This letter will clear up any misunderstanding you may have regarding our current lease.

After receiving your letter of January 7th, I explained to you that I would be willing to lower the rent to a fixed rate of $ 2590.000 per month in exchange for the garage area along with extending the term of the lease for three (3) additional years and all other terms and conditions would remain the same. I then prepaired and faxed the "LEASE MODIFICATION AGREEMENT" to you at your work. After several conversations in witch you made it clear that you were not prepaired to guarantee a three (3) year extension of the lease, I told you that, "at the most", I would "think about" waiving the schedualed 2% rent increase for 01/01/02. After thinking about it and prior to your letter dated Feb. 7, 2002. I informed you that we will stay with the terms of the existing lease "as is" and that I could not waive the schedualed rent increace or lower the rent in exchange for the garrage without the lease extension as outlined in the "LEASE MODIFICATION AGREEMENT.

I have based this decision on several factors.

First and above all is that my mortgage agreement is based on the terms of my existing leases and to lower the rent without an extension of the lease will jeopardize my mortgage as it is subject to being "called".

Second, you and I renegociated the terms of the original lease resulting in a substancial decrease in the amount of rent, a substancial decrease in the percentage of all schedualed increases and a decrease in the total amount of years of the lease as part of the asignment of lease from the previous owners.

Third, on your request I waived the schedualed rent increase for a full year in 2000 and I can not afford to do so again.

Fourth is that a year ago I suggested, gave you my express permision and even encouraged you to sublet the garage area as storage and you have not made a serious attempt to do so.

Last, I asked that you forward a copy of your "financials" for the past three years for review as a prerequisite and you have not complied.