Exhibit 10.2

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made as of April 17, 2013 (the “Effective
Date”), by and between STORE MASTER FUNDING III, LLC, a Delaware limited
liability company (“Lessor”), whose address is 8501 E. Princess Drive, Suite
190, Scottsdale, Arizona 85255, and U.S. AUTO PARTS NETWORK, INC., a Delaware
corporation (“Lessee”), whose address is 16941 Keegan Avenue, Carson, California
90746. Capitalized terms not defined herein shall have the meanings set forth in
Exhibit A hereto.

In consideration of the mutual covenants and agreements herein contained, Lessor
and Lessee hereby covenant and agree as follows:

ARTICLE I

BASIC LEASE TERMS

Section 1.01. Property. The street address of the Property is set forth on
Exhibit B attached hereto.

Section 1.02. Initial Term Expiration Date. April 30, 2033.

Section 1.03. Extension Options. None.

Section 1.04. Term Expiration Date (if fully extended). April 30, 2033.

Section 1.05. Initial Base Annual Rental. $853,125, as described in Article IV.

Section 1.06. Rental Adjustment. The lesser of (i) 1.5%, or (ii) 1.25 times the
change in the Price Index, as described in Section 4.02.

Section 1.07. Adjustment Date. May 1, 2014 and every year thereafter during the
Lease Term.

Section 1.08. Security Deposit. None.

Section 1.09. Guarantor(s). None.

Section 1.10. Lessee Tax Identification No. 68-0623433.

Section 1.11. Lessor Tax Identification No. 46-1045910.

ARTICLE II

LEASE OF PROPERTY

Section 2.01. Lease. In consideration of Lessee’s payment of the Rental and
other Monetary Obligations and Lessee’s performance of all other obligations
hereunder, and except as expressly set forth elsewhere in this Lease, Lessor
hereby leases to Lessee, and Lessee hereby takes and hires, the Property, “AS
IS” and “WHERE IS” without representation or

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warranty by Lessor, and subject to the existing state of title, the parties in
possession, any statement of facts which an accurate survey or physical
inspection might reveal, and all Legal Requirements now or hereafter in effect.

Section 2.02. Quiet Enjoyment. So long as Lessee shall pay the Rental and other
Monetary Obligations provided in this Lease, and shall keep and perform all of
the terms, covenants and conditions on its part contained herein, Lessee shall
have, subject to the terms and conditions set forth herein, the right to the
peaceful and quiet enjoyment and occupancy of the Property.

ARTICLE III

LEASE TERM

Section 3.01. Initial Term. The initial term of this Lease (“Initial Term”)
shall commence as of the Effective Date and shall expire at midnight on
April 30, 2033 (“Expiration Date”), unless terminated sooner as provided in this
Lease and as may be extended as provided herein. The time period during which
this Lease shall actually be in effect is referred to as the “Lease Term.”

Section 3.02. Extensions. Intentionally deleted.

Section 3.03. Notice of Exercise. Intentionally deleted.

Section 3.04. Removal of Personalty. Upon the expiration of the Lease Term, and
if Lessee is not then in breach hereof, Lessee may remove from the Property all
personal property belonging to Lessee. Lessee shall repair any damage caused by
such removal. Subject to the provisions of Section 7.01, Lessee shall leave the
Property clean and in good and working condition and repair inside and out,
subject to normal wear and tear, casualty and condemnation. Any property of
Lessee left on the Property on the tenth day following the expiration of the
Lease Term shall, at Lessor’s option, automatically and immediately become the
property of Lessor.

ARTICLE IV

RENTAL AND OTHER MONETARY OBLIGATIONS

Section 4.01. Base Monthly Rental. During the Lease Term, on or before the first
day of each calendar month, Lessee shall pay in advance the Base Monthly Rental
then in effect. If the Effective Date is a date other than the first day of the
month, Lessee shall pay to Lessor on the Effective Date the Base Monthly Rental
prorated by multiplying the Base Monthly Rental by a fraction, the numerator of
which is the number of days remaining in the month (including the Effective
Date) for which Rental is being paid, and the denominator of which is the total
number of days in such month.

Section 4.02. Adjustments. During the Lease Term, on the first Adjustment Date
and on each Adjustment Date thereafter, the Base Annual Rental shall increase by
an amount equal to the Rental Adjustment; provided, however, that in no event
shall Base Annual Rental be reduced as a result of the application of the Rental
Adjustment.

 

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Section 4.03. Additional Rental. Lessee shall pay and discharge, as additional
rental (“Additional Rental”), all sums of money required to be paid by Lessee
under this Lease which are not specifically referred to as Base Annual Rental.
Lessee shall pay and discharge any Additional Rental when the same shall become
due, provided that amounts which are billed to Lessor or any third party, but
not to Lessee, shall be paid within thirty (30) days after Lessor’s demand for
payment thereof. In no event shall Lessee be required to pay to Lessor any item
of Additional Rental that Lessee is obligated to pay and has paid to any third
party pursuant to any provision of this Lease.

Section 4.04. Rentals To Be Net to Lessor. The Base Annual Rental payable
hereunder shall be net to Lessor, so that this Lease shall yield to Lessor the
Rentals specified during the Lease Term. Lessee shall perform all of its
obligations under this Lease at its sole cost and expense. All Rental and other
Monetary Obligations which Lessee is required to pay hereunder shall be the
unconditional obligation of Lessee and shall be payable in full when due and
payable without any setoff, abatement, deferment, deduction or counterclaim
whatsoever.

Section 4.05. ACH Authorization. Upon execution of this Lease, Lessee shall
deliver to Lessor a complete Authorization Agreement – Pre-Arranged Payments in
the form of Exhibit C attached hereto and incorporated herein by this reference,
together with a voided check for account verification, establishing arrangements
whereby payments of the Base Monthly Rental, any Additional Rental, impound
payments (if any), sales tax or real property tax (if any), and any other
Monetary Obligations are transferred by Automated Clearing House Debit initiated
by Lessor from an account established by Lessee at a United States bank or other
financial institution to such account as Lessor may designate. Lessee shall
continue to pay all Rental and other Monetary Obligations by Automated Clearing
House Debit unless otherwise directed by Lessor.

Section 4.06. Late Charges; Default Interest. Any delinquent payment shall, in
addition to any other remedy of Lessor, incur a late charge of five percent
(5%) (which late charge is intended to compensate Lessor for the cost of
handling and processing such delinquent payment and should not be considered
interest) and bear interest at the Default Rate, such interest to be computed
from and including the date such payment was due through and including the date
of the payment; provided, however, in no event shall Lessee be obligated to pay
a sum of late charge and interest higher than the maximum legal rate then in
effect.

Section 4.07. Holdover. If Lessee remains in possession of the Property after
the expiration of the term hereof, Lessee shall be deemed a tenant on a
month-to-month basis and shall continue to pay Rentals and other Monetary
Obligations in the amounts herein provided, except that the Base Monthly Rental
shall be automatically increased to one hundred fifteen percent (115%) of the
last Base Monthly Rental payable under this Lease, and Lessee shall comply with
all the terms of this Lease; provided that nothing herein nor the acceptance of
Rental by Lessor shall be deemed a consent to such holding over.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF LESSEE

The representations and warranties of Lessee contained in this Article V are
being made to induce Lessor to enter into this Lease, and Lessor has relied, and
will continue to rely, upon such representations and warranties. Lessee
represents and warrants to Lessor as of the Effective Date as follows:

Section 5.01. Organization, Authority and Status of Lessee. Lessee has been duly
organized or formed, is validly existing and in good standing under the laws of
its state of formation and is qualified as a foreign corporation to do business
in the State of Illinois. All necessary corporate action has been taken to
authorize the execution, delivery and performance by Lessee of this Lease.
Lessee is not, and if Lessee is a “disregarded entity,” the owner of such
disregarded entity is not, a “nonresident alien,” “foreign corporation,”
“foreign partnership,” “foreign trust,” “foreign estate,” or any other “person”
that is not a “United States Person” as those terms are defined in the Code and
the regulations promulgated thereunder. The Person who has executed this Lease
on behalf of Lessee is duly authorized to do so.

Section 5.02. Enforceability. This Lease constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance with its
terms.

Section 5.03. Property Condition. Lessee has physically inspected the Property
and has examined title to the Property, and has found all of the same
satisfactory in all respects for all of Lessee’s purposes.

Section 5.04. Litigation. To the best of the actual current knowledge of Lessee,
with a reasonable duty of inquiry, and except as otherwise disclosed in Lessee’s
most recent filing with the Securities and Exchange Commission, there are no
suits, actions, proceedings or investigations pending, or to the best of its
knowledge, threatened against or involving Lessee or the Property before any
arbitrator or Governmental Authority which might reasonably result in any
Material Adverse Effect.

Section 5.05. Absence of Breaches or Defaults. Lessee is not in default under
any document, instrument or agreement to which Lessee is a party or by which
Lessee, the Property or any of Lessee’s property is subject or bound, which has
had, or could reasonably be expected to result in, a Material Adverse Effect.
The authorization, execution, delivery and performance of this Lease and the
documents, instruments and agreements provided for herein will not result in any
breach of or default under any document, instrument or agreement to which Lessee
is a party or by which Lessee, the Property or any of Lessee’s property is
subject or bound.

Section 5.06. Licenses and Permits. Lessee has obtained all required licenses
and permits, both governmental and private, to use and operate the Property as a
Permitted Facility.

Section 5.07. Financial Condition; Information Provided to Lessor. Except as
otherwise disclosed in Lessee’s most recent filing with the Securities and
Exchange Commission, the financial statements, all financial data and all other
documents and information heretofore delivered to Lessor by or with respect to
Lessee and the Property in connection with this Lease or relating to Lessee or
the Property are true, correct and complete in all material respects; there have
been no amendments thereto since the date such items were prepared or delivered
to Lessor; all financial statements provided through December 29, 2012 were
prepared in accordance with GAAP, and fairly present as of the date thereof the
financial condition of each individual or entity to which they pertain; and no
change has occurred to any such financial statements, financial data, documents
and other information not disclosed in writing to Lessor, which has had, or
could reasonably be expected to result in, a Material Adverse Effect.

 

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Section 5.08. Compliance With OFAC Laws. Neither Lessee nor any individual or
entity owning directly or indirectly any interest in Lessee, is an individual or
entity whose property or interests are subject to being blocked under any of the
OFAC Laws or is otherwise in violation of any of the OFAC Laws; provided,
however, that the representation contained in this sentence shall not apply to
any Person to the extent such Person’s interest is in or through a U.S. Publicly
Traded Entity.

Section 5.09. Solvency. There is no contemplated, pending or threatened
Insolvency Event or similar proceedings, whether voluntary or involuntary,
affecting Lessee, or to the best of Lessee’s knowledge, its shareholders or its
Affiliates. Lessee does not have unreasonably small capital to conduct its
business.

Section 5.10. Ownership. To the best of Lessee’s actual current knowledge, no
Person that actually or constructively owns ten percent (10%) or more of the
outstanding capital stock of Lessor owns, directly or indirectly, (a) ten
percent (10%) or more of the total combined voting power of all classes of
voting capital stock of Lessee, or (b) ten percent (10%) or more of the total
value of all classes of capital stock of Lessee.

ARTICLE VI

TAXES AND ASSESSMENTS; UTILITIES; INSURANCE

Section 6.01. Taxes.

(a) Payment. Subject to the provisions of Section 6.01(b) below, Lessee shall
pay, prior to the earlier of delinquency or the accrual of interest on the
unpaid balance (provided Lessee has received from Lessor notice thereof pursuant
to Section 6.01(b) in the event such tax notices are delivered to Lessor), all
taxes and assessments of every type or nature assessed against or imposed upon
the Property, Lessee or Lessor an allocable to the Lease Term (Lessor shall be
responsible for any such taxes and assessments allocable to any period after the
Lease Term) related to or arising out of this Lease and the activities of the
parties hereunder, including without limitation, (i) all taxes or assessments
upon the Property or any part thereof and upon any personal property, trade
fixtures and improvements located on the Property, whether belonging to Lessor
or Lessee, or any tax or charge levied in lieu of such taxes and assessments;
(ii) all taxes, charges, license fees and or similar fees imposed by reason of
the use of the Property by Lessee; (iii) all excise, franchise, transaction,
privilege, license, sales, use and other taxes upon the Rental or other Monetary
Obligations hereunder, the leasehold estate of either party or the activities of
either party pursuant to this Lease; and (iv) all franchise, privilege or
similar taxes of Lessor calculated on the value of the Property or on the amount
of capital apportioned to the Property. Notwithstanding anything in clauses (i)
through (iv) to the contrary, Lessee shall not be obligated to pay or reimburse
Lessor for any taxes based on the net income of Lessor.

(b) Right to Contest. Within thirty (30) days after each tax and assessment
payment is required by this Section 6.01 to be paid, Lessee shall provide Lessor
with

 

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evidence reasonably satisfactory to Lessor that taxes and assessments have been
timely paid by Lessee. In the event Lessor receives a tax bill, Lessor shall use
commercially reasonable efforts to forward (in accordance with Section 15.10)
said bill to Lessee within fifteen (15) days of Lessor’s receipt thereof. Lessee
may, at its own expense, contest or cause to be contested (in the case of any
item involving more than $10,000, after prior written notice to Lessor), by
appropriate legal proceedings conducted in good faith and with due diligence,
any above-described item or lien with respect thereto, including, without
limitation, the amount or validity or application, in whole or in part, of any
such item, provided that (i) neither the Property nor any interest therein would
be in any danger of being sold, forfeited or lost by reason of such proceedings;
(ii) if and to the extent required by the applicable taxing authority and/or
Lessor, Lessee posts a bond or takes other steps acceptable to such taxing
authority and/or Lessor that removes such lien or stays enforcement thereof;
(iii) Lessee shall promptly provide Lessor with copies of all notices received
or delivered by Lessee and filings made by Lessee in connection with such
proceeding; and (iv) upon termination of such proceedings, it shall be the
obligation of Lessee to pay the amount of any such tax and assessment or part
thereof as finally determined in such proceedings, the payment of which may have
been deferred during the prosecution of such proceedings, together with any
costs, fees (including attorneys’ fees and disbursements), interest, penalties
or other liabilities in connection therewith. Lessor shall at the request of
Lessee, execute or join in the execution of any instruments or documents
necessary in connection with such contest or proceedings, but Lessor shall incur
no cost or obligation thereby.

Section 6.02. Utilities. Lessee shall contract, in its own name, for and pay
when due all charges for the connection and use of any water, gas, electricity,
telephone, garbage collection, sewer use and other utility services supplied to
the Property during the Lease Term. Under no circumstances shall Lessor be
responsible for any interruption of any utility service.

Section 6.03. Insurance.

(a) Coverage. Throughout the Lease Term, Lessee shall maintain, with respect to
the Property, at its sole expense, the following types and amounts of insurance,
in addition to such other insurance as Lessor may reasonably require from time
to time:

(i) Insurance against loss or damage to real property and personal property
under an “all risk” or “special form” insurance policy, which shall include
coverage against all risks of direct physical loss, including but not limited to
loss by fire, lightning, wind, terrorism, and other risks normally included in
the standard ISO special form (and shall also include National Flood and Excess
Flood insurance if the Property is located within a 100-year floodplain (FEMA
Zones A and V) and earthquake insurance if the Property is located within a
moderate to high earthquake hazard zone as determined by an approved insurance
company set forth in Section 6.03(b)(x) below). Such policy shall also include
soft costs, a joint loss agreement, coverage for ordinance or law covering the
loss of value of the undamaged portion of the Property, costs to demolish and
the increased costs of construction if any of the improvements located on, or
the use of, the Property shall at any time constitute legal non-conforming
structures or uses. Ordinance or law limits shall be in an amount equal to the
full

 

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replacement cost for the loss of value of the undamaged portion of the Property
and no less than 25% of the replacement cost for costs to demolish and the
increased cost of construction, or in an amount otherwise specified by Lessor.
Such insurance shall be in amounts not less than 100% of the full insurable
replacement cost values (without deduction for depreciation), with an agreed
amount endorsement or without any coinsurance provision, and with sublimits
satisfactory to Lessor, as determined from time to time at Lessor’s request but
not more frequently than once in any 12-month period.

(ii) Commercial general liability insurance, including products and completed
operation liability, covering Lessor and Lessee against bodily injury liability,
property damage liability and personal and advertising injury including without
limitation any liability arising out of the ownership, maintenance, repair,
condition or operation of the Property or adjoining ways, streets, parking lots
or sidewalks. Such insurance policy or policies shall contain a broad form
contractual liability endorsement under which the insurer agrees to insure
Lessee’s obligations under Article X hereof to the extent insurable, and a
“severability of interest” clause or endorsement which precludes the insurer
from denying the claim of Lessee or Lessor because of the negligence or other
acts of the other, shall be in amounts of not less than $5,000,000 per
occurrence for bodily injury and property damage, and $5,000,000 general
aggregate per location, or such higher limits as Lessor may reasonably require
from time to time, and shall be of form and substance satisfactory to Lessor.
Such limits of insurance can be acquired through Commercial General liability
and Umbrella liability policies.

(iii) Workers’ compensation and Employers Liability insurance with statutorily
mandated limits covering all persons employed by Lessee on the Property in
connection with any work done on or about the Property for which claims for
death or bodily injury could be asserted against Lessor, Lessee or the Property.

(iv) Rental value insurance, equal to 100% of the Base Annual Rental (as may
adjusted hereunder) for a period of not less than twelve (12) months, which
insurance shall be carved out of Lessee’s business interruption coverage for a
separate rental value insurance payable to Lessor, or if rental value insurance
is included in Lessee’s business interruption coverage, the insurer shall
provide priority payment to any rent obligations, and such obligations shall be
paid directly to Lessor. Such insurance is to follow form of the real property
“all risk” or “special form” coverage and is not to contain a co-insurance
clause. Such insurance is to have no time limitation with respect to any period
of indemnity and a minimum of twelve (12) months of extended period of
indemnity.

(v) Automobile liability insurance, including owned, non-owned and hired car
liability insurance for combined limits of liability of $5,000,000.00 per
occurrence. The limits of liability can be provided in a combination of an
automobile liability policy and an umbrella liability policy.

 

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(vi) Equipment Breakdown Insurance against loss or damage from explosion of any
steam or pressure boilers or similar apparatus, if any, located in or about the
Property and in an amount equal to the lesser of 25% of the 100% replacement
cost of the Property or $5,000,000.00.

(vii) Such additional and/or other insurance and in such amounts as at the time
is customarily carried by prudent owners or tenants with respect to improvements
and personal property similar in character, location and use and occupancy to
the Property.

(b) Insurance Provisions. All insurance policies shall:

(i) provide (A) for a waiver of subrogation by the insurer as to claims against
Lessor, its employees and agents; (B) that the insurer shall not deny a claim
and that such insurance cannot be unreasonably cancelled, invalidated or
suspended on account of the conduct of Lessee, its officers, directors,
employees or agents, or anyone acting for Lessee or any subtenant or other
occupant of the Property; and (C) that any losses otherwise payable thereunder
shall be payable notwithstanding any act or omission of Lessor or Lessee which
might, absent such provision, result in a forfeiture of all or a part of such
insurance payment;

(ii) be primary and provide that any “other insurance” clause in the insurance
policy shall exclude any policies of insurance maintained by Lessor and the
insurance policy shall not be brought into contribution with insurance
maintained by Lessor;

(iii) contain deductibles not to exceed $50,000 (and increases with the
reasonable consent of Lessor);

(iv) contain a standard non-contributory mortgagee clause or endorsement in
favor of any Lender designated by Lessor;

(v) provide that the policy of insurance shall not be terminated, cancelled or
amended without at least thirty (30) days’ prior written notice to Lessor and to
any Lender covered by any standard mortgagee clause or endorsement;

(vi) provide that the insurer shall not have the option to restore the Property
if Lessor elects to terminate this Lease in accordance with the terms hereof;

(vii) be in amounts sufficient at all times to satisfy any coinsurance
requirements thereof;

(viii) except for workers’ compensation insurance referred to in
Section 6.03(a)(iii) above, name Lessor and any Lessor Affiliate or Lender, if
applicable, requested by Lessor, as an “additional insured” with respect to
general liability insurance and real property, and as a “loss payee” with
respect to all real property and rental value insurance, as appropriate and as
their interests may appear;

 

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(ix) be evidenced by delivery to Lessor and any Lender designated by Lessor, if
applicable, of an Acord Form 28 for property, rental value and boiler &
machinery coverage (or any other form requested by Lessor) and an Acord Form 25
for commercial general liability, workers’ compensation and umbrella coverage
(or any other form requested by Lessor); provided that in the event that either
such form is no longer available, such evidence of insurance shall be in a form
reasonably satisfactory to Lessor. The approved Acord Forms are attached hereto
as Exhibit D; and

(x) be issued by insurance companies licensed to do business in the states where
the Property is located and which are rated no less than A-X by Best’s Insurance
Guide or are otherwise approved by Lessor.

(c) Additional Obligations. It is expressly understood and agreed that (i) if
any insurance required hereunder, or any part thereof, shall expire, be
withdrawn, become void by breach of any condition thereof by Lessee, or become
void or in jeopardy by reason of the failure or impairment of the capital of any
insurer, Lessee shall immediately obtain new or additional insurance reasonably
satisfactory to Lessor and any Lender designated by Lessor; (ii) the minimum
limits of insurance coverage set forth in this Section 6.03 shall not limit the
liability of Lessee for its acts or omissions as provided in this Lease;
(iii) Lessee shall procure policies for all insurance for periods of not less
than one year and shall provide to Lessor and any servicer or Lender of Lessor
certificates of insurance or, upon Lessor’s request, duplicate originals of
insurance policies evidencing that insurance satisfying the requirements of this
Lease is in effect at all times; (iv) Lessee shall pay as they become due all
premiums for the insurance required by this Section 6.03; and (v) in the event
that Lessee fails to comply with any of the requirements set forth in this
Section 6.03, within ten (10) days of the giving of written notice by Lessor to
Lessee, (A) Lessor shall be entitled to procure such insurance; and (B) any
reasonable sums expended by Lessor in procuring such insurance shall be
Additional Rental and shall be repaid by Lessee, together with interest thereon
at the Default Rate, from the time of payment by Lessor until fully paid by
Lessee immediately upon written demand therefor by Lessor.

(d) Blanket Policies. Notwithstanding anything to the contrary in this
Section 6.03, any insurance which Lessee is required to obtain pursuant to this
Section 6.03 may be carried under a “blanket” policy or policies covering other
properties or liabilities of Lessee provided that such “blanket” policy or
policies otherwise comply with the provisions of this Section 6.03.

Section 6.04. Tax and Insurance Impound. Upon the occurrence of a monetary Event
of Default with respect to the payment of taxes or insurance, in addition to any
other remedies, Lessor may require Lessee to pay to Lessor on the first day of
each month the amount that Lessor reasonably estimates will be necessary in
order to accumulate with Lessor sufficient funds in an impound account (which
shall not be deemed a trust fund) (the “Reserve”) for Lessor to pay any and all
real estate taxes (“Real Estate Taxes”) and insurance premiums (“Insurance
Premiums”) for the Property for the ensuing twelve (12) months (only), or, if
due

 

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sooner, Lessee shall pay the required amount immediately upon Lessor’s demand
therefor. Lessor shall, upon prior written request of Lessee, provide Lessee
with evidence reasonably satisfactory to Lessee that payment of the Real Estate
Taxes and Insurance Premiums was made in a timely fashion. In the event that the
Reserve does not contain sufficient funds to timely pay any Real Estate Taxes or
Insurance Premiums, upon Lessor’s written notification thereof, Lessee shall,
within five (5) Business Days of such notice, provide funds to Lessor in the
amount of such deficiency. Lessor shall pay or cause to be paid directly to the
applicable taxing authorities and insurance company, as the case may be, any
Real Estate Taxes and Insurance Premiums then due and payable for which there
are funds in the Reserve; provided, however, that in no event shall Lessor be
obligated to pay any Real Estate Taxes or Insurance Premiums in excess of the
funds held in the Reserve, and Lessee shall remain liable for any and all Real
Estate Taxes, including fines, penalties, interest or additional costs imposed
by any taxing authority (unless incurred as a result of Lessor’s failure to
timely pay Real Estate Taxes for which it had funds in the Reserve) and
Insurance Premiums. Lessee shall cooperate fully with Lessor in assuring that
the Real Estate Taxes and Insurance Premiums are timely paid. Lessor may deposit
all Reserve funds in accounts insured by any federal or state agency and, so
long as Lessor is the owner of the Property or an Affiliate of Lessor is the
property manager of the Property, Lessor may commingle such funds with other
funds and accounts of Lessor. Interest or other gains from such funds, if any,
shall be the sole property of Lessor. Upon an Event of Default, in addition to
any other remedies, Lessor may apply all impounded funds in the Reserve against
any sums due from Lessee to Lessor with respect to the Event of Default. Lessor
shall give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.

ARTICLE VII

MAINTENANCE; ALTERATIONS

Section 7.01. Condition of Property; Maintenance. Except as expressly provided
elsewhere in the Lease, Lessee hereby accepts the Property “AS IS” and “WHERE
IS” with no representation or warranty of Lessor as to the condition thereof.
Lessee shall, at its sole cost and expense, be responsible for (a) keeping all
of the building, structures and improvements erected on the Property in good
order and repair, free from actual or constructive waste, including without
limitation, the roof and the HVAC and other electrical and mechanical systems;
(b) the repair or reconstruction of any building, structures or improvements
erected on the Property damaged or destroyed by a Casualty; (c) subject to
Section 7.02, making all necessary structural, non-structural, exterior and
interior repairs and replacements to any building, structures or improvements
erected on the Property; and (d) paying all operating costs of the Property in
the ordinary course of business. Lessee waives any right to require Lessor to
maintain, repair or rebuild the Property or make repairs at the expense of
Lessor pursuant to any Legal Requirements at any time in effect.

Section 7.02. Alterations and Improvements. During the Lease Term, Lessee shall
not alter the exterior, structural, plumbing or electrical elements of the
Property in any manner without the consent of Lessor, which consent shall not be
unreasonably withheld or conditioned; provided, however, Lessee may undertake
alterations to the Property, individually, costing less than $100,000 (provided
that the total for any twelve month period is not greater than $250,000) without
Lessor’s prior written consent. If Lessor’s consent is required hereunder and
Lessor consents to the making of any such alterations, the same shall be made by
Lessee at

 

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Lessee’s sole expense by a licensed contractor and according to plans and
specifications approved by Lessor and subject to such other conditions as Lessor
shall reasonably require. Any work at any time commenced by Lessee on the
Property shall be prosecuted diligently to completion, shall be of good
workmanship and materials and shall comply fully with all the terms of this
Lease and all Legal Requirements. Upon completion of any alterations
individually costing $100,000 or more, Lessee shall promptly provide Lessor with
evidence of full payment to all laborers and materialmen contributing to the
alterations. Additionally, upon completion of any alterations, Lessee shall
promptly provide Lessor with (a) an architect’s certificate certifying the
alterations to have been substantially completed in conformity with the plans
and specifications (if the alterations are of such a nature as would require the
issuance of such a certificate from the architect); (b) a certificate of
occupancy (if the alterations are of such a nature as would require the issuance
of a certificate of occupancy); and (c) any other documents or information
reasonably requested by Lessor. Lessee shall keep the Property free from any
liens arising out of any work performed on, or materials furnished to, the
Property (or, at Lessee’s election, Lessee shall bond over such liens or have a
title endorsement issued to Lessor’s owner’s policy which insures over such
liens). Any addition to or alteration of the Property that isn’t removable and
that becomes permanently part of the Property (but not including any
replacements for the Special Equipment (as defined in the Purchase and Sale
Agreement) whether or not such Special Equipment that is deemed to be real
property under the laws of the State of Illinois) shall be deemed a part of the
Property and belong to Lessor, and Lessee shall execute and deliver to Lessor
such instruments as Lessor may require to evidence the ownership by Lessor of
such addition or alteration.

Section 7.03. Encumbrances. During the Lease Term, Lessor shall not have the
right to grant easements on, over, under or above the Property without the prior
written consent of Lessee, which shall not be unreasonably withheld and Lessee
shall not be deemed to be unreasonable if Lessee does not consent to any such
easements that interfere with Lessee’s use of the Property or cause Lessee to
incur any costs. Lessee shall comply with and perform all obligations of Lessor
under all easements, declarations, covenants, restrictions and other items of
record now encumbering the Property. Without Lessor’s prior written consent,
Lessee shall not grant any easements on, over, under or above the Property.

ARTICLE VIII

USE OF THE PROPERTY; COMPLIANCE

Section 8.01. Use. During the Lease Term, the Property shall be used solely for
the operation of a Permitted Facility. Except during periods when a Property is
untenantable due to Casualty or Condemnation (and provided that Lessee continues
to strictly comply with the other terms and conditions of this Lease), Lessee
shall at all times during the Lease Term occupy the Property and shall
diligently operate its business on the Property. Notwithstanding any provision
contained herein, Lessee shall not be in default under this Section 8.01 (or any
other provision of this Lease) and a Property shall not be considered a “go
dark” location unless and until Lessee fails to continue to operate its business
at the Property (excluding instances of Casualty, Condemnation and Force
Majeure) for more than six (6) months. Thereafter, in the event Lessee is unable
to operate the Property as a Permitted Facility due to circumstances beyond the
reasonable control of Lessee (and Lessee provides to Lessor an officer’s
certificate executed by an officer of Lessee certifying to the same), then in
such event, within sixty (60) days following such six (6) month period, Lessee
shall (i) re-open the Property; or (ii) exercise

 

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Lessee’s assignment or subletting rights as permitted under this Lease;
(iii) with Lessor’s prior written approval, purchase the Property from Lessor at
Lessor’s Investment; or (iv) provide Lessor with an officer’s certificate
certifying the good faith business reasons Lessee is unable to complete (i),
(ii) or (iii) within said six (6) month period and setting forth the additional
time frame Lessee will need to comply with this Section 8.01. In the case of
item (iv), Lessor shall, in its reasonable discretion based upon the certificate
provided by Lessee, determine the additional time frame Lessee will have to
comply with this Section 8.01. Lessee shall provide Lessor with written notice
of the “go dark” Property at least ten (10) days prior to the commencement of
the six (6) month period. Notwithstanding the foregoing, the terms and
provisions of this Lease and Lessee’s obligations hereunder shall remain in full
force and effect with respect to any “go dark” period.

Section 8.02. Alternative Use. Lessee shall not, by itself or through any
assignment, sublease or other type of transfer, convert the Property to an
alternative use during the Lease Term without Lessor’s prior written consent,
such consent not to be unreasonably withheld, conditioned or delayed. In the
event that Lessee shall change the use of the Property or the concept or brand
operated on the Property, only as may be expressly permitted herein or consented
to by Lessor in writing, Lessee shall provide Lessor with written notice of any
such change and a copy of the franchise agreement related to such new concept or
brand, if any.

Section 8.03. Compliance. Lessee’s use and occupation of the Property, and the
condition thereof, shall, at Lessee’s sole cost and expense, comply fully with
all Legal Requirements and all restrictions, covenants and encumbrances of
record (as of the Effective Date), and any owner obligations under such Legal
Requirements, or restrictions, covenants and encumbrances of record (as of the
Effective Date), with respect to the Property, in either event, the failure with
which to comply could have a Material Adverse Effect. Without in any way
limiting the foregoing provisions, Lessee shall comply with all Legal
Requirements relating to anti-terrorism, trade embargos, economic sanctions,
Anti-Money Laundering Laws, and the Americans with Disabilities Act of 1990, as
such act may be amended from time to time, and all regulations promulgated
thereunder, as it affects the Property now or hereafter in effect and Lessee
shall comply with all Legal Requirements and directives of Governmental
Authorities and, at Lessor’s request, provide to Lessor copies of all notices,
reports and other communications exchanged with, or received from, Governmental
Authorities relating to such an event. Lessee shall also reimburse Lessor for
all Costs incurred by Lessor in evaluating the effect of such an event on the
Property and this Lease, in obtaining any necessary license from Governmental
Authorities as may be necessary for Lessor to enforce its rights under the
Lease, and in complying with all Legal Requirements applicable to Lessor as the
result of the existence of such an event and for any penalties or fines imposed
upon Lessor as a result thereof. Lessee will use its best efforts to prevent any
act or condition to arise on or about the Property after the date of this Lease
which will materially increase any insurance rate thereon, except when such acts
are required in the normal course of its business and Lessee shall pay for such
increase. Lessee agrees that it will defend, indemnify and hold harmless the
Indemnified Parties from and against any and all Losses caused by, incurred or
resulting from Lessee’s failure to comply with its obligations under this
Section.

 

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Section 8.04. Environmental.

(a) Covenants.

(i) Lessee covenants to Lessor during the Lease Term, subject to the limitations
of subsection (ii) below, as follows:

(A) The Property and Lessee shall not be (1) in violation of any Remediation
required by any Governmental Authority, or (2) subject to any Remediation
obligations under any Environmental Laws. Lessee shall not be in violation of
any investigation or inquiry by any Governmental Authority.

(B) All uses and operations on or of the Property, whether by Lessee or any
other Person, shall be in compliance with all Environmental Laws and permits
issued pursuant thereto.

(C) There shall be no Releases in, on, under or from the Property, except in
Permitted Amounts.

(D) There shall be no Hazardous Materials or Regulated Substances in, on or
under the Property, except in Permitted Amounts. Above and below ground storage
tanks shall be properly permitted and only used as permitted.

(E) Lessee shall keep the Property or cause the Property to be kept free and
clear of all Environmental Liens, whether due to any act or omission of Lessee
or any other Person.

(F) Lessee shall not act or fail to act or allow any other tenant, occupant,
guest, customer or other user of the Property under Lessee’s control to act or
fail to act in any way that (1) materially increases a risk to human health or
the environment, (2) poses an unreasonable or unacceptable risk of harm to any
Person or the environment (whether on or off the Property), (3) has a Material
Adverse Effect, (4) is contrary to any material requirement set forth in the
insurance policies maintained by Lessee or Lessor, (5) constitutes a public or
private nuisance or constitutes waste, (6) violates any covenant, condition,
agreement or easement applicable to the Property, or (7) would result in any
reopening or reconsideration of any prior investigation or causes a new
investigation by a Governmental Authority having jurisdiction over the Property.

(G) Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property as may be reasonably requested by Lessor (including but not limited
to sampling, testing and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas), and share with
Lessor the reports and other results thereof, and Lessor and the other
Indemnified Parties shall be entitled to rely on such reports and other results
thereof.

 

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(H) Lessee shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to this Section 8.04, including but not
limited to providing all relevant information and making knowledgeable persons
available for interviews.

(ii) Notwithstanding any provision of this Lease to the contrary, an Event of
Default shall not be deemed to have occurred as a result of the failure of
Lessee to satisfy any one or more of the covenants set forth in subsections (A)
through (F) above provided that Lessee shall be in compliance with the
requirements of any Governmental Authority with respect to the Remediation of
any Release at the Property.

(b) Notification Requirements. Lessee shall immediately notify Lessor in writing
upon Lessee obtaining actual knowledge of (i) any Releases or Threatened
Releases in, on, under or from the Property other than in Permitted Amounts, or
migrating towards the Property; (ii) any non-compliance with any Environmental
Laws related in any way to the Property; (iii) any actual or potential
Environmental Lien or activity use limitation; (iv) any required or proposed
Remediation of environmental conditions relating to the Property required by
applicable Governmental Authorities; and (v) any written or oral notice or other
communication of which Lessee becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) relating in any way to
Hazardous Materials, Regulated Substances or above or below ground storage
tanks, or Remediation thereof at or on the Property, other than in Permitted
Amounts, possible liability of any Person relating to the Property pursuant to
any Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Section. Lessee shall, upon
Lessor’s written request, deliver to Lessor a certificate stating that Lessee is
and has been in full compliance with all of the environmental representations,
warranties and covenants in this Lease.

(c) Remediation. Lessee shall, at its sole cost and expense, and without
limiting any other provision of this Lease, effectuate any Remediation required
by any Governmental Authority of any condition (including, but not limited to, a
Release or Threatened Release) in, on, under or from the Property and take any
other reasonable action deemed necessary by any Governmental Authority for
protection of human health or the environment. Should Lessee fail to undertake
any required Remediation in accordance with the preceding sentence, Lessor,
after written notice to Lessee and Lessee’s failure to immediately undertake
such Remediation, shall be permitted to complete such Remediation, and all Costs
incurred in connection therewith shall be paid by Lessee. Any Cost so paid by
Lessor, together with interest at the Default Rate, shall be deemed to be
Additional Rental hereunder and shall be immediately due from Lessee to Lessor.

(d) Indemnification. Lessee shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless each of the Indemnified Parties
from and against any and all Losses, including, but not limited to, all Costs of
Remediation

 

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required by a Governmental Authority, arising out of or in any way relating to
any Environmental Laws, Hazardous Materials, Regulated Substances, above or
below ground storage tanks, or other environmental matters concerning the
Property. It is expressly understood and agreed that Lessee’s obligations under
this Section shall survive the expiration or earlier termination of this Lease
for any reason.

(e) Right of Entry. Lessor and any other Person designated by Lessor, including
but not limited to any receiver, any representative of a Governmental Authority,
and any environmental consultant, shall have the right, but not the obligation,
to enter upon the Property at all reasonable times (including, without
limitation, in connection with the exercise of any remedies set forth in this
Lease) to assess any and all aspects of the environmental condition of the
Property and its use, including but not limited to conducting any environmental
assessment or audit (the scope of which shall be determined in Lessor’s sole and
absolute discretion) and taking samples of soil, groundwater or other water,
air, or building materials, and conducting other invasive testing. Lessee shall
cooperate with and provide access to Lessor and any other Person designated by
Lessor. Any such assessment or investigation shall be at Lessee’s sole cost and
expense if Lessor’s right of entry was triggered by Lessee’s violation of an
Environmental Law.

(f) Inspections. At its sole cost and expense, Lessee shall have the Property
inspected as may be required by any Environmental Law for seepage, spillage and
other environmental concerns. Lessee shall maintain and monitor all above and
below ground storage tanks in accordance with all Environmental Laws. Lessee
shall provide Lessor with written certified results of all inspections performed
on the Property. All costs and expenses associated with the inspection,
preparation and certification of results, as well as those associated with any
corrective action, shall be paid by Lessee. All inspections and tests performed
on the Property shall be in compliance with all applicable Environmental Laws.

(g) UST Compliance. Lessee shall comply or cause the compliance with all
applicable federal, state and local regulations and requirements regarding above
and below ground storage tanks, including, without limitation, any of such
regulations or requirements which impose (i) technical standards, including,
without limitation, performance, leak prevention, leak detection, notification
reporting and recordkeeping; (ii) corrective action with respect to confirmed
and suspected Releases; and (iii) financial responsibility for the payment of
costs of corrective action and compensation to third parties for injury and
damage resulting from Releases. Lessee shall immediately notify Lessor, in
writing, of (A) the presence on or under the Property, or the Release from any
above or below ground storage tank on, above or under the Property, of any
Hazardous Materials or Regulated Substances, apparent or real; and (B) any and
all enforcement, clean-up, remedial, removal or other governmental or regulatory
actions threatened, instituted or completed pursuant to any of the Environmental
Laws affecting the Property. Upon any such Release from any USTs on, above or
under the Property of any Hazardous Materials or Regulated Substances, Lessee
shall immediately remedy such situation in accordance with all Environmental
Laws and any request of Lessor. Should Lessee fail to remedy or cause the remedy
of such situation in accordance with all Environmental Laws, Lessor shall be
permitted to take such actions in its sole discretion to remedy such situation
and all Costs incurred in connection therewith, together with interest at the
Default Rate, will be paid by Lessee.

 

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(h) Survival. The obligations of Lessee and the rights and remedies of Lessor
under this Section 8.04 for any conditions caused by Lessee or otherwise
accruing during the Term of this Lease shall survive the termination, expiration
and/or release of this Lease for a period of five (5) years.

ARTICLE IX

ADDITIONAL COVENANTS

Section 9.01. Performance at Lessee’s Expense. Lessee acknowledges and confirms
that Lessor may impose reasonable administrative fees not to exceed $1000 in
each instance in connection with Lessee’s request for (a) any release or
substitution of Property; (b) the procurement of consents, waivers and approvals
with respect to the Property or any matter related to this Lease; and (c) the
review of any assignment or sublease or proposed assignment or sublease or the
preparation or review of any subordination or non-disturbance agreement.

Section 9.02. Inspection. Lessor and its authorized representatives shall have
the right, at all reasonable times and upon giving reasonable prior notice
(except in the event of an emergency, in which case no prior notice shall be
required), to enter the Property or any part thereof and inspect the same.
Lessee hereby waives any claim for damages for any injury or inconvenience to or
interference with Lessee’s business, any loss of occupancy or quiet enjoyment of
the Property and any other loss occasioned by such entry, but excluding damages
arising as a result of the negligence or intentional misconduct of Lessor or
Lessor’s officers, employees, contractors, agents, directors or other
representatives (“Lessor’s Representatives”).

Section 9.03. Financial Information. The provisions of Sections 9.03(a) and
9.03(b) shall apply only if and when Lessee is not a U.S. Publicly Traded
Entity.

(a) Financial Statements. Within forty five (45) days after the end of each
fiscal quarter and within one hundred twenty (120) days after the end of each
fiscal year of Lessee, Lessee shall deliver to Lessor (i) complete financial
statements of Lessee including a balance sheet, profit and loss statement,
statement of changes in financial condition and all other related schedules for
the fiscal period then ended; and (ii) income statements for the business at the
Property. All such financial statements shall be prepared in accordance with
GAAP, and shall be certified to be accurate and complete by an officer or
director of Lessee. Lessee understands that Lessor will rely upon such financial
statements and Lessee represents that such reliance is reasonable. In the event
that Lessee’s property and business at the Property are ordinarily consolidated
with other business for financial statements purposes, such financial statements
shall be prepared on a consolidated basis showing separately the sales, profits
and losses, assets and liabilities pertaining to the Property with the basis for
allocation of overhead of other charges being clearly set forth. The financial
statements delivered to Lessor need not be audited, but Lessee shall deliver to
Lessor copies of any audited financial statements of Lessee which may be
prepared, as soon as they are available.

 

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(b) Other Information. Notwithstanding any provision contained herein, upon
request at any time, Lessee will provide to Lessor any and all financial
information and/or financial statements (and in the form or forms) (i) requested
by Lessor in connection with Lessor’s filings with or disclosures to any
Governmental Authority, including, without limitation, the financial statements
required in connection with Securities and Exchange Commission filings by Lessor
or its Affiliates; and (ii) as reasonably requested by Lessor.

Section 9.04. OFAC Laws. Upon receipt of notice or upon actual knowledge
thereof, Lessee shall immediately notify Lessor in writing if any Person owning
(directly or indirectly) any interest in Lessee, or any director, officer,
shareholder, member, manager or partner of any of such holders is a Person whose
property or interests are subject to being blocked under any of the OFAC Laws,
or is otherwise in violation of any of the OFAC Laws, or is under investigation
by any Governmental Authority for, or has been charged with, or convicted of,
drug trafficking, terrorist-related activities or any violation of the
Anti-Money Laundering Laws, has been assessed civil penalties under these or
related Laws, or has had funds seized or forfeited in an action under these or
related Laws; provided, however, that the covenant in this Section 9.04 shall
not apply to any Person to the extent such Person’s interest is in or through a
U.S. Publicly Traded Entity.

Section 9.05. Estoppel Certificate. At any time, and from time to time, Lessee
shall, promptly and in no event later than ten (10) Business Days after a
request from Lessor or any Lender or mortgagee of Lessor, execute, acknowledge
and deliver to Lessor or such Lender or mortgagee, as the case may be, a
certificate in the form supplied by Lessor, certifying: (a) that Lessee has
accepted the Property; (b) that this Lease is in full force and effect and has
not been modified (or if modified, setting forth all modifications), or, if this
Lease is not in full force and effect, the certificate shall so specify the
reasons therefor; (c) the commencement and expiration dates of the Lease Term;
(d) the date to which the Base Monthly Rentals have been paid under this Lease
and the amount thereof then payable; (e) to the best of Lessee’s knowledge,
whether there are then any existing defaults by Lessor in the performance of its
obligations under this Lease, and, if there are any such defaults, specifying
the nature and extent thereof; (f) that no notice has been received by Lessee of
any default under this Lease which has not been cured, except as to defaults
specified in the certificate; (g) the capacity of the Person executing such
certificate, and that such Person is duly authorized to execute the same on
behalf of Lessee; (h) to the extent accurate, that Lessor has no actual
involvement in the management or control of decision making related to the
operational aspects or the day-to-day operation of the Property, including any
handling or disposal of Hazardous Materials or Regulated Substances; and (i) any
other information reasonably requested by Lessor. At any time, and from time to
time, Lessor shall, promptly and in no event later than ten (10) Business Days
after a request from Lessee, execute, acknowledge and deliver to Lessee an
estoppel certificate in form reasonably acceptable to Lessor.

ARTICLE X

RELEASE AND INDEMNIFICATION

Section 10.01. Release and Indemnification. Lessee agrees to use and occupy the
Property at its own risk and hereby releases Lessor and Lessor’s agents and
employees from all claims for any damage or injury (except to the extent caused
by the negligent or intentional

 

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acts or omissions of Lessor or Lessor’s Representatives) to the full extent
permitted by Law. Lessee agrees that Lessor shall not be responsible or liable
to Lessee or Lessee’s employees, agents, customers, licensees or invitees for
bodily injury, personal injury or property damage occasioned by the acts or
omissions of any other lessee or any other Person (other than any of Lessor’s
Representatives). Lessee agrees that any employee or agent to whom the Property
or any part thereof shall be entrusted by or on behalf of Lessee shall be acting
as Lessee’s agent with respect to the Property or any part thereof, and neither
Lessor nor Lessor’s agents, employees or contractors shall be liable for any
loss of or damage to the Property or any part thereof (except to the extent
caused by the negligent or intentional acts or omissions of Lessor or Lessor’s
Representatives). Lessee shall indemnify, protect, defend and hold harmless each
of the Indemnified Parties from and against any and all Losses (excluding Losses
suffered by an Indemnified Party arising out of the negligence or willful
misconduct of such Indemnified Party) caused by, incurred or resulting from
Lessee’s operations or by Lessee’s use and occupancy of the Property, whether
relating to its original design or construction, latent defects, alteration,
maintenance, use by Lessee or any Person thereon, supervision or otherwise, or
from any breach of, default under, or failure to perform, any term or provision
of this Lease by Lessee, its officers, employees, agents or other Persons. It is
expressly understood and agreed that Lessee’s obligations under this Section
shall survive the expiration or earlier termination of this Lease for any reason
whatsoever.

ARTICLE XI

CONDEMNATION AND CASUALTY

Section 11.01. Notification. If Lessor or Lessee receives notice of a pending or
threatened condemnation of the Property, such party shall promptly give the
other party written notice of (a) any Condemnation of the Property, (b) the
commencement of any proceedings or negotiations which might result in a
Condemnation of the Property, and (c) any Casualty to the Property or any part
thereof. Such notice shall provide a general description of the nature and
extent of such Condemnation, proceedings, negotiations or Casualty, and shall
include copies of any documents or notices received in connection therewith.
Thereafter, each party shall promptly send the other copies of all notices,
correspondence and pleadings such party receives relating to any such
Condemnation, proceedings, negotiations or Casualty.

Section 11.02. Total Condemnation. In the event of a Condemnation of all or
substantially all of the Property or a Condemnation (other than a Temporary
Taking) of a portion of the Property resulting in the portion of the Property
remaining after such Condemnation being unsuitable for use as a Permitted
Facility, as determined by Lessee in the exercise of good faith business
judgment (and Lessee provides to Lessor an officer’s certificate executed by an
officer of Lessee certifying to the same) (each such event, a “Total
Condemnation”), then, in such event:

(a) Termination of Lease. On the date of the Total Condemnation, either party
can terminate the Lease and all obligations of either party hereunder shall
cease; provided, however, that Lessee’s obligations to the Indemnified Parties
under any indemnification provisions of this Lease and Lessee’s obligation to
pay Rental and all other Monetary Obligations (whether payable to Lessor or a
third party) accruing under this Lease prior to the date of termination shall
survive such termination. If the date of

 

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such Total Condemnation is other than the first day of a month, the Base Monthly
Rental for the month in which such Total Condemnation occurs shall be
apportioned based on the date of the Total Condemnation.

(b) Net Award. Lessor shall be entitled to receive the entire Net Award in
connection with a Total Condemnation subject to Section 11.07.

Section 11.03. Partial Condemnation or Casualty. In the event of a Condemnation
which is not a Total Condemnation (each such event, a “Partial Condemnation”),
or in the event of a Casualty:

(a) Net Awards. All Net Awards shall be paid to Lessor.

(b) Lessor Election To Continue or Terminate Lease. Lessor shall have the
option, (i) subject to the right of Lessee to elect otherwise as set forth in
subsection (c) below, to terminate this Lease by notifying Lessee in writing
within thirty (30) days after Lessee gives Lessor notice (A) of such Partial
Condemnation or Casualty, or (B) that title has vested in the condemning
authority; or (ii) subject to the right of Lessee to elect otherwise as set
forth in subsection (e) below, to continue this Lease in effect, which election
shall be evidenced by either a notice from Lessor to Lessee, or Lessor’s failure
to notify Lessee in writing that Lessor has elected to terminate this Lease
within such thirty (30)-day period. Lessee shall have a period of sixty
(60) days after receipt of Lessor’s notice to terminate referenced above during
which to elect, despite such Lessor notice of termination, to continue this
Lease on the terms herein provided.

(c) Continuance of Lease. If this Lease is not terminated in accordance with the
terms of Section 11.03:

(i) All Rental and other Monetary Obligations due under this Lease shall
continue unabated.

(ii) Lessee shall promptly commence and diligently prosecute restoration of the
Property to the same condition, as nearly as practicable, as prior to such
Partial Condemnation or Casualty as approved by Lessor. Subject to the terms and
provisions of the Mortgages and upon the written request of Lessee (accompanied
by evidence reasonably satisfactory to Lessor that such amount has been paid or
is due and payable and is properly part of such costs, and that Lessee has
complied with the terms of Section 7.02 in connection with the restoration),
Lessor shall promptly make available in installments, subject to reasonable
conditions for disbursement imposed by Lessor, an amount up to but not exceeding
the amount of any Net Award received by Lessor with respect to such Partial
Condemnation or Casualty. Prior to the disbursement of any portion of the Net
Award with respect to a Casualty, Lessee shall provide evidence reasonably
satisfactory to Lessor of the payment of restoration expenses by Lessee up to
the amount of the insurance deductible applicable to such Casualty. Lessor shall
be entitled to keep any portion of the Net Award which may be in excess of the
cost of restoration, and Lessee shall bear all additional Costs of such
restoration in excess of the Net Award.

 

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(d) No Continuance of Lease. If this Lease is terminated in accordance with the
terms of Section 11.03, then this Lease shall terminate as of the date of the
Partial Condemnation or Casualty, as applicable (unless sooner terminated
pursuant to the terms hereof). Lessee shall vacate and surrender the Property by
such termination date, in accordance with the provisions of this Lease, and on
the termination date, all obligations of either party hereunder shall cease;
provided, however, Lessee’s obligations to the Indemnified Parties under any
indemnification provisions of this Lease and Lessee’s obligations to pay Rental
and all other Monetary Obligations (whether payable to Lessor or a third party)
accruing under this Lease prior to the date of termination shall survive such
termination. In such event, Lessor may retain all Net Awards related to the
Partial Condemnation or Casualty (subject to Section 11.07), and Lessee shall
promptly pay Lessor an amount equal to the insurance deductible applicable to
any Casualty, if applicable.

(e) Right to Termination. Notwithstanding any other provision to the contrary
contained in this Article XI, in the event that, as a result of a Casualty,
Lessee shall reasonably estimate in the exercise of good faith business judgment
that the Property cannot be used for the same purpose and substantially with the
same utility as before such Casualty (and Lessee provides to Lessor an officer’s
certificate executed by an officer of Lessee certifying to the same), then,
subject to the terms and conditions set forth in this subsection (e), Lessee
shall have the right, exercisable by written notice given to Lessor no later
than sixty (60) days following such Casualty, to terminate this Lease. If Lessee
elects to terminate, this Lease shall terminate as of the date of the Casualty
(unless sooner terminated pursuant to the terms hereof). Lessee shall vacate and
surrender the Property by such termination date, in accordance with the
provisions of this Lease, and all obligations of either party hereunder shall
cease as of the date of termination; provided, however, Lessee’s obligations to
the Indemnified Parties under any indemnification provisions of this Lease for
claims that arise prior to the date of termination and Lessee’s obligations to
pay Rental and all other Monetary Obligations (whether payable to Lessor or a
third party) accruing under this Lease prior to the date of termination shall
survive such termination. In such event, Lessor may retain all Net Awards
related to the Casualty, and Lessee shall promptly pay Lessor an amount equal to
the insurance deductible applicable to any Casualty.

Section 11.04. Temporary Taking. In the event of a Condemnation of all or any
part of the Property for a temporary use (a “Temporary Taking”), this Lease
shall remain in full force and effect without any reduction of Base Annual
Rental, Additional Rental or any other Monetary Obligation payable hereunder.
Except as provided below and subject to the terms and provisions of the
Mortgages, Lessee shall be entitled to the entire Net Award for a Temporary
Taking, unless the period of occupation and use by the condemning authorities
shall extend beyond the date of expiration of this Lease, in which event the Net
Award made for such Temporary Taking shall be apportioned between Lessor and
Lessee as of the date of such expiration. At the termination of any such
Temporary Taking, Lessee will, at its own cost and expense and pursuant to the
provisions of Section 7.02, promptly commence and complete restoration of the
Property.

Section 11.05. Adjustment of Losses. Any loss under any property damage
insurance required to be maintained by Lessee shall be adjusted by Lessor and
Lessee. Subject to the terms and provisions of the Mortgages, any Net Award
relating to a Total

 

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Condemnation or a Partial Condemnation shall be adjusted by Lessor or, at
Lessor’s election, Lessee. Notwithstanding the foregoing or any other provisions
of this Section 11.05 to the contrary, but subject to the terms and provisions
of the Mortgages, if at the time of any Condemnation or any Casualty or at any
time thereafter an Event of Default shall have occurred and be continuing,
Lessor is hereby authorized and empowered but shall not be obligated, in the
name and on behalf of Lessee and otherwise, to file and prosecute Lessee’s
claim, if any, for a Net Award on account of such Condemnation or such Casualty
and to collect such Net Award and apply the same to the curing of such Event of
Default and any other then existing Event of Default under this Lease and/or to
the payment of any amounts owed by Lessee to Lessor under this Lease, in such
order, priority and proportions as Lessor in its discretion shall deem proper.

Section 11.06. Lessee Obligation in Event of Casualty. During all periods of
time following a Casualty, Lessee shall take reasonable steps to ensure that the
Property is secure and does not pose any risk of harm to any adjoining property
and Persons (including owners or occupants of such adjoining property).

Section 11.07. Lessee Awards and Payments. Notwithstanding any provision
contained in this Article XI, Lessee shall be entitled to claim and receive any
award or payment from the condemning authority expressly granted to Lessee,
whether granted in a separate award or as a portion of any Net Award (so long as
such portion is specifically allocated to Lessee’s interests). The termination
of the Lease pursuant to this Article XI shall not affect rights of Lessee to
claim and receive any such awards.

ARTICLE XII

DEFAULT, CONDITIONAL LIMITATIONS,

REMEDIES AND MEASURE OF DAMAGES

Section 12.01. Event of Default. Each of the following shall be an event of
default by Lessee under this Lease (each, an “Event of Default”):

(a) if any Monthly Base Rental due under this Lease is not paid within three
(3) Business Days of when due, or any payment of Additional Rental or other
Monetary Obligation are not paid within five (5) days when due; provided,
however, delays in payment of Rental or other Monetary Obligations which are
caused by Lessor or Lessor’s banking institution involved in the ACH transfer
shall not give rise to an Event of Default, late penalties or default interest
under this Lease;

(b) if there is an Insolvency Event with respect to Lessee;

(c) subject to Section 8.01, if Lessee vacates or abandons the Property;

(d) if Lessee fails to observe or perform any of the other covenants, conditions
or obligations of Lessee in this Lease; provided, however, if any such failure
does not involve the payment of any Monetary Obligation, then such failure shall
not constitute an Event of Default hereunder, unless otherwise expressly
provided herein, unless and until Lessor shall have given Lessee notice thereof
and a period of thirty (30) days shall have elapsed, during which period Lessee
may correct or cure such failure,

 

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upon failure of which an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being required. If such
failure cannot reasonably be cured within such thirty (30)-day period, and
Lessee is diligently pursuing a cure of such failure, then Lessee shall have a
reasonable period to cure such failure beyond such thirty (30)-day period, which
shall in no event exceed ninety (90) days after receiving notice of such failure
from Lessor. If Lessee shall fail to correct or cure such failure within such
ninety (90)-day period, an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being required;

(e) if a final, nonappealable judgment is rendered by a court against Lessee
which has a Material Adverse Effect and is not discharged or provision made for
such discharge within ninety (90) days from the date of entry thereof;

(f) if Lessee shall be liquidated or dissolved or shall begin proceedings
towards its liquidation or dissolution; or

(g) if the estate or interest of Lessee in the Property shall be levied upon or
attached in any proceeding and such estate or interest is about to be sold or
transferred or such process shall not be vacated or discharged within ninety
(90) days after it is made or such longer period as may be permitted by
applicable law.

Section 12.02. Remedies. Upon the occurrence of an Event of Default, with or
without notice or demand, except as otherwise expressly provided herein or such
other notice as may be required by statute and cannot be waived by Lessee,
Lessor shall be entitled to exercise, at its option, concurrently, successively,
or in any combination, all remedies available at Law or in equity, including,
without limitation, any one or more of the following:

(a) to terminate this Lease, whereupon Lessee’s right to possession of the
Property shall cease and this Lease, except as to Lessee’s liability, shall be
terminated;

(b) to the extent not prohibited by applicable Law, to (i) re-enter and take
possession of the Property (or any part thereof), any or all personal property
or fixtures of Lessee upon the Property and, to the extent permissible, all
permits and other rights or privileges of Lessee pertaining to the use and
operation of the Property, and (ii) expel Lessee and those claiming under or
through Lessee, without being deemed guilty in any manner of trespass or
becoming liable for any loss or damage resulting therefrom, without resort to
legal or judicial process, procedure or action. No notice from Lessor hereunder
or under a forcible entry and detainer statute or similar Law shall constitute
an election by Lessor to terminate this Lease unless such notice specifically so
states. If Lessee shall, after default, voluntarily give up possession of the
Property to Lessor, deliver to Lessor or its agents the keys to the Property, or
both, such actions shall be deemed to be in compliance with Lessor’s rights and
the acceptance thereof by Lessor or its agents shall not be deemed to constitute
a termination of the Lease. Lessor reserves the right following any re-entry
and/or reletting to exercise its right to terminate this Lease by giving Lessee
written notice thereof, in which event this Lease will terminate;

(c) to bring an action against Lessee for any damages sustained by Lessor;

 

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(d) to relet the Property or any part thereof for such term or terms (including
a term which extends beyond the original Lease Term), at such rentals and upon
such other terms as Lessor, in its sole discretion, may determine, with all
proceeds received from such reletting being applied to the Rental and other
Monetary Obligations due from Lessee in such order as Lessor may, in it sole
discretion, determine, which other Monetary Obligations include, without
limitation, all repossession costs, brokerage commissions, attorneys’ fees and
expenses, alteration, remodeling and repair costs and expenses of preparing for
such reletting. Except to the extent required by applicable Law, Lessor shall
have no obligation to relet the Property or any part thereof and shall in no
event be liable for refusal or failure to relet the Property or any part
thereof, or, in the event of any such reletting, for refusal or failure to
collect any rent due upon such reletting, and no such refusal or failure shall
operate to relieve Lessee of any liability under this Lease or otherwise to
affect any such liability. Lessor reserves the right following any re-entry
and/or reletting to exercise its right to terminate this Lease by giving Lessee
written notice thereof, in which event this Lease will terminate as specified in
said notice;

(e) to recover from Lessee all Rental and other Monetary Obligations due and
owning under the Lease before the date of such Event of Default;

(f) to accelerate and recover from Lessee the discounted present value of the
Base Monthly Rental scheduled to become due and owing under this Lease for the
remaining original scheduled Lease Term, less the fair market rental value of
the Lease for the same period;

(g) to recover from Lessee all Costs paid or incurred by Lessor as a result of
such breach, regardless of whether or not legal proceedings are actually
commenced;

(h) to immediately or at any time thereafter, and with or without notice, at
Lessor’s sole option but without any obligation to do so, correct such breach or
default and charge Lessee all Costs incurred by Lessor therein. Any sum or sums
so paid by Lessor, together with interest at the Default Rate, shall be deemed
to be Additional Rental hereunder and shall be immediately due from Lessee to
Lessor. Any such acts by Lessor in correcting Lessee’s breaches or defaults
hereunder shall not be deemed to cure said breaches or defaults or constitute
any waiver of Lessor’s right to exercise any or all remedies set forth herein;

(i) to immediately or at any time thereafter, and with or without notice, except
as required herein, set off any money of Lessee held by Lessor under this Lease
or any other Transaction Document or any Other Agreement against any sum owing
by Lessee hereunder;

(j) Without limiting the generality of the foregoing or limiting in any way the
rights of Lessor under this Lease or otherwise under applicable Laws, at any
time after the occurrence, and during the continuance, of an Event of Default,
Lessor shall be entitled to apply for and have a receiver appointed under
applicable Law by a court of competent jurisdiction (by ex parte motion for
appointment without notice) in any action taken by Lessor to enforce its rights
and remedies hereunder in order to protect and preserve Lessor’s interest under
this Lease or in the Property, and in connection

 

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therewith, LESSEE HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT
TO OR OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AFTER THE OCCURRENCE, AND
DURING THE CONTINUANCE, OF AN EVENT OF DEFAULT; and/or

(k) to seek any equitable relief available to Lessor, including, without
limitation, the right of specific performance.

Section 12.03. Cumulative Remedies. All powers and remedies given by
Section 12.02 to Lessor, subject to applicable Law, shall be cumulative and not
exclusive of one another or of any other right or remedy or of any other powers
and remedies available to Lessor under this Lease, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements of Lessee contained in this Lease, and no delay or omission of Lessor
to exercise any right or power accruing upon the occurrence of any Event of
Default shall impair any other or subsequent Event of Default or impair any
rights or remedies consequent thereto. Every power and remedy given by this
Section or by Law to Lessor may be exercised from time to time, and as often as
may be deemed expedient, by Lessor, subject at all times to Lessor’s right in
its sole judgment to discontinue any work commenced by Lessor or change any
course of action undertaken by Lessor.

Section 12.04. Lessee Waiver. Lessee hereby expressly waives, for itself and all
Persons claiming by, through and under Lessee, including creditors of all kinds,
(a) any right and privilege which Lessee has under any present or future Legal
Requirements to redeem the Property or to have a continuance of this Lease for
the Lease Term after termination of Lessee’s right of occupancy by order or
judgment of any court or by any legal process or writ, or under the terms of
this Lease; (b) the benefits of any present or future Legal Requirement that
exempts property from liability for debt or for distress for rent; (c) any
present or future Legal Requirement relating to notice or delay in levy of
execution in case of eviction of a tenant for nonpayment of rent; and (d) any
benefits and lien rights which may arise pursuant to any present or future Legal
Requirement.

ARTICLE XIII

MORTGAGE, SUBORDINATION AND ATTORNMENT

Section 13.01. No Liens. Lessor’s interest in this Lease and/or the Property
shall not be subordinate to any liens or encumbrances placed upon the Property
by or resulting from any act of Lessee, and nothing herein contained shall be
construed to require such subordination by Lessor. SUBJECT TO SECTION 16.01,
NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, SECURITY INTEREST
OR ENCUMBRANCE OF ANY KIND UPON THE PROPERTY OR LESSEE’S LEASEHOLD INTEREST
THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE VOID.

Section 13.02. Subordination. This Lease at all times shall automatically be
subordinate to the lien of any and all ground leases and Mortgages now or
hereafter placed upon the Property by Lessor, and Lessee covenants and agrees to
execute and deliver, upon demand, such further instruments subordinating this
Lease to the lien of any or all such ground leases and Mortgages as shall be
desired by Lessor, or any present or proposed mortgagees

 

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under trust deeds, upon the condition that Lessee shall have the right to remain
in possession of the Property under the terms of this Lease, notwithstanding any
default in any or all such ground leases or Mortgages, or after the foreclosure
of any such Mortgages, so long as no Event of Default shall have occurred and be
continuing. Lessor agrees to use its commercially reasonable efforts to provide
Lessee with a SNDA executed by each Lender holding a Mortgage, and Lessee agrees
to promptly execute and return such SNDA to Lessor.

Section 13.03. Election To Declare Lease Superior. If any mortgagee, receiver or
other secured party elects to have this Lease and the interest of Lessee
hereunder, be superior to any Mortgage and evidences such election by notice
given to Lessee, then this Lease and the interest of Lessee hereunder shall be
deemed superior to any such Mortgage, whether this Lease was executed before or
after such Mortgage and in that event such mortgagee, receiver or other secured
party shall have the same rights with respect to this Lease as if it had been
executed and delivered prior to the execution and delivery of such Mortgage and
had been assigned to such mortgagee, receiver or other secured party.

Section 13.04. Attornment. In the event any purchaser or assignee of any Lender
at a foreclosure sale acquires title to the Property, or in the event that any
Lender or any purchaser or assignee otherwise succeeds to the rights of Lessor
as landlord under this Lease, Lessee shall attorn to Lender or such purchaser or
assignee, as the case may be (a “Successor Lessor”), and recognize the Successor
Lessor as lessor under this Lease, and, subject to the provisions of this
Article XIII, this Lease shall continue in full force and effect as a direct
lease between the Successor Lessor and Lessee, provided that the Successor
Lessor shall only be liable for any obligations of Lessor under this Lease which
accrue after the date that such Successor Lessor acquires title. The foregoing
provision shall be self-operative and effective without the execution of any
further instruments.

Section 13.05. Execution of Additional Documents. Although the provisions in
this Article XIII shall be self-operative and no future instrument of
subordination shall be required, upon request by Lessor, Lessee shall execute
and deliver such additional reasonable instruments as may be reasonably required
for such purposes.

Section 13.06. Notice to Lender. Lessee shall give written notice to any Lender
having a recorded lien upon the Property or any part thereof of which Lessee has
been notified of any breach or default by Lessor of any of its obligations under
this Lease and give such Lender at least sixty (60) days beyond any notice
period to which Lessor might be entitled to cure such default before Lessee may
exercise any remedy with respect thereto.

ARTICLE XIV

ASSIGNMENT

Section 14.01. Assignment by Lessor. As a material inducement to Lessor’s
willingness to enter into the transactions contemplated by this Lease (the
“Transaction”), Lessee hereby agrees that Lessor may, from time to time and at
any time and without the consent of Lessee, engage in all or any combination of
the following, or enter into agreements in connection with any of the following
or in accordance with requirements that may be imposed by applicable securities,
tax or other Laws (provided that in each such instance it shall be at not cost
or liability to Lessee): (a) the sale, assignment, grant, conveyance, transfer,
financing,

 

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re-financing, purchase or re-acquisition of the Property, this Lease or any
other Transaction Document, Lessor’s right, title and interest in this Lease or
any other Transaction Document, the servicing rights with respect to any of the
foregoing, or participations in any of the foregoing; or (b) a Securitization
and related transactions. Without in any way limiting the foregoing, the parties
acknowledge and agree that Lessor, in its sole discretion, may assign this Lease
or any interest herein to another Person (including without limitation, a
taxable REIT subsidiary) in order to maintain Lessor’s or any of its Affiliates’
status as a REIT. In the event of any such sale or assignment other than a
security assignment, Lessee shall attorn to such purchaser or assignee (so long
as Lessor and such purchaser or assignee notify Lessee in writing of such
transfer and such purchaser or assignee expressly assumes in writing the
obligations of Lessor hereunder from and after the date of such assignment). At
the request of Lessor, Lessee will execute such documents confirming the sale,
assignment or other transfer and such other agreements as Lessor may reasonably
request, provided that the same do not increase the liabilities and obligations
of Lessee hereunder. Lessor shall be relieved, from and after the date of such
transfer or conveyance, of liability for the performance of any obligation of
Lessor contained herein, except for obligations or liabilities accrued prior to
such assignment or sale.

Section 14.02. No Assignment by Lessee.

(a) Lessee acknowledges that Lessor has relied both on the business experience
and creditworthiness of Lessee and upon the particular purposes for which Lessee
intends to use the Property in entering into this Lease. Lessee shall not
assign, transfer, convey, pledge or mortgage this Lease or any interest herein
or any interest in Lessee, whether by operation of Law or otherwise, without the
prior written consent of Lessor, such consent not to be unreasonably withheld,
conditioned or delayed. At the time of any assignment of this Lease which is
approved by Lessor, the assignee shall assume all of the obligations of Lessee
under this Lease pursuant to a written assumption agreement in form and
substance reasonably acceptable to Lessor. Such assignment of this Lease
pursuant to this Section 14.02 shall not relieve Lessee of its obligations
respecting this Lease unless otherwise agreed to by Lessor. Any assignment,
transfer, conveyance, pledge or mortgage in violation of this Section 14.02
shall be voidable at the sole option of Lessor. Any consent to an assignment
given by Lessor hereunder shall not be deemed consent to any subsequent
assignment.

(b) Notwithstanding anything to the contrary contained in this Section 14.02 and
provided that no Event of Default has occurred and is continuing and provided
further that any assignee agrees to assume all of Lessee’s obligations under
this Lease, Lessee shall have the right to assign or otherwise transfer all, but
not less than all, of its interest in, to and under this Lease without Lessor’s
consent to (i) an Affiliate of Lessee, (ii) any entity which purchases or
otherwise acquires all or substantially all of the assets or equity interest of
Lessee in a bona fide sale for fair market value, or (iii) a Qualified Operator.
A “Qualified Operator” shall mean a Person that: on a pro forma basis (i.e.,
following the consummation of the assignment contemplated herein): (A) has a
CFCCR (defined below) of at least 3.0x, (B) generates EBITDA (defined below) of
at least $12,000,000 during a trailing twelve (12) month period, (C) has a Lease
Adjusted Leverage (defined below) of no more than 2.5x; and (D) has a tangible
net worth as determined in accordance with GAAP in excess of $55,000,000 (each,
a “Permitted Transfer”); provided, however, that Lessee may satisfy the
foregoing conditions of a Qualified Operator by providing, or causing to be
provided, a guaranty agreement, in

 

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form and substance reasonably acceptable to and approved by Lessor, in writing,
which guaranty shall be from an entity that meets the requirements of (A) and
(B) forth in this Section 14.02(b). In the event that Lessee effects a Permitted
Transfer pursuant to clause (iii), Lessee shall be released from any liability
arising under this Lease from and after the date of such assignment. In the
event that Lessee effects a Permitted Transfer pursuant to clauses (i) or (ii),
Lessee shall not be released from liability under this Lease.

For purposes hereof:

“CFCCR” means with respect to the twelve month period of time immediately
preceding the date of determination, the ratio calculated for such period of
time, each as determined in accordance with GAAP, of (1) the sum of Net Income
(excluding non-cash income), Depreciation and Amortization, Interest Expense,
Operating Lease Expense and non-cash expenses to (2) the sum of Operating Lease
Expense, scheduled principal payments of long term Debt, scheduled maturities of
all Capital Leases, dividends and Interest Expense (excluding non-cash interest
expense and amortization of non-cash financing expenses). For purposes of
calculating the CFCCR, the following terms shall be defined as set forth below:

“Capital Lease” shall mean all leases of any property, whether real, personal or
mixed, by a Person, which leases would, in conformity with GAAP, be required to
be accounted for as a capital lease on the balance sheet of such Person. The
term “Capital Lease” shall not include any operating lease.

“Debt” shall mean with respect to a Person, and for the period of determination
(i) indebtedness for borrowed money, (ii) subject to the limitation set forth in
sub-item (iv) below, obligations evidenced by bonds, indentures, notes or
similar instruments, (iii) obligations under leases which should be, in
accordance with GAAP, recorded as Capital Leases, and (iv) obligations under
direct or indirect guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (iv) above, except for guaranty obligations
of such Person, which, in conformity with GAAP, are not included on the balance
sheet of such Person.

“Depreciation and Amortization” shall mean the depreciation and amortization
accruing during any period of determination with respect to a Person, as
determined in accordance with GAAP.

“Interest Expense” shall mean for any period of determination, the sum of all
interest accrued or which should be accrued in respect of all Debt of a Person,
as determined in accordance with GAAP.

“Net Income” shall mean with respect to the period of determination, the net
income or net loss of a Person. In determining the amount of Net Income,
(i) adjustments shall be made for nonrecurring gains and losses or non-cash
items allocable to the period of determination, (ii) deductions shall be made
for, among

 

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other things, Depreciation and Amortization, Interest Expense, Operating Lease
Expense, and (iii) no deductions shall be made for income taxes or charges
equivalent to income taxes allocable to the period of determination, as
determined in accordance with GAAP.

“Operating Lease Expense” shall mean the sum of all payments and expenses
incurred by a Person under any operating leases during the period of
determination, as determined in accordance with GAAP.

“EBITDA” means for the twelve (12) month period ending on the date of
determination, the sum of a Person’s net income (loss) for such period plus, in
each case to the extent previously deducted in calculating net income (loss):
(1) income taxes, (2) principal and interest payments on all of its debt
obligations (including any borrowings under short term credit facilities),
(3) all non-cash charges including depreciation and amortization, and
(4) Non-Recurring Items (defined below).

“EBITDAR” means the sum of a Person’s EBITDA and its total land and building
rent for the twelve (12) month period ending on the date of determination.

“Lease Adjusted Leverage” means with respect to a Person, as of any applicable
date, the sum of (1) eight (8) times such Person’s total land and building rent
for the twelve (12) month period ending on the date of determination, and
(2) the total current balance of such Person’s total debt obligations (including
any borrowings under short term credit facilities) on such date, divided by
EBITDAR.

“Non-Recurring Items” shall mean with respect to a Person, items of the sum
(whether positive or negative) of revenue minus expenses that, in the judgment
of Lessor, are unusual in nature, occur infrequently and are not representative
of the ongoing or future earnings or expenses of such Person.

(c) In connection with an assignment by Lessee pursuant to this Section 14.02,
Lessee shall have provided to Lessor, immediately prior to the effective date of
such assignment, an officer’s certificate executed by an officer of the assignee
certifying the covenant provided in Section 5.10 of this Lease, based upon a
list of parties identified by Lessor as holding a ten percent (10%) interest or
more in Lessor. Lessor shall provide the written list described in the preceding
sentence within five (5) Business Days of written request therefor by Lessee
and, in the absence of timely provision of such list, such officer’s certificate
shall be based on the latest written list delivered by Lessor to Lessee.

Section 14.03. No Subletting. Lessee shall not sublet the Property without the
prior written consent of Lessor, such consent not to be unreasonably withheld,
conditioned or delayed.

 

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ARTICLE XV

NOTICES

Section 15.01. Notices. All notices, demands, designations, certificates,
requests, offers, consents, approvals, appointments and other instruments given
pursuant to this Lease (collectively called “Notices”) shall be in writing and
given by (a) hand delivery, (b) express overnight delivery service, (c) email or
facsimile transmission, or (d) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon actual receipt or
attempted (but refused) delivery. Notices shall be provided to the parties and
addresses (or facsimile numbers, as applicable) specified below:

 

If to Lessee:   

U.S. Auto Parts Network, Inc.

16941 Keegan Ave.

Carson, CA 90746

Attention: Bryan Stevenson

Facsimile: 310-735-0092

Email: bstevenson@usautoparts.com

With a copy to:   

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attention: Michael Levinson

Facsimile: (858) 550-6420

Email: mlevinson@cooley.com

And with a copy to:   

K&L Gates

70 West Madison Street, Suite 3100

Chicago, Illinois 60602-4207

Attention: Lawrence A. Eiben

Facsimile: 312.827.1268

Email: larry.eiben@klgates.com

If to Purchaser:   

STORE Capital Acquisitions, LLC

8501 E. Princess Drive, Suite 190

Scottsdale, AZ 85255

Attention: Michael T. Bennett – Executive Vice

President – Operations

Facsimile: (480) 256-1101

Email: mbennett@storecapital.com

With a copy to:   

Kutak Rock LLP

1801 California Street, Suite 3100

Denver, CO 80202

Attention: Kelly G. Reynoldson, Esq.

Facsimile: (303) 292-7799

Email: Kelly.reynoldson@kutakrock.com

 

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or to such other address or such other Person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. Whenever in this Agreement the giving of Notice is required, the
giving thereof may be waived in writing at any time by the Person or Persons
entitled to receive such Notice.

ARTICLE XVI

WAIVER OF LANDLORD’S LIEN

Section 16.01. Waiver of Landlord’s Lien. All personal property, equipment,
machinery, trade fixtures and inventory of Lessee installed on, stored on or
used at the Property, including without limitation the Special Equipment (as
defined in the Purchase and Sale Agreement) and any replacements thereof
(collectively, “Lessee’s Property”), shall not be deemed part of the Property
for any purposes of this Lease, shall be and shall remain the exclusive property
of Lessee and shall not be subject to any Lessor’s lien or claim for any reason.
Lessor hereby waives any and all right to seek the remedy of distress for rent
under Illinois law.

ARTICLE XVII

MISCELLANEOUS

Section 17.01. Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fire or other casualty beyond the control of the party obligated to perform
(each, a “Force Majeure Event”) shall excuse the performance by such party for a
period equal to any such prevention, delay or stoppage, expressly excluding,
however, the obligations imposed upon Lessee with respect to Rental and other
Monetary Obligations to be paid hereunder.

Section 17.02. No Merger. There shall be no merger of this Lease nor of the
leasehold estate created by this Lease with the fee estate in or ownership of
the Property by reason of the fact that the same person, corporation, firm or
other entity may acquire or hold or own, directly or indirectly, (a) this Lease
or the leasehold estate created by this Lease or any interest in this Lease or
in such leasehold estate, and (b) the fee estate or ownership of the Property or
any interest in such fee estate or ownership. No such merger shall occur unless
and until all persons, corporations, firms and other entities having any
interest in (i) this Lease or the leasehold estate created by this Lease, and
(ii) the fee estate in or ownership of the Property or any part thereof sought
to be merged shall join in a written instrument effecting such merger and shall
duly record the same.

Section 17.03. Interpretation. Lessor and Lessee acknowledge and warrant to each
other that each has been represented by independent counsel and has executed
this Lease after being fully advised by said counsel as to its effect and
significance. This Lease shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the domicile of any
party. Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though made in the
form of a covenant.

 

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Section 17.04. Characterization. The following expressions of intent,
representations, warranties, covenants, agreements, stipulations and waivers are
a material inducement to Lessor entering into this Lease:

(a) Lessor and Lessee intend that (i) this Lease constitutes an unseverable,
unitary and single lease of the Property, and, if at any time this Lease covers
other real property in addition to the Property, neither this Lease, nor
Lessee’s obligations or rights hereunder may be allocated or otherwise divided
among such properties by Lessee; (ii) this Lease is a “true lease,” is not a
financing lease, capital lease, mortgage, equitable mortgage, deed of trust,
trust agreement, security agreement or other financing or trust arrangement, and
the economic realities of this Lease are those of a true lease; and (iii) the
business relationship created by this Lease and any related documents is solely
that of a long-term commercial lease between Lessor and Lessee, the Lease has
been entered into by both parties in reliance upon the economic and legal
bargains contained herein, and none of the agreements contained herein is
intended, nor shall the same be deemed or construed, to create a partnership (de
facto or de jure) between Lessor and Lessee, to make them joint venturers, to
make Lessee an agent, legal representative, partner, subsidiary or employee of
Lessor, nor to make Lessor in any way responsible for the debts, obligations or
losses of Lessee.

(b) Lessor and Lessee covenant and agree that: (i) each will treat this Lease as
an operating lease pursuant to Statement of Financial Accounting Standards
No. 13, as amended, and as a true lease for state Law reporting purposes and for
federal income tax purposes; (ii) each party will not, nor will it permit any
Affiliate to, at any time, take any action or fail to take any action with
respect to the preparation or filing of any statement or disclosure to
Governmental Authority, including without limitation, any income tax return
(including an amended income tax return), to the extent that such action or such
failure to take action would be inconsistent with the intention of the parties
expressed in this Section 17.04; (iii) with respect to the Property, the Lease
Term is less than eighty percent (80%) of the estimated remaining economic life
of the Property; and (iv) the Base Annual Rental is the fair market value for
the use of the Property and was agreed to by Lessor and Lessee on that basis,
and the execution and delivery of, and the performance by Lessee of its
obligations under, this Lease do not constitute a transfer of the Property.

(c) Lessee waives any claim or defense based upon the characterization of this
Lease as anything other than a true lease of the Property. Lessee stipulates and
agrees (i) not to challenge the validity, enforceability or characterization of
the lease of the Property as a true lease and/or as a single, unitary,
unseverable instrument pertaining to the lease of all the Property; and (ii) not
to assert or take or omit to take any action inconsistent with the agreements
and understandings set forth in this Section 17.04.

(d) Lessor and Lessee agree to provide each other with timely notice of any
communications they receive from a Governmental Authority that concern the
characterization of the Transaction or this Lease in a manner different from
that set forth in this Section 17.04, and they agree to cooperate and consult
with respect to such communications

 

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Section 17.05. Disclosure. The parties agree that, notwithstanding any provision
contained in this Lease, any party (and each employee, representative or other
agent of any party) may disclose to any and all persons, without limitation of
any kind, any matter required under the Securities Act or the Exchange Act.

Section 17.06. Bankruptcy. Intentionally deleted.

Section 17.07. Attorneys’ Fees. In the event of any judicial or other
adversarial proceeding concerning this Lease, to the extent permitted by Law,
the prevailing party shall be entitled to recover all of its reasonable
attorneys’ fees and other Costs in addition to any other relief to which it may
be entitled.

Section 17.08. Memorandum of Lease. Concurrently with the execution of this
Lease, Lessor and Lessee are executing Lessor’s standard form memorandum of
lease in recordable form, indicating the names and addresses of Lessor and
Lessee, a description of the Property, the Lease Term, but omitting Rentals and
such other terms of this Lease as Lessor may not desire to disclose to the
public.

Section 17.09. No Brokerage. Lessor and Lessee represent and warrant to each
other that they have no written agreements with brokers concerning the leasing
of the Property. Each of Lessor and Lessee agrees to protect, indemnify, save
and keep harmless the other, against and from all liabilities, claims, losses,
Costs, damages and expenses, including attorneys’ fees, arising out of,
resulting from or in connection with their breach of the foregoing warranty and
representation.

Section 17.10. Waiver of Jury Trial and Certain Damages. LESSOR AND LESSEE
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR
IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE’S
USE OR OCCUPANCY OF THE PROPERTY, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, LESSOR AND LESSEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER PARTY AND ANY OF THE
OTHER PARTIES AFFILIATES, OFFICERS, DIRECTORS, MEMBERS, MANAGERS OR EMPLOYEES OR
ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED
HEREIN OR RELATED HERETO. THE WAIVER BY EACH PARTY OF ANY RIGHT IT MAY HAVE TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.

 

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Section 17.11. Securitizations. Lessee hereby acknowledges and agrees that
Lessor may, from time to time and at any time (a) advertise, issue press
releases, send direct mail or otherwise disclose information regarding the
Transaction for marketing purposes; and (b) (i) act or permit another Person to
act as sponsor, settler, transferor or depositor of, or a holder of interests
in, one or more Persons or other arrangements formed pursuant to a trust
agreement, indenture, pooling agreement, participation agreement, sale and
servicing agreement, limited liability company agreement, partnership agreement,
articles of incorporation or similar agreement or document; and (ii) permit one
or more of such Persons or arrangements to offer and sell stock, certificates,
bonds, notes, other evidences of indebtedness or securities that are directly or
indirectly secured, collateralized or otherwise backed by or represent a direct
or indirect interest in whole or in part in any of the assets, rights or
properties described in Section 14.01 of this Lease, in one or more Persons or
arrangements holding such assets, rights or properties, or any of them
(collectively, the “Securities”), whether any such Securities are privately or
publicly offered and sold, or rated or unrated (any combination of which actions
and transactions described in both clauses (i) and (ii) in this paragraph,
whether proposed or completed, are referred to in this Lease as a
“Securitization”). At no additional cost to Lessee and so long as such requests
do not unreasonably interfere with Lessee’s rights under this Lease, Lessee
shall reasonably cooperate with Lessor and any Affected Party with respect to
all reasonable requests and due diligence procedures and use reasonable efforts
to facilitate such Securitization.

In no event shall Lessor take any actions under this Section 17.11 if such
actions will unreasonably interfere with Lessee’s rights under the Lease. Lessor
shall defend, indemnify and hold harmless Lessee from and against any and all
Losses caused by, incurred or resulting directly from Lessor’s acts or omissions
with respect to the Securitization, excluding Losses suffered by Lessee arising
out of the negligence or willful misconduct of Lessee.

Section 17.12. State-Specific Provisions. The provisions and/or remedies which
are set forth on the attached Exhibit D shall be deemed a part of and included
within the terms and conditions of this Lease.

Section 17.13. Time Is of the Essence; Computation. Time is of the essence with
respect to each and every provision of this Lease. If any deadline provided
herein falls on a non-Business Day, such deadline shall be extended to the next
day that is a Business Day.

Section 17.14. Waiver and Amendment. No provision of this Lease shall be deemed
waived or amended except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion. No acceptance by
Lessor of an amount less than the Rental and other Monetary Obligations
stipulated to be due under this Lease shall be deemed to be other than a payment
on account of the earliest such Rental or other Monetary Obligations then due or
in arrears nor shall any endorsement or statement on any check or letter
accompanying any such payment be deemed a waiver of Lessor’s right to collect
any unpaid amounts or an accord and satisfaction.

Section 17.15. Successors Bound. Except as otherwise specifically provided
herein, the terms, covenants and conditions contained in this Lease shall bind
and inure to the benefit of the respective heirs, successors, executors,
administrators and assigns of each of the parties hereto.

 

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Section 17.16. Captions. Captions are used throughout this Lease for convenience
of reference only and shall not be considered in any manner in the construction
or interpretation hereof.

Section 17.17. Other Documents. Each of the parties agrees to sign such other
and further documents as may be necessary or appropriate to carry out the
intentions expressed in this Lease.

Section 17.18. Entire Agreement. This Lease and any other instruments or
agreements referred to herein, constitute the entire agreement between the
parties with respect to the subject matter hereof, and there are no other
representations, warranties or agreements except as herein provided.

Section 17.19. Forum Selection; Jurisdiction; Venue; Choice of Law. For purposes
of any action or proceeding arising out of this Lease, the parties hereto
expressly submit to the jurisdiction of all federal and state courts located in
the State of Illinois. Lessee consents that it may be served with any process or
paper by registered mail or by personal service within or without the State of
Illinois in accordance with applicable Law. Furthermore, Lessee waives and
agrees not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. Nothing contained in this Section shall limit or
restrict the right of Lessor to commence any proceeding in the federal or state
courts located in the state where the Property is located to the extent Lessor
deems such proceeding necessary or advisable to exercise remedies available
under this Lease. This Lease shall be governed by, and construed with, the Laws
of the applicable state in which the Property is located, without giving effect
to any state’s conflict of Laws principles.

Section 17.20. Counterparts. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original.

[Remainder of page intentionally left blank; signature page(s) to follow]

 

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IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of the
date first above written.

 

LESSOR: STORE MASTER FUNDING III, LLC, a Delaware limited liability company By:
 

LOGO [g525709g13m06.jpg]

Printed Name: Michael T. Bennett Title: Executive Vice President - Operations

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LESSEE:

U.S. AUTO PARTS NETWORK, INC., a

Delaware corporation

By:  

LOGO [g525709g77l44.jpg]

Printed Name: Shane Evangelist Title: Chief Executive Officer

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EXHIBITS

 

Exhibit A:    Defined Terms Exhibit B:    Legal Description and Street Address
of Property Exhibit C:    Authorization Agreement – Pre-Arranged Payments
Exhibit D:    Approved Acord Forms

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EXHIBIT A

DEFINED TERMS

The following terms shall have the following meanings for all purposes of this
Lease:

“Additional Rental” has the meaning set forth in Section 4.03.

“Adjustment Date” has the meaning set forth in Section 1.07.

“Affected Party” means each direct or indirect participant or investor in a
proposed or completed Securitization, including, without limitation, any
prospective owner, any rating agency or any party to any agreement executed in
connection with the Securitization.

“Affiliate” means any Person which directly or indirectly controls, is under
common control with or is controlled by any other Person. For purposes of this
definition, “controls,” “under common control with,” and “controlled by” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.

“Anti-Money Laundering Laws” means all applicable Laws, regulations and
government guidance on the prevention and detection of money laundering,
including, without limitation, (a) 18 U.S.C. §§ 1956 and 1957; and (b) the Bank
Secrecy Act, 31 U.S.C. §§ 5311 et seq., and its implementing regulations, 31 CFR
Part 103.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Sec. 101
et seq., as amended.

“Base Annual Rental” means $853,125.

“Base Monthly Rental” means an amount equal to 1/12 of the applicable Base
Annual Rental.

“Business Day” means a day on which banks located in Scottsdale, Arizona are not
required or authorized to remain closed.

“Casualty” means any loss of or damage to any property included within or
related to the Property or arising from an adjoining property caused by an Act
of God, fire, flood or other catastrophe.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from
time to time.

“Condemnation” means a Taking and/or a Requisition.

“Costs” means all reasonable costs and expenses incurred by a Person, including,
without limitation, reasonable attorneys’ fees and expenses, court costs, expert
witness fees, costs of tests and analyses, travel and accommodation expenses,
deposition and trial transcripts, copies and other similar costs and fees.

 

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“Default Rate” means 18% per annum or the highest rate permitted by Law,
whichever is less.

“Effective Date” has the meaning set forth in the introductory paragraph of this
Lease.

“Environmental Laws” means federal, state and local Laws, ordinances, common law
requirements and regulations and standards, rules, policies and other
governmental requirements, administrative rulings and court judgments and
decrees having the effect of Law in effect now or in the future and including
all amendments, that relate to Hazardous Materials, Regulated Substances, USTs,
and/or the protection of human health or the environment, or relating to
liability for or Costs of Remediation or prevention of Releases, and apply to
Lessee and/or the Property.

“Environmental Liens” has the meaning set forth in Section 8.04(a)(ii).

“Event of Default” has the meaning set forth in Section 12.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Expiration Date” has the meaning set forth in Section 3.01.

“Force Majeure Event” has the meaning set forth in Section 17.01.

“GAAP” means generally accepted accounting principles, consistently applied from
period to period.

“Governmental Authority” means any governmental authority, agency, department,
commission, bureau, board, instrumentality, court or quasi-governmental
authority of the United States, any state or any political subdivision thereof
with authority to adopt, modify, amend, interpret, give effect to or enforce any
federal, state and local Laws, statutes, ordinances, rules or regulations,
including common law, or to issue court orders.

“Hazardous Materials” includes: (a) oil, petroleum products, flammable
substances, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes or substances or any other materials, contaminants or pollutants,
the presence of which causes the Property to be in violation of any local, state
or federal Law or regulation, (including without limitation, any Environmental
Law), or are defined as or included in the definition of “hazardous substances,”
“hazardous wastes,” “hazardous materials,” “toxic substances,” “contaminants,”
“pollutants,” or words of similar import under any applicable local, state or
federal Law or under the regulations adopted, orders issued, or publications
promulgated pursuant thereto, including, but not limited to: (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. § 9601, et seq.; (ii) the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. § 5101, et seq.; (iii) the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. § 6901, et seq.; and (iv) regulations
adopted and publications promulgated pursuant to the aforesaid Laws;
(b) asbestos in any form which is friable, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels

 

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of polychlorinated biphenyls in excess of fifty (50) parts per million;
(c) underground storage tanks; and (d) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority.

“Indemnified Parties” means Lessor and its members, managers, officers,
directors, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns, including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of the assets and
business of Lessor.

“Initial Term” has the meaning set forth in Section 3.01.

“Insolvency Event” means (a) a Person’s (i) admitting in writing its inability
to pay its debts generally; or (ii) making a general assignment for the benefit
of creditors; (b) any proceeding being instituted by or against any Person
(i) seeking to adjudicate it bankrupt or insolvent; (ii) seeking liquidation,
dissolution, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any Law relating to bankruptcy,
insolvency, or reorganization or relief of debtors; or (iii) seeking the entry
of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property, and in the
case of any such proceeding instituted against any Person, either such
proceeding shall remain undismissed for a period of one hundred twenty
(120) days or any of the actions sought in such proceeding shall occur; or
(c) any Person taking any corporate action to authorize any of the actions set
forth above in this definition.

“Insurance Premiums” shall have the meaning in Section 6.04.

“Law(s)” means any constitution, statute, rule of law, code, ordinance, order,
judgment, decree, injunction, rule, regulation, policy, requirement or
administrative or judicial determination, even if unforeseen or extraordinary,
of every duly constituted Governmental Authority, court or agency, now or
hereafter enacted or in effect.

“Lease Term” shall have the meaning described in Section 3.01.

“Legal Requirements” means the requirements of all present and future Laws
(including, without limitation, Environmental Laws and Laws relating to
accessibility to, usability by, and discrimination against, disabled
individuals), all judicial and administrative interpretations thereof, including
any judicial order, consent, decree or judgment, and all covenants, restrictions
and conditions now or hereafter of record which may be applicable to the
Property or Lessee’s use thereof, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or restoration of the
Property, even if compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment of the
Property.

“Lender” means any lender in connection with any loan secured by Lessor’s
interest in the Property, and any servicer of any loan secured by Lessor’s
interest in the Property.

“Lessee” has the meaning described in the introductory paragraph.

 

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“Lessee’s Property” has the meaning described in Section 16.01.

“Lessor Entity” or “Lessor Entities” means individually or collectively, as the
context may require, Lessor and all Affiliates of Lessor.

“Lessor” has the meaning described in the introductory paragraph.

“Lessor’s Investment” means the sum of (a) the gross purchase price paid
(including without limitation, the outstanding balance of any existing mortgage
debt assumed) for the Property by Lessor, plus (b) the closing costs and
expenses incurred by Lessor with respect to the purchase of the Property, plus
(c) ten percent (10%).

“Lessor’s Representatives” has the meaning described in Section 9.02.

“Losses” means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, Costs, diminutions in value, fines, penalties, interest,
charges, fees, judgments, awards, amounts paid in settlement and damages of
whatever kind or nature, inclusive of bodily injury and property damage to third
parties (including, without limitation, attorneys’ fees and other Costs of
defense).

“Material Adverse Effect” means a material adverse effect on (a) the Property,
including, without limitation, the operation of the Property as a Permitted
Facility and/or the value of the Property; (b) the contemplated business,
condition, worth or operations of Lessee; (c) Lessee’s ability to perform its
obligations under this Lease; or (d) Lessor’s interests in the Property, this
Lease or the other Transaction Documents.

“Monetary Obligations” means all Rental and all other sums payable or
reimbursable by Lessee under this Lease to Lessor, to any third party on behalf
of Lessor, or to any Indemnified Party.

“Mortgages” means, collectively, the mortgages, deeds of trust or deeds to
secure debt, assignments of rents and leases, security agreements and fixture
filings executed by Lessor for the benefit of Lender with respect to the
Property, as such instruments may be amended, modified, restated or supplemented
from time to time and any and all replacements or substitutions.

“Net Award” means (a) the entire award payable with respect to the Property by
reason of a Condemnation whether pursuant to a judgment or by agreement or
otherwise; or (b) the entire proceeds of any insurance required under
Section 6.03 payable with respect to a Property, as the case may be, and in
either case, less any Costs incurred by Lessor in collecting such award or
proceeds.

“OFAC Laws” means Executive Order 13224 issued by the President of the United
States, and all regulations promulgated thereunder, including, without
limitation, the Terrorism Sanctions Regulations (31 CFR Part 595), the Terrorism
List Governments Sanctions Regulations (31 CFR Part 596), the Foreign Terrorist
Organizations Sanctions Regulations (31 CFR Part 597), and the Cuban Assets
Control Regulations (31 CFR Part 515), and all other present and future federal,
state and local Laws, ordinances, regulations, policies, lists (including,
without limitation, the Specially Designated Nationals and Blocked Persons List)
and

 

A-4

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any other requirements of any Governmental Authority (including without
limitation, the U.S. Department of the Treasury Office of Foreign Assets
Control) addressing, relating to, or attempting to eliminate, terrorist acts and
acts of war, each as supplemented, amended or modified from time to time after
the Effective Date, and the present and future rules, regulations and guidance
documents promulgated under any of the foregoing, or under similar Laws,
ordinances, regulations, policies or requirements of other states or localities.

“Partial Condemnation” has the meaning set forth in Section 11.03.

“Permitted Amounts” shall mean, with respect to any given level of Hazardous
Materials or Regulated Substances, that level or quantity or concentration of
Hazardous Materials or Regulated Substances in any form or combination of forms
which does not constitute a violation of any Environmental Laws.

“Permitted Facility” means a means an office, retail and warehouse facility for
storage, sale, and distribution of automotive parts, accessories, and related
items, as well as all related purposes such as ingress, egress and parking, and
uses incidental thereto.

“Person” means any individual, partnership, corporation, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.

“Price Index” means the Consumer Price Index which is designated for the
applicable month of determination as the United States City Average for All
Urban Consumers, All Items, Not Seasonally Adjusted, with a base period equaling
100 in 1982 - 1984, as published by the United States Department of Labor’s
Bureau of Labor Statistics or any successor agency. In the event that the Price
Index ceases to be published, its successor index measuring cost of living as
published by the same Governmental Authority which published the Price Index
shall be substituted and any necessary reasonable adjustments shall be made by
Lessor and Lessee in order to carry out the intent of Section 4.02. In the event
there is no successor index measuring cost of living, Lessor shall reasonably
select an alternative price index measuring cost of living that will constitute
a reasonable substitute for the Price Index.

“Property” means that parcel of real estate legally described on Exhibit B
attached hereto, all rights, privileges, and appurtenances associated therewith,
and all buildings, fixtures and other improvements now or hereafter located on
such real estate (whether or not affixed to such real estate), except that in no
event shall Property be deemed to include Lessee’s Property.

“Purchase and Sale Agreement” means that certain Purchase and Sale Agreement
dated the same date hereof between Lessor and Seller with respect to the
Property.

“Real Estate Taxes” has the meaning set forth in Section 6.04.

“Regulated Substances” means “petroleum” and “petroleum-based substances” or any
similar terms described or defined in any of the Environmental Laws and any
applicable federal, state, county or local Laws applicable to or regulating
USTs.

“REIT” means a real estate investment trust as defined under Section 856 of the
Code.

 

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“Release” means any presence, release, deposit, discharge, emission, leaking,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Materials, Regulated
Substances or USTs.

“Remediation” means any response, remedial, removal, or corrective action, any
activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any
Hazardous Materials, Regulated Substances or USTs, any actions to prevent, cure
or mitigate any Release, any action to comply with any Environmental Laws or
with any permits issued pursuant thereto, any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, laboratory or other
analysis, or any evaluation relating to any Hazardous Materials, Regulated
Substances or USTs.

“Rental” means, collectively, the Base Annual Rental and the Additional Rental.

“Rental Adjustment” means an amount equal to the lesser of (a) 1.5% of the Base
Annual Rental in effect immediately prior to the applicable Adjustment Date, or
(b) 1.25 multiplied by the product of (i) the percentage change between the
Price Index for the month which is two months prior to the Effective Date or the
Price Index used for the immediately preceding Adjustment Date, as applicable,
and the Price Index for the month which is two months prior to the applicable
Adjustment Date; and (ii) the then current Base Annual Rental.

“Requisition” means any temporary requisition or confiscation of the use or
occupancy of the Property by any Governmental Authority, civil or military,
whether pursuant to an agreement with such Governmental Authority in settlement
of or under threat of any such requisition or confiscation, or otherwise.

“Reserve” shall have the meaning in Section 6.04.

“Securities” has the meaning set forth in Section 17.11.

“Securities Act” means of the Securities Act of 1933, as amended.

“Securitization” has the meaning set forth in Section 17.11.

“Seller” means Whitney Automotive Group, Inc., a Delaware corporation.

“SNDA” means a subordination, nondisturbance and attornment agreement.

“Successor Lessor” has the meaning set forth in Section 13.04.

“Taking” means (a) any taking or damaging of all or a portion of the Property
(i) in or by condemnation or other eminent domain proceedings pursuant to any
Law, general or special; (ii) by reason of any agreement with any condemnor in
settlement of or under threat of any such condemnation or other eminent domain
proceeding; or (iii) by any other means; or (b) any de facto condemnation. The
Taking shall be considered to have taken place as of the later of the date
actual physical possession is taken by the condemnor, or the date on which the
right to compensation and damages accrues under the Law applicable to the
Property.

“Temporary Taking” has the meaning set forth in Section 11.04.

 

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“Threatened Release” means a substantial likelihood of a Release which requires
action to prevent or mitigate damage to the soil, surface waters, groundwaters,
land, stream sediments, surface or subsurface strata, ambient air or any other
environmental medium comprising or surrounding any Property which may result
from such Release.

“Total Condemnation” has the meaning set forth in Section 11.02.

“Transaction” has the meaning set forth in Section 14.01.

“Transaction Documents” means this Lease, the Purchase and Sale Agreement and
all documents related thereto.

“U.S. Publicly Traded Entity” means an entity whose securities are listed on a
national securities exchange or quoted on an automated quotation system in the
United States or a wholly-owned subsidiary of such an entity.

“USTs” means any one or combination of tanks and associated product piping
systems used in connection with storage, dispensing and general use of Regulated
Substances.

 

A-7

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EXHIBIT B

LEGAL DESCRIPTION AND STREET ADDRESS OF THE PROPERTY

Street Address:

 

Address

 

City

 

State

  

Zip

761-765 Progress Parkway

  LaSalle   Illinois    61301

Legal Description:

LOT 1 IN CANNON INDUSTRIAL PARK FIRST ADDITION, LOCATED IN THAT PART OF THE
NORTH HALF OF SECTION 5, TOWNSHIP 33 NORTH, RANGE 2, EAST OF THE THIRD PRINCIPAL
MERIDIAN, SITUATED IN LASALLE COUNTY, ILLINOIS, EXCEPT THAT PART CONVEYED TO THE
PEOPLE OF THE STATE OF ILLINOIS, DEPARTMENT OF TRANSPORTATION BY DEED RECORDED
JUNE 19, 2008 AS DOCUMENT 2008-13925, DESCRIBED AS FOLLOWS:

A PART OF LOT 1 IN CANNON INDUSTRIAL PARK FIRST ADDITION, A SUBDIVISION OF PART
OF THE NORTH HALF OF SECTION 5, TOWNSHIP 33 NORTH, RANGE 2 EAST OF THE THIRD
PRINCIPAL MERIDIAN, RECORDED MAY 14, 1996 AS DOCUMENT NUMBER 96-07841 IN THE
RECORDER’S OFFICE OF LASALLE COUNTY, STATE OF ILLINOIS, DESCRIBED AS FOLLOWS,
USING BEARINGS BASED ON AN ASSUMED DATUM:

COMMENCING AT AN IRON PIN AT THE SOUTHEAST CORNER OF LOT 1 IN SAID SUBDIVISION;
THENCE NORTH 0 DEGREES 46 MINUTES 12 SECONDS EAST, 1,204.22 FEET (RECORDED
1,204.44 FEET) ON THE EAST LINE OF SAID LOT 1 TO THE NORTHEAST CORNER THEREOF,
BEING ALSO THE SOUTHERLY RIGHT OF WAY LINE OF FAI ROUTE 80 AND THE POINT OF
BEGINNING; THENCE SOUTH 0 DEGREES 46 MINUTES 12 SECONDS WEST, 17.59 FEET ON SAID
EAST LINE OF SAID LOT 1; THENCE NORTH 89 DEGREES 43 MINUTES 58 SECONDS WEST,
223.13 FEET, TO THE SOUTHERLY RIGHT OF WAY LINE OF FAI ROUTE 80; THENCE EASTERLY
ON SAID RIGHT OF WAY LINE, 222.14 FEET ON A CURVE TO THE LEFT, HAVING A RADIUS
OF 15,048.72 FEET, WHOSE CHORD BEARS SOUTH 88 DEGREES 15 MINUTES 13 SECONDS
EAST, 222.13 FEET, TO THE POINT OF BEGINNING, SITUATED IN LASALLE COUNTY,
ILLINOIS.

 

B-1

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EXHIBIT C

FORM OF

AUTHORIZATION AGREEMENT – PRE-ARRANGED PAYMENTS

 

AUTHORIZATION AGREEMENT PRE-ARRANGED PAYMENTS

Reference Number             

I (We) (Tenant) authorize [            ], (Servicer) to initiate entries
identified below as required. Tenant further authorizes the bank below to post
such entries to the identified checking account beginning with the payment draft
date of             /            /            . A minimum of thirty (30) days
advance notice is required to process first payment by ACH.

Bank Name  

 

  Branch  

 

City  

 

    State  

 

  Zip  

 

 

—  —  —  —  —  —  —   —  —  —  —                —  —  —  —  —  
—  —  —  —  —  —  —  —  —  —  —

***Transit - ABA                                          
                                   Account Number Information

       

ACCOUNT TYPE*** Please specify checking or savings account (C/S)             

 

       

 

PLEASE FILL IN BANK INFORMATION CAREFULLY

     

ATTACH VOIDED CHECK FOR ACCOUNT VERIFICATION

 

       

Automatic debits will be made on the payment due date established by the
relevant lease documents, or the next subsequent business day if such date is
not a business day. This authority may be terminated upon thirty days prior
written notification from the Tenant to the servicer. Tenant has the right to
stop payment of any entry by notification to the bank prior to the scheduled
debit date. If an erroneous entry is initiated by the servicer to the Tenant’s
account, Tenant shall have the right to have the amount of such entry reversed
by the bank. To initiate a reversal, the Tenant must notify the bank in writing
that an error has occurred and request a reversal. Such notice must be within 15
calendar days after the Tenant receives the statement of account or other
written notice from the bank identifying the error. Tenant hereby authorizes the
servicer to impose a $60.00 returned item processing fee, subject to change, via
ACH debit against the above-referenced account of the Tenant if a non sufficient
funds or stop payment item is charged against the servicer’s account.

 

    Tenant   Tax Identification     Name(s)                 
                                                                              
Number                                          
                                                         Date                  
                         Print Authorized
Name                                        
                                         
                                         
                                                      Authorized Signature
                                        
                                         
                                         
                                                          Print Authorized Name
                                        
                                         
                                         
                                                      Authorized Signature
                                        
                                         
                                         
                                                            Contact Phone
Number                                                                    Fax
Number                                        
                                               

Email Address:                                         
                                         
                                         
                                                               

 

 

Return Original to:    [                                         ]    Attn:
[                                ]    [                             
               ]    [                                             ]    Fax
Number:[                            ]

 

C-1

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EXHIBIT D

APPROVED ACORD FORMS

(see attached)

 

D-1