**Exhibit 10.24**

 

NEVADASHOPPING CENTER LEASE

 

MCQUEENCROSSINGS

 

between

 

MCQUEENCROSSINGS, LLC,

ANevada Limited Liability Company

 

“Landlord”

 

and

 

NEVADASECURITY BANK,

ANevada Corporation

 

“Tenant”

 

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**TABLE OFCONTENTS**

 
| ARTICLE I   | GRANT AND BASIC TERMS           |                                                      |                                    |
|-------------|---------------------------------|-----------------------------------------------------------|-----------------------------------------|
|        | Section 1.1                     | Effective Date of Lease                                   |                                    |   |
|        | Section 1.2                     | Landlord                                                  |                                    |   |
|        | Section 1.3                     | Tenant                                                    |                                    |   |
|        | Section 1.4                     | Premises                                                  |                                    |   |
|        | Section 1.5                     | Length of Term                                            |                                    |   |
|        | Section 1.6                     | Commencement of Term                                      |                                    |   |
|        | Section 1.7                     | Acknowledgment of Commencement Date                       |                                    |   |
|        | Section 1.8                     | Permitted Uses                                            |                                    |   |
|        | Section 1.9                     | Tenant’s Guarantor                                   |                                    |   |
|        | Section 1.10                    | Initial Security Deposit                                  |                                    |   |
|        | Section 1.11                    | Minimum Monthly Rent and Other Charges  Payable by Tenant |                                    |   |
|        |                            | (a) Minimum Monthly Rent                                  |                                    |   |
|        |                            | (b) Other Periodic Payments                               |                                    |   |
|        | Section 1.12                    | Excuse of Landlord’s Performance                     |                                    |   |
|        | Section 1.13                    | Intentionally Omitted                                     |                                    |   |
|        | Section 1.14                    | Riders                                                    |                                    |   |
|        |                            |                                                      |                                    |   |
| ARTICLE II  | LEASE TERM                      |                                                      |                                    |
|        | Section 2.1                     | Lease of Premises for Lease Term                          |                                    |   |
|        | Section 2.2                     | Delay in Completion                                       |                                    |   |
|        | Section 2.3                     | Early Occupancy                                           |                                    |   |
|        | Section 2.4                     | Holding Over                                              |                                    |   |
|        | Section 2.5                     | Successors                                                |                                    |   |
|        |                            |                                                      |                                    |   |
| ARTICLE III | MINIMUM MONTHLY RENT            |                                                      |                                    |
|        | Section 3.1                     | Time and Manner of Payment                                |                                    |   |
|        | Section 3.2                     | Intentionally Omitted                                     |                                    |   |
|        | Section 3.3                     | Intentionally Omitted                                     |                                    |   |
|        | Section 3.4                     | Intentionally Omitted                                     |                                    |   |
|        | Section 3.5                     | Security Deposit ***Increases***                          |                                    |   |
|        | Section 3.6                     | Termination; Advance Payments                             |                                    |   |
|        |                            |                                                      |                                    |   |
| ARTICLE IV  | OTHER CHARGES PAYABLE BY TENANT |                                                      |                                    |
|        | Section 4.1                     | Additional Rent                                           |                                    |   |
|        | Section 4.2                     | Real Property Taxes .                                     |                                    |   |
|        |                            | (a) Payments of Taxes                                     |                                    |   |
|        |                            | (b) Definition of  “Real Property Taxes”        |                                    |   |
|        | Section 4.3                     | Personal Property Taxes                                   |                                    |   |
|        | Section 4.4                     | Utilities                                                 |                                    |   |
|        | Section 4.5                     | Payment of Operating Costs .                              |                                    |   |
|        |                            | (a) Tenant’s Pro Rata Share of Expense .             |                                    |   |
|        |                            | (b) Operating Cost                                        |                                    |   |
|        |                            | (c) Changes in Square  Footage of Premises                |                                    |   |
|        | Section 4.6                     | Insurance Premiums                                        |                                    |   |
|        |                            | (a)                                                       | Liability Insurance                     |   |
|        |                            | (b)                                                       | Hazard and Rental Income Insurance      |   |
|        |                            | (c)                                                       | Insurance of Improvements               |   |
|        |                            | (d)                                                       | Payment of Premium; Insurance  Policies |   |
|        |                            | (e)                                                       | Increase  in Fire Insurance Premium .   |   |
|        |                            | (f)                                                       | Plate Glass                             |   |
|        |                            | (g)                                                       | Boiler Insurance                        |   |
|        |                            | (h)                                                       | Waiver of Subrogation                   |   |
|        |                            | (i)                                                       | Form of Policies                        |   |
|        | Section 4.7                     | Interest on Past Due Obligations                          |                                    |   |
|        | Section 4.8                     | Collection of Operating Costs                             |                                    |   |
|        |                            |                                                      |                                    |   |
| ARTICLE V   | RECORDS AND BOOKS OF ACCOUNT    |                                                      |                                    |
|        | Section 5.1                     | Intentionally Omitted                                     |                                    |   |
|        | Section 5.2                     | Intentionally Omitted :                                   |                                    |   |
|        |                            |                                                      |                                    |   |
| ARTICLE VI  | AUDIT                           |                                                      |                                    |
|        | Section 6.1                     | Intentionally Omitted                                     |                                    |   |
|        | Section 6.2                     | Intentionally Omitted                                     |                                    |   |
|             |                                 |                                                           |                                         |  |  |

 

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| ARTICLE VII  | CONSTRUCTION OF PREMISES.                                      |                                             |                                  |
|--------------|----------------------------------------------------------------|--------------------------------------------------|---------------------------------------|
|         | Section 7.1                                                    | Landlord and Tenant Improvements                 |                                  |   |
|         | Section 7.2                                                    | Parking Facilities                               |                                  |   |
|         | Section 7.3                                                    | Changes and Additions to Buildings.              |                                  |   |
|         | Section 7.4                                                    | Intentionally Omitted                            |                                  |   |
|         | Section 7.5                                                    | Right to Adjust                                  |                                  |   |
|         | Section 7.6                                                    | Intentionally Omitted                            |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE VIII | USE OF PROPERTY                                                |                                             |                                  |
|         | Section 8.1                                                    | Permitted Uses                                   |                                  |   |
|         | Section 8.2                                                    | Manner of Use                                    |                                  |   |
|         |                                                           | (a)                                              | Interference with Use/Nuisance        |   |
|         |                                                           | (b)                                              | Violation of Law/Insurance Provisions |   |
|         |                                                           | (c)                                              | Permits                               |   |
|         |                                                           | (d)                                              | Store Operation .                     |   |
|         |                                                           | (e)                                              | Change of Name                        |   |
|         |                                                           | (f)                                              | Solicitation of Business              |   |
|         | Section 8.3                                                    | Competitive Business                             |                                  |   |
|         | Section 8.4                                                    | Indemnification                                  |                                  |   |
|         |                                                           | (a) Indemnification of Landlord.                 |                                  |   |
|         |                                                           | (b)  Indemnification of Tenant.                  |                                  |   |
|         | Section 8.5                                                    | Landlord’s Access                           |                                  |   |
|         | Section 8.6                                                    | Excavation                                       |                                  |   |
|         | Section 8.7                                                    | Quiet Possession                                 |                                  |   |
|         | Section 8.8                                                    | Intentionally Omitted                            |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE IX   | HAZARDOUS MATERIALS .                                          |                                             |                                  |
|         | Section 9.1                                                    | Prohibition of  Storage .                        |                                  |   |
|         | Section 9.2                                                    | Clean-Up                                         | ,                                     |   |
|         | Section 9.3                                                    | Business .                                       |                                  |   |
|         | Section 9.4                                                    | Termination  of Lease .                          |                                  |   |
|         | Section 9.5                                                    | Assignment and  Subletting                       |                                  |   |
|         | Section 9.6                                                    | Landlord’s  Right to Perform Tests          |                                  |   |
|         | Section 9.7                                                    | Tenant’s  Obligations .                     |                                  |   |
|         | Section 9.8                                                    | Definition of  “Hazardous Materials” . |                                  |   |
|         | Section 9.9                                                    | Landlord’s  Warranty and Indemnification    |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE X    | PARKING AND COMMON USE AREAS AND FACILITIES                    |                                             |
|         | Section 10.1                                                   | Control of Common Areas by Landlord              |                                  |   |
|         | Section 10.2                                                   | License                                          |                                  |   |
|         | Section 10.3                                                   | Merchants’ Association                      |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE XI   | SIGNS, AWNINGS, CANOPIES, FIXTURES,  ALTERATIONS, IMPROVEMENTS |                                             |
|         | Section 11.1                                                   | Signs and Auctions                               |                                  |   |
|         | Section 11.2                                                   | Installation by Tenant                           |                                  |   |
|         | Section 11.3                                                   | Improvements.                                    |                                  |   |
|         | Section 11.4                                                   | Non-Removal by Tenant                            |                                  |   |
|         | Section 11.5                                                   | Intentionally Omitted                            |                                  |   |
|         | Section 11.6                                                   | Liens                                            |                                  |   |
|         | Section 11.7                                                   | Signs, Awnings and Canopies.                     |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE XII  | CONDITION OF PROPERTY; MAINTENANCE, REPAIRS  AND ALTERATIONS   |                                             |
|         | Section 12.1                                                   | Existing Conditions                              |                                  |   |
|         | Section 12.2                                                   | Exemption of Landlord from Liability;  Waiver    |                                  |   |
|         | Section 12.3                                                   | Tenant’s Obligations .                      |                                  |   |
|         | Section 12.4                                                   | Landlord’s Obligations                      |                                  |   |
|         | Section 12.5                                                   | Rules and Regulations .                          |                                  |   |
|         | Section 12.6                                                   | Condition Upon Termination                       |                                  |   |
|         | Section 12.7                                                   | Monitoring, Inspecting, and Remediating  Mold    |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE XIII | DAMAGE OR  DESTRUCTION                                         |                                             |                                  |
|         | Section 13.1                                                   | Partial Damage to Leased Premises                |                                  |   |
|         | Section 13.2                                                   | Total or Substantial Destruction                 |                                  |   |
|         | Section 13.3                                                   | Intentionally Omitted                            |                                  |   |
|         | Section 13.4                                                   | Landlord’s Obligations.                     |                                  |   |
|         | Section 13.5                                                   | Temporary Reduction of Rent                      |                                  |   |
|         | Section 13.6                                                   | Waiver                                           |                                  |   |
|         |                                                           |                                             |                                  |   |
| ARTICLE XIV  | CONDEMNATION                                                   |                                             |                                  |
|         | Section 14.1                                                   | Total Condemnation.                              |                                  |   |
|         | Section 14.2                                                   | Total Condemnation of Parking Area               |                                  |   |
|         | Section 14.3                                                   | Partial Condemnation.                            |                                  |   |
|              |                                                                |                                                  |                                       |  |  |

 

ii

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|          | Section 14.4              | Partial Condemnation of Parking Area .                              |   |   |
|---------------|---------------------------|---------------------------------------------------------------------|--------|--------|
|          | Section 14.5              | Condemnation of Less than a Fee                                     |   |   |
|          | Section 14.6              | Distribution of Condemnation Award .                                |   |   |
|          |                      |                                                                |   |   |
| ARTICLE XV    | ASSIGNMENT AND SUBLETTING |                                                                |   |
|          | Section 15.1              | Landlord’s Consent Required.                                   |   |   |
|          | Section 15.2              | Transfers of Interests in Tenant  Requiring Landlord’s Consent |   |   |
|          | Section 15.3              | Grant of Concessions; Conditions to  Grant .                        |   |   |
|          | Section 15.4              | Transfer Without Consent .                                          |   |   |
|          | Section 15.5              | No Release of Tenant                                                |   |   |
|          | Section 15.6              | Landlord’s Election .                                          |   |   |
|          | Section 15.7              | No Merger                                                           |   |   |
|          | Section 15.8              | Assignment Fees and Procedures                                      |   |   |
|          |                      |                                                                |   |   |
| ARTICLE XVI   | DEFAULTS;REMEDIES         |                                                                |   |
|          | Section 16.1              | Covenants and Conditions                                            |   |   |
|          | Section 16.2              | Defaults                                                            |   |   |
|          | Section 16.3              | Default by Landlord                                                 |   |   |
|          | Section 16.4              | Remedies                                                            |   |   |
|          | Section 16.5              | The Right to Relet the Premises                                     |   |   |
|          | Section 16.6              | Waiver of Rights of Redemption-                                     |   |   |
|          | Section 16.7              | Cumulative Remedies                                                 |   |   |
|          | Section 16.8              | Late Charges                                                        |   |   |
|          |                      |                                                                |   |   |
| ARTICLE XVII  | PROTECTION OF CREDITORS   |                                                                |   |
|          | Section 17.1              | Subordination                                                       |   |   |
|          | Section 17.2              | Attornment                                                          |   |   |
|          | Section 17.3              | Signing of Documents                                                |   |   |
|          | Section 17.4              | Estoppel Certificates .                                             |   |   |
|          | Section 17.5              | Tenant’s Financial Condition                                   |   |   |
|          | Section 17.6              | Mortgagee Protection Clause                                         |   |   |
|          |                      |                                                                |   |   |
| ARTICLE XVIII | LEGAL COSTS               |                                                                |   |
|          | Section 18.1              | Legal Proceedings                                                   |   |   |
|          | Section 18.2              | Landlord’s Consent                                             |   |   |
|          |                      |                                                                |   |   |
| ARTICLE XIX   | MISCELLANEOUS PROVISIONS  |                                                                |   |
|          | Section 19.1              | Non-Discrimination                                                  |   |   |
|          | Section 19.2              | Landlord’s Liability; Certain Duties                           |   |   |
|          | Section 19.3              | Severability .                                                      |   |   |
|          | Section 19.4              | Interpretation                                                      |   |   |
|          | Section 19.5              | Other Tenancies                                                     |   |   |
|          | Section 19.6              | Entire Agreement                                                    |   |   |
|          | Section 19.7              | Notices                                                             |   |   |
|          | Section 19.8              | Waivers                                                             |   |   |
|          | Section 19.9              | No Recordation                                                      |   |   |
|          | Section 19.10             | Binding Effect; Choice of Law                                       |   |   |
|          | Section 19.11             | Corporate or Company Authority;  Partnership Authority              |   |   |
|          | Section 19.12             | No Partnership.,                                                    |   |   |
|          | Section 19.13             | Joint and Several Liability                                         |   |   |
|          | Section 19.14             | Force Majeure .                                                     |   |   |
|          | Section 19.15             | Construction of Lease and Terms                                     |   |   |
|          | Section 19.16             | Accord and Satisfaction                                             |   |   |
|          | Section 19.17             | Provisions are Covenants and Conditions                             |   |   |
|          | Section 19.18             | Intentionally Omitted                                               |   |   |
|          | Section 19.19             | Remodel                                                             |   |   |
|          | Section 19.20             | Waiver of Right to Jury Trial                                       |   |   |
|          | Section 19.21             | Limitation of Actions                                               |   |   |
|          | Section 19.22             | Real Estate Brokers                                                 |   |   |
|          | Section 19.23             | Exculpation                                                         |   |   |

 

iii

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**NEVADA SHOPPING CENTER LEASE**

 

**ARTICLE I**

**GRANT AND BASIC TERMS**

 

This Article I contains the Basic Terns of thisLease between the Landlord and Tenant named below. Other Articles, Sections andParagraphs of the Lease referred to in this Article I explain and define theBasic ‘femls and are to be read in conjunction with the Basic Terms.

 

Section 1.1                                       EffectiveDate of Lease. October 7 2003           

Section 1.2                                                                                                                     Landlord: MCOueen Crossirtes LLC a Nevada Limited Liability Company (hereinafter“Landlord”)

 

Addressof Landlord: PostOffice Box 2888. De1 Mar, California 92014-5888Overnight Deliveries Only: 221 Fifteenth Street. Del Mar, California 92014

 

Section 1.3       Tenant:Nevada Security Bank, a Nevada Corporation, (hereinafter “Tenant”)

 

Addressof Tenant: Post OfficeBox 19579, Reno, Nevada 89511Overnight Deliveries Only: 9990 Double R Boulevard, Reno, NV 89521 (SeeSection 19.7)

 

Section 1.4       Premises.     In consideration of the rents, covenantsand agreements on the part of Tenant to be paid and performed, Landlord herebyleases to Tenant, and Tenant hereby leases from Landlord, at the rent and uponthe terms and conditions hereinafter set forth, that certain building spacethree (3) drive-thru lanes, and one by-pass lane (hereinafter “Premises”), nowor hereafter to be erected Tenant, at Tenant’s sole expense, in the McQueenCrossings (hereinafter “Shopping Center”), in the City of Reno of the County of Washoe, State of Nevada. The location of thePremises is outlined in red on the site plan of the Shopping Centerattached hereto as Exhibit “A” and made a part hereof (hereinafter “SitePlan’), and otherwise known as the building, three (3) drive-thru lanes, andone by-mass lane of Pad F of McQueen Crossings located at SEC of Robb Drive andMae Anne Avenue, Reno, Nevada. For purposes of this Lease, the Premises isagreed to have a building floor area of approximately 3,000 square feetand a land area of approximately 45,958 square feet. Tenant acknowledges thatsuch addresses is preliminary and may or not reflect the final physical ormailing address of the Premises. Tenant acknowledges that the layout of theShopping Center as shown on the Site flan attached as Exhibit “A” is tentativeand that Landlord may change the shape, size, location, number and extent ofthe improvements shown thereon and eliminate or add any improvements to anyportion of the Shopping Center as provided in Article VII herein.

 

Section 1.5       Lengthof Term.     The term of this Lease(hereinafter “Term”) shall be for twenty (20) years and zero(0) months commencing at 8:00 A.M. on the Commencement Date (hereinafterdefined), and expiring at 5:00 P.M. on the last day of the Term, unless soonerterminated under any provision hereof.

 

Section 1.6       Commencementof Term. The Term of this Lease, and Tenant’s obligation to pay rent, shallcommence (hereinafter “Commencement Date”) on the first to occur of thefollowing events:

 

(a)the date which is two hundred seventy (270) days after the Landlord, or theLandlord’s supervising architect, or other agent so authorized in writing byLandlord, notifies the Tenant that the pad upon which the Premises is to beconstructed is ready for delivery to Tenant (hereinafter “Notice of SubstantialCompletion”); or

 

(b)the date on which the Tenant shall open the Premises for business to thepublic.

 

Tenantshall construct a building and all other improvements to be constructed byTenant pursuant to Exhibit B hereof and occupy the Premises within two hundredseventy (270) days after the date of the Notice of Substantial Completion, andshall thereafter continuously operate and conduct in the Premises the PermittedUse (hereinafter defined).

 

Inthe event that the Commencement Date does not occur on the first day of themonth, then the Term shall commence on the first day of the month nextsucceeding the Commencement Date, provided Tenant shall pay Minimum MonthlyRent and Other Periodic Payments as provided in Section 1.11 (b) below, for thefractional month from the Commencement Date through the first day of the nextsucceeding month on a per diem basis, calculated on the basis of a thirty[30]-day month, in advance. All Lease expirations, renewal dates, notices ofoptions to renew, and any other provision hereof relating to the commencementof the Term of this Lease shall be determined by reference to (i) theCommencement Date where same occurs on the first day of the month, or (ii) onthe first day of the next succeeding month where the Commencement Date does notoccur on the first day of the month.

 

Landlordshall not be liable to Tenant if Landlord does not deliver possession of thePremises to Tenant on the first date specified in Section 1.6.

 

Section 1.7       Acknowledgmentof Commencement Date      When theCommencement Date of the Lease has been ascertained pursuant to Section 1.6 andArticle 11, the parties shall immediately execute a confirmation of such datetogether with the Term of this Lease and other information in the form setforth in Exhibit “C” attached hereto and made a part hereof.

 

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Section 1.8       PermittedUses. The Premises shall be used and occupied only for****the operation of**afinancial institution accepting federally insured deposits and conducting thekinds of private banking, commercial and financial transactions and offeringthe sorts *of*financial services and products normallyassociated with a full service batik branch, including the sale of investmentrelated insurance products, stock brokerage and the installation, operation, maintenance,repair and replacement of banking ATMs (provided, that (i) Tenant may installinterior banking ATMs in accordance with the Permitted Uses and otherapplicable provisions of this Lease at Tenant’s discretion, however, in noevent shall Tenant install more than two (2) exterior banking ATMs; (ii) theinstallation location and methods must be approved in advance by Landlord inLandlord’s reasonable discretion; and (iii) the exterior banking ATMs shall belocated in Tenant’s storefront), and for no other rise or purpose.Additionally, Tenant shall have the right to install not more than three (3)drive-up ATM sin Tenant’s drive-that lanes (with not more than one (1) ATM inany such drive-thru lane) in accordance with plans prepared by Tenant and approvedby Landlord. Notwithstanding the foregoing, in no event shall the Premises orany portion thereof be used and occupied for: (a) gaming; (b) to sell, rentand/or distribute prerecorded video cassettes, video tapes, video discs, laserdiscs, video games (including without limitation CD-I), DVD, divx, or othervideo software (including CD-ROM) and/or substitutes for, or items which are atechnological evolution of, the foregoing items; (c) the sale of alcohol for onPremises or off Premises consumption; (d) for a mechanical or electronic gamesarcade; or (e) gasoline or other fuels or power sources for vehicles. (SeeArticle VIII and Section 12.1)

 

Section 1.9                    Tenant’s Guarantor.     (If none, so state.) None.

 

Section 1.10     SecurityDeposit.      (Sec Section 3.5) Eleventhousand two hundred fifty and 00/100 Dollars ($11,250.00).

 

Section 1.11    MinimumMonthly Rent and Other Charges Payable by Tenant.

 

(a) Minimum Monthly Rent.   Eleven thousand two hundred fifty****and 00/100 Dollars ($11,250.00)per month for the first sixty (60) months, as provided in Section 3.1, whichshall be increased every five (5) years on the day and the month on which theCommencement Date occurs in each consecutive five (5) year period following theCommencement Date (hereinafter “Anniversary Date”), pursuant to Rider Two.

 

(b)  Other Periodic Payments.   Monthly Payments of Operating Costs (asdefined in Section 4.8) including, without limitation, Taxes, Utilities,Insurance Premiums, and all other amounts provided in this Lease to be paid byTenant. Landlord’s estimate of Tenant’s initial monthly charge for OperatingCosts is one thousand two hundred and 00/100 Dollars ($1,200.00).

 

Section 1.12    Excuseof Landlord’s Performance. Anything in this Lease to the contrarynotwithstanding, providing such cause is not due to the willful act or neglectof Landlord, Landlord shall not be deemed in default with respect to theperformance of any *of*the terms, covenants and conditions of thisLease if same shall be due to any strike, lockout, civil commotion, war-likeoperation, invasion, bioterrorism, terrorism, rebellion, hostilities, militaryor usurped power, sabotage, governmental regulations or controls, inability toobtain any material, service or financing, rain or muddy conditions, throughact *of*God or other cause beyond the control ofLandlord.

 

Section 1.13              Intentionally Omitted.

 

Section 1.14    Riders.   The following Riders and Addenda areattached to and made a pail of this Lease: (If none, so state) Rider One.Rider Two, Rider Three, Rider Four, and Rider Five,

 

**ARTICLE 11**

**LEASE TERM**

 

Section 2.1       Leaseof**Premises for Lease Term. The Term of this Lease is for the period oftime stated in Section 1.5 above and shall begin and end on the dates specifiedin Section 1.6 above, unless the beginning or end of the Term is changed underany provision of this Lease.

 

Section 2.2       Delayin Completion.   In the event theimprovements to the Premises to be completed by Landlord hereunder, if any, arenot substantially completed on or before September 30. 2004, this Leasemay be terminated by either party upon not less than ten (10) days priorwritten notice, in which event any Security Deposit deposited by Tenant withLandlord shall be returned to Tenant. The aforementioned date shall beautomatically extended for a reasonable period of time provided Landlord isdiligently pursuing the completion of the Premises. Should either party soelect to terminate this Lease, except for the return of the Tenant’s SecurityDeposit, Landlord shall have no obligations or liabilities to Tenant fordamages of any kind relating to the failure to complete construction of thePremises or any *election to*terminate this Lease pursuant to the terms andconditions set forth in this Section 2.2.

 

Section 2.3       EarlyOccupancy.   If Tenant occupies thePremises prior to the Commencement Date, Tenant’s occupancy of the Premisesshall be subject to all of the provisions of this Lease. Early occupancy of thePremises shall not advance the expiration date of this Lease. Tenant shall notbe required to pay Minimum Monthly Rent or Operating Costs, however shall payany and all other charges specified in this Lease for the early occupancyperiod.

 

Section 2.4       HoldingOver.   Tenant shall completelyvacate the Premises upon the expiration or earlier termination of this Lease.Tenant agrees to indemnify, defend and hold Landlord and its partners harmlessfrom and against any and all actions, claims, damages, demands, liens,liability, costs and expenses specifically including, but not limited to,reasonable attorneys fees, arising front or caused by any delay in Tenantvacating the Premises. If Tenant remains in possession of all or any part ofthe Premises after the expiration of the Term, such tenancy shall bemonth-to-month only

 

2

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and shall not constitute a renewal hereof oran extension for any further term. During any such holdover period, (i) theMinimum Monthly Rent shall be increased to an amount equal to one hundred fiftypercent (150”%) of the Minimum Monthly Rent in effect prior to the expirationor termination of the Lease, (ii) other monetary stuns due hereunder shall bepayable in the amounts and at the times specified in this Lease, and (iii) suchmonth-to-month tenancy shall be subject to every other term, covenant andagreement contained herein, except that such tenancy may be terminated byeither party upon thirty (30) days prior written notice to the other.

 

Section 2.5      Successors.   All rights and liabilities herein given to,or imposed upon, the respective parties hereto shall extend to and bind theseveral respective heirs, executors, administrators, successors, and assigns ofsuch parties; and if there shall be more than one entity comprising Tenant,such entities shall all be bound jointly and severally by the terms, covenantsand agreements herein. The foregoing notwithstanding, no rights shall inure totire benefit of any assignee or transferee of Tenant unless the transfer hasbeen approved by Landlord in writing as provided in Section 15.1 hereof.

 

**ARTICLE III**

**RENT**

 

Section 3.1      Timeand Manner of Payment.   Uponexecution of this Lease, Tenant shall pay Landlord Minimum Monthly Rent in theamount stated in Section 1.11(a) above, for the first month of the Term, a SecurityDeposit in the amount stated in Section 1.10 above. On or before the first dayof the second month of the Tern, and each month thereafter, Tenant shall payLandlord the Minimum Monthly Rent and any other charges and slims provided forherein as Additional Rent, in advance, without offset, deduction or priordemand. All such rents and charges shall be payable at Landlord’s address or atsuch other place as Landlord may designate in writing. If Tenant submits acheck to Landlord which is returned to Landlord by Tenant’s bank due tonon-sufficient funds, Landlord may require Tenant to submit all future paymentsin the form of a cashier’s check or money order.

 

Section 3.2                    Intentionally Omitted.

 

Section 3.3                    Intentionally Omitted.

 

Section 3.4                    Intentionally Omitted.

 

Section 3.5                    Security Deposit Increases.

 

(a)  Upon the execution of this Lease, Tenantshall deposit with Landlord a cash Security Deposit in the amount set forth inSection 1.10. Landlord may, but shall riot be obligated to, apply all or pailof the Security Deposit to any unpaid rent or other charges due from Tenant orto cure any other defaults of Tenant. If Landlord uses any part of the SecurityDeposit, Tenant shall restore the Security Deposit to its full amount withinten (10) days after Landlord’s written request, and Tenant’s failure to do soshall be a material default under this Lease. No interest shall be paid on theSecurity Deposit, and Landlord shall not be required to keep the SecurityDeposit separate from its other accounts and no trust relationship is createdwith respect to the Security Deposit.

 

(b)  Each time there is a Transfer under theLease requiring Landlord’s Consent pursuant to Article XV hereof, Tenant is inbreach or default of this Lease beyond any applicable cure period, or theShopping Center or a portion thereof that includes the Premises is sold byLandlord, Tenant shall deposit additional funds with Landlord sufficient toincrease the Security Deposit to an amount which bears the same relationship tothe adjusted Minimum Monthly Rent as the initial Security Deposit bore to theinitial Minimum Monthly Rent.

 

(c)Landlord may deliver the Security Deposit deposited hereunder by Tenant to apurchaser of Landlord’s interest in the Premises in the event that such interestbe sold and, thereupon, Landlord shall be discharged from any further liabilitywith respect to such Security Deposit.

 

Section 3.6       Termination:Advance Payments. Upon termination of this Lease under Article XIII (Damageor Destruction), Article XIV (Condemnation) or any other termination notresulting from Tenant’s default, and after Tenant has vacated the Premises inthe manner required by this Lease, an equitable adjustment shall be madeconcerning advance rent, any other advance payments made by Tenant to Landlord,and accrued real property taxes, and Landlord shall refund the unused portionof the Security Deposit to Tenant or Tenant’s successor.

 

**ARTICLE 1V**

**OTHER CHARGES PAYABLE BY TENANT**

 

Section 4.1       AdditionalRent.   All charges payable by Tenanthereunder, other than Minimum Monthly Rent, are collectively referred to as“Additional Rent”. Unless this Lease provides otherwise, all Additional Rentshall be paid with the next monthly installment of Minimum Monthly Rent. Theterm “rent” shall mean Minimum Monthly Rent and Additional Rent.

 

Section 4.2       RealProperty Taxes.

 

(a)Payment of Taxes. Tenant agrees to pay Tenant’spro rata share of all Real Property Taxes, as hereinafter defined, which may belevied or assessed by any lawful authority against the land on which buildingsare located and improvements thereon in the Shopping Center (hereinaftercollectively “Real Property Taxes”). Tenant shall pay its

 

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share of such Real Property Taxes upon receiptof a statement from Landlord delineating Tenant’s share of same, which shareshall be paid within five (5) days after receipt of Landlord’s statement.Landlord shall have the right to collect and impound from Tenant, and Tenantagrees to pay on a monthly or quarterly basis Landlord’s reasonable estimate ofTenant’s share of the Real Property Taxes next due. Tenant’s pro rata share ofReal Property Taxes for building improvements shall be apportioned according tothe floor area of the Premises as it relates to the total floor area of thebuilding or buildings which include the Premises (or the floor area of allbuildings included in any such assessment in the Shopping Center if theindividual buildings within the Shopping Center are not separately assessed).Tenant’s pro rata share of Real Property Taxes for land and non-buildingimprovements thereon shall be apportioned based upon the ratio of the squarefootage of land area of the parcel now or hereafter dedicated to the Premises(which Landlord and Tenant hereby agree for the purpose of this Lease shall be45,958 square feet) to the total square footage land area of all the land theShopping Center (including the common areas and improvements contained in andabout Pad H and Pad J shown oil the Site flan attached hereto that are notowned by Landlord but are maintained by Landlord pursuant to that certainDeclaration of Covenants, Conditions and Establishment of Restrictions andGrant of Easements for McQueen Crossings Shopping Center, as amended froth timeto three) included in any such assessment. All Real Property Taxes for the yearin which this Lease commences shall be apportioned and adjusted.

 

(b)Definition of “Real Property Taxes”.“Real Property Taxes” means: (i) any fee, license fee, license tax, businesslicense fee, commercial rental tax, levy, charge, assessment, penalty or tax(other than inheritance or estate taxes) imposed by any authority having thedirect or indirect power to tax, including any city, county, state or federalgovernment, or any school, agriculture, lighting, drainage or other improvementdistrict thereof, as against any legal or equitable interest of Landlord in thePremises; (ii) any tax oil the Landlord’s right to receive, or the receipt of,rent or income from the Premises or against Landlord’s business of leasing thePremises; (iii) any tax or charge for fire protection, streets, sidewalks, roadmaintenance, refuse or other services provided to the Premises by anygovernmental agency; (iv) any tax imposed upon this transaction or based upon areassessment of the Premises due to a change in ownership or transfer of all orpart of Landlord’s interest in the Premises; and (v) any charge or feereplacing any tax previously included within the definition of Real Property Taxes.“Real Property Taxes” shall not, however, include Landlord’s federal or stateincome, franchise, inheritance or estate taxes.

 

Section 4.3        PersonalProperty Taxes.

 

(a) Tenant shall pay prior to delinquency all taxescharged against the trade fixtures, furnishings, equipment or any otherpersonal property belonging to Tenant. Tenant shall use its best efforts tohave such personal property taxed separately from the Premises.

 

(b)  If anysuch taxes on Tenant’s personal property are levied against Landlord orLandlord’s property, or if the assessed value of the Premises is increased bythe inclusion therein of a value placed upon such personal property or tradefixtures of Tenant, then Landlord, after written notice to Tenant, shall havethe right to pay the taxes based upon such increased assessments, regardless ofthe validity thereof, but only under proper protest if requested by Tenant inwriting. If Landlord shall do so, then ‘Tenant shall, upon demand, repay toLandlord the taxes levied against Landlord, or the proportion of such taxesresulting from such increase in the assessment. In any such event, however,Tenant, at Tenant’s sole cost and expense, shall have the right, in the name ofLandlord and with Landlord’s full cooperation, to bring suit in any court ofcompetent jurisdiction to recover the amount of any such taxes so paid underprotest; any amount so recovered to belong to Tenant.

 

(c) If any of Tenant’s personal property istaxed with the Premises, Tenant shall pay Landlord the taxes for the personalproperty within fifteen (15) trays after Tenant receives a written statementfrom Landlord for such personal property taxes.

 

Section 4.4       Utilities.  Tenant shall pay, directly to theappropriate supplier, the cost of all natural gas, heat, light, power, sewerservice, telephone, water, refuse disposal and other utilities and servicessupplied to the Premises, unless Landlord elects to include the cost of any orall of such utilities and services as a Shopping Center Operating Cost asdefined in Section 4.5(b). Maintenance for any heating and/or air conditioningequipment and ducts oil the Premises shall be furnished by Tenant at Tenant’ssole expense. If any services or utilities are jointly metered with otherproperties, Landlord shall determine anti the Tenant shall pay, the Tenant’spro rata share of the monthly costs of such utilities and services. TheTenant’s pro rata share shall be determined by the ratio of the square footagefloor area of the Premises as compared to the square footage floor area of allthe premises under the common metering. In the event Tenant shall require suchservices or utilities in excess of that usually furnished or supplied for useof the Premises as general retail space, Tenant shall pay a reasonable proportion,to be determined by Landlord, of all such jointly metered charges. The Tenantshall pay such charges within five (5) days of notification of the amount bythe Landlord. Landlord reserves the right to require Tenant to install andmaintain, at Tenant’s sole expense, separate meters for any public utilityservicing the Premises for which a separate meter is not presently installed.

 

Section 4.5       Patentof Operating Costs.

 

(a) Tenant’s Pro Rata Share of Expense. Tenantwill also pay to Landlord, as further Additional Rent, a proportionate share ofthe Shopping Center’s Operating Cost (hereinafter defined), based upon theratio of the square footage land area of the parcel now or hereafter dedicatedto the Premises (+/- 45,958 square feet) to the total square footage land areaof all the land the Shopping Center (including the common areas andimprovements contained in and about Pad H and Pad J shown oil the Site Planattached hereto that are not owned by Landlord but are maintained by Landlordpursuant to that certain Declaration of Covenants, Conditions and Establishmentof Restrictions and Grant of Easements for McQueen Crossings Shopping Center,as amended from time to time) and Landlord and Tenant hereby agree for purposesof this Lease Tenant’s proportionate share of such Shopping Center’s OperatingCosts is 6.91%. Notwithstanding the foregoing, if during the Lease TermLandlord permits any tenant or parcel owner in the Shopping

 

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Center to perform any item of Shopping CenterOperating Cost for its sole benefit and at its sole expense in lieu ofLandlord’s performance thereof (which Shopping Center Operating Cost item istypically provided by Landlord to all tenants of the Shopping Center and thecost of which would be included in Shopping Center Operating Cost pursuant toArticle IV or Article XII hereof, then Landlord shall have the right, but notthe obligation to equitably allocate the Shopping Center Operating Cost of suchspecific Shopping Center Operating Cost item so that only those tenants in theShopping Center that directly or indirectly benefit from such Shopping CenterOperating Cost item shall pay such Shopping Center Operating Cost (such tenantsshall be hereinafter referred to as “Cost Pool Tenants’).

 

(b)Operating Cost. For the purpose of this Section 4.5,the term “Operating Cost” means the total cost and expense incurred inconnection with the operation, repair, management, maintenance and replacementof all Common Areas and all improvements within the Shopping Center (includingthe common areas and improvements contained in and about Pad H and Pad J shownon the Site Plan attached hereto that are not owned by Landlord but aremaintained by Landlord pursuant to that certain Declaration of Covenants,Conditions and Establishment of Restrictions and Grant of Easements for McQueenCrossings Shopping Center, as amended from time to time) including, withoutlimitation, general maintenance and repair of all improvements; expensesincurred by Landlord under Section 12.3 and Section 12.4 hereof; gardening andlandscaping; snow, water and ice removal and control; security services;liability, property damage and all other insurance carried by Landlord underSection 4.6 with types of coverage and in amounts determined by Landlord;repairs; asphalt repairs, resurfacing and striping; painting of improvements;servicing of common grease interceptors; holiday decorations; snow and iceremoval; utilities serving the improvements and Common Areas; sanitary control;pest control; signage operation, repair arid replacement costs; removal ofmash, rubbish, garbage and other refuse; reasonable reserves for replacementsand repairs; a property management fee consistent with prevailing rates chargedin the industry (not to exceed five percent (5%) of gross Shopping Centerrents); bookkeeping; advertising and promotional fees; Real Property Taxes; allpersonal property taxes assessed for any reason on the personal property usedin connection with the Shopping Center; costs of equipment and machinery usedto maintain or operate the Common Areas and any depreciation of the costthereof (including financing); and the cost of personnel to implement suchservices, to direct parking, and to police the Common Areas. In addition,Operating Cost shall include an administrative charge equal to ten percent(10%) of the actual Operating Cost, and this charge shall be included in antibilled as a part of the Operating Cost.

 

Notwithstanding the foregoing, in no eventshall the following items be included as an Operating Cost: items for which theresponsibility of repairing or maintaining or replacement is the directresponsibility of a particular tenant under their respective lease withLandlord, amounts reimbursed by insurance proceeds, or warranties; utilities orother expenses paid directly by tenants to suppliers; ground rents; payments onany mortgage, or deed-of-trust; leasing commissions; the cost of negotiating orenforcing leases of other tenants; fines, penalties, and late fees or similarcosts incurred by Landlord; depreciation; costs of or arising from Landlord’scharitable or political contributions; costs, including but not limited toattorneys’ fees associated with the operation of the business of thepartnership or entity that constitutes Landlord as the same are distinguishedfrom the costs of operation of the Shopping Center, including partnershipaccounting and legal matters, costs of defending any lawsuits with anymortgage, costs of selling, syndicating, financing, mortgaging or hypothecatingany of Landlord’s interest in the Shopping Center or any part thereof, costs ofany disputes between Landlord and its employees, disputes of Landlord withShopping Center management or personnel, or outside fees paid in connectionwith disputes with other tenants; costs incurred in removing and storing theproperty of former tenants or occupants of the Shopping Center; lease“takeover” expenses, including, but not limited to, the expenses incurred byLandlord with respect to space located in another building of the ShoppingCenter of any kind or nature in connection with the leasing of space in theShopping Center; costs incurred in connection with the original construction ofthe Shopping Center, or; any costs, *fees, dues,*contributions or similar expenses for industry associations or similarorganizations.

 

Section 4.6      InsurancePremiums.

 

(a)Liability Insurance. During the LeaseTerm, Tenant shall maintain a policy of commercial general liability insurance,liquor liability insurance if Tenant offers the sale of alcohol in or from thePremises, and mold liability insurance, at Tenant’s expense, insuring Tenantagainst liability resulting out of the ownership, use, occupancy or maintenanceof die Premises, the sidewalks in front of the *Premises, arid*the business operated by Tenant and anysubtenants of Tenant in the Premises*.*The**initialamount of such insurance shall be at least Two Million Dollars ($2,000,000.00)combined single limit bodily injury, property damage and personal injury, aridshall be subject to periodic increase based upon inflation, increased liabilityawards, recommendations of professionalinsuranc*e*advisers, and other relevant factors. However,tire amount of such insurance shall not limit Tenant’s liability nor relieveTenant of any obligation hereunder. The policy shall name Landlord as anadditional insured. In addition Tenant, at Tenant’s expense, shall carryadequate workers’ compensation insurance coverage and provide written evidenceto Landlord.

 

(b)Hazard and Rental Income Insurance.During the Lease Term, Landlord shall maintain policies of insurance coveringloss of or damage to the Shopping Center Improvements, including the shellbuilding improvements of the Premises, in the amount of its full replacementcost, excluding Tenant’s Improvements, made fixtures and personal property.Such polices shall provide protection against all perils included within theclassification of fire, extended coverage, vandalism, malicious mischief, andmay include endorsements or coverage for special extended perils (specialform), sprinkler leakage, inflation guard, and any other perils (includingflood and earthquake), which Landlord deems necessary. Tenant shall, atTenant’s expense, maintain such primary or additional insurance on itsfixtures, equipment and building improvements as Tenant deems necessary toprotect its interest. During the Lease Term, Landlord shall also maintain as anOperating Cost a rental income insurance policy, with loss payable to Landlordin an amount equal to one year’s Minimum Monthly Rent (as adjustedperiodically), plus estimated Real Property Taxes and insurance premiums.Tenant shall not do or permit to be done anything which invalidates any suchinsurance policies.

 

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(c)Insurance of Improvements. Tenant shall atall times maintain fire insurance with extended coverage in an amount adequateto cover the cost of replacement of all trade fixtures, alterations,decorations, additions or improvements made to the Premises by Tenant or byLandlord on Tenant’s behalf in the event of fire or extended coverage loss or amold-related loss. Such insurance policy shall be maintained with an insurancecompany licensed to do business in the State of Nevada and approved byLandlord. Tenant shall deliver to the Landlord certificates of such fireinsurance policies which shall contain a clause requiring the insurer to givethe Landlord thirty (30) days’ written notice of cancellation of such policies.Tenant’s obligation to maintain the foregoing insurance shall in no eventrequire Tenant to maintain insurance for the shell building improvements thatis maintained by Landlord pursuant to Section 4.6(b) hereof.

 

(d)Payment of Premiums: Insurance Policies.Tenant shall pay all premiums for the****insurancepolicies covering the Premises described in Paragraphs 4.6(a) and (c) prior todelinquency. If the insurance policies maintained by Landlord coverimprovements or real property other than the Shopping Center, Landlord shallalso deliver to Tenant a statement of the amount of the premiums applicable tothe Premises showing, in reasonable detail, how such amount was computed. Ifthe Lease Term expires before the expiration of the insurance policy period,Tenant’s liability for insurance premiums shall be prorated on an annual basis.Tenant shall be liable for its pro rata share of the payment of any deductibleamount under Landlord’s insurance policies as an item of Operating Cost.

 

(e)Increase in Fire Insurance Premium.Tenant agrees that it will not keep, use, manufacture, assemble, sell or offerfor sale in or upon the Premises any article which may be prohibited by thestandard form of fire insurance policy. Tenant agrees to pay any increase inpremiums for fire and extended coverage insurance that may be charged duringthe Term of this Lease on the amount of such insurance which may be carried byLandlord on the Premises or the building of which it is a part, resulting fromthe acts or omission of the Tenant, its agents, servants or employees, or theuse or occupancy of the Premises by the Tenant or from the type of materials orproducts stored, manufactured, assembled or sold by Tenant in the Premises,whether or not Landlord has consented to the same. In determining whetherincreased premiums are the result of Tenant’s use of the Premises, a schedule,issued by the organization making the insurance rate on the property, showingthe various components of such rate, shall be conclusive evidence of theseveral items and charges which make up the fire insurance rate on thePremises.

 

(f) Plate Glass. Tenant shall replace, at the expense ofTenant, any and all plate and other glass, frames or glazing damaged or brokenfrom any cause whatsoever in and about the Premises.

 

(g) Boiler Insurance. Tenant herebyagrees, at Tenant’s expense and during the entire Term hereof, to obtain andkeep in full force and effect a policy of boiler broad form insurance, if anyis applicable, in the amount of One Hundred Fifty Thousand Dollars($150,000.00). The insurance shall be with an insurance company approved byLandlord and a copy of die policy or certificate of insurance shall bedelivered to Landlord no later than the Commencement Date hereof.

 

(h) Waiver of Subrogation. Landlordand Tenant each hereby waive any and all rights of recovery against the otheror against the officers, employees, agents and representatives of the other,oil account of loss or damage occasioned to such waiving party or its propertyor the property of others under its control, to the extent that such loss ordamage is insured against under any fire and extended coverage insurance policywhich either may have in force at the time of such loss or damage. Tenantshall, upon the policies of insurance required under this Lease, give notice totile insurance carrier or carriers that the foregoing mutual waiver ofsubrogation is contained in this Lease and such waiver shall only be effectiveso long as consented to by the insurance carrier or carriers.

 

(i) Form of Policies. All policiesshall be written in a form satisfactory to Landlord and shall be maintainedwith insurance companies holding a “General Policyholder’s Rating” of A, and afinancial rating of X, or better, as set forth in the most current issue of“Best’s Insurance Guide”. Insurance policies carried by Tenant hereunder shall(i) name Landlord and if requested, Landlord’s lenders) as an additionalinsured and provide certificate(s) of insurance thereof to Landlord’s lenders)if applicable, (ii) be ant occurrence policy (or policies), (iii) specificallycover the liability assumed by Tenant under this Lease including, but notlimited to, Tenant’s obligations under Section 8.4 and Section 12.7 hereof,(iv) be primary insurance as to all claims thereunder and provide that anyinsurance carried by Landlord is excess and noncontributing with any insurance required of Tenant, and (v) contain a cross-liabilityendorsement or severability of interest clause acceptable to Landlord. Tenantshall deliver to Landlord and Landlord’s lenders) if applicable copies ofpolicies or original certificates evidencing the existence of the amounts andforms of coverage satisfactory to Landlord. No such policy shall be cancelableor reducible in coverage except alter thirty (30) days’ prior written notice toLandlord. Tenant shall, within ten (10) days prior to the expiration of suchpolicies, furnish Landlord with renewals or “binders” thereof, or Landlord mayorder such insurance and charge the cost thereof to Tenant as Additional Rent.Notwithstanding anything to the contrary contained herein, Tenant’s obligationto carry insurance may be satisfied by coverage under a so-called “blanketpolicy” or policies of insurance; provided, however, that all insurancecertificates provided by Tenant to Landlord pursuant to Section 4.6 hereinshall reflect that Tenant has been afforded coverage specifically with respectto the Premises, Landlord and Landlord’s mortgagee(s) or beneficiary(ies) shallbe named as additional insured’s as their interests may appear, the coverageafforded Landlord shall not be reduced or diminished and the requirements setforth in this Lease shall be otherwise satisfied by such blanket policy orpolicies.

 

Section 4.7       Intereston Past Due Obligations. Any amount owed by Tenant to Landlord which is notpaid when due shall bear interest from the due date of such amount at the lowerof (i) ten percent (10°/”) per annum, or (ii) the maximum legal interest ratepermitted by law. However, interest shall not be payable on late charges to bepaid by Tenant under this Lease. The payment of interest oil such amounts shallnot excuse or cure any default by Tenant under this Lease.

 

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Section 4.8  Collectionof Operating Costs. Landlord shall have the right to collect Tenant’s prorata share (as defined in Section 4.5(a)) of Operating Costs and all othercharges provided for under this Article IV including, without limitation,insurance premiums and Real Property Taxes, on a monthly basis. Such amountsshall be based on Landlord’s reasonable estimate of the costs, charges orpremiums next due, and shall be paid by Tenant as Additional Rent upon thebasis and at the times described herein. Landlord shall provide to Tenant a yearlyexpense estimate statement (hereinafter “Estimate Statement”) which shall setforth Landlord’s reasonable estimate of the total amount due from Tenant forthe current or next ensuing Lease Year for Operating Costs. Tenant shall pay toLandlord with each installment of Minimum Monthly Rent an amount equal toone-twelfth (1/12th) of the estimated amount due from Tenant as set forth irethe Estimate Statement. At anytime during any Lease Year, Landlord may providea new Estimate Statement to Tenant indicating any additional amount due fromTenant and Tenant agrees to pay such amount to Landlord within fifteen (15)days after notification of the amount of the deficiency. Tenant’s failure topay such deficiency to Landlord within such fifteen (15)-day period shallconstitute a breach of this Lease and entitle Landlord to any and all remediesavailable under this Lease and applicable law. Such estimated payments shall bepaid to Landlord with no obligation to pay the Tenant interest thereon. Withina reasonable period**of time after the end of each Lease Yearhereunder, Landlord shall give to Tenant a year-end statement (hereinafter“Annual Statement”) which shall indicate all of the Operating Costs and otheramounts due from Tenant hereunder for the previous Lease Year, and the amountspaid by Tenant relating thereto. If the amount paid by Tenant is less than theamount owed by Tenant, Tenant agrees to pay such deficiency to Landlord withinfifteen (15) days after receipt of the Annual Statement. If the amount paid byTenant for the prior Lease Year exceeds the amount required to be paid byTenant, such overage shall be credited to amounts due from Tenant for the nextLease Year. Landlord’s failure to provide such Annual Statement to Tenant asprovided above shall in no way excuse Tenant from its obligation to pay anysuch additional amount of Operating Costs or constitute a waiver of Landlord’sright to collect such Operating Costs from Tenant in accordance with thisSection 4.8. If Tenant defaults under this Lease, Landlord may apply any fundsin the impound account to any obligation then due under this Lease withoutwaiving any outer remedy available under the Lease or applicable law.

 

Tenant and its agents (provided such agent(s)shall in no event be compensated on a contingency fee basis) will have theright to examine Landlord’s books and records relating to Operating Costs, atLandlord’s office, and after providing at least fifteen (15) days prior writtennotice to Landlord, according to this section so long as (a) there is no breachof or event of default under the Lease at the time that the Tenant examinesLandlord’s books and records; (b) Tenant’s has fully and promptly paid itsMinimum Monthly Rent and Additional Rent (hereinafter “rent”), including its proportionateshare of Operating Costs; (c) Tenant, its agents and contractors agree thatthey wilt not divulge the contents of Landlord’s books and records, or theresult of their examination; (d) Tenant, its agents and contractors agree thatthey will give Landlord, at tro cost, a copy of their draft and final reportsof their examination of Landlord’s books and records; (e) Tenant requests theexamination of Landlord’s books and records within one (1) year after receiptof the statement of Operating Costs with regard to which Tenant wishes toexamine Landlord’s books and records; (I) Tenant has not examined Landlord’sbooks and records within the twelve (12) months preceding Tenant’s request; and(g) Tenant shall not have the right to examine any books or records thatcontain trade secrets (i.e. leases of other tenants, rent rolls, etc.). IfTenant’s examination reveals that it has overpaid its proportionate share ofOperating Costs, then the overpayment credit will be applied to the nextaccruing rent under the Lease. Tenants sole remedy in the event of anoverpayment will be the credit against its rent. Tenant will not have the rightto terminate cite Lease on account of an overpayment. Tenant will not have theright to challenge Landlord’s methodology in any examination if it has notpreviously challenged that methodology. If Tenant’s examination reveals that ithas underpaid its proportionate share of Operating Costs, then the underpaymentamount will be paid along with the next accreting rent tinder the Lease.

 

**ARTICLE V**

**RECORDS AND BOOKS OF ACCOUNT**

 

Section 5.1                      IntentionallyOmitted.

 

Section 5.2                      IntentionallyOmitted.

 

**ARTICLE VI**

**AUDIT**

 

Section 6.1                       IntentionallyOmitted.

 

Section 6.2                      IntentionallyOmitted.

 

**ARTICLE VII**

**CONSTRUCTION OF PREMISES**

 

Section 7.1       Landlordand Tenant Improvements. If construction of the improvements on thePremises have not been completed by the date of this Lease, Landlord shall, atits cost and expense, pursue to completion the improvements to be erected byLandlord “Landlord’s Work” as shown on the attached Exhibit “B” labeled“Construction of the Premises.” Tenant shall commence the construction ofcertain site work, building, installation of fixtures, equipment and shallperform any of “Tenant’s Work” in Tenant’s improvement drawings approved byLandlord or as set forth on said Exhibit “B,” promptly upon substantialcompletion of Landlord’s work on the Premises and shall diligently pursue suchconstruction, installation and performance to completion. If the Landlord

 

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performs any such installation or constructionshown in Tenant’s drawings, approved by Landlord or on Exhibit “B” as theTenant’s Work, the Tenant shall pay any cost or expense of the Landlord soincurred within fifteen (15) days after receipt of a bill therefore. Said bill will****be based upon Landlord’s costs and expensesplus supervision, and architectural expenses, if any.

 

Tenantshall deliver plans and specifications with respect to Tenant’s site, building,and leasehold improvements to Landlord or Landlord’s architect within the timeframe set forth in Exhibit B. Said plans and specifications shall conform inall *respectswith*the agreements ofLandlord and Tenant as outlined in Exhibit “B” hereto.

 

Landlordshall have the right but not the obligation to perform, on behalf of and forthe account of Tenant, subject to reimbursement of the cost thereof by Tenant,any and all of the Tenant’s Work which Landlord determines, in its solediscretion, should be performed immediately and on an emergency basis for thebest interest of the Shopping Center, or as required by any governmental entityor required for compliance with any manufacturer’s warranty, including withoutlimitation, work which pertains to structural components, mechanical, sprinklerand general utility systems, rooting and removal of unduly accumulatedconstruction material and debris.

 

Section 7.2       ParkingFacilities. Except for certain improvements on Pad F to be constructed byTenant at Tenant’s sole expense, Landlord shall construct or shall haveconstructed upon the Shopping Center, at its own cost, access roads, sidewalksand parking lots or facilities substantially as shown on the Site Plan attachedas Exhibit “A”, subject to making changes thereto as described in Section 1.4.

 

Section 7.3       Changesand Additions to Buildings. Landlord reserves the right to construct otherbuildings or improvements in the Shopping Center from time to time and to makealterations *thereofor*additions thereto and to buildadditional stories on any such building or buildings and to build adjoiningsame. Easements for light and air are not included in the leasing of the Premises toTenant.

 

Section 7.4       IntentionallyOmitted.

 

Section 7.5       Rightto Adjust. The purpose of the Site Plan attached hereto as Exhibit “A” isto show the approximate location of the Premises. Notwithstanding any otherprovision contained in this *Lease, Landlord*reserves the right at any time to relocate, vary and adjust the size ofthe various buildings, the location of any tenant, excluding Tenant, automobileparking areas, and other Common Areas shown on the Site Plan, however, in noevent shall any such change be made by Landlord to Tenant’s Construction Areawithout Tenant’s written consent, and Landlord shall not materially alter thesize or location of the Premises from the general location reflected on theSite Plan attached hereto.

 

Section 7.6  IntentionallyOmitted.

 

**ARTICLE VIII**

**USE OF PROPERTY**

 

Section 8.1       PermittedUses. Tenant shall use the Premises only for the Permitted Use set forth inSection 1.8 above, and for no other use or purpose, without Landlord’s writtenconsent, to be given or withheld in Landlord’s sole and absolute discretion.

 

Section 8.2                    Manner of Use.

 

(a)Interference with Use/Nuisance. Tenant shall not door permit anything to be done in or about the Premises which will in any wayobstruct or interfere with or infringe on the rights of other occupants orcustomers of the Shopping Center, or injure or annoy them, or use or allow thePremises to be used for any improper, immoral, or objectionable purposes; norshall Tenant cause, maintain or permit any nuisance in, on or about the Premise or**commit or suffer to be committed any waste in,on or about the Premises. Tenant shall not be liable to Landlord for any otheroccupant’s failure to so conduct itself

 

(b)Violation of Law/Insurance Provisions. Tenant shallnot do or permit to be done in or about the Premises, nor bring, keep or permitto be brought or kept therein, anything which is prohibited by or will in anyway conflict with any taw, statute, ordinance or governmental rule orregulation now in force or which may hereafter be enacted or promulgated, orwhich is prohibited by any standard form of fire insurance policy or will inany way increase the existing rate of or affect any fire or other insuranceupon the building or any pall thereof or any of its contents, or cause acancellation of any insurance policy covering the building or any part thereofor any of its contents. Tenant shall comply with all governmental laws,ordinances and regulations applicable to flue Premises, and the requirements ofany Board of Fire Underwriters or other similar body now or hereafterinstituted, with any order, directive or certificate of occupancy issuedpursuant to any law, ordinance or regulation by any public officer insofar asthe same relates to or affects the condition, use or occupancy of the Premisesincluding, but not limited to, (1) requirements of structural changes related toor affected by Tenant’s acts, occupancy or use of the Premises, and (ii) anyand all requirements relating to the Premises imposed by applicable lawincluding, but not limited to, modifications of existing portions of thePremises required under the Americans with Disabilities Act or any otherapplicable laws, all at Tenant’s sole expense. The judgment of any court ofcompetent jurisdiction or the admission of Tenant in any action againstLandlord, whether or not Tenant is a party to such action, shall be conclusivein establishing such violations between Landlord and Tenant

 

(c)Permits. Tenant shall obtain and pay for all permits specificallyincluding, but not limited to, a certificate of occupancy, required forTenant’s occupancy of the Premises and shall promptly take all substantial andnonsubstantial

 

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actions necessary to comply with allapplicable statutes, ordinances, rules, regulations, orders and requirementsregulating the use by Tenant of the Premises, including the Occupational Healthand Safety Act and the Americans With Disabilities Act.

 

(d)Store Operation. Tenant shall continuously operate onehundred percent (100%) of the Premises during the entire Term of this Lease onthe days and during the hours provided below with due diligence and efficiencyso as to maximize the gross receipts which may be produced by such manner ofoperation. Tenant shall conduct its business in the Premises during the regularcustomary clays and hours for such type of business in the city or trade areain which the Shopping Center is located.

 

(e) Change of Name. Tenant agrees not to change the advertised nameof the business operated in the Premises without the prior written consent ofLandlord, which shall not be unreasonably withheld.

 

(t)Solici4ition of Business. Tenant and Tenant’semployees and agents shall not solicit business in tile parking or other CommonAreas, nor shall Tenant distribute any handbills or other advertising matter inautomobiles parked in the parking area or in other Common Areas.

 

Section 8.3       CompetitiveBusiness. Neither Tenant nor any Affiliate (as defined below) of Tenantshall directly or indirectly, own, manage, operate, or have any interest in,any business that is similar to, or competitive with, the business permittedunder this Lease if such business is located within three (3) miles of anypoint oil the perimeter of the Shopping Center. For the purposes of thisSection 8.3, “Affiliate” shall mean any affiliate, subsidiary, parent, companycontrolled by parent, successor, predecessor, assignee, shareholder, partner,member, officer, director, manager, employee, lender, or any other entityhaving an interest whatsoever in Tenant. If Tenant shall breach tile foregoingcovenants, or an Affiliate (as defined above), is operating in violationhereof, Landlord, in addition to but not in lieu of or in limitation of anyother right and remedy available to Landlord under this Lease or at law or inequity, shall have the right to: (i) Seek injunctive relief to restrain or stopTenant from breaching this Section 8.3; (ii) Terminate this Lease in accordancewith the provisions of Article XVI of this Lease; (iii) intentionally omitted;or (iv) Cancel any option to extend the term of this Lease that may exist atthe time of Tenant’s breach of this Section 8.3.

 

Section 8.4       Indemnificationof Landlord/Tenant.

 

(a) Indemnification of Landlord.Tenant shall indemnify, defend and hold Landlord harmless from and against anyand all actions, claims, damages, liens, liabilities, costs and expenses inconnection with loss of life, personal injury and/or damage to property arisingfrom or out of any occurrence in, upon or about the Premises, or tile occupancyor use by Tenant of the Premises or any part thereof, or occasioned wholly orin part by any act or omission Tenant, its agents, contractors, employees,servants, tenants or concessionaires. Tenant shall further indemnify, defendand hold Landlord harmless from and against any and all actions, claims, damages,liens, liabilities, costs and expenses arising from any breach or default inperformance of any obligation on Tenant’s part to be performed under die ternsof this Lease, or arising from any act, neglect, fault or omission of Tenant orits agents, contractors, employees, servants, tenants or concessionaires, andfrom and against all costs, attorneys’ fees, expenses and liabilities incurredin connection with such claim or any action or proceeding brought thereon. Incase any action or proceeding shall be brought against Landlord by reason ofany such claim, Tenant upon notice from Landlord shall defend the same atTenant’s expense by counsel approved in writing by Landlord. Tenant, as amaterial part of the consideration to Landlord, hereby waives all claimsagainst Landlord for and assumes all risk of damage to property or injury topersons in, upon or about the Premises from any cause whatsoever except ascaused solely by Landlord’s gross negligence or willful misconduct.

 

(b)Indemnification of Tenant.Landlord will indemnify Tenant, and hold it harmless from,, any and allclaims, actions, damages, liability, and expense arising from or out of anyoccurrence in the Common Areas. If any action or proceeding is brought againstTenant, by reason of any such claim, Landlord, upon notice from Tenant, willdefend the claim at Landlord’s expense with counsel reasonably satisfactory toTenant. Landlord’s indemnification of Tenant shall in no event apply to claims(i) that are caused by the failure of Tenant to observe any of the terms andconditions of this Lease, (ii) any claims that are covered or should be coveredby Tenant’s workers compensation insurance carried by Tenant or required to becarried by Tenant pursuant to this Lease; and (iii) Tenant’s negligence orintentional misconduct.

 

Section 8.5       Landlord’sAccess. Landlord and its agents may enter the Premises at all reasonabletimes to show the Premises to potential buyers, investors, tenants and otherparties, or for any other purpose Landlord deems necessary. Landlord shall giveTenant prior written notice of such entry, except in the case of an emergency.Landlord may place customary “For Sale” or “For Lease” signs oil the Premises.

 

Section 8.6       Excavation.If all excavation shall be made upon land adjacent to or under the Premises, orshall be authorized to be made, Tenant shall afford to the person causing orauthorized to cause such excavation, license to enter upon the Premises for diepurpose of doing such work as Landlord shall deem necessary to preserve thewall or the building of which the Premisesform a part from injury or damageand to support the same by proper foundations, without any claim for damages orindemnification against Landlord or diminution or abatement of rent.

 

Section 8.7       QuietPossession. If Tenant pays the rent and complies with all other terms ofthis Lease, Tenant may occupy and enjoy die Premises for the full Term, subjectto the provisions of this Lease and to any mortgages, deeds of trust and otherrecorded instruments encumbering tile Premises and/or Shopping Center.

 

Section 8.8       IntentionallyOmitted.

 

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**ARTICLE IXHAZARDOUS MATERIALS**

 

Section 9.1       Prohibitionof Storage. Tenant shall not cause or permit any Hazardous Materials (ashereinafter defined) to be brought upon, kept or used in or about tile Premisesby Tenant, its agents, employees, contractors or invitees in a manner or for apurpose prohibited by or which could result in liability under any applicablelaw, regulation, rule or ordinance. Tenant shall comply with all affirmativelegal requirements concerning all Hazardous Materials. If Tenant breaches tileobligation stated in the preceding sentences, or if the presence of HazardousMaterials on the Premises caused or permitted by Tenant results in a release ofany Hazardous Material, a discharge of a pollutant or contaminant or any othercontamination of tile Premises resulting in a potential violation of orincurrence of liability under any law, regulation, rule or ordinance, or ifcontamination of the Premises by Hazardous Materials otherwise occurs for whichTenant is legally liable to Landlord for damage resulting therefrom, thenTenant shall indemnify, protect, defend and hold Landlord, its partners, agents,employees and contractors harmless from any and all actions, claims, judgments,damages, penalties, fines, costs, liens, liabilities, injunctive actions ororders, and losses (including, without limitation, diminution in value of thePremises and/or Shopping Center, damages for the loss or restriction on use ofrentable or usable space or of any amenity of the Premises, damages arisingfrom any adverse impact on marketing of space in the Premises and sums paid insettlement of claims, “response costs” as defined in tile ComprehensiveEnvironmental Response, Compensation and Liability Act (“CGRCLA”), attorneys’fees, Consultant fees and expert fees) which arise during or after the LeaseTerm as a result of such contamination.

 

Section 9.2       Clean-Un.This indemnification of Landlord by Tenant pursuant to Section 9.1 aboveincludes, without limitation, costs incurred in connection with anyinvestigation of site conditions or any cleanup, remediation, removal, and/orrestoration work required by any federal, state or local governmental agency orpolitical subdivision because of Hazardous Material present in tile soil oraround water on or under the Premises or emanating from the Premises in breachor violation of Tenant’s obligations pursuant to Section 9.1 above. Withoutlimiting the foregoing, if the presence of any Hazardous Materials on thePremises caused or permitted by Tenant results in any contamination of thePremises, Tenant shall promptly take all actions at its sole expense as arenecessary to return tile Premises to the condition existing prior to theintroduction of any such Hazardous Materials to the Premises, provided thatLandlord’s approval of such action shall first be obtained, which approvalshall not be unreasonably withheld so long as such actions would notpotentially have any material adverse long-term or short-term effect on thePremises.

 

Section 9.3       Business.Landlord acknowledges that it is not the intent of this Section to prohibitTenant from operating its business as described above. Tenant may operate itsbusiness so long as the use or presence of Hazardous Materials is strictly andproperly monitored and performed in full compliance with all applicablegovernmental requirements. As a material inducement to Landlord to allow Tenantto use Hazardous Materials in connection with its business, Tenant agrees todeliver to Landlord prior to the Commencement Date a list identifying each typeof Hazardous Materials to be present on the Premises and setting forth any andall governmental approvals or permits required in connection with the presenceof Hazardous Materials on the Premises (“Hazardous Materials List”). Tenantshall deliver to Landlord an updated Hazardous Materials List at least once ayear and shall also deliver all updated list before any new Hazardous Materialsare brought onto the Premises or on or before the date Tenant obtains anyadditional permits or approvals. In connection with any Hazardous Materialsutilized by Tenant on tile Premises, Tenant shall be responsible, at its solecost and expense, for making any necessity modifications or improvements eitherto Premises or Tenant’s equipment as required by applicable laws, or anygovernmental agency, Landlord’s insurance company, Landlord’s lender(s),Landlord’s consultant(s), or prospective purchaser(s). Tenant will, at its solecost and expense, promptly upon receipt of written notice from Landlordcomplete such improvements. If such work is not promptly undertaken andcompleted, Landlord shall have the right, but not the obligation, to completesuch work and to charge such amounts to Tenant as additional rent under thisLease.

 

Section 9.4   Termination of Lease. Notwithstanding the provisions of Section9.1 above, Landlord shall have the right to terminate the Lease in Landlord’ssole and absolute discretion if (i) any anticipated use of the Premises byTenant involves the generation ofstorage, use, treatment ordisposal of Hazardous Materials in a manner or for a purpose prohibited by anygovernmental agency or authority; (ii) Tenant has been required by any lenderor governmental authority to undertake removal or remedial action in connectionwith Hazardous Materials oil the Premises if the presence of HazardousMaterials resulted from Tenant’s action or use of the Premises (unless Tenantis in full compliance with all requirements connected with such removal orremedial action); or (iii) Tenant is subject to an enforcement order issued byany governmental authority in connection with the use, disposal or storage ofHazardous Materials on the Premises (unless Tenant is in full compliance withthe terms of such enforcement order).

 

Section 9.5       Assignmentand Subletting. Notwithstanding the provisions of Section 9.1 above, if (i)any anticipated use of the Premises by any proposed assignee or sublesseeinvolves or reasonably could involve the generation, storage, use, treatment ordisposal of Hazardous Materials in a manner or for a purpose prohibited by anylaw, regulation, title or ordinance; (ii) the proposed assignee or sublesseehas been required by a prior landlord, lender or governmental authority toundertake removal or remedial action in connection with any Hazardous Materialsoil a property if tile presence of the Hazardous Materials resulted from suchparty’s action or use of the property in question; or (iii) the proposedassignee or sublessee is subject to an enforcement order issued by anygovernmental authority in connection with the use, disposal or storage ofHazardous Materials, it shall not be unreasonable for Landlord to withhold itsconsent to art assignment or subletting to such proposed assignee or sublessee.This paragraph shall not preclude other grounds for Landlord’s rejection of asublease or assignment pursuant to any other provisions of this Lease.

 

Section 9.6       Landlord’sRight to Perform Tests. At any time prior to the expiration of theTerm, Landlord shall (rave tire right to enter upon the Premises in order toconduct appropriate tests of water and soil and to deliver to Tenant theresults of such tests to demonstrate that levels of any Hazardous Materials inexcess of permissible levels has occurred as a result of Tenant’s use of thePremises. Tenant shall further be solely responsible for and shall defend,

 

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indemnify and hold the Landlord, its agentsand contractors harmless from and against all claims, costs and liabilitiesincluding actual attorneys’ fees and costs, arising out of or in connectionwith any removal, remediation, clean up, restoration and materials requiredhereunder to return the Premises and any other property of whatever nature totheir condition existing prior to the appearance of the Hazardous Materials.

 

Section 9.7       Tenant’sObligations. Tenant’s obligations under this Article 9 shall survive thetermination and/or expiration of the Lease. During any period of time employedby Tenant after the termination or expiration of the Lease to complete theremoval from the Premises or the remediation of any such Hazardous Materials, Tenantshall continue to pay the full rent in accordance with this Lease, which rentshall be prorated on a daily basis.

 

Section 9.8       Definitionof “Hazardous Materials”. The term “Hazardous Materials” shall mean anytoxic or hazardous substance, material or waste or any pollutant or contaminantor infectious or radioactive material including, but not limited to, thosesubstances, materials or wastes regulated now or in the future under any of thefollowing statutes or regulations promulgated thereto: (1) any “hazardoussubstance” within the meaning of the Comprehensive Environmental Response,Compensation and Liability Act of 1980, as amended (“CERCLA”), 42 U.S.C. §§9601 et sec .; (2) any “hazardous waste” within the meaning of theResource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; (3) any “hazardous waste” or “extremely hazardous waste” within themeaning of the laws of the State of Nevada; (4) any “hazardous chemicalsubstance or mixture” or “imminently hazardous chemical substance or mixture”within the meaning of the Toxic Substances Control Act, 15 U.S.C. §§ 2601 etsec.; (5) any “hazardous air pollutant” within the meaning of the Federal CleanAir Act, 42 U.S.C. §§ 7400 ct sue.;(G) any “toxic pollutant” or “oilor hazardous substance” within the meaning of the Federal Water PollutionControl Act, 33 U.S.C. §§ 1250 et seq.; (7) any “contaminant” within themeaning of the Safe Drinking Water Act, 42 U.S.C. § 300i; (8) any “chemicalknown to the state to cause cancer or reproductive toxicity”; (9) petroleum orany fraction thereof; (l0) asbestos; or (11) any other substance, chemicalwaste, toxicant, pollutant or contaminant regulated by any federal, state orlocal law, statute, rule, regulation or ordinance for the protection of healthor the environment.

 

Section 9.9         Landlord’sWarranty and Indemnification. Landlord represents and warrants to Tenantthat, as of the date of this Lease, except as may be otherwise outlined in thatcertain Phase I - Environmental Site Assessment dated May 20, 2003 by SummitEngineering corporation, a copy of which has been provided to Tenant, Landlordhas no actual knowledge of the presence of any Hazardous Materials oil, in orunder the Premises, in violation *of*anyEnvironmental Law. The foregoing representation and warranty is based solelyoil Landlord’s actual knowledge and without any independent investigation ofthe Premises, and no constructive or implied knowledge shall be imputed toLandlord with respect to the foregoing. Landlord shall indemnify Tenant andhold Tenant harmless from and against any and all losses, liabilities, damages,injuries, costs, expenses (including reasonable attorneys fees), and claims ofany and every kind whatsoever paid, incurred, suffered by, or asserted againstTenant for, with respect to, as a result *of*thepresence on or under, or the escape, seepage, leakage, spillage, emission,discharge or release from tile premises of any Hazardous Materials occurring(a) prior to the Lease Commencement Date, or (b) after the Lease CommencementDate, but only if actively caused by Landlord. Tenant shall promptly providenotice of any release of any release *of*anyHazardous Materials and any claims made by Tenant against Landlord hereunder.

 

**ARTICLE X**

**PARKING AND COMMON USE AREAS AND FACILITIES**

 

Section 10.1     Controlof Common Areas by Landlord. “Common Areas” means all areas, space,equipment and special services provided by Landlord for the common or joint useand benefit of the occupants of the Shopping Center, their employees, agents,servants, customers and other invitees, including, without limitation, parkingareas, access roads, driveways, retaining walls, landscaped areas, truckservice-ways or tunnels, loading docks, pedestrian malls, courts, stairs, rampsand sidewalks, comfort and first aid stations, and parcel pick-up stations. AllCommon Areas shall at all times be subject to the exclusive control andmanagement of Landlord, and Landlord shall have the right from time to time toestablish, modify and enforce reasonable titles and regulations with respect tothe Common Areas. Landlord shall have the right to construct, maintain andoperate lighting facilities oil all Common Areas and improvements; to policethe same; from time to tithe to change the area, level, location and arrangementof parking areas and other facilities hereinabove referred to; to restrictparking by tenants, their officers, agents and employees to employee parkingareas; to enforce parking charges only to tile extent required by governmentalor quasi-governmental entities (by operation of meters or otherwise), withappropriate provisions for free parking ticket validating by tenants; to closeall or any portion of the Common Areas or facilities to such extent as may, inthe opinion of Landlord’s counsel, be legally sufficient to prevent adedication thereof or the accrual of any rights to any person or the publictherein; to close temporarily all or any portion of the parking areas orfacilities: to discourage non-customer parking: and to do and perform such otheracts in and to said areas and improvements as, in the use of good businessjudgment, the Landlord shall determine to be advisable with a view to theimprovement of the convenience and use thereof by tenants, their officers,agents, employees and customers. Landlord will operate and maintain the CommonAreas in such manner as Landlord, in its sole discretion, shall determine fromtime to time. Without limiting the scope of such discretion, Landlord shallhave the full right and authority to employ ail personnel necessary for theproper operation and maintenance of the Common Areas and facilities.

 

Section 10.2     License.All Common Areas and facilities not within the Premises, which Tenant may bepermitted to use and occupy, are to be used and occupied under a revocablelicense, and if any such license be revoked, or if the amount of such areas bediminished, Landlord shall not be subject to any liability nor shall Tenant beentitled to any compensation or diminution or abatement of rent, or shall suchrevocation or diminution of such areas be deemed constructive or actualeviction.

 

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Section 10.3     Merchants’Association. Tenant will become a member of, participate fully in, andremain in good standing in the Merchants’ Association (if now formed or as soonas the same has been formed) limited to tenants occupying premises in theShopping Center, and abide by the regulations of such Association. Each membertenant shall have one vote in the operation of said Association. The objects ofsuch Association shall be to encourage its members to deal fairly andcourteously with their customers, to sell their merchandise or services at fairprices, to follow ethical business practices, to assist the business of thetenants by sales promotions and center-wide advertising, and in particular tohelp the interests of members of the said Association. The Tenant agrees to paycities to the Merchants’ Association as approved by a majority vote of themembers of the Association. Nothing in the Bylaws**or regulations of the said Association shallbe in conflict with the provisions of this Lease, including without limitingthe generality of the foregoing any reasonable rules and regulations adoptedpursuant to the provisions of Section 12.5 hereof*, or*in any way shall affect the rights of theLandlord.

 

**ARTICLE XI**

SIGNS,AWNINGS, CANOPIES. FIXTURES, ALTERATIONS, IMPROVEMENTS

 

Section 11.1     Signsand Auctions. No auction, fire or bankruptcy sales may he conducted in thePremises, and no signs advertising such sales shall be posted on the Premiseswithout the prior written consent of Landlord.

 

Section 11.2       Installationby Tenant. Tenant shall not make or cause to be made any alterations,additions or improvements to the Premises, nor install or cause to be installedany trade fixtures, exterior signs, exterior machinery, floor covering,interior or exterior lighting, plumbing fixtures, shades or awnings, or makeany other changes to the Premises without the prior written consent of Landlord.All fixtures installed by Tenant shall be new or completely reconditioned.Tenant shall present to the Landlord plans and specifications for such work atthe time approval is sought and prior to commencing the proposed improvements.

 

Section 11.3     Improvements. It is understood andagreed by Tenant that any anti all leasehold improvements made to the Premisesby Tenant prior to or during the Term, or any extensions thereof, shall be madeby a contractor reasonably approved by Landlord. Landlord hereby approvesShaver Construction as Tenant’s contractor for construction of Tenant’s Work asset forth in Exhibit B hereof. In the event Tenant should employ a contractorother than Shaver Construction or Landlord’s contractor, it is expresslyunderstood and agreed that Tenant shall first obtain the Landlord’s writtenapproval of *theTenant’s*contractor and theterns of the contract. Landlord may require Tenant or Tenant’s contractor toprovide Landlord, at Tenant’s sole cost and expense, a lien and completion bondin an amount equal to one and one-half (1-1/2) times the *estimated cost*of such improvements to insure Landlordagainst any liability for mechanics’ and materialmen’s liens and to insurecompletion of the work, only if such bond is required by Landlord’s lender.Provided this Lease has not been subject to a Transfer (as defined in ArticleXV) Landlord’s prior written consent will not be *necessary for*any minor interior non-structural alteration,addition, or improvement that (i) does not involve the storefront, exteriordoors, or windows; (ii) in not visible from outside of the Premises; (iii) isnot located outside of the *premises;*(iv)**does not adversely affect the operation of the HVAC, plumbing, firesprinkler, electric, water, or sewer systems of the Premises, building, orShopping Center; or (v) does not include any of Tenant’s initial alterations,additions, fixtures, and/or improvements which shall require Landlord’s priorapproval as provided in this Lease. Such minor interior non-structural alteration,addition, or improvement shall further be subject to tile following (a) shallcost less than Ten Thousand and No/100 Dollars ($10,000.00), including laborand materials; (b) shall not change the general character of the Premises orreduce the fair market value of the Premises below its fair market value priorto the alteration, addition, or improvement; (c) shall be made with duediligence, in a good and workmanlike manner, and in compliance with allapplicable laws and ordinances; (d) shall be promptly and fully paid for byTenant; and (e) shall if reasonably necessary as determined by Landlord be madeunder the supervision of an architect or engineer reasonably satisfactory toLandlord and in accordance with plans and specifications and cost estimatesapproved by Landlord. Landlord may designate a supervising architect to assurecompliance with the provisions of this paragraph, anti if it does, Tenant willpay the supervising architect’s charges. Promptly after the completion of anyalteration, addition, or improvement, Tenant will give Landlord a copy o f “asbuilt” drawings of the alteration, addition, or improvement. All alterations,additions, fixtures, and improvements, whether temporary or permanent incharacter, trade in or upon the Premises by Tenant, will immediately becomeLandlord’s property and, at the end of the Term of this Lease, will remain outthe Premises without compensation to Tenant. Prior to commencing any suchinterior non­structural alteration, addition, or improvement, Tenant shallprovide not less than ten (10) days prior written notice to Landlord describingthe contemplated work; and the estimated costs; name, address, telephonenumber, contractor license, and insurance information of any persons or firmsperforming such work.

 

Section 11.4     Non-Removalby Tenant. All alterations, additions and improvements, including signs andsign cases, made by Tenant, or made by the Landlord out the Tenant’s behalfanti for which Tenant has paid Landlord in accordance with this Lease, shallremain the property of the Tenant for the term of the Lease, or any extensionor renewal thereof. Such alterations, additions and improvements shall not beremoved from the Premises. At the expiration or termination of this Lease Term,or any extensions or renewals thereof, all such alterations, additions andimprovements become the property of the Landlord.

 

Section 11.5  Intentionally Omitted.

 

Section 11.6     Liens.Tenant shall keep the Premises, any building of which the Premises are a part,and the Shopping Center free from any and all liens arising out of workperformed, materials furnished or obligations incurred by Tenant and shallindemnify, hold harmless and defend Landlord from any liens and encumbrancesarising out of any work performed or materials furnished by, or at thedirection of, Tenant. In the event that Tenant shall not, within twenty (20)clays following the imposition of any lien, cause such lien to be released ofrecord by payment or posting of

 

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a proper bond, landlord shall have, inaddition to all other remedies provided herein and by law, the right, but notthe obligation, to cause the same to be released by such means as it shall deemproper, including payment of the claim giving rise to such lien. All such sumspaid by Landlord and all expenses incurred by it its connection therewith shallbear interest at the rate of ten percent (10”‘/ei) per annum from the dateexpended until the date repaid. Landlord shall have the right at all times topost and keep posted on the Premises any notices permitted or required by law,or which Landlord shall deem proper, for the protection of Landlord and thePremises, and any other party having an interest therein from mechanics’ andmaterialmen’s liens, and Tenant shall give to Landlord at least fifteen (15)business days prior written notice of the expected date of commencement of anywork relating to alterations or additions to the Premises.

 

Section 11.7     Signs,Awnings and Canopies. Tenant will not place or stiffer to be placed ormaintained on any exterior door, wall or window of the Premises any sign,awning or canopy, or advertising matter or other thing of any kind, and willnot place or maintain any decoration, lettering or advertising matter on theglass of any window or door of the Premises without first obtaining Landlord’swritten approval and the approval and consent of any governmental body havingjurisdiction over signs in the Shopping Center. Tenant further agrees tomaintain such signs, awnings, canopy, decorations, lettering or otheradvertising matter as may be approved, in good condition and repair at alltimes. Tenant also agrees, at Tenant’s sole cost, to obtain a canopy type signor signs which shall be in strict conformance with Landlord’s sign criteria asto design, material, color, location, size and letter style. **ALL SIGNS****MUST BE FABRICATED AND INSTALLED A CONTRACTOR SELEC’1’ED BY LANDLORD.**Landlordmay further require Tenant to reimburse Landlord for the cost of an under canopysign and bracket provided by Landlord to Tenant without sign copy. Tenant shallmake arrangements at Tenant’s sole expense to have copy applied to such undercanopy sign by Landlord’s designated contractor at Tenant’s sole expense.Landlord, at Landlord’s sole and absolute discretion, may designate one (1) ormore contractors as the exclusive, provider(s) of sign fabrication and/orinstallation services. Prior to authorizing Landlord’s contractor to constructany sign, a detailed drawing of the proposed sign shall be prepared by theLandlord’s contractor at the sole expense of the Tenant, and submitted to theLandlord and Tenant for written approval. All signs and sign cases are to beconsidered fixtures and improvements and become the property of the Landlordupon expiration or termination of this Lease.

 

**ARTICLE XII**

**CONDITION OF PROPERTY: MAINTENANCE, REPAIRS AND ALTERATIONS**

 

Section 12.1     ExistingConditions. Tenant accepts the Premises in its condition as of theexecution of this Lease, subject to all recorded matters, laws, ordinances, andgovernmental regulations and orders. Tenant acknowledges that neither Landlordnor any agent of Landlord has made any representation as to tile condition ofthe Premises or tile suitability of tile Premises for Tenant’s intended use.

 

Section 12.2     Exemptionof Landlord front Liability: Waiver. Landlord shall not be liable for anydamage or injury to the person, business (or any loss of income therefrom),goods, wares, merchandise or other property of Tenant, Tenant’s employees,invitees, customers or any other person in or about the Premises, whether suchdamage or injury is caused by or results front: (a) fire, deans, electricity,water, gas or rain; (b) tile breakage, leakage, obstruction or other defects ofpipes, sprinklers, wires, appliances, plumbing, air conditioning or lightingfixtures or any other cause; (c) conditions arising in or about the Premises orupon other portions of any building of which the Premises is a part, or fromother sources or places; (d) any act or omission of any other tenant oroccupant of the Shopping Center or of any building of which the Premises is apart; or non-related claims. Landlord shall not be liable for any such damageor injury even though the cause of or the means of repairing such damage orinjury are not accessible to Tenant. Tenant, as a material part of theconsideration to be rendered to Landlord, hereby waives all claims againstLandlord for the foregoing damages from any cause arising at any time. Theprovisions of this Section 12.2 shall not, however, exempt Landlord fromliability for Landlord’s gross negligence or willful misconduct.

 

Section 12.3              Tenant’s Obligations.

 

(a) Tenant agrees at alltimes, at its own cost and expense, to repair, maintain in good and tenantablecondition and replace, as necessary, die Premises and every part thereofincluding, without limitation, the following: all meters, pipes, conduits,equipment, components and facilities that supply the Premises exclusively withutilities (except if the appropriate utility company has assumed these duties)or that form an air conditioning system exclusively servicing the Premises, allfixtures and other equipment installed in the Premises; all exterior andinterior glass installed in the Premises; the store front(s), all signs (seeSection 12.4), locks and closing devices; all window sashes, casements andframes; doors and door frames; floor coverings; and all such items of repair, maintenance, alteration, improvement or reconstruction as may berequired at any time or from time to time by any governmental agency !savingjurisdiction thereof Landlord shall also have the right, but not the obligationto paint/stain/varnish or otherwise refinish Tenant’s store front, windowsashes, casements, frames, doors and door jams with Landlord having the right,but not the obligation to include all such costs as ail Operating Cost underSection 4.5 hereof. Tenant shall promptly replace any portion of the Premises or system or equipment in tile Premises which cannot befully repaired, regardless of whether the benefit of such replacement extends beyond the Lease Tern. Tenant shall obtain apreventive maintenance contract providing for the regular inspection andmaintenance of the heating and air conditioning system (including leaks aroundducts, pipes, vents, or other parts of the air conditioning) by a licensedheating and air conditioning contractor. The cost thereof shall be borne solelyby Tenant. It is the intention of Landlord and Tenant that, at all times duringthe Lease Term, Tenant shall maintain tile Premises in an attractive,first-class and fully operative condition.

 

(b) All of Tenant’sobligations to maintain and repair shall be accomplished at Tenant’s soleexpense. If Tenant refuses or neglects to repair properly as required hereunderand to the reasonable satisfaction of Landlord, Landlord may, on ten (10) days’prior notice (except that no notice shall be required in case of emergency)enter the Premises and

 

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perform such repair and maintenance on behalfof Tenant without liability to Tenant for any loss or damage that may accrue toTenant’s merchandise, fixtures, or other property or to Tenant’s business byreason thereof, and upon completion thereof, Tenant shall pay Landlord’s costsfor making such repairs plus twenty percent (20°/o) for overhead, uponpresentation of a bill therefore, as Additional Rent. Such bill shall includeinterest at ten percent (10%) per annum on the costs incurred by Landlord fromthe date of completion of repairs by Landlord to the date paid by Tenant.

 

Section 12.4    Landlord’s Obligations. Subject to the provisions of Section 12.3(Tenant’s Obligations), Article XIII (Damage or Destruction), Article XIV(Condemnation), and Article X (Parking and Common Use Facilities), Landlordshall repair, maintain, and replace, as necessary, the roof, exterior walls,structural parts of the Premises and all meters, pipes, conduits, equipment,components and facilities that supply the Premises with utilities on anonexclusive basis (except to the extent the appropriate utility company hasassumed these duties); provided, however, that Landlord shall not be requiredto make repairs necessitated by reason or the negligence ofTenant or anyone claiming under Tenant, by reason of the failure of Tenant toperform or observe any conditions or agreements of this Lease, or by reason ofany improvements made by Tenant or anyone claiming under Tenant. Any and allsuch costs and expenses of Landlord shall lie an Operating Cost under Section4.5 hereof. ‘tenant waives the benefit of any other present or future law whichmay give the Tenant the right to repair the Premises at Landlord’s expense, tooffset the cost of any repairs performed Tenant against rent, or to terminatethe Lease due to the condition of the Premises.

 

Section 12.5     Rulesand Regulations.

 

(a)The Tenant agrees as follows:

 

(1)All garbage and refuse shall be kept in the kind of containerspecified by Landlord, and shall be placed outside of the Premises in specifiedtrash containers prepared for collection in the manner and at the times andplaces specified by Landlord. If Landlord shall provide or designate a servicefor picking tip refuse and garbage, Tenant shall use same atTenant’s cost. Tenant shall pay the cost of removal of Tenant’s refuse andrubbish.

 

(2)           No aerial or antennae shall beerected on the roof or exterior walls of the Premises, or at any locationwithin the Shopping Center, without the prior written consent of the Landlordwhich shall not be unreasonably withheld provided such aerial or antennae isnot visible from the ground. Any aerial or antennae installed withoutLandlord’s consent shall be subject to removal without notice at any time.

 

(3)           No loudspeakers, televisions,phonographs, radios, or other devices shall be used in a manner so as to beheard or seen outside of the Premises without the prior written consent of theLandlord.

 

(4)           The sidewalk areas immediatelyadjoining the Premises shall be kept clean and free from dirt and rubbish bythe Tenant to the satisfaction of the Landlord, and Tenant shall not place orpermit any obstruction or materials in such areas. No exterior storage or salesshall be allowed without Landlord’s prior written consent.

 

(5)           Tenant and Tenant’s employees shallpark only the number of cars approved and only in those portions of the parkingarea designated for that purpose by Landlord.

 

(6)           The plumbing facilities shall not beused for any other purpose than that for which they are constructed, and noforeign substance of any kind shall be thrown therein, and the expense of anybreakage, stoppage, or damage resulting from a violation of this provisionshall be borne by Tenant, who shall, or whose employees, agents or inviteesshall have caused it.

 

(7)           Tenant shall use at Tenant’s costsuch pest extermination contractor as Landlord may direct and at such intervalsas Landlord may require.

 

(8)          Tenant shall not burn any trash orgarbage of any kind in or about the Premises, or Shopping Center.

 

(9)           Tenant shall warehouse, store and/orstock in the Premises only such goods, wares and merchandise as Tenant intendsto offer for sale at retail at, in, from or upon the Premises. This shall notpreclude occasional emergency transfers of merchandise to the other stores ofTenant, if any, not located in the Shopping Center. Tenant shall use foroffice, clerical or other non-selling purposes only such space in the Premisesas is from time to time reasonably required for Tenant’s business in the Premises.

 

(10)         Tenant shall not cause or permit anyodors to be emitted from the Premises which do or may in Landlord’s judgmentaffect other tenant’s or patrons of the Shopping Center. Tenant agrees andacknowledges that if Tenant violates the foregoing provision and Landlordreceives complaints from other tenants(s) or visitor(s) of the Shopping Center,then Landlord shall have the right to determine what corrective measures arerequired and all such corrective measures shall be immediately undertaken by Tenantat Tenant’s sole cost and expense after receipt of notice of the requiredcorrective measures from Landlord. If Tenant does not comply, Landlord shallhave the right, but not the obligation, to cause such corrective measures to beimplemented and charge any and all costs thereof to Tenant as additional rentdue under this Lease.

 

(b)               Landlord reserves the right fromtime to time to amend or supplement the foregoing rules and regulations, and toadopt and promulgate additional rules and regulations applicable to thePremises. Notice of such rules and regulations and amendments and supplementsthereto, if any, shall be given to the Tenant and Tenant agrees to comply withall such rules and regulations upon receipt of notice. Landlord shall not beliable in any way to Tenant for any damage or inconveniencecaused by any other tenant’s non-compliance with these rules and regulations.

 

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Section 12.6     ConditionUpon Termination. Upon the expiration or early termination of this Lease,‘tenant shall surrender the Premises to Landlord, broom clean and in the samecondition as received except for ordinary wear and tear which Tenant was nototherwise obligated to remedy under any provision of this Lease. However, Tenantshall not be obligated to repair any damage which Landlord is required torepair under Article XIII (Damage or Destruction). All alterations, additionsand improvements shall be surrendered to Landlord upon the termination of thisLease, except that Tenant tray remove any of Tenant’s trade fixtures, machineryor equipment which can be removed without material damage to the Premises.Tenant shall repair, at Tenant’s expense, any damage to the Premises caused bythe removal of any such trade fixtures, machinery or equipment. In no event,however, shall Tenant remove any of the following materials or equipmentwithout Landlord’s prior written consent: any power wiring or power panels;lighting or lighting fixtures; wall coverings; drapes, blinds or other windowcoverings; carpets or other floor coverings; heaters, air conditioners or anyother heating or air conditioning equipment; fencing or security gates; orother similar building operating equipment and decorations.

 

Section 12.7              Monitoring, Inspection, and Remediating Mold.

 

(a)Monitoring of Premises. Tenant, at its sole cost and expense, shall: (i)Regularly monitor the Premises for the presence of mold or for any conditionsthat reasonably can be expected to give rise to mold (the “Mold Conditions”),including, but not limited to, observed or suspected instances of water damage,mold growth, repeated complaints of respiratory ailment or eye irritation byTenant’s employees or any other occupants in the Premises, or any notice from agovernmental agency of complaints regarding the indoor air quality at thePremises; and (ii) Promptly notify Landlord in writing if it suspects mold or Mold Conditions at the Premises.

 

(b)Inspection of Premises. In the event of suspected mold or Moldconditions at the Premises, ‘tenant, at its sole cost and expense, shallpromptly cause all inspection of the Premises to be conducted, during such timeas Landlord may designate, to determine if mold or Mold Conditions are presentat the Premises, and shall: (i) Notify Landlord, in writing, at least five (5)days prior to the inspection, of the date out which the inspection shall occur,and which portion of the Premises shall be subject to the inspection; (ii)Retain all industrial hygienist certified by the American Board of IndustrialHygienists (“CIH”) or all otherwise qualified mold consultant (generally, “MoldInspector”) to conduct die inspection; and (iii) Cause such Mold Inspector to:(A) Obtain or maintain errors and omissions insurance coverage with terms andlimits customarily maintained by Mold Inspectors, adding Landlord as alladditional insured with respect to Landlord’s vicarious liability, and provideto Landlord evidence of such coverage and a copy of the endorsement grantingLandlord additional insured status; (B) Perform the inspection in a manner thatis strictly confidential and consistent with the duty of care exercised by aMold Inspector; and (C) Prepare all inspection report, keep the results of theinspection report confidential, and promptly provide a copy to Landlord.

 

(c)Remediation of Mold. Iii the event the inspection required by Paragraph(b) hereof determines that mold or Mold Conditions are present at the Premisesand provided mold or Mold Conditions were not caused by the gross negligence orwillful misconduct involving all act or failure to act by Landlord or itsagents or contractors, then Tenant, at its sole cost and expense, shallpromptly: (A) Hire trained and experienced mold remediation contractors toprepare a remediation plan and to remediate the mold or Mold Conditions at thePremises; (B) Send Landlord notice, in writing, with a copy of the remediationplan, at least five (5) days prior to the mold remediation, stating: (1) Thedate on which the mold remediation shall start; (2) Which portion of thePremises shall be subject to the remediation; (3) The name, address, andtelephone number of the certified mold remediation contractors performing theremediation; (4) The remediation procedures and standards to be used at thePremises; (5) The clearance criteria to be employed at the conclusion of theretuediation; and (6) The date the remediation will conclude; (C) Notify, inaccordance with any applicable federal, state or local health or safetyrequirements, its *employees as*well as occupants and visitors of the Premises of the nature, location,and schedule for the planned mold remediation; (D) Ensure that the moldremediation is conducted in accordance with the relevant provisions of thedocument *MoldRemediation in Schools and Commercial Buildings (EPA 402-K-O1-001,*March *2001)*(“EPAGuidelines”), published by the U.S. Environmental Protection Agency, as may beamended or revised from time to time, or any other applicable, legally bindingfederal, state, or local laws, regulatory standards or guidelines; and (1:)Provide Landlord with a draft of themolts remediation report and give Landlord a reasonable opportunity to reviewand comment thereon, and when such report is finalized, promptly provideLandlord with a copy of the final remediation report.

 

(d)Post-Remediation Inspection. Tenant acknowledges and agrees thatLandlord and/or Landlord’s agents shall have a reasonable opportunity toinspect the remediated portion of the Premises after the conclusion of the moldremediation. If the results of Landlord’s inspection indicate that theremediation does not comply with the final remediation report or any otherapplicable *federal, state,*orlocal laws, regulatory standards or guidelines, including, without limitations,the EPA Guidelines, then Tenant, at its sole cost and expense, shallimmediately take all further actions necessary to ensure such compliance.

 

**ARTICLE XIIIDAMAGE OR DESTRUCTION**

 

Section 13.1     PartialDamage to Leased Premises. Tenant shall notify Landlord in writing immediatelyupon the *occurrenceof*any damage to thePremises. If the Premises is only partially damaged (meaning the cost to repairwould not exceed twenty-five percent *(25%,)*of replacement value) and if the proceeds received by Landlord from theinsurance policies described in Article IV (together with the deductible, ifany) are sufficient to pay for the necessary repairs, this Lease shall remainin effect and Landlord shall repair the damage is soon as reasonably possible.Landlord may elect to repair any damage to Tenant’s fixtures, equipment, orimprovements. If theinsurance proceeds received by Landlord (together with die deductible, if any)are not sufficient to pay the entire cost of repair, or if the cause of thedamage is not covered by the insurance policies which Landlord maintains underArticle IV, Landlord may elect either

 

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to (a) repair the damage as soon as reasonablypossible, in which case this Lease shall remain in full force and effect, or (b)terminate this Lease as of the date the damage occurred. Landlord shall usereasonable efforts to notify Tenant within sixty (60) days after receipt ofnotice of the occurrence of the damage, whether Landlord elects to repair thedamage or terminate this Lease. If Landlord elects to repair the damage, Tenantshall pay Landlord Tenant’s pro-rata share of any “deductible amount” underLandlord’s insurance policies, and, if the damage was due to an act or omissionof Tenant, the difference between the actual cost of repair and any insuranceproceeds received by Landlord. If the damage to the Premises occurs during thelast six (6) months of the Lease Term, Landlord may elect to terminate thisLease as of the date the damage occurred, regardless of the sufficiency of anyinsurance proceeds and Landlord may retain all insurance proceeds.

 

If the Premises are destroyed as described illthis Section, and Landlord elects to repair the damage, Landlord will giveTenant written notice of the estimated time period that Landlord has determinedin its reasonable discretion will be needed to repair the destruction. Suchnotice, provided Landlord elects to repair the damage, will be given on orbefore the expiration of one-hundred twenty (120) days (the “notice date”) afterthe occurrence of any destruction as described above. If the Premises aredestroyed to an extent Landlord has determined in its reasonable discretionLandlord call not commence repairs within three hundred sixty five (365) daysafter the notice date, then Tenant may cancel this Lease as or the (late of thedamage by written notice given to Landlord within ten (10) days afterLandlord’s delivery of a written notice that die commencement of repairs willnot occur within such three hundred sixty five (365) day period.

 

If the Premises are destroyed as described inthis Section, and Landlord elects to repair the damage, Landlord willreasonably approve Tenant’s use of a temporary structure on the Premises to beinstalled and maintained at Tenant’s sole expense from which Tenant can conductbusiness operations until such time that the damage is repaired.

 

Section 13.2     Totalor Substantial Destruction. If the Premises is totally or substantiallydestroyed (meaning the cost to repair would exceed twenty-five percent (25”/0)of replacement value) by any cause whatsoever, or if the Premises is ill abuilding which is substantially destroyed (even though the Premises is nottotally or substantially destroyed), this Lease shall, at the election of theLandlord, terminate as or the date the destruction occurred regardlessof whether Landlord receives any insurance proceeds. However, if the Premisescan be rebuilt within one (1) year after the date of destruction, Landlord mayelect to rebuild the Premises at Landlord’s owls expense (with all insuranceproceeds being made available to the Landlord to apply against such costs), inwhich case, this Lease shall remain ill full force and effect. Landlord shalluse reasonable efforts to notify Tenant of such election within sixty (60) daysafter the occurrence of total or substantial destruction. If the destructionwas caused by all act or omission of Tenant, Tenant shall pay Landlord Viedifference between the actual cost of rebuilding and any insurance proceedsreceived by Landlord.

 

If the Premises are destroyed as described inthis Section, and Landlord elects to repair the damage, Landlord will give‘tenant written notice of the estimated time period that Landlord hasdetermined in its reasonable discretion will be needed to repair thedestruction. Such notice, provided Landlord elects to repair the damage, willbe given oil or before the expiration one-hundred twenty (120) days (the“notice date’“) after the occurrence of any destruction as described above. Ifthe Premises are destroyed to ail extent Landlord has determined in itsreasonable discretion Landlord call not commence repairs within three hundredsixty five (365) days after the notice date, then Tenant may cancel this Leaseas of the date or lute damage by written notice given toLandlord within tell (10) days after Landlord’s delivery of a written noticethat the commencement of repairs will not occur within such three hundred sixtyfive (365) day period.

 

If the Premises are destroyed as described inthis Section, and Landlord elects to repair the damage, Landlord willreasonably approve Tenant’s use or a temporary structure oil the Premises to beinstalled and maintained at Tenant’s sole expense from which Tenant callconduct business operations until such time that the damage is repaired.

 

Section 13.3     IntentionallyOmitted.

 

Section 13.4     Landlord’sObligations. Landlord shall not be required to repair any injury or damageby fire or other cause, or to make any restoration or replacement orallypaneling, decorations, partitions, railings, floor coverings, office fixturesor any other non-building shell reliant improvements or property installed inthe Premises by Tenant or at the direct or indirect expense of Tenant which arenot part of the original improvements installed or paid for by Landlord. Tenantshall be required to restore or replace same in the event of damage except fordamage caused solely by tile Landlord’s negligence or willful misconduct.Tenant shall have no claim against Landlord for any damage suffered by reasonof any such damage, destruction, repair or restoration, nor shall Tenant havethe right to terminate this Lease as the result of any statutory provision nowor hereafter in effect pertaining to the damage and destruction of the Premises,except as expressly provided herein.

 

Section 13.5     TemporaryReduction of Rent. If the Premises is destroyed or damaged and Landlord orTenant repairs or restores the Premises pursuant to the provisions of thisArticle XIII, any rent payable during the period of such damage, repair and/orrestoration shall be reduced by the amount payable under any rental incomeinsurance paid to Landlord. Except for such possible reduction in paymentsrequired from the Tenant, Tenant shall not be entitled to ally compensation,reduction, or reimbursement from Landlord as a result of any damage,destruction, repair, or restoration of or to the leased Premises.

 

Section 13.6     Waiver.Since Landlord and Tenant have agreed that the provisions of this Article XIIIshall govern the rights and obligations of Landlord and Tenant in the event ofany damage or destruction of the Premises, Tenant waives the provisions of anylaw, statute, code or judicial decision which grants a tenant the right toterminate a lease in the event of damage or destruction or the Premises.

 

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**ARTICLE YIV**

**CONDEMNATION**

 

Section 14.1     TotalCondemnation. If the whole of the Premises shall be acquired or condemnedby eminent domain for any public or quasi-public use or purpose, then the Termof this Lease shall cease and terminate as of the date of title vesting in suchproceeding and all rentals shall be paid tip to that date and Tenant shall haveno claim against Landlord for the value of any unexpired Term of this Lease.

 

Section 14.2     TotalCondemnation of Parking-Area. If the whole of the common parking areas inthe Shopping Center shall be acquired or condemned by eminent domain for anypublic or quasi-public use or purpose, then the Term of this Lease shall ceaseand terminate as of the date of title vesting in such proceeding unlessLandlord shall take reasonable steps to provide other parking facilitiessubstantially equal to the previously existing ratio between the common parkingareas and the Premises, and such substantially equal parking facilities shallbe provided by Landlord at its own expense within ninety (90) days from the(late of acquisition. In the event that Landlord shall provide such othersubstantially equal parking facilities, then this Lease shall continue in fullforce and effect. In any event, Tenant shall have no claim against Landlord forthe value of any unexpired Term of this Lease.

 

Section 14.3     PartialCondemnation. If any pmt of the Premises shall be acquired or condemned byeminent domain for any public or quasi-public use or purpose, and in the eventthat such partial taking or condemnation shall render the Premises notreasonably suitable for the business of the Tenant, then tile Term of thisLease shall cease and terminate as of tire date of title vesting in suchproceeding and Tenant shall have no claim against Landlord for the value of anyunexpired term of this Lease. In the event of a partial taking or condemnationwhich is not extensive enough to render the Premises unsuitable for thebusiness of the Tenant, their Landlord shall within a reasonable tine restorethe Premises to a condition comparable to its condition at the time of suchcondemnation less the portion lost in the taking, and this Lease shall continuein full force and effect.

 

Section 14.4     PartialCondemnation of Parking Area. If any part of the parking area in theShopping Center shall be acquired or condemned by eminent domain for any publicor quasi-public use or purpose and if, as the result of such partial taking theratio of square feet of parking area and common use areas and facilities asdescribed in Section 10.1 hereof to square feet of the sales area of the entireShopping Center buildings is reduced to a ratio below two to one, then the Termof this Lease shall cease and terminate from the date of title vesting in suchproceeding, unless the Landlord shall take reasonable steps toward increasingsaid ratio to a ratio equal to or in excess of two to one, in which event thisLease shall be unaffected and remain in full force and effect as between theparties. In any event, Tenant shall have no claim against Landlord for thevalue of any unexpired Term of this Lease.

 

Section 14.5     Condemnationof Less Than A Fee. In the event of a condemnation of a leasehold interestin all or a portion of the Premises without lie condemnation of the fee simpletitle also, thus Lease shall not terminate and such condemnation shall notexcuse Tenant from full performance of all of its covenants hereunder, butTenant in such event shall be entitled to present or pursue against thecondemning authority its claim for and to receive all compensation or damagessustained by it by reason of such condemnation, and Landlord’s right to recovercompensation or damages shall be limited to compensation for and damages, ifany, to its reversionary interest, it being understood, however, that duringsuch time as Tenant shall be out of possession of the Premises by reason ofsuch condemnation, the Lease shall not be subject to forfeiture for failure toobserve and perform those covenants not calling for the payment of money. Inthe event the condemning authority shall fail to keep the Premises in the stateof repair required hereunder, or to perform any other covenant not calling forthe payment of money, Tenant shall have ninety (90) days after the restorationof possession to it within which to carry out its obligations under suchcovenant or covenants. During such time as Tenant shall be out of possession ofthe Premises by reason of such leasehold condemnation, Tenant shall pay toLandlord, in lieu of the Minimum Rents, and in addition to any other paymentsrequired of Tenant hereunder, an annual rent equal to the average annualMinimum Rents paid by Tenant far the period from the commencement of the Tenantuntil the condemning authority shall take possession, or during the precedingthree (3) full calendar years, whichever period is shorter. At any time aftersuch condemnation or proceedings are commenced, Landlord shall have the right,at its option, to require Tenant to assign to Landlord all compensation anddamages payable by the condemnor to Tenant, to be held without liability forinterest thereon as security for the full performance of Tenant’s covenantshereunder, such compensation and damages received pursuant to said assignmentto be applied first to the payment of rents and all other sums from time totime payable by Tenant pursuant to the terms of this Lease as such sums falldue, and the remainder, if any, to be payable to Tenant at the end of the Termhereof or on restoration of possession to Tenant, whichever shall first occur, it being understood and agreed that such assignment shall not relieveTenant of any of its obligations under this Lease with respect to such rentsand other sums except as the same shall be actually received by Landlord.

 

Section 14.6     Distributionof Condemnation Award. Any condemnation award or payment shall bedistributed in the following order: (a) first, to any ground lessor, mortgageeor beneficiary under a deed of trust encumbering the Premises, the amount ofits interest in the Premises; (b) second, to Tenant, only the amount of anyaward specifically designated for loss of or damage to Tenant’s trade fixturesor removable personal property and the Tenant hereby assigns any other rightswhich the Tenant may have now or in the future to any other award to theLandlord; and (c) third, to Landlord, the remainder of such award, whether ascompensation for reduction in the value of the leasehold, tire taking of thefee, or otherwise. If this Lease is not terminated, Landlord shall repair anydamage to the Premises caused by the condemnation, except that Landlord shallnot be obligated to repair any damage for which Tenant has been reimbursed bythe condemning authority. If the severance damages received by Landlord are notsufficient to pay for such repair, Landlord shall have the right to eitherterminate this Lease or make such repair at Landlord’s expense. Tenant shallhave the right to pursue its claim against the condemning authority for tradefixtures, improvements, good will, and moving expenses in connection with anyeminent domain proceeding provided that any such claim does not diminishLandlord’s

 

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award for the taking of Landlord’s landimprovements, loss of rental income, or compensation for reduction in the valueof the leasehold.

 

**ARTICLE XV**

**ASSIGNMENT AND SUBLETTING**

 

Section 15.1     Landlord’s Consent Required. Tenant shall not either voluntarily or byoperation of law, assign, mortgage, pledge, hypothecate or encumber this Leaseor the leasehold interest created hereby or any interest herein, or sublet thePremises or any portion thereof; or license the use of all or any portion ofthe Premises or permit any other person to occupy or use the Premises or anyportion thereof (hereinafter collectively “Transfer”), without the priorwritten consent of Landlord, which consent is subject to the followingconditions: (i) the proposed transferee’s use of the Premises must beconsistent with Articles VII and IX hereof; (if) fit Landlord’s reasonablebusiness judgment, the proposed transferee must have sufficient businessreputation and experience to operate a successful business of the type andquality permitted tinder this Lease; (iii) intentionally omitted; (iv) theproposed Transfer must not breach arty covenant of Landlord respecting radius,business location, rise or exclusivity in any other lease, financing agreementor any other agreement relating to the Shopping Center or, in Landlord’sreasonable business judgment, create a tenant ntix concern; (v) the net worthof the proposed transferee must not be less than ten million and no/100 dollars($10,000,000.00); (vi) twenty-five percent (25°/0) of any profit received bythe Tenant from the proposed Transfer, whether during or after the Term of thisLease, shall be paid to Landlord when received; and (vii) the proposedtransferee must not be an existing tenant fit the Shopping Center.

 

Section 15.2     Transfers of Interests in Tenant RequiringLandlord’s Consent. If Tenant or its general partner or manager hereunderis a corporation which, under laws of Nevada, is not deemed a publiccorporation, or is art unincorporated association or partnership, or a limitedliability company, then the transfer, assignment, or hypothecation of any stockor interest in such corporation, association or partnership, or limitedliability company or its general partner or manager in the aggregate fit excessof fifty-one percent (51”%) shall be deemed a Transfer under the meaning ofthis Article XV. Tenant may assign all or part of this Lease, or sublease allor a part of the Premises, to: (a) any corporation that has the power to directTenant’s management and operation, or any corporation whose management antioperation is controlled by Tenant; or, (b) any corporation a majority of whosevoting stock is owned by Tenant; or (c) any corporation in which or with whichTenant, its corporate successors or assigns, is merged or consolidated, inaccordance with applicable statutory provisions for merger or consolidation ofcorporations, so long as the liabilities of the corporations participating insuch merger or consolidation are assumed by the corporation surviving suchmerger or created by such consolidation; or (d) any corporation acquiring thisLease and a substantial portion of Tenant’s assets; or (e) any corporatesuccessor to a successor corporation becoming such by either of the methodsdescribed fit (c) or (d), so long as oil the completion of such merger,consolidation, acquisition, or assumption, the successor has a net worth noless than Tenant’s net worth immediately prior to such merger, consolidation,acquisition, or assumption. Such assignment or sublease shall be deemed a Transferunder the meaning of this Article XV, and shall in no event release Tenant orchange Tenant’s primary liability to pay the rent and to perform all otherobligations of Tenant under this Lease.

 

Section 15.3     Grant of Concessions: Conditions to Grant. The provision against subletting elsewherecontained in this Lease shall not prohibit Tenant from granting concessions forthe operation of one or more departments of tile business which Tenant ispermitted under Section 1.8, if any, to conduct in or upon the Premises;provided, however, that (a) each such concession may be granted only uponreceipt by Tenant of the written consent of [lie Landlord and shall be subjectto all the terms and provisions of this Lease; (b) all of the provisions hereofapplying to the business of Tenant shall apply to each such concession; and (c)at least seventy-five percent (75°/0) of the sales flour area of the Premisesshall at all times be devoted to the business of and be operated by Tenant.

 

Section 15.4     Transfer Without Consent. Any Transfer without Landlord’s priorwritten consent shall, at the option of the Landlord, constitute a non-curablebreach of this Lease. In the absence of art express agreement in writing to thecontrary, no Transfer shall act as a release of Tenant from any of theobligations and agreements on its part to be kept and performed hereunder.Tenant hereby fully waives and relinquishes any rights it may have underapplicable law, statute, code or judicial decision, otherwise permitting Tenantto seek damages against Landlord and/or to attempt to terminate this Lease inconnection with all allegation that Landlord has unreasonably withheld consentto a Transfer. Tenant agrees and acknowledges that Tenant’s sole right andremedy against Landlord in such instance shall be to seek and to have theTransfer approved as consistent with the terms anti provisions of this Lease orbased upon a determination that Landlord has unreasonably withheld its consentto the proposed Transfer.

 

Section 15.5     NoRelease of Tenant. No transfer permitted by this Article XV, shall releaseTenant or change Tenant’s primary liability to pay the rent and to perform allother obligations of Tenant tinder this Lease. Landlord’s acceptance of rentfrom any other person shall not constitute a waiver of any provision of thisArticle XV. Consent to one transfer shall not be construed as a consent to anysubsequent transfer. Landlord may consent to subsequent assignments ormodifications of this Lease by Tenant’s transferee without notifying Tenant orobtaining its consent, and no such action or transfer shall relieve Tenant fromliability tinder this Lease.

 

Section 15.6     Landlord’sElection. Tenant’s request for consent to any transfer described in Section15.1 above shall be accompanied by a written statement setting forth thedetails of the proposed transfer, including the name, business and financialcondition of the prospective transferee, financial details of the proposedtransfer (e.g., the terns of and rent and security deposit payable under anyassignment or sublease), and any other information requested by Landlord.

 

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Landlord shall have the right (a) to withholdconsent based upon the standards set forth in Section 15.1; (b) to grantconsent; or (c) if the transfer is a sublease of the Premises or an assignmentof this Lease, to terminate this Lease as of the effective date of suchsublease or assignment, in whichcase**Landlord may elect to enter into a directlease with the proposed assignee or subtenant.

 

Section 15.7     No Merger. No merger shall result from Tenant’s sublease of the Premises underthis Article XV, Tenant’s surrender of this Lease or the termination of thisLease in any other manner. In any such event, Landlord may terminate any or allsubtenancies or succeed to the interest o fTenant as sub-landlord thereunder.

 

Section 15.8     AssignmentFees and Procedures. In the event Landlord shall be requested to consent toa sublease, assignment, pledge, encumbrance, or any other transfer of all orany portion of Tenant’s rights hereunder, as specified in Section 15.1 hereof,Tenant shall pay Landlord’s reasonable fee not to exceed Five Hundred Dollars($500.00) to reimburse Landlord for costs and expenses, excluding attorneys’fees, incurred in connection with reviewing Tenant’s request for consent whichshall also be reimbursed by Tenant pursuant to Section 18.2 herein. Tenant’scheck for the assignment fee shall be delivered to Landlord concurrent withTenant’s request for consent.

 

**ARTICLE XVI**

**DEFAULTS: REMEDIES**

 

Section 16.1     Covenantsand Conditions. Tenant’s performance of each of Tenant’s obligations underthis Lease is a condition as well as a covenant. Tenant’s right to continue inpossession of the Premises is conditioned upon full performance of all suchconditions. Time is of the essence in the performance of all covenants andconditions.

 

Section 16.2              Defaults. Tenant shall he in materialdefault under this Lease:

 

(a)If Tenant abandons or vacates the Premises;

 

(b)If Tenant fails to pay rent or any other charge required to be paid by Tenant,as and when due;

 

(c)If Tenant fails to perform any of Tenant’s nonmonetary obligations under thisLease fern period of twenty (20) days after written notice from Landlord; providedthat if more time is required to complete such performance, Tenant shall not bein default if Tenant commences such performance within the twenty (20)-dayperiod and thereafter diligently pursues its completion. However, Landlordshall not be required to give such notice if Tenant’s failure to performconstitutes a non-curable breach of this Lease. The notice required by thisParagraph is intended to satisfy any and all notice requirements imposed by lawoil Landlord prior to the commencement of an unlawful detainer action and isnot in addition to any such requirement;

 

(d)(i) If Tenant makes a general assignment or general arrangement for the benefitof creditors; (ii) if a petition for adjudication of bankruptcy or forreorganization or rearrangement is filed by or against Tenant and is notdismissed within thirty (30) clays; (iii) if a trustee or receiver is appointedto like possession of substantially all of Tenant’s assets located at thePremises or of Tenant s interest in this Lease and possession is not restoredto Tenant within thirty (30) days; or (iv) if substantially all of Tenant’sassets located at the Premises or of Tenant’s interest in this Lease issubjected to attachment, execution or other judicial seizure which is notdischarged within thirty (30) days. If a court of competent jurisdictiondetermines that any of the acts described in this subparagraph (d) is not adefault under this Lease, and a trustee is appointed to take possession (or ifTenant remains a debtor in possession) and such trustee or Tenant transfersTenant’s interest hereunder, then Landlord shall receive, as Additional Rent,the difference between the rent (or any other consideration) paid in connectionwith such assignment or sublease and the rent payable by Tenant hereunder,

 

Section 16.3     Defaultby Landlord. Landlord shall not be in default unless Landlord fails toperform obligations required of Landlord within a reasonable time, but in noevent later than thirty (30) days after written notice by Tenant to Landlordand to the holder of any first mortgage or deed of trust covering the Premiseswhose name and address shall have theretofore been furnished to Tenant inwriting, specifying wherein Landlord has failed to perform such obligation;provided, however, that if the nature of Landlord’s obligation is such thatmore than thirty (30) days are required for performance, then Landlord shallnot be in default if Landlord commences performance within such thirty (30)-dayperiod and thereafter diligently prosecutes the same to completion. Under nocircumstances shall Tenant have the right to terminate this Lease as a resultof Landlord’s default hereunder.

 

Section 16.4     Remedies.Oil the occurrence of any default by Tenant hereunder, Landlord may, at anytime thereafter, with or without notice or demand and without limiting Landlordin the exercise of any right or remedy which Landlord may have:

 

(a)TerminateTenant’s right to possession of the Premises by any lawful means, iii whichcase this Lease shall terminate and Tenant shall immediately surrenderpossession of the Premises to Landlord. In such event Landlord shall have theimmediate right to re-enter the Premises and remove all persons and propertyand such property may be removed and stored in a public warehouse or elsewhereat the cost of, and for the account of Tenant, all without service of notice orresort to legal process and without being deemed guilty of trespass, orbecoming liable for any loss or damage which may be occasioned thereby; andLandlord shall be entitled to recover from Tenant all damages incurred byLandlord by reason of Tenant’s default, including (i) the worth at the time ofthe award of all Minimum Monthly Rent, Additional Rent and outer charges whichwere earned or were payable at tile time of the termination; (ii) the worth atthe time of the award of the amount by which the unpaid Minimum Monthly Rent,Additional Rent and other charges

 

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which would have been carved or were payableafter termination until the time of the award exceeds the amount of such rentalloss that Tenant proves could have been reasonably avoided; (iii) the worth atthe time of the award of the amount by which the unpaid Minimum Monthly Rent,Additional Rent and other charges which would have been payable for the balanceof the Term after the time of award exceeds the amount of such rental loss thatTenant proves could have been reasonably avoided; and (iv) any other amountnecessary to compensate Landlord for all the detriment proximately caused byTenant’s failure to perform its obligations under this Lease or which in theordinary course of things would be likely to result therefrom whether providedby this Lease or allowed by applicable law, including, but not limited to, anycosts or expenses incurred by Landlord in maintaining or preserving thePremises after such default, the cost of recovering possession of the Premises,expenses of reletting, including necessary renovation or alteration of thePremises, Landlord’s reasonable attorneys’ fees, and any real estatecommissions or other such fees paid or payable. As used in subparts (i) and(ii) above, the “worth at the time of the award” is computed by allowinginterest on unpaid amounts at the rate of fifteen percent (15’%) per annum, orsuch lesser amount as may then be the maximum lawful rate. As used in subparts(i) and (ii) above, the “worth at the time of the award” is computed bydiscounting such amount at the discount rate of the Federal Reserve Bank of SanFrancisco at the time of the award, plus one percent (1%). If Tenant shall haveabandoned the Premises, Landlord shall have the option of (i) retakingpossession of the Premises and recovering from Tenant the amount specified inthis Section 16.4(a), or (ii) proceeding under Section 16.4(b);

 

(b)Maintain Tenant’s right to possession, in which case this Lease shall continuein effect whether or not Tenant shall have abandoned the Premises. ]it suchevent, Landlord shall be entitled to enforce all of Landlord’s rights andremedies nuclei- this Lease, including the right to recover the rent as itbecomes due hereunder. Tenant acknowledges that Landlord may continue the Leasein effect after Tenant’s breach anti abandonment and recover rent as it becomesdue;

 

(c)Pursue any other remedy now or hereafter available to Landlord under the tawsor judicial decisions of the state in which the Premises is located.

 

Section 16.5    TheRight to Relet the Premises. Should Landlord elect to re-enter, as hereinprovided, or should it take possession pursuant to legal proceedings orpursuant to any notice provided for by law, it may either terminate this Leaseor it may from time to time without terminating thisLease, make such alterations and repairs as may be necessary in order to reletthe Premises, and relet the Premises or any part thereof for such term or terms(which may be from time to time****extendingbeyond the ‘term of this Lease) anti at such rent or rents and upon such otherterms anti conditions as Landlord in its sole discretion may deem advisable;upon each such reletting, all rent received by the Landlord from such relettingshall be applied, first, to the repayment of any indebtedness other than rentdue hereunder from Tenant to Landlord; second, to the payment of any costs andexpenses of such reletting, including brokerage fees and attorneys’ fees antiof costs of such alterations and repairs; third, to the payment of rent due andunpaid hereunder, and the residue, if any, shall be held by Landlord antiapplied in payment of future rent as the same may become due and payablehereunder. If such rentals received front such reletting during any month areless than that to be paid during that month by Tenant hereunder, Tenant shallpay any such deficiency to Landlord. Such deficiency shall be calculated andpaid monthly. No such re-entry or taking possession of said Premises byLandlord shall be construed as an election on its part to terminate this Leaseunless a written notice of such intention be given to Tenant or unless thetermination thereof be decreed by a court of competent jurisdiction.

 

Section 16.6    Waiverof Rights of Redemption. Tenant hereby expressly waives any and all rightsof redemption granted by or under any present or future laws in the event of Tenantbeing evicted or dispossessed for any cause, or in the event of Landlordobtaining possession of the Premises, by reason of the violation by Tenant ofany of the covenants or conditions of this Lease, or otherwise.

 

Section 16.7    CumulativeRemedies. Landlord’s exercise of any right or remedy shall not prevent itfrom exercising any other right or remedy.

 

Section 16.8    LateCharges. Tenant hereby acknowledges that late payment by Tenant to Landlordof rent and other sums due hereunder will cause Landlord to incur costs notcontemplated by this Lease, the exact amount of which will be extremelydifficult anti costly to ascertain. Such costs include, but are not limited to,processing, administrative and accounting charges, and late charges which maybe imposed out Landlord by the terms of any mortgage or trust deed covering thePremises. Accordingly, if any installment of rent or any other sum due fromTenant shall not be received by Landlord or Landlord’s designee within ten (10)days after such amount shall be due, Tenant shall pay to Landlord a late chargeequal to ten percent (10”%) of such overdue amount. The parties hereby agreethat such late charge represents a fair anti reasonable estimate of the costsLandlord will incur as a consequence of late payment by Tenant. Acceptance ofsuch late charge by Landlord shall in no event constitute a waiver of Tenant’sdefault with respect to such overdue amount, nor prevent Landlord fromexercising any of the other rights anti remedies granted hereunder.

 

**ARTICLE WIT**

**PROTECTION OF CREDITORS**

 

Section 17.1    Subordination.This Lease is anti shall be subordinate to any ground lease, deed of trust ormortgage encumbering the Premises, any advances made out the security thereofand any renewals, modifications, consolidations, replacements or extensionsthereof, whenever made or recorded. If any ground lessor, beneficiary ormortgagee elects to have this Lease prior to the lien of its ground lease, deedof trust or mortgage and gives written notice thereof to Tenant, this Leaseshall be deemed prior to such ground lease, deed of trust or mortgage whetherthis Lease is dated prior or subsequent to the date of such ground lease, deedof trust or mortgage or the date of recording thereof.

 

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Section 17.2     Attornment.If Landlord’s interest in tire Premises is acquired by any ground lessor,beneficiary under a deed *of*trust,mortgagee, or purchaser at a foreclosure sale, Tenant shall attorn to thetransferee of or successor to Landlord’s interest in the Premises and recognizesuch transferee or successor as its landlord under this Lease. Tenant waivesthe protection of any statute or rule of law which gives or purports to giveTenant any right to terminate this Lease or surrender possession of thePremises upon the transfer of Landlord’s interest.

 

Section 17.3     Signingof Documents. ‘tenant shall execute, have notarized at Tenant’s expense anddeliver ally instrument or documents necessary or appropriate to effectuate orevidence any such attornment or subordination or agreement to do so. If Tenantfails to do so within tell (10) days alter written request (i) Tenant herebymakes, constitutes and irrevocably appoints Landlord, or any transferee orsuccessor of Landlord, the attorney-in-fact of Tenant to execute and deliverany such instrument or document and (ii) such failure shall constitute adefault under this Lease entitling Landlord to terminate this Lease.

 

Section 17.4     EstoppelCertificates.

 

(a)UponLandlord’s written request, Tenant shall execute, have notarized at Tenant’sexpense and deliver to Landlord a written statement certifying: (i) that noneof the terms or provisions of this Lease have been changed (or *if*they have been changed, stating flow they havebeen changed); (ii) that this Lease has not been canceled or terminated; (iii)the last slate of payment of tile Minimum Monthly Rent and other charges andthe time period covered by such payment; (iv) that Landlord is not in defaultunder this Lease, or if Landlord is claimed to be in default, stating why; and(v) such other statements as required by Landlord, or any tender or prospectivetender, investor or purchaser. Tenant shall deliver such statement to Landlordwithin ten (10) days after Landlord’s request. Any such statement by Tenant maybe given by Landlord to any prospective purchaser or encumbrancer of thePremises. Such purchaser or encumbrancer may rely conclusively upon suchstatement as trite and collect.

 

(b)IfTenant does not deliver such statement to Landlord within such tell (10)-dayperiod, (i) Tenant irrevocably constitutes and appoints Landlord as its specialattorney-in-fact to execute and deliver the certificate to any third party, and(ii) such failure shall constitute a default under this Lease entitlingLandlord to terminate this I-ease. Further, Landlord, and any prospectivepurchaser or encumbrancer, may conclusively presume and rely upon the followingfacts: (i) that the terms and provisions of this Lease have not been changedexcept as otherwise represented by landlord; (ii) that this Lease has not beencanceled or terminated except as otherwise represented by Landlord; (iii) thatnot more than one months Minimum Monthly Rent or other charges have been paidin advance; and (iv) that Landlord is not in default under this Lease. Ill suchevent, Tenant shall be estopped front denying the truth of such facts.

 

Section 17.5     Tenant’sFinancial Condition. Within ten (10) days after written request frontLandlord, provided Landlord is undertaking financing or a sale of assets thatinclude the Premises, Tenant shall deliver to Landlord such financialstatements as are reasonably required by Landlord to verify the net worth ofTenant, or any assignee, subtenant, or guarantor of Tenant provided all such financialstatements shall remain confidential and shall be used only for the purposesset forth herein. Alternatively, Tenant may deliver such financial statementsdirectly to any lender or proposed purchaser of the premises designated byLandlord any financial statements required by such lender to facilitate thesale, financing or refinancing of the Premises provided all such financialstatements shall remain confidential and shall be used only for the purposesset forth herein. Tenant represents and warrants to Landlord that (a) each suchfinancial statement is a ti Lie and accurate statement as of tile date of suchstatement; and (b) at all times after the date of any such statement during theLease Term or any extension thereof, Tenant’s net worth, as stated therein,shall not be reduced. All financial statements shall be confidential and shallbe used only for the purposes set forth herein.

 

Section 17.6 Mortgagee Protection Clause. Tenant agrees to give any rnortgagees and/ortrust deed holders, by registered mail, a copy orally notice of default, *served upon*the Landlord, provided that prior to suchnotice Tenant has been notified in writing (by way of Notice of Assignment ofRents and Leases, or otherwise) of the addresses of such mortgagees and/or nestdeed holders, Tenant further agrees that if Landlord shall have failed to curesuch default within the time provided for in this Lease, then the mortgageesand/or trust decd holders shall have all additional thirty days (30) withinwhich to cure such default or if such default cannot be cured within that time,then such additional time as may be necessary if within such thirty days (30)any mortgagee and/or trust deed holder has commenced and is diligently pursuingthe remedies necessary to cure such default (including but not limited tocommencement of foreclosure proceedings if necessary to affect such cure), inwhich event this *Lease shall*not beterminated while such remedies are being so diligently pursued.

 

**ARTICLEXVIII**

**LEGAL COSTS**

 

Section 18.1     LegalProceedings. Tenant shall reimburse Landlord, upon demand, for any costs orexpenses incurred by Landlord in connection with any breach or default ofTenant under this Lease, whether or not suit is commenced or judgment entered.Such costs shall include legal fees and costs incurred for [lie negotiation ofa settlement, enforcement of rights or otherwise. Furthermore, if any actionfor breach of or to enforce tile provisions of this Lease is commenced, theprevailing party shall be entitled to recover reasonable attorneys fees as partof its judgment. Tenant shall also indemnify Landlord against and hold Landlordharmless from all costs, expenses, demands and liability incurred by Landlordif Landlord becomes or is made a party to ally claim or action (a) institutedby Tenant, or by any third patty against Tenant, or by or against any personholding any interest trader or using the Premises by license of or agreementwith Tenant; (b) for foreclosure of**any lien for labor or material furnished to or for Tenant or such otherperson; (c) otherwise arising out *of*orresulting from any act or transaction of Tenant or such other person; or (d)necessary to protect Landlord’s interest under this Lease in a bankruptcyproceeding, or other proceeding under Title 11 of the United States Code, asamended. Tenant shall defend Landlord against any such claim or action atTenant’s

 

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expense with counsel reasonably acceptable toLandlord or, at Landlord’s election, Tenant shall reimburse Landlord for anylegal fees or costs incurred by Landlord in any such claim or action.

 

Section 18.2     Landlord’sConsent. Tenant shall pay Landlord’s reasonable attorneys’ fees incurred inconnection with Tenant’s request for Landlord’s consent under Article XV(Assignment and Subletting), or in connection with any other act which Tenantproposes to do and which requires Landlord’s consent.

 

**ARTICLE XIX**

**MISCELLANEOUS PROVISIONS**

 

Section 19.1     Non-Discrimination.Tenant promises, and it is a condition to the continuance of this Lease, thatthere will be no discrimination against, or segregation of, any person or groupof persons on (lie basis race, color, sex, creed, national origin or ancestryin the leasing, subleasing, transferring, occupancy, tenure or use of thePremises or any portion thereof.

 

Section 19.2     Landlord’sLiability: Certain Duties. As used in this Lease, the term “Landlord” meansonly the current owner or owners of the fee title to the Premises or theleasehold estate tinder a ground lease of the Premises at the time in question.Each Landlord is obligated to perform the obligations of Landlord under thisLease only during the time such Landlord owns such interest or title. AnyLandlord who transfers its title or interest is relieved of all liability withrespect to the obligations of Landlord under this Lease to be performed oil orafter the date of transfer. However, each Landlord shall deliver to itstransferee all fluids previously paid by-l-errant if such funds have not yetbeen applied under the terms of this Lease.

 

Section 19.3     Severabilitv.A determination by a court of competent jurisdiction that any provision of thisLease or any part thereof is illegal or unenforceable shall not cancel orinvalidate the remainder of such provision or this Lease, which shall remain infull force anti effect.

 

Section 19.4     Interpretation.The captions of the Articles or Sections of this Lease are to assist theparties in reading this Lease and are not a part of the terms or provisions ofthis Lease. Whenever required by the context of this Lease, the singular shallinclude the plural and the plural shall include the singular. The masculine,feminine and neuter genders shall each include the other. In any provisionrelating to the conduct, acts or omissions of Tenant, the term “Tenant” shallinclude Tenant’s agents, employees, contractors, invitees, successors or othersusing the Premises with Tenant’s expressed or implied permission.

 

Section 19.5     OtherTenancies. Landlord reserves the absolute right to effect such othertenancies in the Shopping Center as Landlord, in the exercise of its solebusiness judgment, shall determine. Tenant does trot rely oil the fact, nordoes Landlord represent, that any specific tenant or type or number of tenantsshall, during the term of this Lease either (i) enter into a (case for anyspace in the Shopping Center, or (ii) continue to lease any space in theShopping Center tinder arty lease which is in effect as of the slate of thisLease, or that any tenant tinder any lease in effect as of the date of thisLease will not assign or transfer its interest tinder its lease or change theuse of the premises under such lease. By executing this Lease, Tenantacknowledges that Landlord has not made any representations, warranties orstatements as to any of the foregoing and agrees that the occurrence of any ofthe foregoing or any similar event shall not affect Tenant’s obligations tinderthis Lease.

 

Section 19.6Entire Agreement. This Lease and theExhibits, and Rider, if any, attached hereto and forming a part hereof, setforth all the covenants, terms, provisions, warranties (if any), obligations,limitations, promises, representations, agreements, conditions andunderstandings, either oral or written, between Landlord and Tenant concerningtile Premises and there are no covenants, terms, provisions, warranties (ifany), obligations, limitations, promises, representations, agreements,conditions or understandings, either oral, or written, between them other thanare herein set forth. Except as herein otherwise provided, no subsequentalteration, amendment, change or addition to this Lease shall be binding uponLandlord or Tenant unless reduced to writing and signed by the party to becharged with their performance . Tenant acknowledges and agrees that no priorinformation provided or statements made by Landlord or its agent(s), includingwithout limitation, estimated gross sales, estimated Operating Cost expenses orcalculations, and any other financial matters, and matters related to: (a) anyof the premises in the Shopping Center; (b) the Shopping Center itself; or (c)the number and kinds of tenants in the Shopping Center, have in any way inducedTenant to enter into this Lease.

 

Section 19.7     Notices. Every notice, request, demand, consent, approval, or other communicationrequired or permitted tinder this Lease must be written and must identify byname and number the section of tile Lease to which it relates. Every noticewill be given only (a) by personal delivery; or (b) by personal servicepursuant to the Federal Rules of Civil Procedure, in which event it will bedeemed received upon service; or (c) by deposit in any depository regularlymaintained by the United States Postal Service, postage pre-paid, certifiedmail, return receipt requested, addressed in accordance with this Section, inwhich event it will be deemed received on the third day after deposit; or (d)by nationally recognized courier service that regularly provides writtenevidence of the date of delivery, in which event it will be deemed received onthe day of delivery; or (c) by telecopy, in which event it will be deemedreceived upon the sender’s receipt of evidence of complete and successfultransmission of the entire notice during normal business hours.

 

Landlord:                                                                                             McQueen Crossings, LLC221 Fifteenth StreetDel Mar, CA 92014Telecopy No. (858) 724-8870

 

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Tenant:                                                                                                       Notices to Tenant shall be delivered to theaddress specified in Section 1.3 above, except that duplicate notices (ororiginal notices required by law to be served to the Premises) upon Tenant’staking possession of the premises may be served to the Premises. (See Section1.3)

 

Notices may be given by an agent out behalf ofLandlord. Landlord may change its or add additional, or telecopier numbers forpurposes of this Section by giving ten (10) days’ prior notice according tothis Section. If a notice is given by more than one method, it will be deemedreceived upon the earlier of the dates of receipt pursuant to this Section. Ifa notice is given to more than one recipient, it will be deemed received onlyupon the date of receipt by Landlord or Tenant, as the case may be, and not anyother recipient.

 

Section 19.8     Waivers.All waivers must be in writing and signed by the waiving patty. Landlord’sfailure to enforce any provision of this Lease or its acceptance of rent shallnot be a waiver and shall not prevent Landlord front enforcing that provisionor any other provision of this Lease in the future. No statement on a paymentcheck from Tenant or in a letter accompanying a payment check shall be bindingoil Landlord. Landlord may, with or without notice to Tenant, negotiate suchcheck without being bound to the conditions of such statement .

 

Section 19.9     NoRecordation. Tenant shall not record this Lease without prior writtenconsent from Landlord. However, Landlord may require that a “Short Form”memorandum of this Lease be executed by both parties and recorded.

 

Section 19.10   BindingEffect; Choice of Law. This Lease binds any party who legally acquires anyrights or interest in this Lease 1rorn Landlord or Tenant. However, Landlordshall have no obligation to Tenant’s successor unless the rights or interestsof Tenant’s successor are acquired in accordance with the terms of this Lease.The laws of the state ill which the Premises is located shall govern thisLease. Should either party institute legal action to enforce any obligationcontained herein, it is agreed that the proper venue of such suit or actionshall be the county and judicial district in which the Shopping Center islocated.

 

Section 19.11   CorporateAuthority: Partnership Authority. If Tenant is a corporation or limitedliability company, each person signing this Lease on behalf of tenantrepresents and warrants that lie has full authority to do so and that thisLease bind the corporation or limited liability company. Within five (5) daysafter this Lease is signed, Tenant shall deliver to Landlord a certified copyof a resolution of Tenant’s Board of Directors or Members, as applicable,authorizing the execution of this Lease or other evidence of such authorityreasonably acceptable to Landlord. if Tenant is a partnership, each personsigning this ].ease for Tenant represents and warrants that lie is a generalpartner of the partnership, that lie has full authority to sign for thepartnership and that this Lease binds the partnership and all general partnersof the partnership. Tenant shall give written notice to Landlord of any generalpartner’s withdrawal or addition. Within five (5) clays after this Lease issigned, Tenant shall deliver to Landlord a copy of Tenant’s recorded statementof partnership or certificate of limited partnership.

 

Section 19.12   NoPartnership. Landlord shall not by virtue of this Lease, in any wayor for any purpose, be deemed to have become a partner of Tenant in the conductof its business, or otherwise, or joint venturer or a merger of a jointenterprise with Tenant, nor is Tenant ail agent of Landlord for any reasonwhatsoever.

 

Section 19.13   Jointand Several Liability. All parties signing this Lease as Tenant shall bejointly and severally liable for all obligations of Tenant.

 

Section 19.14Force Majeure. If Landlord cannotperform any of its obligations due to events beyond Landlord’s control, thetime provided for performing such obligations shall be extended by a period oftime equal to the duration of such events. Events beyond Landlord’s controlinclude, but are not limited to, acts of God, war, civil commotion,bioterrorism, terrorism, labor disputes, strikes, fire, flood or othercasualty, shortages of labor or material, government regulation or restrictionand weather conditions.

 

Section 19.15   Constructionof Lease and Terms. The terms and provisions of this Lease represent theresults of negotiations between Landlord and Tenant, each of which aresophisticated parties and each of which has been represented or been given theopportunity to be represented by counsel of its Own choosing, and neither ofwhich has acted under any duress or compulsion, whether legal, economic orotherwise. Consequently, the terms and provisions of this Lease must beinterpreted and construed in accordance with their usual and customarymeanings, and Landlord and Tenant each waive the application of any rule of lawthat ambiguous or conflicting terms or provisions contained in this Lease areto be interpreted or construed against the party who prepared the executedLease or any earlier draft of tile same. Landlord’s submission of thisinstrument to Tenant for examination or signature by Tenant does not constitutea reservation****of or all option tolease and is not effective as a lease or otherwise until Landlord and Tenantboth execute and deliver this Lease. The parties agree that regardless or whichparty provided the initial form of this Lease, drafted or modified one or moreprovisions of this Lease, or compiled, printed or copied this Lease, this Leaseis to be construed solely as all offer from Tenant to (case the Premises,executed by Tenant and provided to Landlord for acceptance on the terms setforth in this Lease, which acceptance and the existence of a binding agreementbetween Tenant anti Landlord may then be evidenced only by Landlord’s executionof this Lease.

 

Section 19.16   Accordand Satisfaction. No payment by Tenant or receipt by Landlord of a lesseramount than the monthly rent herein stipulated shall be deemed to be other thanoil account of the earliest stipulated rent, or shall any endorsement orstatement on any check or any letter accompanying any check or payment as rentbe deemed an accord

 

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and satisfaction, and Landlord may accept suchcheck or payment without prejudice to Landlord’s right to recover the balanceof such rent or pursue any other remedy provided in (his Lease.

 

Section 19.17   Provisionsare Covenants and Conditions. All provisions, whether covenants orconditions, on the part of the Landlord, or oil the part of Tenant, shall bedeemed to be both covenants and conditions.

 

Section 19.18   IntentionallyOrnitted.

 

Section 19.19Remodel. Landlord may in the futureremodel or refurbish portions of the Shopping Center. Such remodeling and/orrefurbishing may include Tenant’s Premises subject to Tenant’s reasonableconsent which shall not be unreasonably conditioned, delayed, or withheld. Theremodeling and/or refurbishing will be done in accordance with the properarchitect’s design specifications which will be reviewed anti approved byLandlord and copies of such drawings will be matte available to Tenant. Tenantagrees to reasonably accept such reasonable specifications. Tenant furtheragrees that Tenant will not, through any act or omission on the part of Tenant,in any way unreasonably hinder, impede, or frustrate the efforts of theLandlord in completing such remodeling or refurbishing in a timely fashion. Aspart of architect’s design specifications, a new exterior Tenant sign criteria(nay be developed. Upon development of said new sign criteria Tenant, atTenant’s expense, upon written notice from Landlord, shall remove all existingsigns and replace such exterior signs with a new sign in accordance with thenew sign criteria. Such resigning by Tenant shall be completed within sixty(60) days after receipt of new sign criteria from Landlord.

 

Section 19.20   Waiverof Right to Jury Trial. Landlord and Tenant hereby waive their respectiveright to trial by jury of any cause of action, claim, counterclaim or cross-complaintin any action, proceeding and/or hearing brought by either Landlord againstTenant or Tenant against Landlord oil any matter whatsoever arising out of, orin any way connected with, this Lease, the relationship of Landlord and Tenant,Tenant’s use or occupancy of tile Premises, or any claim of injury or damage,or the enforcement of any remedy under any law, statute, or regulation,emergency or otherwise, now or hereafter in effect.

 

Section 19.21   Limitationof Actions. Any claim, demand, right or defense of any kind by Tenant whichis based upon or arises in connection with this Lease or the negotiations priorto its execution, shall be barred unless Tenant commences oil action thereon,or interposes in a legal proceedings a defense by reason thereof, within one(1) year after the date of discovery of the inaction or omission or the (lateof the occurrence of the event or of the action to which the claim, demand,right or defense relates, whichever applies.

 

Section 19.22   RealEstate Brokers. Except as herein specifically set forth, Landlord andTenant represent and warrant that there are no claims for brokerage commissionsor finder’s fees in connection with the execution of this Lease, and agree toindemnify the other against and hold it harmless from all liability arisingfrom any such claim including, without limitation, the cost of attorneys’ feesin connection therewith. Landlord is represented by Kelly Bland of ColliersInternational and Landlord shall pay leasing commissions to such broker pursuantto a mutually agreeable written agreement between the respective parties.

 

Section 19.23   Exculpation.‘file obligations of Landlord under this Lease do not constitute personalobligations of Landlord, or its partners, members, managers, directors, officersor shareholders and Tenant shall look solely to *the*Shopping Center (as defined in Section 1.4)and to no other assets of Landlord for satisfaction of any liability withrespect to this Lease and will not seek recourse against the partners, members,managers, directors, officers or shareholders of Landlord herein, nor againstany of their personal assets for such satisfaction. In addition (i) no partnerof Landlord shall be sued or named as a party in any suit or action (except asmay be necessary to secure jurisdiction of the partnership), (ii) no service ofprocess shall be made against any partner of Landlord (except as may benecessary to secure jurisdiction of the partnership), (iii) no partner ofLandlord shall be required to answer or otherwise plead to any service ofprocess and no judgment will be taken against any partner of Landlord, (iv) nowrit of execution will ever be levied against the assets of any partner ofLandlord and (v) these covenants and agreements are enforceable both by Landlordanti also by any partner of Landlord.

 

INWITNESS WHEREOF, Landlord and Tenant have signed this Lease at the place andoil the dates specified adjacent to their signatures below and have initiatedall Riders which are attached to or incorporated by reference in this Lease.

 

 
| Dated: | 10/9/03                                                       |                          |   | LANDLORD: |
|--------|---------------------------------------------------------------|-------------------------------|--------|-----------|
|   |                                                          |
|   | MCQUEEN CROSSINGS, LLC,                                       |
|   | a Nevada Limited Liability  Company                           |
|   |                                                          |
|   | By: PERRY FAMILY VENTURES, L.P., a California                 |
|   | limited partnership, Managing Member                          |
|   |                                                          |
|   | By: Perry Family Trust, dated March 24, 2000, General Partner |
|   |                                                          |
|   | By:                                                           | Michael R.  Perry, Co-Trustee |   |

 

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|   |                  |                    | By:     | ROBERT W. CARSON, Member |   |   |
|--------|-----------------------|-------------------------|---------|--------------------------|--------|--------|
|   |                  |                    |
| Dated: | 8 Oct, 2003           |                    | TENANT: |                     |
|   |                  |                    |
|   | NEVADA SECURITY BANK, |                    |
|   | A Nevada Corporation  |                    |
|   |                  |                    |
|   | By:                   | *David A.  Funk, Pres.* |    |                     |
|        |                       |                         |         |                          |        |        |  |  |  |  |  |  |

 

25

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RIDERS

 

Riders One, Two, Three, Four, and Five to thatcertain Lease, dated October 7. 2003 by and between McQueen Crossings,LLC, a Nevada limited liability company (“Landlord”) and Nevada SecurityBank, a Nevada corporation (“Tenant”).

 

The following Riders are *hereby incorporated*into the LeaseAgreement:

 

RIDER ONE - FEES AND PERMITS

 

Allbuilding and utility fees including but not limited to building permitexpenses, sewer connection fees, water fees, water rights, traffic impact fees,and any other fees and assessments charged by Washoe County, the City of Reno,Truckee Meadows Water Authority (TMWA), or any other governmental orquasi-governmental authority, associated or related to Tenant’s business or theconstruction of the Building and site improvements constructed by ‘reliant orby Landlord for the benefit of Tenant shall be paid for by Tenant at Tenant’ssole expense.

 

At Landlord’s sole election, Tenant shall payLandlord or Landlord shall deduct the proportionate cost thereof from theImprovement Allowance set forth in Rider Four below for the cost of water fees,water rights, or traffic impact fees, and the proportionate cost thereof shallbe equal to the proportionate rate Landlord paid (without any mark-up or profitto Landlord) for such water fees, water rights, or traffic impact fees.

 

RIDER TWO - MINIMUM MONTHLYRENT SCHEDULE

 
| **Minimum  Annual Rent** |           | **Minimum  Monthl Rent** |   | **Lease Years** |   |
|--------------------------|----------------|--------------------------|--------|-----------------|--------|
| **$**                    | **135,000.00** |                     | $      | 11,250.00       |   | 1-5 |   |
| $                        | 147,000.00     |                     | $      | 12,250.00       |   | 6-10 |   |
| $                        | 169,050.00     |                     | $      | 14,087.50       |   | 11-15 |   |
| $                        | 184,920.00     |                     | $      | 15,410.00       |   | 16-20 |   |

 

RIDER THREE - OPTION TOEXTEND TERM

 

Tenantis given the option to extend the Term of this Lease for two (2) ten (10) yearperiods (individually an “extended tern”) following expiration of the initialTerm, by giving written Notice of exercise of the option (“option notice”) tothe Landlord at least six (6) months but not more than one (1) year before theexpiration of the then current Term. The same terms and conditions as appliedduring the initial Term of this Lease shall apply to the extended terms exceptthat (i) the Minimum Monthly Rent shall be adjusted as specified below at thecommencement of each extended term and (ii) there shall be no further right oroption to extend. Provided, however, that if Tenant is in default out the dateof giving the option notice, the option notice shall be totally ineffective, orif Tenant is in default on the date tile extended term is to commence, theextended term shall not commence and [his Lease shall expire at the end of thethen current term. Tenant’s Lease Options are personal to Tenant and shallautomatically terminate upon ally “Transfer” of this Lease requiring Landlord’sConsent, as defined in Section 15.1, or if the rise of the Premises is changedfrom that set forth in Section I.B.

 

(a) Rent to he Determined.

 

Provided Tenant has exercised the subjectoption to extend term in the manner set forth above, Landlord shall determinethe Fair Market Minimum Monthly Rent for the first year of such extended termas set forth below. If Tenant accepts Landlord’s offer in writing within thetime frame set forth below, the parties shall immediately execute an amendmentto the Lease or enter into a new lease stating the Minimum Monthly Rent for thefirst year of tile *subject extended*terns,and shall specify annual increases at the commencement of the second year ofthe subject extended term and annually thereafter through the expiration of thesubject option Term which shall in no event be less than three percent (3°/,)above the Minimum Monthly Rent then in effect (as increased pursuant to thelast adjustment).

 

Landlord shall determine the Fair MarketMinimum Monthly Rent for the highest and best use of the Premises by using itsgood faith judgment. Landlord shall provide written notice of such amountwithin *fifteen (15*) days (but inno event later than twenty (20) clays) after Tenant provides the notice toLandlord exercising Tenant’s option rights which require a calculation of theFair Market Minimuim Monthly Rent. Tenant shall have thirty (30) days(“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rentalwithin which to accept such rental or to reasonably object thereto in writing.In the event Tenant objects, Landlord and Tenant shall attempt to agree uponsuch Fair Market Minimum Monthly Rent. If Landlord and Tenant fail to reachagreement within fifteen (15) days following Tenant’s Review Period (“OutsideAgreement Date”), then each party shall place in a separate sealed envelopetheir final proposal as to Fair Market Minimum Monthly Rent and suchdetermination shall be submitted to arbitration as provided below. Failure ofTenant to so elect in writing within Tenant’s Review Period shall conclusivelybe deemed its disapproval of the Fair Market Minimum Monthly Rent determined byLandlord.

 

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In the event that Landlord fails to timelygenerate (lie initial written notice of Landlord’s opinion of the Fair MarketMinimum Monthly Rent which triggers the negotiation period of this provision,then Tenant may commence such negotiations by providing the initial notice, inwhich event Landlord shall have thirty (30) clays (“Landlord’s Review Period”)after receipt of Tenant’s notice of the new rental within which to accept suchrental. In the event Landlord fails to accept in writing such rental proposedby Tenant, then such proposal shall be deemed rejected, and Landlord and Tenantshall attempt in good faith to agree upon such Fair Market Minimum MonthlyRent. If Landlord and Tenant fail to reach agreement within fifteen (15) daysfollowing Landlord’s Review Period (which shall be, in such event, the “OutsideAgreement Date” in lieu of the above definition of such date), then each partyshall place in a separate sealed envelope their final proposal as to the FairMarket Minimum Monthly Rent and such determination shall be submitted toarbitration as provided below.

 

Landlord and Tenant shall meet with each otherwithin five (5) business days of the Outside Agreement Date and exchange thesealed envelopes and then open such envelopes in each other’s presence. IfLandlord anti Tenant do not mutually agree upon the Fair Market Minimum MonthlyRent for the highest and best use of the Premises within five (5) business daysof the exchange and opening of envelopes, then, within ten (l0) business daysof the exchange and opening of envelopes, Landlord and Tenant shall agree uponand jointly appoint a single arbitrator who shall by profession be a realestate appraiser or broker who shall have been active over the five (5) yearperiod ending on the date of such appointment in the appraising or leasing ofcommercial retail properties in the vicinity of the Shopping Center. NeitherLandlord nor Tenant shall consult with such broker or real estate appraiser asto his or her opinion as to Fair Market Minimum Monthly Rent prior to theappointment. The determination of the arbitrator shall be limited solely to theissue of whether Landlord’s or Tenant’s submitted Fair Market Minimum MonthlyRent for the Premises is the closest to the actual Fair Market Minimum MonthlyRent for the Premises as determined by the arbitrator, taking into account thehighest and best use of the Premises and the requirements of this provision. Sucharbitrator may hold such hearings and require such briefs as the arbitrator, inhis or her sole discretion, determines is necessary. In addition, Landlord orTenant may submit to the arbitrator, with a copy to the other party within five(5) business days after the appointment of the arbitrator any market data andadditional information that such patty deems relevant to the determination ofthe Fair Market Minimum Monthly Rent (“FMRR Data”) and the other party maysubmit a reply in writing within five (5) business days after receipt of suchFMRR Data.

 

The arbitrator shall, within thirty (30) daysof his or her appointment, reach a decision as to whether the parties shall useLandlord’s or Tenant’s submitted Fair Market Minimum Monthly Rent, without any modificationthereto by the arbitrator, anti shall notify Landlord and ‘tenant of suchdetermination. ‘File decision of the arbitrator shall be binding upon Landlordand Tenant except as provided below. If Landlord and Tenant fail to agree uponanti appoint an arbitrator, then the appointment of the arbitrator shall bemade by the Presiding Judge of the Superior Court of the county in which theproperty is located, or, if he or she refuses to act, by any judge havingjurisdiction over the parties. The cost of arbitration shall be paid byLandlord and Tenant equally.

 

In the event that Tenant objects to the FairMarket Minimum Monthly Rent as determined by the arbitration provisionspecified above, Tenant may elect to rescind its exercise of its Option by writtennotice sent to Landlord within five (5) days following the establishment of theFair Market Minimum Monthly Rent as determined by such arbitration. In theevent Tenant elects to rescind its exercise of its Option, Tenant shallreimburse Landlord for its actual attorneys’ fees and costs associated withsuch arbitration.

 

Notwithstanding anything to the contraryabove, in no event shall the Fair Market Minimum Monthly Rent for arty extendedterm be less than the Minimum Monthly Rent payable by Tenant for the monthimmediately preceding any such extended term. Tenant shall have no option orother right to extend the Term beyond the two (2) extended terms describedabove.

 

RIDER FOUR - IMPROVEMENT ALLOWANCE

 

Landlord shall provide Tenant with anImprovement Allowance in the amount of five hundred fifty thousand and00/100 Dollars ($550.000.00) toward the cost of constructingTenant’s Work. Such allowance shall be paid by Landlord in not more than four(4) installments including ten percent (10%) retainage directly to Tenant’sgeneral contractor. Such payments are subject to the following terms anticonditions:

 

a)               Submittal of Application and Certification forPayment (AIA Document 6702) and Schedule of Values with Percentage ofCompletion (AIA Document 6703) to Landlord;

b)              Submittal of conditional lien releases forsubject payment request and unconditional lien releases for amounts funded forprior payment requests to Landlord;

c)              Approval of completed work by Landlord’sLender and funding of draw request by Landlord’s Lender;

d)             Approval of completed work by Landlords’Construction Manager or Architect; and

e)                Approval of completed work by Tenant.

 

RIDER FIVE-TENANT’SCOMMUNICATION EQUIPMENT

 

Tenant may install, operate, and maintain notmore than one (1) “satellite dish,” hereinafter (“Communication Equipment”),for the purpose of receiving and sending radio, television, computer,telephone, or other communication signals, at a location on the roof of theBuilding, after first obtaining the written approval of Landlord for the typeof equipment, location, and methods of attachment, if space on the roof of theBuilding is available.

 

2

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**SUCHCOMMUNICATION EQUIPMENT SHALL AT ALL TAMES BE PLACED BEHIND A PARPET WALL. ORSHALL BE OTHERWISE SCREENED IN A MANNER ACCEPTABLE TO LANDLORD, AND SHALL IN NOEVENT BE VISIBLE FROM THE GROUND.**

 

Tenant’s right to install, operate, andmaintain the Communication Equipment is subject to all recorded matters on theShopping Center, governmental laws, rules and regulations, about which Landlordmakes no representations. All costs of installation, operation, antimaintenance (including, without limitation, cost of any satellite alignmentwork necessary as a result of Landlord or Landlord’s contractor’s movement ofthe Communication Equipment to facilitate repair of replacement of the roof orany other building component or system) of the Communication Equipment and anynecessary related equipment (including, without limitation, costs of obtainingany necessary permits) will be borne by Tenant. Landlord retains the right toinstall all Communication Equipment and to use tile roof of tile Building forany purpose, provided that Landlord does not unduly interfere with Tenant’s useof the Communication Equipment. Tenant will use the Communication Equipment soas not to cause any interference to other tenants ht the Building or ShoppingCenter or with any communication equipment owned by Landlord or a third party,and not to damage or interfere with the normal operation of the Building orShopping Center or occupants thereof. Landlord will not have any obligationswith respect to the Communication Equipment. Landlord makes no representationthat the Communication Equipment will be able to receive or transmitcommunication signals without interference or disturbance (whether or not byreason of the installation or use by others of similar equipment on the roof ofthe Building), ant] Tenant agrees that Landlord will not be liable to Tenant forany such interference or disturbance. If Landlord or any third party installsany similar communication equipment on the roof of the building, Landlord orsuch third party will use reasonable efforts to use its equipment so as not tocause any material interference with Tenant’s Communication Equipment.

 

Tenant will (1) be solely responsible for anydamage caused as a result of the Communication Equipment; (2) promptly pay anytax, license, or permit fees charged pursuant to any laws or regulations in connectionwith the installation, maintenance, or use *of*the Communication Equipment, and comply with all precautions antisafeguards recommended by all governmental authorities, or Landlord; (3) payfor all necessary repairs to, replacements to, or maintenance of theCommunication Equipment; (4) reimburse Landlord for the cost *of*construction of any curbs or platformsfor Communication Equipment required for compliance with Landlord’s roofwarranty or installed at the recommendation *of*Landlord’s architect; and (4) reimburse Landlord for the cost *of*any repairs or replacements to theBuilding (including, without limitation, the roof membrane) necessary due tothe installation methods, existence, or maintenance of the CommunicationsEquipment.

 

At Tenant’s sole expense, Landlord will removethe Communication Equipment and related equipment upon the expiration or soonertermination of this Lease or upon the imposition of any governmental law orregulation which may require removal, and will repair the building upon removalto the extent required by the removal or existence of the CommunicationEquipment within thirty (30) days after the expiration or earlier terminationof this Lease. The provisions of this section will survive the expiration orearlier termination of this Lease.

 

3

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**[EXHIBIT A –MAP]**

 

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**[EXHIBIT A–1 MAP]**

 

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EXHIBITB

 

CONSTRUCTIONOF THE PREMISES

McQueenCrossings

Reno,Nevada

 

NEVADASECURITY BANK

PADF

 

I.                              Plans.

 

As soon as plans are available to Landlord,Landlord shall deliver a site plan of Pad F to Tenant or Tenant’s Architect DonMackey. Within forty-rive (45) days from delivery of such site plan, Tenant, alits expense, shall submit to Landlord for its approval two (2) sets of fully dimensionedscale drawings, plans and specifications prepared by a licensed architect andapplicable engineers. The drawings shall indicate the specific requirements ofTenant’s Work, clearly outlining the building and other portions of thePremises in such detail as Landlord may require, including types of materialsand colors, interior partitions, reflected ceiling plans, roof plan showinglocations of proposed equipment and penetrations, if applicable, and plumbing,fire sprinkler, mechanical and electrical plans prepared by a licensedelectrical engineer setting forth all electric requirements of Tenant, all inconformity with the description of Landlord’s Work and of Tenant’s Work hereinand in strict compliance with applicable codes. Landlord shall have thirty (30)days from receipt of these drawings to approve or disapprove them. If Landlorddisapproves such plans, Tenant shall, within ten (10) days of receipt ofLandlord’s notice of disapproval, revise and resubmit such plants to Landlord,correcting or altering such disapproved items.

 

II.                            Landlord’s Work.

 

•                  Landlord agrees to deliver possession of thePremises as designed by Landlord’s architect in the configuration shown on theExhibit A-1 with the following work completed:

 

•     Gradeddirt.

 

•                  Gas, Electric, Telephone, Water, Fire Service(if required), and Sewer service stubbed not less than five feet inside thearea of Tenant’s Work

 

Ill.                            Tenant’s Shell Building and Site Work.

 

•                   Tenant shall complete all buildingconstruction and site work, including the curb and gutter inside the areadesignated as Tenants Work on Exhibit A-1 hereof.

•                  Such work shall be designed by Tenant’sarchitect Don MacKay and shall be engineered by firms reasonably approved byLandlord.

•                    All Tenant plans are subject to the approvalof Landlord and Landlord’s architect and shall incorporate architectural designand details to the sole satisfaction of Landlord.

 

A.                           GENERAL REQUIREMENTS.

 

1.                                       Tenant shall submit to Landlord, by certifiedor registered mail, at least five (5) days prior to commencement ofconstruction, the following information:

 

a.                                       The names, addresses and license class andnumber of all subcontractors Tenant intends to engage in the construction ofthe Premises.

 

b.                                      The date on which Tenant’s construction work willcommence together with the estimated date of completion of Tenant’sconstruction work and fixturization, and the date on which

theTenant expects to be ready to open for business in the Premises.

 

c.                                       Evidence of builder’s all risk, generalliability and worker’s compensation Insurance for Tenant’s contractor wherein aCertificate of Insurance shall be provided to Landlord naming McQueen CrossingsLLC as additional insured, or as Landlord may reasonably require.

 

d.                                      An itemized statement of estimated constructioncosts, including architectural, engineering and contractor’s fees.

 

e.                                       Tenant’s contractors’ performance and/or laborand material bonds, if so required by Landlord’s Lender, or any other bond tobe furnished by Tenant as may be required by Landlord to insure the faithfulperformance of the work in accordance with the approved plans.

 

2.                                       All contractors engaged by Tenant shall bebondable, licensed contractors, possessing good labor relations, capable ofperforming quality workmanship and working in harmony with Landlord’scontractors and/or other contractors working on the job. All work shall becoordinated with the general project work of the Shopping Center.

 

3.                                       Construction shall comply in all respects withapplicable Federal, State, County and City statutes, ordinances, regulations,laws and codes. All required building and other permits in connection with theconstruction and completion of the Premises shall be obtained and paid for byTenant.

 

4.                                       Tenant shall apply and pay for all utility meters,hook-up fees and services, and the costs described in Rider One hereof.

 

5.                                       Tenant shall cause its contractor to providewarranties for not less than one (1) year against defects in workmanship,materials and equipment.

 

6.                                       Tenant’s Work shall be subject to theinspection of Landlord and its supervisory personnel.

 

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7.                                       Tenant’s Work shall include, but shall not belimited to, the cost of architectural and engineering fees, permits and specialassessment, taxes, or other fees relating to Tenant’s Work.

 

8.                                       Tenant to make applications for all utilityservices and pay for water, gas and/or electrical meter including anyinstallation of hook up fees, permit costs, water rights, or costs related tothe foregoing.

 

9.                                       All other items and requirements not specificallyincluded under Landlord’s Work and any work directly or indirectly referred toas Tenant’s Work herein.

 

B.**                            LANDLORD’SRIGHT**TO PERFORM WORK.

 

Landlordshall have the right but not the obligation to perform, on behalf of and forthe account of Tenant, subject to reimbursement of the cost thereof by Tenant,any and all of the Tenant’s Work which Landlord determines, in its solediscretion, should be performed immediately and on an emergency basis for thebest interest of the Shopping Center, including without limitation, removal ofunduly accumulated construction material and debris.

 

C.                            TEMPORARY FACILITIES DURING CONSTRUCTION.

 

1.                                       Tenant shall provide and pay for all temporaryfacilities, and the removal to debris, as necessary and required in connectionwith the construction of the Premises. Storage of Tenant’s contractor’sconstruction material, tools, equipment and debris shall be confined to thePremises and in areas which may be designated for such purposes by Landlord. Inno event shall any material or debris be stored on the sidewalk or service andexit corridors or in the parking lot.

 

2.                                       During construction, Tenant shall maintainsuch barricades, fences or other measures as may be necessary to insure thesecurity of the Premises and to prevent unauthorized persons from entering thePremises or any persons suffering any injury.

 

D.                            AS-BUILT DRAWINGS.

 

Tenantshall cause reproducible “As-Built Drawings” to be delivered to Landlord and/orLandlord’s representative no later than thirty (3g) days after completion ofthe Tenant’s Work or any alterations, additions or improvements permitted byLandlord in accordance with the terms of this Lease. In the event thesedrawings are not received by such date, Landlord may al it election, cause saiddrawings to be obtained and Tenant shall pay to Landlord, as additional rent,the cost of producing these drawings.

 

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**EXHIBIT****“****C”**

**CONFIRMATION OF TERM OF**LEASE

 

ThisConfirmation of Term of Lease ismade                      ,                  between McQueen Crossings, LLC, a Nevada limited liability company (“Landlord”)and Nevada Security, a Nevada con)oration (“Tenant”), who agreeas follows:

 

1.Landlord and Tenant entered into a Lease dated                  ,                      inwhich Landlord leased to Tenant and Tenant leased from Landlord the premisesdescribed in Paragraph 1.4 of the Lease (the “Premises”).

 

2.              Pursuant to Paragraph 1.6 of theLease, Landlord and Tenant agree to confirm the commencement and expirationslates of the Term, and the commencement date of rent, as follows:

 

a.                  ,                      is the Commencement Date of the Term of the Lease;

 

b.                  ,                      is the Expiration Date of the Term of Lease;

 

c.                  ,                      is the Commencement Date of Rent under the Lease;

 

d.                  ,                      ,is the Commencement Date of Other Periodic Payments under the Lease.

 

3.             Tenant confirms that:

a.        It has accepted possession of the Premisesas provided in the Lease;

b.        The improvements and space required tobe furnished by Landlord under the Lease have been furnished;

c.        Landlord has fulfilled all its duties ofan inducement nature;

d.        The Lease has not been modified,altered, or amended, except as follows: None;

e.                        There are no setoffs or credits against rent,and no security deposit has been paid except as provided by the Lease;

f.                          Tenant has no notice of a prior assignment,hypothecation, or pledge of rent, or of the Lease; and

g.                       The Lease is in full force and effect.

 

4.              The provisions of thisConfirmation of Term of Lease shall inure to the benefit, or bind, is the casemay require, the parties and their respective successors subject to therestrictions on assignment and subleasing contained in the Lease.

 

Landlord:

 

MCQUEEN CROSSINGS, LLC,

A Nevada limited liability company

 

By: PERRY FAMILY VENTURES, L.P., a Californialimited partnership, Managing Member

 
| By: |   |
|-----|--------|

MichaelR. Perry, Trustee of the Perry Family Trust dated March 24, 2000, GeneralPartner

 

By: ROBERT W. CARSON, Member

 
| By:    |                     |
|--------|--------------------------|
|   | Robert W. Carson, Member |

 

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TENANT:

 

NEVADA SECURITY BANK a Nevada Corporation

 
| By:  | David A. Funk |   |   |
|------|---------------|--------|--------|
| Its: | President     |   |   |
|      |               |        |        |  |

 

By: Its:

 

2

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**McQueen Crossings**

**Robb Drive & Mae Anne Ave.**

**Reno, Nevada**

 

**SIGN CRITERIA**

 

**June 20, 2003**

 

The goal of this sign program is to insurethe uniformity and consistency of the signage for the entire center. A copy ofthe sign construction drawings for each individual Tenant will be submitted tothe City Planning staff for review and approval prior to issuance of signpermit.

 

The following criteria willpreserve and enhance the appearance of the shopping center development,safeguard and enhance property values, and will encourage the use of qualitysignage which is integrated with and is harmonious to the buildings and sitethat it occupies.

 

A.          GENERAL REQUIREMENTS

 

1.                                       Tenant shall submit, before fabrication, four(4) copies of the proposed signs, including one (1) copy which is to becolored, to the Landlord for approval. These drawings must include totalnumber, location, size and style of lettering, material, type of illumination,installation details (including a scaled elevation drawing, if required byLandlord), color selection, logo design, and wall graphics, and must beapproved by the City of Reno.

 

2.                                       All permits for signs shall be obtained andpaid for by Tenant. Tenant shall pay for all signs and their installation andmaintenance.

 

3.                                       Tenant shall be responsible for thefulfillment of all requirements and specifications, and all actions ornegligence of tenant’s sign contractor. 

 

4.                                       The size, location, design, color, texture,lighting and materials of these signs shall in no way detract from the designof the Shopping Center and the surrounding properties.

 

5.             Allsigns, permits, drawings and related expenses to be at tenant’s sole cost andexpense.

 

6.                                       TENANT’S SIGNS) MUST FIT WITHIN BUILDINGAREAS) DETERMINED AND APPROVED BY LANDLORD AND SHALL BE COMPATIBLE WITH THEBUILDING ARCHITECTURE, WHICH MAY RESULT IN TENANT SIGNAGE THAT IS LESS ORDIFFERENT THAN OTHERWISE ALLOWED UNDER THIS SIGN CRITERIA. LANDLORD S14ALL HAVETHE RIGHT TO DETERMINE SUCH FIT AND ARCHITECTURAL COMPATIBILITY IN LANDLORD’SSOLE AND ABSOLUTE DISCRETION.

 

B.            RETAILIN-LINE SHOP TENANTS (See attached “Sign A”‘)

 

1.                                       Each in-line shop tenant shall be permittedone (1) wall sign. A corner tenant may at Landlord’s discretion be permitted two (2) wall signs (one (1) primaryand one (1) secondary) providedsuch signs are located on different sides of the building. Notwithstanding the foregoing or anything tothe contrary in this Lease, approval of secondary signs shall be granted or denied by Landlord in Landlord’ssole and absolute discretion.

 

2.             Wallsigns shall be made up of -

 

•                  individual exposed neon channel letters withinternally illuminated colored neon tubes;

•                  PK housings;

•                  30 ma transformer(s);

•                  clear plex faces that are 3/16” thick;

•                  returns that are:

 

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5.                                       Logo shall be defined as any tenant emblemand/or graphics and shall be included in tenant’s overall sign length. Such logo shall have plex faces withvinyl overlay. Logo area shallin no event exceed twenty percent (20%) of tenant’s overall signage.

 

F.             MAJORTENANTS

 

Theprovisions of this Exhibit, except as otherwise expressly provided in thisExhibit, shall not be applicable to the identification signs of markets, drugstores or other occupancy designated by the Landlord as a “Major Tenant” thatmay be located in the Shopping Center, it being understood and agreed thatthese occupants may have their usual identification signs on their buildings,as the same exist from time to time of similar buildings operated by them inNevada or California; provided however, there shall be no roof-top signs whichare flashing, moving or audible and provided said sign is architecturallycompatible and has been approved by the Landlord.

 

G.            FREESTANDINGSIGNS (see attached “Sign D”)

 

One(1) freestanding double faced sign is permitted on each street frontage (i.e.one (1) sign on Robb Drive and one (1) sign on Mae Anne Avenue). The maximumsign area reserved for the name of the shopping center and/or tenant’s copy oneach sign shall be sixty (60) square feet per side. Landlord may allocate thesign area dedicated to tenant copy and the name of shopping center atLandlord’s discretion. Maximum height for freestanding signs shall be twelvefeet (12’).

 

H.            MONUMENTSIGN (see attached “Sign E”)

 

One(1) freestanding double faced monument sign is permitted for the fuel center.Such tenant monument sign shall be two (2) faced, internally illuminated, plexiglass with and aluminum frame mounted on a standard base as shown on thedrawings. The maximum sign area reserved for tenant’s copy for such monumentsign is limited to sixteen (16) square feet, the maximum overall sign heightshall not exceed seven (7) feet, and the maximum overall sign width shall notexceed five (5) feet.

 

1.                                       RESTRICTIONS (The provisions of this sectionshall apply to Major Tenants unless otherwise approved byLandlord in writing.)

 

I.                                           Vertical copy or signs projectingperpendicular to the building are not permitted.

II.

2.                                       Logos or manufacturer’s decals, hours ofbusiness, telephone numbers, etc., are limited to a total of 144 square inches per single doorentrance. All “sale” signs, special announcements, etc. are not permitted on exterior of glass. Suchadvertising materials must beset back 24 inches from glass surface, and all window signs are not to exceed amaximum of 25 percent total windowarea, unless otherwise approved in writing by Landlord at Landlord’s sole discretion.

 

3.                                       Advertising devises such as attractionboards, posters, banners and flags will not be permitted in, upon, or about the Premises or elsewhere in the Shopping Centeror sidewalks adjacent thereto.Any such items installed by Tenant or Tenant’s agents, without Landlord’s express written consentmay be removed by Landlord, or Landlord’s agent without prior notice to Tenant, and any cost incurred for suchremoval shall be paid by Tenantto Landlord as additional rent.

 

4.             Painted,flashing, animated, audible, revolving or other signs that create the illusionof animation are not permitted.

 

5.                                       Exposed bulb signs are not permitted on ornear storefront glass, however, Landlord may at Landlord’s sole discretionapprove a limited amount of exposed neon signage installed on interior ofstorefront.

 

6.                                       No exposed junction boxes, lamps, tubing,conduits, raceways or neon crossovers of any type are permitted, unless approvedin writing by the Landlord.

 

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7.             There shall not be roof top signs, or signs **which extend above the parapet wall of the**roof-lineof the building to which they are attached.

 

J.             CONSTRUCTIONREQUIREMENTS

 

1.                                       Tenant is required to obtain from the City ofReno Building Department, any and all building and electrical permits.

 

2.                                       Location of all openings for conduit in signpanels of building walls shall be indicated by the sign contractor on drawingssubmitted to the Landlord.

 

3.                                       Each sign contractor must seal off and touchup all mounting holes and leave Premises free of debris after installation.

 

4.                                       All signs must meet “U.L.” specifications,and the installation must comply with requirements of the City of Reno BuildingDepartment.

 

K.            MISCELLANEOUSREQUIREMENTS

 

1.                                       Each tenant who has a non-customer door forreceiving merchandise may have uniformly applied on said door in location, asdirected by the Landlord, in three (3) inch high block letters, the tenant’sname and address. Where more than one tenant uses the same door, each name andaddress shall be applied. Colors of letters shall match Ameritone #189A DarkBrown.

 

2.                                       Contractors installing or repairing signs areto be state registered contractors and are to have a current city businesslicense, if required.

 

3.                                       Tenant shall have all exterior signageinstalled on the last to occur of: (a) thirty (30) days from the date Landlorddelivers possession of the Premises to Tenant, or (b) thirty (30) days fromcompletion of the applicable building areas upon which Tenant’s sign(s) is/areto be installed.

 

4.                                       Landlord shall cause Tenant’s signage to beremoved and any damage repaired upon the expiration or earlier termination ofthe Lease by a contractor of Landlord’s choice. Such work shall be done at Tenant’s sole expenseand Tenant shall reimburse Landlord for same upon demand. In no event shall Tenant remove or cause any undercanopy sign(s) or bracket(s) tobe removed at any time and same shall become the property of Landlord upon the expiration or earlier termination ofthe Lease.

 

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[**sign type A]**

 

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[**sign type B]**

** **

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[**sign type C]**

 

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[**sign type D]**

** **

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[**sign type E]**

 

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**[MAJOR TENANT SIGN CRITERIA EXAMPLE]**

 

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