EXHIBIT 10.59
 

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
Master Lease Agreement
 
Wal-Mart Stores East, LP, individually and only as to Stores (as defined in
Section 1.1K of this Master Lease) owned, leased, or operated in AL, CT, DC, DE,
FL, GA, IN, KY, ME, MD, MA, MI, MS, MO, NH, NJ, NM, NY, NC, OH, OK, PA, RI, SC,
TN, VT, VA, WI, WV; Wal-Mart Stores, Inc., individually and only as  to Stores
owned or leased in AK, AR, AZ, CA, CO, HI, ID, IL, IA, KS, MN, MT, NE, NV, ND,
OR, SD, UT, WA, WY; Wal-Mart Louisiana, LLC, individually and only as  to Stores
owned or leased in Louisiana; and Wal-Mart Stores Texas, LP, individually and
only as  to Stores owned or leased in Texas (each referred to as “Landlord” for
purposes of this Master Lease Agreement as it applies to the Store) and Portrait
Corporation of America, Inc. (“Tenant”) enter into this Master Lease Agreement
effective the 8th day of June 2007.
 
WHEREAS, Landlord operates discount retail stores nationwide;
 
WHEREAS, Tenant operates business(es) offering photography products and services
(described more fully in Appendix-1) and desires to lease space within one or
more Stores from which to operate such business(es); and
 
WHEREAS, Landlord desires to lease space in one or more of its Stores to Tenant,
so Tenant may operate such business(es) in the Store.
 
NOW, THEREFORE, in consideration of the mutual promises and premises set forth
above and below, the receipt and sufficiency of which the parties hereby
acknowledge, the parties hereby agree as follows:
 
Article I
General Provisions
 
1.1
Definitions.

 
A.     “Attachment A” means an attachment to this Master Lease Agreement,
incorporated into this Master Lease Agreement when fully signed by Tenant and by
the particular Landlord with authority to lease the property identified in the
applicable Attachment A, that identifies the Store in which the Leased Premises
is located; the anticipated Delivery Window, as defined in Section 1.1F, below;
the anticipated Delivery Date, as defined in Section 1.1E, below; the
anticipated Rent Commencement Date, as defined in Section 4.1, below; and the
Extension, as described in the applicable Attachment A.
 
B.     “Appendix-1” means an appendix to this Master Lease Agreement,
incorporated into this Master Lease Agreement when fully signed by Tenant and
Landlord, which provides obligations of Landlord and Tenant specific to Tenant’s
Permitted Uses (as designated in Appendix-1) contemplated by Landlord and Tenant
at the time this Master Lease Agreement was entered into.
 
C.      “Commencement Notice” means an attachment to this Master Lease
Agreement, incorporated into this Master Lease Agreement at the time of delivery
by Landlord of the Commencement Notice to Tenant in accordance with Section
19.10, below, which identifies the actual Rent Commencement Date and the actual
Delivery Date, as each term is defined below.
 
D.      “Common Area” means the public access areas of the Store and surrounding
land leased or owned by Landlord on which the Store is located including, but
not limited to, the parking areas,
 

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
driveways, sidewalks, entrances, and exits in the Store and between the Store
and the Leased Premises.
 
E.      “Delivery Date” means the date on which Landlord delivers possession of
the applicable Leased Premises to Tenant.
 
F.     “Delivery Window” means the span of time in which Landlord may deliver
possession of the Leased Premises to Tenant.
 
G.      “Due Date” means the first (1st) calendar day of each month, unless this
day falls on New Year’s Day, Memorial Day, Independence Day (US), Labor Day,
Thanksgiving, or Christmas, in which case the Due Date means the following
business day.
 
H.     “Leased Premises” means the area of a Store leased to the Tenant by
Landlord subject to the terms and conditions of this Agreement.
 
I.      “Master Lease” means this Master Lease Agreement and any amendment,
appendix, attachment, and exhibit attached to and incorporated into this Master
Lease Agreement.
 
J.      “Rent” means the Base Rent defined in Section 4.2, below, and described
in the applicable Attachment A, plus any additional or other rent, interest,
tax, or other sum this Master Lease obligates Tenant to pay Landlord.
 
K.     “Store” or “Stores” means the “Wal-Mart” retail store operated by
Landlord.
 
L.      “Sublessee” means the franchisee, licensee, concessionaire, or other
party, of Tenant which, pursuant to a separate agreement between it and Tenant,
is operating the Leased Premises as part of a marketing plan or system
prescribed by Tenant that is substantially associated with Tenant’s trademark,
service mark, trade name, logotype, advertising, or other commercial symbol
designated by Tenant and is subject to the terms and conditions of this Master
Lease.
 
M.    “White Box” means the interior condition of the Leased Premises with
sprinklers, sheetrock walls, ceiling grid, HVAC installed, 100 amp service to
the Leased Premises, security gate, acoustic ceiling tile, lighting and
electrical outlets, and access to water and sewer.
 
1.2
Landlord’s Entry into the Agreement.

 
A.     Each Landlord enters into this Master Lease severally and solely as to
the Store it operates and in which the Leased Premises is located and without
any obligation with respect to any other Store.  Accordingly, only the
respective Landlord that operates the Store in which such Leased Premises is
located may execute, for a Leased Premises, an Attachment A.
 
B.     If, during the term of this Master Lease, it is determined that the use
of the Leased Premises is Restricted, as defined in the following sentence,
Landlord may remove/cancel the applicable Attachment A from the Master Lease and
the applicable Attachment A will be null and void without further action by
Landlord or Tenant.  Neither Landlord nor Tenant will be liable to the other for
any damages, loss, or liability in connection with the cancellation of this
Master Lease as to the affected Leased Premises.  For the purpose of this
paragraph, “Restriction” means any covenant, condition, law, regulation,
restriction, rule, or other matter binding to the Leased Premises, Landlord, or
Tenant or any combination thereof, which acts to prohibit or materially restrict
the use of the Leased Premises from any of the matters contemplated by this
Master Lease
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
including, without limitation, that ability of Landlord to lease to Tenant or
Tenant’s ability to operate its type of business in the Leased Premises.  By way
of example, and not of limitation, if Landlord is required to obtain the consent
of a third party prior to leasing space to the Tenant in a particular Store, the
requirement of consent is a Restriction.
 
1.3
Landlord’s Overlease.  If Landlord is itself a lessee of a Store in which a
Leased Premises is located, so that this Master Lease as to the particular
Leased Premises is actually a sublease, Tenant accepts this Master Lease subject
to all the terms and conditions of the overlease under which Landlord holds the
Leased Premises as lessee.  Tenant covenants that it will do no act or thing
that would constitute a violation of the overlease.

 
1.4
Granting Language.  Upon the full execution of the applicable Attachment A,
Landlord leases to Tenant and Tenant rents from Landlord (subject and
subordinate to any mortgage, deed or trust, or other lien presently existing or
hereafter placed upon the applicable Leased Premises, the Common Areas, the
Store, or any combination thereof) the Leased Premises identified in the
applicable Attachment A to have and to hold subject to the terms of this
Agreement, by which the parties intend to be legally bound as to the applicable
Leased Premises upon the execution by each appropriate party of both this Master
Lease and the applicable Attachment A.

 
Article II
Construction and Acceptance of the Leased Premises
 
2.1
Landlord’s Obligation to Deliver Possession on the Delivery Date.

 
A.     Landlord shall use commercially reasonable efforts to deliver the
applicable Leased Premises to Tenant in the condition and during the Delivery
Window specified in the applicable Attachment A.
 
(1)     Unless otherwise agreed to in the applicable Attachment A, Landlord
shall notify Tenant, in writing [***], of the status of the construction of the
applicable Leased Premises and of the anticipated Delivery Date within the
Delivery Window on which Landlord estimates it will deliver possession of the
applicable Leased Premises to Tenant.
 
(2)     Landlord, at any time prior to notifying Tenant of the anticipated
Delivery Date, [***].
 
(3)     Landlord may revise the anticipated Delivery Date at any time after
Landlord notifies Tenant of the anticipated Delivery Date, in accordance with
this Article II, but in no event may Landlord revise the anticipated Delivery
Date with [***].
 
B.     [***].  If Landlord and Tenant agree that delivery of possession is
unfeasible within a commercially reasonable amount of time after the Delivery
Window specified on the applicable Attachment A, the parties, without liability,
may terminate this Master Lease as to the applicable Leased Premises.
 
2.2
Tenant’s Right of Entry.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
A.     Prior to the Delivery Date, Tenant may enter the Leased Premises only to
inspect and measure the Leased Premises to ready the Leased Premises for opening
on the Rent Commencement Date, as described in Section 4.1, below, and as
designated in the applicable Attachment A.
 
B.     Tenant may enter the Leased Premises in accordance with the preceding
paragraph only if:
 
(1)     Landlord and Tenant have previously signed an Attachment A for the
Leased Premises,
 
(2)     Tenant does not interfere with Landlord’s performance of its obligations
under Section 2.1, above, or with the transaction of Landlord’s business or the
business of any of Landlord’s other Tenants, and
 
(3)     The Leased Premises is not currently in the possession of another
tenant.
 
C.     If any work or other action done by, or on behalf of, Tenant results in a
stoppage of Landlord’s work, Tenant will immediately stop work until the parties
mutually agree Tenant’s work can re-commence without materially interfering with
Landlord’s obligations under Section 2.1, above, which time may not be any later
than the Delivery Date.  Any failure by Tenant to comply with the provisions of
this Section 2.2C is a material breach.
 
2.3
Acceptance of the Leased Premises.

 
A.     Landlord makes no representations, covenants, or warranties of any kind
or character whatsoever, express or implied, with respect to:
 
(1)     The quality, condition, or [***] of the applicable Leased Premises;
 
(2)     [***;]
 
(3)     [***;]
 
(4)     The habitability, merchantability, or fitness for a particular purpose
of the applicable Leased Premises;
 
(5)     [***]; or
 
(6)     [***.]
 
B.     Tenant shall accept possession of the applicable Leased Premises when
delivered by Landlord, even if Landlord is unable to deliver possession [***] or
on the anticipated Delivery Date, unless this Master Lease as to the applicable
Leased Premises has been terminated according to Section 2.1 B, above.
 
C.     TENANT WAIVES ALL RIGHTS WITH RESPECT TO ANY DEFECT IN THE LEASED
PREMISES, AND IF TENANT FAILS TO NOTIFY LANDLORD OF ANY DEFECT AT LEAST [***],
TENANT CONCLUSIVELY ACCEPTS THE LEASED PREMISES “AS IS” AND WITH ALL FAULTS.
 
D.     TENANT WAIVES ALL RIGHTS AGAINST LANDLORD WITH RESPECT TO ANY LIMITATION
OR RESTRICTION ON ITS USE OF THE LEASED PREMISES AS A RESULT OF
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

ANY APPLICABLE LAW, RULE, OR REGULATION INCLUDING, WITHOUT LIMITATION, LAND USE
RESTRICTIONS.
 
2.4
Tenant’s Obligations to Prepare the Leased Premises to Open for Business.

 
A.     Tenant shall open the Leased Premises on the Rent Commencement Date (as
defined in Section 4.1, below, and designated on the applicable Attachment
A).  If Tenant fails to open the applicable Leased Premises on the Rent
Commencement Date and the failure is not caused by Landlord’s material
interference or default under this Master Lease, Landlord may charge Tenant
liquidated damages of [***] and additional liquidated damages of [***] a day for
each day, including the Rent Commencement Date, which the Leased Premises
remains unopened as required by the preceding sentence. By way of example, and
not as a limitation thereof, material interference may occur if Landlord fails
to deliver possession to Tenant of the applicable Leased Premises with
sufficient time before the Rent Commencement Date for Tenant to fulfill its
obligations under this Article II.   Tenant will pay any liquidated damages it
owes to Landlord within thirty (30) days after Tenant receives an invoice from
Landlord for the liquidated damages.  Landlord and Tenant acknowledge that it
would be impracticable to fix the actual damages suffered by Landlord as a
result of Tenant’s failure to open the Leased Premises on the Rent Commencement
Date, according to this paragraph, and that the amount of liquidated damages
described in the preceding sentence represents fair and reasonable compensation
to Landlord for this failure.  If the Leased Premises remains unopened for more
than three (3) consecutive days following the Rent Commencement Date, Tenant
will materially breach this Master Lease.
 
B.     Tenant shall complete all Improvements within the Leased Premises in
order to open the Leased Premises on the applicable Rent Commencement Date.  For
the purposes of this Master Lease, “Improvements” means any addition,
alteration, construction, finish, or improvement to the Leased Premises; any
attachment of a permanent fixture, permanent furniture, or permanent equipment;
and includes, but is not limited to, completing the interior walls,
partitioning(s), floor covering, ceiling work, utilities, painting, finish work,
restroom facilities, signage (pursuant to Section 2.6, below), and any other
thing necessary.
 
C.     Tenant shall submit to Landlord and obtain Landlord’s approval of the
floor plans and layouts of the Leased Premises including dimensions, elevations,
Improvements, intended colors, and Trade Fixtures (as defined in Section
2.4D(1), below).  Tenant shall obtain Landlord’s approval of the floor plans and
layouts of the Leased Premises prior to seeking and obtaining any permits,
licenses, certifications, or other documents necessary to complete the
Improvements in the Leased Premises and install Trade Fixtures in the Leased
Premises in accordance with this Agreement.  All Trade Fixtures and Improvements
must accord with the plans and specifications previously approved by Landlord
and must be of high quality materials and workmanship, comparable to or better
than the tenant storefront, Improvements, and Trade Fixtures used by other
retailers in the vicinity of the Store and, specifically, used at Tenant’s most
recent prototype. Tenant may not vary from or add to the previously approved
plans or specifications without Landlord’s prior, written consent, which
Landlord may not unreasonably withhold or delay.  Landlord’s approval of
Tenant’s plans and specifications is solely based on Landlord’s
review.  Landlord's approval of the plans and specifications does not represent
government approval or suitability of the plans and specifications for the
intended purposes.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
(1)      Prior to any roof penetrations caused by Tenant’s Improvements, Tenant
shall obtain from Landlord’s Leasing Operations Department the contact
information for the contractor approved to work on Landlord’s roof.
 
(2)     If Tenant’s roof-top heating, ventilating, and air conditioning unit, or
other rooftop equipment, requires steel supports in addition to the steel
framing erected by Landlord, then Tenant will pay the cost of labor and
materials for the installation thereof.  Mechanical equipment on the roof will
be placed within the area designated on Landlord’s structural
drawings.  Tenant’s plans and specifications of the proposed mechanical
equipment must be submitted to Landlord for approval.
 
(3)     Tenant will provide screening or other type of cover for such mechanical
equipment to prevent visibility by the public and subject to approval of
landlord and the local governmental authorities.  If Landlord or any
governmental authorities requires a project standard equipment screen, Tenant
will use and pay for same.
 
D.     Tenant shall:
 
(1)     Install any attached or unattached, moveable or non-moveable fixtures,
furniture, or equipment unique to Tenant’s business, the installation and
removal of which requires no cutting, drilling, or other defacing of the Leased
Premises (“Trade Fixtures”).
 
(2)     Conduct the Improvements and install the Trade Fixtures in a good and
workmanlike manner in accordance with all applicable laws and in accordance with
obligations and requirements of this Master Lease including, but not limited to,
insurance, licensing, and regulatory compliance requirements.
 
(3)     For existing locations, erect a dust wall of plywood or sheetrock, but
not plastic or canvas, across the entrance to the Store from the Leased Premises
prior to commencing Improvements and maintain the same in place throughout
construction.
 
(4)     Conduct Improvements and install Trade Fixtures without interfering with
other construction in progress at the Store or with the transaction of
Landlord’s business or the business of any of Landlord’s other lessees.
 
E.     If Landlord requests, Tenant will secure a bond or other security
satisfactory to Landlord against any loss, liability, or damage to persons or
property related to the Improvements.
 
2.5
Tenant’s Contractors.  Tenant’s contractors must be licensed, carry worker’s
compensation coverage as required by law, and comply with all applicable laws
including, but not limited to, obtaining any required permit, license, or other
documentation necessary to perform the construction work in connection with this
Master Lease.  At Landlord’s request, Tenant will provide Landlord with a list
of all contractors and subcontractors Tenant is using.

 
2.6
Signs.

 
A.     Tenant may not install on the exterior of the Store any sign, light,
decoration, painting, awning, canopy, or any other like item, (“Signs”) unless
otherwise provided in Appendix-1.
 
B.     Tenant may, with the prior, written consent of Landlord and in accordance
with Section 2.6C, install a Sign on the exterior bulkhead of the applicable
Leased Premises, which is inside the
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

 Store in which a Leased Premises is located, with Tenant’s trade name
identified in Appendix-1 to this Master Lease and Tenant’s logo.
 
C.     Tenant may not install any Sign containing images or words that may
offend the ordinary, reasonable person including, but not limited to, words or
images that are cloaked in other words or images, phrases with double meanings,
and words or images commonly considered to be vulgar, swear, or curse words.  If
Tenant’s business or trade name violates this provision, Tenant may not use the
name in any signage in or around the Leased Premises.
 
2.7
Landlord’s Right of Re-Entry.  After the Delivery Date and before the Rent
Commencement Date designated on the applicable Attachment A, Landlord may
re-enter the applicable Leased Premises to continue any portion of Landlord’s
work not yet complete.  During this period of re-entry, Landlord may not
unreasonably interfere with any work required under Section 2.4 being performed
by Tenant or on behalf of Tenant.

 
2.8
Certificate of Occupancy.  Tenant shall fax a copy of the Certificate of
Occupancy within two (2) calendar days after receiving it to Landlord’s Project
Management at [***].

 
Article III
Binding Effect of the Attachment A, Commencement Notice
Master Lease Term and Extension
 
3.1
Effective Date of Master Lease.  This Master Lease is effective and binds
Landlord and Tenant as of the Effective Date entered above.  This Master Lease
terminates in its entirety upon the termination, for whatever reason, of every
Attachment A signed by Landlord and Tenant that attaches to this Master Lease
and which is incorporated into this Master Lease.

 
3.2
Binding Effect of the Attachment A.  This Master Lease governs each Leased
Premises for which Landlord and Tenant execute an Attachment A.  Once signed by
both Landlord and Tenant, each Attachment A attaches to and incorporates into
this Master Lease binding both Landlord and Tenant to the terms and conditions
in both this Master Lease and the applicable Attachment A as to the applicable
Leased Premises.

 
3.3
Commencement Notice.  Landlord will deliver the Commencement Notice to Tenant,
no sooner than [***] days following the actual Rent Commencement Date of the
applicable Leased Premises.  The Commencement Notice is for informational
purposes only and does not modify the terms of this Master Lease.  If Tenant
does not receive the Commencement Notice within that time, Tenant will notify
Landlord, in writing or verbally.  Any delay in delivery of the Commencement
Notice is not a breach of this Master Lease.

 
3.4
Lease Term of a Specific Leased Premise.  The Lease Term for each Leased
Premises commences on the day on which the applicable Landlord and Tenant each
sign the Attachment A for that Leased Premises and continues until the
Expiration Date.  For the purpose of this Master Lease, “Expiration Date” means
11:59 pm (local time as to the applicable Leased Premises) on the last day of
the month in which the anniversary date of the Rent Commencement Date,
designated in the applicable Attachment A, falls.  If the anniversary date falls
between July 1st and December 31st of a given year, and then the Expiration Date
extends to 11:59 pm (local time as to the applicable Leased Premises) on January
31st of the following year.  In case of cancellation or termination, the
Expiration Date becomes the date on which the lease is cancelled or terminated.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
3.5
Extension of the Lease Term.  The Lease Term for the applicable Leased Premises
may extend, subject to the terms and conditions of this Master Lease, as
designated in the applicable Attachment A.  In the event that the Lease Term of
the applicable Leased Premises extends, any reference to the term “Lease Term”
includes the period by which the Lease Term extends.

 
Article IV
Rent, Security, Tax Increases
 
4.1
Rent Commencement Date.  Tenant’s obligation under this Master Lease to pay
Rent, in lawful money of the United States and without, for any reason,
deduction or offset, begins on the Rent Commencement Date.  For the purposes of
this Master Lease, the Rent Commencement Date is either:

 
A.     The first day on which the Store opens for business to the public (“Grand
Opening”), as memorialized in the applicable Commencement Notice, if the Leased
Premises is located in a new, relocated, or expanded Store; or
 
B.     The day specified in the applicable Attachment A, if the Leased Premises
is located in a Store currently in operation that has not or will not be
relocated or expanded between the time that the Attachment A is executed and the
Rent Commencement Date.
 
4.2
Base Rent.

 
A.     Tenant shall pay Base Rent to Landlord for each Leased Premises for which
Landlord and Tenant execute an Attachment A at the rate set forth in the
applicable Attachment A and any additional or other sum, rent, interest, or tax
required by this Master Lease.
 
B.     Tenant, without offset, notice, or demand, shall pay Base Rent in equal
monthly installments with each monthly installment due by the Due Date.  If the
Rent Commencement Date occurs after the first day of the month, the Base Rent
for that month equals one-thirtieth (1/30th) of the normal monthly rent
installment for each day starting on the Rent Commencement Date and continuing
through midnight on the last day of that month.
 
4.3
Interest on Late Payments.

 
A.     Tenant shall pay to Landlord interest on any balance of Rent unpaid more
than [***] days following the Due Date at the prorated rate, based on a 30-day
month, of the lesser of:
 
(1)     [***] per month, or
 
(2)     The maximum amount allowed by law.
 
B.     Any interest due under this provision is additional rent, and Tenant
shall pay it in full no later than the day on which it pays the unpaid balance
of Rent unless demanded earlier by Landlord.  Interest will not accrue on any
unpaid balance of Rent if the:
 
(1)     Unpaid balance is due to an error or problem with the automatic debit,
if Tenant is paying Rent through an automated clearing house account, and
 
(2)     The error or problem was not due to the intentional or negligent act of
Tenant.
 
4.4
Quarterly Rent Payment.  Landlord may require Tenant pay the Base Rent on a
quarterly basis rather than monthly if, for two (2) consecutive months, Tenant
fails to pay timely the Base Rent

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
according to Section 4.2.  The quarter will commence on the first day of the
month following the month that Landlord notifies Tenant in writing of this
election.
 
4.5
Method for Rent Payment.  Tenant shall pay Rent as required in the applicable
Attachment A.

 
4.6
Surety Bond.

 
A.     In addition to any other obligation of Tenant under this Master Lease,
Tenant, for each Leased Premises, shall execute and deliver a surety bond to
Landlord in lieu of a security deposit assuring Landlord that it will perform
its obligations herein for each Leased Premises under this Master Lease.
 
B.     Tenant shall obtain a bond equal to the sum of three (3) months rent on
the applicable Leased Premises from a reputable company satisfactory to
Landlord.
 
C.     In addition to any other right or remedy available at law, in equity, or
under this Master Lease, Landlord may claim against the bond an amount equal to
the Rent owed to Landlord that Tenant failed to pay timely, such amount not to
exceed the penal sum of the bond.
 
D.     Any claim or payment under the bond in no way relieves Tenant of its
obligations under this Master Lease to pay Rent or other charges in excess of
the penal sum of the bond.
 
E.     Tenant, at the request of Landlord, will replace the bond when claims
against the bond equal or exceed the penal sum of the bond.
 
F.     Each bond must be in full force and effect within [***] days of Tenant
signing the applicable Attachment A and must continue for the Lease Term of the
applicable Leased Premises.
 
4.7
Taxes.

 
A.     Landlord shall pay all General Taxes levied, during each fiscal tax year,
against the Store, the Common Area, or both.  “General Taxes” means all general
real estate taxes, general and special assessments, parking surcharges, and
other governmental charges.
 
B.     In addition to Tenant’s other obligation under this Master Lease, Tenant
shall pay any tax or assessment:
 
(1)     Levied against Tenant’s Improvements, inventory, personal property, and
Trade Fixtures;
 
(2)     Assessed, imposed, or levied against Landlord in relation to either
Landlord’s interest in this Master Lease or the Rent and or other charges
required under this Master Lease including, but not limited to, increases or
additional, special, regular, unforeseen, foreseen, extraordinary, or ordinary,
taxes and assessments, whether occurring wholly or partially during the Lease
Term of the specific Leased Premises from which the taxes or assessments arise;
 
(3)     Imposed against Landlord because of Landlord’s interest in this Master
Lease as a substitute, in whole or in part, for a real estate tax or assessment.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
C.     Tenant shall reimburse Landlord, upon demand, for any tax, assessment, or
excise that was imposed, assessed, or levied against Landlord that Landlord paid
but for which Tenant is primarily liable under this Master Lease.
 
Article V
Utilities
 
5.1
Utilities.  Unless otherwise agreed to in this Master Lease, Landlord shall pay
for all public utilities furnished to the Leased Premises and shall reasonably
cool, heat, and light and provide water and sanitary sewerage services to the
building in which the Leased Premises is located.  Landlord is not liable for
any interruption whatsoever to the public utilities, the lighting, the cooling,
the heating, the water, or the sanitary sewerage services if any of the
preceding are interrupted:

 
A.     Due to equipment failure, fire, accident, strike, acts of God, or other
causes beyond the reasonable control of Landlord; or
 
B.     In connection with Store Renovations or to repair the Store or the Leased
Premises.
 
5.2
Telephone Service.  Tenant shall pay for telephone service in the Leased
Premises.  [***].

 
Article VI
Use and Operation
 
6.1
Use.  Tenant shall use the Leased Premises as designated in Paragraph 1 of
Appendix-1, Permitted Uses, subject to applicable legal requirements, and for no
other purpose without the prior, written consent of Landlord.

 
6.2
Continuous Operation.

 
A.     Tenant, other than as expressly permitted by this Master Lease and during
the applicable Lease Term, shall operate the applicable Leased Premises
continuously during the Hours of Operation designated in Appendix-1 and in
accordance with the Permitted Uses designated Appendix-1 and with the terms and
provisions of this Master Lease.
 
B.     Tenant, other than as expressly permitted by this Master Lease shall not
vacate the applicable Leased Premises during the applicable Lease Term or cease
operations in the applicable Leased Premises and shall conduct its business, at
a minimum, in an efficient, first-rate, and reputable manner.
 
C.     Other than closing the Leased Premises to repair, update, and upgrade the
Trade Fixtures, the Improvements, and the Leased Premises in accordance with
Section 7.3B, below, Tenant may close the applicable Leased Premises for repair
or renovation only with the prior, written consent of Landlord, which Landlord
may not unreasonably withhold or delay.
 
D.     Failure to comply with this provision or any representation by Tenant
that during the applicable Lease Term the Tenant, or one of its Sublessees, will
not comply with this provision or will vacate the applicable Leased Premises
materially breaches this Master Lease.
 
***Confidential treatment requested.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
6.3
Hours of Operation.  Tenant, other than as expressly permitted by this Master
Lease and during the applicable Lease Term, shall conduct its business in the
Leased Premises as specified in Appendix-1 and, in accordance with Section 2.6,
above, shall post its Hours of Operation in a conspicuous location within the
Leased Premises.

 
6.4
Trade Name.  During the term of this Master Lease, Tenant shall conduct its
business under the name designated as Tenant’s Trade Name in Appendix-1 and
under no other name without the prior, written consent of Landlord.

 
A.     Tenant acknowledges that Landlord relied on Tenant’s business reputation
and associated trade name as a significant material inducement in Landlord’s
decision to execute this Master Lease, and therefore, Tenant hereby warrants
that Tenant has the right to use the trade name and all logos, trade dress,
slogans, and all other identifying marks used by Tenant at the Leased Premises.
 
B.     Failure to comply with this Section 6.4  is a material breach of this
Master Lease.
 
6.5
Customer Service.

 
A.     Tenant shall operate the Leased Premises in conformity with Landlord’s
reputation as the operator of discount retail stores dedicated to customer
satisfaction and prompt quality customer service featuring a broad assortment of
quality merchandise at low, competitive prices.
 
B.     Tenant, at its sole cost and expense, shall post, in a conspicuous
location that customers can see when the Leased Premises is open and when the
Leased Premises is closed, a telephone number and an address for customers to
contact.  The telephone number must be either toll free or a number local to the
applicable Leased Premises.
 
6.6
Window Display Lights.  Tenant shall keep, during the Hours of Operation, any
display windows in the Leased Premises neat and attractive.

 
6.7
Mail & Deliveries.  Landlord does not guaranty any mail or deliveries to the
Leased Premises and recommends Tenant arrange to receive mail or deliveries at
an alternate location.  Any mail or deliveries to and from the Leased Premises
must be done only at such times and in the areas and through the entrances
designated for such purpose by Landlord.  Any mail or delivery left with the
Store is done at the Tenant’s sole risk.  All property kept, stored, or
maintained on the Leased Premises by Tenant is at Tenant’s sole risk.

 
6.8
Tenant’s Advertising, Promotion, and Media Inquiries.

 
A.     Tenant may use Landlord’s name only to the extent Landlord’s Leasing
Operations Department approves and only as a location reference.
 
B.     Tenant may not promote its services within the Store using Landlord’s
in-store public address system.
 
C.     Tenant may not post any Signs outside of the Leased Premises, except as
provided in Section 2.6B, above, or post any hand made signs inside or outside
of the Leased Premises.
 
D.     Tenant’s promotions related to the Leased Premises must be conducted in a
professional manner by trained individuals.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
E.     Tenant may not release or cause to be released any statement to the press
or otherwise containing Landlord’s name or representing any relationship
whatsoever to Landlord, without the prior, written approval of the Wal-Mart
Leasing Operations Department.
 
F.     Tenant agrees that it will not, within the Leased Premises or anywhere
else in the Store, advertise, market, or promote any Competing Business.  For
purposes of this paragraph, “Competing Business” means any retail business,
owned or operated by either Tenant or a third party, involved in the sale,
outside of the Store, of any products or services sold from within the Store or
by any affiliate, parent company, or subsidiary of Landlord.
 
6.9
Restrictive Covenants.  Tenant shall comply with and observe any easement,
covenant, or restriction that affects or applies to the Leased Premises and the
Common Area.

 
6.10
Restrictions on Tenant’s Activities.  In addition to any easement, covenant, or
restriction that affects or applies to the Leased Premises or the Common Area,
Tenant, nor its Sublessees, shall not:

 
A.     Use the sidewalk adjacent to or any other space outside the Leased
Premises for display, sale, or any other similar undertaking.
 
B.     Use a loudspeaker system that may be heard from outside the Leased
Premises; place or permit any radio, television, loudspeaker, or amplifier on
the roof, inside the Leased Premises, or anywhere that the radio, television,
loudspeaker, or amplifier can be seen or heard from outside of the Leased
Premises; or solicit or distribute any handbills or other advertising in the
parking lot, Store, or Common Areas, unless otherwise protected by law.
 
C.     Use the plumbing facilities of the Leased Premises or the Store for any
purpose other than that for which they were constructed.  Neither Tenant or its
Sublessees, nor the invitees of either Tenant or its Sublessees, may use the
plumbing facilities of the Leased Premises to dispose of any foreign
substances.  The expense of any breakage, stoppage, or damage resulting from a
breach of this paragraph will be born by Tenant.
 
D.     Place on any floor a load that exceeds the load per square foot that the
floor was designed to carry.  Tenant may only install, operate, and maintain
heavy equipment in the Leased Premises if installed in such manner as to achieve
a proper distribution of weight.
 
E.     Use any forklift truck, tow truck, or any other machine or equipment in
the Store, in the Common Areas, or on any of the underlying ground, unless
necessary to complete Tenant’s obligations under Section 2.4 or unless otherwise
agreed to in the Appendix-1.
 
F.     Use the Leased Premises to conduct illegal business or for illegal
purposes or for any purpose that may increase the premium cost of or invalidate
any insurance policy carried on the Leased Premises, Common Areas, or the
Store.  If insurance premiums for insurance policies carried on the Leased
Premises, Common Areas, or the Store increase in connection with Tenant’s use of
the Leased Premises, Tenant will reimburse Landlord for the increase.
 
G.     Unreasonably interfere with Landlord’s business or the business of
another tenant of Landlord or act in such a way that reasonably may be expected
to injure Landlord’s business relationship including, but not limited to, acting
in any way which diminishes the access to or the
 
***Confidential treatment requested.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
visibility of any portion of the Store or any other tenant’s premises or that
impedes the free circulation of customer traffic within the Store.
 
H.     Receive, retain, or store in the Leased Premises any “Controlled
Substances” except for any Controlled Substances included in an emergency
medical kit.  For the purposes of this Master Lease, “controlled substances”
means materials containing any quantity of a substance with a stimulant,
depressant, hallucinogenic effect on the higher functions of the central nervous
system, and having the tendency to promote abuse or physiological or
psychological dependence, as designated in state and federal controlled
substance schedules including, but not limited to, those listed in Schedules I
through V of the Controlled Substances Act, 21 U.S.C. §812, as may be
amended.  Failure to comply with this paragraph is a material breach.
 
I.     Within the Leased Premises, receive, retain, store, or use any firearm,
tear gas, mace, pepper spray, dye pack, or any item similar to a firearm, tear
gas, or dye pack.
 
6.11
Encumbrances and Liens.  Tenant may not cause any encumbrance to attach to or
upon the Leased Premises, the Store, the Common Area, the land underlying any of
the foregoing, or Tenant’s interest in this Master Lease because of any act or
omission of Tenant, its contractors, agents, employees, or
representatives.  Failure to discharge any encumbrance within [***] days
following its filing is a material breach.  In addition to any right or remedy
Landlord may have for the material breach, Landlord may bond or pay the
encumbrance for Tenant’s account without inquiring into the validity of the
encumbrance.  If Landlord elects to pay the encumbrance, Tenant will reimburse
Landlord, upon demand by Landlord, the amount Landlord paid, plus an additional
[***] administrative fee, plus interest.  Interest will accrue at the lesser of
[***] or the maximum amount allowed by law beginning on the day Landlord bonds
or pays the encumbrance and continuing until Tenant reimburses Landlord the
entire amount Landlord paid, plus the administrative fee and any interest
accrued.

 
Article VII
Repairs & Maintenance
 
7.1
Repairs by Landlord.

 
A.     Subject to the provisions of Section 11.1 (Casualty) and Article XII
(Condemnation), Landlord shall maintain the Store and Leased Premises in good
order and make all necessary repairs in the Leased Premises to the foundation,
gutter, spouts, exterior walls, interior load-bearing walls, door, door closure
devices, exterior openings, gates, and gate closure devices and to the roof and
HVAC, except as provided below in Section 7.2, below.  Tenant shall notify
Wal-Mart Maintenance of any necessary or requested repairs by calling the
Wal-Mart Maintenance Hotline at [***].  Tenant must have the work order number
provided by the Wal-Mart Maintenance Hotline at the time the repair is reported
in order to check on the status of the repair.
 
B.      Tenant shall reimburse Landlord for any repairs necessitated by the
intentional acts or negligence of Tenant or Sublessee or the agents, customer,
employee, or representative of either.  Any reimbursement required in the
preceding sentence must be made no later than three (3) calendar days after
Landlord demands reimbursement from Tenant.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
C.     Landlord does not breach its obligations under Section 7.1A, above, until
a reasonable amount of time passes after Tenant notifies Wal-Mart Maintenance,
according to Section 7.1A, of the needed repair.  Rent will not abate during
this time or while any repairs are being made, and Landlord will not be liable
to Tenant or Sublessee due to loss or interruption of Tenant’s business because
of the prosecution of the repair.
 
7.2
Tenant’s Repairs, Maintenance, Handling Hazardous Substances.

 
A.     Tenant shall maintain the Leased Premises in compliance with applicable
law and in good order and condition.  Tenant shall effect, according to
applicable law, all repairs to the Leased Premises (except for those
specifically enumerated in Section 7.1, above) that are commercially necessary
or desirable to maintain the Leased Premises in a safe, dry, and tenantable
condition including, without limitation, repairs to:
 
(1)     Any portion of the pipes, lines, ducts, wires, or conduits, used solely
by Tenant;
 
(2)     Plate glass, windows, door frames, and special store fronts;
 
(3)     Molding, locks and hardware, lighting, plumbing, Trade Fixtures, Signs,
and interior painting and treatment; and
 
(4)     Any Improvements or Trade Fixtures installed in the Leased Premises,
including any roof-top heating, ventilation, or air conditioning unit or other
rooftop equipment.  Any repairs to the roof-top heating, ventilating, and air
conditioning unit or other rooftop equipment must be made by a Landlord approved
contractor.
 
B.     Tenant, at no expense to Landlord, shall handle, manage, store,
transport, and dispose of all Hazardous Substances (as defined below) created by
any process, action, or inaction in connection with the Leased Premises and in
accordance with all applicable law.  [***].  Evidence of Tenant's compliance
with all applicable laws concerning the use, handling, management, storage,
transportation, and disposal of Hazardous Substances must be provided to
Landlord on Landlord's request.  For the purpose of this Master Lease,
“Hazardous Substance” means:
 
(1)     Hazardous material, hazardous waste, hazardous substance, toxic
substance, biomedical waste, infectious waste, medical waste, or toxic waste
identified by any federal or state law; chemical, dust, mixture, medical device,
pharmaceutical, or common material capable of causing harm; or solid, liquid,
contained gas, sludge, pollutant, asbestos, petroleum product, polychlorinated
biphenyls, unused or returned consumer product, or other material, any of which,
during the term of this Master Lease, become regulated as a hazardous material,
hazardous waste, hazardous substance, toxic waste, or toxic substance; or
 
(2)     Any solid, liquid, contained gas, sludge, pollutant, asbestos,
polychlorinated biphenyls, or other material that, during the term of this
Master Lease, becomes prohibited or requires special handling or treatment under
any applicable law or regulation, including common law.
 
[***]

***Confidential treatment requested.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
C.     Tenant, at no expense to Landlord, shall maintain the Leased Premises in
a clean and sanitary condition, free from debris or excessive odor, and in
compliance with all laws affecting the Leased Premises, Tenant’s use of the
Leased Premises, or Tenant’s business.
 
(1)     Tenant shall not allow the accumulation or burning of any rubbish or
garbage in, on, or about the Leased Premises and shall keep all entrances,
doors, or loading areas in the Leased Premises or immediately adjoining the
Leased Premises free from trash, litter, or other obstruction.
 
(2)     Tenant shall bear the expense of garbage and rubbish collection and
disposal.  If Landlord’s Leasing Operations Department permits Tenant to use any
part of the Store (other than the Leased Premises), Common Area, or land
underlying the foregoing, to store garbage and refuse generated by Tenant’s use
of the Leased Premises, Tenant and its Sublessees, at the expense of Tenant or
its Sublessee, will keep all such garbage and refuse in the location designated
by Landlord and in the kind of container, including the use of interior
refrigerated garbage containers and compactors, Landlord specifies.
 
(3)     Tenant will maintain air pressure in the Leased Premises necessary to
keep offensive odors from emanating from the Leased Premises.
 
(4)     Any odor producing function of Tenant’s operations must be mechanically
vented to the exterior of the Store and the Leased Premises to eliminate the
dissipation of such odors into the Store or into the interior or exterior of any
other tenant’s space.  Exhaust hoods may not project above the roof deck higher
than that allowed by local governmental authorities or code requirements.
 
(5)     At Landlord’s written request, Tenant will install any equipment or
procedures necessary to comply with Section 7.2C(3) and Section 7.2C(4).  If
Tenant fails to comply with Landlord’s request, within [***] days after
receiving notice, Landlord may take remedial action for Tenant, and Tenant will
pay, as Additional Rent, the cost of such remedial action plus an administrative
charge of [***] of the cost thereof.
 
D.     If Tenant fails to pursue diligently any repairs required by this Section
7.2 within [***] days of receiving notice from Landlord of the repair, Landlord
may repair the Leased Premises as necessary to maintain it in a good, clean,
safe, dry, and tenantable condition.  If Landlord makes such repair, Tenant will
reimburse Landlord for its costs, plus an additional [***] administrative fee
when Tenant pays the next months Rent.  Tenant will pay interest at the rate of
[***] or the maximum rate allowed under law, whichever is less, for any amount
unpaid after the next months Rent becomes due.
 
7.3
Store Renovation.

 
A.     Landlord, from time to time, may relocate the Store to another physical
address.  If Landlord relocates the Store to another physical address, Landlord,
in its reasonable discretion, may terminate this Master Lease as to the
applicable Leased Premises but will not be liable for any cost or expense of
Tenant ceasing operations in the applicable Leased Premises.  Landlord and
Tenant may enter into a new Attachment A for the new location of the Store or
any other Store.  If Landlord and Tenant enter into a new Attachment A for the
new location or the Store or any other Store, Tenant will bear all costs and
expenses incurred in relocating to the new location of
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
the Store or to any other Store.  Tenant will also repair, update, and upgrade
all Trade Fixtures and Improvements to the Leased Premises and ready the newly
located Leased Premises to be open for business to the public for the Store’s
grand opening as required by this Master Lease.  Landlord must first approve all
repairs, updates, and upgrade to the Leased Premises.
 
B.     Landlord, from time to time, may remodel, re-arrange, renovate, or expand
(collectively and individually “Store Renovations”) the Store, without
relocating the Store to another physical address.  During Store Renovations,
Tenant will repair, update, and upgrade the Trade Fixtures, the Improvements,
and the Leased Premises unless Tenant repaired, updated, and upgraded the Trade
Fixtures, the Improvements, and the Leased Premises within the three (3)
consecutive preceding years.  All repairs, updates, and upgrades Tenant
contemplates must be previously approved by Landlord.
 
(1)     Landlord may either temporarily or permanently relocate Tenant within
the Store to another location within the Store that is of like size and
configuration as the Leased Premises and is in a reasonable condition from which
Tenant may operate if Landlord, in its sole discretion, determines the
relocation necessary to complete Store Renovations.  Landlord will bear the cost
of moving Tenant’s Trade Fixtures in the event of a temporary relocation, but
Landlord is not responsible for any expense associated with Tenant’s repairs,
updates, and upgrades of the relocated Leased Premises, whether the relocation
is temporary or permanent. If the relocation is of a permanent nature and Tenant
reasonably determines that the new location will materially impair its
operations in the applicable Leased Premises or is not of like size and
configuration as the original Leased Premises, Tenant may terminate this Master
Lease as to the applicable Leased Premises.  If the relocation is temporary and
Tenant reasonably determines that the new location of the Leased Premises will
materially impair its business or that the Store Renovations are materially
impairing its operations in the Leased Premises, Tenant may, with Landlord’s
written consent, close the applicable Leased Premises until Landlord and Tenant
agree that the Store Renovations no longer impair the operations of the
applicable Leased Premises.
 
(2)     If, in connection with the Store Renovations, Landlord closes the Store
for more than three (3) consecutive days, Tenant may, with Landlord’s written
consent, either close the applicable Leased Premises while the Store is closed
in connection with the Store Renovations and conduct the repairs, updates, and
upgrades of the Leased Premises as required by this Section 7.3B or terminate
this Master Lease as to the applicable Leased Premises.
 
C.     If the Leased Premises closes in accordance with this Section 7.3, Rent
due during the time in which the Leased Premises is closed will abate.  The
Leased Premises must re-open once the Store Renovations and the operations of
the Leased Premises no longer materially impair each other, as determined by
mutual agreement of the parties.
 
Article VIII
Compliance with Law and Other Requirements
 
8.1
Rules and Regulations.  Tenant shall observe all rules and regulations
established from time to time by Landlord (as Landlord may adopt and publish in
the Landlord/Tenant Handbook) including, but not limited to:

***Confidential treatment requested.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
A.     [***].
 
B.     Tenant and Sublessee, and any agent, employee, or representative of
either Tenant or Sublessee, shall conduct him or herself while in the Store or
in the Leased Premises in a professional and courteous manner, appropriately
attired, trained, and groomed, and consistent with the first-class operations
and facilities of Landlord.
 
C.     Landlord’s procedures in responding to media inquiries as such inquiries
relate to the Leased Premises, Landlord, or any relationship between Tenant and
Landlord.
 
8.2
Compliance.

 
A.     Tenant shall comply with all federal, state, and local laws, rules,
orders, directives, and regulations pertaining to its operations within the
Leased Premises including, but not limited to and as amended, the Age
Discrimination in Employment Act of 1967, 29 U.S.C. §621, et seq.; the Americans
with Disabilities Act of 1990, 42 U.S.C. §12101, et seq.; the Child Labor Act,
29 U.S.C. §212, et seq.; the Civil Rights Act of 1964, et seq.; the Economic
Dislocation and Worker Adjustment Act, 29 U.S.C. §565, et seq.; the Employee
Polygraph Act of 1988, 29 U.S.C. §2001, et seq., the Equal Pay Act of 1963, 29
U.S.C. §201, et seq.; the Fair Labor Standards Act of 1938, 29 U.S.C. §201, et
seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. §2601, et seq.; the
Immigration Reform and Control Act of 1986, 8 U.S.C. §1324a, et seq.; the Older
Worker Benefit Protection Act, 29 U.S.C. §621, et seq.; and the Omnibus Budget
Reconciliation Act of 1986, 29 U.S.C. §623, et seq.; and all other applicable
laws, statutes, and regulations.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

B.     Landlord has absolutely no responsibility, obligation, or liability for
Tenant’s hiring and other employment practices.  Tenant warrants and represents
that it has a policy to:
 
(1)     Comply in all respects with all immigration laws and regulations;
 
(2)     Properly maintain all records required by the United States Citizenship
and Immigration Services (the "USCIS") including, without limitation, the
completion and maintenance of the Form I-9 for each party's employees;
 
(3)     Respond in a timely fashion to any inspection requests related to such
I-9 Forms;
 
(4)     Cooperate fully in all respects with any audit, inquiry, inspection, or
investigation the USCIS may conduct of such party or any of Tenant's employees;
 
(5)     Conduct annual audit of the I-9 Forms for its employees; and
 
(6)     Promptly correct any defects or deficiencies the audit reveals;
 
(7)     Require all subcontractors performing any work for Tenant to comply with
the covenants set forth in this Section 8.2B.
 
C.     With respect to its business operations in the Leased Premises, Tenant
shall comply with the Comprehensive Environmental Response, Compensation and
Liability Act, the Superfund Amendment and Reauthorization Act, the Resource
Conservation Recovery Act, the Federal Water Pollution Control Act, the Federal
Environmental Pesticides Act, the Clean Water Act, any federal, state, or local
“Superfund” or “Super Lien” statute, or any other statute, law, ordinance, code,
rule, regulation, order , or decree, including any amendments thereto,
regulating, relating to, or imposing liability (including strict liability), or
standards of conduct concerning any Hazardous Substance or any escape, seepage,
leakage, spillage, emission discharge, or release of any Hazardous Substance or
material resulting from Tenant’s use, handling, management, storage,
transportation and disposal of any Hazardous Substance in, about, or under the
Store.
 
D.     Tenant shall comply with the provisions of the Americans with
Disabilities Act (“ADA”) in complying with its obligations under this Master
Lease.
 
(1)     If, after Landlord delivers to Tenant the applicable Leased Premises,
the presence of any ADA violation on the applicable Leased Premises requires
remedial work on the Leased Premises, Tenant will promptly take all actions at
its sole expense as are required by any federal, state, or local government
agency or political subdivision to comply with the ADA; provided that Landlord's
consent to such actions is first obtained, which consent Landlord may not
unreasonably withhold or delay.
 
(2)     In addition to Tenant’s obligations under Article XIII, Tenant shall
indemnify, defend and hold harmless the Indemnitees from any Claim including,
without limitation, diminution in value of the Leased Premises, damages for the
loss or restriction of use of rentable or usable space or of any amenity of the
Leased Premises, damages arising from any adverse impact on marketing of space
of the Leased Premises, and sums paid in settlement of claims, attorney's fees,
consultation fees and expert fees arising during or after the applicable Lease
Term as a result of such violation.  Tenant’s obligations in the preceding
sentence include, without limitation, costs incurred in connection with any
investigation of site conditions or

***Confidential treatment requested.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

any remedial work required by any federal, state, or local government agency or
political subdivision because of any ADA violation present on or about the
Leased Premises.
 
E.     Tenant represents and warrants that neither it nor its Sublessees are:
 
(1)     A person or entity designated by the U.S. Government on the list of the
Specially Designated Nationals and Blocked Persons (the “SDN List”), as
maintained by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”) at http://www.ustreas.gov/offices/enforcement/ofac/sdn, with which a
U.S. person or entity cannot deal with or otherwise engage in business
transactions;
 
(2)     A person or entity who is otherwise the target of U.S. economic
sanctions and trade embargoes enforced and administered by OFAC, such that a
U.S. person or entity cannot deal or otherwise engage in business transactions
with such Tenant or its Sublessees;
 
(3)     Either wholly or partly owned or wholly or partly controlled by any
person or entity on the SDN List, including without limitation by virtue of such
person being a director or owning voting shares or interests in an entity on the
SDN List;
 
(4)     A person or entity acting, directly or indirectly, for or on behalf of
any person or entity on the SDN List; or
 
(5)     A person or entity acting, directly or indirectly, for or on behalf of a
foreign government that is the target of the OFAC sanctions regulations such
that the entry into this Master Lease would be prohibited under U.S. law.
 
F.     [***].
 
G.     Tenant shall maintain the warranties and representations Tenant made
under this Master Lease, all of which are remade and reaffirmed by Tenant when
signing each new Attachment A, in full force and effect throughout the term of
this Master Lease.
 
H.     Any failure by Tenant to comply with its obligations under this Section
8.2 is a material breach.
 
8.3
Landlord’s Right of Removal.  Landlord, in its sole judgment and discretion, may
deny entry to or remove from its premises any Tenant or Sublessee, or any agent,
employee, or representative of either Tenant or Sublessee, who violates any of
Landlord’s rules or regulations.

 
Article IX
Right to Access & Common Areas

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9.1
Landlord’s Right to Access.  Landlord may enter the Leased Premises:

 
A.     Without notice to either inspect the Leased Premises, enforce any of
Landlord’s rules and regulations, enforce a provision of this Master Lease or in
case of an emergency;
 
B.     Upon reasonable notice to Tenant, either to affect repairs it is
obligated to perform or to add, alter, improve, repair, or otherwise construct
or maintain any part of the Store adjacent to the Leased Premises; and
 
C.     With twenty four (24) hours advance notice to Tenant to show the Leased
Premises to a prospective lender, lessee, or purchaser.
 
9.2
“For Rent” or “For Lease”.  Landlord may post “For Rent” or “For Lease” signs on
the Leased Premises during the last ninety (90) days of the Leased Term if, in
accordance with  this Master Lease, Landlord and Tenant do not extend the Lease
Term.

 
9.3
Tenant’s Right to Access.

 
A.     Tenant, its Sublessee, and the agent, customer, employee, or
representative of each, has a limited right, during the Hours of Operation
listed in Appendix-1, to enter upon the Common Areas of the Store in order to
conduct business in the Leased Premises.
 
B.     Except as set forth in Article II and Article VII, Tenant has no rights
or obligations related to the rooftop of the Leased Premises.
 
C.     Tenant, with Landlord’s prior consent, may enter Landlord’s property for
the limited purpose of servicing, maintaining, and otherwise performing its
obligations in connection with this Master Lease at times the Store is not open
to the public for business if Tenant, in no way, provides its services to the
public during that time.
 
9.4
Parking.  Tenant, its Sublessee, and the agents, employees, and representatives
of each, while working in the Leased Premises, may park their motor vehicles in
spaces designated by Landlord.  Landlord may tow or cause to be towed, at the
expense of the owner of the motor vehicle, any motor vehicle owned by Tenant,
its Sublessee, or the agents, employees, and representatives of each, that is
parked in any area of Landlord’s property other than the parking area
designated.

 
9.5
Landlord’s Liability.  If Landlord enters the Leased Premises according to the
provisions of this Master Lease, Landlord is not liable to Tenant for any loss,
liability, or damages resulting from Landlord’s entry.  If Landlord enters the
Leased Premises during the Hours of Operation, Landlord will use commercially
reasonable efforts not to interfere with Tenant’s business, and Landlord will
not be liable to Tenant for any loss, including lost profits, for any resulting
business interruption.

 
9.6
Common Areas.  Despite the preceding Sections, Landlord may close or prohibit
the use of any Common Area, in part or in whole; may change the location or
appearance of the Common Area; or may erect additional structures in the Common
Area.

 
Article X
Transfer of Interest, Subordination, Attornment
 
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10.1
Transfer of Tenant’s Interest.  For the purposes of this Master Lease,
“Affiliate” means a corporation related to Tenant by shareholdings or any other
means of control; a subsidiary of Tenant; Tenant’s parent company; or a sibling
company of Tenant.  Except to an Affiliate known to Landlord at the time
Landlord signs this Master Lease Agreement:

 
A.     Tenant may not, without the prior, written consent of Landlord, which
Landlord will not unreasonably withhold:
 
(1)     Transfer, encumber, or pledge (collectively and individually,
“Transfer”) its interest in this Master Lease, either in its entirety or as to a
particular Leased Premises, or an applicable Leased Premises;
 
(2)     Permit any Transfer or interest of this Master Lease by operation of
law;
 
(3)     Permit any person or entity other than Tenant to use the Leased
Premises; or
 
(4)     Cause or permit Tenant’s dissolution, merger, or consolidation, unless
Tenant is merging or consolidating with an Affiliate.
 
B.     Tenant shall notify Landlord, in writing, prior to or simultaneously
with, a public announcement of the Transfer within any twelve (12) month period
of either more than an aggregate of fifty percent (50%) of Tenant’s voting
shares or more than fifty percent (50%) of the value of Tenant’s unencumbered
assets (as of the date of the Transfer); or the Transfer of any part or all of
its shares of stock resulting in a change in Tenant’s present effective voting
control by the person owning a majority of said shares of stock on the day
Tenant signs this Master Lease.  If a Transfer occurs, Landlord, in its sole
discretion, may terminate this Master Lease in its entirety by providing written
notice to Tenant within ninety (90) days following receipt by Landlord of
Tenant’s notice as required above.  Tenant’s failure to provide Landlord notice
as required above constitutes a material breach of this Master Lease.
 
10.2
Effect of Unauthorized Transfer.  Subject to the exceptions in Section 10.1, any
Transfer or attempted Transfer without Landlord’s prior, written consent will be
void and will not confer any rights upon any third person.

 
10.3
Requesting Landlord’s Consent.

 
A.     Any request for Landlord’s consent pursuant to this Article X must be in
writing and include:
 
(1)     The proposed effective date of the Transfer, which should not be less
than [***] days nor more than [***] days in advance of the notice;
 
(2)     All of the terms, including the consideration, of the proposed Transfer,
the name and address of the proposed transferee, and a copy of all documentation
pertaining to the proposed Transfer; and
 
(3)     The current audited financial statements of the proposed transferee or
any other financial statements that would enable Landlord to determine the
financial responsibility, character, and reputation of the proposed transferee.
 
B.     Tenant shall provide any additional information Landlord requests in
connection with the proposed Transfer.
 
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10.4
Effect of Consent.

 
A.     If Landlord consents to any Transfer, that consent is not effective until
and unless:
 
(1)     Landlord receives a copy of the assignment affecting the Transfer and
 
(2)     The transferee delivers to Landlord a written agreement, in form and
substance satisfactory to Landlord, by which the transferee assumes all of the
obligations and liabilities of Tenant under this Master Lease.

B.     Any consent by Landlord to a Transfer does not constitute a waiver by
Landlord of any prohibition against any future Transfers.
 
C.     No Transfer relieves Tenant of any obligations under this Master Lease.
 
10.5
Transfer Premium.

 
A.     For the purposes of this provision, “Transfer Premium” means all Rent or
other consideration payable by the Transferee in any monthly period that is in
excess of the Rent payable by Tenant under this Master Lease in the same monthly
period.
 
B.     Tenant promptly, without notice or demand, shall pay Landlord [***] of
any Transfer Premium Tenant receives in connection with a Transfer.
 
C.     Tenant shall pay Landlord, in a form satisfactory to Landlord, any part
of the Transfer Premium Tenant receives in a non-cash form.
 
D.     In lieu of accepting any payment from Tenant of a Transfer Premium,
Landlord may elect, with ninety (90) days written notice, to increase the Rent
due under this Master Lease as to the transferred Leased Premises by an amount
equal to Landlord’s share of the monthly amount of the Transfer Premium.
 
E.     Landlord and its authorized representatives have the right to conduct an
audit, relating to any Transfer Premium, of Tenant at Tenant’s place of business
during Tenant’s regular work hours and with reasonable notice.  If the audit
establishes that Tenant underpaid Landlord Landlord’s percentage of the Transfer
Premium, Tenant, within thirty (30) days following receipt of written demand,
will pay the deficiency and Landlord’s costs of such audit.  If the deficiency
is greater than [***], Landlord may terminate this Master Lease as to the
transferred Leased Premises.  If the audit establishes that Tenant overpaid
Landlord Landlord’s percentage of the Transfer Premium, Landlord, within thirty
(30) days following receipt of written demand by Tenant, will pay the overage.
 
F.      This provision does not apply to:
 
 (1)     Any Transfer between Affiliates,
 
 (2)     Payments made by a transferee for Tenant’s customer deposits, or
 
 (3)     Tenant’s furniture, fixtures, and equipment.
 
10.6
Transfer of Landlord’s Interest.

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A.     Landlord may Transfer all or a part of its interest in the Store, the
Common Areas, or the Leased Premises to a parent, subsidiary, or affiliated
corporation of Landlord without prior consent or notice to Tenant.
 
B.     If Landlord Transfers its interest in this Master Lease as to a Leased
Premises and the transferee assumes all of Landlord’s future obligations under
this Master Lease, Landlord will be released from any further obligations under
this Master Lease as to the transferred interest.  Tenant agrees to look solely
to Landlord’s transferee for performance of obligations under this Master
Lease.  Landlord will transfer to the transferee any security given by Tenant
according to Section 4.6, and Landlord will be discharged from any further
obligation relating to the security.
 
10.7
Subordination.  Landlord may elect that this Master Lease, as to a particular
Leased Premises, be subordinate to or paramount to the lien of any
mortgage.  Landlord’s right to elect is self-operative, and no further
instrument will be required.  If Landlord requests, Tenant will do one or both
of the following:

 
A.     Confirm in writing and in a recordable form that this Master Lease, as to
a particular Leased Premises, is subordinate to or paramount to (as Landlord
elects) the lien of any mortgage; and
 
B.     Execute an instrument making this Master Lease, as to the particular
Leased Premises, subordinate or paramount (as Landlord may elect) to the lien of
any mortgage, in a form as may be required by any applicable mortgagee.
 
10.8
Attornment.  Tenant may not disaffirm any of its obligations under this Master
Lease if Landlord Transfers the Store or a particular Leased Premises to a
successor.  Tenant will attorn to and be bound by the terms, covenants, and
conditions of this Master Lease as to the affected Leased Premises for the
balance of the Lease Term.

 
Article XI
Casualty
 
11.1
Fire or Other Casualty.  Tenant shall promptly notify Landlord, in writing, of
any damage caused to a Leased Premises by casualty.

 
11.2
Election to Rebuild.

 
A.     Landlord may elect to repair and restore structural damage to a Leased
Premises damaged by casualty and shall notify Tenant, in writing and within at
least sixty (60) days after Landlord receives notice of the casualty damage, of
its election.
 
B.     If Landlord does not elect to repair and restore structural damage to a
Leased Premises damaged by casualty, this Master Lease as to the applicable
Leased Premises will terminate.
 
C.     If Landlord elects to repair the structural damage to a Leased Premises
damaged by casualty, Landlord, after notifying Tenant of its election, will
diligently undertake the appropriate measures necessary to complete the repairs
to the applicable Leased Premises in a commercially reasonable amount of
time.  Landlord will return the applicable Leased Premises to Tenant in
substantially the same condition the applicable Leased Premises was in on the
Delivery Date.  Tenant will then complete the build-out of the applicable Leased
Premises with commercially
 
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reasonable diligence and return the applicable Leased Premises to substantially
the same condition the applicable Leased Premises was in immediately prior to
the casualty.
 
11.3
Rent Abatement.  If Landlord elects to repair the structural damage to a Leased
Premises damaged by casualty, Landlord may abate Rent due on the applicable
Leased Premises to the extent that the:

 
A.    Applicable Leased Premises is closed for repair, or
 
B.     Tenant’s operations within the Leased Premises are impaired by the
structural damage and subsequent repairs.
 
Article XII
Condemnation & Eminent Domain
 
12.1
Total or Substantial Taking.  If a Taking of a Leased Premises, or a Store in
which exists a Leased Premises, occurs, this Master Lease as to the applicable
Leased Premises will terminate automatically as of the date of the Taking.  For
purposes of this Master Lease, “Taking” means any government action that
deprives, directly interferes with, or substantially disturbs the use and
enjoyment of the Leased Premises, any of which may occur because of either the
exercise of the power of eminent domain or condemnation or resulting from a
purchase in lieu thereof.

 
12.2
Partial Taking.  If a Taking of only a portion of the Leased Premises, or of a
Store in which exists a Leased Premises, occurs, Landlord may either:

 
A.     Terminate this Master Lease, without liability, as to the applicable
Leased Premises; or
 
B.     Reduce the Base Rent in proportion to the area of the Leased Premises
affected by the Taking until such time that portion of the Store or the Leased
Premises is restored.
 
12.3
Temporary Use.  If a Taking of the Leased Premises occurs for temporary use,
this Master Lease will continue in full force and effect as to the applicable
Leased Premises.  Tenant will continue to comply with its obligations under this
Master Lease, and any appendix, amendment, or attachment hereto, to the extent
compliance is possible because of the Taking for temporary use.  If during the
temporary Taking, Tenant is unable, based on a commercially reasonable standard,
to operate its business from the Leased Premises such that Tenant reasonably is
unable to open the Leased Premises for business, Landlord will reduce Tenant’s
Rent in proportion with the number of days the Leased Premises is closed during
the temporary Taking.

 
12.4
Compensation.  Any compensation arising out of the Taking of a Leased Premises
belongs to and is the property of Landlord without any participation by
Tenant.  Tenant hereby assigns to Landlord any share of any compensation arising
out of the Taking of a Leased Premises that may be awarded to Tenant and waives
any rights it may have with respect to the loss of its leasehold estate.  

 
Article XIII
Indemnity and Liability
 
13.1
Definitions.  For the purposes of this Master Lease:

 
A.    “Claim” means any action, cause of action, claim, or any other assertion
of a legal right; damages including, but not limited to, consequential, future,
incidental, liquidated, special, and
 
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punitive damages; diminution in value; fines; judgments; liabilities; losses
including, but not limited to, economic loss and lost profits; and regulatory
actions, sanctions, or settlement payments.
 
B.      “Indemnitee” means:
 
(1)     Landlord, its subsidiaries, affiliates, officers, directors, employees,
agents, and
 
(2)     Any lessor of Landlord or other party to an agreement with Landlord
related to Landlord’s purchase or lease or use of the Store or the underlying
land, which Landlord has a contractual obligation to indemnify for Claims in
connection with the Store or the Leased Premises.
 
C.      “Indemnified Claim” means a Claim for which Tenant is obligated to
indemnify, defend, and hold harmless the Indemnitees according to Section 13.2,
below.
 
13.2
Indemnification.  Tenant shall indemnify, defend, and hold harmless the
Indemnitees against any Claim, even if the Claim is  groundless, fraudulent,
false, or raised or asserted by a third party, including a government entity, in
connection with or resulting from:

 
A.     Any actual or alleged breach of this Master Lease by Tenant or Sublessee,
or any agent, employee, or representative of either Tenant or Sublessee;
 
B.     Any actual or alleged negligence or willful misconduct by Tenant or
Sublessees, or their respective agents, employees, representatives,
subcontractors, or customers, at or related to the Leased Premises;
 
C.     An investigation of the Indemnitees concerning the alleged improper
management, handling, storage, disposal, or transportation of Hazardous
Substances, any of which Tenant is responsible for under this Master Lease and
the actual or alleged improper use, handling, management, storage,
transportation, and disposal of Hazardous Substances by Tenant, Sublessee, or
any agent, employee, or representative of either Tenant or Sublessee; and
 
D.     Indemnitees actual or alleged passive negligence, secondary liability,
vicarious liability, strict liability, or breach of a statutory or non-delegable
duty, related, directly or indirectly, to any matter covered under Section 13.2
of this Master Lease.
 
13.3
Scope of Indemnity.  Tenant’s obligations under this Article XIII:

 
A.     Is independent of, and not limited by, any of Tenant’s obligations under
Article XIV, below, even if damages or benefits are payable under worker’s
compensation or other statutes or if Tenant breaches its obligations under
Article XIV, below.
 
B.     Survive the termination or expiration of this Master Lease until
applicable law fully and finally bars all Claims against the Indemnitee.  ALL
OBLIGATIONS UNDER THIS ARTICLE XIII WILL BE ENFORCED TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW FOR THE BENEFIT OF THE INDEMNITEES. In the event
that applicable law affects the validity or enforceability of this Article XIII,
that applicable law will operate to amend this Article XIII to the minimum
extent necessary to bring the provisions of this Article XIII into conformity
with the applicable law.  This Article XIII, as modified, will continue in full
force and effect.
 
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C.     Applies unless and until a final judicial decision, from which there is
no further right to appeal, determined that the Indemnitee is not entitled to be
indemnified, defended, and held harmless under this Agreement.
 
13.4
Defense of Claim.

 
A.     On receiving notice, from whatever source, of the Indemnified Claim,
Tenant shall:
 
(1)     Promptly notify Landlord of the assertion, filing, or service of any
Indemnified Claim of which Tenant becomes aware; and
 
(2)     Immediately take all appropriate actions necessary to protect and defend
the Indemnitees regarding the Indemnified Claim.
 
B.     Tenant shall cause the counsel engaged to defend the Indemnitees with
respect to the Indemnified Claim to acknowledge receipt of, to accept, and to
represent Indemnitees’ interest regarding the Indemnified Claim in accordance
with “Wal-Mart’s Indemnity Counsel Guidelines.”
 
C.     If, in its sole discretion, the Indemnitees determine that a conflict of
interest exists between the Indemnitees and the indemnifying counsel or that the
indemnifying counsel is not pursuing a defense for the Indemnitees that is in
the Indemnitees’ best interests, the Indemnitees may request Tenant replace the
indemnifying counsel.
 
(1)     Tenant shall not unreasonably withhold its consent to replace the
indemnifying counsel and will replace the indemnifying counsel timely or cause
the indemnifying counsel to be replaced timely.
 
(2)     If Tenant unreasonably withholds consent or the indemnifying counsel is
not timely replaced after the Indemnitees requested, the Indemnitees may replace
the indemnifying counsel, and Tenant will reimburse the Indemnitees any costs
incurred by the Indemnitees in replacing the counsel.
 
13.5
Waiver.  Tenant waives any right, at law or in equity, to indemnity or
contribution from the Indemnitees.

 
13.6
Non-liability of Landlord and Tenant.

 
A.     Landlord will not be liable to Tenant or Sublessee, or any agent,
employee, representative, or customer of Tenant or Sublessee, and Tenant will
not be liable to Landlord, for any Claim relating to the negligence or willful
misconduct of any of Landlord’s customers, invitees, or other lessees or
sublessees or any customers or invitees of Landlord’s other lessee and
sublessees.
 
B.     Landlord will not be liable to Tenant for any Claim relating to the
condition of the Store, the Common Areas, or the Leased Premises in connection
with disrepair or defect in any:
 
(1)     Structural element of the Leased Premises;
 
(2)     Trade Fixtures, Improvements, wiring, or any of Tenant’s installations;
 
(3)     Back up of drains constructed or installed by Tenant; or

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(4)     Gas, water, steam, electricity, grease, or oil, leaking, escaping, or
flowing, from any equipment, pipes, drains, wiring, Trade Fixtures, or
Improvements installed or maintained by Tenant.
 
13.7
Breach of Article XIII.  Any failure by Tenant to comply with this Article XIII
is a material breach of this Master Lease, which does not relieve Tenant of its
obligations under this Article XIII.

 
Article XIV
Insurance
 
14.1
Insurance Required.  Tenant shall procure and maintain, at Tenant's own expense,
the insurance policies described in the attached Appendix-2.  All insurance
policies required by this Master Lease must be obtained from an insurance
company with a rating of A+ or better and a financial Size Category rating of
VII or better as rated in the A.M. Best Key Rating Guide for Property and
Casualty Insurance Companies (“Insurer”), unless self-insured as discussed in
Section 14.3, below.

 
14.2
Requirements.

 
A.     Tenant and its Sublessees bear the responsibility of insuring for fire
and all risks, including risk of flood, earthquake, and terrorism, associated
with the merchandise, Trade Fixtures, and Improvements related to the operation
of the Leased Premises.  At no time is Landlord liable for any Damage or Injury
to Tenant’s business property, Improvements, betterments, or Trade Fixtures
within any of the Leased Premises due to fire or any other risk covered under a
Causes of Loss – Special Form insurance policy or due to flood, earthquake, or
terrorism.
 
B.     Tenant shall submit to Landlord a Certificate of Insurance for each
insurance policy required under this Article XIV and the attached
Appendix-2  naming “Wal-Mart Stores, Inc., Attn:  Asset Management, [***]” as
the Certificate Holder.  Additionally, each Certificate of Insurance must:
 
(1)     Be submitted to Landlord at the address provided in the preceding
sentence;
 
(2)     Show the name and address of the Insurer;
 
(3)     Show the policy number and date(s) of coverage for each policy procured
by Tenant in satisfaction of its obligations under this Master Lease;
 
(4)     Include the name, address, telephone number, and signature of the
authorized person providing the Certificate of Insurance;
 
(5)     Verify the insurance coverage required in this Article XIV and the
Appendix-2;
 
(6)     Where permitted by law, list as Additional Insureds Wal-Mart Stores,
Inc., its Subsidiaries and its Affiliates, and the directors, officers,
shareholders, employees, agents, and representatives, and the respective
successors and assigns of each,  and any party that Landlord has a contractual
obligation to indemnify in relation to Tenant’s use of the applicable Leased
Premises;
 
(7)     Verify that Insurer waives subrogation in favor of Landlord and
Landlord’s affiliates and subsidiaries;

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(8)     Verify the insurance policies are primary, non-contributory, and not in
excess of any insurance the Additional Insured has available to it; and
 
(9)     Where permitted by law, provide coverage for punitive damages.
 
 14.3
Self-Insured.

 
A.     Landlord may accept self-insurance in lieu of the insurance policies set
forth in this Article XIV and the attached Appendix-2 if Tenant provides to
Landlord
 
(1)     A copy of the Certificate of Authority to Self-Insure its Worker’s
Compensation obligations issued by the state(s) in which the Leased Premises
will be located and a copy of the state-issued letter approving self-insurance
for automobile liability, if required under this Master Lease;
 
(2)     Proof that Tenant’s net worth is at least ten (10) times the amount of
Commercial General Liability insurance required by this Master Lease; and
 
(3)     A copy of Tenant’s most recently audited annual financial statements,
with no negative notes, or the most recent Dun and Bradstreet report.
 
B.     If Landlord accepts self-insurance in lieu of the insurance policies set
forth in this Article XIV and the attached Appendix-2, Tenant hereby agrees to
the obligations of any endorsement or Certificate of Insurance required under
Section 14.2, above, and that may be required under any appendix, amendment, or
attachment hereto.  Such obligations become Tenant’s obligations under this
Master Lease.
 
14.4
Mutual Waiver of Subrogation.  Landlord and Tenant each hereby release the other
from all liability or responsibility to the other or to any other party claiming
through or under them by way of subrogation or otherwise or for any loss or
damage to property caused by casualty that is customarily insured under a Causes
of Loss – Special Form insurance policy or that is due to flood, earthquake, or
terrorism.  This mutual waiver applies only to Damage or Injury to Tenant’s
business property, Improvements, betterments, or Trade Fixtures within any of
the Leased Premises occurring during the time when Tenant’s business property,
Improvements, betterments, or Trade Fixtures within any of the Leased Premises
are covered under a Causes of Loss – Special Form insurance policy or are due to
flood, earthquake, or terrorism for which Tenant has insurance coverage.

 
14.5
Breach.  Failure to procure and maintain the insurance required under this
Article XIV and the attached Appendix-2 constitutes a material breach of this
Master Lease.  Tenant shall indemnify, defend, and hold harmless the Indemnitee
against Indemnified Claim that the required insurance would have covered but for
Tenant’s breach.

 
14.6
Insurance Obligation is in Addition to Other Obligations.  Tenant’s obligations
under this Article XIV and the attached Appendix-2 are in addition to, not in
lieu of, Tenant’s other obligations, including Tenant’s obligations under
Article XIII, to Landlord under this Master Lease.

 
Article XV
Confidentiality
 
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15.1
The terms and provisions of this Master Lease affect present and future
negotiations Landlord or Tenant may have with another party.  As such, Landlord
and Tenant, and the agents, employees, and representatives of each, shall each
keep confidential, disclosing only such information as is required by law or by
mutual, written agreement between Landlord and Tenant.

 
15.2
Tenant shall not disclose any information that Landlord may mark as confidential
or proprietary including, but not limited to, lists of available rental space
and marketing plans or schedules that Landlord may make available or known to
Tenant, disclosing only such information as is required by law or by mutual,
written agreement between Landlord and Tenant.

 
15.3
Failure to comply with this Article XV is a material breach of this Master
Lease.

 
Article XVI
Covenant of Quiet Enjoyment
 
16.1
Landlord covenants that Tenant peaceably and quietly may enjoy the Leased
Premises in accordance with, and subject to, the terms of this Master Lease and
without any interruption or disturbance from Landlord, provided Tenant:

 
A.     Pays Rent and all other charges provided for in this Master Lease and any
appendix, amendment, or attachment hereto,
 
B.     Performs all of its obligations provided for under this Master Lease, and
 
C.     Observes all of the other provisions of this Master Lease.
 
Article XVII
Default, Termination, Surrender, Tenant’s Liability, Right of Reentry
Tenant’s Waivers, Landlord’s Right to Perform, Cumulative Rights
 
17.1
Default.  Each of the following events constitutes a Default of this Master
Lease:

 
A.     Tenant files for Insolvency or is adjudicated Insolvent.  For the
purposes of this Master Lease, “Insolvency” means any petition filed by Tenant
in bankruptcy, for reorganization or arrangement, or for appointment of a
receiver or trustee; Tenant acquiescing to a petition for bankruptcy,
reorganization, arrangement, or the appointment of a receiver or trustee by a
creditor; or any assignment by Tenant for the benefit of a creditor.
 
B.     A petition for Insolvency is filed against Tenant, to which Tenant does
not acquiesce, and that, within five (5) days following the filing, is not
dismissed, discontinued, or vacated;
 
C.     Tenant’s interest in this Master Lease, in its entirety or as to a
particular Leased Premises is assigned by operation of law;
 
D.     Tenant fails to pay any installment of Rent or any other charge to which
Tenant is obligated by this Master Lease to pay when due and payable, and the
failure to pay continues for more than ten (10) days and such failure occurs
more than two (2) times in a calendar year; or
 
E.     Tenant breaches any material obligation or covenant under this Master
Lease.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
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F.     Tenant breaches any non-material obligation or covenant under this Master
Lease more than two (2) times in a calendar year, and each breach remains
uncured ten (10) days after Tenant receives written or verbal notice of the
breach from Landlord.
 
G.     After the Rent Commencement Date, Tenant fails to open the applicable
Leased Premises according to the Hours of Operation designated in Appendix-1 two
(2) or more times in a calendar year, without Landlord’s prior, written approval
or as otherwise allowed under this Master Lease.
 
17.2
Termination for Default.  Landlord may terminate this Master Lease, in its
entirety or as to a particular Leased Premises, without any liability, if Tenant
Defaults, as defined in Section 17.1, above, or elsewhere in this Master Lease,
by written notice to Tenant.  However, Landlord may wait to terminate this
Master Lease, in its entirety or as to a particular Leased Premises, until after
it re-lets the Leased Premises in accordance with this Article, and Tenant pays
Landlord all sums due Landlord under this Master Lease.

 
17.3
Surrender at Termination or Expiration.  Unless otherwise provided in
Appendix-1, by the date on which this Master Lease as to the applicable Leased
Premises terminates, for whatever reason, Tenant shall immediately surrender and
quit the applicable Leased Premises and, in the two (2) calendar days preceding
the date on which this Master Lease terminates, for whatever reason, shall
remove all property, Trade Fixtures, and Improvements from the Leased Premises
and either:

 
A.    Return the Leased Premises to White Box condition, or
 
B.     In lieu of returning the Leased Premises to a White Box condition, pay
Landlord [***].
 
17.4
Landlord’s Right of Reentry.  If Tenant fails to surrender the applicable Leased
Premises in accordance with this Article, Landlord, its agents, employees, or
representatives, without prejudice to any right or remedy available to Landlord
under this Master Lease, at law, or in equity and subject to applicable law,
may:

 
A.     Re-enter and repossess the applicable Leased Premises and do one or more
of the following:
 
(1)     Dispose of any property, Trade Fixtures, or Improvements remaining
therein.
 
(2)     Relet the Leased Premises, and if Landlord relets the Leased Premises
for Rent and other charges equal to or greater than the Rent and other charges
for which Tenant remains liable, Tenant will be released from further liability
under this Master Lease.
 
(3)     Use all or a portion of the Leased Premises, in which case the fair
market value of the applicable Leased Premises, or the portion of that Leased
Premises used, will be used in calculating Tenant’s liability described in
Section 17.5, below.  If the fair market value equals or is greater than the
Rent and other charges for which Tenant remains liable, Tenant will be released
from further liability under this Master Lease.
 
(4)     Demand full and final settlement, whereupon Tenant shall pay Landlord
the present value of the total of all future Rent that would come due under this
Master Lease but for the termination of this Master Lease, plus other charges
that may apply under this Master Lease, less the fair market value of the
particular Leased Premises.  Present value will be calculated

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.
 
at [***], at which time Tenant will be released from further liability under
this Master Lease.
 
B.     Continue this Master Lease in full force and continue to look to Tenant
to perform all Tenant’s obligations under this Master Lease, but Landlord may
pursue Tenant for damages incurred or equitable relief or both.
 
17.5
Survival of Tenant’s Liability.  Upon termination of this Master Lease, in its
entirety or as to a particular Leased Premises and without prejudice to any
right or remedy available to Landlord under this Master Lease, at law, or in
equity and subject to applicable law, Tenant remains liable for:

 
A.     Damages for its failure to pay Rent, and other charges;
 
B.     Damages for its failure to perform other obligations;
 
C.     Expenses Landlord incurs in the course of evicting Tenant and reentering
the Leased Premises, including reasonable attorneys fees and court costs; and
 
D.     Unless Tenant surrenders the Leased Premises in accordance with this
Article, any cost incurred by Landlord in returning the Leased Premises to the
same condition in which Tenant received the Leased Premises on the Delivery
Date, less any revenue received by Landlord by re-letting the Leased Premises,
less any claim Landlord successfully makes against the Surety Bond required
pursuant to Section 4.6.
 
17.6
Tenant’s Waivers.  Landlord and Tenant waive any right to trial by jury on all
issues in all litigation between Landlord and Tenant arising from or relating to
this Master Lease, and Tenant, additionally, waives any:

 
A.     Right to withhold or reduce Tenant’s required payments of Rent and other
charges for which Tenant is obligated under this Master Lease;
 
B.     Statutory requirements of prior, written notice before filing for
eviction or for any damages suit for non-payment of Rent;
 
C.     Claim for damages against Landlord resulting from Landlord’s re-entry;
 
D.     Rights to bring any counterclaim, proceeding, or other cause of action in
relation to dispossession; and
 
E.     To the extent legally permissible, for itself and all persons claiming
by, through, or under it, any right of redemption or for the restoration of the
operation of this Master Lease under any present or future law in case Tenant is
dispossessed for any cause or in case Landlord obtains possession of the Leased
Premises as herein provided.
 
17.7
Landlord’s Right to Perform for Account of Tenant.

 
A.     If Tenant Defaults under this Master Lease, Landlord may cure the Default
at any time for the account of and at the expense of Tenant, and Tenant will
reimburse Landlord for any amount, including reasonable attorneys fees and
interest, expended in connection therewith.
 
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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

B.     If Landlord seeks enforcement of this Master Lease by litigation and
prevails, Tenant will reimburse Landlord for any attorneys’ fees and
disbursements reasonably incurred in connection with that litigation.
 
C.     In addition to all other obligations under this Master Lease, Tenant
shall pay interest to Landlord, at the maximum lawful rate, on the amount
specified in Sections 17.7A and 17.7B, from the date Landlord incurs the expense
until the day reimbursed.
 
17.8
Cumulative Rights.

 
A.     Landlord’s rights and remedies set forth in this Master Lease are
cumulative and in addition to any other right and remedy now and hereafter
available to Landlord by this Master Lease, at law or in equity.  Landlord may
exercise its rights and remedies at any time, in any order, to any extent, and
as often as Landlord deems advisable.
 
B.     A single or partial exercise of a right or remedy will not preclude a
further exercise of that or another right or remedy.
 
C.     No action, inaction, delay, or omission by Landlord in exercising a right
or remedy exhausts or impairs the same or constitutes a waiver of, or
acquiescence to, a breach of this Master Lease or Default.
 
D.     If Landlord waives a breach of this Master Lease or a Default, that
waiver does not extend to or affect any other breach of this Master Lease or any
other Default nor will it impair any right or remedy with respect thereto.
 
E.     Acceptance by Landlord of Rent after Landlord notifies Tenant of
termination does not waive Landlord’s right to terminate or pursue any other
right and remedy available to Landlord under this Master Lease, at law, or in
equity.
 
17.9
Landlord’s Default.

 
A.     Landlord’s failure to perform any of its obligations under this Master
Lease may constitute a default of this Master Lease, in its entirety or as to
the particular Leased Premises affected by Landlord’s failure to perform, if
Tenant notifies Landlord, in writing, of Landlord’s failure to perform, and
Landlord fails to cure the failure to perform within at least thirty (30) days
after Landlord receives Tenant’s notice or such longer period of time as may
reasonably be necessary to cure the type of alleged breach under the
circumstances.  Notice required under this Section must include a description of
the particular facts and circumstances alleged giving rise to the alleged breach
and the date of commencement of the alleged breach.
 
B.     If Landlord defaults on this Master Lease, Tenant, in addition to any
other rights or remedies to which it is entitled at law or in equity, may:
 
(1)     Treat this Master Lease as still in full force and effect continuing to
look to Landlord to perform its obligations under this Master Lease but seek
damages or equitable relief, or both; or
 
(2)     Terminate this Master Lease, in its entirety or as to the applicable
Leased Premises, with thirty (30) days written, notice stating the date on which
Tenant will vacate the Leased Premises.  If Tenant fails to timely vacate the
Leased Premises, Tenant’s notice of termination

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will be deemed to be void; the Master Lease, in its entirety or as to the
applicable Leased Premises, will continue in full force and effect, and Landlord
will be deemed to have cured any alleged breach.
 
C.     Regardless of which remedy Tenant pursues, LANDLORD’S LIABILITY FOR
DEFAULT UNDER THIS MASTER LEASE, AT LAW OR IN EQUITY, WILL NOT EXCEED AN AMOUNT
EQUAL TO ONE (1) YEARS RENT PAID BY TENANT FOR THE LOCATION IN WHICH LANDLORD
WAS FOUND IN DEFAULT.
 
17.10
Force Majeure.  If a force majeure occurs, the time that the force majeure
delays performance by either Landlord or Tenant will be excluded from the
computation of time within which Landlord, Tenant, or both, must perform under
this Master Lease.  For purposes of this Master Lease, a force majeure is a
strike, riot, act of God, shortage of material, war, governmental law,
regulation, or restriction, or any other cause of any kind that is beyond the
reasonable control of the party owing performance.

 
Article XVIII
Holding Over & Estoppel Certificates
 
18.1
Holding Over.  If Tenant remains in possession of the Leased Premises after the
expiration of the Lease Term without a new Attachment A or Master Lease executed
by both Landlord and Tenant, Tenant will be a “Holdover Tenant”.  As a Holdover
Tenant, Tenant will occupy the Leased Premises on a month-to-month basis with a
monthly rental rate equal to the Rent and other charges applicable at the time
of the expiration of the Master Lease plus [***] of the sum of such
amounts.  Further, Tenant will be subject to all conditions, provisions, and
obligations of this Master Lease as far as the same are applicable to a
month-to-month tenancy.

 
18.2
Estoppel Certificates.  Tenant, at Landlord’s request, shall deliver to Landlord
an executed, written, statement addressed to the party designated in Landlord’s
request and identifying Tenant and this Master Lease and certifying and
confirming, in addition to any information or confirmation Landlord may
reasonably require, the following:

 
A.     That this Master Lease is either unmodified since its execution and in
full force and effect, or modified since its execution but still in full force
and effect as modified;
 
B.     That Landlord either is not in default of any of its obligations under
this Master Lease or is in default, specifying the default;
 
C.     Tenant’s obligations and restrictions concerning subordination and
attornment; and
 
D.     The Lease Term, Rent Commencement Date, and Expiration Date as to the
Leased Premises for which the estoppel certificate applies.
 
18.3
Agent-in-Fact.  Tenant’s failure to provide an estoppel certificate materially
complying with the Section 18.2, above, is a material breach of this Master
Lease through which, in addition to any other right or remedy Landlord may have
under this Master Lease, at law, or in equity, Landlord is hereby irrevocably
appointed and authorized as the agent and attorney-in-fact of Tenant to execute
and deliver any such written statement on Tenant’s behalf if Tenant fails to do
so within seven (7) days after receiving a written request from Landlord.

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CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
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Article XIX
Interpretation, Notices, & Miscellaneous
 
19.1
Severability.  If a court of proper jurisdiction determines that any provision
of this Master Lease, or any application of the provision, is invalid or
unenforceable, the remainder of this Master Lease, or the applications of the
provision that are not invalid or unenforceable, will remain in full force and
effect to the fullest extent permitted by law.

 
19.2
Captions.  The captions and headings used throughout this Master Lease are for
convenience of reference only and do not affect the interpretation of this
Master Lease.

 
19.3
Merger.  This Master Lease, together with any Attachment A, exhibit, addendum,
amendment, or any other document attached to and incorporated into this Master
Lease, constitutes the entire agreement between Landlord and Tenant, a complete
allocation of risks between them, and a complete and exclusive statement of the
terms and conditions of this Master Lease.  This Master Lease is merged into by
and supersedes all prior written or oral agreements, leases, licenses,
negotiations, dealings, and understandings, unless specifically provided
otherwise in Appendix-1.  Except for changes to the Delivery Window and Delivery
Date designated in the applicable Attachment A, no amendment or other
modification of this Master Lease will be valid or binding on either Landlord or
Tenant unless it is reduced to writing and signed by both Landlord and Tenant.

 
19.4
Survival.  The following provisions of this Master Lease survive the
termination, for whatever reason, of this Master Lease:  Article XIII, Article
XIV, Article XV, Article XVII, Section 2.4, Section 18.1, and Appendix-2.

 
19.5
Third Party Beneficiaries.  Nothing in this Master Lease confers, or intends to
confer, any rights upon any person or entity not a party to this Master Lease,
except for the Indemnitees identified in Section 13.1B, above.

 
19.6
Benefit & Binding Effect.  The terms, provisions, and covenants contained in
this Master Lease apply to, inure to the benefit of, and are binding on Landlord
and Tenant, and their respective heirs, successors, and assignees.

 
19.7
Fiduciary Relationship.  This Master Lease does not create a fiduciary
relationship between Landlord and Tenant.  Any expenditures, investments, or
commitments Tenant makes in reliance on any present or future business or lease
with Landlord is done at Tenant’s own risk and without any obligation whatsoever
from Landlord.

 
19.8
No Obligation.  Landlord has no obligation to offer, nor does the course of
performance under this Master Lease create any obligation on Landlord to offer,
any number of locations for lease to Tenant.  Any locations offered for lease to
Tenant in accordance with this Master Lease are in the sole and absolute
discretion of Landlord.  Landlord, in its sole discretion and at any time, may
cease offering locations to Tenant, and this Master Lease will continue in full
force and effect solely with regard to those Leased Premises for which both
Landlord and Tenant have signed an Attachment A.  Landlord may lease locations
that Landlord might otherwise offer to Tenant under this Master Lease to any
party that Landlord chooses including, without limitation, Tenant’s
competitors.  Tenant recognizes and agrees that this Master Lease creates no
exclusive rights in Tenant’s favor.

 
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19.9
Independent Contractors.  Nothing contained in this Master Lease creates a
partnership, joint venture, principal/agent relationship, or any other
relationship other than that of landlord/tenant between Landlord and Tenant.

 
19.10
Notice.  Any notice required by this Master Lease must be in writing and
delivered either by hand; by commercial courier; or by placing notice in the
U.S. mail, certified mail, return receipt requested, properly addressed and with
sufficient postage.

 
A.     Notice is deemed received on:
 
(1)     Delivery if by hand;
 
(2)     One (1) business day (Monday through Friday) after deposit with the
commercial courier, provided deposit is done timely so as to effect next
business day delivery, if by commercial courier; or
 
(3)    Three (3) business days after placing the notice in the U.S. mail,
properly addressed and with sufficient postage for certified mail, return
receipt requested.
 
B     Notice intended for Tenant must be sent to the address provided in
Appendix-1.
 
C.     Notice intended for Landlord must be sent to: Wal-Mart Stores, Inc.,
Asset Management, [***], with a copy to:  Wal-Mart Stores, Inc., Wal-Mart Stores
Division – Legal, Office of the General Counsel, [***].
 
19.11
Governing Law.  This Master Lease, and any property or tort disputes between
Landlord and Tenant, will be construed and enforced in accordance with the laws
of the State of Arkansas, without regard to the internal law of Arkansas
regarding conflicts of law.  Neither Landlord nor Tenant may raise in connection
therewith, and hereby waive, any defenses based on venue, inconvenience of
forum, or lack of personal jurisdiction, in any action or suit brought in
accordance with the foregoing.

 
19.12
Jurisdiction and Venue.  For any suit, action, or legal proceeding, arising from
this Master Lease or from any property or tort dispute between Landlord and
Tenant, Landlord and Tenant consent and submit to the exclusive jurisdiction and
venue of the state courts of Arkansas situated in Benton County, Arkansas or the
federal courts situated in the Western District of Arkansas.  Landlord and
Tenant acknowledge that they have read and understand this clause and willingly
agree to its terms.

 
19.13
Attorney’s Fees.  Except as otherwise provided in this Master Lease, if either
party commences an action in a court of law against the other party to enforce
the terms of this Master Lease, to declare rights under this Master Lease, or
for any other reason related to this Master Lease, each party will pay its own
attorney’s fees and costs incurred as a result of that action.

 
[signature page to follow]
 
Signed:
         
Witness:
 
Landlord:  Wal-Mart Stores, Inc.  
 
 
 
 
 
 
 

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Tenant: __________

   
Taylor C. Smith
 
Date
     
Wal-Mart Stores, Inc.
                 
 
         
Witness:
 
Landlord:  Wal-Mart Stores East, LP  
 
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores East, LP
                 
 
         
Witness:
 
Landlord:  Wal-Mart Stores Texas, LP  
 
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores Texas, LP
                 
 
         
Witness:
 
Landlord:  Wal-Mart Louisiana, LLC  
 
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Louisiana, LLC
                 
 
         
Signed:
         
Witness:
 
Tenant:  Portrait Corporation of America, Inc.  
 
 
 
 
 
 
     
Signature
 
Date
 
 
 
 
         
Printed Name
         
 
         
Title
     

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Appendix-1-36

 
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Tenant: __________
 
Appendix-1
 
Basic Lease Terms
 
The following terms supplement the terms and conditions set forth in the body of
the Master Lease Agreement, to which this Appendix-1 attaches and into which
these Appendix-1 incorporates.
 
1.     Permitted Use of Leased Premises.
 
a.     During the Lease Term of the applicable Leased Premises, Tenant shall use
the Leased Premises solely for the purpose of operating a photography studio
offering the taking and selling of portrait photographs and related products;
the customization of portraits including oil portraits; the taking of passport
and citizenship photographs; the sale of picture frames [***], from time to
time, sells in the Store; the sale of photographic plaques; the copying and
restoration of old photographs; the sale of portraiture related software and
digital images; and the provision and sale of photographic lamination services,
[***].
 
b.     During the Lease Term of the applicable Leased Premises and other than as
permitted in the preceding paragraph, Tenant may not offer any additional
services or products, or change the use of the Leased Premises, without prior
written consent of Landlord’s Home Office Leasing Department, which such consent
may be withheld in Landlord’s sole and exclusive judgment.
 
c.     Commencing on the actual Rent Commencement Date of the applicable Leased
Premises and continuing until expiration or termination of this Master Lease in
its entirety or as to the applicable Leased Premises, and provided that Tenant
is not in Default (as defined in this Master Lease) as to the applicable Leased
Premises, [***].  Tenant’s rights under this paragraph 1c become null and void,
and Tenant will lose all rights herein, if Tenant ceases to use the applicable
Leased Premises for the Primary Permitted Use of the operation of a photography
studio; if Tenant Defaults (as defined in this Master Lease) as to the
applicable Leased Premises; or if Tenant Transfers (as defined in this Master
Lease) this Master Lease, either in its entirety or as to an applicable Leased
Premises, or its rights or interests in this Master Lease, or sublets all or any
portion of any Leased Premises Tenant leases under this Master Lease.
 
d.     If Landlord breaches paragraph 1c, above, this paragraph 1d governs
Tenant’s sole remedy at law or in equity, and in no event will Landlord be
liable to Tenant for any damages even if actual, compensatory, or consequential.
 
(1)     Tenant, within [***] days following Tenant’s receipt of any facts giving
rise to the alleged breach, shall notify Landlord, in writing, of the alleged
breach describing with particularity the facts and circumstances giving rise to
the alleged breach and the date of commencement of the alleged breach.
 
***Confidential treatment requested.

Appendix-1-37

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Tenant: __________
 
(2)     If Landlord fails to cure the alleged breach within at least [***] days
following Landlord’s receipt of notice in accordance with the preceding
paragraph, Tenant may terminate this Master Lease as to the applicable Leased
Premises with at least [***] days written notice to Landlord stating the date on
which Tenant will vacate the applicable Leased Premises.  If Tenant fails to
timely vacate the applicable Leased Premises, Tenant’s notice of termination
will be deemed void; this Master Lease as to the applicable Leased Premises will
continue in full force and effect, and Landlord will be deemed to have cured any
alleged breach of paragraph 1c, above.  Other than the right to seek specific
performance for Landlord’s breach of paragraph 1a, above, Tenant waives any
right it may have available to it at law or in equity for any Claim (as defined
in this Master Lease) resulting from Landlord’s alleged breach of paragraph 1,
above.
 
e.     Despite the preceding paragraph, the following actions do not constitute
a breach of this Master Lease by Landlord:
 
(1)     Sales, marketing, and promotions by Landlord or any of Landlord’s
affiliates, subsidiaries, officers, directors, employees, or agents, of any
photographic services or products including, but not limited to, frames,
accessories, and film; and
 
(2)     Sales of one-hour photography developing products and services and the
taking and sale of passport pictures by any other tenant in the store whose
leases pre-date this Master Lease.
 
f.     Tenant shall not sublet the applicable Leased Premises to a
Sublessee.  Tenant shall not permit any business or other operation to be
conducted in the Leased Premises, other than the Permitted Uses designated in
paragraph 1a, above, which must only be performed by Tenant.
 
g.     Landlord will use commercially reasonable efforts to include Tenant on
the blueprints for store expansions if Tenant is already leasing space in the
Store being expanded.
 
2.      Leased Premises Specifications.
 
a.     Tenant, at its sole cost and expense, shall install, provide, and
maintain all equipment necessary for the operation of its Permitted Uses, as
described in paragraph 1a above, including, but not limited to, any equipment
required by any professional standards, law, rule, or regulation applicable to
Tenant’s business.  To the extent that the installation, provision, or
maintenance of the equipment requires alteration of the Leased Premises that is
not located in a newly constructed Store, Tenant shall comply with the terms of
Article II of this Master Lease.
 
b.     If Landlord terminates a Leased Premises as a result of Store
Renovations, Tenant shall surrender the applicable Leased Premises as required
in Section 17.3 of the Master Lease Agreement and shall remove all property,
Trade Fixtures, and Improvements from the Leased Premises and either return the
Leased Premises to Landlord in broom clean condition or pay Landlord eight
thousand dollars ($8,000).
 
c.     Tenant’s obligations under this Section 2 are in addition to, and not in
lieu of, Tenant’s obligations to prepare the Leased Premises in accordance with
Article II of this Master Lease.
 
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Appendix-1-38

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Tenant: __________
 
3.      Hours of Operation:  Monday through Saturday from [***] pm, closed for
lunch from [***]; Sunday from [***], closed for lunch from [***].
 
4.      Trade Name(s):     Wal-Mart Portrait Studio
                                                  Picture Me
 
As required by paragraph 8c, below, Tenant shall rebrand its trade name and, in
connection therewith, remove the “Wal-Mart” name from all of Tenant’s signage
and materials no later than January 31, 2008.  Until that time, or such earlier
date that Tenant’s right to use the “Wal-Mart” name terminates, Tenant may
conduct its operations under either of the trade names listed above, provided
that any usage of the “Wal-Mart’ name is consistent with the other requirements
of this Master Lease.
 
 
5.      Address of Tenant.  All notices required to be sent to Tenant under this
Master Lease must be sent to:
 

     
Name of Tenant:
 
Portrait Corporation of America, Inc.
Attention:
 
C. David Alexander
Title:
 
Chairman, President & CEO
Address:
 
815 Matthews-Mint Hill Road
   
Matthews, North Carolina 28105
Telephone Number:
 
(704) 588-4351
Facsimile Number:
 
(877) 8332-2406
Email Address:
 
N/A
With Copy To:
 
J. Robert Wren, Jr.
   
815 Matthews-Mint Hill Road
   
Matthews, North Carolina 28105

6.       Advisements.  [Intentionally Omitted]
 
7.       Covenants, Representations, and Warranties.
 
a.       Tenant covenants to promptly inform Landlord of the resignation or
termination of its Chief Executive Officer, Executive Vice-President of Studio
Operations, or both.  Landlord shall have the right to approve, in its sole and
absolute discretion, any successor that Tenant proposes to appoint to any of
such offices.  Tenant shall submit to Landlord the resume of any such proposed
successor officer and shall arrange a meeting between such proposed successor
officer and Landlord.  Landlord shall use commercially reasonable efforts to
meet with such proposed successor within [***] business days (Monday through
Friday) following its receipt of Tenant’s request and shall either approve,
which such approval may not be unreasonably withheld, or disapprove of the
proposed successor within [***] business days (Monday through Friday) following
such personal meeting.
 
***Confidential treatment requested.

Appendix-1-39

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
(1)     If Landlord waives the personal meeting required in the preceding
paragraph, Landlord will base its approval or disapproval of the change on the
proposed replacement’s resume provided to Landlord by Tenant.
 
(2)     Despite anything to the contrary elsewhere in this Master Lease,
Landlord’s approval is not required with respect to any proposed successor
officer if the proposed successor officer has at least five (5) years experience
as the Chief Executive Officer, President, or Chief Operating Officer of a
retail chain that experienced positive sales and income growth for a minimum of
three (3) out of the last five (5) years during which the proposed successor
officer held such office, that accrued annual sales of at least [***], and that
consists of at least [***] stores, provided that the proposed successor officer
has not been convicted of a felony nor has been terminated from such a position
for poor performance.
 
b.      Tenant covenants that in the event of a Change in Control (as defined
below), Tenant shall advise Landlord in advance of the proposed Change in
Control, and Landlord will have five (5) business days (Monday through Friday)
to approve, which such approval may not be unreasonably withheld,  or disapprove
of the Change in Control.  In the event Landlord disapproves of the Change in
Control, such Change in Control either may not take place or may take place,
provided that, if the Change of Control takes place, Landlord, at is election,
may either declare a Default of this Master Lease or demand that Tenant close up
to an additional five hundred (500) locations in addition to the closures
required below.  If Landlord exercises its right to demand additional closures,
Tenant will provide Landlord, for Landlord’s approval, a list of locations
Tenant will close along with the proposed schedule for closings.  All locations
approved by Landlord to be closed must be closed within six (6) months following
Landlord’s exercise of the above described right, unless any time within that
six (6) months falls between October 1st of a year and December 31st of that
same year.  In that case, the six (6) month period described in this paragraph
will be extended by three (3) months.
 
(1)     Despite the previous paragraph, Landlord’s approval of a Change in
Control is not required if the Change in Control results in the control of
Tenant by an investment company with at least [***] in invested capital that is
not invested in a competitor of either Tenant or Landlord; a company or
companies with consolidated group annual revenues exceeding [***] and with sales
and profits that increased in three (3) out of the five (5) years prior to the
Change in Control;  a group of unaffiliated individuals whose collective net
worth exceeds five (5) times their acquisition cost; or any combination of the
above.
 
(2)     For purposes of this Section 7, “Change in Control” means the direct or
indirect acquisition, other than as a result of the financial restructuring and
chapter 11 proceedings commenced by Tenant on August 31, 2006, of the power to
vote 50.1% or more of Tenant’s voting securities.
 
c.      Tenant shall provide Landlord quarterly financial statements that are
prepared by Tenant, reviewed on a quarterly basis by an independent certified
public accountant, and audited on an annual basis by such independent certified
public accountant.  A solvency certificate in which an officer of Tenant
certifies to Landlord that Tenant is solvent and is generally paying its debts
as the debt becomes due must accompany each financial statement.
 
8.      Miscellaneous.
 
***Confidential treatment requested.

Appendix-1-40

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
a.       Lease Term.
 
(1)    Despite anything to the contrary elsewhere in this Master Lease, this
Master Lease will not be effective unless the form and substance of the order
from the presiding bankruptcy court approving this Master Lease is acceptable to
Landlord, in its sole and absolute discretion, and such order becomes final and
nonappealable.
 
(2)     Subject to the preceding paragraph, this Master Lease is effective
February 1, 2007 and continues for three (3) years unless terminated earlier as
the result of a Default (as defined in this Master Lease) or as otherwise
permitted under this Master Lease.
 
(3)     This Master Lease automatically extends for an additional two (2) years
for each applicable Leased Premises from which Landlord receives from Tenant
Base Rent for the period from July 1, 2008 through June 30, 2009 at a rate equal
to or greater than [***] per square foot, provided that no Default (as defined
in this Master Lease) has occurred or is continuing.
 
(4)     For each Leased Premises from which Landlord receives from Tenant Base
Rent for the period of July 1, 2008 through June 30, 2009 at a rate less than
[***] per square foot, Landlord and Tenant may mutually agree to extend this
Master Lease for two (2) years by written agreement executed no later than
[***], provided that no Default (as defined in this Master Lease) has occurred
and is continuing.
 
(5)     If this Master Lease is not extended for any reason as to any Leased
Premises, Tenant will close the applicable Leased Premises and deliver such
locations to Landlord in a broom clean condition and consistent with all other
obligations of Tenant under this Master Lease on January 31, 2010 or such
earlier date as may be agreed to by Landlord and Tenant.
 
b.     Rent.  Provided Tenant is not in Default (as defined in this Master
Lease) on its Rent obligations, Base Rent, which will accrue daily for the term
of this Master Lease and any renewal thereof, is:
 
(1)     From June 1, 2006 through January 31, 2008, [***] of the monthly Gross
Sales (as defined below).  Tenant shall pay Landlord the Base Rent due by the
tenth (10th) calendar day of the third month following the month in which such
Gross Sales occurred.  For example, the monthly Base Rent due for the period
ending June 30, 2006 is due on September 10, 2006.
 
(2)     From February 1, 2008 through January 31, 2009, [***] of the monthly
Gross Sales (as defined below).  Tenant shall pay Landlord Base Rent due by the
tenth (10th) calendar day of the second month following the month in which such
Gross Sales occurred.  For example, the monthly Base Rent due for the period
ending February 29, 2008 is due on April 10, 2008.
 
(3)     From February 1, 2009 through the end of the Lease Term, including any
renewal, [***] of the monthly Gross Sales (as defined below).  Tenant shall pay
Landlord the Base Rent due by the tenth (10th) calendar day of the month
following the month in which such Gross Sales occurred.  For example, the
monthly Base Rent due for the period ending February 28, 2009 is due on March
10, 2009.
 
(4)     In the event that Tenant fails to pay any amount due under this Master
Lease within five (5) days of the date such amount is due, Rent for the full
term of this Master Lease will automatically reset to
 
***Confidential treatment requested.

Appendix-1-41

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
[***] of the monthly Gross Sales, with any retroactive arrearages due and
payable immediately.
 
c.     Rebranding.
 
(1)     Tenant and Landlord agree that Tenant’s right to use the “Wal-Mart”
name, which is Landlord’s trade name, constitutes a non-exclusive trademark
license and, therefore, is a personal right to the Tenant, which may not be
assigned under applicable law including, without limitation, state and federal
trademark law, without the prior, written consent of Landlord.
 
(2)     Tenant shall remove the “Wal-Mart” name from all Leased Premises and
studios including, without limitation, any signage and promotional materials and
activity and cease using the “Wal-Mart” name no later than January 31, 2008,
except as permitted elsewhere in this Master Lease.
 
(3)      [***].
 
d.     Rebranding Escrow.  [***].  Tenant shall deposit the Rebranding Escrow
within three (3) business days of the date on which the order from the presiding
bankruptcy court approving this Master Lease becomes final and
nonappealable.  Tenant may only draw on the Rebranding Escrow to cover the costs
of the rebranding required in paragraph 8c, above.  For clarification, the
Rebranding Escrow applies to a total of [***] installments of Rent, which have
payments with due dates from August 10, 2006 through April 10, 2007.
 
(1)     Tenant shall deposit the Rebranding Escrow due for subsequent months no
later than the [***)] calendar day of each such month.
 
(2)     Any balance of the Rebranding Escrow remaining in the escrow account
after [***] must be paid to Landlord as additional Rent within ________ business
days (Monday through Friday).  If Tenant fails to pay Landlord the
above-described balance of the Rebranding Escrow, Landlord may withdraw and
retain as additional rent all amounts then remaining or thereafter deposited
into the escrow account.  Landlord’s withdrawal of such funds does not in any
way excuse Tenant’s obligation to complete the Rebranding as required in
paragraph 8c, above.
 
(3)     Tenant shall provide Landlord with a monthly accounting of deposits into
and disbursements from the escrow account in a form acceptable to Landlord, in
its sole and absolute discretion.
 
e.     Store Closings.  For purposes of this Section, “Fiscal Year” means
February 1st of a given year through January 31st of the following year.
 
(1)     Tenant, no later than July 31, 2007, shall close the five hundred (500)
Leased Premises designated in Exhibit ______, which is attached to and
incorporated into this Master Lease.
 
(2)     Starting with the Fiscal Year ending [***] and continuing through the
Lease Term of this Master Lease, including any extension, until the first Fiscal
Year in which Tenant achieves
 
***Confidential treatment requested.

Appendix-1-42

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
positive comparable sales in the Leased Premises, Tenant shall close an
additional five hundred (500) Leased Premises every Fiscal Year in which either
Landlord’s total US comparable stores sales are flat or positive and Tenant’s
comparable stores sales for the same Fiscal Year are negative, or Landlord’s
total US comparable stores sales are negative and Tenant’s comparable stores
sales for that same Fiscal Year are not positive and are more than fifty (50)
basis points of Landlord’s comparable stores sales.  After the first year that
Tenant achieves positive comparable sales, Tenant is no longer obligated to
close Leased Premises as described in the preceding sentence.
 
(3)     Tenant shall submit its total sales and, if applicable, will submit to
Landlord for approval a list of Leased Premises to be closed, along with a
schedule of closings, by February 10th of the subsequent Fiscal Year or no later
than five (5) days after Landlord publishes its US sales for that Fiscal
Year.  All such Leased Premises closings must be completed no later than July
31st of the subsequent Fiscal Year.  Approval of Leased Premises Tenant proposes
to close in accordance with this Section 8e will be in Landlord’s sole and
absolute discretion.
 
(4)     All Leased Premises closed in accordance with this Section 8e must be
closed in accordance with Section 17.3 of the Master Lease Agreement, except
that Tenant shall leave each Leased Premises closed in accordance with this
Section 8e in broom clean condition.
 
f.      Additional Events of Default. In addition to the Events of Default
designated elsewhere in this Master Lease, an Event of Default occurs if:
 
(1)     Tenant commences or involuntarily becomes the subject of any case filed
under chapter 7 or chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”), or any similar insolvency proceeding.  If Tenant so Defaults
on this Master Lease, Tenant will vacate the Leased Premises as soon after the
above described filing as possible but no later than the expiration of the
statutory period under section 365 of the Bankruptcy Code for assumption of
leases unless this Master Lease has been assumed by that date pursuant to an
order entered upon proper motion with appropriate notice and opportunity for
parties-in-interest including, without limitation, Landlord, to respond to or
object to such motion.  In light of the Intent (as described below), the
statutory period set forth in section 365(d)(4)(A) of the Bankruptcy Code for
assumption of leases will not extend for any reason including, without
limitation, pending the outcome of any related litigation or appeal, unless
Landlord consents in writing.
 
(2)     Tenant defaults on any agreement with a lender with respect to any debt
facility and: (i) as a result of such default, the debt facility is accelerated;
(ii) Tenant fails to cure such default; or (iii) the lender, within [***] days
after the occurrence of the default, refuses to permanently waive the
default.  Tenant shall notify Landlord of any notice of default from any lender
with respect to any debt facility promptly after receiving such notice.
 
g.     Additional Remedies.  In addition to Landlord’s rights and remedies
available to it elsewhere in this Master Lease, at law, or in equity, if Tenant
Defaults on this Master Lease and in light of the Intent of the parties as
described below, Tenant waives the automatic stay or any similar provision, if
applicable, and authorizes Landlord to exercise any and all remedies available
to Landlord without need for notice or any further proceedings including,
without limitation, court proceedings, upon the earlier to occur of either the
termination of this Master Lease or the expiration of the statutory period
described in paragraph 8f(1), above.
 
***Confidential treatment requested.

Appendix-1-43

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
h.     Control.  To the extent Article X of the Master Lease Agreement conflicts
with this paragraph 8h, this paragraph 8h governs.  Tenant shall obtain
Landlord’s consent prior to Tenant’s causing or permitting, within any twelve
(12) month period, the Transfer of more than either an aggregate of twenty five
per cent (25%) of Tenant’s voting shares or twenty five per cent (25%) of the
value of Tenant’s unencumbered assets as of the date of  the Transfer.  If
Landlord does not consent, Landlord, in its sole discretion, may declare a
Default of this Master Lease.
 
(1)     If Landlord consents to the proposed Transfer of Tenant’s voting shares,
as described in the preceding sentence, or of Tenant’s unencumbered assets, as
described in the preceding sentence, Landlord will notify Tenant of its consent
within five (5) business days after Landlord receives Tenant’s written notice of
the proposed Transfer.  Landlord may not unreasonably withhold its consent.
 
(2)     Despite the foregoing, Landlord's consent will not be required under
this Master Lease prior to the trading of Tenant's shares on the public
securities markets, except that Landlord's consent will be required prior to
additional purchases by any person or group who is or becomes the beneficial
owner of 25% or more of Tenant's voting shares.
 
(3)     Additionally, Landlord’s consent is not required under this Master Lease
for any Transfer of Tenant’s unencumbered assets that is for fair value and that
does not diminish Tenant’s ability to operate its business in the Leased
Premises in accordance with this Master Lease.
 
(4)     For the avoidance of doubt, Tenant does not have the right to Transfer
(as defined in this Master Lease) or assign its rights under all or any portion
of this Master Lease to a third party in any manner or under any
circumstances.  As noted in the Intent (described below), the nature of the
relationship between the parties is unique and the nature of the Leased Premises
is unique.  Tenant and Landlord agree that this Master Lease qualifies as, and
is treated as, a “personal services contract,” as such term is used in Section
365 of the Bankruptcy Code.
 
i.       Letter of Credit.  Tenant shall provide Landlord with an irrevocable
standby letter of credit in the amount of [***] drawable by Landlord upon any
failure by or inability of Tenant to timely meet its obligations under this
Master Lease or to Tenant’s customers including, without limitation, obligations
resulting from the filing of a subsequent bankruptcy proceeding by or against
Tenant or the shutdown, not previously authorized by Landlord, by Tenant of
operations at any Leased Premises.  Tenant shall maintain this letter of credit
on an evergreen basis during the term of this Master Lease, including any
extension of this Master Lease.  Landlord shall use the proceeds from this
letter of credit as it determines in its sole and absolute discretion including,
without limitation, to refund customer deposits; to cover other transitional
costs including, without limitation, reletting the Leased Premises; and to
acquit any other pending obligations of Tenant.
 
j.      Audit. For purposes of this Master Lease, “Gross Sales” means the
aggregate selling price of all merchandise sold or delivered at or from any part
of the Leased Premises and the charges for all services sold or performed at or
from any part of the Leased Premises or at any other location if the merchandise
is taken from the Leased Premises or the order for services taken at the Leased
Premises including sales and charges for cash or credit and credit sales
regardless of collections.  “Gross Sales” excludes refunds made by Tenant to its
customers for merchandise originally included in Gross Sales but returned to
 
***Confidential treatment requested.

Appendix-1-44

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
Tenant; exchanges of merchandise between stores of Tenant where such exchanges
are made solely for the convenient operation of Tenant’s business; and the
amount of any city, country, or state sales tax on sales paid to a taxing
authority by Tenant, but not by any vendor of Tenant.  A sale is made in the
Leased Premises if the merchandise or services are ordered from the Leased
Premises in person, via telephone facsimile, internet, or other electronic
means, or filled at the Leased Premises, or delivered from the Leased Premises.
 
(1)     Landlord has the right to inspect and audit all books and records and
other papers and files of Tenant relating to Gross Sales.  Any such inspection
or audit will be conducted during Tenant’s regular business hours, and if
Landlord so requests, Tenant will produce the appropriate books and records and
other papers and files relating to Gross Sales.
 
(2)     If any audit conducted in accordance with this paragraph 8j discovers
evidence of under-reporting of Gross Sales by an amount equal to or greater than
[***] or more in any given month, or by [***] or more in any given two months,
Tenant will be in Default of this Master Lease.
 
k.     Intent.  Landlord and Tenant agree that they have a unique relationship
and that the terms of this Master Lease have been negotiated and drafted based
on the advice and with the assistance of experienced legal counsel with the
express intention of reflecting that relationship (the “Intent”).  Each
provision of this Master Lease has been drafted and incorporated herein in light
of and in furtherance of the Intent and in light of each of the following
acknowledgements by Tenant:
 
(1)     The unique nature of Landlord’s operations and reputation as one of the
largest operators of discount retail stores dedicated to customer satisfaction
and prompt, quality customer service featuring a broad assortment of quality
merchandise at low, competitive prices;
 
(2)     The unique circumstances of maintaining Tenant’s operations within
Landlord’s Stores and the concomitant obligations of Tenant to observe each and
every term of this Master Lease in order to further Landlord’s operations and
reputation and not to, in any way, impair the shopping experience of Landlord’s
customers;
 
(3)     The risk to Landlord’s operations and reputation of Tenant’s financial
problems and uncertainties created during Tenant’s Chapter 11 proceedings
(pending on the date of this Master Lease);
 
(4)     The propriety and importance of protecting Landlord’s unique Store
space, operations, and reputation in the vent of a subsequent Chapter 11 or
other insolvency event of Tenant;
 
(5)     That Landlord is a “shopping center” and that this Master Lease is a
“shopping center lease,” as those terms are defined and used in section 365 of
chapter 11 of the Bankruptcy Code;
 
(6)     That Tenant is not an affiliate or agent of, or in any way controlled by
or under the control of Landlord; and
 
(7)     The reliance of Landlord on Tenant’s representations that Tenant will
abide by the terms of this Master Lease including, without limitation, the
limited Permitted Use of the Leased Premises, as described in paragraph 1a,
above, and the prohibition on assignment and transfer.
 
***Confidential treatment requested.

Appendix-1-45

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
l.      Not Severable. Whether or not certain of the terms of this Master Lease
are specific to or can be applied to individual Leased Premises, the entire
Master Lease including, without limitation, the Lease Term and Rent, was
negotiated and agreed upon based on the integrated nature of the entire
agreement and the Intent of the parties is to create an integrated
agreement.  The parties acknowledge and aver that this Master Lease and any of
the entitlements hereunder would make no economic sense on a partial or several
basis.  Accordingly, in view of the foregoing and of the Intent, Tenant agrees
that this Master Lease and the Leased Premises hereunder cannot be severed or
partially assumed in any manner without the express written consent of
Landlord.  Tenant waives any and all rights, if any, to seek to sever or
partially assume any portion of this Master Lease pursuant to section 365 of the
Bankruptcy Code or otherwise.
 
m.     Despite anything to the contrary is Section 19.13 of the Master Lease
Agreement, Tenant shall pay all reasonable attorney’s fees and expenses incurred
by Landlord by reason of any Default by Tenant and the enforcement of any
remedies in connection with or related to such Default.  Additionally, Tenant
agrees that in the event of a subsequent chapter 11, chapter 7, or similar
proceeding, any attorney’s fees or expenses incurred following the filing of the
petition for relief, to the extent allowed under applicable state law, are
recoverable by Landlord as a pecuniary loss.  Therefore, any such attorney’s
fees or expenses must be paid by Tenant as a prerequisite to the assumption of
this Master Lease pursuant to section 365 of the Bankruptcy Code or otherwise.
 
n.     The Master License Agreement entered into by Tenant and Landlord on April
4, 2002 (“License Agreement”) is null and void and is superseded by this Master
Lease.  All locations licensed under that License Agreement are hereby Leased
Premises under this Master Lease and subject to the terms and conditions of this
Master Lease.  Landlord and Tenant may execute either a single Attachment A
listing all locations licensed under the License Agreement bringing those
locations under this Master Lease or execute individual Attachment As for each
location.
 
o.     This Appendix-1 is attached to and incorporated into the Master Lease as
part of the entire agreement between Landlord and Tenant, as set forth in
Section 19.3 of the Master Lease Agreement.  All capitalized terms used in this
Appendix-1 have the meanings set forth in this Master Lease, unless otherwise
specifically stated in this Appendix-1.  IN THE EVENT OF CONFLICT BETWEEN THE
MASTER LEASE AGREEMENT AND ANY OTHER DOCUMENT ON THE SUBJECT MATTERS SET FORTH
IN THIS APPENDIX-1, THE TERMS OF THIS APPENDIX-1 GOVERN AND CONTROL.

 
[signature page to follow]
 
***Confidential treatment requested.

Appendix-1-46

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
Signed:
 
Witness:
 
Landlord:  Wal-Mart Stores, Inc.  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores, Inc.
                 
 
                     
Witness:
 
Landlord:  Wal-Mart Stores East, LP  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores East, LP
                 
 
                     
Witness:
 
Landlord:  Wal-Mart Stores Texas, LP  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores Texas, LP
     
 
                     
Witness:
 
Landlord:  Wal-Mart Louisiana, LLC  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Louisiana, LLC
     
 
                     
Signed:
                     
Witness:
 
Tenant:  Portrait Corporation of America, Inc.  
             
 
 
 
 
 
     
Signature
 
Date
             
 
 
 
         
Printed Name
                     
 
         
Title
     

***Confidential treatment requested.

Appendix-1-47

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
Appendix-2 - Insurance
 
Tenant shall procure and maintain, in accordance with the Master Lease, the
“primary” insurance policies described below in accordance with the below
conditions.
 
1.     Worker’s Compensation insurance with statutory limits, or if no statutory
limits exist, with minimum limits of [***] per occurrence, and Employer’s
Liability coverage with minimum limits of [***], for each employee for bodily
injury by accident and for each employee for bodily injury by disease.  Tenant
shall cause Insurer to issue an endorsement providing stopgap insurance in
monopolistic states in which a Leased Premises under this Master Lease may be
located.
 
2.     Commercial General Liability insurance with a [***] minimum limit per
occurrence for each Leased Premises leased under the Master Lease or with fresh
aggregate limits for each Leased Premises leased under the Master Lease.
 
a.     The Commercial General Liability policy required under this Paragraph 2
should contain neither exclusion for contractual liability assumed by Tenant in
a lease nor any Absolute Pollution exclusion, unless these coverages are
provided by a separate policy with minimum limits equal to the Commercial
General Liability policy limits required by this Paragraph 2.
 
b.     Any policy obtained to satisfy the obligations of this Paragraph 2 must
list as Additional Insureds the parties described below in Paragraph 4.
 
c.     Tenant shall submit to Landlord no later than thirty (30) days after the
actual Rent Commencement Date, Certificates of Insurance and endorsements
evidencing Tenant’s compliance with this Paragraph 2.
 
3.     Tenant may satisfy the minimum limits required in Paragraphs 1 and 2,
above, by procuring and maintaining, in accordance with Article XIV of the
Master Lease, Umbrella/Excess Liability insurance on an umbrella basis, in
excess over, and no less broad than the primary liability coverage; with the
same inception and expiration dates as the primary liability coverage it is in
excess of; with minimum limits necessary to satisfy the required primary minimum
limits; and which “drop down” for any exhausted aggregate limits of the primary
liability coverage.  Tenant shall cause Insurer to issue an endorsement to any
policy Tenant procures in satisfaction of its obligations in this paragraph
providing fresh per occurrence limits or fresh aggregate limits for each Leased
Premises leased under this Master Lease and listing as Additional Insured the
parties described below in Paragraph 4.
 
4.     Additional Insureds are Wal-Mart Stores, Inc., its Subsidiaries and its
Affiliates, and the directors, officers, shareholders, employees, agents, and
representatives, and the respective successors and assigns of each, and any
party Landlord has a contractual obligation to indemnify for Claims in
connection with the Store or the Leased Premises.
 
5.     This Appendix-2 attaches to and incorporates into the Master Lease
Agreement as part of the entire agreement between Landlord and Tenant, as set
forth in Section 19.3 of the Master Lease
 
***Confidential treatment requested.

Appendix-1-48

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
Agreement.  All capitalized terms used in this Appendix-2 have the meanings set
forth in this Master Lease, unless otherwise specifically stated in this
Appendix-2.  In the event of conflict between the Master Lease Agreement and any
other document on the subject matters set forth in this Appendix-2, the terms of
this Appendix-2 control.
 
[signature page to follow]
 
***Confidential treatment requested.

Appendix-2-49

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED WITH BRACKETS.

Tenant: __________
 
Signed:

Witness:
 
Landlord:  Wal-Mart Stores, Inc.  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores, Inc.
     
 
                     
Witness:
 
Landlord:  Wal-Mart Stores East, LP  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores East, LP
     
 
                     
Witness:
 
Landlord:  Wal-Mart Stores Texas, LP  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Stores Texas, LP
     
 
                     
Witness:
 
Landlord:  Wal-Mart Louisiana, LLC  
             
 
 
 
 
 
     
Taylor C. Smith
 
Date
     
Wal-Mart Louisiana, LLC
     
 
                                 
Signed:
                     
Witness:
 
Tenant:  Portrait Corporation of America, Inc.  
             
 
 
 
 
 
     
Signature
 
Date
             
 
 
 
         
Printed Name
                     
 
         
Title
     

 
Appendix-2-50