STATE OF NORTH CAROLINA

LEASE AGREEMENT

COUNTY OF CABARRUS   

THIS LEASE AGREEMENT is made and entered into as of the 9th day of July, 1997, by and between Performance Park Partners, LLC a North Carolina limited liability company with offices in Charlotte, North Carolina ("Landlord") and Sports Image, Inc. an Arizona corporation ("Tenant").

PRELIMINARY STATEMENT

A. Landlord is the owner of that certain parcel of land (the "Land") containing approximately 16.3 acres located on Hudspeth Road (S. R. 1302) near its intersection with More head Road (S. R. 1300) in Cabarrus County, North Carolina. The Land is depicted on the boundary and division survey dated June 2, 1997 attached hereto as Exhibit A.

B. Landlord shall construct on the Land an office warehouse building (the "Building") containing approximately 113,755 square feet of floor area, together with associated improvements such as parking areas, sidewalks, landscaped areas and utility facilities (collectively, with the Building, the "Improvements") on the Land. Tenant intends to occupy the Building and use the other Improvements for office, warehouse and related purposes.

C. The Land, the Building and the other Improvements are referred to collectively in this Lease as the "Premises." In order to evidence their agreement regarding Tenant's lease of the Premises, the parties are entering into this Lease Agreement (this "Lease").

LEASE

NOW, THEREFORE, in consideration of $1.00 paid in hand by Tenant to Landlord, the mutual covenants and conditions contained in this Lease, including the covenant to pay rent, and other good and valuable consideration, Landlord and Tenant hereby agree, for themselves, their successors and assigns, as follows:

1. Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises, for the term and on the terms and conditions set forth in this Lease.

2. Term. The term of this Lease shall begin on the date that the substantially completed Premises are delivered to Tenant, as provided in paragraph 5, and shall end at midnight on the last day of the Two Hundred Fortieth(240th) complete calendar month following the commencement date.

3. Renewal. Provided Tenant is not in default under this Lease, Tenant shall have the right to renew this Lease for four (4) periods of five (5) years each. Each renewal period shall be on the same terms and conditions set forth in this Lease except that Tenant shall have no further renewal rights after the final renewal period. All references in this Lease to the term of this Lease shall be deemed to include the renewal periods provided for herein unless the context clearly indicates a different meaning.

4. Exercise of Renewal. The right of Tenant to renew this Lease shall be exercised by written notice delivered to Landlord in the manner provided in paragraph 25 below not less than ninety (90) days prior to the expiration of the initial term or the then current renewal period, as applicable, after which Tenant's renewal right shall expire, time being of the essence. Notwithstanding the foregoing, Tenant's right to exercise its renewal option shall not expire until ten (10) days after Landlord has delivered notice to Tenant that Tenant has failed to timely exercise its option to renew.

5. Delivery of Premises. Landlord shall deliver the Premises to Tenant when the Premises are substantially completed. Landlord and Tenant expect the Premises to be substantially completed within nine (9) months after commencement of construction, and Landlord and Tenant agree to exercise reasonable efforts to meet the expectation. If, however, the Premises are not substantially completed by the end of the twelfth (12th) month after commencement of construction, and if such failure to achieve substantial completion is not due to force majeure or to delays caused by Tenant, Tenant may terminate this Lease by written notice to Landlord and neither party shall have any further rights or obligations under this Lease. In this lease, the Premises shall be deemed to be "substantially completed" on the date the last of the following occurs:

(a) Landlord's contractor states in writing for the benefit of Tenant that the Premises have been substantially completed in accordance with the nine (9) page Scope of the Work Specifications of G. L. Wilson Building Company (the "Contractor") dated May 28, 1997 and the five (5) page site plan, floor plan, elevation and main and upper level enlarged plan of the Contractor both attached as Exhibit B to this Lease, subject only to minor punch list items that do not materially impair the use of the Premises for their intended purpose; and

(b) A temporary certificate of occupancy is issued for the Premises by the appropriate authority, subject only to conditions that do not materially impair the use of the Premises for their intended purpose. Tenant shall inspect the Premises within thirty (30) days after delivery thereof and submit a written punch list of construction defects to Landlord. If Tenant does not submit such punch list on or before the thirtieth (30th) day after delivery of the Premises, Tenant shall be deemed to have accepted the Premises "as is". If Tenant omits any item from such punch list, Tenant shall be deemed to have accepted such item "as is". Tenant acknowledges that Landlord makes no representations or warranties as to the condition of the Premises or their suitability for any particular purpose, and that Landlord shall have no responsibility to make any repairs or alterations to the Premises prior to or after their delivery to Tenant. Tenant shall look to the contractor and not to Landlord for corrections of punch list items. Landlord shall assign to Tenant all of Landlord's rights in, to and under any warranties affecting the Premises.

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