McKinley Equipment Corporation
17611 Armstrong Avenue
Irvine, CA 92614


January 16, 2003


U .S. CONTINENTAL
Attention: Mr. Lance Dermeik                     Proposal # Hansens-1-16-03-PBR2
1001 Pomona Rd.
Corona, Ca. 91720
Re; Hansens Project, Corona, California


Following is the proposal we have been  discussing  for the  additional  storage
requirement. We are partnering with Hannibal Industries structural steel racking
and Advanced  Storage  Solutions 5 deep cart system and are pleased to offer the
following storage proposal for your approval.

System Parameters

The  system  following  takes  into  consideration  Hansen's  requirement  for a
"flexible" system that can be reconfigured as Hansens product mix changes.

We have consulted with Mr. Jerry Hefner, the fire consultant of record. Hansen's
commodities are able to be stored up to 27' with the in place  EFSR-25-M  system
or within 36" of the  sprinkler  heads.  The first two pallets will be stored on
the floor ( as is the current layout) and having three levels of carts above for
a total of 5 levels.  Hansen's can change the  elevations to suit there needs in
the  future as the  structure  and carts are  designed  based on an average of a
2300# load.

The system is based on 42" wide x 48" deep  pallets,  up to 2,300#  average  per
pallet.

System layout is based on using four rows of 5 deep of push back rack system.

Four rows of 5 deep x 5 high 18-1/2 bays wide, 37 lanes (3@ 5-1/2 bays each plus
2 additional bays) resulting in 3,700 pallet positions.

INSTALLATION
Installation will be staged.  First section will be installed  approximately mid
January.  Installation is based on doing 1 section at a time. One section can be
completed in five 9 hour days.


PLEASE SEE FOLLOWING FOR CONFIRMING PRICING AND PROPOSAL




January 16, 2003



U.S. CONTINENTAL
Attention: Mr. Lance Dermeik                    Proposal # Hansens-1-16-03 PB-R3
1001 Pomona Rd
Corona, Ca. 91720
Re: Hansen's Project, Corona, California


PROPOSAL
Total System Price, Delivered, Installed, Tax Included                     $____
Cost per pallet position 5 deep = $____,
Option Increase upright height from 276" to 300" for future
        flexibility, Add                                                   $____
Plan Check and permit Fees from City of Corona, Add                        $____
CAD Drawing services, Add                                                  $____
Total Cost of System Components, delivered, Installed, Tax Included        $____

Notes:
1. Sprinklers if Needed                                              $ By Others
2. Seismic Calculations, Add                                               $____
3. Structural Permit Processing by McKinley,                               $____
4. Actual Cost of Plan Check and Permit fees to be prepaid by
        McKinley and invoiced directly to Hansen' s for payment.
5. Fire Permit: By Others-Jerry Hefner and Associates (previous consultant)
6. Soils and slab testing, if needed is by others.
7. Shipment of Rack:           5-6 weeks
8. Shipment of Advance Carts:  6 weeks.
9. Installation Duration:      6 days per section.
10.Terms: 30% down ($____), 40% ($____ upon shipment)and 30% ($____)
        net 15 days upon completion with approved credit.
11.  Proposal valid for 90 days.
12.  All equipment rentals for installation are included in above price

We are looking forward to continuing our relationship.

Sincerely,

Marcus Crockett                               Accepted By /s/ Hilton Schlosberg
Sales Manager                                 Date         1/20/03