Document:

COMMISSIONER OF PUBLIC LANDS
                          NEW MEXICO STATE LAND OFFICE
                               STATE OF NEW MEXICO

                                 BUSINESS LEASE

                                                                LEASE NO. BL-514

         THIS LEASE,  dated  October 1, 1996,  is made and  entered  into by and
between the Commissioner of Public Lands,  hereinafter  referred to as "Lessor",
and BOWLIN'S  INCORPORATED,  136 LOUISIANA,  NE, ALBUQUERQUE,  NEW MEXICO 87108,
hereinafter referred to as "Lessee".

          Lessor and Lessee agree and covenant as follows:

               1. LEASE.  For and in  consideration of and subject to the terms,
          conditions, covenants and reservations contained herein, Lessor leases
          to Lessee the following described tract of land,  hereinafter referred
          to as the "leased premises":

          A certain  15.08+/- acre tract of land, being a part of the NW1/4SW1/4
          of section 36,  Township  23 South,  Range 2 West,  N.M.P.M.,  located
          northeast of a highway interchange, about 13 miles west of Las Cruces,
          Dona Ana County,  New Mexico and being more particularly  described as
          follows:  Beginning  at an iron rod at the  southwest  corner  of this
          tract,  a point in the west line of Sec. 36, T23S,  R2W, NMPM, a point
          in the north R/W of the north frontage road of Interstate #10 Highway,
          whence the west 1/4 corner of said Sec. 36 bears  N0(degree)28'E,  399
          feet and a R/W rail marked 528 + 00 bears N65(degree)27'W, 41.96 feet;
          thence along the west line of said Sec. 36, N0(degree)28'E at 399 feet
          said 1/4 corner  with brass cap and at 602.65  feet an iron rod at the
          norhtwest corner of this tract; thence  N89(degree)49'E . 1566.38 feet
          to an  iron  rod  at  the  northeast  corner  of  this  tract;  thence
          S0(degree)28'W,  250 feet to a R/W rail 19 + 33.4;  thence  along  the
          north R/W of the north  frontage of  Interstate  #10 Highway  with the
          following courses and distances:

          1.   Southwesterly along a curve to the left (R=791.3';  = 46(degree);
               D =7.241(degree); L.C. bears S80(degree)28'W,  618.52 feet) 635.3
               feet to R/W rail 13 + 58.4
          2.   S57(degree)36'W, 293.31 feet to R/W rail 533 + 12.16
          3.   S82(degree)10'W, 67.11 feet to R/W rail 032 + 75
          4.   S82(degree)12'W, 650.98 feet to the point of beginning.

The rights granted herein are subject to all valid existing rights in the leased
premises.

               2. RESERVATIONS.  Lessor reserves the right to execute leases for
          the exploration,  development and production of geothermal  resources,
          oil and gas,  sand,  gravel,  coal,  shale,  clay,  building  stone or
          materials,  potassium,  sodium, phosphorus, salt or any other minerals
          or deposits of  whatsoever  kind  located in, under or upon the leased
          premises  and all rights of  access,  ingress  and  egress  through or
          across the leased  premises  that are  necessary or convenient to such
          exploration,  development or production.  Lessor further  reserves the
          right to grant  rights-of-way  and easements over, upon, or across the
          leased premises for public highways,  railroads,  tramways, telephone,
          telegraph and power lines,  irrigation  works,  sewer lines,  drainage
          ditches, mining, logging, and for other purposes.

               3. TERM.  The term of this lease  shall begin on the date of this
          lease and end at midnight on September 30, 2001,  unless terminated or
          cancelled  earlier as herein provided.  Nothing contained herein shall
          limit the right of Lessor to sell the leased premises during the lease
          term.

               4.  RENT.  Lessee  shall  pay to  Lessor  as rent for the  leased
          premises  and  for  the  rights  and  privileges   granted   hereunder
          $5,000.00, first year; $6,000.00,  second year; $8,000.00, third year;
          $10,000,00, fourth year and $12,000.00, fifth year, due and payable in
          advance on or before the 1st day of October  each year during the term
          of this  lease.  Time is of the  essence  in the  performance  of this
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          agreement.  Interest on delinquent rent payments shall accrue from the
          date the payment becomes due at the rate of one percent a month or any
          fraction of a month.

               5.  PERMITTED USE.  Lessee shall use the leased  premises for the
          sole and exclusive  purpose of a Trading Post (commercial  operation).
          No other uses shall be permitted.

               6. IMPROVEMENTS.  Lessee may place the following  improvements on
          the leased premises:

Trading Post building
well and storage tank
gasoline sales facility
Indian Hogan
Paving site preparation
Utilities & lights
signs, fences, miscellaneous
store manager's quarters (unauthorized, removable)
employee quarters (unauthorized, removable)

No other  improvements  shall be placed on the leased premises without the prior
amendment  of this  lease  pursuant  to  Paragraph  18  hereof  to  permit  such
improvement placement. Lessee shall maintain and protect from waste and trespass
all improvements placed on the leased premises.  In the event improvements other
than those  authorized  herein are  placed on the  leased  premises,  Lessor may
either  declare  title  to  such  improvements  in  Lessor  without  payment  of
compensation to Lessee or Lessor may order the removal of such  improvements and
the restoration of the leased premises to their condition  existing prior to the
placement of said  improvements  at Lessee's  expense.  The foregoing  rights of
Lessor  shall be  cumulative  to  Lessor's  right to cancel this lease as herein
provided.

               7. LIEN.  To secure the payment of any rent  amount that  becomes
          due,  and to  satisfy  all  reasonable  costs  incurred  by  Lessor in
          recovering said rent amount,  Lessor shall have a first and prior lien
          on any and all  improvements,  fixtures  and  equipment  placed on the
          leased premises.

               8. IMPROVEMENT  REMOVAL AND RECLAMATION.  Upon  relinquishment or
          termination of this lease without re-lease to Lessee, or upon Lessor's
          cancellation of this lease as provided herein, Lessee shall remove all
          improvements  placed  on the  leased  premises  pursuant  to the terms
          hereof  and shall  restore  the  leased  premises  to their  condition
          existing  prior  to the  placement  of  said  improvements;  provided,
          however,  if any rent  amount  is due and  unpaid at the time of lease
          cancellation  or  termination,  Lessee shall remove  improvements  and
          restore the leased  premises as herein  provided only at such time, in
          such manner and under such conditions as Lessor may in writing demand.

               9.  RELINQUISHMENT.  Lessee,  if not in default under this lease,
          may at any time  relinquish  the lease to Lessor  and be  relieved  of
          further  obligations  under  the  lease,   provided,   however,   such
          relinquishment  shall  not be valid or  effective  until  approved  in
          writing by Lessor.  Relinquishment  shall be made on a form prescribed
          by Lessor and shall be accompanied by the required relinquishment fee.
          Upon relinquishment  Lessee shall not be entitled to the refund of any
          rent previously paid.

               10.  ASSIGNMENT.  Lessee  shall not assign this  lease,  any part
          thereof,  or assign any  improvements  located on the leased  premises
          without the prior  amendment  of this lease  pursuant to  Paragraph 18
          hereof to permit such assignment.  Any lease assignment  without lease
          amendment  shall be null and void.  Lessor  may  condition  such lease
          amendment upon an increase in the rent amount and the  modification or
          addition of other lease provisions.

               11.  SUBLEASE.  Lessee  shall not  sublease  the  rights  granted
          hereunder, any part thereof, any portion of the leased premises or any
          improvements   located  on  the  leased  premises  without  the  prior
          amendment of this lease pursuant to Paragraph 18 hereof to permit such
          sublease. Any sublease without lease amendment shall be null and void.
          Lessor may condition such lease amendment upon an increase in the rent

                                       2
<PAGE>
          amount and the modification or addition of other lease  provisions.  A
          sublease is hereby defined as any  transaction or arrangement  whereby
          Lessee grants to another or shares with another  rights,  interests or
          privileges conveyed to Lessee by this lease.

               12. DEFAULT AND CANCELLATION.  Upon Lessee's  violation of any of
          the term,  conditions  or covenants  contained  herein,  including the
          failure to pay the rent when due,  Lessor may cancel  this lease after
          providing Lessee thirty days notice of the default by registered mail.
          The mailing of such notice as herein provided shall constitute  notice
          of Lessor's  intention  to cancel the lease and no proof of receipt of
          such  notice  shall be  necessary  in order for Lessor to enter  lease
          cancellation thirty days after the mailing of the notice if Lessee has
          not cured the default to Lessor's  satisfaction within said thirty day
          period.  Lessee  agrees  that if a  court  of  competent  jurisdiction
          determines,  that Lessee has breached any of the terms,  conditions or
          covenants of this lease, Lessee shall pay the costs incurred by Lessor
          in litigating the default, including reasonable attorney fees.

               13. WAIVER.  No employee or agent of Lessor has the power,  right
          or authority to orally waive any of the terms, conditions or covenants
          hereof  and no waiver by Lessor  of any of the  terms,  conditions  or
          covenants  hereof shall be effective unless in writing and executed by
          Lessor.  Lessor's  waiver of Lessee's  breach or default of any of the
          terms,  conditions  or  covenants  hereof shall not  constitute  or be
          construed as a waiver of any other or subsequent  breach or default by
          Lessee. The failure of Lessor to enforce at any time any of the terms,
          conditions  or  covenants  hereof or to  exercise  any  option  herein
          provided,  or to require at any time  performance  by Lessee of any of
          the terms, conditions,  or covenants hereof shall not constitute or be
          construed to be a waiver of such terms, conditions,  or covenants, nor
          shall it affect the  validity  of this lease or any part  thereof,  or
          Lessor's  right to  thereafter  enforce  each  and  every  such  term,
          condition and covenant.

               14.  COMPLIANCE  WITH LAWS.  Lessee  shall fully  comply with all
          laws, regulations,  rules, ordinances and requirements,  applicable to
          the leased  premises  or to  Lessee's  operations  thereon,  including
          Section  19-6-5,  NMSA 1978,  requiring  Lessee to protect  the leased
          premises  from waste and  trespass,  all current New Mexico State Land
          Office  Rules  and   Regulations  and  those  that  may  be  hereafter
          promulgated.

               15. WAIVER, RELEASE AND PROTECTION OF THE LEASED PREMISES. Lessee
          is leasing the leased  premises  based on Lessee's own  inspection and
          investigation of and judgment  regarding the leased  premises.  Lessor
          makes no  warranties  or  representations  of any kind or nature  with
          regard to the leased premises or with regard to this transaction.

         Lessee  agrees  to comply  with all  federal,  state  and  local  laws,
regulations  and policy,  including  but not limited to  measures  addressed  to
environmental protection, which have been or may be enacted or promulgated. Such
governmental  agencies shall not be deemed third party  beneficiaries under this
lease. Lessee's compliance with all laws, regulations and policy shall be at its
own expense.

          If accidental  discharge,  release,  spill, or fire or any other event
having  environmental  consequence  occurs,  Lessee agrees to provide  notice to
Lessor at the same time and in the same  manner as Lessee is required to provide
to the  federal,  state or local  agency  having  responsibility  for  enforcing
compliance with environmental laws,  regulations and policy. Lessee agrees that,
upon request by Lessor, Lessor shall have access to all reports, documents, test
data and all other materials  provided by Lessee to or received by Lessee from a
governmental  agency  having   responsibility  for  enforcing   compliance  with
environmental or other laws.

          In the  event  Lessor is  required  to incur  any cost or  expense  to
enforce the provisions of this lease,  including but not limited to consultants,
engineers,  soil, air or water sampling and  attorneys'  fees and costs,  Lessee
shall be liable for and reimburse Commissioner for said costs and expenses.

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<PAGE>
               16.   INDEMNIFICATION  AND  HOLD  HARMLESS.   Lessee  shall  hold
          harmless,  indemnify  and defend the State of New  Mexico,  Lessor and
          Lessor's  employees,  agents, and contractors,  in both their official
          and  individual  capacities,  from  any and all  liabilities,  claims,
          losses, damages, or expenses,  including but not limited to reasonable
          attorneys' fees, loss of land value, third party claims,  penalties or
          removal,  remedial or  restoration  costs  arising out of,  alleged to
          arise out of or indirectly  connected with a) the operations hereunder
          of Lessee or Lessee's employees,  agents,  contractors or invitees, b)
          the activities of third parties on the leased  premises,  whether with
          or without  Lessee's  knowledge  or  consent.  This  provision,  Lease
          Paragraph  16,  shall  survive  the   termination,   cancellation   or
          relinquishment  of this  Lease,  and any  cause of action of Lessor to
          enforce this  provision  shall not be deemed to accrue until  Lessor's
          actual discovery of said liability, claim, loss, damage, or expense.

               17.  SCOPE  OF  AGREEMENT.   This  lease   incorporates  all  the
          agreements,  covenants and  understandings  between  Lessor and Lessee
          concerning  the  subject  matter  hereof  and  all  such   agreements,
          covenants and  understandings  are merged into this written lease.  No
          prior  agreement or  understanding  between Lessor and Lessee shall be
          valid or enforceable unless expressly embodied in this lease.

               18.  AMENDMENT.  This  lease  shall not be  altered,  changed  or
          amended except by an instrument executed by both Lessor and Lessee.

               19.  APPLICABLE  LAW. This lease shall be governed by the laws of
          the State of New Mexico.

               20. SUCCESSORS IN INTEREST.  All terms,  conditions and covenants
          of this lease and all amendments  thereto shall extend to and bind the
          heirs, successors and assigns of Lessee and Lessor.

               21. RE-LEASE. At the expiration of the term of this lease, Lessee
          may re-lease the leased  premises  provided  Lessor has  determined to
          offer  the  leased  premises  for the same uses as  permitted  herein,
          Lessee is not in default under this lease,  Lessee agrees to the terms
          offered by Lessor,  and  Lessee  has  bettered  any offer to lease the
          leased premises made by a third party.

               22. HOLDING OVER. If Lessee enters upon the leased premises after
          the  termination or  cancellation  of this lease for any purpose,  the
          rent due Lessor for such  entry  shall be $200.00  for each day or any
          part of a day.  Nothing  contained  herein  shall be  construed as the
          grant to  Lessee of the right to enter  the  leased  premises  for any
          purpose after the  termination or  cancellation  of this lease without
          the prior written consent of Lessor.

          Executed in duplicate.

---------------------------------------
LESSEE

                                        ----------------------------------------
                                        RAY POWELL, M.S., D.V.M.
                                        COMMISSIONER OF PUBLIC LANDS

                                       4
<PAGE>
                  FOR A CORPORATION OR INCORPORATED ASSOCIATION

State of  New Mexico)

County of Dona Ana)

         The foregoing  instrument was  acknowledged  before me this 18th day of
November,  1996 by C.C.  Bess,  Executive  Vice  President  of Bowlin's  Inc., a
_________________________ corporation, on behalf of the corporation.

                                        ----------------------------------------
                                        Notary Public

My commission expires:

---------------------COMMERCIAL LEASE NO. 03-821

                          ARIZONA STATE LAND DEPARTMENT

         THIS  COMMERCIAL  LEASE is  entered  into by and  between  the State of
Arizona as "Lessor" by and through the Arizona State Land Department and BOWLINS
INC., New Mexico  corporation as "Lessee"..  In  consideration of the payment of
rent and the  performance  by the  parties of each of the  provisions  set forth
herein, and intending to be legally bound, the parties agree as follows:

                                     PARCEL

     AGREEMENT. Lessor hereby leases to Lessee for the term, at the rent, and in
accordance  with the  provisions  set forth  herein,  the  Parcel  described  in
Appendix "A" attached hereto (the "Parcel") for the uses and purposes  specified
below, subject to the provisions of Article 4 (Use of Premises).

     USE.  The Parcel  shall be used solely and  exclusively  for a  convenience
store,  gift shop, gas station with above ground fuel store tanks,  Recreational
Vehicle  Park (RV Park)  and  employee  housing  (consisting  of one (1)  mobile
modular unit).

     PARCEL  LEASED "AS IS"..  Lessee makes use of the Parcel "as is" and Lessor
makes no express or  implied  warranties  as to the  physical  condition  of the
Parcel.

     DEFINITION.   "Premises"   means  the  Parcel   together  with  all  rights
appurtenant  thereto  expressly granted by this Lease,  including  Improvements,
Removable  Improvements,  and personal  property  located on, below or above the
Parcel.

     DEFINITION.  "Rent" means Annual Rent,  base rent,  percentage  rent or any
combination  thereof,  including  any and all  payments  required  of  Lessee to
Lessor.

                                      TERM

     COMMENCEMENT; EXPIRATION. The term of this Lease commences on September 21,
1996, and ends on September 20, 2006, unless  terminated  earlier as provided in
this Lease.

                                      RENT

     ANNUAL RENT. Lessee shall pay rent to Lessor,  without notice or demand, on
or  before  the  commencement  date of this  Lease,  and each  year  thereafter,
annually in advance,  on or before the anniversary of the commencement date, for
the use and  occupancy  of the  Parcel  during the term of this  Lease,  without
offset or deduction except as provided hereafter.  Lessee agrees to pay rent for
this Lease due and payable as follows:

     Base Rent for the First  Lease  Year  shall be  $10,000.  Base Rent for the
     Second  Lease Year  shall be  $12,000.  Base Rent for the Third  Lease Year
     shall be $14,000.  Base Rent for Lease  Years four  through Ten shall equal
     the Base Rent for Lease Year Three as adjusted  pursuant to  paragraph  3.4
     and paragraph 3.5.

     PERCENTAGE RENT.  Lessee shall pay as Annual Rental 2.5% of Gross Receipts,
except fuel sales and R.V. Park Gross  Receipts  commencing on Lease Year three.
Lessee  shall pay one quarter of one cent  (.0025) per gallon of all fuel sales,
Lessee  shall pay 10% of all R.V.  Park Gross  Receipts  for Lease  Years  three
through ten.

     BASE RENT VERSUS PERCENTAGE  RENT..  Lessee shall pay the Base Rent defined
in paragraph 3.1 or the Percentage  Rent defined in paragraph 3.2,  whichever is
greater.

     ADJUSTED  BASE RENT.  Base Rent for Lease  Years four  through ten shall be
adjusted each year by the Consumer  Price Index,  but in no event shall the Base
Rent ever be less than the Rent for the previous Lease Year.

     ADDITIONAL  RENT  APPLICABLE TO UNFORESEEN  DEVELOPMENT.  Lessee intends to
expend   $100,000  (in  addition  to  existing   improvements)   for  additional
Improvements (as defined in Article (6) on the Parcel.  Lessor is concerned that
if Lessee intensifies Lessee's use of the Parcel beyond the present expectations
of the Lessor  and  Lessee,  the rent  described  in  Article 3 hereof  will not
reflect  such  unforeseen  expansion or  intensification  of Lessee's use of the
Parcel.  Therefore,  Lessee  agrees that Lessee shall pay to Lessor  annually as
additional rent an amount equal to ten percent (10%) of the sum of the amount in
excess of said $100,000 which Lessee so invests.  Such  additional rent shall be
payable in the year in which  completed,  within 30 days of  completion on a pro
rata basis,  and shall be added to base rent each year  thereafter.  The date of
completion of the additional  Improvements shall be the date on which the Lessee
is issued a Certificate of Occupancy from the appropriate  Governmental  Agency,
<PAGE>
or upon final inspection from the appropriate  Governmental Entity. Lessee shall
notify  Lessor of the actual  cost of such excess  structures  within 30 days of
their  completion  and provide to Lessor such evidence as Lessor may  reasonably
require to verify such costs. Subject to Article 6 herein.

     CPI. "CPI" shall mean the Revised  Consumer Price Index,  U.S. City Average
for all Urban  Consumers--All  Items  (1982-1984  equals 100) for the  pertinent
month, issued by the Bureau of Labor Statistics of the U.S. Department of Labor.
If the CPI shall hereafter be converted to a different  standard  reference base
or otherwise revised,  adjustments of rent based upon the CPI shall be made with
the use of such  conversion  factor,  formula or table for converting the CPI as
may be published by the Bureau of Labor Statistics,  or if said Bureau shall not
publish the same, then with the use of such conversion factor,  formula or table
as  may  be  published  by  any  nationally   recognized  publisher  of  similar
statistical information.  If the CPI shall cease to be published, there shall be
substituted therefore such index as Lessor selects as a reasonable substitute.

     ANNUAL PERMITTED CPI ADJUSTMENT.. The Annual Permitted CPI Adjustment shall
be the actual percentage increase in the CPI for the preceding twelve (12) month
period.

     GROSS RECEIPTS.  "Gross  Receipts" shall mean the selling and leasing price
of all goods,  wares and  merchandise and receipts of all  transactions  and the
charges for all services  performed  at,  within or from any part of the demised
Parcel,  including all  departments and  concessions  therein and  subtenancies,
where  permitted,  pursuant to the  provisions of this Lease,  no matter by whom
operated,  for cash or on credit,  whether  payment is actually made or not, the
risk of such payment being assumed by Lessee. Concessionaires,  demonstrators or
vending  machines,  including those owned by others,  operating upon the demised
Parcel shall be included within Gross Receipts.

     ANNUAL  STATEMENT & Percentage Rent Payment.  On or before each anniversary
of the commencement date of this Lease,  simultaneously  with the payment of the
base  rent,  Lessee  shall  deliver  to Lessor a  statement  signed by Lessor or
certified by a Certified Public Accountant,  setting forth Gross Receipts during
the preceding twelve (12) months,  hereinafter known as the "Reporting  Period,"
ending  September 20. The annual  statement  shall be  accompanied by payment of
percentage rent, if any, due for the Reporting Period. Within sixty (60) days of
the date of expiration, cancellation, or termination of this Lease, Lessee shall
submit a final annual  statement  accompanied by any percentage rent due through
the date of  expiration,  cancellation  or  termination.  Percentage  rent shall
accrue from September  21,1998 to September 20, 2006. If any Reporting Period is
less than twelve (12)  months,  the  percentage  rent shall be  calculated  on a
prorated basis.

     PENALTY;  INTEREST;  LIEN.  Lessee shall pay a penalty of five percent (5%)
plus interest on any amount of delinquent  rent.  Interest shall accrue daily on
the  delinquent  amount and on the penalty at the rate set by the Arizona  State
Treasurer under A.R.S.  37-241(D) (3) until paid. The delinquent  rent,  penalty
and  interest  shall be a lien on the  Improvements  and other  property  on the
Parcel.

                                 USE OF PREMISES

     USE.  The  Premises  shall be used solely and  exclusively  for the purpose
described in Article 1.2 (Use) The mobile modular unit shall be used as employee
housing  only.  In the event the business  ceases to operate,  the unit shall be
vacated  concurrently  with  cessation  of the  business.  All  other  uses  are
prohibited.

     ARTIFACTS.

     (a) Pursuant to A.R.S. 41-841 and 41-842, Lessee,  Lessee's employees,  and
     Lessee's  guests shall not excavate or collect any  prehistoric or historic
     archaeological  specimens on the Parcel  without a permit from the Director
     of the Arizona State Museum and written  approval of Lessor pursuant to the
     terms of this  Lease.  Lessee  shall  immediately  report  any  unpermitted
     excavation or collection of  archaeological  specimens on the Parcel to the
     Arizona State Museum and Lessor.

     (b) Pursuant to A.R.S.  41-844,  Lessee shall report to the Director of the
     Arizona State Museum and Lessor any prehistoric or historic  archaeological
     site, or paleontological  site, that is discovered on the Parcel by Lessee,
     Lessee's employees, or Lessee's guests, and shall, in consultation with the
     Director  of the Arizona  State  Museum and  Lessor,  immediately  take all
     reasonable steps to secure the preservation of the discovery.

                                       2
<PAGE>
     WASTE;  Lessee  shall not conduct or permit to be  conducted  any public or
private nuisance on the Premises, nor commit or permit to be committed any waste
thereon.   Lessee  shall  report  to  Lessor  and  appropriate  law  enforcement
authorities any known or suspected trespass or waste committed on the Premises.

     NATIVE PLANTS. Lessee shall not move, use, destroy, cut or remove or permit
to be moved,  used,  destroyed,  cut or removed  any timber,  cactus,  protected
native  plants,  standing  trees or  products  of the land  except that which is
necessary  for the use of the  Parcel,  and then  only  with the  prior  written
approval of Lessor.  If the removal or destruction of plants protected under the
Arizona  Native Plant Law is  necessary  to the use of the Parcel,  Lessee shall
also obtain the prior written approval of the Arizona Department of Agriculture.

     CONFORMITY  TO LAW.  Lessee shall not use or permit the Premises to be used
in any manner that is not in  conformity  with all  applicable  Federal,  State,
County and municipal laws, rules and regulations,  unless Lessor  determines and
advises Lessee in writing otherwise.

     GOVERNMENTAL  APPROVAL.  Except as provided in Article 4.5  (Conformity  to
Law),  failure  to  obtain,  or  loss  of  any  governmental  approval  that  is
prerequisite  to the use for which this lease is issued or that is  necessary to
construct,  maintain or operate any  facilities on the site in  connection  with
that use, shall constitute a breach of this lease,  subject to the provisions of
Article 17 (Lessee Defaults and Lessor's Remedies).

     RESERVATIONS.  Lessor excepts and reserves from the Parcel all oil,  gases,
geothermal resources, coal, ores, limestone,  minerals, fossils, and fertilizers
of every  name and  description  that  may be found in or upon the  Parcel,  and
Lessor  reserves  the  right  to  enter  upon  the  Parcel  for the  purpose  of
prospecting  therefor,  or extracting any or all of the  commodities  therefrom.
Lessor reserves the right to issue to other persons, rights to use the Parcel in
a manner not  inconsistent  with the  purposes  for which this Lease was issued.
Lessor further excepts and reserves the right to relinquish to the United States
lands needed for irrigation  works in connection  with a government  reclamation
project,  and to grant  or  dispose  of  rights-of-way  and  sites  for  canals,
reservoirs,  dams,  power or irrigation  plants or works,  railroads,  tramways,
transmission lines or any other purpose or use on or over the Parcel.

     NO WATER RIGHTS  CONFERRED..  This Lease does not confer upon  Lessee,  its
assignees or sublessees,  any express or implied rights to the use or removal of
surface or ground  water from the  Parcel.  Any use or removal of water from the
Parcel shall be pursuant to an independent  written agreement with Lessor and no
claim thereto shall be made by Lessee.  Any water right established shall attach
and be appurtenant to the Parcel.

     GROUNDWATER  CONDITIONS.  Drilling of well(s) is  PROHIBITED  without prior
written permission from Lessor per Article 6.2 (Prior Approval Required). In the
event  permission  is  granted,  Lessee  must file an  intent to drill  with the
Arizona Department of Water Resources (ADWR).

                  (a) Lessee  shall  meter the well(s) on the  Premises,  record
water use on a monthly basis,  and report annually to Lessor the amount of water
pumped on the form  provided  by Lessor  and within  the time  period  specified
therein.

                  (b) Lessee shall pay an  assessment  to Lessor,  assessed each
year  for the  amount  of  groundwater  used in  conjunction  with  this  Lease.
Presently,  the rate is  $100.00  for the first  acre-foot  and  $85.00 for each
additional acre-foot. This rate is subject to annual reappraisal.

                  (c) ADWR requires an annual report of groundwater  pumped from
nonexempt   wells)   within  both  Active   Management   Areas  and   Irrigation
Non-Expansion  Areas. If applicable,  the Annual Water Withdrawal and Use Report
as well as the  associated  fees shall be  submitted to the ADWR within the time
period specified therein.

                  (d) If Lessee desires to move groundwater from well(s) located
on the  Premises  off State Trust land,  or to use  groundwater  for  purpose(s)
different from those stated in this Lease, Lessee shall file an application with
Lessor  for a public  auction  water  sale.  Movement  of  groundwater  from the
Premises prior to a public auction is prohibited.

                  (e) Lessor,  by issuing this Lease,  makes no  guarantee  with
respect to groundwater availability or groundwater quality.

                  (f)  Lessor's  personnel  will have  access to  well(s) on the
Premises during reasonable hours.

                                       3
<PAGE>
     QUIET ENJOYMENT. Lessee shall peaceably and quietly enjoy the Parcel during
the  term of  this  Lease  so  long as  Lessee  is in  compliance  with  all the
provisions of this Lease.

     INSPECTION.   Lessor,   its   duly   authorized   agents,   employees   and
representatives  shall have the right to enter upon and  inspect  the Parcel and
all Improvements thereon at reasonable time, and in a reasonable manner.

     SURRENDER.  In the event this Lease is not renewed,  Lessee shall surrender
peaceably  the  possession  of the Parcel  upon  expiration  of the term of this
Lease.

                                     RECORDS

     RECORD KEEPING; INSPECTION.. Lessee shall make and keep for the term of the
Lease and either (i) five (5) years thereafter;  or (ii) until the conclusion of
any dispute  concerning this Lease,  whichever is later,  appropriate  books and
records  concerning  the  operation of this Lease,  including but not limited to
Federal and State tax statements,  receipts and other records.  Lessor, its duly
authorized  agents,  employees and  representatives  shall have the right at all
times  during  the  term of this  Lease  and  for  either  (i)  five  (5)  years
thereafter; or (ii) until the conclusion of any dispute,  whichever is later, to
make reasonable  examination of those books,  records or other material in order
to obtain  information  which Lessor deems  necessary to administer  this Lease.
Further, Lessor, its duly authorized agents, employees and representatives shall
have the right at all times  during the term of any  sublease  or any  extension
thereof,  and for  either  (i) five (5)  years  thereafter,  or (ii)  until  the
conclusion of any dispute, whichever is later, to make reasonable examination of
any sublessee's books, records or other material which Lessor deems necessary in
order to obtain information to administer Article 3 (Rent) of this Lease.

                          CONSTRUCTION AND IMPROVEMENTS

     DEFINITIONS.  "Improvements" means anything permanent in character which is
the  result  of labor or  capita(  expended  by Lessee  or his  predecessors  in
interest on State land in its reclamation or development, and which has enhanced
the value of the Parcel.  "Removable  Improvements" means anything not permanent
in character  which is the result of labor or capital  expended by Lessee or his
predecessors in interest on State land.

     PRIOR APPROVAL  REQUIRED.  Lessee shall not place or construct or permit to
be placed or constructed any  Improvement or Removable  Improvement on or to the
Parcel,  other than Improvements  necessary for the operation and maintenance of
the purpose for which this lease is issued  subject to Lessor's  prior  approval
Lessor  makes no promise or  assurance  to approve  Improvements  exceeding  the
amount in  Paragraph  3.5..  All other  improvements  are  prohibited.  Prior to
applying for a building permit from the local  government  authority or prior to
beginning of the  construction  if no permit is required,  Lessee shall submit a
current APPLICATION TO PLACE IMPROVEMENT ("APPLICATION").  No construction shall
begin until Lessor approves in writing the  APPLICATION.  The APPLICATION  shall
include  plans  and  specification   (including  but  not  limited  to  grading,
construction  and landscape  plans)  showing the nature,  location,  approximate
cost,  and quality of the proposed  Improvements.  Drainage,  waste  water,  and
sewage plans must be submitted  with the  Application.  Plans  submitted must be
stamped  by an  Arizona  registered  engineer  or  architect.  The work shall be
completed  by an  Arizona  registered  contractor.  The  location  of  completed
Improvements,  as-built  construction  plans  stamped by an  Arizona  registered
engineer or architect,  and any other information  required by Lessor,  shall be
submitted  to  Lessor  within  thirty  (30) days  following  the  completion  of
construction on Lessor's form known as a REPORT OF IMPROVEMENT PLACED WITH PRIOR
APPROVAL Any  Improvements  placed on the Parcel shall  conform to existing laws
and ordinances applicable to the proposed construction in the jurisdiction where
the Premises are located, unless Lessor determines and advises Lessee in writing
that such conformity is not in the best interest of the Trust.

     UTILITIES;  NEW CONSTRUCTION..  Gas,  electric,  power,  telephone,  water,
sewer, cable television and other utility or service lines of every nature shall
be placed and kept  underground  unless  Lessor  grants prior  written  approval
otherwise.  All buildings and  structures  shall be of new  construction  and no
buildings or structures  shall be moved from any other  location onto the Parcel
without Lessor's prior written approval.

     ANNUAL STATEMENT.  Upon request,  but not more frequently than once a year,
Lessee shall file with Lessor a sworn statement setting forth the description of
any  Improvement(s)  placed on the Parcel  during  the prior  lease year and the
actual cash value of such Improvement(s).

     OWNERSHIP; REMOVAL. All Improvements placed upon the Parcel by Lessee shall
be the property of Lessee  subject to the terms of this Lease and shall,  unless
they become the property of Lessor,  be subject to  assessment  for taxes in the
name of Lessee, the same as other property of Lessee. Not later than ninety (90)
days following the expiration or termination of this Lease,  Lessee shall remove
those  Improvements which belong to it, are free of any liens and can be removed
without causing injury to the Premises.  At its option,  Lessor may waive any of

                                       4
<PAGE>
the above  listed  prerequisites  to  Lessee's  removal of  Improvements  on the
Premises.  Lessee may, with Lessor's prior written  approval and within the time
allowed for removal, sell its Improvements to the succeeding Lessee.

     FORFEITURE.  Improvements made on or to the Premises without Lessor's prior
written  approval shall  constitute a breach of this Lease and the  Improvements
shall forfeit to Lessor.  This shall be in addition to any other remedies Lessor
may have against Lessee pursuant to this Lease, or in law or in equity.

     IMPROVEMENTS  DEDICATED  TO  PUBLIC  USE..  Lessee  shall  have no right to
reimbursement  for  Improvements  that  are (or  required  to be)  dedicated  or
otherwise  committed or transferred  to public use,  regardless of acceptance by
the public jurisdiction.

                             REPAIRS AND MAINTENANCE

     LESSEE'S  OBLIGATIONS.  Lessor  shall be under no  obligation  to maintain,
repair,  rebuild or replace any Improvement on the Parcel. Lessee shall, subject
to the provisions of Article 12 (Damage) and Article 15 (Eminent  Domain) and at
its own expense,  keep and maintain  the Premises in good order,  condition  and
repair in conformity with all governmental requirements and if applicable, those
of the  insurance  underwriting  board or  insurance  inspection  bureau  having
jurisdiction  over the Premises,  unless Lessor determines and advises Lessee in
writing that such conformity is not in the best interest of the Trust.

                                MECHANICS' LIENS

     PAYMENT;  INDEMNITY.  Lessee shall be responsible  for payment of all costs
and charges for any work done by or for it on the Premises or in connection with
Lessee's occupancy thereof, and Lessee shall keep the Premises free and clear of
all mechanics' liens and other liens and  encumbrances  resulting from work done
for Lessee or persons claiming under it; provided,  however,  that Lessee may in
good  faith,  and with  reasonable  diligence,  contest or dispute any such lien
claims in any  appropriate  forum so long as this Lease or the Leased Parcel are
not  actually in danger of levy or sale.  Lessee  expressly  agrees to and shall
indemnify and save Lessor harmless  against  liability,  loss,  damages,  costs,
attorney's  fees and all other  expenses  on  account of claims of lien or other
encumbrances  of  laborers  or  materialmen  or  others  for work  performed  or
materials or supplies furnished to Lessee or persons claiming under it. Further,
any  contracts   between   Lessee  or  sublessees   and  any   contractors   and
subcontractors  shall  expressly  hold Lessor  harmless  against  any  liability
arising from such contracts, as described above.

     NOTICE.  Should  any such  claims  of lien or other  encumbrances  be filed
against the Parcel or any action affecting the title to the Parcel be commenced,
the party  receiving  notice of such lien or action shall  immediately  give the
other party written notice thereof.

                                    UTILITIES

     LESSEE'S OBLIGATIONS. Lessee shall be responsible for and shall hold Lessor
harmless from any liability for all charges for water, gas, sewage, electricity,
telephone and any other utility service.

                              TAXES AND ASSESSMENTS

     LESSEE'S  OBLIGATIONS.  In addition to the rent set  herein,  Lessee  shall
timely pay and  discharge,  without  deduction or abatement  for any cause,  all
duties, taxes, charges, assessments,  impositions and payments, extraordinary as
well as  ordinary,  unforeseen  as well as  foreseen,  of every  kind and nature
(under or by virtue of any  current  or  subsequently  enacted  law,  ordinance,
regulation or order of any public or governmental  authority),  which during the
term are due, imposed upon, charged against, measured by or become a lien on (i)
the  Premises;  (ii) any  Leasehold  interest;  (iii) the interest of any of the
parties to this Lease or in proceeds  received  pursuant to this Lease; and (iv)
the rent paid pursuant to this Lease.

                             INSURANCE AND INDEMNITY

     INDEMNITY.  Irrespective of any insurance carried by Lessor for the benefit
of Lessor, Lessee hereby expressly agrees to indemnify and hold Lessor harmless,
or cause  Lessor to be  indemnified  and held  harmless,  from and  against  all
liabilities,  obligations,  damages, penalties, claims, causes of action, costs,
charges and expenses,  including attorney's fees and costs, which may be imposed
upon or incurred by or asserted  against Lessor by reason of the following:  (i)
any accident,  injury or damage to any person or property  occurring on or about
the Premises or any portion  thereof;  (ii) any use,  nonuse or condition of the
Premises or any portion  thereof;  or (iii) any failure on the part of Lessee to
perform or comply with any of the provisions of this Lease;  except that none of
the foregoing shall apply to Lessor's  intentional conduct or active negligence.
In case any action or proceeding is brought against Lessor by reason of any such
occurrence,  Lessee, upon Lessor's request and at Lessee's expense,  will resist
and defend  such  action or  proceeding,  or cause the same to be  resisted  and

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<PAGE>
defended  either by counsel  designated  by Lessee or, where such  occurrence is
covered by liability insurance, by counsel designated by the insurer.

     POLICIES.  Lessee at its expense,  shall at all times during the term,  and
any  extension  thereof,  maintain  in  full  force  a  policy  or  policies  of
comprehensive liability insurance,  including property damage, written by one or
more  responsible  insurance  companies  licensed to do business in the State of
Arizona,  and each policy shall be written on an occurrence basis,  which insure
Lessee and Lessor against liability for injury to persons and property and death
of any person or persons occurring in, on or about the Premises,  or arising out
of Lessee's  maintenance,  use and occupancy  thereof.  All public liability and
personal  property damage policies shall contain a provision that Lessor,  named
as an additional  insured,  shall be entitled to recovery under the policies for
any loss  occasioned to it, its servants,  agents and employees by reason of the
negligence  or  wrongdoing  of Lessee,  its  servants,  agents and  employees or
sublessees.  Further,  the policies shall provide that their coverage is primary
over any other insurance coverage available to Lessor, its servants,  agents and
employees.  All  policies  of  insurance  delivered  to  Lessor  must  contain a
provision  that the company  writing the policy shall give to Lessor thirty (30)
days notice in writing in advance of any cancellation or lapse, or the effective
date of any reduction in the amounts of insurance.

     COVERAGE.  The insurance as described in Paragraph 11.2  (Policies)  herein
shall afford  protection not less than  $2,000,000 in combined single limits for
bodily injury and property damage and each liability  policy shall be written on
an occurrence basis; provided,  however, that the minimum amount of coverage for
the above shall be adjusted upward on Lessor's  reasonable  request so that such
respective  minimum  amounts of coverage shall not be less than the amounts then
required by statute or generally  carried on similarly  improved  real estate in
the County herein described,  whichever is greater. If at any time Lessee fails,
neglects or refuses to cause such insurance to be provided and maintained,  then
Lessor may, at its  election,  procure or renew such  insurance  and any amounts
paid therefor by Lessor shall be an additional amount due at the next rent day.

     BLANKET POLICY.  Notwithstanding  anything to the contrary in this Article,
Lessee's  obligations  to carry the insurance  provided for herein may be bought
within the  coverage of a  so-called  blanket  policy or  policies of  insurance
maintained by Lessee, provided,  however, that the coverage afforded Lessor will
not be reduced by reason of the use of such blanket policy of insurance.

     COPIES.  Copies of policies  required by this Article shall be delivered to
Lessor prior to Lessee's occupancy of the Premises.  Lessee shall provide Lessor
with a current certificate of insurance and at Lessor's request provide proof of
payment.

                                     DAMAGE

     LESSEE'S  OBLIGATIONS.  If the Parcel or any building or other  Improvement
located thereon are damaged or destroyed  during the term of this Lease,  Lessee
may arrange at its expense for the repair, restoration and reconstruction of the
same substantially to its former condition, but such damage or destruction shall
not  terminate  this Lease or  relieve  Lessee  from its duties and  liabilities
hereunder.

                      TRADE FIXTURES AND PERSONAL PROPERTY

     LESSEE'S PROPERTY.  Any trade fixtures,  signs, store equipment,  and other
personal property installed in or on the Parcel by Lessee or any sublessee shall
remain its property  subject to the provisions of this Lease.  Lessee shall have
the right,  provided it is not then in breach  hereunder,  at any time to remove
any and all of the same,  subject to the restrictions of Article 6.5 (Ownership;
Removal).

                     ASSIGNMENT, SUBLETTING AND ENCUMBRANCE

     PRIOR APPROVAL REQUIRED. Lessee shall not assign this Lease or any interest
therein,  nor shall Lessee  sublease any portion or all of the Premises  without
obtaining  Lessor's  prior written  approval.  In no event may this Lease or any
interest  therein be assigned or sublet unless Lessee is in full compliance with
this Lease.  Lessor may require additional rent in consideration for approval of
any sublease.  Lessee shall not enter into a contract of sale, mortgage, lien or
other encumbrance affecting this Lease unless a copy is filed with Lessor.

     CONSENT REQUIRED. An assignment of this Lease shall not be made without the
consent of all the  parties.  Lessee may assign all or a portion of the Premises
as allowed by the terms of this Article  provided  Lessee shall assign  Lessee's
entire interest in that portion of the Premises.

     PURPOSE.  There  shall be no  assignment  or  sublease  made  except  to an
assignee or sublessee  that will use the Premises for the  purpose(s)  described
herein.

                                       6
<PAGE>
     LESSEE PRIMARILY RESPONSIBLE..  Notwithstanding any sublease,  Lessee shall
remain  responsible  to Lessor for the  performance  of the  provisions  of this
Lease.

     PERCENTAGE  RENT DUE.  Assignment  shall not be approved unless all accrued
percentage  rent has been paid as of the date of the application for assignment.

     ENTIRE INTEREST. The assignment of Lessee's entire interest in a portion of
the Premises  shall not relieve Lessee of its  responsibility  to Lessor for the
performance of the provisions of this Lease as it relates to that portion of the
Premises not transferred by the assignment.

                                 EMINENT DOMAIN

     EXPIRATION.  If at any time during the  duration of this Lease the whole or
any part of the  Parcel is taken by direct  sale,  lease,  institutional  taking
under  A.R.S.   37-441  or  acquisition  in  any  manner  through   condemnation
proceedings or otherwise,  for any quasi-public or public purpose by any person,
private or public  corporation,  or any governmental  agency having authority to
exercise  the power of  eminent  domain  or  condemnation  pursuant  to any law,
general,  special or  otherwise,  this Lease  shall  expire on the date when the
Parcel is taken or acquired except as otherwise provided.

     PARTIAL  TAKING;  DAMAGES;  RENT..  In the event of a partial taking and if
Lessor  determines  that it is in the best interest of the Trust,  the Lease may
continue an full force and effect for that  portion of the Parcel not taken.  As
against Lessor,  Lessee and any sublessee shall not have a compensable  right or
interest in the real property being taken and shall have no compensable right or
interest in severance  damages  which may accrue to the  remainder of the Parcel
not taken,  nor shall  Lessee or any  sublessee  have any  compensable  right or
interest in the remaining term of this  Leasehold or any renewal.  Rent shall be
apportioned as of the day of such taking.  Lessor shall be entitled to and shall
receive any awards,  including  severance damage to remaining state lands,  that
may be made for any taking concerning the Parcel.  Lessee's Rights to Award.. In
the event of any  taking,  Lessee  shall have the right to  receive  any and all
awards or  payments  made for any  building or other  Improvements  on the lands
fully placed on the Parcel by Lessee with Lessor's prior written approval.

                            BANKRUPTCY AND INSOLVENCY

     LESSOR'S  RIGHTS.  If (i) all or  substantially  all of Lessee's assets are
placed in the hands of a receiver,  and such receivership continues for a period
of thirty (30) days; or (ii) should Lessee make an assignment for the benefit of
creditors; or (iii) should Lessee institute any proceedings under any present or
future  provisions of the Bankruptcy  Code or under a similar law wherein Lessee
seeks to be  adjudicated  as bankrupt,  or to be discharged of its debts,  or to
effect a plan of liquidation,  composition or reorganization; or (iv) should any
involuntary  proceedings be filed against Lessee under such  bankruptcy laws and
not be dismissed or otherwise  removed within ninety (90) days after its filing,
then  this  Lease  shall  not  become  an  asset in any of such  proceedings  or
assignment.  In addition  to all other  rights and  remedies of Lessor  provided
hereunder  or by law,  Lessor  shall have the right to declare  the term of this
Lease at an end and to re-enter the  Premises,  take  possession  and remove all
persons, and Lessee shall have no further claim on the Parcel under this Lease.

                      LESSEE DEFAULTS AND LESSOR'S REMEDIES

     CONDITIONS.  All of the provisions of this Lease are conditions.  Breach of
any one of these  conditions  by Lessee  or any  sublessee  shall be  sufficient
grounds  for  cancellation  of  this  Lease  by  Lessor,  subject  to the  other
provisions of this Article.

     CANCELLATION.  If Lessee fails to keep any provision of this Lease,  Lessor
may cancel this Lease and declare Lessee's interest  forfeited.  Lessor shall be
forever wholly  absolved from liability for damages which might result to Lessee
or any  sublessee  on account of this Lease  having been  canceled or  forfeited
prior to the  expiration  of the full term,  subject to the other  provisions of
this Article.

     BREACH.  In the event of a breach of this  Lease  which is not  curable  or
remains  uncured after thirty (30) days notice by Lessor of failure to pay rent,
taxes or other  assessments,  and  forty-five  (45) days from the receipt of the
notice to cure any other curable default,  to Lessee of the breach,  Lessor may,
in addition to all other  remedies which may be available to Lessor in law or in
equity, (i) enter and repossess the Premises or any part thereof,  expelling and
removing  therefrom  all persons and  property  (either  holding  such  property
pursuant  to  Lessor's  landlord's  lien,  or  storing it at  Lessee's  risk and
expense, or otherwise disposing thereof), as to which Lessor shall not be liable
to Lessee or any  sublessee  for any claim for damage or loss which may  thereby
occur,  and (ii) either (a)  terminate  this Lease,  holding  Lessee  liable for
damages  for  its  breach  or (b)  treat  the  Lease  as  having  been  breached
anticipatorily  and the Premises  abandoned by Lessee without  thereby  altering

                                       7
<PAGE>
Lessee's  continuing  obligations for the payment of rent and the performance of
those Lease provisions to be performed by Lessee during the Lease term.

     LIQUIDATED  DAMAGES.  If Lessor  terminates this Lease for Lessee's breach,
Lessee shall be liable to Lessor, as liquidated damages and not as a penalty, an
amount,  which at the time of such  termination,  represents the amount equal to
the rent due for the two (2) subsequent lease years. The liquidated damages will
compensate  Lessor for the loss of rent from the parcel due to the  default  and
costs incurred to re-lease the Premises.

     EXPENSES.  Lessee  shall pay to Lessor upon demand all costs,  expenses and
fees,  including  attorneys'  fees (or market  value of  attorney's  fees) which
Lessor may incur in  connection  with the exercise of any remedies on account of
or in  connection  with any breach by Lessee,  plus  interest on all amounts due
from Lessee to Lessor at the rate set by the Arizona State Treasurer,  according
to law.

     REMEDIES NOT EXCLUSIVE.  The remedies herein granted to Lessor shall not be
exclusive  or mutually  exclusive  and Lessor  shall have such other  additional
remedies  against  Lessee as may be  permitted  in law or in equity at any time;
provided, however, Lessor shall not be relieved of any obligation imposed by law
for mitigation of damages, nor shall Lessor recover any duplicative damages, and
Lessee shall be reimbursed by any subsequent Lessee or purchaser of the Premises
for any  amount by which  the value of  Lessee's  Improvements  exceed  Lessor's
damages,  notwithstanding any other provision in this Lease to the contrary.  In
particular,  any  exercise  of a right of  termination  by  Lessor  shall not be
construed  to end or  discharge  any right of Lessor to  damages  on  account of
Lessee's breach.

     NO WAIVER.  No waiver of breach of any  provision  of this  Lease  shall be
construed as a waiver of succeeding breach of the same or other provisions.

                                  HOLDING OVER

     PROHIBITION.  There shall not be any holding over by Lessee or any assignee
or sublessee, upon the expiration or cancellation of this Lease without Lessor's
prior written consent. If there be any holding over by Lessee or any assignee or
sublessee,  the holding over shall give rise to a tenancy at the  sufferance  of
Lessor upon the same terms and conditions as are provided for herein with a rent
for the  holdover  period  commensurate  with,  but in no event less  than,  the
previous year's rent. Renewal  Application.  An application to renew this Lease,
properly and timely filed, may give rise to a period of interim occupancy if the
term of this Lease  expires  prior to  execution of a new lease or the denial of
the application to renew.

     INTERIM OCCUPANCY CONDITIONS.. Should interim occupancy occur, on or before
the  expiration of this Lease,  and annually  thereafter,  Lessee shall pay rent
established by Lessor (subject to A.R.S.  37-215(b)).  Unless advised in writing
by Lessor to the  contrary,  all other terms and  conditions of this Lease shall
remain in full force and effect.

                                  ENCUMBRANCES

     RIGHTS. Lessee, and its successors and assigns, shall have the unrestricted
right to mortgage and pledge this Lease, subject, however, to the limitations of
this  Section.  Any such  mortgage/deed  of trust or pledge shall be subject and
subordinate  to the  rights  of  Lessor,  and  nothing  in this  Lease  shall be
construed to impose upon Lessor any  obligation or liability with respect to the
payment of any  indebtedness to any holder of a mortgage/deed of trust or pledge
of this Lease.

     TERM.  The term of any  leasehold  mortgage  or deed of trust  shall not be
longer than the remaining lease term.

     REGISTRATION.  No holder of a  mortgage/deed  of trust on this Lease  shall
have the rights or benefits provided by this Article nor shall the provisions of
this Article be binding  upon  Lessor,  unless and until the name and address of
the holder of the mortgage/deed of trust is registered with Lessor.

     OF RECORD.  If Lessee,  or Lessee's  successors or assigns,  shall mortgage
this Lease in compliance  with  provisions of this Article,  then so long as any
such  mortgage/deed  of trust  of  record  remains  unsatisfied,  the  following
provisions shall apply:

                  (a) Lessor,  upon giving Lessee any notice of default,  or any
other notice under the  provisions of or with respect to this Lease,  shall also
give a copy of such notice to the registered  holder of a mortgage/deed of trust
on this Lease.

                  (b) Any holder of such  mortgage/deed of trust, in case Lessee
shall have a monetary default hereunder, shall, within thirty (30) days from the
receipt of notice have the right to cure such  default,  or cause the same to be
cured,  and Lessor shall accept such  performance  by or at the instance of such
holder  as if the  same had been  made by  Lessee,  all as  provided  in  A.R.S.
ss.37-289 (A)(2).

                  (c) Nothing herein contained shall preclude Lessor, subject to
the  provisions of this Article,  from  exercising  any rights or remedies under
this Lease with  respect to any other  default by Lessee  during the pendency of
any foreclosure or trustee's sale proceedings.

                                       8
<PAGE>
                  (d) Any holder of such  mortgage/deed of trust, in case Lessee
shall have a default other than a default  involving  failure to pay rent, taxes
or other assessments, shall have forty-five (45) days from the receipt of notice
to cure any curable default.

                  (e) No  failure  on the part of  Lessor  to give the  required
notice of default to the holder of a  mortgage/deed  of trust  shall be deemed a
waiver of Lessor's continuing right to give notice of the default.

                  (f) Upon foreclosure of the mortgage or deed of trust,  Lessor
shall  assign  this Lease to the holder of the  mortgage or deed or trust if all
taxes rent and assessment  payments are current.  Nothing herein contained shall
be deemed to  obligate  Lessor to deliver  physical  possession  of the  demised
Premises to the assignee  under any  assignment  entered  into  pursuant to this
paragraph.

                  (g)  No  agreement   between  Lessor  and  Lessee   modifying,
canceling  or  surrendering  this Lease  shall be  effective  without  the prior
written consent of the registered mortgagees and lienholders.

                  (h) No union of the interest of Lessor and Lessee shall result
in a merger of this Lease in the fee interest.

                  (I) If a  default  is not cured  within  the  applicable  time
period,  Lessor may issue an order canceling the Lease. If a cancellation  order
is issued,  the order shall not become final until any  foreclosure  action by a
mortgagee or other lienholder,  registered with Lessor pursuant to this Article,
is finally resolved, if the mortgagee or lienholder does both of the following:

                  (1)  Within  thirty  (30)  days of the date of  issuance  of a
Notice of  Default,  files  written  notice with Lessor of its intent to proceed
with a foreclosure action, and;

                  (2)  Within  one  hundred  twenty  (120)  days of the  date of
issuance of a Notice of Default,  has commenced  either a foreclosure  action in
court or a nonjudicial  foreclosure of a deed of trust,  and has provided Lessor
with a  certified  copy of the  complaint  or  other  document  that  officially
commences the  foreclosure  process,  and thereafter  prosecutes the foreclosure
with reasonable diligence.

     CASUALTY LOSS. A standard  Mortgage Clause naming each leasehold  mortgagee
may be added to any and all insurance  policies required to be carried by Lessee
hereunder  on  condition  that the  insurance  proceeds are to be applied in the
manner that is not in derogation of Lessor's  rights;  except that the leasehold
mortgage  may provide a manner for the  disposition  of such  proceeds,  if any,
otherwise  payable  directly to Lessee (but not such proceeds,  if any,  payable
jointly to Lessor and Lessee) pursuant to the provisions of this Lease.

                              ENVIRONMENTAL MATTERS

     DEFINITION OF REGULATED  SUBSTANCES AND ENVIRONMENTAL LAWS. For purposes of
this Lease,  the term  "Environmental  Laws" shall include but not be limited to
any relevant federal,  state or local  environmental  laws, and the regulations,
rules and  ordinances,  relating  to  environmental  matters,  and  publications
promulgated  pursuant to the local,  state,  and  federal  laws and any rules or
regulations  relating to environmental  matters.  For the purpose of this Lease,
the term "Regulated  Substances"  shall include but not be limited to substances
defined as "regulated  substance,"  "solid waste," "hazardous waste," "hazardous
materials,"  "hazardous  substances,"  "toxic  materials,"  "toxic  substances,"
"inert materials," "pollutants," "toxic pollutants," "herbicides," "fungicides,"
"rodenticides,"   "insecticides,"   "contaminants,"   "pesticides,"  "asbestos,"
"environmental  nuisance,"  "criminal  littering,"  or  "petroleum  products" as
defined in Environmental Laws.

     COMPLIANCE WITH ENVIRONMENTAL  LAWS.. Lessee shall strictly comply with all
Environmental Laws, including,  without limitation,  water quality, air quality;
and handling,  transportation,  storage, treatment, or disposal of any Regulated
Substance  on,  under,  or from the Premises.  Without  limiting the  foregoing,
compliance includes that Lessee shall: (1) comply with all reporting obligations
imposed under  Environmental  Laws; (2) obtain and maintain all permits required
by  Environmental  Laws,  and provide a copy to Lessor  within ten (10) business
days of receipt of the lease; (3) provide copies of all  documentation  required

                                       9
<PAGE>
by  Environmental  Laws to Lessor  within  ten (10)  business  days of  Lessee's
submittal  and/or  receipt of the  documentation;  (4) during the term of Lease,
provide copies of all  information it receives or obtains  regarding any and all
environmental  matters  relating to the  Premises,  including but not limited to
environmental audits relating to the Premises regardless of the reason for which
the  information  was obtained or whether or not the information was required by
Environmental Laws; (5) prevent treatment, storage, disposal, handling or use of
any Regulated Substances within the Premises without prior written authorization
from Lessor. Designated Compliance Officer.. Lessee at all times shall employ or
designate an existing  employee  (the  "Designated  Compliance  Officer") who is
responsible  for knowing all  Environmental  Laws affecting  Lessee and Lessee's
business  and  monitoring   Lessee's   continued   compliance   with  applicable
Environmental  Laws.  Upon request by Lessor,  Lessee shall make the  Designated
Compliance  Officer  available  to  discuss  Lessee's  compliance,   answer  any
questions,  and provide such reports and  confirming  information  as Lessor may
reasonably request.

     AUDIT. At any time,  Lessor may request Lessee to provide an  environmental
audit of the Premises performed by an Arizona registered  professional  engineer
or an Arizona  registered  geologist.  Lessee  shall pay the entire  cost of the
audit.

     ENVIRONMENTAL ASSESSMENT. At any time, during the term of the Lease, Lessor
may  require  Lessee  to  obtain  one Phase I  environmental  assessment  of the
Premises performed by an Arizona registered  professional engineer or an Arizona
registered geologist. If based upon the Phase I environmental  assessment or its
own  independent  investigation,  Lessor  identifies  any possible  violation of
Environmental  Laws or the terms of this  Lease,  Lessor may  require  Lessee to
conduct additional environmental assessments as Lessor deems appropriate for the
purpose of ensuring that the Premises are in compliance with Environmental Laws.
The Phase I assessment,  or any other  assessment  required by Lessor,  shall be
obtained for the benefit of both Lessee and Lessor. A copy of the Phase I report
shall be provided  both to Lessee and Lessor.  Lessor,  in its sole  discretion,
shall have the right to require Lessee to perform additional  assessments of any
damage to the Premises arising out of any violations of  Environmental  Laws. If
Lessee fails to obtain any assessments required by Lessor,  Lessee shall pay the
entire costs of any and all assessments required by Lessor,  notwithstanding the
expiration or termination of the Lease.

     INDEMNITY FOR  ENVIRONMENTAL  DAMAGE..  Lessee shall defend,  indemnify and
hold  Lessor  harmless  from and  against  any and all  liability,  obligations,
losses, damages, penalties, claims, environmental response and cleanup costs and
fines, and actions,  suits, costs, taxes,  charges,  expenses and disbursements,
including  legal fees and  expenses  of whatever  kind or nature  (collectively,
"claims" or "damages")  imposed on,  incurred by, or reserved  against Lessor in
any way relating to or arising out of any non-compliance  with any Environmental
Laws, the existence or presence of any Regulated  Substance,  on, under, or from
the Premises, and any claims or damages in any way relating to or arising out of
the removal, treatment, storage, disposition,  mitigation,  cleanup or remedying
of any  Regulated  Substance  on,  under,  or from the  Premises by Lessee,  its
agents, contractors, or subcontractors.

     SCOPE OF INDEMNITY.  This  indemnity  shall  include,  without  limitation,
claims or damages  arising out of any and all violations of  Environmental  Laws
regardless of any real or alleged fault, negligence,  willful misconduct,  gross
negligence,  breach of warranty,  or strict  liability on the part of any of the
indemnitees.  This indemnity shall survive the expiration or termination of this
Lease  and/or  transfer  of all or any  portion  of the  Premises  and  shall be
governed by the laws of the State of Arizona.

     LESSEE'S  PARTICIPATION IN THE DEFENSE. In the event any action or claim is
brought or asserted against Lessor which is or may be covered by this indemnity,
Lessee  shall  fully  participate,  at Lessee's  expense,  in the defense of the
action or claim  including but not limited to the following:  (1) the conduct of
any required cleanup,  removal or remedial actions and/or negotiations,  (2) the
conduct of any proceedings, hearings, and/or litigation, and (3) the negotiation
and  finalization of any agreement or settlement.  Lessor shall retain the right
to make all final  decisions  concerning  the defense.  Lessee's  obligations to
participate  in the defense under this Section  shall survive the  expiration or
termination of the Lease.

     RESTORATION.  Prior to the  termination of the Lease,  Lessee shall restore
the  Premises by removing any and all  Regulated  Substances.  In addition,  the
restoration  shall  include,  but not be  limited  to,  removal of all waste and
debris deposited by Lessee.  If the Premises or any portions thereof are damaged
or destroyed from the existence or presence of any Regulated Substance or if the
Premises or any portions thereof are damaged or destroyed in any way relating to
or arising out of the  removal,  treatment,  storage,  disposition,  mitigation,
cleanup or remedying of any Regulated  Substance,  Lessee shall arrange,  at its
expense, for the repair, removal,  remediation,  restoration, and reconstruction
to the Premises to the original condition existing on the date that Lessee first
occupied the Parcel,  to the  satisfaction of Lessor.  In any event, any damage,

                                       10
<PAGE>
destruction,  or  restoration  by  Lessee  shall  not  relieve  Lessee  from its
obligations and liabilities under this Lease.  Lessee's restoration  obligations
under this Section shall survive the expiration or the termination of the Lease.

                                  MISCELLANEOUS

     RESERVATION.  This Lease grants Lessee only those rights expressly  granted
herein and Lessor retains and reserves all other rights in the Premises.

     BINDING EFFECT. Each provision of this Lease shall extend to, be binding on
and inure to the  benefit of not only Lessee but each of its  respective  heirs,
administrators,  executors,  successors  and assigns.  When reference is made in
this Lease to either  "Lessor" or  "Lessee",  the  reference  shall be deemed to
include, wherever applicable, the heirs, administrators,  executors,  successors
and  assigns of the  parties.  This Lease shall be binding  upon all  subsequent
owners  of the  Premises,  and of any  interest  or  estate  therein  or lien or
encumbrance thereon.

     NO  PARTNERSHIP.  The  relationship  of the  parties  is that of Lessor and
Lessee,  and it is expressly  understood  and agreed that Lessor does not in any
way or for any  purpose  become a partner  of Lessee  or a joint  venturer  with
Lessee in the conduct of Lessee's business or otherwise, and that the provisions
of any agreement  between Lessor and Lessee relating to rent are made solely for
the purpose of  providing a method by which  rental  payments are to be measured
and ascertained.

     QUITCLAIM  UPON  TERMINATION..  After the expiration or termination of this
Lease,  Lessee shall  execute,  acknowledge  and deliver to Lessor within thirty
(30) days after written demand from Lessor to Lessee,  any document requested by
Lessor  quitclaiming any right;  title or interest in the Leasehold to Lessor or
other  document  required by any reputable  title company to remove the cloud of
this Lease from the Premises.

     TITLE.  The  titles to the  Articles  of this  Lease are not a part of this
Lease and shall have no effect upon the  construction or  interpretation  of any
part of the Lease. Fraud or Misrepresentation.. If during the term of this Lease
it  appears  that  there has been  fraud or  collusion  on the part of Lessee to
obtain or hold this  Lease at a rent less than its value,  or  through  Lessee's
fraud or  collusion a former  Lessee of the  Premises has been allowed to escape
payment  of the rent due for former  Lessee's  use of the  Premises,  Lessor may
cancel this Lease and the Parcel shall  immediately  revert to Lessor. If during
the  term  of  this  Lease  it  appears  that  Lessee  has  misrepresented,   by
implication, willful concealment or otherwise, (i) the value of the Improvements
placed on the Parcel by a former Lessee or any other person;  or (ii) Lessee not
being the owner of the  Improvements  placed on the Parcel by a former Lessee or
any other person at the  commencement of the Lease term,  Lessor may cancel this
Lease and the Parcel shall immediately revert to Lessor.

     NOTICES. Any notice to be given or other document to be delivered to Lessee
or Lessor  hereunder  shall be in writing and  delivered  to Lessee or Lessor by
depositing  same in the United States Mail,  with prepaid  postage thereon fully
prepaid and addressed as follows:

         TO Lessor:                         Arizona State Land Department
                                            1616 West Adams Street - First Floor
                                            Phoenix, Arizona 85007

         TO Lessee:                         Address of Record

Lessee  must  notify  Lessor by written  notice of any change in address  within
thirty (30) days. Lessor may, by written notice to Lessee, designate a different
address.

     LESSOR'S TITLE. If it is determined that Lessor has failed to receive title
to any of the Parcel,  the Lease is null and void  insofar as it relates to that
portion of the Parcel to which Lessor has failed to receive title.  Lessor shall
not be liable to Lessee or any assignee or sublessee for any damages that result
from Lessor's failure to receive title.

     LESSOR'S  LIEN.  Lessee  grants to Lessor a lien  superior to all others in
Lessee's interest in Improvements and valuable  materials located on the Parcel.
Lessor has the right to recover any rent arrearage and  outstanding  liabilities
of Lessee from Lessee's interest in the Improvements or valuable materials.

     NO PROMISE TO SELL.  Lessee  acknowledges  that it has not been  induced to
enter into this Lease by any promise from Lessor or any of its agents,  servants
or employees that the Parcel will be offered for sale at any time.

     CANCELLATION.  Lessor may cancel  this  Lease,  without  penalty or further
obligation  if,  within three (3) years of execution,  any person  significantly
involved in initiating, negotiating, securing, drafting or creating the Lease on
behalf of Lessor or any of its departments or agencies is, at any time while the
Lease or any extension of the Lease is in effect, an employee of any other party
to the Lease in any  capacity,  or a consultant  to any other party of the Lease
with  respect to the  subject  matter of the Lease.  The  cancellation  shall be

                                       11
<PAGE>
effective when written notice from the Governor is received by all other parties
to the Lease unless the notice specifies a later time.

     APPLICABLE  LAW.  This  Lease is subject to all  current  and  subsequently
enacted rules,  regulations and laws applicable to State lands and to the rights
and obligations of Lessors and Lessees.  No provision of this Lease shall create
any vested  right in Lessee  except as otherwise  specifically  provided in this
Lease.

     AMENDMENT.  This Lease may be amended only in writing and upon agreement by
all parties.

     ATTORNEYS'  FEES. In any action  arising out of this Lease,  the prevailing
party is entitled to recover reasonable attorneys' fees and costs in addition to
the amount of any judgment, costs and other expenses as determined by the court.
In the case of Lessor,  reasonable  attorney's  fees shall be  calculated at the
reasonable  market value for such  services  when  rendered by private  counsel,
notwithstanding  that it is represented by the Arizona Attorney General's Office
or other salaried counsel.

     EXECUTION.  This  document is submitted for  examination  and shall have no
binding  effect on the  parties  unless  and  until  executed  by Lessor  (after
execution by Lessee), and a fully executed copy is delivered to Lessee. Upon the
execution hereof, at the request of Lessee,  the parties also shall execute,  so
that Lessee may cause it to be recorded, a short form of this Lease.

     ARBITRATION.  In the event of a dispute  between the parties to this Lease,
it is agreed to use  arbitration  to resolve  the dispute but only to the extent
required by  A.R.S.ss.12-1518;  and in no event shall arbitration be employed to
resolve a dispute  which is otherwise  subject to  administrative  review by the
Department.  SURVEY.  At the request of Lessor,  Lessee  shall  submit a current
survey prepared by an Arizona registered land surveyor of the Parcel. The survey
shall be prepared to Lessors  satisfaction  and the cost of the survey  shall be
borne by Lessee.

     MUTUAL CANCELLATION.  This Lease may be terminated as to all or part of the
parcel prior to the expiration date upon written agreement signed by both Lessor
and Lessee.  The  agreement  shall  specify the terms and  conditions  of such a
cancellation.

                                       12
<PAGE>
IN WITNESS  HEREOF,  the parties hereto have signed this Lease effective the day
and year set forth below.

                                        ----------------------------------------
                                        LESSEE                              DATE

STATE OF ARIZONA, LESSOR
Arizona State Land Commissioner         ----------------------------------------
                                        LESSEE                              DATE

                                        ----------------------------------------
                                        LESSEE                              DATE

By:
   --------------------------------     ----------------------------------------
                               DATE     ADDRESS

                                        ----------------------------------------
               (Seal)                   CITY                       STATE     ZIP

                                       13
<PAGE>
STATE OF ARIZONA LAND DEPARTMENT                   RUN DATE:         17-mar-1998
1616 W. ADAMS                                      RUN TIME:         16:13:44
PHOENIX, AZ  85007

KE LEASE NUMBER:           003-000821-00-000
AMENDMENT NUMBER: 1

LAND #                          LEGAL DESCRIPTION            C.C.      ACREAGE
---------------------------------------
-------------------------------------------------            -------------------
17.0-S-21.0-E-02-02-030-1003    M&B IN LOT 4 AND SWNW        0.0        16.820

---------------------------------------
-------------------------------------------------            -------------------
                                                    TOTALS:  0.0        16.820

                                       14

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