Document:

APPCO
      41

    

    LAND
      AND BUILDING LEASE AGREEMENT

    

    LANDLORD:

    YA
      Landholdings, LLC

    a
      Delaware limited liability company

    

    TENANT:

    Appalachian
      Oil Company, Inc.,

    a
      Tennessee corporation

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    LAND
      AND BUILDING LEASE AGREEMENT

    TABLE
      OF CONTENTS

    

    
      	
              1.

            	
              DEFINITIONS

            	
              1

            
	 	
              1.1

            	
              Lease
                Year

            	
              1

            
	 	
              1.2

            	
              Hazardous
                Material

            	
              1

            
	 	
              1.3

            	
              Wastes

            	
              2

            
	 	
              1.4

            	
              Environmental
                Laws

            	
              2

            
	 	
              1.5

            	
              Storage
                Tank System

            	
              
                2

              

            
	 	
              1.6

            	
              Release

            	
              
                2

              

            
	
              2.

            	
              CONDITION
                OF THE PREMISES

            	
              
                2

              

            
	
              3.

            	
              TERM

            	
              3

            
	 	
              3.1

            	
              Primary
                Term

            	
              
                3

              

            
	 	
              3.2

            	
              First
                Option to Extend

            	
              
                3

              

            
	 	
              3.3

            	
              Second
                Option to Extend

            	
              
                3

              

            
	 	
              3.4

            	
              Third
                Option to Extend

            	
              
                3

              

            
	 	
              3.5

            	
              Fourth
                Option to Extend

            	
              4

            
	 	
              3.6

            	
              Surrender
                of Premises; Holding Over

            	
              
                4

              

            
	
              4.

            	
              BASE
                MONTHLY RENT

            	
              
                4

              

            
	 	
              4.1

            	
              Triple
                Net Lease

            	
              
                4

              

            
	 	
              4.2

            	
              BaseMonthlyRent

            	
              
                5

              

            
	 	
              4.3

            	
              Adjustment
                Date

            	
              
                5

              

            
	
              5.

            	
              USE
                OF THE PREMISES; COMPLIANCE

            	
              
                5

              

            
	 	
              5.1

            	
              Use
                of the Premises

            	
              
                5

              

            
	 	
              5.2

            	
              Compliance

            	
              6

            
	
              6.

            	
              PROPERTY
                TAXES, OTHER CHARGES, ASSESSMENTS AND UTILITIES

            	
              6

            
	 	
              6.1

            	
              Tenant’s
                Required Payments

            	
              
                6

              

            
	 	
              6.2

            	
              Payments
                Not Required by Tenant

            	
              7

            
	 	
              6.3

            	
              Assessments

            	
              8

            
	 	
              6.4

            	
              Utility
                Payments

            	
              
                8

              

            
	 	
              6.5

            	
              Tenant’s
                Right to Contest Utility Charges, Contest Taxes and Seek Reduction
                of
                Assessed Valuation of the Premises

            	
              
                8

              

            
	 	
              6.6

            	
              Landlord
                Not Required to Join in Proceedings or Contest Brought by 
                Tenant

            	
              
                8

              

            
	 	
              6.7

            	
              Partial
                Lease Years and Adjustment of Taxes

            	
              9

            
	
              7.

            	
              FURNITURE,
                FIXTURES AND EQUIPMENT

            	
              
                9

              

            
	 	
              7.1

            	
              Furniture,
                Fixtures, and Equipment

            	
              9

            
	 	
              7.2

            	
              Landlord’s
                Waiver

            	
              
                9

              

            
	 	
              7.3

            	
              Removal
                of Tenant’s Personal Property at Expiration of Lease

            	
              
                9

              

            
	 	
              7.4

            	
              Right
                to Affix Signs

            	
              
                10

              

            
	
              8.

            	
              MAINTENANCE
                AND REPAIRS OF THE PREMISES

            	
              
                10

              

            
	 	
              8.1

            	
              Obligation
                to Maintain the Premises

            	
              
                10

              

            
	 	
              8.2

            	
              Obligation
                to Keep the Premises Clear

            	
              
                10

              

            
	
              9.

            	
              ALTERATIONS
                AND IMPROVEMENTS

            	
              11

            

    

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    

    
      	 	
              9.1

            	
              Right
                to Make Alterations

            	
              11

            
	 	
              9.2

            	
              Tenant
                Shall Not Render Premises Liable For Any Lien

            	
              11

            
	
              10.

            	
              INDEMNITY
                AND INSURANCE

            	
              12

            
	 	
              10.1

            	
              Indemnification

            	
              
                12

              

            
	 	
              10.2

            	
              Insurance
                Company Requirement

            	
              
                12

              

            
	 	
              10.3

            	
              Insurance
                Certificate Requirements

            	
              
                12

              

            
	 	
              10.4

            	
              Minimum
                Acceptable Insurance Coverage Requirements

            	
              13

            
	 	
              10.5

            	
              Additional
                Insureds

            	
              15

            
	 	
              10.6

            	
              Mortgage
                Endorsement

            	
              
                15

              

            
	 	
              10.7

            	
              Renewals,
                Lapses or Deficiencies

            	
              
                15

              

            
	 	
              10.8

            	
              Waiver
                of Subrogation

            	
              16

            
	
              11.

            	
              PARTIAL
                AND TOTAL DESTRUCTION OF THE PREMISES

            	
              16

            
	 	
              11.1

            	
              Damage
                or Destruction of Premises

            	
              16

            
	 	
              11.2

            	
              Damage
                or Destruction During the Last Twenty-four (24) Months of the
                Term

            	
              16

            
	
              12.

            	
              CONDEMNATION

            	
              17

            
	 	
              12.1

            	
              Condemnation
                Damages

            	
              
                17

              

            
	 	
              12.2

            	
              Termination
                of Lease Due to Condemnation

            	
              
                17

              

            
	
              13.

            	
              ASSIGNMENT
                AND SUBLETTING

            	
              18

            
	 	
              13.1

            	
              Tenant’s
                Right of Assignment and Subletting

            	
              18

            
	 	
              13.2

            	
              Assignment
                Without Landlord’s Consent

            	
              18

            
	 	
              13.3

            	
              Assignment
                with Landlord’s Consent

            	
              19

            
	 	
              13.4

            	
              Subletting
                Without Landlord’s Consent

            	
              19

            
	 	
              13.5

            	
              Landlord’s
                Option to Preserve Subtenancies

            	
              19

            
	 	
              13.6

            	
              Rent
                from Subletting

            	
              19

            
	 	
              13.7

            	
              Continuing
                Obligation of Tenant

            	
              20

            
	 	
              13.8

            	
              Landlord’s
                Right of Assignment

            	
              20

            
	
              14.

            	
              DEFAULT
                AND TERMINATION

            	
              20

            
	 	
              14.1

            	
              Event
                of Default

            	
              20

            
	 	
              14.2

            	
              Landlord’s
                Remedies

            	
              21

            
	 	
              14.3

            	
              Right
                of Landlord to Re-Enter

            	
              24

            
	 	
              14.4

            	
              Surrender
                of Premises

            	
              24

            
	 	
              14.5

            	
              Interest
                Charges

            	
              24

            
	 	
              14.6

            	
              Default
                by Landlord

            	
              25

            
	
              15.

            	
              RIGHT
                OF INSPECTION

            	
              25

            
	
              16.

            	
              WAIVER
                OF BREACH

            	
              25

            
	
              17.

            	
              NOTICES

            	
              25

            
	 	
              17.1

            	
              Notice
                Requirements

            	
              25

            
	 	
              17.2

            	
              Payments
                Under Lease

            	
              26

            
	
              18.

            	
              RELATIONSHIP
                OF THE PARTIES

            	
              27

            
	
              19.

            	
              SUBORDINATION,
                ATTORNMENT AND ESTOPPEL

            	
              27

            
	 	
              19.1

            	
              Subordination
                and Non-Disturbance

            	
              27

            
	 	
              19.2

            	
              Attornment

            	
              27

            
	 	
              19.3

            	
              Tenant
                Estoppel Certificate

            	
              
                27

              

            
	 	
              19.4

            	
              Landlord
                Estoppel Certificate

            	
              
                27

              

            
	 	
              19.5

            	
              Leasehold
                Mortgage

            	
              28

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

    
      	
              20.

            	
              ATTORNEYS’
                FEES

            	
              30

            
	 	
              20.1

            	
              Recovery
                of Attorneys’ Fees and Costs of Suit

            	
              30

            
	 	
              20.2

            	
              Party
                to Litigation

            	
              
                30

              

            
	
              21.

            	
              AUTHORITY
                TO MAKE LEASE; COVENANT OF QUIET ENJOYMENT

            	
              
                30

              

            
	 	
              21.1

            	
              Full
                Power and Authority to Enter Lease

            	
              
                30

              

            
	 	
              21.2

            	
              Quiet
                Enjoyment

            	
              
                30

              

            
	
              22.

            	
              HAZARDOUS
                MATERIAL

            	
              
                30

              

            
	 	
              22.1

            	
              Compliance
                Generally

            	
              
                30

              

            
	 	
              22.2

            	
              Tenant’s
                Responsibility for Hazardous Materials

            	
              31

            
	 	
              22.3

            	
              Tenant’s
                Environmental Indemnification

            	
              
                31

              

            
	 	
              22.4

            	
              Tenant’s
                Notification Obligations

            	
              32

            
	 	
              22.5

            	
              Survival

            	
              
                32

              

            
	
              23.

            	
              GENERAL
                PROVISIONS

            	
              
                32

              

            
	 	
              23.1

            	
              Recitals

            	
              
                32

              

            
	 	
              23.2

            	
              Gender;
                Number

            	
              
                32

              

            
	 	
              23.3

            	
              Captions

            	
              
                32

              

            
	 	
              23.4

            	
              Exhibits

            	
              33

            
	 	
              23.5

            	
              Entire
                Agreement

            	
              
                33

              

            
	 	
              23.6

            	
              Drafting

            	
              
                33

              

            
	 	
              23.7

            	
              Modification

            	
              
                33

              

            
	 	
              23.8

            	
              Joint
                and Several Liability

            	
              
                33

              

            
	 	
              23.9

            	
              Enforceability

            	
              
                33

              

            
	 	
              23.10

            	
              Severability

            	
              
                33

              

            
	 	
              23.11

            	
              Successors
                and Assigns

            	
              34

            
	 	
              23.12

            	
              Independent
                Covenants

            	
              
                34

              

            
	 	
              23.13

            	
              Limitation
                on Landlord’s Liability

            	
              
                34

              

            
	 	
              23.14

            	
              Waiver
                of Trial by Jury

            	
              
                34

              

            
	 	
              23.15

            	
              Characterization
                of Lease

            	
              
                34

              

            
	 	
              23.16

            	
              Counterparts

            	
              35

            
	 	
              23.17

            	
              Force
                Majeure

            	
              35

            
	 	
              23.18

            	
              Confidentiality

            	
              35

            

    

     

    EXHIBIT
      “A” -LEASED PREMISES

    Exhibit
      “B” —
      Memorandum
      of Lease

    Exhibit
      “C” —
      Certificate
      of Liability Insurance and Evidence of Property Insurance

    Exhibit
      “D” —
      Form
      of
      Subordination, Non-Disturbance and Attornment Agreement

    Exhibit
      “E” - Not Applicable

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    LAND
      AND BUILDING LEASE AGREEMENT

    

    This
      Land
      and Building Lease Agreement (this “Lease”),
      dated
      for
      reference purposes
      only as of ,
      is
      made
      by and between YA
      Landholdings, LLC, a Delaware limited liability company (“Landlord”),
      and
      Appalachian
      Oil Company, Inc.,
      a
      Tennessee corporation (“Tenant”),
      with
      reference to the recitals set forth below.

    

    RECITALS

    

    A.
      Landlord is the owner of a certain real property identified as the “Leased
      Premises,”
      attached hereto and incorporated herein as Exhibit
      “A”,
      together
      with all improvements located thereon, but
      not
      Tenant’s Personal Property (as defined in Section 7.1), and which real property
      shall include all of Landlord’s right, title and interest in and to all
      roadways, sidewalks, walkways, parkways, driveways, common areas, landscaped
      areas and similar areas and facilities and appurtenances thereunto belonging
      (all of the foregoing real properties, improvements and appurtenances being
      hereinafter collectively referred to as the “Premises”).

    

    B.
      Landlord desires to lease the Premises to Tenant, and Tenant desires to lease
      the Premises from Landlord, pursuant to the provisions of this
      Lease.

    

    1.
      DEFINITIONS

    

    The
      following terms, when used in this Lease, shall have the meaning set forth
      in
      this Section.

    

    
      	1.1	
              Lease
                Year

            

    

    

    The term
      “Lease
      Year” shall
      mean the first twelve (12) full calendar months after the Commencement Date
      (as
      defined in Section 3.1) and each subsequent twelve (12) month period thereafter
      during the term and any extensions. If the Commencement Date is other than
      the
      first day of the month, then the first Lease Year also will include the partial
      month in which the Commencement Date occurs.

    

    
      	1.2	
              Hazardous
                Material

            

    

    

    The
      term“Hazardous
      Material” means
      any
      and all hazardous, toxic or radioactive substances or materials, including
      but
      not limited to asbestos or asbestos-containing materials, petroleum and
      petroleum products (including without limitation, gasoline and diesel),
      pollutants, pollution, contaminants or contamination as those terms are defined,
      designated or otherwise regulated under any applicable Environmental Law and
      includes Wastes (as such terms are herein defined).

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	1.3	
              Wastes

            

    

     

    The
      term“Wastes”
      means
      any
      and all chemical, petroleum, or biological wastes, emissions or discharges,
      whether hazardous or non-hazardous, liquid, solid or gaseous, and whether
      from any production, operation, maintenance, manufacturing, processing, storage,
      use or other activity, where such wastes, contaminants, emissions or discharges
      are regulated under Environmental Laws.

    

    
      	1.4	
              Environmental
                Laws

            

    

    

    The
      term
“Environmental
      Laws” means
      all
      federal, state and local statutes, regulations, ordinances, rules, policies,
      directives, orders, demands or requirements of any government agency, in each
      case solely to the extent having the force of law, and all common law, to the
      extent regulating, relating to, affecting or imposing liability or other
      obligations concerning Hazardous Materials or protecting public health or safety
      or the environment, including with respect to the occupational health or
      environmental conditions on or about the Premises, as now exist or may at any
      later time be adopted or amended, including laws and regulations to the extent
      relating to Storage Tank Systems, gasoline service stations, Hazardous
      Materials, Release reporting requirements, noise abatement requirements and
      provisions thereof protecting natural resources, species and
      habitat.

    

    
      	1.5	
              Storage
                Tank System

            

    

    

    The
      term“Storage
      Tank System” means
      a
      complex of one or more underground or above ground storage tanks and their
      associated underground, above-ground, and/or connected piping and related fuel
      dispensing, pumping, mechanical, control and monitoring or detection devices,
      facilities or equipment.

    

    
      	1.6	
              Release

            

    

    

    The
      term“Release”
      means
      any
      spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
      escaping, leaching, dumping, or disposing into the environment of any Hazardous
      Material.

    

    2.
      CONDITION OF THE PREMISES

    

    Landlord
      leases to Tenant and Tenant leases from Landlord the Premises in an “AS
      IS, WHERE IS, WITH ALL FAULTS” condition with
      no
      representations or warranties whatsoever and on the terms and conditions set
      forth in this Lease. Tenant acknowledges that it has occupied the Premises
      for a
      substantial period of time prior to the Commencement Date and that Tenant is
      familiar with the condition of the Premises, and Tenant further acknowledges
      and
      agrees that other than as set forth in this Lease: (i) no representations have
      been or are made, or responsibility assumed by Landlord with respect to the
      Premises or its operations, or the condition or repair of the Premises, or
      as to
      any fact, circumstance, thing or condition which may affect or relate to the
      Premises, except as specifically set forth in this Lease; (ii) the Premises
      are
      leased in an “AS
      IS, WHERE IS, WITH ALL FAULTS” condition
      as of the Commencement Date; and (iii) Landlord shall have no obligation to
      alter, restore, improve, repair or develop the Premises, and further shall
      have
      no obligation to remove therefrom any parties or items of personal property,
      or
      other trade fixtures or equipment which may be upon the
      Premises.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    3.
      TERM

    

    
      	3.1	
              Primary
                Term

            

    

    

    The
      effective date (the “Commencement
      Date”) of
      this
      Lease shall be the date upon which escrow is deemed closed pursuant to that
      certain Purchase Agreement of even date herewith by and between Tenant, as
      “Seller,” and Landlord, as “Buyer” (“Purchase
      Agreement”). The
      expiration date (the“Expiration
      Date”) of
      the primary
      term
      (the “Primary Term”) of
      this
      Lease shall be the last day of the month which is twenty (20) Lease Years
      following the Commencement Date, unless terminated earlier as provided herein
      or
      extended as set forth in Sections 3.2, 3.3, 3.4, and 3.5. References to the
      term
      of the Lease shall include extensions, if any; and references in this Lease
      to
      the Expiration Date shall refer to the expiration of any Extension Periods
      which
      may be exercised by Tenant pursuant to this Lease. Except as otherwise expressly
      stated, the terms and conditions of this Lease shall remain in effect during
      any
      extension, renewal or holdover of the Primary Term. Concurrently with the
      recording of the deed transferring ownership of the Premises to Landlord, a
      Memorandum of Lease substantially in the form of Exhibit
      “B”
      attached hereto and incorporated herein, may be recorded by and at the expense
      of Tenant with respect to the Premises.

    

    
      	3.2	
              First
                Option to Extend

            

    

    

    One
      hundred eighty (180) days prior to the expiration of the Primary Term, provided
      there are no uncured monetary Events of Default (as defined in Section 14)
      existing under the Lease, Tenant may extend the term of this Lease for an
      additional sixty (60) months by notifying Landlord of such intention in writing
      (“First
      Extension Period”). The maximum
      term of the Lease with one extension is twenty five (25) Lease
      Years.

    

    
      	3.3	
              Second
                Option to Extend

            

    

    

    One
      hundred eighty (180) days prior to the expiration of the First Extension Period,
      provided there are no uncured monetary Events of Default existing under the
      Lease, Tenant may extend the term of this Lease for an additional sixty (60)
      months by notifying Landlord of such intention in writing (“Second
      Extension Period”). The
      maximum term of the Lease with two extensions is thirty (30) Lease
      Years.

    

    
      	3.4	
              Third
                Option to Extend

            

    

    

    One
      hundred eighty (180) days prior to the expiration of the Second Extension
      Period, provided there are no uncured monetary Events of Default existing under
      the Lease, Tenant may extend the term of this Lease for an additional sixty
      (60)
      months by notifying Landlord of such intention in writing (“Third
      Extension Period”). The
      maximum term of the Lease with three extensions is thirty five (35) Lease
      Years.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	3.5	
              Fourth
                Option to Extend

            

    

    

    One
      hundred eighty (180) days prior to the expiration of the Third Extension Period,
      provided there are no uncured monetary Events of Default existing under the
      Lease, Tenant may extend the term of this Lease for an additional sixty (60)
      months by notifying Landlord of such intention in writing
      (“Fourth Extension Period”). The
      maximum term of the Lease with
      four
      extensions is forty (40) Lease Years.

    

    
      	3.6	
              Surrender
                of Premises; Holding Over

            

    

    

    On
      the
      last day or sooner termination of the term of this Lease, Tenant shall quit
      and
      surrender the Premises, together with all alterations, vacant and free of all
      tenancies and any leasehold rights therein and in good condition and repair,
      normal wear and tear and damage from casualty excepted, broom clean and free
      of
      violations of applicable laws caused or permitted by Tenant, its subtenants,
      licensees, concessionaires, contractors, agents or employees and shall surrender
      all keys for the Premises to Landlord at the place then fixed for the payment
      of
      rent and shall inform Landlord of all combinations of locks, safes, and vaults,
      if any, in the Premises. If Tenant does not do so as set forth above, then
      after
      expiration of this Lease, it will be a month-to-month tenant upon the applicable
      conditions of this Lease at 200% of the then applicable Base Monthly Rent.
      If
      the Premises are not surrendered as and when aforesaid, Tenant shall indemnify
      Landlord from and against loss or liability resulting from the delay by Tenant
      in so surrendering the Premises, including without limitation, any claims made
      by any succeeding occupant or purchaser founded on such delay. Tenant’s
      obligations under this Section shall survive the expiration or earlier
      termination of this Lease.

    

    4.
      BASE MONTHLY RENT

    

    
      	4.1	
              Triple
                Net Lease

            

    

    

    This
      is a
      triple net lease. It is the intention of Landlord and Tenant that the Base
      Monthly Rent (as defined below) and other sums and charges provided herein
      shall
      be absolutely net to Landlord. The Base Monthly Rent shall be payable in advance
      in consecutive monthly installments on the first day of each month during the
      Term. Except as otherwise specifically set forth in this Lease, Tenant shall
      pay, as additional rent, all costs, charges, obligations, assessments, and
      expenses of every kind and nature against or relating to the Premises or the
      use, occupancy, area, possession, leasing, operation, management, maintenance,
      or repair thereof, that may arise or become due during the term hereof, or
      that
      may pertain to this transaction, whether or not now customary or within the
      contemplation of the parties hereto, and which, except for the execution and
      delivery of this Lease, would have been payable by Landlord, but in no event
      shall Tenant be obligated to pay any (i) of Landlord’s income, profits, gross
      receipts, excise, estate or similar taxes, (ii) expenses of debt service
      relating to any mortgage, deed of trust or other financing entered into by
      Landlord or which shall encumber Landlord’s interest in the Premises, or (iii)
      expenses, costs or charges caused by the gross negligence or willful misconduct
      of Landlord, its agents or employees.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    
      	4.2	
              Base
                Monthly Rent

            

    

    

    Tenant
      shall pay
      to
      Landlord as base monthly rent
      (“Base Monthly Rent”) the sum
      of
      Five Thousand Four Hundred Sixteen and 67/Dollars ($5,416.67) per
      month.
      Effective
      on each Adjustment Date (as hereinafter defined) Base Monthly Rent shall be
      increased by TEN PERCENT (10%) of the Base Monthly Rent payable during the
      immediately preceding period. 

    

    If
      the
      Commencement Date is a date other than the first day of the month, Base Monthly
      Rent shall be payable by Tenant to Landlord in advance commencing upon the
      Commencement Date pro-rated based on the ratio that the number of days from
      the
      Commencement Date through the last day in the month containing the Commencement
      Date bears to the actual number of days in such month. Thereafter, Base Monthly
      Rent shall be payable on the first day of each calendar month thereafter,
      without prior notice, invoice, demand, deduction or offset whatsoever, except
      as
      otherwise provided in this Lease. Landlord shall have the right to accept all
      rent and other payments, whether full or partial, and to negotiate checks and
      payments thereof without any waiver of rights, irrespective of any conditions
      to
      the contrary sought to be imposed by Tenant. All rent shall be paid to Landlord
      at the address to which notices to Landlord are given. The Base Monthly Rent
      for
      any partial month shall be prorated based upon the actual number of days in
      the
      period subject to proration.

    

    
      	4.3	
              Adjustment
                Date

            

    

    

    “Adjustment
      Date” shall
      mean,
      as
      the
      case may require, the Fifth (5th),
      Tenth
      (10th)
      and
      Fifteenth (15th)
      anniversaries of the Commencement Date (provided, however, if the Commencement
      Date is other than the first day of the month, then “Adjustment Date” shall
      mean, as the case may require, the first day of the first month occurring after
      the Fifth (5th),
       Tenth
      (10th)
      and
      Fifteenth (15th)
      anniversaries of the Commencement Date), and the first day of the First
      Extension Period, Second Extension Period, Third Extension Period, Fourth
      Extension Period.

    

    5.
      USE OF
      THE PREMISES; COMPLIANCE

    

    
      	5.1	
              Use
                of the Premises

            

    

    

    Tenant
      shall use the Premises for a convenience food store and retail motor fuel sales
      (“Initial
      Use”),
      or
      for such other uses as Tenant may
      determine in Tenant’s reasonable business judgment and as Landlord shall approve
      in Landlord’s reasonable judgment, provided that such uses: (i) are lawful; (ii)
      are in compliance with applicable environmental, zoning and land use laws and
      requirements; and (iii) do not violate matters of record or restrictions
      affecting the Premises. Notwithstanding the foregoing, in no event may the
      Premises be used as a factory, processing or rendering plant, massage parlor,
      peep show store, head shop store, topless or strip club, adult book or video
      store (which shall mean a store which primarily sells or offers for sale
      sexually explicit printed materials, audio or video tapes, or sexual devices),
      or flea market.

    

    
      	5.2	
              Compliance

            

    

    

    Tenant,
      at Tenant’s sole expense, promptly shall comply with all applicable statutes,
      ordinances, rules, regulations, orders, covenants and restrictions of record,
      and requirements of governmental agencies that are in effect during the term
      or
      any part of the term hereof, regulating the use by Tenant of the
      Premises.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    6.
      PROPERTY TAXES, OTHER CHARGES, ASSESSMENTS AND UTILITIES

    

    
      	6.1	
              Tenant’s
                Required Payments

            

    

    

    
      	 	
              6.1.1

            	
              Tenant
                shall pay before delinquency and as additional rent, all Property
                Taxes
                and Other Charges (as such terms are defined herein) that accrue
                prior to,
                during, or are otherwise properly allocable to the term of this Lease.
                Property Taxes and Other Charges together are referred to herein
                as
                “Taxes.”

            

    

    

    
      	 	
              (i)

            	
              “Property
                Taxes” shall
                mean all taxes, assessments, excises, levies, fees, and charges (and
                any
                tax, assessment, excise, levy, fee, or charge levied wholly or partly
                in
                lieu thereof or as a substitute therefor or as an addition thereto)
                of
                every kind and description, general or special, ordinary or extraordinary,
                foreseen or unforeseen, secured or unsecured, whether or not now
                customary
                or within the contemplation of Landlord and Tenant, that are levied,
                assessed, charged, confirmed, or imposed on or against the Premises
                or any
                part thereof It is the intention of Landlord and Tenant that all
                new and
                increased taxes, assessments, levies, fees and charges be included
                within
                the definition of Property Taxes for the purpose of this
                Lease.

            

    

    

    
      	 	
              (ii)

            	
              “Other
                Charges” shall
                mean all taxes, assessments, excises, levies, fees, and charges
                (including, without limitation, common area
                maintenance charges, charges relating to the cost of providing
                facilities
                or services, and charges relating to documents or instruments of
                record
                affecting or encumbering the Premises), whether or not now customary
                or
                within the contemplation of Landlord and Tenant, that are levied,
                assessed, charged, confirmed, or imposed upon, or measured by, or
                reasonably attributable to (a) the Premises; (b) the cost or value
                of any
                leasehold improvements made in or to the Premises by or for Tenant,
                regardless of whether title to such improvements is vested in Tenant
                or
                Landlord; (c) Base Monthly Rent and all additional rent payable under
                the
                Lease, including, if applicable, Property Taxes, Other Charges, insurance,
                maintenance, and other costs incurred by Tenant by which Landlord
                may
                benefit, including, without limitation, any gross income tax or excise
                tax
                levied by any public or government authority with respect to the
                receipt
                of any such rents and costs; and (d) this transaction or any document
                to
                which Tenant is a party creating or transferring an interest or an
                estate
                in the Premises.

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.1.2

            	
              During
                the term of this Lease, Tenant shall also pay before delinquency,
                but not
                as additional rent, all taxes, assessments, excises, levies, fees
                and
                charges, whether or not now customary or within the contemplation
                of
                Landlord and Tenant, that are levied, assessed, charged, confirmed,
                or
                imposed upon, or measured by, or reasonably attributable to (a) any
                personal property of Tenant used in connection with the Premises;
                (b) the
                cost or value of Tenant’s furniture, fixtures, equipment, or personal
                property located in the Premises; (c) the possession, leasing, operation,
                management, maintenance, alteration, repair, use, or occupancy by
                Tenant
                of the Premises; and (d) any fees, charges, fines, penalties, costs,
                assessments, taxes, demands, orders, directives, or other requirements
                imposed by any governmental agency asserting jurisdiction, or under
                any
                Environmental Laws which arise from or relate to Tenant’s use of, or
                Tenant’s activities at, the Premises, including, but not limited to,
                Storage Tank System registration fees, any other applicable fees,
                and any
                consultant or attorneys’ fees related to or arising under any
                Environmental Laws.

            

    

    

    
      	 	
              6.1.3

            	
              In
                addition to the foregoing, during the term of this Lease, Tenant
                acknowledges and agrees it is obligated to and shall perform all
                obligations of the owner of the Premises under, and pay all expenses
                which
                the owner of the Premises may be required to pay in accordance with,
                any
                declarations or reciprocal easement agreements or any other documents
                or
                instruments of record now affecting the Premises (herein referred
                to
                collectively as the “REA’s”).
                Tenant shall promptly comply with all of the terms and conditions
                of the REA’s, including without limitation, all insurance requirements,
                regardless of whether any such requirements exceed the requirements
                otherwise set forth in Section 10
                below.

            

    

    

    Landlord
      shall cooperate with tenant as shall be required for Tenant to comply with
      the
      foregoing terms and conditions, including executing any documents and
      instruments as owner, which shall be required in connection
      therewith.

    

    
      	6.2	
              Payments
                Not Required by Tenant

            

    

    

    Anything
      herein to the contrary notwithstanding, Tenant shall not be required to pay
      any
      state or federal income or franchise, gross receipts, estate, profits or excise
      taxes of Landlord, or any state or federal estate, succession, inheritance,
      or
      transfer taxes of Landlord or any tax or other charge imposed with respect
      to
      the sale, exchange, financing or other disposition by Landlord, in whole or
      in
      part, of the Premises or Landlord’s interest in this Lease, or any sales or rent
      taxes or similar charges assessed with respect to the Base Monthly Rent or
      any
      additional rent due pursuant to this Lease. All of the foregoing taxes shall
      not
      be deemed to be included in Taxes and are the sole and exclusive responsibility
      of the Landlord, and Landlord shall file all required returns and make all
      necessary filings in connection therewith.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    
      	6.3	
              Assessments

            

    

    

    If
      any
      assessment for a capital improvement made by a public or governmental authority
      shall be levied or assessed against the Premises, and the assessment is payable
      either in a lump sum or on an installment basis, then Tenant shall have the
      right to elect the basis of payment; provided however, throughout the entire
      term of this Lease, Tenant shall pay all assessments that accrue prior to,
      during, or are otherwise allocable to the term of this Lease.

    

    
      	6.4	
              Utility
                Payments

            

    

    

    Tenant
      shall pay when due all charges for water, gas, electricity, and all other
      utilities furnished to or used upon the Premises during the term of this Lease,
      including all charges for installation, termination, and relocations of such
      service. Landlord, at its option, following any default by Tenant in making
      such
      payments, may require Tenant to furnish Landlord with evidence of payment of
      such charges.

    

    
      	6.5	
              Tenant’s
                Right to Contest Utility Charges, Contest Taxes and Seek Reduction
                of
                Assessed Valuation of the Premises

            

    

    

    Tenant,
      at Tenant’s sole cost and expense, shall have the right, at any time, to seek a
      reduction in the assessed valuation of the Premises or to contest any Taxes
      or
      utility charges that are to be paid by Tenant; provided however, Tenant shall
      (i) give Landlord contemporaneous written notice of any contest; (ii) indemnify
      and hold Landlord Indemnified Parties (defined below) harmless from all
      liability on account of such contest with respect to Property Taxes; (iii)
      take
      such action as is necessary to remove the effect of any lien which attached
      to
      any of the Premises or the improvements thereon due to such contest, or in
      lieu
      thereof, at Landlord’s election, and if required by applicable law, furnish
      Landlord with adequate security for the amount of the Taxes due plus interest
      and penalties; and (iv) in the event of a final determination adverse to Tenant,
      prior to enforcement, foreclosure or sale, pay the amount involved together
      with
      all penalties, fines, interest, costs, and expenses which may have accrued.
      If
      Tenant seeks a reduction or contests any Taxes or utility charges, the failure
      on Tenant’s part to pay the Taxes or utility charges shall not constitute a
      default as long as Tenant complies with the provisions of this Section. Tenant,
      on final determination of the proceeding or contest, shall within applicable
      grace periods pay or discharge any decision or judgment rendered, together
      with
      all costs, charges, interest, and penalties incidental to the decision or
      judgment.

    

    
      	6.6	
              Landlord
                Not Required to Join in Proceedings or Contest Brought by
                Tenant

            

    

    

    Landlord
      shall not be required to join in any proceeding or contest brought by Tenant
      unless the provisions of the law require that the proceeding or contest be
      brought by or in the name of Landlord or the owner of the Premises. In that
      case, Landlord shall join in the proceeding or contest or permit it to be
      brought in Landlord’s name as long as Landlord is not required to bear any
      cost.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	6.7	
              Partial
                Lease Years and Adjustment of Taxes

            

    

    

    Property
      Taxes (and Other Charges, as may be applicable) payable by Tenant in accordance
      with the terms of this Lease shall be appropriately adjusted for any partial
      Lease Year at the end of the Term. Upon the Expiration Date, Taxes which have
      accrued prior to the Expiration Date and are payable after the Expiration Date,
      shall be prorated and apportioned as of the Expiration Date based upon the
      actual number of days in the period subject to proration such that Tenant shall
      bear all expenses with respect to the Premises up through and including the
      Expiration Date. Any amount payable by Tenant shall be remitted to Landlord
      within ten (10) business days following the later of (i) the date the amount
      payable by Tenant hereunder is determined and (ii) the Expiration Date. Any
      excess prepaid Taxes shall be refunded to Tenant by Landlord within ten (10)
      business days of the Expiration Date. Taxes which cannot be ascertained with
      certainty as of the Expiration Date shall be prorated on the basis of the
      parties’ reasonable estimates of such amount(s) and shall be the subject of a
      final proration as soon thereafter as the precise amounts can be ascertained.
      The provisions of this paragraph shall survive the expiration or termination
      of
      this Lease.

    

    7.
      FURNITURE, FIXTURES AND EQUIPMENT

    

    
      	7.1	
              Furniture,
                Fixtures, and Equipment

            

    

    

    During
      the term Tenant may, at Tenant’s expense, place or install such furniture, trade
      fixtures, equipment, machinery, furnishings, face plates of signage and other
      articles of movable personal property (collectively, “Tenant’s
      Personal Property”)
      on the
      Premises as may be needed for the conduct of Tenant’s business. It is expressly
      understood that the term Tenant’s Personal Property as used herein shall in no
      event extend to leasehold improvements, fixtures or similar “vanilla shell”
items such as light fixtures, HVAC equipment, or other fixtures and equipment
      permanently affixed to the Premises. Tenant is authorized to access Tenant’s
      Personal Property for maintenance, repair and replacement purposes during the
      term of this Lease.

    

    
      	7.2	
              Landlord’s
                Waiver

            

    

    

    Tenant
      may finance Tenant’s Personal Property at any time and from time to time during
      the term of this Lease. Upon request of Tenant, Landlord shall execute and
      deliver to any lender a Landlord’s Waiver in such form as shall be requested by
      Tenant and reasonably acceptable to Landlord. Tenant may remove and replace
      Tenant’s Personal Property periodically during the term of this
      Lease.

    

    
      	7.3	
              Removal
                of Tenant’s Personal Property at Expiration of
                Lease

            

    

    

    At
      any
      time up to and including the expiration or earlier termination of the Lease,
      all
      or any part of Tenant’s Personal Property may be removed at the option of
      Tenant. At the expiration or earlier termination of the Lease, Landlord may
      require Tenant to remove Tenant’s Personal Property within five (5) business
      days following receipt of written notice from Landlord. Tenant immediately
      shall
      make such repairs and restoration of the Premises as may be necessary to repair
      any damage to the Premises from the removal of Tenant’s Personal Property. Any
      of Tenant’s Personal Property not so removed shall be deemed abandoned, and
      Landlord may cause such property to be removed from the Premises and disposed
      of, but the reasonable cost of any such removal shall be borne by Tenant. The
      provisions of this paragraph shall survive the expiration or termination of
      this
      Lease.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    
      	7.4	
              Right
                to Affix Signs

            

    

    

    Tenant
      shall have the right to decorate the Premises and affix signs customarily used
      in its business upon the windows, doors, interior and exterior walls of the
      Premises, and such free-standing signs as may seem appropriate to Tenant and
      are
      in compliance with applicable laws and are not expressly prohibited by any
      covenants, conditions and restrictions encumbering the Premises. Upon the
      expiration or earlier termination of the Lease, Tenant shall remove such signs
      within a reasonable time following the expiration or earlier termination of
      the
      Lease. Tenant promptly shall make such repairs and restoration of the Premises
      as are necessary to repair any damage to the Premises from the removal of the
      signs.

    

    8.
      MAINTENANCE AND REPAIRS OF THE PREMISES

    

    
      	8.1	
              Obligation
                to Maintain the Premises

            

    

    

    During
      the term of this Lease, Tenant shall, at its own expense, keep and maintain
      the
      entirety of the Premises in good order and repair, ordinary wear and tear
      excepted, including, but not limited to, the interior, exterior, foundations,
      floors, walls, roof and structure of the building; the sidewalks, curbs, trash
      enclosures, landscaping with sprinkler system (if installed), light standards,
      and parking areas which are a part of the Premises. Tenant shall make such
      repairs and replacements as may be necessary, regardless of whether the benefit
      of such repair or replacement extends beyond the term of this Lease. The
      Premises shall be returned to Landlord at the termination or expiration of
      this
      Lease in as good condition as received, ordinary wear and tear and casualty
      excepted. In the event of destruction of the Premises or any portion thereof
      by
      fire or casualty, the condition of the Premises upon termination of this Lease
      shall be governed

    by
      Section 11. Landlord shall have no obligation whatsoever to alter, remodel,
      improve, repair, renovate, retrofit or maintain the Premises or any portion
      thereof.

    

    
      	8.2	
              Obligation
                to Keep the Premises Clear

            

    

    

    Tenant
      shall keep the Premises, including sidewalks adjacent to the Premises and
      loading area allocated for the use of Tenant, clean and free from rubbish and
      debris at all times. Tenant shall store all trash and garbage within the
      Premises and arrange for regular pickup and cartage of such trash and garbage
      at
      Tenant’s expense.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    9.
      ALTERATIONS AND IMPROVEMENTS

    

    
      	9.1	
              Right
                to Make Alterations

            

    

    

    At
      all
      times during the term of this Lease, Tenant shall have the right to make
      alterations, additions and improvements (collectively, “Alterations”)
      to
      the
      interior or exterior of the Premises and parking areas adjacent to the Premises
      as more particularly set forth herein. Tenant shall have the right to make
      Alterations including, without limitation, the addition of food service items,
      in its reasonable business judgment at any time to the extent such Alterations
      are non-structural in nature; provided, however Tenant shall give Landlord
      at
      least ten (10) days’ prior written notice, for information purposes only, of the
      commencement of any such non-structural Alterations that will cost in excess
      of
      Four Hundred Thousand Dollars ($400,000). Notwithstanding the foregoing,
      Alterations that are structural in nature and which will cost in excess of
      Fifty
      Thousand Dollars ($50,000) shall not be made by Tenant without the prior written
      consent of Landlord, which consent shall not be unreasonably withheld or
      delayed, and which shall be deemed given if not denied within ten (10) business
      days after notice to Landlord. Any Alterations made or installed by Tenant
      shall
      remain upon the Premises and, at the expiration or earlier termination of this
      Lease, shall be surrendered with the Premises to Landlord. All Alterations
      shall
      be accomplished by Tenant in a good, expeditious, quality workmanlike manner,
      in
      conformity with applicable laws, regulations, ordinances, orders and covenants,
      conditions and restrictions encumbering the Premises. Landlord may, if required
      by applicable
      law, enter upon the Premises for the purpose of posting appropriate notices,
      including, but not limited to, notices of non-responsibility, provided that
      Landlord shall give reasonable notice to Tenant and shall not unreasonably
      interfere with the progress of such work. Landlord agrees to cooperate with
      Tenant in filing for any required permits and authorizations from the applicable
      governmental authorities.

    

    
      	9.2	
              Tenant
                Shall Not Render Premises Liable For Any
                Lien

            

    

    

    Tenant
      shall have no right, authority, or power to bind Landlord, or any interest
      of
      Landlord in the Premises, nor to render the Premises liable for any lien or
      right of lien for the payment of any claim for labor, material, or for any
      charge or expense incurred to maintain, to repair, or to make Alterations to
      the
      Premises. Tenant shall in no way be considered the agent of Landlord in the
      construction, erection, modification, repair, or alteration of the Premises.
      Notwithstanding the above, Tenant shall have the right to contest the legality
      or validity of any lien or claim filed against a Premises. No contest shall
      be
      carried on or maintained by Tenant after the time limits in the sale notice
      of
      the Premises for any such lien or claim unless Tenant (i) shall have duly paid
      the amount involved under protest; (ii) shall have procured and recorded a
      lien
      release bond or other security reasonably acceptable to Landlord in an amount
      reasonably necessary to prevent a foreclosure of the Premises as a result of
      such lien or claim during the pendency of such contest; or (iii) shall have
      procured a stay of all proceedings to enforce collection. Upon a final adverse
      determination of any contest, Tenant shall pay and discharge the amount of
      the
      lien or claim determined to be due, together with any penalties, fines,
      interest, cost, and expense which may have accrued, and shall provide proof
      of
      payment to Landlord.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    10.
      INDEMNITY AND INSURANCE

    

    
      	10.1	
              Indemnification

            

    

    

    Tenant
      shall indemnify, defend, and protect Landlord, its agents, employees, officers,
      affiliates, investors, partners and lenders (the “Landlord
      Indemnified Parties”)
      and
      hold Landlord Indemnified Parties harmless, from any and all loss, cost, damage,
      expense and/or liability (including, without limitation, court costs and
      reasonable attorneys’ fees) incurred in connection with or arising at any time
      and from any cause whatsoever in or about the Premises which results from or
      relates to any claim brought by any person other than Landlord Indemnified
      Parties, other than any such loss, cost, damage, expense and/or liability caused
      by reason of the gross negligence or willful misconduct of Landlord Indemnified
      Parties including, without limiting the generality of the foregoing: (i) any
      default by Tenant in the observance or performance of any of the terms,
      covenants, or conditions of this Lease on Tenant’s part to be observed or
      performed; (ii) any condition of or on the Premises arising prior to the
      expiration of the term of the Lease or any occurrence or happening on the
      Premises arising prior to the expiration of the term of the Lease from any
      cause
      whatsoever, unless such condition, occurrence or happening shall have been
      caused by the gross negligence or willful misconduct of Landlord Indemnified
      Parties; or (iii) any acts, omissions, or negligence of Tenant or any person
      claiming by, through, or under Tenant, or of the contractors, agents, servants,
      employees, visitors, or licensees of Tenant in, on, or about the Premises,
      prior
      to the expiration of the Lease term (including, without limitation, any
      holdovers in connection therewith), including, without limitation, any acts,
      omissions, or negligence in the making or performance of any alterations,
      provided that this Section shall not apply to any environmental or occupational
      health matter whatsoever in that Article 22 deals with any indemnification
      or
      other arrangement between the parties with respect thereto. The provisions
      of
      this Section shall survive the expiration or sooner termination of this
      Lease.

    

    
      	10.2	
              Insurance
                Company Requirement

            

    

    

    Insurance
      required by this Lease shall be issued by companies holding a general
      policyholder’s rating of A-VIII or better as set forth in the most current issue
      of Best’s
      Insurance Guide
      and
      authorized to do business in the states in which the Premises are located.
      If
      this publication is discontinued, then another insurance rating guide or service
      generally recognized as authoritative shall be substituted by
      Landlord.

    

    
      	10.3	
              Insurance
                Certificate Requirements

            

    

    

    
      	 	
              10.3.1

            	
              Within
                ten (10) business days following Landlord’s request therefore, Tenant
                shall deliver to Landlord (i) evidence of the existence and amounts
                of the
                insurance with additional insured endorsements and loss payable clauses
                as
                required herein, and (ii) a Certificate of Liability Insurance in
                connection with Tenant’s liability policy(ies), and an Evidence of
                Property Insurance in connection with Tenant’s property policy(ies). No
                policy shall be cancelable or subject to reduction of coverage or
                other
                material modification except after ten (10) days’ prior written notice to
                Landlord. Neither the issuance of any insurance policy required hereunder,
                nor the minimum limits specified herein with respect to any insurance
                coverage, shall be deemed to limit or restrict in any way the liability
                of
                Tenant arising under or out of this
                Lease.

            

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.3.2

            	
              The
                insurance required to be maintained herein may be carried under blanket
                or
                umbrella policies.

            

    

    

    
      	10.4	
              Minimum
                Acceptable Insurance Coverage
                Requirements

            

    

    

    
      	 	
              10.4.1

            	
              Tenant
                shall, at Tenant’s expense, obtain and keep in full force during the term
                of this Lease a policy of combined single limit bodily injury and
                property
                damage insurance written on an occurrence basis insuring Tenant (with
                Landlord as an additional insured) against any liability arising
                out of
                ownership, use, occupancy, or maintenance of the Premises. The insurance
                shall be in an amount not less than One Million Dollars ($1,000,000)
                per
                occurrence; provided however, following receipt of written notice
                from
                Landlord the limits of such insurance shall be increased from time
                to time
                during the term of the Lease to such amount as may be deemed commercially
                reasonable by Landlord but which shall not be in excess of the limits
                generally applicable to other similar businesses. The policy shall
                provide
                blanket contractual liability coverage. However, the limits of the
                insurance shall not limit the liability of Tenant. In addition, Tenant
                shall, at Tenant’s expense, obtain and keep in full force during the term
                of this Lease an umbrella liability policy in an amount not less
                than Six
                Million Dollars ($6,000,000) in excess of primary insurance. The
                insurance
                to be maintained by Tenant pursuant to this Section 10.4.1 shall
                be
                primary and not contributory to any other insurance maintained by
                Landlord.

            

    

    

    
      	 	
              10.4.2

            	
              Tenant
                shall, at Tenant’s expense, obtain and keep in force during the term of
                this Lease a “Special Form” (as such term is used in the insurance
                industry) policy of property insurance covering loss or damage to
                the
                Premises. The insurance shall be in an amount not less than the full
                guaranteed replacement cost of the building(s) (less slab, foundation,
                supports and other customarily excluded improvements). The policy
                shall
                contain only standard printed exclusions and include an ordinance
                or law
                coverage endorsement covering increased costs resulting from changes
                in
                laws or codes, and demolition and removal of the damaged structure.
                In
                addition, the policy shall include an endorsement naming Landlord
                as “Loss
                Payee” thereunder; provided, however, notwithstanding the foregoing,
                payments up to and including Two Hundred Fifty Thousand Dollars ($250,000)
                shall be made directly to Tenant, and payments in excess of such
                amount
                shall be made jointly to Landlord and Tenant. In no event shall any
                deductible payable in connection with such policy exceed the higher
                of (i)
                Five Hundred Thousand Dollars ($500,000), as such amount shall be
                increased by a percentage equal to the percentage increase in the
                Base
                Monthly Rent pursuant to this Lease from time to time, or (ii) Twenty
                Five
                percent (25%) percent of the aggregate limit of liability under such
                policy.

            

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.4.3

            	
              If
                the Premises are located in Flood Zone A or V as defined by the Federal
                Emergency Management Agency (FEMA), Tenant shall, at Tenant’s expense,
                obtain and keep in force during the term of this Lease a policy of
                insurance covering loss or damage due to flood with respect to the
                Premises. Tenant may obtain such insurance through any available
                governmental programs providing for such coverage. Notwithstanding
                the
                foregoing, Tenant shall have the right to self-insure with respect
                to such
                insurance to the extent such self-insurance is not prohibited under
                the
                laws of the state where the Premises are
                located.

            

    

    

    
      	 	
              10.4.4

            	
              If
                the Premises are located within the State of California, or in any
                county
                which is classified as being in an earthquake territory 1 through
                11 by
                Insurance Services Office (“ISO”)
                or
                an earthquake zone of 1 through 3 by ISO, Tenant shall, at Tenant’s
                expense, obtain and keep in force during the term of this Lease a
                policy
                of insurance covering loss or damage due to earthquake with respect
                to the
                Premises. Tenant may obtain such insurance through any available
                governmental programs providing for such coverage. Notwithstanding
                the
                foregoing, Tenant shall have the right to self-insure with respect
                to such
                insurance to the extent such self-insurance is not prohibited under
                the
                laws of the state where the Premises are
                located.

            

    

    

    
      	 	
              10.4.5

            	
              Tenant
                shall also obtain and keep in force during the term of this Lease
                a
                worker’s compensation policy, insuring against and satisfying Tenant’s
                obligations and liabilities under the worker’s compensation laws of the
                state in which the Premises is located, including Employer’s Liability
                insurance, in an amount of not less than Five Hundred Thousand Dollars
                ($500,000). Notwithstanding the foregoing, Tenant shall have the
                right to
                self-insure with respect to worker’s compensation to the extent such
                self-insurance is not prohibited under the laws of the state where
                the
                Premises are located.

            

    

    

    
      	 	
              10.4.6

            	
              Should
                any financial assurance requirements pursuant to Environmental Laws
                be
                imposed on Tenant’s use of, or activities at, the Premises, Tenant
                promptly and timely shall comply with those requirements as they
                take
                effect. Tenant shall maintain pollution liability insurance in favor
                of
                Landlord which names Landlord as an additional insured as set out
                in
                Section 10.5 herein, and any third parties which might be affected,
                in an
                amount of at least One Million Dollars ($1,000,000) per occurrence
                providing coverage for the investigation and/or remediation of any
                Hazardous Materials released at, on, under or from the Premises,
                property
                damage (including, without limitation, natural resource damages)
                and
                compensation for personal injuries (“Environmental
                Insurance”). Within
                ten (10) business days following Landlord’s request therefor, Tenant shall
                provide a certificate of insurance evidencing such required coverage
                prior
                to the Commencement Date, and such certificate shall provide that
                the
                policy may not be cancelled or amended in any material respect without
                thirty (30) days’ prior written notice to Landlord. Tenant may obtain all
                or any portion of such insurance through any available governmental
                programs or funds providing such coverage.

            

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.4.7

            	
              If
                attached, Landlord acknowledges that the insurance described in the
                certificate of liability insurance and evidence of property insurance
                attached hereto as Exhibit
                “C”
                substantially satisfies the requirements of this
                Section.

            

    

    

    
      	10.5	
              Additional
                Insureds

            

    

    

    Tenant
      shall name Landlord and Landlord’s successor(s) and assignee(s), and any other
      affiliate or lender of Landlord as Landlord may designate from time to time,
      as
      additional insureds and loss payees on all insurance.

    

    
      	10.6	
              Mortgage
                Endorsement

            

    

    

    If
      requested by
      Landlord, the policies of insurance required to be maintained hereunder shall
      bear a standard first mortgage endorsement in favor of any holder or holders
      of
      a first mortgage lien or security interest in the Premises with loss payable
      to
      such holder or holders as their interests may appear.

    

    
      	10.7	
              Renewals,
                Lapses or Deficiencies

            

    

    

    Tenant
      shall, within ten (10) days of the expiration of such policies, furnish Landlord
      with renewal certificates of insurance or renewal binders. In the event of
      a
      lapse or deficiency of any insurance coverage specified herein for any reason,
      Landlord may immediately replace the deficient insurance coverage with a policy
      of insurance covering the Premises of the type and in the limits set forth
      above. Upon written notice from Landlord of the placement of insurance, Tenant
      shall immediately pay to Landlord, as additional rent, an amount equal to the
      total cost of premiums and expense of such insurance placement. Tenant shall
      not
      do or permit to be done anything that shall invalidate the insurance
      policies.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	10.8	
              Waiver
                of Subrogation

            

    

    

    Landlord
      and Tenant hereby release each other from liability caused by fire or other
      casualty for which insurance is carried hereunder by the party sustaining the
      loss, damage or injury at the time of such loss, damage or injury to the extent
      of any recovery by the injured party under such insurance, or what would have
      been recovered had such party carried the insurance required hereunder. Landlord
      and Tenant shall use reasonable efforts to obtain waivers of subrogation rights
      by the insurer against Landlord or Tenant, as the case may be, in all casualty
      insurance policies affecting any portion of any of the Premises in which
      Landlord or Tenant is not a named insured.

    

    11.
      PARTIAL AND TOTAL DESTRUCTION OF THE PREMISES

    

    
      	11.1	
              Damage
                or Destruction of Premises

            

    

    

    In
      the
      event any part or all of the Premises shall at any time during the term
      of
      this Lease be damaged in any material respects or destroyed, regardless of
      cause, Tenant shall give prompt notice to Landlord. Tenant shall repair and
      restore the Premises to at least the condition it was in immediately prior
      to
      the occurrence of such damage, including buildings and all other improvements
      on
      the Premises, as soon as circumstances permit and to the extent permitted by
      applicable law. Tenant shall hold Landlord free and harmless from any and all
      liability of any nature whatsoever resulting from such damage or destruction,
      and such repairs and restoration. Tenant, and not Landlord, shall be responsible
      for paying for any cost of repairs and restoration in excess of the proceeds
      available from insurance policies maintained by Tenant (“Tenant’s
      Policies”).
      Tenant is
      not
      entitled to any rent abatement during or resulting from any disturbance from
      partial or total destruction of the Premises, and in no event shall Tenant
      be
      entitled to terminate the Lease. Notwithstanding the foregoing, Tenant’s
      obligation to restore the Premises is conditioned upon (i) Landlord and the
      holders of any mortgage liens on the Premises making available to Tenant all
      insurance proceeds from Tenant’s Policies paid in connection with the loss, if
      any, which insurance proceeds shall be applied to restoration and (ii) Tenant
      being able to restore the Premises to a use and configuration which is the
      same
      as the Premises’ use and configuration immediately prior to the damage or
      destruction. 

    

    
      	11.2	
              Damage
                or Destruction During the Last Twenty-four (24) Months of the
                Term

            

    

    

    Notwithstanding
      anything contained herein to the contrary, Tenant may terminate this Lease
      upon
      giving written notice to Landlord within thirty (30) days following the date
      upon which the Premises or any Storage Tank System is damaged or destroyed,
      provided: (i) such damage or destruction occurs within the last two (2) years
      of
      the Primary Term or any Extension Period and (ii) the Premises is totally or
      substantially damaged or destroyed (as defined below). Tenant shall timely
      file
      an appropriate claim with its insurance carrier (in the event of an insured
      casualty) in connection with such damage or destruction and thereafter promptly
      pay over to Landlord the entirety of insurance proceeds received in connection
      with the loss, other then any proceeds attributable to Tenant’s Personal
      Property (the “Insurance
      Proceeds”).
      Tenant shall
      within ten (10) days after the date of Tenant’s termination notice to Landlord
      pay to Landlord a sum equal to the entirety of the self-insured retention,
      if
      any, in respect of the Premises. As used herein, the phrase “substantially
      damaged or destroyed” shall mean that the restoration or repair cost as
      estimated by at least two (2) reputable general contractors properly licensed
      in
      the State in which the Premises is located and reasonably acceptable to and
      approved by Landlord, exceeds twenty five percent (25%) of the replacement
      value
      of the improvements immediately prior to such damage or
      destruction.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    In
      the
      event Tenant shall have terminated the Lease as provided in the immediately
      preceding paragraph, Landlord and Tenant shall be released from all obligations
      and liabilities under the Lease, with the exception of those liabilities which
      accrued prior to the termination date and those obligations which, pursuant
      to
      the terms of the Lease, accrued prior to the termination date and survive
      termination or expiration of the Lease.

    

    12.
      CONDEMNATION

    

    
      	12.1	
              Condemnation
                Damages

            

    

    

    In
      the
      event of the taking or conveyance of the whole or any part of the Premises
      by
      reason of condemnation by any public or quasi-public body (“Condemnation”),
      Landlord and
      Tenant shall represent themselves independently in seeking damages before the
      condemning body. Each party shall be entitled to the amount awarded or
      apportioned respectively to each. Landlord shall be entitled to the entirety
      of
      the award with the exception of the following:

    

    
      	 	
              12.1.1

            	
              Any
                portion of the award attributable to Tenant’s leasehold improvements made
                to the Premises by Tenant in accordance with this Lease, which
                improvements Tenant has the right to remove from the Premises upon
                the
                expiration or termination of the Lease pursuant to the provisions
                of this
                Lease, but elects not to remove;

            

    

    

    
      	 	
              12.1.2

            	
              Any
                portion of the award attributable to Tenant’s Personal Property installed
                in the Premises in accordance with this Lease, which Tenant has the
                right
                to remove from the Premises upon the expiration or termination of
                the
                Lease pursuant to the provisions of this Lease, but which are to
                remain in
                the Premises as a result of such taking;
                and

            

    

    

    
      	 	
              12.1.3

            	
              Any
                portion of the award attributable to: (i) removing Tenant’s Personal
                Property; (ii) removing or relocating the Storage Tank System; (iii)
                damage or loss to Tenant’s business and good will and (iv) moving and
                relocation expenses.

            

    

    

    
      	12.2	
              Termination
                of Lease Due to Condemnation

            

    

    

    In
      the
      event the Condemnation materially adversely affects the use by Tenant of the
      Premises, Tenant may terminate the Lease by giving Landlord written notice
      of
      its intention to terminate the Lease within sixty (60) days of receipt of
      written notice of the Condemnation. The effective date of the termination shall
      be the date upon which fee simple interest is vested in the condemning
      authority, and Tenant shall be released from further obligations or liabilities
      thereafter arising under the Lease. In the event of termination, Base Monthly
      Rent, Property Taxes, Other Charges and any other items of additional rent
      (collectively, “Rent
      and Charges”) shall
      be
      prorated based upon the actual number of days in the period to be prorated.
      Within thirty (30) days following the termination, Landlord shall refund to
      Tenant any Rent and Charges paid to Landlord in advance of the termination.
      In
      the event Tenant elects not to terminate the Lease, Tenant may elect either
      to
      (i) require Landlord to pay over to Tenant the entire Condemnation award
      attributable to restoration of the Condemned Property, and Tenant shall restore
      the Condemned Property to as close to its condition prior to such condemnation
      as is reasonably possible, in which event the Base Monthly Rent shall not abate,
      or (ii) require Landlord to pay over to Tenant a portion of such Condemnation
      award equal to a percentage that the value of the Premises, in Tenant’s
      reasonable determination, following such condemnation bears the value of the
      Premises immediately before such Condemnation (“Post Condemnation Value
      Percentage”), in which event the Monthly Base Rent shall be abated by a
      percentage equal to 100% less the Post-Condemnation Value
      Percentage.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    13.
      ASSIGNMENT AND SUBLETTING

    

    
      	13.1	
              Tenant’s
                Right of Assignment and Subletting

            

    

    

    Except
      as
      otherwise set forth in this Section or in Section 19.5, Tenant shall not
      voluntarily or by operation of law assign or encumber its interest in this
      Lease
      or in the Premises, without first obtaining the written consent of Landlord,
      which consent shall not be unreasonably withheld or delayed.

    

    
      	13.2	
              Assignment
                Without Landlord’s Consent

            

    

    

    So
      long
      as no monetary Event of Default remains uncured at the time of the assignment,
      Tenant shall have the right to assign its interest in this Lease without the
      consent of Landlord: (i) to a Related Entity (as defined below); (ii) in
      connection with a merger, consolidation or acquisition involving the entirety
      of
      Tenant; or (iii) to any entity acquiring all or substantially all of Tenant’s
      assets; provided that: (a) Tenant shall notify Landlord in writing of the
      occurrence of any of the foregoing events within thirty (30) days, and shall
      provide a true and correct copy of the assignment and assumption agreement,
      together with such other documentation supporting or evidencing said event
      as
      may be reasonably requested by Landlord; and (b) the transferee assumes all
      of
      Tenant’s obligations hereunder in writing and agrees to perform all of the
      obligations of Tenant under this Lease. Upon such assumption by transferee
      Tenant shall be relieved and discharged from its liabilities, obligations or
      duties under this Lease accruing subsequent to the effective date of any such
      transfer. The term “Related
      Entity,” as
      used
      herein, means any person or entity which, directly or indirectly, controls,
      or
      is controlled by, or is also controlled by the same entity having a controlling
      interest in Tenant.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    
      	13.3	
              Assignment
                with Landlord’s Consent

            

    

    

    In
      addition to any assignments pursuant to Section 13.2, so long as no
      monetary Event
      of
      Default remains uncured at the time of the assignment, Landlord shall not
      unreasonably withhold consent to an assignment of this Lease to an individual
      or
      entity if such individual or entity has, in the reasonable opinion of Landlord,
      a record of timely payment of obligations and compliance with applicable laws,
      is a commercially and financially sound individual or entity, and has at least
      three (3) years of operating history reasonably acceptable to Landlord with
      respect to convenience stores. Tenant shall submit current financial statements
      of any proposed assignee together with Tenant’s request for Landlord’s approval
      of any proposed assignment. Tenant shall reimburse Landlord for all reasonable
      costs and expenses (including, without limitation, attorneys’ fees and expenses)
      actually paid by Landlord in connection with any requested assignment. Tenant
      expressly acknowledges and agrees that in the event of an assignment of this
      Lease, Tenant shall remain jointly and severally liable with the assignee for
      all of the obligations under this Lease, unless released by Landlord in writing
      pursuant to the terms of this Lease.

    

    
      	13.4	
              Subletting
                Without Landlord’s Consent

            

    

    

    So
      long
      as no Event of Default remains uncured at the time of the sublease, Tenant
      shall
      have the right to sublease or grant a license or franchise in connection with
      the Premises (including, without limitation, the addition of any quick service
      restaurant concepts or brands at any of the Premises, or the conversion of
      any
      existing quick service restaurant concepts or brands to another restaurant
      or
      concept, whether or not any sublease, license or franchise is to be granted
      in
      relation to the foregoing) without the consent of Landlord; provided that such
      use complies with Section 5.1 and Tenant shall notify Landlord in writing of
      the
      occurrence of any such event, and shall provide a true and correct copy of
      the
      sublease, license agreement or other relevant document, together with such
      other
      documentation supporting or evidencing said event as may be reasonably requested
      by Landlord. In no event shall Tenant be relieved or discharged from its
      liabilities, obligations, or duties under this Lease accruing subsequent to
      the
      effective date of any such subleasing.

    

    
      	13.5	
              Landlord’s
                Option to Preserve Subtenancies

            

    

    

    In
      the
      event of Tenant’s surrender of this Lease or the termination of this Lease in
      any other manner, Landlord shall, at Landlord’s option, succeed to the interest
      of Tenant as sublandlord thereunder, except that Landlord shall not be liable
      for any defaults of Tenant occurring prior to the date of such surrender or
      termination. No merger shall result from Tenant’s sublease of the Premises under
      this Section, Tenant’s surrender of this Lease, or the termination of this Lease
      in any other manner.

    

    
      	13.6	
              Rent
                from Subletting

            

    

    

    Upon
      the
      occurrence and during the continuance of a material Event of Default, Landlord
      may, upon written notice to Tenant and any subtenant of all or a part of the
      Premises, require any such subtenant to pay all rent from such subletting during
      such period directly to Landlord.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    
      	13.7	
              Continuing
                Obligation of Tenant

            

    

    

    Landlord’s
      acceptance of rent from any other person is not a waiver of any provision of
      this Section. Consent to one transfer is not a consent to any subsequent
      transfer. Landlord may consent to subsequent assignments or modifications of
      this Lease by Tenant’s assignee, without notifying Tenant or obtaining its
      consent. Such action shall not relieve Tenant’s liability under this Lease,
      except that Tenant shall not be liable for any extension of the term, increase
      in rentals or any modification to this Lease which increases Tenant’s liability
      hereunder or reduces Tenant’s rights hereunder made without Tenant’s prior
      written consent. The foregoing provisions shall not be deemed to require
      Landlord’s consent to any such transfer or any such subsequent transfer if such
      consent is not otherwise required pursuant to this Section.

    

    
      	13.8	
              Landlord’s
                Right of Assignment

            

    

    

    Landlord
      shall be free at all times, without need of consent or approval by Tenant,
      to
      assign its interest in this Lease and/or to convey fee title to the Premises
      or
      to mortgage its interest in the Premises. Each conveyance by Landlord of
      Landlord’s interest in the Lease or the Premises prior to expiration or
      termination hereof shall be subject to this Lease. Landlord or its successor
      shall give Tenant written notice of such assignment or conveyance, as
      applicable, and after such assignment or conveyance, the grantor shall be
      relieved of any obligations or liability as Landlord first arising after the
      date of such conveyance, and Tenant shall look solely to Landlord’s successor in
      interest for all future obligations of Landlord. Tenant hereby agrees to attorn
      to Landlord’s successors in interest, whether such interest is acquired by sale,
      transfer, foreclosure, deed in lieu of foreclosure, or otherwise. The term
      “Landlord” as used in this Lease, so far as covenants and obligations on the
      part of Landlord are concerned, shall be limited to mean and include only the
      owner at the time in question of the fee title of the Premises. Without further
      agreement, the transferee of such title shall be deemed to have assumed and
      agreed to observe and perform any and all obligations of Landlord hereunder
      during its ownership of the Premises.

    

    14.
      DEFAULT AND TERMINATION

    

    
      	14.1	
              Event
                of Default

            

    

    

    The
      occurrence of any of the following events (each an “Event
      of Default”) shall
      constitute a default by Tenant:

    

    
      	 	
              14.1.1

            	
              Monetary
                Default: Failure by Tenant to pay rent or any other monetary obligation
                (“rent”) when due if the failure is not cured within ten
                (10) days after notice has been given to
                Tenant.

            

    

     

    
      	 	
              14.1.2

            	
              Non-monetary
                Default: Failure by Tenant to perform or comply with any provision
                of this
                Lease (other than as set forth in the immediately preceding subsection)
                in
                any material respects if the failure is not cured within thirty (30)
                days
                after notice has been given to Tenant. If, however, the failure cannot
                reasonably be cured within the cure period, Tenant shall not be in
                default
                of this Lease if Tenant commences to cure the failure within the
                cure
                period and diligently and in good faith continues to cure the
                failure.

            

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.1.3

            	
              To
                the extent permitted by law, a general assignment by Tenant for the
                benefit of creditors, or the filing by or against Tenant of any proceeding
                under any insolvency or bankruptcy law, unless in the case of a proceeding
                filed against Tenant the same is dismissed within ninety (90) days,
                or the
                appointment of a trustee or receiver to take possession of all or
                substantially all of the assets of Tenant, unless possession is restored
                to Tenant within sixty (60) days, or any execution or other judicially
                authorized seizure of all or substantially all of Tenant’s assets located
                upon the Premises or of Tenant’s interest in this Lease, unless such
                seizure is discharged within sixty (60)
                days.

            

    

    

    
      	 	
              14.1.4

            	
              Any
                notice delivered pursuant to this Section shall be in lieu of, and
                not in
                addition to, any notice required by
                law.

            

    

    

    
      	14.2	
              Landlord’s
                Remedies

            

    

    

    Landlord
      shall have any one or more of the following remedies after the occurrence of
      an
      uncured Event of Default by Tenant. These remedies are not exclusive; they
      are
      cumulative in addition to any remedies now or later allowed by law, in equity,
      or otherwise:

    

    
      	 	
              14.2.1

            	
              Terminate
                this Lease by giving written notice of termination to Tenant, in
                which
                event Tenant immediately shall, subject to section 7.3, surrender
                the
                Premises to Landlord. If Tenant fails to so surrender the Premises,
                then
                Landlord, without prejudice to any other remedy it has for possession
                of
                the Premises or arrearages in rent or other damages, may re-enter
                and take
                possession of the Premises and subject to Section 7.3 expel or remove
                Tenant and any other person or entity occupying the Premises or any
                part
                thereof, without being liable for any damages, except if caused by
                gross
                negligence or willful misconduct of
                Landlord.

            

    

    

    
      	 	
              14.2.2

            	
              No
                act by Landlord other than giving notice of termination to Tenant
                shall
                terminate this Lease. Acts of maintenance, efforts to relet the Premises,
                or the appointment of a receiver on Landlord’s initiative to protect
                Landlord’s interest under this Lease shall not constitute a termination of
                this Lease. On termination of the Lease, Landlord shall have the
                right to
                recover from Tenant:

            

    

    

    
      	 	
              (i)

            	
              The
                worth at the time of the award of the unpaid rent that had been earned
                at
                the time of termination of this Lease;
                and

            

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              The
                worth at the time of the award of the amount by which the unpaid
                rent that
                would have been earned after the date of termination of this Lease
                until
                the time of award exceeds the amount of the loss of rent that Tenant
                proves reasonably could have been avoided;
                and

            

    

    

    
      	 	
              (iii)

            	
              The
                worth at the time of the award of the amount by which the unpaid
                rent for
                the balance of the term after the time of award exceeds the amount
                of the
                loss of rent that Tenant proves reasonably could have been avoided;
                and

            

    

    

    
      	 	
              (iv)

            	
              Any
                other amount, including, without limitation, attorneys’ fees and court
                costs, necessary to compensate Landlord for all detriment proximately
                caused by Tenant’s default.

            

    

     

    
      The
        phrase
        “worth
        at the time of the award” as
        used
        in clauses (i) and (ii) above is to be computed by allowing interest at the
        Default Rate (as hereinafter defined), but not to exceed
        the then legal rate of interest. The same phrase as used in clause (iii)
        above
        is to be computed by discounting the amount at the Prime Rate (as hereinafter
        defined).

    

    

    The
      term
“rent”
      as
      used
      in this Section means all sums payable by Tenant pursuant to the Lease,
      including, without limitation, all Base Monthly Rent, additional rent, Taxes,
      and insurance.

    

    
      	 	
              14.2.3

            	
              Landlord
                may re-enter and take possession of the Premises without terminating
                this
                Lease and without being liable for any damages, except if caused
                by the
                gross negligence or willful misconduct of Landlord, and take such
                actions
                as Tenant is required by the terms of this Lease to take. Landlord
                may
                relet the Premises, or any part of them, to third parties, but has
                no
                obligation to do so. Landlord may relet the Premises on whatever
                terms and
                conditions Landlord, in its sole discretion, deems advisable. Reletting
                can be for a period shorter or longer than the remaining term of
                this
                Lease. Landlord’s action under this Subsection is not considered an
                acceptance of Tenant’s surrender of the Premises unless Landlord so
                notifies Tenant in writing. Tenant shall be immediately liable to
                Landlord
                for all costs Landlord incurs in reletting the Premises, including
                brokers’ commissions, expenses of remodeling the Premises required by the
                reletting, and like costs. Tenant shall pay to Landlord the rent
                due under
                this Lease on the dates the rent is due, less the rent Landlord receives
                from any reletting. Landlord agrees to use commercially reasonable
                efforts
                to mitigate damages.

            

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    If
      Landlord elects to relet the Premises without terminating this Lease, any rent
      received will be applied to the account of Tenant, not to exceed the amounts
      owed by Tenant to Landlord; no reletting by Landlord is considered to be for
      its
      own account unless Landlord has notified Tenant in writing that the Lease has
      been terminated. If Landlord elects to relet the Premises, rent that Landlord
      receives from reletting will be applied to the payment of: (i)
      first, any amounts owing from Tenant to Landlord other than rent due from
      Tenant; (ii) second, all reasonable and actual costs, including maintenance,
      incurred by Landlord in reletting; and (iii) third, rent due and unpaid under
      the Lease. After deducting the payments referred to in this Subsection, any
      sum
      remaining from the rent Landlord receives from reletting will be held by
      Landlord and applied in payment of future rent as rent becomes due under this
      Lease. If, on the date rent is due under this Lease, the rent received from
      the
      reletting is less than the rent due on that date, Tenant will pay to Landlord,
      in addition to the remaining rent due, all reasonable and actual costs,
      including maintenance, Landlord incurred in reletting which remain after
      applying the rent received from
      the
      reletting. Tenant shall have no right to or interest in the rent or other
      consideration received by Landlord from reletting to the extent it exceeds
      all
      amounts owing by Tenant to Landlord.

    

    
      	 	
              14.2.4

            	
              In
                all events, Tenant is liable for all direct or proximate damages
                of
                whatever kind or nature, suffered by Landlord as a result of the
                occurrence of an Event of Default. If Tenant fails to pay Landlord
                in a
                prompt manner for the damages suffered, Landlord may pursue a monetary
                recovery from Tenant. Included among these damages are all expenses
                incurred by Landlord in repossessing the Premises (including, but
                not
                limited to, increased insurance premiums resulting from Tenant’s vacancy),
                all reasonable and actual expenses incurred by Landlord in reletting
                the
                Premises (including, but not limited to, those incurred for
                advertisements, brokerage fees, repairs, remodeling, and replacements),
                all concessions granted to a new tenant on a reletting, (including,
                but
                not limited to, any unamortized commissions paid in connection with
                this
                Lease), and all reasonable attorneys’ fees incurred by Landlord in
                enforcing any of Landlord’s rights or remedies against
                Tenant.

            

    

    

    
      	 	
              14.2.5

            	
              Pursuit
                of any of the foregoing remedies does not constitute an irrevocable
                election of remedies nor preclude pursuit of any other remedy provided
                elsewhere in this Lease or by applicable law, and none is exclusive
                of
                another unless so provided in this Lease or by applicable law. Likewise,
                forbearance by Landlord to enforce one or more of the remedies available
                to it on an Event of Default does not constitute a waiver of that
                default
                or of the right to exercise that remedy later or of any rent, damages,
                or
                other amounts due to Landlord
                hereunder.

            

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

    
      	 	
              14.2.6

            	
              Whether
                or not Landlord elects to terminate this Lease or Tenant’s right to
                possession of the Premises on account of any uncured Event of Default
                by
                Tenant, Landlord shall have all rights and remedies at law or in
                equity,
                including, but not limited to, the right to re-enter the Premises,
                in
                which event Landlord shall automatically succeed to Tenant’s interest in
                such subleases, licenses, concessions, or
                arrangements.

            

    

    

    
      	14.3	
              Right
                of Landlord to Re-Enter

            

    

    

    In
      the
      event of any termination of this Lease as a result of Tenant’s
      default

    hereunder,
      Landlord shall have the immediate right to enter upon and repossess the
      Premises, and, subject to Section 7.3, any personal property of Tenant may
      be
      removed from the Premises and stored in any public warehouse at the risk and
      expense of Tenant.

    

    
      	14.4	
              Surrender
                of Premises

            

    

    

    No
      act or
      thing done by Landlord or Tenant or any agent or employee thereof during the
      Lease term shall be deemed to constitute an acceptance by Landlord or Tenant,
      as
      the case may be, or a surrender of any or all of the Premises unless such intent
      is specifically acknowledged in a writing signed by Landlord or Tenant, as
      the
      case may be. The delivery of keys to any of the Premises to Landlord or any
      agent or employee of Landlord shall not constitute a surrender of the Premises
      or effect any partial or full termination of this Lease, whether or not the
      keys
      are thereafter retained by Landlord and, notwithstanding such delivery, Tenant
      shall be entitled to the return of such keys at any reasonable time upon request
      until this Lease shall have been terminated properly. The voluntary or other
      surrender of this Lease by Tenant, whether accepted by Landlord or not, or
      a
      mutual termination hereof, shall not work a merger, and at the option of
      Landlord shall operate as an assignment to Landlord of all subleases or
      subtenancies affecting the Premises.

    

    
      	14.5	
              Interest
                Charges

            

    

    

    Any
      amount not paid by one party to the other when due to the other party will
      bear
      interest from the expiration of any applicable grace or cure periods until
      the
      date of payment at the lesser of (i) the prime commercial rate (“Prime Rate”)
      being charged by Citibank N.A. in effect on the date due plus two percent (2%)
      per annum (“Default Rate”); or (ii) the maximum rate permitted by law. If
      Citibank N.A. is no longer in existence, then another comparable bank or
      financial institution shall be substituted by Landlord.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
      
        
          	14.6	
                  Default
                    by Landlord

                

        

      

    

    

    Landlord
      shall be in default if Landlord fails to perform any provision of this Lease
      required of it and the failure is not cured within thirty (30) days after notice
      has been given to Landlord. If, however, the failure cannot reasonably be cured
      within the cure period, Landlord shall not be in default of this Lease if
      Landlord commences to cure the failure within the cure period and diligently
      and
      in good faith continues to cure the failure. Notices given under this Section,
      and Sections 14.1.1 and 14.1.2 shall specify the alleged breach and the
      applicable Lease provisions. If Landlord shall at any time default beyond the
      applicable notice and cure period, Tenant shall have the right to cure such
      default on Landlord’s behalf Any sums expended by Tenant in doing so, and all
      reasonably necessary incidental costs and expenses incurred in connection
      therewith, shall be payable by Landlord to Tenant within ten (10) days following
      demand therefor by Tenant, provided, however, that Tenant shall not be entitled
      to any deduction or offset against any rent otherwise payable to Landlord under
      this Lease.

    

    15.
      RIGHT OF INSPECTION

    

    Landlord
      and Landlord’s authorized representatives shall have the right upon giving at
      least two (2) business days’ advance written notice (except in the event of
      emergency, in which Landlord shall give such notice as is practicable under
      the
      circumstances) and subject to Tenant’s occupational health and safety policies
      and other reasonable requirements of Tenant made known in advance to Landlord,
      to enter upon the Premises at all reasonable hours for the purpose of inspecting
      the Premises or of making repairs, additions or alterations in or upon
      the

    Premises
      (following Tenant’s failure to cure any breach of such obligations), and for the
      purpose of exhibiting the Premises to prospective tenants, purchasers or others.
      Landlord shall not exhibit any “for sale” or “for rent” signs during the term of
      the Lease. Landlord shall use commercially reasonable efforts not to
      unreasonably interfere with Tenant’s use or occupancy of the
      Premises.

    

    16.
      WAIVER OF BREACH

    

    No
      waiver
      by Landlord or Tenant of any breach of any one or more of the terms, covenants,
      conditions, or agreements of this Lease shall be deemed to imply or constitute
      a
      waiver of any succeeding or other breach. Failure of Landlord or Tenant to
      insist upon the strict performance of any of the terms, conditions, covenants,
      and agreements of this Lease shall not constitute or be considered as a waiver
      or relinquishment of such party’s rights to subsequently enforce any default,
      term, condition, covenant, or agreement, which shall all continue in full force
      and effect. The rights and remedies of Landlord and Tenant under this Lease
      shall be cumulative and in addition to any and all other rights and remedies
      which such party has or may have.

    

    17.
      NOTICES

     

    
      	17.1	
              Notice
                Requirements

            

    

    

    All
      notices, requests, or demands herein provided to be given or made, or that
      may
      be given or made by either party to the other, shall be given or made only
      in
      writing and shall be deemed to have been duly given: (i) when delivered
      personally at the address set forth below, or to any agent of the party to
      whom
      notice is being given, or if delivery is rejected when delivery was attempted;
      or (ii) on the date delivered when sent via overnight courier, properly
      addressed and postage prepaid; or (iii) on the date sent via facsimile
      transmission (with written evidence thereof). The proper address to which
      notices, requests, or demands may be given or made by either party shall be
      the
      address set forth at the end of this Section or to such other address or to
      such
      other person as any party shall designate. Such address may be changed by
      written notice given to the other party in accordance with this
      Section.

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

      
        	 	
                If
                  to Landlord:

              	 
	 	 	 
	 	 	
                YA
                  Landholdings, LLC

              
	 	 	
                101
                  Hudson Street, Suite 3700

              
	 	 	
                Jersey
                  City, NJ 07302

              
	 	 	
                Attn:
                  Michael Rosselli

              
	 	 	
                E-mail:
                  mrosselli@yorkvilleadvisors.com

              
	 	 	 
	 	
                with
                  a copy to:

              	
                Baker
                  Botts L.L.P.

              
	 	 	
                One
                  Shell Plaza

              
	 	 	
                910
                  Louisiana

              
	 	 	
                Houston,
                  Texas 77002-4995

              
	 	 	
                Attention:
                  LeAnn Vaughn

              
	 	 	
                E-mail:
                  leann.vaughn@bakerbotts.com

              
	 	 	 
	 	
                If
                  to Tenant:

              	 
	 	 	 
	 	 	
                Appalachian
                  Oil Company, Inc.

              
	 	 	
                1922
                  Highway 75

              
	 	 	
                Blountville,
                  TN 37617

              
	 	 	
                Attn:
                  Bryan Chance

              
	 	 	
                E-mail:
                  bchance@obliotel.com

              
	 	 	 
	 	
                with
                  a copy to:

              	
                Thomas
                  A. Rose

              
	 	 	
                Sichenzia
                  Ross Friedman Ference LLP

              
	 	 	
                61
                  Broadway

              
	 	 	
                New
                  York, NY 10006

              
	 	 	
                E-mail:
                  trose@srff.com

              

      

    

    

    
      	17.2	
              Payments
                Under Lease

            

    

    

    Rent
      and
      all other payments due to Landlord under this Lease shall be paid in lawful
      money of the United States of America without offset or deduction to the name
      and at the address first given above or to such other persons or parties or
      at
      such other places as Landlord may from time to time designate in
      writing.

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    18.
      RELATIONSHIP OF THE PARTIES

    

    This
      Lease shall not be deemed or construed by the parties, nor by any third party,
      as creating the relationship of (i) principal and agent, (ii) partnership,
      or
      (iii) joint venture between the parties. Neither the method of computation
      of
      rent nor any other provision of this Lease, nor any acts of the parties are
      other than in the relationship of Landlord and Tenant.

     

    
      
        19.
          SUBORDINATION,
          ATTORNMENT AND ESTOPPEL

      

    

    

    
      	19.1	
              Subordination
                and Non-Disturbance

            

    

    

    Subject
      to the provisions of this Section, this Lease and the leasehold estate created
      hereby shall be, at the option and upon written declaration of Landlord,
      subject, subordinate, and inferior to the lien and estate of any liens, trust
      deeds, and encumbrances (“Mortgages”),
      and
      all
      renewals, extensions, or replacements thereof, now or hereafter imposed by
      Landlord upon the Premises; provided, however, that this Lease shall not be
      subordinate to any Mortgage arising on or after the date of this Lease, or
      any
      renewal, extension, or replacement thereof, unless and until Landlord provides
      Tenant with an agreement (“Non-Disturbance
      Agreement”), signed
      and acknowledged by each holder of any such interest setting forth that so
      long
      as there is no continuing Event of Default hereunder, Landlord’s and Tenant’s
      rights and obligations hereunder shall remain in force and Tenant’s right to
      possession shall be upheld and shall not be disturbed. The Non-Disturbance
      Agreement shall be substantially in the form attached hereto and incorporated
      herein as Exhibit
      D.

    

    
      	19.2	
              Attornment

            

    

    

    In
      the
      event of foreclosure of any Mortgage, whether superior or subordinate
      to

    this
      Lease, then (i) this Lease shall continue in force; (ii) Tenant’s quiet
      possession shall not be disturbed by reason of such foreclosure; (iii) Tenant
      shall attorn to and recognize the mortgagee or purchaser at foreclosure sale
      (“Successor
      Landlord”) as
      Tenant’s landlord for the remaining term of this Lease; and (iv) the Successor
      Landlord shall not be bound by any liability for any act or omission of a prior
      landlord.

    

    
      	19.3	
              Tenant
                Estoppel Certificate

            

    

    

    Tenant
      shall execute and deliver to Landlord, within fifteen (15) days after receipt
      of
      Landlord’s request, any estoppel certificate or other statement to be furnished
      to Landlord or any prospective purchaser of or any lender against the Premises
      which shall include only the matters hereinafter set forth. Such estoppel
      certificate shall acknowledge and certify each of the following matters, to
      the
      extent each may be true: that the Lease is in effect and not subject to any
      rental offsets, claims, or defenses to its enforcement; the commencement and
      expiration dates of the term; that Tenant is paying rent on a current basis;
      that any improvements required to be furnished by Landlord under the Lease
      have
      been completed in all respects; that the Lease constitutes the entire agreement
      between Tenant and Landlord relating to the Premises; that Tenant has accepted
      the Premises and is in possession thereof, that the Lease has not been modified,
      altered, or amended except in specified respects by specified instruments;
      and
      such other matters as reasonably may be requested that do not alter or amend
      the
      terms of the Lease.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	19.4	
              Landlord
                Estoppel Certificate

            

    

    

    Landlord
      shall execute and deliver to Tenant, within fifteen (15) days after receipt
      of
      Tenant’s request, any estoppel certificate or other statement to be furnished to
      Tenant or any prospective assignee, subtenant, purchaser or any lender against
      Tenant’s interest in any Premises which shall include only the matters
      hereinafter set forth. Such estoppel certificate shall acknowledge and certify
      each of the following matters, to the extent each may be true: that the Lease
      is
      in effect and not subject to any rental offsets, claims, or defenses to its
      enforcement; the commencement and expiration dates of the term; that Tenant
      is
      paying rent on a current basis; that any improvements required to be furnished
      by Tenant under the Lease have been completed in all respects; that the Lease
      constitutes the entire agreement between Landlord and Tenant relating to the
      Premises; that the Lease has not been modified, altered, or amended except
      in
      specified respects by specified instruments; and such other matters as
      reasonably may be requested that do not alter or amend the terms of the
      Lease.

    

    
      	19.5	
              Leasehold
                Mortgage

            

    

    

    Tenant
      is
      hereby given the right by Landlord to mortgage its interest in this Lease under
      one or more leasehold mortgages without obtaining the consent of Landlord upon
      the condition that all rights acquired under such mortgages shall be subject
      to
      each and all of the terms, covenants, conditions and restrictions set forth
      in
      this Lease, and to all rights and interests of Landlord herein, none of which
      terms, covenants, conditions or restrictions is or shall be waived by Landlord
      by reason of the right given so to mortgage such interest in this Lease, except
      as expressly provided herein. If Tenant shall mortgage this leasehold, and
      if
      Tenant or the holder of such mortgage shall, within thirty (30) days of
      execution send to Landlord a true copy thereof together with written notice
      specifying the name and address of the mortgagee and the pertinent recording
      date with respect to such mortgage, Landlord agrees that so long as any such
      leasehold mortgage shall remain unsatisfied of record or until written notice
      of
      satisfaction is given by the holder to Landlord, the following provisions shall
      apply:

    

    
      	 	
              19.5.1

            	
              There
                shall be no cancellation, surrender or material modification of this
                Lease
                by joint action of Landlord and Tenant (as opposed to termination
                as a
                result of Tenant’s default) without the prior consent in writing of the
                leasehold mortgagee (which consent shall not be unreasonably withheld,
                conditioned or delayed); provided however, under no circumstances
                shall
                failure to obtain such prior written consent constitute a breach
                of, or
                default under, the Lease by Landlord, nor shall Tenant or the leasehold
                mortgagee have any recourse whatsoever against Landlord for such
                failure
                to obtain prior written consent; and further provided that this subsection
                shall not impair Landlord’s right to unilaterally terminate the Lease in
                the event of an uncured Event of Default by Tenant under the
                Lease.

            

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	 	
              19.5.2

            	
              Landlord
                shall, upon serving Tenant with any notice of default, simultaneously
                mail
                a copy of such notice to the holder of such mortgage; provided however,
                under no circumstances shall Landlord’s failure to mail such notice
                constitute a breach of, or default under, the Lease, nor shall Tenant
                or
                the leasehold mortgagee have any recourse whatsoever against Landlord
                for
                such failure to give notice; provided however that the remedy period
                available to such leasehold mortgagee shall not begin to run until
                the
                leasehold mortgagee has received such notice. The leasehold mortgagee
                shall thereupon have the same period to remedy or cause to be remedied
                the
                defaults complained of, and Landlord shall accept such performance
                by or
                at the instigation of such leasehold mortgagee as if the same had
                been
                done by Tenant.

            

    

     

    
      	 	
              19.5.3

            	
              Anything
                herein contained notwithstanding, if any default shall occur which,
                pursuant to any provision of this Lease, entitles Landlord to terminate
                this Lease, and if before the expiration of ten (10) days from the
                date of
                service of notice of termination upon such leasehold mortgagee, such
                leasehold mortgagee shall have notified Landlord of its desire to
                nullify
                such notice and shall have paid to Landlord all rent and other payments
                herein provided for, and then in default, and shall have complied
                with all
                of the other requirements of this Lease or, if immediate compliance
                is
                impossible, shall have commenced the work of complying with all of
                the
                other requirements of this Lease, if any are then in default, and
                shall
                prosecute the same to completion with reasonable diligence, then
                in such
                event Landlord shall not be entitled to terminate this Lease and
                any
                notice of termination theretofore given shall be void and of no
                effect.

            

    

    

    
      	 	
              19.5.4

            	
              The
                proceeds from any insurance policies or arising from a condemnation
                are to
                be distributed pursuant to the provisions of this Lease, but the
                leasehold
                mortgagee may reserve rights to apply to the mortgage debt all, or
                any
                part, of Tenant’s share of such proceeds pursuant to such
                mortgage.

            

    

    

    

    
      	 	
              19.5.5

            	
              Landlord
                shall not unreasonably withhold its consent to any assignment of
                the Lease
                or to any transfer of title to or by the leasehold mortgagee, its
                successors or assigns, or subletting thereunder by the leasehold
                mortgagee, its successors and assigns, provided such assignment or
                subleasing are made as a part of the leasehold mortgagee’s remedies under
                the leasehold mortgage. Landlord’s consent under this subsection shall be
                based upon Landlord’s customary review and evaluation process of
                prospective new tenants.

            

    

    

    
      	 	
              19.5.6

            	
              Any
                and all leasehold mortgage(s) shall at all times be subject, subordinate,
                and inferior to the lien and estate of any liens, trust deeds, mortgages
                or encumbrances, and all renewals, extensions or replacements thereof,
                now
                or hereafter imposed by Landlord upon the
                Premises.

            

    

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    20.
      ATTORNEYS’ FEES

    

    
      	20.1	
              Recovery
                of Attorneys’ Fees and Costs of
                Suit

            

    

    

    If
      any
      action for breach of or to enforce the provisions of this Lease is

    commenced,
      the court in such action shall award to the party in whose favor a judgment
      is
      entered, a reasonable sum as attorneys’ fees and costs. Such attorneys’ fees and
      costs shall be paid by the losing party in such action.

    

    
      	20.2	
              Party
                to Litigation

            

    

    

    Tenant
      shall indemnify Landlord against and hold Landlord harmless from all costs,
      expenses, demands, and liability incurred by Landlord if Landlord involuntarily
      becomes

    or
      is
      made a party to any claim or action (i) instituted by any third party against
      Tenant, or by or against any person holding any interest under, or using the
      Premises by license of or agreement with Tenant; (ii) for foreclosure of any
      lien for labor or material furnished to or for Tenant or such other person;
      or
      (iii) otherwise arising out of or resulting from any action or transaction
      of
      Tenant. Tenant shall defend Landlord against any such claim or action at
      Tenant’s expense with counsel reasonably acceptable to Landlord.

    

    21.
      AUTHORITY TO MAKE LEASE; COVENANT OF QUIET ENJOYMENT

    

    
      	21.1	
              Full
                Power and Authority to Enter Lease

            

    

    

    The
      parties covenant and warrant that each has full power and authority to enter
      into this Lease.

    

    
      	21.2	
              Quiet
                Enjoyment

            

    

    

    Landlord
      covenants and warrants that Tenant shall have and enjoy full, quiet, and
      peaceful possession of the Premises, the appurtenances and all rights and
      privileges incidental thereto during the term, as against all persons claiming
      by, through, or under Landlord, subject to the provisions of this Lease and
      any
      title exceptions or defects in existence on the Commencement Date.

    

    22.
      HAZARDOUS MATERIAL

    

    
      	22.1	
              Compliance
                Generally

            

    

    

    Tenant
      shall comply with all Environmental Laws that are applicable to the Premises,
      including the Storage Tank System, and Tenant’s occupancy and operation thereof
      Tenant shall not use, store, transport, dispense or sell Hazardous Materials
      at
      the Premises, except as reasonably necessary or appropriate in connection with
      the permitted use of the Premises. Tenant shall not Release, nor shall Tenant
      permit any employee, contractor or agent, and Tenant shall use commercially
      reasonable efforts not to permit any invitee, to Release any Hazardous Materials
      onto, into or from the Premises or any surrounding land, surface water or ground
      water except as and to the extent allowed by applicable law, including
      Environmental Laws.

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

       

    

    
      	22.2	
              Tenant’s
                Responsibility for Hazardous
                Materials

            

    

    

    Tenant
      shall be liable for and responsible for Hazardous Materials kept, stored or
      otherwise managed or Released on or from the Premises prior to the expiration
      of
      the Term of the Lease, including without limitation, at Tenant’s sole cost, any
      (i) permitting, reporting, assessment, testing, investigation, storage,
      treatment, removal, remediation, transportation and disposal of such Hazardous
      Materials as directed by any governmental agency and as otherwise required
      by
      Environmental Laws; (ii) damages, costs, expenditures and claims imposed or
      brought under Environmental Laws for injury to persons, property, the Premises
      and surrounding air, land, surface water, and ground water resulting from such
      Hazardous Materials; (iii) claims by any governmental agency or third party
      associated with injury to surrounding air, land, surface water and ground water
      or other damage resulting from such Hazardous Materials; (iv) damages for injury
      to the buildings, fixtures, appurtenances, equipment and other personal property
      of Landlord to the extent caused by such Hazardous Materials; (v) fines,
      penalties, costs, fees, assessments, demands, orders, liens, directives or
      any
      other requirements imposed in any manner by any governmental agency or under
      any
      Environmental Laws with respect to such Hazardous Materials; (vi) damages,
      costs
      and expenditures for injury to natural resources to the extent caused by such
      Hazardous Materials; (vii) compliance with Environmental Laws regarding the
      use,
      storage, transportation, release, disposal, dispensing or sale of Hazardous
      Materials; and (viii) any other liability or obligation under Environmental
      Laws
      related to such Hazardous Materials. While Landlord is not required to incur
      any
      costs, fees (including attorney, consultant and expert witness fees) or expenses
      for environmental compliance, testing, investigation, assessment, remediation
      or
      cleanup relating to such Hazardous Materials under this Lease, should Landlord
      reasonably incur any such costs, expenses or fees relating to such Hazardous
      Materials at the Premises or surrounding lands or surface water or ground water
      in order to comply with Environmental Law with respect to which Tenant is liable
      pursuant to this Section, Tenant shall promptly reimburse Landlord for said
      costs, expenses or fees.

    

    
      	22.3	
              Tenant’s
                Environmental Indemnification

            

    

    

    Tenant
      shall indemnify, defend, and hold Landlord Indemnified Parties harmless from
      any
      and all claims, judgments, damages, penalties, fines, costs, liabilities, or
      losses (including, without limitation, claims
      based on the strict liability of Landlord and damages
      for the loss or restriction on use of rentable or usable space or of any amenity
      of the Premises, damages arising from any adverse impact on marketing of space
      of the Premises, and sums paid in settlement of claims, attorneys’ fees,
      consultation fees, and expert fees) which arise as a result of (i) the keeping,
      storage or other management of or a Release of Hazardous Materials on or from
      the Premises prior to the expiration of the Term of the Lease or (ii) any
      violation of Environmental Laws prior to the expiration of the Term of the
      Lease
      with respect to the Premises. This indemnification of Landlord Indemnified
      Parties by Tenant relating to such Releases includes, without limitation, costs
      incurred in connection with any investigation of on-site or off-site conditions
      or any monitoring,
      response,
      cleanup, remedial, removal, closure or restoration work required by any federal,
      state, or local governmental agency or political subdivision and any mechanics
      or materialmen liens placed upon the Premises or any other property of Landlord
      as a result of the occurrence of (i), (ii) and/or (iii) above.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	22.4	
              Tenant’s
                Notification Obligations

            

    

    

    Tenant
      immediately shall notify Landlord of any of the following: (i) any
      correspondence or communication from any governmental entity regarding the
      application of Environmental Laws to the Premises or Tenant’s operation of the
      Premises which would reasonably be expected to result in the imposition of
      material costs or liability on Tenant; (ii) any correspondence, communication
      or
      notifications as are required by either the Federal or State Emergency Planning
      and Community Right to Know Acts which would reasonably be expected to result
      in
      the imposition of material costs or liability on Tenant; (iii) any change in
      Tenant’s operations on the Premises that will change or would be reasonably
      expected to change Tenant’s obligations or liabilities under Environmental Laws
      with respect to the Premises in any material respect; (iv) any material Releases
      or suspected material Releases or
      the
      discovery of an historical material Release of
      any
      and all Hazardous Materials at, from or near the Premises, or confirmation
      of a
      Release from a Storage Tank System, which would reasonably be expected to result
      in the imposition of material costs on Tenant or
      a
      material contamination of the Premises.

    

    
      	22.5	
              Survival

            

    

    

    Provisions
      of this Section 22
      shall
      survive expiration or termination of the 

    tenancy.

    

    

    
      
        23.
          GENERAL
          PROVISIONS

      

    

    

    
      	23.1	
              Recitals

            

    

    

    The
      Recitals set forth above are hereby incorporated by this reference.

    

    
      	23.2	
              Gender;
                Number

            

    

    

    The
      use
      of (i) the neuter gender includes the masculine and feminine and (ii) the
      singular number includes the plural, whenever the context requires.

    

    
      	23.3	
              Captions

            

    

    

    Captions
      in this Lease are inserted for the convenience of reference only and do not
      define, describe, or limit the scope or the intent of this Lease or any of
      its
      terms.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	23.4	
              Exhibits

            

    

    

    All
      attached exhibits are a part of this Lease and are incorporated in full by
      this
      reference. Except as specifically provided herein, if any provision contained
      in
      any exhibit hereto is inconsistent or in conflict with any provisions of this
      Lease, the provisions of this Lease shall supersede the provisions of such
      exhibit and shall be paramount and controlling.

    

    
      	23.5	
              Entire
                Agreement

            

    

    

    This
      Lease contains the entire agreement between the parties relating to the
      transactions contemplated hereby and all prior or contemporaneous agreements,
      understandings, representations and statements, oral or written, are merged
      into
      this Lease.

    

    
      	23.6	
              Drafting

            

    

    

    This
      Lease shall not be construed more strictly against one party than the other
      because it may have been drafted by one of the parties or its counsel, each
      having contributed substantially and materially to the negotiation and drafting
      hereof.

    

    
      	23.7	
              Modification

            

    

    

    No
      modification, waiver, amendment, discharge, or change of this Lease shall be
      valid unless it is in writing and signed by the party against which the
      enforcement of the modification, waiver, amendment, discharge, or change is
      or
      may be sought.

    

    
      	23.8	
              Joint
                and Several Liability

            

    

    

    If
      any
      party consists of more than one person or entity, the liability of each such
      person or entity signing this Lease shall be joint and several; provided that
      the foregoing shall not be deemed to create any personal liability on the part
      of any person signing this Lease either individually or on behalf of any
      entity.

    

    
      	23.9	
              Enforceability

            

    

    

    The
      parties warrant and represent that the terms of this Lease are fully enforceable
      in the localities in which the Premises are located; subject however to
      limitations as may be relevant based on applicable bankruptcy, insolvency and
      creditors’ rights laws. It is the intention of the parties that if any provision
      of this Lease is inconsistent or in conflict with local law, custom,
      or practice, the provisions of this Lease shall supersede and shall be paramount
      and controlling.

    

    
      	23.10	
              Severability

            

    

    

    In
      the
      event any term, covenant, condition, or provision of this Lease is held to
      be
      invalid, void, or otherwise unenforceable by any court of competent
      jurisdiction, the fact that such term, covenant, condition, or provision is
      invalid, void, or otherwise unenforceable shall in no way affect the validity
      or
      enforceability of any other term, covenant, condition, or provision of this
      Lease.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	23.11	
              Successors
                and Assigns

            

    

    

    Except
      as
      otherwise provided herein, all terms of this Lease shall be binding upon, inure
      to the benefit of, and be enforceable by the parties and their respective legal
      representatives, successors, and assigns.

    

    
      	23.12	
              Independent
                Covenants

            

    

    

    This
      Lease shall be construed as though the covenants herein between Landlord and
      Tenant are independent and not dependent.

    

    
      	23.13	
              Limitation
                on Landlord’s Liability

            

    

    

    Notwithstanding
      anything contained in this Lease to the contrary, Landlord shall not incur
      any
      liability beyond Landlord’s interest in the Premises upon a breach of this
      Lease, and Tenant shall look exclusively to such interest in the Premises and
      the proceeds of any sale or refinancing, insurance proceeds and condemnation
      awards for the payment and discharge of any obligations imposed upon Landlord
      under this Lease.

    

    
      	23.14	
              Waiver
                of Trial by Jury

            

    

    

    Landlord
      and Tenant do hereby waive trial by jury in any action, proceeding or
      counterclaim brought by either party against the other, upon any matters
      whatsoever arising out of or in any way connected with this Lease, Tenant’s use
      or occupancy of the Premises and/or any claim of injury or damage. It further
      is
      agreed that in the event Landlord commences any summary proceeding for
      non-payment of rent or additional rent, Tenant will not interpose any
      counterclaim (except for compulsory counterclaims) of whatever nature or
      description in any such proceeding.

    

    
      	23.15	
              Characterization
                of Lease

            

    

    

    
      	 	
              23.15.1

            	
              Landlord
                and Tenant intend that this Lease is a “true lease” and not a financing
                lease, capital lease, mortgage, equitable mortgage, deed of trust,
                trust
                agreement, security agreement or other financing or trust arrangement,
                and
                the economic realities of this Lease are those of a true lease;
                and

            

    

    

    
      	 	
              23.15.2

            	
              the
                business relationship created by this Lease and any related documents
                is
                solely that of a long-term commercial lease between landlord and
                tenant
                and has been entered into by both parties in reliance upon the economic
                and legal bargains contained
                herein.

            

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

    

    
      	23.16	
              Counterparts

            

    

    

    This
      Lease may be executed in any number of counterparts, each of which shall be
      deemed an original. The counterparts shall together constitute but one
      agreement. Any signature on a copy of this Lease or any document necessary
      or
      convenient thereto sent by facsimile shall be binding upon transmission by
      facsimile and the facsimile copy may be utilized for the purposes of this
      Lease.

    

    
      	23.17	
              Force
                Majeure

            

    

    

    Any
      prevention, delay or stoppage due to strikes, lockouts, acts of God, enemy
      or
      hostile governmental action, civil commotion, fire or other casualty beyond
      the
      control of the party obligated to perform shall excuse the performance by such
      party for a period equal to any such prevention, delay or stoppage.

    

    
      	23.18	
              Confidentiality.

            

    

    

    Landlord
      hereby agrees and covenants in favor of Tenant to keep confidential all
      proprietary or confidential information made available to Landlord in connection
      herewith in respect of Tenant, Guarantor or the Premises, including, without
      limitation, all non-publicly available financial information of Tenant, and
      all
      non-publicly available terms of this Lease (collectively, “Confidential
      Information”), and
      not
      to disclose any Confidential Information in any manner whatsoever to any person,
      without the prior written consent of Tenant, except: (i) to Landlord’s
      directors, officers, employees, attorneys, accountants, auditors and others
      providing professional services on a “need to know basis” or (ii) to any
bonafide
      investor,
      purchaser or lender of Landlord or the Premises that is not a competitor of
      Tenant and that has agreed in writing in favor of Tenant to keep confidential
      all such Confidential Information and not to disclose any such Confidential
      Information in any manner whatsoever to any person except in accordance with
      this Section. The obligations arising pursuant to this Section shall survive
      the
      expiration or earlier termination of this Lease.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    
      	
              LANDLORD:

            	
              TENANT:

            
	
              YA
                Landholdings, LLC

            	
              Appalachian
                Oil Company, Inc.

            
	 	 
	
              By:
                

            	New EarthShell
              Corporation,	 
	
               

            	
              its
                sole equity member

            	 

    

     

     

    
      	
              By:

            	 	 	
              By:
                

            	 	 
	
              Name:

            	 	 	
              Name:

            	 	 
	
              Title:

            	 	 	
              Title:
                

            	 	 

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    LAND
      AND
      BUILDING LEASE AGREEMENT

    

    EXHIBIT
      “A”

     

    LEASED
      PREMISES

     

    (LEGAL
      DESCRIPTION)

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    LAND
      AND BUILDING LEASE AGREEMENT

    EXHIBIT
      “B”

    

    MEMORANDUM
      OF LEASE

     

    This
      Memorandum of Lease is made and entered into as of __________ by
      and
      between _____________,
      a
      _________ limited liability company (“Landlord”) and Appalacian
      Oil Company, Inc.,
      a
      __________ corporation (“Tenant”) who agree as follows:

    

    1. Terms
      and
      Premises. Pursuant to a certain Land and Building Lease Agreement (the “Lease”)
      dated __________________,
      entered
      into between Landlord and Tenant Landlord leases to Tenant and Tenant leases
      from Landlord that certain real property, together with all the improvements
      thereon and appurtenances thereunto belonging (the “Premises”), which legal
      description is attached hereto and incorporated herein as Exhibit “A,” commonly
      known as:

    

    APPCO
      STORE NO. ___

    [INSERT
      ADDRESS]

    

    for
      a
      term commencing on ___________ and expiring on ____________________ Tenant
      has
      FOUR (4) five-year options to extend the term of the Lease, all as more
      particularly set forth in the Lease.

    

    2. Tenant
      has the right to mortgage its interests in the Lease without obtaining the
      consent of Landlord upon the condition that all rights acquired under such
      mortgages shall be subject to each and all of the terms, covenants, conditions
      and restrictions set forth in the Lease and to all rights and interests of
      Landlord therein, all as more particularly set forth in the Lease.

    

    3. Tenant
      has a right of first offer on any sale, lease assignment conveyance or other
      transfer of all or part of the Premises by Landlord to any third person, all
      as
      more particularly set forth in the Lease.

    

    4. 
      This
      Memorandum of Lease is prepared for the purpose of recordation and does not
      modify the provisions of the Lease. The Lease is incorporated herein by
      reference. If there are any conflicts between the Lease and this Memorandum
      of
      Lease, the provisions of the Lease shall prevail.

    

    5. 
      By
      execution of this Memorandum, Tenant hereby terminates any existing Memoranda
      of
      Lease which are filed of record against the Premises and which identify Tenant
      as the tenant under a lease of the Premises.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              LANDLORD:

            	 	
              TENANT:

            
	____________________ 	 	
              Appalachian
                Oil Company, Inc.

            
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	 
	 	 	 	 	 
	
              Date:

            	 	 	
              Date:

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              Signed,
                sealed, and delivered this ___________ day of  ____________ 2007 in
                the presence of:

            	 	
              Signed,
                sealed, and delivered this ___________ day of ___________  2007
                in the presence of:

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	
              Witness

            	 	
              Witness

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              Witness

            	 	
              Witness

            
	 	 	 	 	 
	 	 	 	 	 
	
              STATE
                OF _______________________

            	 	 	 
	 	 	
              §

            	 	 
	
              COUNTY
                OF ____________________________ §

            	 	 	 

    

     

    On
      this
____
      day
      of ,
      2007,
      before me, the undersigned notary public in and for said County and State,
      personally appeared before me _______________________________ to me personally
      known, who, being by me duly sworn, did say that he is a _______________________
      of _______________ and
      that
      said instrument was signed on behalf of said _________________, and he
      acknowledged said instrument to be the free act and deed of
      said

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    WITNESS
      BY HAND and
      notarial seal subscribed and affixed in said County and State the _______day
      of________ ,2007.

    

    
      	
               

            
	
              NOTARY
                PUBLIC IN AND FOR THE STATE OF:

            
	
               

            
	
              MY
                Commission EXPIRES:___________________

            
	
              RESIDING
                AT: ____________________________

            

    

    

    
      	
              STATE OF
                _________________________________

            	
              )

            
	 	
              )

            
	
              COUNTY OF________________________________

            	
              )

            

    

    

    On
      this
      ____day of ,
      2007,
      before me, the undersigned notary public in and for said County and State,
      personally appeared before me __________________________, to me personally
      known, who, being by me duly sworn, did say that he is a _______________________
      of_______________________,
      and
      that
      said instrument was signed on

    behalf
      of
      said __________________,,
      and
      he
      acknowledged said instrument to be the free act and deed of
      said

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Exhibit
      A to Exhibit B

    Legal
      Description

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    LAND
      AND BUILDING LEASE AGREEMENT

    

    EXHIBIT
      “C”

    

    CERTIFICATE
      OF LIABILITY INSURANCE AND

    EVIDENCE
      OF PROPERTY INSURANCE

    

    See
      attached.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    LAND
      AND BUILDING LEASE AGREEMENT

    

    EXHIBIT
      “D”

    

    SUBORDINATION,
      NON-DISTURBANCE AND ATTORNMENT AGREEMENT

    

    See
      attached.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    When
      recorded, return to:

    

    LeAnn
      Vaughn

    Baker
      Botts LLP

    910
      Louisiana, Suite 3102

    Houston
      TX 77002

    

    SUBORDINATION,
      NON-DISTURBANCE AND ATTORNMENT AGREEMENT

    

    THIS
      SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made and entered
      into
      by and among YA Landholdings, LLC, ,
      whose
      mailing address is 101 Hudson Street, Suite 3700, Jersey City, NJ 07302, Attn:
      Michael Rosselli (“Landlord”),
      YA Global Investments, L.P. ,
      whose
      mailing address is 101 Hudson Street, Suite 3700, Jersey City, NJ 07302, Attn:
      Michael Rosselli (“Lender”)
      and Appalachian
      Oil Company, Inc.,
      a
      Tennessee corporation, whose mailing address is 1922 Highway 75, Blountville,
      TN
      37617, Attn: Bryan Chance (“Tenant”).

    

    RECITALS:

    

    A. Landlord
       and
      Tenant are
      parties to a lease dated ___________ (the “Lease”), for the real property
      described on the attached Exhibit A (the “Premises”); and

    

    B. Lender
      has agreed to make a loan to Landlord, which loan is to be secured by a realty
      mortgage, deed of trust or other security instrument (the “Mortgage”)
      encumbering the Premises; and

    

    C. Lender
      and Tenant desire to provide for, among other matters, the subordination of
      the
      lien of Tenant’s leasehold interest in the Premises to the lien of the Mortgage
      and the non-disturbance of Tenant’s enjoyment, use and occupancy of the
      Premises;

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and representations
      hereinafter contained, and for other good and valuable consideration, the
      receipt and sufficiency of which is hereby acknowledged, the parties hereby
      agree as follows:

    

    1. SUBORDINATION.
      Subject
      to the other provisions hereof, the lien of Tenant’s leasehold interest and
      estate in the Premises created by the Lease shall be at all times hereafter
      subject to and subordinate in priority to the lien of the Mortgage and to all
      renewals, modifications, replacements and extensions thereof. The lien of the
      Mortgage shall not, however, encumber any of Tenant’s personal property located
      at the Premises as identified on Schedule 1 attached hereto and all products
      and
      proceeds of same.

    

    2. NON-DISTURBANCE
      AND RECOGNITION.
      Notwithstanding any provision in the Mortgage to the contrary, Lender agrees
      that in the event of a foreclosure of the Mortgage or other similar proceeding
      against Landlord that so long as Tenant continues to pay rent and otherwise
      comply with the terms and conditions of the Lease within applicable grace
      periods, then the Lease and
      the
      Leasehold Mortgage or Leasehold Deed of Trust in favor of Greystone Business
      Credit II, LLC (if it is, by its terms, in effect) shall
      remain in full force and effect and Tenant’s right to possession of the Premises
      will not be disturbed during the original term of the Lease or any renewal
      or
      extension thereof Should Tenant be named as a defendant in any such proceeding,
      Landlord shall indemnify Tenant with respect to any liability, claim or expense
      which Tenant may incur with respect to any such
      proceedings.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    3. ATTORNMENT
      BY TENANT.
      In the
      event that Lender or any other purchaser at a foreclosure or public or private
      sale (or by agreement in lieu thereof), or any successor-in-title to any of
      them
      (“New Owner”) acquires title to the Premises, Tenant shall attorn to such New
      Owner and the Lease shall continue in full force and effect as a direct lease
      between Tenant and such New Owner upon all of the terms and conditions contained
      therein.

    

    4. MISCELLANEOUS

    

    4.1 Primacy
      of Agreement.
      In the
      event of any conflict or ambiguity between the provisions of this Agreement
      and
      those of the Mortgage, this Agreement shall be controlling in all respects.
      No
      provision herein shall be deemed an amendment or modification of any provision
      of the Lease.

    

    4.2 Notices.
      Any
      notice required or permitted to be given herein shall be in writing and shall
      be
      delivered by hand, mailed by first class mail, postage prepaid, telecopied
      or
      sent by overnight courier to the addresses set forth at the beginning of this
      Agreement. Any such notice shall be deemed to be received: (a) if delivered
      personally, on the date of such delivery; (b) if mailed, on the third business
      day following mailing; (c) if telecopied, on the date of transmission; or (d)
      if
      sent by overnight courier, on the first business day following delivery to
      courier.

    

    4.3 Attorney’s
      Fees.
      In the
      event any party employs legal counsel to enforce or sue for a breach or
      anticipated breach of any provision of this Agreement, the prevailing party
      shall be entitled to recover all fees, charges, costs and expenses (including,
      without limitation, reasonable attorneys’ fees and disbursements) incurred in
      connection therewith.

    

    4.4 Authority.
      Landlord, Tenant and Lender each represent and warrant that they have full
      power, right and legal capacity, and have received all necessary authorizations
      to execute this Agreement and to perform fully hereunder.

    

    4.5  Entire
      Agreement Amendments.
      This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter hereof, all prior or contemporaneous promises and
      understandings related thereto having been superseded hereby. No provision
      of
      this Agreement may be amended, canceled, deleted or supplemented except by
      a
      writing signed by all of the parties.

    

    4.6
      Construction.
      If any
      party consists of more than one person, then their obligations hereunder shall
      be joint and several. This Agreement is a negotiated document, and the parties
      have had the opportunity to have it reviewed by counsel. It reflects the
“reasonable expectations” of the parties and as such, it shall be construed
      according to its fair meaning and without
      application of any drafting rule or presumption.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    4.7 Governing
      Law - Successors and Assigns.
      This
      Agreement and the rights and obligations of the parties hereunder shall be
      governed by, and construed and interpreted in accordance with, the laws of
      the
      State where the Premises are located, shall run with the Premises and shall
      be
      binding upon and inure to the benefit of the parties hereto and their respective
      successors and assigns.

    

    4.8 Counterparts.
      This
      Agreement may be executed in counterparts, and any counterpart containing
      original signature pages of all parties shall constitute an original Agreement
      for all purposes.

    

    4.9 Recordation.
      Lender
      may, at its sole cost and expense, record this Agreement in the Official Records
      of the county in which the Premises is located and
      shall
      thereupon deliver a copy of such recorded Agreement to Tenant at the above
      address.

    

    5. CONSENT.
      Lender
      hereby acknowledges and consents to that certain Landlord's Waiver and Consent
      to Leasehold Mortgage Or Deed of Trust dated _____, 2007 among Landlord, Tenant
      and Greystone Business Credit II, LLC.

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement.

    

    
      	
              TENANT:

            	
              Appalachian
                Oil Company, Inc.

            
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	
              Date:

            	 

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    

    STATE
      OF
      ________________

    

    COUNTY
      OF
      _______________

    

    The
      foregoing instrument was acknowledged before me this _____ day of September,
      2007 by _______________ as ________________of
      Appalachian Oil Company, Inc.,
      a
      Tennessee corporation, on behalf of the corporation. He is personally known
      to
      me or has produced ________________________ as identification.

    

    
      	 
	
              Signature
                of person taking acknowledgment

            
	 
	 
	
              Name
                typed, printed or stamped

            
	 
	 
	
              Commission
                Expiration

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    LANDLORD:
      

    

    
      	
              YA
                LANDHOLDINGS, LLC, 

            
	
              a
                Delaware limited liability company

            
	 
	
              By:
                New EarthShell Corporation, a Delaware 

              corporation,
                its sole member

            
	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    

    STATE
      OF
      ________________

    

    COUNTY
      OF
      _______________

    

    The
      foregoing instrument was acknowledged before me this _____ day of September,
      2007 by _______________ as ________________of
      New
      EarthShell Corporation, a Delaware corporation, on behalf of the YA
      Landholdings, LLC, a Delaware limited liability company.. He is personally
      known
      to me or has produced ________________________ as
      identification.

    

    
      	 
	
              Signature
                of person taking acknowledgment

            
	 
	 
	
              Name
                typed, printed or stamped

            
	 
	 
	
              Commission
                Expiration

            

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    LENDER:

    

    
      	
              YA
                Global Investments, L.P.

            
	 
	
              By:

            	
              Yorkville
                Advisors LLC,

            
	 	
              a
                Delaware limited liability company,

            
	 	
              its
                Investment Manager

            
	 	 
	
              By:
                

            	 
	
              Name:
                

            	 
	
              Title:
                

            	 

    

     

    STATE
      OF
      ________________

    

    COUNTY
      OF
      _______________

    

    The
      foregoing instrument was acknowledged before me this _____ day of September,
      2007 by _______________ as ________________of
      Yorkville Advisors LLC, a Delaware limited liability company, as Investment
      Manager for YA Global Investments, L.P. He is personally known to me or has
      produced ________________________ as identification.

    

    
      	 
	
              Signature
                of person taking acknowledgment

            
	 
	 
	
              Name
                typed, printed or stamped

            
	 
	 
	
              Commission
                Expiration

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      “A”

    LEGAL
      DESCRIPTION

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    TENANT'S
      PERSONAL PROPERTY

    

    Food
      service equipment, food preparation equipment, grills, fryers, security
      systems, security cameras, refrigerators, freezers, ice machines, point of
      sale computer equipment and inventory management systems, computers, cash
      registers, above and below ground fuel tanks and associated piping, fuel pumps,
      vapor recovery systems, water treatment equipment, water softening equipment,
      signs, canopies, cabinets, display cases, display racks, shelving, safes,
      atm machines, credit card machines, drink dispensers, drink makers, tire
      inflators, compressors, printers, tables, desks, chairs, sound systems, menu
      boards, time clocks, dumpsters, washers, dryers, ice merchandisers, filing
      cabinets, lawnmowers, trash cans, benches, video games, vending machines and
      ice
      chests. 

    

    
      
        
        

      

      
        1SECURITIES
        PURCHASE AGREEMENT

      

      THIS SECURITIES
        PURCHASE AGREEMENT
        (this
“Agreement”),
        dated
        as of September 17, 2007, by and among TITAN
        GLOBAL HOLDINGS, INC.,
        a Nevada
        corporation (the “Company”),
        and
        the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
or
        collectively “Buyers”).

       

      WITNESSETH

      

      WHEREAS,
        the
        Company and the Buyer(s) are executing and delivering this Agreement in reliance
        upon an exemption from securities registration pursuant to Section 4(2) and/or
        Rule 506 of Regulation D (“Regulation
        D”)
        as
        promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”);

       

      WHEREAS,
        the
        parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Buyer(s), as provided herein,
        and the Buyer(s) shall purchase (i) up to Six Million Dollars ($6,000,000)
        of
        secured convertible debentures in the form attached hereto as “Exhibit
        A”
(the
        “Convertible
        Debentures”),
        which
        shall be convertible into shares of the Company’s common stock, par value $0.001
        (the “Common
        Stock”)
        (as
        converted, the “Conversion
        Shares”),
        and
        (ii) warrants substantially in the form attached hereto as “Exhibit
        B”
(the
        “Warrants”),
        to
        acquire up to that number of additional shares of Common Stock set forth
        opposite such Buyer’s name in on Schedule I (as exercised, the “Warrant
        Shares”)
        which
        shall be funded within two (2) business day following the date hereof (the
        “Closing”)
        for a
        total purchase price of up to Six Million Dollars ($6,000,000), (the
“Purchase
        Price”)
        in the
        respective amounts set forth opposite each Buyer(s) name on Schedule I (the
        “Subscription
        Amount”);
        

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering a Registration Rights Agreement (the
        “Investor
        Registration Rights Agreement”)
        pursuant to which the Company has agreed to provide certain registration
        rights
        under the Securities Act and the rules and regulations promulgated there
        under,
        and applicable state securities laws; 

       

      WHEREAS,
        the
        Convertible Debentures are secured by (i) a second priory security interest
        in
        all of the assets of the Company and of each of the Company's subsidiaries
        as
        evidenced by the security agreement of even date herewith (the “Security
        Agreements,”
or
        the
“Security
        Documents”);
        and

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering Irrevocable Transfer Agent Instructions
        (the
“Irrevocable
        Transfer Agent Instructions”)

       

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants and other agreements contained in this
        Agreement the Company and the Buyer(s) hereby agree as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1. PURCHASE
        AND SALE OF CONVERTIBLE DEBENTURES.

       

      (a) Purchase
        of Convertible Debentures.
        Subject
        to the satisfaction (or waiver) of the terms and conditions of this Agreement,
        each Buyer agrees, severally and not jointly, to purchase at each Closing
        and
        the Company agrees to sell and issue to each Buyer, severally and not jointly,
        at each Closing, Convertible Debentures in amounts corresponding with the
        Subscription Amount set forth opposite each Buyer’s name on Schedule I hereto.

       

      (b) Closing
        Date.
        The
        Closing of the purchase and sale of the Convertible Debentures shall take
        place
        at 10:00 a.m. Eastern Standard Time on the second (2nd) business day following
        the date hereof, subject to notification of satisfaction of the conditions
        to
        the First Closing set forth herein and in Sections 6 and 7 below (or such
        other
        date as is mutually agreed to by the Company and the Buyer(s)) (the
“Closing
        Date”).
        The
        Closing shall occur on the respective Closing Dates at the offices of Yorkville
        Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
        (or
        such other place as is mutually agreed to by the Company and the Buyer(s)).
        

       

      (c) Form
        of Payment.
        Subject
        to the satisfaction of the terms and conditions of this Agreement, on the
        Closing Date, (i) the Buyers shall deliver to the Company such aggregate
        proceeds for the Convertible Debentures to be issued and sold to such Buyer(s),
        minus the fees to be paid directly from the proceeds of the Closing as set
        forth
        herein, and (ii) the Company shall deliver to each Buyer, Convertible
        Debentures and Warrant which such Buyer(s) is purchasing in amounts indicated
        opposite such Buyer’s name on Schedule I, duly executed on behalf of the
        Company.

       

      2. BUYER’S
        REPRESENTATIONS AND WARRANTIES.

       

      Each
        Buyer represents and warrants, severally and not jointly, that:

       

      (a) Investment
        Purpose.
        Each
        Buyer is acquiring the Convertible Debentures and, upon conversion of
        Convertible Debentures, the Buyer will acquire the Conversion Shares then
        issuable, for its own account for investment only and not with a view towards,
        or for resale in connection with, the public sale or distribution thereof,
        except pursuant to sales registered or exempted under the Securities Act;
        provided, however, that by making the representations herein, such Buyer
        reserves the right to dispose of the Conversion Shares at any time in accordance
        with or pursuant to an effective registration statement covering such Conversion
        Shares or an available exemption under the Securities Act.

       

      (b) Accredited
        Investor Status.
        Each
        Buyer is an “Accredited
        Investor”
as
        that
        term is defined in Rule 501(a)(3) of Regulation D.

       

      (c) Reliance
        on Exemptions.
        Each
        Buyer understands that the Convertible Debentures are being offered and sold
        to
        it in reliance on specific exemptions from the registration requirements
        of
        United States federal and state securities laws and that the Company is relying
        in part upon the truth and accuracy of, and such Buyer’s compliance with, the
        representations, warranties, agreements, acknowledgments and understandings
        of
        such Buyer set forth herein in order to determine the availability of such
        exemptions and the eligibility of such Buyer to acquire such
        securities.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (d) Information.
        Each
        Buyer and its advisors (and his or, its counsel), if any, have been furnished
        with all materials relating to the business, finances and operations of the
        Company and information he deemed material to making an informed investment
        decision regarding his purchase of the Convertible Debentures and the Conversion
        Shares, which have been requested by such Buyer. Each Buyer and its advisors,
        if
        any, have been afforded the opportunity to ask questions of the Company and
        its
        management. Neither such inquiries nor any other due diligence investigations
        conducted by such Buyer or its advisors, if any, or its representatives shall
        modify, amend or affect such Buyer’s right to rely on the Company’s
        representations and warranties contained in Section 3 below. Each Buyer
        understands that its investment in the Convertible Debentures and the Conversion
        Shares involves a high degree of risk. Each Buyer is in a position regarding
        the
        Company, which, based upon employment, family relationship or economic
        bargaining power, enabled and enables such Buyer to obtain information from
        the
        Company in order to evaluate the merits and risks of this investment. Each
        Buyer
        has sought such accounting, legal and tax advice, as it has considered necessary
        to make an informed investment decision with respect to its acquisition of
        the
        Convertible Debentures and the Conversion Shares.

       

      (e) No
        Governmental Review.
        Each
        Buyer understands that no United States federal or state agency or any other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Convertible Debentures or the Conversion Shares, or the
        fairness or suitability of the investment in the Convertible Debentures or
        the
        Conversion Shares, nor have such authorities passed upon or endorsed the
        merits
        of the offering of the Convertible Debentures or the Conversion
        Shares.

       

      (f) Transfer
        or Resale.
        Each
        Buyer understands that except as provided in the Investor Registration Rights
        Agreement: (i) the Convertible Debentures have not been and are not being
        registered under the Securities Act or any state securities laws, and may
        not be
        offered for sale, sold, assigned or transferred unless (A) subsequently
        registered thereunder, or (B) such Buyer shall have delivered to the Company
        an
        opinion of counsel, in a generally acceptable form, to the effect that such
        securities to be sold, assigned or transferred may be sold, assigned or
        transferred pursuant to an exemption from such registration requirements;
        (ii)
        any sale of such securities made in reliance on Rule 144 under the Securities
        Act (or a successor rule thereto) (“Rule 144”)
        may be
        made only in accordance with the terms of Rule 144 and further, if Rule 144
        is
        not applicable, any resale of such securities under circumstances in which
        the
        seller (or the person through whom the sale is made) may be deemed to be an
        underwriter (as that term is defined in the Securities Act) may require
        compliance with some other exemption under the Securities Act or the rules
        and
        regulations of the SEC thereunder; and (iii) neither the Company nor any
        other
        person is under any obligation to register such securities under the Securities
        Act or any state securities laws or to comply with the terms and conditions
        of
        any exemption thereunder. 

       

      (g) Legends.
        Each
        Buyer understands that the certificates or other instruments representing
        the
        Convertible Debentures and or the Conversion Shares shall bear a restrictive
        legend in substantially the following form (and a stop -transfer order may
        be
        placed against transfer of such stock certificates):

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
        THE
        SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH
        A VIEW
        TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
        IN
        THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
        OR AN
        OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
        NOT
        REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

       

      The
        legend set forth above shall be removed and the Company within two (2) business
        days shall issue a certificate without such legend to the holder of the
        Conversion Shares upon which it is stamped, if, unless otherwise required
        by
        state securities laws, (i) in connection with a sale transaction, provided
        the
        Conversion Shares are registered under the Securities Act or (ii) in connection
        with a sale transaction, after such holder provides the Company with an opinion
        of counsel, which opinion shall be in form, substance and scope customary
        for
        opinions of counsel in comparable transactions, to the effect that a public
        sale, assignment or transfer of the Conversion Shares may be made without
        registration under the Securities Act. 

       

      (h) Authorization,
        Enforcement.
        This
        Agreement has been duly and validly authorized, executed and delivered on
        behalf
        of such Buyer and is a valid and binding agreement of such Buyer enforceable
        in
        accordance with its terms, except as such enforceability may be limited by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors’ rights and
        remedies.

       

      (i) Receipt
        of Documents.
        Each
        Buyer and his or its counsel has received and read in their entirety: (i)
        this
        Agreement and each representation, warranty and covenant set forth herein
        and
        the Transaction Documents (as defined herein); (ii) all due diligence and
        other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
        the fiscal year ended June 30, 2006; (iv) the Company’s Form 10-QSB for the
        fiscal quarter ended March 31, 2007 and (v) answers to all questions each
        Buyer
        submitted to the Company regarding an investment in the Company; and each
        Buyer
        has relied on the information contained therein and has not been furnished
        any
        other documents, literature, memorandum or prospectus.

       

      (j) Due
        Formation of Corporate and Other Buyers.
        If the
        Buyer(s) is a corporation, trust, partnership or other entity that is not
        an
        individual person, it has been formed and validly exists and has not been
        organized for the specific purpose of purchasing the Convertible Debentures
        and
        is not prohibited from doing so.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (k) No
        Legal Advice From the Company.
        Each
        Buyer acknowledges, that it had the opportunity to review this Agreement
        and the
        transactions contemplated by this Agreement with his or its own legal counsel
        and investment and tax advisors. Each Buyer is relying solely on such counsel
        and advisors and not on any statements or representations of the Company
        or any
        of its representatives or agents for legal, tax or investment advice with
        respect to this investment, the transactions contemplated by this Agreement
        or
        the securities laws of any jurisdiction. 

       

      3. REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY.

       

      The
        Company represents and warrants as of the date hereof to each of the Buyers
        that, except as set forth in the SEC Documents (as defined herein) or in
        the
        Disclosure Schedule attached hereto (the “Disclosure
        Schedule”):

       

      (a) Organization
        and Qualification.
        The
        Company, subject to completion of its restatement filing, and its subsidiaries
        are corporations duly organized and validly existing in good standing under
        the
        laws of the jurisdiction in which they are incorporated, and have the requisite
        corporate power to own their properties and to carry on their business as
        now
        being conducted. Each of the Company and its subsidiaries is duly qualified
        as a
        foreign corporation to do business and is in good standing in every jurisdiction
        in which the nature of the business conducted by it makes such qualification
        necessary, except to the extent that the failure to be so qualified or be
        in
        good standing would not have a material adverse effect on the Company and
        its
        subsidiaries taken as a whole.

       

      (b) Authorization,
        Enforcement, Compliance with Other Instruments.
        (i) The Company has the requisite corporate power and authority to enter
        into and perform this Agreement, the Investor Registration Rights Agreement,
        the
        Irrevocable Transfer Agent Agreement, and any related agreements (collectively
        the “Transaction
        Documents”)
        and to
        issue the Convertible Debentures and the Conversion Shares in accordance
        with
        the terms hereof and thereof, (ii) the execution and delivery of the Transaction
        Documents by the Company and the consummation by it of the transactions
        contemplated hereby and thereby, including, without limitation, the issuance
        of
        the Convertible Debentures the Conversion Shares and the reservation for
        issuance and the issuance of the Conversion Shares issuable upon conversion
        or
        exercise thereof, have been duly authorized by the Company’s Board of Directors
        and no further consent or authorization is required by the Company, its Board
        of
        Directors or its stockholders, (iii) the Transaction Documents have been
        duly
        executed and delivered by the Company, (iv) the Transaction Documents constitute
        the valid and binding obligations of the Company enforceable against the
        Company
        in accordance with their terms, except as such enforceability may be limited
        by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally, the enforcement of creditors’ rights and remedies. The
        authorized officer of the Company executing the Transaction Documents knows
        of
        no reason why the Company cannot file the registration statement as required
        under the Investor Registration Rights Agreement or perform any of the Company’s
        other obligations under such documents. 

       

      (c) Capitalization.
        The
        authorized capital stock of the Company consists of 950,000,000 shares of
        Common
        Stock, of which 50,694,378 shares of Common Stock are issued and outstanding.
        All of such outstanding shares have been validly issued and are fully paid
        and
        nonassessable. No shares of Common Stock are subject to preemptive rights
        or any
        other similar rights or any liens or encumbrances suffered or permitted by
        the
        Company. Except as set forth on Section 3(c) of the Disclosure Schedule,
        as of
        the date of this Agreement, (i) there are no outstanding options, warrants,
        scrip, rights to subscribe to, calls or commitments of any character whatsoever
        relating to, or securities or rights convertible into, any shares of capital
        stock of the Company or any of its subsidiaries, or contracts, commitments,
        understandings or arrangements by which the Company or any of its subsidiaries
        is or may become bound to issue additional shares of capital stock of the
        Company or any of its subsidiaries or options, warrants, scrip, rights to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, any shares of capital stock of the
        Company or any of its subsidiaries, (ii) there are no outstanding debt
        securities and (iii) there are no agreements or arrangements under which
        the
        Company or any of its subsidiaries is obligated to register the sale of any
        of
        their securities under the Securities Act (except pursuant to the Registration
        Rights Agreement) and (iv) there are no outstanding registration statements
        and
        there are no outstanding comment letters from the SEC or any other regulatory
        agency. There are no securities or instruments containing anti-dilution or
        similar provisions that will be triggered by the issuance of the Convertible
        Debentures as described in this Agreement. The Company has furnished to the
        Buyer true and correct copies of the Company’s Articles of Incorporation, as
        amended and as in effect on the date hereof (the “Articles
        of Incorporation”),
        and
        the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
        and
        the terms of all securities convertible into or exercisable for Common Stock
        and
        the material rights of the holders thereof in respect thereto other than
        stock
        options issued to employees and consultants. 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (d) Issuance
        of Securities.
        The
        Convertible Debentures are duly authorized and, upon issuance in accordance
        with
        the terms hereof, shall be duly issued, fully paid and nonassessable, are
        free
        from all taxes, liens and charges with respect to the issue thereof. The
        Conversion Shares issuable upon conversion of the Convertible Debentures
        have
        been duly authorized and reserved for issuance. Upon conversion or exercise
        in
        accordance with the Convertible Debentures the Conversion Shares will be
        duly
        issued, fully paid and nonassessable.

       

      (e) No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated hereby
        will
        not (i) result in a violation of the Articles of Incorporation, any certificate
        of designations of any outstanding series of preferred stock of the Company
        or
        the By-laws or (ii) conflict with or constitute a default (or an event which
        with notice or lapse of time or both would become a default) under, or give
        to
        others any rights of termination, amendment, acceleration or cancellation
        of,
        any agreement, indenture or instrument to which the Company or any of its
        subsidiaries is a party, or result in a violation of any law, rule, regulation,
        order, judgment or decree (including federal and state securities laws and
        regulations and the rules and regulations of The National Association of
        Securities Dealers Inc.’s OTC Bulletin Board on which the Common Stock is
        quoted) applicable to the Company or any of its subsidiaries or by which
        any
        property or asset of the Company or any of its subsidiaries is bound or
        affected. Neither the Company nor its subsidiaries is in violation of any
        term
        of or in default under its Articles of Incorporation or By-laws or their
        organizational charter or by-laws, respectively, or any material contract,
        agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
        or
        order or any statute, rule or regulation applicable to the Company or its
        subsidiaries. The business of the Company and its subsidiaries is not being
        conducted, and shall not be conducted in violation of any material law,
        ordinance, or regulation of any governmental entity. Except as specifically
        contemplated by this Agreement and as required under the Securities Act and
        any
        applicable state securities laws, the Company is not required to obtain any
        consent, authorization or order of, or make any filing or registration with,
        any
        court or governmental agency in order for it to execute, deliver or perform
        any
        of its obligations under or contemplated by this Agreement or the Registration
        Rights Agreement in accordance with the terms hereof or thereof. All consents,
        authorizations, orders, filings and registrations which the Company is required
        to obtain pursuant to the preceding sentence have been obtained or effected
        on
        or prior to the date hereof. The Company and its subsidiaries are unaware
        of any
        facts or circumstance, which might give rise to any of the
        foregoing.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (f) SEC
        Documents: Financial Statements.
        The
        Company has filed all reports, schedules, forms, statements and other documents
        required to be filed by it with the SEC under the Securities Exchange Act
        of
        1934, as amended (the “Exchange
        Act”),
        for
        the two years preceding the date hereof (or such shorter period as the Company
        was required by law or regulation to file such material) (all of the foregoing
        filed prior to the date hereof or amended after the date hereof and all exhibits
        included therein and financial statements and schedules thereto and documents
        incorporated by reference therein, being hereinafter referred to as the
“SEC
        Documents”)
        on
        timely basis or has received a valid extension of such time of filing and
        has
        filed any such SEC Document prior to the expiration of any such extension.
        The
        Company has delivered to the Buyers or their representatives, or made available
        through the SEC’s website at http://www.sec.gov., true and complete copies of
        the SEC Documents. As of their respective dates, the financial statements
        of the
        Company disclosed in the SEC Documents (the “Financial
        Statements”)
        complied as to form in all material respects with applicable accounting
        requirements and the published rules and regulations of the SEC with respect
        thereto. Such financial statements have been prepared in accordance with
        generally accepted accounting principles, consistently applied, during the
        periods involved (except (i) as may be otherwise indicated in such Financial
        Statements or the notes thereto, or (ii) in the case of unaudited interim
        statements, to the extent they may exclude footnotes or may be condensed
        or
        summary statements) and, fairly present in all material respects the financial
        position of the Company as of the dates thereof and the results of its
        operations and cash flows for the periods then ended (subject, in the case
        of
        unaudited statements, to normal year-end audit adjustments). No other
        information provided by or on behalf of the Company to the Buyer which is
        not
        included in the SEC Documents, including, without limitation, information
        referred to in this Agreement, contains any untrue statement of a material
        fact
        or omits to state any material fact necessary in order to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading.

       

      (g) 10(b)-5.
        Neither
        the Transaction Documents nor the SEC Documents include any untrue statements
        of
        material fact, nor do they omit to state any material fact required to be
        stated
        therein necessary to make the statements made, in light of the circumstances
        under which they were made, not misleading.

       

      (h) Absence
        of Litigation.
        There
        is no action, suit, proceeding, inquiry or investigation before or by any
        court,
        public board, government agency, self-regulatory organization or body pending
        against or affecting the Company, the Common Stock or any of the Company’s
        subsidiaries, wherein an unfavorable decision, ruling or finding would (i)
        have
        a material adverse effect on the transactions contemplated hereby (ii) adversely
        affect the validity or enforceability of, or the authority or ability of
        the
        Company to perform its obligations under, this Agreement or any of the documents
        contemplated herein, or (iii) have a material adverse effect on the business,
        operations, properties, financial condition or results of operations of the
        Company and its subsidiaries taken as a whole.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (i) Acknowledgment
        Regarding Buyer’s Purchase of the Convertible Debentures.
        The
        Company acknowledges and agrees that the Buyer(s) is acting solely in the
        capacity of an arm’s length purchaser with respect to this Agreement and the
        transactions contemplated hereby. The Company further acknowledges that the
        Buyer(s) is not acting as a financial advisor or fiduciary of the Company
        (or in
        any similar capacity) with respect to this Agreement and the transactions
        contemplated hereby and any advice given by the Buyer(s) or any of their
        respective representatives or agents in connection with this Agreement and
        the
        transactions contemplated hereby is merely incidental to such Buyer’s purchase
        of the Convertible Debentures or the Conversion Shares. The Company further
        represents to the Buyer that the Company’s decision to enter into this Agreement
        has been based solely on the independent evaluation by the Company and its
        representatives.

       

      (j) No
        General Solicitation.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf, has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D under the Securities Act) in connection
        with
        the offer or sale of the Convertible Debentures or the Conversion
        Shares.

       

      (k) No
        Integrated Offering.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf has, directly or indirectly, made any offers or sales of any security
        or
        solicited any offers to buy any security, under circumstances that would
        require
        registration of the Convertible Debentures or the Conversion Shares under
        the
        Securities Act or cause this offering of the Convertible Debentures or the
        Conversion Shares to be integrated with prior offerings by the Company for
        purposes of the Securities Act.

       

      (l) Employee
        Relations.
        Neither
        the Company nor any of its subsidiaries is involved in any labor dispute
        nor, to
        the knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened. None of the Company’s or its subsidiaries’ employees is a member of
        a union and the Company and its subsidiaries believe that their relations
        with
        their employees are good.

       

      (m) Intellectual
        Property Rights.
        The
        Company and its subsidiaries own or possess adequate rights or licenses to
        use
        all trademarks, trade names, service marks, service mark registrations, service
        names, patents, patent rights, copyrights, inventions, licenses, approvals,
        governmental authorizations, trade secrets and rights necessary to conduct
        their
        respective businesses as now conducted. The Company and its subsidiaries
        do not
        have any knowledge of any infringement by the Company or its subsidiaries
        of
        trademark, trade name rights, patents, patent rights, copyrights, inventions,
        licenses, service names, service marks, service mark registrations, trade
        secret
        or other similar rights of others, and, to the knowledge of the Company there
        is
        no claim, action or proceeding being made or brought against, or to the
        Company’s knowledge, being threatened against, the Company or its subsidiaries
        regarding trademark, trade name, patents, patent rights, invention, copyright,
        license, service names, service marks, service mark registrations, trade
        secret
        or other infringement; and the Company and its subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (n) Environmental
        Laws.
        The
        Company and its subsidiaries are (i) in compliance with any and all applicable
        foreign, federal, state and local laws and regulations relating to the
        protection of human health and safety, the environment or hazardous or toxic
        substances or wastes, pollutants or contaminants (“Environmental
        Laws”),
        (ii)
        have received all permits, licenses or other approvals required of them under
        applicable Environmental Laws to conduct their respective businesses and
        (iii)
        are in compliance with all terms and conditions of any such permit, license
        or
        approval.

       

      (o) Title.
        Any
        real property and facilities held under lease by the Company and its
        subsidiaries are held by them under valid, subsisting and enforceable leases
        with such exceptions as are not material and do not interfere with the use
        made
        and proposed to be made of such property and buildings by the Company and
        its
        subsidiaries.

       

      (p) Insurance.
        The
        Company and each of its subsidiaries are insured by insurers of recognized
        financial responsibility against such losses and risks and in such amounts
        as
        management of the Company believes to be prudent and customary in the businesses
        in which the Company and its subsidiaries are engaged. Neither the Company
        nor
        any such subsidiary has been refused any insurance coverage sought or applied
        for and neither the Company nor any such subsidiary has any reason to believe
        that it will not be able to renew its existing insurance coverage as and
        when
        such coverage expires or to obtain similar coverage from similar insurers
        as may
        be necessary to continue its business at a cost that would not materially
        and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

       

      (q) Regulatory
        Permits.
        The
        Company and its subsidiaries possess all material certificates, authorizations
        and permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such certificate, authorization
        or
        permit.

       

      (r) Internal
        Accounting Controls.
        The
        Company and each of its subsidiaries maintain a system of internal accounting
        controls sufficient to provide reasonable assurance that (i) transactions
        are
        executed in accordance with management’s general or specific authorizations,
        (ii) transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, and (iii) the recorded amounts for assets
        is
        compared with the existing assets at reasonable intervals and appropriate
        action
        is taken with respect to any differences.

       

      (s) No
        Material Adverse Breaches, etc.
        Neither
        the Company nor any of its subsidiaries is subject to any charter, corporate
        or
        other legal restriction, or any judgment, decree, order, rule or regulation
        which in the judgment of the Company’s officers has or is expected in the future
        to have a material adverse effect on the business, properties, operations,
        financial condition, results of operations or prospects of the Company or
        its
        subsidiaries. Neither the Company nor any of its subsidiaries is in breach
        of
        any contract or agreement which breach, in the judgment of the Company’s
        officers, has or is expected to have a material adverse effect on the business,
        properties, operations, financial condition, results of operations or prospects
        of the Company or its subsidiaries.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (t) Tax
        Status.
        The
        Company and each of its subsidiaries has made and filed all federal and state
        income and all other tax returns, reports and declarations required by any
        jurisdiction to which it is subject and (unless and only to the extent that
        the
        Company and each of its subsidiaries has set aside on its books provisions
        reasonably adequate for the payment of all unpaid and unreported taxes) has
        paid
        all taxes and other governmental assessments and charges that are material
        in
        amount, shown or determined to be due on such returns, reports and declarations,
        except those being contested in good faith and has set aside on its books
        provision reasonably adequate for the payment of all taxes for periods
        subsequent to the periods to which such returns, reports or declarations
        apply.
        There are no unpaid taxes in any material amount claimed to be due by the
        taxing
        authority of any jurisdiction, and the officers of the Company know of no
        basis
        for any such claim.

       

      (u) Certain
        Transactions.
        Except
        for arm’s length transactions pursuant to which the Company makes payments in
        the ordinary course of business upon terms no less favorable than the Company
        could obtain from third parties and other than the grant of stock options
        disclosed in the SEC Documents, none of the officers, directors, or employees
        of
        the Company is presently a party to any transaction with the Company (other
        than
        for services as employees, officers and directors), including any contract,
        agreement or other arrangement providing for the furnishing of services to
        or
        by, providing for rental of real or personal property to or from, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any corporation, partnership, trust or other entity
        in
        which any officer, director, or any such employee has a substantial interest
        or
        is an officer, director, trustee or partner, except as disclosed in the SEC
        Documents.

       

      (v) Fees
        and Rights of First Refusal.
        The
        Company is not obligated to offer the securities offered hereunder on a right
        of
        first refusal basis or otherwise to any third parties including, but not
        limited
        to, current or former shareholders of the Company, underwriters, brokers,
        agents
        or other third parties.

       

      (w) Listing
        and Maintenance Requirements.
        The
        Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
        Exchange Act, and the Company has taken no action designed to terminate,
        or
        which to its knowledge is likely to have the effect of, terminating the
        registration of the Common Stock under the Exchange Act nor has the Company
        received any notification that the SEC is contemplating terminating such
        registration. The Company has not, in the twelve (12) months preceding the
        date
        hereof, received notice from any Primary Market on which the Common Stock
        is or
        has been listed or quoted to the effect that the Company is not in compliance
        with the listing or maintenance requirements of such Primary Market. The
        Company
        is, and has no reason to believe that it will not in the foreseeable future
        continue to be, in compliance with all such listing and maintenance
        requirements.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (x) Dilutive
        Effect.
        The
        Company understands and acknowledges that the number of Conversion Shares
        issuable upon conversion of the Convertible Debentures and the Warrant Shares
        issuable upon exercise of the Warrants will increase in certain circumstances.
        The Company further acknowledges that its obligation to issue Conversion
        Shares
        upon conversion of the Convertible Debentures in accordance with this Agreement
        and the Convertible Debentures and its obligation to issue the Warrant Shares
        upon exercise of the Warrants in accordance with this Agreement and the
        Warrants, in each case, is absolute and unconditional regardless of the dilutive
        effect that such issuance may have on the ownership interests of other
        stockholders of the Company.

       

      4. COVENANTS.

       

      (a) Best
        Efforts.
        Each
        party shall use its best efforts to timely satisfy each of the conditions
        to be
        satisfied by it as provided in Sections 6 and 7 of this Agreement.

       

      (b) Form
        D.
        The
        Company agrees to file a Form D with respect to the Conversion Shares as
        required under Regulation D and to provide a copy thereof to each Buyer promptly
        after such filing. The Company shall, on or before the Closing Date, take
        such
        action as the Company shall reasonably determine is necessary to qualify
        the
        Conversion Shares, or obtain an exemption for the Conversion Shares for sale
        to
        the Buyers at the Closing pursuant to this Agreement under applicable securities
        or “Blue Sky” laws of the states of the United States, and shall provide
        evidence of any such action so taken to the Buyers on or prior to the Closing
        Date.

       

      (c) Reporting
        Status.
        Until
        the earlier of (i) the date as of which the Buyer(s) may sell all of the
        Conversion Shares without restriction pursuant to Rule 144(k) promulgated
        under
        the Securities Act (or successor thereto), or (ii) the date on which (A)
        the
        Buyer(s) shall have sold all the Conversion Shares and (B) none of the
        Convertible Debentures are outstanding (the “Registration
        Period”),
        the
        Company shall file in a timely manner all reports required to be filed with
        the
        SEC pursuant to the Exchange Act and the regulations of the SEC thereunder,
        and
        the Company shall not terminate its status as an issuer required to file
        reports
        under the Exchange Act even if the Exchange Act or the rules and regulations
        thereunder would otherwise permit such termination.

       

      (d) Use
        of
        Proceeds.
        The
        Company will use the proceeds from the sale of the Convertible Debentures
        for
        acquisition purposes in connection and general corporate and working capital
        purposes of the Company and its subsidiaries.

       

      (e) Reservation
        of Shares.
        On the
        date hereof, the Company shall reserve for issuance to the Buyers 4,600,000
        shares for issuance upon conversions of the Convertible Dentures and exercise
        of
        the Warrants (collectively, the “Share
        Reserve”).
        The
        Company represents that it has sufficient authorized and unissued shares
        of
        Common Stock available to create the Share Reserve after considering all
        other
        commitments that may require the issuance of Common Stock. The Company shall
        take all action reasonably necessary to at all times have authorized, and
        reserved for the purpose of issuance, such number of shares of Common Stock
        as
        shall be necessary to effect the full conversion of the Convertible Debentures
        and the full exercise of the Warrants. If at any time the Share Reserve is
        insufficient to effect the full conversion of the Convertible Debentures
        or the
        full exercise of the Warrants, the Company shall increase the Share Reserve
        accordingly. If the Company does not have sufficient authorized and unissued
        shares of Common Stock available to increase the Share Reserve, the Company
        shall call and hold a special meeting of the shareholders within thirty (30)
        days of such occurrence, for the sole purpose of increasing the number of
        shares
        authorized. The Company’s management shall recommend to the shareholders to vote
        in favor of increasing the number of shares of Common Stock authorized.
        Management shall also vote all of its shares in favor of increasing the number
        of authorized shares of Common Stock.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (f) Listings
        or Quotation.
        The
        Company’s Common Stock shall be listed or quoted for trading on any of (a) the
        American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global
        Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board
        (“OTCBB”)
        (each,
        a “Primary
        Market”).
        The
        Company shall promptly secure the listing of all of the Registrable Securities
        (as defined in the Registration Rights Agreement) upon each national securities
        exchange and automated quotation system, if any, upon which the Common Stock
        is
        then listed (subject to official notice of issuance) and shall maintain such
        listing of all Registrable Securities from time to time issuable under the
        terms
        of the Transaction Documents.

       

      (g) Fees
        and Expenses.
        

       

      (i) Each
        of
        the Company and the Buyer(s) shall pay all costs and expenses incurred by
        such
        party in connection with the negotiation, investigation, preparation, execution
        and delivery of the Transaction Documents. The Company shall pay Yorkville
        Advisors LLC (“Yorkville”)
        a
        monitoring fee equal to $450,000 for monitoring and managing the investment by
        YA Global Investments, L.P. (“YA
        Global”)
        described herein, pursuant to Yorkville’s existing advisory obligations to YA
        Global. 

       

      (ii) The
        Company shall pay a structuring fee to Yorkville Advisors LLC of Twenty Five
        Thousand Dollars ($25,000) which shall be paid directly from the proceeds
        of the
        Closing. 

       

      (h) Corporate
        Existence.
        So long
        as any of the Convertible Debentures remain outstanding, the Company shall
        not
        directly or indirectly consummate any merger, reorganization, restructuring,
        reverse stock split consolidation, sale of all or substantially all of the
        Company’s assets or any similar transaction or related transactions (each such
        transaction, an “Organizational
        Change”)
        unless, prior to the consummation an Organizational Change, the Company obtains
        the written consent of each Buyer. In any such case, the Company will make
        appropriate provision with respect to such holders’ rights and interests to
        insure that the provisions of this Section 4(h) will thereafter be applicable
        to
        the Convertible Debentures.

       

      (i) Transactions
        With Affiliates.
        So long
        as any Convertible Debentures are outstanding, the Company shall not, and
        shall
        cause each of its subsidiaries not to, enter into, amend, modify or supplement,
        or permit any subsidiary to enter into, amend, modify or supplement any
        agreement, transaction, commitment, or arrangement with any of its or any
        subsidiary’s officers, directors, person who were officers or directors at any
        time during the previous two (2) years, stockholders who beneficially own
        five
        percent (5%) or more of the Common Stock, or Affiliates (as defined below)
        or
        with any individual related by blood, marriage, or adoption to any such
        individual or with any entity in which any such entity or individual owns
        a five
        percent (5%) or more beneficial interest (each a “Related
        Party”),
        except for (a) customary employment arrangements and benefit programs on
        reasonable terms, (b) any investment in an Affiliate of the Company, (c)
        any
        agreement, transaction, commitment, or arrangement on an arms-length basis
        on
        terms no less favorable than terms which would have been obtainable from
        a
        person other than such Related Party, (d) any agreement, transaction,
        commitment, or arrangement which is approved by a majority of the disinterested
        directors of the Company; for purposes hereof, any director who is also an
        officer of the Company or any subsidiary of the Company shall not be a
        disinterested director with respect to any such agreement, transaction,
        commitment, or arrangement. “Affiliate”
for
        purposes hereof means, with respect to any person or entity, another person
        or
        entity that, directly or indirectly, (i) has a ten percent (10%) or more
        equity
        interest in that person or entity, (ii) has ten percent (10%) or more common
        ownership with that person or entity, (iii) controls that person or entity,
        or
        (iv) shares common control with that person or entity. “Control”
or
        “controls”
for
        purposes hereof means that a person or entity has the power, direct or indirect,
        to conduct or govern the policies of another person or entity.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (j) Transfer
        Agent.
        The
        Company covenants and agrees that, in the event that the Company’s agency
        relationship with the transfer agent should be terminated for any reason
        prior
        to a date which is two (2) years after the Closing Date, the Company shall
        immediately appoint a new transfer agent and shall require that the new transfer
        agent execute and agree to be bound by the terms of the Irrevocable Transfer
        Agent Instructions (as defined herein).

       

      (k) Restriction
        on Issuance of the Capital Stock.
        So long
        as any Convertible Debentures are outstanding, the Company shall not, without
        twenty (20) calendar days prior written notice to the Buyer(s), (i) issue
        or
        sell shares of Common Stock or Preferred Stock without consideration or for
        a
        consideration per share less than the bid price of the Common Stock determined
        immediately prior to its issuance, (ii) issue any preferred stock, warrant,
        option, right, contract, call, or other security or instrument granting the
        holder thereof the right to acquire Common Stock without consideration or
        for a
        consideration less than such Common Stock’s Bid Price determined immediately
        prior to it’s issuance, (iii) enter into any security instrument granting the
        holder a security interest in any and all assets of the Company, or (iv)
        file
        any registration statement on Form S-8.

       

      (l) Neither
        the Buyer(s) nor any of its affiliates have an open short position in the
        Common
        Stock of the Company, and the Buyer(s) agrees that it shall not, and that
        it
        will cause its affiliates not to, engage in any short sales of or hedging
        transactions with respect to the Common Stock as long as any Convertible
        Debentures shall remain outstanding. 

       

      (m) Lock
        Up Agreements.
        On the
        date hereof, the Company shall obtain from each officer and director a lock
        up
        agreement in the form attached hereto as Exhibit
        C.

       

      5. TRANSFER
        AGENT INSTRUCTIONS.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (a) The
        Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
        agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
        Esq. as the Company’s agent for purpose instructing its transfer agent to issue
        certificates or credit shares to the applicable balance accounts at The
        Depository Trust Company (“DTC”),
        registered in the name of each Buyer or its respective nominee(s), for the
        Conversion Shares and the Warrant Shares issued upon conversion of the
        Convertible Debentures or exercise of the Warrants as specified from time
        to
        time by each Buyer to the Company upon conversion of the Convertible Debentures
        or exercise of the Warrants. The Company shall not change its transfer agent
        without the express written consent of the Buyers, which may be withheld
        by the
        Buyers in their sole discretion. The Company warrants that no instruction
        other
        than the Irrevocable Transfer Agent Instructions referred to in this Section
        5,
        and stop transfer instructions to give effect to Section 2(g) hereof (in
        the
        case of the Conversion Shares or Warrant Shares prior to registration of
        such
        shares under the Securities Act) will be given by the Company to its transfer
        agent, and that the Securities shall otherwise be freely transferable on
        the
        books and records of the Company as and to the extent provided in this Agreement
        and the other Transaction Documents. If a Buyer effects a sale, assignment
        or
        transfer of the Securities in accordance with Section 2(f), the Company shall
        promptly instruct its transfer agent to issue one or more certificates or
        credit
        shares to the applicable balance accounts at DTC in such name and in such
        denominations as specified by such Buyer to effect such sale, transfer or
        assignment and, with respect to any transfer, shall permit the transfer.
        In the
        event that such sale, assignment or transfer involves Conversion Shares or
        Warrant Shares sold, assigned or transferred pursuant to an effective
        registration statement or pursuant to Rule 144, the transfer agent shall
        issue
        such Securities to the Buyer, assignee or transferee, as the case may be,
        without any restrictive legend. Nothing in this Section 5 shall affect in
        any
        way the Buyer’s obligations and agreement to comply with all applicable
        securities laws upon resale of Conversion Shares. The Company acknowledges
        that
        a breach by it of its obligations hereunder will cause irreparable harm to
        the
        Buyer by vitiating the intent and purpose of the transaction contemplated
        hereby. Accordingly, the Company acknowledges that the remedy at law for
        a
        breach of its obligations under this Section 5 will be inadequate and agrees,
        in
        the event of a breach or threatened breach by the Company of the provisions
        of
        this Section 5, that the Buyer(s) shall be entitled, in addition to all
        other available remedies, to an injunction restraining any breach and requiring
        immediate issuance and transfer, without the necessity of showing economic
        loss
        and without any bond or other security being required.

       

      6. CONDITIONS
        TO THE COMPANY’S OBLIGATION TO SELL.

       

      The
        obligation of the Company hereunder to issue and sell the Convertible Debentures
        to the Buyer(s) at the Closing is subject to the satisfaction, at or before
        the
        Closing Date, of each of the following conditions, provided that these
        conditions are for the Company’s sole benefit and may be waived by the Company
        at any time in its sole discretion:

       

      (a) Each
        Buyer shall have executed the Transaction Documents and delivered them to
        the
        Company.

       

      (b) The
        Buyer(s) shall have delivered to the Company the Purchase Price for Convertible
        Debentures in respective amounts as set forth next to each Buyer as outlined
        on
        Schedule I attached hereto, minus any fees to be paid directly from the proceeds
        the Closings as set forth herein, by wire transfer of immediately available
        U.S.
        funds pursuant to the wire instructions provided by the Company.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (c) The
        representations and warranties of the Buyer(s) shall be true and correct
        in all
        material respects as of the date when made and as of the Closing Dates as
        though
        made at that time (except for representations and warranties that speak as
        of a
        specific date), and the Buyer(s) shall have performed, satisfied and complied
        in
        all material respects with the covenants, agreements and conditions required
        by
        this Agreement to be performed, satisfied or complied with by the Buyer(s)
        at or
        prior to the Closing Dates. 

       

      7. CONDITIONS
        TO THE BUYER’S OBLIGATION TO PURCHASE.

       

      (a) The
        obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
        at
        the Closing is subject to the satisfaction, at or before the Closing Date,
        of
        each of the following conditions:

       

      (i) The
        Company shall have executed the Transaction Documents and delivered the same
        to
        the Buyer(s).

       

      (ii) The
        Common Stock shall be authorized for quotation or trading on the Primary
        Market,
        trading in the Common Stock shall not have been suspended for any reason,
        and
        all the Conversion Shares issuable upon the conversion of the Convertible
        Debentures shall be approved for listing or trading on the Primary Market
        

       

      (iii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Closing Date

       

      (iv) The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures in the respective amounts set forth opposite each Buyer(s) name
        on
        Schedule I attached hereto.

       

      (v) The
        Buyer(s) shall have received an opinion of counsel from Sichenzia Ross Friedman
        Ference LLP in a form satisfactory to the Buyer(s).

       

      (vi) The
        Company shall have provided to the Buyers a true copy of a certificate of
        good
        standing evidencing the formation and good standing of the Company from the
        secretary of state (or comparable office) from the jurisdiction in which
        the
        Company is incorporated, as of a date within 10 days of the Closing
        Date.

       

      (vii) The
        Company shall have delivered to the Buyers a certificate, executed by the
        Secretary of the Company and dated as of the Closing Date, as to (i) the
        resolutions consistent with Section 3(c) as adopted by the Company's Board
        of
        Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
        of
        Incorporation and (iii) the Bylaws, each as in effect at the
        Closing.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (viii) The
        Company or the Buyer shall have filed a form UCC-1 or such other forms as
        may be
        required to perfect the Buyer’s interest in the Pledged Property as detailed in
        the Security Agreement dated the date hereof.

       

      (ix) The
        Company shall have provided to the Buyer an acknowledgement, to the satisfaction
        of the Buyer, from the Company’s independent certified public accountants as to
        its ability to provide all consents required in order to file a registration
        statement in connection with this transaction.

       

      (x) The
        Company shall have reserved out of its authorized and unissued Common Stock,
        solely for the purpose of effecting the conversion of the Convertible
        Debentures, shares of Common Stock to effect the conversion of all of the
        Conversion Shares then outstanding. 

       

      (xi) The
        Irrevocable Transfer Agent Instructions, in form and substance satisfactory
        to
        the Buyer, shall have been delivered to and acknowledged in writing by the
        Company’s transfer agent.

       

      8. INDEMNIFICATION.

       

      (a) In
        consideration of the Buyer’s execution and delivery of this Agreement and
        acquiring the Convertible Debentures and the Conversion Shares hereunder,
        and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Buyer(s) and
        each
        other holder of the Convertible Debentures and the Conversion Shares, and
        all of
        their officers, directors, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Buyer
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Buyer Indemnitee is a party to the action
        for
        which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Buyer Indemnitees or any of them as a result of, or arising
        out
        of, or relating to (a) any misrepresentation or breach of any representation
        or
        warranty made by the Company in this Agreement, the Convertible Debentures
        or
        the Investor Registration Rights Agreement or any other certificate, instrument
        or document contemplated hereby or thereby, (b) any breach of any covenant,
        agreement or obligation of the Company contained in this Agreement, or the
        Investor Registration Rights Agreement or any other certificate, instrument
        or
        document contemplated hereby or thereby, or (c) any cause of action, suit
        or
        claim brought or made against such Indemnitee and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement
        or
        any other instrument, document or agreement executed pursuant hereto by any
        of
        the parties hereto, any transaction financed or to be financed in whole or
        in
        part, directly or indirectly, with the proceeds of the issuance of the
        Convertible Debentures or the status of the Buyer or holder of the Convertible
        Debentures the Conversion Shares, as a Buyer of Convertible Debentures in
        the
        Company. To the extent that the foregoing undertaking by the Company may
        be
        unenforceable for any reason, the Company shall make the maximum contribution
        to
        the payment and satisfaction of each of the Indemnified Liabilities, which
        is
        permissible under applicable law.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (b) In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Buyer’s other obligations under this Agreement, the Buyer
        shall defend, protect, indemnify and hold harmless the Company and all of
        its
        officers, directors, employees and agents (including, without limitation,
        those
        retained in connection with the transactions contemplated by this Agreement)
        (collectively, the “Company
        Indemnitees”)
        from
        and against any and all Indemnified Liabilities incurred by the Indemnitees
        or
        any of them as a result of, or arising out of, or relating to (a) any
        misrepresentation or breach of any representation or warranty made by the
        Buyer(s) in this Agreement, instrument or document contemplated hereby or
        thereby executed by the Buyer, (b) any breach of any covenant, agreement
        or
        obligation of the Buyer(s) contained in this Agreement, the Investor
        Registration Rights Agreement or any other certificate, instrument or document
        contemplated hereby or thereby executed by the Buyer, or (c) any cause of
        action, suit or claim brought or made against such Company Indemnitee based
        on
        material misrepresentations or due to a material breach and arising out of
        or
        resulting from the execution, delivery, performance or enforcement of this
        Agreement, the Investor Registration Rights Agreement or any other instrument,
        document or agreement executed pursuant hereto by any of the parties hereto.
        To
        the extent that the foregoing undertaking by each Buyer may be unenforceable
        for
        any reason, each Buyer shall make the maximum contribution to the payment
        and
        satisfaction of each of the Indemnified Liabilities, which is permissible
        under
        applicable law.

       

      9. GOVERNING
        LAW: MISCELLANEOUS.

       

      (a) Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of New Jersey without regard to the principles of conflict of laws.
        The parties further agree that any action between them shall be heard in
        Hudson
        County, New Jersey, and expressly consent to the jurisdiction and venue of
        the
        Superior Court of New Jersey, sitting in Hudson County and the United States
        District Court for the District of New Jersey sitting in Newark, New Jersey
        for
        the adjudication of any civil action asserted pursuant to this
        Paragraph.

       

      (b) Counterparts.
        This
        Agreement may be executed in two or more identical counterparts, all of which
        shall be considered one and the same agreement and shall become effective
        when
        counterparts have been signed by each party and delivered to the other party.
        In
        the event any signature page is delivered by facsimile transmission, the
        party
        using such means of delivery shall cause four (4) additional original executed
        signature pages to be physically delivered to the other party within five
        (5)
        days of the execution and delivery hereof.

       

      (c) Headings.
        The
        headings of this Agreement are for convenience of reference and shall not
        form
        part of, or affect the interpretation of, this Agreement.

       

      (d) Severability.
        If any
        provision of this Agreement shall be invalid or unenforceable in any
        jurisdiction, such invalidity or unenforceability shall not affect the validity
        or enforceability of the remainder of this Agreement in that jurisdiction
        or the
        validity or enforceability of any provision of this Agreement in any other
        jurisdiction.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (e) Entire
        Agreement, Amendments.
        This
        Agreement supersedes all other prior oral or written agreements between the
        Buyer(s), the Company, their affiliates and persons acting on their behalf
        with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor any Buyer makes any representation,
        warranty, covenant or undertaking with respect to such matters. No provision
        of
        this Agreement may be waived or amended other than by an instrument in writing
        signed by the party to be charged with enforcement.

       

      (f) Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        confirmation of receipt, when sent by facsimile; (iii) three (3) days after
        being sent by U.S. certified mail, return receipt requested, or (iv) one
        (1) day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        	
                If
                  to the Company, to:

              	
                Titan
                  Global Holdings, Inc.

              
	 	
                1700
                  Jay Ell Drive Suite 200

              
	 	
                Richardson,
                  Texas 75081

              
	 	
                Attention:
                  Bryan M. Chance, President & CEO

              
	 	
                Telephone: (972)
                  470-9100

              
	 	
                Facsimile: (972)
                  767-3117

              
	 	 
	
                With
                  a copy to:

              	
                Sichenzia
                  Ross Friedman Ference LLP

              
	 	
                61
                  Broadway, 32nd
                  Floor

              
	 	
                New
                  York, NY 10006

              
	 	
                Attention:
                  Thomas A. Rose, Esq.

              
	 	
                Telephone:
                  (212) 930-9700

              
	 	
                Facsimile:
                  (212) 930-9725

              
	 	 

      

      If
        to the
        Buyer(s), to its address and facsimile number on Schedule I, with copies
        to the
        Buyer’s counsel as set forth on Schedule I. Each party shall provide five (5)
        days’ prior written notice to the other party of any change in address or
        facsimile number.

       

      (g) Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and assigns. Neither the Company nor any Buyer
        shall
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of the other party hereto.

       

      (h) No
        Third Party Beneficiaries.
        This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other person.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (i) Survival.
        Unless
        this Agreement is terminated under Section 9(l), the representations and
        warranties of the Company and the Buyer(s) contained in Sections 2 and 3,
        the
        agreements and covenants set forth in Sections 4, 5 and 9, and the
        indemnification provisions set forth in Section 8, shall survive the Closing
        for
        a period of two (2) years following the date on which the Convertible Debentures
        are converted in full. The Buyer(s) shall be responsible only for its own
        representations, warranties, agreements and covenants hereunder.

       

      (j) Publicity.
        The
        Company and the Buyer(s) shall have the right to approve, before issuance
        any
        press release or any other public statement with respect to the transactions
        contemplated hereby made by any party; provided, however, that the Company
        shall
        be entitled, without the prior approval of the Buyer(s), to issue any press
        release or other public disclosure with respect to such transactions required
        under applicable securities or other laws or regulations (the Company shall
        use
        its best efforts to consult the Buyer(s) in connection with any such press
        release or other public disclosure prior to its release and Buyer(s) shall
        be
        provided with a copy thereof upon release thereof).

       

      (k) Further
        Assurances.
        Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      (l) Termination.
        In the
        event that the First Closing shall not have occurred with respect to the
        Buyers
        on or before five (5) business days from the date hereof due to the Company’s or
        the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
        above (and the non-breaching party’s failure to waive such unsatisfied
        condition(s)), the non-breaching party shall have the option to terminate
        this
        Agreement with respect to such breaching party at the close of business on
        such
        date without liability of any party to any other party; provided, however,
        that
        if this Agreement is terminated by the Company pursuant to this Section 9(l),
        the Company shall remain obligated to reimburse the Buyer(s) for the fees
        and
        expenses of Yorkville Advisors LLC described in Section 4(g) above.

       

      (m) Brokerage.
        The
        Company represents that no broker, agent, finder or other party has been
        retained by it in connection with the transactions contemplated hereby and
        that
        no other fee or commission has been agreed by the Company to be paid for
        or on
        account of the transactions contemplated hereby.

       

      (n) No
        Strict Construction.
        The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

      

      [REMAINDER
        PAGE INTENTIONALLY LEFT BLANK]

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their respective signature page to this
        Securities Purchase Agreement to be duly executed as of the date first written
        above.

       

      

      
        	 	 	
                COMPANY:

              
	 	 	
                TITAN
                  GLOBAL HOLDINGS, INC. 

              
	 	 	 
	 	By: 	
                /s/Bryan
                  M. Chance   

              
	 	 	
                Name: Bryan
                  M. Chance

              
	 	 	
                Title: President
                  & CEO

              
	 	 	 

      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their respective signature page to this
        Securities Purchase Agreement to be duly executed as of the date first written
        above.

       

      

      
        	 	 	
                BUYERS:

              
	 	 	
                YA
                  GLOBAL INVESTMENTS, L.P. 

              
	 	 	 
	 	By: 	
                Yorkville
                  Advisors, LLC 

              
	 	 	
                Its: Investment
                  Manager

              
	 	 	 
	 	 	 
	 	By:	
                /s/
                  Mark Angelo

              
	 	 	
                Name: Mark
                  Angelo

              
	 	 	
                Its: Portfolio
                  Manager

              

      

      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS

      

      
        	
                (1)

              	 	
                (2)

              	 	
                (3)

              	 	
                (4)

              	 	
                (5)

              	 	
                (6)

              	 	
                (7)

              	 	
                (8)

              
	
                Buyer
                  

              	 	
                Subscription
                  Amount

              	 	
                Number
                  of Warrant Shares

              	 	 	 	 	 	
                Legal
                  Representative’s Address and Facsimile Number

              
	 	 	
                Closing

              	 	 	 	 	 	
                Closing

              	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                YA
                  Global Investments, L.P.

                 

                101
                  Hudson Street, Suite 3700

                Jersey
                  City, NJ 07303

                Attention:
                  Mark Angelo

                Telephone:
                  (201) 985-8300

                Facsimile:
                  (201) 985-8266

                Residence:
                  Cayman Islands

              	 	
                $6,000,000

              	 	 	 	 	 	
                525,000
                  shares at $2.47 per share

                 

                525,000
                  shares at $2.81 per share

              	 	 	 	 	 	
                Troy
                  Rillo,
                  Esq.

                101
                  Hudson Street, Suite 3700

                Jersey
                  City, New Jersey 07302 

                Telephone:
                  (201) 985-8300 

                Facsimile:
                  (201) 985-8266

              
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      DISCLOSURE
        SCHEDULE

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      FORM
        OF CONVERTIBLE DEBENTURE

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      FORM
        OF WARRANT

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        C

       

      LOCK
        UP AGREEMENT

       

      The
        undersigned hereby agrees that for a period commencing on September 17, 2007
        and
        expiring on the date thirty (30) days after the date that all amounts owed
        to YA
        Global Investments, LP (the “Buyer”),
        under
        the Secured Convertible Debentures issued to the Buyer pursuant to the
        Securities Purchase Agreement between Titan Global Holdings, Inc. (the
“Company”)
        and
        the Buyer dated September 17, 2007 have been paid (the “Lock-up
        Period”),
        he,
        she or it will not, directly or indirectly, without the prior written consent
        of
        the Buyer, issue, offer, agree or offer to sell, sell, grant an option for
        the
        purchase or sale of, transfer, pledge, assign, hypothecate, distribute or
        otherwise encumber or dispose of any securities of the Company, including
        common
        stock or options, rights, warrants or other securities underlying, convertible
        into, exchangeable or exercisable for or evidencing any right to purchase
        or
        subscribe for any common stock (whether or not beneficially owned by the
        undersigned), or any beneficial interest therein (collectively, the
“Securities”)
        except
        in accordance with the volume limitations set forth in Rule 144(e) of the
        General Rules and Regulations under the Securities Act of 1933, as
        amended.

       

      In
        order
        to enable the aforesaid covenants to be enforced, the undersigned hereby
        consents to the placing of legends and/or stop-transfer orders with the transfer
        agent of the Company’s securities with respect to any of the Securities
        registered in the name of the undersigned or beneficially owned by the
        undersigned, and the undersigned hereby confirms the undersigned’s investment in
        the Company.

       

      
        	Dated:
                _______________, 2007	 	 
	 	 
	 	Signature
	 
 	  
	 	Name:
	 
	 	Address:	 
	 	City,
                State, Zip Code:	
              
	 	 	 
	 	 	 
	 	 	 
	 	
                Print
                  Social Security Number 

                or
                  Taxpayer I.D. Number

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]