<PAGE>   1
                                                                   EXHIBIT 10.57


                                 LEASE AGREEMENT
                                     BETWEEN
                      VALLEY FAIR IRVINGTON, LLC (LANDLORD)
                                       AND
                   VALUE CITY DEPARTMENT STORES, INC. (TENANT)
                         DATED AS OF SEPTEMBER 29, 1998
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                                TABLE OF CONTENTS

                                                                       PAGE

1.       Certain Definitions.............................................1

2.       Demise of Premises.............................................10

3.       Term...........................................................10

4.       Rent...........................................................11

5.       Net Lease; True Lease..........................................12

6.       Title and Condition............................................13

7.       Taxes; Insurance and Legal Requirements........................14

8.       Use............................................................14

9.       Maintenance and Repair.........................................15

10.      Liens..........................................................17

11.      Alterations....................................................17

12.      Condemnation...................................................18

13.      Insurance......................................................22

14.      Damage, Destruction............................................24

15.      Restoration....................................................25

16.      Subordination to Financing.....................................26

17.      Assignment, Subleasing.........................................28

18.      Permitted Contests.............................................30

19.      Default........................................................31

20.      Landlord's Remedies............................................32

21.      Notices........................................................35

22.      Memorandum of Lease; Estoppel Certificates.....................36

23.      Surrender and Holding Over.....................................37

24.      No Merger of Title.............................................37


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25.      Landlord Exculpation...........................................38

26.      Hazardous Materials............................................38

27.      Entry by Landlord..............................................39

28.      Financial Statements; Additional Information...................39

29.      No Usury.......................................................42

30.      Broker.........................................................42

31.      Waiver of Landlord's Lien......................................42

32.      No Waiver......................................................42

33.      Separability...................................................42

34.      Indemnification................................................43

35.      Tenant to Comply With Reciprocal Easement Agreement............43

36.      Headings.......................................................45

37.      Modifications..................................................45

38.      Successors, Assigns............................................45

39.      Counterparts...................................................46

40.      Governing Law..................................................46

41.      Lender as Third Party Beneficiary..............................46

42.      Exculpation of Trustee.........................................46

43.      Substitution of Premises.......................................46

44.      Event Purchase Offer...........................................49

45.      Warranties.....................................................50


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                                LIST OF EXHIBITS


Exhibit 1           Permitted Encumbrances

Exhibit 2           Leased Premises

Exhibit 3           Basic Rent

Exhibit 9           Repair Obligations

Exhibit 12-1        Purchase Price

Exhibit 12-2        Determination of Remainder Value and Leasehold Value

Exhibit 26          Environmental Obligations

Exhibit 43          Substitution Closing Requirements

Exhibit 45          Tenant's Warranties


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<PAGE>   5
         THIS LEASE AGREEMENT is made as of the 29th day of September, 1998, by
and between VALLEY FAIR IRVINGTON, LLC, an Ohio limited liability company,
having an office at 1800 Moler Road, Columbus, Ohio 43207 ("Landlord"), and
Value City Department Stores, Inc., an Ohio corporation, having its principal
office at 3241 Westerville Road, Columbus, Ohio 43224 ("Original Tenant").

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

         1.       Certain Definitions.

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

         (b) "Additions to Purchase Price" shall mean Additions to Purchase
Price as defined in Paragraph 12(b).

         (c) "Adjoining Property" shall mean all real estate adjoining the
Leased Premises, including without limitation all sidewalks, curbs, gores and
vault spaces.

         (d) "Affiliate" means, with respect to any person or entity, a person
or entity directly or indirectly controlling, controlled by, or under common
control with, such person or entity. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by"
and "under common control with") means the possession directly or indirectly of
the power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of voting securities or by contract or
otherwise.

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

         (f) "Assignee Tenant" shall mean any Qualified Entity to which the
Original Tenant's interest in this Lease has been assigned pursuant to Paragraph
17 hereof.

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

         (h) "Basic Rent Payment Date" shall mean Basic Rent Payment Date as
defined in Paragraph 4.

         (i) "Closing Date" shall mean Closing Date as defined in Paragraph
12(b).

         (j) "Commencement Date" shall mean September 29, 1998.
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         (k) "Condemnation" shall mean a Taking and/or a Requisition.

         (l) "Corporate Creditworthiness Rating" shall mean a Corporate
Creditworthiness Rating issued by Standard & Poors Rating Services pursuant to a
Private Letter Rating which may be relied on by Landlord and Lender, or a
comparable private letter credit rating issued by Moody's Investors Services,
Inc., Duff & Phelps Credit Co., NAIC or Fitch Investors Service, which may be
relied on by Landlord and Lender.

         (m) "Default Purchase Offer" shall mean Default Purchase Offer as
defined in Paragraph 20(d).

         (n) "Default Rate" shall mean an annual rate of interest equal to the
greater of (i) two (2%) percent per annum above the therein current Prime Rate
and (ii) the rate of interest chargeable under any Note following the occurrence
of an event of default thereunder or under the Mortgage securing such Note,
provided that in no event shall the Default Rate exceed the rate of interest
chargeable under such Note prior to an event of default thereunder plus five
percent (5%) per annum.

         (o) "Discount Rate" shall mean as of the date of determination the
then yields (which shall be converted to monthly yields) on U.S. Treasury
securities maturing nearest the end of the Term (without regard to any Executory
Renewal Terms.)

         (p) "Easements" shall mean Easements as defined in Paragraph 35(a).

         (q) "Environmental Laws" shall mean all federal and state statutes
regulating dangerous, hazardous and toxic substances, including, without
limitation, the federal and state statutes referred to in the definition of
Hazardous Materials and all rules and regulations promulgated pursuant thereto,
as the same may be from time to time amended.

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

         (s) "Executory Renewal Term" shall mean any potential Renewal Term as
to which Tenant has not waived its right to cancel pursuant to Paragraph 3.

         (t) "Expiration Date" shall mean the last day of the Term as the same
may be extended pursuant to this Lease.

         (t.2) "Financial Event" shall mean Financial Event as defined in
Paragraph 44.

         (u) "Guaranties" shall mean Guaranties as defined in Paragraph 6(c).

         (v) "Hazardous Materials" shall mean and include, without limitation,
all chemicals, petroleum, crude oil or any fraction thereof,


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hydrocarbons, polychlorinated biphenyls (PCBs), asbestos, asbestos-containing
materials and/or products, urea formaldehyde, or any substances which are
classified as "hazardous" or "toxic" under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.;
hazardous waste as defined under the Solid Waste Disposal Act, as amended 42
U.S.C. Section 6901; air pollutants regulated under the Clean Air Act, as
amended 42 U.S.C. Section 7401, et seq., any pesticide as defined by Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. Section 136,
et seq., any hazardous chemical substance or mixture or imminently hazardous
substance or mixture regulated by the Toxic Substances Control Act, as amended,
15 U.S.C. Section 2601, et seq. any substance listed in the United States
Department of Transportation Table at 45 CFR 172.101; any chemicals included in
regulations promulgated under the above-listed statutes or any modifications
thereof or successor statutes thereto; any explosives, radioactive material, and
any chemical regulated by state statutes similar to the federal statutes listed
above and regulations promulgated under such state statutes.

         (w) "Improvements" shall mean the Improvements as defined in Paragraph
2.

         (x) "Indemnified Parties" shall mean Indemnified Parties as defined in
Paragraph 26(b).

         (y) "Insurance Requirement" or "Insurance Requirements" shall mean, as
the case may be, any one or more of the terms of each insurance policy required
to be carried by Tenant pursuant to this Lease, including without limitation
insurance policies required to be maintained by Tenant or Tenant's contractor
while Tenant is engaged in making any Alteration, Restoration, repairs or
construction work of any kind (collectively, "Work").

         (z) "Insured Improvements" shall mean Insured Improvements as defined
in Paragraph 13(a).

         (aa) "Interim Term" shall mean the Interim Term as defined in Paragraph
4.

         (bb) "Land" shall mean the Land as defined in Paragraph 2.

         (cc) "Landlord" shall mean the entity identified as such in the first
sentence of this Lease and any and all successors in interest thereto with
respect to any or all of the rights or interests of Landlord under this Lease.

         (dd) "Landlord's Interest" shall mean Landlord's Interest as defined in
Paragraph 42.

         (ee) "Late Charge" shall mean the Late Charge as defined in Paragraph
4(b).

         (ff) "Law" shall mean any constitution, statute, ordinance, regulation
or rule of law.


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         (gg) "Leased Premises" shall mean the Leased Premises as defined in
Paragraph 2.

         (hh) "Legal Requirement" or "Legal Requirements" shall mean, as the
case may be, any one or more of (i) all present and future laws, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements, even if unforeseen or extraordinary, of every duly constituted
governmental authority or agency (but excluding those which by their terms are
not applicable to and do not impose any obligation on any of Tenant, Landlord or
the Leased Premises), including, without limitation, all zoning and building
ordinances, and (ii) all covenants, restrictions and conditions now or hereafter
of record which any be applicable to any of Tenant, Landlord or the Leased
Premises, or to the use, manner of use, occupancy, possession, operation or
maintenance of the Leased Premises even if any such matter (A) necessitates
structural changes or improvements (including changes required to comply with
the "Americans with Disabilities Act" as from time to time amended) or results
in interference with the use or enjoyment of any part or all of the Leased
Premises, or (B) requires Tenant to carry insurance other than as otherwise
required by the provisions of this Lease.

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

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

         (kk) "Modifications" shall mean Modifications as defined in Paragraph
35(a).

         (ll) "Monthly Fair Market Rent" shall mean the Monthly Fair Market rent
as defined in Paragraph 12(b).

         (mm) "Mortgage" shall mean a first priority mortgage, deed of trust or
similar security instrument now or hereafter encumbering the Leased Premises
executed by Landlord in favor or Lender and, if delivered as additional security
for the Note secured by a Mortgage, any assignment of leases, rents, profits or
the like.

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

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


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collecting such proceeds.

         (pp) "Note" or "Notes" shall mean a promissory note or notes now or
hereafter executed by Landlord in favor of Lender, which Note or Notes are or
will be secured in whole or in part by a Mortgage.

         (qq) "Notice" or "Notices" shall mean Notice or Notices as defined in
Paragraph 21.

         (rr) "Original Tenant" shall mean Value City Department Stores, Inc.,
an Ohio corporation, and any successor thereto by merger.

         (ss) "Permitted Encumbrances" shall mean the covenants, restrictions,
reservations, liens, conditions, encroachments, easements and other matters of
title that affect the Leased Premises as of the date hereof as listed in Exhibit
1 hereto, excepting, however, any such matters arising from the acts of Landlord
(such as liens arising as a result of judgments against Landlord).

         (tt) "Primary Term" shall mean the Primary Term as defined in Paragraph
3.

         (uu) "Prime Rate" shall mean the rate of interest announced publicly by
Citibank, N.A. or its successor, or from time to time, as Citibank N.A.'s or
such successor's base rate, or if Citibank, N.A. or its successor discontinues
the announcement of a base rate or substantially alters the meaning thereof,
such comparable "base" or "prime" rate of a major national bank designated by
Landlord in a written notice to Tenant.

         (vv) "Purchase Price" shall mean Purchase Price as defined in Paragraph
12(b).

         (ww) "Qualified Entity" shall mean an entity meeting the following
criteria:

         (i) If the entity has at least one issue of long term, unsecured
indebtedness outstanding which is the subject of a then applicable rating by one
or more of Standard & Poor's Rating Services, Moody's Investors Service, Inc. or
NAIC ("Rated Issue"), then no outstanding Rated Issue of the entity shall have a
rating by any one of the following rating agencies of less than the following:


<TABLE>
<CAPTION>
                                                Minimum Rated
          Agency                                Issue Rating
          ------                                ------------
<S>                                             <C>
Standard & Poor's Rating                           BBB-
     Services
Moody's Investors                                  Baa3
     Service, Inc.
NAIC                                                  2
</TABLE>


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<PAGE>   10
                  The entity will fail to qualify if an issue of indebtedness is
                  rated by one of the agencies at less than the applicable
                  minimum rating even if that issue is rated by one or both of
                  the other agencies at the applicable minimum rating or higher.

                       (ii) If the entity does not have a Rated Issue
                  outstanding, (A) the entity must obtain a Corporate
                  Creditworthiness Rating, and (B) no Corporate Creditworthiness
                  Rating by either of the following rating agencies may be less
                  than the
                  following:


<TABLE>
<CAPTION>
                                             Minimum Equivalency
          Agency                                   Rating
          ------                                   ------
<S>                                          <C>
Standard & Poor's Rating                            BBB-
     Services
Moody's Investors                                   Baa3
     Service, Inc.
</TABLE>

                  The entity will fail to qualify if it has a Corporate
                  Creditworthiness Rating by one of the agencies of less than
                  the applicable minimum rating even if the entity has a
                  Corporate Creditworthiness rating by the other agency of the
                  applicable minimum rating or higher.

                       (iii) In the case of either (i) or (ii), neither the
                  entity nor any issue of its indebtedness has been placed on
                  "credit watch" or the equivalent by Standard & Poor's Rating
                  Services, Moody's Investors Service, Inc. or NAIC.

         (xx) "Rated Issue" shall mean a Rated Issue as defined in Paragraph
1(yy)(i).

         (yy) "REA" shall mean an REA as defined in Paragraph 35(b).

         (zz) "Renewal Terms" shall mean the Renewal terms as defined in
Paragraph 3.

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

         (bbb) "Restoration" shall mean the restoration of the Leased Premises
after any Condemnation or damage by casualty as nearly as possible to their
value, condition and character existing immediately


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prior to such Condemnation or damage by casualty.

         (ccc) "Restoration Fund" shall mean Restoration Fund as defined in
Paragraph 15.

         (ddd) "SEC" shall mean SEC as defined in Paragraph 28(a).

         (eee) "Shareholder's Equity" shall mean the Shareholder's Equity as the
same is then shown, or would be then shown, taking into account the relevant
transaction(s) and occurrences, on Tenant's balance sheet, applying generally
accepted accounting principles consistent (insofar as applicable) with those
applied to Tenant's balance sheet dated as of April 30, 1998, as certified by
Coopers & Lybrand.

         (fff) "State" shall mean the State or Commonwealth in which the Leased
Premises are situate.

         (ggg) "Substitution Offer" shall mean a Substitution Offer as defined
in Paragraph 43.

         (hhh) "Substitute Premises" shall mean Substitute Premises as defined
in Paragraph 43.

         (iii) "Substitution Closing Date" shall mean the Substitution Closing
Date as defined in Paragraph 43.

         (jjj) "Substitution Deliveries" shall mean Substitution Deliveries as
defined in Paragraph 43.

         (kkk) "Survey" shall mean a current dated survey prepared by a surveyor
licensed in the State and certified to Landlord and Lender as having been
prepared in accordance with ALTA and State land survey standards.

         (lll) "Taking" shall mean any taking (other than a Requisition) of any
part or all of the Leased Premises in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceedings or by any other means, or any
de facto condemnation.

         (mmm) "Tangible Net Worth" of an entity shall mean the tangible net
worth of such entity as determined in accordance with generally accepted
accounting principles and based upon the entity's most recent 10Q or 10K or, if
the entity is not required to file a 10Q or 10K, its most recent annual
certified financial statements or, if the tangible net worth shown in any
subsequent quarterly financial statement of such entity (which in the case of
Tenant shall be the quarterly financial statement delivered to Landlord pursuant
to Paragraph 28 of this Lease) is less, the lowest tangible net worth so shown.

         (nnn) "Taxes" shall mean taxes of every kind and nature (including
real, ad valorem and personal property, gross income, gross


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<PAGE>   12
receipts, and rent taxes), all charges and/or taxes for any easement or
agreement maintained for the benefit of any part or all of the Leased Premises,
all general and special assessments, levies, permits, inspection and license
fees, all utility charges, all ground rents, and all other public charges and/or
taxes whether of a like or different nature, even if unforeseen or
extraordinary, imposed upon or assessed, prior to, during or in respect of the
Term, against Landlord, Tenant or any part or all of the Leased Premises as a
result of or arising in respect of the ownership, occupancy, leasing, use,
maintenance, operation, management, repair or possession thereof, or any
activity conducted on the Leased Premises, or the Basic Rent or Additional Rent,
including, without limitation, any gross income or rent tax, sales tax,
occupancy tax or excise tax levied by any governmental body on or with respect
to such Basic Rent or Additional Rent, provided that the term "Taxes" shall
exclude, federal, state or local (i) franchise, capital stock or similar taxes
if any, of Landlord, (ii) income, excess profits or other taxes, if any, of
Landlord, determined on the basis of or measured by its net income, or (iii) any
estate, inheritance, succession, gift, capital levy or similar taxes, except
that "Taxes" shall not exclude any taxes referred to in clauses (i) and (ii)
above if they are in lieu of or a substitute for any other tax or assessment
upon or with respect to any part or all of the Leased Premises which, if such
other tax or assessment is or would have been in effect at the commencement of
the Term, is or would be payable by Tenant.

         (ooo) "Tenant" shall mean the Original Tenant at all times and, if
Tenant's interest under this Lease is assigned to Qualified Entity, such
assignee, jointly and severally.

         (ppp) "Tenant in Possession" shall mean the Assignee Tenant, if any, in
possession of the Leased Premises or if there is no Assignee Tenant in
possession of the Leased Premises, the Original Tenant.

         (qqq) "Tenant's Insurance Payment" shall mean Tenant's Insurance
Payment as defined in Paragraph 14(c).

         (rrr) "Tenant's Offer to Purchase" shall mean Tenant's Offer to
Purchase as defined in Paragraph 12(b).

         (sss) "Tenant's Termination Notice" shall mean Tenant's Termination
Notice as defined in Paragraph 12(b).

         (ttt) "Term" shall mean collectively the Interim Term, if any, the
Primary Term and any Renewal Terms.

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

         (vvv) "Termination Notice" shall mean the Termination Notice as defined
in Paragraph 3.

         (www) "Trade Fixtures" shall mean all warehouse racking systems,
counters, cases, shelving and similar fixtures and items of personal property,
which are owned by Tenant and used in the operation


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<PAGE>   13
of the business conducted on the Leased Premises.

         (xxx) "Trustee" shall mean Trustee as defined in Paragraph 14(a).

         (yyy) "Work" shall mean Work as defined in Paragraph 1(y).

         (zzz) "Yield Maintenance" shall mean all prepayment premiums,
penalties, yield maintenance, any amounts payable in connection with a
defeasance of the Note and other charges, fees and expenses (other than
principal and interest) required to be paid in order for Landlord to obtain a
release of any Mortgage then constituting a lien on the Leased Premises as a
result of Landlord's acceptance of an Event Purchase Offer or a Default Purchase
Offer.

         2.       Demise of Premises.

         Landlord hereby demises and lets to Tenant and Tenant hereby takes and
leases from Landlord for the Term and upon the provisions hereinafter specified
the following described property (collectively, the "Leased Premises"): (a) the
premises described in Exhibit 2 attached hereto and made a part hereof together
with the easements, rights and appurtenances thereunto belonging or appertaining
(collectively, the "Land"); and (b) the buildings, structures, fixtures and
other improvements now or hereafter existing on the Land, together with all
additions and accessions thereto, substitutions therefor and replacements
thereof permitted by this Lease (collectively, the "Improvements"), excepting
therefrom Tenant's Trade Fixtures.


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<PAGE>   14
         3.       Term.

         Tenant shall have and hold the Leased Premises for the Interim Term and
a primary term (the "Primary Term") commencing on September 29, 1998 and ending
on October 2, 2018. Provided (i) this Lease shall not have been terminated
pursuant to the provisions hereof and (ii) no Event of Default shall exist at
anytime during the twelve (12) months prior to the Expiration Date of the then
current term, this Lease and the term thereof shall be automatically extended
for four (4) renewal terms of five (5) years each ("Renewal Term" and
collectively "Renewal Terms") upon condition that Tenant may cancel any Renewal
Term by giving notice (the "Termination Notice"), in accordance with the
provisions of Paragraph 21, to Landlord at least twelve (12) months prior to the
expiration of the then current Term. Upon the giving of a Termination Notice,
this Lease and the Term thereof shall terminate and come to an end on the
Expiration Date of the then current Term. Any such extension or renewal of the
Term shall be subject to all of the provisions of this Lease, and all such
provisions shall continue in full force and effect, except that the Basic Rent
for each Renewal Term shall be the amounts determined in accordance with Exhibit
3 attached hereto and made a part hereof and except that Tenant shall have no
right to extend the Term beyond the fourth (4th) Renewal Term. In the event that
Tenant exercises its option to cancel any Renewal Term as hereinabove provided,
then Landlord shall have the rights granted in Paragraph 27 during the remainder
of the Term then in effect to (i) advertise the availability of the Leased
Premises for sale or for reletting, and (ii) show the Leased Premises to
prospective tenants at such reasonable times during the normal business hours as
Landlord may select. If Tenant shall timely give a Termination Notice of its
election to cancel any renewal option, then all options with regard to
subsequent extensions or renewals of the Term shall expire and be null and void.

         4.       Rent.

         (a) Tenant shall pay to Landlord or Lender, if directed by Landlord, as
annual rent for the Leased Premises during the Term, the amounts determined in
accordance with Exhibit 3 attached hereto and made a part hereof ("Basic Rent"),
which rent shall be paid in equal monthly installments commencing on October 3,
1998 and continuing on the third day of each month thereafter during the Term
(each a "Basic Rent Payment Date"), and shall pay the same at Landlord's address
set forth below, or at such other place or to such other person or persons (not
exceeding four (4) in number at any one time) and in such proportions as
Landlord from time to time may designate to Tenant in writing, in funds which at
the time of such payment shall be legal tender for the payment of public or
private debts in the United States of America and if required by Lender by wire
transfer in immediately available federal funds to such account in such bank as
Lender shall designate from time to time. Pro rata Basic Rent for the period
from the Commencement Date to and including October 2, 1998 (the "Interim Term")
shall be computed as set forth in Exhibit 3 and shall be paid on the
Commencement Date.

         (b) If any installment of Basic Rent is not paid on the date due,
Tenant shall pay Landlord on demand (i) interest on such overdue


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<PAGE>   15
payment at the Default Rate, accruing from the due date of such payment until
the same is paid except that, with respect to the first such default which
occurs in any twelve (12) month period, such interest shall be waived if the
overdue payment and Late Charge are paid within two (2) business days following
receipt by Tenant of written notice of such default, and (ii) a late payment fee
equal to four (4) percent of the amount of such installment ("Late Charge") to
cover Landlord's administrative expenses. It is understood and acknowledged by
Tenant that the Late Charge shall accrue on the next business day following the
due date of any such monthly installment without notice or grace of any kind.
Tenant acknowledges that Landlord's actual administrative expenses would be
difficult to ascertain and the parties agree that the Late Charge as calculated
above is a reasonable estimate thereof.

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


                                       11
<PAGE>   16
         5.       Net Lease; True Lease.

         (a) It is the intention of the parties hereto that the obligations of
Tenant hereunder shall be separate and independent covenants and agreements, and
that Basic Rent, Additional Rent and all other sums payable by Tenant hereunder
shall continue to be payable in all events, and that the obligations of Tenant
hereunder shall continue unaffected, unless the requirement to pay or perform
the same shall have been terminated pursuant to an express provision of this
Lease. This is a net lease and Basic Rent, Additional Rent and all other sums
payable hereunder by Tenant shall be paid without notice or demand, and without
setoff, counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense of any nature. This Lease shall not terminate
and Tenant shall not have any right to terminate this Lease during the Term
(except as otherwise expressly provided herein). Tenant agrees that, except as
otherwise expressly provided herein, it shall not take any action to terminate,
rescind or avoid this Lease notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding-up
or other proceeding affecting Landlord, (ii) the exercise of any remedy,
including foreclosure, under the Mortgage, (iii) any casualty or Taking
affecting the Leased Premises, (iv) the imposition of any current or future
Legal Requirement upon the Leased Premises, or (v) any action with respect to
this Lease (including the disaffirmance hereof) which may be taken by Landlord
under the Federal Bankruptcy Code or by any trustee, receiver or liquidator of
Landlord or by any court under the Federal Bankruptcy Code or otherwise. Tenant
waives all rights which are not expressly stated herein but which may now or
hereafter otherwise be conferred by law to quit, terminate or surrender this
Lease or any part or all of the Leased Premises; to any setoff, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduction, reduction
or defenses of or to Basic Rent, Additional Rent or any other sums payable under
this Lease, except (1) as otherwise expressly provided herein; and (2) for any
counterclaim which must be interposed in any legal action involving this Lease
which if not interposed would be lost (i.e., a so-called compulsory
counterclaim) provided that any such compulsory counterclaim shall in no event
give rise to a setoff to or reduction or abatement of Basic Rent or Additional
Rent.

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

         (c) Tenant shall pay directly to the proper authorities charged with
the collection thereof all charges for water, sewer, gas, oil, electricity,
telephone and other utilities or services used or consumed on the Leased
Premises during or prior to the Term and all other charges costs imposed by any
Legal Requirement in respect of the Leased Premises, the use thereof or
activities conducted thereon, whether designated as a charge, tax, assessment,
fee or otherwise, including, without limitation, water and sewer use charges and
taxes, if any, all


                                       12
<PAGE>   17
such charges to be paid as the same from time to time become due. It is
understood and agreed that Tenant shall make its own arrangements for the
installation or provision of all such utilities and that Landlord shall be under
no obligation to furnish any utilities to the Leased Premises and shall not be
liable for any interruption or failure in the supply of any such utilities to
the Leased Premises.

         6.       Title and Condition.

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

         (b) Without limiting the effect of Landlord's covenant set forth in
Paragraph 8(c), the Landlord makes no, and expressly hereby denies any,
representations or warranties regarding the condition or suitability of, or
title to, the Leased Premises. Tenant agrees that it takes the Leased Premises
"AS IS," without any such representation or warranty.

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


                                       13
<PAGE>   18
         7.       Taxes; Insurance and Legal Requirements.

         (a) Tenant shall, subject to the provisions of Paragraph 18 hereof
relating to contests, before interest or penalties are due thereon, pay and
discharge all Taxes. Landlord shall promptly deliver to Tenant any bill or
invoice it receives with respect to any Tax. In the event that any assessment
against any part or all of the Leased Premises may be paid in installments,
Tenant shall have the option to pay such assessment in installments; and in such
event, Tenant shall be liable only for those installments (and all resulting
interest thereon) which become due and payable prior to, during or in respect of
the Term. Tenant shall prepare and file all tax reports required by governmental
authorities which relate to the Taxes. Tenant shall deliver to Landlord, within
thirty (30) days of Landlord's request thereof, copies of all settlements and
notices pertaining to the Taxes which may be issued by any governmental
authority and receipts for payments of all Taxes made during each calendar year
of the Term, within thirty (30) days after payment. In the event the Leased
Premises do not constitute a separate tax parcel as assessed by the local
jurisdiction, Tenant shall diligently take such action as is necessary to have
the Leased Premises so designated and, if necessary to prevent the enforcement
of a lien on the Leased Premises for non-payment of Taxes, shall pay all Taxes
assessed upon the tax parcel of which the Leased Premises are a part.

         (b) Tenant shall promptly comply with and conform and cause the Leased
Premises to comply with and conform to all of the Legal Requirements and
Insurance Requirements as the same shall apply to Tenant, Landlord and/or the
Leased Premises, subject to the provisions of Paragraph 18 hereof.

         8.       Use.

         (a) Tenant may use the Leased Premises for any lawful purpose other
than any use that will (i) have a material adverse effect on the value of the
Leased Premises, (ii) materially increase the likelihood that Tenant, Landlord
or Lender would incur liability under any provisions of Environmental Laws, or
(iii) result or give rise to any material environmental deterioration or
degradation of the Leased Premises; provided, however, no sublessee or assignee
shall use the Leased Premises for a use other than retail or office use without
the prior written consent of Landlord and Lender, which consent shall not be
unreasonably withheld or delayed. In no event shall the Leased Premises be used
for heavy manufacturing. In no event shall the Leased Premises be used for any
purpose which shall violate any Legal Requirement. Tenant agrees that with
respect to any recorded covenants, restrictions or agreements, Tenant shall
observe, perform and comply with and carry out the provisions thereof required
therein to be observed and performed by or imposed upon Landlord.

         (b) Subject to Tenant's rights of contest under Paragraph 18 hereof,
Tenant shall not permit any unlawful occupation, business or trade to be
conducted on any part or all of the Leased Premises or any use to be made
thereof contrary to applicable Legal Requirements or Insurance Requirements.
Subject to Tenant's rights of contest under


                                       14
<PAGE>   19
Paragraph 18 hereof, Tenant shall not use, occupy or permit any part or all of
the Leased Premises to be used or occupied, nor do or permit anything to be done
in or on any part or all of the Leased Premises, in a manner which would (i)
violate any certificate of occupancy or equivalent certificate affecting any
part or all of the Leased Premises, (ii) make void or voidable any insurance
which Tenant is required hereunder to maintain with respect to any part or all
of the Leased Premises, (iii) affect in any manner the ability of Tenant to
obtain any insurance which Tenant is required to furnish hereunder, (iv) cause
any injury or damage to any of the Improvements unless pursuant to Alterations
permitted under Paragraph 11 hereof, other than ordinary wear and tear, or (v)
constitute a public or private nuisance or waste.

         (c) Subject to all of the provisions of this Lease, so long as no Event
of Default exists hereunder, Landlord covenants that neither it nor any party
claiming by, through or under it, shall do any act to disturb the peaceful and
quiet occupation and enjoyment of the Leased Premises by Tenant. Landlord may
enter upon and examine any part or all of the Leased Premises at reasonable
times after reasonable notice and during business hours and exercise any rights
and privileges granted to Landlord under the provisions of this Lease.


                                       15
<PAGE>   20
         9.       Maintenance and Repair.

         (a) Except for any Alterations that Tenant is permitted to make
hereunder, Tenant shall at all times, including any Requisition period, put,
keep and maintain the Leased Premises, including, without limitation, the roof,
landscaping, parking areas, sidewalks, driveways, walls (interior and exterior),
footings, foundations and structural components of the Leased Premises and the
Adjoining Property, in good and safe repair and appearance and in conformity
with all Legal Requirements and Insurance Requirements, and shall promptly make
all repairs and replacements (substantially equivalent in quality and
workmanship to the original work) of every kind and nature, whether foreseen or
unforeseen, which may be required to be made upon or in connection with any part
or all of the Leased Premises in order to keep and maintain the Leased Premises
in good and safe repair and appearance and in conformity with all Legal
Requirements and Insurance Requirements. Tenant shall do or cause others t do
all shoring of the Leased Premises or Adjoining Property or of foundations and
walls of Improvements and every other act necessary or appropriate for
preservation and safety thereof, by reason of or in connection with any
excavation or other building operation upon any part or all of the Leased
Premises or Adjoining Property, whether or not Landlord shall, by reason of any
Legal Requirements or Insurance Requirements, be required to take such action or
be liable for failure to do so. Landlord shall no be required to make any
repair, whether foreseen or unforeseen, or to maintain any part or all of the
Leased Premises or Adjoining Property in any way, and Tenant hereby expressly
waives the right to make repairs at the expense of the Landlord, which right may
otherwise be provided for in any Law now or hereafter in effect. Nothing in the
preceding sentence shall be deemed to preclude Tenant from being entitled to the
use for Restoration of insurance proceeds or condemnation awards pursuant to the
terms of the Lease. Tenant shall, in ll events, promptly make, and pay the cost
of as due, all repairs and replacements for which it is responsible hereunder
promptly, and all repairs and replacements shall be done in a good, proper and
workmanlike manner.

         (b) If Tenant shall be in default under any of the provisions of this
Paragraph 9, Landlord may (but shall have no obligation to), after thirty (30)
days notice to Tenant and failure of Tenant to commence to cure during said
period or to diligently prosecute such cure to completion once begun, but
immediately upon notice in the event of an emergency (that is, imminent danger
of injury to persons or property), do whatever is necessary to cure such default
as may be reasonable under the circumstances for the account of and at the
expense of Tenant. In the event of an emergency, before Landlord may avail
itself of its rights under this Paragraph 9(b), Landlord shall send notice to
Tenant of the situation by phone or other available communication. All actual or
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) so incurred by Landlord, together with interest
thereon at the Default Rate from the date of payment or incurring the expense,
shall constitute Additional Rent payable by Tenant under this Lease and shall be
paid by Tenant to Landlord on demand. Landlord and Tenant agree that, in the
event of an emergency, expenditures which might otherwise be unreasonable (such
as overtime) may 


                                       16
<PAGE>   21
nevertheless be reasonable under the circumstances.

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

         (d) Tenant shall comply with the requirements set forth in Exhibit 9
attached hereto.

         10.      Liens.

         Tenant shall not, directly or indirectly, create or permit to be
created or to remain, and shall promptly discharge, any lien on any part or all
of the Leased Premises, Basic Rent, Additional Rent or any other sums payable by
Tenant under this Lease, other than the Mortgage, the Permitted Encumbrances and
any mortgage, lien, encumbrance or other charge created or resulting from any
affirmative act by Landlord or those claiming by, though or under Landlord
(except Tenant and its sublessee and assignees).


                                       17
<PAGE>   22
         11.      Alterations.

         Tenant shall not make any Alterations which would result, after giving
consideration to the completed alteration, in a diminution in the value of the
Leased Premises, without Landlord's prior written consent; provided, however, no
sublessee or assignee may make any Alterations which would change the use of the
Leased Premises from retail or office use without the prior written consent of
Landlord and Lender, which consent shall not be unreasonably withheld. Tenant
may make any other Alterations without the prior written consent of the Landlord
provided such Alterations comply with all of the provisions of the following
sentence. In the event that Landlord gives its prior written consent to any
Alterations, or if such consent is not required, Tenant agrees that in
connection with any Alteration (i) all such Alterations shall be performed in a
good and workmanlike manner, and shall be safely and expeditiously completed in
compliance with all Legal Requirements and shall be done only within the Land,
(ii) all work done in connection with any such Alterations shall comply with all
Insurance Requirements, (iii) Tenant shall promptly pay all costs and expenses
of any such Alteration, and shall discharge all liens filed against any part or
all of the Leased Premises arising out of the same, (iv) Tenant shall procure
and pay for all permits and licenses required in connection with any such
Alteration, (v) all such Alterations shall be the property of Landlord and shall
be subject to this Lease, and (vi) any Alteration the estimated cost of which in
any one instance or series of related instances exceeds Three Hundred Thousand
Dollars ($300,000) shall be made under the supervision of a licensed architect
or engineer in accordance with detailed plans and specifications which shall be
submitted to Landlord at least ten (10) days prior to the commencement of the
Alterations. Submission of the plans and specifications to Landlord shall be for
Landlord's information only and Landlord shall not have the right to approve the
same except that Landlord may use the plans and specifications to determine
whether Tenant has complied with this Paragraph 11 in going forward with such
Alterations. Upon completion of any Alteration or series of related Alterations
in excess of Three Hundred Thousand Dollars ($300,000). Tenant will provide to
Landlord and Lender as-built plans and specifications or final working plans and
specifications with the general contractor's field notes of changes made
thereto. Upon completion of any Alteration which alters the footprint of any
building, alters any driveway, parking area or other exterior improvement or
adds any physical structure to the Land, Tenant shall provide to Landlord a
revised Survey showing all such matters.


                                       18
<PAGE>   23
         12.      Condemnation.

         (a) Immediately upon obtaining knowledge of the institution of any
proceeding for Condemnation, Tenant shall notify Landlord and Lender thereof and
Landlord or Lender or both shall be entitled to participate in any Condemnation
proceeding at Tenant's expense. Landlord, immediately upon obtaining knowledge
of the institution of any proceeding for Condemnation, shall notify Tenant
thereof and Tenant shall have the right to participate in such proceedings at
its own expense. Subject to the provisions of this Paragraph 12 and Paragraph
15, Tenant hereby irrevocably assigns to Lender or to Landlord, in that order,
any award or payment in respect of any Condemnation of the Leased Premises,
except that nothing in this Lease shall be deemed to require the assignment to
Landlord or Lender of any award or payment on account of Tenant's Trade Fixtures
or other tangible personal property, and moving expenses, if available, to the
extent Tenant shall have a right to make a separate claim therefor against the
condemnor or have the same included in a single award to be separately allocated
between Landlord and Tenant, and such claim or allocation does not reduce the
award to which Landlord is or would be entitled for Condemnation of the Leased
Premises.

         (b) If (i) the entire Leased Premises or (ii) at least ten percent
(10%) of the Land or the Improvements, the loss of which even after Restoration
of the remainder of the Leased Premises would, in Tenant's reasonable business
judgment, be substantially and materially adverse to the business operations of
Tenant, shall be subject of a Taking by a duly constituted authority or agency
having jurisdiction, then Tenant shall, not later than sixty (60) days after
such Taking has occurred, serve notice upon Landlord ("Tenant's Termination
Notice") of its intention to terminate this Lease on any Basic Rent Payment Date
specified in such notice, which date (the "Termination Date") shall be no sooner
than the first Basic Rent Payment Date occurring at least one hundred fifty
(150) days after the date of Tenant's Termination Notice. In the event that the
Termination Date is on or prior to the Expiration Date of the Primary Term,
Tenant shall, as part of such notice, offer (which offer may be rejected by
Landlord as set forth below) to purchase the Leased Premises and the award, or
if no part of the Leased Premises shall remain, the entire award ("Tenant's
Offer to Purchase") for the applicable price computed in accordance with the
schedule annexed hereto and marked Exhibit 12-1 (the "Purchase Price") plus all
other amounts which may be or become due and owing to the Lender or Landlord by
reason of any default by Tenant in complying with its obligations under this
Lease (the "Additions to Purchase Price"). If Landlord and Lender shall not
elect to accept Tenant's Offer to Purchase, Landlord and Lender shall give
written notice rejecting such offer to Tenant within ninety (90) days after the
giving of Tenant's Termination Notice, in which case this Lease shall be
terminated as above provided. If this Lease shall be terminated during the
Primary Term and Landlord and Lender do not elect to accept Tenant's Offer to
Purchase or if this Lease is terminated pursuant to this Paragraph 12(b) during
a Renewal Term, the entire award made in the Condemnation proceeding for the
Leased Premises shall be paid as follows:

         (1) First to Lender, or if there is no Lender, to


                                       19
<PAGE>   24
    Landlord, an amount equal to the Purchase Price;

         (2) Then, to Landlord and Tenant in the proportion as the Remainder
    Value bears to the Leasehold Value.

         For purposes of the foregoing, (A) Remainder Value shall mean the fair
market value of the Leased Premises on the day preceding the Condemnation
unencumbered by this Lease, and (B) the Leasehold Value shall mean the excess,
if any, of (I) the Monthly Fair Market Rent of the Leased Premises for each
month remaining in the Term (excluding any Executory Renewal Terms) discounted
to present value at a discount rate equal to the Discount Rate over (II) the
monthly Basic Rent for each such month discounted to present value at a discount
rate equal to the Discount Rate. As used herein, "Monthly Fair Market Rent"
shall mean an amount of monthly rent for the Leased Premises equal to the then
current fair market rate of monthly net rentals received in the general market
area in which the Leased Premises are located pursuant to lease provisions
comparable to this Lease for a similar lease term with respect to buildings
having similar characteristics, including but not limited to age, condition and
classification and for tenants having financial condition similar to the then
financial condition of Original Tenant. The rental rate or other terms of any
then existing subleases of the Premises shall not be considered in establishing
Monthly Fair Market Rent. Unless the parties otherwise agree, Remainder Value
and Leasehold Value shall be determined pursuant to Exhibit 12-2.
Notwithstanding, the foregoing provisions, if any subtenant of the Premises
shall assert a claim to a portion of the Condemnation award, (x) Landlord shall
give Tenant a reasonable opportunity to participate in the defense and
settlement of such claim and (y) Tenant shall pay to Lender or Landlord or both
on demand an amount equal to the excess of (a) the portion of the Condemnation
award which would have been payable to Lender or Landlord, as applicable,
pursuant to this Paragraph 12(b) in the absence of any such subtenant claim over
(b) the portion of the Condemnation award actually paid to Lender and Landlord,
as applicable, after payment to such subtenant of the amount required to satisfy
its claim. Landlord's notice to reject Tenant's Offer to Purchase shall be void
and of no effect unless accompanied by the written notice of Lender to the
effect that Lender also rejects Tenant's Offer to Purchase. Should said notices
of Landlord and Lender rejecting Tenant's Offer to Purchase not be served within
said period of ninety (90) days, then and in that event, the said offer shall be
deemed accepted. In the event that Landlord and Lender shall accept or be deemed
to have accepted Tenant's Offer to Purchase, transfer of title shall close and
the Purchase Price and Additions to Purchase Price shall be paid as hereinafter
provided and in such event Tenant shall be entitled to and shall receive any and
all awards then or thereafter made in the Condemnation proceeding and Landlord
shall assign or, in case of any award previously made, deliver to Tenant on the
Closing Date such award as may have been received and retained by Landlord in
respect of such proceedings.

         In the event Landlord and Lender shall accept or be deemed to have
accepted Tenant's Offer to Purchase, payment of the purchase price and transfer
of title shall close on the Termination Date hereinbefore defined (the "Closing
Date"), at noon at the office of Landlord's 


                                       20
<PAGE>   25
counsel, or at such other time and place as the parties hereto may agree upon,
the Term shall be automatically extended to and including the Closing Date (or,
if applicable, the extended Closing Date hereinafter described and Tenant shall
pay the Purchase Price and Additions to Purchase Price by transferring
immediately available federal funds to such account or accounts and in such bank
or banks as Lender or Landlord, in that order, shall designate, upon delivery of
a covenant deed conveying the Leased Premises and all other required documents
including an assignment of any award in connection with such Taking. The deed
shall convey marketable fee title, including all of Landlord's right, title and
interest in the Leased Premises, free from encumbrances (including free and
clear of the Mortgage), other than (i) Permitted Encumbrances (other than the
Mortgage), (ii) liens or encumbrances created or suffered through or by Tenant
(or its sublessees or assignees) or by Landlord at the request or with the
consent of Tenant, (iii) any Taxes not theretofore paid, (iv) this Lease, and
(v) all Legal Requirements. Landlord may by written notice to Tenant extend the
Closing Date for a period of up to thirty-five (35) days. Such deed shall
contain an agreement by grantee to observe and perform all of the covenants,
conditions and restrictions contained in any instruments of record which were
assumed by Landlord or deemed to have been assumed by Landlord on its
acquisition of title or subsequently entered into by Landlord at the request or
with the consent of Tenant. The acceptance of a deed by Tenant shall be deemed
to be the full performance and discharge of every agreement and obligation on
the part of Landlord to be performed pursuant to the provisions of this Lease.
Tenant shall pay all conveyance, transfer, sales and like taxes, recording
charges and fees, escrow charges and title charges for any policy of title
insurance required by Tenant, required in connection with the purchase. If on
the Closing Date, there may be any liens or encumbrances which Landlord is
obligated to remove, the Closing Date shall be extended for a reasonable period
to permit Landlord to discharge such liens or encumbrances. Landlord shall not
be obligated to discharge any such lien or encumbrance if Tenant's title
insurance company shall issue, at no cost to Tenant, affirmative insurance
(including a commitment to issue future policies including such affirmative
insurance) to the effect that the same shall not be collected from or enforced
against the Leased Premises. If there be any liens or encumbrances against the
Leased Premises which Landlord is obligated to remove, upon request made a
reasonable time before the Closing Date, Landlord shall provide at the closing
separate funds for the foregoing, payable to the holder of such lien or
encumbrances or Landlord may use the funds payable at Closing by Tenant to
remove the same. If the Closing Date is extended pursuant to this grammatical
paragraph, the Termination Date shall be likewise extended.

         (c) In the event of any other Condemnation of part of the Leased
Premises which does not result in a Termination of this Lease, subject to the
requirements of Paragraph 15, the Net Award of such Condemnation shall be
delivered to Lender or Landlord, in that order, and, promptly after such
Condemnation, Tenant shall commence and diligently continue to perform the
Restoration (whether or not the Net Award shall be sufficient to pay the entire
cost thereof). Landlord and Lender shall, to the extent received, make the Net
Award available to Tenant for such purpose subject to conditions to disbursement
comparable 


                                       21
<PAGE>   26
to disbursement of Net Proceeds pursuant to Paragraph 15 below, and all Rent
shall continue unabated. Any balance of the Net Award remaining after completion
of the Restoration shall be retained by Landlord. In the event of a Requisition
of any part or all of the Leased Premises, the Net Award of such Requisition
shall be retained by Tenant and all Rent shall continue unabated provided that
if the Requisition affects the Leased Premises for any period after the Term,
the Net Award shall be equitably divided between Landlord and Tenant.

         (d) Except with respect to an award or payment to which Tenant is
entitled pursuant to the foregoing provisions of this Paragraph 12, no agreement
with any condemnor in settlement of or under threat of any Condemnation shall be
made by either Landlord or Tenant without the written consent of the other, and
of Lender, if the Leased Premises are then subject to a Mortgage, which consent
of Landlord, Tenant and Lender shall not be unreasonably withheld or delayed
provided such award or payment is applied in accordance with this Lease.

         (e) In the event of a Condemnation of any part or all of the Leased
Premises, Tenant shall continue to pay Base Rent and Additional Rent without
abatement, reduction or offset by reason of such Condemnation or otherwise
through and including the last day of the Term provided that, if this Lease is
terminated pursuant to Paragraph 12(a) above and whether or not Landlord and
Lender shall accept or be deemed to have accepted any Tenant's Offer to
Purchase, Tenant shall continue to pay Base Rent and Additional Rent through and
including the Termination Date.

         13.      Insurance.

         (a) Tenant shall maintain or cause to be maintained at its sole cost
and expense the following insurance on the Leased Premises:

                  (i) Insurance against loss or damage to the Improvements under
         an All Risk Policy, which shall include flood insurance (federal flood
         program may be used when necessary) and earthquake insurance, each to
         the extent applicable and obtainable and which may contain such
         exclusions as are standard in the industry. Such insurance shall be
         written on a replacement cost basis with an agreed upon value equal to
         the full insurable replacement values of the Improvements excluding
         footings and foundations and areas not within any structure (the
         portion of the Improvements not so excluded being referred to as the
         "Insured Improvements"), with a deductible not to exceed Two Hundred
         Fifty Thousand Dollars ($250,000) and in all events in amounts
         sufficient to prevent Landlord or Tenant from becoming a co-insurer
         under the applicable policies.

                  (ii) Contractual and commercial general liability insurance
         against claims for bodily 


                                       22
<PAGE>   27
         injury, death or property damage occurring on, in or about any part or
         all of the Leased Premises, which insurance shall be written on a
         so-called "occurrence basis," and shall provide minimum protection with
         a combined single limit in an amount not less than One Million Dollars
         ($1,000,000) (or in such increased limits from time to time to reflect
         declines in the purchasing power of the dollar as Landlord may
         reasonably request) with umbrella coverage of not less than Five
         Million Dollars ($5,000,000).

                  (iii) Workers' compensation insurance covering all persons
         employed by Tenant on the Leased Premises in connection with any Work
         done on or about any part or all of the Leased Premises.

                  (iv) When the completed estimated cost of any Work exceeds
         Five Hundred Thousand Dollars ($500,000), a completed value Builder's
         Risk policy, with a deductible not to exceed Two Hundred Fifty Thousand
         Dollars ($250,000).

         (b) The insurance required by Paragraph 13(a) shall be written by
companies having either (i) an insurance company claims paying rating equal to
or greater than A as ascribed by Standard & Poor's Rating Services. All
companies providing insurance required by Paragraph 13(a) shall be authorized to
engage in the insurance business in the State. The insurance policies shall be a
term of not less than one year. Property damage policies shall name Tenant as
named insured and Landlord and Lender as loss payees. Liability policies shall
name Tenant as named insured and Landlord and Lender as additional insureds as
their interests may appear. If said insurance or any part thereof shall expire,
be withdrawn, become void by breach of any condition thereof by Tenant or become
void, Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord and Lender.

         (c) Each insurance policy referred to above shall, to the extent
applicable, contain standard non-contributory mortgagee clauses in favor of any
Lender. Each policy required to be carried by Tenant shall also provide that any
loss otherwise payable thereunder shall be payable notwithstanding (i) any act
or omission of Landlord or Tenant which might, absent such provision, result in
a forfeiture of all or a part of such insurance payment, (ii) the occupation or
use of any part or al of the Leased Premises for purposes more hazardous than
permitted by the provisions of such policy, (iii) any foreclosure or other
action or proceeding taken by any Lender pursuant to any provision of the
Mortgage upon the happening of an event of default therein, or (iv) any change
in title or ownership of any part or all of the Leased Premises.

         (d) Tenant shall pay as they become due all premiums for the insurance
required by this Paragraph 13, shall renew or replace each policy, and shall
deliver to Landlord and Lender, a certificate or other evidence (reasonably
satisfactory to Lender and Landlord) of the existing 


                                       23
<PAGE>   28
policy and such renewal or replacement policy no later than ten (10) days prior
to such renewal or replacement. In the event of Tenant's failure to comply with
any of the foregoing requirements of this Paragraph 13 within five (5) days of
written notice from Landlord, Landlord shall be entitled to procure such
insurance. Any sums expended by Landlord in procuring such insurance shall be
Additional Rent and shall be repaid by Tenant upon written demand by Landlord,
together with interest thereon at the Default Rate, from the time of payment by
Landlord until fully paid by Tenant immediately upon written demand therefor by
Landlord.

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

         14.      Damage, Destruction.

         (a) In the event of any casualty loss exceeding Two Hundred Fifty
Thousand Dollars ($250,000), Tenant shall give Landlord and Lender immediate
notice thereof. Tenant shall adjust, collect and compromise any and all such
claims, with the consent of Lender and Landlord, not to be unreasonably withheld
or delayed, and Landlord and Lender shall have the right to join with Tenant
therein. If the estimated cost of Restoration or repair shall be Two Hundred
Fifty Thousand Dollars ($250,000) or less, all proceeds of any insurance
required under Paragraph 13(a) shall be payable to Tenant, provided that
Original Tenant and any Assignee Tenant at such time shall each have a Tangible
Net Worth of not less than Two Hundred Million Dollars ($200,000,000), and in
all other events to a Trustee which shall be a federally insured bank or other
financial institution, selected by Landlord and approved by Tenant and Lender,
such approval by Tenant and Lender not to be unreasonably withheld (the
"Trustee"); provided, however, if the Leased Premises shall be covered by a
Mortgage, Lender, if it so desires, shall be the Trustee. Each insurer is hereby
authorized and directed to make payment under said policies directly to such
Trustee instead of to Landlord and Tenant jointly; and Tenant hereby irrevocably
appoints such Trustee as Tenant's attorney-in-fact to endorse any draft therefor
for the purposes set forth in this Lease after approval by Tenant of such
Trustee, if Trustee is other than Lender.

         (b) In the event of any casualty (whether or not insured against)
resulting in damage to the Leased Premises or any part thereof, the Term shall
nevertheless continue and there shall be no abatement or reduction of Basic
Rent, Additional Rent or any other sums payable by Tenant hereunder. Promptly
after such casualty, Tenant shall commence 


                                       24
<PAGE>   29
and diligently continue to perform the Restoration to the Leased Premises. Upon
payment to the Trustee of the Net Proceeds, the Trustee shall make the Net
Proceeds available to Tenant for Restoration, in accordance with the provisions
of Paragraph 15. Tenant shall, whether or not the Net Proceeds are sufficient
for the purpose, promptly commence the Restoration and diligently continue the
same until final completion in accordance with all Insurance Requirements and
Legal Requirements and the provisions of this Lease (including Tenant's making
any desired Alternations allowed hereunder).

         (c) Tenant shall pay to the Trustee within fifteen (15) days following
any damage or destruction, the amount of any deductible applicable to the
Insured Improvements (the amount payable by tenant pursuant to this Paragraph
14(c) being referred to as "Tenant's Insurance Payment").

         15.      Restoration.

         The Net Proceeds and the Tenant Insurance Payment (together being
herein defined as the "Restoration Fund") held by the Trustee shall be disbursed
by the Trustee to pay the cost of Restoration subject to satisfaction of the
following conditions:

         (a) At the time of any disbursement, Tenant shall have deposited with
the Trustee all amounts which the Tenant is required to deposit pursuant to this
Lease, no Event of Default shall exist and no mechanics' or materialmen's liens
shall have been filed and remain undischarged and unbonded.

         (b) If the estimated cost of Restoration exceeds Two Hundred Fifty
Thousand Dollars ($250,000), prior to commencement of the Restoration, the
architects, contracts, contractors, plans and specifications for the Restoration
shall have been approved by Landlord and Lender, which approval shall not be
unreasonably withheld or delayed.

         (c) Each request for disbursement shall be accompanied by a certificate
of the Tenant in Possession, signed by the President, Treasurer or any Vice
President of the Tenant in Possession, describing the completed work for which
payment is requested, stating the cost incurred in connection therewith and
stating that Tenant has not previously received payment for such work; and the
certificate to be delivered by the Tenant in Possession upon completion of the
work shall, in addition, state that the work has been completed and complies
with the applicable requirements of this Lease and all Legal Requirements and
Insurance Requirements.

         (d) Disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement less
customary retentions upon receipt of (1) satisfactory evidence, including
architects' and general contractors' certificates, of the stage of completion,
of the estimated cost of completion and of performance of the work to date in a
good and workmanlike manner in accordance with the contracts, plans and
specifications approved by Landlord, (2) waivers of liens from the general
contractor and such other 


                                       25
<PAGE>   30
waivers of lien as are required by the title insurer, (3) a satisfactory bring
down of title insurance, and (4) other evidence of cost and payment so that
Landlord can verify that the amounts disbursed from time to time are represented
by work that is completed in place and free and clear of mechanics' lien claims.

         (e) At the direction of Landlord or Lender, the Trustee shall retain
ten percent from each disbursement of the Restoration Fund until the Restoration
is fully completed and the Leased Premises are available for their intended use,
in the reasonable judgment of the Landlord and Lender, including the issuance of
any necessary certificate of occupancy.

         (f) The Restoration Fund shall be kept by the Trustee in a separate
interest-bearing account or investment issued, guaranteed or insured by the
United States of America.

         Prior to commencement of Restoration and at any time during
Restoration, if the estimated cost of Restoration, as reasonably determined by
Landlord or Lender, exceeds the amount of the Restoration Fund, the amount of
such excess shall be paid by Tenant to the Trustee to be added to the
Restoration Fund prior to any further disbursement or Tenant shall fund at its
own expense the costs of such Restoration until the remaining Restoration Fund
is sufficient for the completion of the Restoration. Provided no Event of
Default then exists, any sum in the Restoration Fund which remains in the
Restoration Fund upon the final completion of Restoration shall be paid to
Tenant.


                                       26
<PAGE>   31
         16.      Subordination to Financing.

         (a) Subject to the following provisions of this Paragraph 16(a), Tenant
agrees that this Lease shall at all times be subject and subordinate to the lien
of any Mortgage. So long as no Event of Default shall be outstanding, Tenant's
tenancy and right of possession shall not be disturbed by Landlord or Lender or
any party claiming by, through or under Landlord or Lender, nor shall this Lease
be affected by any default under such Mortgage, and in the event of a
foreclosure or other enforcement of any such Mortgage, or sale or deed in lieu
thereof, the purchaser at such foreclosure sale or by any person claiming by,
through or under Lender shall be bound to Tenant for the Term of this Lease and
any extensions thereof, the rights of Tenant hereunder shall expressly survive,
and this Lease shall in all respects continue in full force and effect so long
as no Event of Default by Tenant has occurred and is continuing. So long as no
Event of Default by Tenant has occurred and is continuing, Tenant shall not be
named as a party defendant in any such foreclosure suit or other suit brought by
Lender seeking to realize upon its collateral, except as may be required by law,
but, so long as no Event of Default by Tenant has occurred and is continuing, in
no event shall any such foreclosure or other suit seek or result in termination
of Tenant's tenancy or rights of possession under this Lease. Any Mortgage to
which this Lease is now or hereafter subordinate shall provide, in effect, that
during the time this Lease is in force all Net Proceeds, Tenant's Insurance
Payments and Net Awards shall be permitted to be used for Restoration in
accordance with the provisions of this Lease. Upon any foreclosure, or the
delivery of a deed in lieu thereof or any other enforcement of the Mortgage,
neither Lender, its successor nor any purchaser at foreclosure or otherwise
shall disturb the tenancy or possession of any Qualified Entity referred to in
Paragraph 17(c) below that is entitled to nondisturbance as set forth in such
Paragraph (and fr whom nondisturbance has been requested at any time before the
occurrence of an Event of Default); provided, however, that the nondisturbance
of such Qualified Entity shall be subject in all cases to the conditions and
limitations set forth in Paragraph 17(c) below.

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

         (c) At any time prior to the expiration of the Term, Tenant agrees, at
the election and upon demand of any owner of the Leased Premises, or of Lender
who has granted non-disturbance to Tenant pursuant to Paragraph 16(a) above, to
attorn, from time to time, to any such owner or Lender, upon the then executory
terms and conditions of this Lease, for the remainder of the Term originally
demised in this Lease and for any Renewal Terms, provided that such owner or
Lender shall then be entitled to possession of the Leased Premises subject to
the provisions of this Lease. The provisions of this Paragraph 16(c) shall inure
to the benefit of any such owner or Lender, shall apply notwithstanding that, as
a matter of Law, this Lease may terminate upon the foreclosure of the 


                                       27
<PAGE>   32
Mortgage, shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to said provisions.

         (d) Each of Tenant, Landlord and Lender agrees that, if requested by
any of the others, each shall, without charge, enter into a Subordination,
Non-Disturbance and Attornment Agreement reasonably acceptable to Tenant,
Landlord and Lender, provided such agreement contains provisions relating to
non-disturbance and attornment in accordance with the provisions of this
Paragraph 16. Tenant hereby agrees for the benefit of Lender that Tenant will
not, without in each case the prior written consent of Lender, in its sole
discretion, (a) amend or modify the Lease, or enter into any agreement with
Landlord so to do, (b) cancel or surrender or seek to cancel or surrender the
Term hereof, or enter into any agreement with Landlord to do so (the parties
agreeing that the foregoing shall not be construed to affect the rights or
obligations of Tenant, Landlord or Lender with respect to any termination
pursuant to the express terms hereof in connection with an offer to purchase the
Leased Premises following certain events as provided in Paragraphs 12 and 20, or
(c) pay any installment of Basic Rent more than one (1) month in advance of the
due date thereof or otherwise than in the manner provided for in this Lease.

         17.      Assignment, Subleasing.

         (a) Tenant is currently in occupancy and is operating its business at
the Leased Premises. Landlord acknowledges that the cessation of business
operations at the Leased Premises by Original Tenant or any permitted sublessee
or assignee shall not, in and of itself, constitute an Event of Default under
this Lease. Tenant may assign its interest in this Lease or sublease the Leased
Premises without the prior written consent of Landlord provided Tenant complies
with all applicable provisions of this Paragraph 17. Tenant shall, however, give
Landlord and Lender prior written notice of Tenant's intent to assign its
interest in this Lease or sublease any portion of the Leased Premises promptly
upon electing to do so. No sublease under, or assignment of, this Lease (or any
rejection in bankruptcy or other default by any assignee or sublessee hereunder)
shall relieve the Original Tenant hereunder of any of its obligations hereunder,
for which it shall remain primarily liable, and upon any assignment or sublease
hereunder, the Original Tenant shall acknowledge in writing in favor of Landlord
and Lender that such obligations are not affected by such assignment, sublease
or rejection.

         (b) Each sublease of the Leased Premises or any part thereof shall be
subject and subordinate to the provisions of this Lease. No sublease term shall
extend beyond the Term of this Lease (excluding Executory Renewal Terms). Tenant
agrees that in the case of an assignment or sublease, Tenant shall, within
fifteen (15) days after the execution and delivery of any such assignment or
sublease, deliver to Landlord and Lender a duplicate original of such assignment
or sublease wherein the assignee or sublessee agrees to observe and perform the
provisions of Paragraph 13(a)(ii) and related provisions of Paragraph 13(c), (d)
and (e) insofar as Paragraph 13(a)(ii), (c), (d) and (e) relate to the use and
occupancy by the assignee of the entire Leased 


                                       28
<PAGE>   33
Premises in the case of any assignment and by the sublessee of the subleased
premises in the case of a sublease. In the case of a sublease, Tenant shall,
within fifteen (15) days after the execution and delivery of such sublease,
deliver to Landlord and Lender a duplicate original of such sublease.

         (c) Upon written request of Tenant, Landlord and Lender will enter into
a Non-Disturbance and Attornment Agreement with any proposed assignee or
sublessee, provided:

                  (i) the Non-Disturbance and Attornment Agreement is in a form
         reasonably acceptable to Landlord and Lender;

                  (ii) Landlord is not required to assume any additional
         operating, financing or other obligations in respect of the Leased
         Premises beyond Landlord's obligations contained in this Lease;

                  (iii) The proposed assignee or sublessee is a Qualified
         Entity;

                  (iv) In the case of an assignment, the assignee assumes all of
         the obligations of the Original Tenant under this Lease and in the case
         of a sublease, the sublessee assumes all of the obligations of the
         Original Tenant under this Lease to the extent applicable to the
         subleased space; and

                  (v) The per square foot net rent payable by the assignee or
         sublessee is not less than the per square foot rent payable to the
         Original Tenant as Basic Rent under this Lease or, if such net rent is
         less, Tenant has provided Landlord with security in a form and issued
         by an entity acceptable to Landlord and Lender securing Tenant's
         obligation to pay such deficiency throughout the full remaining
         potential Term of this Lease, including any Executory Renewal Terms.

         (d) Upon the occurrence of an Event of Default under this Lease,
Landlord shall have the right to collect and enjoy all rents and other sums of
money payable under any sublease of any part or all of the Leased Premises, and
Tenant hereby irrevocably and unconditionally assigns, and grants a security
interest in, all such subleases and all such rents and money to Landlord, which
assignment may be exercised, and security interest enforced, upon and after (but
not before) the occurrence of an Event of Default. Tenant shall execute such
financing statements as Landlord may reasonably request to perfect the foregoing
assignment as a security interest. Upon Landlord's written request, from time to
time, Tenant shall provide to Landlord and Lender copies of all subleases then
in effect and a schedule of subleases showing, with 


                                       29
<PAGE>   34
respect to each sublease, name of subtenant, size of subleased space, term of
sublease and net subrent.


                                       30
<PAGE>   35
         18.      Permitted Contests.

         Notwithstanding any provision of this Lease to the contrary, after
prior written notice to Landlord and Lender, Tenant shall not be required to (i)
pay any Tax, (ii) comply with any Legal Requirement, or (iii) discharge or
remove any lien, so long as Tenant shall contest, in good faith and at its
expense, the existence, the amount or the validity thereof, the amount of the
damages caused thereby, or the extent of its or Landlord's liability therefor,
by appropriate proceedings which shall operate during the pendency thereof to
prevent (u) the collection of, or other realization upon, the Tax or lien so
contested, (v) the collection of any penalty for failure to comply with the
Legal Requirement being contested, (w) the sale, forfeiture or loss of any part
or all of the Leased Premises, any Basic Rent or any Additional Rent to satisfy
the same or to pay any damages caused by the violation of the same, (x) any
interference with the use of, occupancy, sale or financing of any part or all of
the Leased Premises, (y) any interference with the payment of any Basic Rent or
any Additional Rent, and (z) the cancellation of any fire or other insurance
policy or violation of any Insurance Requirement. In no event shall Tenant
pursue a contest with respect to any Tax, Legal Requirement, or lien referred to
above in such manner that exposes Landlord to any criminal or civil liability,
penalty or sanction for which Tenant has not made provisions reasonably
acceptable to Landlord and Lender. Tenant shall be deemed to have made
provisions reasonably acceptable to Landlord and Lender (except with respect to
exposure for criminal liability) if Tenant shall have provided Lender or
Landlord in that order as security for such contest, an amount of cash or bond
equal to, if Original Tenant or a Qualified Entity is the Tenant in Possession,
100%, and otherwise 125%, of the amount being contested, or other security
satisfactory in the reasonable opinion of Lender or Landlord in that order, in
assuring the payment, compliance, discharge, removal or other action, including
all costs, attorneys' fees, interest and penalties, in the event that the
contest is unsuccessful. No such security shall be required if the amount
involved in the contest shall not exceed one tenth (1/10th) of one percent (1%)
of the Tangible Net Worth of the Tenant in Possession as reasonably evidenced to
Landlord. While any such proceedings are pending and the required security is
held by Lender or Landlord, in that order, Lender or Landlord, as the case may
be, shall not have the right to pay, remove or cause to be discharged the Tax,
Legal Requirement or lien thereby being contested unless Landlord or Lender
reasonably believes that any one or more of the conditions in clauses (v)
through (z) above shall not be prevented during the pendency of the contest.
Tenant further agrees that such contest shall be promptly and diligently
prosecuted to a final conclusion, except that Tenant shall, so long as all of
the conditions of the firs sentence of this Paragraph 18 are at all times
complied with, have the right to attempt to settle or compromise such contest
through negotiations. Tenant shall pay any and all judgments, decrees and costs
(including all attorneys' fees and expenses) in connection with any such contest
and shall, promptly after the final determination of such contest, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed to be
determined to be payable therein or in connection therewith, together with all
penalties, fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts of the 


                                       31
<PAGE>   36
performance of which shall be ordered or decreed as a result thereof.

         19.      Default.

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

         (a) Tenant's failure to make any payment of Basic Rent when due which
continues unremedied for a period of three (3) business days after notice
thereof from Landlord or Lender.

         (b) Tenant's failure to make payment of Additional Rent or other sum
herein required to be paid by Tenant and such default shall continue for a
period of fifteen (15) days after notice by Landlord or Lender to Tenant. 

         (c) Tenant's failure to duly perform and observe, or Tenant's violation
or breach of, any other provision hereof if such failure shall continue for a
period of thirty (30) days after notice thereof from Landlord to Lender, or if
such failure cannot be cured within such period of thirty (30) days, such period
shall be extended for such longer time, not exceeding an additional ninety (90)
days, as reasonably necessary provided that Tenant has commenced to cure such
default within said period of thirty (30) days and is actively, diligently and
in good faith proceeding with continuity to remedy such failure.

         (d) Original Tenant shall (i) voluntarily be adjudicated a bankrupt or
insolvent, or (ii) consent to the appointment of a receiver or trustee for
itself or for any part or all of the Leased Premises, (iii) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, or (iv) make a general assignment for the benefit
of creditors.

         (e) By the order of a court of competent jurisdiction, a receiver or
liquidator of (i) Original Tenant, (ii) all or substantially all of the assets
of Original Tenant or (iii) the interest of Original Tenant in the Leased
Premises shall be appointed and not be dismissed as to the Leased Premises
within sixty (60) days after such appointment, or if by decree of such court,
Original Tenant shall be adjudicated a debtor or insolvent or the Leased
Premises or any of Original Tenant's property shall have been sequestered, and
such decree shall have continued undischarged and unstayed for sixty (60)
consecutive days after such filing, or if Original Tenant shall institute any
such proceeding or shall consent to the institution of any such proceeding
against it under any such law.

         (f) Original Tenant shall in any insolvency proceedings be liquidated
or dissolved or shall begin proceedings towards its liquidation or dissolution.

         (g) The estate or interest of Original Tenant in any part or all of the
Leased Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within sixty (60) days 


                                       32
<PAGE>   37
after such levy or attachment.

         20.      Landlord's Remedies.

         After the occurrence of an Event of Default by Tenant, Landlord shall
have the right to exercise the following remedies:

         (a) Landlord may, at its option, continue this Lease in full force and
effect, without terminating Tenant's right to possession of the Leased Premises,
in which event Landlord shall have the right to collect Basic Rent and all
Additional Rent and other charges when due. In the alternative, Landlord shall
have the right to peaceably re-enter the Leased Premises on the terms set forth
in subparagraph (b) below, but without such re-entry being deemed a termination
of the Lease or an acceptance by Landlord of a surrender thereof. Landlord shall
also have the right, at its option, from time to time, without terminating this
Lease, to relet the Leased Premises, or any part thereof, with or without legal
process, as the agent, and for the account, of Tenant, upon such terms and
conditions as Landlord may deem advisable (which terms may be materially
different from the terms of this Lease), in which event the rents received on
such reletting shall be applied (i) first to the reasonable and actual expenses
of such reletting and collection, including without limitation necessary
renovation and alterations of the Leased Premises, reasonable and actual
attorneys' fees and any reasonable and actual real estate commissions paid, and
(ii) thereafter toward payment of all sums due or to become due Landlord
hereunder. If a sufficient amount to pay such expenses and sums shall not be
realized or secured, then Tenant shall pay Landlord any such deficiency on
demand as the same shall arise. Landlord shall not, in any event, be required to
pay Tenant any sums received by Landlord on a reletting of the Leased Premises
in excess of the rent provided in this Lease, but such excess shall,
notwithstanding the provisions of Paragraph 5, reduce any accrued present or
future obligations of Tenant hereunder. Landlord's re-entry and reletting of the
Leased Premises without termination of this Lease shall not preclude Landlord
from subsequently terminating this Lease as set forth below.

         (b) Landlord may terminate this Lease by written notice to Tenant
specifying a date therefor, which shall be no sooner than twenty (20) days
following notice to Tenant, and this Lease shall then terminate on the date so
specified as if such date had been originally fixed as the expiration date of
the Term. In the event of such termination, Tenant shall pay the following to
Landlord on such date:

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

                  (ii) The amount by which the unpaid Basic Rent and all other
         charges which would have accrued for the balance of the Term (excluding
         any Executory Renewal Terms of portions thereof) exceeds the amount of
         the fair and reasonable rental value of the Leased Premises in respect
         of such period, in each case, after discounting same 


                                       33
<PAGE>   38
         to present value at a discount rate equal to the Discount Rate.

         Except to the extent required by Law, Landlord shall not have any duty
to mitigate its damages hereunder (including, but not limited to, any duty to
relet or re-lease the Leased Premises). The amount of rent reserved by Landlord
in any reletting of the Leased Premises, or any portion thereof, shall be
considered in ascertaining the "fair and reasonable rental value" of the Leased
Premises, or such portion thereof, as the case may be. Following the date of
termination, interest shall accrue on the sums payable by Tenant at the Default
Rate.

         In the event this Lease shall be terminated as provided above, by
summary proceedings or otherwise, Landlord, its agents servants or
representatives may immediately or at any time thereafter peaceably re-enter and
resume possession of the Leased Premises and remove all persons and property
therefrom, by dispossession proceedings.

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

         (d) Landlord may accept Tenant's irrevocable purchase offer which
Tenant shall be conclusively presumed to have made at the applicable price
specified in Exhibit 12-1 attached hereto plus Yield Maintenance and any
Additions to the Purchase Price (the "Default Purchase Offer"), upon the
occurrence of an Event of Default. Landlord shall be deemed to have accepted the
Default Purchase Offer unless Landlord and Lender shall have delivered a joint
rejection thereof within sixty (60) day after the occurrence of the Event of
Default. If Landlord accepts or is deemed to have accepted the Default Purchase
Offer, (i) payment of the purchase price and transfer of title to the Leased
Premises shall occur on a date specified by Lender which is no more than
thirty-five (35) days following the next Base Rent Payment Date which occurs no
less than one hundred twenty (120) days after the Event of Default and otherwise
in compliance with the terms and conditions set forth in Paragraph 12 above (as
though the Leased Premises were being sold to Tenant thereunder), (ii) Tenant
shall pay to Landlord Yield Maintenance, if any, and (iii) this Lease shall
continue in full force and effect without any abatement of Rent until such
transfer of title, provided that if such Base Rent Payment Date will occur prior
to the third anniversary of the Commencement Date, Landlord may, prior to the
expiration of such one hundred twenty (120) days, upon written notice to Tenant,
defer such closing until a date which is no later than such third anniversary.
If Landlord rejects the Default Purchase Offer, this Lease shall continue in
full force and effect without any abatement of Rent 


                                       34
<PAGE>   39
unless and until terminated by Landlord pursuant to Paragraph 20(b) or otherwise
as permitted by Law.

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

         21.      Notices.

         All notices, demands, requests, consents, approvals, offers, statements
and other instruments or communications required or permitted to be given
pursuant to the provisions of this Lease (collectively "Notice" or "Notices")
shall be in writing and shall be deemed to have been given for all purposes upon
receipt or refusal after having been sent by United States mail, by registered
or certified mail, return receipt requested, postage prepaid, addressed to the
other party at its address as stated below, or upon receipt or refusal after
having been sent by FedEx or other nationally recognized air courier service, to
the addresses stated below or upon receipt by telephonic facsimile transmission
(fax) at the telephone numbers specified below:

         (a) If to Landlord, at the address set forth on the first page of this
Lease (Fax No. (614) 443-0972), with a copy to:

                           Schottenstein Stores Corporation
                           1800 Moler Road
                           Columbus, Ohio  43207
                           Attention:  Legal Department
                           Fax No.:  (614) 443-0972

         (b) If to Tenant, at the address set forth on the first page of this
Lease (Attention: Vice President, Finance, Fax No. (614) 337-4681), with a copy
to:

                           Schottenstein Stores Corporation
                           1800 Moler Road
                           Columbus, Ohio  43207
                           Attention:  Legal Department
                           Fax No.:  (614) 443-0972

In the case of fax notice, a hard copy of the faxed notice shall be promptly
given by registered or certified mail or air courier service as herein provided
but, as to notices given by fax, the date of receipt of 


                                       35
<PAGE>   40
the fax notice shall control. If any Lender shall have advised Tenant by Notice
in the manner aforesaid that it is the holder of a Mortgage and stating in said
Notice its address for the receipt of Notices, then simultaneously with the
giving of any Notice by Tenant to Landlord, Tenant shall serve a copy of such
Notice upon Lender in the manner aforesaid. For the purposes of this Paragraph,
any party may substitute its address or designate up to two additional
addressees for copies of notices by giving fifteen days' notice to the other
party in the manner provided above.

         22.      Memorandum of Lease; Estoppel Certificates.

         (a) Tenant shall execute, deliver and record, file or register at
Tenant's expense from time to time all such instruments as may be required by
any present or future law in order to evidence the respective interests of
Landlord and Tenant in any part or all of the Leased Premises, and Tenant and
Landlord shall cause a memorandum of this Lease, and any supplement hereto or to
such other instrument, if any, as may be appropriate, to be recorded, filed or
registered and re-recorded, refiled or re-registered at Tenant's expense in such
manner and in such places as may be required by any present or future law in
order to give public notice and protect the validity of the Lease. In the event
of any discrepancy between the provisions of said recorded memorandum of this
Lease or any other recorded instrument referring to this Lease and the
provisions of this Lease, the provisions of this Lease shall prevail. Upon or
following the expiration or earlier termination of this Lease, Tenant shall,
promptly following the request of Landlord or Lender, execute and deliver to
Landlord in recordable form a memorandum or other document in form reasonably
acceptable to Tenant and Landlord evidencing the termination of this Lease.

         (b) Landlord and Tenant shall, at any time and from time to time, upon
not less than ten days prior written request by the other, execute, acknowledge
and deliver to the other a statement in writing, executed by Landlord or Tenant
or, if other than an individual, by a President, Vice President or authorized
general partner, managing member, principal officer or agent certifying (i) that
this Lease is unmodified and in full effect (or, if there have been
modifications, that this Lease is in full effect as modified, setting forth such
modifications), (ii) the dates to which Basic Rent payable hereunder has been
paid, (iii) that to the knowledge of the party executing such certificate no
default by either Landlord or Tenant exists hereunder or specifying each such
default of which such party may have knowledge; (iv) the remaining Term hereof;
and (v) with respect to a certificate signed by Tenant, (A) that to the
knowledge of the party executing such certificate, there are no proceedings
pending or threatened against Tenant before or by any court or administrative
agency which if adversely decided would materially and adversely affect the
financial condition and operations of Tenant or if such proceedings are pending
or threatened to said party's knowledge, specifying and describing the same, and
(B) certifying such additional factually correct statements as may be reasonably
requested. It is intended that any such statements may be relied upon by Lender,
the recipient of such statements or their assignees or by any prospective
mortgagee, purchaser, assignee or subtenant of the Leased Premises.


                                       36
<PAGE>   41
         23.      Surrender and Holding Over.

         Upon the expiration or earlier termination of this Lease, Tenant shall
peaceably leave and surrender the Leased Premises to Landlord in the same
condition in which the Leased Premises were originally received from Landlord at
the commencement of this Lease, except as to any repair or Alteration as
permitted or required by any provision of this Lease, and except for ordinary
wear and tear and damage by casualty or Condemnation which Tenant is not
required to repair or restore hereunder. Tenant may remove at Tenant's sole cost
and expense from the Leased Premises on or prior to such expiration or earlier
termination Tenant's Trade Fixtures and personal property which are owned by
Tenant or third parties other than Landlord, and Tenant at its expense shall, on
or prior to such expiration or earlier termination, repair any damage caused by
such removal. Tenant's Trade Fixtures and personal property not so removed at
the expiration of the Term or within thirty days after the earlier termination
of the Term for any reason whatsoever shall become the property of the Landlord,
and Landlord may thereafter cause such property to be removed from the Leased
Premises at Tenant's expense. Landlord shall not in any manner or to any extent
be obligated to reimburse Tenant for any property which becomes the property of
Landlord as a result of such expiration or earlier termination.

         Any holding over by Tenant of the Leased Premises after the expiration
or earlier termination of the Term of this Lease, including extensions thereof,
with the consent of Landlord, shall operate and be construed as a tenancy from
month to month only, at one hundred fifty percent (150%) of the Basic Rent
reserved herein and otherwise upon the same terms and conditions as contained in
this Lease. Notwithstanding the foregoing, any holding over without Landlord's
consent shall entitle Landlord, in addition to collecting Basic Rent at a rate
of one hundred fifty percent (150%) thereof, to exercise all rights and remedies
provided by law or in equity, including the remedies of Paragraph 20.

         24.      No Merger of Title.

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


                                       37
<PAGE>   42
         25.      Landlord Exculpation.

         Anything contained herein to the contrary notwithstanding, any claim
based on or in respect of any liability of Landlord under this Lease shall be
enforced only against the Landlord's interest in Leased Premises and shall not
be enforced against the Landlord individually, personally or against any
shareholder, member, partner or beneficiary of Landlord, or against any of their
respective directors, officers, employees or agents.

         26.      Hazardous Materials.

         (a) Tenant represents, warrants and covenants that it has not and will
not, and that it has not permitted and will not permit any person or entity to
make, store, release, treat or dispose of any Hazardous Materials from, on,
about or under the Leased Premises, but the foregoing shall not prevent the use
to the extent necessary and customary in connection with any use permitted under
this Lease of any such substances in accordance with applicable Laws and
regulations. Tenant represents, warrants and covenants that it will at all times
comply (and prohibit non-compliance by others) with all Environmental Laws.

         (b) To the extent required by the Environmental Laws, Tenant shall
remove any Hazardous Materials whether now or hereafter existing on the Leased
Premises and whether or not arising out of or in any manner connected with
Tenant's occupancy of the Leased Premises during the Term, and repair all damage
to the Leased Premises caused thereby. Tenant shall and hereby does agree to
defend (with counsel satisfactory to Lender and Landlord), indemnify and hold
Lender and Landlord, their respective successors, assigns, heirs, members,
beneficiaries, shareholders and partners, and all of their respective directors,
officers, agents and employees (collectively, the "Indemnified Parties")
harmless from and against any and all causes of actions, suits, demands or
judgments of any nature whatsoever, losses, damages, penalties, expenses, fees,
claims, costs (including response and remedial costs), and liabilities,
including, but not limited to, attorneys' fees and costs of litigation, arising
out of or in any manner connected with (i) the violation of any Environmental
Law with respect to the Leased Premises; (ii) the "release" or "threatened
release" of, presence of or failure to remove, as required by this Paragraph 26,
Hazardous Materials onto, on, under or from the Leased Premises or any portion
or portions thereof, now or hereafter existing whether or not arising out of or
in any manner connected with Tenants' occupancy of the Leased Premises during
the Term. All obligations of Tenant under this Paragraph 26 shall survive
expiration or earlier termination of this Lease.

         (c) The Tenant represents, warrants and covenants that it will not
install any underground storage tank without specific, prior written approval
from the Landlord and Lender, which may be withheld in the sole discretion of
either. The Tenant will not store combustible or flammable materials on the
Leased Premises in violation of Environmental Laws.

         (d) Tenant shall comply with the requirements set forth in 


                                       38
<PAGE>   43
Exhibit 26 attached hereto.

         27.      Entry by Landlord.

         Landlord and its authorized representatives shall have the right upon
reasonable notice (which shall be not less than forty eight (48) hours except in
the case of emergency) to enter the Leased Premises at all reasonable business
hours (and at all other times in the event of any emergency), for (i) the
purpose of inspecting the same or for the purpose of doing any work under
Paragraph 9, and may take all such action thereon as may be necessary or
appropriate for any such purpose (but nothing contained in this Lease or
otherwise shall create or imply any duty upon the part of Landlord to make any
such inspection or do any such work), provided further that if an Event of
Default has occurred and is continuing, such inspections and work shall be at
Tenant's sole cost and expense, and (ii) the purpose of showing the Leased
Premises to prospective purchasers and mortgagees and, at any time within twelve
(12) months prior to the expiration of the Term for the purpose of showing the
same to prospective tenants. No such entry shall constitute an eviction of
Tenant but any such entry shall be done by Landlord in such reasonable manner as
to minimize any disruption of Tenant's business operation.

         28.      Financial Statements; Additional Information.

         (a) Tenant will deliver to Landlord and Lender copies of all financial
statements and any documents filed with the Securities and Exchange Commission
("SEC") by Tenant (including without limitation all 8-K, 10-K and 10-Q reports,
and notices and proxy statements sent by Tenant and its stockholders) in each
case within fifteen (15) days following delivery to the SEC or Tenant's
stockholders, as the case may be; provided, however, that if Tenant does not
file such statements and reports with the SEC, Tenant will deliver to Landlord
and each Lender the following:

                  (i) Quarterly Statements. Within sixty (60) days after the end
         of each quarterly fiscal period (except the last) in each fiscal year
         of Tenant, duplicate copies of: 

                           (A) a consolidated balance sheet of Tenant and its
                  consolidated subsidiaries as at the end of such quarter,

                           (B) a consolidated statement of profits and losses of
                  Tenant and its consolidated subsidiaries for the current
                  quarter and the portion of the fiscal year ending with such
                  quarter, and

                           (C) a consolidated statement of cash flows of Tenant
                  and its consolidated subsidiaries for the portion of the
                  fiscal year ending with the current quarter;


                                       39
<PAGE>   44
                  setting forth in each case in comparative form the figures for
                  the corresponding periods a year earlier, all in reasonable
                  detail and certified as having been prepared in accordance
                  with generally accepted accounting principles consistently
                  applied and certified as complete and correct by a senior
                  financial officer of Tenant;

                  (ii) Annual Statements. Within ninety (90) days after the end
         of each fiscal year of Tenant, duplicate copies of: 

                           (A) a consolidated balance sheet of Tenant and its
                  consolidated subsidiaries as at the end of such year,

                           (B) consolidated statements of profits and losses and
                  cash flows of Tenant and its consolidated subsidiaries for
                  such year, and

                           (C) a consolidated statement of cash flows of Tenant
                  and its consolidated subsidiaries for such year;

         setting forth in each case in comparative form the figures for the
         previous fiscal year, all in reasonable detail and accompanied by the
         report thereon, containing an opinion unqualified as to limitations
         imposed by Tenant on the scope of the audit, of a firm of independent
         certified public accountants of recognized national standing selected
         by Tenant which opinion shall state that the consolidated financial
         statements of Tenant and its consolidated subsidiaries fairly present
         the financial condition of the companies (including the results of
         their operations and changes in financial position) being reported
         upon, have been prepared in accordance with generally accepted
         accounting principles consistently applied and that the examination of
         such accounts in connection with such financial statements has been
         made in accordance with generally accepted auditing standards, and
         accordingly included such tests of the accounting records and such
         other auditing procedures as were considered necessary in the
         circumstances.

         (b) Each set of annual and quarterly financial statements delivered to
Landlord pursuant to Paragraph 28(a) shall be accompanied by a certificate of a
senior financial officer of Tenant stating whether or not a Financial Event has
occurred since the later of the date of this Lease or the date of the last such
statement submitted to Landlord pursuant to this sentence. With reasonable
promptness, Tenant shall deliver to Landlord and Lender such additional
financial statements and 


                                       40
<PAGE>   45
information regarding the business affairs and financial condition of Tenant as
Landlord and any Lender may reasonably request. In addition, Tenant shall submit
to Landlord and Lender copies of all financial information submitted by Tenant
to its institutional lenders, bondholders and other institutional investors as
and when such information is delivered to such other parties. Upon the prior
written request of Landlord or Lender, Tenant shall cause a senior financial
officer of Tenant to meet with representatives of Landlord and/or Lender to
discuss the business and financial affairs of Tenant and the financial
statements and other information submitted by Tenant to Landlord pursuant to
this Lease. Tenant shall also supply to Landlord no later than ninety (90) days
after each fiscal year, a statement certified by a senior financial officer of
Tenant, of the amount of gross sales from the Leased Premises for the preceding
fiscal year.

         (c) Original Tenant shall obtain and maintain a Corporate
Creditworthiness Rating during all periods of time when Tenant does not have at
least one issue of Rated Debt outstanding.

         (d) In the event that Tenant fails to provide to Landlord or its
designee any of the financial statements, certificates, reports or information
(the "Required Records") required by this Paragraph 28 within thirty (30) days
after the date upon which such Required Record is due, Tenant shall pay to
Landlord, at Landlord's option and in its sole discretion, an amount equal to
$5,000 for each Required Record that is not delivered; provided that Landlord
has given at least ten (10) days prior written notice to Tenant of such failure
by Tenant to timely submit the applicable Required Record and provided that
Lender has imposed such cost on Landlord pursuant to the Mortgage by reason of
Landlord's failure to deliver such Required Record to Lender.

         29.      No Usury.

         The intention of the parties being to conform strictly to the usury
laws now in force in the State, whenever any provision herein provides for
payment by Tenant to Landlord of interest at a rate in excess of the legal rate
permitted to be charged, such rate herein provided to be paid shall be deemed
reduced to such legal rate.

         30.      Broker.

         Landlord and Tenant represent and warrant to each other that, except
for W. Lyman Case & Co. (whose fee shall be paid by Tenant), neither party
negotiated with any broker in connection with this Lease and that this Lease was
negotiated directly by Landlord and Tenant. Each party hereby agrees to
indemnify the other against all claims, damages, costs and expenses incurred by
the indemnified party as a result of the breach of the foregoing representation
or warranty by the indemnifying party.


                                       41
<PAGE>   46
         31.      Waiver of Landlord's Lien.

         Landlord hereby waives any right to distrain Tenant's Trade Fixtures or
any personal property of Tenant and any Landlord's lien or similar lien upon
Tenant's Trade Fixtures and any other personal property of Tenant regardless of
whether such lien is created or otherwise. Landlord agrees, at the request of
Tenant, to execute a waiver of any Landlord's or similar lien for the benefit of
any present or future holder of a security interest in or lessor of any of
Tenant's Trade Fixtures or any other personal property of Tenant. Landlord
acknowledges and agrees in the future to acknowledge (in a written form
reasonably satisfactory to Tenant) to such persons and entities at such times
and for such purposes as Tenant may reasonably request that Tenant's Trade
Fixtures are Tenant's personal property and not part of the Improvements
(regardless of whether or to what extent such Trade Fixtures are affixed to the
Improvements) or otherwise subject to the terms of this Lease.

         32.      No Waiver.

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

         33.      Separability.

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


                                       42
<PAGE>   47
         34.      Indemnification.

         Tenant agrees to defend (with counsel acceptable to Landlord and
Lender), pay, protect, indemnify, save and hold harmless Landlord, Lender and
each of the other Indemnified Parties, from and against any and all liabilities,
losses, damages, penalties, costs, expenses (including reasonable attorneys'
fees and expenses), causes of action, suits, claims, demands or judgments of any
nature whatsoever, howsoever caused, arising (a) from a default by Tenant under
this Lease, (b) under any REA or any Legal Requirements pertaining to this Lease
or the Leased Premises, or (c) from any part or all of the Leased Premises or
Adjoining Property or the existence, use, non-use, occupancy, condition, design,
construction, maintenance, repair or rebuilding of any of or otherwise relating
to, the Leased Premises or Adjoining Property, and any injury to or death of any
person or persons or any loss of or damage to any property, real or personal, in
any manner arising therefrom connected therewith or occurring thereon, whether
or not Landlord has or should have knowledge or notice of the defect or
conditions, if any, causing or contributing to said Loss. In case any action or
proceeding is brought against Landlord, Lender or any of the other Indemnified
Parties by reason of any such Loss, Tenant covenants upon notice from Landlord
or Lender to defend (with counsel acceptable to Landlord and Lender) Landlord or
Lender and such other Indemnified Parties in such action, with the expenses of
such defense paid by Tenant, and Landlord or Lender will cooperate and assist in
the defense of such action or proceeding if reasonably requested so to do by
Tenant. All obligations of Tenant under this Paragraph 34 shall survive the
expiration or any termination of this Lease. All indemnities and obligations of
Tenant to defend contained in this Paragraph 34 and elsewhere in this Lease
(including without limitation, Paragraph 26) shall continue to run in favor of
and be enforceable by, each person or entity that shall be a Landlord, Lender or
any other Indemnified Party from time to time notwithstanding the assignment of
this Lease by any such Landlord and the release of such Landlord hereunder or
the assignment or release of any Mortgage or the payment of any debt owed to a
Lender.


                                       43
<PAGE>   48
         35.      Tenant to Comply With Reciprocal Easement Agreement.

         (a) Landlord agrees to enter into with Tenant, at Tenant's expense,
such easements, covenants, waivers, approvals or restrictions for utilities,
parking or other matters as desirable for operation of the Leased Premises or
Adjoining Property (collectively, "Easements") and any amendment or modification
(collectively, "Modifications") to any REA (as defined below), each as requested
by Tenant, subject to Lender's and Landlord's approval of the form and substance
thereof which shall not be unreasonably withheld or delayed; provided (i) that
such Easement or Modification shall not result in any diminution in the value or
utility of the Leased Premises for use as a retail or office facility and
further provided that Tenant reasonably believes that it is in the best
interests of the operator(s) of the Leased Premises that such Easement be
granted or Modification be entered into, as the case may be; (ii) Tenant
provides Landlord and Lender with a Survey and title endorsement evidencing that
no violation or encroachments will exist as a result of the establishment of any
Easement or REA (and, with respect to any Modification pursuant to which any
easements are created or relocated, any such Modification); (iii) Tenant assumes
all obligations under such Easement or Modification during the Term (to the
extent obligations are imposed upon the owner of the Leased Premises); (iv) no
such Easement or Modification shall render the use of the Leased Premises
dependent upon any other property or condition the use of the Leased Premises
upon the use of any other property, each of which Tenant shall certify to
Landlord and Lender in writing delivered with Tenant's request with respect to
such Easement or Modification, as the case may be; and (v) Tenant shall pay the
reasonable costs and expenses, including attorneys' fees, and expenses, incurred
by Lender and Landlord in connection with the review of the Modifications.
Tenant's request shall also include Tenant's written undertaking acknowledging
that Tenant shall remain liable hereunder as a principal and not merely as a
surety or guarantor notwithstanding the establishment of any Easement or
entering into of any Modification. If either Landlord or Lender shall fail to
approve or disapprove the form and substance of any such Easement or
Modification within a period of thirty (30) days from their respective receipt
of same, which disapproval shall be in writing delivered to both Tenant and any
single third party that is a prospective party to such Easement and whose name
and address have been delivered to Landlord and Lender, then either or both of
Landlord or Lender, as the case may be, shall be deemed to have approved the
form, scope and substance of any such Easement or Modification.

         (b) Tenant agrees that Tenant is obligated to and shall perform all
obligations of the owner of the Leased Premises and pay all expenses which the
owner of the Leased Premises may be required to pay in accordance with any
Easements, Modifications or other reciprocal easement agreement or any other
agreement or document of record now affecting the Leased Premises or hereafter
becoming effective pursuant to Paragraph 35(a) or otherwise (such Easements,
Modifications, other reciprocal easements and other agreements and documents
being referred to collectively as "REA"), and that Tenant shall comply with all
of the terms and conditions of the REA during the term of this Lease. Tenant
shall be deemed the "Owner" of the Leased Premises for purposes of granting
consents and approvals under the REA and Tenant shall have the 


                                       44
<PAGE>   49
right to grant consents and approval under the REA as from time to time it deems
necessary, subject in each case to the prior written approval of Landlord and
Lender which shall not be unreasonably withheld or delayed. Landlord and Lender
shall be deemed to have approved any action proposed by Tenant under this
Paragraph 35(b) in a written notice to Landlord and Lender if both Lender and
Landlord shall have failed to object in writing, specifying the nature of their
objections, within ten (10) days following receipt of such notice. Tenant
further covenants and agrees to indemnify, defend (with counsel acceptable to
Landlord and Lender) and hold harmless Landlord and Lender against any claim,
loss or damage suffered by Landlord or Lender by reason of (i) any action under
this Paragraph 35(b) which results in a diminution in value of Landlord's
reversionary interest in the Leased Premises or (ii) Tenant's failure to perform
any obligations or pay any expenses as required hereunder or under any REA or
comply with the terms and conditions of any REA as hereinabove provided during
the term of this Lease.

         36.      Headings.

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

         37.      Modifications.

         This Lease may be modified, amended, discharged or waived only by an
agreement in writing signed by the party against whom enforcement of any such
modification, amendment, discharge or waiver is sought and consented to by the
Lender in writing.

         38.      Successors, Assigns.

         The covenants of this Lease shall run with the Land and bind Landlord
and Tenant, their respective heirs, distributees, personal representatives,
successors and permitted assigns and all present and subsequent subtenants of
any part or all of the Leased Premises, and shall inure to the benefit of
Landlord and Tenant and their respective successors and assigns. In the event
there is more than one Tenant, the obligation of each shall be joint and
several. The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners of the Leased Premises and shall include Lender
only if and then only following Lender's acquisition of fee title to the Leased
Premises. In the event of any transfer or transfers of the title of the Leased
Premises, the Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved from
and after the date of such transfer and conveyance of all liability as respects
the performance of any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed.


                                       45
<PAGE>   50
         39.      Counterparts.

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

         40.      Governing Law.

         This Lease shall be governed by and construed according to the Laws of
the State.

         41.      Lender as Third Party Beneficiary.

         Lender shall be deemed a third party beneficiary with respect to all
provisions of this Lease that purports to confer benefits upon Lender or impose
obligations upon Tenant or Landlord in order to protect the interests of Lender.

         42.      Exculpation of Trustee.

         It is expressly understood and agreed by and between the parties
hereto, anything herein to the contrary notwithstanding, that, if the Landlord
hereunder executes this Lease in the capacity of a trustee under a Delaware
Business Trust, each and all of the representations, warranties, covenants,
undertakings and agreements herein made on the part of the Landlord, while in
form purporting to be the representations, warranties, covenants, undertakings
and agreements of Landlord, are nevertheless each and every one of them made and
intended, not as representations, warranties, covenants, undertakings and
agreements by Landlord in its individual capacity (as opposed to its capacity as
trustee) or for the purpose or with the intention of binding Landlord in its
individual capacity (as opposed to its capacity as trustee), but are made and
intended for the purpose only of subjecting Landlord's interest in the Leased
Premises and any other assets title to which is held by Landlord as trustee
under the trust described in the introductory paragraph of this Lease (such
interest and assets being hereafter referred to as "Landlord's Interest") to the
terms of this Lease and for no other purpose whatsoever, and in case of default
hereunder by Landlord, Tenant shall not look to any other assets of Landlord
other than Landlord's interests.


                                       46
<PAGE>   51
         43.      Substitution of Premises.

         If, at any time after thirtieth (30th) month of the Primary Term,
Original Tenant determines in its good faith judgment that the Leased Premises
have become economically obsolete, Original Tenant may offer to substitute for
the Leased Premises a parcel of land and improvements thereon owned by Original
Tenant (or its affiliate) and containing a retail or office facility then being
operated by Original Tenant ("Substitute Premises"). In order to make such an
offer, Original Tenant shall deliver to Landlord a written notice (a
"Substitution Offer") of its offer (i) to convey to Landlord the Substitute
Premises in consideration for the conveyance to Tenant by Landlord of the Leased
Premises and (ii) after such conveyance, to amend this Lease so as to substitute
the Substitute Premises for the Leased Premises. Within ten (10) business days
of its delivery to Landlord of the Substitution Offer, Original Tenant shall
also deliver to Landlord and Lender a Phase I environmental report, an owner's
title commitment, a Survey, an MAI appraisal and the plans and specifications
for the Substitute Premises and such other information as Landlord or Lender may
request (collectively, the "Substitution Deliveries") conforming to the
requirements set forth below.

         Landlord shall have until the close of business on the sixtieth (60th)
day following its receipt of the last of the Substitution Deliveries to accept
or reject the Substitution Offer, provided Landlord shall not unreasonably
reject or fail to accept the Substitution Offer. If Landlord fails to notify
Original Tenant as to its acceptance or rejection of the Substitution Offer, the
Substitution Offer shall be deemed to have been rejected. Such offer shall be
contingent upon satisfaction of all of the following conditions:

         (a) If a Mortgage encumbers the Leased Premises, the Substitution Offer
shall be contingent upon Landlord obtaining from Lender the consent of such
Lender to the substitution of the Substitute Premises for the Leased Premises as
security for the Loan, which consent shall not be unreasonably withheld. Without
limitation of the foregoing, Lender's consent may be withheld if Lender does not
receive the written confirmation from any rating agency rating any pool of
mortgage loans of which the Mortgage is a part that such substitution would not
cause a downgrade, withdrawal or qualification of the ratings then assigned to
such pool.

         (b) Landlord and Lender determine in their sole and absolute discretion
that the Substitute Premises are of at least equal value to the Leased Premises
and will be of comparable value to the Leased Premises as of the last day of the
Term (without regard to any diminution in value by reason of any applicable
casualty or Condemnation). Landlord's determination of value shall be based on
Landlord's assessment of the comparability of the Substitute Premises to the
Leased Premises, taking into account all relevant factors including but not
limited to size of market area, demographics, age and physical condition of the
Improvements on the Substitute Premises and the location of the Substitute
Premises.


                                       47
<PAGE>   52
         (c) Original Tenant furnishes to Landlord a current Phase I
environmental report with respect to the Substitute Premises and Landlord is
reasonably satisfied that the same was prepared by a competent environmental
consultant and that the Substitute Premises, on the basis thereof, are free of
Hazardous Materials or violations of the Act or any other Laws pertaining to
safety, health or the environment.

         (d) Landlord obtains the opinion of local counsel designated by it that
the Lease as amended will be enforceable under the laws of the locality in which
the Substitute Premises is located and, if any amendments are, in such
attorney's opinion, required or desirable by reason of requirements of local
law, Original Tenant agrees to such amendments.

         (e) Original Tenant agrees in writing, at its sole cost and expense, to
furnish to Landlord (i) a title insurance policy insuring fee simple title to
the Substitute Premises in Landlord (and if applicable, insuring Lender as well
as to its Mortgage), free and clear of any and all liens and encumbrances which
are not acceptable to Landlord, and containing all endorsements (or the
reasonable equivalent thereof) as Landlord then has on the title insurance
policy covering the Leased Premises and such additional endorsements as are
reasonably required by Lender or Landlord; (ii) a current Survey of the
Substitute Premises, prepared in accordance with the same standards as the
Survey of the Premises then in Landlord's possession, showing no encroachments
or other survey defects which are unacceptable to Landlord; (iii) an opinion of
counsel to Tenant, in form reasonably acceptable to Landlord, with respect to
the such matters as were opined upon by Tenant's counsel at the time of
acquisition of the Leased Premises by Landlord; and (iv) such other matters as
Landlord shall reasonably require so as to assure Landlord that the exercise of
the Substitution Option will not adversely effect Landlord's investment in the
Leased Premises.

         (f) Original Tenant executes an amendment of this Lease reasonably
acceptable to Landlord and Lender substituting the Substitute Premises for the
Leased Premises and making such conforming changes as Landlord reasonably deems
necessary.

         (g) Original Tenant pays to Landlord on the Substitution Closing Date
(as defined below), an amount equal to all reasonable attorneys' fees and other
reasonable expenses incurred by Landlord and Lender in connection with the
effectuation of the Substitution Offer, including but not limited to the travel
expenses of Landlord and Lender and their representatives in inspecting the
Substitute Premises and mortgage, intangible, documentary and other recording
fees and taxes and all transfer and sales taxes. It is hereby agreed that it is
the intention of the parties that the exercise of the Substitution Offer by
Original Tenant hereunder shall result in no costs or expenses of any kind or
nature whatsoever being imposed on Landlord and Lender unless reimbursed in full
by Original Tenant, including but not limited to any costs or expenses incurred
in evaluating the Substitute Premises, and that in addition such costs and
expenses will be promptly reimbursed even if Landlord rejects the Substitute
Premises or otherwise fails to consummate the acquisition of the Substitute
Premises.


                                       48
<PAGE>   53
         If Landlord accepts the Substitution Offer, the closing shall take
place on the later of the third anniversary of the Commencement Date or sixty
(60) days after Landlord notifies Original Tenant of its acceptance (such later
date being the "Substitution Closing Date") in compliance with the terms and
conditions set forth in Exhibit 43 attached hereto. In the event a substitution
is effectuated pursuant to this Paragraph 43, Tenant agrees that it shall,
within one hundred eighty (180) days, close its facility on the original Leased
Premises and not re-open the facility during the Term. Original Tenant agrees on
the Substitution Closing Date to deliver to Landlord an irrevocable undertaking,
in recordable form, from Original Tenant obligating it to refrain from using,
and to cause all Affiliates of Original Tenant to refrain from using, the Leased
Premises as a retail store, warehouse or office building for the remainder of
the Term as such Term is in effect on the Substitution Closing Date (without
regard to any Executory Renewal Terms and without regard to any early
termination of the Term as it pertains to the Substitute Premises) and providing
for the payment by Tenant to Landlord of (a) liquidated damages in the event of
a violation of such covenant in the amount of twenty-five (25%) of the Basic
Rent which would have accrued during that portion of the Term during which such
covenant is violated and (b) the costs of collection, including reasonable
attorneys' fees. The provisions of this grammatical paragraph shall survive the
expiration or earlier termination of this Lease.


                                       49
<PAGE>   54
         44.      Event Purchase Offer.

         In the event any transaction or series or related transactions
involving the substantial sale of substantial assets or substantial
distributions of substantial cash, securities or property to Original Tenant's
shareholders reduces Original Tenant's Shareholders Equity below One Hundred
Twenty-Five Million Dollars ($125,000,000) (any such event bring referred to as
a "Financial Event"), Original Tenant shall be conclusively presumed to have
made to Landlord an irrevocable offer to purchase the Leased Premises at the
applicable price specified in Exhibit 12 attached hereto plus Yield Maintenance
and any Additions to Purchase Price (the "Event Purchase Offer") which offer
shall be deemed to have been made as of the first to occur of (a) receipt by
Landlord and Lender of written notice from Original Tenant stating that a
Financial Event has occurred and that Original Tenant is accordingly making an
Event Purchase Offer and (b) delivery by Landlord or Lender of a written notice
to Original Tenant, that a Financial Event has occurred (the "Event Purchase
Offer Date") and shall be deemed to be remade every January 1st, April 1st, July
1st and October 1st which occurs at least thirty-five (35) days after the Event
Purchase Offer Date until Original Tenant's Shareholder's Equity becomes equal
to or greater than One Hundred Twenty-Five Million Dollars ($125,000,000) (each
a "Quarterly Purchase Offer Date"). Each such remade Event Purchaser Offer shall
be a "Quarterly Purchase Offer." The Event Purchase Offer shall be deemed
accepted unless rejected in writing by Landlord and Lender jointly within thirty
(30) days after the Event Purchase Offer Date. Each Quarterly Purchase Offer
shall be deemed accepted unless rejected by Landlord and Lender in writing
within thirty (30) days after the Quarterly Offer Purchase Date. If the Event
Purchase Offer or a Quarterly Purchase Offer is accepted or deemed accepted, (a)
payment of the purchase price and transfer of title to the Leased Premises shall
occur on a closing dated specified by Landlord in a written notice to Tenant
which is not less than sixty (60) days nor more than one hundred (100) days
after the Event Purchase Offer Date or such Quarterly Purchase Offer Date, as
applicable, in compliance with the terms and conditions set forth in Paragraph
12 above (as though the Leased Premises were being sold to Original Tenant
thereunder), and (b) this Lease shall continue in full force and effect without
any abatement of Rent until such transfer of title, provided that Landlord may
by written notice to Tenant defer such closing date to a date not later than the
third anniversary of the Commencement Date. Until the closing of such sale, this
Lease shall continue in full force and effect without any abatement of Rent.

         45.      Warranties.

         To induce Landlord to enter into this Lease, any transferee to become
Landlord hereunder and any Lender to make a loan secured by a Mortgage, Tenant
makes the warranties set forth in Exhibit 45 attached hereto.


                                       50
<PAGE>   55
         IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to
be executed under seal as of the day and year first above written.


Signed and acknowledged in              LANDLORD:
the presence of:
                                        VALLEY FAIR IRVINGTON, LLC,
                                        an Ohio limited liability company

                                        By:    ______________________________
                                               Its member


                                               By:
______________________________

______________________________

Print Name:___________________                 Its:

______________________________

______________________________

Print Name:___________________




                                        TENANT:

                                        VALUE CITY DEPARTMENT STORES, INC.,
                                        an Ohio corporation


                                               By: 

_____________________________

_____________________________

Print Name:__________________                  Its:

_____________________________

_____________________________

Print Name:


                                       51
<PAGE>   56
COUNTY OF __________________  :
                              :  ss.
STATE OF  __________________  :

         The foregoing instrument was acknowledged before me this ___ day of
___________, 1998, by ________________, ________________ of
_________________________________, a(n) ________________________, member of
Valley Fair Irvington, LLC, an Ohio limited liability company, for and on behalf
of the company.



                                        Notary Public

                                        My Commission Expires:




COUNTY OF __________________  :
                              :  ss.
STATE OF  __________________  :

         The foregoing instrument was acknowledged before me this ___ day of
______________, 1998, by ________________, ________________ of Value City
Department Stores, Inc., an Ohio corporation, for and on behalf of the
corporation.


__________________________________
                                   Notary Public
                                   My Commission Expires:


                                       52
<PAGE>   57
                                    EXHIBIT 1

                             PERMITTED ENCUMBRANCES


1.       Slope and Drainage Rights as contained in Deed Book 4433, Page 6.


2.       Parking and Cross Access Easement as contained in Deed Book 5189, Page
         567.
<PAGE>   58
                                    EXHIBIT 2

                                 LEASED PREMISES
<PAGE>   59
                                    EXHIBIT 3

                                   BASIC RENT

         1. Interim Term. The Basic Rent for the Interim Term, if any, shall be
the monthly Basic Rent for the Primary Term, calculated on a per diem basis.

         2. Primary Term. The Basic Rent for the Primary Term shall be as
follows:


<TABLE>
<CAPTION>
          Lease Years                    Annual Basic Rent                  Monthly Basic Rent
          -----------                    -----------------                  ------------------
<S>                                      <C>                                <C>       
             1-15                           $725,250.00                         $60,437.50
             16-20                          $797,775.00                         $66,481.25
</TABLE>

         3. Renewal Terms. Basic Rent for each Renewal Term shall be determined
as provided herein. For each Renewal Term, annual Basic Rent shall be equal to
the greater of the annual Basic Rent for the final year of the Term ending prior
to such Renewal Term, and the Fair Market Rent. "Fair Market Rent" as used
herein shall mean an amount of annual rent for the Leased Premises for the
subject Renewal Term equivalent to the then-current fair market rate of annual
net rentals received in the general market area in which the Leased Premises are
located pursuant to lease provisions comparable to this Lease for a similar
lease term with respect to buildings having comparable characteristics,
including, but not limited to, age, condition and classification, and for
tenants with a financial condition similar to the then financial condition of
the Original Tenant. The rental rate or other terms of any then existing
subleases of the Premises shall not be considered in establishing Fair Market
Rent. The Fair Market Rent for the subject Renewal Term shall be determined
mutually by Landlord and Tenant at least eleven (11) months prior to the
commencement of the subject Renewal Term, or if no mutual determination is made,
by the following procedure. The parties shall attempt to agree upon an
appraiser. If the parties agree upon an appraiser, the appraiser so selected
shall determine the Fair Market Rent within thirty (30) days after selection. If
the parties fail to so agree upon the selection of one such appraiser within ten
(10) days after said eleven (11) month-period commences, Tenant and Landlord
shall each designate in a written notice to the other, within fifteen (15)
business days from the end of such ten (10) day period, one appraiser to
determine such Fair Market Rent. In the event either party fails to so select
its own appraiser, the appraiser selected by the other party shall determine
Fair Market Rent. If two appraisers are so selected, each appraiser shall
independently determine the Fair Market Rent for the Leased Premises and
complete and forward to Landlord and Tenant its separate appraisal reports
within thirty (30) days after the expiration of such fifteen (15) 


                                     Ex 3-1
<PAGE>   60
business day period. Any appraisal report not so forwarded within such time
period shall be excluded. If only one such report is timely forwarded, then the
appraisal set forth therein shall be the Fair Market Rent. In the event the two
reports are both timely forwarded and the lower appraisal is not less than
ninety percent (90%) of the higher appraisal, then the arithmetic mean of the
two appraisals shall be the Fair Market Rent. In the event the lower appraisal
is less than ninety percent (90%) of the higher appraisal then, within ten (10)
days after the second appraisal is delivered to the Landlord and Tenant, the two
appraisers shall meet and select a third appraiser. In the event the two
appraisers fail to select a third appraiser, either party may obtain court
appointment of such third appraiser. The third appraiser shall independently
determine the Fair Market Rent for the Leased Premises and promptly complete and
forward its report to Landlord and Tenant. The arithmetic mean of the two
appraisals which are closest in amount in terms of absolute dollars shall be the
Fair Market Rent. All appraisers shall be members in good standing of the
American Institute of Real Estate Appraisers or any organization succeeding
thereto and shall have had not less than ten (10) years experience with
commercial real estate of the type of the Leased Premises in the location where
the Leased Premiss are located. Each party shall pay the fees and expenses of
the appraiser it selected, and each party shall pay one-half of the fees and
expenses of the third appraiser (if any), and the costs, if any, of choosing
such third appraiser (if not chosen by agreement of the first two appraisers).
If for any reason the Basic Rent for a Renewal Term is not determined pursuant
to the foregoing procedures prior to the commencement of such Renewal Term, then
Tenant shall temporarily pay Basic Rent for such Renewal Term at the same rate
as the Basic Rent for the last year of the Term preceding such Renewal Term,
until Basic Rent for such Renewal Term is so determined; and when the Basic Rent
is determined as provided above, a payment will be made between Landlord and
Tenant within twenty (20) days thereof so that Tenant shall have paid the Basic
Rent for the Renewal Term as so determined.


                                     Ex 3-2
<PAGE>   61
                                    EXHIBIT 9

                               REPAIR OBLIGATIONS
<PAGE>   62
                                  EXHIBIT 12-1

                                 PURCHASE PRICE
<PAGE>   63
                                  EXHIBIT 12-2

              DETERMINATION OF REMAINDER VALUE AND LEASEHOLD VALUE

         If Landlord and Tenant are unable to agree on either or both of
Remainder Value and Leasehold Value, either one may at anytime following the
commencement of a Condemnation elect, by written notice (the "Exhibit 12
Notice") to determine the contested item or items pursuant to the procedures set
forth in this Exhibit 12. The parties shall then attempt to agree upon an
appraiser. If the parties agree upon an appraiser, the appraiser so selected
shall determine the contested item or items within thirty (30) days after
selection. If the parties fail to so agree upon the selection of one such
appraiser within ten (10) days after the giving of the Exhibit 12 Notice, Tenant
and Landlord shall each designate in a written notice to the other, within
fifteen (15) business days from the end of such ten (10) day period, one
appraiser to determine the contested item or items. In the event either party
fails to so select its own appraiser, the appraiser selected by the other party
shall determine the contested item or items. If two appraisers are so selected,
each appraiser shall independently determine such items and complete and forward
to Landlord and Tenant its separate appraisal reports within thirty (30) days
after the expiration of such fifteen (15) business day period. Any appraisal
report not so forwarded within such time period shall be excluded. If only one
such report is timely forwarded, then the determination of the contested item or
items set forth therein shall be binding on the parties. In the event the two
reports are both timely forwarded and, as to the contested item or items, the
lower appraisal is not less than ninety percent (90%) of the higher appraisal,
then the arithmetic mean of the two appraisals shall be the Remainder Value or
the Leasehold Value or both, as applicable. In the event the lower appraisal is
less than ninety percent (90%) of the higher appraisal as to the contested item
or items, then, within ten (10) days after the second appraisal is delivered to
the Landlord and Tenant, the two appraisers shall meet and select a third
appraiser. In the event the two appraisers fail to so select a third appraiser,
either party may obtain court appointment of such third appraiser. The third
appraiser shall independently determine the contested item or items and promptly
complete and forward its report to Landlord and Tenant. The arithmetic mean of
the two appraisals of the contested item or items which are closest in amount in
terms of absolute dollars shall be the Remainder Value or the Leasehold Value or
both, as applicable. All appraisers shall be members in good standing of the
American Institute of Real Estate Appraisers or any 


                                   Ex 12-2-1
<PAGE>   64
organization succeeding thereto and shall have had not less than ten (10) years
experience with commercial real estate of the type of the Leased Premises in the
location where the Leased Premises are located. Each party shall pay the fees
and expenses of the appraiser if selected, and each party shall pay one-half of
the fees and expenses of the third appraiser (if any), and the costs, if any, of
choosing such third appraiser (if not chosen by agreement of the first two
appraisers). If for any reason the Remainder Value or Leasehold Value or both
are not determined pursuant to the foregoing procedures or otherwise prior to
the distribution of Condemnation award, then the balance of the award in excess
of the Purchase Price shall be paid to and held by a mutually acceptable 
escrowee and held in an interest bearing account pending such determination.


                                    Ex 12-2-2
<PAGE>   65
                                   EXHIBIT 26


                            ENVIRONMENTAL OBLIGATIONS
<PAGE>   66
                                   EXHIBIT 43


                        SUBSTITUTION CLOSING REQUIREMENTS

         The following terms shall apply to the substitution of the Substitute
Premises for the Leased Premises pursuant to Section 43 of the Lease:

         A. The Leased Premises shall be conveyed to Tenant by Landlord in its
then existing condition, without warranty of any kind. Landlord need not
transfer and convey to Tenant or its designee any better title thereto than
existed as of the Commencement Date. Tenant shall accept such title, subject to
such liens, encumbrances, charges, exceptions and restrictions on, against or
relating to the Premises (including those arising pursuant to the terms of this
Lease), all matters arising by reason of the acts of Tenant (and Tenant's
sublessees and assignees) and all Legal Requirements, but free of any mortgages,
liens, encumbrances, charges, exceptions and restrictions which have been
granted by Landlord, except for those granted at the request of and with the
consent of Tenant.

         B. On the Substitution Closing Date, Landlord shall deliver to Tenant
at Tenant's expense:

                  1. A quitclaim deed conveying title to the Leased Premises,
         together with such instruments as shall be necessary to transfer to
         Tenant or its designee any other property then required to be
         transferred by Landlord pursuant to this Lease.

                  2. An affidavit stating that there is no foreign ownership of
         Landlord as described in Section 1445(b) of the Internal Revenue Code.

                  3. Applicable transfer declarations.

                  4. An ALTA title policy insuring title to the Substitute
         Premises in Landlord, subject to such liens, encumbrances, charges,
         exceptions and restrictions on, against or relating to the Substitute
         Premises (including those arising pursuant to the terms of this Lease)
         permitted hereunder, all matters arising by reason of the acts of
         Tenant (and Tenant's sublessees and assignees) and all Legal
         Requirements.


                                    Ex 43-1
<PAGE>   67
         C. On the Substitution Closing Date, Tenant shall deliver to Landlord
at Tenant's expense:

                  1. A general warranty deed conveying title to the Substitute
         Premises, together with such instruments as shall be necessary to
         transfer to Landlord any other property then required to be transferred
         by Tenant pursuant to this Lease.

                  2. An affidavit stating that there is no foreign ownership of
         Tenant as described in Section 1445(b) of the Internal Revenue Code.

                  3. Applicable transfer declarations.

                  4. An ALTA title policy insuring title to the Leased Premises
         in Tenant, subject to such liens, encumbrances, charges, exceptions and
         restrictions on, against or relating to the Leased Premises (including
         those arising pursuant to the terms of this Lease) permitted hereunder,
         all matters arising by reason of the acts of Landlord and otherwise in
         accordance with the provisions of Paragraph 43 of the Lease.

                  5. Opinion letter of counsel to Tenant in accordance with the
         provisions of Paragraph 43 of the Lease.

                  6. An amendment of this Lease in accordance with the provision
         of Paragraph 43 of the Lease.



                                     Ex 43-2
<PAGE>   68
                                   EXHIBIT 45

                               TENANT'S WARRANTIES

         Tenant represents and warrants to Landlord the following matters, each
as of the date hereof except as specifically provided otherwise in this Exhibit
45:

         (a) Tenant is a corporation existing and in good standing under the
laws of the jurisdiction of its incorporation, and has the corporate power and
authority, without the consent of any party, and all necessary licenses and
permits to enter into and perform its obligations under this Lease.

         (b) This Lease has been duly authorized, executed and delivered by
Tenant and constitutes the valid and binding obligations of Tenant enforceable
against Tenant in accordance with its terms, subject to bankruptcy, insolvency
or similar laws affecting creditors' and landlord's rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).

         (c) The execution and delivery of this Lease and compliance by Tenant
with all of its provisions will not (i) contravene any law or any order of any
court or governmental authority or agency applicable to or binding on Tenant or
(ii) contravene the provisions of, or constitutes a default under, its
certificate or articles of incorporation or by-laws or any indenture, mortgage,
contract or other agreement or instrument to which Tenant is a party or by which
it or any of its property may be bound or affected or result in the creation of
any lien or encumbrance upon the property of Tenant.

         (d) There are no proceedings pending or, to the knowledge of Tenant,
threatened and, to the knowledge of Tenant, there is no existing basis for any
such proceedings, against or affecting Tenant in any court or before any
governmental authority or arbitration board or tribunal which, if adversely
determined, could reasonably be expected to materially and adversely affect
Tenant, the Leased Premises or Landlord's interest in this Lease or materially
impair the ability of Tenant to perform its obligations under this Lease. Tenant
is not in default with respect to any order of any court or governmental
authority or arbitration board or tribunal which default could reasonably be
expected to materially adversely affect Tenant, the Leased Premises or
Landlord's interest in this Lease or materially impair the ability of Tenant to
perform its obligations under this Lease.

         (e) No attachments, execution proceedings, assignments for the benefit
of creditors, insolvency, bankruptcy, 


                                     Ex 3-1
<PAGE>   69
reorganization or other proceedings are pending or, to the best of Tenant's
knowledge, threatened against Tenant nor are any of such proceedings
contemplated by Tenant.

         (f) The written statements, information and other deliveries furnished
to Landlord or any Mortgagee or prospective Mortgagee or equity owner of
Landlord or prospective equity owner of Landlord by Tenant in connection with
the acquisition of the Leased Premises by Landlord, to the best of Tenant's
knowledge, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein or
herein not misleading.

         (g) To the best of Tenant's knowledge, the execution and delivery of
this Lease and the consummation of the transactions contemplated hereby do not
require the consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority or any other person or entity,
except for such of the foregoing that have been made or obtained.

         (h) Tenant has not received any written notice from any insurance
carrier of, nor is Tenant aware of, defects or inadequacies in the Leased
Premises which if not corrected would result in termination of insurance
coverage or increase in the cost thereof

         (i) No event which would constitute a default or an Event of Default
under this Lease has occurred and is continuing. Tenant is not in violation in
any material respect of any term of any charter instrument, by-law or other
material agreement or instrument to which it is a party or by which it may be
bound. Tenant is in compliance with all laws, ordinances, governmental rules and
regulations to which it is subject, failure to comply with which would
materially adversely affect Tenant or impair the ability of Tenant to perform
its obligations under this Lease, and Tenant has obtained all licenses, permits,
franchises and other governmental authorizations material to the leasing and
operation of the Leased Premises.

         (j) To the best of Tenant's knowledge, all tax returns and reports
required by law have been filed by Tenant have been duly filed or are subject to
existing extensions, and no material taxes, assessments, contributions, fees or
other governmental charges upon it or any of its assets or income which are due
and payable thereon are delinquent, except to the extent that such taxes,
assessments, contributions, fees or charges are being 


                                     Ex 3-2
<PAGE>   70
contested in good faith and by proper proceedings and against which appropriate
reserves are being maintained. There are no unpaid or outstanding real estate or
other taxes or assessments on or against the Leased Premises, or any part
thereof, except only general real estate taxes not yet due or payable. Copies of
the general real estate tax bills for the year ended December 31, 1997 with
respect to the Leased Premises and all subsequent assessment notices have been
delivered to Landlord. Said bills cover the whole of the Leased Premises and do
not cover or apply to any other property. To the best of Tenant's knowledge,
other than the Permitted Encumbrances, there are no standby fees or special
assessments against the Leased Premises and there is no pending or contemplated
action pursuant to which any standby fee or special assessment may be levied
against the Leased Premises.

         (k) To the best of Tenant's knowledge, (i) the Leased Premises have
been constructed in a good and workmanlike manner in conformity with good
construction and engineering practice at the time of construction, (ii) the
Leased Premises conform in all material respects to the description thereof
contained in this Lease and (iii) such construction has been in accordance with
all Legal Requirements. To the best of Tenant's knowledge, there are no material
defects in the Improvements, the structural elements thereof, the mechanical
systems (including without limitation all heating, ventilating,
air-conditioning, plumbing, electrical, elevator, security, utility and
sprinkler systems) therein, or the roofs, and all of the foregoing are in good
operating condition. The mechanical systems in the Improvements are independent
systems and do not depend on any other property or source of power or materials
for operation except customary utility services.

         (l) To the best of Tenant's knowledge, all water, sewer, gas, electric,
telephone, drainage and other utility equipment, facilities and services
required by law or necessary for the operation of the Leased Premises as they
are now being operated are installed and connected pursuant to valid permits,
are adequate to service the Leased Premises and are in good operating condition,
and all fees and other charges therefor have been paid in full, including, but
not limited to, tap-in and connection fees for public water and sanitary
sewerage facilities. To the best of Tenant's knowledge no fact or condition
exists which would result in the termination, reduction or impairment of the
furnishing of service to the Leased Premises of water, sewer, gas, electric,
telephone, drainage and other such utility services.

         (m) To the best of Tenant's knowledge, the Leased 


                                     Ex 3-3
<PAGE>   71
Premises, the facilities servicing the Leased Premises and the use and operation
thereof are (except as may disclosed in the Environmental Reports) in compliance
in all material respects with and are permitted, conforming structures under all
Legal Requirements and there are presently in effect all licenses, permits and
other authorizations necessary for the use, occupancy and operation of the
Leased Premises as they are presently being operated. To the best of Tenant's
knowledge, (i) there are no unrecorded agreements with any municipality or
governmental authority regarding zoning, off-site improvements or the nature of
improvements on the Leased Premises or the use thereof; (ii) access to and from
the Leased Premises (and every part thereof) to and from public roads is
sufficient to comply with all presently existing Legal Requirements affecting
the Leased Premises and for the present use of the Leased Premises; and (iii)
the streets roads and avenues adjoining the Leased Premises have been dedicated
to and accepted for maintenance and public use by the public authority having
jurisdiction thereover. To the best of Tenant's knowledge, there are no pending
or threatened requests, applications or proceedings to alter or restrict the
zoning or other use restrictions applicable to the Leased Premises or any
portion thereof, including without limitation proceedings involving eminent
domain, building code, environmental or zoning. Tenant has not received any
written notice of zoning, building, fire, water, use, health, environmental or
other statute, ordinance, code or regulatory violations issued in respect of the
Leased Premises. There are no off-site facilities necessary to ensure compliance
with Legal Requirements. To the best of Tenant's knowledge, the Leased Premises
comply in all material respects with all Legal Requirements.

         (n) To the best of Tenant's knowledge, except as may be shown on the
Survey delivered to Landlord, no wetlands now exist or previously existed on the
Leased Premises. To the best of Tenant's knowledge no portion of the Leased
Premises have appeared on the National Wetlands Inventory of the United States
Fish and Wildlife Service.

         (o) To the best of Tenant's knowledge, except as may be shown on the
Survey delivered to Landlord, all storm water flowing from the Leased Premises
drain directly into a public way in compliance with all legal requirements.

         (p) To the best of Tenant's knowledge, the soil condition of the Leased
Premises is such that it will support all of the Improvements for the
foreseeable life thereof without the 


                                     Ex 3-4
<PAGE>   72
need for unusual or new sub-surface excavations, fill, footings, caissons or
other installations.

         (q) Except as indicated in Schedule 1 attached hereto, Tenant is the
only tenant or occupant of the Leased Premises, and to Tenant's knowledge, there
are no leases, occupancy agreements or other agreements, understandings or
commitments with prospective tenants or other occupants relating to the Leased
Premises.

         (r) No brokerage commissions are due or shall become due with respect
to any of the Existing Subleases.

         It is intended that Landlord and each Indemnified Party may rely on the
foregoing representations and warranties, as if such representations and
warranties had been made in a separate instrument addressed and delivered to
each Indemnified Party, in consummating this Lease or, from time to time, making
an investment in Landlord, making any loan to Landlord or to owners of equity
interests in Landlord or purchasing any interest in the Leased Premises, any
Mortgage or any direct or indirect equity interest in Landlord. Tenant will,
upon request of Landlord from time to time, furnish to any prospective
Mortgagee, purchaser, investor or other person with a financial interest in the
continued or updated accuracy of the foregoing representations and warranties, a
certificate bringing the status of same forward (revised as necessary to reflect
changes which have occurred to the date of the certificate) to such date or
dates requested by Landlord.


                                     Ex 3-5