohibited
area.  The  prohibited  area shall be: 

     (i) That area  located  within an eight (8) mile  radius  outward  from the
outside  boundary OF the Center;  and 

     (ii) That area located  within a corridor  extending  ten ( 10) miles along
the San  Diego  Freeway  in  either  direction  from  the  center  point  of the
intersection of Bristol Street and the San Diego Freeway and extending three (3)
miles from the center  line of the San Diego  Freeway on either  side.  

     Provided however, that the foregoing restriction shall not be applicable to
and the prohibited areas shall not include the area west of Beach Boulevard (and
any  extensions  thereof)  or north of  Westminster  Avenue  (or any  extensions
thereon.  Tenant and Landlord  acknowledge  that the  foregoing  restriction  is
reasonable  in light of Tenant's  ability to draw  clientele  as a result of its
reputation  for providing  quality  goods and services,  and Tenant and Landlord
further  acknowledge  that  the  prohibited  area  reasonably  approximates  the
geographic area of Tenant's anticipated  clientele.  Attached hereto as Exhibits
"B-I"  and  "B-2"  arc  illustrations  depicting,   respectively,   the  outside
boundaries  of  the  Center  and  the  prohibited  area.  

     (b) Without  limiting  Landlord's  remedies,  if Tenant should  violate the
covenant  contained in this Section,  Landlord  may, at its option,  include the
gross  sales  of such  competing  store in the  gross  sales  transacted  in the
Premises for the purpose of computing  Percentage Rent due hereunder,  as though
said sales had actually been made from the Premises.  If Landlord so elects, all
the  provisions  of  Article  IV  hereof  shall  be  applicable  to all  records
pertaining to such  competing  story or business.  However,  any such  competing
store or  business  existing  as of the date of this  lease may  continue  to be
operated, managed, conducted and owned in the same manner as on the date of this
lease.  

     (c) For the purpose of this Section:  

     (i) A "parent" OF Tenant  shall be any person or entity who or which holds,
directly  or  indirectly,  a majority  of the  outstanding  voting  rights in or
profits and loss  interests  in Tenant;  a  "subsidiary"  OF Tenant shall be any
entity as to which  Tenant  bolds,  directly  or  indirectly,  a majority of the
outstanding voting rights in or profit and loss interests of such entity; and an
"affiliate"  shall be any officer,  director or general  partner of Tenant,  any
franchisee  or licensee of Tenant or any parent or  subsidiary  of Tenant or any
other affiliate of Tenant, any subsidiary of any parent of Tenant, and if Tenant
is a natural person,  any spouse,  sibling or first generation lineal descendant
of Tenant. 

     (ii) All  distances  shall be  measured  on a straight  line  rather than a
driving  distance  basis.  In the event that any  portion of a retail  center is
located within a prohibited area described herein the entire retail center shall
be deemed to be located within such prohibited area.  

     (iii)  A  "competing  store"  shall  be  any  store  operation,  retail  or
wholesale,  conducted  under the same trade name then in use at the  Premises or
conducted  under a different  trade name but  offering for sale  merchandise  or
services which are  substantially  similar to or the same as the  merchandise or
services  offered  for sale at the  Premises.  

     (iv)  Nothing  contained  in this  Section  6.03 or elsewhere in this lease
shall be deemed or construed to prevent or restrict Landlord in leasing space in
the Center or in any other center owned by landlord or any affiliate of Landlord
to other  tenants,  including  one or more tenants who may, in whole or in part,
compete with Tenant at the Center.  In addition,  nothing in this lease shall be
deemed or construed to  constitute  a warranty or  commitment  by Landlord as to
(and Landlord  does not warrant or commit that there will occur) any  particular
level of  pedestrian  traffic  at the  Center,  any  particular  level of tenant
occupancy or any particular  tenant mix at the Center.  

     (d)  Tenant  acknowledges  that  Tenant's  continuing  compliance  with the
obligations of this Section 6.03 constitutes a material  economic  consideration
for Landlord's agreement to enter into this lease. As a further consideration to
Landlord,  Tenant agrees to confirm its continued  compliance  with this Section
6.03 on an annual basis by executing  and  delivering to Landlord a Statement of
Compliance in substantially the form of Exhibit "B-3" to this lease,  within ten
(10) days after Tenant's receipt of Landlord's written request therefor.

<PAGE>
     (e) By its execution of this lease, Tenant represents and warrants that the
execution and delivery by Tenant hereof upon the terms described herein will not
violate the terms and  provisions of any agreement to which Tenant is a party or
by which Tenant or any of its properties are bound, including without limitation
the provisions of any radius  restriction or other  prohibition or limitation on
locations of Tenant's stores.


                                   ARTICLE VII
                      MAINTENANCE, REPAIRS AND ALTERATIONS


LANDLORD'S        Section 7.01 SEE ADDENDUM
OBLIGATIONS 

     Subject to the  provisions  of  Articles IX and XI hereof,  Landlord  shall
during the term of this lease keep in  first-class  order,  condition and repair
the  foundations,  the interior and  exterior  surfaces o exterior  walls of the
Center (excluding the interior surfaces of exterior walls of premises, including
the Premises,  leased to tenants),  all windows, door, plate glass and showcases
of the Center (excluding  windows doors, plate glass and showcases located in o:
comprising  a part of  premises,  including  the  Premises,  leased to tenants),
downspouts,  gutter and roofs of the buildings  constituting the Center,  except
for any damage  thereto caused by any negligent act or omission of Tenant or its
agents,  employees,  and except for reasonable wear and tear,  provided however,
that Landlord  shall have no obligation to repair until a reasonable  time after
receipt by  Landlord of written  notice of the need for  repairs,  which  notice
Tenant shall give Landlord  promptly when Tenant determines any such repairs are
required.  Tenant  waives the  provisions to any law  permitting  Tenant to make
repairs at Landlord's  expense.  

     Landlord's  costs and expenses for the  foregoing  maintenance  and repair,
excluding  partial  or  complete  restoration   necessitated  by  casualty,  but
including  Landlord's  cost of the insurance  provided  pursuant to Section 8.03
hereof and any  deductible  or reserve to be paid by  Landlord in the event of a
casualty,  shall be  included in common area  expenses  reimbursed  by Tenant to
Landlord pursuant to Article XIV of this lease.


TENANT'S           Section 7.02 SEE ADDENDUM
OBLIGATIONS          

     (a)  Subject to the  provisions  of  Articles  IX and XI hereof and Section
7.01,  Tenant  shall  during the term of this lease keep in  first-class  order,
condition  and repair the Premises and every part  thereof,  including,  without
limiting  the  generality  of  the   foregoing,   all  plumbing,   hating,   air
conditioning,  ventilating,  electrical  and lighting  facilities  and equipment
within the Premises, fixtures, interior


<PAGE>

     walls and interior surfaces OF exterior walls,  ceilings,  floors and floor
coverings,  windows,  doom,  plate glass,  showcases,  skylights,  entrances and
vestibules located within the Premises.  Tenant shall paint all painted surfaces
and treat all  architectural  finishes  as often as may be  required to maintain
such  surfaces and finishes in a first class  condition.  

     (b) If Tenant fails to perform its  obligations  under this  Section  7.02,
Landlord may at its option,  after five (5) days written notice to Tenant, enter
upon the Premises and put the same in good order,  condition  and repair and the
cost  thereof  shall  become  due and  payable as  additional  rent by Tenant to
Landlord upon demand.  

     (c) On the last  day of the  term  hereof,  or on any  sooner  termination,
Tenant shall  surrender the Premises to Landlord in good  condition,  reasonable
wear and tear,  damage by fire,  the  elements  or any OTHER  cause  beyond  the
control of Tenant and for which this lease is terminated  pursuant to Article IX
excepted.


ALTERATIONS     Section 7.03 SEE ADDENDUM
 AND              
ADDITIONS
       
     (a) Tenant shall not,  without the prior written consent of Landlord,  make
any alterations improvements,  remodeling or additions to either the interior or
exterior of the Premises or to fixtures  installed  therein in  accordance  with
approved fixture plans, or mark,  paint,  drill or in any way deface any portion
OF the Premises. All alterations, improvements, remodeling or additions shall be
subject to the provisions OF Sections 6.02 and 16.16,  Article XVII and Exhibits
"C" and "E" hereto. 

     (b) All alterations, improvements, remodeling, additions or fixtures, OTHER
than trade fixtures not permanently  affixed to the Premises,  which may be made
or  installed  in the  Premises  and which are  attached to the floor,  walls or
ceiling of the  Premises and any floor  covering  which is cemented or otherwise
affixed to the floor of the Premises shall be the property of Landlord and shall
remain upon and be  surrendered  with the  Premises at the  termination  of this
lease,  unless  Landlord  shall direct  Tenant to remove such items,  or some of
them, by written  notice given to Tenant not less than thirty (30) days prior to
the  expiration  OF this  lease or  within  ten ( 10)  days  after  the  earlier
termination  hereof.  As such  alterations,  additions  or  improvements  shall,
however,  be made by Tenant at Tenant's  sole  expense.  Tenant shall remove any
items which Tenant is permitted or required to remove,  at Tenant's cost,  prior
to the expiration of this lease, or in the event of an early termination, within
fifteen (15) days after Landlord's notice.

CLEANLINESS;   Section 7.04
NUISANCE                            

     Tenant shall keep the  Premises at all times in a neat,  clean and sanitary
condition,  shall neither commit nor permit any waste or nuisance  thereon,  and
shall keep the walks and corridors  adjacent thereto free from Tenant's waste or
debris.

HEALTH         Section 7.05  SEE ADDENDUM
MATTERS

     If  Tenant's  permitted  use of the  Premises  pursuant  to the  applicable
Fundamental  Lease Provision  includes the sale or preparation of food, then the
following provisions shall apply.  Further, the last two sentences of subsection

     (a), the last two sentences of subsection (b) and subsections (c), (d), (e)
and (|^| shall  apply to all  tenants  other than those  involved in the sale or
preparation  of food:  (a) Tenant  shall,  at its own cost,  retain a  licensed,
bonded  professional pest and sanitation control service to perform  inspections
of the  Premises  not less  frequently  than once each  thirty (30) days for the
purpose of eliminating  infestations by and controlling the presence of insects,
rodents and vermin and shall promptly cause any corrective or extermination work
recommenced  by such  service  to be  performed.  Such work  shall be  performed
pursuant  to a  written  contract,  and a copy  thereof  shall be  delivered  to
Landlord by Tenant upon demand. If Tenant fails to perform its obligations under
this Section  7.05,  Landlord may, at its option and after five (5) days written
notice to Tenant,  cause  such  inspection  to be  performed  and any  necessary
corrective or extermination work which is recommended to be done and the cost of
such  inspection and corrective or  extermination  work shall be additional rent
payable  upon demand.  In  addition,  Landlord may elect to provide the services
specified in this  subsection to tenants other than those engaged in the sale or
preparation of food. In such event, the cost of providing such services shall be
included  in the common  area costs  pursuant  to Article  XIV  charged to those
tenants for whom Landlord provides such services.
                        

     (b) Tenant acknowledges that Health Department  requirements and Landlord's
construction requirements may require that Tenant (i) enlarge the sanitary sewer
line from the  Premises to the main sewer line and (ii) install a grease trap in
the sanitary sewer line of the Premises.  Tenant  acknowledges that it shall, if
required and as a part of Tenant's Work  pursuant to Article XVII,  enlarge such
sewer line and  install  such  grease  trap and  shall,  during the term of this
lease,  clean and  maintain  such grease trap as a part of Tenant's  obligations
pursuant  to  Section  7.02 in such  manner  as may be  required  by the  Health
Department,  OTHER  governmental  authorities  having  jurisdiction or Landlord.
Moreover,  all exhaust hoods, ducts and mechanical equipment shall be inspected,
cleaned and maintained not less frequently  than  quarterly.  Such work shall be
performed by a licensed,  bonded  professional  maintenance company retained and
paid for by Tenant,  and a copy of the report  prepared by such company shall be
delivered  to Landlord  upon  completion.  

     (c) Tenant shall store all waste and garbage in a refrigerated  or cool and
dry  location  within the  Premises  and shall  dispose of all waste and garbage
(including  wet  garbage  and food) only in trash  containers  placed in service
areas by Landlord for such  purpose.  All liquids  shall be disposed of into the
sanitary  sewer line and not in Landlord's  trash  containers.  Tenant shall not
accumulate or permit such materials to accumulate in hallways, service corridors
or other common areas. Any waste or garbage, and any food deliveries,  stored or
accumulated  by Tenant  outside of the Premises  (OTHER than  garbage  placed in
Center trash  containers) may be removed  immediately by Landlord without notice
to Tenant.  

     (d)  Without  limiting  any other  obligation  of Tenant  pursuant  to this
Section,   Tenant  shall  comply  with  all   governmental   laws,   ordinances,
regulations,  guidelines  and rules and with all voluntary  programs  adopted by
Landlord now or hereafter applicable to the Premises with respect to disposal of
water,  trash,  garbage and other matter (liquid or solid)  generated by Tenant,
including but not limited to laws , ordinances,  regulations,  guidelines, rules
and voluntary  programs with respect to recycling and other forms OF reclamation
(collectively, "Waste Management Requirements").  Tenant's obligations hereunder
shall include compliance with all rules and regulations  established by Landlord
from time to time to comply  with  governmental  Waste  Management  Requirements
applicable  to  Landlord  (i) as owner of the  Premises  and (ii) in  performing
Landlord's obligations under this lease, if any. Tenant's obligations under this
subsection shall survive the expiration or earlier termination of this lease.

     (e) Tenant shall comply with all Health  Department and other  governmental
rules and  regulations  applicable  to Tenant's  operations  in the Premises and
shall  promptly (i) furnish or cause to be  furnished to Landlord  copies of all
Health Department and other governmental  reports,  notices and citations issued
with  respect  to  the  Premises  and  (ii)  cure  or  otherwise  eliminate  all
deficiencies   and  violations   noted  by  the  Health   Department  and  other
governmental   authorities  and  take  all  required   actions  to  prevent  the
reoccurrence  OF such  deficiencies  and  violations.  

     (f) Failure of Tenant to perform any obligation pursuant to subsections (a)
through  (c) above  shall be deemed an event of default  pursuant  to this lease
entitling  Landlord to exercise all remedies  available to a Landlord  against a
defaulting tenant, including those provided for in Article XIII of this lease.

<PAGE>
                                  ARTICLE VIII
                              INSURANCE; INDEMNITY


     (b) Comprehensive  Genera!  Liability Insurance with an aggregate liability
amount not less than $3,000,000 combined single limit for both bodily injury and
property damage,  including blanket  contractual  liability  (including Tenant's
indemnification  obligation  under Section  8.06),  broad form property  damage,
personal injury,  completed  operations,  products liability,  |^||^|, owned and
non-owned automobile coverage and acts or omissions of any security guards hired
by Tenant.  At least $ 1,000,000 of such coverage shall be provided by a primary
liability  policy,  and any balance  may be  provided  by a  so-called  umbrella
policy.  The  liability  insurance  policy  required to be  maintained by Tenant
pursuant to this  subsection  shall be on an  occurrence  (as opposed to a claim
made) basis.  Further, if such policy has an aggregate liability limit, not less
than  $1,000,000  of  such  limit  per  annum  shall  be  available  for  claims
originating  at the  Premises.  

     The minimum limit of the coverage  provided in subsection  (b) above may be
adjusted  upward or downward at the expiration of each third (3rd) lease year as
follows:  Not less than sixty (60) days prior to the relevant  adjustment  date,
Landlord may request such insurance  brokerage firm as is then placing insurance
for  Landlord  (the  "Reviewing  Broker"),  to  review  Tenant's  then  existing
liability  insurance  coverage,  to review |^|e then use of the Premises and the
claims history with respect thereto and to recommend,  in writing, the amount of
coverage to be carried by Tenant pursuant to subsection (b). Such recommendation
shall be based upon the use of the Premises  and the  liability  claims  history
with respect to the Premises  and shall be  consistent  with amounts of coverage
generally  recommenced by such Reviewing  Broker for similar types of tenants or
users of property with uses similar to that of the Premises in the  geographical
area which  includes the Premises.  If the Reviewing  Broker shall  recommend an
increase in the amount of coverage then provided by Tenant under subsection (b),
Tenant shall promptly  increase its coverage to the  recommended  amount.  In no
event shall there be any reduction in the amount of coverage  provided by Tenant
under subsection (b) below the initial amount set forth herein,  notwithstanding
any  recommendation  by the Reviewing  Broker.

     Landlord,  and any other  persons  designated  by  landlord  and  having an
insurable  interest  in the  Premises,  shall be added  as  additional  insureds
pursuant  to such  policies  (although  they shall not have any  obligations  of
"named" insureds  therein).  The insurance required by this Section shall be the
primary  insurance  as  respects  Landlord  (and any other  additional  insureds
designated by Landlord) and not contributory with any other available insurance.
The policy or policies  providing the coverage  required by subsection (b) above
shall contain an endorsement providing, in substance, that "such insurance as is
afforded  hereby  for the  benefit  of  [Landlord  and any  additional  insureds
designated by Landlord] shall be primary and any insurance  carried by [Landlord
and any additional  insureds designated by Landlord) shall not be contributory."
In addition, such policy shall contain a cross-liability endorsement in favor of
the additional insureds. In no event shall the limits of any coverage maintained
by Tenant  pursuant to this Section be  considered  as limiting the liability of
Tenant pursuant to this lease.

FIRE               Section 8.02 SEE ADDENDUM
INSURANCE- 
EQUIPMENT
AND TENANT
IMPROVEMENTS

     (a)  Tenant  shall at all times  during the term  hereof,  and at its cost,
maintain in effect policies OF insurance covering (i) all tenant improvements on
or in the Premises,  providing  protection against any peril included within the
classification  "All Risk," including but not limited to insurance against fire,
windstorm,  cyclone,  tornado,  hail, explosion,  riot, riot attending a strike,
civil commotion,  aircraft,  vehicle, smoke damage, sprinkler leakage, vandalism
and malicious mischief, such insurance to be in an amount not less than the full
replacement  value of such  improvements,  which shall be determined at the time
the policy is initially obtained,  and not less frequently than once every three
(3) years thereafter, (ii) all personal property of Tenant ;located in or on the
Premises,  including  but  not  limited  to  fixtures,  furnishings,  equipment,
furniture,  inventory and stock in trade,  in an amount not less than their full
replacement  value,  providing  protection against any peril included within the
classification  "All Risk," including but not limited to insurance against fire,
sprinkler leakage,  vandalism and malicious mischief;  and (iii) all plate glass
on the  Premises,  together  with an umbrella  policy to provide  any  liability
coverage  not included  under  Tenant's  primary  liability  policy  pursuant to
Section 8.01.  The insurance  required by this  subsection  shall be the primary
insurance with respect to the property covered thereby. 

     (b) The  proceeds  of such  insurance  , so long as this  lease  remains in
effect,  shall be used to  repair or  replace  the  parts of the  Premises,  any
improvements  thereto and personal property so insured. or 9.04,  Landlord may
keep or apply the  proceeds.
 
     (c)  Tenant  shall at its cost  maintain  business  interruption  insurance
providing  coverage  for a period of not less  than  twelve  (12)  months if the
Premises are destroyed or rendered  inaccessible  by a risk insured against by a
policy of All Risk insurance,  with any endorsements  required by subsection (a)
above.



<PAGE>
FIRE      Section 8.03
INSURANCE
PREMISES


     months if the Premises are  destroyed  or rendered  inaccessible  by a risk
insured against under the coverages described herein and in Section 8.02(a). The
cost  of  maintaining  such  insurance,   including  the  cost  of  funding  the
deductibles  and  reserves  maintained  or  required  in  connection  with  such
coverages,  shall be  included in common  area costs  pursuant  to Article  XIV.
Tenant shall have no rights in any policy or policies maintained by Landlord.

INSURANCE       Section 8.04
POLICIES           

     All  insurance  required  to be carried by Tenant  hereunder  shall be with
companies  rated A:VIII,  or better,  in the then most recent  version of Best's
Insurance  Guide and licensed to provide the relevant  insurance in the State of
California.  Tenant shall deliver to Landlord on or prior to the date possession
OF the Premises is delivered to Tenant,  and  thereafter  at lease days prior to
the expiration or renewal date of any policy maintained by Tenant, copies of the
policies  or  certificates   evidencing   such   insurance.   All  policies  and
certificates  delivered  pursuant to this Section shall contain liability limits
not less  than  those  sct  forth in  Sections  8.01 and  8.02,  shall  list the
additional  insureds,  shall  specify all  endorsements  and  special  coverages
required by such  Sections and shall be effective on or before the  Commencement
Date.  Each such policy shall contain  provisions (by  endorsement or otherwise)
requiring not less than thirty (30) days written notice to Landlord prior to any
cancellation, non-renewal or material amendment thereof For the purposes of this
Article  VIII,  the phrase  "term of this lease"  shall mean the period from the
Commencement  Date through the later of the  expiration  or  termination  of the
lease term or the date Tenant surrenders  physical possession of the Premises to
Landlord. Any insurance required pursuant to this lease may be provided by means
of a  so-called  "blanket"  policy,  so long as the  Premises  are  specifically
covered (by rider,  endorsement or otherwise) and the policy otherwise  complies
with the provisions of this lease, without reduction or diminution due to use of
such blanket  policy.  lf on account of the failure of Tenant to comply with any
provision  of this  Article,  Landlord or any  additional  insured is adjudged a
co-insurer by its insurance  carrier,  then any loss or damage  Landlord or such
additional  insured shall sustain by reason thereof shall be borne by Tenant and
shall be paid by Tenant upon  receipt of a bill  therefor  and  evidence of such
loss. 

*fifteen (15) 

WAIVER OF      Section 8.05 SEE ADDENDUM 
SUBROGATION 

     Landlord  and Tenant  each  hereby  waives  any and all rights of  recovery
against the OTHER,  and  against any other  tenant or occupant of the Center and
against the officers, employees, agents, representatives, customers and business
visitors  of such other  party and of each such other  tenant or occupant of the
Center,  for loss of or  damage to such  waiving  party or its  property  or the
property of others under its control,  arising  from any cause  insured  against
under any policy of  insurance  required  to be carried  by such  waiving  party
pursuant  to the  provisions  of this  lease (or any other  policy of  insurance
carried  by such  waiving  party in lieu  thereof)  at the time of such  loss or
damage.  The foregoing waiver shall be effective  whether or not a waiving party
actually  obtains  and  maintains  the  insurance  which such  waiving  party is
required  to obtain  and  maintain  pursuant  to this  lease (or any  substitute
therefore).  Landlord and Tenant shall, upon obtaining the policies of insurance
which they are required to maintain  hereunder,  give notice to their respective
insurance carrier or carriers that the foregoing mutual waiver of Subrogation is
contained in this lease.

INDEMNITY       Section 8.06 SEE ADDENDUM

     To the fullest extent permitted by law, Tenant shall indemnify,  defend and
hold Landlord harmless from and against any liability or expense  (including but
not limited to attorneys' fees and costs OF defense) for any damage or injury to
persons  or  property  in or about the Center  which may result  from the use or
occupation  of the Premises by or the breach of the  provisions of this lease by
Tenant, its agents, employees, |^|, licensees,  concessionaires or other persons
claiming  under  Tenant.  In  addition,  if any person not a party to this lease
shall  institute  any other  type of action  against  Tenant in which  Landlord,
involuntarily and without cause,  shall be made a party defendant,  Tenant shall
indemnify, bold Landlord harmless from and defend Landlord from all liability by
reason  thereof.  It is  understood  and  agreed  that  payment  shall  not be a
condition precedent to enforcement of the foregoing indemnification obligations.
Tenant's defense obligation hereunder shall include the obligation, upon demand,
to defend Landlord  against any claim or action of the types herein specified by
legal counsel reasonably satisfactory to Landlord.  Provided,  however, that the
foregoing shall not extend to any damage or injury which Tenant established in a
court OF competent  jurisdiction was |^| proximately caused by the negligence of
Landlord, its agents or employees.

<PAGE>

EXEMPTION OF Section 8.07 SEE ADDENDUM
LANDLORD

     officer, employees, agents, representatives,  customer, business visitor or
invitees. Provided, however, that the foregoing shall not apply to any damage or
injury which Tenant  established  in a court of competent  jurisdiction  was |^|
proximately caused by the negligence of Landlord, its agents or employees.

LANDLORD'S   Section 8.08
SECURITY   

     Landlord  may, but shall have no obligation  to, from time to time,  employ
one or more  persons or  entities to patrol or provide  security  for the common
areas.  Tenant  and its  employees  shall  cooperate  with  Landlord's  security
personnel,  including those  providing  common area security for employees after
closure OF Center stores.  Notwithstanding any such activity,  Tenant shall have
the sole  responsibility  of providing  security for the  Premises,  the persons
therein  and  all   vehicles  of  Tenant  and  Tenant's   employees.   Under  no
circumstances  shall  Landlord  be liable  to  Tenant  by  reason of any  theft,
burglary,  robbery,  assault,  trespass,  unauthorized entry,  vandalism, or any
other act of any third  person  occurring  in or about  the  Premises,  , To the
extent  Landlord  elects to provide such patrol or security  services,  the cost
thereof shall be included in common area costs pursuant to Section 14.04 hereof.

TENANT'S      Section 8.09
SECURITY      

     Tenant  shall be solely  responsible  to  purchase,  install,  maintain and
replace all security  devices any features  required by Tenant for the Premises,
including but not limited to solid storefronts,  solid grilles,  locks,  burglar
and other  alarms and  sensory  systems.  All such  features  and items shall be
subject to written  approval of Landlord prior to construction or  installation,
which approval shall be limited to aesthetics and non-interference of such items
with  systems  and devices  maintained  by  Landlord  for the  Center.  All such
features,  systems and other  security  items shall  comply with all  applicable
governmental  requirements  and all  applicable  provisions  of this  lease  and
Exhibits "C" and "E" hereto. Tenant shall be responsible to provide any employee
safety courses deemed necessary by Tenant

<PAGE>
                                   ARTICLE IX
                             REPAIRS AND RESTORATION

INSURED       Section 9.01 SEE ADDENDUM
OR MINOR  
DAMAGE

     Subject to the  provisions of Sections 9.03 and 9.04, if at any time during
the term hereof the Premises are destroyed or damaged and either (a) such damage
is not "substantial" as that term is hereinafter defined, or (b) such damage was
caused by a casualty  required to be insured  against  under  Sections  8.02 and
8.03,  then Landlord shall promptly repair such damage to portions of the Center
located outside of the exterior boundaries of the Premises,  Tenant shall repair
the Premises and this lease shall continue in full force and effect.

MAJOR        Section 9.02  SEE ADDENDUM
DAMAGE              

     Subject to the  provisions of Sections 9.03 and 9.04, if at any time during
the term hereof the Premises or the Center are  destroyed or damaged and if such
damage is "substantial" as the term is hereinafter  defined,  and if such damage
was caused by a casualty not required to be insured  against under Sections 8.02
and 8.03, then Landlord may at its option either (a) promptly conduct the repair
to be made by Landlord pursuant to Section 9.01 and this lease shall continue in
full force and effect,  or (b) cancel and terminate this lease as of the date of
the  occurrence of such damage,  by giving Tenant written notice of its election
to do so within thirty (30) days after the date of occurrence of such damage.

MAJOR         Section 9.03 SEE ADDENDUM
DAMAGE TO 
CENTER

     In the event that premises in the Center  aggregating  twenty-five  percent
(25%) or more of the total floor area of all buildings  within the Center leased
or offered for lease to tenants  (OTHER than tenant  owned  buildings)  shall be
damaged or  destroyed,  whether or not the  Premises  are damaged or  destroyed,
Landlord may at  Landlord's  option  cancel and  terminate  this lease by giving
written notice to Tenant OF Landlord's  election to do so within sixty (60) days
after the date of  occurrence  of such  damage,  in which event this lease shall
terminate on the date such notice is given.


<PAGE>

 ABATEMENT                      Section 9.05
 OF RENT;     
 REMEDIES FOR
NON-PERFORMANCE

     (a) If the Premises or the Center are  destroyed or damaged and Landlord is
required Io or elects to repair or restore  pursuant to the  provisions  of this
Article,  Tenant shall continue the operation of its business in the Premises to
the extent  reasonably  practicable  from the  standpoint  of  prudent  business
management.  The Minimum  Rent,  Percentage  Rent and  additional  rent  payable
hereunder  for the  period  during  which  such  damage,  repair or  restoration
continues  shall be abated in proportion to the degree to which  Tenant's use of
the Premises is impaired,  . Neither such abatement,  nor any other abatement OF
rent  pursuant to this lease,  shall defeat or diminish any right of landlord to
recover  the  proceeds  of  any  rental  interruption  insurance  maintained  by
Landlord. Tenant shall have no claim against Landlord for any damage suffered by
Tenant by reason of any such damage, destruction,  repair or restoration. Tenant
waives the provisions of Civil Code Sections 1932(2) and 1933(4) and any present
or future laws or case  decisions to the same effect.  Upon  completion  of such
repair or restoration,  Tenant shall promptly refixture and restock the Premises
substantially  to the  condition  prior to the  casualty  and shall  reopen  for
business if closed by the  casualty.  

     (b) If either  party  shall be  obligated  to repair or  restore  under the
provisions  of this  Article and shall not commence  such repair or  restoration
within thirty (30) days after such obligation shall accrue, the OTHER may at its
option  cancel and  terminate  this lease as of the date of  occurrence  of such
damage by giving to the  non-performing  party written notice of its election to
do so at any time after the  expiration of such thirty (30) day period and prior
to the commencement of such repair or restoration.  Landlord's  obligation shall
be deemed to accrue on the later of (i) receipt by Landlord of any  governmental
permit or approval  necessary to commence  such work or (ii)  settlement  of any
insurance claim with respect to such casualty.  The  restoration  obligations of
Tenant shall be deemed to accrue upon completion


<PAGE>



     by Landlord of so much OF Landlord's  work as is  reasonably  necessary for
Tenant to  commence  Tenant's  work and shall  include  repair,  restoration  or
replacement  of Tenant's  equipment  and personal  property.  If the parties are
required to or elect to repair or restore  pursuant to this  Article,  then each
party shall be entitled to the proceeds of the insurance  maintained pursuant to
Sections 8.02 and 8.03 as pertain to the improvements to be repaired or restored
by it.

DEFINITIONS                     Section 9.06 SEE ADDENDUM

     (a) For the purposes of this Article,  "substantial" damage to the Premises
shall be deemed to be damage to the  building of which the  Premises are a part,
the  estimated  cost of repair of which  exceeds  one- fifth ( 1 /5) OF the then
estimated replacement cost of such building. 

     (b) The  determination  in good faith by Landlord of the estimated  cost of
repair of any damage  and/or of the estimated  replacement  cost of any building
shall be conclusive for the purpose of this Article.


                                    ARTICLE X
                            ASSIGNMENT AND SUBLETTING

LANDLORD'S                     Section 10.01 SEE ADDENDUM

     (a) Tenant shall not,  either  voluntarily or by operation of law,  assign,
sell,  encumber,  pledge  or  otherwise  transfer  all or any  part of  Tenant's
leasehold  estate  hereunder,  or permit the  Premises  to be occupied by anyone
other than Tenant or Tenant's  employees  or sublet the  Premises or any portion
thereof, without Landlord's prior written consent in each instance. Such consent
and other matters related to any assignment or subletting shall be in accordance
with the provisions of subsections (b) through (g) below. Consent by Landlord to
one or more assignments of this lease, to one or more subletting of the Premises
or to any OTHER event  requiring  the  consent of Landlord  shall not operate to
exhaust  Landlord's rights under this Section.  The voluntary or other surrender
of this lease by Tenant or a mutual cancellation hereof shall not work a merger,
and shall at the option of Landlord,  terminate all or any existing subleases or
subtenancies  or shall,  at  Landlord's  option,  operate  as an  assignment  to
Landlord of such  subleases or  subtenancies.  If Tenant is a corporation  whose
capital  stock  is  not  traded  on a  national  securities  exchange,  or is an
unincorporated   association  or  partnership,   the  transfer,   assignment  or
hypothecation  of any stock or  interest  in such  corporation,  association  or
partnership  in the  aggregate in excess of  twenty-five  percent (25%) shall be
deemed an  assignment  within the meaning and  provisions  of this  Article.  In
connection with any request for Landlord's  consent pursuant to this subsection,
Tenant shall pay to Landlord the sum of (i) One Thousand Five Hundred Dollars ($
1,500.00) plus (^n) all  attorneys'  fees and other out-OF pocket costs incurred
by Landlord in responding to such a request.  Tenant shall deposit with Landlord
the  sum of Two  Thousand  Five  Hundred  Dollars  ($2.500.001  as a part of the
information required under subsection (b) below and 1 Landlord's obligation to



<PAGE>



Landlord's  demand  therefore.  Any such excess shall be deemed  additional rent
pursuant to this lease,  and may be recovered in any unlawful  detainer or other
action instituted by Landlord upon any default by Tenant as rent, whether or not
included in any notice given to Tenant by Landlord prior to or as a condition to
the institution of such action.

     (b) If Tenant  desires  at any time to assign  this  lease or to sublet the
Premises or any portion  thereof,  it shall first notify  Landlord in writing of
its desire to do so and shall  submit in writing to Landlord (i) the name of the
proposed subtenant or assignee;  (ii) the nature of the proposed  subtenant's or
assignee's  business  to be  carried  on in the  Premises;  (iii)  the terms and
provisions  of the proposed  sublease or assignment  and the proposed  effective
date thereof,  including a copy of any agreement,  escrow  instructions or OTHER
document  which  contains or  memorializes  such terms and  provisions,  and the
information required by subsection (e) below; and (iv) such reasonable financial
information  as Landlord  may  request  concerning  the  proposed  subtenant  or
assignee, including but not limited to a balance sheet of the proposed subtenant
or  assignee  as of a date  within  ninety  (90) days prior to the  request  for
Landlord's  consent,  statements  of income or profit  and loss of the  proposed
subtenant  or  assignee  for the two  year  period  preceding  the  request  for
Landlord's  consent  and a  written  statement  in  reasonable  detail as to the
business  and retail  merchandising  experience  of the  proposed  subtenant  or
assignee during the five (5) years preceding the request for Landlord's consent.


     (c) At any time  within  thirty (30) days after  Landlord's  receipt of the
information  specified in  subsection  (b),  Landlord  may by written  notice to
Tenant elect to (i) consent to the  subletting or assignment  upon the terms and
to the  subtenant  or  assignee  proposed;  (^n)  refuse  to give  its  consent,
specifying in reasonable  detail the reason(s)  therefore or (^ni)  sublease the
Premises  or the portion  proposed  to be  subleased  or take an  assignment  of
Tenant's  leasehold  estate  hereunder  upon the  same  terms  (excluding  terms
relating to the purchase of stock,  the use of Tenant's name or the continuation
of Tenant's business) as those offered to the proposed subtenant or assignee, as
the case may be.  (^ni) above,  any  payments by Landlord to 'Tenant  pursuant c
amount  which  Tenant  would have r e c ow if  Landlord  had  elected to proceed
pursuant to


<PAGE>



     t is lease  shall be  terminated  with  respect to the entire  Premises  by
reason of a subletting or assignment to landlord, the term shall end on the date
stated in Tenant's notice as the effective date of the sublease or assignment as
if that date bad been  originally  fixed in this lease for the expiration of the
term. If Landlord  recaptures  only a portion of the Premises,  the Minimum Rent
and  additional  rent during the  unexpired  term shall abate,  proportionately,
based on the rent as of the date  immediately  prior to such  recapture.  Tenant
shall, at Tenant's own cost and expense, discharge in full any commissions which
may be due and  owing as a result  of any  proposed  assignment  or  subletting,
whether  or not the  Premises  are  recaptured  pursuant  hereto  and  rented by
Landlord to the proposed tenant or any other tenant. 

     (d)  Landlord  shall have the right to approve or  disapprove  any proposed
assignee or  sublessee.  In  exercising  such right of approval or  disapproval,
Landlord  shall be  entitled  to take  into  account  any fact or  factor  which
Landlord  reasonably  deems  relevant  to  such  decision,   including  but  not
necessarily  limited to the following,  all of which are agreed to be reasonable
factors for Landlord's consideration: 

     (i) The financial strength of the proposed assignee or subtenant, including
the  adequacy  of  its  working  capital  to pay  all  expenses  anticipated  in
connection  with  any  remodeling  and  restocking  of the  Premises.  

     (ii) The  experience of the proposed  assignee or subtenant with respect to
businesses  of the type and size which such  assignee or  subtenant  proposes to
conduct in the  Premises.  

     (iii) The quality and nature of the merchandise and retail services offered
for sale by The proposed  assignee or subtenant in any other  locations which it
has, as reflected  by, among other things,  average unit sales,  and the quality
and  nature of the  merchandise  and retail  services  which  such  assignee  or
subtenant  proposes  to  offer  for  sale in the  Premises.  

     (iv)  Violation of exclusive use rights  previously  granted by Landlord to
other  tenants  of the  Center.  

     (v) The effect of the type of services and  merchandise  which the proposed
assignee or subtenant  proposes to sell in the  Premises  upon the tenant mix in
the portion of the Center which contains the Premises,  including duplication of
services and merchandise offered by surrounding tenants and compatibility OF the
services and  merchandise  which such assignee or subtenant  proposes to sell in
the Premises with merchandise offered by surrounding tenants in the Center.



<PAGE>



     (vii) The quality of the story appearance  resulting from any remodeling or
renovation  to be  conducted  by the  proposed  assignee or  subtenant,  and the
compatibility  of such  quality  with that of OTHER stores in the portion of the
Center in which the Premises arc located. -

     by  this  lease  is not  impaired  or  diminished  by  such  assignment  or
subletting.  In no event  shall  there be any change in the trade name in use at
the Premises or any substantial  change in the use of the Premises in connection
with any  assignment  or subletting  except as expressly  approved in writing by
Landlord in advance.  Landlord and Tenant acknowledge that the express standards
and provisions sct forth in this lease dealing with  assignment and  subletting,
including those set forth in subsections (c), (d), (e) and (f), have been freely
negotiated  and are  reasonable at the date hereof taking into account  Tenant's
proposed use of the Premises and the nature and quality of the Center. 

     Approval of any  assignment  of  Tenant's  interest  shall,  whether or not
expressly so stated,  be conditioned upon such assignee  assuming in writing all
obligations  OF  Tenant  hereunder  by  a  written  instrument  satisfactory  to
Landlord. 

     (e) In connection  with any  assignment or  subletting,  Landlord  shall be
entitled to

     (g) If  Landlord  consents to such  assignment  or  subletting  or does not
exercise  any option set forth in  subsection  (c) within  said  thirty (30) day
period,  Tenant may  thereafter  within days after the expiration of said thirty
(30) day period  enter into a valid  assignment  or sublease of the  Premises or
portion  thereof,  upon the terms and  conditions  described in the  information
required to be furnished  by Tenant to Landlord  pursuant to  subsection  (b) or
upon other terms not less favorable to Tenant Provided



<PAGE>
NO RELEASE          Section 10.02
OF TENANT

     deemed to be a waiver by  Landlord of any  provision  of this lease or be a
consent to any assignment or  subletting.  The foregoing  restrictions  shall be
binding  upon any assignee or subtenant  to which  Landlord has  consented.  Any
sale, assignment,  mortgage, transfer of This lease or subletting which docs not
comply with the provisions of this Article shall be void.


                                   ARTICLE XI
                                 EMINENT DOMAIN

ENTIRE OR     Section 11.01
SUBSTANTIAL  
TAKING

     If the  entire  Premises,  or so much  thereof as to make the  balance  not
reasonably  adequate  for  the  conduct  of  Tenant's  business  notwithstanding
restoration by Landlord as hereinafter provided,  shall be taken under the power
of eminent domain,  this lease shall  automatically  terminate as of the date on
which the condemning authority takes possession.

PARTIAL       Section 11.02
TAKING                  

     In the event of any taking under the power of eminent domain which does not
result in a termination of this lease,  the Minimum Rent and all additional rent
other than Percentage Rent payable  hereunder shall be reduced,  effective as of
the  date on  which  the  condemning  authority  takes  possession,  in the same
proportion  which the Floor Area of the portion of the  Premises  taken bears to
the Floor  Area of the  entire  Premises  prior to the  taking,  Landlord  shall
promptly at its expense  restore the portion of the  Premises not so taken to as
near its former  condition  as is  reasonably  possible,  and this  lease  shall
continue  in full force and  effect.  In no event,  however,  shall  Landlord be
required to expend more on restoration than the award received by Landlord,  net
of expenses incurred in obtaining such award.

TAKING OF     Section 11.03
CENTER

     If premises in the Center aggregating  twenty-five percent (25%) or more of
the total Floor Area OF all  buildings  within the Center  leased or offered for
lease to tenants (OTHER than tenant owned  buildings)  shall be taken by eminent
domain,  whether or not the Premises are so taken,  Landlord may, at its option,
terminate  this lease by written notice to Tenant of its election to do so prior
to the date the condemning authority requires  possession,  and this lease shall
terminate on the date the condemning authority requires possession.

AWARDS       Section 11.04 SEE ADDENDUM
                
     Any award for any taking of all or any part of the Premises under the power
of eminent domain shall be the property of Landlord, whether such award shall be
made as  compensation  for diminution in value OF the leasehold or for taking of
the fee. Nothing contained herein,  however,  shall be deemed to preclude Tenant
from  obtaining,  or to give  Landlord  any interest in, any award to Tenant for
loss of or damage to Tenant's trade fixtures and removable  personal property or
for damages for cessation or interruption or relocation of Tenant's business.

SALE UNDER    Section 11.05
THREAT OF 
CONDEM
NATION

     A sale by Landlord  to any  authority  having the power of eminent  domain,
either under threat - OF  condemnation  or while  condemnation  proceedings  are
pending,  shall be deemed a taking  under the power of  eminent  domain  for all
purposes  under this Article.  Landlord may,  without any  obligation to Tenant,
agree to sell and/or convey to any authority  having the power of eminent domain
all or any  portion of the Center  free from this lease and the rights of Tenant
hereunder,  without first  requiring that any action or proceeding be instituted
or pursued to judgment.


                                   ARTICLE XII
                                UTILITY SERVICES

UTILITY        Section 12.01
CHARGES

     Tenant  shall  pay,  to  the  purveyors  of  such  services,  all  charges,
surcharges,  taxes and other fees,  including  installation  and hook up charges
(however  denominated) for gas, water, sewer,  electricity,  telephone and other
utility services used in the Premises during the lease term. If any such charges
arc not paid when

<PAGE>

FURNISHING OF  Section 12.02
SERVICES

     however,  that any such notice shall be in lieu OF, and not in addition to,
any notice required under California Code of Civil Procedure Sec. 1161, et seq.,
as amended.  Provided  further,  that if the nature of Tenant's  default is such
that more than ten ( 10) days are reasonably  required for its cure, then Tenant
shall not be deemed to be in default if Tenant shall  commence  such cure within
said ten ( 10) day  period  and  thereafter  diligently  prosecute  such cure to
completion.  (d) (i) The  making  by Tenant of any  general  assignment  for the
benefit of creditors;(ii)  the filing by or against Tenant of a petition to have
Tenant adjudged a "Debtor" or a petition for reorganization or arrangement under
any la *relating to bankruptcy  (unless, in the case of a petition filed against
Tenant,  the same is  dismissed  within|^|  days);  (^ni) the  appointment  of a
trustee or received to take possession of  substantially  all of Tenant's assets
located at the Premises or of Tenant's interest in this lease,  where possession
is not restored to Tenant  within|^|  days;  (iv) the  attachment,  execution or
other judicial  seizure of  substantially  all of Tenant's assets located at the
Premises  or of  Tenant's  interest  in this  Lease,  where such  seizure is not
discharged  within|^|  days;  or (v)  Tenant's  convening  of a  meeting  of its
creditors or any class thereof for the purpose of effecting a moratorium upon or
composition of its debts, or any class thereof. *ninety (90)

REMEDIES        Section 13.02 SEE ADDENDUM
                          

     (a) In the event of any  default by Tenant as  defined in Section  13.01 or
elsewhere in this lease,  Landlord may exercise the  following  remedies:  

     ( 1 ) Terminate  Tenant's right to possession of the Premises by any lawful
means,  in which case this lease shall  terminate  and Tenant shall  immediately
surrender  possession of the Premises to Landlord.  In such event Landlord shall
be entitled to recover  from  Tenant all amounts  which  Landlord is entitled to
recover  pursuant  to  Section  1951.2  of the  California  Civil  Code  (or any
successor thereto),  including, but not limited to: 

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

     (ii)  Any  other  amount  necessary  to  compensate  Landlord  for  all the
detriment  proximately  caused by Tenant'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  brokerage
commissions and any necessary repair, renovation and alteration of the Premises,
reasonable  attorneys' fees, and any other  reasonable  costs. 

     The "worth at the time of award" OF all rent other than that referred to in
clause (i) above shall be  computed  by allowing  interest at the rate per annum
determined  pursuant  to  Section  16.06  from the date such  amounts  accrue to
Landlord. The worth at the time of award of the amount referred to in clause (i)
above shall be computed by discounting such amount at one ( 1 ) percentage point
above the discount rate of the Federal Reserve Bank of San Francisco at the time
of award.  

     (2) In the event of the vacation or  abandonment of the Premises by Tenant,
and without  terminating  or effecting a  forfeiture  of this lease or otherwise
relieving  Tenant of any  obligation  hereunder  P , in the  absence  of express
written  notice of Landlord s election  to do so,  Landlord  may,  but need not,
Relet the  Premises or any portion  thereof at any time or from time to time and
for such terms and upon such conditions and rental as Landlord in its discretion
may deem proper,  with the right to make alterations or repairs ta the Premises.
If Landlord  relet the Premises or any portion  thereof,  then rent  received by
Landlord  from such  Reletting  shall be applied:  first,  to the payment of any
indebtedness  other than rent due hereunder from Tenant to Landlord;  second, to
the payment of any cost of such Reletting;  third, to the payment of the cost of
any alterations and repairs to the Premises;  fourth, to the payment of rent due
and unpaid  hereunder;  and the residue,  if any,  shall be held by Landlord and
applied  in payment  of future  amounts  as the same may become due and  payable
hereunder. Should the rent for such Reletting, during


<PAGE>



     any month for which the payment of rent is required hereunder, be less than
the rent payable  during that month by Tenant  hereunder,  then Tenant shall pay
such deficiency to Landlord immediately upon demand therefore by Landlord.  Such
deficiency  shall be  calculated  and paid  monthly.  Tenant  shall  also pay to
Landlord as soon as ascertained,  any costs and expenses incurred by Landlord in
such  reletting  or in making  such  alterations  and repairs not covered by the
rentals  received  from such  Reletting.  Landlord may execute  interest in this
lease,  subject  to all of the  standards  and  conditions  set forth in Section
10.01.  Landlord ma|^| elect to terminate the  prosecution of such remedy at any
time by written  notice to  Tenant,  and the right OF Tenant to sublet or assign
shall  terminate  upon  receipt  by  Tenant of such  notice.  

     (3) Landlord may terminate  this lease by express  written notice to Tenant
of its  election to do so.  Such  termination  shall not  relieve  Tenant of any
obligation hereunder which has accrued prior to the date of such termination. In
the event of such termination, Landlord shall be entitled to recover from Tenant
the amounts determined pursuant to paragraph ( 1 ) above.

     (c) In any action for  unlawful  detainer  commenced  by  Landlord  against
Tenant by reason OF any default  hereunder,  the reasonable  rental value of the
Premises  for the  period  of the  unlawful  detainer  shall be deemed to be the
amount of rent and  additional  rent  reserved  in this  lease for such  period,
unless Landlord or Tenant shall prove to the contrary by competent evidence. 

     (d) The rights and remedies  reserved to Landlord  herein,  including those
not  specifically  described,  shall be  cumulative,  and except as  provided by
California  statutory law in effect at the time,  Landlord may pursue any or all
of such  rights and  remedies,  at the same time or  otherwise.  

     (e) No delay or omission of Landlord to exercise  any right or remedy shall
be construed as a waiver of any such right or remedy or of any default by Tenant
hereunder.  The  acceptance  by  Landlord of any rent  hereunder  shall not be a
waiver of any  preceding  breach or default by Tenant of any  provision  hereof,
other than the failure of Tenant to pay the particular rent accepted, regardless
of  Landlord's  knowledge  OF such  preceding  breach or  default at the time of
acceptance of such rent, or a waiver of Landlord's  right to exercise any remedy
available to Landlord by virtue of such breach or default. The acceptance of any
payment from a debtor in possession,  a trustee,  a receiver or any other person
acting on behalf of Tenant or Tenant's  estate shall not waive or cure a default
under  Section  13.01(d).  

     (f) Tenant hereby waives any right of redemption or relief from  forfeiture
under  California Code of Civil Procedure  Sections 1174 and 1179, and under any
present or future  statutes or case  decisions to the same effect,  in the event
Tenant is evicted or Landlord takes  possession of the Premises by reason of any
default by Tenant hereunder.


DEFAULT BY           Section 13.03 SEE ADDENDUM
LANDLORD 

     Landlord  shall not be deemed to be in  default in the  performance  of any
obligation  required to be  performed  by it  hereunder  unless and until it has
failed to perform such  obligation  within thirty (30) days after written notice
by Tenant to Landlord  specifying  wherein  Landlord  has failed to perform such
obligation.  Provided,  however,  that if the nature of Landlord's obligation is
such that more than  thirty  (30) days are  required  for its  performance  then
Landlord  shall  not be  deemed  to be in  default  if it  shall  commence  such
performance  within  such  Thirty  (30) day  period  and  thereafter  diligently
prosecute the same to completion. Tenant's remedies for Landlord's default shall
be limited to suit or action and shall not extend to  withholding  or offsetting
rent.

EXPENSE OF           Section 13.04
LITIGATION

     If either party incurs any expense,  including reasonable  attorneys' fees,
in connection with any action or proceeding instituted by either party by reason
of any  default  or  alleged  default of the other  party  hereunder,  the party
prevailing  in such action or  proceeding  shall be entitled to recover its said
reasonable expenses from the other patty. For purposes of this provision, in any
unlawful  detainer or other action or proceeding  instituted  by Landlord  based
upon any  default or  alleged  default by Tenant  hereunder,  Landlord  shall be
deemed the  prevailing  party if (a) judgment is entered in favor of Landlord or
(b) prior to trial or judgment  Tenant  shall pay all or any portion of the rent
and charges claimed by Landlord, eliminate the condition(s), cease the act(s) or
otherwise  cure the  omission(s)  claimed by Landlord to constitute a default by
Tenant hereunder.

HOLDING             Section 13.05 SEE ADDENDUM
OVER
        
     If Tenant or anyone claiming under Tenant shall remain in possession of the
Premises  or any part  thereof  after  expiration  of the lease  term or earlier
termination thereof without any agreement in writing between Landlord and Tenant
with  respect  thereto,  Tenant  shall  (a)  occupy  upon all of the  terms  and
conditions  of this Lease  except that the monthly  Minimum Rent due from Tenant
shall be equal to the  greater OF three  hundred  percent  (300%) of the monthly
Minimum  Rent in effect at the and of the term or the then  fair  market  rental
value of the  Premises,  (b) pay all damages  sustained by Landlord by reason of
such retention and (c) indemnify,  defend,  and hold Landlord  harmless from and
against any loss or liability resulting from such holding over.


<PAGE>

LANDLORD'S     Section 13.06
RIGHTS

     OF money,  OTHER than rent,  required  to be paid by it or fails to perform
any other act on its part to be performed, and such failure continues beyond any
applicable  grace period set forth in the Article  providing for such obligation
(or if no grace period is set forth in such Article,  then the applicable  grace
period  pursuant  to this  Article),  then in  addition  to any  other  remedies
provided  herein  Landlord  may, but shall not be  obligated  so to do,  without
waiving or  releasing  Tenant  from any  obligations  of  Tenant,  make any such
payment or perform any such other act on Tenant's part, including the removal of
any offending signs. Landlord's election to make any such payment or perform any
such act on Tenant's part shall not give rise to, any responsibility OF Landlord
to  continue  making  the same or similar  payments  or  performing  the same or
similar acts. Tenant shall,  within ten ( 10) days after written demand therefor
by  Landlord,  reimburse  Landlord  for all  sums so  paid by  Landlord  and all
necessary  incidental  costs,   together  with  interest  thereon  at  the  rate
determined  under  Section  16.06,  accruing  from the date of such  payment  by
Landlord and the late performance  charge provided  therein;  and Landlord shall
have the same rights and  remedies in the event of failure by Tenant to pay such
amounts as Landlord would have in the event of a default by Tenant in payment of
rent. In addition,  as to any non-monetary  obligation of Tenant hereunder which
Tenant performs only after written notice from Landlord of failure to perform or
which Tenant fails to perform and Landlord  performs  pursuant to this  Section,
Tenant shall pay to Landlord,  as additional rent, an  administrative  fee in an
amount equal to the greater of $ 100 or ten percent ( 10%) OF the amount paid by
Landlord to perform such obligation.

      
TRIAL           Section 13.08
WITHOUT 
JURY

     LANDLORD  AND TENANT EACH  ACKNOWLEDGES  THAT IT HAS HAD THE ADVICE JURY OF
COUNSEL  OF ITS  CHOICE  WITH  RESPECT  TO ITS RIGHTS TO TRIAL BY JURY UNDER THE
CONSTITUTIONS  OF THE  UNITED  STATES  AND THE STATE OF  CALIFORNIA.  EACH PARTY
EXPRESSLY AND KNOWINGLY  WAIVES AND RELEASES ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION,  PROCEEDING,  OR  COUNTERCLAIM  BROUGHT BY EITHER PARTY  AGAINST THE
OTHER ON ANY  MATTERS  ARISING OUT OF OR IN ANY WAY  CONNECTED  WITH THIS LEASE,
TENANT'S  USE OR  OCCUPANCY  OF THE  PREMISES,  AND/OR  ANY CLAIM FOR  INJURY OR
DAMAGE.

                                   ARTICLE XIV
                                  COMMON AREAS

DEFINITION        Section 14.01 SEE ADDENDUM

     All areas within the exterior boundaries of the Center which are not now or
hereafter  held for exclusive  use by Landlord or by other  persons  entitled to
occupy floor space in the Center, including,  without limiting the generality of
the foregoing,  parking areas and structures,  driveways,  truck ways,  delivery
passages,  elevators and escalators,  loading docks, sidewalks,  ramps, open and
enclosed courts and malls, landscaped and planted areas, exterior stairways, bus
stops,  retaining walls,  management  offices,  restrooms not located within the
premises of any tenant, and other areas and improvement provided by Landlord for
the common

CONTROL BY                   Section 14.03 SEE ADDENDUM
LANDLORD

     (a) Landlord shall operate,  manage,  equip, police,  light, repair, clean,
and  maintain  the  common  areas in such  manner  as  Landlord  may in its sole
discretion  determine  to be  appropriate.  Landlord may  temporarily  close any
common area for repairs or alterations,  to prevent a dedication  thereof or the
accrual of prescriptive rights therein or for any other reason deemed sufficient
by Landlord.  

     (b) Landlord shall at all times during the term of this lease have the sole
and exclusive control of the automobile parking areas, driveways,  entrances and
exits and the sidewalks and pedestrian  passageways and other common areas,  and
may at any time and from time to time during the term hereof  restrain  any u.c.
or occupancy  thereof except as authorized by the rules and  regulations for the
use of such areas  established by Landlord from time to time.  Without  limiting
the generality of the foregoing,  Landlord may operate or cause to be operated a
valet  parking  service for Center  customers  in one or more  locations  in the
Center selected by Landlord, and the cost of such service shall be a common area
cost pursuant to Section 14.04.  The rights of Tenant in and to the common areas
shall at all times be subject to the rights of  Landlord,  the other  tenants of
Landlord  and the other owners of stores in the Center to use the same in common
with


<PAGE>



     Tenant, and Tenant shall keep said areas free and clear of any obstructions
created or permitted by Tenant or resulting  from  Tenant's  operation.  Nothing
herein  shall  affect  the  right of  Landlord  at any time to  remove  any such
unauthorized person from the common areas or to prohibit the u.c. of any of said
areas by unauthorized persons.

     (c) Tenant and its employees shall park their vehicles only in such parking
areas as arc from time to time  designated  for that  purpose by  Landlord,  and
Landlord may change such designated areas or assign particular spaces for use by
Tenant and its employees at any time upon written notice to Tenant.  Those areas
designated  for employee  parking may be located on the highest  Level of Center
parking  structures  and in those  portions of the Center most  distant from the
store  buildings.  Tenant  shall  furnish  Landlord  with a list  of its and its
employees'  vehicle  license  numbers  within  fifteen  (15) days  after  taking
possession of the Premises and Tenant shall  thereafter  notify  Landlord of any
change in such list within five (5) days after such change occurs. Tenant agrees
to assume  responsibility  for  compliance  by its  employees  with the  parking
provisions  contained herein. If Tenant or its employees park in other than such
designated  parking  areas,  then Landlord may charge  Tenant,  as an additional
charge,  Fifty  Dollars  ($50.00)  per day for each day or partial day each such
vehicle  is  parked  in any  part  of the  common  areas  other  than  those  so
designated.  Tenant  acknowledges that Landlord may tow away from the Center any
vehicle  belonging to Tenant or Tenant's  employees parked in violation of these
provisions,  and/or attach  violation  stickers or notices to such vehicle.  All
costs of such towing will be charged to the Tenant or the  employee who owns the
towed vehicle and must be paid prior to the release of the vehicle to its owner.
Each Tenant and its employees  shall be solely  responsible  for locking and the
safety of their  respective  vehicles.  

     Without  limiting the generality of the foregoing,  Landlord shall have the
right during the Christmas  shopping period (Veterans' Day through December 31 )
and during any promotional event at the Center to locate off site parking at any
location within two (2) miles of the Center,  to designate such off site area as
parking for Tenant's employees and to require Tenant's employees to park in such
off=site  parking and to  shuttle-bus  from such off site  parking  areas to the
Center. If Landlord elects to use such off-site  employee parking,  Tenant shall
(i) park and require  Tenant's  employees to park in such off site parking areas
and use landlord's  shuttle buses for travel to and from the Center and (ii) pay
to Landlord,  as additional  rent,  Tenant's  proportionate  share of Landlord's
costs incurred in using such off site areas and providing shuttle bus service to
the Center, plus an amount equal to fifteen percent (15%) of such costs to cover
Landlord's  overhead and  administrative  expenses  incurred in  providing  such
service.  Tenant's  proportionate share of such costs shall be determined in the
manner  specified  in  Section  14.05(a)  and may be billed to Tenant  either in
monthly  installments  or a single lump sum. 

     (d) In the event Landlord elects or is required to limit or control parking
by customers or invitees of the Center, whether by validation of parking tickets
or  any  method  of  assessment,  or  any  program  for  free  or  reduced  cost
transportation,  Tenant agrees to participate in such validation,  assessment or
transportation  program under such reasonable  rules and regulations as are from
time to time established by Landlord with respect thereto.  Without limiting the
generality of the foregoing:  

     (i) Landlord  and Tenant  agree to cooperate  and use their best efforts to
participate in governmentally mandated and voluntary traffic management programs
generally  applicable to businesses located in Costa Mesa,  California or to the
Center  and,  initially,  shall  encourage  and  support  van and car pooling by
employees and shall encourage and support  staggered and flexible  working hours
for employees to the fullest extent  permitted by the  requirements  of Tenant's
business.  Neither  this  subsection  nor any  other  provision  in this  lease,
however,  is  intended  to or shall  create any rights or  benefits in any other
person,  firm,  company,  governmental  entity or the public.  

     (ii)  Landlord and Tenant agree to cooperate and use th cir best efforts to
comply with any and  

     specifically  listed in such Section.  However,  any costs,  fees, fines or
other levies assessed against Landlord as the result of failure of any tenant to
comply with this subsection shall be reimbursed by such non- complying tenant to
Landlord as additional rent.


 COMMON          Section 14.04 SEE ADDENDUM
 AREA COSTS 

     Tenant shall pay to Landlord,  as additional  rent in the manner and at the
time provided  below,  Tenant's  proportionate  share,  as defined below, of all
costs and expenses incurred by Landlord in the operation, repair and maintenance
of the common  areas  during the term of this lease,  including  property  taxes
assessed  against the Center and Landlord's  expenses  pursuant to Section 7.01.
Such costs and expenses  shall include,  without  limiting the generality of the
foregoing:  

     (a) Utility costs not separately  metered to Tenants  (including  costs and
fees charged to or incurred by Landlord in connection  with membership in energy
conservation associations). 

     (b)  Gardening,   landscaping,  planting  and  replacement  of  plants  and
landscaping,  re-striping  and repair and repaving and  resurfacing of roads and
other paved areas.  

     (c)  Premiums  paid  for  public  liability,  property  damage,  vandalism,
malicious mischief and other insurance maintained by Landlord, together with the
cost of funding  deductibles  and reserves as provided in Section 8.03. 

     (d) Real property  taxes (as defined in Section  5.02),  personal  property
taxes and vehicle  taxes and fees paid by Landlord  with  respect to the Center,
the  improvements  thereto and Landlord's  vehicles and other personal  property
therein.  

     (e)  Repairs  (including  roof  and  structural  repair,   maintenance  and
replacement  pursuant  to Section  7.01 ). 

     (f) Painting,  lighting (including replacements),  cleaning, trash removal,
depreciation  of equip.- ment,  security and fire  protection and similar items.

     (g) The cost of purchase,  installation and removal of seasonal decorations
at the Center, together with the cost (net of receipts received) of supplying to
Center patrons  customer  services  determined by Landlord to be advantageous to
attract  such  patrons or to assist  them in  shopping  at the  Center,  such as
shuttle  buses,  shopping bags,  toddler  strollers,  Center gift  certificates,
children's  rides and  entertainment  and Enclosed Mall  directories.  

     (h) Costs  incurred for  monitoring,  improving  and  remedying  indoor air
quality within the Center,  whether  incurred to comply with applicable laws and
regulations  or for the  purpose  of  improving  indoor  building  environmental
quality. 

     (i) Costs of  installation  and  operation of  loudspeaker  systems,  music
program services and other similar audio or video  transmission  systems and all
security  systems  for  the  Center.  

     (j) The cost of providing  management,  maintenance and security offices at
the Center and the cost of  providing  center  management  and support  staff to
operate  such offices and the Center.  

     (k) An amount  equal to  fifteen  percent ( 15%) of all other  common  area
costs and  expenses to cover  Landlord's  indirect  administrative  and overhead
expenses.   

     Such costs and expenses shall not include any allowance for depreciation of
common area improvements,  or any costs or expenses attributable to the heating,
ventilating  or air  conditioning  of the Enclosed  Mall,  but shall include all
charges,  surcharges  and other levies of whatsoever  nature imposed by, and all
costs (whether or not capital in nature) of compliance with the requirements of,
any federal,  state or local  governmental  agency regulating the environmental,
health and safety aspects of the Center and all costs,  as reasonably  amortized
by Landlord  with  interest at the rate  actually  incurred by Landlord,  of any
capital improvement which is reasonably calculated to reduce common area costs.


PROPOR-   Section   14.05  SEE  ADDENDUM   
TIONATE   
PAYMENT  

     (a)  Tenant's  proportionate  share of such common area costs shall be that
portion  thereof which the Floor Area of the Premises bears to the Floor Area of
the  premises  from time to time  leased and  occupied  by tenants in the Center
(other than tenant-owned  buildings and certain major tenants who pay on a basis
other than a proportionate share).  Tenant's  proportionate share shall be based
upon the common area costs  remaining after the deduction of costs paid directly
by the owners of tenant-owned buildings and contributions at rates or in amounts
specified in leases  between  Landlord and certain major  tenants.  

     (b) Prior to January 1 of each lease  year,  Landlord  shall give  Tenant a
written  estimate  of  Tenant's  proportionate  share of such  common area costs
(after taking into account the  contributions  referred to in (a) above) for the
ensuing  calendar year.  Tenant shall pay such  estimated  amount to Landlord in
equal  monthly  installments,  in advance.  In the event that actual common area
costs  experienced  during any calendar year shall be greater or lesser than the
estimates  used by  Landlord  for  calculating  Tenant's  monthly  installments,
Landlord may revise its estimates and Tenant's monthly installment; thereof. Any
change in Tenant's



<PAGE>



                                   ARTICLE XV
                         SIGNS, LIGHTING AND ADVERTISING

PROHIBITED       Section 15.01
ACTIVITIES 

     Tenant shall not, without  Landlord's prior written consent,  do any of the
following:  

     (a)  Install or affix to the  exterior  of the  Premises  any  lighting  or
plumbing fixtures,  shades, awnings, or exterior decorations (including exterior
painting). 

     (b) Install or affix to the  Enclosed  Mall Store front of the  Premises or
within four feet of such doors and windows  and  visible  therefrom,  any signs,
lettering,  placards,  sign  easels or the like.  In no event  shall such signs,
lettering and placards  exceed four (4) square feet in size. 

     (c) Display or sell merchandise in, or otherwise obstruct, any area outside
of the  Premises.  

     (d) Cause or permit to be used any  advertising  materials or methods which
are  objectionable  to  Landlord  or which  intrude  upon the  premises of other
tenants  of the  Center,  including,  without  limiting  the  generality  of the
foregoing, loudspeakers,  phonographs, radios, television, :mechanical or moving
display  devices,  unusually  bright or flashing  lights and similar devices the
effect  of which  may be seen or  heard or  otherwise  experienced  outside  the
Premises. 

     (e) Solicit  business in the parking or other common areas,  distribute any
hand bills or other  advertising  matter in the parking  area or in other common
areas  or  utilize  any  truck  or  other  vehicle  signs.  

     (f)  Use any  sign  or  advertising  material  that is not of  professional
quality. For the purpose of this Article, the term "exterior" shall also include
exposures on the  Enclosed  Mall.  No signs,  lighting or  advertising  shall be
permitted on any portion of the Premises  which is exposed to the parking areas.
Landlord may, without notice,  remove any materials which violate the provisions
of this Section,  and the cost of such removal shall be additional  rent payable
by Tenant upon demand.

MAINTENANCE      Section 15.02

     Tenant shall at all times maintain its show windows, signs, doors and store
front entrance floor in a neat, clean and orderly condition.  If, as to any such
sign, show window, door or entrance floor located on an exposure to the Enclosed
Mall or the parking areas,  Tenant shall fail to do so within two (2) days after
receipt of written notice from Landlord,  Landlord may repair, clean or maintain
such  exterior  sign,  show window,  door or entrance  Door and the cost thereof
shall be payable by Tenant to Landlord upon demand as additional rent.

DISPLAY          Section 15.03
WINDOW
LIGHTING

     Tenant shall keep its display  windows well  lighted  during all  operating
hours of Tenant and until such reasonable time as may be fixed from time to time
by Landlord  for all of the tenants in the Center,  unless  prevented  by causes
beyond Tenant's reasonable control.

ADVERTISED       Section 15.04
NAME AND               
ADDRESS

     (a) In no event shall Tenant use or shall  Landlord  approve any trade name
of Tenant for u.c. at the  Premises or in or on any sign,  stationery,  business
cards,   advertising   or   promotional   material  or  other  written  or  oral
disseminations  by Tenant  which  contains  as a portion  of such trade name the
words "South Coast Plaza," "South Coast,"  "Plaza,"  "Carousel  Court" or "Jewel
Court." 

     (b) Tenant shall use as its advertised  business  address (and for no other
purpose) the words "South Coast Plaza."  Tenant |^|hall not acquire any property
right in or to any name which contains said word  combination as a part thereof.
Such permitted use by Tenant of the words "South Coast Plaza" during the term of
this lease shall not permit  Tenant to use, and Tenant shall not use, such words
other  after  the  termination  of this  lease  or at any  other  location.  The
foregoing shall not preclude Tenant,  during the term of this lease,  from using
the words  "South  Coast  Plaza" in any listing of Tenant's  store  locations at
another store or on stationery, advertising materials or promotional materials.

ADVERTISING   Section 15.05  SEE ADDENDUM
EXPENDITURES  

     (a) Tenant shall spend each lease year an amount equal to not less than two
percent  (2%) of its gross  sales for such lease year on  advertising  its South
Coast  Plaza  location  in  or  for  magazines,  newspapers,  radio,  televison,
direct|^|mail  advertising or other |^|d media providing advertising external to
the Center and selected by Tenant



<PAGE>
     (c) to the date on which  Tenant  opens the Premises for business an amount
equal to two (2) months initial Minimum Rent. Such expenditures shall be limited
to advertisements promoting the opening of the Premises, any such media shall be
as selected by Tenant and any such media shall be distributed or disseminated in
the primary trade area of the Center.  The first  statement  submitted by Tenant
pursuant to subsection (b) above shall  separately set forth the amount expended
by Tenant pursuant to this subsection (c), and if Tenant shall fail to spend the
amount required by this subsection, then Tenant shall pay the difference between
the amount  required  to be spent  hereunder  and the amount  actually  spent by
Tenant to the Fund within  thirty (30) days after  demand is made  therefore  by
Landlord.

ACCEPTANCE      Section 15.06
OF
CENTER
CREDIT
CARD AND
GIFT
CERTIFICATES
   
     (b) For so long as Landlord or any agent or  contractor  of Landlord  sells
gift  certificates  for  redemption at Center  stores,  Tenant shall accept such
certificates at the Premises. Sales made in exchange for gift certificates shall
be treated by Tenant on the same basis as cash sales.  Tenant  shall redeem gift
certificates  exchanged at the Premises  with  Landlord or  Landlord's  agent or
contractor,  as designated  from time to time by Landlord.  Nothing herein shall
obligate  Landlord to continue such gift certificate  program for any particular
period of time or at all.

CATALOG        Section 15.07 SEE ADDENDUM
ADVERTISING 

     Tenant shall purchase advertisements of its location in the Premises (only)
in each of the two (2) seasonal  catalogs  (Christmas  and Spring)  prepared and
disseminated  annually by Landlord.  Such  advertisements  shall be full page in
size and the costs  thereof shall be  established  by Landlord.  Nothing  herein
shall require  Landlord to continue the  preparation  and  distribution  of such
seasonal  catalogs,  and if Landlord  elects to cease  publishing such catalogs,
Landlord may designate  other  advertising  vehicles to be used by Tenant with a
cost for such advertisements  equivalent to the cost of the two (2) catalogs. In
addition,  Tenant may, if approved by Landlord,  place  advertisements  in other
advertising  vehicles  published by Landlord in lieu of but with a cost at least
equal to the cost of advertising  in the two (2) catalogs.  If Tenant shall fail
to place any  advertisement  required  by this  Section or shall  place and then
cancel any such  advertisement,  Tenant shall pay to the Fund as additional rent
and within ten (10) days after Tenant's receipt of Landlord's  invoice therefor,
an  amount  equal  to the  cost  which  Tenant  would  have  incurred  for  such
advertisement.

SIGNS ON        Section 15.08
EXTERIOR                    

     Tenant  acknowledges  that it has been advised by Landlord that  Landlord's
present sign policy and the  ordinances of the City of Costa Mesa  substantially
restrict signs on the exterior  fascia of the Center (i.e.,  the exterior of the
Center  common  areas).  Accordingly,  Tenant  acknowledges  that  Landlord  has
informed Tenant that Tenant may not place any sign on the exterior fascia of the
Center and Tenant  agrees to comply  with such  restriction.  Nothing  contained
herein,  however,  shall be deemed or construed to preclude  Tenant's  signs (in
conformity  with the  provisions of Exhibits "C" and "E" hereto) on the exterior
of the Premises fronting onto the Enclosed Mall.


                                  ARTICLE XVI
                                  MISCELLANEOUS

OFFSET          Section 16.01  SEE ADDENDUM
STATEMENT

     (b) Tenant's  failure to deliver such  statement  within such time shall be
conclusive upon Tenant (i) that this lease is in full force and effect,  without
modification  except as may be represented  by Landlord,  (ii) that there are no
uncured defaults in Landlord's performance, (^ni) that not more than one month's
Minimum Rent has been paid in advance and (iv) that any other  statement of fact
regarding  Tenant or this  lease  included  by  Landlord  in the  statement  are
correct.


<PAGE>

     (c) Tenant  irrevocably  appoints Landlord as  attorney-in-fact  for Tenant
with full power and  authority  to execute and deliver in the name of Tenant any
estoppel certificate if Tenant fails to deliver the same within such twenty (20)
day period,  and such  certificate,  as signed by Landlord,  shall be binding on
Tenant.

LANDLORD'S        Section 16.02  SEE ADDENDUM
RIGHT OF 
ACCESS

     Landlord  and its agents  shall have the right (a) to enter the Premises at
all  reasonable  times for the purposes of examining or  inspecting  the same to
ascertain if they are in good repair, monitoring, improving and remedying indoor
air quality within the Center, making such alterations, repairs, improvements or
additions  to the  Premises as Landlord  may be  required or  permitted  to make
hereunder,  exhibiting the same to prospective  purchasers,  lenders and tenants
and posting notices which Landlord may deem necessary for its protection and (b)
at any time in an emergency.  Tenant shall cooperate with Landlord in exhibiting
the Premises to perspective purchasers,  lenders and tenants. Access by Landlord
hereunder  shall not,  under the  circumstance  interfere  with Tenant's use and
enjoyment  of the  Premises,  and Tenant  waives any claim for  damages  for any
injury or inconvenience to or interference with Tenant's business,  occupancy or
quiet  enjoyment  arising  out  of  any  permitted  entry  by  Landlord.  Tenant
acknowledges  that  Landlord  shall not retain a key to the Premises and may, in
any  emergency,  enter the  Premises  in any manner  which  Landlord  reasonably
determines to be necessary,  without  liability  therefor to Tenant. No entry by
Landlord  pursuant to this Section  shall be deemed to constitute an eviction of
Tenant or a forcible Detainer of the Premises.  *materially  

TRANSFER OF    Section 16.03 
INTEREST

     In the event of any  transfer or transfers  of  Landlord's  interest in the
Premises,  the  transferor  shall  be  automatically  relieved  of any  and  all
obligations and liabilities on the part of Landlord  accruing from and after the
date of such transfer. If any security deposit has been made by Tenant, Landlord
may transfer such security  deposit to such transferee,  and thereupon  Landlord
shall be discharged from any further liability with respect thereto.

FLOOR              Section 16.04 SEE ADDENDUM
AREA
  
     "Floor Area" as used in this lease means,  with respect to the Premises and
with respect to each store separately leased, the aggregate of (a) the number of
square feet of floor space on all floor levels,  including mezzanines,  measured
from the center line of party walls  between  tenant areas and the exterior face
of all other  walls,  and (b) all  outside  selling  areas  used for the sale of
merchandise by tenants.  No deduction or exclusion from Floor Area shall be made
by  reason  of  columns,  stairs,  elevators,   escalators,  or  other  interior
construction or equipment. Landlord may, at any time and from time to time, make
changes or  additions  to the Center  which result in an increase or decrease in
the  aggregate  Floor Area  occupied or designed for occupancy by tenants of the
Center provided,  that,  except as provided  herein,  no such change or addition
shall  increase or decrease the Floor Area of the  Premises,  ' Landlord  shall,
upon  |^|omplction  of Tenant's  Work,  cause the Prcmiscs to bc  rcmcasurcd  by
Landlord's architect in accordance with the provisions of this Section and shall
include the Floor Area of thc  Premises  as so  determined  in tbe  supplemental
agreement as to the Rent  Commcnccment Date provided for in Section 2.02. In the
event that the Floor Area of tbe Premises as so  determined is greater or lcsscr
than that set forth in the  applicable  Fundamental  Lcase  Provision,  Landlord
shall,  cffectivc as of the Rent  Commencement  Date, adjust the monthly Minimum
Rent  (bascd  upon  thc  pcr  square  foot  rate  sct  forth  in the  applicable
Fundamental  Lcase  Provision) and all items of additional rent bascd upon Floor
Area (bascd upon the applicable  charge rates in effect at tbe Rent Commencement
Date),  and shall  supply to Tcnant a statemcnt  setting  forth,  in  rcasonable
detail, such adjustments.  Any additional Minimum Rent or additional rent due as
the result of such  adjustment  shall be paid by Tcnant to  Landlord  within tcn
(10) days aftcr Tenant's  receipt of Landlord's  statement;  any  overpayment by
Tenant shall bc creditcd against thc ncxt rcnt payable by Tcnant.  Subsequcnt to
such adjustmcnt, Tcnant shall pay monthly Minimum


<PAGE>



     Rcnt based upon such adjusted  Floor Area and all items of additional  rent
based upon Floor Area in tbe adjusted amounts sct forth in such statement.  Upon
any  change in the  Floor  Area of the  Center,  Landlord  shall  make a similar
adjustment  to additional  rent  pursuant to this  Section.  the Premises upon a
default  by Tenant  hereunder.  lf any  portion  of said  deposit  is so used or
applied,  Tenant  shall  within  five (5) days after  receipt of written  demand
therefor  deposit  cash with  Landlord  in an amount  sufficient  to restore the
security deposit to its original amount and Tenant's failure to do so shall be a
material  breach of this  lease,  Landlord  shall not be  required  to keep this
security  deposit  separate  from its  general  funds,  and Tenant  shall not be
entitled to  interest  on such  deposit.  lf Tenant  shall fully and  faithfully
perform  every  provision  of this lease to be  performed  by it,  the  security
deposit  shall be applied  against any amounts owed by Tenant to Landlord at the
expiration  or  termination  of this  lease  and any  balance  thereof  shall be
returned to Tenant (or at  Landlord's  option,  to the last assignee of Tenant's
interest  hereunder)  within the time specified in California Civil Code Section
1950.7.  

     (b) Tenant shall, prior to or upon its execution and delivery of this Lease
to Landlord,  provide to Landlord current financial statements  consisting of at
least (i) a balance  sheet of Tenant as of a date within  ninety (90) days prior
to Tenant's execution of this lease, (^n) an income or profit and loss statement
of Tenant for its last full fiscal  year and (^ni) if Tenant's  last full fiscal
year ends more than ninety (90) days prior to the date of Tenant's  execution of
this lease, a profit and loss statement for the period from the end of such last
full fiscal year to a date within ninety (90) days prior to the date of Tenant's
execution of this lease. If such financial statements are audited or reviewed by
an independent public accountant, such financial statements shall be accompanied
by the letter or  certificate  of such  accountant.  Otherwise,  such  financial
statements shall be accompanied by a certificate  executed by Tenant or Tenant's
chief financial  officer  certifying as to the accuracy and completeness of such
financial statements.

LATE           Section 16.06  See Addendum
PAYMENTS   
AND
DELIVERIES

     (a) Any amount due from Tenant to Landlord  hereunder  which is not paid to
Landlord  when due shall bear  interest  at the maximum  rate of interest  which
Landlord is the permitted to charge by the applicable  usury law,  accruing from
the date due until the same is fully paid.  Payment of such  interest  shall not
excuse or cure any default by Tenant  pursuant  to this  lease.  Such rate shall
remain in effect  after the  occurrence  of any breach or default  hereunder  by
Tenant to and until  payment of the entire  amount due. 

     (b) TENANT  ACKNOWLEDGES  THAT THE LATE  PAYMENT BY TENANT TO LAND- LORD OF
RENT AND OTHER SUMS DUE HEREUNDER AND THE FAILURE TO DELIVER ON TIME GROSS SALES
REPORTS AND OTHER ITEMS  REQUIRED TO BE DELIVERED  WILL CAUSE  LANDLORD TO INCUR
COSTS  NOT  CONTEMPLATED  BY THIS  LEASE,  THE  EXACT  AMOUNT  OF WHICH  WILL BE
EXTREMELY  DIFFICULT TO ASCERTAIN.  SUCH COSTS MAY INCLUDE,  BUT ARE NOT LIMITED
TO,  ADMINISTRATIVE,  PROCESSING AND ACCOUNTING CHARGES,  AND LATE CHARGES WHICH
MAY BE  IMPOSED  ON  LANDLORD  BY THE  TERMS  OF ANY  ENCUMBRANCE  COVERING  THE
PREMISES.  ACCORDINGLY,  IF ANY SUM DUE FROM TENANT,  ANY GROSS SALES REPORT DUE
FROM TENANT OR ANY OTHER ITEM DUE FROM TENANT'  HEREUNDER  SHALL NOT BE RECEIVED
BY  LANDLORD OR  LANDLORD'S  DESIGNEE  WITHIN * DAYS AFTER THE DATE DUE,  TENANT
SHALL PAY TO LANDLORD, IN ADDITION TO AN INTEREST ON DELINQUENT AMOUNTS PROVIDED
ABOVE,  A LATE  CHARGE  EQUAL  TO THE  GREATER  OF TWO  PERCENT  (2|^|o)  OF THE
DELINQUENT  AMOUNT  (IF  APPLICABLE)  OR $ 100.00,  AS  LIQUIDATED  DAMAGES  PER
OCCURRENCE.  THE  PARTIES  AGREE  THAT SUCH LATE  CHARGE  REPRESENTS  A FAIR AND
REASONABLE ESTIMATE OF THE COST LANDLORD WILL INCUR BY REASON OF LATE PAYMENT OR
LATE DELIVERY BY TENANT.  ACCEPTANCE OF SUCH LATE CHARGE SHALL NOT  CONSTITUTE A
WAIVER OF  TENANT'|^|"S  DEFAULT WITH  RESPECT TO SUCH  OVERDUE  AMOUNT OR OTHER
ITEM, NOR PREVENT LANDLORD FROM EXERCISING ANY OTHER RIGHTS AND REMEDIES GRANTED
HEREUNDER OR BY LAW TO LANDLORD.

     (c) If Tenant shall. during any six (6) month period, be more than ten (10)
days  delinquent  in the payment of any rent or other  amount  payable by Tenant
hereunder on three (3) or more occasions then,  notwithstanding  anything herein
to the  contrary,  Landlord may, by written  notice to Tenant,  elect to require
Tenant to pay all Minimum Rent and additional rent payable  hereunder  quarterly
in advance.  Such right of  Landlord  shall be in addition to and not in lieu of
any other right or remedy  available to Landlord  hereunder or at law on account
of Tenant's default hereunder.

SEPARABILITY    Section 16.07
                      
     Any  provision  of this lease  which  shall  prove to be  invalid,  void or
illegal shall in no way affect,




<PAGE>

INCORPORA-       Section 16.10
TION OF PRIOR 
AGREEMENTS
AMENDMENTS
COUNTERPARTS

     This lease and the exhibits  and any addenda  hereto cover in full cach and
evcry agreemcnt of ; every kind or nature wbatsocver  betwcen the parties bereto
conccrning thc Prcmiscs and thc Ccntcr,  and all  preliminary  negotiations  and
agreements of whatsocver kind with respect to thc Premises or the Centcr, ezcept
tbose  contained  berein,  arc superseded and of no furtber force or cffcct.  No
person,  firm or corporation  has at any time had any authority from Landlord to
make any rcpresentations or promiscs on bebalf of Landlord, and Tenant ezpressly
agrees tbat if any sucb  representations  or promises bave becn made by Landlord
or others,  Tenant hereby waives all right to rely thereon.  No verbal agrecmcnt
or implied  covcnant sball be beld to vary the provisions  hereof,  any statute,
law or custom to tbe contrary notwithstanding. No provision of this lease may be
amended  or addcd to exccpt by an  agrecmcnt  in writing  signed by thc  partics
bcrcto or tbcir  respective  successors  in  interest.  No  employee or agent of
Landlord  sball  havc  autbority,   by  letter,   memorandum  or  other  written
communication,  to amend,  vary or delete  any  provision  of this  lease or any
exhibit hereto, unless such written instrument bears the signature of Landlord's
managing gcncral partncr. This lease sball be construcd strictly neitber against
Landlord nor Tenant. This lease shall be ezecutcd in several counterparts,  eacb
of which shall be deemed an original,  but all of whicb shall constitute one and
thc same instrument. 

NOTlCES                  Section  16.11 SEE  ADDENDUM ,  request,  demand  or
                         other  communication  

     Any notice,  consent or  approva|^|"Notice")  rcquircd or  pcrmittcd  to bc
given hcrcundcr shall bc in writing and may bc scrvcd  pcrsonally or by mail; if
servcd by mail it sball bc addresscd as spccificd in thc applicable  Fundamental
Lcase  Provision.  , . Any Notice whicb is personally  served shall be effectivc
upon service;  any Notice given by mail sball be deemed  effectively  given,  if
deposited in the United  States mail in tbe State of  California,  rcgistcred or
certified with return rcccipt  rzquested,  postagc  prepaid and addrcsscd |^| as
spccified  in the  applicable  Fundamental  L,casc  Provision,  on thc  datc  of
rcceipt,  refusal or non-dclivcry  indicated on tbc return receipt. In addition,
cithcr party may send Noticcs by  fi|^|S|^|.|^|t  any reputable  couricr service
which  provides  written proof of delivcry.  Any Notice sent by courier shall be
effective  upon tbe date of  delivery  as set  fortb in tbc  courier's  delivery
rcceipt.  Eitber party may, by Noticc to the other from time to time,  specify a
different address for Notice purposes.

BROKERS        Section 16.12

     Tenant  warrants that it has had no dealings witb any real estate broker or
agcnt in  connection  with the  negotiation  of this lease,  excepting  only tbe
broker, if any, named in tbe applicable  Fundamental  Lease Provision,  and tbat
Tcnant knows of no otber real estate  broker or agent who might be cntitled to a
commission in connection with this lease.  Tcnant expressly agrees and covenants
to hold I,andlord harmlcss and to defend Landlord from any claims, thrcatened or
assened,  by any brokcr,  finder or agcnt  claiming  undcr or through  Tcnant in
connection  witb tbe  negotiation  and  ezecution  of tbis lcase.  Any brokcr or
finder specified in tbe applicable  Fundamental Lease Provision shall bc paid by
Landlord but only in such  amount(s) and at sucb time(s) as shall bc agreed upon
in  writing by  I,andlord  and such  broker or finder.  Paymcnt of any broker or
finder  claiming  througb Tenant shall,  ezcept as set fortb in the  immcdiatcly
prcccding scntencc, be the sole responsibility of Tenant.

WAIVERS       Section 16.13

     No waiver  of any  provision  hcreof  shall be deemed a waivcr of any other
provision hercof. Consent to or approval of any act by one of tbe parties hereto
shall not be dccmed to rendcr  unnccessary thc obtaining of such party's consent
to or approval of any subsequcnt act.  Failure of Landlord to take any action or
send any  notice to Tenant  shall  not be  deemed a waiver  by  Landlord  of any
failure by Tenant to timcly and properly  exercise any option  granted to Tenant
pursuant to this lease or any  amendment  hereto.  Any such option  whicb is not
ezercised  within  the time  and in the  manner  specified  for  ezercise  shall
automatically  lapse witbout  rcquirement  of any action by Landlord.  No act or
thing done by Landlord or Landlord's  agents during the tcrm of this lease shall
be deemcd an acceptance of a surrender of the Premises, unless done in a


<PAGE>



     writing  signed by Landlord.  Tenant's  delivery of keys to any employee or
agent  of  Landlord  shall  not  opcratc  as a  tcrmination  of this  leasc or a
surrcnder of the Premises  unless donc  pursuant to a written  agrcemcnt to such
effect czccutcd by Landlord.

RECORDING      section 16.14   See Addendum


ADVERTISING    Section 16.15 
AND
PROMOTIONAL
FUND

     (ii) The initial annual  contribution to the Fund by Tenant shall be at thc
rate pcr square foot of Floor Area set fortb in the applicable Fundamental Lcase
Provision  (or in thc  minimum  amount of $2,500  per  year).  Tenant's  initial
contribution  may be  adjusted  at tbe cnd of  cach  leasc  ycar  as  rcasonably
determined by Landlord to be necessary to cover increased costs in operating tbc
Fund and/or to  advertise  and promote  the Center in a manner  satisfactory  to
Landlord.  The rate uscd for detcrmining tbe amount of Tenant's contributions tn
the Fund be tbe samc ratc uscd in dctcrmining thc amount of contributions to the
Fund by othcr  tenants of the  Cent|^|i'|^|  Contributions  to tbe Fund shall be
additional  rent  pursuant  rn this  lease,  and  failure  of  Tcnant to pay any
requircd  contribution to tbe Fund as and when due shall|^|e  |^|eemed a default
under this Iease  cntitling  I.andlord to ezercise  all rcmedies  availablc to a
landlord against a defaulting tenant, including those set forth in Article XIIl.

     (iii)  Landlord  agrees to contribute to the Fund each lease year an amount
equal to twenty-5ve percent (25|^|Fo) of the aggregate  contributions of tenants
of  thc  Centcr  to  the  Fund,   provided  that  thc  aggrcgate  of  Landlord's
contribution  to the Fund for any lcase  year  sball not  ezceed  $30,000.  

     (iv) Landlord shall have the ezclusive rigbt to hire a markcting  dircctor,
sccrctary and other personnel who, in Landlord's sole judgment,  are required to
carry  out tbe  purposes  of tbe  Fund.  All such  personnel  sball be under tbe
exclusive control and supervision of Landlord, wbo shall have the solc authority
and  rcsponsibility  to bire and discbarge sucb personnel and to determine their
compensation and benefits.  Landlord shall have the sole authority to direct tbe
pcrformancc by such pcrsonncl of thcir activitics, including but not limited to,
placement of  advertising,  sebeduling of  promotional  events and attcndance at
trade or industry  conventions.  

     (v) Landlord shall have tbe cxclusive right to sclcct a committcc, composcd
of a reprcscntativc of Landlord and at least four (4) representatives of tenants
at tbc Ccntcr,  to rcndcr advicc to Landlord in connection with  promotional and
advcrtising  activitics  conducted  through the Fund. All such committec membcrs
shall be  selectcd  by and shall serve at tbe  pleasure  of  Landlord.  Tbc solc
function  of such  committee  shall be to rcndcr  advicc whcn and if requircd by
Landlord,  and such  committec  shall bavc no  approval  or consent  rights witb
respect  to  Landlord's  decisions  concerning  thc use of the Fund.  |^| , 

     (vi) Notbing  :ontained  berein shall rcquirc Landlord to spend more in any
lcase  ycar  in  operating   the  Fund  tban   Landlord   collects  from  tenant
contributions  to the Fund  plus  Landlord's  contribu-  tion  specified  above.
Landlord may cbarge all costs and  czpenscs of  operating  the Fund in any lcase
year against the budget  thcrcfor.  Said costs and expenses may include  witbout
limitation  tbe  following:  

     (A) the  scrvices  of a  markcting  dircctor  and all  sta|^|'  and outside
consultants  (including  professional  markcring service  organizations)  decmed
neccssary  by  Landlord  to carry  out  effectively  tbe  purposes  of the Fund,
including without limitation all payroll, payroll taxcs and cmploycc bcncfits of
any such  director  and staff;  

     (B) sucb  reasonable  amount of space within tbe Ccnter or elscwhere as may
be necessary to operate th|^|e Fund, the rental therefor to be comparable to tbe
rcntals for similarly sized tenant spaces in tbe Center;  , 

     (C) all actual costs  incurrcd in  advcrtising  and  promoting  tbe Centcr,
including without limitation radio, newspaper,  television,  direct and indirect
costs of services,  artwork, copy, printing, paper, stationery and supplies; and

     (D) such  office  equipment,  utilities  and  telephones  as may be  deemed
neccssary  by tbc  promotional  director.  

     (c) In addition to Tenant's annual  contribution to tbe Fund,  Tenant sball
also pay to Landlord on execution of this leasc an initial advertising cbarge in
tbe amount  specified  in tbe  applicable  Fundamental  I,ease  Provision.  Such
initial advertising cbarge sball be used by Landlord


<PAGE>



     for promotional and  adv:rtising  activities  related to tbe opening of tbe
Premises.  

*shall  

**other than major  department  stores.  

LIENS  Section 16.16

     Tenant  shall do all things  reasonably  necessary to prevent the filing of
any  mcchanics'  or other liens against the Ccnter or any part tbereof by rcason
of work, labor,  services or matcrials supplied or claimed to have been supplied
to Tcnant, or anyone holding the Prcmiscs, or any part tberoof, through or under
Tcnant.  If any such lien shall at any timc be filcd against tbc Centcr,  Tenant
shall either cause the same to be  discharged  of record within twcnty (20) days
aftcr tbc datc of filing of thc samc or, if Tenant in Tcnant's discrction and in
good faitb  dctcrmincs  that such licn should be  contcstcd,  sball furnish sucb
security  as  may be  ntcessary  or  required  to (i)  prcvcnt  any  forcclosurc
proceedings  against thc Center  during tbe pendcnry of such  contcst,  and (^n)
cause Ticor Titlc Insurance Company of California or otbcr mutually satisfactory
title company to rcmove such licn as a mattcr  aBecting title to tbc Centcr on a
titlc rcport or titlc policy issucd with rcspect to thc Center.  If Tcnant shall
fail to either  discharge such lien or furnish such security within sucb period,
tben,  in  addition  to any other  rigbt or remedy of  Landlord  resulting  from
Tenant's said dcfault .. . .'



<PAGE>



SUBORDINA-       Section 16.17
TION   

     This lease sball, at Landlord's  option,  be eitber supcrior or subordinate
to all  ground or  undcrlying  leases and any  mortgage,  deed of trust or otber
security instrument that may exist or bercafter be placed upon the Center or any
part  thereof  and to any and al)  advances  to be  made  tbcrcunder  and to tbe
intcrcst  tbercon and to all  renewals,  replacements  and  extensions  thereof.
Tcnant shall,  upon writtcn demand by Landlord,  (a) execute such instruments as
may be required at any time and from time to time to subordinate  the rigbts and
interests of Tenant under tbis lease to any such ground lease or the licn of any
sucb mortgagc, dced of trust, or other security instrumcnt,  or, if requested by
Landlord, to subordinatc any such ground lcasc, mortgage, deed of trust or other
security  instrument to this lease, . Providcd,  bowcvcr,  that Tcnant sball, in
the event any  proccedings  are brought for the tcrmination of sucb ground leasc
or tbc  forcclosure of any such mortgage or deed of trust,  attorn to tbe ground
lessor or purcbaser upon foreclosure salc or sale under power of sale, and sball
recognize such ground lcssor or purchascr as Landlord under this leasc,  and, so
long as Tenant is not in default  hercunder,  such  tcrmination  or  foreclosure
shall not tcrminate this lcase or otherwise affect Tenant's rigbts hereunder.

TENANTS          Section 16.18
AUTHORITY    

     Each  individua:  executing  this lease on behalf of Tenant  reprcscnts and
warrants  that the  execution  and delivery of this lease on bchalf of Tenant is
duly authorized,  that bc or sbc is authorizcd to execute and deliver tbis lease
on behalf of Tenant  and that tbis lease is binding  upon  Tenant in  accordance
with its  terms.  If Tcnant is a  corporation,  Tcnant  sball  also  delivcr  to
Landlord  concurrcntly  with cxecuted copies of this lease a certified copy of a
resolution  of Tenant's  board of directors or tbc cxecutive  committcc  thereof
authorizing  or  ratifying  tbe  execution  of tbis lease.  Failure of Tenant to
providc sucb resolution  shall not,  however,  relieve Tenant of its obligations
pursuant to this lease.

SAFETY AND       Section 16.19
HEALTH  

     Tenant  covenants at all times during tbe term of this lease to comply with
the requirements of


<PAGE>



     the  Occupational  Safety and Health Act of 1970, 29 U.S.C.  Section 651 et
seq. and any analogous legislation in California  (collectively,  the "Act"), to
tbe extent  tbat the Act applies to tbe  Premises  and any  activitics  therein.
Witbout  limiting tbe generality of tbe foregoing,  Tenant covenants to maintain
all working arcas, all machinery, structures, electrical facilities and tbe like
upon tbe Premises in a condition  tbat fully complies with the  requirements  of
tbe Act,  including  such  requirements  as would be applicable  with respect to
agents,  employees  or  contractors  of  Landlord  wbo may from  time to timc be
present upon the  Premises,  and Tenant  agrees to indemnify  and bold  harmless
Landlord from any liabilities, claims or damages arising as a result of a breach
of tbe  foregoing  covenant  and from all costs,  expenses  and charges  arising
therefrom  including,  without  limitation,  attorneys'  fees  and  court  costs
incurred by Landlord in connection thercwith.

INDEMNTITES      Section 16.20

     The   obligations   of  the   indemnifying   party  under  eacb  and  every
indemnification  and hold  harmless  provision  contained  in tbis  lease  sball
survive tbe  cxpiration  or earlier  termination  of tbis Iease to and until the
last to occur of (a) tbe last  date  permitted  by law for the  bringing  of any
claim or action  with  respect  to wbich  indemnification  may be claimed by the
indemnificd party against the indemnifying party under such provision or (b) tbe
date on wbicb any claim or action for wbich indcmnification may be claimed under
such provision is fully and finally resolved and, if applicable,  any compromise
thereof or judgment or award thereon is paid in full by tbe  indemnifying  party
and the  indemnified  party is  rcimbursed  by tbe  indemnifying  party  for any
amounts paid by the indemnified  party in compromise  thereof or upon a judgment
or award  thereon and in defense of such action or claim,  including  rcasonable
attorncys' fccs incurrcd. Payment shall not be a condition precedent to recovery
upon any indemnification provision contained berein.

NON-             Section 16.21 SEE ADDENDUM
DISCLOSURE               
OF LEASE
TERMS

     Landlord and |^|enant  agree that the terms of tbis lease arc  confidential
and constitute proprietary information of the parties bercto.  Disclosure of tbe
terms bereof could  adversely  affect the ability of Landlord to negotiate  witb
otber tenants of tbe Center.  Eacb of tbe parties hereto agrees that sucb party,
and  its  respective  partners,  o|^|ccrs,  dircctors,   cmployees,  agents  and
attorneys,  shall not  disclose  tbe tcrms and  conditions  of this leasc to any
other person witbout tbe prior writtcn  conscnt of thc otber party bcreto cxccpt
pursuant to an order of a court of competent  jurisdiction.  Providcd,  bowever,
tbat  Landlord  may  disclose  tbe terms  bcreof to any lendcr now or  hereaftcr
having a lien on Landlord's intcrcst in tbc Ccntcr, or any portion tbcreof,  and
cithcr  party may  disclose  the  term:  bereof  to its  respective  independcnt
accountants  who review its  respective  financial  statements  or vre|^|are its
rcsvectivc tax rcturns. to anv nrnsncctivc transfcrc|^|



<PAGE>
GENDER    Section 16.22
TENANTS


     indicated as Tenant herein,  each person or entity  subscribing as a Tenant
shall be jointly and severally  liable for all obligations of Tenant  hereunder.
Subject to the  provisions  of Article X, thc tcrms,  conditions  and  covenants
contained  herein  shall be binding  upon and inure to the bcnefit of thc heirs,
succcssors, ezccutors, administrators,  marital communities, if any, and assigns
of the partics hcreto.

FORCE         Section 16.23
MAJEURE                

     In the event that cither  Landlord or Tenant is delayed in  pcrforming  any
obligation  of Landlord or Tenant  pursuant to this  leas|^| by any cause beyond
the  rcasonable  control of the party required to pcrform such  obligation,  the
time period for performing such obligation shall be extended by a period of time
cqual to the period of the delay.  For the purpose of this Section:  

     (a) A cause shall be beyond the reasonable control of a party to this lease
when such cause  would  aflect any person  similarly  situated  (such as a power
outage, labor strikc or truckers' strike) but shall not be beyond the reasonable
control of such party when peculiar to such party (such as financial inability .
or failure to order long lead time materials  su|^|ciently in advance). 

     (b) Tbis Section  shall not apply to any  obligation  to pay money or delay
thc Rcnt Commcnce-  ment Date. 

     (c) In the cvent of any occurrence which a party  b|^|lieves  constitutcs a
causc  beyond  thc  reasonable  control  of such  party and which will dclay sny
pcrformance by such party bcrcundcr, such party shall promptly in writing notify
the other  party of the  occurrcnce  and nature of such cause,  thc  anticipated
period of delay and thc stcps being taken by such party to mitigate  thc cffccts
of such dclay.

YIELD UP      Section 16.24
PREMISES  

     At thc  expiration  or carlier  tcrmination  of tbis  lcase,  Tenant  shall
pcaccably  yicld up the  Prcmiscs and all  additions  made upon the same and the
keys  thereto to Landlord,  in the  condition  speci6ed in Section  16.28(a) and
shall executc,  acknowlcdge and delivcr to Landlord,  within fivc (5) days aftcr
writtcn  dcmand from Landlord to Tenant,  any quitclaim  dced or othcr  document
which may be rcasonably  requested by any reputable title company to remove this
lease  as a  matter  affecting  title  to thc  Premises  on a  title  policy  or
preliminary title report with respect to the Center.

RELOCATION   secaon 16.25 SEE ADDENDUM
OF TENANT

     Landlord,  at its sole expense, on at least 90 days prior written notice at
any time during the term,  may require Tenant to move from the Prcmises to other
space of comparable  size and decor in order to permit  Landlord to  consolidate
the space leased to Tenant with other  adjoining space leased or to be leased to
another  tenant.  Provided,  bowever,  that in the evcnt of  receipt of any such
notice,  Tenant,  by writtcn  notice to Landlord  given within  twenty (20) days
after receipt of Landlord's notice, may elcct not to movc to the other space and
in lieu thereof to terminate this lease, effectivc 60 days after tbe date of thc
original notice of relocation by Landlord.  ln the cvcnt of any such rclocation,
Landlord will pay all cxpcnscs of prcparing and  decorating  the new premises so
that they will be substantially  similar to the Prcmises and I.andlord will also
pay the expense of moving Tenant's trade fixtures and equipment to the relocated
premises. In such event this lease and each and alI of the terms,  covenants and
conditions  hcreof shall remain in full force and effect and thereupon be deemed
applicable to such new space except tbat: 

     (a) The  applicable  Fundamental  Lease  Provisions  shall be  revised  and
substituted  to  rcflcct  the new  premises,  any  change in Floor  Area and any
changes in the Minimum Rent and  additional  rent,  e|^|ective as of the date of
relocation,  resulting  from a di6'erence  in the Floor Area of the Premises and
such substituted  premises.  

     (b) Tnere shall be no abatement of any rent payable bereunder on account of
Tcnant's  relocation  or any  inconvenience  nr  business  loss caused to Tenant
thereby.

NO OPTION     Section 16.26

     Submission  of this  lcase to Tenant  shall not be dcemed to be an offcr or
option  for  Tcnant to lease the  Premises  or a  reservation  of the  Premises.
Landlord  shall not be bound  hereby until its delivery to Tenant of an cxecuted
copy hcrcof signed by Landlord,  already having bcen signed by Tenant, and until
such delivcry  Landlord  rcserves the right to czhibit and lcase the Premises to
othcr prospective tenants.


<PAGE>
     Notwithstanding  anything  contained  hcrein to the contrary,  Landlord may
withhold  delivcry of  possession of the Premises from Tenant until such timc as
Tcnant bas paid to Landlord |^|and any other sum owed pursuant  hercto,  and has
dclivered to Landlord a certificate as to Tenant's insurance pursuant to Article
VIII,  ccrtificd  rcsolutions  pursuant to Scction 16.18 (if applicable) and any
guaranty required with respect to Tenant's obligations.


TERMINATION     Section 16.28
                        
     If this lease is terminated by Landlord  under any  provision  hercof,  and
upon the ezpiration of the term of this lease  (collcctively,  the  "tcrmination
date"),  tbc following  sball pcrtain:  

     (a) Tenant shall,  within fiftcen ( I 5) days after the  termination  date,
removc from thc Premises all mercbandise,  furniture, furnisbings, equipment and
movable  trade  fixtures  and shall  surrcndcr  thc Premises to I,andlord in the
condition required by Sections 7.02(c), 7.03 and 7.04. Tenant sball, at Tenant's
cost, repair any damage zo the Premises caused by such removal.  Any items wbicb
Tenant is permittcd to remove but fails to remove prior to the  surrender of the
Premises to Landlord  shall be deemed  abandoned by Tenant,  and  I,andlord  may
retain or  dispose  of the same as  Landlord  sees fit  without  claim by Tenant
thereto or to any proceeds thereof.  If Landlord elects to remove and dispose of
any such items abandoned by Tenant,  the cost of such removal and disposal shall
be additional  rent payable by Tenant to Landlord upon demand.  Tenant sball pay
all amounts  payable by it through the  tcrmination  date and any costs  charged
pursuant to the immediately  preceding sentence,  cacb of thc parties sball bear
tbeir own costs and fees incurred  (including  all costs  incurred in performing
their respcctivc  obligations  bcrcundcr)  through the termination date and from
and after the termination datc neither party sball have any furtbcr  obligations
to the other,  except for tbose  obligations  set forth in this  subsection,  in
Section 16.16 and in subsection (b) below. 

     (b)  Notwitbstanding  tbe  provisions  of  subsection  (a),  upon  any such
tcrmination or cxpiration,  the following shall pertain:  

     (i) Landlord agrees to defend,  indemnify and hold harmless Tenant from and
against any and all claims, costs, czpcnses, losses, damagcs, actions and causcs
of action for whicb Landlord is responsible undcr tbis lcasc and which accruc on
or bcforc tbc tcrmination date. 

     (ii) Tcnant agrces to defend, indemnify and hold harmlcss Landlord from and
against any and all claims, costs, losses, expenses, damagcs, actions and causes
of action for whicb Tcnant is  responsible  under this leasc and wbicb accrue on
or bcforc thc tcrmination datc. (^ni) Tcnant shall rcmain liable for thc cost of
all utilitics uscd in or at thc Prcmiscs


<PAGE>
     through  the  termination  date  accrued  and  unpaid,  whether or not thcn
billed, as of tbe termination datc until full payment thereof by Tcnant.  Tcnant
shall  obtain  directly  from the  companies  providing  such  scrvices  closing
statements  for all services  rendered  througb the  termination  date and shall
promptly  pay thc same.  If any utility  statement  with respect to the Premises
includes chargcs for a pcriod partially prior to and partially subsequent to the
termination date, such charges shall be prorated as between Landlord and Tenant,
with Tenant  responsiblc  for tbe  portion  thereof  (bascd upon a fraction  thc
numerator  of whicb is the number of days of service on sucb  statcmcnt  througb
tbc termination date and thc denominator of which is the total numbcr of days of
service on such statcment)  through tbe  termination  date and Landlord shall be
responsible  for the  balance.  Tbe party  receiving  any such  statement  whicb
requires  proration  bereunder  shall  promptly pay such statement and the other
party shall,  within ten ( 10) days after  rcccipt of a copy of such  statement,
rcmit to tbe party paying tbe statcmcnt any amount for which such other party is
responsible bereunder.

     (iv) Tenant shall remain responsible for any taxes of the type dcscribed in
Scction 5.03 and assessed against tbe Premises and the pcrsonal propcrty located
tberein or tbereon with a lien date prior to the termination datc,  irrespcctive
of tbe date uf tbe  billing  thcrefor,  and shall  indcmnify  and hold  Landlord
barmless  with  respect  to any  claims  for  such  taxes  or  resulting  from
non-payment tbereof.

TAX              Sectioa 16.29  SEE ADDENDUM
BENEFITS

     Landlord   shall  be  entitled  to  all  tax  benefits   arising  from  all
construction by Landlord with respect to the Premises and any allowance provided
by  Iandlord  to Tenant  pursuant  to this  lease.  Subjcct  to the  immediately
preceding  sentence,  Tenant shall be cntitled to all taz benefits  arising from
Tenant's Work with respect to the Premiscs  pursuant to Section  17.03,  arising
fiom any  altcrations  to or renovation  of thc Premises  conducted by Tenant or
arising  from  tbe   installation  by  Tcnant  in  the  Premises  of  furniture,
furnishings and equipment. Neithcr party shall claim or attempt to claim any tax


<PAGE>



     benefits whicb are thc property of tbe otber party bereunder. ,



ACCORD            Section 16.30
AND
SATISFACTION
    
     (a) Thc receipt, retention,  cashing, depositing or cndorsemcnt by Landlord
of any check,  draft or other  instrument of paymcnt  delivered by Tenant or any
proposed  assignee  of or  successor  to  Tenant  sball  not be  deemed to bc an
acccptance  by Landlord of any  attempted  alteration,  assi|^|ment  or notation
written on said  instrumcnt  by the maker  tbcrcof.  

     (b) No payment by Tenant or receipt by Landlord of a lesser amount than tbc
rcnt hcrcin

FINANCING      Section 16.31

     this lease prepared by Landlord and embodying such changes, so long as such
changes do not |^|l|^|- increase Tenant's obligation ereunder. ln the event that
Tenant shall fail to ezecute and delivcr such amendment  within twenty (|^| days
after  receipt  thcreof by  Tenant,  sucb  failure  shall  constitutc  a default
hereunder by Tenant and shall  cntitle  Landlord to all rcmcdics  available to a
landlord against a defaulting tenant pursuant to a written lease,  including but
not limited to those  remedies sct forth in Anicle XIII.  *or decrease  Tenant's
rights

                                  ARTICLE XVII
                            CONSTRUCTION OF PREMISES

CONDITION        Section l7.O1  SEE ADDENDUM
OF
PREMISES



DESIGN         Section 17.02 SEE ADDENDUM
REVIEW 

     On or  before  tbe  date  specified  in tbe  applicable  Fundamental  Lease
Provision,  Tenant and  Landlord's  architect  sball bold a  preliminary  design
meeting (the "PDM"),  to review and discuss  Tenant's  Work  pursuant to Section
17.04.  The PDM shall be subject to and in accordance  witb the  following:  

     (a) Tenant shall be  responsible  to schedule tbe PDM promptly upon receipt
by Tenant of a fully  executed  copy of this lease.  The PDM shall be  scheduled
through Landlord's  architectural  dcpanmcnt at (714) 546-0110. In no event will
Landlord review and approve working drawings and  specifications  until the PDM
has been beld.


<PAGE>



     (b) Tenant  sball  cause its  architect  and any othcr  person(s),  sucb as
interior design  consultants  and  electrical/mechanical  engineers  employed by
Tenant in conncction  with Tcnant's Work,  whom Tcnant believes will be involved
in tbe design of  Tenant's  Work,  to attend the PDM.  Landlord  sball cause its
architcct and any consultant(s) deemed necessary by I,andlord to attend tbe PDM.


     (c) At least  three (3) days  prior to the PDM,  Tenant  sball  delivcr  to
Landlord's  architect eac5 of the following:  

     (i) A conceptual color board with colors and matcrials which Tenant intends
to use as pan of Tenant's Work;

     (ii) A conceptual  dimensioned  store front  elevation  with all colors and
materials  idcntificd and Tenant's sign depicted on tbe Premises  storefront or,
in  the  alternative,  photographs,  anists'  renderings  or a  study  model  of
storefronts previously constructed by Tenant;

     (iii) Material samples of the conceptual  interior floor covering and entry
floor covering which Tenant proposes to use in the Premises;  and 

     (iv) Any other samples, pbotographs or renderings of other Tenant locations
which Tenant  believes will be useful to Landlord in reviewing  and  considering
Tcnant's  proposed concept for the Premises.  All materials  submitted by Tcnant
sball be tagged or othcrwise  idcntified to Tenant and shall be dated.  All such
materials will be retained by Landlord until completion of Tenant's Work. 

     (d) At tbe PDM, the following sball occur:  

     (i) Landlord's  architect sball review Tenant's submission and shall orally
and in writing advisc Tenant of any items whicb dn not mcet tbe  requiremcnts of
Ezhibits  "C" and "u." 

     (ii) Landlord and Tcnant sball establisb a dcsign and construction schedule
(in  bar-chan  form) for design and  construction  of  Tcnant's  Work.  Howevcr,
nothing  contained  on sucb  scbcdule  shall be deemed or  construed to alter or
affect the Rcnt  Commcnccmcnt  Date. 

     (iii) Tcnant shall dcsignatc one individual cmployec or agent svho shall be
authorizcd  to act on bcbalf of Tenant with rcspcct to all matters  penaining to
tbis lcase,  including all matters rclativc Io Tcnant's Work. Landlord may treat
any  approval  or conscnt  givcn by such  person as the  approval  or consent of
Tenant.  Tenant  may,  by  written  noticc to  Landlord,  changc  its  daignatcd
rcprcscntativc  with  respect to matters  arising  after thc datc of  Landlord's
receipt of such notice. 


<PAGE>



PLANS FOR         Sectioo 17.03 SEE ADDENDUM
TENANT'S 
WORK

     (a) Promptly upon completion of thc PDM, Tenant,  at Tcnant's solc cost and
czpcnsc,  shall cause to be prepared and  delivcred  to Landlord for  Landlord's
approval  four  (4)  sets  of  working  drawings  and  specifications  ("working
drawings") prepared in conformity witb thc applicablc provisions of Ezhibits "C"
and "E" by a ticensed  architect  approved by Landlord.  Landlord shall promptly
notify  Tenant of thc respects,  if any, in which said working  drawings fail to
conform to tbe  applicable  provisions of Ezbibits "C" and "E," and Tenant shall
promptly  make any  revisions  necessary  to  corrcct  such  matters  and obtain
Landlord's  approval.  Landlord's  approval,  which  shall  not be  unreasonably
withbcld or delaycd,  shall bc evidcnccd by Landlord's  causing one ( 1 ) set of
such working drawings to be initialed on its bchalf and returned to Tenant.  

     (b) After  Landlord's  approval of Ihe working  drawings no change shall be
made therein except as provided in this  subsection  (b): * ** 

     (i) No  change  may be made  by|^||^|  without  the prior  written  conscnt
of|^|t|^|r|^|liar (which shall not be unreasonably withheld or delayed); and ***


     (ii) All arcbitectural  services  necessitated shall be rendered by ' . 

     (c) For  purposes of design and  approval of Tenant's  Work:  

     (i) Tenant's  working  drawings  shall contain  detailed  depictions of all
aspects  of  Tenant's  Work,  and shall be at lcast as  detailed  as the  sample
drawing and storefront  elevation  attached to Ezhibit "E." 

     (ii) Tenant shall bc solcly rcsponsible to cnsure compliancc with Divisions
1-4 of Titlc 24 of the California Administrative Code. Accordingly,  at or prior
to the date tbat Tenant submits its working  drawings to Landlord,  Tenant shall
submit to La,:idlord (A) enginecred  electrical drawings for tbe Premiscs signcd
by an electrical cngineer liccnsed in the State of California and (B) a complcte
sct  of  calculations  showing  the  clectrical  load  for  the  Prcmises  (upon
completion of Tcnant's Work) and dcmonstrating compliance, both as to electrical
and mechanical requirements, with Title 24. 

     (iii) Landlord's rcview and approval of specifications and working drawings
pursuant  to this  Section  shall  indicate  no more  than  aesthetic  approval.
Approval by Landlord shall not relieve Tenant of


<PAGE>
     its  obligation to obtain all  approvals and pcrmits from all  governmental
autborities having jurisdiction or constitute a warranty tbat any items approved
by Landlord  comply with  applicable  law or any  rcquiremcnts  of  governmental
authorities havingjurisdiction. 

     (d)Concurrcntly  . with each  submittal  by Tenant to Landlord of any plans
and specifications for work to be undcrtaken in thc Premises after completion of
Tenant's Work (e.g., any latcr rcmodel or othcr alteration),  Tcnant shall again
pay to  Landlord  a plan  review fee of One  Thousand  Five  Hundred  Dollars ($
1,500.00). Landlord shall have no obligation to review any plans, specifications
or working  drawings  submitted by Tcnant until it also receivcs the plan review
fee applicable thereto.

TENANT'S           Section 17.04  SEE ADDENDUM
WORK
     (a) As a maten|^|  consideration  for the  execution  by  Landlord  of this
lcase,  Tcnant  agrccs to construct  tenant  improvemcnts  in the Premises  with
quality work using first class matcrials. Such work of redecorating,  remodeling
and  renovating  ("Tenant's  Work") shall include a new storefront and sign, ncw
fixtures,  and new wall and floor  coverings.  Landlord  and  Tenant  agree that
Landlord  shall,  in ezcrcising  its  approv|^|  rigbts witb respect to Tenant's
Work,  bave the rigbt to insist on a distinctive,  high quality store using only
first class  materials  and  workmanship  and mceting the specific  oriteria set
forth in this lease. ,.


     Subject  to tbe  foregoing,  however,  L,andlord's  approvals  pursuant  to
Section  17.03  sball not be  unreasonably  withheld  so long as  Tenant's  Work
complics  with  thc  applicable   rcquirements  of  Ezbibits  "C"  and  "E"  and
governmental  autborities  having jurisdiction.  

     (b) Tenant sball cause Tenant's Wo:k to be performcd by a licenscd  gencral
contractor or contractors approved by Landlord,  whicb approval must be obtaincd
prior to solicitation  of contract bids.  Tenant's Work sball be commcnced on or
before  the  outside  date  for  commencement  of  sucb  work  specificd  in the
applicable  Fundamental Lease Provision.  Tenant shall cause Tenant's Work to be
completed in accordance  with the applicable  provisions of Exhibits "C" and "E"
on or before tbe Rcnt Commcncemcnt Date and shall open thc Prcmises for business
upon such complction,  baving  tberetofore,  at its solc ezpense,  completed tbe
cquipping,  dccoration  and stocking of thc Premiscs to tbe eztcnt  ncccssary to
cnable it to so open for business.  



<PAGE>



     with all final signatures there|^|n. As and when progress payments are made
by Tcnant with rcspect to Tcnant's Work,  Tenant shall obtain,  from each person
furnishing  labor or  matcrial  with  rcspect to  Tcnant's  Work,  unconditional
waivers and releases of lien claims in the forms  rcquircd by  California  Civi1
Codc Section 3262. 

     (d) I,andlord and Tenant  acknowledge that rcview by the City of Costa Mcsa
(the  "City") of plans for and  issuance of a perlnit  with  respect to Tenant's
Work may rcquire  sevcral wccks duc to the backlog of projects  currently in the
City awaiting  review and approval.  Landlord has madc  amarigemcnts to expeditc
such  process  by  use  of  an  indcpendcnt   engineer  approved  by  thc  City.
Accordingly,  in  conncction  with  Tenant's  Work,  Tenant  shall enter into an
Accelerated  Building Plan Review Agreement (the  "Agreement") with the City and
an engineer  approved by thc City and  dcsignated by Landlord and in the form of
Ezhibit "F" attacbed  hereto.  All plans witb respect to Tenant's Work requiring
City  approval  shall be submitted to such  engineer for review and approval and
all fees and costs  incurred in such review and approval  proccss shall be borne
by Tenant.  Landlord shall coaper|^|te witb Tenant as rcquircd in effocting such
review and approval  (including  executing the  Agreement if required),  but all
costs and fees in conncction  thcrcwith  shall be borne by Tenant.  

     (e) Prior to  commencement  of  Tenant's  Work in the  Prcmiscs,  Tcnant or
Tenant's  gencral  contractor  shall deposit with Landlord the sum of $500.00 if
the Floor Area of the Premises is less than 1,500 square feet,  $1,000.00 if the
Floor Arca of the Premises is greater than 1,500 squarc fcet but less than 3,000
square fcct and $ 1,500 if the Floor Arca of the  Prcmises is 3,000  square fect
or largcr, to insurc tbe full and faithful  compliance by Tcnant's contractor of
its  ctean-up  and  trasb  removal  obligations  pursuant  to  Ezhibit  "E"  and
completion of all punch-list work. If Tenant's  contractor dcfaults with respect
to any such  obligation,  Landlord  may use,  apply or  retain  any part of this
security  dcposit  for thc  paymcnt of any amount  which  Landlord  may spend or
becomc  obligated  to spend by reason of Tenant's  contractor's  default,  or to
compensate  Landlord  for any other loss or damagc  which  Landlord may suger by
rcason of Tenant's contractor's dcfault.  Landlord shall not be rcquired to kccp
this security  dcposit  separate from its gencral funds, and Tenant shall not be
cntitlcd to intercst on such  deposit.  If Tenant's  contractor  shall fully and
faithfully   perform  cach  of  its  clcan-up,   trash  rcmoval  and  punch-list
obligations,  this security  dcposit shall be applied  against any othcr amounts
owed  by  Tcnant  to  Landlord  at the  time  of such  fulfillment  of  Tenant's
contractor's  obligations  and any balance  thereof  shall bc rcturned to Tenant
within  the time  spccified  in  California  Civil  Code  Section  1950.7.  

     (f) Concurrcntly with Tenant's ezecution and delivery of this lease, Tenant
shall pay to Landlord the sum  specified in the  applicable  Fundamental  I,casc
Provision as rcimbursement for (i) the cost of work performed by Landlord for or
with  respect  to the  Premises  and  (ii)  attachmcnt  to  Landlord's  beating,
ventilating and air conditioning systcm scrving the Premises. 

     (g) Any  additional  work of  remodeling  during  the lcasc  term  shall be
subject to all of tbe  provisions of Sections 7.03 and 16.16,  this Article XVII
and the applicable provisions of Ezhibits "C" and "E" hereto, subject,  however,
in each case to the use of such time pcriod(s) and datc(s)  tbcrefor as shall be
agreed upon by L,andlord and Tenant. *

     (h) Failure of Tcnant to perform its  obligations  pursuant to this Article
XVII in timcly fashion  shalj|^|be  deemed a default by Tenant  pursuant to this
lease  entitling  Landlord  to cxcrcise  all  remedies  availablc  to a landlord
against a  defaulting  tenant,  including  but not limited to thosc  provided in
Article XIII.

     * after  notice and  opportunity  to cure  pursuant to Section  13.01(b) or
13.01(c)


  



<PAGE>



     IN WITNESS  WHEREOF,  the parties havc executed this Iease,  consisting of
the forcgoing  provisions,  any typed addenda  appendcd  hcretc and all Ezhibits
attachcd  hcrcto,  on thc dates  indicatcd  bclow,  the latter of which shall bc
deemed the date of ezecution of this lease.

                                              SOUTH COAST PI.AZA, a partnership
                              By C. J. Segcrstrom & Sons, a gencral partnership,
                                                       Managing General Partner


By
Managing Partncr


By
Managing Partncr

"Landlord"


Date:


TOYS INTERNATIONAL a California corporatian


[CORPORATE SEAL] By
Title


By


"Tenant"


Date:



<PAGE>



                      ADDENDUM TO LEASE DATED MAY 10,1993,
             BETWEEN SOUTH COAST PLAZA A PARTNERSHIP, AS LANDLORD,
           AND TOYS INTERNATIONAL, A CALIFORNIA CORPORATION. AS TENANT

    
             The lease to which this  Addendum is attached and of which it forms
a part shall replace,  as of the Old Lease  Termination Date, that certain lease
dated July 18, 1973, by and between Landlord as landlord,  and Tenant,  formerly
known as Augner Toys,  Inc., as tenant,  and any and all amendments  thereto and
assignmer|^|ts,  assumptions  and  extensions  thereof  (collectively,  the "Old
Lease")  covering  certain  premises at the Center more  particularly  described
therein  (the  "Old  Premises")  and  certain  offce  space at the  Center  more
particularly  described therein (the "Office Space").  Landlord and Tenant agree
and acknowledge that (a) Tenant currently  occupies the Old Premises and the Off
ce Space,  (b) the Premises  will be remodeled  and  renovated  pursuant to this
lease, (c) upon substantial  completion of Landlord's Work in the Premises,  but
not prior to September  7,1993,  Landlord  shall deliver  possession  thereof to
Tenant, Tenant shall relocate from the Old Premises to the Premises and 'I'enant
shall  surrender  possession  of the Old  Premises to  Landlord,  (d)  following
deliv-ery  of  possession  of the  Premises,  Tenant  shall  hold and occupy the
Premises upon the terms and conditions of this lease,  (e) Tenant may (but shall
not be obligated to) continue to occupy the Office Space, and (f) upon surrender
of the Old  Premises,  the Old Lease  shall  terminate  with  respect to the Old
Premises.  In  connection  with the  foregoing,  Landlord  and  Tenant  agree as
follows:

Section 1.01  The Premises

            Any items  installed  by Landlord  pursuant to clause (b) of Section
1.01 of the lease form or Exhibit  "E" hereto in the sales area of the  Premises
shall be located  within walls,  above the ceiling,  below the floor or in other
locations agreed upon by I.andlord and Tenant.

Section 2.01  Length of Term

            (a) Subject to any early  termination  of this Iease pursuant to any
of the provisions  hereof, the term of this lease shall be from the Commencemen:
Date  determined  pursuant to Addendum  Section 2.02(a) to and until January 31,
2004.

     (b) In the event of the death or disability, as defined below, of |^|'rayle
Hoepner,  and whether occurring prior to or after the Commencement  Date, Tenant
shall promptly  notify  Landlord in writing of the occurrence of such event.  In
the event of such notice,  Guarantors, as defined in Addendum Section 20.01, and
their  successors  shall be relieved of all  liability  for the  obligations  of
Tenant  pursuant to this Iease  accruing  from and after the date of  Landlord's
receipt of such notice, including, without limitation, any liability for payment
to Landlord of the Total  Costs,  as defned in Addendum  Section  17.01.  In the
event that  Guarantors are so relieved;  they shall never be sued personally for
any obligation of the Tenant hereunder accruing from and after thc date of their
relief from liability pursuant to this subsection,  including without limitation
on an "alter ego" or "piercing the corporate veil" theory.  Nothing herein shall
relieve  Guarantors of liability for the obligations of Tenant accruing prior to
the  date of  Landlord's  receipt  of such  notice.  As used  herein,  the  term
disability  shall mean the inability of Mr.  Hoepner,  due to mental or physical
injury or condition, to operate the business of Tenant for a



<PAGE>



     (c) In the event that Tenant gives to Iandlord  the notice  provided for in
subsection (b) above and for the 24 full calendar months  subsequent to the date
of such notice (the 'Test  Period")  Tenant's gross sales from the Premises and,
if  applicable,  the Old  Premises  are less than  eighty  percent  (80%) of the
average  gross sales of Tenant from the  Premises  and the Old  Premises for the
three (3) 24 month  periods  immediately  preceding  the Test Period,  L,andlord
shall  have the  option  to  terrminate  this  lease.  Such  option  shall be in
accordance with the following:

                    (i) Promptly  following  the  expiration of the Test Period,
Landlord shall  calculate  Tenant's gross sales for the Test Period and Tenant's
average gross sales for the three comparison  periods.  L,andlord shall promptly
advise  Tenant in  writing  as to the  gross  sales  amounts  so  determined  by
Landlord.

                (^n) In the event that Tenant's  gross sales for the Test Period
are less than eighty percent (80%) of Tenant's average gross sales for the three
comparison  periods,  Landlord  shall have the option to terminate this lease by
written  notice to Tenant  given  within  twenty (20) days after the delivery of
Landlord's  notice pursuant to clause (i) above,  and in any event within |^|fty
(50) days  after  Iandlord's  receipt  of the last of the  monthly  gross  sales
statements of Tenant for the Test Period.  In the event that Iandlord timely and
properly exercises such option,  this lease shall terminate on the last to occur
of (A) the 90th day  following  the date of such  notice by  Landlord or (B) the
next succeeding  January 15 following the date of Landlord's  notice pursuant to
clause (i); provided,  however,  that Tenant may, by written notice to Landlord,
designate an earlier date for such termination.  The provisions of Section 16.28
of the lease form  shall  apply with  respect to such  termination  and the then
balance of the Total Costs :|^|s of the  termination  date shall be forgiven and
waived.

                   (^ni)  Pending  the  termination  date  of  this  lease  upon
exercise of an option  pursuant to clause (^n) above,  Landlord and Tenant shall
perform or observe their respective  obligations pursuant to this lease accruing
through such termination date. If Landlord does not timely and properly exercise
its option to terminate  this lease,  such option shall lapse and thereafter not
be  exercisable,  and this lease shall continue in effect for the balance of its
term, subject to subsection (d) below and subject to early termination  pursuant
to any other provision of this lease.

             (d) In the event  that  Tenant  gi|^|%es  to  Iandlord  the  notice
provided for in subsection  (b) above and for any  consecutive  twelve (12) full
calendar month period  thereafter  aggregate  Minimum Rent and aggregate  common
area charges paid by Tenant together exceed ten and one-half  percent (10.5%) of
Tenant's gross sales from the Premises and, if applicable,  the Old Premises for
the same twelve (12) month  period,  Tenant  shall have the option to  terminate
this lease. Such option shall be in accordance with the following:

                (i) Within thirty (30) days after the  expiration of such twelve
(12) month  period,  Tenant  shall have the  option to  terminate  this lease by
written notice


<PAGE>



to  I.andlord.  Such  notice,  if  given,  shall be  accompanied  by  reasonable
documentary  evidence  indicating the aggregate  amount of such Minimum Rent and
common area charges for such twelve (12) month period and the  aggregate  amount
of  Tenant's  gross sales for the same  period.  If Tenant  timely and  properly
exercises such option, this lease



<PAGE>



                   (^n) Pending the terminution date of this lease upon exercise
of an option  pursuant to clause (i) above,  Landlord and Tenant  shall  perform
their  respective  obligations  pursuant  to this lease  accruing  through  such
termination  date. If Tenant does not timely and properly exercise its option to
terminate this lease as to any such twelve (12) month period,  such option shall
lapse and thereafter  not be exercisable  with respect to such twelve (12) month
period.  However,  the lapse of such option as to any twelve  (12) month  period
shall not  affect  the right of Tenant to  exercise  the  option as to any later
twelve  (12)  month  period  as to which  the  standard  set  forth in the first
sentence of this subsection is met.

Section 2.02  Commencement Date and Rent Commencement Date

             (a)  Notwithstanding  anything to the  contrary  contained  in this
lease, the Commencement Date of this lease with respect to the Premises shall be
the date on which  Landlord  delivers  possession of the Premises to Tenant with
Landlord's  Work  therein  pursuant  to  Addendum  Section  17.01  substantially
complete,  as  defined in  Addendum  Section  17.01(f),  which date shall be not
earlier than September 7,1993.  The date of tender of delivery shall be the date
I.andlord  gives notice to Tenant that  Landlord's  Work has been  substantially
completed unless Tenant earlier takes possession of the Premises for any reason.
Upon receipt of Landlord's notice, Tenant shaJ be responsible to obtain a key to
the  Premises  from  I,andlord's   tenant   coordinator.   From  and  after  the
Commencement  Date,  Tenant  shall  observe and perform all  obligations  of the
Tenant pursuant to this lease, other than those requiring the payment of Minimum
Rent, Percentage Rent and additional rent.

           Notwithstanding  the foregoing  provisions of this subsection (a), in
the event that the Commencement Date shall not have occurred by November 1,1993,
and such  delay is not the  result of  Tenant  Delays  (as  defined  in  Section
17.01(e)),  then the Commencement Date shall not occur until January 3,1994. For
the purposes of the foregoing,  however,  the  Commencement  Date shall occur as
provided  in the  first  paragraph  of this  subsection  without  regard  to the
immediately  preceding  sentence unless,  on or before October  15,1993,  Tenant
notifies  Iandlord  in writing  that,  unless the  Commencement  Date  occurs by
November 1,1993, it shall not occur until January 3, 1994.

            (b) The Rent  Commencement  Date of this lease shall be the first to
occur of (i) the date on which Tenant opens for business in the Premises or (^n)
the fourteenth  (l4th) day following the  Commencement  Date. From and after the
Rent Commencement  Date, Tenant shall observe and perform all obligations of the
tenant pursuant to this lease,  including those requiring the payment of Minimum
Rent, Percentage Rent and additional rent. No delay in delivery of possession of
the Premises to Tenant (i.e.,  the Commencement  Date) or the Rent  Commencement
Date shall entitle  Tenant to terminate  this lease or to any damages on account
of such delay.

     (c) The  provisions  of  Section  2.02(c)  of the lease  form shall have no
application with respect to tnis lease.

     (d) From the Old Lease  Termination  Date,  as defined in Addendum  Section
2.04, to and until Tenant's surrender of the Office Space, Tenant shall hold the



<PAGE>



Office Space  (collectively,  the "Amendment  Terms") are deemed to be a part of
this lease. Tenant shall vacate and surrender  possession of the Office Space tn
Landlord not later than the expiration of the lease term with respect to the Off
ce Space in the  Amendment  Terms (i.e.,  January  31,1995) (the date upon which
Tenant  vacates and  surrenders  possession  of the Of|^|ce Space to Landlord is
hereinafter  referred to as the "Surrender Date").  Tenant may, at Tenant's sole
option,  vacate and  surrender  the Office  Space to I.andlord at the end of any
calendar  month  upon  not less  than  five (5) days  prior  written  notice  to
L.andlord.  Such  vacation  and  surrender  shall  be  in  accordance  with  the
following:

                  (i) Such  vacation and  surrender,  and  relocatior  of any of
Tenant's  property from the Office Space,  shall be the sole  responsibility  of
Tenant, both as to performance and payment of the costs thereof.

                   (^n) Such vacation and any  relocation  of Tenant's  property
shall be  scheduled  through  and shall be  conducted  in  accordance  with such
reasonable  restrictions as may bc imposed by Landlord's general manager for the
Center, or his designee.

                  (^ni) Upon surrender of tl|^|e Office Space to I.andlord,  the
Ofhce Space shall be in the  condition  required by Sections  7.02(c),  7.03 and
7.04 of the lease form.

                 (iv) Prior to surrender of the Office Space to Landlord, Tenant
shall  remove from the Office  Space all  merchandise,  furniture,  furnishings,
movable  equipment and trade fixtures which Tenant paid for and installed in the
Office Space and all  miscellaneous  personal  property of Tenant.  Tenant shall
repair any damage to the Offce Space caused by removal of such items,  and shall
otherwise  leave the Office  Space in the  condition  required  by clause  (^ni)
above.  Any items which  Tenant is permitted to remove from the Office Space but
fails to remove prior to surrender of possession of the Office Space to Iandlord
shall be deemed  abandoned  by Tenant  and may be  retained  or  disposed  of by
Landlord as it sees fit,  without  claim  thereto or to the proceeds  thereof by
Tenant.  Any costs  incurred by Landlord in removing  and  disposing of any such
items of personal property  abandoned by Tenant shall be reimbursed by Tenant as
additional  rent  pursuant  to this lease  within  ten (10) days after  Tenant's
receipt of an invoice therefor.

                 (v) L,andlord  shall not be responsible to safeguard or protect
any of  Tenant's  property  remaining  in the  Office  Space upon  surrender  of
p|^|ssession of the Office Space to I.andlord.

Section 2.04  Termination of nld I.ease

             (a)  Withiz|^|  fourteen (I4) days after the  Commencement  Date of
this lease, Tenant shall relocate firom the Old Premises to the Premises, vacate
the Old Premises and surrender possession of the Old Premises to Landlord.  Such
relocation


<PAGE>



shall be the sole  responsibility of Tenant,  both as to performance and payment
of  costs.  However,  the  actual  out-of  pocket  costs  incurred  by Tenant in
relocating  shall,  subject to the next sentence of this subsection,  be paid by
I,andlord  directly  to the third  parties  entitled  thereto  (upon  receipt of
invoices from such third parties) and included in Total



<PAGE>



to Tenant's  employees in connection with such relocation.  Landlord's  payments
hereunder  to  third  parties  shall  be in  accordance  with  the  estimate  of
relocation costs furnished by Tenant to Landlord. In addition, in effecting such
relocation  Tenant shall comply with all  reasonable  regulations  or directives
provided by Landlord with respect thereto,  including, but not limited to, those
regarding  the time and/or  method of such  relocation.  Surrender of possess:on
shall be accomplished by delivery to I,andlord of physical possession of the Old
Premises  and the keys  thereto.  Tenant  shall,  prior to  surrender of the Old
Premises to Landlord,  remove from the Old Premises all merchandise,  furniture,
furnishings,  equipment and movable trade  fixtures and shall  surrender the Old
Premises  to  Iandlord in  broon:-clean  condition  only (and not as required by
Section 7.02(c) of the Old Lease).  Tenant shall,  at Tenant's cost,  repair any
damage to the Old  Premises  caused by such  removal.  Any items which Tenant is
permitted  to  remove  but  fails to remove  prior to the  surrender  of the Old
Premises to Landlord  shall be deemed  abandoned  by Tenant,  and  Landlord  may
retain  or  dispose  of the same as  Landlord  sees ht  without  claim by Tenant
thereto or to any proceeds thereof.  If Landlord elects to remove and dispose of
any such items abandoned by Tenant,  the cost of such removal and disposal shall
be additional  rent pursuant to this lease payable by Tenant to Landlord  within
ten (10) days after Tenant's receipt of Landlord's demand therefor.

             In connection with the relocation  provided for in this subsection,
Tenant may cease  operations  in the Old  Premises in order to  facilitate  such
relocation  on or after the  Commencement  Date. In the event that Tenant ceases
such  operations,  all rent payable under the Old I,ease shall be abated for the
period from the date nf such cessation  through the Old Lease  Termination Date.
In no event, however, shall the period of such abatement exceed 14 days.

              (b)  The  Old  I.ease,  other  than  the  Amendment  Terms,  shall
terminate on that date on which Tenant  s|^|.|^|rrenders  possession  of the Old
Premises tn Landlord in  accordance  with  subsection  (a) above (the "Old Lease
Termination Date" j.

              (c)   Notwithstanding  the  Termination  of  the  Old  Lease,  the
following obligations of the parties tliereurder shall be preserved:

                   (i)  I|^|,andlord  shall  remain  responsible  for and  shall
indemnify  and  hold  Tenant  harmless  from  and  against  any and all  claims,
liabilities,  damages,  actions  and  causes  of  action,  costs  and  expenses,
including  attorneys'  fees, for which L,andlord is responsible  pursuant to the
Old Lease and which accrue on or before the Old Lease  Termination Date (and, in
the case of the Office Space, the Surrender Date).

                 (^n) Tenant shall remain  responsible  for and shall  indemnify
and hold  I,andlord  harmless from and against any and all claims,  liabilities,
damages, actions and causes of action, costs and expenses,  including attorneys'
fees,  for which  Tenant is  responsible  pursuant  to the Old  I.ease and which
accrue on or before the Old  I,ease  Termination  Date (and,  in the case of the
Office Space, the Surrender Date).


<PAGE>



                   (^ni) Tenant  shall  remain  obligated to pay to Landlord all
Minimum Rent, Percentage Rent and additional rent payable to I,andlord by Tenant
pursuant  to the Old I.ease and accrued  and unpaid  (whether  or not  invoiced)
through



<PAGE>



additional  rent  payable  by  Tenant  pursuant  to the Old  Lease  are  payable
periodically  on an  estimated  basis  subject  to lease or  calendar  ycar erid
adjustments  to actual  amounts  due. All such items shall be adjusted to actual
amounts due from and billed to Tenant for the entire  lease or calendar  year on
whicn such items are based, notwithstanding the termination of the Old Lease and
commencement of this lease. The closing  adjustments  shall be made by I,andlord
as of the end of the last of the calendar or lease years on which the amounts of
such  additional  rent and  Percentage  Rent are  based.  In the event  that any
additional  rent item is payable under the Old Lease on a basis  different  than
under this lease, I,andlord's adjustroent shall reflect the basis used under the
Old I.ease through the earlier of the Old Lease  Termination Date or the date on
which rent  abatement  commences  pursuant to subsection  (a) above (and, in the
case of the Office  |^|'pace,  the Surrender Date) and the basis used under this
lease for the period  subsequent to the Rent Commencement Date (and, in the case
of the Office Space,  the Surrender Date). In addition,  Landlord's  adjustments
shall take into  account the  difference  in the Floor Areas of the Old Premises
and the Premises.

                 (iv) Tenant shall remain obligated to the Fund for all dues and
assessments payable by Tenant to the Fund and accrued and unpaid (whether or not
invoiced) through the earlier of the Old I,ease  Termination Date or the date on
which rent  abatement  commences  pursuant to subsection  (a) above (and, in the
case of the Office Space, the Surrender Date) until full and complete payment of
the same. The Fund may bill Tenant  periodically  in accordance  with its normal
custom  without regard to termination of the Old Lease and the occurrence of the
Rent  Commencement  Date of this lease, but such billing shall take into account
any rent abatement period provided for in subsection (a) above.  |^|uch periodic
billings  shall also take into account any  difference in rates of  contribution
pursuant to the Old Lease and this lease and the  difference  in the Floor Areas
of the Old Premises and the Premises.

                  (v) Tenant shall remain liable for all personal property taxes
assessed against the fixtures, furnishings and other Fcrsonal property of Tenant
in the Old Premises  with a lien date prior to the Old L.ease  Termination  Date
(and, in the case of the Offlce Space, the Surrender Date) until payment of such
taxes in full.

                  (vi)  Tenant  shall  remain  liable for all  utility  services
rendered to the Old Premises  prior to the Old Lease  Termination  Date (and, in
the case of the Office Space, the Surrender Date) until payment in full therefor
by Tenant.

            (d)   Tenant represents, warrants and covenants as follows:

                  (i) There are no subtenants, franchisees or concessionaires of
Tenant in the Old  Premises or the Office  Space and no other  persons  with the
right of  possession  or use of the Old Premises or the Office Space  granted by
Tenant and that  Tenant is the owner of  Tenant's  interest  pursuant to the Old
Lease subject to no liens , claims or encumbrances.

                  (^n) Tenant will pay or make  provision for the peyment of all
trade accounts,  wage claims, and other obligations of the business conducted in
the Old  Pre:nises  and the Office  SpacP snd shall  neither take any action nor
fail to take any action the result of which will be the  imposition of any liens
upon the OId Premises or



<PAGE>



                 (^ni) All improvements to the Old Premises and the Office Space
are free and clear of any Iiens, claims or encurobrances  created or suffered by
Tenant and  r|^|one of such  improvements  are  subject to a  conditional  sales
agreement, lease or other title retention device created or suffered by Tenant.

Section 3.01  Minimum Rent

            (a) Subject to the provisions of Section 16.04 of the lease form and
subsection (b) below, monthly Minimum Rent shall be as follows:

     (i) For the period from the Rent Commencement Date through January 31,1997,
the sum of $11,121.85 ($25.75 per square foot of Floor Area per year).

     (ii) For the period from February 1,1997 througi|^|t  January 31, 2001, the
sum of $ 13,281.44 ($30.75 per square foot of Floor Area per year).

     (iii) For the balance of the lease term, the sum of $15,441.02  ($35.75 per
square foot of Floor Area per year).

     (b) In the event that,  pursuant to the second  paragraph of Section 16.0-4
of the lease form, the Floor Area of the Premises is determined to be greater or
lesser than that set forth in the applicable Fundamental I.ease Provis|^|on, the
monthly  Minimum  Rent set forth in  subsection  (a) above  shall be adjusted to
those amounts determined by multiplying the Floor Area as finally deterznined by
the annual  Minimum Rent per square foot rates set forth in such  subsection and
dividing the results by twelve (12).

Section 3.03  Percentage Rent

     (a) The  Percentage  Rent  breakpoints  during  the lease  term shall be as
follows:

     (i) For the period from the Rent Commencement Date through January 31,1997,
the annual Percentage Rent breakpoint shall be the sum of $2,224,370.00.

     (ii) For the period from  February  1,1997  through  January 31, 2001,  the
annual Percentage Rent breakpoint shall be the sum of $2,656,?u17.00.

     (iii) Foi the  balance  of the  lease  term,  the  annual  Percentage  Rent
breakpoint shall be the sum of $3,088,204.00.

     (b) With  respect  to any lease  year or  partial  lease  year in which the
breakpoint changes by virtue of an increase in Minimum Rent pursuant to Addendum
Section  10.01,  Tenant's  Percentage  Rent  breakpoint  for such  lease year or
partial lease


<PAGE>



year shall be determined as follows.  The annual  Percentage  Rent breakpoint in
effect  prior to the  increase in  Tenant's  Minimum  Rent  pursuant to Addendum
Section 10.01 shall be multiplied by a fraction, the numerator of which shall be
the number of days in  [Section struck out]



<PAGE>



subsequent  to the day on which the  increase in Tenant's  Minimum  Rent becomes
effective  and the  denominator  of which  shall  be 365.  The  amounts  derived
pursuant to the two (2) immediately  preceding sentences shall be added together
and shall be the Percentage Rent breakpoint for such lease year or partial lease
year.  From and  after  the  effective  date of the  event  giving  rise to such
increase in Tenant's Minimum Rent, the annual breakpoint  determined pursuant to
this subsection shall be used in determining Tenant's monthly payments,  if any,
on account of Percentage Rent pursuant to subsection (d) below.

             (c) 1n the event that Tenant's  annual Minimum Rcnt is increased or
decreased  pursuant to Section  16.04 of th|^| lease form and  Addendum  Section
3.01(b) or pursuant to Addendum  Section 10.01,  the Percentage Rent breakpoints
provided  for in  subsection  (a) above shall be  redetPrmined  by dividing  the
annual Minimum Rent amounts, as finally determined, by six percent (6%).

             (d) Tenant  shall not be required  to make any monthly  payments on
account of  Percentage  Rent for any lease year or partial  lease year until the
month in which Tenant's aggregate lease year or partial lease year to date gross
sales fust exceed the Yercentage  Rent breakpoint for such lease year or partial
lease  year.  For the month in which  Tenant's  aggregate  lease year or partial
lease year to date gross sales frst exceed such lease year or partial lease year
Percentage Rent breakpoint, Tenant shall pay, cn account of Percentage Rent, six
percent (6%) of such  excess.  For each  subsequent  month in such lease year ur
partial lease year, Tenant shall pay, on account of Percentage Rent, six percent
(6%) of Tenant's gross sales for such month.  Promptly  following the expiration
of such lease year or partial  lease year,  Tenant and  Landlord  shall make the
annual  adjustment to Percentage  Rent  required,  if any,  pursuant to the last
three  sentences of Section  3.03(b) of the lease form,  and any  overpayment by
Tenant  determined as the result of such adjustment shall be applied against the
next rent payable by Tenant to Landlord pursuant to this lease.

            (e) The  Percentage  Rent  breakpoint for the lease year February l,
1993  through  January  31,1994  shall  be a  single  breakpoint  and  shall  be
determined as follows.  The annual Percentage Rent breakpoint in effect prior to
the Old Lease  Termination  Date (or the date on which rent abatement  commences
pursuant to Addendum  Section  2.04(a))  shall be multiplied by a fraction,  the
numerator of which shall be the number of days from Februaiy  l,|^| 1993 through
the Old Lease  Termination  Date (or the date on which rent abatement  commences
pursuant to Addendum Section 2.04(a)) and the denominator of which shall be 365.
The annual Percentage Rent breakpoint  pursuant to subsection (a)(i) above shall
be multiplied by a fraction, the numerator of which shall be the nu:nber of days
from the Rent  Commencement  Date through January 31,1994 and the denominator of
which shall be 365.  The  amounts  derived  pursuant to the two (2)  immediately
preceding  sentences  shall be added together and shall be the  Percentage  Rent
breakpoint for such lease year. From and after the Ront Commencement  Date, such
composite breakpoint shall be used for Tenant's payments,  if any, on account of
Percentage Rent pursuant to subsection (d) above. Any


overpayment or  underpayment  on account of Percentage  Rent for such lease year
shall be adjusted upon Tenant's  submission of its annual certified statement of
gross sales in the manner provided in Section 3.03(b) of the lease form.



<PAGE>



settlement  of  claims  for loss of or  damage to  Tenant's  merchandise  at the
Premises , (iv) sales of merchandise  from the Premises to jobbers,  liquidators
or the like, (v) delivery  charges for  merchandise  sold from the Premises,  so
long as such charges are at or  approximately at Tenant's cost of providing such
services,  (vi) receipts from public telephones,  stamp machines,  public toilet
locks and vending machines installed in the Premises and intended solely for the
use of Tenant's employees,  (v^n) interest, service or sales carrying charges or
other  charges paid by customers of Tenant at the Premises for the  extension of
credit on sales,  so long as such charges are not included in the sales price of
merchandise or services, (v^ni) cash or credit refunds,  discounts or allowances
to  customers  of Tenant  at the  Premises  on  account  of sales  made from the
Premises or from another location of Tenant, and (ix) amounts received by Tenant
as deposits on so-called  layaway sales until such deposits are forfeited or the
sale  is  completed.  Provided,  however,  that  the  exclusions  or  deductions
specified in clauses (i) and (^n) above shall not exceed, in the aggregate,  two
percent  (2%) of Tenant's  annual  gross sales from the  Premises per lease year
(prorated,  if applicable,  for any partial lease year). Any amount recovered on
account of any  exclusions  or deductions  permitted  pursuant to clause (^n) of
this  subsection  (c) shall be included  in gross sales as and when  received by
Tenant.  The amounts,  if any,  actually  received by Tenant with respect to the
placement of any item  described  in clause (vi) above in the Premises  shall be
included in gross sales.  Upon  completion of a sale described in clause (ix) or
forfeiture of the deposit with respect thereto, all amounts actually received by
Tenant  shall be  included  in gross  sales.  Finally,  the sales  price of gift
certificates  shall not be  included  in gross sales at the time of salc of such
certificates.  ThP face value of such  certif  cates  shall be included in gross
sales upon redemption.

             (g) Notwithstanding anything in this lease to the contrary, for any
lease year or partial  lease year as to which  Tenant's  gross sales  exceed the
Percentage   Rent  breakpoint  for  such  lease  year  or  partial  lease  year,
concurrently with Tenant's  submission of Tenant's certified annual statement of
gross sales for such lease year  pursuant to Section  4.02(b) of the lease form,
Tenant shall pay to I.andlord an additional  one percent (1%) of Tenant's  gross
sales in excess of such annual Percentage Rent breakpoint.

Section 4.01   Records

               (a) Tenant may maintain the records  described in Section 4.01 of
the lease form at Tenant's first address for notices in the  Fundamental  I.ease
Provisions or at a storage unit rented by Tenant for that purpose.  Upon receipt
by Tenant of notice of I.andlord's intention to audit such records, Tenant shall
make the same  available  to  Iandlord's  auditors  either at the  Premises,  at
Tenant's first address for notices pursuant to the applicable Fundamental I.ease
Provision or at Landlord's pr|^|incipal accounting office, at Tenant's election.

           (b)  Notwithstanding  anything to the contrary in Section 4.01 of the
lease form,  Tenant need only maintain books of account and records with respect
to


<PAGE>



gross  sales  relating  to the  Premises  which are  necessary,  in the sole but
reasonable discretion of Landlord's independent certified accountants who review
such matters,  to conduct un audit of |^|oss sales with respect to the Premises.
Such books and records


<PAGE>



generally accepted device which provides a tamper-proof record of sales from the
Premises.

Section 4.03  Audit

            (a) The phrase "zs  provided  in  Section  4.03(b)  below" is hereby
inserted  in  subsection  4.03(a)  of the lease  form prior to the phrase "to an
examination of Tenant's books and records."

             (b) Landlord's  audit right shall be limited to those record$ which
Tenant is required to maintain pursuant to Addendum Section 4.01.

            (c) Any audits of Tenant's  gross sales  conducted by Landlord shall
be no more frequent  than once during any lease year. In addition,  no more than
one (1) such audit  shall be  conducted  by Landlord  with  respect to any lease
year.

            (d) In the  event  that  Landlord  fails  to  commence  an  aadit of
Tenant's  gross sales for any lease year or partial  lease year within three (3)
years after delivery of the certified  annual  statement of gross sales for such
lease year or partial lease year,  Tenant's annual  statement of gross sales for
such  lease  year or  partial  lease  year  shall be final and  conclusive  upon
Landlord and Tenant.

     (e)  Notwithstanding  the provisions of Section  4.03(b) of the lease form,
the following shall pertain:

     (i) If Tenant shall not,  within thirty (30) days after receipt of an audit
report, in writing in reasonable detail object to such report, such report shall
be cnnclusive and binding upon I.andlord and Tenant.

     (ii) If Tenant  shall  object to any audit  report in the manner and within
the time  specified in clause (i),  Tenant and Landlord  shall endeavor to agree
upon any deficiency  (or lack thereof) with respect to the period(s)  covered by
such audit. Any such agreement shall be reduced to writing, executed by Landlord
and Tenant and conclusive and dinding upon Iandlnrd and Tenant.

     (iii) If Tenant  shall  object to any audit report in the manner and within
the time specified in clause (i), and if such objection shall not be disposed of
pursuant to clause (^n) within sixty (60) days after  Tenant's  objection,  then
either  party may  demand by  written  notice  to the other  that the  matter be
resolved by arbitration. In such event, the following shall pertain:

     (A) The  arbitration  shall be conducted in Orange  County,  California  in
accordance with the then rules of the American Arbitration  Association and this
subsection.



<PAGE>
     (B)  Within  twenty  (20) days after  arbitration  is  demanded  by written
notice, each party shall designate one arbitrator by written notice to the other
party.  Within twenty (20) days after the designation of the second  arbitrator,
the two arbitrators shall select a third arbitrator.  If either party shall fail
to  designate  its  arhitratnr  within  cuch  twentv  l2|^|l dav  nerind|^|  the
arbitrator chosen by the other District Court (or his designee) upon application
by either  party.  Each  arbitrator  designated  or  selected  pursuant  to this
subsection shall be a licensed certifed public accountant with ten (10) years of
experience in commercial real property.

     (C) The  arbitration  shall be held as  promptly  as  practical  after  the
selection of the third (or sole)  arbitrator  and in any event within sixty (60)
days after such  selection.  The decision of the  arbitrators or any two of them
shall be  conclusive  and  binding  upon  Landlord  and Tenant and may include a
designation c|^|f a prevailing party.

     (D) If either party shall be  designated  as the  prevailing  party in such
proceedings,  the other  party shall bear the  reasonable  costs and fees of all
three (or the sole)  arbitrators.  If no party is designated  as the  prevailing
pa|^|y,  then  each  party  shall  bear the  costs  and  fees of the  arbitrator
designated by it and one-half (1/2) of the costs and fees of the third (or sole)
arbitrator.  Each party shall also bear its own expenses,  including  attorneys'
fees, incurred in the arbitration proceeding.

     (E) Pending the decision of the  arbitrators,  Tenant shall not be required
to pay any  deficiency  set forth in the audit report (or the cost of the audit,
if  applicable).  Within  thirty (30) days after  receipt of the decision of the
arbitrators,  Tenant shall pay any dehciency determined by the arbitrators,  the
reasonable  costs of the audit,  if  applicable,  interest on any  deficiency as
provided in Section  4.03(c) of the lease form, and if I,andlord is declared the
prevailing  party, the reasonable costs and fees of the three  arbitrators.  The
pendency of an arbitration proceeding pursuant to this subsection shall not stop
the accrual of interest pursuant to Section 4.03(c) of the lease form.

     (F)  Either  party may have  judgment  entered  in any  court of  competent
jurisdiction upon any arbitration decision rendered pursuant to this subsection.

     (iv) If either party shall fail to designate its arbitrator within the time
specified herein, the other party may, by written notice to the party failing to
so  designate,  elect  to have the  matter  determined  by the  sole  arbitrator
designated  by such  electing  party.  In such event,  the decision of such sole
arbitrator shall be final and binding upon the parties and the costs and fees of
such sole arbitrator shall be divided equally between Landlord and Tenant.

                (v) If neither  party elects an  arbitration  within thirty (30)
days after the expiration of the sixty (60) day period specified in clause (iii)
above, either party shall be free to thereafter file a legal action to have such
dispute  determined.  In the event  that such  legal  action is filed and served
prior to an election to arbitrate,  such dispute shall be determined pursuant to
such action iather than through arbitration.

          (f)   If it is determined that there has been an overpayment of


<PAGE>



Percentage Rent, the amount of such  overpayment  shall be paid to Tenant within
thirty (30) days after Landlord's receipt of the determination.

           (g) The phrase "two percent (2%)" appearing in subsection  4.03(c) of
the  lease  form is  herebv  amended  to read  "three  percent  (3%)."  The word
"reasonable"



<PAGE>



           (h)  Neither   Landlord  nor  its  partners,   officers,   directors,
employees, agents or attorneys shall disclose any financial information or other
information obtained by L,andlord in an audit of Tenant's gross sales records or
otherwise required to be furnished by Tenant to I.andlord pursuant to this lease
to any other person without the prior written  consent of Tenant,  which m,ay be
withheld in Tenant's sole discretion|^|
                                                                   ,.
provided,  however,  that Landlord may disclose such  information  (i) to an;|^|
lender to Landlord now or hereafter having a lien on Landlord's  interest in the
Center, or any portion thereof,  (^n) to any governmental  entity,  governmental
agency  or other  person  to whom  disclosure  is  required  by or  pursuant  to
applicable law, regulation or duty of diligent inquiry,  and (^ni) in connection
with any action  brought to enforce the terms of this  lease,  on account of the
breach or  alleged  breach  hereof or to seek a  judicial  determination  of the
rights and obligations of the parties hereunder.

Section 5.02  Definitions

          In the event that any real  property tax or  assessment  is payable in
installments  over two (2) or more years,  such real  property tax or assessment
shall be passed  through to Tenant as if Landlord paid such real property tax or
assessment in the maximum number of installments  legally permitted,  whether or
not Landlord  actually  pays in such  installments,  together  with the interest
which was charged or which would have been  charged for the  privilege of paying
in such installments.

Section 6.01  Use of Premises

          (a)  Notwithstanding  anything to the  contrary in Section 6.01 of the
lease forn,  Tenant shall be required to be open for  business in the  Premises,
and shall be required to keep its display  windows and storefront  sign lighted,
only urom l0:0|^|J a.m. to 9:00 p.m.  Monday through  Friday,10:00  a.m. to 6:00
p.m.  Saturday and 11:00 a.m. to 6:00 p.m. Sunday,  plus during such other hours
during the Christmas shopping season (i.e., the day after  Thanksgyving  through
the day after  Christmas) as the  Robinson's-May  and Sears stores at the Center
are open for business or keep their display windows or storefront signs lighted,
as the case may be, and  seventy-five  percent  (75%) of the mall tenants of the
Center are required to be open for business or to keep their display  windows or
storefront   signs   lighted.   as  the  case  may  be.   Landlord   agrees   to
non-discriminatorily enforce the mini:num hours of operation on other tenants of
the Center.  In  addition,  Tenant may close the  Premises (i) for up to two (2)
days in any twelve  (12) month  period  when the  Center is  otherwise  open for
business,  not to exceed thirty-six consecutive hours per closure, for inventory
purposes only, (^n) on four (4) nationally  recognized  holidays when a majority
of the first-class regional malls in Southern California are closed for business
and (^ni) during the last three (3) days of the term to vacate the Premises. The
four  nationally  recognized  holidays  referred  to in clause  (^n) above shall
include Easter Sunday, Thanksgiving Day and Christmas Day.

     (b) Notwithstanding the provisions of Section 6.01 of the lease form, in


<PAGE>



the event that (i) two (2) department stores at the Center close and/or (^n) the
occupancy  level  (i.e.,  stores  open  for  business  to  the  public)  of  the
Robinson's-May  to Sears wing of the Center  drops  below  seventy-five  percent
(75%) of the Floor Area of such wing  (collectively,  a "Dark Condition"),  then
the following shall pertain:

                 (A)   During any calendar month while sucti Dark Gondition



<PAGE>



event,  however,  shall the aggregate  amount payable by Tenant  pursuant to the
immediately  preceding  sentence  for any calendar  month  exceed the  aggregate
Minimum Rent,  Percentage Rent and additional  rent payable by Tenant  hereunder
for such calendar month but for such provision. I,andlord and Tenant acknowledge
that  the  monthly  determinations  required  by this  clause  (A)  will be made
retroactively  and will be made by Tenant subsequent to the end of each calendar
month.  Accordingly,  for any month as to which Tenant has paid Minimum Rent and
is entitled to Minimum Rent  abatement,  Tenant shall have a credit equal to the
difference  between the Minimum Rent  actually  paid by Tenant for such calendar
month and six percent (6%) of Tenant's gross sales for such calendar month. Such
credit shall be applied  against the next rent  payable  pursuant to this lease.
The  provisions  of this clause shall not affect the  determination  of Tenant's
annual  Percentage  Rent  breakpoint for any lease year in which Tenant receives
Minimum Rent abatement pursuant to this provision.

     (B) In the event  that such Dark  Condition  continues  for 12  consecutive
calendar  months,  Tenant  shall have the option to terminate  tlus lease.  Such
option shall be exercised,  if at all, by written notice from Tenant to Landlord
given at any time after the  expiration of such 12 month period and prior to the
elimination  of such Dark  Condition.  In the event that  Tenant is  entitled to
terminate  this lease  pursuant to this clause (B) and timely and properly  does
so, this lease shall terminate on the thirtieth (30th) day following the date of
Tenant's  notice.  In the event of a termination  of this lease pursuant to this
clause (B) the  provisions  of Section  16.28 of the lease form shall  apply and
Tenant shall, on or before the termination date, pay to Landlord the then-unpaid
balance of the Total Costs and all accrued and unpaid interest thereon.

            For the purposes of this subsection (b);

     (x) The  Robinson's-May to Sears wing of the Center shall roean the portion
of the  Center  located to the east of the  broken  line on  Exhibit  "A-1," but
excluding the buildings currently occupied by Robinson's-May and Sears.

     (y) A Dark  Condition  described in clause (b)(i) above shall be eliminated
when such department  store reopens,  whether with the same or a different store
operator.

     (c) In the event of a mall  renovation,  as defined below,  to the Carousel
Court, as defined below, during any calendar month while such mall renovation is
underway and for which Tenant's  aggregate  Minimum Rent and common area charges
exceed ten and one-half  percent (10.5%) of Tenant's gross sales for such month,
Tenant  shall be required to pay only six percent  (6%) of gross sales  (without
regard to any Percentage Rent breakpoint) and additional rent. Such Minimum Rent
abatement  shall be effected in the manner  provided in clause (A) of subsection
(b) above and the  aggregate  amount  payable by Tenant  shall be subject to the
limitation set forth in the second sentence of such clause.



<PAGE>



            For the purposes of this subsection (c):

                 (i) The  Carousel  Court shall be that  portion of the Enclosed
Mall bordered by buildings A, B, C and D as depicted on Exhibit "A-l," and shall
include



interfering with pedestrian  traffic through the Carousel Court, other than in a
non-substantial  manner  and/or (B)  impairing  or  interfering  the view of the
Premises  storefront  from  customers  in the  Carousel  Court  other  than in a
non-substantial manner.

Section 6.02  Restrictions on Use

     (a)  Notwithstanding  anything to the contrary contained in Section 6.02(c)
of the lease form,  Landlord  shall,  as a part of  Landlord's  Work pursuant to
Addendum Section 17.01, remove or otherwise abate all asbestos-bearing materials
in the  Premises.  The  cost of such  abatement  or  removal  shall  be borne by
L.ardlord  and shall not be  included  in Total  Costs,  as defined in  Addendum
Section 17.01.

     (b)  Upon  completion  by  I,andlord  of  its  asbestos  work  pursuant  to
subsection (a) above,  Landlord shall obtain from Landlord's  asbestos abatement
contractor a  certificate  (which may be in letter form) to the effect that such
asbestos work was in fact  performed.  A copy of such  certificate,  executed by
such contractor,  shall be delivered to Tenant prior to the Commencement Date of
this lease.

Section 6.03  Other L,ocations

             The  acquisition  of Tenant by a person or entity  who or which has
existing  competing  stores  located within the  geographical  area described in
Section 6.03 of the lease form shall not  constitute a violation of such Section
or give rise to any remedies of Landlord pursuant to this lease.

Section 7.01  I.andlord's Obligations

            (a) The phrase  "and other  structural  portions  thereof'  shall be
added  after  the word  "Center"  the third  time such word  occurs in the first
sentence of Section 7.01. The phrase "or contractors (the cost of which shall be
Tenant's  responsibility  except  if and  to the  extent  that,  subject  to the
provisions  of Section  8.05 of this lease which  shall not be defeated  hereby,
proceeds of insurance  carried or required to be carried by  I,andlord  are made
available to cover the same)" shall be added after the word  "employees" in such
sentence. The phrase "promptly when" appearing in such sentence shall be amended
to read "within a reasonable time after" and tr|^|e phrase 'wvith respect to the
Premises" shall be added at the end of such sentence.

             (b) The  phrase  "condemnation  or"  shall be  added  to the  third
scntence of such Section  before the word  "casualty."  For the purposes of such
Section and Section 8.03 of the lease form,  L.andlord's  self-insured reserves,
on a per occurrence and


<PAGE>



aggregate basis, and Landlord's  deductibles  shall be maintained at such levels
as to achieve a net  savings in  insurance  costs  (i.e.,  premiums  saved minus
losses payable by Landlord).

Section 7.02 Tenant's Obligations

           The phrase ", except for reasonable wear and tear" is hereby inserted
at the end of the first full sentence of subsection 7.02(a) of the lease form.



<PAGE>



alterations,  improvements,  remodeling  or  additions  to the  interior  of the
Premises without Iandlord's prior consent provided that:

                (i) Such non-structural alterations, improvements, remodeling or
additions do not (A) exceed  Thirty  Thousand  Dollars  ($30,000) in cost in the
ag,gregate over any twelve (12) month period,  or (B) materially alter or change
the  appearance of the Premises from the original  design  approved by I.andlord
pursuant tn Article XVII of this lease;

                   (^n) Tenant provides  fifteen (15) days' prior written notice
to I.andlord  specifying  the  proposed  work to be done in the Premises and the
area affected by such work;

                  (ui) Tenant obtains all necessary  permits prior to commencing
such work and agrees to abide by Landlord's  reasonable rules and regulations in
the performance of such work|^|

                (iv) Such work does not change or alter the existing storefront,
tl|^|e  exterior of the Premises  (including  without  limitation,  the exterior
signs) or any structural or safety mechanisms in the Premises, including without
limitation, the mechanical, electrical or fire sprinkling systems; and

                  (v) There is no closure,of the Premises in excess of three (3)
days required in connection with such work.

Iandlord  agrees not to  unreasonably  withhold or delay its consent to Tenant's
request to make any alterations or improvements for which Landlord's  consent is
required  pursuant to this lease.  The  reference  t|^| Article XVII in the last
sentence of such  subsection  7.03(a) shall be deemed to refer only to instances
where Landlord's consent to alterations,  improvements,  remodeling or additions
is required under this lease.

           (b) Notwithstanding  the|^|provisions of Section 7.03(b) of the lease
form,  Tenant shall not, upon the  expiration or any earlier  termination of the
lease term,  be required to remove from the  Premises  any  improvements  to the
Premises  which were  approved by  I,andlord  as a part of  I,andlord's  Work or
Tenant's Work pursuant to Addendum  Sections 17.01 or 17.02. In addition,  as to
alterations,  improvements,  remodeling,  additions  and  fixtures  installed or
constructed  by Tenant in the Premises other than  I.andlord's  Work or Tenant's
Work,  Iandlord  may  require  Tenant  to  remove  only  (i)  such  items as are
designated  for such  removal  in  Landlord's  notice  approving  the same  upon
submission  by Tenant of plans  and  specifications  with  respect  thereto  for
approval and (^n) such items,  if any, as are installed or  constructed  without
prior  submission to Landlord for approval and which are designated in a removal
notice given by I.andlord to Tenant in the manner and within the time  specified
in Section 7.03(b) of the lease form.



<PAGE>



     (c)  Section  7.03(c) of the lease  form  shall be amended to read,  in its
entirety, as follows:



<PAGE>



     required  pursuant to this lease. All such work by Tenant shall also comply
with  all  applicable  requirements  of  all  governmental   authorities  having
jurisdiction of the Premises."

Section 7.05   Health Matters

               (a) The phrase  "once each  thirty  (30) days"  appearing  in the
first  sentence  of  Section  7.05(a) of the lease form shall be amended to read
"reasonably required."

           (b) The references to 'woluntary  programs" in Section 7.05(d) of the
lease  form  shall  mean  programs  which are not  specifcally  required  by any
applicable  legal  requirements  but which are adopted by Landlord to reasonably
meet or comply with applicable legal requirements.

            (c) The failure of Tenant to perform pursuant to Section 7.05 of the
lease form shall  constitute a default  pursuant to this lease only after notice
and an opportunity to cure pursuant to Section 13.01(c) of the lease form.

Section 8.01   Liability Insurance - Premises

     (a) The figure  "$3,000,000"  appearing  in the first  sentence  of Section
8.01(b) of the lease form  shall be  amended  to read  "$2,000,000."  The phrase
"excess  liability"  is hereby  added  after the word  "umbrella"  in the second
sentence of such Section.

     (b) The figure "$1,000,000" appearing in the second and fourth sentences of
Section 8.01(b) of the lease form shall be amended to rcad "$500,000."

     (c) In no event shall the maximum amount of liability  coverage required to
be carried by Tenant exceed  $3,000,000,  notwithstanding  the second unnumbered
paragraph of Section 8.01 of the lease form.

Section 8.02  Tenant's Insurance

          (a) Notwithstanding anything to the contrary in subsections 8.02(a) or
8.02(c) of the lease form,  Tenant shall not be required to carry earthquake and
flood insurance with respect to the Premises or rental  insurance as part of the
business  interruption  insurance maintained by Tenant. Tenant acknowledges that
Landlord may elect to provide such coverages as a part of its insurance  carried
pursuant  to Section  8.03 of the lease form,  and if  Iandlord  so elects,  the
premiums  for  providing  such  coverage  shall be included in common area costs
pursuant to Article XIV of the lease form.

           (b) The phrase "or excess  liability"  is hereby  inserted  in clause
(^ni) of such  subsection  8.02(a)  immediately  before  the  phrase  "policy to
provide." So long as


<PAGE>



Tenant |^|or an assignee  permitted  without  L,andlord's  prior written consent
pursuant to Addendum Section 10.01 is the tenant pursuant to this lease,  Tenant
may self  insure  the  coverage  required  pursuant  to clause  (^ni) of Section
8.02(a)  of the lease  form.  In the event of  damage or  destruction  for which
insurance proceeds would have been available



<PAGE>



                        "(b) The proceeds of such  insurance  shall,  so long as
           this lease remains in effect,  be used to repair or replace the parts
           of the Premises,  any improvements  thereto and personal  property so
           insured.  Upon any  termination  of this lease by L,andlord or Tenant
           pursuant  to  Sections  9.02,  9.03  or  9.04,  the  proceeds  of the
           insurance  required  pursuant to clauses (i) and (^ni) of  subsection
           (a) above shall be allocated as follows:

                             "(i)  The  first  such  proceeds,  up to the  whole
           thereof,  shall be  allocated  to Landlord in an amount  equal to the
           then unpaid principal balance of (and accrued and unpaid interest on)
           Total Costs, as defined in Addendum  Section 17.01 and as provided in
           Addendum Section 19.01;

                             "(^n)  The  next  such  proceeds,  up to the  whole
           thereof,  shall be  allocated  to Tenant  in an  amount  equal to the
           aggregate of the principal paid by Tenant with respect to Total Costs
           and any out of pocket  costs  incurred  by  Tenant  with  respect  to
           permanent improvements to |^|he Premises pursuant to Addendum Section
           17.02, Section 7.03 of the lease form or Addendum Section 7.03; and

                             "(^ni)  The  balance,  if any,  shall be  allocated
           between  -I.andlord  and Tenant in  proportion to the number of lease
           years  left in the  original  term,  with ten  percent  (10%) of such
           balance  allocated  to each lease year.  Tenant  shall be entitled to
           that  portion  of the  balance  allocable  to the  number of full and
           partial  lease  years  remaining  at the  date of  terznination,  and
           Iandlord shall be entitled to the remainder of such balance."

           Section 8.05  Waiver of Subrogation

                        Tenant's  waiver  pursuant to Section  8.05 of the lease
           form with  respect to any other  tenanl or occupant of the Center and
           their  respective  officers,   employees,  agents,   representatives,
           customers and business visitors shall be effective only to the extent
           that such other  tenants or occupants of the Center waive such rights
           of recovery as to Tenant and Tenant's  officers,  employees,  agents,
           representatives, customers and
a          business visitors.

           Sections 8.06 and 8.07 Indemnitv and Exemption

                       For the  purposes of Sections  8.06 and 8.07 of the lease
           form if, as to a particular  occurrence,  it is  determined  that any
           damages  resulting  therefrom were  partially  caused by Landlord and
           partially  caused  by  Tenant,  each  shall be  responsible  for that
           portion of the damages determined by multiplying the total damages by
           its  respective  percentage  of liability  determined by the tribunal
           which determines liability and damages.

           Section 9.01  Insured or Minor Damage

     Clause (b) of Section 9.01 of the lease form is hereby amended to read in


<PAGE>



           full as follows:

                "(b) such  damage  was  caused by a  casualty  actually  insured
                against or required to be insured  against  under  Sections 8.02
                and 8.03, then I.andlord




<PAGE>



     shall repair the balance of the  Premises and this lease shall  continue in
full force and effect."

      Section 9.02 Major Damage

               (a) The  phrase  "and not  actually  insured  against"  is hereby
      inserted in Section 9.02 of the lease form  immediately  before the phrase
      ", then Landlord may at its option."

               (b)  Landlord  shall  have the  right  to  terminate  this  lease
      pursuant  to  Section   9.02  of  the  lease   fot|^|n  only  if  Iandlord
      concurrently  elects to terminate  the leases of all other  tenants in the
      building in which the Premises are located.

"     . (c) In the event of a casualty to the Premises  which is not required to
      be insured  against  pursuant to Section  8.02 of the lease form and which
      results in an estimated  cost of repair or  replacement by Tenant equal to
      or in excess of ten percent  (10%) of the then total  replacement  cost of
      those  portions  of the  Premises  which  Tenant is  required to repair or
      replace pursuant to Section 9.01 of the lease form,  Tenant shall have the
      right to terminate this lease.  Such right shall be exercised,  if at all,
      in the manner and within the time  specified  in Section 9.02 of the lease
      form.

      Section 9.03 Major Damage to Center

               (a)  Landlord  shall  have the  right  to  terminate  this  lease
      pursuant to Section 9.03 of the lease form only if I,andlord  concurrently
      elects to  terminate  the leases of all other  tenants in the  building in
      which the Premises are located.

               (b) In the event that Landlord  does not elect to terminate  this
      lease  pursuant to Section  9.03 of the lease form,  I.andlord  and Tenant
      shall repair or rebuild pursuant to Section 9.01 of the lease form.

      Section 9.04 Damage Near End of Term

              The phrases  "twenty-four  (24)" and "ten percent (10%)" appearing
      in the first full  sentence  of Section  9.04 of the lease form are hereby
      amended to read, respectively, "twelve (12)" and "forty percent (40%)."

      Section 9.06 Definitions

               The  phrase  "the  building  of which  the  Premises  are a part"
      appearing  in  subsection  9.06(a) of the lease  form means the  two-stoiy
      building  available  for lease to mall  tenants  and  identibed  as "D" on
      Exhibit "A-1"  attached to this lease.  The word  "Landlord"  appearing in
      subsection   9.06(b)  of  the  lease  form  is  hereby   amended  to  read
      "I,andlord's  independent  appraiser." The phrase "or the Center" shall be
      added after the word "Premises" the frst time such word appears in Section
      9.06(a) of the lease form.


<PAGE>



      Section 10.01  Assignment and Subletting

     (a) The phrase "twenty-five percent (25%)" appearing in the fifth full



<PAGE>



     (b) The  provisions  of Section  10.01 of the lease form shall not apply in
connection with an assignment of this lease:

     (i)  To  Guarantors  (as  defined  in  Addendum  Section  20.01)  or to any
corporation  as  to  which  Tenant  or  Guarantors  own(s)  a  majority  of  the
outstanding capital stock;

     (ii)  Resulting  from  transfers  of stock of Tenant  between  or among the
existing stockholders of Tenant; and

     (iii) Resulting from any transfer of the stock of Tenant by any stockholder
of Tenant upon the death of such  stockholder or to any  person(s),  trust(s) or
other vehicles for estate planning purposes;

     so long as, in connection  therewith,  each of the following  conditions is
met:

     (A) In connection with such assignment  there is no change in the tradename
then in use at the Premises  (except as provided in subsection (h) below) and no
material change in the business conducted at the Premises;

     (B) Any assignee pursuant to clause (i) shall assume all of the obligations
of the  Tenant  hereunder  accruing  subsequent  to the  effective  date of such
assignment  by an  instrument  in  writing  in  form  and  substance  reasonably
satisfactory to Landlord;

     (C) The  original  Tenant  herein  shall  not be  released  from any of the
obligations  of the Tenant  hereunder,  accruing  either prior to or after the ,
effective date of such subletting or assignment;

     (D)  The  Guarantor  shall  not be  relieved  of  any  of  the  Guarantor's
obligations pursuant to the Guaranty; and

     (E) Within  thirty  (30) days  after the  effective  date of an  assignment
pursuant  to  clause  (i),  Tenant  shall  notify  Landlord  in  writing  of the
occurrence of such an event,  the effective date thereof,  the facts placing the
same within the provisions of this subsection, and any change in the address for
billings  and  notices  to Tenant  pursuant  to this  lease,  accompanied  by an
executed copy of the assumption required pursuant to this lease. ` In connection
with any  transaction  described  in this  subsection  (b),  Tenant shall not be
required to accelerate the payment of Total Costs (i.e.,  periodic  payment as `
provided  in  Addendum   Section  19.01  shall   continue   subsequent  to  such
transaction).

     (c) The  provisions  of Section  10.01 of the lease form shall not apply in
connection  with a sale of all or  substantially  all of the assets of Tenant or
more than


<PAGE>



     fortv-nine  percent  (49%) of the capital  stock of Tenant so lon|^| as, at
the date of such



<PAGE>



     (d) The  provisions  of Section  10.01 of the lease form shall not apply to
the  establishment  by Tenant of an employee  stock  option  plan,  the grant by
Tenant of options  pursuant to such plan or the issuance of stock of Tenant upon
exercise of options granted by Tenant pursuant to such plan. None of such events
shall be deemed to be an assignment for the purposes of this lease.

     (e) The phrase "in other  first-class  regional  shopping  malls" is hereby
inserted in clause (iii) of  subsection  10.01(d) of the lease form  immediately
before the phrase  "which it has, as  reflected  by,  among other  things."  The
phrase "If the proposed  assignee or sublessee intends to use the Premises for a
purpose not permitted  under Section 6.01 of this lease," is hereby  inserted at
the beginning of each of clauses (iv) and (v) of such subsection 10.01(d).

     (f) Landlord shall act reasonably in considering  any requested  assignment
or subletting which requires the consent of Landlord pursuant to this lease. For
this purpose it shall not be unreasonable  for Landlord to condition its consent
to a proposed  assignment or subletting upon immediate payment in full by Tenant
of the then  entire  unpaid  balance of Total  Costs and all  accrued and unpaid
interest thereon.

     (g) For the  purposes  of the  increase  in Minimum  Rent  provided  for in
Section 10.01(e) of the lease form and regardless of the then fair market rental
value of the  Premises,  such  increase  shall be $5.00 per square foot of Floor
Area per year with respect to any  assignment or subletting to be effected prior
to the end of the fifth  (Sth) full  lease  year and  $10.00 per square  foot of
Floor Area per year with respect to any assignment or subletting to be. eflected
thereafter.

     (h) In connection with any requested  change in the tradename in use at the
Premises as a part of a proposed  assignment or subletting,  Landlord's approval
of such change  shall not be  unreasonably  withheld,  taking  into  account the
quality of the store  operated in the Premises and the quality of the  tradename
proposed.

     .. (i) In the event that  Tenant  proposes  to assign its  interest in this
lease or sublet all or a portion of the  Premises in a  transaction  which would
require the approval of Iandlord pursuant to Section 10.01(a) of the lease form,
Tenant may (but need not) first present to I,andlord the terms upon which Tenant
proposes to assign or sublet.  Upon any such  presentation,  Landlord shall have
the option to acquire Tenant's  leasehold  interest as set forth in clause (^ni)
of Section  10.01(c) of the lease form.  Such option shall be  exercised,  if at
all,  by written  notice to Tenant  within  thirty  (30) days  after  Landlord's
receipt of Tenant's  presentation.  In the event that Landlord does not elect to
exercise  such option and Tenant  proceeds to obtain an assignee or subtenant on
substantially  the same terms as offered to I,andlord or at terms more favorable
to Tenant,  Landlord  shall not again  have the option set forth in such  clause
(^ni).  However,  any such  assignment  or  subletting  shall  require the prior
written  consent  of  Landlord  and shall be  subject  to all  other  applicable
provisions of Section 10.01 of the lease form and of this Section, including the
requirement that Tenant pay in full the then principal


<PAGE>



balance of the Total Costs and all accrued and unpaid interest thereon.

                 The  presentation  by Tenant provided for in this subsection is
solely at the  election of Tenant.  In no event  shall  Tenant be  permitted  to
present  more  than  [Section struck out]



<PAGE>



that the foregoing  deletion shall not be in derogation of Landlord's  rights to
approve or reasonably  disapprove any proposed assignee or sublessee taking into
account any fact or factor  which  Landlord  reasonably  deems  relevant to such
decision, including but not necessarily limited to those set forth in subsection
10.01(d) of the lease form.

Section 10.02 Release of Tenant and Guarantors

              Notwithstanding  the foregoing,  in connection with any assignment
as to which:

     (a) Either the prior  written  consent of Landlord is required and obtained
or the prior  written  consent of Landlord is not required  pursuant to Addendum
Section 10.01(c);

     (b) The then  principal  balance  of the Total  Costs and all  accrued  and
unpaid interest thereon is paid in full; and

     (c) The assignee:  executes and delivers to L,andlord a written  assumption
of the obligations of tne Tenant hereunder accruing  subsequent to the effective
date of such  assignment  in form  and  sut;stance  reasonably  satisfactory  to
I,andlord,

Tenant and Guarantors  shall be relieved of liability for all obligations of the
Tenant hereunder  accruing  subsequent to the effective date of such assignment.
The provisions of this Section shall not apply to any  subletting,  whether with
or without the prior written  consent of Landlord,  to any assignment  permitted
without  the prior  written  consent of Landlord  pursuant  to Addendum  Section
10.01(b) or to any  transaction  not deemed to be an assignment by virtue of the
provisions of Addendum Section 10.01(d). Nothing contained in this Section shall
be deemed or construed to relieve Tenant or Guarantors  from any  obligations of
the Tenant hereunder  accrued through the effective date of such assignment.  In
connection with any assignment  requiring the prior written consent of Landlord,
Landlord shall not be entitled to consider or take into account,  in determining
whether or not to consent to such assignment, that Tenant and Guarantors will be
released  upon  the  completion  of such  assignment  and the  payment  required
pursuant  to clause (b)  above.  The  foregoing  shall  not,  however,  preclude
Landlord from reviewing the financial strength of the proposed assignee.

Section 11.04 Awards

             (a) The last sentence of Section 11.04 of the lease forrn is hereby
amended to read in full as follo-vs:

     "Nothing contained herein, however, shall be deemed to preclude Tenant from
     obtaining,  or to give  Landlord  any  interest in, any award to Tenant for
     loss of or damage to Tenant's trade fi|^|.rtures, removable personal


<PAGE>



     property and leasehold improvements paid for by Tenant, for damages for
     cessation or interruption of Tenant's business or for moving expenses."



<PAGE>



Section 12.03 Interruption of Service

           In the event ths- utility  service to the Premises is interrupted (a)
for sixty (60) or more consecutive  minutes on any day between  Thanksgiving Day
and Christmas Day or for seventy-two (72) or more consecutive hours at any other
time during the year and (b) thereby  renders the  Premises  wholly or partially
untenantable for the reasonable  operation of Tenant's  business  therein,  then
Minimum Rent and the charges  specified  in the  Fundamental  I.ease  Provisions
shall  abate  from and  after  the  expiration  of such  sixty  (60)  minute  or
seventy-two  (72) hour period,  as  applicable,  in  proportion to the degree to
which  Tenant's use of the Premises is so impaired  until service is restored to
the Premises. Degree of impairment shall be measured by the decrease in Tenant's
gross sales for tlie period of such  interruption  as compared to the comparable
period of the year immediately  preceding such interruption,  and there shall be
no abatement if there is no decrease in Tenant's gross sales as a result of such
interruption. Nothing contained in this Addendum shall be deemed or construed to
defeat  or  diminish   the  right  of  I.andlord  to  recover  upon  any  rental
interruption insurance maintained by Landlord.

Section 12.04 Central System

          Notwithstanding  anything  to the  contrary  contained  in this lease,
Landlord  represents  that the  central air  distribution  system for the Center
shall  provide  suffcient  air  pressure  to the  Premises  to ensure the proper
operation of the equipment  installed by Landlord  and/or Tenant in the Premises
pursuant to the Approved Final Plans,  as defined in Addendum  Section 17.01, or
the plans for  Tenant's  Work,  if any. If the  representation  contained in the
preceding  sentence  proves to be incorrect,  Landlord  shall bear all costs and
expenses of modifying,  supplementing  or replacing  such central system (or the
portion  thereof  serving the  Premises) to the extent  necessary to ensure such
proper operation of Tenant's equipment.

Section 13.01  Defaults

            The phrase  "Subject to Section  16.23 of the lease form," is hereby
inserted at the beginning of the first full  sentence of subsection  13.01(a) of
the lease form.  The phrase "in  violation of this lease" is hereby  inserted at
the end of each of the two  sentences  appearing in  subsection  13.01(a) of the
lease form.

Section 13.02 Remedies

           Landlord  shall use  reasonable  efforts to relet the Premises in the
event of the vacation or  abandonment  of the  Premises by Tenant  and/or in the
event  Tenant is  dispossessed  by  I,andlord.  Notwithstanding  the deletion of
Section  13.02(b) of the lease form,  from and after the date under which Tenant
becomes a debtor in a proceeding  under the federal  Bankruptcy  Code,  Iandlord
shall not be required to furnish to Tenant any services  unless  Tenant pays for
such services on a current basis.



<PAGE>



Section 13.03 Default by Landlord

[Section struck out]

              Section 13.05  Holding-Over

                     The phrase  "three  hundred  percent  f300%)"  appearing in
              clause (a) of the first  sentence  of  Section  13.05 of the lease
              form i: hereby  amended to read "one hundred fifty percent  (150%)
              for the first month of such holding over and  thereafter  shall be
              two hundred percent (200%)."

              Section 13.06 Landlord's Rights

                    Notwithstanding  the last  sentence of Section  13.06 of the
              lease form, such administrative  charge shall be payable only with
              respect to the second such occurrence in any calendar year.

              Section 13.07 Waiver of Landlord's Lien

     Landlord hereby waives all lien rights and security  interests with respect
to all personal proper|^|ty,  furnishings,  equipment, machinery and fixtures of
Tenant placed by Tenant in the Premises. Landlord shall, within twenty (20) days
after receipt of written  request  therefor from Tenant,  execute and deliver to
Tenant  or  Tenant's  lender a  waiver  of any lien of  Landlord  upon  Tenant's
personal  property,  furnishings,  equipment,  machinery  and  fixtures  in  the
Premises  and a  consent  to a lien  on  such  personal  property,  furnishings,
equipment,  machinery and fixtures in the Premises by any such lender. Provided,
however, that in connection with any such waiver and consent:

     (a) The lien  granted  to any such  lender  shall not  extend  to  Tenant's
leasehold hereunder.

     (b)  Landlord  shall not be obligated to assist any lender or its agents in
gaining entry to the Premises or in removing any personal property therefrom. n

     (c)  Landlord  shall not be obligated to permit any lender or its agents to
conduct any auction or similar sale in the  Premises or to permit  Tenant or any
lender or its agents to store any such  personal  property in the Premises  more
than fifteen (15) days after the  expiration or any earlier  termination of this
lease.

     (d) Upon any removal of Tenant's personal property,  fixtures and equipment
from the Premises,  Tenant's lender or such lender's agents shall,  concurrently
with such  removal and at the sole cost and expense of such  lender,  repair any
damage to


<PAGE>



     the  Premises  caused by such  removal  and  otherwise  take such action as
necessary  to  eliminate  any unsafe  condition  (such as capping of any exposed
utility lines) in the Premises caused by such removal.

     (e)  The  form  and  substance  of  such  instrument  shall  be  reasonably
satisfactory to Landlord.

     As used  herein,  the term  "lender"  shall  include a lessor  of  Tenant's
personal property, furnishings, machinery, equipment and fixtures.

              Section 14.01  Definition



<PAGE>



                                      



however,  shall be deemed to  prohibit  or  otherwise  restrict  the  reasonable
placement by Landlord of mall  plantings,  mall seatings,  mall  directories and
other mall  amenities in the general  vicinity of the  Premises.  Moreover,  the
foregoing shall not be deemed to apply to mall amenities existing as of the date
of this lease, or to instances where access to and/or visibility of the Premises
is temporarily affected as a result of repairs, remodeling, seasonal promotions,
renovation or other  construction in the common areas in the Center. In no event
shall any  storefront  barricade  be erected  (whether  by  Landlord  or another
tenant)  immediately  adjacent  to the  Premises  in a manner or of a size which
materially  interferes  with  visibility  of or customer  access to the Premises
storefront  from the Enclosed  Mall. If any  storefront  barricade is erected in
violation of the immediately preceding sentence, and Landlord fails to cure such
violation within three (3) days after receipt by Landlord of written notice from
Tenant  specifying  the details of such  violation,  then  Minimum  Rent and the
charges  specified in the Fundamental  L.ease  Provisions  s:7al1 abate from and
after the expiration of such three (3) days until such violation is cured.

Section 14.03 Control by Landlord

           (a) Any net income to Landlord from parking charges (other than those
assessed  pursuant  to  sutisection  14.03(c) of the lease  form)  collected  by
Landlord in  connection  with the use of the parking areas serving the Center by
tenants or  customers  of tenants at the Center  shall,  to the  maximum  extent
permitted  by  applicable  governmental  regulations  or any  traffic  or energy
management associations to which L,andlord belongs or L.andlord or the Center is
subject, be applied to rEduce common area costs.

           (b) The  additional  charge  provided for in Section  14.03(c) of the
lease form shall not apply until the third or any  subsequent  occurrence in any
calendar year.

            (c) The phrase "best  efforts"  appearing in clauses (i) and (ii) of
Section  14.03(d)  of the  lease  form  shall  be  amended  to read  "reasonable
efforts." The term  'woluntary"  appearing in clause (i) of Section  14.03(d) of
the lease form shall have the  meaning  given to such term in  Addendum  Section
7.05. In no event shall the operation of clause (ii) of Section  14.03(d) of the
lease form result in a net cost to Tenant.

Section 14.04 Common Area Costs

            Notwithstanding  anything to the  contrary  in Section  14.04 of the
lease  form,  the  following  items  shall not be  included in common area costs
pursuant to this lease:


<PAGE>



     (a) Costs incurred for the repair, maintenance or replacement of the Center
or any  portion  or  component  thereof,  to the extent of (i) the  proceeds  of
insurance which I.andlord maintains or is required to maintain under this lease,
and (^n) any reimbursement  which Landlord receives under any warranties or from
any specific tenant or third party;

     (b) Costs of repair, abatement,  removal or clean up of hazardous materials
located in or about the Center and introduced therein by Landlord which {Section
struck out] common area costs for the lease year during which Landlord  proposes
to charge the same to tenants of the Center; and

     (d) Costs  incurred  in  connection  with the  rebuilding  of or repairs to
structural portions of the Center after the occurrence of a casualty pursuant to
Article IX of this lease or a condemnation pursuant to Article XI, except to the
extent  that  such  costs are part of  I.andlord's  routine  maintenance  of the
Center.

All expense items which are classified as capital  expenditures  under generally
accepted  accounting  principles and which are permitted to be charged to Tenant
hereunder  shall be amortized  pursuant to the last sentence of Section 14.04 of
the lease form.  Landlord shall not include in common area costs depreciation on
any item the replacement  cost of which has already been included in common area
costs, or vice versa.

Section 14.05 Proportionate Pavment

     (a) Tenant's  proportionate  share shall be  calculated by reference to the
greater  of the actual  occupancy  rate of the  Center or an  occupancy  rate of
eighty-five  percent (85%), in each case excluding (i) tenants who own their own
buildings (i.e., currently limited to Sears, Saks, Nordstrom,  Bullocks, Bullock
s Men s and the  Robinson's-May  buildings)  and (ii) a few  other  tenants  who
either do not pay common area costs or whose common area costs are included in a
gross rent paid by such tenants and, in the case of (i) and (ii),  respectively,
whose  contributions  are credited to common area costs prior to  calculation of
Tenant's proportionate share.

     (b) L.andlord will provide to Tenant,  upon Tenant's request  therefor,  an
audited report prepared by Landlord's  independent  certified public accountant,
Deloitte & Touche, or other comparable accounting frm selected by L,andlord,  of
costs and expenses incurred by Landlord for the operation and maintenance of the
common  areas for the  calendar  year  preceding  the date of Tenant's  request.
Landlord  will  use  reasonable  efforts  to make  such a report  available  for
distribution to Tenant on or before May 1 of each year. In the event that Tenant
contests or questions the  inclusion or the amount cf  particular  items therein
(including real property taxes),  L,andlord will provide Tenant with documentary
evidence reasonably satisfactory to Tenant in cs|^|nnection with such challenged
items.

     (c) Any  amount  due  Tenant  at the  expiration  of the term of the  lease
pursuant  to the last full  sentence  of  subsection  14.05(b) of the lease form
shall be  refunded to Tenant;  provided,  however,  if Tenant is in default,  or
there has  occurred an event  which,  with notice  and/or  lapse of time,  would
constitute  such a default,  at the expiration of the term hereof Landlord shall
credit any such amount due Tenant against such default.

Section 15.05  Advertising Expenditures


<PAGE>



          (a)  Notwithstanding  anything to the contrary in Section 15.05 of the
lease form,  Tenant shall spend each lease year an amount equal to not less than
one percent  (1%) of its gross sales for such lease year on  advertising  and/or
promoting pursuant to subsection 15.05(a) of the lease form.



<PAGE>



     (c) The  following  is hereby  added at the end of Section  15.05(a) of the
lease form:

     "If  Tenant  identifies  one or  more  o:her  locations  of  Tenant  in any
     advertising or promotion pursuant to this Section,  so Iong as the Premises
     is identified with equal prominence (i.e., tone, position, color, typeface,
     typestyle,  etc.) to the  identiIication of eac:i such other location,  the
     amount  to  be  credited  against  Tenant's   advertising  and  promotional
     requirement  pursuant to this Section shall be  detenr|^|3ined on the basis
     of  the  relative  exposure  levels  of  each  location  pursuant  to  such
     advertising or promotional vehicle.  Such relative exposure levels shall be
     reasonably  determined  by Tenant based upon  circulation  figures or other
     objective criteria. By way of example of the foregoing, if an advertisement
     lists both the  Premises  and one other  store of Tenant  and the  criteria
     utilized by Tenant indicate an exposure level of the  advertisement  to 600
     customers  or potential  customers  at the  Premises  and 400  customers or
     potential  customers  of  Tenant's  other  store,  then  the  cost  of such
     advertiseroent shall be allocated 60% to the Premises and 40% to such other
     store. In the event,  however, that (i) the Premises are primarily featured
     in such advertising or promotion, the entire cost thereof shall be credited
     against  Tenant's  advertising and promotion  requirement  pursuant to this
     Section or (^n) the Premises are not  identified  with equal  prominence to
     the identif cation of the other  location(s)  of Tenant,  no portion of the
     cost of such  advertising or promotion shall be credited  against  Tenant's
     a;tvertising and promotion requirement pursuant to this Section."

Section 15.07 Catalog Advertising

           (a)  Notwithstanding  anything to the contrary in Section 15.07 of
the lease form,  Tenant shall be required to  participate  only in the Christmas
catalog.  The cost to Tenant of such  catalog  advertisement  shall be  credited
against  Tenant's annual  advertising and  promotional  requirement  pursuant to
Section 15.05 of the lease form.

           (b) The word  "Landlord"  appedring  in the second  full  sentence of
Section  15.07  of  the  lease  form  is  hereby  amended  to  read  "Landlord's
independent  professional who prepares such  advertisements."  The rates charged
for catalog  advertising shall be applied uniformly and in a  non-discriminatory
fashion.  In addition,  I,andlord  and Tenant  acknowledge  that  currently  all
advertisements in the catalogs are one size - full page  advertisements.  In the
event that L,andlord  hereafter  provides such  advertisements  in more than one
size, Tenant may choose the size of its advertisement in each such catalflg.

Section 16.01  Offset Statement

           Landlord shall at any time and from time to time upon not less than


<PAGE>



twenty (20) days' prior  written  notice from Tenant  execute,  acknowledge  and
deliver to Tenant a  statement  in  writing  (i)  certifying  that this lease is
unmodified and in full force and effect (or, if modified,  stating the nature of
such  modification  and certifying that this lease,  as so modified,  is in full
force and effect) and the dates to which the Minimum  Rent and  additional  rent
are  paid in  advance,  if any,  (^n)  acknowledging  that  there  are  not,  to
I.andlord's knowledge, any uncured defaults on the part of Tenant hereunder, or



<PAGE>



conclusive  upon  Landlord  (A) that  |^|his  lease is in full force and effect,
without  modification except as may be represented by Tenant, (B) that there are
no  uncured  defaults  in  Tenant's  performance,  (|^|)  that not more than one
month's  Minimum  Rent  has  been  paid in  advance  and (D)  t|^|at  any  other
statements of fact  regarding the lease  included by Tenant in the statement are
correct.

Section 16.02 Landlord's Right of Access

           The phrase "and,  upon  reasonable  prior  notice to Tenant,  for the
purpose of' is hereby  inserted in clause (a) of Section 16.02 of the lease form
immediately before the phrase  "monitoring,  improving and remedying."  Landlord
shall use reasonable  efforts to minimize  interference  with Tenant's  business
operations  during any entry into the  Premises  pursuant to this lease.  In the
event that any entry into the Premises by Iandlord,  occasioned  other than by a
default by Tenant  under the lease,  renders the  Premises  wholly or  partially
untenantable,  then the Minimum Rent and chr.rges  specified in the  Fundamental
I.ease  Provisions  shall abate  during the period of  interruption  of Tenant's
business in  proportion  to the degree to which  Tenant's use of tho Premises is
impaired.  Degree of  impairment  shall be  measured  in the manner  provided in
Addendum Section 12.03.

Section 16.04 Floor Area

            Landlord shali, promptly upon completion of Landlord's Work pursuant
to Addendum Section 17.01,  cause thP Premises to be remeasured  pursuant to the
second  paragraph  of Section  16.04 of the lease form.  A copy of the report or
measurement  prepared by  Landlord's  architect  shall be  delivere:l to each of
I,andlord and Tenant. In addition, Tenant's architect may be present during such
measurement  by  Landlord's  architec|^|.  However,  the  report  of  Landlord's
architect  shall be final and conclusive  upon Landlord and Tenant unless Tenant
reasonably  demonstrates  that either (a) such measurement of Floor Area was not
in accordance  with the  definition of "Floor Area" pursuant to Section 16.04 of
the lease form or (b) the  computations or calculations of Landlord's  architect
are incorrect.

Section 16.05 Deposit and Financial Statements

          The  provisions  of  Section  16.05 of the lease  form  shall  have no
application  with  respect to this  lease.  The  balance,  if any,  of  Tenant's
security  deposit  pursuant to the Old Lease shall be applied  against the first
monthly Minimum Rent payable by Tenant pursuant to this lease.

Section 16.06 Late Payment

     The maximum rate of interest which Landlord may charge  pursuant to Section
16.06 of the lease form,  or any other  provision  of this lease  which  permits
Landlord to charge the "maximum rate of interest  permitted by applicable  usury
law "


<PAGE>



                                                                  ,
shall not exceed the lesser of (a) a rate equal to the reference rate of Bank of
America (Los Angeles),  as then in effect and as the same may thereafter  change
from time to time,  plus two percent  (2%) or (b) the  maximum  rate of interest
which L,andlord is then permitted to charge by the applicable usury law.



<PAGE>



notifying party obtains a  contemporaneous  written receipt for such Notice from
an  authorized  or  ostensible  agent or employee of the other party.  Provided,
however,  that personal  service  shall not be required in  connection  with any
Notice served as a prerequisite to or to commence any unlawful detainer or other
legal  action  brought to enforce or in  connection  with this  lease.  Any such
notice,  including a notice  pursuant  to  Sections  13.01(b) or 13.01(c) of the
lease form,  shall be served by certified or  registered  mail,  return  receipt
requested, and shall be effective on the date of receipt or refusal indicated on
the return receipt, notwithstanding any statute or rule of law which specifies a
later  effective  date for such  seivice.  Moreover,  any statute or rule of Iaw
which extends the time for response or action by Tenant as the result of seivice
of a notice  other than by personal  service  shall not apply to notices  served
pursuant to this subsection  (a). Tenant waives the  requirements as to personal
service  contained in Section 1161 et se|^|g. of the Code of Civil Procedure and
of any  other  statute  or rule of law  which  requires  personal  service  as a
condition  to exercise by  Landlord  of any remedy  against  Tenant (but not the
requirement  that  such  notices  be  served,  in the  manner  descnbed  in this
Section). Nothing herein shall be deemed or construed to relieve Landlord of the
obligation to serve any notice upon Tenant;  rather,  the parties  instead agree
that any such notice shall be served upon Tenant at its  addresses for notice in
the  applicable  Fundamental  I.ease  Provision in the manner  permitted by this
subsection.

            (b) With respect to any notices  given to Tenant by mail,  copies of
such  notice  shall  be sent  to  Tenant  at both  addresses  set  forth  in the
applicable Fundamental Lease Provision.

Section 16.14 Recording

            Neither  party  hereto  shall  record  this lease or a "short  form"
memorandum of this lease without the prior written consent of the other.

Section 16.15 Advertising and Promotional Fund

             (a)  Notwithstanding  the  provisions  of  clause  (^n) of  Section
16.15(b) of the lease form,  Tenant's annual  contribution to the Fund after any
such  adjustment  shall not exceed one hundred  ten  percent  (110%) of Tenant's
annual  contribution  irnmediately  prior to such  adjustment.  The first annual
adjustment to Tenant's annual  contribution to the Fund shall not occur prior to
February 1,1995.

           (b) The  provisions of Section  16.15(c) of the lease form shall have
no application with respect to this lease.

Section 16.21 Non-Disclosure of Irase Terms

          In addition to the disclosures permitted by Section 16.21 of the lease
fonn,  either  party  may  disclose  the terms of this  lease to its  respective
attorneys, insurance brokers and agents, architects,  contractors, engineers and
consultants.


<PAGE>



Section 16.25 Relocation of Tenant

     Notwithstanding| the provisions of Section 16.25 of the lease form any



<PAGE>



     (b) A premises with rear service door access to a service  corridor leading
to a loading dock;

     (c) Located on the first  |^|evel  (i.e.,  the ground floor) of the Center;
and

     (d) Have at least as many lineal feet of storefront as the Premises.

             In addition, with respect to any such relocation:

     (i) Landlord may not relocate Tenant more than once during the lease term.

     (ii)  Tenant  shall  not be  required  to lose  any  days of  operation  in
connection with such relocation.

     (iii) The effective date of the relocation  (i.e.,  the opening date of the
new store) shall not occur between  November 15 of any year and January 1 of the
following year.

     (iv) Landlord  shall be entitled to relocate  Tenant only to  accommodate a
major  remodeling of the Center or the addition of a major  department  store to
the Center.  Landlord  shall not relocate  Tenant to accomplish  the purpose set
forth in the first sentence of Section 16.25 of the lease form.

     (v) In the event that Tenant  elects to  terminate  this lease  rather than
being  relocated  pursuant  to  Section  16.25  of  the  lease  form,  as of the
termination date the then principal balance of the Total Costs shall be forgiven
and waived. Pending such termination, Tenant shall make all per7odic payments on
account  of Total  Costs and  interest  accrued  thereon  required  pursuant  to
Addendum Section 19.01.

     (vi)  Landlord  shall pay all out-of  pocket  costs  incurred  by Tenant in
connectinn with such relocation,  other than  compensation  payable by Tenant to
its employees.

Section 16.29 Tax Benefits

             Notwithstanding  the provisions of Section 16.29 of the lease form,
Tenant shall be entitled to the tax benefits attributable to all improvements to
the Premises the cost of which is included in Total  Costs.  Within  thirty (30)
days after  Landlord's  receipt of written  request from Tenant,  Landlord shall
furnish  to Tenant a written  list,  in  reasonable  detail,  setting  forth the
improvements described in this Section together with the costs thereof.

Section 17.01 Landlord's Work



<PAGE>
          Landlord  shall,  prior to delivery of  possession  of the Premises to
Tenant, coordinate (w) all abatement or removal of asbestos bearing materials in
the Premises,  (x) all  demolition  work required in the Premises,  (y) all work
which is the  responsibility  of Landlnrd  pursuant to Exhl'bit "C' and which is
required in the Premises, and (z) the

     (a) Prior to or promptly  upon the  execution and delivery of this lease by
L.andlord and Tenant,  I,andlord shall retain Paul J. Ruffing (the "Architect"),
to complete a  preliminary  design of the Premises  (the  "Preliminary  Plans").
Approval of the Preliminary  Plans shall not be unreasonably  withheld and shall
be deemed given by a party if such party fails to disapprove the same by written
notice to the other party and the Architect  within five (5) business days after
receipt of the Preliminary Plans. Upon mutual approval of the Preliminary Plans,
Iandlord shall obtain from a tenant improvements contractor selected by Landlord
("I,andlord's  Contractor") a preliminary  estimate of the cost to construct the
TI Work (not including the costs of design of  L,andlord's  Work or the costs of
performing the balance of Landlord's Work) pursuant to the approved  Preliminary
Plans. In the event that the preliminary cost estimate of the TI Work,  together
with costs of the TI Work not included in the estimate (i.e.,  design and permit
costs for the TI Work) and the  relocation  cost  estimate  furnished  by Tenant
pursuant to Addendum  Section  2.44,  is  collectively  greater  than  $400,000,
I|^|andlord  shall cause the Architect to promptly revise the Preliminary  Plans
to reduce such  collective  cost to  $400,000  and shall  circulate  the revised
Preliminazy Plans to I,andlord and Tenant for approval.  Promptly upon obtaining
an approved set of Preliminary Plans with a collective  estimated cost of the TI
Work and the  relocation  costs of  $400,000 or less,  Landlord  shall cause the
Architect to prepare  working  drawings and  specifcations  (along with a finish
schedule)  (the "Final  Plans") with respect to  Landlord's  Work based upon the
Preliminary  Plans.  Promptly  upon  receipt by  Landlord  of such Final  Plans,
Landlord  shall  forward a copy to Tenant for  Tenant's  approval.  Tenant shall
approve or  disapprove  such Final Plans by written  notice to Landlord  and the
Architect  within five (5) business  days after  Tenant's  receipt of such Final
Plans, and failure to


<PAGE>



     disapprove by such written  notice within such five (5) business day period
shall be deemed approval of such Final Plans. Any such disapproval shall specify
the particular item or items so disapproved.  In no event, however, shall Tenant
disapprove  such Final  Plans to the extent  such Final  Plans  reflect  matters
previously approved by Tenant as shown in the approved Preliminary Plans.

     The  Preliminary  Plans shall  prominently  indicate  the Floor Area of the
Premises.  In the event  that the Floor  Area is more than  5,200  square  feet,
Tenant may,  by written  notice to Landlord  and the  Architect  within five (5)
business days after Tenant's receipt of the Preliminary Plans,  require that the
Premises be reduced to 5,200 square feet of Floor Area as a part of the revision
of such Preliminary Plans.

     (b) In the event that Tenant disapproves such Final Plans in the manner and
within the time set forth in  subsection  (a) above,  and Landlord  accepts such
changes,  Landlord shall cause the Architect to promptly revise such Final Plans
to meet  such  objections  and  shall  resubmit  the same to  Tenant  for  final
approval.  Tenant shall approve or disapprove the revised Final Plans by written
notice to I.andlord  and the  Architect  within  three (3)  business  days after
receipt of the same,  and failure to  disapprove  by such written  notice within
such three (3)  business  day period  shall be deemed  approval of such  revised
Final Plans.  Tenant shall not disapprove the revised Final Plans so long as the
Architect  has revised such Final Plans in accordance  with Tenant's  objections
pursuant to subpara|^|aph (a) above. The approved Final Plans resulting from the
foregoing approval process are herein referred to as the "Approved Final Plans."



<PAGE>



     the Work from at least three (3) contractors selected by Landlord. Landlord
shall  furnish  to Tenant a copy of each such bid or  estimate  together  with a
statement  or  estimate  of all costs of the TI Work  (i.e.,  design  and permit
costs) not included in any such bid or estimate  and  Landlord's  statement,  in
reasonable  detail as to the amount, if any, of such aggregate cost which Tenant
may be requested  to  reimburse to Landlord.  If the lowest such bid or estimate
for the TI Work, together with the costs of the TI Work not included in such bid
or estimate and the relocation costs,  collectively  exceed $400,000,  lLandlord
and Tenant shall use  reasonable  efforts to reduce the aggregate cost of the TI
Work to an amount  which,  with the  relocation  cost,  is equal to or less than
$400,000.  To the extent  that  I.andlord  and Tenant are unable to reduce  such
aggregate  cost to $400,000,  L,andlord  may request  Tenant to pay for all such
excess over $400,000 by written  notice of its election to do so to Tenant prior
to  the  commencement  of  I,andlord's  Work.  In  addition,  if  Tenant  or any
governmental  authority requires any changes or additions to or modifications of
the TI Work which  increase  the cost  thereof  above the  aggregate  cost which
L.andlord is obligated to pay, Landlord may request Tenant to reimburse Landlord
for any such excess costs. Each reimbursement  requested from Tenant pursuant to
this  subsection  (i.e.,  those  resulting  from initial excess costs or changes
initiated by Tenant or any  governmental  authority)  shall, if Tenant agrees to
pay the same, be made by Tenant to Landlord,  as additional rent,  within thirty
(30) days after  Tenant's  receipt of  Iandlord's  invoice or statement for such
excess cost or cost  increase.  Any failure of Tenant to make any payment  which
Tenant agrees to pay pursuant to this subsection shall entitle  Landlord,  after
notice and failure to cure  pursuant to Section  13.01 of the lease form, to all
remedies  available  to Landlord on account of the failure of Tenant to make any
payment  of rent,  including  but not  limited  to those  remedies  set forth in
Section 13.02 of the lease forrm.  Moreover, if Tenant fails to make any payment
which Tenant  agrees to pay pursuant to this  subsection  within the period due,
Landlord may delay  commencement  of I,andlord's  Work or cease the same pending
receipt  of such  payment.  The  period  of any such  delay in  commencement  or
cessation,  plus any  additional  time  required for  Landlord's  contractor  to
commence or recommence  I.andlord's  Work,  shall, if Tenant's failure to pay is
the only cause of such delay, be a period of Tenant Delay pursuant to subsection
(e) below.  For the purposes of this  subsection,  the cost of the TI Work shall
include  all fees and costs paid by Landlord  to the  Architect  or to any space
planners or engineers in  connection  with the design of the TI Work,  all costs
and fees paid by  I,andlord  to obtain all  governmental  approvals  and permits
required in connection with the TI Work, all labor and material costs, all costs
of  purchase,  installation  and  construction  of the TI Work  and all  profit,
overhead and general  conditions  costs paid by Iandlord to its contractor  with
respect to the TI Work.

     In the  event  that  the  initial  aggregate  cost of the TI  Work  and the
relocation costs collectively  exceed $400,000,  and Landlord requests Tenant to
pay for such excess in the manner and within the time set forth  herein,  Tenant
shall have the a- option to decline to pay for such excess;  provided, if Tenant
so declines,  Landlord may elect to pay such excess at its sole cost and expense
and such excess shall not be included in the 'Total  Costs" to be paid by Tenant
in accordance with Addendum Section 19.01 below. If upon Tenant's refusal to pay
such excess, L,andlord also declines to pay for the


<PAGE>



     cost of the TI Work and relocation costs in excess of $400,000,  each party
shall have the option to terminate  this lease by giving  written  notice of its
election to do so to the other party. In such event,  this lease shall terminate
on the date of receipt by the other  party of such notice of  termination,  each
party  shall bear its own costs and fees  incurred  in the [Section struck out]



<PAGE>



     subsection or Addendum  Sections  18.01 or 20.01,  Landlord  shall bear all
fees and costs paid by Landlord  to the  Architect  or to any space  planners or
engineers in connection with the design of L,andlord's Work.

     (d) The  total  amount  paid by  Landlord  for the Work and the  relocation
costs,  but excluding any excess above $400,000 which I.andlord elects to pay in
accordance with the immediately preceding paragraph, shall be referred to as the
'Total Costs."

     (e) As used herein,  the term 'Tenant  Delays" shal1 mean all actual delays
in  commencement  or  completion of  L,andlord's  Work solely caused by Tenant ,
including but not limited to:

     (i) Any actual delay in the completion of  L,andlord's  Work resulting from
changes in Landlord's Work initiated by Tenant after approval of the Final Plans
therefor; and

     (ii) Any  failure  of  Tenant  to make any  payment  required  pursuant  to
subsection (c) above within the time therein specified for such payment.

     (f) If substantial  completion of Landlord's  Work is delayed by any Tenant
Delays,  as defined  above,  then the Rent  Commencement  Date shall be advanced
(i.e.,  moved earlier in time) by a number of days equal to the aggregate number
of  days  of  Tenant  Delay.  For  the  purposes  of  this  lease,  "substantial
completion"  shall  mean  (i)  complete  to the  extent  required  to  obtain  a
certihcate of occupancy or temporary  certificate  of occupancy  with respect to
the Premises and (^n) functionally complete.

     (g) Promptly upon  substantial  completion  of  Landlord's  Work , Landlord
shall  deliver  possession  of the  Premises  to Tenant as  provided in Addendum
Section 2.02 above.

     (h) Promptly  upon approval of the Approved  Final Plans and  completion of
the bidding and payment  allocation  process  pursuant to subsection  (c) above,
L.andlord  shall  cause the  general  contractor  submitting  the  lowest bid to
construct  or install  Landlord's  Work in the Premises in  accordance  with the
Approved Final Plans and the following:

     (i) There shall be no changes or additions  to the Approved  Final Plans or
Iandlord's Work with respect thereto, without in each instance the prior written
approval of both parties hereto.

     (ii)   Landlord's   responsibilities   with   respect  to  the  design  and
construction of Landlord's Work shall include the  responsibility  to obtain all
governmental permits and approvals required in connection with Landlord's Work.



<PAGE>



     (iii)  Landlord  shall use  reasonable  efforts to  substantially  complete
Landlord's Work on or before September 7,1993.  Nothing herein,  however,  shall
require  Landlord to utilize any overtime or special  rate labor  unless  Tenant
agrees in writing to pay  pursuant  to  subsection  (c) above any portion of the
Total Costs, in excess of $400,000  resulting from such overtime or special rate
labor.



<PAGE>



governmental   authorities  having   jurisdiction  of  the  Premises,   and  all
governmental approvals and permits obtained in connection with Landlord's Work.

              (i) The only furniture,  fixtures and equipment  ("FF&E") included
in Landlord's  Work shall be that  provided  for, if any, in the Approved  Final
Plans and shall be limited to fixtures housing,  storing,  displaying or holding
merchandise.  Any other furniture,  fixtures or equipment required for Tenant to
operate  in the  Premises  shall be either  furniture,  fixtures  and  equipment
relocated by Tenant from the Old  Premises to the Premises  pursuant to Addendum
Section 2.04 or new furniture, fixtures and equipment installed by Tenant in the
Premises pursuant to Addendum Section 17.02 below.

             (j) During the course of construction,  Tenant shall have the right
to reasonably  review Landlord's Work. Such review right shall be exercised in a
manner which shall not  unreasonably  interfere with the course of  construction
but may be  exercised at such  intervals  as are  selected by Tenant,  including
daily if desired by Tenant.  Tenant may object to or  disapprove of any items of
I,andlord's  Work,  but only if the same fail to conform to the  Approved  Final
Plans and such objection or disapproval is communicated  to L,andlord  within 72
hours following the first review or inspection by Tenant following  construction
or installation of the item as to which Tenant objects or disapproves.

            (k)  Not  less  than  thirty  (30)  days  prior  to the  anticipated
substantial  completion  of  Landlord's  Work,  Landlord  shall notify Tenant in
writing  of  the  date  upon  which  Landlord  expects  Landlord's  Work  to  be
substantially completed.

             Except as  specifically  provided in this Addendum  Section  17.01,
Iandlord shall have no obligation, either as to performance or payment of costs,
to remodel or renovate the Premises or any portion thereof for Tenant's use. All
work  required for Tenant's use of the Premises  shall,  except as  specifically
provided in this  Section,  be included  in Tenant's  Work  pursuant to Addendum
Section 17.02.

Sections 17.02 -17.04 Tenant's Work

           Any work in the Premises in addition to  Landlord's  Work  ('Tenant's
Work") shall be the sole  responsibility  of Tenant,  both as to performance and
payment of costs, and shall comply with the following:

            (a) Any Tenant's Work shall be subject to the prior written approval
of Landlord and shall conform to plans therefor  prepared by Tenant and approved
by L,andlord.

            (b) Any Tenant's Work shall comply with all applicable provisions of
this lease,  including without  limitation those contained in Sections I7.03(a),
(b) and (c), if applicable,  and 17.04(c) and (d), if  applicable,  of the lease
form, and all applicable


<PAGE>



requirements of all governmental authorities having jurisdiction with respect to
the Premises. In addition, Tenant's Work shall be of a quality at least equal to
the quality of L,andlord's Work.

            (c)   There shall be no abatement of rent beyond the Rent



<PAGE>

     (d) Section 17.02 of the lease form shall have no application  with respect
to Tenant's Work.

     (e) The provisions of Sections  17.03(d) and 17.04(a),  (b), (e) and (f) of
the lease form shall have no application with respect to Tenant's Work.

     (f) Tenant shall commence Tenant's Work promptly following the Commencement
Date,  shall  diligently  pursue  Tenant's Work to completion and shall complete
Tenant's  Work  and  open  the  Premises  for  business  on or  before  the Rent
Commencement  Date.  No delay in  completion  of  Tenant's  Work shall  delay or
otherwise affect the Rent Commencement Date.

     (g) The plan  review fee  specified  in Section  17.03(d) of the lease form
shall be  required  only in  connection  with a  remodel  or  alteration  of the
Premises by Tenant (other than Tenant's Work) as to which Landlord's approval or
consent is required in connection with such remodel or alteration.

     (h) With respect to  I.andlord's  approval or disapproval of Tenant's Work,
Landlord's  approval  shall be deemed given unless  Landlord  shall,  by written
notice  within  ten (-10)  days after  Landlord's  receipt of a complete  set of
drawings and specifications, disapprove the same or any parts thereof.

     (i)  Notwithstanding  anything  to the  contrary  contained  in this lease,
Tenant  may  relocate  from  the Old  Premises  to the  Premises  some or all of
Tenant's fixtures in the Old Premjses and reuse the same in the Premises.

Section 17.05 Construction Charges

     Notwithstanding  anything  to the  contrary  contained  in this lease or in
Exhibits "C" and "E" hereto:

     (a)  Tenant  shall  not be  required  to pay  any  fee  for  hooking  up to
Landlord's  HVAC  system,  or any fees or other  charges to the local  purveyors
providing water, gas, electrical or customary telephone services to the Premises
during  construction  of Landlord's  Work. All such fees payable to Landlord are
waived by Iandlord, and all


<PAGE>



     such fees  payable to a third party  shall be paid  directly by Landlord as
part of I,andlord's Work hereunder and included in Total Costs.

     (b) Tenant shall not be required to pay to Landlord any charge for Tenant's
storefront barricade or for placement of Tenant's sign or logo thereon.

     (c) Except,  for Sections  II.B.1 (last  sentence) and II.D. of Exhibit "C'
and I.C., I.H., I.I., I.K., IV.F.3.(c),  V.C.2., V.C.3., V.C.4., V.D.l., V.D.2.,
V.D.3.  and V.D.4.  of Exhibit  "E,"  Exhibits  "C' and "E" hereto shall have no
application with respect to Tenant's Work.

Section 17.06 Directional Signage

     Landlord  shall,  at Landlord's  cost,  place  Tenant's name and relocation
information  on a sign  on or  near  the  construction  barricade  covering  the
storefront of the



<PAGE>



Section 18.01  Conditions to Effectiveness of Lease

     Landlord and Tenant acknowledge and agree that the continued  effectiveness
of this lease is conditioned  upon (i) vacation and surrender to Landlord by the
tenant of the On The Go Travel  store  (space  number  1012) in the Center on or
before May 28,1993, (ii) vacation and surrender to Landlord by the tenant of the
Bergstrom store (space number 1030) in the Center on or before May 15, 1993 and,
(iii)  L,andlord's  ability to enter into an  agreement on or before May 10,1993
with the tenant of the  Benetton  store  (the  "Existing  Tenant")  on terms and
conditions  mutually  satisfactory  to Landlord and Existing  Tenant  providing,
among other  things,  for Existing  Tenant to surrender  and vacate the premises
currently  occupied  by  Existing  Tenant  on or  about  June  l,  1993  and the
relocation of its business to another space in the Center.

          Landlord shall promptly  notify Tenant when each of the conditions set
forth herein has been satisfied. L,andlord shall use reasonable efforts to cause
each of the conditions  her|^|in to be satisfed.  If the condition  expressed in
clause (^ni) above has not been  satisfied by May 10,1993,  Landlord  shall have
the option to terminate  this lease by giving  written notice of its election to
do so to Tenant.  In such  event,  this  lease  shall  terminate  on the date of
Tenant's receipt of Landlord's notice of termination,  each party shall bear its
own costs and fees incurred in the negotiation and preparation of this lease and
in performing  its  respective  obligations  hereunder  through the date of such
termination,  the Old Lease  shall  remain in full force and effect  through the
term thereof,  and neither party shall have any further  obligation to the other
under this lease.  Pending any such  termination,  each party shall  perform its
respective  obligations  pursuant  to this  lease.  In the event that all of the
conditions  herein are not satisfed by June l,1993,  and provided  that Landlord
has not  terminated  this  lease in the  manner and  within|^|  the time  herein
specified, each date for action hereunder by L,andlord shall be delayed on a day
for day basis until satisfaction of the last of the conditions herein.

Section 19.01 Total Costs

         As additional rent due hereunder from Tenant to L,andlord, Tenant shall
pay to Landlord  an amount  equal to the Total Costs (as that term is defined in
Addendum Section 17.01 above) together with interest thereon as follows:

          (a)  Interest  shall accrue from the  Commencement  Date on the unpaid
principal  balance of the Total  Costs until paid in full at a rate equal to the
reference  rate of  Bank of  America  (L,os  Angeles)  plus  one  percent  (1%).
Initially,  such  reference rate shall be the reference rate in effect as of the
Rent Commencement Date. Thereafter, the interest rate payable by Tenant shall be
adjusted as of each  anniversary of the Rent  Commencement  Date by reference to
such  reference  rate as in  effect  as of such  anniversary  date and each such
adjustment shall be effective until the next succeeding  anniversary of the Rent
Commencement  Date.  Subject to  subsection  (f) below,  in no event  shall such
interest  rate ever  exceed ten  percent  (10%) per annum,  notwithstanding  any
adjustments  otherwise  required  pursuant to the provisions of this  subsection
(a).


<PAGE>



         (b)  Additional  rent shall be payable under this  Addendum  Section in
monthly  installments  in  accordance  with  an  amortization   schedule  to  be
calculated in {section struck out]



<PAGE>



to subsection (a) above.  As and when necessary due to changes in the applicable
interest rate,  L,andlord shall modify the original  amortization table supplied
to Tenant and shall furnish to Tenant copies of such modifications.  Payments by
Tenant pursuant to this subsection (and the  amortization  table to be developed
by L,andlord) shall be as follows:

                (i) Tenant  shall  make  monthly  additional  rent  payments  to
Landlord on account of the Total Costs.  The fust such  payment  shall be due on
the first day of the first calendar month following the Rent Commencement  Date,
and  subsequent  payments  shall  be due on the  first  day of each of the  next
succeeding 119 calendar months.

                (^n)  Through  July  1997,  monthly  payments  shall be equal to
accrued and unpaid interest on the Total Costs.

                  (^ni) The  payment  due  August  1,1997  shall be in an amount
equal to  accrued  and unpaid  interest  on the Total  Costs plus the  aggregate
deferred principal  amortization through July 1997. For this purpose,  aggregate
deferred  principal  amortization  shall equal that amount of  principal  of the
Total Costs which would have been paid by Tenant  through  July 1997 if Tenant's
monthly  additional  rent payment  obligation  pursuant to this Section had been
structured to provide for 120 equal monthly  payments of principal  plus accrued
interest thereon. .

                (iv) The monthly  payments due September  1,1997 and  thereafter
shall each be in an amount equal to the remaining  principal amount of the Total
Costs (after giving effect to the payment  provided for in clause (^ni)) divided
by the number of remaining  monthly payments  pursuant to this subsection,  plus
accrued and unpaid interest at the rate determined,  from time to time, pursuant
to subsection (a) above.

           (c) Tenant may,  at any time and from time to time,  pay an amount to
Landlord  on account of the  additional  rent due under  this  Addendum  Section
19.01, in addition to the monthly installments called for in the then applicable
amortization schedule, provided such additional payment is $1,000 or more.

          (d) Each  payment  pursuant to  paragraphs  (b) and (c) above shall be
applied  first to the payment of accrued and unpaid  interest and the balance to
the principal of the Total Costs.

           (e) Notwithstanding  anything to the contrary herein, the entire then
unpaid  balance of the Total Costs and all accrued and unpaid  interest  thereon
shall  be due  and  payable  in full  (subject  to the  limitations  hereinafter
provided) upon the first to occur of:

     (i) Any early  termination  of this lease  pursuant  to the  provisions  of
Articles IX, XI or XIII of the lease form.  Upon any  termination  of this lease
pursuant


<PAGE>



to any such  article,  Landlord  shall have the right to seek  recovery  of such
unpaid  balance  and accrued  interest  against any  insurance  or  condemnation
proceeds  payable to Tenant,  and Tenant  hereby  assigns  its  interest in such
proceeds to  Landlord up to the full amount of such  proceeds or the then unpaid
balance of the Total Costs and all accrued interest



<PAGE>



and in the  amount  required  by  Section  8.02 of the lease form with a carrier
meeting the requirements of Section 8.04 of the lease form,  Landlord's recovery
on account of Total  Costs and  accrued  and unpaid  interest  thereon  shall be
limited to the insurance  proceeds,  if any,  payable to L.andlord on account of
such casualty pursuant to Addendum Section 8.02(c). Except as to recovery out of
such condemnation  proceeds or such insurance  proceeds,  I,andlord shall not be
entitled to seek recovery of the Total Costs or accrued interest thereon against
Tenant  or  Guarantors  in the  event of a  termination  of this  lease due to a
casualty or condemnation.

                (^n) An  assignment  of  Tenant's  interest  in this  lease or a
subletting of all or substantially  all of the Premises by Tenant,  other than a
transaction as to which Landlord's  consent is not required pursuant to Addendum
Section 10.01(b).  Notwithstanding anything to the contrary herein, Iandlord may
require payment in full of the then entire unpaid balance of the Total Costs and
all  accrued  and unpaid  interest  thereon  as a  condition  to any  consent by
I,andlord to an assignment or subletting.

In the event of a  termination  of this lease  pursuant to any provision of this
lease other than Articles IX, XI or XIII,  such  termination  shall,  unless the
provision setting forth such termination is to the contrary,  operate to relieve
Tenant  and  Guarantors  of  all  obligations   hereunder   subsequent  to  such
termination to pay Total Costs. Nothing herein, however, shall relieve Tenant or
Guarantors  of any payment  obligations  on account of Total  Costs  accrued and
unpaid prior to such termination.

          (f) Failure of Tenant to pay any amount due pursuant to subsection (b)
above  when due  shall be deemed a default  pursuant  to this  lease to the same
extent as other additional rent due pursuant to this lease. In such event,  such
unpaid  amount  (but not the  accrued and unpaid  interest  thereon)  shall bear
interest at a rate equal to the  reference  rate of Bank of America in effect at
the date of the default plus two percent (2%) from the date such payment was due
and not paid until payment of such amount in full. In no event,  however,  shall
such interest rate ever exceed eleven  percent (11%) per annum,  notwithstanding
any adjustments otherwise required pursuant to the provisions of this subsection
(f).  Upon the giving of the notice  required  in section  13.01(b) of the lease
form and failure of Tenant to pay such unpaid amount  within the time  provided,
the entire  then  unpaid  balance of the Total  Costs and all accrued and unpaid
interest  thereon  shall be due and  payable  in full and the  unpaid  principal
balance  shall bear interest at the rate  provided in this  subsection  from the
date of  acceleration  until  payment in full.  Upon the  occurrence of any such
default and  acceleration  pursuant to this  subsection  (f),  Iandlord shall be
entitled  to all  remedies  against a  defaulting  tenant  pursuant to a written
lease,  including  but not  limited to those  provided  in  Article  XIII of the
printed form.

          (g) Until such time as Tenant pays all principal and accrued  intPrest
required  pursuant to this Addendum  Section 19.01,  Tenant shall not, and shall
not cause or permit any parent,  affiliate or  subsidiary of Tenant to open more
than one (1)  other  retail  store,  with the  exception  of that  certain  Toys
International store to be located at


<PAGE>



the Santa Monica Place Mall in Santa Monica,  California. The provisions of this
subsection  shall not apply to a replacement  (whether or not in the same center
and  whether  or not  within  the same  geographical  area) of any store lost or
closed  by  Tenant [Section struck out]


<PAGE>



Section 20.01  Guarantor of Tenant's Obligations

             Tenant  acknowledges that a material  consideration to Landlord for
its  execution  and delivery of this lease is the  execution and delivery by Mr.
Gayle Hoepner and Ms. Constance R. Hoepner ("Guarantors"), of a written guaranty
of Tenant's  obligations  pursuant to this lease.  Accordingly,  within ten (10)
days after  Tenant's  execution and delivery of this lease to L,andlord,  Tenant
shall deliver to Landlord a written  guaranty  executed by Guarantors and in the
form of Exhibit "I" attached hereto (the "Guaranty").

            In the event that Tenant  fails to deliver  such  executed  Guaranty
within the time  specified in this Section,  Landlord  shall have the option to
terminate  this lease.  Such option  shall be  exercised,  if at all, by written
notice to Tenant  given at any time  after the  expiration  of such ten (10) day
period and prior to the delivery of such  executed  Guaranty.  In the event that
L,andlord is entitled to exercise  such option and timely and properly  does so,
this lease shall terminate on the date of Tenant's receipt of Landlord's notice,
Tenant shall promptly  surrender  possession of the Premises to I.andlord,  each
party shall bear its respective  costs and fees incurred in the  negotiation and
preparation of this lease and in performing its respective obligations hereunder
through the date of termination  and neither party shall have any further rights
or  obligations  with respect to the other  pursuant to this lease.  Pending the
delivery  of such  executed  Guaranty,  each of the  parties  shall  perform its
respective  obligations  hereunder.  In the event of a termination of this lease
pursuant to this Section 20.01,  the Old Lease shall remain in full force az|^|d
effect through the term thereof.

Section 21.01  Interpretation

           This  Addendum is attached to and forms a part of a certain  lease of
even date  between  I.andlord  and  Tenant.  In the  event of any  inconsistency
between the  provisions of this  Addendum and any other  provision of the lease,
the provisions of this Addendum shall control.


TOYS INTERNATIONAL,                    SOUTH COAST PLAZA., a California
a California corporation               partnership

                                       By  C. J. Segerstrom & Sons,
                                          a California general partnership,
By                                        General Partner
              
Title      

By

By


<PAGE>



Title
By
Managing Partner



<PAGE>



     (c) The  following  is hereby  added at the end of Section  15.05(a) of the
lease form:

     "If  Tenant  identifies  one or  more  o:her  locations  of  Tenant  in any
     advertising or promotion pursuant to this Section,  so Iong as the Premises
     is identified with equal prominence (i.e., tone, position, color, typeface,
     typestyle,  etc.) to the  identiIication of eac:i such other location,  the
     amount  to  be  credited  against  Tenant's   advertising  and  promotional
     requirement  pursuant to this Section shall be  detenr|^|3ined on the basis
     of  the  relative  exposure  levels  of  each  location  pursuant  to  such
     advertising or promotional vehicle.  Such relative exposure levels shall be
     reasonably  determined  by Tenant based upon  circulation  figures or other
     objective criteria. By way of example of the foregoing, if an advertisement
     lists both the  Premises  and one other  store of Tenant  and the  criteria
     utilized by Tenant indicate an exposure level of the  advertisement  to 600
     customers  or potential  customers  at the  Premises  and 400  customers or
     potential  customers  of  Tenant's  other  store,  then  the  cost  of such
     advertiseroent shall be allocated 60% to the Premises and 40% to such other
     store. In the event,  however, that (i) the Premises are primarily featured
     in such advertising or promotion, the entire cost thereof shall be credited
     against  Tenant's  advertising and promotion  requirement  pursuant to this
     Section or (ii) the Premises are not  identified  with equal  prominence to
     the identif cation of the other  location(s)  of Tenant,  no portion of the
     cost of such  advertising or promotion shall be credited  against  Tenant's
     a;tvertising and promotion requirement pursuant to this Section."

Section 15.07 Catalog Advertising

     (a) Notwithstanding  anything to the contrary in Section 15.07 of the lease
form, Tenant shall be required to participate only in the Christmas catalog. The
cost to Tenant of such catalog  advertisement shall be credited against Tenant's
annual advertising and promotional  requirement pursuant to Section 15.05 of the
lease form.

     (b) The word  "Landlord"  appedring in the second full  sentence of Section
15.07 of the  lease  form is  hereby  amended  to read  "Landlord's  independent
professional  who prepares such  advertisements."  The rates charged for catalog
advertising shall be applied uniformly and in a  non-discriminatory  fashion. In
addition,  I,andlord and Tenant acknowledge that currently all advertisements in
the  catalogs  are  one  size - full  page  advertisements.  In the  event  that
L,andlord  hereafter provides such  advertisements in more than one size, Tenant
may choose the size of its advertisement in each such catalflg.

Section 16.01  Offset Statement

     Landlord shall at any time and from time to time upon not less than


<PAGE>



     twenty (20) days' prior written notice from Tenant execute, acknowledge and
deliver to Tenant a  statement  in  writing  (i)  certifying  that this lease is
unmodified and in full force and effect (or, if modified,  stating the nature of
such  modification  and certifying that this lease,  as so modified,  is in full
force and effect) and the dates to which the Minimum  Rent and  additional  rent
are  paid in  advance,  if any,  (ii)  acknowledging  that  there  are  not,  to
Landlord's knowledge, any uncured defaults on the part of Tenant hereunder, or



<PAGE>



     conclusive  upon  Landlord (A) that this lease is in full force and effect,
without  modification except as may be represented by Tenant, (B) that there are
no uncured defaults in Tenant's performance,  (C) that not more than one month's
Minimum Rent has been paid in advance and (D) that any other  statements of fact
regarding the lease included by Tenant in the statement are correct.

Section 16.02 Landlord's Right of Access

           The phrase "and,  upon  reasonable  prior  notice to Tenant,  for the
purpose of' is hereby  inserted in clause (a) of Section 16.02 of the lease form
immediately before the phrase  "monitoring,  improving and remedying."  Landlord
shall use reasonable  efforts to minimize  interference  with Tenant's  business
operations  during any entry into the  Premises  pursuant to this lease.  In the
event that any entry into the Premises by Iandlord,  occasioned  other than by a
default by Tenant  under the lease,  renders the  Premises  wholly or  partially
untenantable,  then the Minimum Rent and chr.rges  specified in the  Fundamental
I.ease  Provisions  shall abate  during the period of  interruption  of Tenant's
business in  proportion  to the degree to which  Tenant's use of tho Premises is
impaired.  Degree of  impairment  shall be  measured  in the manner  provided in
Addendum Section 12.03.

Section 16.04 Floor Area

            Landlord shali, promptly upon completion of Landlord's Work pursuant
to Addendum Section 17.01,  cause thP Premises to be remeasured  pursuant to the
second  paragraph  of Section  16.04 of the lease form.  A copy of the report or
measurement  prepared by  Landlord's  architect  shall be  delivere:l to each of
I,andlord and Tenant. In addition, Tenant's architect may be present during such
measurement  by  Landlord's  architec|^|.  However,  the  report  of  Landlord's
architect  shall be final and conclusive  upon Landlord and Tenant unless Tenant
reasonably  demonstrates  that either (a) such measurement of Floor Area was not
in accordance  with the  definition of "Floor Area" pursuant to Section 16.04 of
the lease form or (b) the  computations or calculations of Landlord's  architect
are incorrect.

Section 16.05 Deposit and Financial Statements

          The  provisions  of  Section  16.05 of the lease  form  shall  have no
application  with  respect to this  lease.  The  balance,  if any,  of  Tenant's
security  deposit  pursuant to the Old Lease shall be applied  against the first
monthly Minimum Rent payable by Tenant pursuant to this lease.

Section 16.06 Late Payment

     The maximum rate of interest which Landlord may charge  pursuant to Section
16.06 of the lease form,  or any other  provision  of this lease  which  permits
Landlord to charge the "maximum rate of interest  permitted by applicable  usury
law "


<PAGE>



                                                                  ,
shall not exceed the lesser of (a) a rate equal to the reference rate of Bank of
America (Los Angeles),  as then in effect and as the same may thereafter  change
from time to time,  plus two percent  (2%) or (b) the  maximum  rate of interest
which L,andlord is then permitted to charge by the applicable usury law.



<PAGE>



notifying party obtains a  contemporaneous  written receipt for such Notice from
an  authorized  or  ostensible  agent or employee of the other party.  Provided,
however,  that personal  service  shall not be required in  connection  with any
Notice served as a prerequisite to or to commence any unlawful detainer or other
legal  action  brought to enforce or in  connection  with this  lease.  Any such
notice,  including a notice  pursuant  to  Sections  13.01(b) or 13.01(c) of the
lease form,  shall be served by certified or  registered  mail,  return  receipt
requested, and shall be effective on the date of receipt or refusal indicated on
the return receipt, notwithstanding any statute or rule of law which specifies a
later  effective  date for such  seivice.  Moreover,  any statute or rule of Iaw
which extends the time for response or action by Tenant as the result of seivice
of a notice  other than by personal  service  shall not apply to notices  served
pursuant to this subsection  (a). Tenant waives the  requirements as to personal
service  contained in Section 1161 et se|^|g. of the Code of Civil Procedure and
of any  other  statute  or rule of law  which  requires  personal  service  as a
condition  to exercise by  Landlord  of any remedy  against  Tenant (but not the
requirement  that  such  notices  be  served,  in the  manner  descnbed  in this
Section). Nothing herein shall be deemed or construed to relieve Landlord of the
obligation to serve any notice upon Tenant;  rather,  the parties  instead agree
that any such notice shall be served upon Tenant at its  addresses for notice in
the  applicable  Fundamental  I.ease  Provision in the manner  permitted by this
subsection.

            (b) With respect to any notices  given to Tenant by mail,  copies of
such  notice  shall  be sent  to  Tenant  at both  addresses  set  forth  in the
applicable Fundamental Lease Provision.

Section 16.14 Recording

            Neither  party  hereto  shall  record  this lease or a "short  form"
memorandum of this lease without the prior written consent of the other.

Section 16.15 Advertising and Promotional Fund

             (a)  Notwithstanding  the  provisions  of  clause  (^n) of  Section
16.15(b) of the lease form,  Tenant's annual  contribution to the Fund after any
such  adjustment  shall not exceed one hundred  ten  percent  (110%) of Tenant's
annual  contribution  irnmediately  prior to such  adjustment.  The first annual
adjustment to Tenant's annual  contribution to the Fund shall not occur prior to
February 1,1995.

           (b) The  provisions of Section  16.15(c) of the lease form shall have
no application with respect to this lease.

Section 16.21 Non-Disclosure of Irase Terms

          In addition to the disclosures permitted by Section 16.21 of the lease
fonn,  either  party  may  disclose  the terms of this  lease to its  respective
attorneys, insurance brokers and agents, architects,  contractors, engineers and
consultants.


<PAGE>



Section 16.25 Relocation of Tenant

     Notwithstanding the provisions of Section 16.25 of the lease form any

     (b) A premises with rear service door access to a service  corridor leading
to a loading dock;

     (c) Located on the first level (i.e., the ground floor) of the Center; and

     (d) Have at least as many lineal feet of storefront as the Premises.

     In addition, with respect to any such relocation:

     (i) Landlord may not relocate Tenant more than once during the lease term.

     (ii)  Tenant  shall  not be  required  to lose  any  days of  operation  in
connection with such relocation.

     (iii) The effective date of the relocation  (i.e.,  the opening date of the
new store) shall not occur between  November 15 of any year and January 1 of the
following year.

     (iv) Landlord  shall be entitled to relocate  Tenant only to  accommodate a
major  remodeling of the Center or the addition of a major  department  store to
the Center.  Landlord  shall not relocate  Tenant to accomplish  the purpose set
forth in the first sentence of Section 16.25 of the lease form.

     (v) In the event that Tenant  elects to  terminate  this lease  rather than
being  relocated  pursuant  to  Section  16.25  of  the  lease  form,  as of the
termination date the then principal balance of the Total Costs shall be forgiven
and waived. Pending such termination, Tenant shall make all per7odic payments on
account  of Total  Costs and  interest  accrued  thereon  required  pursuant  to
Addendum Section 19.01.

     (vi)  Landlord  shall pay all out-of  pocket  costs  incurred  by Tenant in
connectinn with such relocation,  other than  compensation  payable by Tenant to
its employees.

Section 16.29 Tax Benefits

             Notwithstanding  the provisions of Section 16.29 of the lease form,
Tenant shall be entitled to the tax benefits attributable to all improvements to
the Premises the cost of which is included in Total  Costs.  Within  thirty (30)
days after  Landlord's  receipt of written  request from Tenant,  Landlord shall
furnish  to Tenant a written  list,  in  reasonable  detail,  setting  forth the
improvements described in this Section together with the costs thereof.

Section 17.01 Landlord's Work



<PAGE>



          Landlord  shall,  prior to delivery of  possession  of the Premises to
Tenant, coordinate (w) all abatement or removal of asbestos bearing materials in
the Premises,  (x) all  demolition  work required in the Premises,  (y) all work
which is the  responsibility  of Landlnrd  pursuant to Exhl'bit "C' and which is
required in the Premises, and (z) the



<PAGE>
     (a) Prior to or promptly  upon the  execution and delivery of this lease by
L.andlord and Tenant,  I,andlord shall retain Paul J. Ruffing (the "Architect"),
to complete a  preliminary  design of the Premises  (the  "Preliminary  Plans").
Approval of the Preliminary  Plans shall not be unreasonably  withheld and shall
be deemed given by a party if such party fails to disapprove the same by written
notice to the other party and the Architect  within five (5) business days after
receipt of the Preliminary Plans. Upon mutual approval of the Preliminary Plans,
Iandlord shall obtain from a tenant improvements contractor selected by Landlord
("I,andlord's  Contractor") a preliminary  estimate of the cost to construct the
TI Work (not including the costs of design of  L,andlord's  Work or the costs of
performing the balance of Landlord's Work) pursuant to the approved  Preliminary
Plans. In the event that the preliminary cost estimate of the TI Work,  together
with costs of the TI Work not included in the estimate (i.e.,  design and permit
costs for the TI Work) and the  relocation  cost  estimate  furnished  by Tenant
pursuant to Addendum  Section  2.44,  is  collectively  greater  than  $400,000,
I|^|andlord  shall cause the Architect to promptly revise the Preliminary  Plans
to reduce such  collective  cost to  $400,000  and shall  circulate  the revised
Preliminazy Plans to I,andlord and Tenant for approval.  Promptly upon obtaining
an approved set of Preliminary Plans with a collective  estimated cost of the TI
Work and the  relocation  costs of  $400,000 or less,  Landlord  shall cause the
Architect to prepare  working  drawings and  specifcations  (along with a finish
schedule)  (the "Final  Plans") with respect to  Landlord's  Work based upon the
Preliminary  Plans.  Promptly  upon  receipt by  Landlord  of such Final  Plans,
Landlord  shall  forward a copy to Tenant for  Tenant's  approval.  Tenant shall
approve or  disapprove  such Final Plans by written  notice to Landlord  and the
Architect  within five (5) business  days after  Tenant's  receipt of such Final
Plans, and failure to


<PAGE>



     disapprove by such written  notice within such five (5) business day period
shall be deemed approval of such Final Plans. Any such disapproval shall specify
the particular item or items so disapproved.  In no event, however, shall Tenant
disapprove  such Final  Plans to the extent  such Final  Plans  reflect  matters
previously approved by Tenant as shown in the approved Preliminary Plans.

     The  Preliminary  Plans shall  prominently  indicate  the Floor Area of the
Premises.  In the event  that the Floor  Area is more than  5,200  square  feet,
Tenant may,  by written  notice to Landlord  and the  Architect  within five (5)
business days after Tenant's receipt of the Preliminary Plans,  require that the
Premises be reduced to 5,200 square feet of Floor Area as a part of the revision
of such Preliminary Plans.

     (b) In the event that Tenant disapproves such Final Plans in the manner and
within the time set forth in  subsection  (a) above,  and Landlord  accepts such
changes,  Landlord shall cause the Architect to promptly revise such Final Plans
to meet  such  objections  and  shall  resubmit  the same to  Tenant  for  final
approval.  Tenant shall approve or disapprove the revised Final Plans by written
notice to I.andlord  and the  Architect  within  three (3)  business  days after
receipt of the same,  and failure to  disapprove  by such written  notice within
such three (3)  business  day period  shall be deemed  approval of such  revised
Final Plans.  Tenant shall not disapprove the revised Final Plans so long as the
Architect  has revised such Final Plans in accordance  with Tenant's  objections
pursuant to subpara|^|aph (a) above. The approved Final Plans resulting from the
foregoing approval process are herein referred to as the "Approved Final Plans."



<PAGE>



     the TI Work  from at least  three (3)  contractors  selected  by  Landlord.
I.andlord  shall furnish to Tenant a copy of each such bid or estimate  together
with a  statement  or  estimate  of all costs of the TI Work  (i.e.,  design and
permit costs) not included in any such bid or estimate and Landlord's statement,
in  reasonable  detail as to the amount,  if any, of such  aggregate  cost which
Tenant may be requested  to  reimburse  to  Landlord.  If the lowest such bid or
estimate for the TI Work, together with the costs of the TI Work not included in
such bid or estimate and the relocation  costs,  collectively  exceed  $400,000,
lLandlord and Tenant shall use  reasonable  efforts to reduce the aggregate cost
of the TI Work to an amount which, with the relocation cost, is equal to or less
than $400,000. To the extent that I.andlord and Tenant are unable to reduce such
aggregate  cost to $400,000,  L,andlord  may request  Tenant to pay for all such
excess over $400,000 by written  notice of its election to do so to Tenant prior
to  the  commencement  of  I,andlord's  Work.  In  addition,  if  Tenant  or any
governmental  authority requires any changes or additions to or modifications of
the TI Work which  increase  the cost  thereof  above the  aggregate  cost which
L.andlord is obligated to pay, Landlord may request Tenant to reimburse Landlord
for any such excess costs. Each reimbursement  requested from Tenant pursuant to
this  subsection  (i.e.,  those  resulting  from initial excess costs or changes
initiated by Tenant or any  governmental  authority)  shall, if Tenant agrees to
pay the same, be made by Tenant to Landlord,  as additional rent,  within thirty
(30) days after  Tenant's  receipt of  Iandlord's  invoice or statement for such
excess cost or cost  increase.  Any failure of Tenant to make any payment  which
Tenant agrees to pay pursuant to this subsection shall entitle  Landlord,  after
notice and failure to cure  pursuant to Section  13.01 of the lease form, to all
remedies  available  to Landlord on account of the failure of Tenant to make any
payment  of rent,  including  but not  limited  to those  remedies  set forth in
Section 13.02 of the lease forrm.  Moreover, if Tenant fails to make any payment
which Tenant  agrees to pay pursuant to this  subsection  within the period due,
Landlord may delay  commencement  of I,andlord's  Work or cease the same pending
receipt  of such  payment.  The  period  of any such  delay in  commencement  or
cessation,  plus any  additional  time  required for  Landlord's  contractor  to
commence or recommence  I.andlord's  Work,  shall, if Tenant's failure to pay is
the only cause of such delay, be a period of Tenant Delay pursuant to subsection
(e) below.  For the purposes of this  subsection,  the cost of the TI Work shall
include  all fees and costs paid by Landlord  to the  Architect  or to any space
planners or engineers in  connection  with the design of the TI Work,  all costs
and fees paid by  I,andlord  to obtain all  governmental  approvals  and permits
required in connection with the TI Work, all labor and material costs, all costs
of  purchase,  installation  and  construction  of the TI Work  and all  profit,
overhead and general  conditions  costs paid by Iandlord to its contractor  with
respect to the TI Work.

     In the  event  that  the  initial  aggregate  cost of the TI  Work  and the
relocation costs collectively  exceed $400,000,  and Landlord requests Tenant to
pay for such excess in the manner and within the time set forth  herein,  Tenant
shall have the a- option to decline to pay for such excess;  provided, if Tenant
so declines,  Landlord may elect to pay such excess at its sole cost and expense
and such excess shall not be included in the 'Total  Costs" to be paid by Tenant
in accordance with Addendum Section 19.01 below. If upon Tenant's refusal to pay
such excess, L,andlord also declines to pay for the


<PAGE>



     cost of the TI Work and relocation costs in excess of $400,000,  each party
shall have the option to terminate  this lease by giving  written  notice of its
election to do so to the other party. In such event,  this lease shall terminate
on the date of receipt by the other  party of such notice of  termination,  each
party  shall bear its own costs and fees  incurred  in the [section struck out]



<PAGE>



     subsection or Addendum  Sections  18.01 or 20.01,  Landlord  shall bear all
fees and costs paid by Landlord  to the  Architect  or to any space  planners or
engineers in connection with the design of L,andlord's Work.

     (d) The total  amount paid by Landlord  for the TI Work and the  relocation
costs,  but excluding any excess above $400,000 which Landlord elects to pay in
accordance with the immediately preceding paragraph, shall be referred to as the
'Total Costs."

     (e) As used herein,  the term 'Tenant  Delays" sha?1 mean all actual delays
in  commencement  or  completion  of  Landlord's  Work solely caused by Tenant ,
including but not limited to:

     (i) Any actual delay in the completion of  L,andlord's  Work resulting from
changes in Landlord's Work initiated by Tenant after approval of the Final Plans
therefor; and

     (ii) Any  failure  of  Tenant  to make any  payment  required  pursuant  to
subsection (c) above within the time therein specified for such payment.

            (f) If substantial  completion of Landlord's  Work is delayed by any
Tenant  Delays,  as  defined  above,  then the Rent  Commencement  Date shall be
advanced  (i.e.,  moved  earlier  in  time)  by a  number  of days  equal to the
aggregate  number of days of  Tenant  Delay.  For the  purposes  of this  lease,
"substantial  completion"  shall mean (i)  complete  to the extent  required  to
obtain a certihcate  of occupancy or  temporary  certificate  of occupancy  with
respect to the Premises and (^n) functionally complete.

          (g)  Promptly  upon  substantial  completion  of  I,andlord's  Work  ,
Landlord  shall  deliver  possession  of the  Premises  to Tenant as provided in
Addendum Section 2.02 above.

           (h) Promptly upon approval of the Approved Final Plans and completion
of the bidding and payment  allocation process pursuant to subsection (c) above,
L.andlord  shall  cause the  general  contractor  submitting  the  lowest bid to
construct  or install  Landlord's  Work in the Premises in  accordance  with the
Approved Final Plans and the following:

     (i) There shall be no changes or additions  to the Approved  Final Plans or
Iandlord's Work with respect thereto, without in each instance the prior written
approval of both parties hereto.

     (ii)   Landlord's   responsibilities   with   respect  to  the  design  and
construction of Landlord's Work shall include the  responsibility  to obtain all
governmental permits and approvals required in connection with Landlord's Work.



<PAGE>



     (iii)  Landlord  shall use  reasonable  efforts to  substantially  complete
Landlord's Work on or before September 7,1993.  Nothing herein,  however,  shall
require  Landlord to utilize any overtime or special  rate labor  unless  Tenant
agrees in writing to pay  pursuant  to  subsection  (c) above any portion of the
Total Costs, in excess of $400,000  resulting from such overtime or special rate
labor.



<PAGE>



     governmental  authorities  having  jurisdiction  of the  Premises,  and all
governmental approvals and permits obtained in connection with Landlord's Work.

     (i) The  only  furniture,  fixtures  and  equipment  ("FF&E")  included  in
Landlord's  Work shall be that provided for, if any, in the Approved Final Plans
and shall be  limited  to  fixtures  housing,  storing,  displaying  or  holding
merchandise.  Any other furniture,  fixtures or equipment required for Tenant to
operate  in the  Premises  shall be either  furniture,  fixtures  and  equipment
relocated by Tenant from the Old  Premises to the Premises  pursuant to Addendum
Section 2.04 or new furniture, fixtures and equipment installed by Tenant in the
Premises pursuant to Addendum Section 17.02 below.

     (j)  During  the  course of  construction,  Tenant  shall have the right to
reasonably  review  Landlord's  Work.  Such review right shall be exercised in a
manner which shall not  unreasonably  interfere with the course of  construction
but may be  exercised at such  intervals  as are  selected by Tenant,  including
daily if desired by Tenant.  Tenant may object to or  disapprove of any items of
landlord's  Work,  but only if the same fail to  conform to the  Approved  Final
Plans and such objection or disapproval is  communicated  to Landlord  within 72
hours following the first review or inspection by Tenant following  construction
or installation of the item as to which Tenant objects or disapproves.

     (k) Not less than  thirty  (30) days prior to the  anticipated  substantial
completion of Landlord's  Work,  Landlord  shall notify Tenant in writing of the
date upon which Landlord expects Landlord's Work to be substantially completed.

     Except as specifically  provided in this Addendum  Section 17.01,  Landlord
shall have no  obligation,  either as to  performance  or  payment of costs,  to
remodel or renovate  the Premises or any portion  thereof for Tenant's  use. All
work  required for Tenant's use of the Premises  shall,  except as  specifically
provided in this  Section,  be included  in Tenant's  Work  pursuant to Addendum
Section 17.02.

Sections 17.02 -17.04 Tenant's Work

     Any work in the Premises in addition to Landlord's Work  ('Tenant's  Work")
shall be the sole  responsibility of Tenant,  both as to performance and payment
of costs, and shall comply with the following:

     (a) Any  Tenant's  Work shall be subject to the prior  written  approval of
Landlord and shall conform to plans therefor  prepared by Tenant and approved by
Landlord.

     (b) Any Tenant's Work shall comply with all  applicable  provisions of this
lease,  including without limitation those contained in Sections  17.03(a),  (b)
and (c), if applicable,  and 17.04(c) and (d), if applicable, of the lease form,
and all applicable


<PAGE>



requirements of all governmental authorities having jurisdiction with respect to
the Premises. In addition, Tenant's Work shall be of a quality at least equal to
the quality of Landlord's Work.

     (c) There shall be no abatement of rent beyond the Rent



<PAGE>


     (d) Section 17.02 of the lease form shall have no application  with respect
to Tenant's Work.

     (e) The provisions of Sections  17.03(d) and 17.04(a),  (b), (e) and (f) of
the lease form shall have no application with respect to Tenant's Work.

     (f) Tenant shall commence Tenant's Work promptly following the Commencement
Date,  shall  diligently  pursue  Tenant's Work to completion and shall complete
Tenant's  Work  and  open  the  Premises  for  business  on or  before  the Rent
Commencement  Date.  No delay in  completion  of  Tenant's  Work shall  delay or
otherwise affect the Rent Commencement Date.

     (g) The plan  review fee  specified  in Section  17.03(d) of the lease form
shall be  required  only in  connection  with a  remodel  or  alteration  of the
Premises by Tenant (other than Tenant's Work) as to which Landlord's approval or
consent is required in connection with such remodel or alteration.

     (h) With respect to Landlord's  approval or  disapproval  of Tenant's Work,
Landlord's  approval  shall be deemed given unless  Landlord  shall,  by written
notice  within  ten (-10)  days after  Landlord's  receipt of a complete  set of
drawings and specifications, disapprove the same or any parts thereof.

     (i)  Notwithstanding  anything  to the  contrary  contained  in this lease,
Tenant  may  relocate  from  the Old  Premises  to the  Premises  some or all of
Tenant's fixtures in the Old Premises and reuse the same in the Premises.

Section 17.05 Construction Charges

     Notwithstandinganything  to the  contrary  contained  in this  lease  or in
Exhibits "C" and "E" hereto:

     (a)  Tenant  shall  not be  required  to pay  any  fee  for  hooking  up to
Landlord's  HVAC  system,  or any fees or other  charges to the local  purveyors
providing water, gas, electrical or customary telephone services to the Premises
during  construction  of Landlord's  Work. All such fees payable to Landlord are
waived by Landlord, and all


<PAGE>



     such fees  payable to a third party  shall be paid  directly by Landlord as
part of Landlord's Work hereunder and included in Total Costs.

     (b) Tenant shall not be required to pay to Landlord any charge for Tenant's
storefront barricade or for placement of Tenant's sign or logo thereon.

     (c) Except,  for Sections  II.B.1 (last  sentence) and II.D. of Exhibit "C'
and I.C., I.H., I.I., I.K., IV.F.3.(c),  V.C.2., V.C.3., V.C.4., V.D.l., V.D.2.,
V.D.3.  and V.D.4.  of Exhibit  "E,"  Exhibits  "C' and "E" hereto shall have no
application wit|^| respect to Tenant's Work.

Section 17.06 Directional Signage

     Landlord  shall,  at Landlord's  cost,  place  Tenant's name and relocation
information  on a sign  on or  near  the  construction  barricade  covering  the
storefront of the



<PAGE>



Section 18.01  Conditions to Effectiveness of Lease

     Landlord and Tenant acknowledge and agree that the continued  effectiveness
of this lease is conditioned  upon (i) vacation and surrender to Landlord by the
tenant of the On The Go Travel  store  (space  number  1012) in the Center on or
before May 28,1993, (^n) vacation and surrender to Landlord by the tenant of the
Bergstrom store (space number 1030) in the Center on or before May 15, 1993 and,
(^ni)  Landlord's  ability to enter into an  agreement  on or before May 10,1993
with the tenant of the  Benetton  store  (the  "Existing  Tenant")  on terms and
conditions  mutually  satisfactory  to Landlord and Existing  Tenant  providing,
among other  things,  for Existing  Tenant to surrender  and vacate the premises
currently occupied by Existing Tenant on or about June 1,1993 and the relocation
of its business to another space in the Center.

     Landlord shall promptly notify Tenant when each of the conditions set forth
herein has been satisfied.  Landlord shall use reasonable  efforts to cause each
of the conditions herein to be satisfied.  If the condition  expressed in clause
(^ni)  above has not been  satisfied  by May  10,1993,  Landlord  shall have the
option to terminate this lease by giving written notice of its election to do so
to Tenant.  In such event,  this lease shall  terminate  on the date of Tenant's
receipt of Landlord's notice of termination, each party shall bear its own costs
and fees  incurred  in the  negotiation  and  preparation  of this  lease and in
performing  its  respective  obligations  hereunder  through  the  date  of such
termination,  the Old Lease  shall  remain in full force and effect  through the
term thereof,  and neither party shall have any further  obligation to the other
under this lease.  Pending any such  termination,  each party shall  perform its
respective  obligations  pursuant  to this  lease.  In the event that all of the
conditions  herein are not satisfied by June 1,1993,  and provided that Landlord
has not  terminated  this  lease in the  manner and  within|^|  the time  herein
specified,  each date for action hereunder by Landlord shall be delayed on a day
for day basis until satisfaction of the last of the conditions herein.

Section 19.01 Total Costs

     As additional rent due hereunder from Tenant to Landlord,  Tenant shall pay
to  Landlord  an amount  equal to the Total  Costs (as that term is  defined  in
Addendum Section 17.01 above) together with interest thereon as follows:

     (a)  Interest  shall  accrue  from  the  Commencement  Date  on the  unpaid
principal  balance of the Total  Costs until paid in full at a rate equal to the
reference  rate of  Bank  of  America  (Los  Angeles)  plus  one  percent  (1%).
Initially,  such  reference rate shall be the reference rate in effect as of the
Rent Commencement Date. Thereafter, the interest rate payable by Tenant shall be
adjusted as of each  anniversary of the Rent  Commencement  Date by reference to
such  reference  rate as in  effect  as of such  anniversary  date and each such
adjustment shall be effective until the next succeeding  anniversary of the Rent
Commencement  Date.  Subject to  subsection  (f) below,  in no event  shall such
interest  rate ever  exceed ten  percent  (10%) per annum,  notwithstanding  any
adjustments  otherwise  required  pursuant to the provisions of this  subsection
(a).


<PAGE>



     (b) Additional rent shall be payable under this Addendum Section in monthly
installments  in accordance  with an  amortization  schedule to be calculated in
accordance With the provisions of this subsection  [Section struck out]



<PAGE>



to subsection (a) above.  As and when necessary due to changes in the applicable
interest rate,  L,andlord shall modify the original  amortization table supplied
to Tenant and shall furnish to Tenant copies of such modifications.  Payments by
Tenant pursuant to this subsection (and the  amortization  table to be developed
by L,andlord) shall be as follows:

                (i) Tenant  shall  make  monthly  additional  rent  payments  to
Landlord on account of the Total Costs.  The fust such  payment  shall be due on
the first day of the first calendar month following the Rent Commencement  Date,
and  subsequent  payments  shall  be due on the  first  day of each of the  next
succeeding 119 calendar months.

                (ii)  Through  July  1997,  monthly  payments  shall be equal to
accrued and unpaid interest on the Total Costs.

                  (iii) The  payment  due  August  1,1997  shall be in an amount
equal to  accrued  and unpaid  interest  on the Total  Costs plus the  aggregate
deferred principal  amortization through July 1997. For this purpose,  aggregate
deferred  principal  amortization  shall equal that amount of  principal  of the
Total Costs which would have been paid by Tenant  through  July 1997 if Tenant's
monthly  additional  rent payment  obligation  pursuant to this Section had been
structured to provide for 120 equal monthly  payments of principal  plus accrued
interest thereon. .

                (iv) The monthly  payments due September  1,1997 and  thereafter
shall each be in an amount equal to the remaining  principal amount of the Total
Costs (after giving effect to the payment  provided for in clause (^ni)) divided
by the number of remaining  monthly payments  pursuant to this subsection,  plus
accrued and unpaid interest at the rate determined,  from time to time, pursuant
to subsection (a) above.

           (c) Tenant may,  at any time and from time to time,  pay an amount to
Landlord  on account of the  additional  rent due under  this  Addendum  Section
19.01, in addition to the monthly installments called for in the then applicable
amortization schedule, provided such additional payment is $1,000 or more.

          (d) Each  payment  pursuant to  paragraphs  (b) and (c) above shall be
applied  first to the payment of accrued and unpaid  interest and the balance to
the principal of the Total Costs.

           (e) Notwithstanding  anything to the contrary herein, the entire then
unpaid  balance of the Total Costs and all accrued and unpaid  interest  thereon
shall  be due  and  payable  in full  (subject  to the  limitations  hereinafter
provided) upon the first to occur of:

     (i) Any early  termination  of this lease  pursuant  to the  provisions  of
Articles IX, XI or XIII of the lease form.  Upon any  termination  of this lease
pursuant


<PAGE>

to any such  article,  Landlord  shall have the right to seek  recovery  of such
unpaid  balance  and accrued  interest  against any  insurance  or  condemnation
proceeds  payable to Tenant,  and Tenant  hereby  assigns  its  interest in such
proceeds to  Landlord up to the full amount of such  proceeds or the then unpaid
balance of the Total Costs and all accrued interest



<PAGE>



and in the  amount  required  by  Section  8.02 of the lease form with a carrier
meeting the requirements of Section 8.04 of the lease form,  Landlord's recovery
on account of Total  Costs and  accrued  and unpaid  interest  thereon  shall be
limited to the insurance  proceeds,  if any,  payable to L.andlord on account of
such casualty pursuant to Addendum Section 8.02(c). Except as to recovery out of
such condemnation  proceeds or such insurance  proceeds,  I,andlord shall not be
entitled to seek recovery of the Total Costs or accrued interest thereon against
Tenant  or  Guarantors  in the  event of a  termination  of this  lease due to a
casualty or condemnation.

                (^n) An  assignment  of  Tenant's  interest  in this  lease or a
subletting of all or substantially  all of the Premises by Tenant,  other than a
transaction as to which Landlord's  consent is not required pursuant to Addendum
Section 10.01(b).  Notwithstanding anything to the contrary herein, Iandlord may
require payment in full of the then entire unpaid balance of the Total Costs and
all  accrued  and unpaid  interest  thereon  as a  condition  to any  consent by
I,andlord to an assignment or subletting.

In the event of a  termination  of this lease  pursuant to any provision of this
lease other than Articles IX, XI or XIII,  such  termination  shall,  unless the
provision setting forth such termination is to the contrary,  operate to relieve
Tenant  and  Guarantors  of  all  obligations   hereunder   subsequent  to  such
termination to pay Total Costs. Nothing herein, however, shall relieve Tenant or
Guarantors  of any payment  obligations  on account of Total  Costs  accrued and
unpaid prior to such termination.

          (f) Failure of Tenant to pay any amount due pursuant to subsection (b)
above  when due  shall be deemed a default  pursuant  to this  lease to the same
extent as other additional rent due pursuant to this lease. In such event,  such
unpaid  amount  (but not the  accrued and unpaid  interest  thereon)  shall bear
interest at a rate equal to the  reference  rate of Bank of America in effect at
the date of the default plus two percent (2%) from the date such payment was due
and not paid until payment of such amount in full. In no event,  however,  shall
such interest rate ever exceed eleven  percent (11%) per annum,  notwithstanding
any adjustments otherwise required pursuant to the provisions of this subsection
(f).  Upon the giving of the notice  required  in section  13.01(b) of the lease
form and failure of Tenant to pay such unpaid amount  within the time  provided,
the entire  then  unpaid  balance of the Total  Costs and all accrued and unpaid
interest  thereon  shall be due and  payable  in full and the  unpaid  principal
balance  shall bear interest at the rate  provided in this  subsection  from the
date of  acceleration  until  payment in full.  Upon the  occurrence of any such
default and  acceleration  pursuant to this  subsection  (f),  Iandlord shall be
entitled  to all  remedies  against a  defaulting  tenant  pursuant to a written
lease,  including  but not  limited to those  provided  in  Article  XIII of the
printed form.

          (g) Until such time as Tenant pays all principal and accrued  intPrest
required  pursuant to this Addendum  Section 19.01,  Tenant shall not, and shall
not cause or permit any parent,  affiliate or  subsidiary of Tenant to open more
than one (1)  other  retail  store,  with the  exception  of that  certain  Toys
International store to be located at


<PAGE>



the Santa Monica Place Mall in Santa Monica,  California. The provisions of this
subsection  shall not apply to a replacement  (whether or not in the same center
and  whether  or not  within  the same  geographical  area) of any store lost or
closed  by  Tenant [section struck out]



<PAGE>

Section 20.01  Guarantor of Tenant's Obligations

             Tenant  acknowledges that a material  consideration to Landlord for
its  execution  and delivery of this lease is the  execution and delivery by Mr.
Gayle Hoepner and Ms. Constance R. Hoepner ("Guarantors"), of a written guaranty
of Tenant's  obligations  pursuant to this lease.  Accordingly,  within ten (10)
days after  Tenant's  execution  and delivery of this lease to Landlord,  Tenant
shall deliver to Landlord a written  guaranty  executed by Guarantors and in the
form of Exhibit "I" attached hereto (the "Guaranty").

            In the event that Tenant  fails to deliver  such  executed  Guaranty
within the time  specified in this  Section,  Landlord  shall have the option to
terminate  this lease.  Such option  shall be  exercised,  if at all, by written
notice to Tenant  given at any time  after the  expiration  of such ten (10) day
period and prior to the delivery of such  executed  Guaranty.  In the event that
Landlord is entitled to exercise  such option and timely and  properly  does so,
this lease shall terminate on the date of Tenant's receipt of Landlord's notice,
Tenant shall  promptly  surrender  possession of the Premises to Landlord,  each
party shall bear its respective  costs and fees incurred in the  negotiation and
preparation of this lease and in performing its respective obligations hereunder
through the date of termination  and neither party shall have any further rights
or  obligations  with respect to the other  pursuant to this lease.  Pending the
delivery  of such  executed  Guaranty,  each of the  parties  shall  perform its
respective  obligations  hereunder.  In the event of a termination of this lease
pursuant to this  Section  20.01,  the Old Lease shall  remain in full force and
effect through the term thereof.

Section 21.01  Interpretation

           This  Addendum is attached to and forms a part of a certain  lease of
even date between Landlord and Tenant. In the event of any inconsistency between
the  provisions  of this  Addendum  and any other  provision  of the lease,  the
provisions of this Addendum shall control.


TOYS INTERNATIONAL,                    SOUTH COAST PLAZA., a California
a California corporation               partnership

                                       By  C. J. Segerstrom & Sons,
                                          a California general partnership,
By                                        General Partner
              
Title

By

By


<PAGE>



Title
By
Managing Partner



<PAGE>




<PAGE>