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                                                                    EXHIBIT 10.1



                                      LEASE

                                     between

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

                                    (Lessor)

                                       and

                           UNITED MERCHANDISING CORP.,
                            a California corporation

                                    (Lessee)

Dated as of March 5, 1996

Demised Premises: 7351 McGuire Avenue, Fontana, CA



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

                                TABLE OF CONTENTS

                                                                        
ARTICLE 1.- PREMISES ....................................................   1
          1.1. Demised Premises .........................................   1
          1.2. Title and Condition of the Demised Premises ..............   1
          1.3. Quiet Enjoyment ..........................................   2

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

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

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

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

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

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

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

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


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2-12-96 (8)

                                                                       
         9.4.   Certificates of Insurance ..............................  16

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

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

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

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

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

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


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

                                       ii



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

                                     LEASE

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

                              ARTICLE 1. - PREMISES

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

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

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

                                ARTICLE 2.- TERM

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

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

                               ARTICLE 3. - RENTAL

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

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

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

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

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

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

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

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

                                       4



Big 5, Fontana, CA
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            index which most closely approximates the information and data
            contained in the C.P.I. as of the date of this Lease.

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

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

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

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

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

            3.5.3. any title defect or encumbrance:

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

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

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

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

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                                ARTICLE 4. - USE

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

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

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

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

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

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

                                       7



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

                        ARTICLE 5. - TAXES AND UTILITIES

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

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

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

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

                    ARTICLE 6. - MAINTENANCE AND ALTERATIONS

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

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

                                       9



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

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

                       ARTICLE 7. - DAMAGE OR DESTRUCTION

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

                                       10



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

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

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

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

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

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

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

                            ARTICLE 8. - CONDEMNATION

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

                                       12



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

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

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

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

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

      8.4.  CONDEMNATION DURING OPTION TERMS. Not Used.

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

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

                             ARTICLE 9. - INSURANCE

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

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

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

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

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

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

                                       15



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

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

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

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

                                       16



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

                          ARTICLE 10. - INDEMNIFICATION

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

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

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

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

            10.1.4. any contest permitted by Section 12.2.

                               ARTICLE 11. - LIENS

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

                                       17


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              ARTICLE 12. - ADVANCES BY LESSOR: PERMITTED CONTESTS

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

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

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

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

      13.1.1. if Lessee shall:

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

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

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

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

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

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

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

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

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

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

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

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

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

                      ARTICLE 14. ASSIGNMENT AND SUBLETTING

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

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

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

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

                     ARTICLE 15. - MISCELLANEOUS PROVISIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       27


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

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

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

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

                                           UNITED MERCHANDISING CORP.,
                                           a California corporation

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

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

                                                                          Lessee

                                       28


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                                    Exhibit A

                                Legal Description

PARCEL NO. A:

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

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

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

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

PARCEL NO. B:

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



                                 [PLAN DRAWING]

                                    EXHIBIT B



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

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

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

                                    EXHIBIT C

                           NON-DISTURBANCE, ATTORNMENT

                           AND SUBORDINATION AGREEMENT

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

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

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

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

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

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

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

                                      C-1-


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

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

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

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

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

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

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

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

                                      C-2-


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

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

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

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

      To Beneficiary:     _________________________________

                          _________________________________

                          _________________________________

                          _________________________________

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

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

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

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

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

                                      C-3-


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

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

                                           By___________________________________
                                           Title:

                                           By___________________________________
                                           Title:

                                                                     BENEFICIARY

                                           UNITED MERCHANDISING CORP., a
                                           California corporation

                                           By___________________________________
                                                                       President

                                           By___________________________________

                                                                       Secretary

                                                                          LESSEE

                                      C-4-


                                    Exhibit D

                         FORM OF LANDLORD'S CERTIFICATE

                               _____________,199__

[LANDLORD]
______________
______________

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

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

Gentlemen:

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

1.    The information set forth below is correct:

      a.    Commencement Date
            of the Lease:                                [Date]

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

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

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

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-1


[LANDLORD]

_______________,199___
2

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

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

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-2


[LANDLORD]

__________,199 ___
3

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

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

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

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-3


[LANDLORD]

______________,199__
4

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

            Notices to GE Capital should be sent to:

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

                                           Sincerely,

                                           UNITED MERCHANDISING CORP.

                                           Kathleen Reid-Seidner
                                           Vice President and Secretary

Acknowledged this ____day of__________, 199_

WITNESSES:                                 LANDLORD:

____________________                       ____________________

____________________                       By:________________

                                           Title:_____________

                                                                         1/26/96
                                                  FORM OF LANDLORD'S CERTIFICATE

                                       D-4

                                                                    EXHIBIT 10.2



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                      LEASE

         DATE:            April 14, 2004

         LANDLORD:        PANATTONI DEVELOPMENT COMPANY, LLC,
                          a California limited liability company

         TENANT:          BIG 5 CORP., a Delaware corporation

         LOCATION:        Sycamore Canyon Boulevard
         CITY OF:         Riverside
         COUNTY OF:       Riverside
         STATE OF:        California



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                TABLE OF CONTENTS



                                                                                                      Page
                                                                                                      ----
                                                                                                   
ARTICLE 1:   TERM................................................................................       2

ARTICLE 2:   RENTAL..............................................................................       9

ARTICLE 3:   POSSESSION AND TITLE................................................................      11

ARTICLE 4:   SIGNS AND COMMUNICATION EQUIPMENT...................................................      16

ARTICLE 5:   USE OF PREMISES; UTILITIES; COMPLIANCE WITH LAWS....................................      16

ARTICLE 6:   TAXES AND LIENS.....................................................................      19

ARTICLE 7:   REPAIRS.............................................................................      22

ARTICLE 8:   ALTERATIONS; SURRENDER OF PREMISES..................................................      25

ARTICLE 9:   DAMAGE OR DESTRUCTION...............................................................      27

ARTICLE 10:  INSURANCE AND INDEMNITY.............................................................      30

ARTICLE 11:  ASSIGNMENT AND SUBLETTING...........................................................      34

ARTICLE 12:  EMINENT DOMAIN......................................................................      35

ARTICLE 13:  ATTORNEYS' FEES.....................................................................      38

ARTICLE 14:  PERMITS AND LICENSES................................................................      38

ARTICLE 15:  EXTENSION OF TERM...................................................................      38

ARTICLE 16:  SUBORDINATION.......................................................................      39

ARTICLE 17:  TENANT'S DEFAULTS...................................................................      40

ARTICLE 18:  LANDLORD'S DEFAULTS.................................................................      42

ARTICLE 19:  NOTICES.............................................................................      43

ARTICLE 20:  MISCELLANEOUS PROVISIONS............................................................      44


                                      (i)


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA



                                                                          Page
                                                                          ----
                                                                       
EXHIBITS

EXHIBIT A:      DESCRIPTION OF LAND
EXHIBIT B-1:    SITE PLAN OF LAND
EXHIBIT B-2:    PROPOSED FINAL MAP
EXHIBIT C:      CONSTRUCTION
EXHIBIT D:      PERMITTED ENCUMBRANCES
EXHIBIT E:      NON-DISTURBANCE, ATTORNMENT AND SUBORDINATION
                AGREEMENT
EXHIBIT F:      LANDLORD'S WAIVER-INVENTORY
EXHIBIT G:      MEMORANDUM OF LEASE
EXHIBIT H:      COMMENCEMENT CERTIFICATE
EXHIBIT I:      DELIVERY CONDITION


                                      (ii)


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                      INDEX



                                                                              Page(s)
                                                                              -------
                                                                           
AAA........................................................................     36
Acquisition Date...........................................................      1
additional rent............................................................     11
Adjustment Date............................................................      9
Approved Title Exceptions..................................................     12
Base Index.................................................................     10
Brokers....................................................................     45
Building...................................................................      1
Building/Site Work.........................................................      2
Change of Ownership........................................................     20
Claims.....................................................................     33
Commencement Date..........................................................      2
Communication Equipment....................................................     16
Comparison Index...........................................................     10
Construction Escrow........................................................     28
Delivery Condition.........................................................      4
Delivery Date..............................................................      2
Delivery Deadline Date.....................................................      6
Earthquake Insurance Coverage..............................................     31
Encumbrances...............................................................     12
Excess Costs...............................................................     28
Experienced Contractor.....................................................     27
Expiration Date............................................................      2
First Period...............................................................      9
Fixed Rent.................................................................      9
Fixturization Period.......................................................      3
Fixturization Work.........................................................     10
Force Majeure Delays.......................................................      7
Grading Commencement.......................................................      5
Grading Commencement Outside Date..........................................      5
Hazardous Materials........................................................     15
Improvements...............................................................      1
Index......................................................................     10
Interest Rate..............................................................     22
JAMS.......................................................................     36
Land.......................................................................      1
Land Acquisition...........................................................      1
Landlord...................................................................      1
Landlord Delays............................................................      3
Landlord's Contractor......................................................      6
Landlord's Maintenance Obligations.........................................     22
Landlord's Representatives.................................................     33


                                     (iii)


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA



                                                                              Page(s)
                                                                              -------
                                                                           
Landlord's Termination Notice..............................................     28
Landlord's Work............................................................      1
Landlord's Work Costs......................................................      8
Larger Parcel..............................................................      1
Lease......................................................................      1
Leasehold Title Commitment.................................................     14
Leasehold Title Policy.....................................................     14
Maximum Earthquake Premium.................................................     31
Memorandum of Lease........................................................     44
Memorandum of Lease Amendment..............................................      2
No Dollar Limit............................................................     23
Official Records...........................................................      1
Option Period..............................................................     38
Option Periods.............................................................     38
Outside Operations Date....................................................      3
Partial Taking.............................................................     35
Permit Issuance............................................................      5
Permit Issuance Outside Date...............................................      5
Permitted Deed of Trust....................................................     12
Permitted Easements........................................................     12
Permitted Encumbrances.....................................................     12
Permitted Use..............................................................     16
Premises...................................................................      1
Pricing Request............................................................      5
Pricing Statement..........................................................      5
Proposed Final Map.........................................................      1
Punchlist Items............................................................      5
Ready for Occupancy........................................................      4
Ready for Occupancy Outside Date...........................................      7
Real Property Taxes........................................................     20
rent.......................................................................     11
Rentable Area..............................................................      8
rental.....................................................................     11
rentals....................................................................     11
rents......................................................................     11
Second Period..............................................................      9
Signs......................................................................     16
Site Plan..................................................................      1
SNDA.......................................................................     39
Subdivision................................................................      1
Subdivision Outside Date...................................................      1
Systems....................................................................     22
Tax Statements.............................................................     21
Tenant.....................................................................      1


                                      (iv)


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA



                                                                              Page(s)
                                                                              -------
                                                                           
Tenant Change Order........................................................      4
Tenant Delays..............................................................     12
Tenant Design Problem......................................................      4
Tenant Improvement Allowance...............................................      8
Tenant Improvements........................................................      1
Tenant Termination Amount..................................................      8
Tenant's Election Notice...................................................     32
Tenant's Eminent Domain TI Proceeds........................................     36
Tenant's Representatives...................................................     33
Tenant's Termination Insurance Proceeds....................................     32
Term.......................................................................      2
Terminable Event...........................................................      6
Threshold Amount...........................................................     28
TI Costs...................................................................      8
to Landlord's actual knowledge.............................................     15
Total Taking...............................................................     35
Uninsured Casualty.........................................................     28


                                      (v)


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

         THIS LEASE ("LEASE") is made and entered into as of the 14th day of
April, 2004, by and between PANATTONI DEVELOPMENT COMPANY, LLC, a California
limited liability company ("LANDLORD"), owner of the Premises (defined in the
following paragraph below), and BIG 5 CORP., a Delaware corporation ("TENANT").

                                    RECITALS

         A.       Land, Building and Premises. That for and in consideration of
the rental hereinafter reserved, and of the mutual covenants, agreements, and
conditions hereinafter contained, and upon all of the terms and provisions of
this Lease, Landlord does hereby lease to Tenant, and Tenant does hereby rent
from Landlord, for the Term as set forth in Article 1 below, the following
(collectively, the "PREMISES"): (i) that certain parcel of real property (the
"LAND") containing approximately 46.64 gross acres (approximately 44.81 net
acres after dedication of Crest Ridge Drive and the expansion parcel for
Sycamore Canyon Boulevard to the City of Riverside, as contemplated by the
Proposed Final Map, as defined below), situated on Sycamore Canyon Boulevard, in
the City of Riverside, County of Riverside, State of California, as more
particularly described in Exhibit A attached hereto and made a part hereof and
more particularly shown on the site plan attached hereto as Exhibit B-1 and made
a part hereof (the "SITE PLAN"); (ii) the warehouse/distribution building (the
"BUILDING") having dimensions of approximately 1,560 feet by 600 feet and
containing a total of approximately 953,132 square feet of Rentable Area (as
defined in Paragraph 1.6 below) to be constructed by Landlord on the Land
pursuant to the terms and provisions of this Lease, which Rentable Area shall be
subject to adjustment in accordance with Paragraph 1.6 below; (iii) the
"IMPROVEMENTS", which means, collectively, the Building and all other
structures, driveways, entrances and exits, parking areas, landscaping,
utilities, drainage facilities, lighting and curb cuts, and all other
improvements and fixtures (excluding Tenant's trade fixtures and personal
property) now or hereafter located on the Land; and (iv) all easements, rights
and appurtenances now or hereafter appurtenant thereto.

         B.       Acquisition and Subdivision of Land. Notwithstanding anything
to the contrary contained in this Lease, the parties acknowledge and agree that
Landlord does not currently own the Land, and the Land is part of a larger
approximately 96 acre parcel (the "LARGER PARCEL") as depicted on the Proposed
Final Map which is in the process of being purchased and subdivided by Landlord.
It is anticipated by the parties that on or before June 1, 2004 (the
"ACQUISITION OUTSIDE DATE"), Landlord will cause all of the following events
(herein referred to collectively as the "LAND ACQUISITION") to occur: (i)
acquisition by Landlord of fee simple title to the Larger Parcel (including the
Land) from the current owner thereof, as evidenced by the recordation of a grant
deed in favor of Landlord for the Larger Parcel (including the Land) in the
official records of the county in which the Premises are located (the "OFFICIAL
RECORDS"); and (ii) recordation of the Memorandum of Lease (as defined in
Paragraph 20.2 below) in the Official Records immediately following the
recordation of such grant deed. It is also anticipated by the parties that on or
before October 1, 2004 (the "SUBDIVISION OUTSIDE DATE"), Landlord will cause all
of the following events (hereinafter referred to collectively as the
"SUBDIVISION") to occur: (A) the subdivision of the Land from the Larger Parcel
into a legally subdivided parcel pursuant to a final parcel map recorded in the
Official Records, which final parcel map shall be based upon and substantially
in accordance with that certain proposed final parcel map no. 31139-1 (the
"PROPOSED FINAL MAP") on which the Land is depicted as Parcel 1 thereof (a copy
of which

                                      -1-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

Proposed Final Map is attached hereto as Exhibit B-2), and subject only to the
conditions for such subdivision as set forth on the Proposed Final Map (which
conditions Landlord shall satisfy and cause to be deleted, at its expense, prior
to recordation of such final parcel map); (B) subject to the following
provisions of this Recital B, recordation in the Official Records of a
memorandum of lease amendment (the "MEMORANDUM OF LEASE AMENDMENT") to be
executed by the parties as provided in Paragraph 20.2 below, which modifies the
Memorandum of Lease to (1) reflect that the subdivision of the Land from the
Larger Parcel has occurred, and (2) attach thereto the legal description of the
Land, as so subdivided, as the land component of the Premises; and (C) receipt
by Tenant of the Leasehold Title Policy or Leasehold Title Commitment for the
Premises, as the case may be, as defined in and pursuant to the provisions of
Paragraph 3.3 below. It is currently contemplated by the parties that the Land
Acquisition will occur prior to the Subdivision, but in the event Landlord
causes the Land Acquisition and Subdivision to occur concurrently, then
notwithstanding the foregoing provisions of Recital B to the contrary, (1) the
parties shall not record the Memorandum of Lease Amendment, and (2) prior to
recordation of the Memorandum of Lease, a modified version of the Memorandum of
Lease shall be executed by the parties and delivered to the escrow holder
described in Paragraph 20.2 below in substitution for the originally executed
Memorandum of Lease in order to eliminate references to the Larger Parcel and
such Subdivision and to reference and attach thereto as an exhibit the legal
description of the Land, as so subdivided, as the land component of the
Premises. If Landlord fails to either (x) effect the Land Acquisition by the
Acquisition Outside Date, as evidenced by written notice thereof (together with
conformed copies of the recorded grant deed of the Larger Parcel, including the
Land, in favor of Landlord and the recorded Memorandum of Lease) delivered by
Landlord to Tenant on or before such Acquisition Outside Date, or (y) effect the
Subdivision by the Subdivision Outside Date, as evidenced by written notice
thereof together with conformed copies of the recorded final parcel map
subdividing the Land from the Larger Parcel, and the recorded Memorandum of
Lease Amendment (if applicable), then, in either such case, and in addition to
Tenant's other rights and remedies set forth in this Lease, Tenant shall have
the rights set forth in Paragraph 1.5 below.

ARTICLE 1: TERM.

         1.1      Commencement Date. The term of this Lease (the "TERM") shall
be for a period of approximately ten (10) years commencing upon the Commencement
Date (as defined hereinbelow), and expiring upon the date (the "EXPIRATION
DATE") that is the last day of the calendar month which is ten (10) years after
the Commencement Date, unless extended or sooner terminated as provided in this
Lease. The "COMMENCEMENT DATE" shall be the date that is the earlier of: (i) the
later of (A) January 1, 2005, and (B) that date which is ninety (90) days after
the date (the "DELIVERY DATE") Landlord delivers to Tenant possession of the
Premises in the Delivery Condition (as defined in Paragraph 1.4.1 below),
subject, however to acceleration (but not before January 1, 2005) due to Tenant
Delays (as defined and provided in Paragraph 6 of Exhibit C) and/or extension
and postponement as provided in Paragraph 1.2 below; or (ii) the date Tenant
actually commences its ordinary business operations in the Building (which shall
be subject to Tenant obtaining all applicable licenses therefor required by
Applicable Laws, as defined in Paragraph 1.2 below). For purposes of this
Paragraph 1.1, Tenant shall be considered to have commenced its ordinary
business operations in the Building when it has personnel and inventory on-site
within the Building and is able to commence distribution of that inventory from
the Building. Accordingly, the mere fact that Tenant has commenced the storage
of inventory at

                                      -2-


BIG 5 WAREHOUSE
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the Premises shall not be considered the commencement of its ordinary business
operations in the Building. Landlord shall give Tenant thirty (30) days' advance
notice of the date possession of the Premises shall be delivered to Tenant in
the Delivery Condition. Said delivery of possession of the Premises to Tenant in
the Delivery Condition shall be made in full compliance with the terms and
conditions of Article 3 of this Lease and Exhibit C attached hereto.

         1.2      Fixturization Period. During such ninety (90) day period set
forth in Paragraph 1.1 above (the "FIXTURIZATION PERIOD"), Tenant intends to
install certain "Fixturization Work" within the Building, as defined and
described in Exhibit C attached hereto, and in connection with the installation
of the Fixturization Work: (i) Tenant shall have uninterrupted access to the
Building and Premises to install the Fixturization Work during the Fixturization
Period, subject, however, to Landlord's rights of access as are reasonably
necessary for Landlord to complete Landlord's Work and make the Premises Ready
for Occupancy (as defined in Paragraph 1.4.2 below) during the ninety (90) day
period immediately following the Delivery Date; and (ii) Landlord shall use
commercially reasonable efforts, at no cost to Landlord, to assist Tenant in
obtaining (at Tenant's expense) all governmental permits and approvals for such
Fixturization Work (including, without limitation, racking permits, applicable
fire department approvals and permits for Tenant's proposed guns and ammunition
areas in the Building). If Tenant's installation of the Fixturization Work
and/or commencement of Tenant's ordinary business operations in the Building
following delivery of possession thereof to Tenant in the Delivery Condition
shall be delayed by reason of any Landlord Delays (as defined in Paragraph 1.3
below), then the Fixturization Period shall be extended and accordingly the
Commencement Date of the Term of this Lease shall be postponed for a period
equal to the duration of such Landlord Delays. In the event any of such Landlord
Delays delay Tenant's commencement of business operations in the Building for a
period beyond the date which is eighteen (18) months after the date of execution
of this Lease (the "OUTSIDE OPERATIONS DATE"), Tenant may elect to terminate
this Lease by written notice delivered to Landlord within sixty (60) days after
the Outside Operations Date, and Tenant shall be entitled to receive from
Landlord the Tenant Termination Payment as defined in and pursuant to Paragraph
1.5.5 below.

         1.3      Landlord Delays. As used herein, "LANDLORD DELAYS" shall mean
any delays in the installation of the Fixturization Work, and/or the
commencement of Tenant's ordinary business operations in the Building following
delivery of possession of the Premises to Tenant in the Delivery Condition,
actually caused by any of the following (but only to the extent such delays are
not caused by Tenant Delays or Force Majeure Delays, as defined in Paragraph
1.5.4 below):

                  (i)      Landlord's failure or refusal to (A) give
authorizations, approvals or disapprovals within the time periods required under
this Lease or Exhibit C, (B) disburse and/or pay when due the cost of Landlord's
Work required to be paid for by Landlord (including disbursement of the Tenant
Improvement Allowance) in accordance with Exhibit C, or (C) otherwise comply
with the time deadlines and/or schedules set forth in this Lease and/or Exhibit
C;

                  (ii)     Landlord's breach of any provisions of this Lease or
Exhibit C;

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BIG 5 WAREHOUSE
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                  (iii)    any unreasonable interference with Tenant's
installation of the Fixturization Work caused by Landlord's Work, including,
without limitation, any failure by Landlord to provide Tenant with uninterrupted
access to the Building and Premises to install the Fixturization Work after the
Delivery Date as required in Paragraph 1.2 above and thereafter commence its
ordinary business operations in the Building;

                  (iv)     (A) any defects in the design and/or construction of
Landlord's Work or failure of Landlord to comply with all Applicable Laws and/or
the requirements of Exhibit C in connection with the design and construction of
Landlord's Work, including, without limitation, any failure of Landlord's Work
to meet the Delivery Condition requirements as of the date the Premises are
delivered to Tenant, and/or (B) incorrect or incomplete Final Plans (as defined
in Exhibit C) for Landlord's Work and/or the failure of the Final Plans to
comply with Applicable Laws or otherwise meet the requirements set forth in
Exhibit C;

                  (v)      revisions made to the Final Plans after approval
thereof by Landlord and Tenant unless required by Tenant Change Orders (as
defined in Exhibit C) requested by Tenant pursuant to Exhibit C;

                  (vi)     Landlord's failure to complete Landlord's Work and
make the Premises Ready for Occupancy within the ninety (90) day period
following the Delivery Date; and/or

                  (vii)    any other acts, negligence or omissions of or by
Landlord or Landlord's employees, agents, contractors, licensees or invitees.

         1.4      Delivery Condition; Ready for Occupancy.

                  1.4.1    Delivery Condition. For purposes hereof, the Premises
shall be deemed to be in the "DELIVERY CONDITION" after Landlord has caused both
the Land Acquisition and the Subdivision to occur, and when all of Landlord's
Work for the Premises to be constructed by Landlord pursuant to Exhibit C has
been completed to the extent set forth on Exhibit I attached hereto, and
otherwise to such extent so as to not unreasonably delay or interfere with
Tenant's installation of the Fixturization Work described in Paragraph 1.2
above. Immediately prior to Landlord's delivery of possession of the Premises to
Tenant in the Delivery Condition, Landlord and Tenant shall conduct a joint
walk-through of the Premises to confirm whether or not the Premises are in fact
in the Delivery Condition as described in and required by Exhibit I and this
Paragraph 1.4.1. The parties acknowledge and agree that the Delivery Date will
occur prior to completion of all of Landlord's Work, and that Landlord will be
completing the remainder of Landlord's Work and causing the Premises to be Ready
for Occupancy during Tenant's Fixturization Period while Tenant is installing
the Fixturization Work.

                  1.4.2    Ready for Occupancy. Landlord covenants to complete
Landlord's Work (subject to the Punchlist Items, as defined below in this
Paragraph 1.4.2) and cause the Premises to be Ready for Occupancy within ninety
(90) days after the Delivery Date. For purposes hereof, the Premises shall be
deemed "READY FOR OCCUPANCY" when:

                           (i)      Landlord has caused both the Land
Acquisition and the Subdivision to occur;

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BIG 5 WAREHOUSE
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                           (ii)     all of Landlord's Work has been completed in
accordance with the Final Plans, all Applicable Laws, and the provisions of
Exhibit C, excepting only those incomplete items of finishing and/or correction
work (collectively, the "PUNCHLIST ITEMS") which (A) are of such a nature that
they will not and do not unreasonably delay or interfere with Tenant's
completion of the Fixturization Work or Tenant's commencement of its ordinary
business operations from the Premises following Tenant's completion of the
Fixturization Work, and (B) are identified on a list to be jointly prepared and
mutually agreed upon by Landlord and Tenant as provided hereinbelow (provided,
however, that such Punchlist Items shall be completed by Landlord within thirty
(30) days after such substantial completion);

                           (iii)    a certificate of occupancy (or a temporary
certificate of occupancy or its equivalent, subject to conditions reasonably
acceptable to Tenant) with respect to Landlord's Work has been issued by the
City of Riverside, and a copy of the same has been delivered to Tenant;

                           (iv)     all Premises systems and utilities
(including, without limitation, water, electricity, and HVAC) are in good
working order and operation;

                           (v)      Landlord's Contractor (as defined in Exhibit
C) has executed a Certificate in the form attached as Schedule 2 to Exhibit C,
and a copy of same has been delivered to Tenant; and

                           (vi)     Landlord's Architect has executed a
Certificate in the form of the AIA Certificate of Substantial Completion
(G704-1978), and a copy of same has been delivered to Tenant.

Within ten (10) days after Landlord has made the Premises Ready for Occupancy
and delivered to Tenant the certificates described in clauses (iii), (v) and
(vi) hereinabove, Landlord and Tenant will jointly conduct a walk-through
inspection of the Premises and will jointly prepare an agreed upon list of
Punchlist Items to be performed by Landlord pursuant to Exhibit C.

         1.5      Failure to Effect Land Acquisition or Subdivision, Commence
Grading, Obtain Permits, Achieve Delivery Condition or Complete Landlord's Work.

                  1.5.1    If Landlord fails to (i) effect the Land Acquisition
by the Acquisition Outside Date, or (ii) effect the Subdivision by the
Subdivision Outside Date, or (iii) commence grading of the Land ("GRADING
COMMENCEMENT") by August 15, 2004 (the "GRADING COMMENCEMENT OUTSIDE DATE"), as
such date in this clause (iii) may be extended as provided in Paragraph 1.5.4
below, or (iv) obtain from the appropriate governmental authorities all
necessary building permits and approvals to construct Landlord's Work (the
"PERMIT ISSUANCE") by August 15, 2004 (the "PERMIT ISSUANCE OUTSIDE DATE"), as
such date in this clause (iv) may be extended as provided in Paragraph 1.5.4
below, then in addition to Tenant's other rights and remedies set forth in this
Lease, Tenant may, at any time thereafter but prior to the date the Land
Acquisition, Subdivision, Grading Commencement or Permit Issuance (as the case
may be) has occurred, either (A) terminate this Lease upon ten (10) days' prior
written notice to Landlord and receive from Landlord the Tenant Termination
Amount (as defined in and pursuant to Paragraph 1.5.5 below), or (B) extend the
Acquisition Outside Date, the Subdivision Outside

                                      -5-


BIG 5 WAREHOUSE
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Date, the Grading Commencement Outside Date or the Permit Issuance Outside Date
(as the case may be) to a later date as designated by Tenant in its sole and
absolute discretion in a written notice delivered by Tenant to Landlord, in
which event:

                           (1) Tenant shall retain its termination right and
right to receive the Tenant Termination Amount pursuant to clause (A) of this
Paragraph 1.5.1 if Landlord fails to cause the Land Acquisition, Subdivision,
Grading Commencement or Permit Issuance (as the case may be) to occur by such
extended Acquisition Outside Date, extended Subdivision Outside Date, extended
Grading Commencement Outside Date or extended Permit Issuance Outside Date (as
the case may be);

                           (2) Tenant shall receive one (1) day of abated Fixed
Rent and Real Property Taxes for each day that is within the period commencing
as of the originally scheduled Acquisition Outside Date and expiring upon the
date the Land Acquisition actually occurs;

                           (3) Tenant shall receive one (1) day of abated Fixed
Rent and Real Property Taxes for each day that is within the period commencing
as of the originally scheduled Subdivision Outside Date, and expiring upon the
date the Subdivision actually occurs;

                           (4) Tenant shall receive one (1) day of abated Fixed
Rent and Real Property Taxes for each date that is within the period commencing
as of the originally scheduled Grading Commencement Outside Date (as the same
may be extended pursuant to Paragraph 1.5.4 below) and expiring upon the date
Grading Commencement actually occurs; and

                           (5) Tenant shall receive one (1) day of abated Fixed
Rent and Real Property Taxes for each day that is within the period commencing
as of the originally scheduled Permit Issuance Outside Date (as the same may be
extended pursuant to Paragraph 1.5.4 below) and expiring upon the date the
Permit Issuance actually occurs.

                  1.5.2    If Landlord fails to deliver possession of the
Premises to Tenant in the Delivery Condition by May 1, 2005 (the "DELIVERY
DEADLINE DATE"), as such date may be extended as provided in Paragraph 1.5.4
below, then in addition to Tenant's other rights and remedies set forth in this
Lease, Tenant may, at any time thereafter but prior to delivery of possession of
the Premises to Tenant in the Delivery Condition, either (i) terminate this
Lease upon not less than ten (10) days' prior written notice to Landlord and
receive from Landlord the Tenant Termination Amount, or (ii) extend the Delivery
Deadline Date to a later date as designated by Tenant in its sole and absolute
discretion in a written notice delivered by Tenant to Landlord, in which event:
(A) Tenant shall retain its termination right and right to receive the Tenant
Termination Amount pursuant to clause (i) of this Paragraph 1.5.2 if Landlord
fails to deliver possession of the Premises to Tenant in the Delivery Condition
by such extended Delivery Deadline Date; and (B) Tenant shall receive one (1)
day of abated Fixed Rent and Real Property Taxes for each day that is within the
period commencing as of the originally scheduled Delivery Deadline Date (as the
same may be extended pursuant to Paragraph 1.5.4 below) and expiring upon the
date Landlord actually delivers possession of the Premises to Tenant in the
Delivery Condition.

                                      -6-


BIG 5 WAREHOUSE
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                  1.5.3    If Landlord fails to cause the Premises to be Ready
for Occupancy by August 1, 2005 (the "READY FOR OCCUPANCY OUTSIDE DATE"), as
such date may be extended as provided in Paragraph 1.5.4 below, then in addition
to Tenant's other rights and remedies set forth in this Lease, Tenant may, at
any time thereafter prior to Landlord causing the Premises to be Ready for
Occupancy, either (i) terminate this Lease upon not less than ten (10) days'
prior written notice to Landlord and receive from Landlord the Tenant
Termination Amount, or (ii) extend the Ready for Occupancy Outside Date to a
later date as designated by Tenant in its sole and absolute discretion in a
written notice delivered by Tenant to Landlord, in which event: (A) Tenant shall
retain its termination right and right to receive the Tenant Termination Amount
pursuant to clause (i) of this Paragraph 1.5.3 if Landlord fails to cause the
Premises to be Ready for Occupancy by such extended Ready for Occupancy Outside
Date; and (B) Tenant shall receive one (1) day of abated Fixed Rent and Real
Property Taxes for each day that is within the period commencing as of the
originally scheduled Ready for Occupancy Outside Date (as the same may be
extended pursuant to Paragraph 1.5.4 below) and expiring upon the date Landlord
actually causes the Premises to be Ready for Occupancy.

                  1.5.4    Notwithstanding anything in this Paragraph 1.5 to the
contrary, if Grading Commencement, Permit Issuance, delivery of possession of
the Premises to Tenant in the Delivery Condition and/or causing the Premises to
be Ready for Occupancy shall be delayed by reason of (i) any Tenant Delays,
and/or (ii) "FORCE MAJEURE DELAYS", which are defined herein, collectively, as
delays due to governmental regulations, unavailability of material or labor,
rain or other inclement weather, acts of God, strikes, lockouts or any other
matters beyond Landlord's reasonable control (other than Landlord's financial
condition), including delays in obtaining applicable permits from the
governmental authorities beyond the normal period of time for issuance of such
permits for similar projects and not due to Landlord's failure to comply with
the provisions of this Lease or the requirements of such governmental
authorities for issuance of such permits, then the Grading Commencement Outside
Date, the Permit Issuance Outside Date, the Delivery Deadline Date or the Ready
for Occupancy Outside Date (as the case may be) shall be extended for a period
equal to the duration of such Tenant Delays and Force Majeure Delays.
Notwithstanding the foregoing to the contrary, (A) such extension of any of such
four (4) dates for any Force Majeure Delays described in clause (ii) hereinabove
shall not exceed a period of two (2) months nor result in the Ready for
Occupancy Outside Date being extended, in any event, beyond the date which is
eighteen (18) months after the date of execution of this Lease, and (B) no such
extension shall occur to the extent such Force Majeure Delays and/or Tenant
Delays could have been avoided had Landlord used reasonable efforts to avoid
such delay and to adapt and compensate for such delay. In addition, no Tenant
Delay or Force Majeure Delay shall be deemed to have occurred unless Landlord
has delivered to Tenant written notice specifying in reasonable detail the
actions, inactions or circumstances Landlord claims constitute such Tenant Delay
or Force Majeure Delay within five (5) business days after Landlord becomes
aware of the occurrence of the action, inactions or circumstances; provided,
however, in the event Landlord provides such notice after the expiration of that
fifth (5th) business day, the Tenant Delay or Force Majeure Delay (as the case
may be) shall be deemed to have occurred commencing on the day that Landlord
actually provides such notice to Tenant; and provided, further, that no such
Tenant Delay shall be deemed to have occurred if Tenant cures the action,
inaction or circumstance which Landlord claims constitutes such Tenant Delay
within two (2) business days after such notice is received by Tenant (however,
Tenant shall only be entitled to an aggregate of fifteen (15) business days in
which to cure any such actions, inactions or circumstances, and any

                                      -7-


BIG 5 WAREHOUSE
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such Tenant Delays occurring after such fifteen (15) business days of aggregate
cure days utilized by Tenant shall be deemed to have occurred without taking
into account any subsequent cure periods hereinabove).

                  1.5.5    Following any such termination of this Lease pursuant
to this Paragraph 1.5, Paragraph 1.2 above or Paragraph 16.1 below, both parties
hereto shall be freed and discharged of all further obligations under this
Lease, except: (i) as provided for in provisions of this Lease which by their
terms survive the expiration or earlier termination of this Lease; (ii) Landlord
shall remain obligated to disburse any undisbursed Tenant Improvement Allowance
to pay for any costs for which the Tenant Improvement Allowance may be utilized
and which have been incurred prior to the effective date of such termination,
subject to and in accordance with the provisions of Exhibit C; and (iii)
Landlord shall reimburse Tenant an amount (the "TENANT TERMINATION AMOUNT")
equal to Tenant's actual, documented and reasonable out-of pocket costs paid or
incurred by Tenant in connection with (A) this Lease (including, without
limitation, reasonable attorneys' fees paid by Tenant in negotiating this
Lease), (B) the design, permitting and construction of the Premises, and/or (C)
the design, acquisition and installation of any improvements, fixtures,
furniture and equipment for the Premises (but only to the extent any of the
foregoing costs have not previously reimbursed or paid by Landlord from the
Tenant Improvement Allowance or otherwise). The Tenant Termination Amount shall
be paid by Landlord to Tenant within thirty (30) days following the effective
date of termination. The foregoing provisions of this Paragraph 1.5.5 shall
survive the termination of this Lease.

         1.6      Rentable Area of the Building.

                  1.6.1    Rentable Area. For purposes hereof, the "RENTABLE
AREA" of the Building shall mean the gross building area of the Building
measured by the drip line of the Building (i.e., the lines that form the
exterior perimeter of the Building and follow the most exterior drip line at the
perimeter of the roof systems of the Building at floor level), but excluding:
(i) any space or areas which are not roofed and/or fully enclosed (including,
without limitation, (A) unenclosed connecting links or area ways, (B) unenclosed
exterior staircases or fire escapes, and (C) unenclosed shipping/receiving
platforms; (ii) any mezzanine or office space or second (2nd) floor space; (iii)
any canopies, exterior steps, exterior landings and staging platforms; and (iv)
any projections that do not extend vertically for the full height of the
Building. The Rentable Area of the Building to be constructed by Landlord is
approximately as set forth on page 1 of this Lease and is the parties' good
faith estimate thereof as of the date of execution of this Lease. Simultaneously
with Landlord's delivery of possession of the Premises to Tenant in the Delivery
Condition, Landlord will cause Landlord's Architect (as defined in Exhibit C) to
certify to Landlord and Tenant the Rentable Area of the Building. Such
certification shall be subject to the reasonable approval of Tenant pursuant to
Paragraph 1.6.2 below. The approved Rentable Area of the Building will be
specified in a Commencement Certificate (as defined in Paragraph 1.7 below), and
the Fixed Rent and Tenant Improvement Allowance shall be adjusted accordingly.

                  1.6.2    Tenant's Remeasurement Right. Within twenty (20) days
after delivery of Landlord's Architect's certificate of Rentable Area of the
Building pursuant to Paragraph 1.6.1 above, Tenant shall approve or disapprove
of that determination, and during such period shall have the right to engage
another California licensed architect experienced in the design and

                                      -8-


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construction of industrial buildings to measure the Rentable Area of the
Building. If Landlord's and Tenant's respective determinations differ, and the
parties are unable to resolve the differences within ten (10) business days
after submission of Tenant's determination to Landlord, the dispute shall be
determined by a third California licensed architect selected by Tenant's
architect and Landlord's Architect. If Tenant's architect and Landlord's
Architect are unable to agree on a third architect within twenty (20) days after
the submission of Tenant's determination to Landlord, the Rentable Area of the
Building shall be determined by a third (3rd) California licensed architect
selected by the presiding judge of the Superior Court of Riverside or San
Bernardino County, California, upon application of either Landlord or Tenant.
Tenant's failure to object to Landlord's Architect's determination within the
above 20-day period shall be deemed to be Tenant's approval of the determination
of Landlord's Architect.

         1.7      Commencement Certificate. Within thirty (30) days after the
Commencement Date, Tenant and Landlord shall execute and deliver a "Commencement
Certificate" in the form attached hereto as Exhibit H. In the Commencement
Certificate, Landlord and Tenant shall confirm the Commencement Date, the
Expiration Date of the Term, the Rentable Area of the Building and the Fixed
Rent.

ARTICLE 2: RENTAL.

         2.1      Fixed Rent. Effective upon the Commencement Date, Tenant
shall, except as otherwise provided herein, pay to Landlord as "FIXED RENT"
during the Term of this Lease the sum(s) set forth below in Subparagraph(s)
2.1.1, et seq. Said annual Fixed Rent shall be paid in equal monthly
installments in the amount(s) set forth in said subparagraph(s). Said monthly
Fixed Rent payment shall be paid on the first (1st) day of each full calendar
month for each such month. For periods of less than a full calendar month, said
monthly Fixed Rent payment shall be prorated based on the ratio of the number of
days in such partial calendar month to the total number of days in such full
calendar month. The proportionately reduced Fixed Rent payment for a part of a
calendar month for which Fixed Rent may be due shall be paid at the same time
and together with the Fixed Rent payment for the first (1st) full calendar month
for which Fixed Rent may be due as provided herein.

                  2.1.1    Commencing on the Commencement Date set forth in
Paragraph 2.1 above, and continuing for the next sixty (60) full calendar months
(the "FIRST PERIOD"), the annual Fixed Rent referred to in said Paragraph 2.1
shall be equal to the product of (i) $2.85 and (ii) the Rentable Area of the
Building, to be paid in equal monthly installments equal to the product of (A)
$0.2375 and (B) the Rentable Area of the Building. The Rentable Area of the
Building shall be determined pursuant to Paragraph 1.6 above, and the Fixed Rent
for the First Period shall be calculated based upon such determination as
provided therein.

                  2.1.2    Commencing on the date (the "ADJUSTMENT DATE") which
is the first (1st) day following the last day of the First Period, and
continuing for the remainder of the initial Term of this Lease ("SECOND
PERIOD"), the annual Fixed Rent referred to in said Paragraph 2.1 shall be equal
to the product of (i) the annual amount set forth in Subparagraph 2.1.1 above,
multiplied by (ii) the lesser of (A) 1.10, or (B) a fraction, the numerator of
which is the Comparison Index (as defined in Paragraph 2.1.4 below) for the
Second Period and the

                                      -9-


BIG 5 WAREHOUSE
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denominator of which is the Base Index (as defined in Paragraph 2.1.4 below) for
the Second Period, and shall be paid in equal monthly installments equal to
1/12th of such annual amount.

                  2.1.3    If Tenant extends the initial Term of this Lease for
any of the Option Periods as defined in and pursuant to Paragraph 15.1 hereof,
the annual Fixed Rent referred to in said Paragraph 2.1 and payable by Tenant
during the applicable Option Period shall be equal to the product of (i) the
annual Fixed Rent amount payable during the last year of the immediately
preceding Term of this Lease, multiplied by (ii) the lesser of (A) 1.10, or (B)
a fraction, the numerator of which is the Comparison Index for the applicable
Option Period, as set forth in Paragraph 2.1.4 below, and the denominator of
which is the Base Index for the applicable Option Period, as set forth in
Paragraph 2.1.4 below, and shall be paid in equal monthly installments equal to
1/12th of such annual amount.

                  2.1.4    As used herein: (i) the "INDEX" shall mean the
Consumer Price Index for Los Angeles-Riverside-Orange County, California, All
Urban Consumers, 1982-84=100, as published by the Bureau of Labor Statistics,
United States Department of Labor or any successor agency; (ii) the "COMPARISON
INDEX" shall mean (A) with respect to the Second Period, the Index published for
the calendar month which is three (3) months prior to the Adjustment Date, and
(B) with respect to each applicable Option Period, the Index published for the
calendar month which is three (3) months prior to the commencement date of such
applicable Option Period; and (iii) the "BASE INDEX" shall mean (A) with respect
to the Second Period, the Index published for the calendar month which is three
(3) months prior to the Commencement Date, and (B) with respect to each
applicable Option Period, the Index published for the calendar month which is
sixty-three (63) months prior to the commencement date of such applicable Option
Period.

                  2.1.5    As an illustration of the calculation of the annual
Fixed Rent payable during the Second Period, if the Comparison Index for the
Second Period is 225, the Base Index is 200, and the Rentable Area of the
Building equals 953,132 square feet, then the annual Fixed Rent payable during
the Second Period would equal $2,988,068.82, calculated as follows:
$2,716,426.20 (i.e., the annual Fixed Rent payable for the First Period)
multiplied by 1.10 (which is less than 1.125, the fraction resulting from
dividing the Comparison Index of 225 by the Base Index of 200).

         2.2      Abatement of Rent. If following the Commencement Date Tenant
is prevented from using and does not use any portion of the Building by reason
of (i) default of Landlord, (ii) any labor difficulty encountered by Landlord,
(iii) Landlord's making any repairs or alterations to the Premises, (iv) a
casualty event or eminent domain proceedings, (v) any interruption of any
utilities or services being furnished to the Premises resulting from the acts,
negligence or willful misconduct of Landlord or Landlord's agents, employees,
contractors or licensees, (vi) the existence of Hazardous Materials (as defined
in Paragraph 3.3 below) in, on or at the Premises which have not been (A)
introduced by Tenant or any of Tenant's agents, contractors, employees,
licensees or invitees, and/or (B) caused by the actions of any third parties
(other than Landlord or Landlord's agents, employees or contractors) on the
Premises, or (vii) any other cause beyond the reasonable control of Tenant, then
and in each and all such cases, Tenant may elect, at any time after either (A)
the commencement of such prevention of use with respect to any of the events
described in clauses (i), through (v) hereinabove, or (B) the

                                      -10-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

third (3rd) consecutive business day of such prevention of use with respect to
any of the events described in clauses (vi) or (vii) hereinabove, to abate Fixed
Rent, Real Property Taxes payable pursuant to Paragraph 6.1 below and all other
charges payable by Tenant under this Lease for the period that Tenant continues
to be prevented from using, and does not use, the Building or any portion
thereof. Landlord acknowledges that Tenant shall be entitled to such abatement
with respect to any such event described hereinabove which affects areas of the
Premises outside the Building (whether or not the Building is directly affected
thereby), such as, but not limited to, Tenant's inability to use the driveways,
accessways and/or parking areas of the Premises, so long as a result of such
event occurring with respect to such other areas of the Premises, Tenant is
prevented from using and does not use a portion of the Building. Such abatement
shall be in proportion to the Rentable Area of the Building that Tenant is
prevented from using, and does not use (other than for storage purposes), as a
result of any such event; provided, however, if as a result of any event
described in clauses (i) through (vii) hereinabove, less than all of the
Premises or Building is affected by such event but Tenant is nevertheless unable
to effectively conduct its business (other than for storage purposes) from the
remainder of the Building and does not conduct same (other than for storage
purposes) from the area affected by the event and all such remaining portions of
the Building, then the entire Fixed Rent, Real Property Taxes and other charges
payable by Tenant under this Lease shall be abated for such time that Tenant
continues to be so prevented from using, and does not use, the entire Building
for the conduct of its business (other than for storage purposes). If, however,
Tenant reoccupies and recommences its business operations (other than for
storage purposes) from any portion of the Building during such abatement period,
the Fixed Rent, Real Property Taxes and other charges payable by Tenant under
this Lease allocable to such reoccupied portion, based upon the proportion that
the Rentable Area of such reoccupied portion of the Building bears to the total
Rentable Area of the Building, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Building (other than for storage purposes) and
recommences its business operations (other than for storage purposes) therefrom.

         2.3      Place of Payment. Payments of rental hereunder are to be made
pursuant to Paragraph 20.15 hereof.

         2.4      Definition of Rent and Additional Rent. Notwithstanding
anything in this Lease to the contrary, Tenant shall not be obligated to pay to
or reimburse Landlord for any common area or other operating expenses, or
expenses incurred by Landlord for any repairs, maintenance, replacements,
insurance or other services which are Landlord's obligation to perform, provide
or pay for under this Lease (other than reimbursement of Real Property Taxes
pursuant to Paragraph 6.1 below), and Landlord shall not be entitled to receive
any management or administrative fees in connection with the Premises, this
Lease or any such obligations. All sums payable by Tenant to Landlord pursuant
to this Lease other than Fixed Rent shall be deemed to be "ADDITIONAL RENT". The
term "RENT", "RENTS", "RENTAL" or "RENTALS" as used in this Lease shall mean
Fixed Rent and additional rent.

ARTICLE 3: POSSESSION AND TITLE.

         3.1      Landlord's Covenants. Landlord covenants to deliver to Tenant
upon the Delivery Date sole and exclusive possession of the Premises (subject,
however, to Landlord's rights to enter the Premises to complete Landlord's Work
and the Punchlist Items as provided in

                                      -11-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

Paragraph 1.4 above), free and clear of: (i) all tenants and occupants (other
than Tenant) and the rights of either; (ii) any violations of Applicable Laws;
and (iii) all liens, encumbrances, easements, covenants, conditions and
restrictions (collectively, "ENCUMBRANCES"), except for the following items
(collectively, the "APPROVED TITLE EXCEPTIONS"): (A) those Encumbrances
specified in Exhibit D attached hereto and made a part hereof (collectively, the
"PERMITTED ENCUMBRANCES"); (B) any first priority deed of trust executed by
Landlord as trustor in favor of an institutional lender as beneficiary in
connection with any financing obtained by Landlord to acquire the Land or
construct the Improvements (the "PERMITTED DEED OF TRUST"), subject, however, to
Tenant's receipt of an executed SNDA from such lender pursuant to the provisions
of Article 16 below; and (C) any utility and landscape easements (reasonably
approved by Tenant) that are reasonably necessary to effect the Subdivision,
complete Landlord's Work and/or provide utilities to and for the Premises
(collectively, the "PERMITTED EASEMENTS"). In connection with the foregoing,
Landlord covenants that prior to the earlier of the Delivery Date and the
Outside Subdivision Date, Landlord shall cause all Encumbrances recorded against
the Property (other than the Approved Title Exceptions) to be removed from
record title to the Premises. With respect to any such utility easements
proposed by Landlord pursuant to clause (C) hereinabove, Tenant shall notify
Landlord of Tenant's reasonable approval or disapproval thereof within five (5)
days after Tenant's receipt from Landlord of the documents creating such
proposed easements. Tenant's taking possession of the Premises shall not
constitute a waiver of any defect in the Premises or of any breach by Landlord
of Landlord's obligations under Exhibit C attached hereto.

Landlord further covenants that Landlord will not, so long as this Lease is in
effect:

                  (1)      grant or create (or consent to the granting or
creation of) any leases or occupancy agreements affecting the Premises;

                  (2)      grant or create (or consent to the granting or
creation of) any Encumbrances or other agreements which would or could (x)
adversely affect or interfere with Tenant's access to the Premises, or
materially interfere with Tenant's operation of the Premises for the Permitted
Use (as defined in Paragraph 5.1 below), or (y) increase any of Tenant's
obligations under this Lease (including rent) or diminish or impair any of
Tenant's rights under this Lease, other than (I) a Permitted Deed of Trust
encumbering the Premises, subject to the provisions of Article 16 below, and
(II) the Permitted Easements;

                  (3)      vary or permit to be varied the designated means of
ingress to and egress from the Premises from that shown on the Site Plan or
otherwise approved by Tenant as part of Landlord's Work pursuant to Exhibit C;

                  (4)      alter or permit to be altered any street signs,
median cuts, traffic signals, driveways or the parking layout or parking areas
of and for the Premises from that shown on the Site Plan or otherwise approved
by Tenant as part of Landlord's Work pursuant to Exhibit C (except to the extent
required by applicable governmental agencies after consultation with Tenant and
subject to Tenant's reasonable review and approval of any such required
alterations);

                                      -12-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                  (5)      erect or permit to be erected any buildings or
structures on the Premises except for the initial Improvements to be constructed
by Landlord as part of Landlord's Work pursuant to Exhibit C; and/or

                  (6)      alter the Premises or permit the Premises to be
altered in any manner (except as necessary by Landlord in the performance of
Landlord's Work or any of its other obligations under this Lease) without first
obtaining the prior written consent of Tenant, which consent may be granted or
withheld in the sole and absolute discretion of Tenant.

         3.2      Quiet Enjoyment. Landlord covenants that Tenant, upon paying
the rent pursuant to the terms of this Lease, may quietly have, hold and enjoy
the Premises during the Term hereof.

         3.3      Landlord's Representations, Warranties and Covenants. Landlord
represents, warrants and covenants to Tenant that:

                  (i)      (A) Landlord has entered into a purchase and sale
agreement to acquire fee simple title to the Larger Parcel (including the Land)
from the current owner thereof, which agreement provides for a closing date to
occur by May 15, 2004, (B) such purchase and sale agreement is in full force and
effect and neither Landlord nor the seller is in default thereunder, (C)
Landlord shall not extend such closing date beyond the Acquisition Outside Date,
(D) Landlord shall not modify such purchase and sale agreement in any manner
which would increase Tenant's obligations or diminish or impair Tenant's rights
under this Lease, (E) Landlord shall diligently and timely perform all of its
obligations under such purchase and sale agreement and acquire fee simple title
to the Larger Parcel (including the Land) on or before the Acquisition Outside
Date, subject, however, to any material breach by the seller or the failure of
any other material condition in favor of Landlord thereunder not caused by
Landlord's default or Landlord's failure to use commercially reasonable efforts
to acquire fee simple title to the Land, and (F) upon the closing date of such
purchase and sale agreement, Landlord shall: (1) acquire fee simple title to the
Larger Parcel (including the Land) free of all Encumbrances, except for the
Approved Title Exceptions described in Paragraph 3.1 above, subject, however, to
the provisions of Article 16 below; (2) cause the Memorandum of Lease to be
recorded in the Official Records immediately after the grant deed conveying fee
simple title to the Larger Parcel (including the Land) to Landlord is recorded
in the Official Records; and deliver to Tenant a copy of Landlord's owner's
policy of title insurance insuring that Landlord has fee simple title to the
Larger Parcel (including the Land) subject only to those title matters set forth
in clause (1) hereinabove.

                  (ii)     the Land is currently part of the Larger Parcel which
will be acquired by Landlord as described hereinabove, but on or before the
Subdivision Outside Date, Landlord shall: (A) cause the Land to be subdivided
into a legally subdivided parcel of land in compliance with the California
Subdivision Map Act based upon and substantially in accordance with the Proposed
Final Map (which depicts the Land as Parcel 1 thereof) and subject to the
conditions specifically set forth on the Proposed Final Map (as described in
Recital B above) and no other conditions (all of which conditions Landlord
shall, at Landlord's expense, cause to be satisfied and deleted prior to the
recordation of the final parcel map for the Land); (B) if the Subdivision is not
effected concurrently with the Land Acquisition, execute with Tenant and record
the Memorandum of Lease Amendment in the Official Records immediately after the
final parcel

                                      -13-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

map for the Land is recorded in the Official Records; and (C) cause to be
delivered to Tenant, at Tenant's option, either (1) an ALTA Leasehold Title
Policy of Insurance issued by the same title company who issued the owner's
title insurance policy to Landlord, insuring Tenant's leasehold interest in the
Premises pursuant to the Lease in the amount of $20,000,000.00, subject only to
the Approved Title Exceptions, which policy shall be paid for by Tenant (but
Landlord shall contribute $2,500.00 toward the cost thereof) and shall be in
such form of and contain such endorsements as Tenant shall reasonably request or
approve (collectively, the "LEASEHOLD TITLE POLICY") or (2) an ALTA leasehold
title commitment issued by such title company and dated not sooner than the date
such final parcel map is recorded, which commitment shall be paid for by
Landlord and shall show as exceptions to title in Schedule B thereof only the
Approved Title Exceptions (the "LEASEHOLD TITLE COMMITMENT");

                  (iii)    Landlord has full right, power and lawful authority
to enter into this Lease and perform its obligations hereunder;

                  (iv)     Landlord has obtained (or will obtain prior to the
Delivery Date or the date the Premises are Ready for Occupancy) all governmental
and other permits and approvals necessary to perform its obligations pursuant to
this Lease, including Exhibit C attached hereto;

                  (v)      to Landlord's actual knowledge, the Premises are not
subject to any leases, subleases, tenancies, agreements or Encumbrances (other
than those specifically set forth in Exhibit D attached hereto), or violations
of Applicable Laws;

                  (vi)     to Landlord's actual knowledge: (A) there are no
environmental, zoning, archaeological or other Applicable Laws which will (1)
prevent Landlord from acquiring fee simple title to the Larger Parcel (including
the Land), subdividing the Land from the Larger Parcel pursuant to the Proposed
Final Map, or completing Landlord's Work, or (2) prevent Tenant from conducting
the Permitted Use at the Premises; (B) the Premises are properly zoned to permit
construction of Landlord's Work and the Permitted Use; (C) the Premises are not
subject to any existing environmental impact report (and the construction of
Landlord's Work as currently contemplated in Exhibit C will not subject the
Premises to any environmental impact reports); and (D) all Stephens Kangaroo Rat
habitat fees affecting the Premises have been paid in full;

                  (vii)    to Landlord's actual knowledge, the Permitted Use is
lawful under all Applicable Laws and all existing Encumbrances affecting the
Premises, and will be lawful under all insurance policies to be obtained
by Landlord pursuant to this Lease;

                  (viii)   the Building and all other Improvements to be
constructed and installed for the Premises as part of Landlord's Work
(including, without limitation, all parking spaces thereon, all public road
access and curb cuts, including access and curb cuts for trucks and all
driveways and accessways thereon and thereto, the construction of Crest Ridge
Drive as described in Exhibit C, all drainage facilities, and all utilities,
utilities connections and other improvements and facilities necessary to conduct
Tenant's Permitted Use at the Premises and to access the Premises) shall be
constructed and installed by Landlord in compliance with all Applicable Laws in
effect as of the date of completion thereof (including, without limitation, all
zoning laws and the California Subdivision Map Act), all existing Encumbrances
affecting the

                                      -14-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

Premises and all insurance policies now obtained or hereafter to be obtained by
Landlord pursuant to this Lease;

                  (ix)     to Landlord's actual knowledge, there are no civil
lawsuits, condemnation or similar proceedings or other judicial actions or
proceedings which are presently pending against Landlord or the Premises and
which could have an adverse impact on the operation or use of the Premises as
contemplated or permitted in this Lease;

                  (x)      no joinder or approval of another person or entity is
required with respect to Landlord's right and authority to enter into this
Lease, and no approval of another person or entity is required with respect to
Landlord's performance of its obligations under this Lease, except for
Landlord's obligation to obtain the following approvals of the City of Riverside
with respect to the construction of Landlord's Work described in Exhibit C,
which shall be obtained by Landlord: (A) the grading permit, foundation permit
and building permit for Landlord's Work, the necessary governmental approvals
for the construction of Crest Ridge Drive as described in Exhibit C, and the
permits for electrical, plumbing, mechanical, sewer, storm drain and other
systems to be included within or at the Building or Premises and/or serving the
Premises; and (B) the certificate of occupancy to occupy the Premises issued by
the City of Riverside;

                  (xi)     (A) Landlord has received no notice from any
governmental agency or authority or from any third party relating to Hazardous
Materials in, on or under the Premises, (B) Landlord has not generated, treated,
stored or disposed of any Hazardous Materials in, on, under or about the
Premises, (C) to Landlord's actual knowledge, no Hazardous Materials exist in,
on or under the Premises in violation of any Applicable Laws in effect as of the
date of execution of this Lease, and (D) Landlord will not generate, handle,
treat, store or dispose of any Hazardous Materials upon or within the Building
or the Premises in connection with the construction of the Landlord's Work, or
any of its other activities conducted with respect to the Premises, except only
such Hazardous Materials which are routinely used in connection with such
construction work or activities, but then only in compliance with all Applicable
Laws. For purposes hereof, the term "HAZARDOUS MATERIALS" shall mean any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government, including, without limitation, any material or substance which is
(1) defined or listed as a "hazardous waste," "extremely hazardous waste,"
"restricted hazardous waste," "hazardous substance" or "hazardous material"
under any Applicable Laws, (2) petroleum, or (3) asbestos.

For purposes hereof, "TO LANDLORD'S ACTUAL KNOWLEDGE" means the actual knowledge
of Steven Palmer, one of Landlord's representatives who Landlord hereby
represents and warrants to Tenant is the employee of Landlord who is primarily
responsible for acquisition and development of the Premises.

         3.4      Effect of Breach; Indemnity. Any material breach or material
inaccuracy of the representations, warranties or covenants set forth in
Paragraphs 3.1, 3.2 or 3.3 above shall, for the purposes of Article 18 below,
constitute a failure by Landlord to perform a material obligation under this
Lease and a default by Landlord under this Lease, and in addition to Tenant's
remedies set forth in this Lease, at law and/or in equity, as a result of such
default

                                      -15-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

(including, without limitation, Tenant's remedies set forth in Article 18
below), Landlord shall indemnify, defend, protect and hold Tenant harmless from
and against any and all losses, damages, claims, expenses and liabilities
arising out of any such breach or inaccuracy (excluding, however, lost profits
or other consequential damages).

ARTICLE 4: SIGNS AND COMMUNICATION EQUIPMENT.

         Tenant shall have the exclusive right, at Tenant's expense, but subject
to Tenant's obtaining Landlord's prior consent pursuant to, and otherwise
complying with the other provisions of, Article 8 below, to: (i) affix to,
erect, install, paint and/or inscribe any and all signs (collectively, "SIGNS")
designated by Tenant anywhere in or at the Premises (including, without
limitation, any Signs on the exterior and/or interior of the Improvements), to
the extent permitted by Applicable Laws; and (ii) affix to, erect and/or install
any and all satellite dishes, antennae and other communications equipment for
use by Tenant in connection with or related to Tenant's operations of its
Permitted Use at the Premises (collectively, the "COMMUNICATION EQUIPMENT")
anywhere in or at the Premises (including, without limitation, on the roof of
the Building). Accordingly, Landlord shall have no right to place any Signs or
Communication Equipment or grant to any other party the right to place any Signs
or Communication Equipment in, on, under or at the Improvements or the Premises.
In the event Tenant elects to install any of Tenant's Signs and/or Communication
Equipment as part of the Fixturization Work described in Exhibit C or elects
that Landlord install any such items as part of the Tenant Improvements
described in Exhibit C, the costs incurred by Tenant or Landlord therefor, as
the case may be, shall be paid out of the Tenant Improvement Allowance as set
forth in Exhibit C. All of Tenant's Signs and Communication Equipment shall
comply with all Applicable Laws. Landlord shall use commercially reasonable
efforts to obtain, at Tenant's expense, any required governmental approvals,
including variances if necessary, for Tenant's Signs and Communication Equipment
and shall, throughout the Term of this Lease, take no action that might result
in a change in said Signs or Communication Equipment without the written consent
of Tenant. Tenant's signage rights and rights to install, modify and/or use the
Communication Equipment are transferable to any permitted assignee of this Lease
and/or to any subtenant of the Premises, subject, however, to Tenant's
compliance with and receipt of approvals under Applicable Laws with respect to
any changes to the Signs and Communication Equipment in connection therewith
(but the Communication Equipment shall not be transferable to any third party
for any use which is not in connection with such third party's occupancy of the
Premises; however, this restriction shall not prevent Tenant from having any
Communication Equipment owned by a third party and leased to Tenant for Tenant's
use). Tenant shall have the right from time to time to alter or replace the
Signs and/or Communication Equipment, including in connection with any
assignment or sublease allowed under this Lease, provided that the alterations
or replacements comply with then Applicable Laws.

ARTICLE 5: USE OF PREMISES; UTILITIES; COMPLIANCE WITH LAWS.

         5.1      Permitted Use. The Premises may be used for warehouse,
distribution, sales, advertising, assembly and/or light manufacturing purposes
and related retail, office and/or administrative uses (collectively, the
"PERMITTED USE") and for no other purpose without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed.

                                      -16-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

         5.2      Utility Services to Premises. During the Term of this Lease,
Tenant covenants to pay directly to the utility companies providing utilities to
the Premises, for the cost of all separately metered electricity, water and
other public utilities consumed by Tenant at the Premises in connection with its
occupancy and use of the Premises. Such utilities shall be separately metered
pursuant to meters installed by Landlord, at Landlord's cost, as part of the
Building/Site Work as defined in and pursuant to the provisions of Exhibit C.
Landlord hereby agrees to reasonably cooperate with Tenant, at Tenant's expense,
in obtaining a commitment from the City of Riverside for a guaranteed rate
reasonably acceptable to Tenant on all utility charges for the Premises which
will result in utility savings reasonably acceptable to Tenant.

         5.3      Compliance with Laws. Tenant shall at all times following the
Commencement Date conduct its business on the Premises in a lawful manner and in
substantial compliance with all Applicable Laws, such compliance to be at
Tenant's own cost and expense; provided, however, that any alterations,
improvements, or additions, structural or otherwise, to or of the Premises which
may be made necessary or required by reason of any Applicable Laws promulgated
by competent governmental authority, shall be made by and at the sole cost and
expense of Landlord, unless and to the extent necessitated solely by reason of:
(i) Tenant's particular and specific use of the Premises after the Commencement
Date and/or the introduction of any Hazardous Materials onto the Premises by
Tenant and/or any of Tenant's agents, contractors, employees, licensees or
invitees in violation of Applicable Laws at the time of such introduction;
and/or (ii) alterations made by Tenant to the Premises after the Commencement
Date. In the furtherance of the foregoing, Landlord acknowledges and agrees
that: (A) Tenant shall have no duty, liability or responsibility whatsoever to
study, remediate, remove, dispose or otherwise address any Hazardous Materials
which now or may hereafter be present in, on, under or about the Premises to the
extent such Hazardous Materials (1) existed in or under the Premises as of the
Delivery Date or were generated, handled, brought into, used, stored, disposed
or discharged by Landlord, any of Landlord's agents, contractors, employees,
licensees or invitees or any other person or entity, other than Tenant and its
agents, contractors, employees, licensees and/or invitees, and/or (2) migrated
from any offsite sources; and (B) Landlord shall, at its sole cost and expense,
promptly take all actions as are necessary to remove, treat, remediate and/or
dispose of such Hazardous Materials and return the Premises to the condition
existing prior to the introduction of any such Hazardous Materials to the
Premises, all in accordance with all Applicable Laws. Wherever there is a
conflict between the provisions of this Paragraph and the provisions of Article
7 hereof, the provisions of this Paragraph shall prevail.

         5.4      Tenant's Use of Hazardous Materials.

                  5.4.1    Permitted Use of Hazardous Materials. Landlord hereby
agrees that Tenant may store, use, generate and handle at or from the Premises
Hazardous Materials that are reasonably necessary in connection with Tenant's
Permitted Use conducted at the Premises (including, without limitation, the
installation and use of above and/or below ground fuel tanks and service bays
on-site for fueling of Tenant's vehicles and equipment and personal property at
the Premises); provided however, as a condition to any such storage, use,
generation, and/or handling of any such Hazardous Materials: (i) Tenant must
store, use, generate and handle such Hazardous Materials in compliance with all
Applicable Laws (including those pertaining to or governing Hazardous Materials)
and only for their intended purposes; (ii) prior to any such storage, use,
generation and/or handling of any such Hazardous Materials, Tenant shall provide

                                      -17-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

to Landlord copies of all governmental permits required to be obtained by Tenant
in connection therewith; and (iii) Tenant must eventually dispose off-site
(i.e., outside the Land), in compliance with all Applicable Laws, all such
Hazardous Materials stored, used, generated and/or handled by Tenant and its
agents, contractors, employees, licensees or invitees. Tenant shall be solely
responsible for obtaining and keeping current all of Tenant's governmental
permits relating to any Hazardous Materials stored, used, generated, handled
and/or disposed of by Tenant and its agents, contractors, employees, licensees
and invitees as may be required by Applicable Laws. Tenant further acknowledges
and agrees that Tenant shall be solely responsible for the preparation and
maintenance of any required waste manifests necessary for the transport and
disposal of any Hazardous Materials from the Premises.

                  5.4.2    Removal and Indemnity. If Tenant breaches any of its
obligations contained in this Paragraph 5.4, or if the presence of any Hazardous
Materials in the Building or on or at the Premises, stored, used, generated,
handled and/or disposed of by Tenant or Tenant's agents, contractors, employees,
licensees or invitees results in contamination of the Land, Building or any
other portion of the Premises, then Tenant shall promptly commence and pursue to
completion, at Tenant's expense, a remediation program designed to remediate
such contamination as required by Applicable Laws, provided that Landlord's
approval of such remediation program shall first be obtained (which approval
shall not be unreasonably withheld, conditioned or delayed). In addition, Tenant
shall indemnify defend and hold Landlord and the Landlord Representatives (as
defined in Paragraph 10.9.1 below) harmless from and against any and all Claims,
as defined in Paragraph 10.9.1 below (including, without limitation, (i) costs
incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Materials
present in, on or about the Land, Building and/or any other portion of the
Premises, and in the air, in the soil or in the ground water, (ii) diminution in
value, if any, of the Land, Building and/or any other portion of the Premises,
and (iii) sums paid in settlement of claims, attorneys' fees, consultant fees
and expert fees, but excluding lost profits as other consequential damages)
which arise as a result of any such breach or contamination described in the
first sentence of this Paragraph 5.4.2.

                  5.4.3    Periodic Inspection. Landlord and/or Landlord's
environmental consultants shall be entitled, from time to time during the Term
(but only (i) after reasonable advance notice to Tenant, (ii) pursuant to
scheduling reasonably approved by Tenant, and (iii) in a manner that will not
unreasonably interfere with Tenant's normal business operations at the Premises
or cause any damage to the Building or Premises, and otherwise in compliance
with the provisions of Paragraph 7.5 below), to conduct environmental
inspections, investigations and studies of the Building and Premises. Such
inspections shall be at Landlord's sole cost and expense; however, if any such
inspection discloses (A) contamination of the Building or Premises with
Hazardous Materials stored, used, generated, handled and/or disposed of by
Tenant or Tenant's agents, contractors, employees, licensees or invitees, or (B)
a breach by Tenant of any of its covenants and obligations in this Paragraph
5.4, Tenant shall be solely responsible for the payment of all reasonable costs
of such inspection. Throughout the Term, Tenant shall maintain accurate and
complete records with respect to Tenant's storage, use, generation, handling and
disposal of Hazardous Materials in, on or about the Building and/or Premises,
and Tenant shall make such records reasonably available to Landlord and
Landlord's

                                      -18-


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

environmental consultants in connection with any inspection or proposed
inspection of the Premises.

                  5.4.4    Survivability. The obligations of the parties under
this Paragraph 5.4 (including Tenant's indemnity of Landlord in Paragraph 5.4.2
above) shall survive the expiration or earlier termination of this Lease.

         5.5      Parking Rights. Following the Delivery Date, Tenant and
Tenant's employees, agents, contractors, licensees and invitees shall have the
sole and exclusive right to use the accessways, driveways, parking areas and
parking spaces to be constructed at the Premises, subject, however, to
Landlord's rights to access and use such areas as are reasonably necessary in
order to (i) complete Landlord's Work and make the Premises Ready for Occupancy
during the ninety (90) day period immediately following the Delivery Date (which
entry for such purposes shall be in accordance with a mutually approved schedule
therefor as set forth in Exhibit C), and/or (ii) perform Landlord's repairs and
comply with its other obligations under this Lease during the Term. Subject to
the provisions of Article 8 below, Tenant shall have the right from time to
time, in its sole discretion, to relocate, restripe and/or make any other
modifications to or of any portions of the accessways, driveways, parking areas
and parking spaces of the Premises, provided that such modifications comply with
all Applicable Laws (including, without limitation, maintaining the minimum
number of on-site striped parking spaces required by Applicable Laws for the
Building). In addition, in connection with and as part of Tenant's Permitted
Use, Tenant may: (A) maintain and/or store on-site in such locations at the
Premises or shall be designated from time to time by Tenant therefor
automobiles, trucks and other vehicles and any equipment and personal property
used in connection with the operation of Tenant's business; and (B) subject to
Tenant's compliance with the other provisions of this Paragraph 5 (specifically
including Paragraph 5.4 above), install above and/or below ground fuel tanks and
service bays on-site for fueling of any such vehicles and equipment.

         5.6      Trade Names. All trade names used by Tenant from time to time
in connection with its operations in the Premises, all patents and other
intellectual property rights of Tenant, and all other intangible personal
property of Tenant used or arising in connection with Tenant's operations in the
Premises shall not be subject to any lien or claim of ownership by Landlord.
Tenant may use any trade names(s) that it chooses in connection with its
operations in the Premises and may change such trade name(s) from time to time.

         5.7      No Covenant to Operate. Tenant shall have the right to conduct
its business operations at the Premises 24 hours a day, 7 days a week, every day
of the year, subject to any restrictions that may be imposed by Applicable Laws.
However, nothing in this Article or in any other provision of this Lease shall
be construed to require a business to be continuously operated or operated
during any minimum period of time in the Premises, or to require the Premises to
be continuously occupied or occupied during any minimum period of time.

ARTICLE 6: TAXES AND LIENS.

         6.1      Taxes and Assessments. All taxes and assessments of every kind
and character whatsoever assessed against the Premises shall be paid by Landlord
prior to delinquency without reimbursement from Tenant except as expressly
provided below in this Article 6, and except that

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during the Term of this Lease: (i) any tax imposed on Tenant as a condition of
doing business, or any tax assessed against personal property owned by Tenant,
or any franchise tax or license fee levied against Tenant by the State of
California shall be paid by Tenant directly to the taxing authority prior to
delinquency; and (ii) Tenant shall pay, in the manner set forth in Paragraph 6.2
below, all ad valorem real property taxes (collectively, the "REAL PROPERTY
TAXES") assessed against the Premises for each fiscal tax year or portion
thereof during the Term.

         Notwithstanding the foregoing to the contrary, there shall be excluded
from Real Property Taxes payable by Tenant hereunder, and Tenant shall not be
obligated to pay or reimburse Landlord for any of the following, which shall be
paid by Landlord prior to delinquency:

                  (A)      taxes, assessments, bond payments (including
Mello-Roos or similar bond payments), development fees, license fees or other
fees or impositions for any on-site or off-site improvements, utilities or
utilities connections, site acquisition, subdivision, sewer or street
improvements (including, without limitation, the construction of Crest Ridge
Drive), or any other taxes, assessments, bond payments, development fees,
license fees or other fees or impositions now or hereafter assessed or imposed
against Landlord or the Premises in connection with or resulting from the
development and/or acquisition of the Land or the Improvements or any other part
of the Premises (including subdivision of the Larger Parcel and recordation of
the final parcel map for the Land) which are other than ad valorem real property
taxes, except that there shall be included in Real Property Taxes payable by
Tenant hereunder: (1) the Premises' share of bond payments assessed under
current storm water bond (CFD #92-1), not to exceed, however, $1,000 per acre of
the Land in any calendar year; and (2) the Premises' share of bond payments
assessed under current water bond (AD #1);

                  (B)      increases in taxes attributable to the period
occurring prior to the fifth (5th) anniversary of the Commencement Date and
resulting from a sale or other change of ownership of the Premises occurring
prior to such date, including any "Change of Ownership" (as defined in
California Revenue and Taxation Code Sections 60 et seq. or any modifications or
successor statutes thereto); provided, however, that the foregoing provisions of
this clause (B) shall not apply with respect to Landlord's acquisition of the
Land from the current owner thereof;

                  (C)      corporate, partnership, income, franchise,
inheritance, succession, estate, gift, excess profits, capital stock or similar
taxes;

                  (D)      taxes or charges imposed upon or measured by
Landlord's income or profits or the rents or rental income payable pursuant to
this Lease or any other lease; or

                  (E)      fines, penalties, late charges or interest imposed as
a result of Landlord's failure to timely pay or file returns or information for
any taxes, assessments or other charges.

         6.2      Payment of Real Property Taxes. If (i) any Real Property Taxes
to be paid by Tenant shall cover any period of time prior to or after the
expiration or sooner termination of the Term of this Lease, or (ii) any other
taxes or assessments contained in any Tax Statements (as defined below) received
by Tenant are Landlord's responsibility to pay pursuant to this Article 6,
Landlord shall be solely responsible for the payment of such Real Property Taxes
and other taxes

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and assessments without reimbursement therefor from Tenant, and Landlord shall
reimburse Tenant, within thirty (30) days after Tenant's invoice therefor, for
any such Real Property Taxes attributable to such periods and such other taxes
and assessments actually paid for by Tenant. The parties desire that Tenant pay
the Real Property Taxes assessed against the Premises during the Term directly
to the taxing authority. In connection with the foregoing, Landlord covenants
and agrees to: (A) furnish Tenant with true and complete copies of all tax
bills, tax assessment notices and tax statements relating to the Premises
(collectively, the "TAX STATEMENTS") throughout the Term within thirty (30) days
following Landlord's receipt thereof from the applicable taxing authority or
authorities, whether or not such Tax Statements reflect a proposed increase in
assessment or amount of tax; and (B) endeavor to have all Tax Statements for the
Real Property Taxes be issued by the applicable taxing authority directly to
Tenant during the Term (including issued in Tenant's name if necessary for such
purposes). Tenant shall make payment directly to the applicable taxing authority
of the Real Property Taxes assessed against the Premises during the Term of this
Lease in the following manner:

                  (1) in the event Tenant receives the applicable Tax Statements
directly from the applicable taxing authority, Tenant shall make such payment of
the Real Property Taxes evidenced thereby not later than ten (10) days prior to
delinquency; or

                  (2) in the event Tenant does not receive the applicable Tax
Statements directly from the applicable taxing authority, Tenant shall make such
payment of the Real Property Taxes on or before the date which is the later of:
(x) thirty (30) days after receipt by Tenant of written demand by Landlord for
payment thereof (which demand shall include a copy of the proper tax bill
covering such Real Property Taxes); or (y) ten (10) days prior to delinquency.
Notwithstanding the foregoing to the contrary, if the applicable taxing
authority permits payment of Real Property Taxes to be made in installments,
Tenant's obligation to pay Real Property Taxes under this Article 6 shall be
limited to such installment payments.

         6.3      Tenant's Right to Contest. If Tenant desires to contest the
validity of any Real Property Taxes or any other taxes or assessments assessed
against the Premises, it may do so on Landlord's behalf, at Tenant's sole cost
and expense, provided that it shall indemnify Landlord against any loss,
liability or damage on account thereof, excluding lost profits or other
consequential damages. If Tenant is successful in said contest, any refund
received pertaining to any taxes and assessments paid by Tenant shall belong
entirely to Tenant. Landlord agrees to cooperate in a reasonable manner with
Tenant in such contest, including the execution of any documents of
authorization reasonably necessary therefor. Should (i) Landlord at any time
fail to furnish to Tenant true and complete copies of tax bills, tax assessment
notices or tax statements as required by this Article 6 at least thirty (30)
days prior to the date such taxes or assessments are due, and (ii) such failure
results in (A) Tenant's inability to contest (including contest after payment
under protest) any proposed new tax or tax increase, and (B) Tenant's obligation
to pay Real Property Taxes in an amount which is more than the amount paid by
Tenant as Real Property Taxes for the preceding tax year, and Tenant reasonably
establishes that it would have prevailed in such tax contest had such tax bills,
tax assessment notices or tax statements been delivered by such time deadline
set forth hereinabove, then Tenant's obligation for Real Property Taxes for the
tax year for which Tenant was not able to contest shall be limited to the
greater of (1) the amount paid for such purpose for the preceding tax year, or
(2) the

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amount Tenant reasonably establishes would have been payable had Tenant
prevailed in such tax contest.

         6.4      Liens. Tenant covenants that it will not, during the Term
hereof, suffer or permit any lien to be attached to or upon the Premises by
reason of any act or omission on the part of Tenant, and hereby agrees to
indemnify and hold Landlord harmless from and against any such lien or claim of
lien. In the event any such lien is recorded against the Premises, Tenant shall
have the right to contest the validity of the same, but if the same shall not be
released of record (by payment, posting of a statutory bond or other method)
within thirty (30) days after notice from Landlord to Tenant to do so, Landlord
in its sole discretion, may pay and discharge the same and remove any such lien
from the Premises. Tenant agrees to repay Landlord, upon demand, for any amount
which may have been paid by Landlord in discharging such lien, together with
interest at an annual interest rate equal to the Interest Rate (as defined
below) from the date of the expenditure by Landlord to the date of repayment by
Tenant. As used herein, the "INTEREST RATE" shall mean the lesser of (i) ten
percent (10%) per annum, or (ii) the maximum interest rate allowed by Applicable
Laws.

         6.5      Landlord's Covenant to Pay. Landlord covenants that it will
not fail to pay when due any of the following, if such failure to pay would or
may (i) result in a termination of this Lease, or (ii) adversely affect Tenant's
leasehold interest in the Premises, or (iii) increase Tenant's obligations or
diminish or impair any of Tenant's rights under this Lease: (A) any installment
of taxes, assessments, bonds or other charges upon any mortgage, deed of trust
or other lien or encumbrance affecting the Premises; or (B) any taxes or
assessments payable by Landlord pursuant to this Article 6.

ARTICLE 7: REPAIRS.

         7.1      Tenant's Maintenance and Repair Obligations. During the Term,
but subject to Articles 9 and 12 below, Tenant shall, at Tenant's sole cost and
expense, diligently maintain, repair and replace (as necessary) in good order,
condition and repair, all aspects of the Premises, regardless of the cost
thereof and the time remaining in the Term and whether capital or non-capital,
except for obsolescence and ordinary wear and tear, and unless and to the extent
included in Landlord's obligations under this Lease, including, without
limitation, Paragraphs 5.3, 7.2, 7.3, 9.1 and 12.4 of this Lease (collectively,
"LANDLORD'S MAINTENANCE OBLIGATIONS"). Such obligations of Tenant shall include
(subject to Landlord's Maintenance Obligations), without limitation, all
equipment or facilities serving the Premises, including, mechanical, plumbing,
heating, air conditioning, ventilating and electrical systems (collectively, the
"SYSTEMS"), lighting facilities, interior demising walls, the roof membrane of
the Building (but not the structural components of the roof, and Tenant's repair
obligations shall not include the replacement of the roof or roof membrane or
any part thereof), windows, doors, plate glass, driveways, parking areas,
landscaping, fences, walls, Signs, sidewalks and parkways located in, on or at
the Premises. In addition, Tenant shall maintain the painting of and repaint the
exterior walls of the Building as and when reasonably necessary. Notwithstanding
the foregoing provisions of this Paragraph 7.1 to the contrary, to the extent
any damage to the Premises is caused by the negligence or willful misconduct of
Landlord or any of Landlord's agents, contractors, employees, licensees or
invitees, Landlord shall be solely responsible, at its expense, for repairing
such damage with all due diligence, in good and workmanlike manner, in

                                      -22-


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compliance with all Applicable Laws and in a manner which will not unreasonably
interfere with Tenant's access to or use of the Premises; if Landlord fails to
diligently complete such repairs, or if such repairs are of an emergency nature
which if not attended to may result in bodily injury or property damage or
material interference with or interruption of Tenant's business operations at
the Premises, Tenant may perform such repairs as provided in Paragraph 7.2
below, and Landlord shall reimburse Tenant for the reasonable out-of-pocket
costs incurred by Tenant in performing such repairs within thirty (30) days
after Landlord's receipt of invoices therefor. Landlord agrees that Landlord
will, as part of the cost of the Landlord's Work, obtain for the benefit of both
Landlord and Tenant (i) standard manufacturers' warranties for components of
Landlord's Work, and (ii) warranties against defective construction, workmanship
and materials from the contractors performing the Landlord's Work covering all
of Landlord's Work for a period of at least one (1) year from the date of full
completion of the Landlord's Work, except that with respect to the roof of the
Building, Landlord shall obtain for the benefit of both Landlord and Tenant, as
part of the cost of the Building/Site Work to be paid for by Landlord from
Landlord's own funds, from the subcontractor who installs the roof, a "NO DOLLAR
LIMIT" warranty without proration against defective construction, workmanship
and materials of the roof, covering all materials and labor for a period of at
least fifteen (15) years following the date of full completion of the Landlord's
Work. Landlord hereby assigns to Tenant all of its rights to such warranties and
all other warranties it may now or hereafter have covering those portions of the
Premises which Tenant is responsible to maintain, repair and/or replace, and
Landlord shall provide Tenant such good faith cooperation as is reasonably
necessary to permit enforcement of such warranties by Tenant.

         7.2      Landlord's Maintenance and Repair Obligations. Landlord shall,
at Landlord's sole cost and expense, diligently maintain, repair and replace (as
necessary) in good order, condition and repair: (i) Crest Ridge Drive (unless
such maintenance, repairs and replacements are the City of Riverside's
obligation following any dedication of Crest Ridge Drive to the City of
Riverside); (ii) any other roads, accessways and driveways that are located on
the Land and are made available for the common use of other properties in
addition to the Land (subject to Tenant's approval of any such common use and
the rules and procedures therefor); and (iii) the following elements of the
Building and the other Improvements: (A) the structural components of the roof
of the Building, but excluding the roof membrane, which, except as provided in
Paragraph 7.3 below, shall be Tenant's responsibility to repair as set forth in
Paragraph 7.1 above (provided, however, that in any event, Landlord shall be
responsible, at Landlord's cost, as part of Landlord's Maintenance Obligations,
for replacing the roof and/or roof membrane and any part thereof); (B) floor
slabs; (C) exterior walls (excluding painting thereof which shall be Tenant's
responsibility, as set forth in Paragraph 7.1 above); (D) foundations; (E)
footings; (F) underground utilities; (G) load bearing columns and walls; and (H)
all structural portions (both interior and exterior) thereof. Notwithstanding
the foregoing to the contrary, Tenant shall reimburse Landlord, within thirty
(30) days after receipt of invoices, for the reasonable out-of-pocket costs
incurred by Landlord for (1) repairing any damage to such portions of the
Building and Improvements required to be repaired by Landlord to the extent
caused by the negligence or willful misconduct of Tenant or any of Tenant's
agents, contractors, employees, licensees or invitees, and (2) the replacement
of the roof membrane necessitated solely as a result of Tenant's failure to
maintain the roof membrane as and when required pursuant to Paragraph 7.1 above,
which failure is not cured (or other work performed by Tenant which
substantially corrects the matter) within thirty (30) days after Landlord
notifies Tenant thereof and of Landlord's intent to

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replace the roof as a result thereof. Landlord shall also repair, at its cost,
any and all damage to the Premises, including fixtures and equipment, which may
result from its failure to make any such maintenance, repairs or replacements
within a reasonable time after being notified by Tenant that such maintenance,
repairs and/or replacements are needed. If any maintenance, repair or
replacement matter for which Landlord is responsible under this Lease
(including, without limitation, under this Article 7) is of an emergency nature
which if not attended to may result in bodily injury or property damage or
material interference with or interruption of Tenant's business operations at
the Premises, Tenant may make such maintenance, repairs or replacements as are
reasonably necessary to remedy such situation without prior notice to Landlord
(provided, however, Tenant shall reasonably attempt to give Landlord oral notice
of such emergency situation prior to taking any such actions, which oral notice
shall be given to the representative of Landlord so designated therefor in
writing to Tenant), and Landlord shall reimburse Tenant for the cost of such
reasonably necessary maintenance, repairs or replacements so undertaken by
Tenant, which reimbursement shall be made within thirty (30) days after
Landlord's receipt of invoices from Tenant evidencing such costs together with a
written statement from Tenant specifying the nature of such emergency situation
and the needed maintenance, repairs or replacements. The obligations of Landlord
under this Article 7 shall not be modified or diminished due to the fact or the
manner in which Tenant shall undertake to make such emergency maintenance,
repairs and/or replacements pursuant to this Paragraph 7.2.

         7.3      Defects; Legally-Mandated Improvements. Landlord shall, at
Landlord's sole cost and expense, diligently make any and all repairs and
replacements of and to the Premises and repair to every part thereof (including
the membrane and other components of the roof of the Building, and all interior
and exterior portions of the Building and other Improvements at the Premises)
which may at any time be necessary by reason of any defects in the original
design and/or construction performed by Landlord or Landlord's contractors
(other than defects in any alterations or improvements installed by Tenant after
the Delivery Date), whether structural or otherwise, and whether capital or
non-capital in nature, and shall repair such defects and any and all damage to
the Premises which may result from any such defects; provided, however, unless
otherwise part of Landlord's maintenance and repair obligations in Paragraph 7.2
above (which provisions shall control with respect to any conflict with this
Paragraph 7.3), Landlord shall not be responsible for correcting any such
defects not disclosed by Tenant in writing to Landlord by the date which is the
later of: (i) ten (10) years (with respect to latent defects) and one (1) year
(with respect to patent defects) after the date of full completion of Landlord's
Work; (ii) ten (10) years (with respect to latent defects) and one (1) year
(with respect to patent defects) after the date such work was initially
installed by Landlord or Landlord's contractors; or (iii) the expiration of the
applicable warranty period under the warranty provided for such work by the
designer and/or contractor performing same. Any addition, alteration or
improvement, structural or otherwise, to or of the Premises, or any part
thereof, which may be necessary or required by reason of any Applicable Laws
promulgated by competent governmental authority shall be governed by the terms
and provisions of Paragraph 5.3 above.

         7.4      Cost and Timing of Repairs. Landlord shall make all
maintenance, repairs and replacements required to be made by it pursuant to this
Article 7: (i) at Landlord's sole cost and expense (and such expenses shall not
be included in any rental, operating expense or other payments required to be
made by Tenant under this Lease); and (ii) promptly following notice from
Tenant, taking into consideration the nature of the maintenance, repair and/or
replacement

                                      -24-


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and the inconvenience or interference with Tenant's ability to conduct its
business that failure or delay in performing such work will cause. Landlord
shall also make all such maintenance, repairs and replacements at such times and
in such a manner as to minimize any inconvenience to Tenant in the conduct of
its business.

         7.5      Right of Entry; Posting of Notices. Subject to the provisions
of this Lease, Landlord reserves the right for itself or its duly authorized
agents and representatives at all reasonable times during Tenant's business
hours, but subject to reasonable advance notice, to enter the Premises for the
purpose of inspecting the same or to show the same to any prospective purchaser,
and for the purpose of making any necessary maintenance, repairs and
replacements to the Premises. In conducting any such entries (including any
inspections pursuant to Paragraph 5.4.3 above), Landlord shall follow Tenant's
reasonable security procedures, shall be accompanied by a representative of
Tenant, and shall minimize any inconvenience to Tenant in the conduct of its
business at the Premises. Notwithstanding the foregoing, Tenant may designate
certain areas of the Premises as "secured areas" should Tenant require such
areas for the purposes of securing valuable property or confidential
information; Landlord may not enter such secured areas except in cases of
emergency or otherwise after reasonable advance notice to and approval of Tenant
and only when accompanied by a representative of Tenant. At all reasonable times
Landlord shall have the right to post and keep posted on the Premises any
notices permitted by Applicable Laws relating to Landlord's nonresponsibility
for mechanics liens or liens of a similar nature.

         7.6      Relationship to Article 9. Landlord and Tenant expressly
acknowledge (i) that the foregoing provisions of this Article 7 shall not apply
to any repairs or replacements required as a result of fire or other casualty
event, and (ii) that all repairs and replacements required by fire or other
casualty event shall be governed by the provisions of Article 9 below.

ARTICLE 8: ALTERATIONS; SURRENDER OF PREMISES.

         8.1      Alterations. From and after the Delivery Date, Tenant shall
have the right from time to time to make such additions, repairs, alterations,
changes or improvements, in, on or to the Premises, as Tenant may deem necessary
or proper (including, but not limited to, the installation of trade fixtures,
above and/or below ground storage tanks [subject to Tenant's compliance with the
provisions of Paragraph 5.4 above with respect to such storage tanks], service
bays, equipment, and partitions required or used from time to time in connection
with Tenant's business in the Premises, and Signs and Communication Equipment
described in Article 4 above), subject, however, to the following conditions:
(i) no work done by Tenant shall lessen the market value of the Premises; (ii)
Tenant shall pay promptly for all such work done by it or upon its order subject
to Landlord's contribution of the Tenant Improvement Allowance pursuant to
Exhibit C, to the extent applicable thereto; (iii) Tenant shall construct all
such alterations in compliance with all Applicable Laws and pursuant to a valid
building permit (if required for the work to be performed by Tenant); (iv)
Tenant shall obtain Landlord's prior consent, which shall not be unreasonably
withheld, conditioned or delayed, with respect to any such alterations
(including Tenant's Signs and Communication Equipment) (A) made to or affecting
the structural components of the Building, or (B) which adversely affect the
roof or exterior appearance of the Building; (v) if any such work affects the
roof of the Building, Tenant shall perform such work (A) in a manner which will
not void the roof warranty, and (B) if

                                      -25-


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material in nature, only under the reasonable supervision of Landlord's outside
independent roof consultant (who Landlord shall make reasonably available to
Tenant to permit Tenant to timely perform such work), and Tenant shall reimburse
Landlord for the reasonable fees of such consultant in providing such
supervision services within thirty (30) days after invoice from Landlord; and
(vi) any such work performed after the Delivery Date but prior to the
Commencement Date shall not unreasonably interfere with the completion of
Landlord's Work by Landlord and Landlord's contractors and shall be performed
pursuant to a mutually approved schedule therefor as set forth in Exhibit C. In
the event Landlord's prior consent is required for Tenant's alterations pursuant
to clause (iv) hereinabove, Landlord shall notify Tenant of its approval or
reasonable disapproval within ten (10) days after Tenant's request therefor; if
Landlord fails to notify Tenant of Landlord's approval or disapproval within
such 10-day period, and such failure continues for an additional five (5)
business days after notice thereof from Tenant, Landlord shall be deemed to have
approved the proposed alterations. Nothing contained herein shall be construed
to require Tenant to: (1) remove any alterations or improvements made by or on
behalf of Tenant to or at the Premises, although (x) Tenant shall have the right
to remove any such alterations and/or improvements made by or on behalf of
Tenant, so long as Tenant repairs, at its expense, any damage to the Premises
resulting from such removal, and (y) with respect to any alterations which are
other than Landlord's Work, Landlord may require Tenant to remove same at the
expiration or earlier termination of this Lease so long as Landlord notifies
Tenant of such removal request within ten (10) days after Tenant notifies
Landlord of such alterations work, in which case Tenant, at Tenant's expense,
shall cause such alterations to be removed on or before the expiration or sooner
termination of this Lease and repair any damage to the Premises resulting from
such removal; or (2) make or pay for any repair, alteration, improvement, or
addition, or to do any other act or thing which Landlord is required to make or
do under any provision of this Lease, or which is required or becomes necessary
at any time because of any failure of Landlord to perform any of its obligations
hereunder.

         8.2      Surrender of Premises. Tenant shall, at the expiration of the
Term hereof, surrender the Premises and any improvements and alterations made
thereto not removed or required to be removed by Tenant pursuant to Paragraph
8.1 above, together with any personal property therein belonging to Landlord, in
broom-clean condition.

         8.3      Removal of Tenant's Property. Within ten (10) business days
after the expiration or sooner termination of this Lease, Tenant shall (i)
remove from the Premises all merchandise, trade fixtures, furniture,
furnishings, partitions, equipment and other personal property installed therein
and owned by Tenant or leased by Tenant from third-parties (excluding, however,
at Tenant's option, any Signs installed on or at the Premises), and (ii) repair
any damage to the Premises caused by any such removal.

         8.4      Initial Improvements. The rights and obligations of Landlord
and Tenant with respect to the development and construction of the initial
Improvements and Landlord's Work (and the installation by Tenant of the
Fixturization Work for the Building) are set forth in Exhibit C attached hereto.

                                      -26-


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ARTICLE 9: DAMAGE OR DESTRUCTION.

         9.1      Landlord's Restoration Obligations.

                  9.1.1    If the Improvements or any other part of the Premises
shall be damaged or destroyed by fire, earthquake or other casualty event or
from any other cause other than ordinary wear and tear, ordinary physical
depreciation or obsolescence, Landlord shall promptly (in any event, within
thirty (30) days following the date Landlord receives notice from Tenant or
otherwise becomes aware of the damage or destruction), notify Tenant in writing
as to how long it will take to substantially restore the damage or destruction
(ignoring any absence of insurance proceeds or delays in receiving the same) as
estimated by a reputable, qualified, licensed, nonaffiliated contractor having
at least ten (10) years experience in the construction and repair of buildings
of similar class, size, quality, design and method of construction as the
Building (the "EXPERIENCED CONTRACTOR"). Landlord's failure to so notify Tenant
within such 30-day period, where such failure continues for an additional ten
(10) days after notice thereof from Tenant shall, if Tenant so chooses, be
deemed to be the Experienced Contractor's determination that such restoration
will take longer than twelve (12) months (measured from the date of the damage
or destruction).

                  9.1.2    Subject to and except as expressly provided in
Paragraphs 9.1.3, 9.2 and 9.3 below, if the Improvements or any other part of
the Premises shall be damaged or destroyed to any extent by fire, earthquake or
other casualty event, Landlord shall, at Landlord's sole cost and expense (but
subject to payment of any Excess Costs [as defined in Paragraph 9.1.3 below], if
applicable, and insurance proceeds therefor from the Property Damage Insurance
[as defined in Paragraph 10.4.1 below] to be placed in the Construction Escrow,
as defined in Paragraph 9.1.3 below, and as provided in Paragraphs 9.1.3 and
10.4.3 below), diligently repair and restore the same to substantially the same
condition existing immediately prior to said damage or destruction with all
reasonable dispatch and diligence as provided herein. Said repair and
restoration shall include all fixtures and equipment in or of the Building and
the Premises owned by Landlord (including, without limitation, the HVAC,
plumbing, electrical and other mechanical and utilities systems and equipment in
and/or serving the Premises) and all leasehold improvements and alterations in
and to the Building and Premises, to the extent so damaged or destroyed.
Landlord shall have no obligation to repair, restore or replace Tenant's stock
in trade, trade fixtures, equipment, furnishings, furniture or other personal
property. All such repair and restoration of the Premises by Landlord shall be
made in accordance with plans and specifications approved by Tenant, which
approval shall not be unreasonably withheld, conditioned or delayed. Landlord
shall comply, and shall require all its contractors to comply, with all
Applicable Laws in making any said repairs and restoration. Landlord shall
indemnify, defend, protect and hold Tenant harmless from and against any and all
damages, claims, expenses, losses and/or liabilities (excluding lost profits and
other consequential damages) resulting from Landlord's failure to comply with
said Applicable Laws and/or diligently perform such repair and restoration work.
After repair and restoration, Landlord shall return possession of the Premises
to Tenant without diminution in size of the Building or Premises or change of
location, except as required by Applicable Laws. If Landlord carries on any
restoration or repair pursuant to this Article 9 and Tenant continues to occupy
any portion of the Premises, Landlord shall take all such steps as may be
reasonable and practicable to prevent interference with Tenant's use and
enjoyment of the portion of the Premises which Tenant continues to occupy.

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Landlord shall also perform its obligations under this Article 9 in a manner
which will achieve restoration of any damage or destruction as soon as
practicable, giving due regard to the nature and scope of the damage or
destruction.

                  9.1.3    If (i) the Improvements shall be damaged or destroyed
by any fire, earthquake or other casualty event which is not required to be
covered by property damage insurance under Paragraph 10.4 below ("UNINSURED
CASUALTY"), and the cost of repair or restoration of such Uninsured Casualty
damage or destruction exceeds the "THRESHOLD AMOUNT" (which for purposes hereof
shall mean twenty percent (20%) of the full replacement cost of the Improvements
immediately prior to said damage or destruction), or (ii) such damage or
destruction is caused by an earthquake, and Earthquake Insurance Coverage (as
defined in Paragraph 10.4.2 below) is in effect but the cost to repair such
earthquake damage (inclusive of the deductible amounts under such Earthquake
Insurance Coverage) which is not payable from proceeds under such Earthquake
Insurance Coverage exceeds the Threshold Amount, then Landlord may notify Tenant
in writing, within thirty (30) days after determining the repair and restoration
cost (but in no event later than sixty (60) days after said damage or
destruction), that Landlord elects not to restore the Premises or repair said
damage to the extent of such excess ("EXCESS COSTS") and to terminate this Lease
pursuant to the following provisions of this Paragraph 9.1.3. Such notice by
Landlord (herein referred to as "LANDLORD'S TERMINATION NOTICE") shall be
accompanied by an estimate of such replacement cost and at least two (2) bids
prepared by contractors approved by Tenant, showing in detail the costs of the
required repairs or restoration. If, within thirty (30) days after Tenant's
receipt of Landlord's Termination Notice, Tenant notifies Landlord in writing
that Tenant agrees to pay the Excess Costs, then within ten (10) days after
approval by Landlord and Tenant (not to be unreasonably withheld or delayed) of
joint escrow and payment instructions pertaining to disbursement of funds
covering such repair and restoration costs, Tenant shall place in a joint
construction escrow account held by a bank or escrow company mutually approved
by the parties (the "CONSTRUCTION ESCROW") an amount equal to the Excess Costs,
together with said approved joint escrow and payment instructions. Landlord
shall thereafter with all reasonable dispatch and diligence, and at Landlord's
expense (but with the right to recover such Excess Costs from the Construction
Escrow pursuant to such approved joint escrow and payment instructions), make
all the necessary repairs or restoration in accordance with Paragraph 9.1.2
above, and this Lease shall continue in effect. The cost of the Construction
Escrow holder's fees for such Construction Escrow shall be shared and paid
equally by the parties. If Tenant fails to either (A) notify Landlord in writing
within thirty (30) days after Tenant's receipt of Landlord's Termination Notice
that Tenant agrees to pay the Excess Costs, or (B) deposit the Excess Costs
together with said approved joint escrow and payment instructions within such
ten (10) day period set forth hereinabove, then this Lease shall terminate at
the end of said thirty (30) day period set forth in clause (A) hereinabove or
said ten (10) day period set forth in clause (A) hereinabove, as the case may be
(but Tenant shall have up to ninety (90) days after such termination to vacate
and surrender possession of the Premises to Landlord), and the provisions of
Paragraph 9.5 below shall apply. If Landlord shall fail to notify Tenant of
Landlord's election not to repair the damage or restore the Premises to the
extent of the Excess Costs within ninety (90) days after such damage or
destruction, Landlord shall make all necessary repairs or restoration at
Landlord's sole cost and expense (subject to payment of any insurance proceeds
from the Property Damage Insurance to be placed in the Construction Escrow
pursuant to Paragraph 10.4.3 below), in accordance with Paragraph 9.1.2 above.

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                  9.1.4    During the period of any such damage, destruction,
restoration and repair, Landlord shall reasonably cooperate with Tenant to
provide Tenant with temporary space for the operation of Tenant's Permitted Use
therein within Landlord's existing buildings, if any, located in San Bernardino
County or Riverside County, California, to the extent such space is available,
in which case Tenant shall pay Landlord for the use of such temporary space so
provided prevailing market rent, taxes and operating costs for such temporary
space in such amounts as shall be mutually and reasonably approved by the
parties.

         9.2      Tenant's Termination Right. Notwithstanding the provisions of
Paragraph 9.1 above to the contrary, in the event that the Experienced
Contractor reasonably determines that substantial restoration of the damage or
destruction resulting from any fire, earthquake or other casualty event will
take longer than twelve (12) months (measured from the date of the damage or
destruction), Tenant may terminate this Lease by written notice to Landlord
within thirty (30) days following Tenant's receipt of the Experienced
Contractor's determination (or within thirty (30) days following the expiration
of the thirty (30) day period set forth in Paragraph 9.1.1 above for Landlord to
provide the Experienced Contractor's determination to Tenant, in the event such
Experienced Contractor's determination is not timely delivered). Such
termination shall be effective as of the date specified by Tenant in Tenant's
termination notice, which shall be not sooner than thirty (30) days nor later
than ninety (90) days after such termination notice is delivered to Landlord.

         9.3      Damage Near End of Term. Anything in this Article 9 to the
contrary notwithstanding, if the Improvements or any other part of the Premises
shall be destroyed or damaged during the last twelve (12) months of the Term
hereof by reason of any fire, earthquake or other casualty event, and the
Premises cannot be substantially restored within a period of sixty (60) working
days from the date of such damage or destruction, this Lease may be terminated
upon written notice by either party to the other. Provided, however, that if at
the time of said destruction or damage, Tenant has an unexercised right of
extension pursuant to Article 15 hereof which is still in effect, Landlord may
not terminate this Lease until it has given Tenant notice of its intent to
terminate and Tenant fails to exercise said right of extension within thirty
(30) days of receipt of said notice. If Tenant fails to exercise said right of
extension, this Lease shall terminate effective thirty (30) days after Tenant's
receipt of said notice from Landlord.

         9.4      Failure to Commence or Complete Restoration. Anything in this
Article 9 to the contrary notwithstanding, if the repair and restoration
provided for in Paragraph 9.1 hereof is not commenced within six (6) months from
the date of the damage or destruction referred to in said Paragraph, or once
commenced, if said repair or restoration is not completed within the later of
(i) twelve (12) months after the date of such damage or destruction or (ii) the
estimated restoration period originally determined by the Experienced Contractor
pursuant to Paragraph 9.1.1 above, Tenant may terminate this Lease upon written
notice to Landlord, which termination shall be effective as of the date
specified by Tenant in such termination notice which shall be not sooner than
thirty (30) nor later than ninety (90) days after such termination notice is
delivered to Landlord. Tenant's right to terminate this Lease as provided
hereinabove (and elsewhere in this Article 9) shall be in addition to any other
right or remedy Tenant may have arising out of Landlord's breach of any covenant
of this Lease.

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         9.5      Effect of Termination. Except as otherwise expressly provided
above in this Article 9, such destruction or damage to the Premises shall not
terminate this Lease, notwithstanding the provisions of California Civil Code
Sections 1932 and 1933 or any other Applicable Laws to the contrary. Upon any
such termination of this Lease by Landlord or Tenant pursuant to this Article 9,
Landlord and Tenant shall be relieved from all liabilities hereunder except
those liabilities accruing prior to the date of such termination or which
expressly survive such termination.

         9.6      Conflict with Article 8. Wherever the provisions of this
Article 9 are in conflict with the provisions of Article 8 hereof, the
provisions of this Article 9 shall prevail.

ARTICLE 10: INSURANCE AND INDEMNITY.

         10.1     Tenant's Liability Insurance. From the date Landlord delivers
possession of the Premises to Tenant in the Delivery Condition as provided in
Paragraph 1.1 hereof and throughout the Term of this Lease, Tenant shall
maintain in force a commercial general liability insurance policy or policies
for liability for personal injury, death and bodily injury to persons and damage
to property occurring upon, within or at the Premises and arising from Tenant's
use and/or occupancy of the Premises. Said insurance policy or policies shall
name Landlord as an additional insured and shall be in an amount of not less
than a combined single limit liability of Five Million Dollars ($5,000,000.00),
with a commercially reasonable deductible or self-insured retention amount
(currently Tenant proposes an initial self-insured retention amount of
$250,000.00, which Landlord agrees is commercially reasonable). Said insurance
policy or policies shall be primary and noncontributing with any insurance
maintained by Landlord and shall include a blanket contractual liability
endorsement.

         10.2     Tenant's Personal Property Insurance. From the date Landlord
delivers possession of the Premises to Tenant in the Delivery Condition as
provided in Paragraph 1.1 hereof and throughout the Term of this Lease, Tenant
shall maintain in force an insurance policy covering all perils generally
included within the classification "Special Form - Risks of Direct Physical
Loss", other than earthquake or flood, with an extended coverage endorsement, in
the amount of not less than one hundred percent (100%) of the full replacement
cost of all of Tenant's trade fixtures, equipment, inventory and other personal
property owned by Tenant at the Premises. Landlord shall have no interest in or
claim of any nature to the proceeds of any such insurance.

         10.3     Landlord's Liability Insurance. At Landlord's expense,
Landlord shall maintain in force from and after the date of execution of this
Lease and throughout the Term of this Lease a commercial general liability
insurance policy or policies for liability for personal injury, death and bodily
injury to persons and damage to property occurring upon, within or at the
Premises and arising out of Landlord's acts or omissions, including, without
limitation, Landlord's design and construction activities pursuant to Exhibit C.
Said insurance policy or policies shall name Tenant as additional insured and
shall be in the amount of not less than a combined single limit liability of
Five Million Dollars ($5,000,000), with a commercially reasonable deductible.
Said insurance policy or policies shall be primary and noncontributing with any
insurance maintained by Tenant and shall include a blanket contractual liability
endorsement covering, among other matters, the indemnities provided by Landlord
pursuant to Paragraph 10.9 below.

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BIG 5 WAREHOUSE
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         10.4     Property Damage Insurance.

                  10.4.1   From the date Landlord delivers possession of the
Premises to Tenant in the Delivery Condition as provided in Paragraph 1.1 hereof
and continuing thereafter throughout the Term of this Lease, Tenant shall, at
its sole cost and expense, maintain in force an insurance policy or policies
covering: (i) all perils generally included within the classification "Special
Form - Risks of Direct Physical Loss", other than earthquake or flood, with an
extended coverage endorsement, in the amount of not less than one hundred
percent (100%) of the full replacement cost (with a commercially reasonable
deductible) of the Building and all other Improvements within or on the
Premises, and all improvements, alterations, fixtures and equipment within the
Building and any such other Improvements, exclusive, however, of trade fixtures,
inventory and other personal property owned by Tenant, and exclusive of the
value of excavations, underground utilities, foundations and footings; and (ii)
earthquake damage to such property described in clause (i) hereinabove, in such
amounts and upon such terms as Tenant shall determine, subject, however, to the
limitations contained in Paragraph 10.4.2 below. The insurance described in this
Paragraph 10.4.1 shall sometimes be referred to herein as the "PROPERTY DAMAGE
INSURANCE."

                  10.4.2   Landlord and Tenant agree that the obligation of
Tenant to provide insurance coverage for the Building and all other Improvements
at the Premises against damage from earthquake ("EARTHQUAKE INSURANCE COVERAGE")
shall be subject to the following additional terms, conditions and limitations:

                  (i)      The deductible for Earthquake Insurance Coverage, so
long as Earthquake Insurance Coverage is required to be maintained in accordance
with this Paragraph 10.4.2, shall be the deductible amount which is generally
commercially available for Earthquake Insurance Coverage with a premium not in
excess of $0.25 per square foot of Rentable Area of the Building per year (the
"MAXIMUM EARTHQUAKE PREMIUM").

                  (ii)     Tenant shall not be required to carry Earthquake
Insurance Coverage if (A) the premium payable for Earthquake Insurance Coverage
will exceed the Maximum Earthquake Premium, and (B) following notice by Tenant
to Landlord of such election not to carry such Earthquake Insurance Coverage
pursuant to Paragraph 10.4.2(ii) below, neither Tenant nor Landlord elects to
pay such excess in accordance with Paragraph 10.4.2(iii) below. If Earthquake
Insurance Coverage becomes unobtainable, regardless of the premium amount, or if
Tenant otherwise determines in good faith that Earthquake Insurance Coverage is
not available with coverage limits, deductibles, exclusions and other terms and
conditions that are commercially reasonable or otherwise reasonably acceptable
to Tenant, then Tenant shall have the right to allow Earthquake Insurance
Coverage to lapse upon expiration of the Earthquake Insurance Coverage then in
effect by providing Landlord written notice of such election at least fifteen
(15) days prior to the date such coverage will lapse. Landlord shall thereafter
have the right to maintain Earthquake Insurance Coverage (if obtainable) at
Landlord's expense, subject to reimbursement by Tenant of the premiums paid for
by Landlord in obtaining such Earthquake Insurance Coverage, but such
reimbursement obligation shall not exceed the Maximum Earthquake Premium.

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BIG 5 WAREHOUSE
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                  (iii)    If, at any time from the date Landlord delivers
possession of the Premises to Tenant in the Delivery Condition and continuing
thereafter throughout the Term, the premium for Earthquake Insurance Coverage
will exceed the Maximum Earthquake Premium, Tenant shall have the right, at its
option, to elect either to (A) pay the portion of the proposed premium for
Earthquake Insurance Coverage in excess of the Maximum Earthquake Premium, and
thereby maintain Earthquake Insurance Coverage in effect, or (B) elect not to
pay such excess and allow Earthquake Insurance Coverage for the Premises to
lapse. If Tenant has the right to make the election described in the immediately
preceding sentence, Tenant shall give written notice to Landlord (herein
"TENANT'S ELECTION NOTICE") of the action intended by Tenant at least fifteen
(15) days prior to the date such coverage will lapse. If, in Tenant's Election
Notice, Tenant informs Landlord that it has elected to allow Earthquake
Insurance Coverage to lapse, Landlord shall have the right, within ten (10) days
after receipt of Tenant's Election Notice, by giving written notice to Tenant,
to cause Tenant to maintain Earthquake Insurance Coverage in effect by agreeing
to pay to Tenant, without reimbursement from Tenant, the full amount of the
excess (which payment shall be made within ten (10) business days after invoice
for such excess is delivered by Tenant to Landlord). If Landlord fails to timely
pay such excess, Tenant shall nevertheless have the right to allow the
Earthquake Insurance Coverage to lapse.

                  10.4.3   Tenant and Landlord (and any mortgagee of Landlord
with a first mortgage or first deed of trust encumbering the Premises of whom
Landlord has notified Tenant in writing) shall be loss payees of the Property
Damage Insurance maintained pursuant to this Paragraph 10.4, as their respective
interests may appear; however, any and all proceeds of such Property Damage
Insurance shall be deposited into the Construction Escrow to be established by
the parties pursuant to Paragraph 9.1.3 above and shall be used to pay for the
costs of the repair and restoration of the Premises as provided by Paragraph 9.1
hereof. Notwithstanding the foregoing to the contrary, if this Lease is
terminated pursuant to the provisions of Article 9 above as a result of any such
damage or destruction, Tenant shall be entitled to receive and retain the
following insurance proceeds (collectively, the "TENANT'S TERMINATION INSURANCE
PROCEEDS"): (i) all insurance proceeds pertaining to any leasehold improvements
or alterations at the Premises made by Landlord or Tenant from Tenant's own
funds; and (ii) all insurance proceeds pertaining to any leasehold improvements
or alterations at the Premises made by Landlord or Tenant from the Tenant
Improvement Allowance, but only with respect to any termination of this Lease
pursuant to this Article 10 which occurs after the initial 10-year Term of this
Lease. If by reason of the provisions of any first mortgage or first deed of
trust executed by Landlord on the Premises, Property Damage Insurance proceeds
are required to be made payable to the lien holder, Tenant hereby consents
thereto, provided that the lien holder in question (A) shall first agree in
writing with Landlord and Tenant to make such proceeds available for the repair
and restoration of the Premises to the extent required pursuant to Paragraph 9.1
hereof, and (B) shall not have any interest in the Tenant's Termination
Insurance Proceeds, and Tenant shall not be required to cause Tenant's
Termination Insurance Proceeds to be delivered to such lien holder.

         10.5     Rent Loss Insurance. From the date Landlord delivers
possession of the Premises to Tenant in the Delivery Condition as provided in
Paragraph 1.1 hereof and throughout the Term of this Lease, Tenant shall, at
Tenant's expense, maintain in force rent loss insurance for the benefit of the
Landlord as loss payee covering loss of rental income under this Lease for a
period of twelve (12) months.

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         10.6     Waiver of Subrogation. Landlord and Tenant shall each procure
from each of the insurers under all policies of property damage insurance
obtained pursuant to the provisions of this Article 10, a waiver of all rights
of subrogation which said insurer might otherwise have, as against the other
party hereto, said waiver to be in writing and for the express benefit of the
other. Landlord and Tenant hereby release each other and waive any claim against
the other relating to losses or liabilities for which the releasing party is
obligated to obtain property damage insurance under the provisions of this
Article 10. For purposes of the preceding sentence, Landlord and Tenant shall
include the directors, officers and employees of each.

         10.7     General Insurance Requirements. Any and all insurance policies
obtained by either Landlord or Tenant pursuant to the provisions of this Article
10 shall be issued only by a responsible insurer, properly licensed in the State
of California, having a rating of not less than A-/VII in Best's Insurance
Guide. Each such insurance policy shall include an endorsement obligating the
insurer to give the party hereto not obtaining said insurance policy thirty (30)
days' prior written notice of any cancellation or change in scope or amount of
coverage of such insurance policy. Each party hereto shall cause to be issued to
the other party appropriate certificates of insurance evidencing compliance with
the terms of the provisions of this Article 10 relating to insurance; Tenant
shall provide Landlord with such certificates for Tenant's insurance at least
ten (10) business days prior to the date Landlord delivers possession of the
Premises to Tenant in the Delivery Condition.

         10.8     Blanket Policies. Notwithstanding anything in this Article 10
to the contrary, Tenant and Landlord may each insure for the amount of any
insurance required to be carried by it pursuant to this Article 10 under a
blanket and/or umbrella policy or policies covering other liabilities of the
insuring party and/or its subsidiaries, controlling or affiliated entities.

         10.9     Indemnities. Notwithstanding anything in this Article 10 to
the contrary:

                  10.9.1   Tenant shall indemnify, defend, protect and hold
harmless Landlord and Landlord's managers, members, partners, officers,
directors, agents and employees (collectively, "LANDLORD'S REPRESENTATIVES")
from and against any and all liabilities, losses, costs, expenses and claims,
including reasonable attorneys' fees, but specifically excluding lost profits
and other consequential damages (collectively, "CLAIMS") to the extent (i)
resulting from an incident (A) which occurs at the Premises from and after the
date Landlord delivers possession of the Premises, Ready for Occupancy, to
Tenant as provided in Paragraph 1.4 above, and which results in bodily injury,
death or property damage, or (B) which arises out of the negligence or willful
misconduct of Tenant and/or Tenant's employees, contractors, agents and/or
licensees, and (ii) not insured or required to be insured against by Landlord
under this Lease; provided however, the foregoing indemnity shall not include
any Claims to the extent resulting from the negligence or willful misconduct of
Landlord or any of Landlord's Representatives.

                  10.9.2   Landlord shall indemnify, defend, protect and hold
harmless Tenant and Tenant's managers, members, partners, officers, directors,
agents and employees (collectively, "TENANT'S REPRESENTATIVES") from and against
any and all Claims to the extent (i) resulting from an incident (A) which occurs
at the Premises at any time prior to the date Landlord delivers possession of
the Premises, Ready for Occupancy, to Tenant as provided in Paragraph 1.4 above
and which results in bodily injury, death or property damage or (B) which arises
out of the

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negligence or willful misconduct of Landlord and/or Landlord's employees,
contractors, agents and/or licensees, and (ii) not insured or required to be
insured against by Tenant under this Lease; provided however, the foregoing
indemnity shall not include any Claims to the extent resulting from the
negligence or willful misconduct of Tenant or any of Tenant's Representatives.

                  10.9.3   The foregoing mutual indemnities are intended to be
consistent with the waivers as set forth in Paragraph 10.6 above, pursuant to
which each party (i) has waived its respective rights against the other party to
the extent any losses, damages or other Claims are insured or required to be
insured under property damage policies by such party pursuant to the provisions
of this Lease, and (ii) has agreed to cause such party's respective insurance
carrier to include a waiver of subrogation in their respective property damage
insurance policies. In addition, the foregoing indemnities, and the waivers set
forth in Paragraph 10.6 above, are not intended to and shall not relieve any
insurance carrier of its obligations to provide insurance coverage pursuant to
insurance policies obtained pursuant to the provisions of this Lease.

                  10.9.4   In the event any action or proceeding is brought
against Landlord or any of Landlord's Representatives and such claim is a claim
from which Tenant is obligated to indemnify Landlord or Landlord's
Representatives pursuant to this Paragraph, Tenant, upon notice from Landlord,
shall resist and defend such action or proceeding (in the case of a lawsuit, by
legal counsel reasonably satisfactory to Landlord). In the event any action or
proceeding is brought against Tenant or any of Tenant's Representatives and such
claim is a claim from which Landlord is obligated to indemnify Tenant or
Tenant's Representatives pursuant to this Paragraph, Landlord, upon notice from
Tenant, shall resist and defend such action or proceeding (in the case of a
lawsuit, by legal counsel reasonably satisfactory to Tenant).

                  10.9.5   Notwithstanding anything in this Lease, including
without limitation this Paragraph 10.9 or Articles 17 or 18 below, to the
contrary, the terms of this Lease shall not impose any obligation on either
party to be responsible or liable for the other party's lost profits or other
consequential damages. Landlord and Tenant agree that Landlord's right to
recover future rent under California Civil Code Section 1951.2 upon a
termination of this Lease following a default by Tenant pursuant to Paragraph
17.1 below shall not be deemed consequential damages or lost profits for
purposes of this Paragraph 10.9.5.

                  10.9.6   The obligations of the parties under this Paragraph
10.9 shall survive termination of this Lease.

ARTICLE 11: ASSIGNMENT AND SUBLETTING.

         11.1     Tenant's Right to Assign or Sublet. Subject to Paragraphs 11.2
and 11.3 below, Tenant shall have the right, with Landlord's prior written
consent, which consent shall not be unreasonably withheld or conditioned, to
assign this Lease or sublet the Premises or any part thereof. If Tenant desires
to assign this Lease or sublet the Premises or any part thereof other than
pursuant to Paragraphs 11.2 or 11.3 below, Tenant shall notify Landlord of such
proposed assignment or sublease specifying the identity of the proposed assignee
or subtenant and the material terms of the proposed assignment or sublease
(which material terms may be evidenced by a letter of intent, correspondence
between the parties or other means designated by Tenant);

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Landlord shall have a period of twenty (20) days following receipt of such
notice to notify Tenant of Landlord's approval of the proposed assignment or
sublease, or reasonable disapproval (with the reasons for such disapproval
specified in detail). If Landlord fails to notify Tenant in writing of the
approval or reasonable disapproval within such twenty (20) day period, Landlord
shall be deemed to have consented to such proposed assignment or sublease.

         11.2     Consent to Partial Subletting. Notwithstanding anything in
this Article 11 to the contrary, Landlord hereby agrees that Tenant may, at any
time and from time to time without having to obtain Landlord's prior consent,
sublet up to an aggregate of fifty percent (50%) of the Building and Premises,
whenever in the opinion of Tenant it shall be advisable to sublet any such
portions of the Building and Premises.

         11.3     Consent to Transfers to Tenant Affiliates. Notwithstanding
anything in this Article 11 to the contrary, Landlord hereby agrees that Tenant
may, at any time and from time to time without having to obtain Landlord's prior
consent, assign, sublet or transfer this Lease or the Premises or any part
thereof to any entity which owns or controls Tenant, to any entity owned or
controlled by Tenant, to any entity owned or controlled by or affiliated with
any entity which owns or controls Tenant, or to any entity resulting from a
consolidation, or to the surviving entity in case of a merger, to which
consolidation or merger Tenant shall be a party, or to an entity to which all or
substantially all of the assets of Tenant have been sold. In addition, Landlord
hereby agrees that any transfer or series of transfers of stock or other
ownership interests in Tenant whether or not resulting in a change in the
controlling interest in Tenant and whether voluntarily, by operation of law or
otherwise, shall not be deemed an assignment, subletting or other transfer of
Tenant's interest in this Lease or the Premises and thus shall not be subject to
the requirement that Tenant notify Landlord thereof or obtain Landlord's prior
consent thereto.

         11.4     No Release. No such assignment, subletting or transfer of this
Lease by Tenant pursuant to the foregoing provisions of this Article 11 shall
release Tenant from Tenant's obligations under this Lease.

ARTICLE 12: EMINENT DOMAIN.

         12.1     Total Taking. In the event of a "TOTAL TAKING", defined as
when the entire Premises or the entire Building is taken or appropriated under
the power of eminent domain, this Lease shall terminate as of the date of the
taking of physical possession of the Premises or Building (as the case may be),
and each party shall be released from any liability accruing thereafter under
this Lease (but shall not be released from any liability accruing prior to such
termination).

         12.2     Partial Taking.

                  12.2.1 In the event that through such eminent domain
proceedings there is a "PARTIAL TAKING", defined as when only a portion or
portions of the Building or Premises is taken, and Tenant in good faith
determines that such taking may have a material adverse effect on its ability to
conduct its business in the Premises, Tenant shall have the option (exercisable
by written notice to Landlord at any time within sixty (60) days after the
taking of physical possession under any such proceeding) to terminate this Lease
effective as of the later of (i) the

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termination date set forth in Tenant's termination notice, which shall be no
later than the ninetieth (90th) day following such notice, or (ii) the day
before the date of the taking of physical possession of such portion(s) of the
Premises. Upon any such termination, each party shall be released from any
liability accruing thereafter under this Lease (but shall not be released from
any liability accruing prior to such termination). Except as provided in this
Article 12, such Partial Taking shall not be a basis to terminate this Lease,
notwithstanding any Applicable Laws of the State of California to the contrary.

                  12.2.2 Notwithstanding the foregoing provisions of Paragraph
12.2.1 to the contrary, in the event Landlord disputes that such taking would
have a material adverse effect on Tenant's ability to conduct its business at
the Premises and thus disputes the effectiveness of Tenant's exercise of its
right to terminate this Lease pursuant to Paragraph 12.2.1 above, then the
parties agree to resolve the dispute as provided in this Paragraph 12.2.2. Prior
to submitting any such dispute to JAMS arbitration (as provided below), Landlord
and Tenant agree that they shall meet and use good faith efforts, for a period
of fifteen (15) days, to attempt to resolve such dispute. If the parties fail to
resolve such dispute within said 15-day period, the parties agree to submit the
question to binding arbitration by the Judicial Arbitration and Mediation
Services ("JAMS") in Riverside County, California, in accordance with the
Comprehensive Arbitration Rules of JAMS, or the Streamlined Arbitration Rules of
JAMS if mutually agreed to by both parties hereunder. The parties agree to
cooperate with JAMS and with one another in selecting from JAMS' panel of
arbitrators (selecting, if available, an arbitrator experienced in commercial
real estate matters in Riverside County, California) and in scheduling the
arbitration proceedings. If the parties are unable to agree upon an arbitrator,
such arbitrator shall be appointed by JAMS. The party requesting arbitration
shall be responsible for completing and sending to the JAMS' office for
Riverside County, California, such forms as JAMS may require to commence such
arbitration proceedings. Each party shall initially advance one-half (1/2) of
JAMS' and the arbitrator's fees, and each party shall bear its own attorneys'
fees if it chooses to be represented by an attorney in the arbitration. The
arbitrator shall award to the prevailing party in the arbitration the fees it
paid to JAMS and the arbitrator, together with reasonable attorneys' fees, which
award will be payable by the other party within thirty (30) days after the
arbitrator mails his or her decision. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. If JAMS is
not available in Riverside County, the parties shall use JAMS in Orange County.
If JAMS is not available in either Riverside or Orange Counties, the parties
shall use the arbitration and mediation services provided by the American
Arbitration Association ("AAA"). If JAMS and AAA are not available or no longer
in existence, then the parties agree to use good faith efforts to select an
alternative arbitration and mediation service, and the procedures set forth
above shall apply to such substitute service.

         12.3     Condemnation Award. Landlord shall be entitled to all damages
or compensation awarded in any eminent domain proceeding relating to its fee
simple interest in the Premises and Improvements paid for by Landlord at
Landlord's expense. Tenant shall be entitled to all damages, compensation and
proceeds awarded in any eminent domain proceeding that comprise Tenant's Eminent
Domain TI Proceeds (as defined below) and/or pertain to Tenant's leasehold
interest, loss of goodwill, relocation expenses, loss of business, business
interruption, loss and/or removal of Tenant's trade fixtures, furniture,
equipment and other personal property. For purposes hereof, "TENANT'S EMINENT
DOMAIN TI PROCEEDS" shall mean all damages, compensation and proceeds awarded in
any eminent domain proceeding for or pertaining to loss

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and/or removal of leasehold improvements and alterations at the Premises made by
Tenant or Landlord from (i) the Tenant Improvement Allowance (but not with
respect to any eminent domain proceeding which results in a termination of this
Lease prior to the end of the initial 10-year Term of this Lease), and/or (ii)
Tenant's own funds.

         12.4     Landlord's Duty to Restore. In the event that there is a
taking and this Lease is not terminated pursuant to this Article 12, Landlord
shall, at its own expense (but only to the extent Landlord has received
condemnation proceeds therefor), repair and restore the Improvements and the
other portions of the Premises, including the fixtures, systems and equipment
owned by Landlord and all leasehold improvements and alterations within the
Improvements, to (i) a condition suitable for Tenant's use as close to their
original condition as possible, and (ii) as reasonably necessary to ensure that
the Premises continue to operate in accordance with all Applicable Laws and with
the standards prevailing from time to time for comparable
warehouse/distributions facilities in the vicinity of the Premises.

         12.5     Restoration Requirements. All repair and restoration of the
Premises to be made by Landlord pursuant to Paragraph 12.4 hereof shall be made
in accordance with plans and specifications approved by Tenant. Landlord shall
comply, and shall require all its contractors to comply, with all Applicable
Laws relating to conditions of employment in making such repairs and
restoration. In the event that there is a taking and this Lease is not
terminated pursuant to this Article 12, any and all proceeds owing to Landlord
resulting from any eminent domain proceedings based on such taking shall be
deposited into a mutually acceptable joint Construction Escrow to be established
by Landlord and Tenant in the same manner as provided in Paragraph 9.1.3 above,
and used to pay for the costs of such repairs and restoration. Notwithstanding
the foregoing, if by reason of the provisions of any such mortgage or deed of
trust executed by Landlord on the Premises, any such eminent domain proceeds are
required to be made payable to the lien holder, Tenant hereby consents thereto,
provided that the lien holder in question (i) shall first agree in writing with
Landlord to make said proceeds available for such repair and restoration to the
extent required pursuant to this Article 12, and (ii) shall not have any
interest in the Tenant's Eminent Domain TI Proceeds, and Tenant shall be
entitled to retain any such proceeds.

         12.6     Abatement and Adjustment of Rent. In the event that there is a
taking and this Lease is not terminated pursuant to this Article 12, in addition
to any right Tenant may have to abate Fixed Rent and Real Property Taxes
pursuant to Paragraph 2.2 hereof, a reduction of the annual Fixed Rent and Real
Property Taxes payable under Paragraphs 2.1 and 6.1 hereof shall be made as
follows: (i) if a portion of the Building is taken, the annual Fixed Rent and
Real Property Taxes shall be reduced by the ratio of the total Rentable Area
taken to the total Rentable Area of the Building; and (ii) if a portion of the
parking, landscaping and other areas of the Premises located outside the
Building is taken, an equitable reduction in the Fixed Rent and Real Property
Taxes shall be made, based on the amount taken and proximity of the portion
taken to the Building and the adverse effect on Tenant's business in the
Premises.

         12.7     Definition of Taking. A "TAKING OR APPROPRIATION", as used in
this Article 12, shall be deemed to include one or more takings or
appropriations, and the cumulative effect of more than one such taking or
appropriation shall be construed as one taking or appropriation.

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Appropriation or taking by eminent domain as used herein shall also include a
conveyance made as a settlement to an existing or threatened eminent domain
proceeding.

         12.8     Conflict with Article 8. Where the provisions of this Article
12 are in conflict with the Applicable Laws of the State of California, or with
the provisions of Article 8 hereof, the provisions of this Article 12 shall
apply.

ARTICLE 13: ATTORNEYS' FEES.

         In the event either party hereto commences legal proceedings to enforce
any of the terms of this Lease, or for damages resulting from a breach of this
Lease, the successful party in such action shall receive from the other party,
in each such action, including any appeal taken thereof, its reasonable
attorneys' fees and costs incurred. Whenever one party is obligated to indemnify
the other party under the terms of this Lease, said duty to indemnify shall
include the duty to defend the other party and to pay for all reasonable
attorneys' fees, costs and disbursements related to said defense. The term
attorneys' fees as used in this Article 13 shall include the fair market value
of Landlord's and Tenant's in-house counsel's services.

ARTICLE 14: PERMITS AND LICENSES.

         Landlord hereby covenants and agrees to fully and promptly cooperate
with Tenant, at no cost to Landlord, in Tenant's efforts (which shall be at
Tenant's sole cost and expense) to apply for and secure any building permit,
signage variances and/or permission of any duly constituted authority for the
purpose of doing any of the things which Tenant is required or permitted to do
under the provisions of this Lease, and Landlord shall indemnify Tenant for any
loss, cost or damage (excluding lost profits or other consequential damages)
suffered by Tenant as a result of Landlord's failure to so cooperate.

ARTICLE 15: EXTENSION OF TERM.

         15.1     Tenant's Right to Extend Lease Term. Tenant shall have the
right to extend the Term of this Lease upon the same terms, covenants, and
conditions as herein contained, and at the Fixed Rent rate herein reserved in
Paragraph 2.1.3 above, for three (3) additional consecutive periods of five (5)
years each (each an "OPTION PERIOD" and collectively the "OPTION PERIODS") from
and after the Expiration Date hereof, by giving Landlord notice at least six (6)
months prior to the Expiration Date, and prior to each such extended expiration
date (as the case may be), notifying Landlord of Tenant's election to so extend
the Term; provided, however, in the event that Tenant fails to give such notice
of extension, Tenant shall not be deemed to have waived the right to that
extension or any extension thereafter until Landlord gives Tenant written notice
of Tenant's failure to exercise such right of extension and affords Tenant a
period of thirty (30) days after receipt of such notice to exercise that right
of extension by giving Landlord notice thereof. Wherever there is a reference in
this Lease to the Term of this Lease, or to the expiration of this Lease, such
references shall be construed to include any extension of the Term of this
Lease. Notwithstanding the foregoing to the contrary, Tenant shall not have the
right to extend the Term for the applicable Option Period if at the time Tenant
delivers to Landlord Tenant's exercise notice, Tenant is then in monetary or
material non-monetary default under the Lease after expiration of all applicable
notice and cure periods.

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         15.2     Interference Period. Whenever Tenant shall be prevented in
whole or in part from the free, uninterrupted, and unimpeded enjoyment of the
use of the Premises and the fixtures therein by reason of default of Landlord,
or by reason of Landlord's making any repairs, alterations, extensions or
additions to the Premises, or the fixtures therein, or by reason of any casualty
event or eminent domain proceedings, and such prevention or disturbance lasts
for a period in excess of ninety (90) days, then, and in each and all of such
cases, Tenant shall have the right of extension, as hereinafter defined, which
right shall be cumulative and additional to any other rights given in such cases
by this Lease or Applicable Laws. Said right of extension shall give Tenant the
option (to be exercised at least ninety (90) days before the conclusion of the
Term) to add any such period or periods of loss of such enjoyment, or the
aggregate of all such periods, to the Term of this Lease.

ARTICLE 16: SUBORDINATION.

         16.1     Permitted Deed of Trust. In the event Landlord acquires fee
simple title to the Land with acquisition and/or construction financing secured
by a Permitted Deed of Trust (as defined in Paragraph 3.1 above), then
concurrently upon the closing of such acquisition, Landlord shall deliver to
Tenant a subordination, nondisturbance and attornment agreement ("SNDA")
executed by Landlord and the holder of such Permitted Deed of Trust in the form
attached hereto as Exhibit E, with any reasonable modifications thereto which do
not increase any of Tenant's obligations or diminish or impair any of Tenant's
rights under this Lease as shall be reasonably required by the holder of such
Permitted Deed of Trust and reasonably approved by Tenant. If Landlord fails to
deliver the executed SNDA to Tenant concurrently upon such closing, Tenant may,
at its option, in addition to its other remedies under this Lease: (i) terminate
this Lease effective upon the date written termination notice is delivered to
Landlord, which termination notice may be delivered at any time prior to the
date such executed SNDA is delivered to Tenant, in which event the provisions of
Paragraph 1.5.5 above shall apply; or (ii) defer the payment of any and all
rental due under this Lease until such executed SNDA is delivered to Tenant.
During such period of deferral, said rental shall accrue without interest.
Tenant shall pay such accrued rent in full to Landlord within forty-five (45)
days after Tenant's receipt of such executed SNDA in recordable form.

         16.2     Future Deeds of Trust. Tenant covenants that it will execute
an agreement subordinating this Lease to any first priority deed of trust
subsequently placed upon the Premises after Landlord's acquisition of fee simple
title to the Land in the form attached hereto as Exhibit E, with any reasonable
modifications thereto which do not increase any of Tenant's obligations or
diminish or impair any of Tenant's rights under this Lease as shall be
reasonably required by the holder of such deed of trust and reasonably approved
by Tenant. Tenant agrees to execute and deliver such agreement to Landlord
within twenty (20) days after such agreement is delivered by Landlord to Tenant
in the form (and with such modifications) as approved by Tenant in accordance
with the foregoing provisions of this Paragraph 16.2.

         16.3     Landlord's Waiver. Landlord hereby waives and releases any
lien or claim of lien, statutory or otherwise, which Landlord may be entitled to
assert under Applicable Laws upon or against any inventory, fixtures, furniture,
equipment and other personal property of Tenant situated at the Premises.
Landlord covenants that concurrently upon Landlord's execution of this Lease
and/or subsequent to the execution of this Lease at Tenant's request,

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Landlord will execute an agreement setting forth certain information regarding
this Lease, as well as acknowledging certain rights of Tenant and any lender of
Tenant, in the form attached hereto as Exhibit F. In addition, Landlord agrees
to execute any other document reasonably requested from time to time by Tenant
and/or any lender, supplier, vendor, lessor or other lienholder in connection
with Tenant's inventory, trade fixtures, furniture, equipment or other personal
property, pursuant to which Landlord expressly waives any lien Landlord might
otherwise have or acquire upon such property.

ARTICLE 17: TENANT'S DEFAULTS.

         17.1     Monetary Defaults. Should Tenant fail to make any payment of
rent required to be paid by Tenant to Landlord hereunder as and when due under
this Lease, and such failure shall continue for five (5) business days after
Tenant's receipt of written notice thereof from Landlord specifying in detail
such failure, then Tenant shall be in default under this Lease and Landlord may,
at its option, in addition to any other remedies provided for such default under
Applicable Laws (but subject to the provisions of Paragraph 10.9.5 above),
terminate and cancel this Lease, and re-enter and take possession of the
Premises, remove Tenant's property therefrom, and dispose of the same in the
manner provided by Applicable Laws. Said five (5) business day notice from
Landlord to Tenant shall be in addition to, and not in lieu of, any statutory
notice for eviction or foreclosure proceedings required under the Applicable
Laws of the State of California (including, without limitation, the provisions
of California Code of Civil Procedure Section 1161 regarding unlawful detainer
actions or any successor statute or law of a similar nature); provided, however,
if Tenant is in default in the payment of rent more than two (2) times in any
12-month period, for the third (3rd) and any subsequent default in such 12-month
period, such five (5) business day notice shall be in lieu of any such statutory
notice for eviction or foreclosure proceedings. Upon such termination, Landlord
may recover from Tenant:

                  (i)      the worth at the time of award of the unpaid rent
which had been earned at the time of termination;

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

                  (iii)    the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and

                  (iv)     any other amount necessary to compensate Landlord for
all the expenses and 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 "worth at the time of award" of the amounts referred to in items (i) and
(ii) above is computed by allowing interest at the Interest Rate (defined in
Paragraph 6.4 above). The "worth at the time of award" of the amount referred to
in item (iii) 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%). Except as otherwise herein provided, no entry into the Premises or

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any other action by Landlord shall be construed as an election to terminate this
Lease unless written notice of such intention is given to Tenant, or unless
termination thereof is decreed by a court of competent jurisdiction.

                  17.1.1 In the event this Lease is terminated as provided in
this Paragraph 17.1, Tenant shall promptly remove all personal property to which
it has the right to possession. All property of Tenant not removed by Tenant
within ten (10) business days after Tenant's receipt of notice of a final
adjudication that the Lease has been terminated shall be disposed of by Landlord
in the manner provided by Applicable Laws.

                  17.1.2 Landlord shall also have the remedy described in
California Civil Code Section 1951.4 (which provides that lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject only to
reasonable limitations). Accordingly, if Landlord does not elect to terminate
this Lease on account of any default by Tenant, Landlord may, from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due (in
accordance with California Civil Code Section 1951.4).

         17.2     Non-Monetary Defaults. If Tenant shall be in default in the
performance of any obligation under this Lease other than in the payment of
rent, and if Tenant shall fail to cure such default within thirty (30) days of
receipt of notice from Landlord, specifying in detail the nature of such
default, or in case the default is of such a character as to reasonably require
more than thirty (30) days to cure, then if Tenant shall fail to use reasonable
diligence in curing or attempting to cure such default, then Landlord may cure
such default for the account of and at the cost and expense of Tenant. The sum
so expended by Landlord shall be deemed to be additional rent if Tenant fails to
pay to Landlord the sum so expended within thirty (30) days after Tenant's
receipt of notice of a final adjudication that such amount is owing to Landlord,
including interest at the Interest Rate from the date of expenditure by Landlord
until paid.

                  17.2.1 In addition to the foregoing, if Tenant shall be in
material default in the performance of any non-monetary obligation under this
Lease which cannot be cured by Landlord by the payment of money or the exercise
of Landlord's self-help rights as set forth in Paragraph 17.2 above, and if
Tenant shall fail to cure such default within the time periods set forth in
Paragraph 17.2 above, Landlord shall be entitled to exercise all rights and
remedies set forth in Paragraph 17.1 above. In no event shall any such default,
other than the failure to pay rent, be the basis of a forfeiture of this Lease
or otherwise result in the eviction of Tenant or the termination of this Lease,
unless and except to the extent specifically and expressly permitted under this
Paragraph 17.2.

                  17.2.2 In addition to Landlord's right to cure such
non-monetary default and recover the amount so expended in curing such
non-monetary default, Landlord shall have the right to injunctive relief and/or
recover damages (subject, however, to the limitations in Paragraph 10.9.5 above)
for Tenant's default of any such obligation, covenant or agreement.

         17.3     Bankruptcy. In the event of the commencement of voluntary or
involuntary proceedings by or against Tenant under the United States Bankruptcy
Code, which proceedings are not dismissed within ninety (90) days after the same
are filed, then subject to and limited by

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the provisions of the United States Bankruptcy Code, as amended, including any
subsequent amendments thereto, Tenant shall be deemed to be in default under
this Lease and Landlord shall be entitled to exercise all rights and remedies
set forth in Paragraph 17.1 above.

         17.4     Landlord's Remedies Cumulative. Any right or remedy Landlord
may have under this Paragraph 17 arising out of Tenant's uncured default under
this Lease shall be in addition to any other right or remedy for such uncured
default provided for by Applicable Law and/or in equity (subject, however, to
the limitations in Paragraphs 10.9.5 and 17.2.1 above), including, without
limitation, the right to recover damages as a result thereof.

ARTICLE 18: LANDLORD'S DEFAULTS.

         18.1     Tenant's Right to Cure. If Landlord (i) fails to pay any
installment of taxes or assessments or any interest, principal, costs or other
charges upon any lien or encumbrance affecting the Premises when any of the same
becomes due and such failure to pay could or would result in (A) a termination
of this Lease, (B) loss of quiet enjoyment of the Premises, (C) impairment or
loss of any of Tenant's rights under this Lease, or (D) increase in any of
Tenant's obligations under this Lease, or (ii) fails to pay any other monetary
amounts required to be paid by Landlord under this Lease (including, without
limitation, payments of any costs and/or the Tenant Improvement Allowance
pursuant to Exhibit C) when any of the same becomes due, or (iii) fails to
perform Landlord's Maintenance Obligations or make any other repairs or do any
other work required of Landlord by the provisions of this Lease, or (iv) in any
other respect fails to perform any other obligation under this Lease to be
performed by Landlord (including, without limitation, any obligation under
Exhibit C), then Landlord shall be in default under this Lease, and Tenant may
(but this shall not be deemed to impose an obligation upon Tenant to do so), in
addition to any other rights provided under this Lease, at law and/or in equity
(but subject to the provisions of Paragraph 10.9.5 above) as a result of any
such default:

                  (1)      recover from Landlord any and all damages resulting
         therefrom; and/or

                  (2)      at the expense of Landlord, pay such charges and/or
         cure such defaults on behalf of Landlord and/or do all necessary work
         and make all necessary payments in connection therewith.

Notwithstanding the foregoing, no right or remedy of Tenant shall be exercised
unless Landlord fails to cure such default within fifteen (15) business days
(with respect to monetary defaults) and thirty (30) days (with respect to
non-monetary defaults) after receipt of notice from Tenant specifying in detail
the nature of such default; provided, however, that with respect to non-monetary
defaults only, if such non-monetary default is of such nature as cannot be cured
within said 30-day period, Landlord shall not be deemed in default hereunder if,
and so long as, Landlord commences to cure such default within said 30-day
period and proceeds diligently and continuously to complete the cure of such
default within such reasonable additional time as is necessary to cure such
default; provided, further, however, that if a failure by Landlord to perform or
observe any term of this Lease gives rise to circumstances or conditions which
constitute an emergency threatening human health or safety or substantial damage
to the Premises or Tenant's personal property, or materially impeding the
conduct of the business of Tenant at the Premises, Tenant shall be entitled to
take immediate curative action (prior to the

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expiration of any notice and cure period set forth above) to the extent
reasonably necessary to eliminate the emergency. Landlord shall pay to Tenant,
within ten (10) business days after demand, the amount so paid by Tenant in the
exercise of any such rights and remedies, together with interest thereon from
the date of such expenditure at the Interest Rate. However, if Landlord desires
to contest the validity or correctness of any lien or encumbrance described in
clause (i) hereinabove, it may do so, provided that if such lien or encumbrance
could or would result in any of the events described in clauses (A) through (D)
set forth in clause (i) hereinabove, Landlord shall first furnish Tenant with a
good and sufficient bond indemnifying Tenant against any loss, liability or
damage (excluding lost profits and consequential damages) on account thereof.

         18.2     Tenant's Right to Offset. If Landlord shall fail to pay to
Tenant the amount of such expenditures and interest within fifteen (15) business
days of written demand from Tenant to do so, in addition to any other rights
provided under this Lease, at law and/or in equity, Tenant may deduct the amount
of such expenditures and interest from any and all rental payments and other
payments thereafter becoming due to Landlord hereunder. In no event shall such
deduction by Tenant pursuant to the foregoing provisions of this Paragraph 18.2
be the basis of forfeiture of this Lease or constitute a default by Tenant in
the payment of rent unless Tenant shall fail to pay the amount of such deduction
within thirty (30) days after Tenant's receipt of notice of a final adjudication
that such amount is owing to Landlord. Nothing herein contained shall preclude
Tenant from proceeding to collect any amount paid by it pursuant to Paragraph
18.1 without waiting for rental offsets to accrue.

         18.3     Tenant's Rights Cumulative. Any right or remedy Tenant may
have under this Lease arising out of Landlord's breach of any representation,
warranty or covenant of this Lease shall be in addition to any other right or
remedy for such breach provided for by Applicable Law and/or in equity (subject,
however, to the limitations in Paragraph 10.9.5 above), including, without
limitation, the right to recover damages as a result thereof. The terms,
conditions and provisions of this Article 18 are in all respects subject and
subordinate to Landlord's covenant of quiet enjoyment to Tenant set forth in
Article 3 of this Lease, and the parties agree that the rights and remedies set
forth in this Article 18 are not intended to nullify, impair or negate in any
manner or to any extent the covenant of quiet enjoyment, and Landlord
acknowledges and agrees that in the event of conflict between Article 18 or any
other provision of this Lease, the covenant of quiet enjoyment shall control.

ARTICLE 19: NOTICES.

         19.1     Manner of Delivery. Any notices, demands, and the like, which
are required to be given hereunder or which either party hereto may desire to
give to the other shall be given in writing by (i) mailing the same by certified
or registered United States mail, return receipt requested, postage prepaid, or
(ii) sending the same by Federal Express or other comparable overnight express
courier service (with proof of receipt available), addressed to Landlord at the
address for notices shown in Paragraph 20.15 hereof, or to Tenant, at 2525 East
El Segundo Boulevard, El Segundo, California 90245, attention of the President
or Secretary of Tenant, or to such other addresses as the respective parties may
from time to time designate by notice given as provided in this Lease. Notices
shall be deemed effective upon receipt or refusal to accept receipt (as
evidenced by supporting documentation).

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         19.2     Statutory Service. Any notice served on Tenant pursuant to any
statutory procedure related to forfeiture or eviction proceedings under the
Applicable Laws of the State of California shall be served on Tenant's
authorized agent for service of process under such Applicable Laws, or the
President or Secretary of Tenant at the address specified in Paragraph 19.1
hereof. Wherever there is a conflict between the provisions of this Paragraph
19.2 and any such statutory procedure, the provisions of this Paragraph 19.2
shall prevail.

         19.3     Landlord Entity. If Landlord is a partnership, corporation or
limited liability company, Tenant may act on any notice given by any officer or
agent (which has been designated in writing by Landlord) of such corporation, or
of any general partner or agent (which has been designated in writing by
Landlord) of such partnership, or of any managing member or agent (which has
been designated in writing by Landlord) of such limited liability company.

ARTICLE 20: MISCELLANEOUS PROVISIONS.

         20.1     Effect of Words; Gender; Singular; Plural. Whenever in this
Lease any words of obligation or duty regarding either of the parties are used,
such words shall have the same force and effect as though in the express form of
covenants. Whenever appropriate from the context, the use of any gender shall
include any other or all genders, and the singular number shall include the
plural, and the plural shall include the singular.

         20.2     Memorandum of Lease; Recording Fees. Concurrently with the
execution of this Lease, the parties shall execute and acknowledge three (3)
originals of a memorandum of lease in the form of Exhibit G attached hereto and
incorporated herein by this reference (the "MEMORANDUM OF LEASE"). Each party
shall retain one (1) executed original of the Memorandum of Lease and deliver
the third (3rd) executed original to the escrow holder of the escrow for
Landlord's acquisition of the Larger Parcel (including the Land). Landlord shall
cause such escrow holder to record the Memorandum of Lease (or as described in
Recital B above, such modified version in substitution thereof to be executed by
the parties and delivered to such escrow holder if the Subdivision occurs
concurrently with the Land Acquisition, rather than after the Land Acquisition
as currently contemplated by the parties) in the Official Records upon the
closing date of Landlord's acquisition of fee simple title to the Larger Parcel
(including the Land), as described in Paragraph 3.3(i) above. If required by the
county recorder's office, or such escrow holder or title company in connection
with the recordation of the Memorandum of Lease, Landlord and Tenant shall
update the date of, execute and acknowledge the Memorandum of Lease prior to
recording same. If the Subdivision occurs after the Land Acquisition, the
parties shall execute and acknowledge the Memorandum of Lease Amendment and
cause the same to be recorded in the Official Records immediately after
recordation of the final parcel map subdividing the Land from the Larger Parcel.
Prior to attaching any legal description of the Land to the Memorandum of Lease
or Memorandum of Lease Amendment, Tenant shall approve same for accuracy. This
Lease, the Memorandum of Lease (or modified version thereof, as the case may be)
and the Memorandum of Lease Amendment (if applicable) shall be construed
together as one instrument. Neither party shall record this Lease or permit the
same to be recorded without the written consent of the other party. Tenant
agrees to pay all recording fees due for bringing about the recording of the
Memorandum of Lease and Memorandum of Lease Amendment (if applicable).

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         20.3     No Waiver of Subsequent Breaches. No waiver of any breach of
any of the covenants, agreements or provisions contained herein shall be
construed as a waiver of any subsequent breach of the same or any other
covenant, agreement or provision. No payment of rent or other charges payable
hereunder by Tenant shall be construed as a waiver by Tenant of any breach by
Landlord under this Lease.

         20.4     Successors and Assigns. This Lease binds, applies to and
inures to the benefit of, as the case may require, the heirs, executors,
administrators, successors and assigns of Landlord and the successors and
assigns of Tenant.

         20.5     Conflicting Claims to Money Payable by Tenant. Tenant may make
any payment or give any notice to Landlord, despite any succession or
assignments, and be protected in so doing, until it has received written notice
to do otherwise from Landlord, or, in case of Landlord's death if Landlord is a
natural person, from the executor or administrator, together with a certified
copy of letters testamentary or letters of administration. If there are
conflicting claims to money payable by Tenant under this Lease, Tenant may
discharge its obligation to pay such amounts by depositing such money in trust
with the holder of any first mortgage or first deed of trust on the Premises of
whom Tenant has received written notice and in all other events in any bank or
trust company designated from time to time in writing by Landlord (provided such
designation is given prior to receipt by Tenant of conflicting claims), and if
no such designation is given, then in any bank or trust company in the county in
which the Premises are located, to be distributed pursuant to court order;
provided, however, Tenant need not recognize any such adverse claims, and may
pay the money directly to Landlord. All sums payable hereunder by either party
to the other are payable in lawful money of the United States of America.

         20.6     Table of Contents; Headings. The table of contents and the
captions heading the various articles of this Lease are for convenience and
identification only, and shall not be deemed to expand, limit or define the
contents of their respective paragraphs.

         20.7     Brokers' Commissions. Each party hereby represents and
warrants to the other that it has not caused or incurred any claims for
brokerage commissions or finder's fees in connection with the execution and
delivery of this Lease, the Memorandum of Lease and the Memorandum of Lease
Amendment (if applicable), other than to Charles Ogburn of Ogburn & Associates
(representing Tenant) and CB Richard Ellis, Inc. (representing Landlord)
(collectively, the "BROKERS"), the payment of which shall be the sole
responsibility of Landlord, which payment shall be made in accordance with the
terms of a separate listing agreement made by and among Landlord and the
Brokers. Each party shall indemnify and hold harmless the other from and against
any other claims for commissions or finder's fees caused by the party whose
actions or alleged commitments form the basis of such claim.

         20.8     Approvals. Whenever the approval of Landlord or Tenant is
required hereunder, such approval shall be in writing and be given pursuant to
Article 19 hereof. Such approval shall not be unreasonably withheld, conditioned
or delayed (unless another standard for approval is specifically provided for in
this Lease with respect to a particular matter, which specific approval standard
shall control).

                                      -45-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

         20.9     Amendments to Lease. This Lease, the Memorandum of Lease and
the Memorandum of Lease Amendment (if applicable), taken together, comprise the
entire agreement between the parties hereto. There shall be no amendments to
this Lease except by written agreement between the parties.

         20.10    Severability of Provisions; Governing Law. In the event that
any provision of this Lease shall be held invalid or unenforceable, such
provision shall be severable from, and such invalidity or unenforceability shall
not be construed to have any effect on, the remaining provisions of this Lease.
This Lease shall be construed and interpreted in accordance with the laws of the
State of California.

         20.11    Lease Freely Negotiated. This Lease was freely and voluntarily
negotiated between the parties and shall not be construed against one or the
other party.

         20.12    Time of the Essence. Time is of the essence hereof.

         20.13    Counterparts. This Lease may be executed in multiple
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same agreement. 20.14 Mutual Warranty of
Authority. Landlord warrants to Tenant that Landlord is a validly existing
limited liability company under the laws of the State of California and that it
is duly qualified to do business in the State of California, that its entry into
and performance of this Lease has been duly authorized, and that each of the
parties executing this Lease on its behalf is authorized to do so. Tenant
warrants to Landlord that Tenant is a validly existing corporation under the
laws of the State of Delaware and that it is duly qualified to do business in
the State of California, that its entry into and performance of this Lease has
been duly authorized, and that the officers executing this Lease on its behalf
are duly authorized to do so.

         20.15    Payments of Rent; Notices.

                  Payments of rent to Landlord are to be made to:

                  Panattoni Development Company, LLC
                  8401 Jackson Road
                  Sacramento, California 95876
                  Attention: Accounting Department

                  Notices to Landlord are to be sent to:

                  Panattoni Development Company, LLC
                  19660 Fairchild Road
                  Irvine, California 92612
                  Attention: Steven Palmer

or to such other person or entity and at such other place as shall be designated
by Landlord in writing by notice as provided in Article 19 of this Lease (and in
the case of rent payments, at

                                      -46-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

least thirty (30) days prior to the next ensuing rental payment due date).
Landlord's Tax I.D. number is 68-0423919.

         20.16    Minimization of Interference. Without limiting any other
provision in this Lease, Landlord shall exercise its rights and perform its
obligations hereunder in such a way as to minimize (given the circumstances,
including, without limitation the existence of an emergency situation) any
resulting interference with Tenant's use of and access to the Premises for the
conduct of Tenant's business from the Premises.

         20.17    When Payment is Due. Whenever a payment is required to be made
by one party to the other under this Lease, but a specific date for payment or a
specific number of days within which payment is to be made is not set forth in
this Lease, or the words "immediately", "promptly" and/or "on demand", or their
equivalent, are used to specify when such payment is due, then such payment
shall be due thirty (30) days after the party which is entitled to such payment
sends written notice to the other party demanding such payment.

         20.18    Exhibits. The following Exhibits are attached hereto and by
this reference made a part hereof:

         Exhibit A       Description of Land
         Exhibit B-1     Site Plan of Land
         Exhibit B-2     Proposed Final Map
         Exhibit C       Construction
         Exhibit D       Permitted Encumbrances
         Exhibit E       Non-Disturbance, Attornment and Subordination Agreement
         Exhibit F       Landlord's Waiver-Inventory
         Exhibit G       Memorandum of Lease
         Exhibit H       Commencement Certificate
         Exhibit I       Delivery Condition

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

LANDLORD:                                   TENANT:

PANATTONI DEVELOPMENT COMPANY, LLC, a       BIG 5 CORP.,
California limited liability company        a Delaware corporation

By: /s/ Jeff Phelan                         By: /s/ Steven G. Miller
    --------------------------------            --------------------------------
    Print Name: Jeff Phelan                     Steven G. Miller
    Its.: Senior Partner                        Its: President

                                            By: /s/ Gary S. Meade
                                                --------------------------------
                                                Gary S. Meade
                                                Its: Secretary

                                      -47-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT A

                               DESCRIPTION OF LAND

                              Panattoni Development

                                      BIG 5
                           "GROSS" PARCEL DESCRIPTION

                  All of Parcels 8 through 14, inclusive, and Parcels 82 and 83,
         together with portions of Parcels 1 through 5, inclusive, and Parcel 15
         of Parcel Map No. 24535 as shown by map on file in Book 162 of Parcel
         Maps, at Pages 84 through 90 thereof. Records of Riverside County,
         California, more particularly described as follows:

                  BEGINNING at the southwest corner of said Parcel 82;

                  Thence N. 00 degrees 08'48" W., along the west line of Parcels
         82, 14, 11, 83 and 1,a distance of 963.07 feet;

                  Thence N. 89 degrees 20'44" E., a distance of 1665.44 feet;

                  Thence easterly and northerly along a curve concave
         northwesterly, having a radius of 100.00 feet, through a central angle
         of 90 degrees 00'00" and an arc length of 157.08 feet;

                  Thence N. 00 degrees 39'16" W., a distance of 77.78 feet;

                  Thence northerly and easterly along a curve concave to the
         southeast, having a radius of 100.00 feet, through a central angle of
         69 degrees 17'44" and an arc length of 120.94 feet;

                  Thence N. 68 degrees 38'28" E., a distance of 54.06 feet to
          the east line of said Parcel 5, also being the west line of Parcel 86
          (Sycamore Canyon Boulevard) of said Parcel Map No. 24535;

                  Thence south along the east line of said Parcel 5 along a
         curve concave to the west, having a radius of 1166.82 feet, through a
         central angle of 19 degrees 24'37" and an arc length of 395.29 feet,
         (the initial radial line bears N. 70 degrees 08'31" E.);

                  Thence S. 00 degrees 26'52" E., continuing along the east line
         of said Parcel 5, and the east lines of said Parcels 83, 8 and 15, a
         distance of 938.94 feet;

                  Thence S. 89 degrees 20'44" W., a distance of 221.19 feet;

                  Thence S. 00 degrees 39'16" E., a distance of 17.00 feet;

                                    EXHIBIT A
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT A

                               DESCRIPTION OF LAND

                  Thence S. 89 degrees 20'44" W., a distance of 1062.18 feet to
         the west line of said Parcel 15:

                  Thence N. 00 degrees 14'56" W., along the west line of said
         Parcel 15, a distance of 90.47 feet to the northwest corner thereof,
         also being a point on the south line of said Parcel 12;

                  Thence S. 89 degrees 20'44" W., along the south lines of said
         Parcels 12 and 82, a distance of 668.00 feet to the POINT OF BEGINNING.

                  The above described Parcel of Land contains 46.64 acres, more
         or less.

                                    EXHIBIT A
                                       -2-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                   EXHIBIT B-1

                                SITE PLAN OF LAND

                                   [Attached]

                                 [PLAN DRAWING]

                                   EXHIBIT B-1
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                   EXHIBIT B-2

                               PROPOSED FINAL MAP

                                  [MAP DRAWING]

                                   EXHIBIT B-2
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT C

                                  CONSTRUCTION

         Attached to and forming a part of that certain Lease executed under
date of April 14, 2004, by and between PANATTONI DEVELOPMENT COMPANY, LLC, a
California limited liability company, as Landlord, and BIG 5 CORP., a Delaware
corporation, as Tenant.

1.       Landlord's Work; Minimum Specifications.

         1.1      Definition of Landlord's Work. Landlord hereby covenants that
immediately upon the execution of this Lease it will proceed with all reasonable
diligence and dispatch to design and obtain all applicable building permits and
governmental approvals for, and thereafter (and following acquisition of the
Land) commence and complete construction upon and/or adjacent to the Land of,
the Building described in Paragraph 1.1 of the Lease and related facilities and
Improvements (including, without limitation, all parking areas, landscaping,
utilities and utilities connections, driveways, parkways, accessways, curb cuts,
the construction of Crest Ridge Drive, all site work for the Premises and all
other on-site and off-site improvements), and interior tenant improvements for
the Building, all: (i) in first-class condition; (ii) as specified on the Final
Plans (as defined below) to be prepared and approved by the parties pursuant to
the provisions of this Exhibit C; and (iii) in compliance with all such building
permits and governmental approvals and all Applicable Laws.

                  The Building and such related facilities and other
Improvements set forth on the Final Plans (as the same may be revised pursuant
to the provisions of Paragraphs 2 and 3 below) shall be referred to herein,
collectively, as the "LANDLORD'S WORK", and shall consist of, collectively, two
(2) separate components of work, the Tenant Improvements and the Building
Site/Work (as defined below).

                  For purposes hereof, the "TENANT IMPROVEMENTS" shall consist
of, collectively, (A) those interior tenant improvements (including, without
limitation, the office area demising walls and other interior office area
improvements within the Building) to be constructed within the interior of the
Building, including the office area portion of the Building designated as such
by Tenant on the TI Layout Plans, as defined in Paragraph 2.1 below (which is
currently contemplated by Tenant to contain approximately 47,000 square feet),
and (B) certain exterior improvements to be constructed or installed on portions
of the Land located outside the Building, and consisting of a truck wash,
maintenance facility, guard shack, above-ground fuel tank, fencing, an asphalt
automobile parking lot on the east side of the Building, an asphalt truck
driveway on the south side of the Building, and an asphalt expansion on the west
side of the Building, all as to be specified on those portions of the Final
Plans described hereinbelow as the "Final TI Plans" to be prepared by Landlord,
at Tenant's expense (subject to Landlord's contribution of the Tenant
Improvement Allowance, as defined below), and approved by Tenant as provided in
Paragraph 2 below. Except for Tenant's racking systems, the Tenant Improvements
shall also include any items which would otherwise constitute Fixturization Work
(as defined below) to the extent Tenant specifically designates such items on
the TI Layout Plans

                                    EXHIBIT C
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

to be part of the Tenant Improvements for Landlord (rather than Tenant) to
install (but any cabling for Tenant's telephone, data and security systems for
the Building shall only be included in the Tenant Improvements if Tenant
designates its preferred subcontractors and/or vendors who shall be used by
Landlord's Contractor [as defined in Paragraph 5.2 below] to perform such work).

                  For purposes hereof, the "BUILDING/SITE WORK" shall consist
of, collectively, all portions of the Building, such site work, related
facilities and other Improvements which are other than the Tenant Improvements,
all as to be specified on those portions of the Final Plans described
hereinbelow as the "Final Building/Site Work Plans" to be prepared by Landlord,
at Landlord's expense, and approved by Tenant as provided in Paragraph 2 below.
With respect to utilities, as part of the Building/Site Work, Landlord shall
provide or make available to the Building and Premises telephone, water, sewer,
storm drainage, electricity and all other utilities and connections therefor to
and/or within the boundaries of the Building and Premises with public or private
means of access to public, governmental or private utility company lines or
conduits, as applicable, including, if necessary, easements over lands adjacent
to the Land, all as specified in the Final Building/Site Work Plans. The
approximate location of the Building and such site work, related facilities and
Improvements comprising the Building/Site Work shall be consistent with the Site
Plan attached to the Lease as Exhibit B (as the same may be modified by the
Final Building/Site Work Plans), with specifications that meet or exceed the
minimum specifications and requirements set forth on Schedule 1 attached to this
Exhibit C (collectively, the "MINIMUM BUILDING/SITE WORK SPECIFICATIONS").
Landlord covenants to incorporate the Minimum Building/Site Work Specifications
into the Final Building/Site Work Plans to the extent consistent with the other
specifications for the Building, site work and related facilities and
Improvements approved by Tenant as provided herein and otherwise in a manner
acceptable to Tenant.

         1.2      Landlord's Covenants for Landlord's Work. Landlord covenants
that it will diligently prosecute the design and construction of Landlord's Work
until completed in all details and deliver possession of the Premises to Tenant
in the Delivery Condition as defined in Paragraph 1.4 of the Lease, and within
ninety (90) days thereafter (subject to Force Majeure and Tenant Delays as
provided in Paragraph 1.5.4 of the Lease), cause the Premises to be Ready for
Occupancy, as defined and provided in Paragraph 1.4 of the Lease.

2.       Construction Drawings and Final Plans.

         2.1      Layout Plans for Tenant Improvements. On or before May 1,
2004, Tenant shall deliver to Landlord layout plans prepared by architects,
engineers and consultants of Tenant's choice showing the layout of, and certain
minimum specifications for, the Tenant Improvements (collectively, the "TI
LAYOUT PLANS").

         2.2      Construction Drawings. Landlord shall, at Landlord's expense,
cause all plans, specifications and working drawings for the Building/Site Work
(which shall include, without limitation, all exterior elevations, Systems
requirements, restroom requirements, floor loads and exiting requirements for
the Building and Premises) to be prepared promptly and diligently following the
execution of the Lease (collectively, the "BUILDING/SITE WORK CONSTRUCTION
DRAWINGS"). In addition, promptly following the date Tenant delivers to Landlord
the TI Layout

                                    EXHIBIT C
                                       -2-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

Plans, Landlord shall, at Tenant's expense (but subject to Landlord's
contribution of the Tenant Improvement Allowance), cause all plans,
specifications and working drawings for the Tenant Improvements to be prepared
in accordance with, based upon and incorporating the minimum specifications set
forth in the TI Layout Plans (collectively, the "TI CONSTRUCTION DRAWINGS"). The
Building/Site Work Construction Drawings and the TI Construction Drawings
(collectively, the "CONSTRUCTION DRAWINGS") shall be prepared by Carlisle
Coatsworth Architects (or by another architect selected by Landlord and approved
by Tenant), and by engineers and other consultants selected by Landlord and
approved by Tenant. The Building/Site Work Construction Drawings shall
incorporate the Minimum Building/Site Work Specifications as set forth above.
The Construction Drawings shall be in such form and detail as (i) required for
submission to the applicable governmental authorities for the issuance of all
applicable building permits and governmental approvals, and (ii) shall be
adequate for construction of Landlord's Work by Landlord's Contractor and
bidding by all subcontractors. The Construction Drawings shall be submitted by
Landlord to Tenant for Tenant's approval, by no later than July 1, 2004, and
shall be approved by both Tenant and Landlord pursuant to the procedures set
forth below in this Paragraph 2 prior to (A) commencement of construction of
Landlord's Work, and (B) Landlord's submission of the Construction Drawings to
the appropriate governmental authorities (including but not limited to Building
and Health Departments) for approval and issuance of permits. All plans and
specifications delivered to Tenant pursuant to this Paragraph 2 shall consist of
two (2) sets of plans and specifications plus one (1) reproducible set of plans
and specifications.

         2.3      Tenant's Approval of Construction Drawings. Landlord shall
cooperate and coordinate with Tenant and Tenant's consultants in Landlord's
preparation of the Construction Drawings. Landlord shall keep Tenant and
Tenant's consultants informed of the progress thereof to enable consideration of
Tenant's needs and suggestions therefor, as well as to enable coordination with
the planning for the design and installation of the Tenant Fixturization Work to
be performed by Tenant as provided in this Exhibit C. Tenant shall review and
approve (or reasonably disapprove) all phases of the Construction Drawings
(including, but not limited to, elevations, grading plans, schematic plans, and
architectural and engineering drawings and specifications); provided, however,
that notwithstanding Tenant's review and approval of any such phases of the
Construction Drawings, Tenant shall not have any responsibility or liability for
any such Construction Drawings, any design errors or defects therein and/or
compliance of same with Applicable Laws and the other requirements in this
Exhibit C. Tenant shall approve or reasonably disapprove the Construction
Drawings as submitted by Landlord to Tenant within ten (10) business days after
Tenant's receipt thereof. Notwithstanding anything to the contrary contained
herein, Tenant shall not be required to approve (i) any portion of the
Building/Site Work Construction Drawings that do not incorporate, or are
otherwise inconsistent with, the Minimum Building/Site Work Specifications, or
(ii) any portion of the TI Construction Drawings that are inconsistent with,
and/or do not incorporate the minimum specifications set forth in, the TI Layout
Plans. Any notice of disapproval of any portions of the Construction Drawings
from Tenant shall state the reasons for disapproval and the specific changes
which Tenant requests be made. Landlord, upon receipt of any such notice of
disapproval from Tenant, shall revise such portion(s) of the Construction
Drawings as have been disapproved in a manner so as to incorporate Tenant's
proposed specific changes, and resubmit such revised Construction Drawings to
Tenant as soon as reasonably possible thereafter, but in any event within ten
(10) business days after receipt of such notice of disapproval. Tenant shall
have five (5) business days after receipt of such revised Construction Drawings
to notify Landlord of Tenant's approval

                                    EXHIBIT C
                                       -3-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

or reasonable disapproval of such revised Construction Drawings (with any
changes required by Tenant for Tenant's approval to be specified in such
notice), and Landlord shall, upon receipt of such notice of disapproval from
Tenant, revise such portion(s) of the Construction Drawings as have been
disapproved in a manner so as to incorporate Tenant's proposed revisions, and
resubmit such revised Construction Drawings to Tenant as soon as reasonably
possible thereafter, but in any event within five (5) business days after
Landlord's receipt of such notice of disapproval. The foregoing process shall
continue until all phases of the Construction Drawings have been approved by
Tenant.

         2.4      Final Plans. The Building/Site Work Construction Drawings for
the Building/Site Work, as so finally approved by Tenant pursuant to the
foregoing provisions of this Paragraph 2, shall be referred to herein,
collectively, as the "FINAL BUILDING/SITE WORK PLANS". The TI Construction
Drawings for the Tenant Improvements, as so finally approved by Tenant pursuant
to the foregoing provisions of this Paragraph 2, shall be referred to herein,
collectively, as the "FINAL TI PLANS".

3.       No Changes by Landlord to Final Plans. Once the Final Building/Site
Work Plans and Final TI Plans (collectively, the "FINAL PLANS") have been so
approved by Tenant, Landlord may make no changes thereto without Tenant's prior
approval, which may be withheld or granted in Tenant's sole and absolute
discretion; provided, however, to the extent such changes (i) are required by
any applicable governmental authority as a condition to the issuance of the
applicable governmental permits and approvals for Landlord's Work, (ii) pertain
to substitution of any materials that are specified in the Final Plans but are
not readily available to meet the schedule of construction of Landlord's Work
contemplated in this Exhibit C, and/or (iii) are minor changes which shall not
adversely affect Tenant's use of or operation of its business in the Premises
for the Permitted Use, Tenant shall not unreasonably withhold its consent
thereto so long as (A) such changes do not create a Tenant Design Problem (as
defined below), and (B) any substituted materials are of at least equivalent
quantity and quality as the original materials specified on the Final Plans. For
purposes hereof, a "TENANT DESIGN PROBLEM" shall mean changes that are (1)
inconsistent with the Minimum Building/ Site Work Specifications or the TI
Layout Plans, or (2) materially inconsistent with any portion of the Final Plans
initially approved by Tenant.

4.       Tenant Change Orders.

         4.1      Request for Tenant Change Orders. At any time following
Tenant's and Landlord's approval of any portion of the Final Plans, Tenant may
direct, by a written change order request ("TENANT CHANGE ORDER"), any change in
Landlord's Work depicted on the Final Plans, including, without limitation, in
order to reduce (by "value engineering" or otherwise) the cost of any Tenant
Improvements depicted on the Final Plans. No Tenant Change Order shall, however:
(i) materially adversely affect the exterior appearance (other than Tenant's
Signs) of the Land or the Building; or (ii) cause a violation of any Applicable
Laws pertaining to the construction and occupancy of the Improvements. Subject
to the provisions of Paragraph 4.2 below, and the immediately preceding
sentence, Landlord shall diligently implement any Tenant Change Order requested
by Tenant. Any Tenant Change Order shall outline in reasonably specific detail
the change requested and shall further specify the reasons for such proposed

                                    EXHIBIT C
                                       -4-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

change. Tenant's request for any Tenant Change Order, and the implementation
thereof, may constitute a Tenant Delay as and to the extent provided in
Paragraph 6 below.

         4.2      Pricing Requests. Tenant may, at its option and before the
issuance of a Tenant Change Order pursuant to the provisions of this Paragraph
4, submit to Landlord a "PRICING REQUEST", which shall outline with reasonably
specific detail the changes Tenant desires to have priced. Upon receipt of a
Pricing Request, Landlord shall, as soon thereafter as reasonably possible, but
in no event later than seven (7) business days thereafter, deliver a statement
to Tenant which sets forth: (i) the estimated cost of such change, together with
a reasonably detailed breakdown thereof ("PRICING STATEMENT") and reasonable
information concerning the availability of materials and labor required in
connection with the proposed change; (ii) the effect that such change would have
on the time of construction (either as an increase or a decrease) and the costs
of the delays resulting therefrom; and (iii) Landlord's determination whether
the proposed change would violate the provisions of clauses (i) and/or (ii) of
Paragraph 4.1 above. In the event Tenant approves the applicable Tenant Change
Order as provided in Paragraph 4.3 below, Tenant shall be responsible for the
cost of the Tenant Change Order as and to the extent provided in Paragraph 5.4.2
below.

         4.3      Review of Pricing Statements. Upon receipt of any Pricing
Statement, Tenant shall have five (5) business days to review such Pricing
Statement. Upon completion of such review, Tenant shall have the option to
either: (i) accept the Pricing Statement and request a Tenant Change Order
conforming to the Pricing Statement, as applicable, in which event Tenant shall
be deemed to have agreed, for all purposes of this Exhibit C, to the estimates
and determinations of Landlord pursuant to clauses (ii) and (iii) of Paragraph
4.2 above; or (ii) reject the Pricing Statement. Should Tenant timely accept the
Pricing Statement, Landlord shall promptly thereafter prepare a Tenant Change
Order in accordance with the provisions of Paragraph 4.1 above. In no event,
however, shall Landlord be required to perform any Tenant Change Order which
would be technically impossible to perform or which would be unlawful. If within
such five (5) business day period Tenant rejects a Pricing Statement, or fails
to respond to such Pricing Statement, then Tenant shall be deemed to have
elected not to proceed with the proposed Tenant Change Order which is the
subject of such Pricing Statement, and Landlord shall perform Landlord's Work in
accordance with the Final Plans therefor without the implementation of such
proposed Tenant Change Order.

5.       Permits; Construction of Landlord's Work.

         5.1      Permits. Promptly following Tenant's approval of the Final
Building/Site Work Plans, Landlord shall, at Landlord's cost (and promptly
following Tenant's approval of the Final TI Plans, Landlord shall, at Tenant's
expense, subject to contribution of the Tenant Improvement Allowance), commence
and diligently proceed to obtain, and shall be solely responsible for obtaining,
all applicable permits and other governmental approvals for the construction of
the Building/Site Work and Tenant Improvements, respectively (collectively, the
"PERMITS"). All fees and other charges required to be paid to any governmental
authority in connection with Landlord's Work shall be timely paid by Landlord
(subject, however, to the provisions of Paragraph 5.4.2 below). In the event
that it is not possible to obtain the necessary Permits for Landlord's Work
without incorporating changes to the Final Plans which would both cause a Tenant
Design Problem and materially adverse affect Tenant's use of or operation of its
business

                                    EXHIBIT C
                                       -5-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

in the Premises for the Permitted Use (hereinafter, a "TERMINABLE EVENT"), then,
notwithstanding Landlord's and Tenant's reasonable efforts to resolve the
requested change in a manner that would not result in a Terminable Event, Tenant
shall have the right, upon written notice to Landlord, to terminate the Lease
unless, within ten (10) business days after such termination notice is delivered
to Landlord, such Permits are obtained in a manner that would not result in a
Terminable Event or is otherwise reasonably acceptable to Tenant. All costs
incurred in connection with modifying the Final Plans to meet the requirements
of all applicable governmental agencies, and all additional improvements
required in connection therewith, shall be paid by Landlord (subject, however,
to the provisions of Paragraph 5.4.2 below).

         5.2      Construction of Landlord's Work; Guaranteed Maximum
Construction Contract for Tenant Improvements. Following Tenant's approval of
the Final Building/Site Work Plans and Landlord's receipt of all applicable
Permits for the Building/Site Work, Landlord shall diligently commence and
complete the construction of the Building/Site Work in a good and workmanlike
manner and in strict compliance with the Final Building/Site Work Plans, all
Applicable Laws and such Permits. Following Tenant's approval of the Final TI
Plans and Landlord's receipt of all applicable Permits for the Tenant
Improvements, Landlord shall diligently commence and complete the construction
of the Tenant Improvements in a good and workmanlike manner and in strict
compliance with the Final TI Plans, all Applicable Laws and such Permits.
Landlord shall cause Landlord's Work (i.e., the Building/Site Work and Tenant
Improvements) to be constructed through a single licensed general contractor
(the "LANDLORD'S CONTRACTOR") and licensed subcontractors, laborers, vendors and
materialmen selected and retained by Landlord, and reasonably approved by Tenant
pursuant to a competitive bidding procedure mutually acceptable to Landlord and
Tenant. Notwithstanding the foregoing to the contrary, Tenant hereby approves
Landlord's selection of Panattoni Construction Inc., a California corporation
("PANATTONI CONSTRUCTION") as Landlord's Contractor, without any competitive
bidding of general contractors, so long as with respect to the Tenant
Improvements component of Landlord's Work only (and not the Building/Site Work):
(i) Panattoni Construction's total compensation for overhead, general conditions
and profit pertaining to the Tenant Improvements constructed hereunder does not
exceed four percent (4%) of the total "hard" costs of constructing the Tenant
Improvements (exclusive of such overhead, general conditions and profit); (ii)
Panattoni Construction competitively bids all work of the Tenant Improvements to
be performed by subcontractors, laborers and materialmen in accordance with a
competitive bidding procedure mutually acceptable to Landlord and Tenant, and
pursuant to which the lowest qualified bidders shall be selected to perform such
work (however, Landlord and Panattoni Construction shall not be required to
competitively bid the Building Site/Work); and (iii) Landlord and Panattoni
Construction enter into a guaranteed maximum construction contract for the
construction of the Tenant Improvements (the "TI CONTRACT"), which TI Contract
shall be reasonably approved by Tenant and based upon and incorporate such
competitive bids and the four percent (4%) maximum overhead, general conditions
and profit payable to Panattoni Construction as provided hereinabove, with all
costs of construction of the Tenant Improvements in excess of the guaranteed
maximum construction contract amount set forth in the approved TI Contract (the
"GMAX TI AMOUNT") to be borne and paid for solely and exclusively by Landlord
from Landlord's own funds (and not deducted from the Tenant Improvement
Allowance), except: (A) with respect to the cost of any Tenant Change Orders to
the extent Tenant is responsible for the payment therefor pursuant to Paragraph
5.4.2 below; and (B) Landlord shall be entitled to receive a supervision fee in
connection with the design and

                                    EXHIBIT C
                                       -6-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

construction of the Tenant Improvements, only (the "TI SUPERVISION FEE") to be
deducted from the Tenant Improvement Allowance, equal to two percent (2%) of the
total "hard" costs of constructing the Tenant Improvements (exclusive of such TI
Supervision Fee, and exclusive of the overhead, general conditions and profit
payable to Panattoni Construction).

5.3      General Requirements for Landlord's Work.

                  5.3.1    Insurance. At all times during the course of
Landlord's Work, Landlord shall maintain in effect, at Landlord's sole cost and
expense: (i) "builder's risk--all risk" insurance covering 100% of the
replacement cost of Landlord's Work constructed by Landlord during the course of
construction in the event of fire, lightening, windstorm, vandalism, malicious
mischief and all other perils (other than earthquake) generally included within
the classification "Special Form--Risk of Direct Physical Loss", and otherwise
meeting the Property Damage Insurance requirements set forth in Paragraph 10.4.1
of this Lease; (ii) workers compensation insurance and all other insurance
required by Applicable Laws in connection with Landlord's Work; and (iii) all
liability insurance required under Paragraph 10.3 of the Lease, except to the
extent that any requirement set forth therein is clearly inapplicable during the
construction period. Tenant shall be named as an additional insured with respect
to the policy required pursuant to clause (iii) hereinabove.

                  5.3.2    Payment of all Liens and Costs. Landlord shall,
subject to any rights to contest set forth elsewhere in the Lease, keep the
Premises free of all liens relating to Landlord's Work and shall diligently file
all appropriate notices of completion for such purpose.

                  5.3.3    Guaranty. Concurrently with the execution of this
Lease, Landlord shall provide to Tenant a Payment and Performance Guaranty (the
"GUARANTY") executed by Panattoni Investments, LLC, a California limited
liability company ("GUARANTOR") guaranteeing, among other things, the prompt and
diligent payment and performance by Landlord of Landlord's Work, and the prompt
and diligent payment, performance and observance by Landlord of all of
Landlord's other covenants and obligations set forth in this Exhibit C. Such
Guaranty shall be in the form of Schedule 3 attached to this Exhibit C.

                  5.3.4    Cooperation and Coordination. Landlord shall use
reasonable efforts to cooperate with Tenant, and to cause Landlord's Contractor,
subcontractors, consultants and all other persons involved in the Landlord's
Work to cooperate with Tenant to the extent reasonably necessary to ensure the
expeditious preparation and approval of the Final Plans, issuance of Permits and
commencement and completion of Landlord's Work. Without limiting the generality
of the foregoing: (i) Landlord shall provide Tenant with copies of all plans and
specifications and construction schedules reasonably requested by Tenant from
time to time to permit all appropriate review and coordination of Landlord's
Work, and shall provide reasonably detailed reports with respect to the status
of the design, permitting and construction of Landlord's Work on a monthly basis
(or such other periods of time as is reasonably requested by Tenant); (ii) upon
Tenant's request, Landlord shall provide Tenant with copies of all studies,
reports and/or inspections relating to Landlord's Work and/or the Premises; and
(iii) Landlord shall permit Tenant and Tenant's employees, consultants,
contractors and other representatives to enter onto the Premises and into the
Building at reasonable times during the course of the design and construction of
Landlord's Work, to monitor the status and progress of the design and

                                    EXHIBIT C
                                       -7-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

construction; however, any such entry by Tenant shall not in any way materially
and unreasonably interfere with Landlord's completion of Landlord's Work.
Landlord and Tenant, and their respective design and construction
representatives, shall meet at least monthly regarding such design, permitting
and construction, provided that Tenant, upon reasonable advance notice, may
convene additional meetings as may be reasonably necessary, and Tenant's
construction and design representatives shall have the right to attend all such
design and construction progress meetings.

         5.4      Cost of Landlord's Work.

                  5.4.1    Landlord's Work Costs. Except as otherwise expressly
provided in Paragraph 5.4.2 below, Landlord shall pay for, at its own expense,
without limit and without contribution from Tenant, all of the costs of the
design and construction of Landlord's Work (collectively, the "LANDLORD'S WORK
COSTS") which shall include, without limitation, the following: (i) the cost of
preparing the Final Plans and all preliminary and prior stages thereof and
subsequent changes thereto; (ii) the cost of equipment, materials, temporary
facilities and labor used in the design, development and/or construction of
Landlord's Work, including, without limitation, transportation and storage
costs; (iii) payments to Landlord's Contractor, and the subcontractors,
laborers, material suppliers and others providing such equipment, materials,
temporary facilities and labor; (iv) costs of clean-up and removal of debris;
(v) fees for Permits, licenses and inspections, including, without limitation,
school fees and other government imposed fees in connection with the design,
development and/or construction of Landlord's Work; (vi) fees of engineers,
surveyors, architects, environmental consultants, and others providing
professional or extra services to Landlord in connection with the design,
development and/or construction of Landlord's Work and the supervision thereof;
(vii) insurance premiums attributable to the construction period; (viii)
premiums for mechanics' lien and stop notice bonds; (ix) cost to serve the
Premises with all applicable utilities, including, without limitation,
connection service fees and hook-up fees; (x) recording costs and filing fees;
(xi) fees for foundation reports, engineering reports, topographic and ALTA
surveys and environmental surveys obtained by Landlord for the design and
construction of Landlord's Work; (xii) costs of grading and filling in
connection with the Premises or remedial action due to the presence of Hazardous
Materials (as defined in the Lease) on, under or about the Premises; (xiii)
expenses such as telegrams, telephone, postage, reproduction and copying
services incurred in connection with the design, development and/or construction
of Landlord's Work; and (xiv) such other costs as may be incurred by Landlord in
connection with the design, development and/or construction of Landlord's Work.

                  5.4.2    TI Costs and Tenant Change Order Costs.
Notwithstanding anything to the contrary contained in this Exhibit C:

                           5.4.2.1  Subject to Paragraph 6.2 below, Landlord
shall only be obligated to contribute up to, but not exceeding, the sum of $3.25
per square foot of Rentable Area of the Building (i.e., Three Hundred
Eighty-Seven Thousand Six Hundred Eighty-Nine Dollars ($3,097,679.00), subject
to adjustment pursuant to Paragraph 1.6 of the Lease) (the "TENANT IMPROVEMENT
ALLOWANCE") to pay for those portions of the Landlord's Work Costs described in
clauses (i) through (vii), and clauses (xiii) and (xiv) in Paragraph 5.4.1 above
to the extent the same are paid and/or incurred for any of the following
(collectively, the "TI COSTS):

                                    EXHIBIT C
                                       -8-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

(i) the costs (including, without limitation, the fees of the architects,
engineers, project managers and other consultants engaged by Tenant) paid and/or
incurred by Tenant in connection with the design of the Tenant Improvements,
preparation of the TI Layout Plans and the review and approval of the
Construction Drawings and Final Plans; (ii) the amounts actually and reasonably
incurred by Landlord for, and are specifically allocable to, the out-of-pocket
expenditures paid to third parties engaged by Landlord for the preparation of
the TI Construction Drawings and Final TI Plans, and the installation and/or
construction of the Tenant Improvements depicted on the Final TI Plans, and/or
(iii) the TI Supervision Fee. Tenant may require Landlord to make all or any of
such payments of the Tenant Improvement Allowance to which Tenant is otherwise
entitled hereunder for the TI Costs directly to Tenant if Tenant has previously
paid any such TI Costs and/or directly to those who are entitled to such payment
because they provided or performed services in connection with the TI Costs. Any
such payments shall be made within thirty (30) days after invoice therefor is
delivered by Tenant to Landlord. The Rentable Area of the Building shall be
determined pursuant to Paragraph 1.6 of the Lease, and the Tenant Improvement
Allowance shall be calculated based upon such determination as provided therein.
Notwithstanding the foregoing, the TI Costs shall specifically exclude the
following: (A) any supervision, coordination or other fees payable to Landlord,
its agents or employees in connection with the Tenant Improvements (other than
the TI Supervision Fee); (B) costs resulting from the negligence or willful
misconduct of Landlord or Landlord's employees, agents, contractors or
subcontractors, and/or Landlord's failure to diligently cause the Tenant
Improvements to be constructed; (C) the cost of any changes to the Final TI
Plans or the Tenant Improvements depicted on the Final TI Plans not approved by
Tenant pursuant to the procedures and standards for approval set forth in
Paragraph 3 above; (D) any defects in the construction of the Tenant
Improvements; (E) any costs described in clause (viii) and clauses (ix) through
(xii) in Paragraph 5.4.1 above; (F) any overhead, general conditions or profit
payable to Panattoni Construction in connection with the design and construction
of the Tenant Improvements in excess of the maximum four percent (4%) amount
therefor as set forth in Paragraph 5.2 above; (G) any costs of construction of
the Tenant Improvements in excess of the GMax TI Amount therefor set forth in
the TI Contract approved by Tenant pursuant to Paragraph 5.2 above, except for
the cost of any Tenant Change Orders to the extent Tenant is responsible for
same pursuant to Paragraph 5.4.2.2 below; (H) any costs due to the errors in the
Final Plans or resulting from Final Plans which are incorrect or incomplete,
which do not comply with Applicable Laws or which otherwise fail to meet the
requirements therefor set forth in this Exhibit C; and/or (I) Landlord's failure
to construct Landlord's Work in compliance with Applicable Laws, the Final
Plans, and/or the other requirements and provisions set forth in the Lease or
this Exhibit C. Such excluded costs shall be Landlord's responsibility to pay,
at Landlord's sole cost, without deduction from the Tenant Improvement
Allowance; and

                           5.4.2.2  Any increase in Landlord's Work Costs
resulting from a Tenant Change Order requested and implemented by Tenant
pursuant to Paragraph 4 above, which increased cost would not have been incurred
but for such Tenant Change Order, shall be paid for by Tenant within fifteen
(15) days after invoice, which costs may be paid out of and credited against the
Tenant Improvement Allowance. Landlord agrees to credit Tenant with any cost
savings arising out of any Tenant Change Orders such that the cost savings may
be applied by Tenant to the cost of any Tenant Change Orders which actually
increase Landlord's Work Costs.

                                    EXHIBIT C
                                       -9-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

6.       Fixturization Work; Disbursement of Tenant Improvement Allowance.

         6.1      Fixturization Work. The parties acknowledge and agree that:
(i) Tenant will be responsible for retaining architects, engineers, contractors
and other consultants of Tenant's choice to design, and from and after the
Delivery Date install, Tenant's racking systems, security systems, data systems
and other fixtures, furniture, equipment, systems and personal property (and
related cabling and wiring) within the Building and/or at the Premises, and any
Signs and Communication Equipment (as defined in Article 4 of the Lease) that
Tenant elects to be installed (collectively, the "FIXTURIZATION WORK") (however,
the Fixturization Work shall not include any such items that are other than
Tenant's racking systems and are specifically designated by Tenant to be
installed by Landlord as part of the Tenant Improvements pursuant to Paragraph
1.1 above, subject to the restrictions therein regarding cabling for Tenant's
telephone, data and security systems); (ii) Tenant shall be solely responsible
for the costs of design and construction of such Fixturization Work, except as
expressly provided in Paragraph 6.2 below regarding the cost of the Tenant's
Signs and Communication Equipment; and (iii) the Fixturization Work will be
performed while Landlord is completing Landlord's Work and making the Premises
Ready for Occupancy as described in Paragraphs 1.2 and 1.4 of the Lease.
Performance by Tenant of the Fixturization Work will be subject to the following
additional terms and conditions:

                  (A)      each party shall cooperate with the other party, and
cause its contractors to cooperate with the other party's contractors, in the
performance of the Fixturization Work and Landlord's Work so that (1) the
concurrent construction of such work will be performed pursuant to a schedule
mutually acceptable to Landlord and Tenant and their respective contractors, and
(2) disruption of the Fixturization Work and Landlord's Work can be kept to a
commercially reasonable minimum;

                  (B)      Tenant, or Tenant's representative, shall secure the
approval of governmental authorities and all permits required by governmental
authorities having jurisdiction over such approvals and permits for the
Fixturization Work, with Landlord's cooperation to the extent practicable, and
Tenant shall promptly provide Landlord copies of such approvals and permits
following Tenant's receipt thereof; and

                  (C)      Tenant's contractors' construction materials, tools,
equipment and debris for the Fixturization Work may be stored or "staged" on or
within the Building, and/or in other reasonably accessible areas of the Premises
which shall be designated for that purpose by Landlord and provided by Landlord
without charge. Landlord shall reasonably cooperate with Tenant to provide an
adequate staging area in the Building and/or at the Premises for Tenant and its
contractors. Tenant hereby agrees that the storage of any such materials, tools,
equipment and debris, and any damage to or loss of any such property, shall be
at Tenant's sole risk and at Tenant's sole cost and expense, and Tenant shall
indemnify, defend and hold Landlord harmless from and against any claims for
such damage to or loss of such property, except to the extent such damage or
loss is due to the negligence or willful misconduct of Landlord.

         6.2      Disbursement of Tenant Improvement Allowance. Landlord shall
pay for the TI Costs from the Tenant Improvement Allowance as and when such TI
Costs are incurred. To the extent the Tenant Improvement Allowance exceeds the
TI Costs, the remaining balance

                                    EXHIBIT C
                                      -10-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

thereof (not to exceed one-third (1/3) of the entire Tenant Improvement
Allowance) may be used by Tenant to: (i) pay for the costs of the design and
construction of Tenant's Signs and Communication Equipment included as part of
the Fixturization Work; (ii) pay for the costs incurred by Tenant in relocating
to the Premises; (iii) pay for the cost of any Tenant Change Orders to
Landlord's Work required to be paid for by Tenant pursuant to Paragraph 5.4.2
above; and/or (iv) as a credit against the Rent next due and payable under this
Lease. Disbursement of the Tenant Improvement Allowance for the costs described
in clauses (i) and (ii) hereinabove shall be made by Landlord to Tenant (or, at
Tenant's option, directly to those who are entitled to such payment because they
provided materials or products or performed services in connection therewith)
after Tenant has delivered to Landlord invoices for such costs.

         6.3      Over-Allowance Amount. Prior to the commencement of the
construction of the Tenant Improvements, and after Landlord has accepted all
subcontractor bids for the Tenant Improvements and entered into the TI Contract
with Landlord's Contractor approved by Tenant pursuant to Paragraph 5.2 above,
Landlord shall provide to Tenant for Tenant's approval, which shall not be
unreasonably withheld or delayed, a written detailed cost breakdown (the "FINAL
TI COSTS STATEMENT"), by trade, of the final TI Costs to be incurred, or which
have been incurred, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Landlord's Contractor
(which TI Costs for construction of the Tenant Improvements shall not exceed the
GMax TI Amount approved by Tenant as part of the TI Contract) (collectively, the
"FINAL TI COSTS"). In the event the Final TI Costs specified on the Final TI
Costs Statement exceed the Tenant Improvement Allowance (the "OVER-ALLOWANCE
AMOUNT), Tenant shall pay to Landlord the Over-Allowance Amount as follows, but
only to the extent Tenant is responsible for such excess TI Costs pursuant to
the foregoing provisions of this Exhibit C (which funds from Tenant Landlord
shall disburse only to pay for the TI Costs):

                  (i) Tenant shall pay to Landlord fifty percent (50%) of the
Over-Allowance Amount within ten (10) business days after the Delivery Date;

                  (ii) Tenant shall pay to Landlord twenty-five percent (25%) of
the Over-Allowance Amount by the date which is the later of (A) forty-five (45)
days after the Delivery Date, or (B) ten (10) business days after the date
one-half (1/2) of the Tenant Improvements have been completed and Landlord has
delivered to Tenant evidence that such work has been completed (including a
certificate from Landlord's Contractor to such effect);

                  (iii) Tenant shall pay to Landlord fifteen percent (15%) of
the Over-Allowance Amount within ten (10) business days after the later of (A)
the date Landlord causes the Premises to be Ready for Occupancy, and (B) the
date Landlord delivers to Tenant written evidence that the entire Tenant
Improvement Allowance (except for up to a ten percent (10%) retention of the
Tenant Improvement Allowance which may be held by Landlord to protect against
mechanics' liens) and the entire portions of the Over-Allowance Amount
previously paid by Tenant have been fully disbursed by Landlord to pay for the
TI Costs; and

                  (iv) Tenant shall pay to Landlord the remaining ten percent
(10%) of the Over-Allowance Amount within ten (10) business days after the date
all of the Tenant Improvements (including Punchlist Items) have been completed
and Landlord has delivered to Tenant (A) a written request for such payment
together with evidence that all such work has been completed

                                    EXHIBIT C
                                      -11-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

(including a certificate from Landlord's Contractor to such effect), (B) written
evidence that, except for such balance of the Over-Allowance Amount, the entire
TI Costs have been paid for by Landlord and the entire Tenant Improvement
Allowance and portions of the Over-Allowance Amount previously paid by Tenant
have been fully disbursed by Landlord to pay for such TI Costs, and (C) fully
executed unconditional and final mechanics' lien releases from Landlord's
Contractor and all subcontractors performing the Tenant Improvements.

         6.4      No Payments to Landlord. From and after the Delivery Date,
Landlord shall provide to Tenant and its designers, consultants, architects,
engineers, contractors and subcontractors, uninterrupted use of and access to
the parking areas, loading docks, and related facilities of the Premises as may
be reasonably required to enable Tenant and Tenant's contractors and
subcontractors to install the Fixturization Work, all of which shall be provided
without charge to Tenant or its designers, consultants, architects, engineers,
contractors and subcontractors, and without deduction from the Tenant
Improvement Allowance. In addition, Landlord shall not be entitled to receive,
and there shall be no deduction from the Tenant Improvement Allowance for, any
supervision or coordination fee, profit, overhead or general conditions or
payment of or reimbursement for any other costs incurred by Landlord (including,
without limitation, costs or fees of Landlord's architects, engineers and other
consultants) in connection with the design and installation of the Fixturization
Work.

7.       Tenant Delays.

         7.1      Definition of Tenant Delays. As used herein, "TENANT DELAYS"
are defined as delays (not caused by a Landlord Delay or Force Majeure Delay),
to the extent such delays necessarily and actually delay Landlord's delivery of
possession of the Premises to Tenant in the Delivery Condition as set forth in
Paragraph 1.1 of the Lease, due to any of the following:

                  (i)      Tenant's failure to comply with the time deadlines
imposed upon Tenant as set forth in this Exhibit C;

                  (ii)     Tenant's failure to timely approve or disapprove any
matter expressly requiring Tenant's approval or disapproval pursuant to this
Exhibit C;

                  (iii)    Tenant's breach of any provision of the Lease or this
Exhibit C;

                  (iv)     any Tenant Change Orders requested by Tenant pursuant
to Paragraph 3 above; or

                  (v)      any other wrongful acts or omissions, negligence or
willful misconduct of Tenant or any of Tenant's agents, employees or
contractors.

         7.2      Delivery Condition Delay. In the event the Delivery Date and
Landlord's delivery of possession of the Premises to Tenant in the Delivery
Condition are actually delayed as a result of any Tenant Delays, the Delivery
Date shall be deemed to occur on the date it would have occurred "but for" such
Tenant Delays.

         7.3      Limitations. Notwithstanding the foregoing provisions of this
Paragraph 7 to the contrary:

                                    EXHIBIT C
                                      -12-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                  (i)      if a Tenant Delay occurs, but Landlord fails to
provide written notice thereof to Tenant within five (5) business days after
Landlord actually becomes aware of same (which notice shall specify in
reasonable detail the actions, inactions or other circumstances Landlord claims
constitutes such Tenant Delay), then no such Tenant Delay shall be deemed to
have occurred until and from and after the date Landlord delivers such notice to
Tenant;

                  (ii)     no Tenant Delay shall be deemed to have occurred if
Tenant cures the action, inaction or circumstance which Landlord claims
constitutes such Tenant Delay within two (2) business days after such notice is
received by Tenant (however, Tenant shall only be entitled to an aggregate of
fifteen (15) business days in which to cure any such actions, inactions or
circumstances, and any such Tenant Delays occurring after such fifteen (15)
business days of aggregate cure days utilized by Tenant shall be deemed to have
occurred without taking into account any subsequent cure periods hereinabove);
and

                  (iii)    Tenant Delays shall be recognized under this
Paragraph 7 and the Lease only in the event that satisfaction of the Delivery
Condition is delayed, despite Landlord's commercially reasonable efforts to
adapt and compensate for such delays after Landlord becomes aware of same, which
efforts Landlord shall be obligated to make after Landlord becomes aware of
same.

8.       Representatives. Landlord has designated Steven Palmer as its
representative and Tenant has designated Richard Smith as its representative to
act for purposes of this Exhibit C and to receive notices, requests and demands
under or pursuant to this Exhibit C. All such notices, requests and demands
under or pursuant to this Exhibit C may be given to such representatives in lieu
of those designated to receive notices pursuant to Paragraph 20.15 of the Lease,
and the same shall be deemed delivered to and received by such representatives
upon receipt thereof by such representatives. Notice given by telecopy, with
respect to the parties' rights and obligations under this Exhibit C only, shall
be sufficient for purposes of this Exhibit C (and, in connection therewith, the
telecopy number of Landlord's representative is (949) 474-7833 and the telecopy
number of Tenant's representative is (310) 297-7592). Landlord and Tenant may
change their respective designation of representative hereunder by notice given
to the other.

                                    EXHIBIT C
                                      -13-

   BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                             SCHEDULE 1 TO EXHIBIT C

                    MINIMUM BUILDING/SITE WORK SPECIFICATIONS

                                   [Attached]

                         [PANATTONI CONSTRUCTION LOGO]

                    MINIMUM BUILDING/SITEWORK SPECIFICATIONS

                                       FOR

                              BIG 5 SPORTING GOODS

                        SYCAMORE CANYON LOGISTICS CENTER
                              Riverside, California
                                     Revised
                                  April 13,2004

PREPARED FOR:                                     PREPARED BY:
Big 5                                             Panattoni Development Company
                                                  19600 Fairchild Road, #285
                                                  Irvine, CA 92612
                                                  (949) 474-7830
                                                  (949) 474-7833 Fax

                                        1



                                TABLE OF CONTENTS



                                                                                PAGE
                                                                             
DIVISION 1: GENERAL REQUIREMENTS                                                  6

  1.00   DEFINED TERMS                                                            6

  1.01   LAWS, ORDINANCES, RULES & REGULATIONS                                    6

  1.02   FIELD ADMINISTRATION PERSONNEL                                           6

  1.03   TECHNICAL AND ADMINISTRATIVE                                             6

  1.04   MOBILIZATION/DEMOBILIZATION                                              6

  1.05   TEMPORARY CONSTRUCTION FACILITIES                                        7

  1.06   QUALITY/TRAINING/SAFETY/PROGRAMS                                         7

  1.07   DAILY CLEANUP                                                            7

  1.08   TESTING                                                                  7

  1.09   FINAL CLEANUP AND PUNCH LIST                                             7

  1.10   IMPACT, PERMIT, & CONNECTION FEES                                        7

  1.11   SIGNAGE                                                                  7

DIVISION 2: SITEWORK                                                              8

  2.01   CLEAR AND GRUB                                                           8

  2.02   LAYOUT ENGINEERING                                                       8

  2.03   MASS EARTHWORK                                                           8

  2.04   FINE GRADE                                                               8

  2.05   UNDERGROUND UTILITIES                                                    8

  2.06   ASPHALT PAVING                                                           8

  2.07   CONCRETE UTILITY SLABS                                                   9

  2.08   SITE CONCRETE                                                            9

  2.09   CONCRETE LOADING DOCKS & APRONS                                          9

  2.10   LANDSCAPE AND IRRIGATION                                                 9


                                        2



                                                                              
  2.11   EXTERIOR SIGNAGE                                                         9

  2.12   EROSION PROTECTION                                                       9

  2.13   OFFSITE CONSTRUCTION                                                     9

DIVISION 3: CONCRETE                                                             10

  3.01   BUILDING FOUNDATIONS                                                    10

  3.02   FLOOR SLAB                                                              10

  3.03   TILT-UP WALLS                                                           10

  3.04   RETAINING/SCREEN WALLS                                                  10

DIVISION 4: MASONRY                                                              10

  4.01   CMU BLOCK WALLS                                                         10

DIVISION 5: STRUCTURAL STEEL & METALS                                            10

  5.01   STRUCTURAL STEEL                                                        10

  5.02   MISCELLANEOUS METALS                                                    11

DIVISION 6: CARPENTRY                                                            11

  6.01   MISCELLANEOUS CARPENTRY                                                 11

  6.02   MECHANICAL SCREEN WALLS                                                 11

  6.03   SMOKE CURTAIN WALLS                                                     11

DIVISION 7: THERMAL & MOISTURE PROTECTION                                        11

  7.01   ROOFING                                                                 11

  7.02   ROOF ACCESS                                                             11

  7.03   MISCELLANEOUS CAULKING                                                  11

  7.04   FLOOR JOINT CAULKING                                                    11

  7.05   INSULATION                                                              11

  7.06   SMOKE HATCHES                                                           11

DIVISION 8: DOORS AND WINDOWS                                                    11

  8.01   EXTERIOR DOORS                                                          11


                                        3



                                                                              
  8.02   INTERIOR DOORS                                                          12

  8.03   ALUMINUM STOREFRONT AND GLAZING                                         12

  8.04   ROLL-UP DOORS                                                           12

DIVISION 9: FINISHES                                                             12

  9.01   EXTERIOR WALL PAINTING                                                  12

  9.02   METAL FRAMING AND DRYWALL                                               12

  9.03   CEILINGS                                                                12

  9.04   FLOOR COVERINGS                                                         12

  9.05   INTERIOR PAINTING                                                       12

  9.06   VINYL WALL COVERING                                                     12

  9.07   CERAMIC TILE                                                            12

  9.08   MISC. PAINTING                                                          12

DIVISION 10: SPECIALTY                                                           13

  10.01  BATHROOM ACCESSORIES                                                    13

  10.02  FENCING                                                                 13

  10.03  FLAGPOLES                                                               13

DIVISION 11: DOCK EQUIPMENT                                                      13

  11.01  LOADING DOCK EQUIPMENT                                                  13

  11.02  MISCELLANEOUS EQUIPMENT                                                 13

DIVISION 12: FURNISHINGS                                                         13

DIVISION 13: SPECIAL CONSTRUCTION                                                13

  13.01  SECURITY SYSTEM                                                         13

  13.02  DETECTION AND ALARM - FIRE/LIFE/SAFETY                                  13

  13.03  FIRE PROTECTION                                                         14

DIVISION 14: CONVEYING SYSTEM                                                    14


                                        4



                                                                              
DIVISION 15: MECHANICAL                                                          14

  15.01  PLUMBING DESIGN/BUILD                                                   14

  15.02  HVAC DESIGN/BUILD                                                       14

DIVISION 16: ELECTRICAL                                                          14

  16.01  LIGHTING DESIGN/BUILD                                                   14

  16.02  ELECTRICAL SERVICE DESIGN/BUILD                                         15

ALLOWANCES                                                                       16


                                        5



INTRODUCTION

The intent of this specification is to outline the requirements of an
attractive, high quality, cost efficient building constructed to reflect local
design standards

The Project:

The project will consist of an approximately 953,132 square foot warehouse and
distribution facility. The total site is located on approximately +/- 46.64
acres. The building structure will consist of a concrete tilt-up, with a minimum
clear height per section 3.03. The building will be equipped with an ESFR fire
protection system.

Exterior building elevations shall be constructed of load-bearing, or tilt-up
concrete wall panels.

DIVISION 1: GENERAL REQUIREMENTS

1.0      DEFINED TERMS:

         Owner/Developer: Panattoni Development, LLC; Architect: CC Architects;
         Structural Engineer: Randhava & Associates; Contractor: Panattoni
         Construction Company; Tenant: Big 5 Sporting Goods.

1.01     LAWS, ORDINANCES, RULES & REGULATIONS

         All applicable laws, ordinances, rules and regulations pertaining to
         the City of Riverside, the State of California and Federal Government,
         shall be complied with. Building design in strict compliance with all
         local building codes, including but not limited to the Uniform Building
         Code, Uniform Fire Code and the Americans with Disabilities Act.

1.02     FIELD ADMINISTRATION PERSONNEL

         The field administration personnel shall consist of a full time,
         exclusive project superintendent, and a skilled labor force appropriate
         to the current phase of construction.

1.03     TECHNICAL AND ADMINISTRATIVE

         A design team of experienced architects and engineers familiar with
         this type of building will be assembled to create construction
         drawings, and to consult throughout the construction phase. All
         structures will be designed to meet the applicable seismic zone
         criteria. The Contractor will provide plumbing, mechanical, fire
         protection and electrical construction documents. Contractor may, at
         its option, utilize design/build subcontractors to prepare some of the
         design documents.

         The Architect, Structural Engineer and Civil Engineer will be providing
         errors and omission insurance coverage for their work in the amount of
         $1,000,000 per occurrence and $2,000,000 in aggregate. General
         Contractor shall carry general liability insurance of $2,000,000 per
         occurrence and $5,000,000 umbrella coverage.

         Architect will control the distribution of all prints and maintain a
         record of such distribution.

         Architect to employ line-of-site analysis to assure wall parapets are
         tall enough to screen anticipated roof mounted equipment.

1.04     MOBILIZATION/DEMOBILIZATION

         As work is commenced, temporary utilities and facilities will be
         provided as required. The contractor will be responsible for providing
         and/or coordinating for equipment and materials. Temporary yards and
         facilities will be removed and/or relocated as the job progresses.

                                        6



1.05     TEMPORARY CONSTRUCTION FACILITIES

         The contractor at various locations on the site will provide temporary
         restrooms. A job site trailer will be furnished with telephone,
         computer, printer, fax machine, and conference room.

1.06     QUALITY AND SAFETY PROGRAMS

         Quality assurance shall be accomplished through direct supervision by
         the on-site superintendent, the project manager, and periodic
         inspection by the architect, as needed. Additionally, the contractor
         will provide for an independent laboratory will conduct specialized
         testing and certification on all required phases of construction. The
         contractor will maintain project safety standards in accordance with
         state and local safety standards.

1.07     DAILY CLEANUP

         Maintain premises and public properties free from accumulation of
         waste, debris, and rubbish caused by operations or wind during and
         after construction. Provide on-site containers for collection of waste
         materials, debris, and rubbish.

1.08     TESTING

         Initial geotechnical report will be provided by Developer, which will:
         address soil shrinkage and subsidence; recommend R-valves, traffic
         indices and paving sections; and indicate soil corrosivity.

         Contractor responsible to provide independent inspection, observation
         and testing as required by all governmental agencies, including but not
         limited to soils, concrete, welding and roofing. Test results shall be
         promptly distributed to the Developer and the local jurisdiction.

1.09     FINAL CLEANUP AND PUNCH LIST

         Contractor shall employ experienced workmen, or professional cleaners
         for final cleanup. In preparation of substantial completion or
         occupancy, conduct final inspection of sight-exposed interior and
         exterior surfaces, and concealed spaces. Remove grease, dust, dirt,
         stains, labels, fingerprints and other foreign materials from exposed
         interior and exterior finishes. At time of substantial completion
         perform "walk-through" with the Tenant and/or Owner. Compile a "punch
         list" as work to be finished, repaired, patched, or touched-up. At the
         completion of punch list work, perform a final walk through with the
         Tenant and/or Owner.

         Contractor is responsible for obtaining final Certificate of Occupancy
         upon completion of all permitted work including Tenant's fixturization
         work.

1.10     IMPACT, PERMIT, & CONNECTION FEES

         Contractor will obtain the building permits that shall be paid for by
         Developer.

         Processing of PUD applications, lot line Adjustments, and other
         required entitlements will be provided by Developer.

         The Tenant is to obtain all the required permits relating to
         environmental issues and operations specific to its business.

1.11     SIGNAGE

         No signage shall be allowed on site or buildings by Contractor or sub
         contractors, unless approved in writing by Developer.

                                        7



DIVISION 2: SITEWORK

2.01     CLEAR AND GRUB

         Clear site of trees, stumps, debris, surface vegetation and soil of
         organic materials.

2.02     LAYOUT ENGINEERING

         Contractor to provide licensed surveyor to locate pertinent boundaries,
         grades, and building corners. Contractor's superintendent to locate
         footings. Owner shall locate and mark the parcel lines and provide an
         elevation benchmark.

2.03     MASS EARTHWORK

         On-site soils are assumed acceptable for use in engineered fill. The
         site will be graded to balance. All earthwork shall comply with the
         recommendations of the soils engineer. Contractor to be responsible for
         all costs to comply with all local, state and federal handicap
         requirements per drawings.

2.04     FINE GRADE

         Fine grade pad to required +/- 4/100th of a foot.

2.05     UNDERGROUND UTILITIES

         Contractor is responsible to have all utilities including power, phone,
         domestic water, sewer, and storm drains available at the lot lines. Any
         costs associated with additional or the relocation of utilities will be
         at Landlord's expense. Connections will be made and meters set by the
         respectable utility company with the coordination of the Contractor.

         All items shall be designed to meet state and local requirements.

         Domestic Water:   Domestic water service to be installed by Contractor
                           per civil drawings to building and at each office
                           area. Service to include a meter and back flow
                           device. In the case of multiple office locations: one
                           location to be fully operational and the other
                           location(s) to have a suitably sized pipe stubbed
                           into the building from the property line without the
                           final connection of a hot top or meter. Contractor
                           responsible for correct location (including depth) of
                           tie-ins to the public system.

         Irrigation:       Irrigation water service will be provided by
                           Contractor to building. Services will include a
                           meter, back flow device and pressure reducer as
                           required. Contractor responsible for correct location
                           (including depth) of tie-ins to the public system.

         Fire Water:       Contractor responsible for correct location
                           (including depth) of tie-ins to the public system as
                           required by the Fire Department.

         Sewer:            Sewer service will be connected to the sewer main.
                           Contractor to stub sewer 20' into building at primary
                           office location. The location to have a clean-out in
                           pour strip. Contractor responsible for correct
                           location (including depth) of tie-ins to the public
                           system.

         Storm Drain:      The storm drain system will drain the entire site and
                           tie into the Public Storm System. Contractor
                           responsible for correct location (including depth) of
                           tie-ins to the public systems. Any on-site
                           retention/detention systems, as required, will be the
                           responsibility of the Contractor.

2.06     ASPHALT PAVING

         Paving section for truck traffic areas will be per recommendations of
         soils engineer.

                                        8



         Paving section for auto and truck traffic areas will be per
         recommendations of soils engineer.

         Civil drawings to indicate paving sections.

         Approximately 168 trailer spaces and 437 automobile spaces shall be
         striped.

2.07     CONCRETE UTILITY SLABS

         Trash enclosure pad will be 6", 3,000 psi, concrete slab

2.08     SITE CONCRETE

         Curbs shall be 6" extruded concrete curbs except for poured in place
         curb and gutter where applicable between all paving and landscaping.

         Provide 4" concrete slabs for the sidewalks.

2.09     CONCRETE LOADING DOCKS & APRONS

         Loading Docks:    Only docks and aprons to be concrete, balance to be
                           asphalt paving. Aprons will be located on the North
                           and South side of the building, built out 60'0" from
                           the dock doors and will be built to the outside edge
                           of each ramp in width, of a 6" nominal thickness
                           unreinforced concrete slab with a compressive
                           strength of 3,500 psi on compacted native soils as
                           designed by engineer. All construction joints to have
                           3/4" smooth greased dowels at 24" O.C. Dock height to
                           be 48".

2.10     LANDSCAPE AND IRRIGATION

         Contractor will use Hunter Landscape as the design-build landscaping
         sub-contractor. Contractor will be responsible for all costs associated
         with obtaining final City or jurisdiction approval.

         Landscape:        Provide a mix of trees and ground cover. All
                           landscaping shall be installed per City guidelines.

         Irrigation:       Provide 100% coverage to landscaped area with a fully
                           automated commercial grade irrigation system, which
                           shall be designed to prevent water over spray from
                           hitting all building surfaces.

         Erosion Control:  To be provided as needed.

         Final design to be approved by City.

2.11     EXTERIOR SIGNAGE

         By Tenant

2.12     EROSION PROTECTION

         To be provided per local requirements. Civil engineer will provide SWPP
         program with full implementation by General Contractor.

         Provide an allowance for erosion control.

2.13     OFFSITE CONSTRUCTION

         Contractor to provide curb, gutter, sidewalk, streetlights, fire
         hydrants, median work, paving, street work and utility modifications
         (including any removal, relocation, and/or under-grounding as required
         by the governing jurisdiction) as required to complete subject project.

                                        9



DIVISION 3: CONCRETE

3.01     BUILDING FOUNDATIONS

         The foundations will be reinforced 2,500 psi concrete isolated, spread
         footings designed to a specified structural yield as directed by
         structural drawings.

3.02     FLOOR SLAB

         The following specification is subject to approval by the structural
         engineer. It will provide a strong, high quality industrial floor of
         superior strength and flatness suitable for warehousing and
         distribution.

         The concrete floor slab shall be 6" thick, 4,000 psi compressive
         strength concrete placed over compacted native soil. In the office
         area, a visqueen vapor barrier will be used under a 6" slab of 4,000
         psi compressive strength concrete on compacted native soil or as
         recommended by soils engineer. Slab slope to be 0.5% or less. The
         concrete will be placed with a laser screed and finished with riding
         power trowels to a burnished finish to meet or exceed Ff50 and Fl 30.

         All construction joints to receive 16" long, 3/4" dowels greased at one
         end,placed at 18" O.C. All control joints to receive dowel baskets with
         dowels placed at a minimum of 24" O.C. and with all joints cut
         perpendicular at a distance not to exceed 18'0". Floor slab will be
         reinforced (1) column bay deep at the entire perimeter of warehouse
         area and throughout office pod areas. Reinforcing will consist of #3
         bars at 18" on center each way.

         Floor will be sealed with one (1) coat of Ashford Formula floor sealer.

3.03     TILT-UP WALLS

         The exterior of building shall be constructed of reinforced concrete.
         Construction and erection of the wall panels to be standard tilt-up
         method. Panel thickness shall be specified by the structural engineer.

         Exterior face of panels shall receive a floor slab finish, and shall be
         prepared to receive finish paint. Panel height shall be per
         architectural drawings to provide a minimum clear height of 30'0" from
         the dock doors to the first column line in at the north and south sides
         of the building and a minimum clear height of 32' from the first column
         line from the north and the south and will continue to the outside
         east/west walls. Interior pick points will be covered by concrete
         patch. The interior panel surfaces will be smooth troweled. Exterior
         panel joints to be caulked. All panels shall be tied together per
         structural drawings and shall meet all applicable seismic codes.

3.04     RETAINING/SCREEN WALLS

         Contractor to provide retaining walls and screen walls as shown on
         drawings.

DIVISION 4: MASONRY

4.01     CMU BLOCK WALLS

         Contractor shall be responsible for all costs associated with any block
         walls on site.

DIVISION 5: METALS

5.01     STRUCTURAL STEEL

         Steel framing shall be a combination of long-span steel bar joists,
         beams and wide-flange columns or truss girders and tube columns, or
         other approved structural assembly. Structural steel shall conform to
         structural engineers design. Column spacing will be 50' x 57' 8" for
         all areas. Minimum clear height from top of floor slab to bottom of
         roof joists is 32' from the first column line from the North and South
         sides of the building.

                                       10



         Provide interior roof hatch with ladder and cage.

5.02     MISCELLANEOUS METALS

         Install pipe handrails at concrete stairs at each exit man door in the
         dock area, if required.

DIVISION 6: CARPENTRY

6.01     MISCELLANEOUS CARPENTRY

         All miscellaneous carpentry will be performed to provide a professional
         finish.

6.02     MECHANICAL SCREEN WALLS

         Per architectural and structural drawings.

6.03     SMOKE CURTAIN WALLS (SEE 13.03-FIRE PROTECTION)

DIVISION 7: THERMAL & MOISTURE PROTECTION

7.01     ROOFING

         Four-ply built-up roof with a 15 year manufacturer's warranty by Intec
         Permaglas, John-Manville, or equal. Four-ply to include a base, two
         plies (Type IV) and a mineral cap-sheet.

7.02     ROOF ACCESS

         Provide roof access via interior mounted ladder. Ladder to meet all
         applicable codes

7.03     MISCELLANEOUS CAULKING

         Panel joints will be caulked on the exterior to the full panel height.

7.04     FLOOR JOINT CAULKING

         Caulking using a polyurethane product will be done at all construction
         joints and in the warehouse speed bay area, or first bay from dock
         doors, (excluding office pods).

7.05     INSULATION

         Warehouse: Provide white foil type insulation, with scrim reinforcing,
         on underside of roof sheathing, stapled to roof joist vented to prevent
         condensation.

7.06    SMOKE HATCHES

         A quantity of 2.5% of the roof square footage will be curb mounted
         smoke hatches. The cost of additional smoke hatches that may be
         required as a result of Tenant's use/racking or storage plan shall be
         the sole cost of Tenant.

DIVISION 8: DOORS & WINDOWS

8.01     EXTERIOR DOORS

         Exterior man doors to be 3'0" x 7'0" hollow metal doors and frames as
         required by the UBC code exiting requirements. All hardware to be
         Schlage 'D' series Sparta, brushed aluminum, or equivalent. Exterior
         doors will include key cylinder and pull hardware for Fire Department
         access. Final keying will be the Tenant's responsibility. Knox boxes to
         be provided per Fire Department's requirements.

                                       11



8.02     INTERIOR DOORS

         N/A

8.03     ALUMINUM STOREFRONT AND GLAZING

         Provide storefront system (2" x 4-1/2" front-loaded configuration) at
         main entrances with double leaf storefront doors. Glass to be sized per
         opening, 1/4" single glazed, medium performance, Aluminum and
         safety-glass entrance doors and sidelights, as well as exterior window
         assemblies shall be Kawneer or approved equal. Versalux Blue 2000 R
         reflective glass, tempered as required by code. Glazing to be installed
         with reflective coating on the interior surface.

8.04     ROLL-UP DOORS

         Provide doors at dock area, and four (4) 12' x 14' grade level doors.
         Doors will be heavy duty, 24 gauge, vertical push up sectional
         (not coiling) track doors with 8" x 16" vision lights.

         All doors to have (1) standard view window installed on the opposite
         side as the door latch.

DIVISION 9: FINISHES

9.01     EXTERIOR WALL PAINTING

         The building exterior will be prepared per paint manufactures
         specifications to receive one coat of primer and one coat of exterior
         latex paint; include paint colors per City of Riverside requirements.
         Exterior man doors, roll-up doors and handrails will be enamel.

9.02     METAL FRAMING AND DRYWALL

         N/A

9.03     CEILINGS

         N/A

9.04     FLOOR COVERINGS

         N/A

9.05     WAREHOUSE INTERIOR PAINTING

         Paint interior warehouse walls one (1) coat to cover. Interior columns
         to be painted yellow to a height of 10' above Finished Floor.

9.06     VINYL WALL COVERING

         N/A

9.07     CERAMIC TILE

         N/A.

9.08     MISC. PAINTING

         All above ground piping such as back-flow preventers shall be painted
         per City's requirements. All fire hydrants and PIV's painted per Fire
         Department Specs. Contractor to provide all handicap and traffics
         signage as well as parking lot curb painting and striping. Contractor
         to stripe all trailer spaces.

                                       12



DIVISION 10: SPECIALTIES

10.01    BATHROOM ACCESSORIES

         N/A

10.02    FENCING

         1) All gates to be wrought iron and shall either slide or swing. Gate
         tracks cast in place during placing of asphalt. 8' tall wrought iron
         fencing shall be installed on the north and south sides of building. 8'
         tall chain link fencing shall be installed on the west side of
         building.

10.03    FLAGPOLES

         N/A

DIVISION 11: EQUIPMENT

11.01    LOADING DOCK EQUIPMENT

         N/A

11.02    MISCELLANEOUS EQUIPMENT

         N/A

DIVISION 12: FURNISHINGS

         N/A

DIVISION 13: SPECIAL CONSTRUCTION

13.01    SECURITY SYSTEM

         N/A

13.02    DETECTION AND ALARM - FIRE LIFE SAFETY

         Contractor shall provide a turn-key, design/build cost to install a
         fire alarm monitoring system for the shell only that will meet all
         current state and local building codes. Design shall be by a qualified
         electrical engineer and or qualified electrical designer.

         Contractor will also be responsible to establish service with the local
         telephone company to provide (2) voice grade, dedicated lines to the
         fire alarm panel and to coordinate with the fire alarm contractor so
         that system is operational and does not delay final sign-off by the
         City and Fire Department. Monthly monitoring and phone company cost to
         be Tenant responsibility.

     1)  Provide design build alarm system to meet minimum code requirements of
         the City, Fire Marshall, NFPA.

     2)  To include but not be limited to the following:

         a) UL central station listed

         b) Double Detector Check Valves

         c) Post Indicator Valves

         d) Riser Valves

                                       13



         e) Riser flow switches

         f) Pump Room valves

         g) Pump Running

         h) Loss of power

         Security system is the Tenant's responsibility.

13.03    FIRE PROTECTION

         The warehouse area will be fully sprinklered. Building to be equipped
         with an ESFR system. Temperature rating of fire sprinkler heads to be
         165 degrees (F) or per code.

         A complete on-site fire protection underground system shall be provided
         per the specific requirements of the local authorities. This system
         shall include hydrants, sectional valves, back flow prevention, Fire
         Department connection and connections to the public water supply per
         local codes. Provide 6" concrete filled pipe bollards at all risers and
         hydrants. Splash blocks will be provided in the landscaping at all fire
         sprinkler inspector test valves at the exterior perimeter of the
         building.

         Riser assemblies shall include mechanical alarm valves. System control
         valves shall either be riser mounted with wall post extensions or
         exterior post indicator valves as required by the local authority. All
         required devices for central station alarm system interface shall be
         provided, but maintained by the Tenant.

         System design, material and installation shall comply with NFPA 13 and
         the other previous NFPA standards. It shall also comply with UBC and
         UFC standards. Approvals will also be obtained from the Owner's
         insurance authority.

         The cost of the fire hose cabinets and fire extinguishers as required
         by code and due to installation of Tenant's racking shall be a Tenant
         expense.

DIVISION 14: CONVEYING SYSTEM

         N/A

DIVISION 15: MECHANICAL

15.01    PLUMBING DESIGN/BUILD

         See Underground Utilities section 2.05.

15.02    HVAC-DESIGN/BUILD

         Provide exhaust fans and louvers to provide for code air changes in
         warehouse.

DIVISION 16: ELECTRICAL

16.01    LIGHTING DESIGN/BUILD

         Shell scope to include an emergency exit light and an illuminated exit
         sign above each man door. Tenant shall be responsible for the cost of
         any additional emergency exit lighting that may be required due to the
         effects of the tenant's build out and/or racking/storage plan.

         Parking lot lighting not less than one (1) foot candle average and
         shall be limited to exterior mounted wall packs. No light poles will be
         allowed unless required to meet minimum photometric levels.

                                       14



16.02    ELECTRICAL SERVICE DESIGN/BUILD

         General contractor shall provide a design build cost for the project.
         Design shall be by a qualified electrical engineer and or qualified
         electrical designer. Liability and Errors & Omissions insurance shall
         conform to Section 1.03 of this specification. Plans shall be processed
         with Riverside Public Utility Agency by the General contractor, the
         Electrical designer or the Electrical contractor. Any fees shall be
         paid by the General Contractor.

     1)  Primary Service

         a) Primary conduit to Riverside Public Utility Agency designated
            location per Riverside Public Utility Agency approved drawings.
            Transformer pad and substructure approved by Riverside Public
            Utility Agency.

         b) Secondary conduit and conductor shall be sized and bussed according
            to the table below, and as required by the Riverside Public Utility
            to the underground pull section.

         c) The underground pull section (UPS), shall be sized and bussed
            according to the table below.

         d) The location of the primary service shall be in an electrical room.
            The electrical room will be located inside the building, constructed
            of a drywall enclosure with a single man door and access to the
            room. Switchgear will be installed on the exterior perimeter
            concrete tilt wall. Alternate locations approved by the Riverside
            Public Utility Agency and the owner will be considered. Final size
            and dimensions of the electrical room shall be recommended by the
            Electrical designer and approved by the Owner and the project
            Architect.

     2)  House Service

         a) An independently metered House Service shall be sized at 200 Amps,
            277/480 volts, three phase.

            i) The House Meter may be either a Meter Section or a Meter Main
               Service Panel

           ii) The house Service shall serve the following design/build
               components:

               (1) Exterior lighting to meet Local Building Department
                   standards. Inclusive but not limited to an average of 1 Foot
                   Candle maintained on all parking, drive, and truck surfaces.
                   Lighting control to clock on, photo-cell off.

               (2) Lighting in the Electrical room.

               (3) 110 volt circuits in the Electrical room to serve:

                   a) Telephone backboard, irrigation time clock

                   b) Alarm panel

                   c) Code required circuit at all fire risers for riser flow
                      alarm.

                   d) Exit lights over all doors to the exterior (either 110 or
                      277).

     3)  Electrical Service, Design build:

         a) Meter Main bussed to Underground Pull Section.

         b) Conduit and conductor to serve additional tenant.

     4)  General Notes:

         a) Provide photometric layout with all engineered drawings.



2ND CONDUITS   PULL SECTION   HOUSE SERVICE   TENANT I SERVICE   TENANT II SERVICE
- ------------   ------------   -------------   ----------------   -----------------
                                                     
1600 amps      3,000 amps     N/A             1600 amps          N/A


Distribution to equipment is not assumed.

                                       15



ALLOWANCES

A total of $3.25 per building square foot to be used for the following Tenant
requested improvements:

BIG 5 - REQUESTED SHELL IMPROVEMENTS

1.   Approximately 47,000 SF of improved office space.

2.   Approximately 23,600 SF of mezzanine with code stairs.

3.   Two-Stop elevator, 2500 lbs., holeless hydraulic with pit.

4.   1,600 amp meter section, 277-480 volt 3 ph 4 wire (no electrical
     distribution except to office sub-panel).

5.   15-year Manufacturer roof Warranty in lieu of 10 year.

6.   400 watt metal halide fixture 25 fc average in warehouse, (no racking).

7.   Lenses for 400-watt metal halide fixtures.

8.   Ashford sealer for warehouse slab.

9.   Sewer line to southwest corner of the building.

10.  Conduit for future electrical service at west end of the building.

11.  Dock equipment.

12.  White gasroom - approximately 2,080 SF

13.  Aerosol room - approximately 3,952 SF

14.  Valuable room - approximately 21,994 SF

15.  Gun room - approximately 3,952 SF

16.  Ammo room - approximately 3,640 SF

17.  Concrete separation wall.

18.  Interior maintenance facility.

19.  Diesel ESFR fire pump (in lieu of electric pump).

20.  Energy management system for warehouse lighting.

21.  Pick level lighting.

     -    Fans and additional electric service to be design/build per Tenant's
          specifications.

22.  Two (2) patio areas.

BIG 5 - REQUESTED SITE IMPROVEMENTS

1.   West yard expansion, grading and paving - 106,464 SF.

2.   South truck driveway (Inbound/Outbound lane - 47,701 SF. of additional
     land).

3.   East employee parking area expansion - approx. 53,000 SF. to include
     approximately 1,900 lf of 8" tall tube steel fencing and pilasters.

4.   Pipe for future secondary water source at west end of building.

5.   Fuel island: Includes concrete slab, walls and 2 - 6,000 gallon above
     ground diesel fuel tanks per Big 5 provided specifications.

6.   Exterior maintenance/truck wash area: Includes water source, concrete slab,
     drains, an approximate 200-gallon oil interceptor and an approximate
     1,200-gallon clarifier with sample pit.

7.   Guard shack complete with sewer and electrical.

                                       16



[PANATTONI CONSTRUCTION LOGO]

DATE: 4/6/04
PROJECT NAME: Big 5, Sycamore Cyn., Riverside



                                                                                                     QTY    UNIT
                                                                                                     ---    ----
                                                                                                      
REQUESTED SHELL IMPROVEMENTS ADDS:

  1     APPROXIMATELY 47,000 SF OF IMPROVED OFFICE SPACE:                                           47,000  sf

  2     APPROXIMATELY 23,600 SF OF MEZZANINE WITH CODE STAIRS:                                      23,600  sf

  3     TWO-STOP ELEVATOR, 2500 LBS., HOLELESS HYDRAULIC W/ PIT:                                         1  each

  4     1,600 AMP METER SECTION, 277-480 VOLT 3 PH 4 WIRE (NO ELECTRICAL DISTRIBUTION
        EXCEPT TO OFFICE SUB-PANEL).                                                                     1  lsum

  5     15-YEAR MANUFACTURER WARRANTY IN LIEU OF 10-YEAR:

  6     400 WATT METAL HALIDE FIXTURE 25 FC AVERAGE IN WAREHOUSE: (NO RACKING)                           1  lsum

  7     LENSES FOR 400-WATT METAL HALIDE FIXTURES:                                                       1  lsum

  8     ASHFORD SEALER FOR WAREHOUSE SLAB IN LIEU OF LOPIDALITH:                                         1  lsum

  9     SEWER LINE TO SOUTHWEST CORNER OF THE BUILDING (FROM MAINLINE AT CRESTRIDGE):                  100  lf

  10    CONDUIT FOR FUTURE ELECTRICAL SERVICE AT WEST END OF THE BUILDING:                               1  lsum

  11    DOCK EQUIPMENT:

        a) 30,000 lb. hydraulic levelers, Serco HL-18735, VB420-11SF vertical bumpers:                  12  each
        b) Edge of dock levelers, Serco meod7220-15, VB420 11SF vertical bumpers:                       92  each
        c) Trailer restraints - Serco SL60 with exterior LED lights:                                   104  each
        d) Dock seals, Serco "Ultra seal" model S-2000, XL-100 4" wear pleats:                         104  each
        e) Combination fans/lights at dock leveler locations:                                          104  each
        g) Pits for hydraulic levelers:                                                                 12  each
        h) Pits for edge-of-dock levelers:                                                              92  each
        i) Electrical for dock equipment:                                                              116  each

  12    WHITE GAS ROOM - 2,080 SF:
        Concrete tilt walls with footings & rebar:                                                     176  lf
        *(White Gas room and Ammo room share a common wall)
        Sunken slab & metal grate floor with waterproofing:                                          2,080  sf
        10 x 12 fire rated vertical lift, manual door:                                                   1  each
        3 x 7 mandoor, fire rated:                                                                       1  each
        Paint interior walls:                                                                        8,748  sf

  13    AEROSOL (HAZ/MAT) ROOM - 3,952 SF:


                                     1 of 3



[PANATTONI CONSTRUCTION LOGO]

DATE: 4/6/04
PROJECT NAME: Big 5, Sycamore Cyn., Riverside




                                                                                            QTY    UNIT
                                                                                            ---    ----
                                                                                             
           6" metal studs & 2-hour drywall:                                                   139  lf
           Paint walls:                                                                     8,748  sf
           10 x 12 1-hour rated vertical lift door:                                             1  each
           3 x 7 1-hour rated mandoor:                                                          1  each

  14       Valuable room - 21,944 SF:

           Wire mesh partitions, to underside of roof:                                     11,340  sf
           Paint one side of wall:                                                          3,744  sf
           Openings 10 x 12:                                                                    1  each
           Mangate:                                                                             1  each

  15       GUN ROOM - 3,952 SF:

           Wire mesh partitions including door openings:                                    4,752  sf
           Openings 10 x 12:                                                                    1  each
           Mangate:                                                                             1  each

  16       AMMO ROOM - 3,640 SF:

           6" metal studs & 2-hour drywall:                                                   119  lf
           * (White Gas room and Ammo room share a common wall)
           10 x 12 fire rated vertical lift, manual door:                                       1  each
           3 x 7 mandoor, fire rated:                                                           1  each
           Paint interior walls:                                                            8,748  sf

  17       CONCRETE SEPARATION WALL:

           a) Concrete tilt single wall through roof with footing and
              rebar:                                                                          600  lf
           b) Paint both sides of wall interior only:                                           1  lsum
           c) 16' x 20' fire rated vertical lift manual doors:                                  3  each
           d) 3' x 7' fire rated mandoors:                                                      3  each

  18       INTERIOR MAINTENANCE FACILITY:                                                  13,624  sf

           100 gallon oil interceptor:
           750 gallon 3 stage clarifier with sample pit:
           * Includes epoxy acid resistant floor, lighting to 30 fc,
           2-hour drywall & metal stud separation wall and one 10 x 12
           fire rated vertical lift manual door.

  19       DIESEL FIRE PUMP FOR MAIN SYSTEM IN LIEU OF ELECTRICAL PUMP:                         1  lsum

  20       ENERGY MANAGEMENT SYSTEM FOR WAREHOUSE LIGHTING:                                     1  lsum

           * Estimated payback on energy savings is 11 months.

  21       PICK LEVEL LIGHTING                                                                  1  lsum


                                     2 of 3



[PANATTONI CONSTRUCTION LOGO]

DATE: 4/6/04
PROJECT NAME: Big 5, Sycamore Cyn., Riverside



                                                                                                QTY  UNIT
                                                                                                ---  ----
                                                                                               
          Florescent lighting @ 1st. and 2nd. Levels of the picking racks to be lit with 8'
          florescent fixtures and top level to be lit by area lighting:

22        PATIO AREAS:                                                                            2  each

          1000 sf patios with concrete tilt screen walls, solid
          cover roof and metal screen above tilts:

                       TOTAL REQUESTED SHELL IMPROVEMENTS:

NOTE:     The foregoing is based on the following plans:

          * Preliminary Precise Grading plan from KCT, 13 sheets
            dated 1/28/04.

          * Preliminary Street Improvements plan from KCT, 8 sheets dated 1/28/04.

          * Preliminary Sewer plan from KCT, 4 sheets dated 1/28/04.

          * Preliminary Water plan from KCT, 4 sheets dated 1/28/04.

          * Preliminary Sycamore Cyn. Storm Drainage plan from KCT, 10 sheets dated 1/28/04.

          * PL-16 Bldg. 2 Sycamore Canyon Conceptual plan from CCA dated 12/16/03, 3 sheets.

NOTE:     All costs above include General Contractor's fee and insurance.


                                     3 of 3



[PANATTONI CONSTRUCTION LOGO]

DATE: 4/6/04
PROJECT NAME: Big 5, Sycamore Cyn., Riverside



                                                                                                   QTY     UNIT
                                                                                                   ---     ----
                                                                                                    
REQUESTED SITE IMPROVEMENTS

    1    WEST YARD EXPANSION, GRADING AND PAVING - 106,464 SF:

         a) Staking:                                                                                   1  lsum
         b) Grading, sloping, over-exc. & re-compact:                                                  1  lsum
         c) 3.5" AC paving over 5" base:                                                          81,464  sf
         d) Additional curb only:                                                                    379  lf
         e) Additional double swing gate:                                                              1  lf
         f) Additional landscaping:                                                               25,000  sf
         g) Additional tube steel fencing 8' high:                                                   300  lf

    2    SOUTH TRUCK DRIVEWAY [INBOUND/OUTBOUND LANE - 47,701 SF):

         a) Staking:                                                                                   1  lsum
         b) Grading:
         c) 3.5" AC paving over 3" base:                                                          47,701  sf
         d) Striping:                                                                                  1  lsum
         d) Curb & Gutter:                                                                         1,110  lf
         e) Curb only:                                                                             1,280  lf
         f) Additional swing gate:                                                                     1  each

    3    EAST EMPLOYEE PARKING AREA EXPANSION - 53,000 SF:

         a) Staking:                                                                                   1  lsum
         b) Grading:                                                                              53,000  sf
         c) 3.5" AC paving over 3" base:                                                          40,000  sf
         d) Curb:                                                                                  1,800  lf
         e) Striping:                                                                                170  stalls
         f) Landscaping:                                                                          13,000  sf
         g) Light poles:                                                                               6  each
         h) Approximately 1,900 lf of 8' tall tube steel fencing w/ CMU pilasters every 100
         feet for employee parking lot security:
         i) Additional swing gates at entries:                                                         3  each

    4    PIPE FOR FUTURE SECONDARY WATER SOURCE AT WEST END OF BUILDING:                             100  lf

    5    FUEL ISLAND: INCLUDES CONCRETE SLAB, WALLS AND 2 - 6,000 GALLON ABOVE GROUND
         DIESEL FUEL TANKS:

    6    EXTERIOR MAINTENANCE/TRUCK WASH AREA: INCLUDES WATER SOURCE, CONCRETE SLAB,
         DRAINS, 200-GALLON OIL INTERCEPTOR AND A 1,200-GALLON CLARIFIER WITH SAMPLE PIT:              1  lsum

    7    GUARD SHACK ALLOWANCE COMPLETE WITH SEWER AND ELECTRICAL:

                                          TOTAL REQUESTED SITE IMPROVEMENTS:


                                     1 of 2


[PANATTONI CONSTRUCTION LOGO]

DATE: 4/6/04
PROJECT NAME: Big 5, Sycamore Cyn., Riverside



                                                                                                  QTY     UNIT
                                                                                                  ---     ----
                                                                                                    
    ALTERNATE COST:

1   SECONDARY DIESEL FIRE PUMP SYSTEM WITH 200,000 GAL. TANK:                                      1      lsum


NOTE: The foregoing is based on the following plans:

      * Preliminary Precise Grading plan from KCT, 13 sheets dated 1/28/04.

      * Preliminary Street Improvements plan from KCT, 8 sheets dated 1/28/04.

      * Preliminary Sewer plan from KCT, 4 sheets dated 1/28/04.

      * Preliminary Water plan from KCT, 4 sheets dated 1/28/04.

      * Preliminary Sycamore Cyn. Storm Drainage plan from KCT, 10 sheets
        dated 1/28/04.

      * PL-16 Bldg. 2 Sycamore Canyon Conceptual plan from CCA dated 12/16/03,
        3 sheets.

NOTE: All costs above include General Contractor's fee and insurance.

                                     2 of 2


BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                             SCHEDULE 2 TO EXHIBIT C

                        GENERAL CONTRACTOR'S CERTIFICATE

_____________ [Date]

______________________________
______________________________
______________________________
______________________________
Attention: ___________________

         Re:      ________________________________________________

Gentlemen:

         As general contractor for the construction of the above-referenced
project, the undersigned hereby certifies that all construction has been done in
a good and workmanlike manner and that all of the work materials and fixtures
are hereby approved.

                                              Sincerely,

                                              ________________________________
                                              a ______________________________

                                              By:  ___________________________
                                              Name:___________________________
                                              Its:____________________________

                                  SCHEDULE 2 TO
                                    EXHIBIT C
                                       -1-



                             SCHEDULE 3 TO EXHIBIT C

                        PAYMENT AND PERFORMANCE GUARANTY

         This PAYMENT AND PERFORMANCE GUARANTY ("GUARANTY"), dated as of April
14, 2004, is executed by PANATTONI INVESTMENTS, LLC, a California limited
liability company ("GUARANTOR") in favor of BIG 5 CORP., a Delaware corporation
("TENANT"), in conjunction with, and to induce Tenant to enter into, that
certain Lease of even date herewith (the "LEASE") between Tenant and PANATTONI
DEVELOPMENT COMPANY, LLC, a California limited liability company ("LANDLORD"),
pursuant to which Landlord is leasing to Tenant certain "Premises" more
particularly described in the Lease. Capitalized terms used and not otherwise
defined in this Guaranty shall have the meanings set forth for them in the
Lease.

         In consideration of the foregoing, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor hereby agrees as follows:

         1.       Guaranty of Landlord's Obligations. Guarantor hereby
unconditionally and irrevocably guarantees to Tenant the following
(collectively, the "GUARANTEED LANDLORD OBLIGATIONS"):

                  (i)      the prompt and diligent payment and performance of
Landlord's Work, and the prompt and diligent payment, performance and observance
by Landlord of all of Landlord's other covenants and obligations set forth in
Exhibit C attached to the Lease and in the other provisions of the Lease
pertaining and/or relating to Exhibit C and Landlord's delivery of possession of
the Premises to Tenant in the condition required therefor as set forth in the
Lease and Exhibit C (including, without limitation, Landlord's obligations and
covenants under Paragraphs 1.4 and 1.5 of the Lease and the first paragraph of
Paragraph 3.1 of the Lease); provided, however, except for (A) the payment of
the costs of Landlord's Work, and (B) the payment and performance of the
correction of any defects in Landlord's Work which are disclosed by Tenant in
writing to Guarantor prior to the Outside Date (as defined below). Guarantor's
obligations under this clause (i) with respect to the performance of Landlord's
Work shall not extend beyond the Outside Date. As used herein, the "OUTSIDE
DATE" shall mean the date which is one (1) year after Landlord's Work has been
completed as evidenced by a Notice of Completion recorded in the Official
Records;

                  (ii)     the prompt payment by Landlord to Tenant of any
Tenant Termination Amount pursuant to Paragraph 1.5.5 of the Lease, if
applicable; and

                  (iii)    the prompt payment and performance of the correction
of any defects which are Landlord's responsibility to perform pursuant to
Paragraph 7.3 of the Lease and which are disclosed in writing by Tenant to
Guarantor on or prior to the Outside Date.

         2.       Modification of Lease; Assignment and Subletting. Guarantor
agrees that the Lease and the Guaranteed Landlord Obligations may be
supplemented, amended and/or otherwise modified from time to time without
Guarantor's consent, in which event this Guaranty shall continue to apply to the
Lease and Guaranteed Landlord Obligations thereunder as so

                                  SCHEDULE 3 TO
                                    EXHIBIT C
                                       -1-



modified. In addition, no transfer of all or any portion of Landlord's interests
in the Lease shall impair or affect the continuing force of this Guaranty.

         3.       Guarantor Waivers. Guarantor hereby waives, to the fullest
extent allowed by law, all suretyship rights, defenses and other benefits to
which it might otherwise be entitled. Without limiting the generality of the
foregoing:

                  (i)      Tenant shall be entitled to proceed against Guarantor
         with respect to any unfulfilled Guaranteed Landlord Obligations
         regardless of whether Tenant has proceeded, is then proceeding, or
         intends to proceed, against Landlord or any other person with respect
         thereto, and Guarantor expressly waives the benefits of Section 2845 of
         the Civil Code of California;

                  (ii)     Tenant shall not be required to furnish Guarantor
         with copies of any notices given or required to be given to Landlord
         under the Lease, including without limitation notices of default;

                  (iii)    Guarantor's liability for the Guaranteed Landlord
         Obligations shall not be affected, released, terminated, discharged or
         impaired by: (A) the existence of any bankruptcy, insolvency,
         reorganization or similar proceeding with respect to Landlord or any
         other person; (B) any exercise, non-exercise or delay or lack of
         diligence in the exercise of remedies by Tenant against Landlord or any
         other person of the applicable Guaranteed Landlord Obligation; (C) any
         assignment or other transfer (voluntary or involuntary) of Landlord's
         interests in the Lease; (D) the rejection of the Lease in any
         bankruptcy proceeding with respect to Landlord, or any other release or
         discharge of Landlord in any bankruptcy, insolvency, reorganization or
         similar proceeding; (E) any amendment of the Lease; (F) any change in
         the time, manner or place of payment, performance or observance of any
         of the Guaranteed Landlord Obligations; (G) any waiver of, or any
         assertion or enforcement or failure or refusal to assert or enforce, or
         any consent or indulgence granted by Tenant with respect to a departure
         from, any term of the Lease, including without limitation the waiver of
         any default by Landlord, or the making of any other arrangement with,
         or the accepting of any compensation or settlement from, Landlord; or
         (H) any other guaranty now or hereafter executed by Guarantor or any
         other guarantor or the release of any other guarantor from liability
         for the payment, performance or observance of any of the Guaranteed
         Landlord Obligations, whether by operation of law or otherwise; and

                  (iv)     Guarantor hereby expressly waives: (A) notice of
         acceptance of this Guaranty and of any change in the financial
         condition of Landlord; (B) presentment, demand and protest; (C) until
         such time as all defaulted Guaranteed Landlord Obligations are
         fulfilled, all right of subrogation with respect to any obligation of
         Landlord that is fulfilled by Guarantor hereunder; (D) the right to
         trial by jury in any action or proceeding arising out of or with
         respect to this Guaranty or the interpretation, breach or enforcement
         hereof; (E) the right to interpose any setoff or counterclaim in any
         action or proceeding arising out of or with respect to this Guaranty;
         and (F) any right or claim of right to cause a marshalling of the
         assets of Landlord or to cause Tenant to proceed against any collateral
         or security held by Tenant at any time or in any particular order.

                                  SCHEDULE 3 TO
                                    EXHIBIT C
                                       -2-



The liability of Guarantor hereunder shall be reinstated and revived, and the
rights of Tenant under this Guaranty shall continue, with respect to any amount
at any time paid on account of any Guaranteed Landlord Obligations which shall
thereafter be required to be restored or returned by Tenant upon the bankruptcy,
insolvency or reorganization of Landlord or any other person, or otherwise, as
though such amount had not been paid. Guarantor subordinates any liability or
indebtedness of Landlord held by Guarantor to the Guaranteed Landlord
Obligations.

         4.       Jurisdiction. All disputes with respect to this Guaranty, and
all actions to enforce this Guaranty, may be adjudicated in the state courts of
California or the federal court sitting in California; and Guarantor hereby
irrevocably submits to the jurisdiction of such courts in any action relating to
this Guaranty. To the fullest extent permitted by law, this submission to
California jurisdiction shall be self-operative and no further instrument or
action, other than service of process, shall be required to confer jurisdiction
over Guarantor in any such court. Nothing in this paragraph shall be construed
to limit the right of Tenant to serve process in any manner permitted by law or
to institute any action against Guarantor in the courts of other appropriate
jurisdictions.

         5.       Notices. All notices and other communications provided for in
this Guaranty shall be in writing and be delivered to the appropriate party at
its address as follows:

                  If to Guarantor:

                           Panattoni Investments, LLC
                           8401 Jackson Road
                           Sacramento, California 95826
                           Attn: Carl D. Panattoni

                  If to Tenant:

                           Big 5 Corp.
                           2525 East El Segundo Boulevard
                           El Segundo, California 90245
                           Attn: President or Secretary

Addresses for notice may be changed from time to time by written notice to all
other parties. All communications shall be effective when actually received;
provided, however, that nonreceipt of any communication as the result of a
change of address of which the sending party was not notified or as the result
of a refusal to accept delivery shall be deemed receipt of such communication.

         6.       Attorneys' Fees. In the event that any litigation is commenced
with respect to this Guaranty, the party prevailing in such litigation shall be
entitled to recover, in addition to such other relief as may be granted, its
reasonable costs and expenses, including without limitation reasonable
attorneys' fees and court costs, whether or not taxable, as awarded by a court
of competent jurisdiction.

         7.       Representations and Warranties. Guarantor represents and
warrants to Tenant that: (i) the execution, delivery and performance of this
Guaranty by Guarantor will not violate

                                  SCHEDULE 3 TO
                                    EXHIBIT C
                                       -3-



any provision of any law, regulation, order or decree of any governmental
authority or of any court binding on Guarantor, or conflict with, result in a
breach of or constitute a default under any provision of any instrument to which
Guarantor is a party or which it or any of its property is bound, and will not
result in the imposition or creation of any lien, charge or encumbrance on, or
security interest in, any of its property pursuant to the provisions of any of
the foregoing; and (ii) this Guaranty has been duly executed and delivered by
Guarantor and constitutes a legal, valid and binding obligation of Guarantor,
enforceable against it in accordance with its terms, subject as to enforcement
of rights and remedies to any applicable bankruptcy, reorganization, moratorium
or other laws affecting the enforcement of creditors' rights generally and
doctrines of equity affecting the availability of specific enforcement or other
equitable remedies.

         8.       Estoppel Certificate. Guarantor hereby agrees that: (i)
Guarantor will, from time to time, within ten (10) days following request by
Tenant, execute and deliver to Tenant a statement certifying that this Guaranty
is unmodified and in full force and effect (or if modified, that it is in full
force and effect as modified and stating such modifications); and (ii) such
certified statement may be relied upon by anyone holding or proposing to acquire
from or through Tenant any interest in the Premises by any prospective assignee
or subtenant of Tenant.

         9.       Miscellaneous. This Guaranty shall: (i) remain in full force
and effect until the payment, performance and observance in full of all of the
Guaranteed Landlord Obligations and all other amounts payable under this
Guaranty; (ii) be binding upon Guarantor, its heirs, legal representatives,
successors and assigns; and (iii) inure to the benefit of and be enforceable by
Tenant and its successors and assigns or by any person to whom Tenant's interest
in the Lease or any part thereof, may be assigned. Wherever in this Guaranty
reference is made to Landlord or Tenant, the same shall be deemed to refer also
to the then heir, legal representative, successor or assign of Landlord or
Tenant, respectively. No provision of this Guaranty that is held to be
inoperative, unenforceable or otherwise invalid shall affect the remaining
provisions, and to this end all provisions hereof shall be severable. In the
event that more than one person or entity executes this Guaranty as Guarantor,
the obligations of each shall be joint and several. Time is of the essence of
this Guaranty. This Guaranty shall be governed by the laws of the State of
California. By accepting this Guaranty, Tenant agrees that it waives the right
to trial by jury in any action or proceeding arising out of or with respect to
this Guaranty or the interpretation, breach or enforcement hereof.

                       [SIGNATURE BLOCK ON FOLLOWING PAGE]

                                  SCHEDULE 3 TO
                                    EXHIBIT C
                                       -4-



         IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed as of the date first written above.

                                   "Guarantor"

                                   PANATTONI INVESTMENTS, LLC,
                                   a California limited liability company

                                   By: _________________________________________
                                       Carl D. Panattoni, trustee of the
                                       Panattoni Living Trust dated April 8,
                                       1998, Managing Member

                                  SCHEDULE 3 TO
                                    EXHIBIT C
                                       -5-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT D

                             PERMITTED ENCUMBRANCES

         Attached to and forming a part of that certain Lease executed under
date of April 14, 2004, by and between PANATTONI DEVELOPMENT COMPANY, LLC, a
California limited liability company, as Landlord, and BIG 5 CORP., a Delaware
corporation, as Tenant.

         The following constitute the "Permitted Encumbrances" described in
Paragraph 3.1 of the Lease:

1.       All non-delinquent general and special taxes and supplemental taxes
         listed as Exception Nos. 1 through 27 of that certain preliminary title
         report dated as of February 20, 2004, issued by First American Title
         Company, order no. NCS-29009-SF (the "PTR"), but only to the extent the
         same affect the Land (and no other property included in the PTR).

2.       Exception No. 28 of the PTR, so long as the Leasehold Title Policy or
         Leasehold Title Commitment issued to Tenant pursuant to the Lease
         modifies this exception to specifically reference the AD #1 water bond,
         only.

3.       Exception No. 30 of the PTR, so long as the Leasehold Title Policy or
         Leasehold Title Commitment issued to Tenant pursuant to the Lease
         includes a 103.1 Endorsement therefor.

4.       Exception Nos. 29, 31, 39 and 40 of the PTR.

                                    EXHIBIT D
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT E

             SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

Recorded at the request of
BIG 5 CORP., and
to be mailed after recording to:

BIG 5 CORP.
P.O. Box 92088
Los Angeles, CA  90009
Attn: A. Saucedo, Legal Dept.

                       SUBORDINATION, NON-DISTURBANCE AND
                              ATTORNMENT AGREEMENT

         THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"AGREEMENT") is made and entered into as of the ________ day of ____________,
_____, by and among BIG 5 CORP., a Delaware corporation ("TENANT"), PANATTONI
DEVELOPMENT COMPANY, LLC, a California limited liability company ("LANDLORD")
and _______________________________________________, a(n)
________________________ ("BENEFICIARY").

                                R E C I T A L S:

         Landlord and Tenant entered into a Lease dated April 14, 2004 (the
"LEASE") of certain real property more particularly described in Exhibit "A"
attached hereto (said real property, together with the improvements now or
hereafter constructed thereon, collectively, the "PREMISES").

         Beneficiary is the holder of the beneficial interest under a Deed of
Trust dated ________________________, recorded on _______________________, in
the Official Records in the County of Riverside, State of California, as
Instrument No. ____________________, in Book No. ____________, Page No.
______________, on the Premises (the "DEED OF TRUST"). Tenant and Beneficiary
desire hereby to establish certain rights, safeguards, obligations and
priorities with respect to their respective interests by means of the following
non-disturbance, attornment and subordination agreements.

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

                               A G R E E M E N T:

1.       Provided the Lease is in full force and effect and there are no
defaults by Tenant thereunder (beyond all applicable notice and cure periods),
then:

                                    EXHIBIT E
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

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

         1.2.     Tenant shall not be named in any foreclosure action related to
the Deed of Trust, unless such joinder is necessary under applicable law to
foreclose the Deed of Trust, and then only for such purpose and not for the
purpose of terminating the Lease.

         1.3.     In the event that Beneficiary or any other person
("PURCHASER") acquires title to the Premises or succeeds to Landlord's interest
in the Lease pursuant to the exercise of any remedy provided for in the Deed of
Trust or under the laws of the state in which the Premises are located
(including any foreclosure of the Deed of Trust or conveyance in lieu of
foreclosure), the Lease shall not be terminated or affected by the exercise of
any such remedies or by said foreclosure or sale resulting from any such
proceedings; and Beneficiary hereby covenants that any acquisition or sale by it
of the Premises pursuant to the exercise of any rights and remedies under the
Deed of Trust or otherwise, shall be made subject to the Lease and the rights of
Tenant thereunder; and Tenant covenants and agrees to attorn to Beneficiary or
Purchaser as its new landlord; and the Lease shall continue in full force and
effect as a direct lease between Tenant and Beneficiary or Purchaser, as
Landlord, upon all the terms, covenants, conditions and agreements set forth in
the Lease between Tenant and Landlord. However, in no event shall Beneficiary or
Purchaser be:

                  1.3.1.   liable for any act or omission of Landlord, except
for those acts or omissions for which Tenant has given Beneficiary notice
thereof prior to said foreclosure or sale and which Beneficiary has thereafter
failed to cure within the time periods provided for in Paragraph 6 of this
Agreement (except that in no event shall Beneficiary be liable for any
incidental, special or consequential damages [including for property damage or
personal injury], that have accrued prior to said foreclosure or sale resulting
from any acts or omissions of any prior landlord [including Landlord] which
occurred prior to the date such notice was delivered to Beneficiary).
Beneficiary shall provide Tenant with written notice of any such foreclosure or
sale of the Premises as required by law, but in no event less than thirty (30)
days prior to such foreclosure or sale; or

                  1.3.2.   bound by any payment of rent made by Tenant more than
thirty (30) days in advance of the due date under the Lease or liable for any
security deposit unless actually received by Beneficiary or Lender; or

                  1.3.3.   subject to any offsets or defenses which Tenant may
have against any prior landlord (including Landlord) arising prior to said
foreclosure or sale, except for any defenses expressly provided for in the Lease
and any offset and abatement rights expressly provided in Paragraphs 1.5, 2.2,
12.6 and 18.2 of the Lease, provided that Tenant has given Beneficiary notice of
such offsets or defenses prior to said foreclosure or sale. Beneficiary shall
provide Tenant with written notice of any such foreclosure or sale of the
Premises as required by law, but in no event less than thirty (30) days prior to
such foreclosure or sale; or

                                    EXHIBIT E
                                       -2-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                  1.3.4.   bound by any amendment to the Lease made subsequent
to the date of this Agreement without the written consent of Beneficiary, which
consent shall not be unreasonably withheld or withheld for the purpose of
effectuating a change in terms to the Deed of Trust.

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

2.       The Lease shall be subject and subordinate to the lien of the Deed of
Trust and to all the terms, conditions and provisions thereof, to all advances
made or to be made thereunder, and to any renewals, extensions, modifications or
replacements thereof, not inconsistent with Paragraph 1 of this Agreement.

3.       Beneficiary hereby consents to the application of insurance and
property damage proceeds and condemnation proceeds in accordance with the
applicable provisions of Paragraphs 9, 10 and 12 of the Lease between Landlord
and Tenant (including, without limitation, the provisions of Paragraph 10.4.3 of
the Lease which permit disbursement of insurance proceeds to a beneficiary of
Landlord under a first deed of trust encumbering the Premises to apply towards
the repair of damage to the Premises), whether or not the Deed of Trust is then
foreclosed.

4.       Any notices or other communication required or desired to be given by
one party to the other party hereto shall be given in writing by (i) mailing the
same by certified or registered United States mail, return receipt requested,
postage prepaid, or (ii) sending the same by Federal Express or other comparable
overnight express courier service (with proof of receipt available), addressed
as follows:

                  To Tenant:      Big 5 Corp.
                                  2525 East El Segundo Boulevard
                                  El Segundo, California 90245
                                  Attention: President or Secretary

                  To Landlord:    Panattoni Development Company, LLC
                                  19660 Fairchild Road
                                  Irvine, California 92612
                                  Attention: Steven Palmer

                  To Beneficiary: ______________________________________________
                                  ______________________________________________
                                  ______________________________________________
                                  ______________________________________________

or to such other addresses as the respective parties may from time to time
designate by notice given as provided in this Agreement. Notices shall be deemed
effective upon receipt or refusal to accept receipt (as evidenced by supporting
documentation).

5.       Landlord hereby acknowledges and represents that the rent and all other
amounts due under the Lease have been assigned to Beneficiary as security for
the loan secured by the Deed

                                    EXHIBIT E
                                       -3-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

of Trust. In the event that Beneficiary shall notify Tenant that Landlord has
defaulted under the terms of the Deed of Trust and shall demand in writing that
Tenant pay its rent and all other amounts due under the Lease to Beneficiary,
then Tenant shall pay to Beneficiary all rent and other payments required to be
paid by Tenant to Landlord pursuant to the terms of the Lease for the duration
of the Lease. Such amounts payable by Tenant to Beneficiary shall include only
those payments which become due to Landlord under the terms of the Lease after
the time Tenant has received written notice and demand from Beneficiary as
provided in this Paragraph 5; provided, however, Tenant shall not be liable to
Beneficiary for any payments made to Landlord under the terms of the Lease for
the fifteen (15) business day period following such notice and demand from
Beneficiary, such fifteen (15) business day period being deemed by the parties
hereto to be a reasonable period to permit Tenant to implement any such payment
change. Landlord hereby agrees that, in complying with the provisions of this
Paragraph 5, Tenant shall be entitled to rely solely upon the notices given by
Beneficiary, and Landlord agrees to indemnify, defend, protect and hold Tenant
harmless from and against any and all loss, claim, damage or liability arising
out of Tenant's payment to Beneficiary in compliance with such notice. Landlord
hereby releases and forever discharges Tenant from any all liability for losses
suffered by Landlord as a result of Tenant's compliance with the provisions of
this Paragraph 5, and Tenant shall be entitled to full credit under the Lease
for any rents or other amounts paid to Beneficiary in accordance with this
Paragraph 5 to the same extent as if such payments were made directly to
Landlord. Any dispute between Beneficiary or Purchaser and Landlord as to the
existence or continuance of a default by Landlord under the terms of the Deed of
Trust or the Note secured thereby, or with respect to the extent or nature of
such default, or with respect to foreclosure of the Deed of Trust by
Beneficiary, shall be dealt with and adjusted solely between Beneficiary or
Purchaser and Landlord, and Tenant shall not be made a party thereto.

6.       So long as the Deed of Trust remains an encumbrance against the
Premises, Tenant agrees to concurrently provide Beneficiary with a copy of any
notice of default served upon Landlord. Tenant further agrees that if Landlord
shall have failed to cure such default within the time period provided for in
the Lease, and if such default is curable by Beneficiary, then Beneficiary shall
have the right, at its election, to cure said Landlord default within thirty
(30) days following the expiration of Landlord's cure period, or, in the case of
any non-monetary default which cannot be cured within said 30-day period, to
promptly commence such cure within said 30-day period and thereafter diligently
prosecute same to completion, which completion period shall not exceed one
hundred twenty (120) days. Notwithstanding the foregoing, Tenant may proceed
immediately to cure or cause to be cured any default of Landlord pursuant to the
provisions of the Lease. Any failure by Tenant to give such duplicate notice to
Beneficiary shall not be a default by Tenant either under this Agreement or
under the Lease; provided, however, until such time as Beneficiary has received
such duplicate notice from Tenant and has had a opportunity to cure such default
as required under this Paragraph 6, Tenant shall have no right to (i) terminate
the Lease as a result of Landlord's default or (ii) exercise any offset rights
Tenant may have resulting from such default. Notwithstanding the foregoing
sentence, if any repair or maintenance matter for which Landlord is responsible
is of an emergency nature which if not attended to might result in bodily injury
or damage to Tenant's property, Tenant may make such repair (as provided in
Paragraph 7.2 of the Lease) without prior notice to Beneficiary, and such action
by Tenant shall not waive or limit Tenant's offset and defense rights under
Paragraph 1.3.3 above. Notwithstanding anything to the contrary herein, nothing
herein shall prohibit Tenant from exercising any termination rights it may have
under the

                                    EXHIBIT E
                                       -4-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

Lease (including under Articles 9 and 12 of the Lease) which are not predicated
upon a default of Landlord.

7.       If Beneficiary or Purchaser, by succeeding to the interest of the
landlord under the Lease, shall become obligated to perform the covenants of the
landlord thereunder, then, upon further transfer of the landlord's interest in
the Lease by Beneficiary or Purchaser and provided that the transferee shall
have assumed in writing all of the obligations of the landlord under the Lease
from and after the time of such transfer, all such landlord obligations shall
terminate as to Beneficiary or Purchaser, except for those obligations which
have accrued prior to such transfer.

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

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

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

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

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

                       [SIGNATURE BLOCK ON FOLLOWING PAGE]

                                    EXHIBIT E
                                       -5-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

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

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                                                     BENEFICIARY

                                     BIG 5 CORP.,
                                     a Delaware corporation

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                                                          TENANT

                                     PANATTONI DEVELOPMENT COMPANY, LLC, a
                                     California limited liability company

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                     By: _______________________________________
                                           Print Name: _________________________
                                           Its.: _______________________________

                                                                        LANDLORD

                                    EXHIBIT E
                                       -6-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

STATE OF                              )

                                      ) SS.

COUNTY OF                             )

On _______________, before me, ____________________________, a Notary Public,
personally appeared _____________________ and _______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________

STATE OF                              )

                                      ) SS.

COUNTY OF                             )

On _______________, before me, ____________________________, a Notary Public,
personally appeared _____________________ and _______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________

                                    EXHIBIT E
                                      -7-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

STATE OF                              )

                                      ) SS.

COUNTY OF                             )

On _______________, before me, ____________________________, a Notary Public,
personally appeared _____________________ and _______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________

                                   EXHIBIT E
                                      -8-



                            EXHIBIT "A" TO EXHIBIT E

                          LEGAL DESCRIPTION OF PREMISES

                                [To be attached]

                                 EXHIBIT "A" TO
                                    EXHIBIT E
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT F

                           LANDLORD'S WAIVER-INVENTORY

                                             Big 5 Warehouse/Distribution Center
                                                           Riverside, California

State of California                 )
                                    ) ss.
County of Riverside                 )

         WHEREAS, Big 5 Corp., (herein the "CLIENT") has pledged and granted to
THE CIT GROUP/BUSINESS CREDIT, INC., as Agent (herein "CITBC") of 300 South
Grand Avenue, Los Angeles, California 90071, a continuing general lien upon and
security interest in its present and future merchandise, inventory and goods
(herein "INVENTORY") pursuant to a certain Financing Agreement between CITBC as
agent, the Lenders thereto and the Client, as amended; and

         WHEREAS, said lien and security interest covers all said Inventory now
or hereafter located or to be located on Sycamore Canyon Boulevard, Riverside,
California ("PREMISES"), which Premises are owned by the undersigned Landlord
and leased to Tenant pursuant to that certain Lease with Landlord dated April
14, 2004 (the "LEASE") ; now therefore,

         THE UNDERSIGNED, in consideration of the foregoing, and for other good
and valuable consideration, receipt of which is hereby acknowledged, does by
these presents, hereby waives and relinquishes in favor of CITBC, its successors
and assigns, all right of levy for rent and all claims of every kind against
said Inventory now or hereafter kept or to be kept at said Premises, this waiver
to continue until full compliance by the Client with all the terms and
conditions of the Financing Agreement, and until payment and satisfaction of all
Obligations secured thereby; and the undersigned further agrees that, /* it will
not hinder or delay CITBC in enforcing its rights under said Financing
Agreement; that said Inventory may be repossessed or removed by CITBC at any
time and from time to time/** and the undersigned will, /*** provide access
accordingly/****.

* subject to the provisions herein,

** during the term of the Lease and within ten (10) days following the
expiration or earlier termination of the Lease;

*** upon reasonable prior written notice,

**** , provided that: (i) CITBC's exercise of its rights hereunder shall not
delay or limit Landlord's enforcement rights under the Lease against Tenant in
the event of Tenant's default, except that Landlord shall not seize the
Inventory; (ii) CITBC shall use due care in removing any property from the
Premises and shall repair any damage to the Premises caused by its repossession
and removal at CITBC's sole expense; and (iii) in the event CITBC enters the
Premises after expiration or earlier termination of the Lease, and Landlord has
been notified by CITBC in writing that Tenant's liability policy required to be
maintained by Tenant pursuant to the Lease has expired or terminated, CITBC
shall provide Landlord with a certificate of insurance or other evidence that
CITBC has in force a commercial general liability policy for liability for
personal injury, death and bodily injury to persons and damage to property
occurring upon, within or at the Premises and arising from CITBC's activities at
the Premises, which policy shall name Landlord as an additional insured and be
in an amount of not less than a combined single limit of $2,000,000.00.

                                   EXHIBIT F
                                      -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

         Notwithstanding the foregoing, /***** the expiration or sooner
termination of the Lease, the undersigned shall have the right to have any
Inventory that may be located on the Premises removed in accordance with
applicable law and the terms of the Lease./******

***** if CITBC has not removed the Inventory from the Premises within ten (10)
days following

****** If Landlord or CITBC commences legal proceedings to enforce any of the
terms of this Landlord's Waiver, or for damages resulting from a breach of this
Landlord's Waiver, the successful party in such action shall receive from the
other party, in each such action, including any appeal taken thereof, its
reasonable attorneys' fees and costs incurred.

         IN WITNESS WHEREOF, the undersigned, owner-Landlord, has signed below
this __________ day of _______________, _____________.

                                PANATTONI DEVELOPMENT COMPANY, LLC,
                                a California limited liability company

                                By: ____________________________________________
                                Name: __________________________________________
                                Title: _________________________________________

                                By: ____________________________________________
                                Name: __________________________________________
                                Title: _________________________________________

                                Landlord's Address:

                                19660 Fairchild Road
                                Irvine, California 92612
                                Attention:  Steven Palmer

                                    EXHIBIT F
                                       -2-



                                    EXHIBIT G

                               MEMORANDUM OF LEASE

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Big 5 Corporation
2525 East El Segundo Boulevard
El Segundo, California 90245
Attention: Jeanne Dawson, Esq.

________________________________________________________________________________
                                                (Space Above For Recorder's Use)

                               MEMORANDUM OF LEASE

         This Memorandum of Lease ("MEMORANDUM"), dated as of April 14, 2004, is
entered into by and between PANATTONI DEVELOPMENT COMPANY, LLC, a California
limited liability company ("LANDLORD"), whose address is 19660 Fairchild Road,
Irvine, CA 92612, and BIG 5 CORP., a Delaware corporation ("TENANT"), whose
address is 2525 East El Segundo Boulevard, El Segundo, California 90245.

         1.       Leased Premises. Landlord and Tenant have entered into that
certain unrecorded Lease (the "LEASE") dated as of April 14, 2004, pursuant to
which:

                  (i)      Landlord has acquired that certain real property
located in the City of Riverside, County of Riverside, State of California, as
more particularly described on Exhibit "A" attached hereto (the "LARGER
PARCEL");

                  (ii)     Landlord is in the process of subdividing the Larger
Parcel into several parcels of land, including that certain parcel of land (the
"LAND") (A) depicted as Parcel 1 on that certain proposed final parcel map no.
31139-1 (the "PROPOSED FINAL MAP"), a copy of the first page of which is
attached hereto as Exhibit "B-1", (B) containing approximately 44.81 net acres
after dedication of Crest Ridge Drive and the expansion parcel for Sycamore
Canyon Boulevard to the City of Riverside, as contemplated by the Proposed Final
Map, and (C) the legal description of which following such subdivision is
anticipated to be as set forth on Exhibit "B-2" attached hereto;

                  (iii)    Landlord leased to Tenant and Tenant leased from
Landlord, and Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, the Land, together with (A) the warehouse/distribution building
containing approximately 953,132 square feet of Rentable Area to be constructed
thereon (the "BUILDING"), and (B) all easements and other public and private
rights now or hereafter appurtenant thereto (collectively, the "PREMISES"), for
a lease term which is conditioned upon and will not commence until after the
occurrence of such subdivision of the Land from the Larger Parcel; and

                                    EXHIBIT G
                                       -1-



                  (iv)     following such subdivision of the Land from the
Larger Parcel, Landlord and Tenant shall record an amendment to this Memorandum
to (A) reflect that such subdivision has occurred, and (B) attach thereto the
legal description of the Land, as so subdivided, as the land component of the
Premises, which shall reflect the recording information for the recorded final
parcel map for such subdivision.

         2.       Term. The initial Term of the Lease is for a period of
approximately ten (10) years, commencing on the Commencement Date as defined in
the Lease, and ending upon the last day of the calendar month which is ten (10)
years after the Commencement Date.

         3.       Options to Extend. Tenant may, at Tenant's option in
accordance with the terms of the Lease, extend the Term of the Lease for up to
three (3) additional five (5) year terms, on the terms and conditions set forth
in the Lease.

         4.       Incorporation of Lease. This Memorandum is a memorandum of the
Lease. The purpose of this Memorandum is to give notice of the rights and
obligations of the parties hereto under the Lease, and all of the terms and
conditions of the Lease are incorporated herein by reference as if they were
fully set forth herein. In the event of any inconsistency between the terms of
this Memorandum and the terms of the Lease, the terms of the Lease shall
prevail.

         5.       Successors. Subject to the terms of the Lease, this Memorandum
shall be binding upon and inure to the benefit of the respective successors in
interest and assigns of the parties hereto.

         6.       Counterparts. This Memorandum may be executed in multiple
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same agreement.

                       [SIGNATURE BLOCK ON FOLLOWING PAGE]

                                    EXHIBIT G
                                       -2-



         IN WITNESS WHEREOF, Landlord and Tenant have caused this Memorandum to
be duly executed as of the date first above written.

                                          "Landlord"

                                          PANATTONI DEVELOPMENT COMPANY, LLC,
                                          a California limited liability company

                                          By: __________________________________
                                              Print Name: ______________________
                                              Its.: ____________________________

                                          By: __________________________________
                                              Print Name: ______________________
                                              Its.: ____________________________

                                          "Tenant"

                                          BIG 5 CORP.,
                                          a Delaware corporation

                                          By: __________________________________
                                              Steven G. Miller
                                              Its: President

                                          By: __________________________________
                                              Gary S. Meade
                                              Its: Secretary

                                    EXHIBIT G
                                       -3-



STATE OF CALIFORNIA                            )
                                               ) ss.
COUNTY OF LOS ANGELES                          )

         On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared Steven G. Miller and Gary S.
Meade, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the persons whose names are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity, and that by his/her/their signature on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.

         WITNESS my hand and official seal.

                                          ______________________________________
                                          Notary Public in and for said State

(SEAL)

STATE OF CALIFORNIA                            )
                                               ) ss.
COUNTY OF ____________                         )

         On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared
________________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

         WITNESS my hand and official seal.

                                          ______________________________________
                                          Notary Public in and for said State

(SEAL)

                                    EXHIBIT G
                                       -4-



STATE OF CALIFORNIA                            )
                                               ) ss.
COUNTY OF ____________                         )

         On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared
________________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

         WITNESS my hand and official seal.

                                          _____________________________________
                                          Notary Public in and for said State

(SEAL)

                                    EXHIBIT G
                                       -5-



                            EXHIBIT "A" TO EXHIBIT G

                       LEGAL DESCRIPTION OF LARGER PARCEL

Real property in the City of Riverside, County of Riverside, State of
California, described as follows:

PARCEL 1:

PARCELS 1 THROUGH 5 AND 8 THROUGH 10, 15 THROUGH 17, INCLUSIVE, AND 85 OF PARCEL
MAP NO. 24535, AS SHOWN BY MAP ON FILE IN BOOK 162 PAGES 84 THROUGH 90, OF
PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL 2:

PARCEL 19 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF PARCELS 12 AND 82 OF PARCEL MAP NO. 24535 AS SHOWN BY MAP ON
FILE IN BOOK 162 PAGES 84 THROUGH 90 OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 12;
THENCE NORTH 00 DEGREES 08' 36" WEST ALONG THE EAST LINE OF SAID PARCEL 12, A
DISTANCE OF 205.00 FEET TO THE POINT THEREIN;
THENCE SOUTH 89 DEGREES 50' 40" WEST, A DISTANCE OF 342.66 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE EAST LINE OF PARCEL 58 OF
PARCEL MAP 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36, OF
PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID EAST LINE HAVING A
BEARING OF NORTH 00 DEGREES 09' 20" WEST;
THENCE SOUTH 00 DEGREES 09' 20" EAST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 207.99 FEET TO A POINT IN THE SOUTH LINE OF SAID PARCEL 82;
THENCE NORTH 89 DEGREES 20' 39" EAST ALONG SAID SOUTH LINE AND ALONG THE SOUTH
LINE OF SAID PARCEL 12, A DISTANCE OF 342.63 FEET TO THE POINT OF BEGINNING.

PARCEL 3:

PARCEL 20 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA
DESCRIBED AS FOLLOWS:

                                 EXHIBIT "A" TO
                                    EXHIBIT G
                                       -1-



THOSE PORTIONS OF PARCELS 11 AND 12 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON
FILE IN BOOK 162 PAGES 84 THROUGH 90 OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE SOUTHEAST CORNER OF SAID PARCEL 12;
THENCE NORTH 0 DEGREES 08' 36" WEST ALONG THE EAST LINE OF SAID PARCEL 12, A
DISTANCE OF 205.00 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING NORTH 00 DEGREES 08' 36" WEST ALONG SAID EAST LINE AND ALONG
THE EAST LINE OF SAID PARCEL 11, A DISTANCE OF 205.00 FEET TO A POINT THEREON;
THENCE SOUTH 89 DEGREES 50' 40" WEST, A DISTANCE OF 342.70 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE EAST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733, AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID EAST
LINE HAVING A BEARING OF NORTH 00 DEGREES 09' 20" WEST;
THENCE SOUTH 00 DEGREES 09' 20" EAST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 205.00 FEET;
THENCE NORTH 89 DEGREES 50' 40" EAST, A DISTANCE OF 342.66 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 4:

PARCEL 20 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THAT PORTION OF PARCEL 11 OF PARCEL MAP 24535, AS SHOWN BY MAP ON FILE IN BOOK
162 PAGES 84 THROUGH 90, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE SOUTHEAST CORNER OF PARCEL 12 OF SAID PARCEL MAP NO. 24535;
THENCE NORTH 00 DEGREES 08' 36" WEST ALONG THE EAST LINES OF SAID PARCELS 12 AND
11, A DISTANCE OF 410.00 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING NORTH 00 DEGREES 08' 36" WEST ALONG SAID EAST LINE OF PARCEL
11, A DISTANCE OF 205.45 FEET TO THE NORTHEAST CORNER THEREOF;
THENCE SOUTH 89 DEGREES 32' 39" WEST ALONG THE NORTH LINE OF SAID PARCEL 11, A
DISTANCE OF 317.88 FEET TO A POINT THEREIN;
THENCE SOUTH 44 DEGREES 41' 40" WEST, A DISTANCE OF 35.26 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE EAST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID EAST
LINE HAVING A BEARING OF NORTH 00 DEGREES 09' 20" WEST;

                                 EXHIBIT "A" TO
                                    EXHIBIT G
                                       -2-



THENCE SOUTH 00 DEGREES 09' 20" EAST ALONG THE NORTHERLY PROLONGATION, A
DISTANCE OF 178.78 FEET;
THENCE NORTH 89 DEGREES 50' 40" EAST, A DISTANCE OF 342.70 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 5:

PARCEL 22 AS SHOWN ON CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THAT PORTION OF PARCEL 11 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON FILE IN
BOOK 162 PAGES 84 THROUGH 90, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 11;
THENCE SOUTH 00 DEGREES 09' 25" EAST ALONG THE WEST LINE OF SAID PARCEL 11, A
DISTANCE OF 207.92 FEET TO A POINT THEREIN;
THENCE NORTH 89 DEGREES 50' 40" EAST, A DISTANCE OF 305.00 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE WEST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID WEST
LINE HAVING A BEARING OF NORTH 00 DEGREES 09' 20" WEST;
THENCE NORTH 00 DEGREES 09' 20" WEST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 184.38 FEET;
THENCE NORTH 45 DEGREES 18' 21" WEST, A DISTANCE OF 35.45 FEET TO A POINT IN THE
NORTH LINE OF SAID PARCEL 11;
THENCE SOUTH 89 DEGREES 32' 39" WEST ALONG SAID NORTH LINE, A DISTANCE OF 279.88
FEET TO THE TRUE POINT OF BEGINNING.

PARCEL 6:

PARCEL 23 AS SHOWN ON CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF PARCELS 11, 13 AND 14 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP
ON FILE IN BOOK 162 PAGES 84 THROUGH 90, INCLUSIVE, OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL 11;
THENCE SOUTH 00 DEGREES 09' 25" EAST ALONG THE WEST LINE OF SAID PARCEL 11, A
DISTANCE OF 207.92 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING SOUTH 00 DEGREES 09' 25" EAST ALONG THE WEST LINE AND ALONG
SAID WEST LINE OF PARCEL 14, A DISTANCE OF 205.00 FEET TO A POINT THEREIN;

                                 EXHIBIT "A" TO
                                    EXHIBIT G
                                       -3-



THENCE NORTH 89 DEGREES 50' 40" EAST, A DISTANCE OF 305.00 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE WEST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID WEST
LINE HAVING A BEARING OF NORTH 00 DEGREES 09' 20" WEST;
THENCE NORTH 00 DEGREES 09' 20" WEST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 205.00 FEET;
THENCE SOUTH 89 DEGREES 50' 40" WEST, A DISTANCE OF 305.00 FEET TO THE TRUE
POINT OF BEGINNING.

PARCEL 7:

PARCEL 24 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF PARCELS 13, 14 AND 82 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP
ON FILE IN BOOK 162 PAGES 84 THROUGH 90, INCLUSIVE, OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 82;
THENCE NORTH 00 DEGREES 09' 25" WEST ALONG THE WEST LINES OF SAID PARCELS 82 AND
14, A DISTANCE OF 205.00 FEET TO A POINT IN THE WEST LINE OF SAID PARCEL 14
WHICH BEARS SOUTH 00 DEGREES 09' 25" EAST 412.92 FROM THE NORTHWEST CORNER OF
PARCEL 11 OF SAID PARCEL MAP NO. 24535;
THENCE NORTH 89 DEGREES 50' 40" EAST, A DISTANCE OF 305.00 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE WEST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID WEST
LINE HAVING A BEARING NORTH 00 DEGREES 09' 20" WEST;
THENCE SOUTH 00 DEGREES 09' 20" EAST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 202.34 FEET TO A POINT IN THE SOUTH LINE OF SAID PARCEL 82;
THENCE SOUTH 89 DEGREES 20' 39" WEST ALONG SAID SOUTH LINE, A DISTANCE OF 305.01
FEET TO THE POINT OF BEGINNING.

PARCEL 8:

PARCEL 47 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF PARCELS 11, 12, 13 AND 82 OF PARCEL MAP NO. 24535, AS SHOWN BY
MAP ON FILE IN BOOK 162 PAGES 84 THROUGH 90, INCLUSIVE, OF

                                 EXHIBIT "A" TO
                                   EXHIBIT G
                                      -4-



PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID PARCEL 11;
THENCE SOUTH 89 DEGREES 32' 39" WEST ALONG THE NORTH LINE OF SAID PARCEL 11, A
DISTANCE OF 317.88 FEET TO THE TRUE POINT OF BEGINNING;
THENCE SOUTH 44 DEGREES 41' 40" WEST, A DISTANCE OF 35 26 FEET TO AN
INTERSECTION WITH THE NORTHERLY PROLONGATION OF THE EAST LINE OF PARCEL 58 OF
PARCEL MAP NO. 24733 AS SHOWN BY MAP ON FILE IN BOOK 175 PAGES 30 THROUGH 36,
INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID EAST
LINE HAVING A BEARING OF 00 DEGREES 09'20" WEST;
THENCE SOUTH 00 DEGREES 09' 20" EAST ALONG SAID NORTHERLY PROLONGATION, A
DISTANCE OF 591.77 FEET TO A POINT IN THE SOUTH LINE OF SAID PARCEL 82;
THENCE SOUTH 89 DEGREES 20' 39" WEST ALONG SAID SOUTH LINE, A DISTANCE OF 60.00
FEET TO THE NORTHWEST CORNER OF SAID PARCEL 58;
THENCE NORTH 00 DEGREES 09' 20" WEST ALONG THE NORTHERLY PROLONGATION OF THE
WEST LINE OF SAID PARCEL 58, A DISTANCE OF 591.72 FEET;
THENCE NORTH 45 DEGREES 18' 20" WEST, A DISTANCE OF 35.45 FEET TO A POINT IN THE
NORTH LINE OF SAID PARCEL 11;
THENCE NORTH 89 DEGREES 32' 39" EAST ALONG SAID NORTH LINE, A DISTANCE OF 110.00
FEET TO THE TRUE POINT OF BEGINNING.

PARCEL 9:

PARCEL 14 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA
DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF PARCELS 18 AND 19 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON
FILE IN BOOK 162 PAGES 84 THROUGH 90, OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 18;
THENCE SOUTH 89 DEGREES 20' 39" WEST ALONG THE NORTH LINE OF SAID PARCELS 18 AND
19, A DISTANCE OF 706.85 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 19;
THENCE SOUTH 00 DEGREES 27' 21" EAST ALONG THE WEST LINE OF SAID PARCEL 19 A
DISTANCE OF 368.10 FEET TO A POINT THEREIN, SAID POINT BEING IN A LINE PARALLEL
WITH AND DISTANT NORTHERLY 24.00 FEET, MEASURED AT A RIGHT ANGLE, FROM THE SOUTH
LINE OF SAID PARCEL 19;
THENCE NORTH 89 DEGREES 28' 31" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF
322.39 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE NORTH, HAVING A
RADIUS OF 1, 758.00 FEET;

                                 EXHIBIT "A" TO
                                   EXHIBIT G
                                      -5-



THENCE EASTERLY ALONG SAID CURVE, TO THE LEFT, THROUGH A CENTRAL ANGLE OF 09
DEGREES 15' 38" AN ARC DISTANCE OF 284.14 FEET TO THE END THEREOF;
THENCE NORTH 80 DEGREES 12' 53" EAST, A DISTANCE OF 87.24 FEET;
THENCE NORTH 36 DEGREES 59' 47" EAST, A DISTANCE OF 34.24 FEET TO A POINT IN THE
EAST LINE OF SAID PARCEL 18, SAID POINT BEING IN A NON-TANGET CURVE, CONCAVE TO
THE EAST, HAVING A RADIUS OF 1, 053.00 FEET, THE RADIAL LINE AT SAID POINT BEARS
SOUTH 83 DEGREES 46' 41" WEST;
THENCE NORTHERLY ALONG SAID EAST LINE AND ALONG SAID CURVE, TO THE RIGHT,
THROUGH A CENTRAL ANGLE OF 05 DEGREES 45' 58", AN ARC DISTANCE OF 105.97 FEET TO
THE END THEREOF;
THENCE NORTH 00 DEGREES 27' 21" WEST ALONG SAID EAST LINE, A DISTANCE OF 199.82
FEET TO THE POINT OF BEGINNING.

PARCEL 10:

PARCEL 15 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

PARCEL 20 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON FILE IN BOOK 162 PAGES 84
THROUGH 90, OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

EXCEPTING THEREFROM THE SOUTHERLY 24.00 FEET THEREOF.

PARCEL 11:

PARCEL 16 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

PARCEL 21 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON FILE IN BOOK 162 PAGES 84
THROUGH 90 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

EXCEPTING THEREFROM THE SOUTHERLY 24.00 FEET THEREOF.

PARCEL 12:

PARCEL 17 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:

PARCEL 22 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON FILE IN BOOK 162 PAGES 84
THROUGH 90 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

EXCEPTING THEREFROM THE SOUTHERLY 24.00 FEET THEREOF.

PARCEL 13:

                                 EXHIBIT "A" TO
                                    EXHIBIT G
                                       -6-



PARCEL 18 AS SHOWN ON A CERTIFICATE OF COMPLIANCE RECORDED JULY 27, 1992 AS
INSTRUMENT NO. 277677 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA
DESCRIBED AS FOLLOWS:

PARCEL 23 OF PARCEL MAP NO. 24535, AS SHOWN BY MAP ON FILE IN BOOK 162 PAGES 84
THROUGH 90, OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

EXCEPTING THEREFROM THE SOUTHERLY 24.00 FEET THEREOF.

PARCEL 14:

PARCEL 83 OF PARCEL MAP NO. 24535, AS SHOWN BY ON FILE IN BOOK 162 PAGES 84
THROUGH 90, OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

APN: 263-020-015-7, 263-020-016-8, 263-020-017-9, 263-020-018-0, 263-020-0191,
263-020-024-5, 263-020-025-6, 263-020-027-8, 263-020-039-9, 263-020-040-9,
263-040-041-0, 263-020-042-1, 263-020-043-2, 263-020-044-3, 263-020-045-4,
263-020-026-7, 263-280-025-0, 263-280-026-1, 263-280-027-2, 263-280-037-1,
263-280-038-2, 263-280-039-3, 263-280-040-3, 263-280-041-4, and 263-280-042-5

                                 EXHIBIT "A" TO
                                    EXHIBIT G
                                       -7-



                           EXHIBIT "B-1" TO EXHIBIT G

                     DEPICTION OF LAND ON PROPOSED FINAL MAP

                                  [MAP DRAWING]

                                EXHIBIT "B-1" TO
                                    EXHIBIT G
                                       -1-



                           EXHIBIT "B-2" TO EXHIBIT G

                      ANTICIPATED LEGAL DESCRIPTION OF LAND

Parcel 1, Parcel Map 31139-1 as shown in book ___ of Parcel Maps, at Pages ____
through _____ inclusive, records of Riverside County, California.

                                EXHIBIT "B-2" TO
                                    EXHIBIT G
                                       -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT H

                            COMMENCEMENT CERTIFICATE

         This Commencement Certificate, dated as of ____________, 20____, is
entered into by and between PANATTONI DEVELOPMENT COMPANY, LLC, a California
limited liability company ("LANDLORD"), and BIG 5 CORP., a Delaware corporation
("TENANT"), with respect to the following facts:

                          W I T N E S S E T H T H A T:

         WHEREAS, Landlord and Tenant entered into that certain Lease (the
"LEASE") dated April 14, 2004 for certain "Premises" as defined in the Lease
located in Riverside, California; and

         WHEREAS, Landlord and Tenant agreed to execute this Certificate to
confirm the actual Commencement Date and Expiration Dates of the Lease, and for
other purposes;

         NOW, THEREFORE, pursuant to the provisions of Paragraph 1.7 of the
Lease, Landlord and Tenant mutually agree as follows:

                  1.       Capitalized terms used and otherwise defined herein
shall have the meanings set forth for them in the Lease.

                  2.       The following dates, amounts of square footage and
dollar amounts are hereby agreed to and confirmed for all purposes of the Lease
as of the Commencement Date and as of the date of this Certificate.

                  Commencement Date:                 ___________________________

                  Expiration Date:                   ___________________________

                  Rentable Area of the Building:     ___________________________

                  Fixed Rent for the First Period
                  under the Lease (i.e., the first
                  5-years of the Term):              ___________________________

                       [SIGNATURE BLOCK ON FOLLOWING PAGE]

                                   EXHIBIT H
                                      -1-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA
                                          "Landlord"

                                          PANATTONI DEVELOPMENT COMPANY, LLC,
                                          a California limited liability company

                                          By: _______________________________
                                              Print Name: ___________________
                                              Its.: _________________________

                                          By: _______________________________
                                              Print Name: ___________________
                                              Its.: _________________________

                                          "Tenant"

                                          BIG 5 CORP.,
                                          a Delaware corporation

                                          By: _______________________________
                                              Print Name: ___________________
                                              Its.: _________________________

                                          By: _______________________________
                                              Print Name: ___________________
                                              Its.: _________________________

                                    EXHIBIT H
                                       -2-



BIG 5 WAREHOUSE
RIVERSIDE, CALIFORNIA

                                    EXHIBIT I

                               DELIVERY CONDITION

The Delivery Condition shall include the following: finished slab with sealer, a
completed building foundation, all exterior walls shall be tilted, the roof
structure and roof membrane shall be completed, the on-site fire loop and
hydrants shall be installed and operational, the ESFR diesel pump and pump room
will be installed and operational, foil insulation will be in the process of
being installed, the interior warehouse walls will be painted, the separation
wall will be completed, the entire parcel will be rough graded and Building
access will be from two (2) grade level doors, utilities will not be available,
all smoke hatches will be installed, the sanitary sewer stubs will be in the
slab per the Big 5 provided office plan, all man doors shall be installed in a
lockable condition, all vertical lift loading doors shall be installed and
operational, all glazing shall be installed, the aluminum store fronts shall be
installed and the doors lockable, all Building inspections shall be current
based upon the percentage of Building completion.

The Building/Site Work shall be constructed in accordance with the permits
issued by the City of Riverside based upon the Final Building/Site Work Plans
approved by the parties pursuant to the Lease.

The City of Riverside deems that the Building is in a suitable condition to
commence racking and other Fixturization Work provided that Big 5 has been
issued the applicable permits for such work by the City of Riverside.

                                   EXHIBIT I
                                      -1-

                                                                    EXHIBIT 31.1

                                 CERTIFICATIONS

I, Steven G. Miller, President and Chief Executive Officer, certify that:

      1.    I have reviewed this Quarterly Report on Form 10-Q of Big 5 Sporting
            Goods Corporation;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officers and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
            registrant and have:

            a)    Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b)    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

            c)    Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financing
                  reporting; and

      5.    The registrant's other certifying officers and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of the registrant's board of directors (or persons
            performing the equivalent functions):

            a)    All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b)    Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: August 6, 2004

                                           /s/ Steven G. Miller
                                           ----------------------------------
                                           Steven G. Miller
                                           President and Chief Executive Officer

                                                                    EXHIBIT 31.2

                                 CERTIFICATIONS

I, Charles P. Kirk, Senior Vice President and Chief Financial Officer, certify
that:

      1.    I have reviewed this Quarterly Report on Form 10-Q of Big 5 Sporting
            Goods Corporation;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this report, fairly present in all material
            respects the financial condition, results of operations and cash
            flows of the registrant as of, and for, the periods presented in
            this report;

      4.    The registrant's other certifying officers and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
            registrant and have:

            a)    Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b)    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

            c)    Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financing
                  reporting; and

      5.    The registrant's other certifying officers and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of the registrant's board of directors (or persons
            performing the equivalent functions):

            a)    All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b)    Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: August 6, 2004

                               /s/ Charles P. Kirk
                               ------------------------
                               Charles P. Kirk
                               Senior Vice President and Chief Financial Officer

                                                                    EXHIBIT 32.1

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                      AS ADOPTED PURSUANT TO SECTION 906 OF
                         THE SARBANES-OXLEY ACT OF 2002

      In connection with the Quarterly Report of Big 5 Sporting Goods
Corporation (the "Company") on Form 10-Q for the period ending June 27, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Steven G. Miller, President and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

      (1)   The Report fully complies with the requirements of section 13(a) or
            15(d) of the Securities Exchange Act of 1934, as amended; and

      (2)   The information contained in the Report fairly presents, in all
            material respects, the financial condition and result of operations
            of the Company.

/s/Steven G. Miller
- ------------------------

Steven G. Miller
President and Chief Executive Officer
August 6, 2004

A signed original of this written statement required by Section 906 has been
provided to Big 5 Sporting Goods Corporation and will be retained by Big 5
Sporting Goods Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.

                                                                    EXHIBIT 32.2

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                      AS ADOPTED PURSUANT TO SECTION 906 OF
                         THE SARBANES-OXLEY ACT OF 2002

      In connection with the Quarterly Report of Big 5 Sporting Goods
Corporation (the "Company") on Form 10-Q for the period ending June 27, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Charles P. Kirk, Senior Vice President and Chief Financial Officer
of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

      (1)   The Report fully complies with the requirements of section 13(a) or
            15(d) of the Securities Exchange Act of 1934, as amended; and

      (2)   The information contained in the Report fairly presents, in all
            material respects, the financial condition and result of operations
            of the Company.

/s/ Charles P. Kirk
- -----------------------
Charles P. Kirk
Senior Vice President and Chief Financial Officer
August 6, 2004

A signed original of this written statement required by Section 906 has been
provided to Big 5 Sporting Goods Corporation and will be retained by Big 5
Sporting Goods Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.