Document:

EXHIBIT 4.2

No. of Stock Units: 55,188                                Warrant No. JSCS-1
                                            (Junior Secured Creditors Stock)

                                     WARRANT
                           TO PURCHASE COMMON STOCK OF
                             BIG DOG HOLDINGS, INC.
                               Dated March 3, 2004
                           (Void after June 30, 2004)

                  THIS IS TO CERTIFY THAT Retail & Restaurant  Growth  Capital,
L.P.,  or registered  assigns,  is entitled to purchase from Big Dog Holdings,
Inc., a Delaware  corporation  (the  "Company"),  at any time and from time to
time after  March 3, 2004 (the  "Initial  Exercisability  Date"),  but not
later  than 5:00  p.m.,  Pacific Standard  time,  on June 30, 2004 (the
"Expiration  Date"),  55,188 Stock  Units,  in whole or in part in integral
units, at a purchase price per Stock Unit of $4.35, all on the terms and
conditions hereinbelow.

                  This Warrant is issued by the Company  pursuant to the Second
Amended Plan of  Reorganization  of The Walking  Company  and Alan's  Shoes,
Inc.  (collectively,  the  "Debtors")  in  connection  with the  Debtors'
Bankruptcy  Case in the  United  States  Bankruptcy  Court for the  Central
District  of  California  (Case No. SV 03-15880-GM).

                  Section  1.  Certain  Definitions. As  used  in  this
 Warrant,  unless  the  context  otherwise requires:

                  "Board of  Directors"  shall  mean  either  the board of
directors  of the  Company  or any duly authorized committee of that board.

                  "Business  Day" shall mean any day other than a  Saturday,
Sunday or a day on which banks in the State of California are required or
permitted to close.

                  "Common  Stock" shall mean the  Company's  authorized
common  stock,  par value $0.01 per share, irrespective  of class  unless
otherwise  specified,  as  constituted  on the date of  original  issuance  of
this Warrant,  and any stock into which such Common Stock may  thereafter  be
changed,  and shall also include  stock of the Company of any other class,
which is not  preferred as to dividends or assets over any other class of
stock of the Company, issued to the holders of shares of the Company's stock
upon any reclassification thereof.

                  "Exercise  Price" shall mean the purchase  price per Stock
Unit as set forth on the first page of this  Warrant  on the  Issuance  Date
and  thereafter  shall  mean  such  dollar  amount as shall  result  from the
adjustments specified in Section 4.

                  "Holder" means,  initially,  Retail & Restaurant Growth
Capital,  L.P., and thereafter any Person that is or Persons that are the
registered holder(s) of this Warrant as registered on the books of the Company.

                  "Issuance Date" shall mean March 3, 2004, the date of
issuance of this Warrant.

                  "Person" shall include a natural person, limited partnership,
a corporation,  an association,  a partnership,  a limited liability company,
a trust or estate, a government,  foreign or domestic, and any agency or
political subdivision thereof, or any other entity.

                  "Stock Unit" shall  constitute  one share of Common Stock,
as such Common Stock was  constituted on the date hereof and thereafter  shall
constitute  such number of shares  (including  any fractional  shares) of
Common Stock as shall result from the adjustments specified in Section 4.

                  "Total  Exercise  Price" shall mean the product of the
Exercise  Price times the number of Stock Units to be purchased by the holder
of this Warrant upon the exercise thereof.

                  "Warrant"  shall mean this  Warrant to  purchase  up to
55,188  Stock  Units as set forth  herein initially issued to Retail &
Restaurant  Growth Capital,  L.P., and all Warrants issued upon transfer,
division or combination of, or in substitution therefor.

                  "Warrant  Stock" shall mean the shares of Common Stock
purchasable by the holder of this Warrant upon the exercise thereof.

                  Section 2.  Exercise  of  Warrant.  The Holder of this
Warrant  may,  one time only on and after the Initial  Exercisability  Date,
but not later than the  Expiration  Date,  exercise this Warrant in whole or in
part for the  integral  number of Stock  Units  which such  holder is then
entitled  to  purchase  hereunder.  The exercise procedures for this Warrant
are as follows:

                  (a)      The Holder  shall  deliver to the Company at its
office  maintained  pursuant to Section 11 for such purpose (i) an Exercise
Notice in the form attached as Exhibit A, duly completed and signed,  (ii) the
original of this Warrant and (iii) the  Total  Exercise Price  therefor,
which shall be payable solely by delivery of the consideration described in
paragraph(b) below.

                  (b)      The Total  Exercise  Price  shall be payable
only by  delivery  of all of the  Holder's shares of common stock of TWC
Acquisition Corp., a Delaware  corporation,  which for purposes of this
Warrant shall be valued at $64.50 per share,  together  with undated  stock
powers duly  executed in blank,  or the cash proceeds
thereof.

                  The Company  shall  within 20 days of its receipt of a
conforming  Exercise  Notice  cause to be issued in the name of and  delivered
to such Holder,  or as the Holder may direct,  a certificate  or  certificates
representing  the aggregate  number of duly  authorized,  validly issued,
fully-paid and  nonassessable  shares of Common Stock issuable upon such
exercise.

                  The  stock  certificate  or  certificates  for  Warrant
Stock  so  delivered  shall  be in  such denominations  as may be specified
in said notice and shall be  registered in the name of such Holder or such other
name or names as shall be designated  in said notice.  Such  certificate  or
certificates  shall be deemed to have been issued and such Holder or any other
Person so  designated  to be named  therein shall be deemed to have become
a holder of record of such  shares,  with,  to the extent  permitted  by law,
the right to vote such  shares or to consent  or to  receive  notice  as a
stockholder,  as of the time said  notice is  delivered  to the  Company  as
aforesaid.

                  The Company  shall pay all expenses  and stock  transfer
taxes  payable in  connection  with the preparation, issuance and delivery of
stock certificates under this Section 2.

                  All shares of Common Stock  issuable upon the exercise of
this Warrant shall be duly  authorized, validly issued, fully paid and
nonassessable, and free from all liens and other encumbrances thereon.

                  The  Company  shall not issue  certificates  for
fractional  shares  of  Common  Stock  upon any exercise of this Warrant
whenever,  in order to implement the  provisions  of this  Warrant,
the issuance of such fractional  shares is required.  Instead,  the Company
shall pay cash in lieu of such  fractional  shares upon such exercise.

                  Section 3.  Transfer,  Division  and  Combination.  This
Warrant  and all rights  hereunder  are transferable,  in whole but not in part,
on the books of the  Company  to be  maintained  for such  purpose,  upon
surrender  of this  Warrant at the office of the  Company  maintained
for such  purpose  pursuant  to Section  11, together  with (a) a written
assignment in the form set out at the end of this Warrant duly executed by the
Holder hereof or its agent or attorney and (b) payment of funds  sufficient to
pay any stock  transfer  taxes payable upon the making of such transfer.  Upon
such surrender,  execution and payment,  the Company shall execute and deliver
a new  Warrant  in the name of the  assignee,  and this  Warrant  shall
promptly  be  canceled.  If this  Warrant is assigned in blank,  the Company
may (but shall not be obliged to) treat the bearer hereof as the absolute
owner of this Warrant for all purposes and the Company  shall not be affected
by any notice to the  contrary.  This Warrant, if properly  assigned in
compliance  with this  Section 3, may be  exercised  by an assignee  for the
purchase of shares of Common Stock without having a new Warrant issued.

                  The Company shall pay all expenses  other than stock
transfer  taxes  incurred by the Company in the  performance of its
obligations in connection  with the  preparation,  issuance and delivery of
Warrants under this Section 3.

                  The Company agrees to maintain at its aforesaid  office books
for the  registration  and transfer of the Warrants.

                  Section 4.  Adjustment  of Stock Unit or  Exercise  Price.
The number of shares of Common  Stock comprising a Stock Unit,  and the
Exercise Price per Stock Unit,  shall be subject to adjustment  from time to
time as set forth in this Section 4 and in Section 5.

                  4.1. Stock  Dividends,  Subdivisions and  Combinations.
In case at any time or from time to time the Company shall:

                  (a) take a record of the  holders  of its  Common  Stock
for the  purpose  of  entitling  them to receive a dividend payable in, or
other distribution of, Common Stock, or

                  (b)  subdivide  its  outstanding  shares of Common Stock
into a larger number of shares of Common Stock, or

                  (c)  combine its  outstanding  shares of Common  Stock into
a smaller  number of shares of Common Stock,

then the number of shares of Common  Stock  comprising  a Stock Unit
immediately  after the  happening of any such event  shall be  adjusted
so as to consist of the number of shares of Common  Stock  which a record
holder of the number of shares of Common Stock  comprising a Stock Unit
immediately  prior to the  happening of such event would own or be entitled to
receive after the happening of such event.

                  4.2. Other  Provisions  Applicable to Adjustments.  The
following  provisions shall be applicable to the  adjustment  of the number of
shares of Common Stock  comprising a Stock Unit  hereinbefore  provided for in
this Section 4:

                  (a)  When  Adjustments  to Be  Made.  The  adjustments
required  by  Section  4.1  shall be made whenever  and as often as any
specified  event  requiring  an  adjustment  shall  occur.  For the  purpose
of any adjustment,  any  specified  event  shall be deemed to have
occurred  at the close of  business on the date of its occurrence.

                  (b) Fractional  Interests.  In computing  adjustments under
this Section 4, fractional  interests in Common Stock shall be taken into
account to the nearest one-thousandth of a share.

                  (c) When  Adjustment  Not  Required.  If the  Company
shall take a record of the  holders of its Common Stock for the purpose of
entitling  them to receive a dividend or  distribution  and shall,  thereafter
and before  the  distribution  thereof  to  shareholders,  abandon  its
plan  to  pay  or  deliver  such  dividend  or distribution,  then thereafter
no adjustment  shall be required by reason of the taking of such record and
any such adjustment previously made in respect thereof shall be rescinded and
annulled.

                  4.3.  Merger,  Consolidation,  Etc. In case the Company shall
(a) merge into or consolidate  with another  Person and shall not be the
continuing  or surviving  Person of such merger or  consolidation,  (b) shall
permit any other Person to merge into or  consolidate  with the Company and the
Company shall be the  continuing or surviving Person,  but, in connection with
such merger or consolidation,  the Common Stock shall be changed into or
exchanged  for stock or other  securities  of any other Person or cash or any
other any other  property,  (c) shall sell,  transfer or otherwise  dispose of
all or  substantially  all of its property,  assets or business to another
Person or (d) effect a capital  reorganization  or  reclassification  of the
Common  Stock  (other  than a capital reorganization  or  reclassification  for
which an adjustment is provided by Section 4.1) and pursuant to the terms
of such merger, consolidation,  disposition, capital reorganization or
reclassification,  shares of common stock of a  successor  or  acquiring
Person are to be  received by or  distributed  to the  holders of Common
Stock of the Company,  then each holder of a Warrant shall have the right
thereafter to receive,  upon exercise of such Warrant, Stock Units each
comprising the number of shares of common stock of such successor or acquiring
Person  receivable upon or as a result of such merger,  consolidation,
disposition,  capital  reorganization or reclassification by a holder of the
number of shares of Common  Stock  comprising  a Stock Unit  immediately
prior to such  event.  If,pursuant to the terms of such merger, consolidation,
disposition, capital reorganization or reclassification,  any cash,  shares of
stock,  other  securities  or property or warrants  or other  subscription  or
purchase  rights or property  of any nature  whatsoever  are to be  received
by or  distributed  to the holders of Common  Stock of the Company,  then, at
the Holder's  option,  either  (i)there shall be a reduction of the Exercise
Price equal to the amount  applicable  to the number of shares of Common  Stock
then  comprising  a Stock Unit of any such cash and of the fair  value of any
and all such  shares  of stock or of other  securities  or  property  to be
received  by or distributed  to the holders of Common  Stock of the  Company,
or (ii) such Holder shall have the right to receive,
upon  exercise  of its  Warrant,  such cash,  shares of stock or other
securities  or  property of any nature as a holder of the number of shares of
Common  Stock  underlying  a Stock Unit would have been  entitled to receive
upon the  occurrence  of such event.  Such fair value shall be determined in
good faith by the Board of Directors of the Company. In case of any such merger,
consolidation,  disposition,  capital reorganization or reclassification,  the
successor or acquiring  Person shall expressly  assume the due and punctual
observance and performance of each and every  covenant  and  condition  of this
Warrant  to be  performed  and  observed  by the  Company  and all of the
obligations  and  liabilities  hereunder,  subject  to such  modification  as
shall be  necessary  to  provide  for adjustments of Stock Units which shall be
as nearly  equivalent as practicable to the  adjustments  provided for in
this Section 4. For the  purposes of this Section 4 "common  stock of the
successor  or  acquiring  Person"  shall include  stock of such  corporation
of any class,  that is not  preferred as to dividends or assets over any other
class of stock of such  corporation and that is not subject to redemption,  and
shall also include any evidences of indebtedness,  shares of stock or other
securities  which are convertible into or exchangeable for any such stock,
either  immediately  or upon the  arrival of a  specified  date or the
happening  of a  specified  event,  and any warrants or other rights to
subscribe  for or purchase any such stock.  The  foregoing  provisions  of
this Section 4.3  shall  similarly  apply to  successive  mergers,
consolidations,  dispositions,  capital  reorganizations  or reclassifications.

                  4.4 No  Impairment.  The Company will not, by amendment of
its  certificate of  incorporation  or through a consolidation,  merger,
reorganization,  transfer of assets, dissolution, issue or sale of securities or
any other  voluntary  action,  avoid or seek to avoid the  observance  or
performance  of any of the terms of this Warrant,  but will at all times in
good  faith  assist in the  carrying  out of all such terms and in the taking of
all such action as may be  necessary  or  appropriate  in order to protect the
rights of the Holder of this Warrant against  impairment.  Without  limiting
the generality of the foregoing,  the Company will not permit the par value
of any shares of stock  receivable  upon the exercise of this Warrant to exceed
the amount  payable  therefor  upon such  exercise,  (b) will take all such
action as may be  necessary  or  appropriate  in order that the Company may
validly and legally  issue fully paid and  nonassessable  shares of stock on
the exercise of the Warrants from time to time  outstanding,  and (c) will not
take any action that results in any adjustment of the Exercise Price if the
total  number of shares of Common Stock (or other  securities)  issuable
after the action upon  exercise of all of the Warrants would exceed the total
number of shares of Common Stock (or other  securities)  then authorized by the
Company's certificate of incorporation and available for the purpose of issue
upon such exercise.

                  Section 5. Notice to Warrant  Holders of  Adjustment  of
Stock Unit or Exercise  Price.  Whenever the number of shares of Common Stock
comprising a Stock Unit,  or the price at which a Stock Unit may be purchased
upon  exercise of the  Warrants,  shall be adjusted  pursuant to Section 4, the
Company  shall  forthwith  issue a notice  setting  forth,  in reasonable
detail,  the event  requiring the  adjustment  and the method by which such
adjustment  was  calculated  (including a statement of the fair value,  as
determined by the Board of Directors of the Company,  of any evidences of
indebtedness,  shares of stock, other securities or property or warrants or
other subscription  or purchase  rights or property of any nature  whatsoever
referred to in Section 4.3) and specifying the number of shares of Common Stock
comprising a Stock Unit and (if such  adjustment was made pursuant to Section
4.3)  describing  the number and kind of any other shares of stock  comprising
a Stock Unit,  and any change in the purchase price or prices  thereof,  after
giving effect to such  adjustment or change.  The Company shall within 30
days after the making of such adjustment send such notice to the Holder in
accordance with Section 12.

                  Section  6.  Reservation  and  Authorization  of Common
Stock.  The  Company  shall at all times reserve and keep  available  solely
for issuance  upon the exercise of Warrants such number of its  authorized  but
unissued  shares of Common Stock as will be sufficient  to permit the exercise
in full of this Warrant.  All shares of Common Stock which shall be so issuable,
when issued upon  exercise of this Warrant or upon such  exercise,  as
the case may be, shall be duly and validly authorized and issued, fully-paid
and nonassessable.

                  Section 7.  Taking of Record;  Stock and Warrant  Transfer
Books.  In the case of all  dividends or other  distributions  by the Company
to the holders of its Common Stock with  respect to which any  provision of
Section 4 which  refers to the taking of a record of such  holders,  the
Company  will in each such case take such record as of the close of business on
a Business  Day. The Company will not at any time,  except upon  dissolution,
liquidation  or winding up or as  otherwise  may be  required  by law,  close
its stock  transfer  books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.

                  Section 8. Limitation of Liability.  No provision  hereof,
in the absence of affirmative  action by the Holder to purchase  shares of
Common Stock,  and no mere  enumeration  herein of the rights or privileges of
the Holder,  shall give rise to any  liability  of the Holder for the purchase
price of the Warrant  Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.

                  Section 9. Loss or  Destruction  of Warrant  Certificates.
Upon  receipt of evidence  reasonably satisfactory  to the Company of the loss,
theft,  destruction or mutilation of any Warrant and, in the case of any
such loss,  theft or  destruction,  upon receipt of indemnity or security in an
amount  reasonably  satisfactory to the Company (the original Holder's or any
other  institutional  Holder's indemnity being satisfactory  indemnity in
the event of loss,  theft or destruction  of any Warrant owned by such
institutional  Holder),  or, in the case of any such mutilation,  upon
surrender and cancellation of such Warrant,  the Company will at its own
expense execute and  deliver,  in lieu of such lost,  stolen,  destroyed  or
mutilated  Warrant,  a new  Warrant of like tenor and
representing the right to purchase the same aggregate number of shares of
Warrant Stock.

                  Section 10.  Amendments.  The terms of this  Warrant may be
amended,  and the  observance  of any term therein may be waived, but only
with the written consent of the Holder.

                  Section 11.  Office of the Company.  So long as this  Warrant
remains  outstanding,  the Company shall maintain an office where the Warrant
may be presented for exercise,  transfer,  division or combination as in
this  Warrant  provided.  Such  office  shall be at Big Dog  Holdings,  Inc.,
121 Gray  Avenue,  Suite 300,  Santa Barbara,  California 93101,  Attention:
General Counsel,  Fax: (805) 962-9460,  unless and until the Company shall
designate and maintain some other office for such purposes and deliver written
notice thereof to the Holder.

                  Section 12.  Notices Generally.

                  12.1.  All  communications  (including  all  required  or
permitted  notices)  pursuant  to  the provisions hereof shall be in writing
and shall be sent, to any registered  Holder of this Warrant,  to the address
of such  Holder as it  appears  in the stock or warrant  ledger of the Company
or at such  other  address as such Holder may have furnished in writing to the
Company.

                  12.2.  Any  notice  shall be deemed  to have  been duly
delivered  when  delivered  by hand,  if personally  delivered,  and if sent
by mail to a party whose  address is in the same  country as the  sender,  five
Business  Days  after  being  deposited  in the mail,  postage  prepaid,  and
if sent by  recognized  international courier,  freight prepaid,  with a copy
sent by telecopier,  to a party whose address is not in the same country as
the sender, three Business Days after the later of (a) being telecopied and
(b) delivery to such courier.

                  Section 13.  Governing  Law. This Warrant  shall be
governed by and construed in accordance  with the laws of the State of
California (without regard to the conflicts of laws provisions thereof).

                  IN WITNESS  WHEREOF,  the Company has caused this  Warrant to
be executed in its name by its duly
authorized officer.

Dated as of:      March 3, 2004

                                            BIG DOG HOLDINGS, INC.,
                                            a Delaware corporation

                                            By /s/ Andrew D. Feshbach
                                               ----------------------
                                            Title: President

<PAGE>

                                    EXHIBIT A

                                 EXERCISE NOTICE
                               Warrant No. JSCS-1

To Big Dog Holdings, Inc.:

                  The  undersigned  registered  owner of this Warrant to
Purchase Common Stock of Big Dog Holdings, Inc. dated  March 3,  2004
(this  "Warrant")  irrevocably  exercises this Warrant for and purchases
________ Stock Units of Big Dog  Holdings,  Inc.,  a Delaware  corporation,
purchasable  with this  Warrant,  and hereby  tenders _____________  shares
of TWC Acquisition Corp. common stock as payment therefor,  all at the price
and on the terms and  conditions   specified  in this Warrant and requests
that  certificates  for the shares of Common Stock hereby purchased be issued
in the name of and delivered to _________________________ whose address is_____
_________________________________________.
..

                  The  undersigned   registered  owner  of  this  Warrant
hereby  certifies  that  it  is  not  an "underwriter" as that term is
defined in Section 1145(b) of the United States  Bankruptcy Code, and
indemnifies and holds Big Dog Holdings,  Inc.  harmless against any
liability,  loss or expenses  (including,  without  limitation, reasonable
attorneys' fees) incurred or suffered by it arising  out of the inaccuracy
of this certification.

                  Capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in this Warrant.

Dated:______________, 2004                    RETAIL & RESTAURANT GROWTH
                                              CAPITAL, L.P.

                                              By________________________
                                              Title:____________________

<PAGE>

                                    EXHIBIT B

                                 ASSIGNMENT FORM

                  FOR VALUE RECEIVED the  undersigned  registered  owner of
this Warrant hereby sells,  assigns and transfers unto the Assignee named
below all of the rights of the undersigned under this Warrant:

                          Name and Address of Assignee
                          ----------------------------

and does hereby irrevocably constitute and appoint____________________Attorney
to make sure  transfer  occurs on the books of Big Dog  Holdings,  Inc.,
a Delaware  corporation,  maintained  for the purpose, with full power of
substitution in the premises.

Dated:

___________________________
         Signature

___________________________
          Witness

NOTICE: The signature to the assignment  must  correspond with the name as
        written upon the face of the Warrant in every particular instance,
        without alteration or enlargement or any change whatsoever.

        The signature to this  assignment  must be guaranteed by a bank or
trust company having an office or correspondent in New York, New York or by a
firm having membership on the New York Stock Exchange.

<PAGE>

                                    SCHEDULE

The following persons received substantially identical Warrants for the number
of Stock Units set forth opposite their names:
<TABLE>

           ----------------------------------------------------------- -----------------------
                                      NAME                                  STOCK UNITS
                                      <S>                                    <C>
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Stratford Capital Partners, L.P.                                    55,188
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Provender Opportunities Fund, L.P.                                  3,262
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Cornerstone Equity Investors IV, L.P.                               11,194
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Jim Argyropolous                                                    10,349
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Harry Adler                                                         1,497
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Greg Milne                                                           148
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Dan Zukerman                                                         148
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Steve Nessim                                                         148
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Pinney Family Trust                                                  311
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Appleton Family Trust                                                252
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Robert Taicher                                                       682
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Giles Bateman                                                        118
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Herbert Simon                                                       3,914
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Montesano Family Trust                                              3,914
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Perlman Family Trust                                                1,304
           ----------------------------------------------------------- -----------------------
           ----------------------------------------------------------- -----------------------
           Trent and Merilyn Merrill Trust dated 1/29/90                        652
           ----------------------------------------------------------- -----------------------
</TABLE>EXHIBIT 4.1

       Big Dog Holdings, Inc. - $3,000,000 Revolving Note - March 1, 2004
                            REVOLVING PROMISSORY NOTE
                            VARIABLE RATE OF INTEREST

$3,000,000.00                                            March 1, 2004

FOR VALUE  RECEIVED,  the  undersigned  unconditionally  promises  to pay on
March 1, 2006,  to the order of ISRAEL DISCOUNT  BANK OF NEW YORK
(hereinafter  the "Bank"),  at the Bank's  office at 9401 Wilshire  Blvd.,
Suite 600, Beverly  Hills,  California  90212,  or at any other place
designated in writing by the  undersigned  hereof,  the principal  amount of
Three Million  Dollar and No Cents  (US$3,000,000.00)  or, so much thereof as
is advanced (the "Advances")  and remains  outstanding  hereunder on the date
due,  together with interest  thereon at the times and rates  specified
herein.  All advances and payments made in connection with this Note may
be recorded from time to time by the Bank on the reverse side hereof,  on an
attachment  hereto or in its general  business  records.  Each such record of
any advance  hereunder  shall be  presumptive  evidence that the advance was
made by the Bank to the undersigned.

The  principal  sum of each advance made  hereunder,  as the case may be,
shall bear  interest  from the date made until paid in full,  at a
fluctuating  rate per annum  equal to One ( 1.00 %) percent  above the Prime
Rate of the Bank and which  shall  change when and as the Prime Rate  changes,
calculated  on the basis of a 360-day  year and actual number of days elapsed
(but in no event in excess of the maximum rate permitted by applicable  law).
"Prime Rate" shall mean the rate which the Bank  announces  from time to time
as its prime  lending  rate,  in effect from time to time.  The Prime Rate is
a reference  rate and does not  necessarily  represent  the lowest,  the best
or a favored rate  actually  charged to any customer.  Any change in such rate
of interest  shall be effective as of the opening of business on the date the
change in the prime loan rate of the Bank occurs,  without  prior notice to the
undersigned.  Such interest is to be payable  monthly  commencing  April 1,
2004, and continuing on the same day of each month until maturity date.

The Prime  Rate of the Bank in effect on the date of this Note is four  percent
(4.00%)  per annum.  All  payments hereunder shall be made in lawful money of
the United States and in immediately  available  funds. Any extension of
time for the payment of the interest or principal of this Note  resulting from
the due date falling on a Saturday, Sunday or legal holiday shall be included
in the computation of interest.

Interest from and after maturity (whether as originally  stated or by
acceleration)  shall be at the rate per annum equal to 5% above the rate
charged  hereunder  on the date of such  maturity  or renewal or demand or
if such rate shall not be lawful with respect to the  undersigned,  at the
highest lawful rate then in effect.  Any interest not paid when due hereunder
shall be added to the  principal  amount of this Note and shall bear interest
from its due date at the applicable interest rate specified herein.

The undersigned  shall give the Bank telephonic or fax notice of each requested
Advance to be made under this Note by at least one o'clock p.m.,  Pacific
Standard  Time, on the date of borrowing,  to be followed by prompt written
confirmation  thereof  delivered to the Bank,  which notice shall  specify the
date of borrowing  and the principal amount  thereof.  The Bank shall be
entitled to rely upon any such  telephonic  notice and the  undersigned
hereby agrees to indemnify the Bank against any claims, liabilities, losses
and expenses ensuing from such reliance.

This note  evidences  a  revolving  line of credit.  Subject to the terms and
conditions  hereof and the terms and conditions  set forth in the Bank's
letter dated  February 23, 2004, to the  undersigned  (as  attached),  and any
agreement in writing between the Bank and the undersigned,  the undersigned may
borrow,  repay in whole or in part, and reborrow on a revolving basis, up to
the maximum amount of this Note.

If any amount  payable on this Note shall not be paid when due,  THEN this Note
and the  principal  of and  accrued interest on each Advance  evidenced hereby
shall,  unless the Bank shall otherwise elect,  become forthwith due and
payable  in full,  without  protest,  presentment,  notice  or  demand,  all of
which are  expressly  waived by the undersigned.

The undersigned  and its  subsidiaries,  represent and warrant that: (1) Event
of Default (as hereinafter  defined) has  occurred  and no event has  occurred
which,  with the  giving  of notice or the lapse of time or both,  would
constitute  an Event of Default;  (2) the  undersigned  shall not use any part
of the  proceeds of any Advance made hereunder  to purchase or carry any margin
stock  within the meaning of  Regulation U of the Board of Governors of the
Federal  Reserve  System or to extend  credit to others for the purpose of
purchasing  or carrying  any margin stock; and (3) on the occasion of each
Advance  hereunder all  representations  and warranties  contained herein or
otherwise  made in writing in connection  herewith  shall be true and correct
and with the same force and effect as though  such  representations  and
warranties  had been  made on and as of the  date of the  making  of each
such Advance.

Upon the occurrence of any of the following  specified events of default
(each an "Event of Default"):  (l) default by the undersigned in making any
payment of principal,  interest,  or any other amount payable under this Note
when due; or (2) default by the  undersigned and any of its  subsidiaries,
in the due payment of any  indebtedness  for borrowed  money or in the
observance  or  performance  of any covenant or condition  contained in any
agreement or instrument  evidencing,  securing, or relating to any such
indebtedness,  and continuance of any such default for a period  sufficient to
cause or permit the  acceleration of the maturity  thereof;  or (3) default in
the observance or performance of any other  agreement of the  undersigned set
forth herein and continuance of any such default for thirty (30) days after
notice  thereof to the  undersigned;  or (4) any  representation  or  warranty
made by the undersigned herein or in any certificate  furnished by the
undersigned  pursuant to the provisions  hereof,  proves untrue in any material
respect;  (5) the undersigned or any of its subsidiaries  becomes insolvent or
bankrupt,  is generally  not paying its debts as they become  due, or makes an
assignment  for the  benefit of  creditors,  or a trustee or receiver is
appointed for the  undersigned or for the greater part of the properties of the
undersigned with the consent of the  undersigned,  or if  appointed  without
the consent of the  undersigned,  such  Trustee or Receiver  is not  discharged
within  thirty  (30) days,  or  bankruptcy,  reorganization,  liquidation  or
similar proceedings  are instituted by or against the  undersigned  under the
laws of any  jurisdiction,  and if instituted against the  undersigned  are
consented to by it or remain  undismissed  for thirty (30) days, or a writ or
warrant of attachment  or similar  process shall be issued  against a
substantial  part of the property of the  undersigned and shall not be released
or bonded  within thirty (30) days after levy;  then, in any such event,
and at any time thereafter,  if any Event of Default shall then be  continuing,
the principal and the accrued  interest in respect of each Advance under this
Note shall become,  immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly
waived by the undersigned.

The Bank may assign,  transfer  and/or  deliver to any  transferee  this Note.
No delay on the part of the Bank in exercising  any power or right  hereunder
shall  operate  as a waiver  thereof;  nor shall any  single or  partial
exercise of any power or right hereunder  preclude other or further  exercise
thereof or the exercise of any other power or right. The rights,  remedies,
and benefits herein expressly specified are cumulative and not exclusive of
any rights,  remedies or  benefits  which the Bank may  otherwise  have.
The  undersigned  hereby  waives  demand, presentment,  notice of dishonor and
protest of all instruments  included in or evidencing the Note and any and all
other notices and demands whatsoever, whether or not relating to any such
instrument.

THE  UNDERSIGNED  IN ANY  LITIGATION  (WHETHER  OR NOT  ARISING  OUT OF OR
RELATING  TO  THIS  NOTE  OR ANY  OTHER LIABILITIES) IN WHICH THE UNDERSIGNED
AND THE BANK SHALL BE ADVERSE  PARTIES,  HEREBY WAIVES THE RIGHT TO TRIAL BY
JURY AND THE RIGHT TO INTERPOSE ANY DEFENSE, SET-OFF OR COUNTERCLAIM OF ANY
NATURE OR DESCRIPTION.

No  provision  hereof  shall be modified or limited  except by a written
instrument  signed by the Bank  expressly referring hereto and to the provision
so modified or limited.  The undersigned,  if more than one, shall be jointly
and severally liable hereunder and all provisions  hereof regarding the Note
of the undersigned  shall apply to any Note of any or all of them.  This Note
and the  provisions  hereof  are to be binding  upon the  heirs,  executors,
administrators,  assigns or successors of the undersigned;  they shall continue
in force and effect notwithstanding any change in any partnership party hereto,
whether such change occurs through death, retirement or otherwise.

The  undersigned  hereby  consents to the in personam  jurisdiction  of any
state or federal  court  sitting in the County of Los Angeles,  State of
California,  in connection with any claim arising with respect to this Note or
any of the  liabilities.  In the event any such action is commenced  in any
such court,  service of process may be made on the undersigned by mailing a
copy thereof to it at the address then reflected in the Bank's  records.
This Note and the provisions hereof are to be construed according to and
governed by the laws of the State of California.

                                            BIG DOG HOLDINGS, INC.,
                                            a Delaware Corporation ("Borrower")

                                                By:
                                                Name:
                                                Title:

DUE: March 1, 2006

Accepted by:
ISRAEL DISCOUNT BANK OF NEW YORK ("Bank" or "Lender")

By:
Name:
Title:

By:
Name:
Title:

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