Document:

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                                                                  Exhibit 10.3B

                       FIRST AMENDMENT TO LEASE AGREEMENT

                                 BY AND BETWEEN

                          HEWSON/DESOTO PHASE I, L.L.C.

                                       AND

                WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC.

                         DATED: AS OF SEPTEMBER 1, 1999

PREPARED BY:

BAKER, DONELSON, BEARMAN & CALDWELL

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2000 FIRST TENNESSEE BUILDING
165 MADISON AVENUE
MEMPHIS, TENNESSEE 38103

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                       FIRST AMENDMENT TO LEASE AGREEMENT

        THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment"), entered into
as of the 1st day of September, 1999, by and between HEWSON/DESOTO PHASE I,
L.L.C., an Arizona limited liability company (the "Landlord"), and
WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC., a California corporation (the
"Tenant");

                           W I T N E S S E T H, that:

        The Original Lease (as hereinafter defined), as modified by this
Amendment, constitutes a financing agreement for the purposes of Sections
57-10-409 and 27-7-22.3 of the Mississippi Code of 1972, as amended.

        By means of a Lease Agreement dated as of December 1, 1998 by and
between Landlord and Williams-Sonoma, Inc., a California corporation ("Original
Tenant"), recorded at Book 79, Page 520 of the Land Deed Records, Chancery
Clerk's Office, DeSoto County, Mississippi (the "Original Lease"), Landlord
leased to Original Tenant that entire certain parcel of land (the "Property"),
containing 66.847 acres, more or less, and the easements and appurtenances
thereto, located in the County of DeSoto, State of Mississippi, as described in
EXHIBIT "A" attached hereto and made a part hereof, together with the building,
and on-site and off-site improvements as described therein (the "Original
Improvements") (the Property and the Original Improvements being herein
sometimes called the "Original Project"). The Original Project was financed
through the issuance of $30,300,000 Taxable Industrial Development Revenue
Bonds, Series 1998 (Hewson/DeSoto Phase I, L.L.C. Project) (the "Series 1998
Bonds") by the Mississippi

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Business Finance Corporation (the "Issuer"), pursuant to a Loan Agreement dated
as of December 1, 1998 between the Issuer and Landlord (the "Original Loan
Agreement"). The Bonds were issued pursuant to a Trust Indenture (the "Original
Indenture") of even date therewith executed by and between the Issuer and Union
Planters National Bank, N.A., as Trustee (the "Original Trustee"), and were
secured by a deed of trust of even date therewith and executed by Landlord in
favor of the Issuer (the "Original Deed of Trust"), which was assigned by the
Issuer to the Original Trustee pursuant to the Indenture. Interests of various
parties in the Original Project were subject to the Tenant Estoppel,
Subordination, Non-Disturbance and Attornment Agreement (the "Original
Non-Disturbance Agreement") of even date therewith by and among the Landlord,
the Original Tenant, the Issuer and the Original Trustee. Subsequent to the
issuance of the Series 1998 Bonds, the Original Tenant assigned its interests
under the Original Lease to the Tenant, a wholly owned subsidiary of Original
Tenant, by means of an Assignment of Lease dated as of July 1, 1999 (the
"Assignment").

        The Rental Commencement Date and Occupancy Commencement Date under the
Original Lease occurred on July 6, 1999, the date upon which Tenant commenced
actual productive use of the Original Project as a distribution center. Prior to
such date, Tenant installed in the Original Project certain fixtures (the
"Original Fixtures") and equipment (the "Original Equipment") not subject to the
Original Lease.

        The parties now wish to amend the Original Lease to provide for an
addition to the Original Improvements as described more fully herein. Landlord
hereby leases to Tenant, and Tenant hereby hires from Landlord, for a term equal
to the remainder of the Primary Term (as defined in the Original Lease), the
Addition to be constructed on the Property, and on-site and

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off-site improvements, all as described in the 1999 Plans (as defined in the
First Supplement to Loan Agreement, as hereinafter defined) attached hereto as
EXHIBIT "B" (the "Addition"). Tenant shall, during the course of and upon
completion of the construction of the Addition, at the Tenant's sole cost and
expense, install in the Addition certain fixtures (the "Addition Fixtures") and
equipment (the "Addition Equipment").

        The Addition will be financed with the proceeds of the $8,900,000
Taxable Industrial Development Revenue Bonds, Series 1999 (Hewson/DeSoto Phase
I, LLC Project) issued by the Issuer pursuant to a First Supplemental Trust
Indenture of even date herewith (the "First Supplemental Indenture") by and
between the Issuer and First Tennessee Bank National Association as successor
trustee (the "Trustee"). Such bonds (the "Series 1999 Bonds") will be Additional
Bonds (as defined in the Original Indenture), the proceeds of which will be
loaned to the Landlord by Issuer pursuant to the Original Loan Agreement, as
modified by a First Supplement to Loan Agreement of even date herewith (the
"First Supplement to Loan Agreement"). Landlord represents and warrants that all
requirements set forth in the Original Indenture and the Original Loan Agreement
for the issuance of Additional Bonds have been satisfied. The Series 1999 Bonds
will be secured on a parity with the Series 1998 Bonds. Documents executed to
secure the Series 1998 Bonds will be amended to reflect the issuance of the
Series 1999 Bonds and to subject the collateral pledged thereunder to a parity
lien for holders of Series 1999 Bonds.

        Based upon the foregoing, and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Landlord and Tenant agree
to the foregoing

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recitals and agree to modify the Lease upon the following terms, provisions,
conditions and limitations, and the parties respectively covenant and agree to
such modifications as follows:

        1. Definitions. Unless the context otherwise requires or unless
otherwise amended or defined herein, definitions of capitalized terms used in
the Original Lease shall be deemed to be amended by, and to have the meanings
set forth in, the First Supplemental Indenture and First Supplement to Loan
Agreement, and shall be incorporated herein. Capitalized terms used herein which
are defined in the Original Lease, which are not amended by the First
Supplemental Indenture or First Supplement to Loan Agreement, and which are not
otherwise defined herein shall have the meaning set forth in the Original Lease.
In addition, definitions set forth in the Recitals of this Amendment are
incorporated herein. Furthermore, the following definitions of capitalized terms
in the Original Lease shall be amended as follows:

(a)            "Basic Rent" shall mean the sum of Basic Rent (as defined in the
               Original Lease) plus Addition Basic Rent (as defined below in
               Section 2.1.A(c)).

(a)            "Company Payments" shall mean the sum of Company Payments (as
               defined in the Original Lease) plus Addition Company Payments (as
               defined below in Section 2.1.A(c)).

(a)            "Equipment" shall mean the Original Equipment and Addition
               Equipment taken as a whole.

(a)            "Fixtures" shall mean the Original Fixtures and Addition Fixtures
               taken as a whole.

(a)            "Global Basic Rent" shall mean the sum of Global Basic Rent (as
               defined in the Original Lease) plus Addition Global Basic Rent
               (as defined below in Section 2.1.A(a)).

(a)            "Improvements" shall mean the Original Improvements and the
               Addition taken as a whole.

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(a)            "Project" shall mean the Property, the Original Improvements, and
               the Addition.

(a)            "Rent" shall mean Basic Rent, Addition Basic Rent, Company
               Payments, Addition Company Payments, Additional Rent and Addition
               Additional Rent (as defined below in Section 2.2.A(a)).

        2. Occupancy of the Addition. (a) There shall be added to the Original
Lease immediately following Section 1.2 thereof the following Section 1.2.A:

               1.2.A. Occupancy . (a) The parties hereto understand and agree
        that the Addition is anticipated to be complete and ready for occupancy
        as evidenced by a Certificate of Occupancy to be issued by the relevant
        jurisdiction on or about the 10th day of January, 2000 (the "Estimated
        Addition Completion Date"). Landlord shall exert its best efforts toward
        the end that the Improvements be completed on or before January 10,
        2000. Landlord agrees to give Tenant written notice as to whether or not
        the Addition will be completed by the Estimated Addition Completion Date
        as soon as possible, but in any event not later than thirty (30) days
        prior to the Estimated Addition Completion Date.

               (b) Tenant's responsibility for payment of amounts set forth in
        Sections 2.1.A and 2.2.A hereof shall commence on that date (the
        "Addition Rental Commencement Date") which is the earliest of (i) ten
        (10) business days following receipt by the Tenant of a copy of those
        items required under Section 3.04 of the First Supplement to Loan
        Agreement, (ii) that date on which Tenant commences actual productive
        use (as distinct from installation of Addition Fixtures and Addition
        Equipment) of the Addition as part of the existing distribution
        facility, or (iii) April 30, 2000. Tenant's occupancy of the Addition
        shall commence on that date (the "Addition Occupancy Commencement Date")
        which is the earlier of (1) ten (10) business days following receipt by
        the Tenant of a copy of those items required under Section 3.04 of the
        First Supplement to Loan Agreement or (2) that date on which Tenant
        commences actual productive use (as distinct from installation of
        Addition Fixtures and Addition Equipment) of the Addition as part of the
        existing distribution facility. Notwithstanding anything to the contrary
        herein, Tenant shall have no obligation to pay Addition Company Payments
        until after the Addition Occupancy Commencement Date and until after all
        amounts (if any) due to Tenant under the Agreement and Indemnification
        of even date herewith (the "Indemnification Agreement") have been paid
        in full.

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               (c) Tenant's obligation to pay those amounts set forth in
        Sections 2.1.A and 2.2.A hereof (other than Addition Company Payments)
        shall arise on the Addition Rental Commencement Date regardless of any
        disputes which may occur between Landlord and Tenant concerning
        construction of the Addition, subject to the provisions of paragraph
        7.7.A of this Amendment.

               (d) The Landlord shall construct or cause to be constructed the
        Addition substantially in accordance with the 1999 Plans and the 1999
        Construction Budget (as defined in the First Supplement to Loan
        Agreement) attached hereto as Exhibit "C." The Landlord shall obtain all
        approvals requisite to the construction of the Addition, and shall
        construct the Addition in material compliance with all federal, State
        and local laws and regulations. On or before the Addition Occupancy
        Commencement Date, the Landlord will furnish to the Tenant copies of all
        required permits and authorizations except those permits and
        authorizations which Tenant must obtain, authorizing the occupancy and
        uses of the Addition for the purposes contemplated by the Tenant. The
        Landlord will take such action and institute such proceedings as shall
        be necessary to cause and require all contractors and material suppliers
        to complete their contracts, including the correction of any defective
        work, and the Landlord agrees that the Tenant may, from time to time, in
        its own name, or in the name of the Landlord, take such action as may be
        necessary or advisable, as determined by the Tenant, to assure that the
        construction of the Addition will proceed in an efficient and
        workmanlike manner. Any amounts recovered as damages, refunds,
        adjustments or otherwise in connection with the foregoing (a) shall be
        paid to the Tenant if the Tenant has corrected, at its own expense, the
        matter which gave rise to such default or breach, or (b) shall be paid
        to the Landlord if the Landlord has corrected, at its own expense, the
        matter which gave rise to such default or breach, or (c) shall be paid
        to the Landlord if the matter which gave rise to such default or breach
        has not yet been corrected and if such payment is prior to the Addition
        Occupancy Commencement Date (in which event Landlord shall thereafter
        promptly apply such amount to the correction of such matter, with the
        balance, if any, disposed of as set forth in Section 3.05 of the First
        Supplement to Loan Agreement), or (d) shall be paid to the Tenant if the
        matter which gave rise to such default or breach has not yet been
        corrected and if such payment is after the Addition Occupancy
        Commencement Date (in which event Tenant shall thereafter promptly apply
        such amount to the correction of such matter, with the balance, if any,
        disposed of as set forth in Section 3.2(b) of the Original Lease).

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        (b) There shall be added to the Original Lease immediately following
Section 1.3 thereof the following Section 1.3.A:

               1.3.A. Addition Fixtures; Addition Equipment . The parties hereto
        understand and agree that the Landlord has no responsibility whatsoever
        regarding the delivery and installation of the Addition Fixtures and
        Addition Equipment in the Addition, and that the Lease and the Tenant's
        covenants and agreements contained herein are in no way conditioned upon
        such delivery or installation.

        3. Rental Terms for the Addition. (a) There shall be added to the
Original Lease immediately following Section 2.1 thereof the following Section
2.1.A:

               2.1.A Addition Rent. (a) From and after the Addition Rental
        Commencement Date, Tenant shall pay Addition Global Basic Rent, subject
        to adjustment as provided in Section 2.6.A hereof; "Addition Global
        Basic Rent" being defined (i) during the portion of the Primary Term
        remaining after such date as the sum of Addition Basic Rent (as defined
        below) and Addition Company Payments (as defined below) (provided,
        however, that Tenant shall have no obligation to pay Addition Company
        Payments until after the Addition Occupancy Commencement Date and until
        after all amounts due to Tenant under the Indemnification Agreement have
        been paid in full); and (ii) during the Option Periods, on the same
        terms as set forth in Section 2.7 of the Lease (provided, however, that
        during said Option Periods all Addition Global Basic Rent shall also
        constitute Addition Company Payments hereunder).

               (b) During the portion of the Primary Term remaining after the
        Addition Rental Commencement Date, the Addition Global Basic Rent shall
        be payable in the amounts set forth in Exhibit "D" attached hereto (the
        "Addition Rent Schedule") and made a part hereof, subject to adjustment
        of the Addition Basic Rent as provided in Section 2.6.A hereof. Any such
        Addition Basic Rent adjustment will be documented by an amended Exhibit
        "D," agreed to by the parties, at the time of such adjustment. During
        any Option Period, the Addition Global Basic Rent shall be determined as
        set forth in Section 2.7 of the Lease.

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               (c) From and after the Addition Rental Commencement Date through
        the end of the Primary Term, and so long as any Series 1999 Bonds remain
        Outstanding or the Indenture has not been released, Tenant shall timely
        pay to Trustee in accordance with the terms of the Loan Agreement at
        First Tennessee Bank National Association, 4385 Poplar Avenue, Memphis,
        Tennessee 38117, Attention: Corporate Trust Services, or such other
        person or at such other place as Trustee designates in writing to
        Tenant, without previous demand therefor and without deduction or
        offset, the amount of quarterly payments of interest accruing on
        Outstanding Series 1999 Bonds and semi-annual 1999 Mandatory Sinking
        Fund Payments (as defined in the First Supplemental Indenture) due on
        the Series 1999 Bonds (the "Addition Basic Rent"). Attached as part of
        Exhibit "D" is a schedule of payments of Addition Basic Rent over the
        term of the Series 1999 Bonds assuming no prepayments and assuming no
        change in the rate of interest borne by the Series 1999 Bonds as
        described in Section 2.6.A(b). All payments of Addition Basic Rent by
        Tenant to Trustee shall be credited against Tenant's obligation to pay
        Addition Global Basic Rent. Attached as part of Exhibit "D" is a
        schedule of Addition Company Payments for the portion of the Primary
        Term remaining after the Addition Rental Commencement Date, assuming no
        prepayment under Section 2.6.A(a). Provided that all amounts due to
        Tenant under the Indemnification Agreement have been paid in full, from
        and after the Addition Occupancy Commencement Date and during the
        portion of the Primary Term remaining after such date, Tenant shall pay
        such amounts (the "Addition Company Payments") to Landlord, ? Hewson
        Properties, Inc. at 4636 E. University Drive, Suite 265, Phoenix,
        Arizona 85034, or to such other person or place as Landlord designates
        in writing to Tenant, quarterly (on the same day as quarterly interest
        payments are due on the Series 1999 Bonds), without previous demand
        therefor, in an amount equal to one-quarter (_) of the difference
        between (i) the then applicable Addition Global Basic Rent (as adjusted
        in Section 2.6.A hereof during the remaining portion of the Primary
        Term) for the applicable lease year, and (ii) the Addition Basic Rent
        for the applicable lease year ("lease year" being the successive one (1)
        year periods). During any Option Period, all Addition Global Basic Rent
        shall be deemed to be Addition Company Payments for purposes of the
        Lease, and shall be paid to Landlord quarterly as set forth in this
        Section 2.1.A(c).

               (d) Notwithstanding any other provision hereof, in the event that
        the Addition Occupancy Commencement Date occurs on a date other than a
        quarterly interest payment date on the Series 1999 Bonds, the Addition
        Company Payments due hereunder shall be prorated for such portion of a
        quarterly interest period.

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        (b) There shall be added to the Original Lease immediately following
Section 2.2 thereof the following Section 2.2.A:

               2.2.A. Net-Net-Net Lease of Addition. (a) The Original Lease, as
        modified by this Amendment, constitutes what is commonly known as a
        "net-net-net lease," it being understood that the Trustee and the
        Landlord shall receive the Addition Basic Rent and Addition Company
        Payments, respectively, free and clear of any and all impositions,
        taxes, liens, charges or expenses of any nature whatsoever in connection
        with Landlord's ownership and leasing of the Project.

               (b) In addition to the Addition Global Basic Rent provided for in
        Section 2.1.A hereof, from and after the Addition Rental Commencement
        Date, the Tenant shall pay to Landlord or to third parties as provided
        elsewhere (particularly in Sections 2.3.A hereof and 2.4. of the
        Original Lease) as additional rent ("Addition Additional Rent") all
        impositions, taxes, payments or fees in lieu of taxes, insurance
        premiums, operating charges, costs and expenses relating to the Addition
        which arise or may be contemplated under any provisions of the Lease
        during the portion of the Primary Term remaining following the Addition
        Rental Commencement Date and any Option Periods. Upon the failure of
        Tenant to pay any of such costs, charges or expenses, Landlord shall
        have the same rights and remedies as otherwise provided in the Lease for
        the failure of Tenant to pay Addition Basic Rent. It is the intention of
        the parties hereto that Tenant shall in no event be entitled to any
        abatement of or reduction in Addition Global Basic Rent payable
        hereunder except as expressly provided herein. Any present or future law
        to the contrary shall not alter this agreement of the parties.

               Amounts payable by Tenant hereunder shall include, but not be
        limited to, the following:

                (i) Insurance premiums required to maintain the insurance
                policies attributable to the Addition described in Article IV of
                the Original Lease;

                (i) Expenses of occupying, operating, altering, maintaining and
                repairing the Addition throughout the term of the Lease; and

                (i) All taxes, assessments, fees in lieu of taxes and other
                governmental charges with respect to the Addition, as set forth
                in Section 6.2 of the Original Loan Agreement, except as
                provided in

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                Section 2.4 of the Original Lease and except as prorated
                pursuant to Section 2.3.A(a) of this Amendment, and all other
                expenses and charges (including any asserted by the Issuer or
                the Trustee, including but not limited to Trustee's regular and
                extraordinary fees, as to all of which Landlord shall be
                entitled to prompt reimbursement by Tenant) which during the
                term of this Lease shall be levied, assessed or imposed by any
                governmental authority upon or with respect to, or incurred in
                connection with the ownership, possession, occupation,
                operation, alteration, maintenance, repair or use of the
                Addition.

               If at any time during the term of the Lease under the laws of the
        State of Mississippi or any political subdivision thereof in which the
        Addition is situated, a tax or excise on rents or other tax, however
        described, is levied or assessed by said State or political subdivision
        against Landlord or the rentals set forth in Section 2.1.A hereof,
        Tenant covenants to pay and discharge such tax or excise on rents or
        other tax, but only to the extent of the amount thereof which is
        lawfully assessed or imposed upon Landlord and which was so assessed or
        imposed as a direct result of Landlord's interest in the Addition, or of
        this Amendment or of the rentals accruing hereunder, it being the
        intention of the parties hereto that all sums payable by Tenant
        hereunder (including, without limitation, Addition Basic Rent, Addition
        Company Payments, Addition Additional Rent and all other sums due
        hereunder) shall be paid to Landlord absolutely net without offset of
        any kind or deduction of any nature whatsoever except as expressly
        provided in this Amendment with respect to Addition Company Payments.
        Any payment or discharge by Tenant of any tax or excise on rents or
        other tax referred to in the preceding sentence shall not be deemed to
        be Addition Additional Rent. Nothing in this Amendment shall be
        construed to require Tenant to pay any franchise, estate, inheritance,
        succession, capital levy or transfer tax of Landlord, or any income,
        excess profits or revenue tax or any other tax or impost charged or
        levied against Landlord upon the rentals payable by Tenant under this
        Amendment, except to the extent hereinabove provided. In the case of any
        assessment for public improvement wherein the cost of the public
        improvement is permitted to be paid in installments, then and in such
        event only, such installments falling due during the term of this
        Amendment shall be paid by Tenant, and all such installments falling due
        subsequent to the term of this Amendment shall be paid by Landlord,
        notwithstanding the provisions of Section 2.3.A hereof. For the purpose
        of the foregoing sentence, an installment is due on the last day prior
        to the date upon which such an installment becomes delinquent.

               Upon the occurrence and continuation of an event of default
        hereunder (an "Event of Default"), the Landlord may require the Tenant
        to deposit with the Trustee (or Landlord if there is no Trustee) in an
        escrow account bearing interest

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        for the benefit of Tenant (i) an amount equal to (A) all taxes which are
        due and payable which Tenant is obligated to pay under this Section,
        including accrued ad valorem taxes, if any, or, in the alternative all
        amounts due as payments or fees in lieu of taxes, with respect to the
        Addition plus (B) any then delinquent insurance premiums allocable to
        the Addition with respect to the insurance required under Section 4.1 of
        the Original Lease, and (ii) thereafter, each month, an amount equal to
        one-twelfth (1/12th) of the annual charges for taxes to be paid under
        this Section 2.2.A and insurance premiums.

               Tenant covenants to cooperate fully with Landlord in taking any
        actions necessary to apply for and receive ad valorem tax relief for the
        Addition, including, but not limited to, meeting the requirements of
        Mississippi Code Section 27-31-101 and Section 27-31-104. Tenant
        expressly acknowledges that no right of offset with respect to payment
        of Addition Basic Rent to the Trustee or the payment of other amounts
        (except Addition Company Payments) hereunder shall arise in the event of
        the loss of ad valorem tax relief. Landlord agrees that, so long as
        Tenant is not in default hereunder, if any actions on the part of
        Landlord result in the occurrence of an event of default under the Loan
        Agreement or leads to a foreclosure on the Deed of Trust or any other
        event the result of which is the loss of ad valorem tax relief under the
        Loan Agreement, Landlord will indemnify Tenant to the extent Tenant is
        required under this Section 2.2.A to pay ad valorem taxes in excess of
        the payments in lieu of taxes which otherwise would have been paid by
        Tenant hereunder.

               (c) Tenant agrees, within six (6) months following the earlier of
        (i) the Addition Occupancy Commencement Date or (ii) the date of
        issuance of the Series 1999 Bonds, the Tenant will certify in writing to
        the Landlord as to the number of jobs created or, if prior to the
        Addition Occupancy Commencement Date, anticipated to be created, as a
        result of the Addition.

               (d) Tenant will reimburse Landlord with respect to certain
        environmental inspection matters as follows:

                      (i) On an annual basis, Tenant will reimburse Landlord for
               the costs of a "walk-through" inspection of the Addition by a
               qualified environmental engineer reasonably acceptable to Tenant.

                      (ii) If such inspection yields evidence of any potential
               environmental hazards related to Tenant's use and occupancy of
               the Addition, Tenant will reimburse Landlord for such additional
               environmental inspections and reports as are deemed reasonably
               necessary by such engineer.

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        (c) There shall be added to the Original Lease immediately following
Section 2.3 thereof the following Section 2.3.A:

               2.3.A Proration of Addition Taxes . (a) The taxes, fees in lieu
        of taxes, and other charges and expenses with respect to the Addition,
        described in Section 2.2.A(a) hereof, shall be prorated when appropriate
        between Landlord and Tenant in order that all of such taxes and other
        charges and expenses allocable to the Addition which relate to the
        period subsequent to the termination of the term of the Lease shall be
        borne by Landlord and in order that all of such taxes and other charges
        and expenses allocable to the Addition which relate to the term of the
        Lease shall be borne by Tenant. Such proration shall be computed in
        accordance with generally accepted accrual accounting principles and
        Landlord and Tenant shall each indemnify and hold the other harmless
        from any taxes and other charges and expenses relating to their
        respective periods of responsibility which may have become a charge upon
        the other.

               (b) Tenant shall not enter into any non-terminable contracts or
        agreements with respect to the Addition extending beyond the term of the
        Lease without the prior written consent of Landlord, which consent
        Landlord may not withhold unreasonably and arbitrarily.

        (d) There shall be added to the Original Lease immediately following
Section 2.6 thereof the following Section 2.6.A:

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               2.6.A Addition Global Basic Rent Adjustment . (a) The parties
        hereto contemplate that the Costs of the Addition provided for hereunder
        will equal the aggregate sum of Eight Million Nine Hundred Thousand
        Dollars ($8,900,000.00) (such amount being herein also sometimes called
        the "Addition Target Cost"). If the Addition is completed for less than
        the Addition Target Cost (resulting in the transfer of such surplus
        amount of Series 1999 Bond proceeds from the 1999 Accounts (as defined
        in the First Supplemental Indenture) within the Acquisition Fund to the
        Bond Fund (each as defined in the Original Loan Agreement) under Section
        5.01(b) of the First Supplemental Indenture, the application of such
        amount by the Trustee under Section 3.01(d) of the First Supplemental
        Indenture to the redemption of Series 1999 Bonds at par pro rata at the
        earliest possible date and the corresponding reduction in the amount of
        principal and interest payments due on the Series 1999 Bonds), the
        Addition Global Basic Rent during the portion of the Primary Term
        remaining after the Addition Occupancy Commencement Date shall be
        reduced as follows: (1) Addition Basic Rent during such period shall be
        reduced proportionately, and (2) quarterly Addition Company Payments
        shall be reduced by an amount equal to (x) the product of one-half
        percent (0.5%) times such surplus amount of Series 1999 Bond proceeds
        divided by (y) four (4).

               (b) The Series 1999 Bonds are subject to an interest rate
        increase on July 1, 2009, or if such day is not a business day, the next
        succeeding business day (the "1999 Rate Adjustment Date"), as provided
        in Section 2.02 of the First Supplemental Indenture, up to a maximum of
        thirteen percent (13%) per annum. Landlord and Tenant agree that, upon
        receiving notice from the Trustee that such an increase in rate has
        occurred, the Addition Basic Rent component of the Addition Global Basic
        Rent during the remaining portion of the Primary Term shall be increased
        accordingly.

               (c) Following the occurrence of any circumstances set forth in
        Section 6.9 of the Original Loan Agreement requiring or permitting the
        partial prepayment of Series 1999 Bonds, such amounts will be used to
        redeem Series 1999 Bonds as provided in Section 3.01(e) of the First
        Supplemental Indenture. If any such redemption occurs during the portion
        of the Primary Term remaining after the Addition Occupancy Commencement
        Date, the Addition Basic Rent component of the Addition Global Basic
        Rent during such period shall be reduced proportionately.

        4. Right of Offset. There shall be added to the Original Lease
immediately following Section 7.7 thereof the following Section 7.7.A:

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               7.7.A Right of Offset. So long as Tenant has not exercised any
        right to terminate the Lease as set forth in Section 10.24(a) of the
        Original Lease, any breach by Landlord of any term or provision hereof
        shall, in addition to those rights set forth in Section 10.24(a) of the
        Original Lease, give Tenant the right to offset sums due Tenant from
        Landlord as a result thereof against sums payable hereunder to Landlord
        as Addition Company Payments. In addition, Tenant shall have the right
        to offset Addition Company Payments owed to Landlord hereunder against
        sums owed Tenant from time to time pursuant to the Indemnification
        Agreement (as defined in Section 1.2.A of this Amendment). So long as
        any Series 1999 Bonds remain Outstanding, or the Indenture has not been
        released, then notwithstanding a breach by Landlord, Tenant shall remain
        liable for the payment of all Addition Basic Rent to the Trustee and
        payment of other amounts (except Addition Company Payments) hereunder
        until termination of the Lease by Tenant as provided in the Original
        Lease.

        5. Reaffirmation of Provisions of Articles III, IV, V and VI of the
Original Lease. Subject to the last sentence of this paragraph, the Landlord and
the Tenant reaffirm, ratify and restate the provisions of Articles III, IV, V
and VI of the Original Lease relating to insurance, financial covenants, damage,
destruction and condemnation and other provisions included therein, and agree
that such provisions shall be equally applicable to the Addition and Addition
Basic Rent payable hereunder. References in said Articles to "Occupancy
Commencement Date" shall, with respect to the Addition, be deemed to refer to
the Addition Occupancy Commencement Date. References therein to "Completion
Date" shall, if the applicable damage, destruction or condemnation relates only
to the Addition and occurs after the Completion Date, be deemed to refer to the
1999 Completion Date. References in Section 6.4 of the Original Lease to
"Tenant" shall be deemed to refer to the Original Tenant.

        6. Notices. Section 10.2 of the Original Lease is amended by deleting
subsection (iii) and inserting in lieu thereof the following:

<PAGE>   17

               "(iii) To Trustee, at First Tennessee Bank National Association,
        4385 Poplar Avenue, Memphis, Tennessee 38117, Attention: Corporate Trust
        Services."

        7. Benefits of the Act. There shall be added to the Original Lease
immediately following Section 10.10 thereof the following Section 10.10.A:

               10.10.A Benefits of the Act. Landlord and Tenant acknowledge that
        the Series 1999 Bonds are being issued pursuant to the provisions of
        Section 57-10-401 et seq. of the Mississippi Code of 1972, as amended
        (the "Act"), so that Tenant may obtain certain benefits provided by the
        Act as set forth in Section 4.05 of the First Supplement to Loan
        Agreement. Tenant hereby acknowledges and accepts the obligations set
        forth in Section 4.05 of the First Supplement to Loan Agreement on its
        behalf, and said Section is hereby incorporated herein by reference. In
        order to comply with the requirements of Section 57-10-409 of the Act,
        Tenant hereby covenants and agrees as follows:

                      (a) The Original Lease as amended by this Amendment may be
               assigned by Tenant (other than to an affiliate thereof) only upon
               the prior written consent of the Issuer following the adoption of
               a resolution by the Issuer to such effect.

                      (b) Upon a default by Tenant in the payment of Addition
               Basic Rent hereunder, the Trustee, on behalf of the Issuer, may
               exercise the rights and remedies available under the Indenture
               and the Loan Agreement, including, but not limited to,
               acceleration of the Bonds, foreclosure of the Deed of Trust and
               termination of the Lease.

        8. Miscellaneous. (a) All references in the Original Lease to sections
in Article I or II shall be deemed to refer to the corresponding sections added
by this Amendment as well. By way of example and not limitation, the reference
in the second line of Section 2.4(a) of the

<PAGE>   18

Original Lease to "Section 2.2(a) above" shall be deemed to refer to "Section
2.2(a) of the Original Lease and Section 2.2.A(a) of the Amendment."

        (b) The Original Lease shall be deemed amended in all other respects
necessary to subject the Addition to its terms, and to make the Addition part of
the Project.

        (c) Landlord and Tenant reaffirm all terms and provisions of the
Original Lease not expressly amended hereby, and make all representations and
warranties set forth therein as of the date hereof. Except as set forth in this
Amendment, the Original Lease shall be unchanged and remains in full force and
effect.

        (d) This Amendment may be executed in any number of counterparts, each
of which shall be an original and the counterparts shall constitute but one and
the same instrument.

        (e) This Amendment is to be governed and construed in accordance with
the internal laws of the State of Mississippi, without regard to principles of
conflicts of laws.

<PAGE>   19

        9. Joinder of Original Tenant. Williams-Sonoma, Inc., as Original Tenant
under the Original Lease, joins herein to acknowledge and agree that,
notwithstanding the Assignment, it remains jointly and severally liable for the
performance of the obligations created by the Original Lease, and is jointly and
severally liable for the performance of the obligations created by this
Amendment.

        IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Lease Agreement as of the day and year first above written.

                                        HEWSON/DESOTO PHASE I, L.L.C., an
                                        Arizona limited liability company

                                        BY: HEWSON PROPERTIES, INC., a
                                            California corporation

                                           By:  /s/s Gary J. Hewson
                                              ----------------------------------
                                              Gary J. Hewson, Chief Executive
                                              Officer

                                                                        LANDLORD

                                        WILLIAMS-SONOMA RETAIL DISTRIBUTION
                                        CENTER, INC., a California corporation

                                        By:  /s/ Jerry Owens
                                           -------------------------------------
                                        Title:  VP Operation
                                              ----------------------------------

                                                                          TENANT

                                        WILLIAMS-SONOMA, INC., a California
                                        corporation

                                        By:
                                           -------------------------------------
                                        Title:
                                              ----------------------------------

                                                                 ORIGINAL TENANT

<PAGE>   20

STATE OF TENNESSEE
COUNTY OF SHELBY

        Personally appeared before me, TONYA S. COCHRAN, the undersigned
authority in and for the said county and state, on this the 7th day of
September, 1999, within my jurisdiction, the within-named GARY J. HEWSON, who
acknowledged himself to be Chief Executive Officer of HEWSON PROPERTIES, INC., a
California corporation, which corporation is the manager of HEWSON/DESOTO PHASE
I, L.L.C., an Arizona limited liability company (the "Maker"), and that for and
on behalf of said corporation and as its act and deed as manager of the Maker
and for and on behalf of the Maker and as its act and deed, he executed and
delivered the foregoing instrument after having been duly authorized so to do.

                                      ------------------------------------------
                                      Notary Public

My Commission Expires:

----------------------

STATE OF TENNESSEE
COUNTY OF SHELBY

        Personally appeared before me, TONYA S. COCHRAN, the undersigned
authority in and for the said county and state, on this the 7th day of
September, 1999, within my jurisdiction, the within-named JERRY E. OWENS, who
acknowledged that he is Vice-President and Assistant Secretary of
WILLIAMS-SONOMA RETAIL DISTRIBUTION CENTER, INC. and that for and on behalf of
the said corporation, and as its act and deed, he executed and delivered the
above and foregoing instrument, after first having been duly authorized by said
corporation to do so.

                                      ------------------------------------------
                                      Notary Public

My Commission Expires:

----------------------

<PAGE>   21

STATE OF TENNESSEE
COUNTY OF SHELBY

        Personally appeared before me, TONYA S. COCHRAN, the undersigned
authority in and for the said county and state, on this the 7th day of
September, 1999, within my jurisdiction, the within-named DUANE WEEKS, who
acknowledged that he is Senior Vice-President of WILLIAMS-SONOMA, INC., a
California corporation, and that for and on behalf of the said corporation, and
as its act and deed, he executed and delivered the above and foregoing
instrument, after first having been duly authorized by said corporation to do
so.

                                      ------------------------------------------
                                      Notary Public

My Commission Expires:

----------------------

<PAGE>   22

                                   EXHIBIT "A"

                            Real Property Description

TRACT I:

LOCATED IN DESOTO COUNTY, MISSISSIPPI:

BEING A SURVEY OF PART OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER, PART
OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER, PART OF THE NORTHWEST QUARTER
OF THE NORTHEAST QUARTER AND PART OF THE NORTHEAST QUARTER OF THE NORTHEAST
QUARTER, SECTION 25, TOWNSHIP 1 SOUTH, RANGE 6 WEST, DESOTO COUNTY MISSISSIPPI
AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

        COMMENCING AT THE NORTHEAST CORNER OF SAID SECTION 25; THENCE S89
        degrees32'11"W ALONG THE NORTH LINE OF SAID SECTION 25 A DISTANCE OF
        80.00 FEET TO A POINT; THENCE S00 degrees31'04"E ALONG A LINE THAT IS
        80.00 FEET WEST OF AND PARALLEL TO THE EAST LINE OF SAID SECTION 25 A
        DISTANCE OF 491.49 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING S00
        degrees31'04"E ALONG A LINE THAT IS 80.00 FEET WEST OF AND PARALLEL TO
        THE EAST LINE OF SAID SECTION 25 A DISTANCE OF 1485.00 FEET TO A POINT;
        THENCE S89 degrees13'30"W A DISTANCE OF 1957.52 FEET TO A POINT; THENCE
        N00 degrees46'30"W A DISTANCE OF 1484.99 FEET TO A POINT; THENCE N89
        degrees13'30"E A DISTANCE OF 1964.19 FEET TO THE POINT OF BEGINNING AND
        CONTAINING 2,911,841 SQUARE FEET OR 66.847 ACRES.

TRACT II:

THE RIGHTS BENEFITTING THE FOREGOING TRACT I CREATED BY (A) THAT CERTAIN
RECIPROCAL STORM WATER DRAINAGE AGREEMENT BY AND BETWEEN HEWSON/DESOTO SOUTH,
LLC AND HEWSON/DESOTO PHASE I, LLC DATED AS OF THE 1ST DAY OF DECEMBER, 1998,
(B) THAT CERTAIN RECIPROCAL STORM WATER DETENTION AND DRAINAGE AGREEMENT BY AND
BETWEEN HEWSON/DESOTO PHASE I, LLC AND WILLIAMS-SONOMA, INC. DATED AS OF THE 1ST
DAY OF DECEMBER, 1998, (C) THAT CERTAIN RECIPROCAL CONNECTOR EASEMENT AGREEMENT
BY AND BETWEEN HEWSON/DESOTO PHASE I, L.L.C. AND WILLIAMS-SONOMA, INC. DATED AS
OF DECEMBER 1, 1998 AND (D) THAT CERTAIN PARKING EASEMENT AGREEMENT BY AND
BETWEEN HEWSON/DESOTO PHASE I, L.L.C. AND WILLIAMS-SONOMA, INC. DATED AS OF
DECEMBER 1, 1998, EACH RECORDED IN THE OFFICE OF THE CHANCERY CLERK, DESOTO
COUNTY, MISSISSIPPI ON DECEMBER 11, 1998.

<PAGE>   23

                                   EXHIBIT "B"

                  Plans for Addition Building and Improvements

                                  See Attached

                                       2
<PAGE>   24

RETAIL DISTRIBUTION CAMPUS, BUILDING ADDITION,
WILLIAMS-SONOMA, OLIVE BRANCH, MS
Parcel Two 260,640 S.F. Building Expansion
Plans by H&M Design Services, P.C.

<TABLE>
<CAPTION>
                                                                                                Final
Sheet #      Prepared by:  Sheet Title                                             Date     Revision Date
---------------------------------------------------------------------------------------------------------
<S>          <C>           <C>                                                     <C>      <C>
Cover        H-M           Drawing Index                                           8/20/99
---------------------------------------------------------------------------------------------------------
CE - 1.0     RSM           Grading & Drainage Plan                                 8/17/99
---------------------------------------------------------------------------------------------------------
A - 1.0      H-M           Site Concrete Paving Plan                               8/20/99
---------------------------------------------------------------------------------------------------------
A - 1.1      H-M           Building Additional Floor Plan                          7/22/99       8/20/99
---------------------------------------------------------------------------------------------------------
A - 1.2      H-M           Enlarged Area Floor Plans                               8/20/99
---------------------------------------------------------------------------------------------------------
A - 2.1      H-M           Room Finish & Door Schedules/Details                    7/22/99       8/20/99
---------------------------------------------------------------------------------------------------------
A - 3.1      H-M           Building Addition Elevations                            7/22/99       8/20/99
---------------------------------------------------------------------------------------------------------
A - 3.2      H-M           Tilt-Up Wall Panel Elevations                           7/22/99
---------------------------------------------------------------------------------------------------------
A - 3.3      H-M           Tilt-Up Wall Panel Elevations                           7/22/99       8/20/99
---------------------------------------------------------------------------------------------------------
A - 3.4      H-M           Tilt-Up Wall Panel Elevations                           7/22/99
---------------------------------------------------------------------------------------------------------
A - 4.1      H-M           Wall Sections                                           7/22/99
---------------------------------------------------------------------------------------------------------
A - 4.2      H-M           Wall Sections                                           8/20/99
---------------------------------------------------------------------------------------------------------
A - 5.1      H-M           Architectural Details                                   7/22/99       8/20/99
---------------------------------------------------------------------------------------------------------
A - 7.1      H-M           Building Addition Roof Plan                             7/22/99
---------------------------------------------------------------------------------------------------------
A - 7.2      H-M           Flashing Detail                                         7/22/99
---------------------------------------------------------------------------------------------------------
A - 8.1      H-M           Roof Opening Plan (Section "A")                         7/22/99
---------------------------------------------------------------------------------------------------------
A - 8.2      H-M           Roof Opening Plan (Section "B")                         7/22/99
---------------------------------------------------------------------------------------------------------
C - 1.1      H-M           Building Addition Foundation Plan                       7/22/99
---------------------------------------------------------------------------------------------------------
C - 2.1      H-M           Foundation Sections and Details                         7/22/99
---------------------------------------------------------------------------------------------------------
C - 2.2      H-M           Misc. Plans & Details                                   8/20/99
---------------------------------------------------------------------------------------------------------
S - 1.1      H-M           Building Addition Roof Framing Plan                     7/22/99
---------------------------------------------------------------------------------------------------------
S - 2.1      H-M           Framing Sections & Details                              7/22/99
---------------------------------------------------------------------------------------------------------
M - 1.1      H-M           Site Utilities Plan                                     8/20/99
---------------------------------------------------------------------------------------------------------
M - 3.1      H-M           Building Additional Plumbing Plans                      8/20/99
---------------------------------------------------------------------------------------------------------
M - 3.2      H-M           Enlarged Area Plumbing Plans                            8/20/99
---------------------------------------------------------------------------------------------------------
M - 4.1      H-M           Building Addtion HVAC Plan                              8/20/99
---------------------------------------------------------------------------------------------------------
M - 4.2      H-M           HVAC Details, Schedules & Notes                         8/20/99
---------------------------------------------------------------------------------------------------------
M - 5.1      H-M           Fire Protection Sprinkler Requirement Plan              8/18/99
---------------------------------------------------------------------------------------------------------
E - 1.1      H-M           Electrical Site Plan                                    8/12/99
---------------------------------------------------------------------------------------------------------
E - 2.1      H-M           Lighting Plan (Section "A")                              8/2/99
---------------------------------------------------------------------------------------------------------
E - 2.2      H-M           Lighting Plan (Section "B")                              8/3/99
---------------------------------------------------------------------------------------------------------
E - 2.3      H-M           Luminaire Schedule & Mounting Detail                    8/11/99
---------------------------------------------------------------------------------------------------------
E - 3.1      H-M           Power Plan (Section "A")                                8/12/99
---------------------------------------------------------------------------------------------------------
E - 3.2      H-M           Power Plan (Section "B")                                8/12/99
---------------------------------------------------------------------------------------------------------
E - 4.1      H-M           One Line Diagram                                        8/12/99
---------------------------------------------------------------------------------------------------------
E - 4.2      H-M           Fan Control Panel Schedule                              8/13/99
---------------------------------------------------------------------------------------------------------
E - 4.3      H-M           Panelboard Schedules                                    8/16/99
---------------------------------------------------------------------------------------------------------
E - 5.1      H-M           Systems Plan (Section "A")                              8/20/99
---------------------------------------------------------------------------------------------------------
E - 5.2      H-M           Systems Plan (Section "B")                              8/20/99
---------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>   25

                                   EXHIBIT "C"

                            1999 Construction Budget

                                  See Attached

                                      C-1
<PAGE>   26
               EXHIBIT "C" TO FIRST AMENDMENT TO LEASE AGREEMENT

                                   PHASE TWO

COST PROJECTION - WILLIAMS-SONOMA PROJECT                               09/02/99

ASSUMPTIONS:
-- ------- ------- ------- ------- ----- --------- ---------    ----------

     - ADDITION TO EXISTING OLIVE BRANCH DISTRIBUTION BUILDING
     - 6 MONTH DEVELOPMENT TIMEFRAME
     - 9.25% RATE FOR CAPITALIZED INTEREST FUND

     BOND ISSUANCE WILL BE: $8,898,599
-- ------- ------- ------- ------- ----- --------- ---------    ----------
SUMMARY SQUARE FOOTAGE                                260,640 S.F.

-- ------- ------- ------- ------- ----- --------- ---------    ----------
<TABLE>
<CAPTION>

                                                       % OF
HARD COSTS:                                PER S.F.    TOTAL       TOTAL
                                           --------   ------     ----------
<S>                                        <C>        <C>        <C>
SHELL BUILDING & SITEWORK -                  27.24     87.1%     7,100,798
GROSS RECEIPTS TAX SAVINGS (est.)            (0.38)    -1.2%      (100,703)
GRADING & STORM DRAINAGE                      0.35      1.1%        82,262
PAYMENT & PERFORMANCE BOND                    0.18      0.6%        45,957
TENANT IMPROVEMENTS -                         0.00      0.0%             0

LAND - INCLUDED IN PRIOR ISSUANCE             0.00      0.0%             0

SOFT COSTS:

ARCHITECTURAL & ENGINEERING -                 0.96      2.8%       247,963
PERMITS & UTILITY FEES -                      0.06      0.2%        22,000
EARNED INTEREST (5.0%)                       (0.28)    -0.8%       (68,482)
EQUITY FINANCING INTEREST (8.0%)              0.00      0.0%           970
PROPERTY TAX -                                0.01      0.0%         2,000
INSURANCE -                                   0.08      0.2%        21,000
LEGAL & ACCOUNTING -                          0.26      0.8%        67,000
DEVELOPER'S OVERHEAD (3%)*                    1.00      2.9%       260,000
TITLE RECORD -                                0.05      0.1%        13,000
APPRAISALS/CONSULTANTS/TOXICS-                0.21      0.6%        54,200
TRAVEL                                        0.15      0.4%        40,000
CONTINGENCY (5% OF HARD COSTS)                1.57      4.0%       368,916
                                         --------- --------     ----------
TOTAL DEPOSIT TO PROJ. CONSTR. FUND          31.29     91.6%     8,154,871
TOTAL UNDERWRITER'S DISCOUNT                  0.43      1.3%       111,250
UNDERWRITER'S & BOND COUNSEL                  0.21      0.8%        55,000
BOND ISSUANCE FEES                            0.18      0.5%        43,000
DEPOSIT TO CAPITALIZED INTEREST FUND          2.05      6.0%       534,478
                                         --------- ---------    ----------
  TOTAL USES                                 34.14    100.0%     8,398,599
-- ------- ------- ------- ------- ----- --------- ---------    ----------
</TABLE>

* Developer's Overhead will be 3% of the final amount of the Series 1999 Bond
after redemption of excess proceeds.

                                      C-2
<PAGE>   27
                                                                     EXHIBIT "C"

                        COST PROJECTION SUPPORT SCHEDULE

<TABLE>
<S>                      <C>               <C>                        <C>
            BREAKDOWN                              ARCH. & ENGINEER

Proposal Amount          7,193,060         Owens Contract             199,953
Less: Site Grading         (92,262)        Will-Hayes                   3,000
                         ---------         Reaves & Sweeney Civil      15,000
Net Total Building Cost  7,100,798         Topo, ALTA, etc.            20,000
                                           Landscape Design                 0
                                           Other                       10,000
                                                                      -------
                                           Total                      247,953

                                                      CONSULTANTS

             SITEWORK                      Construction consultant      6,000
                                           Appraisal                    7,200
Site Grading                92,262         Soils                        3,000
                                           Phase One                        0
                                           Consulting Fees              5,000
                                           Sprinkler consultants        3,000
                                           Construction testing        30,000
                                                                      -------
                                           Total                       54,200
              LEGAL

Tax Attorney                 3,000
Reviewing Bond Attorney     25,000                  BOND ISSUANCE FEES
Lease Counsel               20,000
Construction Contracts       6,000         Financial Advisor            7,000
Arch & Eng Contract          3,000         Validation                     500
Accounting & Tax Prep       10,000         Trustee & Counsel Fees       9,000
W-S Lease & Bond Counsel         0         POS/Official Statement       5,500
                         ---------         Issuer's Fee                15,000
Total                       67,000         Miscellaneous Fees           6,000
                                                                      -------
Underwriter's Counsel       21,000         Total                       43,000
Bond Counsel                34,000
</TABLE>

                                      C-3
<PAGE>   28
WILLIAMS-SONOMA              CASH FLOW PROJECTIONS

CONSTRUCTION AND LEASEUP INTEREST CARRY -

<TABLE>
<CAPTION>
                                                                        MONTH
                                  --------------------------------------------------------------------------------------
                                     1        2          3           4           5           6          7         8
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------
SOURCES OF FUNDS:                 Jul-99    Aug-99     Sep-99     Oct-99      Nov-99      Dec-99    Jan-2000   Feb-2000    TOTALS
-----------------                 ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------
<S>                               <C>      <C>       <C>         <C>         <C>         <C>        <C>        <C>        <C>
MEMBER LOAN TO LLC                29,100    57,294    (115,391)                                                                   0

CUMULATIVE LLC FUNDING            29,100   116,384           0           0           0           0          0          0          0
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------
BOND FINANCING                         0         0   6,598,589           0           0           0          0          0
CUMULATIVE BOND FUNDING                0         0   6,598,589           0           0           0          0          0  6,598,589
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------
TOTAL SOURCES OF FUNDS            29,100    57,294   6,732,205           0           0           0          0          0  6,598,589
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------

USES OF FUNDS:

SHELL BUILDING & SITEWORK -                          2,130,238   1,426,150   1,420,180   1,420,188    710,080             7,000,798
GROSS RECEIPTS TAX SAVINGS (est.)                                                                    (100,703)            ( 100,703)
GRADING & STORM DRAINAGE                                92,282                                                               92,282
PAYMENT & PERFORMANCE BOND                              45,957                                                               45,957
TENANT IMPROVEMENTS -                                                                                                             0

LAND - INCLUDED IN PRIOR ISSUANCE                                                                                                 0

SOFT COSTS:

ARCHITECTURAL & ENGINEERING -                                      123,977     123,977                                      247,853
PERMITS & UTILITY FEES -                    22,000                                                                           22,000
EARNED INTEREST (50%)                                  (26,655)    (19,650)    (13,090)     (5,752)    (3,099)              (68,482)
EQUITY FINANCING INTEREST (8.0%)               194         776                                                                  970
PROPERTY TAX -                               2,000                                                                            2,000
INSURANCE -                                 21,000                                                                           21,000
LEGAL & ACCOUNTING -              13,400    13,400      13,400      13,400      13,400                                       67,000
DEVELOPER'S OVERHEAD (3%)                                                                  250,000                          250,000
TITLE RECORD -                              13,000                                                                           13,000
APPRAISAL/CONSULTANTS/TOXICS -     9,033     9,033       9,033       9,033       9,033       9,033                           54,200
TRAVEL -                           6,667     6,667       6,667       6,667       6,667       6,667                           40,000
CONTINGENCY (5% OF HARD COSTS)         0         0     113,423      71,008      71,008      30,469                          358,916
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------
TOTAL MONTHLY DRAWS FROM PROJ
CON. FUND                         29,100    37,294   2,365,103   1,524,358   1,631,154   1,761,118    836,747          0  8,154,871
TOTAL UNDERWRITER'S DISCOUNT                           111,250                                                              111,250
PURCHASER'S & BOND COUNSEL                              55,000                                                               55,000
BOND ISSUANCE FEES                                      43,000                                                               43,000
DEPOSIT TO CAPITALIZED
INTEREST FUND                                          534,478                                                              534,478
                                  ------   -------   ---------   ---------   ---------   ---------  ---------  ---------  ---------
TOTAL USES                        29,100    37,294   3,128,830   1,624,358   1,631,154   1,761,116    636,747          0  8,898,699
CUMULATIVE BALANCE                29,100   116,394   2,501,487   4,125,854   5,757,008   7,310,124  8,154,871  8,154,871
PER S.F. UNIT COST                  0.11      0.45        9.00       16.83       22.09       28.84      31.29      31.29
BOND INTEREST (9.75%)                                   50,302      68,593      68,593      68,593     68,593     68,593    393,269
FINANCING INTEREST ON
LOAN (8.0%)                          194       776                                                                              970
</TABLE>

                                      C-4

<PAGE>   29

                                   EXHIBIT "D"

                             Addition Rent Schedule

                                  See Attached

<PAGE>   30

                                   EXHIBIT "D"

<TABLE>
<CAPTION>
                                                                                                GLOBAL
    LEASE                                                      BASIC          COMPANY           BASIC
    QRTS     DATE         INTEREST          SINK FUND          RENT           PAYMENT           RENT
---------------------------------------------------------------------------------------------------------
<S>        <C>            <C>               <C>              <C>              <C>               <C>
       0   01/01/00       $274,417                 $0        $274,417         $11,125           $285,542
       1   04/01/00       $205,813                 $0        $205,813         $11,125           $216,938
       2   07/01/00       $205,813            $65,000        $270,813         $11,125           $281,938
       3   10/01/00       $204,309                 $0        $204,309         $11,125           $215,434
       4   01/01/01       $204,309            $70,000        $274,309         $11,125           $285,434
       5   04/01/01       $202,691                 $0        $202,691         $11,125           $213,816
       6   07/01/01       $202,691            $70,000        $272,691         $11,125           $283,816
       7   10/01/01       $201,072                 $0        $201,072         $11,125           $212,197
       8   01/01/02       $201,072            $75,000        $276,072         $11,125           $287,197
       9   04/01/02       $199,338                 $0        $199,338         $11,125           $210,463
      10   07/01/02       $199,338            $75,000        $274,338         $11,125           $285,463
      11   10/01/02       $197,603                 $0        $197,603         $11,125           $208,728
      12   01/01/03       $197,603            $85,000        $282,603         $11,125           $293,728
      13   04/01/03       $195,638                 $0        $195,638         $11,125           $206,763
      14   07/01/03       $195,638            $85,000        $280,638         $11,125           $291,763
      15   10/01/03       $193,672                 $0        $193,672         $11,125           $204,797
      16   01/01/04       $193,672            $90,000        $283,672         $11,125           $294,797
      17   04/01/04       $191,591                 $0        $191,591         $11,125           $202,716
      18   07/01/04       $191,591            $95,000        $286,591         $11,125           $297,716
      19   10/01/04       $189,394                 $0        $189,394         $11,125           $200,519
      20   01/01/05       $189,394           $100,000        $289,394         $11,125           $300,519
      21   04/01/05       $187,081                 $0        $187,081         $11,125           $198,206
      22   07/01/05       $187,081           $105,000        $292,081         $11,125           $303,206
      23   10/01/05       $184,653                 $0        $184,653         $11,125           $195,778
      24   01/01/06       $184,653           $105,000        $289,653         $11,125           $300,778
      25   04/01/06       $182,225                 $0        $182,225         $11,125           $193,350
      26   07/01/06       $182,225           $110,000        $292,225         $11,125           $303,350
      27   10/01/06       $179,681                 $0        $179,681         $11,125           $190,806
      28   01/01/07       $179,681           $120,000        $299,681         $11,125           $310,806
      29   04/01/07       $176,906                 $0        $176,906         $11,125           $188,031
      30   07/01/07       $176,906           $125,000        $301,906         $11,125           $313,031
      31   10/01/07       $174,016                 $0        $174,016         $11,125           $185,141
      32   01/01/08       $174,016           $130,000        $304,016         $11,125           $315,141
      33   04/01/08       $171,009                 $0        $171,009         $11,125           $182,134
      34   07/01/08       $171,009           $135,000        $306,009         $11,125           $317,134
      35   10/01/08       $167,888                 $0        $167,888         $11,125           $179,013
      36   01/01/09       $167,888           $140,000        $307,888         $11,125           $319,013
</TABLE>

<PAGE>   31

                                   EXHIBIT "D"

<TABLE>
<CAPTION>
                                                                                                GLOBAL
    LEASE                                                      BASIC          COMPANY           BASIC
    QRTS     DATE         INTEREST          SINK FUND          RENT           PAYMENT           RENT
---------------------------------------------------------------------------------------------------------
<S>        <C>            <C>               <C>              <C>              <C>               <C>
      37   04/01/09       $164,650                 $0        $164,650         $11,125           $175,775
      38   07/01/09       $164,650           $145,000        $309,650         $11,125           $320,775
      39   10/01/09       $161,297                 $0        $161,297         $11,125           $172,422
      40   01/01/10       $161,297           $155,000        $316,297         $11,125           $327,422
      41   04/01/10       $157,713                 $0        $157,713         $11,125           $168,838
      42   07/01/10       $157,713           $160,000        $317,713         $11,125           $328,838
      43   10/01/10       $154,013                 $0        $154,013         $11,125           $165,138
      44   01/01/11       $154,013           $170,000        $324,013         $11,125           $335,138
      45   04/01/11       $150,081                 $0        $150,081         $11,125           $161,206
      46   07/01/11       $150,081           $180,000        $330,081         $11,125           $341,206
      47   10/01/11       $145,919                 $0        $145,919         $11,125           $157,044
      48   01/01/12       $145,919           $180,000        $325,919         $11,125           $337,044
      49   04/01/12       $141,756                 $0        $141,756         $11,125           $152,881
      50   07/01/12       $141,756           $190,000        $331,756         $11,125           $342,881
      51   10/01/12       $137,363                 $0        $137,363         $11,125           $148,488
      52   01/01/13       $137,363           $205,000        $342,363         $11,125           $353,488
      53   04/01/13       $132,622                 $0        $132,622         $11,125           $143,747
      54   07/01/13       $132,622           $210,000        $342,622         $11,125           $353,747
      55   10/01/13       $127,766                 $0        $127,766         $11,125           $138,891
      56   01/01/14       $127,766           $220,000        $347,766         $11,125           $358,891
      57   04/01/14       $122,678                 $0        $122,678         $11,125           $133,803
      58   07/01/14       $122,678           $230,000        $352,678         $11,125           $363,803
      59   10/01/14       $117,359                 $0        $117,359         $11,125           $128,484
      60   01/01/15       $117,359           $240,000        $357,359         $11,125           $368,484
      61   04/01/15       $111,809                 $0        $111,809         $11,125           $122,934
      62   07/01/15       $111,809           $250,000        $361,809         $11,125           $372,934
      63   10/01/15       $106,028                 $0        $106,028         $11,125           $117,153
      64   01/01/16       $106,028           $270,000        $376,028         $11,125           $387,153
      65   04/01/16        $99,784                 $0         $99,784         $11,125           $110,909
      66   07/01/16        $99,784           $280,000        $379,784         $11,125           $390,909
      67   10/01/16        $93,309                 $0         $93,309         $11,125           $104,434
      68   01/01/17        $93,309           $285,000        $378,309         $11,125           $389,434
      69   04/01/17        $86,719                 $0         $86,719         $11,125            $97,844
      70   07/01/17        $86,719           $305,000        $391,719         $11,125           $402,844
      71   10/01/17        $79,666                 $0         $79,666         $11,125            $90,791
      72   01/01/18        $79,666           $315,000        $394,666         $11,125           $405,791
      73   04/01/18        $72,381                 $0         $72,381         $11,125            $83,506
</TABLE>

<PAGE>   32

                                   EXHIBIT "D"

<TABLE>
<CAPTION>
                                                                                                GLOBAL
    LEASE                                                      BASIC          COMPANY           BASIC
    QRTS     DATE         INTEREST          SINK FUND          RENT           PAYMENT           RENT
---------------------------------------------------------------------------------------------------------
<S>        <C>         <C>                 <C>            <C>                <C>             <C>
      74   07/01/18        $72,381           $335,000        $407,381         $11,125           $418,506
      75   10/01/18        $64,634                 $0         $64,634         $11,125            $75,759
      76   01/01/19        $64,634           $345,000        $409,634         $11,125           $420,759
      77   04/01/19        $56,656                 $0         $56,656         $11,125            $67,781
      78   07/01/19        $56,656           $365,000        $421,656         $11,125           $432,781
      79   10/01/19        $48,216                 $0         $48,216         $11,125            $59,341
      80   01/01/20        $48,216           $380,000        $428,216         $11,125           $439,341
      81   04/01/20        $39,428                 $0         $39,428         $11,125            $50,553
      82   07/01/20        $39,428           $400,000        $439,428         $11,125           $450,553
      83   10/01/20        $30,178                 $0         $30,178         $11,125            $41,303
      84   01/01/21        $30,178           $415,000        $445,178         $11,125           $456,303
      85   04/01/21        $20,581                 $0         $20,581         $11,125            $31,706
      86   07/01/21        $20,581           $435,000        $455,581         $11,125           $466,706
      87   10/01/21        $10,522                 $0         $10,522         $11,125            $21,647
      88   01/01/22        $10,522           $455,000        $465,522              $0           $465,522

                       $12,349,829         $8,900,000     $21,249,829        $979,000        $22,228,829
</TABLE><PAGE>   1
                                                                 EXHIBIT 10.10P

                 FIFTH AMENDMENT TO SYNDICATED CREDIT AGREEMENT

     THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
February 7, 2000, is entered into by and among WILLIAMS-SONOMA, INC. (the
"Company"), BANK OF AMERICA, N.A. (formerly known as Bank of America National
Trust and Savings Association), as agent for itself and the Banks (the
"Agent"), and the several financial institutions party to the Credit Agreement
(collectively, the "Banks").

                                    RECITALS

     A. The Company, Banks, and Agent are parties to a Credit Agreement dated
as of June 1, 1997 (as previously amended, the "Credit Agreement") pursuant to
which the Agent and the Banks have extended certain credit facilities to the
Company.

     B. The L/C Agreement (as defined in the Credit Agreement) is being amended
to add a facility for up to $75,000,000 in cash advances by BofA to the Company.

     C. The Banks are willing to amend the Credit Agreement, subject to the
terms and conditions of this Amendment.

     NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:

     1.   Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.

     2.   Amendments to Credit Agreement.

          (a)  Section 7.05(i) is hereby amended and restated as follows:

                    (i) Additional indebtedness to BofA (or another replacement
          lender) in principal amount not to exceed $75,000,000) outstanding at
          any one time;

          (b)  All references to the L/C Agreement in the Credit Agreement
shall be deemed to refer to the L/C Agreement as amended as described in
Recital B above. In particular, the pro rata sharing provisions in paragraph
2.15(d) shall be deemed to apply to all credit outstanding under the L/C
Agreement, as amended.

     3.   Representations and Warranties. The Company hereby represents and
warrants to the Agent and the Banks as follows:

          (a)  No Default or Event of Default has occurred and is continuing.

          (b)  The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any Person (including Governmental Authority) in order
to be effective and enforceable. The Credit Agreement as amended by this
Amendment constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its respective terms, without defense,
counterclaim or offset.

                                       1
<PAGE>   2
          (c)  All representations and warranties of the Company contained in
the Credit Agreement are true and correct.

          (d)  The Company is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Agent and
the Banks or any other Person.

     4.   Miscellaneous.

          (a)  Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and
effect and all references therein to such Credit Agreement shall henceforth
refer to the Credit Agreement as amended by this Amendment. This Amendment
shall be deemed incorporated into, and a part of, the Credit Agreement.

          (b)  This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.

          (c)  This Amendment shall be governed by and construed in accordance
with the law of the State of California.

     (d)  This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one document (and any other document required herein) may be
delivered by any party thereto to be followed promptly by mailing of a hard
copy original, and that receipt by the Agent of a facsimile transmitted
document purportedly bearing the signature of a Bank or the Company shall bind
such Bank or the Company, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Agent to receive the hard
copy executed original of such document shall not diminish the binding effect
of receipt of the facsimile transmitted executed original of such document of
the party whose hard copy page was not received by the Agent.

          (e)  This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.

          (f)  If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.

          (g)  The Company covenants to pay to or reimburse the Agent, upon
demand, for all costs and expenses (including allocated costs of in-house
counsel) incurred in connection with the development, preparation, negotiation,
execution and delivery of this Agreement.

                                       2
<PAGE>   3
     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.

     BANK OF AMERICA, N.A., as Agent              WILLIAMS-SONOMA, INC.

     By /s/ PATRICK W. ZETZMAN                    By /s/ JOHN W. TATE
        -----------------------------                --------------------------
            PATRICK W. ZETZMAN                           JOHN W. TATE
     Title    Vice President                         Chief Financial Officer
            -------------------------

     BANK OF AMERICA, N.A., as a Bank             THE BANK OF NEW YORK

     By /s/ GINGER TRIMBLE                        By
        -----------------------------                 -------------------------
            GINGER TRIMBLE
     Title  Vice President                        Title
           --------------------------                   ----------------------

                                       3
<PAGE>   4
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.

     BANK OF AMERICA NATIONAL TRUST
     AND SAVINGS ASSOCIATION, as Agent
                                             WILLIAMS-SONOMA, INC.
     By
       --------------------------------      By
     Title                                     --------------------------------
           ----------------------------      Title
                                                  -----------------------------
                                             By
                                               --------------------------------
                                             Title
                                                  -----------------------------
     BANK OF AMERICA, N.A.; as a Bank
                                             THE BANK OF NEW YORK
     By
       --------------------------------      By  /s/ CHARLOTTE SOHN FUIKS
     Title                                     --------------------------------
                                                     CHARLOTTE SOHN FUIKS
           ----------------------------      Title V.P.
                                                  -----------------------------
<PAGE>   5
                            GUARANTOR ACKNOWLEDGMENT
                                  AND CONSENT

     The undersigned, each a guarantor with respect to the Company's obligations
under the Credit Agreement, each hereby (i) acknowledge and consent to the
execution, delivery and performance by the Company of the foregoing Fifth
Amendment to Syndicated Credit Agreement, and (ii) reaffirm and agree that the
guaranty to which the undersigned is party is in full force and effect, and
guaranties all of the obligations of the Company under the Agreement, as
amended.

     Dated as of February 7, 2000       WILLIAMS-SONOMA STORES, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        HOLD EVERYTHING, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        CHAMBERS CATALOG
                                        COMPANY, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        POTTERY BARN, INC., formerly known
                                        as POTTERY BARN EAST, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        WILLIAMS-SONOMA STORES, LLC

                                        By Williams-Sonoma, Inc., its sole
                                        member

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                       4
<PAGE>   6
                                        POTTERY BARN KIDS, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        WILLIAMS-SONOMA DIRECT, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                        WILLIAMS-SONOMA RETAIL
                                        SERVICES, INC.

                                        By /s/ JOHN W. TATE
                                          -------------------------------------
                                          John W. Tate
                                          Chief Financial Officer

                                       5

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