Document:

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                                                                   EXHIBIT 10.29

                            STANDARD LEASE AGREEMENT

                                     between

                                    SINV, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY
                                   as Landlord

                                       and

                        SOURCE-HUCK STORE FIXTURE COMPANY
                             A DELAWARE CORPORATION

                                    as Tenant

                                October 31, 2001

<PAGE>

                            STANDARD LEASE AGREEMENT

         THIS STANDARD LEASE AGREEMENT ("Lease") is made, entered into and
effective this 31st day of October 2001 by and between SINV, LLC, a Delaware
limited liability company ("Landlord), and SOURCE-HUCK STORE FIXTURE COMPANY, a
Delaware corporation ("Tenant").

                       SUMMARY OF BASIC LEASE INFORMATION
<Table>
<S>    <C>                                  <C>
1.     Landlord:                            SINV, LLC
                                            c/o BENTLEYFORBES
                                            2049 Century Park East, Suite 2150
                                            Los Angeles, California 90067
                                            Attn: MaryBeth Heydt
                                            Telephone: (310) 282-8000
                                            Facsimile: (310) 282-8585
                                            E-Mail: marybeth@bentleyforbes.com

2.     Tenant:                              Source-Huck Store Fixture Company
                                            c/o The Source Information Management Company
                                            Two City Place Drive, Suite 380
                                            St. Louis, Missouri 63141
                                            Attn.: W. Brian Rodgers
                                            Telephone (314) 995-9040
                                            Facsimile: (314) 995-9122
                                            E-Mail: brodgers@sorc-info.com

3.     Property:                            2025 Kansas
                                            Carson City, Nevada 89701

4.     Primary Term:

       a.    Length of Primary Term:              20 years, subject to termination right
                                                  at the end of 180th month

       b.    Commencement Date:                   October 31, 2001

       c.    Expiration Date:                     October 31, 2021

5.     Basic Rent:
</Table>

<Table>
<Caption>
             Period During                         Annualized Basic          Monthly Installment
             Primary Lease Term                          Rent                   of Basic Rent
             --------------------------------- -------------------------  ------------------------
<S>                                            <C>                        <C>
             3 years                                 $455,524.00                  $37,960.33

             Increases every three
             years based on CPI
</Table>

<Table>
<S>    <C>                                  <C>
6.     Security Deposit:                    None

7.     Option to Extend:                    five (5) options to extend for five
                                            (5) years each.

8.     Permitted Use:                       As provided in Section 1.4

9.     Address for Payment:                 Wire Instructions for Escrow Agent in accordance with
                                            Escrow Agreement.
</Table>

<PAGE>

                            STANDARD LEASE PROVISIONS

ARTICLE 1. PROPERTY.

         1.1 DESCRIPTION OF THE PROPERTY. The Property consists of one tract of
land located in Carson City, Nevada as more particularly described on EXHIBIT A
(the land described above, together with all rights, interests, easements,
rights of way and appurtenances related thereto, shall be referred to as the
"Land"); and (ii) the building and any other improvements existing or to be
constructed on the Land, together with all fixtures and equipment therein owned
by Landlord and used in the operation of the same (the "Improvements").

         1.2 DEMISE OF THE PROPERTY. On all of the terms and conditions of this
Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Property.

         1.3 CONDITION OF THE PROPERTY. Landlord acquired the Property on the
Commencement Date and for the period of at least two (2) years prior to the
Commencement Date, Tenant owned, occupied and operated the Property.

         Tenant represents that it has examined the title of the Property, the
physical condition of the Property, environmental studies and reports of the
Property, and the economic feasibility of conducting Tenant's business in and
from the Property. Tenant has determined that the same are satisfactory to
Tenant, and Tenant accepts the Property on an "AS-IS, WHERE-IS" basis, subject
to (a) the rights of any parties in possession and the existing state of the
title as of the Commencement Date, (b) any state of facts which an accurate
survey or physical inspection of the Property might show, (c) all zoning
regulations, restrictions, rules and ordinances, building restrictions and other
laws and regulations now in effect or hereafter adopted by any governmental
authority having jurisdiction over the condition of any buildings, structures
and other improvements located on the Property, without representation or
warranty by Landlord.

         TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER
OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE
DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE PROPERTY, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO
ITS FITNESS FOR USE OR PURPOSE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR
PURPOSE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR
PATENT, AS TO LANDLORD'S TITLE THERETO, OR AS TO VALUE, COMPLIANCE WITH
SPECIFICATIONS, LOCATION, USE, CONDITION, MERCHANTABILITY. QUALITY, DESCRIPTION,
DURABILITY OR OPERATION, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO
BE BORNE BY TENANT.

         Landlord shall not be obligated to provide or pay for any improvement
work or services related to the Property. Tenant acknowledges that the Property
is of its selection and to its specifications, and that the Property has been
inspected by Tenant and is satisfactory to it. In the event of any defect or
deficiency in any of the Property of any nature, whether patent or latent,
Landlord shall not have any responsibility or liability with respect thereto or
for any incidental or consequential damages (including strict liability in
tort).

<PAGE>

         1.4 USE OF THE PROPERTY.

             1.4.1 Tenant is currently operating the Premises for the purpose of
operating a warehouse/distribution/manufacturing center and may use and operate
it for any lawful purpose ("Intended Use"). Tenant agrees to remain open for
business and to operate the Intended Use in all or substantially all of the
Premises during the Term. Notwithstanding the foregoing, in no event shall the
Premises be used for or associated with a pornographic shop, adult book store,
or massage parlor or any change from current usage which would (i) have a
material adverse effect on the value of the Premises, (ii) increase (when
compared to the Intended Use) the likelihood that Tenant, Landlord or Lender
would incur liability under any provisions of any Environmental Laws
(hereinafter defined in Section 4.5), or (iii) result in or give rise to any
material environmental deterioration or degradation of the Premises, including
without limitation, mining or the removal of oil, gas or minerals. Tenant shall
not create or suffer to exist any public or private nuisance, hazardous or
illegal condition or waste on or with respect to the Premises. Tenant shall not
use, occupy or permit any of the Premises to be used or occupied, nor do or
permit anything to be done in or on any of the Premises, in a manner which would
(A) make void or voidable any insurance which Tenant is required hereunder to
maintain then in force with respect to any of the Premises, or (B) affect the
ability of Tenant to obtain any insurance which Tenant is required to furnish
hereunder, or (C) impair Landlord's title to the Premises, or in such manner as
might reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or third Persons, or of implied dedication of
the Premises or any portion thereof. Except as set forth herein and specifically
authorized by this Lease, no action by Landlord shall be construed to mean that
Landlord has granted to Tenant any authority to do any act or make any agreement
that may create any such third party or public right, title, interest, lien,
charge or other encumbrance upon the estate of the Landlord in the Premises.

             1.4.2 Tenant shall not conduct its business operation in the
Property unless and until (and only during such time as) all necessary
certificates of occupancy, permits, licenses and consents from any and all
appropriate governmental authorities have been obtained by Tenant and are in
full force and effect.

             1.4.3 Tenant shall comply with, and Tenant's rights and obligations
under the Lease and Tenant's use of the Property shall be subject and
subordinate to, all recorded easements, covenants, conditions, and restrictions
affecting the Property.

ARTICLE 2. TERM.

         2.1 PRIMARY TERM. On the terms and condition of this Lease, Tenant
shall have and hold the Property for the Primary Term described in the Summary
of Basic Lease Information unless this Lease is sooner terminated as expressly
provided herein. The phrase "term of this Lease" or "term hereof' means the
Primary Term, plus any Option Terms (defined below) with respect to which the
right has been exercised. The term "Lease Year" shall mean such successive
period of twelve (12) consecutive calendar months commencing on the Commencement
Date.

         2.2 OPTION TERM.

             2.2.1 Option Right. Landlord grants the tenant named in this Lease
or any permitted assignee or sublessee pursuant to Section 8.8 (the "Original
Tenant") five (5) options (the "Options" or a "Option") to extend the term of
the Lease for the period of five (5) years each (each, an 'Option Term"). Each
Option shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, there is not a continuing Event of Default

<PAGE>

hereunder, and there has not previously been an Event of Default beyond any
applicable notice and cure period more than twice. Upon the proper exercise of
an Option, and provided that, as of the end of the Primary Term or applicable
Option Term, there is not a continuing Event of Default under the Lease, and
there has not previously been an Event of Default beyond any applicable notice
and cure period under this Lease more than twice, the term of this Lease shall
be extended for a period of five (5) years. The rights contained in this Section
2.2 shall be personal to the Original Tenant and permitted assignee pursuant to
Section 8.8 and may only be exercised only if the Original Tenant or permitted
assignee pursuant to Section 8.8 occupies the entire Property.

             2.2.2 Option Rent. The Basic Rent payable during each Option Term
(the "Option Rent") shall be equal to ninety percent (90%) of the Fair Rental
Value, but in no event less than 60% of the current Basic Rent.

             2.2.3 Exercise of Options. The Options contained in this Section
2.2 shall be exercised by Tenant, if at all, only in the following manner: (i)
Tenant shall deliver written notice to Landlord not more than twelve (12) months
nor less than six (6) months prior to the expiration of the Primary Term or
current Option Term, stating that Tenant is irrevocably exercising the Option to
extend the Primary Term or the Option Term.

             2.2.4 Non-Exercise of Options. If Tenant does not exercise an
Option in a timely manner, the Option (and any remaining future Options), shall
all automatically expire. Landlord then shall have the right during the
remainder of the Primary Term or current Option Term to advertise the
availability of the Property for sale or reletting and to erect upon the
Property signs appropriate for the purpose of indicating such availability;
provided, that such signs do not unreasonably interfere with the use of the
Property by Tenant.

             2.2.5 Purchase Option. Provided that Tenant is not in default,
Tenant shall have the option to purchase the Property at the expiration of the
Primary Term (including any early termination pursuant to Section 2.2.6) or any
Option Term by delivering written notice to Landlord of Tenant's irrevocable
exercise of such purchase option prior to 6 months prior to such expiration. If
Tenant exercises the purchase option other than in connection with the
cancellation of the Lease pursuant to Section 2.2.6, the purchase price will be
90% of the Fair Market Value. If Tenant exercises the purchase option in
connection with the cancellation of the Lease pursuant to Section 2.2.6, the
purchase price will be the greater of the (i) Fair Market Value of the Property
or (ii) $4,018,327.98. The purchase price for the Property will be payable in
cash at closing, which shall occur within five (5) days prior to the expiration
of the current term of the Lease. At closing, Landlord will convey the Property
by special warranty deed (or local equivalent thereof), subject to no liens,
charges or encumbrances other than any matters affecting title existing when
Landlord acquired thc Property (excluding any encumbrances created by Landlord),
any matters affecting title created under or agreed to by Tenant, liens for
taxes and other assessments which are the responsibility of Tenant hereunder,
and zoning and other similar matters imposed by governmental bodies. Tenant
shall be responsible for all closing costs (including transfer taxes) and shall
assume all obligation for real property taxes. Tenant shall receive a credit
against the purchase price for the principal and interest outstanding on the
Note as of the date of Closing (unless such amount has already been applied
pursuant to Section 2.2.6).

             2.2.6 Cancellation Option. Tenant shall have the option to cancel
the Lease on the last day of the 180th month of the Primary Term ("Cancellation
Date") by delivering written notice to Landlord of its irrevocable election to
cancel the Lease on or before the last day of the 162nd month of the Primary
Term. If Tenant exercises its option to cancel the Lease, it shall pay Landlord
a cancellation fee on the Cancellation Date equal to the greater of (i) 50% of
the annual Basic Rent for the Lease Year in

<PAGE>

which the Cancellation Date occurs, or (ii) the principal and interest
outstanding on the Note as of the date of Closing (treating the Cancellation
Date as if it was a Closing as defined in the Note.)

ARTICLE 3. RENT.

             3.1.1 INITIAL THREE YEARS OF PRIMARY TERM. Tenant covenants to pay
to Landlord, during the initial three (3) years of the Primary Term of this
Lease, monthly in advance the amount of Basic Rent set forth in the Summary of
Basic Lease Provisions. Tenant unconditionally and irrevocably agrees to pay the
Basic Rent by wire transfer of Federal Funds on the first day of each month
("Basic Rent Payment Date") directed to the address, entity, location or lockbox
set forth in the Summary of Basic Lease Provisions. Landlord may change the
address, entity, location or lockbox for the payment of Rent by providing
written notice of such change to Tenant. If the Commencement Date is other than
the first day of a month, Tenant shall pay landlord a pro-rated portion of the
initial month's Basic Rent; Basic Rent for the month including the Termination
Dale will be pro rated if the Termination Date does not fall on the last day of
the month.

             3.1.2 CPI ADJUSTMENT. Effective the first day of the fourth year of
the Primary Term ("First Rent Adjustment Date"), and on every three-year
anniversary of the First Rent Adjustment Date during the Primary Term, Basic
Rent shall be increased by any increase in the Consumer Price Index expressed as
a percentage from the Commencement Date through the date of adjustment (the "CPI
Change"), but in no event shall such adjustment exceed the Estimated Change (as
defined in Section 3.1.3 below). The CPI Change shall be applied to the Basic
Rent. The "Consumer Price Index" means the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, United States City Average, all items (1982-1984=100). If
such index is no longer published, then Landlord shall designate a successor or
replacement nationally recognized index of substantially equivalent reliability
and objectivity. The Consumer Price Index in effect for any given adjustment
date shall be deemed to or refer to the Consumer Price Index last published
before such date. The parties agree that the Consumer Price Index as of the
Commencement Date for these purposes is 178.3.

             3.1.3 INITIAL ADJUSTMENT. Commencing on each such adjustment date
described in Section 3.1.2, the Basic Rent shall be automatically increased,
such increase to equal the product of three percent (3.0%) multiplied by the
number of Lease Years which have elapsed from the Commencement Date through the
subject adjustment date, as an estimate of the actual change in effect as set
forth inSection3.l.2 above ("Estimated Change"). The Estimated Change shall be
applied to the amount of the Basic Rent. As soon as practicable following the
subject adjustment date, the actual change in the Consumer Price Index as
calculated in Section 3.1.2 shall be determined and reconciled with the
Estimated Change. In the event the Estimated Change has resulted in Lessee
paying excessive Basic Rent, then such excess shall be paid by Lessor to Lessee
or credited to future Basic Rent, at the option of Landlord.

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

<PAGE>

this Lease, including without limitation, all fines, penalties, interest and
costs that may be added by the party to whom such payment is due for nonpayment
or late payment thereof.

         Tenant acknowledges that the Property and any income derived therefrom
is Landlord's sole asset. The rents to be paid by Tenant to Landlord under this
Lease will be used by Landlord to, among other things, satisfy Landlord's
obligations under the loan documents evidencing financing on the Property. It
is, therefore, the parties' objective to provide for an absolute "Bond Type"
triple net lease to Landlord; the Basic Rent (as hereinafter defined) payable by
Tenant hereunder shall be an absolute "Bond Type" triple net return to Landlord
and Tenant shall pay all costs and expenses relating to the Property and
Tenant's business carried on therein.

         3.3 LATE CHARGE. If Tenant fails to pay any installment of Basic Rent
or other payment due under this Lease within five (5) days after the date due,
Tenant shall pay to Landlord, on demand, as Additional Rent, a late charge equal
to three percent (3%) of the amount due (the "Late Charge") plus any attorneys'
fees incurred by Landlord by reason of Tenant's failure to pay rent or any other
charges when due hereunder to compensate Landlord for the extra cost incurred as
a result of such late payment. The parties agree that the Late Charge represents
a fair and reasonable estimate of the administrative, processing and accounting
costs that Landlord will incur as a result of a late payment by Tenant. The Late
Charge shall be deemed to be Additional Rent, and the right to require it shall
be in addition to all of Landlord's other rights and remedies for a payment
failure of Tenant, including the right to charge interest on the past due
amount.

         3.4 TRUE LEASE. Landlord and Tenant agree that this Lease is a true
lease and does not represent a financing arrangement. Each party shall reflect
the transactions represented by applicable books, records and reports
(including, without limitation, income tax filings) in a manner consistent with
"operating lease" treatment rather than "financing" treatment.

         3.5 NET LEASE; NO TERMINATION.

             3.5.1 This is an absolutely net lease to Landlord. It is the intent
of Landlord and Tenant that the Basic Rent payable under this Lease shall be an
absolutely net return to Landlord and that Tenant shall pay all costs and
expenses of every kind and nature relating to the Property and the business
carried on therein, unless otherwise expressly provided in this Lease. Any
amount or relating to the Property, which is not expressly declared to be that
of Landlord shall an obligation of Tenant to be performed by Tenant at Tenant's
expense. Basic Rent, and all other sums payable hereunder by Tenant, shall be
paid without notice (except as expressly provided as described in Article 7 of
this Lease), demand, set-off, counterclaim, abatement suspension, deduction or
defense.

             3.5.2 Except as otherwise provided herein, This Lease shall not
terminate nor shall Tenant have any right to terminate this Lease (except as
otherwise expressly provided in Section 2.2.6), nor shall Tenant be entitled to
any abatement or reduction of rent under this Lease, nor shall the obligations
of Tenant under this Lease be affected by reason of (i) any damage to or
destruction of all or any part of the Property from whatever cause; (ii) the
taking in whole or in part of the Property or any portion thereof by
condemnation, requisition or otherwise except as provided in Article 7; (iii)
any abandonment of the Property by Tenant or (iv) any other cause whether
similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding. It is the intention of the Landlord and Tenant that
the obligations of Tenant under this Lease shall be separate covenants and
agreements, that the Basic Rent, the Additional Rent and all other sums payable
by Tenant under this Lease shall continue to be payable in all events and that
the obligations of Tenant under this Lease shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to
Article 7 of this Lease.

<PAGE>

             3.5.3 Tenant agrees that it will remain obligated under this Lease
in its terms, and it will not take any action to terminate, rescind or avoid
this Lease readjustment, liquidation, dissolution, or winding-up or other
proceeding affecting Landlord or its successors-in-interest or (ii) any action
with respect to this Lease which may be taken receiver of Landlord or its
successors-in-interest or by any court in any such proceeding.

             3.5.4 Tenant waives all rights which may now or hereafter be
conferred by law (i) except as provided herein to quit, terminate or surrender
this Lease or the Property or any part thereof, or (ii) to any abatement,
suspension, deferment or reduction of the Basic Rent, Additional Rent or any
other sums payable under this Lease, except as otherwise provided in Article 7
of this Lease.

         3.6 QUIET ENJOYMENT. So long as Tenant shall pay the Basic Rent and
Additional Rent as the same become due and shall fully comply with all of the
terms of this Lease and fully perform its obligations hereunder, Tenant shall
peaceably and quietly have, hold, and enjoy the Property for the term hereof,
free of any claim or other action by Landlord.

         3.7 GUARANTY. The Source Information Management Company dba Source
InterLink Companies shall guaranty the obligations of Tenant hereunder pursuant
to the Guaranty Agreement attached as Exhibit E hereto.

         3.8 SECURITY DEPOSIT. If Tenant fails to make any Basic Rent payment
due hereunder when due more than once in any twelve (12) month period, then
Landlord, in addition to any rights it may have under any other provision of
this Lease, shall have the right to require Tenant to deposit an amount equal to
one (1) month's Basic Rent as a security deposit hereunder. Any amounts
deposited as a security deposit will be non-interest bearing and may be
commingled with Landlord's other funds. Landlord may apply the security deposit
to cure any default hereunder, and if it so applies the funds, Tenant shall,
upon Landlord's written demand, restore the security deposit to the level
required to be maintained hereunder. Any remaining balance of the security
deposit will be refunded to Tenant within ten (10) days after expiration or
termination of the Lease.

ARTICLE 4. PAYMENT OF IMPOSITIONS, TAXES AND ASSESSMENTS; COMPLIANCE WITH LAWS;
           ENVIRONMENTAL MATTERS.

         4.1 PAYMENT OF IMPOSITIONS. Tenant shall pay or discharge all
Impositions (as hereinafter defined) when due, provided that real property taxes
are payable in installments pursuant to Section 4.2 hereof. Notwithstanding the
foregoing provision of this Section 4.1, Tenant shall not be required to pay any
franchise, corporate, estate, inheritance, succession, transfer (other than
transfer taxes, recording fees, or similar charges payable in connection with a
conveyance hereunder to Tenant), income, excess profits or revenue taxes of
Landlord hereunder. Tenant agrees to furnish to Landlord evidence of the payment
of the Impositions described in Section 11.10.3(a) within thirty (30) days after
payment thereof Tenant agrees to furnish evidence of payment of other
Impositions within fifteen (15) days of Landlord's request therefore. Tenant
hereby assumes all obligations for Impositions accrued prior to the Commencement
Date. All Impositions due for the year in which the Termination Date occurs
shall be pro rated between Landlord and Tenant to account for the period of the
term of the Lease within such year.

         4.2 REAL PROPERTY TAXES. Tenant shall deposit with Landlord on a
monthly basis, on the first day of each month an amount equal to 1/12 of the
total amount of real property taxes estimated by Landlord which will be due for
each year during the term of the Lease. The amount deposited with Landlord shall
not limit Tenant's liability for the amount of such taxes if Tenant has not
deposited a sufficient amount to cover the entire amount due, and Tenant shall
immediately deposit with Landlord

<PAGE>

such additional amounts as Landlord may determine to be due in a written notice
delivered to Tenant. Conversely, if Tenant has deposited with Landlord more than
is required to satisfy the liability for real property taxes, Landlord shall
promptly refund such excess amounts to Tenant when the tax liability has been
discharged. Tenant shall deposit with Landlord on the Commencement Date or
allocable portion of a total amount of $44,644.59, which represents property tax
liability accrued prior to the Commencement Date with respect to the Property
and certain other tracts of real property leased by affiliates of Landlord to
Tenant, or its affiliates. All amounts deposited with Landlord may be commingled
with Landlord's other funds and shall not bear interests.

         4.3 COMPLIANCE WITH LAWS. Tenant shall, at its expense, comply with and
shall cause the Property to comply with all governmental statutes, laws, rules,
orders, regulations and ordinances, the failure to comply with which at any time
would materially affect the Property or any part thereof, or the use thereof,
including those which require the making of any structural, unforeseen or
extraordinary changes, whether or not any of the same involve a change of policy
on the part of the body enacting the same. Tenant shall, at its expense, comply
with all changes required in order to obtain the Required Insurance (as
hereinafter defined), and with the provisions of all contracts, agreements,
instruments and restrictions existing at the commencement of this Lease or
thereafter suffered or permitted by Tenant affecting the Property or any part
thereof or the ownership, occupancy or use thereof.

         4.4 PERMITTED CONTESTS. Tenant shall not be required to (i) pay any
Imposition; (ii) comply with any statute, law, rule, order, regulation or
ordinance; (iii) discharge or remove any lien, encumbrance or charge; or (iv)
obtain any waivers or settlements or make any changes to take any action with
respect to any encroachment, hindrance, obstruction, violation or impairment
referred to in Section 5.2, so long as Tenant shall contest, in good faith and
at its expense, the existence, the amount or the validity thereof, the amount of
the damages caused thereby, or the extent of its liability therefore, by
appropriate proceedings, and provided that Tenant posts a bond or other security
acceptable to Landlord if the Imposition could result in a lien or encumbrance
against the Property exceeding $25,000.00. While any such proceedings are
pending, provided that Tenant complies with this Section, Landlord shall not
have the right to pay, remove or cause to be discharged the Lax, assessment,
levy, fee, rent or charge or lien, encumbrance or charge thereby being
contested. No such contest or proceedings shall in any way eliminate or
otherwise interfere with Tenant's obligation to make timely payments of Basic
Rent and Additional Rent under this Lease. Tenant further agrees that each such
contest shall be promptly prosecuted to a final conclusion. Tenant shall pay,
indemnify and save Landlord harmless against, any and all losses, judgments,
decrees and costs (including all attorneys' fees including an allocable portion
of in-house attorneys' fees, appearance costs and expenses) in connection with
any such contest and shall, promptly after the final settlement, compromise or
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interests, costs
and expenses thereof or in connection therewith, and perform all acts, the
performance of which shall be ordered or decreed as a result thereof; provided,
however, that nothing herein contained shall be construed to require Tenant to
pay or discharge any lien, encumbrance or other charge created by any act or
failure to act of Landlord or the payment of which Tenant is not otherwise
required to perform hereunder. No such contest shall subject Landlord to the
risk of any criminal liability.

         4.5 HAZARDOUS MATERIALS. Tenant shall:

                  (a) not cause, except for items sold or used in the ordinary
course of Tenant's business and for which appropriate licenses and permits are
issued (if required), or permit any Hazardous Material (as defined below) to
exist on or discharge from the Property, and shall promptly (A) pay any claim
against Tenant, Landlord, Lender or the Property, (B) remove any charge or lien
upon any of the Property, and (C) defend, indemnify and hold Landlord and Lender
harmless from any and all

<PAGE>

claims, expenses, liability, loss or damage, resulting from any Hazardous
Material that exists on or is discharged from the Property;

                  (b) not cause or permit any Hazardous Material to exist on or
discharge from any property owned or used by Tenant which would result in any
charge or lien upon the Property and shall promptly: (A) pay any claim against
Tenant, Landlord, Lender or the Property; (B) remove any charge or lien upon the
Property and (C) defend, indemnify and hold Landlord and Lender harmless from
any and all claims, expenses, liability, loss or damage, resulting from the
existence of any such Hazardous Material;

                  (c) notify Landlord and Lender of any Hazardous Material that
exists on or is discharged from or onto the Property (whether originating
thereon or mitigating to the Property from other property) within ten (10) days
after Tenant first has knowledge of such existence or discharge; and

                  (d) comply, and cause the Property to comply, with all
statutes, laws, ordinances, rules and regulations of all local, state or federal
authorities having authority over the Property or any portion thereof or their
use, including without limitation, relative to any Hazardous Material, petroleum
products, asbestos containing materials or PCB's.

                  (e) "Hazardous Material" means any hazardous or toxic
material, substance or waste which is defined by those or similar terms or is
regulated as such under any Environmental Laws. "Environmental Laws" means any
statute, law, ordinance, rule or regulation of any local, county, state or
federal authority having jurisdiction over the Property or any portion thereof
or its use as the same may be amended from time to time, including but not
limited to: the Federal Water Pollution Control Act (33 U.S.C. Section 1317) as
amended; (b) the Federal Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) as amended; (c) the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) as amended; (d)
the Toxic Substance Control Act (15 U.S.C. Section 2601) as amended; and (e) the
Clean Air Act (42 U.S.C. Section 7401) as amended.

                  (f) Tenant's obligations and liabilities under this Section
4.5 shall survive the expiration of this Lease.

ARTICLE 5. MAINTENANCE AND REPAIR; ALTERATIONS

         5.1 MAINTENANCE AND REPAIR. Tenant acknowledges that it has received
the Property in good condition, repair and appearance. Tenant agrees that, at
its expense, it will keep and maintain the Property, including any altered,
rebuilt, additional or substituted buildings, structures and other improvements
thereto, in good condition and repair, subject only to ordinary and reasonable
wear and tear. It will make promptly, all structural and nonstructural, foreseen
and unforeseen, ordinary and extraordinary changes and repairs or replacements
of every kind which may be required to be made to keep and maintain the Property
in such good condition, repair and appearance and it will keep the Property
orderly and free and clear of rubbish. Tenant covenants to perform or observe
all terms, covenants or conditions or any reciprocal easement or maintenance
agreement to which it may at any time he a party or to which the Property are
currently subject Tenant shall, at its expense, use its best efforts to enforce
compliance with any reciprocal easement or maintenance agreement benefiting the
Property by any other person subject to such agreement. Landlord shall not be
required to maintain, repair or rebuild, or to make any alterations,
replacements or renewals of any nature to the Property, or any part thereof,
whether ordinary or extraordinary, structural or nonstructural, foreseen or not
foreseen to maintain the Property or any part thereof in any way. Tenant hereby
expressly waives the right to make repairs at the expense of Landlord which may
be provided for in any law in effect at the time of the commencement of

<PAGE>

the term of this Lease or which may thereafter be enacted. If Tenant shall
abandon the Property, it shall give Landlord immediate notice thereof. The
obligations of Tenant to pay Basic Rent and Additional Rent shall not be
eliminated, reduced, suspended, or otherwise impaired by reason of such
abandonment of the Property. In the event that the Property shall violate any
law and as a result of such violation enforcement action is threatened or
commenced against Tenant or with respect to the Property, then Tenant shall
either (i) obtain valid and effective waivers or-settlements-of all claims,
liabilities and damages resulting from each such violation, whether the same
shall affect Landlord, Tenant or both, or (ii) take such action as shall be
necessary to remove such violation, including, if necessary, making any
necessary repairs or replacements, structural or otherwise.

         5.2 ENCROACHMENTS. If any Improvements situated on the Property at any
time during the Terms of this Lease shall encroach upon any property, street or
right-of-way adjoining or adjacent to the Property, or shall violate the
agreements or conditions contained in any restrictive covenant affecting the
Property or any part thereof, or shall impair the rights of others under or
hinder or obstruct any easement or right-of-way to which the Property are
subject, then, promptly after tile written request of Landlord or any person
affected by any such encroachment, violation, impairment, hindrance or
obstruction, Tenant shall, at its expense, either (i) obtain effective waivers,
or settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, impairment, hindrance or obstruction whether the same
shall affect Landlord, Tenant or both, or (ii) make such changes in the
improvements on the Property and take such other action as shall be necessary to
remove such encroachments, hindrances or obstructions and to end such violations
or impairments, including, if necessary, the alteration or removal of any
improvement on the Property. Any such alteration or removal shall be made in
conformity with the requirements of Section 5.3 hereof to the same extent as if
such alteration or removal were an alteration under the provisions of Section
5.3. In the event that the title policy held by Landlord provides monetary
damages or other relief for such encroachment, Landlord shall institute and
prosecute an action for such relief. Any recovery of such action, less
Landlord's out of pocket costs and expenses related thereto shall be made
available to Tenant for the repair/restoration of the Property.

         5.3 ALTERATIONS. Tenant may, at its expense, make additions to and
alterations of the Improvements to the Property, and make substitutions and
replacements therefore, provided that (i) any addition or alteration in excess
of $125,000 shall be subject to the reasonable approval of Landlord; (ii) the
market value of the Property shall not thereby be lessened; (iii) such actions
shall be performed in a good and workmanlike manner; and (iv) such additions,
alterations, substitutions and replacements shall not violate any term of any
restriction to which the Property are subject and shall be expeditiously
completed in compliance with all laws, ordinances, rules, regulations and
requirements applicable thereto. Tenant shall promptly pay all costs and
expenses of each such addition, alterations, substitution or replacement,
discharge all liens arising therefrom and procure and pay for all permits and
licenses required in connection therewith.

         5.4 NO LIENS. Tenant will not, directly or indirectly, create or permit
to be created or to remain, and shall within sixty (60) days of filing of any,
mechanics, contractors or other liens discharge or bond, at its expense, any
liens with respect to, the Property or any part thereof or Tenant's interest
therein or the Basic Rent, Additional Rent or other sums payable by Tenant under
this Lease, other than any encumbrances permitted by a Permitted Encumbrance (as
defined herein). Nothing contained in this Lease shall be construed as
constituting the consent or request, expressed or implied, by Landlord to the
performance of any labor or services or of the furnishing of any materials for
any construction, alteration, addition, repair or demolition of or to the
Property or any part thereof by any contractor, subcontractor, laborer,
materialman or vendor. Notice is hereby given that Landlord will not be liable
for any labor, services or materials furnished or to be furnished to Tenant, or
to anyone holding the Property or any part thereof, and that no mechanic's or
other liens for any such labor services or materials shall attach to or affect
the interest of Landlord in and to the Property.

<PAGE>

         5.5 ENGINEERING REPORT. Landlord may, from time to time but not more
than once in each sixty (60) month period, order an engineering study of the
Property (the "Engineering Report") in form, content and scope acceptable to
Landlord, prepared by a qualified engineering firm. The Engineering Report may
include, without limitation, a study or analysis of (a) all structural
components of the Property, (b) all mechanical, electrical, plumbing, HVAC,
sprinkler, fire suppression, elevators, and other building systems and equipment
designated by Landlord, and (c) the roof of the building. Landlord shall be
responsible for the costs of the Engineering Report unless the Engineering
Report reveals deferred maintenance items exceeding, in the aggregate,
$100,000.00, in which event Tenant shall be responsible for the cost of the
Engineering Report.

ARTICLE 6.

         6.1 INSURANCE. Tenant shall maintain, or cause to be maintained, at its
sole expense, the following insurance on the Property (herein called the
"Required Insurance"):

             6.1.1 Insurance against loss or damage to the Improvements and all
equipment owned by Tenant located on the Property (the "Equipment") under a fire
and broad form of all risk extended coverage insurance policy (which shall
include food insurance if the Property is located within a flood hazard area,
and earthquake insurance) together with an agreed value endorsement. Such
insurance shall be in amounts sufficient to prevent Landlord or Tenant from
becoming a co-insurer under the applicable policies, and in any event in amounts
not less than the full replacement cost of the Improvements and Equipment
(excluding footings and foundations and other parts of the Improvements which
are not insurable) as determined from time to time by Landlord but not more
frequently than once in any 12-month period. Such insurance policies may contain
reasonable exclusions and deductible amounts as may be approved by Landlord.

             6.1.2 General public liability insurance for the benefit of
Landlord, Tenant and Lender against claims for damages to person or property
occurring on, in or about the Property and the adjoining streets, sidewalks,
gutters, curbs, passageways and other areas adjacent thereto, if any, of at
least Three Million Dollars ($3,000,000) single limit with respect to bodily
injury or death to any one person, at least Five Million Dollars ($5,000,000)
with respect to any one accident, and at least Three Million Dollars
($3,000,000) with respect to property damage or such greater amounts as may
reasonably be required by Landlord, such insurance to include fill coverage of
the indemnity set forth in Section 6.10. Policies for such insurance shall be
for the mutual benefit of Landlord, Tenant and Lender, as their respective
interests may appear.

             6.1.3 Workers' compensation insurance to the extent necessary to
protect Landlord and the Property against Workers' Compensation claims, covering
all persons employed in connection with any work done on or about the Property
with respect to which claims for death or bodily injury could be asserted
against Landlord, Tenant or the Property, complying with the laws of the state
in which the Property are located. In addition, Tenant shall maintain use and
occupancy insurance covering, as applicable, rental income or gross business
earnings with coverage in an amount not less than twelve month's gross rental
income or gross business earnings, as applicable in each case to the Leased
Property.

             6.1.4 At any time when any portion of the Property are being
constructed, altered or replaced, builder's risk insurance (in completed value
non-reporting form) in an amount no less than the actual replacement value of
the Improvements, exclusive of foundations and excavations.

             6.1.5 All insurance policies shall be in such form and with such
endorsements and in such amounts as shall be expressly required hereby or, if
not expressly required, otherwise reasonably

<PAGE>

satisfactory to Landlord (and Landlord shall be entitled to approve amounts,
form, risk coverage, deductibles, loss payees and insureds, such approval not to
be unreasonably withheld). The policy referred to in Section 6.1.1 shall contain
a replacement cost endorsement and a waiver of depreciation. Except for the
workers' compensation insurance policy, all of the above referenced policies
shall name Lender as an additional insured/loss payee, shall provide that all
insurance proceeds be payable to Lender, and shall contain: (i) "Non
Contributory Standard Beneficiary Clause" and a Lender's Loss Payable
Endorsement (Form 438 BFUNS) or their equivalents naming Landlord (or if
Landlord so elects, to Lender), as the person to which all payments shall be
paid and a provision that payment of insurance proceeds in excess of One Hundred
Thousand Dollars ($l00,000.00) shall be made by a check payable only to Lender;
(ii) a waiver of subrogation endorsement as to Landlord and Lender and their
assigns providing that no policy shall be impaired or invalidated by virtue of
any act, failure to act, negligence of, or violation of declarations, warranties
or conditions contained in such policy by Lender, Landlord or any other named
insured, additional insured or loss payee, except for the willful misconduct of
Landlord or Lender knowingly in violation of the conditions of such policy;
(iii) an endorsement indicating that neither Lender nor Landlord shall be or be
deemed to be a coinsurer with respect to any risk insured by such policies and
shall provide for an aggregate deductible per loss for all policies of an amount
not more than that which is customarily maintained by prudent owners of property
of the same location, type and quality as the Property, but in no event in
excess of five percent (5%) of the replacement cost of the Improvements (or, in
the case of earthquake insurance, the smallest deductible which is commercially
available, which deductible as of the date here is deemed to be ten percent
(10%)); (iv) a provision that such policies shall not be canceled or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days' prior written notice to Landlord
and Lender in each instance; and (v) effective waivers by the insurer of all
claims for insurance premiums against any loss payees, additional insureds and
named insureds (other than Tenant). Certificates of insurance with respect to
all renewal and replacement policies shall be delivered to Landlord not less
than thirty (30) days prior to the expiration date of any of the insurance
policies required to be maintained hereunder which certificates shall bear
notations evidencing payment of applicable premiums. If Tenant fails to maintain
and deliver to Landlord the certificates of insurance required by this Lease,
Landlord may, at its option, after written notice to Tenant, procure such
insurance, and Tenant shall reimburse Landlord for the amount of all premiums
paid by Landlord thereon promptly, after demand by Landlord, with interest
thereon at the Default Rate from the date paid by Landlord to the date of
repayment.

         6.2 PERMITTED INSURERS. The Required Insurance shall be written by
companies of recognized financial standing authorized to do insurance business
in the state in which the Property are located and have a rating of not less
than A+ in Best's Insurance Guide or any successor thereto. The Required
Insurance shall name as the insured parties thereunder Landlord and Tenant, as
their interests may appear, and Lender as an additional insured under a standard
"mortgagee" endorsement or its equivalent satisfactory to Landlord. Landlord
shall not be required to prosecute any claim against, or to contest any
settlement proposed by, an insurer. Tenant may, at its expense, prosecute any
such claim or contest any such settlement in the name of Landlord, Tenant or
both with the consent of Landlord, and Landlord will join therein at Tenant's
written request upon the receipt by Landlord of an indemnity from Tenant against
all costs, liabilities and expenses in connection therewith.

         6.3 INSURANCE CLAIMS. Insurance claims by reason of damage to or
destruction of any portion of the Property shall be adjusted by Tenant. Both
Landlord and Lender shall have the right to join with Tenant in adjusting any
such loss.

         6.4 INSURED PARTIES. Every policy referred to in Section 6.1.1 shall
bear a first mortgage endorsement in favor of Lender and any loss under any such
policy shall be made payable to such Lender, provided that any recovery under
any such policy shall be applied by such Lender in the manner provided in
Section 6.3. Every policy of Required Insurance shall contain an agreement that
the insurer will not

<PAGE>

cancel such policy except after thirty (30) days' written notice to Landlord and
Lender and that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of Landlord, Tenant or Lender which might,
absent such agreement, result in a forfeiture of all or a part of such insurance
payment and notwithstanding any change in ownership of the Property.

         6.5 DELIVERY OF POLICIES. Tenant shall deliver to Landlord promptly
after the delivery of this Lease, certificates of insurers satisfactory to
Landlord, evidencing all of the Required Insurance. Tenant shall, prior to the
expiration of any such policy, deliver to Landlord other original or duplicate
of such certificates evidencing the renewal of any such policy. If Tenant fails
to maintain or renew any Required Insurance, or to pay the premium therefore, or
to deliver such certificate, then Landlord, at its option, but without
obligation to do so, procure such insurance. Any sums so expended by Landlord
shall be Additional Rent hereunder and shall be repaid by Tenant within five (5)
days after notice to Tenant of such expenditure and the amount thereof

         6.6 NO DOUBLE COVERAGE. Neither Tenant nor Landlord shall obtain or
carry separate insurance covering the same risks as any Required Insurance
unless Tenant, Landlord and Lender are included therein as named insured, with
loss payable as provided in this Lease and the policy contains a first mortgagee
endorsement in favor of Lender. Tenant and Landlord shall immediately notify
each other whenever any such separate insurance is obtained and shall deliver to
each other the policies or certificates evidencing the same.

         6.7 BLANKET INSURANCE. Anything contained in this Article 6 to the
contrary notwithstanding, all Required Insurance may be carried under a
"blanket" or "umbrella" policy or policies covering other properties or
liabilities of Tenant, provided that such policies otherwise comply with the
provisions of this Lease and specify the coverage and amounts thereof with
respect to the Property.

         6.8 DAMAGES FOR TENANT'S FAILURE TO PROPERLY INSURE. Landlord or Lender
shall not be limited in the proof of any damages which Landlord or Lender may
claim against Tenant arising out of or by reason of Tenant's failure to provide
and keep in force insurance, as provided above, to the amount of the insurance
premium or premiums not paid or incurred by Tenant and which would have been
payable under such insurance; but Landlord and Lender shall also be entitled to
recover as damages for such breach, the uninsured amount of any loss, to the
extent of any deficiency in the Required Insurance and damages, costs
and-expenses of suit suffered or incurred by reason of or damage to, or
destruction of, the Property, occurring during any period when Tenant shall have
failed to provide the Required Insurance. Tenant shall indemnify and hold
harmless Landlord and Lender for any liability incurred by Landlord or Lender
arising out of any deductibles for Required Insurance.

         6.9 CASUALTY. If all or any part of the Property shall be damaged or
destroyed by casualty, Tenant shall promptly notify Landlord thereof, and shall,
with reasonable promptness and diligence, rebuild, replace and repair any damage
or destruction to the Property, at its expense, in conformity with the
requirements of Article 5, in such manner as to restore the same to the same
condition, as nearly as possible, as existed prior to such casualty and there
shall be no abatement of Basic Rent or Additional Rent. Proceeds of casualty
insurance of $100,000 or less shall be paid to Tenant. Proceeds in excess of
$100,000 shall be held in escrow by Landlord (or by Lender if requested by
Lender) Lender and paid to Tenant, but only against certificates of Tenant and
appropriate lien waivers delivered to Landlord or Lender from time to time as
such work or repair progresses, each such certificate describing the work or
repair for which Tenant is requesting payment and the cost incurred by Tenant in
connection therewith and stating that Tenant has not theretofore received
payment for such work and has sufficient funds remaining to complete the work
free of liens or claims. Any proceeds remaining after Tenant has repaired the
Property shall be delivered to Tenant but only to the extent that the aggregate
amount of such proceeds so remaining and all amounts theretofore paid to Tenant
pursuant to this sentence do not exceed $100,000. If such aggregate amounts
exceed

<PAGE>

$100,000, the excess may be retained by Landlord and applied in reduction of the
principal amount of the indebtedness secured by any Permitted Encumbrance or
paid to Tenant at Landlord's sole option with the consent of Lender. If any such
amount is applied to reduce the principal amount of indebtedness secured by the
Property, the monthly reduction in debt service payments shall be applied dollar
for dollar as a reduction of the Basic Rent due hereunder. No payment shall be
made to Tenant if any default or Event of Default shall have happened and be
continuing under this Lease.

         6.10 INDEMNIFICATION.

              6.10.1 Tenant agrees to pay, and to protect, defend, indemnify and
save harmless Landlord, Lender and their agents from and against any and all
liabilities, losses, damages, costs, expenses (including all reasonable
attorneys' fees including an allocable portion of in-house attorneys' fees and
expenses of Landlord), causes of action, suits, claims, demands or judgments of
any nature whatsoever (i) arising from any injury to, or the death of, any
person or damage to property on the Property or upon adjoining sidewalks,
streets or ways, in any manner growing out of or connected with the use,
non-use, condition or occupation of the Property or any part thereof or
resulting from the condition thereof of the Property or any part thereof or
resulting from the condition thereof or adjoining sidewalks, streets or ways, so
long as not occasioned by the gross negligence of Landlord, Lender, their
agents, servants, employees or assigns and/or (ii) arising from violation by
Tenant of any agreement or condition of this Lease, or any contract or agreement
to which Tenant is a party or any restriction, law, ordinance or regulation, in
each case affecting the Property or any part thereof or the ownership, occupancy
or use thereof, so long as not occasioned by the gross negligence of Landlord,
Lender, their agents, servants, employees or assigns (collectively, "Indemnified
Matters"). If Landlord, Lender or any agent of Landlord or Lender or any agent
of Landlord or Lender shall be made a party to any such litigation commenced
against Tenant, and if Tenant, at its expense, shall fail to provide Landlord,
Lender or their agents with counsel (upon Landlord's request) reasonably
approved by Landlord, Tenant shall pay all costs and attorneys' fees and
expenses, including an allocable portion of in-house attorneys' fees, incurred
or paid by Landlord, Lender or their agents in connection with such litigation.
Tenant's obligations and liabilities under Section 6.10 herein shall survive the
expiration of this Lease.

              6.10.2 To the extent that Landlord is determined, by a final,
non-appealable judgment of a court of competent jurisdiction to be grossly
negligent, Landlord agrees to pay, and to protect, defend indemnify and save
harmless Tenant, Source and their agents from and against any and all
liabilities, losses, damages, costs, expenses (including all reasonable
attorneys' fees), causes of action, suits, claims, demands or judgments of any
nature whatsoever (i) arising from any injury to, or the death of, any person or
damage to property on the Property or upon adjoining sidewalks, streets or ways,
in any manner growing out of or connected with the use, non-use, condition or
occupation of the Property or any part thereof or resulting from the condition
thereof of the Property or any part thereof or resulting from the condition
thereof or adjoining sidewalks, streets or ways, which in each case is
occasioned by the gross negligence of Landlord, Lender, their agents, servants,
employees or assigns and/or (ii) arising from violation by Landlord of any
agreement or condition of this Lease, or any contract or agreement to which
Landlord is a party or any restriction, law, ordinance or regulation, in each
case affecting the Property or any part thereof or the ownership, occupancy or
use thereof, occasioned by the gross negligence of Landlord, Lender, their
agents, servants, employees or assigns (collectively, "Tenant Indemnified
Matters"). Landlord's obligations and liabilities under Section 6.10 herein
shall survive the expiration of this Lease.

              6.10.3 Should any claim be made against Landlord by a person not a
party to this Lease with respect to any Indemnified Matter, Landlord shall
promptly give Tenant written notice of any such claim, and Tenant shall
thereafter defend or settle any such claim, at its sole expense, on its own
behalf

<PAGE>

and with counsel of its selection; provided, however, that Tenant's counsel
shall be competent counsel experienced in the type of litigation or claim at
issue and shall be acceptable to Landlord, acting reasonably. Upon Tenant's
assumption of the defense of any claim against Landlord pursuant to Tenant's
indemnity, Landlord shall have the right to participate in the defense or
settlement of the claim with counsel retained and paid by it, and Tenant shall
cause thc attorneys retained by it to consult and cooperate fully with counsel
for Landlord. In such defense or settlement of any claims, Landlord shall
provide Tenant with originals or copies of all relevant documents and shall
cooperate with and assist Tenant, at no expense to Landlord. Notwithstanding any
provision of this Section 6.10 to the contrary, Tenant shall not enter into any
settlement or agreement in connection with any Indemnified Matters binding upon
or adversely affecting either Landlord or Lender, or admit any liability or fact
in controversy binding upon or adversely affecting either Landlord or Lender,
without the prior written consent of Landlord or Lender, as the case may be, in
such party's sole discretion.

ARTICLE 7. CONDEMNATION.

         7.1 ASSIGNMENT OF AWARD. Subject to the rights of Tenant set forth in
this Article 7, Tenant hereby irrevocably assigns to Landlord (subject to the
rights of Lender) any award or payment to which Tenant may be or become entitled
with respect to Complete, Partial or Temporary Taking of the Property or any
part thereof, by condemnation or other eminent domain proceedings pursuant to
any law, general or special, by any governmental authority, whether the same
shall be paid or payable in respect of Tenant's leasehold interest hereunder or
otherwise. Landlord shall be entitled to participate in any such proceeding and
the expenses thereof (including counsel fees and expenses, which may include an
allocable portion of in-house counsel fees and expenses) shall be paid by
Tenant.

         7.2 COMPLETE TAKING. Upon a Complete Taking, Tenant shall deliver a
certificate to Landlord stating that a "Complete Taking" has occurred and Tenant
shall be deemed to have made a Purchase Offer (as defined in Section 11.10.15)
to Landlord with respect to the Leased Property subject to the Complete Taking,
provided, however, this Lease shall be deemed to continue in full force and
effect without any abatement of rent, notwithstanding any taking, until the
Termination Date as established herein with respect to such Complete Taking. The
purchase price ("Purchase Price") with respect to a Purchase Offer shall be
equal to the greater of (a) the Net Award (as defined in Section 11.10), or (b)
$4,229,818.93, plus all of Landlord's closing costs associated with Tenant's
purchase of the Property, including without limitation, any prepayment or
defeasance expense charged by Lender under the Loan Documents. The Termination
Date with respect to a Complete Taking shall be the date on which title to the
Property passes to the condemning authority. No Basic Rent or Additional Rent
shall abate effective until the Termination Date.

         7.3 PARTIAL TAKING. Upon the occurrence of any Partial Taking, this
Lease shall continue in full effect without abatement or reduction of Basic
Rent, Additional Rent or other sums payable by Tenant. In the event Landlord
receives a Net Award in connection with any such Partial Taking and provided
that no Event of Default shall be continuing, Landlord and Lender shall make the
Net Award available to Tenant to make any repairs required by Section 5.3 hereof
so that, thereafter, the Property shall be, as nearly as possible, in a
condition as good as the condition thereof immediately prior to such Partial
Taking, but, if such Net Award shall be in excess of One Hundred Thousand
Dollars ($100,000), before Landlord or Lender makes the Net Award available to
Tenant, Tenant must first deliver to Landlord or to Lender, as the case may be,
(i) certificates of Tenant identifying the repair work for which Tenant is
requesting payment and the cost incurred by Tenant in connection therewith and
stating that Tenant has not theretofore received payment for such work; and (ii)
appropriate lien waivers and such other information reasonably required. Any Net
Award remaining after such repairs have been made shall be delivered to Tenant;
but only to the extent that the aggregate amount of such Net Award so

<PAGE>

remaining and all amounts theretofore paid to Tenant pursuant to this Section
7.3 do not exceed One Hundred Thousand Dollars ($100,000). If such aggregate
amounts exceed $100,000, the excess may be retained by Landlord and applied in
reduction of the principal amount of the indebtedness secured by any Permitted
Encumbrance or paid to Tenant at Landlord's sole option with the consent of
Lender. If any such amount is applied to reduce the principal amount of
indebtedness secured by the Property, the monthly reduction in debt service
payments shall be applied dollar for dollar as a reduction of the Basic Rent due
hereunder.

         7.4 TEMPORARY TAKING. Upon the occurrence of any Temporary Taking,
Tenant shall, promptly after any such Temporary Taking ceases, at its expense,
repair any damage caused thereby in conformity with the requirements of Article
5 so that, thereafter, the Property shall be, as nearly as possible, in a
condition as good as the condition thereof immediately prior to such Temporary
Taking. In the event of such Temporary Taking, Tenant shall be entitled to
receive the entire Net Award payable by reason of such Temporary Taking, less
any costs incurred by Landlord in connection therewith. If the cost of any
repairs required to be made by Tenant pursuant to this Section 7.4 shall exceed
the amount of the Net Award, the deficiency shall be paid by Tenant. No payments
shall be made to Tenant pursuant to this Section 7.4, if there is any default or
Event of Default of Tenant under this Lease. No Basic Rent or Additional Rent
shall abate through the duration of such Temporary Taking.

         7.5 PROCEDURE AFTER PURCHASE OFFER: PROCEDURE IN EVENT OF PURCHASE.

             7.5.1 If Landlord shall have accepted the Purchase Offer in
writing, Landlord shall convey the Property to Tenant for the Purchase Price,
reduced by the sum of: (a) any Net Award received by Landlord or Lender, and (b)
the principal and interest outstanding on the Note as of the date of closing of
the Purchase Offer.

             7.5.2 If the Property or any part thereof shall be purchased by
Tenant under Article 7 of this Lease, Landlord need not transfer and convey to
Tenant or its designee any better title thereto than existed on the date of the
commencement of this Lease, and Tenant shall accept such title, subject,
however, to such liens, encumbrances, charges, exceptions and restrictions,
against or relating to the Property, (i) including those arising pursuant to the
terms of this Lease and those consented to or arising by the act of Tenant and
(ii) subject to all applicable laws, regulations and ordinances, but free of the
Mortgage and all other mortgages, liens, encumbrances, charges, exceptions and
restrictions which shall have been created by or resulted from acts or failures
to act of Landlord.

             7.5.3 On the date fixed for any such purchase by Tenant under
Article 7, Tenant shall pay to Landlord (subject to the rights of Lender), at
any place within the United States of America designated by Landlord, the
Purchase Price therefor (as adjusted pursuant to Section 7.5.1 above), in
immediately available funds, together with all installments of Basic Rent and
all other sums then due under this Lease and unpaid to and including the
Termination Date without offset or deduction for any reason, and Landlord shall
deliver to Tenant (i) a quitclaim deed conveying title to the Property and
describing the Property or portion thereof being sold and conveying the title
thereto, together with (ii) such instruments as shall be necessary to transfer
to Tenant or its designee any other property then required to be transferred by
Landlord pursuant to this Lease and (iii) a binding and effective assignment of
condemnation awards due in connection with the Property, but not yet paid to
Landlord or Lender. Tenant shall pay all charges incident to such conveyance and
transfer, including counsel fees, escrow fees, recording fees, title insurance
premiums and all applicable federal, state and local taxes (other than any
income or franchise taxes levied upon or assessed against Landlord) which may be
incurred or imposed by reason of such conveyance and transfer.

<PAGE>

             7.5.4 Upon the completion of such purchase, but not prior thereto,
this Lease shall terminate with respect to the Property, except with respect to
obligations and liabilities of Tenant, actual or contingent, under this Lease
which arose on or prior to such date of purchase. Effective upon the termination
of this Lease with respect to the Property, the obligation to pay Basic Rent and
Additional Rent with respect to such Property will terminate.

             7.5.5 If Landlord (with the written consent of Lender) shall have
tendered a written rejection of the Purchase Offer not later than ten (10) days
following receipt of the certificate required by Section 7.2, this Lease shall
terminate on the Termination Date established under Section 7.2 hereof with
respect to the Property (except with respect to obligations and liabilities of
Tenant under this Lease, actual or contingent, which have arisen on or prior to
such Termination Date), upon payment by Tenant of all of the Basic Rent,
Additional Rent and all other sums due and payable hereunder to and including
the Termination Date without offset or deduction for any reason. Effective upon
the termination of this Lease with respect to the Property, the obligation to
pay Basic Rent and Additional Rent with respect to the Property will terminate.
If Landlord shall fail to accept or reject the Purchase Offer within the times
allotted, Landlord shall be conclusively presumed to have accepted the Purchase
Offer.

         7.6 COMPENSATION FOR PERSONAL PROPERTY AND RELOCATION EXPENSES. Tenant
shall have the right to claim and recover from the condemning authority any such
compensation as may be awarded to Tenant for the value of furniture, fixtures,
equipment and other property owned by Tenant, removal of merchandise, moving and
relocation expenses, however, in the event of a Complete Taking, Tenant shall
not receive any benefits of this Section 7.6 until the Purchase Price has been
received in full by Landlord (subject to the rights of Lender).

ARTICLE 8. ASSIGNMENT AND SUBLETTING

         8.1 TRANSFERS. Except as provided in Section 8.7, Tenant shall not,
without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment, or other transfer
of this Lease or any interest hereunder by operation of law, sublet the Property
or any part thereof, or enter into any license or concession agreements or
otherwise permit the occupancy or use of the Property or any part thereof by any
persons other than Tenant and its employees and contractors (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than thirty (30) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Leased Property to be transferred (the
"Subject Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefore, including calculation of the "Transfer Premium", as
that term is defined in Section 8.3 below, in connection with such Transfer, the
name and address of the proposed Transferee, and a copy of all existing executed
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, provided that Landlord shall
have the right to require Tenant to utilize Landlord's standard Transfer
documents in connection with the documentation of such Transfer, (iv) current
financial statements of the proposed Transferee certified by an officer, partner
or owner thereof, business credit and personal references and history of the
proposed Transferee and any other information reasonably required by Landlord
which will enable Landlord to determine the financial responsibility, character,
and reputation of the proposed Transferee, nature of such Transferee's business
and proposed use of the Subject Space, and (v) an executed estoppel certificate
from Tenant in the form attached hereto as EXHIBIT B. Any Transfer made without
Landlord's prior

<PAGE>

written consent shall, at Landlord's option, be null, void and of no effect, and
shall, at Landlord's option, constitute a default by Tenant under this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's reasonable review and processing fees, as well as any reasonable
professional fees (including, without limitation, attorneys', accountants',
architects', engineers' and consultants' fees) incurred by Landlord within
thirty (30) days after written request by Landlord.

         8.2 LANDLORD'S CONSENT. Landlord shall not unreasonably withhold or
delay its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice. Without limitation as
to other reasonable grounds for withholding consent, the parties hereby agree
that it shall be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply:

             8.2.1 The Transferee is of a character or reputation or engaged in
a business which is not consistent with the quality of the Property;

             8.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;

             8.2.3 The Transferee is either a governmental agency or
instrumentality thereof, or

             8.2.4 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested.

         If Landlord consents to any Transfer pursuant to the terms of this
Section 8.2, Tenant may within six (6) months after Landlord's consent, but not
later than the expiration of said six-month period, enter into such Transfer of
the Property or portion thereof, upon substantially the same terms and
conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 8.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 8.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant's original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 8. Notwithstanding
anything to the contrary in this Lease, if Tenant or any proposed Transferee
claims that Landlord has unreasonably withheld or delayed its consent under
Section 8.2 or otherwise has breached or acted unreasonably under this Article
8, their sole remedies shall be a suit for contract damages (other than damages
for injury to, or interference with, Tenant's business including, without
limitation, loss of profits, however occurring) or declaratory judgment and an
injunction for the relief sought, and Tenant hereby waives all other remedies,
including, without limitation, any right at law or equity to terminate this
Lease, on its own behalf and, to the extent permitted under all applicable laws,
on behalf of the proposed Transferee.

         8.3 TRANSFER PREMIUM. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord fifty percent (50%) of any "Transfer Premium," as that term is
defined in this Section 8.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Property is
transferred. "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer and any payment in excess of fair market value for
services rendered by Tenant to Transferee or for assets, fixtures, inventory,
equipment, or furniture transferred by Tenant to Transferee in connection with
such Transfer.

<PAGE>

The determination of the amount of Landlord's applicable share of the Transfer
Premium shall be made on a monthly basis as rent or other consideration is
received by Tenant under the Transfer.

         8.4 EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i) the
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an independent certified public accountant, or Tenant's
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer, and (v) no
Transfer relating to this Lease or agreement entered into with respect thereto,
whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from any liability under this Lease, including, without
limitation, in connection with the Subject Space. Landlord or its authorized
representatives shall have the right at all reasonable times to audit the books,
records and papers of Tenant relating to any Transfer, and shall have the right
to make copies thereof. If the Transfer Premium respecting any Transfer shall be
found understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.

         8.5 ADDITIONAL TRANSFERS. For purposes of this Lease, the term
"Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or
change, voluntary, involuntary or by operation of law, of fifty percent (50%) or
more of the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.

         8.6 OCCURRENCE OF DEFAULT. Any Transfer hereunder shall be subordinate
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as cancelled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee attorn to and recognize
Landlord as its landlord under any such Transfer. If Tenant shall be in default
under this Lease, Landlord is hereby irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 8 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.

         8.7 ASSIGNMENT TO AFFILIATES. Notwithstanding anything to the contrary
contained in this Article 8, Tenant (but not any successor tenant or sublessee
pursuant to this Section 8.7) shall have the

<PAGE>

right to assign this Lease, or sublet the Leased Property or any portion
thereof, without the consent of, but with prior notice to, Landlord to any
person (a) with which Tenant may merge or consolidate, (b) which is a parent or
subsidiary of Tenant at any tier or which directly or indirectly controls or is
controlled by or is under common control with Tenant, (c) which is the successor
corporation to Tenant in the event of a corporate reorganization, or (d) which
acquires all or substantially all of the voting stock of Tenant or all or
substantially all of the assets of Tenant, provided that said assignee assumes,
in full, the obligations of Tenant under this Lease and Tenant remains primarily
liable under this Lease.

ARTICLE 9. FINANCIAL INFORMATION/PROPERTY INFORMATION

         9.1 FINANCIAL STATEMENTS. Except during any period in which Tenant is
required to file its financial statements with the Securities Exchange
Commission and such reports are publicly available, Tenant will furnish to
Landlord and Lender (i) Tenant's annual report within 120 days after the end of
Tenant's fiscal year; and (ii) within 30 days of their availability, Tenant's
semi-annual financial statements and quarterly financial statements. Within 10
days of Landlord's written request, Tenant will furnish to Landlord copies of
such financial statements for previous periods (up to three years prior).

         9.2 OPERATING STATEMENTS. Tenant will furnish Landlord an operating
statement for the Property for each quarter listing all expenses incurred in
operating and maintaining the Property (i.e., insurance, taxes and maintenance
expenses) and separately detailing all capital expenditures for the quarter.

         9.3 TAX BILLS. Within 5 days of any request by Landlord, Tenant will
furnish to Landlord a copy of the real property tax bill. Tenant will furnish
evidence of payment of such tax bill as set forth in Section 4.1. Within 10 days
of Landlord's written request, Tenant will furnish to Landlord copies of past or
previous real property tax bills.

         9.4 OTHER PROPERTY INFORMATION. Within 10 days of Landlord's written
request, Tenant will furnish to Landlord (i) copies of all warranties applicable
to the Property, (ii) copies of all licenses and permits required for the
operation of the Property; (iii) copies of all utility bills (for the past 6
months) pertaining to the Property, and (iv) copies of all vendor or service
contracts then in force with respect to the Property.

         9.5 LANDLORD ACCESS. Landlord reserves the right at all reasonable
times and upon reasonable written notice to Tenant to enter the Property for the
following purposes: (i) to inspect the Property; (ii) to show the Property to
prospective purchasers or to current or prospective lenders, ground or
underlying lessors or insurers; or (iii) to show the Property to prospective
tenants during the last year of the term at reasonable hours and upon prior
written notice to Tenant. Notwithstanding anything to the contrary in this
Lease, Landlord may enter the Property at any time (a) to perform any
obligations, if any, required of Landlord with respect to repair or maintenance,
(b) to take possession of the Property due to Tenant's breach as otherwise
provided in this Lease, and (c) to perform any covenants of Tenant which Tenant
fails to perform. Landlord may make such entries without the abatement of rent
and may take such reasonable steps as required to accomplish the stated
purposes. Tenant waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Property, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have keys
to the Property with which to unlock all doors, excluding Tenant's vaults, safes
and special security areas designated in advance by Tenant. Any entry by
Landlord in the manner described in this Lease shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Property, or an actual or
constructive eviction of Tenant from any portion of the

<PAGE>

Property. No provision of this Lease shall be construed as obligating Landlord
to perform any repairs, alterations or decorations except as otherwise expressly
agreed to be performed by Landlord.

ARTICLE 10. DEFAULT

         10.1 EVENTS OF DEFAULT. Any of the following occurrences or acts shall
constitute an event of default (herein called an "Event of Default") under this
Lease:

              10.1.1 At any time during the continuance of this Lease (and
regardless of the pendency of any bankruptcy, reorganization, receivership,
insolvency or other proceedings at law, in equity, or before any administrative
tribunal, which have or might have the effect of preventing Tenant from
complying with the terms of this Lease), (1) if Tenant shall fail to make any
payment when due of Basic Rent, Additional Rent or other sum herein required to
be paid by Tenant hereunder and such failure continues for three (3) days after
receipt-of written notice, or (2) if Tenant shall fail to observe or perform any
other provision hereof or if any representation or warranty of Tenant set forth
herein shall either prove to be false or misleading in any material respect as
of the time when the same shall have been made (with the exception of any
payment provisions therein which failure to pay shall constitute an Event of
Default under (10.1.1(1)) hereof), dated as of the date hereof, for thirty (30)
days after written notice; provided, that in the case of any default referred to
in this Lease that cannot with diligence be cured within such thirty (30) day
period, if Tenant shall proceed promptly to cure the same and thereafter shall
prosecute the curing of such default with diligence, then upon receipt by
Landlord of a Tenant's Certificate stating the reason such default cannot be
cured within thirty (30) days and stating that Tenant is proceeding with due
diligence to cure such default, the time within which such failure may be cured
shall be extended for such period as may be necessary to complete the curing of
the same with diligence; or

              10.1.2 If Tenant shall file a petition commencing a voluntary case
under the Federal Bankruptcy Code or any federal or state law (as now or
hereafter in effect) relating bankruptcy, insolvency, reorganization, winding-up
or adjustment of debts (hereinafter collectively called "Bankruptcy Law") or if
Tenant shall (1) apply for or consent to the appointment of, or the taking of
possession by, any receiver, custodian, trustee, United States Trustee or
liquidator (or other similar official) of the Property or any part thereof or of
any substantial portion of Tenant's property, or (2) generally not pay its debts
as they become due, or submit in writing its inability to pay its debts
generally as they become due, or (3) make a general assignment for the benefit
of its creditors, or (4) file a petition commencing a voluntary case under or
seeking to take advantage of any Bankruptcy Law, or (5) fail to controvert in
timely and appropriate manner, or in writing acquiesce to, any petition
commencing an involuntary case against Tenant or otherwise filed against Tenant
pursuant to any Bankruptcy Law, or (6) take any action in furtherance of any of
the foregoing; or

              10.1.3 If an order for relief against Tenant shall be entered in
any involuntary case under the Federal Bankruptcy Code or any similar order
against Tenant shall be entered pursuant to any other Bankruptcy Law, or if a
petition commencing an involuntary case against Tenant or proposing the
reorganization of Tenant under any Bankruptcy Law shall be filed and not be
discharged or denied within sixty (60) days after such filing, or if a
proceeding or case shall be commenced in any court of competent jurisdiction
seeking (1) the liquidation, reorganization, dissolution, winding-up or
adjustment of debts of Tenant, or (2) the appointment of a receiver, custodian,
trustee, United States Trustee or liquidator (or any similar official) of the
Property or any part thereof or of Tenant or of any substantial portion of
Tenant's property, or (3) any similar relief as to Tenant pursuant to any
Bankruptcy Law, and any such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect for sixty (60) days; or

<PAGE>

              10.1.4 If the Property shall be abandoned for a period often (10)
days or more other than in connection with a condemnation, casualty or
renovation.

         10.2 LANDLORD'S REMEDIES.

              10.2.1 If an Event of Default shall have happened and be
continuing, Landlord shall have the right at its election to give Tenant twenty
(20) days written notice of Landlord's intention to terminate the term of this
Lease on a date specified in such notice. Thereupon, the term of this Lease and
the estate hereby granted shall terminate on such date as completely and with
the same effect as if such date were the date fixed herein for the expiration of
the term of this Lease, and all rights of Tenant hereunder shall terminate, but
Tenant shall remain liable as provided herein.

              10.2.2 If an Event of Default shall have happened and be
continuing Landlord shall have the immediate right, whether or not the term of
this Lease shall have been terminated pursuant to Section 10.2.1, to (i)
re-enter and repossess the Property or any part thereof by force, summary
proceedings, ejections or otherwise and (ii) remove all persons and property
therefrom, Tenant hereby expressly waiving any and all notices to quit, cure or
vacate provided by current or any future law. Landlord shall be under no
liability by reason of any such re-entry, repossession or removal. No such
re-entry or taking of possession of the Property by Landlord shall be construed
as an election on Landlord's part to terminate the term of this Lease unless a
written notice of such intention to be given to Tenant pursuant to Section
10.2.1.

              10.2.3 At any time or from time to time after the repossession of
the Property or any part thereof pursuant to Section 10.2.2, whether or not the
term of this Lease shall have been terminated pursuant to Section 10.2.1,
Landlord may (but shall be under no obligation to) relet the Property or any
part thereof for the account of Tenant, in the name of Tenant or Landlord or
otherwise, without notice to Tenant, for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the term of this Lease) and on such conditions (which may include
concessions or free rent) and for such uses Landlord, in its absolute
discretion, may determine, and Landlord may collect and receive any rents
payable by reason of such reletting. Landlord shall not be responsible or liable
for any failure to relet the Property or any part thereof or for any failure to
collect any rent due upon any such reletting.

              10.2.4 No termination of the term of this Lease pursuant to
Section 10.2.1, by operation of law or otherwise, and no repossession of the
Property or any part thereof pursuant to Section 10.2.2 or otherwise, and no
reletting of the Property or any part thereof pursuant to Section 10.2.3, shall
relieve Tenant of its liabilities and obligations hereunder, all of which shall
survive such expiration, termination, repossession or reletting.

              10.2.5 In the event of any such termination or repossession,
Tenant will pay to Landlord the Basic Rent, Additional Rent and other sums
required to be paid by Tenant to and including the date of such termination or
repossession; and, thereafter, Tenant shall, until the end of what would have
been the term of this Lease in the absence of such termination or repossession,
and whether or not the Property or any part thereof shall have been relet, be
liable to Landlord for, and shall pay to Landlord, as liquidated and agreed
current damages: (i) the Basic Rent, Additional Rent and other sums which would
be payable under this Lease by Tenant in the absence of such termination or
repossession, less (ii) the net proceeds, if any, of any reletting effected for
the account of Tenant pursuant to Section 10.2.3, after deducting from such
proceeds all Landlord's expenses incurred in connection with such reletting
(including, without limitation, all repossession costs, brokerage commissions,
legal expenses, attorneys' fees [including an allocable portion of in-house
attorneys' fees], employees' expenses, expenses of preparation for such
reletting). Tenant will pay such current damages on the days on which the Basic
Rent would have been payable

<PAGE>

under this Lease in the absence of such termination or repossession, and
Landlord shall be entitled to recover the same from Tenant on each such day.

              10.2.6 At any time after such termination or repossession by
reason of the occurrence of any Event of Default, whether or not Landlord shall
have collected any current damages pursuant to Section 10.2.5, Landlord shall be
entitled to recover from Tenant, and Tenant shall pay to Landlord on demand, as
and for liquidated and agreed final damages for Tenant's default and in lieu of
all current damages beyond the date of such demand (it being agreed that it
would be impracticable or extremely difficult to fix the actual damages), an
amount equal to the present value of all rent payable under the Lease beyond the
date of such demand over the then present value of the then Fair Rental Value
for the Property, at the date of such demand for what would be the unexpired
term of the Lease, which present value shall in each case be determined by the
application of a discount factor of seven percent (7%) per annum; however, this
amount shall not be less than any "make whole provision" in favor of Lender in
connection with the indebtedness encumbered by this Property. If any law shall
limit the amount of such liquidated final damages to less than the amount above
agreed upon, Landlord shall be entitled to the maximum amount allowable-under
such-statute or rule of law.

              10.2.7 Notwithstanding anything to the contrary stated herein, if
an Event of Default shall have happened and be continuing, whether or not Tenant
shall have abandoned the Property, Landlord may elect to continue this Lease in
effect for so long as Landlord does not terminate Tenant's right to possession
of the Property and Landlord may enforce all of its rights and remedies
hereunder including, without limitation, the right to recover all Basic Rent,
Additional Rent and other sums payable hereunder as the same become due.

         10.3 ADDITIONAL RIGHTS OF LANDLORD. No right or remedy herein conferred
upon or reserved to Landlord is intended to be exclusive of any other right or
remedy, and each 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
or in equity or by statute. The failure of Landlord to insist at any time upon
the strict performance of any covenant or agreement or to exercise any option,
right, power or remedy contained in this Lease shall not be construed as waiver
or a relinquishment thereof for the future. A receipt by Landlord of any Basic
Rent, any Additional Rent or any 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 Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in writing and
signed by Landlord. In addition to other remedies provided in this Lease,
Landlord shall be entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of this
Lease, or to decree compelling performance of any of the covenants, agreements,
conditions or provisions of this Lease, or to any other remedy allowed to
Landlord at law or in equity.

         10.4 WAIVERS BY TENANT. Tenant hereby waives and surrenders for itself
and all those claiming under it, including creditors of all kinds, (i) any right
or privilege which it or any of them may have under any present or future
construction, statute or rule of law to redeem the Property or to have a
continuance of this Lease for the term hereby demised after termination of
Tenant's right of occupancy by order or judgment of any court or by any legal
process or writ, or under the terms of this Lease or after the termination of
the term of this Lease as herein provided, and (ii) the benefits of any present
or future constitution, statute or rule of law which exempts property from
liability for debt or for distress for rent.

         10.5 ATTORNEYS' FEES. In the event an action shall be brought for the
enforcement of any right hereunder and in connection with, but always subject
to, the indemnification provided in Section 6.10 hereof, Tenant shall be liable
for all the expenses incurred in connection therewith including attorneys' fees
(including an allocable portion of in-house attorneys' fees), provided that
should Tenant prevail in an

<PAGE>

action for violation of quiet enjoyment under this Lease, then and only in such
event shall the losing party be liable for expenses incurred in connection
therewith including attorneys' fees.

         10.6 MITIGATION. Landlord shall have the obligation to mitigate any
damages it might otherwise recover hereunder.

ARTICLE 11. MISCELLANEOUS

         11.1 NOTICES, DEMANDS AND OTHER INSTRUMENTS. All notices, demands,
requests, consents, approvals and other instruments required or permitted to be
given pursuant to the terms of this Lease shall be in writing and shall be
deemed to have been properly given if (a) with respect to Tenant, sent by
certified mail with a return receipt requested, postage prepaid, or sent by
facsimile, nationally recognized overnight express carrier or delivered by hand,
in each case addressed to Tenant at its notice address first above set forth,
and (b) with respect to Landlord, sent by registered or certified mail with a
return receipt request, postage prepaid, or sent by facsimile, nationally
recognized overnight express courier or delivered by hand in each case,
addressed to Landlord at its address first above set forth along with a copy to
Lender. Landlord and Tenant shall each have the right from time To time to
specify as its address for purposes of this Lease any other address in the
United States of America upon giving fifteen (15) days written notice thereof,
similarly given, to the other party

         11.2 ESTOPPEL CERTIFICATES AND CONSENTS.

              11.2.1 Within 10 days of Landlord's written request, Tenant shall
execute, acknowledge and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of EXHIBIT B subject
to modifications to reflect the current status of this Lease and subject to
changes requested by a prospective purchaser or lender. Any such certificate may
be relied upon by any mortgagee, prospective purchaser, or prospective mortgagee
of the Property. Tenant shall execute and deliver whatever other instruments may
be required for such purposes.

              11.2.2 From time to time during the term of this Lease, Landlord
expects to secure financing of its interest in the Property by assigning
Landlord's interest in this Lease and the sums payable hereunder. In the event
of any such assignment to Lender, Tenant will, upon not less than ten (10) days
prior request by Landlord, execute, acknowledge and deliver to Landlord a
consent clearly indicating (i) that Tenant is to make Basic Rent payments or
portions thereof directly to Lender if required by Lender and (ii) consent to
such assignment addressed-to such Lender in a form satisfactory to Lender; and
Tenant will produce, at Tenant's expense, such certificates, opinions of counsel
and other documents as may be reasonably requested-by Lender. Tenant
acknowledges that, by execution hereof, it has agreed to make payments of Basic
Rent or portions thereof directly to Lender, without further notice or
direction, if required by Lender.

         11.3 NO MERGER. There shall be no merger of this Lease or the leasehold
estate hereby created with the fee estate in the Property or any part thereof by
reason of the same person acquiring or holding, directly or indirectly, this
Lease or the leasehold estate hereby created or any interest in this Lease or in
such leasehold estate as well as the fee estate in the Property or any portion
thereof.

         11.4 SURRENDER. Upon the termination of this Lease, Tenant shall
peaceably surrender the Property to Landlord in the same condition in which they
were received from Landlord at the commencement of this Lease, except as altered
as permitted or required by this Lease and except for ordinary wear and tear.
Tenant shall remove from the Property prior to such termination all its property
that is capable of removal without causing damage to the Property, and, at
Tenant's expense, shall at such

<PAGE>

times of removal, repair any damage caused by such removal. Property not so
removed shall become the property of Landlord. Landlord may thereafter cause
such property to be removed and disposition and the cost of repairing any damage
caused by such removal shall be borne by Tenant. Notwithstanding anything to the
contrary contained herein, upon termination of this Lease pursuant to a default
by Tenant, the heating, ventilation and air conditioning systems shall remain on
the Property and shall become the property of Landlord. Any holding over by
Tenant of the Property after the expiration or earlier termination of the term
of this Lease or any extensions thereof, with the consent of Landlord, shall
operate and be construed as a tenancy from month to month only, at one hundred
fifty percent (150%) of the Basic Rent reserved herein and upon the same terms
and conditions as contained in this Lease. Notwithstanding the foregoing, any
holding over without Landlord's consent shall entitle Landlord, in addition to
collecting Basic Rent at a rate of one hundred fifty percent (150%) thereof, to
exercise all rights and remedies provided by law or in equity. If Tenant fails
to surrender the Property upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnity and hold harmless Landlord from all loss, costs,
attorneys' fees, damages and liabilities resulting from such failure, including,
without limitation, any claims made by any succeeding tenant founded upon such
failure to surrender and any lost profits to Landlord resulting therefrom.

         11.5 SEPARABILITY. Each and every covenant and agreement contained in
this Lease is separate and independent, and the breach of any thereof by
Landlord shall not discharge or relieve Tenant from any obligation hereunder. If
any term or provision of this Lease or the application thereof to any person or
circumstances or at any time to any extent be invalid and unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances or at any time other than those to which it is invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the extent permitted by law.

         11.6 SAVINGS CLAUSE. No provision contained in this Lease which
purports to obligate Tenant to pay any amount of interest or any fees, costs or
expenses which are in excess of the maximum permitted by applicable law, shall
be effective to the extent that it calls for payment of any interest or other
sums in excess of such maximum.

         11.7 BINDING EFFECT. All of the covenants, conditions and obligations
contained in this Lease shall be binding upon and inure to the benefit of the
respective successors and assigns of Landlord and Tenant to the same extent as
if each successor and assign were in each case named.

         11.8 TABLE OF CONTENTS AND HEADINGS. The table of contents and headings
used in this Lease are for convenience of reference only and shall not to any
extent have the effect of modifying, amending or changing the provisions of this
Lease.

         11.9 GOVERNING LAW/INTERPRETATION. This Lease shall be governed by and
interpreted under the laws of the State in which the Property is located. Should
any provision of this Lease require judicial interpretation, Landlord and Tenant
agree that the court interpreting or construing this Lease shall not apply a
presumption that the terms of any such provision shall be more strictly
construed against one party or the other by reason of the rule of construction
that a document is to be construed most strictly against the party who itself or
through its agent prepared the same, it being agreed that the agents of Landlord
and Tenant have participated in the preparation of this Lease.

         11.10 CERTAIN DEFINITIONS. In addition to the other terms defined in
this Lease, the following terms have the following meanings:

<PAGE>

              11.10.1 The term "Complete Taking" shall mean the occurrence of
any actual or threatened condemnation or other eminent domain proceeding
pursuant to any general or special law, or any agreement with an authority
having the power of eminent domain, which results in the taking or conveyance of
(i) the entire Property or (ii) such a significant portion of the Property that,
in the good faith judgment of Tenant or Landlord, it is either (A) uneconomic to
rebuild or restore the remaining portion of the Property for the continued
operation of the Property, or (B) otherwise commercially impracticable to
conduct its business at the Property.

              11.10.2 The term "Default Rate" means the lesser of (i) the
maximum rate permitted by applicable law, or (ii) three percentage points over
the rate being charged to Landlord by Lender.

              11.10.3 The term "Escrow Agreement" means the escrow agreement
dated contemporaneously with the date of this Lease, providing for the payment
of Basic Rent to the escrow agent for disbursement by the escrow agent attached
as Exhibit F.

              11.10.4 The term "Fair Market Value" means the amount equal to the
then prevailing market price for the Property: (i) under a lease with the same
economic terms as this Lease for a lease term of ten (10) years and with a
tenant of the same credit quality as Tenant, (ii) without taking into account
any portion of the Leased Property subject to a Complete or Partial Taking,
(iii) taking into account comparable property and improvements in comparable
locations in the city in which the Property is located, and (iv)without taking
into account in such determination any additional improvements constructed at
the Property pursuant to Section 5.3, other than in substitution of improvements
existing on the date hereof (the "Sales Price Market Rate"). The term "Fair
Rental Value" means the amount equal to the then prevailing monthly rental price
or rate for the Leased Property for a term of five (5) years: (i) taking into
account the term of this Lease, and recognizing that there will be no leasing
commissions or tenant allowances, (ii) without taking into account any portion
of the Leased Property subject to a Complete or Partial Taking, (iii) taking
into account comparable property and improvements in comparable locations in the
city in which the Leased Property is located (the "Rental Market Rate" and
together with the Sale Price Market Rate, the "Market Rate").

         Landlord and Tenant each shall select one qualified (MAI) appraiser and
inform the other as to its selection within five (5) business days after the
date of the event requiring the Market Rate determination hereunder (the
"Designation Date"). The two (2) appraisers so designated shall endeavor to
reach agreement upon the appropriate Market Rate; provided if the two (2)
appraisers are unable to reach agreement within ten (10) days after the
Designation Date, (i) if the two (2) appraisals differ from each other by ten
percent (10.0 %) or less of the higher appraisal, the average of the two (2)
appraisals shall be deemed the Market Rate, and (ii) if the two (2) appraisals
differ from each other by more than ten percent (10.0 %) of the higher
appraisal, within five (5) days of the appraisers' inability to reach agreement,
the two appraisers shall jointly appoint a third qualified appraiser who shall
make the final determination of Market Rate. Such determination by the third
appraiser shall be either of the values determined reached by the first two (2)
appraisers or a value which is in between the two (2) values determined by such
two appraisers. Such third appraiser shall be instructed to complete the
required appraisal report within twenty (20) days. The parties shall promptly
supply all information necessary to allow the appraiser(s) to perform their
respective appraisals. The Market Rate determined by the appraiser(s) in
accordance with this Agreement, Fair Market Value or Fair Rental Value, as the
case may be, shall be final and binding upon all parties, free of challenge or
review in any court. In order to be "qualified," each of said appraisers shall
have at least three (3) years of experience appraising leasehold and fee
interests with respect to commercial property in the city in which the Leased
Property is located. Landlord and Tenant shall each bear the cost of its
appraiser and one-half (1/2) of the cost of the third appraiser. Said three
appraisers shall determine the Market Rate in accordance with the parameters set
forth herein.

<PAGE>

              11.10.5 The term "Imposition" means:

                     (a) All real estate taxes imposed by governmental
authorities of any kind;

                     (b) All other taxes and any payments in lieu thereof,
assessments (including assessments for benefits from public works or
improvements, whether or not begun or completed prior to the commencement of the
term of this Lease and whether or not to be completed within said term), levies,
fees, water and sewer rents and charges, and all other governmental charges of
every kind, general and special, ordinary and extraordinary, whether or not the
same shall have been within the express contemplation of the parties hereto,
together with any interest and penalties thereon, which are, at any time,
imposed or levied upon or assessed against (A) the Property-or any part thereof;
(B) any Basic Rent, any Additional Rent reserved or payable hereunder, and/or
(C) this Lease or the leasehold estate created hereby or which arise in respect
of the operation, possession, occupancy or use of the Property.

                     (c) Any gross receipts or similar taxes imposed or levied
upon, assessed against or measured by the Basic Rent, Additional Rent or any
other sums payable by Tenant hereunder or levied upon or assessed against the
Property;

                     (d) All sales and use taxes which may be levied or assessed
against or payable by Landlord and Tenant on account of the acquisition, leasing
or use of the Property or any portion thereof including but not limited to any
taxes levied on the rental payable hereunder, but excluding any taxes assessed
on the net income of Landlord; and

                     (e) All charges for water, gas, light, heat, telephone,
electricity, power and other utilities and communications services rendered or
used on or about the Property.

                     (f) Any lien as provided in Section 5.4.

              11.10.6 The term "Landlord" means the owner, for the time being,
of the rights of the lessor under this Lease, and its successors and assigns,
and upon any assignment or transfer of such rights, except an assignment or
transfer made as security for an obligation, the assignor or transferor shall be
relieved of all future duties and obligations under this Lease, subject to the
consent of Lender, and the assignee or the transferee shall expressly agree in
writing to be bound by and to assume all the covenants of Landlord hereunder.

              11.10.7 The term "Lease" means this Standard Lease Agreement as
amended and modified from time to time together with any memorandum or short
form of lease entered into for the purpose of recording.

              11.10.8 The term "Leased Property" means the Land and the
Improvements.

              11.10.9 The term "Lender" means Pacific Crest Bank and its assigns
and any other subsequent holder of the Mortgage.

              11.10.10 The term "Mortgage" means the first lien mortgage
encumbering the Property held by the Lender or any subsequent Lender.

              11.10.11 The term "Net Award" shall mean all amounts paid as a
result of any condemnation or other eminent domain proceeding and all amounts
paid pursuant to any agreement with any condemning authority (which agreement
shall-be deemed to be a taking) which has been made in

<PAGE>

settlement of or under threat of any condemnation or other eminent domain
proceeding affecting the Property, less all expenses incurred as a result
thereof not otherwise paid by Tenant.

               11.10.12 The term "Note" means the Monthly Fixed Rate Promissory
Note in the principal amount of $1,304,818.93 made by BFG Holdings 2000, LLC,
payable to Tenant, dated contemporaneously with the date of this Lease.

               11.10.13 The term "Partial Taking" shall mean the occurrence of
any taking of a portion of the Property by condemnation or other eminent domain
proceedings, or any agreement with an authority having the power of eminent
domain, which does not result in a Complete Taking.

               11.10.14 The term "Permitted Encumbrance" means the Mortgage, the
Assignment and any other security instrument relating to the Property and this
Lease, subject to the rights of Tenant under this Lease, and securing the
borrowing by Landlord from Lender.

               11.10.15 The term "Purchase Offer" shall mean a purchase offer as
described in Article 7 with a Purchase Price (as defined in Section 7.2).

               11.10.16 The term "Purchase Price" as used in Article 7 shall
have the meaning set forth in Section 7.2.

               11.10.17 The term "Tenant's Certificate" means a written
certificate signed by the Chairman of the Board, the President or any Vice
President of Tenant.

               11.10.18 The term "Termination Date" means the date on which this
Lease terminates in accordance with its terms, and shall be any business day and
not a Saturday, Sunday or legal holiday.

         11.11 EXHIBITS. The following are exhibits referred to in this Lease,
all of which are incorporated by reference and made a part of this Lease:

                         Exhibit A:   Legal Description
                         Exhibit B:   Tenant Estoppel Certificate
                         Exhibit C:   Subordination, Non-Disturbance &
                                      Attornment Agreement
                         Exhibit D:   Memorandum of Lease
                         Exhibit E:   Guaranty
                         Exhibit F:   Escrow Agreement

         11.12 INTEGRATION. This Lease, the exhibits hereto and the memorandum,
if any, hereof, constitute the entire agreement between the parties hereto with
regard to the subject matter hereof, and supersede any prior understandings,
agreements or negotiations. This Lease may not be amended or modified except by
a writing executed by Tenant and Landlord.

         11.13 LEASE MEMORANDUM. On or before the Commencement Date, or at any
time upon ten (10) business days written notice, Landlord and Tenant shall
execute, acknowledge and deliver to the

<PAGE>

other a written Memorandum of Lease, in the form of EXHIBIT D, to be recorded in
the appropriate land records of the jurisdiction in which the Property is
located, in order to give public notice and protect the validity of this Lease.
In the event of any discrepancy between the provisions of said recorded
Memorandum of this Lease and the provisions of this Lease, the provisions of
this Lease shall prevail.

         11.14 SUBORDINATION TO FINANCING.

               11.14.1 Subject to Landlord providing a Subordination,
Non-Disturbance and Attornment Agreement as required pursuant to Section 11.14.5
with respect to each Mortgage, Tenant agrees that this Lease shall at all times
be subject and subordinate to the lien of any Mortgage, and Tenant agrees, upon
demand, without cost, to execute instruments as maybe required to further
effectuate or confirm such subordination.

               11.14.2 Except as expressly provided in this Lease by reason of
the occurrence of an Event of Default and except as provided in the
Subordination, Nondisturbance and Attornment Agreement, Tenant's tenancy and
Tenant's rights under this Lease shall not be disturbed, terminated or otherwise
adversely affected, nor shall this Lease be affected, by any default under any
Mortgage, and in the event of a foreclosure or other enforcement of any
Mortgage, or sale in lieu thereof, the purchaser at such foreclosure sale shall
be bound to Tenant for the Primary Term of this Lease and any Renewal Term, the
rights of Tenant under this Lease shall expressly survive, and this Lease shall
in all respects continue in full force and effect so long as no Event of Default
has occurred and is continuing. Tenant shall not be named as a party defendant
in any such foreclosure suit, except as may be necessary or advisable in such
proceeding.

               11.14.3 Notwithstanding the provisions of Section 11.14.1, the
holder of any Mortgage to which this Lease is subject and subordinate shall have
the right, at its sole option, at any time, to subordinate and subject the
Mortgage, in whole or in part, to this Lease by recording a unilateral
declaration to such effect.

               11.14.4 At any time prior to the expiration of the Term, Tenant
agrees, at the election and upon demand of any owner of the Property, or of a
Lender who has granted non-disturbance to Tenant pursuant to Section 11.14.1
above, to attorn, from time to time, to any such owner or Lender, upon the terms
and conditions of this Lease, for the remainder of the Term. The provisions of
this Section 11.14.4 shall inure to the benefit of any such owner or Lender,
shall apply notwithstanding that, as a matter of law, this Lease may terminate
upon the foreclosure of the Mortgage, shall be self-operative upon any such
demand, and no further instrument shall be required to give effect to said
provisions.

               11.14.5 Each of Tenant and Landlord agree to execute and deliver
(and Landlord agrees to cause each Lender to execute and deliver), from time to
time, a Subordination, Non-Disturbance & Attornment Agreement in the form of
EXHIBIT C or in such other commercially reasonable similar form as requested by
Lender.

               11.14.6 In the event that the Escrow Agreement is terminated at
any time that the Note is outstanding, Landlord and Tenant will enter into a new
escrow agreement with a mutually acceptable escrow agent on substantially
identical terms to the Escrow Agreement.

         11.15 COUNTERPARTS. This Lease may be executed in multiple
counterparts, each of which shall constitute an original part and all of which
together shall constitute one instrument.

         11.16 RIGHT OF FIRST REFUSAL. In the event that Landlord receives an
offer to purchase the Leased Property which is acceptable to Landlord, Landlord
shall provide written notice ("Offer Notice")

<PAGE>

to Tenant of each of the material terms of such offer. Tenant shall have a
period of thirty (30) days from receipt of the Offer Notice to respond to
Landlord in writing if it agrees to purchase the Leased Property pursuant to the
same terms set forth in the Offer Notice, other than any due diligence period or
termination right of the proposed purchaser, which Tenant shall not be entitled
to exercise. If Tenant exercises its right of first refusal to acquire the
Leased Property, the closing of the sale shall be on or before 45 days after
delivery of the Offer Notice. If Tenant declines to accept the Offer Notice or
fails to notify Seller in writing that it agrees to purchase the Property,
Landlord may thereafter sell the Leased Property in accordance with the terms
set forth in the Offer Notice at any time within the period 180-days following
delivery of the Offer Notice with this Lease remaining in full force and effect.

         11.17 TIME OF THE ESSENCE. Time is of the essence on the performance of
every obligation under this Lease. If the last day for the performance of any
such act is a Saturday, Sunday or legal holiday, then the time for performance
shall be extended until the next day which is not a Saturday, Sunday or legal
holiday.

         11.18 MORTGAGE PROVISIONS. To the extent that any representations,
warranties or covenants made by Landlord to Lender with respect to Section 5.3
hereof are more restrictive or impose greater obligations than are contained in
the Lease, Landlord and Tenant will negotiate by good faith to conform the
provisions of this Lease to the provisions contained in the Mortgage documents.

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

<Table>
<S>                                               <C>
LANDLORD:                                         TENANT:

SINV, LLC                                         SOURCE-HUCK STORE FIXTURE
a Delaware limited liability company              COMPANY
                                                  a Delaware corporation

By:        /s/ C. Frederick Wheba, II             By:      /s/ S. Leslie Flegel
         ----------------------------------              --------------------------------------

         Name: C. Frederick Wehba II                     Name:     S. Leslie Flegel
                                                              ---------------------------------
         Position: Manager                               Position:    Chairman and CEO
                                                                  -----------------------------
</Table><PAGE>
                                                                   Exhibit 10.30

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 21, 2002,
by and between SOURCE INTERLINK COMPANIES, INC., a Missouri corporation having
an address at 10 East 40th Street, Suite 3110, New York, New York 10016 (the
"Company"), and JOHN D'ALOIA, an individual residing at 8 East Larchmont Drive,
Colts Neck, New Jersey 07722 ("Executive").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to employ Executive and Executive desires
to provide Executive's exclusive services to the Company in connection with the
Company's business; and

         WHEREAS, both parties desire to clarify and specify the rights and
obligations which each has with respect to the other in connection with
Executive's continued employment.

         NOW, THEREFORE, in consideration of the agreements and covenants herein
set forth, the parties hereby agree as follows:

1.       EMPLOYMENT

         The Company hereby employs Executive as an Executive Vice
President/Chief Marketing Officer, and Executive hereby accepts such exclusive
employment and agrees to render Executive's exclusive services as an employee of
the Company for the term of this Agreement (as set forth in Section 5 below),
all subject to and on the terms and conditions herein set forth.

2.       DUTIES AND RESPONSIBILITIES OF EXECUTIVE

         Executive shall perform such duties as are commensurate with his
position and responsibilities, including without limitation, those enumerated in
the Job Description attached hereto as Exhibit A, as well as generally
exercising his best judgment; safeguarding and saving from waste the assets of
the Company; and following, maintaining and implementing the business plans,
budgets, business procedures and directives established and promulgated by the
Company, as modified or amended from time to time. Executive agrees to
faithfully perform such duties as the Company assigns to him; to devote the
necessary time and best efforts to the marketing of the Company's products and
services; and to endeavor to improve the Company's business for the term hereof.
Executive shall serve as a member of the Company's Executive/Management
Committee. Executive shall report to the President/Chief Operating Officer or
his designee, and shall be subject to the direction of the Company's President
and the Board of Directors, or their designees. Executive shall be available to
travel as the reasonable needs of the Company shall require.

3.       COMPENSATION

         (a) In consideration for Executive's services to be performed under
this Agreement and as compensation therefor, Executive shall receive, in
addition to all other benefits provided for in the Agreement: for the first year
of the Term (as hereinafter defined), a base salary (the "Base Salary") at a
rate of Two Hundred Fifty Thousand Dollars ($250,000) per annum; for the second
and third years of the Term (as hereinafter defined), a minimum annual base
salary at a rate of Two Hundred Fifty Thousand Dollars ($250,000) plus
increases, if any, as determined by the Company's Compensation Committee for
Executive Employees. All payments of Base Salary shall be subject to all
applicable withholdings and deductions, and shall be payable in equal
installments in accordance with the Company's normal and customary payroll
practices applicable to comparable Executives.

<PAGE>

         (b) In addition to the Base Salary, Executive shall be eligible to
receive annual bonus compensation ("Bonus Compensation") of up to $250,000 in
each of the three years of the Term, based upon Executive's performance, as
measured by the guidelines annexed hereto as Exhibit B. In the first year of the
Term (as hereinafter defined), Executive shall be guaranteed to receive at least
$50,000 in Bonus Compensation. All Bonus Compensation shall be payable within
thirty (30) days after the close of the Company's fiscal year to which the Bonus
Compensation is applicable, in one lump sum, subject to all applicable
withholding and deductions, in accordance with the Company's customary payroll
and bonus payment practices. Bonus Compensation payable hereunder shall be
prorated by reference to the days of the period ending thirty (30) days after
the close of the Company's fiscal year during which Executive was employed by
the Company.

         (c) Subject to compliance with applicable federal and state security
laws, ratification by the Company's Board of Directors, and compliance with the
terms of the applicable shareholder's agreement, Company agrees to grant to
Executive, at the time he reports to work, an option to purchase 150,000 shares
of common stock of the Company. The option to purchase 50,000 of said shares
will vest immediately upon Executive's first day of employment; an additional
50,000 will vest on his first anniversary; and the final 50,000 will vest on his
second anniversary. All such options shall be granted directly to Executive
outside of any Stock Option Plans. All such options shall (A) have an exercise
price which is equal to the closing sale price on NASDAQ on the date of grant,
which shall be Executive's first day of employment (B) be exercisable for up to
one year after the date that Executive's employment with the Company terminates,
and (C) otherwise have the same terms as options granted pursuant to the
Company's Restricted Stock Option Plan, including any restrictions on resale of
the underlying shares while Executive remains employed, except as otherwise
provided herein or in the Non-Qualified Stock Option Agreement, effective
February 1, 2002. The Board of Directors of the Company shall annually consider
issuing additional options to Executive.

4.       BENEFITS

         (a) In addition to the Base Salary and the Bonus Compensation provided
for in Section 3 above, during the term of Executive's employment with the
Company (as hereinafter defined), Executive shall be entitled to participate in
or receive benefits equivalent to any employee benefit plan or other
arrangement, including, but not limited to, medical, dental, retirement,
short-term disability, long-term disability, life insurance, sick leave and
vacation benefits, plans and arrangements, generally made available by the
Company to similar executives, subject to and on a basis consistent with the
terms, conditions and overall administration of such benefits, plans or
arrangements.

         (b) Executive shall be entitled to reimbursement for all reasonable
travel, entertainment and other expenses incurred in connection with the
Company's business, provided that such expenses are (i) pre-approved by the
Company if not in accordance with the Company's policies, and (ii) adequately
documented and vouchered in accordance with the Company's policies. Executive
may maintain membership in such professional and/or social organizations as he
deems necessary for the conduct of business, and the Company shall reimburse
Executive in an amount not to exceed Five Thousand Dollars ($5,000.00) per year
for such memberships. The Company shall provide Executive with an automobile
allowance in the amount of Eight Hundred Dollars ($800.00) per month as
reimbursement for the costs, including insurance and maintenance, of using an
automobile in connection with the Company's business.

5.       TERM OF EMPLOYMENT

         The term of Executive's employment hereunder (the "Term") shall
commence on February 1, 2002 and shall expire on January 31, 2005, unless
terminated prior thereto in accordance with Section 8 below.

6.       CONFIDENTIALITY

         (a) Executive agrees and covenants that, at any time during which
Executive is employed by the Company (which, for purpose of this Section 6 shall
include the Company's subsidiaries and affiliates) or

<PAGE>

thereafter, Executive will not (without first obtaining the express permission
of the Company) (i) at any time during employment by the Company or thereafter,
divulge to any person or entity, nor use other than in connection with the
Company's business (either by Executive or in connection with any business) any
"Confidential Information" (as hereinafter defined in Section 6(c) hereof) and
(ii) at any time during employment by the Company or thereafter, divulge to any
person or entity, nor use (either by Executive or in connection with any
business) any "Trade Secrets" (as hereinafter defined in Section 6(c) hereof) to
which Executive may have had access or which had been revealed to Executive
during the course of Executive's employment unless such disclosure is pursuant
to a court order, disclosure in litigation involving the Company or in any
reports or applications required by law to be filed with any governmental
agency, but only after no less than ten (10) days prior consultation with the
Company.

         (b) Any interest in patents, patent applications, inventions,
copyrights, developments, innovations, methods, processes, analyses, drawings,
and reports (collectively, "Inventions") which Executive may develop during the
period Executive is employed under this Agreement (either during regular
business hours or otherwise) relating to the fields in which the Company may
then be engaged shall belong to the Company; and Executive shall disclose the
Inventions to the Company and forthwith upon request of the Company, Executive
shall execute all such assignments and other documents and take all such other
action as the Company may reasonably request in order to vest in the Company all
right, title, and interest in and to the Inventions free and clear of all liens,
charges, and encumbrances.

         (c) As used in this Agreement, the term "Confidential Information"
shall mean and include all information and data in respect of the Company's
operations, financial condition, products, customers and business (including,
without limitation, artwork, photographs, specifications, facsimiles, samples,
business, marketing or promotional plans, creative written material and
information relating to characters, concepts, names, trademarks, tradenames,
tradedress and copyrights) which may be communicated to Executive or to which
Executive may have access in the course of Executive's employment by the
Company. Notwithstanding the foregoing, the term "Confidential Information"
shall not include information which:

                  (i) is, at the time of the disclosure, a part of the public
domain through no act or omission by Executive; or

                  (ii) is hereafter lawfully disclosed to Executive by a third
party who or which did not acquire the information under an obligation of
confidentiality to or through the Company.

         As used in this Agreement, the term "Trade Secrets" shall mean and
include information, without regard to form, including, but not limited to,
technical or non-technical data, a formula, a pattern, a compilation, a program,
a device, a method, a technique, a drawing, a process, financial data, financial
plans, product plans, or a list of actual or potential customers or suppliers
which is not commonly known by or available to the public and which information
(i) derives economic value, actual or potential, from not being known to, and
not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy. In
addition, the term "trade secrets" includes all information protectible as
"trade secrets" under applicable law.

         Nothing in this Section 6 shall limit any protection, definition or
remedy provided to the Company under any law, statute or legal principle
relating to Confidential Information or Trade Secrets.

         Executive agrees that at the time of leaving the employ of the Company,
Executive will deliver to the Company and not keep or deliver to anyone else,
all notes, notebooks, drawings, memoranda, documents, and in general, any and
all material relating to the business of the Company (except Executive's
personal files and records) or relating to any employee, officer, director,
agent or representative of the Company.

<PAGE>

7.       NON-COMPETITION; NON-SOLICITATION

         (a) Executive hereby agrees and covenants that during the period of
Executive's employment at the Company, Executive will not directly or indirectly
engage in or become interested (whether as an owner, principal, agent,
stockholder, member, partner, trustee, venturer, lender or other investor,
director, officer, employee, consultant or through the agency of any
corporation, limited liability company, partnership, association or agent or
otherwise) in any business or enterprise that shall, at the time, be in whole or
in substantial part competitive with any material part of the business conducted
by the Company (which, for purposes of this Section 7 shall include the
Company's subsidiaries and affiliates) during the period of Executive's
employment with the Company (except that ownership of not more than 1% of the
outstanding securities of any class of any entity that are listed on a national
securities exchange or traded in the over-the-counter market shall not be
considered a breach of this Section 7(a)).

         (b) Executive agrees and covenants that for the period commencing on
the date hereof and ending two (2) years following the termination of
Executive's employment with the Company (the "Limited Period"), Executive will
not (without first obtaining the written permission of the Company) directly or
indirectly divert or attempt to divert from the Company any business in which
the Company is engaged; provided, however, that the foregoing shall not prevent
Executive from doing business with the Company's customers and clients during
the Limited Period.

         (c) Executive agrees and covenants that for the Limited Period,
Executive will not (without first obtaining the written permission of the
Company) directly or indirectly, recruit for employment, any person who then is
an employee of the Company, or induce or seek to cause such person to terminate
his or her employment with the Company.

8.       TERMINATION

         (a) Termination with Cause. Notwithstanding the terms of this
Agreement, the Company may discharge Executive and terminate this Agreement for
cause ("Cause") in the event of (i) Executive's willful refusal or willful
failure to materially perform his duties hereunder with reasonable diligence or
to follow a lawful directive of the Company commensurate with the Executive's
position, in each such case, after Executive has been given an opportunity to
cure as provided for in paragraph 21 (other than a failure or refusal resulting
from Executive's disability), (ii) Executive's commission of an act involving
breach of any fiduciary obligations, fraud, embezzlement, theft, or unlawful
harassment based on protected status against the property or personnel of the
Company, or the Company's suppliers, vendors, or customers, (iii) Executive's
engaging in gross reckless conduct that the Company in good faith reasonably
determines will have a material adverse affect on the business, assets,
properties, results of operations or financial condition of the Company, (iv)
Executive's conviction of a felony or plea of nolo contendere in respect
thereof, or (v) Executive's engaging in any other criminal conduct that is
injurious to the Company. In the event Executive is discharged for Cause
pursuant to this Section 8(a), (i) Executive's Base Salary, Bonus Compensation
and all benefits under Section 4 hereof shall terminate immediately upon such
discharge (subject to applicable law, such as COBRA), and (ii) the Company shall
have no further obligations to Executive, except for payment and reimbursement
to Executive for any monies due to Executive, including, but not limited to, pro
rated Base Salary, which right to payment or reimbursement accrued prior to such
discharge.

         (b) Termination Without Cause. The Company may terminate Executive's
employment with the Company without Cause (as defined in Section 8(a) above) at
any time, upon written notice to Executive, and Executive shall receive upon
such termination: (1) all Base Salary due to Executive through the end of the
Term pursuant to Section 3(a) above, the pro-rated Bonus Compensation accrued as
of the date of termination, pursuant to Section 3(b) above and Exhibit B hereto;
and (3) reimbursement of all monies for which right to reimbursement accrued
prior to termination. Among the circumstances that shall be deemed to constitute
termination of Executive's employment without Cause are the following:
termination of Executive's employment for any reason not specified in paragraph
8(a)(i)-(v) of this Agreement; layoff of Executive; a substantial and material
change in Executive's duties and responsibilities to which Employee has not
agreed, and in each such case, after Company has been given an opportunity to
cure as provided for

<PAGE>

in paragraph 21; or a determination of the Board of Directors of Company to sell
or dispose of substantially all of the assets of the Company or to distribute
its assets to its shareholders in liquidation or to discontinue its business.

         (c) Voluntary Resignation. Executive may voluntarily resign his
employment with the Company at any time during the Term. In the event of such
resignation, the Company's obligations to Executive will be the same as those
set forth in Section 8(a) above in the event of a termination with Cause.

         (d) Disability. Should Executive become totally disabled, within the
meaning of the Company's long-term disability income policy and thereby become
entitled to receive long-term disability benefits under the terms of such
policy, the Company may terminate this Agreement and the Company shall have no
further obligations to Executive or his legal representatives, except for (i)
payment and reimbursement to Executive or his legal representatives for any
monies due to Executive, including, but not limited to, pro rated Base Salary
and prorated Bonus Compensation, which right to payment or reimbursement accrued
prior to such discharge, (ii) provision of the long-term disability income
policy, and (iii) any other obligations that the Company has to Executive as a
matter of law.

         (e) Death. Should Executive die during the Term, the Company shall pay
and reimburse to Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees, as
appropriate, any monies due to Executive, including, but not limited to, pro
rated Base Salary and prorated Bonus Compensation, which right to payment or
reimbursement accrued prior to Executive's death.

9.       VIOLATION OF OTHER AGREEMENTS

         Executive represents and warrants to the Company that Executive is
legally able to enter into this Agreement and accept employment with the
Company; that Executive is not prohibited by the terms of any agreement,
understanding, law or policy from entering into this Agreement; that the terms
hereof will not and do not violate or contravene the terms of any agreement,
understanding, law or policy to which Executive is or may be a party, or by
which Executive may be bound or subject; and that Executive is under no physical
or mental disability that would hinder the performance of Executive's duties
under this Agreement. Executive agrees that, as it is a material inducement to
the Company that Executive makes the foregoing representations and warranties
and that they be true in all respects, Executive shall forever indemnify and
hold the Company harmless from and against all liability, costs or expenses
(including attorney's fees and disbursements) on account of the foregoing
representations being untrue.

10.      SPECIFIC PERFORMANCE; DAMAGES

         In the event of a breach or threatened breach of the provisions of
Sections 6 or 7 hereof, Executive agrees that the injury which could be suffered
by the Company (which for purposes of this Section 10 shall include the
Company's successor-in-interest, subsidiaries and affiliates) would be of a
character which could not be fully compensated for solely by recovery of
monetary damages. Accordingly, Executive agrees that in the event of a breach or
threatened breach of Sections 6 and 7 hereof, in addition to and not in lieu of
any damages sustained by the Company and any other remedies which the Company
may pursue hereunder or under any applicable law, the Company shall have the
right to equitable relief, including but not limited to issuance of a temporary
or permanent injunction or restraining order, by any court of competent
jurisdiction against the commission or continuance of any such breach or
threatened breach, without the necessity of proving any actual damages. In
addition to, and not in limitation of the foregoing, Executive understands and
confirms that, in the event of a breach or threatened breach of Sections 6 and 7
hereof, Executive may be held financially liable to the Company for any loss
suffered by the Company as a result.

<PAGE>

11.      SUCCESSORS

         (a) This Agreement shall bind any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Company, in the same manner
and to the same extent that Company would be required to perform this Agreement
if no such succession had taken place. The foregoing rights shall include the
right of Executive's Representatives to exercise any outstanding options for so
long as such options are by their terms exercisable.

         (b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees ("Representatives").

12.      NOTICES

         Any and all notices, demands or requests required or permitted to be
given under this Agreement shall be given in writing and sent, by registered or
certified U.S. mail, return receipt requested, by hand, or by overnight courier,
addressed to the parties hereto at their addresses set forth above or such other
addresses as they may from time-to-time designate by written notice, given in
accordance with the terms of this Section, together with copies thereof as
follows:

         In the case of the Company, with a copy simultaneously by like means
to:

         Mr. James Gillis
         Source Interlink Companies, Inc.
         10 East 40th Street, Suite 3110
         New York, New York  10016

Notice given as provided in this Section shall be deemed effective: (i) on the
date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, and (iii) on the seventh calendar day (or, if it
is not a business day, then the next succeeding business day thereafter) after
the depositing thereof into the exclusive custody of the U.S. Postal Service.

13.      WAIVERS

         No waiver by any party of any default with respect to any provision,
condition or requirement hereof shall be deemed to be a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

14.      PRESERVATION OF INTENT

         Should any provision of this Agreement be determined by a court having
jurisdiction in the premises to be illegal or in conflict with any laws of any
state or jurisdiction or otherwise unenforceable, the Company and Executive
agree that such provision shall be modified to the extent legally possible so
that the intent of this Agreement may be legally carried out.

15.      ENTIRE AGREEMENT

         This Agreement sets forth the entire and only agreement or
understanding between the parties relating to the subject matter hereof and
supersedes and cancels all previous agreements, negotiations, letters of intent,
correspondence, commitments and representations in respect thereof among them,
and no party shall be bound by any conditions, definitions, warranties or
representations with respect to the subject matter of this Agreement, except as
provided in this Agreement.

<PAGE>

16.      INUREMENT; ASSIGNMENT

         The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon any successor of the Company
or to the business of the Company, subject to the provisions hereof. The Company
may assign this Agreement to any person, firm or corporation controlling,
controlled by, or under common control with the Company. Neither this Agreement
nor any rights or obligations of Executive hereunder shall be transferable or
assignable by Executive.

17.      AMENDMENT

         This Agreement may not be amended in any respect except by an
instrument in writing signed by the parties hereto.

18.      HEADINGS

         The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.

19.      COUNTERPARTS

         This Agreement may be executed in any number of original or facsimile
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.

20.      GOVERNING LAW; DISPUTES

         This Agreement shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York, without giving
reference to principles of conflict of laws. Any controversy or claim arising
out of or relating to the enforcement of the terms of this Agreement or
contesting the termination of the employment relationship, must be submitted for
final and binding resolution by a private and impartial arbitrator, to be
jointly selected by Executive and the Company as provided below.

         (a) Claims Covered. This agreement to submit to arbitration:

                  (i) Covers any dispute concerning the arbitrability of any
such controversy or claim; and

                  (ii) Claims not excluded by subparagraph (b), whether made
against the Company, any of its subsidiary or affiliated entities, or its
individual officers or directors (in an official or personal capacity)including,
but not limited to, any claim that could be asserted in court or before an
administrative agency or claims for which the Executive has an alleged cause of
action, including without limitation claims for breach of any contract or
covenant (express or implied), tort claims, claims for discrimination (including
but not limited to discrimination based on sex, pregnancy, race, national or
ethnic origin, age, religion, creed, marital status, sexual orientation, mental
or physical disability, medical condition or other characteristics protected by
statute), claims for wrongful discharge, and/or claims for violation of any
federal, state, or other law, statute, regulation, or ordinance, and whether
based on statute or common law; and

          (b) Claims Not Covered. Claims covered by this Agreement do not
include:

<PAGE>

                  (i) A claim for workers' compensation benefits;

                  (ii) A claim for unemployment compensation benefits;

                  (iii) A claim by the Company, for injunctive or other
equitable relief including but not limited to claims for unfair competition and
the use or unauthorized disclosure of trade secrets or confidential information,
for which the Company may seek and obtain relief from a court of competent
jurisdiction; and

                  (iv) A claim based upon the Company Employee benefits and/or
welfare plans that contain an appeal procedure or other procedure for the
resolution of disputes under the plan,

          (c) Binding Arbitration. Either party may submit a covered dispute for
resolution by final binding arbitration. Arbitration shall be initiated by one
party making written demand upon the other party and simultaneously filing the
demand together with required fees in the office of the American Arbitration
Association ("AAA") in New York, New York. The arbitration proceeding shall be
conducted by a single arbitrator in accordance with the AAA Employment Dispute
Resolution Rules. These Rules, incorporated by reference into this Procedure,
include (but are not limited to) the procedures for the joint selection of an
impartial arbitrator and for the hearing of evidence before the arbitrator. The
arbitration award shall be a final and binding determination of the dispute and
shall be fully enforceable as an arbitration award in any court having
jurisdiction and venue over such parties. The arbitrator shall have the
authority to allow for appropriate discovery and exchange of information before
a hearing, including (but not limited to) production of documents, information
requests, depositions, and subpoenas.

                  (i) Any conflict between the rules and procedures set forth in
the AAA rules and those set forth in this Agreement shall be resolved in favor
of those in this Agreement.

                  (ii) The burden of proof at an arbitration shall at all times
be on the party seeking relief.

                  (iii) In reaching a decision, the arbitrator shall apply the
governing substantive law applicable to the claims, causes of action, and
defenses asserted by the parties. The arbitrator shall have the power to award
all remedies, including the award of attorneys fees and costs, that could be
awarded by a court or administrative agency in accordance with the governing and
applicable substantive law.

          (d) Time Limits and Procedures. The aggrieved party must give written
notice of any claim to the other party within the legally applicable limitations
of time; otherwise, the claim shall be void and deemed waived. The written
notice shall describe the nature of all claims asserted and the facts upon which
those claims are based and shall be mailed to the other party by certified or
registered mail, return receipt requested.

<PAGE>

                  (i) Any arbitration conducted under this Agreement shall take
place in New York, New York, unless an alternative location is chosen by the
mutual agreement of the parties. The arbitrator shall render a decision and
award within 30 days after the close of the arbitration hearing or at any later
time on which the parties may agree. The award shall be in writing and signed
and dated by the arbitrator and shall contain express findings of fact and the
basis for the award.

                  (ii) The parties agree to share equally the AAA administrative
fees and the arbitrator's fees and expenses. Except as provided for in paragraph
c(iii) above, all other costs and expenses associated with the arbitration,
including, without limitation each party's respective attorneys' fees, shall be
borne by the party incurring the expense.

                  (iii) Judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction. The award may be vacated or
modified only on the grounds specified in the U. S. Arbitration Act or other
applicable law.

          (e) No Retaliation. Under no circumstance will the Executive be
retaliated against in any way for invoking this arbitration procedure in good
faith to seek the resolution of a dispute.

          (f) Effect of Signature/Waiver of Right to Proceed in Court. By
signatures below, both parties indicate their respective agreement to the terms
set forth above. Both parties understand that by agreeing to the terms in this
arbitration procedure, both are giving up any constitutional or statutory right
they may possess to have covered claims decided in a court of law before a judge
or a jury.

21.      RIGHT TO CURE

         No breach or default of paragraphs 8(a)(i) and 8(b) (relating to a
substantial and material change in Executive's duties and responsibilities to
which Executive has not agreed) of this Agreement shall be deemed to have
occurred unless and until: (i) the non-defaulting party shall have given the
defaulting party written notice to cure stating with reasonable specificity the
nature of the alleged breach or default and the remedial action required and
(ii) ten business days from receipt of the notice shall have elapsed with the
breach or default remaining uncured.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                         EXECUTIVE:

                                         /s/ John D'Aloia
                                         ---------------------------------------
                                         John D'Aloia

                                         COMPANY:

                                         /s/ Source Interlink Companies, Inc.
                                         ---------------------------------------
                                         SOURCE INTERLINK COMPANIES, INC.

                                         By:      /s/ James R. Gillis
                                             -----------------------------------
                                         Name:    James R. Gillis
                                              ----------------------------------
                                         Title:     President and COO
                                               ---------------------------------

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