DVA HEALTHCARE RENAL CARE, INc. ("LESSEE")

LEASE AGREEMENT BY AND BETWEEN SOUTHERN OTTER LLC "LESSOR" AND DVA HEALTHCARE RENAL CARE, INc. ("LESSEE") Dated: March Al, 2012 Ft. Myers, FL (Facility No. 4043) TABLE OF CONTENTS TERM RENT; SALES AND USE TAX RENT ADJUSTMENTS RENEWALS CONDITION OF PREMISES USE OF PREMISES ASSIGNMENT/SUBLETTING TAXES AND UTILITIES ALTERATIONS/SIGNAGE 10.ENVIRONMENTAL 11.DAMAGE TO PREMISES BY FIRE OR CASUALTY 12.EMINENT DOMAIN 10 13.RIGHT OF ENTRY BY LESSOR 10 14.INDEMNITY11 15.DEFAULT AND REMEDIES11 16.INSURANCE SUBROGATION 18.REPAIRS AND MAINTENANCE. 19.BROKERS 20.EMERGENCY 21.TITLE AND PARKING 22.COMPLIANCE WITH LAWS 23.INTENTIONALLY DELETED 24.LESSEE TO SUBORDINATE 25.QUIET ENJOYMENT 16 26.MEMORANDUM OF LEASE 16 27.NOTICES 16 28.ESTOPPEL CERTIFICATE 17 29.HOLDING OVER 17 30.BINDING EFFECT 17 31.COMPLETE AGREEMENT 17 32.SEVERABILITY 17 33.APPLICABLE LAW 18 34.FORCE MAJEURE 18 35.AMENDMENT 18 36.LESSEE IMPROVEMENTS 18 37.INTENTIONALLY DELETED 18 38.LESSOR'S SALE OF THE BUILDING 18 39.LESSEE'S ROOF RIGHTS 19 40.REGULATORY COMPLIANCE 19 41.COOPERATION WITH LESSEE'S COST REPORTING RESPONSIBILITIES 21 42.PROTECTED HEALTH INFORMATION 43.CONSENT 44.APPROVAL BY DAVITA INC. AS TO FORM 45.COUNTERPARTS 46.RADON GAS NOTIFICATION 47.LATE PAYMENTS ii EXHIBIT A- LEGAL DESCRIPTION/ BUILDING SITE PLAN EXHIBIT B- PREMISES FLOOR PLAN EXHIBIT C- FORM OF COMMENCEMENT DATE MEMORANDUM EXHIBIT D- FORM W-9 EXHIBIT E- FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT EXHIBIT F- FORM OF ESTOPPEL CERTIFICATE EXHIBIT G- FORM MEMORANDUM OF LEASE iii THIS LEASE AGREEMENT (this "Lease"), made and entered into this day of March, 2012, by and between SOUTHERN OTTER, LLC, a Florida limited liability company (hereinafter called "Lessor"), and DVA HEALTHCARE RENAL CARE, INC., a Nevada corporation and registered to do business in the State of Florida (hereinafter called the "Lessee"). WITNESS ETH: WHEREAS, Lessor desires to demise, lease and rent unto Lessee, and Lessee desires to rent and lease from Lessor certain space in the building located at 8850 Gladiolus Drive, Fort Myers, Florida, 33908, as more particularly described on Exhibit A (the "Building" or the "Premise"), together with all improvements thereon and appurtenant rights thereto including, without limitation, parking areas, easements, declarations and rights of way. The "Premises" (as defined below) is more fully depicted on the floor plan attached hereto as Exhibit B, which floor plan may be amended by Lessee to reflect the Lessee Improvements and incorporated herein through a written amendment signed by both parties; and WHEREAS, the Premises contains approximately nine thousand (9,000) rentable square feet and includes without limitation, all heating, venting, air conditioning, mechanical, electrical, elevator and plumbing systems, roofs, walls, foundations, fixtures, an overhead dock door, and that certain number of non-exclusive parking spaces per square foot of the Premises, including handicap-striped spaces, as may be required by applicable Laws (as defined below). NOW, THEREFORE, for and in consideration of the mutual covenants, promises and agreements herein contained, Lessor does hereby demise, lease and rent unto the said Lessee and Lessee does hereby rent and lease from Lessor the Premises, under and pursuant to the following terms and conditions: 1.Term. This Lease shall be effective upon full execution and delivery (the "Effective Date"). Lessor shall deliver possession of the Premises to Lessee on the Effective Date, with a one and one-quarter (1 1/4) inch city water line with 50 psi and an existing city sewer connection (such date being referred to herein as the "Possession Date"). In the event possession of the Premises is not provided on the Possession Date, Lessee may, in its sole discretion, elect to terminate this Lease by written notice to Lessor or receive two (2) days or rent abatement for every day of delay in delivery of the Premises to Lessee. Upon receipt of possession of the Premises, Tenant shall begin to pay for all Utilities (as defined herein) and shall maintain the common areas of the Building. The term of the Lease shall commence upon the earlier of: (a) the date that is seven (7) months following the Possession Date; or (b) that date upon which Lessee opens for business to the general public and operates its business in the Premises or that each of the following have been satisfied (or waived in writing by Lessee as the case may be): (i) substantial completion of Lessee's Improvements (as defined in Section 36 below); (ii) Lessee has received a permanent certificate of occupancy for the Premises from the City of Fort Myers, Florida; and (iii) Lessee has obtained all necessary licenses and permits necessary to conduct its business in the Premises (such date being refe1Ted to herein as the "Commencement Date") and shall expire one hundred twenty (120) months following said Commencement Date (as the same may be extended the "Termination Date"), unless renewed as hereinafter provided (the "Term"). Each twelve (12) month period beginning on the Commencement Date or any anniversary thereof shall hereinafter be called a "Lease Year." Upon determination of the Commencement Date and at the request of either party, a memorandum in the form attached hereto as Exhibit C shall be executed by both Lessor and Lessee setting forth the Commencement Date and certifying that the Lease is in full force and effect. 2.Rent• Sales and Use Tax. Beginning on the Commencement Date, Lessee agrees to pay as an initial annual base rent ("Rent") of $83,250.00, based on a $9.25 per rentable square foot amount. Beginning on the Commencement Date, Lessee shall pay Rent in the amount of $6,937.50 per month in advance on the first day of each calendar month, such monthly installment to be prorated for any partial calendar month in which the Commencement Date or Termination Date shall occur. The Rent shall be adjusted in accordance with the provisions of Section 3. All amounts (unless otherwise provided herein) other than the Rent and the adjustments thereto described in Section 3 hereof owed by Lessee to Lessor hereunder shall be deemed additional rent. Prior to the Commencement Date, Lessor shall complete and deliver to Lessee a Form W-9- Request for Taxpayer Identification and Certification in the form attached hereto as Exhibit D. (b)Actual square footage for the Premises will be determined by space planning and programming. Lessee may elect to have the space measured prior to the Commencement Date. If the square footage is found to be equal to or less than 9,000 rentable square feet, then Rent and other provisions of this Lease which are based on rentable area shall be adjusted accordingly but in no event shall Rent increase by more than one percent (1%) or decrease by more than five percent (5%). (c)During the Term of this Lease or any extension or renewal thereof, Lessee shall pay to Lessor, concurrent with payment of the monthly Rent payments, an additional sum equal to the "sales" or "use" tax by the State of Florida relative to the use or occupancy of the Premises by Lessee in connection with this Lease (collectively, "Sales Tax"). Lessor and Lessee acknowledge that as of the Effective Date, the State of Florida's current Sales Tax rate is six percent (6%) of and on the Rent due and payable under this Lease. Upon written request by Lessee, Lessor shall deliver to Lessee proof of payment by Lessor of the Sales Tax for such Lease Year. In the event Lessor fails to pay Sales Tax when due or any interest, fines, or penalties thereon, Lessee may, in its sole discretion, make such payment directly to the State of Florida, and any and all such sums expended or obligations incurred by Lessee in connection therewith shall be paid by Lessor to Lessee upon demand, and if Lessor fails to immediately reimburse and pay same to Lessee, Lessee may, in addition to any other right or remedy that Lessee may have under this Lease deduct such amount (together with interest thereon at the maximum rate permitted by applicable law from the date of such expenditure by Lessee until the date of repayment thereof by Lessor to Lessee) from subsequent installments of Rent and other charges (if any) that from time to time thereafter may become due and payable by Lessee to Lessor hereunder and Lessee may make any future payment of Sales Tax directly to the State of Florida. In the event a party to this Lease is obligated to make a Tax (defined below) or Sales Tax payment pursuant to the Lease terms and such party fails, neglects or is unable or unwilling to make tax related payments and/or file any tax information returns when due, such party will be responsible for all penalties, interest, fines and other costs related to such breach, unless the failure to pay is a result of the other party's breach of its payment obligations hereunder. (d)Except as otherwise provided in this Lease, it is the intention of the parties that Lessor shall receive the rents, additional rents, and all sums payable by Lessee under this Lease free of all taxes, expenses, charges, damages and deductions of any nature whatsoever and Lessee covenants and agrees to pay all sums (includipg rent taxes) which except for this Lease would have been chargeable against the Premises and*payable by Lessor. Lessee shall, however, be under no obligation to pay principal or interest on any mortgage on the fee of the Premises, any franchise or income tax payable by Lessor or any other tax is imposed upon or measured by Lessor's income or profits, or any gift, inheritance, transfer, estate, or succession tax by reason of any present or future law which may be enacted during the Term of this Lease. 3.Rent Adjustments. Beginning on the first (1 st) anniversary of the Commencement Date and continuing on every subsequent anniversary of the Commencement Date, the Rent shall be increased by three percent (3%) annually over the Rent for the prior Lease Year. 4.Renewals. Lessee shall have the right and option to renew this Lease for three (3) additional periods of five (5) years each, next immediately ensuing after the expiration of the initial Term of this Lease and the subsequent renewal periods by notifying Lessor in writing not less than one hundred eighty (180) days before the expiration of the immediately preceding initial Term or subsequent renewal Term of this Lease of Lessee's intention to exercise its option to renew, but Lessee shall have no option to extend this Lease beyond three (3) renewal periods of five (5) years each after the initial Term unless otherwise agreed by the parties. In the event Lessee fails to provide a renewal notice within ninety (90) days prior to the expiration of the then existing Term, Lessor shall deliver a reminder notice to Lessee in writing within ninety (90) days prior to expiration of the then existing Term of Lessee's option to extend the Lease, In the event that Lessee so elects to extend this Lease, then, for such extended period of the Term, all of the terms, covenants and conditions of this Lease shall continue to be, and shall be, in full force and effect during such extended period of the Term hereof, except for the Rent. The Rent for each extended period shall be as mutually agreed upon by Lessor and Lessee not less than (6) months prior to the expiration of the then current Term hereof and shall be adjusted thereafter as set forth in Section 3 hereof. If Lessor and Lessee are unable to mutually agree on the new Rent for such extended period then, within five (5) months prior to the expiration of the then current Term of this Lease, each of Lessor and Lessee shall select a duly qualified real estate appraiser. The Rent shall be the greater of (1) Rent for the preceding Lease Year or (2) ninety-five percent (95%) of the annual fair market rental value (the "FMRV") of the Premises (after taking into consideration one hundred percent (100%) of the rental inducements then given to new tenants in comparable, freestanding, medical professional buildings in the Fort Myers, Florida area) as determined by the two (2) appraisers selected by Lessee and Lessor as of the date which is four (4) months before the date of the expiration of the then existing Term of this Lease. The appraisers shall issue their reports within twenty (20) days. If the higher of the two (2) appraisals is less than or equal to one hundred ten percent (110%) of the lower, FMRV shall be the average of the two. If the parties still cannot agree on FMV then Lessee shall vacate the Premises per the terms of the Lease by the end of such Term, subject to the holding over provisions of Section 29. Lessor shall pay the cost of the appraisal by the appraiser selected by Lessor. Lessee shall pay the cost of the appraisal by the appraiser selected by Lessee. 5.Condition of Premises. Lessor warrants to Lessee for a period of one (1) year after the C01nmencement Date that the existing systems and equipment constituting a part of the Premises including without limitation the heating, air conditioning and ventilation system (HVAC), but specifically excluding any portion of the HVAC, mechanical, electrical, plumbing, sprinkler and sewer systems modified or installed by Lessee (the "Warranted Systems") are in good order and condition, ordinary wear and tear excepted. Lessee shall give written notice to Lessor within such one (1) year period of any existing condition with the existing systems and equipment of the Premises which Lessee reasonably determines to be defective or other than as represented by Lessor herein. Lessor will, upon receipt of such notice from Lessee, promptly repair such defective condition at Lessor's sole cost and expense. Lessor shall cooperate in exercising all of Lessor's rights under any warranties upon notice of defective conditions and, promptly upon Lessee's request, assign all of Lessor's rights and interest in then existing warranties of all existing systems and equipment constituting a part of the Premises to Lessee. Except as specifically stated in this Lease, Lessor and Lessee agree that Lessee is taking and accepting the Premises in its "AS-IS" condition with no warranties or representations. 6.Use of Premises. Lessee may occupy and use the Premises during the Term for purposes of the operation of an outpatient renal dialysis clinic, renal dialysis home training, aphaeresis services and similar blood separation and cell collection procedures, pharmaceutical distribution, general medical offices, clinical laboratory, including all incidental, related, and necessary elements and functions of other recognized dialysis disciplines which may be necessary or desirable to render a complete program of treatment to patients of Lessee (the "Permitted Use"), or for any other lawful purpose(s) (which purposes are not included in the definition of "Permitted Use"). Lessee may operate during such days and hours as Lessee may determine, without the imposition of minimum or maximum hours of operation by Lessor and Lessee shall have access to the Premises, and may operate, up to twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year. To the best of Lessor' knowledge, Lessor represents and warrants that the Premises may be used by Lessee for the Permitted Use under applicable laws, ordinances, rules and regulations including, without limitation, zoning laws. The term "best of Lessor's knowledge" means the actual knowledge of Haim Zukerman, in his capacity as the sole Manager of the Lessor, whom the Lessor represents and warrants to the Lessee is the person who is the most knowledgeable about the Premises. Lessor shall not sell, rent or permit any property owned, leased or controlled by Lessor or any affiliate of Lessor within a radius of five (5) miles from the Premises to be occupied or used by a business that derives more than ten percent (10%) of its revenues from renal dialysis, renal dialysis home training, any aphaeresis service(s) or similar blood separation or cell collection procedures, except services involving the collection of blood or blood components from volunteer donors. Lessor shall not display or permit to be displayed upon any such property within said radius any advertisement for any such business other than Lessee's advertisement(s) for Lessee's business(es). Lessor further covenants that in any commercial lease, deed or other agreement hereafter executed by Lessor affecting any commercial property owned, leased or controlled by Lessor within such radius, Lessor will insert a restrictive clause preventing such property from being used for any purposes herein prohibited. This paragraph shall be of no force or effect following the tennination or expiration of this Lease. Should Lessor lease space within the Building to any tenant that materially impairs Lessee's business, including but not limited to any business that involves loud noises, strong food or chemical odors, or is otherwise a nuisance, and the disruption continues for in excess of thirty (30) days after notice to Lessor from Lessee, Lessee shall have the right to terminate this Lease upon sixty (60) days' written notice. Provided the Premises is being used as a dialysis facility, in the event at any time after the Commencement Date of this Lease the use of the Premises as a dialysis facility becomes illegal by reason of acts not within Lessee's control, Lessee may terminate this Lease and thereafter neither party shall have any obligations hereunder after the date of termination. ent/Sublett1n . Lessee shall not assign this Lease, or sublet the Premises, or any part thereof, without Lessor's prior written consent which consent shall not be unreasonably withheld, conditioned or delayed. Prior to any sublease or assignment, Lessee shall first notify Lessor in writing of its election to sublease all or a portion of the Premises or to assign this Lease or any interest thereunder together with pertinent information such as the operating history of the proposed occupant as well as financial information. At any time within thirty (30) days after service of said notice, Lessor shall notify Lessee that it consents or refuses to consent to the sublease or assignment. A failure by Lessor to respond within such thirty (30) day period shall be deemed to be a consent. Lessor shall not have the right to recapture any sublease or assignment space. Any denial of such sublease or assignment by Lessor as hereinabove provided must be predicated upon a "commercially reasonable basis" for such denial. Lessee and Lessor shall each retain fifty percent (50%) of any net profits paid in connection with a sublease or assignment in excess of Lessee's Rent obligations hereunder, which profits shall be calculated after deducting all costs actually incurred by Lessee and Lessor in connection with the space subject to the transfer, which shall include, but not be limited to, legal fees, rental abatement, vacancy period, allowances, tenant improvements, leasing commissions and, for the Lessee, the time to sublease and remodel the Premises. Any assignment or subletting shall not release Lessee of its liability under this Lease nor permit any subsequent assignment, subletting or other prohibited act, unless specifically provided in such consent. Notwithstanding the foregoing, no consent of Lessor is required for Lessee to assign or otherwise transfer (by operation of law or otherwise) this Lease or any of its rights hereunder: (a) to any person, corporation, partnership or other entity which acquires all or substantially all of the business or assets of Lessee or stock in Lessee; or (b) to any person, corporation, partnership or other entity which controls, is controlled by or is under common control with Lessee; or (c) to any affiliate (within the meaning of such term as set forth in Rule 501 of Regulation D under the Federal Securities Act of 1933) of Lessee. Lessee and Lessee's transferee or assignee shall provide notice of any transfer or assignment described in (a), (b), or (c) hereof not less than fifteen (15) days prior to the effective date of such transfer or assignment unless prohibited by law and then, if so prohibited by law, within twenty (20) days after the date of such transfer or assignment. No such assignment or other transfer, in whole or in part, of any Lessee's rights or obligations under this Lease shall be or operate as a release of Lessee hereunder and Lessee shall remain primarily liable and responsible for performing Lessee's obligations hereunder should Lessee's assignee or transferee fail to perform any such obligations. 8.Taxes and Utilities. (a)Lessee shall contract for and pay all Utilities directly, pay for Taxes (as defined belbw) when due and pay all insurance premiums for the Building ("Insurance"), which insurance may be, at Lessee's discretion, obtained by Lessee in the amounts required to be obtained by Lessor hereunder or Lessor. If Lessee requires Lessor to obtain the Building' Insurance, Lessee shall pay the actually annual Insurance premium in equal monthly installments to Lessor, due at the same time of the payment of Rent. "Taxes" shall mean real property taxes, public charges and assessments assessed or imposed upon the Building, provided, however, that any one time (as opposed to on-going) special assessments for public improvements having a useful economic life exceeding the remaining term of this Lease shall be prorated between Lessor and Lessee using a straight-line method, based on the proportion of that economic life falling within the remaining term of the Lease. Taxes shall not include any penalties or interest for late or partial payment nor any income, franchise, inheritance, estate, transfer, excise, gift or capital gain taxes, that are or may be payable by Lessor or that may be imposed against Lessor or against the rents payable hereunder. Taxes, as defined herein, shall not include the Sales Tax discussed in Section 2 above. Lessee may, but shall not be obligated to, take advantage of any savings in Taxes that may be achieved by early payment or payment in installments. Should Lessor choose not to contest any Taxes, Lessee shall have the right to contest the Taxes in Lessor's name and with Lessor's reasonable cooperation, at no expense to Lessor. Lessor, at Lessee's sole expense, shall join in any such contestation proceedings if any Law (as defined in Section 22 below) shall so require. (b)Lessee shall pay for all utilities and other services necessary in the operation of the Premises, including but not be limited to, gas, fuel oil, electrical, sanitary sewer, telephone, garbage collection, janitorial services and other utility charges (the "Utilities"). Upon completion of Lessee Improvements (defined below), the Premises shall be separately metered for all Utilities, including gas, water, sanitary sewer and electricity. Lessee, at Lessee's sole cost and expense, shall separately contract for and pay all expenses related to lawn maintenance, janitorial services and other similar common area maintenance expenses. (c)Lessor shall provide to Lessee and its agents and auditors, true and accurate records of any items other than Rent charged to Lessee under this Lease. Such records shall be open for inspection from time to time by Lessee or its duly authorized representative for a period of one (1) year after the close of each calendar year. If any audit of Lessor's submitted reports shall disclose an overcharge, Lessor shall promptly pay to Lessee, within thirty (30) days, the amount of such overcharge, and if such audit discloses an overcharge of more than an eight percent (8%), Lessor shall reimburse Lessee its actual costs incurred in connection with such audit. (d)All sums (other than the Rent) which may be due and payable under this Lease shall be deemed to be additional rent hereunder and in the event that Rent shall be prorated or shall abate pursuant to the terms of this Lease then such additional rent shall be prorated or abate to the same extent and in the same manner, unless otherwise specifically provided for in this Lease. In case any person to whom any sum is directly payable by Lessee under any of the provisions of this Lease shall refuse to accept payment of such sum from Lessee, Lessee shall thereupon give written notice of such fact to Lessor and shall pay such sum directly to Lessor, who shall thereupon pay such sum to such person. 9.Alterations/Signage. Lessee shall not make any alterations, or additions or leasehold improvements to the Premises following the Commencement Date ("Alterations") without Lessor's prior written consent in each and every instance, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Lessee shall have the right to make non-structural Alterations to the Premises which do not exceed in cost 50,000.00 in the aggregate during each Lease Year without Lessor's consent. All Alterations which may be made by Lessee shall be the property of Lessee and Lessee shall be entitled to remove from the leased Premises during the Term all Alterations, tenant improvements and any and all furniture, removable trade fixtures, equipment and personal property ("Fixtures") installed or located on or in the leased Premises which, in Lessee's discretion, relate to or support use of the Premises as a dialysis facility, provided that Lessee repair any and all damages done by the removal of the foregoing. All Alterations and Fixtures which Lessee does not elect to remove at the expiration of the Term pursuant to the preceding sentence shall be surrendered with the Premises at the termination of this Lease. Lessee shall have the right to affix to Lessee's standard signage, in accordance with the rules and regulations of the Building, including a sign on the exterior of the Building or a monument sign. All such signs shall comply with all applicable zoning Laws and shall be subject to City of Fort Myers, Florida permits and Lessor's prior approval, which approval shall not be unreasonably withheld, conditioned or delayed. To the maximum extent permitted by applicable Laws, Lessor hereby waives any rights which Lessor may have, as to any of Lessee's furniture, fixtures, equipment, personal property, tenant improvements and Alterations, in the nature of a Lessor's lien, security interest or otherwise and further waives the right to enforce any such lien or security interest. 10.Environmental. LeSsee shall not cause or permit any hazardous or toxic substances, materials or waste, including, without limitation, medical waste and asbestos ("Hazardous Substances") to be used, generated, stored or disposed of in, on or under, or transported to or from the Premises unless such Hazardous Substances are reasonably necessary for Lessee's business conducted in the Premises; p!Q.yjdgd, however, Lessee shall at all times and in all material respects comply with all local, state, and federal laws, ordinances, rules, regulations and orders, whether now in existence or hereafter adopted relating to Hazardous Substances or otherwise pertaining to the environment (the "Environmental Laws") and further provided that Lessee shall periodically cause to be lawfully removed from the Premises such Hazardous Substances placed thereon by Lessee or Lessee's agents, servants, employees, guests, invitees and/or independent contractors in accordance with good business practices, such removal to be performed by persons or entities duly qualified to handle and dispose of Hazardous Substances. Without limiting the generality of the foregoing, Lessor acknowledges that the following Hazardous Substances, among others, are required for Lessee's business operations: bleach, cidex, hibiclena, metrocide, hydrogen peroxide, and formaldehyde. Upon the expiration or earlier termination of this Lease, Lessee shall cause all Hazardous Substances placed on the Premises by Lessee to be lawfully removed, at Lessee's cost and expense, from the Premises and disposed of in strict accordance with the Environmental Laws. Lessee shall indemnify, defend (by counsel reasonably acceptable to Lessor), protect, and hold Lessor harmless, from and against any and all claims, liabilities, penalties, fines, judgment, forfeitures, losses, costs (including clean-up costs) or expenses (including attorney's fees, consultant's fees and expert's fees) for any event, claim, threat or occurrence or the death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly, by (a) the presence after the Possession Date in, on, under, or about the Premises of any Hazardous Substances caused by Lessees or its agents, servants, employees, guests, invitees and/or independent contractors; (b) any discharge or release by Lessee or its agents, servants, employees, guests, invitees and/or independent contractors after the Possession Date in or from the Premises of any Hazardous Substances; (c) Lessee's use, storage, transportation, generation, disposal, release or discharge after the Possession Date of Hazardous Substances, to, in, on, under, about or from the Premises; or (d) Lessee's failure after the Possession Date to comply with any Environmental Law. Lessor shall indemnify, defend (by counsel reasonably accepted to Lessee), protect, and hold Lessee harmless, from and against any and all claims, liabilities, penalties, fines, judgment, forfeitures, losses, costs (including clean-up costs) or expenses (including attorney's fees, consultant's fees and expert's fees) for the death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly, by (a) the presence prior to the Possession Date in, on, under, or about the Premises or Building of any Hazardous Substances; (b) any discharge or release prior to the Possession Date in or from the Premises or Building of any Hazardous Substances; (c) the use, storage, transportation, generation, disposal, release or discharge of Hazardous Substances by Lessor to, in, on, under, about or from the Premises or Building; (d) Lessor's failure to comply with any Environmental Law; or (e) any Hazardous Substances to the extent not due to any act or omission of Lessee or its agents, servants, employees, guests, invitees and/or independent contractors. Lessor agrees to remediate at Lessor's expense immediately upon receipt of notice from Lessee any condition described in (a) through (e) of the previous sentence; provided, however, if the cost of such remediation exceeds $50,000, Lessor may elect to terminate the Lease by providing Lessee six (6) months prior notice thereof and reimbursing Lessee for its unamortized leasehold improvement costs. If Lessor elects to terminate the Lease pursuant to this Section or otherwise fails to perform its obligations under this Section and the Premises or any portion thereof becomes untenantable due to the presence of a Hazardous Substance not caused by Lessee or its agents, servants, employees, guests, invitees and/or independent contractors, then Lessee's Rent shall abate in proportion to the untenantability of the Premises during the period it any portion of the Premises is untenantable. In the foregoing sentence, "proportion" shall mean the ratio of square footage to the entire square footage of the Premises. Lessor represents and warrants to Lessee that as of the Possession Date and to the best of Lessor's knowledge there are no Hazardous Substances unlawfully present on the Premises, including asbestos. Lessor has received no notice from any governmental or private entity relating to Hazardous Substances on the Premises. Lessee shall promptly deliver to Lessor copies of all notices made by Lessee to, or received by Lessee from, any state, county, municipal or other agency having authority to enforce any environmental law ("Enforcement Agency") or from the United States Occupational Safety and Health Administration concerning environmental matters or Hazardous Substances at the Premises. Lessor shall promptly deliver to Lessee copies of all notices received by Lessor from any Enforcement Agency or from the United States Occupational Safety and Health Administration concerning environmental matters or Hazardous Substances at the Premises. 11.Dama e to Premises b Fire or Casual In the event the Premises shall be damaged by fire or other casualty during the life of this Lease, whereby the same shall be rendered untenantable, then: (a)if the damage to the Premises is so substantial that either: (i) the repair, restoration or rehabilitation of such damage cannot reasonably be expected to be substantially completed within two hundred forty (240) days from the date of such damage or (ii) so much of the Premises is destroyed or rendered untenantable by such fire or other casualty as to make use of the Premises as a dialysis facility operating at least seventy-five percent (75%) of the certified dialysis stations operating prior to the fire or casualty impracticable, then Lessee may elect to terminate this Lease by giving written notice to Lessor within thirty (30) days of the date of such fire or casualty; or (b)if the damage to the Premises is so substantial that (i) the estimated repair costs exceed $100,000.00 and such damage has occurred within the last two (2) years of the then current Term and Lessee does not exercise its next available renewal option, if any or (ii) the Building is damaged to the extent of fifty percent (50%) or more of the monetary value thereof, then Lessor may elect to terminate this Lease by giving written notice to Lessee within thirty (30) days of the date of such fire or casualty; or (c)if not so terminated, Lessor shall proceed with all due diligence to repair, restore or rehabilitate the Premises, to substantially their former condition immediately prior to such damage or destruction, at Lessor's expense, in which latter event this Lease shall not terminate. If the Premises are rendered untenantable by fire or other casualty, there shall be an abatement of Rent due Lessor by Lessee for the period of time during which the Premises are untenantable. If the restoration is not substantially completed within two hundred forty (240) days of such damage, it shall be optional with Lessee to terminate this Lease by written notice to Lessor with such written notice given within ten (10) days of the end of the foregoing two hundred forty (240) day period. In the event of any termination of this Lease, Rent shall be paid only to the date such Premises became untenantable. In the event that the Premises are partially but not substantially damaged by fire or other casualty, then Lessor shall immediately proceed with all due diligence to repair and restore the Premises and the Rent shall abate in proportion to the untenantability of the Premises during the period of restoration. In the foregoing sentence, "proportion" shall mean the ratio of square footage of the untenantable space to the entire square footage of the Premises. Notwithstanding the foregoing provisions of this Section 1 1, in the event that insurance proceeds applicable to Alterations constructed by Lessee at its expense are made available to Lessee, Lessee shall be responsible for restoring such Alterations, provided: however, that the Rent abatement provided for shall continue during such period of restoration so long as Lessee is diligently pursuing the completion of such restoration. In the event that Lessor does not restore the Premises, Lessee may retain all insurance proceeds applicable to Alterations constructed by Lessee at its expense. Lessor shall be responsible for restoring improvements constructed by Lessor in all events and Lessee shall be responsible for restoring improvements constructed by Lessee in all events. 12. Eminent Domain. (a)Taking. If by any lawful authority through condemnation or under the power of eminent domain: (i) the whole of the Premises shall be permanently taken; (ii) less than the entire Premises shall be permanently taken, but the remainder of the Premises, are not, in Lessee's sole judgment, fit for Lessee to carry on its business therein; (iii) that after such taking adequate parking space (parking ratios fall below the ratio of 1 space per 1,000 square feet or such greater amount as may be required by local code) will not be available near the Premises; (iv) there is any loss of ingress or egress from or to, or material impairment of visibility of, the Premises; or (v) all or any portion of the common areas shall be taken resulting in a material interference with the operations of or loss of access to Lessee's business, then in any such event, Lessee may terminate this Lease, effective as of the date of such taking, and the Rent and other sums paid or payable hereunder shall be prorated as of the date of such termination. (b)Rent Adjustment. Unless this Lease is canceled as above provided, commencing with the date possession is acquired by the condemning authority the Rent and other sums payable hereunder shall be reduced by the then applicable per square foot Rent as by the number of square feet taken and Lessor shall restore the Premises, at Lessor's cost and expense to a complete architectural unit. During such restoration the Rent shall be abated to the extent the Premises are rendered untenantable. (c)Awards. All compensation awarded or paid in any such eminent domain proceeding shall belong to and be the property of Lessor without any participation by Lessee, except that nothing contained herein shall preclude Lessee from prosecuting any claim directly against the condemning authority in such eminent domain proceeding for its relocation costs, its unamortized leasehold improvements and trade fixtures, loss of business and the like. 13. Lessor, or any of its agents, shall have the right to enter said Premises during all reasonable hours and upon at least twenty-four (24) hours prior notice (except in cases of emergency), to examine the same or to exhibit said Premises, and to put or keep upon the doors or windows thereof a notice "FOR RENT" at any time within sixty (60) days before the expiration of this Lease. Any work done by Lessor to Premises shall be performed during hours that Lessee is not open for business (except in emergencies) unless Lessee, in the exercise of its reasonable discretion otherwise agrees. Any restoration work or alteration work at the Premises which is necessitated by or results from Lessor's entry, including, without limitation, any work necessary to conceal any element whose presence is permitted hereunder, shall be performed by Lessor at its expense or, at Lessee's election, by Lessee on Lessor's behalf and at Lessor's sole cost and expense. Lessor shall be liable for all loss, damage, or injury to persons or property and shall indemnify and hold Lessee harmless from all claims, losses, costs, expenses and liability, including reasonable attorney's fees resulting from Lessor's entry except to the extent caused by the negligent or intentional act of Lessee or its contractors, agents, employees or licensees. If Lessor's entry into the Premises pursuant to this Lease interferes with the conduct by Lessee of it business to such an extent that Lessee, in the exercise of its reasonable business judgment, must close the Premises for business for two (2) or more business days, then Rent shall totally abate for each day or portion thereof that such interference continues. 14.Indemnity. Lessee agrees to indemnify Lessor and save Lessor harmless from any and all liability, claims and loss for personal injury or property damage, or both, sustained or claimed to have been sustained by any person or persons, or property in, upon or about the leased Premises caused or brought about by the act or neglect of Lessee, its agents, servants or employees. Lessor agrees to indemnify Lessee and save Lessee harmless from any and all liability, claims and loss for personal injury or property damage, or both, sustained or claimed to have been sustained by any person or persons, or Property in, upon or about the leased Premises caused or brought about by the act or neglect of Lessor, its agents, servants or employees. The indemnities set forth in this Section 14 shall survive the expiration of the term of this Lease. 15.Default and Remedies. (a)Lessee Default and Lessor Remedies. In the event that (i) Lessee defaults in the payment of Rent hereunder and such Rent remains due and unpaid for seven (7) business days following written notice of such default from Lessor to Lessee; or (ii) should Lessee default in the performance of any other provisions of this Lease and such default is not cured within thirty (30) days following written notice from Lessor specifying such default (unless such default is not reasonably capable of being cured within such thirty (30) day period and Lessee is diligently prosecuting such cure to completion); or (iii) if a petition in bankruptcy shall be filed by or against Lessee (provided Lessee shall have ninety (90) calendar days to stay any involuntary proceeding so long as Rent and other charges are current, subject to all applicable notice and cure periods provided herein); or (iv) should Lessee make an assignment for the benefit of its creditors, or should a receiver be appointed for the said Lessee and such receiver is not dismissed within sixty (60) days of his appointment, then, in any of these events, Lessor, at its option, may (1) proceed for past due installments of Rent due, reserving its right to proceed later for the remaining installments; or (2) declare the rights of Lessee under this Lease terminated, and thereafter recover possession of the Premises through legal process. If the consideration collected by Lessor upon any such reletting is not sufficient to pay monthly the full amount of the Rent and additional rent reserved in this Lease and all other monies to be paid by Lessee, Lessee shall pay to Lessor the amount of each monthly deficiency upon the same terms and conditions herein stated. Provided; however, notwithstanding anything contained herein, Lessor shall have all right and remedies at law and in equity, except rights to accelerate rent. Whether or not this Lease is terminated by Lessor or by any provision of law or court decree, Lessee shall have no obligation to pay any Rent until the date it would otherwise have become due in the absence of any event of default. Lessor agrees that it shall have no right to accelerate (i.e. declare the same immediately due and payable) any Rent which would have become due in the future ("Future Rent"); provided, however that upon termination of this Lease by Lessor, Lessee shall pay Lessor for the unamortized costs of leasing commissions and tenant improvements paid for by Lessor. In the event Lessor terminates this Lease, Lessee's liability for Future Rent (as well as any damages specifically in lieu of or representing such Future Rent) shall cease except to the extent and manner provided otherwise in this Lease. (b)Lessor Default and Lessee Remedies. Subject to the terms and provisions hereinbelow, and in addition to any other remedy expressly available to Lessee pursuant to this Lease or at law or in equity, should Lessor fail to perform any term or covenant under this Lease (each and any such failure being herein sometimes referred to as a "Lessor Default") and if any such Lessor Default shall not be cured and shall accordingly be continuing thirty (30) days following written notice by Lessee to Lessor of such Lessor Default (unless such default is not reasonably capable of being cured within such thirty (30) day period and Lessor is diligently prosecuting such cure to completion), then Lessee may: (i) terminate this Lease if Lessor's Default is material, (ii) abate or withhold Rent for so long as Lessor's Default continues, or (iii) remedy such Lessor Default and deduct such amount (together with interest thereon at the lower of ten percent (10%) or the maximum rate permitted by applicable law from the date of any such expenditure by Lessee until the date of repayment thereof by Lessor to Lessee in full) from subsequent installments of Rent and other charges (if any) that from time to time thereafter may become due and payable by Lessee to Lessor hereunder or, if the cost of such expenses exceed all amounts then due under this Lease, Lessee shall immediately reimburse Lessee or make direct payment for the same. Notwithstanding the foregoing, in all events Lessee shall have the right to remedy any Lessor Default without prior notice in the event of an emergency (so long as Lessee gives notice within a reasonable period of time thereafter) and invoice Lessor and abate Rent (if necessary) in the manner set f01th in the preceding sentences of this Section 15. 16.Insurance. .(a) Lessor's Insurance. Unless Lessee opts to insure the Building through a policy obtained by Lessee or self-insurance with coverage equal to the coverage Lessor is required to maintain hereunder, during the Term of this Lease, Lessor shall procure and maintain in full force and effect with respect to the Building (i) a policy or policies of property insurance (including, to the extent required, sprinkler leakage, vandalism and malicious mischief coverage, and any other endorsements required by the holder of any fee or leasehold mortgage and earthquake, terrorism and flood insurance to the extent Lessor reasonably deems prudent and/or to the extent required by any mortgagee) and loss of rental income coverage equal to a minimum of twelve (12) months rental income and (ii) a policy of commercial liability insurance insuring Lessor's activities with respect to the Premises and the Building for loss, damage or liability for personal injury or death of any person or loss or damage to property occurring in, upon or about the Premises or the Building. (b) Lessee's Insurance. Lessee covenants and agrees to keep Lessee Improvements (as defined in Section 36 hereof) and Lessee's contents in the Premises insured for full replacement value against loss by fire and casualty, under an all risk policy with extended coverage endorsements. In addition thereto, Lessee shall obtain and keep in force with respect to the Premises comprehensive general liability insurance in a minimum amount of $1,000,000.00 per claim and $3,000,000.00 in the aggregate for both bodily injury and property damage. In no event shall Lessee's insurance provide coverage or indemnity to Lessor for any claim, loss, suit, action or other legal proceeding in which Lessor, its agents or designees bear responsibility for the claim, loss, suit, action or other legal proceeding. Rather, it is the intent of this section to provide general liability coverage to Lessor when it is made a party to a claim, loss, suit, action or other legal proceeding for which it bears no responsibility. In tfie event that both Lessor and Lessee bear responsibility for the claim, loss, suit, action or other legal proceeding, then each party will look to their own insurance for coverage. Notwithstanding the foregoing, Lessee shall name Lessor as an additional insured on Lessee's general liability policy, and Lessee agrees that, in the event of a claim arising from the gross negligence or willful misconduct of Lessee or its agents, to reimburse Lessor for the amount of any deductible paid by Lessor pursuant to Lesssee's policy requirements. Lessee may carry any insurance required by this Lease under a blanket policy or under a policy containing a self insured retention. Each policy shall provide that the insurer shall give to Lessor twenty (20) days written notice prior to any cancellation of the policy. Subrogation.Each of the parties hereto hereby releases the other and the other's partners, agents and employees, to the extent of each party's property insurance coverage, from any and all liability for any loss or damage which may be inflicted upon the property of such party even if such loss or damage shall be brought about by the fault or negligence of the other party, its partners, agents or employees; provided, however, that this release shall be effective only with respect to loss or damage occurring during such time as the appropriate policy of insurance shall contain a clause to the effect that this release shall not affect said policy or the right of the insured to recover thereunder. If any policy does not permit such a waiver, and if the party to benefit therefrom requests that such a waiver be obtained, the other party agrees to obtain an endorsement to its insurance policies permitting such waiver of subrogation if it is commercially available and if such policies do not provide therefor. If an additional premium is charged for such waiver, the party benefiting therefrom, if it desires to have the waiver, agrees to pay to the other the amount of such additional premium promptly upon being billed therefor. 18. Repairs and Maintenance. (a)Lessor's Maintenance Res onsibilities. Lessor, at its sole cost and expense, shall maintain and keep in good order and repair and make any necessary repairs of, and replacements to, the roof, roof membrane, roof covering, concrete slab, footings, foundation, structural components, exterior walls, exterior doors and window frames, and flooring (except for floor covering) of the Building and all and any poltion of HVAC, mechanical, electrical, sprinkler, plumbing, sewer and other systems and equipment of the Building which have not been modified or installed by Lessee. If Lessor shall not commence such repairs or replacement within the fifteen (15) days following written notice from Lessee that such repairs or replacement are necessary then Lessee may, at its option, cause such Lessor's repairs or replacements to be made and shall furnish Lessor with a statement of the cost of such repairs or replacements upon substantial completion thereof. Lessor shall reimburse Lessee for the cost of such repairs or replacements, plus a service charge to cover Lessee's expenses, in an amount equal to ten percent (10%) of the cost of such repairs or replacements within thirty (30) days of the date of the statement from Lessee setting forth the amount due, prgyjdgd, however, should Lessor fail to reimburse Lessee with said thirty (30) day period, then Lessee may, at its option, offset such amount against subsequent Rent due under this Lease. (b)Lessee's Maintenance Res onsibilities. Lessee, at its sole cost and expense, shall keep the interior, non-structural portions of the Premises, all and any portion of HVAC, (subject to the one (1) year warranty provided in Section 5) mechanical, electrical, sprinkler, plumbing, sewer and other systems and equipment of the Building which have been modified or installed by Lessee, and the non-structural elements of all doors and entrances and exterior window plate glass, in good clean order, condition and repair, and shall deliver same to Lessor at the termination of this Lease in good order and condition, normal wear and tear and damage by fire or other casualty excepted. Except for Lessor's obligations set forth above and except for any damage caused by the acts of negligence by Lessor or its agents within the Premises, Lessee agrees to maintain said Premises in the same condition, order and repair as they are at the commencement of said Term, excepting only reasonable wear and tear arising from the use thereof and damage by fire or other casualty. 19.Brokers. Lessor and Lessee each represent to the other that it has had no dealings with any real estate broker or agent in connection with the negotiation orthis Lease, except for UGL Services — Equis Operations, representing Lessee ("Lessee's Broker"), and Cushman Wakefield - CPSWFL, representing Lessor ("Lessor's Broker"). Lessor shall pay each of Lessee's Broker and Lessor's Broker, a brokerage commission pursuant to a separate agreement. Lessor acknowledges Lessee's Broker's commission is equal to three percent (3%) of the total rent due by Lessee in the initial Term of this Lease, including all escalations but excluding any free or abated Rent. In the event Lessor does not timely pay Lessee's Broker such brokerage commission, Lessee may offset the amount of Lessee's Broker's commission against Rent due to Lessor and shall pay Lessee's Broker its commission directly. 20.Emu:ggugy. If Lessor is unable or unwilling to take action which it is obligated to take hereunder where an emergency has occurred with respect to the Premises, then Lessee may take such action as is reasonably necessary to protect the Premises and persons or property in the Premises and Lessor shall, within thirty (30) days after written notice thereof from Lessee reimburse Lessee for its reasonable out-of-pocket expenses incurred in curing such emergency; provided, however, should Lessor fail to reimburse Lessee within said thirty (30) day period, then Lessee may, at its option, offset such amount against subsequent rent due under this Lease. 21. Lessor hereby represents that Lessor is the owner in fee simple of the Premises, including the Building and all improvements thereon and has the right and authority to enter into this Lease. To the best of Lessor's knowledge, Lessor hereby represents to Lessee that no covenants, restrictions, liens, or other encumbrances affecting the real property upon which the Building is constructed shall interfere or adversely affect Lessee's Permitted Use of the Premises. Lessor further represents that Lessor and those signatories executing this Lease on behalf of Lessor have full power and authority to execute this Lease. Lessor agrees that Lessor will not make any material modifications to the Building or Premises (including, without limitation, the parking areas, driveways and walks) without Lessee's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed. Lessee shall be entitled to the use of the parking are in accordance with a parking ratio of not less than one (1) space per one thousand (1,000) square feet of the Premise or such greater amount as may be required by local code, such that Lessee shall have available to it at no additional cost not less than eight (8) parking spaces and two (2) parking spaces designated as handicapped parking spaces (or such greater number as may be required by applicable code) in close proximity to the Premises for Lessee's exclusive use. Upon request by Lessee, at any time and from time to time during the Term of this Lease and any extensions thereof, Lessor agrees to designate additional existing parking spaces as handicapped parking spaces, as required by applicable code or Lessee's use, if available. 22.Compliance with Laws. Both parties hereby agree to comply with all applicable federal, state and local laws, ordinances, rules and regulations ("Laws") throughout the Term of the Lease. Lessor represents and warrants to Lessee that as of the Commencement Date the Premises, the Building, and the parking areas are in compliance with all Laws, including, without limitation, applicable zoning laws, ordinances, rules and regulations and with applicable instruments affecting title to the Premises. Lessor further represents that it has received no notices or communications from any public authority having jurisdiction alleging violation of any Laws relating to the Premises or the Building or improvements thereon and has received no notices alleging any material violation of any title instrument. Without limiting the generality of the foregoing, Lessor represents that (a) the use of the Premises and the Building and improvements thereon for purposes of operation of a dialysis clinic and related medical and business offices is permitted by and will not violate applicable Laws and does not constitute a "non-conforming use" thereunder and (b) the Premises, the Building, and the parking areas materially comply with all applicable Laws relating to handicapped accessibility, including, without limitation, the Americans with Disabilities Act. If at any time or from time to time any Alterations, including, without limitation, structural Alterations, are required in order for the Premises or Building to comply with any generally applicable Laws from time to time applicable to the Premises (but not Lessee's specialized use as a medical facility), Lessor shall immediately make such Alterations at its sole cost and expense or, if the cost of such Alterations exceed $50,000, terminate the Lease with six (6) months prior written notice to Tenant and payment of the unamortized cost of Lessee's tenant improvements. If any portion of the Premises is deemed untenantable as the result of Lessor's failure to make such Alterations, then Rent shall abate in proportion to the untenantability of the Premises. In the foregoing sentence, "proportion n" shall mean the ratio of square footage to the entire square footage of the Premises If at any time or from time to time any Alterations, including, without limitation, structural Alterations, are required in order for the Premises to comply with any Laws specifically applicable to the Premises due to Lessee's use as a dialysis facility, Lessee shall immediately make such Alterations at its sole cost and expense. Lessor represents and warrants to Lessee that Lessor is not a "referring physician" or a "referral source" as to Lessee for services paid for by Medicare or a state health care program, as the terms are defined under any federal or state health care anti-refen•al or anti-kickback, regulation, interpretation or opinion ("Refelral Source"). Lessor covenants, during the term of this Lease, it will not knowingly (a) take any action that would cause it to become a Referral Source as to Lessee or (b) sell, exchange or transfer the Premises to any individual or entity who is a Referral Source as to Lessee. 23.Intentionally Deleted. 24.Lessee to Subordinate. Lessee shall, upon request of the holder of a mortgage or deed of trust in the nature of a mortgage, which holder is a commercial or institutional lender ("Mortgagee") subordinate any interest which it has by virtue of this Lease, and any extensions and renewals thereof to any mortgages or deeds of trust placed upon the Premises by Lessor, if and only if such Mortgagee shall execute, deliver and record in the appropriate registry of deeds a recognition and non-disturbance agreement in form and content substantially similar to Exhibit E attached hereto and incorporated herein by reference or in a form otherwise mutually agreeable to Lessee, Lessor and the lender. Such agreements shall provide by their terms that notwithstanding any foreclosure of such mortgage or deed of trust Lessee may continue to occupy the Premises during the Term of this Lease or any extensions or renewals thereof under the same terms, conditions and provisions of this Lease unless Lessee shall be in default beyond any applicable grace periods provided for herein. Lessor shall at or prior to the Commencement Date, secure from Lessor's present mortgagee of the Premises a non-disturbance agreement in a form reasonably acceptable to Lessee. Lessor shall also secure from any future mortgagee or lienholders of Lessor non-disturbance agreements during the initial Term or any renewal periods, if exercised. Lessee represents and warrants that as of the Effective Date no monetary encumbrances or other liens affect the Premises or the real property on which the Premises is located other than those arising from Taxes not yet due or payable. 25 . Quig!-E-Qymgut. Lessee, upon paying the Rent, additional rent and other sums due under this Leåse, and subject to all of the terms and covenants of this Lease, on Lessee's part to be kept, observed, and performed, shall quietly have and enjoy the Premises during the Term of this Lease. Lessor agrees that Lessee shall have continuous, peaceful, uninterrupted and exclusive possession and quiet enjoyment of the Premises during the Term of this Lease. 26.Memorandum of Lease. Lessor agrees to enter into and execute a memorandum of this Lease in the form attached hereto and incorporated herein as Exhibit G. Upon Lessor's execution of the Memorandum of Lease, Lessor shall forward to Lessee said memorandum for Lessee's approval, execution and recording. Lessee shall be responsible for the cost of recording the same. 27.Notices. All notices, demands and requests which may be or are required to be given by either party to the other shall be in writing and shall be either (a) sent by registered or certified mail, return receipt requested, postage prepaid, (b) hand delivered or (c) sent by overnight courier such as Federal Express. All notices to Lessor should be addressed to Lessor at Southern Otter, LLC, c/o Harm Zukerman, 2778 Cumberland Blvd., #380, Smyrna, Georgia 30080; Telephone: (239) 489-3600; Facsimile: (404) 949-9949, with a copy to Frank T. Callaway, Suite 812, 2965 Pharr Court South, N.W., Atlanta, Georgia 30305, Facsimile (866) 589-7866 or at such other place as Lessor may from time to time designate in written notice to Lessee. All notices to Lessee shall be addressed to Lessee c/o DaVita Inc., 601 Hawaii Street, El Segundo, California 90245, Attention: General Counsel, Telephone: (310) 536-2400, Facsimile: (310) 536-2679, with copy to DaVita Inc. 5200 Virginia Way, Brentwood, Tennessee 37027; Attention: Group General Counsel, Telephone: (615) 341-5890; Facsimile: (615) 320-4442 or to any such other place as Lessee may from time to time designate in written notice to Lessor. All notices, demands and requests which shall be served upon Lessor and Lessee in the manner aforesaid shall be deemed sufficiently served or given for all purposes hereunder. 28. Each of Lessor and Lessee agrees at any time and from time to time upon not less than fifteen (15) business days' prior written request by the other to execute, acknowledge and deliver to the other an estoppel certificate in the from attached hereto as Exhibit F certifying that (a) this Lease is unmodified and in full force and effect (or if there have been modifications that the same is in full force and effect as modified and stating the modifications), (b) the dates to which the Rent and other charges have been paid in advance, if any, and (c) all of the defaults of Lessor or Lessee hereunder, if any, (and if there are no defaults a statement to that effect) and any other information reasonably requested, it being intended that any such estoppel certificate delivered pursuant to this Section 28 may be relied upon by any prospective purchaser of the Premises or any mortgagee or assignee of any mortgage upon the fee or leasehold of the Premises or by any prospective assignee of this Lease or sublessee of the whole or any portion of the Premises and/or by other party interested in the Premises or any part thereof. 29.Holding Over. In the event Lessee remains in possession of the Premises after the expiration of the term of this Lease, or any extensions hereof without the written consent of Lessor, this Lease shall continue on a month to month basis, terminable by either party upon thirty (30) days prior notice and Lessee shall be obligated to pay holdover Rent at a rate of 1.15 times the then current rate (plus all adjustments) and all other sums then payable hereunder prorated on a daily basis for each day that Lessor is kept out of possession of the Premises. 30.Binding Effect. All covenants, agreements, stipulations, provisions, conditions and obligations herein expressed and set forth shall extend to, bind and inure to the benefit of, as the case may require, the successors and assigns of Lessor and Lessee respectively, as fully as if such words were written wherever reference to Lessor or Lessee occurs in this Lease. 31.Complete Agreement. Any stipulations, representations, promises or agreements, oral or written, made prior to or contemporaneously with this agreement shall have no legal or equitable consequences and the only agreement made and binding upon the parties with respect to the leasing of the Premises is contained herein, and it is the complete and total integration of the intent and understanding of Lessor and Lessee with respect to the leasing of the Premises. With respect to the Request for Proposal dated January 31, 2012, addressed to Lessor's Broker from Lessee's Broker (the "RFP"), Lessor and Lessee agree and acknowledge that all rights and obligations of the parties under the RFP that were not fully performed as of the Effective Date have been subsumed or incolporated into, or superseded and/or modified by, this Lease, and that as of the Effective Date the RFP is terminated and of no further force or effect. 32. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. 33.Applicable—Lau. The laws of the State of Florida shall govern the validity, performance and enforcement of this Lease, without regard to such State's conflict-of-law principles. 34.Force Majeure. Whenever a day is appointed herein on which, or a period of time is appointed within which, either party hereto is required to do or complete any act, matter or thing, the time for the doing or completion thereof shall be extended by a period of time equal to the number of days on or during which such party is prevented from, or is interfered with, the doing or completion of such act, matter or thing because of strikes, lock-outs, embargoes, unavailability of labor or materials, wars, insurrections, rebellions, civil disorder, declaration of national emergencies, acts of God, or other causes beyond such party's reasonable control. Notwithstanding the foregoing, this Section shall not apply to the payment of Rent or other sums due hereunder from Lessee to Lessor. 35.Amendment. This Lease and the exhibits attached hereto and forming a part hereof set forth all the covenants, promises, agreements, conditions and understandings between Lessor and Lessee concerning the Premises, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Lessor or Lessee unless reduced to writing and signed by them. 36.Lessee Improvements. Lessee shall construct its tenant improvements to the Premises ("Lessee Improvements"). Lessee shall contract for the installation of Lessee Improvements with a contractor of choice. Lessor and Lessee shall mutually approve the plans and specifications of Lessee Improvements prior to the commencement of work. Lessor shall not charge Lessee any fee or other charges for the supervision and/or overhead associated with the construction of Lessee Improvements. All Lessee's Improvements shall be done in a good and workmanlike manner and in compliance with all applicable laws, ordinances, building and safety codes, regulations and orders of the federal, state, county or other governmental authorities having jurisdiction thereof. Without in any way limiting the obligation of Lessee under the Lease, Lessee shall indemnify, defend and hold harmless Lessor from and against claims, damages, losses an expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of Lessee Improvements. Notwithstanding the foregoing, Lessee Improvements shall not include the work involved with bringing electrical and water utilities to the Premises and for the separate metering for said utilities. 37.Intentionally Deleted. 38.Lessor's Sale of the Building. Lessor may, at any time, without the prior consent of Lessee, contract to and/or perform any of the following transactions with respect to an interest in Lessor, the Lease, the Premises, the realty underlying the Premises, and/or any portion of or interest in the realty or improvements owned or hereafter acquired by Lessor: sale, purchase, exchange, transfer, assignment, lease, conveyance (collectively referred to herein as "Sale"); and/or encumbrance, pledge, mortgage, deed of trust, hypothecation or sale and leaseback transaction. From and after a Sale, Lessor shall be released from all liability to Lessee and Lessee's successors and assigns arising from this Lease because of any act, occurrence or omission of Lessor occurring after such Sale, and Lessee shall look solely to Lessor's successor in connection with the same; provided, however, that Lessor shall not be released from liability to Lessee and Lessee's successors and assigns from this Lease because of any act, occurrence or omission of Lessor occurring prior to such Sale, unless such liability is expressly assumed by Lessor's successor-in-interest in the Premises. Within thirty (30) days following the effective date of a Sale, Lessor shall notify Lessee whether Lessor's successor-in-interest and assignee to this Lease would or would not be a Referral Source as described in Section 22 above. 39.Lessee's Roof Rights. If the Building does not have cable television service, then LeSsee shall have the right to place a satellite dish on the roof at no additional fee, provided such placement shall be at Lessee's sole cost and expense, and such placement does not affect any roof warranties and any damages or repairs arising from such placement are the responsibility of the Lessee. 40.Regulatory Compliance. In the event Lessor, or Lessor's successors or assigns become a Referral Source as described in Section 22 above, this Section 40 shall apply shall have no effect until such time: 40.1Referral Source. Lessor and Lessee hereby acknowledge and agree that it is not a purpose of this Lease or any of the transactions contemplated herein to exert influence in any manner over the reason or judgment of any party with respect to the referral of patients or business of any nature whatsoever. It is the intent of the parties hereto that any referrals that may be made directly or indirectly by Lessor to Lessee's business, shall be based solely upon the medical judgment and discretion of a patient's physician while acting in the best interests of the patient. Lessor and Lessee hereby agree that the Rent and any increases in the Rent reflect fair market value and do not take into account the volume or value of referrals or business that may otherwise be generated between the parties for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs. 40.2Termination Due to Legislative or Administrative Changes. In the event that there shall be a change in applicable health care law or the interpretation thereof, including, without limitation, Medicare or Medicaid, statutes, regulations, or general instructions, (or the application thereof), the adoption of new legislation or regulations applicable to this Lease, the implementation of a change in payment methodology in any material third pany payor reimbursement system, or the initiation of an enforcement action with respect to any applicable health care law, any of which affects the continuing legality of this Lease, then either party may, by notice, propose an amendment to conform this Lease to applicable laws. If notice of such proposed change is given and the parties hereto are unable to agree within ninety (90) days upon an amendment, then either party may terminate this Lease by ten (10) days' advance written notice to the other party, unless a sooner termination is required under applicable law or circumstances. 40.3Exclusions. During the Term of this Lease, Lessor shall notify Lessee of any exclusion of Lessor or its affiliates from participation in any federal health care program, as defined under 42 U.S.C. 51320a-7b (f), for the provision of items or services for which payment may be made under such federal health care programs ("Exclusion") within two (2) business days of learning of any such Exclusion or any basis therefore. Lessee shall have the right to immediately terminate this Lease and any and all other agreements between Lessor and its affiliates on the one hand and Lessee and its affiliates on the other hand, upon learning of any Exclusion or any reasonable basis therefore against the other, its affiliates and/or any employee, contractor or agent engaged by any of them to provide items or services. 40.4Medicare Access to Books and Records. In the event, and only in the event, that Section 952 of P.L. 96-499 (42 U.S.C. Section 1395x(v)(1)(I)) is applicable to this Lease, Lessee and Lessor agree as follows: (a) until the expiration of four (4) years after the termination of this Lease, Lessor shall make available (at Lessee's cost and expense), upon written request by the Secretary of the federal Department of Health and Human Services or upon request by the Comptroller General of the United States, or any of their duly authorized representatives, this Lease, and books, documents and records of Lessor that are necessary to certify the nature and extent of the costs incurred pursuant to this Lease; (b) if Lessor carries out any of the duties of this Lease or other contract between the parties through a subcontract, with a value or cost of $10,000 or more over a twelve-month (12) period, with a related organization, such subcontract shall contain a clause to the effect that until the expiration of four (4) years after the furnishing of such services pursuant to such subcontract, the related organization shall make available, upon written request to the Secretary of the federal Department of Health and Human Services or upon request to the Comptroller General of the United States, or any of their duly authorized representatives, the subcontract, and books, documents and records of such organization that are necessary to verify the nature and extent of the costs incurred pursuant to such subcontract; and (c) Lessor shall notify Lessee immediately of the nature and scope of any request for access to books and records described above and shall provide copies of any books, records or documents to Lessee prior to the provision of same to any governmental agent to give Lessee an opportunity to lawfully oppose such production of documents if Lessee believes such opposition is warranted. In addition, Lessor shall indemnify and hold Lessee harmless from any liability arising out of any refusal by Lessor to grant access to books and records as required above. Nothing herein shall be deemed to be a waiver of any applicable privilege (such as attorney client privilege) by Lessee. In addition, Lessee shall indemnify and hold Lessor harmless from the cost and liability arising out of any of the foregoing requests for access to books and records as required above. 40.5Representations and Warranties of Lessee. Lessee represents and warrants to Lessor as follows: (a)Non-Exclusion. Neither Lessee nor any of its affiliates are excluded from participation in any federal health care program, as defined under 42 U.S.C. S1320a-7b (f), for the provision of items or services for which payment may be made under such federal health care programs; and (b)Business Terms. To Lessee's knowledge: (i) the Premises do not exceed, that which is reasonable and necessary for the legitimate business of Lessee; (ii) Lessee's Proportionate Share does not exceed Lessee's pro-rata share of expenses for the space based upon the total space anticipated to be used by Lessee; and (iii) the rental charges: (1) are set in advance, (2) are consistent with fair market value, (3) do not take into account the volume or value of any referrals or other business generated between the parties, nor do they include any additional charges attributable to the proximity or convenience of Lessor as a potential refen•al source and (4) would be commercially reasonable even if no referrals were made between Lessee and Lessor or their respective affiliates. 40.6 Re resentations and Warranties of Lessor. Lessor represents and warrants to Lessee as follows: (a)Non-Exclusion. Neither Lessor nor any of its affiliates (i) are excluded from participation in any federal health care program, as defined under 42 U.S.C. S1320æ7b (f), for the provision of items or services for which payment may be made under such federal health care programs; or (ii) have arranged or contracted (by employment or otherwise) with any employee, contractor or agent that Lessor or its affiliates know or should know are excluded from participation in any federal health care program; (b)Advisory Opinion. Lessor shall not, directly or indirectly, request or cause an Advisory Opinion to be requested regarding or relating to the legality of this Lease or the transactions contemplated hereunder or substantially similar circumstances from any governmental body, including without limitation the U.S. Department of Health and Human Services Office of Inspector General or the Centers for Medicare and Medicaid Services without the prior written concurrence of Lessee, whether pursuant to this Section or otherwise. All submissions of any nature in connection with an Advisory Opinion request shall be approved in writing by Lessee prior to submission; and (c)Business Terms. To Lessor's knowledge: (i) the Premises do not exceed that which is reasonable and necessary for the legitimate business of Lessee; (ii) Lessee's Proportionate Share do not exceed Lessee's pro-rata share of such expenses for the space based upon the total space anticipated to be used by Lessee; and (iii) the rental charges: (1) are set in advance, (2) are consistent with fair market value, (3) do not take into account the volume or value of any referrals or other business generated between the parties, nor do they include any additional charges attributable to the proximity or convenience of Lessee as a potential referral source and (4) would be commercially reasonable even if no referrals were made between Lessee and Lessor or their respective affiliates. 41.Cooperation with Lessee's Cost Reporting Responsibilities. Lessor's full cooperation with applicable authorities in connection with cost reporting is essential for Lessee's continued operation of its business. Therefore, Lessor agrees to provide to Lessee, at Lessee's cost, within thirty (30) days of Lessee's request, any and all information that is reasonably necessary for Lessee to fulfill its cost reporting requirements to such applicable authorities. 42.Protected Health Information. (a)Lessor acknowledges and agrees that from time to time during the Term, Lessor, its representatives or assigns may be exposed to, or have access to, Protected Health Information ("PHI"), as defined by Health Insurance Portability and Accountability Act of 1996, 45 CFR Parts 160 and 164. Lessor agrees that it will not use or disclose PHI for any purpose unless required by a court of competent jurisdiction or by any governmental authority. (b)Lessor shall preserve any "Confidential Information" of or pertaining to Lessee and shall not, without first obtaining Lessee's prior yn•itten consent, disclose to any person or organization, or use for its own benefit, any Confidential Information of or pertaining to Lessee during and after the Lease Term, unless such Confidential Information is required to be disclosed by a court of competent jurisdiction or by any governmental authority. As used herein, the term "Confidential Information" shall mean any business, financial, personal or technical information relating to the business or other activities of Lessee that Lessor obtains in connection with this Lease. 43.Consent. Unless otherwise expressly stated herein, whenever any consent is required under this Lease, such consents shall not be unreasonably withheld, conditioned or delayed, and the parties' reasonable satisfaction shall be sufficient for any matters under this Lease. 44.Approval by DaVita Inc. as to Form. The parties acknowledge and agree that this Lease shall take effect and be legally binding upon the parties only upon full execution hereof by the parties and upon approval by DaVita Inc. as to the form hereof. 45.Counterparts. This Lease may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 46.Radon Gas Notification. Pursuant to Section 404.056(8) of the Florida Statutes (1998), the following notification regarding radon gas is hereby made, and all parties executing this Lease acknowledge receipt of this notification: RADON GAS: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county health department. 47.Late Payments. Should Lessee fail to pay when due any installment of Rent or any other sum payable to Lessor under the terms of this Lease, then interest at the Prime Rate as published by The Wall Street Journal (or other similar publication in the event of discontinuation of The Wall Street Journal) plus two percent (2%) and shall accrue from and after the date on which any Such sum shall be due and payable, after expiration of all applicable notice and cure periods, and such interest together with a late charge of $50.00 to cover the extra expense involved in handling such delinquency shall be paid by Lessee to Lessor at the time of payment of the delinquent sum. [Signature page follows] IN TESTIMONY WHEREOF, as a sealed instrument, as of the day and LESSOR: SOUTHERN OTTER, LLC, a Florida limited liability company By: Name: Title• , Date: LESSEE: DVA HEALTHCARE RENAL CARE, INC., a Nevada corporation Name: Richard Kimball-Cook Title: Date:Print Name: By: Print Name: FOR LESSEE 'S INTERNAL PURPOSESONLY: APPROVED AS TO FORM ONLY: By: Name: Amy Marie Sanford Title: Group General Counsel m TESTIMONY as a sealed instrument, as of the day and LESSOR: SOUTHERN OTTER, LLC, a Florida limited liability company By: Name:Print Name: Title: Date: Print Name: LESSEE: DVA HEALTHCARE RENAL CARE, INC., FOR LESSEE'S INTERNAL PURPOSES ONLY: APPROVED AS TO FORM ONLY: By: Name: Amy Marie Sanford Title: Group General Counsel 23 IN TESTIMONY WHEREOF, as a sealed instrument, as of the day and LESSOR: By: Name: Title: Date:Print Name: LESSEE: DVA HEALTHCARE RENAL CARE, INC., a Nevada corporationPrint Name: By: Name: Richard Kimball-CookPrint Name: SOUTHERN OTTER, LLC, a Florida limited liability company Title: Date: FOR LESSEE'S INTERNAL PURPOSES ONLY: APPROVED AS TO FORM ONLY: By: Name: Amy Marie Sanford Title: Group General Counsel 23 A LEGAL DESCRIPTION/BUILDING SITE PLAN DESCRIPTION: A PARCEL DF LAND LYING IN SECTION 34, TOWNSHIP 45 SOUTH, RANGE 24 EAST. LEE COUNTY. FLORIDA, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORER THE AFORESAID SECTIÜN 34; THENCE RUN s.or:roo æ€. ALDIVG THE VEST LINE OF SAID SECTIDM 34 FUR 113.65 FEET; THENCE RUN N.89$53'34*E. FDR A DISTANCE 7%EO FEET; THENCE RUN SOD+OC26'Ef FOR A DISTANCE 05515.6B FEET POINT DM 4 CIRCULAR CURVE TD THE LEFT HAVING AS ITS ELEMENTS A RADIUS 51546 FEET. A CENTRAL ANGLE OF 043006% CHORD DEARING AND RADIAL TD THE PREVIOUSLY DESCRIBED LiNE; THENCE RUN ALONG SAID CURVE FOR AN ARC DISTANCE 0.5 40,50 FEET TO A PDJNT DN A CIRCULAR CURVE CONCAVE TO THE *IDRTHEAST HAVING AS Irs ELEMENTS A RADIUS DF 89672 FEET. A CENTRAL ANGLE AND A CHORD BEARING OF s.13 011'04"E, AVD RADIAL THE PREVIOUSLY DESCRIBED CURVE/ THENCE RUN SAID CURVE FOR Alv ARC DISTANCE üF 91.75 FEET A POINT TANGENCY; THENCE RUN S.16+06'56'Ei FDR A DISTANCE OF 2300 FEET; THENCE RUV Si9 004Q4 4E. A DISTANCE OF 6872 FEET; THENCE RUN S.OVOff40'E FDR DISTANCE 182.04 FEET; THENCE RUN FüR A DISTANCE LTF 1321 FEET; THENCE RUN FOR A DISTANCE DF 3300 FEET THE F BEGINNING; THENCE RU,V FOR A DISTANCE üF 5905 FEET; THENCE RUN SOO*08'40'E FUR A DISTANCE 232.50 FEET; THENCE RUN FOR A DJSrANCE üF 166.55 FEET TO A POINT DF CURVArURE OF A CIRCULAR CURVE CONCAVE NORTHEAST HAVING FOR ITS ELEMENTS A RADIUS F 25.00 FEET, A CENTRAL ANGLE DF AND A CHORD BEARING THENCE RUN .4LüVG SAID CURVE FDR A DISTANCE A POINT OF TANGENCY; THENCE RUN FDR DISTANCE LV 192.50 FEET A LV CURVATURE DF A CURVE CONCAVE THE SOUTHEAST HAVING FDR ITS ELEMENTS RADIUS 2500 FEET, A CENTRAL AVGLE F AND CHORD BEARING DF THENCE RUN AL ONG SAID CURVE .4 DJSTANCE OF 39.27 FEET ro Pü1pVT OF TUNGENCY; THENCE RUN' FDR A DISTANCE 107,50 FEET TÜ THE BEGINNING. PARCEL CüNTA1/VS 4426785 SQUARE FEET, MORE OR LESS BEARINGS ARE BASED ON THE NORTH RIGHT-OF-WAY LI/VE CF GLADIüLUS DRIVE AS BEING JL7HI'%I PLS #4631 AUGUST 200B (Building Site Plan attached) Gladiolus Dr G a引0 9 Dr Ft. Myers, ) 3087120, 12 CO吅卜* 865 County Hwy 865 B PREMISES FLOOR PLAN (attached) ANDERSON CF . TRUE urzps.VALUE DIMENSIONED FLOOR PLAN Ft. Myers, C FORM OF COMMENCEMENT DATE MEMORANDUM With respect to that certain lease ("Lease") dated March 2012, by and between SOUTHERN OTTER, LLC, a Florida limited liability company ("Lessor") and DVA HEALTHCARE RENAL CARE, INC., a Nevada corporation ("Lessee"), whereby Lessor leased to Lessee and Lessee leased from Lessor space located at 8850 Gladiolus Drive, Fort Myers, Florida 33908 (the "Premises"). Lessee and Lessor hereby acknowledge as follows: (1)Lessor delivered and Lessee accepted possession of the Premises to Lessee on (the "Possession Date"); (2)The Term of the Lease commenced on(the "Commencement Date"); and (3)Lessee shall commence payment of Rent on (4)The Premises containapproximate rentable square feet of space. All capitalized terms herein, not otherwise defined herein, shall have the meaning assigned in the Lease. IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this LESSOR: SOUTHERN OTTER, LLC, aWITNESSES: day of, 20 Florida limited liability companyPrint Name: By: Name: Title: LESSEE: DVA HEALTHCARE RENAL CARE, INC., a Nevada corporationWINESSES: Print Name: By: Name: Title:Print Name: FOR LESSEE'S INTERNAL USE ONLY APPROVED AS TO FORM ONLY: By: Name: Amy Marie Sanford Title: Group General Counsel 6 Ft. Myers, D FORM W-9 (attached) T/N on pago {3, Émptoycr idontiiicotin nurrbB.r NDle. Il Ll-uunt 15 in mare nutni:er la 'flier.cne na•-na, sag the Ghaq on tor quk*einü$ on PartCertification Undor pcnnltj% Gt pariury. I carti%t lh;e; I - atu:ttkf 2.I Service 'ltRSJ that I no gublcct to R:ackup withholding, 3.I U.S. citizen or offer U.S- (defined belW/). Cortiticotfon tnslrucüons, You crt155 cut 2 y...•u been notified the ENS thuP. you are currenlly to wthhcddir.g report an your cive± Fat' paid. or secured prop-Jrt% cgnce!lülico of debt. ccntrihl.%iMG kD an inclividlml raiircrncnt: {IRA), myrnant5 oihor than and tgauiféd to sign Iha cenlllcslion„ but you pre.fdé ycur corr03t- TIN, $w lhg• instructlonsu pago Sign HoroSignub.re ot Ij.S, purr-on Gonoral Instructions eccli0f% references 10 the Intewqul Code othcnuiGG noted, Purpose of Form A who 15 required [o {Oti.lrn the IHS must ycur correct numbar (TINI to rex:rt., •yco, real transactiorw. acquigiliDt1 e! scoured propart'9% cancellation Of or you Lean IPA. Use W-g an?/ i' you 8 LIS. par80ß 'ihch.dng to y:ut ebtreel TIN ID the pergwl rce.jG%ting it llhü andi whcn la: 1. Cect.Æy Ihat the TIN you are nivhg 15 oarrcct wailinp s 2, CEft:$y lhi# yva ,-ye subject ID bucY*L9 withholenqt or 3. CIDltn exem>.'bon iron i! you U.S. 8130 that. I-IS- •scur share af income t{om B LIS, IrFÆo or bJ5invs hcomm Note, I! g ruins torm olhertflß*l Fc«rn IN-O •rt.nr TIN, ue the i.l IL Z gubstantlal*r• to •ihi5 Farm W.D. Oerlftiüon of a U.S. purpc«s, congidered u uS. F.•erutl il ere: •Art indi.iciual who is tiS, cilixcn or ILS. unent •A corporathn, cc«rganye •cr essæiation croatod or En or thn thn (Iri.End l'gihgr a fgrr:ign cr •A domast]c Irugt (as dßllred In *ic4.lbtions Göc.tlr,n &31.7701-7}. Specill tuleg ror partnerehipg, t.hE1 a tradt or tita IJnitad are gene•e..ly 10 PEY g WIIhhoidng tax co b"'/ shan of ir,crxro from Fum.gr. In whara 8 FG

Sushi Hut, Inc.

SHOPPING CENTER LEASE Regency Centers, L.P. (Landlord) And Sushi Hut, Inc. D/B/A Sushi Hut Express (Tenant) At Friars Mission Center San Diego, CA Dated INITIAL TABLE OF CONTENTS ARTICLE 1. INTRODUCTORY PROVISIONS ARTICLE 2. PREMISES ARTICLE 3. TERM ARTICLE 4. RENT ARTICLE 5. TAXES AND ASSESSMENTS ARTICLE 6. TENANT'S CONDUCT OF BUSINESS ARTICLE 7. USE OF PREMISES ARTICLE 8. COMMON AREAS ARTICLE 9. HAZARDOUS SUBSTANCES ARTICLE ALTERATIONS TO PREMISES ARTICLE 11. LIABILITY, INDEMNITY AND INSURANCE 10 ARTICLE 12. DESTRUCTION 12 ARTICLE 13. MAINTENANCE OF PREMISES 12 ARTICLE 14. UTILITIES AND GARBAGE DISPOSAL 13 ARTICLE 15. LIENS 13 ARTICLE 16. SIGNAGE 14 ARTICLE 17, ASStGNMENT AND SUBLETTING 14 ARTICLE 18. DEFAULTS BY TENANT ARTICLE 19. LIMITATION OF LANDLORD'S LIABILITY 18 ARTICLE SUBORDINATION AND ATTORNMENT 18 ARTICLE ESTOPPEL CERTIFICATES 18 ARTICLE 22. QUIET ENJOYMENT ARTICLE 23. SURRENDER AND HOLDING OVER ARTICLE 24. CONDEMNATION ARTICLE 25. MISCELLANEOUS 20 ARTICLE 26. RADIUS RESTRICTION 22 ARTICLE 27. OPTION TO EXTEND 23 ARTICLE 28. ADDITIONAL MAINTENANCE REQUIREMENTS 23 ARTICLE 29. ADDITIONAL REQUIREMENTS FOR RESTAURANT USE IN PREMISES 23 ARTICLE 30. LANDLORD'S LIEN 24 ARTICLE 31. TENANT'S FINANCIAL STATEMENTS24 ARTICLE SECURITY DEPOSIT 24 EXHtBtT A27 EXHIBfT B28 EXHIBIT B29 EXHIBIT C30 EXHIBIT c.i32 EXHIBIT D33 EXHIBIT E36 EXHIBIT F37 FRIARS MISSION SHOPPING CENTER LEASE THIS LEASE, made as of theday of2006, by and between Regency Centers. L.P., a Delaware Limited Partnership (herein calied "Landlord"), and Sushi Hut, Inc., a California corporation (herein called dtTenant"). In consideration of the obligations of Tenant to pay rent and other charges as herein provided and in consideration of the other termst covenants and conditions hereof, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises described herein for the term and subject to the terms and conditions set forth herein. ARTICLE I.INTRODUCTORY PROVISIONS 1.1FUNDAMENTAL LEASE PROVISIONS. Certain fundamental provisions are presented in thÉ Section in summary form to facilitate convenient reference by the parties hereto: (a)Tenant's Trade Name (b)Term (c)Premises Space Number (d)GLA in Premises in Landlord Es Building GLA Tenant's Proportionate Share (g)Minimum Annua} Rent: (h)Percentage Rent (i)Commencement Date (k) Guarantor(s) (if none, so state) Default Rate: (m) Security Deposit New Answer File Sushi Hut Express (Section 7, 1) Sixty (60) months (Section 3.1) 1101B (Exhibit - Part 2) Premises Address: 5624 Mission Center Road San Diego, CA square feet (Section 1.5) 146,898 square feet (Section 1.5) Tenant's proportionate share shall be defined as the percentage that the gross leasable area ("GIN) of the Premises bears to the entire gross !easable area of Landlord's Building except as hereinafter provided. In determining Tenant's Proportionate Share of Common Area Costs and contribution for Taxes and Insurance, Landlord may exclude from the GLA of the Land10fd's Building any premises containing 7,500 or more square feet of GLA if the lease for such premises does not require the applicable tenant to pay a prorata share of Common Area Costs, Taxes or insurance, but in that event, Landlord shall deduct from the Common Area Costs, Taxes or Insurance any amounts payable by any such tenants specifically for items included in the Common Area Costs, Taxes or Insurance. MonthsMinimum Rent Minimum RentMinimum Rent (Monthly)(Per sq. ft. oi(Annual) GLA) 1 — 12$4,000.00$48.00$48,000.00 13 - 24$4, 120.00$49.44$49,440.00 25 36$4,243.33$50.92 37 - 48$4,370.83$52.45$52,450.00 49 - 60$4,501.67$54.02$54,020.00 plus applicable saies tax (Section 42) Three percent (3%) of Gross Sales Annually Less Minimum Annual Rent. ( f year 3% oi ait Gross Sales over (Section 4.4) The earlier of (i) one hundred twenty (1201 days after the date oi Landlord's delivery of the Premises to Tenant, or (ii) the date on which Tenant first opens for business in the Premises. (Section 3.1) Tenant shah use the Premises for a Japanese Sushi Restaurant and for no other use or purpose. (Article 7) Aaron Nguyen and Cindy Pham Larswin Mendoza (Exhibit D) The lesser of twelve percent (12%) per annum or the maximum lawful rate of interest permitted by applicable law $4,760.00 (n)Brokers (o)Estimated Common Area Costs for 2006 (p)Estimated Taxes for 2006 (q)Estimated Insurance for 2006 (r)Advenising and Promotion Fund (if none, so state) (s)Estimated Initial Monthly Payments Required Additional Rent Common Area Costs$383.33 Taxes$343.33 Insurance$33.33 Advertising and Promotion Fund (if none* so state) Pyion Signage Fee (if none, so state) Satellite Fee (if none, so state) Total Monthly Additional Rent State and County Sales Tax Total Monthly Payment at Commencement Date (t)Address for Notice To Landiord To Tenant: Regency Rea!ty Grouprepresenting Landlord and Facilities, inc. representing Tenant (Section 25.5) SQ60 per square foot per annum (Article 8) (Subject to annual adjustment) $4.12 per square foot per annum (Article 5) (Subject to annuat adjustment) $0.40 per square foot per annum (Article 11) (Subject to annual adjustment) N/A $4,000.00 N/A N/A $760.00 $4,760.00 c/o Regency Centers Corporation 1 21 Street Suite 200 Jacksonville, Florida 32202 Attention; Lease Administrator With a copy to. c/o Regency Centers Corporation 121 West Forsyth Sfreet Suite 200 Jacksonville, Florida 32202 Attention: Legal Department With a copy to: c/o Regency Centers Corporation 265 Santa Helena, Suite #21 1 Solana Beach, California 92075 Attention: Property Management Aaron Nguyen 7776 Hemphill Drive San Diegq California 82126* LEASE PROVISIONS 1.2REFERENCES AND CONFLICTS. References appearing in Section 1 .1 are to designate some of the other places in this Lease where additional provisions applicable to the particular Fundamental Lease Provisions appear. Each reference in this Lease to any of the Fundamental Lease Provisions contained in Section 1 .1 shall be construed to incorporate all of the terms provided for under such provisions, and such provisions shall be read in conjunction with all other provisions of this Lease applicable thereto. If there is any conflict between any of the Fundamental Lease Provisions set forth in Section 1 .1 and any other provision of this Lease, the latter shall control, 1.3EXHIBITS. The following drawings and speciat provisions are attached hereto as exhibits and hereby made a part of this Lease: Exhibit Legal Description of the Shopping Center Land as presently constituted (b)Exhibit Part 1 Site plan of Shopping Center Land; and Part 2 - Leasing Plan. (The Premises is identified on the Leasing Plan.) (c)Exhibit "C"Description of Tenant's Work and Work to be performed by Landlord, if any, in the Premises; and "C-1" Shopping Center Signage Criteria; and (d)Exhibit Guaranty Agreement (not an exhibit unless Guarantor is named in Section 1.1). "Guarantor" means the guarantor or guarantors named in Section 1 Exhibit "E"Requirements & Restrictions Exhibit "F"Tenant Improvements (g)Exhibit "G"Intentionally 0m itted (h)Exhibit "H"intentionally Omitted Exhibit I Intentionally Omitted 1.4THE SHOPPING CENTER; LANDLORD'S BUILDING. The "Shopping Center" means the land described in Exhibit "A" and improvements thereon constituting an integrated retail shopping center, as the same may be modified from time to time throughout the Term of this Lease. The structure or structures shown on Exhibit "B" as "Landlord ls Building," as the same may be altered* reduced or expanded from time to time throughout the Term of this Lease, is hereinafter called the "Landlord's Building. Landlord may at any time and from time to time change the shape, size, focation, number, height and extent of the improvements in the Shopping Center and eliminate or add any improvements to any portion of the Shopping Center and add land thereto or eliminate land therefrom. 1.5 GROSS LEASABLE AREA. At the Commencement Date, GLA means, with respect to the Premises, the number of square feet set forth in Section 1 .1 (d) and, with respect to the Landlord's Building, the number of square feet set forth in Section 1 .1 (e). GLA will change with additions or deletions to the Landlordi s Building and/or the Premises. The GLA is measured from the exterior face of exterior walls, the exterior face of service corridor walls and the centerline of interior demising walls. No deduction shall be made for columns, stairs, elevators or any internal construction or equipment. ARTICLE PREMISES 2.1LEASE OF PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises for the Term, at the rent, and upon the terms, covenants and conditions herein set forth. 2.2PREMISES DEFINED. The term *'Premises" means the space situated in the Landlord's Building in the location marked on Exhibit "B" and shall consist of the space thereat within the walls, structural floor and the bottom of the roof of Landlord's Building. 2.3DELIVERY OF PREMISES. Landlord agrees to deliver to Tenant, and Tenant agrees to accept from Landlord, possession of the Premises when Landlord advises Tenant in writing that the Landlord's Work in the Premises (if any) has been sufficiently completed to permit Tenant's Work to begin or when Tenant takes possession of the Premises, whichever first occurs. Landlord's notice thereof shall constitute delivery of the Premises without further act by either party. Landlord will deliver possession of the Premises to Tenant in its current "as-is" condition with the addition of only those items of work (if any) described on Exhibit "C". If Landlord encounters delays in delivering possession of the Premises to Tenant, this Lease will not be void or voidabie, nor wili Landlord be liable to Tenant for any loss or damage resulting from such delay. If the delay in possession is caused by Tenant (including delays caused by Tenant's failure to supply the information referred to in the following sentence), then the date of Landlord's delivery of the Premises to Tenant shall be deemed to be the date such delivery would have occurred but for Tenant's delay. Notwithstanding the foregoing, Landlord will not be obligated to deliver possession of the Premises to Tenant until Landlord has received from Tenant all of the following: (i) a copy of this Lease fully executed by Tenant, and a Guaranty, if any, executed by the Guarantor(s); (ii) the Security Deposit and the first installment of Minimum Annual Rent; and (iii) copies of policies or certificates of insurance as required under Article 1 1 of this Lease. If Tenant occupies the Premises prior to the Commencement Date, such early occupancy shall be subject to all of the terms and conditions of this Lease, and Tenant wit* not interfere with Landlord in the completion of Landlord's Work (if any), Landlord will give Tenant access for locks to be changed upon: (i) Tenant's acceptance of the Premises, (ii) Landlord's receipt of two sets of plans and specifications set forth in Exhibit "C', and (iii) Landlord's receipt of a copy of the contractor's insurance certificate Tenant Wii} pay ail expenses associated with changing the locks. 2.4 OPENING OF PREMISES. On or before ten (10) days after delivery of possession of the Premises to Tenant, Tenant shall commence the Tenants Work specified in Exhibit diligently and continually proceed to completion, and open for business on or before the Commencement Date specified in Section 1.1 In relation to Tenant's Work, Tenant shall execute the Notice of Commencement as Owner identifying Landlord only as the fee simple titleholder for purposes of permitting. By opening for business, Tenant shall be deemed to have acknowledged that all work (if any) required to be performed by Landlord in connection with the Premises and any and all other obligations to be performed by Landlord on or before the opening of the Premises have been fully performed, and that the Premises are at such time complete and in good, sanitary and satisfactory condition and repair without any obligation on Landlord's part to make any alterations, upgrades or improvements thereto. ARTICLE 3. TERM 3.1TERM OF THIS LEASE. The Term of this Lease shall commence on the Commencement Date specified in Section 1.1 (i) and shall continue for the number of months set forth in Section ARTICLE 4. RENT 4.1TENANT'S AGREEMENT TO PAY RENT. Tenant hereby agrees to pay Minimum Annual Rent, Percentage Rent and Additional Rent. The term "Rent" includes the Minimum Annual Rent, Percentage Rent and Additional Rent. 4.2 MINIMUM RENT* The minimum amount of rent Tenant shall pay Landlord for each Lease Year is the amount set forth in Section 1 .1 (g) (the "Minimum Annual Rent"). Minimum Annual Rent for the period from the Commencement Date to the first day of the month following such date shatl be prorated on a daily basis and shall be payable with and in addition to the first instanment of Minimum Annual Rent. The Minimum Annual Rent for each Lease Year (as defined below) shall be payable in twelve (12) equal monthly installments, in advance, on the first day of each calendar month. The first installment of Rent shall be due on Tenant's execution and delivery of this Lease to Landlord. 4.3LEASE YEAR DEFINED. The 'First Lease Year" means the period beginning on the Commencement Date and ending on the last day of the twelfth full calendar month thereafter. "Lease Year" means each successive twelve (12) month period after the First Lease Year occurring during the Terms 4.4PERCENTAGE RENT. Tenant agrees to pay Landlord a percentage rent (the "Percentage Rent") equal to the percentage set forth in Section 1.1 (h) times the amount of Gross Sales (as defined below) made during each Lease Year of the Term, less the amount of Minimum Annual Rent paid by Tenant for such Lease Year. The period between the Commencement Date and the end of the first Lease Year shall each be considered a Lease Year for the purpose of computing Percentage Rent. Notwithstanding anything contained in this Lease to the contrary, if the number of square feet of floor space in the Premises is reduced at any time during the Lease term due to casualty, condemnation or other cause to an amount less than that set forth in Section 1 .1 (d), then the break point for the particular calendar year and for each subsequent calendar year during the Lease Term shall be reduced to an amount equal to the quotient of (a) the aggregate Minimum Annual Rent set forth in Section 1 .1 (g) as such amount may be adjusted throughout the Term of this Lease, payable during such calendar year divided by (b) the Percentage Rental Rate set forth in Section 1.1 (h) ('Percentage Rental Rate"), 4.5 MONTHLY PAYMENT OF PERCENTAGE RENT; YEAR-END ADJUSTMENT. (a)Tenant shall furnish to Landlord, within twenty (20) days after the end of each calendar month during the Term, a complete statement, certified by Tenant (or a responsible officer thereof if Tenant is a corporation or limited liability company), of the amount of Gross Sales made from the Premises during said month, the statement to be in such form and style and contain such details and breakdown as Landlord may require. Tenant shall also furnish to Landlord with each such monthly statement a copy of any sales tax report filed with any taxing authority. Tenant shall pay to Landlord simultaneously with each said monthly statement the amount which is equal to the percentage set forth in Section 1.1 (h) times the amount of Gross Sales made during the month represented by said statement, minus the Minimum Annual Rent paid for such period. (b)Tenant will aiso furnish to Landlord within sixty (60) days after the end of each Lease Year a complete statement certified by Tenant (or a responsible officer thereof if Tenant is a corporation or limited liability company), showing in reasonable detail the amount of Gross Sales made during the preceding Lease Year and the amount paid to Landlord pursuant to Section 4.5(a) in such Lease Year. An adjustment shall thereupon be made with respect to the Percentage Rent as follows: If Tenant has paid to Landlord an amount greater than Tenant is required to pay as Minimum Annual Rent and Percentage Rent under the terms of Sections 4.2 through 4.4, Tenant shall receive a credit of such difference or, if the Lease has terminated, Landlord will refund such difference to Tenant within thirty (30) days after receipt of Tenantß statement. if it is determined that Tenant has paid an amount less than was required to be so paid, then Tenant shall forthwith pay such difference within thirty (30) days after notice from Landlord. (c)If any reports of Gross Sales required hereunder are not received by Landlord or Landlord's designee within ten (10) days following the due date for such report and such failure continues for an additional three (3) days after notice from Landlord of such failure, Tenant will pay to Landlord the sum of One Hundred Dollars ($100.00). Acceptance of such late charge shall not constitute a waiver of Tenant's default with respect to the submittal of any such report nor prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Lease, at taw or in equity. The parties hereby agree that such charge represents a fair and reasonable estimate of the cost which Landlord will incur by reason of the late submittal of the report. 4.6 GROSS SALES. (a)"Gross means the actual prices of all goods, wares, internet based sales and merchandise sold and the actual charges for ail services performed by Tenant or by any subtenant, licensee, concessionaire or other person in, at, from, or arising out of the use of the Premises, whether wholesale or retail, whether for cash or credit, or otherwise, and includes the value of all consideration received or promised for any of the foregoing, without reserve or deduction for inability or failure to collect, including, but not limited to, sales and services: (i) where the orders therefor originate in, at, from or arising out of the use of the Premises, whether delivery or performance is made from the Premises or from some other place and regardless of the place of bookkeeping for, payment of, or collection of any account; or (ii) made or performed by mail, telephone, or telecopy orders received or filled in, at or from the Premises; or (iii) made or performed by means of mechanical and other vending devices in the Premises; or (iv) which Tenant, or any subtenant, licensee, concessionaire or other person, in the normal and customary course of its business, wouid credit or attribute to its operation at the Premises or any part thereof. Any deposit not refunded shall be included in Gross SaEes in the month in which such deposit is (b)The following shall be excluded from Gross Sales: (i) any exchange of merchandise between stores of Tenant when such exchange is made solely for the convenient operation of Tenant's business and not for the purpose of consummating a sale made in, at or from the Premises; (ii) returns to shippers or manufacturers; (iii) cash or credit refunds to customers on transactions previously reported as Gross Sales; (iv) sales of fixtures, machinery and equipment, which are not stock in trade, after use thereof in the conduct of Tenant's business; and (v) amounts which are separately stated and collected from customers and which are paid by Tenant to any government for any sales or excise tax. No franchise, capital stock tax, tax based upon assets or net worth or gross receipts tax, and no income or similar tax based on income or proffts shall be deducted from Gross Sales. 4.7TENANT'S RECORDS AND STATEMENTS OF GROSS SALES. (a)The business of Tenant and of any subtenant, licensee, concessionaire or other person upon the Premises shall be operated so that an accurate and verifiable record of Gross Sales can be maintained and reported to Landlord. Furthermore, Tenant shall keep at all times during the Term, at the Premises or at a location in the vicinity of the Premises made known to Landlord, full, complete and accurate books of account and records in accordance with generally accepted accounting practices with respect to all operations of the business conducted in or from the Premises, including the recording of Gross Sales and the receipt of all merchandise into and the delivery of all merchandise from the Prem ises during the Term. Tenant shall retain such books and records, copies of all tax reports and tax returns submitted to taxing authorities, as well as copies of contracts, vouchers, checks, inventory records, dated cash register tapes, and other documents and papers in any way related to the operation of such business for at least three (3) years from the end of the period to which they are applicable, or, if any audit is required or if a controversy should arise between the parties hereto regarding the Rent payable hereunder, until such audit or controversy is terminated, even though such retention period may be after the expiration of the Term or earlier termination of this Lease. All such books and records shall be open at all reasonable times during the aforesaid retention period to the inspection of Landlord or its duly authorized representatives, who shall have full and free access to such books and records and the right to require of Tenant, its agents and employees such information or explanation with respect to such books and records as may be necessary for a proper examination and audit thereof. (b)The statements provided for in Sections 4.5(a) and (b) shall be accompanied by a certificate signed by Tenant (or, if Tenant is a corporation or limited liability company, by a responsible officer of Tenant) stating specifically that Tenant and/or such person has read the definition of "Gross SaEes" contained in this Lease, has examined the report for the period in question, and that such report accurately presents the Gross Sales of such period. Landlord shall be permitted to divulge the contents oi any of the statements provided for in Sections 4.5(a) or (b) only if such disclosure is made in connection with any financing arrangements or assignments or other transfers of Landlord i s interest in the Premises or in connection with any administrative or judicial proceedings in which Landbrd is involved. In the event Tenant is delinquent in furnishing to Landlord monthly Gross Sales statements for two (2) consecutive months, Landlord shall have the right to conduct an examination or audit of Tenant's books and records and Tenant agrees to pay the cost thereof, together with any deficiencies in Percentage Rent disclosed thereby, as Additional Rent upon demand, together with interest at the Default Rate. The monthly and annual statements required by Section 4.5 shaft be delivered to Landlord at the place to which notices are to be sent to Landlord pursuant to Section 25.3, whether or not any Percentage Rent is due. For the purposes of this Article, the term "responsible officer of Tenant" means the Chief Executive Officer or the Chief Financial Officer of Tenant or such other person reasonably acceptable to Landlord. 4.8ADDITIONAL AUDIT RIGHTS. The acceptance by Landlord of payments of Percentage Rent shall not prejudice Landlord's right to examine Tenant's books, records and accounts in order to verify the amount of Gross Sales. Landlord or its representatives mayi at any reasonable time, upon ten (10) days' prior written notice to Tenant, cause a complete or partial audit to be made of Tenant's books, records and other documents relating to the Premises (including the books and records of any subtenant, licensee or concessionaire) for all or any part of the three (3) year period immediately preceding the day of the giving of such notice by Landlord to Tenant* if such audit discloses that any of Tenants monthly or annual statements of Gross Sales understates Gross Sales made during the reporting period of the statement to the extent of two percent (2%) or mores Tenant shall pay to Landlord, as Additional Rent on demand, the cost of said audit in addition to the deficiency in Percentage Rent, which deficiency shall be payable in any event, together with interest at the Default Rate. 4.9ADDITIONAL RENT* Tenant shall pay, as additional rent (herein sometimes collectively called "Additional Rent"), all sums of money or charges of whatsoever nature (except Minimum Annual Rent and Percentage Rent) required to be paid by Tenant to Landlord pursuant to this Lease, whether or not the same is designated as "Additional Rent. " 4.10WHERE RENT PAYABLE AND TO WHOM; NO DEDUCTION; LATE CHARGE. Rent payable by Tenant under this Lease shall be paid to Landlord on or before the first day of each month without prior notice or demand therefor (except where such prior demand is expressly provided for in this Lease), without any deductions, set offs or counterclaims whatsoever, at the place to which notices are to be sent to Landlord or to such payee and at such place as may be designated by Landlord to Tenant in writing at least ten (10) days prior to the next ensuing Minimum Annual Rent installment payment date. Tenant acknowledges that, in addition to interest costs, the late payments by Tenant to Landlord of any Rent due under this Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impractical to fix, Such other costs include, without limitation, processing, administrative and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage, deed of trust, related loan documents or other documents encumbering or otherwise affecting the Premises, Landlord's Building or the Shopping Center. Accordingly, if any payment of Rent or other charges due hereunder is not received by Landlord in good funds on its due date, Tenant will pay to Landlord a late charge of five percent (5%) of the amount due. The parties agree that such late charge (as well as any other late charge under this Lease) represents a fair and reasonable estimate of the costs that Landlord will incur by reason of any late payment as hereinabove referred to by Tenant, and the payment of late charges and interest are distinct and separate in that the payment of interest is to compensate Landlord for the use of Landlord's money by Tenant, while the payment of late charges is to compensate Landlord for Landiord's processing, administrative and other costs Incurred by Landlord as a result of Tenant's definquent payments, Acceptance of a late charge or interest shall not constitute a waiver of Tenant's default with respect to the overdue amount nor prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Lease, at law or in equity. if Tenant fails in two (2) consecutive months to make rental payments within ten (10) days after the due date, Landlord, in order to reduce its administrative costs may require, by giving written notice to Tenant (and in addition to the late charge stated herein, as well as any other rights and remedies accruing pursuant to Article 18, or any other term, provision or covenant of this Lease at law or in equity) that Minimum Annual Rent is to be paid quarterly in advance instead of monthly and that all future rental payments are to be made on or before the due date by cash, cashier's check or money order, and that the delivery of Tenant's personal or corporate check will no longer constitute a payment of Rent as provided in this Lease, ARTICLE 5. TAXES AND ASSESSMENTS 5.1TENANT'S PROPORTIONATE SHARE OF TAXES AND PAYMENT. Tenant shall pay to Landlord, as Additional Rent, Tenant's Proportionate Share of all real estate, current and future, and other ad valorem taxes and assessments of every kind and Tenant's Proportionate Share of any reasonable costs and expenses (such as real estate tax consultant fees) that are incurred byi Landlord in a good faith effon to reduce the amount assessed by the taxing authority provided Landlord s efforts result in a tax savings to Tenant with respect to the Shopping Center ("Taxes"). tn the event any assessments may be paid in annual installments, only the amount of such annual installment and statutory interest shall be included within the computation of the annual Taxes for the Lease Year in question. Tenant shall pay its Proportionate Share of Taxes at the times and in the manner provided in Section 8.6. 5.2RENT TAX. Should any governmental taxing authority acting under any present or future law, ordinance or regulation levy, assess or impose a tax, excise or assessment (other than an income or franchise tax) upon or against or measured by the Rent, or any part of it, Tenant shall pay such tax, excise and/or assessment when due or shall on demand reimburse Landlord for the amount thereof, as the case may be. 5.3PERSONAL PROPERTY TAXES. Tenant shall be liable for, and shall pay before delinquency, all taxes and assessments (real and personal) levied against (a) any personal property or trade fixtures placed by Tenant in or about the Premises (including any increase in the assessed value of the Premises based upon the value of any such personal property or trade fixtures), and (b) any Tenant improvements or alterations in the Premises (whether installed and/or paid for by Landlord or Tenant). If any such taxes or assessments are levied against Landlord or Landlord's property, Landlord may, after written notice to Tenant (and under proper protest if requested by Tenant), pay such taxes and assessments, and Tenant shall reimburse Landlord therefor within ten (10) days after demand by Landlord; provided, however, Tenant, at its sole cost and expense, shall have the right, with Landlord's cooperation, to bring suit in any court of competent jurisdiction to recover the amount of any such taxes and assessments so paid under protest. ART*CLE 6. TENANT'S CONDUCT OF BUSINESS 6.1HOURS. Tenant agrees that, from and after the Commencement Date, Tenant will continuously and uninterruptedly keep open and operate its entire store in the Premises for the purpose specified in Section 1.1 (j) and under the trade name specified in Section 1 M (a) with the pubiic daily during such hours as are customary in the Shopping Center. ARTICLE USE OF PREMISES 7.1SOLE USE AND TRADE NAME. Tenant shall use the Premises for the purpose specified in Section 1.1(j) and for no other purpose whatsoever and shall conduct its business in the Premises solely under the trade name specified in Section l.l(a). Nothing in this Lease shall be construed to grant Tenant an exclusive right to the purpose specified in Section 1.1(j) or any other purpose or use. Tenant shall procure, at Tenant's sole expense, any permits or licenses required for the transaction of business in the Premises. 7.2REQUIREMENTS AND RESTRICTIONS. Tenant agrees to comply with the Requirements and Restrictions set forth on Exhibit "E" attached hereto. ARTICLE 8. COMMON AREAS 8.1MAINTENANCEs Landlord agrees to maintain, as part of Common Area Costs, the Common Areas including the roof in good condition; provided, however, that the manner in which the Common Areas shall be maintained shall be solely determined by Landlord. If any owner or tenant of any portion of the Shopping Center maintains Common Areas located upon its parcel or premises (Landlord shall have the right, in its sole discretion, to allow any purchaser or tenant to so maintain Common Areas located upon its parcel or premises and to be excluded from participation in the payment of Common Area Costs), Landlord shall not have any responsibility for the maintenance of that portion of the Common Areas and Tenant shall have no claims against Landlord arising out of any failure of such owner or tenant to so maintain its portion of the Common Areas. 82 COMMON AREAS DEFINED. "Common Areas" means all areas, facilities, and improvements provided in the Shopping Center for the convenience and use of patrons of the Shopping Center, and shall include, but not be limited tot all areas, all parking areas and facilities, sidewalks, stairways, service corridors, truckways, ramps, loading docks, delivery areas, landscaped areas, access and interior roads, lighting facilities and similar areas and facilities situated within the Shopping Center which are not reserved for the exclusive use of any Shopping Center occupants. INITIAL, 8.3LANDLORDS CONTROL. Landlord shall at all times have the sole and exclusive control, management and direction of the Common Areas and the right to make reasonable changes to the Common Areas, and may at any time exclude and restrain any person from use or occupancy thereof. The rights of Tenant in and to the Common Areas are subject to the rights of others to use the same in common with Tenant. Landlord may at any time and from time to time close aft or any portion of the Common Areas to make repairs, improvements, alterations or changes and, to the extent necessary in the opinion of Landlord, to prevent a dedication thereof or the accrual of any rights to any person or to the public therein. 8.4EMPLOYEE PARKING* Landlord may from time to time designate a particular parking area or areas to be used by its tenants and their employees. If Tenant or any of its employees fail to park their vehicle in any such designated parking areas, Landlord, in its sole discretion, may give Tenant notice of such violation and, if the violation is not corrected within two (2) days after said notice is given, Tenant shall pay to Landlord an amount equal to Ten Dollars ($10.00) per day for each violating vehicle calculated from and including the day on which notice was given, to and including the day when all violations by Tenant and its employees cease. In no event, however, shall Landlord be required to enforce any parking obligation stated herein, 8.5COMMON AREA COSTS. "Common Area Costs" means alt costs incurred in a manner deemed by Landlord to be reasonable and appropriate and for the best interests of the Shopping Center in connection with the management, operation, maintenance, replacement and repair of the Common Areas, including but not limited to security, landscaping, utilities, painting, striping, lighting, management fee four percent (4%) of gross revenues and pest control among other items. 8.6TENANTS PROPORTIONATE SHARE OF COMMON AREA COSTS, TAXES AND INSURANCE. Tenant agrees to pay to Landlord, as Additional Rent, Tenant±s Proportionate Share of Common Area Costs, Taxes and Insurance (as hereinafter defined) in the following manner: (a)Tenant shall pay Landlord on the Commencement Date and on the first day of each calendar month of the Term thereafter an amount estimated by Landlord to be Tenant's monthly Proportionate Share of the Common Area Costs, Taxes and Insurance Landlord may adjust said amount at the end of any calendar month on the basis of Landlord is experience and reasonably anticipated costs. (b)Within ninety (90) days following the end of each calendar year, or as soon as reasonably possible thereafter, Landlord shall endeavor to furnish Tenant a statement covering such year just ended, showing the Common Area Costs, Taxes and Insurance and the amount of Tenant's Proportionate Share of such costs for such year and the payments made by Tenant with respect to such year. If Tenantf s Proportionate Share of such costs is less than Tenant$s payments so made, Tenant shall be entitled to a credit of the difference or, if such share is greater than Tenant's said payments, Tenant shall pay Landlord the difference within thirty (30) days after receipt of such statement. (c)Any failure or delay by Landlord in delivering any estimated or final statement pursuant to this Section 8.6 shall not constitute a waiver of Landlord's right to receive Tenant's payment of Tenant's Proportionate Share of Common Area Costs, Taxes and Insurance. ARTICLE 9. HAZARDOUS SUBSTANCES RESTRICTION ON USE. Tenant shall not use or permit the use of the Premises for the generation, storage, treatment, use, transportation, handftng or disposal of any chemical, material or substance which is regulated as toxic or hazardous or exposure to which is prohibited, timited or regulated by any governmental authority, or which, even if not so regulated, may or could pose a hazard to the Premises, Shopping Center or property adjacent thereto or to the health or safety of persons on the Premises or other tenants or occupants of the Shopping Center or property adjacent thereto, and no such chemical, material or substance shall be brought onto the Premises without the Landlords express written approval. Tenant agrees that it will at all times observe and abide by all laws and regulations relating to the handling of such materials and will promptly notify Landlord of (a) the receipt of any warning notice, notice of violatiom or complaint received from any governmental agency or third party relating to environmental compliance, and (b) any release of hazardous materials on the Premises and/or Shopping Center. In addition, Tenant shall immediately notify Landlord concerning any water intrusion or leakage in the Premises. Tenant shall provide Landlord with immediate access to the Premises in order to assess the damage. Repairs to the Premises shatt be made by the party responsible. Should Tenant be responsible for the repairs and fail to correct immediately, Landlord shall make the repairs at Tenant's expense. Tenant shall, in accordance with applicable laws, carry out, at its sote cost and expense, any remediation required as a result of the release of any hazardous substance by Tenant or by Tenants agents, employees, contractors or invitees, from the Premises and/or Shopping Center. Notwithstanding the foregoing, Tenant shall have the right to bring on to the Premises reasonable amounts of cleaning materials and the like necessary for the operation of Tenants business, but Tenant's liability with respect to such materials shall be as set forth in this Article. The term "Hazardous Material" includes, without limitation (i) those substances included within the definitions of "hazardous substances" "hazardous materials", "toxic substances" or "solid waste" under all present and future federal state and local laws INITIAL (whether under common law, statute, rule, regulation or otherwise) relating to the protection of human health or the environment, including, without limitation, California Senate Bill 245 (Statutes of 1987, chapter 1302), the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as Proposition 65) and the Comprehensive Environmentaf Response, Compensation and Liability Act of 1980 and the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 , ali as heretofore and hereafter amended, or in any regulations promulgated pursuant to said laws; (ii) those substances defined as "Hazardous Wastes}' in Section 251 17 of the California Health & Safety Code or as 'Hazardous Substances" in Section 25316 of the California Health & Safety Code, or in any regulations promulgated pursuant to said laws; (iii) such other substances, materials and wastes which are or become regulated under applicable local, state or federal law or by the United States government or which are or become classified as hazardous or toxic under federal, state or local laws or regulations, inctuding, without limitation, California Health & Safety Code, Division 20, and Title 26 of the California Code of Regulations; and (iv) any material, waste or substance which contains petroleum, asbestos or polychlorinated bipheyls, designated as a "hazardous substances" pursuant to Section 311 of the Clean Water Act of 1977, 33 U.S.C. Sections 1251, et seq. (33 U.S.C.S1321) or listed pursuant to Section 307 of the Clean Water Act of 1977 (US.C.S1317) or contains any flammable, explosive or radioactive material. 9.2INDEMNIFICATION. To the fullest extent permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord and Landlords partners, officers, directors, employees, agents, successors and assigns (collectively, "Landlord Parties") from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, cleanalps removal, remediation and restoration costs, sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees and court costs) which arise or result from any environmental contamination on, in, under or about the Premises, Landlord's Building or any other portion of the Shopping Center and which are caused or permitted by Tenant or any of Tenant's agents, employees, subtenants, assignees, licensees, contractors or invitees (collectively, "Tenant Parties"). 9.3SURVIVAL. The provisions of this Article shall survive the termination of this Lease. ARTICLE ALTERATIONS TO PREMISES 10.1 ALTERATIONS; DAMAGES. Tenant shall make no structural alterations} additions or changes in or to the Premises without Landlords prior written consent. In no event shall Tenant make or cause to be made any penetration through any roof, floor or exterior or corridor wall without the prior written consent of Landlord* Tenant shall be responsible for any and a}! damages resulting from any alteration, addition or change Tenant makes, whether or not Landlord's consent therefor was obtained. Any and all alterations, additions and changes made to the Premises which are consented to by Landlord shall be made under the supervision of a licensed architect or licensed structural engineer and in accordance with plans and specifications approved in writing by the Landlord before the commencement of the work and al! necessary governmental approvals and permits, which approvals and permits Tenant shall obtain at its sole expense, All contractors and subcontractors utilized by Tenant shall be subject to Landlord's prior written approval. Prior to proceeding with any alteration, Tenant shall provide Landlord with at least fifteen (15) days prior written notice. In the event that Tenant makes any alterations, Tenant agrees to carry "Builder's All Risk" insurance in a customary and reasonable amount approved by Landlord covering the construction of such alterations. In addition, Landlord may, in its discretion, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such alterations and naming Landlord as a co-obligee. Upon completion of any alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the county in which the Shopping Center is located in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Shopping Center management office a reproducible copy of the "as built" drawings of the alterations. All work with respect to any alterations, additions and changes must be done in a good and workmanlike manner and diligentEy prosecuted to completion to the end that the Premises shall at all times be a complete unit except during the period of the work. Subject to the terms hereof, any work done by Tenant without Landlords consent shall be returned to its original condition at Tenant's expense upon request by Landlord. Tenant shall pay to Landlord, as Additional Rent, the reasonable costs of Landlord's engineers and other consultants for review of all plans, specifications and working drawings for Tenant's alterations, within ten (10) business days after Tenant's receipt of invoices either from Landlord or such consultants. In addition to such costs, Tenant shall pay to Landlord, within ten (10) business days after completion of any alterations, the actual, reasonable costs incurred by Landlord for services rendered by Landlord's management personnel and engineers to coordinate and/or supervise any of the alterations to the extent such services are provided in excess of or after the normal on-site hours of such engineers and management personnel* 10.2 COMPLIANCE WITH LAWS. Any permitted changes, alterations and additions made by Tenant shall be performed strictly in accordance with applicable laws, rules, regulations and building codes relating thereto including, without limitation, the provisions of Title Ell of the Americans with Disabilities Act of 1990. Tenant shall have the TNT.TIÄL work performed (i) in such a manner so as not to obstruct the access to the Premises or to the premises of any other tenant or obstruct the Common Areas, (ii) so as not to interfere with the occupancy of any other tenant of the Shopping Center, and (iii) at such times, in such manner and subject to such rules and regulations as Landlord may from time to time reasonably designate. Throughout the performance of Tenant's alterations, Tenant shall obtain, or cause its contractors to obtain, workers compensation insurance and commercial general liability insurance in form and substance satisfactory to Landlord and naming Landlord an additional insured thereunder, 10.3 INSURANCE AND RECONSTRUCTION. In the event Tenant shall make any alterations, additions or changes to the Premises, none of such alterations, additions or changes need be insured by Landlord under such insurance as Landlord may carry upon the Landlord's Building, nor shall Landlord be required under any provisions of this Lease to reconstruct or reinstall any such alterations, additions or changes in the event of casualty loss, it being understood and agreed that all such alterations, additions or changes shall be insured by Tenant pursuant to Article 1 1 and reconstructed by Tenant (at Tenant's sole expense) in the event of a casualty loss pursuant to Articie 12. ARTICLE 11. LIABILITY INDEMNITY AND INSURANCE 1 1 .1LANDLORD'S LIABILITY. Landlord shall not be liable for any damage or liability of any kind or for any injury to or death of any persons or damage to any property on or about the Premises from any cause whatsoever, except to the extent any such matter is not covered by insurance required to be maintained by Tenant under this Lease and is attributable to Landlord's gross negligence or willful misconduct. 11.2 INDEMNIFICATION BY TENANT. Tenant hereby agrees to indemnify and save Landlord harm less from al! claims, actions, judgments, suits, losses, fines, penalties, demands, costs and expenses and liability whatsoever, including reasonable attorneys' fees, expert fees and court costs ("Indemnified Claims") on account of (i) any damage or liability occasioned in whole or in part by any use or occupancy of the Premises or by any act or omission of Tenant or the Tenant Parties, (ii) the use of the Premises and Common Areas and conduct of Tenant's business by Tenant or any Tenant Parties, or any other activity, work or thing done, permitted or suffered by Tenant or any Tenant Parties, in or about the Premises} Landlord's Building or elsewhere on the Shopping Center; and/or (iii) any default by Tenant of any obligations on Tenant's part to be performed under the terms of this Lease. In case any action or proceeding is brought against Landlord or any Landlord Parties by reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall defend the same at Tenant's expense by counsel approved in writing by Landlord, which approval shall not be unreasonably withheld. Tenant shall not be liable for damage or injury occasioned by the gross negligence or willful acts of Landlord or its agents, contractors, servants or employees unless such damage or injury arises from perils against which Tenant is required by this Lease to insure and then only to the extent of such insurance. Tenant's indemnification obligation under this Section 112 shall survive the expiration or earlier termination of this Lease. Tenant's covenants, agreements and indemnification in Sections 11.1 , 11.2 and 11.7, are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease, 11.3 INSUREDS WAIVER. In the event of loss or damage to the property of Landlord or Tenant, each party will look first to its own insurance before making any claim against the other. To the extent possible, each party shall obtain, for all policies of insurance required by this Lease, provisions permitting waiver of subrogation against the other party, and each party, for itself and its insurers, hereby waives the right to make any claim against the other (or its agents, employees or insurers) for toss or damage covered by the insurance requirements of this Lease. 11.4 TENANTS INSURANCE. Tenant agrees that, from and after the date of delivery of the Premises to Tenant, Tenant witl carry at its sole cost and expense the following types of insurance, in the amounts specified and in the form hereinafter provided for: Public Liability and Property Damage Insurance covering the Premises and Tenants use thereof against claims for personal injury or death and property damage occurring upon, in or about the Premises, such insurance to afford protection to the limit of not fess than $1 in respect of injury or death of any number of persons arising out of any one occurrence and such insurance against property damage to afford protection to the limit of not less than $500,000.00 in respect to any instance of property damage. The insurance coverage required under this Section shall, in addition, extend to any liability of Tenant arising out of the indemnities provided for in Section 1 1 2; and 2. Tenant Improvements and Property Insurance covering all of the items included in Tenant's Work, Tenants leasehold improvements, heating, ventilating and air conditioning equipment, trade fixtures, signage and personal property from time to time in, on or upon the Premises and, to the extent not covered by Landlord's simiiar insurance, alterations, additions or changes made by Tenant pursuant to Article 10, in an amount not less than their full replacement cost, providing protection against perils included within standard forms of ail risk coverage Insurance policy, together with such INITIAL, other coverage the Landlord deems appropriate (i.e. flood and/or earthquake). Any policy proceeds from such insurance shall be held in trust by Tenant for the repair, reconstruction, restoration or replacement of the property damaged or destroyed, unless this Lease shall cease and terminate under the provisions of Article 12. (b) All policies of insurance provided for in Section 1 1 .4(a) shall be issued in form acceptable to Landlord by insurance companies with general policyholder's rating of not less than A and a financial rating of Class VI as rated in the most currently available "Best's Insurance Reports" and qualified to do business in the state in which the Premises is located. Each such policy shall be issued in the names of Landlord and Tenant and any other parties in interest from time to time designated in writing by notice by Landlord to Tenant. Said policies shall be for the mutual and joint benefit and protection of Landlord and Tenant and executed copies of each such policy of insurance or a certificate thereof shall be delivered to Landlord upon delivery of possession of the Premises to Tenant and thereafter within thirty (30) days prior to the expiration of each such policy. As often as any such policy shall expire or terminate, renewal or additional policies shall be procured and maintained by Tenant in like manner and to like extent, All such policies of insurance shall contain a provision that the company writing said policy will give Landlord at least thirty (30) days' notice in writing in advance of any cancellatiotm or lapse, or the effective date of any reduction in the amounts, or insurance. All such public liability, property damage and other casualty policies shall be written as primary policies which do not contribute to any policies which may be carried by Landlord. All such public liability and property damage policies shall contain a provision that Landlord, although named as an insured, shall nevertheless be entitled to recover under said policies for any loss occasioned to it, its servants, agents and empioyees by reason of the negligence of Tenant. Any insurance provided for in Section 11.4(a) may be effected by a policy of blanket insurance, covering additional items or locations or insureds; provided, however, that (i) Landlord shall be named as an additional insured thereunder as its interest may appear; (ii) the coverage afforded Landlord will not be reduced or diminished by reason of the use of such blanket policy of insurance; (iii) any such policy or policies (except any covering the risks referred to in Section shall specify therein (or Tenant shall furnish Landlord with a written statement from the insurers under such policy specifying) the amount of the total insurance allocated to the "Tenant Improvements and Property" more specifically detailed in Section 11.4(a)(2); and (iv) the requirements set forth herein are otherwise satisfied. Tenant agrees to permit Landlord at all reasonable times to inspect the poticies of insurance of Tenant covering risks upon the Prem ises for which policies or copies thereof are not delivered to Landlord. 11.5 LANDLORDS INSURANCE. (a)Landlord shaft, as part of the Common Area Costs, at all times during the Term maintain in effect a policy or policies of insurance covering the Landlord's Building and the Common Areas (excluding Tenant improvements and property required to be insured by Tenant pursuant to Section 11,4(a)) in an amount not less than the full replacement cost (exclusive of the cost of excavations, foundations and footings), providing protection against perils included within standard forms of fire and extended coverage insurance policies, together with insurance against sprinkler damage, vandalism, and malicious mischief, and such other risks as Landlord may from time to time determine and with any such deductibles as Landlord may from time to time determine and public liability insurance in such amounts as Landlord deems to be reasonable. Any insurance provided for in Sections 11.5(a) or (b) may be effected by a policy or policies of blanket insurance, covering additional items or locations or insureds, provided that the requirements of Section 11.5(a) are otherwise satisfied. In addition, at Landlord's option, Landlord may elect to self-insure all or any part of such required insurance coverage. Landlord may, but shall not be obligated to, carry any other form or forms of insurance as Landlord or the mortgagees or ground lessors of Landlord may reasonably determine is advisable. Ali insurance required hereunder may be referred to as "Insurance' (b)Landlord may carry rent insurance with respect to the Premises in an aggregate amount equal to eighteen (18) or more times the sum of (i) the monthly requirement of Minimum Annual Rent, Pius (ii) the sum of the amounts estimated by Landlord to be payable by Tenant for Additional Rent and Percentage Rent for the month immediately prior to the month in which the policy is purchased or renewed. (c)Tenant agrees to pay Tenant's Proportionate Share of premiums for the Insurance provided pursuant to Section of this Leaser Tenant shall have no rights in any Insurance maintained by Landlord nor shall Tenant be entitled to be a named insured thereunder. 11.6COMPLIANCE WITH INSURANCE AND GOVERNMENTAL REQUIREMENTS. Tenant agrees at its sole cost and expense, to comply with all reasonable recommendations and requirements with respect to the Premises, or its use or occupancy, of the insurance underwriters and any similar public or private body, and any governmental authority having jurisdiction over insurance rates with respect to the use or occupancy of the Shopping Center. Tenant shall not do or suffer to be done anything upon or in the Premises which will contravene Landlord's policies of insurance or cause an increase in Landlord's insurance rates. 11.7LIMIT OF LANDLORDS RESPONSIBILITY. Except to the extent such matter is not covered by the insurance required to be maintained by Tenant under this Lease and is attributable to the gross negligence or willful misconduct of Landlord, Landlord shall not, without limiting the generality of Section 11 .1 hereof, be responsible or liable to Tenant or the Tenant Parties for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying space in any other part of the Shopping Center, or for any loss or damage resulting to the Tenant or its property from bursting, stoppage or leaking of water, gas, sewer or steam pipes or for any damage caused by water leakage from any part of the Premises or from the pipes, appliances or plumbing works or from the roof, street or subsurface or from any other places or by dampness or by any other cause of whatsoever nature, or loss of property within the Premises from any cause whatsoever or any damage caused by other tenants or persons in the Premises, occupants of adjacent property of the Shopping Center, or the public, or caused by construction of any private, public or quasi-public work. ARTICLE 12. DESTRUCTION 12.1DESTRUCTION. Subject to the provisions of 12.2, 12.3 and 124 below, if the Premises Shali be damaged by any casualty, Landlord shall promptly restore same to their condition Immediately prior to the occurrence of the damage to the extent of insurance proceeds received, and the Minimum Rent and other charges shall be abated proportionately as to that part of the Premises rendered untenantablee 12.2LANDLORD'S ELECTION. If the Premises (i) are rendered wholly untenantable; (ii) are substantially damaged (i.e., the cost to repair or replace exceeds 50% of their value) as a result of a risk which is not covered by Landlords insurance; (iii) are substantially damaged during the last year of the term or of any renewal term hereof, regardless of insurance coverage; (iv) or the building of which they are a part (whether the Premises are damaged or not), or all of the buildings which then comprise the Shopping Center, are damaged to the extent of fifty percent (50%) or more of the value thereof, so that the Shopping Center cannot in the reasonable judgment of Landlord be operated as an integral unit; or (v) are damaged and the holder of any mortgage, deed of trust or other lien requires the use of all or any part of Landlord's insurance proceeds in satisfaction of all or a part of this indebtedness secured by any such mortgage, deed of trust or other lien, then or in any of such events, Landlord may either elect to repair the damage to the extent of insurance proceeds received or may cancel this Lease by notice of cancellation within ninety (90) days after such event (whereupon this Lease shall expire and Tenant shall vacate and surrender the Premises to Landlord). Tenant's liability for rent subject to the provisions regarding abatement of minimum rent contained above, shatt continue until the date of term ination of this Lease. 12.3TENANT'S RIGHT TO TERMINATE. This Lease sets forth the terms and conditions upon which this Lease may be terminated in the event of any damage or destruction, Accordingly, Tenant hereby waives any right to terminate the Lease by reason of damage or casualty loss, including without limitation the provision of California Civil Code Section 1932(2) and 1933(4) and any present or future laws or case decisions to the same effect unless otherwise provided in this Section, If Landlord fails to commence the restoration within two hundred ninety (290) days after the casualty and such delay is not caused by Tenant (or any Tenant Parties) or any events described in Section 25.6, Tenant shall have the right to terminate this Lease by notice to Landlord given prior to Landlord E s commencement of construction. In addition, Tenant shall have the right to terminate this Lease by giving written notice to Landlord of exercise thereof within one hundred twenty (120) days after the date Landlord's Building is damaged or destroyed if: (a)no part of the Premises remains tenantable after damage or destruction thereof from any cause; or, (b)the damage or destruction of the Landlord's Building occurs within the last twelve (12) months of the Term, 12.4 REPAIR. ETC. In the event Landlord elects to repair the damage, any abatement of rent shall end the earlier of (i) sixty (60) days after notice by Landlord to Tenant that the Premises have been repaired or (ii) the date Tenant reopens the damaged Premises for business. Unless this Lease is terminated by Landlord, Tenant shall refixture the Premises in a manner and to a condition equal to that existing prior to its destruction or casualty, and the proceeds of all insurance carried by Tenant on its property and improvements shall be held in trust by Tenant for the purpose of said repair and repiacement. ARTICLE 13. MAINTENANCE OF PREMISES 13.1LANDLORDS DUTY TO MAINTAIN. Landlord will, as part of the Common Area Costs, keep the exterior walls, structural columns and structural floor or floors (excluding outer floor and floor coverings, walls instal}ed at the request of Tenant, doors, windows and glass) in good repair. Notwithstanding the foregoing provisions of this Section, Landlord shall not in any way be iiable to Tenant on account of its failure to make repairs unless Tenant shall have given Landlord written notice of the necessity for such repairs and has afforded Landlord a reasonable opportunity to effect the same after such notice and provided that any damage arising therefrom shafE not have been caused by the negligence or willful act or omission of Tenant or Tenant Parties (in which event Tenant shall be responsible therefor) or have been caused to any of the items Tenant is required to insure pursuant to Article 11. Without limiting the foregoing, Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect (including the provisions of California Civil Code Section 1942 and any successor sections or statutes of similar nature). 13.2TENANT'S DUTY TO MAINTAIN. Tenant wilt, at its own cost and expense, maintain the Premises (except that part Landlord has agreed to maintain) in good and tenantable condition, and make all repairs to the Premises and every part thereof as needed. Tenant's obligations under this Section shall include, but not be limited to, modifying, repairing and maintaining items as are required by any governmental agency having jurisdiction thereof (whether the same is ordinary or extraordinary, foreseen or unforeseen), interior walls and glass, and the interior portions of exterior wails, ceilings, utility meters, pipes and conduits within the Premises, and au utility meters, and all pipes and conduits outside the Premises between the Premises and the service meten all fixtures, HVAC equipment (whether such HVAC equipment is located inside or outside the Premises) in compliance with all Laws including environmentali sprinkler equipment and other equipment within the Premises, the store fronts and all exterior glass, all of Tenant's signs, tocks and closing devices, and aEt window sashes, casement or frames, doors and door frames; provided that Tenant shall make no adjustment, alteration or repair of any part of any sprinkler or sprinkler alarm system in or serving the Premises without Landlord's prior approval. Tenant shall contract with a service company approved by Landlord for the preventive maintenance of the HVAC and a copy of the service contract (which contract shall be subject to Landlord's approval) shall be furnished by Tenant to Landford within ten (10) days after Tenant's opening for business, and a copy of any subsequent contract shall be furnished by Tenant to Landlord within ten (10) days after the same becomes effective. Such service contract must provide for at least four (4) visits, inspections and services each year and the regular changing of filters. All broken glass, both exterior and interior, shall be promptly replaced by Tenant with glass of the same kind, size and quality, Tenant shall permit no waste, damage or injury to the Premises and Tenant shall initiate and carry out a program of regular maintenance and repair of the Premises, including the painting or refinishing of all areas of the interior and the store front, so as to impede, to the extent possible, deterioration by ordinary wear and tear and to keep the same in attractive condition. Tenant will not overload the electrical wiring serving the Premises and will install, at its expense, with Landlord's written approval, any additional electrical wiring required in connection with Tenant's apparatus. Landlord shall be under no obligation to make any repairs, replacements, reconstruction, alterations, or improvements to or upon the Premises or the mechanical equipment exclusively serving the Premises except as expressly provided for herein. 13.3LANDLORD'S RIGHT OF ENTRY AND USE. Landlord and its authorized representatives may enter the Premises at any and all times during usual business hours of the Shopping Center occupants for the purpose of inspecting or repairing the same. Landlord has the right to lock any tenant space that has begun construction without Landlord's authority or approval. 13.4CONFLICTS. If there is a conflict between the provisions of this Article 13 and Article 12, the provisions of Article 12 shall govern. ARTICLE 14. UTILITIES AND GARBAGE DISPOSAL 14.1 GAS, GARBAGE DISPOSAL, WATER, SANITARY SEWER, TELEPHONE AND ELECTRIC SERVICE. Tenant shall pay for all utilities and sanitary services used within the Premises and make such deposits or pay such permits required by the utility or sanitary service company providing the same. Landlord shall not be liable for any interruption or failure whatsoever in utiiity services, nor shall any such failure or interruption constitute an actual or constructive eviction of Tenant from the Premises or result in or give rise to any abatement in any Rent reserved hereunder. Upon written request from Landlord, Tenant will, at Tenant's expense, contract with the service company designated by Landlord for the disposal of all trash and garbage from the Premises. Tenant will furnish to Landlord a copy of such contract prior to opening for business, and a copy of each renewal of such contract shah be furnished to Landlord at least seven (7) days prior to the expiration of the existing contract. Landlord shall have the right to designate vendors to provide utility services and garbage collection services to the Premisesi provided that the cost of such service is generally competitive in the vicinity of the Shopping Center. Should Landlord provide utilities to the Shopping Center, Tenant shall pay its proportionate share for the use of the utilities in the manner described in Section 8.6 hereof. ARTICLE 15. LIENS 15.1 NO LIENS PERMITTED; DISCHARGE. Landlord i s property shatt not be subject to liens for work done or materials used on the Premises made at the request of, or on order of or to discharge an obligation of, Tenant. This paragraph shall be construed so as to prohibit, in accordance with the provisions of State law, the interest of Landlord in the Premises or any part thereof from being subject to any lien for any improvements made by Tenant or any third party on Tenant's behalf (except Landlord) to the Premises. If any lien or notice of lien on account of an alleged debt of Tenant or any notice of lien by a party engaged by Tenant or Tenant's contractor or materialmen to work on the Premises shall be filed against the Shopping Center or any part thereof, Tenant, within ten (10) days after notice of the filing thereof, will cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. if Tenant shall fail to cause such lien or notice of lien to be discharged and released of record within the period aforesaid, then, in addition to any other right or remedy, Landlord may discharge the same either by paying the amounts claimed to be due or by procuring the discharge of such lien by deposit or by bonding procedures& Any amount so paid by Landlord and all costs and expenses, including attorneys' fees and court costs, incurred by Landlord in connection therewith, and including interest at the Default Rate, shall constitute Additional Rent and shall be paid by Tenant to Landlord on demand, or be deducted from Tenant Allowance or Construction Allowance monies owed to Tenant by Landlord, if any. ARTICLE SIGNAGE Tenant shall at its own expense erect a sign on the exterior sign band of the Premises$ which sign shall: (i) conform to the general material, size and appearance of other tenants' signs at the Shopping Center, (ii) be in strict conformity with any guidelines or sign criteria adopted by Landlord with respect to the Shopping Center, including, without limitation, the sign criteria set forth in Exhibit "C-1" attached hereto and made a part hereof) (iii) be in accordance with all applicable laws, (iv) be installed by a contractor or other party which meets with Landlord's prior approval* and (v) be otherwise subject to Landlord's prior written approval. Landlord will not be liable to Tenant or any Tenant's contractor or city requirements pertaining to signage, ARTICLE 17. ASSIGNMENT AND SUBLETTING 17.1 RESTRICTIONS ON ASSIGNMENT. Tenant will not assign this Lease in whole or in part, nor sublet all or any part of the Premises or enter into any license or concession agreements (collectively or individually, a CT without the prior written consent of Landlord, which consent Landlord witl not unreasonably withhold. In no event may Tenant encumber or hypothecate this Lease, The consent by Landlord to any Transfer shall not constitute a waiver of the necessity for such consent to any subsequent Transfer. This prohibition against Transfers shall be construed to include a prohibition against any assignment or subletting by operation of raw. Any attempted transfer, assignment, subletting, license or concession agreement, or hypothecation shall be void and confer no rights upon any third person and shall be a violation of this Section. Any transfer of this Lease from Tenant by merger, consolidation, liquidation or otherwise by operation of law, including, but not limited to, an assignment for the benefit of shall be included in the term "assignment" for the purposes of this Lease and shall be a violation of this Section. If this Lease is transferred by Tenant, or if the Premises or any part thereof are transferred or occupied by any person or entity other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the rent herein reserved, but no such Transfer, occupancy or collection shall be deemed a waiver on the part of Landlord, or the acceptance of the assignee, subtenant or occupant as Tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained unjess expressly made in writing by Landlord. Irrespective of any Transfer, Tenant shaft remain fully liable under this Lease and shall not be released from performing any of the terms, covenants and conditions of this Lease. Without limiting Landlord's right to withhold its consent on any reasonable grounds, it is agreed that Landlord will not be acting unreasonably in refusing to consent to a Transfer if, in Landlord's opinion, (i) the quality of the merchandising operation of the proposed assignee or subtenant is not equal to that of the Tenant, (ii) such assignee or subtenant may adversely affect (A) the business of the other tenants, (B) the tenant mix in the Shopping Center, or (C) Landlord's ability to obtain percentage rent, (iii) the net worth and financial capabilities of such assignee or subtenant is less than that of Tenant and any of Tenant's Guarantor(s) (if any) at the date hereof or at the time of the Transfer, whichever is greater, or (iv) the proposed Transfer involves a change of use of the Premises from that specified herein or would otherwise breach any covenant of Landlord respecting radius, location, use or exclusivity in any other lease in the Shopping Center or any Shopping Center agreements, Notwithstanding any contrary provision of this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent to a proposed Transfer or otherwise has breached its obligations under this Section 17.1, Tenant's and such Transferee's only remedy shall be to seek a declaratory judgment and/or injunctive relief, and Tenant, on behalf of itself and, to the extent permitted by law, such proposed Transferee, waives all other remedies against Landlord, including, without limitation, the right to seek monetary damages or to terminate this Lease. Within thirty (30) days of Landlord's receipt of any Transfer Notice and any additional information requested by Landlord concerning the proposed Transferee's financial responsibility, Landlord will notify Tenant of its election to do one of the following: (i) consent to the proposed Transfer subject to such reasonable conditions as Landlord may impose in providing such consent; (ii) refuse such consent, which refusal shall be on reasonable grounds; or (iii) terminate this Lease as to all or such portion of the Premises which is proposed to be sublet or assigned and recapture all or such portion of the Premises for reletting by Landlord. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation hereof shaft not work as a merger but shall, at the option of Landlord, either terminate all or any existing subleases or subtenancies or operate as an assignment to Landlord of such subleases or subtenancies. Notwithstanding the foregoing, Landlord's consent will not be deemed unreasonably withheld should Tenant request an assignment of this Lease within the first eighteen (18) months of the initial lease term. 172 CHANGE OF OWNERSHIP. If Tenant or any Guarantor is a corporation, unincorporated association or partnership, a transfer, assignment or hypothecation of any stock or interest in such corporation, limited liability company, association or partnership by any stockholder or partner so as to result in a change in the control thereof by the person, persons or entities owning a majority interest therein as of the date of this Lease, shall be deemed to be an assignment of this Lease. This provision shall not be applicable to Tenant or to any Guarantor if it is a corporation whose voting stock is listed on a national securities exchange (as defined in the Securities Exchange Act of 1934, as amended) or is traded in any recognized over-the-counter market. INITIAL 17.3 REQUIREMENT FOR ASSIGNMENT In the event that Tenant proposes any transfer of this Lease or transfer of Eeasehold interest, Tenant shall notify Landlord in writing by certified mail, return receipt requested, at least sixty (60) days before the date on which the transfer is to be effective, and, included with such notice, furnish Landlord with: (i) the name of the entity receiving such transfer (the "Transferee"); (ii) a detailed description of the business of the Transferee, (iii) audited financial statements of the Transferee; (iv) all written agreements governing the transfer; and (v) any information reasonably requested by Landlord with respect to the transfer or the Transferee; and (vi) a fee of fifteen hundred dollars ($1 ,500.00) to compensate Landlord for legal fees, costs of administration, and other expenses to be incurred in connection with the review and processing of such documentation (whether or not such transfer is consummated). Landlord shall respond to Tenant's request for approval or disapproval of the transfer within thirty (30) days after Landlord receives the request and documents and information required above. No transfer wilt release Tenant of Tenant's obligations under this Lease or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. Consent by Landlord to one transfer will not be deemed consent to any subsequent Transfer. In the event of default by any Transferee of Tenant or any successor Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such Transferee or successor. 17.4 CONSIDERATION PAID BY SUBLESSEE OR ASSIGNEE: In the event that Land}ord consents to a sublease and the rental due and payable by the sublessee (or a combination of the rent payable under such sublease plus any bonus or other consideration therefore or incident thereto) exceeds the Rent payable under this Lease, or if with respect to an assignment, permitted license or other transfer by Tenant permitted by Landlord, the consideration payable to Tenant by the assignee, licensee or other transferee exceeds the Rent payable under this Lease, then Tenant shall be bound and obligated to pay Landlord all such excess rental and other excess consideration within ten (10) days following receipt thereof by Tenant from such sublessee, assignee, licensee or other transferee as the case may be plus Tenant shall pay to Landlord on an ongoing basis the Percentage Rent paid by Tenant for the immediate 12 month period prior to the transfer of this Lease Agreement. Finally, in the event of any assignment or subletting, it is understood and agreed that all rentals paid to Tenant by an assignee or sublessee shall be received by Tenant in trust for Landlord, to be forwarded immediately to Landlord (to be applied as a credit and offset to Tenant's Rent obligations). ARTICLE 18. DEFAULTS BY TENANT 18.1 EVENTS OF DEFAULT. This Lease is made upon the condition that Tenant shall punctuaily and faithfully perform all of the covenants, conditions and agreements by it to be performed. The following shall each be deemed to be an event of defauft (each of which is sometimes referred to as an "Event of Default" in this Lease): (a)any part of the Rent required to be paid by Tenant under this Lease shatt at any time be unpaid for five (5) days after written notice that any such Rent is due; provided, however, that any such notice shall be in Fieu of, and not in addition to, any notice required under Section 1 161 et seq. of the Catifornia Code of Civil Procedure. (b)Tenant fails in the observance or performance of any of its other covenants, agreements or conditions provided for in this Lease, and said failure shall continue for a period of ten (10) days after written notice thereof from Landlord to Tenant (unless such failure cannot reasonably be cured within ten (10) days and Tenant shall have commenced to cure said failure within said ten (10) days and continues diligently to pursue the curing of the same, which cure shall occur no later than sixty (60) days from the date of such notice from Landlord); provided, however, that Landlord shall be obligated to provide Tenant such written notice of default or failure only a maximum of two (2) times during any calendar year, and in the event of two (2) such defaults by Tenant during any calendar year, the next default shall be an automatic default hereunder without any further obligation on the part of Landlord to provide notice thereof; provided further, that any such notice Shali be in lieu of, and not in addition to, any notice required under Section 1 161 et seq. of the California Code of Civil Procedure. (c)Tenant fails, after the date on which it is required by this Lease to open the Premises for business with the public, to be open for business as required by this Leases or vacates or abandons the Premises; (d)the estate created in Tenant or any Guarantor hereof is taken in execution or by other process of law, or all or a substantial part of the assets of Tenant or any Guarantor hereof is placed in the hands of a liquidator, receiver or trustee (and such receivership or trusteeship or liquidation continues for a period of thirty (30) days), or Tenant or any such Guarantor makes an assignment for the benefit of creditors, or admits in writing that it cannot meet its obligations as they become due, or is adjudicated a bankrupt, or Tenant or any such Guarantor institutes any proceedings under any federal or state insolvency or bankruptcy law as the same now exists or under any amendment thereof which may hereafter be enacted, or under any other act relating to the subject of bankruptcy wherein the Tenant or any such Guarantor seeks to be adjudicated as bankrupt, or to be discharged of its debts, or to effect a plan of liquidation, composition or reorganization, or should any involuntary proceedings be filed against Tenant or any such Guarantor under any such insolvency or bankruptcy law (and such proceeding not be removed within ninety (90) days thereafter). If any insolvency proceedings, such as those referred to in this Section 18.1 (d), are instituted against Tenant, the Premises shall not become an asset in any such proceedings; Tenant assigns or otherwise transfers this Lease or subleases the Premises without prior written consent of Landlord; Tenant does or permits to be done anything which creates a lien upon the Premises; or (g) any material representation or warranty made by Tenant in this Lease or any other document delivered in connection with the execution and delivery of this Lease or pursuant to this Lease proves to be incorrect in any material respect. 18.2 LANDLORDS REMEDIES. Upon the occurrence of any Event of Default, in addition to all other remedies available to Landlord at law or in equity, Landlord shall have the option to pursue any one or more of the following alternative and cumulative remedies without any notice or demand whatsoever: (a)Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder by giving Tenant written notice of such intention to terminate, in which event Landlord may recover from Tenant alt of the following (i) the worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss Tenant proves reasonably could have been avoided; plus (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves reasonably could be avoided; plus (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to: unamortized Tenant improvement costs; attorneys' fees; brokers' commissions; the costs of refurbishment, alterations, renovation and repair of the Premises; and removal (including the repair of any damage caused by such removal) and storage (or disposal) of Tenant's persona! property, equipment, fixtures, alterations and any other items which Tenant is required under this Lease to remove but does not remove; plus (v) at Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in (i) and (ii) above, the "worth at the time of award" shall be computed by allowing interest at the highest rate allowed by applicable law and as used in (iii) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). (b)Landlord shall also have the right, with or without terminating this Lease, to re.enter the Premises and remove all persons and property from the Premises. Such property may be removed and stored in a public warehouse or eisewhere at the cost of and for the account of Tenant. (c)In the event Landlord elects to re-enter the Premises under (b) above or takes possession of the Premises pursuant to any proceedings or notice provided by law or Tenant vacates or abandons the Premises, but LandEord does not elect to terminate this Lease as provided in this Section 18.2, Landlord may from time to time without terminating this Lease either recover from Tenant all Rent as it becomes due (pursuant to California Civil Code Section 1951 A) or relet the Premises or any part thereof upon such terms and conditions as Landlord in its sole discretion may deem advisable, with the right of Landlord to make alterations and repairs to the Premises. In the event of any such reletting, rental and other charges received by Landlord therefrom shall be applied in the following order: (i) to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord, (ii) to the payment of all costs of such reletting, (iii) to the payment of the costs of any alterations and repairs to the Premises, and (iv) the payment of Rent and other charges due and unpaid hereunder. The residue, if any, shall be held by Landlord and applied in payment of future Rent and other charges due hereunder, as the same may become due. In the event the rental and other charges received by Landlord from all such reletting are at any time less than the then aggregate of (i) through (iv) above. Tenant shall pay such deficiency to Landlord immediately upon demand therefor, but not more often than monthly. (d)No re-entry or taking possession of the Premises by Landlord pursuant to this Section 18.2 shall be construed as an election to terminate this Lease unless a written notice of such intention shall be given to Tenant or unless such termination shall be decreed by a court of competent jurisdiction and Landlord may enforce all of Landlord's rights and remedies hereunder, without timitation, the remedy described in California Civil Code Section 1951.4 (lessor may continue the lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Notwithstanding any reletting without termination by Landlord because of any default by Tenant, Landlord may at any time after such reletting elect to terminate this Lease for any such default. In any action for unlawful detainer commenced by Landlord against Tenant by reason of any default hereunder, the reasonable rental value of the Premises for the periods of the unlawful detainer shall be the amount of Rent reserved in this Lease for such period, unless Landlord or Tenant shall provide to the contrary by competent evidence. The rights and remedies reserved to Landlord herein, including those not specifically described, shall be cumulative, and except as otherwise provided by then applicable California law, Landlord may pursue any or att of such rights and remedies at the same time or otherwise, No such re-entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention signed by Landlord is given to Tenant. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for a previous default by Tenant Should Landlord at any time terminate this Lease for any default, in addition to any other remedies Landlord may have, Landlord may recover from Tenant all damages Landlord may incur by reason of such default, including, but not Eimited to, the cost of recovering the Premises and reasonable attorneys' fees, all of which amounts shall be immediately due and payable from Tenant to Landlord. Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law or in equity, nor shall pursuit of any remedy herein or otherwise provided constitute a forfeiture or waiver of any Rent due to Landlord hereunder or of any damages accruing to Landlord by reason of the violation of any of the terms, provisions or covenants herein contained. The loss or damage that Landlord may suffer by reason of termination of this Lease or the deficiency from any repossession and/or reletting as provided for above shall include the expense of repossession and any repairs or remodeling undertaken by Landlord following repossession. All interest and any iate charges imposed pursuant to this Lease shan be considered Additional Rent due from Tenant under the terms of this Lease. 18.3ATTORNEYS' FEES AND COSTS. In the event that any action, suit or other proceeding is initiated concerning or arising out of this Lease, the prevailing party shall recover ail of such party's costs and attorneys' fees incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom from the nonprevailing party. As used herein, "attorneys' fees" shall mean the full and actual costs of any legal services actually rendered in connection with the matters involved, calculated on the basis of the usual fee charged by the attorney performing such services, 18.4RENT PAYABLE BY TENANT. For all purposes of Article 18, in determining the Rent which would be payable by Tenant hereunder subsequent to default, Rent for each Lease Year of the unexpired Term shall be deemed to be the amount of Rent payable by Tenant during the twelve (12) calendar months immediately preceding the Event of Default. 18.5TENANT'S PROPERTY TO REMAIN* If there is an Event of Default, all of the Tenant's fixtures, furniture, equipment, improvements, additions, alterations, and other personal property shall remain on the Premises and, in that event and continuing during the length of said default, Landlord shall have the right to take the exclusive possession of same and to use same, without cost, until all defaults are cured or, at its option, at any time during the Term to require Tenant to forthwith remove same. 18.6TENANT'S WAIVER OF REDEMPTION. Tenant hereby waives and surrenders for itself and all those claiming under it, including creditors of al! kinds (i) any right and privilege which it or any of them may have under any present or future law to redeem any of the Premises or to have a continuance of this Lease after termination of this Lease or of Tenant's right of occupancy or possession pursuant to any court order or any provision hereof, and (ii) the benefits of any present or future law which exempts property from liability for debt or for distress for rent 18.7COSTS UPON DEFAULT AND LITIGATION. Tenant shall pay to Landlord and its mortgagees as Additional Rent all the expenses incurred by Landlord or its mortgagees in connection with any default by Tenant hereunder or the exercise of any remedy by reason of any default by Tenant hereunder, including reasonable attorneys' fees and expenses. If Landlord or its mortgagees shall be made a party to any litigation commenced against Tenant or any litigation pertaining to this Lease or the Premises, at the option of Landlord and/or its mortgagees, Tenant, at its expense, shall provide Landlord and/or its mortgagees with counsel approved by Landlord and/or its mortgagees and shall pay all costs incurred or paid by Landlord and/or its mortgagees in connection with such litigation- ARTICLE 19. LIMITATION OF LANDLORD'S LIABILITY 19.1LANDLORDS DEFAULT. Except as otherwise provided in this Lease, Landlord shaft be in default under this Lease if Landlord fails to perform any of its obligations hereunder and said failure continues for a period of thitty (30) days after written notice thereof from Tenant to Landlord (unless such failure cannot reasonably be cured within thirty (30) days and Landlord shall have commenced to cure said failure within said thirty (30) days and continues diligently to pursue the curing of the same). If Landlord defaults under this Lease and if, as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shatt be satisfied only out of the proceeds of sale received upon execution of such judgment against the right, title and interest of Landlord in the Shopping Center as the same may then be constituted and encumbered, and Landlord shall not be liable for any deficiency. In no event shall Tenant have the right to levy execution against any property of Landlord other than its interest in the Shopping Center. Upon any such uncured default by Landlord, Tenant may exercise any of its rights provided in law or at equity; provided, however: (a) Tenant shall have no right to offset or abate rent in the event of any default by Landlord under this Lease, except to the extent offset rights are specifically provided to Tenant in this Lease; (b) Tenant shall have no right to terminate this Lease; and (c) Tenant's rights and remedies hereunder shall be limited to the extent (i) Tenant has expressly waived in this Lease any of such rights or remedies and/or (ii) this Lease otherwise expressly limits Tenant's rights or remedies. Notwithstanding anything contained in this Lease to the contrary, the obligations of Landtord under this Lease (including any actual or alleged breach or default by Landlord) do not constitute personat obligations of the individual partners, directors, officers, members or shareholders of Landlord or Landlord's partners, and Tenant shall not seek recourse against the individual partners, directors, officers, members or shareholders of Landlord or against Landlord's partners or any other persons or entities having any interest in Landlord, or any of their personal assets for satisfaction of any liability with respect to this Lease. 19.2TRANSFER OF LANDLORD'S INTEREST. In the event of the sale or other transfer of Landlord is interest in the Premises (except in the case of a sale-leaseback financing transaction in which Landlord is the lessee), Landlord shall transfer and assign to such purchaser or transferee the Security Deposit whereupon Landlord shan be deemed released from all liability and obligations hereunder arising out of any act, occurrence or omission relating to the Premises or this Lease occurring after the consummation of such sale or transfer. Tenant agrees to attorn to any successor, assignee, mortgagee or ground lessor of Landlord. ARTICLE 20. SUBORDINATION AND ATTORNMENT 20.1SUBORDINATION OF LEASE AND TENANT'S ATTORNMENT. This Lease is subordinate to the lien of atl mortgages, deeds of trust, security instruments, ground leases, easement agreements and any covenants, conditions and restrictions (collectively, "Superior Interests") now or hereafter covering all or any part of the Shopping Center, and to all amendments, modifications, consolidations, renewals, replacements and extensions thereof. Tenant also agrees that, if any mortgagee elects to have this Lease prior to the lien of its mortgage and signifies such election in the instrument creating its lien, or by separate recorded instrument, this Lease shall be prior in dignity to such mortgage. In the event of any proceedings brought for the enforcement of any instrument of any Superior Interest holder (including but not limited to a mortgage or lease), Tenant shall, upon demand by the Superior Interest holder, attorn to and recognize such Superior Interest holder as Landlord under this Lease. In the event of a sate or assignment of Landlords interest under this Lease or in the Premises, Tenant shall attorn to and recognize such purchaser or assignee as Landlord under this Lease without further act by Landlord or such purchaser or assignee. Tenant hereby waives its rights under any current or future law which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease and the obligations of Tenant hereunder in the event of any such foreclosure proceeding or sale, 20.2INSTRUMENTS TO CARRY OUT INTENT. Tenant agrees that, in order to confirm the provisions of this Article, but in no way limiting the selfoperative effect of said provisions, Tenant shall execute and deliver whatever instruments may be required for such purposes within ten (10) days following Landlord's written request. Should Tenant fail to sign and return any such instruments within said ten (10) day period, Tenant shaft be in default hereunder without the benefit of any additional notice or cure periods specified in this Lease, ARTICLE 21. ESTOPPEL CERTIFICATES 21.1 TENANT'S AGREEMENT TO DELIVER. Within ten (10) days after request therefor from Landlord, Tenant agrees to execute and deliver to Landlord, or to such other addressee or addressees as Landlord may designate (and any such addressee may rely thereon), a statement in writing certifying (if true) that the Lease is in full force and effect and unmodified or describing any modifications; that Tenant has accepted the Premises; that Landlord has performed all of its obligations under the Lease arising prior to the date of the certificate; that there are no defenses or offsets against the enforcement of this Lease or stating with particularity those claimed by Tenant; stating the date to which Rent has been paid; and making such other true representations as may be reasonably requested by Landlord. ARTICLE 22. QUIET ENJOYMENT 22.1 FAITHFUL PERFORMANCE. Upon payment of the Rent herein provided for and the observance and performance of all of the agreements, covenants5 terms and conditions to be observed and performed by the Tenant, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or under Landlord. ARTICLE 23. SURRENDER AND HOLDING OVER 23.1DELIVERY AFTER TERM. Tenant shall deliver up and surrender to Landlord possession of the Premises upon the expiration or earlier termination of the Term, broom clean, free of debris, in good order, condition and state of repair (except as may be Landiord's obligation under this Lease and ordinary wear and tear), and shall deliver the keys at the office of Landlord in the Shopping Center or to Landlord at the address to which notices to Landlord are to be sent. If not sooner terminated as herein provided, this Lease shall terminate at the end of the Term as provided for in Article 3 without the necessity of notice from either Landlord or Tenant to terminate the samei Tenant hereby waiving notice to vacate the Premises and agreeing that Landlord shall be entitled to the benefit of all provisions of law respecting the summary recovery of possession of premises from a tenant holding over. 23.2EFFECT OF HOLDING OVER; RENT. Ef Tenant or any party claiming under Tenant remains in possession of the Premises, or any part thereof, after any termination or expiration of this Lease, no tenancy or interest in the Premises shall result therefrom, but such holding over shall be an unlawful detainer and all such parties shall be subject to immediate eviction and removal, and Tenant shall upon demand pay to Landlord, as liquidated damages, a sum equal to all Percentage Rent, if any, and Additional Rent provided for in this Lease during any period which Tenant shall hold the Premises after the Term has expired, plus an amount computed at the rate of double the Minimum Annual Rent for such period& In addition, Tenant shall indemnify, protect, defend (by counsel approved in writing by Landlord) and hold Landlord harmless from and against any and all claimsi judgments, suits, causes of action, damages, losses, liabilities and expenses (including attorneys' fees and court costs) resuiting from such failure to surrender, including, without limitation, any claim made by any succeeding tenant based thereon. The foregoing indemnity shall survive the expiration or earlier termination of this Lease. The foregoing provisions of this Section 23.2 are in addition to, and do not affect, Landlord's right of re-entry or any other rights of Landlord hereunder or otherwise provided by law or equity. ARTICLE 24. CONDEMNATION 24.1ALL OF PREMISES TAKEN. If the whole of the Premises shall be taken either permanently or temporarily by any right of eminent domain or conveyance in lieu thereof (each being hereinafter referred to as "condemnation"), this Lease shall terminate as of the day possession shall be taken by the condemning authority, 24.2LESS THAN ALL OF PREMISES TAKEN. If twenty percent (20%) or more of the GLA in the Premises is taken by condemnation or if (regardless of the percentage of the GLA in the Premises which is taken) the remainder of the Premises is divided in two (2) or more units, then in either event Landlord and Tenant shaft have the right to terminate this Lease upon ninety (90) days written notice after possession is taken by such condemnation whereupon the Lease shall terminate as of the day possession shall be taken by such condemning authority. Tenant shall pay Rent and perform all of its other obligations under this Lease up to that date. If this Lease is not so terminated, the GLA of the Premises shall be accordingly adjusted as of the date of the taking, Rent shall be accordingly adjusted and any prempaid Rent shall be proportionately credited or debited to Tenant. Thereafter, the Rent shall be based on the square footage of GLA in the Premises. Landlord agrees, at Landlord's cost and expense, as soon as reasonably possible, to restore the Premises on the land remaining to a complete unit of like quality and character as existed prior to such appropriation or taking, provided that Landlord shall not be required to expend more on such restoration than the condemnation award received by Landlord (less all expenses, costs, legal fees and court costs incurred by Landlord in connection with such award). 24.3SHOPPING CENTER TAKEN. If any part of the Shopping Center (including any easement appurtenant to Landlords interest therein) is taken by condemnation so as to render, in Landlords judgment, the remainder unsuitable (in Landlord's discretion) for use as a retail shopping center, Landlord shall have the right to terminate this Lease upon notice in writing to Tenant within one hundred twenty (120) days after possession is taken by such condemnation. If Landlord so terminates this Lease, it shall terminate as of the day possession is taken by the condemning authority, and Tenant shall pay Rent and perform all of its obligations under this Lease up to that date with a proportionate refund by Landlord of any Rent as may have been paid in advance for a period subsequent to such possession. (b) If title to (i) twenty percent (20%) or more of the GLA of Landlord's Building or (ii) twenty percent (20%) or more of the parking required to be maintained in the Shopping Center is so taken, and if Landlord within one (1) year after such taking has not substituted an equivalent number of parking spaces in a location reasonably accessible to the Shopping Center, then either party may terminate this Lease by notice to the other given within thirty (30) days after the taking or after the expiration of such one (1) year period, as the case may bee 24.4 OWNERSHIP OF AWARD. All damages for any condemnation of all or any part of the Shopping Center, including, but not limited to, atl damages as compensation for diminution in value of the leasehold, reversion and fee, shall belong to the Landlord without any deduction therefrom for any present or future estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest to any such award. Although all damages in the event of any condemnation are to belong to the Landlord, Tenant may have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right on account of any and all damage to Tenant's business by reason of the condemnation and for or on account of any cost or loss which Tenant might incur in removing Tenant's merchandise, furniture, fixtures, leasehold improvements and equipment. 24.5 CONFLICTS, If there is a conflict between the provisions of this Artic!e 24 and Article 13, the provisions of Article 24 shall govern. 24.6 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions upon which this Lease may terminate in the event of a taking. Accordingly, the parties waive the provisions of the California Code of Civil Procedure Section 1265.130 and any successor or similar statutes permitting the parties to terminate this Lease as a result of a taking. ARTICLE 25. MISCELLANEOUS 25.1INTERPRETATION. (a)The captions appearing in this Lease are inserted only as a matter of convenience and in no way amplify, define, limit, construe or describe the scope or intent of such sections of the Lease. The neuter, feminine or masculine pronoun when used herein shall each include each of the other genders and the use of the singular shall include the plural. (b)The printed provisions of this Lease were drawn together by Tenant and Landlord, so that this Lease shall not be construed for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of the language in an effort to reach the intended result, (c)Notwithstanding any other provision of this Lease, if the state in which the Premises is located recognizes a distinction between an estate for years and a "usufruct," it is the intention of the parties for this instrument to create a usufruct and not an estate for years. 25.2RELATIONSHIP OF PARTIES. Nothing herein contained shall be construed as creating any relationship between the parties other than the relationship of Landlord and Tenant, nor cause either party to be responsible in any way for the acts, debts or obligations of the other. 25.3NOTICES. (a)Any notice, demand, request, approval, consent or other instrument which may be or is required to be given under this Lease shall be in writing and shall be deemed to have been given when delivered to the party to be notified or when mailed by United States certified mail, return receipt requested, postage prepaid, or when delivered by a courier such as Federal Express, addressed to the party to be notified at the address of such party set forth in Section 1 .1 (t), or to such other address as such party may from time to time designate by notice to the other in accordance with this Section. (b)No notice required to be given to Landlord shall be effective for any purpose unless and until a true copy thereof is given to each mortgagee of Landlord's estate, provided Tenant has previously been given written notice of the name and address of such mortgagee. (c)Notices required hereunder may be given by an attorney acting on behalf of Landlord or Tenant. 25.4 SUCCESSORS. This Lease shall inure to the benefit of and be binding upon Landlord, its successors and assigns, and shaii 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 by Tenant has been made and consented to in accordance with the provisions of this Lease. 25,5 BROKERS COMMISSION. Landlord has entered into an agreement with the real estate broker specified in Section 1.1(n) of the Lease as representing Landlord ("Landlord's Broker'), and Landlord shall pay any commissions or fees that are payable to Landlord's Broker with respect to this Lease in accordance with the provisions of a separate commission contract. Landlord shall have no further or separate obligation for payment of commissions or fees to any other real estate broker, finder or intermediary. Tenant represents that it has not had any dealings with any real estate broker, finder or intermediary with respect to this Lease, other than Landlord's Broker and the broker specified in Section 1.1 (n) of the Lease as representing Tenant ("Tenant's Broker"). Any commissions or fees payable to Tenant's Broker with respect to this Lease shall be paid exclusively by Landlord's Broker. Each party represents and warrants to the other, that, to its knowledge, no other broker, agent or finder (a) negotiated or was instrumental in negotiating or consummating this Lease on its behalf, or/and (b) is or might be entitled to a commission or compensation in connection with this Lease. Any broker, agent or finder of Tenant whom Tenant has failed to disclose herein shall be paid by Tenant. 25.6UNAVOIDABLE DELAYS. In the event that either party shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure labor or materials, failure of power, restrictive governmenta laws or regulations, riots, insurrection, war, fire or other casualty or other reason of a similar or dissimilar nature beyond the reasonable control of the party delayed in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section shall not operate to excuse Tenant from prompt payment of Rent or any other payments required by the terms of this Lease and shall not extend the Term. Delays or failures to perform resulting from lack of funds shall not be deemed delays beyond the reasonable control of a patty. 25.7ENTIRE AGREEMENT. There are no orat agreements between the parties hereto affecting this Lease, and this Lease supersedes and cancels any and all previous negotiations, arrangements, letters of intent, lease proposals, brochures, agreements, representations, promises, warranties and understandings between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof. This Lease, including the Exhibits and any addenda, sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises and the Shopping Center. No alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced in writing, signed and mutually delivered between them 25.8APPLICABLE LAW. The laws of the state in which the Premises are located shall govern the vaidity, performance and enforcement of this Lease. 25.9WAIVER. Failure of either party to insist upon the strict performance of any provision of this Lease or to exercise any option or enforce any rules and regulations shaft not be construed as a waiver in the future of any such provision, rule or option. 25.10ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein stipulated shall be deemed to be other than on account of the earliest stipulated Rent, nor shall any endorsement or statement on any check or any letter accompanying any such check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any other remedy provided for in this Lease or availabte at law or in equity. 25.11LANDLORDS SELF-HELP. In addition to Landlords rights of self-help set forth elsewhere in this Lease, if Tenant at any time fails to perform any of its obligations under this Lease in a manner reasonably satisfactory to Landlord, Landlord shall have the right, but not the obligation, upon giving Tenant at least ten (10) days* prior written notice of its election to do so (in the event of an emergency, no prior notice shall be required), to perform such obligations on behalf of and for the account of Tenant and to take all such action necessary to perform such obligations without liability to Tenant for any loss or damage which may result to Tenant's stock or business by reason of such repairs. In such event, Landlords costs and expenses incurred therein shall be paid for by Tenant as Additional Rent, forthwith upon demand therefor, with interest thereon from the date Landlord performs such work at the Default Rate. The performance by Landlord of any such obligation shall not constitute a release or waiver of Tenant therefrom. 25.12RECORDING. Tenant agrees that it will not record the Lease, nor a short memorandum thereof. 25.13JOINT AND SEVERAL LIABILITY. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) shall sign this Lease as Tenant, the liability of each of them shall be joint and several. In like manner, if the Tenant named in this Lease shall be a partnership or other business association, the members of which are, by virtue of statute or general law, subject to personal liability, the liability of each such member shalf be joint and several. 25.14EXECUTION OF LEASE. The submission of this Lease for examination does not constitute a reservation of or option for the Premises or any other space within the Shopping Center and shall vest no right in either party. This Lease shall become effective as a Lease only upon execution and legal delivery thereof by the parties, together with the execution and delivery to Landlord of a Guaranty in the form annexed hereto by the Guarantor(s), if any, named in Section 1 .1 (k) and the delivery by Tenant to Landlord of any documents and monies (if any) required to be delivered by Tenant to Landlord upon Tenant's execution and delivery of this Lease to Landlord. This Lease may be executed in more than one counterpart, and each such counterpart shall be deemed to be an original document. 25.15WAIVER OF JURY TRIAL. Tenant hereby waives trial by jury in any action, proceeding, or permissive counterclaim involving any matters whatsoever arising out of or in any way connected with the Lease, the relationship of Landlord and Tenant, Tenantts use or occupancy of the Premises, or claim for injury or damage. 25*16 TIME OF THE ESSENCE. Time is of the essence of each and every obligation under this Lease. 25.17TENANT'S AUTHORITY* If Tenant executes this Lease as a limited liability company, partnership, or corporation, then Tenant and the persons and/or entities executing this Lease on behalf of Tenant represent and warrant that: (a) Tenant is a duly organized, authorized and validly existing partnership, corporation or limited liability company, as the case may bet and is qualified to do business in the state in which the Premises is located; (b) such persons and/or entities executing this Lease are duly authorized to execute and deliver this Lease on Tenant's behalf in accordance with the Tenant's operating agreement (if Tenant is a limited liability Tenant's partnership agreement (if Tenant is a partnership), or a duly adopted resolution of Tenant's board of directors and the Tenant's by-laws (if Tenant is a corporation), and (c) this Lease is binding upon Tenant in accordance with its terms. Concurrently with Tenant*s execution and delivery of this Lease to Landlord and/or at any time during the Term within ten (10) days of Landlord's request, Tenant shall provide to Landlord a copy of any documents reasonably requested by Landlord evidencing such qualification, organization, existence and authorization. 25.18ANTI-TERRORISM AND MONEY LAUNDERING REPRESENTATION AND INDEMNIFICATION. Tenant certifies that: (i) neither it nor its officers, directors or controlling owners is acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order, the United States Department of Justice, or the United States Treasury Department as a terrorist, "Specially Designated National or Blocked Person," or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control ("SDN"); (ii) neither it nor its officers, directors or controlling owners is engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation; and (iii) neither it nor its officers, directors or controlling owners is in violation of Presidential Executive Order 13224, the USA Patriot Act, the Bank Secrecy Act, the Money Laundering Control Act or any regulations promulgated pursuant thereto. Tenant hereby agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities and expenses (including attorneys fees and costs) arising from or related to any breach of the foregoing certification. Should Tenant, during the term of this Lease, be designated an SDN, Landlord may, at its sole option, terminate this Lease. 25.19RELOCATION. Landlord shall be entitled to cause Tenant to relocate from the Premises to a comparable space within the Shopping Center (the *Relocation Space") at any time upon written notice to Tenant. Any such relocation shall be entirely at the expense of Landlord or the third party tenant replacing Tenant in the Premises. Such relocation Shali not terminate or otherwise affect or modify this Lease except that, from and after the date of such relocation, "Premises •r shall refer to the Relocation Space into which Tenant has been moved, rather than the original Premises as herein defined* Landlord shall be allowed to with reasonable means to reuse Tenant's trade fixtures. ARTICLE 26. RADIUS RESTRICTION If, during the Term, Tenant or any person, firm or corporation who or which controls or is controlled by Tenant shall directly or indirectly, either individually or as a partner or stockholder or otherwise, owns, operates or becomes financially interested in any business similar to or competing with the business for which Tenant is authorized to use the Premises as provided in Section 1.1 within a radius of two (2) mites from the outside boundary of the Shopping Center as presently constituted, the "Gross Sales" (as defined in this Lease) of any such business or businesses within said radius shall, without limiting Landlord's other remedies under this Lease including holding Tenant in default, be included in the Gross Sales made from the Premises for all purposes of this Lease and the Percentage Rent hereunder shall be computed upon the aggregate of the Gross Sates made from the Premises and by any such other business or businesses then conducted within said radius. This Article shall not apply to any such business or businesses which is owned by Tenant and is open and in operation within said radius prior to the date of this Leaser ARTICLE 27. OPTION TO EXTEND Tenant shall have the option, exercisable by written notice to Landlord, by certified mail, return receipt requested, given not later than six (6) months prior to the expiration of the initial Term, to extend the Lease for one further term of Sixty (60) months on the same terms and conditions as provided in this Lease, except that: (a)Landlord shall have no obligation to make any improvements to the Premises; and (b)Minimum Annual Rent for the first extended term shall be as set forth below: Per S uare Foot Per Annum Months 1 - 60Fair Market Value and (c)Fair market value will be equal to whatever monthly Minimum Annual Rent (plus whatever periodic adjustments) Landlord is then quoting to prospective tenants for new leases of comparable space in the Shopping Center for a comparable term (as confirmed by written statement to Tenant by a representative of Landtord). Notwithstanding the above provisions to the contrary: (A) in no event will the adjusted Minimum Annual Rent be less than Minimum Rent for the immediately preceding period; and (B) in the event Tenant has not agreed in writing to accept the monthly Minimum Annual Rent ninety (90) days prior to the expiration of the then existing term, Landlord at its option may terminate this Lease as of the expiration of the then existing term. (d)there shall be no option to further extend the term. Notwithstanding the foregoing, this Option to Extend this Lease shall be deemed null and void if one or more of the following has occurred: Tenant has been tate in the payment of rent on three (3) or more occasions within any twelve (12) month period. For this purpose, a payment shall be deemed to be late if it is received by Landlord after the second day of the month in which such rent is due, 2.Tenant has been late on three (3) or more occasions within any twelve (12) month period in furnishing to Landlord the monthly sales reports required by Article 4, For this purpose, a report shall be deemed to be late it if is received by the Landlord on or after the 21 st day of the month. 3.Tenant is in default in the performance of any of its obligations under the Lease. Tenant has failed to give written notice by certified mail, return receipt requested, to Landlord six (6) months prior to the expiration of the initial term. 5.The Lease has ever been assigned. ARTICLE 28. ADDITIONAL MAINTENANCE REQUIREMENTS If Tenant uses the Premises for the purpose of operating a restaurant, hair salon, nail salon, barber shop or similar use, Tenant shall, at its sole cost and expense, clean all plumbing and sewer lines up to the main sewer line on a regular basis, no less often than quarterly and provide Landlord with written evidence thereof. Tenant shall also be responsible and shall pay for any repairs to the roof and other components of the Shopping Center caused by grease vented from the Premises. In addition, Tenant shall at its sole cost and expense, instati a venting or exhaust system approved by Landlord in writing in order to remove any noxious fumes or odors caused by Tenant's use of the Prem ises. ARTICLE 29. ADDITIONAL REQUIREMENTS FOR RESTAURANT USE IN PREMISES. 29.1 REQUIREMENTS FOR WASHDOWN AREAS. Landlord requires that the following materiais be furnished and installed for all Tenant kitchen/food preparation areas where a wash down procedure takes place: All areas must contain a minimum of one (1) floor drain. 2.All floor surfaces must be covered with a waterproof/cleanable surface that extends a minimum of six (6) inches up the wall. 3.The next two (2) vertical feet of wall surface treatment above the base material should be waterproof, i.e. a marlite fiberglass reinforced panel. These requirements are in-place to prevent water from entering the drywall partitions contained within the Tenant space. ARTICLE 30. LANDLORDS LIEN. TO SECURE THE PAYMENT OF ALL RENTAL AND OTHER SUMS OF MONEY DUE OR TO BECOME DUE HEREUNDER AND THE FAITHFUL PERFORMANCE OF THIS LEASE BY TENANT, TENANT HEREBY GRANTS TO LANDLORD AN EXPRESS FIRST AND PRIOR CONTRACTUAL LIEN AND SECURITY INTEREST ON ALL PROPERTY (INCLUDING, BUT NOT LIMITED TO, FURNITURE, FIXTURES, EQUIPMENT, INVENTORY, CHATTELS AND MERCHANDISE AND ALL ACCESSORIES THERETO AND ALL PROCEEDS THEREOF) WHICH MAY BE PLACED ON THE PREMISES, AND ALSO UPON ALL PROCEEDS OF ANY INSURANCE WHICH MAY ACCRUE TO TENANT BY REASON OF DESTRUCTION OF OR DAMAGE TO ANY SUCH PROPERTY. SUCH PROPERTY SHALL NOT BE REMOVED FROM THE PREMISES WITHOUT THE WRITTEN CONSENT OF LANDLORD UNTIL ALL ARREARAGES IN RENTAL AND OTHER SUMS OF MONEY THEN DUE TO LANDLORD HEREUNDER SHALL FIRST HAVE BEEN PAID. ALL EXEMPTION LAWS ARE HEREBY WAIVED IN FAVOR OF SAID LIEN AND SECURITY INTEREST. THIS LIEN AND SECURITY INTEREST IS GIVEN IN ADDITION TO LANDLORD'S STATUTORY LIEN AND SHALL BE CUMULATIVE THERETO. UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, THIS LIEN MAY BE FORECLOSED WITH OR WITHOUT COURT PROCEEDINGS, BY PUBLIC OR PRIVATE SALE, PROVIDED LANDLORD GIVES TENANT AT LEAST TEN (10) DAYS NOTICE OF THE TIME AND PLACE OF SAID SALE, AND LANDLORD SHALL HAVE THE REGHT TO BECOME THE PURCHASER UPON BEING THE HIGHEST BIDDER AT SUCH SALE, CONTEMPORANEOUSLY WITH THE EXECUTION OF THIS LEASE (AND IF REQUESTED HEREINAFTER BY LANDLORD), TENANT SHALL EXECUTE AND DELIVER TO LANDLORD UNIFORM COMMERCIAL CODE FINANCING STATEMENTS IN SUFFICIENT FORM SO THAT, WHEN PROPERLY FILED, THE SECURITY INTEREST HEREBY GRANTED SHALL THEREUPON BE PERFECTED. IF REQUESTED HEREAFTER BY LANDLORD, TENANT SHALL ALSO EXECUTE AND DELIVER TO LANDLORD UNIFORM COMMERCIAL CODE FINANCING STATEMENTS IN SUFFICIENT FORM TO REFLECT ANY AMENDMENT OR MODIFICATION IN OR EXTENSION OF THE AFORESAID CONTRACTUAL LIEN AND SECURITY INTEREST HEREBY GRANTED* TENANT HEREBY GRANTS TO LANDLORD TENANT'S POWER-OF-ATTORNEY TO EXECUTE SAID FINANCING STATEMENTS IN TENANT'S NAME, PLACE AND STEAD. SAID POWER IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE. LANDLORD SHALL, tN ADDITION TO ALL OF LANDLORD'S RIGHTS HEREUNDER, HAVE ALL OF THE RIGHTS AND REMEDIES OF A SECURED PARTY UNDER THE UNIFORM COMMERCIAL CODE AS ADOPTED IN THE STATE IN WHICH THE PREMISES ARE LOCATED. A COPY OF THIS LEASE MAY BE FILED AS A NONSTANDARD FINANCING STATEMENT. ARTICLE 31. TENANT'S FINANCIAL STATEMENTS. Upon ten (10) days prior written request from Landlord (which Landlord may make at any time during the Term but no more often than two (2) times in any calendar year), Tenant shall deliver to Landlord (a) a current financial statement of Tenant and any Guarantor of this Lease (if any), and (b) financial statements of Tenant and any such Guarantor for the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with generally acceptable accounting principles and certified as true in ali material respects by Tenant (if Tenant is an individual) or by an authorized officer of Tenant (if Tenant is a corporation or limited liability company) or a general partner of Tenant (if Tenant is a partnership). ARTICLE 32. SECURITY DEPOSIT 32.1 SECURITY. As security for the faithful performance by Tenant of all of the terms and conditions of this Lease on the Tenant's part to be performed, Tenant shall concurrently with Tenant's execution and delivery of this Lease to Landlord, deposit with Landlord the Security Deposit required by Section 1 .1 (m). The Security Deposit shall be held by Landlord as security for the full and faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be performed by Tenant during the Term. The Security Deposit is not, and may not be construed by Tenant to constitute, Rent for the last month or any portion thereof. If Tenant defaults with respect to any of its obligations under this Lease, Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any other amount, loss or damage which Landlord may spend, incur or suffer by reason of Tenant's default or to any damages under Section 1951.2 of the California Civil Code. If any portion of the Security Deposit is so used or applied, Tenant shatf, within ten (10) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit. If 06/1 2 '06 INITIAL Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant within two (2) weeks following the expiration of the Lease Term, provided that Landlord may retain the Security Deposit until such time as any amount due from Tenant under this Lease has been determined and paid in full. Tenant hereby waives the provisions of Section 19507 of the California Civil Code and ail other provisions of law, now or hereafter in effect, which provide that a landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by tenant or to clean the premises, it being agreed that Landlord may, in addition, claim those sums specified in this Section above and/or those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant or any Tenant Parties, 32.2 TRANSFER OF DEPOSIT. In the event of a sale of the Landlord's Building or lease of the Landlord i s Building or the land on which it stands, subject to this Lease, the Landlord shall have the right to transfer this Security Deposit to the vendee or lessee and the Landlord shall thereupon be released from all liability for the return of such Security Deposit, and Tenant shall look to the new landlord solely for the return of the said Security Deposit. This provision shall apply to every transfer or assignment made of the Security Deposit to a new landlord. The Security Deposit deposited under this Lease shall not be mortgaged, assigned or encumbered by the Tenant without the written consent of the Landlord. In the event of any authorized assignment of this Lease, Landlord shall have no further liability with respect to the return of said Security Deposit to the Tenant or assignee. 06/12/06 IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the day and year first above written. LANDLORD: REGENCY CENTERS, L.P. a Delaware Limited Partnership By: Regency Centers Corporation a Florida Corporation Its: Genera' Partner By: Its: Vice President TENANT: SUSHI HUT, INC. By: Its: Attest: Its: Tax I.D.#: CALIFORNIA Execution: Corporate: This Lease must be executed for Tenant, if a California corporation, by two (2) officers of such corporation one being the chairman of the board, the president or a vice president, and the other being the secretary, an assistant secretary, the chief financial officer or an assistant treasurer. If one (1) individual is signing in two (2) of the foregoing capacitie* that individual must sign twice; once as an officer and again as the other officer. If there is only one (1) individual signing in two (2) capacities, or if the two (2) signatories do not satisfy the requirements of (A) above, then Tenant shall deliver to Landlord a certified copy of a corporate resolution in a form reasonably acceptable to Landlord authorizing the signatory(ies) to execute this Lease, unless the bylaws or a resolution of the Board of Directors shall otherwise provide, in which event, a certified copy of the bylaws or resolution, as the case may be, must be furnished, Also, the corporate seal of Tenant, if Tenant has such a seal, must be affixed. If Tenant is a corporation incorporated in a state other than California, then Tenant shall deliver to Landlord a certified copy of a corporate resolution in a form reasonably acceptable to Landlord authorizing the signatory(ies) to execute this Lease. 06/12/06 INITIAL A LEGAL DESCRIPTION OF SHOPPING CENTER The fand referred to herein is situated in the State of California, County of San Diego, and is described as fo!!ows: Lots 1 through 3 inclusive of Friars-Mission Center, in the City of San Diego, County of San Diego, State of California, according to Map thereof No. 12245, filed in the Office of the County Recorder of San Diego County, November 2, 1988. INITIAL B PARTSITE PLAN OF SHOPPING CENTER LAND INITIAL HERE B PART 2 - LEASING PLAN LOCATION 0 MfSSlON CENTER ROAD 01/26/06 INITIAL C DESCRIPTION OF TENANTS WORK AND WORK TO BE PERFORMED BY LANDLORD Procedure for the Preparation and Approval of Working Drawings and Specifications. Tenant shall, within ten (10) days after the date of execution of this Leases deliver to the Landlord for its review and approval two (2) sets of drawings and specifications for the Tenants proposed improvements to the Premises* One set will be returned to the Tenant and one set will be retained by the Landlord, Such drawings shall consist of at least a site plan (if sitework changes to utilities, paving, landscaping, mechanical, electrical, or plumbing systems etc. are proposed), a floor plan, and exterior building elevations (if any modifications are proposed to the storefront or exterior walls) done at a reasonable scale, which will convey detail and intent, as well as an indication of color selection and graphics. Storefront elevations shatl include specification of materials and color scheme. The following conditions, as applicable, are to be clearly detailed on the drawings: New roof penetrations, including plumbing penetrations for vent stacks, or any modifications to the roof system New equipment (satellite dishes, HVAC, etc.) installed on the roof Underground utility changes and pavement demolition/repiacement Modifications to exterior walls to include new doors, windows, finishes, etc. Anything to be mounted on the exterior walls Changes to electrical, water, or gas service Changes to the concrete floor slab Grease trap location If Landlord does not, within fourteen (14) days after receipt of the Tenant's preliminary plans, indicate its disapproval, the same shall be deemed approved. However, Landlord shall not be responsible for items noted or inferred to be furnished and installed by Landlord unless item is specifically noted in paragraph B or Exhibit C-2. If Tenant fails to submit its plans and specifications within the 10•day period provided in paragraph 1, the Landlord may, at its option, in addition to all other remedies available for Tenants default, have the sole right to cancel this Lease. Indulgences granted to Tenant shall not be construed to be a waiver of the provisions of this paragraph. Time is of the essence of this agreement. Tenant shall have access to change locks upon Landlord's receipt of two (2) sets of plans, contractors insurance and Tenant's acceptance of space Tenant will pay costs of lock change and must make appointment with Landlord. B.Landlord's Work* LANDLORD HAS NO OBLIGATION TO PERFORM ANY WORK WITHIN THE PREMISES OR THE SHOPPING CENTER UNLESS STATED IN EXHIBIT "CO". IF NO EXHIBIT 'Ico n IS ATTACHED (AND SIGNED BY BOTH LANDLORD AND TENANT), TENANT AGREES To ACCEPT THE PREMISES IN ITS CONDITION "AS IS" AND SHALL BE OBLIGATED TO PERFORM SUCH WORK AS IS NECESSARY TO RENDER THE PREMISES USEFUL FOR THE PURPOSES LEASED. c.Tenant's Work. All work not specifically described as Landlord's obligation in Exhibit "C-2" shall be the obligation of Tenant and shall be performed in accordance with approved plans and specifications at the sole cost of Tenant, The following work shall be at the sole expense of the Tenant and shall be subject to the approval of the Landlord, unless otherwise expressly provided herein: Furniture and Fixtures - all furniture, furnishings, trade fixtures and related parts, all of which shall be new unless otherwise approved by Landlord. 2.Fixture and Equipment Connections - electrical and mechanical connection of all merchandising, lighting, floor and wall fixtures or equipment and related parts, including kitchen and food service equipment and other equipment peculiar to Tenant's occupancy. 3.Outdoor seating plan if local ordinance allows. 4.Approved Fire Protection Devices - approved fire extinguishers or fire protection devices in size, type and quantity throughout the Premises as required by code and standards of governing insurance rating boards. 5.All Signs and Graphics - the design, installation and location of all signs, exit signs and emergency lighting. Landlord must approve all signs prior to any installation. Signage will be solely Tenants responsibility. Landlord will not be responsible for compliance with city ordinances or liable for Tenant's contractor actions. 06/12/06 6.Ceilings - ali ceilings, including lighting coves and other special effects. Ceiling to include insulation no less than R 1 9 installed no lower than the storefront glase Requests for sheetrock ceilings must be approved by Landlord. Sheetrock ceilings will be allowed when installing a thirty inch (30') opening access panel within Tenant space. 7.Show Window Backgrounds - all show window backgrounds, show windows, show window floors, show window ceilings and show window lighting installations. 8.Walls and Wall Finishes - all interior partition walls within the Premises and all finishes on walls, including placing the finishes and installing the insulation on and within the partitions erected by Landlord. 9.Doors all doors and hardware within the Premises. Service doors to exterior are provided by Landlord, 1 0.Floor Coverings all floor coverings and floor finishes. 1 1 .Interior Final Finishes - all interior painting, papering, paneling and decoration. 12.Plumbing - all plumbing, including connections to utility systems. Electrical and Telephone Systems and Equipment furnishing and installation of all interior distribution panels, lighting panels, power panels, conduits, outlet boxes, switches, outlets, wiring, lighting fixtures and tamping; furnishing and installation of conduit and outlets as required for Tenants telephone service. 1 4.Tenant will be responsible for costs of installing a rear door unless a rear door already exists or is required by Code. 15. Exterior conduits for utility lines and boxes must be painted to match fascia of building. General. Landlord, Tenant or utility company shall have the right, subject to Landlord is approval to run utility lines, pipes, roof drainage pipes, conduit, wire or duct work, where necessary, through attic space, column space or other parts of the Premises, and to maintain same in a manner which does not interfere unnecessarily with Tenant's use thereof. 2.The Tenant shall prepare all its plans and perform all its work to comply with all governing statutes, ordinances, regulations, codes and insurance rating boards; take out alt necessary perm its and obtain certificates of occupancy for the work performed by Tenant all subject to Landlord's approval. Tenant shall further pay all utility deposits and government impact fees. 3.The concrete floor will be designed to a support a uniformly distributed load. Should the Tenant desire a heavier loading, Tenant agrees to pay the cost of engineering and the cost of providing such heavier loading capacity. 4.AIE work done on the Premises by Tenant must be performed by licensed contractors approved by Landlord. Tenant's contractors shall be required to waive all lien rights against Landlord is interest in the Shopping Center. 5.Meters All meters required for utility services and utility deposits shah be furnished and installed at Tenant's expense. 06/12/06 Exhibit "C-1 " SIGN CRITERIA Sign Criteria 1.Tl'}e purpose of this criteria is to estabiish the sign standatds necessary to ensure coordinated proportional exposwe for all tenants, Conrcvmance to these criteria shall be strictly enforced and any nonconforming signs shad he removed by the Landlord or his sign contractor at Tenant's expense. 2.Each Te-nant is required to have primary wall signage (Type A, C, Cl. E, El, F and G as indicated on Site Plan Sheet 2) and hanging soffit sign (Type D) where applicable. Secondary signs (Type C2 and Dt) may be requested where applicable. All letter faces in a sing!e sign shall be a single color. Tenant9 shall he required to select one of the designated sign colors and shall specify such color in the drawings or Tenant's sign to be submitted to Land101d and the project architect for review and written approval per this Exhibit C. The colors designated by Landlord to be used are: Actylite 211-1 Red, 607%1 Bluer 015-2 White or Plexiglasg Bronze 2570 over White (to show as dark during daytime and white during nighttime). Colors not chosen from this pafelte must be approved at the sole and abso'ute discretion of Landlord and the project architect on a case-by•case basis. Street facing signs (Type "E'E) on buildings 9, 10 and 11 shah be "Caredon Bold" style oniy and 5ha}l specificaly be Acrylite 211-1 Red. 3, All designs, colors, fully-dimensioned and sca$ed shop drawings must be submitted to the Landiord or project architect for review and written approval prior to submitting the City of San Diego for ali necessary approvals and/or perrnit5 and prior to commencenlent of fabrication and installation of 5ign5. The design and gtaphics for each sign should reflect the character cf the shop it Identifies. Inclivicfuat styles to be print or script and may Include logos if approved by the aÆhitect, Design approval wili be based upon compatibility with architectura$ design, and with regard for the character for the overall development. Highest graphic design standards will be expected, Tenants shall pay for required governmental approvals and permits, Four sets of plans (one set to he co'ored to depict the color setected for tenant's proposed signs) shall be submitted to Landlord and the project architect. Ail signs and their installation must cotnpty with all local building and electrical codes. Local sign ordinances shouid be consulted for requirements not covered in this criteria. 5.work must be of best quafity and identical workmanship, materials and color to other signs the center, Architect and Landlord reserve the right to reject any nonconfoming submittal or any completed sign which in their judgment, is below standard and workmanship. 6.No animated, flashing, or signs will be permitted. No exposed tub}ng or lamps wifi be pennitted. No exposed raceways, crossovers, conduits, conductotsr transformergr etc. shatt be permitted. 7,Tenant shal} be allowed one (1) window sign in the Tenant's window panel adjacent to the primaty entrance, or not more than one square foot (144 square inches). The sign shal be hand painted, a decal or pressuremapplied lettering/graphics Indicating hours of business, telephone numbers for emergency contacts, approved credit cards, etc, as applicable, No other window signs shall be a'lowedt including, but not limited to, temporary signs, sale banners, posters, other painted signs and product information. Sign contractors shall provide all necessary fastening änd enacting to securely instali signs (for wind loads). Any penetrations through walls or roofs shall be flashed or sealed by the sign contractor a rnanner approved by the architect. Tenants in Buildings 1, 3 and 6 shall be required to have a mandatory painted plexiglass Identification plaque located on the Tenant's rear door at Tenant's expense, The plaque shall be six inches high by twenty-four Inches long. Lettering to be Heiveuca styJet not to exceed two Inches in height, indicated Tenant name and suite number. Plaques shall be ptaced sixty Inches above finished floor. 9.Al shop Tenants shall be required to use designated sign contractor for the fabrication and Installation of al! of Tenant's signing required by this Exhibit C. The designated sign contractor for the project is: 10.Any deviations from this criteria to be specificaliy approved by Landlord in writing. WALL SIGN SCHEDULE LOCATION MAJOR JENmt[S A u t Wall SignsBldg, 21 per TenantVaries150 5,f. Bldg. 51 per TenantVaries180 s,f, Bidg. 15I per TenantVaries100 5,f. *C-Wafl SignsBldgs. 1,2,i per Tenant Shop Frontage I—Wal' SignsBldgs. 1.2 s.f./Lf. (See Site Plan)Shop Frontage signsSecondary Frontage 1 per Tenant6 s.f./f.f. (See Site manShop Frontage D uSuppI. SignsHanging Soffit1 per Tenant4 s.f. DELogo Wan Signs PADSSee Site PlanAs Shown entail Signs Street Exposure1 per Tenant14"0.85 s.f,/l.f. El-Wall SignsPatklng Lot Exposure 1 per Tenant1.00 s,f./Lf. SINGLE-TENANT PADSSltop Frontage F-Wal$ SignsPrimary ExposureSee Site Varies30 s.f. G-Wall SignsSecondary Exposure See Site PlanVaries25 no case shall the maximum sign length be limited to }ess than 15 feet. ** Required lettering sty}e Claredon Bold, - (Claredon Bold) Initial I.•lere Exhibit " SIGN CRITERIA Initial Here EXHIBIT D ABSOLUTE UNCONDITIONAL GUARANTY AGREEMENT KNOW ALL MEN BY THESE PRESENCE: That, THIS Absolute Unconditional Guaranty Agreement (the "GuarantV') is executed and delivered this day of by Aaron Nguyen and Cindy Pham, and Larswin Mendoza, jointly and severally (herein collectively, "Guarantor") in favor of Regency Centers, L.P., a Delaware Limited Partnership, ("Landlord"). R ECITALS: Sushi Hut, Inc„ a corporation organized and existing under the laws of the State of California ("Tenant"), and Landlord are party to that certain Shopping Center Lease dated 2006 (the "Agreement). In order to induce Landlord to enter into the Agreement, Guarantor agreed to execute and deliver to Landlord this Guaranty. Guarantor acknowledges that Landlord would not have entered into the Agreement without the execution and delivery by Guarantor of this Guaranty. NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Guarantor, Guarantor hereby agrees in favor of Landlord (and Landlord's successors and assigns) as follows: Guarantor absolutely, unconditionally and irrevocably guarantees the prompt and complete payment and performance when due, whether by acceleration or otherwise, of all obligations, liabilities and covenants, whether now in existence or hereafter arising, of Tenant to Landlord, and arising under the Agreement, including without limitation atl amounts due to the Landlord as rent or otherwise under the Agreement (the "Obligations"). The Guarantor hereby agrees to pay and/or perform punctually, upon written demand by the Landlord, each such Obligation which is not paid or performed as and when due and payable by the Tenant, in like manner as such amount is due from the Tenant. For purposes hereof, the Obligations shall be performed and/or due and payable when due and payable under the terms of the Agreement notwithstanding the fact that the collection or enforcement thereof as against the Tenant may be stayed or enjoined under Title 1 1 of the United States Code or similar applicable law. This Guaranty is one of payment and not of collection. The Guarantor's obligations under this Guaranty are absolute and unconditional and shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or the Agreement, or by any other circumstance relating to the Obligations or the Agreement which might otherwise constitute a legal or equitable discharge of or defense of a guarantor or surety. Guarantor hereby irrevocably waives any and all suretyship defenses, defenses that could be asserted by Tenant (except payment) and ail other defenses that would otherwise be available to Guarantor. All payments by the Guarantor pursuant to this Guaranty shall be made without setoff. The Landlord shall not be obligated to file any claim relating to the Obligations in the event that the Tenant becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Landlord so to file shall not affect the Guarantor's obligations under this Guaranty. The Guarantor irrevocably waives any right to require the Landlord to pursue any other remedy in the Landlord's power whatsoever, whether against the Tenant or any other obligor principally or secondarily obligated with respect to the Obligations. The Guarantor irrevocably waives any defense arising by reason of any disability, bankruptcy, reorganization or similar proceeding involving the Tenant* In the event that any payment in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable under this Guaranty in respect of such Obligations as if such payment had not been made. The Guarantor agrees that the Landlord may at any time and from time to times either before or after the maturity thereof, without notice to or further consent of the Guarantor, extend the time of payment of, or performance of, or renew, any of the Obligations, and may also make any agreement with the Tenant or with any other party to or person liable on any of the Obligations, or interested therein, for the extension, renewal, payment, compromise, waiver, discharge or release thereof, in whole or in part, or for any amendment or modification of the terms thereof or of the Agreement or any other agreement between the Landlord and the Tenant or any such other party or person, without in any way impairing, releasing or affecting the liabilities of the Guarantor under this Guaranty. The Guarantor will not exercise any rights which it may acquire by way of subrogation until all of the Obligations to Landlord shall have been indefeasibly paid in full, or petformed in its entirety. Any amount paid to the Guarantor in violation of the preceding sentence shall be held in trust for the benefit of the Landlord and shai} forthwith be paid to the Landlord to be credited and applied to the Obligations, whether matured or unmatured. Guarantor hereby subordinates any and all liabilities and indebtedness to Guarantor to the prior indefeasible payment in fuli of the Obligations. This Guaranty shall remain in full force and effect and be binding upon the Guarantor, its successors and assigns until all of the Obligations have been satisfied in full and the Agreement shall have been terminated or fully performed. This Guaranty may not be modified, discharged or terminated orally or in any manner other than by an agreement in writing signed by Landlord and Guarantor. This is a continuing Guaranty relating to all Obligations, including any arising during any holdover term or arising under transactions renewing or extending the term of the Agreement, changing the terms of any or creating new or additional Obligations after prior Obligations have in whole or in part been satisfied, regardless of any lapse of time. If any of the present or future Obligations are guaranteed by persons, partnerships, corporations or other entities in addition to the Guarantor, the death, release or discharge, in whole or in part, or the bankruptcy, liquidation or dissolution of one or more of them shall not discharge or affect the liabilities of the Guarantor under this Guaranty. The obligations of the Guarantor hereunder shall be additional to, and not in substitution for, any security or other guarantee or indemnity at any time existing in respect of Tenant's obligations, liabilities and covenants under the Agreement. No failure on the part of the Landlord to exercise, and no delay in exercising, any right, remedy or power under this Guaranty shall operate as a waiver thereof, nor shall any single or partial exercise by the Landlord of any right, remedy or power under this Guaranty preclude any other or future exercise of any right, remedy or power under this Guaranty. Each and every right, remedy and power granted to the Landlord under this Guaranty or allowed it by law or by the Agreement or any other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Landlord from time to time. The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation or liability to which it may apply, and waives presentment, demand for payment* protest, notice of dishonor or non-payment of any such obligation or liability, suit or the taking of other action by Landlord against, and all other notices whatsoever to, the Tenant, the Guarantor or others. Landlord may at any time and from time to time without notice to or consent of the Guarantor and without mpairing or releasing the obtigations of the Guarantor hereunder: (a) take or fail to take any action of any kind in respect of any security for any obligation, covenant or liability of the Tenant to Landlord, (b) exercise or refrain from exercising any rights against the Tenant or others, (c) compromise or subordinate any obligation or tiability of the Tenant to Landlord including any security therefor, (d) consent to the assignment by Tenant of its interest in the Agreement, or (e) consent to any other matter or thing under or relating to the Agreement. Guarantor waives trial by jury in any action, proceeding or counterclaim, involving any matters whatsoever arising out of or in any way connected with the Guaranty. Guarantor agrees to reimburse Landlord for the costs and attorney's fees incurred by reason of Landlord having to enforce this Guaranty. Guarantor represents and warrants to Landlord that (a) the Agreement has been duly authorized, executed and delivered by Tenant and is a legal, valid and binding instrument enforceable against Tenant in accordance with its terms, and (b) this Guaranty has been duly authorized, executed and delivered by Guarantor and is a legal, valid and binding instrument enforceable against Guarantor in accordance with its terms. The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in part, without prior written consent of the Landlord, and any purported assignment or delegation absent such consent is void This Guaranty shall remain in full force and effect notwithstanding (a) any assignment or transfer by Tenant of its interest in the Agreement (in which case this Guaranty shall apply, from and after such assignment or transfer, to all of the obligations, liabilities and covenants of the assignee or transferee under the Agreement), or (b) any assignment or transfer by Landlord of its interest in the Agreement (in which case Guarantors obligations under this Guaranty Shaff inure to the benefit of Landlordis assignee or transferee), in each case irrespective of whether Guarantor has notice of or consents to any such assignment or transfer. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW, GUARANTOR AND LANDLORD JOINTLY AND SEVERALLY AGREE TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED IN THE STATE OF CALIFORNIA, UNITED STATES OF AMERICA, OVER ANY DISPUTES ARISING OR RELATING TO THIS GUARANTY. INITIAL IN WITNESS WHEREOF, this Guaranty has been executed and delivered as of the date and year first above writtene Signed, sealed and delivered in the presence of: Aaron Nguyen Address: 7776 Hemphill Drive San Diego, California 92126 Cindy Pham Address: 7776 Hemphill Drive San Diego, California 92126 S.S. if: Larswin Mendoza Address: 2125 Chateau Ct Chula Vista, California 91913 S.S. Guarantor acknowledges its address and will notify Landlord of any changes thereto. EXHIBIT E REQUIREMENTS AND RESTRICTIONS Tenant: 1.will not, without Landlord i s consent, conduct or permit to be conducted any auction, fire, bankruptcy or going-out„of-business sales, or similar type sale, in connection with the Premises; provided, however, that this provision shall not restrict the absolute freedom of Tenant to determine its own selling prices nor shall it preclude the conduct of periodic seasonal, promotional or clearance sales; 2.will not use or permit the use of any apparatus for sound reproduction or transmission or of any musical instrument in such manner that the sounds so reproduced, transmitted or produced shall be audible beyond the interior of the Premises; wilt not utilize an advertising medium within the Shopping Center which can be seen, heard or experienced outside the Premises, including, but not limited to, flashing lights, searchlights, loudspeakers, phonographs, radio or television; will not display, paint or cause to be displayed, painted or placed, any handbills, bumper stickers or other advertising devises on any vehicle parked in the parking area of the Shopping Center; will not distribute, or cause to be distributed, in the Shopping Center any handbills or other advertising devices; and will not conduct or permit any activities that might constitute a nuisance; 3.will keep all mechanical apparatus free of vibration and noise which may be transmitted beyond the confines of the Premises; will not cause or permit strong, unusual, offensive or objectionable noise, odors, fumes, dust or vapors to emanate or be dispelled from the Premises; will not burn trash or store or permit accumulations of any trash, garbage, rubbish or other refuse outside of the Premises except in compactors or other receptacles approved by Landlord; 4.will not load or permit the loading or unloading of merchandise, supplies or other property, nor ship, nor receive, outside the area and entrance designated therefor by Landlord from time to time; will not permit the parking or standing, outside of said area, of trucks, trailers or other vehicles or equipment engaged in such loading or unloading in a manner to interfere with the use of any Common Areas or any pedestrian or vehicular use and good shopping center practice; will use its best efforts to complete or cause to be completed all deliveries, loading, unloading and services to the Premises prior to 10:00 a.m. each day; 5.wilt not paint or decorate any part of the exterior of the Premises, or change the architectural treatment thereof, or install any visible protective devices such as burglar bars or security shutters or window tinting, without first obtaining Landlord's written approval; and will remove promptly upon order of Landlord any paint, decoration or protective device which has been applied to or installed upon the exterior of the Premises without Landlord's prior approval, or take such other action with reference thereto as Landlord may direct; 6.will keep the inside and outside of all glass in the doors and windows of the Premises clean; will not place or maintain any merchandise, vending machines or other articles in the vestibule or entry of the Premises, on the footwaEks adjacent thereto or elsewhere on the exterior thereof; will maintain the Premises at its own expense in a clean, orderly and sanitary condition and free of insects, rodents, vermin and other pests; and will keep refuse in proper containers on the interior of the Premises until removed from the Premises; 7.will comply (at its sole cost and expense) with all laws, rules, regulations, orders and guidelines now or hereafter in force relating to or affecting the use, occupancy, alteration or improvement of the Premises ("Laws") and will not use or permit the use of any portion of the Premises for any unlawful purpose or in violation of any recorded covenants, conditions and restrictions affecting the Shopping Center; 8.will not place, permit or maintain on the exterior walls or roof of the Premises any sign, advertising matter, decoration, lettering, insignia, emblems, trademark or descriptive material (herein called "Signs") and wilt not permit any Signs to remain or be placed on any window or door of the Premises unless the same have been approved in writing by Landlord; and wilt maintain any and all Signs as may be approved in good condition and repair at all times, Landlord reserving the right to do so at Tenant's expense if Tenant fails to do so after five (5) days i notice from Landlord; Tenant acknowledges that it will install its approved Signs within thirty (30) days from date of possession of the Premises; 9.will keep the display windows in the Premises electrically lighted and any and all electric signs lighted during all other periods that a majority of tenants are open for business in the Shopping Center; and 10.will not use the sidewalks adjacent to the Premises, or any other space outside of the for the sale or display of any merchandise or for other business, occupation or undertaking. EXHIBIT F TENANT'S IMPROVEMENTS In no event shall Tenant make or cause to be made any penetration through any roof, floor or exterior or corridor wall without the prior written consent of Landlord. Should Landlord consent to Tenant's penetration through the roof, Tenant shall use Landlord's roofing contractor to repair or re-flash Tenant's roofing penetrations. Tenant shall deliver to Landlord a certification letter from this roofing contractor stating that afl roof repairs and penetrations have been made in compliance with the roof warranty. This certification is required in order for Landlord to release any Tenant Allowance monies. Tenant shall be responsible for any and all damages resulting from any alteration, addition or change Tenant makes, whether or not Landlords consent therefor was obtained. Any and all alterations, additions and changes made to the Premises which are consented to by Landlord shall be made under the supervision of a licensed architect or licensed structural engineer and in accordance with plans and specifications approved in writing by the Landlord before the commencement of the work and all necessary governmental approvals and permits, which approvals and permits Tenant shall obtain at its sole expense. All contractors and subcontractors utilized by Tenant shall be subject to Landlord's prior written approval. All work with respect to any alterations, additions and changes must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Premises shatt at all times be a complete unit except during the period of the work. COMPLIANCE WITH LAWS* Any perm itted changes, alterations and additions made by Tenant shall be performed strictly in accordance with applicable laws, rules, regulations, building codes and architectural review boards relating thereto including, without limitation, the provisions of Title Ill of the Americans with Disabitities Act of 1990. Tenant shall have the work performed (i) in such a manner so as not to obstruct the access to the Premises or to the premises of any other tenant or obstruct the Common Areas, (ii) so as not to interfere with the occupancy of any other tenant of the Shopping Center and (iii) at such times, in such manner and subject to such rules and regulations as Landlord may from time to time reasonably designate. Throughout the performance of Tenant's alterations, Tenant shall obtain, or cause its contractors to obtain, workers compensation insurance and commercial general liability insurance in form and substance satisfactory to Landlord and name Landlord as an additional insured thereunder. INSURANCE AND RECONSTRUCTION* In the event Tenant shall make any alterations, additions or changes to the Premises, none of such alterations, additions or changes need be insured by Landlord under such insurance as Landlord may carry upon the Landlord's Building, nor shall Landlord be required under any provisions of this Lease to reconstruct or reinstall any such alterations, additions or changes in the event of casualty loss, it being understood and agreed that all such alterations, additions or changes shall be insured by Tenant pursuant to Article 11 and reconstructed by Tenant (at Tenant's sole expense) in the event of a casualty loss pursuant to Article 12. INITIAL, 

Starbucks US 70 & CATAWBA

COMMERCIAL LEASE US 70 & CATAWBA HAVELOCK, NC between MOC ACQUISITIONS, LLC and STARBUCKS CORPORATION Page 4. 5. 6. Havelock. NC (Sta-e *8468} 6.4Landlord's RÉhts.17 6.5Alterations and Additions17 6.6Ownership and Removal of Improvements, Fixtures, Equipment and Fumishings.,......, 18 13. 14. 15. 16. 17. 18. 19. 20. 21. 22 23_ iii Incorporation of Prior Agreements; Amendments..., .46 24. 25. 26. Havebc& NC *468) COMMERCIAL LEASE (Single-Tenant Building with Drive-Through pad Building in Shopping Center) lim liability This COMMERCIAL LEASE ('Lease") is made and entered into as of ("Effective Date•) by and bet.veen MOC Acquisitions, LLC, a Texas company. ("Landlord") and Starbucks Corporation. a Washington corporation ("Tenant"). PREMISES. 1.1 PREMISES. Landlord win be the owner of a building to be constructed and located at 426 IJ.S_ Hwy 70 in Havelock, North Carolina ("Building") situated upon the real property legally described in Exhibit A attached hereto and by this reference incorporated herein ("Property"), The property is located on an outparcel of the shopping center commonly known as Westbrook Shopping Center ("Shopping Center"). Landlord does not and will not own any portion of the Shopping Center other than the Property. In consideration of the mutual promises, covenants, and conditions herein set forth, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord. for the Term (defined in Section 2.1 below) of this Lease, those certain premises with a fully entitled drive-through in the Building, containing approximately 2,500 square feet. but in no event less than 2,225 square feet, of Gross Leasable Area (as defined below) as shown on Exhibit B attached hereto and by this reference incorporated herein ("Premises"). The Premises and Buiding are located on a portion of the Property referred to herein as the "Tenant Parcel" and the remainder of the Property. on which Landlord intends to construct a multi-tenant retail building. shall be referred to as the -Adjacent parcel". In addition. Tenant shall have the right to operate a drive-through facility containing two (2) drive-through lanes as shown on (and a pass-through lane if required by any applicable laws, rules, or regulations) (collectively, "Drive-Through Facility"). For purposes of this Lease. the •Gross Leasable Area- or the Premises means the interior space of the Premises as measured from the inside face of all walls within the Premises, and shall not include the Drive-Through Facility, any Outdoor Seating Area (defined in Section 1B below), Common Areas (as defined in Section 12.1) or any other areas exterior to the premises. 1.2 REPLAT CONTINGENCY. Landlord shall cause the Property to be subdivided or replatted to create the Tenant Parcel and the Adjacent Parcel (•New Plat"). as depicted on Exhibit G in a form acceptable to Tenant. approved by the applicable governmental authority, and in accordance with all applicable laws, rules. ordinances and statutes applicable to such New Plat on or before the Scheduled Delivery Date ('Replatting Date"). Landlord shall provide Tenant a copy of the final recorded New Plat and a revised legal description of the Property within fourteen (14) days of the Replatting Date. If such replat is satisfactory to Tenant in Tenant's discretion, the parties shall enter into an amendment to replace the legal description and definition of the Property in Exhibit A With the revised legal descriptions the Tenant parcel and the Adjacent parcel. If Landlord fails to: (a) provide Tenant a copy of the recorded copy of the replat within the 14-day period: or (b) Landlord fails to have the New Plat recorded by the Replatting Date, then Tenant may terminate this Lease by giving notice to Landlord. In the event Tenant terminates this Lease pursuant to this Section 1.2, Landlord shall reimburse Tenant for all of Tenant's expenses incurred in connection with this Lease. including, without limitation, site selection, design, and lease negotiation costs and expenses (induding the allocated cost of in-house personnel). Landlord shall also return all monies previously deposited by Tenant. f any. within five (5) business days of the date Landlord receives Tenants notice of termination. 1B RECORDED DOCUMENTS on or before the Closing Date (defined in Section 1.4 below), Landlord shall provide Tenant. for Tenant's final review and approval, a copy of the proposed declaration of covenants. conditions and restrictions, and/or reciprocal access easement agreement(s) proposed to encumber die Premises, the Building, the Property and the Shopping Center (collectively, the -DeclaratioN) and to be recorded in the Official Records of Craven County, North Carolina ("Official Records") after the Effective Date of this Lease. Landlord shall not record the Declaration without Tenant's prior written approval. but shall record the Tenant-approved Declaration on or before the Closing Date and provide Tenant a copy thereof no later than fourteen (14) days after the Closing Date in accordance with Section 1.4 below. Tenant's prior written approval with respect to the Declaration shall not be unreasonably withheld, cata•wta. Haveock, NC (Stere2019 Revi*d conditioned. or delayed as it relates to the construction and management of a shared stormwaier management system benefitting the property. Landlord shall comply with all of its obligations as owner of the property pursuant to the Declaration (including, without limitation, all maintenance, repair, and replacement obligations with respect to the Premises, Building and property and Tenant shall comply with the provisions of the Declaration applicable to tenants. Landlord shall not consent or enter into any agreements or declarations, covenants, conditions. restrictions. or easements affecting the use, operation, or maintenance of the Premises. Building, and Property (each, together with the Declaration. a 'Recorded Document") or any amendment or modification to any Recorded Document that affects Tenant's rights, obligations, or remedies without Tenant's prior review and approval. Tenant shall not benefit from or be subject to said Recorded Document, amendment or modification unless Tenant has approved such document in writirg. Landlord represents and warrants that the provisions of tha Declaration and any other future Recorded Document shall: (i) grant Tenant vehicular and pedestrian cross-parking and cross-access throughout the Property and the Shopping Center; (ii) encumber the Property, the Shopping Center, and any adjacent properties owned by Landlord, with restrictions prohibiting the sale of any of Tenant's exclusive use items listed in Section 5.4 herein; (iii) be in writing and recorded in the Official Records: and (iv) be in form and substance acceptable to Tenant and reasonably and uniformly applied to all tenants in the Property, If any consents or approvals are necessary or required under a Recorded Document for Tenant's work. improvements. and/or for Tenant's use and occupancy of the Premises (including, without limitation, installabon of Tenant's signage and Drive-Through Facility), it shall be Landlord's responsibility to diligently obtain such consents and approvals on Tenant's behalf. Landlord hereby agrees to use its best efforts to enforce any of Tenant's Or Landlord's rights under a Recorded Document in favor of Tenant and shall indemnify and hold Tenant harmless from its failure to do so. In the event of any conflict between the terms of this Lease and the Declaration or any Recorded Document, the terms of this Lease shall control and supersede any such conflicting or modiWing term in the Declaration or a future Recorded Document, 1.4 TITLE CONTINGENCY. Landlord shall become the fee simple owner of the Property on or before May 1, 2022 ('Closing Date"), and Landlord shall provide Tenant with: (a) a copy of the recorded Warranty deed indicating Landlord as the fee simple owner ("Deed"); and (b) a recorded copy of the Declaration. in form and substance approved by Tenant in accordance with Section 1.3 above, and conforming to the representations and warranties made by Landlord in Section 1.3 subsections (i) through (iv) above ('Recorded Declaration"), no later than fourteen (14) days after the Closing Date. If Tenant does not receive a copy of the Deed and the Recorded Declaration within fourteen ( 14) days after the Closing Date, Tenant may terminate this Lease by giving written notice to Landlord. If Tenant terminates this Lease pursuant to this Section, Landlord shall reimburse Tenant for ail of Tenant's expenses incurred in connection with this Lease, including, without limitation, site selection, design, and lease negotiation costs and expenses (including the allocated cost of in-house personnel). Landlord shall also return all monies previously deposited by Tenant, if any, wthin five (5) business days of the date Landlord receives Tenant's notice of 2.TERM. 2.1TERM. The •Initial Term" shall mean ten (10) Lease Years, commencing on the Rent Comrnencement Date (as defined in Section 3.1 of this Lease), and ending on the last day of the tenth (1 0th) Lease Year, unlesssooner terminated or extended as provided herein. For purposes of this Lease. the word "Term' shall mean the Initial Term and any Extension Term (as defined in Section 2.4 of this Lease). and the "Expiration Date' shall mean the last day of the East Lease Year of the Term. Promptly after the Rent Commencement Date, Landlord and Tenant shall execute a certificate the form or Exhibit F stating the actual Commencement Date (as defined in Section 2.2, below), the Rent Commencement Date. and the Expiration Date. Landlord's failure or refusal to execute and deliver such certificate to Tenant within twenty (20) days after receipt thereof shall constitute an acknowledgment by Landlord that the factual statements contained therein are true and correct without exception and may be relied upon by Tenant. 2.2QEWERY. The •Commencement Date" shall mean the date on which all Of the following conditions have been satisfied or waived by Tenant in writing: US 70 & (Store *8468) (a) Landlord has substantially completed Landlord's Work (as defined in Section 4.2 Of this Lease); (b)Landlord has delivered actual possession and control of the Premises to Tenant; (c)Landlord and Tenant have executed and delivered a written notice of delivery and acceptance of the Premises in the form attached hereto as Exhibit p: (d)Landlord has delivered a fully-executed copy Of this Lea to Tenant: (e)Landlord has removed all Hazardous Substances from the Premises, Building and Property and provided evidence thereof from the applicable government agency or certified environmental consultant; (O Landlord has completed all of its obligations in accordance with the terms of Sections 1.2, 1.3 and 1.4 of this Lease; and (g) Landord has completed the Common Areas and all improvements thereto, including without limitation the grading and surfacing of all parking lots, driveways, curb cuts and sidewalks serving the Premises, Building and Property, and the installation of all parking lot lighting and landscaping in accordance with the terms of Section 42 of this Lease. Landlord shall deliver the Premises to Tenant, in the condition called for in subsections (a) through (g) above on November 18. 2022 ('Scheduled Delivery Date"). Tenant, in its sole discretion, may elect to accept delivery of the Premises prior to the aforesaid date. but is not required to do so. Tenant's election to accept delivery of the Premises prior to the Scheduled Delivery Date (or any other changes to the Scheduled Delivery Date) must be in writing and signed by a duly authorized signatory of Tenant in order to be effective. 2.3LEASE YEAR. For the purpose of this Lease, subject to the b,vo (2) additional provisions set forth below in this Section 2.3, the term "Lease Year" shall mean and refer to that period of twelve (12) full consecutive calendar months beginning with the first (1st) full calendar month of the Term and each subsequent period of twelve (12) consecutive calendar months during the Term. If the Term commences On a day other than the first (1st) day of a calendar month. then the initial fractional month of the Term plus the next succeeding twelve (12) full calendar months shall constitute the first Lease Year of the Term. If the last day of the first Lease Year falls on or between September 1 and January 31, then the first Lease Year Shall be extended to end on the last day in February and each subsequent Lease Year shall begin nn March 2.4EXTENSION. Provided that Tenant is not in default under this Lease beyond any applicable notice and cure periods at the time of Tenant's exercise, Tenant shall have the option to extend the Term for six (6) consecutive five (5) year periods (each an 'Extension Term') upon the same terms and conditions as contained in this Lease. The Base Rent for each Extension Term shall be as set forth in Article 3 below. To exercise an extension option. Tenant shall give Landlord notice ("Tenant's Extension Notice") at least ninety (90) days prior to the then-current Expiration Date (the "Extension Deadline"). Tenant's Extension Notice shall be effective to extend the Term without further documentation, and Tenant may exercise more than one option to extend the Term at a time. If Tenant does not exercise an option to extend the Term as herein granted, then all subsequent unexercised options shall become null and void. 3.RENT. 3.1 Subject to the potential rent adjustment Set forth in the paragraph below the rent schedule. Tenant Shan pay to Landlord at Landlord's address provided in Article 25 of this Lease, or to such other person or at such other place as Landlord may designate in writing, rent as follows ("Base Rent"): Dcccmbcr 2019 Monthly Lease YearsInstallmentAnnual Rem 1-10 Extension Term(s):$10,208.33$122,500.00 11-15$134,750.00 16-20$148,225.00 21-25S13,587.29 S14,946.02$163,047.50 31-35S16,440.62$197,287.48 S18,084.69$217,016.22 Tenant shall have the right at any time to inspect and audit Landlord's books, records and other documents which relate to the acquisition of the Property and development and construction costs of all improvements required to be constructed or installed by Landlord pursuant to the terms of this Lease. Landlord and Tenant understand and agree that if and only if the following calculation results in a reduction of Base Rent from that set forth above, the amount of Base Rent due under this Lease shall be adjusted to reflect a seven percent (7%) retum to Landord on all costs verified to Tenant's satisfaction incurred by Landlord in connection with the development of the Premises, so as to result in the first year of annual Base Rent being adjusted downward and determined by multiplying the referenced verified Cost by .07 to set the first year of annual Base Rent. and the adjusted annual Base Rent being increased by the same percentage increases at the same time intervals as set forth in the rent schedule above. Base Rent shall not be subject to an upward adjustment based on this application of this provision. Tenant shall begin to pay Base Rent and all other charges hereunder on the date ("Rent Commencement Date-) that is the earlier to occur of (a) the date Tenant opens for business in the premises. or (b) one hundred twenty (120) days after the later to occur of: (i) the Commencement Date or (ii) the date of Tenants receipt ot all initial Government Approvals, as defined in Article 17 of this Lease, which Government Approvals Tenant shall diligenÜy pursue as further described in Article 17 below provided however that notwithstanding the satisfaction of the conditions set forth in the foregoing clauses and (ii), the foregoing one hundred twenty (120)-day period will be extended on a darfor-day basis for each day that Tenant's construction Of Tenant's Initial Improvements is delayed due to the occurrence of a Force Majeure Event. After the Rent Commencement Date. Tenant shall continue to pay Base Rent in monthly installments on or before the first day of every month thereafter during tie Term. Tenant shall have a thirty (30) day grace period to pay Base Rent, Annual Additional Rent (as defined in Article 12). and all other charges due for the initial month of the Term (or partial month as the case may be) in order to Initialize Its administrative procedures. During such grace period, no late tees, interest or penalties shall accrue, nor shall Tenant be deemed to be in default. Base Rent, Annual Additional Rent, and all other charges due for any period during the Term that is less than one (1) calendar month shall be prorated on a daily basis based on a three hundred sixty-five (365) day year. Notwithstanding the foregoing, Tenant shall not be required to pay Base Rent, Annual Additional Rent, or any other charges due until Tenant receives from Landlord a completed and executed W-9 taxpayer identification form. Except for paying Base Rent. Annual Additional Rent, and all other charges expressly provided elsewhere in this Lease, Tenant has no obligation to pay Landlord any other amounts. Landlord acknowledges and agrees that Tenant. at Tenant's option, shall have the right to pay amounts due under this Lease to Landlord via electronic funds transfer, and that Landlord shall cooperate with Tenant, if necessary, to establish that manner of payment by Tenant. 3.2 ALTERNATIVE BASE RENT. In the event that any Force Majeure Event, act by Landlord or act of any governmental authority having jurisdiction over Tenant's use of the Premises restricts or otherwise limits Tenant's business operations in the Premises and (i) reduces Tenant's gross sales from the Premises for any month of the Term by twenty five percent (25%) or more. then Tenant shall pay fifty percent (50%) of the monthly Base Rent in lieu of Base Rent each month until such restrictions or limitations are lifted, or (ii) Tenant is required to cease operations in the Premises (including from the drive-through), then Tenant shall pay no Base Rent. but shall continue to pay Annual Additional Rent. The "Alternative Rent Period" shall run from the date the restrictions or limitations are imposed until the date such restrictions or limnations are lifted. Tenant shall provide Landlord with notice Of its election to apply the foregoing rent adjustments for the Alternative Rent Period. For a rent adjustment pursuant to clause (i) above, upon Landlord's written request, Tenant shall provide reasonable documentation of the decline in gross sales from the Premises for the months covered by the Alternative Rent period. In the event that the Alternative Rent Period continues for more than one hundred twenty (120) days. then either Landlord or Tenant may terminate this Lease by giving the other at least thirty (30) days written notice; provided, however, that Tenant may nullify Landlord's election to terminate this Lease by delivering written notice to Landlord given within thirty (30) days after Tenant's receipt of Landlord's notice of termination, of Tenant's election to resume paying full Base Rent. The then-current Expiration Date shall be extended on a day-for-day basis for each day of full Base Rent abatement pursuant to this Section 3.2 and the parties shall document such extension by an amendment to this Lease. 3.3 LATE PAYMENTS. If any payment of Base Rent is not received by Landlord within ten (10) days after its due date. Tenant shall pay to Landlord the delinquent installment plus a late charge equal to five percent (5%) of the amount past due, which charge shall be due and payable within ten (10) days after Landlord's written demand therefor Notwithstanding the foregoing, Tenant shall not be required to pay such late charge the first two times Tenant's payment is delinquent in a calendar year unless Tenant fads to cure the delinquency within ten (10) days after Tenant's receipt of written notice thereof from Landbrd. 4.CONDITION OFTHE PREMISES. POSSESSION, AND TENANT ALLOWANCE. 4.1CONDITION OF THE PREMISES- Landlord shall cause the premises, Building and Tenant Parcel, induding the Drive-Through Facility and Outdoor Seating Area and parking spaces, to be designed and constructed as shown on Exhibits B B-l and B-2. Landlord represents and warrants that, as of the Commencement Date, Landlord's Work, the Common Areas, and all pans of the Premises, Building. and Tenant Parcel, including. without limitation, sidewalks, parking areas, driveways, all structural elements, the foundation. roof. roof membrane and roof system, exterior walls, plumbing. electrical, and other mechanicat systems (a) are complete and comply with all federal, state, and local lav'S, codes, rules and regulations, including, without limitation. grease traps. and all handicapped accessibility standards related to the interior. exterior. and any other portion of the Premises, the Building. and the Tenant Parcel, such as those promulgated under the Americans With Disabilities Act ("ADA"); and (b) are seismically and otherwise sound and in good, workable, and sanitary order, condition, and repair at the time of delivery of the premises to Tenant- Landlord shall correct any latent defects promptly after Tenant notifies Landlord Of any such defect. Landlord represents and warrants that it has disclosed to Tenant any conditions or restrCtions, including, without limitation. environmental contamination, restrictions on utilities, or exclusive use restrictions within Landlord's knowledge that would adversely affect Tenant's store design, permitting, construction, or use of the Premises as contemplated by this Lease. 4.2LANDLORD'S OBLIGATIONS. At no cost to Tenant, Landlord shall provide to Tenant final plans Of the premises. Building, and Tenant Parcel, that have been approved by all applicable government entities in an industry standard electronic or digital format. Landlord shall complete all items described On Exhibit C attached hereto and by this reference incorporated herein and any work necessary to bring the Premises. Building. and Property into the condition required under Section 41 (collectively, "Landlord's Work") at its sole cost and expense in a good and workmanlike manner before delivering the Premises to Tenant. Landlord's Work shall also include: (a) installing a hard-canopy roof over the Outdoor Seating Area pursuant to a separate rncdification letter agreement between Landlord and Tenant (such as the Landlord Work Modification Letter attached hereto as Exhibit E); and (b) obtaining, at Landlord's sole cost. all approvals to finalize a master sign program (if required or necessary) acceptable to Tenant by the date that Landlord delivers its plans to Tenant and in any event no later than ninety (90) days before the Scheduled Delivery Date. Landlord's Work shall also include obtaining, at Landlord's sole cost, all permits and/or govemment approvals for the construction and operation Of Tenants Drive-Through Facility as described NC on Exhibits B-l and C consistent with Tenants use and operation of its business on terms satisfactory to Tenant. At least ninety (90) days prior to the Scheduled Delivery Date. Landlord shall provide Tenant a written copy of Landlord's construction schedule. Landlord shall notify Tenant in writing at least ten (10) days prior to the date that Landlord anticipates that the Premises will be ready for Tenant's occupancy and Tenant shall arrange promptly to inspect the Premises. At the time of Tenant's inspection, Landlord shall demonstrate all of Landlord's Work, including (without limitation) the matters identified in Section 4.1 such as the legal compliance. working order, condition and repair of all mechanical, electrical, and other Buildingwide systems serving the premises. Tenant shall deliver to Landlord a written punch list of all incomplete or faulty items of construction or mechanical installation, and any necessary mechanical adjustments and finish work neede3 to bring the premises and the Building into the condition required under this Article. The term •substantially complete' or "substantially completed" shall mean Landlord's Work is complete except for minor punch list items that are cosmetic in nature, can be completed in thirty (30) days. and which will not interfere with delivery, fixturization. or Tenant's Initial Improvements (defined herein). as appltable (collectively. -minor punch list items"). If the Premises and the Building are in the condition required under this Article on the Scheduled Delivery Date but subject only to minor punch list items, Tenant may, at its Option: (i) require Landlord to repair all punch list items prior to Tenant's acceptance of the Premises; or (ii) accept delivery of the Premises and require Landlord to complete the punch list items within thirty (30) days after the date Tenant accepts the Premises; provided, however, if such punch list items are not completed within such thirty (30) day period despite Landlord's diligent good faith efforts to complete the same, then Landlord shall have such additional time as is required to complete the punch fist items so long as all punch list items are completed no later than forty-five (45) days after Tenant's acceptance of delivery of the Premises. If the Premises or the Building are not in the condition required under this Article on the Scheduled Delivery Date then Tenant may. at its option, either: (a) delay acceptance of possession until the Premises are in the condtion required under this Article and pursue its remedies under Section 4.3; or (b) accept possession of the Premises and complete all work necessary to bring the Premises into the required condition. If Tenant elects to proceed under subsection (a), Tenant may enter the Premises to begin performing Tenant's work (at Tenant's cost and expense) without prejudicing Tenant's rights and remedies under Section 4.3. If Tenant elects to proceed under subsection (b), then Landlord shall reimburse Tenant for the actual cost of such work and any additional amounts Landlord agreed to pay Tenant pursuant to other written agreements such as the Landlord Work Modification Letter attached hereto as Exhibit and fully executed by a duly authorized signatory of Tenant in order to be effective. within thirty (30) days of receipt of an invoice for such sums. Tenant's and its contractor's reasonable determination of the cost of such work shall be final and binding on Landlord and Landlord acknowledges that Landlord Can control the cost by performing the work under this Article in a timely manner. If Landlord does not reimburse Tenant as required by thig Soction 4.2, then Tenant may Offset such sum against gaso Rant and all Other charges payable by Tenant under this Lease until such sum has been fully recouped. 4.3 DELAY IN DELIVERY OF POSSESSION. Landlord shall satisfy all conditions listed in Section 2.2 (a) through (g) on or before the Scheduled Delivery Date. Landlord acknowledges that Tenant intends to start construction Of Tenant's improvements on the Scheduled Delivery Date. and that a delay beyond such date will cause Tenant to suffer certain losses which are difficult to quantify including, by way of illustration and not of limitation, lost profits, construction delay costs and employee wages. If the Commencement Date does not occur by the date that is fourteen (14) days after the Scheduled Delivery Date for any reason (regardless of the fact that Tenant may have elected to enter the Premises to perform Tenants work prior to Landlorffs Work being completed), then Tenant, as compensation in the form of liquidated damages, shall be entitled to five (5) days of free Base Rent and Annual Additional Rent for each day of delay accruing from the Scheduled Delivery Date to the actual Commencement Date ("Liquidated Damages'). which Liquidated Damages shall be applied commencing on the Rent Commencement Date and continuing until applied in full): provided, however, that if such delay is caused by a Force Majeure Event (as defined in Section 23.17 below) or a Tenant Delay (as defined herein), the Scheduled Delivery Date shall be deemed extended by a period during which said Force Majeure Event or Tenant Delay shall cause such delay, but such deferral of the Scheduled Delivery Date shall in no event be deferred by a Force Majeure Event for more than sixty (60) days. Landlord and Tenant agree that the foregoing free rent W (Store *8468) determination is a liquidated damages remedy to compensate Tenant based on Landlord and Tenant's best estimate of the daily damages, including but not limited to lost sales and business opportunity that Tenant will incur as a result of Landlord's failure to deliver the Premises timely. and such amount is not to be deemed a penalty. If the Commencement Date does not occur within thirty (30) days after the Scheduled Delivery Date for any reason whatsoever (except as described in the immediately following sentence), Tenant, at its option. may terminate this Lease upon thirty (30) days' prior written notice to Landlord. The termination date shall not be subject to extensions for any reason whatsoever except for Tenant De ays and an extension of the Scheduled Delivery Date for up to sixty (60) days due to delays caused by Force Majeure Events (as provided hereinabove). If Tenant elects to terminate this Lease, Landlord shall reimburse Tenant an amount equal to the accrued Liquidated Damages and Landlord shall reimburse Tenant for all of Tenant's expenses incurred in connection with this Lease. including, without limitation, site selection. design and lease negotiation costs and expenses (including the allocated cost of in-house personnel). Landlord shall also retum all monies previously deposited by Tenant, if any. As used herein. the term -Tenant Delay" shall mean any of the following: (a) Tenant's failure to timely furnish any information requested by Landlord in writing to plan for or to complete, Landlord's Work or to respond to any request by Landlord in writing for any approval or information within any time period prescribed by this Lease, or if no time period is prescribed, then within fifteen (15) buSness days of such written request: (b) changes in any Landlord's Plans or Landlord's New Plans (as such terms are defined below) requested by Tenant after the approval thereof; and (c) any written request by Tenant that Landlord delay the completion of any component of Landlords Work- 4.4 TENANT ALLOWANCE. In addition to Landlord's obligations under Sections 4.1 and 4.2 above. Landlord shall provide Tenant with an improver-neat allowance in the amount of Sixty-Five Thousand Dollars ('Allowance') which shall be paid in full by Landlord to Tenant upon Tenant's opening for business in the premises The Allowance shall not be reduced by costs incurred by Landlord in constructing the Premises. Building, and Property and can be modified only by an amendment to this Lease that has been duly executed by Landlord and Tenant. If Landlord has not paid Tenant the Allowance within thirty (30) days after Tenant opens for business in the Premises and Tenant sends Landlord a written request for payment of the Allowance, then in addition to any other remedies Tenant has, Tenant may offset the unpaid amount against Base Rent and all other charges (at Tenant's discretion) due under this Lease until the Allowance is fully offset In addition, if Landlord shall fail to pay the Allowance when the same is due and payable, such unpaid amounts shall bear interest at the greater of twelve percent (12%) per annum or the prime interest rate charged by Wells Fargo Bank plus three percentage points (but in no event to exceed the maximum lawful rate) from the date the unpaid amount was initially due, to and including the date of full payment by Landlord or full recovery by Tenant, as the case may be. 4.5 NO REMEASUREMENT OF THE PREMISES. The parties agree that the Gross Leasable Area set forth herein shall not be subject to remeasurement during the Term. 4.6 LANDLORDS BUILDING PLANS. Tenant shall have the right to approve Landlord's plans for the configuration and operation of the Premises and Building, Tenant's Drive-Through Facility, the parking area, and coordination of Landlord's Work pursuant to Exhibit C ("Landlord's Plans") prior to Landlord's submission of Landlord's Plans for permitting, If Landlord materially changes Landlord's Plans after Tenant approves the same (whether or not the changes are being required by a governing authority), then Landlord shall re-submit Landlords Plans clearly indicating the changes ("Landlord's New Plans") to Tenant for Tenant's review and approvaL Tenant shall either approve Landlord's New Plans or request modifications to Landlord's New Plans. Landlord shall reimburse Tenant for the actual cost for Tenant to redraw its plans for the Premises ('Re-ciraw Costs") to correspond with Landlord's New Plans. If Tenant does not approve Landlord's New Plans or if Landlord and Tenant fail to agree on acceptable revisions to Landlord's New Plans, Tenant may terminate this Lease by giving written notice to Landlord. If Tenant does not terminate this Lease and Landlord has not paid Tenant its Re-Draw Costs within thirty (30) days after Tenant opens for business in the Premises, then in addition to any other remedies Tenant has, Tenant may offset the NC (St.-e *468) starbu$T"BU6KS 9 unpaid amount against Base Rent and all other charges (at Tenan?s discretion) until the Re-Draw Costs are fully offset. 5.USE. 5.1use. Tenant may use and occupy the Premises, Drive-Through Facility and Outdoor Seating Area for any lawful use, including. without limitation, the sale of beer and wine. Landlord acknowledges that, except as expressly set forth in this Section, Tenant is entering into this Lease in reliance upn its ability to conduct the use described above without any limitation or restriction by reason of any govemmental zoning or use restriction. exclusive provision. contractual restriction Or limitation granted to any other party which applies to the Premises or Tenant's use thereof. Landlord acknowledges that Tenant may use the Premises to accept returns of merchandise not purchased Trom Tenant. 5.2COMPLIANCE WITH LAW. Tenant. at its expense, shall comply promptly with all laws, rules, and regulations made by Any governmental authority having jurisdiction over Tenant's use of the Premises pertaining to: (a) the physical condition of any improvements constructed by Tenant in the Premises; and (b) Tenant's specific business operations in the premises. Tenant shall not be required to make any seismic or structural upgrades, repairs. improvements or alterations to the Premises or Building in order to complywith the requirements ofthis Section. Landlord, at its sole cost and expense, shall comply with all other laws, rules. regulations. and ordinances made by any governmental authority now or hereafter having jurisdiction over the Building and Property, including without limitation, all accessibility for disabled requirements, and providing such certifications as may be necessary or required to establish and confirm Landlord compliance with all requirements governing the Trash and Recycnng Areas, Trash and Recycling Improvements, and the Trash and Recycling Services defined in Article 22. 5.3OPERATIONS. The parties confirm that neither Tenant (nor its assigns) are subject to any opening covenant, continuous operation covenant. operating covenant, radius restriction or similar requirement or limdation, Tenant may operate (or not operate) ts business in tha premises and at such hours as Tenant considers properin Tenant's sole business judgment. It is expressly understood and agreed that Tenant makes no representations or warranties, oral or written, as to the level of gross sales it may generate from the Prernises or the number of customers that it will bring to the Building and Property. 5.4EXCLUSIVITY. Landlord shall not lease to any other tenant nor use or allow any Other person or entity (except Tenant and its assigns) to use any portion of the Property for or in support of: (a) whole or ground coffee beans, (b) espresso. espresso-based drinks or coffee-based drinks, (c) tea or teabased drinks, (d) brewed coffee. and/or (e) blended beverages. Notwithstanrfing the foregoing: (i)Other tenants may sell brewed coffee or brewed tea which is neither (i) gourmet, nor (ii) brand identified. For purposes of this Lease, "gourmet" shall be defined as. (a) beverages made using Arabica beans or (b) sourced from a gourmet coffee or tea brand such as Coffee Bean & Tea Leaf, Intelligentsia. Peets, Caribou or similar branding. For purposes ofthis Lease, •brand identified" shall mean beverages advertised or marketed within the applicable retail space using a brand name Or served in a brand-identified cup. (ii)Other tenants may sell pre-bottled tea or pre-bottled tea-based beverages. (iii)Any existing tenant on the Property with lease which predates August 1 9, 2021 (which existing tenants, with a statement of their permitted use clause(s), if any, are set forth on Exhibit H attached hereto and by this reference incorporated herein) whose lease allows it to sell any of the foregoing products, shall not be subject to Tenant's exclusive use restriction set forth herein. if and to the extent that any such existing tenant is permitted by its lease to sell any of Tenants exclusive use items; provided, NC 2019 starbu$TÅR3UGKS December however, that with respect to the tenants set forth On Landlord agrees that to the extent Landlord has reasonable control over any such tenanrs use and changes in use, Landlord shall exercise such control to enforce and protect Tenanrs exclusive use rights described herein. (iv)Anchor tenants occupying at least twenty thousand (20,000) contiguous square feet of interior space operating under a single trade name and full-line grocery store tenants occupying at least ten thousand (10,000) contiguous square feet of interior space operating under a single trade name shall not be subject to Tenants exclusive so long as any such anchor or grocery Store tenant at all times occupies and operates out of the foregoing minimum contiguous square footage, does not have a separate entrance or exterior signage for the sale of Tenant's exclusive items, and does not otherwise advertise, in a manner visible from the exterior of such tenants space, the sale of Tenant's exclusive items. (v)Fud service, sit-down restaurants with a wait staff and table service serving a cornplete dinner menu may sell. in conjunction with a sale of a meal, brewed coffee, tea, and hot espresso drinks for on-premises consumption only. In the event of a mation of Tenanfs exclusive use, all Base Rent. Annual Additional Rent, and all other sums due under the Lease shall be reduced by fifty percent (50%), until the violation has been cured and the competing tenant(s) at the property cease(s) the sale of any of the products protected by Tenant's exclusive use described above. In the event that the violation continues for more than ninety (90) days. Tenant shall have the right to terminate this Lease, and shall be entitled to reimbursement by Landlord of the unamortized amount of Tenant's improvements to the Premises as of the effective date of the early termination of the Lease. 55 NEW CONSTRUCTION CONTINGENCY. Subject to the terms of section 5.3, and notwithstanding anything in this Lease to the contrary (including, without limitation, Article 3). Tenant shall not be obligated to pay Base Rent or any Annual Additional Rent, nor be required to open for business in the premises until such time as the construction of all Common Areas, including (without limitation) all parking areas, are substantially complete, all construction equipment and debris have been removed and Landlord has completed all remaining Landlord construction items which, ir not completed, would prevent Tenant from obtaining a Certificate of Occupancy for the Premises (collectively. the -New Construction Contingency'): provided. however. that Tenant may, at its option and in its sole discretion, elect to open for business before the foregoing conditions have been satisfied, in which event the Initial Term shall commence and Base Rent and Annual Additional Rent shall be reduced by fifty percent (50%) of the amounts otherwise due and payable until the New Construction Contingency is satisfied. Without limiting the foregoing, in the event that the New Construction Contingency is not satisfied within six (6) months after the Schedubed Delivery Date. in addition to any other remedy provided by applicable law or in this Lease, Tenant, upon written notice, shall be entitled to terminate this Lease in which case, up-on demand, Landlord shall reimburse Tenant for its costs (including allocable in-house expenses) incurred developing, constructing and operating its store in the Premises, including (without limitation) site selection, brokerage, legal. design, permitting and other fees and costs, as well as Tenant's costs of construction in the event that Tenant has elected to accept possession of the premises and constructed some or all of its improvements therein. 6.MAINTENANCE, REPAIRS. AND ALTERATIONS. 6.1TENANTS OBLIGAT_IQNS. Subject to the provisions of Sections 6.2 and 6.3 and Articles 9 and 15, Tenant. at Tenant's expense. shall keep the Premises in good order and repair, including maintaining all plumbing, HVAC (as further described below), electrical end lighting facilities and equipment within the Premises and exclusvely serving the Premises, and the store front, doors. and plate glass of the Premises as well as maintenance and any non-capital repairs of the Outdoor Seating Area, as further described in Section 18 below (including all of Tenant's Property (as defined in Section 6.6.1 below) and trade fixtures therein. but excluding all structural components and foundation. which are the responsibility of Landlord). At Tenant's request, Landlord shall transfer or assign to Tenant all warranties, express or implied, under any contract or subcontract relating to any improvements or equipment Landlord built or installed within the Premises to serve the Premises exclusively and which Tenant is obligated to maintain, repair, or replace as described herein, including, without limitation, the warranty for the HVAC system (to the extent Us 70 NC 9 transferrable or assignable); it understood and agreed that Tenant shall be responsible for regular maintenance Oi the HVAC at Tenant's sole cost and expense, and Landlord shall be responsible for any major repairs to or any necessary replacement of the HVAC. Notwithstanding any provision to the contrary. TenantS obligations under this Section shall not include making: (a) any repair or improvement necessitated by the negligence or willful misconduct of Landlord or Landlord's agents, employees or contractors: (b) any repair or improvement caused by Landlorffs failure to perform its obligations hereunder or under any other agreement between Landlord and Tenant; or (c) any structural or seismic repairs, improvements or alterations to the Premises, the Building, or the property. 6.2LANDLORD'S OBLIGATIONS. Except for repairs, maintenance and replacements to the Premises and the Building for which Tenant is responsible under Section 6.1 , Landlord shall maintain, repair and make replacements to the Premises. the Buildingr and the Property. Landlord shall. at its sole cost and expense (subject to Tenant's payment obligations, if any, pursuant to Article 12 below), make the repairs and replacements and perform such work that is necessary to maintain the Building, and the Property in a condition comparable to other firsbclass buildings and shopping centers in the Havelock, North Carolina metropolitan area. Such repairs, replacements and maintenance shall include (without limitation): (a) the upkeep of the roof. roof membrane and roof systems (gutters, downspouts and the like), foundation. exterior walls, interior structural walls. and all structural components of the Premises and the Building: and (b) the maintenance and repair of all parking areas, sidewalks. structural components and foundation of the Outdoor Seating Area (but excluding those items installed in the Outdoor Seating Area by Tenant, which are Tenants responsibility, Drive-Through Facility (other than items installed in the Drive-Through Facility by Tenant), landscaping and drainage systems on the Property and all utility systems (including mechanical. plumbing. electrical, lighting, and HVAC systems) and plumbing systems that serve the Building. Landlord shall not be required to maintain the interior surface of exterior walls, windows, doors or plate glass and store fronts (except where maintenance of the same is caused by Landlord's negligence or failure to perform its obligations under this Section). Landlord shall make all repairs under this Section promptly after Landlord learns of the need for such repairs but in any event within thirty (30) days after Tenant notifies Landlord of the need for such repairs. If Landlord fails to make such repairs within thirty (30) days after Tenant's written notice (except when the repairs require more than thirty (30) days for performance and Landlord commences the repair within thirty (30) days and diligently pursues the repair to completion). Tenant may, at its option, undertake such repairs and deduct the reasonable and actual cost thereof from the installments of Base Rent and Monthly Estimated Rent (as defined in Section 12.3 below) next falling due. Notwithstanding the foregoing, in the event of an emergency, Tenant may give Landlord such shorter notice as is practicable under the circumstances, and if Landlord fails to make such repairs immediately after being notified by Tenant, Tenant may immediately undertake such repairs and deduct the reasonable and actual cost thereof from the installments of Base Rent and Monthly Estimated Rent next falling due. SURRENDER upon the expiration or termination of this Lease, Tenant shall surrender the Premises to Landlord in broom ctean condition. except for ordinary væar and tear and damage caused by fire or other casualty, whether or not insured or insurable. 6.4LANDLORDS RIGHTS. If Tenant fails to perform Tenant's obligations under this Article, Landlord may. but shall not be required to, enter upon the Premises, after thirty (30) days prior written notice to Tenant (except in the case of an emergency, in which case Landlord may give such shorter notice as is reasonably practical under the circumstances), and put the same in good Order, condition and repair, and the reasonable costs thereof shall become due and payable as additional rental to Landlord together with Tenant's next Base Rent installment falling due after Tenant's receipt of an invoice for such costs Notwithstanding the LandlordS rights under this Section shall be subject to Section 23.14. 6.5ALTERATIONS AND ADDITIONS 6.2.1Initial Improvements Subject to compliance with applicable laws. codes. and ordinances, Tenant, at Tenants cost, may install such fixtures, finishes, communications and intemet services infrastructure and other initial tenant improvements in or about the Premises. Building and Tenant Parcel (subject to Landlord's approval rights over structural changes as provided hereinbelow) as Tenant deems necessary or desirable for the conduct of Tenant's business therein (the "Initial NC (St.-e Improvements"), Subject to Tenant obtaining all requisite governmental permits and approvals therefor. Lardlord shall cooperate with Tenant tor such instaHations, including giving Tenant access prior to possession. Tenant Shali have the right to configure the premises and. If necessary. the parking area. to provide drive-through service for its customers in accordance with all codes and regulations. Landlord shall have the right to approve only structural changes proposed by Tenant. Tenant shall submit the construction plans and specifications (the "Plans") for the Initial Improvements to Landlord for Landlord's review and approval of the structural elements. Landlord shall have a period of fourteen (14) days (the "Review period") to review the Plans. Landlord shall not unreasonably withhold, condition or delay its approval of the Plans. Landlord shall be deemed ta have approved the Plans as presented unless, on or before the last day of the Review period. Landlord has delivered to Tenant a written description of the specific structural items in Plans that are not acceptable and a description of the specific changes that must be made to the Pians to secure Landlord's approval. Tenant shall either (a) submit modified plans for approval; or (b) terminate this Lease if Landlord's requested revisions are not acceptable to Tenantin its soie discretion The review and approval process described above shall continue until such time as Landlord has approved the Plans in writing (the "Final Plans") or until this Lease is terminated. 6.2.2LEED Certification. In addition, Landlord acknowledges and agrees that Tenant intends to seek certification of the Premises through the then-current standards established by the United States Green Building Council (the •uSGBC") for the certification of green buildings, commercial and retail interiors and other facilities ('LEED Certification"). Landlord acknowledges that LEED Certification may be awarded at various certification levels as determined by the USGBC. Accordingly, notwithstanding anything in this Lease to the contrary. Landlord agrees to cooperate, at no out-of-pocket cost to Landlord, with Tenant in Tenant's efforts to achieve LEED Certification (in a manner and at a level which shall be determined by Tenant in its sole discretion) and to take all reasonable steps requested by Tenant to achieve such certification. Further. Landlord agrees, at no outd.pocket cost or expense to Landlord. to assist Tenant in its efforts to maintain LEED Certification for the Premises throughout the Term. 6.2.3Subsequent Improvements. After the installation of the Initial Improvements, Tenant may make such interior non-structural alterations, improvements and additions to or about the premises including. without limitation, improving or upgrading its communications and internet services to the Premises, changing color schemes, installing new countertops, flooring, wall-covering and modifying the layout of the tenant fixtures as well as making changes to Tenant's drive-through equipment, menu boards, directional and other signs, communications facilities, and other similar items located outside of the Premises and related to Tenant's use and operations (the "Subsequent Improvements'), as Tenant deems necessary or desirable without obtaining Landlord's consent. Notwithstanding the foregoing. Tenant shall not make any alterations, improvements, additions or repairs in, on, or about the Premises which affect the structure or the mechanical systems of the Building (to the extent the mechanical systems do not exclusively serve the Premises) or which constitute exterior changes (expressly excluding any changes to Tenants signage as well as any changes to Tenant's drivethrough equipment, menu boards, directional and other signs, communications facilities. and other similar items located outside of the Premises and related to Tenant's use and operations) and that otherwise comply with all applicable codes, ordinances, and regulations without Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord shall cooperate With Tenant for the installation of any Subsequent Improvements and shall be deemed to have approved any Subsequent Improvement(s) proposed by Tenant unless Landlord disapproves of Tenant's proposal in writing within thirty (30) days of receiving Tenant's proposal and written request for consent. 6.2.4Liens. Before commencing any alterations, additions or improvements using outside contractors, Tenant shall notify Landlord of the expected commencement and completion dates of the work. Tenant shall not permit any mechanics' or materialmen's liens to be levied against the Premises for any labor or material furnished to Tenant or to its agents or contractors; provided. however, that Tenant shall not be required to pay or other%'ise satisfy any claims or discharge such liens so long as Tenant, in good faith and at its own expense. contests the same or the validity thereof by appropriate proceedings and posts a bond or takes other steps acceptable to Landlord that remove such lien, stay enforcement thereof, or otherwise clear the title to the property against which the lien is filed. US 70 11 g Starbu5*U6KS g 6.6 OWNERSHIP AND REMOVAL OF IMPROVEMENTS. FIXTURES. EQUIPMENT AND FURNISHINGS. 6.6.1 The term •Tenant's Property" shall mean all personal property, furnishings, machinery, trade fixtures, equipment. and improvements (trade or othenvise) which Tenant installs in the Premises, in the Outdoor Seating Area, or in the Drive-Through Facility (including without limitation the following when located in or serving the Drive-Through Facility: partitions, screens, art, plant walls along with the irrigation and suspended plants, specialized lighting fixtures, movable boulders, menu boards. signage and other nonstructural design elements). until or upon the termination or expiration of the Term, Tenant may remove Tenant's Property from the Premises no later than the termination or expiration date of the Term. In addition, Tenant may remove from the Premises all items installed by Tenant that are indicative of Tenant's business and may otherwise •de-identify" the Premises, as Tenant reasonably believes necessary or appropriate for the protection of Tenant's interest in Tenant's trademarks, trade names or copyrights. Tenant shall repair any damage to the premises or the Building caused by such removal, including patching and filling holes. Notwithstanding the foregoing, in no event shall Tenant be entitled pursuant to this Section 6.6.1 to remove, nor shall Tenant be required to remove, any restroom fixtures, flooring, ceilings. walls or utility or electrical components located inside the walls nor any portions ofthe HVAC system(s). Landlord shall not have the right to place or permit liens or other encumbrances on any of Tenants Property. and Landlord waives and releases any and all liens, whether statutory or under common law, on Tenants Property which may be located from time to time in or about the Premises. Any or Tenants Property not removed from the Premises on the date this Lease terminates or expires shall be deemed abandoned and shall thereupon become the property of Landlord, INSURANCE; INDEMNIFICATION. 7.1 As Of the Commencement Date through the expiration or earlier termination of the Term of this Lease, Tenant shall obtain and keep in full force and effect the following insurance which may be provided under blanket insurance policies covering other properties as well as the Premises and shall be maintained with an insurance company with an A.M. Best Company ("Best's") rating of at leastA- anda Best's financial performance rating of at least W. upon Landlord's request. Tenant will provide Landlord access to an Internet website that certifies Tenants current insurance coverage in a N4emorandum of Insurance. 7.1.1 Liability Insurance Commercial general liability insurance including bodily injury. personal injury and property damage insurance. including by blanket endorsement naming Landlord, as well as Landlord's managing agent upon Landlord's written request, as additional insureds, against Tenants liability arising out of Tenants use or occupancy of the Premises. Drive-Through Facility and Tenants Outdoor Seating Area (if any). In no event shall this additional insured status extend to the independent liability or negligence of the additional insured or where Tenant does not have an obligation pursuant to Section 74 of this Lease. In the event that Tenant elects to sell beer and wine from the Premises, Tenant's liability insurance required herein shall include liquor liability coverage. Tenant's liability insurance coverage shall include an "each occurrence" limit of not less than Five Million Dollars and a general aggregate limit of not less than Five Million Dollars ($5, 000,000). Property Insurance. Commercial property form insurance with a special form endorsement providing coverage on a replacement cost basis for Tenant's trade fixtures, equipment and inventory in the Premises and the Drive-Through Facility and Tenants Outdoor Seating Area, if any. During the Term, Tenant shall use the proceeds from any such policy or policies of insurance for the repair or replacement of the insured property unless Tenant elects to terminate this Lease pursuant to Article 9 hereof. Landlord shall have no interest in any insurance proceeds Tenant receives for Tenant's Property and Landlord shall sign all documents which are necessary or appropriate in connection with the settlement of any claim or loss by Tenant. Tenant's policies shall not be contributing with or in excess of any coverage which Landlord shall carry on the Building and Tenant Parcel. A NC 0 starbu8T*U6KS 9 72 LANDLORD'S INSURANCE. As of the Effective Date through the expiration or earlier termination of the Term of this Lease, Landlord shall obtain and keep in full force end effect, the following insurance ("Landlord's Insurance") from an insurance company with a Best's rating of at least A- and a Bests financial performance rating of at least VI'. upon Tenant's request, Landlord will provide Tenant with a copy of tie certificaæ(s) evidencing such coverage and a premium bill for Landlord's Insurance, 7.2.1Liability Insurance. Bodily injury, personal injury and property damage insurance (to include contractual liability) insuring against claims of bodily injury or death, personal injury or property damage arising out of or in connection with: (a) Landlord's and its agents', employees', or independent contractors conduct upon, in or about the Premises, the Drive-Through Facility, and Tenant's Outdoor Seating Area. if any. and (b) events occurring in the balance of the Tenant Parcel, including (without limitation) the Common Areas, with an each occurrence limit of not less than One Million Dollars ($1.000.000) and a general aggregate mt of not less than Two Million Dollars Tenant shall be named as an additional insured under Landlord's liability insurance policies. Landlord's Insurance shall be primary with respect to any claim covered by this Section 7.2.1. 7.2.2Property Insurance. Special Form commercial property insurance insuring the Building and Tenant Parcel (including all Landlord Work but excluding any property which Tenant is obligated to insure under Section 7.12), for the full replacement value, as such value may change from time to time. and the Landlord's fixtures, equipment, inventory and other contents within the Tenant Parcel. Tenant shall be named as an additional loss payee (to the extent of its interest therein from time to time) under Landlord's property insurance policy(ies)_ 7.3WAIVER OF SUBROGATION. Notwithstanding any other provisions of this Lease to the Contrary. neither Landlord nor Tenant shall be liable to the other or to any company (by way of subrogation or othervvise) for any loss or damage to any building, structure or other tangible property. or any resulting loss of income and benefits (even though such loss or damage might have been occasioned by the negligence of such party its agents or employees) rt any such loss or damage is covered by insurance benefiting the party suffering such loss or damage, or which would have been covered by insurance required to be maintained pursuant to this Lease. This waiver of subrogation applies to covered losses above or below the property deductible. Landlord and Tenant shall require their respective insurance companies to include a waiver of subrogation provision in their respective policies in accordance with this Section 7.3. 7.4INDEMNIFICATION BY TENANT. Provided that Landlord notifies Tenant in writing of any such claims within a commercially reasonable period of time after Landlord becomes aware of such claim. Tenant shall defend. protect, indemnify, and hold Landlord and Landlord's agents, officers. directors, employees, and contractors harmless from and against any and all injuries, costs, expenses, liabilities, losses. damages, injunctions, suits, actions, fines, penalties, and demands of any kind or nature (including reasonable attorneys' fees) resulting in any third party Glaims occasioned by or arising out of: (a) Tenant's use or occupancy of the Premises, Drive-Through Facility, and Outdoor Seating Area, if any; (b) any intentional conduct or negligence of Tenant or Tenant's agents, employees, or contractors; (c) any breach or default in the performance of any obligation on Tenant's part to be performed under this Lease; or (d) the failure ofany representation Orwarran?y made by Tenant herein to be true when made. This indemnity does not include the intentional or negligent acts or omissions of Landlord or its agents, officers. contractors, or employees; however, the foregoing to the contrary notwithstanding, shall remain subject to Section 7.3 above. This indemnity shall survive the expiration ar earlier termination of this Lease only as to claims arising outofevents thatoccurduring the Term. Notwithstanding any provision of this Lease to the contrary, the provisions of this Section 7.4 and Tenant's covenants to provide insurance as provided in this Lease shall no event extend to Landlord's independent liability. 7.5INDEMNIFICATION BY LANDLORD. Provided that Tenant notifies Landlord in writing of any such claims within a commercially reasonable period of time after Tenant becomes aware of such claim, Landlord shall defend. protect, indemnify. and hold Tenant and Tenant's agents. officers, directors, employees. and contractors harmless from and against any and all injuries, costs, expenses. liabilities, losses, damages. injunctions. suits, actions, fines, penalties, and demands of any kind or nature (including us Haveo&. NC (StoreC' 201S reasonable attorneys' fees) by or on behalf of any person, entity, or governmental authority occasioned by or arising outof: (a) events occurring in the Common Areas or any other portion of the Building and property outside the Premises (excluding those events expressly covered by Tenant's indemnification obligations set forth in Section 7.4 above. and only to the extent applicable); (b) any intentional conduct or negligence of Landlord or Landlord's agents, employees, or independent contractors; (c) any breach or default in the pefformance of any obligation on Landlord's part to be performed under this Lease; or (d) the failure of any representation or warranty made by Landlord herein to be true when made. This indemnity does not include the intentional or negligent acts or omissions of Tenant or its agents, officers, contractors or employees; however, the foregoing to the contrary notwithstanding, it shall remain subject to Section 7.3 above. This indemnity shall survive the expiration or earlier termination of this Lease, Notwithstanding any provision of this Lease to the contrary. the provisions of this Section 7.5 and Landlord's covenants to provide insurance as provided in this Lease shall in no event extend to Tenanvs independent liability. 8.ENVIRONMENTAL LIABILITY. 8.1ENVIRONMENTAL LAW. The term "Environmental Law" means any federal, state, local law, statute. ordinance, regulation or order and all amendments thereto pertaining to health, industrial hygiene, environmental conditions or Hazardous Substances. 8.2HAZARDOUS SUBSTANCE The term "Hazardous Substance" shall mean any substance that is actually or allegedly harmful to human life, animal life, or vegetation or any other portion of the environment; toxic substances and vapors, wastes, or pollutants; and hazardous or dangerous Substances or vapors. including any substances defined. listed and/or regulated by any Environmental Law or by cornrnon law decision including, without limitation, chlorinated solvents, petroleum products or byproducts, asbestos. polychlorinated biphenyl. and mold or substances which cannot be disposed of in a common landfill or require special handling or permits in conjunction with disposal. 8.3LANDLORD'S COVENANTS. Landlord warrants, represents. covenants and agrees as follows: 8.3.1To the best of Landlord's knowledge (other than as disclosed in the Environmental Reports (as defined herein), no Hazardous Substance has been released, discharged or disposed of on, under or about the premises, Building, or Property (or off-site of the Property which might affect the premises. Building. or Property) by any entity or person, Orfrom any source whatsoever. Without limiting the foregoing. Landlord represents that the following constitutes all information in Landlord's possession or control concerning any release of Hazardous Substances on. under, or about the Premises, Building. or Property (or off-site of the Premises that might affect the Premises, or off-site of the Property that might affect the Premises. Building, or Property) including, without limitation, sampling data, environmental studies or reports, environmental site assessments, building surveys. and historical use reviews (collectively. •Environmental Reports"), all of which have been provided to Tenant: Phase I Environmental Site Assessment dated February 18, 2022 ECS Southeast, LEP. 8.3.2Landlord shall require each Of its employees. agents, contractors, subcontractors. tenants. subtenants: or any other party over whom Landlord has supemsion or control or right of the same to comply with all applicable Environmental Laws. 8.33 Without limiting the foregoing and to the best of Landlord's knowledge. (a) there are no underground storage tanks on the Premises, Building. or property; (b) no underground storage tanks have been removed from the Premises, Building. or Property; (c) there is no asbestos or asbestoscontaining material in or on the Premises or Building. and no asbestos or asbestos-containing material has been removed from the Premises. Building, or Property: (d) no facilities involving the manufacture or disposal of any Hazardous Substance or the use or storage of more than five hundred (500) gallons of any Hazardous Substance per year, including. without limitation, gasoline stations, automobile repair facilities, dry cleaners. photo developing laboratories, junkyards, landfills, waste treatment storage, disposal, processing Or recycling facilities have been located on or adjacent to the Premises, Building, or Property. NC *8468) 8.3.4Landlord shall give prompt written notice to Tenant of: (a) any proceeding or inquiry by any govemmental authority with respect to the presence of any Hazardous Substance on the premises. Building. or Property (or off-site of the Premises that might affect the premises) or related to any loss or injury that might result from any Hazardous Substance, (b) all claims made or threatened by any third party against Landlord or the Premises, Building, or property relating to any loss or injury resulting from any Hazardous Substance; and (c) LandlordEs discovery of any occurrence or condition on the Premises, Building. or Property (or off-site of the Premises that might affect the Premises) that could cause the Premises or the Common Areas, if any, or any part of either, to be subject to any restriction on occupancy or use of the Premises under any Environmental Law. 8.3.5Subject to Tenants obligations set forth in Section 8.5.1 , if any Hazardous Substance is deposited, released, stored. disposed of, discovered, or present in or on the Premises, Building, or Property, Landlord, at Landlord's expense, shall promptly and diligently, to the extent required by any applicable law. including (without limitation) any Environmental Laws, rules, regulations and policies of any govemmental entity with jurisdiction over the same, and compliance with such laws, remove, transport and dispose of such Hazardous Substance. Landlord, at Landlord's expense. shall promptly and diligently investigate any claim from Tenant concerning the presence or suspected presence of a Hazardous Substance on or in the premises. Building, or Property, including (without limitation) the sampling. monitoring and analysis of soil (both surface and subsurface), groundwater and air quality (both indoor and outdoor). Such investigation shall be performed by environmental contractors reasonably acceptable to Tenant. Landlord shall use its best efforts to minimize direct and indirect impact on Tenant, including its operations in the Premises and effective use of the Common Areas, if any, during all activities related to remediation. Without limiting the foregoing, prior to the Commencement Date, Landlord shall, at its sole cost and expense, remove all asbestos and asbestos-containing material from the Premises. If any asbestos or asbestos.containing material is discovered in the premises during Tenant's inspection of the premises. construction of its initial or subsequent tenant improvements or at any other time during the Term, then Landlord shall promptly remove the same or cause it to be removed at Landlord's sole cost and expense and if the foregoing delays the construction or installation of Tenant's improvements. then the Rent Commencement Date shall be extended for one (1) day for each day of delay. In the event that there shall now or in the future exist any Hazardous Substances in, on, under or about the Premises, Building, or Property (not caused by Tenant) that adversely affect Tenant's use of or operations from the Premises, access to or visibility of the Premises. Tenant's construction of its improvements or Tenant's use of the Common Areas (collectively •Interference"), then: (i) Base Rent and all other charges payable under this Lease shall be equitably abated in proportion to the effect of the Interference on Tenant's operations: (ii) if Tenant. in its sole discretion, decides to cease operating in the Premises, then: (a) all Base Rent and all other charges payable under this Lease shall abate until the date on which Tenant is reasonably able to reopen for business from the Premises without any Interference and (b) for each day of closure, Landlord shall pay to Tenant. as liquidated damages and not as a penalty, the sum of Five Hundred Dollars (S500.OO) per diem; (iii) if such Interference occurs prior to the Rent Commencement Date, then the Rent Commencement Date shall be delayed for one (1) day for each day of Interference (nonvithstanding anything in Section 3_1 of this Lease to the contrary): and (iv) if such Interference continues for more than ninety (90) days. Tenant may terminate this Lease, in which event Landlord shall pay to Tenant within twenty (20) days of the date Tenant vacates the Premises an amount equal to the unamortized portion (based on a straight-line amortization over the Inital Term) of Tenant's store development Costs incurred in connection with the Premises. including (without limitation) attorneys' fees, design fees, consultant fees (whether the foregoing fees are incurred by outside or in-house personnel), permitting fees. site selection costs, and construction costs, plus all other costs and expenses incurred by Tenant in connection with this Lease and the Premises. 8.4TENANTS USE OF ANY HAZARDOUS SUBSTANCE. The onw Hazardous substances Tenant may use in its operations are cleaning solutions and other substances as are customarily used in Tenant's business. Tenant will manage such use in accordance with the Environmental Laws. 8.5INDEMNITIES. Catawba, Ha-vecck. NC Starb December 20 9 8.5.1Tenant shall protect defend, indemnify, and hold harmless Landlord and Landlods employees, agents. parents, and subsidiaries from and against any and all loss. damages, costs, claims. damage, expense. or liability, including, without limitation, attorneys' or other professional fees, and the costs of repairs and improvements necessary to return the premises to the physical condition existing prior to undertaking any activity related to any Hazardous Substance ("Claims") actually incurred by Landlord directly arising out of or attributable to Tenant's or Tenant's agents' , contractors', or employees' use, manufacture, storage. release, or disposal of a Hazardous Substance on the Premises, Building. or Property. This indemnity shall survive the termination Of this Lease. Landlord shall protect, defend, indemnify and hold harmless Tenant and its agents, officers. directors, contractors. employees, parents, subsidiaries, successors and assigns from and against any Claims directly or indirectly related to: (a) a violation of or responsibility under Environmental Laws unless such Claims are direcffy related to Tenant's, or Tenant's agents, contractors or employees use. manufacture. storage, release or disposal of a Hazardous Substance on the Premises, Buiding, or property: or (b) a breach in any material respect of any representation, warranty, covenant or agreement contained in this Article. This indemnity shall survive the termination of this Lease. DAMAGE OR DESTRUCTION. 9.1MATERIAL DAMAGE. If the Premises, Building, or Property are damaged or destroyed by fire or any casualty which cannot, despite diligent, good faith efforts be repaired or restored within one hundred eighty (180) days following the date on which such damage occurs, then Tenant may elect to terminate this Lease effective as cf the date of such damage or destruction, Within thirty (30) days after the date of such damage. the parties shall reasonably determine how long the repair and restoration will take. After that determination has been made, Tenant shall have a period of thirty (30) days to terminate this Lease by giving written notice to Landlord. 9.2REPAIR AFTER DAMAGE. If Tenant does not give written notice of Tenant's election to terminate as provided in Section g_l, then Landlord shall. subject to the provisions of this Section, immediately commence and diligently pursue to completion the repair of such damage so that the Premises, Building and Property are restored to a condition of similar quality, character and utility for Tenant's purposes, including restoration of all items described on Exhibit C existing in the premises prior to such damage. Notwithstanding anything contained herein to the contrary, if tha Premises. Building, and Property are not repaired and restored within one hundred eighty (180) days from the date Of the damage. Tenant may terminate this Lease at any time before Landlord completes tha repairs and delivers the restored Premises to Tenant- If Tenant does not so terminate, Landlord shall diligently continue to restore the Premises, the Building and all other portions of the Premises. Building, and Property as are necessary of beneficial to the operation of Tenants business in the Premises. In the event of termination, Landlord shall retum any prepaid Base Rent and other prepad amounts to Tenant within thirty (30) days from the date of termination of this Lease. 9.3UNINSURED DAMAGE. If damage or destruction is caused by a peril not required to be insured against hereunder and for which insurance proceeds are not available, either Landlord or Tenant may terminate this Lease by thirty (30) days written notice to the other of its election so to do and this Lease shall be deemed to have terminated as of such date unless the other party agrees in writing to pay for such repairs or restoration. 9.4DAMAGE DURING FINAL TWO YEARS. If any damage or destruction occurs to the Premises, the Building. the Drive-Through Facility. the Common Areas, or, to the extent not included within the foregoing, the Property during the last two (2) years of the Initial Term or any Extension Term and the cost to repair the damage exceeds Fifty Thousand Dollars ($50,000.00), either Landlord or Tenant may terminate this Lease upon giving the other party thirty (30) days written notice; provided, however, that if Landlord notifies Tenant that it wishes to terminate this Lease. then Tenant may, if it has not already done so. exercise its right to extend the term of this Lease under Section 2.4 whereupon Landlord's election to terminate shall be null and void. 70 20IE StarbuBT*UGKS Revised 9.5 ABATEMENT OF RENT. If Landlord is required to repair or restore the Premises, Building. or Property under any provision of this Article and Tenants use of the Premises is affected, then until Landlord completes such repair or restoration, Base Rent and Annual Additional Rent shall abate from tha date of destruction based on the degree of impact such damage and repairs have on Tenants operations within the Premises as measured by the proportionate reduction in Tenant's sales volume until the repairs are mmpleted and Tenant can fully operate in the Premises. 10.PROPERTY TAXES. 10_1 DEFINITION OF *REAL PROPERTY TAXEST subject to Section 12.2 betow, forpurposes of this Lease. the phrase -Real Property Taxes" shall include general real estate taxes and assessments payable with respect to the Property that are imposed by any authority having the power to tax any legal Or equitable interest of Landlord in the Property, provided. however, that assessments shall be prorated and divided into the maximum number of installments permitted by law and only the current portion shall be included in Rea/ Property Taxes for any Lease Year. Notwithstanding the foregoing, Real property Taxes shall not include: (a) any inheritance, estate. succession. transfer, gift, franchise, or capital stock tax; (b) any gross or net income taxes: (c) any excise taxes imposed upon Landlord based upon gross or net rentals or other income received by it: or (d) Real Property Taxes assessed against the Property for periods of time prior to the Rent Commencement Date. '02 PAYMENTOF REAL PROPERTY TAXES. As ofthe Rent CommencementDate, Landlord represents and warrants that: (a) Landlord has paid in full all Real Property Taxes due as of the Rent Commencement Date, (b) Landlord shall pay when due all future Real Property Taxes and (c) the tax parcel number of the Property is set forth on Exhibit A. Landlord shall render to Tenant, promptly after the receipt of the tax bill applicable to the premises for a given period during the Term, a full complete and legible copy of such tax bill and a detailed statement showing the amount of Real Property Taxes and indicating in reasonable detail the items included in Real Property Taxes and the computation of Tenant's Pro Rata Share of Real Property Taxes. For each Lease Year during the Term, Tenant shall pay Landlord, as additional rent. Tenant's Pro Rata Share of Real Property Taxes in the manner set forth in Section 12. Subject to making estimated payments pursuant to Section 12. Tenant shall pay Real Property Taxes only as such taxes become due and payable during the Term prorated for any partial assessment period occurring immediately before the Rent Commencement Date and after the Expiration Date. If Real Property Taxes assessed against the Property for periods of time during the Term are billed by the applicable taxing authorities following the expiration or earlier termination of the Term. the parties agree that the Real property Taxes for such period during the Term shall be calculated based on the Real Property Taxes billed by the applicable taxing authorities for the immediately preceding period during the Term, in full satisfaction of such reimbursement obligation to Landlord. In the event that the taxing authority offers a discounted tax rate or a penalty rate based on the date of payment, Tenant's property tax shall be calculated at the lowest possible discounted amount regardless of the date of Landlord's payment to the taxing authority. Tenant shall have the right to challenge, at its sole expense, the Real Property Taxes and Landlord agrees to provide whatever assistance or cooperation that Tenant may reasonably require, including Landlord's agreement to sign all necessary instruments in connection with such application or appeal. Upon the request of Tenant. and if required to preserve the right to challenge such taxes, Landlord will pay all Real Property Taxes under protest or in such other manner as preserve the right to challenge such taxes. Tenant may challenge Real Property Taxes if Tenant pays any protested amount to Lanc*ord. Landlord will reimburse Tenant for Tenanes Pro Rata Share of any refund of Real Property Taxes received as a result ot any tax contest. 10.3PERSONAL PROPERTY TAXES. Tenant shall pay, prior to delinquency, all personal property taxes assessed against Tenant directly and applicable to its personal property located in the Premises. 10.4PROPERTY TAX PROTECTION. Notwithstanding anything contained herein to the contrary, if Landlord sells or transfers the Building or Property, or if a change of ownership occurs and as a direct result the Real property Taxes increase, Tenant shall not be obligated to pay any portion of such increase becoming due during the Initial Term, us & Havelock. NC (Store #8468) 1 1.UTILITIES. 11.1 UTILITIES. Landlord shall pay all utility connection fees (including without limitation all water and sewer connection fees), traffc impact fees, and any other impact and extraordinary fees that are associated with the construction of Tenant's Initial Improvements or Tenants use of the Premises. At Landlord's sole cost and expense, Landlord shall ensure communications and internet services infrastructure is located on the Tenant Parcel and available for Tenants use at the Premises and as described on Tenant shall have the right to sufficient utilities and ventilation to support its intended use of the Premises. Without limiting the foregoing, Landlord either: (a) represents and warrants that the Building has sufficient electrical capacity as described on Exhibit C without the need for an upgrade in utility service; or (b) covenants to upgrade the electrical capacity of the Building prior to the Commencement Date. at Landlord's sole cost and expense, as described on Exhibit C. Prior to the Commencement Date, Landlord shall install separate meters for gas, electric, water and sewer services at the Premises in such locations which are accessible to Tenant. Landlord shall install, provide and maintain such meters at Landlord's sole cost and expense during the Term of this Lease. Subsequent to the Commencement Date. Tenant shall pay directly to the applicable utility provider the utility charges for all water. sewer. gas And electricity used by Tenant during the Term. Tenant will have no obligation to pay or reimburse Landlord for any utility charges that were incurred or billed before the data that the then-current Landlord purchased the Property from the previous landlord. Landlord acknowledges that Tenant has the right to contract with and use its own energy service providers and until it does so Landlord may use its own energy service providers to serve the Premises. The provisions in this Section 11.1 are subject to the provisions set forth in Section 11.2 11.2 ALTERNATIVE ENERGY SYSTEM. 11.2.1 Alternative Energy Svstem. Nouithstanding anything contained in Section 1 1 , 1 or elsewhere in this Lease, subject to Landlord's approval as further described below, Tenant (in its sole discretion and at its sole cost and expense) or its solar contractors, suppliers or other alternative energy agents CAE Agent') shall have the right to install, utilize. maintain and remove a solar photovoltaic or similar solar energy system including an related equipment. appurtenances. wiring and meters or any other form of alternative energy system (such as wind power) (collectively referred to as "AE System") on the roof cf the Buihing immediately above the Premises for use at the Premises provided that the AE System shall not extend above the top of the roof parapet walls. The installation will include the right to make necessary penetrations through the roof and/or walls of the Building for such use. Any and all roof penetrations by Tenant shall be performed with written notice to Landlord and an opportunity for Landlord's roofing contractortobe present and in such manner so as not to void Landlord's roof warranty, At Tenant'S election the AE System shall be connected to Tenant's electrical,'mechenical system in lieu of (or as a supplement to) the standard electrical usage for the Premises set forth in Section 11.1 above provided that sufficient power is available from the Premises for such AE System. The AE System shall be in accordance with applicable law and Tenant's AE System performance specifications and shall comply with the proper roofing standards for such systems. Subjectto Landlord's approval rights (if applicable) pursuant to Section 6.5.2). Tenant shall be permitted to make any necessary changes, alterations or additions to the AE System at any time during the Term (including any extensions or renewals). Tenant shall submit its AE System plans to Landlord. and Landlord's prior reasonable written consent shall be required as to the size. location, weight load, and roof installation methods for the AE System; it being understood and agreed that in connection with such approval process, Landlord shall have the right to consider, without limitation. the structural integrity of the Building, the mechanical and electrical systems of the Building, aesthetics, visibility, economic impact. warranties, safety or any other commercially reasonable concerns. In addition, Tenant shall: (1) not make any of the AE System improvements until Landlord has completed all of its construction on the Tenant parcel and has received a Certificate of Completion for the entire Building and Property; (2) ensure that all installations or related activities with respect to the AE System do not void or diminish any building. roof. or other warranties of Landlord or other tenants in the Building; (3) not adversely affect the Building. structure. or mechanical or other systems of the Building in connection with installation of the AE System; and (4) obtain Landlord's prior written approval with respect to the size, location, weight load, and roof installation methods for the AE System, which approval shall not be unreasonably withheld, conditioned, or deiayed, but with respect to which Landlord may consider, without limitation, the structural 70Havebc*. NC *488) 0 201g Revised integrity of the Building, the mechanical and electrical systems, aesthetics, visibility, economic impact, warranties. safety, or any other commercially reasonable concems related to the AE System. It shall be Tenant's and/or its AE Agents sole responsibility (including all costs): (i) to obtain all required related permits; (i) to install. operate and maintain the AE System in good condition and repair; and (iii) to indemnfy Landlord, its agents and employees, from and against all costs for property damage or bodily injury arising solely out of the installation, operation, maintenance and/or removal of the AE System (including. without Imtaüon. any related roof repair). Tenant and/or its AE Agent shall be entitled to remove the AE System at end of the Term. or at any time during the Term in its sole discretion, without Landlord's consent, provided Tenant repairs any damage caused by such removal. Tenant shall be entitled to the exclusive use of the electricity generated by the AE System at the Premises, even if it is purchased from its AE Agent. Tenant and/or its AE Agent are solely entitled to the proceeds [rom the sale of any unused AE System electricity generated at the Premises. NoWithstanding anything to the contrary contained herein, if the AE System is not removed within thirty (30) days after the expiration or earlier termination of this Lease and Landlord's written request to Tenant to remove such AE System. then the AE System shall be deemed abandoned and shall thereupon become the property of Landlord. 11.22 Easement If requested by Tenant, Landlord shall execute and record an easement consistent with the rights and obligations of the parties to this Lease at no additional rental charge. 11.2.3 Financinq_ Landlord agrees that in the event Tenant's and/or the AE Agenes or an AE System lessor (collectively "AE Lender") provides financing or a rental arrangement for AE System, the AE System (regardless how it is attached to or incorporated in the Building and the Premises) shall remain the property of Tenant, the AE Agent and/or the AE Lender. Any collateral securing such financing would create a first priority security interest ("Security Interest") in the AE System in favor or the AE Lender to be perfected by the filing of a Financing Statement (Form UCC-I ) under the Uniform Commercial Code as personal property only, and not as a fixture upon the Building or Property. Landlord acknowledges and accepts the existence of such Security Interest and agrees that the AE System shall at all times remain the personal property of Tenant, AE Agent and/or AE Lender for which Landlord disclaims and releases any lien of Landlord in or to the AE System as a fixture or othen,vise. Landlord, to its actual knowledge. represents and warrants that the installation of the AE System and the granting of the Security Interest will not violate any covenant, restriction, lien. financing agreement or security agreement to which Landlord is a party. upon the request of Tenant or AE Agent, Landlord shall execute and deliver an acknowledgement. in a form reasonably satisfactory to AE Lender and Landlord, confirming the provisions of this Section 11.2. Landlord disclaims and waives any right to receive any and all savings, subsidies. credits. renewable energy allowances, rebates. tax incentives or other incentives based upon the installation and maintenance of the System, all of which shall be for the exclusive benefit of Tenant, AE Agent and/or AE Lender (as the case may be). Tenant shall cause any UCC or other filings made in connection with the AE System to be terminated upon expiration or earlier termination Of the Term. 12.TENANT'S PRO RATA SHARE OF COMMON AREA OPERATING EXPENSES, INSURANCE AND TAXES. 12.1GENERAL DEFINITIONS. The term -Operating Expenses" shall mean the reasonable and necessary. out-of-pocket costs and expenses actually paid in any calendar year directly attributable to maintaining, operating. and providing servnces to and for the Common Areas without duplication. including the costs of utilities, maintenance, supplies and wages, and subject to the exceptions set forth in Section 12.5. The term •Common Areas" shall mean all portions of the Building and Tenant Parcel (excluding the Premises) including landscaped areasr parking lots. and sidewalks. The terms 'Landlord's Insurance' and 'Real Property Taxes' shall have the meanings assigned in Sections 7.2 and 10.1 respectively and shall not be included in Operating Expenses for any purpose, including, without limitation, the calculation of any management or administrative fees. 12.2DEFINITION OF TENANT'S PRO RATA SHARE. Tenantß Pro Rata Share Of operating Expenses and Landiord's Insurance shall be the ratio of the Gross Leasable Area of the Premises to the Gross Leasable Area of the Tenant Parcel (Tenant's "Pro Rata Share"), Tenant's pro Rata Share of US S *68468)a 2019 starbu$TÅRBrbi6KS Revised 2019 Operating Expenses and Landlord's Insurance shall be one hundred percent (100%). until such tima as the Property has been subdivided and a separate tax parcel number has been assigned to the Tenant Parcel. Tenanfs Pro Rata Share of Real Property Taxes shall be the ratio of the Gross Leasable Area of the Premises to the Cross Area of the Property (Tenant's "RPT pro Rata Share"). Tenant's RPT Pro Rata Share shall be thirty-three and three-tenths percent (33.3%). Landlord represents and warrants that the Property is estimated to contain seven thousand five hundred (7, 500) square feet of Gross Leasable Area. Once the Tenant Parcel and the Adjacent Parcel have been separately assessed and a tax parcel number has been assigned to the Tenant Parcel. Tenant's RPT Pro Rata Share shall thereafter be one hundred percent (100%), based upon the ratio of the Gross Leasable Area of the premises to the Gross Leasable Area of the Tenant Parcel. 12.3TENANT'S PAYMENT. Commencing on the Rent Commencement Date, for each calendar year of the Term (prorated for any calendar year falling partially within the Term), Tenant shall pay to Landlord as additional rent Tenant's Pro Rata Share of Operating Expenses and Landlord's Insurance and Tenan?s RPT Pro Rata Share of Rea' property Taxes (collectively known as "Annual Additional Rent"). prior to the Rent Commencement Date and at least thirty (30) days prior to the beginning of each calendar year thereafter. Landlord shall furnish to Tenant a written statement setting forth the following: (a) the amount Landlord estimates Landlord will pay for Operating Expenses (broken down into reasonable categories), Real Property Taxes, and Landlord's Insurance for the then upcoming calendar year: (b) Landlord's estimate of Tenant's Annual Additional Rent: and (c) a calculation of one-twelfth (1/12) of Landlord's estimate ofTenant•s Annual Additional Rent ("Monthly Estimated Rent"). Landlord's estimates of Tenant's Annual Additional Rent shall be reasonably based on the actual amounts paid by Tenant for such expenses during the previous year. Tenant shall pay to Landlord the Monthly Estimated Rent beginning on the Rent Commencement Date and on the first day of every successive calendar month thereafter during the Term. Monthly Estimated Rent for a period of less than one month shall be prorated on a daily basis based ona three hundred sixty-five (365) day year. Notwithstanding any provision of this Lease, Tenant's Pro Rata Share of Operating Expenses from the Rent Commencement Date through the end of the first full calendar year shall not exceed (on an annual basis, prorated for any initial, partial calendar year) Five and 50/100 Dollars ($5.50) per square foot of Gross Leasable Area in the Premises. Tenants pro Rata Share of Landlord's Insurance from the Rent Commencement Date through the end of the first full calendar year shall not exceed (on an annual basis, prorated for any initial, partial calendar year) Fony Cents (SO_40) per square foot of Gross Leasable Area in the Premises, and Tenant's RPT Pro Rata Share of Real Property Taxes from the Rent Commencement Date through the end of the first full calendar year shall not exceed (on an annual basis, prorated for any initial, partial calendar year) One and 25/100 Dollars (Sl -25) per square foot of Gross Leasable Area in the Premises. Notwithstanding anything contained herein to the contrary, the portion of Tenant's Annual Additional Rent attributable to Operating Expenses for any calendar year following the first full calendar year of the Term shall not exceed one hundred five percent (105%), on a non-cumulative basis, of the portion of Tenant's Annual Additional Rent attributable to Operating Expenses payable by Tenant for the previous calendar year. 124 RECONCILIATION. For each calendar year of the Term, within ninety (90) days after the end of each calendar year, Landlord shall furnish to Tenant, at the notice address provided for in Article 25, a statement in reasonable detail and certified as complete and correct by an authorized representative of Landlord. including supportive documentatiorl, setting forth (a) Landlord's actual costs for Operating Expenses, Real Property Taxes and Landlord's Insurance for that year by category and amount; (b) the amount of Tenant's Annual Additional Rent; and (c) the sum of Tenant's Monthly Estimated Rent payments made during tie year. If the amount of Tenant's Annual Additional Rent exceeds the sum Of Tenant's Monthly Estimated Rent payments (and a statement has been received during such ninety (90) day period), Tenant shall pay the deficiency to Landlord within forty-five (45) days after Tenant's receipt of such statement. provided that Tenant may suspend payment of any amount which (x) it disputes in good faith, (y) was paid by Landlord in a calendar year other than the year covered by the statement, or (z) it has not been provided with reasonabte details as set forth above: until resolution thereof. If the sum of Tenant's Monthly Estimated Rent payments during the year exceeds the amount of Tenant's Annual Additional Rent, Landlord shall pay the excess to Tenant at the time Landlord is required to furnish the statement, or, if the Term has not expired. may credit the excess toward the payments of Base Rent and Tenant's Monthly Estimated Rent next falling due. Landlord shall be deemed to have waived its right to payment for any Havdock. amount which is understated or not included in the statement for the year in which the work was performed or the cost was billed to Landlord. Tenant shall not be required to reimburse Landlord for any amounts claimed to be due to Landlord in connection with any reconciliation not produced by Landlord within the time period referenced above. In addition, Tenant shall have no obligation to pay or reimburse Landlord for any expense included in Annual Additional Rent that was incurred or billed before the date that the thencurrent Landlord purchased the Property from the previous landlord if Tenant previously paid such amount to Yle then-current Landlord. 12.5 EXCLUSIONS FROM EXPENSES. Notwithstanding anything to the contrary contained in this Lease, Operating Expenses shall not include: (a) the initial costs of any item properly chargeable to a capital account (using generally accepted accounting principles consistently applied) nor the original costs of constructing the Building; (b) the cost of any capital addition, repair or replacement to the Building (nor reserves therefor): (c) expenses for which Landlord is or will be reimbursed by another source (excluding Tenant's reimbursement for Operating Expenses). including but not limited to repair or replacement of any item covered by warranty; (d) costs incurred to benefit (or as a result of) a specific tenant or items and services selectively supplied to any specific tenant; (e) expenses for the defense or Landlord's title to the Property (including the Tenant Parcel and/or the Adjacent Parcel); (f) structural repairs and replacements: (g) depreciation and amortization of the Building or financing costs, including interest and principal amorization of debts; (h) charitable, lobbying, special interest or political contributions; (i) costs of improving or renovating space for a tenant, or space vacated by a tenant; (j) any amounts expended by Landlord to comply with any Environmental Laws; (k) costs to correct original or latent defects in the design, construction or equipment of the Building; (l) any repair, rebuilding or other work necessitated by condemnation, fire, windstorm or other insured casualty or hazard; (m) any expenses incurred: (i) to comply with any govemmental laws, regulations and rules or any court order, decree or judgment including, without limitation. the Americans with Disabilities Act; or (ii) as a result of Landlord's alleged violation of or failure to comply with any governmental laws, regulations and rules or any court order, decrea or judgment; (n) leasing commissions, advertising expenses and other costs incurred in leasing or procuring new tenants; (o) rental on ground leases or other underlying leases; (p) attorneys' fees, accounting fees and expenditures incurred in connection with tax contests or negotiations. disputes and claims of other tenants or occupants of the Building and Property or with other third varies except as specifically provided in this Lease; (q) cosi of the initial stock of tools and equipment for operation repair and maintenance of the Building and Property; (r) any duplicate expenses or costs; (s) amounts billed (directly or indirectly) for salaries, overhead and expenses for office rent and office supplies; (t) administrative or management fees (in the aggregate) which exceed ten percent (10%) of Tenant's Pro Rata Share of the Operating Expenses; and (u) any fines, penalties. interest, liability, liens. assessments, costs. expenses or other fees or amounts imposed upon Landlord or the Property (including the Tenant Parcel and/or the Adjacent Parcel) under any covenants, conditions, restrictions. easements or similar agreements. including without limitation as a result of Landlord's or any other third party's failure to perform any obligations or to pay any amounts due thereunder). As noted in Section 12.1 above, Landlord's calculation of administrative and/or management fees shall not be based on any charges related to Common Area utility costs. Landlord's Insurance, and/or Real property Taxes. '2.6 RECORDS. Landlord shall keep records showing all expenditures incurred as Operating Expenses, Landhrd's Insurance and Real Property Taxes for each calendar year for a period of three (3) years following each year. and such records shall be made available for inspection and photocopying by Tenant and/or its agents during ordinary business hours in the city in which the Premises are located. 12.7 DISPUTE RESOLUTION. Any dispute with respect to Landlord's calculations of Tenant's Annual Additional Rent shall be resolved by the parties through consultation in good faith within sixty (60) days after written notice by Tenant to Landlord. However, if the dispute cannot be resolved within such period, the parties shall request an audit of the disputed matter from an independent, certified public accountant selected by both Landlord and Tenant (it being agreed that no such auditor shall be paid on a contingency fee basis). whose decision shall be based on generally accepted accounting principles and shall be final and binding on the parties. If there is a variance of three percent (3%) or more between said decision and Landlord's determination of Tenants Annual Additional Rent, Landlord shall pay tha costs of the audit and shall credit any overpayment toward the next Base Rent and/or Monthly Estimated Rent us & payrnent falling due or pay such overpayment to Tenant within thirty (30) days of completion of the audit. If the variance is Jess than three percent (3%), Tenant shall pay the cost of said audit. E-ach pany agrees not to enforce any alleged reconciliation defaults during the period in which the parties are exercising such good faith resolution efforts prior to a final audit determination. 13.ASSIGNMENT AND SUBLETTING. Tenant may sublet all or any portion of the Premises or assign this Lease without Landlord's consent For the purpose of this Lease. any sale Or transfer of Tenant's capital stock, redemption. or issuance of additional stock of any class shall not be deemed an assignment, sublet, or any othertransfer ofTenanrs interest in this Lease orthe Premises. Landlord shall not be entitled to any consideration in connection with any assignment or sublease. Tenant shall be released of all Lease obligations and future liability following any assignment or sublease. 14.DEFAULTS; REMEDIES. 14.1TENANTS DEFAULTS. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant: 14.1.1The failure by Tenant to make any payment of Base Rent or any other payment required to be made by Tenant hereunder. as and when due. where such failure shall continue for a period of twenty (20) days after Tenant's receipt of Landlord's notice in writing Of such failure; or 14.1.2The failure by Tenant to observe or perform any of the Covenants, conditions, or provisions of this Lease to be observed or performed by Tenant, other than the payment of sums due hereunder. where such failure shall continue for a period of thirty (30) days after Tenant's receipt of Landlord's written notice thereof: provided. however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant comrnences such cure within such thirty (30) day period and thereafter diligently pursues such cure to completion. 14.2REMEDIES 'N DEFAULT. In the event of any such default which remains uncured after the expiration of the applicable notice and cure period(s) specified above, Landlord may, in accordance with procedures required by law, pursue one of the following remedies: 14.2.1In the event of a material default, Landlord may terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall surrender possession of the Premises to Landlord within thirty (30) days after Tenants receipt Of Landlord's written notice of termination. Landlord shall not be entitled to terminate this Lease during any time that the parties are involved in a good faith dispute regarding the existence of an alleged material default. In the event Landlord is permitted to terminate this Lease as set forth herein, Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting (including the cost of returning the Premises to the surrender condition required by this Lease, but excluding necessary renovation and alteration of the Premises for use by a subsequent tenant or occupant), and the Base Rent and Annual Additional Rent as it becomes due hereunder; provided that Tenant shall be entitled to a credit against such amounts equal to (i) the amounts received by Landlord by re-leasing the Premises or otherwise mitigating its damages or (ii) if Landlord fails to re-lease the Premises due to Landlord's failure to use diligent commercially reasonable efforts to do so , the fair market rental value of the Premises for the applicable period. If Landlord relets the Premises. then, for purposes of determining the amounts due to Landlord hereunder, any rent or other concessions given to the new tenant shall be prorated evenly throughout the entire term of the new lease; or 14.2.2Landbrd may maintain Tenant's right to possession, in Which case this Lease shall continue ineffectwhether or not Tenant shall have abandoned the Premises, In such event, Landlord shall be entitled to enforce all of Landlord's rights and remedies under this Lease including the right to recover the Base Rent and Annual Additional Rent as it becomes due hereun der a Havecck, Notwithstanding the foregoing, with respect to any remedy exercised by Landlord, Landlord shall have an affrmative obligation to obtain another tenant for the Premises promptly, at a fair market rental, and to otherwise mitigate its damages. 14.3LANDLORD DEFAULTS AND REMEDIES. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Landlord: (a) Landlord's failure to do, observe, keep and perform any of the terms, covenants, conditions, agreements or provisions of this Lease required to be done, observed, kept or performed by Landlord, within thirty (30) days after written notice by Tenant to Landlord of said failure (except when the natura of Landlord's obligation is such that more than thirty (30) days are required for its performance. then Landlord shall not be deemed in default if it commences petformance within the thirty (30) day period and thereafter diligently pursues the cure to completion); or (b) the failure of any representation or warranty to be true when deemed given hereunder. Notwithstanding the foregoing. in the event Landlord's breach creates an emergency situation. or is of such a nature that impairs Tenant's ability to operate at the premises (which shall include by way of illustration and not limitation. obstructions or disruptions to: Common Areas, parking. access to the Premises. Building, and Tenant Parcel. visibility, utdities, roof leaks, health and safety and quiet enjoyment), then Landlord shall be required to rernedy such breach as soon as commercially reasonable and in any event without delay. In the event of a default by Landlord, Tenant, at its option. without further notice or demand, shall have the right to any one or more of the fouowing remedies in addition to all other rights and remedies provided at law or in equity or elsewhere herein: (w) to remedy such default or breach and deduct the costs thereof (including attorneys' fees) from the installments of Base Rent and Annual Additional Rent next falling due; (x) to pursue the remedy of specific performance; (y) to seek money damages for arising from Landlord's failure to discharge its obligations under this Lease; and (z) to terminate this Lease Nothing herein contained shall relieve Landlord from its obligations hereunder, nor shall this Section be construed to obligate Tenant to perform Landlord's repair obliga lions. 14.4WAIVER OF CONSEQUENTIAL AND PUNITIVE DAMAGES. Landlord and Tenant each hereby waive any right to pursue and collect any punitive and/or consequential damages as a result of any default and/or the acts or omissions of Landlord and Tenant, as the case may be. 14.5LANDLORD'S LIABILITY. THERE SHALL BE ABSOLUTELY NO PERSONAL LIABILITY ON THE PART OF THE MANAGER OR MEMBERS OF LANDLORD WITH RESPECT TO ANY OF THE TERMS OF THIS LEASE. SUBJECT TO THE PRIOR RIGHTS OF ANY MORTGAGEE OF THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORDS INTEREST IN THE PREMISES, THE BUILDING, AND THE PROPERTY, INCLUDING ALL EQUITY, RENTS, PROFITS, PROCEEDS AND INCOME THEREFROM. FOR THE SATISFACTION OF EACH AND EVERY MONETARY JUDGMENT OBTAINED BY TENANT IN THE EVENT OF ANY BREACH OR DEFAULT ay LANDLORD OF ANY OF THE TERMS OF THIS LEASE TO BE PERFORMED gy LANDLORD, AND THAT NO OTHER ASSETS OF LANDLORD OTHER THAN SUCH INTEREST IN THE PREMISES, THE BUILDING, AND THE PROPERTY AS DESCRIBED HEREIN, NOR ANY OF ITS MEMBERS, MANAGERS, OFFICERS OR SHAREHOLDERS, SHALL BE SUBJECT TO LEVY, EXECUTION OR OTHER PROCESS FOR SATISFACTION OF TENANTS REMEDIES. 15.CONDEMNATION. 15.1CONDEMNATION OF PREMISES. If any portion of the Premises is taken by a government entity exercising the power ot eminent domain, or sold to a government entity by Landlord under the exercise of said power (the final judicial order that permits the taking is herein referred to as •condemnation"), this Lease shall terminate as to the part so taken as ofthe date the condemning authority takes possession of the condemned portion of the Premises ("Condemnation Date"). If so much of the Premises is taken that, in Tenants reasonable business judgment, the Premises are no longer reasonably suitable for Tenant's operations. Tenant may terminate this Lease. If the entire Premises are condemned, then this Lease shall automatically terminate as of the Condemnation Date, The party who receives the Condemnor's notice of intention to take ("Condemnation Notice') shall immediately give a copy of such notice to the other party. us a Catawba. Haveock. *468) 15.2CONDEMNATION OF THE PROPERTY. If as a result of any condemnation of the Property or any portion thereof (even though the Premises are not physically affected). if (a) the Premises. the Building. or the Tenant Parcel are no longer reasonably suited for the conduct of Tenant's business in Tenant's reasonable business judgment. (b) the number of parking spaces on the Property located within fifty (50) feet of the Premises is reduced by more than t'.vo (2) spaces and Landlord does not provide alternative equally accessible parking, or (c) the Drive-Through Facility configuration and/or dimensions (including any tuming radius or stacking lanes) are materially and negatively affected, then Tenant may terminate this Lease no later than one hundred twenty (120) days after the Condemnation Date by giving Landlord thirty (30) days written notice. 15.3RESTORATION. If this Lease is not terminated, (a) it shall remain in full force and effect as to the portion of the Premises remaining, provided the Base Rent and all other charges payable hereunder shall be reduced in the same proportion that the area taken bears to the total area of the Premises prior to taking, and (b) Landlord shall use the condemnation award to restore the Premises, Building, Tenant Parcel, and property, as applicable, as soon as reasonably possible to a complete unit of the same quality. character. and utility for Tenant's purposes existing prior to the condemnation. anything contained herein to the contrary, f the restoration Of the Premises, Building, Tenant parcel and property is not commenced within thirty (30) days of Landlord's receipt of the condemnation award or is not completed within one hundred eighty (180) days from the Condemnation Date, then Tenant may terminate this Lease at any time before Landlord completes the restoration. If this Lease is terminated. Landlord shall retum any deposits, all prepaid Base Rent and other prepaid sums to Tenant within thirty (30) days of the date of termination of this Lease. 154 AWARD. Landlord and Tenant may each pursue any condemnation award to which it is entitled by applicable law. Tenant may recover from the condemning authority or from Landlord (if Tenant can show that such amount was included in Landlord's award) that portion of any net award or payment attributable to Tenants work or installations in the Premises (other than work or installations paid for by Landlord pursuant to this Lease), including without limitation, the unamortized value of improvements instaued in the Premises by Tenant at Tenant's expense based on straight-line depreciation over the Initial Term without regard to the condemnation. For the purposes of this Section, a 'net" award or payment shall mean the entire award or payment for such taking. less the actual and reasonable expenses incurred in collecting such award or payment. 16.SIGNAGE. Tenant. at its cost. shall have the exclusive right to install or place signs. awnings. or other advertising materials in, on, or about the premises, Building, or Tenant parcel, including all directional signs, menu boards, and other signage associated with the Drive-Through Facility to the maximum extent by local law. design and construction of the Premises will include a tower element as depicted on CTower Element) at no additional rent. Tenant will have the exclusive right throughout the Term and at no additional rent to install and maintain signage on the Tower Element as depicted on Landlord shall not vary or change the location, size, or position of Tenant's signage, including but not limited to the position of Tenanfs signage on any pylon or monument signs. Notwithstanding anything contained herein to the contrary. Landlord hereby consents to. and Tenant shall be permitted to install, Tenant's then-current trademarked name(s), colors. letters, font and logo in Tenant's signage as depicted on Exhi>itB-2 provided that Tenant may, in its discretion. make such modifications to the signs as shown on for reasons including but not limited ton code requirements. Tenant's particular determinabon of the signs needed for the Tenant Parcel, and changes in Tenant's typical signs and trade dress. Notwithstanding anything contained herein to the contrary, Tenant shall not be required to obtain Landlord's consent for any promotional or advertising signs or displays within the interior of the Premises. Landlord shall not allow any signage other than Tenanes to be erected on the exterior walls of the Premises or on the face of the Building immediately in front of the Premises or on the roof above the premises. If Landlord requests that Tenant temporarily remove Tenant's signage after installation for any reason and Tenant consents to such removal in writing, Landlord shall reimburse Tenant for the actual cost incurred by Tenant to remove. store, and re-install the exterior signage. If Landlord has not paid Tenant those costs within thirty (30) days after Tenant re-installs its exterior signage, then in addition to any other remedies Tenant has. Tenant may offset the unpaid amount against Base Rent and all other charges (at Tenants discretion) until Tenant's costs are fully offset. If Landlord materially changes or establishes any Landlord's sign criteria after Tenant executes this Lease (whether or not the changes are being required by a governing authority), then Landlord shall submit Landlord's new sign criteria ('New Sign Criteria') for Tenant's review and approval (in Tenant's sole and absolute discretion). Tenant shall approve or disapprove Landlord's New Sign Criteria or request modifications to Landlord's New Sign Criteria. Landlord shall reimburse Tenant for the actual cost for Tenant to remove the old signage and manufacture and install its new signage ("New Sign Costs") to correspond with Landlord's New Sign Criteria. If Tenant does not approve Landlord's New Sign Criteria or if Landlord and Tenant fail to agree on acceptable revisions to Landlord's New Sign Criteria, Tenant may terminate this Lease by giving written notice to Landlord. If Tenant does not terminate this Lease and Landlord has not paid Tenant its New Sign Costs within thirty (30) days after Tenant installs its new signage then in addition to any other remedies Tenant has, Tenant may offset the unpaid amount against Base Rent and all other charges (at Tenants discretion) until the New Sign Costs are fully offset. 17.PERMIT CONTINGENCY. Tenant's obligations under this Lease are conditioned on Tenant's (or Landlord's (as applicable)) obtaining any permits and/or licenses (including but not limited to conditional use permits, buikiing permits, variances and other governmental approvals) (collectively. the -Government Approvals") that are required by applicable laws to enable Tenant legally: (a) to construct Tenant's improvements to the Premises in accordance with Tenant's plans: (b) to install Tenant's signage on the Premises; (c) to conduct its business from the Premises (including without limitation hours of operation); (d) to provide and operate its Outdoor Seating Area for the Premises; and (e) to construct and operate a Drive-Through Facility from the Premises as specified in Exhibits B-l and g. Tenant's obligations under this Lease are conditioned on Tenant obtaining its Government Approvals within one hundred eighty (180) days following the date Landlord delivers to Tenant its final permitted plans for the Building. Property and Shopping Center (which plans shall be in a industry standard electronic or digital format) (-Permit Contingency Period'). Tenant shall. at Tenant's expense, initiate, and diligently pursue in good faith each Government Approval pertaining to the tenant improvements Tenant constructs inside the Premises, but not for exterior permits. including without 'imitation, the Outdoor Seating Area and Drive-through Facility, which shall be Landlord's responsibility. Landlord shall execute any applications and shall provide Tenant with such further assistance and cooperation as Tenant may require in connection with applications for such Govemment Approvals. If Tenant (or Landlord (as applicable)) does not obtain such Government Approvals on terms satisfactory to Tenant on or before the expiration of the Permit Contingency Period, or if any Government Approvals are not renewed or ere revoked during the Term due to Landlord's conduct, or permits for the Drive-Through Facility are not renewed or are revoked, Tenant shag have the right to terminate this Lease. In the event Tenant nas not sent notice to Landlord confirming its satisfaction, waiver of, or inability to satisfy the contingency described in this Article 17. Landlord shall have the right to send notice to Tenant of Tenant's failure to do so. and shall include in such notice the fact that Tenant has thirty (30) days io respond to Landlord's notice and reciting that Tenant's failure to do so shall be deemed a termination of this Lease_ Tenant shall have thirty (30) days following its receipt of Landlord's notice to respond to Landlord, either to waive the contingency or to elect to terminate this Lease, as provided in this Article 17. If Tenantelects or is deemed to have elected to terminate this Lease pursuant to this Section 17, then Landlord may. at Landlord's option and at Landlord's cost (except for any standard governmental fees and charges that Tenant would have incurred anyway), attempt to assist Tenant in obtaining the Government Approvals (on the same terms as sought by Tenant) on or before the date which is sixty (60) days after Tenant's termination. Tenant will provide reasonable assistance and cooperation in connection with Landlord's attempt to obtain such Government Approvals (but Tenant shall not be required to modify its Plans in order for Landlord to obtain the Government Approvals). If Landlord is successful in obtaining all Government Approvals on terms satisfactory to Tenant within such period, this Lease shall remain in full force and effect. If Landlord etects to attempt to obtain such Government Approvals on Tenant's behalf but is not successful within such sixty (60)-day period, this Lease shall terminate on the expiration of such sixty (60)-day period. After a termination hereunder, neither party shall have any rights or liabilities under this Lease, and Landlord shall return any deposits and prepaid amounts to Tenant, if any; provided that, if such termination is based on Landlord's conduct, Tenant shall be entitled to pursue such other rights and Ha-dock, NC Decembzr remedies as may be available at law or in equity. Tenant shall vacate the Premises within thirty (30) days after exercising the option to terminate as provided in this Article 17. 18.OUTDOOR SEATING. such seating is permitted by the local authorities and subject to compliance with all applicable laws, codes, and ordinances, Tenant may provide outdoor seating for its custorners on property owned by Landlord adjacent to the Premises containing a minimum of five hundred (500) square feet (dimensions and location of such area are set forth on Exhibit B-l and or otherwise as mutually agreed upon by Landlord and Tenant in writing) ("Outdoor Seating Area") at any time during the Term of this Lease atno additional rental. Tenant, at its cost, shall comply with all relevant state, municipal or local laws. regulations, rules, and ordinances applicable to its operations in the Outdoor Seating Area. Tenant shall pay for and obtain all necessary permits for the Outdoor Seating Area. Tenant shall take reasonable steps to keep the Outdoor Seating Area exclusively serving its customers reasonably clean and neat. Landlord shall install a railing as needed to meet all code and permitting requirements for Tenant's anticipated use throughout the Term. 19.INTENTIONALLY DELETED. 20.TENANT'S USE OF COMMON AREAS. Tenant shall have the right to use any and all appurtenances and easements benefiting the Premises. Building, Tenant Parcel and Property along with sufficient Common Areas and parking to support its intended use of the Premises including such portions as are necessary for Tenants operation of the Drive-Through Facility, including necessary stacking lanes, as well as areas necessary for its Outdoor Seating Area. In addition to the foregoing, Tenant shall have the right of access to such portions of the Building and Property outside the Premises as are necessary to enable Tenant to exercise its rights under this Lease. Landlord shall not allow any permanent or temporary kiosk. cart, or other obstruction to be constructed or placed on the Property within one hundred fifty (150) feet of the Premises. Any changes. additions, or alterations to the Premises, Building, or property shall not (a) impair access to. visibility of, or frontage of the Premises; (b) adversely affect the conduct of Tenants customary business therein; or (c) materially and adversely detract from Tenant's signage, create confusion regarding the business conducted in the Premises, or adversely affect the presentation of Tenant's exterior signage and storefront. In the event of any such interference, in addition to Tenant's other rights and remedies under applicable law and this Lease, the Base Rent and Annual Additional Rent shall be equitably abated based on the degree of interference with Tenant's business. 21.PARKING AND ACCESS. All parking on the Tenant Parcel shall be for the exclusive use of Tenant. its agents, employees and customers (and Landlord shall apply for and obtain all variances in connection therewith). Landlord shall not vary or permit to be varied the existing means of ingress and egress to the Building or property. Landlord shall not reduce the number of parking spaces below that which is required by law for Tenant to maintain its permit to use and occupy the Premises or realign the parking spaces in a manner that makes them substantially less accessible to the premises. Landlord shall install bike racks as required by code. 22.TRASH REMOVAL. 22.1TRASH AND RECYCLING AREA. Landlord shall provide Tenant with a lawful location on the Tenant Parcel as shown on Exhibit B-l ("Trash and Recycling Area") for Trash and Recycling Services and Trash and Recycling Improvements (each as hereinafter defined). 22.2IMPROVEMENTS. Landlord shall, at Landlord's expense and as a part of Landlord's Work. install in such Trash and Recycling Area the improvements set forth on ("Trash and Recycling Improvements•) which Trash and Recycling Improvements, including the trash containers, recycling containers. and organic material containers ( "Bins"), shall be for Tenant's sole and exclusive use. 22.3TRASH AND RECYCLING SERVICES. Haveock. NC (Store*68468) 22.3.1 Trash and Recvclable Material. For purposes of this Lease, "Trash and Recyclable Material' means all trash, rubbish, garbage, and Recyclable Materials produced by Tenant in, on, and from the Premises. Recyclable Material means materials such as cardboard, plastic, paper, metal, aluminum. compost. packaging items, mixed recycling, and all other materials subject to Trash and Recycling Laws and/or with established hauling, infrastructure, and secondary markets to support recovery and material reuse in the form of post-consumer content for products. 223.2 Trash and Recyclinq Hauler. For purposes of this Lease, •Hauler Shall refer to a person or entity duty licensed in accordance with applicable law, including, without limitation, all applicable Trash and Recycling Laws. to provide Trash and Recycling Services. Tenant shall have the right to arrange for its own collection. transport, and disposal of Trash and Recyclable Material (•Trash and Recycling Services"). of which will be under Tenant's exclusive control, with a Hauler of Tenant's choice. and provide its own Bins within the Trash and Recycling Improvements for Tenant's exclusive use. Tenant shall pay for all costs for any such services. As used herein, Trash and Recycling Laws shall refer to all federal. state, and local laws. guidelines. codes, rules and regulations applicable to Landlord, Tenant, or to the Property. including, without limitation, all building. zoning and heath requirements, concerning or related to the collection, handling. transport, and disposal of Trash and Recyclable Material. "Recycling Facility" shall refer to a facility duly licensed in accordance with applicable law, including, without limitation. all applicable Trash and Recycling Laws, for the collection, sorting. and recycling of Recyclable Material, including compost (if applicable Trash and Recycling Laws require the collection, handling, transport, and disposal of compost by Tenant or Landlord) and mixed recycli ng. 23.GENERAL PROVISIONS. 23.1ESTOPPEL CERTIFICATE. Tenant shall, no more than twice in any Lease Year and upon not less than thirty (30) days prior written notice from Landlord (addressed to Tenant as set forth in Article 25). execute. acknowledge, and deliver to any prospective purchaser or mortgagee, or to Landlord on such partfs behalf, a statement in Miting on Tenant's standard form or on such other form as is acceptable to Tenant, (a) certifying that this Lease is unmodified and in full force and effect (or. if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect); (b) stating the date to which the Base Rent and other charges are paid and the amount of any security deposit held by Landlord. if any; and (c) acknowledging that there are not, to the actual knowledge of the person executing such certificate, any uncured defaults on the part of Landlord hereunder. or specifying such defaults, if any, which are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Premises. Such certificates shall not affect, prejudice, or waive any rights or remedies of Tenant against Landlord. 23.2LANDLORD'S INTERESTS. Landlord represents and warrants to Tenant that as of the Effective Date of this Lease, (a) Landlord is under contract to own and hold fee title in and to the property enabling Landlord to enter into an enforceable lease with Tenant on the terms and conditions contained herein: (b) the real property identified on shall, upon completion of construction. contain the Premises described in Section 1.1: (c) there are no encumbrances, liens, agreements, or covenants in effect that would limit Tenants rights or augment Tenant's obligations hereunder. and Landlord further represents and warrants that it will not enter into any such encumbrances, liens. agreements, or covenants that do so; and (d) Landlord is unaware of any impending condemnation plans, proposed assessments, or other adverse conditions relating to the Property. Landlord will indemnify and hold Tenant harmless if any of the foregoing representations and warranties prove to be untrue. The term "Landlord" as used herein shall mean only the owner or owners. at the time in question, of the fee title (or a tenant's interest in a ground lease) of the Premises. In the event of an assignment ortransfer of this Lease by Landlord for other than security purposes, Landlord shall cause its assignee or transferee to assume the provisions of this Lease and deliver a new notice address to Tenant, and Landlord shall deliver written notice of such assignment or transfer and a copy of the effective instrument of transfer to Tenant within fifteen (15) days after the date of transfer Tenant shall be entitled to continue to pay rent and give all notices to Landlord until Tenant has received the foregoing from Landlord and notice information from Landlord's transferee. Landlord shall deliver al' funds in which Tenant has an interest, including but not limited to Tenant's security deposit, ifany, to Landlord's purchaser or assignee. From and after a sale of the Premises, Building, Tenant Haven, *8468)02019 starbu$TARBUGKS Parcel or Prowty. Landlord shall be released from all liability toward Tenant arising from this Lease because of any act. occurrence, or omission of Landlord's successors occurring after the transfer of Landlord's interest in this Lease, provided Landlord's purchaser or assignee expressly assumes Landlord's duties and covenants under this Lease. Nothing herein shall be deemed to relieve Landlord of any liability for its acts, omissions or obligations occurring or accruing up to and including the date of such transfer. 23.3 Each Of Landlord and Tenant hereby represents and warrants that this Lease has been duly authorized, executed, and delivered by and on its behalf and constitutes such party's valid and binding agreement in accordance with the terms hereof. 23.4SEVERABILITY_ The invalidity of any provision of this Lease, as determined by a court Of jurisdiction. shall in no way affect the validity of any other provision hereof. 23.5TIME OF ESSENCE. Time is of the essence to the parties executing this Lease. 23.6INTERPRETATION. Article and section headings are not a part hereof and shall not be used to interpret the meaning of this Lease. This Lease shall be interpreted in accordance with the fair meaning of its words and both parties certify they either have been or have had the opportunity to be represented by their own counsel and that they are familiar with the provisions of this Lease. which provisions have been fully negotiated, and agree that the provisions hereof are not to be construed either for or against either party as the drafting party. 23.7INCORPORATION OF PRIOR AGREEMENTS: AMENDMENTS, This Lease contains all agreements of the parties as of the Effective Date with respect to any matter mentioned herein. NO prior agreement, correspondence. or understanding pertaining to any such matter shall be effective to interpret or modify the terms hereof. Oral commitments or promises are not enforceable and shall not be binding or made part of this Lease. Any revisions or modifications to this Lease must be in writing and mutually accepted by persons with full and complete authority to bind the party, as designated by this Lease. Landlord waives the right to claim or assert the existence of any other modifications to this Lease. This Lease may be modified only in writing, signed by the parties in interest. at the time of the modification. Landlord specifically acknowledges that Tenanfs employees at the Premises do not have authority to modify this Lease or to waive Tenant's rights hereunder. 23.8WAIVERS. No waiver by Landlord or Tenant Of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Tenant or Landlord of the same or any other provision. A party's consent to or approval of any act shall not be deemed to render unnecessary obtaining such party's consent to or approval of any subsequent act. No waiver shall be effective unless it is in writing, executed on behalf of Landlord or Tenant by the person to whom notices are to be addressed 23.9RECORDING. Landlord or Tenant may record a short form or memorandum of lease ("Memorandum of Lease') at the requesting party's expense, substantially in the form attached to this Lease as Exhibit L At Landlord's or Tenant's request, the parties shall execute a memorandum of lease in recordable form giving notice of such non-monetary terms as Tenant may reasonably request, including Tenants exclusivity and option rights, together with any other documentation required by the local County Recorders offce. If Tenant elects to record a Memorandum of Lease and Landlord requests in writing the removal of same upon the expiration or earlier termination of this Lease, Tenant shall (at Tenant's expense) remove the recorded Memorandum of Lease from the title records. 23.10HOLDING OVER. If Tenant remains in possession of the premises or any part thereof after the expiration of the Term. with or without the consent of Landlord. such occupancy shall be a tenancy from month-to-month at a rental in the amount of the Base Rent payable in the last month of the Term, plus all other charges payable hereunder. and upon the terms hereof applicable to month-to-month tenancies. 0 23.11CUMULATIVE REMEDIES. Except where otherwise expressly provided in this Lease, no remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity. 23.12BINDING EFFECT: CHOICE OF LAW. This Lease shall be binding upon and benefit the parties, their personal representatives, successors and assigns. This Lease shall be governed by the laws of the state where the Premises are located. 2313 SUBORDINATION. NONDISTIJRBANCE AND AITORNMENT. This Lease st-tall be subordinate to all existing mortgages and/or deeds of trust affecting the Property as of the Effective Date of this Lease. provided that as a condition precedent to the Commencement Date, Tenant may require that Tenant, Landlord and Landlord's lender execute and record a subordination, nondisturbance and attornment agreement CSNDA') in recordable form and substantially similar to the form attached to this Lease as Exhibit M. In addition, Landlord shall not permit any new mortgage or deed Of trust to be recorded against the Property after tr-,e Effective Date and prior to recordation of the Memorandum of Lease unless Tenant, Landlord and Landlord's lender first execute and record an SNDA in substantially the form attached to this Lease as Exhibit M. If requested by Landlord, Tenant agrees to subordinate this Lease to the fien of any mortgage or deed of trust subsequently placed on the Property after the Memorandum of Lease is recorded and to attorn to Landlord's successor following any foreclosure. sale or transfer in lieu thereof; provided that the mortgagee, transferee, purchaser, lessor or beneficiary ("Landlord's Successor") agrees in an SNDA in form and substance satisfactory to Tenant substantially similar to the form attached to this Lease as that Tenant's use or possession of the Premises shall not be disturbed. nor shall its obligations be enlarged or its rights be modified by reason of any such transaction. Notwithstanding any foreclosure or sale under any mortgage or deed of trust (or transfer by deed in lieu thereof) this Lease shall remain in full force and effect. 23.14LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the right to enter the Premises upon seventy-two (72) hours prior written notice for the purpose of inspecting the same, showing the same to prospective purchasers or lenders, and making such repairs to the Premises or to the Building as Landlord is obligated to make pursuant to the terms of this Lease. Notwithstanding the foregoing. in the event of an emergency requiring Landlord's entry into the Premises, Landlord may give Tenant shorter notice in any manner that is practicable under the circumstances. When entering or performing any repair or other work in. on or around the Premises. Building, or Property, Landlord, its agents, employees and/or contractors: (a) shall identify themselves to Tenant's personnel immediately upon entering the Premises. and (b) shall not. in any way. affect. interrupt or interfere with Tenant's use. business or operations on the Premises or obstruct the visibility of. or access to, the premises. In the event of interference with Tenant's operations in the premises, the Base Rent and Annual Additional Rent shall be equitably abated if the interference continues for more than twenty-tour (24) hours. In the avent such interference shall continue for longer than six (6) months, Tenant shall have the option to terminate this Lease or continue to operate with rent abaternent after such interruption has ceased for a time period equal to the duration of such interruption. 23.15ONLY LANDLORD/TENANT RELATIONSHIP. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent. partnership. joint venture or any association between Landlord and Tenant. Landlord and Tenant expressly agree that neither the method of computation of rent nor any act of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of Landlord and Tenant. 23.16ATTORNEYS' FEES. If either party brings an action or proceeding to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, proceeding. trial or appeal, shall be entitled to its reasonable attorneys' fees to be paid by the losing party as fixed by the court. 23.17FORCE MAJEURE. In the event that either party shall be delayed or hindered in or prevented from the gærformance of any covenant. agreement. work, service, or other act required under this Lease to be performed by such party (other than the payment Of rent after the Rent Commencement Catawba Havexk. Date has occurred) (a •Required Act"), and such delay or hindrance due to causes entirely beyond its control. including, but not limited to, adverse weather (but subject to the last sentence hereof), such as riots, insurrections, martial law, civil commotion. war, fire, flood, earthquake, or other casualty or acts of God ( a "Force Majeure Event"). then the performance of such Required Act shall be excused for the period of delay, and the tirne period for performance of the Required Act shall be extended by the same number of days in the period of delay. For purposes of this Lease, the financial inability of Landlord or Tenant to perform any Required Act. including (without limitation) failure to obtain adequate or other financing or Landlord's failure to become the fee simple owner of the Property, shall not be deemed to constitute a Force Majeure Event. A Force Majeure Event shall not be deemed to commence until ten (10) days before the date on which the party who asserts some right. defense or remedy arising from or based upon such Force Majeure Event gives written notice thereof to the other party. No extension of time for or excuse for a delay in the pefformance of a Required Act will be granted for rain. snow, wind, cold temperatures. flood or other natural phenomena of normal intensity or duration, excluding storms named by the National Oceanic and Atmospheric Administration, for the localty where the premises are located. 23.18CONFIDENTIALITY OF LEASE. From and after the date lease negotiations were entered into and throughout the Term of this Lease, the parties shall not disclose any of the terms, covenants, conditions or agreements set forth in the letters of intent or in this Lease or any amendments hereto, nor provide such correspondence, this Lease, any amendments hereto or any copies of the same, nor any other information (oral, written or electronic) which is communicated by or on behalf of Tenant or on behalf of Landlord relating to Tenant's proposed development of the Premises (including, without limitation, architectural plans, specifications, site plans and drawings except those which have been filed for Government Approvals and are therefore in the public domain) or Tenant's business, to any person including, without limitation, any brokers, or any affifiates. agents or employees of such brokers except as set forth herein, without Tenarfs Mitten consent or except as ordered by a court with appropriate authority provided Landlord seeks available protective orders. Norwithstanding the foregoing, Landlord may disclose the terms of this Lease to those of its partners, employees, consultants. attorneys, accountants, current or potential mortgagees. lenders or purchasers of the properly who agree to maintain the confidential nature of such information. or in connection with any requisite Government Approvals, and Tenant may disclose the terms of this Lease to those of its partners, employees, consultants. attorneys, accountants and current or potential lenders. assigns or subtenants who agree to be so bound. 23_19 Landlord agrees to paya brokerage commission to Foundry Commercial. LLC for services provided in connection witl this Lease in accordance with the terms of a separate commission agreement. Except as specifically identified in this Section, Landlord and Tenant each represent to the other that they have not dealt, directly or indirectly in connection with the leasing of the Premises, with any other broker or person entitled to claim a commission or leasing fees. In no event may this Lease be construed to create any express or implied obligation on the part of Tenant to perform this Lease on behalf of any broker (or any person claiming a commission or leasing fee) as primary obligee or as a third-party beneficiary. Landlord and Tenanteach shad indemnify and hold each other harmless from any loss, liability, damage. or expense (including without limitation reasonable attorneys' fees) arising from any claim for a commission or leasing fee arising out of this transaction made by any unidentified broker or Other person with whom such party has dealt 23.20CQNSENIS_ Whenever the right of approval Or consent is given to a party pursuant to this Lease, that party shall not unreasonably withhold, condition, or delay its consent unless this Lease expressly provides otherwise. 23.21WAIVER OF JURY TRIAL. With respect to any litigation arising out of or in connection with this Lease. Landlord and Tenant hereby expressly waive the right to a trial by jury. 23.22OTHER STORES. Notwithstanding anything in this Lease to the contrary, under no circumstances do the patties to this Lease intend to limit or otherwise affect in any way the ability or right of Tenant and Tenants affiliates to open, operate. merchandise, or close any stores anywhere, regardless Of the proximity to the Premises or the potential or actual effect of the opening, operation, merchandising, or closing of such stores, and further regardless of any obligations or rights based on the sales generated Havelock, (Ste-e at the Premises expressly set forth in this Lease. Without limiting the generality of the foregoing, the parties confirm that neither Tenant nor its affiliates are subject to a so-called "opening covenant', "continuous operation clause". -operating covenant', -radius restriction" or similar limitation in favor of Landlord or its affiliates or other tenants on the Property. 23.23ELECTRONIC SIGNATURES. The parties agree that its authorized signatories may receive and revie•w this Lease via electronic record and may sign this Lease via electronic signature (as defined by federal statute 15 U.S.C. 57001. et seq.). The parties may rely on such electronic signatures as if they are original signatures by each party or duly authorized representatives ot each party; provided, however, in no such event shall this provision be construed to supercede any requirement for notarization of this Lease under state law. 24.QUIET ENJOYMENT. Without limiting any rights Tenant may have by statute or common law, Landlord covenants and agrees that, so long as this Lease is in full force and effect, Tenant shall lawfully and quietly hold, occupy, and enjoy the premises during the Term of this Lease without disturbance by Landlord or by any person having title paramount to Landlord's title or by any person claiming through or under Landlord. To Landlord at:MOC Acquisitions, LLC Attn: Curtis Little 500 Street san Antonio, TX 78216 Phone: (843) 906-0882 To Tenant atStarbucks Corporation Attn: Financial Lease Admin, RE-3 RE: Starbucks Coffee company store #68468 by mail at:P.O. Box 35126 Seattle, WA 98124-5126 or by overnight delivery to:2401 Utah Avenue South. Suite 800 Seattle, WA 98134 Email: FinancialLeaseAdmi@Starbucks.com 25.NOTICES. Whenever a provision is made underthis Lease for any demand, notice, or declaration of any kind (even if the provision does not expressly require notice in writing), or where it is deemed desirable or necessary by either par,' to give or serve any such notice, demand or declaration to the othar party, it shall be in writing and served either personally or sent by United States mail, certified, postage prepaid. or by pre-paid nationally recognized overnight courier service, addressed at the addresses set forth below orat such address as either party may advise the other from time to time. In the event a party refuses to accept delivery of a properly issued notice. the date of rejection shall be deemed the date notice has been received. Any such notice, demand, or declaration which does not comply with the foregoing requirements above shall be ineffective for purposes of this Lease. Notices, demands, or declarations given under this Lease will be deemed to have been given when received or when receipt is refused. Landlord shall send a duplicate copy of any notice given under Article 14 to the attention of the Law and Corporate Affairs Department at the same address, Mailstop S-LAI. 26.EXHIBITS. The exhibitsareattached to this Lease and by this reference are incorporated herein: Exhibit A — Legal Description of Property US Catawba. Exhibit B — Property Site Plan Identifying Tenant parcel, Adjacent Parcel. Premises and Building Exhibit B-l — Diagram of Premises. Drive-Through Facility, parking and Access, Trash and Recycling, and Outdoor Seating Area Exhibit B-2 — Signage Exhibit C — Construction Requirements Exhibit D — Delivery of Possession Letter Exhibit E — Landlord Work Modification Letter Exhibit F— Date Certificate Exhibit G— New Plat Exhibit H — Exclusions to Tenants Exclusive Exhibit I — Reserved Exhibit J — None Exhibit K — None Exhibit L— Memorandum of Lease Exhibit M- SNDA [Signatures on following pages.) us IN WITNESS WHEREOF. the parties have executed this Lease as or the Effective Date. LANDLORD. MOC ACQUISITIONS, LLC Landlord's Federal Tax Identification Number: 84-3310349 us 70 A Catawba #68468) TENANT: ay llv rstein ice president STARBUCKS CORPO a W hin on co 72019 Rcvi%d ACKNOWLEDGEMENT OF LANDLORD STATE OF COUNTY On this for the the on oath stated that he/she is authorized to execu& said instrument. Haveock. *8468)2019 starbuSTßiRBb16KS December 20 t 9 ACKNOWLEDGEMENT OF STARBUCKS CORPORATION STATE OF WASHINGTON COUNTY OF This record was acknowledged before me on president of STARBUCKS CORPORATION, a W Notary PuO'iC State of Washington # 162 My cakm. Aug 27, Ha.•eo« A LEGAL DESCRIPTION OF PROPERTY Tax Parcel Number: 6-216-007 ALL that bt of Änd situate. lying, in Craven County. North Carolina. and particularly as follows: BERG of Tract 2 Shown on mat cgtan Zltiti*l •plan Of Extensitn of Westbrooke Shopping CRIter" , recorded in F. at Page 112B in Ofce of he Register Of Deeds for Craven County, North Carolina. Havelock. *68468) B PROPERTY SITE PLAN IDENTIFYING. TENANT PARCEL. ADJACENT PARCEL PREMISES AND BUILDING B-l DIAGRAM OF PREMISES. DRIVE-THROUGH FACILITY. PARKING AND TRASH RECYCLING. AND OUTDOOR SEATING AREA 70 (St.-e B-2 #68468)3-2-1@ 2019 Starb RÄ'iscd C CONSTRUCTION LANDLORD WORKLETTER EXHIBIT C-1 CONSTRUCTION REQUIREMENTS AND STANDARDS GREY SHELL ONLY 0-.6.16.17) to Oftbe premises in .pplicable codes. Laxtl«d ptovide Tent a copy of Lxxnotd•s cousauc:tiou schedule. Exluding the name. phone uamber and project be the at (90) 'o S&dtded Date. The key of installation of Of aud date s Work AS digital or as designed :ewesewarive. uy rhe Pie-thises 'unug cousuu:riou of Landlord •s Work to and if being completed in s Of s inspect to Lease 2. or Wm•E in With Luge Tenant shall TO Latdh%d's Work at Landlord's sol* expense in me even.' The Landlord •S Work is not cc—deed in Lease Landlord's construction schedule. of pos-sessiou of Premises a' Teaaut shall inspect Ibe Premises 10 determine s Wctk been Ar this Landlord aud Tenanr shall [he del:very of possession A' Of Work all I to list of all items of construction O: finish to the int O required by of Landlord's Work the Lease. Leidlord shall repair all punch list irems %ior to ofihe Premises. chooses TO accept delivery ofrbe Premises ptior 10 (30) oftbe accepts die Premises. If i" condition by Of LnndlOYd Work Lease described if Lease is 'o in to defined its of Bttiådiug:Slwvping C the its in the Lease to (b) of to the to perfocu_aing ' Lease Of If proceed Laudl«d fot the xrual cost ot such plus au adtui%isuztiqe s,tzchnrge of hfieeu percen' to Team: fix its time. wilhin of of an iuvoxe tot such sums. of cost of such work shall be final and biudmg on Landlord aud L.a%diotd by in a dees as by SetlOtL T u_ny any such Re-Il and o due elects to the foregoing sub secnOD (c) s days of T then tbe to AS Page cf 16 Catawba. NC *8458)e 2019 C CONSTRVGT!ON EXHIBIT C-2 Page 10 or 16 C Havelock NC C Havelock. C page 13 *468) CONSTRUCTION DRIVE THRU Dr - DT - -sue page 14 Catxwoa. OF POSSESSION Project Name:Store #: Landlord: Premises Address: Without limiting any of Tenants rights and remedies expressly set forth in the Lease, and without limiting Landlord's obligations thereunder ineuding, without limitation, requirements for the condition of the Premises. the completion of Landlord's Work, and the deadlines for completion Of Landlord's Work and Other items, Landlord and Tenant acknowledge and agree that: Status of Letter of CreditYesNO Is Letter of Credit uired? If uired. has executed Letter of Credit been delivered to Tenant? PossessionStatus of Landlord's Work: Landlord's Work is COMPLETE subject to minor punch list items (e.g. cosmetic in nature that can be completed within 14 days and which will not interfere with delivery, fixturization, or tenant im nts listed below. Landlord's Work is NOT COMPLETE. Tenant elects to complete the unfinished items of Landlord's Work at Landlord's expense subject to the terms and conditions of the Lease and an executed Landlord Work Modification Letter. Incomplete Items of Landlord's Work: (Attach additional pages if necessary)Landlord's Target Completion Date: If Landlord's Work is NOT COMPLETE and Tenant REJECTS Landlord's delivery of possession, Landlord and Tenantmustre-execute this Delivery of Possession once Landlord's Work is complete in accordance with the Lease requirements and in conjunction with Tenant's acceptance of possession of the Premises. Tenant REJECTS possession of the Premises: Landlord's work at Landlord's ex ense : Status of Landlord's Work: Landlord's Work is NOT COMPLETE. Tenant may enter the Premises to begin performing Tenant's improvements. Landlord agrees Tenanes entry onto the Property is permitted and such en does not ion Tenant. Landlord's Work is NOT COMPLETE. Landlord: US 70 & Catawba, NC (Store Tenant: Title: Starbucks project Manager (Manager or above) 0 2019 LANDLORD WORK MODIFICATION project Name:Store # The scope ofwork outlined below will constitute an agreement between Landlord and Tenant. This agreement allows Tenant to complete the following scope of work for Landlord with the understanding ard agreement that Landlord will be responsible to reimburse Tenant for the Scope of work to be completed by Starbucks: (Description) — (item cost) (Description) — (item cost) (Description) — (item cost) Subtotal: This letter serves as an agreement between Landlord and Tenant. Landlord agrees to pay Tenant the full cost of all Landlord Work items completed by Tenant ("Subtotal") plus an administrative surcharge of fifteen percent (15%) for a total ofDollars ($ ) within thirty (30) days of receipt of invoice, for the completion of Landlord Work as noted above. Landlord does not reimburse Tenant as required by this Landlord Work Modification Letter, then Tenant may offset such sum against Base Rent and all other charges payable by Tenant under this Lease until such sum has been fully recouped. upon completion of the work described herein. Landlord shall accept such work in its "as•is" condition. NI items of Landlord Work completed by Tenant shall be deemed Landlord's property. and Landlord shall retain all obligations regarding such property. including, but not limited to. maintenance, repair. replacement. insurance, and indemnification Of Tenant. From and after the date hereof. all notices shall be given to Tenant as required by this Lease. LANDLORD:TENANT: print Name:Print Name: Cate.•ba. DATE CERTIFICATE Attn: Name Company Name Address Cdy, State, Zip Re: Starbucks at City, State Starbucks Store # Dear Name: Please confirm the following list of dates pursuant to the Lease by and between and Starbucks Corporation [or Starbucks Coffee Canada, Inc.] for the above referenced location: Possession Date: Permit Date: Commencement Date: Starbucks Store Opening Date: Rent Commencement Date: Expiration Date: pursuant to Sectionof the Lease, the Base Rent schedule shall be as set forth below: Pro-rated: $ days x _ day(s) Per month month per month Per month Per month montn Please have both copies of this letter signed and dated by Landlord and return one (1) of the originals in the envelope provided. If you have any questions reqardinq the above information please contact Name at@hope ngmben. Agreed to thisday of20_, by and between: Landlord:Starbucks Corporation: Catawba, Haveiock. (Store a Catawba (Store ЕХНIВIТ Н EXCLUSIONS TQ T#NANT'S EXCLUSlVE cz:zwba. мс EXHIBIT | S NC (90”″68)㉢ Deccmbcc us J-132019 ΕΧΗΙΒΙΤ WHEN RECORDED RETURN BY MAIL TOA. First American Title Company National Commercial Services 1790 Hughes Landing Blvd., Suite 110 The Woodlands. Texas 77380 ATTN: Sharon P. Mork Vice President-Manager Sr. Commercial Escrow Oficer THIS DOCUMENT PREPARED Margy D. Wilson Snell & Wilmer LLP 1200 Seventeenth Street, Suite 1900 Denver, CO 80202 On Behalf of: Starbucks Coffee Company 2401 Utah Avenue South, suite 800 Mailstop: S-LA3 Seattle. Washington 98134 Store: US 70 & catawba Havelock, NC MEMORANDUM QF LEASE This Memorandum of Lease ("Memorandum") is entered into by and between MOC Acquisitions, LLC. a Texas limited liability company ("Landlord") having its principal place of business at 500 6th Street, San Antonio. TX 78216, and Starbucks Corporation, a Washington corporation having an office at 2401 Utah Avenue South, Seattle, Washington 98134 ("Tenant"), Landlord and Tenant having entered into a commercial lease having an effective date of 2022 ("Lease" The Lease covers certain commercial property located at 426 u.s. Hwy 70, Havelock, North Carolina. on an outparcel of the shopping center commonly known as Westbrook Shopping Center ("Shopping Center'), consisting of approximately 2,500 square feet of Gross Leasable Area ("Premises") all as more particularly described in the Lease. The legal description of the property on which the Premises are 'Eated (•property•) is attached hereto and incorporated herein by this reference. 2.The Lease provides for the rental of the Premises by Tenant for a term of ten (10) years ("Initial Term"). 3.The Lease grants to Tenant the right to renew the Initial Term for up to six (6) consecutive five (5) year period(s) ('Extension Term(s)') under the same terms and conditions contained in tha Lease, provided Tenant exercises the applicable Extension Term in accordance with the applicable terms of the Lease. Base Rent during any Extension Term(s) shall be as specified in the Lease. 4.Landlord is to pay Tenant an improvement allowance in amount specified in Section 4.4 of the Lease 5.Tenant may use and occupy the premises for any lawful use. including, without limitation. the sale of beer and wine. US L 6.This Memorandum shall not, under any circumstances, be deemed to modify or change any provisions of the Lease, the provisions of which shall in all instances prevail. The Lease grants to Tenant the exclusive right to sell on the property (a) whole or ground coffee beans, (b) espresso. espresso-based drinks or coffee-based dnnks, (c) tea or tea-based drinks, (d) brewed coffee, and/or (e) blended beverages Notwithstanding the foregoing: (i)Other tenants may sell brewed coffee or brewed tea which is neither (i) gourmet, nor (ii) brand identified. For purposes of this Lease. -gourmet" shall be defined as: (a) beverages made using Arabica beans or (b) sourced from a gourmet coffee or tea brand such as Coffee Bean & Tea Leaf, Intelligentsia. Peets, Caribou or similarbranding. For purposes ofthis Lease, •brand identified" shall mean beverages advertised or marketed within the applicable retail space using a brand name or served in a brand-identified cup. (ii)Other tenants may sell pre-bottled tea or pre-bottled tea-based beverages. (in) Any existing tenant on the Property with a lease which predates August 1 9, 2021 (which existing tenants. with a statement of their permitted use clause(s), if any, are set forth on Exhibit H attached to the Lease and by this reference incorporated herein) whose lease allows to sell any of the foregoing products, shall not be subject to Tenant's exclusive use restriction set forth herein, and to the extent that any such existing tenant is permitted by its lease to sell any of Tenant's exclusive use items; provided. however. that with respect to the tenants set forth on Exhibit H attached to the Lease, Landlord agrees that to the extent Landlord has reasonable control over any such tenant's use and changes in use, Landlord shall exercise such control to enforce and protect Tenant's exclusive use rights described herein. (tv) Anchor tenants occ143Ying at least Faenty thousand (20,000) contiguous square feet of interior space operating under a single trade name and full-line grocery store tenants occupying at least ten thousand (10.000) contiguous square feet of interior space operating under a single trade name shall not be subject to Tenants exclusive so long as any such anchor or grocery store tenant at all times occupies and operates out of the foregoing minimum contiguous square footage, does not have a separate entrance or exterior signage for the sale of Tenant's exclusive items, and does not othenvise advertise, in a manner visible from the exterior of such tenant's space, the sale of Tenant's exclusive items. (v) Full service. sit-down restaurants with a wait staff and table service serving a complete dinner menu may sell, in conjunction with a sale of a meal, brewed coffee, tea, and hot espresso drinks for on-premises consumption only. 8. This Memorandum may be signed in two (2) or more counterpart copies With the same effect as if the signature to each counterpart copy were on a sing'e instrument. Each counterpart shall be deemed an original as to any party whose signature it bears and all such counterparts shall constitute one document. Facsimile or electronically scanned copies shall be deemed originals. [SIGNATURES ON FOLLOWING PAGE(S)] catmba. NC (Store L IN WITNESS WHEREOF, parties have executed this Memorandum of Lease thisday of LANDLORD. MOC Acquisitions, LLC, a Texas limited liability company LANDLORD ACKNOWLEDGEMENT COUNTY OF On thisday of20 before me, the undersigned. a Notary Public in and tor theofduly commissioned and sworn, personally appeared to me known as, or providing satisfactory evidence that he/she is the of MOC Acquisitions. LLC, a Texas limited liability company, the that executed the foregoing instrument and acknowledged the said instrument to be the free and voluntary act and deed of saidfor the uses and purposes therein mentioned and on oath stated that he/she is authorized to execute said instrument. WITNESS my hand and official seal hereto affixed the day and year in this certificate above us Havebc*. a starbu9TåfRBU6KS L STARBUCKS CORPORATION. a Washington corporation TENANT ACKNOWLEPGEMENT STATE OF WASHINGTON COUNTY OF This record was acknowledged before me onby Name: NOTARY PUBLIC, State of Washington My appointment expires Notarial Stamp/Seal Haveock. NC e starsSTARBUCKS December L EXHIBIT A TO MEMORANDUM OF LEASE LEGAL DESCRIPTION ALL t?zt certain lot or parcel Craven County. North Carolina , and more particular* descrt•ed as BEING Of 2 Shawn on that cert*n Extension of Westbrooke Shopping Center" , recorded in Plat F. at 112B in he Cf%ce ot the Register Of Deeds Craven County. North Carolina. us Have* #684") SUBORDINATION. NON-DISTURBANCE. AND ATTORNMENT RECORDING REQUESTED BY AND WHEN RECORDED, MAIL TO: SUBORDINATION NON-DISTURBANCE. AND ATTORNMENT AGREEMENT This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ('Agreement") is made and entered into as ofthis day of 20_ by and among ("Mortgagee), Starbucks Corporation, a Washington corporation CTenant'). and a(n) s (landlord"), RECITALS A A.Mortgagee is the holder of a certain note ("Note") and mortgagee under a mortgage dated ('Mortgage'), in which Landlord is named as the mortgagor, which Mortgage was recorded on in the Official Records ofCounty, State of as Document No. Tha Mortgage covers a leasehold interest in certain real property together with all appurtenances thereto and improvements thereon ("Property") all as more particulariy described in attached hereto and made a part hereof and which property is commonly known asin the City ofCounty ofState of B.Landlord is the owner in fee simple of the Property and is the current obligor under the C.By Lease dated [CLeaseT), Landlord leased to Tenant those certain premises CPremises-) which constitutes or forms a portion of the property covered by the Mortgage and commonly known as all as more particularly described in said lease. Other documents affecting or amending the lease include the following: [List all documents with date references: any type of legal document that would modify or exercise rights in the Lease (i.e. amendments, letter agreements, square footage certificates, rentiterm commencement agreements), assignments, subleases, letters regarding change in landlord, letters regarding change in landlord notice address and fully executed SNDAs]. The lease, as amended by the foregoing documents, shall be referred to herein as the 'Lease" D.The Lease is or may become (subject to this Agreement) subordinate in priority to the lien of the Mortgage. E.Tenant wishes to obtain from Mortgagee certain assurances that Tenant's possession of the Premises will rot (subject to this Agreement) be disturbed by reason of the enforcement of the Mortgage covering the Premises or a foreclosure of the lien thereunder, Mortgagee is willing to provide such assurances to Tenant upon and subject to the terms and conditions of this Agreement. (Store WI NON-DISTUR3ANCE. AGREEM

Starbucks NOBLESVILLE, INDIANA