Document:

CONTRACT OF EMPLOYMENT

     This Contract of Employment is made this 17th day of November, 2005, and is
effective as of the 17th day of November, 2005, by and between Islands Community
Bank, A South Carolina Corporation, hereinafter referred to as the "EMPLOYER",
and John R. Perrill, hereinafter referred to as the "EMPLOYEE".

     In consideration of the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency which is hereby
acknowledged. The Parties hereto, hereby agree as follows:

1.   EMPLOYMENT:

     The Employer shall employ the Employee, and the Employee shall serve the
     Employer as Senior Loan Officer/Acting CEO. The Employee shall serve as
     Acting CEO until his replacement has been named. The Employee shall have
     such authority and responsibilities consistent with his positions as set
     forth in the Employer's By-Laws and Policies. Except with the written
     consent of the Employee, Employee shall not be permanently assigned to any
     position of lower professional status. The parties hereto further agree to
     the following terms and conditions.

2.   TERM:

     Unless earlier terminated as provided herein, the initial term of the
     Employee's employment under this agreement shall be for a term of five (5)
     consecutive years, commencing on the effective date herein above stated.

3.   COMPENSATION AND BENEFITS:

     As compensation for the services to be rendered by the Employee under this
     agreement, Employee shall be compensated as follows:

     a)   the Employee shall have a base salary as of the effective date herein
          above written of $135,000.00 per year, and shall be entitled to salary
          increases pursuant to the "Salary and Bonus Incentive Plan"
          implemented by the Board of Directors. The Salary and Bonus Incentive
          Program is attached hereto and made a part hereof.

     b)   The Employee shall be entitled to all fringe benefits as are provided
          to all bank employees under the Bank's fringe benefit program.

     c)   Dues: Employer shall pay all dues of Employee as a member of two
          ----
          service and two social or country club organizations, which shall be
          approved by the parties hereto.

     d)   Vacation: Employer shall provide paid vacation time to Employee as
          --------
          provided by Bank or "Company" policy, commencing as of effective date
          of this Agreement.

          Such days are to be taken at such time or times as Employee may
          reasonably request, subject to the Employee's convenience and prior
          approval, which approval shall not be unreasonably withheld. Vacation
          time shall not cumulate year-to-year. Any unused vacation time will be
          reimbursed to the Employee.

     e)   Car Allowance: The Employer shall provide Employee a car or travel
          -------------
          allowance of $600.00 per month.

<PAGE>
     f)   Health Insurance: The Employer shall provide the Employee with health
          ----------------
          insurance under an individual or group insurance plan. The Employee
          shall be required to pay 50% of the monthly, quarterly or annual
          premium for coverage for his spouse.

     g)   Expenses: The Employer shall reimburse the Employee for all expenses
          --------
          paid by the Employee while providing services for the Employer
          pursuant to this Contract of Employment.

     h)   The Employer shall provide to the Employee a "401-K" Retirement and
          Investment Plan, and match any payments which Employee shall make into
          such 401-K plan up to 6%.

     i)   Severance Pay: In the event that the Employer shall sell the "Bank"
          -------------
          within a five year period from the effective date of this agreement,
          the Employee shall be entitled to two years severance pay upon change
          of control, unless, the Employee is provided continued employment
          under the same terms and conditions as are herein provided or
          substantially the same terms and conditions as provided herein. A
          substantial change in terms and conditions shall include but is not
          limited to

          a)   reduction in salary,

          b)   change in position or duties and responsibilities,

          c)   change in benefits provided herein, or

          d)   bonus provisions.

          A substantial change in terms and conditions shall not include a
          return to the position of Senior Loan Officer once a CEO has been
          named.

5.   TERMINATION:

     a)   For Cause by Employer. Notwithstanding any other provisions hereof,
          ---------------------
          Employer may terminate Employee's employment under this Agreement
          immediately at any time for Cause upon delivery to Employee of written
          notice specifying the basis for such termination hereunder. The term
          Cause shall include any of the following: (i) the commission by
          Employee of a willful act (including, without limitation, a dishonest,
          fraudulent or unethical act, or willful or recurring insubordination)
          or a grossly negligent act, or the willful or grossly negligent
          omission to act by Employee, which is intended to cause, or causes
          material harm to Employer, (ii) the indictment of Employee for the
          commission or perpetration by Employee of any felony or any crime
          involving dishonesty, moral turpitude or fraud, (iii) the material
          breach by Employee of this Agreement, (iv) the material violation by
          Employee of any federal or state banking law, rule or regulation;
          causing or permitting, whether intentionally or negligently, Employer
          to materially violate any federal or state banking law, rule or
          regulation, (v) the suspension or temporary prohibition of Employee's
          participation in the conduct of the affairs of Employer or any
          subsidiary of Employer by notice served under Section 8(e) of the
          Federal Deposit Insurance Act (12 U.S.C., Section 1818(e), (vi) the
          receipt of any form of notice, written or otherwise, that any
          regulatory agency having jurisdiction over Employer intends to
          institute any form of formal or informal (e.g., a memorandum of
          understanding which relates to Employee's performance) regulatory
          action

<PAGE>
          against Employee or Employer (provided that the Board of Directors
          determines in good faith, that the subject matter of such action
          involves acts or omissions by or under the supervision of Employee or
          that termination of Employee would materially advance Employer's
          compliance with the purpose of the action or would materially assist
          Employer in avoiding or reducing the restrictions or adverse effects
          to Employer related to the regulatory action), (vii) the exhibition by
          Employee of a standard of behavior within the scope of his employment
          that is materially disruptive to the orderly conduct of Employer's
          business operations (including, without limitation, substance abuse or
          sexual misconduct) to a level which, in the Board of Director's good
          faith and reasonable judgment, is materially detrimental to Employers
          best interest; (viii) the failure of Employee to devote his full
          business time and attention to his employment as provided under this
          Agreement that, if susceptible of cure, remains uncured 60 days
          following written notice to Employee of such failure; or (ix) the
          failure by the Employee to achieve or maintain the reasonable
          performance goals established by the Board of Directors from time to
          time for Employee and Employer that, if susceptible of cure, remains
          uncured 60 days following written notice to Employee of such failure.
          All compensation (including without limitation the base salary, and
          all perquisites and fringe benefits) to which Employee would otherwise
          be entitled (for periods after the effective date of such termination)
          shall be discontinued and forfeited as of the effective date of such
          termination.

     b)   Without Cause by Employer. The Bank shall pay to the Employee in a
          -------------------------
          lump sum, an amount equal to the sum of (a) the Employee's salary, as
          in effect at the effective time of the termination of employment and,
          (b) the amount of the bonus earned by the Employee during the prior
          calendar year (the "lump sum payment").

     c)   Termination by Employee. Employee may with, or without cause,
          -----------------------
          terminate this Agreement upon thirty (30) days prior written notice to
          Employer. In the event of such termination all compensation (including
          without limitation, the annual salary, and all perquisites and fringe
          benefits, as well as any bonus earned in the previous twelve (12)
          month period shall be forfeited as of the effective date of such
          termination.

     d)   Disability. In the event of the Employee's disability during
          ----------
          employment under this Agreement, then employment under this Agreement
          shall terminate. For purposes of this Agreement, except as provided
          herein below, "disability" shall mean the inability of Employee, due
          to sickness or other incapacity, to perform Employee's duties under
          this Agreement for a period in excess of ninety (90) substantially
          consecutive days. Such termination shall become effective at
          Employer's election upon the expiration of such ninety (90) day period
          of disability. Upon termination of employment under this Agreement due
          to Employee's disability, all compensation (including without
          limitation the base salary, and all perquisites and fringe benefits)
          to which Employee would otherwise be entitled (for periods after the
          effective date of such termination) shall be discontinued and
          forfeited as of the effective date of such termination. During the
          period of any incapacity leading up to and ending on the termination
          of the Employee's employment as a result of disability, the Employer
          shall continue to pay the Employee his full salary at the rate then in
          effect and all perquisites and other benefits (other than any bonus).
          Furthermore, the Employee shall receive any bonus earned or accrued
          under the Bonus Plan through the date of incapacity (including any
          amounts awarded for previous years but which were not yet vested) and
          a pro rata share of any bonus with respect to the current fiscal year
          which had been earned as of the date of the

<PAGE>
          Employee's incapacity. These provisions shall be applicable exclusive
          of the terms and provisions of any Disability Insurance Policy
          provided by the Employer.

     e)   Return of Materials. The Employee shall surrender to the Employer,
          -------------------
          promptly upon its request and in any event upon termination of the
          Employee's employment, all media, documents, notebooks, computer
          programs, handbooks, data files, models, samples, price lists,
          drawings, customer lists, prospect data, or other material of any
          nature whatsoever (in tangible or electronic form) in the Employee's
          possession or control, including all copies thereof, relating to the
          Employer, its business, or its customers. Upon the Request of the
          Employer, Employee shall certify in writing compliance with the
          foregoing requirement.

6.   Confidentiality and Secrecy. Employee acknowledges that in and as a
     ---------------------------
     result of Employee's employment hereunder, Employee will be making use of,
     acquiring, and/or adding to confidential information of a special and
     unique nature and value relating to Employer's business, including without
     limitation technological know how, copyrights, proprietary information,
     trade secrets, systems, procedures, manuals, confidential reports, records,
     operational expertise, lists of customers and projects, the nature and type
     of services rendered by Employer, the equipment and methods used and
     preferred by Employer's customers, and the fees paid by them (all of which
     are deemed for all purposes confidential and proprietary). As a material
     inducement to Employer to enter into this Agreement and to pay to Employee
     the compensation stated in Section 3, Employee covenants and agrees that
                                ---------
     during the term of Employee's employment hereunder, and for one (1) year
     after the expiration or earlier termination of Employee's employment by
     Employer or an affiliate of Employer, Employee shall not, directly, make
     use of, or disclose to any person or entity, any confidential information
     of Employer or its affiliates.

7.   Burden and Benefit. This Agreement shall be binding upon, and shall inure
     ------------------
     to the benefit of, Employer and Employee and their respective personal and
     legal representatives, successors, and permitted assigns.

8.   Assignment. This Agreement and any rights hereunder are personal to
     ----------
     Employee and Employer shall not be assigned or otherwise transferred by
     Employee. Employer shall be entitled to assign this Agreement to any
     corporation controlled by Employer.

9.   Governing Law/Jurisdiction. The construction and interpretation of this
     --------------------------
     Agreement shall at all times and in all respects, be governed by the laws
     of the State of South Carolina. The parties hereby (i) agree that any
     litigation, action or proceeding arising out of or relating to this
     Agreement may be instituted in a state or federal court in the State of
     South Carolina, (ii) waives any objection which it might have now or
     hereafter to any such litigation, action or proceeding based upon improper
     venue or inconvenient forum, and (iii) irrevocably submits to the
     jurisdiction of such courts in any such litigation, action or proceeding.
     For all purposes of this Agreement, the parties hereby further agree that
     service of process upon any party may be effective pursuant to United
     States mail.

10.  Severability. The provisions of this Agreement shall be deemed
     ------------
     severable, and the invalidity or unenforceability of any one or more of the
     provisions of this Agreement shall not affect the validity and
     enforceability of the other provisions.

11.  Modifications. This Agreement can only be modified by a written
     -------------
     agreement duly signed by authorized representatives of the parties hereto.
     Moreover, in order to avoid uncertainty, ambiguity and misunderstandings in
     their relationships, the parties hereto

<PAGE>
     covenant and agree not to enter into any oral agreement or understanding
     inconsistent or in conflict with this Agreement; and the parties hereto
     further covenant and agree that any oral communication allegedly or
     purportedly constituting such an agreement or understanding shall be
     absolutely null, void and without effect.

12.  Waiver. Any waiver by either party of any breach or any term or
     ------
     condition hereof shall be effective only if in writing and such writing
     shall not be deemed to be a waiver of any subsequent or other breach, term
     or condition of this Agreement.

13.  Entire Agreement. This Agreement contains the entire agreement and
     ----------------
     understanding by and between Employer and Employee with respect to the
     subject matter hereof and supersedes all prior and contemporaneous written
     or oral agreement and representations between the parties with respect
     thereto.

     IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement
under seal to be effective as of the day and year first above written.

IN THE PRESENCE OF:                              EMPLOYEE:

     /s/ Carol J. Nelson
----------------------------
Witness

     /s/ Louis O. Dore                                /s/ John R. Perrill
----------------------------                     -----------------------------
Witness                                           JOHN R. PERRILL

                                                  EMPLOYER

/s/ Carol J. Nelson
----------------------------
Witness

     /s/ Louis O. Dore                           By:    /s/ D. Martin Goodman
----------------------------                     -----------------------------
Witness                                          Its: ChairmanExhibit 10.1

    
      

    

    EXECUTION
      COPY

    

    LEASE
      AGREEMENT

    

    BETWEEN

    

    

    TKC
      XCIX,
      LLC,

    A
      NORTH
      CAROLINA LIMITED LIABILITY COMPANY,

    AS
      LANDLORD,

     

    AND

     

    BIG
      DOG
      HOLDINGS, INC., 

    DELAWARE
      CORPORATION

    AS
      TENANT

    

    

    DATED___________,
      2006

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LEASE
      AGREEMENT

    

    THIS
      LEASE AGREEMENT (this “Lease”) is made as of the ____ day of ___________, 2006
      by and between TKC XCIX, LLC, a North Carolina limited liability company
      (“Landlord”), and BIG DOG HOLDINGS, INC., a Delaware corporation (“Tenant”).

    

    RECITALS:

    

    A.   Landlord
      anticipates becoming the owner of those parcels of property located on Lincoln
      County Parkway in the Lincoln County Industrial Park, Lincoln County, North
      Carolina and described on Exhibit A attached hereto (the “Property”) and
      containing approximately 34 acres. 

    

    B.    In
      consideration of the agreement of Landlord to construct certain improvements
      on
      the Property and the other covenants and conditions set forth in this Lease,
      Tenant has agreed to lease the Property, and all the improvements thereon,
      from
      Landlord on the terms and conditions set forth in this Lease.

    

    AGREEMENT:

    

    NOW,
      THEREFORE, for and in consideration of the mutual covenants and agreements
      contained in this Lease and other good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
      covenant and agree as follows:

    

    I.

    

    SECTION
      1.1  BASIC
      LEASE TERMS.
      The
      terms set out and defined in this Section, whenever used in this Lease with
      the
      first letter of each word capitalized, shall have only the meanings set forth
      in
      this Section, unless such meanings are expressly modified, limited or expanded
      elsewhere in this Lease.

    

    1.1.1  
      Additional
      Rental” shall mean all sums payable by Tenant pursuant to this Lease, except
      Annual Basic Rental.

    

    1.1.2  
      “Annual
      Basic Rental” shall, for each of Rental Years one through five, be an amount
      equal to $751,500.00 (payable in each monthly installments of $62,625.00) and
      for each of Rental Years six through ten, the Annual Basic Rental shall be
      an
      amount equal to $838,472.00 (payable in equal monthly installments of
      $69,872.66). On the first day of each Option Term and on the five year annual
      anniversary of the first day of each Option Term, the Annual Basic Rental shall
      increase by 10% over the amount of Annual Basic Rental for the immediately
      preceding Rental Year. Annual Basic Rental shall be subject to adjustment as
      set
      forth in Section
      7.1(c).
      

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    1.1.3  
      “Construction
      Force Majeure” shall mean any delay due to a cause not within the reasonable
      control of Landlord, including, without limitation, labor strikes or shortages,
      acts of God, unusually severe and abnormal weather conditions, abnormal material
      shortages that could not be foreseen or avoided or governmental action which
      interferes with construction. With respect to “unusually severe and abnormal
      weather conditions”, if adverse weather conditions are the basis for a claim for
      additional time, such claim shall be documented by data substantiating that
      weather conditions were abnormal for the period of time, could not have been
      reasonably anticipated and had an adverse effect on the scheduled construction.
      Landlord and Tenant acknowledge and agree that both parties anticipate weather
      delays of 24 calendar days during the Project's course of construction based
      on
      the historical seasonal average of weather delays for the Project area. Landlord
      has taken this into account in determining the Turnover Date. To the extent
      adverse weather delays exceed 24 calendar days during the Project's course
      of
      construction due to unusual weather delays, Tenant shall give Landlord credit
      for each day of additional delay, and the Turnover Date shall be adjusted
      accordingly. Landlord shall only be afforded time credit for additional delays
      resulting from “unusually several and abnormal weather conditions” if (i) such
      conditions cause a delay in the Landlord’s Work on the critical path (as opposed
      to any other Landlord’s Work) in a manner that such Work on the critical path
      may not be reasonably performed as a direct result of the adverse weather
      conditions, and (ii) Landlord notifies Tenant in writing within ten (10) days
      of
      the alleged weather delay. 

    

    1.1.4  
      “Construction
      Plans” shall have the meaning set forth in Section
      7.1(a).

    

    1.1.5  
      “Default
      Rate” shall be an annual rate of the Prime Rate plus two percent
      (2%).

    

    1.1.6  
      “Event
      of
      Default” shall have the meaning set forth in Section
      15.1.

    

    1.1.7  
      “Force
      Majeure” shall mean any event the occurrence of which prevents or delays the
      performance by Landlord or Tenant of any obligation imposed upon it hereunder
      (other than the payment of money) and the prevention or cessation of which
      event
      is beyond the reasonable control of the obligor.

    

    1.1.8  
      “GAAP”
      shall mean Generally Accepted Accounting Principles.

    

    1.1.9  
      “General
      Contractor” or “Contractor” shall mean Choate Constructors Inc. 

    

    1.1.10 
      “Hazardous
      Substances” shall have the meaning set forth in Section
      19.16.

    

    1.1.11 
      “Improvements”
      shall mean the improvements to be constructed pursuant to the Scope of
      Landlord’s Work, the proposed location of which is shown on the Site
      Plan.

    

    1.1.12 
      “Initial
      Termination Date” shall mean midnight on the date that is ten (10) years
      following the Rent Commencement Date, subject to extension as set forth in
      Section
      3.3.

    

    1.1.13 
      “Landlord’s
      Work” shall have the meaning attributed to it in Section
      7.1(a).

    

    1.1.14 
      “Lease
      Termination Date” shall mean the earlier to occur of (i) midnight on the Initial
      Termination Date, or the expiration date of the last Option Term exercised
      by
      Tenant pursuant to Section
      3.3
      hereof
      and (ii) the date that this Lease is terminated pursuant to the express terms
      hereof.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.1.15 
      “Mortgage”
      shall have the meaning set forth in Section
      16.1.

    

    1.1.16 
      “Mortgagee”
      shall have the meaning set forth in Section
      16.1.

    

    1.1.17 
      “Option
      Term” shall mean any of Option Term One or Option Term Two, as applicable.

    

    1.1.18 
      “Option
      Term One” shall mean a period of ten (10) years, commencing on the Initial
      Termination Date and expiring at midnight on the date preceding the ten (10)
      year annual anniversary of the Initial Termination Date, all as described in
      and
      as contemplated by Section
      3.3.

    

    1.1.19 
      “Option
      Term Two” shall mean a period of ten (10) years, commencing on the expiration of
      Option Term One and expiring at midnight on the date preceding the ten (10)
      year
      annual anniversary of the commencement date of Option Term One, all as described
      and as contemplated by Section
      3.3.

    

    1.1.20 
      “Permitted
      Encumbrances” shall mean the encumbrances to Landlord’s title to the Property as
      set forth on Exhibit
      D
      hereto,
      together with all utility easements recorded after the date of this Lease which
      do not materially interfere with Tenant’s use of the Property or impose a
      material obligation on Tenant.

    

    1.1.21 
      “Permitted
      Use” shall mean the use of the Premises for general office uses and for
      warehouse uses and in no event for any use prohibited by the Permitted
      Encumbrances or by applicable law, including applicable zoning
      laws.

    

    1.1.22 
      “Premises”
      shall mean the Property and the Improvements.

    

    1.1.23 
      “Prime
      Rate” shall mean the rate of interest per annum adopted from time to time by
      Wachovia Bank (or its successor) as its prime rate.

    

    1.1.24 
      “Property”
      shall have the meaning set forth in the Recitals.

    

    1.1.25 
      “Punchlist”
      shall mean that list of construction items remaining to be repaired, corrected
      or completed which are of a minor nature (such as touch-up paint, or repair
      of
      door-knobs), so that Tenant could occupy the Premises and conduct its business
      therefrom without any material interference, within forty-five (45) days after
      the Turnover Date. 

    

    1.1.26 
      “Rent
      Commencement Date” shall mean the date thirty (30) days following the Turnover
      Date. The Rent Commencement Date shall be subject to adjustment in accordance
      with the provisions set forth in Section
      3.1(b).

    

    1.1.27 
      “Rental”
      shall mean the Annual Basic Rental plus all Additional Rental
      hereunder.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.1.28 
      “Rental
      Year” shall mean a period of one (1) year, with the first Rental Year commencing
      on the Rent Commencement Date and expiring on the day preceding the first
      anniversary of the Rent Commencement Date and each subsequent Rental Year
      commencing upon the expiration of the prior Rental Year and continuing until
      the
      next subsequent anniversary of the Rent Commencement Date.

    

    1.1.29 
      “Scheduled
      Turnover Date” shall have the meaning set forth in Section
      3.1(b).

    

    1.1.30 
      “Scope
      of
      Landlord’s Work” shall mean the scope of the Landlord’s Work attached hereto as
Exhibit
      B.

    

    1.1.31 
      “Site
      Plan” shall mean the site plan of the Property attached hereto as Exhibit
      E
      which
      shows the proposed location of the Improvements.

    

    1.1.32 
      “Taxes”
      shall have the meaning set forth in Section
      6.1.

    

    1.1.33 
      “Tenant
      Changes” shall mean, collectively, all changes in or modifications to the Scope
      of Landlord’s Work either requested by Tenant or necessitated because of
      unanticipated changes in applicable laws, rules and regulations as of the date
      of this Lease, including, but not limited to, unanticipated changes in zoning
      laws, building codes and city ordinances as of the date of this Lease. Tenant
      Changes shall not include changes (i) to the Construction Plans or the Scope
      of
      Landlord’s Work in the nature of clarification or (ii) which do not change the
      Scope of Landlord’s Work and will not cause an increase in the cost or the time
      necessary to complete the Landlord’s Work. 

    

    1.1.34 
      “Tenant
      Delays” means (i) any delay in the performance of the Landlord’s Work caused by
      Tenant Changes, (ii) the delay beyond the time periods provided to Tenant in
      making elections, approvals or choices required to be made hereunder, and (iii)
      any delay in completion of the Landlord’s Work’s caused by Tenant.

    

    1.1.35
       “Tenant
      Fixtures” shall have the meaning set forth in Section
      7.4.

    

    1.1.36
       “Tenant
      Notice Address” shall mean:

    

    Big
      Dog
      Holdings, Inc.

    121
      Gray
      Avenue

    Santa
      Barbara, California 93101

    Attention:
      Roberta Morris, CFO

    (800)
      636-9888

    

    with
      a
      copy of any notice of default to Tenant’s attorney:

    

    Buchalter
      Nemer

    1000
      Wilshire Boulevard, Suite 1500

    Los
      Angeles, California 90017

    Attention:
      Nadav Ravid, Esq.

    (213)
      891-5087

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    1.1.37
       “Term”
      shall mean the period of time during this Lease between the date hereof and
      the
      Lease Termination Date.

    

    1.1.38
       “Turnover
      Date” shall mean the date on which (i) Landlord shall have substantially
      completed Landlord’s Work in substantial accordance with the Scope of Landlord’s
      Work and the Construction Plans, subject to the Punchlist and (ii) exclusive
      and
      vacant possession of the Improvements is delivered to Tenant (subject to the
      presence of Landlord’s contractors and subcontractors completing the Punchlist).

    

    SECTION
      1.2  TERMS
      GENERALLY.
      All
      accounting terms not specifically defined herein shall be construed in
      accordance with GAAP. The definitions in Section
      1.1
      shall
      apply equally to both the singular and plural forms of the terms defined.
      Whenever the context may require, any pronoun shall include the corresponding
      masculine, feminine and neuter forms. All references to Articles, Sections
      and
      Exhibits shall be deemed references to Articles and Sections of, and Exhibits
      to, this Lease unless the context shall otherwise require.

    

    SECTION
      1.3  ATTACHMENTS.
      All of
      the attachments to this Lease and all drawings and documents referenced in
      the
      Lease, or in the exhibits or schedules to the Lease, shall be deemed to be
      a
      part hereof for all purposes.

    

    II.

    

    SECTION
      2.1  AGREEMENT.
      This
      Lease shall be effective on the date hereof as a valid and binding agreement
      between Landlord and Tenant.

    

    SECTION
      2.2  DEMISE.
      Landlord
      hereby leases, rents and demises to Tenant, and Tenant hereby leases, rents,
      demises and accepts from Landlord, the Premises on the terms and conditions
      contained herein.

    

    III.

    

    SECTION
      3.1  INITIAL
      TERM; SCHEDULE FOR COMPLETION OF LANDLORD’S WORK; LIQUIDATED
      DAMAGES.

    

    (a)   The
      Term
      of the Lease shall commence on the date hereof and shall terminate on the Lease
      Termination Date, without the necessity of any notice from either Landlord
      or
      Tenant; provided,
      however,
      Landlord shall provide Tenant with thirty (30) days prior notice of the date
      Landlord anticipates completing Landlord’s Work to the Premises. 

    

    (b)   Subject
      only to delays caused by (i) Construction Force Majeure and (ii) Tenant Delays,
      Landlord shall cause the Turnover Date to occur on or before October 15,
      2006 (the
      “Scheduled Turnover Date”). If the Turnover Date occurs after the Scheduled
      Turnover Date solely because of Tenant Delays, then the Rent Commencement Date
      shall commence on the date it would have occurred but for the Tenant Delays.
      

    
      
        
        

      

      
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    (c)   LIQUIDATED
      DAMAGES. IF LANDLORD FAILS TO COMPLETE LANDLORD’S WORK BY THE SCHEDULED TURNOVER
      DATE (SUBJECT TO EXTENSION FOR CONSTRUCTION FORCE MAJEURE), LANDLORD SHALL
      PAY
      TO TENANT, AS LIQUIDATED DAMAGES, THE LIQUIDATED AMOUNT (HEREINAFTER DEFINED).
      IT IS HEREBY AGREED THAT THE LIQUIDATED AMOUNT CONSTITUTES LIQUIDATED DAMAGES
      TO
      WHICH TENANT IS ENTITLED HEREUNDER AND IS A REASONABLE FORECAST OF JUST
      COMPENSATION FOR THE HARM THAT WOULD BE CAUSED BY LANDLORD'S FAILURE TO COMPLETE
      LANDLORD’S WORK BY THE SCHEDULED TURNOVER DATE. IT IS AGREED THAT THE HARM THAT
      WOULD BE CAUSED BY SUCH FAILURE, WHICH INCLUDES, WITHOUT LIMITATION, LOAN
      CARRYING COSTS, LOSS OF EXPECTED USE OF THE PROJECT AREAS, PROVISION OF
      ALTERNATE STORAGE FACILITIES AND RESCHEDULING OF MOVING AND OCCUPANCY DATES,
      IS
      ONE THAT IS INCAPABLE OR VERY DIFFICULT OF ACTUAL ESTIMATION. 

    

    The
      “Liquidated Amount” is an amount equal to the sum of (x) $2,000 multiplied by
      the number of days between the Scheduled Turnover Date and the actual Turnover
      Date, plus
      (y)
      $2,000 multiplied by the number of days (if any) between the date ninety (90)
      days after the Scheduled Turnover Date and the actual Turnover Date.
      Notwithstanding anything to the contrary contained in this Lease, in no event
      shall Tenant be entitled to the Liquidated Amount attributable to delays caused
      by Tenant Delay, or Construction Force Majeure. Tenant shall be entitled to
      deduct such credit, if any, against the first and (to the extent necessary)
      subsequent installments of Annual Basic Rental due pursuant to the terms of
      this
      Lease but in no event shall Tenant be entitled to deduct more than 25% of any
      installment of Rental due hereunder; provided, however, if Tenant exercises
      its
      right to terminate the Lease as provided below, then Landlord shall pay Tenant
      the Liquidated Amount in full within thirty (30) days following such
      termination. If the actual Turnover Date has not occurred by the date one
      hundred twenty (120) days after the Scheduled Turnover Date (as extended by
      Construction Force Majeure or Tenant Delay), then Tenant, in addition to its
      right to the Liquidated Amount, shall be entitled to terminate this Lease and
      upon any such termination, neither party shall have any further liability or
      obligation to the other party (other than Landlord’s obligation to pay the
      Liquidated Amount as provided above). 

    

    (d)   Except
      as
      expressly set forth in this Section
      3.1,
      Tenant
      acknowledges and agrees that Landlord shall have no liability with respect
      to
      the failure to complete Landlord’s Work within a particular time period and
      Tenant, to the maximum extent permitted by applicable law, hereby WAIVES,
      DISCHARGES, AND RELEASES Landlord from any and all liability related to the
      failure of Landlord to complete the Landlord’s Work within a particular time
      period, whether arising in tort, contract or otherwise and Tenant acknowledges
      and agrees that the foregoing waiver is a material part of the consideration
      for
      Landlord agreeing to the transactions contemplated by this Lease. Tenant agrees
      that its rights under this Section
      3.1
      to
      receive the Liquidated Amount and to terminate the Lease under the circumstances
      set forth in this Section
      3.1
      are the
      sole and exclusive remedies available to Tenant with respect to the failure
      of
      Landlord to complete the Landlord’s Work within a particular time period or at
      all.

    
      
        
        

      

      
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              Tenant’s
                Initials

            	 	
              Landlord’s
                Initials

            

    

    

    SECTION
      3.2   HOLDING
      OVER.
      (a) If
      Tenant shall be in possession of the Premises after the Lease Termination Date,
      in the absence of any additional agreement extending the Term hereof, the
      tenancy under this Lease shall become a lease from month to month, terminable
      by
      either party upon thirty (30) days prior written notice. Such tenancy shall
      be
      subject to all other conditions, provisions and obligations of this Lease,
      except that the Annual Basic Rental shall be 125% of the amount paid during
      the
      previous Rental Year or the Rental Year during which the Lease Termination
      Date
      occurred, as applicable.

    

    (b)   Notwithstanding
      the terms of Section
      3.2(a)
      above,
      Tenant hereby agrees that if it fails to surrender the Premises on or before
      the
      date ninety (90) days after the Lease Termination Date, Tenant will be liable
      for any and all actual damages which Landlord shall suffer proximately by reason
      thereof, and Tenant will indemnify and hold Landlord harmless against any and
      all claims and demands made by any succeeding tenants or other parties against
      Landlord resulting from any delay by Landlord in delivering possession of the
      Premises to a tenant or other party proximately caused by Tenant’s holding over
      beyond the date ninety (90) days after the Lease Termination Date.

    

    SECTION
      3.3  EXTENSION
      OF TERM.
      Tenant
      may extend the Term of this Lease (as to all but not a part of the Premises)
      beyond the Initial Termination Date for Option Term One by giving written notice
      to Landlord of such extension not less than twelve (12) months
      prior to the Initial Termination Date. Tenant may extend this Lease for Option
      Term Two by giving written notice to Landlord of such extension not less than
      twelve (12) months prior to the expiration of Option Term One; provided,
      however,
      that
      Tenant may only extend the Term for Option Term Two if Tenant exercised its
      rights to extend the Term for Option Term One. Upon delivery to Landlord of
      Tenant’s notice to extend this Lease, the stated expiration date of this Lease
      shall thereupon be changed to the last day of the applicable Option Term. In
      the
      event Tenant timely exercises its option to extend this Lease for an Option
      Term, then this Lease shall remain in full force and effect during the
      applicable Option Term and shall govern the rights and responsibilities of
      the
      parties hereto during such Option Term. The terms of the lease of the Premises
      during any Option Term shall be as set forth herein and the Annual Basic Rental
      payable for any Option Term shall be the amount set forth herein for such Option
      Term. Notwithstanding anything contained herein to the contrary, Tenant shall
      only have the right to extend the Term for any Option Term if at the time of
      such election no Event of Default exists for which Tenant has received written
      notice from Landlord. 

    

    IV.

    

    SECTION
      4.1  USE.
      The
      Premises shall be used for Permitted Uses and for no other purpose or use,
      without Landlord’s consent, which consent shall not be unreasonably withheld,
      conditioned, or delayed.

    
      
        
        

      

      
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    SECTION
      4.2   CESSATION
      OF TENANT OPERATIONS.
      Subject
      to Section
      4.1,
      Tenant
      shall have no obligation to operate its or any business from the Premises and
      shall have the right at any time and from time to time to cease operating its
      or
      any business at the Premises; provided,
      however,
      that
      during the time that Tenant, or its permitted subtenants or assigns, is not
      conducting its or their operations at the Premises, Tenant agrees, at its sole
      cost and expense, to (i) add such additional security at the Premises as is
      reasonably required by Landlord to insure the safety of the Premises and to
      prevent vandalism, mischief and general mayhem and (ii) inform all applicable
      insurance carriers providing insurance covering the Premises of Tenant’s
      discontinued use and pay the increased cost of any such insurance caused by
      such
      vacancy. Tenant acknowledges and agrees that its right to cease operating its
      business at the Premises shall in no way discharge Tenant from its obligations
      hereunder, including its obligation to pay Rental and its maintenance
      obligations set forth in Article IX.

    

    V.

    

    SECTION
      5.1   RENT
      COMMENCEMENT DATE.
      Within
      thirty (30) days of the Turnover Date and if requested by Landlord or Tenant,
      Landlord and Tenant each hereby agrees to execute an amendment to this Lease
      setting forth the actual date on which the Turnover Date and the Rent
      Commencement Date occurs. 

    

    SECTION
      5.2   RENTALS
      PAYABLE.

    

    (a)   Tenant
      covenants and agrees to pay to Landlord as Rental for the Premises, the
      following:

    

    (i)   The
      Annual Basic Rental specified in Section
      1.1.2
      for the
      applicable Rental Year, commencing on the Rent Commencement Date;
      plus

    

    (ii)   all
      Additional Rental due from time to time hereunder.

    

    (b)   Tenant
      hereby covenants and agrees with Landlord that the obligation to pay the Rental
      described herein is an independent covenant and shall be due and payable by
      Tenant to Landlord notwithstanding any default by Landlord of its obligations
      hereunder.

    

    SECTION
      5.3   ANNUAL
      BASIC RENTAL.
      Annual
      Basic Rental shall be payable without prior demand in equal monthly installments
      in advance commencing on the Rent Commencement Date and thereafter on the first
      day of each full calendar month during the Term of this Lease. If the Rent
      Commencement Date or the Lease Termination Date occurs on a date other than
      on
      the first or the last day of a calendar month, as applicable, then the first
      and
      last monthly installment of Annual Basic Rental shall be prorated for such
      fractional calendar month based upon the actual number of days in such
      month.

    
      
        
        

      

      
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    SECTION
      5.4   PAYMENT
      OF RENTAL.
      Tenant
      shall pay all Rental when due and payable, without any offset, counterclaim,
      deduction or prior demand therefor whatsoever, except as expressly provided
      for
      in this Lease. All Rental and other sums due hereunder shall be paid in U.S.
      currency. If Tenant shall fail to pay any Rental on or before the later of
      (i)
      the date such payment is due or (ii) five (5) days after Landlord has provided
      Tenant with written notice of its failure to timely pay rent (provided that
      Landlord shall not be obligated to provide more than two (2) such notices in
      any
      calendar year), then Tenant shall be obligated to pay a late payment charge
      (a
“Late Fee”) equal to the greater of (i) $1,000 or (ii) five percent (5%) of such
      Rental payment that is past due.  In
      addition, any Rental which is not paid by the date that is ten (10) days after
      the date such payment is due shall bear interest at the Default Rate from the
      first day due until paid. Any Additional Rental which shall become due shall
      be
      payable, unless otherwise expressly provided herein, shall be paid with the
      next
      monthly installment of Annual Basic Rental. Rental and statements required
      of
      Tenant shall be paid and delivered to Landlord at its notice address set out
      in
Section
      17.1
      or at
      such other place as Landlord may, from time to time, designate in a notice
      to
      Tenant. No such change of the place of payment of Rental shall be effective
      until thirty (30) days from the date of notice thereof to Tenant. Any payment
      by
      Tenant or acceptance by Landlord of a check for a lesser amount than shall
      be
      due from Tenant to Landlord shall be treated as a payment on account. The
      acceptance by Landlord of a check or other form of payment for an amount less
      than the amount then due and payable, even if accompanied by a statement from
      Tenant that the lesser amount is the entire amount due, and acceptance of such
      lesser amount shall not constitute Landlord’s acceptance and agreement that such
      lesser amount is payment in full, shall not be deemed a waiver of Landlord’s
      rights to collect the amounts not tendered and any such Tenant statements shall
      be given no effect, and Landlord may accept such payment without prejudice
      to
      any other rights or remedies which Landlord may have against
      Tenant.

    

    VI.

    

    SECTION
      6.1   PAYMENT
      BY TENANT.
      Subject
      to the provisions of Section
      6.2,
      in
      addition to the Annual Basic Rental, Tenant shall pay prior to the due date
      therefor, all ad valorem taxes and assessments, general and special, all
      personal property taxes, all water taxes and all other impositions, ordinary
      and
      extraordinary of every kind and nature whatsoever relating to the Property,
      the
      Premises or Tenant’s property located thereon or used in connection therewith,
      including, but not limited to, maintenance assessments and other charges imposed
      pursuant to the Permitted Encumbrances, which, during the Term of this Lease,
      may be levied or assessed against the Premises; provided,
      however,
      Tenant
      shall not be responsible for any Taxes that are levied against the Premises
      but
      are accrued with respect to the Premises for any period of time outside of
      the
      Term of this Lease. Landlord agrees to deliver copies of statements for all
      of
      the foregoing to Tenant on the later to occur of (i) sixty (60) days prior
      to
      the due date thereof and (ii) fifteen (15) days from the date Landlord receives
      such statements from the applicable tax authorities. Tenant agrees to pay
      directly to the applicable tax authority all such taxes and assessments on
      or
      before the date the same are due and to deliver to Landlord a copy of the
      transmittal letter and check within ten (10) days from the date Tenant makes
      such payments to the applicable tax authorities. Tenant shall furnish to
      Landlord a copy of the taxing authority’s receipt evidencing payment within
      thirty (30) days after the date Tenant receives such receipt. Tenant also agrees
      to pay all other Taxes to the parties entitled to payment prior to delinquency.
      Tenant shall be responsible for all delinquencies and penalties if the same
      are
      incurred because Tenant did not remit payment to the appropriate tax authorities
      in a timely manner after its receipt of the statement therefor or because the
      amount Tenant remitted to the tax authorities was insufficient to pay all Taxes.
      Tenant shall also be solely responsible for and pay prior to delinquency all
      taxes imposed on its inventory, trade fixtures, apparatus, leasehold
      improvements (installed by or on behalf of Tenant), equipment and other personal
      property. All taxes, assessments and other costs to be paid by Tenant pursuant
      to this Section
      6.1
      are
      collectively referred to herein as the “Taxes”; provided that “Taxes” shall in
      no event include (i) any federal, state, or other tax on the income of Landlord
      or (ii) any franchise, estate, inheritance or similar tax imposed upon Landlord.
      To the extent Tenant fails to pay any of the Taxes when required pursuant to
      the
      terms hereof, Landlord shall have the right to do so and upon Landlord’s payment
      thereof the same shall become Additional Rental hereunder payable by Tenant
      on
      demand by Landlord.

    
      
        
        

      

      
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    SECTION
      6.2   PRORATION
      OF TAXES.
      During
      the first and last years of the Term, all such taxes and assessments which
      shall
      become payable during each of the calendar or fiscal, tax or assessment years,
      as applicable, shall be ratably adjusted on a per diem basis between Landlord
      and Tenant in accordance with the respective portions of such calendar, fiscal,
      tax or assessment year. To the extent permitted by applicable law, Tenant may
      pay any such assessments or taxes in annual installments. In the event any
      such
      assessment shall be payable in a lump sum or on an installment basis, Tenant
      shall have the sole right to elect the basis of payment. If Tenant shall elect
      to pay any such assessment on the installment basis, then Tenant shall pay
      only
      those installments which shall become due and payable during the Term. Any
      such
      installments due and payable in the years in which this Lease commences and
      terminates shall be prorated proportionally.

    

    SECTION
      6.3   TAXES
      ON RENTAL.
      In
      addition to the Taxes payable by Tenant pursuant to Section
      6.1
      above,
      Tenant shall pay to the appropriate agency any and all sales, excise and other
      taxes (not including, however, Landlord’s income taxes) levied, imposed or
      assessed by the State of or any political subdivision thereof or other taxing
      authority upon any Rental payable hereunder, except to the extent the same
      are
      in substitution for income taxes.

    

    SECTION
      6.4   TENANT’S
      RIGHT TO CONTEST TAXES.
      If
      Tenant is not in default hereunder (after all applicable notice and cure
      periods), Tenant shall have the right to initiate all negotiations of tax
      assessments. Tenant shall have the right to contest the validity or the amount
      of any tax or assessment levied against the Premises by such appellate or other
      proceedings as may be appropriate in the jurisdiction, and may defer payment
      of
      such obligations, pay same under protest, or take such other steps as Tenant
      may
      deem appropriate; provided,
      however,
      that
      Tenant hereby agrees to (i) indemnify and hold Landlord harmless from and
      against any cost, expense or liability arising out of such contest, (ii) pursue
      any such contest in good faith and (iii) post any bond or other security
      required by applicable law in connection with such contest. Tenant also agrees
      to notify Landlord promptly of any such contest and Landlord agrees, at the
      sole
      cost of Tenant, to cooperate in any such contest or proceedings and execute
      any
      documents which Landlord may be required to execute in connection with such
      proceedings. Tenant shall be entitled to all refunds paid by taxing authorities
      resulting from any such contest or otherwise paid to Landlord during or
      attributable to the Term.

    
      
        
        

      

      
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    VII.

    

    SECTION
      7.1   CONSTRUCTION
      BY LANDLORD.

    

    (a)   The
      work
      to be completed by Landlord is described on the Scope of Landlord’s Work (the
“Landlord’s Work”). All such work shall be performed in a good and workmanlike
      manner and in accordance with all governmental permits required and/or issued
      therefor. Until the Turnover Date, Landlord shall bear the risk of loss with
      respect to the Improvements. The Landlord’s Work shall be performed
      substantially in accordance with the plans and specifications derived from
      the
      Scope of Landlord’s Work (the “Construction Plans”). In the event of any
      conflict between the Construction Plans and the Scope of Landlord’s Work, the
      Scope of Landlord’s Work shall control. Landlord shall perform all of the
      Landlord’s Work at its sole cost and expense, except for Tenant
      Changes.

    

    (b)   All
      Tenant Changes shall be evidenced by a written change order executed by each
      of
      Landlord and Tenant’s authorized employee or representative, in each case as
      designated in writing by Tenant. Tenant Changes shall be subject to Landlord’s
      prior approval, not to be unreasonably withheld, conditioned or delayed. Within
      five (5) business days of a request for a Tenant Change, Landlord shall provide
      to Tenant a written detailed estimate of the increase (or decrease) in the
      cost
      of the Landlord’s Work resulting therefrom, and any delays in the Scheduled
      Turnover Date resulting therefrom. The cost of a Tenant Change shall be the
      sum
      of (i) the actual direct cost of the contractor and/or the subcontractor
      performing the Tenant Change, plus (ii) an overhead and fee markup of 10% of
      the
      direct cost of the contractor and/or subcontractor performing the Tenant Change
      plus (iii) a development fee imposed by Landlord, which shall not exceed 3%
      of
      the actual direct cost of such Tenant Change, plus (iv) the actual cost of
      any
      design fees for such Tenant Change. The detailed estimate shall include an
      estimate of all of the foregoing. Tenant shall thereafter have a period of
      five
      (5) days from receipt of such written notice to advise Landlord, in writing,
      whether it desires to proceed with such Tenant Change. 

    

    (c)   If
      Tenant
      elects to proceed with such Tenant Change, then Tenant shall pay to Landlord
      the
      amount of the increase in the cost of the Landlord’s Work resulting from such
      Tenant Change within five (5) business days of the day that Tenant receives
      a
      detailed invoice from Landlord for the work covered by the Change Order,
      provided there are no more tenant improvement allowances remaining in which
      case
      the allowances shall first be applied until fully exhausted. Failure by Tenant
      to pay for a Tenant Change beyond the date due shall constitute a Tenant Delay.
      If Tenant elects to proceed with any such Tenant Change and the cost to Landlord
      of the Landlord’s Work is decreased, then Landlord shall pay to Tenant (within
      five (5) days of the Turnover Date) the amount of the decrease in the cost
      resulting from such Tenant Change. 

    

    (d)   Tenant’s
      use of the Premises may require certain governmental approvals and permits.
      Tenant acknowledges and agrees that except for all permits required to construct
      the Improvements, Tenant is responsible for obtaining all the permits and
      approvals necessary for it to conduct the Permitted Use (collectively, the
      “Permits”). A failure by Tenant to obtain the Permits shall not delay or extend
      either the Turnover Date or the Rent Commencement Date.

    
      
        
        

      

      
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    SECTION
      7.2  EFFECT
      OF TAKING POSSESSION OF PREMISES ON TURNOVER DATE.

    

    (a)   By
      taking
      possession of the Premises on the Turnover Date, Tenant shall be deemed to
      have
      accepted the Premises and agreed that the obligations of Landlord to
      substantially complete the Landlord’s Work have been fully performed, except for
      (i) Punchlist items of which Tenant notifies Landlord in writing within ten
      (10)
      business days of the Turnover Date and (ii) the warranty set forth in
Section
      7.2(b).
      If
      Landlord fails to complete the Punchlist items within forty-five (45) days
      of
      the Turnover Date, then Tenant shall be entitled to abate its Rent obligations
      by an amount equal to 115% of the reasonably estimated cost of incomplete
      Punchlist items as of such date and upon any such abatement, Landlord shall
      be
      relieved of its obligation to complete the Punchlist and shall have no further
      obligation or liability for the Punchlist. Except as expressly set forth in
      Section
      7.2(b)
      below
      and notwithstanding any contrary provision contained herein (including any
      indemnity by Landlord), Tenant acknowledges and agrees that Landlord shall
      have
      no liability with respect to the Landlord’s Work or the condition thereof and
      Tenant, to the maximum extent permitted by applicable law, hereby WAIVES,
      DISCHARGES, AND RELEASES Landlord from any and all liability related to the
      Improvements, whether arising in tort, contract or otherwise.

    

    (b)   For
      the
      period beginning on the Turnover Date and ending on the date 12 months after
      the
      Turnover Date (the “Warranty Period”), Landlord warrants to Tenant that the
      materials and equipment furnished by Landlord and Landlord’s Contractor shall be
      of good quality and new unless otherwise required or permitted by Tenant, and
      that the Landlord’s Work shall be free from defects, comply with all applicable
      laws as of the Turnover Date, and will conform to the requirements hereunder.
      Landlord agrees to repair or replace any and all defects in the Improvements
      at
      Landlord’s sole cost and expense. Landlord shall have no obligation to repair or
      replace any damage to the Improvements resulting from the negligence of Tenant,
      its employees and contractors, or from Tenant’s failure to comply with the
      guidelines and manuals furnished to Tenant regarding the maintenance, use and
      operation of the Improvements. Landlord’s obligation under this Section
      7.2(b)
      shall
      terminate upon the expiration of the Warranty Period as to defects not
      specifically identified in writing to Landlord prior to the expiration of the
      Warranty Period. The warranty provided herein shall be assignable at no expense
      or fee to any permitted sublessee or to any permitted assignee of Tenant under
      this Lease. Landlord shall procure for Tenant and shall assign to Tenant
      (without recourse to Landlord) a five year manufacturer’s warranty (beginning no
      earlier than the Turnover Date) on the HVAC condensers and compressors.

    

    SECTION
      7.3   MECHANICS’
      LIENS.
      No work
      performed by Tenant pursuant to this Lease, whether in the nature of erection,
      construction, alteration or repair, shall be deemed to be for the immediate
      use
      and benefit of Landlord so that no mechanics’ or other lien shall be allowed
      against the estate of Landlord by reason of any consent given by Landlord to
      Tenant to improve the Premises. Tenant shall pay promptly all persons furnishing
      labor or materials with respect to any work performed by Tenant or its
      contractors on or about the Premises. In the event any mechanics’ or other lien
      shall at any time be filed against the Premises by reason of work, labor,
      services or materials performed or furnished, or alleged to have been performed
      or furnished, to Tenant or to anyone holding the Premises through or under
      Tenant, Tenant shall forthwith cause the same to be discharged of record or
      bonded to the satisfaction of Landlord. If Tenant shall fail to cause such
      lien
      forthwith to be so discharged or bonded after being notified of the filing
      thereof, then, in addition to any other right or remedy of Landlord, Landlord
      may bond or discharge the same by paying the amount claimed to be due, and
      the
      amount so paid by Landlord including reasonable attorneys’ fees incurred by
      Landlord either defending against such lien or in procuring the discharge of
      such lien, together with interest thereon at the Default Rate, shall be due
      and
      payable by Tenant to Landlord as Additional Rental.

    
      
        
        

      

      
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    SECTION
      7.4   TENANT’S
      TRADE FIXTURES.
      All
      trade fixtures, signs, equipment and apparatus (as distinguished from leasehold
      improvements) owned by Tenant (the “Tenant Fixtures”) and installed in the
      Premises by Tenant, at its expense, shall remain the property of Tenant and
      Tenant may remove such fixtures and apparatus at any time prior to the
      expiration of the Term. Notwithstanding the foregoing, Tenant shall repair
      any
      damage to the Premises caused by the removal of its personalty, inventory,
      trade
      fixtures, equipment and apparatus. All Tenant Fixtures remaining in the Premises
      after the expiration of the Term shall become the property of Landlord and
      Landlord may keep or dispose of such Tenant Fixtures. Notwithstanding anything
      to the contrary in this Lease, in no event shall Landlord have any lien (whether
      consensual, or by statute) on any of Tenant’s Trade Fixtures, personal property,
      or any other property owned by Tenant whatsoever. Any language to the contrary
      in the Lease is hereby deemed deleted.

    

    VIII.

    

    SECTION
      8.1   OPERATIONS
      BY TENANT.
      Following the Turnover Date, and in addition to the requirements of Section
      9.1
      below,
      Tenant will at its expense: 

    

    (a)   keep
      the
      inside and outside of all glass in the doors and windows of the Premises
      clean;

    

    (b)   keep
      all
      exterior building surfaces of the Premises reasonably clean;

    

    (c)   replace
      promptly any cracked or broken glass of the Premises with glass of like grade
      and quality;

    

    (d)   maintain
      the Premises in a reasonably clean, orderly and sanitary condition and free
      of
      insects, rodents, vermin and other pests, including cleaning, repairing or
      replacing all floor covering, if any, within the Premises and sweeping the
      parking lot and drives located on the Property;

    

    (e)   keep
      any
      garbage, trash, rubbish or other refuse in containers, including exterior
      dumpsters, within the Premises until removed;

    

    (f)   have
      such
      garbage, trash, rubbish and refuse removed on a timely basis from such
      containers;

    

    (g)   maintain
      all landscaping and irrigation in a neat and orderly condition and replace
      shrubs and other landscaping as necessary; and

    
      
        
        

      

      
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    (h)   comply
      with all laws, ordinances, rules and regulations of governmental authorities
      applicable to the Premises and/or relating to the use and/or occupancy of the
      Premises and all reasonable recommendations of any fire and liability insurance
      rating organization now or hereafter in effect.

    

    TENANT
      ACKNOWLEDGES THAT LANDLORD DOES NOT PROVIDE AND HAS NO RESPONSIBILITY FOR
      SECURITY OF THE PREMISES OR FOR THE CUSTOMERS, INVITEES, PATRONS OR GUESTS
      OF
      TENANT. LANDLORD SHALL IN NO EVENT BE LIABLE TO TENANT OR ANY OTHER PARTY FOR
      ANY DAMAGES OR LOSS RESULTING FROM THE CRIMINAL ACTS OF THIRD
      PARTIES.

    

    SECTION
      8.2   SIGNS
      AND ADVERTISING.
      Tenant
      will, at its sole cost and expense, maintain all signs and other advertising
      devices in good condition and repair at all times. Tenant agrees that all signs
      and other advertising on the exterior of the Premises shall be in compliance
      with the Permitted Encumbrances and all applicable laws, rules and regulations
      (including all zoning laws).

    

    SECTION
      8.3   RESTRICTIONS.
      The use
      and occupancy of the Premises are subject to the terms and conditions of the
      Permitted Encumbrances. Tenant, by its execution of this Lease, acknowledges
      receipt of a copy of each of the Permitted Encumbrances and agrees that it
      has
      reviewed the Permitted Encumbrances and shall perform all of the obligations
      of
      Landlord thereunder during the Term, including the payment of any assessments
      levied pursuant to any of the Permitted Encumbrances. Landlord makes no
      representation or warranty, express or implied, as to the Permitted
      Encumbrances.

    

    IX.

    

    SECTION
      9.1   MAINTENANCE
      AND REPAIRS.

    

    (a)   The
      provisions of this Article IX are subject to the provisions of Article XII
      and
      Article XIII hereof. At all times during the Term of this Lease after the
      Turnover Date, Tenant shall, at its sole cost and expense, keep and maintain
      the
      Premises in as good a condition and state of repair as exists on the Turnover
      Date, ordinary wear and tear excepted. From and after the Turnover Date, (i)
      Tenant shall make any and all additions to and all alterations and repairs
      in,
      on and about the Premises which may be required by, and shall otherwise observe
      and comply with, all public laws, ordinances and regulations from time to time
      applicable to the Premises and (ii) Tenant will (a) keep the interior and
      exterior of the Premises (including paving, parking areas, and landscaping),
      together with all electrical, plumbing, heating, ventilating, air-conditioning,
      fire pump, exterior storm drain systems, irrigation systems and other mechanical
      systems and installations therein, in good order and repair including normal
      and
      customary preventive maintenance and
      will
      make all replacements from time to time required in as good a condition as
      exists on the Turnover Date, ordinary wear and tear excepted.
      Landlord shall
      be
      responsible at Landlord’s sole cost and expense throughout the Term of this
      Lease for the repair, maintenance, and replacement of the roof, load bearing
      walls, foundation, and other structural elements of the building. Except as
      set
      forth in the preceding sentence, Landlord shall have no obligation whatsoever
      arising under this Lease with respect to the repair and/or maintenance of the
      Premises. Within a commercially reasonable period in light of the nature of
      the
      repair and/or replacement, Landlord shall satisfy its obligations hereunder.
      Unless Tenant has engaged Landlord or an affiliate of Landlord to provide
      property management services, then no management fees or personnel service
      charges may be charged by Landlord for property management. Tenant shall take
      no
      action to invalidate any warranty relating to the roof or any other portion
      of
      the Improvements.

    
      
        
        

      

      
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    (b)   Except
      for ordinary wear and tear, Tenant will surrender the Premises at the expiration
      of the Term or at such other time as it may vacate the Premises in as good
      condition as existed on the Turnover Date. Any damage or injury sustained by
      any
      person because of Tenant’s failure to comply with the terms of this Section
      9.1
      shall be
      paid for by Tenant, and Tenant shall indemnify and hold Landlord harmless from
      and against all claims, actions, damages and liability in connection therewith,
      including, but not limited to reasonable attorneys’ and other professional fees
      actually incurred, and any other cost which Landlord might reasonably incur.
      Landlord shall not be required to furnish any services or facilities or to
      make
      any repairs or alterations of any kind in or on the Premises unless expressly
      required under this Lease.

    

    (c)   Notwithstanding
      any provision set forth in the Lease to the contrary, if Tenant provides written
      notice (or oral notice in the event of an emergency such as damage or
      destruction to or of one or more of the structural elements of the building
      structure or roof (the “Building Structure”) to Landlord of an event or
      circumstance which requires the action of Landlord with respect to repair and/or
      maintenance, and Landlord fails to provide such action within twenty-one (21)
      days after receipt of such notice (or such longer time as is reasonably
      necessary in light of the magnitude of the repair and/or replacement), then
      Tenant may proceed to take the required action upon delivery of an additional
      ten (10) business days' notice to Landlord specifying that Tenant is taking
      such
      required action (provided, however, that neither of such notices shall be
      required in the event of an emergency which threatens life or where there is
      imminent danger of damage to property), and if such action was required under
      the terms of the Lease to be taken by Landlord and was not taken by Landlord
      within such ten (10) day period, then Tenant shall be entitled to prompt
      reimbursement by Landlord of Tenant's reasonable costs and expenses in taking
      such action plus interest thereon at a rate per annum equal to the Prime Rate
      plus 3%. In the event Tenant takes such action, and such work will affect the
      Building Structure, Tenant shall use only those contractors used by Landlord
      in
      the Building for work on such Building Structure unless such contractors are
      unwilling or unable to perform, or timely and competitively perform, such work,
      in which event Tenant may utilize the services of any other qualified contractor
      which normally and regularly performs similar work in comparable buildings.
      Any
      such work performed by Tenant shall be performed in a good and workmanlike
      manner, in accordance with all applicable laws and Tenant shall indemnify and
      hold Landlord harmless from and against any and all claims, liabilities or
      losses (e.g., personal injury claims) incurred by Landlord in connection with
      such repairs and/or replacements performed by Tenant or Tenant’s agents or
      contractors. Furthermore, if Landlord does not deliver a detailed written
      objection to Tenant within thirty (30) days after receipt of an invoice by
      Tenant of its costs of taking action which Tenant claims should have been taken
      by Landlord, and if such invoice from Tenant sets forth a reasonably
      particularized breakdown of its costs and expenses in connection with taking
      such action on behalf of Landlord, then Tenant shall be entitled to deduct
      from
      Rent payable by Tenant under the Lease, the amount set forth in such invoice;
      provided,
      however,
      that in
      no event shall Tenant have the right to offset more than 25% of any installment
      of Rent due hereunder. If, however, Landlord delivers to Tenant, within thirty
      (30) days after receipt of Tenant's invoice, a written objection to the payment
      of such invoice, setting forth with reasonable particularity Landlord's reasons
      for its claim that such action did not have to be taken by Landlord pursuant
      to
      the terms of the Lease or that the charges are excessive (in which case Landlord
      shall pay the amount it contends would not have been excessive), then Tenant
      shall not then be entitled to such deduction from Rent, but as Tenant's sole
      remedy, Tenant may proceed with a claim against Landlord for such amount or,
      if
      elected by either Landlord or Tenant, the matter shall proceed to resolution
      by
      the selection of an arbitrator to resolve the dispute, which arbitrator shall
      be
      selected and qualified pursuant to the procedures set forth in the Lease, and
      whose costs shall be paid for by the losing party, unless it is not clear that
      there is a “losing party,” in which event the costs of arbitration shall be
      shared equally. If Tenant prevails in the arbitration, the amount of the award
      (which shall include interest per annum at the Prime Rate plus 3% from the
      time
      of each expenditure by Tenant until the date Tenant receives such amount by
      payment or offset and attorneys' fees and related costs) may be deducted by
      Tenant from the rents next due and owing under the Lease; provided,
      however,
      that in
      no event shall Tenant have the right to offset more than 25% of any installment
      of Rent due hereunder. 

    
      
        
        

      

      
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    SECTION
      9.2   ALTERATIONS.
      Other
      than carrying out Tenant’s obligations of maintenance and repair as described in
Section
      9.1
      above,
      Tenant will not make any alterations, renovations, improvements or other
      installations (collectively, “Alterations”) in, on or to the Premises or any
      part thereof without the prior written consent of Landlord; provided, however,
      Tenant may make Alterations to the Premises that do not affect the structural
      integrity of the Building or the roof and which do not exceed $25,000 in the
      aggregate without Landlord’s consent. If Landlord’s consent is required,
      Landlord agrees not to unreasonably withhold, condition or delay its consent
      to
      any such alteration, unless the alteration could, over time, reasonably be
      expected to affect the structural integrity or the mechanical, electrical or
      plumbing systems serving the Premises (including, without limitation, any
      alterations of the building, structural alterations, or any cutting or drilling
      into any part of the Premises or any securing of any fixture, apparatus, or
      equipment of any kind to any part of the Premises), in which event, Landlord
      shall have the right to withhold its approval for any reason in its sole
      discretion.

    

    X.

    

    SECTION
      10.1   WATER,
      ELECTRICITY, TELEPHONE, AND SANITARY SEWER WITH RESPECT TO THE
      PREMISES.
      Subject
      to the terms of Section
      7.1(a),
      Landlord will provide utility connections for connection to the public utility
      facilities necessary to enable Tenant to obtain water, electricity and sanitary
      sewer service for the Premises. Tenant shall not at any time overburden or
      exceed the capacity of the mains, feeders, ducts, conduits or other facilities
      by which such utilities are supplied to, distributed in or serve the Premises.
      Subject to obtaining Landlord’s prior written approval (which shall not be
      unreasonably withheld, conditioned or delayed), Tenant may, at its expense,
      install any additional utility facilities. Landlord shall be responsible for
      providing meters or other devices for the measurement of utilities supplied
      to
      the Premises only to the extent set forth in the Landlord’s Scope of Work.
      Tenant shall be solely responsible for and promptly pay, as and when the same
      became due and payable, all charges for water, sewer, electricity, telephone
      and
      any other utility used or consumed in the Premises during the Term.

    
      
        
        

      

      
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    XI.

    

    SECTION
      11.1   INDEMNITIES.
      Tenant
      shall indemnify, hold harmless and defend Landlord from and against any and
      all
      claims, actions, damages, liability and expense, including, but not limited
      to,
      reasonable attorneys’ and other professional fees actually incurred, in
      connection with loss of life, personal injury and/or damage to property arising
      from or out of the negligence or willful misconduct of Tenant, its agents,
      employees or invitees (other than claims or liabilities that result from
      Landlord’s negligence or willful misconduct). Subject to the provisions of
Section
      7.2(a),
      Landlord shall indemnify, hold harmless and defend Tenant from and against
      any
      and all claims, actions, damages, liability and expense, including, but not
      limited to, reasonable attorneys’ and other professional fees actually incurred,
      in connection with loss of life, personal injury and/or damage to property
      arising from or out of the negligence or willful misconduct of Landlord, its
      agents or employees (other than claims or liabilities that result from Tenant’s
      negligence or willful misconduct). The provisions of this paragraph are subject
      to the provisions of Article XII and Article XIII of this Lease and shall
      survive the expiration or earlier termination of the Lease.

    

    SECTION
      11.2   INSURANCE.

    

    (a)   Landlord
      shall procure and maintain continuously throughout the Term, at Tenant’s sole
      cost and expense:

    

    (i)    insurance
      on the Property and Improvements against loss or damage by fire or other
      casualty with endorsements providing what is commonly known as special perils
      form with fire and extended coverage (including earthquake insurance but
      excluding flood insurance coverage for which Tenant shall not be responsible
      to
      pay for), vandalism and malicious mischief insurance with a rider for changes
      in
      code and an Inflation Guard Endorsement, in an amount equal to the full
      replacement cost thereof, with a deductible of no greater than Fifty Thousand
      and No/100 Dollars ($50,000.00). In no event shall Landlord maintain insurance
      coverage inadequate to prevent Landlord from becoming a coinsurer of the
      Improvements; 

    

    (ii)   A
      liability insurance policy naming Landlord as the insured (and Tenant as an
      additional insured) with limits, for each occurrence, of not less than
      $1,000,000 and $3,000,000 in the aggregate (or such higher limits as may be
      required by Landlord’s Mortgagee); and

    

    (iii)   rent
      loss
      insurance covering all Annual Basic Rental and Additional Rental due hereunder
      for a period of twelve (12) months.

    

    (b)   Tenant
      shall procure and maintain, and pay all premiums, fees and charges and
      deductibles for the purpose of procuring and maintaining continuously throughout
      the Term:

    
      
        
        

      

      
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    (i)    insurance
      on Tenant’s personal property and inventory located in the Premises against loss
      or damage by fire or other casualty in an amount equal to the full replacement
      cost thereof; and

    

    (ii)   Tenant
      shall require any contractor retained by Tenant to perform work on the Premises
      to carry and maintain, at no expense to Landlord, worker’s compensation
      insurance as required by statute.

    

    (iii)   combined
      single limit general liability insurance, including, but not limited to,
      insurance against assumed or contractual liability under this Lease, with
      respect to the Premises, to afford protection with limits, for each occurrence,
      of not less than Five Million and No/100 Dollars ($5,000,000.00) with respect
      to
      personal injury or death, and One Million and No/100 Dollars ($1,000,000.00)
      with respect to property damage; and

    

    (iv)   business
      interruption insurance covering business interruption at the Premises for a
      period of not less than 12 months.

    

    SECTION
      11.3   INSURANCE
      POLICIES.
      All
      liability, casualty and other insurance and policies of insurance referred
      to in
Section
      11.2
      shall
      include Landlord and Landlord’s Mortgagee, if any, as additional insureds and
      loss payees (other than as relates to Tenant’s personal property, equipment and
      inventory located at the Premises), shall insure Landlord against liability
      arising out of Tenant’s negligence or the negligence of any other person, firm
      or corporation and shall cover any liability of Tenant that may arise through
      any indemnity given by Tenant in this Lease. All policies procured hereunder
      shall be under standard form policies issued by insurers of recognized
      responsibility, rated A:XII or better by Best’s Insurance Rating Service and
      with carriers qualified to do business in the State where the Premises are
      located. Evidence of such insurance (Accord Form 27), together with copies
      of
      all insurance policies required hereunder, shall be delivered to Landlord within
      thirty (30) days from the date hereof and thereafter not less than thirty (30)
      days prior to the expiration thereof, and shall provide that such policy may
      not
      be canceled or modified except upon not less than thirty (30) days written
      notice to Landlord. If Tenant fails to procure and maintain the insurance
      required by this Article XI, then Landlord shall have the right to do so,
      without notice to Tenant if Landlord discovers that insurance coverage has
      lapsed, and the cost of same shall be Additional Rental payable to Landlord
      hereunder within ten (10) days of demand therefor.

    

    SECTION
      11.4   Waiver
      of Subrogation.
      Notwithstanding any contrary provision contained in this Lease, Landlord and
      Tenant hereby waive any and all rights of recovery, claim, action or cause
      of
      action against the other, its agents, employees, officers, partners, servants,
      shareholders, members or managers for any loss or damage that may occur to
      the
      Premises or any personal property located therein or arising by reason of fire,
      the elements or any cause which could be insured against under the terms of
      a
      standard special form or “all-risk” fire and extended coverage insurance policy
      (whichever covers more perils), regardless of cause or origin. Each party agrees
      to have the insurance policies obtained pursuant to this Lease endorsed to
      effect the terms of this Section
      11.4
      and
      shall forward copies of the same to the other upon request. 

    
      
        
        

      

      
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    XII.

    

    SECTION
      12.1   LANDLORD’S
      REPAIR ON CASUALTY. 
      (a)
      If,
      during the Term of this Lease, the Improvements shall be damaged or destroyed
      by
      fire or other casualty, then Landlord shall, subject to the provisions hereof,
      repair and restore the Improvements to the extent of insurance proceeds received
      by Landlord and funds remitted to Landlord by Tenant (if applicable);
provided,
      however,
      that if
      Landlord did not maintain the insurance that Landlord was obligated to maintain
      pursuant to this Lease, then Landlord shall repair and restore the Improvements
      to the extent of the insurance proceeds that would have been available had
      Landlord maintained the insurance it was obligated to maintain pursuant to
      this
      Lease. All such repair and restoration of the Premises shall be in accordance
      with the reasonable disbursement terms and conditions (including plan approval)
      imposed by Landlord’s Mortgagee, if any. If, within the earlier to occur of (i)
      ninety (90) days of the date insurance proceeds are received by Landlord’s
      Mortgagee or (ii) one hundred eighty (180) days of the date of any such
      casualty, Landlord’s Mortgagee fails to make insurance proceeds available under
      the terms of the mortgage documents between Landlord and Landlord’s Mortgagee
      and as a result Landlord elects not to repair or restore the Improvements,
      then
      Tenant shall have the right to terminate this Lease on written notice to
      Landlord; provided,
      that,
      notwithstanding any contrary provision hereof, but subject to the provisions
      of
      this Section
      12.1
      regarding a casualty during the last two (2) years of the Term (which Term
      shall
      include any unexercised and available Option Terms only if Tenant agrees to
      exercise any such Option Term such that the term has been extended to not less
      than two (2) years from the date of such casualty), if there exists no Event
      of
      Default (after all applicable notice and cure periods), and the reasonable
      cost
      to repair and restore the Improvements is less than 50% of the replacement
      cost
      of all of the Improvements or the repair or restoration can be completed within
      a six (6) month period following the date that all permits for such repair
      and
      restoration have been obtained (as estimated by a reputable contractor selected
      by Landlord and Tenant), then Landlord or Landlord’s Mortgagee shall be
      obligated to advance the insurance proceeds for Tenant’s benefit for the
      purposes of rebuilding and restoration and Landlord shall rebuild and restore
      the same. Landlord
      will notify Tenant in writing prior to the expiration of the last day of the
      applicable period described in clause (i) or (ii) of the preceding sentence
      as
      to whether proceeds have been made available to repair or restore or whether
      Landlord has elected to repair or rebuild, as the case may be. 

     

    (b)   Notwithstanding
      the
      provisions of Section
      12.1(a),
      if
      insurance proceeds are unavailable because of default by Tenant hereunder,
      then
      Tenant shall have no right to terminate this Lease and Tenant shall remit the
      amount necessary to repair or restore the Premises to Landlord within thirty
      (30) days of Landlord’s demand therefor. Tenant acknowledges that Landlord’s
      Mortgagee shall have the right to review and approve all plans and
      specifications for the Improvements to be repaired or restored pursuant to
      the
      terms hereof, and may impose such requirements as are reasonable and customary
      for construction of that type in the county where the Premises are located.
      To
      the extent possible and practical, the Improvements shall be rebuilt and
      restored as nearly as possible to the original plans and specifications therefor
      and as referenced on Exhibit
      B
      hereto
      with such changes therein as are necessitated by Landlord’s Mortgagee or
      applicable governmental rules and regulations. To the extent that the cost
      of
      rebuilding or restoration exceeds the amount of insurance proceeds received,
      Landlord has maintained the insurance it is obligated to maintain pursuant
      to
      the terms of this Lease and Landlord is obligated to rebuild and restore
      pursuant to the provisions of this Section
      12.1
      (or
      agrees with Tenant to rebuild and restore), then Tenant shall remit the
      difference to Landlord or Landlord’s Mortgagee, at the direction of Landlord,
      within thirty (30) days of demand therefor and in any event prior to the
      commencement of repair or restoration and if Tenant fails to remit such
      difference, then Landlord shall have the right to either terminate this Lease
      or
      to fund such difference and complete the rebuilding or restoration. Tenant
      shall
      cooperate (with no cost to Tenant) with Landlord and Landlord’s Mortgagee in
      connection with any repair and restoration of the Premises and the same shall
      be
      completed with due diligence and commenced and completed within a reasonable
      time after the damage or loss occurs. Annual Basic Rental shall abate following
      the casualty until the Improvements are completely repaired and restored but
      only to the extent that of the proceeds of rent loss insurance received by
      Landlord or that would have been received by Landlord had Landlord maintained
      the insurance that Landlord is obligated to maintain pursuant to this
      Lease.

    
      
        
        

      

      
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    (c)   In
      the event the
      Improvements cannot be rebuilt, restored or repaired because of prohibitions
      contained in the then applicable zoning or other governmental rules and
      regulations or the Permitted Encumbrances, and after a commercially reasonable
      attempt by Landlord and Tenant to remove or alter such restrictions, such
      restrictions remain, then all proceeds payable on account of such casualty
      shall
      be paid to Landlord and this Lease shall terminate and neither party shall
      have
      any right or obligation to the other hereunder except as otherwise herein
      expressly provided. Notwithstanding the foregoing, if during the last two (2)
      years of the Term of this Lease any casualty occurs that damages the
      Improvements to the extent that the same cannot be reasonably repaired within
      one hundred twenty (120) days from the date of the casualty, and Tenant elects
      not to exercise any available Option Term (which Tenant shall be entitled to
      do
      even if not otherwise timely to do so in accordance with Section
      3.3
      hereof),
      then either Landlord or Tenant shall have the option of terminating this Lease
      on written notice to the other within sixty (60) days of such casualty. If
      neither party elects to terminate this Lease or if Tenant elects to renew the
      Term for any Option Term, then this Lease shall remain in full force and effect
      and the Improvements shall be repaired on the terms and conditions set forth
      in
      this Section
      12.1.
      If
      either party terminates this Lease on notice to the other party as provided
      above, then all proceeds payable on account of such casualty shall be paid
      to
      Landlord and this Lease shall terminate and neither party shall have any right
      or obligation to the other hereunder except as otherwise herein expressly
      provided.

    

    Notwithstanding
      anything to the contrary herein, if the casualty occurs at any time during
      the
      Term of the Lease and Tenant has exercised its Option to purchase the Property
      or has not yet exercised its Option but still has time to do so, then provided
      Tenant exercises its Option to purchase the Property (or already has exercised
      it), Landlord shall have no right to terminate the Lease, and upon demand by
      Tenant, Landlord shall assign all insurance proceeds obtained by Landlord to
      Tenant immediately upon receipt thereof and shall cooperate with Tenant in
      the
      process of obtaining such proceeds. If the casualty will require more than
      two
      hundred seventy (270) days to repair and the damage to the Improvements is
      such
      that Tenant is prevented from conducting its business therefrom, Tenant shall
      have the right to terminate this Lease upon thirty (30) days notice to Landlord.
      

    
      
        
        

      

      
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    XIII.

    

    SECTION
      13.1   TERMINATION
      OF LEASE.
      If the
      entire Premises shall be appropriated or taken under the power of eminent domain
      by any public or quasi-public authority, or conveyance shall be made in lieu
      thereof, this Lease shall terminate and expire as of the date of such taking,
      and the parties shall thereupon be released from all liability hereunder which
      accrues after the date of such taking. If more than 25% of the Premises are
      taken or conveyance made in lieu thereof, either party shall have the right
      to
      cancel and terminate this Lease as of the date of such taking upon giving notice
      to the other of such election within thirty (30) days after such taking. In
      the
      event of such cancellation, the parties shall thereupon be released from any
      further liability under this Lease (except for obligations existing on the
      effective date of such termination). 

    

    SECTION
      13.2   CONTINUATION
      OF LEASE.
      If
      Tenant determines after a taking, that the Premises can continue to be operated
      for its then current use, then this Lease shall remain in full force and effect
      in accordance with its terms except that the Annual Basic Rent shall be, in
      the
      case where any portion of the Improvements has been taken, proportionately
      reduced effective as of the date of the taking.

    

    SECTION
      13.3   APPORTIONMENT
      OF AWARD.
      In the
      event of any taking, whether whole or partial, Landlord shall be entitled to
      receive the entire award except for any specific allocation for loss or
      disruption of Tenant’s business and any other awards to which Tenant may be
      entitled, but which do not reduce the amount of the award to Landlord. The
      provisions of this Section
      13.3
      shall
      survive any termination of this Lease in the event a final settlement or
      adjudication is not reached prior to the termination of the Lease or the
      expiration of the Term. Notwithstanding the foregoing, Tenant shall be entitled
      to pursue any governmental agency to recover any portion of the condemnation
      award attributed to the following items: (1) Tenant’s Improvements; and (2)
      Relocation costs.

    

    XIV.

    

    SECTION
      14.1   ASSIGNMENT.
      Tenant
      may not assign or sublease any interest in this Lease without the prior consent
      of Landlord; provided, however, that Landlord agrees not to unreasonably
      withhold, condition or delay any consent to a sublease or assignment.
      Notwithstanding any contrary provision contained in this Lease, no subletting
      or
      assignment shall result in a release of Tenant from its obligations hereunder.
      Tenant may assign its rights and delegate its obligation hereunder to an
      Affiliate (as defined below) of Tenant without Landlord’s consent. Any
      assignment or subletting shall be subject to all of the terms and conditions
      set
      forth in this Lease and no assignment shall be valid until the assignee has
      executed and delivered an assumption of all of Tenant’s obligations hereunder
      and Tenant has confirmed to Landlord, in writing, that it remains liable for
      the
      obligations of the tenant under this Lease.
      For
      purposes of this Agreement the term “Affiliate” means (i) any other entity or
      person which directly, or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with, the entity or
      person specified, (ii) any entity resulting from a merger or consolidation
      with
      Tenant, or (iii) any entity succeeding to the business and assets of Tenant.
      

    
      
        
        

      

      
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    SECTION
      14.2   ACCEPTANCE
      OF RENT FROM TRANSFEREE.
      The
      acceptance by Landlord of the payment of Rental following any attempted
      assignment or other transfer prohibited by this Article shall not be deemed
      to
      be a consent by Landlord to any such assignment or other transfer nor shall
      the
      same be deemed to be a waiver of any right or remedy of Landlord
      hereunder.

    

    XV.

    

    SECTION
      15.1   EVENT
      OF DEFAULT DEFINED.
      Any one
      or more of the following events shall constitute an “Event of
      Default”:

    

    (a)   The
      sale
      of Tenant’s interest in the Premises under attachment, execution or similar
      legal process; or if Tenant is adjudicated as bankrupt or insolvent under any
      State bankruptcy or insolvency law or an order for relief is entered against
      Tenant under the Federal Bankruptcy Code.

    

    (b)   The
      commencement of a case under any chapter of the Federal Bankruptcy Code by
      or
      against Tenant or the filing of a voluntary or involuntary petition proposing
      the adjudication of Tenant as bankrupt or insolvent, or the reorganization
      of
      Tenant, or an arrangement by Tenant with its creditors.

    

    (c)   The
      admission by any officer of Tenant of its inability to pay its debts when
      due.

    

    (d)   The
      appointment of a receiver or trustee for the business or property of
      Tenant.

    

    (e)   The
      making by Tenant of a general assignment for the benefit of its creditors,
      or,
      except as permitted pursuant to Section
      14.1,
      if in
      any other manner Tenant’s interest in this Lease shall pass to another by
      operation of law.

    

    (f)   The
      failure of Tenant to pay any Rental or other sum of money within ten (10) days
      following receipt of written notice of such failure from Landlord; provided,
      however,
      that
      Landlord shall have no obligation to provide more than two (2) such notices
      in
      any calendar year.

    

    (g)   Default
      by Tenant in the performance or observance of any covenant or agreement of
      this
      Lease (other than a default involving the payment of money), which default
      is
      not cured within thirty (30) days after the giving of notice thereof by
      Landlord.

    

    SECTION
      15.2  
      REMEDIES.

    

    (a)   Upon
      the
      occurrence and during the continuance of any Event of Default, after all
      applicable notice and cure periods, Landlord may do any one or more of the
      following:

    
      
        
        

      

      
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    (i)    Perform,
      on behalf and at the expense of Tenant, any obligation of Tenant under this
      Lease which Tenant has failed to perform and of which Landlord shall have given
      Tenant notice, the cost of which performance by Landlord, together with interest
      thereon at the Default Rate from the date of such expenditure, shall be deemed
      Additional Rental and shall be payable by Tenant to Landlord upon
      demand.

    

    (ii)   Terminate
      this Lease and repossess the Premises (after complying with all applicable
      laws
      relating to such repossession) and be entitled to recover as damages an amount
      of money equal to the sum of (i) the cost of recovering the Premises, (ii)
      all
      unpaid Rental, together with interest thereon at the Default Rate, (iii) the
      present value (discounted at a rate per annum equal to the Prime Rate then
      in
      effect) of the balance of the Rental due for the remainder of the Term to the
      extent it exceeds the fair rental value of the Premises for the remainder of
      the
      Term (which shall in no event be less than zero) and (iv) any other sum of
      money
      or damages Landlord is entitled to under any express provision of this
      Lease.

    

    (iii)   Landlord
      may terminate Tenant’s right of possession (but not this Lease) and may
      repossess the Premises by forcible entry or detainer suit or otherwise, in
      accordance with applicable law, without terminating this Lease, in which event
      Landlord may relet the same for the account of Tenant for such rent and upon
      such terms as shall be satisfactory to Landlord. No reentry by Landlord,
      however, or any other action by Landlord shall constitute an acceptance of
      surrender by Tenant, it being understood that such acceptance or surrender
      can
      be affected only by the written agreement of Landlord and Tenant. For the
      purpose of such reletting, Landlord is authorized to decorate or to make any
      repairs, changes, alterations or additions in or to the Premises that may be
      necessary, and (a) if Landlord shall fail to relet the Premises, or (b) if
      the
      same are relet and a sufficient sum shall not be realized from such reletting
      after paying (i) the unpaid rent due hereunder earned but unpaid at the time
      of
      reletting plus interest thereon at the Default Rate thereon, (ii) the reasonable
      cost of recovering possession, (iii) the reasonable costs and expenses of
      decorations, repairs, changes, alterations and additions and (iv) the expense
      of
      such reletting and of the collection of the rent accruing therefrom to satisfy
      the rent provided for in this Lease to be paid, then Tenant shall pay to
      Landlord as damages a sum equal to the amount of the rental reserved in this
      Lease for such period or periods, or if the Premises have been relet, Tenant
      shall satisfy and pay any such deficiency upon demand therefor from time to
      time
      and Tenant agrees that Landlord may file suit to recover any sums falling due
      under this Section 15.2(iii) from time to time, and that no delivery to or
      recovery of any portion due Landlord hereunder shall be any defense in any
      action to recover any amount not theretofore reduced to judgment in favor of
      Landlord, nor shall such reletting be construed as an election on the part
      of
      Landlord to terminate this Lease unless a written notice of such intention
      be
      given to Tenant by Landlord. Notwithstanding any such reletting without
      termination, Landlord may at any time thereafter elect to terminate this Lease
      for such previous breach.

    

    (iv)   Exercise
      any other legal or equitable right or remedy which it may have under this Lease
      or at law.

    
      
        
        

      

      
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    (b)   Notwithstanding
      the provisions of clause (a) above and regardless of whether an Event of Default
      shall have occurred, Landlord may exercise the remedy described in clause (a)
      without any notice to Tenant if Landlord, in its good faith judgment, believes
      it would be injured by failure to take rapid action and if Landlord reasonably
      believes that the unperformed obligation or pending actions by Tenant will
      result in immediate and substantial harm to person or property.

    

    (c)   Any
      costs
      and expenses incurred by either party (including, without limitation, reasonable
      attorneys’ fees actually incurred and court costs) in enforcing any of its
      rights or remedies under this Lease shall, in the case of sums due Landlord,
      be
      deemed to be Additional Rental and shall, in all cases, be repaid to the party
      entitled to the same upon demand and shall bear interest from the date due
      until
      paid at the Default Rate. 

    

    (d)   Landlord
      agrees to use commercially reasonable efforts to mitigate its damages as a
      result of a default hereunder by Tenant.

    

    SECTION
      15.3   DAMAGES.

    

    (a)   If
      Tenant’s right of possession under this Lease is terminated by Landlord pursuant
      to Section
      15.2,
      then
      Tenant shall remain liable for any Rental and its other obligations under this
      Lease. Tenant shall also pay to Landlord (i) all reasonable costs, fees and
      expenses including, but not limited to, reasonable attorneys’ fees actually
      incurred, costs and expenses incurred by Landlord in pursuit of its remedies
      hereunder (including court costs) or in reletting the Premises to others from
      time to time and (ii) additional damages which shall be in an amount or amounts
      equal to the Rental due hereunder during the remainder of the Term less all
      sums
      received by Landlord from any reletting of the Premises; provided,
      that
      the amount received by Landlord from any reletting of the Premises shall be
      reduced by the costs of such reletting, such as brokerage commissions and
      remodeling expenses.

    

    (b)   If
      this
      Lease is terminated pursuant to Section
      15.2,
      Landlord may relet the Premises or any part thereof, alone or together with
      other premises, for such term or terms (which may be greater or less than the
      period which otherwise would have constituted the balance of the Term) and
      on
      such terms and conditions (which may include concessions or free rent and
      alterations of the Premises) as Landlord, in its absolute discretion, may
      determine, but Landlord shall not be liable for, nor shall Tenant’s obligations
      hereunder be diminished by reason of any failure by Landlord to relet the
      Premises or any failure by Landlord to collect any rent due upon such reletting.
      

    

    SECTION
      15.4   ASSIGNMENT
      IN BANKRUPTCY.
      In the
      event of an assignment by operation of law under the Federal Bankruptcy Code,
      or
      any State bankruptcy or insolvency law and Landlord elects not to terminate
      or
      is stayed from termination of Tenant’s rights of possession under this Lease,
      the assignee shall provide Landlord with adequate assurance of future
      performance of all of the terms, conditions and covenants of the Lease, which
      shall include, but which shall not be limited to, assumption of all the terms,
      covenants and conditions of the Lease by the assignee and the making by the
      assignee of the following express covenants to Landlord:

    
      
        
        

      

      
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    (i)    That
      assignee has sufficient capital and financial viability to pay the Rental and
      other charges due under the Lease for the entire Term; and

    

    (ii)   That
      assumption of the Lease by the assignee will not cause Landlord to be in
      violation or breach of any provision in any financing agreement.

    

    XVI.

    

    SECTION
      16.1   SUBORDINATION.

    

    (a)   Unless
      a
      Mortgagee shall otherwise elect as provided in Section
      16.2
      of this
      Lease, and subject to Tenant’s right of non-disturbance set forth in
Section
      16.4
      below,
      Tenant’s rights under this Lease are and shall remain subject and subordinate to
      the operation and effect of:

    

    (i)    any
      lease
      of land only or of land and buildings in a sale-leaseback transaction involving
      the Premises, or

    

    (ii)   any
      mortgage, deed of trust of other security instrument constituting a lien upon
      the Premises, whether the same shall be in existence at the date hereof or
      created hereafter, any such lease, mortgage, deed of trust or other security
      instrument being referred to herein as a “Mortgage” and the party or parties
      having the benefit of the same, whether as lessor, mortgagee, trustee or note
      holder, being referred to herein as a “Mortgagee”.

    

    (b)   Tenant
      agrees, within ten (10) business days after a request therefor, to execute
      any
      instrument or instruments reasonably necessary or desirable to effectuate its
      agreement to subordinate its interest to the interest of any Mortgagee, subject
      to the non-disturbance requirements described in Sections
      16.3
      and
16.4
      below.

    

    SECTION
      16.2   
      MORTGAGEE’S
      UNILATERAL SUBORDINATION.
      If a
      Mortgagee shall elect by notice to Tenant or by the recording of a unilateral
      declaration of subordination, then this Lease and Tenant’s rights hereunder
      shall be superior and prior in right to the Mortgage of which such Mortgagee
      has
      the benefit, with the same force and effect as if this Lease had been executed,
      delivered and recorded prior to the execution, delivery and recording of such
      Mortgage.

    

    SECTION
      16.3   
      ATTORNMENT.
      If any
      person shall succeed to all or part of Landlord’s interest in the Premises,
      whether by purchase, refinance, foreclosure, deed in lieu of foreclosure, power
      of sale, termination of lease, or otherwise, such successor in interest shall
      not disturb Tenant’s interest in or possession of the Premises pursuant to the
      terms of this Lease, Tenant shall attorn to such successor in interest and
      shall, within ten (10) business days after a request therefor, execute such
      agreement in confirmation of such attornment as such successor in interest
      shall
      reasonably request; provided,
      however,
      that no
      Mortgagee or successor in interest to Landlord by reason of foreclosure or
      deed
      in lieu of foreclosure shall be (i) bound by any payment of Rental more than
      one
      month in advance; (ii) bound by any amendments or modifications of this Lease
      made after the date of such Mortgage without the consent of the Mortgagee or
      (iii) liable for any act or omission of a prior landlord hereunder,
      substantially in the form of Exhibit
      F
      attached
      hereto and made a part hereof.

    
      
        
        

      

      
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    SECTION
      16.4  
      NON-DISTURBANCE.
      So long
      as no Event of Default shall exist (after all applicable notice and cure
      periods), this Lease shall remain in full force and effect for the full Term
      hereof, and Tenant’s occupancy of the Premises and tenancy under this Lease
      shall not be disturbed by any foreclosure proceeding or any deed in lieu of
      foreclosure or other such transfer, and the subordination set forth in
Section
      16.1
      is made
      subject to Tenant’s non-disturbance rights under this Section
      16.4.
      Landlord shall cause its Mortgagee to execute and deliver a subordination,
      non-disturbance and attornment agreement, in form and substance reasonably
      acceptable to all parties, as soon as reasonably possible after the execution
      hereof.

    

    XVII.

    

    SECTION
      17.1  
      SENDING
      OF NOTICES.

    

    (a)   Any
      notice, request, demand, approval or consent given or required to be given
      under
      this Lease shall be in writing and shall be deemed to have been given as
      follows:

    

    (i)   If
      intended for Landlord, on the earlier of (i) the date such notice is actually
      received by Landlord, (ii) the date such notice is delivered to Landlord or
      (iii) the next business day following the date on which the same shall have
      been
      deposited with a nationally recognized overnight courier service for next day
      delivery properly addressed with all charges prepaid, addressed to Landlord,
      Attn: Ken Beuley, The Keith Corporation, 5935 Carnegie Boulevard, Charlotte,
      North Carolina 28209, with a facsimile copy thereof faxed to Landlord at (704)
      365-0733; Attn: Ken Beuley on the day notice is mailed to Landlord.

    

    (ii)   If
      intended for Tenant, on the earlier of (i) the date such notice is actually
      received by Tenant, (ii) the date such notice is delivered to Tenant or (iii)
      the date on which the same shall have been deposited with a nationally
      recognized overnight courier service for next day delivery properly addressed
      with all charges prepaid, addressed to Tenant at the Tenant Notice
      Address.

    

    (iii)   A
      copy of
      all notices sent to Landlord shall be delivered to Moore & Van Allen, PLLC,
      Floor 47, Bank of America Corporate Center, 100 North Tryon Street, Charlotte,
      North Carolina 28202-4003, Attention: Jeffrey W. Glenney.

    

    (iv)   A
      copy of
      all notices sent to Tenant shall be delivered to Tenant’s Notice
      Address.

    

    (b)   Either
      party may, at any time, change its notice address (including its facsimile
      number) by sending a written notice to that affect the other party stating
      the
      change and setting forth the new address or number.

    

    SECTION
      17.2   NOTICE
      TO MORTGAGEES.
      If any
      Mortgagee shall notify Tenant in writing that it is the holder of a Mortgage
      affecting the Premises, no notice, request or demand thereafter sent by Tenant
      to Landlord shall be effective unless and until a copy of the same shall also
      be
      sent to such Mortgagee in the manner prescribed in Section
      17.1
      and to
      such address as such Mortgagee shall designate.

    
      
        
        

      

      
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    XVIII.

    

    SECTION
      18.1   WARRANTY.
      Subject
      only to the Permitted Encumbrances and all applicable laws (including zoning
      laws), Landlord warrants that it has full right and authority to lease the
      Premises upon the terms and conditions herein set forth; and Tenant shall
      peacefully and quietly hold and enjoy the Premises in accordance with the terms
      and conditions hereof for the full Term hereof and so long as Tenant does not
      default in the performance of any of its covenants or obligations
      hereunder.

    

    XIX.

    

    SECTION
      19.1   ESTOPPEL
      CERTIFICATES.
      At any
      time and from time to time, within ten (10) days after Landlord or Tenant
      delivers the requested certificate, Tenant or Landlord will execute, acknowledge
      and deliver to the other and to such Mortgagee (if applicable) or other party
      as
      may be designated by Landlord, a certificate in reasonable form with respect
      to
      the matters relating to this Lease or the status of performance of obligations
      of the parties hereunder as may be reasonably requested by Landlord or Tenant
      (including, without limitation, the amount of Annual Basic Rental and other
      charges due hereunder, the existence of any defaults, the amount of the cost
      of
      any unsuitable soil or rock, the expiration of the Term hereof and the existence
      of any Lease amendments).

    

    SECTION
      19.2   INSPECTIONS
      AND ACCESS BY LANDLORD.
      So long
      as Landlord does not unreasonably interfere with Tenant’s operation, Tenant will
      permit Landlord, its agents, employees and contractors, to enter all parts
      of
      the Premises upon not less than 48 hours prior written notice and then only
      during Tenant’s business hours to inspect the same, to show to prospective
      purchasers and mortgagees and to enforce or carry out any provision of this
      Lease, including, without limitation, any access necessary for the making of
      any
      repairs; provided, however, that, in an emergency situation, Tenant shall not
      be
      notified of such access. During the last nine (9) months of the Term and upon
      not less than 48 hours advance oral notice to Tenant, Landlord shall have the
      right to show the Premises to prospective tenants and purchasers and to place
      a
      sign on the Premises indicating that the Premises are available for rent or
      sale.

    

    SECTION
      19.3   MEMORANDUM
      OF LEASE.
      Upon the
      execution of this Lease, the parties hereby agree to execute, acknowledge and
      deliver a Memorandum of Lease in substantially the form attached hereto as
      Exhibit
      C.
      No such
      memorandum shall include any financial terms of the Lease and shall reference
      the option of Tenant to purchase the Property pursuant to Section
      19.24
      hereof.
      Recording, filing and like charges and any stamp, charge for recording, transfer
      or other tax shall be paid by Tenant. In the event of termination of this Lease,
      within thirty (30) days after written request from Landlord, Tenant agrees
      to
      execute, acknowledge and deliver to Landlord an agreement terminating the
      Memorandum of Lease of record. If Tenant fails to execute such agreement within
      that thirty (30) day period, Landlord is hereby authorized to execute and record
      such agreement terminating the Memorandum of Lease of record. This provision
      shall survive any termination of this Lease.

    
      
        
        

      

      
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    SECTION
      19.4   REMEDIES
      CUMULATIVE.
      No
      reference to any specific right or remedy shall preclude either party from
      exercising any other right or from having any other remedy or from maintaining
      any action to which it may otherwise be entitled at law or in equity. The
      foregoing shall in no way relieve or release Tenant from its obligation to
      pay
      all Rental without offset, deduction, or counterclaim, except as expressly
      permitted in Section
      3.1(c)
      of this
      Lease. No failure by either party to insist upon the strict performance of
      any
      agreement, term, covenant or condition hereof, or to exercise any right or
      remedy consequent upon a breach thereof, and no acceptance of full or partial
      rent during the continuance of any such breach, shall constitute a waiver of
      any
      such breach, agreement, term, covenant or condition. Except for any express
      written waiver by Landlord as to any breach by Tenant of its obligations under
      this Lease, no waiver by Landlord as to any breach of Tenant shall affect or
      alter this Lease in any way whatsoever.

    

    SECTION
      19.5   SUCCESSORS
      AND ASSIGNS.
      Subject
      to Section
      14.1
      of this
      Lease, this Lease and the covenants and conditions herein contained shall inure
      to the benefit of and be binding upon Landlord, its successors and assigns,
      and
      shall be binding upon Tenant, its successors and assigns and shall inure to
      the
      benefit of Tenant and only such assigns of Tenant to whom the assignment of
      this
      Lease by Tenant has been consented to by Landlord or is otherwise permitted
      hereunder. Upon any sale or other transfer by Landlord of its interest in the
      Premises and upon the express written assumption of Landlord’s obligations
      hereunder by the assignee of Landlord’s interest herein, Landlord shall be
      relieved of all of its obligations arising under this Lease occurring after
      the
      date of such sale or transfer. 

    

    SECTION
      19.6   CAPTIONS
      AND HEADINGS.
      The
      Article and Section captions and headings are for convenience of reference
      only
      and in no way shall be used to construe or modify the provisions set forth
      in
      this Lease.

    

    SECTION
      19.7   BROKER’S
      COMMISSION. Landlord
      and Tenant each warrant to the other that it has not dealt with any broker
      or
      agent in connection with this Lease. Tenant and Landlord shall each indemnify
      the other against all costs, attorneys’ fees and other liabilities for
      commissions or other compensation claimed by any broker or agent claiming the
      same by, through or under the indemnifying party. The foregoing indemnity shall
      survive the expiration or termination of this Lease. Any fees due to The Matrix
      Real Estate Services, LLC shall be paid by Tenant.

    

    SECTION
      19.8   NO
      JOINT VENTURE.
      Any
      intention to create a joint venture or partnership relation between the parties
      hereto is hereby expressly disclaimed.

    

    SECTION
      19.9   NO
      OPTION.
      The
      submission of this Lease for examination does not constitute a reservation
      of or
      option for the Premises, and this Lease shall become effective only upon
      execution and delivery thereof by both parties.

    
      
        
        

      

      
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    SECTION
      19.10   NO
      MODIFICATION.
      This
      writing is intended by the parties as a final expression of their agreement
      and
      as a complete and exclusive statement of the terms thereof, all negotiations,
      considerations and representations between the parties having been incorporated
      herein. No course of prior dealings between the parties or their officers,
      employees, agents or affiliates shall be relevant or admissible to supplement,
      explain or vary any of the terms of this Lease. Acceptance of, or acquiescence
      in, a course of performance rendered under this or any prior agreement between
      the parties or their affiliates shall not be relevant or admissible to determine
      the meaning of any of the terms of this Lease. No representations,
      understandings or agreements have been made or relied upon in the making of
      this
      Lease other than those specifically set forth herein. This Lease can be modified
      only by a writing signed by the parties. 

    

    SECTION
      19.11   SEVERABILITY.
      If any
      term or provision, or any portion thereof, of this Lease, or the application
      thereof to any person or circumstances shall, to any extent, be invalid or
      unenforceable, the remainder of this Lease, or the application of such term
      or
      provision to persons or circumstances, other than those as to which it is held
      invalid or unenforceable, shall not be affected thereby, and each term and
      provision of this Lease shall be valid and be enforced to the fullest extent
      permitted by law.

    

    SECTION
      19.12   THIRD
      PARTY BENEFICIARY.
      Nothing
      contained in this Lease shall be construed so as to confer upon any other party
      the rights of a third party beneficiary except rights contained herein for
      the
      benefit of a Mortgagee.

    

    SECTION
      19.13   AUTHORITY;
      GOOD STANDING.
      Tenant
      represents and warrants to Landlord that Tenant is a corporation duly formed,
      validly existing and in good standing under the laws of the State of Delaware,
      and (ii) the person executing this Lease on behalf of Tenant was authorized
      to
      do so. Upon the request of Landlord, Tenant shall provide to Landlord a
      certificate of the Secretary of Tenant stating the officers of Tenant, the
      specimen signature of the officer of Tenant who will be executing this Lease
      and
      a resolution of the board of directors of Tenant authorizing the officer of
      Tenant who will execute this Lease to execute and deliver this Lease on behalf
      of Tenant. Landlord represents and warrants to Tenant that (i) Landlord is
      a
      limited liability company duly formed, validly existing and in good standing
      under the laws of the State of North Carolina, and (ii) the person executing
      this Lease on behalf of Landlord was authorized to do so. Upon the request
      of
      Tenant, Landlord shall provide to Tenant evidence of the authority of the person
      executing this Lease on behalf of Landlord.

    

    SECTION
      19.14   APPLICABLE
      LAW.
      This
      Lease and the rights and obligations of the parties hereunder shall be construed
      in accordance with the laws of the State of North Carolina. 

    

    SECTION
      19.15   PERFORMANCE
      OF LANDLORD’S OBLIGATIONS BY MORTGAGEE.
      Tenant
      shall accept performance of any of Landlord’s obligations hereunder by any
      Mortgagee.

    
      
        
        

      

      
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    SECTION
      19.16   HAZARDOUS
      SUBSTANCES.
      Landlord, to its actual knowledge and except as set forth in the Phase I
      Environmental Assessment of the Property obtained by Landlord (a copy of which
      has been delivered to Tenant), represents and warrants to Tenant that as of
      the
      Turnover Date, the Property shall be free from any Hazardous Substances (except
      as permitted by applicable law). Landlord shall not install or incorporate
      in
      the Improvements or use in the construction thereof (except as permitted by
      applicable law) any Hazardous Substances, and Landlord hereby agrees to
      indemnify, defend and hold Tenant harmless from any claim, demand, liability,
      damage, loss or expense that Tenant might suffer from the breach of this
Section
      19.16
      by
      Landlord. Tenant agrees that it shall not use or store any Hazardous Substances
      at the Premises, except to the extent permitted by applicable law and then
      only
      in strict conformance with applicable law. Tenant shall indemnify and hold
      harmless Landlord from any claim, demand, liability, damage, loss or expense
      (including environmental compliance or response costs, costs for all remedial
      action and/or damage to third parties, attorneys’ fees and court costs) incurred
      or suffered by Landlord, directly or indirectly, as a result of or in connection
      with the use, storage, disposal, generation, release, or threatened release
      of
      any Hazardous Substance by Tenant (and its invitees, customers, employees,
      agents and contractors) during the Term, upon or beneath the Property, which
      indemnity shall survive the termination of this Lease. Throughout the Term
      and
      at Landlord’s expense, Landlord and its contractors and consultants, upon at
      least ten (10) days’ advance written notice, may enter the Premises for the
      purposes of performing inspections (including a Phase I environmental audit)
      to
      determine whether Tenant is complying with all applicable laws, including all
      applicable environmental laws. “Hazardous Substances” means and includes any of
      the substances, materials, elements or compounds that are contained in the
      list
      of hazardous substances adopted by the United States Environmental Protection
      Agency (the “EPA”) and the list of toxic pollutants designated by the United
      States Congress or the EPA and substances, materials, elements or compounds
      affected by any other federal, state or local statute, law ordinance, code,
      rule, regulation, order or decree now or at any time hereafter in effect
      regulating, relating to or imposing liability or standards of conduct concerning
      any hazardous, toxic, dangerous, restricted or otherwise regulated waste,
      substance or material, as now or at any time hereafter in effect. The term
      “Hazardous Substances” shall include, without limitation, any oil, petroleum,
      flammable explosive, asbestos, urea-formaldehyde, radioactive material, vapor,
      solvent, contaminated or polluting material, hazardous or toxic substance or
      waste which is or becomes regulated by any local governmental authority, the
      State of North Carolina or the United States Government. The term “Hazardous
      Substance” shall also include, without limitation, any material or substance
      which is (i) designated as a “hazardous substance” pursuant to Section 311 of
      the Federal Water Pollution Control Act (33 U.S.C. Section 1317), (ii) defined
      as a “hazardous waste” pursuant to Section 1004 of the Federal Resource
      Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., or (iii) defined
      as a “hazardous substance” pursuant to Section 101 of the Comprehensive
      Environmental Response, Compensation and Liability Act of 1980, as amended,
      42
      U.S.C. Section 9601 et seq. The indemnities set forth in this Section
      19.16
      shall
      survive the expiration or earlier termination of this Lease.

    

    SECTION
      19.17   LIMITATION
      ON RIGHT OF RECOVERY AGAINST LANDLORD.
      Tenant
      acknowledges and agrees that the liability of Landlord under this Lease shall
      be
      limited to its interest in the Premises and any judgments rendered against
      Landlord shall be satisfied solely out of the proceeds of sale of its interest
      in the Premises. No personal judgment shall be against Landlord upon
      extinguishment of its rights in the Premises and any judgments so rendered
      shall
      not give rise to any right of execution or levy against Landlord’s assets. The
      provisions hereof shall inure to Landlord’s successors and assigns including any
      Mortgagee. The foregoing provisions are not intended to relieve Landlord from
      the performance of any of Landlord’s obligations under this Lease, but only to
      limit the personal liability of Landlord in case of recovery of a judgment
      against Landlord; nor shall the foregoing be deemed to limit Tenant’s rights to
      obtain injunctive relief or specific performance or to avail itself of any
      other
      right or remedy which may be awarded Tenant by law or under this Lease,
      including the right to recover the amount of any final, non-appealable judgment
      through the offset of Rental due hereunder. 

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    

    SECTION
      19.18   NET
      LEASE.
      Notwithstanding anything to the contrary set forth in this Lease
      (but
      subject to the rights of Tenant under Section 9.1 of this Lease),
      it is
      the purpose, intent and agreement of Landlord and Tenant that the Annual Basic
      Rental payable hereunder shall be an absolute net return to Landlord,
      undiminished by the Taxes or any part thereof, or any other maintenance or
      repair costs, costs of insurance, or any other charges of any kind or nature
      whatsoever relating to the Premises or any Improvements, including any charges
      assessed or levied pursuant to the Permitted Encumbrances, which may arise
      or
      become due during the term of this Lease, all of which shall be paid by Tenant.
      All sums payable pursuant to this Section
      19.18
      shall be
      deemed Additional Rental payable by Tenant hereunder. Notwithstanding any
      contrary provision in this Lease, in no event shall Landlord be liable to Tenant
      for consequential or punitive damages.

    

    SECTION
      19.19   COMPLIANCE
      WITH LAW AND REGULATION.
      Tenant,
      at its sole cost and expense, shall comply with and shall cause the Premises
      to
      comply with (a) all federal, state, county, municipal and other governmental
      statutes, laws, rules, orders, regulations and ordinances relating to the use
      or
      occupancy of the Premises (including environmental laws), whether presently
      existing or enacted after the date hereof, and (b) all rules, orders and
      regulations of the National Board of Fire Underwriters or Landlord’s or Tenant’s
      fire insurance rating organization or other bodies exercising similar functions
      in connection with the prevention of fire or the correction of hazardous
      conditions which apply to the Premises.

    

    SECTION
      19.20   FINANCIAL
      STATEMENTS.
      If
      Tenant ever ceases to be a publicly traded corporation, then at Landlord’s
      request, Tenant shall deliver to Landlord audited annual financial statements
      upon request not more than one time per year, such statements to be delivered
      not later than the earlier of thirty (30) days after receipt of a request
      therefore or ninety (90) days after the end of the latest fiscal year of Tenant,
      and which delivery of statements shall be subject to Landlord’s execution of a
      confidentiality agreement that is reasonably acceptable to Landlord and allows
      disclosure of such financial statements to any lender of Landlord and
      prospective purchasers of the Property (subject to such parties agreeing to
      keep
      such information confidential). 

    

    SECTION
      19.21   PROPERTY
      ACQUISITION CONTINGENCY.
      All of
      the obligations of Tenant hereunder are conditioned upon the acquisition of
      the
      Property on or before April 30, 2006 (the “Contingency Date”), and if Landlord
      does not purchase the Property by the Contingency Date for any reason
      whatsoever, then either Landlord or Tenant shall have the right to terminate
      this Lease and upon any such termination, neither party shall have any further
      obligation or liability to the other arising out of the transactions
      contemplated by this Lease.

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    SECTION
      19.22   MULTIPLE
      COUNTERPARTS.
      This
      Lease may be executed in multiple, separate counterparts, each of which shall
      constitute an original and all of which taken together shall constitute but
      one
      original.

    

    SECTION
      19.23   TIME
      IS OF THE ESSENCE.
      Time is
      of the essence with respect to the obligations of Landlord and Tenant
      hereunder.

    

    SECTION
      19.24   PURCHASE
      OPTION.
      Landlord
      hereby grants to Tenant an option to purchase the Property from the Landlord
      (the “Option”) upon the terms and conditions set forth below in this
Section
      19.24.
      Tenant’s option to purchase the Property shall terminate and be null and void if
      Tenant fails to exercise the Option (by delivery of written notice to Landlord)
      on or before the end of the fifty fourth (54th) month of the Initial Lease
      Term.
      The terms and provisions of the Option are set forth below:

    

    (i)    The
      purchase price for the Property pursuant to the Option shall be the sum of
      (x)
      $10,292,000 plus (y) all sums payable to Landlord under this Lease accruing
      through the date of the closing of the Option. The provisions of the Lease
      that
      are stated to expressly survive termination of the Lease shall survive the
      termination of the Lease pursuant to the Option. The Closing shall occur on
      the
      expiration date of the fifth (5th) Rental Year.

    

    (ii)   Upon
      the
      closing of the Option, the parties shall execute an agreement terminating this
      Lease. The termination agreement shall provide that neither party shall waive
      or
      forfeit any rights arising under the Lease that accrued prior to the date of
      the
      closing of the sale of the Property.

    

    (iii)   The
      Property shall be conveyed and sold to Tenant in its “As-Is” condition and
      without any representation or warranty, express or implied. Landlord shall
      convey the Property by appropriate documents containing a special warranty
      of
      title and subject only to the Permitted Encumbrances and other encumbrances
      consented to by Tenant or caused by Tenant, except that (i) Landlord shall
      cause
      any monetary lien constituting a Permitted Encumbrance to be released upon
      the
      conveyance of the Property and (ii) Landlord shall assign to Tenant, without
      warranty or recourse, all of Landlord’s right, title and interest in and to any
      warranties covering all or any part of the Landlord’s Work (including any roof
      warranties). Tenant shall pay all closing costs relating to such sale, including
      recording fees and deed stamps. As
      the
      Lease provides that Tenant shall pay for ad valorem taxes and insurance, there
      will be no proration of taxes or insurance and no sales commission shall be
      due
      by any party hereunder, Landlord’s proceeds at the closing shall not be
      diminished by any commission in connection with the conveyance of the Property
      pursuant to this Option.

    

    SECTION
      19.25   ATTORNEYS’
      FEES.
      In the
      event either party commences an action or proceeding against the other to
      enforce the terms of this Lease, the prevailing party shall be entitled to
      collect from the unsuccessful party all costs incurred by the prevailing party
      therein, including, without limitation, the prevailing party’s reasonable
      attorneys’ fees.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    XX.

    

    SECTION
      20.1   LANDLORD’S
      SCOPE OF WORK.
      Landlord hereby specifically acknowledges and declares that the Landlord’s Scope
      of Work is sufficient to have enabled the Landlord and Contractor to determine
      the cost of the work and the time to complete the work therein in order to
      enter
      into the agreement and that all of the construction documents shall be
      sufficient to enable the Landlord and Contractor to construct Landlord’s Work in
      accordance with all matters of record, including, without limitation, any
      recorded easement agreements (“Matters of Record”), and all applicable laws,
      statutes, building codes and regulations in effect as of the date of this Lease
      (“Applicable Laws”) and otherwise to fulfill all of Landlord’s obligations
      hereunder. Landlord further acknowledges that it has visited the site, examined
      all conditions affecting the Landlord’s Work and is fully familiar with all of
      the conditions thereon and affecting the same. It shall be the obligation of
      the
      Landlord to review all of the construction documents to determine whether they
      are in accordance with all Matters of Record and Applicable Laws.

    

    SECTION
      20.2   LABOR
      AND MATERIALS.
      Landlord may make substitutions only with the written consent of Tenant. All
      substitutions must be of equal or greater quality, unless Tenant specifically
      approves otherwise in writing. Tenant may withhold consent in its sole and
      absolute discretion. Landlord shall submit requests for substitution as soon
      as
      practicable after the need for the substitution is determined to allow for
      adequate consideration of such request and to minimize delay in the progress
      of
      the Work.

    

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound hereby, have executed this Lease
      as of the day and year first above written.

    

    
      	 	
              LANDLORD:

            
	 	 	 
	 	
              TKC
                XCIX, LLC,
                a
                North Carolina limited liability company

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Kenneth
                R. Beuley, Authorized Member

            
	 	 	 
	 	 	 
	 	
              TENANT:

            
	 	 	 
	 	
              BIG
                DOG HOLDINGS, INC.,
                a
                Delaware corporation

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    Attachments:

     

    Exhibit
      A
      - Legal
      Description of the Property 

    Exhibit
      B
      -
      Landlord’s Scope of Work

    Exhibit
      C
      -
      Memorandum of Lease

    Exhibit
      D
      -
      Permitted Encumbrances

    Exhibit
      E
      - Site
      Plan

    Exhibit
      F
      - Form
      of SNDA

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    Legal
      Description

    

    Tract
      One

    

    BEING
      that certain 4.9 acres, more or less, tract or parcel of land lying south of
      Lincoln County Parkway Extension, in Lincoln County, North Carolina, said tract
      or parcel being shown on the “Exhibit Map For: The Keith Corporation Showing
      Project Bulldog Site” attached hereto as Exhibit A, said tract or parcel being
      denominated as Tract One thereon.

    

    Tract
      Two

    

    BEING
      that certain 0.1 acres, more or less, tract or parcel of land lying south of
      Lincoln County Parkway Extension, in Lincoln County, North Carolina, said tract
      or parcel being shown on the “Exhibit Map For: The Keith Corporation Showing
      Project Bulldog Site” attached hereto as Exhibit A, said tract or parcel being
      denominated as Tract Two thereon.

    

    Tract
      Three

    

    BEING
      that certain 28.7 acres, more or less, tract or parcel of land lying south
      of
      Lincoln County Parkway Extension, in Lincoln County, North Carolina, said tract
      or parcel being shown on the “Exhibit Map For: The Keith Corporation Showing
      Project Bulldog Site” attached hereto as Exhibit A, said tract or parcel being
      denominated as Tract Three thereon.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    Scope
      of
      Landlord’s Work

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    MEMORANDUM
      OF LEASE AND OPTION TO PURCHASE

     

    THIS
      MEMORANDUM OF LEASE AND OPTION TO PURCHASE is
      made
      as of the _____ day of ______, 2006, by and between TKC
      XCIX, LLC, a
      North
      Carolina limited liability company, having an office and place of business
      at
      5935 Carnegie Boulevard, Suite 200, Charlotte, North Carolina 28209 (the
“Landlord”), and BIG
      DOG HOLDINGS, INC.,
      a
      Delaware corporation (the “Tenant”).

    

    W I T N E S S E T H:

     

    WHEREAS,
      Landlord
      is the owner of certain real property located in Lincoln County, North Carolina,
      more fully described on Exhibit
      A
      attached
      hereto and made a part hereof (the “Demised Premises”); and

    

    WHEREAS,
      Landlord
      and Tenant have entered into that certain Lease Agreement (the “Lease”) dated as
      of ________________ ____, 2006 for the lease of the Demised Premises on terms
      more fully set forth therein; and

    

    WHEREAS,
      the
      parties hereto desire to execute and record a Memorandum of the Lease.

    NOW,
      THEREFORE,
      the
      parties hereto, intending to be legally bound hereby, hereby agree as
      follows:

     

    1.   Tenant.
      The
      name of Tenant is [_________________].

     

    2.   Landlord.
      The
      name of Landlord is _______________________.

     

    3.   Addresses.
      Tenant’s address is _____________________________________, Attention:
      _______________________________.

     

    4.   Date
      of Lease.
      The
      Lease is dated as of ________, 2006.

     

    5.   Demised
      Premises.
      The
      property that is the subject of the Lease is more fully described on
Exhibit
      A
      attached
      hereto and made a part hereof.

     

    6.   Term.
      The
      term of the Lease shall be for a maximum of thirty (30) years (including renewal
      options), subject to prior termination provisions which are set forth in the
      Lease, commencing on _____________________________________, as may be extended
      by Force Majeure or certain delays in construction caused by Tenant.

     

    7.   Purchase
      Option.
      In
      accordance with Section 19.24 of the Lease, Tenant has a right to purchase
      the
      Demised Premises, such option to be exercised on or before the 54th
      month of
      the initial 10 year lease term with the closing of such sale and purchase to
      close on or before the 60th
      month of
      the initial 10 year lease term.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.   Incorporation
      by Reference.
      All
      provisions of the Lease are hereby incorporated by reference.

     

    IN
      WITNESS WHEREOF,
      the
      parties have caused this Memorandum to be executed as of the _______ day of
      __________, 2006.

     

    
      	 	
              LANDLORD:

            
	 	 	 	 
	 	
              TKC
                XCIX, LLC,

            
	 	
              a
                North Carolina limited liability company

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 
	 	 	
              Kenneth
                R. Beuley, Authorized Member

            
	 	 	 	 
	 	 	 	 
	 	
              TENANT:

            
	 	 	 	 
	 	
              BIG
                DOG HOLDINGS, INC.,

            
	 	
              a
                Delaware corporation

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 
	 	 	
               

            	
              President

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STATE
      OF
      NORTH CAROLINA

    

    COUNTY
      OF
      MECKLENBURG

     

    I,
      ____________________________, a Notary Public for said County and State, do
      hereby certify that Kenneth R. Beuley, Member of TKC XCIX, LLC, a North Carolina
      limited liability company, personally appeared before me this day and
      acknowledged the due execution of the foregoing instrument on behalf of said
      limited liability company.

    Witness
      my hand and official stamp or seal, this ____ day of _________________,
      2006.

    _______________________________

    Notary
      Public

     

    My
      Commission Expires:

     

    ____________________

     

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STATE
      OF
      _____________________

     

    COUNTY
      OF
      ___________________

     

    I,
      ____________________________, a Notary Public for said County and State, do
      hereby certify that ___________________________________,
      ________________________ of ______________________, a __________________
      corporation, personally appeared before me this day and acknowledged the due
      execution of the foregoing instrument on behalf of said
      corporation.

    Witness
      my hand and official stamp or seal, this ____ day of _________________,
      2006.

    _______________________________

    Notary
      Public

    

     

    My
      Commission Expires:

     

    ____________________

     

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A TO MEMORANDUM OF LEASE

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      D

    

    Permitted
      Encumbrances

     

    
      	 	
              1.

            	
              Ad
                valorem tax for the year 2006 and subsequent
                years.

            

    

    

    
      	 	
              2.

            	
              Lincoln
                County Industrial Park Declaration of Covenants, Conditions and
                Restrictions recorded in Book 1211, Page 356, Lincoln County
                Registry.

            

    

    

    
      	 	
              3.

            	
              Sixty-eight
                (68) foot Duke Power Company right of way as shown on plat recorded
                in
                Plat Book G, Page 415, Lincoln County Registry. (Tracts One and Three
                only)

            

    

    

    
      	 	
              4.

            	
              Right(s)
                of way to Rutherford Electric Membership Corporation recorded in
                Book 663,
                Page 750, Lincoln County Registry (Tracts One and Two
                only).

            

    

    

    
      	 	
              5.

            	
              Right(s)
                of way to Rutherford Electric Membership Corporation recorded in
                Book 307,
                Page 187 and Book 307, Page 211, Lincoln County Registry. (Tract
                Three
                only)

            

    

    

    
      	 	
              6.

            	
              Riparian
                rights of others in and to the waters of the creek forming the southern
                boundary line of Tract Three, and to the uninterrupted flow of the
                waters
                thereof.

            

    

    

    
      	 	
              7.

            	
              All
                matters and facts that would be disclosed by a current and accurate
                survey
                and inspection of the premises.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      E

     

    Site
      Plan

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      F

     

    Form
      of
      SNDA

     

    SUBORDINATION,
      NON-DISTURBANCE
      AND ATTORNMENT AGREEMENT

    

    

    This
      SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (hereafter referred
      to
      as "Agreement") made ___________________, 2006, by and between
      _____________________________________, a ______________________________________,
      whose address is _______________________________________________________
      ("Bank"), and BIG DOG HOLDINGS, INC., a Delaware corporation, whose address
      is
      15614 Shoemaker Avenue, Santa Fe Springs, California 90670, Attention: John
      Wood, Senior Vice President (“Tenant"). 

    

    As
      security for a loan made by Bank, TKC XCIX, LLC ("Landlord") has given to Bank
      a
      Deed of Trust dated ____________________, 2006, which has been or is about
      to be
      recorded in the public records of the County of Lincoln, State of North
      Carolina, (the "Security Instrument"), and constitutes a first lien against
      the
      real property described on Exhibit "A" attached hereto (the
      "Property").

    

    Tenant
      has entered into a lease dated ___________________________ (the "Lease")
      covering all or a portion of the Property (the "Leased Premises"). As a
      condition of making the loan, Bank has required that the Lease be subordinated
      to the Security Instrument and that Tenant agree to attorn to the purchaser
      of
      the Property in the event of foreclosure of the Security Instrument, or to
      Bank
      prior to foreclosure in the event Bank elects to collect the rents and other
      sums due and becoming due under the Lease, and Tenant is willing to so attorn
      if
      Bank will recognize Tenant's rights under the Lease as hereinafter
      provided.

    

    Relying
      on the covenants, agreements, representations and warranties contained in this
      Agreement, Bank and Tenant agree as follows:

    

    Subordination
      of Lease.
      The
      Lease is and shall be subject and subordinate to the provisions and lien of
      the
      Security Instrument and to all renewals, modifications, consolidations,
      replacements and extensions thereof, to the full extent of the principal amount
      and other sums secured thereby and interest thereon, as if the Lease had been
      executed and delivered after the execution, delivery and recording of the
      Security Instrument.

    

    Attornment.
      Tenant
      agrees that, subject to the provisions herein, Tenant will attorn to and
      recognize: (i) Bank, whether as mortgagee in possession or otherwise; or (ii)
      any purchaser at a foreclosure sale under the Security Instrument, or any
      transferee who acquires possession of or title to the Property, or any
      successors and assigns of such purchasers and/or transferees (each, a
      "Successor"), as its landlord for the unexpired balance (and any extensions,
      if
      exercised) of the term of the Lease upon the terms and conditions set forth
      therein. Such attornment shall be effective and self-operative without the
      execution of any further instruments by any party hereto; provided, however,
      that Tenant will, upon request by Bank or any Successor, execute a written
      agreement attorning to Bank or such Successor.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Non-Disturbance.
      So long
      as Tenant complies with Tenant's obligations under this Agreement and is not
      in
      default under the Lease, beyond any applicable grace or cure period, Bank and
      any other successor, as defined herein, will not disturb Tenant's use,
      possession and enjoyment of the Leased Premises nor will Tenant's rights under
      the Lease be impaired (except as provided in paragraph entitled Tenant's
      Agreement, below) in any foreclosure action, sale under a power of sale,
      transfer in lieu of the foregoing, or the exercise of any other remedy pursuant
      to the Security Instrument.

    

    Assignment
      of Leases.
      Tenant
      consents to the Security Instrument and that certain Absolute Assignment of
      Lessor's Interest in Leases and Rents from Landlord to Bank dated of even date
      with the Security Instrument (the "Assignment"). Tenant agrees that if Bank,
      pursuant to the Security Instrument and/or Assignment, and whether or not it
      becomes a mortgagee in possession, shall give notice to Tenant that Bank has
      elected to require Tenant to pay to Bank the rent and other charges payable
      by
      Tenant under the Lease, Tenant shall, until Bank shall have canceled such
      election, thereafter pay to Bank all rent and other sums payable under the
      Lease. Any such payment shall be made notwithstanding any right of setoff,
      defense or counterclaim which Tenant may have (as of the date of such Bank
      notice) against Landlord, or any right to terminate the Lease.

    

    Limitation
      of Liability.
      In the
      event that Bank succeeds to the interest of Landlord under the Lease, or title
      to the Property, then Bank and any Successor shall assume and be bound by the
      obligations of the landlord under the Lease which accrue from and after such
      party's succession to any prior landlord's interest in the Leased Premises,
      but
      Bank and such Successor shall not be: (i) liable for any act or omission of
      any
      prior landlord; (ii) liable for the retention, application or return of any
      security deposit to the extent not paid over to Bank; (iii) subject to any
      offsets or defenses which Tenant might have against any prior landlord, except
      with respect to a continuing Landlord default of which Bank or successor has
      received notice of in accordance with the terms hereof and has failed to cure;
      (iv) bound by any rent or additional rent which Tenant might have paid for
      more
      than the current month to any prior landlord; or (v) bound by any amendment
      or
      modification of the Lease made without Bank's or such Successor's prior written
      consent. Nothing in this section shall be deemed to waive any of Tenant's rights
      and remedies against any prior landlord. Notwithstanding anything to the
      contrary herein, Bank and Successor shall be liable to Tenant for any
      outstanding amount due to Tenant under the Lease pursuant to Sections 3.1(c)
      Liquidated Damages and 9.1(c) (Maintenance and Repairs). 

    

    Tenant
      agrees that any person or entity which at any time hereafter becomes the
      landlord under the Lease, including without limitation, Bank or any Successor,
      shall be liable only for the performance of the obligations of the landlord
      which arise during the period of its or their ownership of the Leased Premises
      and shall not be liable for any obligations of the landlord under the Lease
      which arise prior to or subsequent to such ownership, except as provided herein.
      Tenant further agrees that any such liability shall be limited to the interest
      of Bank or such Successor in the Property.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Right
      to Cure Defaults.
      Tenant
      agrees to give notice to Bank of any default by Landlord under the Lease,
      specifying the nature of such default, and thereupon Bank shall have the right
      (but not the obligation) to cure such default, and Tenant shall not terminate
      the Lease or abate the rent payable thereunder by reason of such default until
      it has afforded Bank thirty (30) days after Bank's receipt of such notice to
      cure such default and a reasonable period of time in addition thereto (i) if
      the
      circumstances are such that said default cannot reasonably be cured within
      said
      thirty (30) day period and Bank has commenced and is diligently pursuing such
      cure, but no later than ninety (90) days after receipt of such notice, or (ii)
      during and after any litigation action including foreclosure, bankruptcy,
      possessory action or a combination thereof.

    

    Tenant's
      Agreements.
      Tenant
      hereby covenants and agrees that: (i) Tenant shall not pay any rent under the
      Lease more than one month in advance; (ii) Tenant shall not amend, modify,
      cancel or terminate the Lease without Bank’s prior written consent, and any
      attempted amendment, modification, cancellation or termination of the Lease
      without such consent shall be of no force or effect as to Bank; (iii) Tenant
      shall not subordinate the Lease to any lien or encumbrance (other than the
      Security Instrument) without Bank's prior written consent; (iv) Tenant shall
      not
      assign the Lease or sublet all or any portion of the Leased Premises (except
      as
      permitted by the terms of the Lease) without Bank's prior written consent,
      not
      to be unreasonably withheld; (v) Tenant shall promptly deliver to Bank, from
      time to time, a written statement in form and substance satisfactory to Bank
      certifying to certain matters relating to the Lease; and (vi) this Agreement
      satisfies any requirement in the Lease relating to the granting of a
      non-disturbance agreement.

    

    Miscellaneous.
      (i) The
      provisions hereof shall be binding upon and inure to the benefit of Tenant
      and
      Bank and their respective successors and assigns; (ii) Any demands or requests
      shall be sufficiently given Tenant if in writing and mailed or delivered to
      the
      address of Tenant shown above, or such other address as Tenant may specify
      in
      writing from time to time and to Bank if in writing and mailed or delivered
      to
      _________________________________________________
      _____________________________________________________________________________,
      or such other address as Bank may specify in writing from time to time. Notices
      to Bank must include the mail code; (iii) The Agreement may not be changed,
      terminated or modified orally or in any manner other than by an instrument
      in
      writing signed by the parties hereto; (iv) The captions or headings at the
      beginning of each paragraph hereof are for the convenience of the parties and
      are not part of this Agreement; (v) This Agreement shall be governed by and
      construed under the laws of the jurisdiction where the Security Instrument
      is
      recorded.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have signed and sealed this instrument
      as of
      the day and year first above written.

     

    
      	 	
              Tenant

            
	 	 	 
	 	
              BIG
                DOG HOLDINGS, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
              Bank

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
              By:
                

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    State
      of
      ___________________

    County
      of
      _________________

     

    Corporate
      Acknowledgment

     

    I,
      ___________________, Notary Public, certify that ________________________ (Name)
      personally came before me this day and acknowledged that he/she is
      ____________________ (Title) of BIG DOG HOLDINGS, INC., a Delaware corporation,
      and that he/she, as ____________________ (Title) being authorized to do so,
      executed the foregoing on behalf of the corporation.

    

    Witness
      my hand and official seal, this the _____ day of __________, 2006.

    

    My
      commission expires:                 ____________________________________

    ___________________            Notary
      Public

    

    [Notarial
      Seal]

    

    
 

    State
      of
      ____________________

    County
      of
      __________________

     

    Bank
      Acknowledgment

     

     

    I,
      ________________________, Notary Public, certify that ______________ personally
      came before me this day and acknowledged that he/she is ____________________
      President of _____________________________________, a
      ______________________________________, and that he/she, as ____________________
      President being authorized to do so, executed the foregoing on behalf of the
      corporation.

    

    Witness
      my hand and official seal, this the _____ day of __________, 2006.

    

    My
      commission expires: 

            _____________________________

    __________

    ___________________      
Notary
      Public

    

    [Notarial
      Seal]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Clerk's
      Certificate

    

    The
      forgoing certificate(s) of ____________________________________ is certified
      to
      be correct. This instrument and this certificate are duly registered at the
      date
      and time and in the book and page shown on the first page hereof.

    

    ___________________________
      REGISTER OF DEEDS FOR ___________________ 

    COUNTY

    

    

    By
      _______________________________________

    Deputy/Assistant-Register
      of Deeds

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A 

    to
      SNDA

    

    

    LEGAL
      DESCRIPTION

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]