<PAGE>

                                                                    Exhibit 10.2

                                      Lease



                                 IRET Properties

                                    Landlord

                                       to

                        Bermans The Leather Experts, Inc.

                                     Tenant




                              Dated: June 21, 2002

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                          <C>
Article 1. Definitions ..................................................    1
        1.1    Adjustment Date ..........................................    1
        1.2    Additional Rent ..........................................    1
        1.3    Alteration ...............................................    1
        1.4    Annual Rent ..............................................    1
        1.5    Capital Repairs ..........................................    1
        1.6    Commencement Date ........................................    1
        1.7    Event of Default .........................................    1
        1.8    First Mortgage ...........................................    1
        1.9    First Mortgagee ..........................................    1
        1.10   Governmental Authorities .................................    1
        1.11   Impositions ..............................................    1
        1.12   Improvement ..............................................    1
        1.13   Insurance Requirements ...................................    2
        1.14   Interest Rate ............................................    2
        1.15   Land .....................................................    2
        1.16   Lease ....................................................    2
        1.17   Legal Requirements .......................................    2
        1.18   Property .................................................    2
        1.19   Restore or Restoration ...................................    2
        1.20   Taking ...................................................    2
        1.21   Tenant Equipment .........................................    2
        1.22   Term .....................................................    3
        1.23   Unavoidable Delays .......................................    3

Article 2. Demise of Property; Term; Extensions of Term .................    3
        2.1    Demise; Initial Term .....................................    3
        2.2    Extensions of Term .......................................    3
        2.3    Early Cancellation .......................................    3

Article 3. Rent .........................................................    3
        3.1    Annual Rent ..............................................    3
        3.2    Determination of Annual Rent .............................    4
        3.3    Adjustment ...............................................    4
        3.4    Payment Address ..........................................    4
        3.5    Net Lease ................................................    4
        3.6    Interest on Overdue Amounts ..............................    4
        3.7    Annual Rent Independent Obligation .......................    4

Article 4. Impositions ..................................................    4
        4.1    Impositions ..............................................    4
        4.2    Tenant Contested Impositions .............................    5
        4.3    Landlord Contested Impositions ...........................    6
        4.4    Other Tax, Assessment, Levy or Charge ....................    7
        4.5    Proof of Payment .........................................    7
</TABLE>

                                        i

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<TABLE>
<S>                                                                          <C>
        4.6    Escrow of Impositions .....................................    7

Article 5. Repairs .......................................................    8
        5.1    Capital Repairs and Legal Requirements ....................    8
        5.2    Exterior Repairs and Maintenance ..........................    8
        5.3    No Obligation by Landlord for Repairs .....................    8
        5.4    Capital Repair and Legal Requirements .....................    8
        5.5    Landlord Repair Right .....................................    9
        5.6    Implementation of Repairs .................................   10

Article 6. Insurance .....................................................   10
        6.1    Casualty Insurance ........................................   10
        6.2    Additional Insurance Requirements .........................   10
        6.3    Refund of Unused Premium ..................................   11
        6.4    Tenant's Insurance ........................................   12
        6.5    Rental Interruption Insurance .............................   12

Article 7. Damage to or Destruction of the Improvement ...................   12
        7.1    Restoration ...............................................   12
        7.2    Insurance Proceeds ........................................   12
        7.3    No Abatement or Termination ...............................   12
        7.4    Termination of Lease ......................................   13
        7.5    Mutual Release ............................................   13

Article 8. Condemnation ..................................................   13
        8.1    Total Taking ..............................................   13
        8.2    Partial Taking ............................................   14
        8.3    Determination of Total Taking .............................   14

Article 9. Alterations ...................................................   14
        9.1    General ...................................................   14
        9.2    Consent Required ..........................................   14
        9.3    Performance ...............................................   15
        9.4    Permits ...................................................   16
        9.5    No Request or Consent by Landlord .........................   16
        9.6    Notice of Non-Responsibility ..............................   16

Article 10. Discharge of Liens ...........................................   16

Article 11. Use of Property ..............................................   16

Article 12. Entry on Property by Landlord ................................   17

Article 13. Intentionally Omitted ........................................   17

Article 14. Indemnification ..............................................   17
        14.1   Indemnification ...........................................   17
        14.2   Survival ..................................................   17
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                           <C>
Article 15. Transfers .....................................................   17
        15.1   By Landlord ................................................   17
        15.2   By Tenant ..................................................   17

Article 16. Estoppel Certificates .........................................   19

Article 17. Default .......................................................   19
        17.1   Events of Default; Termination .............................   19
        17.2   Repossession ...............................................   20
        17.3   Reletting ..................................................   20
        17.4   Survival of Obligations; Current Damages ...................   20
        17.5   No Waiver ..................................................   21
        17.6   Attorney Fees; Survival ....................................   21

Article 18. Surrender of the Property .....................................   21
        18.1   Surrender ..................................................   21
        18.2   Removal of Tenant Equipment ................................   21
        18.3   Survival ...................................................   21

Article 19. No Merger of Title ............................................   22

Article 20. Quiet Enjoyment ...............................................   22

Article 21. Performance for Tenant ........................................   22
        21.1   Performance ................................................   22
        21.2   Payment ....................................................   22
        21.3   Survival ...................................................   22

Article 22. Notices .......................................................   22

Article 23. Contests ......................................................   23
        23.1   Contest; Conditions ........................................   23
        23.2   All Such Contests ..........................................   24

Article 24. Tenant's Right to Cure Defaults Under First Mortgage ..........   24

Article 25. Subordination and Non-Disturbance .............................   24

Article 26. Miscellaneous .................................................   24
        26.1   Consent ....................................................   24
        26.2   Short Form Lease ...........................................   25
        26.3   Miscellaneous ..............................................   25
        26.4   Arbitration of Disputes ....................................   25

Exhibit A - Legal Description
Exhibit B - Tenant Equipment List
</TABLE>

                                       iii

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                                      LEASE

     This Lease is made and entered into as of the 21st day of June, 2002, by
and between IRET Properties, a North Dakota limited partnership ("Landlord") and
Bermans The Leather Experts, Inc., a Delaware corporation ("Tenant").

                             Article 1. Definitions

     The following terms shall have the meanings set forth in this Article:

     1.1  Adjustment Date. Each anniversary of the Commencement Date shall be an
Adjustment Date.

     1.2  Additional Rent. As defined in Section 3.5.

     1.3  Alteration. Construction, reconstruction, replacement, repairs,
renewals, alterations, changes, additions, improvements and demolitions of or to
the Improvement and all excavations at any time made or to be made in, or on
about the Land.

     1.4  Annual Rent. The Annual Rent at the per annum rate provided for in
Section 3.2, as adjusted pursuant to Article 3 or as otherwise adjusted pursuant
to this Lease.

     1.5  Capital Repairs. As defined in Section 5.1.

     1.6  Commencement Date. The date of commencement of the Term hereof, which
shall be the date first above written.

     1.7  Event of Default. As defined in Section 17.1.

     1.8  First Mortgage. Any first mortgage or deed of trust (together with the
notes secured thereby and security instruments collateral thereto) of record now
or hereafter placed against the Property by Landlord, any increase, amendment,
extension, refinancing or recasting of a First Mortgage. For the purposes
hereof, a First Mortgage shall be deemed to continue in effect after foreclosure
thereof and during any period of redemption therefrom.

     1.9  First Mortgagee. The holder from time to time of the First Mortgage,
including such holder during any period of redemption following the foreclosure
of the First Mortgage.

     1.10 Governmental Authorities. All federal, state, county, municipal and
local governments having jurisdiction over the Property.

     1.11 Impositions. As defined in Section 4.1.

     1.12 Improvement. The building, fixtures and other improvements now located
on the Land and all alterations and additions thereto and replacements thereof,
including by reason of Restoration, but excluding in any event the Tenant
Equipment. All Improvements shall be and remain the property of Landlord,
subject to this Lease.

<PAGE>

     1.13 Insurance Requirements. All terms of any insurance policy covering or
applicable to the Property or any part thereof, all requirements of the issuer
of any such policy, and all orders, rules, regulations and other requirements of
the National Board of Fire Underwriters (or any other body exercising similar
functions) applicable to or affecting the Property or any part thereof or any
use or condition of the Property or any part thereof.

     1.14 Interest Rate. The simple per annum interest rate equal to the lesser
of (a) the prime rate, plus 2% (two percent) and (b) the maximum lawful rate of
interest, but in any event not less than 10.5% (ten and one-half percent). As
used herein, the "prime rate" means the rate of interest published from time to
time as the "Prime Rate" in the Wall Street Journal under the heading Money
Rates; provided, however, that (i) if more than one such rate is published
therein the prime rate shall be the highest such rate and (ii) if such rate is
no longer published in the Wall Street Journal or is otherwise unavailable, the
prime rate shall be a substantially comparable index of short term loan interest
rates charged by banks to corporate borrowers selected by Landlord and approved
by Tenant, such approval not to be unreasonably withheld.

     1.15 Land. The land, but not any Improvement or any other building,
structure or other improvement, legally described on Exhibit A, and all
easements, appurtenances and hereditaments thereto.

     1.16 Lease. This Lease, including the following exhibits attached hereto
and made a part hereof:

                 Exhibit A:   Legal Description of the Land
                 Exhibit B:   Tenant Equipment List

     1.17 Legal Requirements. All laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, directions and requirements of all
Governmental Authorities which now or at any time hereafter may be applicable to
or required in connection with the Property or any part thereof, or any use or
condition of the Property or any part thereof.

     1.18 Property. The Land and the Improvement, collectively.

     1.19 Restore or Restoration. The repair, restoration or rebuilding of the
Property or any part thereof following any Taking, damage to or destruction of
the same as nearly possible to its size, type and character immediately prior to
such Taking, damage or destruction, in accordance with all Legal Requirements
and Insurance Requirements, with such Alterations as may be determined by Tenant
consistent with the provisions of Article 9, together with any temporary repairs
and property protection pending completion of the work.

     1.20 Taking. A taking of all or any part of the Property, or any interest
therein or right accruing thereto, including, without limitation, any right of
access thereto existing on the date of this Lease, as the result of or in lieu
or in anticipation of the exercise of the right of condemnation or eminent
domain. The Taking shall be deemed to occur on the date on which the condemning
authority takes possession.

     1.21 Tenant Equipment. All trade fixtures and other special equipment,
machinery and personal property now or hereafter installed or located on the
Land or in the Improvement and

                                        2

<PAGE>

primarily used for the business conducted from time to time at the Property,
including without limitation the items listed on Exhibit B.

     1.22 Term. The initial term of this Lease as provided in Section 2.1 and
any extension thereof resulting from Tenant's exercise of the extension option
granted under Section 2.2.

     1.23 Unavoidable Delays. Acts of God, casualties, war, civil commotion,
embargo, riots, strikes, unavailability of materials (but not unavailability of
funds) and any other events which are not within the reasonable control of the
party in question to prevent, control or correct.

             Article 2. Demise of Property; Term; Extensions of Term

     2.1  Demise; Initial Term. Landlord, for and in consideration of the rents
hereinafter reserved and the covenants and agreements hereinafter contained on
the part of Tenant to be paid, kept and performed, does hereby demise and lease
to Tenant, and Tenant does hereby take and hire, upon and subject to the terms
and conditions herein set forth, the Property for an initial Term commencing on
the Commencement Date and ending fifteen (15) years thereafter, subject to
extension or sooner termination as provided in this Lease.

     2.2  Extensions of Term. Tenant is hereby granted the option to extend the
Term of this Lease for one (1) period of five (5) years, upon the same terms and
conditions as applicable during the initial Term. Tenant's option to extend the
Term shall be exercised by giving Landlord written notice thereof not less than
six (6) months prior to the expiration of the initial Term. Said extension
period shall constitute an extension of the Term, so that this Lease and each
and every covenant, agreement and provision thereof shall be and remain in full
force and effect during the Term as extended and with the same force and effect
as if the Term were originally for such extended period.

     2.3  Early Cancellation. Tenant may, at its election, at any time upon at
least twelve (12) months prior notice to Landlord, cancel this Lease and the
Term, which cancellation shall be effective as of the day prior to the tenth
anniversary of the Commencement Date. Tenant shall, at least thirty (30) days
prior to said cancellation effective date, pay to Landlord at the same address
as in effect for the payment of Annual Rent a cancellation fee of $500,000.00.
On said cancellation effective date, this Lease and the Term shall expire with
the same effect as if said date were the originally scheduled expiration of the
Term.

                                 Article 3. Rent

     3.1  Annual Rent. Throughout the Term, Tenant covenants and agrees to pay
to Landlord, without demand, setoff or abatement except as provided in this
Lease, the Annual Rent at the per annum rate set forth in Section 3.2, as
adjusted in accordance with the provisions of this Lease. The Annual Rent
determined as of each Adjustment Date shall be effective until again adjusted in
accordance with the provisions of this Lease. The Annual Rent shall be payable
in equal installments of 1/12th of the Annual Rent in advance on the first day
of each calendar month included in the Term, and at that rate payable in advance
for any portion of a calendar month at the commencement or the end of the Term.

                                        3

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     3.2  Determination of Annual Rent. Subject to adjustment in accordance with
the provisions of this Lease, the Annual Rent for the period commencing on the
Commencement Date and continuing until the first Adjustment Date, shall be at
the per annum rate equal to $1,365,000.00.

     3.3  Adjustment. As of each Adjustment Date during the Term (including as
of the commencement of the extended term pursuant to Section 2.2), the amount of
the Annual Rent shall be increased by an amount equal to two and one-half
percent (2.50%) of the Annual Rent in effect immediately prior to the Adjustment
Date in question.

     3.4  Payment Address. All Annual Rent shall be paid by Tenant to Landlord
at the address of Landlord set forth in Article 22, or to such other address as
Landlord may direct by notice to Tenant.

     3.5  Net Lease. Except as otherwise provided in this Lease, the Annual Rent
shall be absolutely net to Landlord so that this Lease shall yield, net to
Landlord, the Annual Rent at the rate specified above in each year of the Term
of this Lease and that all Impositions, insurance premiums, utility charges,
maintenance, repair, Capital Repair, all expenses relating to compliance with
laws, and all other costs, fees, charges, expenses, reimbursements and
obligations of every kind and nature whatsoever relating to the Property which
may arise or become due during the Term shall be paid or discharged by Tenant,
in each case except as otherwise provided in this Lease. In the event Tenant
fails to pay or discharge any of such expenses which it is obligated to pay or
discharge (all such items being sometimes hereinafter collectively referred to
as "Additional Rent"), Landlord may exercise its remedies under Article 21

     3.6  Interest on Overdue Amounts. Any installment of Annual Rent,
Additional Rent or other charges to be paid by Tenant accruing under the
provisions of this Lease, which shall not be paid within five (5) days after its
due date, shall bear interest at the Interest Rate from the date when the same
is due until the same shall be paid.

     3.7  Annual Rent Independent Obligation. Tenant's covenants to pay the
Annual Rent and the Additional Rent are independent of any other covenant,
condition, provision or agreement herein contained. Nothing herein contained
shall be deemed to suspend or delay the payment of any amount of money or charge
at the time the same becomes due and payable hereunder, or limit any other
remedy of Landlord. Annual Rent and Additional Rent are sometimes collectively
referred to as "rent." Except as otherwise provided in this Lease, rent shall be
payable without deduction, offset, prior notice or demand, in lawful money of
the United States.

                             Article 4. Impositions

     4.1  Impositions. Tenant covenants and agrees to pay during the Term, as
Additional Rent, before any fine, penalty, additional interest or cost may be
added thereto for the nonpayment thereof, all real estate taxes, special
assessments, water rates and charges, sewer rates and charges, including any sum
or sums payable for present or future sewer or water capacity, charges for
public utilities furnished to the Property or chargeable against the Property,

                                        4

<PAGE>

including all charges for water, sewage, heat, gas, light, garbage, electricity,
telephone, steam, power, or other public or private utility services, street
lighting, licenses, permits, inspection fees, other governmental charges, and
all other charges or burdens of whatsoever kind and nature (including costs,
fees, and expenses of complying with any restrictive covenants or similar
agreements to which the Property are now subject) incurred in the use,
occupancy, operation, leasing or possession of the Property, without
particularizing by any known name or by whatever name hereafter called, and
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforeseen (all of which are sometimes herein referred to as
"Impositions"), which at any time during the Term may have been or may be
assessed, levied, confirmed, imposed upon, or become a lien on the Property, or
any portion thereof, or any appurtenance thereto, and such easements or rights
as may now or hereafter be appurtenant or appertain to the use of the Property,
to the extent such Impositions are due and payable during the Term. Tenant shall
pay all special (or similar) assessments for public improvements or benefits
which, during the Term, shall be laid, assessed, levied or imposed upon or
become payable or become a lien upon the Property, or any portion thereof to the
extent installments of such Impositions are due and payable during the Term.
Tenant shall pay all special assessments or installments thereof (including
interest accrued thereon), whether heretofore or hereafter laid, assessed,
levied or imposed upon the Property, or any portion thereof, which are due and
payable during the Term. Tenant shall pay all real estate taxes, whether
heretofore or hereafter levied or assessed upon the Property, or any portion
thereof, which are due and payable during the Term. Provisions herein to the
contrary notwithstanding, Landlord shall pay that portion of the real estate
taxes and installments of special assessments due and payable in respect to the
Property during the year which the Term ends which the number of days in said
year not within the Term bears to 365, and Tenant shall pay the balance of said
real estate taxes and installments of special assessments during said year.
Further, with respect to special assessments or other Impositions of a capital
nature, Tenant shall only be responsible for the payment of the amount of
special assessments that would be payable had Landlord elected to pay such
special assessments over the greatest number of installments allowed by the
taxing authority, at the interest rate offered by the taxing authority, provided
that in the case of special assessments or other Impositions of a capital nature
where there is no such election available to Landlord, Tenant may at its
election by notice to Landlord require the same to be paid by Landlord when due,
and then amortize the same, together with interest thereon at the rate of ten
and one-half percent (10.5%), on a level monthly payment basis over a period
equal to twenty (20) years or the reasonably estimated practical useful life of
the improvement, whichever is less. Tenant shall be obligated during the Term to
pay the monthly amortization amount to Landlord each month during the
amortization period as Additional Rent.

     4.2  Tenant Contested Impositions.

          (a) Tenant shall have the right at its own expense to contest the
amount or validity, in whole or in part, of any Imposition by appropriate
proceedings diligently conducted in good faith, but only after payment of such
Imposition, unless such payment, or a payment thereof under protest, would
operate as a bar to such contest or interfere materially with the prosecution
thereof, in which event, notwithstanding the provisions of Section 4.1 hereof,
Tenant may postpone or defer payment of such Imposition if (i) neither the
Property nor any portion thereof would, by reason of such postponement or
deferment, be in danger of being forfeited or lost, and (ii) if Landlord
reasonably deems itself insecure, Tenant shall have deposited with

                                        5

<PAGE>

Landlord cash or a certificate of deposit payable to Landlord issued by a
national bank or federal savings and loan association letter of credit or other
security reasonably acceptable to Landlord, in the amount of the Imposition so
contested and unpaid, together with all interest and penalties which may accrue
in Landlord's reasonable judgment in connection therewith, and all charges that
may or might be assessed against or become a charge on the Property, or any
portion thereof, as a result of and during the pendency of such proceedings.

          (b)  If, during the continuance of such proceedings, Landlord shall,
from time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, within twenty (20) days after demand of Landlord,
make additional deposits of such additional security as Landlord may reasonably
request. Upon failure of Tenant to make such additional deposits and if
Landlord's interest in the Property is in imminent danger of forfeiture or loss,
then the amount theretofore deposited may be applied by Landlord to the payment,
removal and discharge of such Imposition, and the interest, fines and penalties
in connection therewith, and any costs, fees (including attorneys' fees) and
other liability (including costs reasonably incurred by Landlord) accruing in
any such proceedings.

          (c)  Upon the termination of any such proceedings, Tenant shall pay
the amount of such Imposition or part thereof, if any, as finally determined in
such proceedings, the payment of which may have been deferred during the
prosecution of such proceedings, together with any costs, fees, including
attorneys' fees, interest, penalties, fines and other liability in connection
therewith, and upon such payment Landlord shall return all security deposited
with it with respect to the contest of such Imposition, as aforesaid, or, at the
written direction of Tenant, Landlord shall make such payment out of the funds
or other security on deposit with Landlord and the balance, if any, shall be
returned to Tenant, together with in each case described above all interest or
other earnings thereon. Tenant shall be entitled to the refund of any
Imposition, penalty, fine and interest thereon received by Landlord which have
been paid by Tenant or which have been paid by Landlord but for which Landlord
has been previously reimbursed in full by Tenant.

          (d)  Landlord shall not be required to join in any proceedings
referred to in this Section 4.2, unless the provisions of any law, rule or
regulation at the time in effect shall require that such proceedings be brought
by or in the name of Landlord, in which event Landlord shall join in such
proceedings or permit the same to be brought in Landlord's name upon compliance
with such conditions as Landlord may reasonably require. Landlord shall not
ultimately be subject to any liability for the payment of any fees, including
attorneys' fees, costs and expenses in connection with such proceedings. Tenant
agrees to pay all such fees (including reasonable attorneys' fees), costs and
expenses or, on demand, to make reimbursement to Landlord for such payment.

     4.3  Landlord Contested Impositions. In addition to the right of Tenant
under Section 4.2 hereof to contest the amount or validity of Impositions,
Landlord shall also have the right, but not the obligation, to contest the
amount or validity, in whole or in part, of any Impositions not contested by
Tenant, by appropriate proceedings conducted in the name of Landlord or in the
name of Landlord and Tenant. If Landlord elects to contest the amount or
validity, in whole or in part, of any Impositions, such contests by Landlord
shall be at Landlord's expense, provided, however, that if the amounts payable
by Tenant for Impositions are reduced by reason of

                                        6

<PAGE>

Landlord's contest of Impositions, Tenant shall reimburse Landlord for costs
reasonably incurred by Landlord in contesting Impositions, but such
reimbursements shall not be in excess of the amount saved by Tenant by reason of
Landlord's actions in contesting such Impositions. If Landlord contests any
Imposition, as aforesaid, Tenant will have the option to require Landlord to
engage counsel which will undertake the contest at an hourly rate, in which
event Tenant agrees to pay the fees of such counsel, whether or not the contest
is successful. If any contest by Landlord results in any increase in
Impositions, then Landlord, and not Tenant, shall pay the incremental increase
resulting from such contest.

     4.4  Other Tax, Assessment, Levy or Charge. If, at any time during the term
of this Lease, any method of taxation shall be such that there shall be levied,
assessed or imposed on Landlord, or on the Annual Rent or Additional Rent, or on
the Property or on the value of the Property, or any portion thereof, a sales or
use tax, or other tax on the rents received therefrom, Tenant covenants to pay
and discharge the same, it being the intention of the parties hereto that the
rent to be paid hereunder shall be paid to Landlord absolutely net without
deduction or charge of any nature whatsoever foreseeable or unforeseeable,
ordinary or extraordinary, or of any nature, kind or description, except as in
this Lease otherwise expressly provided and, in any event, for any Imposition
which is assessed or imposed on a progressive rate structure (that is, with a
higher rate of tax as the amount or value of the income or property increases),
Tenant shall only be obligated to pay the amount that would be payable if the
Imposition were limited to the rent payable under this Lease or to the Property
and Landlord shall pay the balance. Nothing in this Lease contained shall
require Tenant to pay any municipal, state or federal income or excess profits
taxes assessed against Landlord, or any municipal, state or federal capital
levy, estate, succession, inheritance or transfer taxes of Landlord, or
corporation or other entity franchise taxes imposed upon any corporate or other
entity owner of the fee of the Property.

     4.5  Proof of Payment. Tenant shall furnish Landlord, upon Landlord's
request and not more than three (3) times per calendar year, official receipts
of the appropriate taxing authority, cancelled checks or other appropriate proof
satisfactory to Landlord, evidencing the payment of any Imposition or other tax,
assessment, levy or charge payable by Tenant hereunder. The certificate, advice
or bill of the appropriate official designated by law to make or issue the same
or to receive payment of any Imposition or other tax, assessment, levy or charge
may be relied upon by Landlord as sufficient evidence that such Imposition or
other tax, assessment, levy or charge is due and unpaid at the time of the
making or issuance of such certificate, advice or bill.

     4.6  Escrow of Impositions. If an Event of Default has occurred based on
the non-payment of Annual Rent or Additional Rent, at Landlord's written demand
and for so long as such Event of Default continues, Tenant shall pay to Landlord
the known or estimated yearly real estate taxes and assessments payable with
respect to the Property in monthly payments equal to one-twelfth of the known or
estimated yearly real estate taxes and assessments next payable with respect to
the Property. From time to time Landlord may re-estimate the amount of real
estate taxes and assessments, and in such event Landlord shall notify Tenant, in
writing, of such re-estimate and fix future monthly installments for the
remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-estimated amount over the balance of such period after
giving credit for payments made by Tenant on the previous estimate. If the total
monthly payments made by Tenant pursuant to this Section shall exceed the amount
of payments necessary for said taxes and assessments, such excess shall be
credited on subsequent monthly

                                        7

<PAGE>

payments of the same nature, but if the total of such monthly payments so made
under this paragraph shall be insufficient to pay such taxes and assessments
when due, then Tenant shall pay to Landlord such amount as may be necessary to
make up the deficiency. Landlord shall pay the real estate taxes and
installments of special assessments for which the escrow payments have been made
by Tenant as and when the same become due and payable. Payment by Tenant of real
estate taxes and assessments under this Section shall be considered as
performance of such obligation under the provisions of Section 4.1.

                               Article 5. Repairs

     5.1  Capital Repairs and Legal Requirements. Tenant, at its sole cost and
expense and except as provided in Section 5.4 below, throughout the Term, shall
take good care of the Property (including any improvements hereafter erected or
installed at the Property), and shall keep the same in good order, condition and
repair, shall make and perform all routine maintenance thereof and all necessary
repairs thereto, interior and exterior, structural and nonstructural, ordinary
and extraordinary, foreseen and unforeseen, of every nature, kind and
description. When used in this Article 5, "repairs" shall include all necessary
replacements, renewals, alterations, additions and betterments, excluding
Capital Repairs and Legal Requirements. All repairs made by Tenant shall be at
least equal in quality to the original work and shall be made by Tenant in
accordance with all Legal Requirements. The necessity for or adequacy of
maintenance and repairs shall be measured by the standards which are appropriate
for Improvements of similar construction and class, provided that Tenant shall
in all events make any repairs necessary to avoid any structural damage or other
damage or injury to the Improvements.

     5.2  Exterior Repairs and Maintenance. Tenant, at its sole cost and expense
and except as provided in Section 5.4 below, shall take good care of, repair and
maintain all driveways, pathways, roadways, sidewalks, curbs, spur tracks,
parking areas, loading areas, landscaped areas, entrances and passageways in
good order and repair and shall promptly remove all accumulated snow, ice and
debris from any and all driveways, pathways, roadways, sidewalks, curbs, parking
areas, loading areas, entrances and passageways, and keep all portions of the
Property, including areas appurtenant thereto, in a clean and orderly condition
free of snow, ice, dirt, rubbish, debris and unlawful obstructions.

     5.3  No Obligation by Landlord for Repairs. Landlord shall not be required
to furnish any services or facilities or to make any repairs or alterations in,
about or to the Land or any Improvements hereafter erected thereon, except as
provided in Section 5.4. Except as otherwise provided in this Lease, Tenant
hereby assumes the full and sole responsibility for the condition, operation,
repair, replacement, maintenance and management of the Property, and all
Improvements hereafter erected thereon, and Tenant hereby waives any rights
created by any law now or hereafter in force to make repairs to the Property or
Improvements hereafter erected thereon at Landlord's expense.

     5.4  Capital Repair and Legal Requirements.

     (a)  As used herein, the term "Capital Repair" means any repair,
replacement and improvement, including any Alteration necessary to comply with
Legal Requirements, which

                                        8

<PAGE>

would be capitalized under generally accepted accounting principles in the
United States, excluding all repairs to the Property to the extent made
necessary by any intentional misuse during the Term by Tenant or any of its
officers, employees, or subtenants.

     (b)  Except in the case of emergency, Tenant shall not make any Capital
Repairs without first obtaining Landlord's prior written consent, which consent
with respect to Capital Repairs commenced during the last year of the Term,
Landlord may withhold in its sole discretion. With respect to any Capital Repair
as to which Landlord withholds its consent or attaches conditions thereto (i)
Tenant may nonetheless proceed with the Capital Repair if (A) it notifies
Landlord that it will pay for the same without contribution from Landlord,
subject to Tenant's prevailing in any arbitration as to whether Landlord
improperly withheld or conditioned its consent and (B) obtains Landlord's
consent as to the manner in which the Capital Repair will be implemented, if and
to the extent such consent is required under Section 9.2, (ii) Tenant may
dispute Landlord's withholding of consent or the conditions attached thereto
pursuant to arbitration under Section 26.4, and (iii) Tenant shall not have any,
and Landlord shall assume all, liability and responsibility for the proposed
Capital Repair (including any increased cost of repair and maintenance that
results from the failure or unreasonable delay in effecting the Capital Repair)
if Landlord improperly withholds or conditions its consent or withholds consent
during the last year of the Term in its sole discretion.

     (c)  All Capital Repairs shall be paid by Landlord, either by payment to
Tenant or as Tenant may direct, during the course of the work upon written
application from Tenant made not more often than monthly. The application shall
be accompanied by evidence reasonably satisfactory to Landlord that the amount
requested is then due and payable along with the written agreement of any
Guarantor of this Lease to guarantee Amortization Amount. Upon completion of the
work and final payment by Landlord, the full cost so paid by Landlord, together
with interest thereon from the date of payment by Landlord at the lowest
commercially reasonable rate, but in any event not less than ten and one/half
percent (10.5%) nor more than twelve and one-half percent (12.5%), shall be
amortized over the useful life of the Capital Repair in equal monthly
installments of principal and interest (the "Amortization Installments").
Commencing on the first day of the month thereafter and continuing during the
Term (including any extension thereof) or until the end of the amortization
period, whichever first occurs, Tenant shall pay to Landlord, as additional
rent, on the same date and in the same manner as monthly installments of Annual
Rent, the Amortization Installments, prorated for any partial month at the end
of the Term.

     5.5  Landlord Repair Right. If Tenant should fail to perform any of its
obligations under this Article 5 within thirty (30) days, or such longer period
as may be appropriate provided such performance is promptly commenced and
thereafter prosecuted to completion with reasonable diligence, of receipt of
written notice from Landlord of such failure to perform hereunder, then Landlord
may, if it so elects, in addition to any other remedies provided herein, effect
such repairs, maintenance or Capital Repairs, pursuant to Article 21, provided
that Capital Repairs shall be paid by Landlord, with the amortization period
commencing upon completion thereof and full payment therefor by Landlord,
subject to payment by Tenant of the Amortization Installments in respect thereof
in accordance with Section 5.4(c).

                                        9

<PAGE>

     5.6  Implementation of Repairs. All repairs, including Capital Repairs
whether effected by Landlord or Tenant, shall be (a) made in accordance with the
provisions of Article 9 and other applicable provisions of this Lease, (b) equal
in quality and class to the original work, (c) effected with all due diligence
and in a workmanlike manner, and (d) except for Capital Repairs, promptly and
fully paid for by Tenant. Tenant will do all shoring of foundations and walls of
any building or other improvements or of the ground adjacent thereto and every
other act necessary or appropriate for the preservation and safety of the
Property by reason of or in connection with any excavation or other building
operation upon the Property or any adjoining property, whether or not the owner
of the Property shall, by any Legal Requirement, be required to take such action
or be liable for failure to do so.

                              Article 6. Insurance

     6.1  Casualty Insurance. Tenant, at its sole cost and expense, shall obtain
and continuously maintain in full force and effect during the Term of this
Lease, commencing with the date that rental (full or partial) commences,
policies of insurance covering the Improvements constructed, installed or
located on the Property naming the Landlord, as an additional insured, against
(a) loss or damage by fire; (b) loss or damage from such other risks or hazards
now or hereafter embraced by an "Extended Coverage Endorsement," including, but
not limited to, windstorm, hail, explosion, vandalism, riot and civil commotion,
damage from vehicles, smoke damage, water damage and debris removal; (c) loss
for flood if the Property is in a designated flood or flood insurance area; (d)
loss for damage by earthquake if the Property is located in an earthquake-prone
area; (e) loss from so-called explosion, collapse and underground hazards; and
(f) loss or damage from such other risks or hazards of a similar or dissimilar
nature which are now or may hereafter be customarily insured against, and which
are available at commercially reasonable rates, with respect to Improvements
similar in construction, design, general location, use and occupancy to the
Improvements at the Property. At all times, such insurance coverage shall be in
an amount equal to 100% of the then "full replacement cost" of the Improvements
at the Property. "Full Replacement Cost" shall be interpreted to mean the cost
of replacing the Improvements, exclusive of excavations, footings and
foundations below the lowest floor level, without deduction for depreciation or
wear and tear, and it shall include a reasonable sum for architectural,
engineering, legal, administrative and supervisory fees connected with the
restoration or replacement of the Improvements in the event of damage thereto or
destruction thereof. If a sprinkler system shall be located in the Improvements,
sprinkler leakage insurance shall be procured and continuously maintained by
Tenant at Tenant's sole cost and expense.

     6.2  Additional Insurance Requirements. During the Term of this Lease,
Tenant, at its sole cost and expense, shall obtain and continuously maintain in
full force and effect the following insurance coverage:

          (a)  Commercial general liability insurance against any loss,
liability or damage on, about or relating to the Property, or any portion
thereof, with limits of not less than Two Million Dollars ($2,000,000.00)
combined single limit, per occurrence and aggregate, coverage on an occurrence
basis in any combination of base and excess coverage limits. Any such insurance
obtained and maintained by Tenant shall name Landlord as an additional insured
therein and shall be obtained and maintained from and with a reputable and
financially sound insurance company with an A.M. Best rating of at least A-; X
and authorized to issue such

                                       10

<PAGE>

insurance in the state in which the Property is located. Such insurance shall
specifically insure for covered risks (by contractual liability endorsement)
Tenant's obligations under Article 14 of this Lease.

          (b)  Boiler and pressure vessel (including, but not limited to,
pressure pipes, steam pipes and condensation return pipes) insurance, provided
the Improvement contains a boiler or other pressure vessel or pressure pipes.
Landlord shall be named as an additional insured in such policy or policies of
insurance.

          (c)  Such other insurance and in such amounts as may from time to time
be reasonably required by Landlord, against other insurable hazards which at the
time are customarily insured against, and which are available at commercially
reasonable rates, in the case of property and/or buildings or improvements
similar in construction, design, general location, use and occupancy to the
Improvements.

          (d)  The insurance set forth in this Article 6 shall be maintained by
Tenant at not less than the limits set forth herein until reasonably required to
be changed from time to time by Landlord, in writing, whereupon Tenant covenants
to obtain and maintain thereafter such protection in the amount or amounts so
required by Landlord to the extent so customarily insured and available at
commercially reasonable rates.

          (e)  All policies of insurance required by Sections 6.1, 6.2(b), and,
as applicable, 6.2(c) shall provide that the proceeds thereof shall be payable
to Landlord and if Landlord so requests shall also be payable to any contract
purchaser of the Property and the holder of any mortgages now or hereafter
becoming a lien on the fee of the Property, or any portion thereof, as the
interest of such purchaser or holder appears pursuant to a standard named
insured or mortgagee clause. Tenant shall not, on Tenant's own initiative or
pursuant to request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in Section 6.1 or 6.2 hereof, unless Landlord is named therein as an
additional insured with loss payable as in 6.1 and 6.2. Tenant shall immediately
notify Landlord whenever any such separate insurance is taken out and shall
deliver to Landlord original certificates evidencing the same.

          (f)  Each policy required under this Article 6 shall provide by
endorsement or otherwise (i) that such policy shall not be cancelled or
materially changed without at least 30 days prior written notice to Landlord,
and (ii) that the insurance as to the interest of Landlord shall not be
invalidated by any act or neglect of Landlord or Tenant. Certificates of
insurance shall be in a form reasonably acceptable to Landlord, shall be
delivered to Landlord upon commencement of the Term and prior to expiration of
such policy, new certificates of insurance, shall be delivered to Landlord not
less than twenty (20) days prior to the expiration of the then current policy
term.

          (g)  Any insurance required under this Article 6 may be carried on a
blanket policy basis.

     6.3  Refund of Unused Premium. Upon expiration of the term of this Lease,
the unearned premiums upon any insurance policies or certificates thereof lodged
with Landlord by

                                       11

<PAGE>

Tenant shall, subject to the provisions of Article 6 hereof, be payable to
Tenant, provided that there shall not then exist a monetary Event of Default.

     6.4  Tenant's Insurance. Proceeds of any insurance carried by Tenant on the
Tenant Equipment or any other property of Tenant shall be payable directly to
Tenant and Tenant shall have the exclusive right to adjust and settle losses
with respect thereto.

     6.5  Rental Interruption Insurance. Tenant at its cost shall procure and
maintain rental interruption insurance covering the Annual Rent, Impositions
(including any amount then being amortized pursuant to Section 4.1) and
Amortization Installments for a period of twelve (12) months and insuring the
same risks as the policy carried under Section 6.1 and naming Landlord as an
insured as its interest may appear.

             Article 7. Damage to or Destruction of the Improvement

     7.1  Restoration. In case of any material damage to or destruction of the
Property or any part thereof, Tenant shall give notice thereof to Landlord and
unless this Lease is terminated pursuant to Section 7.4, Tenant shall promptly
and with all diligence at Landlord's expense, commence and complete Restoration,
all in accordance with plans and specifications therefor first approved in
writing by Landlord. Unless Landlord otherwise consents, the replacement
building(s) to be constructed shall have a usable area which is not less than
the usable area of the Improvement, and shall be of a quality not less than the
quality of the Improvement, as the same existed immediately prior to such damage
or destruction.

     7.2  Insurance Proceeds. Except to the extent that the First Mortgagee
requires application of insurance proceeds for purposes other than Restoration,
insurance proceeds received by the First Mortgagee or Landlord in accordance
with Section 6.3 on account of any damage to or destruction of the Property or
any part thereof shall be paid to Tenant or as Tenant may direct, from time to
time as Restoration progresses, to pay or reimburse Tenant for the cost of
Restoration, upon written request of Tenant accompanied by evidence reasonably
satisfactory to Landlord that an amount equal to the amount requested is then
due and payable. If the First Mortgagee requires application of insurance
proceeds for purposes other than Restoration or if there otherwise insufficient
insurance proceeds (except and to the extent such insufficiency is a result of
Tenant's breach of its insurance obligations under Article 6), Landlord shall
from time to time make available additional amounts to Tenant which shall be
applied to Restoration in accordance with the terms and conditions of the
immediately preceding sentence. Once Restoration has been completed and the cost
thereof paid in full, and that there are no mechanic's or similar liens for
labor or materials supplied in connection therewith, the balance, if any, of
such insurance proceeds shall be paid to Landlord, without reduction in Annual
Rent. Upon the expiration or sooner termination of this Lease, any insurance
proceeds not theretofore applied to the cost of Restoration shall be paid to
Landlord.

     7.3  No Abatement or Termination. Except as otherwise provided in this
Lease, no destruction of or damage to the Property, or any part thereof, whether
such damage or destruction be partial or total or otherwise, shall entitle or
permit Tenant to surrender or terminate this Lease or shall relieve Tenant from
its liability to pay in full the Annual Rent and other sums and charges payable
by Tenant hereunder, or from any of its other obligations under

                                       12

<PAGE>

this Lease, and, except as otherwise provided in this Lease, Tenant hereby
waives any rights now or hereafter conferred upon it by statute or otherwise to
surrender this Lease or quit or surrender the Property or any part thereof, or
to receive any suspension, diminution, abatement or reduction of the Annual Rent
or other sums and charges payable by Tenant hereunder on account of any such
destruction or damage. Notwithstanding the foregoing, if any damage or
destruction occurs while a policy of rental interruption insurance meeting the
requirements of Section 6.5 is in effect and such damage or destruction
materially adversely affects Tenant's ability to use the Property for its
intended purpose or shall otherwise make the Property unusable (including, and
regardless of the extent of the damage, if the same may not be used by reason of
any order or directive of any governmental authority), then (a) if Tenant
continues to occupy the Property, the Annual Rent and the obligations for
Impositions and Amortization Installments shall be reduced by a fair and
equitable amount from the date of such damage or destruction until substantial
completion of Restoration and (b) if Tenant does not continue to occupy the
Property, Annual Rent and the obligations for Impositions and Amortization
Installments shall abate in its entirety from the date of such discontinuance
until Tenant again occupies and begins to conduct business at the Property or
fifteen days after substantial completion of Restoration, whichever first
occurs.

     7.4  Termination of Lease. In case of any damage or destruction which
occurs during the last three (3) years of the Term in respect of which the cost
of Restoration is reasonably estimated by Landlord to exceed fifty percent (50%)
of the replacement cost of the entire Improvement, then either Landlord or
Tenant may terminate this Lease upon written notice to the other given within
sixty (60) days after such damage or destruction occurs, which termination shall
be effective on the date such notice is given, provided that Tenant may nullify
Landlord's termination, if given during the Initial Term, by exercise of its
extension option under Section 2.2 within twenty (20) days after Landlord gives
its termination notice or by the expiration of said sixty (60) day period,
whichever is later. In case of any such termination, neither party shall have
any obligation to repair or restore the Property.

     7.5  Mutual Release. Notwithstanding any other provision of this Lease,
each party hereby releases the other (and each party for which such other may be
responsible) of liability for any damage to the Improvement and the Tenant
Equipment, and any inventory and other personal property of Tenant, which is
coverable by the insurance described in Section 6.1 above (or which could be
covered by such insurance if Tenant were to carry such insurance on the Tenant
Equipment, inventory and its other personal property), whether or not such
damage is caused by the negligence or other fault of the party so released or
any party for which it may be responsible.

                             Article 8. Condemnation

     8.1  Total Taking. In the event of a Taking of the whole or substantially
all of the Property, this Lease shall terminate on the date of such Taking, and
the Annual Rent and all other sums and charges required to be paid by Tenant
hereunder shall be apportioned and paid to the date of such Taking. In the event
of any such Taking and notwithstanding the termination of this Lease, Landlord
shall receive the entire award. Tenant shall be entitled to any separate award
made for the Tenant Equipment or for moving expenses or other statutory benefits
provided by the condemning authority.

                                       13

<PAGE>

     8.2  Partial Taking. In the event of a Taking of less than substantially
all of the Property, this Lease shall continue in full force and effect, and
Tenant shall at Landlord's expense with reasonable diligence (subject to
Unavoidable Delays) commence and complete Restoration, except to the extent made
unfeasible by any reduction in area of the Land or Improvement caused by such
Taking. Annual Rent shall be reduced by an amount equal to the greater of (a)
the proportionate area of the Improvement taken or (b) 10.5% of the amount of
the award payable to or for the account of Landlord pursuant to subsection
8.2.2. Tenant shall receive any award made in respect of or allocable to the
Tenant Equipment. All awards made in respect of or allocable to the Property
shall be distributed as follows and in the following order:

          8.2.1  For the purpose of Restoration, in accordance with Section 7.2
as if the same were insurance proceeds; and

          8.2.2  Landlord shall receive the balance of the award.

     8.3  Determination of Total Taking. As used herein, a Taking of
substantially all of the Property shall mean a Taking of such portion as renders
it in Tenant's good faith business judgment uneconomical or unfeasible to
operate the Property for the purpose for which the Property was operated prior
to such Taking.

                             Article 9. Alterations

     9.1  General. Tenant shall have the right from time to time during the Term
to make, at its expense (except for Alterations which constitute Capital Repairs
which shall be paid for as provided in Section 5.4), Alterations in or of the
Improvement, subject in all cases to the further provisions of this Article 9
and to all other applicable provisions of this Lease.

     9.2  Consent Required. Except for those covered by Article 5, Tenant shall
not make any improvements, alterations, additions or installations in or to the
Property (hereinafter referred to as the "Work") without Landlord's prior
written consent, provided that (a) with respect to work affecting the base
building structural, electrical or mechanical systems or the exterior of the
building, Landlord may withhold consent in its sole discretion if the same would
change the general character of the Improvement or would materially adversely
effect the safety or quality thereof on a basis that is not rectified by the
manner in which the changes would be implemented as reflected by the plans and
specifications therefor, (b) except for Work covered by clause (a), no consent
shall be required for any Work if the estimated cost thereof is equal to or less
than $150,000, with such amount increased for Work commenced in 2004 and each
calendar year thereafter by the aggregate percentage increase, if any, from June
2002 through the month of October for the year preceding the calendar year in
question, in the Consumer Price Index for All Urban Consumers, U.S. City
Average, All Items published by the United States Department of Labor, Bureau of
Labor Statistics (base year 1982-1984-100), or if publication of such index is
discontinued, or if the basis of calculating the index is materially changed,
Landlord, with the reasonable approval of Tenant, shall substitute for such
index comparable statistics as computed by an agency of the United States
government or, if none is available, by a substantial and responsible periodical
or publication of recognized authority most closely approximating the result
which would have been achieved by such index and (c) Tenant may from time to
time remove all or any part of the mezzanine level of the Improvement without

                                       14

<PAGE>

Landlord's consent, pursuant to plans and specifications and by a general
contractor approved by Landlord. Along with any request for Landlord's consent
and before commencement of the Work or delivery of any materials to be used in
the Work to the Property or the Improvement for which consent is required,
Tenant shall furnish Landlord with plans and specifications (which may be
preliminary and subject to Landlord's approval of the final plans and
specifications prior to commencement of the Work). Tenant agrees to defend and
hold Landlord forever harmless from any and all claims and liabilities of any
kind and description which may arise out of or be connected in any way with said
improvements, alterations, additions or installations.

     9.3  Performance. Unless performed by Tenant's own forces, all Work for
which Landlord's consent is required shall be done only by a general contractor
reasonably approved by Landlord. Except for Capital Repairs, Tenant shall pay
the cost of all Alterations (including a reasonable charge for Landlord's
services and for Landlord's inspection and engineering time) and the cost of
painting, restoring or repairing the Property and the Property occasioned by the
Work. Upon completion of the Work, Tenant shall furnish Landlord with a general
contractor's affidavit and full and final waivers of liens and receipted bills
covering all labor and materials expended and used. The Work shall comply with
all insurance requirements specified below and all Legal Requirements and shall
be constructed in a good and workmanlike manner. Tenant shall permit Landlord to
inspect construction operations in connection with the Work. Landlord shall not
have any right to require Tenant to remove any improvements, alterations,
additions or installations installed by Tenant in the Property. No change,
alteration, restoration or new construction shall be in or connect the
Improvements with any property, building or other improvement located outside
the boundaries of the parcel of land described in Exhibit A attached, nor shall
the same obstruct or interfere with any existing easement. Tenant shall notify
Landlord in writing prior to commencing any alterations, additions or
improvements to the Property that have been consented to by Landlord so that
Landlord shall have the right to record and post notices of non-responsibility
on the Property. Tenant shall keep the Property and the Property free from any
liens arising out of any work performed, material furnished or obligations
incurred by Tenant, and shall indemnify, protect, defend and hold harmless
Landlord from any liens and encumbrances arising out of any work performed or
material furnished by or at the direction of Tenant. In the event that Tenant
shall not, within thirty (30) days following the imposition of any such lien,
cause such lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by such
means as it shall deem proper, including payment of and/or defense against the
claim giving rise to such lien. All such sums paid by Landlord and all expenses
incurred by it in connection therewith, including attorneys' fees and costs,
shall be payable as Additional Rent to Landlord by Tenant within twenty (20)
days after demand with interest at the Interest Rate accruing from the date paid
or incurred by Landlord until reimbursed to Landlord by Tenant.

     Prior to commencing any Work, Tenant shall obtain and maintain, or cause
its contractors to obtain and maintain, at its sole cost and expense, during the
performance of the Work, workers' compensation insurance covering all persons
employed in connection with the Work and with respect to which death or injury
claims could be asserted against Landlord or Tenant or against the Property or
any interest therein, together with commercial general liability insurance for
the mutual benefit of Landlord and Tenant with limits of not less than One
Million Dollars ($1,000,000.00), combined single limit or equivalent, and fire
insurance with "extended

                                       15

<PAGE>

coverage" endorsement required by Article 6 hereof shall be supplemented with
"builders risk" insurance on a completed value form or other comparable coverage
on the Work. All such insurance shall otherwise conform to the requirements of
Article 6.

     9.4 Permits. Before any Alterations are begun, Tenant shall procure, at its
expense (except for Alterations which constitute Capital Repairs as provided in
Section 5.1), all necessary licenses, permits, approvals and authorizations from
all governmental authorities and shall, on demand, deliver photocopies thereof
to Landlord. Upon Tenant's request, Landlord shall join in the application for
such licenses, permits, approvals and authorizations whenever such action is
necessary. All Alterations shall be made and completed in accordance with all
Legal Requirements.

     9.5 No Request or Consent by Landlord. Nothing contained in this Lease
shall constitute any consent or request by Landlord, express or implied, for the
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof, nor as giving Tenant
any right, power or authority to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Landlord in respect
thereof.

     9.6 Notice of Non-Responsibility. Before any Alterations are begun,
Landlord shall have the right to post and maintain on the Property and to record
in the County Recorder's office in the County in which the Property is located
any notices of non-responsibility provided for under applicable law.

                         Article 10. Discharge of Liens

     Tenant shall not create, and shall promptly bond or discharge, liens or
notices of claims of liens of mechanics and materialmen for work or materials
contracted to be supplied to the Property by Tenant which are not being
contested in accordance with Article 23.

                           Article 11. Use of Property

     Tenant may use and occupy the Property, in compliance with all Legal
Requirements and Insurance Requirements, as and for office, warehouse and
distribution purposes and, with Landlord's consent, any other lawful business
purpose, together with in each case all uses which are incidental or ancillary
to any such permitted primary use and for no other use or purpose whatsoever.

     Tenant shall not suffer any act to be done or any condition to exist on the
Property or any part thereof that may, in law, constitute a nuisance, public or
private. Tenant shall not commit any waste or damage, disfigurement or injury to
the Property or any Improvements hereafter erected thereon, or permit or suffer
any overloading of the floors or other use that would place an undue stress on
the same or any portion thereof beyond that for which the same was designed

                                       16

<PAGE>

                    Article 12. Entry on Property by Landlord

     Tenant shall, following reasonable notice, permit Landlord and the First
Mortgagee and their respective authorized representatives and designees to enter
the Property at reasonable times for the purpose of (a) inspecting the same, (b)
making any repairs thereto and performing any work therein that may be necessary
by reason of Tenant's failure to make any such repairs or perform any such work
or to commence the same within thirty (30) days after notice from Landlord (or
without notice in case of emergency), and (c) showing the same to prospective
purchasers, mortgagees and, during the last six (6) months of the Term only. Any
such entry shall not interfere with operations at the Property and shall be
consistent with such reasonable rules as Tenant may prescribe for security,
safety and confidentiality purposes. Nothing herein contained shall be construed
as imposing any duty upon Landlord and shall not constitute a waiver of Tenant's
default in failing to perform any obligation under this Lease.

                        Article 13. Intentionally Omitted

                           Article 14. Indemnification

     14.1 Indemnification. Tenant shall defend, indemnify and save Landlord
harmless from and against all liabilities, obligations, damages, fines,
penalties, claims, demands, costs, charges, judgments, including, but not
limited to, reasonable attorneys' fees, which may be asserted against Landlord
to the extent arising as a result of any of the following during the Term:

          14.1.1 Any Alterations;

          14.1.2 The use, non-use, possession, operation or maintenance of the
Property;

          14.1.3 Any negligent or tortious act on the part of or any of its
agents, contractors, employees, licensees or invitees; and

          14.1.4 Any accident, injury, death or damage to any person or property
occurring in or on the Property during the Term. Nothing contained in this
Section 14.1 shall be deemed to require Tenant to indemnify Landlord with
respect to any negligent or tortious act or omission of Landlord or any of its
agents, contractors, employees, licensees or invitees or to any extent
prohibited by law.

     14.2 Survival. The provisions of this Article 14 shall survive the
expiration or sooner termination of this Lease.

                              Article 15. Transfers

     15.1 By Landlord. Landlord may, subject to this Lease, sell the Property
in, and only in, its entirety.

     15.2 By Tenant.

                                       17

<PAGE>

     (a)  Tenant shall not, without the prior written consent of Landlord, which
shall not be unreasonably withheld, (i) transfer, pledge, mortgage or assign
this Lease or any interest hereunder; or (ii) permit any assignment of this
Lease by voluntary act, operation of law or otherwise. Tenant shall seek such
written consent of Landlord by a written request therefore, setting forth such
information as Landlord may reasonably deem necessary, which information
Landlord agrees to hold confidential and to use solely for the purpose of
determining whether or not to grant or withhold consent. Landlord will, upon
request, enter into such confidentiality agreement with the proposed assignee as
such assignee shall reasonably request in connection with such information.
Tenant shall, by notice in writing, advise Landlord of Tenant's intention, from,
on and after a stated date (which shall not be less than ten (10) days after the
date of Tenant's notice), to assign this Lease. Tenant's notice shall include
the terms of the proposed assignment and shall state the name and address of the
proposed assignee. If then available, a true and complete copy of the proposed
assignment shall be delivered to Landlord with Tenant's notice.

     (b)  Tenant may sublet the Property or any part thereof without Landlord's
consent, but Tenant shall pay to Landlord, if, as and when actually received,
fifty percent (50%) of all net profit derived by Tenant from any subletting to a
party (other than an Exempt Transferee as defined in (g) below) as determined
and payable from time to time. For purposes of the foregoing, net profit shall
mean the amount of all net fixed rent payable by such subtenant in excess of the
Annual Rent payable by Tenant under this Lease after first deducting therefrom
all costs incurred by Tenant in regard to the sublease, including legal fees,
commissions, brokerage commissions, marketing expenses, professional or
consultant fees, the cost of holding the subleased space during the time it was
marketed for sublease by Tenant, the aggregate unamortized amount of
improvements made to the Property and reasonably allocable to the portion of the
Improvement that will be subleased, whether before or during the Term by any
Exempt Transferee, concessions, inducements and allowances, provided that if the
sublease rents are fully or partially "gross" then an adjustment shall be made
by Tenant, acting reasonably, to reflect as fairly as reasonably possible a
comparison of the net, fixed Annual Rent to the equivalent rent under the
sublease.

     (c)  Tenant shall and hereby agrees that it will furnish to Landlord upon
request from Landlord, a complete statement, setting forth in reasonable detail
the computation of all net profit derived from such subletting, such computation
to be made in accordance with generally accepted accounting principles. Tenant
agrees that Landlord and its authorized representatives shall be given access at
all reasonable times to the books, records and papers of Tenant relating to any
such subletting, and Landlord shall have the right to make copies thereof. The
percentage of Tenant's net profit due Landlord hereunder shall be paid by Tenant
to Landlord within twenty (20) days of receipt by Tenant of payments made from
time to time by such subtenant to Tenant.

     (d)  Any subletting or assignment hereunder shall not release or discharge
Tenant of or from any liability, whether past, present or future, under this
Lease, and Tenant shall continue fully liable thereunder. The subtenant or
assignee shall agree in a form satisfactory to Landlord to agree to be obligated
for, comply with, and be bound by all of the terms, covenants, conditions,
provisions and agreements of this Lease to the extent of the space sublet or
assigned, and Tenant shall deliver to Landlord promptly after execution an
executed copy of each such sublease or assignment and an agreement of compliance
by each such subtenant or assignee.

                                       18

<PAGE>

Consent by Landlord to any assignment of this Lease shall not be a waiver of
Landlord's rights under this Article as to any subsequent assignment.

     (e)  Any sale, assignment, mortgage, transfer or subletting of this Lease
which is not in compliance with the provisions of this Article 15 shall be of no
effect and void. Landlord's right to assign its interest in this Lease shall
remain unqualified. Landlord may make a reasonable charge to Tenant for any
reasonable attorneys' fees or expenses incident to a review of any documentation
related to any proposed assignment or subletting by.

     (f)  The consent of Landlord to an assignment may be withheld if the
financial strength of the proposed assignee is not adequate to reasonably assure
payment of the rent under the Lease, and no guarantee from a creditworthy party
is offered to supplement the assignee's financial strength on a basis reasonably
approved by Landlord.

     (g)  Notwithstanding anything contained herein to the contrary, Tenant may,
without the consent of Landlord, at any time assign or otherwise transfer this
Lease or any portion thereof to any parent, subsidiary or affiliate corporation
or entity of Tenant; any corporation resulting from the consolidation or merger
of Tenant into or with any other entity; or any person, firm, entity or
corporation acquiring all or substantially all of Tenant's assets or of the
assets of any division operated at the Property by Tenant or any parent,
subsidiary or affiliate corporation or entity (each, an "Exempt Transferee"). As
used herein, "affiliate corporation or entity" means a person or business
entity, corporate or otherwise, that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
Tenant. The word "control" means the right and power, direct or indirect, to
direct or cause the direction of the management and policies of a business
entity, corporation or otherwise.

                        Article 16. Estoppel Certificates

     Each party hereto agrees from time to time, upon not less than twenty (20)
days prior notice from the other, to execute, acknowledge and deliver, without
charge, to the other or its designee, a statement in writing, certifying that
this Lease is unmodified and in full force and effect (or if there have been
modifications, identifying the same by the date thereof and specifying the
nature thereof), the dates to which the Annual Rent and other sums and charges
payable hereunder have been paid, the amount of the Annual Rent, that to its
best knowledge there are no claims against the other hereunder (or if there are
any such claims, specifying the same) and that to its best knowledge the other
party is not in default and there exists no circumstance which with the giving
of notice or lapse of time, or both, would constitute a default (or if such
party is aware of any such default or circumstance specifying the same).

                               Article 17. Default

     17.1 Events of Default; Termination. If any one or more of the following
events ("Events of Default") shall happen, then and in any such event, Landlord
may give notice to Tenant specifying such Event or Events of Default and stating
that this Lease and the Term shall expire and terminate on the date specified in
such notice, and on such date, unless such specified Event or Events of Default
shall have been cured, this Lease shall terminate and Tenant shall remain liable
as hereinafter provided:

                                       19

<PAGE>

          17.1.1 Any Annual Rent payable under this Lease shall not be paid
within ten (10) days after written demand therefor;

          17.1.2 Tenant shall fail duly to pay any other monetary obligation
when due or observe or perform any of the other terms, conditions, covenants or
agreements required to be observed or performed by it under this Lease and such
failure shall continue for a period of thirty (30) calendar days following
written notice of such failure, or, in the case of a default which cannot with
due diligence be cured within such period of thirty (30) days, the Tenant fails
to proceed with due diligence within such period of thirty (30) days to commence
to cure the same and thereafter to prosecute the curing of such default with due
diligence;

          17.1.3 Tenant shall make an assignment for the benefit of creditors
generally; or

          17.1.4 Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law is instituted by or against
the Tenant, and if instituted against the Tenant, is consented to or acquiesced
in by the Tenant or is not dismissed within ninety (90) days.

     17.2 Repossession. Upon or at any time after an Event of Default and
whether or not this Lease shall have been terminated pursuant to Section 17.1,
Landlord may enter upon and repossess the Property (said repossession being
hereinafter referred to as "Repossession") by summary proceedings or ejectment,
and may remove Tenant and all other persons therefrom.

     17.3 Reletting. From time to time after the Repossession of the Property,
Landlord may relet the Property for the account of Tenant in the name of
Landlord or otherwise, for such term or terms (which may be greater or less than
the period which would otherwise have constituted the balance of the Term) and
on such terms (which may include concessions or free rent) and for such uses as
Landlord may in its reasonable business judgment determine, and may collect and
receive the rent therefor. Landlord shall not be responsible or liable for any
failure to collect any rent due upon any such reletting.

     17.4 Survival of Obligations; Current Damages. No termination of this Lease
pursuant to Section 17.1 and no Repossession of the Property pursuant to Section
17.2 or otherwise shall relieve Tenant of its obligation to pay Annual Rent or
any of its other obligations under this Lease, all of which shall survive any
such termination or Repossession. In the event of any such termination or
Repossession, whether or not the property shall have been relet, Tenant shall
pay to Landlord the Annual Rent and other sums and charges to be paid by Tenant
up to the time of such termination or Repossession, and thereafter, until the
end of what would have been the Term in the absence of such termination or
Repossession, shall pay to Landlord, as and for liquidated and agreed current
damages for Tenant's default, the equivalent of the amount of the Annual Rent
and such other sums and charges which would be payable under this Lease by if
this Lease were still in effect, less the net proceeds, if any, of any reletting
effected pursuant to the provisions of Section 17.3, after deducting all of
Landlord's expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage and management commissions,
operating expenses legal expenses, attorneys' fees alteration costs, and
expenses of preparation for such reletting. Tenant shall pay such current
damages to Landlord monthly on the days on which the Annual Rent would have been
payable under this Lease if this Lease were

                                       20

<PAGE>

still in effect, and Landlord shall be entitled to recover the same from Tenant
on each such day. At any time after such termination or Repossession, whether or
not Landlord shall have collected any current damages as aforesaid, Landlord
shall be entitled to recover from Tenant, and Tenant shall pay to Landlord on
demand, as and for liquidated and agreed final damages for Tenant's default, an
amount equal to the then net present value of the excess of the Annual Rent
reserved under this Lease from the day of such termination or Repossession for
what would be the then unexpired Term if the same had remained in effect, over
the then net present value of the fair market rent for the Property for the same
period, said net present worth to be arrived at on the basis of reasonable
estimates of Landlord as to Annual Rent and fair market rent, discounted at a
rate equal to 2% plus the discount rate of the Federal Reserve Bank for the
district in which the Property is located.

     17.5 No Waiver. No failure by Landlord to insist upon the strict
performance of any term hereof or to exercise any right or remedy consequent
upon a breach thereof, and no acceptance of full or partial rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term.

     17.6 Attorney Fees; Survival. In any action or proceeding between Landlord
and Tenant to enforce or interpret this Lease, the prevailing party shall be
entitled to recover all legal costs and attorney fees incurred in connection
therewith. The provisions of this Article 17 shall survive the expiration or
sooner termination of this Lease.

                      Article 18. Surrender of the Property

     18.1 Surrender. Upon the expiration or sooner termination of this Lease,
Tenant shall quit and surrender the Property, in the condition required to be
maintained in accordance with this Lease, to Landlord without any payment
therefor by Landlord without delay, free and clear of all lettings and
occupancies (except those, if any, to the continuance of which after such
termination Landlord shall in writing then consent or shall in writing
theretofore have consented). Upon such expiration or termination of this Lease,
any personal property or trade fixtures owned by Tenant which shall remain on
the Property after the expiration or termination of this Lease may, at the
option of Landlord, be deemed to have been abandoned, and may either be retained
by Landlord as its property or be disposed at Tenant's expense or without
accountability, as Landlord may see fit, provided that if Landlord shall store
or warehouse any such property for any period of time it shall first provide
notice to Tenant thereof and of the items in question, and, Tenant shall
reimburse Landlord for all expenses reasonably incurred in connection therewith,
which obligation shall survive any such expiration or termination of this Lease.

     18.2 Removal of Tenant Equipment. In connection with the surrender of the
Property pursuant to Section 18.1, Tenant shall be entitled to remove the Tenant
Equipment and shall repair any damage to the Improvement caused by such removal,
provided that Tenant shall not be required to repair any damage to finish work
or minor holes in walls or partitions or to remove any cables or lines from
conduits.

     18.3 Survival. The provisions of this Article 18 shall survive the
expiration or sooner termination of this Lease.

                                       21

<PAGE>

                         Article 19. No Merger of Title

     There shall be no merger of Tenant's interest in this Lease nor of the
leasehold estate created by this Lease with the fee estate in the Property or
any part thereof by reason of the fact that the same person may acquire or own
or hold, directly or indirectly, (a) Tenant's interest in this Lease or the
leasehold estate created by this Lease or any interest therein and (b) the fee
estate in the Property or any part thereof or any interest therein, and no such
merger shall occur unless and until all persons, including the First Mortgagee,
if any, then having an interest in, which interest shall have been voluntarily
created by the holders of, the ownership interests described in (a) and (b)
above, shall join in a written instrument effecting such merger and shall duly
record the same.

                           Article 20. Quiet Enjoyment

     Landlord covenants that Tenant shall quietly have, hold and enjoy the
Property during the Term without hindrance or molestation, subject only to
Article 17.

                       Article 21. Performance for Tenant

     21.1 Performance. If Tenant shall at any time fail to make any payment or
perform any act on its part to be made or performed hereunder, then Landlord,
after ten (10) days notice to Tenant, except when other notice is expressly
provided for in this Lease (or without notice in case of an emergency), and
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may (but shall be under no obligation to) make such payment or
perform such act, and may enter upon the Property for any such purpose, and take
all such action thereon as may be necessary therefor.

     21.2 Payment. All sums so paid by Landlord and all costs and expenses
incurred by Landlord in connection with the performance of any such act,
together with interest thereon at the Interest Rate, from the respective dates
of Landlord's making of each such payment or incurring of each such cost and
expense, and reasonable attorney fees incurred by Landlord in connection
therewith or in enforcing its rights hereunder, shall be paid by Tenant to
Landlord on demand as additional rent hereunder.

     21.3 Survival. The provisions of this Article 21 shall survive the
expiration or sooner termination of this Lease.

                              Article 22. Notices

     All notices, requests, demands, consents, approvals, and other
communications which may or are required to be served or given hereunder (for
the purposes of this Article collectively called "Notices") shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed to the party to receive
such Notice at the following addresses:

                                       22

<PAGE>

        If to Landlord:            IRET Properties
                                   P.O. Box 1988
                                   Minot, ND 58702-1988
                                   Attention:  General Counsel

        If to Tenant:              c/o Wilsons The Leather Experts, Inc.
                                   7401 Boone Avenue North
                                   Brooklyn Park, MN 55428
                                   Attention:  Director, Legal Services

        With a copy to:            Rosedale Wilsons
                                   c/o Wilsons The Leather Experts, Inc.
                                   7401 Boone Avenue North
                                   Brooklyn Park, MN 55428
                                   Attention:  Director, Legal Services

Either party may, by Notice given as aforesaid, change its address for all
subsequent Notices, except that neither party may require Notices to it to be
sent to more than two addresses. Mailed Notices shall be deemed given when
mailed in the manner aforesaid, provided that in the case of a notice of default
to Tenant the same shall be deemed given only upon actual receipt by Tenant.

                              Article 23. Contests

     23.1 Contest; Conditions. After written notice to Landlord, Tenant may at
its expense contest, by appropriate proceedings conducted in good faith and with
due diligence (all such proceedings together with appeals therefrom being
hereinafter referred to as "Contests") the amount, validity or application, in
whole or in part, of any lien, encumbrance, charge or any other adverse claim
(hereinafter collectively "claims") provided that:

          23.1.1 In the case of an unpaid claim, such Contest shall operate to
suspend the collection of the same from Landlord and Tenant therein;

          23.1.2 Tenant shall have furnished such security, if any, as may be
required in the proceedings;

          23.1.3 Neither Landlord nor Tenant shall be subject to any civil or
criminal penalty by reason of such Contest regardless of whether or not such
Contest is successful; and

          23.1.4 Neither the Property nor any part thereof nor any interest
therein shall be, in the reasonable opinion of Landlord, in imminent danger of
being forfeited or lost.

During the period Tenant carries forward any such Contest in good faith, Tenant
shall be relieved from its obligations herein contained to pay the claims, or to
clear the liens with respect to which such contest is conducted. If and to the
extent Tenant shall not prevail in any such Contest, Tenant shall immediately
pay and discharge the claim in question to such extent.

                                       23

<PAGE>

     23.2 All Such Contests. All such Contests may be brought by Tenant in the
name of Tenant or, if necessary, in the name of Landlord or Tenant and Landlord,
as may be appropriate, but in any event at Tenant's sole cost and expense. Each
party agrees to cooperate with the other in such Contests, short of the payment
of money with respect thereto, except where this Lease otherwise requires
payment by Tenant. Each party will endorse such pleadings, checks and other
documents as will be appropriate to carry out the purposes of this Article 23.
This Article does not apply to Impositions, the contest of which shall be
governed by Section 4.2.

        Article 24. Tenant's Right to Cure Defaults Under First Mortgage

     If Landlord shall default in the payment of any monies required to be paid
under the First Mortgage or shall fail to perform any other term or provision
thereof (provided that the performance of the same is not the obligation of
Tenant under this Lease), then, upon twenty (20) days prior written notice to
Landlord (except in the case of emergency, when no notice shall be required),
Tenant may, but shall not be obligated to, make such payment directly to the
First Mortgagee or perform such term or provision and in any such event Tenant
shall be entitled to credit the amount of such payment and the cost of such
performance against Annual Rent hereunder, and the installments thereof, next
coming due hereunder.

                  Article 25. Subordination and Non-Disturbance

     Tenant agrees that, upon the request of Landlord made in writing, Tenant
will subordinate this Lease to the First Mortgage and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
however, that the First Mortgagee shall enter into a binding agreement (the
"Non-Disturbance Agreement") with Tenant providing that Tenant shall not be
disturbed in its possession of the Property or its rights hereunder terminated
or impaired by the First Mortgagee, purchaser at foreclosure or other such party
and that this Lease shall continue in full force and effect following any
foreclosure thereof or any deed given in lieu thereof, except that this Lease
may nonetheless be terminated pursuant to the provisions of this Lease providing
for such termination, including without limitation pursuant to Article 17. In
the event the First Mortgagee or other purchaser at foreclosure sale succeeds to
the interest of Landlord under this Lease, Tenant will automatically become the
Tenant of and shall be deemed to have attorned to such successor in interest as
Landlord under this Lease without change in the terms or provisions of this
Lease, provided, however, that such successor in interest shall not be bound by
any amendment or modification of this Lease made after Tenant enters into the
Non-Disturbance Agreement without the written consent of such First Mortgagee or
such successor in interest. Upon written request by such successor in interest,
Tenant and such successor shall execute and deliver an instrument or instruments
whereby Tenant confirms the attornment herein provided for and in which such
successor shall acknowledge its obligations and responsibilities to Tenant under
the Lease and, with respect thereto, shall recognize this Lease and the tenancy
hereunder of Tenant.

                            Article 26. Miscellaneous

     26.1 Consent. Except where specifically otherwise provided, in any case
under this Lease which requires consent or approval such consent or approval
shall not be unreasonably withheld, conditioned or delayed.

                                       24

<PAGE>

     26.2 Short Form Lease. If requested by Tenant, Landlord and Tenant shall
enter into a short form or memorandum of lease in form and substance reasonably
acceptable to Landlord and Tenant for the purpose of reflecting on the record
title to the Land, Tenant's leasehold estate and other rights under this Lease.

     26.3 Miscellaneous. If any term of this Lease or any application thereof
shall be invalid or unenforceable, the remainder of this Lease and any other
application of such term shall not be affected thereby. This Lease may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the then owners of the Landlord and Tenant interests herein. This
Lease shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto. The headings of
this Lease are for purposes of reference only and shall not limit or define the
meaning hereof. This Lease may be executed in any number of counterparts, each
of which is an original, but all of which shall constitute one instrument.

     26.4 Arbitration of Disputes. In each case where arbitration is
specifically provided for under Article 5, the same shall be conducted pursuant
to this Section 26.4 and shall be binding on the parties hereto and their
successors and assigns.

     Arbitration will be conducted pursuant to the provisions of this Lease, and
the Commercial Arbitration Rules of the American Arbitration Association, unless
such Rules are inconsistent with the provisions of this Lease. Limited civil
discovery shall be permitted for the production of documents and taking of
depositions. Unresolved discovery disputes may be brought to the attention of
the arbitration panel and may be disposed of by the panel.

     The arbitrators shall have the authority to award any remedy or relief that
a court of this state could order or grant, including, without limitation,
equitable remedies, rescission, specific performance of any obligation created
under this Lease, the issuance of an injunction, or the imposition of sanctions
for abuse or frustration of the arbitration process; provided, however, that
punitive or exemplary damages shall not be awarded by the arbitrators or by any
court. The arbitrators shall award to the prevailing party, if any, as
determined by the arbitrators, all of its costs and fees, including the
arbitrators' fees, administrative fees, travel expenses, out-of-pocket expenses
such as copying and telephone, court costs, witness fees and reasonable
attorneys' fees.

                                       25

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this instrument
under seal as of the day and year first above written.

IRET Properties, a North Dakota Limited Partnership
By: IRET, Inc.
Its: General Partner



/s/ Thomas A. Wentz Sr.
----------------------------------
By: Thomas A. Wentz Sr.
Its: President


STATE OF NORTH DAKOTA)
                     )ss.
COUNTY OF WARD       )

          The foregoing instrument was acknowledged before me this 21st day of
June, 2002, by Thomas A. Wentz Sr., the President of IRET, Inc., a North Dakota
corporation, the general partner of IRET Properties, a North Dakota limited
partnership, on behalf of the partnership.

/s/ Michelle R. Saari
-----------------------------------------------
Notary Public

                                       26

<PAGE>

BERMANS THE LEATHER EXPERTS, INC.



By:  /s/ Peter G. Michielutti
    ------------------------------------------------
Its  Senior Vice President and Chief Financial Officer
    --------------------------------------------------




And By: /s/ Corrine G. Lapinsky
        --------------------------------------------
Its  Secretary
    ---------------------------------------


STATE OF MINNESOTA  )
                    )ss.
COUNTY OF HENNEPIN  )

            The foregoing instrument was acknowledged before me this 21st day of
June, 2002, by Peter G. Michielutti, the Chief Financial Officer and by Corrine
G. Lapinsky, the Corporate Secretary of Bermans The Leather Experts, Inc., a
Delaware corporation, on behalf of the corporation.

                                       /s/ Casey Fox
                                       -----------------------------------------
                                       Notary Public

THIS INSTRUMENT WAS DRAFTED BY:

Faegre & Benson LLP (TMM)
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Phone: (612) 766-7000

                                       27

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

The East 1000 feet of the Southeast Quarter of the Northwest Quarter of Section
30, Township 119, Range 21 except the South 560 feet thereof and except that
part thereof lying North of a line drawn parallel with and distant 1350.20 feet
South of the North line of the Northwest Quarter of said Section 30.

Together with an easement for road purposes over the East 30 feet of the North
130 feet of the South 395 feet of the West 330 feet of Government Lot 2 of
Section 30, Township 119, Range 21, as shown in deed Document No. 435117.

All situate in Hennepin County, Minnesota

Torrens Property

Torrens Certificate No. 696908

                                      A-1

<PAGE>

                                    EXHIBIT B

                                TENANT EQUIPMENT

Distribution Center sortation, packing and shipping systems and related
equipment

Distribution Center racking

Distribution Center forklifts, truck lifts and other such equipment

Distribution Center pallets, movable shelving and other storage fixtures not
affixed to the building

Office furniture and decor, in both the Home Office and Distribution Center

Cubicle work stations in Home Office and Distribution Center

All computer equipment, including but not limited to servers, PCs, monitors and
related equipment

Computer room HVAC equipment

All telephones and related equipment, including routers and boxes

All copiers, fax machines, CAD systems, blueprint machines and other office
equipment

All filing cabinets and movable storage shelving

All machinery and equipment in the lunchroom area, either owned or leased by
Tenant

All machines and equipment in the fitness room

Garment hanger grids and garment fixtures in sample rooms and throughout
building

All picnic tables, flower pots, grills and other outdoor decor items

Two (2) large stone camels

Portable smoking hut

                                      B-1