HOMEBASE, INC. REPLACEMENT EQUITY UNIT AGREEMENT

         This  Replacement  Equity  Unit  Agreement  ("Agreement")  is made  and
entered into as of December 9, 1999, by and between  HomeBase,  Inc., a Delaware
corporation (the "Company"), and John L. Price ("Employee").

         WHEREAS, the Executive Compensation Committee of the Board of Directors
of the Company  ("ECC") has  approved,  and Employee  has hereby  agreed to, the
cancellation of options to purchase shares of the Company's  Common Stock,  $.01
par value per share (the "Common Stock"), granted to Employee by the Company and
listed on Schedule I attached hereto and  incorporated  herein ("Old  Options");
and

         WHEREAS,  furthermore,  the ECC has approved the replacement of the Old
Options by  granting  to  Employee  the number of  Replacement  Units  ("Units")
indicated below, on the terms and conditions set forth herein;

         NOW,  THEREFORE,  in  consideration  of the foregoing  recitals and the
covenants set forth herein, the parties hereto agree as follows:

         1.  Cancellation  and  Replacement  of Old  Options.  The  Company  and
Employee  hereby  acknowledge and agree that (i)  concurrently  herewith the Old
Options are hereby cancelled and are no longer of any force and effect, and (ii)
the Units hereby  granted to Employee are in  replacement of and not in addition
to the Old Options.

         2. Grant of Units:  Certain Terms and  Conditions.  The Company  hereby
grants to Employee,  and Employee hereby accepts,  20,000 Units,  subject to the
vesting  schedule  indicated below and all of the terms and conditions set forth
in this Agreement.

               Number of Units                              Vesting Date

                    4,000                                   April 1, 2001

                    6,000                                   April 1, 2002

                   10,000                                   April 1, 2003

         Notwithstanding  any other  provision  hereof,  if a Change of  Control
Event (as defined in Annex A hereto)  occurs,  all of the Units  granted  hereby
shall become fully vested and non-forfeitable.

         3. Payment of Vested  Units.  A cash payment in respect of vested Units
shall be made to Employee  not later than the 15th of April  following  the date
such Unit vests and shall equal the applicable number of vested Units multiplied
by the lesser of (a) $8.00 or (b) the  greater of (i) $5.00 or (ii) the  average
closing  price of the Common Stock (as reported in the Wall Street  Journal) for
the first five trading days immediately  following the Company's annual earnings
release in respect of the Company's  fiscal years ending in January 2001,  2002,
or 2003, as the case may be.  Notwithstanding  the  foregoing,  if Units vest by
reason of a Change of  Control  Event,  a cash  payment in respect of such Units
shall be made to  Employee  as soon as  practicable  after the Change of Control
Event and shall equal the applicable number of Units multiplied by the lesser of
(x) $8.00,  or (y) the  greater of (i) $5.00 or (ii) the tender  offer price per
share of Common Stock in the case of a cash  transaction or the average  closing
price for the Common Stock (as reported in the Wall Street Journal) for the five
trading days immediately  preceding the Change of Control Event date in the case
of a noncash transaction.

         4. Forfeitures.  If Employee's  employment with the Company  terminates
for any  reason,  any  Units  remaining  unvested  as of the date of  employment
termination shall be forfeited.

         5. Adjustment to Common Stock.  In the event of any stock split,  stock
dividend, recapitalization,  reorganization, merger, consolidation, combination,
exchange  of  shares,   liquidation,   spin-off  or  other  similar   change  in
capitalization  or event,  or any  distribution to holders of Common Stock other
than a normal cash  dividend,  the number of Units  and/or the cash  payment for
Units  described  in Section 3 hereof  shall be  appropriately  adjusted  by the
Company (or  substituted  awards may be made, if  applicable)  to the extent the
Board of Directors shall determine,  in good faith,  that such an adjustment (or
substitution) is necessary and appropriate.

         6. Transferability of Units. Neither the Units nor any interest therein
may be sold,  assigned,  conveyed,  gifted,  pledged,  hypothecated or otherwise
transferred in any manner.

         7. Payment of Withholding  Tax. If the Company is obligated to withhold
an amount on account of any  federal,  state or local tax imposed as a result of
the redemption of the Units, including,  without limitation,  any federal, state
or other income tax, or any F.I.C.A.,  state  disability  insurance tax or other
employment  tax,  then the  Company  shall  deduct  such  amount from the amount
otherwise payable to Employee upon payment in respect of the Units.

         8.  Employment  Rights.  No provision of this Agreement or of the Units
granted  hereunder  shall (a) confer upon  Employee the right to continue in the
employ of the  Company,  (b) affect the right of the  Company to  terminate  the
employment of Employee,  with or without cause,  or (c) confer upon Employee any
right to participate in any employee welfare or benefit plan or other program of
the  Company.  Employee  hereby  acknowledges  and agrees  that the  Company may
terminate the  employment of Employee at any time and for any reason,  or for no
reason,  unless  Employee  and the Company  are parties to a written  employment
agreement that expressly provides otherwise.

         9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.



<PAGE>



         IN WITNESS  WHEREOF,  the Company and Employee  have duly executed this
Agreement as of the date just noted above.


                                                     HomeBase, Inc.


                                              By:    /s/Allan P. Sherman
                                                     ---------------------------
                                                        Allan P. Sherman
                                                        Chief Executive Officer
                                                        and President



                                                     /s/John L.Price

                                                        John L. Price
                                                        Vice President, General
                                                        Counsel and Secretary





<PAGE>



                      DEFINITION OF CHANGE OF CONTROL EVENT



         For the purpose of the Plan, a "Change of Control Event" shall mean:

         (a) The  acquisition  by an  individual,  entity or group  (within  the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934,
as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the
meaning  of Rule 13d-3  promulgated  under the  Exchange  Act) of 20% or more of
either (i) the then-outstanding shares of Common Stock (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then-outstanding  voting
securities  of the  Company  entitled  to  vote  generally  in the  election  of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for  purposes of this  subsection  (a),  the  following  acquisitions  shall not
constitute a Change of Control  Event:  (i) any  acquisition  directly  from the
Company,  (ii) any  acquisition  by the Company,  (iii) any  acquisition  by any
employee  benefit plan (or related trust) sponsored or maintained by the Company
or any  corporation  controlled by the Company,  or (iv) any  acquisition by any
corporation  pursuant to a transaction which satisfies the criteria set forth in
clauses (i), (ii) and (iii) of subsection (c) of this definition; or

         (b)  Individuals  who, as of the date hereof,  constitute  the Board of
Directors (the "Incumbent  Board") cease for any reason to constitute at least a
majority  of the  board;  provided,  however,  that any  individual  becoming  a
director  subsequently  to the date hereof whose  election,  or  nomination  for
election by the  Company's  stockholders,  was  approved by a vote of at least a
majority  of  the  directors  when  comprising  the  Incumbent  Board  shall  be
considered  as  though  such  individual  were a member of the  Incumbent  Board
(except  that  this  proviso  shall not apply to any  individual  whose  initial
assumption  of  office  as a  director  occurs  as a  result  of an,  actual  or
threatened election contest with respect to the election or removal of directors
or other  actual or  threatened  solicitation  of proxies or  consents  by or on
behalf of a Person other than the Board); or

         (c) Consummation of a reorganization, merger or consolidation involving
the Company or a sale or other  disposition of all or  substantially  all of the
assets  of the  Company  (a  "Business  Combination"),  in  each  case,  unless,
immediately following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial  owners,  respectively,  of
the Outstanding  Company Common Stock and Outstanding  Company Voting Securities
immediately  prior to such Business  Combination  beneficially  own, directly or
indirectly,  more  than 60% of,  respectively,  the  then-outstanding  shares of
common  stock  and the  combined  voting  power of the  then-outstanding  voting
securities  entitled to vote  generally  in the  election of  directors,  of the
corporation  resulting from such Business  Combination (which as used in section
(c) of this definition shall include, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's  assets  either  directly  or  through  one or more  subsidiaries)  in
substantially the same proportions as their ownership, immediately prior to such
Business  Combination,  of the Outstanding  Company Common Stock and Outstanding
Company  Voting  Securities,  as the case may be, (ii) no Person  (excluding any
corporation  resulting from such Business  Combination  or any employee  benefit
plan (or related trust) of the Company or such  corporation  resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively,  the  then-outstanding  shares of common stock of the  corporation
resulting from such Business  Combination,  or the combined  voting power of the
then-outstanding  voting  securities of such corporation and (iii) at least half
of the members of the board of directors of the corporation  resulting from such
Business  Combination  were  members of the  Incumbent  Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

         (d)  Approval  by  the  stockholders  of  the  Company  of  a  complete
liquidation or dissolution of the Company.