Document:

Exhibit 10.2

 

RBC 2017 LONG-TERM EQUITY INCENTIVE PLAN

 

As of September 13, 2017 (“Effective
Date”)

 

1    Purpose.

 

This plan shall be
known as the RBC 2017 Long-Term Equity Incentive Plan (the “Plan”). The purpose of the Plan shall be to promote the
long-term growth and profitability of RBC Bearings Incorporated (the “ Company ”) and its Subsidiaries by (i) providing
certain directors, officers and employees of, and certain other individuals who perform services for, or to whom an offer of employment
has been extended by, the Company and its Subsidiaries with incentives to maximize stockholder value and otherwise contribute to
the success of the Company and (ii) enabling the Company to attract, retain and reward the best available persons for positions
of responsibility. Grants (“ Grants ”) of incentive or non-qualified stock options, stock appreciation rights
(“ SAR s”), either alone or in tandem with options, restricted stock, performance awards or any combination
of the foregoing may be made under the Plan. This Plan supercedes any prior plans, and any Grant hereunder supercedes any prior
written agreement pursuant to which such Grant is made.

 

2    Definitions.

 

2.1             “Award
Agreement” means any written agreement between the Company and any person pursuant to which the Company makes any Grant
under the Plan.

 

2.2            “Board
of Directors” and “Board” mean the board of directors of the Company.

 

2.3            “Cause”
means, unless otherwise defined in any Award Agreement, the occurrence of one or more of the following events:

 

2.3.1     conviction
of a felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary or commission of
an act involving fraud or dishonesty; or, in the case of any of the foregoing, a plea of nolo contendere with respect thereto;

 

2.3.2     conduct
that has caused demonstrable and serious injury to the Company or a Subsidiary, reputational, monetary or otherwise;

 

2.3.3     willful
refusal to perform or substantial disregard of duties properly assigned, as determined by the Company;

 

2.3.4     willful
misrepresentation or material non-disclosure to the Board;

 

2.3.5     engaging
willfully in misconduct in connection with the performance of any of one’s duties, including, without limitation, the misappropriation
of funds or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of
the Company or its Subsidiaries or affiliates;

 

2.3.6     willful
breach of duty of loyalty to the Company or, if applicable, a Subsidiary or any other active disloyalty to the Company or, if applicable,
any Subsidiary, including, without limitation, willfully aiding a competitor or, without duplication of clause (vii), improperly
disclosing confidential information;

 

2.3.7     willful
breach of any confidentiality or non-disclosure agreement with the Company or any Subsidiary; or

 

2.3.8     material
violation of any code or standard of behavior generally applicable to employees (or executive employees, in the case of an executive
of the Company or any Subsidiary) of the Company or any Subsidiary.

 

    

     

    

 

2.4           “Change
in Control” means, unless otherwise defined in any Award Agreement,

 

2.4.1     if
any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors
thereto, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto),
directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then
outstanding securities, provided , that the acquisition of additional securities by any person or group that owns 50% or
more of the voting power prior to such acquisition of additional securities shall not be a Change in Control; or

 

2.4.2     during
any twelve-month period, individuals who at the beginning of such period constitute the Board and any new directors whose election
by the Board or nomination for election by the Company’s stockholders was approved by at least a majority of the directors then
still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for
any reason to constitute a majority thereof; or

 

2.4.3     the
stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or
consolidation (A) which would result in all or a portion of the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) by which the corporate existence of the Company is not affected and following
which the Company’s chief executive officer and directors retain their positions with the Company (and constitute at least a majority
of the Board) and such merger or consolidation is consummated; or

 

2.4.4     the
stockholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all the Company’s
assets and such sale or disposition is consummated.

 

2.5            “Code”
means the Internal Revenue Code of 1986, as amended.

 

2.6            “Committee”
means the Compensation Committee of the Board, which shall consist solely of two or more outside directors.

 

2.7            “Common
Stock” means the common stock, par value $0.01 per share, of the Company, and any other shares into which such stock
may be changed by reason of a recapitalization, reorganization, merger, consolidation or any other change in the corporate structure
or capital stock of the Company.

 

2.8            “Disability”
means a disability that would entitle an eligible participant to payment of monthly disability payments under any Company disability
plan or as otherwise determined by the Committee; provided that in any instance where a grant to a participant is treated as “deferred
compensation” within the meaning of Section 409A of the Code, “Disability” shall be interpreted consistently
with the meaning of Section 409A of the Code and guidance issued thereunder.

 

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

 

2.10          “Fair
Market Value” of a share of Common Stock of the Company means, as of the date in question, the officially-quoted closing
selling price of the stock (or if no selling price is quoted, the bid price) on the principal securities exchange or market on
which the Common Stock is then listed for trading (including, for this purpose, the New York Stock Exchange or the Nasdaq National
Market) (the “ Market ”) for the applicable trading day or, if the Common Stock is not then listed or quoted
in the Market, the Fair Market Value shall be the fair value of the Common Stock determined in good faith by the Board using any
reasonable method; provided, however, that when shares received upon exercise of an option are immediately sold in the open market,
the net sale price received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable
withholding taxes and to compute the withholding taxes.

 

2.11          “Incentive
Stock Option” means an option conforming to the requirements of Section 422 of the Code and/or any successor thereto.

 

    

     

    

 

2.12          “Initial
Public Offering” means an underwritten initial public offering and sale of any shares of Common Stock pursuant to an
effective registration statement under the Securities Act.

 

2.13          “Non-Employee
Director” has the meaning given to such term in Rule 16b-3 under the Exchange Act and/or any successor thereto.

 

2.14          “Non-qualified
Stock Option” means any stock option other than an Incentive Stock Option.

 

2.15          “Other
Securities” mean securities of the Company other than Common Stock, which may include, without limitation, debentures,
unbundled stock units or components thereof, preferred stock, warrants and securities convertible into or exchangeable for Common
Stock or other property.

 

2.16          “Retirement”
means retirement as defined under any Company pension plan or retirement program or termination of one’s employment on retirement
with the approval of the Committee; provided that in any instance where a grant to a participant is treated as “deferred
compensation” within the meaning of Section 409A of the Code, “Retirement” shall be interpreted consistently
with the meaning of Section 409A(a)(2)(A)(i) of the Code and guidance issued thereunder.

 

2.17          “Subsidiary”
means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined
voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be
approved by the Committee, are owned directly or indirectly by the Company.

 

3    Administration.

 

The Plan shall be
administered by the Committee; provided that the Board may, in its discretion, at any time and from time to time, resolve to administer
the Plan, in which case the term “Committee” shall be deemed to mean the Board for all purposes herein. Subject to
the provisions of the Plan, the Committee shall be authorized to (i) select persons to participate in the Plan, (ii) determine
the form and substance of Grants made under the Plan to each participant, and the conditions and restrictions, if any, subject
to which such Grants will be made, (iii) certify that the conditions and restrictions applicable to any Grant have been met, (iv) modify
the terms of Grants made under the Plan in accordance with the provisions of Sections 16 and 17 hereof, (v) interpret the Plan
and Grants made thereunder, (vi) make any adjustments necessary or desirable in connection with Grants made under the Plan to eligible
participants located outside the United States and (vii) adopt, amend, or rescind such rules and regulations, and make such
other determinations, for carrying out the Plan as it may deem appropriate. Decisions of the Committee on all matters relating
to the Plan shall be in the Committee’s sole discretion and shall be conclusive and binding on all parties. The validity,
construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with
applicable federal and state laws and rules and regulations promulgated pursuant thereto. No member of the Committee and no officer
of the Company shall be liable for any action taken or omitted to be taken by such member, by any other member of the Committee
or by any officer of the Company in connection with the performance of duties under the Plan, except for such person’s own
willful misconduct or as expressly provided by statute.

 

The expenses of the
Plan shall be borne by the Company. The Company shall not be required to establish any special or separate fund or make any other
segregation of assets to assume the obligations pursuant to any Grant made under the Plan, and rights to any payment in connection
with such Grants shall be no greater than the rights of the Company’s general creditors.

 

    

     

    

 

4    Shares
Available for the Plan.

 

Subject to adjustments
as provided in Section 15, an aggregate of  1,500,000 shares of Common Stock, which represents the number of shares
equal to approximately 6.6% of the number of shares of Common Stock outstanding as of the Effective Date (the “Shares“), may be issued pursuant to the Plan. Such Shares may be in whole or in part authorized and unissued or held by the Company
as treasury shares. Notwithstanding anything contained in this Plan to the contrary, if any Grant under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited as to any Shares, or is tendered or withheld as to any Shares in payment of
the exercise price of the Grant or taxes payable with respect to the Grant or the vesting or exercise thereof, then such unpurchased,
forfeited, tendered or withheld Shares may not thereafter be available for further Grants under the Plan. The number of shares
that may be used for restricted stock or restricted unit grants under the Plan may not exceed fifty percent (50%) of the total
authorized number of Shares pursuant to the Plan. A restricted stock and stock option grant
to an eligible individual under the Plan for a year cannot exceed 100,000 shares.

 

Without limiting the
generality of the foregoing provisions of this Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any other
section of this Plan, the Committee may, at any time or from time to time, and on such terms and conditions (that are consistent
with and not in contravention of the other provisions of this Plan) as the Committee may, in its sole discretion, determine, enter
into agreements (or take other actions with respect to the Grants) for new Grants containing terms (including exercise prices)
more (or less) favorable than the outstanding Grants.

 

5    Participation.

 

Participation in the
Plan shall be limited to those directors (including Non-Employee Directors), officers (including non-employee officers) and employees
of, and other individuals performing services for, or to whom an offer of employment has been extended by, the Company and its
Subsidiaries selected by the Committee (including participants located outside the United States). Nothing in the Plan or in any
Grant thereunder shall confer any right on a participant to continue in the employ as a director or officer of, or in any other
capacity or in the performance of services for, the Company or shall interfere in any way with the right of the Company to terminate
the employment or performance of services or to reduce the compensation or responsibilities of a participant at any time. By accepting
any Grant under the Plan, each participant and each person claiming under or through him or her shall be conclusively deemed to
have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board
or the Committee.

 

Incentive Stock Options
or Non-qualified Stock Options, SARs alone or in tandem with options, restricted stock awards, performance awards or any combination
thereof may be granted to such persons and for such number of Shares as the Committee shall determine (such individuals to whom
Grants are made being sometimes herein called “optionees” or “grantees,” as the case may be). Determinations
made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan,
whether or not such individuals are similarly situated. A Grant of any type made hereunder in any one year to an eligible participant
shall neither guarantee nor preclude a further Grant of that or any other type to such participant in that year or subsequent years.

 

6     Incentive
and Non-qualified Options and SARs.

 

The Committee may
from time to time grant to eligible participants Incentive Stock Options, Non-qualified Stock Options, or any combination thereof;
provided that the Committee may grant Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as
defined for this purpose in Section 424(f) of the Code or any successor thereto). In any one calendar year, the Committee shall
not grant to any one participant options or SARs to purchase or receive the economic equivalent of a number of shares of Common
Stock in excess of 10% of the total number of Shares authorized under the Plan pursuant to Section 4; provided , however,
that the Committee shall be permitted to grant to Dr. Michael J. Hartnett up to 60% of the total number of Shares authorized under
the plan at any time. The options granted shall take such form as the Committee shall determine, subject to the following terms
and conditions.

 

It is the Company’s
intent that Non-qualified Stock Options granted under the Plan not be classified as Incentive Stock Options, that Incentive Stock
Options be consistent with and contain or be deemed to contain all provisions required under Section 422 of the Code or any successor
thereto, that neither any Non-qualified Stock Option nor any Incentive Stock Option be treated as a payment of deferred compensation
for the purposes of Section 409A of the Code and any successor thereto, and that any ambiguities in construction be interpreted
in order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any reason,
then to the extent of such non-qualification, the stock option represented thereby shall be regarded as a Non-qualified Stock Option
duly granted under the Plan, provided that such stock option otherwise meets the Plan’s requirements for Non-qualified Stock
Options.

 

    

     

    

 

6.1           Price.
The price per Share deliverable upon the exercise of each option (“exercise price”) shall not be less than 100% of
the Fair Market Value of a share of Common Stock as of the date of Grant of the option, and in the case of the Grant of any Incentive
Stock Option to an employee who, at the time of the Grant, owns more than 10% of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries, the exercise price may not be less than 110% of the Fair Market Value of a
share of Common Stock as of the date of Grant of the option, in each case unless otherwise permitted by Section 422 of the Code
or any successor thereto.

 

6.2            Payment.
Options may be exercised, in whole or in part, upon payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including check, bank draft, money order or wire transfer of immediately
available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair Market Value on the date of exercise equal
to the aggregate exercise price payable with respect to the options’ exercise, (iii) by simultaneous sale through a broker reasonably
acceptable to the Committee of Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board, (iv)
by authorizing the Company to withhold from issuance a number of Shares issuable upon exercise of the options which, when multiplied
by the Fair Market Value of a share of Common Stock on the date of exercise, is equal to the aggregate exercise price payable with
respect to the options so exercised or (v) by any combination of the foregoing.

 

In the event a grantee
elects to pay the exercise price payable with respect to an option pursuant to clause (ii) above, (A) only a whole number of share(s)
of Common Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present evidence
acceptable to the Company that he or she has owned any such shares of Common Stock tendered in payment of the exercise price (and
that such tendered shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months
prior to the date of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at the election
of the grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of Common Stock tendered in payment
of the price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the
grantee’s broker to transfer, by book entry, of such shares of Common Stock from a brokerage account of the grantee to a
brokerage account specified by the Company. When payment of the exercise price is made by delivery of Common Stock, the difference,
if any, between the aggregate exercise price payable with respect to the option being exercised and the Fair Market Value of the
shares of Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may tender shares of Common
Stock having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised (plus
any applicable taxes).

 

In the event a grantee
elects to pay the exercise price payable with respect to an option pursuant to clause (iv) above, only a whole number of Shares
(and not fractional Shares) may be withheld in payment. When payment of the exercise price is made by withholding of Shares, the
difference, if any, between the aggregate exercise price payable with respect to the option being exercised and the Fair Market
Value of the Shares withheld in payment (plus any applicable taxes) shall be paid in cash. No grantee may authorize the withholding
of Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised
(plus any applicable taxes). Any withheld Shares shall no longer be issuable under such option.

 

6.3             Terms
of Options; Vesting. The term during which each option may be exercised shall be determined by the Committee, but if required
by the Code and except as otherwise provided herein, no option shall be exercisable in whole or in part more than seven years from
the date it is granted, and no Incentive Stock Option granted to an employee who at the time of the Grant owns more than 10% of
the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than
five years from the date it is granted. All rights to purchase Shares pursuant to an option shall, unless sooner terminated, expire
at the date designated by the Committee. The Committee shall determine the date on which each option shall become exercisable and
may provide that an option shall become exercisable in installments. The Shares constituting each installment may be purchased
in whole or in part at any time after such installment becomes exercisable, subject to such minimum exercise requirements as may
be designated by the Committee. Prior to the exercise of an option and delivery of the Shares represented thereby, the optionee
shall have no rights as a stockholder with respect to any Shares covered by such outstanding option (including any dividend or
voting rights).

 

    

     

    

 

6.4            Limitations
on Grants. If required by the Code, the aggregate Fair Market Value (determined as of the Grant date) of Shares for which an
Incentive Stock Option is exercisable for the first time during any calendar year under all equity incentive plans of the Company
and its Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may not exceed $100,000.

 

6.5            Termination;
Forfeiture.

 

6.5.1     Death
or Disability. Unless otherwise provided in any Award Agreement, if a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company and any Subsidiary due to death or Disability, (A) all of the participant’s
options and SARs that were exercisable on the date of death or Disability shall remain exercisable for, and shall otherwise terminate
at the end of, a period of one year after the date of death or Disability, but in no event after the expiration date of the options
and SARs and (B) all of the participant’s options and SARs that were not exercisable on the date of death or Disability
shall be forfeited immediately upon such death or Disability; provided, however, that the Committee may determine to additionally
vest such options and SARs, in whole or in part, in its discretion. Notwithstanding the foregoing, if the Disability giving rise
to the termination of employment is not within the meaning of Section 22(e)(3) of the Code or any successor thereto, Incentive
Stock Options not exercised by such participant within one year after the date of termination of employment will cease to qualify
as Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if required to be so treated under
the Code.

 

6.5.2     Retirement.
Unless otherwise provided in any Award Agreement, if a participant ceases to be a director, officer or employee of, or to perform
other services for, the Company and any Subsidiary upon the occurrence of his or her Retirement, (A) all of the participant’s
options and SARs that were exercisable on the date of Retirement shall remain exercisable for, and shall otherwise terminate at
the end of, a period of 90 days after the date of Retirement, but in no event after the expiration date of the options or SARs;
provided that the participant does not engage in Competition during such 90-day period unless he or she receives written consent
to do so from the Board or the Committee, and (B) all of the participant’s options and SARs that were not exercisable
on the date of Retirement shall be forfeited immediately upon such Retirement; provided, however, that such options and SARs, may
become fully vested and exercisable in the discretion of the Committee. Notwithstanding the foregoing, Incentive Stock Options
not exercised by such participant within 90 days after Retirement will cease to qualify as Incentive Stock Options and will be
treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.

 

6.5.3     Discharge
for Cause. Unless determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform
other services for, the Company or a Subsidiary due to Cause, or if a participant does not become a director, officer or employee
of, or does not begin performing other services for, the Company or a Subsidiary for any reason, all of the participant’s
options and SARs shall expire and be forfeited immediately upon such cessation or non-commencement, whether or not then exercisable.

 

6.5.4     Other
Termination. Unless determined by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company or a Subsidiary for any reason other than death, Disability, Retirement or Cause, (A) all
of the participant’s options and SARs that were exercisable on the date of such cessation shall remain exercisable for, and
shall otherwise terminate at the end of, a period of 90 days after the date of such cessation, but in no event after the expiration
date of the options or SARs; provided that the participant does not engage in Competition during such 90-day period unless he or
she receives written consent to do so from the Board or the Committee, and (B) all of the participant’s options and
SARs that were not exercisable on the date of such cessation shall be forfeited immediately upon such cessation.

 

7    Stock
Appreciation Rights.

 

Provided that the
Company’s stock is traded on an established securities market, the Committee shall have the authority to grant SARs under
this Plan, subject to such terms and conditions specified in this paragraph 7 and any additional terms and conditions as the Committee
may specify.

 

    

     

    

 

No SAR may be issued
unless (a) the exercise price of the SAR may never be less than the Fair Market Value of the underlying Shares on the date of grant
and (b) the SAR does not include any feature for the deferral of compensation income other than the deferral of recognition of
income until the exercise of the SAR.

 

No SAR may be exercised
unless the Fair Market Value of a share of Common Stock of the Company on the date of exercise exceeds the exercise price of the
SAR. Prior to the exercise of the SAR and delivery of the Shares represented thereby, the participant shall have no rights as a
stockholder with respect to Shares covered by such outstanding SAR (including any dividend or voting rights).

 

Upon the exercise
of an SAR, the participant shall be entitled to a distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the SAR, multiplied by the number of Shares as to
which the SAR is exercised. Such distribution shall be made in Shares having a Fair Market Value equal to such amount.

 

All SARs will be exercised
automatically on the last day prior to the expiration date of the SAR so long as the Fair Market Value of a share of Common Stock
on that date exceeds the exercise price of the SAR or any related option, as applicable.

 

The provisions of
Subsections 6(c) shall apply to all SARs except to the extent that the Award Agreement pursuant to which such Grant is made expressly
provides otherwise.

 

It is the Company’s
intent that no SAR shall be treated as a payment of deferred compensation for purposes of Section 409A of the Code and that any
ambiguities in construction be interpreted in order to effectuate such intent.

 

8    Restricted
Stock.

 

The Committee may
at any time and from time to time grant Shares of restricted stock under the Plan to such participants and in such amounts as it
determines. Each Grant of restricted stock shall specify the applicable restrictions on such Shares, the duration of such restrictions,
and the time or times at which such restrictions shall lapse with respect to all or a specified number of Shares that are part
of the Grant.

 

The participant will
be required to pay the Company the aggregate par value of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto)
within 15 days of the date of Grant, unless such Shares of restricted stock are treasury shares. Unless otherwise determined by
the Committee, certificates representing Shares of restricted stock granted under the Plan will be held in escrow by the Company
on the participant’s behalf during any period of restriction thereon and will bear an appropriate legend specifying the applicable
restrictions thereon, and the participant will be required to execute a blank stock power therefor. Except as otherwise provided
by the Committee, during such period of restriction the participant shall have all of the rights of a holder of Common Stock, including
but not limited to the rights to receive dividends and to vote, and any stock or other securities received as a distribution with
respect to such participant’s restricted stock shall be subject to the same restrictions as then in effect for the restricted
stock.

 

Unless otherwise provided
in any Award Agreement, at such time as a participant ceases to be a director, officer or employee of, or to otherwise perform
services for, the Company and its Subsidiaries due to death, Disability or Retirement during any period of restriction, all Shares
of restricted stock granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the
Company. At such time as a participant ceases to be, or in the event a participant does not become, a director, officer or employee
of, or otherwise perform services for, the Company or its Subsidiaries for any other reason, all Shares of restricted stock granted
to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company. The provisions of
Subsections 6(c) and (e) shall apply to Restricted Stock except to the extent that the Award Agreement in relation thereto expressly
provides otherwise.

 

    

     

    

 

It is the Company’s
intent that Restricted Stock shall not be treated as a payment of deferred compensation for purposes of Section 409A of the Code
and that any ambiguities in construction be interpreted in order to effectuate such intent.

 

9    Performance
Awards.

 

Performance awards
may be granted to participants at any time and from time to time as determined by the Committee. The Committee shall have complete
discretion in determining the size and composition of performance awards granted to a participant. The period over which performance
is to be measured (a “performance cycle”) shall commence on the date specified by the Committee and shall end on the
last day of a fiscal year specified by the Committee. A performance award shall be paid no later than the fifteenth day of the
third month following the completion of a performance cycle (or following the elapsed portion of the performance cycle, in the
circumstances described in the last paragraph of this Section 9). Performance awards may include (i) specific dollar-value
target awards (ii) performance units, the value of each such unit being determined by the Committee at the time of issuance,
and/or (iii) performance Shares, the value of each such Share being equal to the Fair Market Value of a share of Common Stock.
In any one calendar year, the Committee shall not grant to any one participant performance awards in excess of 10% of the total
number of Shares authorized under the Plan pursuant to Section 4; provided , however, that the Committee shall be permitted
to grant to Dr. Michael J. Hartnett up to 60% of the total number of Shares authorized under the plan at any time.

 

The value of each
performance award may be fixed or it may be permitted to fluctuate based on a performance factor (e.g., return on equity) selected
by the Committee. It is the Company’s intent that no performance award be treated as the payment of deferred compensation
for purposes of Section 409A of the Code and that any ambiguities in construction be interpreted in order to effectuate such intent.

 

The Committee shall
establish performance goals and objectives for each performance cycle on the basis of such criteria and objectives as the Committee
may select from time to time, including, without limitation, the performance of the participant, the Company, one or more of its
Subsidiaries or divisions or any combination of the foregoing. During any performance cycle, the Committee shall have the authority
to adjust the performance goals and objectives for such cycle for such reasons as it deems equitable.

 

The Committee shall
determine the portion of each performance award that is earned by a participant on the basis of the Company’s performance
over the performance cycle in relation to the performance goals for such cycle. The earned portion of a performance award may be
paid out in Shares, cash, Other Securities, or any combination thereof, as the Committee may determine.

 

A participant must
be a director, officer or employee of, or otherwise perform services for, the Company or its Subsidiaries at the end of the performance
cycle in order to be entitled to payment of a performance award issued in respect of such cycle; provided, however, that except
as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform
services for, the Company and its Subsidiaries upon his or her death, Retirement, or Disability prior to the end of the performance
cycle, the Committee may provide in a Grant that the participant may earn a proportionate portion of the performance award based
upon the elapsed portion of the performance cycle and the Company’s performance over that portion of such cycle.

 

10    Withholding
Taxes.

 

10.1          Participant
Election. Unless otherwise determined by the Committee, a participant may elect to deliver shares of Common Stock (or have
the Company withhold shares acquired upon exercise of an option or SAR or deliverable upon grant or vesting of restricted stock,
as the case may be) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with
the exercise of an option or SAR or the delivery of restricted stock upon grant or vesting, as the case may be. Such election must
be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The
fair market value of the shares to be withheld or delivered will be the Fair Market Value as of the date the amount of tax to be
withheld is determined. In the event a participant elects to deliver or have the Company withhold shares of Common Stock pursuant
to this Section 10(a), such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth
in Section 6(b) with respect to the delivery or withholding of Common Stock in payment of the exercise price of options.

 

    

     

    

 

10.2          Company
Requirement. The Company may require, as a condition to any Grant or exercise under the Plan or to the delivery of certificates
for Shares issued hereunder, that the grantee make provision for the payment to the Company, either pursuant to Section 10(a) or
this Section 10(b), of federal, state or local taxes of any kind required by law to be withheld with respect to any Grant or delivery
of Shares. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any federal, state or local taxes of any kind required
by law to be withheld with respect to any grant or delivery of Shares under the Plan.

 

11  Written
Agreement.

 

Each employee to whom a Grant is made under
the Plan shall enter into an Award Agreement with the Company that shall contain such provisions consistent with the provisions
of the Plan, as may be approved by the Committee. If there is a Change in Control of the Company the Committee may, in its discretion,
provide a provision in participant’s Award Agreement for the vesting of a participant’s Grant under the Plan if the
participant ceases to be a director, officer employee or individual performing services for the Company because his or her relationship
with the Company is terminated without Cause following a Change in Control, with such vesting to occur on the date of termination.

 

12  Transferability.

 

Unless the Committee
determines otherwise, no option, SAR, performance award or restricted stock granted under the Plan shall be transferable by a participant
other than by will or the laws of descent and distribution; provided that, in the case of Shares of restricted stock granted under
the Plan, such Shares of restricted stock shall be freely transferable following the time at which such restrictions shall have
lapsed with respect to such Shares. Unless the Committee determines otherwise, an option, SAR or performance award may be exercised
only by the optionee or grantee thereof; by his or her executor or administrator, the executor or administrator of the estate of
any of the foregoing, or any person to whom the option, SAR or performance award is transferred by will or the laws of descent
and distribution; or by his or her guardian or legal representative; or the guardian or legal representative of any of the foregoing;
provided that Incentive Stock Options may be exercised by any guardian or legal representative only if permitted by the Code and
any regulations thereunder. All provisions of this Plan and any Award Agreement referred to in Section 11 shall in any event continue
to apply to any option, SAR, performance award or restricted stock granted under the Plan and transferred as permitted by this
Section 12, and any transferee of any such option, SAR, performance award or restricted stock shall be bound by all provisions
of this Plan and any agreement referred to in Section 11 as and to the same extent as the applicable original grantee.

 

13  Listing,
Registration and Qualification.

 

If the Committee determines
that the listing, registration or qualification upon any securities exchange or under any law of Shares subject to any option,
SAR, performance award or restricted stock Grant is necessary or desirable as a condition of, or in connection with, the granting
of same or the issue or purchase of Shares thereunder, no such option or SAR may be exercised in whole or in part, no such performance
award may be paid out, and no Shares may be issued, unless such listing, registration or qualification is effected free of any
conditions not acceptable to the Committee.

 

14  Transfer
of Employee.

 

The transfer of an
employee from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another shall not be considered
a termination of employment; nor shall it be considered a termination of employment if an employee is placed on military or sick
leave or such other leave of absence which is considered by the Committee as continuing intact the employment relationship.

 

    

     

    

 

15  Adjustments.

 

In the event of a
reorganization, recapitalization, spin-off or other extraordinary distribution, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets, spin-off or other extraordinary distribution, or any other change in the corporate
structure or shares of the Company, the Committee shall make such adjustment as it deems appropriate in the number and kind of
Shares or other property available for issuance under the Plan (including, without limitation, the total number of Shares available
for issuance under the Plan pursuant to Section 4), in the number and kind of options, SARs, Shares or other property covered by
Grants previously made under the Plan, and in the exercise price of outstanding options and SARs. Any such adjustment shall be
final, conclusive and binding for all purposes of the Plan. In the event of any merger, consolidation or other reorganization in
which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, all of the Company’s
obligations regarding options, SARs, performance awards, and restricted stock that were granted hereunder and that are outstanding
on the date of such event shall, on such terms as may be approved by the Committee prior to such event, be (a) assumed by the surviving
or continuing corporation; or (b) canceled in exchange for cash, securities of the acquiror or other property; provided that, in
the case of clause (b), (i) such merger, consolidation, other reorganization or Change in Control constitutes a “change in
ownership or control” of the Company or a “change in the ownership of a substantial portion” of the Company’s
assets within the meaning of Section 409A(a)(2)(A)(v) of the Code and the guidance issued thereunder or (ii) the payment of cash,
securities or other property is not treated as a payment of “deferred compensation” under Section 409A of the Code.

 

Without limitation
of the foregoing, in connection with any transaction described in the last sentence of the preceding paragraph, the Committee may,
in its discretion, (i) cancel any or all outstanding options under the Plan in consideration for payment to the holders thereof
of an amount equal to the portion of the consideration that would have been payable to such holders pursuant to such transaction
if their options had been fully exercised immediately prior to such transaction, less the aggregate exercise price that would have
been payable therefor, or (ii) if the amount that would have been payable to the option holders pursuant to such transaction if
their options had been fully exercised immediately prior thereto would be equal to or less than the aggregate exercise price that
would have been payable therefor, cancel any or all such options for no consideration or payment of any kind. Payment of any amount
payable pursuant to the preceding sentence may be made in cash or, in the event that the consideration to be received in such transaction
includes securities or other property, in cash, securities of the acquiror or other property in the Committee’s discretion.

 

16  Amendment
and Termination of the Plan.

 

Except as otherwise
provided in an Award Agreement, the Board of Directors, without approval of the stockholders, may amend or terminate the Plan,
except that no amendment shall become effective without prior approval of the stockholders of the Company if stockholder approval
would be required by applicable law or regulations, including if required for continued compliance with the performance-based compensation
exception of Section 162(m) of the Code or any successor thereto, under the provisions of Section 409A of the Code or any
successor thereto, under the provisions of Section 422 of the Code or any successor thereto, or by any listing requirement of the
principal stock exchange on which the Common Stock is then listed.

 

17  Amendment
or Substitution of Grants under the Plan.

 

The terms of any outstanding Grant under the Plan may be amended
from time to time by the Committee in its discretion in any manner that it deems appropriate including, but not limited to, acceleration
of the date of exercise of any Grant and/or payments thereunder or of the date of lapse of restrictions on Shares (but, in the
case of a Grant that is or would be treated as “deferred compensation” for purposes of Section 409A of the Code, only
to the extent permitted by guidance issued under Section 409A of the Code); provided that, except as otherwise provided in Section
16 or in an Award Agreement, no such amendment shall adversely affect in a material manner any right of a participant under the
Grant without his or her written consent, and further provided that the Committee shall not reduce the exercise price of any options
or SARs awarded under the Plan. The Committee may, in its discretion, permit holders of Grants under the Plan to surrender outstanding
Grants in order to exercise or realize rights under other Grants, or in exchange for new Grants, or require holders of Grants to
surrender outstanding Grants as a condition precedent to the receipt of new Grants under the Plan, but only if such surrender,
exercise, realization, exchange or Grant (a) is not treated as a payment of, and does not cause a Grant to be treated as, deferred
compensation for the purposes of Section 409A of the Code or (b) is permitted under guidance issued pursuant to Section 409A of
the Code. Notwithstanding anything contained in this Section 17 to the contrary, no surrender, exercise, realization, exchange
or Grant in substitution for, assumption of, or as an alternative to or replacement of, an existing Grant pursuant to this Section
17 shall be effected or implemented by the Company, including but not limited to a cash buy back of an out of the money stock option,
in order to reduce or change the exercise price of any outstanding options or SARs awarded under the Plan or otherwise implement
a re-pricing of any outstanding options or SARs awarded under the Plan including by means of buy back, cancellation and re-grant.

 

    

     

    

 

18  Commencement
Date; Termination Date.

 

The date of commencement
of the Plan shall be September 13, 2017, subject to approval by the shareholders of the Company.

 

Unless previously
terminated upon the adoption of a resolution of the Board terminating the Plan, the Plan shall terminate at the close of business
on September 13, 2027. Subject to the provisions of an Award Agreement, which may be more restrictive, no termination of the Plan
shall materially and adversely affect any of the rights or obligations of any person, without his or her written consent, under
any Grant of options or other incentives theretofore granted under the Plan.

 

19  Severability.

 

Whenever possible,
each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision
of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of the Plan.

 

20  Governing
Law.

 

The Plan shall be
governed by the corporate laws of the State of Delaware, without giving effect to any choice of law provisions that might otherwise
refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

 

21  Compliance
Amendments.

 

Except as otherwise
provided in an Award Agreement, notwithstanding any of the foregoing provisions of the Plan, and in addition to the powers of amendment
set forth in Sections 16 and 17 hereof, the provisions hereof and the provisions of any award made hereunder may be amended unilaterally
by the Company from time to time to the extent necessary (and only to the extent necessary) to prevent the implementation, application
or existence (as the case may be) of any such provision from (i) requiring the inclusion of any compensation deferred pursuant
to the provisions of the Plan (or an award thereunder) in a participant’s gross income pursuant to Section 409A of the Code, and
the regulations issued thereunder from time to time and/or (ii) inadvertently causing any award hereunder to be treated as providing
for the deferral of compensation pursuant to such Code section and regulations.Exhibit

LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease”) is made as of May 31, 2017 (the “Effective Date”), by and between STORE CAPITAL ACQUISITIONS, LLC, a Delaware limited liability company (“Lessor”), whose address is 8377 E. Hartford Drive, Suite 100, Scottsdale, Arizona 85255, and REAL TIME LOGIC, INC., a Colorado corporation (“Lessee”), whose address is 12515 Academy Ridge View, Colorado Springs, Colorado 80921.  Capitalized terms not defined herein shall have the meanings set forth in Exhibit A hereto.
In consideration of the mutual covenants and agreements herein contained, Lessor and Lessee hereby covenant and agree as follows:
ARTICLE I
 
BASIC LEASE TERMS
Section 1.01.     Property.  A portion of the real property and improvements commonly known as 12515 and 12575 Academy Ridge View, Colorado Springs, CO 80921, as more specifically described on Exhibit B, attached hereto and incorporated herein.
Section 1.02.     Initial Term Expiration Date.  May 31, 2032.
Section 1.03.     Extension Options.  Two (2) extensions of five (5) years each, as described in Section 3.02.
Section 1.04.     Term Expiration Date (if fully extended).  May 31, 2042.
Section 1.05.     Initial Base Annual Rental.  $994,800, payable pursuant to Section 4.01.
Section 1.06.     Rental Adjustment.  The lesser of (i) 2%, or (ii) 1.0 times the change in the Price Index, as described in Section 4.02.
Section 1.07.     Adjustment Date. June 1, 2018, and annually thereafter during the Lease Term (including any Extension Term).
Section 1.08.     Guarantor.  Kratos Defense & Security Solutions, Inc.
Section 1.09.     Lessee Tax Identification No.  74-3063615.
Section 1.10.     Lessor Tax Identification No.  45-2674893.
ARTICLE II 
 
LEASE OF PROPERTY
Section 2.01.     Lease.  In consideration of Lessee’s payment of the Rental and other Monetary Obligations and Lessee’s performance of all other obligations hereunder, Lessor hereby leases to Lessee, and Lessee hereby takes and hires, the Property, “AS IS” and “WHERE IS” 

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without representation or warranty by Lessor, and subject to the existing state of title, the parties in possession, any statement of facts which an accurate survey or physical inspection might reveal, and all Legal Requirements now or hereafter in effect.
Section 2.02.     Quiet Enjoyment.  So long as Lessee shall pay the Rental and other Monetary Obligations provided in this Lease and shall keep and perform all of the terms, covenants and conditions on its part contained herein and subject to the rights of Lessor under Section 12.02, Lessee shall have, subject to the terms and conditions set forth herein, the right to the peaceful and quiet enjoyment and occupancy of the Property.
Section 2.03.     Lease of Entire Parcel.  Notwithstanding any provision contained herein, prior to or simultaneously with the Final Disbursement (but with “Effective Dates” that are the same date as the later to occur of the Final Disbursement or the Rent Commencement Date (as defined in the New Building Lease)), Lessee and Lessor agree to execute a termination of the New Building Lease and to execute an amendment and restatement of this Lease to expand the definition of Property to include all of the parcel or parcels of real estate, including all buildings, fixtures and other improvements located on the real estate commonly known as 12515 and 12575 Academy Ridge View, Colorado Springs, CO 80921, and legally described on Exhibit B, attached hereto and incorporated herein (the “Entire Parcel”).  Such amendment and restatement of this Lease shall be in substantially the same form as attached to the Disbursement Agreement, and shall, among other things, (a) modify the definition of “Property” as defined in this Lease to describe the Entire Parcel (i.e., the Property and the New Building Area); (b) increase the Base Annual Rental to reflect the inclusion of the New Building Area; (c) reset the Initial Term of this Lease to be fifteen (15) years from the amendment and restatement date of this Lease, and (d) make such other changes reasonably necessary to reflect the expansion of the definition of Property in this Lease.    
Section 2.04.     Warranty License.  Lessor hereby grants to Lessee during the Lease Term a license to use and enforce all warranties, guaranties, indemnities and similar rights (collectively, the “Warranties”) which Lessor may have against any manufacturer, seller, engineer, contractor or builder in respect of any of the Property.  Such license shall remain in effect until the expiration or earlier termination of this Lease, whereupon such license shall cease and Lessee shall have no further rights with respect to all of the Warranties without any further notice.  Lessor shall also retain the right to enforce any Warranties upon the occurrence of an Event of Default.  Lessee shall enforce the Warranties in accordance with their respective terms.
ARTICLE III 
 
LEASE TERM; EXTENSION
Section 3.01.     Initial Term.  The initial term of this Lease (“Initial Term”) shall commence as of the Effective Date and shall expire at midnight on May 31, 2032, unless terminated sooner as provided in this Lease and as may be extended as provided herein.  The time period during which this Lease shall actually be in effect, including any Extension Term, is referred to as the “Lease Term.”
Section 3.02.     Extensions.  Unless this Lease has expired or has been sooner terminated, or an Event of Default has occurred and is continuing at the time any extension option is exercised, Lessee shall have the right and option (each, an “Extension Option”) to extend the Initial Term for 

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the Property for two (2) additional successive periods of five (5) years each (each, an “Extension Term”), pursuant to the terms and conditions of this Lease then in effect.
Section 3.03.     Notice of Exercise.  Lessee may only exercise the Extension Options by giving written notice thereof to Lessor of its election to do so no later than one hundred twenty (120) days prior to the expiration of the then-current Lease Term.  If written notice of the exercise of any Extension Option is not received by Lessor by the applicable dates described above, then this Lease shall terminate on the last day of the Initial Term or, if applicable, the last day of the Extension Term then in effect.  Upon the request of Lessor or Lessee, the parties hereto will, at the expense of the requesting party, execute and exchange an instrument in recordable form setting forth the extension of the Lease Term in accordance with this Section 3.03.
Section 3.04.     Removal of Personalty.  Upon the expiration of the Lease Term, and if there is no then-existing continuing Event of Default, Lessee may remove from the Property all personal property (subject to any rights of Lessee’s Institutional Lenders) belonging to Lessee.  Lessee shall repair any damage caused by such removal and shall leave the Property clean and in good and working condition and repair inside and out, subject to normal wear and tear, casualty and condemnation.  Any property of Lessee left on the Property on the tenth day following the expiration of the Lease Term shall, at Lessor’s option, automatically and immediately become the property of Lessor.
ARTICLE IV 
 
RENTAL AND OTHER MONETARY OBLIGATIONS
Section 4.01.     Base Monthly Rental.  During the Lease Term, on or before the first day of each calendar month, Lessee shall pay in advance the Base Monthly Rental then in effect.  If the Effective Date is a date other than the first day of the month, Lessee shall pay to Lessor on the Effective Date the Base Monthly Rental prorated by multiplying the Base Monthly Rental by a fraction, the numerator of which is the number of days remaining in the month (including the Effective Date) for which Rental is being paid, and the denominator of which is the total number of days in such month.  
Section 4.02.     Adjustments.  During the Lease Term (including any Extension Term), on the first Adjustment Date and on each Adjustment Date thereafter, the Base Annual Rental shall increase by an amount equal to the Rental Adjustment; provided, however, that in no event shall Base Annual Rental be reduced as a result of the application of the Rental Adjustment.
Section 4.03.     Additional Rental.  Lessee shall pay and discharge, as additional rental (“Additional Rental”), all sums of money required to be paid by Lessee under this Lease which are not specifically referred to as Rental.  Lessee shall pay and discharge any Additional Rental when the same shall become due, provided that amounts which are billed to Lessor or any third party, but not to Lessee, shall be paid within fifteen (15) Business Days after Lessor’s demand for payment thereof or, if earlier, when the same are due.  In no event shall Lessee be required to pay to Lessor any item of Additional Rental that Lessee is obligated to pay and has paid to any third party pursuant to any provision of this Lease.

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Section 4.04.     Rentals to be Net to Lessor.  The Base Annual Rental payable hereunder shall be net to Lessor, so that this Lease shall yield to Lessor the Rentals specified during the Lease Term, and all Costs and obligations of every kind and nature whatsoever relating to the Property shall be performed and paid by Lessee, except as stated elsewhere in the Lease.  Lessee shall perform all of its obligations under this Lease at its sole cost and expense. All Rental and other Monetary Obligations which Lessee is required to pay hereunder shall be the unconditional obligation of Lessee and shall be payable in full when due and payable, without notice or demand, and without any setoff, abatement, deferment, deduction or counterclaim whatsoever (except for any Monetary Obligations that arise from Lessor’s gross negligence or willful misconduct).
Section 4.05.     Wire Transfer.  Payments of the Base Monthly Rental and any other Monetary Obligations payable to Lessor hereunder shall be paid in immediately available funds to the account identified on Exhibit C attached hereto, or to any other account as Lessor may from time to time designate to Lessee.  Each such payment shall be made by Lessee by wire or other electronic transfer of funds, or automatic debit from an account designated by Lessee if so elected by Lessee.  Lessee shall continue to pay all Rental and other Monetary Obligations in such manner unless otherwise directed by Lessor.  Notwithstanding the foregoing, in the event that Lessee fails, more than twice during any calendar year, to pay the Base Monthly Rental by wire or other electronic transfer of funds when due, Lessee shall deliver to Lessor a complete Authorization Agreement – Pre‐Arranged Payments in the form provided by Lessor together with a voided check for account verification, establishing arrangements whereby payments of the Base Monthly Rental are transferred by Automated Clearing House Debit initiated by Lessor.
Section 4.06.     Late Charges; Default Interest.  Any delinquent payment not made within three (3) Business Days of the date such payment is due (provided that such three (3) Business Day grace period shall only be available once in any twelve (12) month period) shall, in addition to any other remedy of Lessor, incur a late charge of five percent (5%) (which late charge is intended to compensate Lessor for the cost of handling and processing such delinquent payment and should not be considered interest) and bear interest at the Default Rate, such interest to be computed from and including the date such payment was due through and including the date of the payment; provided, however, in no event shall Lessee be obligated to pay a sum of late charge and interest higher than the maximum legal rate then in effect.  
Section 4.07.     Holdover.  If Lessee remains in possession of the Property after the expiration of the term hereof, Lessee, at Lessor’s option and within Lessor’s sole discretion, may be deemed a tenant on a month‐to‐month basis and shall continue to pay Rentals and other Monetary Obligations in the amounts herein provided, except that the Base Monthly Rental shall be automatically increased to one hundred twenty-five percent (125%) of the last Base Monthly Rental payable under this Lease, and Lessee shall comply with all the terms of this Lease; provided that nothing herein nor the acceptance of Rental by Lessor shall be deemed a consent to such holding over.  Lessee shall defend (using counsel chosen by Lessee and approved by Lessor), indemnify, protect and hold the Indemnified Parties harmless from and against any and all Losses resulting from Lessee’s failure to surrender possession upon the expiration of the Lease Term.

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Section 4.08.     Guaranty.  On or before the execution of this Lease, Lessee shall cause Guarantor to execute and deliver to Lessor the Guaranty.
Section 4.09.     Security Deposit. 
(a)    Lessee has paid Lessor upon the delivery of this Lease and the New Building Lease a single security deposit in the total amount of $250,000 (the “Security Deposit”) as security for the full and faithful performance by Lessee of each and every term, provision, covenant and condition of this Lease and the New Building Lease.  Upon the occurrence of an Event of Default (pursuant to this Lease or the New Building Lease), Lessor may, but shall not be required to, use, apply or retain the whole or any part of the Security Deposit for the payment of any Monetary Obligation (including Rental) in default or for any other sum which Lessor may expend or be required to expend by reason of Lessee’s default, including any damages or deficiency in the reletting of the Property, whether such damages or deficiency accrue before or after summary proceedings or other re‐entry by Lessor; provided, however, that each time Lessor so uses any amount of the Security Deposit, (a) Lessee shall have fifteen (15) days to replenish the Security Deposit as described in this Section 4.09(a) before such deficiency begins to bear interest at the Default Rate (which shall thereafter accrue until the Security Deposit has been replenished), and (b) Lessee shall, within thirty (30) days after Lessor’s written request therefor, deposit additional money with Lessor sufficient to restore the Security Deposit to a sum equal to the original amount of the Security Deposit (or the reduced amount of the Security Deposit if reduced pursuant to Section 4.09(c), below).  
(b)    If Lessee shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease and the New Building Lease, the Security Deposit, or any balance thereof, shall be returned to Lessee after the time fixed as the expiration of the Lease Term of both this Lease and the New Building Lease and after the removal of Lessee and surrender of possession of the Property and the New Building Area to Lessor.  In the absence of evidence satisfactory to Lessor of an assignment of the right to receive the Security Deposit, or the remaining balance thereof, Lessor may return the security to the original Lessee, regardless of one or more assignments of this Lease and/or the New Building Lease.  In case of a sale or transfer of the fee of the Property and the New Building Area, or any cessation of Lessor’s interest therein (including in connection with a Lessor bankruptcy or a Lessor default under any of its loans), whether in whole or in part, Lessor shall pay over any unapplied part of the Security Deposit to the succeeding owner of the Property and/or the New Building Area and from and after such payment Lessor shall be relieved of all liability with respect thereto so long as such succeeding owner acknowledges receipt of the Security Deposit (or any remaining portion thereof), in writing, and a copy of such writing is provided to Lessee. The provisions of the preceding sentence shall apply to every subsequent sale or transfer of the fee of the Property and/or the New Building Area, and any successor of Lessor may, upon a sale, transfer or other cessation of the interest of such successor in the Property and/or the New Building Area, whether in whole or in part, pay over any unapplied part of the Security Deposit to the successor owner of the Property and/or the New Building Area and shall thereupon be relieved of all liability with respect thereto so long as such succeeding owner acknowledges receipt of the Security Deposit (or any remaining portion thereof), in writing, and a copy of such writing is provided to Lessee.  

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ARTICLE V 
 
REPRESENTATIONS AND WARRANTIES
The representations and warranties of each party contained in this Article V are being made to induce the other party to enter into this Lease, and the parties have relied, and will continue to rely, upon such representations and warranties.  
With respect to Sections 5.01 through 5.07, Lessee represents and warrants to Lessor as follows:
Section 5.01.     Organization, Authority and Status of Lessee.  Lessee has been duly organized or formed, is validly existing and in good standing under the laws of its state of formation and is qualified as a foreign corporation to do business in any jurisdiction where such qualification is required.  All necessary and appropriate action has been taken to authorize the execution, delivery and performance by Lessee of this Lease and of the other documents, instruments and agreements provided for herein.  Lessee is not, and if Lessee is a “disregarded entity,” the owner of such disregarded entity is not, a “nonresident alien,” “foreign corporation,” “foreign partnership,” “foreign trust,” “foreign estate,” or any other “person” that is not a “United States Person” as those terms are defined in the Code and the regulations promulgated thereunder.  The Person who has executed this Lease on behalf of Lessee is duly authorized to do so.
Section 5.02.     Enforceability.  This Lease constitutes the legal, valid and binding obligation of Lessee, enforceable against Lessee in accordance with its terms.
Section 5.03.     Litigation.  There are no suits, actions, proceedings or investigations pending, or to the best of its knowledge, threatened against or involving any Lessee Entity or the Property before any arbitrator or Governmental Authority which might reasonably result in any Material Adverse Effect.
Section 5.04.     Absence of Breaches or Defaults.  Lessee is not in default under any document, instrument or agreement to which Lessee is a party or by which Lessee, the Property or any of Lessee’s property is subject or bound, which has had, or could reasonably be expected to result in, a Material Adverse Effect.  The authorization, execution, delivery and performance of this Lease and the documents, instruments and agreements provided for herein will not result in any breach of or default under any document, instrument or agreement to which Lessee is a party or by which Lessee, the Property or any of Lessee’s property is subject or bound.
Section 5.05.     Compliance with OFAC Laws.  None of the Lessee Entities, and no individual or entity owning directly or indirectly any interest in any of the Lessee Entities, is an individual or entity whose property or interests are subject to being blocked under any of the OFAC Laws or is otherwise in violation of any of the OFAC Laws; provided, however, that the representation contained in this sentence shall not apply to any Person to the extent such Person’s interest is in or through a U.S. Publicly Traded Entity.

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Section 5.06.     Solvency.  There is no contemplated, pending or threatened Insolvency Event or similar proceedings, whether voluntary or involuntary, affecting Lessee or any Lessee Entity.  Lessee does not have unreasonably small capital to conduct its business.
Section 5.07.     Ownership.  None of (i) Lessee, (ii) any Affiliate of Lessee, or (iii) any Person owning ten percent (10%) or more of Lessee, owns, directly or indirectly, ten percent (10%) or more of the total voting power or total value of capital stock in STORE Capital Corporation. 

With respect to Sections 5.08 through 5.13, Lessor represents and warrants to Lessee as follows:
Section 5.08.     Organization, Authority and Status of Lessor.  Lessor has been duly organized or formed, is validly existing and in good standing under the laws of its state of formation and is qualified as a foreign corporation to do business in Colorado.  All necessary and appropriate action has been taken to authorize the execution, delivery and performance by Lessor of this Lease and of the other documents, instruments and agreements provided for herein.  Lessor is not, and if Lessor is a “disregarded entity,” the owner of such disregarded entity is not, a “nonresident alien,” “foreign corporation,” “foreign partnership,” “foreign trust,” “foreign estate,” or any other “person” that is not a “United States Person” as those terms are defined in the Code and the regulations promulgated thereunder.  The Person who has executed this Lease on behalf of Lessor is duly authorized to do so.
Section 5.09.     Enforceability.  This Lease constitutes the legal, valid and binding obligation of Lessor, enforceable against Lessor in accordance with its terms.
Section 5.10.     Litigation.  There are no suits, actions, proceedings or investigations pending, or to the best of its knowledge, threatened against or involving any Lessor Entity or the Property before any arbitrator or Governmental Authority which might reasonably result in any Material Adverse Effect.
Section 5.11.     Absence of Breaches or Defaults.  Lessor is not in default under any document, instrument or agreement to which Lessor is a party or by which Lessor, the Property or any of Lessor’s property is subject or bound, which has had, or could reasonably be expected to result in, a Material Adverse Effect.  The authorization, execution, delivery and performance of this Lease and the documents, instruments and agreements provided for herein will not result in any breach of or default under any document, instrument or agreement to which Lessor is a party or by which Lessor, the Property or any of Lessor’s property is subject or bound.
Section 5.12.     Compliance with OFAC Laws.  None of Lessor or any individual or entity owning directly or indirectly any interest in any of Lessor, is an individual or entity whose property or interests are subject to being blocked under any of the OFAC Laws or is otherwise in violation of any of the OFAC Laws; provided, however, that the representation contained in this sentence shall not apply to any Person to the extent such Person’s interest is in or through a U.S. Publicly Traded Entity.

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Section 5.13.     Solvency.  There is no contemplated, pending or threatened Insolvency Event or similar proceedings, whether voluntary or involuntary, affecting Lessor or any Lessor Entity.  Lessor does not have unreasonably small capital to conduct its business.
ARTICLE VI 
 
TAXES AND ASSESSMENTS; UTILITIES; INSURANCE
Section 6.01.     Taxes.
(a)    Payment.  Subject to the provisions of Section 6.01(b) below, Lessee shall pay, prior to the earlier of delinquency or the accrual of interest on the unpaid balance, all taxes and assessments of every type or nature assessed against or imposed upon the Property, Lessee or Lessor during the Lease Term related to or arising out of this Lease and the activities of the parties hereunder, including without limitation, (i) all taxes or assessments upon the Property or any part thereof and upon any personal property, trade fixtures and improvements located on the Property, whether belonging to Lessor or Lessee, or any tax or charge levied in lieu of such taxes and assessments; (ii) all taxes, charges, license fees and or similar fees imposed by reason of the use of the Property by Lessee; (iii) all excise, franchise, transaction, privilege, license, sales, use and other taxes upon the Rental or other Monetary Obligations hereunder, the leasehold estate of either party or the activities of either party pursuant to this Lease; and (iv) all franchise, privilege or similar taxes of Lessor calculated on the value of the Property or on the amount of capital apportioned to the Property.  Notwithstanding anything in clauses (i) through (iv) to the contrary, Lessee shall not be obligated to pay or reimburse Lessor for any taxes based on the net income of Lessor.
(b)    Right to Contest.  Within thirty (30) days after each tax and assessment payment is required by this Section 6.01 to be paid, Lessee shall provide Lessor with evidence reasonably satisfactory to Lessor that taxes and assessments have been timely paid by Lessee.  In the event Lessor receives a tax bill, Lessor shall use commercially reasonable efforts to forward said bill to Lessee within fifteen (15) days of Lessor’s receipt thereof.  Lessee may, at its own expense, contest or cause to be contested (in the case of any item involving more than $10,000, after prior written notice to Lessor, which shall be given within fifteen (15) days of Lessee’s determination to contest any matter as permitted herein), by appropriate legal proceedings conducted in good faith and with due diligence, any above‐described item or lien with respect thereto, provided that (i) neither the Property nor any interest therein would be in any danger of being sold, forfeited or lost by reason of such proceedings; (ii) no Event of Default has occurred and is continuing; (iii) if and to the extent required by the applicable taxing authority and/or Lessor, Lessee posts a bond or takes other steps acceptable to such taxing authority and/or Lessor that removes such lien or stays enforcement thereof; (iv) Lessee shall promptly provide Lessor with copies of all notices received or delivered by Lessee and filings made by Lessee in connection with such proceeding; and (v) upon termination of such proceedings, it shall be the obligation of Lessee to pay the amount of any such tax and assessment or part thereof as finally determined in such proceedings, the payment of which may have been deferred during the prosecution of such proceedings, together with any costs, fees (including attorneys’ fees and disbursements), interest, penalties or other liabilities in connection therewith.  Lessor shall at the request of Lessee, execute or join in the execution of any instruments or documents necessary in connection with such contest or proceedings, but Lessor shall incur no cost or obligation thereby.

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Section 6.02.     Utilities.  Lessee shall contract, in its own name, for and pay when due all charges for the connection and use of water, gas, electricity, telephone, garbage collection, sewer use and other utility services supplied to the Property during the Lease Term.  Under no circumstances shall Lessor be responsible for any interruption of any utility service, unless caused by Lessor’s gross negligence or willful misconduct.
Section 6.03.     Insurance.  
(a)    Coverage.  Throughout the Lease Term, Lessee shall maintain, with respect to the Property, at its sole expense, the following types and amounts of insurance, in addition to such other insurance as Lessor may reasonably require from time to time:
(i)    Insurance against loss or damage to real property and personal property under an “all risk” or “special form” insurance policy, which shall include coverage against all risks of direct physical loss, including but not limited to loss by fire, lightning, wind, terrorism, and other risks normally included in the standard ISO special form (and shall also include National Flood and Excess Flood insurance if the Property is located in Flood Zone A or Flood Zone V, as designated by FEMA, or otherwise located in a flood zone area identified by FEMA as a 100-year flood zone or special hazard area, and earthquake insurance if the Property is located within a moderate to high earthquake hazard zone as determined by an approved insurance company set forth in Section 6.03(b)(x) below).  Such policy shall also include soft costs, a joint loss agreement, coverage for ordinance or law covering the loss of value of the undamaged portion of the Property, costs to demolish and the increased costs of construction if any of the improvements located on, or the use of, the Property shall at any time constitute legal non-conforming structures or uses.  Ordinance or law limits shall be in an amount equal to the full replacement cost for the loss of value of the undamaged portion of the Property and no less than 25% of the replacement cost for costs to demolish and the increased cost of construction, or in an amount otherwise specified by Lessor.  Such insurance shall be in amounts not less than 100% of the full insurable replacement cost values (without deduction for depreciation), with an agreed amount endorsement or without any coinsurance provision, and with sublimits satisfactory to Lessor, as determined from time to time at Lessor’s request but not more frequently than once in any 12-month period.
(ii)    Commercial general liability insurance, including products and completed operation liability, covering Lessor and Lessee against bodily injury liability, property damage liability and personal and advertising injury, including without limitation any liability arising out of the ownership, maintenance, repair, condition or operation of the Property or adjoining ways, streets, parking lots or sidewalks.  Such insurance policy or policies shall contain a broad form contractual liability endorsement under which the insurer agrees to insure Lessee’s obligations under Article X hereof to the extent insurable, and a “severability of interest” clause or endorsement which precludes the insurer from denying the claim of Lessee or Lessor because of the negligence or other acts of the other, shall be in amounts of not less than $10,000,000 per occurrence for bodily injury and property damage, and $10,000,000 general aggregate per location, or such higher limits as Lessor may reasonably require from time to time, and shall be of form and substance satisfactory to Lessor.  Such limits of insurance can be acquired through Commercial General liability and Umbrella liability policies.

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(iii)    Workers’ compensation and Employers Liability insurance with statutorily mandated limits covering all persons employed by Lessee on the Property in connection with any work done on or about the Property for which claims for death or bodily injury could be asserted against Lessor, Lessee or the Property.
(iv)    Business interruption insurance including Rental Value Insurance payable to Lessor at all locations for a period of not less than twelve (12) months.  Such insurance is to follow the form of the real property “all risk” or “special form” coverage and is not to contain a co‐insurance clause.  Such insurance is to have a minimum of 180 days of extended period of indemnity.
(v)    Automobile liability insurance, including owned, non-owned and hired car liability insurance for combined limits of liability of $2,000,000 per occurrence.  The limits of liability can be provided in a combination of an automobile liability policy and an umbrella liability policy.
(vi)    Comprehensive Boiler and Machinery or Equipment Breakdown Insurance against loss or damage from explosion of any steam or pressure boilers or similar apparatus, if any, and other building equipment including HVAC units located in or about the Property and in an amount equal to the lesser of 25% of the 100% replacement cost of the Property or $5,000,000.
(b)    Insurance Provisions.  All insurance policies shall:
(i)    provide for a waiver of subrogation by the insurer as to claims against Lessor, its employees and agents;
(ii)    be primary and provide that any “other insurance” clause in the insurance policy shall exclude any policies of insurance maintained by Lessor and the insurance policy shall not be brought into contribution with insurance maintained by Lessor;
(iii)    contain deductibles not to exceed $100,000;
(iv)    contain a standard non‐contributory mortgagee clause or endorsement in favor of any Lender designated by Lessor;

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(v)    provide that the policy of insurance shall not be terminated, cancelled or materially amended (such that the policy is no longer in compliance with the requirements of this Lease) without at least thirty (30) days’ prior written notice from Lessee to Lessor and to any Lender covered by any standard mortgagee clause or endorsement;
(vi)    provide that the insurer shall not have the option to restore the Property if Lessor elects to terminate this Lease in accordance with the terms hereof;
(vii)    be in amounts sufficient at all times to satisfy any coinsurance requirements thereof;
(viii)    except for workers’ compensation insurance referred to in Section 6.03(a)(iii) above and automobile liability insurance referred to in Section 6.03(a)(v) above, name Lessor and any Lessor Affiliate or Lender requested by Lessor, as an “additional insured” with respect to liability insurance, and as an “additional named insured” or “additional insured” with respect to real property and rental value insurance, as appropriate and as their interests may appear;
(ix)    be evidenced by delivery to Lessor and any Lender designated by Lessor of an Acord Form 28 for property, business interruption and boiler & machinery coverage (or any other form requested by Lessor) and an Acord Form 25 for commercial general liability, workers’ compensation and umbrella coverage (or any other form requested by Lessor); provided that in the event that either such form is no longer available, such evidence of insurance shall be in a form reasonably satisfactory to Lessor and any Lender designated by Lessor; and
(x)    be issued by insurance companies licensed to do business in the states where the Property is located and which are rated no less than A-X by Best’s Insurance Guide or are otherwise approved by Lessor.
(c)    Additional Obligations.  It is expressly understood and agreed that (i) if any insurance required hereunder, or any part thereof, shall expire, be withdrawn, become void by breach of any condition thereof by Lessee, or become void or in jeopardy by reason of the failure or impairment of the capital of any insurer, Lessee shall immediately obtain new or additional insurance reasonably satisfactory to Lessor and any Lender designated by Lessor; (ii) the minimum limits of insurance coverage set forth in this Section 6.03 shall not limit the liability of Lessee for its acts or omissions as provided in this Lease; (iii) Lessee shall procure policies for all insurance for periods of not less than one year and shall provide to Lessor and any servicer or Lender of Lessor certificates of insurance or, upon Lessor’s request, a redacted copy of insurance policies evidencing that insurance satisfying the requirements of this Lease is in effect at all times; (iv) Lessee shall pay as they become due all premiums for the insurance required by this Section 6.03; (v) in the event that Lessee fails to comply with any of the requirements set forth in this Section 6.03, within ten (10) Business Days of the giving of written notice by Lessor to Lessee, (A) Lessor shall be entitled to procure such insurance; and (B) any sums expended by Lessor in procuring such insurance shall be Additional Rental and shall be repaid by Lessee, together with interest thereon at the Default Rate, from the time of payment by Lessor until fully paid by Lessee within fifteen (15) days of written demand therefor by Lessor; and (vi) Lessee shall maintain all insurance policies required in this Section 6.03 not to be cancelled, invalidated or suspended on account of the conduct of Lessee, its officers, directors, managers, members, employees or agents, or anyone 

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acting for Lessee or any subtenant or other occupant of the Property, and shall comply with all policy conditions and warranties at all times to avoid a forfeiture of all or a part of any insurance payment.
(d)    Blanket Policies.  Notwithstanding anything to the contrary in this Section 6.03, any insurance which Lessee is required to obtain pursuant to this Section 6.03 may be carried under a “blanket” policy or policies covering other properties or liabilities of Lessee provided that such “blanket” policy or policies otherwise comply with the provisions of this Section 6.03.
Section 6.04.     Tax Impound.  Upon the occurrence of a monetary Event of Default and with respect to each Event of Default, in addition to any other remedies, Lessor may require Lessee to pay to Lessor on the first day of each month the amount that Lessor reasonably estimates will be necessary in order to accumulate with Lessor sufficient funds in an impound account (which shall not be deemed a trust fund) (the “Reserve”) for Lessor to pay any and all real estate taxes (“Real Estate Taxes”) for the Property for the ensuing twelve (12) months, or, if due sooner, Lessee shall pay the required amount immediately upon Lessor’s demand therefor.  Lessor shall, upon prior written request of Lessee, provide Lessee with evidence reasonably satisfactory to Lessee that payment of the Real Estate Taxes was made in a timely fashion.  In the event that the Reserve does not contain sufficient funds to timely pay any Real Estate Taxes, upon Lessor’s written notification thereof, Lessee shall, within five (5) Business Days of such notice, provide funds to Lessor in the amount of such deficiency.  Lessor shall pay or cause to be paid directly to the applicable taxing authorities any Real Estate Taxes then due and payable for which there are funds in the Reserve; provided, however, that in no event shall Lessor be obligated to pay any Real Estate Taxes in excess of the funds held in the Reserve, and Lessee shall remain liable for any and all Real Estate Taxes, including fines, penalties, interest or additional costs imposed by any taxing authority (unless incurred as a result of Lessor’s failure to timely pay Real Estate Taxes for which it had funds in the Reserve).  Lessee shall reasonably cooperate with Lessor in assuring that the Real Estate Taxes are timely paid.  Lessor may deposit all Reserve funds in accounts insured by any federal or state agency and may commingle such funds with other funds and accounts of Lessor.  Interest or other gains from such funds, if any, shall be the sole property of Lessor.  During the continuation of an Event of Default, and provided any Real Estate Taxes then due and payable have been paid, in addition to any other remedies, Lessor may apply all impounded funds in the Reserve against any sums due from Lessee to Lessor.  Lessor shall give to Lessee an annual accounting showing all credits and debits to and from such impounded funds received from Lessee.

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ARTICLE VII 
 
MAINTENANCE; ALTERATIONS
Section 7.01.     Condition of Property; Maintenance.  
(a)    Lessee hereby accepts the Property “AS IS” and “WHERE IS” with no representation or warranty of Lessor as to the condition thereof.  Unless necessitated by Lessor’s gross negligence or willful misconduct, Lessee shall, at its sole cost and expense, be responsible for (i) keeping all of the building, structures and improvements erected on the Property in good order and repair, free from actual or constructive waste; (ii) the repair or reconstruction of any building, structures or improvements erected on the Property damaged or destroyed by a Casualty; (iii) subject to Section 7.02, making all necessary structural, non-structural, exterior and interior repairs and replacements to any building, structures or improvements erected on the Property; (iv) operating, remodeling, updating and modernizing the Property in accordance with those standards adopted from time to time on a system‐wide basis for the Permitted Facility; (v) (A) ensuring that no party encroaches upon the Property, (B) protecting, defending (using counsel chosen by Lessee and approved by Lessor), indemnifying, releasing and holding the Indemnified Parties harmless from and against any and all claims and Losses arising out of or in any way relating to any encroachments and/or activities upon the Property caused by any Person; and (C) prosecuting any claims that Lessee seeks to bring against any Person relating to Lessee’s use and possession of the Property; and (vi) paying all operating costs of the Property in the ordinary course of business.  Lessee waives any right to require Lessor to maintain, repair or rebuild all or any part of the Property or make repairs at the expense of Lessor pursuant to any Legal Requirements at any time in effect, unless such maintenance, repair, or rebuilding is necessitated by Lessor’s gross negligence or willful misconduct.
(b)    Notwithstanding anything set forth in Section 7.01(a) above, Lessor shall pay the cost of any Required Capital Improvement during the last five (5) years of the Lease Term in excess of $50,000 cumulative on an annual basis (“Expenditure Cap”) up to the actual cost of such Required Capital Improvement (“Lessor Expenditure”).  Lessee shall reimburse Lessor such Lessor Expenditure through an increase in Base Annual Rental in an annual amount equal to the Lessor Expenditure divided by the Useful Life (as determined in Lessor’s reasonable discretion) of such Required Capital Improvement.  By way of example, if a roof replacement costs $200,000 and has a Useful Life of 20 years, Lessee shall reimburse Lessor through an increase in Base Annual Rental equal to $7,500 per year (1/20 x $150,000).  For purposes of this paragraph, a “Required Capital Improvement” shall mean a permanent structural change to the Property or the restoration of some aspect of the Property that will either enhance the Property’s overall value or increase its useful life and that is required to be completed by Lessee to remain in compliance with Section 7.01(a), as reasonably determined and agreed upon by Lessee and Lessor.  
Section 7.02.     Alterations and Improvements.  During the Lease Term, Lessee shall not alter the exterior, structural, plumbing or electrical elements of the Property in any manner without the consent of Lessor, which consent shall not be unreasonably withheld or conditioned; provided, however, Lessee may undertake nonstructural alterations to the Property, individually, costing less than $150,000 (such limit shall increase by 2.0% each Lease year) without Lessor’s prior written consent.  If Lessor’s consent is required hereunder and Lessor consents to the making of any such 

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alterations, the same shall be made by Lessee at Lessee’s sole expense by a licensed contractor and according to plans and specifications approved by Lessor and subject to such other conditions as Lessor shall reasonably require.  Any work at any time commenced by Lessee on the Property shall be prosecuted diligently to completion, shall be of good workmanship and materials and shall comply fully with all the terms of this Lease and all Legal Requirements.  Upon completion of any alterations individually costing $150,000 or more, Lessee shall promptly provide Lessor with evidence of full payment to all laborers and materialmen contributing to the alterations.  Additionally, upon completion of any alterations, Lessee shall promptly provide Lessor with (a) an architect’s certificate certifying the alterations to have been completed in conformity with the plans and specifications (if the alterations are of such a nature as would require the issuance of such a certificate from the architect); (b) a certificate of occupancy (if the alterations are of such a nature as would require the issuance of a certificate of occupancy); and (c) any other documents or information reasonably requested by Lessor.  Lessee shall keep the Property free from any liens arising out of any work performed on, or materials furnished to, the Property.  Lessee shall execute and file or record, as appropriate, a “Notice of Non‐Responsibility,” or any equivalent notice permitted under applicable Law in the state where the Property is located which provides that Lessor is not responsible for the payment of any costs or expenses relating to the additions or alterations.  Any addition to or alteration of the Property shall be deemed a part of the Property and belong to Lessor, and Lessee shall execute and deliver to Lessor such instruments as Lessor may reasonably require to evidence the ownership by Lessor of such addition or alteration. 
Section 7.03.     Encumbrances.  During the Lease Term, Lessor shall have the right to grant easements on, over, under and above the Property without the prior consent of Lessee (but with prior notice to Lessee), provided that such easements will not adversely interfere with Lessee’s use of the Property.  Lessee shall comply with and perform all obligations of Lessor under all easements, declarations, covenants, restrictions and other items of record now or hereafter encumbering the Property.  Without Lessor’s prior written consent, Lessee shall not grant any easements on, over, under or above the Property.
ARTICLE VIII
 
USE OF THE PROPERTY; COMPLIANCE
Section 8.01.     Use and “Go Dark” Rights.  
(a)    Use.  During the Lease Term, the Property shall be used solely for the operation of a Permitted Facility. Except during periods when the Property is untenantable due to Casualty or Condemnation (and provided that Lessee continues to strictly comply with the other terms and conditions of this Lease), Lessee shall at all times during the Lease Term occupy the Property and shall diligently operate its business on the Property.  In the event that Lessee shall change the use of the Property, only as may be expressly permitted herein or consented to by Lessor in writing, Lessee shall provide Lessor with written notice of any such change.

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(b)    “Go Dark” Right.  Notwithstanding any provision contained herein, Lessee shall not be in default under this Section 8.01 until Lessee fails to continue to materially operate its business at the Property (excluding instances of Casualty, Condemnation and Force Majeure) for more than one hundred eighty (180) consecutive days.  Thereafter, Lessee shall: (i) re-open the Property; or (ii) exercise Lessee’s assignment or subletting rights as permitted under this Lease.  Notwithstanding any provision contained in this Section 8.01(b), (A) Lessee shall provide Lessor with written notice at least ten (10) days prior to the Property “going dark,” and (B) the terms and provisions of this Lease and Lessee’s obligations hereunder shall remain in full force and effect during any “go dark” period, and (C) in no event shall Lessee “go dark” in any manner that would violate any Permitted Encumbrances in any material respect or give a third party any right to acquire title to the Property as a result of a Property “going dark.”
Section 8.02.     Compliance.  Lessee’s use and occupation of the Property, and the condition thereof, shall, at Lessee’s sole cost and expense, comply fully with all Legal Requirements and all restrictions, covenants and encumbrances of record, and any owner obligations under such Legal Requirements, or restrictions, covenants and encumbrances of record, with respect to the Property, in either event, the failure with which to comply could have a Material Adverse Effect.  Without in any way limiting the foregoing provisions, Lessee shall comply with all Legal Requirements relating to anti‐terrorism, trade embargos, economic sanctions, Anti-Money Laundering Laws, and the Americans with Disabilities Act of 1990, as such act may be amended from time to time, and all regulations promulgated thereunder, as it affects the Property now or hereafter in effect.  Lessee shall obtain, maintain and comply with all required licenses and permits, both governmental and private, to use and operate the Properties as Permitted Facilities.  Upon Lessor’s written request from time to time during the Lease Term, Lessee shall certify in writing to Lessor that Lessee’s representations, warranties and obligations under Section 5.05 and this Section 8.02 remain true and correct and have not been breached.  Lessee shall immediately notify Lessor in writing if any of such representations, warranties or covenants are no longer true or have been breached or if Lessee has a reasonable basis to believe that they may no longer be true or have been breached.  In connection with such an event, Lessee shall comply with all Legal Requirements and directives of Governmental Authorities and, at Lessor’s request, provide to Lessor copies of all notices, reports and other communications exchanged with, or received from, Governmental Authorities relating to such an event.  Lessee shall also reimburse Lessor for all Costs incurred by Lessor in evaluating the effect of such an event on the Property and this Lease, in obtaining any necessary license from Governmental Authorities as may be necessary for Lessor to enforce its rights under the Transaction Documents, and in complying with all Legal Requirements applicable to Lessor as the result of the existence of such an event and for any penalties or fines imposed upon Lessor as a result thereof.  Lessee will use its reasonable efforts to prevent any act or condition to exist on or about the Property that will materially increase any insurance rate thereon, except when such acts are required in the normal course of its business and Lessee shall pay for such increase. Lessee agrees that it will defend (using counsel chosen by Lessee and approved by Lessor), indemnify and hold harmless the Indemnified Parties from and against any and all Losses caused by, incurred or resulting from Lessee’s failure to comply with its obligations under this Section.

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Section 8.03.     Environmental.
(a)    Covenants.
(i)    Lessee covenants to Lessor during the Lease Term, subject to the limitations of subsection (ii) below, as follows:
(A)    All uses and operations on or of the Property, whether by Lessee or any other Person invited by Lessee, shall be in compliance with all Environmental Laws and permits issued pursuant thereto.
(B)    There shall be no Releases by Lessee or its invitees in, on, under or from the Property, except in Permitted Amounts.
(C)    There shall be no Hazardous Materials or Regulated Substances in, on or under the Property brought on by Lessee or its invitees, except in Permitted Amounts.  Above and below ground storage tanks shall be properly permitted and only used as permitted.
(D)    Lessee shall keep the Property or cause the Property to be kept free and clear of all Environmental Liens, whether due to any act or omission of Lessee or any other Person.
(E)    Lessee shall not act or fail to act or allow any other tenant, occupant, guest, customer or other user of the Property to act or fail to act in any way that (1) materially increases a risk to human health or the environment, (2)  poses an unreasonable or unacceptable risk of harm to any Person or the environment (whether on or off the Property), (3) has a Material Adverse Effect, (4) is contrary to any material requirement set forth in the insurance policies maintained by Lessee or Lessor, (5) constitutes a public or private nuisance or constitutes waste, (6) violates any covenant, condition, agreement or easement applicable to the Property, or (7) would result in any reopening or reconsideration of any prior investigation or causes a new investigation by a Governmental Authority having jurisdiction over the Property.
(F)    Lessee shall, at its sole cost and expense, reasonably cooperate in all activities pursuant to this Section 8.04, including but not limited to providing all relevant information and making knowledgeable persons available for interviews.
(ii)    Notwithstanding any provision of this Lease to the contrary, an Event of Default shall not be deemed to have occurred as a result of the failure of Lessee to satisfy any one or more of the covenants set forth in subsections (A) through (E) above provided that Lessee shall be in compliance with the requirements of any Governmental Authority with respect to the Remediation of any Release at the Property.

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(b)    Notification Requirements.  Lessee shall immediately notify Lessor in writing upon Lessee obtaining actual knowledge of (i) any Releases or Threatened Releases in, on, under or from the Property other than in Permitted Amounts, or migrating towards the Property; (ii) any non‐compliance with any Environmental Laws related in any way to the Property; (iii) any actual or potential Environmental Lien or activity use limitation; (iv) any required or proposed Remediation of environmental conditions relating to the Property required by applicable Governmental Authorities; and (v) any written or oral notice or other communication of which Lessee becomes aware from any source whatsoever (including but not limited to a Governmental Authority) relating in any way to Hazardous Materials, Regulated Substances or above or below ground storage tanks, or Remediation thereof at or on the Property, other than in Permitted Amounts, possible liability of any Person relating to the Property pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Section.  Lessee shall, upon Lessor’s written request, deliver to Lessor a certificate stating that Lessee is and has been in full compliance with all of the environmental representations, warranties and covenants in this Lease.  
(c)    Remediation.  Unless necessitated as a result of Lessor’s gross negligence or willful misconduct, Lessee shall, at its sole cost and expense, and without limiting any other provision of this Lease, effectuate any Remediation required by any Governmental Authority of any condition (including, but not limited to, a Release or Threatened Release) in, on, under or from the Property and take any other reasonable action deemed necessary by any Governmental Authority for protection of human health or the environment.  Should Lessee fail to undertake any required Remediation in accordance with the preceding sentence, Lessor, after written notice to Lessee and Lessee’s failure to immediately undertake such Remediation, shall be permitted to complete such Remediation, and all Costs incurred in connection therewith shall be paid by Lessee.  Any Cost so paid by Lessor, together with interest at the Default Rate, shall be deemed to be Additional Rental hereunder and shall be due within thirty (30) days of invoice from Lessee to Lessor.   
(d)    Indemnification.  Lessee shall, at its sole cost and expense, protect, defend (using counsel chosen by Lessee and approved by Lessor), indemnify, release and hold harmless each of the Indemnified Parties from and against any and all Losses, including, but not limited to, all Costs of Remediation (whether or not performed voluntarily), arising prior to the expiration or earlier termination of this Lease (including any holdover periods) and arising out of or in any way relating to any Environmental Laws, Hazardous Materials, Regulated Substances, above or below ground storage tanks, or other environmental matters concerning the Property.  It is expressly understood and agreed that Lessee’s obligations under this Section shall survive the expiration or earlier termination of this Lease for any reason.
(e)    Right of Entry.  In the event that Lessor has a reasonable basis to believe that a Release or a violation of any Environmental Law has occurred, Lessor and any other Person designated by Lessor, including but not limited to any receiver, any representative of a Governmental Authority, and any environmental consultant, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in Lessor’s reasonable discretion) and taking samples of soil, groundwater or other water, air, or building materials, and 

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conducting other invasive testing.  Lessee shall reasonably cooperate with and provide access to Lessor and any other Person designated by Lessor.  Any such assessment or investigation shall be at Lessee’s sole cost and expense, to the extent such investigation was necessitated as a result of a breach of Lessee’s obligations under this Section 8.03.
(f)    Survival.  The obligations of Lessee and the rights and remedies of Lessor under this Section 8.03 shall survive the termination, expiration and/or release of this Lease; provided, however, if Lessee provides Lessor with a Phase I environmental report with respect to any Property from a vendor approved by Lessor in its reasonable discretion, dated within thirty (30) days of the expiration or sooner termination of this Lease, which report is in all respects acceptable to Lessor (in its reasonable discretion), then in such event Lessee’s obligations under this Section 8.03 with respect to such Property shall only survive the expiration or earlier termination of this Lease for a period of seven (7) years.  
ARTICLE IX
 
ADDITIONAL COVENANTS
Section 9.01.     Performance at Lessee’s Expense.  Lessee acknowledges and confirms that Lessor may collect its reasonable third-party out-of-pocket attorneys’ fees, costs and expenses in connection with (a) any modification, amendment and termination of this Lease requested by Lessee (and not already contemplated in this Lease); (b) any release or substitution of Property requested by Lessee; (c) the procurement of consents, waivers and approvals with respect to the Property or any matter related to this Lease requested by Lessee; (d) the review of any assignment or sublease or proposed assignment or sublease or the preparation or review of any subordination or non‐disturbance agreement requested by Lessee; (e) the collection, maintenance and/or disbursement of reserves created under this Lease or the other Transaction Documents (following an Event of Default); and (f) inspections reasonably required to make certain determinations under this Lease or the other Transaction Documents following Lessor’s reasonable belief of a breach under this Lease or any other Transaction Documents.
Section 9.02.     Inspection.  Lessor and its authorized representatives shall have the right, at all reasonable times and upon giving reasonable prior notice (except in the event of an emergency, in which case no prior notice shall be required), to enter the Property or any part thereof and inspect the same.  Except in the event of an emergency, any entry by Lessor under this Lease shall be subject to and in compliance with Lessee’s security policies provided in writing to Lessor.  Lessee hereby waives any claim for damages for any injury or inconvenience to or interference with Lessee’s business, any loss of occupancy or quiet enjoyment of the Property and any other loss occasioned by such entry, but, subject to Section 10.01, excluding damages arising as a result of the gross negligence or willful misconduct of Lessor.

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Section 9.03.     Financial Information.  
(a)    Financial Reporting. From and after the Effective Date and unless or until Guarantor goes private, and subject to Section 9.03(c) below, within fourteen (14) Business Days from the date Guarantor files its annual Form 10-K, Lessee shall deliver to Lessor copies of Lessee’s income statement and balance sheet for the prior fiscal year.
(b)    Financial Reporting if Guarantor Goes Private.  In the event that Guarantor ever goes private, and subject to Section 9.03(c) below, then within forty five (45) days after the end of each fiscal quarter and within one hundred twenty (120) days after the end of each fiscal year of Lessee and Guarantor, Lessee shall deliver to Lessor (i) complete consolidated financial statements for Guarantor and separate financial statements for Lessee, including a balance sheet, profit and loss statement, statement of stockholders’ equity and statement of cash flows and all other related schedules for the fiscal period then ended, such statements to detail separately interest expense, income taxes, non-cash expenses, non-recurring expenses, operating lease expense and current portion of long-term debt – capital leases; and (ii) income statements for the business at the Property.  All such financial statements shall be prepared in accordance with GAAP, and shall be certified to be accurate and complete by an officer or director of Lessee and Guarantor.  In the event that Lessee’s business at the Property is ordinarily consolidated with other business for financial statements purposes, a separate profit and loss statement shall be provided showing separately the sales, profits and losses pertaining to the Property with interest expense, income taxes, non-cash expenses, non-recurring expenses and operating lease expense (rent), with the basis for allocation of overhead or other charges being clearly set forth therein.  The financial statements delivered to Lessor pursuant to this paragraph need not be audited, but Lessee shall deliver to Lessor copies of any audited financial statements of the Lessee Reporting Entities which may be prepared, as soon as they are available.
(c)    Confidentiality.  Notwithstanding anything to the contrary above or elsewhere in this Lease, Lessor hereby agrees, for itself and its Affiliates, to maintain confidentiality and not disclose Lessee’s or Guarantor’s financial information (but excluding matters of public record or matters generally known to the public) to third parties except (i) as may be required for reporting to any Governmental Authority or otherwise required by Law, (ii) in connection with a Securitization or related transaction, (iii) to a Lender, or to Lessor’s employees, contractors, attorneys, accountants and other Persons on a “need to know” basis (“Lessor Parties”), or to a prospective purchaser of a Property so long as such Lessor Parties and any prospective purchaser are aware of, and agree to comply with, the confidentiality provisions of this Section, or (iv) with Lessee’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 9.04.     OFAC Laws.  Upon receipt of notice or upon actual knowledge thereof, Lessee shall immediately notify Lessor in writing if any Person owning (directly or indirectly) any interest in any of the Lessee Entities, or any director, officer, shareholder, member, manager or partner of any of such holders is a Person whose property or interests are subject to being blocked under any of the OFAC Laws, or is otherwise in violation of any of the OFAC Laws, or is under investigation by any Governmental Authority for, or has been charged with, or convicted of, drug trafficking, terrorist‐related activities or any violation of the Anti‐Money Laundering Laws, has been assessed civil penalties under these or related Laws, or has had funds seized or forfeited in an action under these or related Laws; provided, however, that the covenant in this Section 9.04 shall 

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not apply to any Person to the extent such Person’s interest is in or through a U.S. Publicly Traded Entity.
Section 9.05.     Estoppel Certificate.  At any time, and from time to time, Lessee shall, promptly and in no event later than ten (10) Business Days after a request from Lessor or any Lender or mortgagee of Lessor, execute, acknowledge and deliver to Lessor or such Lender or mortgagee, as the case may be, a certificate in the form supplied by Lessor, certifying: (a) that Lessee has accepted the Property; (b) that this Lease is in full force and effect and has not been modified (or if modified, setting forth all modifications), or, if this Lease is not in full force and effect, the certificate shall so specify the reasons therefor; (c) the commencement and expiration dates of the Lease Term; (d) the date to which the Rentals have been paid under this Lease and the amount thereof then payable; (e) whether there are then any existing defaults by Lessor in the performance of its obligations under this Lease, and, if there are any such defaults, specifying the nature and extent thereof; (f) that no notice has been received by Lessee of any default under this Lease which has not been cured, except as to defaults specified in the certificate; (g) the capacity of the Person executing such certificate, and that such Person is duly authorized to execute the same on behalf of Lessee; (h) that neither Lessor nor any Lender or mortgagee has actual involvement in the management or control of decision making related to the operational aspects or the day‐to‐day operation of the Property, including any handling or disposal of Hazardous Materials or Regulated Substances; and (i) any other information reasonably requested by Lessor or any Lender or mortgagee, as the case may be.  
ARTICLE X
 
RELEASE AND INDEMNIFICATION
Section 10.01.     RELEASE AND INDEMNIFICATION.  LESSEE AGREES TO USE AND OCCUPY THE PROPERTY AT ITS OWN RISK AND HEREBY RELEASES LESSOR AND LESSOR’S AGENTS AND EMPLOYEES FROM ALL CLAIMS FOR ANY DAMAGE OR INJURY (SO LONG AS SUCH DID NOT RESULT FROM LESSOR’S OR LESSOR’S AGENTS’ OR EMPLOYEES’ GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) TO THE FULL EXTENT PERMITTED BY LAW.  LESSEE AGREES THAT LESSOR SHALL NOT BE RESPONSIBLE OR LIABLE TO LESSEE OR LESSEE’S EMPLOYEES, AGENTS, CUSTOMERS, LICENSEES OR INVITEES FOR BODILY INJURY, PERSONAL INJURY OR PROPERTY DAMAGE OCCASIONED BY THE ACTS OR OMISSIONS OF ANY OTHER LESSEE OR ANY OTHER PERSON (EXCEPT FOR LESSOR’S AND LESSOR’S AGENTS AND EMPLOYEES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).  LESSEE AGREES THAT ANY EMPLOYEE OR AGENT TO WHOM THE PROPERTY OR ANY PART THEREOF SHALL BE ENTRUSTED BY OR ON BEHALF OF LESSEE SHALL BE ACTING AS LESSEE’S AGENT WITH RESPECT TO THE PROPERTY OR ANY PART THEREOF, AND NEITHER LESSOR NOR LESSOR’S AGENTS, EMPLOYEES OR CONTRACTORS (“LESSOR PARTIES”) SHALL BE LIABLE FOR ANY LOSS OF OR DAMAGE TO THE PROPERTY OR ANY PART THEREOF UNLESS SUCH IS CAUSED BY LESSOR PARTIES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  LESSEE SHALL DEFEND (USING COUNSEL CHOSEN BY LESSEE AND APPROVED BY LESSOR), INDEMNIFY, PROTECT, AND HOLD HARMLESS EACH OF THE INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES (EXCLUDING LOSSES SUFFERED BY AN INDEMNIFIED PARTY ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH 

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INDEMNIFIED PARTY) CAUSED BY, INCURRED OR RESULTING FROM LESSEE’S OPERATIONS OR BY LESSEE’S USE AND OCCUPANCY OF THE PROPERTY, WHETHER RELATING TO ITS ORIGINAL DESIGN OR CONSTRUCTION, LATENT DEFECTS, ALTERATION, MAINTENANCE, USE BY LESSEE OR ANY PERSON THEREON, SUPERVISION OR OTHERWISE, OR FROM ANY BREACH OF, DEFAULT UNDER, OR FAILURE TO PERFORM, ANY TERM OR PROVISION OF THIS LEASE BY LESSEE, ITS OFFICERS, EMPLOYEES, AGENTS OR OTHER PERSONS.  IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT LESSEE’S OBLIGATIONS UNDER THIS SECTION SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE FOR ANY REASON WHATSOEVER.  
FOR PURPOSES OF THIS LEASE, THE TERM “GROSS NEGLIGENCE” SHALL NOT INCLUDE GROSS NEGLIGENCE IMPUTED AS A MATTER OF LAW TO ANY OF THE INDEMNIFIED PARTIES SOLELY BY REASON OF LESSOR’S INTEREST IN THE PROPERTY OR LESSOR’S FAILURE TO ACT IN RESPECT OF MATTERS WHICH ARE OR WERE THE OBLIGATION OF LESSEE UNDER THIS LEASE. 

ARTICLE XI
 
CONDEMNATION AND CASUALTY
Section 11.01.     Notification.  Lessee and Lessor shall promptly give the other party written notice of (a) any Condemnation of the Property, (b) the commencement of any proceedings or negotiations which might result in a Condemnation of the Property, and (c) any Casualty to the Property or any part thereof.  Such notice shall provide a general description of the nature and extent of such Condemnation, proceedings, negotiations or Casualty, and shall include copies of any documents or notices received in connection therewith. Thereafter, Lessee shall promptly send Lessor copies of all notices, correspondence and pleadings relating to any such Condemnation, proceedings, negotiations or Casualty.
Section 11.02.     Total Condemnation.  In the event of a Condemnation of all or substantially all of the Property, and if as a result of such Condemnation: (i) access to the Property to and from the publicly dedicated roads adjacent to the Property as of the Effective Date is permanently and materially impaired such that Lessee no longer has access to such dedicated road; (ii) there is insufficient parking to operate the Property as a Permitted Facility under applicable Laws; or (iii) the Condemnation includes a portion of the building such that the remaining portion is unsuitable for use as a Permitted Facility, as determined by Lessee in the exercise of good faith business judgment (and Lessee provides to Lessor an officer’s certificate executed by an officer of Lessee certifying to the same) (each such event, a “Total Condemnation”), then, in such event:
(a)    Termination of Lease.  On the date of the Total Condemnation, all obligations of either party hereunder shall cease; provided, however, that Lessee’s obligations to the Indemnified Parties under any indemnification provisions of this Lease and Lessee’s obligation to pay Rental and all other Monetary Obligations (whether payable to Lessor or a third party) accruing under this Lease prior to the date of termination shall survive such termination.  If the date of such Total Condemnation is other than the first day of a month, the Base Monthly Rental for the month in which such Total Condemnation occurs shall be apportioned based on the date of the Total Condemnation.

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(b)    Net Award.  Subject to Section 11.07 below, Lessor shall be entitled to receive the entire Net Award in connection with a Total Condemnation without deduction for any estate vested in Lessee by this Lease, and Lessee hereby expressly assigns to Lessor all of its right, title and interest in and to every such Net Award and agrees that Lessee shall not be entitled to any Net Award or other payment for the value of Lessee’s leasehold interest in this Lease.
Section 11.03.     Partial Condemnation or Casualty.  In the event of a Condemnation which is not a Total Condemnation (each such event, a “Partial Condemnation”), or in the event of a Casualty:
(a)    Net Awards.  Subject to Section 11.07 below, all Net Awards shall be paid to Lessor and, as applicable, made available to Lessee pursuant to Section 11.03(b)(ii) below.
(b)    Continuance of Lease. This Lease shall continue in full force and effect upon the following terms:
(i)    All Rental and other Monetary Obligations due under this Lease shall continue unabated (provided, however, that the parties acknowledge that business interruption insurance proceeds, including Rental Value Insurance proceeds, payable to and received by Lessor shall be applied towards Lessee’s Rental obligations).
(ii)    Lessee shall promptly commence and diligently prosecute restoration of the Property to the same condition, as nearly as practicable, as prior to the Partial Condemnation or Casualty as approved by Lessor.  Subject to the terms and provisions of the Mortgage and upon the written request of Lessee (accompanied by evidence reasonably satisfactory to Lessor that such amount has been paid or is due and payable and is properly part of such costs, and that Lessee has complied with the terms of Section 7.02 in connection with the restoration), Lessor shall promptly make available in installments, subject to reasonable conditions for disbursement imposed by Lessor, an amount up to but not exceeding the amount of any Net Award received by Lessor with respect to such Partial Condemnation or Casualty.  Prior to the disbursement of any portion of the Net Award with respect to a Casualty, Lessee shall provide evidence reasonably satisfactory to Lessor of the payment of restoration expenses by Lessee up to the amount of the insurance deductible applicable to such Casualty.  Lessor shall be entitled to keep any portion of the Net Award which may be in excess of the cost of restoration, and Lessee shall bear all additional Costs of such restoration in excess of the Net Award.

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Section 11.04.     Temporary Taking.  In the event of a Condemnation of all or any part of the Property for a temporary use (a “Temporary Taking”), this Lease shall remain in full force and effect without any reduction of Base Annual Rental, Additional Rental or any other Monetary Obligation payable hereunder.  Except as provided below, Lessee shall be entitled to the entire Net Award for a Temporary Taking, unless the period of occupation and use by the condemning authorities shall extend beyond the date of expiration of this Lease, in which event the Net Award made for such Temporary Taking shall be apportioned between Lessor and Lessee as of the date of such expiration.  At the termination of any such Temporary Taking, Lessee will, at its own cost and expense and pursuant to the provisions of Section 7.02, promptly commence and complete restoration of the Property.
Section 11.05.     Adjustment of Losses.  Any loss under any property damage insurance required to be maintained by Lessee shall be adjusted by Lessor and Lessee.  Any Net Award relating to a Total Condemnation or a Partial Condemnation shall be adjusted by Lessor or, at Lessor’s election, Lessee.  Notwithstanding the foregoing or any other provisions of this Section 11.05 to the contrary, if at the time of any Condemnation or any Casualty or at any time thereafter an Event of Default shall have occurred and be continuing, Lessor is hereby authorized and empowered but shall not be obligated, in the name and on behalf of Lessee and otherwise, to file and prosecute Lessee’s claim, if any, for a Net Award on account of such Condemnation or such Casualty and to collect such Net Award and apply the same to the curing of such Event of Default and any other then existing Event of Default under this Lease and/or to the payment of any amounts owed by Lessee to Lessor under this Lease, in such order, priority and proportions as Lessor in its discretion shall deem proper.
Section 11.06.     Lessee Obligation in Event of Casualty.  During all periods of time following a Casualty, Lessee shall take reasonable steps to ensure that the Property is secure and does not pose any risk of harm to any adjoining property and Persons (including owners or occupants of such adjoining property).
Section 11.07.     Lessee Awards and Payments.  Notwithstanding any provision contained in this Article XI, Lessee shall be entitled to claim and receive any award or payment from the condemning authority expressly granted for the taking of any personal property owned by Lessee (including the Personalty), any insurance proceeds with respect to any personal property owned by Lessee (including the Personalty), the interruption of its business and moving expenses (subject, however, to the provisions of Section 6.03(a)(iv) above), but only if such claim or award does not adversely affect or interfere with the prosecution of Lessor’s claim for the Condemnation or Casualty, or otherwise reduce the amount recoverable by Lessor for the Condemnation or Casualty.
ARTICLE XII
 
DEFAULT, CONDITIONAL LIMITATIONS, 
REMEDIES AND MEASURE OF DAMAGES
Section 12.01.     Event of Default.  Each of the following shall be an event of default by Lessee under this Lease (each, an “Event of Default”):

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(a)    if any representation or warranty of Lessee set forth in this Lease is false in any material respect when made, or if Lessee renders any materially false statement or account when made and such breach is not remedied within thirty (30) days of written notice thereof;
(b)    if any Rental or other Monetary Obligation due under this Lease is not paid within three (3) Business Days after written notice of failure to pay the same; provided, however, that Lessor shall only be obligated to provide such written notice and the three (3) Business Day cure period shall only be available once in any twelve (12) month period; provided, further, that any delay in the payment of Rental as a result of a technical error in the wiring and/or automated clearinghouse process shall not constitute an Event of Default hereunder so long as the same is corrected within one (1) Business Day of the date Lessee receives notice thereof; 
(c)    if Lessee fails to pay, prior to delinquency, any taxes, assessments or other charges the failure of which to pay will result in the imposition of a lien against the Property;
(d)    subject to Lessee’s rights under Section 8.01(b), if Lessee vacates or abandons the Property;
(e)    if there is an Insolvency Event affecting Lessee or the Guarantor;
(f)    if Lessee fails to observe or perform any of the other covenants, conditions or obligations of Lessee in this Lease; provided, however, if any such failure does not involve the payment of any Monetary Obligation, is not willful or intentional, does not place the Property or any rights or property of Lessor in immediate jeopardy, and is within the reasonable power of Lessee to promptly cure, all as determined by Lessor in its reasonable discretion, then such failure shall not constitute an Event of Default hereunder, unless otherwise expressly provided herein, unless and until Lessor shall have given Lessee written notice thereof and a period of thirty (30) days shall have elapsed, during which period Lessee may correct or cure such failure, upon failure of which an Event of Default shall be deemed to have occurred hereunder without further notice or demand of any kind being required.  If such failure cannot reasonably be cured within such thirty (30)‐day period, as determined by Lessor in its reasonable discretion, and Lessee is diligently pursuing a cure of such failure, then Lessee shall have a reasonable period to cure such failure beyond such thirty (30)‐day period, which shall in no event exceed ninety (90) days after receiving notice of such failure from Lessor.  If Lessee shall fail to correct or cure such failure within such ninety (90)‐day period, an Event of Default shall be deemed to have occurred hereunder without further notice or demand of any kind being required;
(g)    if a final, nonappealable judgment is rendered by a court against Lessee which has a Material Adverse Effect, and is not discharged or provision made for such discharge within ninety (90) days from the date of entry thereof;
(h)    if Lessee shall be liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution; 
(i)    if the estate or interest of Lessee in the Property shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such process shall not be vacated or discharged within ninety (90) days after it is made; or

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(j)    if there is an “Event of Default” or other breach or default by Lessee or the Guarantor under any of the other Transaction Documents or any Other Agreement , after the passage of all applicable notice and cure or grace periods; provided, however, in the event that this Lease has been the subject of a Securitization and any Other Agreement has not been the subject of the same Securitization or any series relating to such Securitization, an “Event of Default” under such Other Agreement shall not constitute an Event of Default under this Lease.
Section 12.02.     Remedies.  Upon the occurrence of an Event of Default, with or without notice or demand, except as otherwise expressly provided herein or such other notice as may be required by statute and cannot be waived by Lessee, Lessor shall be entitled to exercise, at its option, concurrently, successively, or in any combination, all remedies available at Law or in equity, including, without limitation, any one or more of the following:
(a)    to terminate this Lease, whereupon Lessee’s right to possession of the Property shall cease and this Lease, except as to Lessee’s liability, shall be terminated;
(b)    to the extent not prohibited by applicable Law, to (i) re-enter and take possession of the Property (or any part thereof), any or all personal property (subject to any rights of Lessee’s Institutional Lenders) or fixtures of Lessee upon the Property and, to the extent permissible, permits and other rights or privileges of Lessee pertaining to the use and operation of the Property, and (ii) expel Lessee and those claiming under or through Lessee, without being deemed guilty in any manner of trespass or becoming liable for any loss or damage resulting therefrom, without resort to legal or judicial process, procedure or action.  No notice from Lessor hereunder or under a forcible entry and detainer statute or similar Law shall constitute an election by Lessor to terminate this Lease unless such notice specifically so states.  If Lessee shall, after default, voluntarily give up possession of the Property to Lessor, deliver to Lessor or its agents the keys to the Property, or both, such actions shall be deemed to be in compliance with Lessor’s rights and the acceptance thereof by Lessor or its agents shall not be deemed to constitute a termination of the Lease.  Lessor reserves the right following any re‐entry and/or reletting to exercise its right to terminate this Lease by giving Lessee written notice thereof, in which event this Lease will terminate;
(c)    to bring an action against Lessee for any damages sustained by Lessor or any equitable relief available to Lessor and to the extent not prohibited by applicable Law, to seize all personal property (subject to any rights of Lessee’s Institutional Lenders) or fixtures upon the Property which Lessee owns or in which it has an interest, in which Lessor shall have a landlord’s lien and/or security interest, and to dispose thereof in accordance with the Laws prevailing at the time and place of such seizure or to remove all or any portion of such property and cause the same to be stored in a public warehouse or elsewhere at Lessee’s sole expense, without becoming liable for any loss or damage resulting therefrom and without resorting to legal or judicial process, procedure or action;

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(d)    to relet the Property or any part thereof for such term or terms (including a term which extends beyond the original Lease Term, provided that the portion of such term that extends beyond the original Lease Term (or then applicable Extension Term) shall be governed by a direct lease agreement between Lessor and new lessee, with no obligations from Lessee)), at such rentals and upon such other terms as Lessor, in its reasonable discretion, may determine, with all proceeds received from such reletting being applied to the Rental and other Monetary Obligations due from Lessee in such order as Lessor may, in its reasonable discretion, determine, which other Monetary Obligations include, without limitation, all repossession costs, brokerage commissions, reasonable attorneys’ fees and expenses,  alteration, remodeling and repair costs and expenses of preparing for such reletting.  Except to the extent required by applicable Law, Lessor shall have no obligation to relet the Property or any part thereof and shall in no event be liable for refusal or failure to relet the Property or any part thereof, or, in the event of any such reletting, for reasonable refusal or failure to collect any rent due upon such reletting, and no such refusal or failure shall operate to relieve Lessee of any liability under this Lease or otherwise to affect any such liability.  Lessor reserves the right following any re‐entry and/or reletting to exercise its right to terminate this Lease by giving Lessee written notice thereof, in which event this Lease will terminate as specified in said notice;
(e)    except to the extent prohibited by applicable Law to accelerate and recover from Lessee all Rental and other Monetary Obligations due and owing and scheduled to become due and owing under this Lease both before and after the date of such breach for the entire original scheduled Lease Term;
(f)    to recover from Lessee all Costs paid or incurred by Lessor as a result of such breach, regardless of whether or not legal proceedings are actually commenced;
(g)    to immediately or at any time thereafter, and with or without notice, at Lessor’s sole option but without any obligation to do so, correct such breach or default and charge Lessee all Costs incurred by Lessor therein.  Any sum or sums so paid by Lessor, together with interest at the Default Rate, shall be deemed to be Additional Rental hereunder and shall be promptly due from Lessee to Lessor upon delivery of an invoice from Lessor to Lessee.  Any such acts by Lessor in correcting Lessee’s breaches or defaults hereunder shall not be deemed to cure said breaches or defaults or constitute any waiver of Lessor’s right to exercise any or all remedies set forth herein;
(h)    to immediately or at any time thereafter, and with or without notice, except as required herein, set off any money of Lessee held by Lessor under this Lease or any other Transaction Document or any Other Agreement against any sum owing by Lessee hereunder;
(i)    to use the Security Deposit as described in Section 4.09 hereof;
(j)    without limiting the generality of the foregoing or limiting in any way the rights of Lessor under this Lease or otherwise under applicable Laws, at any time after the occurrence, and during the continuance, of an Event of Default, Lessor shall be entitled to apply for and have a receiver appointed under applicable Law by a court of competent jurisdiction (by ex parte motion for appointment without notice) in any action taken by Lessor to enforce its rights and remedies hereunder in order to protect and preserve Lessor’s interest under this Lease or in the Property 

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and the Personalty (subject to any rights of Lessee’s Institutional Lenders), and in connection therewith, Lessee shall reasonably cooperate with Lessor; and/or
(k)    to seek any equitable relief available to Lessor, including, without limitation, the right of specific performance.
Section 12.03.     Cumulative Remedies.  All powers and remedies given by Section 12.02 to Lessor, subject to applicable Law, shall be cumulative and not exclusive of one another or of any other right or remedy or of any other powers and remedies available to Lessor under this Lease, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements of Lessee contained in this Lease, and no delay or omission of Lessor to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any other or subsequent Event of Default or impair any rights or remedies consequent thereto.  Every power and remedy given by this Section or by Law to Lessor may be exercised from time to time, and as often as may be deemed expedient, by Lessor, subject at all times to Lessor’s right in its sole judgment to discontinue any work commenced by Lessor or change any course of action undertaken by Lessor.
ARTICLE XIII
 
MORTGAGE, SUBORDINATION AND ATTORNMENT
Section 13.01.     No Liens.  Lessor’s interest in this Lease and/or the Property shall not be subordinate to any liens or encumbrances placed upon the Property by or resulting from any act of Lessee, and nothing herein contained shall be construed to require such subordination by Lessor.  NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF THE PROPERTY OR LESSEE’S LEASEHOLD INTEREST THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE VOID.
Section 13.02.     Subordination.  This Lease at all times shall automatically be subordinate to the lien of any and all ground leases and Mortgages now or hereafter placed upon the Property by Lessor, and Lessee covenants and agrees to execute and deliver, upon demand, such further instruments subordinating this Lease to the lien of any or all such ground leases and Mortgages as shall be desired by Lessor, or any present or proposed mortgagees under trust deeds, upon the condition that Lessee shall have the right to remain in possession of the Property under the terms of this Lease, notwithstanding any default in any or all such ground leases or Mortgages, or after the foreclosure of such Mortgages, so long as no Event of Default shall have occurred and be continuing.  
Section 13.03.     Attornment.  In the event any purchaser or assignee of any Lender at a foreclosure sale acquires title to the  Property, or in the event that any Lender or any purchaser or assignee otherwise succeeds to the rights of Lessor as landlord under this Lease, Lessee shall attorn to Lender or such purchaser or assignee, as the case may be (a “Successor Lessor”), and recognize the Successor Lessor as lessor under this Lease, and, subject to the provisions of this Article XIII, this Lease shall continue in full force and effect as a direct lease between the Successor Lessor and Lessee, provided that the Successor Lessor shall only be liable for any obligations of 

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Lessor under this Lease which accrue after the date that such Successor Lessor acquires title.  The foregoing provision shall be self‐operative and effective without the execution of any further instruments. 
Section 13.04.     Execution of Additional Documents.  Although the provisions in this Article XIII shall be self‐operative and no future instrument of subordination shall be required, upon request by Lessor, Lessee shall execute and deliver such additional reasonable instruments as may be reasonably required for such purposes.
Section 13.05.     Notice to Lender.  Lessee shall give written notice to any Lender having a recorded lien upon the Property or any part thereof of which Lessee has been notified of any breach or default by Lessor of any of its obligations under this Lease and give such Lender at least sixty (60) days beyond any notice period to which Lessor might be entitled to cure such default before Lessee may exercise any remedy with respect thereto.
ARTICLE XIV
 
ASSIGNMENT
Section 14.01.     Assignment by Lessor.  As a material inducement to Lessor’s willingness to enter into the transactions contemplated by this Lease (the “Transaction”) and the other Transaction Documents, Lessee hereby agrees that Lessor may, from time to time and at any time and without the consent of Lessee but subject to Lessee’s rights under Article XVIII, engage in all or any combination of the following, or enter into agreements in connection with any of the following or in accordance with requirements that may be imposed by applicable securities, tax or other Laws: (a) the sale, assignment, grant, conveyance, transfer, financing, re‐financing, purchase or re‐acquisition of the Property, this Lease or any other Transaction Document, Lessor’s right, title and interest in this Lease or any other Transaction Document, the servicing rights with respect to any of the foregoing, or participations in any of the foregoing; or (b) a Securitization and related transactions.  Without in any way limiting the foregoing, the parties acknowledge and agree that Lessor, in its sole discretion, may assign this Lease or any interest herein to another Person in order to maintain Lessor’s or any of its Affiliates’ status as a REIT.  In the event of any such sale or assignment other than a security assignment, Lessee shall attorn to such purchaser or assignee (so long as Lessor and such purchaser or assignee notify Lessee in writing of such transfer and such purchaser or assignee expressly assumes in writing the obligations of Lessor hereunder from and after the date of such assignment).  At the request of Lessor, Lessee will execute such documents confirming the sale, assignment or other transfer and such other agreements as Lessor may reasonably request, provided that the same do not increase the liabilities and obligations of Lessee hereunder.  Lessor shall be relieved, from and after the date of such transfer or conveyance, of liability for the performance of any obligation of Lessor contained herein, except for obligations or liabilities accrued prior to such assignment or sale.
Section 14.02.     Assignment by Lessee.  
(a)    Lessee acknowledges that Lessor has relied both on the business experience and creditworthiness of Lessee and upon the particular purposes for which Lessee intends to use the Property in entering into this Lease.  Lessee shall not assign, transfer, convey, pledge or mortgage this Lease or any interest herein or any interest in Lessee, whether by operation 

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of Law or otherwise, without the prior written consent of Lessor.  At the time of any assignment of this Lease which is approved by Lessor, the assignee shall assume all of the obligations of Lessee under this Lease pursuant to a written assumption agreement in form and substance reasonably acceptable to Lessor.  Such assignment of this Lease pursuant to this Section 14.02 shall not relieve Lessee of its obligations respecting this Lease unless otherwise agreed to by Lessor.  Any assignment, transfer, conveyance, pledge or mortgage in violation of this Section 14.02 shall be voidable at the sole option of Lessor.  Any consent to an assignment given by Lessor hereunder shall not be deemed a consent to any subsequent assignment.  
(b)    Notwithstanding anything to the contrary contained in this Section 14.02 and provided that no Event of Default has occurred and is continuing at the time of the proposed assignment or other transfer, and provided further that any assignee agrees to assume all of Lessee’s obligations under this Lease, Lessee shall have the right to assign or otherwise transfer all, but not less than all, of its interest in, to and under this Lease without Lessor’s consent to (i) any entity which purchases or otherwise acquires all or substantially all of the assets of Lessee in a bona fide sale for fair market value, or (ii) a Qualified Operator (each, a “Permitted Transfer”).  A “Qualified Operator” shall mean a Person who (x) for two (2) consecutive years immediately prior to the date of assignment or transfer and (y) on a proforma basis following the consummation of such assignment or transfer (all as determined by Lessor upon review of financial statements provided by the assignee prior to the proposed lease assignment and in a form reasonably satisfactory to Lessor), (A) has a CFCCR (defined below) of at least 1.50x; (B) generates EBITDA (defined below) of at least $60,000,000, and (C) has a Lease Adjusted Leverage (defined below) of no more than 6.50x; provided, however, that Lessee may satisfy the foregoing conditions of a Qualified Operator by providing, or causing to be provided, a guaranty agreement, in form and substance reasonably acceptable to and approved by Lessor, in writing, which guaranty shall be from an entity that meets the requirements of (A), (B) and (C) set forth in this Section 14.02.  In the event that Lessee effects a Permitted Transfer pursuant to clause (ii), Lessee shall be released from any liability arising under this Lease from and after the date of such assignment and Guarantor shall be released from any liability arising under the Guaranty from and after the date of such assignment.  In the event that Lessee effects a Permitted Transfer pursuant to clause (i), Lessee shall not be released from liability under this Lease nor shall Guarantor be released from liability under the Guaranty. 
For purposes hereof:
(i)    “CFCCR” means with respect to the twelve month period of time immediately preceding the date of determination, the ratio calculated for such period of time, each as determined in accordance with GAAP, of (i) the sum of Consolidated Net Income (excluding non-cash income), Depreciation and Amortization, Interest Expense, income taxes, Operating Lease Expense and non-cash expenses to (ii) the sum of Operating Lease Expense (excluding non-cash rent adjustments), scheduled principal payments of long term Debt, scheduled maturities of all Capital Leases, dividends and Interest Expense (excluding non-cash interest expense and amortization of non-cash financing expenses). For purposes of calculating the CFCCR, the following terms shall be defined as set forth below:

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(A)    “Capital Lease” shall mean all leases of any property, whether real, personal or mixed, by a Person, which leases would, in conformity with GAAP, be required to be accounted for as a capital lease on the balance sheet of such Person.  The term “Capital Lease” shall not include any operating lease.
(B)    “Consolidated Net Income” shall mean with respect to the period of determination, the net income or net loss of a Person.  In determining the amount of Consolidated Net Income, (i) adjustments shall be made for nonrecurring gains and losses or non-cash items allocable to the period of determination, (ii) deductions shall be made for, among other things, Depreciation and Amortization, Interest Expense, Operating Lease Expense, and (iii) no deductions shall be made for income taxes or charges equivalent to income taxes allocable to the period of determination, as determined in accordance with GAAP.
(C)    “Debt” shall mean with respect to a Person, and for the period of determination (i) indebtedness for borrowed money, (ii) subject to the limitation set forth in sub item (iv) below, obligations evidenced by bonds, indentures, notes or similar instruments, (iii) obligations under leases which should be, in accordance with GAAP, recorded as Capital Leases, and (iv) obligations under direct or indirect guarantees in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, except for guaranty obligations of such Person, which, in conformity with GAAP, are not included on the balance sheet of such Person.
(D)    “Depreciation and Amortization” shall mean the depreciation and amortization accruing during any period of determination with respect to a Person, as determined in accordance with GAAP.
(E)    “Interest Expense” shall mean for any period of determination, the sum of all interest accrued or which should be accrued in respect of all Debt of a Person, as determined in accordance with GAAP.
(F)    “Operating Lease Expense” shall mean the sum of all payments and expenses incurred by a Person, under any operating leases during the period of determination, as determined in accordance with GAAP.
(ii)    “EBITDA” means for the twelve (12) month period ending on the date of determination, the sum of a Person’s net income (loss) for such period plus, in each case to the extent previously deducted in calculating net income (loss): (A) income taxes, (B) interest payments on all of its debt obligations (including any borrowings under short term credit facilities), (C) all non-cash charges including depreciation and amortization, and (D) Non-Recurring Items (defined below).

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(iii)    “EBITDAR” means the sum of a Person’s EBITDA and its total land and building rent for the twelve (12) month period ending on the date of determination.
(iv)    “Lease Adjusted Leverage” means with respect to a Person, as of any applicable date, the sum of (A) ten (10) times such Person’s total land and building rent for the twelve (12) month period ending on the date of determination, and (B) the total current balance of such Person’s total debt obligations (including any borrowings under short term credit facilities) on such date, divided by EBITDAR.
(v)    “Non-Recurring Items” shall mean with respect to a Person, items of the sum (whether positive or negative) of revenue minus expenses that, in the judgment of Lessor, are unusual in nature, occur infrequently and are not representative of the ongoing or future earnings or expenses of such Person.
Section 14.03.     No Subletting.  Lessee shall not sublet any or all of the Property without the prior written consent of Lessor, which shall not be unreasonably withheld, conditioned, or delayed; provided, however, that without Lessor’s consent, Lessee may sublet any or all of the Properties (each such sublease described in this Section 14.03, individually, a “Permitted Sublease” and collectively, “Permitted Subleases”, and such subtenant thereunder, “Subtenant”) so long as each Permitted Sublease contains the following provisions: (a) the Permitted Sublease is subject and subordinate to this Lease; (b) the Permitted Sublease shall not contain any terms inconsistent with this Lease (or if so, the terms of this Lease shall control); (c) the rent due under any Permitted Sublease shall be fixed rent and shall not be based on the net profits of any Subtenant; (d) unless otherwise mutually agreed upon by Lessor and the related Subtenant, the Permitted Sublease shall terminate upon the expiration or sooner termination of this Lease (including any renewals hereof), provided that the related Subtenant agrees to attorn to Lessor if Lessor elects to assume the Permitted Sublease following a termination of this Lease; (e) Lessee shall at all times remain liable under this Lease irrespective of any Permitted Sublease; and (f) the related Property shall be used and occupied only as a Permitted Facility.
ARTICLE XV
 
NOTICES
Section 15.01.     Notices.  All notices, demands, designations, certificates, requests, offers, consents, approvals, appointments and other instruments given pursuant to this Lease shall be in writing and given by any one of the following: (a) hand delivery; (b) express overnight delivery service; (c) certified or registered mail, return receipt requested; or (d) email transmission, and shall be deemed to have been delivered upon (i) receipt, if hand delivered; (ii) the next Business Day, if delivered by a reputable express overnight delivery service; (iii) the third Business Day following the day of deposit of such notice with the United States Postal Service, if sent by certified or registered mail, return receipt requested; or (iv) transmission, if delivered by email transmission.  Notices shall be provided to the parties and addresses (or electronic mail addresses) specified below:

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	If to Lessee:
	Real Time Logic, Inc.
12515 Academy Ridge View
Colorado Springs, CO 80921
Attention:   Director of Operations
Email: shamilton@rtlogic.com

	With a copy to:
	Kratos Defense & Security Solutions, Inc.
4820 Eastgate Mall, Suite 200
San Diego, CA 92121
Attention:  General Counsel
Email: marie.mendoza@kratosdefense.com

	If to Lessor:
	STORE Capital Acquisitions, LLC
8377 E. Hartford Drive, Suite 100
Scottsdale, AZ 85255   
Attention:   Michael T. Bennett
                Executive Vice President – General Counsel
Email: mbennett@storecapital.com 

	With a copy to:
	Kutak Rock LLP
1801 California Street, Suite 3000
Denver, CO 80202
Attention:   Kristine Poston, Esq.
Email: kristine.poston@kutakrock.com 

or to such other address or such other person as either party may from time to time hereafter specify to the other party in a notice delivered in the manner provided above.
ARTICLE XVI
LANDLORD’S LIEN / SECURITY INTEREST
Section 16.01.     Landlord’s Lien and Security Interest.  Lessee agrees that Lessor shall have a landlord’s lien, in, on and against all of Lessee’s right, title and interest in, to and under all Personalty, which lien and security interest shall secure the payment of all Rental and other Monetary Obligations payable by Lessee to Lessor under the terms hereof and all other obligations of Lessee to Lessor under this Lease.  Lessee agrees that Lessor may file such documents as Lessor then deems appropriate or necessary to perfect and maintain said lien and security interest, and expressly acknowledges and agrees that, in addition to any and all other rights and remedies of Lessor whether hereunder or at Law or in equity, in the Event of Default of Lessee hereunder, Lessor shall have any and all rights and remedies granted a secured party under the Uniform Commercial Code then in effect in the state where the  Property is located.  Lessee covenants to promptly notify Lessor of any changes in Lessee’s name and/or organizational structure which may necessitate the execution and filing of additional financing statements; provided, however, the foregoing shall not be construed as Lessor’s consent to such changes.

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Section 16.02.     Landlord Subordination.  Notwithstanding anything contain in Section 16.01 to the contrary, Lessee shall have the right from time to time during the Lease Term and without Lessor’s further approval, written or otherwise, to grant a security interest in Lessee’s property (including the Personalty) to Lessee’s and/or Guarantor’s institutional lenders (“Lessee’s Institutional Lenders”) in connection with Lessee’s and Guarantor’s financing arrangements. Lessor agrees to execute such subordinations and other related documents related to the Lessor subordination described herein (except amendments to this Lease unless Lessor hereafter consents) as Lessee’s Institutional Lender may reasonably request and in a form acceptable to Lessor in connection with any such financing.

ARTICLE XVII
 
MISCELLANEOUS
Section 17.01.     Force Majeure.  Any prevention, delay or stoppage due to strikes, lockouts, acts of God, enemy or hostile governmental action, civil commotion, fire or other casualty beyond the control of the party obligated to perform (each, a “Force Majeure Event”) shall excuse the performance by such party for a period equal to any such prevention, delay or stoppage, expressly excluding, however, the obligations imposed upon Lessee with respect to Rental and other Monetary Obligations to be paid hereunder.
Section 17.02.     No Merger.  There shall be no merger of this Lease nor of the leasehold estate created by this Lease with the fee estate in or ownership of the Property by reason of the fact that the same person, corporation, firm or other entity may acquire or hold or own, directly or indirectly, (a) this Lease or the leasehold estate created by this Lease or any interest in this Lease or in such leasehold estate, and (b) the fee estate or ownership of the Property or any interest in such fee estate or ownership.  No such merger shall occur unless and until all persons, corporations, firms and other entities having any interest in (i) this Lease or the leasehold estate created by this Lease, and (ii) the fee estate in or ownership of the Property or any part thereof sought to be merged shall join in a written instrument effecting such merger and shall duly record the same.
Section 17.03.     Interpretation.  Lessor and Lessee acknowledge and warrant to each other that each has been represented by independent counsel and has executed this Lease after being fully advised by said counsel as to its effect and significance. This Lease shall be interpreted and construed in a fair and impartial manner without regard to such factors as the party which prepared the instrument, the relative bargaining powers of the parties or the domicile of any party.  Whenever in this Lease any words of obligation or duty are used, such words or expressions shall have the same force and effect as though made in the form of a covenant.
Section 17.04.     Characterization.  The following expressions of intent, representations, warranties, covenants, agreements, stipulations and waivers are a material inducement to Lessor entering into this Lease:

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(a)    Lessor and Lessee intend that (i)  this Lease is a “true lease,” is not a financing lease, capital lease, mortgage, equitable mortgage, deed of trust, trust agreement, security agreement or other financing or trust arrangement, and the economic realities of this Lease are those of a true lease; and (ii) the business relationship created by this Lease and any related documents is solely that of a long-term commercial lease between Lessor and Lessee, the Lease has been entered into by both parties in reliance upon the economic and legal bargains contained herein, and none of the agreements contained herein is intended, nor shall the same be deemed or construed, to create a partnership (de facto or de jure) between Lessor and Lessee, to make them joint venturers, to make Lessee an agent, legal representative, partner, subsidiary or employee of Lessor, nor to make Lessor in any way responsible for the debts, obligations or losses of Lessee.
(b)    Lessor and Lessee covenant and agree that: (i) each intends to treat this Lease as an operating lease pursuant to Accounting Standards Codification 840 or 842 Leases, as may be amended from time to time, and as a true lease for state Law reporting purposes and for federal income tax purposes; (ii) each party will not, nor will it permit any Affiliate to, at any time, take any action or fail to take any action with respect to the preparation or filing of any statement or disclosure to Governmental Authority, including without limitation, any income tax return (including an amended income tax return), to the extent that such action or such failure to take action would be inconsistent with the intention of the parties expressed in this Section 17.04; (iii) with respect to the Property, the Lease Term is less than seventy-five percent (75%) of the estimated remaining economic life of the Property; and (iv) the Base Annual Rental is the fair market value for the use of the Property and was agreed to by Lessor and Lessee on that basis, and the execution and delivery of, and the performance by Lessee of its obligations under, this Lease do not constitute a transfer of all or any part of the Property.
(c)    Lessee waives any claim or defense based upon the characterization of this Lease as anything other than a true lease of the Property.  Lessee stipulates and agrees (i) not to challenge the validity, enforceability or characterization of the lease of the Property as a true lease of the Property; and (ii) not to assert or take or omit to take any action inconsistent with the agreements and understandings set forth in this Section 17.04.  
Section 17.05.     Disclosures.  
(a)    Securities Act or Exchange Act.  The parties agree that, notwithstanding any provision contained in this Lease, any party (and each employee, representative or other agent of any party) may disclose to any and all persons, without limitation of any kind, any matter required under the Securities Act or the Exchange Act.
(b)    Lessor Advertising and Related Publications.  Each party shall obtain the other party’s prior written consent before such other party’s name, trademarks, logos, pictures of stores and signage, and basic Transaction information (collectively “Company Information”) is used in connection with any sales, advertising, and press release materials, including on the requesting party’s website.  

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(c)    Public Disclosures.  Except as required by Law, neither party shall make any public disclosure, including press releases or any form of media release, of this Lease Agreement or any transactions relating hereto without the prior written consent of the other.
Section 17.06.     Attorneys’ Fees.  In the event of any judicial or other adversarial proceeding concerning this Lease, to the extent permitted by Law, the prevailing party shall be entitled to recover all of its reasonable attorneys’ fees and other Costs in addition to any other relief to which it may be entitled.  
Section 17.07.     Memorandum of Lease.  Concurrently with the execution of this Lease, Lessor and Lessee are executing Lessor’s standard form memorandum of lease in recordable form, indicating the names and addresses of Lessor and Lessee, a description of the Property, the Lease Term, but omitting Rentals and such other terms of this Lease as Lessor may not desire to disclose to the public.  Further, upon Lessor’s reasonable request, Lessee agrees to execute and acknowledge a termination of lease and/or quitclaim deed in recordable form to be held by Lessor until the expiration or sooner termination of the Lease Term.
Section 17.08.     No Brokerage.  Lessor and Lessee represent and warrant to each other that they have had no conversation or negotiations with any broker, other than Olive Real Estate Group (whose fees will be paid in accordance with the terms of the Disbursement Agreement) concerning the leasing of the Property.  Each of Lessor and Lessee agrees to protect, defend (using counsel chosen by Lessee and approved by Lessor), indemnify, save and keep harmless the other, against and from all liabilities, claims, losses, Costs, damages and expenses, including reasonable attorneys’ fees, arising out of, resulting from or in connection with their breach of the foregoing warranty and representation.
Section 17.09.     Waiver of Jury Trial and Certain Damages.  LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE’S USE OR OCCUPANCY OF THE PROPERTY, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY.  THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.  FURTHERMORE, LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER PARTY AND ANY OF THE AFFILIATES, OFFICERS, DIRECTORS, MEMBERS, MANAGERS OR EMPLOYEES OF LESSOR OR LESSEE, AS APPLICABLE, OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.  THE WAIVER BY LESSOR AND LESSEE OF ANY RIGHT EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.

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Section 17.10.     Securitizations.  As a material inducement to Lessor’s willingness to enter into the Transactions contemplated by this Lease and the other Transaction Documents, Lessee hereby acknowledges and agrees that Lessor may, from time to time and at any time (a) advertise, issue press releases, send direct mail or otherwise disclose information regarding the Transaction for marketing purposes with Lessee’s prior written consent; and (b) (i) act or permit another Person to act as sponsor, settler, transferor or depositor of, or a holder of interests in, one or more Persons or other arrangements formed pursuant to a trust agreement, indenture, pooling agreement, participation agreement, sale and servicing agreement, limited liability company agreement, partnership agreement, articles of incorporation or similar agreement or document; and (ii) permit one or more of such Persons or arrangements to offer and sell stock, certificates, bonds, notes, other evidences of indebtedness or securities that are directly or indirectly secured, collateralized or otherwise backed by or represent a direct or indirect interest in whole or in part in any of the assets, rights or properties described in Section 14.01 of this Lease, in one or more Persons or arrangements holding such assets, rights or properties, or any of them (collectively, the “Securities”), whether any such Securities are privately or publicly offered and sold, or rated or unrated (any combination of which actions and transactions described in both clauses (i) and (ii) in this paragraph, whether proposed or completed, are referred to in this Lease as a “Securitization”).  Lessee shall cooperate fully with Lessor and any Affected Party with respect to all reasonable requests and due diligence procedures and use reasonable efforts to facilitate such Securitization, provided that such cooperation shall be at no additional cost or expense to Lessee so long as Lessee is not otherwise required to provide such information to Lessor pursuant to the other provisions of this Lease.
Section 17.11.     State‐Specific Provisions.  The provisions and/or remedies which are set forth on the attached Exhibit D shall be deemed a part of and included within the terms and conditions of this Lease.
Section 17.12.     Time is of the Essence; Computation.  Time is of the essence with respect to each and every provision of this Lease.  If any deadline provided herein falls on a non-Business Day, such deadline shall be extended to the next day that is a Business Day.
Section 17.13.     Waiver and Amendment.  No provision of this Lease shall be deemed waived or amended except by a written instrument unambiguously setting forth the matter waived or amended and signed by the party against which enforcement of such waiver or amendment is sought.  Waiver of any matter shall not be deemed a waiver of the same or any other matter on any future occasion.  No acceptance by Lessor of an amount less than the Rental and other Monetary Obligations stipulated to be due under this Lease shall be deemed to be other than a payment on account of the earliest such Rental or other Monetary Obligations then due or in arrears nor shall any endorsement or statement on any check or letter accompanying any such payment be deemed a waiver of Lessor’s right to collect any unpaid amounts or an accord and satisfaction.
Section 17.14.     Successors Bound.  Except as otherwise specifically provided herein, the terms, covenants and conditions contained in this Lease shall bind and inure to the benefit of the respective heirs, successors, executors, administrators and assigns of each of the parties hereto.

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Section 17.15.     Captions.  Captions are used throughout this Lease for convenience of reference only and shall not be considered in any manner in the construction or interpretation hereof.
Section 17.16.     Other Documents.  Each of the parties agrees to sign such other and further documents as may be reasonably necessary or appropriate to carry out the intentions expressed in this Lease.
Section 17.17.     Entire Agreement.  This Lease and any other instruments or agreements referred to herein, constitute the entire agreement between the parties with respect to the subject matter hereof, and there are no other representations, warranties or agreements except as herein provided.
Section 17.18.     Forum Selection; Jurisdiction; Venue; Choice of Law.  For purposes of any action or proceeding arising out of this Lease, the parties hereto expressly submit to the jurisdiction of all federal and state courts located in the state where the Property is located.  Lessee and Lessor each consents that it may be served with any process or paper by registered mail or by personal service within or without the state where the Property is located in accordance with applicable Law.  Furthermore, Lessee waives and agrees not to assert in any such action, suit or proceeding that it is not personally subject to the jurisdiction of such courts, that the action, suit or proceeding is brought in an inconvenient forum or that venue of the action, suit or proceeding is improper.  This Lease shall be governed by, and construed with, the Laws of the applicable state in which the Property is located, without giving effect to any state’s conflict of Laws principles.
Section 17.19.     Counterparts.  This Lease may be executed in one or more counterparts, each of which shall be deemed an original.  Furthermore, the undersigned agree that transmission of this Lease via e-mail in a “.pdf” or other electronic format shall be deemed transmission of the original Lease for all purposes.
ARTICLE XVIII 
 
RIGHT OF FIRST REFUSAL
Section 18.01.     Offer. Subject to the terms and conditions set forth in this Section Article XVIII, if Lessor desires to sell the Property and receives a bona fide written offer from a third party which offer is in all respects acceptable to Lessor, Lessor shall deliver a complete copy of such bona fide third party offer to Lessee (“Third Party Offer”).  Within twenty-one (21) days of Lessee’s receipt of the first Third Party Offer delivered hereunder, and within fifteen (15) days of Lessee’s receipt of subsequent Third Party Offer from Lessor, and a written statement of Lessor’s desire to sell the Property in accordance with such Third Party Offer, Lessee shall have the right to deliver an offer to Lessor (“Purchase Offer”) to purchase Lessor’s interest in any such Property for the amount of the bona fide third party offer to purchase the Property (the “Subject Purchase Price”).  Lessee shall complete such purchase, subject to the satisfaction of each of the terms and conditions set forth in Section 18.02 below.    

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Section 18.02.     Conditions Precedent.
(a)    The purchase of Lessor’s interest in the Property pursuant to Section 18.01 shall be subject to the fulfillment of all of the following terms and conditions: (i) no Event of Default shall have occurred and be continuing under this Lease or other Transaction Documents; (ii) Lessee shall have paid to Lessor the Subject Purchase Price, together with all Rental and other Monetary Obligations then due and payable under this Lease as of the date of the closing of such purchase; (iii) in addition to payment of the Subject Purchase Price, Lessee shall have satisfied its obligations under Section 18.03 below; and (iv) the date of the closing of such purchase shall occur within sixty (60) days of Lessor’s receipt of the Purchase Offer.
(b)    On the date of the closing of the purchase of a Property pursuant to this Section (the “Purchase Closing Date”), subject to satisfaction of the foregoing conditions: (i) this Lease shall be deemed terminated; provided, however, such termination shall not limit Lessee’s obligations to Lessor under any indemnification provisions of this Lease and Lessee’s obligations to pay any Monetary Obligations (whether payable to Lessor or a third party) accruing under this Lease with respect to such Property prior to the Purchase Closing Date shall survive the termination of this Lease; and (ii) Lessor shall convey such Property to Lessee “as is” by special warranty deed, subject to all matters of record (except for any consensual liens granted by Lessor other than those granted by Lessor at the request of Lessee), and without representations or warranty.
Section 18.03.     Costs.  Lessee shall be solely responsible for the payment of all Costs, whether or not the purchase is consummated that the third party was willing to be responsible for under the Third Party Offer.
Section 18.04.     Termination of Right.  NOTWITHSTANDING ANYTHING TO THE CONTRARY, LESSEE’S RIGHTS UNDER THIS ARTICLE XVIII SHALL TERMINATE AND BE NULL AND VOID AND OF NO FURTHER FORCE AND EFFECT IF (i) LESSEE FAILS TO EXERCISE THE RIGHT GRANTED PURSUANT TO THIS ARTICLE, AND THE SALE TO THE THIRD PARTY PURCHASER IS CONSUMMATED; (ii) THIS LEASE TERMINATES OR THE LEASE TERM EXPIRES; (iii) THE PROPERTY IS SOLD OR TRANSFERRED PURSUANT TO THE EXERCISE OF A PRIVATE POWER OF SALE OR JUDICIAL FORECLOSURE OR ACCEPTANCE OF A DEED IN LIEU THEREOF; OR (iv) LESSEE SHALL BE IN DEFAULT OF ANY OF THE TERMS AND CONDITIONS OF THIS LEASE OR IF ANY CONDITION SHALL EXIST WHICH UPON THE GIVING OF NOTICE OR THE PASSAGE OF TIME, OR BOTH, WOULD CONSTITUTE A DEFAULT BY LESSEE UNDER THIS LEASE.  IN ANY SUCH EVENT, LESSEE SHALL EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LESSOR SHALL REASONABLY REQUEST EVIDENCING THE TERMINATION OF ITS RIGHT UNDER THIS SECTION 18.04.
Section 18.05.     Attornment.  If Lessee does not deliver its Purchase Offer to purchase the Property and the Property is transferred to a third party purchaser, Lessee will attorn to any third party purchaser as Lessor so long as such third party purchaser and Lessor notify Lessee in writing of such transfer and so long as there is no material increase to Lessee’s obligations under this Lease.  At the request of Lessor, Lessee will execute such documents confirming the agreement referred to above and such other agreements as Lessor may reasonably request, provided that such agreements do not increase the liabilities and obligations of Lessee hereunder.

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Section 18.06.     Exclusions.  The provisions of this Article XVIII shall not apply to or prohibit (i) any mortgages or other hypothecation of Lessor’s interest in the Property; (ii) any sale of the Property pursuant to a private power of sale under or judicial foreclosure of any mortgage or other security instrument or device to which Lessor’s interest in the Property is now or hereafter subject; (iii) any transfer of Lessor’s interest in the Property to a mortgagee or other holder of a security interest therein or their designees by deed in lieu of foreclosure; (iv) any transfer of the Property to any governmental or quasi-governmental agency with power of Condemnation; (v) any transfer of the Property to any Affiliate of Lessor; (vi) any transfers of interests in Lessor by any member, shareholder, partner or other owner to any other member, shareholder, partner or other owner; and (vii) any transfers to any Person to whom Lessor sells all or substantially all of its assets.
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IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of the date first above written.
	
		
	 
	LESSOR:
STORE CAPITAL ACQUISITIONS, LLC,  
a Delaware limited liability company
By:  /s/Michael T. Bennett
Printed Name:  Michael T. Bennett
Title:  Executive Vice President, General Counsel

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	LESSEE:
REAL TIME LOGIC, INC.,  
a Colorado corporation
By:  /s/ Michael W. Fink
Printed Name:  Michael W. Fink
Title:  Vice President, Contracts

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EXHIBITS
Exhibit A:    Defined Terms 
 
Exhibit B:    Legal Description and Street Address of the Property 
 
Exhibit C:    Wire Instructions 
 
Exhibit D:    State‐Specific Provisions
Schedule 8.01    Prohibited Uses

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EXHIBIT A 
 
DEFINED TERMS
The following terms shall have the following meanings for all purposes of this Lease:
“Additional Rental” has the meaning set forth in Section 4.03.
“Adjustment Date” has the meaning set forth in Section 1.07.
“Affected Party” means each direct or indirect participant or investor in a proposed or completed Securitization, including, without limitation, any prospective owner, any rating agency or any party to any agreement executed in connection with the Securitization.
“Affiliate” means any Person which directly or indirectly controls, is under common control with or is controlled by any other Person.  For purposes of this definition, “controls,” “under common control with,” and “controlled by” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or otherwise.
“Anti‐Money Laundering Laws” means all applicable Laws, regulations and government guidance on the prevention and detection of money laundering, including, without limitation, (a) 18 U.S.C. §§ 1956 and 1957; and (b) the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., and its implementing regulations, 31 CFR Part 103.
“Base Annual Rental” has the meaning set forth in Section 1.05.
“Base Monthly Rental” means an amount equal to 1/12 of the applicable Base Annual Rental.
“Business Day” means a day on which banks located in Scottsdale, Arizona are not required or authorized to remain closed.
“Casualty” means any loss of or damage to any property included within or related to the Property or arising from an adjoining property caused by an Act of God, fire, flood or other catastrophe.
“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.
“Condemnation” means a Taking and/or a Requisition.
“Costs” means all reasonable costs and expenses incurred by a Person, including, without limitation, reasonable attorneys’ fees and expenses, court costs, expert witness fees, costs of tests and analyses, travel and accommodation expenses, deposition and trial transcripts, copies and other similar costs and fees, brokerage fees, escrow fees, title insurance premiums, appraisal fees, stamp taxes, recording fees and transfer taxes or fees, as the circumstances require.

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“Default Rate” means 18% per annum or the highest rate permitted by Law, whichever is less. 
“Disbursement Agreement” means that certain Development and Disbursement Agreement dated as of the date hereof by and between STORE Capital Acquisitions, LLC and ViaWest Properties, LLC, and acknowledged and agreed to by Lessee, related to the construction of the New Building within the New Building Area.
“Effective Date” has the meaning set forth in the introductory paragraph of this Lease.
“Entire Parcel” has the meaning set forth in Section 2.03.  
“Environmental Laws” means federal, state and local Laws, ordinances, common law requirements and regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees having the effect of Law in effect now or in the future and including all amendments, that relate to Hazardous Materials, Regulated Substances, USTs, and/or the protection of human health or the environment, or relating to liability for or Costs of Remediation or prevention of Releases, and apply to Lessee and/or the Property.
“Environmental Liens” means any liens and other encumbrances imposed pursuant to any Environmental Law.
“Event of Default” has the meaning set forth in Section 12.01.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Expenditure Cap” has the meaning set forth in Section 7.01(b).
“Extension Option” has the meaning set forth in Section 3.02.
“Extension Term” has the meaning set forth in Section 3.02.
“First Deposit Return” has the meaning set forth in Section 4.09(c)(i).
“Force Majeure Event” has the meaning set forth in Section 17.01.
“GAAP” means generally accepted accounting principles, consistently applied from period to period.
“Governmental Authority” means any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi‐governmental authority of the United States, any state or any political subdivision thereof with authority to adopt, modify, amend, interpret, give effect to or enforce any federal, state and local Laws, statutes, ordinances, rules or regulations, including common law, or to issue court orders.
“Guarantor” means Kratos Defense & Security Solutions, Inc., a Delaware corporation, or any additional or replacement guarantor(s) approved by Lessor in its reasonable discretion.

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“Guaranty” means that certain Unconditional Guaranty of Payment and Performance dated as of the date hereof given by Guarantor for the benefit of Lessor, as the same may be amended from time to time.
“Hazardous Materials” includes: (a) oil, petroleum products, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other materials, contaminants or pollutants, the presence of which causes the Property to be in violation of any local, state or federal Law or regulation, or Environmental Law, or are defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” “contaminants,” “pollutants,” or words of similar import under any applicable local, state or federal Law or under the regulations adopted, orders issued, or publications promulgated pursuant thereto, including, but not limited to: (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; (ii) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 5101, et seq.; (iii) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq.; and (iv) regulations adopted and publications promulgated pursuant to the aforesaid Laws; (b) asbestos in any form which is friable, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty (50) parts per million; (c) underground storage tanks; and (d) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority.
“Indemnified Parties” means Lessor, its members, managers, officers, directors, shareholders, partners, employees, affiliates, subsidiaries, successors and assigns, including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of the assets and business of Lessor.
“Initial Term” has the meaning set forth in Section 3.01.
“Insolvency Event” means (a) a Person’s making a general assignment for the benefit of creditors; (b) any proceeding being instituted by or against any Person (i) seeking to adjudicate it bankrupt or insolvent; (ii) seeking liquidation, dissolution, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any Law relating to bankruptcy, insolvency, or reorganization or relief of debtors; or (iii) seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property, and in the case of any such proceeding instituted against any Person, either such proceeding shall remain undismissed for a period of one hundred twenty (120) days or any of the actions sought in such proceeding shall occur; or (c) any Person taking any corporate action to authorize any of the actions set forth above in this definition.
“Insurance Premiums” has the meaning in Section 6.04.
“Law(s)” means any constitution, statute, rule of law, code, ordinance, order, judgment, decree, injunction, rule, regulation, policy, requirement or administrative or judicial determination, even if unforeseen or extraordinary, of every duly constituted Governmental Authority, court or agency, now or hereafter enacted or in effect.
“Lease Term” has the meaning described in Section 3.01.

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“Legal Requirements” means the requirements of all present and future Laws (including, without limitation, Environmental Laws and Laws relating to accessibility to, usability by, and discrimination against, disabled individuals), all judicial and administrative interpretations thereof, including any judicial order, consent, decree or judgment, and all covenants, restrictions and conditions now or hereafter of record which may be applicable to Lessee or to the Property, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or restoration of the Property, even if compliance therewith necessitates structural changes or improvements or results in interference with the use or enjoyment of the Property.
“Lender” means any lender in connection with any loan secured by Lessor’s interest in the Property, and any servicer of any loan secured by Lessor’s interest in the Property.
“Lessee Entity” or “Lessee Entities” means individually or collectively, as the context may require, Lessee and Guarantor. 
“Lessee Reporting Entities” means individually or collectively, as the context may require, Lessee and Guarantor.
“Lessee’s Information” has the meaning set forth in Section 17.05(b).
“Lessee’s Institutional Lenders” has the meaning set forth in Section 16.01.
“Lessor Entity” or “Lessor Entities” means individually or collectively, as the context may require, Lessor and all Affiliates of Lessor.
“Lessor Expenditure” has the meaning set forth in Section 7.01(b).
“Losses” means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, Costs, diminutions in value, fines, penalties, interest, charges, fees, judgments, awards, amounts paid in settlement and damages of whatever kind or nature, inclusive of bodily injury and property damage to third parties (including, without limitation, attorneys’ fees and other Costs of defense).
“Material Adverse Effect” means a material adverse effect on (a) the Property, including without limitation, the operation of the Property as a Permitted Facility and/or the value of the Property; (b) Lessee’s ability to perform its obligations under this Lease; (c) Lessor’s interests in the Property, this Lease or the other Transaction Documents; or (d) Guarantor’s ability to perform its obligations under the Guaranty.
“Monetary Obligations” means all Rental and all other sums payable or reimbursable by Lessee under this Lease to Lessor, to any third party on behalf of Lessor, or to any Indemnified Party.
“Mortgage” means, collectively, the mortgages, deeds of trust or deeds to secure debt, assignments of rents and leases, security agreements and fixture filings executed by Lessor for the benefit of Lender with respect to the Property, as such instruments may be amended, modified, restated or supplemented from time to time and any and all replacements or substitutions.

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“Net Award” means (a) the entire award payable with respect to a Property by reason of a Condemnation whether pursuant to a judgment or by agreement or otherwise; or (b) the entire proceeds of any insurance required under Section 6.03 payable with respect to a Property, as the case may be, and in either case, less any Costs incurred by Lessor in collecting such award or proceeds.
“New Building” means the to-be-constructed improvements to be located within the New Building Area.  
“New Building Area” means the unshaded portion of the Entire Parcel depicted on the drawing on Exhibit B attached hereto, all rights, privileges, and appurtenances associated therewith, and all buildings, fixtures and other improvements now or hereafter located in such unshaded area of the Entire Parcel (whether or not affixed to such real estate).
“New Building Lease” means that certain Lease Agreement among Lessor and Lessee dated as of the Effective Date with respect to the New Building Area.
“OFAC Laws” means Executive Order 13224 issued by the President of the United States, and all regulations promulgated thereunder, including, without limitation, the Terrorism Sanctions Regulations (31 CFR Part 595), the Terrorism List Governments Sanctions Regulations (31 CFR Part 596), the Foreign Terrorist Organizations Sanctions Regulations (31 CFR Part 597), and the Cuban Assets Control Regulations (31 CFR Part 515), and all other present and future federal, state and local Laws, ordinances, regulations, policies, lists (including, without limitation, the Specially Designated Nationals and Blocked Persons List) and any other requirements of any Governmental Authority (including without limitation, the U.S. Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and acts of war, each as supplemented, amended or modified from time to time after the Effective Date, and the present and future rules, regulations and guidance documents promulgated under any of the foregoing, or under similar Laws, ordinances, regulations, policies or requirements of other states or localities.
“Other Agreements” means, collectively, all agreements and instruments now or hereafter entered into between, among or by (a) any of the Lessee Entities; and, or for the benefit of, (b) any of the Lessor Entities, including, without limitation, leases (including the New Building Lease), promissory notes and guaranties, but excluding this Lease and all other Transaction Documents.
“Partial Condemnation” has the meaning set forth in Section 11.03.
“Permitted Amounts” shall mean, with respect to any given level of Hazardous Materials or Regulated Substances, that level or quantity of Hazardous Materials or Regulated Substances in any form or combination of forms which does not constitute a violation of any Environmental Laws and is customarily employed in, or associated with, similar businesses located in the state where the Property is located.
“Permitted Facility” means general office purposes, labs, storage and warehousing and any other lawful purpose common to and suitable for modern suburban office buildings in Colorado Springs, CO, except for the “Prohibited Uses” described in Schedule 8.01 attached hereto.  

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“Person” means any individual, partnership, corporation, limited liability company, trust, unincorporated organization, Governmental Authority or any other form of entity.
“Personalty” means any and all “goods” (excluding “inventory,” and including, without limitation, all “equipment,” “fixtures,” appliances and furniture (as “goods,” “inventory,” “equipment” and “fixtures” are defined in the applicable Uniform Commercial Code then in effect in the applicable jurisdiction)) from time to time situated on or used in connection with the  Property, whether now owned or held or hereafter arising or acquired, together with all replacements and substitutions therefore and all cash and non-cash proceeds (including insurance proceeds and any title and UCC insurance proceeds) and products thereof, and, in the case of tangible collateral, together with all additions, attachments, accessions, parts, equipment and repairs now or hereafter attached or affixed thereto or used in connection therewith.
“Price Index” means the Consumer Price Index which is designated for the applicable month of determination as the United States City Average for All Urban Consumers, All Items, Not Seasonally Adjusted, with a base period equaling 100 in 1982 ‐ 1984, as published by the United States Department of Labor’s Bureau of Labor Statistics or any successor agency.  In the event that the Price Index ceases to be published, its successor index measuring cost of living as published by the same Governmental Authority which published the Price Index shall be substituted and any necessary reasonable adjustments shall be made by Lessor and Lessee in order to carry out the intent of Section 4.02.  In the event there is no successor index measuring cost of living, Lessor shall reasonably select an alternative price index measuring cost of living that will constitute a reasonable substitute for the Price Index.
“Property” means the shaded portion of the Entire Parcel depicted on the drawing on Exhibit B attached hereto, all rights, privileges, and appurtenances associated therewith, and all buildings, fixtures and other improvements now or hereafter located in such shaded area of the Entire Parcel (whether or not affixed to such real estate), but excluding Personalty.
“Purchase Closing Date” has the meaning set forth in Section 18.02(b).
“Purchase Offer” has the meaning set forth in Section 18.01.
“Real Estate Taxes” has the meaning set forth in Section 6.04.
“Regulated Substances” means “petroleum” and “petroleum‐based substances” or any similar terms described or defined in any of the Environmental Laws and any applicable federal, state, county or local Laws applicable to or regulating USTs.
“REIT” means a real estate investment trust as defined under Section 856 of the Code.
“Release” means any presence, release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials, Regulated Substances or USTs or any Threatened Release.
“Remediation” means any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Materials, Regulated Substances or USTs, any actions to prevent, cure or mitigate any Release, any action 

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to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or any evaluation relating to any Hazardous Materials, Regulated Substances or USTs.
“Rental” means, collectively, the Base Annual Rental and the Additional Rental.
“Rental Adjustment” means an amount equal to the lesser of (a) 2% of the Base Annual Rental in effect immediately prior to the applicable Adjustment Date, or (b) the product of (i) the percentage change between the Price Index for the month which is two months prior to the Effective Date or the Price Index used for the immediately preceding Adjustment Date, as applicable, and the Price Index for the month which is two months prior to the applicable Adjustment Date; and (ii) the then current Base Annual Rental.
“Requisition” means any temporary requisition or confiscation of the use or occupancy of the Property by any Governmental Authority, civil or military, whether pursuant to an agreement with such Governmental Authority in settlement of or under threat of any such requisition or confiscation, or otherwise.
“Reserve” has the meaning in Section 6.04.
“Securities” has the meaning set forth in Section 17.10.
“Securities Act” means of the Securities Act of 1933, as amended.
“Securitization” has the meaning set forth in Section 17.10.
“Security Deposit” has the meaning set forth in Section 4.09(a).
“Subject Purchase Price” has the meaning set forth in Section 18.01.
“Successor Lessor” has the meaning set forth in Section 13.03.
“Taking” means (a) any taking or damaging of all or a portion of the Property (i) in or by condemnation or other eminent domain proceedings pursuant to any Law, general or special; (ii) by reason of any agreement with any condemnor in settlement of or under threat of any such condemnation or other eminent domain proceeding; or (iii) by any other means; or (b) any de facto condemnation.  The Taking shall be considered to have taken place as of the later of the date actual physical possession is taken by the condemnor, or the date on which the right to compensation and damages accrues under the Law applicable to the Property.
“Temporary Taking” has the meaning set forth in Section 11.04.
“Third Party Offer” has the meaning set forth in Section 18.01.
“Threatened Release” means a substantial likelihood of a Release which requires action to prevent or mitigate damage to the soil, surface waters, groundwaters, land, stream sediments, surface or subsurface strata, ambient air or any other environmental medium comprising or surrounding the Property which may result from such Release.

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“Total Condemnation” has the meaning set forth in Section 11.02.
“Transaction” has the meaning set forth in Section 14.01.
“Transaction Documents” means this Lease, the Guaranty and all documents related thereto.
“U.S. Publicly Traded Entity” means an entity whose securities are listed on a national securities exchange or quoted on an automated quotation system in the United States or a wholly‐owned subsidiary of such an entity.
“USTs” means any one or combination of tanks and associated product piping systems used in connection with storage, dispensing and general use of Regulated Substances.
“Warranties” has the meaning set forth in Section 2.04.

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EXHIBIT B 
 
LEGAL DESCRIPTION AND 
STREET ADDRESS OF THE PROPERTY
Property:  The “Property” initially being leased by Lessee consists of the real property and improvements representing the shaded portion of the Entire Parcel depicted in the drawing below.    
New Building Area:  The “New Building Area” means the real property and improvements representing the unshaded portion of the Entire Parcel depicted in the drawing below.

Address and Legal Description of the Entire Parcel: 

12515 and 12575 Academy Ridge View, Colorado Springs, CO 80921

Lot 1 in RT Logic Subdivision Filing No. 1, as amended by Affidavit of Correction, recorded October 17, 2005 at Reception No. 205165253 and Affidavit of Agreement recorded November 9, 2005 at Reception No. 205180227 in the City of Colorado Springs, County of El Paso, State of Colorado.

Drawing of the Entire Parcel (including the Property (i.e., shaded portion of the Entire Parcel) and the New Building Area (i.e., unshaded portion of the Entire Parcel)):  (see next page)

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EXHIBIT C 
 
INCOMING WIRE INSTRUCTIONS

Please give these instructions to your bank when you initiate a wire payment to STORE CAPITAL ACQUISITIONS, LLC: 
	
		
	Bank Name:
	PNC Bank

	 
	500 First Ave, 3rd Floor

	 
	Pittsburgh, PA 15219

	ABA:
	043000096

	Account No.:
	1006967647

	Credit:
	Midland Wire Receipts

	Reference:
	RT Logic (Kratos)

* This information must be completed fully and accurately to ensure  
that there is no delay in crediting funds to the proper account.

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EXHIBIT D 
 
STATE‐SPECIFIC PROVISIONS
None. 

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SCHEDULE 8.01

PROHIBITED USES

1.    Adult bookstore, video store or other establishment engaged in the business of selling, renting, exhibiting or delivering pornographic or obscene materials, except that this provision shall not prohibit (a) book stores that are not perceived to be and do not hold themselves out as an “adult book store” and are primarily engaged in the sale of general audience books notwithstanding the incidental concurrent sale of books. magazines and/or periodicals that may contain pornographic materials, or (b) video stores primarily selling or renting video media that on the date of this Lease would be “G” “PG-13” or “R” rated (or an equivalent rating under any rating system that hereafter replaces the current system and is in general use), notwithstanding the incidental concurrent rental of “X-rated” or “Not Rated” video media solely for off premises viewing and without means of on premises review in connection with its selection; provided that such bookstore or video store does not engage in any promotion, advertising, depiction or description of any aspect of the X-rated or Not Rated” material of any kind, that the sale or rental thereof is not from any special or segregated section of the store, and that the sale or rental of such material to minors is prohibited;

2.    So-called “head shops” or other establishments primarily engaged in the sale of merchandise that facilitates enhances, promotes or encourages the use of illegal drugs under federal, state and/or local law;

3.    Off-track betting parlor;

4.    Pawn shop;

5.    “Second hand,” “slightly used” or other businesses or activities primarily engaged in the sale of used merchandise;

6.    Junk yard or flea market;

7.    Stockyard or recycling facility;

8.    Motor vehicle or boat storage facility;

9.    Billiard parlor;

10.    Dry cleaning or laundry plant (which shall not preclude a dry cleaning or laundry business);

11.    Living quarters, sleeping apartments, or lodging rooms;

12.     Mortuary;

13.    Massage parlor; or

14.    Refining, quarrying or mining operations of any kind.

	
			
	 
	 
	 

4830-8668-1413.9 
STORE / RT Logic (Kratos)
Lease Agreement (Existing Building Area)
File No.: 7210/02-525.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00273-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00273-of-00352.parquet"}]]