EX-10 3 ex10p.htm LEASE FOR DISTRIBUTION CENTER LEASE

                                                                      LEASE

                                                                      between

                            SUNSET-SCE, LLC, a California limited liability
company,
                                as to an undivided 75% interest as
tenant-in-common,

                                                                        AND

                           JL INTERESTS, LLC, a California limited liability
company,
                                as to an undivided 25% interest as
tenant-in-common

                                                         collectively, as
Landlord

                                                                         and

                                ACE HARDWARE CORPORATION, a Delaware corporation

                                                                    as Tenant

                                                            dated June 19, 2002

1.            Certain Definitions
2.            Demise of Premises
3.            Term
4.            Rent
5.            Net Lease: True Lease
6.            Title and Condition
7.            Payment of Impositions and Additional Obligations; Compliance with
Law
8.            Use
9.            Maintenance and Repair
10.          Liens
11.          Alterations
12.          Condemnation
13.          Insurance
14.          Damage, Destruction
15.          Restoration
16.          Subordination to Financing
17.          Assignment, Subleasing
18.          Permitted Contests
19.          Default
20.          Landlord's Remedies
21.          Bankruptcy; Insolvency
22.          Notices
23.          Memorandum Lease; Estoppel Certificates
24.          Surrender and Holding Over
25.          No Merger of Title
26.          Landlord and Lender Exculpation
27.          Hazardous Substances
28.          Statements
29.          No Usury
30.          Broker
31.          Waiver of Landlord's Lien
32.          No Waiver
33.          Separability
34.          Indemnification
35.          Headings
36.          Modification
37.          Successors, Assigns
38.          Counterparts
39.          Governing Law

                                                                LEASE

            THIS LEASE ("Lease") is made by and between SUNSET-SCE, LLC, a
California
limited liability company, as to an undivided 75% interest as tenant-in-common,
having an office
at 4168 Douglas Blvd., Suite 200, Granite Bay, CA 95746, and JL INTERESTS, LLC,
a
California limited liability company, as to an undivided 25% interest as
tenant-in-common
(collectively, "Landlord"), and ACE HARDWARE CORPORATION, a Delaware
corporation,
having its principal office at 2200 Kensington Court, Oak Brook, Illinois
60523-2100
("Tenant").

            In consideration of the rents and provisions herein stipulated to be
paid and performed,
Landlord and Tenant hereby covenant and agree as follows:

            1.        Certain Definitions.

                        (a)        "Additional Rent" shall mean all sums
required to be paid by Tenant to
Landlord hereunder other than Basic Rent, which sums shall constitute rental
hereunder.

                        (b)        "Adjoining Property" shall mean all
sidewalks, curbs, gores and vault
spaces adjoining any of the Premises.

                        (c)        "Alteration" or "Alterations" shall mean any
or all changes, additions,
improvements, reconstructions or replacements of any of the Improvements, both
interior or
exterior, and ordinary and extraordinary.

                        (d)        "Basic Rent" shall mean Basic Rent as defined
in Paragraph 4.

                        (e)        "Basic Rent Payment Dates" shall mean the
Basic Rent Payment Dates as
defined in Paragraph 4.

                        (f)        "Commencement Date" shall mean the
Commencement Date as defined in
Paragraph 3.

                        (g)        "Condemnation" shall mean a Taking and/or a
Requisition.

                        (h)        "Default Rate" shall mean an annual rate of
interest equal to the maximum
rate of interest allowed by law in the State.

                        (i)        "Event of Default" shall mean an Event of
Default as defined in
Paragraph 19.

                        (j)        "Insurance Requirement" or "Insurance
Requirements" shall mean, as the
case may be, any one or more of the terms of each insurance policy required to
be carried by
Tenant under this Lease and the requirements of the issuer of such policy, and
whenever Tenant
shall be engaged in making any Alteration or Alterations, repairs or
construction work of any
kind (collectively, "Work"), the term "Insurance Requirement" or "Insurance
Requirements"
shall be deemed to include a requirement that Tenant obtain or cause its
contractor to obtain
completed value builder's risk insurance when the estimated cost of the Work in
any one instance
exceeds the sum of Fifty Thousand Dollars ($50,000.00) and that Tenant or its
contractor shall
obtain worker's compensation insurance or other adequate insurance coverage
covering all
persons employed in connection with the Work, whether by Tenant, its contractors
or
subcontractors.

                        (k)        "Landlord's Trade Fixtures" shall mean all
counters, cases, shelving and
similar fixtures, desks, movable partitions and other office furniture and
personal property owned
by Landlord at the Premises, including without limitation those items listed in
Exhibit C attached
hereto.

                        (l)        "Law" shall mean any constitution, statute or
rule of law.

                        (m)      "Legal Requirement" or "Legal Requirements"
shall mean, as the case
may be, any one or more of all present and future laws, codes, ordinances,
orders, judgments,
decrees, injunctions, rules, regulations and requirements, even if unforeseen or
extraordinary, of
every duly constituted governmental authority or agency (but excluding those
which by their
terms are not applicable to and do not impose any obligation on Tenant,
Landlord, Lender, or the
Premises) and all covenants, restrictions and conditions now or hereafter of
record which may be
applicable to Tenant, to Landlord or to any of the Premises, or to the use,
manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the
Premises, including, without limitation, that certain Declaration of Covenants,
Conditions and
Restrictions for Cambridge Business Center ("CC&R's"), made July 6, 1987, by
Stanford Ranch,
Inc., a California corporation, and recorded in the Official Records of Placer
County on July 10,
1987, at Book 3224 Page 555, any amendments thereto, the Design Guidelines and
any other
Project Documents, all as defined in the CC&R's, even if compliance therewith
(i) necessitates
structural changes or improvements (including changes required to comply with
the "Americans
with Disabilities Act") or results in interference with the use or enjoyment of
any of the Premises
or (ii) requires Tenant to carry insurance other than as required by the
provisions of this Lease.

                        (n)        "Lender" shall mean any entity which has made
or makes a Loan to
Landlord, secured in whole or in part by a Mortgage and evidenced by a Note or
which is the
holder of a Mortgage and Note as a result of an assignment thereof, and when a
Mortgage secures
multiple Notes held by one or more note holders, the trustee acting on behalf of
such holders.

                        (o)        "Loan" shall mean a loan made by a Lender to
Landlord secured in whole
or in part by a Mortgage and evidenced by a Note or Notes.

                        (p)        "Mortgage" shall mean a mortgage, deed of
trust, or similar security
instrument now existing or hereafter executed covering the Premises from
Landlord to Lender.

                        (q)        "Net Award" shall mean the entire award
payable to Landlord by reason of
a Condemnation, less any actual and reasonable expenses incurred by Landlord in
collecting such
award.

                        (r)        "Net Proceeds" shall mean the entire proceeds
of any property casualty
insurance required under Paragraph 13(a), less any actual and reasonable
expenses incurred by
Landlord in collecting such proceeds.

                        (s)        "Note" or "Notes" shall mean a promissory
note or notes now or hereafter
executed from Landlord to Lender, which Note or Notes are secured in whole or in
part by a
Mortgage and an assignment of leases and rents.

                        (t)        "Permitted Encumbrances" shall mean:

                                    (i) easements, rights-of-way, servitudes,
other similar reservations, rights
and restrictions and other defects and irregularities in the title to the
Premises, none of which
materially lessens the value of the Premises or materially impairs the use of
the Premises for the
purposes held by Tenant;

                                    (ii) matters set forth in [Schedule B, Part
I] of the owner's title insurance
policy relating to the Premises issued to Landlord in connection with the
purchase of the
Premises, including without limitation that certain Declaration of Covenants,
Conditions and
Restrictions, made July 6, 1987, and recorded in the Official Records of Placer
County on July
10, 1987, at Book 3224 Page 555 ("CC&R's");

                                    (iii) any condemnation right reserved to or
vested in any municipality or
public authority with respect to the Premises or any interest therein; and

                                    (iv) any Liens for Impositions not then
delinquent and any Liens of
mechanics, materialmen and laborers for work or services performed or materials
furnished in
connection with the Premises which are not then overdue or the existence, amount
or validity of
which is being contested by Tenant pursuant to, and as permitted by,
Paragraph 18.

                        (u)        "Purchase Agreement" shall mean that certain
Agreement of Purchase and
Sale by and between Landlord, as buyer, and Tenant, as seller, for the purchase
and sale of the
Premises.

                        (v)        "Requisition" shall mean any temporary
condemnation or confiscation of
the use or occupancy of any of the Premises by any governmental authority, civil
or military,
whether pursuant to an agreement with such governmental authority in settlement
of or under
threat of any such requisition or confiscation, or otherwise.

                        (w)        "Restoration" shall mean the restoration or
repair of the Premises after any
Taking or damage by casualty as nearly as possible to their value, condition and
character
existing immediately prior to such Taking or damage.

                        (x)        "State" shall mean the State in which the
Premises are situated.

                        (y)        "Taking" shall mean any taking of any of the
Premises in or by
condemnation or other eminent domain proceedings pursuant to any law, general or
special, or by
reason of any agreement with any condemnor in settlement of or under threat of
any such
condemnation or other eminent domain proceedings or by any other means, or any
de facto
condemnation, by a duly constituted authority or agency having jurisdiction.

                        (z)        "Taxes" shall mean taxes of every kind and
nature (including real, ad
valorem and personal property, income, franchise, withholding, profits and gross
receipts taxes),
all charges and/or taxes for any easement or agreement maintained for the
benefit of any of the
Premises, all general and special assessments, levies, permits, inspection and
license fees, all
utility charges, all ground rents, and all other public charges and/or taxes
whether of a like or
different nature, even if unforeseen or extraordinary, imposed upon or assessed,
prior to or during
the Term, against Landlord, Lender, Tenant or any of the Premises as a result of
or arising in
respect of the ownership, occupancy, leasing, use, maintenance, operation,
management, repair or
possession thereof, or any activity conducted on the Premises, or the Basic Rent
or Additional
Rent, including without limitation, any gross income tax, sales tax, occupancy
tax or excise tax
levied by any governmental body on or with respect to such Basic Rent or
Additional Rent.

                     (aa)         "Tenant's Trade Fixtures" shall mean all
warehouse storage racking,
warehouse shelving, shelving-supported mezzanine and conveyor systems
(collectively, the
"Racking/Shelving Items"), any counters, cases, shelving, and similar fixtures,
desks, movable
partitions and other office furniture and personal property owned by Tenant and
used in the
operation of the business conducted on the Premises.

                     (bb)         "Term" shall mean the term of this Lease.

                     (cc)         "Termination Date" shall mean the Termination
Date as defined in
Paragraph 12(b).

            2.        Demise of Premises.    Landlord hereby leases, demises and
lets to Tenant and Tenant
hereby takes and leases from Landlord for the Term or terms and upon the
provisions hereinafter
specified the following described property (collectively, the "Premises"): (i)
the premises
described in Exhibit A attached hereto and made a part hereof together with the
easements, rights
and appurtenances thereunto belonging or appertaining (collectively, the
"Land"); (ii) the
buildings, structures, fixtures and other improvements constructed and to be
constructed on the
Land (collectively, the "Improvements"), together with Landlord's Trade
Fixtures, all Alterations
and other additions and accessions thereto, substitutions therefor and
replacements thereof
permitted by this Lease. Pursuant to Section 10.3 of the CC&R's, this Lease is
subject to, and
Tenant shall comply with the provisions of, the Project Documents (as defined in
the CC&R's),
which provisions are an integral part of this Lease.

            3.         Term.    Tenant shall have and hold the Premises for a
term commencing on the date
hereof (the "Commencement Date") and ending upon the date which is the last day
of the twenty-
seventh (27th) month after the Commencement Date (the "Expiration Date").
Notwithstanding
the foregoing, Tenant shall have the right to terminate this Lease, effective
upon the date which is
the last day of the eighteenth (18th) month after the Commencement Date, or
which is the last day
of any succeeding month through the twenty-sixth (26th) month after the
Commencement Date,
upon delivery of at least four (4) months' prior written notice to Landlord of
Tenant's intention
to terminate this Lease. Landlord shall have the right (i) to advertise the
availability of the
Premises for sale or for reletting, and to erect upon the Premises signs
indicating such availability
(provided that such signs do not unreasonably interfere with the use of the
Premises by Tenant),
and (ii) to show the Premises to prospective purchasers or tenants at reasonable
times during
normal business hours upon reasonable notice to Tenant. Provided Tenant is not
in default under
this Lease, if (a) Tenant has delivered to Landlord four (4) months' written
notice of Tenant's
intention to terminate this Lease effective upon a date which is prior to the
last day of the
eighteenth (18th) month after the Commencement Date, (b) Tenant has vacated the
Premises in
accordance with the provisions of this Lease on or prior to the termination date
set forth in such
termination notice, and (c) Landlord has entered into a new lease with a new
tenant for the
Premises with a rent commencement date prior to the last day of the eighteenth
(18th) month
after the Commencement Date (provided that nothing in this Paragraph 3 shall
obligate Landlord
to obtain a new lease or tenant), then this Lease shall terminate upon the rent
commencement
date of the new lease. If the foregoing conditions are not satisfied, Tenant
shall remain obligated
to pay rent through the last day of the eighteenth (18th) month after the
Commencement Date.

            4.        Rent.

                        (a)        Tenant shall pay to Landlord or Lender, if
directed by Landlord, as annual
rent for the Premises during the Term, the amount of One Million Two Hundred
Fifty Thousand
and No/100 Dollars ($1,250,000.00) ("Basic Rent"), subject to adjustment as set
forth below,
which rent shall be paid in advance in equal monthly installments of One Hundred
Four
Thousand One Hundred Sixty-Six and 66/100 Dollars ($104,166.66) commencing on
the
Commencement Date and continuing on the first day of each month thereafter
during the Term
(the said days being called the "Basic Rent Payment Dates"), and shall pay the
same at
Landlord's address set forth below, or at such other place or to such other
person or persons and
in such proportions as Landlord from time to time may designate to Tenant in
writing, in funds
which at the time of such payment shall be legal tender for the payment of
public or private debts
in the United States of America and if required by Lender by wire transfer in
immediately
available federal funds to such account in such bank as Lender shall designate
from time to time.
Pro rata Basic Rent for the period from the Commencement Date to the first day
of the month
next following the Commencement Date shall be paid in advance on the
Commencement Date.
In addition, if Tenant fails to make any payment of Basic Rent or Additional
Rent to Landlord on
the date due, Tenant shall pay a late charge equal to ten percent (10%) of the
amount past due.

                        (b)        If any installment of Basic Rent or
Additional Rent is not paid on the date
due, Tenant shall pay to the party entitled to receive such installment interest
on such overdue
payment at the Default Rate, accruing from the due date of such payment until
the same is paid.

                        (c)        Tenant shall pay and discharge before the
imposition of any fine, lien,
interest or penalty may be added thereto for late payment thereof, as Additional
Rent, all other
amounts and obligations which Tenant assumes or agrees to pay or discharge
pursuant to this
Lease, together with every fine, penalty, interest and cost which may be added
by the party to
whom such payment is due for nonpayment or late payment thereof. In the event of
any failure
by Tenant to pay or discharge any of the foregoing, Landlord and Lender shall
have all rights,
powers and remedies provided herein, by law or otherwise, in the event of
nonpayment of Basic
Rent. Any Additional Rent payable to Landlord shall be paid to the party to whom
Basic Rent is
to be paid.

            5.        Net Lease: True Lease.

                        (a)        It is the intention of the parties hereto
that the obligations of Tenant
hereunder shall be separate and independent covenants and agreements, and that
Basic Rent,
Additional Rent and all other sums payable by Tenant hereunder shall continue to
be payable in
all events, and that the obligations of Tenant hereunder shall continue
unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express
provision of this Lease. This is a net Lease and Basic Rent, Additional Rent and
all other sums
payable hereunder by Tenant shall be paid without notice or demand, and without
setoff,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction
or defense, except as otherwise specifically set forth herein. This Lease shall
not terminate and
Tenant shall not have any right to terminate this Lease during the Term (except
as otherwise
expressly provided herein). Tenant agrees that, except as otherwise expressly
provided herein, it
shall not take any action to terminate, rescind or void this Lease
notwithstanding (i) the
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution,
winding-up or other proceeding affecting Landlord, (ii) the exercise of any
remedy, including
foreclosure, under the Mortgage, (iii) any action with respect to this Lease
(including the
disaffirmance hereof) which may be taken by Landlord under the Federal
Bankruptcy Code or by
any trustee, receiver or liquidator of Landlord or by any court under the
Federal Bankruptcy Code
or otherwise, (iv) the Taking of the Premises or any portion thereof (except as
specifically
provided in Paragraph 12(b) below), (v) the prohibition or restriction of
Tenant's use of the
Premises under any Legal Requirement or otherwise, (vi) the destruction of the
Premises or any
portion thereof, (vii) the eviction of Tenant from possession of the Premises,
by paramount title
or otherwise, or (viii) default by Landlord hereunder or under any other
agreement between
Landlord and Tenant. All costs, expenses and obligations of every kind and
nature whatsoever
relating to the Premises and the appurtenances thereto and the use and occupancy
thereof which
may arise or become due and payable with respect to the period which ends on the
expiration or
earlier termination of the Lease Term in accordance with the provisions hereof
(whether or not
the same shall become payable during the Lease Term or thereafter) shall be paid
by Tenant. It is
the purpose and intention of the parties to this Lease that the Basic Rent due
hereunder shall be
absolutely net to Landlord and that this Lease shall yield, net to Landlord, the
Basic Rent
provided in this Lease. Tenant waives all rights which are not expressly stated
herein, but which
may now or hereafter otherwise be conferred by law to quit, terminate or
surrender this Lease or
any of the Premises, to any setoff, counterclaim, recoupment, abatement,
suspension, deferment,
diminution, deduction, reduction or defense of or to Basic Rent, Additional Rent
or any other
sums payable under this Lease, except as otherwise expressly provided herein,
and for any
statutory lien or offset right against Landlord or its property.

                        (b)        Landlord and Tenant agree that this Lease is
a true lease and does not
represent a financing arrangement. Each party shall reflect the transaction
represented hereby in
all applicable books, records and reports (including income tax filings) in a
manner consistent
with "true lease" treatment rather than "financing" treatment.

                        (c)        Tenant shall pay directly to the proper
authorities charged with the
collection thereof all charges for water, sewer, gas, oil, electricity,
telephone and other utilities or
services used or consumed on the Premises during the Term, whether designated as
a charge, tax,
assessment, fee or otherwise, including, without limitation, water and sewer use
charges and
taxes, if any, all such charges to be paid as the same from time to time become
due. It is
understood and agreed that Tenant shall make its own arrangements for the
installation or
provision of all such utilities and that Landlord shall be under no obligation
to furnish any
utilities to the Premises and shall not be liable for any interruption or
failure in the supply of any
such utilities to the Premises.

            6.        Title and Condition.

                        (a)        The Premises are demised and let subject to
the Permitted Encumbrances
and all Legal Requirements and Insurance Requirements, including any existing
violation of any
thereof, without representation or warranty by Landlord; it being understood and
agreed,
however, that the recital of the Permitted Encumbrances herein shall not be
construed as a revival
of any thereof which for any reason may have expired.

                        (b)        Without limiting the effect of Landlord's
covenant set forth in
Paragraph 8(c), the Landlord makes no, and expressly hereby denies any,
representations or
warranties regarding the condition or suitability of, or title to, the Premises.
Tenant agrees that it
takes the Premises "as is," without any such representation or warranty. The
Premises are leased
to Tenant in their present condition without representation or warranty by
Landlord and subject
to the rights of parties in possession, to the existing state of title and any
state of facts which an
accurate survey or physical inspection might reveal, to all applicable Legal
Requirements now or
hereafter in effect and subject to the Permitted Encumbrances. Tenant has
examined the
Premises and title to the Premises and has found all of the same satisfactory
for all purposes.
Tenant acknowledges that immediately prior to this Lease it owned and occupied
the Premises
and that Tenant is fully familiar with the physical condition of the Premises
and that Landlord
makes no representation or warranty, express or implied, with respect to same.
THE LEASE OF
THE PREMISES IS ON AN "AS IS" BASIS, IT BEING AGREED THAT TENANT WILL
LEASE THE PREMISES IN ITS PRESENT CONDITION, WITH ALL FAULTS.
LANDLORD HEREBY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE RELATIVE TO THE PREMISES OR ANY COMPONENT PART THEREOF.
Tenant acknowledges and agrees that no representations or warranties have been
made by
Landlord, or by any person, firm or agent acting or purporting to act on behalf
of Landlord, as to
(i) the presence or absence on or in the Premises of any particular materials or
substances
(including, without limitation, asbestos, hydrocarbons or hazardous or toxic
substances), (ii) the
condition or repair of the Premises or any portion thereof, (iii) the value,
expense of operation or
income potential of the Premises, (iv) the accuracy or completeness of any
title, survey, structural
report, environmental audit or other information provided to Tenant by any third
party contractor
relative to the Premises (regardless of whether the same were retained or paid
for by Landlord),
or (v) any other fact or condition which has affected or might affect the
Premises or the
condition, repair, value, expense of operation or income potential thereof.
Tenant represents that
the officers of Tenant are knowledgeable and experienced in the leasing of
properties comparable
to the Premises and agrees that Tenant will be relying solely on Tenant's
inspections of the
Premises in leasing the Premises. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN
NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION BY THE LANDLORD OF, AND THE LANDLORD DOES HEREBY
DISCLAIM, ANY AND ALL WARRANTIES BY THE LANDLORD, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PREMISES OR ANY PORTION THEREOF,
WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY
OTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE, AND TENANT
HEREBY ACKNOWLEDGES AND ACCEPTS SUCH EXCLUSION, NEGATION AND
DISCLAIMER.

                        (c)        Landlord hereby conditionally assigns,
without recourse or warranty
whatsoever, to Tenant, all warranties, guaranties and indemnities, express or
implied, and similar
rights which Landlord may have against any manufacturer, seller, engineer,
contractor or builder
in respect of any of the Premises, including, but not limited to, any rights and
remedies existing
under contract or pursuant to the Uniform Commercial Code (collectively, the
"guaranties").
Such assignment shall remain in effect so long as no Event of Default exists
hereunder or until
the termination of this Lease. Landlord shall also retain the right to enforce
any guaranties so
assigned in the name of Tenant upon the occurrence of an Event of Default.
Landlord hereby
agrees to execute and deliver at Tenant's sole cost and expense such further
documents,
including powers of attorney, as Tenant may reasonably request (and which in the
good faith
judgment of Landlord, do not adversely affect a substantial general interest of
Landlord), in order
that Tenant may have the full benefit of the assignment effected or intended to
be effected by this
Paragraph 6. Upon the occurrence of an Event of Default or termination of this
Lease, the
guaranties shall automatically revert to Landlord. The foregoing provision of
reversion shall be
self-operative and no further instrument of reassignment shall be required. In
confirmation of
such reassignment Tenant shall execute and deliver promptly any certificate or
other instrument
which Landlord may request at Tenant's sole cost and expense. Any monies
collected by Tenant
under any of the guaranties after the occurrence of and during the continuation
of an Event of
Default shall be held in trust by Tenant and promptly paid over to Landlord.

                        (d)        Landlord agrees to enter into with Tenant, at
Tenant's expense, such
easements, covenants, waivers, approvals or restrictions for utilities, parking
or other matters as
desirable for operation of the Premises or properties adjacent thereto
(collectively, "Easements")
as requested by Tenant, subject to Lender's and Landlord's approval thereof, not
to be
unreasonably withheld or delayed; provided, however, that no such Easement shall
result in any
diminution in the value or utility of the Premises for its legal use and further
provided that no
such Easement shall render the use of the Premises dependent upon any other
property or
condition the use of the Premises upon the use of any other property or require
payment or
performance by Landlord at any time, each of which Tenant shall certify to
Landlord and Lender
in writing delivered with Tenant's request with respect to such Easement.
Tenant's request shall
also include Tenant's written undertaking acknowledging that Tenant shall remain
liable
hereunder as a principal and not merely as a surety or guarantor notwithstanding
the
establishment of any Easement.

                        (e)        Encroachments. In the event that any
Improvement now or hereafter
constructed shall (i) encroach upon any property, street or right-of-way on or
adjoining the
Premises, (ii) violate the provisions of any restrictive covenant affecting the
Premises, (iii) hinder
or obstruct any easement or right-of-way to which the Premises is subject, or
(iv) impair the
rights of others in, to or under any of the foregoing, then, promptly after
written request of
Landlord, Tenant shall at Tenant's sole cost and expense either (x) obtain valid
and effective
waivers or settlements of all claims, liabilities and damages at Tenant's sole
cost and expense
resulting from each such encroachment, violation, hindrance, obstruction or
impairment, whether
the same shall affect Landlord, Tenant or both, or (y) take such action as shall
be necessary to
remove such encroachment, hindrance or obstruction and to end such violation or
impairment. If
such action is in the form of an Alteration, such Alteration shall conform to
the provisions of
Paragraph 11.

            7.        Payment of Impositions and Additional Obligations;
Compliance with Law.

                        (a)        Impositions. Subject to the provisions of
Paragraph 18, and except as
otherwise provided in this Paragraph 7(a), Tenant shall, before delinquency
thereof, pay and
discharge the following whether the same became due and payable before, on or
after the
Commencement Date (collectively, the "Impositions"): all taxes (including sales,
use, and gross
rental taxes), assessments, levies, fees, water and sewer rents and charges,
utilities and
communications taxes and charges and all other governmental charges, general and
special,
ordinary and extraordinary, foreseen and unforeseen, which are, at any time,
prior to or during the
Term, imposed upon or assessed against (i) the Premises, (ii) any Basic Rent,
Additional Rent or
other sum payable hereunder, (iii) this Lease, the leasehold estate created
hereby, (iv) Landlord,
Lender, or Tenant, as a result of or arising out of the ownership, acquisition,
occupancy, leasing,
use, maintenance, management, repair, possession or operation of the Premises
(including
without limitation, any taxes on revenues, rents, income, awards, proceeds,
capital gains, profits,
excess profits, gross receipts, sales, use, excise and other taxes, duties or
imports whether similar
or not in nature, assessed, levied or imposed against Tenant, Landlord or the
Premises by any
governmental authority). If any assessment may be paid in installments, Tenant
shall have the
option to pay such assessment in installments; in such event, Tenant shall be
liable only for those
installments which become due and payable during the Term. Tenant shall prepare
and file all
tax reports required by governmental authorities which relate to the
Impositions. Tenant shall
upon Landlord's request, deliver to Landlord copies of all receipts for payment
of Impositions.
Landlord shall either request the applicable taxing authority to deliver tax
notices or tax bills
directly to Tenant, or provide Tenant with complete and correct copies of such
tax notices or tax
bills promptly upon Landlord's receipt thereof. Notwithstanding the foregoing,
Impositions will
not include federal, state or local (i) franchise, capital stock or similar
taxes, of Landlord, (ii) net
income, net rental, excess profits or other taxes, of Landlord, or (iii) any
estate, inheritance,
succession, gift, capital levy or similar tax, unless such taxes referred to in
clauses (i) and (ii)
above are in lieu of, or a substitute for, any tax, assessment, levy or charge
which, if it were in
effect on the Commencement Date, would be payable by Tenant under this Lease.
Upon the
expiration or earlier termination of this Lease, Landlord and Tenant shall
prorate any pre-paid
real property taxes applicable to the period after such expiration or
termination date and any
unpaid real property taxes attributable to the period prior to such expiration
or termination date.

                        (b)        Compliance with Law. Subject to the
provisions of Paragraph 18, Tenant
shall at all times comply with and cause the Premises to comply with and conform
to all Legal
Requirements applicable to the Premises or its ownership, occupancy or use,
including those
which require structural, unforeseen or extraordinary changes to the Premises.
Notwithstanding
anything to the contrary in this Lease, Tenant shall not be required to make any
structural
improvements to the Premises required by a change in Legal Requirements in
effect as of the
date of this Lease.

                        (c)        Additional Obligations. Tenant shall pay and
perform all obligations of
Landlord, as the owner of the Premises, that may now or hereafter exist under
any Permitted
Encumbrances or any other matter that would be a Permitted Encumbrance created
by or with the
consent of Tenant.

            8.         Use.

                        (a)        Tenant may use the Premises for any lawful
purpose other than any use
that will (i) have a material adverse effect on the value of the Premises, (ii)
materially increase
the likelihood that Tenant, Landlord or Lender would incur liability under any
provisions of the
Act referred to in Paragraph 27 of this Lease, or (iii) result or give rise to
any material
environmental deterioration or degradation of the Premises. In no event shall
the Premises be
used for any purpose which shall violate any of the provisions of any recorded
covenants,
restrictions or agreements applicable to the Premises. Tenant agrees that with
respect to any such
recorded covenants, restrictions or agreements, Tenant shall observe, perform
and comply with
and carry out the provisions thereof required therein to be observed and
performed by Landlord.

                        (b)        Subject to Tenant's rights of contest under
Paragraph 18 hereof, Tenant
shall not permit any unlawful occupation, business or trade to be conducted on
any of the
Premises or any use to be made thereof contrary to applicable Legal Requirements
or Insurance
Requirements. Subject to Tenant's rights of contest under Paragraph 18 hereof,
Tenant shall not
use, occupy or permit any of the Premises to be used or occupied, nor do or
permit anything to be
done in or on any of the Premises, in a manner which would (i) violate any
certificate of
occupancy or equivalent certificate affecting any of the Premises, (ii) make
void or voidable any
insurance which Tenant is required hereunder to maintain then in force with
respect to any of the
Premises, (iii) affect in any manner the ability of Tenant to obtain any
insurance which Tenant is
required to furnish hereunder, (iv) cause any injury or damage to any of the
Improvements unless
pursuant to Alterations permitted under Paragraph 11 hereof, or (v) constitute a
public or private
nuisance or waste.

                        (c)        Subject to all of the provisions of this
Lease, so long as no Event of
Default exists hereunder, Landlord covenants that neither it nor any party
claiming by, through or
under it, shall do any act to disturb the peaceful and quiet occupation and
enjoyment of the
Premises by Tenant. Landlord may enter upon and examine any of the Premises at
reasonable
times after reasonable notice and during business hours without notice and
exercise any rights
and privileges granted to Landlord under the provisions of this Lease.

            9.        Maintenance and Repair.

                        (a)        Except for any alterations that Tenant is
permitted to make hereunder,
Tenant shall at all times, including any Requisition period, put, keep and
maintain the Premises,
including, without limitation, the roof, roof membrane, landscaping, walls
(interior and exterior),
footings, foundations, parking lots, plumbing, conveyor systems and structural
and non-structural
components of the Premises, and the Adjoining Property, in good repair and
appearance, and
shall promptly make all repairs and replacements (substantially equivalent in
quality and
workmanship to the original work) of every kind and nature, whether foreseen or
unforeseen,
which may be required to be made upon or in connection with any of the Premises
in order to
keep and maintain the Premises in as good repair and appearance as they were as
of the
Commencement Date, except for ordinary wear and tear. Notwithstanding the
foregoing, Tenant
shall not be required to make structural repairs or structural replacements to
the Improvements,
the Land or Landlord's Trade Fixtures, unless such repair or replacement is
needed because of
Tenant's act or failure to maintain such items. Tenant shall not be required to
maintain the
Racking/Shelving Items in the Premises in the same condition as at the
Commencement Date;
provided, however, that Tenant shall make any structural repairs or structural
replacements
necessary to the Racking/Shelving Items so that the system is operable for its
intended purpose.
Tenant shall do or cause others to do all that is necessary to plow or otherwise
remove any and
all accumulated snow from the Premises and Adjoining Property and keep both in
safe condition.
Tenant shall do or cause others to do all shoring of the Premises or Adjoining
Property or of
foundations and walls of the Improvements and every other act necessary or
appropriate for
preservation and safety thereof, by reason of or in connection with any
excavation or other
building operation upon any of the Premises or Adjoining Property, whether or
not Landlord
shall, by reason of any Legal Requirements or Insurance Requirements, be
required to take such
action or be liable for failure to do so. Landlord shall not be required to make
any repair,
whether foreseen or unforeseen, or to maintain any of the Premises or Adjoining
Property in any
way, and Tenant hereby expressly waives the right to make repairs at the expense
of the
Landlord, which right may otherwise be provided for in any law now or hereafter
in effect.
Nothing in the preceding sentence shall be deemed to preclude Tenant from being
entitled to
insurance proceeds or condemnation awards for Restoration pursuant to the terms
of this Lease.
Tenant shall, in all events, make all repairs for which it is responsible
hereunder promptly, but in
no event longer than thirty (30) days after a repair or replacement becomes
prudent, and all
repairs shall be in a good, proper and workmanlike manner, and diligently
pursued to completion.

                        (b)        If Tenant shall be in default under any of
the provisions of this
Paragraph 9, Landlord or Lender may, after thirty (30) days' notice to Tenant
and failure of
Tenant to commence to cure during said period or to diligently prosecute such
cure to completion
once begun, but immediately upon notice in the event of an emergency (that is,
imminent danger
of injury to persons or property), do whatever is necessary to cure such default
as may be
reasonable under the circumstances for the account of and at the expense of
Tenant. In the event
of an emergency, before Landlord may avail itself of its rights under this
Paragraph 9(b),
Landlord shall send notice to Tenant of the situation by telephone or other
available
communication. All actual and reasonable costs and expenses (including, without
limitation,
reasonable attorneys' fees and expenses) so incurred by Landlord or Lender,
together with
interest thereon at the Default Rate from the date of payment or incurring the
expense, shall
constitute Additional Rent payable by Tenant under this Lease and shall be paid
by Tenant to
Landlord or Lender (as applicable) on demand. Tenant agrees that, in the event
of an emergency,
expenditures which might otherwise be unreasonable (such as overtime) may
nevertheless be
reasonable under the circumstances.

                        (c)        Tenant shall from time to time replace with
other similar operational
equipment or parts any of the mechanical systems or other equipment included in
the
Improvements which shall have become worn out, obsolete or unusable for the
purpose for which
it is intended, been taken by a Condemnation as provided in Paragraph 12, or
been lost, stolen,
damaged or destroyed as provided in Paragraph 14. Tenant shall repair at its
sole cost and
expense all damage to the Premises caused by the removal of equipment or any
other personal
property of Tenant at any time, including upon expiration or termination of the
Lease.

            10.        Liens.    Tenant will promptly remove and discharge any
charge, lien, security
interest or encumbrance upon the Premises or any Basic Rent, Additional Rent or
other sums
payable hereunder which arise for any reason, including all liens which arise
out of the
possession, use, occupancy, construction, repair or rebuilding of the Premises
or by reason of
labor or materials furnished or claimed to have been furnished to Tenant or for
the Premises, but
not including (i) the Permitted Encumbrances, and (ii) any mortgage, charge,
lien, security
interest or encumbrance created by Landlord on or after the Commencement Date
without the
consent of Tenant. Nothing contained in this Lease shall be construed as
constituting the consent
or request of Landlord, express or implied, to or for the performance by any
contractor, laborer,
materialmen, or vendor of any labor or services or for the furnishing of any
materials for any
construction, alteration, addition, repair or demolition of or to the Premises
or any part thereof
which would result in any liability of the Landlord for payment thereof. Notice
is hereby given
that Landlord will not be liable for any labor, services or materials furnished
or to be furnished to
Tenant, or to anyone holding an interest in the Premises or any part thereof
through or under
Tenant, and that no mechanic's or other liens for any such labor, services or
materials shall attach
to or affect the interest of Landlord in and to the Premises.

            11.        Alterations.    Tenant shall not make any Alterations
which would diminish the value
of the Premises or adversely affect any building systems or equipment. Tenant
may make any
other Alterations without the prior written consent of the Landlord provided:
(i) such Alterations
comply with all of the provisions of the following sentence and (ii) such
Alterations are
nonstructural. All Alterations shall be performed in a good and workmanlike
manner, and shall
be expeditiously completed in compliance with all Legal Requirements. All work
done in
connection with any such Alteration shall comply with all Insurance
Requirements. Tenant shall
promptly pay all costs and expenses of any such Alteration, and shall discharge
all liens filed
against any of the Premises arising out of the same. Tenant shall procure and
pay for all permits
and licenses required in connection with any such Alteration. All such
Alterations shall be the
property of Landlord and shall be subject to this Lease. All structural
Alterations and any
Alteration the estimated cost of which in any one instance exceeds Fifty
Thousand Dollars
($50,000.00) shall be made under the supervision of a licensed architect or
engineer in
accordance with detailed plans and specifications which shall be submitted to
Landlord and
Lender at least twenty (20) days prior to the commencement of the Alterations.
Upon completion
of any structural Alteration or one in excess of Fifty Thousand Dollars
($50,000.00) Tenant will
provide as-built plans and specifications or record drawings to Landlord and
Lender.

            12.        Condemnation.

                        (a)        Immediately upon obtaining knowledge of the
institution of any
proceeding for Condemnation, Tenant shall notify Landlord and Lender thereof and
Landlord and
Lender shall be entitled to participate in any Condemnation proceeding at their
own expense.
Landlord and Lender, immediately upon obtaining knowledge of the institution of
any
proceeding for Condemnation, shall notify Tenant thereof and Tenant shall have
the right to
participate in such proceedings at its own expense. Subject to the provisions of
this Paragraph 12
and Paragraph 15, Tenant hereby irrevocably assigns to Lender or to Landlord, in
that order, any
award or payment in respect of any Condemnation of Tenant's interest in the
Premises, except
that nothing in this Lease shall be deemed to require (i) the assignment to
Landlord or Lender of
any award or payment on account of Tenant's Trade Fixtures, or other tangible
personal property,
moving expenses and similar claims, if available, to the extent Tenant shall
have a right to make
a separate claim therefor against the condemnor or (ii) any act or circumstance
that impairs
Tenant's right to any such award or payment; it being agreed, however, that
Tenant shall in no
event be entitled to any payment that reduces the award to which Landlord is or
would be entitled
for the condemnation of Landlord's interest in the Premises.

                        (b)        If (i) the entire Premises or (ii) at least
fifty percent (50%) of the Land or
the building constructed on the Land, the loss of which even after Restoration
would, in Tenant's
reasonable business judgment, be substantially and materially adverse to the
business operations
of Tenant, shall be the subject of a Taking, then Tenant shall have the right
to, not later than sixty
(60) days after a Taking has occurred, serve notice upon Landlord ("Tenant's
Termination
Notice") of its intention to terminate this Lease on any Basic Rent Payment Date
specified in
such notice, which date (the "Termination Date") shall be no sooner than the
first Basic Rent
Payment Date occurring at least thirty (30) days after the date of Tenant's
Termination Notice
and not later than the third Basic Rent Payment Date occurring after the date of
Tenant's
Termination Notice.

            In the event that Tenant shall serve Tenant's Termination Notice
upon Landlord, this
Lease and the Term hereof shall terminate on the Termination Date. In such event
the entire
award made in Condemnation proceeding shall be paid to Lender, or to Landlord,
in that order.

                        (c)        In the event of any Condemnation of part of
the Premises which does not
result in a Termination of this Lease, subject to the requirements of
Paragraph 15, the Net Award
of such Condemnation shall be retained by Landlord or Lender and, promptly after
such
Condemnation, Landlord shall commence and diligently continue to perform the
Restoration, but
only to the extent of that portion of the Net Award designated for such work.

            In the event of a Requisition of any of the Premises, Landlord shall
apply the Net Award
of such Requisition, to the extent available, to the installments
(proportionately in the same ratio
of the Premises taken to the otherwise whole Premises) of Basic Rent, Additional
Rent or other
sums payable by Tenant hereunder thereafter payable and Tenant shall pay the
balance remaining
thereafter. Upon the expiration of the Term, any portion of such Net Award that
shall not
previously have been credited to Tenant on account of the Basic Rent and
Additional Rent shall
be retained by Landlord or Lender.

                        (d)        No agreement with any condemnor in settlement
of or under threat of any
Condemnation shall be made by Tenant without the written consent of Landlord and
of Lender, if
the Premises are then subject to a Mortgage, which consent shall not be
unreasonably withheld or
delayed provided such award or payment is applied in accordance with this Lease.

            13.        Insurance.

                        (a)        Type of Insurance. Tenant shall maintain at
its sole cost and expense the
following insurance on the Premises:

                                    (i)        Special Form property insurance
(including flood insurance and
earthquake insurance each to the extent applicable and/or required by Lender;
provided, however,
that the limit of any such earthquake insurance policy shall not be greater than
$5,000,000)
against all risk of direct physical loss or damage to the Improvements in
amounts not less than
the full replacement cost of the Improvements, if the same are actually
replaced, or actual cash
value (replacement cost minus depreciation) if the same are not replaced,
excluding footings and
foundations and other parts of the Improvements which are not insurable, with an
"Amendment
of the Pollution Exclusion Endorsement" for damage caused by heat, smoke, or
fumes from a
hostile fire. Tenant shall also obtain: (i) business interruption or rental
interruption insurance, as
requested by Landlord, in an amount equal to one hundred percent (100%) of the
Basic Rent and
Additional Rent for a period of no less than eighteen (18) months and shall make
any proceeds
therefrom available to Landlord and Lender, and (ii) ordinance and law coverage,
including, but
not limited to, for extra costs and/or loss of value to the Premises because of
any changes in
building codes.

                                    (ii)        Commercial General Liability
insurance against claims for bodily
injury, death or property damage occurring on, in, or about the Premises, which
insurance shall:
(i) be written on a so-called "occurrence basis," with combined single limit
coverage of not less
than Ten Million Dollars ($10,000,000.00), or in such increased limits as
Landlord may
reasonably request from time to time and (ii) include premises and operations
liability coverage,
products and completed operations liability coverage, blanket contractual
liability coverage,
including, to the maximum extent possible, coverage for the indemnification
obligations of
Tenant under this Lease, a "severability of interest" clause or endorsement
which precludes the
insurer from denying the claim of Tenant or Landlord because of the negligence
or other acts of
the other, and personal and advertising injury coverage. Policies for such
insurance shall be for
the mutual benefit of Landlord, Tenant and any Lender.

                                    (iii)        Workers' compensation insurance
covering all persons employed in
connection with any work done on or about the Premises (or in lieu of such
workers'
compensation insurance, a program of self-insurance complying with the rules,
regulations and
requirements of the appropriate agency of the State), including employer's
liability coverage with
limits of at least Five Hundred Thousand Dollars ($500,000.00) with "stop gap"
and "all states"
endorsements.

                                    (iv)        Any other insurance coverage
that is customarily carried by owners
or tenants of similar properties in the same geographic area and engaged in
businesses similar to
Tenant's business or that may from time to time be reasonably required by
Landlord or by Lender
in order to protect their respective interests.

                        (b)        Insurance Requirements. The insurance
required by Paragraph 13(a) shall
be written by companies, licensed to do business in the State, of recognized
financial standing
which are rated A- or better by A. M. Best Company or A3 or better by Moody's
Investors
Services, in either case with asset size rating of "VIII" or better by A. M.
Best Company. The
insurance shall (i) be for a term of not less than twelve (12) months; (ii) be
in amounts sufficient
at all times to satisfy any co-insurance requirements thereof; (iii) provide an
"Additional Insured-
Managers or Lessors of Premises Endorsement"; (iv) provide that the insurance
company has the
duty to defend all insureds under the policy; (v) provide that defense costs are
paid in addition to
and do not deplete any of the policy limits; (vi) (except for the workers'
compensation insurance
referred to in Subparagraph 13(a)(iii) above) name Landlord, Tenant, and any
Lender as insured
parties as their respective interests may appear; (vii) provide that such
insurance cannot be
canceled, invalidated, or suspended on account of the conduct of Tenant, its
officers, directors,
employees, or agents; (viii) provide that any "no other insurance" clause in the
insurance policy
shall exclude any policies of insurance maintained by Landlord and the insurance
policy shall not
be brought into contribution with insurance maintained by Landlord; (ix) provide
that the policy
of insurance shall not be terminated, canceled or substantially modified without
at least thirty
(30) days' prior written notice to Landlord, Lender and to any other lender
covered by any
standard mortgage clause endorsement; (x) provide that the insurer shall not
have the option to
restore the Premises if Landlord elects to terminate this Lease in accordance
with the terms
hereof; (xi) provide that the interests of Landlord and Lender shall not be
invalidated by any
action or inaction of the Landlord, Tenant, or any other person, and such
insurance shall insure
the Lender regardless of any breach or violation by the Tenant, the Landlord, or
any other person
of any warranties, declarations, or conditions contained in the policies
relating to such insurance
or application therefore; and (xii) provide that all insurance proceeds payable
under any policy of
property, sprinkler, or flood insurance with respect to the Premises shall be
paid to Lender as sole
loss payee under a standard mortgagee clause (or if no Lender exists, to
Landlord). If said
insurance or any part thereof shall expire, be withdrawn, become void by breach
of any condition
thereof by Tenant, or become void or unsafe by reason of the failure or
impairment of the capital
of any insurer, or if for any other reasonable cause said insurance shall become
unsatisfactory to
Landlord or Lender, Tenant shall promptly obtain new or additional insurance
satisfactory to
Landlord and Lender. Tenant shall provide Landlord with certificates of
insurance (ACORD
Form 27) of all such insurance policies; provided, however, that upon the
occurrence of any
event insured by such an insurance policy, or if otherwise required by Lender,
Tenant shall
provide Landlord with a copy of such insurance policy.

                        (c)        Each insurance policy referred to above
shall, to the extent applicable,
contain standard non-contributory mortgagee clauses in favor of any Lender. As
evidence of the
insurance specified in Paragraph 13(a)(i), required to be maintained by Tenant,
Tenant shall
deliver to Landlord an ACORD 27 Evidence of Property Insurance or other
certificate providing
at least the same assurances (or, if limited by Legal Requirements, then a
certificate providing as
many of the same assurances as allowed by applicable law). As evidence of the
insurance
specified in Paragraph 13(a)(ii) and (iii), required to be maintained by Tenant,
Tenant shall
deliver to Landlord an ACORD 25 Certificate of Insurance or other certificate
providing at least
the same assurances. The coverage provided by Tenant in respect of each policy
shall also
provide that any loss otherwise payable thereunder shall be payable
notwithstanding (i) any act or
omission of Landlord, Lender or Tenant which might, absent such provision,
result in a forfeiture
of all or a part of such insurance payment, (ii) the occupation or use of any of
the Premises for
purposes more hazardous than permitted by the provisions of such policy, (iii)
any foreclosure or
other action or proceeding taken by any Lender pursuant to any provision of the
Mortgage upon
the happening of an event of default therein, or (iv) any change in title or
ownership of any of the
Premises.

                        (d)        Tenant shall pay as they become due all
premiums for the insurance
required by this Paragraph 13, shall renew or replace each policy prior to the
expiration date
stated on the policy then in effect, and shall deliver to Landlord and Lender
the appropriate
assurances for such renewals or replacements in accordance with the provisions
of this
Paragraph 13(d) before expiration of the then-effective coverage. In the event
of Tenant's failure
to comply with any of the foregoing requirements of this Paragraph 13 within
five (5) days of
written notice from Landlord, Landlord or Lender shall be entitled to procure
such insurance.
Any sums expended by Landlord or Lender, as the case may be, in procuring such
insurance shall
be Additional Rent and shall be repaid by Tenant, together with interest thereon
at the Default
Rate, from the time of payment by Landlord or Lender, as the case may be, until
fully paid by
Tenant immediately upon written demand therefor by Landlord or Lender, as the
case may be.

                        (e)        Anything in this Paragraph 13 to the contrary
notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 13(a) may be
carried under a
"blanket" policy or policies covering other properties or liabilities of Tenant,
provided that such
"blanket" policy or policies otherwise comply with the provisions of this
Paragraph 13. In the
event any such insurance is carried under a blanket policy, Tenant shall deliver
to Landlord and
Lender a certified copy of those provisions of the blanket policy that pertain
to the Premises, if
any, to evidence the issuance and effectiveness of the policy, the amount and
character of the
coverage with respect to the Premises and the presence in the policy of
provisions of the
character required in the above sections of this Paragraph 13.

                        (f)        With respect to any risk covered by property
damage insurance, except for
any obligations arising under this Lease, Landlord and Tenant hereby waive any
rights each may
have against the other on account of any loss or damage occasioned to Landlord
or to Tenant, as
applicable, their respective property, the Improvements, or their contents, or
to other
improvements, to the extent of any insurance proceeds received by the waiving
party for such
loss or damage. The parties each, on behalf of their respective insurance
companies insuring the
property of either Landlord or Tenant against any such loss, waive any right of
subrogation that
they may have against Landlord or Tenant, as applicable. 

            14.        Damage, Destruction.

                        (a)        In the event of any casualty loss exceeding
Ten Thousand Dollars
($10,000.00), Tenant shall give Landlord and Lender immediate notice thereof.
Tenant shall
adjust, collect and compromise any and all such claims, with the consent of
Lender and Landlord,
not to be unreasonably withheld or delayed, and Landlord and Lender shall have
the right to join
with Tenant therein. All proceeds of any insurance shall be paid to a Trustee
which shall be a
federally insured bank or other financial institution, selected by Landlord and
Tenant and
reasonably satisfactory to Lender (the "Trustee"). If the Premises shall be
covered by a
Mortgage, Lender, if it so desires, shall be the Trustee. Each insurer is hereby
authorized and
directed to make payment under said policies directly to such Trustee instead of
to Landlord and
Tenant jointly, and Tenant hereby appoints such Trustee as Tenant's
attorney-in-fact to endorse
any draft therefor for the purposes set forth in this Lease after approval by
Tenant of such
Trustee, if Trustee is other than Lender, such approval not to be unreasonably
withheld or
delayed.

                        (b)        In the event of any casualty (whether or not
insured against) resulting in
damage to (i) the entire Premises or (ii) at least fifty percent (50%) of the
Premises, the loss of
which even after Restoration would, in Tenant's reasonable business judgment, be
substantially
and materially adverse to the business operations of Tenant, Tenant shall have
the right, not later
than sixty (60) days after such casualty has occurred, to serve a Tenant's
Termination Notice
upon Landlord. If Tenant shall serve a Tenant's Termination Notice upon
Landlord, this Lease
shall terminate on the Termination Date, which shall be as set forth in
Paragraph 12(b), specified
in such Termination Notice; however, Tenant shall assign and make available to
Landlord all
insurance proceeds for such casualty and pay to Landlord any deductible
therefor, before any
such Termination becomes effective. If this Lease is not terminated pursuant to
this Paragraph
14(b), Landlord shall commence and diligently continue to perform the
Restoration to the
Premises. Tenant shall be responsible for any deductible under any insurance
required under
Paragraph 13. Upon the Trustee's receipt of the entire proceeds of any insurance
required under
Paragraph 13, together with any self-insurance payment required of Tenant, less
any expenses
incurred by Landlord, Tenant, or any Lender in collecting such proceeds or
payment ("Net
Proceeds"), the Trustee shall, to the extent available, make the Net Proceeds
available to
Landlord for Restoration, in accordance with the provisions of Paragraph 15.

                        (c)        In the event that any damage or destruction
shall occur at such time as
Tenant shall not have maintained third-party insurance in accordance with
Paragraph 13(a)(i),
Tenant shall pay to the Trustee the amount of the proceeds that would have been
payable had
such insurance program been in effect (the "Tenant Insurance Payment").

            15.        Restoration.    The Net Proceeds and Tenant Insurance
Payment (the aggregate of
which and any interest being herein defined as the "Restoration Fund") paid to
the Trustee shall
be disbursed by the Trustee to Landlord. Landlord shall only be obligated to
restore the Premises
to the extent of the funds Landlord receives from the Restoration Fund. Any sum
in the
Restoration Fund which remains in the Restoration Fund upon the completion of
Restoration
shall be paid to Tenant. 

            16.        Subordination to Financing.

                        (a)        Subject to the following provisions of this
Paragraph 16(a), Tenant agrees
that this Lease shall, upon Landlord's and Lender's (if any) written request, be
subject and
subordinate to the lien of any Mortgage, and Tenant agrees, upon demand, without
cost, to
execute instruments as may be required to further effectuate or confirm such
subordination. So
long as no Event of Default shall be outstanding, Tenant's tenancy shall not be
disturbed, nor
shall this Lease be affected by any default under such Mortgage, and in the
event of a foreclosure
or other enforcement of any such Mortgage, or sale in lieu thereof, the
purchaser at such
foreclosure sale shall be bound to Tenant for the Term of this Lease and any
extensions thereof,
the rights of Tenant hereunder shall expressly survive, and this Lease shall in
all respects
continue in full force and effect so long as no Event of Default by Tenant has
occurred and is
continuing. So long as no Event of Default by Tenant has occurred and is
continuing, Tenant
shall not be named as a party defendant in any such foreclosure suit, except as
may be required
by law.

                        (b)        Notwithstanding the provisions of subdivision
(a) of this Paragraph 16, the
holder of the Mortgage to which this Lease is subject and subordinate, as
provided in said
subdivision (a), shall have the right, at its sole option, at any time, to
subordinate and subject the
Mortgage, in whole or in part, to this Lease by recording a unilateral
declaration to such effect.

                        (c)        At any time prior to the expiration of the
Term, Tenant agrees, at the
election and upon demand of any owner of the Premises, or of Lender who has
granted non-
disturbance to Tenant pursuant to Paragraph 16(a) above, to attorn, from time to
time, to any
such owner or Lender, upon the then executory terms and conditions of this
Lease, for the
remainder of the term originally demised in this Lease and for any renewal term,
provided that
such owner or Lender shall then be entitled to possession of the Premises
subject to the
provisions of this Lease. The provisions of this subdivision (c) shall enure to
the benefit of any
such owner or Lender, shall apply notwithstanding that, as a matter of law, this
Lease may
terminate upon the foreclosure of the Mortgage, shall be self-operative upon any
such demand,
and no further instrument shall be required to give effect to said provisions.

                        (d)        Tenant and Landlord agree that, if requested
by the other, each shall,
 without charge, enter into (i) a subordination, non-disturbance and attornment
agreement
reasonably requested by Lender, provided such agreement contains provisions
relating to non-
disturbance in accordance with the provisions of subparagraph (a), and (ii) an
agreement with
Lender whereby Tenant shall agree for the benefit of Lender that Tenant will
not, without in each
case the prior written consent of Lender, (a) amend, modify, cancel or surrender
the term of this
Lease except as expressly permitted by the provisions of this Lease, or enter
into any agreement
with Landlord so to do, or (b) pay any installment of Basic Rent more than one
(1) month in
advance of the due date thereof or otherwise than in the manner provided for in
this Lease.

                        (e)        At any time after Landlord has advised Tenant
of the existence of a
"Lender" hereunder, and before such Lender has confirmed to Tenant that the lien
of its
Mortgage has been released, Tenant shall not (and shall not be obligated, even
upon the request
of Landlord, to) execute any agreement or document purporting to subordinate
this Lease to the
lien of any mortgage or deed of trust other than the Mortgage held by Lender.

            17.        Assignment, Subleasing.

                        (a)        Tenant is currently in occupancy and is
operating its business at the
Premises. Tenant may not assign its interest in this Lease or sublease any
portion(s) of the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably
withheld or delayed. No sublease under, or assignment or other transfer of, this
Lease shall
relieve Tenant of its obligations hereunder, which shall continue as the
obligations of a principal
and not as the obligations of a surety or a guarantor. The joint and several
liability of Tenant
named herein and any immediate and remote successor in interest of Tenant (by
assignment or
otherwise), and the due performance of the obligations of this Lease on Tenant's
part to be
performed or observed, shall not in any way be discharged, released or impaired
by any (i)
agreement which modifies any of the rights or obligations of the parties under
this Lease, (ii)
stipulation which extends the time within which an obligation under this Lease
is to be
performed, (iii) waiver of the performance of an obligation required under this
Lease, or (iv)
failure to enforce any of the obligations set forth in this Lease, unless in
each case, the same has
been consented to by Landlord and Lender.

                        (b)        Each sublease of the Premises or any part
thereof shall be subject and
subordinate to the provisions of this Lease. Tenant agrees that in the case of
an assignment,
Tenant shall, not less than ten (10) days prior to the execution and delivery of
any such
assignment as described in this Paragraph 17(b), give notice of such assignment
to Landlord.
Tenant further agrees that in the case of such assignment, Tenant shall, within
fifteen (15) days
after the execution and delivery of any such assignment, deliver to Landlord (i)
a duplicate
original of such assignment in recordable form and (ii) an agreement executed
and acknowledged
by the assignee in recordable form wherein the assignee shall agree to assume
and agree to
observe and perform all of the terms and provisions of this Lease on the part of
the Tenant to be
observed and performed from and after the date of such assignment, and, in the
case of a
sublease, Tenant shall, within fifteen (15) days after the execution and
delivery of such sublease,
deliver to Landlord a duplicate original of such sublease.

                        (c)        Upon the occurrence of an Event of Default
under this Lease, Landlord
shall have the right to collect and enjoy all rents and other sums of money
payable under any
sublease of any of the Premises, and Tenant hereby irrevocably and
unconditionally assigns all
rights under any such sublease including rents and money to Landlord, which
assignment may be
exercised upon and after (but not before) the occurrence of an Event of Default.

                        (d)        Any sublease shall provide that upon notice
from Landlord and Lender of
an Event of Default, all rent due under such sublease shall be paid as so
directed. In no event
shall Landlord or Lender have the right to direct the payment of sublease rents
to any party other
than Tenant except in an aggregate amount equal to or less than the aggregate
amounts due
hereunder.

            18.        Permitted Contests.    Notwithstanding any provision of
this Lease to the contrary,
after prior written notice to Landlord and Lender and provided Landlord shall
not have elected to
terminate this Lease as a result of an Event of Default, Tenant shall not be
required to (i) pay any
Tax, (ii) comply with any Legal Requirement, or (iii) discharge or remove any
lien, so long as
Tenant shall contest, in good faith and at its expense, the existence, the
amount or the validity
thereof, the amount of the damages caused thereby, or the extent of its or
Landlord's liability
therefor, by appropriate proceedings which shall operate during the pendency
thereof to prevent
(v) the collection of, or other realization upon, the Tax or lien so contested,
(w) the sale,
forfeiture or loss of any of the Premises, any Basic Rent or any Additional Rent
to satisfy the
same or to pay any damages caused by the violation of the same, (x) any
interference with the use
or occupancy of any of the Premises, (y) any interference with the payment of
any Basic Rent or
any Additional Rent, and (z) the cancellation of any fire or other insurance
policy. In no event
shall Tenant pursue any contest with respect to any Tax, Legal Requirement, or
lien referred to
above in such manner that exposes Landlord, Tenant or Lender to any criminal
liability, penalty
or sanction or material civil liability for which Tenant has not made provisions
reasonably
acceptable to Landlord and Lender. Tenant shall be deemed to have made
provisions reasonably
acceptable to Landlord and Lender if Tenant shall have provided Lender or
Landlord in that order
as security for such contest, an amount of cash or bond equal to one hundred
twenty-five percent
(125%) of the amount being contested, or other security satisfactory in the
reasonable opinion of
Lender or Landlord in that order, in assuring the payment, compliance,
discharge, removal or
other action, including all costs, attorneys' fees, interest and penalties, in
the event that the
contest is unsuccessful. While any such proceedings are pending and the required
security is
held by Lender or Landlord, in that order, Lender or Landlord, as the case may
be, shall not have
the right to pay, remove or cause to be discharged the Tax, Legal Requirement or
lien thereby
being contested unless Landlord or Lender reasonably believes that any one or
more of the
conditions in subdivisions (v) through (z) shall not be prevented during the
pendency of the
contest. Tenant further agrees that each such contest shall be promptly and
diligently prosecuted
to a final conclusion, except that Tenant shall, so long as all of the
conditions of the first sentence
of this Paragraph 18 are at all times complied with, have the right to attempt
to settle or
compromise such contest through negotiations. Tenant shall pay any and all
judgments, decrees
and costs (including all attorneys' fees and expenses) in connection with any
such contest and
shall, promptly after the final determination of such contest, fully pay and
discharge the amounts
which shall be levied, assessed, charged or imposed or be determined to be
payable therein or in
connection therewith, together with all penalties, fines, interest, costs and
expenses thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed
as a result thereof.

            19.        Default.    The occurrence of any one or more of the
following events shall constitute
an Event of Default under this Lease:

                        (a)        Tenant's failure to make any payment of Basic
Rent, Additional Rent or
other sum herein required to be paid by Tenant when due which continues
unremedied for a
period of three (3) business days after notice thereof from Landlord or Lender;
provided,
however, that neither Landlord nor Lender shall have any obligation to give
Tenant notice of
such failure if Landlord or Lender has given such notice to Tenant three (3)
times in any
consecutive twelve (12) month period.

                        (b)        An event occurs which is described in
Paragraph 21 (Bankruptcy;
Insolvency) or Tenant causes, or gives cause for, the institution of any
bankruptcy or receivership
proceedings as are described in Paragraph 21.

                        (c)        The estate or interest of Tenant in any of
the Premises shall be levied upon
or attached in any proceeding and such estate or interest is about to be sold or
transferred or such
process shall not be vacated or discharged within forty-five (45) days after
such levy or
attachment.

                        (d)        A default occurs pursuant to the Purchase
Agreement.

                        (e)        Tenant's failure to duly perform and observe,
or Tenant's violation or
breach of, any other provision hereof not identified in (a) through (d) above,
if such failure shall
continue for a period of thirty (30) days after notice thereof from Landlord or
Lender, or if such
failure cannot be cured within such period of thirty (30) days, such period
shall be extended for
such longer time as reasonably necessary provided that Tenant has commenced to
cure such
default within said period of thirty (30) days and is actively, diligently and
in good faith
proceeding with continuity to remedy such failure.

            20.        Landlord's Remedies.    After the occurrence of an Event
of Default by Tenant,
Landlord shall have the right to exercise the following remedies:

                        (a)        Landlord may, at its option, continue this
Lease in full force and effect,
without terminating Tenant's right to possession of the Premises, in which event
Landlord shall
have the right to collect Basic Rent and all other rent and charges when due. In
the alternative,
Landlord shall have the right to peaceably re-enter the Premises on the terms
set forth in
subparagraph (b) below, but without such re-entry being deemed a termination of
the Lease or an
acceptance by Landlord of a surrender thereof. Landlord shall also have the
right, at its option,
from time to time, without terminating this Lease, to relet the Premises, or any
part thereof, with
or without legal process, as the agent, and for the account, of Tenant upon such
terms and
conditions as Landlord may deem advisable in its sole and absolute discretion
(which terms may
be materially different from the terms of this Lease), in which event the rents
received on such
reletting shall be applied (i) first to the reasonable and actual expenses of
such reletting and
collection, including without limitation necessary renovation and alterations of
the Premises,
reasonable and actual attorneys' fees and any reasonable and actual real estate
commissions paid,
and (ii) thereafter toward payment of all sums due or to become due Landlord
hereunder. If a
sufficient amount to pay such expenses and sums shall not be realized or
secured, then Tenant
shall pay Landlord any such deficiency monthly, and Landlord may bring an action
therefor as
such monthly deficiency shall arise. Landlord shall not, in any event, be
required to pay Tenant
any sums received by Landlord on a reletting of the Premises in excess of the
rent provided in
this Lease, but such excess shall reduce any accrued present or future
obligations of Tenant
hereunder. Landlord's re-entry and reletting of the Premises without termination
of this Lease
shall not preclude Landlord from subsequently terminating this Lease as set
forth below.

                        (b)        Landlord may terminate this Lease by written
notice to Tenant specifying a
date therefor, and this Lease shall then terminate on the date so specified as
if such date had been
originally fixed as the expiration date of the Term. In the event of such
termination, Landlord
shall be entitled to recover from Tenant the worth at the time of the award of
all of the following:

                                    (i)        Any obligation which has accrued
prior to the date of termination,
plus

                                    (ii)        The amount of unpaid Basic Rent
and all other charges which
would have accrued after termination until the time of award.

                                    (iii)        The amount of unpaid rent for
the balance of the Term (excluding
any option periods or portions thereof not previously exercised).

            As used in this Paragraph 20(b) the term, "worth at the time of the
award," shall be
computed by allowing simple interest at the Default Rate for past due
obligations, and using a
discount rate equal to the federal discount rate per annum on anticipated future
obligations, on
the amount of the obligations payable on the date of such calculation. In the
event this Lease
shall be terminated as provided above, by summary proceedings or otherwise,
Landlord, its
agents, servants or representatives may immediately or at any time thereafter
peaceably re-enter
and resume possession of the Premises and remove all persons and property
therefrom, by
summary dispossession proceedings.

            In the event Landlord has any duty to mitigate damages hereunder
following an Event of
Default and in any action or claim by Landlord or Lender against Tenant due to
breach of this
Lease following an Event of Default, Landlord shall not be required to
construct, repair, modify
or install any improvements in the Premises or to divide the Premises for
multiple leaseholds in
any way whatsoever.

                        (c)        Landlord may recover from Tenant, and Tenant
shall pay to Landlord upon
demand, as Additional Rent such reasonable and actual expenses as Landlord may
incur
in recovering possession of the Premises, placing the same in good order and
condition and
repairing the same for reletting, and all other reasonable and actual expenses,
commissions and
charges incurred by Landlord in exercising any remedy provided herein or as a
result of any
Event of Default by Tenant hereunder (including without limitation reasonable
attorneys' fees),
provided that in no event shall Landlord be obligated to incur any such expenses
or take any such
action in order to mitigate Tenant's damages.

            Except as provided in Paragraph 9 or 13(d), at any time upon prior
notice to Tenant,
Landlord and Lender shall have the right, but shall not be required, to pay such
sums or do any
act which requires the expenditure of monies which may be necessary or
appropriate by reason of
the failure or neglect of Tenant to comply with any of its obligations under
this Lease (Landlord
and Lender shall not, however, exercise any such rights unless the failure or
neglect shall have
ripened into an Event of Default), and in the event of the exercise of such
right by Landlord or
Lender, Tenant agrees to pay to Landlord or Lender forthwith upon demand, as
Additional Rent,
all such sums including reasonable attorneys fees, together with interest
thereon at the Default
Rate.

                        (d)        The various rights and remedies reserved to
Landlord herein, are
cumulative, the rights and remedies described in Paragraph 20(a)-(d) shall
survive termination of
this Lease and Landlord may pursue any and all such rights and remedies and any
other available
to Landlord under applicable law or equity, whether at the same time or
otherwise (to the extent
not inconsistent with specific provisions of this Lease); provided, however,
that no remedy of
termination shall be available to Landlord except as expressly set forth in
Paragraph 20(b) after
the occurrence of an Event of Default. Notwithstanding anything herein to the
contrary,
Landlord expressly waives its right to forcibly dispossess Tenant from the
Premises, whether
peaceably or otherwise, without judicial process, such that Landlord shall not
be entitled to any
"commercial lockout" or any other provisions of applicable law which permit
landlords to
dispossess tenants from commercial properties without the benefit of judicial
review.

            21.        Bankruptcy; Insolvency.

                        (a)        Immediate Default.    Tenant shall be deemed
to be in default under this
Lease (without Landlord giving any notice declaring such), upon the occurrence
of an "Event of
Bankruptcy," which for the purposes of this Lease shall mean where Tenant or any
part of the
Premises are placed in the hands of a receiver or trustee, or should Tenant file
a voluntary
petition in bankruptcy, make an assignment for the benefit of creditors, become
unable to or
admit in writing that it cannot pay its debts as such become due, or be finally
adjudicated a
bankrupt or insolvent, or should Tenant petition or institute any proceedings
under the United
States Bankruptcy Code or under any other state or federal act or law relating
to the subject of
bankruptcy wherein Tenant seeks to be adjudicated a bankrupt, or to be dismissed
of its debts, or
to effect a plan of dissolution, liquidation, readjustment, composition,
arrangement, or
reorganization, or should any involuntary proceeding equivalent or similar to
any of the
foregoing be filed against Tenant under any such bankruptcy laws, and not be
dismissed within
sixty (60) days thereafter. The provisions of this Article shall also apply to
each guarantor of this
Lease to the same extent as if the word "Tenant" were replaced by the name of
such guarantor
throughout this Section, except that the first word hereof shall remain
"Tenant."

                        (b)        Assumption of Lease.    If an Event of
Bankruptcy occurs, the receiver or
trustee of Tenant's bankruptcy estate or Tenant as a debtor-in-possession may
assume the Lease,
and may subsequently assign it, only if it performs the following within sixty
(60) days after the
date of the filing of the voluntary petition, the entry of the order for relief
or the date of
conversion or admission of inability to pay debts as such become due (or such
additional time as
a court of competent jurisdiction may grant, for cause, upon a motion made
within the original
sixty (60) day period):

                                    (i)        1 files a motion to assume the
Lease with the appropriate court;

                                    (ii)        satisfies each of every one of
the following conditions which
Landlord and Tenant acknowledge to be commercially reasonable:

                                    (iii)        cures all monetary and
nonmonetary defaults under the Lease or
provides Landlord with Adequate Assurance (as defined in Paragraph 21(c) below)
that it will be
able to cure all monetary defaults under the Lease within ten (10) days and all
nonmonetary
defaults within thirty (30) days from the date of assumption and actually so
cures all such
monetary and nonmonetary defaults under the Lease within said time periods;

                                    (iv)        compensates Landlord or provides
Landlord with Adequate
Assurance that within ten (10) days after the date of assumption it will
compensate Landlord for
any pecuniary loss that Landlord incurred as a result of the default of Tenant,
the trustee or
debtor-in-possession, including without limitation, Landlord's reasonable costs
and expenses,
including attorney's fees;

                                    (v)        provides Landlord with Adequate
Assurance of Future
Performance (as defined in Paragraph 21(c) below) of all Tenant's future
obligations under the
Lease; and

                                    (vi)        delivers to Landlord a written
statement that the conditions in this
Paragraph 21(b) have been satisfied.

                        (c)        Need for Adequate Assurance and Adequate
Assurance of Future Performance.

                                    (i)        For the purposes only of
Paragraph 21(b) above, and in addition to
any other requirements under the Bankruptcy Code, any future federal bankruptcy
laws and
applicable case law, "Adequate Assurance" shall mean at least entering an order
segregating
sufficient cash to pay Landlord under Paragraph 21(b) above and granting to
Landlord a valid
first lien and security interest (in a form acceptable to Landlord) in Tenant's
property or its
bankruptcy estate, which lien and security interest secures the receiver's,
trustee's or
debtor-in-possession's obligation to cure the monetary and nonmonetary defaults
under the Lease
within the periods set forth in Paragraph 21(b) above.

                                    (ii)        For the purposes only of
Paragraph 21(b) above, and in addition to
any other requirements under the Bankruptcy Code, any future federal bankruptcy
law and
applicable case law, "Adequate Assurance of Future Performance" shall mean at
least:

                                    (iii)        the receiver, trustee, or
debtor-in-possession depositing with
Landlord, as security for the timely payment of rent and other monetary
obligation, an amount
equal to the sum of two (2) months' Basic Rent;

                                    (iv)        the receiver, trustee or
debtor-in-possession agreeing to pay in
advance, on each day that the Basic Rent is payable;

                                    (v)        the receiver, trustee or
debtor-in-possession providing adequate
assurance, in a form acceptable to Landlord, of the source of the rent and other
consideration due
under the Lease;

                                    (vi)        Tenant's bankruptcy estate and
the receiver, trustee or
debtor-in-possession, providing adequate assurance, in a form acceptable to
Landlord, that the
bankruptcy estate (and any successor after the conclusion of Tenant's bankruptcy
proceedings)
will continue to have sufficient unencumbered assets after the payment of all
secured obligations
and administrative expenses to assure Landlord that the bankruptcy estate (and
any successor
after the conclusion of Tenant's bankruptcy proceedings) will have sufficient
funds to fulfill
Tenant's obligations under the Lease and to keep the Premises properly staffed
with sufficient
employees to conduct a fully operational, actively promoted business on the
Premises.

                        (d)        Assignment of Lease.

                                    (i)        If the receiver, trustee or
debtor-in-possession assumes the Lease
under Paragraph 21(b) above and applicable law, it may assign its interest in
this Lease only if
the proposed assignee first provides Landlord with Adequate Assurance of Future
Performance
of all of Tenant's obligations under the Lease and if Landlord determines in the
exercise of its
reasonable business judgement that the assignment of the Lease will not breach
any other Lease,
mortgage, financing agreement, or other agreement relating to the Premises by
which Landlord is
bound (and Landlord is not required to obtain consents or waivers from any third
party required
under any Lease, mortgage or financing agreement or other agreement by which
Landlord is
bound);

                                    (ii)        For purposes of this
Paragraph 21(d)(ii) only, and in addition to
any other requirements under the Bankruptcy Code, any future bankruptcy law and
applicable
case law, "Adequate Assurance of Future Performance" shall mean at least the
satisfaction of the
following conditions which Landlord and Tenant agree and acknowledge to be
commercially
reasonable;

                                    (iii)        the proposed assignee
submitting a current financial statement,
audited by a certified public accountant, that shows a tangible net worth and
working capital in
amounts determined in the reasonable business judgment of Landlord to be
sufficient to assure
the future performance by the assignee of all Tenant's obligations under the
Lease;

                                    (iv)        if requested by Landlord in the
exercise of its reasonable business
judgment, the proposed assignee obtaining a guarantee (in form and substance
satisfactory to
Landlord) from one or more persons who satisfy Landlord's standards of credit
worthiness;

                                    (v)        the proposed assignee submitting
written evidence satisfactory to
Landlord in the exercise of its reasonable business judgment, of substantial
business experience
in operating facilities similar to the Premises.

                        (e)        Debtors' Obligations.    Upon the filing of a
petition by or against Tenant
under any bankruptcy provision, Tenant, as debtor and debtor-in-possession, and
any trustee who
may be appointed agree to adequately protect Landlord as follows: (i) to perform
each and every
obligation of Tenant under this Lease until such time as this Lease is either
rejected or assumed
by bankruptcy court order; (ii) to pay currently all monetary obligations
required under this
Lease, including without limitation, the payment of all sums payable hereunder
which are
considered to be reasonable compensation for the use and occupancy of the
Premises; and (iii) to
provide Landlord a minimum of thirty (30) days' written notice, unless a shorter
period is agreed
to in writing by the parties, of any proceeding relating to any assumption of
this Lease or any
intent to abandon the Premises, which abandonment shall be deemed a rejection of
this Lease.

            22.        Notices.    All notices, demands, requests, consents,
approvals, offers, statements and
other instruments or communications required or permitted to be given pursuant
to the provisions
of this Lease (collectively "Notice" or "Notices") shall be in writing and shall
be deemed to have
been given for all purposes (i) three (3) days after having been sent by United
States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party
at its address as stated below, (ii) one (1) day after having been sent by
Federal Express or other
nationally recognized air courier service, or (iii) upon receipt after having
been personally
delivered, to the Addresses stated below:

                        (a)        If to Landlord, at the address set forth on
the first page of this Lease.

                        (b)        If to Tenant:

                                    Ace Hardware Corporation
                                    2200 Kensington Court
                                    Oak Brook, Illinois 60523-2100
                                    Attention: Corporate Property Manager

                                    With a copy to:

                                    Ace Hardware Corporation
                                    2200 Kensington Court
                                    Oak Brook, Illinois 60523-2100
                                    Attention: John Van Zeyl, Esq.

If any Lender shall have advised Tenant by Notice in the manner aforesaid that
it is the holder of
a Mortgage and stating in said Notice its address for the receipt of Notices,
then simultaneously
with the giving of any Notice by Tenant to Landlord, Tenant shall serve one or
more copies of
such Notice upon Lender in the manner aforesaid and no Notice shall be effective
unless and
until Lender shall be sent a copy thereof. For the purposes of this Paragraph,
any party may
substitute its address by giving fifteen days' notice to the other party in the
manner provided
above; however, Tenant must provide a street address within the State for
personal delivery.

            23.        Memorandum Lease; Estoppel Certificates.    Tenant shall
execute, deliver and
record, file or register from time to time all such instruments as may be
required by any present
or future law in order to evidence the respective interests of Landlord and
Tenant in any of the
Premises, and shall cause a memorandum of this Lease, substantially in the form
attached hereto
as Exhibit B (the "Memorandum"), and any supplement hereto or to such other
instrument, if
any, as may be appropriate, to be recorded, filed or registered and re-recorded,
refiled or re-
registered in such manner and in such places as may be required by any present
or future law in
order to give public notice and protect the validity of this Lease. In the event
of any discrepancy
between the provisions of said recorded memorandum of this Lease or any other
recorded
instrument referring to this Lease and the provisions of this Lease, the
provisions of this Lease
shall prevail. Tenant shall, at any time and from time to time, within twenty
(20) days after
written request by Landlord (or, in the case of an estoppel certificate, within
twenty (20) days
after written request of Landlord or Lender), execute, acknowledge and deliver
to the other a
statement in writing, executed by Tenant or, if other than an individual, by a
President, Vice
President or authorized general partner, principal officer or agent certifying
(i) that this Lease is
unmodified and in full effect (or, if there have been modifications, that this
Lease is in full effect
as modified, setting forth such modifications); (ii) the dates to which Basic
Rent payable
hereunder has been paid; (iii) that to the knowledge of the party executing such
certificate no
default by either Landlord or Tenant exists hereunder or specifying each such of
which such party
may have knowledge; (iv) the remaining Term hereof; (v) that there are no
proceedings pending
or threatened against Tenant before or by any court or administrative agency
which if adversely
decided would materially and adversely affect the financial condition and
operations of Tenant or
if any such proceedings are pending or threatened to said party's knowledge,
specifying and
describing the same; and (vi) such other facts regarding the Lease, Premises or
Tenant that are
reasonably requested by Landlord. It is intended that any such statements may be
relied upon by
Lender, the recipient of such statements or their assignees or by any
prospective mortgagee,
purchaser, or assignee of Landlord.

            24.        Surrender and Holding Over.    Upon the expiration or
earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Premises (except as to any
portion thereof
with respect to which this Lease has previously terminated) to Landlord in the
same condition in
which the Premises were originally received from Landlord at the commencement of
this Lease,
except as to the Racking/Shelving Items as set forth in Paragraph 9(a), any
repair or Alteration as
permitted or required by any provision of this Lease, and except for ordinary
wear and tear and
damage by fire, casualty or condemnation but only to the extent Tenant is not
required to repair
the same hereunder. Notwithstanding the foregoing, within one (1) year after the
Commencement Date, Tenant shall, at its sole cost and expense: (a) repair the
roof to a
Serviceable Condition (as defined on Exhibit D attached hereto and incorporated
herein by this
reference) and (b) repair the deferred maintenance items set forth in paragraph
two of Landlord's
letter of February 21, 2002, a copy of which is attached hereto as Exhibit E and
incorporated
herein by this reference). Prior to the expiration or earlier termination of
this Lease, Tenant shall,
at Tenant's sole cost and expense, remove the Racking/Shelving Items from the
Building and
repair any damage caused by such removal including without limitation capping
all in-rack
sprinklers, cutting all bolts and leaving the floor in a smooth condition.
Tenant may remove at
Tenant's sole cost and expense from the Premises on or prior to such expiration
or earlier
termination Tenant's Trade Fixtures and personal property which are owned by
Tenant or third
parties other than Landlord, and Tenant at its expense shall, on or prior to
such expiration or
earlier termination, repair any damage caused by such removal. Tenant's Trade
Fixtures and
personal property not so removed at the end of the Term or within thirty days
after the earlier
termination of the Term for any reason whatsoever shall become the property of
Landlord, and
Landlord may thereafter cause such property to be removed from the Premises.
Landlord shall
not in any manner or to any extent be obligated to reimburse Tenant for any
property which
becomes the property of Landlord as a result of such expiration or earlier
termination. Upon
such expiration or earlier termination, no party shall have any further rights
or obligations
hereunder except as specifically provided herein.

            Any holding over by Tenant of the Premises after the expiration or
earlier termination of
the term of this Lease or any extensions thereof shall operate and be construed
as tenancy from
month to month only, at one hundred fifty percent (150%) of the Basic Rent
reserved herein and
upon the same terms and conditions as contained in this Lease. Notwithstanding
the foregoing,
any holding over without Landlord's consent for a period greater than thirty
(30) days shall
entitle Landlord, in addition to collecting Basic Rent at a rate of two hundred
percent (200%)
thereof, to exercise all rights and remedies provided by law or in equity,
including the remedies
of Paragraph 20. During any holding over by Tenant of the Premises, Tenant shall
be obligated
to pay Landlord, in addition to Basic Rent as set forth in this Paragraph 24,
all Additional Rent
due under this Lease.

            25.        No Merger of Title.    There shall be no merger of this
Lease nor of the leasehold
estate created by this Lease with the fee estate in or ownership of any of the
Premises by reason
of the fact that the same person, corporation, firm or other entity may acquire
or hold or own,
directly or indirectly, (i) this Lease or the leasehold estate created by this
Lease or any interest in
this Lease or in such leasehold estate and (ii) the fee estate or ownership of
any of the Premises
or any interest in such fee estate or ownership. No such merger shall occur
unless and until all
persons, corporations, firms and other entities having any interest in (x) this
Lease or the
leasehold estate created by this Lease and (y) the fee estate in or ownership of
the Premises
including, without limitation, Lender's interest therein, or any part thereof
sought to be merged
shall join in a written instrument effecting such merger and shall duly record
the same.

            26.        Landlord and Lender Exculpation.    Anything contained
herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease
shall be enforced only against the Landlord's interest in Premises and shall not
be enforced
against the Landlord individually or personally. Tenant agrees that any
assignment by Landlord
of Landlord's interest in this Lease, or the rents payable hereunder, whether
absolute or
conditional in nature or otherwise, which assignment is made to Lender solely as
additional
collateral related to a mortgage, and the acceptance thereof by Lender shall
never be treated as an
assumption by Lender of any obligations of Landlord hereunder unless Lender
shall, by notice
sent to Tenant, specifically elect, and that Lender shall be treated as having
assumed Landlord's
obligations hereunder only upon purchase of the Premises pursuant to foreclosure
of the
Mortgage or by deed in lieu thereof, or other conveyance, and then only subject
to the limitations
set forth in the first sentence hereof.

            27.        Hazardous Substances.

                        (a)        Tenant represents, warrants and covenants
that it will not on, about, or
under the Premises, make, treat or dispose of any "hazardous substances" as that
term is defined
in the Comprehensive Environmental Response, Compensation and Liability Act, and
the rules
and regulations promulgated pursuant thereto, as from time to time amended, 42
U.S.C. § 9601 et
seq. (the "Act"), but the foregoing shall not prevent the use to the extent
necessary and customary
in normal operations of Tenant's business of any such substances in accordance
with applicable
laws and regulations and Tenant represents, warrants and covenants that it will
at all times
comply with the Act and any other federal, state or local laws, rules or
regulations governing
Hazardous Materials. "Hazardous Materials" as used herein shall include, without
limitation, all
"hazardous substances" (as defined in the Act), chemicals, petroleum, crude oil
or any fraction
thereof, hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
asbestos-containing materials
and/or products, urea formaldehyde, or any substances which are classified as
"hazardous" or
"toxic" under the Act; hazardous waste as defined under the Solid Waste Disposal
Act, as
amended 42 U.S.C. § 6901; air pollutants regulated under the Clean Air Act, as
amended, 42
U.S.C. § 7401, et seq.; pollutants as defined under the Clean Water Act, as
amended, 33 U.S.C.
§ 1251, et seq., any pesticide as defined by Federal Insecticide, Fungicide, and
Rodenticide Act,
as amended, 7 U.S.C. § 136, et seq., any hazardous chemical substance or mixture
or imminently
hazardous substance or mixture regulated by the Toxic Substances Control Act, as
amended, 15
U.S.C. § 2601, et seq., any substance listed in the United States Department of
Transportation
Table at 45 CFR 172.101; any chemicals included in regulations promulgated under
the above
listed statutes or any modifications thereof or successor statutes thereto; any
explosives,
radioactive material, and any chemical regulated by state statutes similar to
the federal statutes
listed above and regulations promulgated under such state statutes.

                        (b)        To the extent required by the Act and/or any
federal, state or local laws,
rules or regulations governing Hazardous Materials, Tenant shall remove any
Hazardous
Materials whether now or hereafter existing on the Premises and whether or not
arising out of or
in any manner connected with Tenant's occupancy of the Premises during the
Initial Term or any
extension or renewal Term thereof. Tenant shall and hereby does agree to defend,
indemnify and
hold Lender and Landlord, their members, officers, directors, shareholders,
partners and
employees harmless from and against any and all causes of actions, suits,
demands or judgments
of any nature whatsoever, obligations, losses, damages, penalties, expenses,
fees, claims, costs
(including response and remedial costs), and liabilities, including, but not
limited to, attorneys'
fees and expenses and costs of litigation, arising out of or in any manner
connected with (i) the
violation of any applicable federal, state or local environmental law with
respect to the Premises
or (ii) the "release" or "threatened release" of, or failure to remove as
required by this
Paragraph 26, Hazardous Materials on or from the Premises or any portion or
portions thereof,
now or hereafter existing during the initial term and any extension or renewal
Term whether or
not arising out of or in any manner connected with Tenants' occupancy of the
Premises during
the Initial Term or any extension or renewal Term. Tenant's indemnification
obligations under
this Paragraph 27(b) are in addition to, and in no way limit, Tenant's
indemnification obligations
under Paragraph 35.

                        (c)        Tenant shall not engage in any activity in or
on the Premises which
constitutes a Reportable Use of Hazardous Materials without the express prior
written consent of
Landlord and timely compliance (at Tenant's sole cost and expense) with all
applicable Legal
Requirements. "Reportable Use" shall mean (i) the installation or use of any
above or below
ground storage tank; (ii) the generation, possession, storage, use,
transportation, or disposal of a
Hazardous Materials that requires a permit from, or with respect to which a
report, notice,
registration, or business plan is required to be filed with, any governmental
authority; and/or (iii)
the presence at the Premises of any Hazardous Materials with respect to which
any applicable
Legal Requirement requires that a notice be given to persons entering or
occupying the Premises
or neighboring properties. Notwithstanding the foregoing, Tenant may use any
ordinary and
customary materials reasonably required to be used in the normal course of
Tenant's business (in
compliance with the use set forth in Paragraph 8 above) so long as such use is
in compliance with
all applicable Legal Requirements, is not a Reportable Use, and does not expose
the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Landlord to
any liability therefor. In addition, Landlord may condition its consent to any
Reportable Use
upon receiving such additional assurances as Landlord reasonably deems necessary
to protect
itself, the public, the Premises, and/or the environment against damage,
contamination, injury,
and/or liability, including, but not limited to, the installation (and removal
on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements). Tenant
will not store combustible or flammable materials on the Premises in violation
of the Act and any
other federal, state or local laws, rules or regulations governing Hazardous
Materials. The
provisions of this Paragraph 27 shall survive the expiration or earlier
termination of this Lease.

            28.        Entry by Landlord and Lender.    Landlord, Lender and
their authorized
representatives shall have the right upon reasonable notice (which shall be not
less than twenty-
four (24) hours except in the case of emergency) to enter the Premises at all
reasonable business
hours, (and at all other times in the event of an emergency), for (i) the
purpose of inspecting the
same, including, but not limited to, conducting soil, hydrology, environmental,
and all other
testing and examinations it deems necessary, or for the purpose of doing any
work under
Paragraph 9, and may take all such action thereon as may be necessary or
appropriate for any
such purpose (but nothing contained in this Lease or otherwise shall create or
imply any duty
upon the part of Landlord or Lender to make any such inspection or do any such
work), and (ii)
the purpose of showing the Premises to prospective purchasers and mortgagees
and, at any time
within twelve (12) months prior to the expiration of the term of this Lease for
the purpose of
showing the same to prospective tenants. No such entry shall constitute an
eviction of Tenant but
any such entry shall be done by Landlord in such reasonable manner as to
minimize any
disruption of Tenant's business operation.

            29.        Statements.    Tenant named herein shall submit to Lender
and Landlord within 90
days of the end of each fiscal year, annual balance sheets, income and cash flow
statements for
Tenant named herein, certified by an independent public accountant. Copies of
the l0Ks filed
with the Securities and Exchange Commission will satisfy the requirement
contained in this
Paragraph 29. The obligations of Tenant named herein shall continue whether or
not this Lease
shall have been assigned.

            30.        No Usury.    The intention of the parties being to
conform strictly to the usury laws
now in force in the State, whenever any provision herein provides for payment by
Tenant to
Landlord of interest at a rate in excess of the legal rate permitted to be
charged, such rate herein
provided to be paid shall be deemed reduced to such legal rate.

            31.        Broker.    Landlord and Tenant each hereby represents and
warrants to the other that
no brokers represented Landlord and Tenant with respect to this Lease. Each
party hereby agrees
to indemnify, protect, hold harmless and defend the other against all claims by
any party for
broker fees, finder fees or any other fee or commission in connection with this
Lease based upon
the actions of the indemnifying party.

            32.        Waiver of Landlord's Lien.    Landlord hereby waives any
right to distrain Tenant's
Trade Fixtures or any property of Tenant and any Landlord's lien or similar lien
upon Tenant's
Trade Fixtures and any other property of Tenant regardless of whether such lien
is created or
otherwise. Landlord agrees, at the request of Tenant, to execute a waiver of any
Landlord's or
similar lien for the benefit of any present or future holder of a security
interest in or lessor of any
of Tenant's Trade Fixtures or any other personal property of Tenant. Landlord
acknowledges
and agrees in the future to acknowledge (in a written form reasonably
satisfactory to Tenant) to
such persons and entities at such times and for such purposes as Tenant may
reasonably request
that Tenant's Trade Fixtures are Tenant's property and not part of Improvements
(regardless of
whether or to what extent such Tenant's Trade Fixtures are affixed to the
Improvements) or
otherwise subject to the terms of this Lease; however, Landlord shall not be
obligated or
responsible to notify any such person of Tenant's default hereunder or keep safe
any such
Tenant's Trade Fixtures for the benefit of any such person, or allow any sales
or auctions of such
Tenant's Trade Fixtures on the Premises, and any such person shall be obligated
to pay to
Landlord rental or moving or storage fees incurred by Landlord for such Tenant's
Trade Fixtures
after the termination of this Lease and to repair any damage to the Premises
caused by such
person's removal of any Tenant's Trade Fixtures. Tenant shall be obligated to
pay Landlord's
attorney fees for the review and/or preparation of any such acknowledgment. 

            33.        No Waiver.    No delay or failure by either party to
enforce its rights hereunder shall
be construed as a waiver, modification or relinquishment thereof.

            34.        Separability.    If any term or provision of this Lease
or the application thereof to any
provision of this Lease or the application thereof to any person or
circumstances shall to any
extent be invalid and unenforceable, the remainder of this Lease, or the
application of such term
or provision to person or circumstances other than those as to which it is
invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be
valid and shall be enforced to the extent permitted by law.

            35.        Indemnification.    Tenant agrees to defend, pay,
protect, indemnify, save and hold
harmless Landlord, Landlord's members, partners, officers, directors,
shareholders, employees
and agents, and Lender (collectively, "Indemnitees") from and against any and
all liabilities,
losses, damages, penalties, costs, expenses (including reasonable attorneys'
fees and expenses),
causes of action, suits, claims, demands or judgments of any nature whatsoever,
howsoever
caused, arising from any of the Premises or Adjoining Property, the use,
non-use, occupancy,
condition, design, construction, maintenance, repair or rebuilding of any of, or
otherwise relating
to, the Premises or Adjoining Property, the failure to perform any of Tenant's
obligations under
this Lease, and any injury to or death of any person or persons or any loss of
or damage to any
property, real or personal, in any manner arising therefrom connected therewith
or occurring
thereon (collectively, "Losses"), whether or not any of the Indemnitees has or
should have
knowledge or notice of the defect or conditions, if any, causing or contributing
to said Loss. In
case any action or proceeding is brought against any of the Indemnitees by
reason of any such
Loss, Tenant covenants upon notice from any of the Indemnitees to defend such
Indemnitee in
such action, with the expenses of such defense paid by Tenant, and such
Indemnitee will
cooperate and assist in the defense of such action or proceeding if reasonably
requested so to do
by Tenant. The obligations of Tenant under this Paragraph 35 shall survive any
termination of
this Lease.

            36.        Headings.    The paragraph headings in this Lease are
used only for convenience in
finding the subject matters and are not part of this Lease or to be used in
determining the intent of
the parties or otherwise interpreting this Lease.

            37.        Modifications.    This Lease may be modified, amended,
discharged or waived only
by an agreement in writing signed by the party against whom enforcement of any
such
modification, amendment, discharge or waiver is sought. Each of Tenant and
Landlord agrees
that it will not modify or amend this Lease without the written consent of
Lender within any
period during which there is a Lender hereunder. In the event of any
inconsistent instruction
from Landlord and Lender, Tenant shall comply with instruction of Lender.

            38.        Successors, Assigns.    The covenants of this Lease shall
run with the Land and bind
Tenant, the heirs, distributees, personal representatives, successors and
permitted assigns of
Tenant and all present and subsequent encumbrancers and subtenants of any of the
Premises, and
shall inure to the benefit of and bind Landlord, its successors and assigns. In
the event Tenant is
comprised of more than one individual or entity, the obligation of each shall be
joint and several.
The term "Landlord" as used in this Lease, so far as covenants or obligations on
the part of
Landlord are concerned, shall be limited to mean and include only the owner or
owners of the
Premises or holder of the Mortgage in possession at the time in question of the
Premises and in
the event of any transfer or transfers of the title of the Premises, the
Landlord herein named (and
in case of any subsequent transfers or conveyances, the then grantor) shall be
automatically freed
and relieved from and after the date of such transfer and conveyance of all
personal liability as
respects the performance of any covenants or obligations on the part of Landlord
contained in
this Lease thereafter to be performed.

            39.        Counterparts.    This Lease may be executed in several
counterparts, which together
shall be deemed one and the same instrument.

            40.        Governing Law.    This Lease shall be governed by and
construed according to the
laws of the State.

                                                        [Signatures follow
immediately]

            IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument
to be
executed as of June 19, 2002.

LANDLORD:                                                        TENANT:

SUNSET-SCE, LLC, a California limited                ACE HARDWARE CORPORATION, a
liability company                                                      Delaware
corporation

By:    Sierra Crest Equities, LLC, a
         California limited liability company                  
By:                                                         

          By:                                                               
Name:  David F. Myer
          Name:  James B. Allen
          Its:       Chief Executive Officer                       Its:      
Senior Vice President Retail Support

          By:                                              
          Name:  Brett R. Baumgarten
          Its:        President

JL INTERESTS, LLC, a California limited
liability company

By:                                                         
Name:  John Lazovich
Its:       Sole Member

                                                              EXHIBIT "A"

                                                    (Legal Descripition of Land)

That certain real property located in the City of Rocklin, County of Placer,
State of California,
 more particularly described as follows:

THAT PORTION OF THE SOUTH ONE-HALF OF SECTIONS 10 AND 11, TOWNSHIP 11
NORTH, RANGE 6 EAST, M.D.B.&M., INCLUDED WITHIN THE BOUNDARIES OF THE
LAND SHOWN AND DESIGNATED AS PARCEL "A" OF PARCEL MAP NO. DL-86-08,
FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF PLACER COUNTY,
CALIFORNIA, ON JULY 10, 1987, IN BOOK 23 OF PARCEL MAPS, AT PAGE 69.

APN: 017-081-024

                                                              EXHIBIT "B"

                                                        (Memorandum Lease)

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Stephen G. Stwora-Hail, Esq.
Downey, Brand, Seymour & Rohwer LLP
555 Capitol Mall
10th Floor
Sacramento, California 95814
Tel: (916) 441-0131

--------------------------------------------------------------------------------

                                                                                                                        
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)

                                                                    MEMORANDUM
LEASE

            This Memorandum Lease ("Memorandum") made as of the ____ day of
__________,
2002, by and between ACE HARDWARE CORPORATION, a Delaware corporation ("Tenant")
and SUNSET-SCE, LLC, a California limited liability company, as to an undivided
75% interest
as tenant-in-common, and JL INTERESTS, LLC, a California limited liability
company, as to an
undivided 25% interest as tenant-in-common (collectively, "Landlord").

                                                            WITNESSETH:

            1.        Landlord and Tenant entered into a lease, dated
__________, 2002 (the "Lease"),
for certain real property located in the City of Rocklin, County of Placer,
State of California, and
commonly known as 1101 Sunset Boulevard, Rocklin, California, as more
particularly described
on Exhibit "A" attached hereto and made a part hereof ("Property").

            2.        The Lease has a term commencing on _____________, 2002
("Commencement
Date") and continuing to the end of the twenty-seventh (27th) month thereafter,
and the Lease
provides that Tenant shall have the right to terminate the Lease, effective upon
the date which is
the last day of the eighteenth (18th) month after the Commencement Date, or
which is the last
day of any succeeding month through the twenty-sixth (26th) month after the
Commencement
Date, upon delivery of at least four (4) months' prior written notice to
Landlord of Tenant's
intention to terminate the Lease.

            3.        The terms and conditions of the Lease are incorporated
herein by this reference.
 This Memorandum is prepared and recorded for the purpose of putting the public
on notice of the
Lease, and in no way modifies the terms and conditions of the Lease.  In the
event of any
inconsistency between the terms and conditions of this Memorandum and the terms
and
conditions of the Lease, the terms and conditions of the Lease shall control.

                                                        [Signatures follow
immediately]

            IN WITNESS WHEREOF, the parties have executed this Memorandum as of
the day and
year first above written.

LANDLORD:                                                        TENANT:

SUNSET-SCE, LLC, a California limited                ACE HARDWARE CORPORATION, a
liability company                                                      Delaware
corporation

By:    Sierra Crest Equities, LLC, a
         California limited liability company                  
By:                                                         
                                                                              
Name:                                                    
          By:                                                               
Title:                                                       
          Name:  James B. Allen
          Its:       Chief Executive Officer

          By:                                              
          Name:  Brett R. Baumgarten
          Its:        President

JL INTERESTS, LLC, a California limited
liability company

By:                                                         
Name:  John Lazovich
Its:       Sole Member

STATE OF ________________________

COUNTY OF ______________________

            On __________________, 2002, before me, a notary public, in and for
said State,
personally appeared _____________________________________________________,
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
he/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 of which
the person(s)
acted, executed the instrument.

            WITNESS my hand and official seal.

                                                                                   
______________________________
                                                                                   
Notary Public

*****************************************************

STATE OF ________________________

COUNTY OF ______________________

            On __________________, 2002, before me, a notary public, in and for
said State,
personally appeared _____________________________________________________,
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
he/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 of which
the person(s)
acted, executed the instrument.

            WITNESS my hand and official seal.

                                                                                   
______________________________
                                                                                   
Notary Public

*****************************************************

STATE OF ________________________

COUNTY OF ______________________

            On __________________, 2002, before me, a notary public, in and for
said State,
personally appeared _____________________________________________________,
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
he/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 of which
the person(s)
acted, executed the instrument.

            WITNESS my hand and official seal.

                                                                                   
______________________________
                                                                                   
Notary Public

*****************************************************

STATE OF ________________________

COUNTY OF ______________________

            On __________________, 2002, before me, a notary public, in and for
said State,
personally appeared _____________________________________________________,
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
he/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 of which
the person(s)
acted, executed the instrument.

            WITNESS my hand and official seal.

                                                                                   
______________________________
                                                                                   
Notary Public

*****************************************************

                                                              EXHIBIT "C"

                                                     (Landlord's Trade Fixtures)
1.        carpet tiles
2.        TV Monitors
3.        miniblinds
4.        fire extinguishers
5.        first aid kits
6.        coffee machines
7.        ice machine
8.        bulletin boards
9.        wall clocks
10.      plants
11.      trash/aluminum recycle cans
12.      sound masking/PA system
13.      HVAC automated control system
14.      fire alarm system
15.      card access system
16.      intrusion alarm system
17.      grease/dry erase boards
18.      lobby furniture/rug
19.      paintings
20.      adjustable wall shelving
21.      lawn irrigation system
22.      parking lot signs
23.      lawn lights
24.      exterior lights
25.      CCTV cameras and recorders
26.      outside trash receptacles
27.      picnic tables
28.      phone room equipment
29.      audio/visual screens
30.      in-rack sprinkler systems
31.      warehouse signage
32.      corrugated cardboard baler

                                                              EXHIBIT "D"

                                                       (Serviceable Condition)

            "Serviceable Condition" shall mean in a water-tight condition, as
required by applicable
by law.

                                                              EXHIBIT "E"

                                            (Landlord's Letter of February 21,
2002)

                                                            [To be attached]