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                                                                    Exhibit 10.6

(AIR COMMERCIAL REAL ESTATE ASSOCIATION LOGO)

                         STANDARD INDUSTRIAL/COMMERCIAL
                           MULTI-TENANT LEASE - GROSS
                     AIR COMMERCIAL REAL ESTATE ASSOCIATION

1. BASIC PROVISIONS ("BASIC PROVISIONS").

     1.1 Parties: This Lease ("Lease"), dated for reference purposes only May
21, 2004, is made by and between Edward A. Money and Marilyn J. Money, Trustees
of the Money Family Trust dated February 21, 1991 ______________________________
_____________________________________________________________________ ("Lessor")
and Collegiate Pacific, Inc., a Delaware corporation ___________________________
________________________________________________________________________________
____________________________________________________("Lessee"), (collectively
the "Parties", or individually a "Party").

     1.2(a) PREMISES: That certain portion of the Project (as defined below),
including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by the street address of 1180 California Street,
Ste. A, located in the City of Corona, County of Riverside, State of California,
with zip code __________, as outlined on Exhibit A attached hereto ("Premises"}
and generally described as (describe briefly the nature of the Premises): An
approximately 27, 695 Sq. Ft. portion of an approximately 58,695 Sq. Ft.
free-standing building.
________________________________________________________________________________

In addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the building
containing the Premises ("Building") or to any other buildings in the Project.
The Premises, the Building, the Common Areas, the land upon which they are
located, along with all other buildings and improvements thereon, are herein
collectively referred to as the "Project." (See also Paragraph 2.)

     1.2(b) PARKING: fifty-five (55) unreserved vehicle parking spaces, see
Paragraph 53 in the Addendum. ("Unreserved Parking Spaces"); and ---____________
reserved vehicle parking spaces ("Reserved Parking Spaces"). (See also Paragraph
2.6.)

     1.3 TERM: five (5) years and -0- months ("Original Term") commencing August
15th, 2004 ("Commencement Date") and ending August 14, 2009 ("Expiration Date").
(See also Paragraph 3.)

     1.4 EARLY POSSESSION: Yes ("Early Possession Date"). (See also Paragraphs
3.2 and 3.3.)

     1.5 BASE RENT $11,355.00 per month ("Base Rent"), payable on the First
(1st) day of each month commencing August 15, 2004. (See also Paragraph 4.)

[X]  If this box is checked, there are provisions in this Lease for the Base
     Rent to be adjusted.

     1.6 LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: TBD percent (47.2%)
("Lessee's Share").

     1.7 BASE RENT AND OTHER MONIES PAID UPON EXECUTION:

          (a) BASE RENT $11,355.00 for the period August 15, 2004 through
September 15, 2004

          (b) COMMON AREA OPERATING EXPENSES: $_______ for the period __________

          (c) SECURITY DEPOSIT $12,780.00 ("Security Deposit"). (See also
Paragraph 5.)

          (d) OTHER: $ N/A for _________________________________________________

          (e) TOTAL DUE UPON EXECUTION OF THIS LEASE: $24,135.00

     1.8 AGREED USE: Offices, storage and wholesale of sporting goods products,
and light manufactured as permitted by the city of Corona _____________________
________________________________________________________________________. (See
also Paragraph 6.)

     1.9 INSURING PARTY. Lessor is the "Insuring Party". (See also Paragraph
8.)

     1.10 REAL ESTATE BROKERS: (See also Paragraph 15.)

          (a) REPRESENTATION: The following real estate brokers (the "Brokers")
and brokerage relationships exist in this transaction (check applicable boxes):

[X]  NAI Capital Commercial, Paul Fisher/David Knowlton represents Lessor
     exclusively ("Lessor's Broker");

[X]  Martin Associates, Ken Tressen represents Lessee exclusively ("Lessee's
     Broker"); or

[ ]  N/A represents both Lessor and Lessee ("Dual Agency").

          (b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a
separate written agreement for the brokerage services rendered by the Brokers).

     1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by Larry's Thunderbird and Mustang Parts ("Guarantor"). (See also
Paragraph 37.)

     1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 50 through 58 and Exhibits A through C, all of which
constitute a part of this Lease.

2. PREMISES.

     2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less.

     2.2 CONDITION. Lessor shall deliver that portion of the Premises contained
within the Building ("UNIT") to Lessee broom clean and free of debns on the
Commencement Date or the Early Possession Date, whichever first occurs ("START
DATE"), and, so long as the required service contracts described in Paragraph
7.1(b) below are obtained by Lessee and in effect within thirty days following
the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"), loading
doors, if any, and all other such elements in the Unit, other than those
constructed by Lessee, shall be in good operating condition on said date and
that the structural elements of the roof, bearing walls and foundation of the
Unit shall be free of material defects. If a non-compliance with such warranty
exists as of the Start Date, or if one of such systems or elements should

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malfunction or fail within the appropriate warranty period, Lessor shall, as
Lessor's sole obligation with respect to such matter, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance,
malfunction or failure, rectify same at Lessor's expense. The warranty periods
shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to
the remaining systems and other elements of the Unit. If Lessee does not give
Lessor the required notice within the appropriate warranty period, correction of
any such non-compliance, malfunction or failure shall be the obligation of
Lessee at Lessee's sole cost and expense (except for the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).

     2.3 COMPLIANCE. Lessor warrants that the improvements on the Premises and
the Common Areas comply with the building codes that were in effect at the time
that each such improvement, or portion thereof, was constructed, and also with
all applicable laws, covenants or restrictions of record, regulations, and
ordinances in effect on the Start Date ("APPLICABLE REQUIREMENTS"). Said
warranty does not apply to the use to which Lessee will put the Premises or to
any Alterations or Utility Installations (as defined in Paragraph 7.3(a).) made
or to be made by Lessee. NOTE: LESSEE IS RESPONSIBLE FOR DETERMINING WHETHER OR
NOT THE ZONING IS APPROPRIATE FOR LESSEE'S INTENDED USE, AND ACKNOWLEDGES THAT
PAST USES OF THE PREMISES MAY NO LONGER BE ALLOWED. If the Premises do not
comply with said warranty, Lessor shall, except as otherwise provided, promptly
after receipt of written notice from Lessee setting forth with specificity the
nature and extent of such non-compliance, rectify the same at Lessor's expense.
If Lessee does not give Lessor written notice of a non-compliance with this
warranty within 6 months following the Start Date, correction of that
non-compliance shall be the obligation of Lessee at Lessee's sole cost and
expense. If the Applicable Requirements are hereafter changed so as to require
during the term of this Lease the construction of an addition to or an
alteration of the Unit, Premises and/or Building, the remediation of any
Hazardous Substance, or the reinforcement or other physical modification of the
Unit, Premises and/or Building ("CAPITAL EXPENDITURE"), Lessor and Lessee shall
allocate the cost of such work as follows:

          (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises by
Lessee as compared with uses by tenants in general, Lessee shall be fully
responsible for the cost thereof, provided, however, that if such Capita!
Expenditure is required during the last 2 years of this Lease and the cost
thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease
unless Lessor notifies Lessee, in writing, within 10 days after receipt of
Lessee's termination notice that Lessor has elected to pay the difference
between the actual cost thereof and the amount equal to 6 months' Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises without commencing such Capital
Expenditure.

          (b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay for
the portion of such costs reasonably attributable to the Premises pursuant to
the formula set out in Paragraph 7.1(d); provided, however, that if such Capital
Expenditure is required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay its share
thereof, Lessor shall have the option to terminate this Lease upon 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10
days after receipt of Lessor's termination notice that Lessee will pay for such
Capital Expenditure. If Lessor does not elect to terminate, and fails to tender
its share of any such Capital Expenditure, Lessee may advance such funds and
deduct same, with Interest, from Rent until Lessor's share of such costs have
been fully paid. If Lessee is unable to finance Lessor's share, or if the
balance of the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the
right to terminate this Lease upon 30 days written notice to Lessor.

          (c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall be
fully responsible for the cost thereof, and Lessee shall not have any right to
terminate this Lease.

     2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's intended use, (b) Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and (c) neither Lessor,
Lessor's agents, nor Brokers have made any oral or written representations or
warranties with respect to said matters other than as set forth in this Lease.
In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises or warranties concerning Lessee's ability to honor the Lease or
suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility
to investigate the financial capability and/or suitability of all proposed
tenants.

     2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.

     2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "PERMITTED SIZE
VEHICLES." Lessor may regulate the loading and unloading of vehicles by adopting
Rules and Regulations as provided in Paragraph 2.9. No vehicles other than
Permitted Size Vehicles may be parked in the Common Area without the prior
written permission of Lessor.

     (a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.

     (b) Lessee shall not service or store any vehicles in the Common Areas.

     (c) If Lessee permits or allows any of the prohibited activities described
in this Paragraph 2.6, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

     2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project and interior utility raceways and Installations within the Unit
that are provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.

     2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

     2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable rules and regulations ("RULES AND REGULATIONS") for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said Rules and Regulations by
other tenants of the Project.

     2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:

     (a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways;

     (b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;

     (c) To designate other land outside the boundaries of the project to be a
part of the Common Areas;

     (d) To add additional buildings and improvements to the Common Areas;

     (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and

     (f) To do and perform such other acts and make such other changes in, to or
with respect to the Common Areas and Project as Lessor may, in the exercise of
sound business judgment, deem to be appropriate.

3. TERM.

     3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

     3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Lessee's Share of Common
Area Operating Expenses, Real Property Taxes and insurance premiums and to
maintain the Premises) shall, however, be in effect during such period. Any such
early possession shall not affect the Expiration Date.

     3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be obligated to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession is not delivered within 60 days after
the Commencement Date, Lessee may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written

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notice is not received by Lessor within said 10 day period, Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Lessee by the Start Date and Lessee does not terminate this Lease,
as aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms hereof,
but minus any days of delay caused by the acts or omissions of Lessee. If
possession of the Premises is not delivered within 4 months after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing.

     3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender possession of
the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5}. Pending delivery of such evidence, Lessee
shall be required to perform ail of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor's
election to withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.

4. RENT.

     4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("RENT").

     4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6.) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:

     (a) "Common Area Operating Expenses" are defined, for purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and operation
of the Project, including, but not limited to, the following;

          (i) The operation, repair and maintenance, in neat, clean, good order
and condition, but not the replacement (see subparagraph (e)), of the following:

               (aa) The Common Areas and Common Area improvements, including
parking areas, loading and unloading areas, trash areas, roadways, parkways,
walkways, driveways, landscaped areas, bumpers, irrigation systems, Common Area
lighting facilities, fences and gates, elevators, roofs, and roof drainage
systems.

               (bb) Exterior signs and any tenant directories.

               (cc) Any fire sprinkler systems.

          (ii) The cost of water, gas, electricity and telephone to service the
Common Areas and any utilities not separately metered.

          (iii) Trash disposal, pest control services, property management,
security services, and the costs of any environmental inspections.

          (iv) Reserves set aside for maintenance and repair of Common Areas.

          (v) Any increase above the Base Real Property Taxes (as defined in
Paragraph 10).

          (vi) Any "Insurance Cost Increase" (as defined in Paragraph 8).

          (vii) Any deductible portion of an insured loss concerning the
Building or the Common Areas.

          (viii) The cost of any Capital Expenditure to the Building or the
Project not covered under the provisions of Paragraph 2.3 provided; however,
that Lessor shall allocate the cost of any such Capital Expenditure over a 12
year period and Lessee shall not be required to pay more than Lessee's Share of
1/144th of the cost of such Capital Expenditure in any given month.

          (ix) Any other services to be provided by Lessor that are stated
elsewhere in this Lease to be a Common Area Operating Expense.

     (b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Unit, the Building or to any other building in
the Project or to the operation, repair and maintenance thereof, shall be
allocated entirely to such Unit, Building, or other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Project.

     (c) The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to
either have said improvements or facilities or to provide those services unless
the Project already has the same, Lessor already provides the services, or
Lessor has agreed elsewhere in this Lease to provide the same or some of them.

     (d) Lessee's Share of Common Area Operating Expenses shall be payable by
Lessee within 10 days after a reasonably detailed statement of actual expenses
is presented to Lessee. At Lessor's option, however, an amount may be estimated
by Lessor from time to time of Lessee's Share of annual Common Area Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12 month period of the Lease term, on the same day as the
Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days after
the expiration of each calendar year a reasonably detailed statement showing
Lessee's Share of the actual Common Area Operating Expenses incurred during the
preceding year. If Lessee's payments under this Paragraph 4.2(d) during the
preceding year exceed Lessee's Share as indicated on such statement, Lessor
shall credit the amount of such over-payment against Lessee's Share of Common
Area Operating Expenses next becoming due. If Lessee's payments under this
Paragraph 4.2(d) during the preceding year were less than Lessee's Share as
indicated on such statement, Lessee shall pay to Lessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee of the statement.

     (e) When a capital component such as the roof, foundations, exterior walls
or a Common Area capital improvement, such as the parking lot paving, elevators,
fences, etc. requires replacement, rather than repair or maintenance, Lessor
shall, at Lessor's expense, be responsible for such replacement. Such expenses
and/or costs are not Common Area Operating Expenses.

     4.3 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor in
lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating. In the event that any check,
draft, or other instrument of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any portion
of the Security Deposit, Lessee shall within 10 days after written request
therefor deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the increased Base Rent as the
initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor's reasonable judgment, to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and following
such change the financial condition of Lessee is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall deposit such additional monies
with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No part of the Security Deposit shall be
considered to be held in trust, to bear interest or to be prepayment for any
monies to be paid by Lessee under this Lease.

6. USE.

     6.1 USE. Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of
or causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notification of same, which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use.

     6.2 HAZARDOUS SUBSTANCES.

          (a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as
used in this Lease shall mean any product, substance, or waste whose presence,
use, manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements, is

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not a Reportable Use, and does not expose the Premises or neighboring property
to any meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may condition its consent to any
Reportable Use upon receiving such additional assurances as Lessor reasonably
deems necessary to protect itself, the public, the Premises and/or the
environment against damage, contamination, Injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration
or termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit.

          (b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor, and provide Lessor
with a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.

          (c) LESSEE REMEDIATION. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Lessee, or any third
party.

          (d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project). Lessee's obligations
shall include, but not be limited to, the effects of any contamination or injury
to person, property or the environment created or suffered by Lessee, and the
cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of
such agreement.

          (e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which existed as a result of Hazardous Substances on the
Premises prior to the Start Date or which are caused by the gross negligence or
willful misconduct of Lessor, its agents or employees. Lessor's obligations, as
and when required by the Applicable Requirements, shall include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

          (f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date, unless such
remediation measure is required as a result of Lessee's use (including
"Alterations", as defined in paragraph 7.3(a) below) of the Premises, in which
event Lessee shall be responsible for such payment. Lessee shall cooperate fully
in any such activities at the request of Lessor, including allowing Lessor and
Lessor's agents to have reasonable access to the Premises at reasonable times in
order to carry out Lessor's investigative and remedial responsibilities.

          (g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition (see
Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally
responsible therefor (In which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessors desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.

     6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in this Lease. Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire Insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said
requirements are now in effect or become effective after the Start Date. Lessee
shall, within 10 days after receipt of Lessor's written request, provide Lessor
with copies of all permits and other documents, and other information evidencing
Lessee's compliance with any Applicable Requirements specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the failure of Lessee
or the Premises to comply with any Applicable Requirements.

     6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's "Lender" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Lessee with this Lease. The cost of any such inspections shall be paid by
Lessor, unless a violation of Applicable Requirements, or a contamination is
found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such Inspection, so long as such Inspection is reasonably
related to the violation or contamination.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS.

     7.1 LESSEE'S OBLIGATIONS.

          (a) In General. Subject to the provisions of Paragraph 2. 2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility Installations (intended for Lessee's exclusive use, no matter where
located), and Alterations in good order, condition and repair (whether or not
the portion of the Premises requiring repairs, or the means of repairing the
same, are reasonably or readily accessible to Lessee, and whether or not the
need for such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises), including, but not limited
to, all equipment or facilities, such as plumbing, HVAC equipment, electrical,
lighting facilities, boilers, pressure vessels, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, and skylights but excluding any items which are the responsibility of
Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good
order, condition and repair, shall exercise and perform good maintenance
practices, specifically including the procurement and maintenance of the service
contracts required by Paragraph 7.1(b) below. Lessee's obligations shall
include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.

          (b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense, procure
and maintain contracts, with copies to Lessor, in customary form and substance
for, and with contractors specializing and experienced in the maintenance of the
following equipment and Improvements, if any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii)
clarifiers, and (iv) any other equipment, if reasonably required by Lessor.
However, Lessor reserves the right, upon notice to Lessee, to procure and
maintain any or all of such service contracts, and if Lessor so elects, Lessee
shall reimburse Lessor, upon demand, for the cost thereof.

          (c) FAILURE TO PERFORM. If Lessee falls to perform Lessee's
obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days' prior written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such obligations on Lessee's
behalf, and put the Premises in good order, condition and repair, and Lessee
shall promptly reimburse Lessor for the cost thereof.

          (d) REPLACEMENT. Subject to Lessee's indemnification of Lessor as set
forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if an item described in Paragraph 7.1(b) cannot be repaired other
than at a cost which is in excess of 50% of the cost of replacing such item,
then such item shall be replaced by Lessor, and the cost thereof shall be
prorated between the Parties and Lessee shall only be obligated to pay, each
month during the remainder of the term of this Lease, on the date on which Base
Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of
which is 144 (ie. 1/144th of the cost per month). Lessee shall pay interest on
the unamortized balance at a rate that is commercially reasonable in the
judgment of Lessor's accountants. Lessee may, however, prepay its obligation at
any time.

     7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility
systems serving the Common Areas and all parts thereof, as well as providing
the services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or
replace windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.

     7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

          (a) DEFINITIONS. The term "Utility Installations" refers to all floor
and window coverings, air lines, power panels, electrical distribution, security
and fire protection systems, communication systems, lighting fixtures, HVAC
equipment, plumbing, and fencing in or on the Premises. The term "TRADE
FIXTURES" shall mean Lessee's machinery and equipment that can be removed
without doing material damage to the Premises. The term "ALTERATIONS" shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "LESSEE

                                  Page 4 of 12

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Owned Alterations and/or Utility Installations" are defined as Alterations
and/or Utility Installations made by Lessee that are not yet owned by Lessor
pursuant to Paragraph 7.4(a).

          (b) CONSENT. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month's
Base Rent in the aggregate or a sum equal to one month's Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or Install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility installation and/or upon Lessee's
posting an additional Security Deposit with Lessor.

          (c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs.

     7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

          (a) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Lessor and be surrendered by Lessee with the
Premises.

          (b) REMOVAL. By delivery to Lessee of written notice from Lessor not
earlier than 90 and not later than 30 days prior to the end of the term of this
Lease, Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

          (c) SURRENDER; RESTORATION. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if
this Lease is for 12 months or less, then Lessee shall surrender the Premises in
the same condition as delivered to Lessee on the Start Date with NO allowance
for ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Lessee. Lessee shall also completely
remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Project) even
if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.

8. INSURANCE; INDEMNITY.

     8.1 PAYMENT OF PREMIUM INCREASES.

          (a) As used herein, the term "INSURANCE COST INCREASE" is defined as
any increase in the actual cost of the Insurance applicable to the Building
and/or the Project and required to be carried by Lessor, pursuant to Paragraphs
8.2(b), 8.3(a) and 8.3(b), ("Required Insurance"), over and above the Base
Premium, as hereinafter defined, calculated on an annual basis. Insurance Cost
Increase shall include, but not be limited to, requirements of the holder of a
mortgage or deed of trust covering the Premises, Building and/or Project,
increased valuation of the Premises, Building and/or Project, and/or a general
premium rate increase. The term Insurance Cost Increase shall not, however,
include any premium increases resulting from the nature of the occupancy of any
other tenant of the Building. If the parties insert a dollar amount in Paragraph
1.9, such amount shall be considered the "BASE PREMIUM." The Base Premium shall
be the annual premium applicable to the 12 month period immediately preceding
the Start Date. If, however, the Project was not insured for the entirety of
such 12 month period, then the Base Premium shall be the lowest annual premium
reasonably obtainable for the Required Insurance as of the Start Date, assuming
the most nominal use possible of the Building. In no event, however, shall
Lessee be responsible for any portion of the premium cost attributable to
liability insurance coverage in excess of $2,000,000 procured under Paragraph
8.2(b).

          (b) Lessee shall pay any Insurance Cost increase to Lessor pursuant to
Paragraph 4.2. Premiums for policy periods commencing prior to, or extending
beyond, the term of this Lease shall be prorated to coincide with the
corresponding Start Date or Expiration Date.

     8.2 LIABILITY INSURANCE.

          (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as
an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000, an "Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the "Amendment of the Pollution Exclusion Endorsement" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any Intra-insured exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this Lease as an "INSURED
CONTRACT" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit the liability of
Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall be primary to and not contributory with any similar insurance
earned by Lessor, whose insurance shall be considered excess insurance only.

          (b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.

     8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.

          (a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force a
policy or policies of insurance in the name of Lessor, with loss payable to
Lessor, any ground-lessor, and to any Lender insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cast of the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee's personal property shall be insured
by Lessee under Paragraph 8.4. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence.

          (b) RENTAL VALUE. Lessor shall also obtain and keep in force a policy
or policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days ("RENTAL VALUE INSURANCE"). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period.

          (c) ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Project if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.

          (d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party, Lessor
shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.

     8.4 LESSEE'S PROPERTY; BUSINESS INTERRUPTION INSURANCE.

          (a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.

          (b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of
income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.

          (c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance

                                  Page 5 of 12

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specified herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.

     8.5 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
Insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 30 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or the length of
the remaining term of this Lease, whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.

     8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.

     8.7 INDEMNITY. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises. Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters. Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.

     8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor nor from the failure of Lessor to enforce
the provisions of any other lease in the Project. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.

9. DAMAGE OR DESTRUCTION.

     9.1 DEFINITIONS.

          (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.

          (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations and Trade Fixtures, which cannot reasonably be repaired in
3 months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

          (c) "INSURED LOSS" shall mean damage or destruction to improvements on
the Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.

          (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.

          (e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.

     9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds as and when required to
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.

     9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either; (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
30 days after receipt by Lessor of knowledge of the occurrence of such damage.
Such termination shall be effective 60 days following the date of such notice.
In the event Lessor elects to terminate this Lease, Lessee shall have the right
within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.

     9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

     9.5 DAMAGE NEAR END OF TERM. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage in insurance proceeds {or adequate assurance thereof) needed to
make the repairs on or before the earlier of (i) the date which is 10 days after
Lessee's receipt of Lessor's written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds. Lessor
shall, at Lessor's commercially reasonable expense, repair such damage as soon
as reasonably possible and this Lease shall continue in full force and effect.
If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee's option shall be extinguished.

     9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.

          (a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

          (b) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

     9.7 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment

                                  Page 6 of 12

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shall be made concerning advance Base Rent and any other advance payments made
by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee's Security Deposit as has not been, or is not then required to be, used
by Lessor.

     9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.

10. REAL PROPERTY TAXES.

     10.1 DEFINITIONS.

          (a) "REAL PROPERTY TAXES." As used herein, the term "REAL PROPERTY
TAXES" shall include any form of assessment; real estate, general, special,
ordinary or extraordinary, or rental levy or tax (other than inheritance,
personal income or estate taxes); improvement bond; and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the Project,
Lessor's right to other income therefrom, and/or Lessor's business of leasing,
by any authority having the direct or indirect power to tax and where the funds
are generated with reference to the Project address and where the proceeds so
generated are to be applied by the city, county or other local taxing authority
of a jurisdiction within which the Project is located. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring during the term of this
Lease, including but not limited to, a change in the ownership of the Project or
any portion thereof or a change in the improvements thereon.

          (b) "BASE REAL PROPERTY TAXES." As used herein, the term "BASE REAL
PROPERTY TAXES" shall be the amount of Real Property Taxes, which are assessed
against the Premises, Building, Project or Common Areas in the calendar year
during which the Lease is executed. In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year based
upon the number of days which such calendar year and tax year have in common.

     10.2 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes applicable
to the Project, and except as otherwise provided in Paragraph 10.3, any
increases in such amounts over the Base Real Property Taxes shall be included in
the calculation of Common Area Operating Expenses in accordance with the
provisions of Paragraph 4.2.

     10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional Improvements placed upon the Project by
other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at
the time Common Area Operating Expenses are payable under Paragraph 4.2, the
entirety of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the Premises by
Lessee or at Lessee's request.

     10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.

     10.5 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises. When possible, Lessee shall cause its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor. If any of Lessee's said property shall be
assessed with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee's property.

11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, if at any time in Lessor's sole judgment, Lessor determines that
Lessee is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Lessee is generating such a large volume of
trash as to require an increase in the size of the dumpster and/or an increase
in the number of times per month that the dumpster is emptied, then Lessor may
increase Lessee's Base Rent by an amount equal to such increased costs.

12. ASSIGNMENT AND SUBLETTING.

     12.1 LESSOR'S CONSENT REQUIRED.

          (a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "ASSIGN OR ASSIGNMENT") or sublet
all or any part of Lessee's interest in this Lease or in the Premises without
Lessor's prior written consent.

          (b) A change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of 25% or more of the
voting control of Lessee shall constitute a change in control for this purpose.

          (c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
transfer, leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which the Lessor has
consented, or as it exists immediately prior to said transaction or transactions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. "NET WORTH OF
LESSEE" shall mean the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles.

          (d) An assignment or subletting without consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects
to treat such unapproved assignment or subletting as a noncurable Breach, Lessor
may either: (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. Further,
in the event of such Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to similar
adjustment to 110% of the price previously in effect, and (ii) all fixed and
non-fixed rental adjustments scheduled during the remainder of the Lease term
shall be increased to 110% of the scheduled adjusted rent.

          (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall
be limited to compensatory damages and/or injunctive relief.

     12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

          (a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

          (b) Lessor may accept Rent or performance of Lessee's obligations from
any person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or Breach.

          (c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.

          (d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee
or sublessee, without first exhausting Lessor's remedies against any other
person or entity responsible therefore to Lessor, or any security held by
Lessor.

          (e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,000 or
10% of the current monthly Base Rent applicable to the portion of the Premises
which is the subject of the proposed assignment or sublease, whichever is
greater, as consideration for Lessor's considering and processing said request.
Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested.

          (f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.

     12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed Included in all subleases under
this Lease whether or not expressly incorporated therein:

          (a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such Rent
and apply same toward Lessee's obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or
any assignment of such sublease, nor by reason of the collection of Rent, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor all Rent due and to become due under the
sublease. Sublessee shall rely upon any such notice from Lessor and shall pay
all Rents to Lessor without any obligation or right to inquire as to whether
such Breach exists, notwithstanding any claim from Lessee to the contrary.

          (b) In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.

          (c) Any matter requiring the consent of the sublessor under a sublease
shall also require the consent of Lessor.

          (d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

          (e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.

13. DEFAULT; BREACH; REMEDIES.

                                  Page 7 of 12

<PAGE>

     13.1 DEFAULT; BREACH. A "Default" is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A "Breach" is defined as the occurrence of one or
more of the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace period:

          (a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.

          (b) The failure of Lessee to make any payment of Rent or any Security
Deposit required to be made by Lessee hereunder, whether to Lessor or to a third
party, when due, to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days
following written notice to Lessee.

          (c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.

          (d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessee's Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.

          (e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within 60 days); (iii} the appointment of a trustee or receiver to
take possession of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.

          (f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.

          (g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Lessee's failure, within 60 days following written notice of any such event, to
provide written alternative assurance or security, which, when coupled with the
then existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the Guarantors that existed at the time of execution of
this Lease.

     13.2 REMEDIES. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee upon receipt of invoice therefor. If any check given to
Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

          (a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent. Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

          (b) Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or
the appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.

          (c) Pursue any other remedy now or hereafter available under the laws
or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's right
to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.

     13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS",
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.

     13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
one-time late charge equal to 10% of each such overdue amount or $100, whichever
is greater. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for 3 consecutive installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.

     13.5 INTEREST. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for non-scheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to non-scheduled payments. The interest
("INTEREST") charged shall be equal to the prime rate reported in the Wall
Street Journal as published closest prior to the date when due plus 4%, but
shall not exceed the maximum rate allowed by law. Interest is payable in
addition to the potential late charge provided for in Paragraph 13.4.

     13.6 BREACH BY LESSOR.

          (a) NOTICE OF BREACH. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable
time shall in no event be less than 30 days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such that more than 30 days are reasonably required for its performance, then
Lessor shall not be in breach if performance is commenced within such 30 day
period and thereafter diligently pursued to completion.

          (b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to
completion, then Lessee may elect to cure said breach at Lessee's expense and
offset from Rent an amount equal to the greater of one month's Base Rent or the
Security Deposit, and to pay an excess of such expense under protest, reserving
Lessee's right to reimbursement from Lessor. Lessee shall document the cost of
said cure and supply said documentation to Lessor.

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the floor area of the Unit, or more than 25%
of Lessee's Reserved Parking Spaces, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within 10 days after Lessor shall
have given Lessee written notice of such taking (or in the absence

                                  Page 8 of 12

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of such notice, within 10 days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in
proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in value
of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation for
Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures,
without regard to whether or not this Lease is terminated pursuant to the
provisions of this Paragraph. All Alterations and Utility Installations made to
the Premises by Lessee, for purposes of Condemnation only, shall be considered
the property of the Lessee and Lessee shall be entitled to any and all
compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to the
Premises caused by such Condemnation.

15. BROKERAGE FEES.

     15.2 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's
interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts
due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts
to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor
and Lessee of such failure and if Lessor fails to pay such amounts within 10
days after said notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a
third party beneficiary of any commission agreement entered Into by and/or
between Lessor and Lessor's Broker for the limited purpose of collecting any
brokerage fee owed.

     15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.

16. ESTOPPEL CERTIFICATES.

          (a) Each Party (as "RESPONDING PARTY") shall within 10 days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "ESTOPPEL CERTIFICATE" form published by the
AIR Commercial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.

          (b) If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such 10 day period, the Requesting Party may execute
an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and {iii)
If Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.

          (c) If Lessor desires to finance, refinance, or sell the Premises, or
any part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past 3 years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17. DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (In cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest in this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6.2 above.

18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19. DAYS. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.

20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.

21. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that It has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the use, nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.

23. NOTICES.

     23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease
or applicable law shall be in writing and may be delivered in person (by hand or
by courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notices. Either Party
may by written notice to the other specify a different address for notice,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

     23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient}, provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of monies or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.

25. DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.

     (a) When entering into a discussion with a real estate agent regarding a
real estate transaction, a Lessor or Lessee should from the outset understand
what type of agency relationship or representation it has with the agent or
agents in the transaction. Lessor and Lessee acknowledge being advised by the
Brokers in this transaction, as follows:

          (i) Lessor's Agent. A Lessor's agent under a listing agreement with
the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent
has the following affirmative obligations: To the Lessor: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the
Lessee, and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to
reveal to either Party any confidential information obtained from the other
Party which does not Involve the affirmative duties set forth above.

          (ii) Lessee's Agent. An agent can agree to act as agent for the Lessee
only. In these situations, the agent is not the Lessor's agent, even if by
agreement the agent may receive compensation for services rendered, either in
full or in part from the Lessor. An agent acting only for a

                                  Page 9 of 12

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Lessee has the following affirmative obligations. TO THE LESSEE: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the
Lessee. TO THE LESSEE AND THE LESSOR: a. Diligent exercise of reasonable skills
and care in performance of the agent's duties. b. A duty of honest and fair
dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.

          (iii) AGENT REPRESENTING BOTH LESSOR AND LESSEE. A real estate agent,
either acting directly or through one or more associate licenses, can legally be
the agent of both the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the Lessee. In a dual agency
situation, the agent has the following affirmative obligations to both the
Lessor and the Lessee: a. A fiduciary duly of utmost care, integrity, honesty
and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to
the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In
representing both Lessor and Lessee, the agent may not without the express
permission of the respective Party, disclose to the other Party that the Lessor
will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties
of the agent in a real estate transaction do not relieve a Lessor or Lessee from
the responsibility to protect their own interests. Lessor and Lessee should
carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to
advise about real estate. If legal or tax advice is desired, consult a competent
professional.

     (b) Brokers have no responsibility with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees), of any Broker with respect to any breach of duty, error or omission
relating to this Lease shall not exceed the fee received by such Broker pursuant
to this Lease; provided, however, that the foregoing limitation on each Broker's
liability shall not be applicable to any gross negligence or willful misconduct
of such Broker.

     (c) Buyer and Seller agree to identify to Brokers as "Confidential" any
communication or information given Brokers that is considered by such Party to
be confidential.

26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.

27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.

29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

     30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "LENDER") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

     30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (a) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) be subject to any offsets or defenses
which Lessee might have against any prior lessor, (c) be bound by prepayment of
more than one month's rent, or (d) be liable for the return of any security
deposit paid to any prior lessor.

     30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "NON-DISTURBANCE AGREEMENT") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.

     30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31. ATTORNEYS' FEES. If any Party brings an action or proceeding involving the
Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall include, without limitation, a Party who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees,
costs and expenses incurred in the preparation and service of notices of Default
and consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities shall be without abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises any ordinary "FOR SALE" signs and
Lessor may during the last 6 months of the term hereof place on the Premises any
ordinary "FOR LEASE" signs. Lessee may at any time place on the Premises any
ordinary "FOR SUBLEASE" sign.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction.

34. SIGNS. Except for ordinary "For Sublease" signs which may be placed only on
the Premises, Lessee shall not place any sign upon the Project without Lessor's
prior written consent. All signs must comply with all Applicable Requirements.

35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor's election to have such event constitute the
termination of such interest.

36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (including but not limited to architects', attorneys', engineers'
and other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request.

37. GUARANTOR.

     37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the AIR Commercial Real Estate Association,
and each such Guarantor shall have the same obligations as Lessee under this
Lease.

     37.2 DEFAULT. It shall constitute a Default of the Lessee if any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still in effect.

38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.

39. OPTIONS. If Lessee is granted an option, as defined below, then the
following provisions shall apply.

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     39.1 DEFINITION. "OPTION" shall mean: (a) the right to extend the term of
or renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor;

     39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Any Option granted to Lessee in
this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if requested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.

     39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior
Options have been validly exercised.

     39.4 EFFECT OF DEFAULT ON OPTIONS.

          (a) Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period, of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given 3 or more notices of separate Default, whether or not the Defaults
are cured, during the 12 month period immediately preceding the exercise of the
Option.

          (b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).

          (c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, alter such
exercise and prior to the commencement of the extended term, (i) Lessee falls to
pay Rent for a period of 30 days after such Rent becomes due (without any
necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee 3 or
more notices of separate Default during any 12 month period, whether or not the
Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.

40. SECURITY MEASURES. Lessee hereby acknowledges that the Rent payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes ail responsibility for the protection of the Premises. Lessee,
its agents and invitees and their property from the acts of third parties.

41. RESERVATIONS. Lessor reserves the right: (i) to grant, without the consent
or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, (ii) to cause the recordation of parcel maps and restrictions, and
(iii) to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate such rights.

42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.

43. AUTHORITY. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each party shall, within 30
days after request, deliver to the other party satisfactory evidence of such
authority.

44. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.

45. OFFER. Preparation of this Lease by either party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.

46. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.

47. MULTIPLE PARTIES. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL
REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.

WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED.

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

Executed at: 1180 CALIFORNIA AVE.       Executed at: 13950 SENLAC DALLAS
             CORONA CA 92831                         TX 75234
on: JUNE 1, 2004                        on: 5/27/04

By LESSOR:                              By LESSEE:
Edward A. Money and Marilyn J. Money,   Collegiate Pacific, Inc., a Delaware
Trustees of the Money Family Trust      corporation
Dated February 21, 1991

By: /s/ Edward A. Money                 By: /s/ Adam Blumefield
    ---------------------------------       ------------------------------------
Name Printed: EDWARD A. MONEY           Name Printed: Adam Blumefield
Title: Trustee                          Title: President

By:                                     By: /s/ ART COERVER
    ---------------------------------       ------------------------------------
Name Printed:                           Name Printed: ART COERVER
              -----------------------   Title: COO
Title:                                  Address: 13950 SENLAC
       ------------------------------            DALLAS, TX 75234
Address:
         ----------------------------

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

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

Telephone: (909) 270-3223               Telephone: (___) 972-243-8100
Facsimile: (909) 256-2165               Facsimile: (___) 972-243-8424
Federal ID No. 95-369 5664              Federal ID No. 22.2795073
LARRY'S THUNDERBIRD & MUSTANG PARTS

                                  Page 11 of 12

<PAGE>

These forms are often modified to meet changing requirements of law and needs of
the industry, Always write or call to make sure you are utilizing the most
current form: AIR Commercial Real Estate Association, 700 South Flower Street,
Suite 600, Los Angeles, CA 90017, (213)687-8777.

          (c)Copyright 1998 By AIR Commercial Real Estate Association.
                              All rights reserved.
          No part of these works may be reproduced in any form without
                             permission in writing.

                                  Page 12 of 12

<PAGE>

                   ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL
                        MULTI-TENANT LEASE - GROSS (AIR)

                               DATED MAY 21, 2004

                                 BY AND BETWEEN

       EDWARD A. MONEY AND MARILYN J. MONEY, TRUSTEES OF THE MONEY FAMILY
                     TRUST DATED FEBRUARY 21, 1991 (LESSOR)
                                       AND
                       COLLEGIATE PACIFIC, INC., (LESSEE)

           FOR THE PROPERTY LOCATED AT 1180 CALIFORNIA AVENUE, UNIT A
                               CORONA, CALIFORNIA

50.  TENANT IMPROVEMENTS. Lessor, at Lessor's expense, shall perform the
     following improvements to the Premises;

     1.   Paint existing office area and restrooms; refurbish where necessary.
          Tenant shall have the choice of paint colors.

     2.   Re-carpet existing offices. Tenant shall have the choice of carpet
          colors.

     3.   Replace stained and broken ceiling tiles.

     4.   Inspect and repair roof.

     5.   All mechanical building systems shall be in good operational
          condition.

     6.   Repair concrete floor where necessary.

     7.   All of the above work shall be completed no later than August 15,
          2004, or thirty (30) days following Lessees' waiver of its contingency
          (as stated in section 52 below), whichever occurs first.

51.  TENANT IMPROVEMENTS BY LESSEE: Lessee, at Lessee's direction and expense,
     shall have the right to construct approximately 2,000 square feet of
     additional office space and up to two restrooms subject to the approval of
     Lessor. Prior to commencement of construction. Lessee shall provide Lessor
     with a copy of its building plans for Lessor's review and approval. Such
     approval shall not be unreasonably withheld. All work directed by Lessee
     shall be completed by a licensed general contractor, shall be fully
     permitted by the city of Corona, and shall be performed in a workmanlike
     manner. At Lessor's sole option, upon the termination of the lease, Lessee,
     at Lessee's expense shall remove Lessee's additional improvements and
     return the building to its original condition subject to normal wear and
     tear.

52.  LESSEE'S CONTINGENCY: This lease shall be contingent on Lessee's
     satisfaction that it shall be allowed by the city of Corona to construct
     its office improvements as stated in section 51 above. If Lessee has not
     waived this contingency, in writing to Lessor and Lessor's broker prior to
     July 15, 2004, then Lessee's contingency shall lapse and this lease shall
     immediately be in full force and effect.

53.  RENT SCHEDULE: Months 1-12:  $11,355.00 MG per month
                    Months 13-24: $11,696.00 MG per month
                    Months 25-36: $12,046.00 MG per month
                    Months 37-48: $12,408.00 MG per month
                    Months 49-60: $12,780.00 MG per month

<PAGE>

54.  PARKING: Lessee shall not park in the designated parking spots as indicated
     on Exhibit "B" attached.

55.  ADDITIONAL INSURED: The Money Family Trust dated February 21, 1991 shall be
     named as an additional insured in all insurance policies to be provided to
     Lessor pursuant to the terms of this lease.

56.  EASEMENT: The Premises are subject to reciprocal easements. The easements
     involve a trucking easement for the structure that shares the driveways and
     vehicle driveway areas between the Premises and said structures. Paragraphs
     2.6 through 2.10 are subject to said easements. Upon request, a copy of the
     easements will be provided to Lessee.

57.  PAYMENTS: Lessee shall make all rental payment and CAM'S payment checks out
     to Larry's Thunderbird and Mustang Parts ("Larry's") and deliver the checks
     to Larry's on their due dates. Larry's shall be responsible for forwarding
     the funds in a timely manner to Lessor.

AGREED BY:

LESSEE: COLLEGIATE PACIFIC, INC.        LESSOR: EDWARD A. MONEY AND MARILYN J.
                                        MONEY, TRUSTEES OF THE MONEY FAMILY
                                        TRUST DATED FEBRUARY 21, 1991

BY: /s/ Art Coerver                     BY: /s/ Edward A Money, Trustee
    ---------------------------------       ---------------------------------
DATE: 5/27/04                           DATE: June 4, 2004

<PAGE>

                  (AIR COMMERCIAL REAL ESTATE ASSOCIATION LOGO)

                               OPTION(S) TO EXTEND
                             STANDARD LEASE ADDENDUM

DATED                     May 21, 2004

BY AND BETWEEN (LESSOR)   Edward A. Money and Marilyn J. Money, Trustees of the
                          Money Family Trust dated February 21, 1991

BY AND BETWEEN (LESSEE)   Collegiate Pacific. Inc., a Delaware corporation

ADDRESS OF PREMISES:      1180 California Avenue, Unit A

Paragraph 58

A.   OPTION(S) TO EXTEND:

Lessor hereby grants to Lessee the option to extend the term of this Lease for
one (1) additional sixty (60) month period(s) commencing when the prior term
expires upon each and all of the following terms and conditions:

          (i) In order to exercise an option to extend, Lessee must give written
notice of such election to Lessor and Lessor must receive the same at least six
(6) but not more than nine (9) months prior to the date that the option period
would commence, time being of the essence. If proper notification of the
exercise of an option is not given and/or received, such option shall
automatically expire. Options (if there are more than one) may only be exercised
consecutively.

          (ii) The provisions of paragraph 39, including those relating to
Lessee's Default set forth in paragraph 39.4 of this Lease, are conditions of
this Option.

          (iii) Except for the provisions of this Lease granting an option or
options to extend the term, all of the terms and conditions of this Lease except
where specifically modified by this option shall apply.

          (iv) This Option is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and only while
the original Lessee is in full possession of the Premises and without the
intention of thereafter assigning or subletting.

          (v) The monthly rent for each month of the option period shall be
calculated as follows, using the method(s) indicated below: (Check Method(s) to
be Used and Fill in Appropriately)

[X]  II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)

     a. On (Fill in MRV Adjustment Date(s)) August 1, 2009 the Base Rent shall
be adjusted to the "Market Rental Value" of the property as follows:

          1) Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV will
be on the adjustment date. If agreement cannot be reached, within thirty days,
then:

               (a) Lessor and Lessee shall immediately appoint a mutually
acceptable appraiser or broker to establish the new MRV within the next 30 days.
Any associated costs will be split equally between the Parties, or

                                   PAGE 1 OF 2

<PAGE>

          (b) Both Lessor and Lessee shall each immediately make a reasonable
determination of the MRV and submit such determination, in writing, to
arbitration in accordance with the following provisions:

               (i) Within 15 days thereafter, Lessor and Lessee shall each
select an [ ] appraiser or [ ] broker ("CONSULTANT" - check one) of their
choice to act as an arbitrator. The two arbitrators so appointed shall
immediately select a third mutually acceptable Consultant to act as a third
arbitrator.

               (ii) The 3 arbitrators shall within 30 days of the appointment of
the third arbitrator reach a decision as to what the actual MRV for the Premises
is, and whether Lessor's or Lessee's submitted MRV is the closest thereto. The
decision of a majority of the arbitrators shall be binding on the Parties. The
submitted MRV which is determined to be the closest to the actual MRV shall
thereafter be used by the Parties.

               (iii) If either of the Parties fails to appoint an arbitrator
within the specified 15 days, the arbitrator timely appointed by one of them
shall reach a decision on his or her own, and said decision shall be binding on
the Parties.

               (iv) The entire cost of such arbitration shall be paid by the
party whose submitted MRV is not selected, i.e. the one that is NOT the closest
to the actual MRV.

          2) Notwithstanding the foregoing, the new MRV shall not be less than
the rent payable for the month immediately preceding the rent adjustment.

     b. Upon the establishment of each New Market Rental Value:

          1) the new MRV will become the new "Base Rent" for the purpose of
calculating any further Adjustments, and

          2) the first month of each Market Rental Value term shall become the
new "Base Month" for the purpose of calculating any further Adjustments.

B.   NOTICE:

          Unless specified otherwise herein, notice of any rental adjustments,
other than Fixed Rental Adjustments, shall be made as specified in paragraph 23
of the Lease.

NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
most current form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street,
Suite 600, Los Angeles, Calif. 90017

                                   PAGE 2 OF 2

<PAGE>

                                   Exhibit A

                            (CALIFORNIA AVENUE MAP)

<PAGE>

                                   Exhibit B

                            (CALIFORNIA AVENUE MAP)

<PAGE>

                  (AIR COMMERCIAL REAL ESTATE ASSOCIATION LOGO)

                     AIR COMMERCIAL REAL ESTATE ASSOCIATION

                          EXHIBIT C - GUARANTY OF LEASE

WHEREAS, Edward A. Money and Marilyn J, Money, Trustees of the Money Family
Trust dated February 21, 1991, hereinafter "Lessor", and Collegiate Pacific,
Inc., a Delaware corporation, hereinafter "Lessee", are about to execute a
document entitled "Lease" dated May 21, 2004 concerning the premises commonly
known as 1180 California Avenue, Unit A, Corona, California wherein Lessor will
lease the premises to Lessee, and

     WHEREAS, Larry's Thunderbird and Mustang Parts hereinafter "Guarantors"
have a financial interest in Lessee, and

     WHEREAS, Lessor would not execute the Lease if Guarantors did not execute
and deliver to Lessor this Guarantee of Lease.

     NOW THEREFORE, in consideration of the execution of the foregoing Lease by
Lessor and as a material inducement to Lessor to execute said Lease, Guarantors
hereby jointly, severally, unconditionally and irrevocably guarantee the prompt
payment by Lessee of all rents and all other sums payable by Lessee under said
Lease and the faithful and prompt performance by Lessee of each and every one of
the terms, conditions and covenants of said Lease to be kept and performed by
Lessee.

     It is specifically agreed that the terms of the foregoing Lease may be
modified by agreement between Lessor and Lessee, or by a course of conduct, and
said Lease may be assigned by Lessor or any assignee of Lessor without consent
or notice to Guarantors and that this Guaranty shall guarantee the performance
of said Lease as so modified.

     This Guaranty shall not be released, modified or affected by the failure or
delay on the part of Lessor to enforce any of the rights or remedies of the
Lessor under said Lease, whether pursuant to the terms thereof or at law or in
equity.

     No notice of default need be given to Guarantors, it being specifically
agreed that the guarantee of the undersigned is a continuing guarantee under
which Lessor may proceed immediately against Lessee and/or against Guarantors
following any breach or default by Lessee or for the enforcement of any rights
which Lessor may have as against Lessee under the terms of the Lease or at law
or in equity.

     Lessor shall have the right to proceed against Guarantors here under
following any breach or default by Lessee without first proceeding against
Lessee and without previous notice to or demand upon either Lessee or
Guarantors.

     Guarantors hereby waive (a) notice of acceptance of this Guaranty.(b)
demand of payment, presentation and protest, (c) all right to assert or plead
any statute of limitations relating to this Guaranty or the Lease, (d) any right
to require the Lessor to proceed against the Lessee or any other Guarantor or
any other person or entity liable to Lessor, (e) any right to require Lessor to
apply to any default any security deposit or other security it may hold under
the Lease, (f) any right to require Lessor to proceed under any other remedy
Lessor may have before proceeding against Guarantors, (g) any right of
subrogation.

     Guarantors do hereby subrogate all existing or future indebtedness of
Lessee to Guarantors to the obligations owed to Lessor under the Lease and this
Guaranty.

     If a Guarantor is married, such Guarantor expressly agrees that recourse
may be had against his or her separate property for all of the obligations
hereunder.

     The obligations of Lessee under the Lease to execute and deliver estoppel
statements and financial statements, as therein provided, shall be deemed to
also require the Guarantors hereunder to do and provide the same.

     The term "Lessor" refers to and means the Lessor named in the Lease and
also Lessor's successors and assigns. So long as Lessor's interest in the Lease,
the leased premises or the rents, issues and profits therefrom, are subject to
any mortgage or deed of trust or assignment for security, no acquisition by
Guarantors of the Lessor's interest shall affect the continuing obligation of
Guarantors under this Guaranty which shall nevertheless continue in full force
and effect for the benefit of the mortgagee, beneficiary, trustee or assignee
under such mortgage, deed of trust or assignment and their successors and
assigns.

     The term "Lessee" refers to and means the Lessee named in the Lease and
also Lessee's successors and assigns.

     In the event any action be brought by said Lessor against Guarantors
hereunder to enforce the obligation of Guarantors hereunder, the unsuccessful
party in such action shall pay to the prevailing party therein a reasonable
attorney's fee which shall be fixed by the court.

     If this Form has been filled in, it has been prepared for submission to
     your attorney for his approval. No representation or recommendation is made
     by the AIR Commercial Real Estate Association, the real estate broker or
     its agents or employees as to the legal sufficiency, legal effect, or tax
     consequences of this Form or the transaction relating thereto.

Executed at: CORONA, CALIFORNIA, 92831  LARRY'S THUNDERBIRD AND MUSTANG PARTS

On: JUNE 1, 2004                        BY: E. BRENT MONEY

                                        /s/ E. BRENT MONEY
Address: 1180 CALIFORNIA AVE.           ----------------------------------------
                                        "GUARANTORS"

                                   PAGE 1 OF 1<PAGE>
                                                                   Exhibit 10.16

                            Summary Plan Description

                                  Prepared for

                            COLLEGIATE PACIFIC, INC.

<PAGE>

INTRODUCTION

Effective 04/15/2005, COLLEGIATE PACIFIC, INC. has adopted the COLLEGIATE
PACIFIC 401(k) PLAN designed to help you meet your financial needs during your
retirement years. The plan sequence number, which identifies the number of
qualified plans COLLEGIATE PACIFIC, INC. currently maintains or has previously
maintained, is 001.

To become a Participant in the Plan, you must meet the Plan's eligibility
requirements. Once you become a Participant, COLLEGIATE PACIFIC, INC. will
maintain an Individual Account for you. Each Plan Year, your account will be
adjusted to reflect contributions, gains, losses, etc. The percentage of your
account to which you will be entitled when you terminate employment depends on
the Plan's vesting schedule. These features are explained further in the
following pages.

The actual Plan is a complex legal document that has been written in the manner
required by the Internal Revenue Service (IRS) and is referred to as the Basic
Plan Document. This document is called a Summary Plan Description (SPD) and
explains and summarizes the important features of the Basic Plan Document.
COLLEGIATE PACIFIC, INC. may make contributions to this Plan. In addition, you
may be able to elect to reduce your annual taxable income by deferring a portion
of your Compensation into the Plan as Elective Deferrals. You should consult the
Basic Plan Document for technical and detailed Plan provisions. The Basic Plan
Document, and not this SPD, controls the legal operation of the Plan.

If at any time you have specific questions about the Plan as it applies to you,
please bring them to the attention of the Plan Administrator whose address and
telephone number appears in Section One of this SPD. You may also examine the
Basic Plan Document itself at a reasonable time by making arrangements with the
Plan Administrator.

                                     Page 1

<PAGE>

CONTENTS OF THE SUMMARY PLAN DESCRIPTION

<TABLE>
<S>             <C>
SECTION ONE     DEFINITIONS

SECTION TWO     ELIGIBILITY AND PARTICIPATION
                Eligible Classes of Employees
                Age and Service Requirements
                How Hours of Service Are Counted
                When You May Participate in the Plan

SECTION THREE   PLAN FUNDING AND ADMINISTRATION
                Plan Contribution Sources, Allocations and Limitations
                Compensation
                Plan Administration and Management
                Self Direction of Investments

SECTION FOUR    DISTRIBUTION OF BENEFITS AND VESTING
                Benefit Eligibility
                Distribution of Benefits
                Determining Your Vested Amount
                Restrictions or Penalties on Distributions
                Payouts to Your Beneficiaries

SECTION FIVE    CLAIMS PROCEDURE
                What to do to Receive Benefits
                How to File a Claim

SECTION SIX     MISCELLANEOUS
                Borrowing From the Plan
                Plan Termination
                Break in Service Situations

SECTION SEVEN   RIGHTS UNDER ERISA
                The Rights and Protections to which a Plan Participant is
                Entitled Under the Employee Retirement Income Security Act
</TABLE>

                                     Page 2

<PAGE>

SECTION ONE: DEFINITIONS

The following definitions are used in the text of this SPD. These words and
phrases are capitalized throughout the SPD for ease of reference.

COMPENSATION - means the earnings paid to you by COLLEGIATE PACIFIC, INC. that
are taken into account for purposes of the Plan.

EMPLOYEE - means any person employed by COLLEGIATE PACIFIC, INC.

ELECTIVE DEFERRALS - means the dollars you put into the Plan through before-tax
payroll deductions.

EMPLOYER - means COLLEGIATE PACIFIC, INC., the sole proprietorship, partnership,
corporation, or other entity maintaining this Plan.

INDIVIDUAL ACCOUNT - means the contribution account established and maintained
for you which is made up of all contributions made by you or on your behalf.

MATCHING CONTRIBUTION - means a contribution made by COLLEGIATE PACIFIC, INC. to
the 401(k) Plan on your behalf based upon your Elective Deferrals and/or
your Nondeductible Employee Contributions.

PARTICIPANT - means an Employee who has met the eligibility requirements, has
entered the Plan, and has become eligible to make or receive a contribution to
his or her Individual Account.

SALARY REDUCTION AGREEMENT - means the agreement you sign to authorize
COLLEGIATE PACIFIC, INC. to deduct your Elective Deferrals from your
Compensation and put them into the 401(k) Plan.

PLAN - means the specific retirement plan COLLEGIATE PACIFIC, INC. has set up.
The Plan is governed by a legal document containing various technical and
detailed provisions. The Plan Administrator has a copy of the Plan document.

PLAN ADMINISTRATOR - The Plan Administrator is responsible for directly
administering the Plan. COLLEGIATE PACIFIC, INC. is the Plan Administrator of
this Plan and is therefore responsible for the day-to-day administration and
management of the Plan. To ensure efficient and sound operation and management
of the Plan, COLLEGIATE PACIFIC, INC. has the discretionary authority to appoint
other persons as may be necessary to act on its behalf or assist in performing
these responsibilities. The address and phone number of COLLEGIATE PACIFIC, INC.
is listed below.

COLLEGIATE PACIFIC, INC.
13950 SENLAC DRIVE, SUITE 100
DALLAS, TX 75234
972-243-8100

PLAN YEAR - means the calendar year.

PROFIT SHARING CONTRIBUTION - means the amount contributed to the Plan on your
behalf by COLLEGIATE PACIFIC, INC.

                                     Page 3

<PAGE>

SECTION TWO: ELIGIBILITY AND PARTICIPATION

ELIGIBLE CLASSES OF EMPLOYEES

You will generally be allowed to become a Participant in the Plan after having
satisfied the age and service requirements and entered the Plan.

AGE AND SERVICE REQUIREMENTS

ELECTIVE DEFERRALS

You will become eligible to enter the Plan and begin making Elective Deferrals
after you have completed 0.25 year of service for COLLEGIATE PACIFIC, INC.. You
need not attain a minimum age to become eligible to participate.

MATCHING CONTRIBUTIONS

You will become eligible to enter the Plan and receive Matching Contributions
after you have performed 0.25 year(s) of service for COLLEGIATE PACIFIC, INC..
You need not attain a minimum age to become eligible to participate.

PROFIT SHARING CONTRIBUTIONS

You will become eligible to enter the Plan and receive Profit Sharing
Contributions after you have completed 0.25 year(s) of service for COLLEGIATE
PACIFIC, INC.. You need not attain a minimum age to become eligible to
participate.

The age and service requirements, however, do not apply if you are employed by
COLLEGIATE PACIFIC, INC. on the effective date of this Plan.

HOW HOURS OF SERVICE ARE COUNTED

Your hours of service are generally counted on the basis of the actual number of
hours you work or for which you are entitled to Compensation.

WHEN YOU MAY PARTICIPATE IN THE PLAN

After you have met the eligibility requirements, you will become a Participant
in the Plan on the applicable entry date(s). COLLEGIATE PACIFIC, INC. has
designated THE FIRST DAY OF EACH MONTH OF THE PLAN YEAR as the entry date(s) for
this Plan.

You will continue to participate in the Plan as long as you do not incur a break
in service. A break in service is a period of at least 12 consecutive months
during which you do not perform services for COLLEGIATE PACIFIC, INC. However,
no break in service will occur if the reason you did not work was because of
certain absences due to birth, pregnancy or adoption of children, military
service or other service during a national emergency during which your
re-employment under a federal or state law is protected and you do, in fact,
return to work within the time required by law.

SECTION THREE: PLAN FUNDING AND ADMINISTRATION

PLAN CONTRIBUTION SOURCES, ALLOCATIONS AND LIMITATIONS

Elective Deferrals

You may make before-tax contributions to the Plan through payroll deduction.
Such contributions are called Elective Deferrals.

                                     Page 4

<PAGE>

To begin making Elective Deferrals, you must complete and sign a Salary
Reduction Agreement. Once you become eligible to participate in the Plan,
COLLEGIATE PACIFIC, INC. will provide you with such form.

For example, assume your compensation is $15,000. You wish to make an Employee
401(k) Contribution to the Plan and sign a Salary Reduction Agreement
authorizing an Employee 401(k) Contribution of 5% of your Compensation. As a
result, COLLEGIATE PACIFIC, INC. will pay you $14,250 as gross taxable income
and will deposit your 5% Employee 401(k) Contribution (i.e., $750) into the
Plan for you.

Limits on Elective Deferrals

Federal tax laws and plan documents govern the amount of Elective Deferrals that
you may make Specifically, federal law places two annual limits on the amount
you may defer into a 401(k) plan - an individual limit and an average limit.

Individual Limit

Federal tax law limits the amount you can put into the Plan during each of your
tax years (generally, a calendar year) to $14,000. This amount is indexed
periodically for changes in the cost-of-living index. This limit applies to all
Elective Deferrals you make during your tax year to any deferral plans
maintained by your present or former employers.

If you defer more than you are allowed, you must submit in writing for the
return of the excess to COLLEGIATE PACIFIC, INC. no later than March 1.

The excess amount and any earnings you may have received on the excess must be
taken out of the Plan by April 15 of the year following the year the money went
into the Plan. The excess amounts will be reported on Form 1099-R and will be
taxable income for the year in which you put the excess into the Plan. Earnings
on the excess amount will be taxable in the year distributed.

Average Limits

Tax law defines a group of an employer's employees known as highly compensated
employees. Highly compensated employees making Elective Deferrals are limited in
the percent of their compensation that they defer based on the average percent
of compensation deferred by the non-highly compensated group of employees during
either the current or prior Plan Year. If these limits apply to you, COLLEGIATE
PACIFIC, INC. will give you additional information about them.

Plan Specific Limitations

Upon completion of a Salary Reduction Agreement, your compensation will be
reduced each pay period by the percent you specify. COLLEGIATE PACIFIC, INC.
permits you to defer a percentage of your Compensation from 1% to 80% in
increments of 1% each Plan Year.

To change the amount of your Elective Deferrals, you must complete and sign a
revised Salary Reduction Agreement and return it to COLLEGIATE PACIFIC, INC. at
least 30 days before the change will take effect or a lesser number of days if
COLLEGIATE PACIFIC, INC. permits, You may change your Salary Reduction Agreement
as of the first day of the Plan Year and the first day of the seventh month of
the Plan Year, and any additional dates determined by COLLEGIATE PACIFIC, INC.

To discontinue making Elective Deferrals, you must complete and sign a revised
Salary Reduction Agreement and return it to COLLEGIATE PACIFIC, INC. at least 30
days before the change will take effect or a lesser number of days if COLLEGIATE
PACIFIC, INC. permits.

If you stop making deferrals, you must wait until the first day of the Plan Year
or the first day of the seventh month before you may begin making Elective
Deferrals again. COLLEGIATE PACIFIC, INC. may establish uniform and
nondiscriminatory rules that would allow you to resume making Elective Deferrals
sooner.

                                     Page 5

<PAGE>

Matching Contributions

Individual Limits

Matching Contributions are Employer Contributions that are contributed to the
Plan based on your Elective Deferrals. Effective the next payroll period
coincident with or following the execution date of the Adoption Agreement (or
the date you begin participating in the Plan, if later), COLLEGIATE PACIFIC,
INC. may make Matching Contributions to the Plan equal to a percentage of your
Elective Deferrals which COLLEGIATE PACIFIC, INC. will determine each year.

In addition, you must perform at least 1000 hours of service during the Plan
Year to receive a contribution. The hour of service requirement will be waived,
however, if you

     -    die

     -    separate from service after becoming disabled

     -    separate from service after attaining normal retirement age

Finally, in order to be eligible to receive Matching Contributions, you must be
employed on the last day of the Plan Year. The last day requirement will be
waived, however, if you

     -    die

     -    separate from service after becoming disabled

     -    separate from service after attaining normal retirement age

Tax law defines a group of an employer's employees known as highly compensated
employees. Highly compensated employees receiving Matching Contributions are
limited in the amount of Matching Contributions which they may receive based on
the average Matching Contribution (as a percent of compensation) received by the
non-highly compensated group of employees during either the current or prior
Plan Year. If these limits apply to you, COLLEGIATE PACIFIC, INC. can give you
additional information about them.

Profit Sharing Contributions

Each year, the managing body of COLLEGIATE PACIFIC, INC. will determine the
amount, if any, which it will contribute to the Plan.

In addition, you must perform at least 1000 hours of service during the Plan
Year to receive a contribution. The hours of service requirement will be waived,
however, if you

     -    die

     -    separate from service after becoming disabled

     -    separate from service after attaining normal retirement age

Finally, in order to be eligible to receive a Profit Sharing Contribution, you
must be employed on the last day of the Plan Year, The last day requirement will
be waived, however, if you

     -    die

     -    separate from service after becoming disabled

     -    separate from service after attaining normal retirement age

If you satisfy the requirements and are entitled to a Profit Sharing
Contribution, the Profit Sharing Contribution you are entitled to will consist
of two parts, a base contribution and an excess contribution. The base
contribution will be a percentage of your Compensation up to the Taxable Wage
Base. The excess contribution will be a percentage of your Compensation above
the Taxable Wage Base.

Qualified Nonelective Contributions (QNECs) and Qualified Matching Contributions
(QMACs)

QNECs and QMACs may be made by COLLEGIATE PACIFIC, INC. to satisfy special
nondiscrimination rules that apply to the Plan. These contributions are fully
vested when made and are subject to the same restrictions on withdrawals
applicable to Elective Deferrals.

                                     Page 6

<PAGE>

Rollover Contributions

COLLEGIATE PACIFIC, INC. allows you to make rollover contributions, regardless
of whether you have become a Participant in the Plan. You are 100% vested in
your rollover contributions at all times. However, you may not withdraw them
until you incur a distribution triggering event under the Plan.

Annual Additions Limitation

In spite of the contribution/allocation formulas described earlier, federal law
limits the annual amount that may be allocated to your account to the lesser of
$42,000 (for 2005) or 100% of your Compensation. The $42,000 limit is adjusted
periodically for changes in the cost-of-living index.

COMPENSATION

The definition of compensation for plan purposes may vary for many reasons. For
example, federal tax law may require use of one definition of compensation for
nondiscrimination testing and another definition for contribution allocation
purposes. In addition, federal tax law permits employers such as COLLEGIATE
PACIFIC, INC. to choose the definition of compensation that will be used for
other purposes. Regardless of the various definitions of compensation which may
be required or allowed, in the event your Compensation exceeds $210,000 per year
(for plan years that begin in 2005), only the first $210,000 will be counted as
Compensation under the Plan. This $210,000 cap is adjusted periodically for
changes in the cost-of-living index.

Also, if you satisfy the eligibility requirements and enter the Plan on a date
other than the first day of the year over which your Compensation is to be
determined, the Compensation earned during the year, but prior to your entry
into the Plan, will be excluded.

COLLEGIATE PACIFIC, INC. has elected to use your Plan Year W-2 compensation for
purposes of this Plan. Your Compensation, however, will be adjusted as described
below.

Elective deferrals you make to a COLLEGIATE PACIFIC, INC. cafeteria, 401(k),
salary deferral SEP, tax sheltered annuity plan, or qualified transportation
fringe benefits you receive will be included in your Compensation.

PLAN ADMINISTRATION AND MANAGEMENT

All contributions made to the Plan on your behalf will be placed in a trust fund
established to hold dollars for the benefit of all Participants. COLLEGIATE
PACIFIC, INC. will establish and maintain an Individual Account for you and all
Participants. Your Individual Account will be used to track your share in the
total trust fund.

SELF DIRECTION OF INVESTMENTS

This Plan allows you to direct the investment of the assets in your Individual
Account. COLLEGIATE PACIFIC, INC. will establish uniform and nondiscriminatory
policies describing how and when you may provide investment directions.

ERISA SECTION404(c) PLAN

Your Employer intends that the retirement Plan you participate in satisfies the
requirements of Sec. 404(c) of the Employee Retirement Income Security Act
(ERISA) and Title 29, Code of Federal Regulations, Sec. 2550.404c-1. This means
that your Employer is providing you with a variety of investment options, which
allows you to choose those investments that meet your retirement savings needs.
As a result, your Employer, and other people in charge of the Plan, will not be
responsible for the performance of the investments that you select.

                                     Page 7

<PAGE>

ADDITIONAL INFORMATION

You may request the following additional investment information from your
Employer:

1.   a description of the annual operating expenses of each investment
     alternative which reduces your rate of return and the overall amount of
     such expenses shown as a percentage of average net assets of the investment
     alternative;

2.   copies of any prospectuses, financial statements and reports, and any other
     materials relating to the investment alternatives available under the Plan
     if such information is provided to the Plan;

3.   a list of the actual investments held in each investment alternative and
     the value of each of these individual investments (or the proportion of the
     investment alternative which it comprises);

4.   with respect to each individual investment which has a fixed rate of
     interest and is issued by a bank, savings and loan association, or
     insurance company, the name of the issuer of the investment and its term
     and rate of return;

5.   information concerning the value of shares or units in investment
     alternatives available to you under the Plan, as well as the past and
     current investment performance of the investment alternatives;

6.   information concerning the value of shares or units in investment
     alternatives in which you have invested your retirement plan dollars.

SECTION FOUR: DISTRIBUTION OF BENEFITS AND VESTING

BENEFIT ELIGIBILITY

Certain events must occur before you may withdraw money from the Plan. In
general, benefits may be withdrawn upon termination of employment after
attaining normal retirement age or upon Plan termination.

Normal retirement age under this Plan is age 65.

You may withdraw all or a portion of your vested Individual Account if you

     -    terminate employment before attaining normal retirement age

     -    become disabled

     -    attain normal retirement age but continue to work

In addition, you may withdraw your Elective Deferrals on account of financial
hardship or if you attain age 59 1/2 but continue to work.

Generally, the only financial needs that are considered to meet the financial
hardship requirements are the following items: deductible medical expenses for
you or your immediate family, purchase of your principal residence, payment of
tuition and related educational expenses for the next 12 months of
post-secondary education for you or your immediate family, or to prevent
eviction from your home or foreclosure upon your principal residence. Check with
your Plan Administrator to determine if any other financial needs meet the
financial hardship requirements under your Plan.

                                     Page 8

<PAGE>

A hardship distribution cannot exceed the amount of your immediate and heavy
financial need and you must have obtained all distributions and all nontaxable
loans from all Plans maintained by COLLEGIATE PACIFIC, INC. prior to qualifying
for a hardship distribution. Hardship distributions are subject to a 10% penalty
tax if received before you reach age 59 1/2.

Your Elective Deferrals will be suspended for 12 months after receipt of the
hardship distribution of Elective Deferrals.

DISTRIBUTION OF BENEFITS

Form of Payment

Payments from the Plan that are eligible rollover distributions may be taken in
two ways. You may have all or any portion of your eligible rollover distribution
either (1) paid in a direct rollover to an individual retirement account or
another employer plan or (2) paid to you. If you choose to have your Plan
benefits paid to you, you will receive only 80% of the payment, because
COLLEGIATE PACIFIC, INC. is required to withhold 20% of the payment and send it
to the IRS as income tax withholding to be credited against your taxes.

COLLEGIATE PACIFIC, INC. will give you more information about your options
around the time that you request your payout from the Plan. That information
will, among other things, define an eligible rollover distribution.

If you terminate employment and your vested Individual Account (i.e., the
amount of money in the Plan you are entitled to) is eligible to be rolled over,
is more than $1,000, but is no more than $5,000, and you do not elect to receive
your distribution from the Plan in either a single lump sum or a direct
rollover, your benefits will be paid as a direct rollover to an individual
retirement account. COLLEGIATE PACIFIC, INC. will select an individual
retirement account trustee, custodian or issuer that is unrelated to COLLEGIATE
PACIFIC, INC., establish the individual retirement account with the trustee and
make the initial investment choices for the account.

If your vested Individual Account is more than $5,000 and you request a
distribution, all or a portion of your benefits under the Plan will be made in
the following form(s):

     -    lump sum

Timing of Benefit Payments

If the value of your Individual Account is no more than $5,000, COLLEGIATE
PACIFIC, INC. will direct that your benefits be paid as soon as administratively
feasible.

If your account is more than $5,000, your funds will be left in the Plan until
you submit a written request to COLLEGIATE PACIFIC, INC. for payment. However,
you must begin taking required minimum distributions at age 70 1/2. If you are
not more than a five-percent owner, the Plan may allow you to delay taking
required minimum distributions until you retire. COLLEGIATE PACIFIC, INC. will
provide you with more information and the proper request forms.

DETERMINING YOUR VESTED AMOUNT

Amount of Benefit

Whether you receive the full value of your account(s) depends on the reason you
are receiving the distribution and your vested percentage in your contributions.
Your distribution will be the full value of your Individual Account (that is,
you will be 100% vested) if COLLEGIATE PACIFIC, INC. terminates this Plan,
completely discontinues contributions to the Plan, or you reach normal
retirement age, die or become disabled.

However, if you terminate employment and thus become eligible for a distribution
from the Plan, your distribution will be only the vested amount in your
Individual Account. Loss, denial or reduction of anticipated benefits may occur
if you terminate employment before becoming fully vested, or if all or a portion
of your benefit is set aside for an alternate payee under a qualified domestic
relations order (QDRO). (Participants and Beneficiaries may obtain from
COLLEGIATE PACIFIC, INC. without charge a copy of the Plan's procedures
governing QDRO determinations.) You may also lose your benefit if you cannot be
located when a benefit becomes payable to you.

                                     Page 9

<PAGE>

Your vested amount is determined by multiplying the value of your Individual
Account subject to the plan's vesting schedule by the applicable percentage from
the vesting schedule. The vesting schedule determines how rapidly your
Individual Account balance becomes nonforfeitable based on years of service.

EXAMPLE: Assume you have $10,000 subject to a vesting schedule in your
Individual Account and you terminate employment when you are 40% vested. Your
vested amount would be $4,000 (.40 x $10,000).

You will generally be vested in your Individual Account derived from Profit
Sharing Contributions and forfeitures according to the following schedule.

<TABLE>
<CAPTION>
Years of Vesting     Vested
     Service       Percentage
----------------   ----------
<S>                <C>
  Less than One         0%
        1               0%
        2              20%
        3              40%
        4              60%
        5              80%
        6             100%
</TABLE>

You will generally be vested in your Individual Account derived from Matching
Contributions and forfeitures according to the following schedule.

<TABLE>
<CAPTION>
Years of Vesting     Vested
     Service       Percentage
----------------   ----------
<S>                <C>
  Less than One         0%
        1               0%
        2              20%
        3              40%
        4              60%
        5              80%
        6             100%
</TABLE>

Years of Vesting Service

You must provide a minimum of 1000 hours of service to complete a year of
vesting service. In addition, you must exceed 500 hours of service to avoid a
break is vesting service.

All of your years of service with COLLEGIATE PACIFIC, INC. are counted for the
purpose of determining your vested percentage.

Profit Sharing Contribution Forfeitures

If you are not 100% vested and receive a distribution of your Profit Sharing
Contributions, the dollars left in the Plan are called forfeitures. In your
Plan, forfeitures may be applied first to payment of plan administration
expenses. Any remaining forfeitures will be used towards Profit Sharing
Contributions. If you return to work for COLLEGIATE PACIFIC, INC. before
incurring five consecutive one year breaks in service, you may recapture the
forfeited benefit. Generally, your forfeited benefit will be restored
immediately by COLLEGIATE PACIFIC, INC. if you have not incurred five
consecutive one year breaks in service, and if you pay back to the Plan the
distribution that you received.

                                     Page 10

<PAGE>

Matching Contribution Forfeitures

If you are not 100% vested and receive a distribution of your Matching
Contributions, the dollars left in the Plan are called forfeitures. In your
Plan, forfeitures may be applied first to payment of plan administration
expenses. Any remaining forfeitures will be used towards Matching Contributions.
If you return to work for COLLEGIATE PACIFIC, INC. before incurring five
consecutive one year breaks in service, you may recapture the forfeited benefit.
Generally, your forfeited benefit will be restored immediately by COLLEGIATE
PACIFIC, INC. if you have not incurred five consecutive one year breaks in
service, and if you pay back to the Plan the distribution that you received.

RESTRICTIONS OR PENALTIES ON DISTRIBUTIONS

If you receive a distribution before reaching age 59 1/2, you must pay an
additional 10% penalty tax on dollars included in income. There are, however,
exceptions to the 10% early distribution penalty. Your tax advisor can assist
you in determining if one of the exceptions applies to your distribution.

PAYOUTS TO YOUR BENEFICIARIES

Your beneficiary will receive the total value of your Individual Account when
you die. If you are married, your spouse will automatically be your beneficiary.
To choose another beneficiary, you must sign a written form listing a nonspouse
beneficiary. Your spouse must give written consent to this in the presence of a
notary public. Contact COLLEGIATE PACIFIC, INC. if you wish to choose a
nonspouse beneficiary. If the vested value of your Individual Account is no more
than $5,000, your beneficiary will receive a lump sum payment of the entire
amount.

If the value of your vested Individual Account is greater than $5,000, your
beneficiary will receive a payout(s) in a form other than a life annuity.

SECTION FIVE: CLAIMS PROCEDURE

WHAT TO DO TO RECEIVE BENEFITS

You or your beneficiary must file a written request with COLLEGIATE PACIFIC,
INC. in order to start receiving benefits when you become eligible for them or
when you die. If you do not receive a benefit to which you believe your are
entitled, you should file a claim with COLLEGIATE PACIFIC, INC.

HOW TO FILE A CLAIM

You may claim a benefit to which you think you are entitled by filing a written
request with COLLEGIATE PACIFIC, INC. The claim must set forth the reasons you
believe you are eligible to receive benefits and authorize COLLEGIATE PACIFIC,
INC. to conduct such examinations and take such steps as may be necessary to
evaluate the claim.

WHAT TO DO IF YOUR CLAIM IS DENIED

Except as described below, if your claim is denied, COLLEGIATE PACIFIC, INC.
will provide you or your Beneficiary with a written notice of the denial within
90 days of the date your claim was filed. This notice will give you the specific
reasons for the denial, the specific provisions of the Plan upon which the
denial is based, and an explanation of the procedures for appeal.

In the case of a claim for disability benefits, if COLLEGIATE PACIFIC, INC. is
making a determination of whether you are disabled (as defined in the Plan), you
will be notified of a denial of your claim within a reasonable amount of time,
but not later than 45 days after the Plan receives your claim. The 45-day time
period may be extended by the Plan for up to 30 days, if COLLEGIATE PACIFIC,
INC. determines that an extension is necessary due to matters beyond the control
of the Plan COLLEGIATE PACIFIC, INC. will notify you, before the end of the
45-day period, of the reason(s) for the extension and the date by which the Plan
expects to make a decision regarding your claim.

                                     Page 11

<PAGE>

If, before the end of the 30-day extension, COLLEGIATE PACIFIC, INC. determines
that, due to matters beyond the control of the Plan, a decision regarding your
claim cannot be made within the 30-day extension, the period for making the
decision may be extended for an additional 30 days, provided that COLLEGIATE
PACIFIC, INC. notifies you, prior to the end of the first 30-day extension, of
the circumstances requiring the additional extension and the date as of which
the Plan expects to make a decision. The notice will specifically explain the
standards on which the approval of your claim will be based, the unresolved
issues that prevent a decision on your claim, and the additional information
needed to resolve those issues. You will have at least 45 days within which to
provide the specified information.

The period of time within which approval or denial of your claim is required to
be made generally begins at the time your claim is filed. If the period of time
is extended because you fail to submit information necessary to decide your
claim, the period for approving or denying your claim will not include the
period of time between the date on which the notification of the extension is
sent to you and the date on which you provide the additional information.

COLLEGIATE PACIFIC, INC. will provide you with written or electronic
notification if your claim is denied. The notification will provide the
following:

i.   The specific reason or reasons for the denial;

ii.  Reference to the specific section of the Plan on which the denial is based;

iii. A description of any additional information that you must provide before
     the claim may continue to be processed and an explanation of why such
     information is necessary.

iv.  A description of the Plan's review procedures and the time limits
     applicable to such procedures, including a statement of your right to bring
     a civil action under Section 502(a) of the Employee Retirement Income
     Security Act (ERISA) following a claim denial on review;

v.   In the case of a Plan providing disability benefits,

If COLLEGIATE PACIFIC, INC. used an internal rule or guideline in denying your
claim, either the specific rule or guideline; or a statement that the rule or
guideline was relied upon in denying your claim and that a copy will be provided
free of charge to you upon request.

If the claim denial is based on a medical necessity, experimental treatment or
similar situation, either an explanation of the scientific or clinical basis for
the denial, applying the terms of the Plan to your medical circumstances, or a
statement that an explanation will be provided free of charge upon request.

HOW TO APPEAL A DENIED CLAIM

You or your Beneficiary will have 60 days from receipt of the notice of claim
denial in which to appeal the COLLEGIATE PACIFIC, INC. decision. You may request
that the review be in the nature of a hearing and an attorney may represent you.
However, in the case of a claim for disability benefits, if COLLEGIATE PACIFIC,
INC. is deciding whether you are disabled under the terms of the Plan, you will
have at least 180 days following receipt of notification of a claim denial
within which to appeal COLLEGIATE PACIFIC, INC. decision.

You may submit written comments, documents, records, and other information
relating to your claim. In addition, you will be provided, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and
other information pertaining to your claim.

Your appeal will take into account all comments, documents, records, and other
information submitted by you relating to the claim, even if the information was
not included originally.

If the claim is for disability benefits:

i.   Your claim will be reviewed independent of your original claim and will be
     conducted by a named fiduciary of the Plan other than the individual who
     denied your original claim or any of his or her employees.

ii.  In deciding an appeal of a claim denial that is based in whole or in part
     on a medical judgment, the appropriate named fiduciary will consult with a
     health care professional who has appropriate training and experience in the
     field of medicine involved in the medical judgment;

                                     Page 12

<PAGE>

iii. COLLEGIATE PACIFIC, INC. will provide you with the name(s) of the health
     care professional(s) who was consulted in connection with your original
     claim, even if the claim denial was not based on his or her advice. The
     health care professional consulted for purposes of your appeal will not be
     the same person or any of his or her employees.

iv.  You will be notified of the outcome of your appeal no later than 45 days
     after receipt of your request for the appeal, unless COLLEGIATE PACIFIC,
     INC. determines that special circumstances require an extension of time for
     processing the claim. If COLLEGIATE PACIFIC, INC. determines that an
     extension is required, written notice of the extension will be provided to
     you prior to the end of the initial 45-day period. The notice will identify
     the special circumstances requiring an extension and the date by which the
     Plan expects to make a decision regarding your claim.

COLLEGIATE PACIFIC, INC. will provide you with written or electronic
notification of the final outcome of your claim. The notification will include:

i.   A statement that you are entitled to receive, upon request and free of
     charge, reasonable access to, and copies of, all documents, records, and
     other information relevant to your claim;

ii.  A statement describing any additional voluntary appeal procedures offered
     by the Plan, your right to obtain the information about such procedures,
     and a statement of your right to bring an action under Section 502(a) of
     ERISA; and

iii. If COLLEGIATE PACIFIC, INC. used an internal rule or guideline in denying
     your claim, either the specific rule or guideline; or a statement that the
     rule or guideline was relied upon in denying your claim and that a copy
     will be provided free of charge to you upon request.

If the claim denial is based on a medical necessity, experimental treatment or
similar situation, either an explanation of the scientific or clinical basis for
the denial, applying the terms of the Plan to your medical circumstances, or a
statement that an explanation will be provided free of charge upon request.

SECTION SIX: MISCELLANEOUS

BORROWING FROM THE PLAN

Effective Date

As a Participant in this Plan, you may be permitted to borrow a portion of your
vested account balance. The loan program adopted by COLLEGIATE PACIFIC, INC. is
effective 04/15/2005 and is available on a uniform basis to all parties in
interest to the Plan who meet loan qualification requirements.

Loan Program Administrator

If you have questions regarding the loan program you should contact THE PLAN
ADMINISTRATOR, the person responsible for administering your loan program. You
may reach THE PLAN ADMINISTRATOR, the loan program administrator, at 13950
SENLAC DRIVE, SUITE 100, DALLAS, TX 75234.

Loan Application Procedure

To apply for a loan under this Plan, you must complete and return to THE PLAN
ADMINISTRATOR a Loan Application Form, furnishing all information requested and
pay any required loan application processing fees.

                                     Page 13

<PAGE>

Collateral Pledge

A percentage of your vested account balance equal to the amount borrowed divided
by your vested account balance is pledged as security for repayment of loans
under this program.

Limitations on Loan Types

Loans from this Plan may be used for any purpose.

Loan Approval Standards

Decisions approving or denying loans from this Plan will be based on the value
of your vested Individual Account and LOAN APPROVAL IS LIMITED TO ONE
OUTSTANDING LOAN PER PARTICIPANT.

Loan Principal Limitations

The minimum amount you may borrow from this Plan is $1000. The maximum amount
you may borrow from this Plan is the lesser of one-half of your vested account
balance or $50,000.

Interest Calculations

Interest on Loans from this Plan will be equal to the prime rate as printed in
the Wall Street Journal at the time you take your loan.

Default Provisions

You will be deemed to have defaulted on your loan if you fail to remit payment
in a timely manner as required under the Loan Agreement, breach any of your
obligations or duties under the Loan Agreement, or terminate employment.

Upon default, THE PLAN ADMINISTRATOR is entitled to foreclose its security
interest in your vested account balance pledged for repayment upon the
occurrence of an event which triggers a distribution of your benefits. In
addition, THE PLAN ADMINISTRATOR will report as taxable any amounts that are
deemed distributed as a result of failing to make loan payments.

PLAN TERMINATION

COLLEGIATE PACIFIC, INC. expects to continue the Plan indefinitely. However,
COLLEGIATE PACIFIC, INC. may terminate the Plan at any time by appropriate
action of its managing body. In the unlikely event COLLEGIATE PACIFIC, INC. does
terminate the Plan, you will become 100% vested in the aggregate value of your
Individual Account regardless of whether your vesting years of service are
sufficient to make you 100% vested under the vesting schedule(s).

If the Plan terminates, benefits are not insured by the Pension Benefit Guaranty
Corporation (PBGC). Under the law, PBGC insurance does not cover the type of
plans called defined contribution plans. This Plan is a defined contribution
plan and, therefore, is not covered.

BREAK IN SERVICE SITUATIONS

If you quit your job, incur a break in service and then return to work, your
date of participation depends on whether you had a vested interest in
contributions at the time you quit and incurred a break in service.

If you had a vested interest, you will participate again on the first Entry Date
after your return to employment. In addition, your vesting years of service
accumulated prior to the time you quit and incurred a break in service will be
counted in figuring your vested interest.

                                     Page 14

<PAGE>

If you did not have a vested interest, any eligibility years of service
occurring before the break in service will be taken into account and you will
begin to participate again on the first Entry Date after your return to service
unless the number of consecutive one year breaks in service equals or exceeds
the greater of five years, or the aggregate number of eligibility years of
service preceding the breaks in service. If your period of consecutive breaks in
service exceeds your period of prior service, you will be treated as a new
employee and will participate again when you satisfy the Plan's eligibility
requirements. In addition, any vesting years of service occurring before the
break in service will be taken into account in computing your vested interest
under the Plan unless the number of consecutive one year breaks in service
equals or exceeds the greater of five years or the aggregate number of vesting
years of service preceding the breaks in service. For example, if you work for
two years, quit without being vested, and then return to employment after a
break of two years or less, the Plan will give you vesting credit for the
initial two-year period.

PLAN EXPENSES

All reasonable expenses of administration, including, but not limited to, those
involved in retaining necessary professional assistance may be paid from the
assets of the Plan, Such expenses may be allocated among all Plan Participants
or, with respect to expenses directly related to you, charged to your Individual
Account. Examples of expenses that may be directly related to you include, but
are not limited to, general recordkeeping fees and expenses incurred in relation
to loans (if permitted under your Plan), distributions, qualified domestic
relations orders and your ability to direct the investment of your Individual
Account, if applicable. Finally, the Employer may, in its discretion, pay any or
all of these expenses. Your Plan Administrator will provide you with a summary
of all Plan expenses and the method of payment of the expenses upon request.

SECTION SEVEN: RIGHTS UNDER ERISA

THE RIGHTS AND PROTECTIONS TO WHICH A PLAN PARTICIPANT IS ENTITLED UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT

As a Participant in this Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA provides that all Plan Participants shall be entitled to:

Receive Information About Your Plan and Benefits

1.   Examine, without charge, at the Plan Administrator's office and at other
     specified locations, such as work sites and union halls, all Plan documents
     governing the plan, including insurance contracts and collective bargaining
     agreements, and a copy of the latest annual report (Form 5500 Series) filed
     by COLLEGIATE PACIFIC, INC. with the U.S. Department of Labor and available
     at the Public Disclosure Room of the Employee Benefits Security
     Administration.

2.   Obtain, upon request to the Plan Administrator, copies of documents
     governing the operations of the plan, including insurance contracts and
     collective bargaining agreements, and copies of the latest annual report
     (Form 5500 Series) and updated Summary Plan Description (SPD). The Plan
     Administrator may make a reasonable charge for the copies.

3.   Receive a summary of the Plan's annual financial report COLLEGIATE PACIFIC,
     INC. is required by law to furnish each participant with a copy of this
     Summary Annual Report.

4.   Obtain, once a year, a statement of the total pension benefits accrued and
     the nonforfeitable (vested) pension benefits (if any) or the earliest date
     on which benefits will become nonforfeitable (vested). The Plan may require
     a written request for this statement, but it must provide the statement
     free of charge.

                                     Page 15

<PAGE>

Prudent Action by Plan Fiduciaries

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate your Plan, called "fiduciaries" of the Plan, have a duty
to do so prudently and in the interest of you and other Plan Participants and
beneficiaries. No one, including COLLEGIATE PACIFIC, INC., your union, or any
other person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a pension benefit or exercising your rights under
ERISA.

Enforce Your Rights

If your claim for a pension benefit is denied or ignored, in whole or in part,
you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require COLLEGIATE PACIFIC, INC. to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of COLLEGIATE PACIFIC, INC. If you have a claim for benefits which is
denied or ignored, in whole or in part, you may file suit in a state or Federal
court. In addition, if you disagree with the Plan's decision or lack thereof
concerning the qualified status of a domestic relations order or a medical child
support order, you may file suit in Federal court. If it should happen that Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a Federal court. The court will decide who should
pay court costs and legal fees. If you are successful the court may order the
person you have sued to pay the costs and fees. If you lose, the court may order
you to pay these costs and fees, for example, if it finds your claim is
frivolous.

Assistance with Your Questions

If you have any questions about your Plan, you should contact COLLEGIATE
PACIFIC, INC. If you have any questions about this statement or about your
rights under ERISA, or you need assistance is obtaining documents from
COLLEGIATE PACIFIC, INC., you should contact the nearest office of the Employee
Benefits Security Administration, U. S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U. S. Department of Labor, 200
Constitution Avenue N.W., Washington D.C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration.

Further, if this Plan is maintained by more than one employer, you can obtain,
in writing, information as to whether a particular employer is participating in
this Plan and, if so, the participating Employer's address. In addition, you may
request, in writing, a complete list of Employers participating in this Plan.
You may obtain such information by making a written request to COLLEGIATE
PACIFIC, INC. COLLEGIATE PACIFIC, INC. is the most significant (parent) employer
of the group of employers maintaining this Plan.

                                     Page 16

<PAGE>

Employer Information

Name:                    COLLEGIATE PACIFIC, INC
Address:                 13950 SENLAC DRIVE, SUITE 100
                         DALLAS, TX 75234

Business Telephone:      972-243-8100
Identification Number:   22-2795073
Income Tax Year End:     06/30

Agent for Service of Legal Process

The Agent for Service of Legal Process is the person upon whom any legal papers
can be served. Service of legal process may be made upon a Plan Trustee, the
Employer or the Plan Administrator.

Name:      WILLIAM R. ESTILL
Address:   13950 SENLAC DRIVE, SUITE 100, DALLAS, TX 75234

Trustee(s)

Name:                  OFI TRUST COMPANY
Business Address:      TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET,
                       11TH FLOOR, NEW YORK, NY 10281-1008
Business Telephone:    800-255-2750

                                     Page 17

<PAGE>

Qualified         EGTRRA Model Amendment (For use with Comprehensive and
                  Flexible 401 (k) Plans)
Retirement Plan   SUMMARY OF MATERIAL MODIFICATIONS

The purpose of this Summary of Material Modifications (SMM) is to update your
Summary Plan Description (SPD) regarding severel provisions. This document is
very important and should be maintained with your SPD. Unless otherwise noted,
the effective date of the amendment is the later of the first day of the first
Plan Year beginning after December 31, 2001, or the effective date of the Plan.
The following sections of your SPD are amended to read as follows:

                               REQUIRED PROVISIONS

DEFINITIONS

CATCH-UP CONTRIBUTIONS

Additional Elective Deferrals, not to exceed the applicable dollar amount for a
given year, made under this Plan by Participants who attain age 50 before the
close of the Plan Year.

DIRECT ROLLOVER

A way of rolling over an Eligible Rollover Distribution from a qualified plan
directly to an Eligible Retirement Plan thereby avoiding federal income tax
withholding.

ELIGIBLE RETIREMENT PLAN

An eligible 457(b) plan maintained by a state governmental entity, a Traditional
IRA, a qualified retirement plan, a qualified annuity plan and a 403(b) plan.

ELIGIBLE ROLLOVER DISTRIBUTION

Any distribution to your credit that does not include the following: any
distribution that is one of a series of substantially equal periodic payments;
required minimum distributions; and hardship distributions. In addition, an
Eligible Rollover Distribution includes a Direct Rollover of Nondeductible
Employee Contributions made to a Traditional IRA or qualified retirement plan,
if those amounts are separately accounted for in the receiving plan.

KEY EMPLOYEE

An Employee who at any time during the Plan Year is an officer of the employer
having annual compensation greater than $130,000 (indexed); a five-percent owner
of the company; or a one-percent owner of the company with annual compensation
exceeding $150,000.

NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS

Any contribution that you make to a plan on an after-tax basis. These
contributions may only be made to 401(k) plans and certain 403(b) plans.

PLAN FUNDING AND ADMINISTRATION

HOW WILL THE AMOUNT OF THE EMPLOYER CONTRIBUTIONS BE DETERMINED?

Your Employer will decide each Plan Year whether or not to make a contribution
based on your Compensation to the Plan unless a more detailed method of
determining the amount of an Employer Contribution is specified in the SPD.
Contributions to a 401(k) plan can range from 0% to 25% of Participants'
Compensation each year.

WHAT IS MEANT BY MY COMPENSATIONS?

The definition of Compensation for Plan purposes can vary for many reasons. For
example, federal law may require use of one definition of Compensation for
nondiscrimination testing and another for contribution allocation purposes.

In general, the amount of your earnings from your Employer taken into account
under the Plan is all earnings reported to you on Form W-2. In the event your
Compensation exceeds $200,000 (indexed) per year, only the first $200,000 will
be counted as Compensation under the Plan. This $200,000 cap will be adjusted
periodically by the IRS for increases in cost-of-living. See your Plan
Administrator for the current year's limit on Compensation. Refer to the SPD to
determine whether a more specific definition of Compensation is provided under
the Plan.

ROLLOVER/TRANSFER CONTRIBUTION

Your Plan allows you to make rollover and/or transfer contributions unless your
SPD reflects otherwise. If rollover contributions are permitted under the Plan,
the Plan may accept rollover contributions and/or Direct Rollovers of
distributions made after the later of December 31, 2001, or the effective date
of your Plan, from an Eligible Retirement Plan. Refer to the Elective Provisions
section of this SMM to determine what provisions apply.

LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS

DO ANY LIMITS APPLY TO THE AMOUNT THAT MAY BE ALLOCATED TO MY INDIVIDUAL ACCOUNT
FOR ANY PLAN YEAR?

Yes. The amount which may be allocated to your Individual Account for any year
is subject to Internal Revenue Code provisions limiting your allocation amount
to the lesser of $40,000 (indexed) or 100% of your Compensation paid to you by
your Employer for a given year. The $40,000 limit will be adjusted periodically
by the Internal Revenue Service (IRS) for increases in the cost-of-living. See
your Plan Administrator for the current year's limit.

CONTRIBUTIONS TO 401(K) PLANS

You are generally allowed to make before-tax contributions called Elective
Deferrals to the Plan through payroll deduction. In addition, you may be
permitted to make a one-time, irrevocable election to make before-tax
contributions which are not considered Elective Deferrals. Finally, your
Employer may also make various contributions to the Plan on your behalf. These
may include the following.

-    Matching Contributions These contributions match a percentage of your
     Elective Deferrals and Catch-up Contributions (and/or Nondeductible
     Employee Contributions) made to the Plan.

<PAGE>

-    Employer Profit Sharing Contributions These contributions are
     discretionary. Your entitlement to an Employer Profit Sharing Contribution
     is not dependent upon making Elective Deferrals.

-    Nonelective Contributions These contributions may be made by your Employer
     in lieu of Matching Contributions. Nonelective Contributions may only be
     made as Safe Harbor CODA Contributions or to SIMPLE 401(k) Plans.

-    Qualified Nonelective Contributions and Qualified Matching Contributions
     These contributions may be made by your Employer to satisfy special
     nondiscrimination rules which apply to the Plan. These contributions are
     fully vested when made and are subject to the same restrictions on
     withdrawals applicable to Elective Deferrals. These types of contributions
     are available under a 401(k) Plan, at the Employer's discretion.

-    Nondeductible Employee Contributions Some 401(k) plans allow Participants
     to make after-tax contributions to the Plan which accrue earnings on a
     tax-deferred basis. These contributions are called Nondeductible Employee
     Contributions.

Refer to the SPD to determine the kinds of contributions available under your
Plan.

ELECTIVE DEFERRALS

HOW MUCH MAY I DEFER INTO THE 401(K) PLAN?

If you have met the eligibility requirements for making Elective Deferrals, your
deferral contributions to this and any other qualified plans maintained by the
Employer, may not exceed the following amount for each year.

     $11,000 for 2002
     $12,000 for 2003
     $13,000 for 2004
     $14,000 for 2005
     $15,000 for 2006 and thereafter

These amounts are indexed for cost-of-living adjustments and may be adjusted in
increments of $500 beginning after 2006.

ARE CATCH-UP CONTRIBUTIONS AVAILABLE UNDER YOUR PLAN?

Unless otherwise indicated in the Elective Provisions section of this SMM, all
Employees who are eligible to make Elective Deferrals under your Plan and who
have attained age 50 before the close of the Plan Year are eligible to make
Catch-up Contributions, not to exceed the applicable dollar amount for the
year. In addition, certain limits, as required by law, must be met prior to
being eligible to make a Catch-up Contribution. See your Plan Administrator for
additional information.

MATCHING CONTRIBUTIONS

Your Plan may provide for Matching Contributions If so, the SPD and the Elective
Provisions section of this SMM provides specific information about Matching
Contributions unique to your Plan.

WHAT MUST I DO TO SHARE IN AN EMPLOYER MATCHING CONTRIBUTION?

You may receive Matching Contributions if you put Elective Deferrals, Catch-up
Contributions, and/or Nondeductible Employee Contributions into the Plan.

To share in the Matching Contribution, you must be a Participant in the Plan.
Some plans require that you work a minimum number of hours to share in the
Matching Contribution. Refer to the SPD to determine if an hourly requirement
applies to your Plan.

A nonstandardized plan may require you to be working for the Employer on the
last day of the Plan Year to share in the Matching Contribution. Refer to the
SPD to determine if this requirement applies to your Plan.

Plans may waive hourly and/or last day requirements under certain circumstances
such as death, disability, etc. Refer to the SPD to determine if and when such
requirements are waived.

The amount of your Matching Contribution will be based upon the formula
described in the SPD.

EXAMPLE: Your annual Compensation is $15,000. You agree to make an Elective
Deferral of 10% of your Compensation. Under the terms of the Plan, assume your
Employer has selected a Matching Contribution formula that will match your
Elective Deferrals on the basis of 50 cents for each dollar you contribute. Your
Elective Deferral will be $1,500 for the Plan Year and the Matching Contribution
will be $750.

ARE HIGHLY COMPENSATED PARTICIPANTS ELIGIBLE TO RECEIVE MATCHING CONTRIBUTIONS?

Yes. However, additional limitations may exist on the Matching Contribution
amounts. The Internal Revenue Code and tax rules define highly compensated
employee for these purposes. If these limits apply to you, your Plan
Administrator will provide additional information about them. The additional
limitations described above do not apply to SIMPLE 401(k) plans.

DISTRIBUTION OF BENEFITS AND VESTING

WHICH VESTING SCHEDULE WILL BE USED TO DETERMINE MY VESTED BENEFIT?

You will become vested according to the vesting schedule(s) disclosed in your
SPD and this SMM.

If the SPD previously provided to you by your Employer specified a seven-year
vesting schedule for Matching Contributions, you will become fully vested in
such contributions after six years, rather than seven. If the SPD previously
provided to you by your Employer specified no vesting until five years of
service had been completed, you will become fully vested after three years of
service.

<PAGE>

Vesting Schedule for Top-Heavy Plans

A top-heavy plan is one in which more than 60% of the value of the Plan assets
is credited to the accounts of certain officers, shareholders and highly paid
Participants. These individuals are called Key Employees.

The top-heavy vesting schedule will not apply if the vesting schedule selected
by your Employer provides for faster vesting. For example, if the Employer has
selected the 100% vesting schedule (under which all Participants are 100% vested
at all times) and the Plan becomes top heavy, that vesting schedule selected by
your Employer will remain in effect because it provides for more rapid vesting.

Refer to the SPD to determine the top-heavy vesting schedule.

NOTE: The top-heavy requirements do not apply to SIMPLE 401(k) plans and Safe
Harbor CODA plans.

WHEN MAY I WITHDRAW MONEY FROM THE PLAN?

Certain events must occur before you may withdraw money from the Plan. Benefits
may be withdrawn if any of the following occur.

TERMINATION OF EMPLOYMENT AFTER ATTAINING NORMAL RETIREMENT AGE

Normal Retirement Age under the Plan is specified in the SPD.

TERMINATION OF EMPLOYMENT AFTER SATISFYING ANY EARLY RETIREMENT AGE REQUIREMENT

The Early Retirement Age conditions, if any, are specified in the SPD.

TERMINATING THE PLAN BY YOUR EMPLOYER

IF YOUR PLAN IS A 401(K) PLAN, THERE ARE SEVERAL OTHER CIRCUMSTANCES UNDER WHICH
YOU MAY WITHDRAW ELECTIVE DEFERRALS

Your Plan may also allow you to take Elective Deferrals out of the Plan upon
attainment of age 59 1/2 or if you have a severe financial hardship Generally,
the only financial needs that are considered to meet the financial hardship
requirements are deductible medical expenses for you or your immediate family,
purchase of your principal residence, payment of tuition and related educational
fees for the next 12 months of post-secondary education for you or your
immediate family, or to prevent eviction from your home or foreclosure upon your
principal residence. Check with your Plan Administrator to determine if any
other financial needs meet the financial hardship requirements under your Plan.
A hardship distribution can not exceed the amount of your immediate and heavy
financial need. You must have obtained all distributions and all nontaxable
loans from all Plans maintained by your Employer prior to qualifying for a
hardship distribution. Your Elective Deferrals (and Nondeductibie Employee
Contributions, if applicable) will be suspended for 6 months after receipt of a
hardship distribution. If you receive a hardship distribution of Elective
Deferrals in calendar year 2001, you are prohibited from making Elective
Deferrals (and Nondeductibie Employee Contributions, if applicable) for 6 months
after receipt of the hardship distribution or until January 1, 2002, if later,
unless otherwise indicated in the Elective Provisions section of this SMM.
Hardship distributions are subjected to a 10% penalty tax if received before you
reach age 59 1/2 Refer to your SPD to determine if you may take distributions of
Elective Deferrals in any of the preceding circumstances.

NOTE: Nonelective and basic or enhanced matching contributions under the Safe
Harbor CODA Contribution provisions are subject to the same distribution
restrictions as Elective Deferrals except the Safe Harbor CODA Contributions
specified here may not be distributed under the hardship distribution
provisions.

HOW WILL MY BENEFITS BE PAID TO ME?

Payments from the Plan that are Eligible Rollover Distributions may be taken in
two ways. You may have all or any portion of your Eligible Rollover Distribution
either (1) paid in a Direct Rollover to an Eligible Retirement Plan or (2) paid
to you. If you choose to have your Plan benefits paid to you, you will receive
only 80% of the payment, because the Plan Administrator is required to withhold
20% of the payment and send it to the IRS as income tax withholding to be
credited against your taxes.

If your vested Individual Account (i.e., the amount of money in the Plan you are
entitled to) is no more than $5,000, your benefits will be paid either directly
to you or as a Direct Rollover to a Traditional IRA, in a single payment. When
determining the vested value of your Individual Account, rollover contributions
may be disregarded for this purpose effective the later of January 1, 2002, or
the effective date of the Plan.

ONCE I BECOME ELIGIBLE TO RECEIVE BENEFITS, WHEN WILL THEY BE DISTRIBUTED TO ME?

If you terminate employment and the value of your Individual Account
(disregarding rollover contributions, unless otherwise noted in the Elective
Provisions section of this SMM), is no more than $5,000, the Plan Administrator
will direct that your benefits be paid as soon as administratively practicable
after you become eligible to receive them.

If the value of your Individual Account is more than $5,000, your benefits will
not be paid until you submit a request to the Plan Administrator for payment.
The Plan Administrator will provide you with the proper request forms. Once you
have returned the completed request to the Plan Administrator, payment will be
made as soon as administratively practicable after the Plan Administrator
received your request.

                               ELECTIVE PROVISIONS

PLAN FUNDING AND ADMINISTRATION

OTHER CONTRIBUTIONS

You can complete a Direct Rollover of Eligible Rollover Distributions from the
following type(s) of plans:

[ ]  A qualified retirement plan, not including Nondeductibie Employee
     Contributions.

[X]  A qualified retirement plan, including Nondeductible Employee
     Contributions.

[X]  A 403(b) plan, not including Nondeductibie Employee Contributions.

[X]  An eligible 457(b) plan maintained by a state governmental entity.

<PAGE>

You can complete an indirect rollover of Eligible Rollover Distributions from
the following type(s) of plans:

[X]  A qualified retirement plan.

[X]  A 403(b) plan.

[X]  An eligible 457(b) plan maintained by a state governmental entity.

You can make a rollover contribution of pre-tax amounts from a Traditional IRA

[X]  Yes

[ ]  No

The above transactions shall be available the later of January 1, 2002, or the
effective date of your Plan.

CATCH-UP CONTRIBUTIONS

Will you be permitted (if eligible) to make Catch-up Contributions?

[X]  Yes, after the later of December 31, 2001, or the effective date of your
     Plan.

[ ]  No

MATCHING CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS

Will Matching Contributions be made with regard to Catch-up Contributions?

[X]  Yes

[ ]  No

If "yes" is selected, the Matching Contribution formula identified in your SPD
will be followed.

DISTRIBUTION OF BENEFITS AND VESTING

SUSPENSION OF ELECTIVE DEFERRALS FOLLOWING HARDSHIP DISTRIBUTION

If you receive a hardship distribution of Elective Deferrals during the 2001
calendar year,

[X]  You are prohibited from making Elective Deferrals (and Nondeductible
     Employee Contributions, if applicable) under your Plan for 6 months after
     you receive the distribution or until January 1, 2002, if later.

[ ]  You are prohibited from making Elective Deferrals (and Nondeductible
     Employee Contributions, if applicable) under your Plan for 12 months after
     you receive the distribution.

ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS

Will rollover contributions be excluded when determining whether the value of
your Individual Account is less than $5,000?

[ ]  Yes

[X]  No

If "yes" is selected, see your Plan Administrator if special effective dates
pertain.

<PAGE>

                        SUMMARY OF MATERIAL MODIFICATIONS
                          REGARDING AUTOMATIC ROLLOVERS

The purpose of this document is to update your Summary Plan Description (SPD)
for an amendment that was recently made to your employer's retirement plan. This
document is very important and should be kept with your SPD. If any provisions
in this Summary of Material Modifications (SMM) conflict with your SPD the terms
of this SMM will apply. Your SPD is amended to read as follows:

                                  SPD AMENDMENT

DISTRIBUTION OF BENEFITS, CLAIMS PROCEDURES AND LOANS

HOW WILL MY BENEFITS BE PAID TO ME?

A.   Payments from the Plan that are Eligible Rollover Distributions may be
     taken in two ways. You may have all or any portion of your Eligible
     Rollover Distribution either (1) paid in a Direct Rollover to a Traditional
     individual retirement account (IRA) or another qualifying employer plan or
     (2) paid to you. If you choose to have your Plan benefits paid to you, you
     will receive only 80 percent of the payment, because the Plan Administrator
     is required to withhold 20 percent of the payment and send it to the IRS as
     income tax withholding to be credited against your taxes.

     If you do not elect to have your distribution either paid to you or paid in
     a Direct Rollover and your Individual Account does not exceed a certain
     dollar amount (the "cashout level"), your employer will make a distribution
     without your consent. Refer to the Cashout Distribution Provisions section
     of this SMM to determine if the Plan permits cashout distributions and, if
     so, the cashout level. If the Plan permits cashout distributions, you must
     include your rollover contributions, if any, in the balance of your
     Individual Account for purposes of determining whether your Individual
     Account exceeds the cashout level.

B.   The following rules apply to your distribution if your vested Individual
     Account does not exceed the cashout level:

     i.   If the distribution is not an Eligible Rollover Distribution, it will
          be paid directly to you in a single lump sum.

     ii.  If the distribution does not exceed $1,000 and it qualifies as an
          Eligible Rollover Distribution, it will be paid, either directly to
          you or as a Direct Rollover to an IRA, in a single lump sum payment.
          However, if you do not specify how you would like to receive your
          distribution, the Plan Administrator will make a single lump sum
          payment to you unless the Cashout Distribution Provisions section of
          this SMM specifies otherwise.

     iii. If the distribution exceeds $1,000 and it qualifies as an Eligible
          Rollover Distribution, it will be paid, either directly to you or as a
          Direct Rollover to an IRA, in a single lump sum payment. However, if
          you do not specify how you would like to receive your distribution,
          the Plan Administrator will pay the distribution in a Direct Rollover
          to an IRA designated by the Plan Administrator.

          An amount distributed and rolled over into an IRA by the Plan
          Administrator under the Plan's cashout distribution provisions will be
          invested in a product designed to preserve principal and provide a
          reasonable rate of return and liquidity. The ERA provider that
          receives the rollover may charge fees and expenses for maintaining the
          IRA, and these fees and expenses may be assessed directly against the
          assets of the IRA or billed directly to you. For more information
          concerning the rollover procedures, the IRA provider, and the fees and
          expenses relating to the IRA, please contact your Plan Administrator
          whose address and telephone number are found in your SPD.

C.   If your Plan is a profit sharing or 401(k) plan subject to the Retirement
     Equity Act (REA) safe harbor provisions, payouts of your benefits under the
     Plan will be made in a form other than an annuity. Refer to the SPD to
     determine if your Plan is subject to the REA safe harbor provisions.

D.   If your Plan is not subject to the REA safe harbor provisions and your
     vested Individual Account balance is more than $5,000, your payouts will be
     in the form of an annuity, unless the annuity option is waived. An annuity
     will provide you with a series of periodic payments, usually monthly. The
     annuity must be purchased from an insurance company. The size of the
     payments you receive from the annuity will depend upon many factors
     including the value of your vested Individual Account balance.

     i.   If you are married, the annuity will provide monthly payments for as
          long as you or your spouse live. This type of annuity is called a
          Qualified Joint and Survivor Annuity. If you die before your spouse,
          the monthly payments to your spouse will be a percentage of the
          payments you had been receiving before your death. Refer to the SPD to
          determine the survivor annuity percentage.

     ii.  If you are not married, the type of annuity you will receive will
          provide you with monthly payments for as long as you live.

     iii. If you do not want an annuity payout, you may choose other types of
          payments. To waive the annuity option, you must fill out and sign a
          waiver form. If you are married, your spouse must consent to and sign
          the waiver form in the presence of a Notary Public. You and your
          spouse may sign the waiver form any time within 90 days of the start
          of your payments.

     EXAMPLE: Bill wants to start receiving money on March 31, 2004. He and his
     spouse may sign the waiver form any time from January 1 though March 31,
     2004. Bill may now take his money in another form of payment, such as a
     single lump sum payment.

                                        1

<PAGE>

E.   Contributions made to the Plan by you or on your behalf may be used to
     purchase units in various investment funds. The value of these funds can
     change daily.

     Because the value of your units can change daily, the value shown on your
     statement(s) may be different than the actual amount you receive for a
     payout.

ONCE I BECOME ELIGIBLE TO RECEIVE BENEFITS, WHEN WILL THEY BE DISTRIBUTED TO ME?

If you terminate employment and the value of your Individual Account does not
exceed the cashout level, the Plan Administrator will direct that your benefits
be paid as soon as administratively practicable.

If the value of your Individual Account exceeds the cashout level, your benefits
will not be paid until you submit a written request to the Plan Administrator
for payment. The Plan Administrator will provide you with the proper request
forms. Once you have returned the completed request form to the Plan
Administrator, payment will be made as soon as administratively practicable
after the Plan Administrator received your request

EVEN IF I AM ELIGIBLE TO RECEIVE BENEFITS, MUST I HAVE MY BENEFIT DISTRIBUTED
FROM THE PLAN?

If the value of your Individual Account exceeds the cashout limit, your benefit
will not be distributed until you request payment from the Plan Administrator.
You could choose to leave your benefit in the Plan. However, you must generally
begin taking required minimum distributions either when you retire or at age
70 1/2, as explained in your SPD.

WHAT HAPPENS TO MY BENEFITS IF I DIE?

A.   Your Beneficiary will receive the total value of your Individual Account
     when you die. If you are married, your spouse will automatically be your
     Beneficiary. To choose another Beneficiary, you must sign a written form
     listing a nonspouse Beneficiary. Your spouse must give written consent to
     this in the presence of a Notary Public

     NOTE: Contact your Plan Administrator if you wish to choose a nonspouse
     Beneficiary.

B.   If the value of your Individual Account is no more than $5,000, your
     Beneficiary will receive a lump sum payment of the entire amount. If your
     Beneficiary is your spouse, he or she may generally elect to roll over your
     Individual Account to an IRA.

C.   If your Plan is a profit sharing plan or 401(k) plan and is subject to the
     REA safe harbor provisions and the value of your Individual Account is
     greater than $5,000, your Beneficiary will receive a payout(s) in one of
     the following forms of distribution: lump sum; installment payments; or
     applied to purchase an annuity contract. Refer to the SPD to determine if
     any of the preceding forms are unavailable

D.   If the value of your Individual Account is greater than $5,000 and your
     Plan is not subject to the REA safe harbor provisions, your Beneficiary
     will receive the money in periodic payments from an insurance company
     unless a special form is signed. These periodic payments will usually be
     made on a monthly basis for as long as your Beneficiary lives.

     EXAMPLE: Clarence, age 38, signs the waiver form. Mildred, his wife, signs
     the waiver form in the presence of a Notary Public. Clarence dies two years
     later. Mildred now has a choice of payments. She can, for example, take all
     the money in a single lump sum and roll it into her Traditional IRA.

     If your Beneficiary is not your spouse and you want to give your
     Beneficiary a choice as to how he or she wants to receive the money, you
     must sign a special form. This form must also be signed by your spouse in
     the presence of a Notary Public. If you are under age 35 when you sign this
     form, you must sign a new form once you reach age 35.

     NOTE: Contact your Plan Administrator if you wish to preserve the option of
     taking payouts in a form other than an annuity.

CASHOUT DISTRIBUTION PROVISIONS

A.   This SMM will apply to cashout distributions made on or after the later of
     March 28, 2005, the Effective Date of the Plan or __________.

B.   Will cashout distributions be made from this Plan if the value of your
     Individual Account does not exceed the cashout level?

     [X]  Yes
     [ ]  No

C.   The cashout level (if applicable) is:

     [X]  $5,000
     [ ]  $1,000
     [ ]  $200
     [ ]  Other $_____

D.   Cashout distributions (if applicable) that are Eligible Rollover
     Distributions and are $1,000 or less shall be:

     [X]  Paid in a single sum distribution
     [ ]  Paid in a Direct Rollover to an individual retirement plan.

                                        2

<PAGE>

QUALIFIED                SUMMARY PLAN DESCRIPTION
Retirement Plan/403(b)   Loan Information Sheet

<TABLE>
<S>                      <C>
                         As a participant in the qualified retirement
                         plan/403(b) adopted by your employer, you may be able
                         to borrow a portion of your vested account balance..
                         The loan program adopted by your employer is available
                         on a uniform basis to all parties in interest to the
                         plan who meet loan qualification requirements. For
                         additional information about the loan program available
                         under your employer's plan, contact the loan program
                         administrator listed below.

                         NOTE: This Loan Information Sheet constitutes part of
                         the Summary Plan Description (SPD) of your Qualified
                         Retirement Plan and should be kept with your other SPD
                         documents

 PLAN LOAN INFORMATION   Plan Name COLLEGIATE PACIFIC 401(k) PLAN
                         Plan Number 001 Plan Year End 12/31

        EFFECTIVE DATE   The effective date of the plan loan program is
                         04/15/2005

          LOAN PROGRAM   The person responsible for administering your loan
         ADMINISTRATOR   program is THE PLAN ADMINISTRATOR. Your loan program
                         administrator may be reached at the following address
                         and/or telephone number: 13950 SENLAC DRIVE, SUITE,
                         100, DALLAS, TX 75234

      LOAN APPLICATION   To apply for a loan under this plan, you must complete
             PROCEDURE   and return to the loan program administrator a Loan
                         Application, furnishing all information requested and
                         pay any required loan application processing fees. In
                         addition, you must follow the procedures described
                         below (specify). ______________________________________

  LIMITATIONS ON TYPES   Loans from this plan may be used for the following
              OF LOANS   purposes:

                         [X]  all

                         [ ]  purchase of your principal residence

                         [ ]  post-secondary tuition for you or your immediate
                              family

                         [ ]  medical expenses for you or your immediate
                              family

                         [ ]  rent or mortgage payments to prevent eviction or
                              foreclosure from your principal residence

                         [ ]  other (specify) __________________________________

         LOAN APPROVAL   Decisions approving or denying loans from this Plan
             STANDARDS   will be based on the following criteria:

                         [X]  the value of your vested individual account
                              balance

                         [X]  other (specify) LOAN APPROVAL IS LIMITED TO ONE
                              OUTSTANDING LOAN PER PARTICIPANT

                         NOTE: Loan approval basis selected must not cause loans
                         to be made available on a discriminatory basis.

        LOAN PRINCIPAL   Loans from this plan shall be in a minimum amount of
           LIMITATIONS   $1000 (may not exceed $1,000).
                         The maximum amount of all loans outstanding cannot
                         exceed

                         [X]  the lesser of one-half of your vested account
                              balance or $50,000, or

                         [ ]  other (specify) __________________________________

                         NOTE: If the "other" option is selected, the amount
                         entered generally cannot exceed the lesser of one-half
                         of your vested account balance or $50,000.

  INTEREST CALCULATION   Interest on loans from this plan will be computed on
                         the following basis:

                         [X]  prime rate (as specified in the Wall Street
                              Journal)

                         [ ]  prime rate (as specified in the Wall Street
                              Journal) plus _________ percent

                         [ ]  other (specify) __________________________________

                         NOTE: The interest rate must be comparable to that
                         charged by commercial lenders in a similar transaction
                         Any loan renewals are subject to interest rate
                         modification

     COLLATERAL PLEDGE   A percentage of your vested account balance equal to
                         the amount borrowed divided by your vested account
                         balance is pledged as security for repayment of loans
                         under this program.

    DEFAULT PROVISIONS   The following are deemed to be acts of default under
                         your qualified plan/403(b) loan program:

                         -    failure to remit payment in a timely manner as
                              required under the Loan Agreement

                         -    breach of any of your obligations or duties under
                              the Loan Agreement

                         -    termination of employment

                         -    other (specify) __________________________________

                         Upon default, your loan program administrator is
                         entitled to foreclose its security interest in your
                         vested account balance pledged for repayment upon the
                         occurrence of an event which triggers a distribution of
                         your benefits. In addition, the loan program
                         administrator will report as taxable any amounts which
                         are deemed distributed as a result of failing to make
                         loan payments.
</TABLE>

<PAGE>

(BISYS(R) LOGO)
Your Vision - Our Solutions(TM)

DISTRIBUTION NOTICE

Important Information About Your Qualified Retirement Plan Distribution

INTRODUCTION

This Distribution Notice is provided to you in conjuction with the Summary Plan
Description. This notice contains information about your options at the time of
distribution. You will be provided an updated summary of this information at the
time of distribution.

As a participant in your employer's qualified retirement plan, you have
accumulated a vested account balance. You may receive your vested account
balance only if you incur a triggering event. You may incur a triggering event
if:

          -    you quit working for your employer,

          -    you attain the normal retirement age indicated in the plan,

          -    you become disabled,

          -    your employer terminates the plan,

          -    your plan permits in-service distributions, or

          -    you incur a hardship (only applicable to certain plans).

However, you must refer to your Summary Plan Description to identify the
specific triggering events which apply under your plan.

NOTE: Generally, payments from your employer's qualified retirement plan must be
delayed for a minimum of 30 days after you receive this notice, to allow you
time to consider your distribution options. Although you are entitled to
consider your distribution options for a period of 30 days, you may waive this
30 day notice requirement. If you are subject to the Retirement Equity Act (REA)
notice requirements and you waive the 30 day notice requirement, your employer
must wait seven days from the date you received this notice before commencing
distributions.

The law dictates the optional forms that your payments may take. The law also
specifies how the different types of payments will be taxed. This notice
summarizes your distribution options and illustrates the financial effect and
the tax consequences of each distribution option.

PART ONE of this notice describes the plan payment options available to you.
PART TWO describes your beneficiary(ies) payment options PART THREE contains a
special tax notice, required by the IRS, that explains the tax treatment of your
plan payment and describes the direct rollover option for eligible rollover
distributions.

NOTE: The payment amounts indicated in this notice are only examples. The
calculations for the Qualified Joint and Survivor Annuity are based on standard
mortality tables using a five percent interest rate and a payment age of 65.
Actual payment amounts will Vary depending upon the entity from which you
purchase your annuity. You may obtain financial projections based upon your
account balance by submitting a request, in writing, to the plan administrator
(usually the employer).

                PART ONE -- PAYMENT OPTIONS FOR PLAN PARTICIPANTS

IMPORTANT NOTICE TO PARTICIPANT

Read the following message before reviewing your options.

Of the four options listed below, some may not be available to you. If the plan
is known as a "REA safe harbor" plan, and no existing plan assets are subject to
the REA annuity requirements, under most circumstances Option I listed below is
not available to you, and Option II may be available to you.

DISTRIBUTION OPTIONS

If your vested account balance is $5,000 or less at the time of distribution,
the plan administrator is required to pay your distribution to you in a single
cash payment. If the amount exceeds $1,000 and is an eligible rollover
distribution and you do not instruct the plan administrator otherwise, your
vested account balance may be directly rolled into a Traditional IRA. You may
subsequently transfer the distribution to another Traditional IRA. If your
vested account balance exceeds $5,000, you must consent to the form of payment.

I.   QUALIFIED JOINT AND SURVIVOR ANNUITY

     The law requires that your vested account balance be paid to you in the
     form of a Qualified Joint and Survivor Annuity if you are married, or a
     Single Life Annuity if you are not married. If you wish to receive your
     vested account balance using a different distribution option (described
     below), you must waive the Qualified Joint and Survivor Annuity (the Single
     Life Annuity if you are not married) and your spouse must consent to the
     annuity waiver.

     Unless properly waived, you will receive your vested account balance in the
     form of a Qualified Joint and Survivor Annuity (the Single Life Annuity if
     you are not married)

     A.   QUALIFIED JOINT AND SURVIVOR ANNUITY DEFINED

          If you are married, a Qualified Joint and Survivor Annuity is a series
          of periodic payments to you during your lifetime and to your spouse
          upon your death. The periodic payment amount your spouse receives will
          be a set percentage of the periodic payment amount you received during
          your lifetime. To determine the percentage your spouse would receive
          (i.e., survivor annuity), contact the plan administrator.

          If you are not married, a Qualified Joint and Survivor Annuity is a
          series of annuity payments over your life.

     B.   WAIVING THE QUALIFIED JOINT AND SURVIVOR ANNUITY

          If you wish to receive your vested account balance using one of the
          other options listed in Section II through IV of this form, you (and,
          if you are married, your spouse) must waive the Qualified Joint and
          Survivor Annuity. You can waive the Qualified Joint and Survivor
          Annuity by completing a distribution form. You can obtain this form
          from your plan administrator. After waiving the Qualified Joint and
          Survivor Annuity by signing the distribution form, you may receive
          your vested account balance using one of the other distribution
          methods explained below.

     C.   FINANCIAL EFFECT OF A QUALIFIED JOINT AND SURVIVOR ANNUITY

          As stated above, a Qualified Joint and Survivor Annuity will provide
          periodic payments to you during your lifetime and, if you are married,
          to your spouse after your death. Your spouse will generally receive
          smaller periodic payments than you received while you were alive. For
          example, assume a participant retires with a $10,000 vested account
          balance. A Qualified Joint and Survivor Annuity would provide him or
          her with the following payments.

<TABLE>
<CAPTION>
  Lifetime Monthly    % of Survivor        Monthly
Participant Benefit      Annuity*     Survivor Benefit
-------------------   -------------   ----------------
<S>                   <C>             <C>
       $63.40               100%           $63.40
       $66.30                75%           $49.72
       $67.30             66.67%           $44.86
       $69.40                50%           $34.70
</TABLE>

*    These estimates are derived from standard mortality tables using a
     participant with a 65 year old spouse beneficiary beginning payments at age
     65. To determine the survivor annuity percentage, contact the plan
     administrator.

                                   Page 1 of 6

<PAGE>

II.  ANNUITY CONTRACT

     If the plan is a REA safe harbor plan, or the Qualified Joint and Survivor
     Annuity is properly waived, you may purchase an annuity contract with your
     vested account balance. This distribution option allows you to choose the
     type of annuity contract you wish to purchase. However, if the plan is a
     REA safe harbor plan, you cannot elect payments in the form of a life
     annuity.

     A.   ANNUITY CONTRACT DEFINED

          You may use your vested account balance to purchase a term certain
          annuity, a single life annuity (not available for REA safe harbor
          plans, unless the plan indicates otherwise) or any other form of
          annuity. A term certain annuity would distribute dollars to you and
          your beneficiary for a specified number of years A single life
          annuity would distribute dollars to you for your lifetime and would
          cease distributions after your death.

     B.   FINANCIAL EFFECT AND TAX CONSEQUENCES OF THE ANNUITY

          If you elect to use your vested account balance to purchase a single
          life annuity, you will receive payments as long as you are alive. For
          example, a participant who is age 65 with a $10,000 vested account
          balance will receive $76.60 per month while he or she is alive.

III. LUMP SUM PAYMENT

     If you properly waive the Qualified Joint and Survivor Annuity or if this
     is a REA safe harbor plan and no existing plan assets are subject to the
     REA annuity requirements, you may request a single sum payment.

     A.   LUMP SUM PAYMENT DEFINED

          A Lump Sum Payment is the payment of your entire vested account
          balance.

     B.   FINANCIAL EFFECT AND TAX CONSEQUENCES OF A LUMP SUM PAYMENT

          Generally a Lump Sum Payment is included in your income and taxed in
          the year of the distribution. Most Lump Sum Payments are eligible
          rollover distributions and would, therefore, be subject to the 20
          percent withholding rules unless directly rolled over to another plan
          or Traditional IRA See Part Three, "Special Tax Notice Regarding Plan
          Payments" for more information.

IV.  INSTALLMENT PAYMENTS

     If the Qualified Joint and Survivor Annuity is properly waived or if this
     is a REA safe harbor plan, you may elect to receive your vested account
     balance in installment payments. Installment payments for a period of less
     than 10 years are generally eligible rollover distributions and would,
     therefore, be subject to the 20 percent withholding rules unless directly
     rolled over to another plan or Traditional IRA See Part Three, "Special Tax
     Notice Regarding Plan Payments" for more information.

     A.   INSTALLMENT PAYMENTS DEFINED

          Installment payments are payments distributed to you in any amount you
          choose at intervals that you determine within limits set by the
          trustee or custodian. For example, the payments could be paid to you
          annually, semiannually, quarterly, or monthly. The payment schedule
          you choose cannot be longer than your single life expectancy or, if
          you have a beneficiary named, the joint life expectancy of you and
          your beneficiary.

     B.   FINANCIAL EFFECT AND TAX CONSEQUENCES OF INSTALLMENT PAYMENTS

          Generally, each installment payment will be included in your income in
          the year in which you receive it. For example, a participant who
          elects to receive $500 per month will include $6,000 ($500 x 12
          months) in income each tax year.

   PART TWO - PAYMENT OPTIONS FOR BENEFICIARIES OF DECEASED PLAN PARTICIPANTS

IMPORTANT NOTICE TO BENEFICIARY

If you are the designated beneficiary of a deceased participant's vested account
balance, you are eligible to receive a distribution. The form of the benefit
depends on several factors including the type of plan and the amount in the
participant's account.

I.   PARTICIPANT'S ACCOUNT BALANCE

     If the participant's vested account balance was $5,000 or less the plan
     administrator is required to pay your distribution to you in a single cash
     payment If the participant's account balance exceeded $1,000 and is an
     eligible rollover distribution and you do not instruct the plan
     administrator otherwise, the vested account balance may be directly rolled
     into a Traditional ERA. You may subsequently transfer the distribution to
     another Traditional IRA. If the participant's vested account balance
     exceeded $5,000, you must consent to the form of payment

II.  TYPE OF PLAN

     NOTE: THE PLAN ADMINISTRATOR CAN TELL YOU WHICH TYPE OF PLAN THIS IS.

     A.   REA SAFE HARBOR PLANS (PROFIT SHARING OR 401(K) PLANS ONLY)

          You may select Option II, III or IV listed above. However, if you
          select the installment payment method described in Option IV, the
          payment schedule you choose cannot be longer than your life single
          expectancy.

     B.   ALL OTHER PLANS

          If the plan participant died before distributions commenced and you
          are a spouse beneficiary, distributions from the plan must be paid to
          you (if applicable) in the form of a qualified preretirement survivor
          annuity, unless the annuity requirement was properly waived. A
          participant waives the annuity requirement by completing a
          "Designation of Beneficiary" form and obtaining your written consent
          to the waiver. If the participant did not execute the required
          waivers, then his or her account balance will be paid to you (the
          deceased participant's spouse) in the form of a preretirement survivor
          annuity unless the plan specifically permits you to elect to receive
          payments in a form other than a qualified preretirement survivor
          annuity. If you are a nonspouse beneficiary of a deceased participant
          who was married, you will not receive any payment from the plan unless
          the participant properly waived the requirement that his or her spouse
          be the beneficiary.

If the qualified preretirement survivor annuity was properly waived by the
participant and/or his or her spouse (if applicable), then you may receive the
entire vested account balance in a Lump Sum Payment as explained in Part One,
Option III, of this notice. The rollover option described below is available
only if you are the spouse of the deceased participant. The other distribution
option available to you as a beneficiary is explained in Part One, Option IV,
"Installment Payments". However, the payment schedule you choose cannot be
longer than your single life expectancy.

                                   Page 2 of 6

<PAGE>

             PART THREE - SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SUMMARY

This notice explains how you can continue to defer federal income tax on your
retirement savings, and contains important information you will need before you
decide how to receive your plan benefits.

NOTE: Your employer has received an IRS opinion letter that this plan is
qualified.

This notice is provided to you by your plan administrator because all or part of
the payment that you will soon receive from the plan may be eligible for
rollover by you or your plan administrator to a Traditional IRA or an eligible
employer plan. A rollover is a payment by you or the plan administrator of all
or part of your benefit to another plan or IRA that allows you to continue to
postpone taxation of that benefit until it is paid to you. Your payment cannot
be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings
Account (formerly known as an Education IRA). An "eligible employer plan"
includes a plan qualified under Section 401(a) of the Internal Revenue Code,
including a 401(k) plan, profit-sharing plan, defined benefit plan, stock
bonus plan, and money purchase plan; an annuity plan described under Section
403(a) of the Code; a tax-sheltered annuity described under Section 403(b) of
the Code; and a deferred compensation plan, described under Section 457(b) of
the Code, maintained by a governmental employer (governmental 457(b) plan).

An eligible employer plan is not legally required to accept a rollover. Before
you decide to roll over your payment to another employer plan, you should find
out whether the plan accepts rollovers and, if so, the types of distributions it
accepts as a rollover. You should also find out about any documents that are
required to be completed before the receiving plan will accept a rollover. Even
if a plan accepts rollovers, it might not accept rollovers of certain types of
distributions, such as after-tax amounts. If this is the case, and your
distribution includes after-tax amounts, you may wish instead to roll your
distribution over to a Traditional IRA or split your rollover amount between the
employer plan in which you will participate and a Traditional IRA. If an
employer plan accepts your rollover, the plan may restrict subsequent
distributions of the rollover amount or may require your spouse's consent for
any subsequent distribution. A subsequent distribution from the plan that
accepts your rollover may also be subject to different tax treatment than
distributions from this plan. Check with the administrator of the plan that is
to receive your rollover prior to making the rollover.

If you have additional questions after reading this notice, you may contact your
plan administrator.

There are two ways you may be able to receive a plan payment that is eligible
for rollover: (1) certain payments can be made directly to a Traditional IRA
that you establish or to an eligible employer plan that will accept it and hold
it for your benefit ("direct rollover"); or (2) the payment can be paid to you.

If you choose a direct rollover the following will result.

     -    Your payment will not be taxed in the current year and no income tax
          will be withheld.

     -    You choose whether your payment will be made directly to your
          Traditional IRA or to an eligible employer plan that accepts your
          rollover. Your payment cannot be rolled over to a Roth IRA, a SIMPLE
          IRA, or a Coverdell Education Savings Account because these are not
          Traditional IRAs.

     -    The taxable portion of your payment will be taxed later when you take
          it out of the Traditional IRA or the eligible employer plan. Depending
          on the type of plan, the subsequent distribution may be subject to
          different tax treatment than it would be if you received a taxable
          distribution from this plan.

If you choose to have a plan payment that is eligible for rollover paid to you,
the following will result.

     -    You will receive only 80 percent of the taxable amount of the payment,
          because the plan administrator is required to withhold 20 percent of
          that amount and send it to the IRS as income tax withholding to be
          credited against your taxes.

     -    The taxable amount of your payment will be taxed in the current year
          unless you roll it over. Under limited circumstances, you may be able
          to use special tax rules that could reduce the tax you owe. However,
          if you receive the payment before age 59 1/2 you also may have to pay
          an additional 10 percent tax.

     -    You can roll over the payment by paying it to your Traditional IRA or
          to an eligible employer plan that accepts your rollover within 60 days
          after you receive the payment. The amount rolled over will not be
          taxed until you take it out of the Traditional IRA or the eligible
          employer plan.

     -    If you want to roll over 100 percent of the payment to a Traditional
          IRA or an eligible employer plan, you must find other money to replace
          the 20 percent of the taxable portion that was withheld. If you roll
          over only the 80 percent that you received, you will be taxed on the
          20 percent that was withheld and that is not rolled over.

MORE INFORMATION

I.   PAYMENTS THAT CAN AND CANNOT BE ROLLED OVER

     Payments from the plan may be "eligible rollover distributions". This means
     that they can be rolled over to a Traditional IRA or an eligible employer
     plan that accepts rollovers. Payments from a plan cannot be rolled over to
     a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account. Your
     plan administrator should be able to tell you what portion of your payment
     is an eligible rollover distribution.

     A.   AFTER-TAX CONTRIBUTIONS

          If you made after-tax contributions to the plan, these contributions
          may be rolled into either a Traditional IRA or to certain employer
          plans that accept rollovers of after-tax contributions. The following
          rules apply.

          1.    ROLLOVER INTO A TRADITIONAL IRA

               You can roll over your after-tax contributions to a Traditional
               IRA either directly or indirectly. Your plan administrator should
               be able to tell you how much of your payment is taxable and how
               much is after-tax.

               If you roll over after-tax contributions to a Traditional IRA, it
               is your responsibility to keep track of, and report to the IRS on
               the applicable forms, the amount of these after-tax
               contributions. This will enable the nontaxable amount of any
               future distributions from the Traditional IRA to be determined.

               Once you roll over your after-tax contributions to a Traditional
               IRA, those amounts CANNOT later be rolled over to an employer
               plan.

                                   Page 3 of 6

<PAGE>

          2.   Rollover into an Employer Plan

               You can roll over after-tax contributions from an eligible
               employer plan that is qualified under Section 401(a) or 403(a) of
               the Code to another such plan using a direct rollover if the plan
               receiving the rollover provides separate accounting for such
               amounts, including separate accounting for the after-tax
               contributions and earnings on those contributions. You CANNOT
               roll over such after-tax contributions to a governmental 457(b)
               plan. If you want to roll over your after-tax contributions to an
               employer plan that accepts such rollovers, you cannot have the
               after-tax contributions paid to you first. You must instruct the
               plan administrator of this plan to make a direct rollover on your
               behalf. Also, you cannot first roll over after-tax contributions
               to a Traditional IRA and then roll over such contributions into
               an eligible employer plan.

     B.   The following are types of payments that cannot be rolled over.

          PAYMENTS SPREAD OVER LONG PERIODS

          You cannot roll over a payment if it is part of a series of
          equal (or almost equal) payments that are made at least once
          a year and that will last for,

                    -    your lifetime (or a period measured by your life
                         expectancy), or

                    -    your lifetime and your beneficiary's lifetime (or a
                         period measured by your joint life expectancies), or

                    -    a period of ten years or more.

          REQUIRED MINIMUM PAYMENTS

          Beginning when you reach age 70 1/2 or retire, whichever is later, a
          certain portion of your payment cannot be rolled over because it is a
          "required minimum payment" that must be paid to you. Special rules
          apply if you own more than five percent of your employer.

          HARDSHIP DISTRIBUTIONS

          A hardship distribution cannot be rolled over.

          ESOP DIVIDENDS

          Cash dividends paid to you on employer stock held in an employee stock
          ownership plan cannot be rolled over.

          CORRECTIVE DISTRIBUTIONS

          A distribution that is made to correct a failed nondiscrimination
          test or because legal limits on certain contributions were exceeded
          cannot be rolled over.

          LOANS TREATED AS DISTRIBUTIONS

          The amount of a plan loan that becomes a taxable deemed distribution
          because of a default cannot be rolled over. However, a loan offset
          amount is eligible for rollover, as discussed in Part III below. Ask
          the plan administrator of this plan if distribution, of your loan
          qualifies for rollover treatment.

     The plan administrator of this plan should be able to tell you if your
     payment includes amounts which cannot be rolled over.

II.  DIRECT ROLLOVER

     A direct rollover is a direct payment of the amount of your plan benefits
     to a Traditional IRA or an eligible employer plan that will accept it. You
     can choose a direct rollover of all or any portion of your payment that is
     an eligible rollover distribution, as described in Part I above. You are
     not taxed on any taxable portion of your payment for which you choose a
     direct rollover until you later take it out of the Traditional IRA or
     eligible employer plan. In addition, no income tax withholding is required
     for any portion of your plan benefits for which you choose a direct
     rollover. This plan might not let you choose a direct rollover if your
     distributions for the year are less than S200.

     A.   DIRECT ROLLOVER TO A TRADITIONAL IRA

          You can open a Traditional IRA to receive the direct rollover. If you
          choose to have your payment made directly to a Traditional IRA,
          contact an IRA sponsor (usually a financial institution) to find out
          how to have your payment made in a direct rollover to a Traditional
          IRA at that institution. If you are unsure of how to invest your
          money, you can temporarily establish a Traditional IRA to receive the
          payment. However, in choosing a Traditional IRA, you may wish to make
          sure that the Traditional IRA you choose will allow you to move all or
          a part of your payment to another Traditional IRA at a later date,
          without penalties or other limitations See IRS Publication 590,
          Individual Retirement Arrangements, for more information on
          Traditional IRAs (including limits on how often you can roll over
          between IRAs).

     B.   DIRECT ROLLOVER TO A PLAN

          If you are employed by a new employer that has an eligible employer
          plan, and you want a payment from your previous employer's plan
          directly rolled over to your new employer's plan, ask the plan
          administrator of that plan whether it will accept your rollover. An
          eligible employer plan is not legally required to accept a rollover.
          Even if your new employer's plan does not accept a rollover, you can
          choose a direct rollover to a Traditional IRA. If your new employer's
          plan accepts your rollover, the plan may provide restrictions on the
          circumstances under which you may later receive a distribution of the
          rollover amount or may require spousal consent to any subsequent
          distribution Check with the plan administrator of the receiving plan
          before making your decision.

     C.   DIRECT ROLLOVER OF A SERIES OF PAYMENTS

          If you receive a payment that can be rolled over to a Traditional IRA
          or an eligible employer plan, and it is paid in a series of payments
          for less than ten years, your choice to make or not make a direct
          rollover of the first payment will apply to all later payments in the
          series until you change your election. You are free to change your
          election for any later payment in the series.

     D.   CHANGE IN TAX TREATMENT RESULTING FROM A DIRECT ROLLOVER

          The tax treatment of any payment from the eligible employer plan or
          Traditional IRA receiving your direct rollover might be different than
          if you received your benefit in a taxable distribution directly from
          the plan. For example, if you were born before January 1, 1936, you
          might be entitled to ten-year averaging or capital gain treatment, as
          explained below. However, if you have your benefit rolled over to a
          tax-sheltered annuity described under Section 403(b) of the Code, a
          deferred compensation plan described under Section 457(b) of the Code,
          or a Traditional IRA in a direct rollover, your benefit will no longer
          be eligible for that special treatment. See the sections below
          entitled "Additional 10 percent Tax If You Are Under Age 59 1/2" and
          "Special Tax Treatment If You Were Born Before January 1, 1936."

                                   Page 4 of 6

<PAGE>

III. PAYMENT PAID TO YOU

     If your payment can be rolled over (see Part I above) and the payment is
     made to you in cash, it is subject to 20 percent federal income tax
     withholding on the taxable portion (stale tax withholding may also apply).
     The payment is taxed in the year you receive it unless, within 60 days, you
     roll it over to a Traditional IRA or an eligible employer plan. If you do
     not roll it over, special tax rules may apply.

     A.   INCOME TAX WITHHOLDING

          1.   MANDATORY WITHHOLDING

               If any portion of your payment can be rolled over under Part I
               above and you do not elect to make a direct rollover, the plan is
               required by law to withhold 20 percent of the taxable amount.
               This amount is sent to the IRS as income tax withholding. For
               example, if you can roll over a taxable payment of $10,000, only
               $8,000 will be paid to you because the plan must withhold $2,000
               as income tax. However, when you prepare your income tax return
               for the year, unless you make a rollover within 60 days (see
               "Sixty-Day Rollover Option" below) you must report the full
               $10,000 as a payment from the plan. You must report the $2,000 as
               tax withheld, and it will be credited against any income tax you
               owe for the year. There will be no income tax withholding if your
               payments for the year are less than $200.

          2.   VOLUNTARY WITHHOLDING

               If any portion of your payment is taxable but cannot be rolled
               over under Part I above, the mandatory withholding rules
               described above do not apply. In this case, you may elect not to
               have withholding apply to that portion. If you do nothing, an
               amount will be taken out of this portion of your payment for
               federal income tax withholding. To elect out of withholding, ask
               the plan administrator for the election form and related
               information.

          3.   SIXTY-DAY ROLLOVER OPTION

               If you receive a payment that can be rolled over under Part I
               above, you can still decide to roll over all or part of it to a
               Traditional IRA or an eligible employer plan. If you decide to
               roll over, you must contribute the amount of the payment you
               received to a Traditional IRA or eligible employer plan within 60
               days after you receive the payment. The portion of your payment
               that is rolled over will not be taxed until you take it out of
               the Traditional IRA or the eligible employer plan.

          You can roll over up to 100 percent of your payment that can be rolled
          over under Part I above, including an amount equal to the 20 percent
          of the taxable portion that was withheld. If you choose to roll over
          100 percent, you must find other money within the 60-day period to
          contribute to the Traditional IRA or the eligible employer plan, to
          replace the 20 percent that was withheld. On the other hand, if you
          roll over only the 80 percent of the taxable portion that you
          received, you will be taxed on the 20 percent that was withheld.

               Example: The taxable portion of your payment that can be rolled
               over under Part I above is $10,000, and you choose to have it
               paid to you. You will receive $8,000, and $2,000 will be sent to
               the IRS as income tax withholding. Within 60 days after receiving
               the $8,000, you may roll over the entire $10,000 to a Traditional
               IRA or eligible employer plan. To do this, you roll over the
               $8,000 you received from the plan, and you will have to find
               $2,000 from other sources (your savings, a loan, etc). In this
               case, the entire $10,000 is not taxed until you take it out of
               the Traditional IRA or an eligible employer plan. If you roll
               over the entire $10,000, when you file your income tax return you
               may get a refund of part or all of the $2,000 withheld.

               If, on the other hand, you roll over only $8,000, the $2,000 you
               did not roll over is taxed in the year it was withheld. When you
               file your income tax return you may get a refund of part of the
               $2,000 withheld (However, any refund is likely to be larger if
               you roll over the entire $10,000.)

     B.   ADDITIONAL 10 PERCENT TAX IF YOU ARE UNDER AGE 59 1/2

          If you receive a payment before you reach age 59 1/2 and you do not
          roll it over, then, in addition to the regular income tax, you may
          have to pay an extra tax equal to 10 percent of the taxable portion of
          the payment. The additional 10 percent tax generally does not apply to
          (1) payments that are paid after you separate from service with your
          employer during or after the year you reach age 55, (2) payments that
          are paid because you retire due to disability, (3) payments that are
          paid as equal (or almost equal) payments over your life or life
          expectancy (or your and your beneficiary's lives or life
          expectancies), (4) dividends paid with respect to stock by an employee
          stock ownership plan (ESOP) as described in Section 404(k) of the
          Code, (5) payments that are paid directly to the government to satisfy
          a federal tax levy, (6) payments that are paid to on alternate payee
          under a qualified domestic relations order, or (7) payments that do
          not exceed the amount of your deductible medical expenses. See IRS
          Form 5329 for more information on the additional 10 percent tax.

          The additional 10 percent tax will not apply to distributions from a
          governmental 457(b) plan, except to the extent the distribution is
          attributable to an amount you rolled over to that plan (adjusted for
          investment returns) from another type of eligible employer plan or
          IRA. Any amount rolled over from a governmental 457(b) plan to another
          type of eligible employer plan or to a Traditional IRA will become
          subject to the additional 10 percent tax if it is distributed to you
          before you reach age 59 1/2, unless one of the exceptions applies.

     C.   SPECIAL TAX TREATMENT IF YOU WERE BORN BEFORE JANUARY 1, 1936

          If you receive a payment that can be rolled over under Part I and you
          do not roll it over to a Traditional IRA or an eligible employer plan,
          the payment will be taxed in the year you receive it. However, if the
          payment qualifies as a "lump sum distribution," it may be eligible for
          special tax treatment (See also "Employer Stock or Securities" below.)
          A lump sum distribution is a payment, within one year, of your entire
          balance under the plan (and certain other similar plans of the
          employer) that is payable to you after you have reached age 59 1/2 or
          because you have separated from service with your employer (or, in the
          case of a self-employed individual, after you have reached age 59 1/2
          or have become disabled) For a payment to be treated as a lump sum
          distribution, you must have been a participant in the plan for at
          least five years before the year in which you received the
          distribution. The special tax treatment for lump sum distributions
          that may be available to you is described below.

          1.   TEN-YEAR AVERAGING

               If you receive a lump sum distribution and you were born before
               January 1, 1936, you can make a one-time election to figure the
               tax on the payment by using "10-year averaging" (using 1986 tax
               rates). Ten-year averaging often reduces the tax you owe.

          2.   CAPITAL GAIN TREATMENT

               If you receive a lump sum distribution and you were born before
               January 1, 1936, and if you were a participant in the plan before
               1974, you may elect to have the part of your payment that is
               attributable to your pre-1974 participation in the plan taxed as
               long-term capital gain at a rate of 20 percent.

                                   Page 5 of 6

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          There are other limits on the special tax treatment for lump sum
          distributions. For example, you can generally elect this special tax
          treatment only once in your lifetime, and the election applies to all
          lump sum distributions that you receive in that same year. You may not
          elect this special tax treatment if you rolled amounts into this plan
          from a 403(b) tax-sheltered annuity contract or from an IRA not
          originally attributable to a qualified employer plan If you have
          previously rolled over a distribution from a governmental 457(b) plan
          (or certain other similar plans of the employer), you cannot use this
          special averaging treatment for later payments from this plan If you
          roll over your payment to a Traditional IRA, a tax-sheltered annuity
          described under Section 403(b) of the Code, or a governmental 457(b)
          plan, you will not be able to use special tax treatment for later
          payments from that IRA, plan, or annuity. Also, if you roll over only
          a portion of your payment to a Traditional IRA, a tax-sheltered
          annuity described under Section 403(b) of the Code, or a governmental
          457(b) plan, this special tax treatment is not available for the rest
          of the payment See IRS Form 4972 for additional information on lump
          sum distributions and how you elect the special tax treatment.

     D.   EMPLOYER STOCK OR SECURITIES

          There is a special rule for a payment from the plan that includes
          employer stock (or other employer securities) To use this special
          rule, 1) the payment must qualify as a lump sum distribution, as
          described above, except that you do not need five years of plan
          participation, or 2) the employer stock included in the payment must
          be attributable to "after-tax" employee contributions, if any. Under
          this special rule, you may have the option of not paying tax on the
          "net unrealized appreciation" of the stock until you sell the stock
          Net unrealized appreciation generally is the increase in the value of
          the employer stock while it was held by the plan For example, if
          employer stock was contributed to your plan account when the stock was
          worth $1,000 but the stock was worth $1,200 when you received it, you
          would not have to pay tax on the $200 increase in value until you
          later sold the stock.

          You may instead elect not to have the special rule apply to the net
          unrealized appreciation. In this case, your net unrealized
          appreciation will be taxed in the year you receive the stock, unless
          you roll over the stock. The stock can be rolled over to a Traditional
          IRA or another eligible employer plan, either in a direct rollover or
          a rollover that you make yourself. Generally, you will no longer be
          able to use the special rule for net unrealized appreciation if you
          roll the stock over to a Traditional IRA or another eligible employer
          plan.

          If you receive only employer stock in a payment that can be rolled
          over, no amount will be withheld from the payment. If you receive cash
          or property other than employer stock, as well as employer stock, in a
          payment that can be rolled over, the 20 percent withholding amount
          will be based on the entire taxable amount paid to you (including the
          employer stock determined by excluding the net unrealized
          appreciation). However, the amount withheld will be limited to the
          cash or property (excluding employer stock) paid to you.

          If you receive employer stock in a payment that qualifies as a lump
          sum distribution, the special tax treatment for lump sum distributions
          described above {such as 10-year averaging) also may apply, See IRS
          Form 4972 for additional information on these rules

     E.   REPAYMENT OF PLAN LOANS

          If your employment ends and you have an outstanding loan from the
          plan, your employer may reduce (or "offset") your balance in the plan
          by the amount of the loan you have not repaid. The amount of your loan
          offset is treated as a distribution to you at the time of the offset
          and will be taxed unless you roll over an amount equal to the amount
          of your loan offset to another qualified employer plan or a
          Traditional IRA within 60 days of the date of the offset. If the
          amount of your loan offset is the only amount you receive or are
          treated as having received, no amount will be withheld from it. If you
          receive other payments of cash or property from the plan, the 20
          percent withholding amount will be based on the entire taxable amount
          paid to you, including the amount of the loan offset. The amount
          withheld will be limited to the amount of other cash or property paid
          to you (other than any employer securities). The amount of a defaulted
          plan loan that is a taxable deemed distribution cannot be rolled over.

IV.  SURVIVING SPOUSES, ALTERNATE PAYEES, AND OTHER BENEFICIARIES

     In general, the rules summarized above that apply to payments to employees
     also apply to payments to surviving spouses of employees and to spouses or
     former spouses who are "alternate payees." You are an alternate payee if
     your interest in the plan results from a "qualified domestic relations
     order," which is an order issued by a court, usually in connection with a
     divorce or legal separation.

     If you are a surviving spouse or an alternate payee, you may choose to have
     a payment that can be rolled over, as described in Part I above, paid in a
     direct rollover to a Traditional IRA or to on eligible employer plan, or
     paid to you If you have the payment paid to you, you can keep it or roll it
     over yourself to a Traditional IRA or to an eligible employer plan. Thus,
     you have the same choices as the employee.

     If you are a beneficiary other than a surviving spouse or an alternate
     payee, you cannot choose a direct rollover, and you cannot roll over the
     payment yourself.

     If you are a surviving spouse, an alternate payee, or another beneficiary,
     your payment is generally not subject to the additional 10 percent tax
     described in Part Three Section III above, even if you are younger than age
     59 1/2.

     If you are a surviving spouse, an alternate payee, or another beneficiary,
     you may be able to use the special tax treatment for lump sum distributions
     and the special rule for payments that include employer stock, as described
     in Part Three Section III above. If you receive a payment because of the
     employee's death, you may be able to treat the payment as a lump sum
     distribution if the employee met the appropriate age requirements, whether
     or not the employee had five years of participation in the plan.

HOW TO OBTAIN ADDITIONAL INFORMATION

This notice summarizes only the federal (not state or local) tax rules that
might apply to your payment. The rules described above are complex and contain
many conditions and exceptions that are not included in this notice. Therefore,
you may want to consult with the plan administrator or a professional tax
advisor before you take a payment of your benefits from the plan. Also, you can
find more specific information on the tax treatment of payments from qualified
employer plans in IRS Publication 575, Pension and Annuity Income, and IRS
Publication 590, individual Retirement Arrangements. These publications are
available from your local IRS office, on the IRS's Internet Web Site at
www.irs.gov, or by calling 1-800-TAX-FORM.

                                   Page 6 of 6

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