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                                                                    EXHIBIT 10.1

                                                               EXECUTION VERSION

                            STOCK PURCHASE AGREEMENT

            This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 28th day of July 2004 (the "Transfer Date"), but is effective as of
12:01 a.m. Hong Kong time on July 1, 2004 (the "Effective Date"), by and among
APPLICA INCORPORATED ("AI"), a company organized and existing under the laws of
the State of Florida, REMDALE INVESTMENTS LIMITED, a company organized and
existing under the laws of the British Virgin Islands, and PPC INDUSTRIES
LIMITED, a company organized and existing under the laws of the British Virgin
Islands (each a "Seller", and collectively, the "Sellers") and CENTRAL GOLD
WORLDWIDE LIMITED, a company organized and existing under the laws of the
British Virgin Islands (the "Buyer"). The Sellers and the Buyer are collectively
referred to herein as the "Parties", and each individually as a "Party".

                                    RECITALS

            The Sellers collectively own all of the issued and outstanding
shares of capital stock (the "Stock") of Applica Durable Manufacturing Limited
(the "Existing Name"), a company organized and existing under the laws of Hong
Kong (the "Corporation"). Schedule A hereto sets forth the respective ownership
of the Stock of each Seller.

            Contemporaneously herewith, certain of the affiliates of the Sellers
are entering into a supply agreement (the "Supply Agreement") relating to the
manufacture and supply by the Buyer's affiliate to certain affiliates of the
Sellers of certain products for an initial term ending December 31, 2015 upon
the terms and conditions thereof.

            The Parties desire that the Buyer acquire the Stock and the Sellers
desire to sell the Stock on the terms and conditions hereinafter set forth.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto,
intending to be legally bound, mutually agree as follows:

            1. SALE AND PURCHASE OF THE STOCK.

                  The Sellers, jointly and severally, hereby sell, convey,
transfer, and assign, upon the terms and conditions hereinafter set forth, to
the Buyer, free and clear of all liens, pledges, claims, and encumbrances of
every kind, nature and description (an "Encumbrance"), and the Buyer hereby
purchases and accepts from the Sellers, the Stock. The Sellers shall sell the
Stock accompanied by stock powers or other appropriate bills of sale, duly
endorsed or executed by the respective Seller.

            2. PURCHASE PRICE.

                  As consideration for the Stock, the Buyer hereby agrees to pay
to the Sellers the adjusted book value of the Corporation as of the Effective
Date as set forth on Schedule B, which is derived from the books and records
normally maintained by the Corporation (the "Purchase Price"). The Purchase
Price shall be payable as follows:

                  (a) The inter-company receivables due to the Corporation (the
"Receivables") from the Sellers and any of their affiliates as of the Transfer
Date shall be credited against the Purchase Price (it being understood that (i)
such Receivables shall be assigned on the Transfer Date

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by the Corporation to the Sellers and (ii) any transaction after the Effective
Date shall be for the account of the Buyer (except to the extent set forth in
Section 7(e));

                  (b) USD 5,000,000 or the remainder of the Purchase Price
(whichever is less) in cash within ten (10) business days of the Transfer Date;
and

                  (c) If applicable, the Purchase Price minus the sum of clauses
(a) and (b) of this Section 2 (the "Balance") in the following manner: USD
2,000,000 of the Balance on February 1, 2005 and the remainder of the Balance on
July 1, 2005; provided, however, that to the extent the Balance is less than USD
0, the Sellers shall refund the Balance to the Buyer on February 1, 2005.

      The Buyer shall have the right to review the calculation of the amount of
the Receivables. If the Buyer objects to the same, it shall notify the Sellers
no later than fifteen (15) days after the Transfer Date of its objections
together with the basis for its objections in reasonable detail. The Parties
shall thereafter negotiate in good faith to reach agreement. If the Parties are
unable to reach agreement, they shall employ the Dispute Resolution procedures
set forth in the Supply Agreement.

            3. SELLERS' REPRESENTATIONS AND WARRANTIES.

                  To induce the Buyer to enter into this Agreement, and for the
benefit of the Buyer, the Sellers, jointly and severally, represent and warrant,
on behalf of themselves and the Corporation as follows:

                  (a) CORPORATE EXISTENCE AND QUALIFICATION.

                  The Corporation and each Seller is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation; and each has the requisite corporate power to own, operate,
manage, lease and hold its assets and properties and to carry on its business as
and where such assets and properties are presently located and such business is
presently conducted.

                  (b) CAPITALIZATION AND OWNERSHIP OF STOCK.

                  The authorized and issued capital of the Corporation
immediately prior to and as of the Transfer Date is as set forth on Schedule A,
all of which have been validly issued, fully paid, and non-assessable and are
owned by the Sellers as set forth on such schedule. The Sellers collectively
have good and unencumbered title to the Stock and there are no restrictions on
any of their rights to transfer the Stock to the Buyer pursuant to this
Agreement. Other than this Agreement, there are no outstanding options,
warrants, or other rights to purchase or subscribe for, or contracts or
commitments to issue, or any interests, instruments, evidences of indebtedness,
or other securities convertible in any manner into, the shares of the
Corporation's Stock.

                  (c) TITLE TO PROPERTIES AND ASSETS.

                  The Corporation has good and marketable title to all of its
real and personal assets and properties reflected in its June 30, 2004 balance
sheet (except for those assets and properties disposed of subsequent to that
date in the ordinary course of business). Such assets and properties are not
subject to any Encumbrance, except for Encumbrances for the payment of
governmental or other taxes and other Encumbrances incidental to the conduct of
the Corporation's business or the ownership of its assets or properties, which
do not in the aggregate materially detract from the value of the Corporation's
assets and properties taken as a whole or materially impair the use thereof in
the operation of its business.

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All leases pursuant to which the Corporation leases any substantial portion of
real or personal property are valid and in effect as of the date hereof in
accordance with their respective terms.

                  (d) AUTHORITY, APPROVAL AND ENFORCEABILITY.

                  This Agreement has been duly executed and delivered by each of
the Sellers, and each of them has all requisite corporate power and legal
capacity to execute and deliver this Agreement, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by all appropriate
corporate action of the Sellers. This Agreement constitutes, or upon execution
and delivery will constitute, the legal, valid and binding obligation of each
Seller, enforceable against each Seller in accordance with its terms, except as
such enforceability may be limited by general equitable principles or by
applicable bankruptcy, insolvency, moratorium, or similar laws and judicial
decisions from time to time in effect which affect creditors' rights and
remedies generally.

                  (e) AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS.

                  Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will violate or conflict
with any of the terms, conditions or provisions of the Corporation's or any
Seller's charter documents; violate any material law applicable to the
Corporation or any Seller; violate, conflict with, result in a breach of,
constitute a default under (whether with or without notice or the lapse of time
or both), or accelerate or permit the acceleration of the performance required
by, or give any other Party the right to terminate, any agreement or contract
binding upon or applicable to the Corporation or any Seller; except such
violation, conflict or breach as would not result in a material adverse effect
to the Corporation or any Seller; or result in the creation of any Encumbrance
on any property of the Corporation or any Seller, except any such Encumbrance as
would not result in a material adverse effect to the Corporation or any Seller.

                  (f) LEGAL ACTION.

                  There are no unsatisfied judgments, injunctions, stipulations,
orders or decrees against the Corporation or any Seller nor are there any
litigation, arbitration or other proceedings or investigations, by any person or
entity, pending or, to the Corporation or any Seller's knowledge, threatened
against the Corporation or any Seller which relate to the Agreement and the
transactions contemplated hereby, or which, if determined adversely to the
Corporation or any Seller, would have a material adverse effect on the Agreement
and the transactions contemplated hereby.

                  (g) NO MATERIAL ADVERSE CHANGE.

                  There has been no material adverse change in the assets,
liabilities and results of operations of the Corporation since the Effective
Date.

            Except for the foregoing representations and warranties, the Stock
is hereby conveyed "as is, where is" without any representation or warranty of
any kind.

            4. BUYER'S REPRESENTATIONS AND WARRANTIES.

            To induce the Sellers to enter into this Agreement, and for the
benefit of the Sellers, the Buyer hereby represents and warrants as follows:

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                  (a) CORPORATE EXISTENCE AND QUALIFICATION.

                  The Buyer is a corporation duly organized and validly existing
under the laws of the British Virgin Islands; and the Buyer has the requisite
corporate power to own, operate, manage, lease and hold its assets and
properties and to carry on its business as and where such assets and properties
are presently located and such business is presently conducted.

                  (b) AUTHORITY, APPROVAL AND ENFORCEABILITY.

                  This Agreement has been duly executed and delivered by the
Buyer, and the Buyer has all requisite corporate power and legal capacity to
execute and deliver this Agreement, to consummate the transactions contemplated
hereby, and to perform its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by all appropriate corporate
action of the Buyer. This Agreement constitutes, or upon execution and delivery
will constitute, the legal, valid and binding obligation of the Buyer,
enforceable against the Buyer in accordance with its terms, except as such
enforceability may be limited by general equitable principles or by applicable
bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from
time to time in effect which affect creditors' rights and remedies generally.

                  (c) AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS.

                  Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will violate or conflict
with any of the terms, conditions or provisions of the Buyer's charter
documents; violate any material law applicable to the Buyer or its affiliates,
including, but not limited to the laws of the State Administration of Foreign
Exchange of the People's Republic of China and; violate, conflict with, result
in a breach of, constitute a default under (whether with or without notice or
the lapse of time or both), or accelerate or permit the acceleration of the
performance required by, or give any other Party the right to terminate, any
agreement or contract binding upon or applicable to the Buyer; except such
violation, conflict or breach as would not result in a material adverse effect
to the Buyer; or result in the creation of any Encumbrance on any property of
the Buyer, except any such Encumbrance as would not result in a material adverse
effect to the Buyer.

                  (d) ABILITY TO BEAR RISK; BUSINESS KNOWLEDGE AND EXPERIENCE.

                  The Buyer (i) can bear the economic risk of the purchase of
the Stock, including the complete loss of the Buyer's investment, and (ii) has
sufficient knowledge and experience in business and financial matters as to be
capable of evaluating the merits and risks of the purchase of the Stock.

                  (e) ABSENCE OF REPRESENTATIONS AND WARRANTIES.

                  The Buyer confirms that none of the Corporation, any Seller or
anyone purportedly acting on behalf of the Corporation or any Seller has made
any representations, warranties, agreements, or statements other than those
contained herein respecting the business, affairs, financial condition, plans,
or prospects of the Corporation nor has the Buyer relied on any representations,
warranties, agreements, or statements in the belief that they were made on
behalf of any of the foregoing nor has the Buyer relied on the absence of any
such representations, warranties, agreements, or statements in reaching the
Buyer's decision to purchase the Stock.

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                  (f) LEGAL ACTION.

                  There are no unsatisfied judgments, injunctions, stipulations,
orders or decrees against the Buyer nor are there any litigation, arbitration or
other proceedings or investigations, by any person or entity, pending or, to the
Buyer's knowledge, threatened against the Buyer which relate to the Agreement
and the transactions contemplated hereby, or which, if determined adversely to
the Buyer, would have a material adverse effect on the Agreement and the
transactions contemplated hereby.

            5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

                  The representations and warranties of the Parties in this
Agreement shall terminate at the close of business on the date that is one (1)
year from the Effective Date.

            6. OTHER AGREEMENTS.

                  (a) DIVIDENDS.

                  The Sellers shall have caused all of the estimated retained
earnings of the Corporation as of the day before the Effective Date to be
distributed to the applicable shareholders.

                  (b) AAL SAN PO KONG FACILITY.

                  The Parties shall have entered into a lease and/or other
relevant agreement with respect to the Sellers or any of their respective
affiliates' right to remain at such portion of the facility located at 1/F,
Efficiency House, 35 Tai Yau Street, San Po Kong, Kowloon, Hong Kong (the "AAL
San Po Kong Facility") currently occupied by the employees of Applica Asia
Limited until December 31, 2005 at no cost.

                  (c) EMPLOYEES.

                  After the Transfer Date, the Sellers shall have no continuing
obligation with respect to any employees of the Corporation; provided, however,
that Mr. Lai Kin, Mr. Lam King Loi and Ms. Eliza Lai shall terminate their
employment with the Corporation as of the Transfer Date and the Sellers shall be
responsible for any continuing obligations, if any, to such persons.

                  (d) CREDIT FACILITIES.

                  As of the Transfer Date, the Sellers and their affiliates
shall be released from any and all obligations arising in connection with any
credit facilities of the Corporation and shall have received written
confirmation to such effect.

                  (e) NAME CHANGE.

                  As of the Transfer Date, the Buyer shall have changed the
Existing Name of the Corporation to a new name which shall make no reference to
"Applica."

                  (f) DELIVERABLES.

                  Each Party hereto shall have delivered a closing certificate,
duly executed by an authorized officer, in form and substance reasonably
satisfactory to the other Parties hereto certifying, among other things, as to
its corporate authority and board approval to enter into the transactions
contemplated hereby. The Buyer shall also have delivered original certificates
of insurance or true

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copies of insurance policies as required pursuant to Section 11 of the Supply
Agreement. The Parties hereto shall have executed and delivered a Transition
Services Agreement in the form of Exhibit C attached hereto; the Corporation and
the Sellers shall have entered into an Assignment Agreement with respect to the
Receivables in the form of Exhibit D attached hereto; the Parties shall have
executed and delivered the Bought and Sold Notes and Instruments of Transfer in
the forms attached hereto as Exhibit E and the Buyer shall have paid the
applicable stamp duties.

            7. POST-CLOSING AGREEMENTS.

                  (a) EXCLUDED ASSETS.

                  The Parties acknowledge and agree that (i) certain tooling
currently owned by the Corporation with a book value of approximately USD
3,000,000, as listed on Exhibit A-1 attached hereto (the "Durable Excluded
Assets") and (ii) all physical assets located at the AAL San Po Kong Facility,
as listed on Exhibit A-2 (the "AAL Excluded Assets", together with the Durable
Excluded Assets, the "Excluded Assets") shall not constitute a part of the
transactions contemplated hereby and all rights, title and interest to such
Excluded Assets shall remain with the Sellers.

                  (b) TRANSFER OF DIE CASTING ASSETS.

                  Within one hundred twenty (120) days of the Transfer Date, the
Sellers agree to cause their affiliate, Applica Manufacturing S. de R.L. de C.V,
to transfer to the Buyer, at the Buyer's expense, the die casting equipment
listed on Exhibit B hereto (the "Die Casting Assets") and the Buyer shall
install, configure and ensure the good working order of such assets upon the
transfer.

                  (c) PUBLICITY.

                  None of the Parties hereto shall issue or make, or cause to
have issued or made, any public release or announcement concerning this
Agreement or the transactions contemplated hereby, without the advance approval
in writing of the form and substance thereof by each of the other Parties
hereto, except as required by law, and the Parties shall endeavor jointly to
agree on the text of any announcement or circular so approved or required.

                  (d) PRESERVATION OF AND ACCESS TO CERTAIN INFORMATION;
COOPERATION.

                        (i) On and after the Transfer Date, the Buyer shall
      preserve all books and records of the Corporation for a period of seven
      (7) years commencing on the Transfer Date, and thereafter, shall not
      destroy or dispose of such records without giving notice to the Sellers of
      such pending disposal and offering the Sellers such records. In the event
      that the Sellers have not requested such materials within ninety (90) days
      following the receipt of notice from the Buyer, the Buyer may proceed to
      destroy or dispose of any books and records of the Corporation on or after
      the tenth anniversary of the Transfer Date.

                        (ii) From and after the Transfer Date, the Buyer shall
      (a) afford the Sellers and their representatives reasonable access upon
      reasonable prior notice during normal business hours, to all employees,
      officers, properties, agreements, records, books and affairs of the Buyer
      relating to the Corporation, including, without limitation, the
      Engineering Documentation Library, and provide copies of such information
      concerning the Corporation as the Sellers may reasonably request in
      connection with the preparation of any tax returns, any judicial,
      quasi-judicial, administrative, tax, audit or arbitration proceeding, the
      preparation of any financial statements or reports required in accordance
      with applicable laws and in connection

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      with the defense of any Third Party Claims and (b) cooperate fully with
      the Sellers for any proper purpose.

                  (e) ADEL RECEIVABLES.

                  All receivables due to Applica Durable Electric Limited from
third party customers (the "ADEL Receivables") arising from and after the
Effective Date through the Transfer Date shall be for the account of the
Sellers. The payments in respect of such receivables shall be transferred to the
Sellers within fifteen (15) days of such request from the Sellers; provided,
however, that (i) the invoice issued by the Corporation for the products
purchased by Applica Durable Electric Limited for shipment to third party
customers related to such ADEL Receivables is paid in full, and (ii) the Buyer
shall have the right to review the calculation of the amount of the ADEL
Receivables and the payments in respect thereof. If the Buyer objects to the
same, it shall notify the Sellers no later than fifteen (15) days after the
Sellers' request for payment together with the basis for its objections in
reasonable detail. The Parties shall thereafter negotiate in good faith to reach
agreement. If the Parties are unable to reach agreement, they shall employ the
Dispute Resolution procedures set forth in the Supply Agreement.

                  (f) BALANCE SHEET DISPUTES.

                  In the event that during the period commencing on the Transfer
Date and ending two (2) years thereafter, the Parties have any dispute regarding
the Corporation's June 30, 2004 balance sheet or any other matters directly
related to such balance sheet, which is not subject to indemnification pursuant
to Section 8 of this Agreement, the Parties shall negotiate in good faith to
reach an agreement with respect to such dispute. The failure to resolve any such
dispute shall not result in any liability on the part of the Sellers to the
Buyer or to any third party under this Section 7(f).

                  (g) FURTHER ASSURANCES.

                  The Parties shall execute and deliver all such other
instruments and documents and take all such other actions as any Party may
reasonably request from time to time in order to effectuate the transactions
contemplated hereby. The Parties shall cooperate with each other and with their
respective counsel and accountants in connection with any of their respective
obligations under this Agreement.

            8. INDEMNIFICATION.

                  (a) INDEMNIFICATION BY THE SELLERS.

                  For purposes of this Section, a Party making a claim for
indemnity is hereinafter referred to as an "Indemnified Party" and the Party
against whom such claim is asserted is hereinafter referred to as the
"Indemnifying Party." The Sellers shall indemnify the Buyer and its affiliates
against and hold them harmless from any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
any such Indemnified Party to the extent arising from (i) any breach of any
representation or warranty of any Seller contained in this Agreement; (ii) any
breach of any agreement or covenant of any Seller contained in this Agreement
and (iii) any claims relating to products sold by the Corporation prior to the
Transfer Date; provided, however, that no Seller shall have any liability for
any breach if the Buyer had knowledge of such breach as of the date hereof and
for any breach to the extent the liability or obligation was exacerbated as a
result of any action taken or omitted to be taken by the Buyer or any of its
affiliates; provided, further, however, that the Sellers' liability hereunder
shall in no event exceed the Purchase Price.

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                  (b) INDEMNIFICATION BY THE BUYER.

                  The Buyer shall indemnify the Sellers and their affiliates
against and hold them harmless from any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
any such Indemnified Party to the extent arising from (i) any breach of any
representation or warranty of the Buyer contained in this Agreement, (ii) any
breach of any agreement or covenant of the Buyer contained in this Agreement;
and (iii) any liability or obligation arising after the Transfer Date in
connection with any credit facilities of the Corporation or any employee of the
Corporation (except in the case of Mr. Lai Kin, Mr. Lam King Loi and Ms. Eliza
Lai); provided, however, that the Buyer shall not have any liability for any
breach if any of the Sellers had knowledge of such breach as of the date hereof
and for any breach to the extent the liability or obligation was exacerbated as
a result of any action taken or omitted to be taken by any Seller or any of
their affiliates.

                  (c) LIMITATIONS ON LIABILITY.

                  Notwithstanding any provision herein, neither any Seller nor
the Buyer shall in any event be liable to the other Party or its affiliates of
any indemnity obligation set forth in Section 8(a) or 8(b) for any indirect,
consequential, special, incidental or punitive damages (including, but not
limited to, loss profits, loss of use, damage to goodwill or loss of business).

                  (d) LOSSES NET OF INSURANCE.

                  The amount of any loss, liability, claim, damage, or expense
for which indemnification is provided pursuant to this Section shall be net of
any amounts recovered or recoverable by the Indemnified Party under insurance
policies with respect to such loss, liability, claim, damage, or expense
(collectively, a "Loss") and shall be reduced to take account of any net tax
benefit (including as a result of any basis adjustment) actually realized by the
Indemnified Party arising from the incurrence or payment of any such Loss.

                  (e) TERMINATION OF INDEMNIFICATION.

                  The obligations to indemnify and hold harmless a Party hereto
pursuant to this Section shall terminate at the time the applicable
representation or warranty terminates pursuant to Section 5.

                  (f) PROCEDURES.

                  All claims by any Indemnified Party shall be asserted and
resolved in accordance with the following provisions. If any claim or demand for
which an Indemnifying Party would be liable to an Indemnified Party is asserted
against or sought to be collected from such Indemnified Party by a third party
(a "Third Party Claim"), the Indemnified Party shall with reasonable promptness
(but in no event later than ten (10) days after the Third Party Claim is so
asserted or sought against the Indemnified Party) notify in writing the
Indemnifying Party of such Third Party Claim enclosing a copy of all pages
served and stating with reasonable specificity the circumstances of the
Indemnified Party's claim for indemnification; provided, however, that any
failure to give such notice will not waive any rights of the Indemnified Party
except to the extent the rights of the Indemnifying Party are actually
prejudiced. After receipt by the Indemnifying Party of such notice, then upon
reasonable notice from the Indemnifying Party to the Indemnified Party, or upon
the request of the Indemnified Party, the Indemnifying Party shall defend,
manage and conduct any proceedings, negotiations or communications involving any
claimant whose claim is the subject of the Indemnified Party's notice to the
Indemnifying Party as set forth above, and shall take all actions necessary,
including but not limited to the posting of such bond or other security

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as may be required by any governmental authority, so as to enable the Third
Party Claim to be defended against or resolved without expense or other action
by the Indemnified Party. Upon request of the Indemnifying Party, the
Indemnified Party shall, to the extent it may legally do so and to the extent
that it is compensated in advance by the Indemnifying Party for any costs and
expenses thereby incurred: (i) take such action as the Indemnifying Party may
reasonably request in connection with such action, (ii) allow the Indemnifying
Party to dispute such action in the name of the Indemnified Party and conduct a
defense to such action on behalf of the Indemnified Party, and (iii) render to
the Indemnifying Party all such assistance as the Indemnifying Party may
reasonably request in connection with such dispute and defense.

                  (g) INDEMNIFICATION BASKET.

                  Neither Party shall be required to make any indemnification
payment for any Third Party Claim unless the aggregate of all amounts for which
indemnity would be payable by such Party exceeds USD 250,000 (except as relates
to any indemnification referred to in Section 8(a)(iii)) in any indemnification
year beginning on the Transfer Date (the "Basket Amount"), and, in such event,
such Party shall be responsible for only the amount in excess of the Basket
Amount.

            9. BROKERS AND FINDERS.

                  Each of the Parties hereto represents and warrants to the
others that it has not employed or retained any broker or finder in connection
with the transactions contemplated by this Agreement nor has it had any dealings
with any person that may entitle that person to a fee or commission from any
other Party hereto. Each of the Parties indemnifies and holds the others
harmless from and against any claim, demand, or damages whatsoever by virtue of
any arrangement or commitment made by it with or to any person that may entitle
such person to any fee or commission from the other Parties to this Agreement.

            10. GENERAL PROVISIONS.

                  (a) NOTICES.

                  Any notice, request, instruction, correspondence or other
document to be given hereunder by any Party hereto to another (herein
collectively called "Notice") shall be in writing and in the English language
and delivered personally or mailed by certified mail, postage prepaid and return
receipt requested, or by facsimile (with confirmation), or by a reputable
overnight delivery service, as follows:

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                       If to the Buyer, to:

                       CENTRAL GOLD WORLDWIDE LIMITED
                       AMS Trustees Limited
                       P.O. Box 116
                       Road Town, Tortola
                       British Virgin Islands

                       with a copy given in the manner
                       prescribed above to:

                       ELEC-TECH INTERNATIONAL (H.K.) COMPANY LIMITED
                       1501, 15/F, 100 Canton Road
                       TsimShaTsui, Hong Kong
                       Attention: General Manager
                       Phone No.: (0756) 3390868
                       Facsimile No.: (0756) 3390606
                       Phone No.: (852) 2375-1296
                       Facsimile No.: (852) 2375-1385

                       with a copy given in the manner
                       prescribed above to:

                       Holland & Knight LLP
                       701 Brickell Avenue, Suite 3000
                       Miami, Florida 33131
                       Attention: Rodney H. Bell
                       Phone No.: (305) 374-8500
                       Facsimile No.: (305) 789-7799

                       If to the Sellers, to each in care of:

                       APPLICA INCORPORATED
                       5980 Miami Lakes Drive
                       Miami Lakes, Florida 33014
                       Attention: Legal Department
                       Phone No.: (305) 816-7025
                       Facsimile No.: (305) 816-9616

                       with a copy given in the manner
                       prescribed above to:

                       Greenberg Traurig, P.A.
                       1221 Brickell Avenue
                       Miami, Florida 33131
                       Attention: Paul Berkowitz
                       Phone No.: (305) 579-0500
                       Facsimile No.: (305) 579-0717

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            Each of the above addresses for notice purposes may be changed by
providing appropriate notice hereunder. Notice given by personal delivery or
certified mail shall be effective upon actual receipt. Notice given by facsimile
shall be effective upon actual receipt if received during the recipient's normal
business hours, or at the beginning of the recipient's next normal business day
if not received during the recipient's normal business hours. Notice given by
overnight delivery shall be effective on the next business day if the package
containing the notice was timely delivered to the delivery service. All Notices
by facsimile shall be confirmed by the sender thereof promptly after
transmission in writing by registered mail or personal delivery. Anything to the
contrary contained herein notwithstanding, notices to any Party hereto shall not
be deemed effective with respect to such Party until such Notice would, but for
this sentence, be effective both as to such Party and as to all other persons to
whom copies are provided above to be given.

                  (b) BINDING NATURE OF AGREEMENT; ASSIGNMENT.

                  This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective permitted heirs, personal
representatives, successors, and assigns; but neither this Agreement nor any of
the rights, benefits or obligations hereunder shall be assigned, by operation of
law or otherwise, by any Party hereto without the prior written consent of the
other Parties hereto. Nothing in this Agreement, express or implied, is intended
to confer upon any person or entity other than the Parties hereto and their
respective permitted heirs, personal representatives, successors, and assigns,
any rights, benefits or obligations hereunder.

                  (c) ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.

                  This Agreement, together with all exhibits and schedules
attached hereto, and the Supply Agreement constitute the entire agreement among
the Parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties, and there are no warranties, representations or other
agreements among the Parties in connection with the subject matter hereof except
as set forth specifically herein or contemplated hereby. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing and duly approved by each of the Parties hereto.

                  (d) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.

                  The provisions of this Agreement and the documents delivered
pursuant hereto shall be governed by and construed in accordance with the laws
of the State of Florida (excluding any conflict of law rule or principle that
would refer to the laws of another jurisdiction). Each Party hereto irrevocably
submits to the exclusive jurisdiction of the federal and state courts located in
Miami-Dade County, the State of Florida, in any action or proceeding arising out
of or relating to this Agreement, and each Party hereby irrevocably agrees that
all claims in respect of any such action or proceeding must be brought and/or
defended in such courts. Each Party hereto consents to service of process by any
means authorized by the applicable law of the forum in any action brought under
or arising out of this Agreement, and each Party hereto irrevocably waives, to
the fullest extent each may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any of such courts.
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT, ACTION
OR PROCEEDING ARISING HEREUNDER.

                                       11
<PAGE>

                  (e) PROVISIONS SEPARABLE.

                  The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

                  (f) INDULGENCES NOT WAIVERS.

                  Neither the failure nor any delay on the part of any Party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power, or privilege preclude any other or further exercise of the
same or of any other right, remedy, power, or privilege, nor shall any waiver of
any right, remedy, power, or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power, or privilege with respect to
any other occurrence (regardless of whether similar). No waiver shall be
effective unless it is in writing and is signed by the Party asserted to have
granted such waiver.

                  (g) COSTS AND EXPENSES.

                  Each Party hereto shall bear its own costs and expenses,
including legal and accounting fees, incurred in connection with the
negotiation, preparation, execution and closing of this Agreement, and all
transactions contemplated hereby.

                  (h) TITLES NOT TO AFFECT INTERPRETATION.

                  The titles of paragraphs and subparagraphs contained in this
Agreement are for convenience of reference only, and they neither form a part of
this Agreement nor are they to be used in the construction or interpretation
hereof.

                  (i) EXECUTION IN COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any Party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered to the other
Party. A facsimile signature will have the same force and effect as an original
signature.

                  (j) EXCLUSIVE RIGHTS AND REMEDIES.

                  The rights and remedies provided by this Agreement are the
sole and exclusive rights and remedies in the event of any breach of any
representation, warranty, agreement or covenant by any Party hereto and shall
exclude any other rights or remedies to which any Party may be lawfully entitled
(other than claims of or causes of action arising from fraud).

                  (k) REFERENCES.

                  Whenever required by the context, and is used in this
Agreement, the singular number shall include the plural and pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural, as the identification of the person may require. References
to monetary amounts, specific named statutes and generally accepted accounting
principles are intended to be and shall be construed as references to United
States dollars, statutes of the United

                                       12
<PAGE>

States of the stated name and United States generally accepted accounting
principles, respectively, unless the context otherwise requires.

                  (l) CONSTRUCTION.

                  The provisions of this Agreement shall be construed according
to their fair meaning and neither for nor against any Party hereto irrespective
of which Party caused such provisions to be drafted. Each of the Parties hereto
acknowledges that it has been represented by an attorney in connection with the
preparation and execution of this Agreement.

                  (m) ATTORNEYS' FEES.

                  In the event any suit or other legal proceeding is brought for
the enforcement of any of the provisions of this Agreement, the Parties hereto
agree that the prevailing Party or Parties shall be entitled to recover from the
other Party or Parties upon final judgment on the merits reasonable attorneys'
fees (and sales taxes thereon, if any), including attorneys' fees for any
appeal, and costs incurred in bringing such suit or proceeding.

                  (n) NUMBER OF DAYS.

                  In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays, and holidays
celebrated in the United States; provided, however, that if the final day of any
period falls on a Saturday, Sunday, or holiday celebrated in the United States,
then the final day shall be deemed to be the next day which is not a Saturday,
Sunday, or holiday celebrated in the United States.

                  (o) INDEPENDENT CONTRACTORS.

                  The Parties are and shall be independent contractors to one
another, and nothing herein shall be interpreted, construed of or otherwise
cause this Agreement to be deemed to create an agency, partnership, or joint
venture between the Parties. Nothing in this Agreement shall be interpreted or
construed as creating or establishing the relationship of employer or employee
between the Parties.

                                       13
<PAGE>

            IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the day and year first
above written.

                                     SELLERS:

                                     APPLICA INCORPORATED:

                                     By: /s/ Harry D. Schulman
                                        -------------------------------------
                                        Harry D. Schulman
                                        President and Chief Executive Officer

                                     REMDALE INVESTMENTS LIMITED:

                                     By: /s/ David J. Thomas
                                        -------------------------------------
                                        David J. Thomas
                                        Director

                                     PPC INDUSTRIES LIMITED:

                                     By: /s/ Terry Polistina
                                        -------------------------------------
                                        Terry Polistina
                                        Director

                                     BUYER:

                                     CENTRAL GOLD WORLDWIDE LIMITED:

                                     By: /s/ Oian Weiging
                                        -------------------------------------
                                        Oian Weiging
                                        Vice President

                                       14
<PAGE>

                                   SCHEDULE A

                      CAPITALIZATION AND OWNERSHIP OF STOCK

<TABLE>
<CAPTION>
                                                      SHARE
       ENTITY                                       OWNERSHIP
---------------------------                     ------------------
<S>                                             <C>
Applica Incorporated                                6,156 A shares
                                                      550 B shares

PPC Industries Limited                          1,263,600 A shares
                                                   27,522 B shares

Remdale Investments Limited                         9,234 B shares
</TABLE>

                               AUTHORIZED CAPITAL

                                 HK$ 65,399,500

                              ISSUED SHARE CAPITAL

                                 HK$ 65,353,100

                                       15
<PAGE>

                                   SCHEDULE B

            BALANCE SHEET OF THE CORPORATION AS OF THE EFFECTIVE DATE

                                       16
<PAGE>

HONG KONG DOLLAR PRESENTATION:

<TABLE>
<CAPTION>
                                                  ADEL
                                                 PARAWIND      DURABLE - LOCAL  DURABLE - CON
                                             --------------   ----------------  --------------
<S>                                          <C>              <C>               <C>
CASH                                           1,682,070.49       8,177,754.31
A/R                                           30,662,139.07      55,218,007.68
A/R AFFIL                                    (10,278,528.51)    609,002,856.45
INVENTORY                                                       120,545,499.26
PREPAID EXPENSE                                    5,000.00       3,194,840.96
                                             --------------  -----------------
TOTAL CURRENT ASSETS                          22,070,681.05     796,138,958.66
                                             --------------  -----------------
INVESTMENTS                                                      25,110,419.81  (25,110,419.81)
FIXED ASSET                                                     191,404,176.37
OTHER ASSET
                                             ==============   ================  ==============
TOTAL ASSETS                                  22,070,681.05   1,012,653,554.84  (25,110,419.81)
                                             ==============   ================  ==============
LOAN FROM SHR
NOTES & ACCEPT
A/P                                           (3,118,779.27)   (224,590,384.86)
ACCRUED EXPENSE                                 (383,916.00     (54,122,869.01)
CUR TAX PAYABLE                                                  (6,187,434.17)
                                             --------------  -----------------
TOTAL CURRENT LIABILITIES                     (3,502,695.27)   (284,900,688.04)
                                             --------------  -----------------
L.T. DEBT                                                       (58,425,000.00)
DEF TAX L.T.                                                    (18,447,146.00)
                                             --------------  -----------------
TOTAL LIABILITIES                             (3,502,695.27)   (361,772,834.04)
                                             --------------  -----------------
COMMON STOCK                                 (18,073,010.33     (65,353,100.00)  18,172,970.76
PAID IN CAPITAL                                                (181,628,969.46)   6,937,449.05
TOTAL EXCHANGE
RETAINED EARNINGS                               (494,975.45)   (403,898,651.34)
TOTAL STOCKHOLDERS EQTY                      (18,567,985.78)   (650,880,720.80)  25,110,419.81
                                             ==============  =================  ==============
TOTAL LIABILITIES & EQUITY                   (22,070,681.05  (1,012,653,554.84)  25,110,419.81
                                             ==============  =================  ==============
BALANCE SHEET CHECK

ADM's June Stockholder's Equity               18,567,985.78     650,880,720.80  (25,110,419.81)
Less:
  Retained Earnings                              494,975.45     403,898,651.34

ADM Excluded Assets (Actual)                                     29,026,766.47

ADM for AAL Excluded Assets (Actual)                                  2,585.00

Included Assets-Die Cast Mexico (Actual)*                         1,019,965.42

                                             ==============  =================  ==============
ADM's June Adusted Book Value                 18,073,010.33     218,972,683.41  (25,110,419.81)
                                             ==============  =================  ==============

June Affiliates C/A less dividend            (10,773,503.96)    205,104,205.11

                                             ==============  =================  ==============
Balance due if we had closed June             28,846,514.29      13,868,478.30  (25,110,419.81)
                                             ==============  =================  ==============

<CAPTION>

                                                                                  DURABLE AND
                                                NOVOTEK LTD        DUBEL          AFFILIATES
                                               --------------  --------------  -----------------
<S>                                            <C>             <C>             <C>                 <C>        <C>
CASH                                                 1,376.21                       9,861,201.01
A/R                                                                                85,880,146.75
A/R AFFIL                                         (273,464.96)                    598,450,862.98
INVENTORY                                                                         120,545,499.26
PREPAID EXPENSE                                                     36,336.60       3,236,177.56
                                               --------------  --------------  -----------------
TOTAL CURRENT ASSETS                              (272,088.75)      36,336.60     817,973,887.56
                                               --------------  --------------  -----------------
INVESTMENTS
FIXED ASSET                                                      3,959,633.44     195,363,809.81
OTHER ASSET                                                        173,918.86         173,918.86
                                               ==============  ==============  =================
TOTAL ASSETS                                      (272,088.75)   4,169,888.90   1,013,511,616.23
                                               ==============  ==============  =================
LOAN FROM SHR
NOTES & ACCEPT
A/P                                                                (13,733.35)   (227,722,897.48)
ACCRUED EXPENSE                                      1,675.00                     (54,505,110.01)
CUR TAX PAYABLE                                                                    (6,187,434.17)
                                               --------------  --------------  -----------------
TOTAL CURRENT LIABILITIES                            1,675.00      (13,733.35)   (288,415,441.66)
                                               --------------  --------------  -----------------
L.T. DEBT                                                                         (58,425,000.00)    7.79     (7,500,000.00)
DEF TAX L.T.                                                                      (18,447,146.00)
                                               --------------  --------------  -----------------
TOTAL LIABILITIES                                    1,675.00      (13,733.35)   (365,287,587.66)
                                               --------------  --------------  -----------------
COMMON STOCK                                            (2.00)    (100,000.00)    (65,353,141.57)
PAID IN CAPITAL                                                 (6,937,449.05)   (181,628,969.46)
TOTAL EXCHANGE
RETAINED EARNINGS                                  270,415.75    2,881,293.50    (401,241,917.54)
TOTAL STOCKHOLDERS EQTY                            270,413.75   (4,156,155.55)   (648,224,028.57)
                                               ==============  ==============  =================
TOTAL LIABILITIES & EQUITY                         272,088.75   (4,169,888.90) (1,013,511,616.23)
                                               ==============  ==============  =================
BALANCE SHEET CHECK

ADM's June Stockholder's Equity                   (270,413.75)   4,156,155.55     648,224,028.57
Less:
  Retained Earnings                               (270,415.75)  (2,881,293.50)    401,241,917.54

ADM Excluded Assets (Actual)                                                       29,026,766.47     7.79      3,726,157.44

ADM for AAL Excluded Assets (Actual)                                                    2,585.00

Included Assets-Die Cast Mexico (Actual)*                                           1,019,965.42

                                               ==============  ==============  =================
ADM's June Adusted Book Value                            2.00    7,037,449.05     218,972,724.98
                                               ==============  ==============  =================

June Affiliates C/A less dividend                   (3,049.21)   2,881,293.50     197,208,945.44

                                               ==============  ==============  =================
Balance due if we had closed June                    3,051.21    4,156,155.55      21,763,779.54
                                               ==============  ==============  =================

                                                                                            7.79
                                                               USD EQUIVALENT       2,793,809.95
</TABLE>

* NOTE:
Per Exhibit B Stock Purchase Agreement - Mexico Die Casting Assets of
$130,932.66USD converted at $7.79HKD to $1USD($130,932.66 x 7.79 =
$1,019,965.42).

<PAGE>
                                    EXHIBIT B

                               DIE CASTING ASSETS

                                       19

<PAGE>

     APPLICA MANUFACTURING
        QUERETARO PLANT
     TRANSFER FIXED ASSETS
  BUSINESS UNIT: DIE CASTING
            DOLLARS

<TABLE>
<CAPTION>
  NUMBER
FIXED ASSETS          DESCRIPTION              MARK           MODEL       TONS            CAPACITY           VALUE
<S>           <C>                             <C>             <C>      <C>                <C>              <C>
MACHINERY:
 04111000020  DIE CASTING INJECTION MACHINE   TOSHIBA         DC350C   800 GRS INYECC    420 X 420 MM       3,448.28
 04111000034  DIE CASTING INJECTION MACHINE   TOSHIBA         DC350C   2600 GRS INYECC   580 X 580 MM      23,411.98
 04111000062  DIE CASTING INJECTION MACHINE   TOSHIBA         DO3500   2600 GRS INYECC   580 X 580 MM      11,705.99
 04111000068  DIE CASTING INJECTION MACHINE   TOSHIBA         DC350C   2600 GRS INYECC   580 X 580 MM      11,705.99
 04111000060  DIE CASTING INJECTION MACHINE   TOSHIBA         DC350C   2600 GRS INYECC   580 X 580 MM      11,705.99
 04111000061  DIE CASTING INJECTION MACHINE   TOSHIBA         DC350C   2600 GRS INYECC   580 X 580 MM      11,705.99

PERIPHERAL EQUIPMENT :                                                   SUB-TOTAL                                    73,684.21

 04111000037  HEATER OIL                      REGAL                                                         1,483.84
 04111000048  HEATER OIL                      REGAL                                                         1,483.84
 04111000049  HEATER OIL                      REGAL                                                         2,434.32
 04111000073  HEATER OIL                      REGAL                                                         1,483.84
 04111000074  HEATER OIL                      QPC                                                           1,852.03
 04111000078  HEATER OIL                      QPC                                                           1,615.95
 04111000024  LUDOX SPRAYING SYSTEM           YZAR                                                            725.95
 04111000025  LUDOX SPRAYING SYSTEM           HOC GUAN SOON                                                 3,795.20
 04111000054  LUDOX SPRAYING SYSTEM           HOC GUAN SOON                                                   725.95
 04111000055  LUDOX APPLICATOR 3 CAV          YZAR                                                            725.95
 04111000056  LUDOX SPRAYING SYSTEM           HOC GUAN SOON                                                   725.95
 04111000059  LUDOX M/C & PIPING              HOC GUAN SOON                                                 2,230.28
 04111000019  FUSION FURNACE                  STRIKO          MH-11-N 750/750G-EG                          16,805.70
 04111000007  FURNACE                         CAISA                                                         1,361.16
 04111000008  FURNACE                         CAISA                                                         1,361.16
 04111000065  FURNACE                         CAISA                                                         1,469.31
 04111000066  FURNACE                         CAISA                                                         1,526.01
 04111000077  FURNACE                         CAISA                                                         1,376.67
 04111000080  FURNACE                         CAISA                                                         1,361.16
 04111000464  MECHANIC ARM                    RIMROCK                                                       3,176.04
</TABLE>

                                       20

<PAGE>

  APPLICA MANUFACTURING
    QUERETARO PLANT
 TRANSFER FIXED ASSETS
BUSINESS UNIT: DIE CASTING
        DOLLARS

<TABLE>
<CAPTION>
   NUMBER
FIXED ASSETS          DESCRIPTION         MARK            MODEL      TONS           CAPACITY           VALUE
------------          -----------         ----            -----      ----           --------           ------
<S>                   <C>                <C>              <C>        <C>            <C>              <C>
 04111000464          MECHANIC ARM       RIMROCK                                                     3,176.04

 04111000465          MECHANIC ARM       RIMROCK                                                     3,176.04

 04111000466          MECHANIC ARM       RIMROCK                                                     3,176.04

 04111000467          MECHANIC ARM       RIMROCK                                                     3,176.04

                                                                     SUB-TOTAL                                 57,248.46
                                                                                                     -------------------
                                                                  TOTAL DIE CASTING                           130,932.66
                                                                                                     ===================
</TABLE>

                                       21

<PAGE>

                                   EXHIBIT C

                          TRANSITION SERVICES AGREEMENT

                                       22

<PAGE>

                          TRANSITION SERVICES AGREEMENT

      This Transition Services Agreement (this "Agreement") is made and entered
into as of the 28th day of July 2004, by and among Applica Consumer Products,
Inc., a company organized and existing under the laws of the State of Florida
and its affiliates ("Applica"), Durable Manufacturing Limited, a company
organized and existing under the laws of Hong Kong, formerly known as Applica
Durable Manufacturing Limited ("Durable") and Central Gold Worldwide Limited, a
company organized and existing under the laws of the British Virgin Islands
("Central"). Applica, Durable and Central are collectively referred to herein as
the "Parties", and each individually as a "Party."

                                   WITNESSETH:

      WHEREAS, Applica and its affiliates, Remdale Investments Limited, a
company organized and existing under the laws of the British Virgin Islands and
PPC Industries Limited, a company organized and existing under the laws of the
British Virgin Islands and Central have entered into a stock purchase agreement
dated as of even date herewith (the "Stock Purchase Agreement") with respect to
the sale of the stock of Applica Durable Manufacturing Limited; and

      WHEREAS, to promote a smooth transition of Durable's business, Applica has
agreed to provide or to cause its affiliates to provide to Durable certain
services and Durable has agreed to provide or to cause its affiliates to provide
to Applica certain services, in each case as described in Exhibit A hereto upon
the terms and conditions set forth in this Agreement.

                                   AGREEMENT:

      NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the Parties contained herein, the Parties agree as follows:

      1. Definitions. Capitalized terms used in this Agreement but not defined
herein shall have the meanings given to them in the Stock Purchase Agreement.

      2. Services. During the term of this Agreement, the Parties shall provide
or at their option shall cause one or more of their affiliates to provide, as
applicable, the services described in Exhibit A to this Agreement (the
"Services").

      3. Consideration. All Services provided hereunder shall be at no cost to
the receiving Party.

      4. Performance Standard; Confidentiality. In providing the Services
hereunder, the Parties hereto or their respective affiliates shall exercise
professional judgment and diligence. All information disclosed to either Party
hereunder or to their respective affiliates and identified as proprietary and
confidential shall be subject to terms of the Confidentiality Agreement

<PAGE>

previously entered into on January 29, 2004 between Applica and all of its
subsidiaries and affiliates and Elec-Tech International (H.K.) Company Limited
and its subsidiaries or affiliates.

      5. Force Majeure; Reduction of Services. Neither Party shall be liable to
the other for any delay or failure on the part of the other due to acts of war,
embargo, riot or any unforeseen intervention of a governmental authority causing
a complete business interruption so long as notice of such event is promptly
given to the other Party. If such delay or failure continues for more than
fifteen (15) days, the Parties shall meet to attempt in good faith to agree upon
the actions to be taken in order to arrive at an equitable solution.

      6. Limited Liability. Neither Party shall be liable to the other, whether
in negligence, breach of contract, tort or otherwise, for any damages suffered
or incurred by the other arising out of or in connection with the rendering of
the Services hereunder or any failure to provide a Service, except to the extent
that such damages are caused by the willful misconduct or gross negligence of a
Party. In no event shall any Party be liable for special, incidental or
consequential losses or damages, including without limitation, loss profits.

      7. Term and Termination. This Agreement shall become effective on the date
hereof and shall continue in effect until December 31, 2004 (the "Termination
Date"). If the Parties mutually agree in writing, this Agreement may be extended
beyond the Termination Date or terminated prior to such date.

      8. No Agency or Partnership. Nothing in this Agreement shall be deemed in
any way or for any purpose to constitute either Party as an agent of the other
Party in the conduct of such Party's business or to create a partnership or
joint venture between the Parties.

      9. Entire Agreement; Waiver. This Agreement, together with the exhibit
hereto, constitutes the entire agreement of the Parties with respect to the
Services hereunder, and no waiver, alteration, or modification of any provision
hereof shall be effective unless in writing and signed by authorized
representatives of both Parties. Except as otherwise expressly provided herein,
no provision hereof is intended to confer upon any person other than the Parties
hereto any rights or remedies hereunder.

      10. Expenses. Each Party shall bear its own costs and expenses in
connection with the Services to be provided hereunder.

      11. Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder by any Party hereto to another (herein
collectively called "Notice") shall be in writing and in the English language
and delivered personally or mailed by certified mail, postage prepaid and return
receipt requested, or by facsimile (with confirmation), or by a reputable
overnight delivery service, as follows:

                                       2

<PAGE>

                          If to Central, to:

                          AMS Trustees Limited
                          P.O. Box 116
                          Road Town, Tortola
                          British Virgin Islands

                          with a copy given in the manner
                          prescribed above to Durable:

                          C/O ELEC-TECH INTERNATIONAL (H.K.) COMPANY LIMITED
                          1501, 15/F, 100 Canton Road
                          TsimShaTsui, Hong Kong
                          Attention:  General Manager
                          Phone No.:  (0756) 3390868
                          Facsimile No.:  (0756) 3390606
                          Phone No.:  (852) 2375-1296
                          Facsimile No.:  (852) 2375-1385

                          with a copy given in the manner
                          prescribed above to:

                          Holland & Knight LLP
                          701 Brickell Avenue, Suite 3000
                          Miami, Florida 33131
                          Attention:  Rodney H. Bell
                          Phone No.: (305) 374-8500
                          Facsimile No.: (305) 789-7799

                          If to Applica, to:

                          APPLICA CONSUMER PRODUCTS, INC.
                          5980 Miami Lakes Drive
                          Miami Lakes, Florida 33014
                          Attention:  Legal Department
                          Phone No.:  (305) 816-7025
                          Facsimile No.:  (305) 816-9616

                                       3

<PAGE>

                          with a copy given in the manner
                          prescribed above to:

                          Greenberg Traurig, P.A.
                          1221 Brickell Avenue
                          Miami, Florida 33131
                          Attention: Paul Berkowitz
                          Phone No.: (305) 579-0500
                          Facsimile No.: (305) 579-0717

      Each of the above addresses for notice purposes may be changed by
providing appropriate notice hereunder. Notice given by personal delivery or
certified mail shall be effective upon actual receipt. Notice given by facsimile
shall be effective upon actual receipt if received during the recipient's normal
business hours, or at the beginning of the recipient's next normal business day
if not received during the recipient's normal business hours. Notice given by
overnight delivery shall be effective on the next business day if the package
containing the notice was timely delivered to the delivery service. All Notices
by facsimile shall be confirmed by the sender thereof promptly after
transmission in writing by registered mail or personal delivery. Anything to the
contrary contained herein notwithstanding, notices to any Party hereto shall not
be deemed effective with respect to such Party until such Notice would, but for
this sentence, be effective both as to such Party and as to all other persons to
whom copies are provided above to be given.

      12. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
assigns, except that this Agreement may not be assigned in whole or in part
without the prior written consent of the other Party hereto, which consent shall
not be unreasonably withheld.

      13. Construction. As used in this Agreement, the plural shall include the
singular and the singular shall include the plural. With regard to each and
every term and condition of this Agreement, the Parties hereto understand and
agree that the same have or has been mutually negotiated, prepared and drafted,
and that if at any time the Parties desire or are required to interpret or
construe any such term or condition or any agreement or instrument subject
hereto, no consideration shall be given to the issue of which Party actually
prepared, drafted or requested this Agreement.

      14. Counterparts; Effectiveness. This Agreement may be executed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each Party has received a counterpart hereof signed
by the other Party hereto. Facsimile signatures are acceptable as originals.

      15. Captions. The captions used in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

                                       4

<PAGE>

      16. Severability. Any provision of this Agreement that is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement.

      17. Further Assurances. The Parties agree to execute and deliver such
other instruments and documents and take such other actions as any Party to this
Agreement may reasonably request in connection with the transactions
contemplated by this Agreement, including, without limitation, transmitting and
crediting all monies received by a Party in error to the appropriate Party.

      18. Governing Law. This Agreement shall be construed and interpreted in
accordance with and governed by the laws of the State of Florida (without regard
to the choice of law provisions thereof).

                                       5

<PAGE>

      IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first above written.

                                              APPLICA CONSUMER PRODUCTS, INC.:

                                              By:_______________________________
                                                 Name:__________________________
                                                 Title:_________________________

                                              CENTRAL GOLD WORLDWIDE LIMITED:

                                              By:_______________________________
                                                 Name:__________________________
                                                 Title:_________________________

                                              DURABLE MANUFACTURING
                                              LIMITED (formerly known as Applica
                                              Durable Manufacturing Limited):

                                              By:_______________________________
                                                 Name:__________________________
                                                 Title:_________________________

                                       6

<PAGE>

                                    EXHIBIT A
                                  THE SERVICES

Engineering

-   Quality/Testing Lab

-   Engineering Documentation

-   Tooling

-   People

    -   John Cheung

    -   YC Lee

    -   Wesley Chiu

    -   Weiman Chung

    -   David Wong

    -   Alternate:  Johnny Chow

Creative Services

-   Assistance with product packaging artwork, including the printing process

-   People

    -   Rita Lung

    -   Woon Lam

ADEL/AAL

-   Accounting systems and support

-   Transfer of orders, invoicing, payments and collections from ADEL to AAL
    (Applica to get credit for all such business after the Effective Date)

-   People

    -   Sze Sze Fung

    -   Katheria Cheung

    -   Louisa Szeto

    -   Mandy Chung

    -   Lily Li

IT

-   Software Licenses

    -   ProE, PDM Link, Lotus Notes, QAD

-   Hardware

-   Disaster Recover (AAL backups)

-   People

    -   Dereck Chu

Other

-   Dormitories for China staff

-   Component manufacturing

-   Cancellation of Bank lines/Applica guarantee

-   Assignment of A/R

                                       7

<PAGE>

-   Assistance with transfer of die casting assets from Mexico, including
    assistance with disassembling, packaging, shipping, installing,
    configuring and achieving the good working order of such assets

-   People

    -   Ricky Wong

    -   Au Young Ban

    -   Alternative - Vincent Lai

The Parties shall take all such other actions as any Party may reasonably
request from time to time in order to effectuate a reasonable and orderly
de-linking of shared services.

                                       8

<PAGE>

                                   EXHIBIT D

                              ASSIGNMENT AGREEMENT

                                       23

<PAGE>

                              ASSIGNMENT AGREEMENT

      THIS ASSIGNMENT AGREEMENT (this "Agreement") is made as of this 28th day
of July 2004, by and among APPLICA DURABLE MANUFACTURING LIMITED, a company
organized and existing under the laws of Hong Kong (the "Assignor"), PPC
INDUSTRIES LIMITED, a company organized and existing under the laws of the
British Virgin Islands, APPLICA INCORPORATED, a company organized and existing
under the laws of the State of Florida and REMDALE INVESTMENTS LIMITED, a
company organized and existing under the laws of the British Virgin Islands
(each an "Assignee", collectively, the "Assignees"). Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Stock Purchase Agreement (as hereinafter defined). The Assignor and the
Assignees are collectively referred to herein as the "Parties", and each
individually as a "Party".

                                    RECITALS

      WHEREAS, the Assignees are shareholders of the Assignor and are Sellers
under the terms of a Stock Purchase Agreement dated as of even date herewith, by
and among the Assignees and Central Gold Worldwide Limited, a company organized
and existing under the laws of the British Virgin Islands (the "Stock Purchase
Agreement");

      WHEREAS, in connection with the payment of the Purchase Price pursuant to
Section 2 of the Stock Purchase Agreement, the Assignor desires to assign its
rights, title and interest in and to (i) the Receivables attached hereto as
Exhibit A and (ii) the Excluded Assets to the Assignees or their affiliates; and

      WHEREAS, the Assignees desire to accept the foregoing assignment from the
Assignor.

                                    AGREEMENT

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor and the Assignees
agree as follows:

      1. The Assignor does hereby assign, convey and transfer, without recourse,
all of its rights, title and interest in and to (i) the Receivables and (ii) the
Excluded Assets to the Assignees or any of their affiliates and the Assignees
hereby accept such assignment on behalf of themselves and their affiliates. From
and after the date hereof, the Assignees and any of their affiliates shall be
entitled to all of the Assignor's rights, powers and privileges under any
document evidencing the Receivables and the Excluded Assets.

      2. Each of the Assignor and the Assignees hereby agrees to execute and
deliver such other instruments and documents and take such other actions as any
Party to this Agreement may reasonably request in connection with the
transactions contemplated by this Agreement.

      3. This Agreement shall be deemed to be a contract pursuant to the laws of
the State of Florida (excluding any conflict of law, rule or principle that
would refer to the laws of another jurisdiction).

<PAGE>

      4. This Agreement may be executed in counterparts, each of which shall be
deemed an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
Party has received a counterpart hereof signed by the other Parties hereto.
Facsimile signatures are acceptable as originals.

                                       2

<PAGE>

      IN WITNESS WHEREOF, the Assignees and the Assignor have caused this
Agreement to be duly executed as of the date first written above by their duly
authorized representatives.

                                     ASSIGNOR:

                                     APPLICA DURABLE MANUFACTURING LIMITED

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

                                     ASSIGNEES:

                                     PPC INDUSTRIES LIMITED

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

                                     REMDALE INVESTMENTS LIMITED

                                     By:________________________________________
                                     Name:_____________________________________
                                     Title:_____________________________________

                                     APPLICA INCORPORATED

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

                                       3

<PAGE>

                                   EXHIBIT E

              BOUGHT NOTES, SOLD NOTES AND INSTRUMENT OF TRANSFER

                                       24
<PAGE>
                      APPLICA DURABLE MANUFACTURING LIMITED
                           (Incorporated in Hong Kong)

                                    SOLD NOTE

Name of Purchaser (Transferee):    CENTRAL GOLD WORLDWIDE LIMITED
                                -----------------------------------------------
Address:    P.O. BOX 116, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS
         ----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
-------------------------------------------------------------------------------
Number of Shares: 6,156 CLASS A SHARES of par value  HK$50.00      each
                  --------------------               ------------
Consideration Received:      US$132,390.00
                        -------------------------------------------------------

                                                  For and on behalf of
                                                  APPLICA INCORPORATED

                                                  DIRECTOR
                                                  -----------------------------
                                                           (Transferor)
Date:

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

                                  BOUGHT NOTE

Name of Seller (Transferor):   APPLICA INCORPORATED
                             --------------------------------------------------
Address: 5980 MIAMI LAKES DRIVE, MIAMI LAKES, FLORIDA 33014,
         ----------------------------------------------------------------------
         UNITED STATES OF AMERICA
         ----------------------------------------------------------------------

Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
-------------------------------------------------------------------------------
Number of Shares: 6,156 CLASS A SHARES of par value HK$50.00     each
                  --------------------              ------------
Consideration Paid:     US$132,390.00
                    -----------------------------------------------------------

                                                  For and on behalf of
                                                  Central Gold Worldwide Limited

                                                  DIRECTOR
                                                  -----------------------------
                                                         (Transferee)
Date:

<PAGE>

                             INSTRUMENT OF TRANSFER

I (We),                                   :  APPLICA INCORPORATED
of                                        :  5980 Miami Lakes Drive,
                                             Miami Lakes, Florida 33014,
                                             United States of America

in consideration of the Sum of Dollars    :  US$132,390.00

paid to me (us) by                        :  CENTRAL GOLD WORLDWIDE LIMITED
occupation                                :  corporation
of                                        :  P.O. Box 116, Road Town,
                                             Tortola, British Virgin Islands

(hereinafter called "the said transferee") do hereby transfer to the said
transferee the 6,156 fully paid Class A Shares, standing in my (our) name in the
Register of APPLICA DURABLE MANUFACTURING LIMITED to hold unto the said
transferee, his executors, administrators or assigns, subject to the execution
hereof. And I (we) the said transferee do hereby agree to take the said Share(s)
subject to the same conditions.

Witness our hands the               day of

Witness to the signature(s)             )        For and on behalf of
of                                      )        APPLICA INCORPORATED
Name:                                   )
Address:                                )
                                        )
                                        )        ---------------------
                                        )        Authorised Signature(s)
                                        )
-------------------------------         )        -------------------------------
Signature of Witness                             Signature of TRANSFEROR

Witness to the signature(s)             )        For and on behalf of
of                                      )        CENTRAL GOLD
Name:                                   )        WORLDWIDE LIMITED
Address:                                )
                                        )
                                        )
                                        )        ---------------------
                                        )        Authorised Signature(s)
                                        )
-------------------------------         )        -------------------------------
Signature of Witness                             Signature of TRANSFEREE

<PAGE>

                      APPLICA DURABLE MANUFACTURING LIMITED
                           (Incorporated in Hong Kong)

                                    SOLD NOTE

Name of Purchaser (Transferee):    CENTRAL GOLD WORLDWIDE LIMITED
                                ------------------------------------------------
Address:    P.O. BOX 116, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS
         ----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   550 CLASS B SHARES   of par value   HK$50.00   each
                  ----------------------              -------------
Consideration Received:    US$11,828.20
                        --------------------------------------------------------

                                                For and on behalf of
                                                APPLICA INCORPORATED

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferor)
Date:

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

                                   BOUGHT NOTE

Name of Seller (Transferor):   APPLICA INCORPORATED
                             ---------------------------------------------------
Address:   5980 MIAMI LAKES DRIVE, MIAMI LAKES, FLORIDA 33014,
         -----------------------------------------------------------------------
           UNITED STATES OF AMERICA
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   550 CLASS B SHARES of par value   HK$50.00    each
                  --------------------              -------------
Consideration Paid:    US$11,828.20
                    ------------------------------------------------------------

                                                For and on behalf of
                                                Central Gold Worldwide Limited

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferee)
Date:

<PAGE>

                             INSTRUMENT OF TRANSFER

I (We),                                     :  APPLICA INCORPORATED
of                                          :  5980 Miami Lakes Drive,
                                               Miami Lakes, Florida 33014,
                                               United States of America

in consideration of the Sum of Dollars      :  US$11,828.20

paid to me (us) by                          :  CENTRAL GOLD WORLDWIDE LIMITED
occupation                                  :  corporation
of                                          :  P.O. Box 116, Road Town,
                                               Tortola, British Virgin Islands

(hereinafter called "the said transferee") do hereby transfer to the said
transferee the 550 fully paid Class B Shares, standing in my (our) name in the
Register of APPLICA DURABLE MANUFACTURING LIMITED to hold unto the said
transferee, his executors, administrators or assigns, subject to the execution
hereof. And I (we) the said transferee do hereby agree to take the said Share(s)
subject to the same conditions.

Witness our hands the               day of

Witness to the signature(s)            )        For and on behalf of
of                                     )        APPLICA INCORPORATED
Name:                                  )
Address:                               )
                                       )
                                       )        ---------------------
                                       )        Authorised Signature(s)
                                       )
-------------------------------        )       ---------------------------------
Signature of Witness                            Signature of TRANSFEROR

Witness to the signature(s)            )        For and on behalf of
of                                     )        CENTRAL GOLD
Name:                                  )        WORLDWIDE LIMITED
Address:                               )
                                       )
                                       )
                                       )        ---------------------
                                       )        Authorised Signature(s)
                                       )
-------------------------------        )       ---------------------------------
Signature of Witness                            Signature of TRANSFEREE

<PAGE>

                      APPLICA DURABLE MANUFACTURING LIMITED
                           (Incorporated in Hong Kong)

                                    SOLD NOTE

Name of Purchaser (Transferee):    CENTRAL GOLD WORLDWIDE LIMITED
                                ------------------------------------------------
Address:    P.O. BOX 116, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   1,263,600 CLASS A SHARES  of par value  HK$50.00   each
                  ---------------------------              -----------
Consideration Received:    US$27,174,777.00
                        --------------------------------------------------------

                                                For and on behalf of
                                                PPC INDUSTRIES LIMITED

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferor)
Date:

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

                                   BOUGHT NOTE

Name of Seller (Transferor):   PPC INDUSTRIES LIMITED
                             ---------------------------------------------------
Address:   CITCO BUILDING, WICKHAM'S CAY, PO BOX 622, ROAD TOWN,
         -----------------------------------------------------------------------
           TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   1,263,600 CLASS A SHARES  of par value    HK$50.00   each
                  ---------------------------              -------------
Consideration Paid:    US$27,174,777.00
                    ------------------------------------------------------------

                                                For and on behalf of
                                                Central Gold Worldwide Limited

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferee)
Date:

<PAGE>

                             INSTRUMENT OF TRANSFER

I (We),                                    :  PPC INDUSTRIES LIMITED
of                                         :  Citco Building, Wickham's Cay,
                                              PO Box 622, Road Town,
                                              Tortola,  British  Virgin Islands

in consideration of the Sum of Dollars     :  US$27,174,777.00

paid to me (us) by                         :  CENTRAL GOLD WORLDWIDE LIMITED
occupation                                 :  corporation
of                                         :  P.O. Box 116, Road Town,
                                              Tortola, British Virgin Islands

(hereinafter called "the said transferee") do hereby transfer to the said
transferee the 1,263,600 fully paid Class A Shares, standing in my (our) name in
the Register of APPLICA DURABLE MANUFACTURING LIMITED to hold unto the said
transferee, his executors, administrators or assigns, subject to the execution
hereof. And I (we) the said transferee do hereby agree to take the said Share(s)
subject to the same conditions.

Witness our hands the               day of

Witness to the signature(s)               )    For and on behalf of
of                                        )    PPC INDUSTRIES LIMITED
Name:                                     )
Address:                                  )
                                          )
                                          )    ---------------------
                                          )    Authorised Signature(s)
                                          )
-------------------------------           )    --------------------------------
Signature of Witness                           Signature of TRANSFEROR

Witness to the signature(s)               )    For and on behalf of
of                                        )    CENTRAL GOLD
Name:                                     )    WORLDWIDE LIMITED
Address:                                  )
                                          )
                                          )
                                          )    ---------------------
                                          )    Authorised Signature(s)
                                          )
-------------------------------           )    --------------------------------
Signature of Witness                           Signature of TRANSFEREE

<PAGE>

                      APPLICA DURABLE MANUFACTURING LIMITED
                           (Incorporated in Hong Kong)

                                    SOLD NOTE

Name of Purchaser (Transferee):    CENTRAL GOLD WORLDWIDE LIMITED
                                ------------------------------------------------
Address:    P.O. BOX 116, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares: 27,522 CLASS B SHARES of par value    HK$50.00    each
                  ---------------------              ------------
Consideration Received:    US$591,883.85
                        --------------------------------------------------------

                                                For and on behalf of
                                                PPC INDUSTRIES LIMITED

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferor)
Date:

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

                                   BOUGHT NOTE

Name of Seller (Transferor):   PPC INDUSTRIES LIMITED
                             ---------------------------------------------------
Address: CITCO BUILDING, WICKHAM'S CAY, PO BOX 622, ROAD TOWN,
         -----------------------------------------------------------------------
         TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   27,522 CLASS B SHARES of par value  HK$50.00  each
                  -----------------------              ----------
Consideration Paid:    US$591,883.85
                    ------------------------------------------------------------

                                                For and on behalf of
                                                Central Gold Worldwide Limited

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferee)
Date:

<PAGE>

                             INSTRUMENT OF TRANSFER

I (We),                                      :  PPC INDUSTRIES LIMITED
of                                           :  Citco Building, Wickham's Cay,
                                                PO Box 622, Road Town,
                                                Tortola, British Virgin Islands

in consideration of the Sum of Dollars       :  US$591,883.85

paid to me (us) by                           :  CENTRAL GOLD WORLDWIDE LIMITED
occupation                                   :  corporation
of                                           :  P.O. Box 116, Road Town,
                                                Tortola, British Virgin Islands

(hereinafter called "the said transferee") do hereby transfer to the said
transferee the 27,522 fully paid Class B Shares, standing in my (our) name in
the Register of APPLICA DURABLE MANUFACTURING LIMITED to hold unto the said
transferee, his executors, administrators or assigns, subject to the execution
hereof. And I (we) the said transferee do hereby agree to take the said Share(s)
subject to the same conditions.

Witness our hands the               day of

Witness to the signature(s)             )      For and on behalf of
of                                      )      PPC INDUSTRIES LIMITED
Name:                                   )
Address:                                )
                                        )
                                        )      ---------------------
                                        )      Authorised Signature(s)
                                        )
-------------------------------         )     ---------------------------------
Signature of Witness                           Signature of TRANSFEROR

Witness to the signature(s)             )      For and on behalf of
of                                      )      CENTRAL GOLD
Name:                                   )      WORLDWIDE LIMITED
Address:                                )
                                        )
                                        )
                                        )      ---------------------
                                        )      Authorised Signature(s)
                                        )
-------------------------------         )     ---------------------------------
Signature of Witness                           Signature of TRANSFEREE

<PAGE>

                      APPLICA DURABLE MANUFACTURING LIMITED
                           (Incorporated in Hong Kong)

                                    SOLD NOTE

Name of Purchaser (Transferee):    CENTRAL GOLD WORLDWIDE LIMITED
                                ------------------------------------------------
Address:    P.O. BOX 116, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   9,234 CLASS B SHARES  of par value   HK$50.00  each
                  -----------------------              -----------
Consideration Received:    US$198,585.00
                        --------------------------------------------------------

                                                For and on behalf of
                                                REMDALE INVESTMENTS
                                                LIMITED

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferor)
Date:

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

                                   BOUGHT NOTE

Name of Seller (Transferor):   REMDALE INVESTMENTS LIMITED
                             ---------------------------------------------------
Address: CITCO BUILDING, WICKHAM'S CAY, PO BOX 622, ROAD TOWN,
         -----------------------------------------------------------------------
         TORTOLA, BRITISH VIRGIN ISLANDS
         -----------------------------------------------------------------------
Name of Company in which the shares to be transferred:

APPLICA DURABLE MANUFACTURING LIMITED
--------------------------------------------------------------------------------
Number of Shares:   9,234 CLASS B SHARES of par value  HK$50.00  each
                  ----------------------              ----------
Consideration Paid:    US$198,585.00
                    ------------------------------------------------------------

                                                For and on behalf of
                                                Central Gold Worldwide Limited

                                                DIRECTOR
                                                --------------------------------
                                                             (Transferee)
Date:

<PAGE>

                             INSTRUMENT OF TRANSFER

I (We),                                     :  REMDALE INVESTMENTS LIMITED
of                                          :  Citco Building, Wickham's Cay,
                                               PO Box 622, Road Town,
                                               Tortola, British Virgin Islands

in consideration of the Sum of Dollars      :  US$198,585.00

paid to me (us) by                          :  CENTRAL GOLD WORLDWIDE LIMITED
occupation                                  :  corporation
of                                          :  P.O. Box 116, Road Town,
                                               Tortola, British Virgin Islands

(hereinafter called "the said transferee") do hereby transfer to the said
transferee the 9,234 fully paid Class B Shares, standing in my (our) name in the
Register of APPLICA DURABLE MANUFACTURING LIMITED to hold unto the said
transferee, his executors, administrators or assigns, subject to the execution
hereof. And I (we) the said transferee do hereby agree to take the said Share(s)
subject to the same conditions.

Witness our hands the               day of

Witness to the signature(s)               )      For and on behalf of
of                                        )      REMDALE INVESTMENTS
Name:                                     )      LIMITED
Address:                                  )
                                          )
                                          )
                                          )      ---------------------
                                          )      Authorised Signature(s)
                                          )
-------------------------------           )     --------------------------------
Signature of Witness                             Signature of TRANSFEROR

Witness to the signature(s)               )      For and on behalf of
of                                        )      CENTRAL GOLD
Name:                                     )      WORLDWIDE LIMITED
Address:                                  )
                                          )
                                          )
                                          )      ---------------------
                                          )      Authorised Signature(s)
                                          )
-------------------------------           )     --------------------------------
Signature of Witness                             Signature of TRANSFEREE<PAGE>
                                                                    EXHIBIT 10.1

                                      LEASE

                                     between

                      STATE OF WISCONSIN INVESTMENT BOARD,
                 AN INDEPENDENT AGENCY OF THE STATE OF WISCONSIN

                                    (Lessor)

                                       and

                           UNITED MERCHANDISING CORP.,
                            a California corporation

                                    (Lessee)

Dated as of March 5, 1996

Demised Premises: 7351 McGuire Avenue, Fontana, CA

<PAGE>

Big 5, Fontana, CA
2-12-96 (8)

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
ARTICLE 1.- PREMISES ....................................................   1
          1.1. Demised Premises .........................................   1
          1.2. Title and Condition of the Demised Premises ..............   1
          1.3. Quiet Enjoyment ..........................................   2

ARTICLE 2.- TERM ........................................................   2
          2.1. Primary Term .............................................   2
          2.2. Option to Extend .........................................   2

ARTICLE 3.- RENTAL ......................................................   2
          3.1. Rental For Primary Term and Option Terms .................   2
          3.2. Consumer Price Index .....................................   4
          3.3. Additional Rental ........................................   5
          3.4. Place of Payment .........................................   5
          3.5. No Counterclaim, Abatement, etc ..........................   5

ARTICLE 4.- USE .........................................................   6
          4.1. Permitted Use ............................................   6
          4.2. Forbidden Uses ...........................................   6
          4.3. No Covenant To Operate or Occupy .........................   6
          4.4. Laws and Regulations .....................................   6

ARTICLE 5.- TAXES AND UTILITIES .........................................   8
          5.1. Taxes ....................................................   8
          5.2. Income Taxes .............................................   9
          5.3. Utilities ................................................   9

ARTICLE 6.- MAINTENANCE AND ALTERATIONS .................................   9
          6.1. Maintenance and Repair ...................................   9
          6.2. Alterations and Additions ................................   9
          6.3. Machinery and Fixtures ...................................  10

ARTICLE 7.- DAMAGE OR DESTRUCTION .......................................  10
          7.1. Notice to Lessor .........................................  10
          7.2. Damage or Destruction ....................................  11
          7.3. No Termination ...........................................  11
          7.4. Damage or Destruction During the Last Year of the Term ...  11
          7.5. Rebuilding of Premises ...................................  12
          7.6. Destruction During Option Terms ..........................  12

ARTICLE 8. - CONDEMNATION ...............................................  12
          8.1. Condemnation Award .......................................  12
          8.2. Total or Substantial Taking ..............................  13
          8.3. Partial Taking ...........................................  13
          8.4. Condemnation During Option Terms .........................  13
          8.5. Taking Defined ...........................................  13

ARTICLE 9. - INSURANCE ..................................................  14
          9.1. Nature of Insurance ......................................  14
          9.2. Adjustment of Claims .....................................  16
          9.3. Endorsement in Favor of Lender ...........................  16
</TABLE>

                                        i

<PAGE>

Big 5, Fontana, CA
2-12-96 (8)

<TABLE>
<S>                                                                       <C>
         9.4.   Certificates of Insurance ..............................  16

ARTICLE 10. - INDEMNIFICATION ..........................................  17

ARTICLE 11. - LIENS ....................................................  17

ARTICLE 12. - ADVANCES BY LESSOR: PERMITTED CONTESTS ...................  18
         12.1.  Advances ...............................................  18
         12.2.  Permitted Contests .....................................  18

ARTICLE 13. - CONDITIONAL LIMITATIONS; EVENTS OF DEFAULT AND REMEDIES...  18
         13.1.  Default ................................................  18
         13.2.  Lessor's Option to Terminate ...........................  19
         13.3.  Recovery of Damage; Termination of Lease ...............  20
         13.4.  Expenses of Lessor; Continuation of Lease ..............  20
         13.5.  Additional Rights of Lessor ............................  21
         13.6.  Attorneys' Fees and Other Expenses .....................  21

ARTICLE 14. - ASSIGNMENT AND SUBLETTING ................................  22

ARTICLE 15. - MISCELLANEOUS PROVISIONS .................................  23
         15.1.  Subordination ..........................................  23
         15.2.  No Merger ..............................................  24
         15.3.  Surrender ..............................................  24
         15.4.  Binding Effect .........................................  25
         15.5.  Headings ...............................................  25
         15.6.  Successors and Assigns .................................  25
         15.7.  Notices ................................................  25
         15.8.  Local Law to Apply .....................................  26
         15.9.  Time is of the Essence .................................  26
         15.10. No Waiver ..............................................  26
         15.11. Liability of Lessor and Release ........................  26
         15.12. Financial Statements ...................................  26
         15.13. Late Charge ............................................  27
         15.14. Lessor's Right To Perform and Right to Enter ...........  27
         15.15. Lessee's Quitclaim .....................................  27
         15.16. Invalidity .............................................  27
         15.17. Hold Over ..............................................  27
</TABLE>

Exhibit  A - Legal Description of Demised Premises
Exhibit  B - Plot Plan of Demised Premises
Exhibit  C - Subordination Agreement
Exhibit  D - Lessee's Lender's Estoppel and Waiver Letter

                                       ii

<PAGE>

Big 5, Fontana, CA
2-12-96 (8)

                                     LEASE

THIS LEASE is made as of this _________ day of _______________, 1996, by and
between STATE OF WISCONSIN INVESTMENT BOARD, AN INDEPENDENT AGENCY OF THE STATE
OF WISCONSIN (hereinafter called "Lessor"), and UNITED MERCHANDISING CORP., a
California corporation (hereinafter called "Lessee").

                              ARTICLE 1. - PREMISES

      1.1.  DEMISED PREMISES. For and in consideration of the rental hereinafter
            reserved, and the mutual covenants, agreements and conditions
            hereinafter contained, Lessor does hereby lease to Lessee and Lessee
            does hereby rent from Lessor that certain real property commonly
            known as 7351 McGuire Avenue, City of Fontana, County of San
            Bernardino, State of California, more particularly described in
            Exhibit A attached hereto and made a part hereof; together with all
            easements, rights and appurtenances in connection therewith;
            together with the buildings and improvements now erected or
            hereafter to be erected upon the above described real property,
            including, without limitation, any fixtures and equipment which are
            an integral part of the buildings and improvements for purposes of
            their use and operation as an office, warehouse or distribution
            facility or which cannot be removed without material damage to such
            buildings and improvements (which, by way of example, shall include
            all HVAC and mechanical systems, conveyor systems, loading docks,
            load leveler systems, carpeting and wall coverings). The real
            property owned by Lessor and leased hereunder does not include, and
            Lessee shall retain ownership and the right to remove, those items
            of personal property and trade fixtures that are attached to or used
            in the buildings and improvements solely for the purpose of Lessee
            conducting its business therein and which can be removed without
            material damage to the buildings and improvements (including,
            without limitation Lessee's satellite communication equipment, music
            and intercom systems, security systems, and racking systems). Said
            real property and the building and improvements thereon may
            hereinafter be called "the Premises" or "the Demised Premises". Said
            real property exclusive of the building and improvements may
            hereinafter be called "the Land". For the convenience of the parties
            hereto a plot plan is attached hereto as Exhibit B on which the
            Demised Premises is outlined in black.

      1.2.  TITLE AND CONDITION OF THE DEMISED PREMISES. Lessee represents that
            the Demised Premises and the title thereto have been examined and
            approved by Lessee and for all purposes of this Lease, Lessee hereby
            accepts the Demised Premises in its present condition. Lessee
            further represents that the Demised Premises was constructed for the
            benefit of Lessee and that Lessee has occupied the Premises since
            February, 1990. To Lessee's actual knowledge, as of the date of
            execution of this Lease, the Demised Premises is in good condition
            and repair and is in compliance with laws.

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      1.3.  QUIET ENJOYMENT. So long as Lessee shall not be in default under the
            terms of this Lease, Lessee shall quietly have and enjoy the Demised
            Premises during the term of this Lease.

                                ARTICLE 2.- TERM

      2.1.  PRIMARY TERM. The primary term (herein called the "Primary Term")
            shall commence on the date hereof (the "Commencement Date") and
            shall end at midnight on ______________________, unless terminated
            sooner pursuant to the terms hereof.

      2.2.  OPTION TO EXTEND. Subject to the provisions of this Section 2.2,
            Lessee shall have three (3) consecutive options to extend the term
            of this Lease for five (5) years each. (Such additional terms may
            hereinafter be called "Option Terms".) Such options shall be
            personal to United Merchandising Corp., or its Affiliate, as that
            term is defined in Section 14.2 hereof, and may not be exercised by
            an assignee or sublessee under the Lease, unless said assignee or
            sublessee is an Affiliate of United Merchandising Corp., nor may
            Lessee exercise an option as provided herein for the purpose of
            subletting or assigning the Demised Premises during such Option Term
            to any party who is not an Affiliate. The first Option Term shall
            commence on the day following the expiration of the Primary Term and
            end at midnight five (5) years thereafter. Each succeeding Option
            Term shall commence on the day following the preceding Option Term
            and end at midnight five (5) years thereafter. Each option shall be
            exercised by giving notice to Lessor in writing of the exercise
            thereof at least twelve (12) months prior to the commencement of
            each Option Term, which notice shall be irrevocable by Lessee. All
            Option Terms shall be on the same terms and conditions as otherwise
            provided in this Lease, except that the rents payable during the
            Option Terms shall be adjusted as set forth below. Notwithstanding
            the foregoing, in the event an Event of Default (as defined in
            Section 13.1, hereof) exists under this Lease at the time Lessee
            exercises its option to extend the term of this Lease, or if an
            Event of Default pursuant to the provisions of Section 13.1.1(a)
            hereof exists as of the commencement of the respective Option Term,
            then Lessor shall have, in addition to all of Lessor's other rights
            and remedies under this Lease, the right to terminate such option
            and to cancel Lessee's exercise of such option, in which event this
            Lease shall expire at the expiration of the Primary Term or any then
            existing Option Term, as the case may be.

                               ARTICLE 3. - RENTAL

      3.1.  RENTAL FOR PRIMARY TERM AND OPTION TERMS. Commencing on the
            Commencement Date and thereafter on the first day of each calendar
            month of the Primary Term, and continuing thereafter until the end
            of the Primary Term and any Option Term of this Lease. Lessee agrees
            to pay, and Lessor agrees to accept, as rental for the Demised
            Premises, for each calendar year during the term of this Lease the
            sum(s) set forth below in subparagraph(s) 3.1.1 et. seq.

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            Said annual rent shall be paid in equal monthly installments in the
            amount(s) set forth in said subparagraph(s). For periods of less
            than a full calendar month, said monthly rental payment shall be
            prorated based on the relationship of the number of days of the term
            of this Lease in such month to the total number of days in such
            month. If the Commencement Date occurs on other than the first day
            of a calendar month, the rental for such partial month shall be
            prorated as aforesaid and shall be due and payable on the
            Commencement Date.

            3.1.1. Commencing on the date referred to in Paragraph 3.1. above,
            and continuing for the next sixty (60) full calendar months ("First
            Period") of the term of this Lease, the annual rent referred to in
            said Paragraph 2.1. shall be the sum of One Million Three Hundred
            Fifty Six Thousand Four Hundred Fifty Six and no/100 Dollars
            ($1,356,456.00) to be paid in equal monthly installments of One
            Hundred Thirteen Thousand Thirty Eight and no/100 Dollars
            ($113,038.00).

            3.1.2. Commencing on the first day following the last day of the
            First Period, and continuing until the end of the Primary Term
            ("Second Period"), the annual and monthly rents payable under the
            Lease shall be increased and adjusted once by a fixed amount equal
            to the percentage increase in the consumer price index ("C.P.I."),
            as hereinafter defined, calculated as follows: The adjusted annual
            and monthly rents that shall be payable throughout the Second Period
            shall be equal to (a) the rent set forth in Paragraph 3.1.1. above,
            (b) multiplied by a fraction, (i) the numerator of which shall be
            the C.P.I. as of the last day of the First Period and (ii) the
            denominator of which shall be the C.P.I. as of the Commencement
            Date; provided, however, that the increase in rent shall not be less
            than ten and 41/100 percent (10.41%) or be more than twenty one and
            67/100 percent (21.67%) of the rental amounts payable during the
            First Period under Paragraph 3.1.1. above.

            3.1.3. In the event Lessee exercises its right to extend the Lease
            for the First Option Term pursuant to the provisions of Section 2.2,
            above, commencing on the first day following the last day of the
            Primary Term and continuing fox the next sixty (60) months (the
            "First Option Term"), the annual and monthly rents payable under the
            Lease shall be increased and adjusted once by an amount equal to the
            percentage increase in the consumer price index ("C.P.I."), as
            hereinafter defined, calculated as follows: The adjusted annual and
            monthly rents that shall be payable throughout the First Option Term
            shall be equal to (a) the rents set forth in Paragraph 3.1.2. above,
            (b) multiplied by a fraction, (i) the numerator of which shall be
            the C.P.I. as of the last day of the Primary Term, and (ii) the
            denominator of which shall be the C.P.I. as of the last day of the
            First Period; provided, however, that the increase in rents shall
            not be less than ten and 41/100 percent (10.41%) or be more than
            twenty one and 67/100 percent (21.67%) of the rental amounts payable
            during the Second Period under Paragraph 3.1.2. above.

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            3.1.4. In the event Lessee exercises its right to extend the Lease
            for the Second Option Term pursuant to the provisions of Section
            2.2, above, commencing on the first day following the last day of
            the First Option Term and continuing for the next sixty (60) months
            (the "Second Option Term"), the annual and monthly rents payable
            under the Lease shall be increased and adjusted once by an amount
            equal to the percentage increase in the consumer price index
            ("C.P.I."), as hereinafter defined, calculated as follows: The
            adjusted annual and monthly rents that shall be payable throughout
            the Second Option Term shall be equal to (a) the rents set forth in
            Paragraph 3.1.3. above, (b) multiplied by a fraction, (i) the
            numerator of which shall be the C.P.I. as of the last day of the
            First Option Term, and (ii) the denominator of which shall be the
            C.P.I. as of the last day of the Primary Term; provided, however,
            that the increase in rent shall not be less than ten and 41/100
            percent (10.41%) or be more than twenty four and 62/100 percent
            (24.62%) of the rental amounts payable during the First Option Term
            under Paragraph 3.1.3. above.

            3.1.5. In the event Lessee exercises its right to extend the Lease
            for the Third Option Term pursuant to the provisions of Section 2.2,
            above, commencing on the first day following the last day of the
            Second Option Term and continuing for the next sixty (60) months
            (the "Third Option Term"), the annual and monthly rents payable
            under the Lease shall be increased and adjusted once by an amount
            equal to the percentage increase in the consumer price index
            ("C.P.I."), as hereinafter defined, calculated as follows: The
            adjusted annual and monthly rents that shall be payable throughout
            the Third Option Term shall be equal to (a) the rents set forth in
            Paragraph 3.1.4. above, (b) multiplied by a fraction, (i) the
            numerator of which shall be the C.P.I. as of the last day of the
            Second Option Term, and (ii) the denominator of which shall be the
            C.P.I. as of the last day of the First Option Term; provided,
            however, that the increase in rent shall not be less than ten and
            41/100 percent (10.41%) or be more than twenty four and 62/100
            percent (24.62%) of the rental amounts payable during the Second
            Option Term under Paragraph 3.1.4. above.

      3.2.  CONSUMER PRICE INDEX. For purposes hereof, the C.P.I. shall be the
            Consumer Price Index, for all Urban Consumers, "All Items" average
            for Los Angeles - Anaheim - Riverside, California, published by the
            U.S. Department of Labor, Bureau of Labor Statistics, from time to
            time. In the event the Department of Labor or the United States
            government shall cease to publish the Consumer Price Index then the
            successor index (or most comparable) shall be used unless the
            parties hereto otherwise agree. In the event the Department of Labor
            or United States government alters the calculation or formula by
            which the C.P.I. is determined, the official replacement index
            published by either the Department of Labor or the United States
            government shall be utilized unless the parties mutually agree chat
            an alternative index should be utilized. In the event there is no
            official replacement index published the parties hereto covenant and
            agree to use reasonable, good faith efforts to agree on an

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            index which most closely approximates the information and data
            contained in the C.P.I. as of the date of this Lease.

      3.3.  ADDITIONAL RENTAL. In addition to the scheduled rental payable under
            this Article 3, Lessee agrees to pay, as Additional Rental, such
            other sums and expenses as shall be required by the terms of this
            Lease.

      3.4.  PLACE OF PAYMENT. All rental due hereunder shall be paid to Lessor
            at the address set forth in Section 15.7 herein, as such person or
            address may be changed from time to time.

      3.5.  NO COUNTERCLAIM, ABATEMENT, ETC. This Lease is a net Lease and
            except to the extent otherwise expressly provided in this Lease, the
            scheduled rent and all other sums payable by Lessee hereunder shall
            be paid without notice, demand, offset, suspension, deduction or
            abatement and this Lease shall continue in full force and effect and
            the obligations and liabilities of Lessee hereunder shall in no way
            be released, discharged or otherwise affected (except as expressly
            provided herein) by reason of:

            3.5.1. any damage to or destruction of or any condemnation or
            similar taking of the Demised Premises or any part thereof;

            3.5.2. any restriction or prevention of or interference with any use
            of the Demised Premises or any part thereof;

            3.5.3. any title defect or encumbrance:

            3.5.4. any bankruptcy, insolvency, reorganization or other like
            proceeding relating to Lessee or by any court, in any such
            proceeding;

            3.5.5. any claim which Lessee has or might have against Lessor;

            3.5.6. any default or failure on the part of Lessor to perform or
            comply with any of the terms hereof or of any other agreement with
            Lessee; or

            3.5.7. any other occurrence whatsoever, whether similar or
            dissimilar to the foregoing, any present or future law to the
            contrary notwithstanding, whether or not Lessee shall have notice or
            knowledge of any of the foregoing. Except as expressly provided in
            Sections 7.2. and 8.2. hereof, Lessee waives all rights now or
            hereafter conferred by statute or otherwise to quit, terminate or
            surrender this Lease or the Demised Premises, or any part thereof,
            or to any abatement, suspension, deferment, diminution or reduction
            of rent or any other sum payable by Lessee hereunder. Nothing
            contained herein shall relieve Lessor of its liability to Lessee for
            Lessor's breach of any of its obligations under this Lease.

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                                ARTICLE 4. - USE

      4.1.  PERMITTED USE. During the Primary term of the Lease, Lessee may use
            the Demised Premises for retail, warehouse or distribution purposes,
            or for any other lawful purpose approved by Lessor, which approval
            shall not be unreasonably withheld, provided said use does not
            conflict with the terms of any Covenants, Conditions and
            Restrictions of record ("CC&R's") existing and of record as of the
            date of this Lease. During the Option terms of the Lease, Lessee may
            use the Demised Premises for retail, warehouse or distribution
            purposes either consistent with its then practices or otherwise
            involving only softgoods and for no other use whatsoever without the
            prior written consent of the Lessor, which consent may be withheld
            in Lessor's sole and absolute discretion.

      4.2.  FORBIDDEN USES. Lessee shall not suffer any act to be done or any
            condition to exist on the Demised Premises, or any part thereof, or
            any article to be brought thereon, which may be dangerous (unless
            Lessee employs such safeguards as may be required by law or if not
            provided for by law, then as may be reasonable) or which may, in
            law, constitute a nuisance, public or private, or which may make
            void or voidable any insurance required hereunder to be in force
            with respect to the Demised Premises, or any part thereof.

      4.3.  NO COVENANT TO OPERATE OR OCCUPY. Nothing herein contained shall
            require Lessee to continuously operate any particular type of
            business on the Demised Premises or to continuously occupy the
            Demised Premises. Nothing contained in this Section 4.3 shall be
            deemed to relieve Lessee of the full and absolute responsibility for
            the maintenance and upkeep of the Demised Premises throughout the
            term of this Lease.

      4.4.  LAWS AND REGULATIONS. Lessee shall not use the Demised Premises or
            permit anything to be done in or about the Demised Premises which
            will in any way conflict with any law, statute, ordinance or
            governmental rule or regulation now in force or which may hereafter
            be enacted or promulgated. Lessee shall at its sole cost and expense
            comply with all laws, statutes, ordinances and governmental rules,
            regulations or requirements now in force or which may hereafter be
            in force relating to or affecting the condition, use or occupancy of
            the Demised Premises, including, without limitation, the Americans
            with Disabilities Act of 1990, (42 USC Section 12181-12183) and all
            orders, rules, regulations and any other requirements of the
            National Board of Fire Underwriters (or any other body exercising
            similar functions) now or hereafter applicable to or affecting the
            Premises or any part thereof, or any use or condition of the
            Premise, whether or not such compliance shall require structural
            alterations or additions or interfere with Lessee's use of the
            Demised Premises. In the event Lessee is so required to undertake
            code required alterations to the Premises Lessee shall notify Lessor
            of such requirements before undertaking any such code related
            alterations that affect the roof, foundations or any other
            structural elements or components of improvements or

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            any of the building systems owned by Lessor. If such code required
            alterations are required because of other alterations that Lessee
            proposes to undertake of the Premises, Lessee shall not undertake
            such other alterations unless Lessor has first approved the same
            after taking into consideration the code required alterations that
            will be required as a result thereof, which approval by Lessor shall
            not be unreasonably withheld.

      4.5.  HAZARDOUS MATERIALS. Lessee covenants to comply, and to cause its
            employees, agents, licensees, contractors and permitted assignees or
            sublessee to comply, with all local, state and federal laws, rules
            and regulations, now or at any time hereafter governing the use,
            handling, storage, treatment, removal, production, manufacture,
            transportation or disposal of hazardous or toxic substances or
            materials on the Demised Premises ("Laws"), and Lessee shall
            indemnify, defend and hold harmless Lessor from and against any and
            all liabilities, losses, damages, costs, expenses (including
            attorneys fees and expenses of Lessor), causes of action, suits,
            claims, demands or judgments of any nature (i) resulting from any
            spills or discharges of hazardous or toxic substances or materials
            on the Demised Premises during the Primary Term or any Option Term
            or during any period prior to the Commencement Date when Lessee was
            in occupancy of the Premises, caused by any act or omission of
            Lessee, or (ii) arising out of any failure on the part of Lessee, or
            its employees, agents, licensees, contractors or permitted assignees
            or sublessee to comply with all Laws. This indemnity shall include
            the cost of any required or necessary repair, cleanup or
            detoxification, and the preparation of any closure or other required
            plans, whether such action is required or necessary prior to or
            following the termination of this Lease. Neither the written consent
            by Lessor to the presence of hazardous or toxic materials or
            substances on, under or about the Premises nor the strict compliance
            by Lessee with all Laws shall excuse Lessee from Lessee's obligation
            of indemnification pursuant hereto. Lessee's obligations pursuant to
            the foregoing indemnity shall survive the termination of this Lease.
            Lessee further covenants and agrees to remove any of its hazardous
            or toxic personal property from the Demised Premises at the
            expiration or earlier termination of this Lease. Upon Lessor's
            written request, Lessee shall deliver to Lessor copies of all
            studies, reports and other information submitted by Lessee to any
            governmental entity or agency regulating the use of such substances
            and materials. Should Lessee at any time receive any notice of
            violation of any Laws or be given a citation with respect thereto,
            or receive notice of any claims made by any third party against
            Lessee relating to the presence or suspected presence of hazardous
            or toxic materials or substances on the Premises, Lessee shall
            notify Lessor of such notice of violation, citation, or claim and
            shall provide Lessor with a copy of the same, and, with respect to
            any such violation of Laws or citations, shall cure the deficiency
            set forth in such notice of violation or citation within the time
            required. Any consent or approval, express or implied, by Lessor of
            Lessee's use or handling

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            of any hazardous or toxic materials or substances shall not
            constitute an assumption of risk by Lessor regarding such materials
            or substances or a warranty or certification by Lessor that Lessee's
            use or handling of such materials or substances is safe or
            reasonable or in compliance with any Laws.

                        ARTICLE 5. - TAXES AND UTILITIES

      5.1.  TAXES. As additional rental under this Lease Lessee hereby agrees
            that it shall pay, prior to delinquency, all taxes (including,
            without limitation, sales and use taxes), assessments and bonds
            (including, without limitation, all assessments and bonds for public
            improvements or benefits, whether or not commenced, or completed
            prior to the date hereof and whether or not completed within the
            term hereof), ground rents, water, sewer or other rents, rates and
            charges, excises, levies, license fees, permit fees, inspection fees
            and other authorization fees and other charges, in each case whether
            general or special, ordinary or extraordinary, foreseen or
            unforeseen, of every character (including all interest and penalties
            thereon), which at any time during or in respect of the term hereof
            may be assessed, levied, confirmed or imposed on, or in respect of
            or be a lien upon (a) the Demised Premises or any part thereof or
            any estate, right or interest therein, (b) any occupancy, use or
            possession of or activity conducted on the Demised Premises or any
            part thereof, (c) any Basic Rent or additional rent reserved or
            payable hereunder (excluding any taxes referred to in (i), (ii) or
            (iii) of (f) below, (d) this Lease, (e) the gross receipts from the
            Demised Premises or the earnings from the use or occupancy thereof,
            or (f) Lessor, in its capacity as owner or Lessor of the Demised
            Premises, including any tax, surtax or charge measured solely by
            rents received by Lessor in respect of the leasing of the Demised
            Premises, but excluding municipal, county, state or federal income
            taxes assessed against Lessor, municipal, state, or federal capital
            levy, estate, succession, inheritance or transfer taxes of Lessor,
            or corporation franchise taxes imposed upon any corporate owner of
            the Lessor's interest in the Demised Premises; provided, however,
            that if at any time during the term of this Lease the methods of
            taxation prevailing at the commencement of the term hereof shall be
            altered so that in lieu of or as a supplement to or a substitute for
            the whole or any part of the taxes, assessments, levies, impositions
            or charges now levied, assessed or imposed on real estate and the
            improvements thereon, there shall be levied, assessed and imposed,
            (i) a tax, assessment, levy, imposition or charge, wholly or
            partially as a capital levy or otherwise, on the rents received
            therefrom, or (ii) a tax, assessment, levy (including but not
            limited to any municipal, state or federal levy), imposition or
            charge measured by or based in whole or in part upon the Demised
            Premises and imposed upon Lessor, or (iii) a license fee measured
            by the rent payable by Lessee under this Lease, then all such
            taxes, assessments, levies, impositions or charges or the part
            thereof so measured or based, shall be deemed to be included within
            the term "Taxes" for the purposes hereof, to the extent that such

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            Taxes would be payable if the Demised Premises were the only
            property of Lessor subject to such Taxes, and Lessee shall pay and
            discharge the same as herein provided in respect of the payment of
            all other Taxes. Lessee shall have the option to pay such tax or
            assessment in installments, except that each installment thereof,
            and any interest thereon, must be paid no later than the earlier to
            occur of the final date fixed for the payment thereof or the date on
            which a penalty for non-payment could be imposed, and the whole
            amount thereof must be paid prior to the expiration of the term of
            this Lease, as it may be extended pursuant to Section 2.2. of this
            Lease. Taxes and assessments shall be prorated at the end of the
            term of this Lease. Lessee will furnish to Lessor, within thirty
            (30) days after payment thereof, proof of the payment (copies of tax
            bills and cancelled checks shall be deemed sufficient) of any such
            tax, assessment, levy, fee, rent or charge which is payable by
            Lessee pursuant to this Section.

      5.2.  INCOME TAXES. Anything in the foregoing to the contrary notwith-
            standing, Lessee shall have no obligation under this Lease to pay
            any net income, franchise, excess profit or gift, estate or
            inheritance tax levied upon or assessed against Lessor, unless such
            tax is in lieu of or a substitute for any other tax or assessment
            upon or with respect to the Demised Premises which, if such other
            tax or assessment were in effect, would be payable by Lessee
            hereunder.

      5.3.  UTILITIES. As additional rental hereunder, Lessee agrees to pay all
            charges for water, gas, light, heat, telephone, electricity, power
            and other utility and communications services rendered or used on or
            about the Demised Premises and all other costs and expenses of any
            kind whatsoever arising in connection with the furnishing of such
            services to the Premises.

                    ARTICLE 6. - MAINTENANCE AND ALTERATIONS

      6.1.  MAINTENANCE AND REPAIR. Lessee will, at its cost and expense, keep
            and maintain the Demised Premises, including any rebuilt, additional
            or substituted buildings and other improvements in good repair and
            condition, whether interior or exterior, structural or
            non-structural, ordinary or extraordinary, foreseen or unforseen,
            subject to the provisions of Section 15.3, hereinafter. Lessor shall
            not be required to maintain, alter, repair, rebuild or replace the
            Demised Premises or any part thereof, and Lessee expressly waives
            the right to make repairs at the expense of Lessor which may be
            provided for in any law now in effect or hereafter enacted. Lessor
            and its authorized representatives may enter the Demised Premises,
            or any part thereof at any reasonable time for the purpose of
            inspecting the same. Lessor shall not have any duty to make any such
            inspection nor shall it incur any liability or obligation for not
            making any such inspection.

      6.2.  ALTERATIONS AND ADDITIONS. Subject to Lessor's approval of certain
            alterations, as described hereinafter, Lessee shall have the right

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            at any time to make (a) such additions, alterations, changes or
            improvements, in, on or to the Demised Premises as Lessee may deem
            necessary or proper, provided, however, that (i) any and all such
            work shall fully comply with all codes and regulations and with
            other recorded requirements relating to the Demised Premises (such
            as CC&R's), (ii) except to the extent required of Lessee by any
            governmental authority, no work done by Lessee shall lessen the
            market value of the Demised Premises, and (iii) except to the extent
            required of Lessee by any governmental authority, no work done by
            Lessee shall diminish Lessor's ability to use and/or release the
            Demised Premises on the termination or expiration of this Lease.
            Lessee shall pay promptly for all such work done by it or upon its
            order. Lessee covenants and agrees to give Lessor written notice of
            any alteration which affects the roof, foundation or any other
            structural elements or components or the building systems, together
            with a copy of Lessee's plans and specifications prior to the
            commencement of work. Lessee shall also deliver to Lessor, upon
            completion of any such work, copies of any "as-built" plans obtained
            by Lessee in connection with such additions or alterations. Without
            limiting any of Lessee's other obligations with respect to
            alterations hereunder, in the event Lessee proposes alterations to
            the structure of the improvements, or to any permanent building
            systems (such as plumbing and/or HVAC) Lessee shall obtain Lessor's
            prior written approval of such alterations, which approval shall not
            be unreasonably withheld and will be deemed granted if not
            disapproved, with explanation, within two (2) weeks after submittal
            by Lessee to Lessor of plans for such alterations.

      6.3.  MACHINERY AND FIXTURES. In addition to the foregoing, Lessee may, at
            any time during the term of this Lease and at its sole cost and
            expense, install, assemble or place upon the Demised Premises any
            items of machinery or equipment, trade fixtures or other personal
            property used or useful in Lessee's business. All such machinery,
            equipment, trade fixtures or other personal property shall be and
            remain the property of Lessee and Lessee may remove the same from
            the Demised Premises at any time prior to the expiration or earlier
            termination of this Lease, and in the event of any such removal,
            Lessee shall repair any damage to the Demised Premises caused
            thereby, at Lessee's cost and expense.

                       ARTICLE 7. - DAMAGE OR DESTRUCTION

      7.1.  NOTICE TO LESSOR. If the Demised Premises or any part thereof shall
            be damaged or destroyed by fire or other casualty, Lessee shall
            promptly notify Lessor of such destruction or damage if the cost of
            rebuilding, replacing and repairing such damage or destruction, as
            estimated by Lessee, shall either exceed Twenty Five Thousand and
            no/100 Dollars ($25,000.00) or affect the roof, foundation or any
            other structural elements or components or the building systems
            (such as plumbing and/or HVAC) on the Premises. Lessee expressly
            waives the provisions of any present or future law

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            relating to damage or destruction and agrees that the provisions of
            this Lease shall control the rights of Lessor and Lessee.

      7.2.  DAMAGE OR DESTRUCTION. If the Demised Premises shall be destroyed or
            damaged from any cause Lessee shall forthwith repair and restore the
            same to substantially the same condition existing immediately prior
            to said damage or destruction with all reasonable dispatch and
            diligence. Said restoration and repair shall include all fixtures
            and equipment in the Demised Premises owned by Lessee and so damaged
            or destroyed. So long as Lessee's net worth is Twenty Million and
            no/100 Dollars ($20,000,000.00) or more and the amount of any
            insurance proceeds payable with respect to any such damage or
            destruction of the Demised Premises is less than One Million and
            no/100 Dollars ($1,000,000.00), Lessee shall be entitled to receive
            such insurance proceeds and shall apply the same as may be required
            to the restoration and repair of the Demised Premises as required
            under this Article 7. If Lessee's net worth at the time of such
            damage or destruction is less than Twenty Million and no/100 Dollars
            ($20,000,000.00) or if the amount of such insurance proceeds payable
            with respect to any such damage or destruction is One Million and
            no/100 Dollars ($1,000,000.00) or more, then such insurance proceeds
            payable with respect to such damage or destruction shall be paid
            into an escrow account and such proceeds shall be disbursed to
            Lessee as required to pay invoices for the work or restoration and
            repair of the Premises. Any balance of such proceeds remaining
            following completion of such repair or restoration shall be
            disbursed to Lessee. Lessee shall comply, and shall require all its
            contractors to comply, with all federal, state and local laws in
            making any said repairs and restoration.

      7.3.  NO TERMINATION. Except as provided in Section 7.4, such destruction
            or damage to the Demised Premises shall not terminate this Lease,
            notwithstanding any laws of the state in which the Demised Premises
            are located to the contrary.

      7.4.  DAMAGE OR DESTRUCTION DURING THE LAST YEAR OF THE TERM. Anything in
            this Article 7 to the contrary notwithstanding, if the Demised
            Premises shall be destroyed or damaged so as to materially interfere
            with Lessee's business in the Premises (as reasonably determined by
            Lessee using its good faith business judgment) during the last 12
            months of the term hereof by reason of any cause, and the Demised
            Premises cannot be completely restored within a period of sixty (60)
            working days from the date of commencement of such repairs, this
            Lease may be terminated upon written notice by either party to the
            other and any and all insurance proceeds covering the Premises shall
            be paid to Lessor and insurance proceeds covering Lessee's personal
            property and trade fixtures shall be paid to Lessee. Provided,
            however, that if at the time of said destruction or damage, Lessee
            has exercised an option to extend this Lease pursuant to Article 2
            hereof, then this Lease shall not be terminable by either party but
            shall continue until the expiration of such Option Term and Lessee
            shall forthwith repair and restore the Demised Premises as required
            pursuant to Sections 7.2 and 7.5

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            hereof. Upon such termination Lessee shall be relieved from all
            liabilities hereunder except the liability to pay rent up to the
            date of such damage or destruction and any accrued charges, costs,
            and expenses required to be paid by Lessee hereunder up to said date
            and any other liabilities Lessee may have hereunder, including,
            without limitation, any indemnity obligations, arising prior to such
            termination.

      7.5.  REBUILDING OF PREMISES. If the Demised Premises shall be damaged or
            destroyed by any casualty during the primary term of this Lease, and
            this Lease is not terminated pursuant to the provisions of Section
            7.4, above, then this Lease shall continue in full force and effect
            and Lessee shall promptly, at its cost and expense, restore and
            rebuild the Demised Premises as nearly as may be practicable under
            the circumstances to substantially the same condition existing
            immediately prior to said damage or destruction irrespective of the
            availability or sufficiency of any fire or other insurance proceeds
            payable with respect thereto. If the cost and expense of such
            repairs shall exceed the amount of any such net proceeds, the
            deficiency shall be paid by Lessee.

      7.6.  DESTRUCTION DURING OPTION TERMS. If any portion of the Demised
            Premises shall be damaged or destroyed by any casualty during any
            Option Term of this Lease, and the Premises cannot reasonably be
            expected to be completely restored within three hundred sixty five
            (365) days of the date of such loss, then Lessee may elect to
            restore or rebuild the Demised Premises in the manner set forth in
            Section 7.2 and 7.5 or Lessee may, within ninety (90) days after
            such loss or damage give to Lessor a thirty (30) day notice, in
            writing, cancelling and terminating the Option Term then in effect.
            On the expiration of said thirty (30) day notice, the Option Term
            shall terminate. As a condition to such termination, any and all
            insurance proceeds covering the Lessor's interest in the Premises
            shall be paid to Lessor and the insurance proceeds covering Lessee's
            personal property and trade fixtures shall be paid to Lessee. Upon
            such termination Lessee shall be relieved from all liabilities
            hereunder except the liability to pay rent up to the date of such
            damage or destruction and, subject to any insurance payment to
            Lessor, any accrued charges, costs, and expenses required to be paid
            by Lessee hereunder up to said date and all other liabilities Lessee
            may have hereunder, including, without limitation, any indemnity
            obligations, arising prior to such termination.

                            ARTICLE 8. - CONDEMNATION

      8.1.  CONDEMNATION AWARD. Any condemnation award arising out of a total or
            partial taking of the Demised Premises shall belong solely to the
            Lessor except for any portion of the award attributable to Lessee's
            leasehold interest during the Primary Term (but not during any
            exercised or unexercised Option Term) of this Lease, Lessee's trade
            fixtures, equipment or leasehold improvements made by Lessee at its
            expense. In addition, Lessee shall have the right to claim

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            any compensation as may be separately awarded or receivable by
            Lessee in Lessee's own right on account of its relocation expenses,
            loss of goodwill, any cost or loss Lessee may suffer for the removal
            of its merchandise, furniture, trade fixtures or equipment, or the
            interruption of, or damage to Lessee's business.

      8.2.  TOTAL OR SUBSTANTIAL TAKING. If during the Primary Term of this
            Lease:

            8.2.1. the entire Demised Premises shall be taken by condemnation or
            other eminent domain proceedings pursuant to any law, general or
            special, or

            8.2.2. any substantial portion of the Demised Premises which is
            sufficient in Lessee's reasonable and good faith judgment to render
            the remaining portion thereof unsuitable for Lessee's continued use
            or occupancy of the Demised Premises shall be taken by such
            proceedings, then Lessee may, within thirty (30) days after any such
            taking, give notice to Lessor of its intention to terminate this
            Lease on any rental payment day specified in such notice which
            occurs not less than ninety (90) days after such notice.

      8.3.  PARTIAL TAKING. If a portion of the Demised Premises shall be taken
            by condemnation or other eminent domain proceedings pursuant to any
            law, general or special, which taking is not sufficient to require
            Lessee to give notice of its intention to terminate this Lease as
            provided in Section 8.2, then this Lease shall continue in full
            effect without abatement or reduction of rent (except as provided
            hereinafter in this Section 8.3), additional rent or other sums
            payable by Lessee hereunder notwithstanding such taking, and Lessee
            shall, promptly after any such taking and at its expense, repair any
            damage caused by any such taking in conformity with the requirements
            of Section 7.2 so that after the completion of such repairs the
            Demised Premises shall be, as nearly as practicable in a condition
            as good as the condition thereof immediately prior to such taking.
            In the event of any such taking by condemnation or other eminent
            domain proceedings, Lessee shall be entitled to receive all of the
            award payable in connection with such taking. If the cost of any
            repairs required to be made by Lessee pursuant to this Section 8.3,
            shall exceed the amount of the award, the deficiency shall be paid
            by Lessee. Subject to Lessee's rights to receive all awards for
            reconstruction of the improvements, any award granted and allocated
            to Lessor's interest in the Demised Premises shall be paid to Lessor
            and Lessee shall be entitled to an equitable abatement of rent based
            upon the extent of the Premises taken and the adverse effect on
            Lessee's ability to use and enjoy the Premises following such
            taking.

      8.4.  CONDEMNATION DURING OPTION TERMS. Not Used.

      8.5.  TAKING DEFINED. For the purposes of this Lease, all amounts payable
            pursuant to any agreement with any condemning authority which has
            been made in settlement of or under threat of any

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            condemnation or other eminent domain proceeding affecting the
            Demised Premises shall be deemed to constitute an award made in such
            proceeding.

                             ARTICLE 9. - INSURANCE

      9.1.  NATURE OF INSURANCE. Lessee will at all times maintain insurance on
            the Demised Premises of the following character:

            9.1.1. Insurance against loss or damage by fire and other risks from
            time to time included under so-called "all-risk", including extended
            coverage endorsements and boiler and machinery comprehensive
            coverage, standard for use in the State of California, and also
            including earthquake and flood coverage, in amounts equal to the
            full replacement value of the Demised Premises, reviewed annually.
            As used herein, "full replacement value" shall mean actual
            replacement cost (exclusive of the cost of excavation, foundations
            and subsurface footing) without deduction for physical depreciation.
            Notwithstanding anything to the contrary contained in this Article
            9, in the event Lessee's net worth is at any time less than Twenty
            Million and no/100 Dollars ($20,000,000.00), Lessee shall provide
            for the insurance required pursuant to this Section 9.1.1 to have a
            deductible for earthquake coverage of no greater than twelve and
            5/100 percent (12.5%) of the value of the property required to be
            insured and for all other insurance required hereunder, a deductible
            of no greater than Seventy Five Thousand and no/100 Dollars
            ($75,000.00) per occurrence. So long as Lessee's net worth exceeds
            Twenty Million and no/100 Dollars ($20,000,000.00), any deductible
            amounts shall be subject to the self-insurance limits set forth in
            section 9.1.3, hereinafter. In the event this Lease is terminated
            pursuant to the provisions of Sections 7.4 or 7.6, above, Lessee's
            obligation to pay insurance proceeds to Lessor shall include the
            amounts of any deductible and/or any self-insured retention amounts.

            9.1.2. Commercial general liability insurance against claims for
            bodily injury, death or property damage occurring on, in or about
            the Demised Premises and the adjoining streets, sidewalks and
            passageways, such insurance to afford protection of not less than a
            combined single limit liability of Five Million and no/100 Dollars
            ($5,000,000.00), providing coverage for, among other things, blanket
            contractual liability, premises and personal injury coverage, with
            the deletion of railroad track (railroad protective liability), if
            applicable, and the exclusion for explosion, collapse or
            underground hazard, if applicable. In no event shall the liability
            amount be less than Five Million and no/100 Dollars ($5,000,000.00).
            Said minimum limit of liability shall be subject to periodic
            adjustment (but no more frequently than once every five years), so
            as to conform with standard industry practice for similar properties
            in similar geographic locations. Any such adjustment must be
            reasonably approved by Lessee and documented by written amendment to
            this Lease.

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            9.1.3. Such insurance shall be written by companies licensed to do
            business in the State of California and with a general policy
            holder's rating of at lease B+ and a financial rating of at least X
            in the most current "Best Insurance Report" (or its equivalent
            replacement should such report cease to be issued) or as otherwise
            reasonably approved by Lessor, as available on the Commencement Date
            and annually thereafter. Such insurance shall (i) name as the
            insured parties thereunder Lessee, the Lessor and Bristol Group,
            Inc., as their interests may appear; (ii) shall contain an
            endorsement that such insurance shall remain in full force and
            effect notwithstanding that the insured may have waived its right of
            action against any party prior to the occurrence of a loss; (iii)
            shall, to the extent commercially available, contain an endorsement
            prohibiting cancellation, failure to renew, reduction of amount of
            insurance or change in coverage without the insurer's first giving
            Lessor thirty (30) days prior written notice of such proposed
            action; (iv) provide that any insurer issuing liability insurance
            waives all rights of recovery by way of subrogation against Lessor
            or Lessee, as the case may be, and their respective shareholders,
            partners, beneficial owners, agents, employees and representatives
            in connection with any loss or damage covered by such insurance; (v)
            be primary and non contributory, and (vi) comply with any other
            requirements set forth in this Article 9. Such insurance may be
            obtained by Lessee by endorsement on its blanket insurance policies,
            provided that such blanket policies satisfy the requirements
            specified above in this Section. Lessee may carry all or any part of
            such insurance:

                  a.    (i) under any plan of self-insurance which it may from
                        time to time have in force and effect, with a
                        self-insured retention of up to Five Hundred Thousand
                        and no/100 Dollars ($500,000.00) (except any earthquake
                        deductible may be up to twelve and 5/100 percent (12.5%)
                        of the value of the property required to be insured) so
                        long as Lessee's net worth exceeds Twenty Million and
                        no/100 Dollars ($20,000,000.00) (which self-insured
                        retention may be increased by Lessee to Seven Hundred
                        Fifty Thousand and no/100 Dollars ($750,000.00) so long
                        as Lessee's net worth exceeds Thirty Five Million and
                        no/100 Dollars ($35,000,000.00) and to One Million and
                        no/100 Dollars ($1,000,000.00) so long as Lessee's net
                        worth exceeds Fifty Million and no/100 Dollars
                        ($50,000,000.00), provided that in no event shall
                        Lessee's self insured retention exceed the sum of One
                        Million and no/100 Dollars ($1,000,000.00), or (ii)
                        under a "blanket" policy or policies covering other
                        liabilities of Lessee and its subsidiaries, controlling
                        or affiliated corporations, or

                  b.    partly under such a plan of self-insurance and partly
                        under such "blanket" policies.

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            Lessor shall not be required to prosecute any claim against any
            insurer or to contest any settlement proposed by any insurer,
            provided that Lessee may, at its cost and expense, prosecute any
            such claim or contest any such settlement, and in such event Lessee
            may bring any such prosecution or contest in the name of Lessor,
            Lessee or both, and Lessor shall cooperate with Lessee and will join
            therein at Lessee's written request upon receipt by Lessor of an
            indemnity from Lessee against all costs, liabilities and expenses in
            connection with such cooperation, prosecution or contest.

      9.2.  ADJUSTMENT OF CLAIMS. Insurance claims by reason of damage or
            destruction to any portion of any Demised Premises shall be adjusted
            by and at the cost of Lessee, provided, however, that if the loss
            shall be in excess of One Hundred Thousand and no/100 Dollars
            ($100,000.00), no final adjustment shall be made with the insurance
            company or companies, without the written approval of Lessor of the
            amount of the adjustment.

      9.3.  ENDORSEMENT IN FAVOR OF LENDER. Upon thirty (30) days advance
            written notice from Lessor, each such insurance policy (other than
            liability insurance policies) maintained pursuant to this Section
            shall, to the extent available, bear a standard first mortgagee
            endorsement in favor of any lender holding a first deed of trust on
            the Demised Premises (hereinafter called "Lender"), but,
            notwithstanding such endorsement, each payment for a single loss
            which does not exceed One Hundred Thousand and no/100 Dollars
            ($100,000.00) shall be made directly to Lessee, and all other loss
            under any such policy shall be made payable to Lender, but
            recoveries under any such policies received by Lender shall be paid
            to Lessee for the repair and restoration of the Demised Premises as
            provided in Sections 7.2 or 7.4 of this Lease. Every such policy
            shall provide that the issuer thereof waives all rights of
            subrogation against Lessee, Lessor, any successor to Lessor's
            interest in the Demised Premises, that ten (10) days' prior written
            notice of cancellation shall be given to Lessor and Lender and that
            such insurance, as to the interest of Lender therein, shall not be
            invalidated by any act or neglect of Lessor or Lessee or any owner
            of the Demised Premises, nor by any foreclosure or any other
            proceedings or notices thereof relating to the Demised Premises, nor
            by any change in the title or ownership of the Demised Premises, nor
            by occupancy of the Demised Premises for purposes more hazardous
            than are permitted by such policy.

      9.4.  CERTIFICATES OF INSURANCE. Lessee shall deliver to Lessor promptly
            after the execution and delivery of this Lease certificates of
            insurance evidencing all the insurance which is required to be
            maintained by Lessee hereunder, and Lessee shall, at least thirty
            (30) days prior to the expiration of any such insurance, deliver
            certificates of insurance evidencing the renewal of such insurance.
            Should Lessee fail to maintain or renew any insurance provided for
            in this Section, or to deliver to Lessor any of such policies or
            certificates, Lessor at its option, but without obligation so to

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            do, may upon fifteen (15) days' notice to Lessee, procure such
            insurance, and any sums expended by it to procure such insurance
            shall be additional rent hereunder and shall be repaid by Lessee
            within ten (10) days following the date on which demand therefor
            shall be made by Lessor.

                          ARTICLE 10. - INDEMNIFICATION

      10.1. Lessee agrees to indemnify, defend and hold Lessor harmless from and
            against, any and all liabilities, losses, damages, costs, expenses
            (including attorneys' fees and expenses of Lessee and Lessor),
            causes of action, suits, claims, demands or judgments of any nature
            arising from:

            10.1.1. any injury to, or the death of, any person or any damage to
            property on the Demised Premises or upon adjoining sidewalks or
            streets, or in any manner growing out of or connected with the use,
            nonuse, condition or occupancy of the Demised Premises or the
            construction or repair of any improvements on the Demised Premises,
            or resulting from the condition of adjoining sidewalks or streets,

            10.1.2. violation of any agreement or condition of this Lease and of
            any contracts or agreements of which Lessee has notice, or which
            shall have existed at the commencement of this Lease or which shall
            have been approved by Lessee, and of any restrictions, laws,
            ordinances or regulations affecting the Demised Premises or the
            occupancy or use thereof,

            10.1.3. any encroachment of improvements on the Demised Premises
            upon property adjoining the Demised Premises, and

            10.1.4. any contest permitted by Section 12.2.

                               ARTICLE 11. - LIENS

      11.1. Lessee will not permit to remain, and will promptly discharge, at
            its cost and expense, all liens (other than liens created by Lessor)
            upon the Demised Premises; provided that the existence of any
            mechanic's, laborer's, materialman's, supplier's or vendor's lien or
            right thereto shall not constitute a violation of this Section if
            payment is not yet due under the contract which is the foundation
            thereof. Lessor is hereby given authority to enter upon the Demised
            Premises at any time to post any notices which in its opinion shall
            be necessary to hold Lessor harmless from any claim or liability
            arising out of any work done on the Demised Premises. Notice is
            hereby given that Lessor will not be liable for any labor, services
            or materials furnished or to be furnished to Lessee, or to anyone
            holding the Demised Premises through or under Lessee, and that no
            mechanic's or other such lien for any such labor or materials shall
            attach to or affect the interest of Lessor in and to the Demised
            Premises.

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              ARTICLE 12. - ADVANCES BY LESSOR: PERMITTED CONTESTS

12.1. ADVANCES. If Lessee shall fail to make any payment or perform any act on
      its part to be made or performed under this Lease, then, subject to the
      provisions of Section 12.2 hereof, Lessor may (but shall not be obligated
      to), upon fifteen (15) days written notice to Lessee and without waiving
      any default or releasing Lessee from any obligation, make such payment or
      perform such act for the account and at the cost and expense of Lessee.
      All sums so paid by Lessor and all necessary and incidental costs and
      expenses (including attorneys' fees and expenses) incurred in connection
      therewith, together with interest at the rate of twelve percent (12%) per
      annum from the date of the making of such payment by Lessor, shall be
      payable by Lessee to Lessor, on demand.

12.2. PERMITTED CONTESTS. Lessee shall not be required to pay any tax,
      assessment, levy, fee, rent or charge or to discharge or remove any lien,
      encumbrance or charge or to comply with any law, rule, order, regulation
      and ordinance, so long as Lessee shall contest, in good faith and at its
      cost and expense, the amount or validity thereof, by appropriate
      proceedings which shall operate during the pendency thereof to prevent the
      sale, forfeiture or loss of the Demised Premises or any part thereof.
      While any such proceedings are pending, Lessor shall not have the right to
      pay, remove, cause to be discharged or comply with the tax, assessment,
      levy, fee, rent, charge, lien, encumbrance, law, rule, order, regulation
      or ordinance being contested. Each such contest shall be promptly
      prosecuted to a final conclusion, and Lessee will pay, and save Lessor
      harmless against all losses, judgments and costs (including attorneys'
      fees and expenses) in connection therewith, and will, promptly after the
      final determination of such contest, pay and discharge the amounts which
      shall be levied, assessed or imposed or determined to be payable therein,
      together with all penalties, fines, interests, costs and expenses thereon
      or in connection therewith. No such contest shall subject Lessor to risk
      of any criminal liability, and Lessee shall give reasonable security to
      Lessor as may be demanded by Lessor to insure payment of or compliance
      with any tax, assessment, levy, fee, rent, charge, lien, encumbrance, law,
      rule, order, regulation or ordinance contested as provided in this Section
      and to prevent any such sale or forfeiture.

ARTICLE 13. - CONDITIONAL LIMITATIONS; EVENTS OF DEFAULT AND REMEDIES

13.1  DEFAULT. Any of the following occurrences, following the below described
      notices and opportunities to cure, shall constitute an event of default
      ("Event of Default") under this Lease:

      13.1.1. if Lessee shall:

            a.    fail to make any payment of rent, or other sum herein
                  required to be paid by Lessee and such failure shall continue
                  for ten (10) days after Lessor shall have given written notice
                  of such non-payment to Lessee, or

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            b.    fail to substantially perform any of Lessee's other covenants,
                  agreements or obligations hereunder and such failure shall
                  continue for thirty (30) days after Lessor shall have given
                  written notice to Lessee specifying such failure or, if such
                  default cannot be cured by the payment of money and cannot
                  with due diligence be cured within such thirty (30) day
                  period, if Lessee shall fail to proceed promptly to cure the
                  same and thereafter prosecute the curing of such default with
                  diligence, or

      13.1.2. if Lessee shall file a petition in bankruptcy or for
      reorganization or for an arrangement pursuant to any present or future
      federal bankruptcy act or under any similar federal or state law, or shall
      be adjudicated a bankrupt or insolvent or shall make an assignment for the
      benefit of its creditors or shall admit in writing its inability to pay
      its debts generally as they become due, or if a petition or answer
      proposing the adjudication of Lessee as a bankrupt or its reorganization
      under any present or future federal bankruptcy act or any similar federal
      or state law shall be filed in any court and such petition or answer shall
      not be discharged or denied within ninety (90) days after the filing
      thereof, or

      13.1.3. if Lessee shall make a general assignment for the benefit of
      creditors or if a receiver, trustee or liquidator of Lessee or of all or
      substantially all of Lessee's assets or of Lessee's interest in the
      Demised Premises shall be appointed in any proceeding brought by Lessee,
      or if any such receiver, trustee or liquidator shall be appointed in any
      proceeding brought against Lessee and shall not be discharged within
      ninety (90) days after such appointment or if Lessee shall consent to or
      acquiesce in such appointment.

      13.1.4. If Lessee shall furnish financial statements to Lessor that are
      known to Lessee to be false or misleading.

13.2. LESSOR'S OPTION TO TERMINATE. In the event of a default of Lessee, Lessor
      shall have the right, at its election, then or thereafter while any such
      event of default shall continue and notwithstanding the fact that Lessor
      may have some other remedy hereunder or at law or in equity, to give
      Lessee written notice of Lessor's intention to terminate the term of this
      Lease on a date specified in such notice, which shall be not less than
      thirty (30) days after the giving of such notice, and upon the date so
      specified, the term of this Lease and the estate hereby granted shall
      expire and terminate and all rights of Lessee hereunder shall expire and
      terminate. In lieu of terminating this Lease, Lessor may elect to continue
      this Lease, in which event Lessor shall have the immediate right of
      re-entry and possession of the Demised Premises and the right to remove
      all persons and property therefrom. Should Lessor elect to re-enter as
      herein provided or should Lessor take possession pursuant to legal
      proceedings or pursuant to any notice provided for by law, Lessor may from
      time to time re-let the Demised Premises or any part thereof for such term
      or terms and at such rental or rentals and

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      upon such terms and conditions as Lessor may deem advisable, with the
      right to make repairs and alterations to the Demised Premises.

13.3. RECOVERY OF DAMAGE; TERMINATION OF LEASE. In the event of any termination
      of the term of this Lease as provided in this Article Lessee shall quit
      and surrender the Demised Premises to Lessor, and Lessor may without
      further notice re-enter and repossess the same by summary proceedings,
      ejectment or otherwise, and in any such event neither Lessee nor any
      person, claiming through or under Lessee shall be entitled to possession
      or to remain in possession of the Demised Premises but shall forthwith
      quit and surrender the Demised Premises. Upon such termination, Lessor may
      recover from Lessee: (a) the worth at the time of award of the unpaid rent
      which had been earned at the time of termination; (b) the worth at the
      time of award of the amount by which the unpaid rent which would have been
      earned after termination until the time of award exceeds the amount of
      such rental loss that Lessee proves could have been reasonably avoided;
      (c) the worth at the time of award of the amount by which the unpaid rent
      for the balance of the term after the time of award exceeds the amount of
      such rental loss that Lessee proves could be reasonably avoided; and (d)
      any other amount necessary to compensate Lessor for all the detriment
      proximately caused by Lessee's failure to perform its obligations under
      this Lease or which in the ordinary course of things would be likely to
      result therefrom. The "worth at the time of award" of the amounts referred
      to in (a) and (b) above is computed by allowing interest at an annual
      interest rate of ten percent (10%). The "worth at the time of award" of
      the amount referred to in (c) above is computed by discounting such
      amount at the discount rate of the Federal Reserve Bank of San Francisco
      at the time of award plus one percent (1%). Nothing herein contained shall
      limit or prejudice the right of Lessor, in any bankruptcy or
      reorganization or insolvency proceeding, to prove for and obtain by reason
      of such termination an amount to the maximum allowed by any bankruptcy or
      reorganization or insolvency proceedings, or to prove for and obtain by
      reason of such termination, an amount equal to the maximum allowed by any
      statute or rule of law whether such amount shall be greater or less than
      the excess referred to above. In the event that Lessee, prior to the
      occurrence of an Event of Default hereunder, exercises an option to extend
      the term of this Lease pursuant to Section 2.2 and at the time of
      commencement of the Option Term an Event of Default exists hereunder but
      not an Event of Default giving Lessor the right to terminate the option
      and cancel Lessee's exercise thereof pursuant to Section 2.2, then, for
      purposes of the preceding clause (d) of this Section 13.3, Lessor shall be
      entitled to recover from Lessee any consequential damages arising out of
      or in connection with Lessor's inability to terminate such option and
      recover possession of the Demised Premises at the expiration of the
      Primary Term or any then-existing Option Term, as the case may be.

13.4. EXPENSES OF LESSOR; CONTINUATION OF LEASE. If Lessor shall re-enter and
      obtain possession of the Demised Premises following an event of default,
      and elect to continue this Lease, Lessor shall

                                       20
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Big 5, Fontana, CA
2-12-96 (8)

      have the right, without notice, to repair or alter the Demised Premises in
      such manner as Lessor deems necessary or advisable so as to put the
      Demised Premises in good order and to make the same rentable, and shall
      have the right, at Lessor's option, to re-let the Demised Premises or any
      part thereof. Lessee agrees to pay to Lessor on demand all expenses
      incurred by Lessor in obtaining possession, and in altering, repairing and
      putting the Demised Premises in good order and condition, and in reletting
      the same, including fees of attorneys and architects, and all other
      reasonable expenses or commissions, and Lessee further agrees to pay to
      Lessor upon the rental payment dates following the date of such re-entry
      until the expiration of the term of this Lease the sums of money which
      would have been payable by Lessee as rent hereunder on said rental payment
      dates if Lessor had not re-entered and resumed possession of the Demised
      Premises deducting only the net amount of rent, if any, which Lessor shall
      actually receive (after deducting from the gross receipts the expenses,
      costs and payments of Lessor which in accordance with the terms of this
      Lease would have been borne by Lessee) in the meantime from and by any
      reletting of the Demised Premises. In addition, Lessee shall remain liable
      for all sums otherwise payable by Lessee under this Lease, and Lessor
      shall have the right from time to time to bring successive actions or
      other legal proceedings against Lessee for the recovery of such deficiency
      or expenses. The liability of Lessee herein provided shall survive the
      commencement of any action to secure possession of the Demised Premises.
      Nothing herein contained shall be deemed to require Lessor to wait to
      commence such action or other legal proceedings until the date when this
      Lease would have expired had there been no such event of default.

13.5. ADDITIONAL RIGHTS OF LESSOR. No right or remedy herein conferred upon or
      reserved to Lessor is intended to be exclusive of any right or remedy, and
      every right and remedy shall be cumulative and in addition to any other
      right or remedy given hereunder or now or hereafter existing at law unless
      otherwise provided herein. The failure of Lessor to insist at any time
      upon the strict performance of any covenant or agreement or to exercise
      any right, power or remedy contained in this Lease shall not be construed
      as a waiver or relinquishment thereof for the future. The receipt by
      Lessor of any rent or other sum payable hereunder with knowledge of the
      breach of any covenant or agreement contained in this Lease shall not be
      deemed a waiver of such breach, and no waiver by Lessor of any provision
      of this Lease shall be deemed to have been made unless expressed in
      writing and signed by Lessor. Lessor shall be entitled, to the extent
      permitted by law, to injunctive relief in case of the violation, or
      threatened violation, of any covenant, agreement, condition or provision
      of this Lease or to any other remedy allowed to Lessor by law.

13.6. ATTORNEYS' FEES AND OTHER EXPENSES. If Lessee shall be in default in the
      performance of any of its obligations under this Lease and an action shall
      be brought for the enforcement thereof in which it shall be determined
      that Lessee was in default, Lessee shall pay to

                                       21
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Big 5, Fontana, CA
2-12-96 (8)

      Lessor the expenses incurred in connection therewith including reasonable
      attorneys' fees. If Lessor shall without fault on its part be made a party
      to any litigation commenced against Lessee, and if Lessee shall not
      provide Lessor with counsel reasonably satisfactory to Lessor, Lessee
      shall pay all costs and attorneys' fees incurred or paid by Lessor in
      connection with such litigation. Lessor and lessee agree to cooperate with
      each other in a timely manner on the selection of counsel to represent
      Lessor.

                      ARTICLE 14. ASSIGNMENT AND SUBLETTING

14.1. Subject to the provisions of Section 2.2, above, relating to the option
      terms of this Lease being personal to Lessee and subject to the provisions
      of Section 4.1, above, relating to the restrictions on the use of the
      Demised Premises, Lessee may sublet up to eighty percent (80%) of the
      Demised Premises or any part thereof, or may assign its interest under
      this Lease, provided that each assignment or sublease shall expressly be
      made subject to the provisions of this Lease and further provided that
      Lessee shall remain primarily liable under the terms of this Lease. No
      assignment or sublease made as permitted by this Section shall affect or
      reduce any obligations of Lessee or rights of Lessor hereunder. Any
      assignment or subletting of the Premises during or for any Option Term
      shall be subject to the provisions of Section 14.3, hereinafter.

14.2. Notwithstanding the foregoing, and notwithstanding the provisions and
      restrictions with respect to options as set for in Section 2.2, above,
      Lessee may freely assign, sublease or transfer this Lease (i) to any
      corporation which owns or controls Lessee, (ii) to any corporation owned
      or controlled by Lessee, (iii) to any corporation owned or controlled by,
      or which is an Affiliate of any corporation which owns or controls Lessee,
      (iv) to any corporation resulting from a consolidation or to the surviving
      corporation in case of a merger, to which consolidation or merger Lessee
      shall be a party, or (v) to a corporation to which all or substantially
      all of the assets of Lessee have been sold (any such entity referred to in
      (i) through (v) above being herein referred to as an "Affiliate").

14.3. If, during any Option Term Lessee desires to assign the Lease Lessee shall
      give Lessor written notice of such intent, accompanied by the identity of
      the proposed assignee and such other information as lessor may reasonably
      request and which is in the possession of Lessee. Lessor shall then have a
      period of twenty (20) days following receipt of such notice and
      information within which to notify Lessee in writing that Lessor elects
      either (i) to terminate this Lease as of the date specified by Lessee in
      the information provided to Lessor, in which event Lessee shall be
      relieved of all liabilities hereunder except the liability to pay rent up
      to the date of such termination and any accrued charges, costs and
      expenses required to be paid by Lessee hereunder up to the date of such
      termination, and any other liabilities Lessee may have hereunder,
      including, without limitation, any indemnity obligations arising prior to
      such termination, or (ii) to permit such assignment, which

                                       22
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Big 5, Fontana, CA
2-12-96 (8)

      permission shall not be unreasonably withheld. In the event Lessee sublets
      the Premises for occupancy during an Option Term and such sublet provides
      for a rental stream in excess of that payable by Lessor to Lessee
      hereunder, than seventy five percent (75%) of such "profits" (being
      defined as all income received by Lessee from a subtenant in excess of
      remodel, brokerage and other similar costs incurred in connection with the
      transaction) shall be payable to Lessor and the remaining twenty five
      percent (25%) shall be paid to Lessee. In the event Lessee sublets the
      Premises for occupancy during an Option Term and such sublet covers fifty
      one percent (51%) or more of the Demised Premises, such sublet shall be
      deemed an assignment for purposes of this Section 14.3 and subject to
      Lessor's right to either permit the subletting or terminate this Lease.
      The provisions of this Section 14.3 shall not apply in connection with any
      subletting by Lessee (i) to any corporation which owns or controls Lessee,
      (ii) to any corporation owned or controlled by Lessee, (iii) to any
      corporation owned or controlled by or affiliated with any corporation
      which owns or controls Lessee, (iv) to any corporation resulting from a
      consolidation or to the surviving corporation in case of a merger, to
      which consolidation or merger Lessee shall be a party, or (v) to a
      corporation to which all or substantially all of the assets of Lessee have
      been sold (any such entity referred to in (i) through (v) above being
      herein referred to as an "Affiliate").

                     ARTICLE 15. - MISCELLANEOUS PROVISIONS

15.1. SUBORDINATION. In the event the Demised Premises are subject to one or
      more mortgages or deeds of trust, Lessor agrees to deliver to Lessee on or
      before the commencement of the term of this Lease a Non-Disturbance,
      Attornment and Subordination Agreement executed by each such mortgagee or
      holder of said deed of trust in the form attached hereto as Exhibit C. If
      Lessor fails to deliver said Agreement to Lessee prior to the commencement
      of the term hereof, Lessee may, at its option, defer the payment of any
      and all rental due hereunder until said Agreement is delivered to Lessee.
      During such period of deferral, said rental shall accrue without
      interest. Lessee shall pay such accrued rent in full to Lessor within
      fifteen (15) days after Lessee's receipt of said Agreement in recordable
      form fully executed by each such Beneficiary.

      15.1.1. Lessee covenants that it will execute an agreement subordinating
      this Lease to any mortgage or deed of trust subsequently placed upon the
      Demised Premises in either the form attached hereto as Exhibit C or in
      such other form as may be requested by Lessor's mortgagee provided such
      other form in no way increases Lessee's liabilities or obligations
      hereunder or diminishes Lessee's rights hereunder. Lessor covenants that
      it will execute an agreement setting forth certain information regarding
      this Lease, as well as acknowledging certain rights of Lessee and any
      lender of Lessee, in the form attached hereto as Exhibit D.

                                       23
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Big 5, Fontana, CA
2-12-96 (8)

      15.1.2. From time to time (but not more than twice in any calendar year)
      upon not less than thirty (30) days prior written notice which shall be
      accompanied by a form of estoppel statement, each party shall execute,
      acknowledge and deliver to the other a statement in writing:

            a.    certifying that this Lease is unmodified (except for any
                  amendments specifically stated) and in full force and effect
                  (or, if modified, that the same is in full force and effect as
                  modified),

            b.    setting forth the date of termination of the term of this
                  Lease and the status of the exercise of any Option Terms,

            c.    setting forth the then currently scheduled monthly rent
                  payable under the Lease and the date to or through which rent
                  has been paid,

            d.    acknowledging that there are not, to such party's knowledge,
                  any uncured defaults on the part of the other hereunder, or
                  specifying such defaults if any are claimed, and

            e.    acknowledging that such party has no claims or offsets against
                  the other party, or specifying such claims or offsets if any
                  are claimed.

      In addition to the foregoing, Lessee covenants and agrees to use good
      faith efforts to cooperate with Lessor in providing any additional
      information relating to the status of the Lease reasonably requested in
      connection with such estoppel. Any such estoppel statement may be relied
      upon by any prospective purchaser or encumbrancer of all or any portion of
      the real property of which the Demised Premises are a part.

15.2. NO MERGER. There shall be no merger of this Lease or of the leasehold
      estate hereby created with the fee estate in the Demised Premises or any
      part thereof by reason of the fact that the same person may acquire or
      hold, directly or indirectly, all or part of such fee estate and this
      Lease or the leasehold estate hereby created or any interest in this
      Lease, and this Lease shall not be terminated for any cause except as
      expressly provided in this Lease.

15.3. SURRENDER. Upon the expiration or earlier termination of this Lease,
      Lessee shall surrender the Demised Premises to Lessor in the same
      condition in which the Demised Premises was originally received from
      Lessor except as repaired, rebuilt, restored, altered or added to, as
      permitted by any provision of this Lease, and except for ordinary wear,
      tear or obsolescence. Lessee shall remove from the Demised Premises on or
      prior to such expiration or earlier termination all property situated
      thereon which is not owned by Lessor, and at its cost and expense shall
      repair any damage caused by such removal. Property not so removed shall
      become the property

                                       24
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Big 5, Fontana, CA
2-12-96 (8)

      of Lessor, and Lessor may thereafter cause such property to be removed
      from the Demised Premises and disposed of, but the cost of any such
      removal and disposition as well as the cost of repairing any damage caused
      by such removal shall be borne by Lessee.

15.4. BINDING EFFECT. This Lease may not be changed, modified or discharged
      except by a writing signed by Lessor and Lessee. All covenants, conditions
      and obligations contained in this Lease shall be binding upon and inure to
      the benefit of the respective successors and assigns of Lessor and Lessee
      to the same extent as if each successor and assign were named as a party
      to this Lease.

15.5. HEADINGS. The headings contained in this Lease have been inserted for
      convenience only and shall not have the effect of modifying, amending or
      changing the express terms and provisions of this Lease.

15.6. SUCCESSORS AND ASSIGNS. The covenants and conditions herein contained
      shall, subject to the provisions of Article 14 of this Lease, apply to and
      bind the heirs, successors, executors, administrators and assigns of all
      the parties hereto; and all of the parties hereto shall be jointly and
      severally liable hereunder.

15.7. NOTICES. All notices and demands of any kind which either party may be
      required or desire to make or serve upon the other party shall be made in
      writing and sent by certified or registered mail, return receipt
      requested, to the following addresses, which notices shall be deemed
      effective on either receipt or refusal of acceptance:

      To Lessor:  State of Wisconsin Investment Board
                  c/o Bristol Group, Inc.
                  400 Montgomery Street
                  San Francisco, California 94104
                  Attn: Jeffrey S. Kott

      Copy to:    State of Wisconsin Investment Board
                  Post Office Box 7842
                  Madison, Wisconsin 53707
                  Attention: Director of Real Estate

      To Lessee:  United Merchandising Corp.
                  2525 E. El Segundo Boulevard
                  El Segundo, California 90245
                  Attention: President or Secretary

      or to such other addresses as each party may from time to time request in
      writing as provided by the notice requirements set forth in this Section.
      From and after the date five (5) years from the commencement of the term
      of this Lease notices may also, or in lieu of the preceding requirement,
      be sent via overnight courier. Until Lessee receives written notice to the
      contrary from Lessor, rental payments hereunder shall be made payable to
      Bristol Group, Inc., at the address for Lessor set forth above.

                                       25
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Big 5, Fontana, CA
2-12-96 (8)

15.8.  LOCAL LAW TO APPLY. This Lease is governed by the law of the State of
       California and any question arising hereunder shall be construed or
       determined according to such law.

15.9.  TIME IS OF THE ESSENCE. Time is of the essence of this Lease.

15.10. No Waiver. No delay or omission in the exercise of any right or remedy of
       Lessor on any default by Lessee shall impair such right or remedy or be
       construed as a waiver.

       No act or conduct of Lessor, including, without limitation, the
       acceptance of the keys to the Premises, shall constitute an acceptance of
       the surrender of the Premises by Lessee before the expiration date of the
       Term. Only a notice from Lessor to Lessee shall constitute acceptance of
       the surrender of the Premises and accomplish a termination of the Lease.

       Lessor's consent to or approval of any act by Lessee requiring Lessor's
       consent or approval shall not be deemed to waive or render unnecessary
       Lessor's consent to or approval of any subsequent act by Lessee.

15.11. LIABILITY OF LESSOR AND RELEASE. In the event of any sale of the Demised
       Premises by Lessor, Lessor shall be and is hereby entirely freed and
       relieved of all liability under any and all of its covenants and
       obligations contained in or derived from this Lease arising out of any
       act, occurrence or omission occurring after the consummation of such
       sale. Lessor agrees to deliver to Lessee an agreement signed by any
       person or persons who may purchase all of any part of Lessor's interest
       in the Demised Premises, which agreement shall formally recognize and
       accept all of Lessor's obligations, responsibilities and duties hereunder
       occurring from and after the date of the sale. Lessor's liability
       hereunder, including any liability of Lessor prior to any transfer of the
       Premises, shall be limited to Lessor's interest in the Premises, not to
       exceed Ten Million and no/100 Dollars ($10,000,000.00), including,
       without limitation, any and all income produced therefrom and the
       proceeds of any sale and the proceeds of any insurance policies which
       cover all or any of the Premises up to, but not in excess of Ten Million
       and no/100 Dollars ($10,000,000.00). At no time shall Lessor, nor any
       trustee, officer, director, shareholder, partner, agent, representative
       or holder of any beneficial interest in Lessor have or incur any personal
       liability whatsoever with respect to this Lease.

15.12. FINANCIAL STATEMENTS. Lessee will, upon request of Lessor (but not more
       frequently than once per annum), provide its most current audited
       financial statements to Lessor prepared under generally accepted
       accounting principles consistently applied and signed by either an
       officer of Lessee or by a representative of a nationally accepted
       accounting firm.

                                       26
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Big 5, Fontana, CA
2-12-96 (8)

15.13. LATE CHARGE. If Lessee fails to pay any rent or additional charges when
       due, and such failure occurs more than one time in any calendar year,
       then, if for any subsequent late payments during such calendar year, such
       unpaid amounts shall be subject to a late payment charge equal to five
       percent (5%) of the unpaid amounts in each instance. The late payment
       charge has been agreed upon by Lessor and Lessee, after negotiation, as
       liquidated damages and a reasonable estimate of the additional
       administrative costs and detriment that will be incurred by Lessor as a
       result of any such failure to pay by Lessee, the actual costs thereof
       being extremely difficult if not impossible to determine.

15.14. LESSOR'S RIGHT TO PERFORM AND RIGHT TO ENTER. In connection with Lessor's
       right to enter the Premises to determine whether Lessee is complying with
       its obligations under Section 4.5, Lessor shall have the right to inspect
       the Premises, upon reasonable prior notice to Lessee and provided such
       inspection can be completed without interference to Lessee's use and
       enjoyment of the Premises. Lessor reserves for itself and its agents the
       right to enter the Demised Premises at all reasonable times, and upon
       reasonable prior notice to Lessee, to inspect the Demised Premises, to
       show the Demised Premises to prospective purchasers, mortgagees,
       beneficiaries, to post notices of non-responsibility, to determine
       whether Lessee is complying with its obligations under this Lease, and to
       perform any obligations, if any, required hereunder on the part of
       Lessor. Lessee hereby waives any claim for damages for any injury or
       inconvenience to or interference with Lessee's business, any loss of
       occupancy or quiet enjoyment of the Demised Premises, any right to
       abatement of rental or additional charges, or any other loss occasioned
       by Lessor's exercise of any of its rights under this Section 15.15
       provided Lessor shall act diligently and use its best efforts to minimize
       any interferences with, or interruption of, Lessee's business.

15.15. LESSEE'S QUITCLAIM. upon Lessee's receipt of the written request of
       Lessor after the expiration of the Lease and any extensions thereof, or
       upon the earlier termination thereof as provided herein, Lessee shall
       execute in recordable form and deliver to Lessor a quitclaim deed in
       favor of Lessor conveying all of Lessee's right, title and interest in
       and to the Demised Premises as defined herein.

15.16. INVALIDITY. In the event that any provision of this Lease shall be held
       invalid, void, illegal or unenforceable, such provision shall be
       severable from, and such invalidity or unenforceability shall not be
       construed to have any effect on, impair or invalidate the remaining
       provisions of this Lease which shall remain in full force and effect.

15.17. HOLD OVER. Should Lessee hold over the Demised Premises, or any part
       thereof, after the expiration or earlier termination of the term of this
       Lease, unless otherwise agreed to in writing, such holding over shall
       constitute and be construed as a tenancy from month to month only,
       cancellable upon thirty (30) days written

                                       27
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Big 5, Fontana, CA
2-12-96 (8)

            notice. All obligations and duties imposed by this Lease upon Lessor
            and Lessee shall remain the same during any such period of
            occupancy, with the exception that the minimum rent for such hold
            over tenancy shall be increased to one hundred fifty percent (150%)
            of the minimum rent during the last year of the term or extended
            term hereof. Acceptance of rental by Lessor shall not result in a
            renewal of this Lease. If Lessee fails to surrender the Premises
            upon the expiration of this Lease despite demand to do so by Lessor,
            Lessee shall be liable for losses directly incurred by Lessor in
            connection with such holding over.

      IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
day and year first above written.

                                           State of Wisconsin Investment Board,
                                           an independent agency of the
                                           State of Wisconsin

                                           By /s/ Patricia Lipton
                                              ----------------------------------
                                              Patricia Lipton
                                           Title: Executive Director

                                           UNITED MERCHANDISING CORP.,
                                           a California corporation

                                           By Steven G. Mills
                                              ----------------------------------
                                                                       President

                                           By Kathleen Reid Seidner
                                              ----------------------------------
                                                                       Secretary

                                                                          Lessee

                                       28
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Big 5, Fontana, CA
2-12-96 (8)

                                    Exhibit A

                                Legal Description

PARCEL NO. A:

THE NORTH 208 FEET OF THE WEST 208 FEET OF LOT 8 OF ARROWHEAD VINEYARD TRACT NO.
1, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER
PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 69, RECORDS OF SAID COUNTY.

TOGETHER WITH THAT PORTION OF REDWOOD AVENUE (MC GUIRE AVENUE) ABANDONED BY
RESOLUTION NO. 90-210 OF THE CITY COUNCIL OF FONTANA, RECORDED NOVEMBER 5, 1990,
INSTRUMENT NO. 90-443227, OFFICIAL RECORDS, DESCRIBED AS FOLLOWS:

BEING A PORTION OF REDWOOD AVENUE, FORMERLY KNOWN AS COLORADO AVENUE, OF
ARROWHEAD VINEYARD TRACT NO. 1, IN THE CITY OF FONTANA, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGES
69, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE WEST LINE OF LOT 8 OF SAID TRACT, WHICH BEARS SOUTH
00 DEG. 15' 57" WEST, 46.93 FEET FROM THE NORTHWEST CORNER OF SAID LOT; THENCE
SOUTH 00 DEG. 15' 57" WEST, 110.65 FEET ALONG SAID WEST LINE TO A POINT ON A
NON-TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 368.00 FEET, A RADIAL
LINE OF SAID CURVE THROUGH SAID POINT BEARS SOUTH 82 DEG. 56' 41" WEST, THENCE
NORTHERLY 47.02 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 7 DEG. 19' 16"
TO A LINE THAT IS PARALLEL WITH AND 3.00 FEET WEST OF THE WEST LINE OF SAID LOT;
THENCE NORTH 00 DEG. 15' 57" EAST, 60.74 FEET ALONG SAID PARALLEL LINE; THENCE
NORTH 45 DEG. 10' 12" EAST, 4.25 FEET TO THE POINT OF BEGINNING.

PARCEL NO. B:

LOT 13, TRACT NO. 13596, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE
OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 212 OF MAPS, PAGES 99 THROUGH 105,
INCLUSIVE, RECORDS OF SAID COUNTY, AND AS AMENDED BY CERTIFICATE OF CORRECTION
RECORDED OCTOBER 31, 1990, INSTRUMENT NO. 90-435126, OFFICIAL RECORDS.

<PAGE>

                                 [PLAN DRAWING]

                                    EXHIBIT B

<PAGE>

Big 5, Fontana, CA
12-28-95 (1)

Recorded at the request of
UNITED MERCHANDISING CORP., and
to be mailed after recording to:

United Merchandising Corp.
Attn.: W. Huff
Legal Department
P.O. Box 92088
Los Angeles, California 90009

                                    EXHIBIT C

                           NON-DISTURBANCE, ATTORNMENT

                           AND SUBORDINATION AGREEMENT

      United Merchandising Corp., a California corporation, ("Lessee") has
entered into a lease (the "Lease") dated March 5, 1996, with

("Lessor") of the premises commonly known as , and more particularly described
in Exhibit A attached hereto (the "Demised Premises").

("Beneficiary") is the holder of the beneficial interest under a Deed of Trust
dated____________________, recorded in the Official Records in the County of ,
State of______________________________as Instrument No. ______________________
in Book No. __________Page _________ on ____________________________on said
Demised Premises (the "Deed of Trust"). Lessee and Beneficiary desire hereby to
establish certain rights, safeguards, obligations and priorities with respect to
their respective interests by means of the following non-disturbance, attornment
and subordination agreements.

      NOW, THEREFORE, the parties hereto covenant and agree as follows:

1.    Provided the Lease is in full force and effect and there are no defaults
      by Lessee in the payment of rent thereunder, then:

      1.1.  The right of possession of Lessee to the Demised Premises and
            Lessee's rights arising out of the Lease shall not be affected or
            disturbed by Beneficiary in the exercise of any of its rights under
            the Deed of Trust or the Note secured thereby.

      1.2.  Lessee shall not be named in any foreclosure action related to the
            Deed of Trust.

                                      C-1-
<PAGE>

Big 5, Fontana, CA
12-28-95 (1)

      1.3.  In the event that Beneficiary or any other person acquires title to
            the Demised Premises pursuant to the exercise of any remedy provided
            for in the Deed of Trust or under the laws of the state in which the
            Demised Premises are located, the Lease shall not be terminated or
            affected by said foreclosure or sale resulting from any such
            proceeding; and Beneficiary hereby covenants that any sale by it of
            the Demised Premises pursuant to the exercise of any rights and
            remedies under the Deed of Trust or otherwise, shall be made subject
            to the Lease and the rights of Lessee thereunder; and Lessee
            covenants and agrees to attorn to Beneficiary or such other person
            as its new lessor; and the Lease shall continue in full force and
            affect as a direct lease between Lessee and Beneficiary or such
            other person, as Lessor, upon all the terms, covenants, conditions
            and agreements set forth in the Lease between Lessee and Lessor.
            However, in no event shall Beneficiary or such person be:

            1.3.1. liable for any act or omission of Lessor, except for those
                   acts or omissions for which Lessee has given Beneficiary
                   notice thereof prior to said foreclosure or sale;

            1.3.2. bound by any payment of rent made by Lessee for periods
                   extending beyond the date of said foreclosure or sale except
                   for those rental payments provided for under the Lease;

            1.3.3. bound by any amendment to the Lease made subsequent to the
                   date of this Agreement without the written consent of
                   Beneficiary, which consent shall not be unreasonably withheld
                   or withheld for the purpose of effectuating a change in terms
                   to the Deed of Trust. Beneficiary hereby consents to any such
                   subsequent amendment if the primary purpose of such amendment
                   is to provide for the expansion or remodeling of the Demised
                   Premises or an extension of the primary term or option
                   periods, so long as there is no decrease in the minimum rent
                   payable under the Lease.

            Notwithstanding the foregoing, the rights and obligations of lessee
            and Beneficiary, respectively, upon such attornment shall, to the
            extent of the then remaining balance of the term of the Lease,
            including any renewals or extensions thereof, be the same as now set
            forth in the Lease and by this reference the Lease is incorporated
            herein as part of this Agreement.

      1.4.  Beneficiary agrees that in the event of casualty or condemnation,
            insurance or condemnation proceeds shall be used for the purpose of
            reconstruction in the circumstances set forth in the Lease and
            subject to the provisions of the Lease.

2.    The Lease shall be subject and subordinate to the lien of the Deed of
      Trust and to all the terms, conditions and provisions thereof, to all
      advances made or to be made thereunder, and to any renewals, extensions,

                                      C-2-
<PAGE>

Big 5, Fontana, CA
12-28-95 (1)

      modifications or replacements thereof, not inconsistent with Paragraph 1
      of this Agreement.

3.    Any notices or other communication required or desired to be given by one
      party to the other party hereto shall be given in writing by mailing the
      same by certified United States Mail, return receipt requested, postage
      prepaid, addressed as follows:

      To Lessee:          United Merchandising Corp.
                          2525 E. El Segundo Boulevard
                          El Segundo, California 90245
                          Attention: President or Secretary

      To Beneficiary:     _________________________________

                          _________________________________

                          _________________________________

                          _________________________________

      or to such other addresses as the respective parties may from time to time
      designate by notice given as provided in this Agreement.

4.    This Agreement may not be modified other than by an agreement in writing
      signed by the parties hereto or by their respective successors in
      interest.

5.    This Agreement shall inure to the benefit of and be binding upon the
      parties hereto and their successors and assigns.

6.    The foregoing provisions shall be self operative and effective without the
      execution of any further instruments on the part of either parry hereto.

7.    Should Beneficiary cease to have a beneficial interest under the Deed of
      Trust, Beneficiary shall give prompt written notice to Lessee of the
      reconveyance, assignment or other form of termination of said beneficial
      interest.

                                      C-3-
<PAGE>

Big 5, Fontana, CA
12-28-95 (1)

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed this _________ day of ________, 19_______.

                                           By___________________________________
                                           Title:

                                           By___________________________________
                                           Title:

                                                                     BENEFICIARY

                                           UNITED MERCHANDISING CORP., a
                                           California corporation

                                           By___________________________________
                                                                       President

                                           By___________________________________

                                                                       Secretary

                                                                          LESSEE

                                      C-4-
<PAGE>

                                    Exhibit D

                         FORM OF LANDLORD'S CERTIFICATE

                               _____________,199__

[LANDLORD]
______________
______________

      Re:   Lease dated March 5, 1996, as amended(the "Lease"), between _______,
            a _________ (the "Landlord"), and United Merchandising Corp., a
            California corporation (the Tenant")

            Premises:    BIG 5 Fontana Warehouse
                         7351 McGuire Avenue
                         Fontana, California (the "Premises")

Gentlemen:

The undersigned Landlord, the owner of the above described Premises and the
holder of the Lease, has been advised by Tenant that Tenant has granted a
security interest in personal property located on the Premises to General
Electric Capital Corporation ("GE Capital"), as agent for itself and certain
other lenders under Credit Agreement among Tenant, GE Capital and the other
lenders party thereto, and GE Capital, as agent. The undersigned for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the undersigned, hereby consents, agrees, certifies and confirms as follows:

1.    The information set forth below is correct:

      a.    Commencement Date
            of the Lease:                                [Date]

      b.    Current annual
            minimum rent payable:                        [$Amount]

      c.    Month and date through which minimum
            rent, and all other sums due and payable
            to Landlord, have been paid:                 [Date]

2.    The Lease is in full force and effect and represents the entire agreement
      between Landlord and Tenant, and the Lease as originally executed has not
      been modified, changed, altered or amended in any way.

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-1
<PAGE>

[LANDLORD]

_______________,199___
2

3.    Tenant is not in default under the Lease, and to the best of Landlord's
      knowledge, there has not occurred any event which, by lapse of time or
      otherwise, would constitute a default by Tenant under the Lease.

4.    Landlord hereby consents to the granting by Tenant of any liens on
      or security interests in Tenant's personal property located on the
      Premises. Landlord agrees to permit the entry and occupancy, by the
      holders ("Holder") of such liens or security interests and their
      representatives, onto the Premises for a period not exceeding sixty (60)
      consecutive days for the proposes of removing, selling or otherwise
      disposing of merchandise, inventory, equipment, furniture, trade fixtures
      and other personal property of Tenant (but excluding fixtures in which
      Landlord has an interest as hereinafter described) subject to such liens
      or security interests so long as Holder agrees: (a) to promptly repair any
      physical damage to the Premises actually caused by the conduct of such
      removal (ordinary wear and tear excluded); (b) to pay Landlord the rent
      and other monetary amounts due under the lease or, in the case where the
      Lease has been terminated, those amounts that would have became due under
      the Lease if the Lease were still in effect (including, without
      limitation, any amounts due for payment of taxes, utilities or
      maintenance) for the actual period of occupancy by such holder, pro-rated
      on a per diem basis determined on a 30-day month (provided that such
      amounts paid to Landlord would exclude any adjustments under the Lease for
      default, holdover status or other similar charges, if any); and (c) to
      provide and retain liability and property insurance coverage and utilities
      to the extent required by the Lease; provided, that (i) if Holder is
      prohibited, by reason of the commencement of any bankruptcy case or
      insolvency proceedings by or against Tenant, from entering upon the
      Premises or from enforcing its liens or security interest, then, at
      Holder's option, such 60-day period shall be stayed during the period of
      such prohibition and shall continue thereafter for the number of days
      remaining in such period, and (ii) Holder would not be liable for any
      delinquent rent or other amounts owing by Tenant under the Lease or for
      any diminution in value of the Premises caused by the absence of any such
      personal property actually removed or by any necessity of replacing such
      personal property. Notwithstanding anything herein to the contrary, in no
      event shall Holder's right to enter or occupy the Premises pursuant to
      this Certificate extend beyond sixty (60) days from the date of
      termination of the term of the Lease, and at any time thereafter Landlord
      shall have the right to have any personal property of Tenant that may be
      located upon the Premises removed from the Premises in accordance with the
      terms of the Lease and applicable law. Any reference in this Certificate
      to Tenant's "trade fixtures" or "personal property" shall not mean or
      include any fixtures or equipment which are an integral part of the
      buildings and improvements comprising the Premises for purposes of their
      use and operation as an office, warehouse and distribution facility or
      which cannot be

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-2
<PAGE>

[LANDLORD]

__________,199 ___
3

      removed without material damage to such buildings and improvements (which,
      by way of example, shall include all HVAC and mechanical systems, conveyor
      systems, loading docks, load leveler systems, carpeting and wall
      coverings), and, as used herein, any references to Tenant's "fixtures" or
      "personal property" shall mean and be limited to those items that are
      attached to or used in the buildings and improvements comprising the
      Premise solely for the purpose of Tenant conducting its business therein
      and which can be removed without material damage to such buildings and
      improvements (including, by way of example, Tenant's satellite
      communication equipment, music and intercom systems, security system and
      racking systems).

5.    With respect to any financing provided by any bank or other institutional
      lender or investor to Tenant now or hereafter, existing, and which is
      secured by any such personal property, Landlord hereby subordinates to
      any lien or security interest securing such financing, any statutory or
      contractual lien that Landlord may have with respect to the merchandise,
      inventory, furniture, trade fixtures and other personal property of
      Tenant, whether now located on or about the Premises or hereafter brought
      thereout.

6.    No action to which Landlord consents under this document shall constitute
      a default under the Lease, permit Landlord to terminate the Lease or
      reenter or repossess the Premises or otherwise provide the basis for the
      exercise of any remedy by Landlord.

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-3
<PAGE>

[LANDLORD]

______________,199__
4

7.    Landlord hereby agrees to provide GE Capital, concurrently with the
      issuance to Tenant, a copy of all notices of default delivered to Tenant.
      Landlord further agrees to accept from GE Capital any payment or
      performance tendered or made by GE Capital to cure any such default
      (including, without limitation, all payment defaults), it being understood
      that GE Capital shall have no obligation to cure any such default.

            Notices to GE Capital should be sent to:

            Mr. Steven C. Bierman
            General Electric Capital Corporation
            350 South Beverly Drive, Suite 200
            Beverly Hills,California 90212

                                           Sincerely,

                                           UNITED MERCHANDISING CORP.

                                           Kathleen Reid-Seidner
                                           Vice President and Secretary

Acknowledged this ____day of__________, 199_

WITNESSES:                                 LANDLORD:

____________________                       ____________________

____________________                       By:________________

                                           Title:_____________

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-4

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