Document:

<PAGE>
                                                                    EXHIBIT 10.3

PWC CONSULTING
--------------------------------------------------------------------------------

A business of PRICEWATERHOUSECOOPERS [LOGO]

                      [PRICEWATERHOUSECOOPERS LETTERHEAD]

July 15, 2002

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors & Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Mr. Cichocki:

We are very pleased that Home Interiors & Gifts, Inc. ("Client" or "HIG") has
agreed to engage PricewaterhouseCoopers LLP ("PwC") to provide consulting
services for the implementation of HIG's ERP system, using as a foundation the
J. D. Edwards Financial, Distribution and Demand Planning software. This
engagement letter, once signed by both parties, will constitute the agreement
("Agreement") between Client and PwC for this project.

Background

Client previously entered into an agreement with Arthur Andersen LLP
("Andersen") for services related to the project. Andersen has informed Client
of its inability to continue the project and has received from Client a notice
of termination. Client confirms that a copy of the agreement between Andersen
and Client, together with any change orders and amendments, is attached hereto
as Exhibit 1 (the "Andersen/Client Agreement").

The project originally involved assisting HIG in the development, testing and
roll-out of the ERP system, using as a foundation, the J.D. Edwards (JDE) system
solution (Build - Phase III or "Phase III"). The Andersen/Client Agreement
established the scope of services, deliverables, compensation, terms and
conditions, and other business terms for Andersen's participation in the
project.

HIG and PwC have agreed that PwC will provide consulting services for Phase III,
as described in this Agreement. In recognition of HIG's need for a quick
transition of services to PwC, the parties have agreed to use the
Andersen/Client Agreement as the template for their Agreement. The parties
understand and agree that such use of the Andersen/Client Agreement will not
result in PwC's being treated as the successor, assignee or transferee of
Andersen or the Andersen/Client Agreement.

Scope of PwC Services

Client is engaging PwC to perform services and provide deliverables not
previously completed under the Andersen/Client Agreement, as indicated in the
below charts and otherwise described in this Agreement (collectively, the "PwC
Services").

PwC Consulting(TM) refers to the management consulting services businesses of
the member firms of the worldwide PricewaterhouseCoopers organisation.

<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

The functional and technical processes and modules within the scope of this
project are consistent with the scope identified in the Andersen/Client
Agreement, including all stated processes and modules.

The joint PwC/Client team will produce the deliverables as shown below. PwC's
Services do not include deliverables or activities within the stages that are
shown as complete in the following charts, which deliverables and activities are
deemed part of the Prior Work. However, as described elsewhere in this
Agreement, PwC has agreed to perform certain corrective services, if needed, as
part of its scope of work.

Report Development:

Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Reports - PwC will work with Client to produce those
deliverables listed below. (Associated tasks under the Andersen/Client Agreement
not listed but required to complete the deliverables below will be considered
part of the scope.):

<Table>
<Caption>
                                                                      % Complete by Stage
---------------------------------------------------------------------------------------------------------------------
                                                                                                Integrated
Object Number  Description                          Specs     Develop   Unit Test  String Test     Test     Implement
-------------  -----------                          -----     -------   ---------  -----------  ----------  ---------
<S>            <C>                                  <C>       <C>       <C>        <C>          <C>         <C>
      12       Weekly & YTD Sales by Country of
               Origin                                100        100        100       100           0         0

      39       Category Performance Report (YTD)     100        100        100       100           0         0

      41       Category Sales Trends                 100        100        100       100           0         0

      43       Key Item Hot                          100        100        100       100           0         0

      44       Key Item Not                          100        100        100       100           0         0

      69       Executive WMS Analysis Wholesale
               Merchandise Shipped                   100        100        100       100           0         0

      75       Executive Sales Analysis              100        100        100       100           0         0

      286      Purchase Order Report                 100        100        100       100           0         0

      287      Merchandise Status                    100        100        100       100           0         0

       3       Weekly Sales by Category Summary      100        100        100        0            0         0

      11       Order Information IOE                 100        100        100        0            0         0

      16       Shipments % by Whls Value Range       100        100        100        0            0         0

      30       Brochure Sales Statistics             100        100        100        0            0         0

      32       Product Price Point Analysis          100        100        100        0            0         0

      45       Discontinued Tracker                  100        100        100        0            0         0

      46       Category Discontinued Report          100        100        100        0            0         0

      58       Displayer Scorecard                   100        100        100        0            0         0

      71       Executive Displayer Analysis          100        100        100        0            0         0

      73       Executive Sales Analysis              100        100        100        0            0         0

      120      Actuals for Forecast Model            100        100        100        0            0         0
</Table>

                                       2

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PWC CONSULTING

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<Table>
<S>            <C>                                  <C>       <C>       <C>       <C>         <C>         <C>
      123      Listing of Displayers by Branch,
               Unit & District                       100        100        100        0            0         0

      124      Consolidated BVA - BS, P&L & Cash
               Flow                                  100        100        100        0            0         0

      136      Count of Active Displayers by
               Unit Code                             100        100        100        0            0         0

      145      AP Cash Requirements summarized
               by Vendor Class                       100        100        100        0            0         0

      148      Aging Analysis for A/P Trade          100        100        100        0            0         0

      150      Check Register                        100        100        100        0            0         0

      156      Check Register (Including Voids)
               sorted by Vendor Class                100        100        100        0            0         0

      162      AR Collections by Age of Invoice
               Paid                                  100        100        100        0            0         0

      163      Newton Extract                        100        100        100        0            0         0

      168      Weekly AR aging Analysis              100        100        100        0            0         0

      195      G/L Summary Trial Balance             100        100        100        0            0         0

      213      Consolidating Statement of
               Operations                            100        100        100        0            0         0

      214      Consolidating Balance Sheet
               Statement                             100        100        100        0            0         0

      225      Released to Sales Report              100        100        100        0            0         0

      229      Open Batch Report                     100        100        100        0            0         0

      231      Hold Orders Report                    100        100        100        0            0         0

      238      Daily Bank Deposit Reports            100        100        100        0            0         0

      254      Taxes Ordered by State and
               Subtotalled by State                  100        100        100        0            0         0

      276      Item Back Order Report                100        100        100        0            0         0

      277      Sales by Item Family                  100        100        100        0            0         0

      278      Daily Order Report                    100        100        100        0            0         0

      279      Top 20 Items Report                   100        100        100        0            0         0

      283      Invoice Corrections Control           100        100        100        0            0         0

      284      Custom Invoice                        100        100        100        0            0         0

      289      30%/50%.70% Discounted Items by
               Status/Category                       100        100        100        0            0         0

      291      Inventory Usage                       100        100        100        0            0         0

      294      Fulfilment                            100        100        100        0            0         0

      313      All carriers $10 report               100        100        100        0            0         0

      320      YTD Defective Summary (By Vendor)     100        100        100        0            0         0

      340      Top 3 Branch Leaders Extract          100        100        100        0            0         0

      392      Credit Report for Affidavits          100        100        100        0            0         0

      400      Weekly Category Performance -
               Foreign Currency                      100        100        100        0            0         0

      401      Displayer Productivity - Foreign
               Currency                              100        100        100        0            0         0
</Table>

                                       3
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<S>            <C>                                  <C>       <C>       <C>       <C>         <C>         <C>
      129      Mexico Sales & COGS by Product
               Source (Vendor)                       50          0          0         0            0         0

      139      General Ledger Transaction Detail     50          0          0         0            0         0

      142      Paid Invoice History by Vendor        50          0          0         0            0         0

      146      Cash Disbursements                    50          0          0         0            0         0

      149      Aging analysis for Unvouchered
               Receipts                              50          0          0         0            0         0

      153      Forecast of Cash Disbursements
               from Open Inventory Pos               50          0          0         0            0         0

      154      Forecast of Cash Disbursements
               from AP Unvouchered B94               50          0          0         0            0         0

      157      Credit Card Deposit Detail by day     50          0          0         0            0         0

      193      Itm_ext_nels - Inventory Report
               by Item and Category Code             50          0          0         0            0         0

      201      Report of Cleared Checks from
               Bank Reconciliation                   50          0          0         0            0         0

      230      Booklet Order Error report            50          0          0         0            0         0

      233      Cancelled Orders Report               50          0          0         0            0         0

      250      Inquire A/R Activities by Account
               No.                                   50          0          0         0            0         0

      257      ASR Labels                            50          0          0         0            0         0

      259      Branch Distribution Mailing Labels    50          0          0         0            0         0

      265      Colorbar - Customer Base List for
               File Label Export - Full              50          0          0         0            0         0

      267      Displayer Promotion Addresses         50          0          0         0            0         0

      275      Morning Quick Daily Sales Report
               US and Canada                         50          0          0         0            0         0

      293      YTD PO's by Vendor & Category         50          0          0         0            0         0

      295      Vendor Inventory Status               50          0          0         0            0         0

      297      PO Maintenance (PAVA)                 50          0          0         0            0         0

      301      PO Tracking (PAVA)(Needs major
               improvement)                          50          0          0         0            0         0

      302      In transit (PAVA)/Shipping Status
               (PAVA)                                50          0          0         0            0         0

      305      Sales By Vendor                       50          0          0         0            0         0

      316      Directs and Distributors for
               Transportation Dept.                  50          0          0         0            0         0

      321      YTD Defective (by Item by Vendor)     50          0          0         0            0         0

      322      YTD Damage Defective Analysis         50          0          0         0            0         0

      323      Monthly Defective Summary (by
               Vendor)                               50          0          0         0            0         0

      324      Monthly Defective Items by Vendor     50          0          0         0            0         0

      327      Category Performance Report by
               Item Report                           50          0          0         0            0         0

      335      Promotion Data Query (LITA). DIS      50          0          0         0            0         0
</Table>

                                       4
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<S>            <C>                                  <C>       <C>       <C>       <C>         <C>         <C>
      384      A/R Statements                        50          0          0         0       0         0

      389      Vendor Quantity Report                50          0          0         0       0         0

      390      Weekly Orders by Zone 2               50          0          0         0       0         0

      391      Group WMS                             50          0          0         0       0         0

      27       Daily Sales Forecast                        Moved Outside of Scope of JDE Report Team

      60       Director Key Driver                         Moved Outside of Scope of JDE Report Team

      98       Historical Comparison - Branch              Moved Outside of Scope of JDE Report Team

      99       WMS and Displayer for Branch #              Moved Outside of Scope of JDE Report Team

      100      Historical Comparison (Director
               Bonus) - Branch                             Moved Outside of Scope of JDE Report Team

      200      ABRA Payroll G/L Distribution               Moved Outside of Scope of JDE Report Team

      221      CRM - Support Services  And Web
               Support Department Report                   Moved Outside of Scope of JDE Report Team

      222      CRM - Support Services And Web
               Support Group Leaders                       Moved Outside of Scope of JDE Report Team

      40       Category Performance Report                                 Cancelled

      70       Executive WMS Analysis                                      Cancelled

      72       Executive Displayer Analysis                                Cancelled

      74       Executive Sales Analysis                                    Cancelled

      115      Sales, COGS & Gross Profit by
               State of Destination                                        Cancelled

      116      Weekly Sales by Categories Summary                          Cancelled

      133      Wholesale vs. Hostess Qty shipped                           Cancelled

      134      Canada Sales, COGS & Gross Profit
               by item and category                                        Cancelled

      135      Weekly & YTD sales by Country by
               Origin                                                      Cancelled

      191      General Ledger detail                                       Cancelled

      223      Weekly New Account Volume Report                            Cancelled

      224      New Account Approvals                                       Cancelled

      292      Inventory Usage - Christmas Items
               Report                                                      Cancelled

      314      Some carriers $10 report                                    Cancelled

      315      Monthly All Carriers $10 report                             Cancelled

      334      Nuggets Earned (NFH)                                        Cancelled

</Table>

Enhancements, Interfaces and Automated Conversions Development:

Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Enhancements, Interfaces and Automated Conversions - PwC
will work with Client to produce those deliverables listed below. (Associated
tasks under the Andersen/Client Agreement not listed but required to complete
the deliverables below will be considered part of the scope.):

                                       5
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<Caption>
                                                                      % Complete by Stage
----------------------------------------------------------------------------------------------------------------------
                                                                                                 Integrated
Object Number        Description                     Specs     Develop   Unit Test  String Test     Test     Implement
-------------        -----------                     -----     -------   ---------  -----------  ----------  ---------
<S>                  <C>                             <C>       <C>       <C>        <C>          <C>         <C>
CN-DAI-JDE-X-1-001   Vendor master                     100      100      100         100              0          0

CN-DAI-JDE-X-1-003   Bank Information                  100      100      100         100              0          0

CN-DAI-JDE-X-1-002   Customer master                   100      75        0           0               0          0

CN-EXE-JDE-X-1-001   Inventory Balance on Hand         100       0        0           0               0          0

EN-JDE-CS-X-002      NCA : Address verification
                     (Address Mailer, SSN du           100      100      100         100              0          0

EN-JDE-CS-X-001      Default value for customer
                     master (including credi           100      100      100         100              0          0

EN-JDE-WMS-X-009     WMS Enhancement                   100      100      100         75               0          0

EN-JDE-CS-X-006      Qualified groups for promotions   100      100      100         75               0          0

EN-JDE-CS-X-005      Sample sales for displayers /
                     directors                         50        0        0           0               0          0

EN-JDE-CS-X-003      Counter of number of orders
                     (free goods and freigh            25       25        0           0               0          0

EN-JDE-CS-X-008      Auto-close inactive accounts      25        0        0           0               0          0

IN-JDE-IOE-X-X-008   Displayer Purge Upload            100      100      100         75               0          0

IN-JDE-QUA-X-X-001   Customer address QUAD             100      100      100         75               0          0

IN-JDE-IOE-X-N-001   Displayer Upload                  100      100      100         75               0          0

IN-JDE-INT-X-X-001   Customer address INT              100      100      100         75               0          0

EN-JDE-CS-X-007      Vertex interface, retail price,
                     state adjustment,                 100      100      100         75               0          0

EN-JDE-VTX-X-002     Tax Only Credit                   100      100      100         75               0          0

IN-VTX-JDE-X-X-001   Tax amount and tax base amount    100      100      100         75               0          0

IN-IOE-JDE-X-N-001   Order Extract                     50        0        0           0               0          0
</Table>

                                       6
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<S>                  <C>                              <C>     <C>       <C>       <C>          <C>        <C>
IN-JDE-VTX-X-X-001   Tax calculation                   100     100      100        75           0          0

IN-SCN-JDE-X-D-001   Scanner to JDE dataflow (Bubble
                     Order)                            50       0        0          0           0          0

EN-JDE-CS-X-010      Auto Credit / Debit                0       0        0          0           0          0

EN-JDE-MLR-X-002     Address Server requirements
                     gathering                         100      0        0         100          0          0

IN-JDE-EXE-X-D-001_  Customer                          100     100      100        100          0          0

IN-JDE-IOE-X-N-003_  Account Detail Upload             100     100      100        25           0          0

IN-JDE-IOE-X-H-006   Item Status Upload                100     100      100        100          0          0

IN-JDE-IOE-X-H-007   Order Status Upload               100     100      100        100          0          0

IN-JDE-INV-X-X-001   Invoice Mailing                   100     100      100        50           0          0

EN-JDE-CS-X-004      Invoice (comments, reason for
                     non shipment, group               100     100      100        25           0          0

IN-JDE-IOE-X-N-002   Invoice Upload                    100     100      100        50           0          0

IN-JDE-EXE-X-D-005   Sales Order
                     Header/Detail/Trailer             75      75        25         0           0          0

IN-EXE-JDE-X-D-005   Shipping Header/Detail            50       0        0          0           0          0

IN-IOE-JDE-X-N-002   Payment Extract                   100     100      100        100          0          0

IN-FRG-JDE-X-X-001   Automatic Invoice Upload          100     100      100        100          0          0

IN-CMS-JDE-X-N-003   Sales accounting - Redemption
                     of certificate                    100     100      100        100          0          0

IN-HR-JDE-X-X-001    HR interface to JDE (Abra)        100     100      100        100          0          0

IN-BUD-JDE-X-X-001   PC budget Upload                  100     100      100        25           0          0

IN-4S-JDE-X-X-001    4th Shift (Enterprise system
                     for sub's)                        100     100      100        100          0          0

IN-FA-JDE-X-X-001    FAS (fix assets) manual update
                     to GL                             100     100      100        100          0          0

IN-FOX-JDE-X-X-001   Fox Pro (system for Mexico)       100     100      100        100          0          0

IN-COM-JDE-X-X-002   Commissions Check upload          100     100      100        100          0          0

IN-JDE-BK1-X-X-002   ACH Payment                       100     100      100        75           0          0

IN-JDE-IOE-X-N-011   Statement (account activity)       0       0        0          0           0          0

IN-JDE-FOR-X-X-001   AP checks sent to Forms Server
                     for Formatting                    100     25        0          0           0          0

IN-JDE-BK1-X-X-001   Positive Pay interface with
                     Bank1.                            100      0        0          0           0          0
</Table>

                                       7
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<S>                  <C>                              <C>     <C>      <C>       <C>         <C>        <C>
IN-BK1-JDE-X-X-001   Bank Reconciliation tape          100      0        0          0          0          0

EN-JDE-FN-X-006      View PO Unit Price for received
                     inventory                          0       0        0          0          0          0

IN-JDE-IOE-X-N-010   AR aging                          100     100      100        100         0          0

EN-JDE-FN-X-002      Map a method of payment code to
                     a specific g/l off                100     100      100        100         0          0

EN-JDE-FN-X-005      Remove NSF hold when AR balance
                     is Zero                           100     100      100        100         0          0

EN-JDE-FN-X-001      Enter quantity for noncash
                     payments and auto calcu           100     100      100        100         0          0

IN-JDE-IVR-X-W-001   JDE-IVR Data Extract              100     100      100        25          0          0

EN-JDE-FN-X-003      Auto update credit limit based
                     on WMS for past 12                100     100      100        100         0          0

EN-JDE-FN-X-004      Exempt certain displayers from
                     credit limit auto u               100     100      100        100         0          0

IN-JDE-IH-X-W-004_   AR_TRANSACTIONS_HIST              75      75        50         0          0          0

IN-JDE-IH-X-W-003_   AR_MASTER_HIST                    100     50        50         0          0          0

IN-JDE-IH-X-W-016    SALES_ORDER_MESSAGES_HIST         50       0        0          0          0          0

IN-JDE-COM-X-X-001   New Address Book accounts
                     outbound to commissions           100     100      100        100         0          0

IN-JDE-COM-X-X-002   Address Book maintenance into
                     JDE, passing change               100     100      100        100         0          0

IN-COM-JDE-X-X-001   Compensation Hierarchy Changes    100     100      100        100         0          0

IN-JDE-COM-X-X-003   Sales Outbound from JDE passing
                     Sale data F4201, a                100     100      100         0          0          0

IN-COM-JDE-X-X-004   Commissions WMS information        0       0        0          0          0          0

Job Scheduling       Job Scheduling and Interface
                     Integration                       50      50        50        50          0          0

IN-JDE-EXE-X-D-004   PO Header/Detail                  100     100      100        100         0          0

IN-EXE-JDE-X-D-001   Activity, PO receipts             100     100      100        100         0          0

IN-EXE-JDE-X-D-002   Activity, Mark outs               100     100      100        100         0          0

IN-EXE-JDE-X-D-003   Activity, Inventory Adjustments   100     75        25         0          0          0

IN-EXE-JDE-X-D-004   Inventory Balance on Hand         100      0        0          0          0          0

EN-JDE-SC-X-001      Transportation routes             50       0        0          0          0          0
</Table>

                                       8
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PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

<Table>
<S>                  <C>                              <C>     <C>      <C>        <C>        <C>         <C>
IN-JDE-IOE-X-N-005   Item Assembly (itc) Upload
                     (KIT)                             100     100      100        100          0          0

IN-JDE-IH-X-W-017    CARRIER_CONTACT                   100     100      100         0           0          0

IN-JDE-IOE-X-N-004   Item (itm,iad,itc for USA and
                     CAN) Upload (nightly              100     100      100        100          0          0

IN-JDE-EXE-X-D-002   Item Header/Detail                100     100      100        100          0          0

IN-JDE-DP-X-D-001    Items, locations, sales history
                     (3 files)                         100     100      100        75           0          0

IN-JDE-IH-X-W-001    CUSTOMER_MASTER_HIST              100     100      100         0           0          0

IN-DP-JDE-X-D-001    Forecast info returned            100     25        0          0           0          0

IN-JDE-IH-X-W-002    COMMISSION_DATA_HIST              50       0        0          0           0          0

IN-JDE-EXE-X-D-003   Vendor                            100     100      100        100          0          0

IN-EXE-JDE-X-D-006   Item dimension                    100     100      100        100          0          0

IN-JDE-IH-X-W-015    PURCHASE_ORDER_RECEIPT            100     100      100         0           0          0

CN-DWH-DP-X-1-001    Sales history (DP), APAg
                     Interface set up                  100     100      100        100          0          0

DP-JDE-X-D-001       Stored Procedure: forecast from
                     DP                                100     100      100         0           0          0

IN-JDE-IH-X-W-013    SALES_ORDER_DETAIL_HIST           100      0        0          0           0          0

IN-JDE-CAN-X-D-001   Canada Export file (shipment)     100     100      100         0           0          0

IN-JDE-PR-X-D-001    PR Sales order header             100      0        0          0           0          0

IN-JDE-PR-X-D-002    PR Invoice detail                 100      0        0          0           0          0

IN-JDE-IH-X-W-005    ITEM_HISTORY_HIST                 100     100      100         0           0          0

IN-JDE-IH-X-W-009    PURCHASE_ORDER_HEADER             100     100      100         0           0          0

IN-JDE-IH-X-W-008    ITEM_ATTRIBUTE_HIST               100     100      100         0           0          0

IN-JDE-IH-X-W-006    ITEM_MASTER_HIST                  100     100      100         0           0          0

IN-JDE-IH-X-W-007    ITEM_QUANTITY_HIST                100     100      100         0           0          0

IN-JDE-IH-X-W-012    SALES_ORDER_HEADER_HIST           100      0        0          0           0          0

IN-JDE-IH-X-W-010    PURCHASE_ORDER_DETAIL_HIST        100     100      100         0           0          0
</Table>

                                       9
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

Manual Conversions:

Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Manual Conversions - PwC will provide guidance to Client
to produce those deliverables listed below. (Associated tasks under the
Andersen/Client Agreement not listed but required to complete the deliverables
below will be considered part of the scope.):

<Table>
<Caption>
                                                             % Complete by Stage
--------------------------------------------------------------------------------------------------------
                                                                                  Integrated
Object Number        Description          Specs  Develop  Unit Test  String Test     Test      Implement
-------------        -----------          -----  -------  ---------  -----------  ----------   ---------

<S>                  <C>                  <C>    <C>      <C>        <C>          <C>          <C>
Manual               Item Master           100     100      100           0            0           0

Manual               Chart of Accounts     100     100      100           0            0           0

Manual               GL Balances           100     100      100           0            0           0

Manual               Purchase Orders       100     50        0            0            0           0

Manual               Transportation
                     Routes                100     100       50           0            0           0
</Table>

Other Deliverables

PwC, working with the HIG personnel, will produce the following remaining
deliverables:

Organizational Change Management

   o   Web Based Training Course Maps

   o   Web Based Training Courses and materials, including process maps

   o   Prerequisite Training Delivery Confirmed

   o   Training Schedule

   o   Go-Live Promotion and Communications Plan

   o   Ownership Transition Plan

   o   System Go-Live and Project Success Communication

Reports & Form Team

   o   Report and Form Cut-Over Checklist

   o   Report Development Request Approach (Post Go Live)

Development & Functional Teams (Supply Chain, Customer & Sales, and Finance)

   o   Archived Interface Program Code

   o   Control Reports

   o   Interface Impact Assessment on Custom Modifications

                                       10
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

   o   Reconciliation Reports

   o   Archived Data Conversion Program Code

   o   Data Conversion Checklist

   o   Operational batch schedule

   o   Operational batch schedule documentation

   o   Security design and approach

   o   Archived Enhancement Program Code

Functional Teams (Supply Chain, Customer & Sales, and Finance) & Integration
Teams

   o   Integrated Test Approach

   o   Integrated Test Scripts

   o   Integrated Test Data

   o   Stress Test Approach

   o   Stress Test Scripts

   o   Stress Test Data

   o   Stress Test Instructions

   o   Stress Test Evaluation Form

   o   Stress Test Results

   o   Integrated Test Kick-Off Presentation

   o   Integrated Test Results

   o   Issues Resolution

   o   Updated Process Flow Charts

   o   Knowledge Transfer Plan - at Integrated Test and Post Go-live

   o   User Readiness Mock Session ('Day in the Life')

   o   Roll-Out and End-User Support Team Plan

   o   Overall Cut-Over Checklist

   o   Contingency Plan

   o   Completed Go-Live Sign-Off

   o   Going-Forward Recommendations

   o   Post Go-live 'C' Priority Development Plan

Demand Planning

   o   System Configuration

   o   Integrated Testing

   o   User and Technical Training

   o   User / Procedure Manuals

   o   System Integration with JDE

   o   Sales History Data Conversion

   o   Demand Planning Process Implementation

Sales and Operations Planning

   o   Process Flows

   o   Policy and procedure documentation

   o   Monthly planning calendar

                                       11
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

   o   Role definition

   o   Key Reports (approach and specification)

   o   Roll out plan

Project Management Assistance

   o   Build Phase QA Checklist

   o   Client Satisfaction Survey

   o   Overall Project Review

   o   Project Team Evaluations

   o   Lessons Learned

   o   Final QA Review Checklist

   o   Test Phase QA Checklist

   o   Post Roll Out Review Report

   o   Issue Database

Activities and Services

PWC, WORKING WITH THE CLIENT, WILL COMPLETE THE REMAINING KEY ACTIVITIES AND
SERVICES:

   JDE Implementation

   o   WBT Course & Related User Procedure & Training Development Materials

   o   Training Preparation - Logistics

   o   Remaining Reports Development - See Above

   o   Remaining Forms Development - See Above

   o   Remaining Interface Development  - See Above

   o   Data Conversion Preparation (Data Cleansing, Final Mapping)

   o   Remaining Data Conversion Development - See Above

   o   Remaining Enhancement Specifications Development - See Above

   o   Remaining Enhancement Development including Unit Testing - See Above

   o   Developer Support During Integrated and System Test

   o   Remaining Functional Team Support of Development Team - See Above

   o   Integrated Test Preparation - Scripts Development

   o   Integrated Test - Cycle 1

   o   Integrated Test - Cycle 2

   o   Stress Test Preparation and Execute #1 (Sales Order Processing)

   o   Data Conversion Test #1 (A,B)

   o   Data Conversion Test #2 (A,B,C)

   o   Stress Test Preparation and Execute #2 (Integrated Processing)

   o   Deploy Preparation

   o   Training Delivery

   o   User Readiness Session

   o   Quality Assurance Review - Check Points

   o   Close Build Phase

                                       12
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

   o   Overall Project Management (Client makes management decisions)

   Sales and Operations Planning

   o   Develop S&OP process design

   o   Gather input and define functional requirements

   o   Define key metrics and reports to support the S&OP Process

   o   Define the organizational roles and responsibilities

   o   Facilitate process design workshops

   Demand Planning

   o   Prepare and Convert Data (2 years of Sales History)

   o   Assist in design of Interface to and from JDE

   o   Perform 2 Integrated Test Cycles

   o   Prepare and facilitate Training

   o   Define and Develop Reports

   o   Validate Final Technical Environment

   o   Deploy Demand Planning

   Organizational Change Management

   o   Plan and facilitate remaining communications

   o   Conduct remaining organization communication meetings

   o   Continue to celebrate milestone accomplishments

   o   Facilitate User involvement strategy from Design Phase

   o   Facilitate Leadership involvement strategy from Design

   o   Facilitate findings/actions items identified in Change readiness/risk
       assessment from Design Phase

   o   WBT Courses and related Materials

   o   Training development and facilitation

Assist with providing guidance for the following client-led sub-teams:

o  Commissions

o  9-8 Customer Number Conversion

o  Data Warehouse

o  CNC/Infrastructure

Services and deliverables under the Andersen/Client Agreement which are not
expressly identified as PwC Services shall be referred to collectively as the
Prior Work.

Team Structure

The team organizational structure will remain the same as identified in the
Andersen/Client Agreement.

                                       13
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

PwC Services

The PwC Services will be performed by PwC's management consulting line of
service. Except as otherwise provided in this Agreement, all terms and
conditions set forth in the Andersen/Client Agreement will apply to and are
hereby incorporated by reference into this Agreement, as if all references
therein were to PwC instead of Andersen, and all references to the
Andersen/Client Agreement were to this Agreement. However, the scope of PwC
Services, PwC staffing and fee arrangements are as set forth in this Agreement.

It is an assumption under this Agreement that all deliverables, working papers
and work products will be available to PwC on a timely basis for the performance
of the PwC Services. Should this assumption become invalid, the parties will
amend this Agreement through a change order, taking into account any impact on
schedule, fees and resources.

In calculating and approving the fee estimate in this Agreement, the parties
have assumed that the Prior Work meets appropriate standards for the efficient
performance of the PwC Services and complies with the standards set forth in the
Andersen/Client Agreement, and will not require amendment, update, correction or
change to meet such standards. In the event the Prior Work meets the warranty
standards set forth in Section 6 of the incorporated Business Consulting
Standard Business Terms (the "Performance Standards"), and Client nevertheless
requests a change to the Prior Work, the parties will amend this Agreement
through a change order, taking into account any impact on schedule, fees and
resources. However, in the event Client believes that the Prior Work performed
in Phase III did not meet the Performance Standards, Client will provide all
reasonable information and documents requested by PwC to evidence such belief.
If the Prior Work performed in Phase III did not meet the Performance Standard,
then PwC shall be obligated to work in a diligent and competent manner with the
Client team (in accordance with their respective responsibilities for the
original work being corrected) toward making any required amendment, update,
correction or change. Such corrective work shall be considered PwC Services for
which no fees shall be charged to Client.

Notwithstanding the foregoing paragraph, all amendments, updates, corrections or
changes to Phase I and Phase II work will be considered additional work and will
be handled through the change order process. Client acknowledges that PwC's
agreement to perform corrective services does not imply and will not be deemed
to make PwC responsible for deficiencies or defects in Andersen's work or
otherwise make PwC a successor or assignee of Andersen or the Andersen/Client
Agreement. However, PwC agrees that it will be responsible for performing
corrective services in a diligent and competent manner, as described above.

The PwC Services, including post-live services, will be consistent with audit
independence rules. Without limitation, PwC will not perform any management
functions or supervise the operation of the Client's systems.

PwC Staffing

We anticipate that the following PwC resources will be assigned to this project.
PwC may, from time to time, make re-assignments and substitutions of personnel
in accordance with the Business Consulting Standard Business Terms set forth in
the Andersen/Client Agreement:

                                       14
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

   o  Robert Newsbaum - Engagement Director

   o  Steve McLaurin - Quality Assurance

   o  Shawn Permann - Project Manager - Part Time*

   o  John Hallin - Customer and Sales Team Lead - Full Time*

   o  Bob Whalen - Financials Team Lead - Full Time*

   o  Bryan Fornadel - Supply Chain Team Lead - Full Time*

   o  David Siu - Development Team Lead - Full Time*

   o  Ryan Ferguson - Customer and Sales Team Consultant - Full Time*

   o  Jeff Pennington - Supply Chain Team Consultant - Full Time

   o  Britt-Louise Andermo - Financials Team Consultant - Full Time*

   o  Muriel Perie - Technical Facilitator - Full Time*

   o  Ocie Anderson - Supply Chain Team Consultant - Full Time*

   o  Doug Roesch - Reports and Forms Team Support - Full Time

   o  Staci Rankin - Web Tech Writer - Full Time

   o  Stacie Mewhirter - Web Tech Writer - Full Time

   o  The following resources will be contracted directly to HIG from Experio:
      Regina Brodum - Supply Chain Team Consultant - Full Time &  Carol Pearson
      - Organizational Change Team Consultant- Full Time

Fees and Expenses

We estimate the Build Phase, including post go-live support will be completed on
February 3, 2003 with an actual 'Go-Live' date estimate of December 29, 2002.

PwC's fees for the scope of Services described in this Statement of Work will be
based upon actual time and materials at a substantially discounted rate. Our fee
estimate is $1,768,358, plus out of pocket expenses. An hour and rate schedule
supporting this fee estimate is shown below.

<Table>
<Caption>
PWC RESOURCES
-------------
HOURS          RATES      FEES            ROLE                                                   RESOURCE
-----          -----      ----            ----                                                   --------
<S>            <C>        <C>             <C>                                                    <C>
64             $288.00    $   18,432      Quality Assurance                                      S. McLaurin

116            $288.00    $   33,408      Engagement Director                                    B. Newsbaum

674            $256.00    $  172,544      Project Manager                                        S. Permann

1171           $224.00    $  262,304      Functional Lead - Customer & Sales & Integration Lead  J. Hallin

1160           $224.00    $  259,840      Functional Lead - Supply Chain Team                    B. Fornadel

1186           $224.00    $  265,664      Functional Lead - Financial                            B. Whalen

1016           $147.20    $  149,555      Technical Lead - Development Team                      D. Siu

104            $160.00    $   16,640      Technical Facilitator                                  M. Perie

1146           $160.00    $  183,360      Application Consultant - Customer & Sales Team         R. Ferguson

260            $118.40    $   30,784      Application Consultant - Customer & Sales Team         TBD

1020           $147.20    $  150,144      Application Consultant - Financial                     B. Andermo

529            $147.20    $   77,869      Application Consultant - Supply Chain Team             O. Anderson

400            $ 80.00    $   32,000      Staff Consultant - Financial/Web Tech Writer           S. Mewhirter

320            $118.40    $   37,888      Staff Consultant - Supply Chain                        J. Pennington

400            $ 80.00    $   32,000      Staff Consultant - Customer/Web Tech Writer            S. Rankin

312            $147.20    $   45,926      Report Developer                                       D. Roesch

9878                                      Total Hours

               $179.02    $1,768,358      PwC Average Rate & Total Fees
</Table>

                                       15
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

Third-party resources will be required for the CNC implementation and
configuration and the development effort. It is our understanding that HIG will
contract directly with all 3rd party vendors and these vendors will bill HIG
directly for those services. All third party resources (other than any PwC's
subcontractors) will be considered part of the Client resource team. The scope
of work for these third party resources is consistent with the scope identified
for these roles in the Andersen/Client Agreement, and the project assumes their
diligent and competent performance.

This fee estimate is based on Client fulfilling the Client Responsibilities and
Assumptions described in the Andersen/Client Agreement, which responsibilities
and assumptions are incorporated herein, as described above.

PwC will bill Client $290,000 after the beginning of the project (August 1,
2002) then in accordance with the following billing schedule:

               September 1, 2002 $290,000+ actual expenses incurred in July
               October 1, 2002   $290,000+ actual expenses incurred in August
               November 1, 2002  $290,000+ actual expenses incurred in September
               December 1, 2002  $290,000+ actual expenses incurred in October
               January 1, 2002   $290,000+ actual expenses incurred in November
               February 15, 2003 Remaining fees + actual expenses incurred in
                                 December and January

As an incentive to its team, PwC agrees to pay a "Client Stay Bonus" to those
key PwC employees (identified in the Staffing section by *) who remain for their
designated term.

PwC will set the following standards for the bonus. The bonuses will be paid to
qualified employees in the amount of 2.5% of base salary for each month of
service on this engagement. The bonus calculation will be based on the current
salary of the staff member at the time the bonus is paid. Nothing in this
Agreement will imply that Client has any control or responsibility for PwC's
bonus program. Without limitation, PwC has determined that if the staff resigns
from the firm or is terminated or removes themselves from the project prior to
the completion of their term, they will be disqualified from the Client Stay
Bonus program.

We will reconcile the actual fee amounts incurred for the project at the end of
the project and any adjustments will be reflected in a final billing or credit.

PwC will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, per diems, etc.) incurred as a result of
PwC's performance of Services. PwC agrees to use reasonable efforts to limit
travel and lodging expenses by using coach air fare, booking in advance when
available, staying at hotels identified by Client offering corporate rates, and
sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on PwC's net income shall be Client's
responsibility.

                                       16
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

Certain Key Conditions

As a condition for entering into this Agreement, PwC is relying upon the
following agreements by Client:

Client understands and agrees that neither PwC nor any of its affiliates,
partners, principals or employees is a successor, assignee or transferee of
Andersen or any of Andersen's assets or liabilities, including without
limitation the Andersen/Client Agreement. Client waives, releases and discharges
PwC from any claim that PwC, as a result of PwC's entering into this Agreement,
its performance of the PwC Services, or its hiring or engagement of former
Andersen partners, principals and employees (whether or not in connection with
the PwC Services), is liable or otherwise responsible for any obligation or
action or failure to act by Andersen,

Without limiting the foregoing, if Client has paid Andersen for any work that
has not been completed as of the start of PwC's participation in the project,
Client will look solely to Andersen for the refund of payments or other
resolution of any payment disputes.

PwC is responsible for the performance solely of the PwC Services, as described
in this Agreement. PwC's Services exclude the Prior Work, except that PwC has
agreed to perform certain corrective services as described above. Client hereby
waives, releases and discharges PwC from all Actions which Client ever had, now
has, shall or may have, against PwC related to any deficiencies or defects in
the Prior Work or any other commitment, obligation, action or failure to take
action by Andersen. For purposes of this paragraph, "PwC" includes PwC, and its
present, future and former partners, principals, agents, employees, attorneys,
representatives, affiliated entities, parents and subsidiaries, officers,
predecessors, successors and assigns. For purposes of this paragraph, "Actions"
means all suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, damages, judgments, execution, claims and demands whatsoever, in law
or equity, whether based in tort, contract or other theory of recovery, known or
unknown, absolute or contingent, direct or indirect.

Client management has designated an executive responsible for the project to
review, approve and evaluate the adequacy of project choices regarding the
products to be selected and evaluated, and the design and implementation of the
ERP system, including, but not limited to, the controls and system procedures to
be implemented, the scope and timetable of system implementation, and the
testing, training, and conversion plans. Such executive will be responsible for
reviewing and accepting all deliverables. Additionally, Client, through such
executive, will be primarily responsible for confirming that the internal
controls and financial reporting systems within the ERP system are adequate for
Client's needs.

                                       17
<PAGE>

PWC CONSULTING

A business of PRICEWATERHOUSECOOPERS [LOGO]

Other

PwC may without consent assign or transfer this Agreement to a successor or
assignee to that portion of its entire consulting business to which this
Agreement relates.

Without limitation of the other provisions of this Agreement, references to the
"fees Andersen receives hereunder" in Section 7(a) of the Business Consulting
Standard Business Terms in the Andersen/Client agreement will be deemed to refer
to "fees PwC receives under this Agreement."

Because adverse income tax consequences may result from assignment of PwC
personnel at project sites for an extended period, such personnel may be
required by PwC to break from providing service to Client; and if Client elects
in its discretion that it does not want to release personnel from performing
services, after written notification by PwC of such adverse income tax
consequences Client agrees to pay to PwC the amount of compensation provided by
PwC to its personnel to cover the tax consequences thereof.

Please indicate your agreement with this letter by signing where indicated
below, and returning to my attention the additional copy of this letter that I
have included.

We are grateful that you have chosen PwC and look forward to working with you on
this project.

Sincerely yours,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

By:  /s/ Steve McLaurin
Name: Steve McLaurin

Agreed and accepted as of the date of this letter:

Home Interiors & Gifts, Inc.
By:  /s/ Kenneth J. Cichocki
Name:  Kenneth J. Cichocki
Title: Sr. VP of Finance, Chief Financial Officer

                                       18

<PAGE>
                          [ARTHUR ANDERSEN LETTERHEAD]

BUSINESS CONSULTING
STATEMENT OF WORK

December 20, 2001

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Mr. Cichocki:

This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J.D. Edwards Financial, Distribution and Demand Planning
software ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").

Project Scope and Objectives

We understand that the objective for this project is for Andersen to assist HIG
in planning the implementation of HIG's ERP system, using as a foundation, the
J.D. Edwards (JDE) system solution. Andersen will provide consulting and project
management services for the ERP implementation planning project.

The scope of this project is to plan the implementation for the following JDE
modules:

o    General Ledger and Financial Reporting

o    Budgeting

o    Multi-Currency Processing

o    Address Book

o    Accounts Receivable

o    Accounts Payable

<PAGE>
o    Project Accounting

o    Job Cost

o    Treasury/Cash Management

o    Fixed Assets

o    Purchasing

o    Inventory Management

o    Sales Order Management

o    Advanced Pricing

o    Demand Planning

o    Standard Workflow Processes for the above modules

Geographically the scope includes:

o    HIG Headquarters in Carrollton, Texas

o    HIG Distribution Center in Carrollton, Texas

Andersen Services and Responsibilities

The project services and responsibilities will include the following:

Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:

o    Develop an operational enterprise master implementation plan and detailed
     project plan for the planning, design, implementation and roll out phases.

o    Identify and confirm the implementation scope, objectives and assumptions.

o    Develop project calendar and critical success factors.

o    Develop proposed project organization charts for the project teams and
     confirm resource availability and time commitments.

o    Identify and estimate the number of implementation interfaces, conversions
     and modifications and the respective level of complexity.

o    Identify the number of processes and sub-processes per module and the
     respective level of complexity.

o    Identify the number of custom and/or standard reports and forms and the
     respective level of complexity to be included in the implementation scope.

o    Confirm and assess other business initiatives, which could impact the
     status of the JDE project.

o    Assist HIG personnel in understanding and using our standard implementation
     methodology.

o    Refine implementation cost estimates specific to utilizing Andersen and
     J.D. Edwards Services as the business partners on the JDE implementation.

o    Identify all related activities reasonably necessary to the successful ERP
     implementation.

                                        2

<PAGE>

Deliverables

Andersen, working with the HIG personnel, will produce the following
deliverables:

o    Project team organization chart

o    Project scope, objectives and assumptions

o    Project critical success factors

o    Project team training plan

o    Detailed implementation approach, timeline and calendar

o    High-level enterprise master implementation plan

o    Detailed work plans and resource estimate

o    High-level interface, conversion and modification matrices

o    Refined implementation cost estimate

o    Processes and sub-processes matrices

o    Finalized list of modules to be implemented

Client Responsibilities and Project Assumptions

The following individuals will be responsible for providing information and
documentation relative to the process, functionality and technology within the
scope of their identified sub-team. They will provide assistance in identifying
key personnel within their areas for additional data gathering as well as
provide oversight and confirmation of final deliverables.

o    Erik Johnsson - Project Management

o    Chris Lesher - Customer and Sales Team Lead

o    Mary Knight Tyler - Financial Team Lead

o    Dan Zipes - Supply Chain Team Lead

o    Alan Boyer - Information Technology - Development and Infrastructure

1.   Client Responsibilities

     In connection with Andersen's provision of the Services, Client will
     perform the tasks, furnish the personnel, provide the resources, or
     undertake the responsibilities specified below ("Client Responsibilities").

     Client will designate a competent employee or employees within its senior
     management who will make all management decisions with respect to this
     engagement. To the extent that the Services or Andersen's deliverables
     include the design or implementation of hardware or software systems,
     Client's management shall be responsible for making all management
     decisions, including but not limited to, decisions concerning systems to be
     evaluated and selected; the design of such systems; controls and system
     procedures to be implemented; scope and timetable of system implementation;

                                       3
<PAGE>

     and testing, training, and conversion plans. To the extent that Andersen's
     deliverables include surveys, analyses, reports, evaluations,
     recommendations or other management consulting services, Client's
     management shall be responsible for all implementation decisions and for
     any future action with respect to the matters addressed in the
     deliverables. In conjunction with Client acceptance, Client's management
     will evaluate the adequacy and results of the design and implementation of
     Andersen's deliverables.

     Except as expressly agreed herein, Client shall be solely responsible for:

     o    determining the existence of, and complying with, any and all of the
          following that are applicable to electronic transactions, commerce,
          processes, or activities conducted over the Internet or any electronic
          network (collectively, "Transactions"): import/export controls;
          requirements to obtain and maintain licenses or other permissions;
          requirements to assess, pay, or withhold taxes, customs duties, or
          other charges; and other laws or regulations in all applicable
          jurisdictions;

     o    the security of its network and any related systems, including the
          security, privacy and confidentiality of any Client or third party
          data, intellectual property, or other information;

     o    establishing and determining the validity and enforceability of
          contract execution, performance and fulfillment processes, contracts,
          and any other documentation necessary for or used in conducting
          Transactions;

     o    any content contributed by Client or a third party in connection with
          this engagement; and

     o    any use by Client of the Deliverables (including, but not limited to:
          Client's posting to its website, or transmission over the Internet, of
          text, images, software, music, video, or other information; Client's
          sale or offering for sale of any goods and services via its website or
          otherwise over the Internet; and any linking, framing, or distribution
          of unsolicited electronic mail in connection with Client's website)
          which is illegal, unlawful, or harassing, which infringes another's
          intellectual property rights, or which otherwise constitutes network
          abuse ("Misuse").

Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.

Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary (a) to permit
preparation of financial statements in conformity with generally accepted

                                       4
<PAGE>

accounting principles or any other criteria applicable to such statements, and
(b) to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. [In addition, Client represents and warrants to Andersen that
Client's management: (1) has acknowledged such responsibility in writing to its
audit committee or, if no such committee exists, then to its board of directors
or, if Client has neither an audit committee nor a board of directors, then to
the audit committee or board of directors, as applicable, of any entity that
controls Client or, alternatively, (2) will, upon execution, provide a copy of
this Statement of Work to the foregoing committee or board, as applicable.]
Client will determine the adequacy of its internal accounting controls and
financial reporting systems without relying on Andersen's services or
deliverables as the primary basis for making such determination. Finally, Client
acknowledges to Andersen that it is Client's responsibility to make such
disclosures with respect to this engagement that are required by applicable laws
and regulations.

Project Assumptions

The project assumptions include the following:

o    Andersen is not responsible in any way for the selection of the new ERP
     system J.D. Edwards.

o    The implementation planning project will start on December 10, 2001.

o    The implementation planning project will assume an operational
     enterprise-wide financial, distribution and demand planning system by
     August 1st, 2002.

o    Andersen and HIG will perform as project managers. HIG will provide a
     full-time project manager.

o    HIG will provide the project teams secure dedicated office space with
     telephone and analog line access, located in close proximity to key HIG
     personnel.

Andersen's delivery of the Services and the fees charged are dependent on (i)
the Client's timely and effective completion of the Client Responsibilities,
(ii) the accuracy of the Assumptions, and (iii) timely decisions and approvals
by Client's management. Client shall be responsible for any delays, additional
costs, or other liabilities caused by or associated with any deficiencies in the
Client Responsibilities and Assumptions.

Project Approach

The overall approach for completing the work specified or described in this
arrangement based on the Solution Scoping Phase of Proactive Xe Solutions
Methodology to meet the project objectives for the scope listed previously. This
framework is Andersen's proprietary JD Edwards specific business integration
methodology, and has been adapted to meet the objectives of this engagement.

                                        5
<PAGE>

                     [SCOPING AND PLANNING TIMELINE CHART]

Staffing

The following Andersen resources shall be assigned to the implementation
planning project. Additional Andersen resources may be involved as necessary.

     o    Stephen Engel - Project Partner

     o    Shawn Permann - Project Manager

     o    Steve Bellas - Sales and Customer and Project co-lead

     o    John Hallin - Sales and Customer co-lead

     o    Bob Whalen - Financial Lead

     o    David Siu - Technical Lead

     o    Bryan Fornadel - Supply Chain Lead

     o    Regina Kinslow - Supply Chain Support

     o    Mark Kocis - Change Management Lead

                                       6

<PAGE>

Fees & Expenses

We estimate the project will be completed on December 28, 2001 with a Phase 2
targeted start date of January 2, 2002.

Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate
with a not-to-exceed limit of $110,000, plus out of pocket expenses. Our fees
are based on an average rate of $178 per hour.

Further to these fees, J.D. Edwards Resources for the CNC implementation and
configuration will be required. This will be identified and addressed in a
change order.

This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$50,000 at the beginning of the project (December 10th) and Andersen will bill
the client at the end of the project (January 2, 2002) for any remaining fees
plus all incurred expenses.

Andersen will be reimbursed by Client for reasonable out-of pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 21 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.

Change Order Process

During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as
"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or advise Andersen not to perform the Changes, in which event Andersen
shall proceed with the original Services. The foregoing notwithstanding, if
Andersen, at the written request of Client, performs work that is not covered by
this Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for

                                       7
<PAGE>

which Client shall compensate Andersen at the same rates as those described
under Fees & Expenses above or, in the case of a fixed fee engagement, at the
rates used in calculating such fixed fee.

                                        8

<PAGE>

We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.

Very truly yours,

ARTHUR ANDERSEN LLP

By: /s/ STEPHEN ENGEL
    -----------------------------------
    Stephen Engel

Attachments:    Business Consulting Standard Business Terms
                Business Consulting Statement of Work Standard Change Order Form

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By:      /s / KENNETH CICHOCKI
         ---------------------------
Title    Senior Vice President
         ---------------------------
Date     12/20/01
         ---------------------------

                                       9
<PAGE>
BUSINESS CONSULTING
STANDARD BUSINESS TERMS

These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described
under Change Order Process in the Statement of Work) only in writing when signed
by both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.

SECTION 1. FEES, EXPENSES

Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.

SECTION 2. CLIENT RESPONSIBILITIES

As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.

SECTION 3. CONFIDENTIALITY

With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.

SECTION 4. DELIVERABLES

Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.

SECTION 5. ACCEPTANCE

Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.

SECTION 6. WARRANTY

(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.

(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.

(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE,

                                       1
<PAGE>
AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE.

SECTION 7. RISK ALLOCATION

(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.

(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.

(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.

(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.

(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.

SECTION 8. PERSONNEL

(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services; however, unless Client
agrees otherwise, Andersen shall assign the individuals identified in the
Statement of Work to perform the Services, unless such individuals are no longer
employed by or are unable to perform services for Andersen.

(b) During the term of this Agreement and for a period of twelve (12) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder.

SECTION 9. TERMINATION

(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.

(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.

(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged breach
internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.

SECTION 10. GENERAL

(a) Neither party shall use the other party's name, trademarks, service marks,
logos, trade names and/or branding without such party's prior written consent

(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.

(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.

(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.

(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.

(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all
other terms and provisions shall remain in frill force and effect.

(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.

(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.

(i) The laws of the State of Texas shall govern this Agreement

(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.

                                       2
<PAGE>

BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER ____

[date]

[Client contact name]
[complete legal name of Client entity]
[Client address]

Dear [Client contact name]:

This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated ______________,
200_, including any prior Change Order(s) or amendments thereto (the "Statement
of Work"). This Change Order constitutes the entire understanding and agreement
between Client and Andersen with respect to such changes, supersedes all prior
oral and written communications with respect to such changes (including, but not
limited to, written change requests), and may be amended, modified or changed
only in writing when signed by both parties. The section(s) of the Statement of
Work set forth below is/are hereby amended, effective as of the date first
written above, by adding at the conclusion of the respective section(s) the
following text:

Project Scope and Objectives

Andersen Services and Responsibilities

Deliverables

Acceptance

Client Responsibilities

Project Assumptions

                                       1

<PAGE>

Project Approach

Staffing

Fees & Expenses

Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.

Very truly yours,

ARTHUR ANDERSEN LLP

By:
         -----------------------------
         Stephen Engel

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By:
         -----------------------------

Title:
         -----------------------------

Date:
         -----------------------------

                                       2
<PAGE>
                        [ARTHUR ANDERSEN LLP LETTERHEAD]

BUSINESS CONSULTING
STATEMENT OF WORK

January 10, 2002

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Mr. Cichocki:

This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J. D. Edwards Financial, Distribution and Demand Planning
software. ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").

Project Scope and Objectives

In addition to the ERP implementation planning project (Phase I), We understand
that the objective for the next phase (Design-Phase II) is for Andersen to
assist HIG in the Design and configuration of the ERP system, using as a
foundation, the J.D. Edwards (JDE) system solution. Andersen will provide
consulting and project management services for the ERP system Design project.

The scope of this project is to configure and prepare the following JDE modules
for the implementation phase (Phase III):

o    General Ledger

o    Financial Planning and Budgeting

o    Financial Reporting

o    Multi-Currency

o    Address Book

<PAGE>

o    Accounts Receivable

o    Accounts Payable

o    Supplier Management

o    Procurement

o    Inventory Management

o    Demand Planning

o    Requirements Planning - MRP

o    Sales Order Management

o    Advanced Pricing

o    Standard Workflow Processes for the above modules

The JDE Modules (or module components) that are not included in the scope for
the Design effort include:

o    Electronic Burst & Bind

o    Cash Basis Accounting

o    Time Accounting

o    Fixed Assets

o    Multi-Site Consolidation

o    Basic Equipment Management

o    Requirements Planning

o    Enterprise Facility Planning

o    Advanced Forecasting

o    Quality Management

o    Advanced Stock Valuation

o    Bulk Stock Management

o    Advanced Warehouse Management

o    Work Orders/Service Billing/Work Order Management

o    Transportation Management

o    Job Costing

o    Change Management

o    Contract Billing/Contract Management/Subcontract Management

o    Property Management

o    Call Management

o    Payroll Processing/Time Accounting

o    Human Resources Management/Human Resources Benefits

o    Bulk Stock Management

o    ECS Sales Order Management

o    Load & Delivery Management

o    Manufacturing Suite except for MRP

                                       2
<PAGE>

The processes that are considered in-scope include:

CUSTOMER & SALES

o    New Account Setup

     -    Enter and Validate New Displayer Accounts

     -    Manage Displayer Accounts

o    Determine Item Pricing

     -    Utilize and maintain item price lists

o    Develop and Setup Pricing and Promotion Programs

     -    Displayer group discounts

     -    Item group discounts

     -    Develop and maintain ordinal order promotions (1st order, 2nd order)

     -    Free goods

     -    Develop and maintain contest promotions

     -    Develop and maintain "nuggets" or certificate promotions

     -    Freight pricing

     -    Bonus buys

     -    Kit pricing

o    Enter and Process Merchandise Orders

     -    Enter merchandise order

     -    Validate system processing capability and speed (overnight process)

     -    Process merchandise orders

          -    Consolidate orders

          -    Validate order criteria (min $, credit, account status)

          -    Apply super bubble

          -    Process "ship-with" orders

          -    Process direct ship order

          -    Process Canadian display order

          -    Process Mexico order

          -    Determine tax on order

     -    Process invoices for merchandise orders

o    Enter and Process Service Orders

o    Order Hold Processing

                                       3
<PAGE>

o    Enter and Process Credit Invoices

o    Enter and Process Service Orders

o    Order Hold Processing

o    Enter and Process Manual Orders

o    Enter and Process Credit Invoices

o    Create Customs Documents

o    Payment Processing

     -    Cash Payments

     -    Non Cash Payments

     -    Process NSF Payments

o    Periodic Processing

     -    Close Accounts

     -    Freight Route Changes

     -    Credit Limit Review

     -    Print Statements

o    Extract Data for Other Systems (i.e. Commissions)

o    Marketing Mailings

SUPPLY CHAIN

o    Demand Planning

o    Develop New Products

     -    Initiate New Products

     -    Product Review Committee Meeting

o    Forecast Detail Information

     -    Product Stratification

     -    Develop Sales Forecasting Process

                                       4
<PAGE>

o    Procurement

o    Procure Items

     -    MRP Planning Parameters

     -    Run MRP to create Purchase Orders

     -    Procure items according to forecast needs, and MRP messages

o    Procure MRO/Stores Supplies

     -    Process requisitions

     -    Generate/Maintain Purchase Orders according to set Min/Max levels

     -    Select and Set up Vendors

o    Reporting and Inquiry

     -    Regulatory Reporting

o    Interface

     -    Support interface from ERP to WMS (EXE)

o    Inventory Management

o    Master Data

     -    Maintain Item Master Information

     -    Maintain Vendor Information

o    Item Maintenance

     -    Maintain Item Availability

FINANCE

o    Budgeting & Forecasting

     -    Develop and Consolidate Budget

     -    Develop and Consolidate Forecast

     -    Treasury Management

o    General Ledger

     -    Develop Organizational Entity Structure/Departmental Structure

     -    Develop Chart of Accounts/Reporting Hierarchies

     -    Process Manual Journals

     -    Process Interfaced T/B Journals

     -    Process Intercompany Transactions

     -    Process Allocations

                                       5
<PAGE>

     -    Process Multi-Currency - Translation/Revaluation

     -    Fiscal Period Processing

     -    System Close

o    Reporting and Consolidation

     -    Consolidate and Publish Financial Reports

     -    Regulatory Reporting

o    Sales Accounting, Credit, and Collections

     -    Credits and Adjustments

     -    Collections Management

     -    Customer Correspondence

     -    Cash Receipt/Application/Lockbox

     -    Tax Processing

     -    Multi-currency Processing

     -    Fiscal Period Processing/Reporting

o    Accounts Payable

     -    Maintain Vendor Information

     -    Manual Invoice Processing

     -    Payment Processing

     -    Displayer Payments (1099's & Commissions)

     -    Tax Processing

     -    Multi-currency Processing

     -    Fiscal Period Processing/Reporting

The scope includes the design of the following reports:

o    9 High complexity custom reports

o    9 Medium complexity custom reports

o    9 Low complexity custom reports

The scope includes the design and preliminary specifications for the following
modifications:

o    Financial - AR

     -    Automatically placing orders on hold based on credit and collection
          status

     -    NSF Check auto update

     -    Credit and collections updates for help loans and payment plans

     -    Automatically increase or decrease credit line

                                       6
<PAGE>

o    Financial - AP

     -    Non-cash 1099 information

o    Financial - Tax

     -    Sales Tax Calculation (retail vs. wholesale)

o    Customer and Sales

     -    Pricing rules not covered in advanced pricing

     -    Order pre-process sort routine

     -    New customer account defaults and validations

The scope includes the design and definition of approach for each of the
following conversions (with estimated records):

o    Master Data Conversion -- Customer and Sales

     -    Customer Master -- 180,000 Records

o    Master Data Conversion -- Supply Chain

     -    Vendor Master -- 500 Records

     -    Supplier/Item Information -- 2000 Records

     -    Open Purchase Order Header -- 100 Records

     -    Open Purchase Orders Detail -- 100 Records

     -    Transportation Carriers -- 100 Records

     -    Open Receipts -- 500 Records

     -    Item Master/Item Branch -- 2000

     -    Warehouse Locations -- 1

     -    Units of Measure (standard, conversions) -- 20 Records

     -    Item Cross-Reference -- 500 Records

     -    Finished Goods Inventory -- 2000 Records

     -    Stores Inventory -- 500 Records

     -    Item Cost -- 2000 Records

o    Master Data Conversion -- Finance and Accounting - GL

     -    Chart of Accounts -- 10,000 Records

     -    Companies -- 15 Records

     -    Business Units -- 50 Records

     -    Accounting Periods -- 17 Records

o    Master Data Conversion -- Finance and Accounting - AR

     -    Sales/Use Tax Tables/VAT -- 10,000 Records

     -    Customer Payment Terms -- 50 Records

                                       7
<PAGE>

     -    Dunning Letter Information -- N/A

     -    Bank Payment tables -- 15 Records

o    Master Data Conversion -- Finance and Accounting -- AP

     -    AP Payment Terms -- 50 Records

     -    UDC's (Tax Explanation Codes, Special Handling Codes, 1099 Processing
          Codes, Bank Type Codes) -- 30 Records

     -    Tax Setup (Sales/Use/VAT) -- 10 Records

     -    ACH Bank Information -- 80,000 Records

o    Historical Data Conversion -- Finance and Accounting -- GL

     -    Conversion of GL history (Current & PY balances) -- 1000 Records

     -    Conversion of Budget history (Current & PY balances) -- 1000 Records

     -    Conversion of Forecast history (Current & PY balance) -- 1000 Records

o    Historical Data Conversion -- Finance and Accounting -- AR

     -    Customer History -- TBD

     -    Open AR -- up to 80,000 Records

     -    Sales Tax History -- TBD

     -    Payment Details -- TBD

o    Historical Data Conversion -- Finance and Accounting -- AP

     -    AP Invoice History -- TBD

     -    AP Open Invoices -- 200 Records

     -    AP Payment History -- TBD

o    Historical Data -- Supply Chain

     -    Item History -- Up to 3 years

     -    Sales History -- Up to 3 years

     -    Forecasts -- Up to 3 Years

The scope includes the design and preliminary specifications for the following
interfaces (including the estimated complexity):

o    Finance and Accounting

     -    Positive Pay interface with Bank One -- High Complexity

     -    Sales tax interface with 3rd party (Vertex or Tax Ware) -- High
          Complexity

     -    HR interface to JDE (Abra) -- Medium Complexity

     -    4th Shift (Enterprise system for sub's) -- Low Complexity

     -    Fox Pro (system for Mexico) -- Low Complexity

     -    ACH Payment Interface -- Medium Complexity

                                       8
<PAGE>

o    Customer and Sales

     -    IOE - Internet Order Entry -- High Complexity

     -    Order Scanning -- Medium Complexity

     -    Invoice Mailing -- High Complexity

     -    DIR - Interactive Voice Response -- High Complexity

     -    Address Standardization -- Low Complexity

     -    Data Warehouse -- Medium Complexity

     -    Commissions custom application -- High Complexity

     -    Data Warehouse with HomcoSoft -- High Complexity

o    Supply Chain

     -    EXE (WMS) -- High Complexity

     -    District and Branch Directors Contract application -- High Complexity

     -    Inventory Database and Application for Mexico trailer shipping and
          invoices -- High Complexity

     -    Product Development Brochure/Photo Application -- High Complexity

The scope does not include the design and/or configuration of any third party
tax programs such as:

o    Tax Ware or

o    Vertex

Geographically the scope includes:

o    HIG Headquarters in Carrollton, Texas

o    HIG Distribution Center in Carrollton, Texas

Andersen Services and Responsibilities

The project services and responsibilities will include the following:

Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:

PHASE II -- DESIGN -- This phase is focused on designing the application
configuration based on the business requirements, the to-be processes and the
testing of those designs. It is also focused on the requirements specific to
conversions, interfaces and modifications. Key activities for this phase of work
are:

o    Hardware/Software Configuration - Design System Requirements

o    Technical/CNC Design Workshop - Design Security, Menus and CNC

                                       9
<PAGE>

o    Process Design Workshops - Design Revised (To-Be) Key Business Procedures

o    Application Design Workshops -- Application Design and Set-up

o    Report and Form Workshops - Functional and Reporting Analysis

o    Interface Design Workshops - Specify Interface Requirements and Priorities

o    Data Conversion Design Workshops - Specify Conversion Requirements and
     Priorities

o    Enhancements Design Workshops - Specify Modification Requirements and
     Priorities

o    Prototype (Modular & Integrated CRP) - Application Design and Set-up

o    Finalize Design Specification

o    Procedures/Training Design Workshop

o    Organizational Change Management

o    Quality Design Reviews

o    Overall Project Management

o    Development of Implementation Plan and Resource Estimates

PROJECT PLANNING AND MANAGEMENT -- The purpose of this component is to provide
leadership, guidance and structure to the project team. Additionally, the
project managers will work to remove obstacles and barriers to progress and
insure stability in the implementation process. The project managers will also
be responsible for developing a strong team environment where open communication
is encouraged. Key activities for this component are:

o    Daily Project Management

o    Internal Project Communications

o    Conduct Status Meetings and Prepare Status Reports

o    Conduct Steering Committee Meetings

o    Manage Project Team Roles & Responsibilities

o    Coordination of Deliverables

o    Project Team Training/Orientation

o    Scope and Change Management

o    Manage Project Calendar and schedules

ORGANIZATIONAL CHANGE MANAGEMENT -- This component is focused on the people
aspect of the implementation: Internal and external project communications,
training design and approach, and defining and measuring critical success
factors. Key activities for this component are:

o    Plan and execute communications

o    Manage project change

o    Conduct organization communication meetings

o    Celebrate milestone accomplishments

o    User audience segmentation and data gathering

o    User involvement strategy

o    Leadership involvement strategy

                                       10
<PAGE>

o    Change readiness/risk assessment

o    Application user procedures

o    Technical user procedures

o    Training strategy and approach

o    ERP/Implementation KPI's

EXECUTIVE REPORTING -- This sub-team is focused on the identification of the
reporting requirements for the executive management team and the creation of the
approach and specifications to meet those requirements. This team will review
the current reporting approaches, data sources, toolsets used, and resource
requirements and then, based on the proposed system changes, develop the
approach for the fixture to meet these same requirements. Andersen's role will
be limited to providing support and guidance to the HIG team lead by providing
templates, recommending approaches and tasks, as well as providing subject
matter expert support on JDE data tables, the application development toolset
and the JDE Enterprise Report Writing tool. Key activities for this sub-team
are:

o    Review High-Level Report and Form Requirements

o    Finalize As-Is Report and Form Matrix (if needed)

o    Develop Report and Form Approach

o    Determine Report and Form Development Tool

o    Finalize To-Be Report and Form Matrix

o    Create Non-Standard Report and Form Design Documents

COMMISSIONS SYSTEM -- This sub-team is focused on the identification of the
requirements for the development of a custom system that would support the
management (generation, tracking, reporting, etc.) of the commission payments
made to the independent Displayers. This team will review the business
requirements; develop the businesses specifications and the technical
specification during the design phase and begin development. Andersen's role
will be limited to the management over-sight relative to the integration and
dependency on the J. D. Edwards system design effort and (jointly with HIG) the
design and specification for the integration with the JDE platform. Key
activities for this team are:

o    Develop Business Requirements

o    Determine Development Toolset

o    Identify Business and Technical Resources

o    Develop Technical Specifications

o    Begin Development

Deliverables

Andersen, working with the HIG personnel, will produce the following
deliverables:

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<PAGE>

o    Project Team Roles and Responsibilities

o    Project Work plan

o    Project Contact List

o    Project Calendar

o    Sign-Off Matrix

o    Project Issue Database

o    Project Documentation Standards

o    Time and Expense Tracking Spreadsheet

o    Project Team Goals and Expectations

o    Project Kick-off Presentation

o    Quality Assurance Approach

o    Risk Assessment and Mitigation Plan

o    Technical Environment Approach

o    Technical Environment Scrub Checklist

o    Connectivity Approach

o    Overall Security Approach

o    Security Matrix

o    User Menu Design

o    Object Control Approach and Standards

o    Job Queue Requirements

o    Automatic Jobs

o    Backup and Recovery Approach

o    As-Is Process Flows (if needed)

o    Overview of Best Practices

o    Design Workflows for Processes, Activities, and Tasks

o    Detailed Application Requirements & Approach Matrix

o    Application Design Documents

o    As-Is Report and Form Matrix (if needed)

o    Report and Form Approach

o    To-Be Report and Form Matrix

o    Non-Standard Report and Form Design Documents

o    Interface Approach

o    Preliminary Interface Design Specifications

o    Data Conversion Approach

o    Preliminary Data Conversion Design Specifications

o    Reconciliation Report List

o    Data Conversion Mapping Tables

o    Enhancement Approach

o    Preliminary Enhancement Design Specifications

o    CRP Approach

                                       12
<PAGE>

o   CRP Scripts

o   CRP Configuration

o   CRP Test Data

o   CRP Results

o   User Procedures and Training Approach

o   User Procedures Template and Guidelines

o   List of users with supporting data

o   User involvement strategy; Resource summaries

o   Leadership involvement strategy

o   Change readiness/risk assessment

o   Application user procedures formats/templates

o   Technical user procedures formats/templates

o   Training strategy/approach; Training design formats/templates

o   ERP Business Benefits document

o   Design Phase QA Checklist

o   J.D. Edwards Design Review

o   Detailed Implementation Work plan and resource estimates

Staffing

The following individuals shall be assigned to the engagement from Arthur
Andersen:

     o    Stephen Engel -- Engagement Partner

     o    Sharon Stufflebeme -- Quality Assurance Partner

     o    Bob Newsbaum -- Quality Assurance Partner

     o    Shawn Permann -- Project Manager

     o    John Hahn -- Customer and Sales Team Lead

     o    Steve Bellas -- Customer and Sales Team Lead (interim)

     o    Bob Whalen -- Financials Team Lead

     o    Bryan Fornadel -- Supply Chain Team Lead

     o    Mark Kocis -- Organizational Change Team Lead

     o    David Siu - Development Team Lead

     o    TBD -- Executive Reporting Team Support

     o    Kristy Kimberling -- Customer and Sales Team Consultant

     o    Britt-Louise Andermo -- Financials Team Consultant

     o    Regina Brodun -- Supply Chain Team Consultant

     o    Carol Pearson Organizational Change Team Consultant

     o    TBD (Third Party Subcontractors ) -- Developers (JDE Toolset)

     o    Cheryl Ostor (Third Party Subcontractor) -- Supply Chain Team
          Application Consultant

     o    TBD (Third Party Subcontractor ) -- Supply Chain Team Technical
          Consultant

                                       13
<PAGE>

TEAM ORGANIZATIONAL STRUCTURE

                     [TEAM ORGANIZATIONAL STRUCTURE CHART]

Andersen Roles

PROJECT PARTNER

The project partner ensures overall project success and client satisfaction. The
partner maintains the executive level relationships and keeps all communication
lines open between key client sponsors and Andersen. This individual is
ultimately accountable for the project and has a high-level decision making
capability. Responsibilities include:

     o    Supports timely resolution of major business issues

     o    Ensures resources are available for success of the project

     o    Ensures the project is adequately staffed

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<PAGE>

     o    Respond to on-going status reports to remove/resolve road blocks for
          the project

QUALITY ASSURANCE

The quality assurance representatives are responsible for ensuring quality work
products. Responsibilities include:

     o    Provides expertise and overall direction to the implementation team

     o    Monitors and supports the overall engagement relationship and resolves
          issues and conflicts

     o    Implement and manage ExCEED Process

     o    Implement and manage Quality Assurance Process

PROJECT MANAGER -- SHARED ROLE

The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:

     o    Determines project objectives, schedules, and resource budgets

     o    Monitors results, performance, and resource expenditures against
          targets

     o    Controls all project changes

     o    Compiles project progress and status reports

     o    Maintains customer contact and momentum

     o    Determines specific project tasks and how they will be accomplished

     o    Ensures that assigned tasks are performed in accordance with the
          established standards and are completed on time and within budget

     o    Resolves outstanding issues and action items

     o    Reviews all system modifications with the executive sponsors

FUNCTIONAL TEAM LEAD

The functional team lead is responsible for leading the functional team members
Through the design to support HIG's process vision and business requirements.
Responsibilities include:

     o    Ensures consistency and a high level of quality

     o    Ensures deliveries are completed on time with appropriate functional
          approval and quality

     o    Guides the functional team in effectively translating functional
          requirements into configuration options and solutions

     o    Identifies and assists in resolving issues and conflicts

     o    Leads functional team in change initiatives

     o    Responsible for transferring application configuration and
          implementation methodology knowledge to the Systems Analysts/Business
          System Analysts

     o    Supervises the application consultant

                                       15
<PAGE>

     o    Validates customizations to the standard JDE business processes,
          explains the impact of the customizations on other processes and
          transactions, executes the detail design and configuration of the JDE
          system

     o    Assists in validation of the design of reports, forms, interfaces,
          modifications and conversions

     o    Assists in developing CRP scripts and expected results

     o    Executes CRP testing. This includes making changes in configuration
          based on results and resolving errors

     o    Validates the procedures and system tasks documented by the end user
          training and development team

DEVELOPMENT TEAM LEAD

The development team lead is responsible for leading the development team
members though the design to support HIG's process vision and business
requirements. Responsibilities include:

     o    Gains a clear understanding of business requirements and processes

     o    Attends project/JDE tools training with client developers

     o    Develops draft material in preparation of work sessions

     o    Oversees the development the interface, modification and conversion
          design during the design phase of the project

     o    Documents requirements, process changes and unresolved issues during
          client work sessions in conjunction with business area analysts

     o    Actively works with business area analysts to ensure customization of
          JDE software is minimal

     o    Guides the development team though the design of technical approaches
          and specifications for the interfaces, conversions and modifications

     o    Oversees the Designs and modifies JDE software based on user
          requirement specifications

     o    Oversees the design, development and testing of custom reports

     o    Assist with the design, development and testing of standard reports

DEVELOPERS (3RD PARTY)

The development team is responsible for working with the HIG developers to
understand the business requirements and begin developing the approach and
specifications for the development of the interfaces, conversions, and
modifications. Andersen will directly manage these 3rd party resources.
Responsibilities include:

     o    Gains a clear understanding of business requirements and processes

     o    Jointly develops the interface, modification and conversion design
          during the design phase of the project

     o    Documents requirements, process changes and unresolved issues during
          client work sessions in conjunction with business area analysts

     o    Actively works with business area analysts to ensure customization of
          JDE software is minimal

                                       16
<PAGE>

     o    Develops the design of technical approaches and specifications for the
          interfaces, conversions and modifications

     o    Jointly with HIG developers, designs and modifies JDE software based
          on user requirement specifications

APPLICATION CONSULTANTS

The application consultant plays a combined functional and technical role with
heavy emphasis on knowledge transfer and translating functional requirements
into specific features and tailoring options. Each functional team's Application
Consultant works with the other functional team members to design and configure
the JDE system to support the HIG's "To-Be" process vision and business
requirements. Responsibilities include:

     o    Responsible for transferring application configuration knowledge to
          the Systems Analysts/Business Analyst

     o    Assists the Functional Leads and functional team in effectively
          translating functional requirements into configuration options and
          solutions

     o    Validates customizations to the standard JDE business processes,
          explains the impact of the customizations on other processes and
          transactions, executes the detail design and configuration of the JDE
          system

          --   Assists in validation of the design of reports, forms,
               interfaces, modifications and conversions

          --   Assists in developing CRP scripts and expected results

          --   Executes BPS testing. This includes making changes in
               configuration based on results and resolving errors

          --   Validates the procedures and system tasks documented by the end
               user training and development team

ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE

The change lead is responsible for communicating and managing the change efforts
associated with the implementation. Responsibilities include:

     o    Works closely with the functional and technical teams to understand
          organizational requirements and design approach on user procedures and
          training manuals

     o    Documents and communicates organizational change requirements and
          decisions to the appropriate managers so they can effect the changes
          in their departments

     o    Communicates project progress and important enterprise change
          decisions to the entire company

     o    Develops the training strategy and determines best practice for
          delivery of training

     o    Determines proper medium for training (e.g., classroom, self-paced
          tutorial, train-the-trainer approach, Intranet, etc.)

     o    Determines the target training participants and the training needs
          depending on the work responsibility of that user

                                       17
<PAGE>

TECHNICAL SUPPORT FOR DEMAND PLANNING INSTALLATION (3rd party)

This resource will be responsible for supporting the HIG technical team with the
set-up and installation of the Demand Planning software. Key activities include:

     o    Define technical environment requirements

     o    Develop installation plan

     o    Oversight of the installation process

     o    Documentation related to the install procedures and maintenance

Client Responsibilities and Project Assumptions

1.   Client Responsibilities

     In connection with Andersen's provision of the Services, Client will
     perform the tasks, furnish the personnel, provide the resources, or
     undertake the responsibilities specified below ("Client Responsibilities").

     STEERING COMMITTEE

     The steering committee is the owner of the project and are responsible for
     providing the necessary funding and resources as well as the management
     commitment to the project. Responsibilities include:

          o    Resolves major implementation policy decisions and makes the
               final decision on all other proposed opportunities and
               recommendations

          o    Provides overall project direction and management support

          o    Supports the vision of the project

     KEY ADVISORS

     The key advisors are executive level advisors assisting with business
     knowledge and resources. Responsibilities include:

          o    Assist with issue resolution

          o    Provide input to major business policy decisions

          o    Supports the vision of the project

     EXECUTIVE SPONSORS - PMO

     The project directors are key executives responsible for the major business
     areas included in the project scope. These individuals are ultimately
     accountable for the project and have high-level decision-making capability.
     Responsibilities include:

                                       18
<PAGE>

     o    Supports timely resolution of major business issues

     o    Ensures resources are available for success of the project

     o    Ensures the project is adequately funded

     o    Respond to on-going status reports to remove/resolve road blocks for
          the project

     o    Ensures that internal policies are updated to reflect business process
          changes and communicates that change to the organization

     o    Approves all system modifications

The following individuals will be responsible for providing this executive level
support specific to their areas, which includes providing oversight and
confirmation of final deliverables:

     o    Mary Knight Tyler -- Project Management & Financial Team

     o    Chris Lesher -- Customer and Sales Team

     o    Dan Zipes -- Supply Chain Team

     o    Alan Boyer -- Information Technology -- Development and Infrastructure

PROJECT MANAGER -- SHARED ROLE

The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:

     o    Determines project objectives, schedules, and resource budgets

     o    Monitors results, performance, and resource expenditures against
          targets

     o    Controls all project changes

     o    Compiles project progress and status reports

     o    Maintains customer contact and momentum

     o    Determines specific project tasks and how they will be accomplished

     o    Ensures that assigned tasks are performed in accordance with the
          established standards and are completed on time and within budget

     o    Resolves outstanding issues and action items

     o    Reviews all system modifications with the executive sponsors

BUSINESS AREA ANALYSTS COMBINED WITH THE SYSTEMS ANALYST ROLE

Business Area Analysts are responsible for representing the overall organization
and their specific business unit's needs by participating in requirements
workshop discussions. They are key participants in the design phase, approving
design prototypes and usability testing. They reach consensus regarding changes
in business requirements. Responsibilities include:

     o    Performs as liaison between the business department and the
          implementation team

     o    Attends project team training and orientation

                                       19
<PAGE>

     o    Contributes subject-area business knowledge

     o    Assists in the security definition of end-users

     o    Communicates results of meetings and workshops to the organization

     o    Attends meetings and participates in all aspects of the project

     o    Develops draft material in preparation of work sessions

     o    Gains a clear understanding of business requirements as defined during
          the discovery activity

     o    Assists in the development of the functional design during the design
          phase

     o    Supports timely resolution of outstanding business issues as assigned,
          and documents resolutions

     o    Identifies and communicates opportunities for business area practice
          changes

     o    Prepares and delivers a plan for communication to all areas impacted
          by the new system

     o    Develops written procedures for the new system

     o    Enters reference data into the new system during construction activity
          of the project

     o    Responsible for input and/or coordination of manual data input

     o    Documents requirements, process changes and unresolved issues during
          client work sessions

     o    Designs and modifies JDE software based on user requirement
          specifications

     o    Performs design of custom reports

     o    Performs design of standard reports

TECHNICAL TEAM

The technical team is responsible for developing technical knowledge and skills
specific to the software package. Responsibilities include:

     o    Provides application security and HW/OS support

     o    Oversees database administration

     o    Designs disaster recovery plan

DATABASE ADMINISTRATION

The data base administration team is responsible for creating and maintaining
the database. Responsibilities include:

     o    Responsible for the creation of new tables, views and elements in the
          JDE system

     o    Responsible for data base tuning

     o    Responsible for the creation of views for end-user reporting

     o    Coordinates with the Data Administration group to complete user
          request procedures for adding new data elements, views, and tables to
          the JDE software

DATA ADMINISTRATION

The data administration team is responsible for providing the initial data
context for the project. Responsibilities include:

     o    Ensures that corporate data standards are adhered to and that they fit
          into the corporate logical data model

                                       20
<PAGE>

     o    Reviews draft data materials during the requirements/design definition
          phase, and reviews design feasibility prototypes

     o    Assists the conversion team with data mapping between the JDE system
          to/from other systems

     o    Coordinates creation of database views with the DBAs

     o    Ensures that all data required by the process data flows are reflected
          in the model

     o    Documents potential changes as a result of requirement/process
          discussions

     o    Coordinates with the DBA group to complete user request procedures for
          adding new data elements, views, and tables to the JDE software

NETWORK ADMINISTRATION/TELECOMMUNICATIONS

The network group is responsible for the overall network communication support
needs of the project. Responsibilities include:

     o    Responsible for hardware infrastructure supporting workstation
          connectivity

     o    Ensures that adequate system support will be provided during all
          stages of the project

     o    Develops volume test plans in conjunction with the QA group

     o    Monitors access and documents performance issues as it relates to
          network operations

OPERATIONS GROUP

The operations group is responsible for coordinating the scheduling of all batch
processing. Responsibilities include:

     o    Schedules are coordinated with end-users and/or appropriate project
          staff and properly set-up

     o    Responsible for ensuring schedules do not cause conflicts with other
          areas

CHANGE MANAGEMENT TEAM (SOFTWARE VERSIONS)

The change management group is responsible for controlling software within the
environment. Responsibilities include:

     o    Providing guidance and input for change management plans

     o    Implementing change management plans

QUALITY ASSURANCE/TESTING

The quality assurance group is responsible for reviewing project deliverables
and coordinating user acceptance testing. Responsibilities include:

     o    Develops the user acceptance test plan

     o    Reviews project deliverables with the project manager

     o    Assists in selecting test participants

     o    Coordinates the development of the user acceptance test plan

     o    Schedules and/or coordinates testing facilities and equipment

                                       21
<PAGE>

     o    Coordinates and monitors testing schedule

SECURITY

The security team is responsible for over-all security definition and practice.
They ensure that corporate security standards are adhered to and they fit into
the existing corporate security strategy. Responsibilities include:

     o    Initial set-up, transfer, and maintenance of security/user profiles

     o    Ensures the application does not impact other application security
          (e.g., network, mainframe security, etc.)

     o    Gains a clear understanding of security requirements to define
          security strategy

     o    Responsible for ensuring that long-term strategies are understood

     o    Controls over-all access to the application

     o    Serves as liaison to the auditors for security issues

     o    Responsible for establishing security requirements that will not
          compromise assets (e.g., ensuring that application programmers cannot
          inadvertently erase production data, etc.)

SUPPORT CENTER

The support center is responsible for answering, responding, and assigning (as
needed) end-user desktop software/usage questions and problems. Responsibilities
include:

     o    Questions are answered or assigned to the proper personnel

     o    Proper personnel are notified of problems

     o    Attends training designed for support center staff to answer calls
          and/or determine proper notification (e.g., application group,
          database group, etc.)

SYSTEMS GROUP

The systems group is responsible for providing system support on all platforms.
Responsibilities include:

     o    Coordinates allocation of server and client disk space in preparation
          of installation, upgrade, and maintenance of software

     o    Ensures that adequate disk space is available

     o    Ensures that system standards are adhered to and that they fit into
          the existing and planned system standards

     o    Reviews draft data materials during the requirements/design definition
          phase, and reviews design feasibility prototypes

SUBJECT MAILER EXPERTS -- SHARED ROLE

Subject matter experts (SME) play a key role in defining and clarifying business
requirements. The SME is responsible for participating in meetings, as required
by the business area analysts, to ensure the project team has a clear
understanding of requirements. Responsibilities include:

                                       22
<PAGE>

     o    Contributes subject-area business knowledge

     o    Develops draft material in preparation of work sessions

     o    Assists in the development of the functional design during the design
          phase

     o    Supports timely resolution of outstanding business issues as assigned
          and documents resolutions

     o    Participates in confirming BPS results

ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE

The change lead is responsible for communicating and managing the change efforts
associated with the design effort. Responsibilities include:

     o    Works closely with the functional and technical teams to understand
          organizational requirements and design approach on user procedures and
          training manuals

     o    Documents and communicates organizational change requirements and
          decisions to the appropriate managers so they can effect the changes
          in their departments

     o    Communicates project progress and important enterprise change
          decisions to the entire company

     o    Develops the training strategy and determines best practice for
          delivery of training

     o    Determines proper medium for training (e.g.. classroom, self-paced
          tutorial, train-the-trainer approach, Intranet, etc.)

     o    Determines the target training participants and the training needs
          depending on the work responsibility of that user

COMMISSION SYSTEM LEAD, ANALYST, DEVELOPERS, ET ALL

The responsibility of designing and developing the Commission System is solely
the responsibility of HIG. Andersen's role will be limited to the management
over-sight relative to the integration and dependency on the J. D. Edwards
system design effort. HIG will otherwise be responsible for all deliverables and
work products, resource assignments, tasks identification and completion,
documentation and all other related items to the design and development of the
Commission System.

Project Assumptions

THE PROJECT ASSUMPTIONS INCLUDE THE FOLLOWING:

     o    Andersen is not responsible in any way for the selection of the new
          ERP system J.D. Edwards.

     o    The Design phase will start on January 7, 2002 and will run
          approximately 12 weeks.

     o    The Design project will assume an operational enterprise-wide
          financial, distribution and demand planning system by August 1st 2002.

     o    Andersen and HIG will perform as project managers. HIG will provide a
          full-time project manager. Andersen's delivery of the Services and the
          fees charged are dependent on (i) the Client's timely and effective
          completion of the Client Responsibilities, (ii) the accuracy of the
          Assumptions, and (iii) timely

                                       23
<PAGE>

decisions and approvals by Client's management. Client shall be responsible for
any delays, additional costs, or other liabilities caused by or associated with
any deficiencies in the Client Responsibilities and Assumptions.

PROJECT ASSUMPTIONS SPECIFIC TO THE SCOPE ARE:

o    Interface modification plan and design will occur concurrently with the JDE
     application design and setup

o    The amount and complexity of reports will be further defined during the
     design phase. The standard JDE report writer will be utilized for all
     reports, except the 27 custom reports identified in the reporting scope.

OVERALL PROJECT ASSUMPTIONS:

o    Any scope changes upon commencement of the project will be documented
     through a change order process and agreed to by both Andersen and HIG.

o    This project is a significant endeavor for HIG. The participation and
     leadership of key management executives in this project is critical to its
     success.

o    HIG will adopt the new processes driven by the JDE software and will not
     engage in any major reengineering efforts.

o    We assume the HIG Steering Committee personnel will be available to make
     key decisions on a timely basis.

o    It is assumed that all key deliverables are signed off on a timely basis.
     Delays in confirmation of key sign-off deliverables may impact the project
     timeline.

o    Andersen and HIG will participate jointly in the project and will share
     responsibility to complete project tasks. We assume HIG will make
     available, on a timely basis, appropriate personnel to complete the
     required tasks.

o    HIG will manage other third-party vendor activities except those designated
     as sub contractors of Andersen. Negotiations and billings of all other
     third-party vendors will be the responsibility of HIG. Contract
     negotiations for all vendors can impact the overall project timing and
     deadlines.

PROJECT PLANNING AND MANAGEMENT ASSUMPTIONS:

o    We assume a work area for the project team will be in place including
     copier, analog lines, laser printer, telephones, and other necessary
     supplies. E-mail and shared directory (ies) will be available to the
     project team members to facilitate communication and information gathering
     and sharing.

o    We are assuming eight-hour work days, five days a week, for all local
     project team members. We are assuming a ten-hour work days, four days a
     week, for all traveling project team members. This may vary depending on
     the segment of the project.

o    HIG's is expected to play a significant role in the Change Management
     implementation; coordinating employee related decisions, as well as
     ultimately supporting overall training design and approach.

                                       24
<PAGE>

o    HIG will also provide business and technology resources as outlined in the
     Project Organization section of this proposal.

o    If additional staff level resources are needed to perform administrative
     and documentation tasks, the HIG and Andersen project management team will
     agree on the required time and costs.

TECHNICAL ENVIRONMENT

o    We assume all new JDE users will be provided with connectivity, technical
     infrastructure, and the appropriate personal computers and software to
     access their required modules by HIG and/or a third party vendor.

o    We assume that HIG will have an in-house database administrator and an
     in-house Unix or NT administrator.

o    We assume HIG is responsible for the JDE technical environment and that HIG
     technical personnel will have or be trained in the necessary technical
     skills.

o    We assume (18) system interfaces to JDE; if there are additional required
     interfaces, they will be identified during the design segment of the
     project. Andersen will assist with the design and management of the
     required interfaces, but programming efforts will be performed by HIG.

o    The testing of interfaced transactions through other systems will be the
     responsibility of HIG. The project team will ensure the proper transactions
     are generated and formatted to the other systems.

o    Upgrade to new versions of the JDE software or required hardware or systems
     software is the responsibility of HIG.

o    A HIG resource will be dedicated to the design and implementation of JDE
     security. Andersen will provide direction and review of the security
     tasks.

o    Required custom programmed reports (C, C++, SQL, and/or third party tools)
     will be determined during the design phase. Andersen will assist with the
     design and management of the custom reports, but programming efforts will
     be performed by HIG and/or JDE qualified third party programmers.

CONVERSION:

o    Andersen and HIG will jointly manage data conversion tasks. We will assist
     with the conversion approach and high-level design of conversion programs.

o    Andersen will assist with the design and management of the conversion
     programs.

o    Mapping tables between legacy systems and JDE will be required for all
     interfaces. HIG will be responsible for producing and maintaining all
     mapping tables.

o    Data will be converted manually where the cost of automation exceeds that
     of manual. HIG employees or temporary employees will do manual conversion.

Client will designate a competent employee or employees within its senior
management who will make all management decisions with respect to this
engagement. To the extent that the Services or Andersen's deliverables include
the design or implementation of hardware or software systems, Client's
management shall be responsible for making all management decisions, including
but not limited to, decisions

                                       25
<PAGE>

concerning systems to be evaluated and selected; the design of such systems;
controls and system procedures to be implemented; scope and timetable of system
implementation; and testing, training, and conversion plans. To the extent that
Andersen's deliverables include surveys, analyses, reports, evaluations,
recommendations or other management consulting services, Client's management
shall be responsible for all implementation decisions and for any future action
with respect to the matters addressed in the deliverables. In conjunction with
Client acceptance, Client's management will evaluate the adequacy and results of
the design and implementation of Andersen's deliverables.

Except as expressly agreed herein, Client shall be solely responsible for:

     o    determining the existence of, and complying with, any and all of the
          following that are applicable to electronic transactions, commerce,
          processes, or activities conducted over the Internet or any electronic
          network (collectively, "Transactions"): import/export controls;
          requirements to obtain and maintain licenses or other permissions;
          requirements to assess, pay, or withhold taxes, customs duties, or
          other charges; and other laws or regulations in all applicable
          jurisdictions;

     o    the security of its network and any related systems, including the
          security, privacy and confidentiality of any Client or third party
          data, intellectual property, or other information;

     o    establishing and determining the validity and enforceability of
          contract execution, performance and fulfillment processes, contracts,
          and any other documentation necessary for or used in conducting
          Transactions;

     o    any content contributed by Client or a third party in connection with
          this engagement; and

     o    any use by Client of the Deliverables (including, but not limited to:
          Client's posting to its website, or transmission over the Internet, of
          text, images, software, music, video, or other information; Client's
          sale or offering for sale of any goods and services via its website or
          otherwise over the Internet; and any linking, framing, or distribution
          of unsolicited electronic mail in connection with Client's website)
          which is illegal, unlawful, or harassing, which infringes another's
          intellectual property rights, or which otherwise constitutes network
          abuse ("Misuse").

Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.

Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as

                                       26
<PAGE>
necessary (a) to permit preparation of financial statements in conformity with
generally accepted accounting principles or any other criteria applicable to
such statements, and (b) to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. [In addition, Client represents and warrants to
Andersen that Client's management: (1) has acknowledged such responsibility in
writing to its audit committee or, if no such committee exists, then to its
board of directors or, if Client has neither an audit committee nor a board of
directors, then to the audit committee or board of directors, as applicable, of
any entity that controls Client or, alternatively, (2) will, upon execution,
provide a copy of this Statement of Work to the foregoing committee or board, as
applicable.] Client will determine the adequacy of its internal accounting
controls and financial reporting systems without relying on Andersen's services
or deliverables as the primary basis for making such determination. Finally,
Client acknowledges to Andersen that it is Client's responsibility to make such
disclosures with respect to this engagement that are required by applicable laws
and regulations.

Project Approach and Timeline

The overall approach for completing the work specified or described in this
arrangement based on the Design Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary JD Edwards specific business integration methodology, and
has been adapted to meet the objectives of this engagement. A detailed work plan
has been provided to reflect the level of effort and specific dates for all
relative tasks. This chart depicts a summary view of that work plan.

                        [HIG JDE IMPLEMENTATION CHART]

                                       27
<PAGE>

Fees & Expenses

We estimate the Design Phase will be completed on March 29, 2002 with an
Implementation Phase start date of April 1, 2002.

Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate.
Our fee estimate is $850,688, plus out of pocket expenses. Our fees are based on
an average rate of $189 per hour.

In addition to these fees, we estimate that third party resources required for
the development effort and the Demand Planning design, integration, and
installation effort for the Design phase will be $259,000, plus out of pocket
expenses. We will subcontract and manage these individuals directly and their
fees will be included in our billing statements to you.

Further to these fees, J.D. Edwards Resources for the CNC implementation and
configuration will be required. It is our understanding the HIG will contract
directly with J. D. Edwards and J. D. Edwards will bill HIG directly for those
services.

This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$369,896 at the beginning of the project (January 15, 2002) then in accordance
with the following billing schedule:

         February 15, 2002        $369,896 + actual expenses incurred in January
         March 15, 2002           $369,896 + actual expense incurred in February
         April 15, 2002           actual expenses incurred in March

We will reconcile the actual fee amounts incurred for each month (versus that
months' pre-billing) and any adjustments be reflected in the next months bill.

Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.

Change Order Process

During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as

                                       28
<PAGE>

"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or advise Andersen not to perform the Changes, in which event Andersen
shall proceed with the original Services. The foregoing notwithstanding, if
Andersen, at the written request of Client, performs work that is not covered by
this Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for which Client shall compensate Andersen at the same rates
as those described under Fees & Expenses above or, in the case of a fixed fee
engagement, at the rates used in calculating such fixed fee.

We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.

Very truly yours,

ARTHUR ANDERSEN LLP

By:      /s/ STEPHEN ENGEL
         ----------------------------------
         Stephen Engel

Attachments:    Business Consulting Standard Business Terms
                Business Consulting Statement of Work Standard Change Order Form

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By:      /s/ [ILLEGIBLE]
         ----------------------------------

Title:   Sr. Vice President
         ----------------------------------

Date:    1/23/02
         ----------------------------------

                                      29
<PAGE>

BUSINESS CONSULTING
STANDARD BUSINESS TERMS

These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described under
Change Order Process in the Statement of Work) only in writing when signed by
both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.

SECTION 1. FEES, EXPENSES

Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.

SECTION 2. CLIENT RESPONSIBILITIES

As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.

SECTION 3. CONFIDENTIALITY

With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.

SECTION 4. DELIVERABLES

Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.

SECTION 5. ACCEPTANCE

Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.

SECTION 6. WARRANTY

(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.

(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.

(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE,

                                       1
<PAGE>
AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE.

SECTION 7. RISK ALLOCATION

(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity. Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.

(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.

(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.

(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.

(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.

SECTION 8. PERSONNEL

(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services; however, unless Client
agrees otherwise, Andersen shall assign the individuals identified in the
Statement of Work to perform the Services, unless such individuals are no longer
employed by or are unable to perform services for Andersen.

(b) During the term of this Agreement, and for a period of twelve (12) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder.

SECTION 9. TERMINATION

(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.

(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.

(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged
breach internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.

SECTION 10. GENERAL

(a) Neither party shall use the other party's name, trademarks, service
marks, logos, trade names and/or branding without such party's prior written
consent.

(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.

(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.

(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.

(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.

(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all other
terms and provisions shall remain in full force and effect.

(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.

(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.

(i) The laws of the State of Texas shall govern this Agreement.

(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.

                                       2

<PAGE>
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER
                    ------

[date]

[Client contact name]
[complete legal name of Client entity]
[Client address]

Dear [Client contact name]:

This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated
_________________, 200__, including any prior Change Order(s) or amendments
thereto (the "Statement of Work"). This Change Order constitutes the entire
understanding and agreement between Client and Andersen with respect to such
changes, supersedes all prior oral and written communications with respect to
such changes (including, but not limited to, written change requests), and may
be amended, modified or changed only in writing when signed by both parties. The
section(s) of the Statement of Work set forth below is/are hereby amended,
effective as of the date first written above, by adding at the conclusion of the
respective section(s) the following text:

Project Scope and Objectives

Andersen Services and Responsibilities

Deliverables

Acceptance

Client Responsibilities

Project Assumptions

                                       1
<PAGE>
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER 1

January 24, 2002

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Ken:

This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and Home Interiors and Gifts, Inc. ("HIG") ("Client") dated January
10, 2002 including any prior Change Order(s) or amendments thereto (the
"Statement of Work"). This Change Order constitutes the entire understanding and
agreement between Client and Andersen with respect to such changes, supersedes
all prior oral and written communications with respect to such changes
(including, but not limited to, written change requests), and may be amended,
modified or changed only in writing when signed by both parties. The section(s)
of the Statement of Work set forth below is/are hereby amended, effective as of
the date first written above, by adding at the conclusion of the respective
section(s) the following text:

Project Scope and Objectives

HIG has asked Andersen to assist in facilitating and documenting the business
requirements for the internal development effort on the 'Commissions-Sales
Compensation system. Andersen will work with key individuals to identify
workshop participants, dates and deliverables.

Andersen Services and Responsibilities

The project services and responsibilities will include the following:

Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:

DESIGN WORKSHOPS -- These sessions will be focused on developing the process
design for the commissions and compensation management. This will include
defining and documenting the As-Is process, defining and documenting the To-Be
processes, completing a process and value analysis (PAVA) and defining the roles
that are responsible, accountable, consulted, or informed within the process
design (RACI).

<PAGE>

Additionally, report requirements will be identified, user lists for the
application defined and a schematic diagram of the application interfaces will
also be documented.

The scope will not include the facilitation or the identifications of the
requirements specific to technical specifications (hardware, software,
connectivity, code, etc.), data conversions, interfaces, project/resource
planning, testing, training or risk management.

Key activities for this of work includes:

     -    Identification of key work shop participants

     -    Scheduling of the Design Workshops

     -    Facilitation of the Design Workshops

     -    Documentation of the outcome (Business Requirements) from the Design
          Workshops

     -    Final compilation and review of documented Business Requirements

     -    Identification of reporting requirements

     -    Compilation of the application user list

     -    Evaluation of the application design and interfaces

     -    Review development methodology and timeline

Deliverables

     -    As-is process flow diagrams

     -    To-be process flow diagrams

     -    Detail Business Requirements

     -    Report Matrix

     -    Application user list

     -    Commissions system application interface schematic

Client Responsibilities

No Changes from the original Statement of Work

Project Assumptions

No Changes from the original Statement of Work

Project Approach and Timeline

The overall approach for completing the work specified or described in this
arrangement based on the Design Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary business integration methodology, and has been adapted to
meet the objectives of this engagement. The anticipated time frame is 2 1/2
weeks or 9 ten-hour days. We anticipate that it will require 7 days to complete
the facilitation and documentation sessions and 2 days to compile final results
and review findings with management and the IT development staff.

<PAGE>

Staffing

     o    Steve Bellas will complete the tasks identified above with management
          oversight from the existing Project Management team currently in place
          on the ERP project

Fees & Expenses

Andersen's fees for the scope of Services described in this Change Order will be
based upon actual time and materials at a substantially discounted rate. Our fee
estimate is $20,160, plus out of pocket expenses. Our fees are based on an
average rate of $224 per hour.

This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Change Order. Andersen will bill Client $20,160 at
the beginning of the project, January 28, 2002 and then February 28, 2002 for
any expenses incurred.

We will reconcile the actual fee amounts incurred for the project period (versus
the pre-billing) and any adjustments be reflected in the final expense billing.

Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.

Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.

Very truly yours,

ARTHUR ANDERSEN LLP

By: /s/ STEPHEN ENGEL
    ---------------------------
    Stephen Engel

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By: /s/ [ILLEGIBLE]
    ---------------------------

Title: Sr. V. President and CFO
       ------------------------

Date: February 15, 2002
      -------------------------
<PAGE>

                                [ANDERSEN LOGO]

BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER 2

February 14, 2002

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Ken:

This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and Home Interiors and Gifts, Inc. ("HIG") dated January 10, 2002,
including any prior Change Order(s) or amendments thereto (the "Statement of
Work"). This Change Order constitutes the entire understanding and agreement
between HIG and Andersen with respect to such changes, supersedes all prior oral
and written communications with respect to such changes (including, but not
limited to, written change requests), and may be amended, modified or changed
only in writing when signed by both parties. In the event of a dispute between
the provisions of this Change Order and the Standard Business Terms, the
provisions of the Standard Business terms prevail. The section(s) of the
Statement of Work set forth below is/are hereby amended, effective as of the
date first written above, by adding at the conclusion of the respective
section(s) the following text:

Project Scope and Objectives

The scope of this project has been expanded to include the implementation and
configuration of Vertex Quantum(TM) for Sales and Use Tax (Vertex) to enhance
sales and use tax compliance for HIG's sell side process. During Phase 1, we
will customize a project workplan to meet HIG's tax compliance needs for order
entry, billing and accounts receivable. The project workplan will be broken down
into separate and distinct phases to address the changing systems environment,
prevent any delays to the existing JDE system implementation plan, and assist
with the integration of Vertex to address HIG's sales and use tax compliance
requirements.

Andersen Services and Responsibilities

In coordination with HIG's Tax Executive Lead, Andersen will provide overall
project management and guidance in this Vertex system implementation solution,
and we will actively participate in the detailed execution of the project plan.
Andersen will work jointly and cooperatively with HIG management and staff
throughout this initiative. The project's success will depend upon HIG's
participation in key project decisions including validation of assumptions that
impact the agreed-upon sales and use tax compliance solution.

<PAGE>

Acceptance

Andersen will request HIG to complete a Vertex Tax Decision Maker(TM) (TDM)
sign-off prior to delivery of the configured Vertex system near the completion
of the Implementation phase. Delays in the acceptance process may increase the
Vertex project timeline. In addition, we will complete a Design Sign-off Matrix
indicating completion of documentation deliverables during interval stages of
the project. Each deliverable will require approvals from HIG's Tax Functional
Resource, Tax Executive Lead and/or the Project Manager in order to proceed with
the project workplan.

HIG Responsibilities

HIG's responsibilities of this project have been expanded to include a part-time
tax functional resource to determine HIG's sales and use tax compliance policy
and assist with the configuration and testing of the Vertex solution. We have
estimated approximately 525 combined hours for a HIG Tax Resources (Functional
Resource and Tax Executive Lead) as part of the overall tax implementation team.
In addition, any design and implementation of tax modifications will be a shared
responsibility between the Andersen, HIG Tax, HIG Information Technology (IT)
personnel and JDE consultants. Requirements for tax modifications and testing
will be provided by the tax team comprised of HIG and Andersen resources, and
HIG IT and JDE consultants will provide all development work. The specific
responsibilities for the HIG Tax and Information Technology (IT) Resources are
as follows:

HIG Tax Resources

o    The Tax Functional and Tax Executive Lead is responsible for assisting the
     tax core team members through the design, implementation and rollout phases
     to support HIG's sales and use tax functional requirements.
     Responsibilities of the Tax Resource includes the following:
     -    Provide documentation of sales and use tax decision matrices for
          products sold by HIG and assume responsibility for these tax
          determinations
     -    Actively participate, when applicable, with the Vertex implementation
          team in key decisions that impact the overall JDE project
          implementation
     -    Assist the Vertex implementation team in effectively translating sales
          and use tax functional requirements into configuration options and
          solutions
     -    Demonstrate and encourage a willingness to adapt and simplify
          procedures, policies, and business rules to facilitate working within
          the bounds of the Vertex sales and use tax system
     -    Act as a liaison between the HIG Tax Department and the Vertex
          implementation team to ensure transaction tax requirements for billing
          are included in the overall system design
     -    Review and understands Vertex sales and use tax compliance reports
     -    Assist in developing system test scripts to simulate billing
          transactions, tax determinations and verify actual with expected
          results
     -    Assist in execution of integration testing
     -    Participate in Vertex system end-user training
     -    Assume responsibility for Vertex's Tax Decision Maker(TM)(TDM)
          maintenance during system roll out support
     -    Sign off on the Vertex TDM taxability decision content prior to
          delivery of the configured Vertex system, as well as each deliverable
          during the project

<PAGE>

HIG Information Technology (IT) Resources

o    Andersen will coordinate with a IT resource to execute the following tasks:
     -    Installation of Vertex Sales and Use Tax Quantum software to the JDE
          server (estimated 8 hours of HIG's DBA time)
          /    Create empty databases
          /    Create directory structure for rate and Geocoder files as well as
               Utility Kits
          /    Assign user clearances to the register database
          /    Extract the rate and Geocoder files
          /    Populate and update databases
          /    Installing and extract Utility Kits
     -    Provide support in resolving potential troubleshooting during the
          testing phase, "tuning" the Vertex databases and interface to the IDE
          Sales Order and Address Book. (estimated 8 to 16 hours of HIG's DBA
          time)

Project Assumptions

The project assumptions will be amended for the following:

Business Procedures and Training

     -    We assume that HIG's Tax department will perform the sales and use tax
          compliance process after go-live.
     -    We assume HIG will provide access to individuals responsible for
          implementation and maintenance of the JDE system and applications to
          facilitate the Vertex integration project.
     -    We understand Conference Room Pilot (CRP) will be underway to validate
          design and configuration of business procedures within the JDE system
          configuration. Sales and use tax policies specific to HIG will need to
          be configured within the Vertex tax software. It may be necessary for
          HIG to modify certain business procedures or JDE system configuration
          to accommodate data requirements of the Vertex tax software.
     -    Sales and use tax requirements are based on current information
          obtained from HIG as of January 29, 2002. Therefore, any future
          changes to the tax requirement that may be have a significant or
          material impact to the workplan or timeline may require additional
          Andersen hours to complete the project. If any significant changes are
          discovered, we will communicate the issue immediately to HIG's Tax
          Functional Resource and Tax Executive Lead.
     -    The JDE Address Book will need to be validated in order to assign
          Vertex GeoCodes to each customer address.
     -    The following are special tax requirements within JDE specific to HIG
          for which Andersen and the HIG Tax Department will provide the process
          design:

          /    Posting of tax liability from Sales Order to a state-specific sub
               ledger account in the general ledger. Currently, SAR 3526702 will
               need to be resolved in order to utilize this feature in JDE.
          /    The Internet Order Entry (IOE) module will process sales tax
               quotes based on an average rate for be each state. The average
               tax rates will maintained by HIG.
          /    Based on HIG's agreements with taxing jurisdictions, sales
               transaction for Hostess, Bonus Buys and Wholesale will require
               specific requirements for either tax base or tax types (sales or
               use tax). The

<PAGE>

               modification will need to occur within the Pre-Processing module
               prior to the Sales Order interface with Vertex.
          /    The daily batch process will be designed to complete Vertex tax
               processing within a three hour time frame.

Project Approach

In addition to the completion of the ERP implementation-planning project (Phase
1), we understand that the project approach will be amended for the following as
it relates to the Vertex integration with JDE workflow modules for the remaining
Phases:

     Phase 2 -- Design -- This phase is specifically designed to initiate the
     project and begin identifying the business requirements for the
     configuration of the Vertex software. Key activities related to integration
     of a sales and use tax compliance solution for this phase of work are:

          1)   Vertex Implementation Project Team roles and responsibilities
               definition
          2)   High-level review of current processes and requirements
          3)   High-level review of system functionality and capabilities
          4)   Project planning
          5)   Change planning
          6)   Vertex Quantum(TM) installation

     Key deliverables and responsibilities assigned for this phase of work, as
     they relate to the integration of Vertex Quantum(TM) for Sales and Use Tax,
     are:

          1)   Review process maps detailing current design of IDE procurement
               functionality -- Andersen
          2)   Documentation of sales and use tax reporting requirements -- HIG
               and Andersen
          3)   Documentation of systems hardware and software
               capabilities/requirements -- Andersen
          4)   High-level sales and use tax requirements -- HIG and Andersen
               -    Functional
               -    Interfaces between JDE Sales Order, Address Book and Vertex
          5)   Detailed workplan and project timeline for Vertex integration --
               Andersen

    As part of Phase 2, we will also focus on designing the Vertex system
    configuration based on the business requirements, the "to-be" processes and
    the testing of those designs. It is also focused on the requirements
    specific to any necessary data conversions, Vertex interface specifications
    and/or modifications to pass critical data elements necessary to sales and
    use taxability determinations from IDE Sales Order and Address Book. Key
    activities related to integration of a sales and use tax compliance solution
    for this phase of work are:

          1)   Document data mapping requirements between IDE and Vertex
               software
          2)   Design and document JDE/Vertex system design
          3)   Design revised "to-be" key business procedures with use tax
               requirements, if necessary
          4)   Document tax interface requirements between Vertex and IDE Sales
               Order / Address Book
          5)   Conference Room Pilot (CRP) Testing (Modular & Integrated) with
               emphasis on sales and use tax compliance

<PAGE>

          6)   Finalize Vertex configuration and design specifications

Key deliverables and responsibilities assigned for this phase of work, as they
relate to the integration of Vertex Quantum(TM) for Sales and Use Tax, are
listed below:

          1)   Process maps with sales and use tax compliance process overlay --
               Andersen
          2)   HIG sales and use tax decision hierarchy and matrices for items
               procured -- HIG
          3)   Data mapping documentation for interface between Vertex and JDE
               Sales Order/Address Book -- HIG and Andersen
          4)   HIG sales and use tax requirements and Vertex standard report
               definition -- HIG and Andersen
          5)   Final CRP test scenarios; CRP test feedback and results -- HIG
               and Andersen
          6)   Final design and configuration documentation for Vertex
               integration -- Andersen

PHASE 3 -- IMPLEMENTATION -- the purpose of this phases is to develop, implement
and finalize interfaces between Vertex and JDE Sales Order/Address Book,
modifications, code reports and forms, and set-up security. Additionally, in
this phase the team develops the conversion process including any coding,
conducts all system and acceptance testing and develops and conducts all
end-user training. Finally, the team prepares for and conducts the actual cut
over to the new system. After "go-live" a portion of the Vertex integration team
remains intact to provide post conversion support, as necessary, generally 2 to
3 days. Key activities related to integration of a sales and use tax compliance
solution for this phase of work are listed below:

          1)   Finalize set-up and configuration for Vertex Quantum(TM) TDM
          2)   Finalize Vertex tax system report creation procedures
          3)   Finalize interfaces between Vertex and JDE Sales Order/Address
               Book, and data flow documentation
          4)   Finalize end-user training documentation and conduct training for
               Tax Department
          5)   Modular and integrated system & acceptance tests
          6)   Prepare for Vertex system "go-live"
          7)   Post conversion support, if necessary

Key deliverables and responsibilities assigned for this phase of work, as they
relate to the integration of Vertex Quantum(TM) for Sales and Use Tax, are as
follows:

          1)   TDM configuration sign-off -- HIG
          2)   Vertex TDM file configured for sales and use tax policy
               requirements related to the sell side process by HIG -- Andersen
               and HIG
          3)   Documentation of configuration for Vertex software -- Andersen
          4)   Documentation of final Vertex system interfaces and process
               design -- Andersen
          5)   Final user training and support plan -- HIG and Andersen
          6)   Documentation of end-to-end testing of billing transactions and
               data capture to transaction tax reports and GL tax liability
               accounts -- HIG and Andersen
          7)   Final Vertex training materials -- Andersen
          8)   System test data and acceptance test results -- HIG and Andersen
          9)   Operational Vertex and JDE System -- HIG and Andersen
          10)  Documentation of post "go-live" troubleshooting -- Andersen
          11)  End User Support -- HIG

<PAGE>

Out of Scope

          1)   Integrating Vertex to any host system other than the JDE Sales
               Order and Address Book
          2)   Implementation and support of tax processes in the Internet Order
               Entry (IOE) module
          3)   Implementation and support of tax processes in the Pre-Processing
               module
          4)   Taxability research or tax planning
          5)   Assigning categorization codes to the item master
          6)   Address clean-up for utilization of Vertex GeoCodes in the
               Address Book
          7)   Additional consulting services that are not specifically defined
               in this proposal
          8)   Analysis, design, implementation and support of tax processes
               that are not defined within the scope of this project
          9)   Services of attorneys
          10)  Ongoing support of any new solution implemented as a result of
               this project
          11)  Optimization of transaction tax functionality for additional
               systems or feeder systems not defined within the scope of this
               project (e.g., Financial, Billing, or Procurement systems)
          12)  Additional necessary application, tools or system upgrade costs
               as recommended by software vendors
          13)  Additional system hardware costs to support and maintain Vertex
               or other third-party software applications
          14)  Implementation of a data repository or data warehouse, other than
               the Vertex register database, to contain transaction data used in
               tax compliance or in audit defense
          15)  Due diligence of any documentation to provide tax advice, review
               of contract and/or agreements for internal use of arrangements
               with external parties

Staffing

The tax team members consist of the following:

o   HIG Tax Executive Lead -- Leonard Robertson
o   HIG Tax Functional Resource -- Linda Lujan
o   HIG IT Resource -- TBD
o   Engagement Director -- Wilma Murphree
o   Andersen Project Manager -- Leo Fox
o   Andersen Process & Technology Consultant -- Sean Griffin
o   Andersen Subject Matter Advisor -- Coleman Nunn
o   Andersen staff -- TBD

Fees & Expenses

Our fee for the scope of Services described in this Work Order for the design,
configuration, testing and training for the Vertex Quantum(TM) for Sales and Use
Tax Application is based on an estimate of 575 hours required to do this work.
The estimated fee for this work is $103,500, plus out-of-pocket expenses.

<PAGE>

Andersen will bill the fees and expenses as incurred on a monthly basis. The
fees and expenses will be added to the overall billing schedule stated in the
original Statement of Work.

Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.

Very truly yours,

ARTHUR ANDERSEN LLP

By: /s/ STEPHEN ENGEL
    ----------------------------------
    Stephen Engel

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By: /s/ KENNETH CICHOCKI
    ----------------------------------

Title: Sr. Vice President
       -------------------------------

Date: 3/07/02
      --------------------------------

<PAGE>
                        [ARTHUR ANDERSEN LLP LETTERHEAD]

BUSINESS CONSULTING
STATEMENT OF WORK

April 15, 2002

Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007

Dear Mr. Cichocki:

This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J. D. Edwards Financial, Distribution and Demand Planning
software. ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").

Project Scope and Objectives

In addition to the ERP implementation-planning project (Phase I) and the JDE
Design Phase (Phase II), We understand that the objective for the next phase
(Build-Phase III) is for Andersen to assist HIG in the development, testing and
roll-out of the ERP system, using as a foundation, the J.D. Edwards (JDE) system
solution. Andersen will provide consulting and project management services for
the ERP system 'Build Phase' project.

The scope of this project is to configure and test the following JDE modules for
the production (live) environment:

o    General Ledger

o    Financial Planning and Budgeting

o    Financial Reporting

o    Multi-Currency

o    Address Book

o    Accounts Receivable

o    Accounts Payable

<PAGE>

o    Supplier Management

o    Procurement

o    Inventory Management

o    Demand Planning

o    Requirements Planning -- MPS

o    Forecasting

o    Product Data Management -- Bill of Materials

o    Sales Order Management

o    Advanced Pricing

o    Standard Workflow Processes for the above modules

The JDE Modules (or module components) that are not included in the scope for
the Build effort include:

o    Electronic Burst & Bind

o    Cash Basis Accounting

o    Time Accounting

o    Fixed Assets

o    Multi-Site Consolidation

o    Basic Equipment Management

o    Requirements Planning -- MRP, DRP

o    Enterprise Facility Planning

o    Advanced Forecasting

o    Quality Management

o    Advanced Stock Valuation

o    Bulk Stock Management

o    Advanced Warehouse Management

o    Work Orders/Service Billing/Work Order Management

o    Transportation Management

o    Job Costing

o    Change Management

o    Contract Billing/Contract Management/Subcontract Management

o    Property Management

o    Call Management

o    Payroll Processing/Time Accounting

o    Human Resources Management/human Resources Benefits

o    Bulk Stock Management

o    ECS Sales Order Management

o    Load & Delivery Management

o    Manufacturing Suite

                                       2
<PAGE>

The processes that are considered in-scope include:

CUSTOMER & SALES

o    New Account Setup

     -    Enter and Validate New Displayer Accounts

     -    Manage Displayer Accounts

o    Determine Item Pricing

     -    Utilize and maintain complex item price lists

o    Develop and Setup Pricing and Promotion Programs

     -    Displayer group discounts

     -    Item group discounts

     -    Develop and maintain ordinal order promotions (1st order, 2nd order)

     -    Free goods

     -    Develop and maintain contest promotions

     -    Develop and maintain "nuggets" or certificate promotions

     -    Freight pricing

     -    Bonus buys

     -    Kit pricing

     -    Complex Advanced Pricing

     -    Sample Sales

o    Enter and Process Merchandise Orders

     -    Enter merchandise order

     -    Validate system processing capability and speed (overnight process)

     -    Process merchandise orders

          -    Processing with 'Ship-with' program

          -    Validate order criteria (min $, credit, account status)

          -    Apply super bubble

          -    Process direct ship order 'Home 2 Home'

          -    Process Canadian display order

          -    Process Mexico order

          -    Determine tax on order

     -    Process invoices for merchandise orders

     -    Apply promotional discounts

     -    Consider web based order process during design of associated
          enhancements

                                       3
<PAGE>

o    Enter and Process Service Orders

o    Order Hold Processing

o    Enter and Process Credit Invoices

o    Enter and Process Manual Orders

o    Create Customs Documents -- via interface to systems

o    Periodic Processing

     -    Close Accounts

     -    Freight Route Changes

     -    Credit Limit Review

     -    Print Statements

o    Extract Data for Other Systems (i.e. Commissions, Integration Hub)

SUPPLY CHAIN

o    Demand Planning

     -    Product Stratification

     -    Develop Sales Forecasting Process

o    Develop New Products

     -    Initiate Set-up of New Products

o    Procure Items

     -    MPS Planning Parameters

     -    Run MPS to create Purchase Orders

     -    Procure items according to forecast needs, and MPS messages

     -    Manual Purchase Order Entry

o    Supplier Management

o    Procure MRO/Stores Supplies

     -    Process requisitions

     -    Generate/Maintain Purchase Orders according to set Min/Max levels

     -    Select and Set up Vendors

                                       4
<PAGE>

o    Reporting and Inquiry

o    Inventory Management

     -    Inventory Adjustments

     -    Vendor Returns

o    Master Data

     -    Maintain Item Master Information

     -    Maintain Vendor Information

o    Item Maintenance

     -    Maintain Item Availability

     -    Maintain Base Wholesale Prices in Both VSD & CAD

     -    Maintain Retail Price

o    Transportation -- support routing assignments

o    Sales and Operations Planning

Finance

o    Budgeting & Forecasting

     -    Develop and Consolidate Budget

     -    Develop and Consolidate Forecast

     -    Support for Treasury Management

o    General Ledger

     -    Develop Organizational Entity Structure/Departmental Structure

     -    Develop Chart of Accounts/Reporting Hierarchies

     -    Process Manual Journals

     -    Process Interfaced T/B Journals

     -    Process Intercompany Transactions

     -    Process Allocations

     -    Process Multi-Currency - Translation/Revaluation (US, Canada, &
          Mexico)

     -    Fiscal Period Processing

     -    Period End Close

o    Reporting and Consolidation

     -    Consolidate and Publish Financial Reports

     -    System Design to support Regulatory Reporting - SEC, GAAP & IRS

                                       5
<PAGE>

o    Sales Accounting, Credit, and Collections

     -    Credit policies and practices -- Help Loans and NSF processing

     -    Collections Management -- Standard Workflow & Dunning Letters

     -    Cash Receipt/Application/Lockbox

     -    Tax Processing

     -    Multi-currency Processing (US, Canada, & Mexico)

     -    Fiscal Period Processing/Reporting

o    Payment Processing

     -    Cash Payments

     -    Non Cash Payments

     -    Process NSF Payments

o    Accounts Payable

     -    Maintain Vendor Information

     -    Invoice Processing (Manual, 3-way Match, 2-way Match)

     -    Payment Processing (Checks, Wires, ACH)

     -    Displayer Payments (1099's & Commissions)

     -    Tax Processing -- Vertex

     -    Multi-currency Processing (US, & Canada)

     -    Fiscal Period Processing/Reporting

The following summary highlights the 105 key reports by categories that are
included in the scope for design and development:

o    Custom, Standard, and Enhanced Standard J. D. Edwards Reports -- 98

o    Requires Custom non-J. D. Edwards Solution -- 7

The scope includes the detail specifications, development and implementation of
the following modifications:

o    Financial

     -    EN-JDE-FN-X-001 -- Enter quantity for non-cash payments and auto
          calculate value of payment

     -    EN-JDE-FN-X-003 -- Auto update credit limit based on WMS for past 12
          periods

     -    EN-JDE-FN-X-005 -- Remove Credit Hold

o    Customer and Sales

     -    EN-JDE-CS-X-001 -- Default value for customer master (including credit
          limit)

     -    EN-JDE-CS-X-002 -- NCA: Address verification (Address Mailer, SSN
          duplicate verification, transportation routes)

                                       6
<PAGE>

     -    EN-JDE-CS-X-003 -- Counter of number of orders (free goods and
          freight)

     -    EN-JDE-CS-X-004 -- Invoice (comments, reason for non shipment, group
          sales by category, Canada)

     -    EN-JDE-CS-X-005 -- Sample sales for displayers / directors

     -    EN-JDE-CS-X-006 -- Qualified groups for promotions

     -    EN-JDE-CS-X-007 -- Vertex interface, retail price, state adjustment,
          freight tax for Canada

     -    EN-JDE-CS-X-008 -- Auto-close inactive accounts

     -    EN-JDE-CS-X-009 -- WMS Enhancement

     -    EN-JDE-CS-X-010 -- Auto Credit & Debit

o    Supply Chain

     -    EN-JDE-SC-X-001 -- Transportation routes

The scope includes the final design, development, testing and implementation of
each of the following AUTOMATED conversions:

o    Master Data Conversion -- Finance

     -    CN-DAI-JDE-X-1-001 -- Customer Master

     -    CN-DAI-JDE-X-1-002 -- Vendor Master

     -    CN-DAI-JDE-X-1-003 -- Bank Information

o    Historical Data Conversion -- Finance

     -    CN-DAI-JDE-X-1-004 -- AR Open Invoices

     -    CN-DAI-JDE-X-1-005 -- AR Log

o    Master Data Conversion -- Supply Chain

     -    CN-EXE-JDE-X-1-001 -- Inventory Balance on-hand

o    Historical Data Conversion -- Supply Chain

     -    CN-DWH-DP-X-1-001 -- Sales History (DP)

o    WMS Data Conversion -- Supply Chain

     -    CN-DWH-JDE-X-1-001 -- WMS Conversion

The scope includes the final design and implementation of each of the following
MANUAL conversions:

o    Master Data Conversion -- Finance

     -    Chart of Accounts -- Excel to JDE

o    Historical Data Conversion -- Finance

     -    G/L Balances -- Actual 2001 and 2002; Budget 2003

                                       7
<PAGE>

     -    AR/AP Multi-currency conversion -- Payments and receipts to/from
          Canadian Displayers from USD to CAN -- DAI to JDE (subject to
          Going-Live with Canada in September)

o    Master Data Conversion -- Supply Chain

     -    Inventory Items -- DAI to JDE

     -    Transportation Routes -- DAI to JDE

o    Historical Data Conversion -- Supply Chain

     -    Open Purchase Orders -- DAI to JDE

o    Master Data Conversion -- Customer and Sales

     -    Pricing and Promotions -- Excel to JDE

     -    Preferences for Item Restrictions -- DAI to JDE

o    Historical Data Conversion -- Customer and Sales

     -    Open Sales Orders -- DAT to JDE

     -    Help Loans -- DAI to JDE

The scope includes the detail specifications, development, testing and
implementation of the following AUTOMATED interfaces:

o    Finance

     1)   IN-IOE-JDE-X-N-002 - Payment Extract

     2)   IN-JDE-FOR-X-X-001 - AP Checks to Forms Server

     3)   IN-JDE-BK1-X-X-001 - Positive Pay

     4)   IN-JDE-BK1-X-X-002 - ACH Payment

     5)   IN-BK1-JDE-X-X-001 - Bank Reconciliation Tape

     6)   IN-CMS-JDE-X-X-002 - Commissions Check

     7)   IN-FRG-JDE-X-X-001 - Freight Invoices Upload

     8)   IN-JDE-IOE-X-N-010 - AR Aging

     9)   IN-JDE-IVR-X-W-001 - JDE-IVR Extract

     10)  IN-IOE-JDE-X-N-003 - Redemption of Certificate

     11)  IN-JDE-IOE-X-N-011 - Statement

o    Supply Chain

     12)  IN-JDE-EXE-X-D-004 - PO Header Detail

     13)  IN-EXE-JDE-X-D-001 - PO Receipts

     14)  IN-EXE-JDE-X-D-002 - Mark-outs

     15)  IN-EXE-JDE-X-D-003 - Inventory Adjustments

                                       8
<PAGE>

     16)  IN-EXE-JDE-X-D-004 - Balance on Hand

     17)  IN-JDE-DP-X-D-001 - Items, locations Sales History

     18)  IN-DP-JDE-X-D-001 - Forecast info returned

     19)  IN-JDE-EXE-X-D-003 - Vendor

     20)  IN-JDE-EXE-X-D-002 - Item Header/Detail

     21)  IN-JDE-PR-X-D-001 - Sales Order Header (Shipping Documentation)

     22)  IN-JDE-PR-X-D-002 - Invoice Detail (Shipping Documentation)

     23)  IN-JDE-CAN-X-D-001 - Export Ship File

     24)  IN-EXE-JDE-X-D-006 - Item Dimension

o    Customer and Sales

     25)  IN-IOE-JDE-X-N-001 - Order Extract

     26)  IN-SCN-JDE-X-D-001 - Scanner

     27)  IN-JDE-EXE-X-D-005 - Sales Order Header

     28)  IN-EXE-JDE-X-D-005 - Shipping Header Detail

     29)  IN-JDE-INV-X-X-001 - Invoice Mailing

     30)  IN-JDE-IOE-X-N-001 - Displayer Upload

     31)  IN-JDE-IOE-X-N-002 - Invoice Upload

     32)  IN-JDE-IOE-X-N-004 - Item Upload

     33)  IN-JDE-IOE-X-H-007 - Order Status Upload

     34)  IN-JDE-IOE-X-N-003 - Account Detail Upload

     35)  IN-JDE-IOE-X-H-006 - Item Status Upload

     36)  IN-JDE-EXE-X-D-001 - Customer

     37)  IN-JDE-IOE-X-X-008 - Displayer Purge

     38)  IN-JDE-IOE-X-N-005 - Item Assembly

     39)  IN-JDE-VTX-X-X-001 - Tax Calculation

     40)  IN-VTX-JDE-X-X-001 - Tax Amount and Base

     41)  IN-JDE-INT-X-X-001 - Customer Address

     42)  IN-JDE-QUA-X-X-001 - Customer Address

o    Commissions

     43)  IN-JDE-COM-X-X-001 - New Address Book accounts

     44)  IN-COM-JDE-X-X-001 - Compensation Hierarchy Changes

     45)  IN-JDE-COM-X-X-002 - Address Book Changes

     46)  IN-JDE-COM-X-X-003 - Sales outbound

     47)  IN-COM-JDE-X-X-002 - Commissions WMS information

                                       9
<PAGE>

o    Integration Hub

     48)  IN-JDE-IH-X-W-001 - Customer Master - DW

     49)  IN-JDE-IH-X-W-002 - Commission Data - DW

     50)  IN-JDE-IH-X-W-003 - AR Master - DW

     51)  IN-JDE-IH-X-W-004 - AR Transactions - DW

     52)  IN-JDE-IH-X-W-005 - Item History - DW

     53)  IN-JDE-IH-X-W-006 - Item Master - DW

     54)  IN-JDE-IH-X-W-007 - Item Quantity - DW

     55)  IN-JDE-IH-X-W-008 - Item Attribute - DW

     56)  IN-JDE-IH-X-D-009 - Purchase Order Header - DW

     57)  IN-JDE-IH-X-D-010 - Purchase Order Detail - DW

     58)  IN-JDE-IH-X-W-011 - Vendor Master - DW

     59)  IN-JDE-IH-X-W-012 - Sales Order Header - DW

     60)  IN-JDE-IH-X-W-013 - Sales Order Detail - DW

     61)  IN-JDE-IH-X-D-014 - Purchase Order Message - DW

     62)  IN-JDE-IH-X-W-015 - Purchase Order Receipt - DW

     63)  IN-JDE-IH-X-W-016 - Sales Order Message - DW

     64)  IN-JDE-IH-X-W-017 - Carrier Contact - DW

     65)  IN-JDE-IH-X-D-018 - Fulfillment - DW

     66)  IN-JDE-IH-X-D-019 - Bill of Lading - DW

The scope includes the detail specifications, development, testing and
implementation of the following MANUAL interfaces:

     67)  IN-HR-JDE-X-X-001 - HR - Manual

     68)  IN-FA-JDE-X-X-001 - FAS - Manual

     69)  IN-BUD-JDE-X-X-001 - PC Budget Upload - Manual

     70)  IN-45-JDE-X-X-001 - 4th Shift - Manual

     71)  IN-FOX-JDE-X-X-001 - Fox Pro - Manual

The scope of this contract does not include the design and/or configuration of
any third party tax programs; the implementation of Vertex is covered in Change
Order #2 dated January 30, 2002, as part of the Phase II Design 'Statement of
Work' dated January 10, 2002.

Geographically the scope includes:

o    HIG Headquarters in Carrollton, Texas

o    HIG Distribution Center in Carrollton, Texas

                                       10
<PAGE>

Andersen Services and Responsibilities

The project services and responsibilities will include the following:

Andersen will work with the HIG and other 3rd party contractor personnel to
assist in the following activities by leveraging our experience, tool sets and
methodology from similar projects:

PHASE III -- BUILD -- This phase is focused on building the system based on the
design defined in the previous Design phase (Phase II). The Build Phase includes
development of the reports, enhancements, and interfaces identified above in the
scope of work. This phase also includes the development of the conversion
efforts, the final system configuration, and integrated testing. The change
management team will be focusing on training and on-going communication.
Finally, the entire team will participate in the go-live planning, execution and
post go-live support. Key activities for this phase of work are:

     o    WBT Course & Related User Procedure & Training Development Materials

     o    Training Preparation - Logistics

     o    Reports Development

     o    Forms Development

     o    Interface Development

     o    Data Conversion Preparation (Data Cleansing, Final Mapping)

     o    Data Conversion Development

     o    Enhancement Specifications Development

     o    Enhancement Development including Unit Testing

     o    Developer Support During System Test

     o    Functional Team Support of Development Team including Unit Testing

     o    Integrated Test Preparation - Scripts Development

     o    Integrated Test - Cycle 1

     o    Integrated Test - Cycle 2

     o    Stress Test Preparation and Execute #1 (Sales Order Processing)

     o    Data Conversion Test #1 (A,B)

     o    Data Conversion Test #2 (A,B,C)

     o    Stress Test Preparation and Execute #2 (Integrated Processing)

     o    Deploy Preparation

     o    Training Delivery

     o    User Readiness Session

     o    Quality Assurance Review - Andersen Check Points

     o    Close Build Phase

     o    Overall Project Management

                                       11
<PAGE>
PROJECT PLANNING AND MANAGEMENT -- The purpose of this component is to provide
leadership, guidance and structure to the project team. Additionally, the
project managers will work to remove obstacles and barriers to progress and
insure stability in the implementation process. The project managers will also
be responsible for developing a strong team environment where open communication
is encouraged. Key activities for this component are:

     o    Project Management

     o    Internal Project Communications

     o    Conduct Status Meetings and Prepare Status Reports

     o    Conduct Steering Committee Meetings

     o    Manage Project Team Roles & Responsibilities

     o    Coordination of Deliverables

     o    Project Team Training/Orientation

     o    Scope and Change Management

     o    Manage Project Calendar and schedules

ORGANIZATIONAL CHANGE MANAGEMENT -- This component is focused on the people
aspect of the implementation: Internal and external project communications,
training development and execution, and go-live readiness analysis. Key
activities for this component are:

     o    Plan and execute communications

     o    Manage project change

     o    Conduct organization communication meetings

     o    Celebrate milestone accomplishments

     o    Execute User involvement strategy from Design Phase

     o    Execute Leadership involvement strategy from Design Phase

     o    Execute findings/actions items identified in Change readiness/risk
          assessment from Design Phase

     o    WBT Courses and related Materials

     o    Training development and execution

REPORTS AND FORMS -- This sub-team is focused on the development of the reports
and forms required for go-live. This team will utilize the reports approach and
reports matrix developed during the Design phase. Andersen's role will be
limited to providing support, and guidance to the HIG team lead and training to
and key HIG report writing staff. Andersen will also assist in the development
of the first 100 reports. Key activities for this sub-team are:

     o    Finalize To-Be Report and Form Matrix

     o    Develop Report Design Documents

     o    Develop Reports and Forms

     o    Develop Report and Form Cut-over Checklist

     o    Conduct On-Site Training for Key Report writing personnel

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<PAGE>

     o    Develop post go-live report development policies and procedures

DEMAND PLANNING -- This process is focused on the definition of the Demand
Planning process and the configuration of the software application. The elements
to be implemented include: multiple forecast models, simulation capability, and
manual override capability of both forecasts and demand history and promotion
management capability. Key activities for this team are:

     o    Prepare and Convert Data (2 years of Sales History)

     o    Prepare Test Scripts

     o    Assist in design of Interface to and from JDE

     o    Perform 2 Integrated Test Cycles

     o    Prepare and Execute Training

     o    Define and Develop Reports

     o    Validate Final Technical Environment

     o    Deploy Demand Planning

SALES AND OPERATIONS PLANNING -- This process is focused on the creation of a
formal, integrated communication process for managing change related to product
demand and supply. This process reconciles tactical operating plans (financial,
category, consensus, assortment, unit) with the overall strategic business
objectives. Key activities for this team are:

     o    Develop S&OP process design

     o    Gather input and define functional requirements

     o    Define key metrics and reports to support the process

     o    Define the organizational roles and responsibilities

     o    Facilitate process design workshops

COMMISSIONS SYSTEM -- This sub-team is focused on the development of the system
that would support the management (generation, tracking, reporting, etc.) of the
commission payments made to the independent Displayers. Andersen's role will be
limited to the management over-sight relative to the integration and dependency
on the J. D. Edwards system development effort and (jointly with HIG & 3rd party
developers) the development and testing of the interfaces between the JDE
platform and the Commission system; (see interface list for specific interface
requirements). Key activities for this team are:

     o    Development of the Detail Use Cases

     o    Detail Adjustment GUI

     o    Develop GUI Functionality to Support Use Cases

     o    Data Conversion from DAI

     o    System Test

     o    Acceptance Test

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<PAGE>

     o    Training Plan Development

     o    Transition and Training

DATA WAREHOUSE TEAM -- This sub-team is focused on the efforts required for
maintaining the current 'data warehouse' as an operational integration hub for
the various legacy systems that depend on it for data flow. This is a client
lead effort where Andersen's role will be limited to the management over-sight
relative to the integration and dependency on the J. D. Edwards system
development effort and (jointly with HIG & 3rd party developers) the development
and testing of the interfaces between the JDE platform and the data warehouse
system (integration hub); (see interface list for specific interface
requirements). Key activities for this team are:

     o    Develop interface approach

     o    Design and implement data migration approach for second JDE instance

     o    Define detail mapping requirements

     o    Create second reporting instance of JDE

     o    Confirm JDE aliases and common glossary of terms

     o    Support development effort of interfaces

     o    Develop test plan and approach

     o    Facilitate testing sessions and user acceptance/sign-off

     o    Reporting Instance Design & Execution

     o    Go-live

9-8 DEVELOPMENT TEAM -- This sub-team is focused on the efforts required to
convert the existing customer number in the various remaining legacy system from
9 digits to 8 digits. This conversion is necessary for the remaining legacy
systems to successfully integrate with the JDE platform. This is a client lead
effort where Andersen's role will be limited to management over-sight only. Key
activities for this team are:

     o    Develop Database Conversion Script

     o    Development Documentation

     o    Completion of Conversion Effort

     o    Develop Test Plan and Approach

     o    Conduct Integrated Test

     o    Complete Go-live/Conversion

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CNC/INFRASTRUCTURE TEAM -- This sub-team will be responsible for creating and
maintaining the J. D. Edwards technical environments for development, testing
and production use. This is a client lead effort where Andersen's role will be
limited to the management over-sight and the required interaction to make this
team successful. The CNC/Infrastructure team is tasked with supporting the
project team needs both pre and post go-live. Key activities for this team are:

     o    Development and Maintenance of the Training Environment

     o    Development and Maintenance of the Development Environment

     o    Development and Maintenance of the Production/User Environment

     o    Development and Maintenance of the Second Database Instance (Reporting
          Instance)

     o    Set-up and Maintenance of CNC and Functional Security

     o    Set-up and Testing of Load balancing and Fail-over

     o    Application database tuning

     o    Application Change Management

     o    Impact Analysis on ESU, ASU & Service Pack Updates

     o    Application of ESUs

     o    Integration of the Address Server

     o    Configuration of AutoPilot

     o    Integration and configuration of Disaster Recovery Procedures

Deliverables

Andersen, working with the HIG personnel, will produce the following
deliverables:

Organizational Change Management

     o    Web Based Training Course Maps

     o    Web Based Training Courses and materials, including process maps

     o    Prerequisite Training Delivery Confirmed

     o    Training Schedule

     o    Series of Impact/Change Readiness Meetings

     o    Go-Live Promotion and Communications Plan

     o    Ownership Transition Plan

     o    Feedback Workshop

     o    End-User Training

     o    System Go-Live and Project Success Communication

Reports & Form Team

     o    Report and Form Development Matrix

     o    Report and Form Design Documentation

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<PAGE>

     o    Report and Form Printouts

     o    Report and Form Cut-Over Checklist

     o    Report Training Course Outlines

     o    Report Development Request Approach (Post Go Live)

Development & Functional Teams

     o    Interface Programs

     o    Interface Test Scripts

     o    Interface Test Data

     o    Archived Interface Program Code

     o    Control Reports

     o    Interface Impact Assessment on Custom Modifications

     o    Data Conversion Programs

     o    Reconciliation Reports

     o    Data Conversion Test Scripts

     o    Data Cleansing Activities

     o    Data Conversion Test Data

     o    Archived Data Conversion Program Code

     o    Data Conversion Checklist

     o    Enhancement Programs

     o    Enhancement Test Scripts

     o    Enhancement Test Data

     o    Enhancement development documentation

     o    Operational batch schedule

     o    Operational batch schedule documentation

     o    Security design and approach

     o    Archived Enhancement Program Code

Functional & Integration Teams

     o    Integrated Test Approach

     o    Integrated Test Scripts

     o    Integrated Test Data

     o    Stress Test Approach

     o    Stress Test Scripts

     o    Stress Test Data

     o    Stress Test Instructions

     o    Stress Test Evaluation Form

     o    Stress Test Results

     o    Integrated Test Kick-Off Presentation

     o    Integrated Test Results

     o    Issues Resolution

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<PAGE>

    o   Updated Process Flow Charts

    o   Knowledge Transfer Plan -- at Integrated Test and Post Go-live

    o   User Readiness Mock Session ('Day in the Life')

    o   Roll-Out and End-User Support Team Plan

    o   Overall Cut-Over Checklist

    o   Contingency Plan

    o   Completed Go-Live Sign-Off

    o   Going-Forward Recommendations

    o   Post Go-live 'C' Priority Development Plan

Demand Planning

    o   System Configuration

    o   Integrated Testing

    o   User and Technical Training

    o   User / Procedure Manuals

    o   System Integration with JDE

    o   Sales History Data Conversion

    o   Demand Planning Process Implementation

Sales and Operations Planning

    o   Process Flows

    o   Policy and procedure documentation

    o   Monthly planning calendar

    o   Role definition

    o   Key Reports (approach and specification)

    o   Roll out plan

Project Management

    o   Build Phase QA Checklist

    o   Client Satisfaction Survey

    o   Overall Project Review

    o   Project Team Evaluations

    o   Lessons Learned

    o   Final QA Review Checklist

    o   AA Test Phase QA Checklist

    o   Post Roll Out Review Report

    o   Issue Database

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<PAGE>

Staffing

The following individuals shall be assigned to the engagement from Andersen:

     o    Stephen Engel -- Engagement Partner

     o    Sharon Stufflebeme -- Quality Assurance Partner

     o    Robert Newsbaum -- Andersen JD Edwards Liaison

     o    Shawn Permann -- Project Manager -- Client stay bonus participant

     o    John Hallin -- Customer and Sales Team Lead -- Client stay bonus
          participant

     o    Bob Whalen -- Financials Team Lead -- Client stay bonus participant

     o    Bryan Fornadel -- Supply Chain Team Lead -- Client stay bonus
          participant

     o    David Siu -- Development Team Lead -- Client stay bonus participant

     o    TBD -- Customer and Sales Team Consultant -- Client stay bonus
          participant

     o    Canaan Reich -- Customer and Sales Team Consultant

     o    Jeff Pennington -- Supply Chain Team Consultant

     o    Britt-Louise Andermo -- Financials Team Consultant -- Client stay
          bonus participant

     o    Regina Brodun -- Supply Chain Team Consultant -- Client stay bonus
          participant

     o    Muriel Perie -- Technical Facilitator -- Client stay bonus participant

     o    Carol Pearson -- Organizational Change Team Consultant -- Client stay
          bonus participant

     o    Ocie Anderson -- Supply Chain Team Consultant -- Client stay bonus
          participant

     o    Liviu Parvu -- (Third party Subcontractor) -- Supply Chain Team
          Technical Consultant

     o    Doug Roesch -- Reports and Forms Team Support

     o    Staci Rankin -- Web Tech Writer

     o    Stacie Mehwriter -- Web Tech Writer

     o    Ken Huntly -- Developer -- Focus on Conversions

Andersen reserves the right to re-assign resources on this project as necessary.

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TEAM ORGANIZATIONAL STRUCTURE

                     [TEAM ORGANIZATIONAL STRUCTURE CHART]

                                       19
<PAGE>

Andersen Roles

PROJECT PARTNER

The project partner ensures overall project success and client satisfaction. The
partner maintains the executive level relationships and keeps all communication
lines open between key client sponsors and Andersen. This individual is
ultimately accountable for the project and has a high-level decision making
capability. Responsibilities include:

     o    Supports timely resolution of major business issues

     o    Ensures resources are available for success of the project

     o    Ensures the project is adequately staffed

     o    Respond to on-going status reports to remove/resolve road blocks for
          the project

QUALITY ASSURANCE

The quality assurance representatives are responsible for ensuring quality work
products. Responsibilities include:

     o    Provides expertise and overall direction to the implementation team

     o    Monitors and supports the overall engagement relationship and resolves
          issues and conflicts

     o    Implement and manage ExCEED Process

     o    Implement and manage Quality Assurance Process

PROJECT MANAGER -- SHARED ROLE

The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
accountable for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:

     o    Determines project objectives, schedules, and resource budgets

     o    Monitors results, performance, and resource expenditures against
          targets

     o    Controls all project changes

     o    Compiles project progress and status reports

     o    Maintains customer contact and momentum

     o    Determines specific project tasks and how they will be accomplished

     o    Ensures that assigned tasks are performed in accordance with the
          established standards and are completed on time and within budget

     o    Resolves outstanding issues and action items

     o    Reviews all system modifications with the executive sponsors

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<PAGE>

FUNCTIONAL TEAM LEAD

The functional team lead is responsible for leading the functional team members
through the Build Phase to support HIG's process vision and business
requirements. Responsibilities include:

     o    Ensures consistency and a high level of quality

     o    Ensures deliverables are completed on time with appropriate functional
          approval and quality

     o    Guides the functional team in effectively translating functional
          requirements into an operating and usable solution

     o    Identifies and assists in resolving issues and conflicts

     o    Responsible for transferring application configuration and
          implementation methodology knowledge to the Systems Analysts/Business
          System Analysts

     o    Supervises the application consultant

     o    Executes the detail design and configuration of the JDE system

     o    Assists in the design and development effort of reports, forms,
          interfaces, modifications and conversions

     o    Assists in developing Stress and Integrated Test scripts and
          Integrated Test data

     o    Executes integrated and Stress testing. This includes making changes
          in configuration based on results and resolving errors

     o    Validates the procedures and system tasks documented by the end user
          training and development team

     o    Assist in the development and execution of the go-live cut-over plan

     o    Provides post go-live support as necessary

DEVELOPMENT TEAM LEAD & TECHNICAL FACILITATOR -- SHARED

The development team lead is responsible for leading the development team
members through the Build Phase by completing the development effort.
Responsibilities include:

     o    Maintains and communicates a clear understanding of business
          requirements and processes

     o    Develops draft material in preparation of work sessions

     o    Oversees the development of the interfaces, modifications and
          conversion efforts

     o    Plans and schedules development work effort and prioritizes work for
          the development staff

     o    Documents requirements, process changes and unresolved issues during
          client work sessions in conjunction with business area analysts

     o    Actively works with business area analysts to ensure interfaces and
          modifications are consistent with the business requirements and
          overall system design

     o    Guides the development team through the design of technical approaches
          and specifications for the interfaces, conversions and modifications

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<PAGE>

DEVELOPERS (3RD PARTY)

The development team is responsible for working with the Functional Teams and
HIG developers to understand the business requirements and begin developing the
detail specifications for modifications, interfaces and conversions. Ultimately
the development team is responsible for the development of the modifications,
interfaces and conversions. Andersen will directly manage these 3rd party
resources. Responsibilities include:

     o    Gains a clear understanding of business requirements and processes

     o    Jointly develops the interfaces, modifications and conversions with
          the support of the functional teams.

     o    Documents requirements, process changes and unresolved issues during
          client work sessions in conjunction with business area analysts

     o    Documents their design and development effort

     o    Actively works with business area analysts to ensure interfaces and
          modifications are consistent with the business requirements and
          overall system design

     o    Develops the detail design of technical approaches and specifications
          for the interfaces, conversions and modifications

     o    Jointly with HIG developers, designs and modifies JDE software based
          on user requirement specifications

     o    Unit/String Test Plans

APPLICATION CONSULTANTS

The application consultant plays a combined functional and technical role with
heavy emphasis on knowledge transfer and translating functional requirements
into specific features and tailoring options. Each functional team's Application
Consultant works with the other functional team members to design and configure
the JDE system to support the approved design and configuration from the Design
Phase of work. Responsibilities include:

     o    Responsible for transferring application configuration knowledge to
          the Systems Analysts/Business Analyst

     o    Assists the Functional Leads and functional team in effectively
          translating functional requirements into configuration options and
          solutions

     o    Executes the detail design and configuration of the JDE system

     o    Assists in the design and development effort of reports, forms,
          interfaces, modifications and conversions

     o    Assists in developing Stress and Integrated Test scripts and
          Integrated Test data

     o    Executes integrated and Stress testing. This includes making changes
          in configuration based on results and resolving errors

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<PAGE>

     o    Validates the procedures and system tasks documented by the end user
          training and development team

     o    Assist in the development and execution of the go-live cut-over plan

     o    Provides post go-live support as necessary

ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE

The change lead is responsible for communicating and managing the change efforts
associated with the implementation. Responsibilities include:

     o    Works closely with the functional and technical teams to understand
          organizational requirements and design approach on user procedures and
          training manuals

     o    Documents and communicates organizational change requirements and
          decisions to the appropriate managers so they can effect the changes
          in their departments

     o    Communicates project progress and important enterprise change
          decisions to the entire company

     o    Executes the training strategy defined in the Design Phase

     o    Oversees completion of training and communication deliverables

     o    Responsible for the training logistics and trainee scheduling

     o    Supports User Readiness Planning

TECHNICAL SUPPORT FOR DEMAND PLANNING INSTALLATION (3RD PARTY)

This resource will be responsible for supporting the HIG technical team with the
tuning of the database of the Demand Planning software. Key activities include:

     o    Provide database tuning and application optimization

WEB TECH WRITERS

These resources will be responsible for developing the Web-Based
Content/Materials used to deliver the training to the end-users. These writers
will work with the Functional Teams and the SME's to develop materials that are
based on the roles, processes and systems specific to HIG. Key activities
include:

     o    Review and translate process flow documentation into Key Training
          activities

     o    Interview key users and SME's to understand HIG specific terminology
          and processes

     o    Work with Functional team to understand system and process flow
          integration/interaction

     o    Develop Web-based training content based on findings and research

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<PAGE>

Client Responsibilities and Project Assumptions

1.   Client Responsibilities

     In connection with Andersen's provision of the Services, Client will
     perform the tasks, furnish the personnel, provide the resources, or
     undertake the responsibilities specified below ("Client Responsibilities").

     STEERING COMMITTEE

     The steering committee is the owner of the project and are responsible for
     providing the necessary funding and resources as well as the management
     commitment to the project. Responsibilities include:

          o    Resolves major implementation policy decisions and makes the
               final decision on all other proposed opportunities and
               recommendations

          o    Provides overall project direction and management support

          o    Supports the vision of the project

     KEY ADVISORS

     The key advisors are executive level advisors assisting with business
     knowledge and resources. Responsibilities include:

          o    Assist with issue resolution

          o    Provide input to major business policy decisions

          o    Supports the vision of the project

     EXECUTIVE SPONSORS - PMO

     The project directors are key executives responsible for the major business
     areas included in the project scope. These individuals are ultimately
     accountable for the project and have high-level decision-making capability.
     Responsibilities include:

          o    Supports timely resolution of major business issues

          o    Ensures resources are available for success of the project

          o    Ensures the project is adequately funded

          o    Respond to on-going status reports to remove/resolve road blocks
               for the project

          o    Ensures that internal policies are updated to reflect business
               process changes and communicates that change to the organization

          o    Approves all system modifications

     The following individuals will be responsible for providing this executive
     level support specific to their areas which includes providing oversight
     and confirmation of final deliverables:

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<PAGE>

     o    Mary-Knight Tyler -- Project Management, Finance, Commissions, Vertex,
          Integration, and 9-8 Conversion

     o    Chris Lesher -- Customer and Sales Team

     o    Dan Zipes -- Supply Chain Team

     o    Alan Boyer -- Information Technology -- Data Warehouse, Development
          and CNC/Infrastructure

     o    Jeannie Price -- Organizational Change Management, and Canadian
          Conversion

     o    Kim Bohling -- Reporting and Forms

PROJECT MANAGER -- SHARED ROLE

The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:

     o    Determines project objectives, schedules, and resource budgets

     o    Monitors results, performance, and resource expenditures against
          targets

     o    Controls all project changes

     o    Compiles project progress and status reports

     o    Maintains customer contact and momentum

     o    Determines specific project tasks and how they will be accomplished

     o    Ensures that assigned tasks are performed in accordance with the
          established standards and are completed on time and within budget

     o    Resolves outstanding issues and action items

     o    Reviews all system modifications with the executive sponsors

BUSINESS AREA ANALYSTS COMBINED WITH THE SYSTEMS ANALYST ROLE

Business Area Analysts are responsible for representing the overall organization
and their specific business unit's needs by participating in requirements
workshop discussions. They are key participants in the design phase, approving
design prototypes and usability testing. They reach consensus regarding changes
in business requirements. Responsibilities include:

     o    Performs as liaison between the business department and the
          implementation team

     o    Attends project team training and orientation

     o    Contributes subject-area business knowledge

     o    Assists in the security definition of end-users

     o    Communicates results of meetings and workshops to the organization

     o    Attends meetings and participates in all aspects of the project

     o    Develops draft material in preparation of work sessions

     o    Gains a clear understanding of business requirements as defined during
          the discovery activity

     o    Assists in the development of the functional design during the design
          phase

     o    Supports timely resolution of outstanding business issues as assigned,
          and documents resolutions

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<PAGE>

     o    Identifies and communicates opportunities for business area practice
          changes

     o    Prepares and delivers a plan for communication to all areas impacted
          by the new system

     o    Develops written procedures for the new system

     o    Enters reference data into the new system during construction activity
          of the project

     o    Responsible for input and/or coordination of manual data input

     o    Documents requirements, process changes and unresolved issues during
          client work sessions

     o    Designs and modifies JDE software based on user requirement
          specifications

     o    Performs design of custom reports

     o    Performs design of standard reports

TECHNICAL TEAM

The technical team is responsible for developing technical knowledge and skills
specific to the software package. Responsibilities include:

     o    Provides application security and HW/OS support

     o    Oversees database administration

     o    Designs disaster recovery plan

     o    HTML, Citrix, Fat Clients

DATABASE ADMINISTRATION

The data base administration team is responsible for creating and maintaining
the database. Responsibilities include:

     o    Responsible for the creation of new tables, views and elements in the
          JDE system

     o    Responsible for data base tuning

     o    Responsible for the creation of views for end-user reporting

     o    Coordinates with the Data Administration group to complete user
          request procedures for adding new data elements, views, and tables to
          the JDE software

     o    Technical Environments

DATA ADMINISTRATION

The data administration team is responsible for providing the initial data
context for the project. Responsibilities include:

     o    Ensures that corporate data standards are adhered to and that they fit
          into the corporate logical data model

     o    Reviews draft data materials during the requirements/design definition
          phase, and reviews design feasibility prototypes

     o    Assists the conversion team with data mapping between the JDE system
          to/from other systems

     o    Coordinates creation of database views with the DBAs

     o    Ensures that all data required by the process data flows are reflected
          in the model

     o    Documents potential changes as a result of requirement/process
          discussions

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<PAGE>

     o    Coordinates with the DBA group to complete user request procedures for
          adding new data elements, views, and tables to the JDE software

NETWORK ADMINISTRATION/TELECOMMUNICATIONS

The network group is responsible for the overall network communication support
needs of the project. Responsibilities include:

     o    Responsible for hardware infrastructure supporting workstation
          connectivity

     o    Ensures that adequate system support will be provided during all
          stages of the project

     o    Develops volume test plans in conjunction with the QA group

     o    Monitors access and documents performance issues as it relates to
          network operations

OPERATIONS GROUP

The operations group is responsible for coordinating the scheduling of all batch
processing. Responsibilities include:

     o    Schedules are coordinated with end-users and/or appropriate project
          staff and properly set-up

     o    Responsible for ensuring schedules do not cause conflicts with other
          areas

CHANGE MANAGEMENT TEAM (SOFTWARE VERSIONS)

The change management group is responsible for controlling software within the
environment. Responsibilities include:

     o    Providing guidance and input for change management plans

     o    Implementing change management plans

     o    Owns Production Environment

QUALITY ASSURANCE/TESTING

The quality assurance group is responsible for reviewing project deliverables
and coordinating user acceptance testing. Responsibilities include:

     o    Develops the user acceptance test plan

     o    Reviews project deliverables with the project manager

     o    Assists in selecting test participants

     o    Coordinates the development of the user acceptance test plan

     o    Schedules and/or coordinates testing facilities and equipment

     o    Coordinates and monitors testing schedule

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<PAGE>

SECURITY

The security team is responsible for over-all security definition and practice.
They ensure that corporate security standards are adhered to and they fit into
the existing corporate security strategy. Responsibilities include:

     o    Initial set-up, transfer, and maintenance of security/user profiles

     o    Ensures the application does not impact other application security
          (e.g., network, mainframe security, etc.)

     o    Gains a clear understanding of security requirements to define
          security strategy

     o    Responsible for ensuring that long-term strategies are understood

     o    Controls over-all access to the application

     o    Serves as liaison to the auditors for security issues

     o    Responsible for establishing security requirements that will not
          compromise assets (e.g., ensuring that application programmers cannot
          inadvertently erase production data, etc.)

SUPPORT CENTER

The support center is responsible for answering, responding, and assigning (as
needed) end-user desktop software/usage questions and problems. Responsibilities
include:

     o    Questions are answered or assigned to the proper personnel

     o    Proper personnel are notified of problems

     o    Attends training designed for support center staff to answer calls
          and/or determine proper notification (e.g., application group,
          database group, etc.)

SYSTEMS GROUP

The systems group is responsible for providing system support on all platforms.
Responsibilities include:

     o    Coordinates allocation of server and client disk space in preparation
          of installation, upgrade, and maintenance of software

     o    Ensures that adequate disk space is available

     o    Ensures that system standards are adhered to and that they fit into
          the existing and planned system standards

     o    Reviews draft data materials during the requirements/design definition
          phase, and reviews design feasibility prototypes

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<PAGE>

SUBJECT MATTER EXPERTS -- SHARED ROLE

Subject matter experts (SME) play a key role in defining and clarifying business
requirements. The SME is responsible for participating in meetings, as required
by the business area analysts, to ensure the project team has a clear
understanding of requirements. Responsibilities include:

     o    Contributes subject-area business knowledge

     o    Develops draft material in preparation of work sessions

     o    Assists in the development of the functional design during the design
          phase

     o    Supports timely resolution of outstanding business issues as assigned
          and documents resolutions

     o    Participates in confirming Integration Test results

ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE

The change lead is responsible for communicating and managing the change efforts
associated with the design effort. Responsibilities include:

     o    Works closely with the functional and technical teams to understand
          organizational requirements and design approach on user procedures and
          training manuals

     o    Documents and communicates organizational change requirements and
          decisions to the appropriate managers so they can effect the changes
          in their departments

     o    Communicates project progress and important enterprise change
          decisions to the entire company

     o    Develops the training strategy and determines best practice for
          delivery of training

     o    Determines proper medium for training (e.g., classroom, self-paced
          tutorial, train-the-trainer approach, Intranet, etc.)

     o    Determines the target training participants and the training needs
          depending on the work responsibility of that user

     o    User Readiness Support

COMMISSION SYSTEM LEAD, ANALYST, DEVELOPERS, ET ALL

The responsibility of designing and developing the Commission System is solely
the responsibility of HIG. Andersen's role will be limited to the management
over-sight relative to the integration and dependency on the J. D. Edwards
system design effort. HIG will otherwise be responsible for all deliverables and
work products, resource assignments, tasks identification and completion,
documentation and all other related items to the design and development of the
Commission System.

Project Assumptions

THE PROJECT ASSUMPTIONS INCLUDE THE FOLLOWING:

o    Andersen is not responsible in any way for the selection of the new
     ERP system J.D. Edwards.

o    The Build phase will start on April 15, 2002 and will run
     approximately 42 weeks.

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<PAGE>

o    The Build phase project will assume an operational enterprise-wide
     financial, distribution and demand planning system by December 29th, 2002.

o    Andersen and HIG will perform as project managers. HIG will provide a
     full-time project manager.

Andersen's delivery of the Services and the fees charged are dependent on (i)
the Client's timely and effective completion of the Client Responsibilities,
(ii) the accuracy of the Assumptions, and (iii) timely decisions and approvals
by Client's management. Client shall be responsible for any delays, additional
costs, or other liabilities caused by or associated with any deficiencies in the
Client Responsibilities and Assumptions.

PROJECT ASSUMPTIONS SPECIFIC TO THE SCOPE ARE:

o    Interface modification plan and design will occur concurrently with the JDE
     application design and setup

o    Any newly identified RICE component (Reports, Interfaces, Conversions &
     Enhancements) will require a Change Order

OVERALL PROJECT ASSUMPTIONS:

o    Any scope changes upon commencement of the project will be documented
     through a change order process and agreed to by both Andersen and HIG.

o    This project is a significant endeavor for HIG. The participation and
     leadership of key management executives in this project is critical to its
     success.

o    HIG will adopt the new processes driven by the JDE software and will not
     engage in any major reengineering efforts.

o    We assume the HIG Steering Committee personnel will be available to make
     key decisions on a timely basis.

o    It is assumed that all key deliverables are signed off on a timely basis.
     Delays in confirmation of key sign-off deliverables may impact the project
     timeline.

o    Andersen and HIG will participate jointly in the project and will share
     responsibility to complete project tasks. We assume HIG will make
     available, on a timely basis, appropriate personnel to complete the
     required tasks.

o    HIG will manage other third-party vendor activities except those designated
     as sub contractors of Andersen. Negotiations and billings of all other
     third-party vendors will be the responsibility of HIG. Contract
     negotiations for all vendors can impact the overall project timing and
     deadlines.

PROJECT PLANNING AND MANAGEMENT ASSUMPTIONS:

o    We assume a work area for the project team will be in place including
     copier, analog lines, laser printer, telephones, and other necessary
     supplies. E-mail and shared directory(ies) will be available to the project
     team members to facilitate communication and information gathering and
     sharing.

                                       30
<PAGE>

o    We are assuming eight-hour work days, five days a week, for all local
     project team members. We are assuming a ten-hour work days, four days a
     week, for all traveling project team members. This may vary depending on
     the segment of the project.

o    HIG's is expected to play a significant role in the Change Management
     implementation; coordinating employee related decisions, as well as
     ultimately supporting overall training design and approach.

o    HIG will also provide business and technology resources as outlined in the
     Project Organization section of this proposal.

o    If additional staff-level resources are needed to perform administrative
     and documentation tasks, the HIG and Andersen project management team will
     agree on the required time and costs.

TECHNICAL ENVIRONMENT:

o    We assume all new JDE users will be provided with connectivity, technical
     infrastructure, and the appropriate personal computers and software to
     access their required modules by HIG and/or a third party vendor.

o    We assume that HIG will have an in-house database administrator and an
     in-house Unix or NT administrator.

o    We assume HIG is responsible for the JDE technical environment and that HIG
     technical personnel will have or be trained in the necessary technical
     skills.

o    The testing of interfaced transactions through other systems will be the
     responsibility of HIG. The project team will ensure the proper transactions
     are generated and formatted to the other systems.

o    Upgrade to new versions of the JDE software or required hardware or systems
     software is the responsibility of HIG.

o    We assume that the JDE technical environment will meet HIG requirements for
     transaction processing speed and volumes

o    We assume that the JDE technical resources assigned to the project will
     have the necessary technical skill sets and/or will have access to the
     appropriate resources for issue resolution

o    An HIG resource will be dedicated to the design and implementation of JDE
     security. Andersen will provide direction and review of the security tasks.

CONVERSION:

o    Andersen and HIG will jointly manage data conversion tasks. We will assist
     with the conversion approach and high-level design of conversion programs.

o    Andersen will assist with the design and management of the conversion
     programs.

o    Mapping tables between legacy systems and JDE will be required for all
     interfaces. HIG will be responsible for producing and maintaining all
     mapping tables.

Client will designate a competent employee or employees within its senior
management who will make all management decisions with respect to this
engagement. To the extent that the Services or Andersen's deliverables include
the design or implementation of hardware or software systems, Client's
management

                                       31
<PAGE>

shall be responsible for making all management decisions, including but not
limited to, decisions concerning systems to be evaluated and selected; the
design of such systems; controls and system procedures to be implemented; scope
and timetable of system implementation; and testing, training, and conversion
plans. To the extent that Andersen's deliverables include surveys, analyses,
reports, evaluations, recommendations or other management consulting services,
Client's management shall be responsible for all implementation decisions and
for any future action with respect to the matters addressed in the deliverables.
In conjunction with Client acceptance, Client's management will evaluate the
adequacy and results of the design and implementation of Andersen's
deliverables.

Except as expressly agreed herein, Client shall be solely responsible for:

     o    determining the existence of, and complying with, any and all of the
          following that are applicable to electronic transactions, commerce,
          processes, or activities conducted over the Internet or any electronic
          network (collectively, "Transactions"): import/export controls;
          requirements to obtain and maintain licenses or other permissions;
          requirements to assess, pay, or withhold taxes, customs duties, or
          other charges; and other laws or regulations in all applicable
          jurisdictions;

     o    the security of its network and any related systems, including the
          security, privacy and confidentiality of any Client or third party
          data, intellectual property, or other information;

     o    establishing and determining the validity and enforceability of
          contract execution, performance and fulfillment processes, contracts,
          and any other documentation necessary for or used in conducting
          Transactions;

     o    any content contributed by Client or a third party in connection with
          this engagement; and

     o    any use by Client of the Deliverables (including, but not limited to:
          Client's posting to its website, or transmission over the Internet, of
          text, images, software, music, video, or other information; Client's
          sale or offering for sale of any goods and services via its website or
          otherwise over the Internet; and any linking, framing, or distribution
          of unsolicited electronic mail in connection with Client's website)
          which is illegal, unlawful, or harassing, which infringes another's
          intellectual property rights, or which otherwise constitutes network
          abuse ("Misuse").

Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.

Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in

                                       32
<PAGE>

accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary (a) to permit preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements, and (b) to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. [In
addition, Client represents and warrants to Andersen that Client's management:
(1) has acknowledged such responsibility in writing to its audit committee or,
if no such committee exists, then to its board of directors or, if Client has
neither an audit committee nor a board of directors, then to the audit committee
or board of directors, as applicable, of any entity that controls Client or,
alternatively, (2) will, upon execution, provide a copy of this Statement of
Work to the foregoing committee or board, as applicable.] Client will determine
the adequacy of its internal accounting controls and financial reporting systems
without relying on Andersen's services or deliverables as the primary basis for
making such determination. Finally, Client acknowledges to Andersen that it is
Client's responsibility to make such disclosures with respect to this engagement
that are required by applicable laws and regulations.

Project Approach and Timeline

The overall approach for completing the work specified or described in this
arrangement is based on the Build Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary JD Edwards specific business integration methodology, and
has been adapted to meet the objectives of this engagement. A work plan has been
provided to reflect the level of effort and specific dates for all key/relative
tasks. Please refer to Appendix A for a detail view of the work plan.

Fees & Expenses

We estimate the Build Phase, including post go-live support will be completed on
February 3, 2003 with an actual 'Go-Live' date estimate of December 29, 2002.

Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate.
Our fee estimate is $3,231,168, plus out of pocket expenses. Our fees are based
on an average rate of $176 per hour. Please refer to Appendix B for detail
supporting this estimate.

Further to these fees, 3rd party resources will be required for the CNC
implementation/configuration and the development effort. It is our understanding
the HIG will contract directly with all 3rd party vendors and these vendors will
bill HIG directly for those services.

                                       33
<PAGE>

This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$350,000 at the beginning of the project (April 15, 2002) then in accordance
with the following billing schedule:

<Table>
<S>                                <C>
         June 1, 2002              $350,000+ actual expenses incurred in April
         July 1, 2002              $350,000+ actual expense incurred in May
         August 1, 2002            $350,000+ actual expenses incurred in June
         September 1, 2002         $325,000+ actual expenses incurred in July
         October 1, 2002           $325,000+ actual expenses incurred in August
         November 1, 2002          $325,000+ actual expenses incurred in September
         December 1, 2002          $325,000+ actual expenses incurred in October
         January 1, 2002           $300000+ actual expenses incurred in November
         February 1,2003           actual expenses incurred in December
         February 15, 2003         $ remaining fees minus "Client Stay Bonus" plus remaining expenses from project
</Table>

As agreed upon by both parties, a "Client Stay Bonus" will be paid to those key
Andersen employees (identified in the Staffing section) who remain for the
entire project, upon completion of this engagement. Home Interiors and Gifts
will complete this payout directly to the named employees. The funds required to
support this will be subtracted from the final payment due to Andersen in
February. We will reconcile the actual fee amounts incurred for the project at
the end of the project and any adjustments will be reflected in a final billing
or credit.

Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.

Change Order Process

During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as
"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or

                                       34
<PAGE>

advise Andersen not to perform the Changes, in which event Andersen shall
proceed with the original Services. The foregoing notwithstanding, if Andersen,
at the written request of Client, performs work that is not covered by this
Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for which Client shall compensate Andersen at the same rates
as those described under Fees & Expenses above or, in the case of a fixed fee
engagement, at the rates used in calculating such fixed fee.

We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.

Very truly yours,

ARTHUR ANDERSEN LLP

By:      /s/ STEPHEN ENGEL
         ----------------------------------
         Stephen Engel

Attachments:    Business Consulting Standard Business Terms
                Business Consulting Statement of Work Standard Change Order Form

Acknowledged and Accepted:
Home Interiors and Gifts, Inc.

By:      /s/ KENNETH CICHOCKI
         ----------------------------------

Title:   Senior Vice President
         ----------------------------------

Date:    5/8/02
         ----------------------------------

                                       35
<PAGE>
BUSINESS CONSULTING
STANDARD BUSINESS TERMS

These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described under
Change Order Process in the Statement of Work) only in writing when signed by
both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.

SECTION 1. FEES, EXPENSES

Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.

SECTION 2. CLIENT RESPONSIBILITIES

As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.

SECTION 3. CONFIDENTIALITY

With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.

SECTION 4. DELIVERABLES

Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.

SECTION 5. ACCEPTANCE

Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.

SECTION 6. WARRANTY

(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.

(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.

                                       1

<PAGE>

(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND
REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR
OTHERWISE.

SECTION 7. RISK ALLOCATION

(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.

(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.

(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.

(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.

(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.

SECTION 8. PERSONNEL

(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services

(b) During the term of this Agreement, and for a period of six(6) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder, Notwithstanding the foregoing, the
restriction on soliciting the employment of the other party's personnel shall
not apply (i) to those that have been laid off; or (ii) in the event that
Andersen successor entity shall suffer liquidity problems that renders it unable
to continue the employment of these key Andersen employees listed in the
Statement of Work.

SECTION 9. TERMINATION

(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.

(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.

(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged breach
internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.

SECTION 10. GENERAL

(a) Neither party shall use the other party's name, trademarks, service marks,
logos, trade names and/or branding without such party's prior written consent.

(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.

(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.

(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.

(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.

(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all other
terms and provisions shall remain in full force and effect.

(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.

(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.

(i) The laws of the State of Texas shall govern this Agreement.

(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.

                                       2

<PAGE>

BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER ____

[date]

[Client contact name]
[complete legal name of Client entity]
[Client address]

Dear [Client contact name]:

This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated
________________,200_, including any prior Change Order(s) or amendments thereto
(the "Statement of Work"). This Change Order constitutes the entire
understanding and agreement between Client and Andersen with respect to such
changes, supersedes all prior oral and written communications with respect to
such changes (including, but not limited to, written change requests), and may
be amended, modified or changed only in writing when signed by both parties. The
section(s) of the Statement of Work set forth below is/are hereby amended,
effective as of the date first written above, by adding at the conclusion of the
respective section(s) the following text:

Project Scope and Objectives

Andersen Services and Responsibilities

Deliverables

Acceptance

Client Responsibilities

Project Assumptions

                                       1
<PAGE>

Project Approach

Staffing

Fees & Expenses

Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.

Very truly yours,

ARTHUR ANDERSEN LLP

By:
         -----------------------------
         Stephen Engel

Acknowledged and Accepted:

Home Interiors and Gifts, Inc.

By:
         -----------------------------

Title:
         -----------------------------

Date:
         -----------------------------

                                       2
<PAGE>

Restrict Future Items (Items Not Released to Sale)
--------------------------------------------------

Requirement:      Future Items are not for sale to displayers, however they may
                  be sold to Directors as Preview Pack components. Future items
                  can also be sold to internal departments (such as Product
                  Development) as samples.

Solution:         (1) Future items are set up in Item master with Availability
                      flag SRP1 set to 'FI', item line type set to 'S'. The SRP1
                      and Line type value travels from item master to order
                      detail. The future item inventory is managed in such a way
                      that it has zero on hand in the 'Warehouse' location as
                      long as the item availability status stays 'FI'. When a
                      displayer orders a future item from the 'Warehouse', the
                      line will be back ordered. This is JDE Vanilla.

                  (2) The EXE extract program needs to do the following for
                      future item lines: (a) do not extract a line to EXE if the
                      order type DTCO is 'SO' and SRP1 is 'FI' and line type is
                      'S'. (b) bump the line status from 535 to 556 if DTCO is
                      'SO' and SRP1 is 'FI' and line type is 'S' (so that the
                      line B/O qty can be cleared to Canceled qty bucket later
                      by the Batch program).

                  (3) A future item can be purchased by a restricted customer
                      group as 'Preview Pack' kit component. Preview Pack items
                      are set up to have SRP1 equals 'FI' and LnType equals 'PP'
                      in the item master. Only directors can buy 'PP' items.
                      Such restriction is Vanilla set up in the customer master.

                  (4) If an internal HIG customer/department needs to buy a
                      Future Item (SRP1 'FI', LnType 'S') for marketing or
                      research purpose, a manual internal order (with order type
                      DTCO equals to 'SI') can be entered through P4210 to buy
                      the item from the 'Hold' location rather than the
                      'Warehouse' location. This line will then be extracted to
                      EXE and fulfilled as usual.

<PAGE>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX A

                       WORKPLAN SECTION -- WEEK BEGINNING

<Table>
<S>      <C>                                                            <C>
3        Build -- Architecture & Functional Teams                       [CHART]
3.1        User Procedure & Training Development
3.2.1      Training Preparation -- Logistics
3.2.2      Install Web Based Training Tool -- CNC
3.3.1      Reports Development
3.3.2      Forms Development
3.4.1      Interface Development -- "The 60"
3.4.2      Interface Development -- Data Warehouse -- Operational
           Links
3.5        Data Conversion Preparation (Data Cleansing, Final
           Mapping)
3.6        Data Conversion Development
3.7        Enhancement Specification Development
3.8        Enhancement Development
3.8.8      Developer Support During System Test
3.8.9      Functional Team Support of Development Team
3.9.1      Technical/CNC Configuration -- System Test
3.9.2      Technical/CNC Configuration -- Training Environment
3.9.4      Technical/CNC Configuration -- Production/User Environment
3.9.5      Technical/CNC Configuration -- Reporting Instance
3.9.6      Security CNC & Functional
3.9.7      Technical/CNC Configuration -- Automatic Job
           Processing/UBE Scheduler
3.9.8      Technical/CNC Configuration -- Tuning
3.9.9      Technical/CNC -- Autopilot Configuration
3.9.10     Technical/CNC Configuration -- Change Management
3.9.11     Technical/CNC -- Data Archive & Purge
3.9.12     Technical/CNC -- Environment Scrub Checklist
3.9.13     Technical/CNC -- Disaster Recovery (Vertos integration)
3.9.15     Technical/CNC -- Load Balancing and Fallover
3.9.16     Technical/CNC -- Address Server
3.10       Integrated Test Preparation -- Scripts Development
3.11       Integrated Test -- Cycle 1
3.12       Integrated Test -- Cycle 2
3.13       Stress Test Preparation and Execute #1 (Sales Order
           Processing)
3.14       Data Conversion Test #1 (A,B)
3.15       Data Conversion Test #2 (A,B,C)
3.16       Final Technical/CNC Configuration
3.17       Stress Test Preparation and Execute #2 (Integrated
           Processing)
3.18       Deploy Preparation
3.19       Training Delivery
3.20       User Readiness Session
3.21       Quality Assurance Review -- Andersen Check Points
3.22       Go-live Check Points
3.23       Close Build Phase
3.24       Knowledge Team in Training
3.25       Knowledge Transfer Team Identified and On Ground
4        Build -- Demand Planning
4.1        CRP II -- Finalize Design
4.2        User Procedure Development
4.3        Data Conversion Preparation
4.4        Data Conversion (2yrs -- Pre go-live / go-live)
4.5        Integrated Test Preparation -- Scripts Development
4.6        Interface Design/Development
4.7        Integrated Test -- Cycle 1
4.8        Integrated Test -- Cycle 2
4.9        Training Preparation
4.10       Report Development
4.11       Training
4.12       Final Technical/CNC Configuration
4.13       Deploy Preparation
4.14       Deploy
4.15       Sales Order Processing -- Demand Planning Process/Org
           Design
5        ERP Deployment
5.1        Deploy
5.2        Data Conversion (Post go-live -- if any)
5.3        Post Deploy Review
5.4        Go-live Communication/Transition
5.5        Final Quality Assurance Review
5.6        Support First Financial Close
5.7        Close Deploy Phase
6        9-8 Conversion
6.1        Database Conversion Script
6.2        IOE
6.3        Bubble Book & Scanner
6.4        HomeCoSoft
6.5        WWW -- Websphere
6.6        WWW -- Vingnette
6.7        Interactive Voice Response
6.8        Non-Cash Certificates
6.9        Gift Certificates
6.10       Data Warehouse Reports
6.11       Data Warehouse
6.12       Intranet
6.13       DAI
6.14       Seminar Applications
6.15       Contact Books
6.22       Create Test Plans
6.23       Integrated Test
6.24       Go-Live
7        Commission
7.1        Detail Use Cases
7.2        Detail Adjustment GUI
7.3        Develop GUI Functionality to Support Use Cases
7.4        Develop Business Rules Functionality to Support Use Cases
7.5        Data Conversion from DAI
7.6        System Test
7.7        Acceptance Test
7.8        Training Plan
7.9        Transition
8        Canada Conversion
8.1        Requirements Gathering
8.2        Setup Payment with Payment Tech
8.3        Build (minor HTML changes and Payment Processing)
8.4        Data Conversion to C$
8.5        System Test
8.6        Deployment
9        Change Management
10       Project Management
11       Technical Architecture Management
</Table>
<PAGE>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 4/15    4/22    4/29     5/6    5/13    5/20
                                                                                 ---------------------------------------------
                                                                                  20       21      22      23      24      25
                                                                                 ---------------------------------------------
ANDERSEN            TOTAL
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                                RESOURCE          20       21      22      23      24      25
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
88     $450    $   39,600   QA Partner                          S. Stufflebeme                      8
172    $450    $   77,400   Project Partner                     S. Engel           8        4       4       4       4       4
994    $400    $  397,600   Project Manager                     S. Permann        32       24      24      24      24      24
1640   $350    $  574,000   Functional Lead -- Customer &       J. Hallin         40       40      40      40      40      40
                            Sales & Integration Lead
1640   $350    $  574,000   Functional Lead -- Supply Chain     B. Fornadel       40       40      40      40      40      40
                            Team
1680   $350    $  588,000   Functional Lead -- Financial        B. Whalen         40       40      40      40      40      40
1520   $230    $  349,600   Technical Lead -- Development Team  D. Siu            40       40      40      40      40      40
480    $250    $  120,000   Technical Facilitator               M. Perie          40       40      40      40      40      40
1440   $250    $  360,000   Application Consultant -- Customer  K. Kimberling                      40      40      40      40
                            & Sales Team
380    $185    $   70,300   Application Consultant -- Customer  C. Reich          40       40      40
                            & Sales Team
1640   $250    $  410,000   Application Consultant -- Supply    R. Brodhun        40       40      40      40      40      40
                            Chain Team
1520   $230    $  349,600   Application                         B. Andermo        40       40      40      40      40      40
                            Consultant -- Financial
1040   $230    $  239,200   Application Consultant -- Supply    O. Anderson       40       40      40      40      40      40
                            Chain Team
400    $125    $   50,000   Staff Consultant -- Financial/Web   S. Mewhirter
                            Tech Writer
320    $185    $   59,200   Staff Consultant -- Supply Chain    J. Pennington
400    $125    $   50,000   Staff Consultant -- Customer/Web    S. Rankin
                            Tech Writer
1208   $250    $  302,000   Change Consultant                   C. Pearson        40       40      24      24      24      24
80     $  0    $        0   Staff Consultant -- Supply Chain    J. Pennington     40       40
80     $  0    $        0   Staff Consultant -- Customer/Web    S. Rankin         40       40
                            Tech Writer
80     $  0    $        0   Staff Consultant -- Financial/Web   S. Mewhirter      40       40
                            Tech Writer
720    $300    $  216,000   Developer 1 -- Conversions          K. Huntly         40       40                              40
600    $230    $  138,000   Report Developer                    D. Roesch                  40      40      40      40      40
112    $455    $   50,960   Vertex Team Lead                    L. Fox             2        2       4       2       2       4
66     $285    $   18,810   Vertex Consultant                   S. Griffin                          4                       4
78     $185    $   14,430   Vertex Consultant                   J. Gee             2        2               2       2
-------------------------------------------------------------
18378                       Total Hours
-------------------------------------------------------------
       $275    $5,048,700   Andersen Average Rate & Gross Fees
                  36%               Andersen Discount
       $176    $3,231,168   Andersen Average Rate & Total Fees

<Caption>

                                             5/27     6/3    6/10    6/17    6/24    7/1     7/8    7/15
                                             -------------------------------------------------------------
                                              26      27      28      29      30      31      32      33
                                             -------------------------------------------------------------
ANDERSEN
----------------------------------------------------------------------------------------------------------
HOURS     ROLE                                26      27      28      29      30      31      32      33
----------------------------------------------------------------------------------------------------------
<S>       <C>                                 <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
88        QA Partner                            8                               8
172       Project Partner                       4       4       4       4       4       4       4       4
994       Project Manager                      24      24      24      24      24      24      24      24
1640      Functional Lead -- Customer &        40      40      40      40      40      40      40      40
          Sales & Integration Lead
1640      Functional Lead -- Supply Chain      40      40      40      40      40      40      40      40
          Team
1680      Functional Lead -- Financial         40      40      40      40      40      40      40      40
1520      Technical Lead -- Development Team   40      40      40      40      40      40      40      40
480       Technical Facilitator                40      40      40      40      40      40
1440      Application Consultant -- Customer   40      40      40      40      40      40      40      40
          & Sales Team
380       Application Consultant -- Customer
          & Sales Team
1640      Application Consultant -- Supply     40      40      40      40      40      40      40      40
          Chain Team
1520      Application                          40      40      40      40      40      40      40      40
          Consultant -- Financial
1040      Application Consultant -- Supply     40      40      40      40      40      40      40      40
          Chain Team
400       Staff Consultant -- Financial/Web
          Tech Writer
320       Staff Consultant -- Supply Chain
400       Staff Consultant -- Customer/Web
          Tech Writer
1208      Change Consultant                    24      24      24      24      24      24      24      24
80        Staff Consultant -- Supply Chain
80        Staff Consultant -- Customer/Web
          Tech Writer
80        Staff Consultant -- Financial/Web
          Tech Writer
720       Developer 1 -- Conversions           40      40      40      40      40      40      40      40
600       Report Developer                     40      40      40      40      40      40      40      40
112       Vertex Team Lead                      2       2       4       2       2       4       2       2
66        Vertex Consultant                                     4                       4
78        Vertex Consultant                     2       2               2       2               2       2
-------------------------------------------
18378       Total Hours
-------------------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                          7/22    7/29     8/5    8/12    8/19    8/26     9/2
                                                                          -----------------------------------------------------
                                                                           34       35      36      37      38      39      40
                                                                          -----------------------------------------------------
ANDERSEN            TOTAL
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                         RESOURCE          34       35      36      37      38      39      40
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
88     $450    $   39,600   QA Partner                   S. Stufflebeme     8                                8
172    $450    $   77,400   Project Partner              S. Engel           4        4       4       4       4       4       4
994    $400    $  397,600   Project Manager              S. Permann        24       24      24      24      24      24      24
1640   $350    $  574,000   Functional Lead -- Customer  J. Hallin         40       40      40      40      40      40      40
                            & Sales & Integration Lead
1640   $350    $  574,000   Functional Lead -- Supply    B. Fornadel       40       40      40      40      40      40      40
                            Chain Team
1680   $350    $  588,000   Functional                   B. Whalen         40       40      40      40      40      40      40
                            Lead -- Financial
1520   $230    $  349,600   Technical Lead --            D. Siu            40       40      40      40      40      40      40
                            Development Team
480    $250    $  120,000   Technical Facilitator        M. Perie
1440   $250    $  360,000   Application Consultant --    K. Kimberling     40       40      40      40      40      40      40
                            Customer & Sales Team
380    $185    $   70,300   Application Consultant --    C. Reich                                           40      40      40
                            Customer & Sales Team
1640   $250    $  410,000   Application Consultant --    R. Brodhun        40       40      40      40      40      40      40
                            Supply Chain Team
1520   $230    $  349,600   Application Consultant --    B. Andermo        40       40      40      40      40      40      40
                            Financial
1040   $230    $  239,200   Application Consultant --    O. Anderson       40       40      40      40
                            Supply Chain Team
400    $125    $   50,000   Staff                        S. Mewhirter
                            Consultant -- Financial/
                            Web Tech Writer
320    $185    $   59,200   Staff Consultant -- Supply   J. Pennington
                            Chain
400    $125    $   50,000   Staff                        S. Rankin
                            Consultant -- Customer/ Web
                            Tech Writer
1208   $250    $  302,000   Change Consultant            C. Pearson        24       24      24      24      24      24      24
80     $  0    $        0   Staff Consultant -- Supply   J. Pennington
                            Chain
80     $  0    $        0   Staff                        S. Rankin
                            Consultant -- Customer/ Web
                            Tech Writer
80     $  0    $        0   Staff                        S. Mewhirter
                            Consultant -- Financial/
                            Web Tech Writer
720    $300    $  216,000   Developer 1 -- Conversions   K. Huntly         40       40      40      40      40
600    $230    $  138,000   Report Developer             D. Roesch         40       40
112    $455    $   50,960   Vertex Team Lead             L. Fox             2        2       4       2       2       2       4
66     $285    $   18,810   Vertex Consultant            S. Griffin                          4                               2
78     $185    $   14,430   Vertex Consultant            J. Gee             2        2       2       2       2       2       4
-----------------------------------------------------
18378                         Total Hours
-----------------------------------------------------
<Caption>

                                      9/9    9/16    9/23    9/30    10/7    10/14   10/21   10/28
                                      ------------------------------------------------------------
                                       41      42      43      44      45      46      47      48
                                      ------------------------------------------------------------
ANDERSEN
--------------------------------------------------------------------------------------------------
HOURS    ROLE                          41      42      43      44      45      46      47      48
--------------------------------------------------------------------------------------------------
<S>      <C>                          <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
88       QA Partner                              8                               8
172      Project Partner                 4       4       4       4       4       4       4       4
994      Project Manager                24      24      24      24      24      24      24      24
1640     Functional Lead -- Customer    40      40      40      40      40      40      40      40
         & Sales & Integration Lead
1640     Functional Lead -- Supply      40      40      40      40      40      40      40      40
         Chain Team
1680     Functional                     40      40      40      40      40      40      40      40
         Lead -- Financial
1520     Technical Lead --              40      40      40      40      40      40      40      40
         Development Team
480      Technical Facilitator
1440     Application Consultant --      40      40      40      40      40      40      40      40
         Customer & Sales Team
380      Application Consultant --      40      40      40      20
         Customer & Sales Team
1640     Application Consultant --      40      40      40      40      40      40      40      40
         Supply Chain Team
1520     Application Consultant --      40      40      40      40      40      40      40      40
         Financial
1040     Application Consultant --
         Supply Chain Team
400      Staff                                          40      40      40      40      40      40
         Consultant -- Financial/
         Web Tech Writer
320      Staff Consultant -- Supply                     40      40      40      40      40      40
         Chain
400      Staff                                          40      40      40      40      40      40
         Consultant -- Customer/ Web
         Tech Writer
1208     Change Consultant              24      24      40      40      40      40      40      40
80       Staff Consultant -- Supply
         Chain
80       Staff
         Consultant -- Customer/ Web
         Tech Writer
80       Staff
         Consultant -- Financial/
         Web Tech Writer
720      Developer 1 -- Conversions                                                     40
600      Report Developer
112      Vertex Team Lead                4       4       4       4       4       4       4       2
66       Vertex Consultant               2       2       2       2       2       2       2       2
78       Vertex Consultant               4       4       4       4       4       4       4       2

-----------------------------------
18378      Total Hours
-----------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 11/4    11/11   11/18   11/25   12/2    12/9
                                                                                 ---------------------------------------------
                                                                                  49       50      51      52      53      54
                                                                                 ---------------------------------------------
                                                                                                  ERP GO-LIVE
ANDERSEN            TOTAL
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                                RESOURCE         49      50      51      52      53      54
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
88     $450    $   39,600   QA Partner                          S. Stufflebeme     8                        8
172    $450    $   77,400   Project Partner                     S. Engel           4        4       4       4       4       4
994    $400    $  397,600   Project Manager                     S. Permann        24       24      24      24      24      24
1640   $350    $  574,000   Functional Lead -- Customer &       J. Hallin         40       40      40      40      40      40
                            Sales & Integration Lead
1640   $350    $  574,000   Functional Lead -- Supply Chain     B. Fornadel       40       40      40      40      40      40
                            Team
1680   $350    $  588,000   Functional Lead -- Financial        B. Whalen         40       40      40      40      40      40
1520   $230    $  349,600   Technical Lead -- Development Team  D. Siu            40       40      40      40      40      40
480    $250    $  120,000   Technical Facilitator               M. Perie
1440   $250    $  360,000   Application Consultant -- Customer  K. Kimberling     40       40      40      40      40      40
                            & Sales Team
380    $185    $   70,300   Application Consultant -- Customer  C. Reich
                            & Sales Team
1640   $250    $  410,000   Application Consultant -- Supply    R. Brodhun        40       40      40      40      40      40
                            Chain Team
1520   $230    $  349,600   Application                         B. Andermo        40       40      40      40      40      40
                            Consultant -- Financial
1040   $230    $  239,200   Application Consultant -- Supply    O. Anderson
                            Chain Team
400    $125    $   50,000   Staff Consultant -- Financial/Web   S. Mewhirter      40       40      40      40
                            Tech Writer
320    $185    $   59,200   Staff Consultant -- Supply Chain    J. Pennington     40       40
400    $125    $   50,000   Staff Consultant -- Customer/Web    S. Rankin         40       40      40      40
                            Tech Writer
1208   $250    $  302,000   Change Consultant                   C. Pearson        40       40      40      40      40      40
80     $  0    $        0   Staff Consultant -- Supply Chain    J. Pennington
80     $  0    $        0   Staff Consultant -- Customer/Web    S. Rankin
                            Tech Writer
80     $  0    $        0   Staff Consultant -- Financial/Web   S. Mewhirter
                            Tech Writer
720    $300    $  216,000   Developer 1 -- Conversions          K. Huntly
600    $230    $  138,000   Report Developer                    D. Roesch
112    $455    $   50,960   Vertex Team Lead                    L. Fox             2        2       2       2
66     $285    $   18,810   Vertex Consultant                   S. Griffin         2        2       2       2
78     $185    $   14,430   Vertex Consultant                   J. Gee             2        2       2       2
-------------------------------------------------------------
18378                          Total Hours
-------------------------------------------------------------

<Caption>

                                                12/16   12/23   12/30    1/6    1/13    1/20    1/27     2/3
                                                ------------------------------------------------------------
                                                 55      56      57      58      59      60      61      62
                                                ------------------------------------------------------------
                                                                        ERP GO-LIVE
ANDERSEN
------------------------------------------------------------------------------------------------------------
HOURS     ROLE                                   55      56      57      58      59      60      61      62
------------------------------------------------------------------------------------------------------------
<S>       <C>                                   <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
88        QA Partner                               8                       8
172       Project Partner                          4       4       4       4       4       4       4       4
994       Project Manager                         24      24      24      24      20      20              10
1640      Functional Lead -- Customer &           40      40      40      40      40      40
          Sales & Integration Lead
1640      Functional Lead -- Supply Chain         40      40      40      40      40      40
          Team
1680      Functional Lead -- Financial            40      40      40      40      40      40              40
1520      Technical Lead -- Development Team      40      40      40
480       Technical Facilitator
1440      Application Consultant -- Customer      40      40      40
          & Sales Team
380       Application Consultant -- Customer
          & Sales Team
1640      Application Consultant -- Supply        40      40      40      40      40      40
          Chain Team
1520      Application                             40      40      40
          Consultant -- Financial
1040      Application Consultant -- Supply                40      40      40      40      40      40      80
          Chain Team
400       Staff Consultant -- Financial/Web
          Tech Writer
320       Staff Consultant -- Supply Chain
400       Staff Consultant -- Customer/Web
          Tech Writer
1208      Change Consultant                       40      40      40      24
80        Staff Consultant -- Supply Chain
80        Staff Consultant -- Customer/Web
          Tech Writer
80        Staff Consultant -- Financial/Web
          Tech Writer
720       Developer 1 -- Conversions                              40
600       Report Developer
112       Vertex Team Lead                                         2       2                              16
66        Vertex Consultant                                        2       2                              16
78        Vertex Consultant                                        2       2
--------------------------------------------
18378        Total Hours
--------------------------------------------

</Table>

<PAGE>
                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 4/15    4/22    4/29     5/6    5/13    5/20
                                                                                 ---------------------------------------------
                                                                                  20       21      22      23      24      25
                                                                                 ---------------------------------------------
JDE/THIRD PARTY DIRECT
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                                RESOURCE          20       21      22      23      24      25
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
1680   $140    $  235,200   Developer 2 -- Interfaces           C. Vashi          40       40      40      40      40      40
1680   $140    $  235,200   Developer 3 -- Interfaces           R. Tuscano        40       40      40      40      40      40
1680   $140    $  235,200   Developer 4 -- Interfaces           D. Emanuel        40       40      40      40      40      40
750    $120    $   90,000   Developer 5 -- Interfaces           S. Venkat         40       40      40      40      40      40
550    $130    $   71,500   Developer 6 -- Interfaces           T. Parkin         40       40      40      40      40      40
540    $130    $   70,200   Developer 7 -- Interfaces           P. Divecha        40       40      40      40      40      40
860    $130    $  111,800   Developer 8 -- Enhancements         A. Shetty         40       40      40      40      40      40
620    $130    $   80,600   Developer 9 -- Enhancements         S. Bhambhani      40       40      40      40      40      40
56     $225    $   12,600   Demand Planning Tech Support        Liviu Parvu                                16
1560   $ 26    $   40,560   Project Librarian                   S. Quellette      40       40      40      40      40      40
1120   $110    $  123,200   Data Warehouse Consultant           S. Coan           40       40      40      40      40      40
1720   $ 90    $  154,800   Financials Consultant               B. Garrett        40       40      40      40      40      40
503    $250    $  125,750   JDE CNC Manager                     A. Jacot          15       16      16       8       8      16
934    $200    $  186,800   JDE CNC Consultant                  J. Jang           34       34      31       0      24      24
40     $275    $   11,000   JDE Global Advanced Technology      TBO
-------------------------------------------------------------
14293                       Total Hours
-------------------------------------------------------------
               $1,784,410

<Caption>

                                               5/27    6/3    6/10    6/17    6/24     7/1     7/8    7/15
                                              ------------------------------------------------------------
                                               26      27      28      29      30      31      32      33
                                              ------------------------------------------------------------
JDE/T
----------------------------------------------------------------------------------------------------------
HOURS   ROLE                                   26      27      28      29      30      31      32      33
----------------------------------------------------------------------------------------------------------
<S>     <C>                                   <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
1680    Developer 2 -- Interfaces              40      40      40      40      40      40      40      40
1680    Developer 3 -- Interfaces              40      40      40      40      40      40      40      40
1680    Developer 4 -- Interfaces              40      40      40      40      40      40      40      40
750     Developer 5 -- Interfaces              40      40      40      40      40      40      40      40
550     Developer 6 -- Interfaces              40      40      40      40      40      40      40      40
540     Developer 7 -- Interfaces              40      40      40      40      40      40      40      40
860     Developer 8 -- Enhancements            40      40      40      40      40      40      40      40
620     Developer 9 -- Enhancements            40      40      40      40      40      40      40      40
56      Demand Planning Tech Support                                                   40
1560    Project Librarian                      40      40      40      40      40      40      40      40
1120    Data Warehouse Consultant              40      40      40      40      40      40      40      40
1720    Financials Consultant                  40      40      40      40      40      40      40      40
503     JDE CNC Manager                         8       8       0      16      16       0      16       0
934     JDE CNC Consultant                     24      24       0      24      24       0      24      24
40      JDE Global Advanced Technology                                                                 40
-----------------------------------------
14293   Total Hours
-----------------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                          7/22    7/29     8/5    8/12    8/19    8/26     9/2
                                                                          -----------------------------------------------------
                                                                           34       35      36      37      38      39      40
                                                                          -----------------------------------------------------
JDE/THIRD PARTY DIRECT
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                         RESOURCE          34       35      36      37      38      39      40
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
1680   $140    $  235,200   Developer 2 -- Interfaces    C. Vashi          40       40      40      40      40      40      40
1680   $140    $  235,200   Developer 3 -- Interfaces    R. Tuscano        40       40      40      40      40      40      40
1680   $140    $  235,200   Developer 4 -- Interfaces    D. Emanuel        40       40      40      40      40      40      40
750    $120    $   90,000   Developer 5 -- Interfaces    S. Venkat         40       40      40      40      30
550    $130    $   71,500   Developer 6 -- Interfaces    T. Parkin
540    $130    $   70,200   Developer 7 -- Interfaces    P. Divecha
860    $130    $  111,800   Developer 8 -- Enhancements  A. Shetty         40       40      40      40      40      40      40
620    $130    $   80,600   Developer 9 -- Enhancements  S. Bhambhani      40       20
56     $225    $   12,600   Demand Planning Tech         Liviu Parvu
                            Support
1560   $ 26    $   40,560   Project Librarian            S. Quellette      40       40      40      40      40      40      40
1120   $110    $  123,200   Data Warehouse Consultant    S. Coan           40       40      40      40      40      40      40
1720   $ 90    $  154,800   Financials Consultant        B. Garrett        40       40      40      40      40      40      40
503    $250    $  125,750   JDE CNC Manager              A. Jacot          16       16      16       0      16      16      16
934    $200    $  186,800   JDE CNC Consultant           J. Jang            0       24       0      24      24      24      24
40     $275    $   11,000   JDE Global Advanced          TBO
                            Technology
-------------------------------------------------------
14293                       Total Hours
-------------------------------------------------------

<Caption>

                                       9/9    9/16    9/23    9/30    10/7    10/14   10/21   10/28
                                      -------------------------------------------------------------
                                        41      42      43      44      45      46      47      48
                                      -------------------------------------------------------------
JDE/T
---------------------------------------------------------------------------------------------------
HOURS  ROLE                             41      42      43      44      45      46      47      48
---------------------------------------------------------------------------------------------------
<S>    <C>                            <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
1680   Developer 2 -- Interfaces        40      40      40      40      40      40      40      40
1680   Developer 3 -- Interfaces        40      40      40      40      40      40      40      40
1680   Developer 4 -- Interfaces        40      40      40      40      40      40      40      40
750    Developer 5 -- Interfaces
550    Developer 6 -- Interfaces
540    Developer 7 -- Interfaces
860    Developer 8 -- Enhancements      20
620    Developer 9 -- Enhancements
56     Demand Planning Tech
       Support
1560   Project Librarian                40      40      40      40      40      40      40      40
1120   Data Warehouse Consultant        40      40      40      40      40      40      40
1720   Financials Consultant            40      40      40      40      40      40      40      40
503    JDE CNC Manager                   8      16      16      16      16      16      16      16
934    JDE CNC Consultant               24      30      24      30      24      30      24      24
40     JDE Global Advanced
       Technology
----------------------------------
14293  Total Hours
----------------------------------

</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 11/4    11/11   11/18   11/25   12/2    12/9
                                                                                 ---------------------------------------------
                                                                                  49       50      51      52      53      54
                                                                                 ---------------------------------------------
JDE/THIRD PARTY DIRECT
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES         FEES   ROLE                                RESOURCE          49       50      51      52      53      54
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
1680   $140    $  235,200   Developer 2 -- Interfaces           C. Vashi          40       40      40      40      40      40
1680   $140    $  235,200   Developer 3 -- Interfaces           R. Tuscano        40       40      40      40      40      40
1680   $140    $  235,200   Developer 4 -- Interfaces           D. Emanuel        40       40      40      40      40      40
750    $120    $   90,000   Developer 5 -- Interfaces           S. Venkat
550    $130    $   71,500   Developer 6 -- Interfaces           T. Parkin
540    $130    $   70,200   Developer 7 -- Interfaces           P. Divecha
860    $130    $  111,800   Developer 8 -- Enhancements         A. Shetty
620    $130    $   80,600   Developer 9 -- Enhancements         S. Bhambhani
56     $225    $   12,600   Demand Planning Tech Support        Liviu Parvu
1560   $ 26    $   40,560   Project Librarian                   S. Quellette      40       40      40      40      40      40
1120   $110    $  123,200   Data Warehouse Consultant           S. Coan
1720   $ 90    $  154,800   Financials Consultant               B. Garrett        40       40      40      40      40      40
503    $250    $  125,750   JDE CNC Manager                     A. Jacot          16       16      16      16      16      16
934    $200    $  186,800   JDE CNC Consultant                  J. Jang           30       24      30      30      24      24
40     $275    $   11,000   JDE Global Advanced Technology      TBO
----------------------------------------------------------
14293                       Total Hours
----------------------------------------------------------

<Caption>

                                              12/16   12/23   12/30    1/6    1/13    1/20    1/27     2/3
                                              -------------------------------------------------------------
                                                55      56      57      58      59      60      61      62
                                              -------------------------------------------------------------
JDE/T
-----------------------------------------------------------------------------------------------------------
HOURS    ROLE                                   55      56      57      58      59      60      61      62
-----------------------------------------------------------------------------------------------------------
<S>      <C>                                  <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
1680     Developer 2 -- Interfaces              40      40      40      40      40      40      40
1680     Developer 3 -- Interfaces              40      40      40      40      40      40      40
1680     Developer 4 -- Interfaces              40      40      40      40      40      40      40
750      Developer 5 -- Interfaces
550      Developer 6 -- Interfaces
540      Developer 7 -- Interfaces
860      Developer 8 -- Enhancements
620      Developer 9 -- Enhancements
56       Demand Planning Tech Support
1560     Project Librarian                      40      40      40      40
1120     Data Warehouse Consultant
1720     Financials Consultant                  40      40      40      40      40      40      40      40
503      JDE CNC Manager                        16      16      16
934      JDE CNC Consultant                     24      24      40      40      24
40       JDE Global Advanced Technology
---------------------------------------
14293    Total Hours
---------------------------------------
</Table>

<PAGE>
                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                          4/15    4/22    4/29     5/6    5/13    5/20    5/27
                                                                          -----------------------------------------------------
                                                                           20       21      22      23      24      25      26
                                                                          -----------------------------------------------------
9-8 CONVERSION
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          20       21      22      23      24      25      26
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
190    $ 50    $    9,500   Conversion Developer 1       G. Cochran        30       25      25      25      25
65     $ 55    $    3,575   Conversion Developer 2 --    S. Bennett                                         25      50
                            Interfaces
               $    8,000   Outside Development -- IVR   TBD
------------------------------------------------------
255                         Total Hours
------------------------------------------------------
               $   21,075

<Caption>
                                     6/3    6/10    6/17    6/24     7/1     7/8    7/15
                                     ----------------------------------------------------
                                      27      28      29      30      31      32      33
                                     ----------------------------------------------------
9-8 CONVERSION
-----------------------------------------------------------------------------------------
HOURS  ROLE                           27      28      29      30      31      32      33
-----------------------------------------------------------------------------------------
<S>    <C>                            <C>     <C>     <C>     <C>     <C>     <C>     <C>
190    Conversion Developer 1                                  10      10      10      30
65     Conversion Developer 2 --                                4       4       4       8
       Interfaces
       Outside Development -- IVR
---------------------------------
255    Total Hours
---------------------------------
</Table>

<Table>
<Caption>
                                                                          4/15    4/22    4/29     5/6    5/13    5/20    5/27
                                                                          -----------------------------------------------------
                                                                           20       21      22      23      24      25      26
                                                                          -----------------------------------------------------
COMMISSION
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          20       21      22      23      24      25      26
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
510    $ 55    $   28,050   Commissions Consultant --    S. Bennett        30       30      30      30      30      30      30
                            Developer 1
680    $110    $   74,800   Commissions Consultant --    S. Hayward        40       40      40      40      40      40      40
                            Application Architect
680    $ 80    $   54,500   Commissions Consultant --    A. Potemkin       40       40      40      40      40      40      40
                            Developer 2
680    $ 80    $   54,400   Commissions Consultant --    C. Tennant        40       40      40      40      40      40      40
                            Project Manager
------------------------------------------------------
2550                        Total Hours
------------------------------------------------------
               $  211,650
------------------------------------------------------
35476          $5,248,303   Grand Total
------------------------------------------------------

<Caption>

                                               6/3    6/10    6/17    6/24     7/1     7/8    7/15
                                               ---------------------------------------------------
                                               27      28      29      30      31      32      33
                                               ---------------------------------------------------
COMMISSION
--------------------------------------------------------------------------------------------------
HOURS         ROLE                             27      28      29      30      31      32      33
--------------------------------------------------------------------------------------------------
<S>           <C>                              <C>     <C>     <C>     <C>     <C>     <C>     <C>
510           Commissions Consultant --        30      30      30      30      30      30      30
              Developer 1
680           Commissions Consultant --        40      40      40      40      40      40      40
              Application Architect
680           Commissions Consultant --        40      40      40      40      40      40      40
              Developer 2
680           Commissions Consultant --        40      40      40      40      40      40      40
              Project Manager
----------------------------------------
2550          Total Hours
----------------------------------------
35476         Grand Total
----------------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING

<Table>
<Caption>
                                                                          7/22    7/29     8/5    8/12    8/19    8/26     9/2
                                                                          -----------------------------------------------------
                                                                           34       35      36      37      38      39      40
                                                                          -----------------------------------------------------
9-8 CONVERSION
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          34       35      36      37      38      39      40
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
190    $ 50    $    9,500   Conversion Developer 1       G. Cochran
65     $ 55    $    3,575   Conversion Developer 2 --    S. Bennett
                            Interfaces
               $    8,000   Outside Development -- IVR   TBD
-------------------------------------------------------
255                         Total Hours
-------------------------------------------------------
               $   21,075

<Caption>

                                       9/9    9/16    9/23    9/30    10/7    10/14   10/21   10/28
                                       ------------------------------------------------------------
                                       41      42      43      44      45      46      47      48
                                       ------------------------------------------------------------
9-8 CONVERSION
---------------------------------------------------------------------------------------------------
HOURS    ROLE                          41      42      43      44      45      46      47      48
---------------------------------------------------------------------------------------------------
<S>      <C>                           <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
190      Conversion Developer 1
65       Conversion Developer 2 --
         Interfaces
         Outside Development -- IVR
------------------------------------
255      Total Hours
------------------------------------

</Table>

<Table>
<Caption>
                                                                          7/22    7/29     8/5    8/12    8/19    8/26     9/2
                                                                          -----------------------------------------------------
                                                                           34       35      36      37      38      39      40
                                                                          -----------------------------------------------------
COMMISSION
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          34       35      36      37      38      39      40
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
510    $ 55    $   28,050   Commissions Consultant --    S. Bennett        30       30      30
                            Developer 1
680    $110    $   74,800   Commissions Consultant --    S. Hayward        40       40      40
                            Application Architect
680    $ 80    $   54,500   Commissions Consultant --    A. Potemkin       40       40      40
                            Developer 2
680    $ 80    $   54,400   Commissions Consultant --    C. Tennant        40       40      40
                            Project Manager
-------------------------------------------------------
2550                        Total Hours
-------------------------------------------------------
               $  211,650
-------------------------------------------------------
35476          $5,248,303   Grand Total
-------------------------------------------------------

<Caption>

                                            9/9    9/16    9/23    9/30    10/7    10/14   10/21   10/28
                                            ------------------------------------------------------------
                                             41      42      43      44      45      46      47      48
                                            ------------------------------------------------------------
COMMISSION
--------------------------------------------------------------------------------------------------------
HOURS        ROLE                            41      42      43      44      45      46      47      48
--------------------------------------------------------------------------------------------------------
<S>          <C>                            <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
510          Commissions Consultant --
             Developer 1
680          Commissions Consultant --
             Application Architect
680          Commissions Consultant --
             Developer 2
680          Commissions Consultant --
             Project Manager
----------------------------------------
2550         Total Hours
----------------------------------------
35476        Grand Total
----------------------------------------

</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 11/4    11/11   11/18   11/25   12/2    12/9
                                                                                 ---------------------------------------------
                                                                                  49       50      51      52      53      54
                                                                                 ---------------------------------------------
9-8 CONVERSION
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                                RESOURCE          49       50      51      52      53      54
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
190    $ 50    $    9,500   Conversion Developer 1              G. Cochran
65     $ 55    $    3,575   Conversion Developer 2 --           S. Bennett
                            Interfaces
               $    8,000   Outside Development -- IVR          TBD
--------------------------------------------------------
255                         Total Hours
--------------------------------------------------------
               $   21,075

<Caption>

                                             12/16   12/23   12/30    1/6    1/13    1/20    1/27     2/3
                                             ------------------------------------------------------------
                                              55      56      57      58      59      60      61      62
                                             ------------------------------------------------------------
9-8 CONVERSION
---------------------------------------------------------------------------------------------------------
HOURS   ROLE                                  55      56      57      58      59      60      61      62
---------------------------------------------------------------------------------------------------------
<S>     <C>                                  <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
190     Conversion Developer 1
65      Conversion Developer 2 --
        Interfaces
        Outside Development -- IVR
------------------------------------
255     Total Hours
------------------------------------

</Table>

<Table>
<Caption>
                                                                                 11/4    11/11   11/18   11/25   12/2    12/9
                                                                                 ---------------------------------------------
                                                                                  49       50      51      52      53      54
                                                                                 ---------------------------------------------
COMMISSION
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                                RESOURCE          49       50      51      52      53      54
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
510    $ 55    $   28,050   Commissions Consultant --           S. Bennett
                            Developer 1
680    $110    $   74,800   Commissions Consultant --           S. Hayward
                            Application Architect
680    $ 80    $   54,500   Commissions Consultant --           A. Potemkin
                            Developer 2
680    $ 80    $   54,400   Commissions Consultant --           C. Tennant
                            Project Manager
-------------------------------------------------------
2550                        Total Hours
-------------------------------------------------------
               $  211,650
-------------------------------------------------------
35476          $5,248,303   Grand Total
-------------------------------------------------------

<Caption>

                                                     12/16   12/23   12/30    1/6    1/13    1/20    1/27     2/3
                                                     -------------------------------------------------------------
                                                      55      56      57      58      59      60      61      62
                                                     -------------------------------------------------------------
COMMISSION
------------------------------------------------------------------------------------------------------------------
HOURS       ROLE                                      55      56      57      58      59      60      61      62
------------------------------------------------------------------------------------------------------------------
<S>         <C>                                      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
510         Commissions Consultant --
            Developer 1
680         Commissions Consultant --
            Application Architect
680         Commissions Consultant --
            Developer 2
680         Commissions Consultant --
            Project Manager
----------------------------------------
2550        Total Hours
----------------------------------------
35476       Grand Total
----------------------------------------
</Table>

<PAGE>
                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                          4/15    4/22    4/29     5/6    5/13    5/20    5/27
                                                                          -----------------------------------------------------
                                                                           20       21      22      23      24      25      26
                                                                          -----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          20       21      22      23      24      25      26
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
-280   $118    $  (33,040)  Script Writer                TBD
                            Support -- CS -- Caanan
-400   $159    $  (63,600)  HIG Knowledge Tansfer --     TBD
                            CS -- Kristy
-400   $147    $  (58,800)  HIG Knowledge Tansfer --     TBD
                            FN -- Britt
------------------------------------------------------
-1080                       Total Hours
------------------------------------------------------
               $ (155,440)  (Less of Andersen Time)
------------------------------------------------------
34396          $5,092,863   Grand Total w/Backfill
------------------------------------------------------
32692          $4,811,237   Grand Total
                            w/Backfill -- Pre Go-live
                            Only
------------------------------------------------------
1704           $  281,626   Grand Total
                            w/Backfill -- Post Go-live
                            Only
------------------------------------------------------

<Caption>

                                      6/3    6/10    6/17    6/24     7/1     7/8    7/15
                                     -----------------------------------------------------
                                       27      28      29      30      31      32      33
                                     -----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
------------------------------------------------------------------------------------------
HOURS   ROLE                           27      28      29      30      31      32      33
------------------------------------------------------------------------------------------
<S>     <C>                           <C>     <C>     <C>     <C>     <C>     <C>     <C>
-280    Script Writer
        Support -- CS -- Caanan
-400    HIG Knowledge Tansfer --
        CS -- Kristy
-400    HIG Knowledge Tansfer --
        FN -- Britt
----------------------------------
-1080   Total Hours
----------------------------------
        (Less of Andersen Time)
----------------------------------
34396   Grand Total w/Backfill
----------------------------------
32692   Grand Total
        w/Backfill -- Pre Go-live
        Only
----------------------------------
1704    Grand Total
        w/Backfill -- Post Go-live
        Only
----------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                          7/22    7/29     8/5    8/12    8/19    8/26     9/2
                                                                          -----------------------------------------------------
                                                                           34       35      36      37      38      39      40
                                                                          -----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
-------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                         RESOURCE          34       35      36      37      38      39      40
-------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                          <C>              <C>     <C>     <C>     <C>     <C>     <C>     <C>
-280   $118    $  (33,040)  Script Writer                TBD                                               -40     -40     -40
                            Support -- CS -- Caanan
-400   $159    $  (63,600)  HIG Knowledge Tansfer --     TBD                                                              Start
                            CS -- Kristy                                                                          Participation
                                                                                                                           Here
-400   $147    $  (58,800)  HIG Knowledge Tansfer --                                                                      Start
                            FN -- Britt                                                                           Participation
                                                                                                                           Here
------------------------------------------------------
-1080                       Total Hours
------------------------------------------------------
               $ (155,440)  (Less of Andersen Time)
------------------------------------------------------
34396          $5,092,863   Grand Total w/Backfill
------------------------------------------------------
32692          $4,811,237   Grand Total
                            w/Backfill -- Pre Go-live
                            Only
------------------------------------------------------
1704           $  281,626   Grand Total
                            w/Backfill -- Post Go-live
                            Only
------------------------------------------------------

<Caption>

                                     9/9    9/16    9/23    9/30    10/7    10/14   10/21   10/28
                                    -------------------------------------------------------------
                                      41      42      43      44      45      46      47      48
                                    -------------------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
-------------------------------------------------------------------------------------------------
HOURS   ROLE                          41      42      43      44      45      46      47      48
-------------------------------------------------------------------------------------------------
<S>     <C>                         <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
-280    Script Writer                -40     -40     -40     -40
        Support -- CS -- Caanan
-400    HIG Knowledge Tansfer --                                                             -40
        CS -- Kristy

-400    HIG Knowledge Tansfer --                                                             -40
        FN -- Britt
----------------------------------
-1080   Total Hours
----------------------------------
        (Less of Andersen Time)
----------------------------------
34396   Grand Total w/Backfill
----------------------------------
32692   Grand Total
        w/Backfill -- Pre Go-live
        Only
----------------------------------
1704    Grand Total
        w/Backfill -- Post Go-live
        Only
----------------------------------
</Table>

                 HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B

                       WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
                                                                                 11/4    11/11   11/18   11/25   12/2    12/9
                                                                                 ---------------------------------------------
                                                                                  49       50      51      52      53      54
                                                                                 ---------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
------------------------------------------------------------------------------------------------------------------------------
HOURS  RATES   FEES         ROLE                                RESOURCE          49       50      51      52      53      54
------------------------------------------------------------------------------------------------------------------------------
<S>    <C>     <C>          <C>                                 <C>              <C>     <C>     <C>     <C>     <C>     <C>
-280   $118    $  (33,040)  Script Writer                       TBD
                            Support -- CS -- Caanan
-400   $159    $  (63,600)  HIG Knowledge Tansfer --            TBD              -40      -40     -40     -40     -40     -40
                            CS -- Kristy
-400   $147    $  (58,800)  HIG Knowledge Tansfer --            TBD              -40      -40     -40     -40     -40     -40
                            FN -- Britt
-----------------------------------------------------------
-1080                       Total Hours
-----------------------------------------------------------
               $ (155,440)  (Less of Andersen Time)
-----------------------------------------------------------
34396          $5,092,863   Grand Total w/Backfill
-----------------------------------------------------------
32692          $4,811,237   Grand Total
                            w/Backfill -- Pre Go-live
                            Only
-----------------------------------------------------------
1704           $  281,626   Grand Total
                            w/Backfill -- Post Go-live
                            Only
-----------------------------------------------------------

<Caption>

                                            12/16   12/23   12/30    1/6    1/13    1/20    1/27     2/3
                                            ------------------------------------------------------------
                                             55      56      57      58      59      60      61      62
                                            ------------------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
--------------------------------------------------------------------------------------------------------
HOURS  ROLE                                  55      56      57      58      59      60      61      62
--------------------------------------------------------------------------------------------------------
<S>    <C>                                  <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
-280   Script Writer
       Support -- CS -- Caanan
-400   HIG Knowledge Tansfer --              -40     -40     -40
       CS -- Kristy
-400   HIG Knowledge Tansfer --              -40     -40     -40
       FN -- Britt
--------------------------------------
-1080  Total Hours
--------------------------------------
       (Less of Andersen Time)
--------------------------------------
34396  Grand Total w/Backfill
--------------------------------------
32692  Grand Total
       w/Backfill -- Pre Go-live
       Only
--------------------------------------
1704   Grand Total
       w/Backfill -- Post Go-live
       Only
--------------------------------------
</Table><PAGE>
                                                                    EXHIBIT 10.4

                                      LEASE

                     CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P.,

                                    Landlord,

                                       and

                         HOME INTERIORS AND GIFTS, INC.,

                                     Tenant

MTIN
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                        PAGE
<S>                                                                                                                     <C>
1.        USE AND RESTRICTIONS ON USE ..................................................................................  1
2.        TERM .........................................................................................................  2
3.        RENT .........................................................................................................  2
4.        RENT ADJUSTMENTS .............................................................................................  2
5.        SECURITY DEPOSIT .............................................................................................  4
6.        ALTERATIONS ..................................................................................................  4
7.        REPAIR .......................................................................................................  5
8.        LIENS ........................................................................................................  5
9.        ASSIGNMENT AND SUBLETTING ....................................................................................  6
10.       INDEMNIFICATION ..............................................................................................  6
11.       INSURANCE ....................................................................................................  6
12.       WAIVER OF SUBROGATION ........................................................................................  6
13.       SERVICES AND UTILITIES .......................................................................................  7
14.       HOLDING OVER .................................................................................................  7
15.       SUBORDINATION ................................................................................................  7
16.       RULES AND REGULATIONS ........................................................................................  7
17.       REENTRY BY LANDLORD ..........................................................................................  7
18.       DEFAULT ......................................................................................................  8
19.       REMEDIES .....................................................................................................  8
20.       TENANT'S BANKRUPTCY OR INSOLVENCY ............................................................................ 10
21.       QUIET ENJOYMENT .............................................................................................. 11
22.       CASUALTY ..................................................................................................... 11
23.       EMINENT DOMAIN ............................................................................................... 12
24.       SALE BY LANDLORD ............................................................................................. 12
25.       ESTOPPEL CERTIFICATES ........................................................................................ 12
26.       SURRENDER OF PREMISES ........................................................................................ 13
27.       NOTICES ...................................................................................................... 13
28.       TAXES PAYABLE BY TENANT ...................................................................................... 13
29.       INTENTIONALLY DELETED ........................................................................................ 13
30.       DEFINED TERMS AND HEADINGS ................................................................................... 14
31.       TENANT'S AUTHORITY ........................................................................................... 14
32.       FINANCIAL STATEMENTS AND CREDIT REPORTS ...................................................................... 14
33.       COMMISSIONS .................................................................................................. 14
34.       TIME AND APPLICABLE LAW ...................................................................................... 14
35.       SUCCESSORS AND ASSIGNS ....................................................................................... 14
36.       ENTIRE AGREEMENT ............................................................................................. 14
</Table>

                                                                            MTIN
                                       -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                                                        PAGE
<S>                                                                                                                     <C>
37.       EXAMINATION NOT OPTION....................................................................................     14
38.       RECORDATION...............................................................................................     14
39.       LIMITATION OF LANDLORD'S LIABILITY........................................................................     15
</Table>

EXHIBIT A -- FLOOR PLAN DEPICTING THE PREMISES
EXHIBIT A-1 -- SITE PLAN
EXHIBIT B -- INITIAL ALTERATIONS
EXHIBIT C -- COMMENCEMENT DATE MEMORANDUM
EXHIBIT D -- RULES AND REGULATIONS
EXHIBIT E -- ADDITIONAL SURRENDER CONDITIONS
EXHIBIT F -- ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT

                                                                            MTIN
                                      -ii-
<PAGE>

                        MULTI-TENANT INDUSTRIAL NET LEASE

                                 REFERENCE PAGES

<Table>
<S>                                              <C>
BUILDING:                                        Frankford Trade Center
                                                 2828 Trade Center Blvd., Carrollton, Texas

LANDLORD:                                        CalWest Industrial Holdings Texas, L.P., a Delaware
                                                 limited partnership

LANDLORD'S ADDRESS:                              c/o RREEF Management Company
                                                 1406 Halsey Way, Suite 110
                                                 Carrollton, Texas 75007

WIRING INSTRUCTIONS AND/OR ADDRESS FOR           Frankford Trade Center
RENT PAYMENT:                                    PO Box 847555
                                                 Dallas, Texas 75284-7555

LEASE REFERENCE DATE:                            July 17, 2002

TENANT:                                          Home Interiors and Gifts, Inc.

TENANT'S NOTICE ADDRESS:

         (a) As of beginning of Term:            1649 Frankford Road West
                                                 Carrollton, Texas 75007

         (b) Prior to beginning of Term
             (if different):                     N/A

PREMISES ADDRESS:                                2828 Trade Center, Suite Number 100,
                                                 Carrollton, Texas 75007

PREMISES RENTABLE AREA:                          approximately 147,638 sq. ft. (for outline of
                                                 Premises see Exhibit A)

USE:                                             Warehouse, storage and distribution of home
                                                 accessories and gifts

SCHEDULED COMMENCEMENT DATE:                     July 23, 2002

TERM OF LEASE:                                   Approximately one (1) year, zero (0) months and
                                                 eight (8) days beginning on the Commencement Date
                                                 and ending on the Termination Date. The period from
                                                 the Commencement Date to the last day of the same
                                                 month is the "Commencement Month"

TERMINATION DATE:                                July 31, 2003

ANNUAL RENT and MONTHLY INSTALLMENT OF
RENT(Article 3):
</Table>

<Table>
<Caption>
                           RENTABLE                                                     MONTHLY
                            SQUARE          ANNUAL RENT PER       ANNUAL             INSTALLMENT OF
     PERIOD                FOOTAGE            SQUARE FOOT          RENT                   RENT
------------------         --------         ---------------       ------             --------------
from       through
----       -------
<S>       <C>              <C>              <C>                 <C>                  <C>
7/23/02   7/31/03           147,638              $3.00          $442,914.00            $36,909.50
</Table>

<Table>
<S>                                              <C>
INITIAL ESTIMATED MONTHLY INSTALLMENT            $11,072.86 ($3,321.86 Common Area Maintenance;
OF RENT ADJUSTMENTS (Article 4)                  $7,012.81 Tax; $738.19 Insurance)

TENANT'S PROPORTIONATE SHARE:                    21%
</Table>

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                                       iii
<PAGE>
<Table>
<S>                                              <C>
SECURITY DEPOSIT:                                $36,909.50

ASSIGNMENT/SUBLETTING FEE                        N/A

REAL ESTATE BROKER DUE COMMISSION:               The Staubach Companies and Cushman & Wakefield of
                                                 Texas, Inc.

TENANT'S SIC CODE:                               5023

AMORTIZATION RATE:                               N/A
</Table>

The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. This Lease includes Exhibits A through F,
all of which are made a part of this Lease.

LANDLORD:                                   TENANT:

CALWEST INDUSTRIAL HOLDINGS TEXAS,          HOME INTERIORS AND GIFTS, INC.
L.P., A DELAWARE LIMITED PARTNERSHIP

By:    CalWest Texas, LLC, a Delaware
       limited liability company

Its:   General Partner

By:    RREEF Management Company, a
       Delaware corporation

Its:   Property Manager

By:    /s/ CYNTHIA PRENDERGAST              By:    /s/ KENNETH J. CICHOCKI
       --------------------------------            -----------------------------

Name:  Cynthia Prendergast                  Name:  Kenneth J. Cichocki

Title: District Manager                     Title: Chief Financial Officer

Dated: July 29, 2002                        Dated: July 25, 2002

                                                             --------
                                                             Initials
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                                       iv
<PAGE>

                                      LEASE

         By this Lease Landlord leases to Tenant and Tenant leases from Landlord
the Premises in the Building as set forth and described on the Reference Pages.
The Premises are depicted on the floor plan attached hereto as Exhibit A, and
the Building is depicted on the site plan attached hereto as Exhibit A-1. The
Reference Pages, including all terms defined thereon, are incorporated as part
of this Lease.

1. USE AND RESTRICTIONS ON USE.

         1.1 The Premises are to be used solely for the purposes set forth on
the Reference Pages. Notwithstanding anything contained herein to the contrary,
Tenant may change the use set forth on the Reference Pages with Landlord's
consent, which consent shall not be unreasonably withheld. Tenant shall not do
or permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or injure, annoy, or disturb them, or allow the Premises to be used for
any improper, immoral, unlawful, or objectionable purpose, or commit any waste.
Tenant shall not do, permit or suffer in, on, or about the Premises the sale of
any alcoholic liquor without the written consent of Landlord first obtained.
Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the Premises and its occupancy and shall promptly
comply with all governmental orders and directions for the correction,
prevention and abatement of any violations in the Building or appurtenant land,
caused or permitted by, or resulting from the specific use by, Tenant or in or
upon, or in connection with, the Premises, all at Tenant's sole expense. Tenant
shall not do or permit anything to be done on or about the Premises or bring or
keep anything into the Premises which will in any way increase the rate of,
invalidate or prevent the procuring of any insurance protecting against loss or
damage to the Building or any of its contents by fire or other casualty or
against liability for damage to property or injury to persons in or about the
Building or any part thereof.

         1.2 Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employee's, licensees or invitees (collectively, the
"Tenant Entities") to at any time handle, use, manufacture, store or dispose of
in or about the Premises or the Building any (collectively "Hazardous
Materials") flammables, explosives, radioactive materials, hazardous wastes or
materials, toxic wastes or materials, or other similar substances, petroleum
products or derivatives or any substance subject to regulation by or under any
federal, state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively "Environmental Laws"), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as defined in Article
30) harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney's fees) incurred by reason of any actual or
asserted failure of Tenant to fully comply with all applicable Environmental
Laws, or the presence, handling, use or disposition in or from the Premises of
any Hazardous Materials by Tenant or any Tenant Entity (even though permissible
under all applicable Environmental Laws or the provisions of this Lease), or by
reason of any actual or asserted failure of Tenant to keep, observe, or perform
any provision of this Section 1.2. Tenant hereby acknowledges that Tenant has
completed, executed and delivered to Landlord the Environmental Questionnaire
attached hereto and incorporated herein as Exhibit F and reaffirms that all
information provided in such Environmental Questionnaire is true and complete in
all respects as of the date hereof. Tenant shall not have any liability to
Landlord or to any third party under this Section 1.2 resulting from any
conditions existing, or events occurring, or any Hazardous Materials existing or
generated, at, in, on, under or in connection with the Premises prior to the
Commencement Date (herein defined).

         1.3 Tenant and the Tenant Entities will be entitled to the
non-exclusive use of the common areas of the Building as they exist from time to
time during the Term, including the parking facilities, subject to Landlord's
rules and regulations regarding such use. However, in no event will Tenant or
the Tenant Entities park more vehicles in the parking facilities than Tenant's
Proportionate Share of the total parking spaces available for common use. The
foregoing shall not be deemed to provide Tenant with an exclusive right to any
parking spaces or any guaranty of the availability of any particular parking
spaces or any specific number of parking spaces.

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                                       1
<PAGE>

2. TERM.

         2.1 The Term of this Lease shall begin on the date ("Commencement
Date") which shall be the Scheduled Commencement Date as shown on the Reference
Pages, and shall terminate on the date as shown on the Reference Pages
("Termination Date"), unless sooner terminated by the provisions of this Lease.
Landlord shall tender possession of the Premises on the Commencement Date and
all the work, if any, to be performed by Landlord pursuant to Exhibit B to this
Lease shall be completed within thirty (30) days of the Commencement Date.
Tenant shall deliver a punch list of items not completed within thirty (30) days
after Landlord tenders possession of the Premises and Landlord agrees to proceed
with due diligence to perform its obligations regarding such items. Tenant
shall, at Landlord's request, execute and deliver a memorandum agreement
provided by Landlord in the form of Exhibit C attached hereto, setting forth the
actual Commencement Date, Termination Date and, if necessary, a revised rent
schedule. Should Tenant fail to do so within thirty (30) days after Landlord's
request, the information set forth in such memorandum provided by Landlord shall
be conclusively presumed to be agreed and correct.

         2.2 Tenant agrees that in the event of the inability of Landlord to
deliver possession of the Premises on the Scheduled Commencement Date for any
reason, Landlord shall not be liable for any damage resulting from such
inability, but Tenant shall not be liable for any rent until the time when
Landlord can, after notice to Tenant, deliver possession of the Premises to
Tenant. No such failure to give possession on the Scheduled Commencement Date
shall affect the other obligations of Tenant under this Lease, except that if
Landlord is unable to deliver possession of the Premises within seven (7) days
after the Scheduled Commencement Date, Tenant shall have the option to terminate
this Lease unless said delay is as a result of: (a) Tenant's failure to agree to
plans and specifications and/or construction cost estimates or bids; (b)
Tenant's request for materials, finishes or installations other than Landlord's
standard except those, if any, that Landlord shall have expressly agreed to
furnish without extension of time agreed by Landlord; (c) Tenant's change in any
plans or specifications; or, (d) performance or completion by a party employed
by Tenant (each of the foregoing, a "Tenant Delay"). If any delay is the result
of a Tenant Delay, the Commencement Date and the payment of rent under this
Lease shall be accelerated by the number of days of such Tenant Delay.

         2.3 In the event Landlord permits Tenant, or any agent, employee or
contractor of Tenant, to enter, use or occupy the Premises prior to the
Commencement Date, such entry, use or occupancy shall be subject to all the
provisions of this Lease other than the payment of rent, including, without
limitation, Tenant's compliance with the insurance requirements of Article 11.
Said early possession shall not advance the Termination Date.

3. RENT.

         3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from
time to time by paying the Monthly Installment of Rent then in effect on or
before the first day of each full calendar month during the Term, except that
the first full month's rent shall be paid upon the execution of this Lease. The
Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of
the Annual Rent in effect at such time. Rent for any period during the Term
which is less than a full month shall be a prorated portion of the Monthly
Installment of Rent based upon the number of days in such month. Said rent shall
be paid to Landlord, without deduction or offset and without notice or demand,
at the Rent Payment Address, as set forth on the Reference Pages, or to such
other person or at such other place as Landlord may from time to time designate
in writing. If an Event of Default occurs, Landlord may require by notice to
Tenant that all subsequent rent payments be made by an automatic payment from
Tenant's bank account to Landlord's account, without cost to Landlord. Tenant
must implement such automatic payment system prior to the next scheduled rent
payment or within ten (10) days after Landlord's notice, whichever is later.
Unless specified in this Lease to the contrary, all amounts and sums payable by
Tenant to Landlord pursuant to this Lease shall be deemed additional rent.

         3.2 Tenant recognizes that late payment of any rent or other sum due
under this Lease will result in administrative expense to Landlord, the extent
of which additional expense is extremely difficult and economically impractical
to ascertain. Tenant therefore agrees that if rent or any other sum is not paid
within seven (7) days after due and payable pursuant to this Lease, a late
charge shall be imposed in an amount equal to the greater of: (a) Fifty Dollars
($50.00), or (b) four percent (4%) of the unpaid rent or other payment. The
amount of the late charge to be paid by Tenant shall be reassessed and added to
Tenant's obligation for each successive month until paid. The provisions of this
Section 3.2 in no way relieve Tenant of the obligation to pay rent or other
payments on or before the date on which they are due, nor do the terms of this
Section 3.2 in any way affect Landlord's remedies pursuant to Article 19 of this
Lease in the event said rent or other payment is unpaid after date due.

4. RENT ADJUSTMENTS.

         4.1 For the purpose of this Article 4, the following terms are defined
as follows:

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                                        2
<PAGE>

                  4.1.1 LEASE YEAR: Each fiscal year (as determined by Landlord
from time to time) falling partly or wholly within the Term.

                  4.1.2 EXPENSES: All reasonable and customary costs of
operation, maintenance, repair, replacement and management of the Building
(including the amount of any credits which Landlord may grant to particular
tenants of the Building in lieu of providing any standard services or paying any
standard costs described in this Section 4.1.2 for similar tenants), as
determined in accordance with generally accepted accounting principles,
including the following costs by way of illustration, but not limitation: water
and sewer charges; insurance charges of or relating to all insurance policies
and endorsements deemed by Landlord to be reasonably necessary or desirable and
relating in any manner to the protection, preservation, or operation of the
Building or any part thereof; utility costs, including, but not limited to, the
cost of heat, light, power, steam, gas; waste disposal; the cost of janitorial
services; the cost of security and alarm services (including any central station
signaling system); costs of cleaning, repairing, replacing and maintaining the
common areas, including parking and landscaping, window cleaning costs; labor
costs; costs and expenses of managing the Building including management and/or
administrative fees; air conditioning maintenance costs; elevator maintenance
fees and supplies; material costs; equipment costs including the cost of
maintenance, repair and service agreements and rental and leasing costs;
purchase costs of equipment; current rental and leasing costs of items which
would be capital items if purchased; tool costs; licenses, permits and
inspection fees; wages and salaries; employee benefits and payroll taxes;
accounting and legal fees; any sales, use or service taxes incurred in
connection therewith. In addition, Landlord shall be entitled to recover, as
additional rent (which, along with any other capital expenditures constituting
Expenses, Landlord may either include in Expenses or cause to be billed to
Tenant along with Expenses and Taxes but as a separate item), Tenant's
Proportionate Share of: (i) an allocable portion of the cost of capital
improvement items which are reasonably calculated to reduce operating expenses;
(ii) the cost of fire sprinklers and suppression systems and other life safety
systems; and (iii) other capital expenses which are required under any
governmental laws, regulations or ordinances which were not applicable to the
Building at the time it was constructed; but the costs described in this
sentence shall be amortized over the reasonable life of such expenditures in
accordance with such reasonable life and amortization schedules as shall be
determined by Landlord in accordance with generally accepted accounting
principles, with interest on the unamortized amount at one percent (1%) in
excess of the Wall Street Journal prime lending rate announced from time to
time. Expenses shall not include depreciation or amortization of the Building or
equipment in the Building except as provided herein, loan principal payments,
costs of alterations of tenants' premises, leasing commissions, interest
expenses on long-term borrowings or advertising costs.

                  4.1.3 TAXES: Real estate taxes and any other taxes, charges
and assessments which are levied with respect to the Building or the land
appurtenant to the Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Building and used in connection with the operation of the Building and said
land, any payments to any ground lessor in reimbursement of tax payments made by
such lessor and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Taxes shall not include any franchise, or
estate, inheritance or net income tax, or tax imposed upon any transfer by
Landlord of its interest in this Lease or the Building or any taxes to be paid
by Tenant pursuant to Article 28.

         4.2 Tenant shall pay as additional rent for each Lease Year Tenant's
Proportionate Share of Expenses and Taxes incurred for such Lease Year. Landlord
agrees to promptly pay any Expenses and Taxes when due.

         4.3 The annual determination of Expenses shall be made by Landlord and
shall be binding upon Landlord and Tenant, subject to the provisions of this
Section 4.3. During the Term, Tenant may review, at Tenant's sole cost and
expense, the books and records supporting such determination in an office of
Landlord, or Landlord's agent, during normal business hours, upon giving
Landlord five (5) days advance written notice within sixty (60) days after
receipt of such determination, but in no event more often than once in any one
(1) year period, subject to execution of a confidentiality agreement acceptable
to Landlord, and provided that if Tenant utilizes an independent accountant to
perform such review it shall be one of national standing which is reasonably
acceptable to Landlord, is not compensated on a contingency basis and is also
subject to such confidentiality agreement. If Tenant fails to object to
Landlord's determination of Expenses within one hundred eighty (180) days after
receipt, or if any such objection fails to state with specificity the reason for
the objection, Tenant shall be deemed to have approved such determination and
shall have no further right to object to or contest such determination. In the
event that during all or any portion of any Lease Year or Base Year, the
Building is not fully rented and occupied Landlord shall make an appropriate
adjustment in occupancy-related Expenses for such year for the purpose of
avoiding distortion of the amount of such Expenses to be attributed to Tenant by
reason of variation in total occupancy of the Building, by employing consistent
and sound accounting and management principles to determine Expenses that would
have been paid or incurred by Landlord had the Building been at least
ninety-five percent (95%) rented and occupied, and the amount so determined
shall be deemed to have been Expenses for such Lease Year.

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<PAGE>

         4.4 Prior to the actual determination thereof for a Lease Year,
Landlord may from time to time estimate Tenant's liability for Expenses and/or
Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion
thereof. Landlord will give Tenant written notification of the amount of such
estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto.

         4.5 When the above mentioned actual determination of Tenant's liability
for Expenses and/or Taxes is made for any Lease Year and when Tenant is so
notified in writing, then:

                  4.5.1 If the total additional rent Tenant actually paid
pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year
is less than Tenant's liability for Expenses and/or Taxes, then Tenant shall pay
such deficiency to Landlord as additional rent in one lump sum within thirty
(30) days of receipt of Landlord's bill therefor; and

                  4.5.2 If the total additional rent Tenant actually paid
pursuant to Section 4.3 on account of Expenses and/or Taxes for the Lease Year
is more than Tenant's liability for Expenses and/or Taxes, then Landlord shall
credit the difference against the then next due payments to be made by Tenant
under this Article 4, or, if the Lease has terminated, promptly refund the
difference in cash.

         4.6 If the Commencement Date is other than January 1 or if the
Termination Date is other than December 31, Tenant's liability for Expenses and
Taxes for the Lease Year in which said Date occurs shall be prorated based upon
a three hundred sixty-five (365) day year.

5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with Landlord
upon the execution of this Lease. Said sum shall be held by Landlord as security
for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord's damage in case of Tenant's
default. If Tenant defaults with respect to any provision of this Lease,
Landlord may use any part of the Security Deposit for the payment of any rent or
any other sum in default, or for the payment of any amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion is so used, Tenant shall within five
(5) days after written demand therefor, deposit with Landlord an amount
sufficient to restore the Security Deposit to its original amount and Tenant's
failure to do so shall be a material breach of this Lease. Except to such
extent, if any, as shall be required by law, Landlord shall not be required to
keep the Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit or any balance thereof shall be returned to Tenant at such time after
termination of this Lease when Landlord shall have determined that all of
Tenant's obligations under this Lease have been fulfilled.

6. ALTERATIONS.

         6.1 Except for those, if any, specifically provided for in Exhibit B to
this Lease, Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord. When applying for such consent, Tenant shall, if requested
by Landlord, furnish complete plans and specifications for such alterations,
additions and improvements. Landlord's consent shall not be unreasonably
withheld with respect to alterations which (i) are not structural in nature,
(ii) are not visible from the exterior of the Building, (iii) do not affect or
require modification of the Building's electrical, mechanical, plumbing, HVAC or
other systems, and (iv) in aggregate do not cost more than $5.00 per rentable
square foot of that portion of the Premises affected by the alterations in
question.

         6.2 In the event Landlord consents to the making of any such
alteration, addition or improvement by Tenant, the same shall be made by using
either Landlord's contractor or a contractor reasonably approved by Landlord, in
either event at Tenant's sole cost and expense. If Tenant shall employ any
contractor other than Landlord's contractor and such other contractor or any
subcontractor of such other contractor shall employ any non-union labor or
supplier, Tenant shall be responsible for and hold Landlord harmless from any
and all delays, damages and extra costs suffered by Landlord as a result of any
dispute with any labor unions concerning the wage, hours, terms or conditions of
the employment of any such labor. In any event Landlord may charge Tenant a
construction management fee not to exceed five percent (5%) of the cost of such
work to cover its overhead as it relates to such proposed work, plus third-party
costs actually incurred by Landlord in connection with the proposed work and the
design thereof, with all such amounts being due thirty (30) days after
Landlord's written demand.

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<PAGE>

         6.3 All alterations, additions or improvements proposed by Tenant shall
be constructed in accordance with all government laws, ordinances, rules and
regulations, using Building standard materials where applicable, and Tenant
shall, prior to construction, provide the additional insurance required under
Article 11 in such case, and also all such assurances to Landlord as Landlord
shall reasonably require to assure payment of the costs thereof, including but
not limited to, notices of non-responsibility, waivers of lien, surety company
performance bonds and funded construction escrows and to protect Landlord and
the Building and appurtenant land against any loss from any mechanic's,
materialmen's or other liens. Tenant shall pay in addition to any sums due
pursuant to Article 4, any increase in real estate taxes attributable to any
such alteration, addition or improvement for so long, during the Term, as such
increase is ascertainable; at Landlord's election said sums shall be paid in the
same way as sums due under Article 4. Landlord may, as a condition to its
consent to any particular alterations or improvements, require Tenant to deposit
with Landlord the amount reasonably estimated by Landlord as sufficient to cover
the cost of removing such alterations or improvements and restoring the
Premises, to the extent required under Section 26.2

7. REPAIR.

7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the roof, foundation and walls of the Building, sprinklers systems,
underground plumbing and sewer lines, water, gas and electric service lines to
the point where such service lines enter the Building of which the Premises are
a part. By taking possession of the Premises, Tenant accepts them as being in
good order, condition and repair and in the condition in which Landlord is
obligated to deliver them, except as set forth in the punch list to be delivered
pursuant to Section 2.1, except for latent defects, which Tenant shall have a
period of ninety (90) days after the Commencement Date to discover and promptly
report same to Landlord. It is hereby understood and agreed that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant, except as specifically set forth in this Lease.
Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant

         7.2 Tenant shall at its own cost and expense keep and maintain all
parts of the Premises and such portion of the Building and improvements as are
within the exclusive control of Tenant in good condition, promptly making all
necessary repairs and replacements, whether ordinary or extraordinary, with
materials and workmanship of the same character, kind and quality as the
original (including, but not limited to, repair and replacement of all fixtures
installed by Tenant, water heaters serving the Premises, windows, glass and
plate glass, doors, exterior stairs, skylights, any special office entries,
interior walls and finish work, floors and floor coverings, heating and air
conditioning systems serving the Premises, electrical systems and fixtures, dock
boards, truck doors, dock bumpers, plumbing work and fixtures, and performance
of regular removal of trash and debris). Tenant as part of its obligations
hereunder shall keep the Premises in a clean and sanitary condition. Tenant
will, as far as possible keep all such parts of the Premises from deterioration
due to ordinary wear and from falling temporarily out of repair, and upon
termination of this Lease in any way Tenant will yield up the Premises to
Landlord in good condition and repair, reasonable wear and tear and loss by fire
or other casualty excepted (but not excepting any damage to glass). Tenant
shall, at its own cost and expense, repair any damage to the Premises or the
Building resulting from and/or caused in whole or in part by the negligence or
misconduct of Tenant, its agents, employees, contractors, invitees, or any other
person entering upon the Premises as a result of Tenant's business activities or
caused by Tenant's default hereunder.

         7.3 Except as provided in Article 22, there shall be no abatement of
rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Except to the extent, if
any, prohibited by law, Tenant waives the right to make repairs at Landlord's
expense under any law, statute or ordinance now or hereafter in effect.

         7.4 Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
approved by Landlord for servicing all heating and air conditioning systems and
equipment serving the Premises (and a copy thereof shall be furnished to
Landlord). The service contract must include all services suggested by the
equipment manufacturer in the operation/maintenance manual and must become
effective within thirty (30) days of the date Tenant takes possession of the
Premises. Should Tenant fail to do so, Landlord may, upon notice to Tenant,
enter into such a maintenance/service contract on behalf of Tenant or perform
the work and in either case, charge Tenant the cost thereof along with a
reasonable amount for Landlord's overhead.

8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and
Tenant's leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within ten (10) days following the imposition of any such lien, to either cause
the

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same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept (such failure to constitute an Event of
Default), Landlord shall have the right to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be payable to it by Tenant within five (5) days
Landlord's demand.

9. ASSIGNMENT AND SUBLETTING.

         9.1 Tenant shall not have the right to assign or pledge this Lease or
to sublet the whole or any part of the Premises whether voluntarily or by
operation of law, or permit the use or occupancy of the Premises by anyone other
than Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy.

10. INDEMNIFICATION. None of the Landlord Entities shall be liable and Tenant
hereby waives all claims against them for any damage to any property or any
injury to any person in or about the Premises or the Building by or from any
cause whatsoever (including without limiting the foregoing, rain or water
leakage of any character from the roof, windows, walls, basement, pipes,
plumbing works or appliances, the Building not being in good condition or
repair, gas, fire, oil, electricity or theft), except to the extent caused by or
arising from the gross negligence or willful misconduct of Landlord or its
agents, employees or contractors. Tenant shall protect, indemnify and hold the
Landlord Entities harmless from and against any and all loss, claims, liability
or costs (including court costs and attorney's fees) incurred by reason of (a)
any damage to any property (including but not limited to property of any
Landlord Entity) or any injury (including but not limited to death) to any
person occurring in, on or about the Premises or the Building to the extent that
such injury or damage shall be caused by or arise from any actual or alleged
act, neglect, fault, or omission by or of Tenant or any Tenant Entity to meet
any standards imposed by any duty with respect to the injury or damage; (b) the
conduct or management of any work or thing whatsoever done by the Tenant in or
about the Premises or from transactions of the Tenant concerning the Premises;
(c) Tenant's failure to comply with any and all governmental laws, ordinances
and regulations applicable to the condition or use of the Premises or its
occupancy; or (d) any breach or default on the part of Tenant in the performance
of any covenant or agreement on the part of the Tenant to be performed pursuant
to this Lease. The provisions of this Article shall survive the termination of
this Lease with respect to any claims or liability accruing prior to such
termination.

11. INSURANCE.

         11.1 Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000 per occurrence and
not less than $2,000,000 in the annual aggregate, or such larger amount as
Landlord may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker's Compensation Laws with limits at
least as required by statute; (d) Employers Liability with limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease--each employee;
(e) All Risk or Special Form coverage protecting Tenant against loss of or
damage to Tenant's alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured, (f) Business Interruption Insurance for 100%
of the 12 months actual loss sustained, and (g) Excess Liability in the amount
of $5,000,000.

         11.2 The aforesaid policies shall (a) be provided at Tenant's expense;
(b) name the Landlord Entities as additional insureds (General Liability) and
loss payee (Property--Special Form); (c) be issued by an insurance company with
a minimum Best's rating of "A:VII" during the Term, and (d) provide that said
insurance shall not be canceled unless thirty (30) days prior written notice
(ten days for non-payment of premium) shall have been given to Landlord; a
certificate of Liability insurance on Accord Form 25 and a certificate of
Property insurance on Accord Form 27 shall be delivered to Landlord by Tenant
upon the Commencement Date and at least thirty (30) days prior to each renewal
of said insurance.

         11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises ("Work") the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall require; and the policies of or certificates evidencing such insurance
must be delivered to Landlord prior to the commencement of any such Work.

12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other

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insurance now or hereafter existing for the benefit of the respective party but
only to the extent of the net insurance proceeds payable under such policies.
Each party shall obtain any special endorsements required by their insurer to
evidence compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES. Tenant shall pay for all water, gas, heat, light,
power, telephone, sewer, sprinkler system charges and other utilities and
services used on or from the Premises, together with any taxes, penalties, and
surcharges or the like pertaining thereto and any maintenance charges for
utilities. Tenant shall furnish all electric light bulbs, tubes and ballasts,
battery packs for emergency lighting and fire extinguishers. If any such
services are not separately metered to Tenant, Tenant shall pay such proportion
of all charges jointly metered with other premises as determined by Landlord, in
its sole discretion, to be reasonable. Any such charges paid by Landlord and
assessed against Tenant shall be immediately payable to Landlord on demand and
shall be additional rent hereunder. Tenant will not, without the written consent
of Landlord, contract with a utility provider to service the Premises with any
utility, including, but not limited to, telecommunications, electricity, water,
sewer or gas, which is not previously providing such service to other tenants in
the Building. Landlord shall in no event be liable for any interruption or
failure of utility services on or to the Premises.

14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate ("Holdover Rate") which shall be One
Hundred Fifty Percent (150%) of the amount of the Annual Rent for the last
period prior to the date of such termination plus all Rent Adjustments under
Article 4 prorated on a daily basis, and also pay all damages sustained by
Landlord by reason of such retention. If Landlord gives notice to Tenant of
Landlord's election to such effect, such holding over shall constitute renewal
of this Lease for a period from month to month at the Holdover Rate, but if the
Landlord does not so elect, no such renewal shall result notwithstanding
acceptance by Landlord of any sums due hereunder after such termination; and
instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have
been created. In any event, no provision of this Article 14 shall be deemed to
waive Landlord's right of reentry or any other right under this Lease or at law.

15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord's interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant's interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver within ten
(10) days of Landlord's request such further instruments evidencing such
subordination or superiority of this Lease as may be required by Landlord.

16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all
the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Building
of any such rules and regulations.

17. REENTRY BY LANDLORD.

         17.1 Landlord reserves and shall at all times have the right to
re-enter the Premises to inspect the same, to show said Premises to prospective
purchasers, mortgagees or tenants, and to alter, improve or repair the Premises
and any portion of the Building, without abatement of rent, and may for that
purpose erect, use and maintain scaffolding, pipes, conduits and other necessary
structures and open any wall, ceiling or floor in and through the Building and
Premises where reasonably required by the character of the work to be performed,
provided entrance to the Premises shall not be blocked thereby, and further
provided that the business of Tenant shall not be interfered with unreasonably.
Landlord shall have the right at any time to change the arrangement and/or
locations of entrances, or passageways, doors and doorways, and corridors,
windows, elevators, stairs, toilets or other public parts of the Building and to
change the name, number or designation by which the Building is commonly known.
In the event that Landlord damages any portion of any wall or wall covering,
ceiling, or floor or floor covering within the Premises, Landlord shall repair
or replace the damaged portion to match the original as nearly as commercially
reasonable but shall not be required to repair or replace more than the portion
actually damaged. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by any action
of Landlord authorized by this Article 17.

         17.2 For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant's vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry to
any portion

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of the Premises. As to any portion to which access cannot be had by means of a
key or keys in Landlord's possession, Landlord is authorized to gain access by
such means as Landlord shall elect and the cost of repairing any damage
occurring in doing so shall be borne by Tenant and paid to Landlord within five
(5) days of Landlord's demand.

18. DEFAULT.

         18.1 Except as otherwise provided in Article 20, the following events
shall be deemed to be Events of Default under this Lease:

                  18.1.1 Tenant shall fail to pay when due any sum of money
becoming due to be paid to Landlord under this Lease, whether such sum be any
installment of the rent reserved by this Lease, any other amount treated as
additional rent under this Lease, or any other payment or reimbursement to
Landlord required by this Lease, whether or not treated as additional rent under
this Lease, and such failure shall continue for a period of five (5) days after
written notice that such payment was not made when due, but if any such notice
shall be given, for the twelve (12) month period commencing with the date of
such notice, the failure to pay within five (5) days after due any additional
sum of money becoming due to be paid to Landlord under this Lease during such
period shall be an Event of Default without notice.

                  18.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant provided, however, that such failure shall not be an event of default
if such failure could not reasonably be cured during such twenty (20) day
period, Tenant has commenced the cure within such twenty (20) day period and
thereafter is diligently pursuing such cure to completion, but the total
aggregate cure period shall not exceed ninety (90) days.

                  18.1.3 Tenant shall fail to vacate the Premises immediately
upon termination of this Lease, by lapse of time or otherwise, or upon
termination of Tenant's right to possession only.

                  18.l.4 Tenant shall become insolvent, admit in writing its
inability to pay its debts generally as they become due, file a petition in
bankruptcy or a petition to take advantage of any insolvency statute, make an
assignment for the benefit of creditors, make a transfer in fraud of creditors,
apply for or consent to the appointment of a receiver of itself or of the whole
or any substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.

                  18.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or decree shall not be vacated or set aside or stayed within
sixty (60) days from the date of entry thereof.

19. REMEDIES.

         19.1 Except as otherwise provided in Article 20, upon the occurrence of
any of the Events of Default described or referred to in Article 18, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand whatsoever, concurrently or consecutively and not
alternatively:

                  19.1.1 Landlord may, at its election, terminate this Lease or
terminate Tenant's right to possession only, without terminating the Lease.

                  19.1.2 Upon any termination of this Lease, whether by lapse of
time or otherwise, or upon any termination of Tenant's right to possession
without termination of the Lease, Tenant shall surrender possession and vacate
the Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord's former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant's signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord's right to rent or any other right given to Landlord
under this Lease or by operation of law.

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                  19.1.3 Upon any termination of this Lease, whether by lapse of
time or otherwise, Landlord shall be entitled to recover as damages, all rent,
including any amounts treated as additional rent under this Lease, and other
sums due and payable by Tenant on the date of termination, plus as liquidated
damages and not as a penalty, an amount equal to the sum of: (a) an amount equal
to the then present value of the rent reserved in this Lease for the residue of
the stated Term of this Lease including any amounts treated as additional rent
under this Lease and all other sums provided in this Lease to be paid by Tenant,
minus the fair rental value of the Premises for such residue; (b) the value of
the time and expense necessary to obtain a replacement tenant or tenants, and
the estimated expenses described in Section 19.1.4 relating to recovery of the
Premises, preparation for reletting and for reletting itself; and (c) the cost
of performing any other covenants which would have otherwise been performed by
Tenant.

                  19.1.4 Upon any termination of Tenant's right to possession
only without termination of the Lease:

                           19.1.4.1 Neither such termination of Tenant's right
to possession nor Landlord's taking and holding possession thereof as provided
in Section 19.1.2 shall terminate the Lease or release Tenant, in whole or in
part, from any obligation, including Tenant's obligation to pay the rent,
including any amounts treated as additional rent, under this Lease for the full
Term, and if Landlord so elects Tenant shall continue to pay to Landlord the
entire amount of the rent as and when it becomes due, including any amounts
treated as additional rent under this Lease, for the remainder of the Term plus
any other sums provided in this Lease to be paid by Tenant for the remainder of
the Term.

                           19.1.4.2 Landlord shall use commercially reasonable
efforts to relet the Premises or portions thereof to the extent required by
applicable law. Landlord and Tenant agree that nevertheless Landlord shall at
most be required to use only the same efforts Landlord then uses to lease
premises in the Building generally and that in any case that Landlord shall not
be required to give any preference or priority to the showing or leasing of the
Premises or portions thereof over any other space that Landlord may be leasing
or have available and may place a suitable prospective tenant in any such other
space regardless of when such other space becomes available and that Landlord
shall have the right to relet the Premises for a greater or lesser term than
that remaining under this Lease, the right to relet only a portion of the
Premises, or a portion of the Premises or the entire Premises as a part of a
larger area, and the right to change the character or use of the Premises. In
connection with or in preparation for any reletting, Landlord may, but shall not
be required to, make repairs, alterations and additions in or to the Premises
and redecorate the same to the extent Landlord deems necessary or desirable, and
Tenant shall pay the cost thereof, together with Landlord's expenses of
reletting, including, without limitation, any commission incurred by Landlord,
within five (5) days of Landlord's demand. Landlord shall not be required to
observe any instruction given by Tenant about any reletting or accept any tenant
offered by Tenant unless such offered tenant has a credit-worthiness acceptable
to Landlord and leases the entire Premises upon terms and conditions including a
rate of rent (after giving effect to all expenditures by Landlord for tenant
improvements, broker's commissions and other leasing costs) all no less
favorable to Landlord than as called for in this Lease, nor shall Landlord be
required to make or permit any assignment or sublease for more than the current
term or which Landlord would not be required to permit under the provisions of
Article 9.

                           19.1.4.3 Until such time as Landlord shall elect to
terminate the Lease and shall thereupon be entitled to recover the amounts
specified in such case in Section 19.1.3, Tenant shall pay to Landlord upon
demand the full amount of all rent, including any amounts treated as additional
rent under this Lease and other sums reserved in this Lease for the remaining
Term, together with the costs of repairs, alterations, additions, redecorating
and Landlord's expenses of reletting and the collection of the rent accruing
therefrom (including, reasonable attorney's fees and broker's commissions), as
the same shall then be due or become due from time to time, less only such
consideration as Landlord may have received from any reletting of the Premises;
and Tenant agrees that Landlord may file suits from time to time to recover any
sums falling due under this Article 19 as they become due. Any proceeds of
reletting by Landlord in excess of the amount then owed by Tenant to Landlord
from time to time shall be credited against Tenant's future obligations under
this Lease but shall not otherwise be refunded to Tenant or inure to Tenant's
benefit.

         19.2 Upon the occurrence of an Event of Default, Landlord may (but
shall not be obligated to) cure such default at Tenant's sole expense. Without
limiting the generality of the foregoing, Landlord may, at Landlord's option,
enter into and upon the Premises if Landlord determines in its sole discretion
that Tenant is not acting within a commercially reasonable time to maintain,
repair or replace anything for which Tenant is responsible under this Lease or
to otherwise effect compliance with its obligations under this Lease and correct
the same, without being deemed in any manner guilty of trespass, eviction or
forcible entry and detainer and without incurring any liability for any damage
or interruption of Tenant's business resulting therefrom and Tenant agrees to
reimburse Landlord within five (5) days of Landlord's demand as additional rent,
for any expenses which Landlord may incur in thus effecting compliance with
Tenant's obligations under this Lease, plus interest from the date of
expenditure by Landlord at the Wall Street Journal prime rate.

         19.3 Tenant understands and agrees that in entering into this Lease,
Landlord is relying upon receipt of all the Annual and Monthly Installments of
Rent to become due with respect to all the Premises originally leased hereunder
over the full Initial Term of this Lease for amortization, including interest at
the Amortization Rate. For purposes hereof, the "Concession Amount" shall be

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defined as the aggregate of all amounts forgone or expended by Landlord as free
rent under the lease, under Exhibit B hereof for construction allowances
(excluding therefrom any amounts expended by Landlord for Landlord's Work, as
defined in Exhibit B), and for brokers' commissions payable by reason of this
Lease. Accordingly, Tenant agrees that if this Lease or Tenant's right to
possession of the Premises leased hereunder shall be terminated as of any date
("Default Termination Date") prior to the expiration of the full Initial Term
hereof by reason of a default of Tenant, there shall be due and owing to
Landlord as of the day prior to the Default Termination Date, as rent in
addition to all other amounts owed by Tenant as of such Date, the amount
("Unamortized Amount") of the Concession Amount determined as set forth below;
provided, however, that in the event that such amounts are recovered by Landlord
pursuant to any other provision of this Article 19, Landlord agrees that it
shall not attempt to recover such amounts pursuant to this Paragraph 19.3. For
the purposes hereof, the Unamortized Amount shall be determined in the same
manner as the remaining principal balance of a mortgage with interest at the
Amortization Rate payable in level payments over the same length of time as from
the effectuation of the Concession concerned to the end of the full Initial Term
of this Lease would be determined. The foregoing provisions shall also apply to
and upon any reduction of space in the Premises, as though such reduction were a
termination for Tenant's default, except that (i) the Unamortized Amount shall
be reduced by any amounts paid by Tenant to Landlord to effectuate such
reduction and (ii) the manner of application shall be that the Unamortized
Amount shall first be determined as though for a full termination as of the
Effective Date of the elimination of the portion, but then the amount so
determined shall be multiplied by the fraction of which the numerator is the
rentable square footage of the eliminated portion and the denominator is the
rentable square footage of the Premises originally leased hereunder, and the
amount thus obtained shall be the Unamortized Amount.

         19.4 If, on account of any breach or default by Tenant in Tenant's
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney or
collection agency concerning or to enforce or defend any of Landlord's rights or
remedies arising under this Lease or to collect any sums due from Tenant, Tenant
agrees to pay all costs and fees so incurred by Landlord, including, without
limitation, reasonable attorneys' fees and costs.

         19.5 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided in this Lease or any other
remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy provided in this Lease constitute a forfeiture or waiver
of any rent due to Landlord under this Lease or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants contained in this Lease.

         19.6 No act or thing done by Landlord or its agents during the Term
shall be deemed a termination of this Lease or an acceptance of the surrender of
the Premises, and no agreement to terminate this Lease or accept a surrender of
said Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord's acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or construed
to constitute a waiver of such Default or of Landlord's right to enforce any
such remedies with respect to such Default or any subsequent Default

         19.7 Landlord hereby irrevocably waives to the fullest extent permitted
by applicable law, any right to claim a contractual or statutory landlord's lien
against any of Tenant's moveable personal property at the Premises.

         19.8 Any and all property which may be removed from the Premises by
Landlord pursuant to the authority of this Lease or of law, to which Tenant is
or may be entitled, may be handled, removed and/or stored, as the case may be,
by or at the direction of Landlord but at the risk, cost and expense of Tenant,
and Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Premises shall, at Landlord's option, be
deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale
without further payment or credit by Landlord to Tenant

20. TENANT'S BANKRUPTCY OR INSOLVENCY.

         20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a "Debtor's Law"):

                  20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee
or receiver of Tenant's assets (each a "Tenant's Representative") shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment

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or sublease by the provisions of such Debtor's Law. Without limitation of the
generality of the foregoing, any right of any Tenant's Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:

                           20.1.1.1 Such Debtor's Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's Representative
shall have timely exercised and Tenant's Representative shall have fully cured
any default of Tenant under this Lease.

                           20.1.1.2 Tenant's Representative or the proposed
assignee, as the case shall be, shall have deposited with Landlord as security
for the timely payment of rent an amount equal to the larger of: (a) three (3)
months' rent and other monetary charges accruing under this Lease; and (b) any
sum specified in Article 5; and shall have provided Landlord with adequate other
assurance of the future performance of the obligations of the Tenant under this
Lease. Without limitation, such assurances shall include, at least, in the case
of assumption of this Lease, demonstration to the satisfaction of the Landlord
that Tenant's Representative has and will continue to have sufficient
unencumbered assets after the payment of all secured obligations and
administrative expenses to assure Landlord that Tenant's Representative will
have sufficient funds to fulfill the obligations of Tenant under this Lease;
and, in the case of assignment, submission of current financial statements of
the proposed assignee, audited by an independent certified public accountant
reasonably acceptable to Landlord and showing a net worth and working capital in
amounts determined by Landlord to be sufficient to assure the future performance
by such assignee of all of the Tenant's obligations under this Lease.

                           20.1.1.3 The assumption or any contemplated
assignment of this Lease or subleasing any part of the Premises, as shall be the
case, will not breach any provision in any other lease, mortgage, financing
agreement or other agreement by which Landlord is bound.

                           20.1.1.4 Landlord shall have, or would have had
absent the Debtor's Law, no right under Article 9 to refuse consent to the
proposed assignment or sublease by reason of the identity or nature of the
proposed assignee or sublessee or the proposed use of the Premises concerned.

21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and
authority to enter into this Lease and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Landlord shall not be liable for any interference or disturbance by
other tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.

22. CASUALTY

         22.1 In the event the Premises or the Building are damaged by fire or
other cause and in Landlord's reasonable estimation such damage can be
materially restored within one hundred twenty (120) days, Landlord shall
forthwith repair the same and this Lease shall remain in full force and effect,
except that Tenant shall be entitled to a proportionate abatement in rent from
the date of such damage. Such abatement of rent shall be made pro rata in
accordance with the extent to which the damage and the making of such repairs
shall interfere with the use and occupancy by Tenant of the Premises from time
to time. Within forty-five (45) days from the date of such damage, Landlord
shall notify Tenant, in writing, of Landlord's reasonable estimation of the
length of time within which material restoration can be made, and Landlord's
determination shall be binding on Tenant. For purposes of this Lease, the
Building or Premises shall be deemed "materially restored" if they are in such
condition as would not prevent or materially interfere with Tenant's use of the
Premises for the purpose for which it was being used immediately before such
damage.

         22.2 If such repairs cannot, in Landlord's reasonable estimation, be
made within one hundred eighty (180) days, Landlord and Tenant shall each have
the option of giving the other, at any time within thirty (30) days after such
damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 22.1.

         22.3 Landlord shall not be required to repair or replace any damage or
loss by or from fire or other cause to any panelings, decorations, partitions,
additions, railings, ceilings, floor coverings, office fixtures or any other
property or improvements installed on the Premises by, or belonging to, Tenant.
Any insurance which may be carried by Landlord or Tenant against loss or damage
to the Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control.

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                                       11
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         22.4 In the event that Landlord should fail to complete such repairs
and material restoration within sixty (60) days after the date estimated by
Landlord therefor as extended by this Section 22.4, Tenant may at its option and
as its sole remedy terminate this Lease by delivering written notice to
Landlord, within fifteen (15) days after the expiration of said period of time,
whereupon the Lease shall end on the date of such notice or such later date
fixed in such notice as if the date of such notice was the date originally fixed
in this Lease for the expiration of the Term; provided, however, that if
construction is delayed because of changes, deletions or additions in
construction requested by Tenant, strikes, lockouts, casualties, Acts of God,
war, material or labor shortages, government regulation or control or other
causes beyond the reasonable control of Landlord, the period for restoration,
repair or rebuilding shall be extended for the amount of time Landlord is so
delayed.

         22.5 Notwithstanding anything to the contrary contained in this
Article: (a) Landlord shall not have any obligation whatsoever to repair,
reconstruct, or restore the Premises when the damages resulting from any
casualty covered by the provisions of this Article 22 occur during the last
twelve (12) months of the Term or any extension thereof, but if Landlord
determines not to repair such damages Landlord shall notify Tenant and if such
damages shall render any material portion of the Premises untenantable Tenant
shall have the right to terminate this Lease by notice to Landlord within
fifteen (15) days after receipt of Landlord's notice; and (b) in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises or Building requires that any insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon this Lease shall
end on the date of such damage as if the date of such damage were the date
originally fixed in this Lease for the expiration of the Term.

         22.6 In the event of any damage or destruction to the Building or
Premises by any peril covered by the provisions of this Article 22, it shall be
Tenant's responsibility to properly secure the Premises and upon notice from
Landlord to remove forthwith, at its sole cost and expense, such portion of all
of the property belonging to Tenant or its licensees from such portion or all
of the Building or Premises as Landlord shall request.

23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant's use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose, and Tenant hereby assigns to
Landlord any interest it may have in or claim to all or any part of such sums,
other than any separate award which may be made with respect to Tenant's trade
fixtures and moving expenses; Tenant shall make no claim for the value of any
unexpired Term.

24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord's successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.

25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant shall execute and deliver to
Landlord or mortgagee or prospective mortgagee a sworn statement certifying: (a)
the date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been modifications to
this Lease, that this lease is in full force and effect, as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease have been paid; (d) the fact that
there are no current defaults under this Lease by either Landlord or Tenant
except as specified in Tenant's statement; and (e) such other matters as may be
requested by Landlord. Landlord and Tenant intend that any statement delivered
pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or
purchaser, and Tenant shall be liable for all loss, cost or expense resulting
from the failure of any sale or funding of any loan caused by any material
misstatement contained in such estoppel certificate. Tenant irrevocably agrees
that if Tenant fails to execute and deliver such certificate within such ten
(10) day period Landlord or Landlord's beneficiary or agent may execute and
deliver such certificate on Tenant's behalf, and that such certificate shall be
fully binding on Tenant.

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26. SURRENDER OF PREMISES.

         26.1 Tenant shall arrange to meet Landlord for two (2) joint
inspections of the Premises as set forth in Exhibit E, the first to occur at
least thirty (30) days (but no more than sixty (60) days) before the last day of
the Term, and the second to occur not later than forty-eight (48) hours after
Tenant has vacated the Premises, as set forth in Exhibit E attached hereto and
incorporated herein. In the event of Tenant's failure to arrange such joint
inspections, if not due to Landlord's inability or uncooperation, and/or
participate in either such inspection, Landlord's inspection at or after
Tenant's vacating the Premises shall be conclusively deemed correct for purposes
of determining Tenant's responsibility for repairs and restoration.

         26.2 All alterations, additions, and improvements in, on, or to the
Premises made or installed by or for Tenant, including carpeting (collectively,
"Alterations"), shall be and remain the property of Tenant during the Term. Upon
the expiration or sooner termination of the Term, all Alterations shall become a
part of the realty and shall belong to Landlord without compensation, and title
shall pass to Landlord under this Lease as by a bill of sale. At the end of the
Term or any renewal of the Term or other sooner termination of this Lease,
Tenant will peaceably deliver up to Landlord possession of the Premises,
together with all Alterations by whomsoever made, in the same conditions
received or first installed, broom clean and free of all debris, excepting only
ordinary wear and tear and damage by fire or other casualty. Notwithstanding the
foregoing, if Landlord reasonably elects by notice given to Tenant at least ten
(10) days prior to expiration of the Term, Tenant shall, at Tenant's sole cost,
remove any Alterations, including carpeting, so designated by Landlord's notice,
and repair any damage caused by such removal. Tenant must, at Tenant's sole
cost, remove upon termination of this Lease, any and all of Tenant's furniture,
furnishings, movable partitions of less than full height from floor to ceiling
and other trade fixtures and personal property (collectively, "Personalty").
Personalty not so removed shall be deemed abandoned by the Tenant and title to
the same shall thereupon pass to Landlord under this Lease as by a bill of sale,
but Tenant shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In lieu of requiring
Tenant to remove Alterations and Personalty and repair the Premises as
aforesaid, Landlord may, by written notice to Landlord delivered at least thirty
(30) days before the Termination Date, require Tenant to pay to Landlord, as
additional rent hereunder, the cost of such removal and repair in an amount
reasonably estimated by Landlord.

         26.3 All obligations of Tenant under this Lease not fully performed as
of the expiration or earlier termination of the Term shall survive the
expiration or earlier termination of the Term Upon the expiration or earlier
termination of the Term, Tenant shall pay to Landlord the amount, as estimated
by Landlord, necessary to repair and restore the Premises as provided in this
Lease and/or to discharge Tenant's obligation for unpaid amounts due or to
become due to Landlord. All such amounts shall be used and held by Landlord for
payment of such obligations of Tenant, with Tenant being liable for any
additional costs upon demand by Landlord, or with any excess to be returned to
Tenant after all such obligations have been determined and satisfied. Any
otherwise unused Security Deposit shall be credited against the amount payable
by Tenant under this Lease.

27. NOTICES. Any notice or document required or permitted to be delivered under
this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant's Notice Address.

28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid by
Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any
and all taxes payable by Landlord (other than net income taxes and franchise
taxes) whether or not now customary or within the contemplation of the parties
to this Lease: (a) upon, allocable to, or measured by or on the gross or net
rent payable under this Lease, including without limitation any gross income tax
or excise tax levied by the State, any political subdivision thereof, or the
Federal Government with respect to the receipt of such rent; (b) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Premises or any portion thereof,
including any sales, use or service tax imposed as a result thereof; (c) upon or
measured by the Tenant's gross receipts or payroll or the value of Tenant's
equipment, furniture, fixtures and other personal property of Tenant or
leasehold improvements, alterations or additions located in the Premises; or (d)
upon this transaction or any document to which Tenant is a party creating or
transferring any interest of Tenant in this Lease or the Premises. In addition
to the foregoing, Tenant agrees to pay, before delinquency, any and all taxes
levied or assessed against Tenant and which become payable during the term
hereof upon Tenant's equipment, furniture, fixtures and other personal property
of Tenant located in the Premises.

29. INTENTIONALLY DELETED.

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30. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for
convenience of reference and shall in no way define, increase, limit or describe
the scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following "Landlord Entities", being Landlord, Landlord's investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord's trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms "Tenant" and "Landlord" or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term "rentable area" shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including a
proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable space footage of the Premises and Tenant's
Proportionate Share shown on the Reference Pages; however, Landlord may adjust
either or both figures if there is manifest error, addition or subtraction to
the Building or any business park or complex of which the Building is a part,
remeasurement or other circumstance reasonably justifying adjustment. The term
"Building" refers to the structure in which the Premises are located and the
common areas (parking lots, sidewalks, landscaping, etc.) appurtenant thereto.
If the Building is part of a larger complex of structures, the term "Building"
may include the entire complex, where appropriate (such as shared Expenses or
Taxes) and subject to Landlord's reasonable discretion.

31. TENANT'S AUTHORITY. If Tenant signs as a corporation, partnership, trust or
other legal entity each of the persons executing this Lease on behalf of Tenant
represents and warrants that Tenant has been and is qualified to do business in
the state in which the Building is located, that the entity has full right and
authority to enter into this Lease, and that all persons signing on behalf of
the entity were authorized to do so by appropriate actions. Tenant agrees to
deliver to Landlord, simultaneously with the delivery of this Lease, a corporate
resolution, proof of due authorization by partners, opinion of counsel or other
appropriate documentation reasonably acceptable to Landlord evidencing the due
authorization of Tenant to enter into this Lease.

32. FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord's request, which shall
not occur more than once during a twelve-month period, Tenant shall deliver to
Landlord a copy, certified by an officer of Tenant as being a true and correct
copy, of Tenant's most recent audited financial statement, or, if unaudited,
certified by Tenant's chief financial officer as being true, complete and
correct in all material respects. Landlord agrees that such financial reports
shall be kept confidential and shall only be disclosed to Landlord's
accountants, attorneys and other third parties as deemed reasonably necessary by
Landlord for making business decisions. Tenant hereby authorizes Landlord to
obtain one or more credit reports on Tenant at any time, and shall execute such
further authorizations as Landlord may reasonably require in order to obtain a
credit report.

33. COMMISSIONS. Each of the parties represents and warrants to the other that
it has not dealt with any broker or finder in connection with this Lease, except
as described on the Reference Pages.

34. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
state in which the Building is located.

35. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of the heirs, successors, executors, administrators and assigns
of the parties to this Lease.

36. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.

37. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a
reservation of the Premises. Landlord shall not be bound by this Lease until it
has received a copy of this Lease duly executed by Tenant and has delivered to
Tenant a copy of this Lease duly executed by Landlord, and until such delivery
Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month's rent as set forth in Article 3 and any
sum owed pursuant to this Lease.

38. RECORDATION. Tenant shall not record or register this Lease or a short form
memorandum hereof without the prior written consent of Landlord, and then shall
pay all charges and taxes incident such recording or registration.

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                                       14
<PAGE>

39. LIMITATION OF LANDLORD'S LIABILITY. Redress for any claim against Landlord
under this Lease shall be limited to and enforceable only against and to the
extent of Landlord's interest in the Building. The obligations of Landlord under
this Lease are not intended to be and shall not be personally binding on, nor
shall any resort be had to the private properties of, any of its or its
investment manager's trustees, directors, officers, partners, beneficiaries,
members, stockholders, employees, or agents, and in no case shall Landlord be
liable to Tenant hereunder for any lost profits, damage to business, or any form
of special, indirect or consequential damages.

LANDLORD:                                   TENANT:

CALWEST INDUSTRIAL HOLDINGS TEXAS,          HOME INTERIORS AND GIFTS, INC.
L.P., A DELAWARE LIMITED PARTNERSHIP

By:    CalWest Texas, LLC, a Delaware
       limited liability company

Its:   General Partner

By:    RREEF Management Company, a
       Delaware corporation

Its:   Property Manager

By:    /s/ CYNTHIA PRENDERGAST              By:    /s/ KENNETH J. CICHOCKI
       --------------------------------            -----------------------------

Name:  Cynthia Prendergast                  Name:  Kenneth J. Cichocki

Title: District Manager                     Title: Chief Financial Officer

Dated: July 29, 2002                        Dated: July 25, 2002
       --------------------------------            -----------------------------

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                                       15
<PAGE>

                  EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISES

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

Exhibit A is intended only to show the general layout of the Premises as of the
beginning of the Term of this Lease. It does not in any way supersede any of
Landlord's rights set forth in Article 17 with respect to arrangements and/or
locations of public parts of the Building and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.

                                   [SITE PLAN]

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                                       A-1
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                             EXHIBIT A-1 - SITE PLAN

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

                                   [SITE PLAN]

                                                        CAP/[ILLEGIBLE]
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                                                            Initials
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REVISED 6/27/02
<PAGE>

                        EXHIBIT B -- INITIAL ALTERATIONS

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

Tenant shall take the Premises in its "as-is" condition except for certain
Leasehold Improvements (herein so called) to the Premises which are to be
completed within thirty days of the Commencement Date of the Lease.

         Rewire existing high-bay lights approximately 500' to existing panel.
         Install three toggle switches for light control.

         Rewire existing transformer approximately 500' to existing panel. Add
         three 120v dedicated circuits.

         Remove transformer, disconnects, conduit and wire previously used for
         temporary power. Patch wall where conduit enters the building.

         Construct to code restroom at sanitary sewer stubbed area. Install
         water heater and HV/AC for restroom.

         Sheetrock, fire tape and bed existing demising wall with Suite 120.
         Paint demising wall to 10' above finish floor with Kelly-Moore Blanco
         #25.

         Paint all columns silver to 10' above finish floor.

                                                        CAP/[ILLEGIBLE]
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REVISED 6/27/02
<PAGE>

                    EXHIBIT C -- COMMENCEMENT DATE MEMORANDUM

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

                          COMMENCEMENT DATE MEMORANDUM

         THIS MEMORANDUM, made as of      , 20  , by and between
("Landlord") and        ("Tenant").

                                    Recitals:

         A.       Landlord and Tenant are parties to that certain Lease, dated
                  for reference         , 20   (the "Lease") for certain
                  premises (the "Premises") consisting of approximately
                  square feet at the building commonly known as         .

         B.       Tenant is in possession of the Premises and the Term of the
                  Lease has commenced.

         C.       Landlord and Tenant desire to enter into this Memorandum
                  confirming the Commencement Date, the Termination Date and
                  other matters under the Lease.

          NOW, THEREFORE, Landlord and Tenant agree as follows:

         1.       The actual Commencement Date is       .

         2.       The actual Termination Date is       .

         3.       Capitalized terms not defined herein shall have the same
                  meaning as set forth in the Lease.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

LANDLORD:                                   TENANT:

CALWEST INDUSTRIAL HOLDINGS TEXAS,          HOME INTERIORS AND GIFTS, INC.
L.P., A DELAWARE LIMITED PARTNERSHIP

BY:    CALWEST TEXAS, LLC, A DELAWARE
       LIMITED LIABILITY COMPANY

ITS:   GENERAL PARTNER

By:    RREEF Management Company, a
       Delaware corporation

Its:   Property Manager

By:                                         By:
       --------------------------------            -----------------------------

Name:  Cynthia Prendergast                  Name:  Kenneth J. Cichocki

Title: District Manager                     Title: Chief Financial Officer

Dated:                           , 20       Dated:                        , 20

                                                        CAP/[ILLEGIBLE]
                                                        ---------------
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REVISED 6/27/02
                                       C-1
<PAGE>

                        EXHIBIT D - RULES AND REGULATIONS

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CAIWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

1. No sign, placard, picture, advertisement, name or notice (collectively
referred to as "Signs") shall be installed or displayed on any part of the
outside of the Building without the prior written consent of the Landlord which
consent shall be in Landlord's sole discretion. All approved Signs shall be
printed, painted, affixed or inscribed at Tenant's expense by a person or vendor
approved by Landlord and shall be removed by Tenant at Tenant's expense upon
vacating the Premises. Landlord shall have the right to remove any Sign
installed or displayed in violation of this rule at Tenant's expense and without
notice.

2. If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises or Building, Tenant shall immediately discontinue such use. No awning
shall be permitted on any part of the Premises. Tenant shall not place anything
or allow anything to be placed against or near any glass partitions or doors or
windows which may appear unsightly, in the opinion of Landlord, from outside the
Premises.

3. Tenant shall not alter any lock or other access device or install a new or
additional lock or access device or bolt on any door of its Premises without the
prior written consent of Landlord. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys or other means of access to all doors.

4. If Tenant requires telephone, data, burglar alarm or similar service, the
cost of purchasing, installing and maintaining such service shall be borne
solely by Tenant. No boring or cutting for wires will be allowed without the
prior written consent of Landlord. Landlord shall direct electricians as to
where and how telephone, data, and electrical wires are to be introduced or
installed. The location of burglar alarms, telephones, call boxes or other
office equipment affixed to the Premises shall be subject to the prior written
approval of Landlord.

5. Tenant shall not place a load upon any floor of its Premises, including
mezzanine area, if any, which exceeds the load per square foot that such floor
was designed to carry and that is allowed by law. Heavy objects shall stand on
such platforms as determined by Landlord to be necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any such
equipment or other property from any cause, and all damage done to the Building
by maintaining or moving such equipment or other property shall be repaired at
the expense of Tenant.

6. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building
without Landlord's prior written consent which consent shall be in Landlord's
sole discretion.

7. Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork, plaster or drywall (except for pictures and general office uses) or in
any way deface the Premises or any part thereof. Tenant shall not affix any
floor covering to the floor of the Premises or paint or seal any floors in any
manner except as approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.

8. No cooking shall be done or permitted on the Premises, except that
Underwriters' Laboratory approved microwave ovens or equipment for brewing
coffee, tea, hot chocolate and similar beverages shall be permitted, provided
that such equipment and use is in accordance with all applicable federal, state
and city laws, codes, ordinances, rules and regulations.

9. Tenant shall not use any hand trucks except those equipped with the rubber
tires and side guards, and may use such other material-handling equipment as
Landlord may approve. Tenant shall not bring any other vehicles of any kind into
the Building. Forklifts which operate on asphalt areas shall only use tires that
do not damage the asphalt.

10. Tenant shall not use the name of the Building or any photograph or other
likeness of the Building in connection with or in promoting or advertising
Tenant's business except that Tenant may include the Building name in Tenant's
address. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building.

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<PAGE>

11. All trash and refuse shall be contained in suitable receptacles at locations
approved by Landlord. Tenant shall not place in the trash receptacles any
personal trash or material that cannot be disposed of in the ordinary and
customary manner of removing such trash without violation of any law or
ordinance governing such disposal.

12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governing authority.

13. Tenant assumes all responsibility for securing and protecting its Premises
and its contents including keeping doors locked and other means of entry to the
Premises closed.

14. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without Landlord's prior written consent.

15. No person shall go on the roof without Landlord's permission.

16. Tenant shall not permit any animals, other than seeing-eye dogs, to be
brought or kept in or about the Premises or any common area of the property.

17. Tenant shall not permit any motor vehicles to be washed or mechanical work
or maintenance of motor vehicles to be performed on any portion of the Premises
or parking lot.

18. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of any premises in the Building. Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
tenant or tenants, and any such waiver by Landlord shall not be construed as a
waiver of such Rules and Regulations for any or all tenants.

19. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and guests.

20. Any toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown into them. The expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the Tenant who, or whose employees or invitees, shall have
caused it.

21. Tenant shall not permit smoking or carrying of lighted cigarettes or cigars
in areas reasonably designated by Landlord or any applicable governmental
agencies as non-smoking areas.

22. Any directory of the Building or project of which the Building is a part
("Project Area"), if provided, will be exclusively for the display of the name
and location of tenants only and Landlord reserves the right to charge for the
use thereof and to exclude any other names.

23. Canvassing, soliciting, distribution of handbills or any other written
material in the Building or Project Area is prohibited and each tenant shall
cooperate to prevent the same. No tenant shall solicit business from other
tenants or permit the sale of any goods or merchandise in the Building or
Project Area without the written consent of Landlord.

24. Any equipment belonging to Tenant which causes noise or vibration that may
be transmitted to the structure of the Building or to any space therein to such
a degree as to be objectionable to Landlord or to any tenants in the Building
shall be placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate the noise or vibration.

25. Driveways, sidewalks, halls, passages, exits, entrances and stairways
("Access Areas") shall not be obstructed by tenants or used by tenants for any
purpose other than for ingress to and egress from their respective premises.
Access areas are not for the use of the general public and Landlord shall in all
cases retain the right to control and prevent access thereto by

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all persons whose presence, in the judgement of Landlord, shall be prejudicial
to the safety, character, reputation and interests of the Building or its
tenants.

26. Landlord reserves the right to designate the use of parking areas and
spaces. Tenant shall not park in visitor, reserved, or unauthorized parking
areas. Tenant and Tenant's guests shall park between designated parking lines
only and shall not park motor vehicles in those areas designated by Landlord for
loading and unloading. Vehicles in violation of the above shall be subject to
being towed at the vehicle owner's expense. Vehicles parked overnight without
prior written consent of the Landlord shall be deemed abandoned and shall be
subject to being towed at vehicle owner's expense. Tenant will from time to
time, upon the request of Landlord, supply Landlord with a list of license plate
numbers of vehicles owned or operated by its employees or agents.

27. No trucks, tractors or similar vehicles can be parked anywhere other than in
Tenant's own truck dock area. Tractor-trailers which must be unhooked or parked
with dolly wheels beyond the concrete loading areas must use steel plates or
wood blocks under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in the
parking areas or on streets adjacent thereto.

28. During periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow and loading and unloading areas of other tenants.
All products, materials or goods must be stored within the Tenant's Premises and
not in any exterior areas, including, but not limited to, exterior dock
platforms, against the exterior of the Building, parking areas and driveway
areas. Tenant agrees to keep the exterior of the Premises clean and free of
nails, wood, pellets, packing materials, barrels and any other debris produced
from their operation.

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                   EXHIBIT E - ADDITIONAL SURRENDER CONDITIONS

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

Prior to vacating the Premises, it must be left in good, clean condition with
all systems in good working order. The items that will be inspected by Landlord
are listed below, but are not limited to the following:

1. Service and repair all heating and air conditioning equipment, exhaust fans
and hot water heater. Provide Landlord's office with a copy of the inspection
and service report provided by the mechanical contractor.

2. All lights in the office and warehouse must be working. Relamp and/or
reballast the fixtures as necessary.

3. Overhead doors must be serviced and repaired.

4. All exterior metal doors, including hardware should be serviced or replaced
as necessary.

5. Repair all damaged sheetrock in the office area and in the warehouse along
the demising walls.

6. Office and warehouse floors should be left in good, clean condition.

7. Fire sprinkler system (if available) must have a current year inspection.

8. Any exterior signage must be removed; repair and repaint the fascia as
necessary.

If the Tenant elects not to do any of the above, please note that the Landlord
will have the necessary repairs made and deduct the expenses from the Security
Deposit.

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        EXHIBIT F - ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT

                ATTACHED TO AND MADE A PART OF LEASE BEARING THE
                  LEASE REFERENCE DATE OF JULY 17, 2002 BETWEEN
            CALWEST INDUSTRIAL HOLDINGS TEXAS, L.P., AS LANDLORD AND
                    HOME INTERIORS AND GIFTS, INC., AS TENANT

The purpose of this questionnaire is to obtain information regarding the
environmental impact your company or business may have on the building located
at 2828 Trade Center Blvd., Carrollton, Texas, neighboring properties or the
atmosphere based upon your use, storage, treatment, generation, handling,
transportation or disposal of hazardous materials or chemicals, diesel fuel,
gasoline, and other petroleum products. Prospective tenants should answer the
questions in light of their proposed operations on the premises. Existing
tenants should answer the questions as they relate to on-going operations on the
premises and should update any information previously submitted. If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this questionnarre.

         If any answers to this questionnaire require further investigation,
please complete the investigation before answering the question. Your answers
should be complete and include any information which you believe pertinent to
the questions asked.

         Your cooperation in this matter is appreciated. Any questions should be
directed to, and when completed, the form should be mailed to:

RREEF Management Company
1406 Halsey Way, Suite 110
Carrollton, Texas 75007
Ann: Cynthia Prendergast
Phone: (972)323-8400

1. GENERAL INFORMATION

         1.1 Name of responding company or business (this entity will be
referred to as "you" or "your"):

                  Check the Applicable Status:

                  Prospective Tenant [ ]         Existing Tenant [ ]

         1.2 Mailing Address:
                             ---------------------------------------------------

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

                  Contact Person and Title:
                                           -------------------------------------

                  Telephone Number: (   )
                                     --- ---------------------------------------

                  Address of Leased Premises (the "premises"):
                                                              ------------------

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

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                  Length of Lease Term:
                                       -----------------------------------------

         1.3 Describe the proposed operations to take place on the property,
including principal products manufactured or services to be conducted. Existing
tenants should describe any proposed changes to on-going operations.

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

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

         1.4 Will a company or business other than you occupy the premises?

                  Yes [ ]           No [ ]

                  If your answer is yes, complete a separate questionnaire for
                  each additional occupant.

         1.5 Provide the name, title and address of the person who is
responsible for ensuring you are in compliance with environmental laws and
regulations pertaining to the use, storage, treatment, generation, handling,
transportation or disposal of hazardous materials or hazardous wastes.

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

         1.6 Provide the name, title and address of the person completing this
questionnaire.

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

                  If, the person who complete this questionnaire is not the same
                  person identified in Section 1.5, did the person identified in
                  Section 1.5 assist in completing this questionnaire?

                  Yes [ ]           No [ ]

                  If your answer is no, explain why.
                                                     ---------------------------

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

         1.7 How many employees will be employed at the premises.

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

2. STORAGE OF HAZARDOUS MATERIALS

         2.1 Will any hazardous materials be treated, used, stored or present
on-site?

                  Yes [ ]           No [ ]

         2.2 If you answered yes to Section 2.1, provide the following
information for each hazardous material. Also, provide a copy of the MSDSs for
each hazardous material.

                  Name or Description:
                                      ------------------------------------------

                  Nature of Material:
                                     -------------------------------------------

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                  Maximum Volume stored at one time:
                                                    ----------------------------

                  Total amount used per year:
                                             -----------------------------------

                  Location of Storage:
                                      ------------------------------------------

                  Maximum time stored:
                                      ------------------------------------------

                  Describe the manner in which each hazardous material is used
                  on the premises:
                                  ----------------------------------------------

         2.3 If you answered yes to Section 2.1, describe the containers and
storage areas. Your description should provide the following information:

                  Number of Storage Areas:
                                          --------------------------------------

                  Type of Containers:
                                     -------------------------------------------

                  Capacity of Containers:
                                         ---------------------------------------

                  Secondary Containment: Yes [ ]        No [ ]

                           Type/Composition:
                                            ------------------------------------

                           Maximum Volume:
                                          --------------------------------------

                  Location of Storage Areas:
                                            ------------------------------------

         2.4 If you answered yes to Section 2.1, provide a map showing where
each hazardous material, container and storage area is located on the premises.

3. STORAGE TANKS & SUMPS

         3.1 Is any above or below ground storage of hazardous materials in
tanks proposed or currently conducted on the premises?

                  Yes [ ]           No [ ]

                  If yes, describe the hazardous materials to be stored, the
                  type, size and construction of each tank, and describe the
                  secondary containment. Identify the location of each tank.

         3.2 Do you have all federal, state or local (including local fire
department) permits required to operate each above or below ground tank?

                  Yes [ ]           No [ ]

                  If yes, please attach copies of the permits. If not, please
                  explain why not

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

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

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

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         3.3 Do you have or intend to have any sumps on the premises?

                  Yes [ ]           No [ ]

                  If yes, how many sumps are there, or do you intend to have, on
                  the premises?

                  Yes [ ]           No [ ]

                  Provide the following information for each sump: (i) its
                  intended use, (ii) the hazardous material it contains, (iii)
                  whether or not it is used for storage, (iv) its type, size and
                  construction, and (v) its location.

         3.4 Have any of the tanks or sumps been monitored, inspected or tested
for leakage?

                  Yes [ ]           No [ ]

                  If so, attach the results.

         3.5 Have any spills or leaks occurred from such tanks or sumps?

                  Yes [ ]           No [ ]

                  If so, describe (e.g., date, location, hazardous material and
                  quantity released).

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

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

         3.6 Were any regulatory agencies notified of the spill or leak?

                  Yes [ ]           No [ ]

                  If so, attach copies of any spill reports filed, any clearance
                  letters or other correspondence from regulatory agencies
                  relating to the spill or leak.

         3.7 Have any underground or above ground storage tanks or sumps been
taken out of service or removed?

                  Yes [ ]           No [ ]

                  If yes, attach copies of any closure permits and clearance
                  obtained from regulatory agencies relating to closure or
                  removal of such tanks.

4. SPILLS AND RELEASES

         4.1 During the past five years, have any spills or releases occurred on
the premises?

                  Yes [ ]           No [ ]

                  If so, please describe each spill or release (e.g., date,
                  location, hazardous material and quantity) and attach the
                  results of any testing conducted to determine the extent of
                  such spills or release?

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                  Yes [ ]           No [ ]

         4.2 Were any agencies notified in connection with such spills or
releases?

                  Yes [ ]           No [ ]

                  If so, attach copies of any spill or release reports or other
                  correspondence with regulatory agencies.

         4.3 Were any clean-up actions undertaken in connection with the spills
or releases?

                  Yes [ ]           No [ ]

                  If so, briefly describe the actions taken. Attach copies of
                  any clearance letters obtained from any regulatory agencies
                  involved and the results of any final air, soil or groundwater
                  sampling done upon completion of the clean-up work.

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

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

5. HAZARDOUS WASTE MANAGEMENT

         5.1 Have you been issued an EP Hazardous Waste Generator I.D. Number?

                  Yes [ ]           No [ ]

                  If yes, provide the number:
                                              ----------------------------------

         5.2 Have you filed a biennial report as a hazardous waste generator?

                  Yes [ ]           No [ ]

                  If so, attach a copy of the most recent report filed.

         5.3 For each hazardous waste generated or to be generated provide (i)
its hazard class and waste code, (ii) describe the process generating the waste,
and (iii) state the quantity generated on a monthly basis.

         5.4 Describe the method(s) of disposal for each hazardous waste.
Indicate where and how often disposal will take place and provide the name and
telephone number of your hazardous waste recycling and/or disposal company and
the name and telephone number of your hazardous waste transporter.

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

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

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

         5.5 Indicate the name of the person(s) responsible for maintaining
copies of hazardous waste manifests completed for off-site shipments of
hazardous waste.

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

         5.6 Is any treatment or processing of hazardous wastes currently
conducted or proposed to be conducted at the premises?

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                  Yes [ ]           No [ ]

                  If yes, please describe any existing or proposed treatment
                  methods.

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

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

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

                  Provide the name, telephone number and agency (local, state or
                  federal) which supervises your waste management operation in
                  this state or region:

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

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

         5.7 Attach copies of any hazardous waste permits or licenses issued to
you with respect to the operations on the premises.

                  If no permit is required to conduct the activities on the
                  premises, so indicate.

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

         5.8 Are you are in the process of obtaining a hazardous waste permit?

                  Yes [ ]           No [ ]

                  If yes, provide the information requested in Section 5.3.

6. WASTEWATER TREATMENT/DISCHARGE

         6.1 Do you discharge wastewater to:

                      storm drain?            other? Describe.
                  ----                    ----                -----------------

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

                      surface water?          no industrial discharge
                  ----                    ----
                      sewer?
                  ----

         6.2 Is your wastewater treated before discharge?

                  Yes [ ]           No [ ]

                  If yes, describe the type of treatment conducted. If no,
                  explain why treatment is not required.

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

         6.3 Attach copies of any wastewater discharge permits issued to you
with respect to the operations on the premises.

         6.4 Provide the name, telephone number and agency (local, state or
federal) which supervises your wastewater discharge practices:

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

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

7. AIR EMISSIONS

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         7.1 Do you have any air pollution control systems or stacks?

                  Yes [ ]           No [ ]

                  Please describe (e.g., type of system, purpose, height of
                  stacks, venting, quantity of emissions):

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

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

         7.2 Do you operate any of the following types of equipment or type of
process, or any other equipment or process requiring an air emissions permit
from an air pollution control district or agency:

                      Spray booth             Generator
                  ----                    ----

                      Dip tank                Storage Tank
                  ----                    ----

                      Drying oven             Degreaser
                  ----                    ----

                      Incinerator             No Equipment or Process
                  ----                    ----

                                 Requires an Air Permit

                                 Other (Please Describe):
                             ----

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

                  Are you required to prepare any air emission inventory reports
                  and/or risk assessments for any equipment or process?

                  Yes [ ]           No [ ]

                  If yes, attach a copy of the report or assessment

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

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

         7.3 Are air emissions from your operations monitored?

                  Yes [ ]           No [ ]

                  If so, indicate the frequency of monitoring and a description
                  of the monitoring results.

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

         7.4 Attach copies of any air emissions permits pertaining to your
operations on the premises.

         7.5 Provide the name, telephone number, and agency (local, state or
federal) which issues your air pollution permits.

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8. WORKER SAFETY

         8.1 Describe the procedures followed to comply with OSHA Hazard
Communication Standard requirements.

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

         8.2 Describe any protective or special equipment or clothing (e.g.,
respirators) which your employees wear, or are required to wear, in order to
reduce exposures to hazardous substances on the premises. Also indicate the
purpose of such equipment or clothing.

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

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

9. ENVIRONMENTAL ENFORCEMENT ACTIONS, COMPLAINTS

         9.1 Have you ever been subject to (i) any local, state or federal
agency environmental enforcement actions, administrative orders, or consent
decrees (civil, criminal or administrative) or permit revocation within the last
five years, or (ii) any local, state or federal agency or private party
notifications identifying you as a potentially responsible party for an
environmental cleanup or environmental related claim?

                  Yes [ ]           No [ ]

                  If so, describe the actions and any continuing compliance
                  obligations imposed as a result of these actions.

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

         9.2 Other than governmental action addressed in Section 10.1, have
there ever been, or are there now pending or threatened, any lawsuits or claims
against you regarding compliance with any environmental or health and safety
laws or regulations concerns?

                  Yes [ ]           No [ ]

                  If so, provide the following: (i) the nature of the claim,
                  (ii) the date when the claim was first asserted, (iii) the
                  name(s) of the party(ies) asserting the claim, and (iv) the
                  history and current status of such claim, including what
                  actions you have taken to address and/or remediate the claim.

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

         9.3 Has an environmental audit ever been conducted at your current
facility?

                  Yes [ ]           No [ ]

                  If so, specify the number of audits, identify the person who
                  conducted the audit, the date of each audit, and discuss the
                  results of such audits or attach a copy of each audit.

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

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         9.4 Have there been any problems or complaints from employees or
neighbors regarding environmental issues (e.g., odor, emissions, nuisance, etc.)
resulting from the operation of your current facility?

                  Yes [ ]           No [ ]

If so, describe the source and nature of the complaint.

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

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

10. ADDITIONAL INFORMATION

         10.1 Please provide any additional information which you believe is
relevant to assess the environmental impact which your use, storage, treatment,
generation, handling, transportation or disposal of hazardous materials or
hazardous waste may have on the premises.

11. TENANT DISCLOSURE AND REPRESENTATIONS

         11.1 The undersigned understands that it has an ongoing obligation,
according to the terms of the lease, to report in writing any changes to the
information it provides in this questionnaire and to update this questionnaire,
as necessary, with any new information which may impact the health and safety of
people on or in the vicinity of the premises or which may impact the
environment.

         11.2 The undersigned warrants and represents that it is, as of the date
set forth below, in compliance with all environmental laws and regulations
governing its activities on the premises, except as expressly set forth in this
questionnaire.

         11.3 The information contained in this questionnaire is true and
correct.

                                       TENANT:

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

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------
                                       Date:
                                            ------------------------------------

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