EXHIBIT 10.24

THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of December 6, 1999, is by and between UNITED NATURAL FOODS, INC. (the "Company"), and STEVEN H. TOWNSEND ("Employee").

1. Employment.

The Company hereby agrees to employ Employee, and Employee agrees to be employed by the Company, for the Term defined in Section 3, subject to earlier termination as hereinafter provided, at the rate of compensation and upon the other terms and conditions hereinafter set forth.

2. Position and Responsibilities.

During the Term of this Agreement, Employee agrees to serve in such executive capacities as the Company and Employee may agree, and from and after January 28, 2000, as President for the Eastern Wholesale Region, with the duties, responsibilities and authority consistent with such position. For purposes of this Agreement, the "Eastern Wholesale Region" shall mean the Company's sales operations in Atlanta, Georgia, Connecticut, New Hampshire and Pennsylvania, provided that the Company may place the Atlanta operations in a different region in the future. Employee's principal office shall be at Company headquarters in Dayville, Connecticut, with such travel as is necessary to perform his duties. Employee shall report to the Chief Executive Officer of the Company. During the Term, Employee also agrees to perform such other executive services not inconsistent with this position as shall from time to time be assigned to him.

3. Term and Duties.

3.1 Unless earlier terminated as provided herein, the Term of this Agreement shall commence on the date of this Agreement and shall continue until January 31, 2002.

3.2 During the Term, except for illness, vacations and holidays in accordance with then current Company policy, Employee shall devote all his business time, attention, skill, undivided loyalty and best efforts to the faithful performance of his duties hereunder.

4. Compensation; Reimbursement of Expenses.

4.1 For all services rendered by Employee in any capacity during the term of his employment under this Agreement, Employee shall receive a base salary at an annualized rate of One Hundred Fifty Thousand Dollars ($150,000) per annum, payable in accordance with the customary payroll practices of the Company.

4.2 Employee shall receive a bonus equal to one half of one percent (0.5%) of the operating profit of the Eastern Wholesale Region. The bonus will be paid on a quarterly basis within forty-five (45) days of the end of each quarter, beginning with the quarter ending April 30, 2000.

4.3 Employee is granted non-qualified options to purchase up to fifty thousand (50,000) shares of the Company's Common Stock, said options to vest in four equal annual installments beginning on the first anniversary of the date of grant, provided that Employee is an employee of the Company on such vesting date(s). Such options shall be subject to all of the terms and conditions of the United Natural Foods, Inc. Amended and Restated 1996 Stock Option Plan, as amended.

4.4 Consistent with established policies of the Company, the Company shall pay or reimburse Employee for all reasonable travel and other expenses incurred by Employee in performing his obligations under this Agreement.

4.5 Employee shall be entitled to participate in all Company benefits now in effect or subsequently provided to other Company employees, to the extent he is eligible. In determining such benefits, the Company shall give Employee service credit for past service to the Company, and such benefits shall, at a minimum, be restored to the same level as those to which Employee was entitled when Employee previously left the Company. Such determination and restoration shall be subject to the terms of each benefit plan and applicable law.

5. Termination of Employment; Payments.

5.1 Employee's employment hereunder shall terminate:

(a) automatically upon the death of Employee;

(b) at the election of the Company in the event of Employee's disability. As used in this Agreement, the term "disability" shall mean the material inability, in the reasonable opinion of the Chief Executive Officer, of Employee to render his agreed upon full-time services to the Company due to physical and/or mental infirmity for a period of one hundred twenty (120) consecutive days, or an aggregate period of time exceeding one hundred twenty (120) days in any consecutive twelve (12) month period;

(c) upon discharge of Employee by the Company for cause. As used in this Agreement, "cause" shall mean (i) conviction of a felony or crime of moral turpitude under applicable law, (ii) unauthorized acts intended to result in Employee's personal enrichment at the material expense of the Company or its reputation, (iii) any violation of Employee's duties or responsibilities to the Company which constitutes willful misconduct or dereliction of duty, or breach of Section 6, or (iv) Employee's other material breach of this

Agreement which breach shall have continued unremedied for twenty (20) days after written notice by the Company to Employee specifying such failure;

(d) upon discharge of Employee by the Company without cause; or

(e) upon Employee's election to terminate his employment.

5.2 Upon such termination, and subject only to Section 5.3 below, the Company shall be obligated to make only the following payments to Employee:

(a) With respect to termination pursuant to subsections (a), (b), (c) and (e) above, the Company shall be under no obligation other than to provide Employee his base salary and benefits under Section 4.5 above accrued through the date of such termination; provided, however, that with respect to a termination pursuant to subsection (c), the Company may withhold any compensation due to Employee as a partial offset against any damages suffered by the Company as a result of Employee's actions.

(b) With respect to termination pursuant to subsection (d) above, the Company shall be under no other obligation than to continue Employee's base salary and benefits under Section 4.5 above for a period of one (1) year following such termination.

(c) The benefits to be continued shall be limited to medical and insurance benefits. All other benefits and perquisites shall cease upon termination.

(d) The Company will make withholdings from said termination payments in accordance with the Company's generally applicable policies regarding employee contributions for any insurance coverages.

5.3 Change In Control. If a Change in Control (as hereinafter defined) occurs, Employee shall have the option of resigning from the Company. Employee must give written notice to the Chief Executive Officer of the Company within thirty (30) days of the occurrence of a Change in Control, specifying that such resignation is the result of a Change in Control, and such resignation shall be effective upon the Chief Executive Officer's receipt. Upon such receipt, the Company shall continue Employee's base salary and benefits under Section 4.5 above for a period of one year from the effective date of the resignation, and all unvested options granted pursuant to Section 4.3 shall automatically vest.

"Change in Control" means the happening of any of the following:

(i) any "person", including a "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Act"), but excluding the Company, any of its Affiliates, or any employee benefit plan of the Company or any of its Affiliates) is or becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the Act), directly or indirectly, of securities of the Company representing the greater of 30% or more of the combined voting power of the Company's then outstanding securities. "Affiliate" means any corporation which is a subsidiary of the Company within the definition of "subsidiary corporation" under Section 424(f) of the Internal Revenue Code of 1986, as amended;

(ii) the stockholders of the Company shall approve a definitive agreement (1) for the merger or other business combination of the Company with or into another corporation if (A) a majority of the directors of the surviving corporation were not directors of the Company immediately prior to the effective date of such merger or (B) the stockholders of the Company immediately prior to the effective date of such merger own less than 50% of the combined voting power in the then outstanding securities in such surviving corporation or (2) for the sale or other disposition of all or substantially all of the assets of the Company; or

(iii) the purchase of 50% or more of the Stock pursuant to any tender or exchange offer made by any "person", including a "group" (as such terms are used in Sections 13(d) and 14(d) of the Act), other than the Company, any of its Affiliates, or any employee benefit plan of the Company or any of its Affiliates.

6. Certain Obligations of Employee.

6.1 Employee represents and warrants that (a) there are no restrictions, agreements or understandings whatsoever to which Employee is a party which would prevent or make unlawful his execution of this Agreement or his employment hereunder, (b) his execution of this Agreement and his employment hereunder shall not constitute a breach of any law, rule or regulation, or of any contract, agreement or understanding, oral or written, to which he is a party or by which he is bound and (c) he is free and able to execute this Agreement and to enter into employment by the Company.

6.2 Employee further covenants with the Company as follows (as used in this
Section 6, "Company" shall include the Company and its subsidiaries and affiliates):

(a) Employee shall, upon reasonable notice, furnish such information and proper assistance to the Company as may reasonably be required by the Company in connection with any litigation in which it is, or may become, a party. The Company shall, upon reasonable notice, furnish such information and proper assistance to Employee as may reasonably be required by Employee in connection with any litigation in which he is, or may become, a party as a result of his status as an employee of the Company.

(b) Employee shall not knowingly use for his own benefit or disclose or reveal to any unauthorized person, any trade secret or other confidential information relating to the Company, or to any of the businesses operated by it, including, without limitation, any customer lists, customer needs, price and performance information, processes, specifications, hardware, software, devices, supply sources and characteristics, business opportunities, potential business interests, marketing, promotional pricing and financing techniques, or other information relating to the business of the Company, and Employee confirms that such information constitutes the exclusive property of the Company. Such restriction on confidential information shall remain in effect until such time as the

confidential information is (i) generally available in the industry, (ii) disclosed in published literature or (iii) obtained by Employee during the term of his employment or after the expiration or earlier termination of this Agreement from a third party with the prior right to make such disclosure. Employee agrees that he will return to the Company any physical embodiment of such confidential information upon termination of employment.

(c) During the term of his employment, and for a period of one (1) year following termination of such employment for any reason or payment of any compensation in accordance with Section 5 herein, whichever occurs last, Employee shall not engage, directly or indirectly (which includes, without limitation, owning, managing, operating, controlling, being employed by, giving financial assistance to, participating in or being connected in any material way with any person or entity), anywhere in the United States or in Mexico or Canada (each a "territory") in the wholesale distribution of natural foods; provided, however, that: Employee's ownership as a passive investor of less than two percent (2%) of the issued and outstanding stock of a publicly held corporation so engaged, shall not by itself be deemed to constitute such competition. Further, during such one-year period Employee shall not act to induce any of the Company's vendors, customers or employees to take action which might be disadvantageous to the Company.

(d) Employee hereby acknowledges that he will treat as for the Company's sole benefit, and fully and promptly disclose and assign to the Company without additional compensation, all ideas, information, discoveries, inventions and improvements which are based upon or related to any confidential information protected under Section 6.2(b) herein, and which are made, conceived or reduced to practice by him during his employment by the Company and within one (1) year after termination thereof. The provisions of this subsection 6.2(d) shall apply whether such ideas, discoveries, inventions, improvements or knowledge are conceived, made or gained by him alone or with others, whether during or after usual working hours, either on or off the job, to matters directly or indirectly related to the Company's business interests (including potential business interests), and whether or not within the realm of his duties.

(e) Employee shall, upon request of the Company, but at no expense to Employee, at any time during or after employment by the Company, sign all instruments and documents and cooperate in such other acts reasonably required of him to protect rights to the ideas, discoveries, inventions, improvements and knowledge referred to above, including applying for, obtaining and enforcing patents and copyrights thereon in any and all countries.

(f) Employee agrees that he will not disclose to the Company, or use during the term of his employment, any proprietary or confidential information belonging to any third party which Employee may have acquired because of an employment, consulting or other relationship with such third party, whether such information is in Employee's memory or embodied in a writing or other physical form.

(g) Employee recognizes that the possible restrictions on his activities which may occur as a result of his performance of his obligations under this Section 6 are required for the reasonable protection of the Company and its investments, and Employee expressly acknowledges that such restrictions are fair and reasonable for that purpose. Employee further expressly acknowledges that damages alone will be an inadequate remedy for any breach or violation of any of the provisions of this Section 6, and that the Company, in addition to all other remedies hereunder, shall be entitled, as a matter of right, to injunctive relief, including specific performance, with respect to any such breach or violation, in any court of competent jurisdiction. If any of the provisions of this Section 8 are held to be in any respect an unreasonable restriction upon Employee then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they may be enforceable.

6.3 Employee expressly agrees that all payments and benefits due Employee under this Agreement shall be subject to Employee's compliance with the provisions set forth in this Section 6.

6.4 This Section 6 shall survive the expiration or earlier termination of this Agreement without time limitation.

7. General Provisions.

7.1 Neither Employee nor his beneficiaries or legal representatives may assign this Agreement, or any rights or obligations hereunder, without the Company's prior written consent.

7.2 This Agreement shall be binding upon, and inure to the benefit of, Employee and the Company and their respective heirs, executors, administrators, successors and permitted assigns.

7.3 This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

7.4 No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege nor shall any other waiver of right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.

7.5 If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in force and effect.

7.6 The sections headings are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

7.7 This Agreement has been executed and delivered in the State of Connecticut, and its validity, interpretation, performance, and enforcement shall be governed by the laws of said State.

7.8 This Agreement contains the entire understanding between the parties hereto and supersedes any and all prior agreements, oral or written, on the subject matter hereof between the Company and Employee.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, intending the Agreement to become binding and effective as of the date and year first written above.

By ________________________           ________________________
Michael S. Funk                          Steven H. Townsend
Vice Chairman and
Chief Executive Officer

EXHIBIT 10.30

NET LEASE AGREEMENT

Auburn, California
Basic Lease Information
Defined Terms:                        Information:
Lease Date:                           December 31, 1996
Landlord:                             Dove Investments, Inc.,
                                      a California corporation
                                      3620 Fair Oaks Boulevard, Suite 150
                                      Sacramento, California 95864
Tenant:                               Mountain People's Warehouse, Inc.
                                      12745 Earhart Avenue
                                      Auburn, California 95602
Premises:                             The Premises referred to in this Lease are
                                      located at ________________, Auburn,
                                      California ("Building"), and consists of
                                      approximately seventy-five thousand
                                      (75,000) rentable square feet (75,000
                                      usable square feet) as shown in Exhibit A,
                                      which is seventy-five percent (75.00%)
                                      ("Tenant's Proportionate Share") of the
                                      rentable square feet of the Building. The
                                      Building referred to in this Lease
                                      consists of approximately one hundred
                                      thousand (100,000) rentable square feet
                                      and one hundred thousand (100,000) usable
                                      square feet. The rentable and usable
                                      square footage set forth herein is subject
                                      to adjustment pursuant to Section 2(g).
Term:                                 The term shall begin on the Commencement
                                      Date (hereinafter defined) and shall
                                      terminate on June 30, 2008.
Base Rent:                            Twenty-Eight Thousand One Hundred
                                      Twenty-Five and No/100ths Dollars
                                      ($28,125.00) per month based on
                                      seventy-five thousand (75,000) rentable
                                      square feet at Thirty-Seven and One-Half
                                      Cents ($.375) per square foot per month
                                      payable in advance on the first day of
                                      each month, subject to adjustment
                                      pursuant to Section 7 and until increased
                                      as provided in Section 7 hereof.
Use:                                  Warehouse facility and related operations
Security Deposit:                     Not Applicable
Broker for Tenant:                    Not Applicable
Broker for Landlord:                  Not Applicable

LIST OF EXHIBITS
A. Description of Premises
B. Rules and Regulations
C. Agreement of Purchase and Sale

NET LEASE AGREEMENT

This Lease is made and entered into by the Landlord and Tenant referred to in the Basic Lease Information. The Basic Lease Information attached to this Lease as page 1 is hereby incorporated into this Lease by this reference.

GENERAL PROVISIONS:

Purchase Transaction. Landlord and Tenant acknowledge and agree that Landlord's obligations under this Lease are expressly contingent upon Landlord acquiring fee title in the Real Property ("Real Property") on which the Building is to be constructed in accordance with the terms and conditions of certain purchase and sale documentation entered into by Landlord and the current owner of the Real Property, which transaction is scheduled to close on or about February 28, 1997. In the event that Landlord does not acquire fee title to the Real Property, for any reason, notwithstanding any other provision of this Lease to the contrary, this Lease shall become null and void and of no further force or effect and Landlord shall immediately return any prepaid Base Rent to Tenant.

1992 Lease. A related affiliate to Landlord and Tenant have previously entered into an Industrial Real Estate Lease which was amended by that certain (i) First Addendum dated January 21, 1992, (ii) Second Addendum dated October 31, 1992,
(iii) Third Addendum dated January 5, 1993, (iv) Fourth Addendum dated February 12, 1993, (v) Fifth Addendum dated May 17, 1993, (vi) Sixth Addendum dated May 28, 1993, and (vii) Seventh Addendum dated June 22, 1995, which document, as amended, is hereinafter referred to as the "1992 Lease." The 1992 Lease concerns the lease of certain improved property in the immediate vicinity of the Premises. Landlord and Tenant acknowledge and agree that the provision of this Lease and the 1992 Lease are separate and distinct obligations of each party thereto and that there are no dependent obligations existing between such documents. Specifically, Tenant acknowledges and agrees that, in the event Tenant exercises its purchase rights in accordance with the 1992 Lease, such exercise shall not, in any manner, affect Tenant's obligations under this Lease.

BUILDING IMPROVEMENTS:

Preliminary Plans: Following the Lease Date, Landlord shall prepare and deliver to Tenant draft preliminary plans and specifications ("Preliminary Plans") setting forth the description of (i) the shell of the Building, (ii) the materials to be used in the construction of the

Building, (iii) the electrical, mechanical and HVAC systems to be used within the Building, and (iv) the space plan of the Premises and the improvements to be constructed therein. Tenant shall approve or disapprove of the Preliminary Plans within ten (10) days following Tenant's receipt of such documents by providing Landlord with written notice ("Objection Notice") of such determination within such time period. The failure of Tenant to provide such notice within five (5) days following Tenant's receipt of a second written request from Landlord indicating that Tenant's ten (10) day review period has expired shall be deemed Tenant's approval of the Preliminary Plans. In the event that Tenant disapproves of the Preliminary Plans as provided herein, Landlord and Tenant shall use their good faith efforts and due diligence to resolve the matters set forth in the Objection Notice to the reasonable satisfaction of Landlord and Tenant; provided, however, if Landlord and Tenant have not resolved such matters within twenty (20) days following Landlord's receipt of the Objection Notice, such disputed matter shall be submitted to an engineer or architect, reasonably acceptable to Landlord and Tenant, who shall render a determination of such matter within five (5) days following such appointment, which determination shall be binding upon Landlord and Tenant. Upon Landlord and Tenant reaching agreement upon the Preliminary Plans, such document shall be referred to as the "Approved Preliminary Plans."

Landlord and Tenant acknowledge that, prior to the Lease Date, the parties have had discussions and negotiations regarding the Preliminary Plans, which discussions included the anticipated size of a proposed mezzanine and office area. In this regard, Tenant is considering whether such improvements should be downsized from the levels currently contemplated. The parties further acknowledge that the originally contemplated level of such improvements was a factor in Landlord's determination of Base Rent. As a result of the foregoing, for a period of ten (10) days following Landlord and Tenant agreeing upon the Approved Preliminary Plan, the parties shall discuss and agree upon whether, as a result of Tenant's election to decrease the size of the proposed mezzanine and office area within the Premises from that conceptually discussed upon prior to the Lease Date, an appropriate decrease in Base Rent is warranted, which determination the parties shall negotiate in good faith. If the parties cannot agree on whether a decrease in Base Rent is warranted pursuant to the preceding sentence, such matter shall be determined by an engineer, mutually acceptable to Landlord and Tenant, who shall render such decision within five (5) days following his receipt of the appropriate materials from the parties, which decision shall be binding upon Landlord and Tenant.

Final Plans: Within sixty (60) days following reaching agreement upon the Approved Preliminary Plans, Landlord shall prepare and deliver to Tenant final plans and specifications ("Final Plans") substantially in conformity with the Approved Preliminary Plans. Within ten (10) days after delivery of the Final Plans, Tenant shall give written notice of any changes necessary to bring the Final Plans into substantial conformity with the Approved Preliminary Plans; Tenant shall not object to any logical refinement of the Approved Preliminary Plans or any change necessitated by applicable governmental laws or regulations. Failure of Tenant to deliver to Landlord written notice of such changes within five (5) days following Tenant's receipt of written notice from Landlord indicating that Tenant's ten (10) day review period has expired shall be deemed approval of the Final Plans. Upon approval of the Final Plans, both parties shall endorse their approval on the Final Plans as may be necessary for filing such documents with the appropriate governmental entity for approval, which shall be the responsibility of Landlord. Upon obtaining the appropriate approvals of the Final Plan from the applicable governmental entity, such document shall be referred to as the "Approved Final Plans."

Construction: Promptly upon obtaining the Approved Final Plans (which shall comply with all applicable laws), Landlord shall commence construction of the building shell and improvements described therein, which are collectively referred to as the "Building Improvements," and diligently prosecute such construction to completion. Landlord shall use its good faith efforts and due diligence to cause such improvements to be Ready for Occupancy (hereinafter defined) on or before July 1, 1997 ("Anticipated Occupancy Date").

Completion and Delivery: The Premises shall be ready for occupancy ("Ready for Occupancy") when (i) construction of the Building Improvements is substantially completed in accordance with the Approved Final Plans,(ii) Landlord has obtained for the Premises any permits (temporary or final) that are legally required for Tenant's occupancy, but not the operation of Tenant's business, and (iii) any all utility hook-ups necessary for the use of the Building are in place and are fully operational. Landlord shall use its good faith efforts to give Tenant thirty (30) days prior written notice ("Pre-Occupancy Notice") of the date when the Premises will be Ready for Occupancy.

Early Entry: Tenant may, following its receipt of the Pre-Occupancy Notice or upon written notice to Landlord prior to Tenant's receipt of the Pre-Occupancy Notice, at Tenant's sole risk, enter the Premises and install trade fixtures, equipment and other tenant improvements in the Premises; provided, however, that
(i) Tenant's early entry shall not unreasonably interfere with construction of the Building Improvements; and (ii) all provisions of this Lease, excepting Sections 7, 9, 10 and 11, shall apply during such entrance.

Measurement of Premises and Building: Within fifteen (15) days following the Premises becoming Ready for Occupancy, Landlord shall cause the Premises and the Building to be measured by Landlord's engineer, or a third party engineer reasonably acceptable to Landlord and Tenant, to determine the Usable Area (as hereinafter defined) thereof, which determination shall be binding upon Landlord and Tenant. In the event that the Usable Area of the Premises and/or Building is different than that set forth in the Basic Lease Information, Landlord and Tenant shall execute a written amendment to modify the Usable Area and Rentable Area of the Premises and/or the Building, as applicable, and Tenant's Proportionate Share. Landlord anticipates, but is not certain, that there will not be Building Common Areas (as hereinafter defined) within the Building, resulting in no difference between the Rentable Area and Usable Area (as such terms are hereinafter defined) for the Premises.

Condition of Premises: Landlord represents and warrants that the Premises, to the extent constructed by Landlord, its agents, employees, contractors and subcontractors, complies with all applicable laws, statutes and ordinances in effect as of the Commencement Date.

PREMISES: This Lease shall be effective as of the date of execution hereof by Landlord and Tenant. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord upon the terms and conditions contained herein the Premises.

ACCEPTANCE OF PREMISES: Excepting Punch List Items (as hereinafter defined), if any, Tenant's taking possession of the Premises shall constitute Tenant's acknowledgment that the Premises are in good condition and that the Building Improvements are

constructed in accordance with the provisions of this Lease and that Tenant agrees to accept the same in its condition existing as of the date of such entry and subject to all applicable municipal, county, state and federal statutes, laws, ordinances, including zoning ordinances, and regulations governing and relating to the use, occupancy or possession of the Premises, excepting latent defects. Within thirty (30) days after the Tenant takes possession of the Premises, Tenant shall deliver to Landlord a list of items ("Punch List Items") that Tenant reasonably deems that Landlord complete or correct in order for the Premises to be reasonably acceptable. Following Landlord's receipt of the Punch List Items, Landlord shall complete and/or correct such items set forth on the Punch List Items using its good faith efforts and due diligence within thirty
(30) days following Landlord's receipt of such document. If Tenant does not deliver the Punch List Items to Landlord within five (5) days following Tenant's receipt of written notice from Landlord indicating that Tenant's thirty (30) day review period has expired, Tenant shall be deemed to have accepted the condition of the Premises. Landlord shall use its reasonable efforts to not unreasonably interfere with Tenant's use of the Premises as a result of such repair work.

DEFINITIONS:

"Building" shall refer to the entire structure in which the Premises are located, the term "Lot" shall refer to the Assessor's tax parcel on which the Building is situated, and the term "Project" shall refer to the project as shown on Exhibit A. This Lease confers no rights either with regard to the subsurface of the land below the ground level of the Building or with regard to airspace fifty (50) feet above the roof of the Building.

"Building Common Areas" shall mean the areas on individual floors devoted to corridors, fire vestibules, lobbies, electric and telephone closets, rest rooms, mechanical rooms, janitor closets and other similar facilities for the benefit of all lessees public lobbies, loading docks, and other similar facilities for the benefit of all lessees, but excluding public stairs, pipe shafts, and the enclosing walls thereof.

"Project Common Areas" shall refer to all areas and facilities outside the Premises and within the Project that are provided and designated by Landlord from time to time for the general nonexclusive use of Landlord, Tenant, and of other lessees in the Project and their respective employees, suppliers, shippers, customers, and invitees. Landlord hereby grants to Tenant, during the term of this Lease, the nonexclusive right to use, in common with others entitled to such use, the Project Common Areas as they exist from time to time, subject to any rules, regulations, and restrictions governing the use of the Project as from time to time made or amended by Landlord. Provided that (i) Landlord, using its reasonable efforts, does not unreasonably interfere with Tenant's use of the Premises, and (ii) obtains Tenant's prior written approval, which shall not be unreasonably withheld, conditioned or delayed (the failure of Tenant to respond to any requested modification to the Project Common Areas with in five (5) days of Tenant's receipt of such request shall be deemed Tenant's approval thereof), Landlord reserves the right at any time and from time to time, to: (i) make alterations in or additions to the Project and to the Project Common Areas; and (ii) temporarily close any of the Project Common Areas for maintenance purposes.

"Rentable Area" shall mean:

as to a floor leased entirely by Tenant, all areas within outside permanent Building walls, measured to the inside surface of the dominant portion of the permanent outer Building walls, including restroom, janitorial, telephone and electrical closets, mechanical areas, excluding any major vertical penetrations of the floor, balconies, arcades and covered entrances, plus Tenant's pro rata share of Building Common Areas.

as to a floor only a portion of which is leased by Tenant, the aggregate of the Usable Area of the portion of that floor occupied by Tenant, plus Tenant's pro rata share of Building Common Areas on the floor leased in part by Tenant and Tenant's pro rata share of Building Common Areas.

"Usable Area" shall mean all floor area in the Tenant's space, measured from the inside surface of the interior walls of the Premises, but excluding any balconies, arcades and covered entrances.

POSSESSION:

Subject to and upon the terms and conditions set forth herein, the Term shall be for the period specified in the Base Lease Information, commencing upon the date on which the Premises is Ready for Occupancy ("Commencement Date"). Landlord shall cause the Premises to be Ready for Occupancy by the Anticipated Occupancy Date, plus extensions thereto equal to the durations of (i) any delays beyond the reasonable control of Landlord, such as acts of God, fire, earthquake, acts of public enemy, riot, insurrection, unavailability of materials, governmental restrictions on the sale of materials or supplies or the transportation of such materials or supplies, strike directly affecting construction or transportation of materials or supplies, shortages of materials or labor resulting from governmental controls, weather conditions, or any other cause or events beyond the reasonable control of Landlord (collectively, "Force Majeure Event"), or
(ii) delays caused or attributable to Tenant. The parties agree that if Landlord is unable to cause the Premises to be Ready for Occupancy by the Anticipated Occupancy Date, plus any extensions thereto pursuant to this Section, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damages resulting therefrom, but in such event, Tenant shall not be liable for any Rent until the Commencement Date; provided, however, if such delays are caused or attributable to Tenant, Rent shall commence as of the Anticipated Occupancy Date. Within thirty (30) days after the Commencement Date, Landlord and Tenant shall execute an amendment to this Lease, setting forth the Commencement Date and the expiration date of the Term.

Notwithstanding the foregoing, in the event that the Commencement Date is delayed for in excess of ninety (90) days beyond the Anticipated Occupancy Date, as may be extended herein, for each day of delay beyond such ninety (90)-day period until the actual Commencement Date occurs, Landlord shall pay Tenant (as a credit against Base Rent) the amount of Five Hundred and No/100ths Dollars ($500.00), which amount the parties agree is a reasonable estimate of damages as a result of such delay.

Notwithstanding the foregoing, in the event that the Commencement Date is delayed in excess of one hundred eighty (180) days beyond the Anticipated Occupancy Date, as may be extended herein, for a period of fifteen (15) days thereafter, Tenant shall have the right to terminate this Lease by providing Landlord with written notice thereof within such time period. The failure of Tenant to

provide such notice shall be deemed Tenant's waiver of its right to terminate the Lease. If Tenant elects to terminate the Lease, such termination shall be effective upon Landlord's receipt of such notice, and the parties shall have no further obligations hereunder.

RENT:

Tenant agrees to pay Landlord, without prior notice, demand, deduction or offset, a Base Rent in the amount set forth in the Basic Lease Information as adjusted from time to time in the manner set forth in this Section. In addition to the Base Rent, for the purpose of this Lease, "Rent" also includes Tenant's Proportionate Share of Taxes, Insurance and any other amounts owing from Tenant to Landlord pursuant to the terms of this Lease. The Rent shall be payable in advance on or before the first day of each month throughout the term of the Lease. Base Rent for the first month of the term shall be paid upon execution of this Lease. Base Rent for any period during the term hereof which is for less than one month shall be a prorated portion of the monthly installment based upon a thirty (30)-day month.

The Base Rent as shall be increased for each year of the term of this Lease following the first year ("Subsequent Year") if the Consumer Price Index for All Urban Consumers, All Items (San Francisco-Oakland-San Jose Metropolitan Area, 1982-84=100) ("Index"), as published by the United States Department of Labor, Bureau of Labor Statistics, for the "Comparison Month" (described below) increases over the Index for the calendar month ("Base Month") which is four (4) months prior to the month in which the term of this Lease commences. The Base Month Index shall be compared with the Index for the same calendar month for each Subsequent Year ("Comparison Month"). If the Index for any Comparison Month is higher than the Base Month Index, then the total Base Rent for the Subsequent Year following the Comparison Month shall be increased with the first month of such Subsequent Year by a percentage which shall be calculated by dividing the Base Month Index into that number which represents the difference, if any, when subtracting the Base Month Index from the Index for any Comparison Month. In no event shall the Base Rent after a Comparison Month be less than that in effect for the immediately preceding year. Should said bureau discontinue the publication of the above Index, or publish the same less frequently, or alter the same in some other manner, then Landlord shall adopt a substitute index or substitute procedure which reasonably reflects and monitors consumer prices.

As soon as an adjustment to the Base Rent has been computed as provided herein, Landlord shall give Tenant notice of the amount thereof. Tenant shall continue to pay Base Rent at the previously established amount until it has been given such notice, at which time the accrued increase shall be due and payable in full. Tenant shall pay Rent to Landlord at the address shown in the Basic Lease Information, or to such other person or at such other place as Landlord may from time to time designate in writing. The Rent has been established in contemplation that Tenant will occupy the Premises for the entire Term. In the event of an assignment of the Lease in whole or in part, or a sublease of all or any part of the Premises, Landlord and Tenant have agreed that Landlord shall have the rights provided in Section 15 of this Lease.

SECURITY DEPOSIT: (Intentionally Deleted)

OPERATING EXPENSES: (Intentionally Deleted)

TAXES AND INSURANCE:

Tenant shall pay as additional Rent, Tenant's Proportionate Share of all Taxes. The term "Taxes" shall include all real property taxes, bonds and assessments levied against the Project and the various estates therein and the underlying land, all taxes, assessments and reassessments of every kind and nature whatsoever levied or assessed in lieu of or in substitution of any existing or additional real or personal property taxes and assessments on the Project, any increase in taxes or assessments resulting from a re-evaluation of the Project resulting from the sale, conveyance, assignment, ground lease or other transfer thereof, service payments in lieu of such taxes, excises, transit charges and fees, housing, park and child care assessments, development and other assessments, reassessments, levies, fees or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind which are assessed, levied, charged, confirmed, or imposed by any public authority upon the Project, its operations or the Rent provided for in this Lease, or amounts necessary to be expended because of governmental orders, whether general or special, ordinary or extraordinary, unforeseen as well as foreseen, of any kind and nature for public improvements, services, benefits, or any other purposes which are assessed, levied, confirmed, imposed or become a lien upon the Premises, Building or Project or become payable during the Term. In no event shall Taxes include any income tax payable by Landlord.

As soon as reasonably possible after Landlord has received the tax bill for the year, Landlord shall furnish Tenant with a true and correct tax statement, and within thirty (30) days prior to the delinquency of each required payment, Tenant shall pay to Landlord the Tenant's Proportionate Share of Taxes. Notwithstanding the failure of Landlord to timely provide such statement by such date, such failure shall not constitute a waiver of Landlord of its right to collect Tenant's share of any Taxes.

Tenant shall pay before delinquent all taxes assessed against and upon equipment, furniture, fixtures, and other personal property of Tenant. If any taxes on Tenant's personal property are levied against Landlord or Landlord's property, or if the assessed value of the Building and other improvements is increased by the inclusion of a value placed on Tenant's personal property, and if Landlord pays the taxes on any of these items, Tenant, on demand, shall immediately reimburse Landlord for the sum of the taxes levied against Landlord, or the proportion of the taxes resulting from the increase in Landlord's assessment. Landlord shall have the right to pay these taxes regardless of the validity of the levy.

Tenant shall pay as additional Rent, Tenant's Proportionate Share of all Insurance. Landlord shall maintain on the Building hazardous insurance providing for coverage against all perils customarily referred to as "all risks" coverage on a full replacement cost basis, with vandalism and malicious mischief endorsements, to the extent of full replacement value, with a replacement cost endorsement in any form of insurance deemed prudent by Landlord ("Insurance"). Such insurance policy shall be issued in the name of Landlord and continue to provide that any proceeds shall made payable to Landlord.

As soon as reasonably possible after Landlord has received an invoice for the Insurance for the year, Landlord shall furnish Tenant with a copy thereof, and within thirty (30) days prior to the delinquency date of such required payment, Tenant shall pay to Landlord Tenant's Proportionate Share of the cost of the insurance. Notwithstanding the failure of Landlord to timely provide such statement

by such due date, such failure shall not constitute a waiver of Landlord of its right to collect Tenant's Proportionate Share of such costs.

UTILITIES:

Tenant shall be solely responsible for obtaining service and thereafter paying the cost of all utilities, including, but not limited to, sewer use and connection fees, water, gas, electricity, telephone, and other utilities (the "Utilities") provided to the Premises and billed and metered separately to Tenant. Landlord shall be responsible for the initial connection fees for the Utilities.

Failure of any Utilities to be provided to the Premises, or any cessation thereof, shall not render Landlord liable in any respect for damages to either person or property, nor be construed as an eviction of Tenant, nor cause an abatement of rent, or relieve Tenant from fulfillment of any covenant or agreement hereof. Tenant shall have no right to terminate this Lease, and shall have no claim for rebate of rent or damages on account of any interruptions in service or in Utilities occasioned thereby or resulting therefrom.

USE: Tenant shall use the Premises for the uses set forth in the Basic Lease Information and shall not use the Premises for any other purposes. Tenant warrants that it shall not make any use of the Premises which may cause contamination of the soil, the subsoil or groundwater. Tenant shall not do, bring, or keep anything in or about the Premises that will cause a cancellation of any insurance covering the Premises. If the rate of any insurance carried by Landlord is increased as a result of Tenant's use, Tenant shall pay to Landlord within thirty (30) days before the date Landlord is obligated to pay a premium on the insurance, or within thirty (30) days after Landlord delivers to Tenant a certified statement from Landlord's insurance carrier stating that the rate increase was caused solely by an activity of Tenant on the Premises as permitted in this Lease, whichever date is later, a sum equal to the difference between the original premium and the increased premium. Landlord reserves the right to prescribe the weight and position of all safes, fixtures and heavy installations that Tenant desires to place in the Premises so as to distribute properly the weight, or to require plans prepared by a qualified structural engineer for such heavy objects, which shall be prepared at Tenant's sole cost and expense.

COMPLIANCE WITH THE LAW: Neither, Tenant nor its agents, employees or contractors shall not use the Premises in any manner which will in any way conflict with any law, statute, zoning restriction, ordinance or governmental law or rule, regulation, or requirement of any duly constituted public authorities now in force or which may hereafter be enacted or promulgated including, but not limited to, any and all federal, state and local laws, ordinances, regulations, orders and directives pertaining to any substance defined as "hazardous wastes", "hazardous substances", "hazardous materials", "toxic substances" or words to that affect, including but not limited to petroleum based products, under any applicable current or future federal or state laws or regulations (collectively, "Hazardous Materials"), or subject Landlord to any liability for injury to any person or property by reason of any business operation being conducted in or about the Premises. Following the Commencement Date, to the extent required by Tenant's specific use of the Premises or required due to Alterations (as hereinafter defined) constructed by Tenant, Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances, and governmental rules, regulations, which includes, but is not limited to, the Americans with Disability Act ("ADA") of 1990 (42 U.S.C. ss. 12101 et seq.), and any amendment thereto or regulations promulgated thereunder, or requirements of any board or fire insurance underwriters or other similar bodies, now or hereafter constituted. Subject to the foregoing, the final judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statute, ordinance, or governmental rule, regulation, or requirement, shall be conclusive of that fact as between Landlord and Tenant. Subject to the foregoing, to the extent that such compliance is imposed upon all landlord's owning properties within the State of California similar to the Premises, and provided such compliance is not triggered as a result of any action taken by Tenant, Landlord shall, at its cost, comply with laws, statutes and ordinances.

Neither Tenant, nor any assignee, sublessee or occupier of any portion of the Premises, shall permit the introduction, placement, use, generation, manufacture, storage, disposal or transportation in or around the Premises of any hazardous, poisonous or toxic substance, material or waste of any kind that may be hazardous to health and/or the environment, including, without limitation, substances from time to time identified as such by federal and/or state laws and regulations, without the prior written consent of Landlord; provided, however, Tenant shall be entitled to possess and maintain, in compliance with all applicable laws, statutes and ordinances, within the Premises reasonable amounts of such Hazardous Materials which are customarily used in connection with Tenant's permissible use of the Premises as set forth in this Lease, and Tenant agrees to indemnify, defend and hold Landlord harmless from any and all costs incurred (whether by Landlord or otherwise) in cleaning, decontaminating or otherwise correcting the effects of any such introduction, placement, use, storage or disposal in or about the Premises, as well as all costs of complying with all applicable laws, rules, regulations or requirements applicable thereto, including payment of any fines or penalties levied on account thereof or arising therefrom, and the cost of discharging any lien on the Premises securing such cost of correction. The provisions of this Section 12 shall survive the expiration of this Lease.

ALTERATIONS AND ADDITIONS: Tenant shall not make or suffer to be made any alterations, additions, or improvements (collectively, "Alterations") to or of the Premises, or any part thereof, without first obtaining the written consent of Landlord, which shall not be unreasonably withheld. Any Alterations to the Premises, including, but not limited to, wall covering, paneling, and built-in cabinet work, but excepting movable furniture and trade fixtures, shall on the expiration of the Term become a part of the realty and belong to Landlord, and shall be surrendered with the Premises. However, Landlord can, at the time consent is requested by Tenant, require Tenant remove such Alterations that Tenant intends to make to the Premises. If Landlord so elects, Tenant, at its own cost, shall repair any damage caused by the removal of the Alterations. Before Landlord's consent to such Alterations will be given, Tenant shall submit detailed specifications, floor plans and necessary permits (if applicable) to Landlord for review. In no event shall any Alterations affect the structure of the Building or its facade. As a condition to its consent, Landlord may request adequate assurance that all contractors who will perform such work have in force workman's compensation and such other employee and public liability insurance as Landlord deems necessary. In the event Landlord consents to the making of any Alterations to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense, comply with all applicable laws, statutes and ordinances, be completed to the satisfaction of Landlord, and any architect, contractor or person selected by Tenant to make the same must first be approved in writing by Landlord. If Tenant makes any Alterations to the Premises, the Alterations shall not be commenced until five (5) business days after Landlord has received notice from Tenant stating the date the installation of the alterations is to commence so that Landlord can post and record an appropriate notice of

nonresponsibility. Notwithstanding the foregoing, without the prior consent of Landlord, but with the prior notice to Landlord, Tenant shall be entitled to make Alterations within the Premises, provided that (i) the cost of the constructing such Alterations does not exceed Five Thousand and No/100ths Dollars ($5,000.00) per project in the aggregate, (ii) does not affect the structure or mechanical systems of the Building, and (iii) Tenant otherwise complies with the provisions of this Section. Tenant shall indemnify, defend and hold the Landlord, the Building and the Premises free and harmless from any liability, loss, damage, cost, reasonable attorneys' fees and other expenses incurred on account of such construction, or claims by any person performing work or furnishing materials or supplies for Tenant or any persons claiming under Tenant.

REPAIRS AND MAINTENANCE:

Tenant acknowledges that the Building is intended to be leased to multiple tenants therein ("Other Tenants") who shall be entitled to nonexclusive use of the Building Common Area and Project Common Area. In this regard, as set forth in this Section, Tenant shall have the exclusive obligation to maintain and repair the Building Common Area and the Project Common Area, and both Landlord and the Other Tenants shall have no obligation to assist Tenant in the performance of such obligations by Tenant, provided, however, as set forth in this Section, Landlord shall reimburse Tenant for the Other Tenant's Proportional Share (as hereinafter defined) of such expenses on a monthly basis as provided herein.

Except as specified in the following paragraph, Tenant shall, at Tenant's sole cost and expense, subject to reimbursement from Landlord for the Other Tenants' Proportionate Share, maintain the Building, Building Common Area and the Project Common Area (which includes landscaping, driveways, parking lots, fences, and sidewalks) in first class condition, clean and safe condition and repair and shall make all replacements necessary to keep the Premises in such condition (collectively, "Operating Expenses"). Such obligation shall also apply to the Premises, however, such cost shall not be within the definition of Operating Expenses. Without limiting the generality of the foregoing, Tenant shall be solely responsible for maintaining, and repairing all fixtures, electrical lighting, ceilings and flooring coverings, windows, doors, plate glass, and interior walls within the Premises. Tenant shall have no obligation to maintain the premises of the Other Tenants. All repairs and replacements shall be a quality equal to or exceeding that of the original. In this regard, Tenant shall do all acts necessary to comply with Applicable Law. With respect to Utilities servicing the Premises, Tenant shall be responsible for the maintenance and repair of any such facilities. In addition, Tenant shall be responsible for all repairs made necessary by Tenant, its employees, agents, contractors or invitees. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises except as specifically set forth in this Lease. Tenant shall contract with a service company licensed and experienced in servicing heating, ventilating and air conditioning systems of the Premises. If Tenant fails to maintain the Building, Building Common Area, and/or Project Common Area in first class condition and repair, as required herein, Landlord may give Tenant thirty (30) days written notice to do such acts as are reasonably required to so maintain such areas. If Tenant fails to promptly commence such work within such time period and diligently prosecute it to completion, then Landlord shall have the right to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid by Tenant promptly after demand with interest at the "Reference Rate" (formerly, "Prime Rate") then being charged by the San Francisco main office of Bank of America NT & SA plus two percent (2.00%) per annum, from the date of such work, but not to exceed the maximum amount then allowed by law. Landlord shall have no liability to Tenant for any damage, inconvenience, or interference with the use of the Premises by Tenant as the result of performing any such work.

Notwithstanding Section 15(b), Landlord shall be responsible, at Landlord's sole cost and expense, for repairing the structure of the Building and any latent defects in the original construction of the Building. Landlord shall maintain the roof, structural walls and the foundations of the Building in good, clean and safe condition and repair. Except as otherwise provided in this Lease, Landlord shall have no liability to Tenant, nor shall Tenant's obligations under this Lease be reduced or abated in any manner whatsoever by reason of any inconvenience, annoyance, interruption or injury to business arising from Landlord making any repairs or changes which Landlord is required or permitted by this Lease or by any other tenants' lease or required by law to make in or to any portion of the Building or the Premises. Landlord shall use reasonable efforts to minimize any interference with Tenant's business at the Premises.

Prior to the Commencement Date, and not later than January 30 of each calendar year thereafter, Landlord and Tenant shall agree upon an annual budget ("Operating Expense Budget") for Operating Expenses for the then calendar year. Based upon such approved Operating Expense budget, Landlord shall either (a) pay to Tenant prior to the fifteen (15th) of each calendar month, or (b) authorized a credit against Base Rent, the amount of one-twelfth (1/12th) of the Other Tenants' Proportionate Share of the Operating Expense Budget. For the purpose of this Lease, the "Other Tenants' Proportionate Share" shall be twenty-five percent (25.00%) (the remaining square footage of the Building not leased by Tenant). Tenant may not exceed the Operating Expense Budget without the prior written consent of Landlord. If Landlord and Tenant do not agree upon revised Operating Expense Budget for a given year, the previously approved Operating Expense Budget shall remain in effect until such agreement is reached, at which time any deficiency or reimbursement between Landlord and Tenant shall be immediately paid in full. Notwithstanding the foregoing, if Tenant encounters an emergency situation at the Building requiring Tenant's action the cost of which is not provided for in the Operating Expense Budget, Tenant shall provide Landlord with a written notice, entitled "Emergency Notice," describing the situation and the anticipated cost associated therewith. If Landlord has not objected to such notice within forty-eight (48) hours following the receipt thereof, Tenant may incur such expense, which cost shall be deemed added to the Operating Expense Budget for such year.

WASTE: Tenant shall not use the Premises in any manner that will constitute waste, nuisance, or unreasonable annoyance to owners or occupants of adjacent properties or to other tenants of the Building.

LIENS: Tenant shall keep the Premises and the Project free from any liens arising out of any work performed, materials furnished, or obligations incurred by Tenant.

ASSIGNMENT AND SUBLETTING: Tenant shall not assign, transfer, mortgage, pledge, hypothecate, or encumber this Lease or any interest therein, nor sublet the Premises or any part thereof, or any right or privilege appurtenant thereto or permit the use or occupancy by any other party without the written consent of the Landlord first had and obtained, which consent shall not be unreasonably withheld. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without such consent shall be

void and shall constitute a breach of this Lease without the need for notice to Tenant. Tenant shall give Landlord written notice of Tenant's desire to assign or sublet all or some portion of the Premises and the date on which Tenant wishes to make such assignment or sublease, at least thirty (30) days prior to such date. Such written notice shall set forth the name of the proposed assignee or sublessee, the nature of the business to be carried on in the Premises, the space to be assigned or sublet, the material terms and provisions of the proposed sublease or assignment, and such financial information as Landlord may reasonably request. Landlord shall then have a period of thirty (30) days following receipt of such notice and accompanying information within which to notify Tenant of its decision with respect to the proposed sublease or assignment. The withholding of Landlord's consent to the assignment or subletting will be deemed to have been reasonable where based upon Landlord's good faith determination of: (i) the financial irresponsibility of assignee or sublessee; (ii) the lack of suitability of assignee's or sublessee's intended use of the Premises; or (iii) the intended unlawful use of the Premises by sublessee or assignee; provided, however, that the foregoing enumeration shall not be exclusive. Landlord shall, within such thirty (30)-day period, notify Tenant in writing that Landlord elects either (i) in the case of a proposed assignment only, to terminate this Lease as of the date so specified by Tenant, in which event Tenant will be relieved of all further obligations hereunder and the Security Deposit (subject to Section 8) and any other prepaid sums by Tenant shall be returned to Tenant pro rata, if applicable, pursuant to the provisions of this Lease, (ii) reasonably withhold its consent to such proposed assignment or sublease, or (iii) to permit Tenant to make such assignment or sublease subject to the following:

Any such assignment, sublease or the like must be pursuant to a written agreement in a form acceptable to Landlord in its reasonable discretion and must provide that such assignee, sublessee, or other transferee agrees not to violate the terms and conditions of this Lease. No sublease or assignment by Tenant shall relieve Tenant of any liability hereunder. Any sublease must provide that Tenant (Sublessor) has the right to reenter the Premises upon termination of such sublease. No sublessee or assignee shall further assign or sublet all or any part of the Premises.

One-half (1/2) of any sums or other economic consideration received by Tenant as a result of such subletting, which exceed in the aggregate the total sums which Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the Premises subject to such sublease), plus the cost of (i) reasonable broker's commissions paid by Tenant with regard to the transfer; and (ii) the cost of improvements approved by Landlord pursuant to Section 13 made to the subleased premises by Tenant at Tenant's expense for the purpose of subleasing, shall be payable to Landlord as additional Rent under this Lease without affecting or reducing any other obligation of Tenant hereunder.

Any sale or other transfer of the majority of the voting stock of Tenant if Tenant is a corporation, or a majority of the partnership interest in Tenant if Tenant is a partnership shall be an assignment for the purposes of this Section. The sale of Tenant's stock, which does not involve a shifting of the majority of the voting stock of Tenant, on a publicly traded exchange shall be inapplicable to the provisions of this Section 18.

Tenant may assign this Lease or sublet the Premises or any portion thereof, without Landlord's consent, to (i) any corporation which controls, is controlled by or is under common control with Tenant, (ii) any corporation resulting from the merger or consolidation of Tenant, provided that, to the extent that Mountain People's Warehouse no longer exists or its net worth is materially less than that as of the Lease Date (fifty percent (50.00%) or more decrease), the resulting entity must have a net worth equal to or greater than Tenant as of the Lease Date; or (iii) any person or entity acquires all of the assets of Tenant as an ongoing concern of the business being conducted at the Premises; provided that (a) the assignee or sublessee assumes, in full, the obligations of Tenant under this Lease, (b) except if Tenant no longer exists as provided in Subsection (ii), Tenant remains fully liable under this Lease, (c) the permissible use of the Premises under this Lease remains unchanged, and (iv) Landlord receives not less than thirty (30) days' prior written notice of such assignment or subletting.

If Tenant requests Landlord to consent to a proposed assignment or subletting, Tenant shall pay Landlord, whether or not consent is ultimately given, Landlord's reasonable costs, including attorneys' fees (which attorneys' fees shall not exceed Five Hundred and No/100ths Dollars ($500.00) for each proposed assignment or subletting) incurred in connection with evaluating such request and/or documenting such sublease or assignment.

INDEMNITY:

Tenant shall indemnify, defend, protect and hold Landlord, any partner, co-venturer, officer, director, employee, agent, or representative of Landlord (collectively, "Landlord Group") harmless against and from all claims, damages and liabilities, arising from Tenant's use of the Premises or the conduct of Tenant's business or from any activity, work, or other thing done, permitted or suffered by Tenant in or about the Building, and shall further indemnify and hold the Landlord Group harmless against and from any and all claims, damages and liabilities, directly arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any act or negligence of the Tenant or any officer, agent, employee, guest, or invitee of Tenant, and from all and against all costs, reasonable attorneys' fees, expenses, and liabilities incurred in or about any such claim or any action or proceeding brought thereon, and, in any case, action, or proceeding brought against Landlord by reason of any such claim. Notwithstanding anything to the contrary herein, nothing herein shall be deemed to require Tenant to indemnify, defend, protect and hold the Landlord Group harmless from any claims, damages or liabilities resulting from the gross negligence or willful misconduct of Landlord or any members of the Landlord Group. Tenant, as a material part of the consideration to Landlord under this Lease, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, except that Tenant shall not assume any risk for damage resulting from the gross negligence or wrongful act of Landlord or its authorized representatives.

Landlord shall not be liable for injury or damage which may be sustained by the person or property of Tenant, its employees, invitees or customers, or any other person in or about the Premises, caused by or resulting from fire, steam, electricity, gas, or from the breakage, leakage, obstruction or other defects from pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, whether such damage or injury results from conditions arising upon the Premises or upon other portions of the Building or from other sources, except to the extent such damage or injury results from the gross negligence or willful misconduct of Landlord, its contractors or the Landlord Group. Landlord shall not be liable for any damages arising from any act or omission from any other

tenant of the Building. Tenant agrees that in no case shall Landlord ever be responsible or liable on any theory for any injury to Tenant's business, loss of profit, loss of income or other consequential damages.

Landlord shall indemnify, defend, protect and hold Tenant, any partner, co-venturer, officer, director, employee, agent or representative of Tenant (collectively, "Tenant Group") harmless against and from all claims, damages and liabilities arising from Landlord's activities, work or other thing done, permitted or suffered by Landlord in or about the Building.

DAMAGE TO PREMISES OR BUILDING: All injury to the Premises or the Building caused by moving the property of Tenant or its employees, agents, guests or invitees into, in or out of the Building and all breakage done by Tenant or the agents, servants, employees, and visitors of Tenant shall be repaired as determined by the Landlord at the expense of the Tenant to the extent not covered and paid by insurance maintained by Landlord.

TENANT'S INSURANCE/WAIVER OF SUBROGATION:

All insurance required to be carried by Tenant and Landlord shall be issued by responsible insurance companies which are rated by Best Insurance Reports as A:VII or better and licensed or authorized to do business in the State of California. Each policy maintained by Tenant shall name Landlord, and at Landlord's request, any mortgagee of Landlord, as an additional insured, as their respective interests may appear. Each policy maintained by Tenant shall contain (i) a separation of insured's condition, (ii) a provision that such policy and the coverage evidenced thereby shall be primary and noncontributing with respect to any policies carried by Landlord and that any coverage carried by Landlord shall be excess insurance for Landlord's interest only (with respect to Tenant's policies only), and (iii) a waiver by the insurer of any right of subrogation against Landlord, its agents, employees and representatives, which arises or might arise by reason of any payment under such policy or by reason of any act or omission of Landlord, its agents, employees or representatives. A copy of each paid up policy (authenticated by the insurer) or certificate of the insurer evidencing the existence and amount of each insurance policy required hereunder shall be delivered to Landlord before the date Tenant is given possession of the Premises, and thereafter, within thirty (30) days after any demand by Landlord therefor. No such policy maintained by Tenant or Landlord shall be cancelable, materially changed or reduced in coverage except after thirty (30) days' written notice to the other party. Tenant shall furnish Landlord with renewals or "binders" of any such policy at least ten (10) days prior to the expiration thereof. Tenant shall have the right to provide such insurance coverage pursuant to blanket policies obtained by the Tenant, provided such blanket policies expressly afford coverage to the Premises, Landlord, Landlord's mortgagee and Tenant as required by this Lease.

Beginning on the date Tenant is given access to the Premises for any purpose and continuing until expiration of the Term of the Lease, Tenant shall procure, pay for and maintain in effect policies of property insurance covering (i) any alterations, additions or improvements as may be made by Tenant pursuant to the provisions of Section 12 hereof, and (ii) trade fixtures, merchandise and other personal property from time to time, in, on or about the Premises, in an amount not less than one hundred percent (100.00%) of their actual replacement cost from time to time, providing protection against all risks of physical loss or damage. The proceeds of such insurance shall be used for the repair or replacement of the property so insured. Upon termination of this Lease following a casualty as set forth herein, the proceeds under (i) shall be paid to Landlord, and the proceeds under (ii) above shall be paid to Tenant.

Beginning on the date Tenant is given access to the Premises for any purpose and continuing until expiration of the term of the Lease, Tenant shall procure, pay for and maintain in effect workers' compensation and employer's liability insurance and commercial general liability insurance which includes coverage for personal injury, contractual liability and Tenant's independent contractors. The commercial general liability should be procured and maintained with not less than One Million and No/100ths Dollars ($1,000,000.00) per occurrence combined single limit for bodily injury, personal injury or property damage liability. If such insurance covers more than one location, and general aggregate limit shall apply on a per location basis. Landlord shall also carry a policy of commercial general liability with not less than One Million and No/100ths Dollars ($1,000,000.00) per occurrence combined single limit for bodily injury, personal injury or property damage liability.

Tenant agrees to obtain certificates of insurance evidencing commercial general liability insurance, including completed operations, and workers' compensation insurance and employer's liability insurance from any contractors or subcontractors engaged in repairs or maintenance to the Premises during the term of the Lease. Such liability insurance must be for minimum limits of One Million and No/100ths Dollars ($1,000,000.00) per occurrence combined single limit for bodily injury including death and property damage liability.

Landlord and Tenant each hereby waive all rights of recovery against the other and against the officers, employees, agents and representatives of the other, on account of loss by or damage to the waiving party of its property or the property of others under its control, to the extent that such loss or damage is insured against and payment is made under any "all risk" insurance policy which either may have in force at the time of the loss or damage. Tenant shall, upon obtaining the policies of insurance required under this Lease, give notice to its insurance carrier or carriers that the foregoing mutual waiver of subrogation as contained in this Lease.

WAIVER: No delay or omission in the exercise of any right or remedy of Landlord or Tenant on any default by Tenant or Landlord shall impair such a right or remedy or be construed as a waiver. The subsequent acceptance of Rent by Landlord after breach by Tenant of any covenant or term of this Lease shall not be deemed a waiver of such breach, other than a waiver of timely payment for the particular Rent involved, and shall not prevent Landlord from maintaining an unlawful detainer or other action based on such breach. No act or conduct of Landlord, including without limitation the acceptance of the keys to the Premises, shall constitute an acceptance of the surrender of the Premises by Tenant before the expiration of the term. Prior to the scheduled expiration of the term of the Lease, only a notice from Landlord to Tenant shall constitute acceptance of the surrender of the Premises and accomplish an early termination of the Lease. Landlord's consent to or approval of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent to or approval of any subsequent act by Tenant. Any waiver by Landlord or Tenant of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of the Lease. The review, approval, or inspection by Landlord of any item to be reviewed, approved, or inspected by Landlord under the terms of this Lease shall not constitute the assumption of any responsibility by Landlord for the accuracy or sufficiency of any such item or the quality or suitability of such item for its intended use.

ENTRY BY LANDLORD: Landlord reserves, and shall at any and all reasonable times with reasonable written notice, at least twenty-four (24) hours in advance (except in the case of emergencies), have the right to enter the Premises to inspect the same, to supply any service to be provided by Landlord to Tenant hereunder, to show the Premises to prospective purchasers or tenants (during the last nine (9) months of the Term), to post notices of nonresponsibility, and to maintain and repair the Premises and any portion of the Building that Landlord may deem necessary or desirable, without abatement of Rent, and may for that purpose erect scaffolding and other necessary structures, where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be blocked thereby and further providing that the business of the Tenant shall not be interfered with unreasonably. With regard to any entrance into the Premises pursuant to this Section, Landlord agrees to use its good faith efforts to not unreasonably interfere with Tenant's business operations at the Premises. Tenant hereby waives any claims for damages or for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby, provided Landlord complies with the preceding sentence. For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults, safes and files, and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in the event of an emergency (as determined by Landlord or its employees or representatives acting in good faith), in order to obtain entry to the Premises without liability to Landlord. Any entry to the Premises obtained by Landlord by any of said means shall not under any circumstances be construed or be deemed to be a forcible or unlawful entry into, or a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof.

CASUALTY DAMAGE: During the term hereof, if the Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give prompt written notice thereof to Landlord. In case the Building shall be so damaged by fire or other casualty that substantial alteration or reconstruction of the Building shall be required (whether or not the Premises shall have been damaged by such fire or other casualty), (i) if such damage cannot be repaired within ninety
(90) days, following the commencement of such construction, (ii) if any mortgagee under a mortgage or deed of trust covering the Building requires that the insurance proceeds payable as a result of said fire or other casualty be used to retire or reduce such mortgage debt, or (iii) if such damage is not covered by insurance carried by Landlord, Landlord may, at its option, terminate this Lease and the term and estate hereby granted by notifying Tenant in writing of such termination within forty-five (45) days after the date of such damage, in which event the Rent shall be abated as of the date of such damage. If the damage does not require substantial alteration or reconstruction or if Landlord does not thus elect to terminate this Lease, Landlord shall, within sixty (60) days after the date of such damage, commence to repair and restore the Building and shall proceed with reasonable diligence to restore the Building (except that Landlord shall not be responsible for delays outside its control) to substantially the same condition in which it was immediately prior to the happening of the casualty, except that Landlord shall not be required to rebuild, repair or replace any part of Tenant's furniture and furnishings or fixtures and equipment removable by Tenant under the provisions of this Lease, but such work shall not exceed the scope of the work done by Landlord in originally constructing the Building. Tenant shall not be entitled to any compensation or damages from Landlord, and Landlord shall not be liable, for any loss of the use of the whole or any part of the Premises, the Building, Tenant's personal property, or any inconvenience or annoyance occasioned by such loss of use, damage, repair, reconstruction or restoration, except that, subject to the provisions of the next sentence, Landlord shall allow Tenant a diminution of Rent on a square footage basis during the time and to the extent the Premises are unfit or unavailable for occupancy. Tenant hereby specifically waives any and all rights it may have under any law, statute, ordinance or regulation to terminate the Lease by reason of casualty or damage to the Premises or Building, and the parties hereto specifically agree that the Lease shall not automatically terminate by law upon destruction of the Premises.

If the Building or the Premises is damaged or destroyed during the last twelve
(12) months of the Term of the Lease, and the Premises or the Building cannot be fully repaired or restored by Landlord within sixty (60) days after the date of damage or destruction, either Landlord or Tenant may terminate this Lease upon written notice to the other, which termination shall become effective upon the date of receipt of such notice.

CONDEMNATION:

If the whole of the Building or Premises should be condemned, this Lease shall terminate as of the date when physical possession of the Building or the Premises is taken by the condemning authority. If less than substantially the whole of the Building or the Premises is thus taken or sold, this Lease shall be unaffected by such taking, provided that (i) Tenant shall have the right to terminate this Lease by written notice to Landlord given within ninety (90) days after the date Tenant is informed of such taking if twenty percent (20.00%) or more of the Premises is taken and the remaining area of the Premises is not reasonably sufficient for Tenant to continue operation of its business, and (ii) Landlord (whether or not the Premises are affected thereby) may terminate this Lease by giving written notice thereof to Tenant within sixty (60) days after the date of such taking, in which event this Lease shall terminate as of the date when physical possession of such portion of the Building or Premises is taken by the condemning authority. If, upon any such condemnation of less than substantially the whole of the Building or the Premises, this Lease shall not be thus terminated, the Rent payable hereunder shall be diminished by an amount representing that part of the Rent as shall properly be allocable to the portion of the Premises which was so condemned, and Landlord shall, at Landlord's sole expense, restore and reconstruct the remainder of the Building and the Premises to substantially their former condition to the extent that the same, in Landlord's reasonable judgment, may be feasible, but such work shall not exceed the scope of the work done in originally constructing the Building, nor shall Landlord in any event be required to spend for such work an amount in excess of the amount received by Landlord as compensation awarded upon a taking of any part or all of the Building or the Premises. Subject to the rights of any mortgagee under a mortgage or deed of trust covering the Building, Landlord shall be entitled to and shall receive the total amount of any award made with respect to condemnation of the Premises or Building, regardless of whether the award is based on a single award or a separate award as between the respective parties, and to the extent that any such award or awards shall be made to Tenant or to any person claiming through or under Tenant, Tenant hereby irrevocably assigns to Landlord all of its rights, title and interest in and to any such awards. No portion of any such award or awards shall be allocated to or paid to Tenant for any so-called bonus or excess value of this Lease by reason of the relationship between the rental payable under this Lease and what may at the time be a fair market rental for the Premises, nor for Tenant's unamortized costs of leasehold improvements. Tenant hereby specifically waives any and all rights it may have under any law, statute, ordinance or regulation (including, without limitation, Sections 1265.120 and 1265.130 of the California Code of Civil Procedure), to terminate or petition to terminate this

Lease upon partial condemnation of the Premises or Building, and the parties hereto specifically agree that this Lease shall not automatically terminate upon condemnation.

Landlord may, without any obligation or liability to Tenant and without affecting the validity and existence of this Lease other than as hereafter expressly provided, agree to sell and/or convey to the condemnor the Premises or portion thereof sought by the condemnor, without first requiring that any action or proceeding be instituted, or if such action or proceeding shall have been instituted, without first requiring any trial or hearing thereof (and Landlord is expressly empowered to stipulate to judgment therein), free from this Lease and the rights of Tenant hereunder.

If all or any portion of the Premises is condemned or otherwise taken for a period (i) of less than one hundred twenty (120) days, this Lease shall remain in full force and effect and Tenant shall continue to perform all terms and covenants of this Lease; provided, however, Rent shall abate during such limited period in proportion to the portion of the Premises that is rendered unusable as a result of such condemnation or other taking, or (ii) of one hundred twenty
(120) days or more, Tenant shall have the right to terminate this Lease by providing written notice of such election within thirty (30) days of the date Tenant is informed of such condemnation. in which case Rent shall be abated as of the date of such condemnation.

The words "condemnation" or "condemned" as used herein shall mean the taking for any public or quasi-public use under any governmental law, ordinance, or regulation, or the exercise of, or the intent to exercise, the power of eminent domain, expressed in writing, as well as the filing of any action or proceeding for such purpose, by any person, entity, body, agency, or authority having the right or power of eminent domain, and shall include a voluntary sale by Landlord to any such person, entity, body agency or authority, either under threat of condemnation expressed in writing or while condemnation proceedings are pending, and shall occur in point of time upon the actual physical taking of possession pursuant to the exercise of said power of eminent domain.

TENANT'S DEFAULT: The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant:

The abandonment or vacation of the Premises by Tenant (failure to occupy and operate the Premises for thirty (30) consecutive days shall be deemed an abandonment).

The failure by Tenant to make any payment of Rent or any other payment required to be made by Tenant hereunder as and when due, where such failure shall continue for a period of five (5) business days following Tenant's receipt of written notice from Landlord that such payment is due.

Tenant's failure to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by Tenant, other than as described in subparagraph (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof by Landlord to Tenant; provided, however, that if the nature of Tenant's default is such that more than sixty (60) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said sixty (60) day period and thereafter diligently prosecutes such cure to completion.

The making by Tenant of any general assignment or general arrangement for the benefit of creditors, or the appointment of a trustee or a receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days, or the attachment, execution, or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged in thirty (30) days.

The filing of any voluntary petition in bankruptcy by Tenant, or the filing of any involuntary petition by Tenant's creditors, which involuntary petition remains undischarged for a period of thirty (30) days. In the event that under applicable law the trustee in bankruptcy or Tenant has the right to affirm this Lease and perform the obligations of Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease, and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the continued performance of Tenant's obligation under this Lease.

Without the prior written consent of Landlord, which shall not be unreasonably withheld, selling, leasing, assigning, encumbering, hypothecating, transferring, or otherwise disposing of all or substantially all of the Tenant's assets.

REMEDIES FOR TENANT'S DEFAULT: In the event of Tenant's default, Landlord may:

Terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall be entitled to recover from Tenant:

the worth at the time of the award of any unpaid rent which had been earned at the time of such termination; plus

the worth at the time of the 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 which Tenant proves could have been reasonably avoided, plus

the worth at the time of the 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 which Tenant proves could be reasonably avoided, plus

any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom (including, without limitation, the cost of recovering possession of the Premises, expenses of reletting including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and real estate commissions actually paid and that portion of the leasing commission paid by Landlord and applicable to the unexpired portion of this Lease), plus

such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law.

As used in Subsections (1) and (2) above, the "worth at the time of the award" shall be computed by allowing interest at the lesser of ten percent (10.00%) per annum, or the maximum rate permitted by law per annum. As used in Subsection (3) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1.00%).

Continue this Lease in full force and effect, and the Lease will continue in effect, as long as Landlord does not terminate Tenant's right to possession, and Landlord shall have the right to collect Rent when due. During the period Tenant is in default, Landlord may enter the Premises and relet them, or any part of them, to third parties for Tenant's account. Tenant shall be liable immediately to Landlord for all costs Landlord reasonably incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses of remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining term of this Lease. Tenant shall pay to Landlord the Rent due under this Lease on the dates the Rent is due, less the rent Landlord receives from any reletting. In no event shall Tenant be entitled to any excess rent received by Landlord. No act by Landlord allowed by this paragraph shall terminate this Lease unless Landlord notifies Tenant in writing that Landlord elects to terminate this Lease. After Tenant's default and for as long as Landlord does not terminate Tenant's right to possession of the Premises, if Tenant obtains Landlord's consent, Tenant shall have the right to assign or sublet its interest in this Lease, but Tenant shall not be released from liability.

Cause a receiver to be appointed to collect Rent. Neither the filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by Landlord to terminate the Lease.

Cure the default at Tenant's cost. If Landlord at any time, by reason of Tenant's default, reasonably pays any sum or does any act that requires the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the lesser of ten percent (10.00%) per annum, or the maximum rate an individual is permitted by law to charge from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional Rent.

The foregoing remedies are not exclusive; they are cumulative, in addition to any remedies now or later allowed by law, to any equitable remedies Landlord may have, and to any remedies Landlord may have under bankruptcy laws or laws affecting creditors' rights generally.

SURRENDER OF PREMISES: On expiration of this Lease or within five (5) days after the earlier termination of the Term, Tenant shall surrender to Landlord the Premises in good condition (except for ordinary wear and tear, repair and maintenance which is the obligation of Landlord, and destruction to the Premises covered by Section 24). Tenant shall remove all its personal property within the above-stated time. Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant's personal property within the time periods stated in this paragraph.

DEFAULT BY LANDLORD:

Landlord shall not be deemed to be in default in the performance of any obligation required to be performed by it hereunder unless and until it has failed to perform such obligations within thirty (30) days after written notice by Tenant to Landlord specifying wherein Landlord has failed to perform such obligation, provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be deemed to be in default if it shall commence such performance within such thirty (30)-day period and thereafter diligently prosecute the same to completion. In no event shall Landlord be liable to Tenant for loss of profits, business interruption, or consequential damages if Landlord performs its obligations within the time periods specified in this paragraph.

Tenant agrees to give any mortgagee and/or trust deed holders, by registered mail, a copy of any Notice of Default served upon the Landlord, provided that prior to such notice Tenant has been notified in writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of the address of such mortgagee and/or trust deed holder. Tenant further agrees that if Landlord shall have failed to cure such default within the time provided for in this Lease, then the mortgagees and/or trust deed holders shall have an additional thirty (30) days within which to cure such default.

PARKING: Tenant shall have the right to park in the Building's parking facilities in common with other tenants of the Building upon terms and conditions as may from time to time be established by Landlord. Landlord shall have the right, in addition to pursuing any other legal remedy available, to tow any vehicle belonging to Tenant or Tenant's employees which is not in compliance with the regulations for the parking facility then in effect if a violation continues after the first notice of such violation, at the reasonable expense of Tenant; nothing in this Lease, however, shall require Landlord to tow parked cars or take other actions to free occupied unreserved spaces for Tenant's use. Landlord shall not be liable for any claims, losses, damages, expenses or demands with respect to injury or damage to the vehicles of Tenant or Tenant's customers or employees that park in the parking areas of the Project, except for such loss or damage as may be caused by the negligence or willful misconduct of Landlord, its agents, employees, contractors and subcontractors.

ESTOPPEL CERTIFICATE: Tenant shall at any time and from time to time upon not less than ten (10) business days' prior written notice from Landlord execute, acknowledge, and deliver to Landlord a statement in writing, (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as modified is in full force and effect) and the date to which the Rental and other charges are paid in advance, if any; (b) certifying that the Premises have been accepted by Tenant; (c) confirming the Commencement Date and the expiration date of the Lease; and (d) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord hereunder, or specifying such defaults, if any are claimed. Any such statement may be relied upon by a prospective purchaser or encumbrancer of all or any portion of the real property of which the Premises are a part.

SALE OF PREMISES: In the event of any sale of the Project, Landlord shall be and hereby is entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease and the purchaser, at such sale or any subsequent sale of the Premises shall be deemed, provided such successor assumes in writing the obligations of Landlord hereunder and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of

Landlord under this Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord will transfer the security deposit and prepaid rent to Landlord's successor and upon such transfer, Landlord shall be relieved of any and all further liability with respect thereto.

SUBORDINATION, ATTORNMENT:

This Lease is and shall be subordinate to any encumbrance now of record or recorded after the date of this Lease affecting the Building, other improvements, and land of which the Premises are a part. If any mortgagee, trustee, or ground lessor shall elect to have this Lease and any options granted hereby prior to the lien of its mortgage, deed of trust, or ground lease, and shall give written notice thereof to Tenant, this Lease and such options shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease or such options are deeded prior or subsequent to the date of said mortgage, deed of trust, or ground lease, or the date of recording thereof.

In the event any proceedings are brought for foreclosure, or in the event of a sale or exchange of the real property on which the Building is located, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease. Tenant agrees to execute any documents required to effectuate an attornment or to make this Lease or any options granted herein prior to the lien of any mortgage, deed of trust, or ground lease, as the case may be.

Landlord agrees that Tenant's obligations to subordinate under this Section to any future or existing ground lease, mortgage, or deed of trust shall be conditioned upon Tenant's receipt of a nondisturbance agreement ("Nondisturbance Agreement") from the party requiring such subordination (which party is referred to for the purposes of this Section as the "Superior Lienor"). Such nondisturbance agreement shall provide, at a minimum, that Tenant's possession of the Premises shall not be interfered with following a foreclosure, provided Tenant is not in default beyond any applicable cure periods. Landlord's obligation with respect to such a nondisturbance agreement shall be limited to obtaining the nondisturbance agreement in such form as the Superior Lienor generally provides in connection with its standard commercial loans, however, Tenant shall have the right to negotiate, and Landlord shall use its good faith efforts and due diligence in assisting Tenant in the negotiation of, revisions to that nondisturbance directly with the Superior Lienor. Tenant agrees to use its good faith efforts to reach agreement with the Superior Lienor upon acceptable terms and conditions of a nondisturbance agreement.

AUTHORITY OF PARTIES:

Tenant's Authority: If Tenant is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. If Tenant is a partnership, each individual executing this Lease on behalf of said partnership represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said partnership under the terms of the partnership agreement of said partnership.

Landlord's Authority: If Landlord is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. If Landlord is a partnership, each individual executing this Lease on behalf of said partnership represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said partnership under the terms of the partnership agreement of said partnership.

BROKER: Landlord and Tenant each warrants that it has had no dealings with any real estate broker or agents in connection with the negotiation of this Lease, and it knows of no other real estate broker or agent who is entitled to a commission in connection with the Lease. Each party shall indemnify and hold harmless the other from and against any and all liabilities or expenses arising out of claims made by any broker (other than the Broker stated in the Basic Lease Information) or individuals for commissions or fees resulting from the actions of the indemnifying party in connection with the Lease.

HOLDING OVER: Upon termination of the Lease or expiration of the Term hereof, if Tenant retains possession of the Premises, Tenant's possession shall be deemed a month-to-month tenancy upon all of the terms and conditions contained in this Lease, except the base rent portion of the Rent which shall be increased to one hundred percent (100.00%) of the amount of the Base Rent at the expiration or earlier termination of the Lease, as the case may be. Rent, as adjusted pursuant to this Section, shall be payable in advance on or before the first day of each month. If either party desires to terminate such month-to-month tenancy, it shall give the other party not less than thirty (30) days' advance written notice of the date of termination.

RULES AND REGULATIONS: Tenant shall faithfully observe and comply with the reasonable rules and regulations that Landlord shall from time to time promulgate and provide written copies thereof to Tenant. Landlord reserves the right from time to time to make all reasonable nondiscriminatory modifications to said rules. The additions and modifications to those rules shall be binding upon Tenant upon delivery of a copy to them to Tenant (a copy of the present Rules and Regulations is attached hereto as Exhibit B). Landlord shall use its reasonable efforts to enforce compliance with such rules, but shall not be responsible to Tenant for the nonperformance of any of said rules by other tenants or occupants.

CONTEMPLATED EXPANSION: In the event that Tenant, following the Lease Date, determines to lease the remaining space within the Building, resulting in the Tenant leasing one hundred percent (100.00%) of the Rentable Area and Usable Area of the Building, Tenant shall thereafter, for the remaining Term of the Lease, (i) be responsible for the one hundred percent (100.00%) of all Operating Expenses, Taxes and Utilities, (ii) assume all maintenance, repair and replacement obligations of Landlord for the Project Common Areas and the Building, to the extent set forth in the Lease, excepting latent defects within the Building, the structural portions of the roof, the structural walls and foundation of the Building, which shall remain the responsibility of Landlord, and (iii) be responsible for procuring and maintaining all Utilities and services provided by Landlord to Tenant the expenses for which are within the definition of Operating Expenses. In such event, Landlord and Tenant shall enter into a written amendment to this Lease which addresses the matters set forth above, and any other matter deemed appropriate by the parties, with the intention to convert Tenant's leasehold interest in the Premises to a standard "Single-Tenant, Net, Net, Net" leasing relationship. In the event that Tenant elects to lease one hundred percent (100.00%) of the Rentable Area and Useable Area of the Building as set forth in

this Section, provided that Landlord and Tenant agree upon reasonable terms and conditions, Landlord would be willing to act as the manager of the Building, on behalf of Tenant, for a management fee of three and one-half percent (3.50%) of Rent, as may be modified pursuant to this Section.

NOTICES: All notices and demands required to be sent to the Landlord or Tenant under the terms of this Lease shall be personally delivered or sent by certified mail, postage prepaid or by overnight courier (i.e. Federal Express), to the addresses indicated in the Basic Lease Information, or to such other addresses as the parties may from time to time designate by notice pursuant to this paragraph. Notices shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice (ii) if mailed, two (2) days following the date of posting by the U.S. Postal Service, and (iii) if by overnight courier, on the business day following the deposit of such notice with such courier.

FIRST RIGHT OF REFUSAL: At any time during the term of this Lease, provided that Tenant is not in default hereunder, if Landlord receives an offer for the purchase of the Building which Landlord is willing to accept, Landlord shall provide Tenant with written notice of such offer and Tenant, for a period of five (5) days following receipt of such notice, shall have the right to purchase the Building upon the exact terms and conditions set forth in such notice by providing Landlord with written notice of such election. The failure of Tenant to provide such notice to Landlord within such time period shall be deemed Tenant's waiver of the provisions of this Section. If Landlord materially changes the terms set forth in such notice to Tenant (which is a decrease of more than ten percent (10.00%) of the purchase price), such revised offer shall be subject to Tenant's rights pursuant to this Section. The provisions of this
Section shall only be applicable to the named "Landlord" herein and shall not apply to any other successor or assign of Landlord.

OPTION TO PURCHASE: In addition to all other rights that Tenant has under this Lease to use and occupy the Premises during the Term, Landlord grants Tenant an option ("Option") to purchase the Building and Real Property on the following terms and conditions:

Option Date: This Option may only be exercised during the thirteenth (13th), fourteenth (14th) and fifteenth (15th) month following the Commencement Date ("Option Date"). If Tenant does not exercise the Option on the Option Date, Landlord shall be released from all obligations under this Option, and all of Tenant's rights under this Option, legal or equitable, shall cease.

Transferability of Option: This Option may be assigned only with the prior written consent of Landlord, which may be withheld in Landlord's sole discretion. The Option granted under this Lease is personal to Tenant and any Tenant Affiliate and may not be separated from or transferred independently from the Lease.

Exercise of Option: The Option shall be exercised by mailing or delivering a written notice ("Exercise Notice") to Landlord prior to the expiration of the Option Date. It is a condition to the effectiveness of Tenant's exercise of the Option that Tenant not then be in default under the Lease beyond any applicable cure period. If Tenant is in default under this Lease beyond any applicable cure period at the time Tenant gives the Exercise Notice, the Exercise Notice shall be void. Simultaneously with Tenant's delivery of the Exercise Notice, Tenant shall execute and deliver to Landlord, the Agreement of Purchase and Sale
("Purchase Agreement") which shall be in the form of Exhibit C. Within ten (10)
days following Landlord's receipt of the Purchase Agreement, provided that the Option is effective pursuant to this Section, Landlord shall execute the Purchase Agreement and return an original thereof to Tenant, and such document shall control the purchase and sale transaction regarding the Building and Real Property. The Purchase Agreement shall not be effective for any purpose unless Tenant timely and effectively exercises the Option. To the extent of any inconsistencies between the provisions of the Purchase Agreement and the Option, the provisions of the Option shall prevail.

Notices: The Exercise Notice shall be delivered to Landlord in accordance with the notice requirements set forth in this Lease.

Effect of Exercise: In the event that Buyer elects to exercise the Option and thereafter does not acquire fee title to the Project for any reason, this Lease shall remain effective and in full force.

RIGHT OF FIRST NEGOTIATIONS: At any time during the term of this Lease, provided that Tenant is not in default hereunder, Landlord agrees to give to Tenant a right of first negotiation to purchase the Building on the terms set forth in this Section. Before marketing the Building for sale, Landlord must provide Tenant with a notice ("Sale Notice") of Landlord's intent to sell the Building. During the forty (40)-day period following Tenant's receipt of the Sale Notice, Tenant shall have a first right to negotiate with Landlord for the purchase of the Building. The Sale Notice shall include all material terms and conditions on which Landlord is prepared to sell the Building to Tenant. Landlord and Tenant shall negotiate all material terms and conditions in good faith during such forty (40) day period. If Landlord and Tenant have not reached agreement on all material terms and conditions applicable to the sale of the Building during the aforesaid forty (40) day period, then Landlord shall be free to sell the Building to any other party for a period of six (6) months following Tenant's receipt of the Sale Notice; provided, however, that, in the event that Landlord materially alters the terms and conditions last offered to Tenant during such forty (40)-day period, then Landlord shall reoffer the Building to Tenant on such amended terms and conditions. (Without limiting the foregoing, a decrease of more than five percent (5.00%) in the net sale proceeds to be received by Landlord shall be deemed a material alteration of terms and conditions.) In the case of any such reoffer of the Building as aforesaid, Tenant shall accept or reject such reoffered terms within twenty (20) days of Tenant's receipt of such reoffer (which shall include the same detail as referred to in this Section above). The right of first negotiation under this Section shall not apply to (i) any sale, lease, exchange or other transfer to any controlled affiliate of Landlord, including any constituent partner of Landlord or any entity owned, controlled by or under common control or ownership with Landlord or any constituent partner thereof, or (ii) any transfer by Landlord solely for estate planning or asset protection purposes. The provisions of this Section shall only be applicable to the named "Landlord" herein and shall not apply to any other successor or assign Landlord.

MISCELLANEOUS:

Exhibits: Exhibits affixed to this Lease are a part hereof.

Joint Obligation: If there be more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several.

Marginal Headings: The marginal headings and titles to the paragraphs of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.

Time: Time is of the essence in this Lease and with respect to each and all of its provisions in which performance is a factor.

Quiet Possession: Upon Tenant paying the Rent reserved hereunder, and observing and performing all of the covenants, conditions, and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof, subject to all the provisions of this Lease.

Prior Agreements: This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto.

Inability to Perform: This Lease and Landlord's and Tenant's obligations hereunder (excepting Tenant's payment of Rent) shall not be affected or impaired if the performance of an obligation is prevented due to a Force Majeure Event. Landlord or Tenant, as the case may be, shall provide the other party with written notice of the occurrence of such Force Majeure Event and a description of the performance of the obligations delayed thereby, which Force Majeure Event may be objected to by such other party within five (5) days following its receipt of such notice. If objection is made to such Force Majeure Event, and such objection is not resolved within ten (10) days thereafter, the disputed matter shall be submitted to Arbitration for determination.

Jury Trial: The parties hereto shall, and they hereby do, waive trial by jury in any action, proceeding, or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises and/or any claim of injury or damage.

Landlord's Personal Liability: The liability of Landlord (which, for purposes of this paragraph, shall include the owner of the Building if other than Landlord, affiliates, officers, employees, partners or principals) to Tenant for any default by Landlord under the terms of this Lease shall be limited to the interest of Landlord in the Building. Except as provided in this Section, neither Landlord nor any partner, co-venturer, co-tenant, officer, director, employee, agent, or representative of Landlord shall have any personal liability whatsoever with respect thereto.

(j) Severability: Any provisions of this Lease which shall prove to be invalid, void, and illegal shall in no way affect, impair, or invalidate any other provision hereof, and such other provisions shall remain in full force and effect.

Choice of Law: This Lease shall be governed by the laws of the State in which the Premises are located.

Signs: Tenant shall not place any sign upon the Premises without Landlord's prior written consent. Any sign that Tenant has the right to place, construct, and maintain shall comply with all laws, and Tenant shall obtain any approval required by such laws. Landlord makes no representation with respect to Tenant's ability to obtain such approval.

Project Name: Tenant may use the name of the Project in which the Premises are located in all Tenant's advertising in connection with Tenant's business at the Premises and for no other purpose, except with Landlord's consent. Tenant shall not have or acquire any property right or interest in the name of the Project. Landlord reserves the right to change the name, title, or address of the Project or the address of the Premises at any time, and Tenant waives all claims for damages caused by such change.

Late Charges: Tenant acknowledges that late payment by Tenant to Landlord of Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing charges, accounting charges, and late charges that may be imposed on Landlord by the terms of any encumbrance and note secured by any encumbrance covering the Premises. Therefore, if any delinquent installment of Rent or other sums due from Tenant is not received by Landlord within ten (10) days after the same are due, Tenant shall pay to Landlord an additional sum equal to one percent (1.00%) of such overdue amount as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the administrative and other costs that Landlord will incur by reason of late payment by Tenant. Acceptance of any late charge [nrv1] shall not constitute a waiver of Tenant's default with respect to the overdue amount, nor prevent Landlord from exercising any of the other rights and remedies available to Landlord.

LANDLORD: TENANT:

________________ ________________ (Initials)

Interest: Notwithstanding any other provisions of this Lease, any installment of Rent or other amounts due under this Lease not paid to Landlord when due shall bear interest from the date due or from the date of expenditure by Landlord for the account of Tenant, until the same have been fully paid, at a rate per annum which is the lesser of the "prime" or "reference" rate of interest announced or internally posted by the Bank of America, N.T. & S.A., plus two (2) percentage points, but not to exceed the highest rate permitted under applicable law. The payment of such interest shall not constitute a waiver of any default by Tenant hereunder.

Attorneys' Fees: In the event any legal action is brought to enforce or interpret the provisions of this Lease, the prevailing party therein shall be entitled to recover all costs and expenses including reasonable attorneys' fees. In addition, if either party becomes a party to any litigation concerning this Lease, the Premises, or the Building or other improvements, by reason of any act or omission of the other party or its authorized representatives, and not by any act or omission of the party that becomes a party to that litigation or any act or omission of its authorized representatives, the party that causes the other party to become involved in the litigation shall be liable to that party for reasonable attorneys' fees and court costs incurred by it in the litigation.

Modification: This Lease contains the entire agreement between the parties relating to the rights herein granted and the obligations herein assumed. Any oral representations or modifications concerning this Lease shall be of no force or effect, excepting a subsequent modification in writing signed by the party to be charged.

Execution: Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

Successors and Assigns: Subject to the provisions of this Lease, this Lease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns.

Waiver of California Code Sections: Notwithstanding any other provision of this Lease and in addition to any waivers which may be contained in this Lease, Tenant waives the provisions of Civil Code Sections 1932(2) and 1933(4) with respect to the destruction of the Premises; Civil Code Sections 1932(1), 1941 and 1942 with respect to Landlord's repair duties and Tenant's right of repair; and Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises for public or quasi-public use by statute, by right of eminent domain, or by purchase in lieu of eminent domain; and any right of redemption or reinstatement of Tenant under any present or future case law or statutory provision (including Code of Civil Procedure Section 473, 1174(c) and 1179 and Civil Code Section 3275) in the event Tenant is dispossessed from the premises for any reason. This waiver applies to future statutes enacted in addition or in substitution to the statute specified herein, and this waiver shall apply even though Tenant may be the subject of a voluntary or involuntary petition in bankruptcy.

Government Energy or Utility Controls: In the event of imposition of federal, state or local governmental controls, regulations or restrictions on the use or consumption of energy or other utilities during the term, both Landlord and Tenant shall be bound thereby.

Accord and Satisfaction; Allocation of Payments: No payment by Tenant or receipt by Landlord of a lesser amount than the Rent provided for in this Lease shall be deemed to be other than on account of the earliest due Rent, nor shall any endorsement or statement on any check or letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of the Rent or pursue any other remedy provided for in this Lease. In connection with the foregoing, Landlord shall have the absolute right in its sole discretion to apply any payment received from Tenant to any account or other payment of Tenant which is then due or delinquent.

Changes Requested by Lender: Neither Landlord nor Tenant shall unreasonably withhold its consent to changes or amendments to this Lease requested by the lender on Landlord's interest, so long as these changes do not alter the Base Rent or other basic business terms of this Lease or otherwise diminish any right or increase any obligations of the party from whom consent to such change or amendment is requested.

Furnishing Financial Statements: In order to induce Landlord to enter into this Lease, prior to the Commencement Date, Tenant agrees that it shall promptly furnish Landlord and Landlord's lender, from time to time, upon Landlord's written request, with financial statements reflecting Tenant's current financial condition. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord and Landlord's lender in connection with the Lease are true, correct and complete in all material respects.

Objection to Statements: Tenant's failure to object to any statement, invoice or billing rendered by Landlord within a period of ninety (90) days after receipt thereof shall constitute Tenant's acquiesce with respect thereto and shall render such statement, invoice or billing an account stated between Landlord and Tenant.

Recording: No memorandum or short form of this Lease shall be recorded.

Execution of Lease, No Options: The submission of this Lease to Tenant shall be for examination purposes only, and does not and shall not constitute a reservation of or option for Tenant to Lease, or otherwise created any interest of Tenant in the Premises or any other Premises within the Building. Execution of this Lease by Tenant and its return to Landlord shall not be binding on Landlord notwithstanding any time interval, until Landlord has in fact signed and delivered this Lease to Tenant.

IN WITNESS WHEREOF, this Lease is executed on the date and year first above written.

LANDLORD:                                TENANT:

DOVE INVESTMENTS, INC.,                  MOUNTAIN PEOPLE'S WAREHOUSE,
a California corporation                 a California corporation

By:                                      By:


Its:                                     Its:

Date:                                    Date:

EXHIBIT A

Description of Premises

EXHIBIT B

Rules and Regulations

Landlord shall have the right to control and operate the public portions of the Building and the public facilities, as well as facilities furnished for the common use of the tenants, in such manner as it deems best for the benefit of the tenants generally. No tenant

shall invite to the demised Premises, or permit the visit of, persons in such numbers or under such conditions as to interfere with the use and enjoyment of the entrances, corridors, elevators and facilities of the Building by other tenants.

Landlord reserves the right to close and keep locked all entrance and exit doors of the Building outside of normal business hours as Landlord may deem to be advisable for the protection of the property. All tenants, their employees, or other persons entering or leaving the Building at any time when it is so locked may be required to sign the Building register when so doing, and the watchman in charge may refuse to admit to the Building while it is so locked Tenant or any of Tenant's employees, or any other person, without a pass previously arranged, or other satisfactory identification showing his right of access to the Building at such time. Landlord assumes no responsibility and shall not be liable for any damage resulting from any error in regard to any such pass or identification, or from the admission of any unauthorized person to the Building.

Landlord reserves the right to exclude or expel from the Building or in regard to any such pass or identification, or from the admission of any unauthorized person to the Building, or any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the Rules and Regulations of the Building or in violation of any law, order, ordinance, or governmental regulation.

The entries, corridors, stairways and elevators shall not be obstructed by any tenant, or used for any other purpose than ingress or egress to and from its respective offices. Tenant shall not bring into or keep within the Building any animal or vehicle.

Freight, furniture, business equipment, merchandise and bulky matter of any description ordinarily shall be delivered to and removed from the demised Premises only in the designated the service entrances and corridors, but special arrangements will be made for moving large quantities or heavy items of equipment and supplies into or out of the Building.

All entrance doors in the demised Premises shall be left locked when the demised Premises are not in use.

Tenant shall not attach or permit to be attached additional locks or similar devices to any door, transom or window of the demised Premises; change existing locks or the mechanism thereof; or make or permit to be made any keys for any door thereof other than those provided by Landlord. (If more than two keys for one lock are desired, Landlord will provide them upon payment therefor by Tenant).

Canvassing, soliciting or peddling in the Building is prohibited and each tenant shall cooperate to prevent the same.

Tenant shall not advertise the business, profession or activities of Tenant in any manner which violates the letter or spirit of any code of ethics adopted by any recognized association or organization pertaining thereto or use the name of the Building for any purpose other than the business address of the Tenant.

The drinking fountains, lavatories, water closets and urinals shall not be used for any purpose other than those for which they were installed.

No awnings or other projections over or around the windows or entrances of the demised Premises shall be installed by any tenant. Tenant shall not change the draperies or the color of induction unit enclosures in any manner which will alter the Building's appearance from the outside of the Building.

Rooms or other areas used in common by tenants shall be subject to such regulations.

Landlord is not responsible to any tenant for the nonobservance or violation of the Rules and Regulations by any other tenant.

Landlord reserves the right by written notice to Tenant, to rescind, alter to waive any rule or regulation at any time prescribed for the Building when, in Landlord's reasonable judgment, it is necessary, desirable or proper for the best interest of the Building and its tenants.

The Tenant shall not exhibit, sell or offer for sale on the demised Premises or in the Building any article or thing except those articles and things essentially connected with the stated use of the demised Premises by the Tenant without the advance consent of the Landlord.

The Tenant shall never use any picture or likeness of the Building in any circulars, notices, advertisements or correspondence without the Landlord's consent.

The Tenant shall cooperate fully with the Landlord to assure the effective operation of the Building's air conditioning system. If Tenant shall so use the demised Premises that noxious or objectionable fumes, vapors and odors exist beyond the extent to which they are discharged or eliminated by means of the flues and other devices contemplated by the various plans, specifications and leases, then Tenant shall provide proper ventilating equipment for the discharge of such excess fumes, vapors and odors so that they shall not enter into the air conditioning system or be discharged into other vents or flues of the Building or annoy any of the tenants of the Building or adjacent properties. The design, location and installation of such equipment shall be subject to Landlord's approval.

All loading and unloading of merchandise, supplies, materials, garbage and refuse shall be made only through such entryways and elevators and at such times as the Landlord shall designate. In its use of the loading areas in the basement, the Tenant shall not obstruct or permit the obstruction of said loading area and at no time shall park or allow its officers, agents or employees to park vehicles therein except for loading or unloading.

There shall not be used or kept anywhere in the Building by any tenant or persons or firms visiting or transacting business with a tenant any hand trucks, except those equipped with rubber tires and side guards, or other vehicles of any kind.

The Tenant shall not contract for any work or service which might involve the employment of labor incompatible with the Building employees or employees of contractors doing work or performing services by or on behalf of the Landlord.

No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with any window or door of the demised Premises without the prior written consent of the Landlord.

No sign, advertisement notice or other lettering shall be exhibited, inscribed, painted or affixed by Tenant on any part of the outside or inside of the demised Premises or of the Building, without the prior written consent of Landlord. In the event of any violation of the foregoing by Tenant, Landlord may remove same without any liability, and may charge the expense incurred by such removal to Tenant. Interior signs on doors and directory tablet shall be inscribed, painted or affixed for Tenant by Landlord at the expense of Tenant, and shall be of a quality, quantity, type, design, color, size, style, composition, material, location and general appearance acceptable to Landlord.

The sashes, sash doors, skylights, windows and doors that reflect or admit light or air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels, or other articles be placed on the window sills, or in the public portions of the Building.

Tenant shall not mark, paint, drill into or in any way deface any part of the demised Premises or the Building. No boring, cutting or stringing of wires shall be permitted, except with the prior written consent of Landlord, and as Landlord may direct.

No animal or bird of any kind shall be brought into or kept in or about the demised Premises or the Building.

Neither Tenant nor any of Tenant's agents, servants, employees, contractors, visitors or licensees shall at any time bring or keep upon the demised Premises any inflammable, combustible or explosive fluid, chemical or substance.

No additional locks, bolts or mail slots of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any change be made in existing locks or the mechanism thereof. Tenant must, upon the termination of the tenancy, restore to Landlord all keys of stores, offices and toilet rooms, either furnished to, or otherwise procured by Tenant, and in the event of the loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.

Landlord shall have the right to prohibit any advertising referring to the Building which, in Landlord's reasonable opinion, tends to impair the reputation of the Building or its desirability as a first-class building for offices, and upon notice from Landlord, Tenant shall refrain from or discontinue such advertising.

Tenant's contractors shall, while in the Building or elsewhere in the complex of which the Building forms a part, be subject to and under the control and direction of the Superintendent of the Building (but not as agent or servant of said Superintendent or of Landlord).

If the demised Premises is or becomes infested with vermin as a result of the use or any misuse or neglect of the demised Premises by Tenant, its agents, servants, employees, contractors, visitors or licensees, Tenant shall forthwith at Tenant's expense cause the same to be exterminated from time to time to the satisfaction of Landlord and shall employ such licensed exterminators as shall be approved in writing in advance by Landlord.

The requirements of Tenant will be attended to only upon application at the office of the Building. Building personnel shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of Landlord.

No water cooler, air conditioning unit or system or other apparatus shall be installed or used by Tenant without the written consent of Landlord.

Tenant shall install and maintain, at Tenant's sole cost and expense, an adequate visibly marked (at all times properly operational) fire extinguisher next to any duplicating or photocopying machine or similar heat producing equipment, which may or may not contain combustible material, in the demised Premises.

Tenant shall not use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the demised Premises, nor shall Tenant use any picture of the Building in its advertising, stationery or in any other manner without the prior written permission of Landlord. Landlord expressly reserves the right at any time to change said name without in any manner being liable to Tenant therefor.

EXHIBIT C

Agreement of Purchase and Sale

This Agreement of Purchase and Sale ("Agreement"), dated for reference purposes only ___________, 19___, is entered into by and between DOVE INVESTMENTS, INC., a California corporation, ("Seller"), and MOUNTAIN PEOPLE'S WAREHOUSE, INC., a California corporation ("Buyer").

Recitals

Seller is the owner of certain real property ("Real Property"), located in Auburn ("City"), Placer County ("County"), California ("State"), also known as Assessor's Parcel Number ___________________.

The Real Property has constructed thereon a certain building, containing approximately one hundred thousand (100,000) gross square feet, ("Improvements"). The Real Property and Improvements are collectively referred to as the "Project," which is commonly known as ___________________, Auburn, California.

The Real Property, Improvements, Personal Property (as hereinafter defined), and Seller's interest in the Leases and Service Contracts (each of which are hereinafter defined) are hereinafter collectively referred to as the "Property."

Buyer, as tenant, and Seller, as Landlord, prior to the Effective Date, have entered into a certain Net Lease Agreement ("Lease") dated December __, 1996, pursuant to which Buyer and Seller have entered into this Agreement.

Buyer desires to purchase from Seller and Seller desires to sell to Buyer the Property pursuant to the provisions of this Agreement.

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

Agreement

Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property on the terms and subject to the conditions set forth in this Agreement. For the purposes of this Agreement, the date which the last party executes this Agreement and delivers it to the other party shall hereinafter be referred to as the "Effective Date."

Purchase Price. The purchase price ("Purchase Price") for the Property shall be Forty-Eight and 50/100ths Dollars ($48.50) multiplied by the gross square footage of the Improvements (which is approximately one hundred thousand (100,000) square feet).

Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows:

Initial Deposit. On or before the fifth (5th) day following the Effective Date, Buyer shall deposit with Stewart Title of Sacramento ("Escrow Holder") the amount of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) ("Initial Deposit"). The Initial Deposit shall be invested by Escrow Holder with a financial institution acceptable to Seller in a federally insured interest-bearing demand account, and the Initial Deposit, and all interest accrued thereon, shall be credited to the Purchase Price upon the Close of Escrow.

Final Deposit. On or before the expiration of the Contingency Period (as hereinafter defined), unless this Agreement has been previously terminated by Buyer pursuant to its rights set forth in this Agreement, Buyer shall deposit with Escrow Holder the amount of One Hundred Thousand and No/100ths Dollars ($100,000.00) ("Final Deposit"). Upon Buyer's delivery of the Final Deposit to Escrow Holder, (i) the Final Deposit shall be invested by Escrow Holder in the interest-bearing account as is required for the Initial Deposit in Section 3(a) above, (ii) the Initial Deposit and the Final Deposit (collectively, "Deposit"), totalling One Hundred Twenty Five Thousand and No/100ths Dollars ($125,000.00), and all interest accrued thereon, shall be credited to the Purchase Price at Close of Escrow, and (iii) the Deposit shall become nonrefundable, become the sole and absolute property of Seller, except as otherwise provided herein.

Cash at Close of Escrow. On or before the Close of Escrow, Buyer shall deposit with Escrow Holder the remaining portion of the Purchase Price, in immediately available funds, which shall be paid to Seller at Close of Escrow.

Escrow.

Opening of Escrow. Within two (2) days following the Effective Date, Buyer shall open an escrow ("Escrow") with Escrow Holder. Buyer and Seller agree to execute and deliver to Escrow Holder, in a timely manner, all escrow instructions necessary to consummate the transaction contemplated by this Agreement. Any such instructions shall not conflict with, amend or supersede any portion of this Agreement. If there is any inconsistency between such instructions and this Agreement, this Agreement shall control.

Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be defined as the date that the Grant Deed (as hereinafter defined) is recorded in the Official Records of the County. The Close of Escrow shall occur ten (10) days following the expiration of the Contingency Period ("Outside Date"), unless extended by the mutual written consent of the parties.

Conditions of Title. It shall be a condition to the Close of Escrow that title to the Project be conveyed to Buyer by Seller by a Grant Deed, which shall be in the form customarily used by Escrow Holder in the County ("Grant Deed"), subject only to (a) a lien to secure payment of real estate taxes, not yet due and payable; (b) the lien of supplemental taxes, not yet due and payable; (c) exceptions which are approved and/or accepted by Buyer in writing in accordance with this Agreement; and (d) all applicable laws, ordinances, rules and governmental regulations (including, but not limited to those relative to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property (collectively, "Approved Conditions of Title").

Conditions to Close of Escrow.

Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligations to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions (or Buyer's written waiver thereof) which are for Buyer's sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Close of Escrow in absence of a specified date:

Title. Buyer shall have the right to approve any and all matters of and exceptions to title of the Project, including the legal description, as disclosed by the following documents and instruments (collectively, "Title Documents"): (A) a Preliminary Report ("Preliminary Report") issued by Escrow Holder with respect to the Project and all matters referenced therein; and (B) legible copies of all documents, whether recorded or unrecorded, referred to in such Preliminary Report. Buyer shall cause Escrow Holder to deliver the Title Documents to Buyer and Seller within ten (10) calendar days following the Effective Date. Buyer shall have ten (10) calendar days following its receipt of the Title Documents to give Seller and Escrow Holder written notice ("Buyer's Title Notice") of Buyer's approval or disapproval, which shall be made in Buyer's sole and absolute discretion, of the legal description and every item or exception disclosed by the Title Documents. The failure of Buyer to give Buyer's Title Notice to Seller within the specified time period shall be deemed Buyer's disapproval of title to the Project, in which case the Agreement shall be canceled pursuant to the provisions of this Section. In the event that Buyer's Title Notice disapproves of any matter of title shown in the Title Documents, Seller shall, within seven (7) calendar days after Buyer's Title Notice is received by Seller, give Buyer written notice ("Seller's Title Notice") of those disapproved title matters, if any, which Seller is unable or unwilling to have eliminated from title to the Project by Close of Escrow. In the event that Seller is unable to remove all of the title matters objected to by Buyer in Buyer's Title Notice, Buyer shall have three (3) calendar days from receipt of Seller's Title Notice to notify Seller in writing that either (1) Buyer is willing to purchase the Project subject to such disapproved exceptions, or (2) Buyer elects to cancel this transaction. Failure of Buyer to take either one of the actions described in Subsection (1) or (2) above shall be deemed to be Buyer's election to take the action described in Subsection (1) above. In the event this Agreement is canceled or deemed canceled pursuant to this Section, except as

otherwise provided herein, the parties shall have no further obligations under this Agreement, and all monies delivered to Escrow Holder by Buyer shall immediately be returned to Buyer.

Inspections and Studies. For a period of thirty (30) days following the Effective Date ("Contingency Period"), Buyer shall have the right to review and approve the (A) Documents and Materials (as hereinafter defined), and (B) conduct any and all inspections, investigations, tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies, soils, seismic and geologic reports and environmental testing) with respect to the Property as Buyer may elect to make or maintain. Prior to the expiration of the Contingency Period, Buyer shall deliver to Seller and Escrow Holder written notice of its approval or disapproval, which shall be made in Buyer's sole and absolute discretion, of the Property and the Documents and Materials. The failure of Buyer to deliver such notice prior to the expiration of the Contingency Period shall be deemed to constitute Buyer's disapproval of such matters, in which case the Agreement shall be canceled pursuant to the provisions of this Section. The cost of any such inspections, tests and/or studies shall be borne by Buyer. Between the Effective Date and the Close of Escrow, Buyer, its agents, contractors and subcontractors shall have the right to enter upon the Project at reasonable times during ordinary business hours to make any and all inspections and tests as may be necessary or desirable in Buyer's sole judgment and discretion. Buyer shall use its good faith efforts not to interfere with the use of the Improvements by the Tenants (as hereinafter defined). Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller) and hold Seller, its agents, employees, trustee, directors and officers, and the Property harmless from any and all damage arising out of or in connection with such entry and/or activities upon the Project by Buyer, its agents, employees or contractors. In the event Buyer disapproves or is deemed to have disapproved of the condition of the Property and/or the Documents and Materials prior to the expiration of the Contingency Period, except as otherwise provided herein, the parties shall have no further obligations under this Agreement, all monies delivered to Escrow Holder by Buyer shall be immediately returned to Buyer, and Buyer shall deliver to Seller copies of any and all reports, studies, inspections, or other materials Buyer caused to be prepared pursuant to its inspection right set forth in this Section.

Tenant Estoppel Certificate. On or before the Close of Escrow, Buyer shall have received from Seller estoppel certificates ("Tenant Estoppel Certificates"), duly executed by each of the Tenants, to be dated not more than forty-five (45) days prior to the Close of Escrow. The Tenant Estoppel Certificate shall be in the form of Exhibit A attached hereto. In this regard, Buyer's failure to object to any Tenant Estoppel Certificate within five (5) days following Buyer's receipt thereof shall be deemed (i) Buyer's approval of such document, and (ii) a satisfaction of the condition precedent set forth in this Section 6(a)(iii) as it relates to such Tenant.

Title Insurance. As of the Close of Escrow, Title Company (as hereinafter defined) shall have issued or shall have committed to issue the Title Policy (as hereinafter defined) to Buyer.

Seller's Obligations. As of the Close of Escrow, Seller shall have performed all of the obligations required to be performed by Seller under this Agreement.

Seller's Representations. As of the Close of Escrow, all representations and warranties made by Seller to Buyer in this Agreement shall be true and correct.

Conditions to Seller's Obligations. The Close of Escrow and Seller's obligations to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Seller's waiver thereof) which are for Seller's sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Close of Escrow in absence of a specified date:

Buyer's Obligations. As of the Close of Escrow, Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer.

Buyer's Representations. As of the Close of Escrow, all representations and warranties made by Buyer to Seller in this Agreement shall be true and correct as of the Close of Escrow.

Tenant Estoppel Certificates. On or before the Close of Escrow, Buyer shall have received Tenant Estoppel Certificates duly executed by all Tenants.

Outside Date. The Close of Escrow shall occur on or before the Outside Date.

Failure of Condition to Close of Escrow. Except as provided in Section 6(a) or
6(b), in the event any of the conditions set forth in Section 6(a) or 6(b) are not timely satisfied or waived by the appropriate benefitted party, for a reason other than the default of Buyer or Seller, this Agreement shall terminate, and if applicable, the Deposit, and all interest accrued thereon, and all other monies delivered to Escrow Holder by Buyer shall be immediately be returned to Buyer, and, except as otherwise provided herein, the parties shall have no further obligations hereunder.

Deposits by Seller. Unless otherwise provided in this Section, at least one (1) business day prior to the Close of Escrow, Seller shall deposit with Escrow Holder the following documents:

Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by Seller, conveying fee title to the Project to Buyer subject only to the Approved Conditions of Title.

FIRPTA Certificate. A certification, acceptable to Escrow Holder and duly executed by Seller under penalty of perjury setting forth Seller's address and federal tax identification number in accordance with and/or for the purpose of the provisions of Sections 7701 and 1445, as may be amended, of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

California Franchise Tax Withholding. Evidence satisfactory to Buyer and Escrow Holder that Seller is exempt from the provisions of the withholding requirements of the California Revenue and Taxation Code, as amended, and that neither Buyer nor Escrow Holder is required to withhold any amounts from the Purchase Price pursuant to such provisions.

Bill of Sale. A bill of sale ("Bill of Sale") duly executed and acknowledged by Seller in favor of Buyer, assigning and conveying to Buyer all of Seller's right, title and interest in and to the Personal Property. The Bill of Sale shall be in the form of, and upon the terms contained in, Exhibit B attached hereto.

Assignment of Leases. An Assignment of Leases ("Tenant Lease Assignment") duly executed and acknowledged by Seller in recordable form, assigning to Buyer all of Seller's right, title and interest in and to all of the Leases. The Tenant Lease Assignment shall be in the form of, and upon the terms contained in, Exhibit C attached hereto.

General Assignment. An assignment ("General Assignment"), duly executed by Seller, assigning to Buyer all of Seller's right, title and interest in the Service Contracts. The General Assignment shall be in the form of, and upon the terms contained in, Exhibit D attached hereto.

Tenant Notification Letter. A letter to the Tenants ("Tenant Notification Letter"), duly executed by Seller and dated as of the Close of Escrow, notifying each Tenant that: (1) the Project has been sold to Buyer; (2) all of Seller's right, title and interest in and to the Leases have been assigned to Buyer; and
(3) commencing immediately, all rent and other payments and any notices under the Leases are to be paid and sent to Buyer.

Lease. The original Leases.

Service Agreements. The original Service Agreements.

Keys. Keys to all entrance doors to the Improvements and keys to all Personal Property located on the Project, which keys shall be properly tagged for identification.

Reimbursable Operating Statement. A statement setting forth the operating expenses incurred by Seller for the year in which the Close of Escrow occurs, for which Tenants have not yet been billed but for which Tenants are required to reimburse Seller pursuant to the Leases; provided, however, if such information is not reasonably available at Close of Escrow, Seller may deliver such statement to Buyer as soon as practicable after the Close of Escrow.

Deposits By Buyer. At least one (1) business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder (a) the required funds which are to be applied towards the payment of the Purchase Price; (b) a counterpart of the Bill of Sale executed and acknowledged by Buyer; (c) a counterpart of the Tenant Lease Assignment executed and acknowledged by Buyer; and (d) a counterpart of the General Assignment executed and acknowledged by Buyer.

Issuance of Title Insurance. At the Close of Escrow, Escrow Holder's title insurer ("Title Company"), shall issue to Buyer its standard form California Land Title Association ("CLTA") Owner's Policy of Title Insurance showing fee title to the Project vested in Buyer subject only to the Approved Conditions of Title ("Title Policy"). The Title Policy shall be issued with liability in an amount equal to the Purchase Price. Seller shall pay for the expense of the Title Policy. If Buyer elects to have Title Company issue its American Land Title Association ("ALTA") Owner's Policy of Title Insurance, Buyer shall pay for the expense of such ALTA premium increment, any endorsement thereto and any survey costs.

Costs and Expenses. Except as otherwise specified in this Agreement, Seller and Buyer shall equally divide (a) all escrow fees and costs; (b) any document recording charges; and (c) documentary transfer tax charged by the County and any other transfer tax charged by the City. All other costs and expense of escrow and title shall be shared pursuant to the custom in the County. Buyer and Seller shall each pay all legal and professional fees and fees of other consultants incurred by Buyer and Seller, respectively.

Prorations.

Revenues. Rentals, revenues, and other income, if any, from the Property, and any form operating expenses pass-throughs relating to the Leases, if any, affecting the Property shall be prorated as of 11:59 p.m. on the day following the Close of Escrow. "Rentals" as used herein include fixed monthly rentals, additional rentals, percentage rentals, escalation rentals, retroactive rentals, and any other sums and charges payable by Tenants under the Leases.

Delinquent Rentals. Rentals are delinquent when payment thereof is due on or prior to the Close of Escrow but has not been made by the Close of Escrow. Delinquent Rentals shall be prorated between Buyer and Seller as of the Close of Escrow but not until they are actually collected by Buyer. Buyer shall use its good faith efforts and due diligence to collect any delinquent Rentals, if any. After the Close of Escrow, without the prior consent of Buyer, which shall not be unreasonably withheld, Seller shall not take any action against a Tenant owing delinquent Rentals. Seller shall be entitled to any Rentals received by Buyer from Tenants after the Close of Escrow to the extent such Rentals relate to amounts owing prior to the Close of Escrow. Buyer agrees that any payments due to Seller as a result of collected delinquent Rentals shall be payable by Buyer to Seller upon receipt thereof, less Buyer's reasonable cost of collection.

Operating Cost Pass-Throughs. Operating cost pass-throughs, or charges payable by Tenants which accrue to the Close of Escrow but which are not then due and payable, shall be prorated as of the Close of Escrow; provided, however, no payment thereof shall be made to Seller unless and until Buyer collects same from the Tenants, which Buyer shall use its good faith efforts an due diligence to collect following the Close of Escrow. When Buyer collects such operating cost pass-throughs, or charges from a Tenant, Buyer shall pay Seller an amount equal to all such operating cost pass-throughs, or charges accruing prior to the Close of Escrow. Payments of such prorated amounts shall be made to Seller upon receipt and shall be accompanied by a report showing such amount was calculated and such supporting documentation as Seller reasonably requests.

Tenant Deposits. Buyer shall be credited and Seller shall be debited with an amount equal to all deposits from Tenants (and any interest accrued thereon for the benefit of a Tenant) being held by Seller under the Leases.

Taxes/Assessments. All nondelinquent real estate taxes on the Project shall be prorated as of 11:59 p.m. on the day following the Close of Escrow based on the actual current tax bill, but if such tax bill has not yet been received by Seller by the Close of Escrow, then the current year's taxes shall be deemed to be one hundred two percent (102.00%) of the amount of the previous year's tax bill

for the Project. All delinquent taxes and all assessments, if any, on the Project shall be paid at the Close of Escrow from funds accruing to Seller.

Other Expenses. All other expenses for the Property shall be prorated as of 11:59 p.m. on the day following to the Close of Escrow between the parties based upon the latest available information.

Corrections. If any errors or omissions are made regarding adjustments and prorations as set forth herein, the parties shall make the appropriate corrections promptly upon discovery thereof. If any estimates are made at the Close of Escrow regarding adjustments or prorations, the party shall make the appropriate correction promptly when accurate information becomes available. Any corrected adjustment or proration shall be paid in cash to the party entitled thereto.

Review of Documents and Materials. Within five (5) calendar days following the Effective Date, Seller shall deliver to Buyer, all documents and materials (collectively, "Documents and Materials") relating to the Property to the extent in Seller's possession; provided, however, in no event shall Seller be required to disclose any "attorney-client" privileged information or internal appraisals. Seller makes no representation or warranty regarding the truth or accuracy of the Documents and Materials.

Condition and Inspection of Property. Seller makes no representation or warranty regarding the condition of the Property, its past use, or its suitability for Buyer's intended use, and the Property is sold AS-IS, WHERE-IS, WITH ALL FAULTS, AND THERE IS NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE PROPERTY. Buyer is relying solely upon, and as of the expiration of the Contingency Period shall have conducted its own independent inspection, investigation, and analysis of the Property as it deems necessary or appropriate in so acquiring the Property from Seller, including, without limitation, any and all matters concerning the condition, use and/or sale of the Property.

Liquidated Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE REMOVED BY THE SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT, AND THAT IF THIS AGREEMENT IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER. THE PARTIES HAVE DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER AS A RESULT OF ANY SUCH DEFAULT IS DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS AGREEMENT AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE PARTIES AGREE THAT IF THIS PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN OF THE DEPOSIT, AS LIQUIDATED DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY. NOTHING CONTAINED HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE BY SELLER PURSUANT TO [nrv2]

AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR INDEMNIFICATION PROVISION HEREOF.

Seller _________ Buyer _________

Condemnation and Destruction.

Eminent Domain or Taking. If, prior to the Close of Escrow, any material portion of the Real Property or Improvements is taken by eminent domain or otherwise, Seller shall immediately notify Buyer of such fact. If such taking is "material," Buyer shall have the option, in its reasonable discretion, to terminate this Agreement upon written notice to Seller given not later than ten
(10) days after receipt of Seller's notice. If this Agreement is terminated pursuant to this Section, the provisions of Section 6(c) shall govern. If Buyer does not exercise this option to terminate this Agreement, or if there has not been a material taking by eminent domain or otherwise to give rise to such option, neither party shall have the right to terminate this Agreement, but the Seller shall assign and turn over, and the Buyer shall be entitled to receive and keep, all awards for the taking by eminent domain which accrue to Seller and the parties shall proceed to the Close of Escrow pursuant to the terms hereof, without modification of the terms of this Agreement and without any reduction in the Purchase Price. For the purpose hereof, "material" shall be deemed to be any diminution in the value of the Property as a result of a taking by eminent domain or otherwise which exceeds Fifty Thousand and No/100ths Dollars ($50,000.00), as determined by Seller using its good faith judgment.

Fire or Casualty. Prior to the Close of Escrow, the entire risk of loss or damage by earthquake, flood, landslide, fire or other casualty shall be borne and assumed by Seller, except as otherwise provided in this Section. If, prior to the Close of Escrow, any part of the Improvements are damaged or destroyed by earthquake, flood, landslide, fire or other casualty, Seller shall immediately notify Buyer of such fact. If such damage or destruction is "material", Buyer shall have the option to terminate this Agreement upon written notice to the Seller given not later than ten (10) days after receipt of Seller's notice. For purposes hereof, "material" shall be deemed to be any uninsured damage or destruction to the Project or any insured damage or destruction where the cost of repair or replacement is estimated to be Fifty Thousand Dollars ($50,000.00) or more or shall take more than ninety (90) days to repair, in Seller's good faith judgment; provided, however, in the case of uninsured damage or destruction, Seller may, at Seller's option, elect to repair such damage and destruction and keep this Agreement in full force and effect so long as such repair can be and is completed by Seller prior to the Close of Escrow. If this Agreement is so terminated, the provisions of Section 6(c) shall govern. If Buyer does not exercise this option to terminate this Agreement, or if the casualty is not material, neither party shall have the right to terminate this Agreement but Seller shall assign and turn over, and Buyer shall be entitled to receive and keep, all insurance proceeds payable to it with respect to such destruction, and the parties shall proceed to the Close of Escrow pursuant to the terms hereof without modification of the terms of this Agreement and without any reduction in the Purchase Price.

Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or sent by electronic facsimile and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if mailed, on the date of posting by the United States Post Office, or (iii) if given by electronic facsimile, when received by the other party.

TO BUYER:                            Mountain People's Warehouse, Inc.
                                     12745 Earhart Avenue
                                     Auburn, California 95602
                                     Telephone: ______________
                                     Facsimile: ______________
                                     Attention: ______________

TO SELLER:                           Dove Investments, Inc.
                                     3620 Fair Oaks Boulevard, Suite 150
                                     Sacramento, California
                                     Telephone: (916) 920-4400
                                     Facsimile: (916) 920-0854
                                     Attention: Benjamin S. Catlin

WITH COPY TO:                        Trainor Robertson
                                     701 University Avenue, Suite 200
                                     Sacramento, California 95825
                                     Telephone: (916) 929-7000
                                     Facsimile: (916) 929-7111
                                     Attention: Jay Heckenlively

TO ESCROW HOLDER:

                                     Telephone:

                                     Facsimile:

Attention:

Notice of change of address shall be given by written notice in the manner described in this Section.

Brokers. The parties acknowledge and agree that there is no real estate broker involved in this transaction.

Exchange. The parties to this Agreement acknowledge that either party may desire to structure the sale and/or the purchase of the Property as an exchange for like-kind property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, in order to defer recognition of income from the disposition of the Property and other properties. The parties agree to reasonably cooperate with each other to accomplish such exchange(s) and each party hereby agrees that any and all costs associated with said exchange shall be borne solely by the exchanging party and shall in no way be attributable to the nonexchanging party. In no event shall the nonexchanging party be required to take title to the exchanged property(ies) to effectuate the tax deferred exchange contemplated by this Section.

Miscellaneous.

Partial Invalidity. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid, and shall be enforced to the fullest extent permitted by law.

Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of time for performance of any other obligation or act except those of the waiving party, which shall be extended by a period of time equal to the period of the delay.

Survival of Representations. The indemnification, defense and hold harmless obligations, and the representations and warranties made by each party herein shall survive (1) the Close of Escrow and shall not merge into the Grant Deed and the recordation thereof, and (2) the termination and/or cancellation of this Agreement.

Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the parties hereto.

Professional Fees. If either party commences an action against the other to interpret or enforce any of the terms of this Agreement or because of the breach by the other party of any of the terms hereof, the losing party shall pay to the prevailing party reasonable attorneys' fees, costs and expenses and court costs and other costs of action incurred in connection with the prosecution or defense of such action, whether or not the action is prosecuted to a final judgment. For the purpose of this Agreement, the terms "attorneys' fees" or "attorneys' fees and costs" shall mean the fees and expenses of counsel to the parties hereto, which may include printing, photostating, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals, librarians and others not admitted to the bar but performing services under the supervision of an attorney. The terms "attorneys' fees" or "attorneys' fees and

costs" shall also include, without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. The term "attorney" shall have the same meaning as the term "counsel."

Entire Agreement. This Agreement (including all exhibits attached hereto) is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented, superseded, canceled or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto and lawful assignees.

Assignment. Buyer may not assign its right, title or interest in this Agreement to any other party without the prior written consent of Seller, which determination may be withheld in Seller's sole and absolute discretion. Any attempted assignment without the prior written consent of Seller shall be void and be deemed a default of Buyer hereunder. Any permitted assignment shall not relieve the assigning party from any liability under this Agreement.

Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a material breach of and a noncurable (but waivable) default under this Agreement by the party so failing to perform.

Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed by the parties to create the relationship of principal and agent, a partnership, joint venture or any other association between Buyer and Seller.

Construction. Headings at the beginning of each paragraph and subparagraph are solely for the convenience of the parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs, sections, subparagraphs and subsections are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated by this reference.

Governing Law. The parties hereto acknowledge that this Agreement has been negotiated and entered into in the State of California. The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.

Possession of Property. Buyer shall be entitled to the possession of the Property immediately following the Close of Escrow.

Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

Days of Week. If any date for performance herein falls on a Saturday, Sunday or holiday, as defined in Section 6700 of the California Government Code, the time for such performance shall be extended to 5:00 p.m. on the next business day.

Representation by Counsel. Notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty shall not be construed against either Seller or Buyer based upon authorship of any of the provisions hereof. Seller and Buyer each hereby warrant, represent and certify to the other as follows:
(a) that the contents of this Agreement have been completely and carefully read by the representing party and counsel for the representing party; (b) that the representing party has been separately represented by counsel and the representing party is satisfied with such representation; (c) that the representing party's counsel has advised the representing party of, and the representing party fully understands, the legal consequences of this Agreement; and (d) that no other person (whether a party to this Agreement or not) has made any threats, promises or representations of any kind whatsoever to induce the execution hereof, other than the performance of the terms and provisions hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below.

BUYER:                                      SELLER:

MOUNTAIN PEOPLE'S WAREHOUSE,                DOVE INVESTMENTS, INC.,
a California corporation                    a California corporation

By:                                         By:


Its:                                        Its:

Date: Date:

FIRST AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)

This First Amendment to Net Lease Agreement ("First Amendment"), dated for reference purposes as August 11, 1998, is entered into by and between LOCKSLEY LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED NATURAL FOODS, INC., a Delaware corporation ("Tenant").

Recitals

A. On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's predecessor-in-interest entered into that certain Net Lease Agreement ("Lease") concerning the lease of the "Premises," more particularly described therein. As of the Effective Date (as hereinafter defined) of this First Amendment, the Lease remains effective and in full force and effect.

B. Landlord and Tenant now desire to amend the terms and conditions of the Lease in accordance with the provisions of this First Amendment.

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

Agreement

1. Definitions. Unless otherwise specified herein, all capitalized terms used in this First Amendment are used as defined in the Lease.

2. Effective Date. This First Amendment shall become effective on the date it is executed by both Landlord and Tenant, which date is hereinafter referred to as the "Effective Date."

3. Confirmation. Tenant acknowledges and agrees that Landlord has previously accepted the assignment from Dove Investment, Inc., a California corporation, of its interest in the Lease as the "Landlord".

4. Free Base Rent. Notwithstanding the provisions of Section 7 of the Lease, Landlord agrees that for the first sixty (60) days following the Commencement Date, Tenant shall be entitled to Base Rent-Free possession of the Premises.

5. Term. Landlord and Tenant agree that the "Term," as defined in the Basic Lease Information, shall expire ten (10) years following the Commencement Date.

6. Section 2c of the Lease. Landlord and Tenant agree that the "Anticipated Occupancy Date," set forth in Section 2c of the Lease, is hereby amended from "July 1, 1997" to "February 1, 1999."

7. Premises Section of the Basic Lease Information. Landlord and Tenant hereby agree that the first sentence of the section entitled "Premises" in the Basic Lease Information is deleted in its entirety and replaced with the following:

"The Premises referred to in this Lease are located at 12600 Locksley Lane, Auburn, California ("Building"), and consist of approximately sixty-two thousand eight hundred seventy-five (62,875) rentable square feet as shown in Exhibit A, which is sixty-two and 875/1000ths percent (62.875%) ("Tenant's Proportionate Share") of the rentable square feet of the Building."

8. Base Rent Section of the Basic Lease Information. Landlord and Tenant hereby agree that the Base Rent section entitled "Base Rent" in the Basic Lease Information is hereby deleted in its entirety and replaced with the following:

"Twenty-Three Thousand Five Hundred Seventy-Eight and 13/100ths Dollars ($23,578.13) per month based on sixty-two thousand eight hundred seventy-five (62,875) rentable square feet at $.3750 per square foot per month payable in advance on the first day of each month, subject to adjustment pursuant to
Section 7 of the Lease and until increased as provided in Section 7 of the Lease."

9. Change Orders. Landlord and Tenant acknowledge and agree that they have (i) approved of certain change orders ("Change Orders") to the Approved Final Plans, as defined in Section 2 of the Lease, and (ii) allocated the responsibility for payment of the Change Orders. A summary of the Change Orders and the designation of the party responsible for such expense ("Change Order Summary") is attached hereto as Exhibit A-1.

10. Truck Turn-Around. At all times during the term of this Lease, Landlord shall provide sufficient driveway area adjacent to the Building that shall allow any truck's utilized by Tenant to ingress the driveway areas of the Building, turn around, and back up to the trucking docks for the Premises without having to "blind side in" (as such term is customarily used in the trucking industry). Upon Landlord's finalization of the improvement plans for the driveway/parking areas for the Building, Landlord shall forward a copy thereof to Tenant for review and reasonable approval.

11. Ratification. Except as modified by this First Amendment, the Lease is ratified, affirmed, in full force and effect, there are not existing defaults by the parties thereunder, and incorporated herein by this reference.

NOW, THEREFORE, the parties have executed this First Amendment as of the date set forth below.

LANDLORD:                                  TENANT:


LOCKSLEY LANE INVESTORS, L.P.,             UNITED NATURAL FOODS, INC.,
a California limited partnership           a Delaware corporation


By: ________________________               By: ________________________


Its: ________________________              Its: ________________________


Date: ________________________             Date: ________________________

SECOND AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)

This Second Amendment to Net Lease Agreement ("Second Amendment"), dated for reference purposes as June 14, 1999, is entered into by and between LOCKSLEY LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED NATURAL FOODS, INC., a Delaware corporation ("Tenant").

Recitals

C. On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's predecessor-in-interest entered into that certain Net Lease Agreement ("Net Lease") concerning the lease of the "Premises," more particularly described therein.

D. On or about August 11, 1998, Landlord and Tenant amended certain terms and conditions of the Net Lease by that certain First Amendment to Net Lease Agreement ("First Amendment"). The Net Lease, as amended by the First Amendment, is hereinafter collectively referred to as, the "Lease." As of the Effective Date (as hereinafter defined) of this Second Amendment, the Lease remains in full force and effect.

E. Pursuant to the First Amendment, Landlord and Tenant agreed that the sum of Eighty-Nine Thousand Twenty and No/100ths dollars ($89,020.00) is the accurate total cost of the Tenant requested Change Orders.

F. Landlord and Tenant now desire to amend the terms and conditions of the Lease in accordance with the provisions of this Second Amendment.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, the parties agree as follows:

Agreement

1. Definitions. Unless otherwise specified herein, all capitalized terms used in this Second Amendment are used as defined in the Lease.

2. Effective Date. This Second Amendment shall become effective on the date upon which the last party hereto executes this Second Amendment ("Effective Date").

3. Section 2(c) of the Lease.

(a) Landlord and Tenant hereby agree upon the summary of events contained in this Section 3(a) that have affected the provisions of Section 6(b) of the Net Lease. The Anticipated Occupancy Date was amended to be February 1, 1999 by the First Amendment. The ninetieth (90th) day following February 1, 1999, is May 1, 1999, whereupon Landlord would have incurred the penalties set forth in Section 6(b) of the Net Lease but for the fact that there were delays totaling forty-seven (47) days, which delays arose out of Force Majeure Events. Due to such delays, the revised date upon which Landlord would incur penalties pursuant to Section 6(b) of the Net Lease is currently June 16, 1999.

(b) In consideration of the foregoing Section 3(a), Landlord and Tenant hereby agree and acknowledge that the "Anticipated Occupancy Date," set forth in
Section 2(c) of the Lease, is hereby amended from "February 1, 1999" to "September 7, 1999."

(c) Notwithstanding anything to the contrary contained in this Section 3, the provisions of Section 6(b) of the Net Lease regarding extensions of the Anticipated Occupancy Date as a result of delays caused by the Tenant and/or Force Majeure Events, remain in full force and effect.

4. Construction.

(a) Schedule. Attached hereto as Exhibit A and incorporated herein by this reference, is a schedule for the construction of the Building Improvements ("Construction Schedule"). Landlord anticipates that the Premises will be Ready for Occupancy (i) as of September 7, 1999 with respect to the "warehouse portion" ("Warehouse Portion"), and (ii) as of September 24, 1999 with respect to the "office portion" ("Office Portion") each of which is designated on the site plan attached hereto as Exhibit B and incorporated herein by this reference.

(b) Early Occupancy. Landlord shall notify Tenant of the date upon which it shall be granted early occupancy of the Premises ("Early Occupancy"), which date shall be forty (40) days prior to the Anticipated Occupancy Date ("Early Occupancy Date"). The purpose of the Early Occupancy is to facilitate the installation of the warehouse racks ("Racks") by Tenant's subcontractor, which construction is set forth on the Construction Schedule. The Early Occupancy shall be free of (i) Rent pursuant to Section 7 of the Lease, (ii) Operating Expenses pursuant to Section 15 of the Lease, (iii) cost for Utilities, if any, pursuant to Section 11 of the Lease, and (iv) any costs specified in the Lease as additional Rent, but otherwise subject to all terms and conditions of the Lease. In the event the Racks are not installed and ready for use twenty-five
(25) days following the Early Occupancy Date, each day of delay thereafter that is not caused by Landlord shall be defined as a Force Majeure Event which shall accordingly extend the Anticipated Occupancy Date.

5. Plans Schedule. Attached hereto as Exhibit C and incorporated herein by this reference, is a copy of the schedule for the Approved Final Plans listing all applicable architectural and engineering plans.

6. Freezer. In connection with the freezer required by Tenant to be installed in the Premises ("Freezer"), Landlord and Tenant agree as follows:

(a) Freezer Improvements. In preparation for the installation of the Freezer, certain improvements shall be made to the Building including, without limitation, plumbing improvements, structural reinforcement, and drainage provisions (collectively, "Freezer Improvements"), the costs of which will not exceed those more particularly described in the change order approved by Landlord and Tenant ("Freezer Change Order"), which Freezer Change Order is attached hereto as Exhibit D and incorporated herein by this reference. Landlord shall cause its contractors to install the Freezer Improvements pursuant to the Freezer Change Order.

(b) Cost of Freezer Improvements. All costs identified in Exhibit D shall be paid by Tenant including, without limitation, design fees, engineering fees, cost of materials, contractor fees, and permit costs (collectively, "Freezer Costs"). Landlord shall periodically submit to Tenant, invoices for the Freezer Costs. Tenant shall pay Landlord the amount reflected in such invoices within fifteen (15) business days following its receipt thereof and the failure to timely make such payments shall be deemed a late payment in accordance with the provisions of Section 43(n) of the Net Lease.

(c) Freezer Subcontractor. Landlord and Tenant acknowledge that, upon (i) completion of the Freezer Improvements and (ii) Landlord's receipt of all amounts reflected in the invoices for the Freezer Costs, Tenant's freezer subcontractor ("Subcontractor") will install the Freezer in the Premises. All costs and expenses incurred in connection with the installation of the Freezer by the Subcontractor shall be the sole obligation and responsibility of Tenant.

7. Cost Offset. Section 6(b) of the Net Lease is hereby deleted in its entirety and replaced with the following paragraph:

"(b) Penalty; Cost Off-Set. Notwithstanding anything to the contrary contained in the Net Lease, Landlord and Tenant acknowledge that as of June 16, 1999, Landlord is obligated to pay Tenant the amount of Five Hundred and No/100ths Dollars ($500.00) ("Penalty") per day for each day beyond June 16, 1999 until a Certificate of Occupancy is issued for the Warehouse Portion; provided, however, such date shall be extended due to delays caused by Tenant or Force Majeure Events. The Penalty shall be paid by Landlord by way of a credit against (a) increased costs for the Change Orders requested by Tenant and such additional Change Orders as may be approved after the Effective Date, and (b) the Freezer Costs. The parties acknowledge such amount as a reasonable estimate of damages as a result of delays and delivery and is the sole remedy as a result thereof. In no event shall the Commencement Date be deemed to have occurred unless and until Certificates of Occupancy for the Premises have been issued."

8. Ratification. Except as modified by this Second Amendment, the Lease is ratified, affirmed, in full force and effect, and incorporated herein by this reference and the parties acknowledge that there are currently no defaults pursuant to the Lease by either party.

9. Counterparts and Facsimiles. The parties hereto may execute this Second Amendment simultaneously, in any number of counterparts, or on facsimile copies, each of which shall be deemed an original, but all of which together shall constitute one and the same Second Amendment.

NOW, THEREFORE, the parties have executed this Second Amendment as of the date set forth below.

LANDLORD:                                  TENANT:

LOCKSLEY LANE INVESTORS, L.P.,             UNITED NATURAL FOODS, INC.,
a California limited partnership           a Delaware corporation

By: ________________________               By: ________________________

Its: ________________________              Its: ________________________

Date: ________________________             Date: ________________________

Exhibit A

Construction Schedule

Exhibit B

Site Plan

Exhibit C

Schedule for Approved Final Plans

Exhibit D

Freezer Change Order

THIRD AMENDMENT TO NET LEASE AGREEMENT

(Auburn, California)

This Third Amendment to Net Lease Agreement ("Third Amendment"), dated for reference purposes as September 27, 1999, is entered into by and between LOCKSLEY LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED NATURAL FOODS, INC., a Delaware corporation ("Tenant").

Recitals

G. On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's predecessor-in-interest entered into that certain Net Lease Agreement ("Original Lease") concerning the lease of the "Premises," within the "Building," both of which are more particularly described therein.

H. On or about August 11, 1998, Landlord and Tenant amended the provisions of the Original Lease pursuant to that certain First Amendment to Net Lease Agreement ("First Amendment"). Thereafter, on or about July 12, 1999, Landlord and Tenant further amended the provisions of the Original Lease pursuant to that certain Second Amendment to Net Lease Agreement ("Second Amendment"). The Original Lease, as amended by the First Amendment and the Second Amendment, is hereinafter referred to as the "Lease."

I. On or about the date that the parties are entering into this Third Amendment, Landlord, as "Seller," and Tenant, as "Buyer," intend to enter into a certain "Agreement of Purchase and Sale" concerning the Project.

J. Landlord and Tenant now desire to amend the terms and conditions of the Lease in accordance with the provisions of this Third Amendment.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, the parties agree as follows:

Agreement

1. Definitions. Unless otherwise specified herein, all capitalized terms used in this Third Amendment are used as defined in the Lease.

2. Effective Date. This Third Amendment shall become effective on the date it is executed by both Landlord and Tenant, which date is hereinafter referred to as the "Effective Date."

3. Expansion of Premises. Tenant desires to expand the Premises to include the remaining approximately thirty-seven thousand one hundred twenty five (37,125) usable and rentable square feet of the Building ("Expansion Area"), which area is more particularly described in Exhibit A attached hereto, to the existing Premises, which area currently contains approximately sixty-two thousand eight hundred seventy five (62,875) usable and rentable square feet. The usable and rentable area of the Expansion Area and the Premises total one hundred thousand (100,000) square feet. Landlord hereby leases to Tenant the Expansion Area upon the terms and conditions set forth in this Third Amendment.

4. Expansion Area Commencement Date. The commencement date of the Lease with respect to the Expansion Area ("Expansion Area Commencement Date") shall be sixty (60) days following the date when Landlord's construction of the Expansion Area improvements ("Expansion Area Improvements") described pursuant to the Work Letter Agreement attached hereto as Exhibit B are substantially complete, excepting (i) Punch List Items for the Expansion Area Improvements pursuant to the procedures set forth in Section 4 of the Original Lease, and (ii) such modifications to the shell of the Building as may be required in connection with the Freezer Installation. In no event shall the Expansion Area Commencement Date occur prior to September 1, 1999.

5. Amendment of Lease Provisions. Unless otherwise stated below, upon the Expansion Area Commencement Date, the Lease shall be amended as follows:

(d) Any and all references to "Premises" in the Lease shall be deemed to include the "Expansion Area."

(e) The usable and rentable square footage of the Premises shall be increased to one hundred thousand (100,000) square feet.

(f) The Tenant's Proportionate Share shall be increased to one hundred percent (100.00%).

(g) The initial Base Rent, set forth in the Basic Lease Information, shall be amended to Thirty-Seven Thousand Five Hundred and No/100ths Dollars ($37,500.00) per month and shall be adjusted concurrent with the scheduled adjustments pursuant to Section 7 of the Original Lease with respect to the Premises.

(h) Tenant shall be responsible for all maintenance, repair and replacement obligations of Tenant set forth in the Original Lease and all obligations of Landlord with respect to the Project Common Areas and the Building, excepting latent defects within the Building, the structural portions of the roof, the structural walls and foundation of the Building, which shall remain the responsibility of Landlord.

(i) Tenant shall be responsible for one hundred percent (100.00%) of all Operating Expenses, Taxes and Utilities and shall be responsible for procuring and maintaining all Utilities and services contemplated by the Original Lease to be provided by Landlord to Tenant, the expenses for which are within the definition of Operating Expenses. Notwithstanding the foregoing, upon completion of the Lot Split (as hereinafter defined), in no event shall (i) Tenant incur additional expense as a result of such parcelization, and (ii) Tenant's share of Operating Expenses, Taxes and Utilities, increased above amounts otherwise payable by Tenant as if the Lot Split had not occurred. For clarification purposes, in furtherance of the parties original intent as mentioned in Section 6 of this Third Amendment, notwithstanding the occurrence of the Lot Split or the provisions of the Lease, in no event shall Tenant be responsible for Operating Expenses, Taxes and/or Utilities applicable to the Adjacent Parcel (as defined below) whether created or not pursuant to Section 6.

6. Lot Split. In the event that the transaction described by the Agreement of Purchase and Sale is not closed, and only in such event, in order to effectuate the original intent of the parties and facilitate Landlord's performance concerning certain rights granted by Landlord to Tenant in the Lease, Landlord and Tenant hereby acknowledge and agree that Landlord shall have the right to cause the "Real Property" defined in Section 1(a) of the Original Lease, to become two separate legal parcels in compliance with the California Subdivision Map Act. In the event that Landlord causes such subdivision of the Real Property ("Lot Split"), the terms "Real Property," "Project Common Area," and any other defined term in the Lease shall exclude the Adjacent Property (as hereinafter defined). The Lot Split shall be done in accordance with all applicable laws, statutes and ordinances and Landlord represents and warrants that such action shall be consistent with applicable zoning ordinances. Specifically, Tenant further acknowledges and agrees that, as a material consideration for Landlord agreeing to enter into this Third Amendment, (i) the First Right of Refusal described in Section 40 of the Original Lease, (ii) the Option to Purchase described in Section 41 of the Original Lease, and (iii) the First Right of Negotiation described in Section 42 of the Original Lease shall only apply with respect to that legal parcel upon which the Building is constructed ("Building Parcel") following the Lot Split. In the event that the Lot Split is accomplished, the newly created parcel adjacent to the Building Parcel shall be referred to as the "Adjacent Parcel." As a condition precedent to finalization of the Lot Split, Landlord and Tenant shall reach agreement upon the terms and conditions of certain encumbrances concerning both the Building Parcel and Adjacent Parcel (drafts of which shall be prepared by Landlord and delivered to Tenant for review), which encumbrances include, without limitation, easements for ingress and egress to and from the parcels, reciprocal easements reasonably required to effect emergency and/or necessary repairs, the right to construct additional improvements (on the Adjacent Property) abutting the Building, the right, pursuant to this Section 6 to establish a new lot line within the north wall of the Building, the right to attach to existing electrical and plumbing utilities within the Building (provided such usage shall not increase Tenant's costs pursuant to the Lease), and such other connections with services, the Building, the Building Parcel, the Real Property, and/or utilities as are reasonably necessary to accommodate future development of the Adjacent Property; provided, however, in no event shall Tenant's existing parking rights at the Premises be adversely effected by such documentation (collectively, "Encumbrances").

7. Expansion Area Improvements/Early Occupancy.

(a) Landlord agrees to construct the Expansion Area Improvements pursuant to the terms and conditions of the Work Letter Agreement attached hereto as Exhibit B and incorporated herein by this reference. In addition to the foregoing, Landlord agrees to contribute the "Landlord Allowance" towards Tenant's construction of the "Freezer" (as such terms are defined in the Work Letter Agreement), toward the construction by Tenant of certain improvements in the Expansion Area pursuant to the terms and conditions of the Work Letter Agreement.

(b) Tenant shall be granted early occupancy of the Expansion Area for purposes of implementing the Freezer Installation and Expansion Area Improvements ("Early Occupancy"). The Early Occupancy shall be free of (i) Rent pursuant to Section 7 of the Lease, (ii) Operating Expenses pursuant to Section 15 of the Lease, (iii) cost for utilities, if any, pursuant to Section 11 of the Lease, and (iv) any costs specified in the Lease as additional Rent, but otherwise subject to all terms and conditions of the Lease.

8. Ratification. Except as modified by this Third Amendment, the Lease is ratified, affirmed, in full force and effect, and incorporated herein by this reference.

NOW, THEREFORE, the parties have executed this Third Amendment as of the date set forth below.

LANDLORD:                                    TENANT:

LOCKSLEY LANE INVESTORS, L.P.,               UNITED NATURAL FOODS, INC.,
a California limited partnership             a Delaware corporation


By: _________                                By: _________

Its: _________                               Its: _________

Date: _________                              Date: _________

EXHIBIT A

Expansion Area

                                    EXHIBIT B

Work Letter Agreement

Ladies and Gentlemen:

You (hereinafter called "Tenant") and we (hereinafter called "Landlord") are executing simultaneously with this Work Letter Agreement ("Agreement"), a written Third Amendment to Net Lease Agreement (the "Third Amendment") covering those certain premises more particularly described in Exhibit A to the Third Amendment (the "Expansion Area") in the building located in Auburn, California, and more particularly described in the Lease (as hereinafter defined).

To induce Tenant to enter into the Third Amendment (which is hereby incorporated by reference to the extent that the provisions of this Agreement may apply thereto) and in consideration of the mutual covenants hereinafter contained, Landlord and Tenant mutually agree as follows:

1. DEFINITIONS. Unless otherwise defined in this Agreement, the capitalized terms used herein shall have the meaning assigned to them in that certain Net Lease Agreement between Landlord's predecessor-in-interest and Tenant's predecessor-in-interest, dated December 31, 1996, as amended ("Lease").

2. REPRESENTATIVES. Landlord hereby appoints Paul O'Sullivan as Landlord's representative to act for Landlord in all matters covered by this Agreement. Tenant hereby appoints Michael Michel as Tenant's representative to act for Tenant in all matters covered by this Agreement. All inquiries, requests, instructions, authorizations and other communications with respect to the matters covered by this Agreement shall be related to Landlord's representative or Tenant's representative, as the case may be. Tenant will not make any inquiries of or request to, and will not give any instructions or authorizations to, any other employee or agent of Landlord, including Landlord's architects, engineers, and contractors or any of their agents or employees, with regard to matters covered by this Agreement. Either Landlord or Tenant may change its representative at any time by written notice to the other.

3. TENANT WORKING DRAWINGS. The working drawings for the improvements to the Expansion Area (the "Tenant Working Drawings"), describing the Expansion Area Improvements only, as approved by Landlord and Tenant are attached hereto as Exhibit B-1 and incorporated herein by this reference. Tenant's preparation or approval of the Tenant Working Drawings, and any other plans or specifications shall not constitute any representation as to the adequacy, efficiency, performance or desirability of any space plan or improvements.

4. EFFECT OF APPROVAL. Landlord's approval of the Tenant Working Drawings (initial or revised) will constitute acknowledgment that such drawings correctly depict the proper layout and design for any and all improvements to the Premises desired by Tenant. With respect to improvements affecting the shell of the Building, Landlord's approval of the Tenant Working Drawings shall not be unreasonably withheld. Landlord's approval of the Tenant Working Drawings will constitute authorization to Tenant to proceed with and complete construction of the Expansion Area Improvements in the Expansion Area. All of the work called for by the Tenant Working Drawings will be performed by one or more contractors engaged by Tenant. Tenant agrees to submit the Tenant Working Drawings to the appropriate governmental authorities for necessary approvals and building permits. Landlord shall submit to appropriate County authorities for approval, revised shell drawings indicating (i) the relocation of the compressor pad and
(ii) the in-filling of six (6) loading dock doors.

5. CHANGE ORDERS. Tenant may authorize changes in the work during construction of the Expansion Area Improvements only by written instructions to Landlord's representative on a form approved by Landlord. Changes that affect the shell of the Building in any way shall be subject to Landlord's prior written approval, which approval may be withheld for any reason or for no reason at all. Before commencing any change, Landlord will prepare and deliver to Tenant, for Tenant's approval, the change order

setting forth the cost of such change, which will include associated architectural, engineering and construction fees, if any, and the cost of such change for Landlord's contractor's overhead. If Tenant fails to approve such change order within three (3) days, Tenant will be deemed to have withdrawn the proposed change and Landlord will not proceed to perform that change. If Tenant timely approves such change order, Tenant will within ten (10) days of substantial completion of the Tenant Improvements pay to Landlord any amounts payable by Tenant in connection with the change orders provided for in this Paragraph.

6. TENANT'S INSTALLATION OF THE FREEZER. Tenant desires, through its subcontractor, to cause its subcontractors to install a certain freezer and refrigeration related improvements (collectively, "Freezer") into the Expansion Area. The installation of the Freezer with respect to the Expansion Area ("Freezer Installation") shall be pursuant to the provisions of Paragraphs 7, 8, 9, 10 and 11 of this Work Letter Agreement. Tenant acknowledges that the Freezer Installation will require modifications to the shell of the Building and neither such modifications, nor any improvements referenced in this Section 6 shall be within the definition of "Expansion Area Improvements."

(a) The plans and specifications and all design and construction relating to the Freezer Installation shall comply with all applicable statutes, ordinances, regulations, laws, codes and industry standards, including, but not limited to, requirements of Landlord's fire insurance underwriters.

(b) Tenant shall, at its own cost and expense, obtain all required permits with respect to the Freezer. Tenant's failure to obtain such permits shall not cause a delay in the Expansion Area Commencement Date or the obligation to pay Rent or any other obligations set forth in the Lease.

(c) Tenant's subcontractors shall be licensed contractors, possessing good labor relations, capable of performing quality workmanship and working in harmony with Landlord's contractors and subcontractors. All work shall be coordinated with any other construction or other work in the Building in order not to adversely affect construction work being performed by or for Landlord.

(d) Tenant shall use only new, first-class materials in the Freezer Installation. All work in connection with the Freezer Installation shall be done in a good and workmanlike manner.

(e) Tenant and Tenant's subcontractors shall make all efforts and take all steps appropriate to assure that all construction activities undertaken do not unreasonably interfere with the operation of the Building. In any event, Tenant shall comply with all reasonable rules and regulations existing from time to time at the Building. Tenant and Tenant's subcontractors shall take all precautionary steps to minimize dust, noise and construction traffic.

(f) Landlord shall have the right to order Tenant or its subcontractors if they violate the requirements imposed on Tenant or Tenant's subcontractors in performing work, to cease work and remove their equipment and employees from the Building. No such action by Landlord shall delay the Expansion Area Commencement Date or the obligation to pay Rent or any other obligations therein set forth.

(g) Utility costs or charges for any service (including HVAC, hoisting or freight elevator and the like) to the Expansion Area shall be the responsibility of Tenant from the date Tenant is obligated to commence or commences the Freezer Installation and shall be paid for by Tenant at Landlord's standard rates then in effect. Tenant shall apply and pay for all utility meters required. Tenant shall pay for all support services provided by Landlord's contractors at Tenant's request or at Landlord's discretion resulting from breaches or defaults by Tenant under this Work Letter Agreement. All use of freight elevators is subject to scheduling by Landlord and the rules and regulations of the Building. Tenant shall arrange and pay for removal of construction debris. If required by Landlord, Tenant shall sort and separate its waste and debris for recycling and/or environmental law compliance purposes.

(h) Tenant shall proceed with its work expeditiously, continuously and efficiently, and shall use its reasonable efforts to complete the same on or before thirty (30) days after the date Landlord tenders possession of the Expansion Area to Tenant for the Freezer Installation.

(i) Tenant shall furnish to Landlord "as-built" drawings of the Freezer Installation within thirty (30) days after completion of the Freezer Installation.

7. INSURANCE AND INDEMNIFICATION. Tenant's obligation to procure insurance, set forth in Section 21 of the Lease, and Tenant's indemnification, hold harmless and defense obligations, set forth in Section 19 of the Lease, shall apply to all construction activities concerning the Freezer installation done by Tenant, its agents, employees, contractors and/or subcontractors.

8. COST OF FREEZER INSTALLATION. In connection with the Freezer Installation to be performed by Tenant, Landlord shall contribute an amount equal to Twenty Thousand and No/100ths Dollars ($20,000.00) ("Landlord Allowance"). The balance, if any, of the cost in completing the Freezer Installation ("Above-Allowance Work"), including, but not limited, to the cost of overhead, supervision and profit, shall be paid by Tenant. A schedule of the estimated costs to complete the Freezer Installation is attached hereto Exhibit B-2. The Landlord Allowance shall be paid to Tenant upon completion of the Freezer Installation and Tenant's satisfaction of all requirements set forth in this Work Letter Agreement. Tenant shall not be entitled to any payment or credit in the event that the cost of the Freezer Installation is less than the Landlord Allowance.

9. LANDLORD ALLOWANCE; EXCESS AMOUNTS. Upon completion of the Freezer Installation, Tenant shall furnish Landlord with full and final waivers of liens and contractors' affidavits and statements, in such form as may be required by Landlord, Landlord's title insurance company and Landlord's construction or permanent lender, if any, from all parties performing labor or supplying materials or services in connection with the Freezer Installation showing that all of said parties have been compensated in full and waiving all liens in connection with the Building and the Expansion Area. Tenant shall submit to Landlord a detailed breakdown of Tenant's total construction costs, together with such evidence of payment as is reasonably satisfactory to Landlord.

10. ALTERATIONS. Any alterations or improvements described by Tenant after Landlord's delivery of the Expansion Area shall be subject to the provisions of the Lease.

If the foregoing correctly sets forth our understanding, please sign this Agreement where indicated below.

LANDLORD:                                  TENANT:

LOCKSLEY LANE INVESTORS, L.P.,             UNITED NATURAL FOODS, INC.,
a California limited partnership           a Delaware corporation


By: _________                              By: _________

Its: _________                             Its: _________

Date: _________                            Date: _________

FOURTH AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)

This Fourth Amendment to Net Lease Agreement ("Fourth Amendment"), dated for reference purposes as December 15, 1999, is entered into by and between LOCKSLEY LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED NATURAL FOODS, INC., a Delaware corporation ("Tenant").

Recitals

On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's predecessor-in-interest entered into that certain Net Lease Agreement ("Original Lease") concerning the lease of the "Premises," within the "Building," located at 12600 Earhart Avenue, Auburn, California, both of which are more particularly described in the Original Lease.

On or about August 11, 1998, Landlord and Tenant amended the provisions of the Original Lease pursuant to that certain First Amendment to Net Lease Agreement ("First Amendment"). On or about June 14, 1999, Landlord and Tenant further amended the provisions of the Original Lease pursuant to that certain Second Amendment to Net Lease Agreement ("Second Amendment"). On or about September 27, 1999, Landlord and Tenant further amended the provisions of the Original Lease pursuant to that certain Third Amendment to Net Lease Agreement ("Third Amendment"). The Original Lease, as amended by the First Amendment, the Second Amendment and the Third Amendment, is hereinafter referred to as the "Lease."

Landlord and Tenant now desire to amend the terms and conditions of the Lease in accordance with the provisions of this Fourth Amendment.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, the parties agree as follows:

Agreement

Definitions. Unless otherwise specified herein, all capitalized terms used in this Fourth Amendment are used as defined in the Lease.

Effective Date. This Fourth Amendment shall become effective on the date it is executed by both the Landlord and Tenant, which date is hereinafter referred to as the "Effective Date."

Expansion of Premises. Tenant desires to expand the Premises to include all of the approximately two and one-half (2-1/2) acres of real property and related improvements ("Expansion Land") located adjacent to the Premises and more particularly identified as the cross-hatched portion of the parcel shown on the Site Plan attached hereto as Exhibit A and incorporated herein by this reference. Pursuant to the terms and conditions of the Third Amendment, Landlord and Tenant agreed that the parcel of real property upon which the Building is constructed may be subdivided pursuant to the "Lot Split" more particularly set forth in Section 6 of such Third Amendment. In lieu of such Lot Split, Landlord and Tenant now agree that the "Real Property" shall remain one (1) separate legal parcel and Tenant will lease from Landlord all of such "Real Property" together with all improvements constructed thereon. Landlord hereby leases to Tenant the Expansion Land upon the terms and conditions set forth in this Fourth Amendment.

Expansion Land Term. The Commencement Date of the Lease with respect to the Expansion Land ("Expansion Land Commencement Date") shall be December 1, 1999. The expiration date of the Lease with respect to the Expansion Land shall be September 26, 2009, which date is coterminous with the termination of the Lease with respect to the Premises.

Base Rent. The Base Rent with respect to the Expansion Land shall be Six Thousand Four Hundred Sixteen and 67/100ths Dollars ($6,416.67) per month, which amount shall be adjusted concurrent with the scheduled adjustments pursuant to
Section 7 of the Original Lease.

Operating Expenses, Taxes and Utilities. Tenant shall be responsible for one hundred percent (100%) of all Operating Expenses, Taxes and Utilities and shall be responsible for procuring and maintaining all utilities and services contemplated by the Original Lease attributable to the Expansion Land.

Use of Expansion Land. Tenant is permitted to use the Expansion Land only for those purposes specifically allowed under the Lease in connection with its operations on the Premises, which uses shall be subject to the approval of all governmental agencies having jurisdiction over the Expansion Land. All construction upon the Expansion Land shall be at the sole cost and expense of Tenant, together with the cost of obtaining all permits in connection therewith. Landlord agrees to cooperate with Tenant, at no cost to Landlord, in connection with Tenant's obtaining of necessary permits. Tenant shall obtain the written consent of Landlord, which shall not be unreasonably withheld, prior to commencement of any construction of improvements upon the Expansion Land and all such construction shall be performed in accordance with the requirements of
Section 14 of the Original Lease. Subject to the foregoing requirements, Tenant shall have the right to construct improvements, including buildings, upon the Expansion Land which do not adversely affect the Building or its operations.

Section 41 of the Original Lease, Option to Purchase. Landlord and Tenant hereby agree that the "Purchase Price" contemplated pursuant to Exhibit C of the Original Lease is amended to Five Million Five Hundred Fifty Thousand and No/100ths Dollars ($5,550,000.00) (which amount has been increased by the sum of Seven Hundred Thousand and No/100ths Dollars ($700,000.00) to include the purchase and sale of the Expansion Land). As a material part of the consideration for Tenant's agreement to enter into this Fourth Amendment, Landlord has agreed to reduce such Purchase Price by Twenty-Five Thousand and No/100ths Dollars ($25,000.00), for a total Purchase Price of Five Million Five Hundred Twenty-Five Thousand and No/100ths Dollars ($5,525,000.00). The Purchase Price set forth in this Section 8, shall be inclusive of the Premises and the Expansion Land, collectively. Nothing contained herein shall in any manner amend the "Option Date" set forth in Section 41 of the Original Lease. In no event shall Tenant have the right to exercise the "Option" with respect to any lesser portion of the Real Property other than the entire legal parcel containing the Premises and the Expansion Land.

Purchase Agreement. Landlord and Tenant hereby acknowledge and agree that the "Purchase Agreement" referenced in Section 41 and attached as Exhibit C, to the Original Lease, is deleted in its entirety and replaced with the Purchase Agreement attached hereto as Exhibit B and incorporated herein by this reference.

Ratification. Except as modified by this Fourth Amendment, the Lease is ratified, affirmed, in full force and effect, and incorporated herein by this reference.

NOW THEREFORE, the parties have executed this Fourth Amendment as of the date set forth below.

LANDLORD:                                   TENANT:


LOCKSLEY LANE INVESTORS, L.P.,              UNITED NATURAL FOODS, INC.,
a California limited partnership            a Delaware corporation


By: _____________________________          By: ____________________________

Its: ____________________________          Its: ___________________________

Date: ___________________________          Date: __________________________

EXHIBIT A

Site Plan of Expansion Land

EXHIBIT B

Agreement of Purchase and Sale

(12600 Locksley Lane, Auburn, California)

This Agreement of Purchase and Sale ("Agreement"), dated for reference purposes only ______________, is entered into by and between LOCKSLEY LANE INVESTORS, L.P., a California limited partnership, ("Seller"), and UNITED NATURAL FOODS, INC., a Delaware corporation ("Buyer").

Recitals

Seller is the owner of certain real property ("Real Property"), located in Auburn ("City"), Placer County ("County"), California ("State"), more particularly described on Exhibit A attached hereto.

The Real Property has constructed thereon a certain building, containing approximately one hundred thousand (100,000) gross square feet ("Improvements"). The Real Property and Improvements are collectively referred to as the "Project," which is commonly known as "12600 Locksley Lane, Auburn, California."

The Real Property, Improvements, Personal Property (as hereinafter defined), and Seller's interest in the Lease and Service Contracts (each of which are hereinafter defined) are hereinafter collectively referred to as the "Property."

Buyer's predecessor-in-interest, as tenant, and Seller's predecessor-in-interest, as Landlord, prior to the Effective Date, have entered into a certain Net Lease Agreement ("Original Lease") dated December 31, 1996. This Original Lease was thereafter amended by that certain (i) First Amendment to Net Lease ("First Amendment to Net Lease") dated August 11, 1998, (ii) Second Amendment to Net Lease "Second Amendment to Net Lease") dated June 14, 1999,
(iii) Third Amendment to Net Lease ("Third Amendment to Net Lease") dated September 27, 1999, (iv) Fourth Amendment to Net Lease ("Fourth Amendment to Net Lease") dated December 15, 1999, and (iv) Fifth Amendment to Net Lease and Acknowledgment ("Fifth Amendment to Net Lease") dated December 16, 1999.

Buyer desires to purchase from Seller and Seller desires to sell to Buyer the Property pursuant to the provisions of this Agreement.

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

Agreement

Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property on the terms and subject to the conditions set forth in this Agreement. For the purposes of this Agreement, the date which the last party executes this Agreement and delivers it to the other party shall hereinafter be referred to as the "Effective Date."

Purchase Price. The purchase price ("Purchase Price") for the Property shall be Five Million Five Hundred Twenty-Five Thousand and No/100ths Dollars ($5,525,000.00).

Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows:

Initial Deposit. On or before the fifth (5th) day following the Effective Date, Buyer shall deposit with Stewart Title of Sacramento ("Escrow Holder") the amount of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) ("Initial Deposit"). The Initial Deposit shall be invested by Escrow Holder with a financial institution acceptable to Seller in a federally-insured interest-bearing demand account, and the Initial Deposit, and all interest accrued thereon, shall be credited to the Purchase Price upon the Close of Escrow.

Final Deposit. On or before the expiration of the Contingency Period (as hereinafter defined), unless this Agreement has been previously terminated by Buyer pursuant to its rights set forth in this Agreement, Buyer shall deposit with Escrow Holder the amount of One Hundred Thousand and No/100ths Dollars ($100,000.00) ("Final Deposit"). Upon Buyer's delivery of the Final Deposit to Escrow Holder, (i) the Final Deposit shall be invested by Escrow Holder in the interest-bearing account as is required for the Initial Deposit in Section 3(a) above, (ii) the Initial Deposit and the Final Deposit (collectively, "Deposit"), totaling One Hundred Twenty-Five Thousand and No/100ths Dollars ($125,000.00), and all interest accrued thereon, shall be credited to the Purchase Price at Close of Escrow, and (iii) the Deposit shall become non-refundable, become the sole and absolute property of Seller, except as otherwise provided herein.

Cash at Close of Escrow. On or before the Close of Escrow, Buyer shall deposit with Escrow Holder the remaining portion of the Purchase Price, in immediately available funds, which shall be paid to Seller at Close of Escrow.

Escrow.

Opening of Escrow. Within two (2) days following the Effective Date, Buyer shall open an escrow ("Escrow") with Escrow Holder. Buyer and Seller agree to execute and deliver to Escrow Holder, in a timely manner, all escrow instructions necessary to consummate the transaction contemplated by this Agreement. Any such instructions shall not conflict with, amend or supersede any portion of this Agreement. If there is any inconsistency between such instructions and this Agreement, this Agreement shall control.

Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be defined as the date that the Grant Deed (as hereinafter defined) is recorded in the Official Records of the County. The Close of Escrow shall occur on or before fifteen (15) days following the expiration of the Contingency Period, unless extended by the mutual written consent of the parties.

Conditions of Title. It shall be a condition to the Close of Escrow that title to the Project be conveyed to Buyer by Seller by a Grant Deed, which shall be in the form customarily used by Escrow Holder in the County ("Grant Deed"), subject only to (a) a lien to secure payment of real estate taxes, not yet due and payable; (b) the lien of supplemental taxes, not yet due and payable; (c) exceptions which are approved and/or accepted by Buyer in writing in accordance with this Agreement; and (d) all applicable laws, ordinances, rules and governmental regulations (including, but not limited to those relative to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property, and (e) those title exceptions set forth in the Preliminary Report ("Preliminary Report"), dated ______________, Order no. ______, issued by Escrow Holder [to be approved by Buyer], excepting exception numbers ________, which shall be removed by Seller at Close of Escrow (collectively, "Approved Conditions of Title").

Conditions to Close of Escrow.

Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligations to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions (or Buyer's written waiver thereof) which are for Buyer's sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Close of Escrow in absence of a specified date:

Inspections and Studies. For a period of thirty (30) days following the Effective Date ("Contingency Period"), Buyer shall have the right to review and approve the (A) Documents and Materials (as hereinafter defined), and (B) conduct any and all inspections, investigations, tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies, soils, seismic and geologic reports and environmental testing) with respect to the Property as Buyer may elect to make or maintain. Prior to the expiration of the Contingency Period, Buyer shall deliver to Seller and Escrow Holder written notice of its approval or disapproval, which shall be made in Buyer's sole and absolute discretion, of the Property and the Documents and Materials. The failure of Buyer to deliver such notice prior to the expiration of the Contingency Period shall be deemed to constitute Buyer's disapproval of such matters, in which case the Agreement shall be canceled pursuant to the provisions of this Section. The cost of any such inspections, tests and/or studies shall be borne by Buyer. Between the Effective Date and the Close of Escrow, Buyer, its agents, contractors and subcontractors shall have the right to enter upon the Project at reasonable times during ordinary business hours to make any and all inspections and tests as may be necessary or desirable in Buyer's sole judgment and discretion. Buyer shall use its good faith efforts not to interfere with the use of the Improvements by the Tenants (as hereinafter defined). Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller) and hold Seller, its agents, employees, trustee, directors and officers, and the Property harmless from any and all damage arising out of or in connection with such entry and/or activities upon the Project by Buyer, its agents, employees or contractors. In the event Buyer disapproves or is deemed to have disapproved of the condition of the Property and/or the Documents and Materials prior to the expiration of the Contingency Period, except as otherwise provided herein, the parties shall have no further obligations under this Agreement, all monies delivered to Escrow Holder by Buyer shall be immediately returned to Buyer, and Buyer shall deliver to Seller copies of any and all reports, studies, inspections, or other materials Buyer caused to be prepared pursuant to its inspection right set forth in this Section.

Title Insurance. As of the Close of Escrow, Title Company (as hereinafter defined) shall have issued or shall have committed to issue the Title Policy (as hereinafter defined) to Buyer.

Seller's Obligations. As of the Close of Escrow, Seller shall have performed all of the obligations required to be performed by Seller under this Agreement.

Seller's Representations. As of the Close of Escrow, all representations and warranties made by Seller to Buyer in this Agreement shall be true and correct.

Conditions to Seller's Obligations. The Close of Escrow and Seller's obligations to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Seller's waiver thereof) which are for Seller's sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Close of Escrow in absence of a specified date:

Buyer's Obligations. As of the Close of Escrow, Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer.

Buyer's Representations. As of the Close of Escrow, all representations and warranties made by Buyer to Seller in this Agreement shall be true and correct as of the Close of Escrow.

Failure of Condition to Close of Escrow. Except as provided in Section 6(a) or
6(b), in the event any of the conditions set forth in Section 6(a) or 6(b) are not timely satisfied or waived by the appropriate benefited party, for a reason other than the default of Buyer or Seller, this Agreement shall terminate, and if applicable, the Deposit, and all interest accrued thereon, and all other monies delivered to Escrow Holder by Buyer shall be immediately be returned to Buyer, and, except as otherwise provided herein, the parties shall have no further obligations hereunder.

Deposits By Seller. Unless otherwise provided in this Section, at least one (1) business day prior to the Close of Escrow, Seller shall deposit with Escrow Holder the following documents:

Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by Seller, conveying fee title to the Project to Buyer subject only to the Approved Conditions of Title.

FIRPTA Certificate. A certification, acceptable to Escrow Holder and duly executed by Seller under penalty of perjury setting forth Seller's address and federal tax identification number in accordance with and/or for the purpose of the provisions of Sections 7701 and 1445, as may be amended, of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

California Franchise Tax Withholding. Evidence satisfactory to Buyer and Escrow Holder that Seller is exempt from the provisions of the withholding requirements of the California Revenue and Taxation Code, as amended, and that neither Buyer nor Escrow Holder is required to withhold any amounts from the Purchase Price pursuant to such provisions.

Bill of Sale. A bill of sale ("Bill of Sale") duly executed and acknowledged by Seller in favor of Buyer, assigning and conveying to Buyer all of Seller's right, title and interest in and to the Personal Property. The Bill of Sale shall be in the form of, and upon the terms contained in, Exhibit B attached hereto.

General Assignment. An assignment ("General Assignment"), duly executed by Seller, assigning to Buyer all of Seller's right, title and interest in the Service Contracts. The General Assignment shall be in the form of, and upon the terms contained in, Exhibit D attached hereto.

Service Agreements. The original Service Agreements.

Keys. Keys to all entrance doors to the Improvements and keys to all Personal Property located on the Project, which keys shall be properly tagged for identification.

Deposits By Buyer. At least one (1) business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder (a) the required funds which are to be applied towards the payment of the Purchase Price; (b) a counterpart of the Bill of Sale executed and acknowledged by Buyer; and (c) a counterpart of the General Assignment executed and acknowledged by Buyer.

Issuance of Title Insurance. At the Close of Escrow, Escrow Holder's title insurer ("Title Company"), shall issue to Buyer its standard form California Land Title Association ("CLTA") Owner's Policy of Title Insurance showing fee title to the Project vested in Buyer subject only to the Approved Conditions of Title ("Title Policy"). The Title Policy shall be issued with liability in an amount equal to the Purchase Price. Seller shall pay for the expense of the Title Policy. If Buyer elects to have Title Company issue its American Land Title Association ("ALTA") Owner's Policy of Title Insurance, Buyer shall pay for the expense of such ALTA premium increment, any endorsement thereto and any survey costs.

Costs and Expenses. Except as otherwise specified in this Agreement, Seller and Buyer shall equally divide (a) all escrow fees and costs; (b) any document recording charges; and (c) documentary transfer tax charged by the County and any other transfer tax charged by the City. All other costs and expense of escrow and title shall be shared pursuant to the custom in the County. Buyer and Seller shall each pay all legal and professional fees and fees of other consultants incurred by Buyer and Seller, respectively.

Prorations.

Revenues. Rentals, revenues, and other income, if any, from the Property, and any form operating expenses pass-throughs relating to the Leases, if any, affecting the Property shall be prorated as of 11:59 p.m. on the day following the Close of Escrow. "Rentals" as used herein include fixed monthly rentals, additional rentals, percentage rentals, escalation rentals, retroactive rentals, and any other sums and charges payable by Tenants under the Leases.

Taxes/Assessments. All non-delinquent real estate taxes on the Project shall be prorated as of 11:59 p.m. on the day following the Close of Escrow based on the actual current tax bill, but if such tax bill has not yet been received by Seller by the Close of Escrow, then the current year's taxes shall be deemed to be one hundred two percent

(102%) of the amount of the previous year's tax bill for the Project. All delinquent taxes and all assessments, if any, on the Project shall be paid at the Close of Escrow from funds accruing to Seller.

Other Expenses. All other expenses for the Property shall be prorated as of 11:59 p.m. on the day following to the Close of Escrow between the parties based upon the latest available information.

Corrections. If any errors or omissions are made regarding adjustments and prorations as set forth herein, the parties shall make the appropriate corrections promptly upon discovery thereof. If any estimates are made at the Close of Escrow regarding adjustments or prorations, the party shall make the appropriate correction promptly when accurate information becomes available. Any corrected adjustment or proration shall be paid in cash to the party entitled thereto.

Seller's Representations and Warranties. In consideration of Buyer entering into this Agreement, Seller makes only the representations and warranties set forth in this Section, which are material and are being relied upon by Buyer (the continued truth and accuracy of which shall constitute a condition precedent to Buyer's obligations hereunder). For the purpose of this Agreement, usage of "to the best of Seller's knowledge," or words to such effect, shall mean the actual knowledge of Benjamin S. Catlin, as the Managing Member of the General Partner of Seller, without any independent duty or inquiry or investigation existing as of the Effective Date.

(a) To the best of Seller's knowledge, the original construction of all improvements constructed by Seller (collectively, "Seller Improvements") complied with all then existing applicable laws, ordinances, regulations, resolutions and other governmental requirements;

(b) To the best of Seller's knowledge, all permit, mitigation, utility and similar fees required to be paid in connection with the construction of the Seller Improvements have been paid;

(c) To the best of Seller's knowledge, there is presently no claim, litigation, proceeding or governmental investigation pending or, to the best of Seller's knowledge, threatened against or relating to the Property or the transaction contemplated hereby. Seller shall give Buyer prompt notice of such claim, litigation, proceeding or investigation which becomes known to it prior to the Close of Escrow;

(d) To the best of Seller's knowledge, no uncured notice of violation of any applicable zoning regulation or ordinance or other law, order, ordinance, permit, rule, regulation or requirements, or any covenants, conditions or restrictions affecting or relating to the use or occupancy of the Property has been given to Seller by any governmental agency having jurisdiction or by any other person entitled to enforce the same;

(e) To the best of Seller's knowledge, there is no pending or, to the best of Seller's knowledge, contemplated condemnation of the Property or any part thereof; and

(f) To the best of Seller's knowledge, the closing of the sale contemplated by this Agreement will not constitute or result in any default or event that, with notice or lapse of time, or both, would be a default, breach or violation of any lease, mortgage, deed of trust, covenant or other agreement, instrument or arrangement by which Seller or the Property is bound.

Review of Documents and Materials. Within five (5) calendar days following the Effective Date, Seller shall deliver to Buyer, all documents and materials (collectively, "Documents and Materials") relating to the Property to the extent in Seller's possession; provided, however, in no event shall Seller be required to disclose any "attorney-client" privileged information or internal appraisals. Seller makes no representation or warranty regarding the truth or accuracy of the Documents and Materials.

Condition and Inspection of Property. Except as provided in this Agreement, Seller makes no representation or warranty regarding the condition of the Property, its past use, or its suitability for Buyer's intended use, and the Property is sold AS-IS, WHERE-IS, WITH ALL FAULTS, AND THERE IS NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE PROPERTY. Buyer is relying solely upon, and as of the expiration of the Contingency Period shall have conducted its own independent inspection, investigation, and analysis of the Property as it deems necessary or appropriate in so acquiring the Property from Seller, including, without limitation, any and all matters concerning the condition, use and/or sale of the Property.

Liquidated Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE REMOVED BY THE SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT, AND THAT IF THIS AGREEMENT IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER. THE PARTIES HAVE DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER AS A RESULT OF ANY SUCH DEFAULT IS DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS AGREEMENT AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE PARTIES AGREE THAT IF THIS PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN OF THE DEPOSIT, AS LIQUIDATED DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY. NOTHING CONTAINED HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE BY SELLER PURSUANT TO AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR INDEMNIFICATION PROVISION HEREOF.

Seller ______ Buyer ______

Condemnation and Destruction.

Eminent Domain or Taking. If, prior to the Close of Escrow, any material portion of the Real Property or Improvements is taken by eminent domain or otherwise, Seller shall immediately notify Buyer of such fact. If such taking is "material," Buyer shall have the option, in its reasonable discretion, to terminate this Agreement upon written notice to Seller given not later than ten
(10) days after receipt of Seller's notice. If this Agreement is terminated pursuant to this Section, the provisions of Section 6(c) shall govern. If Buyer does not exercise this option to terminate this Agreement, or if there has not been a material taking by eminent domain or otherwise to give rise to such option, neither party shall have the right to terminate this Agreement, but the Seller shall assign and turn over, and the Buyer shall be entitled to receive and keep, all awards for the taking by eminent domain which accrue to Seller and the parties shall proceed to the Close of Escrow pursuant to the terms hereof, without modification of the terms of this Agreement and without any reduction in the Purchase Price. For the purpose hereof, "material" shall be deemed to be any diminution in the value of the Property as a result of a taking by eminent domain or otherwise which exceeds Fifty Thousand and No/100ths Dollars ($50,000.00), as determined by Seller using its good faith judgment.

Fire or Casualty. Prior to the Close of Escrow, the entire risk of loss or damage by earthquake, flood, landslide, fire or other casualty shall be borne and assumed by Seller, except as otherwise provided in this Section. If, prior to the Close of Escrow, any part of the Improvements are damaged or destroyed by earthquake, flood, landslide, fire or other casualty, Seller shall immediately notify Buyer of such fact. If such damage or destruction is "material", Buyer shall have the option to terminate this Agreement upon written notice to the Seller given not later than ten (10) days after receipt of Seller's notice. For purposes hereof, "material" shall be deemed to be any uninsured damage or destruction to the Project or any insured damage or destruction where the cost of repair or replacement is estimated to be Fifty Thousand Dollars ($50,000.00) or more or shall take more than ninety (90) days to repair, in Seller's good faith judgment; provided, however, in the case of uninsured damage or destruction, Seller may, at Seller's option, elect to repair such damage and destruction and keep this Agreement in full force and effect so long as such repair can be and is completed by Seller prior to the Close of Escrow. If this Agreement is so terminated, the provisions of Section 6(c) shall govern. If Buyer does not exercise this option to terminate this Agreement, or if the casualty is not material, neither party shall have the right to terminate this Agreement but Seller shall assign and turn over, and Buyer shall be entitled to receive and keep, all insurance proceeds payable to it with respect to such destruction, and the parties shall proceed to the Close of Escrow pursuant to the terms hereof without modification of the terms of this Agreement and without any reduction in the Purchase Price.

Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or sent by electronic facsimile and shall be deemed

received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if mailed, on the date of posting by the United States Post Office, or (iii) if given by electronic facsimile, when received by the other party.

TO BUYER:                                   United National Foods, Inc.
                                            12745 Earhart Avenue
                                            Auburn, California 95602
                                            Telephone: ______________
                                            Facsimile: ______________
                                            Attention: ______________

TO SELLER:                                  Locksley Lane Investors, L.P.
                                            3620 Fair Oaks Boulevard, Suite 150
                                            Sacramento, California
                                            Telephone: (916) 920-4400
                                            Facsimile: (916) 920-0854
                                            Attention: Benjamin S. Catlin and
                                                               Paul O'Sullivan

WITH COPY TO:                               Trainor Robertson
                                            701 University Avenue, Suite 200
                                            Sacramento, California 95825
                                            Telephone: (916) 929-7000
                                            Facsimile: (916) 929-7111
                                            Attention: Jay Heckenlively

TO ESCROW HOLDER:                           Stewart Title of Sacramento
                                            555 Capitol Mall, Suite 280
                                            Sacramento, California  95814
                                            Telephone: (916) 441-4950
                                            Facsimile: (916) 444-8691
                                            Attention: Vince Balbi

Notice of change of address shall be given by written notice in the manner described in this Section.

Brokers. The parties acknowledge and agree that there is no real estate broker involved in this transaction.

Exchange. The parties to this Agreement acknowledge that either party may desire to structure the sale and/or the purchase of the Property as an exchange for like-kind property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, in order to defer recognition of income from the disposition of the Property and other properties. The parties agree to reasonably cooperate with each other to accomplish such exchange(s) and each party hereby agrees that any and all costs associated with said exchange shall be borne solely by the exchanging party and shall in no way be attributable to the non-exchanging party. In no event shall the non-exchanging party be required to take title to the exchanged property(ies) to effectuate the tax deferred exchange contemplated by this Section.

Purchase Rights in Lease. The parties agree that, as of the Effective Date, this Agreement replaces and supersedes, in total, any right of the Buyer, as "Tenant," to acquire fee title to the Property pursuant to the Lease, which purchase rights are hereby deleted in their entirety from the Lease; provided, however, in the event that Seller defaults under this Agreement, the provisions of this Section 20 shall be ineffective.

Miscellaneous.

Partial Invalidity. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid, and shall be enforced to the fullest extent permitted by law.

Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of time for performance of any other obligation or act except those of the waiving party, which shall be extended by a period of time equal to the period of the delay.

Survival of Representations. The indemnification, defense and hold harmless obligations, and the representations and warranties made by each party herein shall survive (1) the Close of Escrow and shall not merge into the Grant Deed and the recordation thereof, and (2) the termination and/or cancellation of this Agreement.

Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the parties hereto.

Professional Fees. If either party commences an action against the other to interpret or enforce any of the terms of this Agreement or because of the breach by the other party of any of the terms hereof, the losing party shall pay to the prevailing party reasonable attorneys' fees, costs and expenses and court costs and other costs of action incurred in connection with the prosecution or defense of such action, whether or not the action is prosecuted to a final judgment. For the purpose of this Agreement, the terms "attorneys' fees" or "attorneys' fees and costs" shall mean the fees and expenses of counsel to the parties hereto, which may include printing, photostating, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals, librarians and others not admitted to the bar but performing services under the supervision of an attorney. The terms "attorneys' fees" or "attorneys' fees and costs" shall also include, without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. The term "attorney" shall have the same meaning as the term "counsel."

Entire Agreement. This Agreement (including all Exhibits attached hereto) is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented, superseded, canceled or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto and lawful assignees.

Assignment. Buyer may not assign its right, title or interest in this Agreement to any other party without the prior written consent of Seller, which determination may be withheld in Seller's sole and absolute discretion. Any attempted assignment without the prior written consent of Seller shall be void and be deemed a default of Buyer hereunder. Any permitted assignment shall not relieve the assigning party from any liability under this Agreement.

Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a material breach of and a non-curable (but waivable) default under this Agreement by the party so failing to perform.

Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed by the parties to create the relationship of principal and agent, a partnership, joint venture or any other association between Buyer and Seller.

Construction. Headings at the beginning of each paragraph and subparagraph are solely for the convenience of the parties and are not a part of the Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs, sections, subparagraphs and subsections are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated by this reference.

Governing Law. The parties hereto acknowledge that this Agreement has been negotiated and entered into in the State of California. The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.

Possession of Property. Buyer shall be entitled to the possession of the Property immediately following the Close of Escrow.

Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

Days of Week. If any date for performance herein falls on a Saturday, Sunday or holiday, as defined in Section 6700 of the California Government Code, the time for such performance shall be extended to 5:00 p.m. on the next business day.

Representation by Counsel. Notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty shall not be construed against either Seller or Buyer based upon authorship of any of the provisions hereof. Seller and Buyer each hereby warrant, represent and certify to the other as follows:
(a) that the contents of this Agreement have been completely and carefully read by the representing party and counsel for the representing party; (b) that the representing party has been separately represented by counsel and the representing party is satisfied with such representation; (c) that the representing party's counsel has advised the representing party of, and the representing party fully understands, the legal consequences of this Agreement; and (d) that no other person (whether a party to this Agreement or not) has made any threats, promises or representations of any kind whatsoever to induce the execution hereof, other than the performance of the terms and provisions hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below.

BUYER:                                     SELLER:

UNITED NATIONAL FOODS, INC.,               LOCKSLEY LANE INVESTORS, L.P.,
a Delaware corporation                     a California limited partnership


By: _____________________________          By: ______________________________


Its: ____________________________          Its: _____________________________


Date: ___________________________          Date: ____________________________

FIFTH AMENDMENT TO NET LEASE AGREEMENT AND ACKNOWLEDGMENT

(Auburn, California)

This Fifth Amendment to Net Lease Agreement and Acknowledgment ("Fifth Amendment") is made as of December 16, 1999, with reference to that certain Net Lease Agreement ("Original Lease") by and between the predecessor-in-interest to Locksley Lane Investors, L.P., a California limited partnership ("Landlord"), and the predecessor-in-interest to United Natural Foods, Inc., a Delaware corporation ("Tenant"), regarding those certain premises within the building ("Building") located at 12600 Earhart Avenue, Auburn, California, both of which are more particularly described in the Original Lease.

The undersigned hereby confirm the following and the provisions of the Lease (as hereinafter defined) are amended hereby:

On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's predecessor-in-interest entered in the Original Lease, as was subsequently amended by that certain First Amendment to Net Lease Agreement dated on or about August 11, 1998 ("First Amendment"), that certain Second Amendment to Net Lease Agreement dated June 14, 1999 ("Second Amendment"), that certain Third Amendment to Net Lease Agreement dated on or about September 27, 1999 ("Third Amendment") and that certain Fourth Amendment to Net Lease Agreement dated December 15, 1999 ("Fourth Amendment"). The Original Lease, as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment, is collectively referred to as the "Lease."

Pursuant to the terms and conditions of the Original Lease, Tenant has leased from Landlord sixty-two thousand eight hundred seventy-five (62,875) usable and rentable square feet within the Building ("Original Premises"). Pursuant to the terms and conditions of the Third Amendment, Tenant has leased from Landlord the remaining thirty-seven thousand one hundred twenty-five (37,125) usable and rentable square feet within the Building ("Expansion Area"). Pursuant to the terms and conditions of the Fourth Amendment, Tenant has leased from Landlord approximately two and one-half (2 1/2) acres of real property ("Expansion Land") located adjacent to the Original Premises. The Original Premises, the Expansion Area and the Expansion Land (collectively, "Premises") constitute one hundred thousand (100,000) usable and rentable square feet and equal the entire usable and rentable area of the Building, together with the two and one-half (2 1/2) acres of land located adjacent thereto.

The "Commencement Date" with respect to the Original Premises occurred on September 27, 1999. The "Commencement Date" with respect to the Expansion Area shall occur on November 27, 1999. The "Commencement Date" with respect to the Expansion Land shall occur on December 1, 1999. Unless sooner terminated, the expiration date of the term of the Lease with respect to the Original Premises and the Expansion Area and the Expansion Land is September 26, 2009.

Tenant acknowledges that the Premises are as represented by Landlord, in good condition and repair; and the improvements required to be constructed for Tenant by Landlord pursuant to the requirements of the Lease have been so constructed and are satisfactorily completed in all respects excepting only those items ("Punchlist Items") listed on Exhibit A attached hereto and incorporated herein by this reference.

All conditions which are to be satisfied prior to the full effectiveness of the Lease have been satisfied and Landlord has fulfilled all of its duties of an inducement nature.

The Lease is in full force and effect and it represents the entire agreement between Landlord and Tenant concerning Tenant's lease of the Premises.

To the best of Tenant's knowledge, there are no existing defenses which Tenant has against the enforcement of the Lease by Landlord, and no offsets or credits against any amounts owed by Tenant exist pursuant to the Lease. Tenant has no claims or defenses against Landlord concerning the dates upon which the "Commencement Date" occurred with respect to either the Original Premises or the Expansion Area.

Tenant's obligations to pay "Base Rent" for the Original Premises in the amount of Twenty-Three Thousand Five Hundred Seventy-Eight and 12/100ths Dollars ($23,578.12) per month shall commence to accrue on November 27, 1999. Notwithstanding the foregoing sentence, Tenant's obligations to pay the costs of maintenance, repair and replacements and obligations with respect to the Project Common Areas, the Building, and all Operating Expenses, Taxes and Utilities and all other additional Rent required pursuant to the Lease, commenced to accrue with respect to the Original Premises on September 27, 1999.

Tenant's obligations to pay "Base Rent" for the Expansion Area in the amount of Thirteen Thousand Nine Hundred Twenty-One and 88/100ths Dollars ($13,921.88) per month shall commence to accrue on November 27, 1999. Tenant's obligations to pay the costs of maintenance, repair and replacements and obligations with respect to the Project Common Areas, the Building, and all Operating Expenses, Taxes and Utilities and all other additional Rent required pursuant to the Lease, shall commence to accrue with respect to the Expansion Area on November 27, 1999.

Tenant's obligations to pay "Base Rent" for the Expansion Land in the amount of Six Thousand Four Hundred Sixteen and 67/100ths Dollars ($6,416.67) per month shall commence to accrue on December 1, 1999. Tenant's obligations to pay the costs of maintenance, repair and replacements and obligations with respect to the Project Common Areas, the Building, the Expansion Land and all Operating Expenses, Taxes and Utilities and all other additional Rent required pursuant to the Lease, shall commence to accrue with respect to the Expansion Land on December 1, 1999.

Pursuant to the provisions of Section 8, Section 9 and Section 10 above, commencing upon December 1, 1999, Tenant shall be obligated to pay Base Rent for the Premises in the amount of Forty-Three Thousand Nine Hundred Sixteen and 67/100ths Dollars ($43,916.67) per month. In addition to payment of Base Rent, commencing upon December 1, 1999, Tenant shall be responsible for maintenance, repair and replacement obligations of Tenant set forth in the Original Lease and obligations of Landlord with respect to the Project Common Areas, the Building, the Expansion Land and all Operating Expenses, Taxes and Utilities and all other additional Rent required pursuant to the Lease.

Tenant has not made any prior assignment, hypothecation or pledge of the Lease or of any of the rents thereunder.

Except as modified herein, the Lease remains in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Fifth Amendment as of the date set forth below.

LANDLORD:                                   TENANT:

LOCKSLEY LANE INVESTORS, L.P.,              UNITED NATURAL FOODS, INC.,
a California limited partnership            a Delaware corporation

By: __________                              By: __________

Its: _________                              Its: _________

Date: ________                              Date: ________

EXHIBIT A

Punchlist Items

[LOGO]

STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(Non-Residential)

American Industrial Real Estate Association

June 30, 1999

(Date for Reference Purposes)

1. Buyer.

1.1 United Natural Foods, Inc. or Nominee, ("Buyer") hereby offers to purchase the real property, hereinafter described, from the owner thereof ("Seller") (collectively, the "Parties" or Individually, a "Party"), through an escrow ("Escrow") to close on completion of construction see Attachments ("Expected Closing Date") to be held by Commerce Escrow Company - Marleny Martin ("Escrow Holder") whose address is 1545 Wilshire Boulevard, Suite 600, Los Angeles, CA 90017, Phone No. (213) 484-0855, Facsimile No. (213) 484-0417 upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer.

1.2 The term "Date of Agreement" as used herein shall be the date when by execution and delivery (as defined in paragraph 20.2) of this document or a subsequent counter-offer thereto, Buyer and Seller have reached agreement in writing whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both Parties.

2. Property.

2.1 The real property ("Property") that is the subject of this offer consists of (Insert a brief physical description) a to be constructed concrete tilt-up warehouse in accordance with the specifications in Attachment B is located in the City of Vernon, County of Los Angeles, State of California, is commonly known by the street address of 3320 E. Vernon Avenue, Vernon, California subject to chance by City of Vernon during development process and is legally described as: to be provided through escrow.

(APN:__________________).

2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of Lawyers Title Company ("Title Company"), which shall issue the title policy hereinafter described.

2.4 Within the time period specified in paragraph 9.1(a), Seller and/or Seller's Broker shall make to Buyer, through escrow, all of the applicable disclosures required by law (See American Industrial Real Estate Association ("AIR") standard form entitled "Seller's Mandatory Disclosure Statement").

3. Purchase Price.

3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be $2,596,500.00 payable as follows:

              (a)   Cash down payment, including the Deposit as
                    defined in paragraph 4.3 (or if an all cash
                    transaction, the Purchase Price):              $TBD
                                                                   -------------
(Strike if not
applicable)   (b)   Amount of "New Loan" as defined in paragraph
                    5.1, if any:                                   $TBD
                                                                   -------------

                    Total Purchase Price:                          $2,596,500.00
                                                                   -------------

4. Deposits. See Attachment A

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4.2 Additional deposits: See Attachment A

5. Financing Contingency. (Strike if not applicable) See Attachment A

7. Real Estate Brokers.

7.1 The following real estate broker(s) ("Brokers") and brokerage relationships exist in this transaction and are consented to by the Parties (check the applicable boxes):

|_| __________________________ represents Seller exclusively ("Sellers Broker);

|_| __________________________ represents Buyer exclusively ("Buyers Broker); or

|X| McKinney Travers - Jack Whalen represents both Seller and Buyer ("Dual Agency").

The Parties acknowledge that Brokers are the procuring cause of this Agreement. See paragraph 24 for disclosures regarding the nature of a real estate agency relationship. Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the property described in paragraph 2.1 for a period of one year from the date above.

7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, other than the Brokers named in paragraph 7.1, and no broker or other person, firm or entity, other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party, other than said named Brokers by reason of any dealings or act of the indemnifying Party.

8. Escrow and Closing.

8.1 Upon acceptance hereof by Seller, this Agreement, including any counter-offers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions.

8.2 As soon as practical after the receipt of this Agreement and any relevant counter-offers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers, in writing, of the date ascertained.

8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail.

8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by recording a general warranty deed (a grant deed in California) and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement.

8.5 Buyer and Seller shall each pay one-half of the Escrow Holders charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance.

8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 9.5, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the Parties only and in no way constitute instructions to Escrow Holder.

8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as defined in paragraph 9.2, then neither of the

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Parties shall thereafter have any liability to the other under this Agreement, except to the extent of the breach of any affirmative covenant or warranty in this Agreement, in the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs, all of which shall be Buyers obligation.

8.8 The Closing shall occur on the Expected Closing Date, or as soon thereafter as the Escrow is in condition for Closing; provided, however, that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice, the Escrow shall be deemed terminated without further notice or instructions.

8.9 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holders fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements, covenants or warranties contained therein.

9. Contingencies to Closing. See Attachment A

9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies, IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (i) the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided.

(a) Disclosure. Seller shall disclose to Buyer any matters required by applicable law (see paragraph 2.4) and provide Buyer with a completed Property Information Sheet ("Property Information Sheet") concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or _______ days following the Date of Agreement. Buyer has 10 days from the receipt of said disclosures to approve or disapprove the matters disclosed.

(b) Physical Inspection. Buyer has 10 or _______ days from the receipt of the Property information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the physical aspects and size of the Property.

(c) Hazardous Substance Conditions Report. Buyer has 30 or _______ days from the receipt of the Property information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal, state or local law.

(d) Soil Inspection. Buyer has 30 or _______ days from the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement.

(e) Governmental Approvals. Buyer has 30 or _______ days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters.

(f) Conditions of Title. Escrow Holder shall cause a current commitment for title insurance ("Title Commitment") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment ("Underlying Documents") to be delivered to Buyer within 10 or _______ days following the Date of Agreement. Buyer has 10 days from the receipt of the Title Commitment and Underlying Documents to satisfy itself with regard to the condition of title. The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation, at Seller's expense, to satisfy and remove such disapproved monetary encumbrance at or before the Closing.
(g) Survey. Buyer has 30 or _______ days from the receipt of the Title Commitment and Underlying Documents to satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA") standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyers direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy, in which event Buyer shall pay any additional premium attributable thereto.

(i) Other Agreements. Seller shall within 10 or _______ days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 10 days from the receipt of said Other Agreements to satisfy itself with regard to such Agreements.

(j) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency.

(m) Destruction, Damage or Loss. There shall not have occurred prior to the Closing, a destruction of, or damage or loss to, the Property or any portion thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option, within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this transaction or to purchase the Property notwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this transaction, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing.

(n) Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change. "Material Change" shall mean a change in the status of the use, occupancy, tenants, or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the

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Closing.

(o) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement.

(p) Warranties. That each representation and warranty of Seller herein be true and correct as of the Closing. Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing.

(q) Brokerage Fee. Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement, without the written consent of Brokers.

9.2 All of the contingencies specified in subparagraphs (a) through (p) of paragraph 9.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as "Buyer Contingencies."

9.3 If any Buyers Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"). Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved item prior to the Expected Closing Date ("Seller's Election"). Seller's failure to give to Buyer within said 10 day period, written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. if Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the election, within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved item, or to terminate this transaction. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item without deduction or offset shall constitute Buyer's election to terminate this transaction. Unless expressly provided otherwise herein, Seller's right to cure shall not apply to the remediation of Hazardous Substance Conditions or to the Financing Contingency. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended to coincide with the expiration of 3 business days following the expiration of: (a) the applicable contingency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction, whichever is later.

9.5 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers. The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein.

10. Documents Required at or before Closing:

10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties.

10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing, an original ink signed:

(a) Grant or general warranty deed, duly executed and in recordable form, conveying fee title to the Property to Buyer.

(b) If paragraph 3.1(c) has not been stricken, the Beneficiary Statements concerning Existing Note(s).

(c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's interest in Lease form published by the AIR or its equivalent

(d) If applicable, Estoppel Certificates executed by Seller and/or the tenant(s) of the Property.

(e) An affidavit executed by Seller to the effect that Seller is not a "foreign person" within the meaning of internal Revenue Code Section 1445 or successor statutes. if Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers.

(f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident" within the meaning of California Revenue and Tax Code Section 18862 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least three business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute.

(g) If applicable, a bill of sale, duly executed, conveying title to any included personal property to Buyer.

(h) if the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property.

10.3 Buyer shall deliver to Seller through Escrow:

(a) The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement for prorations, expenses and adjustments. The balance of the cash portion of the Purchase Price, including Buyers Escrow charges and other cash charges, if any, shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date.

(b) if a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract (at Buyer's expense), assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note.

(c) The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c) above, duly executed by Buyer.

(d) Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements.

(e) if applicable, a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes.

(f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property.

10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected under paragraph 9.1(g)) owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller.

IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING.

11. Prorations and Adjustments.

11.1 Taxes. Real property taxes and special assessment bonds payable by the owner of the Property shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment shall be made promptly in cash upon receipt of a copy of any such supplemental bill of the amount necessary to accomplish such proration.

11.2 Insurance. WARNING: The insurance coverage which Seller maintained on the Property will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property.

11.3 Rentals, Interest and Expenses. Collected rentals, interest on Existing Notes, utilities, and operating expenses shall be prorated as of the date of Closing. The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing.

11.4 Security Deposit. Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing.

11.5 Post Closing Matters. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined.

11.6 Variations in Existing Note Balances. In the event that Buyer is taking title to the Property subject to an Existing Deed of Trust(s), and in the event that a Beneficiary Statement as to the applicable Existing Note(s) discloses that the unpaid principal balance of such Existing Note(s) at the Closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a) shall be reduced or increased by the amount of such Existing Note Variation.

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11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and in the event that the amount of the New Loan actually obtained is greater than the amount set forth in paragraph 5.1 hereof, the Purchase Money Note, if one is called for in this transaction, shall be reduced by the excess of the actual face amount of the New Loan over such amount as designated in paragraph 5.1 hereof.

12. Representation and Warranties of Seller and Disclaimers.

12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of three years, and, are true, material and relied upon by Buyer and Brokers in all respects. Seller hereby makes the following warranties and representations to Buyer and Brokers:

(a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligations hereunder.

(b) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwIse provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in its present condition, ordinary wear and tear excepted. The HVAC, plumbing, elevators, loading doors and electrical systems shall be in good operating order and condition at the time of Closing.

(c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank.

(d) Compliance. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediation, repair, maintenance or improvement be performed on the Property.

(e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property, without Buyer's written approval, which approval will not be unreasonably withheld.

(f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in writing to Buyer.

(g) Mechanics' Liens. There are no unsatisfied mechanics' or materialmens' lien rights concerning the Property.

(h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize same.

(i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seller prior to the Closing.

(j) No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding.

(k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding.

(l) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property, except as disclosed by this Agreement or otherwise in writing to Buyer.

12.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property.

13. Possession.

Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases.

14. Buyer's Entry.

At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work, including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities, losses, expenses (including reasonable attorneys' fees), damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith.

15. Further Documents and Assurances.

The Parties shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company.

16. Attorneys' Fees.

If any Party or Broker brings an action or proceeding (including arbitration) involving the Property, to enforce the terms hereof, 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 or Broker 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 or Broker 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.

17. Prior Agreements/Amendments.

17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property.

17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller.

19. Notices.

19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice, demand, request, approval, disapproval or other communication, each such communication shall be in writing and shall be delivered personally, by messenger or by mail, postage prepaid, to the address set forth in this Agreement or by facsimile transmission.

19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

19.3 Any Party or Broker hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional

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persons to whom, all communications are thereafter to be made.

20. Duration of Offer.

20.1 If this offer is not accepted by Seller on or before 5:00 P.M. according to the time standard applicable to the city of ______________________ on the date of ____________________________________________, it shall be deemed automatically revoked.

20.2 The acceptance of this offer, or of any subsequent counteroffer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer.

21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). See Attachment A

/s/ BH RC
---------------          ---------------
Buyer Initials           Seller Initials

22. ARBITRATION OF DISPUTES. (This Arbitration of Disputes paragraph is applicable only if initialed by both Parties.)

22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND UNDER THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED. ANY SUCH CONTROVERSY SHALL BE ARBITRATED BY THREE ARBITRATORS WHO SHALL BE IMPARTIAL REAL ESTATE BROKERS WITH AT LEAST 5 YEARS OF FULL TIME EXPERIENCE IN BOTH THE AREA WHERE THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THEY SHALL BE APPOINTED UNDER THE COMMERCIAL RULES. THE ARBITRATORS SHALL HEAR AND DETERMINE SAID CONTROVERSY IN ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE AWARD SHALL BE EXECUTED BY AT LEAST TWO OF THE THREE ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF. JUDGMENT MAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT.

22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

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Buyer Initials           Seller Initials

23. Miscellaneous.

23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed.

23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located.

23.3 Time of Essence. Time is of the essence of this Agreement.

23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then constitute the Agreement.

23.5 Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any action or proceeding involving the Property or arising out of this Agreement.

24. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

24.1 The Parties and Brokers agree that their relationship(s) shall be governed by the principles set forth in the applicable sections of the California Civil Code, as summarized in paragraph 24.2.

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

(a) Seller's Agent. A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following affirmative obligations: (1) To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: 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.

(b) Buyer's Agent. A selling agent can, with a Buyers consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations. (1) To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller, 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.

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(c) Agent Representing Both Seller and Buyer. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. (1) In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections (a) or (b) of this paragraph 24.2. (2) in representing both Seller and Buyer, the agent may not without the express permission of the respective Party, disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3) The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller 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.

(d) Further Disclosures. Throughout this transaction Buyer and Seller may receive more than one disclosure, depending upon the number of agents assisting in the transaction. Buyer and Seller should each read its contents each time it is presented, considering the relationship between them and the real estate agent in this transaction and that disclosure. 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 Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; 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.

24.3 Confidential Information: 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.

25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean end refer to calendar days. This Agreement 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.

26. Additional Provisions:

Additional provisions of this offer, if any, are as follows or are attached hereto by an addendum consisting of paragraphs ___________________ through _________________. (If there are no additional provisions write "NONE".)

See Attachment A, Attachment B and Attachment C

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

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE.

NOTE:

1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY.
2. IF THE BUYER IS A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS.

The undersigned Buyer offers and agrees to buy the Property on the terms and stated and acknowledges receipt of a copy hereof.

BROKER:                                 BUYER:

------------------------------------    ---------------------------------------
                                        /s/ Robert F. Cirulnick
------------------------------------    ---------------------------------------
By: McKinney Travers  /Date             By: United Natural Foods, Inc.
---------------------      ---------        -----------------------------------
Name Printed: Jack Whalen               Name Printed: Bob Cirulnick
              ----------------------                  -------------------------
Title:                                  Title: CFO          7-26-99
       -----------------------------           --------------------------------

                                        By: /s/ Barclay Hope
                                            -----------------------------------
                                        Name Printed: Barclay Hope
                                                      -------------------------
                                        Title: GEN. MGR, ALBERT'S ORGANICS WEST
                                               --------------------------------
Address 2833 Leonis Boulevard           Address: 260 Lake Road. P.O. Box 999
------------------------------------             ------------------------------
Los Angeles, CA 90058                   Dayville, CT 06241
------------------------------------    ---------------------------------------
(323) 589-1800    (323) 589-9375        (800) 877-8898        (860) 774-4685
--------------    ------------------    --------------        -----------------
Telephone         Facsimile No.         Telephone             Facsimile No.

27. Acceptance.

27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified.

27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement. In consideration of real estate brokerage service rendered by Brokers, Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to ________ % of the Purchase Price divided in such shares as said Brokers shall direct in writing. This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing.

27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer.

NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY
      SELLER UNDER THIS AGREEMENT.

BROKER:                                 SELLER:

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

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


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By: McKinney Travers   /Date            By: Dynamic Builders, Inc.
    ------------------      --------    ---------------------------------------
Name Printed: Jack Whalen               Name Printed:
      ------------------------------             ------------------------------
Title:                                  Title:
       -----------------------------          ---------------------------------

                                        By:
                                           ------------------------------------
                                        Name Printed:
                                                     --------------------------
                                        Title:
                                               --------------------------------
Address 2933 Leonis Boulevard           Address: 2114 South Hill Street
        ----------------------------             ------------------------------
Los Angeles, CA  90058                  Los Angeles, CA  90007
------------------------------------    ---------------------------------------
(323) 589-1800      (323) 589-9375      (213) 746-6630       (213) 748-8017
-----------------   ----------------    -----------------    ------------------
Telephone           Facsimile No.       Telephone            Facsimile No.
Federal ID No.                          Federal ID No.
              ----------------------                   -------------------------

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: American Industrial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213) 687-8777.

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

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1998-American Industrial Real Estate Association REVISED Form OFA-3-2/98E

REVISED 6/30/99

UNITED NATURAL FOODS, INC.
JUNE 30, 1999

ATTACHMENT "A" TO THAT CERTAIN STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (THE "PURCHASE AGREEMENT") DATED JUNE 30,999, BETWEEN UNITED NATURAL FOODS, INC., OR NOMINEE ("BUYER") AND DYNAMIC BUILDERS, INC. ("SELLER")

Terms not otherwise defined herein shall have the meanings ascribed to those terms in the Purchase Agreement (except where the context may otherwise require, the term "Purchase Agreement" shall include all attachments, addenda and exhibits thereto). To the extent of any inconsistency between the terms and conditions of this Attachment and the remaining Purchase Agreement, the terms and conditions set forth in this Attachment shall control.

1. Deposit Schedule. Buyer shall deposit with Seller a total deposit (the "Deposit") equal to ten percent (10%) of the Purchase Price in accordance with the following schedule:

First Deposit: The initial deposit shall be $50,000.00 outside of escrow, applicable to the Purchase Price, of which $27,000.00 has been paid and received by Seller and $23,000.00 of which shall be paid upon execution of the Purchase Agreement. Should Buyer cancel the transaction evidenced by the Purchase Agreement prior to submittal of plans to plan check, Seller shall return $23,000.00 of the deposit to Buyer and retain $27,000.00 as compensation for design and cost evaluations.

Second Deposit: Within thirty (30) days after execution of the Purchase Agreement, Buyer shall deposit with Seller, outside of escrow, an additional $50,000.00.

Third Deposit: Sixty (60) days after execution of the Purchase Agreement, Buyer will deposit with Seller, outside of escrow, an additional $50,000.00.

Fourth Deposit: Upon Seller obtaining the building permit from the City of Vernon, California, for the construction contemplated hereby, Buyer will deposit the remaining $109,650.00 with Seller, outside of escrow.

/s/ BH

Additional Deposits: In the event Seller and Buyer agree that additional improvements will be constructed by Seller as part of the Property under the Purchase Agreement, the Purchase Agreement shall be amended to reflect such agreement and to set forth agreed upon increases to the Purchase Price and additional deposits.

Application of Deposits: All Deposits shall be credited to the Purchase Price, and shall be applied as provided in the Purchase Agreement, or in this Attachment.

2. Construction Responsibility. Seller shall cause the construction of an approximately 35,000 square foot turn-key warehouse building (the "Building") on the Property. Seller will guarantee completion of the Building in accordance with plans and specifications approved by Seller and buyer (the "Approved Plans"), including those described in Attachment B to the Purchase Agreement.

3. Construction Terms.

(a) To the extent the same have not been completed and set forth in Attachment B to this Purchase Agreement, Seller shall submit construction documents, plans and specifications for the review and approval of Buyer. Said plans, once approved, shall become a part of this Purchase Agreement and shall be referenced as Attachment C. Said plans are hereby referenced as those particular plans as prepared by Gillings and Associates, sheets AO.1 through SP2, dated June 29, 1999.

(b) Unless otherwise provided herein, Seller shall provide or cause to be provided and shall pay for all design services, labor, materials, equipment, tools, construction equipment and machinery, utilities, transportation and any and all other facilities and/or services necessary for the proper construction of the Building. Seller shall also be responsible for construction means, methods, techniques, sequences and procedures, and for coordinating all portions of the construction of the Building.

(c) Seller shall keep Buyer informed of the progress and quality of the construction of the Building and, upon request of buyer not more often than once per month, shall deliver to Buyer within five (5) days written progress reports during the period that the Building is being constructed.

/s/ BH

(d) Seller shall be responsible for correcting any work which does not conform to the requirements of the Purchase Agreement. The provisions of this Section 3(d) shall survive the Closing.

(e) Seller warrants to Buyer that materials and equipment furnished in connection with the construction of the Building will be of good quality and new unless otherwise required or permitted hereby, that the construction will be free from faults and defects, and that the construction will conform with the requirements of the Purchase Agreements. The provisions of this Section 3(d) shall survive the Closing.

(f) Seller shall pay all sales, consumer, use and similar taxes which are legally enacted at the time of the execution hereof, and shall secure and pay for Building and other permits and governmental fees, licenses and inspections necessary for the proper execution and completion of the construction of the Building.

(g) Seller shall pay royalties and license fees for patented designs, processes or products. Seller shall defend suits or claims for infringement of patent rights and shall hold Buyer harmless from loss on account thereof, but shall not be responsible for such defense or loss when particular design, process or product of a particular manufacturer is required by Buyer.

(h) Seller shall comply with and give notices required by laws, ordinances, rules, regulations and lawful orders of public authorities relating to the construction of the Building. Seller represents that it has complete familiarity with all applicable laws, ordinances, rules, regulations and orders of any public authority or official thereof having bearing on the construction of the Building.

(i) Upon completion of construction, Seller shall remove from the site waste materials, rubbish, Seller's tools, construction equipment, machinery and surplus materials. In addition, Seller shall perform the following final cleaning for all trades at completion of construction to be performed by Seller (including its contractors and subcontractors):

(i) remove temporary protection;

(i) remove marks, stains, fingerprints and other soil or dirt from painted, decorated

/s/ BH

and natural finish woodwork and other work;

(i) remove spots, mortar, plaster, soil and paint from ceramic tile, marble and other finished materials and wash or wipe clean;

(i) clean fixtures, cabinet work and equipment, removing stains, paint, dirt and dust and leave in undamaged, new condition;

(i) clean aluminum in accordance with recommendations of the manufacturer; and

(i) clean resilient floors thoroughly with a well rinsed mop containing only enough moisture to clean off any surface dirt or dust and buff dry by machine to bring the surfaces to sheen.

When the Building is turned over to Buyer, it shall be thoroughly clean and ready for immediate occupancy.

(j) Seller shall achieve substantial completion of the project contemplated hereby as expeditiously as possible, and in any event on or before April 1, 2000, subject to delays caused by weather, Acts of God and similar events beyond Seller's control. Time is of the essence. The date of substantial completion shall be deemed to have occurred when the Building is fully constructed in accordance with the requirements of the Purchase Agreement, and any approved modifications thereof, all final inspections by city and other officials having jurisdiction have been satisfactorily completed as shown in writing by such officials and all remaining work shall consist only of punchlist items which can be completed within thirty days and will not cause any interference with Buyer's use and occupancy of the Property.

(k) At such time as Buyer acquires title to the Property in accordance with the requirements of the Purchase Agreement, Seller shall deliver to Buyer certified copies of all construction documents, including, without limitation, all drawings, specifications, surveys (including an as-built survey which Seller will obtain) and the like, prepared or furnished by Seller or Seller's design professionals and consultants. Buyer may use such documents for future work on the Property.

/s/ BH

(l) Seller shall be responsible to Buyer for acts and omissions of Seller's employees and the employees of all contractors and subcontractors in connection with the transactions contemplated by the Purchase Agreement.

(m) All work described herein or required hereby shall be executed in a neat, skillful, workmanlike manner in accordance with the best recognized trade practices.

(n) In all cases in which a manufacturer's name, trade-name or other proprietary designation is used in connection with materials or articles to be furnished under the Purchase Agreement, unless the phrase "or equal" is used after such name, Seller shall furnish the product of the named manufacturer(s) without substitution, unless a written request for a substitute has been submitted by Seller and approved in writing by Buyer.

(o) If Seller proposes to use a material which, while suitable for the intended use, deviates in any way from the detailed requirements of the Purchase Agreement, Seller shall inform Buyer of the nature of such deviation at the time the material is submitted for approval. No such deviation shall be deemed approved by Buyer unless such approval is in writing.

(p) Seller shall effect the construction of the Building at its own expense. Buyer's only financial responsibility prior to acquiring the Property pursuant to the terms and conditions of the Purchase Agreement shall be to make the Deposits required hereby. At the time of the Closing, Seller shall warrant to Buyer that the Property is and shall be free and clear of all liens, claims, security interests or encumbrances in favor of Seller or any other person or entity performing construction at the site or furnishing materials or equipment relating to such construction. In the event a lien is filed or claimed against the Property by any contractor, subcontractor, architect, engineer, laborer or supplier of materials, and the Title Company will not issue an endorsement to Buyer's title insurance policy affirmatively insuring against such liens, Seller agrees immediately to bond such lien or to cause such lien to be discharged. If Seller shall fail to do so, Buyer may, at its option, and at the expense of Seller, bond such lien or cause it to be discharged. Any payments by Buyer in this regard shall be deducted from the balance of the purchase price.

/s/ BH

(q) Seller shall maintain such insurance against such risks as are usually insured against in the same general area and by companies engaged in the same or similar business, including, by way of illustration, and not limitation, builder's risk, fire, extended coverage, personal and property liability, worker's compensation insurance and any other insurance that Buyer may reasonably request. Certificates of such insurance acceptable to Buyer shall be delivered to Buyer immediately upon execution hereof. Insofar as property and builder's risk insurance on the Property is concerned, Buyer shall be listed as a mortgagee and loss payee, as its interests may appear. The property insurance on the Property shall be an all-risk policy form and shall insure against the perils of fire and extended coverage and physical loss or damage, including, without limitation, theft, vandalism, malicious mischief, collapse, false work, temporary buildings and debris removal, including demolition occasioned by enforcement of any applicable legal requirements, and shall cover reasonable compensation for the services and expenses of such professionals required as a result of such insured loss.

(r) Should Buyer at any time during the progress of the work, request of Seller any modifications, alterations or deviations in, additions to or omissions from the Approved Plans, it shall be at liberty to do so, and Seller shall cause the same to be completed. No such alterations, deviations or additions shall be made except upon Buyer's written request and approval, which must be signed by Buyer. The only person authorized to order extra work in behalf of Buyer is Barclay Hope or other individual designated in writing by Buyer. Any such changes shall be on a time and material basis plus 18.75%, which percentage represents Seller's general conditions, insurance, overhead and fee.

(s) Seller shall promptly correct work rejected by Buyer or known by Seller to be defective or failing to conform to the requirements of the Purchase Agreement, whether observed before or after substantial completion, and whether or not fabricated, installed or completed. Seller shall bear the costs of correcting such rejected work, including additional testing and inspections, and any loss or damage to Buyer resulting from such defect or failure. This obligation shall survive termination of the Purchase Agreement.

(t) If, within one year following substantial completion or, after the date for commencement of warranties established by written agreement between Buyer and Seller, or by

/s/ BH

terms of an applicable special warranty required hereby, any of the work is found not to be in accordance with the requirements of the Purchase Agreement, Seller shall correct it promptly after receipt of written notice from Buyer to do so unless Buyer has previously given Seller a written acceptance of such condition. Any guarantee against defects and materials and workmanship performed hereunder shall not apply to loss, damage or destruction from the types of perils covered by the standard form of all-risk property insurance nor against uninsured casualties such as, without limitation, flood and earthquake. The provisions of this Section 3(t) shall survive the Closing.

(u) It is understood and agreed that the Purchase Price represents a "guaranteed maximum price"; provided, however, included within the Purchase Price are certain allowances for, among other things, glass and other tenant improvements. Unless additional work is requested by Buyer which would exceed the allowance provided, Seller hereby represents that it reasonably believes, but does not guarantee, that such allowances are sufficient for their intended purpose.

(v) Seller shall permit Buyer, its representatives, employees, agents and the construction consultants, to enter upon the Property at all reasonable times, to inspect the construction of the Building and all materials to be used in the construction thereof and to examine all detailed plans and shop drawings which are or may be kept at the construction site. The exercise by Buyer or any representative of buyer of such inspection right shall not constitute approval of Seller's work or the waiver by Buyer of any right on account of defective or improper work.

4. Indemnification. To the fullest extent permitted by law, Seller shall indemnify and hold Buyer harmless from and against all claims, damages, losses and expenses, including without limitation, attorney's fees, arising out of or resulting from performance of the work, provided that such claim, damage, loss or expenses are attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property, including loss of use resulting therefrom, but only to the extent caused in whole or in part by the negligent acts or omissions of Seller, any subcontractor, any design professional, anyone directly or indirectly employed by them or any one for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.

/s/ BH

EXHIBIT "B"
UNITED NATURAL FOODS, INC.
June 30, 1999

QUALIFICATIONS AND SPECIFICATIONS FOR UNITED NATURAL FOODS, INC. BUILD TO SUIT PROJECT.

PROFESSIONAL DESIGN SERVICES

The services to be provided under this contract for the complete design and construction shall include those of:

1) Site Layout Design
2) Interior Space Planning Design
3) Architectural Design
4) Structural Design
5) Civil Engineering
6) Soils Engineering

The design, engineering, permitting, and construction of the following trades will be done directly by the subcontractors. Those categories are as follows:

1) Electrical
2) Plumbing
3) Heating, Ventilation, & Air Conditioning (HVAC)
4) Fire Protection

The municipal fees that have been included in this agreement are as follows:

1) Plan Check
2) Sewer & Water
3) Utility Meter Fees
4) School Fees
5) Building Permit
6) Plan check and permit fees for the design-build trades listed above

Any fee increases or code changes placed in effect by the governing agencies after December 31, 1999 are specifically excluded from this contract.

/s/ BH

The project, referred to as UNITED NATURAL FOODS, shall be in accordance with the following specifications:

SITE:

The site for which this project is to be located is approximately 65,608 square feet.

1) Grading for a dock high building and all site work as required by the soils engineering report.

2) Parking lot shall be asphalt, three inches thick, over compacted native soil with striping per code. The existing parking structure will be crushed on site and all base will be mixed and compacted with the existing soil. A concrete truck apron, 6 inches thick with reinforcing steel is designed for the dock loading area, extending to the recycling area.

3) One 30" high concrete site wall as required by the City of Vernon separating parking lot from sidewalk.

4) One trash enclosure, concrete with steel corrugated gates.

BUILDING SHELL, CORE, AND TENANT IMPROVEMENT

1) This building is considered to be 4ft. high dock high structure, which makes the finished, floor approximately 5 inches above the foundation. The building shall be a total of approximately 35,000 square feet with a first floor of 33,000 square feet and a second floor mezzanine of approximately 2,000 square feet. The square footage shall be calculated using the exterior building dimension of each floor area.

2) The building walls of this project shall be constructed on site, pre-cast concrete tilt-up panels. Maximum height of the concrete walls to be 38 feet from the top of the foundation to the top of the wall.

3) The first floor shall be 5 inch thick concrete slab with reinforcing per code. The second floor will be engineered for 125 lb. per square foot and shall be constructed with wood or steel and wood, with plywood and 3 inches of concrete. Dynamic Builders and the structural engineer will make the final determination of how the mezzanine will be constructed.

4) The minimum height between finished first floor and the bottom of the second floor structure shall be 11 feet. The clear height between second floor and bottom of roof structure to be 11 feet. The minimum clear height between the finished first floor and the bottom of the roof structure shall be 24 feet.

5) There shall be three single 3 foot by 7 foot 18 gauge steel exit doors and frames with three ball bearing N.R.P. hinges, Schlage L-9453 lever action lock set, Norton closer, smoke seal, threshold, sweep with rain drip and lock guard. Additional doors required be Owner's cold storage plan or racking are at Owner's expense.

6) Allowance of $14,875.00 for all interior and exterior glass. Unless otherwise specifically requested by Owner, Contractor shall use Solarcool Gray Reflective Glazing for all exterior glass.

/s/ BH

7) The roof shall be a panelized roof system, or equal, engineered to support roof mounted refrigeration equipment. Sheathing shall be minimum 1/2 inch plywood or O.S.B. board with exterior glue laminated beams, or equal.

8) Roofing shall be three ply or equal: one layer 25 pound fiberglass, and one layer of 11 pound fiberglass, flood coated with hot tar capped with a 72 pound fiberglass cap sheet. Three inch felt cant material shall be installed at all points where roof intersects walls and at all raised platforms. The roof shall carry a 10 year warranty from Contractor and Sub-Contractor, fully assignable to Buyer.

9) A fire sprinkler system at the roof shall be designed to store class 1-4 commodities up to 20 feet in standard single or double rows with 8-foot isles. All office areas shall have chrome semi recessed heads. (This system will not be suitable to any type of flammable materials).

10) ELECTRICAL

A) Service: One 1,200 Amp, 277/480v, three-phase service with one meter.
B) HVAC outlets to be located on the roof per code.
C) Connection to the roof-top mounted air conditioning units.
D) One 240 Volt 35 Amp water heater circuit
E) Fifty four warehouses low temperature, high bay 400 watt metal halide lights with hook, cord, and plug.
F) Exterior lighting shall consist of six, 400 watt halide wall packs, Hubble # PVLO175 or equal, photo-cell type.
G) Four entry down lights.
H) Exit lights and signs per code

11) PLUMBING

A) Four inch sewer line to the building
B) All copper water lines.
C) Allowance of $10,000.00 for floor drains in the warehouse area.

12) INTERIOR IMPROVEMENTS

An allowance of $115,000.00 for a total of 4,000 square feet. This allowance shall be put towards these and any other tenant improvements.

A) Drywall partitions
B) Interior doors, jambs and hardware
C) Interior glazing
D) Acoustical or drywall ceilings
E) Interior lighting
F) Electrical distribution, switches outlets and telephone boxes and conduits.
G) HVAC units and distribution with programmable thermostats.
H) Fire sprinkler distribution from mains and laterals
I) Interior painting
J) Plumbing

/s/ BH

K) Floor coverings
L) Cabinetry

13) FLOORS.

A) Warehouse floors shall be scrubbed, sanded and sealed with Ashford formula.

14) VENTILATION

A) Twenty nine sixteen inch round rotary vents.
B) Skylights or smoke hatches as required per code.

15) PAINTING AND WATERPROOFING

A) One coat of flat vinyl paint over primer on exterior walls of the building, truckwell walls.

16) MISCELLANEOUS

A) One 12ft. X 14ft. and ten 8ft. X lOft. 24 gauge flat type steel slat, prime white finish, bottom weather strip, chain operation with slide bolt locking at each jamb (pad locks by owners) roll-up. door.
B) For each dock high door, a total of ten (10) doors, there shall be one (1) each Rite-Hite Mechanical dock levelers, 6'x8', 20,000 lb. capacity with 16" lip and integral bumpers, one (1) each Rite-Hite mechanical Dok-Lok, one (1) each Frommelt Dock Seal and one (1) each electrical for dock seal lights.
C) Any required fire alarm monitoring systems shall be provided. (Monthly service is considered to be a utility and shall be paid for by the owner)
D) Roof structure in the warehouse shall have a foil cap sheet covering the underneath side.
E) Twenty 1O"x12"x4" thick rubber dock bumpers shall be attached to the building wall for protection.
F) Sheet draftstops as required by code.
G) Street site wall, approximately 30" high, as required by the city code. Wall shall be painted a coordinating color to the building.
H) Four inch round pipe bollards to protect the electrical switch gear, fire sprinkler equipment, where required by code and ten inch round pipe bollards at the property entrance per code. Additional pipe bollard, 4" diameter, galvanized steel, 36" tall imbedded in the floor may be added by Owner at a unit cost of $295.00 each.

17) EXCLUSIONS

A) Permanent signage on building
B) In rack fire sprinklers, ESFR system or pendant heads
C) Cooler or freezer boxes, refrigeration equipment, insulated doors or any work related to the cold storage requirements of the Buyer.
D) Warehouse electrical outlets.

/s/ BH

E) Painting of the interior warehouse walls
F) Any special or related requirements for the owners business
G) Utility fees or related costs
H) Telephone systems or wiring for a system
I) Any items not specifically mentioned in the above scope of qualifications

/s/ BH

REVISED 6/30/99

FIRST AMENDMENT
TO
STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE

FIRST AMENDMENT ("this Amendment") made as of June 30, 1999 between DYNAMIC BUILDERS, INC., a California corporation ("Seller") and UNITED NATURAL FOODS, INC., a Delaware corporation ("Buyer")

RECITALS

Buyer and Seller have entered into a certain Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate dated as of June 30, 1999 (the "Purchase Agreement"). Seller and Buyer wish to amend the Purchase Agreement in certain respects.

THEREFORE, in consideration of the Agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Defined Terms. Capitalized terms used in this Amendment and defined in the Purchase Agreement shall have the meaning so provided unless the context otherwise expressly requires.

2. Deletions. Sections 2.3, 3.2, 4.1, 8.10, 9.1(h), 9.1(k), 9.1(1), 9.4, 12.2, 12.3, and 21 of the Purchase Agreement are hereby deleted in their entirety.

3. Broker. Notwithstanding anything to the contrary contained in the Purchase Agreement, Seller shall be solely responsible for the payment of any fee, commission or other amount payable to the Brokers.

4. Inspections. Notwithstanding anything to the contrary contained in the Purchase Agreement, no inspection by Buyer pursuant to the provisions of the Purchase Agreement shall limit or constitute a waiver of any representation, warranty or agreement of Seller contained in the Purchase Agreement or in this Amendment.

/s/ BH

5. Title Insurance. Buyer's obligations under the Purchase Agreement are subject to receipt at Closing of a standard ALTA owner's title insurance policy with extended coverage (the "Title Policy") insuring title to the Property in the amount of the Purchase Price, subject only to matters set forth in the Title Commitment, and shall include affirmative endorsements insuring against mechanics or materialmen's liens and insuring rights under all easements for the benefit of the Property and shall include such other endorsements as Buyer may reasonably request, including compliance with subdivision act map endorsement, zoning and survey. Buyer shall pay any additional premium attributable to such form of policy, except mechanic's liens, coverage which shall be provided at Seller's expense. The Title Commitment shall be issued by the Title Company or other nationally recognized title insurance company reasonably acceptable to Buyer.

6. Survey. Seller agrees that Seller, at its cost, will deliver to Buyer as soon as reasonably practicable following the date hereof a survey of the Property complying with the provisions of Section 9.1(g) of the Purchase Agreement. Concurrently with the Closing, Seller shall deliver to Buyer an updated as built survey showing the location of all improvements included in the Property and all easements.

7. Disapproved Items. Notwithstanding the provisions of Section 9.3 of the Purchase Agreement, except with respect to so-called "punchlist" items which will not interfere with Buyer's use of the Property as provided in Attachment A to the Purchase Agreement, Seller's election, as provided therein, may be made only with the approval of Buyer, which shall not be unreasonably withheld.

8. Representations by Seller. Section 12 of the Purchase Agreement is amended by adding the following additional representations:

(a) The Property and all improvements constructed thereon by Seller now comply and will, upon conveyance to Buyer, comply with applicable zoning, building and similar laws, regulations and ordinances;

(b) There are no condemnation or similar proceedings pending or, to the knowledge of Seller threatened, with respect to the Property or any other property adjacent thereto necessary for ingress and egress, parking or other uses in conjunction with the Property, except a proposed highway dedication of five

/s/ BH

(5) feet along Vernon Avenue, which property is not included in the Property; and

(c) There are no options, licenses or other rights or agreement of any kind relating to the use, occupancy or purchase of the property.

9. Amendment to Representations. Section 12.1(h) is hereby amended by deleting the words "Seller has no knowledge of any" and substituting "there are no", as of the date of this agreement.

10. Liquidated Damages; Default. The parties agree that it would be impracticable or extremely difficult to fix, prior to signing this Agreement, the actual damages which would be suffered by Seller if Buyer fails to perform its obligations under this Agreement. Therefore, if, after the satisfaction or waiver of all contingencies provided for the Buyer's benefit, Buyer breaches this Agreement, Seller shall be entitled to liquidated damages in the amount of all deposits then paid pursuant to Attachment A to the Purchase Agreement, subject to the other provisions of this Section 10. Seller's retention of such deposits shall constitute Seller's sole remedy, at law or in equity, on account of Buyer's breach of the Purchase Agreement. Notwithstanding anything to the contrary contained in the Purchase Agreement, in the event of default by Seller, the Deposit shall be immediately returned to Buyer, and Buyer may pursue any and all other remedies arising by reason of such default or breach.

11. Security; Guaranty. At the request of Buyer, Seller shall execute and deliver to the escrow holder a Promissory Note and Second Deed of Trust in the forms attached hereto as Exhibits A and B respectively, which Second Deed of Trust shall be held in escrow by Escrow Holder and recorded by Escrow Holder upon notice by Buyer of default by Seller in the payment or performance of any obligation under the Purchase Agreement. Concurrently with the delivery of this Amendment, Seller shall deliver to Buyer the joint and several guaranty of Ramon Bonin and Blaise Bonin("Guarantors") in form and substance satisfactory to Buyer, under which Guarantors shall guarantee all of the obligations of Seller under the Purchase Agreement.

12. Interpretation. To the extent of any inconsistency between the terms and conditions of this Amendment and the Purchase Agreement, the terms and conditions set forth in this Amendment shall control.

/s/ BH

13. Close of Escrow. Close of Escrow shall take place within five (5) business days after Seller has substantially completed all work as provided in
Section 3(j) of Attachment A to the Purchase Agreement; provided that in the event all improvements required to be completed by Seller have not been completed, the Closing shall not take place unless (a) the remaining work consists of minor items which, alone or together, will not interfere with the Buyer's use of the Property and (b) Buyer and Seller have entered into an agreement acceptable to Buyer providing for the completion of such remaining work and the withholding of an amount equal to 125% of the anticipated cost thereof until completion. Close of Escrow is expected to occur in accordance with a schedule to be executed by both parties and to become an addendum to this Agreement. Delays caused by Acts of God or municipal delays, which are unforeseen, shall be considered permitted delays and shall extend the Escrow Period by an equivalent period. Delays caused by Buyer or Buyer's agent or representative shall result in an equivalent delay in the closing date. Delays cause by Buyer which exceed thirty (30) days aggregate shall result in an adjustment to the purchase price for financing costs incurred by Seller.

14. Financing Provisions.

(a) It is Buyer's understanding that Seller will be financing the construction of the Building with an institutional or other lender. Seller agrees that the Property shall stand as collateral solely for the financing obtained by Seller to acquire the Property to be sold to Buyer and to construct the Building and for no other indebtedness of Seller to any lender. Seller shall provide Buyer with a certificate from its lender (or lenders if there are more than one) (collectively, the "Lender") confirming that the Property will not secure any other debt of Seller to such Lender other than the financing obtained for purposes of purchasing the Property and constructing the Building. Seller further agrees, and such certification of the Lender shall so state, that the aggregate indebtedness of Seller to the Lender shall not exceed the Purchase Price less all deposits required to be paid by Buyer to Seller.

(b) Seller shall not create, incur, make, assume or suffer to exist any assignment, mortgage, pledge, lien, charge, security interest or other encumbrance of any nature whatsoever on the Property other than in favor of the Lender or Buyer.

/s/ BH

(c) Seller shall deliver to Buyer copies of all requisitions and other construction loan reports submitted to the Lender concurrently with delivery to the Lender.

15. Off Site Work. The Purchase Price includes the amount of $40,000 representing the estimated share of the cost of street widening, utility installation, replacement or relocation of sidewalks, curbing or gutters and similar work which may be required by the City of Vernon to be performed outside the Property ("Off Site Work"). Seller shall assist Buyer in providing necessary information required to apply for and obtain such loans or grants for reimbursement of the cost of Off Site Work ("Guaranteed Reimbursement") for which Buyer or the Property qualifies. The entire amount of any Guaranteed Reimbursement shall be paid to Buyer. In the event Off Site Work is performed by the City of Vernon and the City of Vernon invoices Seller prior to the Closing directly for its portion of the Off Site Work (the "Direct Payment Amount"), the Purchase Price shall be reduced by (a) $40,000 minus (b) the Direct Payment Amount. In the event the City of Vernon performs the Off Site Work and has not invoiced Seller or Buyer prior to the Closing for the Direct Payment Amount, Buyer shall be solely responsible for the payment thereof, and the Purchase Price shall be reduced by $40,000.

16. Fire Easement. The City of Vernon may, at its sole discretion, require portions of the vehicle maneuvering area of the subject property be designated as a fire easement for purposes of accessing facilities on the property as well as adjoining properties. Said fire easements will not affect the parking or loading area of the subject property.

17. Potential Property Easements: Seller and Buyer hereby agree and acknowledge the following:

(a) There currently exists, in the City of Vernon, a moratorium on the subdivision or adjustment of parcels and lots of land. Said moratorium is currently in effect until such time as the City of Vernon completes its land planning revision and elects to lift the moratorium.

(b) The subject property is currently two (2) complete parcels with portions of two (2) other "adjoining parcels" of land in the parking lot area and along the eastern boundary of the subject property. The total is approximately 65,600 square feet. The portions of the "adjoining parcels" required to construct the Building are (i) in the parking lot

/s/ BH

area, on the south side of the Property, and (ii) an approximately six-foot strip along the eastern boundary of the Property (collectively, the "Easement Areas")

(c) The remaining portion of the "adjoining parcels" will be sold to another building on a group of adjacent parcels.

(d) It is anticipated, but not guaranteed, that upon the lifting of the moratorium, the City of Vernon will allow lot line adjustments which will adjust the parcels to move the "Easement Areas" into the complete parcels on the subject property. Should said lot line adjustments be allowed, Seller will complete the lot line adjustments at Seller's expense.

(e) Should the lot line adjustments be delayed or possibly not allowed by the City of Vernon, prior to the Closing, Seller, at its expense, shall grant to Buyer perpetual easements in favor of Buyer, such easements to be in form and substance satisfactory to Buyer, and insurable by the Title Company. In addition, Seller shall execute and deliver, or cause to be executed and delivered, at the close of escrow, in recordable form, options to acquire the Easement Areas for $10 as and when permitted by the City of Vernon.

(f) Seller represents and warrants that such easements will not cause the Property to be in violation of any applicable building, zoning or similar law, code or ordinance of regulation.

18. Environmental Condition. Notwithstanding the provisions of Section 12.1(c) of the Purchase Agreement, Seller acknowledges that asbestos may be located on the Property. Seller shall remove the same prior to commencement of construction of Buyer's improvements at Seller's sole cost and expense and in accordance with applicable laws and ordinances.

19. Removal of Existing Improvements. All improvements now located on the Property shall be demolished and removed by Seller prior to commencement of Buyer's improvements, at Seller's sole cost and expense and in accordance with applicable laws and ordinances.

20. Ratification. The Purchase Agreement, as amended by the terms of this Amendment, is ratified and confirmed. All references to the Purchase Agreement shall mean the Purchase Agreement and all Attachments thereto as amended by this Amendment.

/s/ BH

IN WITNESS WHEREOF, Seller and Buyer have executed this Amendment as of the date written above.

DYNAMIC BUILDERS, INC.

UNITED NATURAL FOODS, INC.

By: /s/ Barclay Hope
   ---------------------------

                                                               /s/ BH

September 29, 1999

SECOND AMENDMENT TO THAT CERTAIN STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE DATED JUNE 10, 1999 BETWEEN UNITED NATURAL FOODS, INC. AS BUYER AND DYNAMIC BUILDERS, INC. AS SELLER

This Amendment to the Purchase Agreement between the parties, when executed, shall become part of the Purchase Agreement between the parties. All conditions and requirements of the Purchase Agreement shall remain in full force and effect. Buyer and Seller hereby agree as follows:

1. The purpose of this Amendment is to adjust the scope of work and cost of work under the original STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR REAL PROPERTY ("Agreement"). The proposed design of the building under the original Purchase and Sale has been substantially modified, resulting in the need for this Amendment.

2. The changes to the proposed building covered by this Amendment are attached as Exhibit "C". The specifications shown in Exhibit "C" shall be used for the purpose of the Seller causing the completion of construction work in accordance with Exhibit "B" of the "Agreement" as well as causing the completion of construction work in accordance with Exhibit "C".

3. In accordance the specifications in Exhibit "C", the Purchase Price is hereby amended to be $3,461,975.00, and increase of $865,475.00. Seller has increased its construction financing in accordance with this increase.

4. Both parties acknowledge that the representative for United Natural Foods, Inc is Barclay Hope. Buyer shall provide Seller with a corporate resolution or equal demonstrating United Natural Foods, Inc. has authorized Barclay Hope's signature on all documents relating to this transaction, including this amendment, to be binding on behalf of United Natural Foods, Inc.

5. All work has been budgeted in accordance with the attached Exhibit "D", Refrigeration and Cooler Box Budget. Those items which are allowances under this amendment are identified. All other such allowances under the original "Agreement" shall remain as allowances until such time as the shop drawings and building drawings are fully reconciled and bidding completed.

6. Unless specifically modified by this Amendment, all other term and conditions of the "Agreement" shall remain in full force and effect.

AS DEMONSTRATED BELOW BY THEIR EXECUTION OF THIS AMENDMENT, BUYER AND SELLER AGREE TO BE BOUND BY OF THE TERMS AND

CONDITIONS OF THIS AMENDMENT AND THOSE OF THE "AGREEMENT" DATED JUNE 10, 1999.

Seller:                                Buyer:

DYNAMIC BUILDERS, INC.,                UNITED NATURAL FOODS, INC.
A California Corporation

By:                                    By: /s/ Barclay Hope
   ------------------------------          ---------------------------------

Its:                                   Its: General Manager/ALBERT'S WEST
    -----------------------------           --------------------------------

Date:                                  Date:  10/6/99
     ----------------------------           --------------------------------

EXHIBIT "C"

Cooler Boxes and Refrigeration Recap

Cooler Box Specifications:

A. Building Size: 255'x130'x25' high
B. (2) +34F rooms
(1) +45F room
(1) +58F room
C. (3) interior partition walls
D. (4) 12'x10' electrical horizontal sliding cooler doors
E. (4) 12'x10' strip curtains
F. (8) 10'x10' cased openings
G. (8) 10'x10' strip curtains
H. Insulated wall panels will consist of 5" polystyrene core panels at liner walls and and 6" polystyrene core panels at partition walls.
I. Ceiling panels will consist of 6" polystyrene core through-out entire coolers. Panels will be hung from existing roof structure.
J. All insulated panels will have a 26 gauge white stucco embossed finish. All trim to match and be silicone sealed.
K. Disposal of all debris is included.
L. Shop drawings and engineering on panels as included.

The above specifications are the basis for the Second Amendment to the "Agreement" between United Natural Foods, Inc. as Buyer and Dynamic Builders, Inc. as Seller dated June 10, 1999.

September 29, 1999

SECOND AMENDMENT TO THAT CERTAIN STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE DATED JUNE 10, 1999 BETWEEN UNITED NATURAL FOODS, INC. AS BUYER AND DYNAMIC BUILDERS, INC. AS SELLER

This Amendment to the Purchase Agreement between the parties, when executed, shall become part of the Purchase Agreement between the parties. All conditions and requirements of the Purchase Agreement shall remain in full force and effect. Buyer and Seller hereby agree as follows:

1. The purpose of this Amendment is to adjust the scope of work and cost of work under the original STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR REAL PROPERTY ("Agreement"). The proposed design of the building under the original Purchase and Sale has been substantially modified, resulting in the need for this Amendment.

2. The changes to the proposed building covered by this Amendment are attached as Exhibit "C". The specifications shown in Exhibit "C" shall be used for the purpose of the Seller causing the completion of construction work in accordance with Exhibit "B" of the "Agreement" as well as causing the completion of construction work in accordance with Exhibit "C".

3. In accordance the specifications in Exhibit "C", the Purchase Price is hereby amended to be $3,461,975.00, and increase of $865,475.00. Seller has increased its construction financing in accordance with this increase.

4. Both parties acknowledge that the representative for United Natural Foods, Inc is Barclay Hope. Buyer shall provide Seller with a corporate resolution or equal demonstrating United Natural Foods, Inc. has authorized Barclay Hope's signature on all documents relating to this transaction, including this amendment, to be binding on behalf of United Natural Foods, Inc.

5. All work has been budgeted in accordance with the attached Exhibit "D", Refrigeration and Cooler Box Budget. Those items which are allowances under this amendment are identified. All other such allowances under the original "Agreement" shall remain as allowances until such time as the shop drawings and building drawings are fully reconciled and bidding completed.

6. Unless specifically modified by this Amendment, all other term and conditions of the "Agreement" shall remain in full force and effect.

AS DEMONSTRATED BELOW BY THEIR EXECUTION OF THIS AMENDMENT, BUYER AND SELLER AGREE TO BE BOUND BY OF THE TERMS AND

Seller:                                Buyer:

DYNAMIC BUILDERS, INC.,                UNITED NATURAL FOODS, INC.
A California Corporation

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

Its:                                   Its:
    -----------------------------           --------------------------------

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

EXHIBIT "C"

Cooler Boxes and Refrigeration Recap

Cooler Box Specifications:

A. Building Size: 255'x130'x25' high
B. (2) +34F rooms
(1) +45F room
(1) +55F room
C. (4) interior partition walls
D. (4) 12'x10' electrical horizontal sliding cooler doors
E. (4) 12'x10' strip curtains
F. (8) 10'x10' cased openings
G. (8) 10'x10' strip curtains
H. Insulated wall panels will consist of 5" polystyrene core panels at liner walls and and 6" polystyrene core panels at partition walls.
I. Ceiling panels will consist of 6" polystyrene core through-out entire coolers. Panels will be hung from existing roof structure.
J. All insulated panels will have a 26 gauge white stucco embossed finish. All trim to match and be silicone sealed.
K. Disposal of all debris is included.
L. Shop drawings and engineering on panels as included.

The above specifications are the basis for the Second Amendment to the "Agreement" between United Natural Foods, Inc. as Buyer and Dynamic Builders, Inc. as Seller dated June 10, 1999.

EXHIBIT "C"

Cooler Boxes and Refrigeration Recap

Cooler Box Specifications:

A. Building Size: 255'x130'x25' high
B. (2) +34F rooms
(1) +45F room
(1) +55F room
C. (4) interior partition walls
D. (4) 12'x10' electrical horizontal sliding cooler doors
E. (4) 12'x10' strip curtains
F. (8) 10'x10' cased openings
G. (8) 10'x10' strip curtains
H. Insulated wall panels will consist of 5" polystyrene core panels at liner walls and and 6" polystyrene core panels at partition walls.
I. Ceiling panels will consist of 6" polystyrene core through-out entire coolers. Panels will be hung from existing roof structure.
J. All insulated panels will have a 26 gauge white stucco embossed finish. All trim to match and be silicone sealed.
K. Disposal of all debris is included.
L. Shop drawings and engineering on panels as included.

The above specifications are the basis for the Second Amendment to the "Agreement" between United Natural Foods, Inc. as Buyer and Dynamic Builders, Inc. as Seller dated June 10, 1999.

Refrigeration and Cooler Box Budget

1.    Boxes                                               $226,707.00
2.    Refrigeration                                       $196,300.00

Additional Integration Costs
1.    Fees and Permits                                       $8693.00
2.    Blue Prints                                             $500.00
3.    Site Utilities/Misc                                    $2602.00
4.    Underground Concrete                                   $5380.00
5.    Plumbing                                             $72,000.00*
6.    Roof Structure/Cover                                 $22,806.00
7.    Electrical                                           $42,000.00*
8.    Sprinklers                                           $57,000.00*
9.    Sheet Metal (platform covers)                           $810.00
10.   Skylites                                               $1776.00
11.   Box Curbs (Concrete)                                 $32,500.00*
12.   Supervision                                            $9827.00
13.   Architect Integration/Struct. Eng.                   $10,000.00
      Sub-total                                           $687,299.00

Gen. Conditions/Overhead/Profit                           $128,868.00

Total Refrigeration/Box Budget                            $816,167.00
      Additional Transaction Costs                         $49,308.00**
Total Amendment to Purchase Agreement                     $865,475.00

o *Still Allowances Pending final equipment specifications and City of Vernon Health Department Approval. Plumbing allowance includes clarifier.
o **Includes construction loan interest/pts, costs of sale and escrow/title costs.

[LETTERHEAD OF DYNAMIC BUILDERS]

September 8, 1999

Mr. Barclay Hope
General Manager
Albert's Organics
1330 East 6th Street
Los Angeles, California 90021

RE: Cold Storage and Banana Box Proposals.

Dear Barclay:

Dynamic Builders, Inc. has completed its analysis of the proposed cold storage and banana box requirements for the new building on Vernon Avenue. We now have hard bids from multiple contractors for insulated panels/ceilings/doors/etc. for the boxes as well us the refrigeration units/coils/condensors.

It is important to note a design change for the boxes has been required by the City of Vernon Health Department. If you recall, our original intention was to put the insulation for the boxes on top of the roof structure as "overdeck insulation", eliminating the drop ceiling. The Vernon Health Department is requiring we now put a washable drop ceiling in all of the boxes. While not providing specifics, we suspect, the temperatures of the boxes could allow for additional processing in the future and this could be the driving reason for this change.

This has triggered a couple of modifications to our roof structure as the insulation and drop ceiling are now suspended from the roof structure instead of on top. Included in this cold storage budget is the cost of that roof modification, approximately $24,000.00 in hard cost.

For budget purposes, we have selected the lowest qualified bidder for the boxes, banana boxes and refrigeration. We have incorporated these bids in the total. However, we are including the additional plumbing, electrical and sprinkler budgets as allowances. Once shop drawings for the refrigeration units and boxes are complete, these trades will be aggressively re-bid to eliminate them as allowances, making them fixed costs. Concrete curbs, foundations/trench drains, miscellaneous sheet metal and 3 skylites are included. More detail is enclosed in the attached summary.

It is important to note that the overall budget includes miscellaneous costs for permits and fees, architectural/engineering, general conditions, financing and transaction costs.

Budget:

1. Insulated Panels/doors/curtains, refrigeration units/coils/condensors, plumbing, electrical, sprinklers, roof modification.
BUDGET: $865,475.00

2. Banana boxes, electrical, plumbing, platforms, supports, covers.
BUDGET: $320,700.00

Each of the above budgets includes the pro-rated costs of transaction and financing. Should you elect to postpone the banana boxes, that's certainly acceptable to us however, we would need to know soon enough to make adjustments in our overall construction loan.

Depending on the scope of work authorized, we can provide you with the option of either amending the purchase price through escrow or we can prepare a separate contract for the approved scope between the parties. Should you decide to install the banana boxes outside of our agreement. you are free to do so provided you still make integration provisions.

Please review the attached details for information.

An adjustment to the purchase price as a modification to the Purchase and Sale Agreement will be made upon your election to proceed. Should you have further questions, please feel free to give me a call.

Sincerely,

/s/ Ken Jackson

Ken Jackson
Regional Marketing Director

September 10,1999
Cooler Boxes and Refrigeration Recap

We have solicited 5 qualified bids on the Boxes etc. and have 4 qualified bids on the refrigeration units and 1 unqualified on the entire package.

Cooler Box Specifications:

A. Building Size: 255'x130'x25' high
B. (2) +34F rooms
(1) +45F room
(1) +55F room
C. (4) interior partition walls
D. (4) 12'x10' electrical horizontal sliding cooler doors
E. (4) 12'x10' strip curtains
F. (8) 10'x10' cased openings
G. (8) 10'x10' strip curtains
H. Insulated wall panels will consist of 5" polystyrene core panels at liner walls and 6" polystyrene core panels at partition walls.
I. Ceiling panels will consist of 6" polystyrene core through-out entire coolers. Panels will be hung from existing roof structure.
J. All insulated panels will have a 26 gauge white stucco embossed finish. All trim to match and be silicone sealed.
K. Disposal of all debris is included.
L Shop drawings and engineering on panels as included.

The above specifications are the basis for the qualified bids. Each of the 5 box bidders has included this list of specifications. The entire package bidder failed to detail enough information in his bid to determine his scope of work.

Qualified Box Bidders

Hansen DPS Tri-Com National Hussmann $277,371.00 $296,298.00 $226,707.00 $510,748.0 $282,170.00

Qualified Refrigeration Bidders

Commercial Tri-Com Woody's Hussmann $196,300.00 $243,577.00 $210,130.00 $211,400.00

Un-Qualified Package Bid

Thermal Industries
$483,233.00 (Specifications and references not adequate)

Comments:

We have extensive experience with Commercial Refrigeration and feel they are very qualified for the project. Tri-Com is the selected qualified bidder on the panels/etc. While we have no first hand experience with Tri-Com, they have extensive experience and appear to be financially and professionally qualified. We do have extensive experience with Hansen and Hussmann but believe Tri-Com to be the most attractive bidder.

Refrigeration and Cooler Box Budget
September 10, 1999

1.    Boxes (Tri-Com)                                     $226,707.00
2.    Refrigeration (Commercial Ref)                      $196,300.00

Additional Integration Costs

1.    Fees and Permits                                       $8693.00
2.    Blue Prints                                             $500.00
3.    Site Utilities/Misc                                    $2602.00
4.    Underground Concrete                                   $5380.00
5.    Plumbing                                             $72,000.00*
6.    Roof Structure/Cover                                 $22,806.00
7.    Electrical                                           $42,000.00*
8.    Sprinklers                                           $57,000.00*
9.    Sheet Metal (platform covers)                           $810.00
10.   Skylites                                               $1776.00
11.   Box Curbs (Concrete)                                 $32,500.00*
12.   Supervision                                            $9827.00
13.   Architect Integration/Struct. Eng.                   $10,000.00
      Sub-total                                           $687,299.00

Gen. Conditions/Overhead/Profit                           $128,868.00

Total Refrigeration/Box Budget                            $816,167.00
      Additional Transaction costs                         $49,308.00**
Total Amendment to Purchase Agreement                     $865,475.00

Banana Boxes

I.    Boxes                                               $231,256.00
2.    Electrical                                           $15,000.00*
3.    Plumbing connections                                   $6000.00
4.    Platforms                                              $1000.00
5.    Supports                                               $1000.00
6.    Covers                                                  $450.00
      Sub-Total                                           $254,704.00

Gen. Conditions/Overhead/Profit                            $47,757.00

Total Banana Box Budget                                   $302,463.00
      Additional Transaction Costs                         $18,237.00**
Total Amendment to Purchase Agreement                     $320,700.00

o *Still Allowances Pending final equipment specifications and City of Vernon Health Department Approval. Plumbing allowance includes clarifier.
o **Includes construction loan interest/pts, costs of sale and escrow/title costs.

Exhibit 10-32

April 28, 2000

Albert's Organics, Inc.
32275 Peppertree Bend
San Juan Capistrano, California 92675

Attention: Kevin T. Michel, Vice President

RE: Note Secured by Deed of Trust of even date herewith, in the Original Principal Sum of $1,948,000.00 and Note Secured by Deed of Trust of even date herewith, in the Original Principal Sum of $865,000.00, (collectively, the "Note") executed by Albert's Organics, Inc., a California corporation ("Borrower") in favor of City National Bank ("CNB"), which Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing of even date herewith executed by Borrower, as Trustor, in favor of CNB, as Beneficiary, on that certain real property located at 3268 E. Vernon Avenue, Vernon, California 90058

("Property")

Dear Mr. Michel:

This is to confirm that CNB will extend the loan more completely described in the enclosed Note, subject to the additional terms and conditions set forth herein. Capitalized terms not defined in this letter have the meanings given them in the Note. This letter is hereby incorporated into the Note (this letter and the Note, collectively, the "Note").

The following shall constitute additional Events of Default under the Note:

Failure of Borrower and guarantor to furnish CNB, within the times specified, the following statements:

Within one hundred twenty (120) days after the close of each fiscal year of Borrower, the following reports and information, each in form acceptable to CNB and certified by Borrower to be true and correct;

A copy of the annual financial statement of Borrower for such year, in form acceptable to CNB and consisting of not less than an income statement, balance sheet, reconciliation of net worth and statement of cash flows, with notes thereto;

An annual report of operating income and expenses of the Property for such fiscal year, if the Property is leased to an unrelated third party;

A current rent roll of the Property; and

Copies of all new leases and all amendments to existing leases entered into by Borrower with respect to the Property since the end of the prior fiscal year.

Such additional information, reports and/or statements as CNB may, from time to time, reasonably request;

Failure of Borrower and guarantor of this Note to furnish current financial statements on CNB's form or in such other form acceptable to CNB, certified by such guarantor to be true and correct, delivered within one hundred twenty (120) days after Borrower's fiscal year end of each year. CNB agrees that financial statements furnished in the form prepared by guarantor for Securities Exchange Commission ("SEC") financial reporting will be acceptable.

Except for documents and instruments specifically referenced in this letter, the Note or the Deed of Trust or executed in connection with the Note or the Deed of Trust, this letter and the Note constitute the entire agreement of the parties hereto and supersedes any prior or contemporaneous oral or written agreements, understandings, representations, warranties and negotiations, if any, which are merged into this letter and the Note. If you agree to accept the terms of this letter and the Note, please sign the enclosed acknowledgement copy of this letter, as well as the enclosed Note, and return them to me on or before May 10, 2000.

Sincerely,

"Lender"

City National Bank,
a national banking association

Accepted and Agreed this _____ day of _______________________, 19___.

"Borrower"

Albert's Organics, Inc., a California corporation

Consent of Trustor:

"Trustor"

Albert's Organics, Inc., a California corporation

DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to trustee under the Deed of Trust for cancellation before reconveyance will be made.

NOTE SECURED BY DEED OF TRUST
(Installment - Interest (Fixed) Included)

Loan No. 65295
$865,000.00 Account No. 644053
9701 Wilshire Boulevard
Suite 600
Beverly Hills, California 90212
April 28, 2000

On June 1, 2007, Albert's Organics, Inc., a California corporation ("Borrower") promises to pay in immediately available funds to the order of City National Bank, a national banking association ("CNB"), at its office set forth above, the principal sum of Eight Hundred Sixty Five Thousand and No/100 Dollars ($865,000.00), or so much thereof as may be outstanding, with interest thereon to be computed from the date of its disbursement at a rate computed on a basis of a 360-day year, actual days elapsed, equal to 8.55% ("Interest Rate").

The first payment under this Note shall be for accrued interest only and shall be due on June 1, 2000, with principal and interest together payable in installments of Thirteen Thousand Seven Hundred Seventy Four and 33/100 Dollars ($13,774.33) each month commencing with the first day of July, 2000, and continuing thereafter on the same day of each month until maturity, as above stated, when all unpaid interest and principal shall be payable. The above stated monthly payments of principal and interest will amortize the loan in seven (7) years.

The occurrence of any of the following with respect to Borrower or any guarantor of this Note or any general partner of Borrower or such guarantor, shall constitute an "Event of Default" hereunder:

The failure to make any payment of principal or interest when due under this Note;

The filing of a petition by or against any of such parties under any provisions of the Bankruptcy Code;

The appointment of a receiver or an assignee for the benefit of creditors;

The commencement of dissolution or liquidation proceedings or the disqualification of any such parties which is a corporation, partnership, joint venture or any other type of entity;

The death or incapacity of any of such parties which is an individual;

The revocation of any guaranty, or any guaranty becomes unenforceable as to any future advances under this Note;

Any financial statement provided by any of such parties to CNB is false or misleading;

Any sale or transfer of all or a substantial or material party of the assets of any of such parties other than in the ordinary course of business or other than a transfer which is not an Accelerating Transfer as set forth in the Deed of Trust securing this Note; or

Any violation, breach or default under any letter agreement, guaranty, security agreement, deed of trust or any other contract or instrument executed in connection with this Note or securing this Note.

Upon the occurrence of an Event of Default, CNB, at its option, may declare all sums outstanding hereunder to be immediately due and payable without presentment, demand, protest or notice of dishonor, all of which are hereby expressly waived by Borrower. Borrower agrees to pay all costs and expenses, including reasonable attorneys' fees, expended or incurred by CNB (or allocable to CNB's in-house counsel) in connection with the enforcement of this Note or the collection of any sums due hereunder and irrespective of whether suit is filed. Upon the occurrence and during the continuance of an Event of Default, the unpaid principal balance hereunder shall bear additional interest at a rate of five percent (5.0%) per year higher than the interest rate as determined and computed above.

Borrower shall pay to CNB a late charge of 6% or $5.00, whichever is greater, of each and every monthly installment not received by CNB on or before the tenth
(10th) day after the installment is due.

Should Borrower (or any successor in interest to Borrower) without the prior written consent of CNB, sell, transfer, mortgage, pledge, hypothecate, assign or encumber his interest in the property (or any part thereof) which secured this Note, whether voluntarily or involuntarily, then CNB may at its option declare the whole sum of principal and interest (and all other sums secured by any Deed of Trust taken as security for this Note) immediately due and payable. This provision shall apply to each and every sale, transfer, mortgage, pledge, hypothecation, assignment or encumbrance regardless whether or note CNB has consented to, or waived, its right hereunder, whether by action or non-action, in connection with any previous sale, transfer, mortgage, pledge, hypothecation, assignment or encumbrance, whether one or more. An accelerated transfer shall not include a sale, lease or other transfer to United Natural Foods, Inc., a Delaware corporation, or any of its direct or indirect subsidiaries as long as the net worth of the transferor is at least equal to the net worth of Borrower, provided that no party shall be released from liability under the Loan Documents, in connection with any such transfer.

Borrower shall have the right to prepay the principal of this Note, in whole or in part, on the first day of a calendar month, which prepayment must be preceded by not less than thirty (30) days prior written notice to CNB of Borrower's intention to make such prepayment, the amount thereof, and the date upon which such prepayment will be made, and there shall be paid to CNB concurrently with such payment all then accrued interest and any and all other amounts then due hereunder, TOGETHER WITH A PREPAYMENT CHARGE equal to the greater of:

(1) One percent (1%) of the principal balance being prepaid; or

(2) An amount obtained by:

(a) first computing a "Future Value," which shall be equal to the product of:

(i) the excess, if any, expressed as a decimal, of (A) the Interest Rate at the time of such prepayment, over (B) the Yield Rate, as that term is hereinafter defined, multiplied by

(ii) the quotient obtained by dividing (a) the number of days after such prepayment date through and including the Maturity Date by (b) 360, and multiplied by

(iii) the amount of principal balance to be prepaid,

and then,

(b) determining the present value, as of the date of prepayment, of a future payment in an amount equal to the Future Value paid on the Maturity Date, discounted at a discount rate equal to the Yield Rate.

The Yield Rate, as used herein, shall be the yield to maturity of that U.S. Treasury Bond or Note (as reported in the edition of the Wall Street Journal, or similar publication which is dated on the fifth (5th) business day preceding the proposed prepayment date), the due date of which is closest to (either before, after or on) the Maturity Date of this Note. However, if the period between the Maturity Date and the closest due date of the U.S. Treasury Bond or Note exceeds six (6) months, the average of the yields to maturity of the two (2) U.S. Treasury Bonds or Notes, with due dates next preceding and following the Maturity Date, shall be used to compute such difference; and if there are two
(2) or more U.S. Treasury Bonds or Notes with the same due dates, that one whose yield to maturity is closest to the Interest Rate shall be used to compute such difference. The Yield Rate shall be rounded to the nearest one-hundredth of one percent (0.01%).

Notwithstanding the above, Borrower shall have the right to prepay the principal of this Note, in whole or in part, without any prepayment charge during the last six (6) months of the loan term, provided payment is received, on the first
(1st) day of a calendar month, which prepayment must be preceded by not less than thirty (30) days prior written notice to CNB of Borrower's intention to make such prepayment, the amount thereof, and the date upon which such payment will be made, and there shall be paid to CNB concurrently therewith, all then accrued interest and any and all other amounts then due thereunder.

In the event that CNB declares all sums due hereunder immediately due and payable upon the occurrence of an Event of Default, Borrower shall pay to CNB a prepayment charge equal to the prepayment charge (calculated as set forth above) which would be due hereunder if Borrower had exercised its right to prepay this Note on and as of the date CNB declares such sums immediately due and payable.

BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PREMIUM OR CHARGE, UPON ACCELERATION OF THE MATURITY OF THIS NOTE (WHETHER ARISING UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE OR OTHERWISE), AND BORROWER HEREBY AGREES TO PAY THE PREPAYMENT CHARGE SET FORTH ABOVE, WHETHER ANY PREPAYMENT IS VOLUNTARY OR UPON OR FOLLOWING ANY ACCELERATION OF THIS NOTE (INCLUDING, WITHOUT LIMITATION, ANY ACCELERATION FOLLOWING A TRANSFER, MORTGAGE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR ENCUMBRANCE OF THE PROPERTY (OR ANY PART THEREOF) WHICH SECURES THIS NOTE). BORROWER HAS SEPARATELY INITIALED THIS PROVISION IN THE SPACE PROVIDED BELOW AND DECLARES THAT CNB'S AGREEMENT TO MAKE THE LOAN EVIDENCED HEREBY ON THE TERMS AND CONDITIONS HEREOF CONSTITUTES ADEQUATE CONSIDERATION, OF INDIVIDUAL WEIGHT, FOR THIS WAIVER AND AGREEMENT BY BORROWER.

Should this Note be signed by more than one person and/or firm and/or corporation, all of the obligations herein contained shall be considered joint and several obligations of each signer hereof.

IT IS A FURTHER CONDITION OF THIS NOTE THAT ANY DEFAULT IN THE OBSERVANCE, PERFORMANCE OR DISCHARGE OF ANY CONDITION, COVENANT OR AGREEMENT CONTAINED IN EITHER THIS NOTE OR NOTE NO. 65294 OF EVEN DATE HEREWITH, IN THE AMOUNT OF $1,948,000.00, BOTH OF WHICH ARE EXECUTED BY BORROWER, SHALL, AT THE OPTION OF CNB, ALSO CONSTITUTE A DEFAULT IN BOTH OF SAID NOTES.

"Borrower"

Albert's Organics, Inc., a California corporation

DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to trustee under the Deed of Trust for cancellation before reconveyance will be made.

NOTE SECURED BY DEED OF TRUST
(Installment - Interest (Fixed) Included)

Loan No. 65294
$1,948,000.00 Account No. 644053
9701 Wilshire Boulevard
Suite 600
Beverly Hills, California 90212
April 28, 2000

On June 1, 2015, Albert's Organics, Inc., a California corporation ("Borrower") promises to pay in immediately available funds to the order of City National Bank, a national banking association ("CNB"), at its office set forth above, the principal sum of One Million Nine Hundred Forty Eight Thousand and No/100 Dollars ($1,948,000.00), or so much thereof as may be outstanding, with interest thereon to be computed from the date of its disbursement at a rate computed on a basis of a 360-day year, actual days elapsed, equal to 8.60% ("Interest Rate").

The first payment under this Note shall be for accrued interest only and shall be due on June 1, 2000, with principal and interest together payable in installments of Nineteen Thousand Four Hundred Forty and 45/100 Dollars ($19,440.45) each month commencing with the first day of July, 2000, and continuing thereafter on the same day of each month until maturity, as above stated, when all unpaid interest and principal shall be payable. The above stated monthly payments of principal and interest will amortize the loan in fifteen (15) years.

The occurrence of any of the following with respect to Borrower or any guarantor of this Note or any general partner of Borrower or such guarantor, shall constitute an "Event of Default" hereunder:

The failure to make any payment of principal or interest when due under this Note;

The filing of a petition by or against any of such parties under any provisions of the Bankruptcy Code;

The appointment of a receiver or an assignee for the benefit of creditors;

The commencement of dissolution or liquidation proceedings or the disqualification of any such parties which is a corporation, partnership, joint venture or any other type of entity;

The death or incapacity of any of such parties which is an individual;

The revocation of any guaranty, or any guaranty becomes unenforceable as to any future advances under this Note;

Any financial statement provided by any of such parties to CNB is false or misleading;

Any sale or transfer of all or a substantial or material party of the assets of any of such parties other than in the ordinary course of business or other than a transfer which is not an Accelerating Transfer as set forth in the Deed of Trust securing this Note; or

Any violation, breach or default under any letter agreement, guaranty, security agreement, deed of trust or any other contract or instrument executed in connection with this Note or securing this Note.

Upon the occurrence of an Event of Default, CNB, at its option, may declare all sums outstanding hereunder to be immediately due and payable without presentment, demand, protest or notice of dishonor, all of which are hereby expressly waived by Borrower. Borrower agrees to pay all costs and expenses, including reasonable attorneys' fees, expended or incurred by CNB (or allocable to CNB's in-house counsel) in connection with the enforcement of this Note or the collection of any sums due hereunder and irrespective of whether suit is filed. Upon the occurrence and during the continuance of an Event of Default, the unpaid principal balance hereunder shall bear additional interest at a rate of five percent (5.0%) per year higher than the interest rate as determined and computed above.

Borrower shall pay to CNB a late charge of 6% or $5.00, whichever is greater, of each and every monthly installment not received by CNB on or before the tenth
(10th) day after the installment is due.

Should Borrower (or any successor in interest to Borrower) without the prior written consent of CNB, sell, transfer, mortgage, pledge, hypothecate, assign or encumber his interest in the property (or any part thereof) which secured this Note, whether voluntarily or involuntarily, then CNB may at its option declare the whole sum of principal and interest (and all other sums secured by any Deed of Trust taken as security for this Note) immediately due and payable. This provision shall apply to each and every sale, transfer, mortgage, pledge, hypothecation, assignment or encumbrance regardless whether or note CNB has consented to, or waived, its right hereunder, whether by action or non-action, in connection with any previous sale, transfer, mortgage, pledge, hypothecation, assignment or encumbrance, whether one or more. An accelerated transfer shall not include a sale, lease or other transfer to United Natural Foods, Inc., a Delaware corporation, or any of its direct or indirect subsidiaries as long as the net worth of the transferor is at least equal to the net worth of Borrower, provided that no party shall be released from liability under the Loan Documents, in connection with any such transfer.

Borrower shall have the right to prepay the principal of this Note, in whole or in part, on the first day of a calendar month, which prepayment must be preceded by not less than thirty (30) days prior written notice to CNB of Borrower's intention to make such prepayment, the amount thereof, and the date upon which such prepayment will be made, and there shall be paid to CNB concurrently with such payment all then accrued interest and any and all other amounts then due hereunder, TOGETHER WITH A PREPAYMENT CHARGE equal to the greater of:

(1) One percent (1%) of the principal balance being prepaid; or

(2) An amount obtained by:

(a) first computing a "Future Value," which shall be equal to the product of:

(i) the excess, if any, expressed as a decimal, of (A) the Interest Rate at the time of such prepayment, over (B) the Yield Rate, as that term is hereinafter defined, multiplied by

(ii) the quotient obtained by dividing (a) the number of days after such prepayment date through and including the Maturity Date by (b) 360, and multiplied by

(iii) the amount of principal balance to be prepaid,

and then,

(b) determining the present value, as of the date of prepayment, of a future payment in an amount equal to the Future Value paid on the Maturity Date, discounted at a discount rate equal to the Yield Rate.

The Yield Rate, as used herein, shall be the yield to maturity of that U.S. Treasury Bond or Note (as reported in the edition of the Wall Street Journal, or similar publication which is dated on the fifth (5th) business day preceding the proposed prepayment date), the due date of which is closest to (either before, after or on) the Maturity Date of this Note. However, if the period between the Maturity Date and the closest due date of the U.S. Treasury Bond or Note exceeds six (6) months, the average of the yields to maturity of the two (2) U.S. Treasury Bonds or Notes, with due dates next preceding and following the Maturity Date, shall be used to compute such difference; and if there are two
(2) or more U.S. Treasury Bonds or Notes with the same due dates, that one whose yield to maturity is closest to the Interest Rate shall be used to compute such difference. The Yield Rate shall be rounded to the nearest one-hundredth of one percent (0.01%).

Notwithstanding the above, Borrower shall have the right to prepay the principal of this Note, in whole or in part, without any prepayment charge during the last six (6) months of the loan term, provided payment is received, on the first
(1st) day of a calendar month, which prepayment must be preceded by not less than thirty (30) days prior written notice to CNB of Borrower's intention to make such prepayment, the amount thereof, and the date upon which such payment will be made, and there shall be paid to CNB concurrently therewith, all then accrued interest and any and all other amounts then due thereunder.

In the event that CNB declares all sums due hereunder immediately due and payable upon the occurrence of an Event of Default, Borrower shall pay to CNB a prepayment charge equal to the prepayment charge (calculated as set forth above) which would be due hereunder if Borrower had exercised its right to prepay this Note on and as of the date CNB declares such sums immediately due and payable.

BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PREMIUM OR CHARGE, UPON ACCELERATION OF THE MATURITY OF THIS NOTE (WHETHER ARISING UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE OR OTHERWISE), AND BORROWER HEREBY AGREES TO PAY THE PREPAYMENT CHARGE SET FORTH ABOVE, WHETHER ANY PREPAYMENT IS VOLUNTARY OR UPON OR FOLLOWING ANY ACCELERATION OF THIS NOTE (INCLUDING, WITHOUT LIMITATION, ANY ACCELERATION FOLLOWING A TRANSFER, MORTGAGE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR ENCUMBRANCE OF THE PROPERTY (OR ANY PART THEREOF) WHICH SECURES THIS NOTE). BORROWER HAS SEPARATELY INITIALED THIS PROVISION IN THE SPACE PROVIDED BELOW AND DECLARES THAT CNB'S AGREEMENT TO MAKE THE LOAN EVIDENCED HEREBY ON THE TERMS AND CONDITIONS HEREOF CONSTITUTES ADEQUATE CONSIDERATION, OF INDIVIDUAL WEIGHT, FOR THIS WAIVER AND AGREEMENT BY BORROWER.

Should this Note be signed by more than one person and/or firm and/or corporation, all of the obligations herein contained shall be considered joint and several obligations of each signer hereof.

IT IS A FURTHER CONDITION OF THIS NOTE THAT ANY DEFAULT IN THE OBSERVANCE, PERFORMANCE OR DISCHARGE OF ANY CONDITION, COVENANT OR AGREEMENT CONTAINED IN EITHER THIS NOTE OR NOTE NO. 65295 OF EVEN DATE HEREWITH, IN THE AMOUNT OF $865,000.00, BOTH OF WHICH ARE EXECUTED BY BORROWER, SHALL, AT THE OPTION OF CNB, ALSO CONSTITUTE A DEFAULT IN BOTH OF SAID NOTES.

"Borrower"

Albert's Organics, Inc., a California corporation

Attn:    Sylvain A. Elfassi
         Loan No. 65294 & 65295

======

DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(Permanent)

This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (this "Deed of Trust") is made this 28th day of April, 2000, between Albert's Organics, Inc., a California corporation, herein called TRUSTOR, whose address is 3268-3320 E. Vernon Avenue, Vernon, California 90058, Lawyers Title Company, a California corporation, herein called TRUSTEE, and City National Bank, a national banking association, 9701 Wilshire Boulevard, Suite 600, Beverly Hills, California 90212, herein called BENEFICIARY.

Trustor IRREVOCABLY GRANTS, TRANSFERS, CONVEYS AND ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, that certain real property in Los Angeles County, California (the "Property") and more particularly described in Exhibit "A" attached hereto and by this reference incorporated herein;

TOGETHER WITH all the reversionary estate, right, title and interest of Trustor in and to all leases and other occupancy agreements affecting the Property or any portion thereof now or hereafter existing or entered into, together with any and all amendments, extensions and renewals thereof (the "Leases"), and any and all guaranties of the obligations of lessees under the Leases and under any and all amendments, extensions and renewals thereof, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of a similar nature;

TOGETHER WITH an absolute assignment of all rents, income, receipts, revenues, royalties, issues and profits and other benefits (collectively, the "Rents") now due or which may become due or to which Trustor may now or shall hereafter become entitled or may demand or claim, arising or issuing from or out of the Leases, or from or out of the Trust Estate (as hereinafter defined) or any part thereof, subject, however, to a license granted by Beneficiary to Trustor, as hereinafter provided, to collect and receive all of the Rents;

TOGETHER WITH any and all buildings and improvements now or hereafter erected thereon (the "Improvements"), and all materials intended for construction, re-construction, alteration and repair of the Improvements, all of which materials shall be deemed to be included within the Property immediately upon the delivery thereof to the Property and including, but not limited to, the fixtures, attachments, appliances, equipment, machinery, and other articles attached to the Improvements (unless the context clearly indicates otherwise, all references herein to the "Property" shall be deemed to include not only the real property described in Exhibit "A" attached hereto but also the Improvements and all easements and other real property rights and interests appurtenant to the Property);

TOGETHER WITH all right, title and interest of Trustor in and to all options to purchase or lease the Property or any portion thereof or interest therein;

TOGETHER WITH all right, title and interest of Trustor in and to all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, and all tenements, hereditaments and appurtenances thereof and thereto, and all development rights, mineral rights, water rights and shares of stock evidencing the same;

TOGETHER WITH all right, title and interest of Trustor in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property;

TOGETHER WITH all interests, estates or other claims, both in law and in equity, which Trustor now has or may hereafter acquire in the Property; and

Trustor further GRANTS, TRANSFERS, CONVEYS AND ASSIGNS to BENEFICIARY as security for the Secured Obligations, as such term is defined below, all right, title and interest of Trustor in and to all accounts held by Beneficiary in connection with the loan transaction secured hereby, including the loan funds, whether disbursed or not, and the account in which Trustor, as borrower, has or will deposit borrower's funds in connection with such transaction;

TOGETHER WITH all right, title and interest of Trustor in and to all claims, causes of action and recoveries by settlement or otherwise for any damage to, or loss, taking, or diminution in the value of, any of the Property, or for any breach (or rejection in bankruptcy) of any lease of the Property or Collateral (as hereinafter defined) to Trustor as lessee, by any lessor thereunder (or such lessor's trustee in bankruptcy);

TOGETHER WITH all right, title and interest of Trustor in and to all tangible personal property owned by Trustor, whether or not acquired with the Loan proceeds, and now or at any time hereafter held or stockpiled on, at or off the Property for incorporation into or use in connection with the Improvements, including, but not limited to: all goods, materials, supplies, tools, chattels, furniture, machinery, equipment, engines, appliances and fixtures now or later to be attached to, placed in or on, or used in connection with the use, enjoyment, occupancy or operation

of all or any part of the Property and the Improvements, including those used for generating or distributing air, water, heat, electricity, light, fuel or refrigeration, or for ventilating or sanitary purposes, or for the exclusion of vermin or insects, or for the removal of dust, refuse or garbage; all wall beds, wall safes, built-in furniture and installations, shelving, lockers, partitions, doorstops, vaults, motors, elevators, dumbwaiters, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, draperies, drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and carpeting, plumbing, bathtubs, sinks, basins, pipes, faucets, water closets, laundry equipment, washers, dryers, ice boxes, refrigerators, heating units, stoves, ovens, ranges, dishwashers, disposals, water heaters, incinerators, furniture, fixtures and furnishings, communications systems, all specifically designed installations and furnishings, all building materials, supplies and equipment now or hereafter delivered to the Property; together with all additions to, substitutions for, changes in or replacements or renewals of the whole or any part of such articles of property; all of such items, whether now or hereafter installed, being hereby declared to be for all purposes of this Deed of Trust a part of the Property;

TOGETHER WITH all personal property located at any other location and marked for or identified on the books and records of the Borrower, the general contractor, any subcontractor or materialman as being intended for incorporation into the Improvements;

TOGETHER WITH all building permits and any other licenses and approvals that may be required by the governmental authorities having or exercising jurisdiction over the construction of the Improvements;

TOGETHER WITH all plans and any working drawings that are used or intended for use in constructing the Improvements, whether in the possession of the Trustor, any architect employed by Trustor, the general contractor, any subcontractor or materialman;

TOGETHER WITH all the estate, interest, right, title or other claim or demand, including claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire in the Property, and any and all awards made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property, including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages;

TOGETHER WITH all refunds, rebates, reimbursements, reserves, deferred payments, deposits, cost savings, governmental subsidy payments, government-registered credits (such as emissions reduction credits), other credits, waivers and payments, whether in cash or in kind, due from or payable by (i) any federal, state, municipal or other governmental or quasi-governmental agency, authority or district (a "Governmental Agency") or (ii) any insurance or utility company, relating to any or all of the Property or arising out of the satisfaction of any conditions imposed upon or the obtaining of any approvals for the development of the Property;

TOGETHER WITH all refunds, rebates, reimbursements, credits and payments of any kind due from or payable by any Governmental Agency for any taxes, special taxes, assessments, or similar governmental or quasi-governmental charges or levies imposed upon Trustor with respect to the Property or upon any or all of the Property itself or arising out of the satisfaction of any conditions imposed upon or the obtaining of any approvals for the development of the Property; and

TOGETHER WITH all rights that Trustor may have as declarant under any covenants, conditions or restrictions affecting the Property.

The entire estate, property and interest hereby conveyed to Trustee may hereinafter be collectively referred to as the "Trust Estate."

THIS DEED OF TRUST IS MADE FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (THE "SECURED OBLIGATIONS") IN ANY ORDER OF PRIORITY THAT BENEFICIARY MAY CHOOSE:

Due, prompt and complete performance of each obligation, covenant and agreement of Trustor herein contained, and repayment of any funds advanced by or which Beneficiary or Trustee become obligated to advance under this Deed of Trust with interest thereon, at the Default Rate, as hereinafter provided.

Payment of the indebtedness in the principal sum of (i) One Million Nine Hundred Forty Eight Thousand and No/100 Dollars ($1,948,000.00), with interest thereon, and performance of any other obligations evidenced by one promissory note of even date herewith executed by Trustor, as Borrower, in favor of Beneficiary or order, (ii) Eight Hundred Sixty Five Thousand and No/100 Dollars ($865,000.00) with interest thereon, and performance of any other obligations evidenced by one promissory note of even date herewith executed by Trustor, as Borrower, in favor of Beneficiary or order (such notes collectively hereinafter referred to as the "Note"), (iii) any supplemental terms letter executed in connection with the Note and incorporated therein, and (iv) any modification, replacement, extension or renewal thereof, (the "Indebtedness").

[Intentionally Omitted]

Payment and performance of such further sums and obligations of the then record owner of Property arising from any and all existing and future agreements and transactions with Beneficiary when a writing evidences the parties' agreement that the obligation or advance be so secured.

Due, prompt and complete payment and performance of each obligation, covenant and agreement of Trustor under any other instrument heretofore or hereafter executed by Borrower having reference to or arising out of the loan transaction secured hereby which recites that the obligations thereunder are secured by this Deed of Trust.

[Intentionally Omitted.]

This Deed of Trust, the Note, any guaranty thereof and any other instrument given to evidence or further secure the payment and performance of any obligation secured hereby may hereinafter be referred to as the "Loan Documents." In no event shall this Deed of Trust be deemed given to secure the obligations of Trustor, or any other "Indemnitor" thereunder, arising under any Environmental Indemnity Agreement made in respect of the Property, or the obligations of the guarantor under any guaranty given in support of the Secured Obligations, or any other

obligor under an instrument given to further secure the Secured Obligations, notwithstanding the fact that such agreement, guaranty and instrument shall constitute Loan Documents as herein defined.

TRUSTOR WARRANTS TO BENEFICIARY AND TRUSTEE THAT:

It has good and marketable title to an indefeasible fee estate in the Property and good and marketable title to the balance of the Trust Estate, subject to no liens, encumbrances, easements, assessments, security interest, claims or defects of any kind except (a) those listed in Beneficiary's title insurance policy and approved by Beneficiary in writing (the "Exceptions"), and (b) real estate taxes for the current year;

The Exceptions and the real estate taxes are not delinquent or in default;

It has the right to grant a security interest in the Trust Estate;

This Deed of Trust creates a first priority lien on the Property;

It will maintain and preserve the lien of this Deed of Trust until the Indebtedness has been paid in full; and

It has good, right and lawful authority to grant the liens and security interest as provided in and by this Deed of Trust.

AFFIRMATIVE COVENANTS AND AGREEMENTS OF TRUSTOR:

Payment of Indebtedness. Trustor shall promptly pay and perform, or shall cause Borrower to pay and perform, each Secured Obligation in accordance with its terms.

Maintenance, Repair and Alterations. Trustor shall, with respect to the Property:

Keep the Property in good condition and repair;

Not remove, demolish, diminish in any respect or materially alter any of the Improvements (including landscaped and recreation areas) or any on-site paved parking area and/or structures, and in the event of the demolition or destruction in whole or in part of any of the fixtures, chattels or articles of personal property covered hereby and so long as such demolition or destruction is occasioned by a casualty for which Trustor is required to maintain insurance under this Deed of Trust, the same shall be replaced promptly by similar fixtures, chattels or articles of personal property free of superior titles, liens and claims and of a value at least equal to the value of the fixtures, chattels or articles of personal property demolished or destroyed;

Trustor shall not erect any new structures of any kind or additions to existing buildings or other structures which would alter the nature or lessen the quality of the Property or Improvements without the prior written consent of Beneficiary, which consent shall not be unreasonably withheld;

Complete or restore promptly and in good and workmanlike manner any building or other structure that may be constructed, damaged or destroyed and pay when due all claims for labor performed and materials furnished therefor;

Comply with all laws, ordinances, regulations, covenants, conditions and restrictions now or hereafter affecting the Property or any part thereof or requiring any alterations or improvements to be made thereon;

Not commit, suffer or permit waste or deterioration;

Not commit, suffer or permit any act upon Property in violation of law, including but not limited to all Federal, state and local statutes, ordinances or regulations relating to hazardous or toxic waste or waste products or hazardous substances;

Cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of the Property may be reasonably necessary to maintain its value, the specific enumerations herein not excluding the general;

Provide, maintain and deliver to Beneficiary, at no expense to Beneficiary or Trustee, such evidence of insurance coverage, as may be reasonably required from time to time by Beneficiary, in form and substance satisfactory to Beneficiary and naming Beneficiary as loss payee or additional insured, as the case may be;

Appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee created hereunder, and protect, preserve and defend the Property and title thereto and right of possession thereof; and pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust; and give Beneficiary and Trustee prompt notice in writing if any claim is asserted which does or could affect any of such matters, or if any action or proceeding is commenced which alleges or relates to any such claim;

Pay at least ten (10) days before delinquency all taxes, levies, charges and assessments affecting the Property, including assessments on appurtenant water stock, imposed by any public or quasi-public authority or utility company (including without limitation nongovernmental levies or assessments such as maintenance charges, owner association dues, charges or fees, and levies or charges resulting from covenants, conditions and restrictions affecting the Property), which are (or, if not paid, may become) a lien on all or part of the Property or any interest in it, or which may cause any decrease in the value of the Property or any part of it;

Pay and promptly discharge, at Trustor's cost and expense, all liens, encumbrances and charges upon the Trust Estate, or any part thereof or interest therein whether inferior or superior to this Deed of Trust and keep and maintain the same free from the claim of all persons supplying labor or materials that will enter into the construction of any and all buildings now being erected or that hereafter may be erected on the Property regardless of by whom such labor or materials may have been contracted, provided, however, that Trustor shall have the right to contest any such claim or lien so long as Trustor shall post a bond satisfactory to Beneficiary against such contested claim or lien. If Trustor shall fail to remove and discharge any such lien, encumbrance or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in a court a bond or the amount claimed or otherwise giving security for such claim, or by procuring such discharge in such manner as is or may be prescribed by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge any such lien, encumbrance or charge, together with interest thereon from the date of such expenditure at the Default Rate as hereinafter defined;

Cure within the time specified in any lease or sublease, or immediately if not specified, any defaults or breaches thereof and do all acts necessary to insure that any such lease or sublease remain in full force and effect;

With respect to any property described above which is less than a fee-simple estate, including but not limited to a leasehold estate:

Trustor shall cure within the time specified in the above-described lease, or other agreement, or immediately if not specified therein, any default or breaches thereof and to do all acts necessary to insure the above-described lease or other agreement remains in full force and effect;

Trustor shall not voluntarily terminate, surrender or subordinate any leasehold or other estate encumbered hereby and any attempt by Trustor to do so shall be wholly void and without any force and effect.

TRUSTOR FURTHER COVENANTS AND AGREES THAT TO EFFECTUATE THE TERMS AND CONDITIONS OF THIS DEED OF TRUST:

Inspections. Trustor shall have the rights from time to time without notice to inspect the Trust Estate.

Actions of Beneficiary to Preserve Trust Estate. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to (i) enter upon and take possession of the Property for such purposes; (ii) make additions, alterations, repairs and improvements to the Trust Estate that Beneficiary may consider necessary or proper to keep the Trust Estate in good condition and repair; (iii) appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (iv) pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and (v) in exercising any such powers, pay necessary expenses, employ counsel and pay reasonable fees therefor. Trustor shall pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the highest amount set forth in any obligation secured hereby following a default, or if the obligation secured hereby does not specify a rate of interest, at a rate of interest equal to the Beneficiary's Prime Rate as it may exists from time to time plus five percent (5.0%) but in no event less than ten percent (10.0%) per annum (the "Default Rate").

Indemnity. Trustor agrees to indemnify and hold Beneficiary, and any of its successors in interest, harmless from any waste or violations of law, including but not limited to all Federal, state and local statutes, ordinances or regulations relating to the environment and hazardous or toxic wastes.

Condemnation. Trustor hereby absolutely and irrevocably assigns to Beneficiary, and authorizes the payor to pay to Beneficiary, all awards of damages and all other compensation payable directly or indirectly in connection with any condemnation, proposed condemnation or taking for public or private use of or injury to the Property or any interest therein, and shall notify Beneficiary immediately upon obtaining knowledge of the institution of any proceedings therefor. Beneficiary, if it so chooses, may participate in any action or proceeding relating to any condemnation as herein contemplated. All moneys paid pursuant to this paragraph shall be applied first toward reimbursement of all of Beneficiary's costs and expenses of recovering such moneys, including attorneys' fees, and then in reduction of the principal amount of the Indebtedness to the extent necessary to render its security unimpaired. To the extent the Secured Obligations include obligations to reimburse the Beneficiary for moneys the Beneficiary is committed to advance to Trustor or third persons in the future, such award of damages shall be held as collateral for such reimbursement obligation in lieu of the property that is condemned. In the event of a partial taking in condemnation, the proceeds shall be apportioned in accord with the provisions of California Code of Civil Procedure Section 1265.225, as it is in effect at the time of the award. An action for inverse condemnation shall be deemed an action for condemnation under this paragraph.

Insurance. Insurance proceeds shall be held, in trust, by Beneficiary and applied to the reasonable costs of repair and restoration of the Property if such proceeds, together with funds supplied by Trustor, are sufficient to restore the Property in such a manner that the Beneficiary's security interest hereunder remains unimpaired. If the insurance proceeds, together with funds supplied by Trustor, are not sufficient to restore the Property in such manner that the Beneficiary's security interest hereunder remains unimpaired, said proceeds, at the option of Beneficiary, may be applied to the obligation secured hereby or to restoration of the property. If Trustor disagrees with Beneficiary's disposition of insurance proceeds hereunder, Trustor agrees to submit the matter to binding arbitration before a three-member panel (or one-member panel if the insurance proceeds are less than $200,000) of the American Arbitration Association pursuant to the rules and regulations of the American Arbitration Association. The arbitrators shall also apportion the costs of arbitration, including attorneys' fees, to the extent each party has prevailed.

ASSIGNMENT OF RENTS. Trustor hereby gives to, confers upon and absolutely assigns to Beneficiary all of Trustor's right, power and interest, during the continuance of these Trusts, in and to the rents, issues and profits of the Property (the "Rents"), reserving unto Trustor the right, prior to the occurrence of any Event of Default, as defined below, by Trustor, and authority to collect and retain the Rents as they

become due and payable. Upon any such Event of Default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of the Property or any part thereof, in its own name sue for or otherwise collect the Rents including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine, and Trustor hereby appoints Beneficiary its attorney-in-fact, coupled with an interest, to perform any and all of the foregoing. The entering upon and taking possession of the Property, the collection of the Rents and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. The assignment of the Rents contained in this Deed of Trust is absolute and constitutes a present transfer of Trustor's interest in existing and future Rents with respect to the Property described in this Deed of Trust, effective upon the execution and delivery of this Deed of Trust.

STATEMENT FEE. Trustor or any other person legally entitled thereto agrees to pay $60.00 for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby.

SUBSTITUTION OF TRUSTEE. Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee.

RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. At any time or from time to time, without liability therefor and without notice, Beneficiary may:
release any person liable for payment of any Secured Obligations; extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security; or alter, substitute or release any property securing the Secured Obligations. At any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the evidence of the obligation secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Beneficiary may cause Trustee to: reconvey any part of the Property without any warranty; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof.

RECONVEYANCE. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid and/or performed, Beneficiary's statement that no further commitment exists to make future advances or extend credit, and upon surrender of this Deed of Trust and the evidence of the Secured Obligations to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property or the portion thereof then held hereunder. Upon written request of Beneficiary, if less than all sums secured hereby have been paid, Trustee shall reconvey, without warranty, the portion of the Property then held hereunder specified by Beneficiary. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Neither Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Five (5) years after issuance of such full reconveyance, Trustee may destroy the evidence of indebtedness and this Deed of Trust (unless directed in such request to retain them).

ACCELERATING TRANSFER, EVENTS OF DEFAULT AND REMEDIES.

Accelerating Transfer. SHOULD THE TRUSTOR WITHOUT THE PRIOR WRITTEN CONSENT OF BENEFICIARY, SELL, CONVEY, TRANSFER, DISPOSE OF OR ENCUMBER THE PROPERTY OR ANY

PART THEREOF OR ANY INTEREST THEREIN, ENTER INTO A LEASE COVERING ALL OR ANY

PORTION THEREOF OR AN UNDIVIDED INTEREST THEREIN, WHETHER VOLUNTARILY, INVOLUNTARILY OR OTHERWISE, OR ENTER INTO AN AGREEMENT SO TO DO WITHOUT THE PRIOR WRITTEN CONSENT OF BENEFICIARY BEING FIRST HAD AND OBTAINED, OR SHOULD ANY HOLDER OF AN EQUITY INTEREST IN TRUSTOR TRANSFER OR ENCUMBER SUCH INTEREST, WHETHER VOLUNTARILY, INVOLUNTARILY OR OTHERWISE (ANY SUCH EVENT, AN "ACCELERATING TRANSFER"), THEN BENEFICIARY MAY AT ITS OPTION DECLARE ALL SUMS SECURED HEREBY IMMEDIATELY DUE AND PAYABLE. THIS PROVISION SHALL APPLY TO EACH AND EVERY SALE, CONVEYANCE, TRANSFER, DISPOSITION OR ENCUMBRANCE, REGARDLESS OF WHETHER OR NOT BENEFICIARY HAS CONSENTED TO, OR WAIVED, ITS RIGHT HEREUNDER, WHETHER BY ACTION OR NON-ACTION, IN CONNECTION WITH ANY PREVIOUS SALE, CONVEYANCE, TRANSFER, DISPOSITION OR ENCUMBRANCE, WHETHER ONE OR MORE. AN ACCELERATED TRANSFER SHALL NOT INCLUDE A SALE, LEASE OR OTHER TRANSFER TO UNITED NATURAL FOODS, INC., A DELAWARE CORPORATION, OR ANY OF ITS DIRECT OR INDIRECT SUBSIDIARIES AS LONG AS THE NET WORTH OF THE TRANSFEROR IS AT LEAST EQUAL TO THE NET WORTH OF TRUSTOR, PROVIDED THAT NO PARTY SHALL BE RELEASED FROM LIABILITY UNDER THE LOAN DOCUMENTS, IN CONNECTION WITH ANY SUCH TRANSFER.

Events of Default. Any of the following events shall be deemed an event of default ("Event(s) of Default") hereunder:

Trustor fails to perform any obligation to pay money on the Note or this Deed of Trust, when and as the same shall become due and payable, whether at maturity or by acceleration or as part of a prepayment or otherwise, and does not cure that failure within ten (10) days after written notice from Beneficiary or Trustee.

[Intentionally Omitted.]

Trustor fails in the due, prompt and complete observance and performance of any obligation, covenant or agreement contained in this Deed of Trust, other than one to pay money, and the continuation thereof for a period of twenty (20) days after written notice thereof from Beneficiary to Trustor (the "Initial Cure Period"), and Beneficiary, exercising reasonable judgment, determines that the cure cannot reasonably be completed at or before the expiration of the Initial Cure Period.

The occurrence of a default under any Secured Obligation.

The occurrence of any Event of Default, as defined therein, under any of the other Loan Documents.

Default under any agreement to which Trustor is a party, which agreement relates to the borrowing of money by Trustor from any person and which borrowing is secured by a lien on the Property, regardless of whether Beneficiary has consented to such lien, and the indebtedness secured thereby is declared due and payable prior to the date on which such indebtedness would otherwise become due and payable.

The enumeration of specific defaults above which are also covenants herein shall not create any implication that other defaults which are also covenants but are not specifically enumerated are of lesser dignity.

Remedies. Upon the occurrence and during the continuance of any Event of Default, Beneficiary may, at its option and without notice or demand upon Trustor, exercise any one or more of the following remedies:

Declare all Indebtedness and any other sums secured hereby to be immediately due and payable and the same shall thereupon become due and payable without any presentment, demand, protest or notice of any kind.

In person or by agent or by a receiver appointed by a court, with or without bringing any action or proceeding and without regard to the adequacy of its security, the solvency of Trustor or the existence of waste, enter upon, take possession of, manage and operate the Property, or any part thereof, or any other portion of the Trust Estate, in its own name or in the name of Trustee, and do any acts that Beneficiary deems necessary or desirable to preserve the value, marketability or rentability of the Property and the balance of the Trust Estate, or part thereof or interest therein, to increase the income therefrom or to protect the security thereof, including without limitation the right to do any of the following: make, modify, enforce, cancel or accept surrender of any Leases now in effect or hereafter in effect on the Property or any part thereof; remove and evict any lessees; increase or decrease rents; decorate, clean and repair; incur and pay reasonable management, brokerage and attorneys' fees; maintain a reserve for replacement; and terminate the license granted to Trustor to collect the Rents, and, with or without taking possession of the Property, in Beneficiary's own name, demand, collect, receive, sue for, attach and levy the Rents, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection including attorneys' fees, upon any Indebtedness, all in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default. The enforcement of such right or remedy by Beneficiary, once exercised, shall continue for so long as Beneficiary shall elect notwithstanding that the collection and applications of the Rents may have cured for the time being the original default, and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of Rents. Trustee or Beneficiary shall be entitled to exercise every right provided for in any of the Loan Documents or by law upon occurrence of any Event of Default, including the right to exercise the power of sale contained herein. Any of the actions referred to in this Paragraph 0 may be taken by Beneficiary, either in person or by agent, with or without bringing any action or proceeding, or by receiver appointed by a court, and any such action may also be taken irrespective of whether any notice of default or election to sell has been given hereunder. Further, Beneficiary, at the expense of Trustor, either by purchase, repair, or construction, may from time to time maintain and restore the Property, or any part thereof, and complete construction of any Improvements uncompleted as of the date thereof and in the course of such completion may make such changes in the contemplated Improvements as Beneficiary may deem desirable and may insure the same.

Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof.

Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Trust Estate to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the county in which the Property is located.

Proceed as to both the real and personal property in accordance with Beneficiary's rights and remedies in respect of the Property, or proceed to sell any personal property separately and without regard to the Property in accordance with Beneficiary's rights and remedies.

Exercise any or all of the other rights and remedies provided for herein, in any of the Loan Documents or other document or agreement now or hereafter securing all or any portion of the Secured Obligations, or available under law or in equity.

Non-Judicial Foreclosure. Should Beneficiary elect to foreclose by exercise of the power of sale herein contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust and the Note and such receipts and evidence of expenditures made and secured hereby as Trustee may require. To the extent the obligation secured hereby arises from a commitment of Beneficiary to make future advances either to Trustor or a third party or extend credit subsequent to the recordation of a Notice of Default hereunder, the sums secured hereby shall also include the amount of such commitment to make future advances or extend credit, and subject to acceleration as provided in the previous paragraph. The Trustee shall pay such amount at such time as it pays all other sums secured hereby and the Beneficiary shall hold same as additional collateral for the obligation secured hereby, at such interest as is available to Beneficiary's customers in an insured deposit account with no restrictions on withdrawal.

Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, mailed or delivered to Trustor such notice of default and election to sell as is then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such notice of default and after notice of sale has been given as required by law, sell the Trust Estate at time and place of sale fixed by it in such notice of sale, either as a whole, or in separate lots or parcels, and in such order as it may determine, at public auction, to the highest bidder for cash in lawful money of the United States payable at the time of sale. If the Property consists of more than one lot or parcel, the lots or parcels may be sold separately, together or in any combination, and in such order as Beneficiary determines, at the sole discretion of the Beneficiary. Trustor waives the right to direct the order in which the Property may be sold when it consists of more than one lot or parcel. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or

facts shall be conclusive proof of the truthfulness thereof. Any person, including without limitation Trustor, Trustee or Beneficiary, may purchase at such sale and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. If allowed by law, Beneficiary, if it is the purchaser, may turn in the Note at the amount owing thereon toward payment of the purchase price (or for endorsement of the purchase price as a payment on the Note if the amount owing thereon exceeds the purchase price). Trustor hereby expressly waives any right of redemption after sale that Trustor may have at the time of sale or that may apply to the sale.

After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.

Trustee may postpone sale of all or any portion of the Trust Estate by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement or by subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement; or Trustee may, in its discretion, give a new notice of sale. Beneficiary may rescind any such notice of default at any time before Trustee's sale by executing a notice of rescission and recording the same. The recordation of such notice shall constitute a cancellation of any prior declaration of default and demand for sale and of any acceleration of maturity of the Indebtedness effected by any prior declaration or notice of default. The exercise by Beneficiary of the right of rescission shall not constitute a waiver of any default and demand for sale, or notices of default and of election to cause the Property to be sold, nor otherwise affect the Note or this Deed of Trust, or any of the rights, obligations or remedies of Beneficiary or Trustee hereunder.

APPOINTMENT OF RECEIVER. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without notice to Trustor or anyone claiming under Trustor, and without regard to the then value of the Trust Estate or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided in Paragraph 0 and shall continue as such and exercise all such powers until the later of (i) the date of confirmation of sale of the Trust Estate; (ii) the disbursement of all proceeds of the Trust Estate collected by such receiver and the payment of all expenses incurred in connection therewith; or (iii) the termination of such receivership with the consent of Beneficiary or pursuant to an order by a court of competent jurisdiction.

REMEDIES NOT EXCLUSIVE. Trustee and Beneficiary, and each of them, shall be entitled to enforce payment and performance of any of the Secured Obligations and to exercise all rights and powers under this Deed of Trust or under any of the other Loan Documents or other agreement or any laws now or hereafter in force, notwithstanding that some or all of the Indebtedness and Secured Obligations may now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement, whether by court action or pursuant to the power of sale or other powers herein contained, shall prejudice or in any manner affect Trustee's or Beneficiary's right to realize upon or enforce any other security now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Beneficiary or Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Trustee or Beneficiary, or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary, and either of them may pursue inconsistent remedies.

ACCOMMODATION DEED OF TRUST. With respect to any Trustor under this Deed of Trust who is not obligated to repay the Indebtedness, such Trustor:

Authorizes Beneficiary without notice or demand and without affecting the security granted hereunder, from time to time to renew, compromise, extend, accelerate or otherwise change the time for payment of or otherwise change the terms of the indebtedness secured hereby, or any part thereof, including increase or decrease of the rate of interest thereon;

Waives any right to require Beneficiary to proceed against the persons liable for the Indebtedness secured hereby, to proceed against or exhaust any other security securing the Secured Obligations secured hereby or to pursue any other remedy in Beneficiary's power whatsoever;

Waives any defense arising by reason of any disability, other defense, or the cessation from any cause whatsoever of the liability of any person liable for the Indebtedness secured hereby.

Until all indebtedness secured by this Deed of Trust shall have been paid in full, and no commitment on the part of the Beneficiary to make future advances or extend credit either to Trustor or a third party exists, Trustor shall have no right of subrogation, and waives any right to enforce any remedy which Beneficiary now has or may hereafter have against any person liable for the Indebtedness, and waives any benefit of, any right to participate in any security now or hereafter held by Beneficiary and without limiting the generality of the foregoing, Trustor specifically waives and relinquishes as against Beneficiary any defense or benefit otherwise available to Trustor should Beneficiary make an election of remedies as against any person liable for the Indebtedness (and irrespective of the circumstances or manner in which or whereby such election is made) which destroys or impairs Trustor's subrogation rights or rights to proceed against any person liable for the indebtedness secured hereby for reimbursement and, further, to the extent Trustor may be deemed a guarantor hereunder, such guarantor waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed the guarantor's rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. Trustor assumes the responsibility for being and keeping himself informed of the financial condition of any person liable for the indebtedness secured hereby and of

all other circumstances bearing upon the risk of nonpayment of the indebtedness secured hereby which diligent inquiry would reveal, and agrees that Beneficiary shall have no duty to advise Trustor of information known to it regarding such condition or circumstances.

MISCELLANEOUS.

Governing Law; Severability. This Deed of Trust shall be governed by the laws of the State of California. In the event that any provision or clause of any of the Loan Documents conflicts with applicable laws, such conflicts shall not affect other provisions of such Loan Documents which can be given effect without the conflicting provision, and to this end, the provisions of the Loan Documents are declared to be severable.

Amendment; No Implied Waiver. This Deed of Trust cannot be modified, waived, discharged or terminated orally, but only by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge or termination is asserted. No waiver by Beneficiary of any default or breach by Trustor hereunder shall be implied from any omission by Beneficiary to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default identified in the waiver and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by Beneficiary to or of any act by Trustor requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.

Notices. All written notices or demands of any kind that any party hereto may be required or may desire to serve on any other party hereto in connection with this Agreement shall be served (as an alternative to personal service) by registered or certified mail, recognized overnight courier service or facsimile transmission. Any such notice or demand so to be served by registered or certified mail, recognized overnight courier service or facsimile transmission shall be delivered with all applicable delivery charges thereon fully prepaid and, if the party so to be served be Trustor, addressed to Trustor as follows:

Albert's Organics, Inc. 3268-3320 E. Vernon Avenue Vernon, California 90058 Attn: Michael S. Fund, Kevin T. Michel And Barclay Hope
Fax No.: ______________________

with a copy thereof to:

Cameron & Nittleman LLP 56 Exchange Terrace
Providence, RI 02903
Attn: J. F. Whinery Jr.

Fax No.: (401) 331-5787

and, if the party so to be served be Beneficiary, addressed to Beneficiary as follows:

City National Bank
606 South Olive Street, 20th Floor Los Angeles, CA 90014
Attention: Cindy L. Cindrich, V.P.

Fax No.: (213) 833-4817

with a copy thereof to:

City National Bank
400 N. Roxbury Drive
Beverly Hills, CA 90210 Attention: General Counsel Fax No.: (310) 888-6232

Service of any such notice or demand so made by mail, recognized overnight courier or facsimile transmission shall be deemed complete on the date of actual delivery as shown by the addressee?s registry or certification receipt or ?answer back confirmation,? as applicable, or at the expiration of the third business day after the date of dispatch, whichever is earlier in time. Either party hereto may from time to time, by notice in writing served upon the other as aforesaid, designate a different mailing address to which or a different person to whose attention all such notices or demands are thereafter to be addressed.

Successors and Assigns. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the evidence of the obligation secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. By accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

Trustee's Acceptance. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law, and by its acceptance hereof, Trustee covenants faithfully to perform and fulfill the trusts herein created, being liable,

however, only for willful negligence or misconduct, and Trustee hereby waives any statutory fee and agrees to accept reasonable compensation, in lieu thereof, for any services rendered by it in accordance with the terms hereof. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

Subrogation. To the extent that proceeds of the Note are used, directly or indirectly, to pay off, satisfy or discharge, in whole or in part, any outstanding lien, charge or prior encumbrance against the Trust Estate or any part thereof, then as additional security hereunder Beneficiary shall be subrogated to any and all rights, superior titles and liens owned or claimed by any owner or holder of such outstanding liens, charges and prior encumbrances, however remote and irrespective of whether said liens, charges or encumbrances have been released of record by the holder thereof upon payment.

No Merger. If both the lessor's and lessee's estates under any Lease or any portion thereof that constitutes a part of the Trust Estate shall at any time become vested in one owner, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger, and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the foreclosure of the lien created by this Deed of Trust on the Trust Estate pursuant to the provisions hereof, any leases or subleases then existing and created by Trustor shall not be destroyed or terminated by application of the law of merger or as a matter of law as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice to such tenant or subtenant.

Certain Rights of Beneficiary. Without affecting the liability of Trustor or of any other person who is or shall become bound by the terms of this Deed of Trust or who is or shall become liable for the performance of any obligation secured hereby, Beneficiary may, in such manner, upon such terms and at such times as it deems best and without notice or demand, release any party now or hereafter liable for the performance of any such obligation, extend the time for such performance, alter any of the terms of any such obligation; or accept additional security therefor, and alter, substitute or release any property securing such performance. No exercise or non-exercise by Beneficiary of any of its rights under this Deed of Trust, no dealing by Beneficiary with any person, firm or corporation and no change, impairment, loss or suspension of any right or remedy of Beneficiary shall in any way affect any of the obligations of Trustor hereunder or any security furnished by Trustor, or give Trustor any recourse against Beneficiary.

Headings. Headings are for convenience only and are not intended as a limitation on the content of the paragraph following or as an aid to the construction thereof.

Counterparts. This Deed of Trust may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

Deed of Trust as Financing Statement. This Deed of Trust is intended to constitute a security agreement between Trustor and Beneficiary and Trustor hereby grants to Beneficiary a security interest in each item or component of the Trust Estate in which a security interest may be granted under the Uniform Commercial Code. The recording of this Deed of Trust shall be effective as a financing statement filed as a fixture filing under Section 9402(6) of the Code with respect to any Property which now is or later may become fixtures attached to the Property or the Improvements, and is to be recorded with the appropriate authority where the Property (including said fixtures) is situated. The mailing address of Trustor is set forth above on the first page of this Deed of Trust and the address of Beneficiary from which information concerning the security interest may be obtained is set forth above on the first page of this Deed of Trust.

[Intentionally Omitted.]

Copy of Notice of Default. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to him at his address hereinbefore set forth.
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed as of the day and year first written above.

"Trustor"

Albert's Organics, Inc., a California corporation

(ALL SIGNATURES MUST BE ACKNOWLEDGED BY A NOTARY PUBLIC)

STATE OF CALIFORNIA
COUNTY OF SS.

On this _______ day of ____________________________ , 2000, before me, _________ a Notary Public in and for the State of California, personally appeared ________ personally known to me (or proved on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

EXHIBIT "A"

LEGAL DESCRIPTION