ex10-17.htm

NNN LEASE (MULTI-TENANT)

BETWEEN

METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)

AND

UNITED NATURAL FOODS, INC. (TENANT)

13204 Philadelphia Street

Fontana, California

TABLE OF CONTENTS

			PAGE

ARTICLE ONE - BASIC LEASE PROVISIONS			1
	1.01	BASIC LEASE PROVISIONS	1
	1.02	ENUMERATION OF EXHIBITS & RIDER(S)	2
	1.03	DEFINITIONS	2

ARTICLE TWO - PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING..			7
	2.01	LEASE OF PREMISES	7
	2.02	TERM	7
	2.03	FAILURE TO GIVE POSSESSION	7
	2.04	AREA OF PREMISES	8
	2.05	CONDITION OF PREMISES	8
	2.06	COMMON AREAS	8
	2.07	TENANT'S PARKING AREA & TRUCK COURT	8
	2.08	DISPUTE RE SUBSTANTIAL COMPLETION OF OR DEFECTS IN PREMISES	9

ARTICLE THREE - RENT			10

ARTICLE FOUR - RENT ADJUSTMENTS AND PAYMENTS			10
	4.01	RENT ADJUSTMENTS	10
	4.02	STATEMENT OF LANDLORD	10
	4.03	BOOKS AND RECORDS	11
	4.04	TENANT OR LEASE SPECIFIC TAXES	11

ARTICLE FIVE - SECURITY DEPOSIT			11

ARTICLE SIX -UTILITIES & SERVICES			11
	6.01	LANDLORD'S OBLIGATIONS GENERALLY	11
	6.02	TENANT'S OBLIGATIONS & PAYMENT	12
	6.03	TELEPHONE SERVICES	12
	6.04	FAILURE OR INTERRUPTION OF UTILITY OR SERVICE	13
	6.05	INTENTIONALLY OMITTED	13
	6.06	SIGNAGE	13
	6.07	STANDBY GENERATOR	14
	6.08	PROPANE TANK	15

ARTICLE SEVEN - POSSESSION, USE AND CONDITION OF PREMISES			15
	7.01	POSSESSION AND USE OF PREMISES	15
	7.02	HAZARDOUS MATERIAL	16
	7.03	LANDLORD ACCESS TO PREMISES; APPROVALS	19
	7.04	QUIET ENJOYMENT	20

ARTICLE EIGHT - MAINTENANCE			20
	8.01	LANDLORD'S MAINTENANCE	20
	8.02	TENANT'S MAINTENANCE	21
	8.03	TENANT'S RIGHT TO MAKE CERTAIN REPAIRS	21

ARTICLE NINE - ALTERATIONS AND IMPROVEMENTS			22
	9.01	TENANT ALTERATIONS	22
	9.02	LIENS	23

ARTICLE TEN - ASSIGNMENT AND SUBLETTING			23
	10.01	ASSIGNMENT AND SUBLETTING	23
	10.02	RECAPTURE	25
	10.03	EXCESS RENT	25
	10.04	TENANT LIABILITY	25

ARTICLE ELEVEN - DEFAULT AND REMEDIES			25
	11.01	EVENTS OF DEFAULT	25
	11.02	LANDLORD'S REMEDIES	25
	11.03	ATTORNEY'S FEES	27
	11.04	BANKRUPTCY	27
	11.05	LANDLORD'S DEFAULT	28

ARTICLE TWELVE - SURRENDER OF PREMISES			28
	12.01	IN GENERAL	28
	12.02	LANDLORD'S RIGHTS	29

ARTICLE THIRTEEN - HOLDING OVER			29

ARTICLE FOURTEEN - DAMAGE BY FIRE OR OTHER CASUALTY			29
	14.01	SUBSTANTIAL UNTENANTABILITY	29
	14.02	INSUBSTANTIAL UNTENANTABILITY	30
	14.03	RENT ABATEMENT	30
	14.04	WAIVER OF STATUTORY REMEDIES	30

ARTICLE FIFTEEN - EMINENT DOMAIN			30
	15.01	TAKING OF WHOLE OR SUBSTANTIAL PART	30
	15.02	TAKING OF PART	31
	15.03	COMPENSATION	31

ARTICLE SIXTEEN - INSURANCE			31
	16.01	TENANT'S INSURANCE	31
	16.02	FORM OF POLICIES	31
	16.03	LANDLORD'S INSURANCE	31
	16.04	WAIVER OF SUBROGATION	32
	16.05	NOTICE OF CASUALTY	32

ARTICLE SEVENTEEN - WAIVER OF CLAIMS AND INDEMNITY			32
	17.01	WAIVER OF CLAIMS	32
	17.02	INDEMNITY BY TENANT	33
	17.03	WAIVER OF CONSEQUENTIAL DAMAGES	35

ARTICLE EIGHTEEN - RULES AND REGULATIONS			33
	18.01	RULES	33
	18.02	ENFORCEMENT	33

ARTICLE NINETEEN - LANDLORD'S RESERVED RIGHTS			33

ARTICLE TWENTY - ESTOPPEL CERTIFICATE			34
	20.01	IN GENERAL	34
	20.02	ENFORCEMENT	34

ARTICLE TWENTY-ONE - (INTENTIONALLY OMITTED).			34

ARTICLE TWENTY-TWO - REAL ESTATE BROKERS			34

ARTICLE TWENTY-THREE - MORTGAGEE PROTECTION			34
	23.01	SUBORDINATION AND ATTORNMENT	34
	23.02	MORTGAGEE PROTECTION	35

ARTICLE TWENTY-FOUR - NOTICES.			35

ARTICLE TWENTY-FIVE - INTENTIONALLY OMITTED			36

ARTICLE TWENTY-SIX - MISCELLANEOUS			36
	26.01	LATE CHARGES	36
	26.02	NO JURY TRIAL; VENUE; JURISDICTION	36
	26.03	LANDLORD CONSENT TO ENCUMBRANCE OF TENANT'S PERSONAL PROPERTY	36
	26.04	INTENTIONALLY OMITTED	37
	26.05	TENANT AUTHORITY	37
	26.06	ENTIRE AGREEMENT	37
	26.07	MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE	37
	26.08	EXCULPATION	37
	26.09	ACCORD AND SATISFACTION	37
	26.10	LANDLORD'S OBLIGATIONS ON SALE OF BUILDING	37
	26.11	BINDING EFFECT	37
	26.12	CAPTIONS	37
	26.13	TIME; APPLICABLE LAW; CONSTRUCTION	37
	26.14	ABANDONMENT	38
	26.15	LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES	38
	26.16	SECURITY SYSTEM	38
	26.17	NO LIGHT, AIR OR VIEW EASEMENTS	38
	26.18	RECORDATION	38
	26.19	SURVIVAL	38
	26.20	RIDERS	38

NNN LEASE (MULTI-TENANT)

ARTICLE ONE

BASIC LEASE PROVISIONS

1.01 BASIC LEASE PROVISIONS

In the event of any conflict between these Basic Lease Provisions and any other Lease provision, such other Lease provision shall control.

(1)	BUILDING AND ADDRESS:

The building located at the Project, which houses spaces with different street addresses, including:

13204 Philadelphia Street

Fontana, CA 92337

(2)	LANDLORD AND ADDRESS:

Metropolitan Life Insurance Company,

a New York corporation

Notices to Landlord shall be addressed:

Metropolitan Life Insurance Company

c/o Cushman & Wakefield

555 South Flower Street, Suite 4200

Los Angeles, CA 90071

Attention: Philadelphia Street Project Manager

with copies to the following:

Metropolitan Life Insurance Company

333 South Hope Street, Suite 2950

Los Angeles, CA 90071

Attention: EIM Manager

and

Metropolitan Life Insurance Company

400 South El Camino Real, 8th Floor

San Mateo, CA 94402

Attention: Associate General Counsel

Telephone number and person to contact in case of emergency (and as provided pursuant to Section 8.03), except as otherwise designated from time to time by Landlord or its Project Manager by written notice to Tenant: Sharon Hansen of Cushman & Wakefield

	Telephone number:	213-955-5100 &
	Cell Phone Number:	213-361-1591

(3)	TENANT AND ADDRESS:

(a)	Name: United Natural Foods, Inc.
(b)	State of formation & type of entity:	a Delaware corporation
(c)	Federal Tax Identification Number:	05-0376157
	Tenant shall notify Landlord of any change in the foregoing.

Notices to Tenant shall be addressed:

United Natural Foods, Inc.

c/o Mountain People's Warehouse Inc.

12745 Earhart Avenue

Auburn, CA 95602

Attention: Ginny Feth-Michel

with copies to the following:

Joseph F. Whinery, Jr.

Cameron & Mittleman LLP

56 Exchange Terrace

Providence, Rhode Island 02903

(4)	DATE OF LEASE: as of July 31, 2001

(5)	LEASE TERM: 123 months

(6)	PROJECTED COMMENCEMENT DATE: November 1, 2001

(7)	PROJECTED EXPIRATION DATE: expiration of 123 months after the Commencement Date

(8)	MONTHLY BASE RENT (initial monthly installment due upon Tenant's execution of this Lease):

Period from/to	Monthly		Monthly Rate/SF of Rentable Area
Months 01 – 02	$	0.00	$	0.00
Months 03 – 05	$	30,355.13	$	0.1525
Months 06 – 30	$	60,710.25	$	0.3050
Months 31 – 60	$	65,288.40	$	0.3280
Months 61 – 90	$	70,165.13	$	0.3525
Months 91 – 123	$	75,439.95	$	0.3790

(9)	RENT ADJUSTMENT DEPOSIT (initial monthly rate, until further notice):

$9,000.00 (initial monthly installment due upon Tenant's execution of this Lease)

(10)	RENTABLE AREA OF THE PREMISES: 199,050 square feet

(11)	RENTABLE AREA OF THE BUILDING: 380,650 square feet

(12)	SECURITY DEPOSIT: zero

(13)	SUITE NUMBER &/OR ADDRESS OF PREMISES: (to be designated hereafter)

(14)	TENANT'S SHARE: 52.3%

(15)	TENANT'S USE OF PREMISES: General office, warehouse, distribution and associated administrative uses.

(16)	PARKING SPACES: a total of 125 parking spaces in Tenant's Parking Area, as provided in Section 2.07.

(17)

BROKERS:

	Landlord's Broker:	CB Richard Ellis, Inc.

	Tenant's Brokers:	Travers McKinney Realty Corp., d/b/a McKinney
		Travers.ONCOR International & Kidder, Matthews & Segner,
		Inc.ONCOR International

1.02 ENUMERATION OF EXHIBITS & RIDER(S)

The Exhibits and Rider(s) set forth below and attached to this Lease are incorporated in this Lease by this reference:

EXHIBIT A Plan of Premises

EXHIBIT B Workletter Agreement

EXHIBIT C Site Plan; Truck Court & Tenant's Parking Area

EXHIBIT D Permitted Hazardous Material

EXHIBIT E Hazardous Material Plans

EXHIBIT F Form of Nondisturbance Agreement

EXHIBIT G (Intentionally omitted)

EXHIBIT H Permitted Vehicle Repairs

EXHIBIT I Illustrative Calculation of Monthly Base Rent for New Space

RIDER 1	Commencement Date Agreement
RIDER 2	Additional Provisions

1.03 DEFINITIONS

For purposes hereof, the following terms shall have the following meanings:

ADJUSTMENT YEAR(S): Every calendar year and partial calendar year during the Term of this Lease.

AFFILIATE: As defined in Section 10.01.

BUILDING: As specified in Section 1.01(1).

BUILDING SYSTEMS: The electrical, mechanical (including heating, ventilating, and air conditioning), plumbing, life-safety (including fire sprinkler system, and any fire alarm), communication, utility, gas (if any), security (if any) and elevator (if any) systems of the Building (collectively, the "Building Systems").

COMMENCEMENT DATE: The date specified in Section 1.01(6) as the Projected Commencement Date, unless changed by operation of Article Two.

COMMON AREAS: All areas of the Project made available by Landlord from time to time for the general common use or benefit of the tenants of the Building or Project, and their employees and invitees, or the public, as such areas currently exist and as they may be changed from time to time in accordance with Section 2.06.

DECORATION: Tenant Alterations which do not require a building permit and which do not affect the facade or roof of the Building, or involve any of the structural elements of the Building, or involve any of the Building Systems.

DEFAULT RATE: Two (2) percentage points above the Reference Rate, but in no event higher than the maximum rate permitted by Law.

ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation of any Hazardous Material or pertaining to environmental conditions on, under or about the Premises or any part of the Property, including the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).

EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by operation of Article Two.

FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion, strike or labor troubles, or any cause whatsoever beyond the reasonable control of Landlord, including water shortages, energy shortages or governmental preemption in connection with an act of God, a national emergency, or by reason of Law, or by reason of the conditions of supply and demand which have been or are affected by act of God, war or other emergency.

HAZARDOUS MATERIAL: Such substances, material and wastes which are or become regulated under any Environmental Law; or which are classified as hazardous or toxic or medical waste or biohazardous waste under any Environmental Law; and explosives, firearms and ammunition, flammable material, radioactive material, asbestos, polychlorinated biphenyls and petroleum and its byproducts.

INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the Property, the property manager and the leasing representatives for the Property and their respective directors, officers, agents and employees.

LAND: The parcel(s) of real estate on which the Building is located.

LANDLORD WORK: The construction or installation of improvements to be furnished by Landlord, if any, specifically described in the Workletter or other exhibits attached hereto.

LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements, orders, rulings or decisions now or hereafter adopted or made by any governmental body, agency, department or judicial authority having jurisdiction over the Property, the Premises or Tenant's activities at the Premises and any covenants, conditions or restrictions of record which affect the Property.

LEASE: This instrument and all exhibits and riders attached hereto, as may be amended from time to time.

LEASE YEAR: The twelve month period beginning on the first day of the first month following the Commencement Date (unless the Commencement Date is the first day of a calendar month in which case beginning on the Commencement Date), and each subsequent twelve month, or shorter, period until the Expiration Date.

MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).

MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument encumbering the Property.

NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and other holidays recognized by Landlord and any unions servicing the Building in accordance with their contracts.

OPERATING EXPENSES: All costs, expenses and disbursements of every kind and nature which Landlord shall pay or become obligated to pay in connection with the ownership, management, operation, maintenance, repair and replacement of the Property as follows, with such adjustments and exclusions as follow:

(a) Subject to the Exclusions specifically set forth in Subsection (c) below, Operating Expenses shall include the following, by way of illustration only and not limitation: (1) all costs, expenses and disbursements, including all charges of independent contractors, for all operation, services, maintenance, repair and replacements (and if any replacements are classified as capital costs, they shall be amortized as described in item (a)(6) below) provided by Landlord pursuant to Section 6.01, Section 8.01 or any other provision of the Lease, including all inspection contracts for the roof and roof membrane, preventive

maintenance contracts, maintenance contracts or service contracts with respect to any of the foregoing; (2) all insurance premiums and other costs (including deductibles), including the cost of rental insurance; (3) all license, permit and inspection fees; (4) all costs of water, sewer, or other utility or service which Landlord provides (and which Tenant does not itself provide or directly contract for and which is not separately metered or sub-metered to Tenant); (5) all costs of changing power, telephone or utility providers for the Building or Project; (6) all costs of capital improvements made to or capital assets acquired after the Commencement Date for the Building or Project that are intended to comply with Laws, reduce or control Operating Expenses or are reasonably necessary for the health or safety of the occupants of the Project, all of which capital costs, and all capital costs recoverable pursuant to item (a)(1) above, shall be amortized over the period determined in accordance with generally accepted accounting principles ("GAAP"), together with interest on the unamortized balance at the Reference Rate; (7) all dues, assessments and other expenses pursuant to any covenants, conditions and restrictions, or any reciprocal easements, or any owner's association now or hereafter affecting the Project; (8) all costs and expenses related to Landlord's retention of consultants in connection with the routine review, inspection, testing, monitoring, analysis and control of Hazardous Material, retention of consultants in connection with the clean-up of Hazardous Material, and all costs and expenses related to the implementation of recommendations made by such consultants concerning the use, generation, storage, manufacture, production, storage, release, discharge, disposal or clean-up of Hazardous Material on, under or about the Premises or the Project, except for any such costs to the extent due to Hazardous Material whose presence on, under or about the Project is caused by acts of Landlord; (9) all costs and fees incurred by Landlord in connection with the management and operation of this Lease and the Property, including the cost of those services which are customarily performed by a property management services company, but not in excess of the amount equal to two percent (2%) of the effective gross income of the Project (i.e., the total of the rental income, including base rent, Operating Expenses of the Project, and other expenses billed to tenants by Landlord, including, for example, sub-metered electrical charges); (10) all wages, salaries, payroll taxes, fringe benefits and other labor costs, including the cost of workers' compensation and disability insurance in connection with any of the foregoing; (11) all supplies, materials, equipment and tools in connection with any of the foregoing; and (12) all fees or other charges incurred in connection with voluntary or involuntary membership in any energy conservation, air quality, environmental, traffic management or similar organization.

(b) Operating Expenses shall be adjusted as described in this Subsection. In the event the Building is not 100% occupied during all of any Adjustment Year, or any other tenant in the Building provides itself (or contracts directly for) a service of a type which Landlord would supply under the Lease and which costs would be included in Operating Expenses if paid or incurred by Landlord, or any such tenant is separately metered or sub-metered for such service, then Operating Expenses for such Adjustment Year shall be increased, employing sound management practices, to equal the amount of Operating Expenses that would have been paid or incurred by Landlord had the Building been 100% occupied during the entire Adjustment Year and had such service been provided without separate metering or sub-metering, and the amount so determined shall be deemed to have been the amount of Operating Expenses for such Adjustment Year; provided, however, that such adjustment shall fairly allocate variable Operating Expenses so that Landlord does not, as a result of such adjustment, receive reimbursements from tenants in excess of its expenditures.

(c) Operating Expenses shall not include the following ("Exclusions"): (1) costs of alterations solely attributable to space to be occupied by Tenant or other new or existing tenants of the Project; (2) depreciation charges; (3) interest and principal payments on loans (except for interest on the unamortized balance of capital expenditures or improvements which Landlord is allowed to include in Operating Expenses as provided above); (4) ground rental payments; (5) real estate brokerage and leasing commissions; (6) advertising and marketing expenses; (7) repairs to the extent reimbursed by net proceeds of insurance or net payments by third parties; (8) expenses incurred in negotiating leases of other tenants in the Project or enforcing lease obligations of other tenants in the Project; (9) replacement of or structural repairs to: (a) the roof, (b) the exterior walls, (c) foundation or other structural elements (if any) of the Building; (10) cost of any service which is provided to other tenants without charge and which is either not offered to Tenant or is paid for directly by Tenant; (11) for the purpose of adjusting for certain utilities separately sub-metered to Tenant (including, for example, electricity) or services directly contracted for by Tenant (including, for example, janitorial service) and paid for by Tenant other than as Tenant's Share of Operating Expenses, Operating Expenses shall exclude such expenses with respect to the Premises and any other occupiable space in the Building; (12) costs of work, if any, required for the Base Building (as defined in the Workletter) to comply with the ADA (as defined in Article Seven) as applicable as of the execution date of the Lease or required for the Landlord Work to comply with the ADA as applicable as of Substantial Completion of the Landlord Work or required for the Common Areas to

comply with the ADA as applicable as of the execution date of the Lease; and (13) fines or penalties imposed upon Landlord and/or the Building due to any violation of any Law.

PREMISES: The space located in the Building at the Suite Number listed in Section 1.01(13) and depicted on Exhibit A attached hereto.

PROJECT or PROPERTY: As of the date hereof, the Project is known as Philadelphia Street and consists of the Building (whose general location is shown on the Site Plan attached as Exhibit C), together with the Land (including without limitation, vehicular and parking areas, landscaping and improvements on the Land), and any associated interests in real property, and the personal property, fixtures, machinery, equipment, systems and apparatus located in or used in conjunction with any of the foregoing. Landlord reserves the right from time to time to add or remove buildings, improvements and parcels of real estate to or from the Property, or to add or remove a building (or expand the Building) to or from the Property. Provided however, such changes shall not materially and adversely interfere with Tenant's access to the Premises and the Truck Court, or with Tenant's parking, subject to and as more particularly provided in Sections 2.06 and 2.07. In the

event of any such addition or removal which affects the Rentable Area of the Building or the rentable area of the Project, Landlord shall make a corresponding recalculation and adjustment of any affected rentable area and Tenant's Share.

REAL PROPERTY: The Property excluding any personal property.

REFERENCE RATE: The rate then most recently announced by Bank of America National Trust and Savings Association (or any other similar institution reasonably designated in writing by Landlord in the event Bank of America ceases to publish such rate) as its corporate base lending rate, from time to time announced.

RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment Deposits, and all other charges, payments, late fees or other amounts required to be paid by Tenant under this Lease.

RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses and Taxes. The Rent Adjustments shall be determined and paid as provided in Article Four.

RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the Rent Adjustment attributable to each month of the applicable Adjustment Year. Landlord may estimate and notify Tenant in writing of its estimate of Operating Expenses and Taxes and Tenant's Share of Operating Expenses and Taxes for the applicable Adjustment Year. The Rent Adjustment Deposit applicable for the Adjustment Year in which the Commencement Date occurs shall be the amount specified in Section 1.01(9) or by subsequent notice from Landlord to Tenant. Nothing contained herein shall be construed to limit the right of Landlord from time to time during any calendar year to revise its estimate of Operating Expenses and to notify Tenant in writing thereof and of revision by prospective adjustments in Tenant's Rent Adjustment Deposit payable over the remainder of such year. The last estimate by Landlord shall remain in effect as the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant in writing of a change.

RENTABLE AREA OF THE BUILDING: The amount of square footage set forth in Section 1.01(11), which includes the square footage of the utility room.

RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in Section 1.01(10).

SECURITY DEPOSIT: The funds specified in Section 1.01(12), if any, deposited by Tenant with Landlord as security for Tenant's performance of its obligations under this Lease.

SUBSTANTIALLY COMPLETE or SUBSTANTIAL COMPLETION: The completion of the Landlord Work or Tenant Work, as the case may be, except for minor insubstantial details of construction, decoration or mechanical adjustments which remain to be done, and which will not materially and adversely interfere with conduct of Tenant's business in the ordinary course.

TAXES:

(a) Taxes. All federal, state and local governmental taxes, assessments (including assessment bonds) and charges of every kind or nature, whether general, special, ordinary or extraordinary, which Landlord shall pay or become obligated to pay because of or in connection with the ownership, leasing, management, control or operation of the Property or any of its components (including any personal property used in connection therewith), which may also include any rental or similar taxes levied in lieu of or in addition to general real and/or personal property taxes. For purposes hereof, Taxes for any tax fiscal year shall be Taxes which are assessed for any period of such year, whether or not such Taxes are billed and payable in a subsequent year. There shall be included in Taxes for any tax fiscal year the amount of all reasonable fees, costs and expenses (including reasonable attorneys' fees) paid by Landlord during such year in seeking or obtaining any refund or reduction of Taxes. Taxes for any tax fiscal year shall be reduced by the net amount of any tax refund received by Landlord attributable to such year. If a special assessment payable in installments is levied against any part of the Property, Taxes for any year shall include only the installment of such assessment and any interest payable or paid during such year. Taxes shall not include any federal or state inheritance, general income, gift or estate taxes, except that if a change occurs in the method of taxation resulting in whole or in part in the substitution of any such taxes, or any other assessment, for any Taxes as above defined, such substituted taxes or assessments shall be included in the Taxes. Notwithstanding the foregoing, Taxes shall not include any amounts paid by Tenant directly pursuant to Section 4.04.

(b) Treatment of Transfer Increase from a Sale. Notwithstanding the foregoing, as more particularly provided below in this Subsection (b), only during the period (the "Protection Period") of the initial Term beginning on the Commencement Date and ending on the day before the fifth anniversary of the Commencement Date, a Transfer Increase (defined below) shall be excluded from Taxes. On and after the fifth anniversary of the Commencement Date there shall be no further exclusion of any Transfer Increase and Taxes shall include, without limitation, one hundred percent (100%) of all Taxes assessed. For purposes of this Subsection (b), the term "Transfer Reassessment" shall mean a reassessment of the Real Property for real estate tax purposes by the appropriate governmental authority pursuant to the terms of California Constitution Article XIII A ("Proposition 13") solely as a result of a sale or transfer of fee title of the Real Property if such sale or transfer constitutes a "Change of Ownership", as defined in Section 60 et seq. of the California Revenue and Taxation Code (the "R&T Code"). For purposes of this Subsection (b), the term "Transfer Increase" shall mean that portion of Taxes which increases (if at all) solely as a result of a Transfer Reassessment, as calculated immediately following the Transfer Reassessment, and

accordingly, the term Transfer Increase shall not include (and Tenant shall not be protected from) any portion of real property taxes, as calculated immediately following the Reassessment, which is (i) attributable to the assessment of the value of the Real Property, the base Real Property and the tenant improvements in or about the Real Property immediately prior to the Transfer Reassessment, or (ii) attributable to any purchase of land which is added to the Real Property, expansion and/or improvement of the Building at any time permitted in accordance with other provisions of this Lease, and without limiting the generality of the foregoing, the real property taxes with respect to the New Land (as defined in Rider 2) attributable to the period after substantial completion of the shell of the New Space (as defined in Rider 2), if acquired and constructed; (iii) attributable to assessments which were pending immediately prior to the Transfer Reassessment, which assessments were conducted during, and included in, such Transfer Reassessment, or which assessments were otherwise rendered unnecessary following the Reassessment, or (iv) attributable to the annual inflationary increase of real property taxes; or (v) any assessment or reassessment or increase in real property taxes to the extent arising by virtue of a modification of Proposition 13 by legislative, judicial or other action hereafter. If at any time Proposition 13 is repealed or invalidated by legislative, judicial or other action, the provisions of this Subsection (b) shall be deemed null and void and of no further force or effect, and any reassessment for real property tax purposes or other increase in real property taxes attributable to or arising out of the repeal or invalidation of Proposition 13 shall not be subject to the provisions of this Subsection.

TENANT ADDITIONS: Collectively, Landlord Work, Tenant Work and Tenant Alterations.

TENANT ALTERATIONS: Any alterations, improvements, additions, installations or construction in or to the Premises or any Real Property systems serving the Premises done or caused to be done by Tenant (excluding Landlord Work or Tenant Work).

TENANT DELAY: Any event or occurrence which delays the Substantial Completion of the Landlord Work which is caused by or is described as follows:

(i) special work, changes, alterations or additions requested by Tenant to the Landlord Work (as described in the Workletter);

(ii) Tenant's delay in submitting plans, supplying information, approving plans, specifications or estimates, giving authorizations or otherwise;

(iii) failure to approve and pay for such work as Landlord undertakes to complete at Tenant's expense;

(iv) the performance or completion by Tenant or any person engaged by Tenant of any work in or about the Premises; or

(v) failure to perform or comply with any obligation or condition binding upon Tenant pursuant to the Workletter, including the failure to approve and pay for such Landlord Work or other items if and to the extent the Workletter provides they are to be approved or paid by Tenant.

Provided however, Tenant Delay shall exclude that number of days where Tenant's failure or delay is caused by "Tenant's Force Majeure" (defined below). "Tenant's Force Majeure" shall mean any accident, casualty, act of God, war or civil commotion, strike or labor troubles, or any cause whatsoever beyond the reasonable control of Tenant, including water shortages, energy shortages or governmental preemption in connection with an act of God, a national emergency, or by reason of Law, or by reason of the conditions of supply and demand which have been or are affected by act of God, war or other emergency.

TENANT WORK: All work installed or furnished to the Premises by Tenant in connection with Tenant's initial occupancy pursuant to the Workletter.

TENANT'S SHARE: The percentage specified in Section 1.01(14), which represents the ratio of the Rentable Area of the Premises to the Rentable Area of the Building.

TERM: The term of this Lease commencing on the Commencement Date and expiring on the Expiration Date.

TERMINATION DATE: The Expiration Date or such earlier date as this Lease terminates or Tenant's right to possession of the Premises terminates.

WORKLETTER: The Agreement regarding the manner of completion of Landlord Work and Tenant Work set forth on Exhibit B attached hereto.

ARTICLE TWO

PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING

2.01 LEASE OF PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for the Term and upon the terms, covenants and conditions provided in this Lease. In the event Landlord delivers possession of the Premises to Tenant prior to the Commencement Date, Tenant shall be subject to all of the terms, covenants and conditions of this Lease (except with respect to the payment of Rent) as of the date of such possession.

2.02 TERM

(a) The Commencement Date shall be the date which is the earlier of (i) the date on which the Landlord Work is Substantially Complete (recognizing that may occur before, on or after the Projected Commencement Date); or (ii) the date Tenant first accepts possession and occupies all or part of the Premises for the conduct of business.

(b) Within thirty (30) days following the occurrence of the Commencement Date, Landlord and Tenant shall enter into an agreement (which is attached hereto as Rider 1) confirming the Commencement Date and the Expiration Date. If Tenant fails to enter into such agreement, then the Commencement Date and the Expiration Date shall be the dates designated by Landlord in such agreement.

2.03 FAILURE TO GIVE POSSESSION

(a) If Landlord shall be unable to give possession of the Premises on the Projected Commencement Date by reason of the following: (i) the Building has not been sufficiently completed to make the Premises ready for occupancy, (ii) the Landlord Work is not Substantially Complete, or (iii) for any other reason, then Landlord shall not be subject to any liability for the failure to give possession on said date. Under such circumstances the Rent reserved and covenanted to be paid herein shall not commence until the Premises are made available to Tenant by Landlord, and no such failure to give possession on the Projected Commencement Date shall affect the validity of this Lease or the obligations of Tenant hereunder. At the option of Landlord to be exercised within thirty (30) days of the delayed delivery of possession to Tenant, the Lease shall be amended so that the Term shall be extended by the period of time possession is delayed. The said Premises shall be deemed to be ready for Tenant's occupancy and Substantially Complete in the event Landlord's Work is Substantially Complete in fact, or if the delay in the availability of the Premises for occupancy shall be due to any Tenant Delay and/or default on the part of Tenant and/or its subtenant or subtenants. In the event of any dispute as to whether the Landlord Work is Substantially Complete, the decision of Landlord's architect shall be final and binding on the parties, except as otherwise provided in Section 2.08.

(b) Notwithstanding any provision of Subsection (a) above to the contrary (but subject to the provisions of Section 2.08 in the event of a dispute as to Substantial Completion), if Substantial Completion of Landlord's Work does not occur on or before the Sunset Date (defined below), and Tenant has not, with Landlord's consent taken possession and occupancy of the Premises and commenced doing business (other than construction of the Tenant Work) from it prior to Substantial Completion of the Landlord Work, then, as Tenant's sole and exclusive remedy, Tenant shall have the option to terminate this Lease exercisable by giving written notice to Landlord within three (3) business days after the Sunset Date. If Tenant does not timely give notice of its election to terminate this Lease as aforesaid and Substantial Completion of Landlord's Work does not occur on or before the date which is thirty (30) days following the Sunset Date, then Tenant shall again have such option to terminate this Lease in the manner described above and such date shall constitute the new Sunset Date; it being the intention of the parties that Tenant shall have a recurring termination option after each such thirty (30) day period following the initial Sunset Date if Substantial Completion of Landlord's Work shall not have occurred by the end of each such thirty (30) day period. As used in this Lease, "Sunset Date" means the initial Sunset Date which is ninety (90) days after the Projected Commencement Date and any succeeding new Sunset Dates (at thirty (30) day intervals after the initial Sunset Date) and each such Sunset Date, as applicable, shall be extended by the number of days of delay due to Force Majeure plus the number of days of Tenant Delay, if any. On or before the Sunset Date, if such date includes any period of Force Majeure or Tenant Delay, Landlord shall give Tenant written notice of the resulting calendar date which the Sunset Date.

2.04 AREA OF PREMISES

Landlord and Tenant agree that for all purposes of this Lease, the Rentable Area of the Premises and the Rentable Area of the Building as set forth in Article One are controlling and are not subject to revision after the date of this Lease, except as otherwise provided herein.

2.05 CONDITION OF PREMISES

Tenant shall notify Landlord in writing within thirty (30) days after the later of Substantial Completion of the Landlord Work or when Tenant takes possession of the Premises of any defects in the Premises or in the materials or workmanship furnished by Landlord in completing the Landlord Work (collectively, "Defects"). Except for Defects stated in such thirty (30) day notice and Latent Defects (defined below) of which Tenant gives Landlord notice within eleven (11) months after Substantial Completion of the Landlord Work, Tenant shall be conclusively deemed to have accepted the Premises "AS IS" in the condition existing on the date Tenant first takes possession, and to have waived all claims relating to the condition of the Premises. Landlord shall proceed diligently to correct the Defects stated in the applicable notice unless Landlord disputes the existence of any such Defects. In the event of any dispute as to the existence of any Defects, the decision of Landlord's architect shall be final and binding on the parties, except as otherwise provided in Section 2.08. For purposes of this Lease, "Latent Defects" shall mean Defects which were not readily apparent when the thirty (30) day notice was due. No agreement of Landlord to alter, remodel, decorate, clean or improve the Premises or the Property and no representation regarding the condition of the Premises or the Property has been made by or on behalf of Landlord to Tenant, except as may be specifically stated in this Lease.

2.06 COMMON AREAS

(a) Right to Use Common Areas. Tenant shall have the non-exclusive right, in common with others, to the use of any common entrances, drives and similar access and serviceways and other Common Areas in the Project. The rights of Tenant hereunder in and to the Common Areas shall at all times be subject to the rights of Landlord and other tenants in the Project who use the same in common with Tenant, and it shall be the duty of Tenant to keep all the Common Areas free and clear of any obstructions created or permitted by Tenant or resulting from Tenant's operations. Tenant shall not use for storage purposes the Common Areas or common facilities of the Building or the Project, including any electrical and/or telephone room of the Building, common entrances, drives and similar access and serviceways, parking lot or trash enclosures. Nothing herein shall affect the right of Landlord at any time to remove any persons not authorized to use the Common Areas or common facilities from such areas or facilities or to prevent their use by unauthorized persons.

(b) Changes in Common Areas. Landlord reserves the right, at any time and from time to time to (i) make alterations in or additions to the Common Areas or common facilities of the Project, including constructing new buildings or changing the location, size, shape or number of the driveways, entrances, parking spaces, parking areas, loading and unloading areas, landscape areas and walkways, (ii) designate property to be included in or eliminate property from the Common Areas or common facilities of the Project, (iii) close temporarily any of the Common Areas or common facilities of the Project for maintenance purposes, and (iv) use the Common Areas and common facilities of the Project while engaged in making alterations in or additions and repairs to the Project; provided, however, that reasonable access to the Premises, Truck Court and Tenant's Parking Area remains available, and any such action shall not materially and adversely interfere with Tenant's occupancy of the Premises or the conduct of Tenant's business therein.

2.07 TENANT'S PARKING AREA & TRUCK COURT

(a) Right to Use. Tenant shall have the right to use the areas designated as Tenant's Parking Area and Truck Court, respectively, for only those purposes, and on the terms and conditions, as follows:

(1) Tenant shall have the right to use the Tenant's Parking Area for parking of Tenant's vehicles and those of its employees and invitees. Tenant's Parking Area shall be located in certain areas of the Truck Court, which Truck Court is shown on Exhibit C and in such other areas of the Property as Landlord designates, as shown and provided on Exhibit C.

(2) Tenant shall have the right to use the area designated as the Truck Court on Exhibit C for loading, unloading and parking of Tenant's vehicles and those of its employees and invitees.

(3) Tenant's Parking Area and the Truck Court are not part of the Common Areas, and Tenant's use of Tenant's Parking Area and the Truck Court shall be subject to the same obligations and conditions that apply to Tenant with respect to the Premises in the same manner as if such areas were a part of the Premises. Tenant shall not be obligated to repave the Tenant's Parking Area or Truck Court except for improper use and to repair and restore any damage in connection with installation, maintenance, repair or removal of any Tenant Additions affecting the Truck Court.

(b) Landlord's Access; Third Parties. Landlord fully reserves the right for Landlord or Landlord's agents to enter and use such areas to the same extent as if such areas were part of the Premises or Common Areas. Landlord shall have no obligation to restrict or control access of third parties to such areas, or to tow or remove any vehicles of third parties. Upon completion of a chain link fence (as part of the Landlord Work pursuant to the Workletter) on the westerly side of the Truck Court, which will be added to existing fencing and gates, the Truck Court and East Parking Area will be enclosed within fences with gates. The Relocation Parking Area shall be as described in Section 2.07(a)(1) above.

2.08 DISPUTE RE SUBSTANTIAL COMPLETION OF OR DEFECTS IN PREMISES

In the event that Tenant disputes the determination by Landlord of Substantial Completion in accordance with Section 2.03 or Defects to be corrected by Landlord in accordance with Section 2.05, then within ten (10) business days after notice from Landlord of the determination of Landlord's architect, Tenant shall give Landlord written notice ("Tenant's Dispute Notice") stating the different date of Substantial Completion or different Defects asserted by Tenant to be in accordance with the terms of such Sections, identifying in detail the reasons for such differences, and identifying the name, address and telephone number of Tenant's architect. Landlord's architect and Tenant's architect shall meet to make a good faith effort to resolve the dispute, but if within ten (10) business days after Tenant's Dispute Notice they are unable to agree on a resolution of the disputed item or items, the disputed item or items shall be submitted to arbitration in accordance with the provisions of this Section. Any arbitration under this Section 2.06 shall be conducted in the county in which the Building is located in accordance with the then prevailing rules of the American Arbitration Association or its successor for arbitration of commercial disputes, modified as follows, and any judgment or award rendered therein shall be final and binding upon the parties and may be entered in any court of competent jurisdiction:

(a) Landlord and Tenant shall select a Qualified Architect to act as arbitrator hereunder in accordance with the procedure specified below. For purposes hereof, a "Qualified Architect" shall

mean an architect licensed in the State of California who is familiar with the construction of tenant improvements in warehouse and distribution buildings in the county in which the Building is located. Within twenty (20) business days after Tenant's Dispute Notice, Landlord shall in writing propose to Tenant its choice of a Qualified Architect. If Tenant reasonably objects to Landlord's proposed Qualified Architect, it shall in writing notify Landlord within ten business days after Landlord's proposal. In the event of timely objection, Landlord shall within an additional ten (10) business days in writing propose another Qualified Architect and the foregoing process shall continue until Landlord and Tenant have agreed upon a Qualified Architect. If Landlord and Tenant cannot agree on a Qualified Architect to act as arbitrator after five proposals are made and rejected, either party may petition the then Chief Judge of the United States District Court having jurisdiction over the county in which the Building is located to appoint a Qualified Architect as the arbitrator. In the event of Landlord's failure to propose an arbitrator, Tenant may within ten (10) business days after the expiration of the period for Landlord to propose a Qualified Architect, propose its own choice of a Qualified Architect to act as arbitrator and Landlord may reasonably object. If neither party timely proposes an arbitrator, the determination of Landlord's architect shall be final and binding with the same force and effect as a determination by the arbitrator. If an objection is not timely made to a proposed arbitrator, that arbitrator shall be deemed selected and accepted as of the date of expiration of the ten (10) business day period within which an objection could be made, and shall act as the arbitrator hereunder.

(b) Within fifteen (15) business days after selection of a Qualified Architect to act as arbitrator, each of Landlord's architect and Tenant's architect shall render in writing to each of Landlord, Tenant and the selected arbitrator, its determination in accordance with the provisions of this Lease of the disputed item(s) and corresponding date of Substantial Completion or defect(s) to be corrected, as the case may be.

(c) Within thirty (30) days after the arbitrator has received a copy of the determination of Landlord's architect and Tenant's architect as provided above, as to each disputed item, the arbitrator shall select that one of the two submitted determinations which is closer to the arbitrator's determination. The arbitrator's determination shall be made in accordance with the provisions of this Lease applicable to such disputed item, and in no event shall the arbitrator, Landlord's architect or Tenant's architect modify any provision of the Lease in arriving at its respective determination. The arbitrator's determination and selection shall be made in writing to both Landlord and Tenant, and shall be final and binding upon them.

(d) The arbitrator shall have the right to consult experts and competent authorities regarding factual information or evidence pertaining to a determination of the disputed item(s); provided, however, that any such consultation shall be made in the presence of Landlord, Tenant and their representatives, with full right on the part of each to cross-examine.

(e) In the event of any failure, refusal or inability of the arbitrator to act, a successor shall be appointed in the same manner provided above for the arbitrator's appointment. Each party shall bear all costs and expenses of its own architect and both shall equally share all costs and expenses of the arbitrator, if any. All attorneys' fees and expenses of witnesses shall be paid by the party engaging such attorney or calling such witness.

(f) In the event the determination of the disputed item(s) has or have been submitted to arbitration but such arbitration has not been concluded prior to the Commencement Date (as initially determined by Landlord's architect), Tenant shall pay to Landlord Rent from and after such date pending determination of the disputed item(s). In the event the Commencement Date for Rent determined by arbitration results in an amount due for Rent different from the amount paid to date, Tenant shall immediately pay to Landlord any greater amount due and Landlord shall give Tenant a credit against the next Monthly Base Rent installments due from Tenant if the amount due is less that that paid to date.

ARTICLE THREE

RENT

Tenant agrees to pay to Landlord at the first office specified in Section 1.01(2), or to such other persons, or at such other places designated by Landlord, without any prior demand therefor and without any deduction or offset whatsoever, Rent, including Monthly Base Rent, Rent Adjustment Deposits and Rent Adjustments in accordance with Article Four. Monthly Base Rent shall be paid monthly in advance on the first day of each month of the Term, except that the first installment of Monthly Base Rent shall be paid by Tenant to Landlord concurrently with execution of this Lease. Monthly Base Rent shall be prorated for partial months within the Term. Tenant's covenant to pay Rent shall be independent of every other covenant in this Lease. It is intended that this Lease be a "triple net lease," and that the Rent to be paid hereunder by Tenant will be received by Landlord without any deduction or offset whatsoever by Tenant, foreseeable or unforeseeable. Except as expressly provided to the contrary in this Lease, Landlord shall not be required to make any expenditure, incur any obligation, or incur any liability of any kind whatsoever in connection with this Lease or the ownership, construction, maintenance, operation or repair of the Premises.

ARTICLE FOUR

RENT ADJUSTMENTS AND PAYMENTS

4.01 RENT ADJUSTMENTS

Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment Year as follows:

(a) The Rent Adjustment Deposit representing Tenant's Share of Landlord's estimate of Operating Expenses and of Taxes for the applicable Adjustment Year, monthly during the Term with the payment of Monthly Base Rent, except the first installment which shall be paid by Tenant to Landlord concurrently with the execution of this Lease; and

(b) Any Rent Adjustments due in excess of the Rent Adjustment Deposits in accordance with Section 4.02.

4.02 STATEMENT OF LANDLORD

Within one hundred twenty (120) days after the end of each calendar year or as soon thereafter as reasonably possible, Landlord will furnish Tenant a statement ("Landlord's Statement") showing the following:

(a) Operating Expenses for the last Adjustment Year showing in reasonable detail the actual Operating Expenses and Taxes, and Tenant's Share thereof as described in Section 4.01 above;

(b) The amount of Rent Adjustments due Landlord for the last Adjustment Year, less credit for Rent Adjustment Deposits paid, if any; and

(c) Any change in the Rent Adjustment Deposit due monthly in the current Adjustment Year, including the amount or revised amount due for months preceding any such change pursuant to Landlord's Statement.

Tenant shall pay to Landlord within thirty (30) days after receipt of such statement any amounts for Rent Adjustments then due in accordance with Landlord's Statement. Any amounts due from Landlord to Tenant pursuant to this Section shall be credited to the Rent Adjustment Deposit next coming due, or refunded to Tenant within thirty (30) days after Landlord's Statement is given if the Term has already expired, provided Tenant is not in default hereunder. No interest or penalties shall accrue on any amounts which Landlord is obligated to credit or refund to Tenant by reason of this Section 4.02. Landlord's failure to deliver Landlord's Statement or to compute the amount of the Rent Adjustments shall not constitute a waiver by Landlord of its right to deliver such items nor constitute a waiver or release of Tenant's obligations to pay such amounts. The Rent Adjustment Deposit shall be credited against Rent Adjustments due for the applicable Adjustment Year. During the last complete calendar year or during any partial calendar year in which the Lease terminates, Landlord may include in the Rent Adjustment Deposit its estimate of Rent Adjustments which may not be finally determined until after the termination of this Lease. Tenant's obligation to pay Rent Adjustments survives the expiration or termination of this Lease.

4.03 BOOKS AND RECORDS

Landlord shall maintain books and records showing Operating Expenses and Taxes in accordance with sound accounting and management practices, consistently applied. Tenant or its representative shall have the right, for a period of ninety (90) days following the date upon which Landlord's Statement is delivered to Tenant, to examine Landlord's books and records with respect to the items in the foregoing statement of Operating Expenses and Taxes during normal business hours, upon written notice, delivered at least three (3) business days in advance. If Tenant does not object in writing to Landlord's Statement within one hundred twenty (120) days of Tenant's receipt thereof, specifying the nature of the item in dispute and the reasons therefor, then Landlord's Statement shall be considered final and accepted by Tenant. Any amount due to Landlord as shown on Landlord's Statement, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided above, without prejudice to any such written exception.

4.04 TENANT OR LEASE SPECIFIC TAXES

In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand, any and all taxes payable by Landlord (other than federal or state inheritance, general income, gift or estate taxes) whether or not now customary or within the contemplation of the parties hereto: (a) upon, allocable to, or measured by the Rent payable hereunder, including any gross receipts tax or excise tax levied by any governmental or taxing body with respect to the receipt of such rent; or (b) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (c) upon the measured value of Tenant's personal property or trade fixtures located in the Premises or in any storeroom or any other place in the Premises or the Property, or the areas used in connection with the operation of the Property, it being the intention of Landlord and Tenant that, to the extent possible, Tenant shall cause taxes on such personal property and trade fixtures to be billed directly to Tenant, and whether or not so billed, Tenant shall pay all taxes attributable to its personal property and trade fixtures; or (d) resulting from Landlord Work, Tenant Work or Tenant Alterations to the Premises, whether title thereto is in Landlord or Tenant; or (e) upon this transaction. Taxes paid by Tenant pursuant to this Section 4.04 shall not be included in any computation of Taxes payable pursuant to Sections 4.01 and 4.02.

ARTICLE FIVE

SECURITY DEPOSIT

INTENTIONALLY OMITTED

ARTICLE SIX

UTILITIES & SERVICES

6.01 LANDLORD'S OBLIGATIONS GENERALLY

(a) Landlord shall provide services and maintenance only as expressly provided in this Section 6.01 and Article Eight below.

(b) Landlord shall provide water through Landlord's existing water pipes and permit Tenant to connect to Landlord's existing water and sewer pipes as provided in Section 6.02(b) below for the purpose of providing such utilities to the Premises. Landlord shall not be obligated to provide any chilled water, tempered water or water heater, nor shall Landlord be obligated to provide any restroom facility or plumbing above the slab. Notwithstanding any provision of the foregoing to the contrary, to the extent provided as part of the Landlord Work in the Workletter, Landlord shall bring a water line to the Premises and provide restroom facilities connected to the existing under-slab sewer line.

(c) Landlord shall provide electricity to Landlord's existing main electrical panel in the utility room of the Building and permit Tenant to connect to such panel for the purpose of providing such utility to the Premises as provided in Section 6.02(b) below. Notwithstanding any provision of the foregoing to the contrary, to the extent provided as part of the Landlord Work in the Workletter, Landlord will bring an electricity line from the utility room to the designated point on Tenant's side of the demising wall of the Premises and as otherwise described as part of the Landlord Work.

(d) Landlord shall permit Tenant to connect to Landlord's existing main telephone panel in the utility room of the Building for the purpose of providing such utility to the Premises as provided in Sections 6.02(b) and 6.03 below.

6.02 TENANT'S OBLIGATIONS & PAYMENT

(a) Tenant shall be responsible for and shall pay promptly all charges for refuse pickup (to be performed on a regularly scheduled basis so that accumulated refuse does not exceed the capacity of Tenant's refuse bins), janitorial service, pest control and extermination, security and all utilities (except as provided in Sections 6.02(b) and (c)), materials and services furnished directly to or used by Tenant in, on or about the Premises, together with all taxes thereon. Tenant shall contract directly with the providing companies for such utilities and services, subject to all other provisions of this Lease.

(b) All connections to Landlord's existing electrical, water, sewer and telephone systems contemplated by Section 6.01 shall be subject to all other provisions of this Lease, including Landlord's prior written approval, which shall not be unreasonably withheld, of all relevant factors, including allocation of available capacity of each system, the extent to which the system is safely capable for the desired connection, and other provisions of Article Nine. Except to the extent provided as part of the Landlord Work in the Workletter, Tenant shall make, maintain and repair, at its sole cost and expense, all connections, modifications, extensions and installations to or of any electrical panel, breaker, feeder, wiring, conduits, transformer, plumbing and any additional equipment necessary to connect Tenant's facilities to any Building Systems. Tenant shall be responsible to maintain, repair, replace and operate all such connections, modifications, extensions and installations, at Tenant's sole cost and expense. Tenant's use of electric current shall at no time exceed the capacity of the wiring, feeders and risers providing electric current to the Premises or the Building. The consent of Landlord to the installation of electric equipment shall not relieve Tenant from the obligation to limit usage of electricity to no more than such capacity. Without limiting the generality of the foregoing, all installations, maintenance, repair, replacement and use of such installations by Tenant shall comply will Law and with all requirements of the provider of such utilities, including for example, all requirements of the water and/or sewer utilities serving the Property.

(c) Without limiting the generality of the foregoing, Tenant, at Tenant's sole cost and expense, shall provide, install, operate, maintain, repair and replace separate submeter(s) for Tenant's consumption of electricity (and upon Landlord's request, for water and any other utility which Landlord permits Tenant to use). Notwithstanding any provision of the foregoing to the contrary, to the extent provided as part of the Landlord Work in the Workletter, Landlord shall provide and install the initial electric submeter and any initial testing and certification. Tenant shall pay Landlord within fifteen (15) days after Landlord gives Tenant a statement for all costs of such electricity (and water or other utility which is separately submetered) used by or furnished to Tenant, as shown by such submeter(s). For any billing period which will not be completed and billed before the Lease terminates, Landlord may bill Tenant in advance on an estimated basis, subject to subsequent adjustment for any further amount due from Tenant or credit/refund due from Landlord when the final submeter readings are done. Tenant's obligation to pay such amounts survives the expiration or termination of this Lease. In the event of failure or malfunction of such submeter(s), Tenant shall promptly repair or replace such failed or malfunctioning submeter(s), and for any period of failure or malfunction, Tenant shall pay any amounts due based upon estimated usage. Tenant shall cause all submeters installed by Tenant for any purpose, whether for electricity, water or other utility to be

tested and certified prior to Tenant's occupancy of the Premises and thereafter at least annually by a State of California certified testing company, at Tenant's sole cost and expense.

6.03 TELEPHONE SERVICES

All telegraph, telephone, and communication connections which Tenant may desire outside the Premises and location thereof shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld. As to any such connections or work outside the Premises requiring Landlord's approval, Landlord reserves the right to restrict and control access to the utility room, telephone cabinets or panels, and the contractors performing telephone or other communication cable installation, removal, repair and maintenance outside the Premises shall be subject to Landlord's reasonable prior written approval. Provided however, such approval is not required as to Tenant's choice of service provider serving Tenant exclusively or telephone equipment installation within the Premises and serving Tenant exclusively. Tenant shall be responsible for and shall pay all costs incurred in connection with the installation of telephone cables and communication wiring in the Premises, including any hook-up, access and maintenance fees related to the installation of such wires and cables in the Premises and the commencement of service therein, and the maintenance thereafter of such wire and cables; and there shall be included in Operating Expenses for the Building all installation, removal, hook-up or maintenance costs incurred by Landlord in connection with telephone cables and communication wiring serving the Building which are not allocable to any individual users of such service but are allocable to the Building generally. If Tenant fails to maintain all telephone cables and communication wiring in the Premises and such failure affects or interferes with the operation or maintenance of any other telephone cables or communication wiring serving the Building, Landlord or any vendor hired by Landlord may, on reasonable notice to Tenant at the Premises (i.e., without written notice to Tenant pursuant to Article Twenty-four and except that no notice shall be required in a situation where, in the reasonable judgment of Landlord, an emergency exists), enter into and upon the Premises forthwith and perform such repairs, restorations or alterations as Landlord deems necessary in order to eliminate any such interference (and Landlord may recover from Tenant all of Landlord's costs in connection therewith).

6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE

To the extent that any equipment or machinery furnished or maintained by Landlord is used in the delivery of utilities to Tenant pursuant to Sections 6.01 or 6.02 and breaks down or ceases to function properly, Landlord shall use reasonable diligence to repair same promptly. In the event of any failure, stoppage or interruption of, or change in, any utilities or services supplied by Landlord which are not directly obtained by Tenant, Landlord shall use reasonable diligence to have service promptly resumed. In either event covered by the preceding two sentences, if the cause of any such failure, stoppage or interruption of, or change in, utilities or services is within the control of a public utility, other public or quasi-public entity, or utility provider, notification to such utility or entity of such failure, stoppage or interruption and request to remedy the same shall constitute "reasonable diligence" by Landlord to have service promptly resumed. Notwithstanding any other provision of this Section to the contrary, in the event of any failure, stoppage or interruption of, or change in, any utility or other service furnished to the Premises or the Project resulting from any cause, including changes in service provider or Landlord's compliance with any voluntary or similar governmental or business guidelines now or hereafter published or any requirements now or hereafter established by any governmental agency, board or bureau having jurisdiction over the operation of the Property: (a) Landlord shall not be liable for, and Tenant shall not be entitled to, any abatement or reduction of Rent; (b) no such failure, stoppage, or interruption of any such utility or service shall constitute an eviction of Tenant or relieve Tenant of the obligation to perform any covenant or agreement of this Lease to be performed by Tenant; and (c) Landlord shall not be in breach of this Lease nor be liable to Tenant for damages or otherwise. Notwithstanding any provision of the foregoing to the contrary:

(a) the preceding sentence shall not deprive Tenant of any abatement of Rent to which Tenant would be entitled pursuant to Article Fourteen or of Tenant's rights and remedies for a Landlord default pursuant to Section 11.05, and shall not relieve Landlord of liability for damages to either persons, property, or business to the extent caused by Landlord's negligence or wrongful act, subject to and without diminishing any waivers by Tenant pursuant to Article Seventeen or waivers by Tenant or Landlord or their respective insurers in effect pursuant to Section 16.04;

(b) subject to Section 6.04(c) below, in the event and to the extent that Tenant is unable to occupy the Premises or part thereof for five (5) consecutive days after Tenant has given Landlord written notice of such condition (the "Eligibility Period") as a result of Landlord's failure to provide utilities or services which Landlord is obligated to provide, but excluding any period occupancy is prevented to the extent caused by any of the following:

(i) caused by any act or omission of Tenant, any assignee, any subtenant or any other occupant of the Premises, or

(ii) where Tenant or any assignee requests Landlord to make a decoration, alteration, improvement or addition, including, for example, any upgrade or modification to the Building's electrical system, either in connection with the Landlord Work under the Workletter or subsequently, or

(iii) caused by Force Majeure,

then Monthly Base Rent and Rent Adjustments shall abate in the proportion in which the area of the Premises which is unusable and unused bears to the total area of the Premises on a per diem basis

from the expiration of the Eligibility Period until the earlier of restoration of the applicable utility or service or Tenant's re-occupancy or use of the affected portion of the Premises; and

(c) notwithstanding any provision of Section 6.04(b) to the contrary, in the event and to the extent that Tenant is unable to occupy the Premises or part thereof for three (3) consecutive days after Tenant has given Landlord written notice of such condition (the "Electricity Eligibility Period") as a result of Landlord's failure to provide electricity and such failure is caused solely by Landlord's negligence or wrongful act [but excluding any period occupancy is prevented to the extent caused by any of the matters described in clauses (i), (ii) and (iii) of Section 6.04(b)], then Monthly Base Rent and Rent Adjustments shall abate in the proportion in which the area of the Premises which is unusable and unused bears to the total area of the Premises on a per diem basis from the expiration of the Electricity Eligibility Period until the earlier of restoration of electricity or Tenant's re-occupancy or use of the affected portion of the Premises.

6.05 INTENTIONALLY OMITTED

6.06 SIGNAGE

(a) Tenant shall not install any signage within the Project, the Buildingor the Premises without obtaining the prior written approval of Landlord, in itsreasonable discretion, and Tenant shall be responsible for procurement,installation, maintenance and removal of any such signage installed by Tenant,and all costs in connection therewith. Any such signage shall comply withLandlord's current Project signage criteria and all Laws.

(b) So long as Tenant is in continuous operation at and occupancy of theentire Premises, and if permitted by applicable Laws, Tenant shall have thenon-exclusive right to place a single sign bearing Tenant's name and/or logo inone location on the side of the Building's exterior wall at the end where thePremises is located subject to the terms and conditions set forth in thisSection ("Exterior Sign Right"). Nothing contained herein shall prohibit orlimit Landlord in granting other tenants of the Project or Building rights toinstall signs on or at the Project or Building or space leased to such tenants.All drawings, plans and specifications (including size, design, color andmaterials) and the location of such signage shall (a) be proposed and preparedby Tenant at its sole cost and expense, (b) be subject to approval by Landlordin its reasonable discretion, and (c) be consistent with the design of theProject and conform at all times with any sign criteria of the Project and allapplicable Laws. Tenant, at its sole cost and expense, shall be responsible toobtain all approvals and/or permits necessary for the sign under applicableLaws, and its rights hereunder are subject to such Laws. Tenant shall, at itssole cost and expense: (i) procure, install, maintain and replace such sign;(ii) maintain the area on which the sign is mounted watertight and in goodappearance; (iii) maintain insurance covering the sign; and (iv) be responsiblefor electrical service and connections, if any, for the sign. Upon theexpiration or termination of the Exterior Sign Right, but in no event later thanthe expiration of the Term or earlier termination of the Lease, Tenant shall, atits sole cost and expense, remove such sign and shall repair and restore thearea in which the sign was located to its condition prior to installation ofsuch sign. The Exterior Sign Right under this Subsection is personal to UnitedNatural Foods, Inc. and may not be used by, and shall not be transferrable orassignable (voluntarily or involuntarily) to any person or entity except to anassignee of the Lease of the entire Premises which assignee is either (aa) anAffiliate which has complied with all the requirements of Article Ten applicableto an assignment to an Affiliate or (bb) has been approved by Landlord and whichhas complied with all the requirements of Article Ten applicable to anassignment.

6.07 STANDBY GENERATOR

(a) At any time during the Term, Tenant shall have the right, at Tenant'ssole cost and expense, to install, operate, maintain, repair, replace, removeand use Standby Generator Installations (as defined below), upon and subject tothe terms and conditions of this Section and this Lease. The "Standby GeneratorInstallations" shall mean (i) a standby diesel generator to be installed orhoused, along with its fuel tank, in a mobile van trailer to be parked on theTruck Court; (ii) wiring, cabling and conduit (subject to Subsection (b) below)from it to the separate electrical circuit(s) serving only the Premises, and allassociated switchover equipment and circuits to connect & operate the generatoron a standby basis without interference with or damage to any Building Systemsor any other equipment of Landlord or other occupants of the Building; (iii) adiesel fuel storage tank with a capacity of not more than eight hundred (800)gallons located outside the Building, above-ground, in a fuel tank installed orhoused in a mobile van trailer to be parked on the Truck Court; and (iv) allancillary containment vessels, pipe, ventilation systems and equipment. TheStandby Generator Installations shall be for the sole purpose of providingTenant electrical power for its operation in the Premises in the event of anyinterruption in the supply of electricity, and shall not be used at any othertimes or in any other way except for occasional testing, as necessary. Thisright to Standby Generator Installations is further conditioned upon thefollowing: (1) in all respects, such right shall be subject to Tenant seekingand obtaining from applicable governmental authorities and the electric utilityserving the Real Property all approvals and permits to install, operate,maintain, repair, replace and use such Standby Generator Installations; (2)except as otherwise specified above, the exact location, size and allspecifications of such Standby Generator Installations, shall be subject toLandlord's prior written approval, which shall not be unreasonably withheld; (3)without limiting the generality of any other provisions of this Lease, Tenantshall install, operate, maintain, repair, replace, remove and use StandbyGenerator Installations in compliance with this Lease, all Environmental Lawsand all other Laws; (4) without limiting the generality of any other provisionsof Section 7.02 below, the Standby Generator Installations, whether located inthe Premises or elsewhere at the Real Property, shall be subject to and coveredby the indemnity and all

other provisions of Section 7.02 and shall be deemed to be in and part of thePremises for all purposes of Section 7.02; and (5) notwithstanding any provisionof this Lease to the contrary, Tenant shall, as of the expiration or earliertermination of this Lease, remove the Standby Generator Installations and allHazardous Material introduced to the Property by Tenant, an Affiliate of Tenant,or any occupant or user of all or part of the Premises permitted by Tenant or anAffiliate, or any employee, agent, contractor, customer or invitee of any ofthem, and restore the Property to its condition immediately prior to theinstallation of the Standby Generator Installations, all at Tenant's sole costand expense. Landlord has no obligation to seek or obtain from applicablegovernmental authorities or the electric utility serving the Real Property allapprovals and permits to install, operate, maintain, repair, replace, remove anduse such Standby Generator Installations. Provided however, upon Tenant'swritten request, Landlord will cooperate with Tenant in the event that requestsfor approval require the consent of Landlord or require that the request be madein the name of Landlord, but Tenant shall pay all costs in connection with suchcooperation, and such cooperation shall not subject Landlord to or result in anycost, expense, liability or obligation of Landlord. Landlord makes norepresentation or warranty either (i) as to whether or not the foregoingcomplies with Law or is or will be acceptable to or approved by applicablegovernmental authorities, the electric utility serving the Real Property or (ii)that adequate or suitable space exists at the Real Property for suchinstallations.

(b) Any installations contemplated by this Section 6.07 shall be part ofthe Tenant Work pursuant to the Workletter if proposed to be done preparatory toor in connection with Tenant's initial occupancy of the Premises and, ifproposed to be done thereafter, shall be Tenant Alterations subject to ArticleNine and the location and method of installation of conduits and relatedequipment in any of the Building's horizontal and vertical pathways shall besubject to the prior written approval of Landlord, in its reasonable discretion.Further, Tenant's employees, agents or contractors who shall install, maintain,repair, replace or remove any installations contemplated by this Section 6.07shall be subject to Landlord's prior written approval, in its reasonablediscretion, and to the extent any such work is to be done outside the Premisesin conduits or the Building's horizontal or vertical pathways or similar areaswhose use is shared by Landlord or other occupants of the Building or otherservice providers to the Building, such work shall be subject to the directionof Landlord, and Landlord reserves the right to restrict and control access tosuch areas. All installations pursuant to this Section 6.07 (whether as part ofor after the initial installations) and their maintenance, repair, removal anduse shall not adversely affect the operation, maintenance or replacement of anyBuilding Systems, and shall be subject to compliance with other provisions ofthis Lease. Without limiting the generality of the foregoing, Tenant shall beresponsible to provide all switchover equipment and circuits to connect &operate the generator on a standby basis without interference with or damage toany Building Systems or any other equipment of Landlord or other occupants ofthe Building. With respect to all operations (including all installations,maintenance, repair, removal and use) with respect to this Section 6.07, Tenantshall conduct its business and control its agents, employees and invitees insuch manner as not to create any nuisance, or interfere with, annoy or disturbany other licensee or tenant of the Building or Landlord in its operation of theBuilding. With respect to all conduit for electrical connections contemplated bythis Section 6.07, Landlord shall permit Tenant to install a single conduit (nolarger than three (3) inch conduit) to connect Tenant's standby generator to theseparate electrical circuit(s) serving only the Premises.

6.08 PROPANE TANK

(a) At any time during the Term, Tenant shall have the right, at Tenant'ssole cost and expense, to install, operate, maintain, repair, replace, removeand use a Propane Tank (as defined below), upon and subject to the terms andconditions of this Section and this Lease. The "Propane Tank" shall mean (i) apropane fuel storage tank with a capacity of not more than two hundred (200)gallons located outside the Building on the Truck Court, above-ground; and (ii)all ancillary containment vessels, pipe, ventilation systems and equipment. ThePropane Tank shall be for the sole purpose of providing Tenant a supply ofpropane to refill the separate portable propane tanks mounted on fork lifts usedat the Premises. This right to a Propane Tank is further conditioned upon thefollowing: (1) in all respects, such right shall be subject to Tenant seekingand obtaining from applicable governmental authorities all approvals and permitsto install, operate, maintain, repair, replace and use such Propane Tank; (2)except as otherwise specified above, the exact location, size and allspecifications of such Propane Tank, shall be subject to Landlord's priorwritten approval, which shall not be unreasonably withheld; (3) without limitingthe generality of any other provisions of this Lease, Tenant shall install,operate, maintain, repair, replace, remove and use the Propane Tank incompliance with this Lease, all Environmental Laws and all other Laws; (4)without limiting the generality of any other provisions of Section 7.02 below,the Propane Tank located on the Truck Court shall be subject to and covered bythe indemnity and all other provisions of Section 7.02 and shall be deemed to bein and part of the Premises for all purposes of Section 7.02; and (5)notwithstanding any provision of this Lease to the contrary, Tenant shall, as ofthe expiration or earlier termination of this Lease, remove the Propane Tank andall Hazardous Material introduced to the Property by Tenant, an Affiliate ofTenant, or any occupant or user of all or part of the Premises permitted byTenant or an Affiliate, or any employee, agent, contractor, customer or inviteeof any of them, and restore the Property to its condition immediately prior tothe installation of the Propane Tank, all at Tenant's sole cost and expense.Landlord has no obligation to seek or obtain from applicable governmentalauthorities approvals and permits to install, operate, maintain, repair,replace, remove and use such Propane Tank. Provided however, upon Tenant'swritten request, Landlord will cooperate with Tenant in the event that requestsfor approval require the consent of Landlord or require that the request be madein the name of Landlord, but Tenant shall pay all costs in connection with suchcooperation, and such cooperation shall not subject Landlord to or result in anycost, expense, liability or obligation of Landlord. Landlord makes norepresentation or warranty either (i) as to whether or not the foregoingcomplies with Law or is or will be acceptable to or approved by applicablegovernmental authorities, or (ii) that adequate or suitable space exists at theReal Property for such installations.

(b) Any installations contemplated by this Section 6.08 shall be part ofthe Tenant Work pursuant to the Workletter if proposed to be done preparatory toor in connection with Tenant's initial occupancy of the Premises and, ifproposed to be done thereafter, shall be Tenant Alterations subject to ArticleNine. With respect to all operations (including all installations, maintenance,repair, removal and use) with respect to this Section 6.08, Tenant shall conductits business and control its agents, employees and invitees in such manner asnot to create any nuisance, or interfere with, annoy or disturb any otherlicensee or tenant of the Building or Landlord in its operation of the Building.

ARTICLE SEVEN

POSSESSION, USE AND CONDITION OF PREMISES

7.01 POSSESSION AND USE OF PREMISES

(a) Tenant shall be entitled to possession of the Premises when theLandlord Work is Substantially Complete. Provided however, before the LandlordWork is Substantially Complete Tenant may, with Landlord's prior writtenconsent, which will not unreasonably be withheld, enter the Premises solely forthe purpose of performing Tenant Work under the Workletter, installing Tenant'sfixtures and Tenant's personal property, including cabling for phones andcomputers, as long as such entry will not interfere with the timely and orderlyconstruction and completion of the Landlord Work. Tenant shall notify Landlordof its desired time(s) of entry and shall submit for Landlord's approval thescope of the work to be performed and the name(s) of the contractor(s) who willperform such work. Such work and such contractors shall be subject to Landlord'sapproval as provided in the Workletter. Such entry shall be without payment ofMonthly Base Rent or Rent Adjustments, but such entry and all acts and omissionsin connection with it are subject to and governed by all other provisions of theLease, including Tenant's indemnification obligations, insurance obligations andobligations under this Article Seven. Tenant shall occupy and use the Premisesonly for the uses specified in Section 1.01(15) to conduct Tenant's business.Tenant shall not occupy or use the Premises (or permit the use or occupancy ofthe Premises) for any purpose or in any manner which: (i) is unlawful or inviolation of any Law or Environmental Law; (ii) may be dangerous to persons orproperty or which may increase the cost of, or invalidate, any policy ofinsurance carried on the Building or covering its operations; (iii) is contraryto or prohibited by the terms and conditions of this Lease or the rules andregulations as provided in Article Eighteen; (iv) contrary to or prohibited bythe articles, bylaws or rules of any owner's association affecting the Project;(v) is improper, immoral, or objectionable; (vi) would obstruct or interferewith the rights of other tenants or occupants of the Project, or injure or annoythem, or would tend to create or continue a nuisance; or (vii) would constituteany waste in or upon the Premises or Project. No manufacturing operations may beconducted from the Premises. Without limiting the generality of the foregoing,Tenant shall not maintain, service, repair, fuel or refuel any truck or vehicleof any kind on the Premises or the Property, except that Tenant may take any ofthe actions described on Exhibit G hereto and by this reference incorporatedherein.

(b) Landlord and Tenant acknowledge that the Americans With DisabilitiesAct of 1990 (42 U.S.C. ss.12101 et seq.) and regulations and guidelinespromulgated thereunder, as all of the same may be amended and supplemented fromtime to time (collectively referred to herein as the "ADA") establishrequirements for business operations, accessibility and barrier removal, andthat such requirements may or may not apply to the Premises, the Building andthe Project depending on, among other things: (i) whether Tenant's business isdeemed a "public accommodation" or "commercial facility", (ii) whether suchrequirements are "readily achievable", and (iii) whether a given alterationaffects a "primary function area" or triggers "path of travel" requirements. Theparties hereby agree that: (a) Landlord shall be responsible for ADA Title IIIcompliance to the extent of the Base Building (defined in the Workletter) asrequired as of the execution date of this Lease, to the extent of the LandlordWork as of the date of its Substantial Completion, and in the Common Areas,except as provided below, (b) Tenant shall be responsible for ADA Title IIIcompliance in the Premises, including any leasehold improvements or other workto be performed in the Premises under or in connection with this Lease, (c)Landlord may perform, or require that Tenant perform, and Tenant shall beresponsible for the cost of, ADA Title III "path of travel" requirementstriggered by Tenant Additions in the Premises, and (d) Landlord may perform, orrequire Tenant to perform, and Tenant shall be responsible for the cost of, ADATitle III compliance in the Common Areas necessitated by the Building beingdeemed to be a "public accommodation" instead of a "commercial facility" as aresult of Tenant's use of the Premises. Tenant shall be solely responsible forrequirements under Title I of the ADA relating to Tenant's employees.

(c) Tenant agrees to cooperate with Landlord and to comply with any andall guidelines or controls concerning energy management imposed upon Landlord byfederal or state governmental organizations or by any energy conservationassociation to which Landlord is a party or which is applicable to the Building.

7.02 HAZARDOUS MATERIAL

(a) Tenant shall not use, generate, manufacture, produce, store, release,discharge, or dispose of, on, under or about the Premises or any part of theProject, or transport to or from the Premises or any part of the Project, anyHazardous Material, or allow its employees, agents, contractors, licensees,invitees or any other person or entity to do so except to the extent expresslyprovided in Subsections (a)(1) and (a)(2) below.

(1) So long as Tenant uses the Premises only for a food warehouseand food distribution (and associated office and administrative uses)Tenant shall be permitted to use and store in, and transport to and from,the Premises Hazardous Material incidental to such use, but in no eventany fuel, petroleum or its byproducts except propane fuel in the amountand as otherwise

described in Section 6.08 above, propane fuel in separate portable tanks to mount on fork lifts used at the Premises, and diesel fuel in the amount and as otherwise provided in Section 6.07 above (such limited category of permitted Hazardous Material may be referred to as "Hazardous Material Incidental to Food Use") so long as: (i) each item of Hazardous Material Incidental to Food Use is used or stored in, or transported to and from, the Premises only to the extent necessary for Tenant's operation for such food warehouse and distribution (and associated office and administrative uses) at the Premises; (ii) Tenant shall not install any underground tanks of any type; and (iii) the conditions and provisions set forth in this Subsection (a)(1) (which includes the part of Subsection (a) above) and Subsections (a)(3), (i) and (l) below are strictly complied with, and for so long as Tenant strictly complies with such conditions and provisions, the other conditions and provisions of this Section 7.02 shall not be applicable. Tenant shall comply with and shall cause Tenant's Agents (as defined in Subsection 7.02 (b)) to comply with all Environmental Laws pertaining to Tenant's occupancy and use of the Premises and concerning the proper storage, use, handling, removal and disposal of any Hazardous Material introduced to the Premises, the Building or the Property by Tenant or Tenant's Agents. Tenant shall, no later than the Termination Date, surrender the Premises to Landlord free of Hazardous Material. In the event that Tenant is notified of any investigation or violation of any Environmental Law arising from any activity of Tenant or Tenant's Agents at the Property, Tenant shall immediately deliver to Landlord a copy of such notices and reports in connection therewith. In such event or in the event Landlord reasonably believes that a violation exists of Environmental Law by Tenant or Tenant's Agents or of this Subsection (a)(1), Landlord may conduct, at Tenant's expense, such tests and studies as Landlord deems desirable relating to compliance by Tenant or Tenant's Agents with Environmental Laws or the alleged presence of Hazardous Material introduced to the Premises, the Building or the Property by Tenant or Tenant's Agents.

(2) Notwithstanding the foregoing, Tenant shall be permitted to use and store in, and transport to and from, the Premises the Hazardous Material identified on Exhibit D hereto and by this reference incorporated herein ("Permitted Hazardous Material") so long as: (i) each item of the Permitted Hazardous Material is used or stored in, or transported to and from, the Premises only to the extent necessary for Tenant's operation of its business at the Premises; (ii) at no time shall any Permitted Hazardous Material be in use or storage at the Premises in excess of the quantity specified therefor in Exhibit D; and (iii) the conditions and provisions set forth in this Section 7.02 are strictly complied with.

(3) The right to use and store in, and transport to and from, the Premises Hazardous Material Incidental to Food Use and/or, as applicable, the Permitted Hazardous Material is personal to United Natural Foods, Inc. and, as long as it remains an Affiliate of Tenant, MPWI [as defined in Section 10.01(e)], and may not be assigned or otherwise transferred except to an assignee which is an Affiliate and which has complied with the requirements of Article Ten applicable to an assignment to an Affiliate (and Tenant may allow the same uses permitted Tenant hereunder, subject to all the terms and conditions hereof, by a sublessee which is an Affiliate and which has complied with the requirements of Article Ten applicable to a sublease to an Affiliate) without the prior written consent of Landlord, which consent may be withheld in Landlord's sole discretion. Any consent by Landlord pursuant to Article Ten to an assignment, transfer, subletting, mortgage, pledge, hypothecation or encumbrance of this Lease, and any interest therein or right or privilege appurtenant thereto, shall not constitute consent by Landlord to the use or storage at, or transportation to, the Premises of any Hazardous Material (including a Hazardous Material Incidental to Food Use or a Permitted Hazardous Material) by any such assignee, sublessee or transferee unless Landlord expressly agrees otherwise in writing. Any consent by Landlord to the use or storage at, or transportation to or from the Premises, of any Hazardous Material (including a Hazardous Material Incidental to Food Use or a Permitted Hazardous Material) by an assignee, sublessee or transferee of Tenant shall not constitute a waiver of Landlord's right to refuse such consent as to any subsequent assignee or transferee.

(b) Tenant shall comply with and shall cause Tenant's employees, agents, contractors, licensees, invitees or any other person or entity for whom Tenant is responsible (collectively, "Tenant's Agents") to comply with, and shall keep and maintain the Premises and cause Tenant's Agents to keep and maintain the Premises, in compliance with all Environmental Laws. Neither Tenant nor Tenant's Agents shall violate, or cause or permit the Premises to be in violation of, any Environmental Laws.

Tenant shall, at its own expense prior to Tenant's use and occupancy, procure, maintain in effect and comply with all conditions of any and all permits, licenses and other governmental and regulatory approvals required for Tenant's use of the Premises. Tenant shall cause any and all Hazardous Material removed from the Premises to be removed and transported solely by duly licensed handlers to duly licensed facilities for final disposal of such materials and wastes.

Tenant agrees to provide Landlord with: (i) a copy of any hazardous material management plan or similar document required by any federal, state or local governmental or regulatory authority to be submitted by Tenant; (ii) copies of all permits, licenses and other governmental and regulatory approvals with respect to the use of Hazardous Material at the Project; (iii) copies of hazardous waste manifests reflecting the legal and proper disposal of all Hazardous Material removed from the Premises; and (iv) copies of all reports, studies and written results of tests or inspections concerning the Premises or any part of the Project with respect to Hazardous Material, including the "Plans" hereinafter defined (collectively, "Documents"). Tenant shall deliver all Documents to Landlord promptly following the earlier of (1) Tenant's submission of such Documents to the requesting governmental agency, or (2) Tenant's receipt of such Documents (Tenant hereby agreeing that it shall exercise diligent efforts to expeditiously obtain copies of any such Documents known by Tenant to exist).

(c) Upon commencing any activity involving Hazardous Material on the Premises, and continuing thereafter throughout the Term, Tenant shall initiate and maintain the systems set forth in the following (collectively, "Plans") in order to ensure the routine monitoring of the levels of Hazardous Material which may be present on, under or about the Premises or any part of the Project or properties adjoining or in the vicinity of the Project as the result of the activities of Tenant or Tenant's Agents and to ensure continued compliance with the procedures and regulations concerning the handling, storage, use and disposal of Hazardous Material: (i) each permit, license or other governmental or regulatory approval with respect to the use of Hazardous Material at the Project, (ii) each Hazardous Material management plan or similar document required by any federal, state, or local governmental or regulatory entity, (iii) each plan for handling and disposing of Hazardous Material necessary to comply with Environmental Laws prepared by or on behalf of Tenant or Tenant's Agents (whether or not required to be submitted to a governmental agency). Copies of the foregoing described Plans are listed on Exhibit E hereto and attached to this Lease as Exhibits E-1 through E- .

(d) Not less often than once each calendar quarter during the Term, Tenant shall provide Landlord with a written report which shall set forth the results of the monitoring of Hazardous Material during the previous calendar quarter. Landlord may elect (but shall not be obligated) to retain an independent consultant experienced in the use and management of Hazardous Material for the purpose of reviewing any information received by Landlord in connection with Hazardous Material. Pursuant to such review, Landlord's consultant may make recommendations in connection with Tenant's control of Hazardous Material on the Premises, and Tenant shall implement, at Tenant's sole cost, the recommendations of Landlord's consultant. Landlord's failure to appoint any consultant shall not relieve Tenant of any of Tenant's obligations under this Lease relating to Hazardous Material nor constitute a waiver of Landlord's rights under this Lease. Notwithstanding the foregoing, as long as the conditions with respect to Permitted Hazardous Materials set forth in this Section 7.02 are strictly complied with, Tenant shall not be obligated to provide Landlord with the foregoing written report with respect to Permitted Hazardous Materials, unless required to do so by Law.

(e) Landlord may install permanent or other testing wells or devices at or about the Premises or any part of the Project, and may cause the ground water to be tested to detect the presence of Hazardous Material at least once every twelve (12) months during the Term by the use of such wells or devices as are then customarily used for such purposes. If Tenant so requests in writing, Landlord shall supply Tenant with a copy of any such test results. The costs of any such tests, and the installation, maintenance, repair, removal, closure and replacement of such wells or devices shall be included in Operating Expenses pursuant to this Lease; provided, however, such costs shall be borne solely by Tenant if the same are incurred by Landlord based upon Landlord's reasonable belief, at the time such testing is initiated, that Tenant is in breach of its obligations under this Section 7.02 or if, following the initiation of such testing, the presence of Hazardous Material is detected and Tenant or Tenant's Agents are responsible therefor. Tenant's obligations under this Section 7.02(e) shall survive the expiration or earlier termination of this Lease.

(f) Landlord and its representative shall have the right, at the following times, to enter the Premises and to: (i) conduct any testing, monitoring and analysis for Hazardous Material; (ii) review any documents, materials, inventory, financial data or notices or correspondence to or from private parties or governmental or regulatory authorities in connection therewith; and (iii) review all storage, use, transportation and disposal facilities and procedures associated with the storage, use, transportation and disposal of Hazardous Material (collectively, "Inspection"):

(1) Once every three months for the first twelve (12) months after the later of the date Tenant introduces Hazardous Material to the Premises pursuant to this Section 7.02 or notifies Landlord of such use, and once every twelve (12) months thereafter throughout the Term. Tenant agrees to notify Landlord at least three (3) days prior to the use or storage in, or transportation to, the Premises of Hazardous Material; and

(2) At any time during the Term if, in Landlord's reasonable judgment, Tenant is breaching its obligation under this Section 7.02 or is not in compliance with any other provision of this Lease.

All costs and expenses incurred by Landlord in connection with any Inspection pursuant to this Section 7.02(f) shall, subject to Section 7.02(n) below, become due and payable by Tenant as additional Rent, upon presentation by Landlord of an invoice therefor.

(g) Tenant shall give prompt written notice to Landlord of:

(1) any proceeding or inquiry by, notice from, or order of any governmental authority (including the California State Department of Health Services) with respect to the presence of any Hazardous Material on, under or about the Premises or any part of the Project or the migration thereof from or to other property;

(2) all claims made or threatened by any third party against Tenant, the Premises or any part of the Project relating to any loss or injury resulting from any Hazardous Material;

(3) any spill, release, discharge or nonroutine disposal of Hazardous Material that occurs with respect to the Premises or operations at the Premises by Tenant or Tenant's Agents;

(4) all matters of which Tenant is required to give notice pursuant to Sections 25249.5 et seq. and 25359.7 of the California Health and Safety Code; and

(5) Tenant's discovery of any occurrence or condition on, under or about the Premises or any part of the Project or any real property adjoining or in the vicinity of the Premises or the Project that could cause the Premises or any part of the Project to be subject to any restrictions on the ownership, occupancy, transferability or use of the Premises or any part of the Project under any Environmental Laws, including without limitation, Tenant's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Premises or the Project that could cause the Premises or any part of the Project to be classified as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq. or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Premises or any part of the Project under any Environmental Laws.

(h) Landlord shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions affecting the Premises or any part of the Project initiated in connection with any Environmental Laws and have its attorneys' fees in connection therewith paid by Tenant. In addition, Tenant shall not take any remedial action in response to the presence of any Hazardous Material in, under, or about the Premises or the Project (except in the case where loss of life or substantial property damage is imminent or immediate action is required by any governmental entity, in which event Tenant shall take immediate remedial action), nor enter into any settlement agreement, consent decree or other compromise in respect to any claims relating to any Hazardous Material in any way connected with the Premises or the Project, without first notifying Landlord of Tenant's intention to do so and affording Landlord ample opportunity to appear, intervene or otherwise appropriately assert and protect Landlord's interest with respect thereto.

(i) To the extent permitted by law, Tenant hereby indemnifies and agrees to protect, defend and hold the Indemnitees harmless against any actions, claims, demands, liability, costs and expenses, including attorneys' fees and costs, arising from the use, generation, manufacture, production, storage, release, threatened release, discharge, disposal, transportation to or from, or presence of any Hazardous Material on, under or about the Premises or any part of the Project caused by Tenant or by Tenant's Agents (collectively, a "Release") including, without limitation: (1) all foreseeable consequential damages, including loss of rental income and diminution in property value; (2) the costs of any investigation, monitoring, removal, restoration, abatement, repair, cleanup, detoxification or other ameliorative work of any kind or nature (collectively, "Remedial Work") and the preparation and implementation of any closure, remedial or other required plans; (3) any injury to or death of persons or damage to or destruction of property; and (4) any failure of Tenant or Tenant's Agents to observe the covenants of this Section 7.02. For purposes of this Section 7.02(i), any acts or omissions of Tenant's Agents (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Tenant. Tenant's obligations under this Section 7.02(i) shall survive the expiration or earlier termination of this Lease. In case of any action or proceeding brought against the Indemnitees by reason of any such claim, upon notice from Landlord, Tenant covenants to defend such action or proceeding by counsel chosen by Landlord, and reasonably approved by Tenant. In any event, Landlord shall have the right to select as counsel a law firm of quality and capability consistent with first quality "large law firms" in the downtown Los Angeles area. Landlord reserves the right to settle, compromise or dispose of any and all actions, claims and demands related to the foregoing indemnity.

In no event shall Landlord be responsible to Tenant for the presence of Hazardous Material in, on or about the Premises or the Project to the extent caused or contributed to by any third party.

(j) Commencing with the Lease Year in which any Release occurs and continuing thereafter throughout the Term, Tenant shall comply with the provisions of this Section 7.02(j). Within forty-five (45) days following the end of Tenant's fiscal year, Tenant shall provide Landlord with financial statements prepared in accordance with generally accepted accounting principles consistently applied and certified as true and correct by Tenant's independent certified public accountant setting forth Tenant's performance for the applicable fiscal year. As of the execution of this Lease, Tenant's fiscal year ends __________. Tenant shall provide Landlord with prompt written notice of any change in Tenant's fiscal year. If at any time it reasonably appears to Landlord that Tenant is not maintaining sufficient insurance or is not otherwise financially capable of fulfilling its obligations under this Section 7.02, whether or not such obligations have accrued, become liquidated, conditional or contingent, Tenant shall procure and thereafter maintain in full force and effect such insurance or other form of financial assurance, with or from companies or persons and in forms reasonably acceptable to Landlord, as Landlord may from time to time request.

(k) Upon any Release, Tenant shall, subject to Section 7.02(h), promptly notify Landlord of the Release and shall, at its sole expense and immediately after demand by Landlord, commence to perform and thereafter diligently prosecute to completion such Remedial Work as is necessary to restore the Premises, Project or any other property affected by the Release to the condition existing prior to the use of any Hazardous Material. All such Remedial Work shall be performed: (i) in conformance with the requirements of all applicable Environmental Laws; (ii) by one or more contractors, approved in advance in writing by Landlord; and (iii) under the supervision of a consulting engineer approved in advance in writing by Landlord. All costs and expenses of such Remedial Work shall be paid by Tenant, including the charges of such contractor(s) and/or the consulting engineer and Landlord's reasonable attorneys' fees and costs incurred in connection with the monitoring or review of such Remedial Work. In the event Tenant shall fail to timely commence, or cause to be commenced, or fail to diligently prosecute to completion, such Remedial Work, Landlord may, but shall not be required to, cause such Remedial Work to be performed and all costs and expenses thereof, or incurred in connection therewith, shall become immediately due and payable by Tenant. Tenant's obligations under this Section 7.02(k) shall survive the expiration or sooner termination of this Lease.

(l) Hazardous Material shall include by way of illustration, and without limiting the generality of the definition of Hazardous Material in Section 1.03, the following: (i) those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances" or "solid waste" under all present and future federal, state and local laws (whether under common law, statute, rule, regulation or otherwise) relating to the protection of human health or the environment, including California Senate Bill 245 (Statutes of 1987, Chapter 1302), the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as Proposition 65) and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq., all as heretofore and hereafter amended, or in any regulations promulgated pursuant to said laws; (ii) those substances defined as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code, or in any regulations promulgated pursuant to said laws; (iii) those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or designated by the Environmental Protection Agency (or any successor agency) as hazardous substances (see, e.g., 40 CFR Part 302 and amendments thereto); (iv) such other substances, materials and wastes which are or become regulated under applicable Law or by the United States government or which are or become classified as hazardous or toxic under any Law, including California Health & Safety Code, Division 20, and Title 26 of the California Code of Regulations; and (v) any material, waste or substance which contains petroleum, asbestos or polychlorinated biphenyls, is designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act of 1977, 33 U.S.C. Sections 1251, et seq. (33 U.S.C. ss. 1321), is listed pursuant to Section 307 of the Clean Water Act of 1977 (33 U.S.C. ss. 1317), or contains any flammable, explosive or radioactive material.

(m) In addition to Tenant's obligations pursuant to Article Twelve, Tenant shall, no later than the Termination Date, surrender the Premises to Landlord free of Hazardous Material. If Tenant fails to so surrender the Premises and the Project, the provisions of Section 7.02(i) shall apply. Landlord shall have the right, but not the obligation, to appoint a consultant, at Tenant's expense, to conduct an investigation to determine whether any Hazardous Material are located in or about the Premises or the Project, and to determine the corrective measures required to remove such Hazardous Material. Tenant, at its expense, shall comply with all recommendations of the consultant. A failure by Landlord to appoint such a consultant shall in no way relieve Tenant of any of Tenant's obligations set forth in this Lease relating to Hazardous Material, nor constitute a waiver of Landlord's rights under this Lease. Tenant's obligations under this Section 7.02(m) shall survive the expiration or earlier termination of this Lease.

(n) Except as otherwise provided in Section 7.02(d) (concerning the implementation of consultant recommendations) and Section 7.02(k) (concerning the monitoring and review of Remedial Work), all costs incurred by Landlord in retaining a consultant for any purpose contained in this Section 7.02 shall be included in Operating Expenses under this Lease unless Landlord retains a consultant pursuant to this Section 7.02, and such consultant reasonably determines after appropriate review of information and/or inspection that Tenant is breaching its obligations under this Lease to comply with this Section 7.02, in which event all costs and expenses incurred by Landlord in connection with any such review, inspection, and/or implementation of recommendations pursuant to this Section 7.02 shall become due and payable by Tenant as additional Rent, upon presentation by Landlord of an invoice therefor.

(o) Upon any violation of any of the foregoing covenants, Landlord shall be entitled to exercise all remedies available to a landlord against a defaulting tenant, including but not limited to those set forth in Article Eleven. Without limiting the generality of the foregoing, Tenant expressly agrees that upon any such violation Landlord may, at its option (i) immediately terminate this Lease, or (ii) continue this Lease in effect until compliance by Tenant with its clean-up and removal covenant (notwithstanding the expiration of the Term). No action by Landlord hereunder shall impair the obligations of Tenant pursuant to Section 7.02.

7.03 LANDLORD ACCESS TO PREMISES; APPROVALS

(a) Tenant shall permit Landlord to erect, use and maintain pipes, ducts, wiring and conduits in and through the Premises, so long as Tenant's use, layout or design of the Premises is not materially affected or altered. Landlord or Landlord's agents shall have the right to enter upon the Premises in the event of an emergency, or to inspect the Premises, to conduct safety and other testing in the Premises and to make such repairs, alterations, improvements or additions to the Premises or the Building or other parts of the Property as Landlord may deem necessary or desirable (including all alterations, improvements and additions in connection with a change in service provider or providers). Any entry or work by Landlord shall be during normal business hours with prior notice to Tenant at the Premises (without need of written notice to Tenant pursuant to Article Twenty-four), except in emergency, and Landlord shall use reasonable efforts to ensure that any entry or work shall not unreasonably interfere with Tenant's occupancy of the Premises or the conduct of Tenant's business therein.

(b) If Tenant shall not be personally present to permit an entry into the Premises when because of an emergency an entry therein shall be necessary or permissible, Landlord (or Landlord's agents), after attempting to notify Tenant at the Premises (without need of written notice to Tenant pursuant to Article Twenty-four), may enter the Premises without rendering Landlord or its agents liable therefor, and without relieving Tenant of any obligations under this Lease.

(c) During normal business hours with prior notice to Tenant at the Premises (without need of written notice to Tenant pursuant to Article Twenty-four), except in emergency, Landlord may enter the Premises for the purpose of conducting such inspections, tests and studies as Landlord may deem desirable or necessary to confirm Tenant's compliance with all Laws and Environmental Laws or for other purposes necessary in Landlord's reasonable judgment to ensure the sound condition of the Property and the systems serving the Property. Landlord's rights under this Section 7.03 (c) are for Landlord's own protection only, and Landlord has not, and shall not be deemed to have assumed, any responsibility to Tenant or any other party as a result of the exercise or non-exercise of such rights, for compliance with Laws or Environmental Laws or for the accuracy or sufficiency of any item or the quality or suitability of any item for its intended use.

(d) Landlord may do any of the foregoing, or undertake any of the inspection or work described in the preceding paragraphs without such action constituting an actual or constructive eviction of Tenant, in whole or in part, or giving rise to an abatement of Rent by reason of loss or interruption of business of Tenant, or otherwise.

(e) The review, approval or consent of Landlord with respect to any item required or permitted under this Lease is for Landlord's own protection only, and Landlord has not, and shall not be deemed to have assumed, any responsibility to Tenant or any other party, as a result of the exercise or non-exercise of such rights, for compliance with Laws or Environmental Laws or for the accuracy or sufficiency of any item or the quality or suitability of any item for its intended use.

7.04 QUIET ENJOYMENT

Landlord covenants, in lieu of any implied covenant of quiet possession or quiet enjoyment, that so long as Tenant is in compliance with the covenants and conditions set forth in this Lease, Tenant shall have the right to quiet enjoyment of the Premises without hindrance or interference from Landlord or those claiming through Landlord, and subject to the covenants and conditions set forth in this Lease and to the rights of any Mortgagee or ground lessor.

ARTICLE EIGHT

MAINTENANCE

8.01 LANDLORD'S MAINTENANCE

(a) Subject to Article Fourteen and Section 8.02, Landlord shall maintain in good condition the following: (i) structural portions of the Building; (ii) roof and skylights; (iii) exterior walls (excluding interior paint on such walls, and all glass and exterior doors, facing or opening into any space occupied by Tenant or other tenants); (iv) foundation; (v) slab floor; (vi) under-slab standard sewer and plumbing system of the Building; (vii) standard feeder lines for electricity, cable, telephone, telecommunications and other utilities to the main panels in the Building's utility room, except for any parts of such lines and facilities which are owned and/or maintained by the respective utility; and (viii) fire pump assembly and distribution system up to the boundary of the Premises. Landlord shall have no responsibility to maintain, repair or replace the Building's standard heating, ventilating and air conditioning equipment (except to the extent of any such equipment exclusively serving Common Areas, if any, within the Building), and all such maintenance, repairs and replacement shall be performed by Tenant pursuant to the terms of Section 8.02. Landlord shall not be required to make any repair under this Section 8.01 to the Premises or Property (either as initially delivered by Landlord or thereafter) resulting from (a) any Tenant Additions performed by, for or because of Tenant or to special equipment or systems installed by, for or because of Tenant, (b) the installation, use or operation of Tenant's property, fixtures and equipment, and without limiting the generality of the foregoing, Tenant shall be responsible for any maintenance or repair resulting from its racking system, (c) the moving of Tenant's goods, fixtures, equipment or other property in or out of the Premises or Property, or in and about the Premises or Property, (d) Tenant's use or occupancy of the Premises in violation of Article Seven, (e) Tenant's failure to observe any condition or perform any obligation of Tenant under this Lease, (f) any act or neglect of Tenant, its employees, servants, agents, contractors, invitees or customers, (g) fire and other casualty, except as provided by Article Fourteen, or (h) condemnation, except as provided by Article Fifteen.

(b) Subject to Article Fourteen and Section 8.02, Landlord shall also (i) operate and maintain in good condition and replace as necessary the Common Areas of the Project, including the landscaping and irrigation therefor, common drives, ramps, access and serviceways (including sweeping, striping and slurry coating), outdoor lighting of the Common Areas, and (ii) operate, manage and maintain in good condition any Project signage, except any specific identification of Tenant or other tenants on any monument(s) or multi-tenant sign platform(s), if any. Subject to Section 2.07, Section 8.02 and Article Fourteen, Landlord shall be responsible to repave, as necessary, the Truck Court and Tenant's Parking Area, except that Tenant shall be responsible for repaving and repair due to improper use and due to any damage in connection with installation, maintenance, repair or removal of any Tenant Additions affecting such area.

(c) There shall be no abatement of rent, no allowance to Tenant for diminution of rental value and no liability of Landlord by reason of inconvenience, annoyance or any injury to or interference with Tenant's business arising from the making of or the failure to perform any maintenance, repairs, alterations or improvements in or to any portion of the Project or in or to any fixtures, appurtenances or equipment therein. Except as otherwise provided in Section 8.03, Tenant waives the right to make repairs at Landlord's expense under any Law now or hereafter in effect. The preceding sentences shall not deprive Tenant of any abatement of Rent to which Tenant would be entitled pursuant to Section 6.04, Article Fourteen or Article Fifteen, or of Tenant's rights and remedies for a Landlord default pursuant to Section 11.05, and shall not relieve Landlord of liability for damages to either persons, property, or business to the

extent caused by Landlord's negligence or wrongful act, subject to and without diminishing any waivers by Tenant pursuant to Article Seventeen or waivers by Tenant or Landlord or their respective insurers in effect pursuant to Section 16.04.

8.02 TENANT'S MAINTENANCE

Subject to the provisions of Article Fourteen, Tenant shall, at Tenant's sole cost and expense, maintain in good and clean condition, and make all repairs (except for any maintenance and repair which Landlord is expressly required to make pursuant to Section 8.01) to the following: (a) the Premises and fixtures therein, including the interior walls, any paint on the interior side of exterior walls, glass and windows of the Premises, all doors to the Premises and all doors within the Premises; (b) the slab within the Premises, but Tenant shall only be responsible for repair and repaving due to damage to or removal of any part of the slab in connection with installation, maintenance, repair or removal of any Tenant Additions or due to improper use, including overloading or improperly engineered or installed racking system, and without limiting the generality of the foregoing, Tenant shall cause any racking system to be designed by an engineer who has been approved in writing by Landlord, and any such system and its use shall be appropriate for, and shall not cause any damage to, the slab; (c) the electrical, lighting, plumbing and heating, ventilating and air conditioning systems or other utilities to the extent located within or serving the Premises (including both standard and non-standard equipment); (d) the Truck Court, Tenant's Parking Area and other area immediately surrounding the Premises (including all service-ways, loading docks and dock areas adjacent to the Premises, and garbage enclosures serving the Premises), and without limiting the generality of the foregoing, if the Term is longer than sixty-one (61) months, Tenant shall slurry coat any asphalt surfacing in such areas once every four (4) years during the Term, provided however, Tenant shall not be obligated to repave the Truck Court or Tenant's Parking Area except for improper use and for repair and restoration of any damage in connection with installation, maintenance, repair or removal of any Tenant Additions affecting such area; (e) fire sprinkler system within the Premises and (f) Tenant's signage. Tenant shall enter into contracts ("Service Contracts") for regularly scheduled inspections and preventive maintenance/service, with contractors, scope of work and frequency of inspection, maintenance or service, approved in writing by Landlord, in its reasonable discretion, for inspection, servicing and maintaining the following equipment and improvements, to the extent either located within or serving the Premises (including both standard and non-standard equipment)(but this obligation shall not apply to equipment, if any, which is located within the Premises but does not serve the Premises): heating, ventilating and air conditioning systems and equipment, and, if requested by Landlord, of any other systems, equipment or improvements. Such service contracts shall provide for reports to Landlord by the contractors. Tenant shall deliver to Landlord a copy of the initial Service Contracts within sixty (60) days after the Commencement Date and any other Service Contract entered into by Tenant with respect to the Premises within ten (10) after Landlord's request. In the event Tenant fails, in the reasonable judgment of Landlord, to meet the requirements for such Service Contracts and cause such inspections, maintenance or service to be performed, or in the event Tenant fails to maintain the Premises, Truck Court and Tenant's Parking Areas in good and clean condition and repair, which failure continues at the end of twenty-two (22) days following written notice given by Landlord stating with particularity the nature of the failure, Landlord shall have the right (but shall not be obligated) to obtain such Service Contracts and to enter such areas and perform such maintenance, repairs or refurbishing at Tenant's sole cost and expense (including a sum for overhead to Landlord); provided, however, if the nature of the maintenance or repair is such that it cannot, with the exercise of reasonable diligence, be completed within twenty-two (22) days of Tenant's receipt of Landlord's notice, Landlord shall not undertake such maintenance or repairs at Tenant's expense provided Tenant commences such maintenance or repairs within said 22-day period and thereafter diligently and continuously prosecutes the same to completion and provided further, however, that in the event of an emergency condition, Landlord shall have the right to make such repairs on behalf of Tenant after giving Tenant such notice, if any, as is reasonable under the circumstances. Landlord's right of entry pursuant to Section 7.03 shall include the right to enter and inspect such areas for violations of Tenant's covenants herein. Tenant shall maintain written records of maintenance and repairs, and shall use certified technicians to perform such maintenance and repairs, as required by any applicable Law. Notwithstanding anything contained in Section 8.01, but subject to the waivers set forth in Section 16.04, Tenant shall pay for any repairs to the Building or the Project which are caused by the act, negligence or carelessness of Tenant or its assignees, subtenants or employees, or of the respective agents of any of the foregoing persons, or of any other persons permitted in the Building or elsewhere in the Project by Tenant or any of them.

8.03 TENANT'S RIGHT TO MAKE CERTAIN REPAIRS

Notwithstanding any other provision of the Lease to the contrary (but subject to the provisions of Article Fourteen or Article Fifteen), if Tenant gives detailed written notice to Landlord, with a copy to any Mortgagee or ground lessor whose name and address have been furnished to Tenant, of a failure of Landlord to perform a specific repair or maintenance obligation of Landlord under Section 8.01(a) or (b), which failure materially adversely affects the conduct of Tenant's business from the Premises, and Landlord (or such Mortgagee or ground lessor) fails to commence corrective action within thirty (30) days after receipt of such notice, and if Tenant gives Landlord (and such Mortgagee or ground lessor) a second detailed written notice specifying the required corrective action which Tenant proposes to take if Landlord does not commence the required corrective action within ten (10) business days after receipt of such second notice, and thereafter diligently pursue it to completion, and Landlord (or such Mortgagee or ground lessor) fails to commence the required corrective action within ten (10) business days after receipt of such second notice, and thereafter diligently to pursue it to completion, then Tenant may proceed to take the required action and shall be entitled to reimbursement by Landlord of Tenant's reasonable, actual costs in taking such action, which action and reimbursement shall be in accordance with the provisions below. Provided however, in the event of an emergency (as defined below), Tenant may give such notice by telephone to the emergency/after hours telephone number and person designated by Landlord from time to time (as set forth in Section 1.01(2)

above or as otherwise designated from time to time by Landlord or its Project Manager by written notice to Tenant), and if Tenant gives such notice to Landlord and Landlord (or Mortgagee or ground lessor) fails to commence corrective action within twenty-four (24) hours after receipt of such notice and thereafter diligently pursue it to completion, then Tenant may proceed to take the required action and shall be entitled to reimbursement by Landlord of Tenant's reasonable, actual costs in taking such action, which action and reimbursement shall be in accordance with the provisions below. In any such event, Tenant shall also send (on the same day if during business hours on a business day and otherwise on the next business day) Landlord a written notice via overnight courier with respect to such emergency and required corrective action confirming Tenant's telephonic notice. For purposes of this Section 8.03, an "emergency" shall mean a failure of Landlord as described in the first sentence of this Section which further has caused, is presently causing or will immediately cause serious bodily injury or material damage to Tenant's property or material adverse affect on the conduct of Tenant's business from the Premises. In the event that Tenant takes such action, Tenant shall use only those contractors used by Landlord in the Building for the type of work required unless such contractors are unwilling or unable to perform, or timely perform, such work, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in comparable buildings in the San Bernardino-Riverside warehouse/industrial market. Provided however, Tenant shall use only such contractor, materials, parts and techniques required under any warranty then in effect. In all work, Tenant shall use only materials and parts of kind and quality at least equal to the original and consistent with the design of the Building. Any corrective action by either party under this Subsection (d) shall otherwise comply with all applicable provisions of the Lease. Promptly following completion of any work by Tenant pursuant to this Subsection (d), Tenant shall deliver to Landlord a detailed invoice of the work completed, the contractors used, the materials used and the reasonable, actual costs of such work which Tenant claims are payable by Landlord hereunder. Such amount shall be due within thirty (30) days after receipt by Landlord, unless within thirty (30) days after receipt Landlord gives Tenant written notice of objection to the payment of such invoice, setting forth with reasonable particularity Landlord's reasons for its claim that such action was not required to be taken by Landlord pursuant to the terms of the Lease, or that the work by Tenant was defective (or otherwise did not correctly repair the problem), or that the charges are excessive (in which case Landlord shall pay the amount it contends would not have been excessive). In the event Tenant disputes Landlord's objection or in the event that Landlord has not objected but has failed to pay, Tenant's sole remedy shall be to claim a default by Landlord under the Lease and to sue Landlord for payment, provided that in no event shall Tenant have the right to a deduction or offset against Rent or to terminate or rescind the Lease.

ARTICLE NINE

ALTERATIONS AND IMPROVEMENTS

9.01 TENANT ALTERATIONS

(a) The following provisions shall apply to the completion of any Tenant Alterations:

(1) Tenant shall not, except as provided herein, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, make or cause to be made any Tenant Alterations in or to the Premises or any Building Systems serving the Premises. Further, Tenant shall not, except as provided herein, without the prior written consent of Landlord, in Landlord's sole discretion, make or cause to be made any Tenant Alterations which affect any structural elements of the Building, its foundation, its roof, its exterior, or any areas outside the Building. Prior to making any Tenant Alterations, Tenant shall give Landlord ten (10) days prior written notice (or such earlier notice as would be necessary pursuant to applicable Law) to permit Landlord sufficient time to post appropriate notices of non-responsibility. Subject to all other requirements of this Article Nine, Tenant may undertake Decoration work without Landlord's prior written consent. Tenant shall furnish Landlord with the names and addresses of all contractors and subcontractors and copies of all contracts. All Tenant Alterations shall be completed only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, provided, however, that all engineers and contractors performing all work relating to the Building Systems, any work in the Building's utility room, or which affect any structural elements of the Building, the foundation, the roof or the exterior of the Building shall be engineers or contractors chosen by Tenant from a list of at least three (3) engineers or contractors (other than the fire alarm contractor) submitted by Landlord to Tenant or such other engineer or contractor as Landlord shall approve in writing (which approval Landlord may withhold with or without justification and without stating any reason or basis for such non-approval). The contractors, mechanics and engineers who may be used are further limited to those whose work will not cause or threaten to cause disharmony or more than de minimis interference with Landlord or other tenants in the Building and their respective agents and contractors performing work in or about the Building. Landlord may further condition its consent upon Tenant furnishing to Landlord and Landlord approving prior to the commencement of any work or delivery of materials to the Premises related to the Tenant Alterations such of the following as specified by Landlord: architectural plans and specifications, opinions from Landlord's engineers stating that the Tenant Alterations will not adversely affect the Building Systems, necessary permits and licenses, certificates of insurance, and such other documents in such form reasonably requested by Landlord. Landlord may, in the exercise of reasonable judgment, request that Tenant provide Landlord with appropriate evidence of Tenant's ability to complete and pay for the completion of the Tenant Alterations. Upon completion of the Tenant Alterations, Tenant shall deliver to Landlord an as-built mylar and digitized (if available) set of plans and specifications for the Tenant Alterations.

(2) Tenant shall pay the cost of all Tenant Alterations and the cost of decorating the Premises and any work to the Property occasioned thereby. With Tenant's request for approval of

Tenant Alterations, Tenant shall submit plans and specifications to Landlord and shall reimburse Landlord for all costs which Landlord may incur in connection with review of such plans and specifications, including any costs or expenses which Landlord may incur in electing to have outside architects and engineers review said matters. Upon completion of Tenant Alterations, Tenant shall furnish Landlord with contractors' affidavits and full and final waivers of lien and receipted bills covering all labor and materials expended and used in connection therewith and such other documentation reasonably requested by Landlord or Mortgagee.

(3) Tenant agrees to complete all Tenant Alterations (i) in accordance with all Laws, Environmental Laws, all requirements of applicable insurance companies and in accordance with Landlord's standard construction rules and regulations, and (ii) in a good and workmanlike manner with the use of good grades of materials. Tenant shall notify Landlord immediately if Tenant receives any notice of violation of any Law in connection with completion of any Tenant Alterations and shall immediately take such steps as are necessary to remedy such violation. In no event shall such supervision or right to supervise by Landlord nor shall any approvals given by Landlord under this Lease constitute any warranty by Landlord to Tenant of the adequacy of the design, workmanship or quality of such work or materials for Tenant's intended use or of compliance with the requirements of Section 9.01(a)(3)(i) and (ii) above or impose any liability upon Landlord in connection with the performance of such work.

(b) All Tenant Additions to the Premises whether installed by Landlord orTenant, shall without compensation or credit to Tenant, become part of thePremises and the property of Landlord at the time of their installation andshall remain in the Premises, unless pursuant to Article Twelve, Tenant mayremove them or is required to remove them at Landlord's request; providedhowever, Landlord and Tenant agree that Tenant's freezers and coolers, racking,equipment, and office furniture shall be the property of Tenant, and shall beremoved by Tenant, and the affected areas restored to their condition before anysuch installation, subject to Article Twelve.

(c) To the extent that any work in connection with Tenant's connections toLandlord's existing electrical, water, sewer and telephone systems pursuant toSection 6.02, Tenant's connections or installations pursuant to Sections 6.03 or6.07, or performance of Tenant's obligations pursuant to Section 8.02, orperformance of any Tenant Work pursuant to the Workletter, or performance of anyTenant Alterations permitted above, would require access by Tenant to or throughspace of another lessee or occupant of the Building, any such access shall befurther subject to the following conditions: (i) Tenant's reasonable priorwritten request to Landlord, so that Landlord may in turn give or makereasonable advance written notice and/or request to such lessee or occupant;(ii) coordination by Tenant so that the time of such entries shall be atmutually convenient dates and times for the lessee or occupant, Landlord andTenant, provided however, Tenant agrees that Landlord or such lessee or occupantmay require that such entry or entries be outside of normal business hours;(iii) Tenant shall use commercially reasonable efforts to avoid interference,and to minimize unavoidable interference, from any such access with theoccupancy of such lessee or occupant; and (iv) in connection with any suchaccess, Tenant shall promptly pay for all damage caused by Tenant and/or thoseentering on its behalf, and at the option of Landlord, Tenant shall perform anysuch repairs and restoration.

(d) To the extent that any work in connection with Tenant's connections toLandlord's existing electrical, water, sewer and telephone systems pursuant toSection 6.02, Tenant's connections or installations pursuant to Sections 6.03 or6.07, or performance of Tenant's obligations pursuant to Section 8.02, orperformance of any Tenant Work pursuant to the Workletter, or performance of anyTenant Alterations permitted above, would require access by Tenant through theCommon Areas, any such access shall be subject to Section 2.06(a).

9.02 LIENS

Tenant shall not permit any lien or claim for lien of any mechanic, laborer orsupplier or any other lien to be filed against the Premises, Building or anyother part of the Property arising out of work performed, or alleged to havebeen performed by, or at the direction of, or on behalf of Tenant. If any suchlien or claim for lien is filed, Tenant shall within thirty (30) days ofreceiving notice of such lien or claim (a) have such lien or claim for lienreleased of record or (b) deliver to Landlord a bond in form, content, amount,and issued by surety, reasonably satisfactory to Landlord, indemnifying,protecting, defending and holding harmless the Indemnitees against all costs andliabilities resulting from such lien or claim for lien and the foreclosure orattempted foreclosure thereof. If Tenant fails to take any of the above actions,Landlord, in addition to its rights and remedies under Article Eleven, withoutinvestigating the validity of such lien or claim for lien, may bond (or in theevent of risk of imminent forfeiture, may pay or discharge) the same and Tenantshall, as payment of additional Rent hereunder, reimburse Landlord upon demandfor the amount so paid by Landlord, including Landlord's expenses and attorneys'fees.

ARTICLE TEN

ASSIGNMENT AND SUBLETTING

10.01 ASSIGNMENT AND SUBLETTING

(a) Without the prior written consent of Landlord as provided in thisArticle 10, Tenant may not sublease, assign, mortgage, pledge, hypothecate orotherwise transfer or permit the transfer of this Lease or the encumbering ofTenant's interest therein in whole or in part, by operation of Law or otherwiseor permit the use or occupancy of the Premises, or any part thereof, by anyoneother than Tenant, provided, however,

if Landlord chooses not to recapture the space proposed to be subleased orassigned as provided in Section 10.02, Landlord shall not unreasonably withholdits consent to a subletting or assignment under this Section 10.01. Tenantagrees that the provisions governing sublease and assignment set forth in thisArticle Ten shall be deemed to be reasonable. If Tenant desires to enter intoany sublease of the Premises or assignment of this Lease, Tenant shall deliverwritten notice thereof to Landlord ("Tenant's Notice"), together with theidentity of the proposed subtenant or assignee and the proposed principal termsthereof and financial and other information sufficient for Landlord to make aninformed judgment with respect to such proposed subtenant or assignee at leastsixty (60) days prior to the commencement date of the term of the proposedsublease or assignment. If Tenant proposes to sublease less than all of theRentable Area of the Premises, the space proposed to be sublet and the spaceretained by Tenant must each be a marketable unit as reasonably determined byLandlord and otherwise in compliance with all Laws. Landlord shall notify Tenantin writing of its approval or disapproval of the proposed sublease or assignmentor its decision to exercise its rights under Section 10.02 within thirty (30)days after receipt of Tenant's Notice (and all required information). During anytime when any other space in the Building (including the New Space, as definedin Rider 2, if not leased by Tenant) is not under lease or is being marketed byLandlord in anticipation such space will be available for lease, Tenant shallnot sublease any portion of the Premises or assign this Lease to any othertenant of the Project. Tenant shall submit for Landlord's approval (whichapproval shall not be unreasonably withheld) any advertising which Tenant or itsagents intend to use with respect to the space proposed to be sublet.

(b) With respect to Landlord's consent to an assignment or sublease,Landlord may take into consideration any factors which Landlord may deemrelevant, and the reasons for which Landlord's denial shall be deemed to bereasonable shall include, without limitation, the following:

(i) the business reputation or creditworthiness of any proposed subtenant or assignee is not acceptable to Landlord; or

(ii) any proposed assignee's or subtenant's use of the Premises would violate Section 7.01 or any other provision of the Lease; or

(iii) the proposed subtenant or assignee is a bona fide prospective tenant of Landlord in the Project as demonstrated by a written proposal dated within ninety (90) days prior to the date of Tenant's request.

In no event shall Landlord be obligated to consider a consent to any proposed assignment of the Lease which would assign less than the entire Premises. In the

event Landlord wrongfully withholds its consent to any proposed sublease of the Premises or assignment of the Lease, Tenant's sole and exclusive remedy therefor

shall be to seek specific performance of Landlord's obligations to consent to such sublease or assignment.

(c) Any sublease or assignment shall be expressly subject to the terms andconditions of this Lease. Any subtenant or assignee shall execute such documentsas Landlord may require to evidence the terms of such consent, including theagreements described below. If Tenant shall assign this Lease as permittedherein, the assignee shall expressly assume all of the obligations of Tenanthereunder in a written instrument satisfactory to Landlord and furnished toLandlord not later than fifteen (15) days prior to the effective date of theassignment. If Tenant shall sublease the Premises as permitted herein, Tenantshall, at Landlord's option, within fifteen (15) days following any request byLandlord, obtain and furnish to Landlord the written agreement satisfactory toLandlord of such subtenant to the effect that the sublease is subordinate to theLease, and (i) in the event of a default by Tenant under the Lease, subtenantwill upon notice from Landlord of such default and of Tenant's assignment toLandlord of all rents and payments under the sublease, pay such rents andpayments directly to Landlord; and (ii) subtenant will attorn to Landlord andwill pay all subrent directly to Landlord. Tenant shall deliver to Landlord acopy of all agreements executed by Tenant and the proposed subtenant andassignee with respect to the Premises for Landlord's approval, which shall notbe unreasonable withheld. Landlord's approval of a sublease, assignment,hypothecation, transfer or third party use or occupancy shall not constitute awaiver of Tenant's obligation to obtain Landlord's consent to furtherassignments or subleases, hypothecations, transfers or third party use oroccupancy.

(d) For purposes of this Article Ten, an assignment shall be deemed toinclude a change in the majority control of Tenant, resulting from any transfer,sale or assignment of shares of stock or membership interests of Tenantoccurring by operation of Law or otherwise, and includes any merger,acquisition, consolidation or reorganization, except as otherwise provided inthis Subsection below. Notwithstanding any provision of this Section to thecontrary, an assignment for purposes of this Article does not include anytransfer of control of the stock or membership interests of Tenant through (i)any public offering of shares of stock in Tenant in accordance with applicableState and Federal law, rules, regulations and orders if thereafter the stockshall be listed and publicly traded through the New York Stock Exchange,American Stock Exchange or Pacific Stock Exchange, or listed and publicly tradedthrough the NASDAQ national market and its price listed at least daily in theWall Street Journal; or (ii) public sale of such stock effected through suchExchanges or the NASDAQ national market. If Tenant is a partnership, any changein the partners of Tenant shall be deemed to be an assignment.

(e) Notwithstanding anything to the contrary in Sections 10.01(a) and10.02, Tenant shall have the right, without the prior written consent ofLandlord, to assign this Lease to an Affiliate (defined below) or to subleasethe Premises or any part thereof to an Affiliate provided that (i) Landlordreceives thirty (30) days prior written notice of an assignment or sublease;(ii) with respect to an Affiliate which is a

Successor or Purchaser as defined in Section 10.01(g), such Affiliate's networth is not less than Tenant's net worth immediately prior to the assignment orsubletting; (iii) the Affiliate assumes (except in the event of a sublease) in awriting reasonably satisfactory to Landlord all of Tenant's obligations andliability under this Lease and delivers to Landlord a proposed assumption nolater than fifteen (15) days prior to the effective date of the assignment and afully executed original of such assumption no later than the effective date;(iv) Landlord receives no later than the effective date a fully executed copy ofan assignment or sublease agreement between Tenant and the Affiliate; and (v)promptly after Landlord's written request, Tenant and the Affiliate provide suchreasonable documents or information which Landlord reasonably requests for thepurpose of substantiating whether or not the assignment or sublease is to anAffiliate. Possession or occupancy of the Premises by Mountain People'sWarehouse Incorporated ("MPWI"), an Affiliate of Tenant, as long as it remainsan Affiliate of Tenant, shall not be deemed or construed to be a subleasehereunder and Tenant shall be permitted to allow, subject to the terms andconditions of this Lease (but without having to obtain Landlord's consentthereto), MPWI to occupy the Premises, provided that MPWI acknowledges that itis jointly and severally liable with Tenant under the terms and conditions ofthis Lease.

(f) (Intentionally omitted)

(g) For purposes of this Lease, Affiliate shall mean any Person (asdefined below) which: (i) is controlled by, controls, or is under common controlwith Tenant; or (ii) is the corporation or other entity (the "Successor")resulting from a merger, consolidation or non-bankruptcy reorganization withTenant; or (iii) is the purchaser of substantially all the assets of Tenant as agoing concern (the "Purchaser"). The word Person means an individual,corporation, limited liability company, partnership, trust, firm or otherentity. For purposes of this definition, the word "control," shall mean, withrespect to a Person that is a corporation or a limited liability company, theright to exercise, directly or indirectly, more than fifty percent (50%) of thevoting rights attributable to the shares or membership interests of thecontrolled Person and, with respect to a Person that is not a corporation, thepossession, directly or indirectly, of the power at all times to direct or causethe direction of the management of the controlled Person.

10.02 RECAPTURE

Except with respect to (a) any sublease or assignment to an Affiliate whichcomplies with the provisions of Section 10.01 above, or (b) any sublease of lessthan fifty percent (50%) of the Premises which complies with the provisions ofSection 10.01 above, Landlord shall have the option to exclude from the Premisescovered by this Lease ("recapture"), the space proposed to be sublet or subjectto the assignment, effective as of the proposed commencement date of suchsublease or assignment. If Landlord elects to recapture, Tenant shall surrenderpossession of the space proposed to be subleased or subject to the assignment toLandlord on the effective date of recapture of such space from the Premises,such date being the Termination Date for such space. Effective as of the date ofrecapture of any portion of the Premises pursuant to this section, the MonthlyBase Rent, Rentable Area of the Premises and Tenant's Share shall be adjustedaccordingly.

10.03 EXCESS RENT

(Intentionally omitted)

10.04 TENANT LIABILITY

In the event of any sublease or assignment, whether or not with Landlord'sconsent, Tenant shall not be released or discharged from any liability, whetherpast, present or future, under this Lease, including any liability arising fromthe exercise of any renewal or expansion option, to the extent such exercise isexpressly permitted by Landlord. Tenant's liability shall remain primary, and inthe event of default by any subtenant, assignee or successor of Tenant inperformance or observance of any of the covenants or conditions of this Lease,Landlord may proceed directly against Tenant without the necessity of exhaustingremedies against said subtenant, assignee or successor. After any assignment,Landlord may consent to subsequent assignments or subletting of this Lease, oramendments or modifications of this Lease with assignees of Tenant, withoutnotifying Tenant, or any successor of Tenant, and without obtaining its or theirconsent thereto, and such action shall not relieve Tenant or any successor ofTenant of liability under this Lease. If Landlord grants consent to suchsublease or assignment, Tenant shall pay all reasonable attorneys' fees andexpenses incurred by Landlord with respect to such assignment or sublease. Inaddition, if Tenant has any options to extend the Term or to add other space tothe Premises, such options shall not be available to any subtenant or assignee(other than an assignee which is an Affiliate and entitled to exercise any suchoption pursuant to its provisions as set forth in Rider 2), directly orindirectly without Landlord's express written consent, which may be withheld inLandlord's sole discretion, except as otherwise expressly provided in suchoptions.

ARTICLE ELEVEN

DEFAULT AND REMEDIES

11.01 EVENTS OF DEFAULT

The occurrence or existence of any one or more of the following shall constitute a "Default" by Tenant under this Lease:

(i) Tenant fails to pay any installment or other payment of Rent including Rent Adjustment Deposits or Rent Adjustments within three (3) business days after the date when due;

(ii) Tenant fails to observe or perform any of the other covenants, conditions or provisions of this Lease and fails to cure such default within fifteen (15) days after written notice thereof to Tenant, unless the default involves a hazardous condition, which shall be cured forthwith or unless the failure to perform is a Default for which this Lease specifies there is no cure or grace period, provided however, if the default is one to which the fifteen (15) day cure period applies and of such nature that it cannot reasonably be cured within fifteen (15) days, Tenant shall be in Default if Tenant either fails to commence to cure such default within fifteen (15) days or fails diligently and continuously to prosecute such cure to completion or in any event fails to complete such cure within ninety (90) days after such written notice from Landlord (unless such Default is not capable of being cured within ninety (90) days and subject to reasonable extensions for Force Majeure delays);

(iii) the interest of Tenant in this Lease is levied upon under execution or other legal process;

(iv) a petition is filed by or against Tenant to declare Tenant bankrupt or seeking a plan of reorganization or arrangement under any Chapter of the Bankruptcy Act, or any amendment, replacement or substitution therefor, or to delay payment of, reduce or modify Tenant's debts, which in the case of an involuntary action is not discharged within thirty (30) days;

(v) Tenant is declared insolvent by Law or any assignment of Tenant's property is made for the benefit of creditors;

(vi) a receiver is appointed for Tenant or Tenant's property, which appointment is not discharged within thirty (30) days;

(vii) any action taken against Tenant to reorganize or modify Tenant's capital structure in a materially adverse way which in the case of an involuntary action is not discharged within thirty (30) days; or

(viii) upon the dissolution of Tenant.

11.02 LANDLORD'S REMEDIES

(a) A Default shall constitute a breach of the Lease for which Landlordshall have the rights and remedies set forth in this Section 11.02 and all otherrights and remedies set forth in this Lease or now or hereafter allowed by Law,whether legal or equitable, and all rights and remedies of Landlord shall be cumulative and none shall exclude any other right or remedy.

(b) With respect to a Default, at any time Landlord may terminate Tenant's right to possession by written notice to Tenant stating such election. Any written notice required pursuant to Section 11.01 shall constitute notice of unlawful detainer pursuant to California Code of Civil Procedure Section 1161 if, at Landlord's sole discretion, it states Landlord's election that Tenant's right to possession is terminated after expiration of any period required by Law or any longer period required by Section 11.01. Upon the expiration of the period stated in Landlord's written notice of termination (and unless such notice provides an option to cure within such period and Tenant cures the Default within such period), Tenant's right to possession shall terminate and this Lease shall terminate, and Tenant shall remain liable as hereinafter provided. Upon such termination in writing of Tenant's right to possession, Landlord shall have the right, subject to applicable Law, to re-enter the Premises and dispossess Tenant and the legal representatives of Tenant and all other occupants of the Premises by unlawful detainer or other summary proceedings, or otherwise as permitted by Law, regain possession of the Premises and remove their property (including their trade fixtures, personal property and those Tenant Additions which Tenant is required or permitted to remove under Article Twelve), but Landlord shall not be obligated to effect such removal, and such property may, at Landlord's option, be stored elsewhere, sold or otherwise dealt with as permitted by Law, at the risk of, expense of and for the account of Tenant, and the proceeds of any sale shall be applied pursuant to Law. Landlord shall in no event be responsible for the value, preservation or safekeeping of any such property. Tenant hereby waives all claims for damages that may be caused by Landlord's removing or storing Tenant's personal property pursuant to this Section or Section 12.01, and Tenant hereby indemnifies, and agrees to defend, protect and hold harmless, the Indemnitees from any and all loss, claims, demands, actions, expenses, liability and cost (including attorneys' fees and expenses) arising out of or in any way related to such removal or storage. Upon such written termination of Tenant's right to possession and this Lease, Landlord shall have the right to recover damages for Tenant's Default as provided herein or by Law, including the following damages provided by California Civil Code Section 1951.2:

(1) the worth at the time of award of the unpaid Rent which had been earned at the time of termination;

(2) the worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could reasonably have been avoided;

(3) the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; and

(4) 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. The word "rent" as used in this Section 11.02 shall have the same meaning as the defined term Rent in this Lease. The "worth at the time of award" of the amount referred to in clauses (1) and (2) above is computed by allowing interest at the Default Rate. The worth at the time of award of the amount referred to in clause (3) above is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). For the purpose of determining unpaid Rent under clause (3) above, the monthly Rent reserved in this Lease shall be deemed to be the sum of the Monthly Base Rent and the amounts last payable by Tenant as Rent Adjustment Deposits and for electricity and other utilities used by or furnished to Tenant for the calendar year in which Landlord terminated this Lease as provided hereinabove.

(c) Even if Tenant is in Default and/or has abandoned the Premises, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession by written notice as provided in Section 11.02(b) above, and Landlord may enforce all its rights and remedies under this Lease, including the right to recover Rent as it becomes due under this Lease. In such event, Landlord shall have all of the rights and remedies of a landlord under California Civil Code Section 1951.4 (lessor may continue Lease in effect after Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations), or any successor statute. During such time as Tenant is in Default, if Landlord has not terminated this Lease by written notice and if Tenant requests Landlord's consent to an assignment of this Lease or a sublease of the Premises, subject to Landlord's option to recapture pursuant to Section 10.02, Landlord shall not unreasonably withhold its consent to such assignment or sublease. Tenant acknowledges and agrees that the provisions of Article Ten shall be deemed to constitute reasonable limitations of Tenant's right to assign or sublet. Tenant acknowledges and agrees that in the absence of written notice pursuant to Section 11.02(b) above terminating Tenant's right to possession, no other act of Landlord shall constitute a termination of Tenant's right to possession or an acceptance of Tenant's surrender of the Premises, including acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon the initiative of Landlord to protect Landlord's interest under this Lease or the withholding of consent to a subletting or assignment, or terminating a subletting or assignment, if in accordance with other provisions of this Lease.

(d) (Intentionally omitted)

(e) Tenant hereby waives any and all rights to relief from forfeiture, redemption or reinstatement granted by Law (including California Civil Code of Procedure Sections 1174 and 1179) in the event of Tenant being evicted or dispossessed for any cause or in the event of Landlord obtaining possession of the Premises by reason of Tenant's Default or otherwise;

(f) When this Lease requires giving or service of a notice, that notice shall replace rather than supplement any equivalent or similar statutory notice, including any equivalent or similar notices required by California Code of Civil Procedure Section 1161 or any similar or successor statute. When a statute requires service of a notice in a particular manner, service of that notice (or a similar notice required by this Lease) in the manner required by Article Twenty-four shall replace and satisfy the statutory service-of-notice procedures, including those required by Code of Civil Procedure section 1162 or any similar or successor statute.

(g) The voluntary or other surrender or termination of this Lease, or a mutual termination or cancellation thereof, shall not work a merger and shall terminate all or any existing assignments, subleases, subtenancies or occupancies permitted by Tenant, except if and as otherwise specified in writing by Landlord.

(h) No delay or omission in the exercise of any right or remedy of Landlord upon any default by Tenant, and no exercise by Landlord of its rights pursuant to Section 26.15 to perform any duty which Tenant fails timely to perform, shall impair any right or remedy or be construed as a waiver. No provision of this Lease shall be deemed waived by Landlord unless such waiver is in a writing signed by Landlord. The waiver by Landlord of any breach of any provision of this Lease shall not be deemed a waiver of any subsequent breach of the same or any other provision of this Lease.

11.03 ATTORNEY'S FEES

In the event any party brings any suit or other proceeding with respect to the subject matter or enforcement of this Lease, the prevailing party (as determined by the court, agency or other authority before which such suit or proceeding is commenced) shall, in addition to such other relief as may be awarded, be entitled to recover reasonable attorneys' fees, expenses and costs of investigation as actually incurred, including court costs, expert witness fees, costs and expenses of investigation, and all reasonable attorneys' fees, costs and expenses in any such suit or proceeding (including in any action or participation in or in connection with any case or proceeding under the Bankruptcy Code, 11 United States Code Sections 101 et seq., or any successor statutes, in establishing or enforcing the right to indemnification, in appellate proceedings, or in connection with the enforcement or collection of any judgment obtained in any such suit or proceeding).

11.04 BANKRUPTCY

The following provisions shall apply in the event of the bankruptcy or insolvency of Tenant:

(a) In connection with any proceeding under Chapter 7 of the Bankruptcy Code where the trustee of Tenant elects to assume this Lease for the purposes of assigning it, such election or assignment, may only be made upon compliance with the provisions of (b) and (c) below, which conditions Landlord and Tenant acknowledge to be commercially reasonable. In the event the trustee elects to reject this Lease then Landlord shall immediately be entitled to possession of the Premises without further obligation to Tenant or the trustee.

(b) Any election to assume this Lease under Chapter 11 or 13 of the Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee (the "Electing Party") must provide for:

The Electing Party to cure or provide to Landlord adequate assurance that it will cure all monetary defaults under this Lease within fifteen (15) days from the date of assumption and it will cure all nonmonetary defaults under this Lease within thirty (30) days from the date of assumption. Landlord and Tenant acknowledge such condition to be commercially reasonable.

(c) If the Electing Party has assumed this Lease or elects to assign Tenant's interest under this Lease to any other person, such interest may be assigned only if the intended assignee has provided adequate assurance of future performance (as herein defined), of all of the obligations imposed on Tenant under this Lease.

For the purposes hereof, "adequate assurance of future performance" means that Landlord has ascertained that each of the following conditions has been satisfied:

(i) The assignee has submitted a current financial statement, certified by its chief financial officer, which shows a net worth and working capital in amounts sufficient to assure the future performance by the assignee of Tenant's obligations under this Lease; and

(ii) Landlord has obtained consents or waivers from any third parties which may be required under a lease, mortgage, financing arrangement, or other agreement by which Landlord is bound, to enable Landlord to permit such assignment.

(d) Landlord's acceptance of rent or any other payment from any trustee, receiver, assignee, person, or other entity will not be deemed to have waived, or waive, the requirement of Landlord's consent, Landlord's right to terminate this Lease for any transfer of Tenant's interest under this Lease without such consent, or Landlord's claim for any amount of Rent due from Tenant.

11.05 LANDLORD'S DEFAULT

Landlord shall be in default hereunder in the event Landlord has not begun and pursued with reasonable diligence the cure of any failure of Landlord to meet its obligations hereunder within thirty (30) days after the receipt by Landlord of written notice from Tenant of the alleged failure to perform. In no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord's default as to any covenant or agreement contained in this Lease. Tenant hereby waives such remedies of termination and rescission and hereby agrees that Tenant's remedies for default hereunder and for breach of any promise or inducement shall be limited to a suit for damages and/or injunction. In addition, Tenant hereby covenants that, prior to the exercise of any such remedies, it will give Mortgagee notice and a reasonable time to cure any default by Landlord. Notwithstanding any provision of this Section 11.05 to the contrary, Tenant shall have the option to terminate this Lease under the conditions and terms provided in Section 2.03(b) above.

ARTICLE TWELVE

SURRENDER OF PREMISES

12.01 IN GENERAL

Upon the Termination Date, Tenant shall surrender and vacate the Premises immediately and deliver possession thereof to Landlord in a clean, good and tenantable condition, except for ordinary wear and tear, and damage caused by Landlord or by fire or other casualty (but such exception with respect to fire or other casualty shall not alter or derogate from Tenant's (a) obligations to remove any property of Tenant or improvements, whether damaged or not, (b) insurance obligations under Article Sixteen with respect to Tenant Additions or (c) obligations with respect to Tenant's Share of Operating Expenses). Tenant shall deliver to Landlord all keys to the Premises. Tenant shall remove from the Premises all movable personal property of Tenant and Tenant's trade fixtures, including equipment and office furniture. Tenant shall be entitled to remove such Tenant Additions which at the time of their installation Landlord and Tenant agreed may be removed by Tenant. Tenant shall also remove such other Tenant Additions and restore the Premises as follows: (a) any Tenant Work, Tenant Alterations, trade fixtures or equipment containing Hazardous Materials; (b) Tenant's racking (but Tenant will not be required to remove bolts relating to the racking system so long as they are ground flush with the floor surface and any voids patched), Tenant's freezers and coolers, Tenant's swamp coolers and connections thereto, and any other installation which Tenant is required to remove pursuant to any other provision of the Lease (by way of example and not limitation, including the Standby Generator Installations as provided in Section 6.07 and the Propane Tank as provided in Section 6.08); (c) Landlord hereby reserves the right upon expiration or any earlier termination to require Tenant to remove the portion of the mezzanine which is not over the office area (as installed as part as part of the Landlord Work for Tenant's initial occupancy); and (d) any other Tenant Addition if at the time of Landlord's approval of such Tenant Addition, Landlord notifies Tenant that Landlord reserves the right to elect upon expiration or any earlier termination to require Tenant to remove it. Except as

otherwise provided in the following sentences of this Section, Landlord shall not require Tenant to replace the existing slab which Tenant proposes to remove under the area in which Tenant seeks to install freezers and coolers, and will not require Tenant to remove the new slab and sub-slab support, insulation and plumbing under the freezers and coolers, which are to be installed by Tenant, so long as all such removal and installations are in accordance with plans and specifications approved by Landlord and Tenant as described in the Workletter. Notwithstanding Landlord's approval of the initial plans and specifications for the design and initial installation of any Tenant Work or Tenant Alterations, including the above-described flooring and sub-floor areas under the freezers and coolers, Tenant shall remain responsible to repair or replace any of such Tenant Work or Tenant Alterations (excluding any Tenant is required or permitted to remove) which on the Termination Date are defective or not in as good condition as, and matching with, other original components of the Building, ordinary wear and tear excepted. For such purposes, by way of example and not limitation, it is agreed that if upon the Termination Date, the new flooring under the freezers and coolers does not properly join to and match the original floor (in undamaged condition) with respect to flatness, fitness, hardness and floor-loading capacity, Tenant, at Tenant's expense, shall be obligated to repair or replace it, as appropriate. Tenant immediately shall repair all damage resulting from removal of any of Tenant's property, furnishings or Tenant Additions, shall close all floor, ceiling and roof openings and shall restore the Premises to a tenantable condition or to the condition of the Premises prior to commencement of the Landlord Work or Tenant Work. In the event possession of the Premises is not delivered to Landlord when required hereunder, or if Tenant shall fail to remove those items described above, Landlord may (but shall not be obligated to), at Tenant's expense, remove any of such property and store, sell or otherwise deal with such property as provided in Section 11.02(b), including the waiver and indemnity obligations provided in that Section, and undertake, at Tenant's expense, such restoration work as Landlord reasonably deems necessary or advisable.

12.02 LANDLORD'S RIGHTS

All property which may be removed from the Premises by Landlord shall be conclusively presumed to have been abandoned by Tenant and Landlord may deal with such property as provided in Section 11.02(b), including the waiver and indemnity obligations provided in that Section. Tenant shall also reimburse Landlord for all costs and expenses incurred by Landlord in removing any Tenant Additions and in restoring the Premises to the condition required by this Lease at the Termination Date.

ARTICLE THIRTEEN

HOLDING OVER

Tenant shall pay Landlord one hundred twenty-five percent (125%) of the monthly Rent payable for the month immediately preceding the holding over (including increases for Rent Adjustments which Landlord may reasonably estimate) for each month or portion thereof that Tenant retains possession of the Premises, or any portion thereof, after the Termination Date (without reduction for any partial month that Tenant retains possession). Tenant shall also pay all damages sustained by Landlord by reason of such retention of possession. The provisions of this Article shall not constitute a waiver by Landlord of any re-entry rights of Landlord and Tenant's continued occupancy of the Premises shall be as a tenancy in sufferance.

ARTICLE FOURTEEN

DAMAGE BY FIRE OR OTHER CASUALTY

14.01 SUBSTANTIAL UNTENANTABILITY

(a) If any fire or other casualty (whether insured or uninsured) renders all or any part of the Premises or the Building untenantable, Landlord shall, with reasonable promptness after the occurrence of such damage, reasonably estimate the length of time that will be required to substantially complete the repair and restoration and shall by notice advise Tenant of such estimate ("Landlord's Notice"). If the amount of time required to substantially complete such repair and restoration, as reasonably estimated by Landlord, exceeds one hundred fifty (150) days from the date such damage occurred, then Landlord, or Tenant if all or a substantial portion of the Premises is rendered untenantable, shall have the right to terminate this Lease as of the date of such damage upon giving written notice to the other at any time within twenty (20) days after delivery of Landlord's Notice, provided that if Landlord so chooses, Landlord's Notice may also constitute such notice of termination.

(b) In the event that the Building is damaged or destroyed to the extent of more than twenty-five percent (25%) of its replacement cost or to any extent if no insurance proceeds or insufficient insurance proceeds are receivable by Landlord, and regardless of whether or not the Premises be damaged, Landlord may elect by written notice to Tenant given within thirty (30) days after the occurrence of the casualty to terminate this Lease in lieu of so restoring the Premises, in which event this Lease shall terminate as of the date specified in Landlord's notice, which date shall be no later than sixty (60) days following the date of Landlord's notice.

(c) Unless this Lease is terminated as provided in the preceding Subsections 14.01 (a) and (b), Landlord shall proceed with reasonable promptness to repair and restore the Premises to its condition as existed prior to such casualty, subject to reasonable delays for insurance adjustments and Force Majeure delays, and also subject to zoning Laws and building codes then in effect. Landlord shall have no liability to Tenant, and Tenant shall not be entitled to terminate this Lease if such repairs and restoration are not in fact completed within the time period estimated by Landlord so long as Landlord shall proceed with reasonable diligence to complete such repairs and restoration.

(d) Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance coverage, whether carried by Landlord or Tenant, for damages to the Premises, except for those proceeds of Tenant's insurance of its own personal property and equipment which would be removable by Tenant at the Termination Date. All such insurance proceeds shall be payable to Landlord whether or not the Premises are to be repaired and restored, provided, however, if this Lease is not terminated and the parties proceed to repair and restore Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of Tenant's insurance covering Tenant Additions, such proceeds shall be applied to reimburse Tenant for its cost of repairing and restoring Tenant Additions.

(e) Notwithstanding anything in this Article Fourteen to the contrary: (i) Landlord shall have no duty pursuant to this Section to repair or restore any portion of any Tenant Additions or to expend for any repair or restoration of the Premises or Building amounts in excess of insurance proceeds paid to Landlord and available for repair or restoration; and (ii) Tenant shall not have the right to terminate this Lease pursuant to this Section if any damage or destruction was caused by the willful and wrongful act of Tenant, its agents or employees. Whether or not the Lease is terminated pursuant to this Article Fourteen, in no event shall Tenant be entitled to any compensation or damages for loss of the use of the whole or any part of the Premises or for any inconvenience or annoyance occasioned by any such damage, destruction, rebuilding or restoration of the Premises or the Building or access thereto.

(f) Any repair or restoration of the Premises performed by Tenant shall be in accordance with the provisions of Article Nine hereof.

14.02 INSUBSTANTIAL UNTENANTABILITY

Unless this Lease is terminated as provided in the preceding Subsections 14.01 (a) and (b), then Landlord shall proceed to repair and restore the Building or the Premises other than Tenant Additions, with reasonable promptness, unless such damage is to the Premises and occurs during the last six (6) months of the Term, in which event either Tenant or Landlord shall have the right to terminate this Lease as of the date of such casualty by giving written notice thereof to the other within twenty (20) days after the date of such casualty. Notwithstanding the foregoing, Landlord's obligation to repair shall be limited in accordance with the provisions of Section 14.01 above.

14.03 RENT ABATEMENT

If all or any part of the Premises are rendered untenantable by fire or other casualty and this Lease is not terminated, Monthly Base Rent and Rent Adjustments shall abate for that part of the Premises which is untenantable on a per diem basis from the date of the casualty until Landlord has Substantially Completed the repair and restoration work in the Premises which it is required to perform, provided, that as a result of such casualty, Tenant does not occupy the portion of the Premises which is untenantable during such period.

14.04 WAIVER OF STATUTORY REMEDIES

The provisions of this Lease, including this Article Fourteen, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, the Premises or the Property or any part of either, and any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California Civil Code, with respect to any rights or obligations concerning damage or destruction shall have no application to this Lease or to any damage to or destruction of all or any part of the Premises or the Property or any part of either, and are hereby waived.

ARTICLE FIFTEEN

EMINENT DOMAIN

15.01 TAKING OF WHOLE OR SUBSTANTIAL PART

In either event that: (a) the whole or any substantial part of the Building or of the Premises is taken or condemned by any competent authority for any public use or purpose (including a deed given in lieu of condemnation) and is thereby rendered untenantable, or (b) such taking or condemnation is of a substantial part of the Truck Court or Tenant's Parking Area, or of access thereto and to the Premises, and materially and adversely interferes with such access and the conduct of Tenant's business, and reasonable alternative area and access are not made available to Tenant which would avoid such material and adverse interference, then this Lease shall terminate as of the date title vests in such authority or any earlier date on which possession is required to be surrendered to such authority, and Monthly Base Rent and Rent Adjustments shall be apportioned as of the Termination Date. Further, if at least twenty-five percent (25%) of the rentable area of the Project is taken or condemned by any competent authority for any public use or purpose (including a deed given in lieu of condemnation), and regardless of whether or not the Premises be so taken or condemned, Landlord may elect by written notice to Tenant to terminate this Lease as of the date title vests in such authority or any earlier date on which possession is required to be surrendered to such authority, and Monthly Base Rent and Rent Adjustments shall be apportioned as of the Termination Date. Landlord may, without any obligation to Tenant, agree to sell or convey to the taking authority the Premises, the Building, the Project or any portion thereof sought by the taking authority, free from this Lease and the right of Tenant hereunder, without first requiring that any action or proceeding be instituted or, if instituted, pursued to a judgment. Notwithstanding anything to the contrary herein set forth, in the event the taking of the Building or Premises is temporary (for less than the remaining term of the Lease), Landlord may elect either (i) to terminate this Lease or (ii) permit Tenant to receive the entire award attributable to the Premises in which case Tenant shall continue to pay Rent and this Lease shall not terminate.

15.02 TAKING OF PART

In the event a part of the Building or the Premises is taken or condemned by any competent authority (or a deed is delivered in lieu of condemnation) and this Lease is not terminated, the Lease shall be amended to reduce or increase, as the case may be, the Monthly Base Rent and Tenant's Share to reflect the Rentable Area of the Premises or Building, as the case may be, remaining after any such taking or condemnation. Landlord, upon receipt and to the extent of the award in condemnation (or proceeds of sale) shall make necessary repairs and restorations to the Premises (exclusive of Tenant Additions) and to the Building to the extent necessary to constitute the portion of the Building not so taken or condemned as a complete architectural and economically efficient unit. Notwithstanding the foregoing, if as a result of any taking, or a governmental order that the grade of any street or alley adjacent to the Building is to be changed and such taking or change of grade makes it necessary or desirable to substantially remodel or restore the Building or prevents the economical operation of the Building, Landlord shall have the right to terminate this Lease upon ninety (90) days prior written notice to Tenant.

15.03 COMPENSATION

Landlord shall be entitled to receive the entire award (or sale proceeds) from any such taking, condemnation or sale without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant's interest, if any, in such award; provided, however, Tenant shall have the right separately to pursue against the condemning authority a separate award in respect of the loss, if any, to Tenant Additions paid for by Tenant without any credit or allowance from Landlord, for fixtures or personal property of Tenant, or for relocation or business interruption expenses, so long as there is no diminution of Landlord's award as a result.

ARTICLE SIXTEEN

INSURANCE

16.01 TENANT'S INSURANCE

Tenant, at Tenant's expense, agrees to maintain in force, with a company or companies acceptable to Landlord, during the Term: (a) Commercial General Liability Insurance on a primary basis and without any right of contribution from any insurance carried by Landlord covering the Premises on an occurrence basis against all claims for personal injury, bodily injury, death and property damage, including contractual liability covering the indemnification provisions in this Lease. Such insurance shall be for such limits that are reasonably required by Landlord from time to time but not less than a combined single limit of Five Million and No/100 Dollars ($5,000,000.00); (b) Workers' Compensation and Employers' Liability Insurance to the extent required by and in accordance with the Laws of the State of California; (c) "All Risks" property insurance in an amount adequate to cover the full replacement cost of all Tenant Additions to the Premises, equipment, installations, fixtures and contents of the Premises in the event of loss; (d) In the event a motor vehicle is to be used by Tenant in connection with its business operation from the Premises, Comprehensive Automobile Liability Insurance coverage with limits of not less than Three Million and No/100 Dollars ($3,000,000.00) combined single limit coverage against bodily injury liability and property damage liability arising out of the use by or on behalf of Tenant, its agents and employees in connection with this Lease, of any owned, non-owned or hired motor vehicles; and (e) such other insurance or coverages as Landlord reasonably requires.

16.02 FORM OF POLICIES

Each policy referred to in 16.01 shall satisfy the following requirements. Each policy shall (i) name Landlord and the Indemnitees as additional insureds (except Workers' Compensation and Employers' Liability Insurance), (ii) be issued by one or more responsible insurance companies licensed to do business in the State of California reasonably satisfactory to Landlord, (iii) where applicable, provide for deductible amounts satisfactory to Landlord and not permit co-insurance, (iv) shall provide that such insurance may not be canceled or amended without thirty (30) days' prior written notice to Landlord, and (v) each policy of "All-Risks" property insurance shall provide that the policy shall not be invalidated should the insured waive in writing prior to a loss, any or all rights of recovery against any other party for losses covered by such policies. Tenant shall deliver to Landlord, certificates of insurance and at Landlord's request, copies of all policies and renewals thereof to be maintained by Tenant hereunder, not less than ten (10) days prior to the Commencement Date and not less than ten (10) days prior to the expiration date of each policy.

16.03 LANDLORD'S INSURANCE

Landlord agrees to purchase and keep in full force and effect during the Term hereof, including any extensions or renewals thereof, insurance under policies issued by insurers of recognized responsibility, qualified to do business in the State of California on the Building in amounts not less than the greater of eighty (80%) percent of the then full replacement cost (without depreciation) of the Building (above foundations and excluding Tenant Additions to the Premises) or an amount sufficient to prevent Landlord from becoming a co-insurer under the terms of the applicable policies, against fire and such other risks as may be included in standard forms of all risk coverage insurance reasonably available from time to time. Landlord agrees to maintain in force during the Term, Commercial General Liability Insurance covering the Building on an occurrence basis against all claims for personal injury, bodily injury, death and property damage. Such insurance shall be for a combined single limit of Five Million and No/100 Dollars ($5,000,000.00). Neither Landlord's obligation to carry such insurance nor the carrying of such insurance shall be deemed to be an indemnity by Landlord with respect to any claim, liability, loss, cost or expense due,

in whole or in part, to Tenant's negligent acts or omissions or willful misconduct. Without obligation to do so, Landlord may, in its sole discretion from time to time, carry insurance in amounts greater and/or for coverage additional to the coverage and amounts set forth above.

16.04 WAIVER OF SUBROGATION

(a) Landlord agrees that, if obtainable at no, or minimal, additional cost, and so long as the same is permitted under the laws of the State of California, it will include in its "All Risks" policies appropriate clauses pursuant to which the insurance companies (i) waive all right of subrogation against Tenant with respect to losses payable under such policies and/or (ii) agree that such policies shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for losses covered by such policies.

(b) Tenant agrees to include, if obtainable at no, or minimal, additional cost, and so long as the same is permitted under the laws of the State of California, in its "All Risks" insurance policy or policies on Tenant Additions to the Premises, whether or not removable, and on Tenant's furniture, furnishings, fixtures and other property removable by Tenant under the provisions of this Lease appropriate clauses pursuant to which the insurance company or companies (i) waive the right of subrogation against Landlord and/or any tenant of space in the Building with respect to losses payable under such policy or policies and/or (ii) agree that such policy or policies shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for losses covered by such policy or policies. If Tenant is unable to obtain in such policy or policies either of the clauses described in the preceding sentence, Tenant shall, if legally possible and without necessitating a change in insurance carriers, have Landlord named in such policy or policies as an additional insured. If Landlord shall be named as an additional insured in accordance with the foregoing, Landlord agrees to endorse promptly to the order of Tenant, without recourse, any check, draft, or order for the payment of money representing the proceeds of any such policy or representing any other payment growing out of or connected with said policies, and Landlord does hereby irrevocably waive any and all rights in and to such proceeds and payments.

(c) Provided that Landlord's right of full recovery under its policy or policies aforesaid is not adversely affected or prejudiced thereby, Landlord hereby waives any and all right of recovery which it might otherwise have against Tenant, its servants, agents and employees, for loss or damage occurring to the Real Property and the fixtures, appurtenances and equipment therein, except Tenant Additions, to the extent the same is covered by Landlord's insurance, notwithstanding that such loss or damage may result from the negligence or fault of Tenant, its servants, agents or employees. Provided that Tenant's right of full recovery under its aforesaid policy or policies is not adversely affected or prejudiced thereby, Tenant hereby waives any and all right of recovery which it might otherwise have against Landlord, its servants, and employees and against every other tenant in the Building who shall have executed a similar waiver as set forth in this Section 16.04 (c) for loss or damage to Tenant Additions, whether or not removable, and to Tenant's furniture, furnishings, fixtures and other property removable by Tenant under the provisions hereof to the extent the same is covered or coverable by Tenant's insurance required under this Lease, notwithstanding that such loss or damage may result from the negligence or fault of Landlord, its servants, agents or employees, or such other tenant and the servants, agents or employees thereof.

(d) Landlord and Tenant hereby agree to advise the other promptly if the clauses to be included in their respective insurance policies pursuant to subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore provided and thereafter to furnish the other with a certificate of insurance or copy of such policies showing the naming of the other as an additional insured, as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly of any cancellation or change of the terms of any such policy which would affect such clauses or naming. All such policies which name both Landlord and Tenant as additional insureds shall, to the extent obtainable, contain agreements by the insurers to the effect that no act or omission of any additional insured will invalidate the policy as to the other additional insureds.

16.05 NOTICE OF CASUALTY

Tenant shall give Landlord notice in case of a fire or accident in the Premises promptly after Tenant is aware of such event.

ARTICLE SEVENTEEN

WAIVER OF CLAIMS AND INDEMNITY

17.01 WAIVER OF CLAIMS

To the extent permitted by Law, Tenant releases the Indemnitees from, and waives all claims for, damage to person or property sustained by Tenant or any occupant of the Premises or the Property resulting directly or indirectly from any existing or future condition, defect, matter or thing in and about the Premises or the Property or any part of either or any equipment or appurtenance therein, or resulting from any accident in or about the Premises or the Property, or resulting directly or indirectly from any act or neglect of any tenant or occupant of the Property or of any other person, including Landlord's agents and servants, except to the extent caused by the gross negligence or by the willful and wrongful act of any of the Indemnitees, but the foregoing exception is subject to and shall not diminish any other waivers by Tenant or Landlord or their respective insurers, including those in effect in accordance with Section 16.04. If any such damage, whether to the Premises or the Property or any part of either, or whether to Landlord or to other tenants in the Property, results from any act or neglect of Tenant, its employees, servants, agents, contractors, invitees or customers, Tenant shall be liable therefor in excess of amounts, if any, paid to Landlord under insurance

covering such damages. Tenant shall not be liable for any such damage caused by its acts or neglect if Landlord or a tenant has recovered the full amount of the damage from proceeds of insurance policies and the insurance company has waived its right of subrogation against Tenant.

17.02 INDEMNITY BY TENANT

To the extent permitted by Law, Tenant hereby indemnifies, and agrees to protect, defend and hold the Indemnitees harmless, against any and all actions, claims, demands, liability, costs and expenses, including reasonable attorneys' fees and expenses for the defense thereof, arising from Tenant's occupancy of the Premises, from the undertaking of any Tenant Additions or repairs to the Premises, from the conduct of Tenant's business on the Premises, or from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be performed pursuant to the terms of this Lease, or from any willful act or negligence of Tenant, its agents, contractors, servants, employees, customers or invitees, in or about the Premises or the Property or any part of either. In case of any action or proceeding brought against the Indemnitees by reason of any such claim, upon notice from Landlord, Tenant covenants to defend such action or proceeding by counsel chosen by Landlord, and reasonably approved by Tenant. In any event, Landlord shall have the right to select as counsel a law firm of quality and capability consistent with first quality "large law firms" in the downtown Los Angeles area. Landlord reserves the right to settle, compromise or dispose of any and all actions, claims and demands related to the foregoing indemnity after reasonable notice to Tenant. The foregoing indemnity shall not operate to relieve any of the Indemnitees of liability to the extent its share of liability is caused by its gross negligence or by its willful and wrongful act. Further, the foregoing indemnity and exception are subject to and shall not diminish any waivers by Tenant or Landlord or their respective insurers, including those in effect in accordance with Section 16.04.

17.03 WAIVER OF CONSEQUENTIAL DAMAGES

To the extent permitted by law, Tenant hereby waives and releases the Indemnitees from any consequential damages, compensation or claims for inconvenience or loss of business, rents or profits as a result of any injury or damage, whether or not caused by the willful and wrongful act of any of the Indemnitees.

ARTICLE EIGHTEEN

RULES AND REGULATIONS

18.01 RULES

Tenant agrees for itself and for its subtenants, employees, agents, and invitees to comply with all reasonable rules and regulations of general application with respect to use of the Premises, the Building and the Project imposed by Landlord, as the same may be revised from time to time, including all of the requirements of Landlord's emergency response plan, as the same may be amended from time to time. Such rules and regulations are and shall be imposed for the cleanliness, good appearance, proper maintenance, good order and reasonable use of the Premises, the Building and the Project and as may be necessary for the enjoyment of the Building and the Project by all tenants and their clients, customers, and employees.

18.02 ENFORCEMENT

Nothing in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the rules and regulations as set forth above or as hereafter adopted, or the terms, covenants or conditions of any other lease as against any other tenant, and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors or licensees. Landlord shall use reasonable efforts to enforce the rules and regulations of the Building in a uniform and non-discriminatory manner.

ARTICLE NINETEEN

LANDLORD'S RESERVED RIGHTS

Landlord shall have the following rights exercisable without notice to Tenant and without liability to Tenant for damage or injury to persons, property or business and without being deemed an eviction or disturbance of Tenant's use or possession of the Premises or giving rise to any claim for offset or abatement of Rent: (a) to change the Building's name or street address upon thirty (30) days' prior written notice to Tenant; (b) to install, affix and maintain all signs on the exterior and/or interior of the Building; (c) upon reasonable notice to Tenant, to display the Premises to prospective purchasers at reasonable hours at any time during the Term and to prospective tenants at reasonable hours during the last twelve (12) months of the Term; (e) to grant to any party the exclusive right to conduct any business or render any service in or to the Building, provided such exclusive right shall not operate to prohibit Tenant from using the Premises for the purpose permitted hereunder; (f) to change the arrangement and/or location of entrances or passageways, doors and doorways, corridors, elevators, stairs, washrooms or public portions of the Building, and to close entrances, doors, corridors, elevators or other facilities, provided that such action shall not materially and adversely interfere with Tenant's access to the Premises, the Building, the Truck Court or Tenant's parking, or materially and adversely interfere with Tenant's occupancy of the Premises or the conduct of Tenant's business therein; (g) to have access for Landlord and other tenants of the Building to any mail chutes and boxes located in or on the Premises as required by any applicable rules of the United States Post Office; and (h) to close the Building after Standard Operating Hours, except that Tenant and its employees and invitees shall be entitled to admission at all times, under such regulations as Landlord prescribes for security purposes.

ARTICLE TWENTY

ESTOPPEL CERTIFICATE

20.01 IN GENERAL

Within fifteen (15) days after request therefor by Landlord, Mortgagee or any prospective mortgagee or owner, Tenant agrees as directed in such request to execute an Estoppel Certificate in recordable form, binding upon Tenant, certifying (a) that this Lease is unmodified and in full force and effect (or if there have been modifications, a description of such modifications and that this Lease as modified is in full force and effect); (b) the dates to which Rent has been paid; (c) that Tenant is in the possession of the Premises if that is the case; (d) that, to the extent known to Tenant, Landlord is not in default under this Lease, or, if Tenant believes Landlord is in default, the nature thereof in detail; (e) that, to the extent known to Tenant, Tenant has no offsets or defenses to the performance of its obligations under this Lease (or if Tenant believes there are any offsets or defenses, a full and complete explanation thereof); (f) that the Premises have been completed in accordance with the terms and provisions hereof, that Tenant has accepted the Premises and the condition thereof and of all improvements thereto and has no claims against Landlord or any other party with respect thereto; (g) that if an assignment of rents or leases has been served upon Tenant by a Mortgagee, Tenant will acknowledge receipt thereof and agree to be bound by the provisions thereof; (h) that Tenant will give to the Mortgagee copies of all default notices given by Tenant to Landlord; and (i) to any other information reasonably requested.

20.02 ENFORCEMENT

In the event that Tenant fails to deliver an Estoppel Certificate within the 15 days specified above, then if Tenant fails to deliver an Estoppel Certificate within five days after notice of such initial failure (or a second request for an Estoppel Certificate), Tenant appoints Landlord as its attorney-in-fact to execute and deliver the certificate on its behalf, which power of attorney shall be coupled with an interest and shall be irrevocable.

ARTICLE TWENTY-ONE

INTENTIONALLY OMITTED

ARTICLE TWENTY-TWO

REAL ESTATE BROKERS

Tenant represents that, except for the brokers listed in Section 1.01(17), Tenant has not dealt with any real estate broker, sales person, or finder in connection with this Lease, and no such person initiated or participated in the negotiation of this Lease, or showed the Premises to Tenant. Landlord agrees to pay any commission to which Landlord's Broker listed in Section 1.01(17) is entitled in connection with this Lease pursuant to Landlord's written agreement with such broker. Landlord and Tenant agree that Tenant's Brokers shall share the commission paid to Landlord's Broker pursuant to a separate, written agreement between Landlord's Broker and Tenant's Brokers. If and to the extent that either or both of Tenant's Brokers claim any amounts in excess of their share pursuant to their separate written agreement with Landlord's Broker (or if Tenant's Brokers do not enter into such agreement), such amounts shall be paid by Tenant. Tenant hereby agrees to indemnify, protect, defend and hold Landlord and Landlord's Broker harmless from and against any and all liabilities and claims for commissions, fees or any compensation by (a) Tenant's Brokers except for their share pursuant to their separate written agreement with Landlord's Broker of the commission payable to Landlord's Broker by Landlord or (b) by any other person claiming to represent Tenant or to be working for Tenant's benefit.

ARTICLE TWENTY-THREE

MORTGAGEE PROTECTION

23.01 SUBORDINATION AND ATTORNMENT

(a) Subject to Section 23.01(b) hereof, this Lease is and shall be expressly subject and subordinate at all times to (a) any ground or underlying lease of the Real Property, now or hereafter existing, and all amendments, extensions, renewals and modifications to any such lease, and (b) the lien of any mortgage or trust deed now or hereafter encumbering fee title to the Real Property and/or the leasehold estate under any such lease, and all amendments, extensions, renewals, replacements and modifications of such mortgage or trust deed and/or the obligation secured thereby, unless such ground lease or ground lessor, or mortgage, trust deed or Mortgagee, expressly provides or elects that the Lease shall be superior to such lease or mortgage or trust deed. If any such mortgage or trust deed is foreclosed (including any sale of the Real Property pursuant to a power of sale), or if any such lease is terminated, upon request of the Mortgagee or ground lessor, as the case may be, Tenant shall attorn to the purchaser at the foreclosure sale or to the ground lessor under such lease, as the case may be, provided, however, that such purchaser or ground lessor shall not be (i) bound by any payment of Rent for more than one month in advance except payments in the nature of security for the performance by Tenant of its obligations under this Lease; (ii) subject to any offset, defense or damages arising out of a default of any obligations of any preceding Landlord; or (iii) bound by any amendment or modification of this Lease reducing Rent or increasing Landlord's obligations made without the written consent of the Mortgagee or ground lessor; or (iv) liable for any security deposits not actually received in cash by such purchaser or ground lessor. This subordination shall be self-operative and no further certificate or instrument of subordination need be required by any such Mortgagee or ground lessor. In confirmation of such subordination, however, Tenant shall execute promptly any reasonable certificate or instrument that Landlord, Mortgagee or ground lessor may request. Upon request by such successor in interest, Tenant shall execute and deliver reasonable instruments confirming the attornment provided for herein.

(b) Notwithstanding any provision of this Lease to the contrary, provided that: (i) Tenant executes and delivers a subordination, nondisturbance and attornment agreement substantially in the form of Exhibit F hereto ("Nondisturbance Agreement") and complies with the provisions thereof, and (ii) Tenant is not in default under this Lease, no termination of any ground lease or underlying lease and no foreclosure, sale pursuant to power of sale or conveyance by deed in lieu of foreclosure shall affect Tenant's rights under this Lease, except to the extent provided by such Nondisturbance Agreement. In the event that Landlord is unable to procure such Nondisturbance Agreement for Tenant's benefit when Tenant is entitled to such Nondisturbance Agreement, any such lessor or Mortgagee shall be deemed to have elected that this Lease be superior to the lease, mortgage or deed of trust in question, and Tenant shall, at the request of such lessor, mortgagee or beneficiary (or purchaser at any sale pursuant to the mortgage or deed of trust), attorn to any such party or enter into a new lease with such party (as Landlord) for the balance of the Term then remaining hereunder upon the same terms and conditions as those herein, provided, however, that such party shall not be (i) bound by any payment of Rent for more than one month in advance except payments in the nature of security for the performance by Tenant of its obligations under this Lease; (ii) subject to any offset, defense or damages arising out of a default of any obligations of any preceding Landlord; or (iii) bound by any amendment or modification of this Lease reducing Rent or increasing Landlord's obligations made without the written consent of the Mortgagee or ground lessor; or (iv) liable for any security deposits not actually received in cash by such purchaser or ground lessor. Upon request by such successor in interest, Tenant shall execute and deliver reasonable instruments confirming the attornment provided for herein.

23.02 MORTGAGEE PROTECTION

Tenant agrees to give any Mortgagee or ground lessor, by registered or certified mail, a copy of any notice of default served upon Landlord by Tenant, provided that prior to such notice Tenant has received notice (by way of service on Tenant of a copy of an assignment of rents and leases, or otherwise) of the address of such Mortgagee or ground lessor. Tenant further agrees that if Landlord shall have failed to cure such default within the time provided for in this Lease, then the Mortgagee or ground lessor shall have an additional thirty (30) days after receipt of notice thereof within which to cure such default or if such default cannot be cured within that time, then such additional notice time as may be necessary, if, within such thirty (30) days, any Mortgagee or ground lessor has commenced and is diligently pursuing the remedies necessary to cure such default (including commencement of foreclosure proceedings or other proceedings to acquire possession of the Real Property, if necessary to effect such cure). Such period of time shall be extended by any period within which such Mortgagee or ground lessor is prevented from commencing or pursuing such foreclosure proceedings or other proceedings to acquire possession of the Real Property by reason of Landlord's bankruptcy. Until the time allowed as aforesaid for Mortgagee or ground lessor to cure such defaults has expired without cure, Tenant shall have no right to, and shall not, terminate this Lease on account of default. This Lease may not be modified or amended so as to reduce the Rent or shorten the Term, or so as to adversely affect in any other respect to any material extent the rights of Landlord, nor shall this Lease be canceled or surrendered, without the prior written consent, in each instance, of the ground lessor or the Mortgagee.

ARTICLE TWENTY-FOUR

NOTICES

(a) All notices, demands or requests provided for or permitted to be given pursuant to this Lease must be in writing and shall be personally delivered, sent by Federal Express or other reputable overnight courier service, or mailed by first class, registered or certified United States mail, return receipt requested, postage prepaid.

(b) All notices, demands or requests to be sent pursuant to this Lease shall be deemed to have been properly given or served by delivering or sending the same in accordance with this Section, addressed to the parties hereto at their respective addresses listed in Sections 1.01(2) and (3).

(c) Notices, demands or requests sent by mail or overnight courier service as described above shall be effective upon deposit in the mail or with such courier service. However, the time period in which a response to any such notice, demand or request must be given shall commence to run from (i) in the case of delivery by mail, the date of receipt on the return receipt of the notice, demand or request by the addressee thereof, or (ii) in the case of delivery by Federal Express or other overnight courier service, the date of acceptance of delivery by an employee, officer, director or partner of Landlord or Tenant. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given, as indicated by advice from Federal Express or other overnight courier service or by mail return receipt, shall be deemed to be receipt of notice, demand or request sent. Notices may also be served by personal service upon any officer, director or partner of Landlord or Tenant, and shall be effective upon such service.

(d) By giving to the other party at least ten (10) days written notice thereof, either party shall have the right from time to time during the term of this Lease to change their respective addresses for notices, statements, demands and requests, provided such new address shall be within the United States of America.

ARTICLE TWENTY-FIVE

INTENTIONALLY OMITTED

ARTICLE TWENTY-SIX

MISCELLANEOUS

26.01 LATE CHARGES

(a) All payments required hereunder (other than the Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and any other payment for which a specific payment date or period is provided, which shall be due as hereinbefore provided, and the late charge described in Subsection (b) below, which shall be due when provided without notice or demand) to Landlord shall be paid within thirty (30) days after Landlord's demand therefor. All such amounts (including Monthly Base Rent, Rent Adjustments, and Rent Adjustment Deposits, but excluding the late charge) not paid within five (5) business days after the due date shall bear interest from the date due until the date paid at the Default Rate in effect on the date such payment was due, and such interest if not previously paid, shall be added to the succeeding monthly payment of Rent. Notwithstanding the foregoing, provided Tenant is not in bankruptcy, if within three (3) months after the late payment (or nonpayment) for which an interest charge is due, Landlord has not given Tenant notice of such late payment (or nonpayment) and the interest charge due with respect to it, then Tenant shall not be obligated to pay the interest charge corresponding to that particular late payment (or nonpayment).

(b) In the event Tenant is more than five (5) business days late in paying any installment of Rent due under this Lease, Tenant shall pay Landlord a late charge equal to five percent (5%) of the delinquent installment of Rent. The late charge if not previously paid shall be added to the succeeding monthly payment of Rent. Notwithstanding the foregoing, provided Tenant is not in bankruptcy, if within three (3) months after the late payment (or nonpayment) for which a late charge is due, Landlord has not given Tenant notice of such late payment (or nonpayment) and the late charge due with respect to it, then Tenant shall not be obligated to pay the late charge corresponding to that particular late payment (or nonpayment). The parties agree that (i) such delinquency will cause Landlord to incur costs and expenses not contemplated herein, the exact amount of which will be difficult to calculate, including the cost and expense that will be incurred by Landlord in processing each delinquent payment of Rent by Tenant, and (ii) the amount of such late charge represents a reasonable estimate of such costs and expenses and that such late charge shall be paid to Landlord for each delinquent payment in addition to all Rent otherwise due hereunder. The parties further agree that the payment of late charges and the payment of interest provided for in subparagraph (a) above are distinct and separate from one another in that the payment of interest is to compensate Landlord for its inability to use the money improperly withheld by Tenant, while the payment of late charges is to compensate Landlord for its additional administrative expenses in handling and processing delinquent payments.

(c) Payment of interest at the Default Rate and/or of late charges shall not excuse or cure any default by Tenant under this Lease, nor shall the foregoing provisions of this Article or any such payments prevent Landlord from exercising any right or remedy available to Landlord upon Tenant's failure to pay Rent when due, including the right to terminate this Lease.

26.02 NO JURY TRIAL; VENUE; JURISDICTION

Each party hereto (which includes any assignee, successor, heir or personal representative of a party) shall not seek a jury trial, hereby waives trial by jury, and hereby further waives any objection to venue in the County in which the Project is located, and agrees and consents to personal jurisdiction of the courts of the State of California, in any action or proceeding or counterclaim brought by any party hereto against the other on any matter 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, or any claim of injury or damage, or the enforcement of any remedy under any statute, emergency or otherwise, whether any of the foregoing is based on this Lease or on tort law. No party will seek to consolidate any such action in which a jury has been waived with any other action in which a jury trial cannot or has not been waived. It is the intention of the parties that these provisions shall be subject to no exceptions. By execution of this Lease the parties agree that this provision may be filed by any party hereto with the clerk or judge before whom any action is instituted, which filing shall constitute the written consent to a waiver of jury trial pursuant to and in accordance with Section 631 of the California Code of Civil Procedure. No party has in any way agreed with or represented to any other party that the provisions of this Section will not be fully enforced in all instances. The provisions of this Section shall survive the expiration or earlier termination of this Lease.

26.03 LANDLORD CONSENT TO ENCUMBRANCE OF TENANT'S PERSONAL PROPERTY

Within a reasonable time after written request from Tenant that Landlord consent to Tenant obtaining financing for, and granting a lender a security interest in, certain personal property of Tenant to be located at the Premises, then provided such security interest is in personal property which pursuant to the Lease Tenant is required or entitled to remove upon expiration or earlier termination of the Lease, Landlord will not unreasonably withhold consent to such security interest and subordination of Landlord's lien to the holder of such security interest, and the agreement providing such consent, subordination and such holder's access to the Premises and removal of personal property and related terms shall be in form and substance satisfactory to Landlord.

26.04 INTENTIONALLY OMITTED

26.05 TENANT AUTHORITY

Tenant represents and warrants to Landlord that it has full authority and power to enter into and perform its obligations under this Lease, that the person executing this Lease is fully empowered to do so, and that no consent or authorization is necessary from any third party. Landlord may request that Tenant provide Landlord evidence of Tenant's authority.

26.06 ENTIRE AGREEMENT

This Lease, the Exhibits and Rider(s) attached hereto contain the entire agreement between Landlord and Tenant concerning the Premises and there are no other agreements, either oral or written, and no other representations or statements, either oral or written, on which Tenant has relied. This Lease shall not be modified except by a writing executed by Landlord and Tenant.

26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

If any Mortgagee requires a modification of this Lease which shall not result in any increased cost or expense to Tenant or in any other substantial and adverse change in the rights and obligations of Tenant hereunder, then Tenant agrees that the Lease may be so modified.

26.08 EXCULPATION

Tenant agrees, on its behalf and on behalf of its successors and assigns, that any liability or obligation of Landlord in connection with this Lease shall only be enforced against Landlord's equity interest in the Property up to a maximum of Five Million Dollars ($5,000,000.00) and in no event against any other assets of Landlord, or Landlord's officers or directors or partners, and that any liability of Landlord with respect to this Lease shall be so limited and Tenant shall not be entitled to any judgment in excess of such amount.

26.09 ACCORD AND SATISFACTION

No payment by Tenant or receipt by Landlord of a lesser amount than any installment or payment of Rent due shall be deemed to be other than on account of the amount due, and no endorsement or statement on any check or any letter accompanying any check or payment of Rent shall 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 such installment or payment of Rent or pursue any other remedies available to Landlord. No receipt of money by Landlord from Tenant after the termination of this Lease or Tenant's right of possession of the Premises shall reinstate, continue or extend the Term. Receipt or acceptance of payment from anyone other than Tenant, including an assignee of Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept such payment on account of the amount due without prejudice to Landlord's right to pursue any remedies available to Landlord.

26.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING

In the event of any sale or other transfer of the Building, Landlord shall be entirely freed and relieved of all agreements and obligations of Landlord hereunder accruing or to be performed after the date of such sale or transfer, and any remaining liability of Landlord with respect to this Lease shall be limited to Five Million Dollars ($5,000,000.00) and Tenant shall not be entitled to any judgment in excess of such amount.

26.11 BINDING EFFECT

Subject to the provisions of Article Ten, this Lease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and permitted assigns.

26.12 CAPTIONS

The Article and Section captions in this Lease are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such Articles and Sections.

26.13 TIME; APPLICABLE LAW; CONSTRUCTION

Time is of the essence with respect to the performance of Tenant's and Landlord's obligations contained in this Lease. This Lease shall be construed in accordance with the Laws of the State of California. If more than one person signs this Lease as Tenant, the obligations hereunder imposed shall be joint and several. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each item, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by Law. Wherever the term "including" or "includes" is used in this Lease, it shall have the same meaning as if followed by the phrase "but not limited to". The language in all parts of this Lease shall be construed according to its normal and usual meaning and not strictly for or against either Landlord or Tenant. All references in this Lease to "clauses," "Sections" or "Articles refer to clauses, Sections or Articles of this Lease unless otherwise indicated.

26.14 ABANDONMENT

In the event Tenant vacates or abandons the Premises but is otherwise in compliance with all the terms, covenants and conditions of this Lease, Landlord shall (a) have the right to enter into the Premises in order to show the space to prospective tenants, (b) have the right to reduce the services provided to Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably determines to be adequate services for an unoccupied premises, and (c) during the last six (6) months of the Term, have the right to prepare the Premises for occupancy by another tenant upon the end of the Term. Tenant expressly acknowledges that in the absence of written notice pursuant to Section 11.02(b) or pursuant to California Civil Code Section 1951.3 terminating Tenant's right to possession, none of the foregoing acts of Landlord or any other act of Landlord shall constitute a termination of Tenant's right to possession or an acceptance of Tenant's surrender of the Premises, and the Lease shall continue in effect.

26.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

If Tenant fails timely to perform any of its duties under this Lease, Landlord shall have the right (but not the obligation), to perform such duty on behalf and at the expense of Tenant as follows: (a) as provided in Section 8.02 with respect to the duties of Tenant described therein, and (b) otherwise after prior notice to Tenant, except notice shall not be required in an emergency, and all sums expended or expenses incurred by Landlord in performing such duty shall be deemed to be additional Rent under this Lease and shall be due and payable upon demand by Landlord.

26.16 SECURITY SYSTEM

Landlord shall not be obligated to provide or maintain any security patrol or security system. Landlord shall not be responsible for the quality of any such patrol or system which may be provided hereunder or for damage or injury to Tenant, its employees, invitees or others due to the failure, action or inaction of such patrol or system.

26.17 NO LIGHT, AIR OR VIEW EASEMENTS

Any diminution or shutting off of light, air or view by any structure which may be erected on lands of or adjacent to the Project shall in no way affect this Lease or impose any liability on Landlord.

26.18 RECORDATION

Neither this Lease, nor any notice nor memorandum regarding the terms hereof, shall be recorded by Tenant. Any such unauthorized recording shall be a Default for which there shall be no cure or grace period. Tenant agrees to execute and acknowledge, at the request of Landlord, a memorandum of this Lease, in recordable form.

26.19 SURVIVAL

The waivers of the right of jury trial, the other waivers of claims or rights, the releases and the obligations of Tenant under this Lease to indemnify, protect, defend and hold harmless Landlord and/or Indemnitees shall survive the expiration or termination of this Lease, and so shall all other obligations or agreements which by their terms survive expiration or termination of the Lease.

26.20 RIDERS

All Riders attached hereto and executed both by Landlord and Tenant shall be deemed to be a part hereof and hereby incorporated herein.

IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in Section 1.01(4) hereof.

TENANT:		LANDLORD:

United Natural Foods, Inc.,		Metropolitan Life Insurance
a Delaware corporation		Company, a New York corporation


By		By

	Print name		Print name
Its		Its
	(Chairman of Board, President or
	Vice President)


By

	Print name
Its
	(Secretary, Assistant Secretary,
	CFO or Assistant Treasurer)

For good and valuable consideration, Mountain People's Warehouse Incorporated joins in the execution of this Lease to confirm that it is jointly and severally liable with Tenant under this Lease (including without limitation, all Riders and Exhibits attached hereto) pursuant to the terms of Section 10.01(e) of this Lease.

MOUNTAIN PEOPLE'S WAREHOUSE INCORPORATED,
a California corporation


By

	Print name
Its
	(Chairman of Board, President or Vice President)


By

	Print name
Its
	(Secretary, Assistant Secretary, CFO or
	Assistant Treasurer)

EXHIBIT A

Type:		Quantity:

Equipment degreaser, oils, fluids, sprays

Lubricating oils, fluids, sprays

Cleaning oils, fluids, sprays

Propane fuel in separate portable tanks to mount on fork-lifts

Propane fuel in a tank on the Truck Court as provided pursuant to Section 6.08		200 gallons

Welding materials

Paints

Lighter fluid

Cooking oils

Adhesives

Household cleaning fluids and sprays

dry ice

freon

Diesel fuel in a tank housed in a mobile van trailer to be parked on the Truck Court for the purpose of providing fuel for Tenant's standby generator to be housed in the same van trailer pursuant to Section 6.07		800 gallons



RECORDING REQUESTED
BY AND WHEN
RECORDED RETURN TO

	, Esq.

		Assumed size of New Space:							83,000 sf

I.	Assumed Total Development Costs					$	3,000,000		$36.14 psf

II.	Required Cash Flow Calculation

	Total development costs					$	3,000,000
	Required return rate			x			10.50	%
	Required Landlord Cash Flow Net of Reserves					$	315,000		per year

III.	NNN Rent Calculation including Reserves

	Required Landlord Cash Flow Net of Reserves					$	315,000
	Add replacement reserves $0.08 psf x 83,000 sf		=			$	6,640
						$	321,640


	Add general vacancy reserve @ 3.0%		321,640		sf
		(100% - 3%=) /		97.0	%
			$	331,588
		less	$	(321,640	)
		vacancy reserve	$	9,948		$	9,948

Summary
Required Landlord Cash Flow Net of Reserves						$	315,000
	Plus structural reserve					$	6,640
	Plus vacancy reserve					$	9,948
		NNN Rent required for
		Required Cash Flow				$	331,588

		Per square foot/mo,				$	0.3329

IV.	Proof of Calculation

	NNN Rent					$	331,588
	less structural reserve					$	(6,640	)
	less vacancy reserve					$	(9,948	)
	Required Landlord Cash Flow
	Net of Reserves					$	315,000

MOUNTAIN PEOPLE'S WAREHOUSE INCORPORATED, a California corporation


By	/s/ Kevin Michel
	Kevin Michel
	Print Name
Its	President
(Chairman of Board, President or Vice President)

By	/s/ Ginny Feth Michel
	Ginny Feth Michel
	Print Name
Its	Secretary
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)