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                                                                   EXHIBIT 10.39
                                 LEASE AGREEMENT
                             (MULTI-TENANT FACILITY)

ARTICLE ONE:  BASIC TERMS.

         This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and are
to be read in conjunction with the Basic Terms.

         Section 1.01.  DATE OF LEASE:      April ____, 2000

         Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): Corporate Estates, Inc.,
a California corporation, and Mitchell Investments, LLC, a Tennessee limited
liability company.

                  Address of Landlord:      8413 Jackson Road, Suite B
                                            Sacramento CA 95826

         Section 1.03. TENANT (INCLUDE LEGAL ENTITY): United Stationers Supply
Co., an Illinois corporation.

                  Address of Tenant:         2200 East Golf Road
                                             Des Plaines, IL  60016
                                             Attention: Law Department

         Section 1.04. PROPERTY: The Property is part of Landlord's multi-tenant
real property development known as Eastpark Distribution Park and is part of a
888,262 square foot building (the "Building") presently under construction known
as Eastpark I, and described or depicted in EXHIBIT "A" (the "Project"). The
Project includes the land, the Building and all other improvements located on
the land, and the common areas described in Paragraph 4.05(a). The Property is
approximately 654,080 square feet of gross area situated as shown on Exhibit "A"
attached hereto and known as 5300 Hickory Hill Road, Suite 105, Memphis,
Tennessee.

         Section 1.05. LEASE TERM: 10 years 2 months BEGINNING ON May 1, 2000
(the "Commencement Date"), and ENDING ON June 30, 2010.

         Section 1.06. PERMITTED USES (See Article Five): Office and
distribution warehouse use (which shall include assembly and processing
incidental to distribution).

         Section 1.07. TENANT'S GUARANTOR (if none, so state): None

         Section 1.08. BROKERS (See Article fourteen) (if none, so state):

                   Landlord's Broker: None

                   Tenant's Broker: Commercial Tennessee, Inc. and Grubb & Ellis

         Section 1.09. COMMISSION PAYABLE TO TENANT'S BROKER

                   Per separate written agreement between Landlord and Brokers.

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         Section 1.10. INITIAL SECURITY DEPOSIT (See Section 3.03): None

         Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section
4.05) 350 automobile parking spaces and 50 trailer parking spaces

         Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:

         (a) BASE RENT: Sixty (60) monthly installments of $150,983.47 each
beginning on July 1, 2000 (the "Rental Commencement Date") and continuing
through and including June 1, 2005; then sixty (60) monthly installments of
$170,605.87 each beginning on THE FIFTH (5TH) ANNIVERSARY OF THE RENTAL
COMMENCEMENT DATE and continuing through and including June 1, 2010, PROVIDED,
HOWEVER, THAT IF TENANT SHALL COMPLY WITH THE TIME REQUIREMENTS FOR DELIVERY
APPROVALS TO LANDLORD IN ACCORDANCE WITH SUBPARAGRAPHS (i), (ii), (iii) AND (v)
OF SECTION 2(a) OF THE RIDER TO THIS LEASE AND IF LANDLORD SHALL FAIL TO
COMPLETE CONSTRUCTION ON OR BEFORE JULY 1, 2000, OF THE BUILDING, THE
IMPROVEMENTS TO THE PROPERTY SET OUT IN THE IMPROVEMENT SCHEDULE ATTACHED AS
EXHIBIT "B", AND THE ADDITIONAL IMPROVEMENTS, ALL IN ACCORDANCE WITH PARAGRAPHS
1 AND 2 OF SAID RIDER, THEN THE RENTAL COMMENCEMENT DATE SHALL BE DELAYED ONE
DAY FOR EACH DAY'S DELAY IN COMPLETION OF CONSTRUCTION.

         (b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section
4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section
4.04); (iv) Tenant's Initial Pro-Rata Share of Common Area Expenses 73.6% (See
Section 4.05); (v) Maintenance, Repairs and Alterations (See Article Six).

         Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE:
(See Section 9.05) N/A

         Section 1.14. RIDERS: The following Riders are attached to and made a
part of this Lease: (If none, so state) Rider of even date herewith.


ARTICLE TWO. LEASE TERM.

         Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property from Landlord to Tenant and Tenant leases the Property from Landlord
for the Lease Term. The Lease Term is for the period stated in Section 1.05
above and shall begin and end on the dates specified in Section 1.05 above,
unless the beginning or end of the Lease Term is changed under any provision of
this Lease. The "Commencement Date" shall be the date specified in Section 1.05
above for the beginning of the Lease Term, unless advanced or delayed under any
provision of this Lease.

         Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to Tenant on the
Commencement Date. Landlord's non-delivery of the Property to Tenant on that
date shall not affect this Lease or the obligations of Tenant under this Lease
except that the Commencement Date shall be delayed until Landlord delivers
possession of the Property to Tenant and the Lease Term shall be extended for a
period equal to the delay in delivery of possession of the Property to Tenant,
plus the number of days necessary to end the Lease Term on the last day of a
month. In the event the Commencement Date is delayed, the Rental Commencement
Date shall be delayed for a like number of days. If Landlord does not deliver
possession of the Property

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to Tenant within ninety (90) days after May 1, 2000, subject to delays
resulting from force majeure as provided in Section 13.12, Tenant may elect
to cancel this Lease by giving written notice to Landlord within ten (10)
days after the ninety (90) day period ends. If Tenant does not give such
notice, Tenant's right to cancel the Lease shall expire and the Lease Term
shall commence upon the delivery of possession of the Property to Tenant. If
delivery of possession of the Property to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure
to execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.

         Section 2.03 EARLY OCCUPANCY. If Tenant occupies the Property prior
to the Commencement Date, Tenant's occupancy of the Property shall be subject
to all of the provisions of this Lease. Early occupancy of the Property shall
not advance the Rental Commencement Date nor the expiration date of this
Lease. See paragraph 1(b) of the attached Rider.

         Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon
the expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from Tenant's delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Tenant's occupancy of the Property shall
be a "month to month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in
effect shall be increased by twenty-five percent (25%) for the second month
of any month-to-month holdover tenancy and fifty percent (50%) for the third
and any succeeding month of any month-to-month holdover tenancy. (The Base
Rent for the first month of any month-to-month holdover tenancy shall be the
same Base Rent as was due during the last month of this Lease or any
extensions thereof.)

ARTICLE THREE:  BASE RENT.

         Section 3.01. TIME AND MANNER OF PAYMENT. On the Rental Commencement
Date and on the first day of each month thereafter, Tenant shall pay Landlord
the Base Rent, in advance, without offset, deduction or prior demand. The
Base Rent shall be payable at Landlord's address or at such other place as
Landlord may designate in writing. No rent shall be payable for the first two
months of the Lease Term.

         Section 3.02.  COST OF LIVING INCREASES.  Intentionally Omitted.

         Section 3.03.  SECURITY DEPOSIT; INCREASES.  Intentionally Omitted.

         Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of
this Lease under Article Seven (Damage or Destruction), Article Eight
(Condemnation) or any other termination not resulting from Tenant's default,
and after Tenant has vacated the Property in the manner required by this
Lease, Landlord shall refund or credit to Tenant (or Tenant's successor) any
advance rent or other advance payments made by Tenant to Landlord, and any
amounts paid for real property taxes and other reserves which apply to any
time periods after termination of the Lease.

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ARTICLE FOUR:  OTHER CHARGES PAYABLE BY TENANT.

         Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other
than Base Rent are called "Additional Rent." Unless this Lease provides
otherwise, Tenant shall pay all Additional Rent then due with the next
monthly installment of Base Rent. The term "rent" shall mean Base Rent and
Additional Rent.

         Section 4.02.  PROPERTY TAXES.

         (a) REAL PROPERTY TAXES. Landlord shall pay all Real Property Taxes
on the Property during the Lease Term. Such payment by Landlord shall be made
prior to the delinquency date of the taxes. Tenant shall pay the amount of
such tax payment to Landlord prior to the delinquency date of such taxes but
in no event later than thirty (30) days after receipt of Landlord's written
statement. If the Property is not separately assessed (i.e., is assessed as
part of the Project), Landlord shall reasonably determine Tenant's share of
the Real Property Tax from the assessor's worksheets or other reasonably
available information. Tenant shall not be responsible for any Real Property
Taxes paid by Landlord covering any period of time prior to or after the
Lease Term.

         (b) DEFINITION OF "REAL PROPERTY TAX." "Real Property Tax" means:
(i) any fee, license fee, license tax, business license fee, commercial
rental tax, levy charge, assessment (such assessments shall only become Real
Property Taxes as such installments become due and payable), penalty or tax
imposed by any taxing authority against the Property and based upon the value
of the Property or this Lease; (ii) any tax on the Landlord's right to
receive, or the receipt of, rent or income from the Property or against
Landlord's business of leasing the Property; (iii) any tax or charge for fire
protection, streets, sidewalks, road maintenance, refuse or other services
provided to the Property by any governmental agency; and (iv) any charge or
fee replacing any tax previously included within the definition of real
property tax. "Real Property Tax" does not, however, include Landlord's
federal or state income, franchise, excise, inheritance or estate taxes.

         (c)  PERSONAL PROPERTY TAXES.

                  (i) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to
Tenant. Tenant shall try to have personal property taxed separately from the
Property.

                  (ii) If any of Tenant's personal property is taxed with the
Property, Tenant shall pay Landlord the taxes for the personal property
within thirty (30) days after Tenant receives a written statement from
Landlord for such personal property taxes.

         Section 4.03. UTILITIES. Tenant shall pay, directly to the
appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Property. However, if any services or utilities are jointly
metered with other property, Landlord shall make a reasonable determination
of Tenant's proportionate share of the cost of such utilities and services
and Tenant shall pay such share to Landlord within fifteen (15) days after
receipt of Landlord's written statement.

         Section 4.04.  INSURANCE POLICIES.

         (a) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known
as broad form

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comprehensive general liability insurance) insuring Tenant against liability
for bodily injury, property damage (including loss of use of property) and
personal injury arising out of the operation, use or occupancy of the
Property. Tenant shall name Landlord as an additional insured under such
policy. The initial amount of such insurance shall be ONE MILLION DOLLARS
($1,000,000.00) per occurrence and shall be subject to periodic increase
based upon inflation, increased liability awards, recommendation of
Landlord's professional insurance advisers and other relevant factors. The
liability insurance obtained by Tenant under this Paragraph 4.04(a) shall (i)
be primary and non-contributing; (ii) contain cross-liability endorsements;
and (iii) insure Landlord against Tenant's performance under Section 5.05, if
the matters giving rise to the indemnity under Section 5.05 result from the
negligence of Tenant. The amount and coverage of such insurance shall not
limit Tenant's liability nor relieve Tenant of any other obligations under
this Lease. Landlord may also obtain comprehensive public liability insurance
in an amount and with coverage determined by Landlord insuring Landlord
against liability arising out of ownership, operation, use or occupancy of
the Property. The policy obtained by Landlord shall not be contributory and
shall not provide primary insurance.

         (b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to
the Property in the full amount of its replacement value. Such policy shall
contain an inflation Guard Endorsement and shall provide protection against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, special extended perils (all risk), sprinkler
leakage and any other perils which Landlord deems reasonably necessary.
Landlord shall have the right to obtain flood and earthquake insurance if
required by any lender holding a security interest in the Property. Landlord
shall not obtain insurance for Tenant's fixtures or equipment or building
improvements installed by Tenant on the Property. Tenant shall be liable for
the payment of any deductible amount under Landlord's or Tenant's insurance
policies maintained pursuant to this Section 4.04, in an amount not to exceed
TWENTY THOUSAND DOLLARS ($20,000.00). Tenant shall not do or permit anything
to be done which invalidates any such insurance policies. Tenant shall also
maintain policies of insurance covering loss of or damage to Tenant's
contents, including inventory, in the full amount of its value. Such policies
shall provide protection against all perils included within the
classification of fire, extended coverage, sprinkler leakage and special
extended perils (all risk).

         (c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay
all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained by Landlord or Tenant) within fifteen (15) days after
Tenant's receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). If insurance policies maintained by Landlord
cover improvements on real property other than the Property, Landlord shall
deliver to Tenant a statement of the premium applicable to the Property
showing in reasonable detail how Tenant's share of the premium was computed.
If the Lease Term expires before the expiration of an insurance policy
maintained by Landlord, Tenant shall be liable for Tenant's prorated share of
the insurance premiums. Before the Commencement Date, Tenant shall deliver to
Landlord a copy of any policy of insurance which Tenant is required to
maintain under this Section 4.04. At least thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to Landlord a renewal of
such policy. As an alternative to providing a policy of insurance, Tenant
shall have the right to provide Landlord a certificate of insurance, executed

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by an authorized officer of the insurance company, showing that the insurance
which Tenant is required to maintain under this Section 4.04 is in full force
and effect and containing such other information which Landlord reasonably
requires. Upon request, Landlord shall deliver to Tenant a copy of any
insurance policy required to be maintained by Landlord hereunder, or at
Landlord's option, a certificate of insurance showing that such insurance is
in effect.

         (d)  GENERAL INSURANCE PROVISIONS.

                  (i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which requires the insurance
carrier to give Landlord not less than thirty (30) days' written notice prior
to any cancellation or modification of such coverage.

                  (ii) If Tenant fails to deliver a policy, certificate or
renewal to Landlord required under this Lease within the prescribed time
period or if any such policy is canceled or modified during the Lease Term
without Landlord's consent or without Tenant's obtaining a replacement policy
which complies with the requirements of this Section 4.04, Landlord may
obtain such insurance, in which case Tenant shall reimburse Landlord for the
cost of such insurance within fifteen (15) days after receipt of a statement
that indicates the cost of such insurance.

                  (iii) Tenant shall maintain all insurance required under
this Lease with companies holding a "General Policy Rating" of A-8 or better,
as set forth in the most current issue of "Best Key Rating Guide". Landlord
and Tenant acknowledge the insurance markets are rapidly changing and that
insurance in the form and amounts described in this Section 4.04 may not be
available in the future. Tenant acknowledges that the insurance described in
this Section 4.04 is for the primary benefit of Landlord. If at any time
during the Lease Term, Tenant is unable to maintain the insurance required
under the Lease, Tenant shall nevertheless maintain insurance coverage which
is customary and commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may change from time to time.
Landlord makes no representation as to the adequacy of such insurance to
protect Landlord's or Tenant's interests. Therefore, Tenant shall obtain any
such additional property or liability insurance which Tenant deems necessary
to protect Landlord and Tenant.

                  (iv) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby waive any and all rights
of recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by
any insurance policy in force (whether or not described in this Lease) at the
time of such loss or damage. Upon obtaining the required policies of
insurance, Landlord and Tenant shall give notice to the insurance carriers of
this mutual waiver of subrogation.

         Section 4.05.  COMMON AREAS: USE, MAINTENANCE AND COSTS.

         (a) COMMON AREAS. As used in this Lease, "Common Areas" shall mean
all areas within the Project which are available for the common use of
tenants of the Project and which are not leased or held for the exclusive use
of Tenant or other tenants, including, but not limited to, parking areas,
driveways, sidewalks, loading areas, access roads, corridors, landscaping and
planted areas. Landlord, from time to time, may change the size, location,
nature and use of any of the Common Areas, convert Common Areas into leasable
areas, construct additional parking facilities (including parking structures)
in the Common Areas, and

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increase or decrease Common Area land and/or facilities; provided, however,
that any such alteration by Landlord of Common Areas shall not adversely
affect the Tenant, with such adverse effects including, but not limited to
(1) a pro rata increase in Tenant's share and expenses of Common Areas and
(2) any material decrease in or detriment to the Tenant in the use of Common
areas and related facilities provided Tenant under this Lease. Tenant
acknowledges that such activities may result in and increase or decrease
Common Area land or facilities. Tenant acknowledges that such activities may
result in inconvenience to Tenant. Such activities are permitted if they do
not materially affect Tenant's use of the Property or materially interfere
with the continuous operation of Tenant's business.

         (b) USE OF COMMON AREAS. Tenant shall have the nonexclusive right
(in common with other tenants and all others to whom Landlord has granted or
may grant such rights) to use the Common Areas for the purposes intended,
subject to such reasonable rules and regulations as Landlord may establish
from time to time. Tenant shall abide by such rules and regulations and shall
use its best effort to cause others who use the Common Areas with Tenant's
express or implied permission to abide by Landlord's rules and regulations.
At any time, Landlord may close any Common Areas to perform any acts in the
Common Areas as, in Landlord's judgment, are desirable to improve the Project
so long as no such event shall materially interfere with the continuous
operation of Tenant's business and Tenant is given ten (10) days' prior
notice as to the closure of any particular Common Area which affects Tenant's
operations. Tenant shall not interfere with the rights of Landlord, other
tenants or any other person entitled to use the Common Areas.

         (c) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled
to use the number of vehicle parking spaces in the Project allocated to
Tenant in Section 1.11 of the Lease without paying any additional rent.
Tenant's parking within the striped parking areas shall not be reserved and
shall be limited to vehicles no larger than standard size automobiles or
pickup utility vehicles. Tenant shall not cause large trucks or other large
vehicles to be parked within the Project except within designated loading
areas or temporary parking areas equipped with concrete support pads.
Temporary parking of large delivery vehicles in the Project may be permitted
by the rules and regulations established by Landlord. Vehicles shall be
parked only in striped parking spaces and not in driveways, loading areas or
other locations not specifically designated for parking. Handicapped spaces
shall only be used by those legally permitted to use them. If Tenant parks
more vehicles in the parking area than the number set forth in Section 1.11
of this Lease, such conduct shall be a material breach of this Lease. In
addition to Landlord's other remedies under the Lease, Tenant shall pay a
daily charge determined by Landlord for each such additional vehicle.

         (d) MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common
Areas in good order, condition and repair and shall operate the Project, in
Landlord's sole discretion, as a first-class industrial/commercial real
property development. Tenant shall pay Tenant's pro rata share (as determined
below) of all costs incurred by Landlord for the operation and maintenance of
the Common Areas. Common Area costs include, but are not limited to, costs
and expenses for the following: gardening and landscaping; utilities, water
and sewage charges; maintenance of signs (other than tenants' signs);
premiums for liability, property damage, fire and other types of casualty
insurance on the Common Areas and all Common Area improvements; all property
taxes and assessments levied on or attributable to the Common Areas and all
Common Area improvements; all personal property taxes levied on or
attributable to personal property used in connection with the Common Areas;
straight-line depreciation on personal

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property owned by Landlord which is consumed in the operation or maintenance
of the Common Areas; rental or lease payments paid by Landlord for rented or
leased personal property used in the operation or maintenance of the Common
Areas; fees for required licenses and permits; repairing, resurfacing,
repaving, maintaining, painting, lighting, cleaning, refuse removal, security
and similar items; and Management Fees provided that Tenant's pro rata share
of Management Fees for the Project shall not exceed $.05 per square foot of
the Property. Landlord may cause any or all of such services to be provided
by third parties and the cost of such services shall be included in Common
Area costs. Common Area costs shall not include depreciation of real property
which forms part of the Common Areas, any capital expenses or replacements,
or any expenses incurred for the benefit of any tenant or tenant space in the
Project.

         (e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual pro
rata share of all Common Area costs (prorated for any fractional month) upon
written notice from Landlord that such costs are due and payable, and in any
event prior to delinquency. Tenant's pro rata share shall be calculated by
dividing the square foot area of the Property, as set forth in Section 1.04
of the Lease, by the aggregate square foot area of the Project. Tenant's
initial pro rata share is set out in Paragraph 1.12(b). Any changes in the
Common Area costs and/or the aggregate area of the Project leased or held for
lease during the Lease Term shall be effective on the first day of the month
after such change occurs. Landlord may, at Landlord's election, estimate in
advance and charge to Tenant Common Area costs payable by Tenant under this
paragraph. At Landlord's election, such statements of estimated Common Area
costs shall be delivered monthly, quarterly or at any other periodic
intervals to be designated by Landlord. Landlord may adjust such estimates at
any time based upon Landlord's experience and reasonable anticipation of
costs. Such adjustments shall be effective as of the next rent payment date
after notice to Tenant. Within sixty (60) days after the end of each calendar
year of the Lease Term, Landlord shall deliver to Tenant a statement prepared
in accordance with generally accepted accounting principles setting forth, in
reasonable detail, the Common Area costs paid or incurred by Landlord during
the preceding calendar year and Tenant's pro rata share. Upon receipt of such
statement, there shall be an adjustment between Landlord and Tenant, with
payment to or credit given by Landlord (as the case may be) so that Landlord
shall receive the entire amount of Tenant's share of such costs and expenses
for such period.

         Tenant shall have the right to retain a firm of certified public
accountants to audit Landlord's books and records regarding Common Area Costs
no more frequently than annually, during normal business hours, on thirty
(30) days prior written notice from Tenant. Tenant shall give Landlord a copy
of the report of such audit; if Landlord objects to such report, then the
dispute shall be resolved by agreement of Landlord's firm of certified public
accountants and Tenant's firm of certified public accountants. Landlord and
Tenant shall adjust Tenant's obligation for Common Area Costs in accordance
with the final conclusion of such audit and/or dispute resolution. If any
such audit should result in a reduction in Tenant's liability for Common Area
Costs by more than five percent (5%) of the total shown on the applicable
annual operating cost statement, then Landlord shall reimburse Tenant for its
reasonable costs for such audit.

         Section 4.06. LATE CHARGES. Tenant's failure to pay rent promptly
may cause Landlord to incur unanticipated costs. The exact amount of such
costs are impractical or extremely difficult to ascertain. Such costs may
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by any ground lease, mortgage or
trust deed encumbering the

<PAGE>

Property. Therefore, if Landlord does not receive any rent payment within ten
(10) days after Tenant's receipt of written notice of Tenant's failure to
make such payment, Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount, provided, however, Landlord hereby waives
payment of such late charge for the first such delinquency by Tenant in any
period of twelve (12) consecutive months. The parties agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of such late payment.

         Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid within thirty (30) days after such
amount is due shall bear interest at the rate of fifteen percent (15%) per
annum from the due date of such amount. HOWEVER, INTEREST SHALL NOT BE
PAYABLE ON LATE CHARGES TO BE PAID BY TENANT UNDER THIS LEASE. The payment of
interest on such amounts shall not excuse or cure any default by Tenant under
this Lease. If the interest rate specified in this Lease is higher than the
rate permitted by law, the interest rate is hereby decreased to the maximum
legal interest rate permitted by law.

         Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY
TAXES. If Tenant is more than ten (10) days late in the payment of rent more
than twice in any consecutive twelve (12) month period, Tenant shall pay
Landlord a sum equal to one-twelfth (1/12) of the annual Real Property Taxes
and insurance premiums payable by Tenant under this Lease, together with each
payment of Base Rent. Landlord shall hold such payments in a non-interest
bearing impound account. If unknown, Landlord shall reasonably estimate the
amount of real property taxes and insurance premiums when due. Tenant shall
pay any deficiency of funds in the impound account to any obligation then due
under this Lease.

ARTICLE FIVE:  USE OF PROPERTY.

         Section 5.01. PERMITTED USES. Tenant may use the Property only for
the Permitted Uses set forth in Section 1.06 above.

         Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes
with the rights of other tenants of Landlord, or which constitutes a nuisance
or waste. Tenant shall obtain and pay for all permits, except the Certificate
of Occupancy and any other construction-related permits, required for
Tenant's occupancy of the Property and shall promptly take all actions
necessary to comply with all applicable statutes, ordinances, rules,
regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act. Landlord shall
obtain and pay for all construction-related permits including a certificate
of shell completion for the Building and assist Tenant in obtaining a
Certificate of Occupancy for the Property subject to installation by Tenant
of its fixtures and equipment.

         Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials" or
"toxic substances" now or subsequently regulated under any applicable
federal, state or local laws or regulations, including, without limitation
petroleum-based products, paints, solvents, lead, cyanide, DDT, printing
inks, acids, pesticides, ammonia compounds

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and other chemical products, asbestos, PCBs and similar compounds, and
including any different products and materials which are subsequently found
to have adverse effects on the environment or the health and safety of
persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant, its agents, employees, contractors, sublessees
without the prior written consent of Landlord except for those substances
used in the ordinary course of business of the Tenant so long as such
substances are stored, transported, and disposed of in compliance with all
applicable federal, state, and local environmental laws and regulations.
Landlord shall be entitled to take into account such other factors or facts
as Landlord may reasonably determine to be relevant in determining whether to
grant or withhold consent to Tenant's proposed activity with respect to
Hazardous Material. In no event, however, shall Landlord be required to
consent to the installation or use of any storage tanks on the Property.

         Landlord hereby warrants and represents that, as of the date of this
Lease and the Commencement Date, to the best of Landlord's knowledge, (a) the
Property does not violate any environmental or other laws, statutes,
ordinances, or regulations, (b) the Property is free from Hazardous
Materials, and (c) Landlord has not committed any act or omission which will
result in any claim to be asserted against Tenant or the Demised Premises.
Landlord shall indemnify Tenant and hold Tenant harmless from and against any
and all claims, expenses, losses and liabilities suffered by Tenant based on
Landlord's breach of any of the foregoing warranties. The indemnity contained
herein shall survive the termination or expiration of this Lease.

         Section 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs
on the Property without Landlord's prior written consent. Tenant shall not
conduct or permit any auctions or sheriff's sales at the Property. Landlord
shall furnish a free-standing, monument style sign support for Tenant's
identity sign, which sign shall comply with Landlord's sign criteria.
Landlord shall also allow Tenant to place directional signs on the exterior
of the Property subject to compliance with Landlord's sign criteria.

         Section 5.05.  INDEMNITY.

         (a) Except for insured losses and subject always to Section
4.04(d)(iv) herein, Tenant shall indemnify Landlord against and hold Landlord
harmless from any and all costs, claims or liability arising from: (a)
Tenant's use of the Property; (b) the conduct of Tenant's business or
anything else done or permitted by Tenant to be done in or about the
Property, including any contamination of the Property or any other property
resulting from the presence or use of Hazardous Material caused or permitted
by Tenant; (c) any breach or default in the performance of Tenant's
obligations under this Lease; (d) any misrepresentation or breach of warranty
by Tenant under this Lease; or (e) other acts or omissions of Tenant. Tenant
shall defend Landlord against any such cost, claim or liability at Tenant's
expense with counsel reasonably acceptable to Landlord or, at Landlord's
election, Tenant shall reimburse Landlord for any legal fees or costs
incurred by Landlord in connection with any such claim. In no event shall
Tenant be liable hereunder for any consequential damages. As used in this
Section, the term "Tenant" shall include Tenant's employees, agents,
contractors and invitees, if applicable.

         (b) Except for insured losses and subject always to Section
4.04(d)(iv) herein, Landlord shall indemnify Tenant against and hold Tenant
harmless from any and all costs, claims, or liability arising from: (a)
Landlord's use of the Project;

<PAGE>

(b) any breach or default in the performance of Landlord's obligations under
this Lease; (c) any misrepresentation or breach of warranty by Landlord under
this Lease; or (d) other acts or omissions of Landlord. Landlord shall defend
Tenant against any such claim or liability at Landlord's expense with counsel
reasonably acceptable to Tenant or, at Tenant's election, Landlord shall
reimburse Tenant for any legal fees or costs incurred by Tenant in connection
with any such claim. In no event shall Landlord be liable hereunder for any
consequential damages or for damages arising out of the acts or omissions of
other tenants of the Project. As used in this Section, the term "Landlord"
shall include Landlord's employees, agents, contractors and invitees, if
applicable.

         Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter
the Property at all reasonable times to show the Property to potential
buyers, investors or tenants or other parties; to do any other act or to
inspect and conduct tests in order to monitor Tenant's compliance with all
applicable environmental laws and all laws governing the presence and use of
Hazardous Material; or for any other purpose Landlord deems necessary.
Landlord shall give Tenant prior notice of such entry, except in the case of
an emergency. Landlord may place customary "For Sale" or "For Lease" signs on
the Property.

         Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Property
for the full Lease Term, subject to the provisions of this Lease.

ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS

         Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property,
subject to all recorded matters, laws, ordinances, and governmental
regulations and orders. Except as provided herein, or in the attached Rider
and Exhibit B, Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation as to the condition of the Property or
the suitability of the Property for Tenant's intended use. Notwithstanding
any provision in this Lease to the contrary, Landlord represents, warrants
and covenants that upon the Rental Commencement Date, the Property will
comply with (at Landlord's expense) all applicable laws, regulations and
building codes, including, without limitation, the requirements of the
Americans with Disabilities Act and all regulations thereunder.

         Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall
not be liable for any damage or injury to the person, business (or any loss
of income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a)
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures or any other cause; (c)
conditions arising in or about the Property or upon other portions of the
Project, or from other sources or places; or (d) any act or omission of any
other tenant of the Project. Landlord shall not be liable for any such damage
or injury even though the cause of or the means of repairing such damage or
injury are not accessible to Tenant. The provisions of this Section 6.02
shall not, however, exempt Landlord from liability for any negligent or
willful act or omission of Landlord or Landlord's failure to make repairs
within a reasonable time after notice of the need for repairs, or to correct
defects in the Property in accordance with Landlord's obligations set out in
paragraph 6.03(b).

<PAGE>

         Section 6.03.  LANDLORD'S OBLIGATIONS.

         (a) Except as provided in Article Seven (Damage or Destruction) and
Article Eight (Condemnation), Landlord shall keep the following in good
order, condition and repair: the foundations, exterior walls and roof of the
Property (including painting the exterior surface of the exterior walls of
the Property not more than once every five (5) years, if necessary to
maintain the Property in the standard set out in the last sentence of this
paragraph), and all components of electrical, mechanical, plumbing, heating
and air conditioning systems and facilities located in the Property which are
concealed or used in common by tenants of the Project. Landlord shall also be
responsible for (a) maintaining the structural integrity of the demising wall
separating the Property from other space in the Building and for repairing
any damage to that wall caused by any act or omission of another Tenant, and
(b) repairing any part of the Property which is damaged as a result of any
defect in the foundations, floor or structural frame of the Building.
However, Landlord shall not be obligated to maintain or repair windows,
doors, plate glass or the interior surfaces of exterior walls. Landlord shall
make repairs under this Section 6.03 within a reasonable time after receipt
of written notice from Tenant of the need for such repairs. It is the
intention of Landlord and Tenant that at all times Landlord shall maintain
the portions of the Project which Landlord is obligated to maintain in an
attractive, first-class and fully operational condition.

         (b) In addition to the repair obligations set forth in Paragraph
6.03(a), Landlord shall correct any defects in the construction of the
Building or the Property which are brought to Landlord's attention within the
first twelve months following delivery of the Property to Tenant.

         Section 6.04.  TENANT'S OBLIGATIONS.

         (a) Except as provided in Article Seven (Damage Destruction) and
Article Eight (Condemnation), Tenant shall keep all portions of the Property
(including nonstructural, interior, systems and equipment) in good order,
condition and repair (including interior repainting and refinishing, as
needed). If any portion of the Property or any system or equipment in the
Property which Tenant is obligated to repair cannot be fully repaired or
restored, Tenant shall promptly replace such portion of the Property or
system or equipment in the Property, regardless of whether the benefit of
such replacement extends beyond the Lease Term; but if the benefit or useful
life of such replacement extends beyond the Lease Term (as such term may be
extended by exercise of any options), the useful life of such replacement
shall be prorated over the remaining portion of the Lease Term (as extended),
and Tenant shall be liable only for that portion of the cost which is
applicable to the Lease Term (as extended). Tenant shall maintain a
preventive maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system by a licensed heating
and air conditioning contractor. Except as to insured losses and subject
always to Section 4./04(d)(iv) herein, if any part of the Property is damaged
by any act or omission of Tenant, Tenant shall pay Landlord the cost of
repairing or replacing such damaged property, whether or not Landlord would
otherwise be obligated to pay the cost of maintaining or repairing such
property. It is the intention of Landlord and Tenant that at all times Tenant
shall maintain the portions of the Property which Tenant is obligated to
maintain in an attractive, first-class and fully operative condition.

         (b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04, at Tenant's sole expense. If Tenant fails to maintain, repair
or replace the Property as required by this Section 6.04, Landlord may, upon
ten (10) days' prior notice to

<PAGE>

Tenant (except that no notice shall be required in the case of an emergency),
enter the Property and perform such maintenance or repair (including
replacement, as needed) on behalf of Tenant. In such case, Tenant shall
reimburse Landlord for all costs incurred in performing such maintenance or
repair immediately upon demand.

         Section 6.05.  ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

         (a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written consent, except
for non-structural alterations which do not exceed Fifty Thousand Dollars
($50,000.00) in cost cumulatively over the Lease Term and which are not
visible from the outside of any building of which the Property is part.
Notwithstanding the foregoing, Tenant shall have the right and privilege to
install, at its sole cost and without Landlord's further consent, a "wire
guidance system" within the warehouse floors of the Property with such wire
guidance system requiring that the floor of the warehouse be saw cut in order
to accept a low voltage wire down each of the pallet rack rows and extending
approximately fifteen feet (15') beyond the end of each row. Tenant shall
submit plans for installation of such "wire guidance system" for review and
approval by Landlord's structural engineer which approval shall not be
unreasonably withheld or delayed. Tenant shall follow the requirements of
Landlord's structural engineer for maintaining the structural integrity of
the warehouse floor. Tenant shall promptly remove any alterations, additions,
or improvements constructed in violation of this Paragraph 6.05(a) upon
Landlord's written request. All alterations, additions, and improvements
shall be done in a good and workmanlike manner, in conformity with all
applicable laws and regulations, and by a contractor approved by Landlord
which approval shall not be unreasonably withheld or delayed. Upon completion
of any such work, Tenant shall provide Landlord with "as built" plans, copies
of all construction contracts, and proof of payment for all labor and
materials.

         (b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Landlord's consent to such work is required. Landlord
may elect to record and post notices of non-responsibility on the Property.

         Section 6.06. CONDITION UPON TERMINATION. Upon the termination of
the Lease, Tenant shall surrender the Property to Landlord, broom clean and
in the same condition as received except for ordinary wear and tear which
Tenant was not otherwise obligated to remedy under any provision of this
Lease. However, Tenant shall not be obligated to repair any damage which
Landlord is required to repair under this Lease. In addition, Landlord may
require Tenant to remove any alterations, additions or improvements for which
Tenant was required to obtain Landlord's consent as required by Paragraph
6.05(a) provided that such consent when given was conditioned (as stated in
the writing evidencing such consent) upon Tenant's removal of such
alterations, additions or improvements upon termination of this Lease;
provided that Tenant shall not be required to remove the wire guidance system
installed as specified in Section 6.05 herein. Tenant shall remove any such
alterations, additions or improvements (other than said wire guidance system)
prior to the expiration of the Lease and restore the Property to its prior
condition, all at Tenant's expense. All alterations, additions and
improvements which Landlord has not required Tenant to remove shall become
Landlord's property and shall be surrendered to Landlord upon the expiration
or earlier termination of the Lease, except that Tenant may remove any of
Tenant's machinery, racking or equipment which can be removed without
material damage

<PAGE>

to the Property. Tenant shall repair, at Tenant's expense, any damage to the
Property caused by the removal of any such machinery, racking or equipment.
Except for any materials or equipment provided or installed by Tenant (which
shall not include the Additional Improvements as defined in the Rider), in no
event shall Tenant remove any of the following materials or equipment (which
shall be deemed Landlord's property) without Landlord's prior written
consent; any power wiring or power panels; lighting or lighting fixtures;
wall coverings; drapes, blinds or other window coverings; wall to wall
carpeting and tile flooring; heaters, air conditioners or any other heating
or air conditioning equipment; fencing or security gates; or other similar
building operating equipment and attached decorations.

ARTICLE SEVEN:  DAMAGE OR DESTRUCTION

         Section 7.01.  PARTIAL DAMAGE TO PROPERTY.

         (a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property can be restored
within ninety (90) days in the good faith estimation of Landlord's
contractor, this Lease shall remain in effect and Landlord shall repair the
damage as soon as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures, equipment, or
improvements.

         (b) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more than thirty (30)
days to repair, either Landlord or Tenant may elect to terminate this Lease
as of the date the damage occurred, regardless of the sufficiency of any
insurance proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within thirty (30)
days after Tenant's notice to Landlord of the occurrence of the damage.

         Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If restoration of
the Property will require more than ninety (90) days in the good faith
estimation of Landlord's contractor, either Landlord or Tenant may terminate
this Lease as of the date the destruction occurred. If neither party so
elects, Landlord shall proceed diligently to repair the damage as soon as
reasonably possible.

         Section 7.03. NO TEMPORARY REDUCTION OF RENT. Tenant shall not be
entitled to any compensation, reduction in Base Rent, insurance premiums and
real property taxes, provided that the Property is restored within the 90-day
period set out in Section 7.02 above, or reimbursement from Landlord as a
result of any damage, destruction, repair, or restoration of or to the
Property.

         Section 7.04. WAIVER. Tenant waives the protection of any statute,
code or judicial decision which grants a tenant the right to terminate a
lease in the event of the substantial or total destruction of the leased
property. Tenant agrees that the provisions of Section 7.02 above shall
govern the rights and obligations of Landlord and Tenant in the event of any
substantial or total destruction to the Property.

ARTICLE EIGHT:  CONDEMNATION

         If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are
called

<PAGE>

"Condemnation"), this Lease shall terminate as to the part taken or sold on
the date the condemning authority takes title or possession, whichever occurs
first. If more than twenty percent (20%) of the floor area of the building in
which the Property is located is taken, either Landlord or Tenant may
terminate this Lease as of the date the condemning authority takes title or
possession, by delivering written notice to the other within ten (10) days
after receipt of written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority takes title or
possession). If neither Landlord nor Tenant terminates this Lease, this Lease
shall remain in effect as to the portion of the Property not taken, except
that the Base Rent and Additional Rent shall be reduced in proportion to the
reduction in the floor area of the Property. Any Condemnation award or
payment shall be distributed in the following order: (a) first, to any ground
lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property; (b) second, to Tenant,
only the amount of any award specifically designated for loss of or damage to
Tenant's trade fixtures or removable personal property, or for the
interruption of Tenant's business or cost of moving Tenant's property; and
(c) third, to Landlord, the remainder of such award, whether as compensation
for reduction in the value of the leasehold, the taking of the fee, or
otherwise. If this Lease is not terminated, Landlord shall repair any damage
to the Property caused by the Condemnation, except that Landlord shall not be
obligated to repair any damage for which Tenant has been reimbursed by the
condemning authority. If the severance damages received by Landlord are not
sufficient to pay for such repair, Landlord shall have the right to either
terminate this Lease or make such repair at Landlord's expense.

ARTICLE NINE:  ASSIGNMENT AND SUBLETTING

         Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the
Property or of Tenant's interest in this Lease may be acquired by any other
person or entity, whether by sale, assignment, mortgage, sublease, transfer,
operation of law, or act of Tenant, without Landlord's prior written consent,
except as provided in Section 9.02 below. Landlord has the right to grant or
withhold its consent as provided in Section 9.04 below. Any attempted
transfer without consent shall be void and shall constitute a non-curable
breach of this Lease. If Tenant is a corporation, any change in the ownership
of a controlling interest of the voting stock of the corporation shall
require Landlord's consent, except a sale, gift or other conveyance of stock
or other interest in Tenant from any owner thereof to a member of that
owner's family or a trust or other entity for the benefit of such family
member.

         Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or
sublease the Property, without Landlord's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume
writing all of Tenant's obligations under this Lease.

         Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release
Tenant or change Tenant's primary liability to pay the rent and to perform
all other obligations of Tenant under this Lease. Landlord's acceptance of
rent from any other person is not a waiver of any provision of this Article
Nine. Consent to one transfer is not a consent to any subsequent transfer. If
Tenant's transferee defaults under this Lease, Landlord may proceed directly
against Tenant without pursuing remedies against the transferee. Landlord may
consent to subsequent assignments or

<PAGE>

modifications of this Lease by Tenant's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Tenant's liability
under this Lease.

         Section 9.04. LANDLORD'S CONSENT. Tenant's request for consent to
any transfer described in Section 9.01 shall set forth in writing the details
of the proposed transfer, including the name, business and financial
condition of the prospective transferee, and any other reasonable information
Landlord deems relevant. Landlord shall have the right to withhold consent
only under the following circumstances; (i) the proposed use of the Property
is not a Permitted Use; (ii) the net worth and financial strength of the
proposed assignee or subtenant is not equal to or greater than that of
Tenant; or (iii) Tenant is not in compliance with all of its obligations
under the Lease. If Landlord elects to withhold its consent, Landlord shall
state in writing its reasons. If Landlord objects to a proposed assignment
solely because of the net worth and/or financial strength of the proposed
assignee, Tenant may nonetheless sublease (but not assign), all or a portion
of the Property to the proposed transferee, but only on the other terms of
the proposed transfer. Landlord shall not unreasonably delay Landlord's
response to any request for consent.

         Section 9.05. NO MERGER. No merger shall result from Tenant's
sublease of the Property under this Article Nine, Tenant's surrender of this
Lease or the termination of this Lease in any other manner. In the event of
any such surrender or termination of the lease, Landlord may terminate any or
all subtenancies or succeed to the interest of Tenant as sublandlord under
any or all subtenancies.

ARTICLE TEN: DEFAULTS; REMEDIES

         Section 10.01. COVENANTS AND CONDITIONS. Tenant's performance of
each of Tenant's obligations under this Lease is a condition as well as a
covenant. Tenant's right to continue in possession of the Property is
conditioned upon such performance. Time is of the essence in the performance
of all covenants and conditions.

         Section 10.02. DEFAULTS. Tenant shall be in material default under
this Lease:

         (a) If Tenant's abandonment or vacation of the Property results in
the cancellation of any insurance described in Section 4.04;

         (b) If Tenant fails to pay rent or any other charge within ten (10)
days after receipt of written notice of Tenant's failure to pay such rent or
charge when due;

         (c) If Tenant fails to perform any of Tenant's non-monetary
obligations under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30) days are
required to complete such performance, Tenant shall not be in default if
Tenant commences such performance within the thirty (30)-day period and
thereafter diligently pursues its completion. However, Landlord shall not be
required to give such notice if Tenant's failure to perform constitutes a
non-curable breach of this Lease. The notice required by this Paragraph is
intended to satisfy any and all notice requirements imposed by law on
Landlord and is not in addition to any such requirement.

<PAGE>

         (d)(i) If Tenant makes a general assignment or general arrangement
for the benefit of creditors; (ii) if a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or against
Tenant and is not dismissed within thirty (30) days; (iii) if a trustee or
receiver is appointed to take possession of substantially all of Tenant's
assets located at the Property or of Tenant's interest in this Lease and
possession is not restored to Tenant within thirty (30) days; or (iv) if
substantially all of Tenant's assets located at the Property or of Tenant's
interest in this Lease is subjected to attachment, execution or other
judicial seizure which is not discharged within thirty (30) days. If a court
of competent jurisdiction determines that any of the acts described in this
subparagraph (d) is not a default under this Lease, and a trustee is
appointed to take possession (or if Tenant remains a debtor in possession)
and such trustee or Tenant transfers Tenant's interest hereunder, then
Landlord shall receive, as Additional Rent, the excess, if any, of the rent
(or any other consideration) paid in connection with such assignment or
sublease over the rent payable by Tenant under this Lease.

         (e) If any guarantor of the Lease revokes or otherwise terminates,
or purports to revoke or otherwise terminate, any guaranty of all or any
portion of Tenant's obligations under the Lease. Unless otherwise expressly
provided, no guaranty of the Lease is revocable.

         Section 10.03. REMEDIES. On the occurrence of any material default
by Tenant, Landlord may, at any time thereafter, with or without notice or
demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have:

         (a) Terminate Tenant's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time
of the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the
time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which Landlord would have earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves Landlord could have reasonably avoided;(iii) the worth at the
time of the award of the amount by which the unpaid Base Rent, and other
charges which Tenant would have paid for the balance of the Lease Term after
the time of award exceeds the amount of such rental loss that Tenant proves
Landlord could have reasonably avoided; and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under the Lease or which in the ordinary
course of things would be likely to result therefrom, including, but not
limited to, any costs or expenses Landlord incurs in maintaining or
preserving the Property after such default, the cost of recovering possession
of the Property, expenses of reletting, including necessary renovation or
alteration of the Property, Landlord's reasonable attorneys' fee incurred in
connection therewith, and any real estate commission paid or payable. As used
in subparts (i) and (ii) above, the "worth at the time of the award" is
computed by allowing interest on unpaid amounts at the rate of fifteen
percent (15%) per annum, or such lesser amount as may then be the maximum
lawful rate. As used in subpart (iii) above, the "worth at the time of the
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). If Tenant has abandoned the Property, Landlord shall have the
option of (i) retaking possession of the Property and recovering from Tenant
the amount specified in this Paragraph 10.03(a), or (ii) proceeding under
Paragraph 10.03(b);

<PAGE>

         (b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant has abandoned the Property. In
such event, Landlord shall be entitled to enforce all of Landlord's rights
and remedies under this Lease, including the right to recover the rent as it
becomes due;

         (c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Property is
located.

         Section 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for
a postponement of any monthly rental payments, a period of "free" rent or
other rent concession, such postponed rent or "free" rent is called the
"Abated Rent". Tenant shall be credited with having paid all of the Abated
Rent on the expiration of the Lease Term only if Tenant has fully,
faithfully, and punctually performed all of Tenant's obligations hereunder,
including the payment of all rent (other than the Abated Rent) and all other
monetary obligations and the surrender of the Property in the physical
condition required by this Lease. Tenant acknowledges that its right to
receive credit for the Abated Rent is absolutely conditioned upon Tenant's
full, faithful and punctual performance of its obligations under this Lease.
If Tenant defaults and does not cure within any applicable grace period, the
Abated Rent shall immediately become due and payable in full and this Lease
shall be enforced as if there were no such rent abatement or other rent
concession. In such case, Abated Rent shall be calculated based on the full
initial rent payable under this Lease.

         Section 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term
or provision hereof to the contrary, the Lease shall terminate on the
occurrence of any act which affirms the Landlord's intention to terminate the
Lease as provided in Section 10.03 hereof, including the filing of an
unlawful detainer action against Tenant. On such termination, Landlord's
damages for default shall include all costs and fees, including reasonable
attorneys' fees that Landlord incurs in connection with the filing,
commencement, pursuing and/or defending of any action in any bankruptcy court
or other court with respect to the Lease; the obtaining of relief from any
stay in bankruptcy restraining any action to evict Tenant; or the pursuing of
any action with respect to Landlord's right to possession of the Property.
All such damages suffered (apart from Base Rent and other rent payable
hereunder) shall constitute pecuniary damages which must be reimbursed to
Landlord prior to assumption of the Lease by Tenant or any successor to
Tenant in any bankruptcy or other proceeding.

         Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right
or remedy shall not prevent it from exercising any other right or remedy.

ARTICLE ELEVEN. PROTECTION OF LENDERS.

         Section 11.01. SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any
lender which is acquiring a security interest in the Property or the Lease.
Tenant shall execute such further documents and assurances as such lender may
require, provided that Tenant's obligations under this Lease shall not be
increased in any material way (the performance of ministerial acts shall not
be deemed material), and Tenant shall not be deprived of its rights under
this Lease. Tenant's right to quiet possession of the Property during the
Lease Term shall not be disturbed if Tenant

<PAGE>

pays the rent and performs all of Tenant's obligations under this Lease and
is not otherwise in default. If any ground lessor, beneficiary or mortgagee
elects to have this Lease prior to the lien of its ground lease, deed of
trust or mortgage and gives written notice thereof to Tenant, this Lease
shall be deemed prior to such ground lease, deed of trust or mortgage whether
this Lease is dated prior or subsequent to the date of said ground lease,
deed of trust or mortgage or the date of recording thereof.

         Section 11.02. ATTORNMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee,
or purchaser at a foreclosure sale, Tenant shall attorn to the transferee or
successor to Landlord's interest in the Property and recognize such
transferee or successor as Landlord under this Lease. Tenant waives the
protection of any statute or rule of law which gives or purports to give
Tenant any right to terminate this Lease or surrender possession of the
Property upon the transfer of Landlord's interest.

         Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver,
within ten (10) business days of any request to do so, any instrument or
documents reasonably necessary or appropriate to evidence any such attornment
or subordination or agreement to do so.

         Section 11.04. ESTOPPEL CERTIFICATES. Upon Landlord's written
request, Tenant shall execute, acknowledge and deliver to Landlord a written
statement certifying: (i) that none of the terms or provisions of this Lease
have been changed (or if they have been changed, stating how they have been
changed); (ii) that this Lease has not been canceled or terminated; (iii) the
last date of payment of the Base Rent and other charges and the time period
covered by such payment; (iv) that Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating why); and (v)
such other representations or information with respect to Tenant or the Lease
as Landlord may reasonably request or which any prospective purchaser or
encumbrancer of the Property may require. Tenant shall deliver such statement
to Landlord within ten (10) business days after Landlord's request. Landlord
may give any such statement by Tenant to any prospective purchaser or
encumbrancer of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct. Landlord may give
Tenant notice of Tenant's failure to allow Tenant an additional period of
five (5) business days to respond. Failure of Tenant to deliver such
statement to Landlord within such five (5) day period shall entitle Landlord,
and any prospective purchaser or encumbrancer, to conclusively presume and
rely upon the following facts: (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by Landlord; (ii)
that this Lease has not been canceled or terminated except as otherwise
represented by Landlord; (iii) that not more than one month's Base Rent or
other charges have been paid in advance; and (iv) that Landlord is not in
default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.

         Section 11.05. TENANT'S FINANCIAL CONDITION. Within fifteen (15)
days after written request from Landlord, Tenant shall deliver to Landlord
such financial statements as Landlord reasonably requires to verify the net
worth of Tenant. Because Tenant is a reporting company, Landlord acknowledges
that the Tenant's furnishing of its most recent 10K or 10Q report which has
been filed with the appropriate governmental authority shall satisfy any
request made by Landlord pursuant to this section for Tenant to verify its
net worth. Tenant represents and warrants to Landlord that each such
financial statement (or 10K or 10Q report) is a true and accurate statement
as of the date of such statement. All financial statements shall be
confidential and shall be used only for the purposes set forth in

<PAGE>

this Lease. Tenant shall in no event be required to deliver more than one set
of financial statements in any calendar year, notwithstanding the foregoing.

ARTICLE TWELVE: LEGAL COSTS

         Section 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any
costs or expenses that the Nondefaulting Party incurs in connection with any
breach or default of the Defaulting Party under this Lease, whether or not
suit is commenced or judgment entered. Such costs shall include legal fees
and costs incurred for the negotiation of a settlement, enforcement of rights
or otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. The losing party in such action shall pay such
attorneys' fees and costs. Tenant shall also indemnify Landlord against and
hold Landlord harmless from all costs, expenses, demands and liability
Landlord may incur if Landlord becomes or is made a party to any claim or
action (a) instituted by Tenant against any third party, or by any third
party against Tenant, or by or against any person holding any interest under
or using the Property by license of or agreement with Tenant; (b) for
foreclosure of any lien for labor or material furnished to or for Tenant or
such other person; (c) otherwise arising out of or resulting from any act or
transaction of Tenant or such other person; or (d) necessary to protect
Landlord's interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended. Tenant shall
defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse Landlord for any legal fees or costs Landlord incurs in any
such claim or action. Landlord shall also indemnify Tenant against and hold
Tenant harmless from all costs, expenses, demands and liability Tenant may
incur if Tenant becomes or is made a party to any claim or action (a)
instituted by Landlord against any third party, or by any third party against
Landlord, or by or against any person holding any interest under or using the
Property by license of or agreement with Landlord; (b) for foreclosure of any
lien for labor or material furnished to or for Landlord or such other person;
(c) otherwise arising out of or resulting from any act or transaction of
Landlord or such other person; or (d) necessary to protect Tenant's interest
under this Lease in a bankruptcy proceeding, or other proceeding under Title
II of the United States Code, as amended. Landlord shall defend Tenant
against any such claim or action at Landlord's expense with counsel
reasonably acceptable to Tenant or, at Tenant's option, Landlord shall
reimburse Tenant for any legal fees or costs Tenant incurs in any such claim
or action.

         Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with Tenant's request for
Landlord's consent under Article Nine (Assignment and Subletting), or in
connection with any other act which Tenant proposes to do and which requires
Landlord's consent, not to exceed $500 in any one instance.

ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS

         Section 13.01. SURVIVAL. All representations and warranties of
Landlord and Tenant shall survive the termination of this Lease.

<PAGE>

         Section 13.02.  LANDLORD'S LIABILITY; CERTAIN DUTIES.

         (a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or the leasehold
estate under a ground lease of the Property at the time in question. Each
Landlord is obligated to perform the obligations of Landlord under this Lease
only during the time such Landlord owns such interest or title. Any Landlord
who transfers its title or interest is relieved of all liability with respect
to the obligations of Landlord under this Lease to be performed on or after
the date of transfer. However, each Landlord shall deliver to its transferee
all funds that Tenant previously paid if such funds have not yet been applied
under the terms of this Lease.

         (b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Landlord shall not be in default if such cure is commenced within such thirty
(30) day period and thereafter diligently pursued to completion.

         (c) Notwithstanding any term or provision herein to the contrary,
the liability of Landlord for the performance of its duties and obligations
under this Lease is limited to Landlord's interest in the Project, and
neither the Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.

         Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal
or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.

         Section 13.04. INTERPRETATION. The captions of the Articles or
Sections of this Lease are to assist the parties in reading this Lease and
are not a part of the terms or provisions of this Lease. Whenever required by
the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter genders
shall each include the other. In any provision relating to the conduct, acts
or omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Property
with Tenant's expressed or implied permission.

         Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS.
This Lease is the only agreement between the parties pertaining to the lease
of the Property and no other agreements are effective. All amendments to this
Lease shall be in writing and signed by all parties. Any other attempted
amendment shall be void.

         Section 13.06. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by
nationally recognized overnight courier service, shipping costs prepaid and
marked for next day delivery. Notices to Tenant shall be delivered to the
address specified in Section 1.03 above. Notices to Landlord shall be
delivered to the address specified in Section 1.02 above. All notices shall
be effective upon delivery. Either party may change its notice address upon
written notice to the other party.

<PAGE>

         Section 13.07. WAIVERS. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provision of this Lease
or its acceptance of rent shall not be a waiver and shall not prevent
Landlord from enforcing that provision or any other provision of this Lease
in the future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord. Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.

         Section 13.08. NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or
Tenant may require that a "Short Form" memorandum of this Lease executed by
both parties be recorded. The party requiring such recording shall pay all
transfer taxes and recording fees.

         Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord
or Tenant. However, Landlord shall have no obligation to Tenant's successor
unless the rights or interests of Tenant's successor are acquired in
accordance with the terms of this Lease. The laws of the state in which the
Property is located shall govern this Lease.

         Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant
is a corporation, each person signing this Lease on behalf of Tenant
represents and warrants that he has full authority to do so and that this
Lease binds the corporation. Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a certified copy of a resolution of
Tenant's Board of Directors authorizing the execution of this Lease or other
evidence of such authority reasonably acceptable to Landlord. If Tenant is a
partnership, each person or entity signing this Lease for Tenant represents
and warrants that he or it is a general partner of the partnership, that he
or it has full authority to sign for the partnership and that this Lease
binds the partnership and all general partners of the partnership. Tenant
shall give written notice to Landlord of any general partner's withdrawal or
addition. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a copy of Tenant's recorded statement of partnership or
certificate of limited partnership.

         Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.

         Section 13.12. FORCE MAJEURE. If either Landlord or Tenant cannot
perform any of its obligations due to events beyond such party's control, the
time provided for performing such obligations shall be extended by a period
of time equal to the duration of such events. Events beyond a party's control
include, but are not limited to, acts of God, war, civil commotion, labor
disputes, strikes, fire, flood or other casualty, shortages of labor or
material, government regulation or restriction and weather conditions. Except
as otherwise provided in Section 2.02, the foregoing provision shall not
apply to extend the obligation of either party to this Lease to pay money
required to be paid hereunder when due, specifically including without
limitation, the obligation of Tenant to pay rent hereunder.

         Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the
counterparts shall constitute a single binding instrument. Landlord's
delivery of this Lease to

<PAGE>

Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.

ARTICLE FOURTEEN: BROKERS

         Section 14.01. BROKER'S FEE. When this Lease is signed by and
delivered to both Landlord and Tenant, Landlord shall pay a real estate
commission to Tenant's Broker named in Section 1.08 above, if any, as
provided in Section 1.09 above.

         Section 14.02. AGENCY DISCLOSURE; NO OTHER BROKERS. Landlord and
Tenant each warrant that they have dealt with no other real estate broker(s)
in connection with this transaction except: Commercial Tennessee, Inc. and
Grubb & Ellis who represent the Tenant.

ARTICLE FIFTEEN: COMPLIANCE

         The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this Agreement,
including, but not limited to the Comprehensive Environmental Response
Compensation and Liability Act, and The Americans With Disabilities Act.



                 ADDITIONAL PROVISIONS ARE SET FORTH IN A RIDER.



         Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed the Rider
which is attached to or incorporated by reference in this Lease.


                                   "LANDLORD"

Signed on ___________________, 2000         CORPORATE ESTATES, INC.,
at _______________________________ a California corporation

                                            By:
                                               -----------------------
                                                    Linda M. Stanley
                                            Its:    President


Signed on ___________________, 2000       MITCHELL INVESTMENTS,
LLC at _______________________________  a Tennessee limited liability company

                                            By:
                                               -----------------------
                                                    Dudley Mitchell
                                            Its:    Chief Manager


<PAGE>


                                    "TENANT"

Signed on __________________, 2000          UNITED STATIONERS
at ________________________________         SUPPLY CO., an Illinois corporation

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